Exhibit 10.2
Execution Copy
WAIVER, CONSENT, PARTIAL RELEASE
AND SECOND AMENDMENT TO
AMENDED REVOLVING CREDIT AGREEMENT
AND LOAN DOCUMENTS
     WAIVER, CONSENT, PARTIAL RELEASE AND SECOND AMENDMENT, dated as of
February 28, 2007 (this “Agreement”), by and among Alon USA Energy, Inc., a
Delaware corporation (the “Parent”), Alon USA, LP, f/k/a SWBU, L.P., a Texas
limited partnership (“Alon LP”), Edgington Oil Company, LLC, f/k/a EOC
Acquisition, LLC, a Delaware limited liability company (“Edgington”; together
with Alon LP, each individually a “Borrower”, and, collectively, the
“Borrowers”), all direct and indirect subsidiaries of the Parent (other than
subsidiaries of Alon USA Interests, LLC, a Texas limited liability company, and
Paramount Petroleum Corporation, a Delaware corporation (“Paramount”), and the
subsidiaries of Paramount)(together with the Parent, collectively, the
“Guarantor Companies”), the Lenders (as defined below), Israel Discount Bank of
New York, as administrative agent, co-arranger and collateral agent for the
Lenders (in such capacity, the “Agent”), and Bank Leumi USA, as co-arranger for
the Lenders (“Bank Leumi”).
W I T N E S S E T H
     WHEREAS, the Borrowers, the Guarantor Companies, the financial institutions
from time to time party thereto (each a “Lender” and collectively, the
“Lenders”), the Agent and Bank Leumi are parties to the Amended Revolving Credit
Agreement, dated as of June 22, 2006, as amended by Amendment No. 1, dated as of
August 4, 2006 (as so amended, the “Credit Agreement”), pursuant to which the
Lenders have made revolving loans to the Borrowers;
     WHEREAS, the obligations of the Borrowers and the Guarantor Companies to
the Agent and the Lenders in respect of the Credit Agreement and the other Loan
Documents are secured, inter alia, by the collateral and other security
interests referred to in the Credit Agreement, the Security Agreement, the
Pledge Agreement and the other Security Documents;
     WHEREAS, the Borrowers, the Guarantor Companies, the Lenders, Bank Leumi
and the Agent wish to amend the Credit Agreement and the Loan Documents, in
order to (i) release Edgington, Paramount of Oregon, LLC, a Delaware limited
liability company (“Paramount Oregon”), Paramount of Washington, LLC, a Delaware
limited liability company (“Paramount Washington”), and Alon Asphalt
Bakersfield, Inc., a Delaware corporation (“Alon Bakersfield”; together with
Edgington, Paramount Oregon and Paramount Washington, collectively, the
“Released Parties”) from the agreements and the obligations contained therein in
connection with the provision by Bank of America, N.A (“Bank of America”) of a
secured financing facility to Paramount pursuant to the Second Amended and
Restated Credit Agreement, dated as of February 28, 2007 (the “Bank of America
Facility”), by and among the financial institutions from time to time parties
thereto (such financial institutions, together with their respective successors
and assigns, collectively, the “Bank of America Lenders”), Bank of America, as
administrative agent for the Bank of America Lenders and as the lead arranger
and bookmaker, Paramount Petroleum Corporation, a Delaware corporation, as
borrower, and the other Obligated Parties (as defined therein), in the maximum
principal amount of $300,000,000

 

