Exhibit 10.5
(IDBBANK LOGO) [c07718c0771801.gif]
REPLACEMENT PROMISSORY NOTE II

     
$30,000,000.00
  October 5, 2010 
 
  New York, New York

FOR VALUE RECEIVED, the undersigned, DELEK FINANCE, INC. (the “Borrower”), with
an address at 7102 Commerce Way, Brentwood, TN 37027. HEREBY PROMISES TO PAY to
the order of ISRAEL DISCOUNT BANK OF NEW YORK, its successors and assigns
(hereinafter the “Bank”), the principal amount of THIRTY MILLION DOLLARS
($30,000,000.00), in lawful money of the United States (the “Loan”), or if less,
the unpaid principal balance of the Loan made by Lender to Borrower, with
interest thereon to be computed on the unpaid principal balance of the Loan from
time to time outstanding in the manner and at the per annum rate as hereinafter
specified and to pay the unpaid principal balance of the Loan in installments as
set forth below.
1. Defined Terms. As used in this Note the following terms shall have the
following meanings:
1.1 The term “Business Day” shall mean any day other than a Saturday, Sunday, or
other day on which commercial banks in New York are authorized or required to
close under the laws of the State of New York.
1.2 The term “Collateral” shall mean the 2,867,242 shares of Lion Oil Company
directly and beneficially owned by Holdings (which as of the date hereof
represents an approximate 34.6% ownership interest of Lion Oil Company).
1.3 The term “Event of Default” shall mean any of the events or conditions
specified in Section 11 hereof.
1.4 The term “Guarantor” means each guarantor and surety of this Note or the
Obligations evidenced hereby and any entity who is primarily or secondarily
liable, in whole or in part, for the repayment of the Obligations or any portion
thereof (including, without limitation, Holdings), any entity who has granted
security for the repayment of the Obligations, together with such entity’s
successors and assigns.
1.5 The term “Holdings” shall mean Delek US Holdings, Inc.
1.6 The term “Indebtedness” shall mean all items of indebtedness, obligation or
liability, whether matured or unmatured, liquidated or unliquidated, funded or
unfunded, direct or contingent, joint or several, which would properly be
included in the liability section of a balance sheet or in a footnote to a
financial statement in accordance with generally accepted accounting principles,
and shall also include (a) all indebtedness guaranteed, directly or indirectly
in any manner, or endorsed (other than for collection or deposit in the ordinary
course of business) or sold with recourse (b) all indebtedness in effect
guaranteed, directly or indirectly, through agreements, contingent or otherwise,
and (c) all indebtedness secured by (or for which the holder of such
indebtedness has a right, contingent or otherwise, to be secured by) any
mortgage, deed of trust, pledge, assignment, lien, security interest or other
charge or encumbrance upon property owned or acquired subject thereto, whether
or not the liabilities secured thereby have been assumed or guaranteed.

 

 

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1.7 The term “Interest Period” means a period of sixty (60), ninety (90), one
hundred twenty (120), one hundred fifty (150) or one hundred eighty (180) days,
as selected by Borrower as provided for herein, provided, however, (i) if any
Interest Period would otherwise end on a day which is not a Business Day, the
Interest Period shall be extended to the next succeeding Business Day unless the
result of such extension would be to carry such Interest Period into another
calendar month, in which event such Interest Period shall end on the immediately
preceding Business Day; and (ii) any Interest Period that begins on the last
Business Day of a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest Period)
shall end on the last Business Day of a calendar month.
1.8 The term “LIBOR” shall mean with respect to an Interest Period, the rate per
annum (rounded upwards, if necessary, to the nearest 1/100 of 1%) equal to the
British Bankers Association LIBOR Rate (“BBA LIBOR”) as published by Bloomberg
(or such other commercially available source providing quotations of BBA LIBOR
as designated by Bank from time to time) at approximately 11:00 A.M. (London
time) 2 Business Days prior to the first day of such Interest Period for a term
comparable to such Interest Period; provided however, if more than one BBA LIBOR
Rate is specified, the applicable rate shall be the arithmetic mean of all such
rates.
1.9 The term “Loan Documents” shall mean this Note and any other document,
instrument or agreement and any amendments thereto, evidencing or securing the
Obligations, or now or at any time hereafter executed, delivered or recorded in
connection with the Obligations, any other note, any loan commitment,
requisition, letter agreement, line of credit agreement, commercial financing
agreement, security agreement, guaranty of payment, mortgage, deed of trust,
pledge agreement, loan agreement, loan and security agreement, hypothecation
agreement, indemnity agreement, letter of credit application and agreement, and
assignment, all as amended, restated, extended, renewed, supplemented, modified
or replaced from time to time.
1.10 The term “Maturity Date” shall mean December 31, 2013.
1.11 The term “Note” shall mean this Replacement Promissory Note II.
1.12 The term “Obligations” shall mean all existing and future debts,
liabilities and obligations of every kind or nature at any time owing by
Borrower to Bank, whether under this Note or under any other existing or future
instrument, document or agreement, between Borrower and Bank, whether joint or
several, related or unrelated, primary or secondary, matured or contingent, due
or to become due, including, without limitation, the debts, liabilities and
obligations in respect of this Note and any extensions, modifications,
substitutions, increases and renewals thereof. Without limiting the generality
of the foregoing, Obligations shall include any other loan, advances or
extension of credit, under any existing or future loan agreement, promissory
note, or other instrument, document or agreement between Borrower and Bank.

