Document:

exv10w2

Exhibit 10.2

FORM OF TAX MATTERS AGREEMENT

BETWEEN

ALON USA ENERGY, INC.

AND

ALON BRANDS, INC.

 

TABLE OF CONTENTS

	 	 	 	 	 
	 	 	Page
	Section 1. Definitions
	 	 	1	 
	Section 2. Tax Payments
	 	 	4	 
	(a) Income Tax Liability
	 	 	4	 
	(b) Additional Calculations related to Options and other Employee Benefits
	 	 	5	 
	(c) Estimated Income Tax Payments
	 	 	5	 
	(d) Timing
	 	 	5	 
	(e) Adjustments
	 	 	6	 
	(f) Other Adjustments and Indemnification
	 	 	6	 
	(g) Reimbursements
	 	 	7	 
	Section 3. Income Tax Return Preparation
	 	 	7	 
	Section 4. Audits and Other Tax Controversies
	 	 	7	 
	Section 5. Cooperation
	 	 	7	 
	(a) Tax Information
	 	 	7	 
	(b) Other Cooperation
	 	 	8	 
	(c) Agent
	 	 	8	 
	Section 6. Retention of Records
	 	 	8	 
	Section 7. Resolution of Disputes
	 	 	9	 
	Section 8. Miscellaneous
	 	 	9	 
	(a) Term of the Agreement
	 	 	9	 
	(b) Injunctions
	 	 	9	 
	(c) Severability
	 	 	9	 
	(d) Assignment
	 	 	9	 
	(e) Further Assurances
	 	 	9	 
	(f) Parties in Interest
	 	 	10	 
	(g) Waivers, Etc
	 	 	10	 
	(h) Setoff
	 	 	10	 
	(i) Change of Law
	 	 	10	 
	(j) Confidentiality
	 	 	10	 
	(k) Headings
	 	 	10	 
	(l) Counterparts
	 	 	10	 

-i-

 

TABLE OF CONTENTS
(continued)

	 	 	 	 	 
	 	 	Page
	(m) Notices
	 	 	10	 
	(n) Costs and Expenses
	 	 	11	 
	(o) Applicable Law
	 	 	11	 

-ii-

 

TAX MATTERS AGREEMENT

     This Tax Matters Agreement (this “Agreement”), dated to be effective as of the Closing
Date of the IPO (as defined below), is made between Alon USA Energy, Inc., a Delaware corporation
(“Alon USA”), and Alon Brands, Inc., a Delaware corporation (“Brands”).

RECITALS

     A. Certain Alon USA Group Members (as defined below), on the one hand, and certain Brands
Group Members (as defined below), on the other hand, file or have filed Income Tax Returns (as
defined below) on a consolidated, combined and/or unitary basis for certain federal, state, local
and foreign Income Tax (as defined below) purposes;

     B. Alon USA prepares and files, or causes to be prepared and filed, the Income Tax Returns of
each Brands Group Member, whether or not such Brands Group Member files an Income Tax Return on a
consolidated, combined or unitary basis with any Alon USA Group Member;

     C. Brands intends to undertake an initial public offering (the “IPO”);

     D. Following the IPO, Alon USA and Brands intend for Alon USA to continue to prepare and file,
or to cause to be prepared and filed, all Income Tax Returns of each Brands Group Member, whether
or not such Brands Group Member files an Income Tax Return on a consolidated, combined or unitary
basis with any Alon USA Group Member, and to defend any audits with respect to such Income Tax
Returns and to manage any resulting controversy;

     NOW THEREFORE, in contemplation of the IPO, Alon USA and Brands desire to agree upon the
method of determining the financial consequences to each party resulting from the preparation and
filing of such Income Tax Returns.

AGREEMENT

     NOW THEREFORE, in consideration of the premises set forth above and the terms and conditions
set forth below, the parties hereto agree as follows:

     Section 1. Definitions. For purposes of this Agreement, the following capitalized
terms shall have the meanings set forth below:

     “Adjustment” shall mean any proposed or final change in the Tax liability of any
Person.