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and (ii) exclude the Released Parties from certain provisions of the Credit
Agreement that would otherwise be applicable to such Subsidiaries of the Parent;
     WHEREAS, the Borrowers and the Guarantor Companies have requested that the
Agent and the Required Lenders (i) consent to and waive any Event of Default
that would or will otherwise arise under Section 10.01(c) or (d) of the Credit
Agreement as a result of a breach of Section 7.02(a) or (b) of the Credit
Agreement as a result of the execution of the Bank of America Facility and the
related loan documents thereunder, in each case, as such documents are in effect
on the date hereof, and the incurrence of up to $300,000,000 of indebtedness and
the creation of liens thereunder, (ii) consent to the release of the Agent’s
Liens on the Released Parties’ Capital Stock and all assets of the Released
Parties, and (iii) release the Released Parties from the Credit Agreement and
the other Loan Documents and all Obligations thereunder; and
     NOW THEREFORE, in consideration of the foregoing and the mutual covenants
herein contained, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereby agree as
follows:
     1. Definitions. Any capitalized term used herein and not defined shall have
the meaning assigned to it in the Credit Agreement.
     2. Amendments to Credit Agreement.
          (a) Preamble. The Preamble to the Credit Agreement is hereby amended
amended and restated in its entirety to read as follows:
     “AMENDED REVOLVING CREDIT AGREEMENT (this “Agreement”), dated as of
June 22, 2006 by and among Alon USA Energy, Inc., a Delaware corporation (the
“Parent”), Alon USA, LP, f/k/a SWBU, L.P., a Texas limited partnership (“Alon
LP”; and together with such other subsidiaries of the Parent as may be
designated as a borrower hereunder by Alon LP with the prior written consent of
the Agent and the Required Lenders (each as defined below), each individually a
“Borrower”, and, collectively, the “Borrowers”), all direct and indirect
subsidiaries of the Parent (other than subsidiaries of Alon Interests (as
defined below) and the Bank of America Financed Subsidiaries (as defined
below)), the financial institutions from time to time party hereto (each a
“Lender” and collectively, the “Lenders”), Israel Discount Bank of New York, as
administrative agent, co-arranger and collateral agent for the Lenders (in such
capacity, the “Agent”), and Bank Leumi USA, as co-arranger for the Lenders.”
          (b) New Definitions. Section 1.01 of the Credit Agreement is hereby
amended to add the following defined terms in the appropriate alphabetical
order:
     “Bank of America Financed Subsidiaries” means all direct or indirect
Subsidiaries of Paramount Petroleum Holdings other than Alon

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Pipeline Logistics, LLC, a Delaware limited liability company, and its
Subsidiaries.”
     “Edgington” means Edgington Oil Company, LLC, f/k/a EOC Acquisition LLC, a
Delaware limited liability company.”
          (c) Amendment and Restatement of Existing Definitions. The following
defined terms in Section 1.01 of the Credit Agreement are hereby amended and
restated in their entirety to read as follows:
     “Company” means all direct and indirect subsidiaries of the Parent
(including, without limitation, Alon Interests), other than Paramount and its
Subsidiaries, the Bank of America Financed Subsidiaries and Subsidiaries of Alon
Interests.”
     “Fixed Assets and Other Specified Property” means any (a) Fixed Assets,
(b) any Capital Stock issued by a Subsidiary of a Company and owned by a Company
(other than any Capital Stock of (i) the Bank of America Financed Subsidiaries
owned by Paramount Petroleum Holdings, (ii) Alon Interests owned by Alon LP and
(iii) any Subsidiary of Alon Interests), and (c) any Indebtedness owed by one
Company to another Company which is evidenced by a promissory note.”
     “Paramount Petroleum Holdings” means Alon Paramount Holdings, Inc., a
Delaware corporation and a wholly owned Subsidiary of Alon Assets.”
          (d) Deletion of an Existing Definition. The defined term “Paramount
Refinery” in Section 1.01 of the Credit Agreement is hereby deleted.
          (e) Interest Rate and Payment; Production Increase. Section 2.13(b) of
the Credit Agreement is hereby amended by replacing the words “Paramount and its
Subsidiaries” with the words “the Bank of America Financed Subsidiaries”
therein.
          (f) Interest Rate and Payment; Making a Request for a Facility
Sublimit Increase. Section 2.13(c) of the Credit Agreement is hereby amended by
replacing the words “Paramount and its Subsidiaries” with the words “the Bank of
America Financed Subsidiaries” therein.
          (g) Representations and Warranties; Subsidiaries. Section 6.01(f) of
the Credit Agreement is hereby amended by replacing the words “Paramount and of
its Subsidiaries” with the words “the Bank of America Financed Subsidiaries”
therein.
          (h) Affirmative Covenants; Subsidiaries, Etc. Section 7.01(b)(i) of
the Credit Agreement is hereby amended by replacing the words “Paramount and any
of its Subsidiaries” with the words “the Bank of America Financed Subsidiaries”
therein.