 

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1.13 The term “Obligor” shall mean individually and collectively Borrower,
Guarantor and any surety of this Note, any entity who is primarily or
secondarily liable for the repayment of this Note or any portion thereof
(including without limitation, Holdings), any entity who has granted security
for the repayment of the Note, together with such entity’s successors and
assigns.
1.14 The term “Payment Date” shall mean the last day of each March, June,
September and December.
2. Principal and Interest.
(a) The Borrower shall pay to the Bank the unpaid principal balance of the Loan
in eleven (11) equal successive quarterly installments of principal in the
amount of One Million Two Hundred Fifty Thousand and No/100 Dollars
($1,250,000.00) each, with the first (1st) such installment being due on
March 31, 2011 and the final ten (10) installments being due, subject to
Section 8 hereof, on each Payment Date thereafter until and including
September 30, 2013. The remaining principal balance shall be due in accordance
with Section 2(d) below.
(b) The Loan shall bear interest on the outstanding daily unpaid principal
amount of the Loan from the date hereof until payment in full is made and shall
accrue and be payable at the rates set forth or provided for herein, before and
after default, before and after maturity, before and after judgment and before
and after the commencement of any proceeding under the Bankruptcy Code, with
interest on overdue interest to bear interest and to be compounded at the
Default Interest Rate (as defined below), in each case, to the fullest extent
permitted by applicable laws.
(c) Interest accrued on the Loan shall be due and payable quarterly in arrears
on each Payment Date and shall continue until the Loan is fully repaid. Except
as otherwise provided in Section 4, the unpaid principal amount of the Loan
shall bear interest at a rate per annum equal to the greater of (i) LIBOR for
the applicable Interest Period, as selected by the Borrower, plus four hundred
fifty (450 bps) basis points or (ii) five percent (5%). The initial Interest
Period for the Loan shall be ninety (90) days. Borrower shall deliver notice to
Bank three (3) Business Days prior to the expiration of the initial and each
successive Interest Period identifying the length of the next Interest Period.
In the event Borrower fails to timely deliver such notice, the immediately
following Interest Period shall be set at ninety (90) days.
(d) If not sooner paid, the entire outstanding principal balance of the Note
together with any and all accrued interest due under the Note shall be repaid
upon the earlier to occur of (i) Bank’s election pursuant to Section 12 of this
Note or (ii) the Maturity Date.
(e) The unpaid principal amount of this Note may, at any time and from time to
time, be voluntarily paid or prepaid in whole or in part except that, with
respect to any voluntary prepayment, (i) Bank shall have received written notice
of any voluntary payment or prepayment by 12:00 noon, New York local time five
Business Days before the date of such voluntary payment or prepayment, which
notice shall identify the date and amount of the voluntary payment or
prepayment, and (ii) any voluntary payment or prepayment of all or any part of
the Loan on a day other than the last day of the applicable Interest Period
shall be accompanied by a voluntary payment or prepayment premium equal to the
amount of the actual loss, cost or expense incurred by Bank to relend or
reinvest such amounts paid or prepaid to the Bank from the date of such
voluntary payment or prepayment to the last day of the then current Interest
Period. Bank shall not be obligated to accept any voluntary payment or
prepayment unless it is accompanied by the prepayment premium.

 

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(f) Bank may act without liability upon the basis of telephonic notice believed
by Bank in good faith to be from an authorized officer of Borrower and Borrower
hereby agrees to indemnify Bank against any claims, liabilities, losses and
expenses ensuing from such reliance. Borrower shall immediately confirm to Bank,
in writing, each telephonic notice. Borrower expressly authorizes Bank to record
in its computer system the amount and date of the Loan, the applicable rate of
interest and each payment of principal and interest made thereon. In the event
of any discrepancy between any such notation by Bank and any records of
Borrower, the records of Bank shall be controlling and conclusive. Bank’s
failure to make any notation to its records shall not limit or otherwise affect
the obligations of Borrower to repay the Loan, in accordance with the terms
hereof.
3. Default Rate. At the option of the Lender, upon the occurrence and during the
continuance of any Event of Default, and in any event if any installment of
principal or interest or any fee or cost or other amount payable under this
Note, or any other Loan Document, is not paid when due, the Obligations shall
thereafter bear interest at a fluctuating interest rate per annum at all times
equal to the rate otherwise applicable thereto plus five (5%) percent per annum
(the “Default Interest Rate”), to the fullest extent permitted by applicable
law. Accrued and unpaid interest on past due amounts (including interest on past
due interest) shall be compounded monthly, on the last day of each calendar
month, to the fullest extent permitted by applicable law.
4. Computation of Interest and Fees.
(a) Computation of interest on the Loan and all fees under this Note shall be
calculated on the basis of a year of 360 days and the actual number of days
elapsed. Borrower acknowledges that such latter calculation method will result
in a higher yield to the Lender than a method based on a year of 365 or
366 days.
(b) Under no circumstances or event whatsoever shall the aggregate of all
amounts deemed interest hereunder and charged or collected pursuant to the terms
of this Note exceed the highest rate permissible under any law which a court of
competent jurisdiction shall, in a final determination, deem applicable hereto.
In the event that such court determines Lender has charged or received interest
hereunder in excess of the highest applicable rate, Lender shall apply, in its
sole discretion, and set off such excess interest received by Lender against
other Obligations due or to become due and such rate shall automatically be
reduced to the maximum rate permitted by such law.

