Exhibit 10.6

 

EXECUTION VERSION

 

GOLDMAN, SACHS & CO. | 200 WEST STREET | NEW YORK, NEW YORK 10282-2198 |TEL:
212-902-1000

 

Opening Transaction

 

To:

 

Alon USA Energy, Inc.
12700 Park Central Dr., Suite 1600
Dallas, TX 75251

 

 

 

A/C:

 

046214615

 

 

 

From:

 

Goldman, Sachs & Co.

 

 

 

Re:

 

Base Issuer Warrant Transaction

 

 

 

Ref. No:

 

SDB4166562363

 

 

 

Date:

 

September 10, 2013

 

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Dear Ladies and Gentlemen:

 

The purpose of this communication (this “Confirmation”) is to set forth the
terms and conditions of the above-referenced transaction entered into on the
Trade Date specified below (the “Transaction”) between Goldman, Sachs & Co.
(“Dealer”) and Alon USA Energy, Inc. (“Counterparty”).  This communication
constitutes a “Confirmation” as referred to in the ISDA Master Agreement
specified below.

 

1.              This Confirmation is subject to, and incorporates, the
definitions and provisions of the 2006 ISDA Definitions (the “2006 Definitions”)
and the definitions and provisions of the 2002 ISDA Equity Derivatives
Definitions (the “Equity Definitions”, and together with the 2006 Definitions,
the “Definitions”), in each case as published by the International Swaps and
Derivatives Association, Inc. (“ISDA”).  In the event of any inconsistency
between the 2006 Definitions and the Equity Definitions, the Equity Definitions
will govern.  For purposes of the Equity Definitions, each reference herein to a
Warrant shall be deemed to be a reference to a Call Option or an Option, as
context requires.

 

Each party is hereby advised, and each such party acknowledges, that the other
party has engaged in, or refrained from engaging in, substantial financial
transactions and has taken other material actions in reliance upon the parties’
entry into the Transaction to which this Confirmation relates on the terms and
conditions set forth below.

 

This Confirmation evidences a complete and binding agreement between Dealer and
Counterparty as to the terms of the Transaction to which this Confirmation
relates.  This Confirmation shall be subject to an agreement (the “Agreement”)
in the form of the 1992 ISDA Master Agreement (Multicurrency—Cross Border) as if
Dealer and Counterparty had executed an agreement in such form on the date
hereof (but without any Schedule except for (i) the election of Loss and Second
Method and US Dollars (“USD”) as the Termination Currency, (ii) the replacement
of the word “third” in the last line of Section 5(a)(i) of the Agreement with
the word “first”, (iii) the deletion of the phrase “or becoming capable at such
time of being declared” from clause (1) of Section 5(a)(vi) of the Agreement,
and (iv) the election that the “Cross Default” provisions of Section 5(a)(vi) of
the Agreement shall apply to Counterparty with a “Threshold Amount” of USD25.0
million).

 

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All provisions contained in, or incorporated by reference to, the Agreement will
govern this Confirmation except as expressly modified herein.  In the event of
any inconsistency between this Confirmation and either the Definitions or the
Agreement, this Confirmation shall govern.

 

The Transaction hereunder shall be the sole Transaction under the Agreement.  If
there exists any ISDA Master Agreement between Dealer and Counterparty or any
confirmation or other agreement between Dealer and Counterparty pursuant to
which an ISDA Master Agreement is deemed to exist between Dealer and
Counterparty, then notwithstanding anything to the contrary in such ISDA Master
Agreement, such confirmation or agreement or any other agreement to which Dealer
and Counterparty are parties, the Transaction shall not be considered a
Transaction under, or otherwise governed by, such existing or deemed ISDA Master
Agreement.

 

2.              The Transaction is a Warrant Transaction, which shall be
considered a Share Option Transaction for purposes of the Equity Definitions. 
The terms of the particular Transaction to which this Confirmation relates are
as follows:

 

General Terms:

 

 

Trade Date:

 

September 10, 2013

 

 

 

 

 

Effective Date:

 

September 16, 2013, or such other date as agreed between the parties, subject to
Section 8(k) below

 

 

 

 

 

Components:

 

The Transaction will be divided into individual Components, each with the terms
set forth in this Confirmation, and, in particular, with the Number of Warrants
and Expiration Date set forth in this Confirmation. The payments and deliveries
to be made upon settlement of the Transaction will be determined separately for
each Component as if each Component were a separate Transaction under the
Agreement.

 

 

 

 

 

Warrant Style:

 

European

 

 

 

 

 

Warrant Type:

 

Call

 

 

 

 

 

Seller:

 

Counterparty

 

 

 

 

 

Buyer:

 

Dealer

 

 

 

 

 

Shares:

 

The Common Stock of Counterparty, par value USD0.01 per share (Ticker Symbol:
“ALJ”).

 

 

 

 

 

Number of Warrants:

 

For each Component, as provided in Annex A to this Confirmation.

 

 

 

 

 

Warrant Entitlement:

 

One Share per Warrant

 

 

 

 

 

Strike Price:

 

USD 20.0880

 

 

 

 

 

Number of Shares:

 

As of any date, a number of Shares equal to the product of the Number of
Warrants and the Warrant Entitlement.

 

 

 

 

 

Premium:

 

USD 8,026,200.00

 

 

 

 

 

Premium Payment Date:

 

The Effective Date

 

 

 

 

 

Exchange:

 

New York Stock Exchange

 

 

 

 

 

Related Exchange:

 

All Exchanges

 

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Procedures for Exercise:

 

 

 

 

 

 

In respect of any Component:

 

 

 

 

 

 

Expiration Time:

 

Valuation Time

 

 

 

 

 

Expiration Date:

 

As provided in Annex A to this Confirmation (or, if such date is not a Scheduled
Trading Day, the next following Scheduled Trading Day that is not already an
Expiration Date for another Component); provided that if that date is a
Disrupted Day, the Expiration Date for such Component shall be the first
succeeding Scheduled Trading Day that is not a Disrupted Day and is not or is
not deemed to be an Expiration Date in respect of any other Component of the
Transaction hereunder; and provided further that if the Expiration Date has not
occurred pursuant to the preceding proviso as of the Final Disruption Date, the
Calculation Agent shall have the right to elect, in its sole discretion, that
the Final Disruption Date shall be the Expiration Date (irrespective of whether
such date is an Expiration Date in respect of any other Component for the
Transaction). Notwithstanding the foregoing and anything to the contrary in the
Equity Definitions, if a Market Disruption Event occurs on any Expiration Date,
the Calculation Agent may determine in a commercially reasonable manner that
such Expiration Date is a Disrupted Day only in part, in which case the
Calculation Agent shall make adjustments to the Number of Warrants for the
relevant Component for which such day shall be the Expiration Date, shall
designate the Scheduled Trading Day determined in the manner described in the
immediately preceding sentence as the Expiration Date for the remaining Warrants
for such Component and may determine the VWAP Price based on transactions in the
Shares effected before the relevant Market Disruption Event occurred and/or
after the relevant Market Disruption Event ended. Any Scheduled Trading Day on
which, as of the date hereof, the Exchange is scheduled to close prior to its
normal close of trading shall be deemed not to be a Scheduled Trading Day; if a
closure of the Exchange prior to its normal close of trading on any Scheduled
Trading Day is scheduled following the date hereof, then such Scheduled Trading
Day shall be deemed to be a Disrupted Day in full. Section 6.6 of the Equity
Definitions shall not apply to any Valuation Date occurring on an Expiration
Date. “Final Disruption Date” means the eighth Scheduled Trading Day immediately
following April 26, 2019.

 

 

 

 

 

Market Disruption Event:

 

Section 6.3(a) of the Equity Definitions is hereby amended by (A) deleting the
words “during the one hour period that ends at the relevant Valuation Time,
Latest Exercise Time, Knock-in Valuation Time or Knock-out Valuation Time, as
the case may be,” in clause (ii) thereof and (B) by replacing the words “or

 

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(iii) an Early Closure.” therein with “(iii) an Early Closure, or (iv) a
Regulatory Disruption.”

 

 

 

 

 

 

Section 6.3(d) of the Equity Definitions is hereby amended by deleting the
remainder of the provision following the term “Scheduled Closing Time” in the
fourth line thereof.

 

 

 

 

 

Regulatory Disruption:

 

Any event that Dealer, in its reasonable discretion, determines makes it
appropriate, with regard to any legal, regulatory or self-regulatory
requirements or related policies and procedures (whether or not such
requirements, policies or procedures are imposed by law or have been voluntarily
adopted by Dealer generally in its corporate equity derivatives business with
respect to transactions similar to the Transaction), for Dealer to refrain from
or decrease any market activity in connection with the Transaction.

 

 

 

 

 

Automatic Exercise:

 

Applicable; and means that the Number of Warrants for the corresponding
Expiration Date will be deemed to be automatically exercised at the Expiration
Time on such Expiration Date unless Dealer notifies Seller (by telephone or in
writing) prior to the Expiration Time on such Expiration Date that it does not
wish Automatic Exercise to occur, in which case Automatic Exercise will not
apply to such Expiration Date.

 

 

 

 

 

Counterparty’s Telephone Number

 

 

 

and Telex and/or Facsimile Number

 

 

 

and Contact Details for purpose of

 

 

 

Giving Notice:

 

As provided in Section 6(a) below.

 

 

 

 

Settlement Terms:

 

 

 

 

 

 

In respect of any Component:

 

 

 

 

 

 

Settlement Currency:

 

USD

 

 

 

 

 

Net Share Settlement:

 

On each Settlement Date, Counterparty shall deliver to Dealer a number of Shares
equal to the Number of Shares to be Delivered for such Settlement Date to the
account specified by Dealer and cash in lieu of any fractional Share valued at
the Relevant Price on the Valuation Date corresponding to such Settlement Date.
If, in the reasonable opinion of Counterparty or Dealer, based on advice of
counsel, for any reason, the Shares deliverable upon Net Share Settlement would
not be immediately freely transferable by Dealer under Rule 144 under the
Securities Act of 1933, as amended (the “Securities Act”), then Dealer may elect
to either (x) accept delivery of such Shares notwithstanding any restriction on
transfer or (y) have the provisions set forth in Section 8(b) below apply.

 

 

 

 

 

The Number of Shares to be Delivered shall be delivered by Counterparty to
Dealer no later than

 

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12:00 noon (local time in New York City) on the relevant Settlement Date.

 

 

 

 

Number of Shares to be Delivered:

 

In respect of any Exercise Date, subject to the last sentence of Section 9.5 of
the Equity Definitions, the product of (i) the number of Warrants exercised or
deemed exercised on such Exercise Date, (ii) the Warrant Entitlement and
(iii) (A) the excess of the VWAP Price on the Valuation Date occurring in
respect of such Exercise Date over the Strike Price (or, if there is no such
excess, zero) divided by (B) such VWAP Price.