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          (i) Negative Covenants; Liens, Etc. Section 7.02(a) of the Credit
Agreement is hereby amended by replacing each occurrence of the words “Paramount
and its Subsidiaries” with the words “the Bank of America Financed Subsidiaries”
therein.
          (j) Negative Covenants; Indebtedness. Section 7.02(b) of the Credit
Agreement is hereby amended by replacing the words “Paramount and its
Subsidiaries” with the words “the Bank of America Financed Subsidiaries”
therein.
          (k) Negative Covenants; Merger, Consolidation, Sale of Assets, Etc.
Section 7.02(c) of the Credit Agreement is hereby amended by replacing each
occurrence of the words “Paramount and its Subsidiaries” with the words “the
Bank of America Financed Subsidiaries” therein.
          (l) Negative Covenants; Investments, Etc. Section 7.02(e) of the
Credit Agreement is hereby amended by replacing each occurrence of the words
“Paramount and its Subsidiaries” with the words “the Bank of America Financed
Subsidiaries” therein.
     3. Amendments to the Pledge Agreement and Security Agreement.
          (a) Section 2 of the Pledge Agreement is hereby amended by replacing
the words “Paramount, and its Subsidiaries” with the words “the Bank of America
Financed Subsidiaries” therein.
          (b) Section 2 of the Security Agreement is hereby amended by inserting
the following sentence at end of such Section:
“Anything to the contrary notwithstanding, Collateral shall not include the
Capital Stock of the Bank of America Financed Subsidiaries.”
     4. Waiver, Consent and Release. Subject to the satisfaction of the
conditions contained in Section 7 hereof and pursuant to Section 12.03 of the
Credit Agreement:
          (a) The Agent and the Required Lenders consent to, and waive any Event
of Default that would otherwise arise under Section 10.01(c) or (d) of the
Credit Agreement as a result of a breach of Section 7.02(a) or (b) of the Credit
Agreement by reason of the execution of the Bank of America Facility and the
related loan documents thereunder, in each case, as such documents are in effect
on the date hereof, and the incurrence of up to $300,000,000 of indebtedness and
the creation of liens thereunder.
          (b) The Agent and the Required Lenders hereby release their security
interest in and lien on the Capital Stock and all assets of the Released Parties
and release the Released Parties from the Credit Agreement and the other Loan
Documents and all Obligations thereunder.
     5. Releases of Security Interests and Liens.
          (a) Subject to the satisfaction of the conditions set forth in
Section 7 hereof, the Agent’s security interest in and lien on the Capital Stock
and assets of the Released