 

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5. Manner and Treatment of Payments.
(a) Each payment due on this Note, or under any other Loan Document, shall be
made to Bank, at Bank’s office located at 511 Fifth Avenue, New York, New York
10017, for the account of Bank, in immediately available funds not later than
3:00 p.m., New York local time, on the day of payment (which must be a Business
Day). All payments received after these deadlines shall be deemed received on
the next succeeding Business Day. All payments shall be made in lawful money of
the United States of America.
(b) Bank shall use its reasonable efforts to keep a record of the Loan made by
it and payments received by it with respect to this Note and, such record shall,
as against Borrower, be presumptive evidence of the amounts owing.
Notwithstanding the foregoing sentence, Bank shall not be liable to any party
for any failure to keep such a record.
(c) Bank shall have the unconditional right and discretion (and Borrower hereby
authorizes Bank) to charge Borrower’s operating and/or deposit account(s) for
all of Borrower’s Obligations as they become due from time to time under this
Note, or any other Loan Document, including, without limitation, interest,
principal, fees, indemnification obligations and reimbursement of expenses.
(d) Any payment due under this Note which is paid by check or draft shall be
subject to the condition that any receipt issued therefore shall be ineffective
unless and until the amount due is actually received by Bank. Each payment
received by Bank shall be applied as follows: first, to the payment of any and
all costs, fees and expenses incurred by or payable to Bank in connection with
the collection or enforcement of this Note; second, to the payment of all unpaid
late charges (if any); third, to the payment of all accrued and unpaid interest
hereunder; and fourth, to the payment of the unpaid principal balance of this
Note, or in any other manner which Bank may, in its sole discretion, elect from
time to time.
6. Security Interest. To secure payment to Bank and performance of the
Obligations, this Note is secured by the guarantee of Guarantor which is secured
by the Collateral, subject to an intercreditor agreement between Bank Leumi USA
(“BLUSA”) and Bank, and pledge agreements between Holdings and Bank and Holdings
and BLUSA, as the same may be amended, modified or reaffirmed from time to time.
7. Right of Set-Off. As security for this Note and all other Obligations of
Borrower to Bank, Borrower and any Obligor of this Note hereby grant Bank a
continuing lien and/or right of set-off upon any and all deposit and/or
operating accounts now or hereafter maintained with Bank, any and all securities
and other property of Borrower and any Obligor and the proceeds thereof now or
hereafter coming into the possession or control of Bank, hereby authorizing
Bank, at any time, without prior notice, to appropriate and apply such deposits
or the proceeds of the sale of such securities or other property to any such
Obligations, although contingent and although unmatured, it being understood
that Bank shall be under no obligation to effect any such appropriation and
application.
8. Repayment Extension. If any payment of principal or interest shall be due on
a Saturday, Sunday or any other day on which banking institutions in the State
of New York are required or permitted to be closed, such payment shall be made
on the next succeeding Business Day, and such extension of time shall in such
case be included in the computation of the payment of interest.

 