 

 

 

 

 

VWAP Price:

 

For any Exchange Business Day, as determined by the Calculation Agent based on
the New York Volume Weighted Average Price per Share for the regular trading
session (including any extensions thereof) of the Exchange on such Exchange
Business Day (without regard to pre-open or after hours trading outside of such
regular trading session), as published by Bloomberg at 4:15 P.M., New York City
time (or 15 minutes following the end of any extension of the regular trading
session), on such Exchange Business Day, on Bloomberg page “ALJ.N <Equity> AQR”
(or any successor thereto) (or if such published volume weighted average price
is unavailable or is manifestly incorrect, the market value of one Share on such
Exchange Business Day, as determined by the Calculation Agent using a volume
weighted method).

 

 

 

 

 

Other Applicable Provisions:

 

The provisions of Sections 9.1(c), 9.4, 9.8, 9.9, 9.10, 9.11 and 9.12 of the
Equity Definitions will be applicable as if “Physical Settlement” applied to the
Transaction; provided that the Representation and Agreement contained in
Section 9.11 of the Equity Definitions shall be modified by excluding any
representations therein relating to restrictions, obligations, limitations or
requirements under applicable securities laws that exist as a result of the fact
that Counterparty is the issuer of the Shares.

 

 

 

 

Adjustments:

 

 

 

 

 

 

 

In respect of any Component:

 

 

 

 

 

 

Method of Adjustment:

 

Calculation Agent Adjustment; provided that in respect of an Extraordinary
Dividend, “Calculation Agent Adjustment” shall be as described in the provision
below. For the avoidance of doubt, Calculation Agent Adjustment (including,
without limitation, in respect of Extraordinary Dividends) shall continue to
apply until the obligations of the parties (including any obligations of
Counterparty pursuant to Section 8(e) below) under the Transaction have been
satisfied in full.

 

 

 

 

 

Extraordinary Dividend:

 

Any cash dividend or distribution on the Shares with an ex-dividend date
occurring on or after the Trade

 

5

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Date and on or prior to the Expiration Date for the Component with the latest
Expiration Date (or, if any Deficit Shares are owed pursuant to
Section 8(e) below, such later date on which Counterparty’s obligations under
this Transaction have been satisfied in full) the amount of which differs from
the Ordinary Dividend Amount for such dividend or distribution. If no such
ex-dividend date occurs within a regular quarterly dividend period, an
ex-dividend date with a cash dividend or distribution of zero shall be deemed to
have occurred on the last Scheduled Trading Day of such regular quarterly
dividend period.

 

 

 

 

Ordinary Dividend Amount:

 

For any regular quarterly dividend period, USD0.06 for the first cash dividend
or distribution on the Shares for which the ex-dividend date falls within such
period, and zero for any subsequent dividend or distribution on the Shares for
which the ex-dividend date falls within the same period.

 

 

 

 

 

Extraordinary Dividend Adjustment:

 

If at any time during the period from and including the Trade Date, to and
including the Expiration Date for the Component with the latest Expiration Date
(or, if any Deficit Shares are owed pursuant to Section 8(e) below, such later
date on which Counterparty’s obligations under this Transaction have been
satisfied in full), an ex-dividend date for an Extraordinary Dividend occurs or
is deemed to occur, then the Calculation Agent will make adjustments to any one
or more of the Strike Price, the Number of Warrants, the Warrant Entitlement
and/or any other variable relevant to the exercise, settlement, payment or other
terms of the Transaction as it determines appropriate to account for the
economic effect on the Transaction of such Extraordinary Dividend.

 

 

 

 

Extraordinary Events:

 

 

 

 

 

 

 

New Shares:

 

In the definition of New Shares in Section 12.1(i) of the Equity Definitions,
the text in clause (i) thereof shall be deleted in its entirety and replaced
with “publicly quoted, traded or listed on any of The New York Stock Exchange,
The NASDAQ Global Market or The NASDAQ Global Select Market (or their respective
successors) and of a corporation that is organized under the laws of the United
States, any State thereof or the District of Columbia”.

 

 

 

 

 

Merger Event:

 

Applicable; provided that if an event occurs that constitutes both a Merger
Event under Section 12.1(b) of the Equity Definitions and an Additional
Termination Event under Section 8(j)(iv) of this Confirmation, Dealer may elect,
in its commercially reasonable judgment, whether the provisions of Section 12.2
of the Equity Definitions or Section 8(j)(iv) will apply.

 

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Consequences of Merger Events:

 

 

 

 

 

 

(a)  Share-for-Share:

 

Modified Calculation Agent Adjustment

 

 

 

 

 

(b)  Share-for-Other:

 

Cancellation and Payment (Calculation Agent Determination)

 

 

 

 

 

(c)  Share-for-Combined:

 

Cancellation and Payment (Calculation Agent Determination); provided that the
Calculation Agent may elect Component Adjustment for all or part of the
Transaction.

 

 

 

 

Tender Offer:

 

Applicable; provided that if an event occurs that constitutes both a Tender
Offer under Section 12.1(d) of the Equity Definitions and an Additional
Termination Event under Section 8(j)(iii) of this Confirmation, Dealer may
elect, in its commercially reasonable judgment, whether the provisions of
Section 12.3 of the Equity Definitions or Section 8(j)(iii) will apply.

 

 

 

 

 

Consequences of Tender Offers:

 

 

 

 

 

 

(a)  Share-for-Share:

 

Modified Calculation Agent Adjustment

 

 

 

 

 

(b)  Share-for-Other:

 

Modified Calculation Agent Adjustment

 

 

 

 

 

(c)  Share-for-Combined:

 

Modified Calculation Agent Adjustment

 

 

 

 

Consequences of Announcement Events:

 

If an Announcement Event occurs, then on the earliest to occur of the date on
which the transaction described in such Announcement Event (as amended or
modified) is cancelled, withdrawn, discontinued, otherwise terminated or results
in a Merger Date or Tender Offer Date, as applicable, or the Expiration Date,
Early Termination Date or other date of cancellation or termination in respect
of each Warrant (the “Announcement Event Adjustment Date”), the Calculation
Agent will determine the cumulative economic effect on the relevant Warrants of
the Announcement Event (without duplication in respect of any other adjustment
or cancellation valuation made pursuant to this Confirmation, the Equity
Definitions or the Agreement, regardless of whether the Announcement Event
actually results in a Merger Event or Tender Offer, and taking into account such
factors as the Calculation Agent may commercially reasonably determine,
including, without limitation, changes in volatility, expected dividends, stock
loan rate or liquidity relevant to the Shares or the Transaction whether within
a commercially reasonable period of time prior to or after the Announcement
Event or for any commercially reasonable period of time such changes are in
effect, including, without limitation, if applicable, the period from the
Announcement Event to the relevant Announcement Event Adjustment Date); provided
that, for the avoidance of doubt the occurrence of an Announcement Event
Adjustment Date in respect of the cancellation, withdrawal, discontinuation or
other

 

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termination of the transaction described in an Announcement Event (as amended or
modified) shall not preclude the occurrence of a later Announcement Event with
respect to such transaction. If the Calculation Agent determines that such
cumulative economic effect on any Warrant is material, then on the Announcement
Event Adjustment Date for such Warrant, the Calculation Agent may make such
adjustment to the exercise, settlement, payment or any other terms of such
Warrant as the Calculation Agent determines appropriate to account for such
economic effect, which adjustment shall be effective immediately prior to the
exercise, termination or cancellation of such Warrant, as the case may be.

 

 

 

 

Announcement Event:

 

(i) The public announcement of any Merger Event or Tender Offer or the intention
to enter into a Merger Event or Tender Offer, (ii) the public announcement by
Counterparty of an intention to solicit or enter into, or to explore strategic
alternatives or other similar undertaking that may include, a Merger Event or
Tender Offer or (iii) any subsequent public announcement of a change to a
transaction or intention that is the subject of an announcement of the type
described in clause (i) or (ii) of this sentence (including, without limitation,
a new announcement, whether or not by the same party, relating to such a
transaction or intention or the announcement of a withdrawal from, or the
abandonment or discontinuation of, such a transaction or intention) (in each
case, whether such announcement is made by Counterparty or a third party);
provided that, for the avoidance of doubt, the occurrence of an Announcement
Event with respect to any transaction or intention shall not preclude the
occurrence of a later Announcement Event with respect to such transaction or
intention.

 

 

 

 

 

Announcement Date:

 

The definition of “Announcement Date” in Section 12.1 of the Equity Definitions
is hereby amended by (i) replacing the words “a firm” with the word “any” in the
second and fourth lines thereof, (ii) replacing the word “leads to the” with the
words “, if completed, would lead to a” in the third and the fifth lines
thereof, (iii) replacing the words “voting shares” with the word “Shares” in the
fifth line thereof, and (iv) inserting the words “by any entity” after the word
“announcement” in the second and the fourth lines thereof.

 

 

 

 

 

Modified Calculation

 

 

 

Agent Adjustment:

 

If, in respect of a Merger Event, the Counterparty under the Transaction
following such Merger Event will not be the issuer of the New Shares, the Dealer
may elect (in its sole discretion) for Cancellation and Payment (Calculation
Agent Determination) to apply. In addition, if, in respect of any Merger Event
to

 

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which Modified Calculation Agent Adjustment applies, the adjustments to be made
in accordance with Section 12.2(e)(i) of the Equity Definitions would result in
Counterparty being different from the issuer of the Shares, then with respect to
such Merger Event, as a condition precedent to the adjustments contemplated in
Section 12.2(e)(i) of the Equity Definitions, Counterparty and the issuer of the
Shares shall, prior to the Merger Date, have entered into such documentation
containing representations, warranties and agreements relating to securities law
and other issues as requested by Dealer that Dealer has determined, in its
reasonable discretion, to be reasonably necessary or appropriate to allow Dealer
to continue as a party to the Transaction, as adjusted under
Section 12.2(e)(i) of the Equity Definitions, and to preserve its commercially
reasonable hedging or hedge unwind activities in connection with the Transaction
in a manner compliant with applicable legal, regulatory or self-regulatory
requirements, or with related policies and procedures applicable to Dealer
(whether or not such requirements, policies or procedures are imposed by law or
have been voluntarily adopted by Dealer generally in its corporate equity
derivatives business with respect to transactions similar to the Transaction),
and if such conditions are not met or if the Calculation Agent determines that
no adjustment that it could make under Section 12.2(e)(i) of the Equity
Definitions will produce a commercially reasonable result, then the consequences
set forth in Section 12.2(e)(ii) of the Equity Definitions shall apply.

 

 

 

 

Nationalization, Insolvency

 

 

 

or Delisting:

 

Cancellation and Payment (Calculation Agent Determination); provided that in
addition to the provisions of Section 12.6(a)(iii) of the Equity Definitions, it
will also constitute a Delisting if the Shares are not immediately re-listed,
re-traded or re-quoted on any of the New York Stock Exchange, The NASDAQ Global
Select Market or The NASDAQ Global Market (or their respective successors); if
the Shares are immediately re-listed, re-traded or re-quoted on any such
exchange or quotation system, such exchange or quotation system shall thereafter
be deemed to be the Exchange.