     “Affiliated Group” shall mean an affiliated group of corporations within the meaning
of section 1504(a) of the Code that joins in a consolidated return (or a similar such group with
respect to a consolidated, combined or joint return with respect to any state or local Income Tax).

     “Affiliate” shall mean any Person that directly or indirectly is “controlled”
by the other Person in question. “Control” means the possession, directly or indirectly,
of the power to direct or cause the direction of the management and policies of an Entity, whether
through ownership of voting securities, by contract or otherwise. Except as otherwise provided
herein, the term

 

Affiliate for purposes of Section 8 shall refer to Affiliates of a Person as determined
immediately after the Distribution.

     “Alon USA Group” shall mean Alon USA and its Subsidiaries, excluding, however, any
Brands Group Member.

     “Alon USA Group Member” shall mean each member of the Alon USA Group.

     “Brands Group” shall mean Brands and its Subsidiaries. With respect to any Taxable
Period beginning before the IPO, the Brands Group shall be determined as if the Brands Group had
been constituted on the first day of such Taxable Period, and shall include the assets and
operations of the retail and branded wholesale motor fuels business of Alon USA and its
Subsidiaries as they existed for such Taxable Period.

     “Brands Group Member” shall mean each member of the Brands Group.

     “Code” shall mean the Internal Revenue Code of 1986, as amended.

     “Deconsolidation Event” shall mean, with respect to each Brands Group Member, any
event or transaction, including the IPO, that causes such Brands Group Member to no longer be
eligible to join any Alon USA Group Member in filing an applicable Income Tax Return on a
consolidated, combined or unitary basis.

     “Entity” shall mean a partnership (whether general or limited), a corporation, a
limited liability company, an association, a joint stock company, a trust, a joint venture, an
unincorporated organization or any other entity, without regard to whether it is treated as a
disregarded entity for U.S. federal tax purposes.

     “Final Determination” shall mean the final resolution of any Tax matter, including a
closing agreement with the IRS or other relevant Taxing Authority, a claim for refund which has
been allowed, a deficiency notice with respect to which the period for filing a petition with the
Tax Court or the relevant foreign, state or local tribunal has expired, or a decision of any court
of competent jurisdiction that is not subject to appeal (disregarding any possibility of a petition
for certiorari to the United States Supreme Court) or as to which the time for appeal has expired.

     “Income Tax Return” shall mean any Tax Return filed or required to be filed with any
Taxing Authority with respect to Income Taxes.

     “Income Taxes” shall mean all Taxes imposed on or measured in whole or in part by
income, capital or net worth or a taxable base in the nature of income, capital or net worth,
including franchise Taxes based on such factors and in particular the Texas franchise tax, and
shall include any addition to Tax, additional amount, interest and penalty imposed with respect to
such Taxes.

     “Indemnified Party” shall mean any party that is entitled to receive payment from an
Indemnifying Party pursuant to the terms and conditions of this Agreement.

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     “Indemnifying Party” shall mean any party that is required to pay any other party
pursuant to the terms and conditions of this Agreement.

     “IRS” shall mean the United States Internal Revenue Service or any successor thereto,
including its agents, representatives and attorneys.

     “Losses” shall mean any loss, cost, fine, penalty, fee, damage, obligation, liability,
payment in settlement, Tax or other expense of any kind, including reasonable attorneys’ fees and
costs, but excluding any consequential, special, punitive or exemplary damages.

     “Person” shall mean an individual or any Entity.

     “Subsidiary” shall mean, with respect to any Person, any other Person of which (i)
such Person or any Subsidiary of such Person is a general partner or (ii) at least 50% of the
securities or other interests having by their terms ordinary voting power to elect a majority of
the Board of Directors or others performing similar functions with respect to the other Person or
at least 50% of the value of the outstanding equity is directly or indirectly owned or controlled
by such Person or by any one or more of its Subsidiaries, or by such Person and one or more of its
Subsidiaries.