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9. Late Charge. Borrower shall unconditionally pay to Bank a late charge (the
“Late Charge”) equal to five (5%) percent of the payment then due, if any such
payment in whole or in part is not received by Bank within ten (10) days after
its due date. The Late Charge shall be payable together with the next payment
due hereunder or, at Bank’s option, upon demand by Bank, provided, however, that
if any such late charge is not recognized as liquidated damages for such
delinquency, and is deemed to be interest in excess of the amount permitted by
applicable law, Bank shall be entitled to collect a late charge only at the
highest rate permitted by law, and any payment actually collected by Bank in
excess of such lawful amount shall be deemed a payment in reduction of the
principal sum then outstanding, and shall be so applied.
10. Representations and Warranties. Borrower represents and warrants to Bank:
10.1 Existence and Qualification; Power — Borrower is a corporation duly formed,
validly existing and in good standing under the laws of the State of its
organization. Borrower is duly qualified or registered to transact business and
is in good standing in each other jurisdiction in which the conduct of its
business or the ownership or leasing of its properties makes such qualification
or registration necessary. Borrower has all requisite corporate power and
authority to conduct its business, to own and lease its properties and to
execute and deliver this Note and each Loan Document to which it is a party and
to perform its Obligations;
10.2 Compliance with Laws — Borrower is in compliance with all laws, regulations
and other legal requirements applicable to its business, has obtained all
authorizations, consents, approvals, orders, licenses and permits from, and has
accomplished (or obtained exemptions from) all filings, registrations and
qualifications that are necessary for the transaction of its business;
10.3 Authority; Compliance With Other Agreements and Instruments — the
execution, delivery and performance by Borrower of this Note and the other Loan
Documents to which it is a party has been duly authorized by all necessary
corporate, partnership or membership action, as applicable, and does not and
will not: (i) require any consent or approval not heretofore obtained of any
manager, director, stockholder, member, partner, security holder or creditor of
such party; (ii) violate or conflict with any provision of Borrower’s
partnership agreement, articles of organization, operating agreement, articles
of incorporation, charter, by-laws or other comparable instruments; or
(iii) result in a breach by Borrower or constitute a default by Borrower under,
or cause or permit the acceleration of any obligation owed under, any indenture
or loan or credit agreement or any other contractual obligation to which
Borrower is a party or by which Borrower or any of its property is bound or
affected;
10.4 Financial Statements — the financial statements of Guarantor previously
furnished to Bank are complete and correct and fairly represent the financial
condition of Guarantor through to the date for such fiscal period, and the
result of Guarantor’s operations as of the end of the most recent fiscal quarter
reflect no material adverse change in the financial condition of Guarantor;
10.5 No Default — no event has occurred and no event is continuing which with
the giving of notice or the lapse of time or both would constitute an Event of
Default;

 

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10.6 Regulations T, U and X; Investment Company Act — no part of the proceeds of
the Loan will be used to purchase or carry, or to extend credit to others for
the purpose of purchasing or carrying, any margin stock within the meaning of
Regulations T, U or X of the Board of Governors of the Federal Reserve System.
Borrower is not or is not required to be registered as an “investment company”
under the Investment Company Act of 1940; and
10.7 Patriot Act Compliance — Borrower is not involved in any activity, directly
or indirectly, which would constitute a violation of applicable laws concerning
money laundering, the funding of terrorism or similar activities. No part of the
proceeds of the Loan will be used to fund activities which would constitute a
violation of the United States Bank Secrecy Act, the United States Money
Laundering Control Act of 1986, the United States International Money Laundering
Abatement and Anti-terrorist Financing Act of 2001.
11. Events of Default. The occurrence of any one or more of the following events
shall constitute an “Event of Default” under this Note:
11.1 Payments — if Borrower, or any other Obligor, fails to make any payment of
principal or interest under the Obligations when such payment is due and
payable; or
11.2 Other Charges — if Borrower, or any other Obligor, fails to pay any other
charges, fees, expenses or other monetary obligations owing to Bank arising out
of or incurred in connection with this Note within five (5) Business Days after
the date such payment is due and payable; or
11.3 Particular Covenant Defaults — if Borrower fails to perform, comply with or
observe any covenant or undertaking contained in any Loan Document and such
failure continues for thirty (30) Business Days after the occurrence thereof; or
11.4 Financial Information — if any statement, report, financial statement, or
certificate made or delivered by Borrower, or any other Obligor, to Bank is not
true and correct in all material respects when made or delivered; or
11.5 Warranties or Representations — if any warranty, representation or other
statement by or on behalf of Borrower contained in or pursuant to this Note, the
other Loan Documents or in any document, agreement or instrument furnished in
compliance with, relating to, or in reference to this Note, is false, erroneous,
or misleading in any material respect when made; or
11.6 Holdings’ Guaranty — if Holdings shall be in default of the guaranty, dated
May 23, 2006, issued by Holdings in favor of the Bank, as amended or modified
from time to time; or
11.7 Other Agreements with Bank — if Borrower breaches or violates the terms of,
or if a default occurs under, any other existing or future agreement (related or
unrelated) (including, without limitation, the other Loan Documents) between
Borrower and Bank; or

 