 

 

 

 

 

Additional Termination Event(s):

 

Notwithstanding anything to the contrary in the Equity Definitions, if, as a
result of an Extraordinary Event, any Transaction would be cancelled or
terminated (whether in whole or in part) pursuant to Article 12 of the Equity
Definitions, an Additional Termination Event (with such terminated
Transaction(s) (or portions thereof) being the Affected Transaction(s) and
Counterparty being the sole Affected Party) shall be deemed to occur, and, in
lieu of Sections 12.7, 12.8 and 12.9 of the Equity

 

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Definitions, Section 6 of the Agreement shall apply to such Affected
Transaction(s).

 

 

 

 

Additional Disruption Events:

 

 

 

 

 

 

(a)  Change in Law:

 

Applicable; provided that Section 12.9(a)(ii) of the Equity Definitions is
hereby amended by (i) replacing the phrase “the interpretation” in the third
line thereof with the phrase “, or public announcement of, the formal or
informal interpretation”, (ii) by adding the phrase “and/or Hedge Position”
after the word “Shares” in clause (X) thereof, and (iii) by immediately
following the word “Transaction” in clause (X) thereof, adding the phrase “in
the manner contemplated by the Hedging Party on the Trade Date (the
contemplation of which on the Trade Date the Hedging Party is able to reasonably
demonstrate) and the Hedging Party has determined in good faith that it would
not be practicable for it to hedge its exposure with respect to such Transaction
in any other manner due to materially increased costs, greater liability
exposure or greater exposure to market risk or for any other reasonable reason”;
provided, further that (i) any determination as to whether (A) the adoption of
or any change in any applicable law or regulation (including, for the avoidance
of doubt and without limitation, (x) any tax law or (y) adoption or promulgation
of new regulations authorized or mandated by existing statute) or (B) the
promulgation of or any change in the interpretation by any court, tribunal or
regulatory authority with competent jurisdiction of any applicable law or
regulation (including any action taken by a taxing authority), in each case,
constitutes a “Change in Law” shall be made without regard to Section 739 of the
Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 or any similar
legal certainty provision in any legislation enacted, or rule or regulation
promulgated, on or after the Trade Date, and (ii) Section 12.9(a)(ii) of the
Equity Definitions is hereby amended by replacing the parenthetical beginning
after the word “regulation” in the second line thereof with the phrase
“(including, for the avoidance of doubt and without limitation, (x) any tax law
or (y) adoption or promulgation of new regulations authorized or mandated by
existing statute)”.

 

 

 

 

 

(b)  Failure to Deliver:

 

Not Applicable

 

 

 

 

 

(c)  Insolvency Filing:

 

Applicable

 

 

 

 

 

(d)  Hedging Disruption:

 

Applicable; provided that

 

 

 

 

 

 

 

(i)

Section 12.9(a)(v) of the Equity Definitions is hereby modified by inserting the
following two phrases at the end of such Section:

 

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“For the avoidance of doubt, the term “equity price risk” shall be deemed to
include, but shall not be limited to, stock price and volatility risk. And, for
the further avoidance of doubt, the transactions or assets referred to in
phrases (A) or (B) above must be available on commercially reasonable pricing
and other terms.”

 

 

 

 

 

 

 

 

 

(ii)

Section 12.9(b)(iii) of the Equity Definitions is hereby amended by inserting in
the third line thereof, after the words “to terminate the Transaction”, the
words “or a portion of the Transaction affected by such Hedging Disruption”.

 

 

 

 

 

 

(e)

Increased Cost of Hedging:

 

Applicable; provided that, Section 12.9(a)(vi) of the Equity Definitions is
hereby amended by adding the following phrase immediately following the words
“other than brokerage commissions” in the third line thereof:  “and other than
the rate to borrow Shares in respect of such Transaction”.

 

 

 

 

 

 

(f)

Loss of Stock Borrow:

 

Applicable

 

 

 

 

 

 

 

Maximum Stock Loan Rate:

 

200 basis points per annum

 

 

 

 

 

 

(g)

Increased Cost of Stock Borrow:

 

Applicable

 

 

 

 

 

 

 

Initial Stock Loan Rate:

 

25 basis points per annum

 

 

 

 

Hedging Party:

 

Dealer for all applicable Additional Disruption Events.

 

 

 

 

 

Determining Party:

 

Dealer for all applicable Additional Disruption Events.

 

 

 

 

 

Non-Reliance:

 

Applicable

 

 

 

 

 

Agreements and Acknowledgments

 

 

 

Regarding Hedging Activities:

 

Applicable

 

 

 

 

 

Additional Acknowledgments:

 

Applicable

 

 

 

 

 

3.  Calculation Agent:

 

Dealer; provided that all calculations and determinations made by the
Calculation Agent shall be made in good faith and in a commercially reasonable
manner; provided further that, upon receipt of written request from
Counterparty, the Calculation Agent shall promptly provide Counterparty with a
written explanation describing in reasonable detail any calculation, adjustment
or determination made by it (including any quotations, market data or
information from internal or external sources used in making such calculation,
adjustment or determination, as the case may be, but without disclosing Dealer’s
proprietary models or other information that may be proprietary or subject to
contractual, legal or regulatory obligations to not disclose such information),
and shall use commercially reasonable efforts to provide such written
explanation within five (5) Exchange Business Days from the receipt of such
request.

 

11

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4.

Account Details:

 

 

 

 

 

 

 

 

 

Dealer Payment Instructions:

 

 

 

 

 

 

 

 

Chase Manhattan Bank New York

 

 

 

 

For A/C Goldman, Sachs & Co.

 

 

 

 

A/C #930-1-011483

 

 

 

 

ABA: 021-000021

 

 

 

 

 

 

 

 

 

Account for delivery of Shares to Dealer: To be provided by Dealer

 

 

 

 

 

 

 

Counterparty Payment Instructions: To be provided by Counterparty.

 

 

 

 

 

 

5.

Offices:

 

 

 

 

 

 

 

 

 

The Office of Dealer for the Transaction is:

 

 

 

 

 

 

 

 

 

200 West Street, New York, New York 10282-2198

 

 

 

 

 

 

 

The Office of Counterparty for the Transaction is:

 

 

 

 

 

 

 

 

 

12700 Park Central Dr., Suite 1600

 

 

 

 

Dallas, TX 75251

 

 

 

 

 

 

 

6.

Notices: For purposes of this Confirmation:

 

 

 

 

 

 

 

 

(a)  Address for notices or communications to Counterparty:

 

 

 

 

 

 

 

To:

 

 

 

 

 

Attn:

Shai Even

 

 

 

 

 

Chief Financial Officer

 

 

 

 

Telephone:

(972) 367-3669

 

 

 

 

Facsimile:

(972) 367-3726

 

 

 

 

Email:

shai.even@alonusa.com

 

 

 

 

 

 

 

 

 

 

With a copy to:

 

 

 

 

 

 

 

 

 

 

 

Attn:

James Ranspot

 

 

 

 

 

Chief Legal Counsel — Corporate

 

 

 

 

Telephone:

(972) 367-3614

 

 

 

 

Email:

james.ranspot@alonusa.com

 

 

 

 

 

 

 

 

 

 

With a copy to:

 

 

 

 

 

 

 

 

 

 

 

Attn:

David Stone

 

 

 

 

 

Vinson & Elkins LLP

 

 

 

 

Telephone:

(713) 758-2236

 

 

 

 

Email:

dstone@velaw.com

 

 

 

 

 

 

 

 

 

 

(b)  Address for notices or communications to Dealer:

 

 

 

 

 

 

 

 

To:

Goldman, Sachs & Co.

 

 

 

 

 

200 West Street

 

 

 

 

 

New York, NY 10282-2198

 

 

 

 

Attn:

Bennett Schachter,

 

 

 

 

 

Structured Equity Group

 

 

 

 

Telephone:

(212) 902-2568

 

 

 

 

Facsimile:

(212) 650-5140

 

 

 

 

Email:

bennett.schachter@gs.com

 

 

 

12

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With a copy to:

 

 

 

 

 

 

 

 

 

 

 

Attn:

Daniel Josephs

 

 

 

 

 

Structured Equity Group

 

 

 

 

Telephone:

(212) 902-8193

 

 

 

 

Facsimile:

(917) 977-3943

 

 

 

 

Email:

daniel.josephs@gs.com

 

 

 

 

 

 

 

 

 

 

And email notification to the following address:

 

 

 

 

Eq-derivs-notifications@am.ibd.gs.com

 

 

 

 

 

 

 

 

7.

Representations, Warranties and Agreements:

 

 

 

(a)                                 In addition to the representations and
warranties in the Agreement and those contained elsewhere herein, Counterparty
represents and warrants to and for the benefit of, and agrees with, Dealer as
follows:

 

(i)                                     On the Trade Date and as of the date of
any election by Counterparty of the Share Termination Alternative under (and as
defined in) Section 8(a) below, (A) none of Counterparty and its officers and
directors is aware of any material nonpublic information regarding Counterparty
or the Shares and (B) all reports and other documents filed by Counterparty with
the Securities and Exchange Commission pursuant to the Securities Exchange Act
of 1934, as amended (the “Exchange Act”), when considered as a whole (with the
more recent such reports and documents deemed to amend inconsistent statements
contained in any earlier such reports and documents), do not contain any untrue
statement of a material fact or any omission of a material fact required to be
stated therein or necessary to make the statements therein, in the light of the
circumstances in which they were made, not misleading.

 

(ii)                                  Without limiting the generality of
Section 13.1 of the Equity Definitions, Counterparty acknowledges that neither
Dealer nor any of its affiliates is making any representations or warranties or
taking any position or expressing any view with respect to the treatment of the
Transaction under any accounting standards  including ASC Topic 260, Earnings
Per Share, ASC Topic 815, Derivatives and Hedging, or ASC Topic 480,
Distinguishing Liabilities from Equity and ASC 815-40, Derivatives and Hedging —
Contracts in Entity’s Own Equity (or any successor issue statements).

 

(iii)                               Prior to the Trade Date, Counterparty shall
deliver to Dealer a resolution of Counterparty’s board of directors authorizing
the Transaction and such other certificate or certificates as Dealer shall
reasonably request.  Based on such resolutions, neither Dealer nor any of its
affiliates shall be subject to the restrictions under Section 203 of the
Delaware General Corporation Law as an “interested stockholder” of Counterparty
by virtue of (A) its role as initial purchaser of, or market-maker in, any
securities of Counterparty convertible into the Shares, (B) its entry into the
Transaction and/or (C) any hedging transactions in Counterparty’s securities in
connection with the Transaction.

 

(iv)                              Counterparty is not entering into this
Confirmation to create actual or apparent trading activity in the Shares (or any
security convertible into or exchangeable for Shares) or to raise or depress or
otherwise manipulate the price of the Shares (or any security convertible into
or exchangeable for Shares) or otherwise in violation of the Exchange Act.