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Parties is hereby released without recourse, representation or warranty of any
kind, express or implied and at the sole cost and expense of Borrowers.
     (b) The Agent will, at the request of Administrative Borrower or the Bank
of America, execute and deliver, and hereby authorizes the Administrative
Borrower or the Bank of America to execute and deliver, such other instruments
and documents, and take such further action, as Administrative Borrower or the
Bank of America may reasonably request to effect or evidence the termination of
Agent’s security interest in and lien on the Capital Stock and assets of the
Released Parties and releases the Released Parties from the Credit Agreement and
the other Loan Documents and all Obligations thereunder as provided in clause
(a) above, but without recourse, representation or warranty of any kind, express
or implied, and at the sole cost and expense of Borrowers.
     6. Representations and Warranties. To induce the other parties hereto to
enter into this Agreement, the Loan Parties represent and warrant to the Agent
and the Lenders that, as of the Agreement Effective Date (as defined below):
          (a) The execution, delivery and performance by each of the Loan
Parties of this Agreement has been duly authorized by all requisite corporate
actions; that this Agreement has been duly executed and delivered by each of the
Loan Parties; and that this Agreement and the Credit Agreement, as amended by
this Agreement, constitute legal, valid and binding obligations of the Loan
Parties, enforceable against them in accordance with its terms (subject to the
applicable bankruptcy, reorganization, insolvency, moratorium or similar laws
affecting creditors’ rights generally and subject, as to enforceability, to
equitable principles of general application (regardless of whether enforcement
is sought in a proceeding in equity or at law)).
          (b) The representations and warranties contained in Article VI of the
Credit Agreement and in each other Loan Document and certificate or other
writing delivered to Agent or any Lender pursuant thereto on or prior to the
Agreement Effective Date are true and correct in all material respects on and as
of the Agreement Effective Date, after giving effect to the terms of this
Agreement, as though made on and as of such date, except to the extent that such
representations and warranties expressly relate solely to an earlier date (in
which case such representations and warranties shall be true and correct in all
material respects on and as of such date).
          (c) No Default or Event of Default has occurred and is continuing on
the Agreement Effective Date or will result from this Agreement becoming
effective in accordance with its terms.
          (d) The organizational structure of Parent and its Subsidiaries is as
set forth on Schedule A hereto.
     7. Conditions to Effectiveness. The effectiveness of this Agreement is
subject to the fulfillment on or before March 31, 2007, in a manner satisfactory
to Agent, of each of the following conditions precedent (the date such
conditions are fulfilled or waived by Agent is hereafter referred to as the
“Agreement Effective Date”):

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          (a) this Agreement shall have been executed and delivered by the Loan
Parties, the Agent and the Lenders;
          (b) Administrative Borrower shall have delivered to the Agent true and
correct copies of the executed Bank of America Facility and the related loan
documents thereunder, and such documentation shall be in form and substance
reasonably satisfactory to the Agent; and
          (c) Administrative Borrower shall have delivered to the Agent true and
correct copies of the executed Amendment No. 1, dated as of the date hereof, to
the Credit Agreement, dated as of June 22, 2006, among Parent, the lenders party
thereto and Credit Suisse, as administrative and collateral agent, and such
document shall be in form and substance reasonably satisfactory to the Agent.
     8. Reservation of Rights. This release shall apply only to the Capital
Stock and all assets of the Released Parties and does not, in any manner
whatsoever, allow for the release of liens on any other Collateral of any other
Loan Party. The Agent’s liens on all such other Collateral shall remain in full
force and effect. No action or acquiescence by the Agent and the Lenders,
including, without limitation, the amendment under this Agreement of, or the
acceptance of any payments under, the Credit Agreement, shall constitute a
waiver of any Default or Event of Default, except as expressly set forth herein.
Accordingly, the Agent and the Lenders reserve all of their rights under the
Credit Agreement, the Loan Documents, at law and otherwise regarding any such
Default or Event of Default.
     9. Continued Effectiveness of Loan Documents. Each of the Loan Parties
hereby (i) confirms and agrees that each Loan Document to which it is a party
is, and shall continue to be, in full force and effect and is hereby ratified
and confirmed in all respects except that on and after the Agreement Effective
Date all references in any such Loan Document to “the Credit Agreement”,
“thereto”, “thereof”, “thereunder” or words of like import referring to the
Credit Agreement shall mean the Credit Agreement as amended by this Agreement,
and (ii) confirms and agrees that to the extent that any such Loan Document
purports to assign or pledge to the Collateral Agent, or to grant to the
Collateral Agent a security interest in or lien on, any collateral as security
for the Obligations of the Loan Parties from time to time existing in respect of
the Credit Agreement and the Loan Documents, such pledge, assignment and/or
grant of the security interest or lien is hereby ratified and confirmed in all
respects, except with respect to the Capital Stock or other Collateral released
hereunder.
     10. Loan Parties; Borrowing Base; Intercreditor Agreement. Notwithstanding
anything to the contrary, after the Agreement Effective Date:
          (a) none of the Released Parties shall be deemed to be a Loan Party, a
Company, or a Guarantor Company under the Credit Agreement or any of the other
Loan Documents;
          (b) no assets of the Released Parties shall be included in any
calculation of the Borrowing Base under the Credit Agreement;