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11.8 Judgments — if any final judgment for the payment of money in excess of $20
million (i) which is not fully and unconditionally covered by insurance or
(ii) for which Borrower has not established a cash or cash equivalent reserve in
the full amount of such judgment, shall be rendered by a court of record against
Borrower and such judgment shall continue unsatisfied and in effect for a period
of thirty (30) consecutive days without being vacated, discharged, satisfied or
bonded pending appeal; or
11.9 Assignment for Benefit of Creditors, etc. — if Borrower makes or proposes
in writing, an assignment for the benefit of creditors generally, offers a
composition or extension to creditors, or makes or sends notice of an intended
bulk sale of any business or assets now or hereafter owned or conducted by
Borrower; or
11.10 Bankruptcy, Dissolution, etc. — upon the commencement of any action for
the dissolution or liquidation of Borrower, or the commencement of any
proceeding to avoid any transaction entered into by Borrower, or the
commencement of any case or proceeding for reorganization or liquidation of
Borrower’s debts under the Bankruptcy Code or any other state or federal law,
now or hereafter enacted for the relief of debtors, whether instituted by or
against Borrower; provided however, that Borrower shall have twenty
(20) Business Days to obtain the dismissal or discharge of involuntary
proceedings filed against it, it being understood that during such twenty
(20) Business Day period, Bank may seek adequate protection in any bankruptcy
proceeding; or
11.11 Receiver — upon the appointment of a receiver, liquidator, custodian,
trustee or similar official or fiduciary for Borrower or for Borrower’s
property; or
11.12 Execution Process, etc. — the issuance of any execution or distraint
process against any property of Borrower; or
11.13 Termination of Business — if Guarantor permanently discontinues a material
portion of its business operations, taken as a whole, as presently conducted; or
11.14 Investigations — any indication or evidence received by Bank that
reasonably leads it to believe Borrower may have directly or indirectly been
engaged in any type of activity which, would be reasonably likely to result in
the forfeiture of any material property of Borrower to any governmental entity,
federal, state or local; or
11.15 Liens — if any lien granted by Borrower or Holdings in favor of Bank,
including the lien granted to Bank pursuant to that certain Stock Pledge and
Security Agreement dated June 23, 2009 between Holdings and Bank, shall cease to
be valid, enforceable and perfected and prior to all other liens other than
permitted liens, which permitted liens shall specifically include any and all
liens granted by Holdings with respect to the Collateral pursuant to that
certain (a) Stock Pledge and Security Agreement, dated as of June 23, 2009 by
and between Holdings and Bank Leumi USA (“BLUSA”), as the same is or may be
amended or modified from time to time, and (b) Intercreditor and Subordination
Agreement, dated as of June 23, 2009 by and between BLUSA and the Bank, as the
same is or may be amended or modified from time to time; or
11.16 Concealment/Removal of Property — if Borrower, or any other Obligor,
conceals, removes or permits to be concealed or removed any part of Borrower’s
property with intent to hinder, delay, or defraud any of its creditors; or

 

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11.17 Fraudulent Conveyance — the making or suffering by Borrower, or any other
Obligor, of a transfer of any property, which is fraudulent under the law of any
applicable jurisdiction; or
11.18 Agreements with Others — if Borrower or Holdings otherwise defaults under
the terms of any Indebtedness and if the effect of such default is to cause the
holder of such Indebtedness to accelerate the payment of $10,000,000.00 or more
of Borrower’s, Holdings’ or any of Borrower’s or Holdings’ affiliates
obligations in the aggregate, prior to the maturity date or prior to the
regularly scheduled date of payment; or
11.19 Material Adverse Effect — if there is any change in Borrower’s financial
condition which, in Bank’s reasonable opinion, has or would be reasonably likely
to have a material adverse effect with respect to (a) the assets, properties,
financial condition, credit worthiness, business prospects, material agreements
or results of business operations of Borrower, or (b) Borrower’s ability to pay
the Obligations in accordance with the terms hereof, or (c) the validity or
enforceability of this Note or any of the other Loan Documents or the rights and
remedies of Bank hereunder or thereunder.
12. Rights and Remedies upon Default. Upon and after the occurrence of an Event
of Default hereunder, Bank, in Bank’s sole discretion and without notice or
demand to Borrower or any other Obligor, may: (a) declare the entire outstanding
principal balance of this Note, together with all accrued interest and all other
sums due under this Note to be immediately due and payable, and the same shall
thereupon become immediately due and payable without presentment, demand or
notice, which are hereby expressly waived (b) exercise its right of set-off
against any money, funds, credits or other property of any nature whatsoever of
Borrower or any other Obligor now or at any time hereafter in the possession of,
in transit to or from, under the control or custody of, or on deposit with, Bank
or any affiliate of Bank in any capacity whatsoever, including without
limitation, any balance of any deposit account and any credits with Bank or any
affiliate of Bank; (c) terminate any outstanding commitments of Bank to Borrower
or any Obligor; and (d) exercise any or all rights, powers, and remedies
provided for in the Loan Documents or now or hereafter existing at law, in
equity, by statute or otherwise.
13. Remedies Cumulative. Each right, power and remedy of Bank hereunder, under
the other Loan Documents or now or hereafter existing at law, in equity, by
statute or otherwise shall be cumulative and concurrent, and the exercise or the
beginning of the exercise of any one or more of them shall not preclude the
simultaneous or later exercise by Bank of any or all such other rights, powers
or remedies. No failure or delay by Bank to insist upon the strict performance
of any one or more provisions of this Note or of the Loan Documents or to
exercise any right, power or remedy consequent upon a breach thereof or a
default hereunder shall constitute a waiver thereof, or preclude Bank from
exercising any such other rights, powers or remedy. By accepting full or partial
payment after the due date of any amount of principal or interest on this Note,
or other amounts payable on demand, Bank shall not be deemed to have waived the
right either to require prompt payment when due and payable of all other amounts
of principal or interest on this Note or other amounts payable on demand, or to
exercise any rights and remedies available to is in order to collect all such
other amounts due and payable under this Note.