 

(v)                                 Counterparty is not, and after giving effect
to the transactions contemplated hereby will not be, required to register as an
“investment company” as such term is defined in the Investment Company Act of
1940, as amended.

 

(vi)                              On the Trade Date and the Premium Payment Date
(A) the assets of Counterparty at their fair valuation exceed the liabilities of
Counterparty, including contingent liabilities, (B) the capital of Counterparty
is adequate to conduct the business of Counterparty and (C) Counterparty has the
ability to pay its debts and obligations as such debts mature and does not
intend to, or does not believe that it will, incur debt beyond its ability to
pay as such debts mature.

 

13

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(vii)                           Counterparty shall not take any action to
decrease the number of Available Shares below the Capped Number (each as defined
below).

 

(viii)                        The representations and warranties of Counterparty
set forth in Section 3 of the Agreement and Section 1(g), (h), (j), (m), (p),
(t), (u), (v), (w), (x), (y), (z), (bb), (cc), (dd), (ee), (gg) and (hh) of the
Purchase Agreement, dated as of the Trade Date between Counterparty and the
Initial Purchasers (as defined therein) party thereto (the “Purchase Agreement”)
are true and correct as of the Trade Date and the Effective Date and are hereby
deemed to be repeated to Dealer as if set forth herein.

 

(ix)                              (x) (A) On the Trade Date, the Shares or
securities that are convertible into, or exchangeable or exercisable for Shares,
are not, and shall not be, subject to a “restricted period,” as such term is
defined in Regulation M under the Exchange Act (“Regulation M”) and
(B) Counterparty shall not engage in any “distribution,” as such term is defined
in Regulation M, other than a distribution meeting the requirements of the
exceptions set forth in sections 101(b)(10) and 102(b)(7) of Regulation M, until
the second Exchange Business Day immediately following the Trade Date, and
(y)(A) during the period starting on the first Expiration Date and ending on the
last Expiration Date (the “Settlement Period”), the Shares or securities that
are convertible into, or exchangeable or exercisable for Shares, are not, and
shall not be, subject to a “restricted period,” as defined in Regulation M and
(B) Counterparty shall not engage in any “distribution,” as such term is defined
in Regulation M until the second Exchange Business Day immediately following the
Settlement Period, unless, in the case of this clause (y), Counterparty has
provided written notice (which notice shall be deemed to contain a
representation and warranty that, as of the time such notice is given,
Counterparty is not in possession of, and is not delivering such notice on the
basis of, material nonpublic information with respect to Counterparty or the
Shares) to Dealer of the relevant “restricted period” not later than the
Scheduled Trading Day immediately preceding the first day of such “restricted
period”; provided that (I) Counterparty shall provide written notice (which
notice shall be deemed to contain a representation and warranty that, as of the
time such notice is given, Counterparty is not in possession of, and is not
delivering such notice on the basis of, material nonpublic information with
respect to Counterparty or the Shares) to Dealer of the end of the relevant
“restricted period” not later than the last day of such “restricted period”,
(II) Counterparty acknowledges and agrees that any notice under this clause
(y) may result in a Regulatory Disruption, (III) the Calculation Agent may make
a corresponding adjustment in respect of any one or more of the terms relevant
to the exercise, settlement or payment of the Warrants to preserve the fair
value of the Options to Dealer after taking into account such Regulatory
Disruption, (IV) the aggregate number of Scheduled Trading Days that occur
during any such “restricted period” (in the aggregate across all such
“restricted periods” to which this clause (y) applies) will not exceed 10
Scheduled Trading Days and (V) the aggregate number of “restricted periods” to
which this clause (y) applies will not exceed two “restricted periods”.

 

(x)                                 During the Settlement Period and on any
other Exercise Date, neither Counterparty nor any “affiliated purchaser” (as
defined in Rule 10b-18 of the Exchange Act (“Rule 10b-18”)) shall directly or
indirectly (including, without limitation, by means of any cash-settled or other
derivative instrument) purchase, offer to purchase, place any bid or limit order
that would effect a purchase of, or commence any tender offer relating to, any
Shares (or an equivalent interest, including a unit of beneficial interest in a
trust or limited partnership or a depository share) or any security convertible
into or exchangeable or exercisable for Shares; provided that, to the extent the
relevant transaction does not constitute a “Rule 10b-18 purchase” (as defined in
Rule 10b-18), such restrictions will not apply to the following: (A) privately
negotiated, off-market purchases of Shares (or any security convertible into or
exchangeable for Shares) at the then-prevailing fair market price thereof;
(B) purchases of Shares pursuant to exercises of stock options granted to former
or current employees, officers, directors, independent contractors or other
affiliates of Counterparty, including the withholding and/or purchase of Shares
from holders of such options to satisfy payment of the option exercise price
and/or to satisfy tax withholding requirements in connection with the exercise
of such options; (C) purchases of Shares from holders of performance shares or
units or restricted shares or units to satisfy tax withholding

 

14

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requirements in connection with vesting; (D) the conversion or exchange by
holders of any convertible or exchangeable securities of Counterparty issued
prior to the Trade Date pursuant to the terms of such securities; or
(E) purchases of Shares effected by or for a plan by an agent independent of the
Counterparty that satisfy the requirements of Rule 10b-18(a)(13)( ii).

 

(xi)                              Counterparty agrees that it (A) will not
during the Settlement Period make, or permit to be made, any public announcement
(as defined in Rule 165(f) under the Securities Act) of any Merger Transaction
or potential Merger Transaction unless (i) such public announcement is made
prior to the opening or after the close of the regular trading session on the
Exchange for the Shares or (ii) Counterparty determines, based on advice of
counsel, that the Exchange and/or the Securities and Exchange Commission, as
applicable, specifically require that such public announcement be made after the
opening or prior to the close of the regular trading session on the Exchange for
the Shares and Counterparty has taken reasonable efforts (whether before or
after its determination that such requirement exists) to make such public
announcement in accordance with the immediately preceding clause (i); provided
that Counterparty acknowledges and agrees that any such public announcement may
result in a Regulatory Disruption; (B) shall promptly (but in any event prior to
the next opening of the regular trading session on the Exchange) notify Dealer
following any such announcement that such announcement has been made; and
(C) shall promptly (but in any event prior to the next opening of the regular
trading session on the Exchange) provide Dealer with written notice specifying
(i) Counterparty’s average daily Rule 10b-18 Purchases (as defined in
Rule 10b-18) during the three full calendar months immediately preceding the
date of such announcement that were not effected through Dealer or its
affiliates and (ii) the number of Shares purchased pursuant to the proviso in
Rule 10b-18(b)(4) under the Exchange Act for the three full calendar months
preceding the date of such announcement.  Such written notice shall be deemed to
be a certification by Counterparty to Dealer that such information is true and
correct.  In addition, Counterparty shall promptly notify Dealer of the earlier
to occur of the completion of such transaction and the completion of the vote by
target shareholders.  “Merger Transaction” means any merger, acquisition or
similar transaction involving a recapitalization as contemplated by
Rule 10b-18(a)(13)(iv) under the Exchange Act.

 

(xii)                           (A) Any Shares issued or delivered in connection
with the Transaction shall be duly authorized and validly issued, fully paid and
non-assessable, and the issuance or delivery thereof shall not be subject to any
preemptive or similar rights and shall, upon issuance, be accepted for listing
or quotation on the Exchange; and (B) the Shares of Counterparty initially
issuable upon exercise of the Warrants have been reserved for issuance by all
required corporate action of the Counterparty.

 

(xiii)                        To Counterparty’s knowledge, based on due inquiry,
no state or local (including non-U.S. jurisdictions) law, rule, regulation or
regulatory order applicable to the Shares would give rise to any reporting,
consent, registration or other requirement (including without limitation a
requirement to obtain prior approval from any person or entity) as a result of
Dealer or its affiliates owning, holding (however defined) or having a right to
acquire Shares.

 

(xiv)                       Counterparty (A) is capable of evaluating investment
risks independently, both in general and with regard to all transactions and
investment strategies involving a security or securities; (B) will exercise
independent judgment in evaluating the recommendations of any broker-dealer or
its associated persons, unless it has otherwise notified the broker-dealer in
writing; and (C) has total assets of at least $50 million.

 

(xv)                          Without limiting the generality of Sections
3(a)(i), (ii), (iv) and (v) of the Agreement, neither the execution and delivery
of this Confirmation nor the incurrence or performance of obligations of
Counterparty hereunder will (A) conflict with or result in a breach of (w) the
certificate of incorporation or by-laws (or any equivalent documents) of
Counterparty, (x) to Counterparty’s knowledge, based on due inquiry, any
applicable law or regulation, (y) any order, writ, injunction or decree of any
court or governmental authority or agency, or (z) any agreement or instrument
filed as an exhibit to Counterparty’s Annual Report on Form 10-K for the year
ended December 31, 2012, as updated by any subsequent filings, to which
Counterparty or any of its subsidiaries is a party or by which Counterparty or
any of its subsidiaries is bound or to

 

15

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which Counterparty or any of its subsidiaries is subject, or (B) constitute a
default under, or result in the creation of any lien under, any such agreement
or instrument referred to in clause (A)(z) above.

 

(b)                                 Each of Dealer and Counterparty agrees and
represents that it is an “eligible contract participant” as defined in the U.S.
Commodity Exchange Act, as amended, and is entering into the Transaction as
principal (and not as agent or in any other capacity, fiduciary or otherwise)
and not for the benefit of any third party.

 

(c)                                  Each of Dealer and Counterparty
acknowledges that the offer and sale of the Transaction is intended to be exempt
from registration under the Securities Act, by virtue of Section 4(2) thereof. 
Accordingly, Dealer represents and warrants to Counterparty that (i) it has the
financial ability to bear the economic risk of its investment in the Transaction
and is able to bear a total loss of its investment and its investments in and
liabilities in respect of the Transaction, which it understands are not readily
marketable, are not disproportionate to its net worth, and it is able to bear
any loss in connection with the Transaction, including the loss of its entire
investment in the Transaction, (ii) it is an “accredited investor” as that term
is defined in Regulation D as promulgated under the Securities Act, (iii) it is
entering into the Transaction for its own account and without a view to the
distribution or resale thereof, (iv) the assignment, transfer or other
disposition of the Transaction has not been and will not be registered under the
Securities Act and is restricted under this Confirmation, the Securities Act and
state securities laws, and (v) its financial condition is such that it has no
need for liquidity with respect to its investment in the Transaction and no need
to dispose of any portion thereof to satisfy any existing or contemplated
undertaking or indebtedness and is capable of assessing the merits of and
understanding (on its own behalf or through independent professional advice),
and understands and accepts, the terms, conditions and risks of the Transaction.