     “Tax Benefit” shall mean a reduction in the Income Tax liability of any Person (or of
the Affiliated Group of which it is a member) for any Taxable Period. Except as otherwise provided
in this Agreement, a Tax Benefit shall be deemed to have been realized or received from a Tax Item
in a Taxable Period only if, and to the extent that, the Income Tax liability of the Person (or of
the Affiliated Group of which it is a member) for such Tax Period (or for an earlier period by
reason of carryback from the return filed for such period) is less than it would have been if such
Income Tax liability were determined without regard to such Tax Item.

     “Tax Controversy” shall mean any examination, audit, claim, dispute, litigation,
proposed settlement, proposed Adjustment or related matter with respect to Income Taxes.

     “Tax Detriment” shall mean an increase in the Income Tax liability of any Person (or
of the Affiliated Group of which it is a member) for any Taxable Period. Except as otherwise
provided in this Agreement, a Tax Detriment shall be deemed to have been realized or suffered from
a Tax Item in a Taxable Period only if, and to the extent that, the Income Tax liability of the
Person (or the Affiliated Group of which it is a member) for such period is greater than it would
have been if such Income Tax liability were determined without regard to such Tax Item.

     “Tax Item” shall mean any item of income, gain, loss, deduction, credit, recapture of
credit or any other item of a type which may have the effect of increasing or decreasing Income
Taxes paid or payable by any Person (or the Affiliated Group of which it is a member).

     “Tax Return” shall mean any return, report, form or other information filed or
required to be filed with any Taxing Authority with respect to Taxes.

     “Taxable Period” shall mean any taxable year or portion thereof, [including any
Post-Closing IPO Straddle Period and any Pre-Closing Deconsolidation Straddle Period].

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     “Taxes” shall mean all federal, state, local, foreign or other governmental taxes,
assessments, duties, fees, levies or similar charges of any kind, including all income, profits,
franchise, excise, property, use, intangibles, sales, value-added, ad valorem, escheat or unclaimed
property, gross receipts, margin, severance, payroll, employment, withholding, estimated and other
taxes of any kind whatsoever, whether disputed or not, and including all additions to tax,
additional amounts, interest and penalties imposed with respect to such taxes.

     “Taxing Authority” shall mean, with respect to any Tax, the government or governmental
or regulatory body thereof, or political subdivision thereof, whether federal, state, local or
foreign, or any agency, instrumentality or authority thereof, that imposes such Tax, and the agency
(if any) charged with the collection of such Tax, including the IRS.

     Other capitalized terms defined elsewhere in this Agreement shall have the meaning given them.

     Section 2. Tax Payments.

          (a) Income Tax Liability. For each Taxable Period beginning after the IPO, Brands
shall pay, or cause to be paid, to Alon USA an amount equal to the excess, if any, of (i) the
Income Taxes incurred by any Brands Group Member under applicable Tax law and paid by Alon USA on
such Brands Group Member’s behalf or, in the case of any Income Tax with respect to which any
Brands Group Member joins any Alon USA Group Member in filing an Income Tax Return on a
consolidated, combined or unitary basis, the amount of Income Taxes that would be incurred by the
Brands Group Member had such Brands Group Member filed a separate Income Tax Return based solely on
the income, apportionment factors and other Tax Items of such Brands Group Member (“Separate
Income Tax Liability”), over (ii) the aggregate amount of Estimated Income Tax Payments
actually made to Alon USA under Section 2(c) with respect to such Separate Income Tax Liability.
For purposes of determining the amount of a Brands Group Member’s Separate Income Tax Liability,
(i) to the extent that such Brands Group Member would be entitled to file an Income Tax Return on a
consolidated, combined or unitary basis with any other Brands Group Member, the Separate Income Tax
Liability of such Brands Group Members shall be determined as though such Brands Group Members had
filed a consolidated, combined or unitary Income Tax Return based solely on the income,
apportionment factors and other Tax Items of such Brands Group Members, with the resulting
liability apportioned among such members as Alon USA may reasonably determine; and (ii)
calculations for any periods that include the IPO or a Deconsolidation Event shall be calculated as
if there were a closing of the books on that date. If the aggregate amount of Estimated Income Tax
Payments actually made to Alon USA with respect to a Brands Group Member and taxable year exceeds
the Separate Income Tax Liability, Alon USA shall pay to Brands an amount equal to such excess. In
addition, to the extent that, for any Taxable Period beginning after the date of the IPO, any Alon
USA Group Member utilizes any credits or deductions, including foreign tax credits, alternative
minimum tax credits, net operating losses or net capital losses, which are attributable to any
Brands Group Member, and such utilization results in a Tax Benefit being realized by such Alon USA
Group Member (treating any credits or deductions attributable to the Alon USA Group as utilized
prior to the utilization of any credits or deductions attributable to the Brands Group), then Alon
USA shall pay to Brands the amount of such Tax Benefit at the time of the filing of the Income Tax
Return reflecting the realization of the Tax Benefit and such