 

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14. Inability to Determine LIBOR. If prior to the first day of any Interest
Period Bank shall have determined (which determination shall be conclusive and
binding upon Borrower, absent manifest error) that LIBOR can not be determined
by any of the means set forth in the definition of “LIBOR” and, by reason of
circumstances affecting the London Interbank Market, quotations of interest
rates for the relevant Interest Periods are not being provided to Bank in the
relevant amount or for the relevant maturities for purposes of determining LIBOR
for such Interest Period, then Bank shall forthwith furnish notice of such
determination to Borrower and on the last day of the then applicable current
Interest Period, Bank shall, in its sole discretion, select a new interest rate
for the Loan.
15. Illegality. Notwithstanding any other provision herein, if the adoption of
or any change in any law, rule, regulation, guideline or order, or the
interpretation or application thereof shall make it unlawful for Bank to
maintain the Loan at an interest rate based on LIBOR as contemplated hereunder
(a) Bank shall promptly give notice thereof to Borrower, and (b) interest rate
to be charged on the remaining unpaid principal amount of the Loan shall be
converted automatically to a rate determined by Bank in its sole discretion.
16. Additional Costs. If, as a result of any change in applicable law,
regulation, guideline or order, or in the interpretation or application thereof
by any governmental authority charged with the administration thereof, there
shall be imposed upon or made applicable to Bank any reserve requirement against
this Note or any other costs or assessments (hereinafter “Additional Costs”),
Borrower shall pay to Bank, on demand (which demand shall be in writing and
which will set forth a calculation of such Additional Costs), an amount
sufficient to compensate Bank for such Additional Cost. Bank’s calculation of
the amount of such Additional Costs shall be presumed correct absent manifest
error.
17. Collection Expenses. If this Note is placed in the hands of an attorney for
collection following the occurrence of an Event of Default hereunder, Borrower
agrees to pay to Bank upon demand costs and expenses, including all attorney’s
fees and court costs, paid or incurred by Bank in connection with the
enforcement or collection of this Note (whether or not any action has been
commenced by Bank to enforce or collect this Note) or in successfully defending
any counterclaim or other legal proceeding brought by Borrower contesting Bank’s
right collect the outstanding principal balance of this Note. The obligation of
Borrower to pay all such costs and expenses shall not be merged into any
judgment by confession against Borrower. All of such costs and expenses shall
bear interest at the higher of the rate of interest provided herein or Default
Interest Rate provided herein, from the date of payment by Bank until repaid in
full.
18. Interest Rate after Judgment. If judgment is entered against Borrower on
this Note, the amount of the judgment entered (which may include principal,
interest, fees and costs) shall bear interest at the higher of (i) the legal
rate of interest then applicable to judgments in the jurisdiction in which
judgment was entered or, (ii) if otherwise permitted by applicable law, the
Default Interest Rate provided herein.

 

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19. Certain Waivers by Borrower. Borrower waives demand, presentment, protest
and notice of demand, of non-payment, of dishonor, and of protest of this Note.
Bank, without notice to or further consent of Borrower or any other Obligor and
without in any respect compromising, impairing, releasing, lessening or
affecting the obligations of Borrower hereunder or under of the Loan Documents,
may: (a) release, surrender, waive, add, substitute, settle, exchange,
compromises, modify, extend or grant indulgences with respect to (i) this Note,
(ii) any of the Loan Documents, and/or (iii) all or any part of any collateral
or security for this Note; and/or (iv) any Obligor; (b) complete any blank space
in this Note according to the terms upon which the loan evidenced hereby is
made; and (c) grant any extension or other postponements of the time of payment
hereof.
20. Choice of Law: Forum Selection: Consent to Jurisdiction. This Note shall be
governed by, construed and interpreted in accordance with the laws of the State
of New York (excluding the choice of law rules thereof). Borrower hereby
irrevocably submits to the jurisdiction of any New York court or federal court
sitting in the State of New York in any action or proceeding arising out of or
relating to this Note, and hereby irrevocably waives any objection to the laying
of venue of any such action or proceeding in any such court and any claim that
any such action or proceeding has been brought in an inconvenient forum. A final
judgment in any such action or proceeding shall be conclusive and may be
enforced in any other jurisdiction by suit on the judgment or in any other
manner provided by law.
21. Subsequent Holders. In the event that any holder of this Note transfers this
Note for value, Borrower agrees that except with respect to a subsequent holder
with actual knowledge of a claim or defense, no subsequent holder of this Note
shall be subject to any claims or defenses which Borrower may have against a
prior holder (which claims or defenses are not waived as to prior holder), all
of which are waived as to the subsequent holder, and that all such subsequent
holders shall have all of the rights of a holder in due course with respect to
Borrower even though the subsequent holder may not qualify, under applicable
law, absent this paragraph, as a holder in due course.
22. Invalidity of Any Part. If any provision or part of any provision of this
Note shall for any reason be held invalid, illegal or unenforceable in any
respect, such invalidity, illegality or unenforceability shall not affect any
other provision (or any remaining part of any provision) of this Note, and this
Note shall be construed as if such invalid, illegal or unenforceable provision
(or part thereof) had never been contained in this Note, but only to the extent
of its invalidity, illegality, or unenforceability. In any event, if any such
provision pertains to the repayment of the Obligations evidenced by this Note,
then and in such event, at Bank’s option, the outstanding principal balance of
this Note, together with all accrued and unpaid interest thereon, shall become
immediately due and payable.