 

(d)                                 Each of Dealer and Counterparty agrees and
acknowledges that Dealer is a “financial institution,” “swap participant” and
“financial participant” within the meaning of Sections 101(22), 101(53C) and
101(22A) of Title 11 of the United States Code (the “Bankruptcy Code”).  The
parties hereto further agree and acknowledge (A) that this Confirmation is (i) a
“securities contract,” as such term is defined in Section 741(7) of the
Bankruptcy Code, with respect to which each payment and delivery hereunder or in
connection herewith is a “termination value,” “payment amount” or “other
transfer obligation” within the meaning of Section 362 of the Bankruptcy Code
and a “settlement payment” within the meaning of Section 546 of the Bankruptcy
Code, and (ii) a “swap agreement,” as such term is defined in Section 101(53B)
of the Bankruptcy Code, with respect to which each payment and delivery
hereunder or in connection herewith is a “termination value,” “payment amount”
or “other transfer obligation” within the meaning of Section 362 of the
Bankruptcy Code and a “transfer” within the meaning of Section 546 of the
Bankruptcy Code, and (B) that Dealer is entitled to the protections afforded by,
among other sections, Sections 362(b)(6), 362(b)(17), 362(b)(27), 362(o),
546(e), 546(g), 546(j), 548(d)(2), 555, 560 and 561 of the Bankruptcy Code.

 

(e)                            As a condition to the effectiveness of the
Transaction, Counterparty shall deliver to Dealer (i) an incumbency certificate,
dated as of the Trade Date, of Counterparty in customary form and (ii) one or
more opinions of counsel, dated as of the Effective Date and reasonably
acceptable to Dealer in form and substance, with respect to the matters set
forth in Section 3(a) of the Agreement (provided that solely for such purpose,
the phrase “any law applicable to it,” shall be deemed to be deleted from clause
(iii) thereof) and Sections 7(a)(v), 7(a)(xii)(A) and (B) and 7(a)(xv)(w) and
(z) of this Confirmation and such other matters as Dealer may reasonably
request.

 

(f)                                   Counterparty understands that
notwithstanding any other relationship between Counterparty and Dealer and its
affiliates, in connection with this Transaction and any other over-the-counter
derivative transactions between Counterparty and Dealer or its affiliates,
Dealer or its affiliate is acting as principal and is not a fiduciary or advisor
in respect of the Transaction, including any entry, exercise, amendment, unwind
or termination thereof.

 

8.              Other Provisions:

 

(a)                                 Alternative Calculations and Payment on
Early Termination and on Certain Extraordinary Events.  If Counterparty shall
owe Dealer any amount pursuant to Section 12.2, 12.3, 12.6, 12.7 or 12.9 of the
Equity Definitions or pursuant to Section 6(d)(ii) of the Agreement (a “Payment

 

16

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Obligation”), Counterparty shall have the right, in its sole discretion, to
elect to satisfy any such Payment Obligation by the Share Termination
Alternative (as defined below) by giving irrevocable telephonic notice to
Dealer, confirmed in writing within one Scheduled Trading Day, no later than
9:30 A.M., New York City time, on the Merger Date, Tender Offer Date,
Announcement Date, Early Termination Date or date of cancellation or termination
in respect of an Extraordinary Event, as applicable (“Notice of Share
Termination”); provided that if Counterparty does not validly elect to satisfy
its Payment Obligation by the Share Termination Alternative, Dealer shall have
the right, in its sole discretion, to elect to require Counterparty to satisfy
its Payment Obligation by the Share Termination Alternative, notwithstanding
Counterparty’s failure to so elect or Counterparty’s invalid election to the
contrary; and provided further that Counterparty shall not have the right to so
elect (but, for the avoidance of doubt, Dealer shall have the right to so elect)
in the event of (i) an Insolvency, a Nationalization, a Tender Offer or a Merger
Event, in each case, in which the consideration or proceeds to be paid to
holders of Shares consists solely of cash or (ii) an Event of Default in which
Counterparty is the Defaulting Party or a Termination Event in which
Counterparty is the Affected Party, which Event of Default or Termination Event
resulted from an event or events within Counterparty’s control.  Upon such
Notice of Share Termination, the following provisions shall apply on the
Scheduled Trading Day immediately following the Merger Date, the Tender Offer
Date, Announcement Date, Early Termination Date or date of cancellation or
termination in respect of an Extraordinary Event, as applicable:

 

Share Termination Alternative:                        Applicable and means that
Counterparty shall deliver to Dealer the Share Termination Delivery Property on
the date on which the Payment Obligation would otherwise be due pursuant to
Section 12.2, 12.3, 12.6, 12.7 or 12.9 of the Equity Definitions or
Section 6(d)(ii) of the Agreement, as applicable (the “Share Termination Payment
Date”), in satisfaction of the Payment Obligation.

 

Share Termination Delivery

Property:                                                                                                                                             
A number of Share Termination Delivery Units, as calculated by the Calculation
Agent, equal to the Payment Obligation divided by the Share Termination Unit
Price.  The Calculation Agent shall adjust the Share Termination Delivery
Property by replacing any fractional portion of the aggregate amount of a
security therein with an amount of cash in the Settlement Currency equal to the
value of such fractional security based on the values used to calculate the
Share Termination Unit Price.

 

Share Termination Unit Price:                                The value of
property contained in one Share Termination Delivery Unit on the date such Share
Termination Delivery Units are to be delivered as Share Termination Delivery
Property, as determined by the Calculation Agent in its discretion by
commercially reasonable means and notified by the Calculation Agent to
Counterparty at the time of notification of the Payment Obligation.

 

Share Termination Delivery Unit:             In the case of a Termination Event,
Event of Default, Delisting or Additional Disruption Event, one Share or, in the
case of an Insolvency, Nationalization, Merger Event or Tender Offer, one Share
or a unit consisting of the number or amount of each type of property received
by a holder of one Share (without consideration of any requirement to pay cash
or other consideration in lieu of fractional amounts of any securities) in such
Insolvency, Nationalization, Merger Event or Tender Offer.  If such Insolvency,
Nationalization, Merger Event or Tender Offer involves a choice of consideration
to be received by holders, such holder shall be deemed to have elected to
receive the maximum possible amount of cash.

 

Failure to
Deliver:                                                                                               
Not Applicable

 

Other Applicable Provisions:                                       If Share
Termination Alternative is applicable, the provisions of Sections 9.1(c), 9.8,
9.9, 9.10, 9.11 and 9.12 of the Equity Definitions

 

17

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will be applicable as if “Physical Settlement” applied to the Transaction,
except that all references to “Shares” shall be read as references to “Share
Termination Delivery Units”; provided that the Representation and Agreement
contained in Section 9.11 of the Equity Definitions shall be modified by
excluding any representations therein relating to restrictions, obligations,
limitations or requirements under applicable securities laws as a result of the
fact that Counterparty is the issuer of any Share Termination Delivery Units (or
any security forming a part thereof). If, in the reasonable opinion of
Counterparty or Dealer, based on advice of counsel, for any reason, any
securities comprising the Share Termination Delivery Units deliverable pursuant
to this Section 8(a) would not be immediately freely transferable by Dealer
under Rule 144 under the Securities Act, then Dealer may elect to either
(x) permit delivery of such securities notwithstanding any restriction on
transfer or (y) have the provisions set forth in Section 8(b) below apply.

 

(b)                                       Registration/Private Placement
Procedures.  (i) With respect to the Transaction, the following provisions shall
apply to the extent provided for above opposite the caption “Net Share
Settlement” in Section 2 or in paragraph (a) of this Section 8.  If so
applicable, then, at the election of Counterparty by notice to Dealer within one
Exchange Business Day after the relevant delivery obligation arises, but in any
event at least one Exchange Business Day prior to the date on which such
delivery obligation is due, either (A) all Shares or Share Termination Delivery
Units, as the case may be, delivered by Counterparty to Dealer shall be, at the
time of such delivery, covered by an effective registration statement of
Counterparty for immediate resale by Dealer (such registration statement and the
corresponding prospectus (the “Prospectus”) (including, without limitation, any
sections describing the plan of distribution) in form and content commercially
reasonably satisfactory to Dealer) or (B) Counterparty shall deliver additional
Shares or Share Termination Delivery Units, as the case may be, so that the
value of such Shares or Share Termination Delivery Units, as determined by the
Calculation Agent to reflect an appropriate liquidity discount, equals the value
of the number of Shares or Share Termination Delivery Units that would otherwise
be deliverable if such Shares or Share Termination Delivery Units were freely
tradeable (without prospectus delivery) upon receipt by Dealer (such value, the
“Freely Tradeable Value”); provided that, if requested by Dealer, Counterparty
shall make the election described in this clause (B) with respect to Shares
delivered on all Settlement Dates no later than one Exchange Business Day prior
to the first Exercise Date, and the applicable procedures described below shall
apply to all Shares delivered on the Settlement Dates on an aggregate basis. 
(For the avoidance of doubt, as used in this paragraph (b) only, the term
“Counterparty” shall mean the issuer of the relevant securities, as the context
shall require.)

 

(ii)                                  If Counterparty makes the election
described in clause (b)(i)(A) above:

 

(A)                               Dealer (or an affiliate of Dealer designated
by Dealer) shall be afforded a reasonable opportunity to conduct a due diligence
investigation with respect to Counterparty that is customary in scope for
underwritten offerings of equity securities and that yields results that are
commercially reasonably satisfactory to Dealer or such affiliate, as the case
may be, in its discretion; and

 

(B)                               Dealer (or an affiliate of Dealer designated
by Dealer) and Counterparty shall enter into an agreement (a “Registration
Agreement”) on commercially reasonable terms in connection with the public
resale of such Shares or Share Termination Delivery Units, as the case may be,
by Dealer or such affiliate substantially similar to underwriting agreements
customary for underwritten offerings of equity securities, in form and substance
commercially reasonably satisfactory to Dealer or such affiliate and
Counterparty, which Registration Agreement shall include, without limitation,
provisions substantially similar to those contained in such underwriting
agreements relating to the indemnification of, and contribution in connection
with the liability of, Dealer and its affiliates and Counterparty, shall provide
for the payment by Counterparty of all expenses in connection with such resale,
including all registration costs and all fees and expenses of counsel for
Dealer, and shall provide for the delivery of accountants’

 

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“comfort letters” to Dealer or such affiliate with respect to the financial
statements and certain financial information contained in or incorporated by
reference into the Prospectus.