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credits or deductions for which Alon USA has paid Brands shall not be utilizable by any Brands
Group Member for purposes of computing such Brands Group Member’s Estimated Income Tax Payments or
Separate Income Tax Liability.

          (b) Additional Calculations related to Options and other Employee Benefits. For
purposes of determining the amount of a Brands Group Member’s Estimated Income Tax Payments and
Separate Income Tax Liability, Alon USA shall be entitled to claim all deductions arising by reason
of the exercise of any stock options to purchase shares of Alon USA stock, or arising by reason of
the payment of deferred or other compensation by Alon USA to the extent such payment is not
reimbursed by Brands. In addition, for purposes of any Income Tax Return filed by, with respect to
or on behalf of, any Brands Group Member (whether or not such Brands Group Member files an Income
Tax Return on a consolidated, combined or unitary basis with any Alon USA Group Member), Alon USA
shall be, to the extent permitted by applicable Tax law, entitled to claim all deductions arising
by reason of the exercise of any stock options to purchase Alon USA stock or arising by reason of
the payment of deferred or other compensation by Alon USA to the extent such payment is not
reimbursed by Brands. If, pursuant to a Final Determination, all or any part of such deduction is
disallowed or is proposed to be disallowed to Alon USA then, to the extent permitted by applicable
Tax law, the appropriate Brands Group Member shall report such deduction on its Income Tax Return
(including an amended Income Tax Return). If a Brands Group Member realizes a Tax Benefit in any
Taxable Period beginning after the date of the IPO, as a result of a deduction arising by reason of
the exercise of any stock option to purchase shares of Alon USA stock or arising by reason of the
payment of deferred or other compensation by Alon USA to the extent such payment is not reimbursed
by Brands, Brands shall pay the amount of such Tax Benefit to Alon USA.

          (c) Estimated Income Tax Payments. For each Taxable Period beginning after the date
of the IPO, Brands shall pay, or cause to be paid, to Alon USA the amount of any estimated Income
Taxes owed by any Brands Group Members and to be paid by Alon USA on such Brands Group Members’
behalf, whether or not such estimated Income Tax is attributable to an Income Tax Return filed on a
consolidated, combined or unitary basis with any Alon USA Group Member (“Estimated Income Tax
Payments”). In the case of any Estimated Income Tax Payments with respect to which any Brands
Group Member joins any Alon USA Group Member in filing an Income Tax Return on a consolidated,
combined or unitary basis, the amount of such Estimated Income Tax Payments that are owed to Alon
USA by such Brands Group Member shall be based on the Alon USA’s estimate of the amounts will be
required to be paid under Section 2(a) with respect to such Brands Group Members, such Tax and such
period. In light of the complexity of estimated Income Tax projections and the short time
available for making such projections, Alon USA’s estimates will be binding unless manifestly
unreasonable.