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          (c) the Capital Stock and all assets of the Released Parties shall no
longer be collateral of the Agent and the Lenders under the Intercreditor
Agreement; and
          (d) the Released Parties shall be released from the Intercreditor
Agreement.
     11. Miscellaneous.
          (a) This Agreement may be executed in any number of counterparts and
by different parties hereto in separate counterparts, each of which shall be
deemed to be an original, but all of which taken together shall constitute one
and the same agreement. Delivery of a counterpart hereby by facsimile
transmission shall be equally effective as delivery of a manually executed
counterpart hereof.
          (b) Section and paragraph headings herein are included for convenience
of reference only and shall not constitute a part of this Agreement for any
other purpose.
          (c) This Agreement shall be governed by, and construed in accordance
with, the laws of the State of New York.
          (d) The Loan Parties will pay on demand all reasonable fees,
reasonable out-of-pocket costs and expenses of the Agent in connection with the
preparation, execution and delivery of this Agreement, including, without
limitation, the reasonable fees, out-of-pocket disbursements and other client
charges of Schulte Roth & Zabel LLP.
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     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.

                      Borrowers:    
 
                    ALON USA, LP    
 
                    By:   Alon USA GP, LLC, a Delaware limited
liability company, its general partner    
 
               
 
      By:   /s/ Harlin R. Dean    
 
               
 
      Name:   Harlin R. Dean    
 
      Title:   Vice President and Secretary    
 
                    EDGINGTON OIL COMPANY, LLC    
 
                    By:   /s/ Harlin R. Dean                       Name:  
Harlin R. Dean         Title:   Vice President and Secretary    

 

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                  Guarantor Companies:
 
                ALON ASSETS, INC.     ALON USA OPERATING, INC     ALON USA
REFINING, INC.     ALON ASPHALT BAKERSFIELD, INC     ALON USA, INC.     ALON USA
ENERGY, INC.     ALON USA CAPITAL, INC.
 
           
 
  By:   /s/ Harlin R. Dean    
 
           
 
  Name:   Harlin R. Dean    
 
  Title:   Vice President and Secretary    
 
                ALON USA GP, LLC
 
           
 
  By:   /s/ Harlin R. Dean    
 
           
 
  Name:   Harlin R. Dean    
 
  Title:   Vice President and Secretary    
 
                ALON USA INTERESTS, LLC
 
           
 
  By:   /s/ Harlin R. Dean    
 
           
 
  Name:   Harlin R. Dean    
 
  Title:   Vice President and Secretary    
 
                ALON USA DELAWARE, LLC     ALON PIPELINE LOGISTICS, LLC
 
           
 
  By:   /s/ David Wiessman    
 
           
 
  Name:   David Wiessman    
 
  Title:   President    

 

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                  ALON CRUDE PIPELINE, LLC     ALON PARAMOUNT HOLDINGS, INC.    
PARAMOUNT OF WASHINGTON, LLC     PARAMOUNT OF OREGON, LLC
 
           
 
  By:   /s/ Harlin R. Dean    
 
           
 
  Name:   Harlin R. Dean    
 
  Title:   Vice President and Secretary    

 

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                  Agent and Lender:
 
                ISRAEL DISCOUNT BANK OF NEW YORK
 
           
 
  By:   /s/ Amir Barash    
 
           
 
  Name:   Amir Barash    
 
  Title:   First Vice President    
 
           
 
  By:   /s/ Mali Golan    
 
           
 
  Name:   Mali Golan    
 
  Title:   Assistant Vice President    
 
                Lender and Co-arranger:
 
                BANK LEUMI USA
 
           
 
  By:   /s/ Hanita Musel    
 
           
 
  Name:   Hanita Musel    
 
  Title:   Assistant Treasurer    
 
           
 
  By:   /s/ Yuval Talmy    
 
           
 
  Name:   Yuval Talmy    
 
  Title:   First Vice President