 

(iii)                               If Counterparty makes the election described
in clause (b)(i)(B) above:

 

(A)                               Dealer (or an affiliate of Dealer designated
by Dealer) and any potential institutional purchaser of any such Shares or Share
Termination Delivery Units, as the case may be, from Dealer or such affiliate
identified by Dealer shall be afforded a commercially reasonable opportunity to
conduct a due diligence investigation in compliance with applicable law with
respect to Counterparty customary in scope for private placements of equity
securities (including, without limitation, the right to have made available to
them for inspection all financial and other records, pertinent corporate
documents and other information reasonably requested by them), subject to
execution by such recipients of customary confidentiality agreements reasonably
acceptable to Counterparty;

 

(B)                               Dealer (or an affiliate of Dealer designated
by Dealer) and Counterparty shall use its reasonable best efforts to enter into
an agreement (a “Private Placement Agreement”) on commercially reasonable terms
in connection with the private placement of such Shares or Share Termination
Delivery Units, as the case may be, by Counterparty to Dealer or such affiliate
and the private resale of such shares by Dealer or such affiliate, substantially
similar to private placement purchase agreements customary for private
placements of equity securities, in form and substance commercially reasonably
satisfactory to Dealer and Counterparty, which Private Placement Agreement shall
include, without limitation, provisions substantially similar to those contained
in such private placement purchase agreements relating to the indemnification
of, and contribution in connection with the liability of, Dealer and its
affiliates and Counterparty, shall provide for the payment by Counterparty of
all expenses in connection with such resale, including all fees and expenses of
counsel for Dealer, shall contain representations, warranties and agreements of
Counterparty reasonably necessary or advisable to establish and maintain the
availability of an exemption from the registration requirements of the
Securities Act for such resales, and shall use its reasonable best efforts to
provide for the delivery of accountants’ “comfort letters” to Dealer or such
affiliate with respect to the financial statements and certain financial
information contained in or incorporated by reference into the offering
memorandum prepared for the resale of such Shares;

 

(C)                               Counterparty agrees that any Shares or Share
Termination Delivery Units so delivered to Dealer, (i) may be transferred by and
among Dealer and its affiliates, and Counterparty shall effect such transfer
without any further action by Dealer and (ii) after the minimum “holding period”
within the meaning of Rule 144(d) under the Securities Act has elapsed with
respect to such Shares or any securities issued by Counterparty comprising such
Share Termination Delivery Units, Counterparty shall promptly remove, or cause
the transfer agent for such Shares or securities to remove, any legends
referring to any such restrictions or requirements from such Shares or
securities upon delivery by Dealer (or such affiliate of Dealer) to Counterparty
or such transfer agent of any seller’s and broker’s representation letters
customarily delivered by Dealer in connection with resales of restricted
securities pursuant to Rule 144 under the Securities Act, without any further
requirement for the delivery of any certificate, consent, agreement, opinion of
counsel, notice or any other document, any transfer tax stamps or payment of any
other amount or any other action by Dealer (or such affiliate of Dealer); and

 

(D)                               Counterparty shall not take, or cause to be
taken, any action that would make unavailable either the exemption pursuant to
Section 4(2) of the Securities Act for the sale by Counterparty to Dealer (or
any affiliate designated by Dealer) of the Shares or Share Termination Delivery
Units, as the case may be, or the exemption pursuant to Section 4(1) or
Section 4(3) of the Securities Act for resales of the Shares or Share
Termination Delivery Units, as the case may be, by Dealer (or any such affiliate
of Dealer).

 

(c)                                        Make-whole Shares. If Counterparty
makes the election described in clause (i)(B) of paragraph (b) of this
Section 8, then Dealer or its affiliates may sell (which sale shall be made in a
commercially reasonable manner) such Shares or Share Termination Delivery Units,
as the case may be, during a period (the “Resale Period”) commencing on the
Exchange Business Day following delivery of

 

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such Shares or Share Termination Delivery Units, as the case may be, and ending
on the Exchange Business Day on which Dealer or its affiliates completes the
sale of all such Shares or Share Termination Delivery Units, as the case may be,
or a sufficient number of Shares or Share Termination Delivery Units, as the
case may be, so that the realized net proceeds of such sales exceed the Freely
Tradeable Value.  If any of such delivered Shares or Share Termination Delivery
Units remain after such realized net proceeds exceed the Freely Tradeable Value,
Dealer shall return such remaining Shares or Share Termination Delivery Units to
Counterparty.  If the Freely Tradeable Value exceeds the realized net proceeds
from such resale, Counterparty shall transfer to Dealer by the open of the
regular trading session on the Exchange on the Exchange Trading Day immediately
following the last day of the Resale Period the amount of such excess (the
“Additional Amount”) in cash or in a number of additional Shares or Share
Termination Delivery Units, as the case may be, (“Make-whole Shares”) in an
amount that, based on the Relevant Price on the last day of the Resale Period
(as if such day was the “Valuation Date” for purposes of computing such Relevant
Price), has a dollar value equal to the Additional Amount.  The Resale Period
shall continue to enable the sale of the Make-whole Shares in the manner
contemplated by this Section 8(c).  This provision shall be applied successively
until the Additional Amount is equal to zero, subject to Section 8(e).

 

(d)                                       Beneficial Ownership.  Notwithstanding
anything to the contrary in the Agreement or this Confirmation, in no event
shall Dealer be entitled to receive, or shall be deemed to receive, any Shares
if, immediately upon giving effect to such receipt of such Shares (and after
taking into account any Shares deliverable by Counterparty to Dealer at such
time under any transaction or security other than the Transaction), (i) the
“beneficial ownership” (within the meaning of Section 13 of the Exchange Act and
the rules promulgated thereunder) of Shares by Dealer, any of its affiliates
subject to aggregation with Dealer for purposes of the “beneficial ownership”
test under Section 13 of the Exchange Act and all persons who may form a “group”
(within the meaning of Rule 13d-5(b)(1) under the Exchange Act) with Dealer with
respect to “beneficial ownership” of any Shares (collectively, “Dealer Group”)
would be equal to or greater than 8.5% or more of the outstanding Shares on the
date of determination or (ii) Dealer, Dealer Group or any person whose ownership
position would be aggregated with that of Dealer or Dealer Group (Dealer, Dealer
Group or any such person, a “Dealer Person”) under Section 203 of the Delaware
General Corporation Law or other federal, state or local law, rule, regulation
or regulatory order or organizational documents or contracts of Counterparty
applicable to ownership of Shares (“Applicable Restrictions”), would own,
beneficially own, constructively own, control, hold the power to vote or
otherwise meet a relevant definition of ownership in excess of a number of
Shares equal to (x) the number of Shares that would give rise to reporting or
registration obligations (other than to file a Schedule 13D or Schedule 13G
under the Exchange Act) or other requirements (including obtaining prior
approval by a state or federal regulator) of a Dealer Person under Applicable
Restrictions and with respect to which such requirements have not been met or
the relevant approval has not been received or that would subject a Dealer
Person to restrictions (including restrictions relating to business combinations
and other designated transactions) under Applicable Restrictions minus (y) 1.0%
of the number of Shares outstanding on the date of determination (either such
condition described in clause (i) or (ii), an “Excess Ownership Position”).  If
any delivery owed to Dealer hereunder is not made, in whole or in part, as a
result of this provision, Counterparty’s obligation to make such delivery shall
not be extinguished and Counterparty shall make such delivery as promptly as
practicable after, but in no event later than one Exchange Business Day after,
Dealer gives notice to Counterparty that such delivery would not result in the
existence of an Excess Ownership Position.

 

(e)                                  Limitations on Settlement by Counterparty. 
Notwithstanding anything to the contrary herein or in the Agreement, in no event
shall Counterparty be required to deliver Shares in connection with the
Transaction in excess of 12,308,114 Shares, as such number may be adjusted from
time to time in accordance with the provisions hereof (the “Capped Number”). 
Counterparty represents and warrants to Dealer (which representation and
warranty shall be deemed to be repeated on each day that the Transaction is
outstanding) that the Capped Number is equal to or less than the number of
authorized but unissued Shares of the Counterparty that are not reserved for
future issuance in connection with transactions in the Shares other than the
Transaction on the date of the determination of the Capped Number (such Shares,
the “Available Shares”).  In the event Counterparty shall not have delivered the
full number of Shares otherwise deliverable as a result of this
Section 8(e) (the resulting deficit, the “Deficit Shares”), Counterparty shall
be continually obligated to deliver Shares, from time to time until the full
number of

 

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Deficit Shares have been delivered pursuant to this paragraph, when, and to the
extent, that (A) Shares are repurchased, acquired or otherwise received by
Counterparty or any of its subsidiaries after the Trade Date (whether or not in
exchange for cash, fair value or any other consideration), (B) authorized and
unissued Shares reserved for issuance in respect of other transactions prior to
such date which prior to the relevant date become no longer so reserved and
(C) Counterparty additionally authorizes any unissued Shares that are not
reserved for other transactions (such events as set forth in clauses (A),
(B) and (C) above, collectively, the “Share Issuance Events”).  If Counterparty
is obligated to deliver any Deficit Shares, Counterparty shall promptly notify
Dealer of the occurrence of any of the Share Issuance Events (including the
number of Shares subject to clause (A), (B) or (C) and the corresponding number
of Shares to be delivered) and, as promptly as reasonably practicable, deliver
such Shares thereafter.  Counterparty shall not, until Counterparty’s
obligations under the Transaction have been satisfied in full, use any Shares
that become available for potential delivery to Dealer as a result of any Share
Issuance Event for the settlement or satisfaction of any transaction or
obligation other than the Transaction or reserve any such Shares for future
issuance for any purpose other than to satisfy Counterparty’s obligations to
Dealer under the Transaction.

 

(f)                                         Equity Rights.  Dealer acknowledges
and agrees that this Confirmation is not intended to convey to it rights with
respect to the Transaction that are senior to the claims of common stockholders
in the event of Counterparty’s bankruptcy.  For the avoidance of doubt, the
parties agree that the preceding sentence shall not apply at any time other than
during Counterparty’s bankruptcy to any claim arising as a result of a breach by
Counterparty of any of its obligations under this Confirmation or the
Agreement.  For the avoidance of doubt, the parties acknowledge that the
obligations of Counterparty under this Confirmation are not secured by any
collateral that would otherwise secure the obligations of Counterparty herein
under or pursuant to any other agreement.

 

(g)                                        Amendments to Equity Definitions. 
The following amendments shall be made to the Equity Definitions:

 

(i)                                     The first sentence of Section 11.2(c) of
the Equity Definitions, prior to clause (A) thereof, is hereby amended to read
as follows: ‘(c) If “Calculation Agent Adjustment” is specified as the Method of
Adjustment in the related Confirmation of a Share Option Transaction, then
following the announcement or occurrence of any Potential Adjustment Event, the
Calculation Agent will determine whether such Potential Adjustment Event has a
material effect on the theoretical value of the relevant Shares or options on
the Shares and, if so, will (i) make appropriate adjustment(s), if any, to any
one or more of:’ and, the portion of such sentence immediately preceding clause
(ii) thereof is hereby amended by deleting the words “diluting or concentrative”
and the words “(provided that no adjustments will be made to account solely for
changes in volatility, expected dividends, stock loan rate or liquidity relative
to the relevant Shares)” and replacing such latter phrase with the words “(and,
for the avoidance of doubt, adjustments may be made to account solely for
changes in volatility, expected dividends, stock loan rate or liquidity relative
to the relevant Shares)”; and

 

(ii)                                  Sections 11.2(a) and 11.2(e)(vii) of the
Equity Definitions are hereby amended by deleting the words “diluting or
concentrative” and replacing them with “material” and adding the phrase “or
options on the Shares” at the end of the sentence;

 

(iii)                               Section 12.6(a)(ii) of the Equity
Definitions is hereby amended by (1) deleting from the fourth line thereof the
word “or” after the word “official” and inserting a comma therefor, and
(2) deleting the semi-colon at the end of subsection (B) thereof and inserting
the following words therefor “or (C) at Dealer’s option, the occurrence of any
of the events specified in Section 5(a)(vii) (1) through (9) of the ISDA Master
Agreement with respect to that Counterparty.”