          (d) Timing. For each Taxable Period beginning after the date of the IPO, Alon USA
shall prepare and deliver to Brands a schedule (the “Schedule”) showing in reasonable
detail Alon USA’s calculation of any Estimated Income Tax Payments or Separate Income Tax
Liability, as the case may be, of each Brands Group Member and, subject to Section 7, (i) Brands
shall pay to Alon USA the amount of any Estimated Income Tax Payments or Separate Income Tax
Liability shown on the Schedule no later than the later of (A) ten days before the date that such
payment is due and payable to the applicable Taxing Authority and (B) five days after Brands’
receipt of the Schedule, and (ii) any payments by Alon USA to Brands

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required pursuant to Section 2(a) hereof shall be made, based on the Schedule, no later than
the date such consolidated, combined or unitary Income Tax Return is filed with the applicable
Taxing Authority. Except as otherwise provided herein, all indemnification or other payments to be
made pursuant to this Agreement shall be made within fifteen days of written notice of a request
for indemnification or payment by the Indemnified Party, which notice shall be accompanied by a
computation of the amount due. If any payments required to be made pursuant to this Agreement
(including Estimated Income Tax Payments) are not made when due, such payments shall bear interest
at the prevailing underpayment rate as determined under section 6621 of the Code (or, if higher,
the appropriate underpayment rate for the state or local Income Tax to which such payment relates
if an underpayment resulted from such failure to timely pay).

          (e) Adjustments. If, as a result of a Final Determination, there is an Adjustment
that would have the effect of increasing or decreasing a Brands Group Member’s Separate Income Tax
Liability for Taxable Periods beginning after the date of the IPO, then Brands shall pay to Alon
USA the amount of any increased Separate Income Tax Liability, and Alon USA shall pay to Brands the
amount of any decreased Separate Income Tax Liability; provided, however, that Alon
USA’s payment to Brands shall not exceed the net amount of payments received by Alon USA from
Brands with respect to the Separate Income Tax Liability for such Taxable Periods. If, as a result
of a Final Determination, there is an Adjustment to any of the credits or deductions attributable
to any Brands Group Member which resulted in a payment by Alon USA to Brands pursuant to Section
2(a) of this Agreement that would have the effect of increasing or decreasing the Tax Benefit to
the Alon USA Group Member utilizing such credit or deduction, then Brands shall pay to Alon USA the
amount of any decreased Tax Benefit and Alon USA shall pay to Brands the amount of any increased
Tax Benefit.

          (f) Other Adjustments and Indemnification. If, as a result of a Final Determination,
there is an Adjustment with respect to any Tax Item of any Brands Group Member for any Taxable
Period ending on or before the date of the IPO, including any portion of a IPO Straddle Period
ending on the date of the IPO, that results in a Tax Detriment being realized by any Alon USA Group
Member, or by any Brands Group Member for which any Alon USA Group Member is otherwise liable, then
Brands shall indemnify Alon USA and any such Alon USA Group Members against such Tax Detriment. In
addition, if there is an Adjustment pursuant to section 482 of the Code or similar authority under
applicable Tax law which results in a Tax Detriment being realized by any Alon USA Group Member or
any Brands Group Member, on the one hand, and a corresponding Tax Benefit being realized by any
Brands Group Member or any Alon USA Group Member, on the other, which is not otherwise taken into
account through payments or indemnification under this Agreement, then Brands shall pay to Alon USA
or Alon USA shall pay to Brands, as the case may be, the amount of such Tax Benefit. Alon USA
shall indemnify Brands to the extent that any Brands Group Member becomes liable for the Income Tax
liability of any Alon USA Group Member as a result of being a member of the Affiliated Group of
which Alon USA is the common parent corporation, for federal tax purposes, or a member of the
combined, consolidated or unitary group, for foreign, state or local tax purposes, which includes
any Alon USA Group Member, in excess of the Separate Income Tax Liability of such Brands Group
Member, and, except as otherwise provided herein, Alon USA shall indemnify Brands against any
Income Tax liability for which Brands has paid to Alon USA pursuant to this Agreement.

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          (g) Reimbursements. Notwithstanding the foregoing, Brands, on behalf of each Brands
Group Member, shall pay, or caused to be paid, any payment made by Alon USA on behalf of any Brands
Group Member for Taxes owed by such Brands Group Member other than pursuant to this Agreement
within five days of receipt of written notification from Alon USA that such payment has been made.