 

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23. WAIVER OF JURY TRIAL. BORROWER HEREBY (i) COVENANTS AND AGREES NOT TO ELECT
A TRIAL BY JURY OF ANY ISSUE TRIABLE OF RIGHT BY A JURY, AND (ii) WAIVES TRIAL
BY JURY IN ANY ACTION OR PROCEEDING TO WHICH BANK AND BORROWER MAY BE PARTIES
ARISING OUT OF, IN CONNECTION WITH OR IN ANY WAY PERTAINING TO THIS NOTE, ANY OF
THE LOAN DOCUMENTS AND/OR ANY TRANSACTIONS, OCCURRENCES, COMMUNICATIONS, OR
UNDERSTANDINGS (OR THE LACK OF ANY OF THE FOREGOING) RELATING IN ANY WAY TO
BORROWER-BANK RELATIONSHIP BETWEEN THE PARTIES. IT IS UNDERSTOOD AND AGREED THAT
THIS WAIVER CONSTITUTES A WAIVER OF TRIAL BY JURY OF ALL CLAIMS AGAINST ALL
PARTIES TO SUCH ACTIONS OR PROCEEDINGS, INCLUDING CLAIMS AGAINST PARTIES WHO ARE
NOT PARTIES TO THIS NOTE. THIS WAIVER OF JURY TRIAL IS SEPARATELY GIVEN,
KNOWINGLY, WILLINGLY AND VOLUNTARILY MADE BY BORROWER AND BORROWER HEREBY AGREES
THAT NO REPRESENTATIONS OF FACT OR OPINION HAVE BEEN MADE BY ANY INDIVIDUAL TO
INDUCE THIS WAIVER OF TRIAL BY JURY OR TO IN ANY WAY MODIFY OR NULLIFY ITS
EFFECT. BANK IS HEREBY AUTHORIZED TO SUBMIT THIS NOTE TO ANY COURT HAVING
JURISDICTION OVER THE SUBJECT MATTER AND BORROWER SO AS TO SERVE AS CONCLUSIVE
EVIDENCE OF SUCH WAIVER OF RIGHT TO TRIAL BY JURY. BORROWER REPRESENTS AND
WARRANTS THAT IT HAS BEEN REPRESENTED IN THE SIGNING OF THIS NOTE AND IN THE
MAKING OF THIS WAIVER BY INDEPENDENT LEGAL COUNSEL, SELECTED OF ITS OWN FREE
WILL, AND/OR THAT IT HAS HAD THE OPPORTUNITY TO DISCUSS THIS WAIVER WITH
COUNSEL.
24. Waiver of Defenses, Counterclaims, etc. Borrower hereby waives, in any
litigation (whether or not arising out of or related to this note or any other
obligation or liabilities to Bank) in which Borrower and Bank shall be adverse
parties, the right to interpose any defense, set-off or counterclaim of any
nature or description.
25. Miscellaneous. Time is of the essence under this Note. The paragraph
headings of this Note are for convenience only, and shall not limit or otherwise
affect any of the terms hereof. This Note and the other Loan Documents, if any,
constitute the entire agreement between the parties with respect to their
subject matter and supersede all prior letters, representations, or agreements,
oral or written, with respect thereto. No modification, release, or waiver of
this Note shall be deemed to be made by Bank unless in writing signed by Bank,
and each such waiver, if any, shall apply only with respect to the specific
instance involved. No course of dealing or conduct shall be effective to modify,
release or waive any provisions of this Note or any of the other Loan Documents.
Borrower acknowledges that this Note is an instrument for the payment of money
only within the meaning of Section 3213 of the New York Civil Practice Law &
Rules. This Note shall inure to the benefit of and be enforceable by Bank and
Bank’s successors and assigns and any other person to whom Bank may grant an
interest in the obligations evidenced by this Note and shall be binding upon and
enforceable against Borrower and Borrower’s successors and assigns. Whenever
used herein, the singular number shall include the plural, the plural the
singular, and the use of the masculine, feminine, or neuter gender shall include
all genders.
26. Prior Note. This Note replaces in its entirety that certain Amended and
Restated Term Loan Note by Borrower in favor of Bank dated December 30, 2008 in
the original principal amount of $30,000,000.00 as the same may have been paid
down from time to time (“Prior Note”), which Prior Note is hereby terminated and
cancelled in all respects. In addition, that certain line letter between Bank
and Borrower dated December 23, 2008 is hereby terminated.