 

(iv)                              Section 12.9(b)(iv) of the Equity Definitions
is hereby amended by (A) deleting (1) subsection (A) in its entirety, (2) the
phrase “or (B)” following subsection (A) and (3) the phrase “in each case” in
subsection (B); (B) replacing “will lend” with “lends” in subsection (B); and
(C) deleting the phrase “neither the Non-Hedging Party nor the Lending Party
lends Shares in the amount of the Hedging Shares or” in the penultimate
sentence; “Lending Party” means a third

 

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party that is not the Counterparty or an affiliate of the Counterparty that
Dealer considers to be an acceptable counterparty (acting in good faith and in a
reasonable manner in light of (x) other transactions that Dealer (or its agent
or affiliate) may have entered into with such party and (y) any legal,
regulatory or self-regulatory requirements or related policies and procedures
(whether or not such requirements or related policies and procedures are imposed
by law or have been voluntarily adopted by Dealer generally in its corporate
equity derivatives business with respect to transactions similar to the
Transaction) that apply generally to transactions of a nature and kind similar
to the transactions contemplated with such party);

 

(v)                                 Section 12.9(b)(v) of the Equity Definitions
is hereby amended by (A) adding the word “or” immediately before subsection
“(B)” and deleting the comma at the end of subsection (A); and (B)(1) deleting
subsection (C) in its entirety, (2) deleting the word “or” immediately preceding
subsection (C), (3) replacing in the penultimate sentence the words “either
party” with “the Hedging Party” and (4) deleting clause (X) in the final
sentence; and

 

(vi)                              Section 12.7(b) of the Equity Definitions is
hereby amended by deleting the words “(and in any event within five Exchange
Business Days) by the parties after” appearing after the words “agreed promptly”
and replacing with the words “by the parties on or prior to”.

 

(h)                                             Transfer and Assignment.  Dealer
may transfer or assign its rights and obligations hereunder and under the
Agreement, in whole or in part, at any time without the consent of Counterparty
(i) to any affiliate of Dealer or (ii) to any financial institution, or any
affiliate thereof, that enters into over-the-counter equity derivatives
transactions in the ordinary course of its business, or to any such financial
institution or affiliate whose obligations would be guaranteed by a person, in
either case, of credit quality equivalent to or better than Dealer’s (or its
guarantor’s).

 

(i)                                                 Disclosure.  Effective from
the date of commencement of discussions concerning the Transaction, Counterparty
and each of its employees, representatives, or other agents may disclose to any
and all persons, without limitation of any kind, the tax treatment and tax
structure of the Transaction and all materials of any kind (including opinions
or other tax analyses) that are provided to Counterparty relating to such tax
treatment and tax structure.

 

(j)                                    Additional Termination Events.  The
occurrence of any of the following shall constitute an Additional Termination
Event with respect to which the Transaction shall be the sole Affected
Transaction and Counterparty shall be the sole Affected Party and Dealer shall
be the party entitled to designate an Early Termination Date pursuant to
Section 6(b) of the Agreement and to determine the amount payable pursuant to
Section 6(e) of the Agreement; provided that with respect to any Additional
Termination Event, Dealer may choose to treat part of the Transaction as the
sole Affected Transaction, and, upon the termination of the Affected
Transaction, a Transaction with terms identical to those set forth herein except
with a Number of Warrants equal to the unaffected number of Warrants shall be
treated for all purposes as the Transaction, which shall remain in full force
and effect:

 

(i)                                      Dealer reasonably determines based on
the advice of counsel that it is advisable to terminate a portion of the
Transaction so that Dealer’s related commercially reasonable hedging activities
will comply with applicable securities laws, rules or regulations or related
policies and procedures applicable to Dealer (whether or not such requirements,
policies or procedures are imposed by law or have been voluntarily adopted by
Dealer generally in its corporate equity derivatives business with respect to
transactions similar to the Transaction), or Dealer, despite using commercially
reasonable efforts, is unable or reasonably determines that it is impractical or
illegal to hedge its obligations pursuant to this Transaction in the public
market without registration under the Securities Act or as a result of any
legal, regulatory or self-regulatory requirements applicable to Dealer;

 

(ii)                                   at any time at which any Excess Ownership
Position occurs, Dealer, in its discretion, is unable to effect a transfer or
assignment to a third party of the Transaction or any other transaction between
the parties after using its commercially reasonable efforts on pricing and terms
and within a time period reasonably acceptable to Dealer such that an Excess
Ownership Position no longer exists; provided that Dealer shall treat only that
portion of the Transaction as the Affected Transaction as necessary so that such
Excess Ownership Position no longer exists;

 

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(iii)                                any “person” or “group” (within the meaning
of Section 13(d) of the Exchange Act), other than Counterparty or its
subsidiaries (and, solely to the extent the voting power of the common equity of
Counterparty “beneficially owned”, within the meaning of Rule 13d-3 under the
Exchange Act, by Alon Israel Oil Company, Ltd., together with the Permitted
Holders and any “person” or “group” subject to aggregation of the common equity
of Counterparty with Alon Israel Oil Company, Ltd., represents less than 65.0%
of the voting power of the common equity of Counterparty, other than the
Permitted Holders) (provided that such beneficial ownership will be determined
without taking into account the Shares, if any, issued upon conversion by Alon
Israel Oil Company, Ltd. of its 8.5% Series A Convertible Preferred Stock shares
that Counterparty offered on October 28, 2010) files a Schedule TO or any
schedule, form or report under the Exchange Act disclosing that such person or
group has become the direct or indirect ultimate “beneficial owner,” as defined
in Rule 13d-3 under the Exchange Act, of the common equity of Counterparty
representing more than 50.0% of the voting power of such common equity;
“Permitted Holders” means Alon Israel Oil Company, Ltd. and any person that
“controls”, or is “controlled” by (each within the meaning of Rule 405 under the
Securities Act), Alon Israel Oil Company, Ltd.

 

(iv)                               Consummation of any consolidation, merger,
amalgamation, scheme of arrangement or other binding share exchange or
reclassification or similar transaction between Counterparty and another person
(other than its subsidiaries), in each case pursuant to which the Shares shall
be exchanged for or converted into cash, securities or other property (other
than a transaction effected solely to change Counterparty’s jurisdiction of
incorporation or to form a holding company for Counterparty and that results in
a share exchange or reclassification or similar exchange of the outstanding
Shares solely into common shares of the surviving entity) or any sale, transfer,
lease, conveyance or other disposition, in one transaction or a series of
transactions, of all or substantially all of the assets of Counterparty and its
subsidiaries, on a consolidated basis, to another person (other than any of
Counterparty’s subsidiaries);

 

provided that, notwithstanding the foregoing, any transaction or event set forth
in the immediately preceding clause (iii) or (iv) shall not constitute an
Additional Termination Event if at least 90% of the consideration received or to
be received by holders of the Shares (excluding cash payments for fractional
Shares) in the transaction or transactions that would otherwise constitute an
Additional Termination Event pursuant to clause (iii) or (iv) of this
Section 8(j) consists of shares of common stock or common equity interests that
are traded on any of The New York Stock Exchange, The NASDAQ Global Select
Market or The NASDAQ Global Market (or any of their respective successors) or
that will be so traded when issued or exchanged in connection with such
transaction or transactions.  For the avoidance of doubt, an event that is not
considered an Additional Termination Event pursuant to the immediately preceding
sentence shall not be an Additional Termination Event solely because such event
could also be described by clause (iii) or (iv) above;

 

(v)                                  holders of Shares approve any plan or
proposal for Counterparty’s liquidation or dissolution (other than in a
transaction described in (iv) above; or

 

(vi)                               there occurs a transaction as a result of
which the Shares would be converted into, or exchanged for, or the consideration
to be received by holders of the Shares consists of, securities that are not
shares of common stock issued by a corporation organized and existing under the
laws of the United States of America, any State thereof or the District of
Columbia.

 

(k)                                 Effectiveness.  If, on or prior to the
Effective Date, Dealer reasonably determines that it is advisable to cancel the
Transaction because of concerns that Dealer’s related commercially reasonable
hedging activities could be viewed as not complying with applicable securities
laws, rules or regulations, the Transaction shall be cancelled and shall not
become effective, and neither party shall have any obligation to the other party
in respect of the Transaction.

 

(l)                                     Extension of Settlement.  Dealer may
divide any Component into additional Components and designate the Expiration
Date and the Number of Warrants for each such Component if Dealer determines, in
its reasonable discretion, that such further division is necessary or advisable
to preserve Dealer’s commercially reasonable hedging or hedge unwind activity
hereunder in light of existing liquidity conditions in the cash market or stock
loan market or to enable Dealer to effect purchases of Shares in

 

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connection with its hedging activity hereunder in a manner that would, if Dealer
were Counterparty or an affiliated purchaser of Counterparty, be compliance with
applicable legal, regulatory and self-regulatory requirements or with related
policies and procedures applicable to Dealer (whether or not such requirements,
policies or procedures are imposed by law or have been voluntarily adopted by
Dealer generally in its corporate equity derivatives business with respect to
transactions similar to the Transaction).

 

(m)                             No Netting and Set-off.  The provisions of
Section 2(c) of the Agreement shall not apply to the Transaction.  Each party
waives any and all rights it may have to set-off delivery or payment obligations
it owes to the other party under the Transaction against any delivery or payment
obligations owed to it by the other party, whether arising under the Agreement,
under any other agreement between parties hereto, by operation of law or
otherwise.