     Section 3. Income Tax Return Preparation.1 Alon USA shall prepare and
file, or cause to be prepared and filed, all Income Tax Returns that are required under applicable
law to be filed by, with respect to or on behalf of, any Brands Group Member (whether or not such
Brands Group Member files an Income Tax Return on a consolidated, combined or unitary basis with
any Alon USA Group Member), including all Income Tax Returns which Alon USA determines shall be
filed on a consolidated, combined or unitary basis with any Alon USA Group Member, for any IPO
Straddle Period and any Taxable Period beginning before a Deconsolidation Event. Brands shall
reimburse Alon USA for an allocable portion of its expenses incurred in preparing and filing Income
Tax Returns on behalf of any Brands Group Member, as such allocation is reasonably determined by
Alon USA.

     Section 4. Audits and Other Tax Controversies. Alon USA shall have sole
responsibility for and control over any Tax Controversy with respect to Income Taxes of each Brands
Group Member. Brands shall reimburse Alon USA for an allocable portion of its expenses incurred in
conducting such Tax Controversies on behalf of any Brands Group Member, as such allocation is
reasonably determined by Alon USA.

     Section 5. Cooperation.

          (a) Tax Information.

               (i) Brands shall, and shall cause each Brands Group Member, to cooperate with Alon USA in the
preparation and filing of Income Tax Returns, as described in Section 3, or in the conduct of Tax
Controversies, as described in Section 4, by maintaining such books and records and providing on a
timely basis such information as may be necessary or useful in the filing of such Income Tax
Returns or the conduct of such Tax Controversies and executing any documents, by making available
any appropriate personnel to answer questions or to assist in any Tax Controversy, and providing
any further information and taking any actions which Alon USA may reasonably request in connection
therewith.

               (ii) If any Brands Group Member fails to provide any information requested pursuant to this
Section 5 on a timely basis, then Alon USA shall have the right to engage an independent certified
public accountant of its choice to gather such information. Brands agrees to permit any such
independent certified public accountant full access to all Income Tax Returns and other relevant
information in the possession of any Brands Group Member during reasonable business hours, and to
reimburse or pay directly all costs and expenses incurred in connection with the engagement of such
independent certified public accountant.

 

			
	1	 	NOTE TO DRAFT: Will Alon USA be asked to
prepare any returns for Taxes other than Income Taxes (e.g., sales taxes or
property taxes)? If so, we should provide for the same, on either a permanent
or a temporary basis.

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               (iii) If any Brands Group Member supplies information to a Alon USA Group Member in connection
with the preparation and filing of any Income Tax Return or in connection with the conduct of any
Tax Controversy and an officer of the requesting party signs a statement or other document under
penalties of perjury in reliance upon the accuracy of such information, then a duly authorized
officer of the party supplying such information shall certify, under penalties of perjury, the
accuracy and completeness of the information so supplied. Brands shall indemnify and hold harmless
each Alon USA Group Member and its respective officers and employees, against any cost, fine,
penalty or other expenses of any kind attributable to a Brands Group Member supplying a Alon USA
Group Member with inaccurate or incomplete information, in connection with the preparation and
filing of any Income Tax Return or in connection with the conduct of any Tax Controversy.

          (b) Other Cooperation.

               (i) Whenever any Brands Group Member learns of a breach or a violation of any obligation or
provision contained in this Agreement, or receives in writing from any Taxing Authority notice of
an Adjustment which may give rise to a payment under this Agreement, Brands shall give notice to
Alon USA within ten days of such Brands Group Member becoming aware of such breach, violation or
receipt, but if a Alon USA Group Member is required to respond to the IRS or any other Taxing
Authority, such notice shall be given no less than ten days before such response is required.

               (ii) Alon USA may consult with Brands, and Brands agrees to fully cooperate with Alon USA in
the negotiation, settlement or litigation of any liability for Income Taxes of any Alon USA Group
Member, regardless of the effect of any such negotiation, settlement or litigation on the Separate
Income Tax Liability of any Brands Group Member.