 

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27. Indemnification. The Borrower agrees: (i) to pay and reimburse Bank for all
of its reasonable and documented out-of-pocket costs and expenses incurred in
connection with the preparation and execution of, and any amendment, supplement
or modification to, this Note and the other Loan Documents, and the consummation
and administration of the transactions contemplated hereby and thereby,
including the reasonable fees, disbursements and other charges of internal and
external counsel, (ii) to pay and reimburse Bank for reasonable and documented
out-of-pocket costs and expenses incurred in connection with the enforcement or
preservation of any rights under this Note, Loan Documents and any such other
documents, including the reasonable fees, disbursements and other charges of its
counsel, whether internal or external, (iii) to pay, indemnify and hold harmless
the Bank and its directors, officers and agents (each, an “Indemnified Party”
and collectively, “Indemnified Parties”) from and against any and all other
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind or nature whatsoever, including
reasonable and documented fees, disbursements and other charges internal or
external counsel for all Indemnified Parties in connection with the execution,
delivery, enforcement, performance and administration of this Note or the Loan
Documents and any such other documents or the use of the proceeds thereof,
including any of the foregoing relating to the violation of, noncompliance with
or liability applicable to the operations of the Borrower, any of its
subsidiaries; provided that the Borrower shall have no obligation hereunder to
any Indemnified Party with respect to damages caused directly by the gross
negligence or willful misconduct of such Indemnified Party as determined by a
non-appealable final judgment.
28. Financial Covenants. The Loan is subject to the following financial
covenants:
28.1 Shareholders’ Equity of Holdings. Total adjusted Shareholders’ Equity of
Holdings shall not be less than $425,000,000.00 as of the end of any of
Holdings’ fiscal quarters. For purposes of this Section 28, the term “Total
adjusted Shareholders’ Equity” shall mean the line item “total shareholders’
equity” as shown on Holdings’ Consolidated Balance Sheets as of the last day of
each of Holdings’ fiscal quarters plus any amounts that may be taken as an
impairment or other charge to Holdings’ Consolidated Balance Sheets with respect
to the following items: (i) goodwill, as reported in Holdings’ Consolidated
Balance Sheets, and (ii) Holdings’ investment in Lion Oil Company, such amounts
to be added back to shareholders’ equity for the duration of the Note from
December 30, 2008.
28.2 Shareholder’s Equity Ratio. Holdings must maintain a ratio of Total
adjusted Shareholder’s Equity to Total Assets, as shown on Holdings’
Consolidated Balance Sheets, of not less than 0.3:1 as of the end of any fiscal
quarter of Holdings at all times while any obligations under this Note are
outstanding to the Bank.
28.3 Financial Statements. Borrower shall furnish to Bank or make available on
its website (www.Delekus.com) within 60 days of the last day of each fiscal
quarter ending March 31, June 30 and September 30 and within 90 days of the last
day of the fiscal quarter ending December 31 (i) the consolidated publicly
published financial statements of Holdings and (ii) quarterly financial
statements for Mapco Express and Delek Refining, each as prepared by management
and dated as of the end of the reported fiscal quarters.
29. Fees. Borrower shall pay to the Bank simultaneously with the execution of
this Note (i) an extension fee in the amount of $150,000.00 and (ii) a
documentation fee in the amount of $2,500.00. Borrower hereby authorizes Bank to
debit Borrower’s operating and/or deposit account for the payment of such fees.

 

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IN WITNESS WHEREOF, the parties hereto have duly executed this Note on the date
first written above.

            BORROWER:

DELEK FINANCE, INC.
      By:   /s/ Mark B. Cox         Name:   Mark B. Cox        Title:   CFO     
  By:   /s/ A.L. Schwarcz         Name:   A.L. Schwarcz        Title:   Vice
President        GUARANTOR HEREBY EXECUTES THIS NOTE BELOW, SOLELY FOR THE
PURPOSE OF ACKNOWLEDGING AND REAFFIRMING ITS OBLIGATIONS UNDER THE GUARANTY

GUARANTOR:

DELEK US HOLDINGS, INC.
      By:   /s/ Mark B. Cox         Name:   Mark B. Cox        Title:   CFO     
  By:   /s/ A.L. Schwarcz         Name:   A.L. Schwarcz        Title:   V.P.   

 

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