 

(n)                                 Early Unwind.  In the event the sale by
Counterparty of the “Firm Securities” is not consummated pursuant to the
Purchase Agreement for any reason by the close of business in New York on
September 16, 2013 (or such later date as agreed upon by the parties, which in
no event shall be later than 23, 2013) (September 16, 2013 or such later date
being the “Early Unwind Date”), the Transaction shall automatically terminate
(the “Early Unwind”) on the Early Unwind Date and the Transaction and all of the
respective rights and obligations of Dealer and Counterparty hereunder shall be
cancelled and terminated and Counterparty shall pay to Dealer, other than in
cases involving a breach of the Purchase Agreement by Dealer as the Initial
Purchaser, an amount in cash equal to the aggregate amount of costs and expenses
relating to the unwinding of Counterparty’s hedging activities in respect of the
Transaction (including market losses incurred in reselling any Shares purchased
by Dealer or its affiliates in connection with such hedging activities, unless
Counterparty agrees to purchase any such Shares at the cost at which Dealer
purchased such Shares) or, at the election of Counterparty, deliver to Dealer
Shares with a value equal to such amount, as determined by the Calculation
Agent, in which event the parties shall enter into customary and commercially
reasonable documentation relating to the registered or exempt resale of such
Shares.  Following such termination, cancellation and payment or delivery, each
party shall be released and discharged by the other party from, and agrees not
to make any claim against the other party with respect to, any obligations or
liabilities of either party arising out of, and to be performed in connection
with, the Transaction either prior to or after the Early Unwind Date.  Dealer
and Counterparty represent and acknowledge to the other that upon an Early
Unwind and following the payment referred to above, all obligations with respect
to the Transaction shall be deemed fully and finally discharged.

 

(o)                                 Wall Street Transparency and Accountability
Act of 2010.  The parties hereby agree that none of (v) Section 739 of the Wall
Street Transparency and Accountability Act of 2010 (“WSTAA”), (w) any similar
legal certainty provision in any legislation enacted, or rule or regulation
promulgated, on or after the Trade Date, (x) the enactment of WSTAA or any
regulation under the WSTAA, (y) any requirement under WSTAA nor (z) an amendment
made by WSTAA, shall limit or otherwise impair either party’s rights to
terminate, renegotiate, modify, amend or supplement this Confirmation or the
Agreement, as applicable, arising from a termination event, force majeure,
illegality, increased costs, regulatory change or similar event under this
Confirmation, the Equity Definitions incorporated herein or the Agreement
(including, but not limited to, rights arising from a Change in Law, a Hedging
Disruption, an Increased Cost of Hedging, an Excess Ownership Position or
Illegality (as defined in the Agreement)).

 

(p)                                 Payment by Dealer.  In the event that an
Early Termination Date occurs or is designated with respect to the Transaction
as a result of a Termination Event or an Event of Default (other than an Event
of Default arising under Section 5(a)(ii) or 5(a)(iv) of the Agreement) and, as
a result, Dealer owes to Counterparty an amount calculated under Section 6(e) of
the Agreement, such amount shall be deemed to be zero.

 

(q)                                 Delivery of Cash.  For the avoidance of
doubt, nothing in this Confirmation shall be interpreted as requiring the
Counterparty to deliver cash in respect of the settlement of the Transaction,
except in circumstances where the required cash settlement thereof is permitted
for classification of the contract as equity by ASC 815-40, Derivatives and
Hedging — Contracts in Entity’s Own Equity, as in effect on the relevant Trade
Date (including, without limitation, where the Counterparty so elects to deliver
cash or fails timely to elect to deliver Shares or Share Termination Delivery
Property in respect of such settlement).

 

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(r)                                    Governing Law.  THE AGREEMENT, THIS
CONFIRMATION AND ALL MATTERS ARISING IN CONNECTION WITH THE AGREEMENT AND THIS
CONFIRMATION SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK (WITHOUT REFERENCE TO ITS CHOICE OF LAW
DOCTRINE, OTHER THAN TITLE 14 OF THE NEW YORK GENERAL OBLIGATIONS LAW).

 

(s)                                   Amendment.  This Confirmation and the
Agreement may not be modified, amended or supplemented, except in a written
instrument signed by Counterparty and Dealer.

 

(t)                                    Counterparts. This Confirmation may be
executed in several counterparts, each of which shall be deemed an original but
all of which together shall constitute one and the same instrument.

 

9.              Arbitration:

 

(a)         All parties to this Confirmation are giving up the right to sue each
other in court, including the right to a trial by jury, except as provided by
the rules of the arbitration forum in which a claim is filed.

 

(b)         Arbitration awards are generally final and binding; a party’s
ability to have a court reverse or modify an arbitration award is very limited.

 

(c)          The ability of the parties to obtain documents, witness statements
and other discovery is generally more limited in arbitration than in court
proceedings.

 

(d)         The arbitrators do not have to explain the reason(s) for their
award.

 

(e)          The panel of arbitrators will typically include a minority of
arbitrators who were or are affiliated with the securities industry, unless
Counterparty is a member of the organization sponsoring the arbitration
facility, in which case all arbitrators may be affiliated with the securities
industry.

 

(f)           The rules of some arbitration forums may impose time limits for
bringing a claim in arbitration.  In some cases, a claim that is ineligible for
arbitration may be brought in court.

 

(g)          The rules of the arbitration forum in which the claim is filed, and
any amendments thereto, shall be incorporated into this Confirmation.

 

(h)         Counterparty agrees that any and all controversies that may arise
between Counterparty and Dealer, including, but not limited to, those arising
out of or relating to the Agreement or the Transaction hereunder, shall be
determined by arbitration conducted before FINRA Dispute Resolution
(“FINRA-DR”), or, if FINRA-DR declines to hear the matter, before the American
Arbitration Association, in accordance with their arbitration rules then in
force.  The award of the arbitrator shall be final, and judgment upon the award
rendered may be entered in any court, state or federal, having jurisdiction.

 

(i)             No person shall bring a putative or certified class action to
arbitration, nor seek to enforce any pre-dispute arbitration agreement against
any person who has initiated in court a putative class action or who is a member
of a putative class who has not opted out of the class with respect to any
claims encompassed by the putative class action until: (i) the class
certification is denied; (ii) the class is decertified; or (iii) Counterparty is
excluded from the class by the court.

 

(j)                                    Such forbearance to enforce an agreement
to arbitrate shall not constitute a waiver of any rights under this Confirmation
except to the extent stated herein.

 

25

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Counterparty hereby agrees (a) to check this Confirmation carefully and
immediately upon receipt so that errors or discrepancies can be promptly
identified and rectified and (b) to confirm that the foregoing (in the exact
form provided by Dealer) correctly sets forth the terms of the agreement between
Dealer and Counterparty with respect to the Transaction, by manually signing
this Confirmation or this page hereof as evidence of agreement to such terms and
providing the other information requested herein and immediately returning an
executed copy to Goldman, Sachs & Co., Equity Derivatives Documentation
Department, Facsimile No. (212) 428-1980/83.

 

 

 

Yours faithfully,

 

 

 

GOLDMAN, SACHS & CO.

 

 

 

 

 

By:

/s/ Daniela A. Rouse

 

 

Name:

Daniela A. Rouse

 

 

Title:

Vice President

 

 

Agreed and Accepted By:

 

ALON USA ENERGY, INC.

 

 

By: 

/s/ Shai Even

 

 

Name:

Shai Even

 

 

Title:

Senior Vice President and

 

 

 

Chief Financial Officer

 

 

--------------------------------------------------------------------------------

 

Annex A

 

For each Component of the Transaction, the Number of Warrants and Expiration
Date is set forth below.

 

Component Number

 

Number of Warrants

 

Expiration Date

1

 

68,378

 

17-Dec-18

2

 

68,378

 

18-Dec-18

3

 

68,378

 

19-Dec-18

4

 

68,378

 

20-Dec-18

5

 

68,378

 

21-Dec-18

6

 

68,378

 

24-Dec-18

7

 

68,378

 

26-Dec-18

8

 

68,378

 

27-Dec-18

9

 

68,378

 

28-Dec-18

10

 

68,378

 

31-Dec-18

11

 

68,378

 

2-Jan-19

12

 

68,378

 

3-Jan-19

13

 

68,378

 

4-Jan-19

14

 

68,378

 

7-Jan-19

15

 

68,378

 

8-Jan-19

16

 

68,378

 

9-Jan-19

17

 

68,378

 

10-Jan-19

18

 

68,378

 

11-Jan-19

19

 

68,378

 

14-Jan-19

20

 

68,378

 

15-Jan-19

21

 

68,378

 

16-Jan-19

22

 

68,378

 

17-Jan-19

23

 

68,378

 

18-Jan-19

24

 

68,378

 

22-Jan-19

25

 

68,378

 

23-Jan-19

26

 

68,378

 

24-Jan-19

27

 

68,378

 

25-Jan-19

28

 

68,378

 

28-Jan-19

29

 

68,378

 

29-Jan-19

30

 

68,378

 

30-Jan-19

31

 

68,378

 

31-Jan-19

32

 

68,378

 

1-Feb-19

33

 

68,378

 

4-Feb-19

34

 

68,378

 

5-Feb-19

35

 

68,378

 

6-Feb-19

36

 

68,378

 

7-Feb-19

37

 

68,378

 

8-Feb-19

38

 

68,378

 

11-Feb-19

39

 

68,378

 

12-Feb-19

40

 

68,378

 

13-Feb-19

41

 

68,378

 

14-Feb-19

42

 

68,378

 

15-Feb-19

43

 

68,378

 

19-Feb-19

44

 

68,378

 

20-Feb-19

45

 

68,378

 

21-Feb-19

46

 

68,378

 

22-Feb-19

47

 

68,378

 

25-Feb-19

48

 

68,378

 

26-Feb-19

49

 

68,378

 

27-Feb-19

50

 

68,378

 

28-Feb-19

 

--------------------------------------------------------------------------------

 

51

 

68,378

 

1-Mar-19

52

 

68,378

 

4-Mar-19

53

 

68,378

 

5-Mar-19

54

 

68,379

 

6-Mar-19

55

 

68,379

 

7-Mar-19

56

 

68,379

 

8-Mar-19

57

 

68,379

 

11-Mar-19

58

 

68,379

 

12-Mar-19

59

 

68,379

 

13-Mar-19

60

 

68,379

 

14-Mar-19

61

 

68,379

 

15-Mar-19

62

 

68,379

 

18-Mar-19

63

 

68,379

 

19-Mar-19

64

 

68,379

 

20-Mar-19

65

 

68,379

 

21-Mar-19

66

 

68,379

 

22-Mar-19

67

 

68,379

 

25-Mar-19

68

 

68,379

 

26-Mar-19

69

 

68,379

 

27-Mar-19

70

 

68,379

 

28-Mar-19

71

 

68,379

 

29-Mar-19

72

 

68,379

 

1-Apr-19

73

 

68,379

 

2-Apr-19

74

 

68,379

 

3-Apr-19

75

 

68,379

 

4-Apr-19

76

 

68,379

 

5-Apr-19

77

 

68,379

 

8-Apr-19

78

 

68,379

 

9-Apr-19

79

 

68,379

 

10-Apr-19

80

 

68,379

 

11-Apr-19

81

 

68,379

 

12-Apr-19

82

 

68,379

 

15-Apr-19

83

 

68,379

 

16-Apr-19

84

 

68,379

 

17-Apr-19

85

 

68,379

 

18-Apr-19

86

 

68,379

 

22-Apr-19

87

 

68,379

 

23-Apr-19

88

 

68,379

 

24-Apr-19

89

 

68,379

 

25-Apr-19

90

 

68,379

 

26-Apr-19

 

2

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