          (c) Agent. Brands, on behalf of itself and each other Brands Group Member, hereby
appoints Alon USA as its agent (i) for the purpose of preparing and filing any Income Tax Return of
such Brands Group Member (whether or not such Income Tax Return is filed on a consolidated,
combined or unitary basis with any Alon USA Group Member), (ii) for the purpose of representing
such Brands Group Member in the course of any Tax Controversy as set forth in Section 4, and (iii)
for the purpose of making any election or taking any action in connection with any of the foregoing
on behalf of each Brands Group Member. Brands, on behalf of itself and each other Brands Group
Member, hereby consents to the preparation and filing of each such Income Tax Return and to the
making of any elections and the taking of any action as set forth above.

     Section 6. Retention of Records. Brands agrees to retain, and cause each Brands
Group Member to retain, the appropriate records which may affect the determination of the Separate
Income Tax Liability of any Brands Group Member or the Income Tax liability of any Alon USA Group
Member which files an Income Tax Return on a consolidated, combined or unitary basis with any
Brands Group Member until such time as there has been a Final Determination with respect thereto.
Any Brands Group Member intending to destroy any materials, records, or documents relating to
Income Taxes shall provide Alon USA with 90 days advance notice and the opportunity to copy or take
possession of such materials, records and documents.

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     Section 7. Resolution of Disputes. Any dispute concerning the calculation or basis
of determination of any payment provided for hereunder shall be resolved by the independent
certified public accountants for Alon USA, whose judgment shall be conclusive and binding upon the
parties.

     Section 8. Miscellaneous.

          (a) Term of the Agreement. This Agreement shall become effective as of the date of
its execution and, except as otherwise expressly provided herein, shall continue in full force and
effect indefinitely.

          (b) Injunctions. The parties acknowledge that irreparable damage would occur in the
event that any of the provisions of this Agreement were not performed in accordance with its
specific terms or were otherwise breached. The parties hereto shall be entitled to an injunction
or injunctions to prevent breaches of the provisions of this Agreement and to enforce specifically
the terms and provisions hereof in any court having jurisdiction, such remedy being in addition to
any other remedy to which they may be entitled at law or in equity.

          (c) Severability. Whenever possible, each provision of this Agreement will be
interpreted so as to be effective and valid under applicable law, but if any provision or portion
of any provision of this Agreement is held invalid, illegal or unenforceable in any respect under
any applicable law in any jurisdiction, then such invalidity, illegality or unenforceability will
not affect the validity, legality or enforceability of any other provision or portion of any
provision of this Agreement, and this Agreement will be re-formed, construed and enforced in such
jurisdiction in such manner as will effect as nearly as lawfully possible the purposes and intent
of such invalid, illegal or unenforceable provision.

          (d) Assignment. Except by operation of law or in connection with the sale of all or
substantially all the assets of a party hereto, this Agreement shall not be assignable, in whole or
in part, directly or indirectly, by any party hereto without the advance written consent of the
other party, and any attempt to assign any rights or obligations arising under this Agreement
without such consent shall be void; provided, however, that the provisions of this
Agreement shall be binding upon, inure to the benefit of and be enforceable by, the parties hereto
and their respective successors and permitted assigns.

          (e) Further Assurances. Subject to the provisions hereof, the parties hereto shall
make, execute, acknowledge and deliver such other instruments and documents, and take all such
other actions, as may be reasonably required in order to effectuate the purposes of this Agreement
and to consummate the transactions contemplated hereby. Subject to the provisions hereof, each of
the parties shall, in connection with entering into this Agreement, performing its obligations
hereunder and taking any and all actions relating hereto, comply with all applicable laws,
regulations, orders and decrees, obtain all required consents and approvals and make all required
filings with any Taxing Authority, governmental agency, other regulatory or administrative agency,
commission or similar authority, and promptly provide the other parties with all such information
as they may reasonably request in order to be able to comply with the provisions of this sentence.

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          (f) Parties in Interest. Except as herein otherwise specifically provided, nothing in
this Agreement expressed or implied is intended to confer any right or benefit upon any Person
other than the parties hereto, their respective successors and permitted assigns, and any
Subsidiary that subsequently becomes a Alon USA Group Member or a Brands Group Member.

          (g) Waivers, Etc. No failure or delay on the part of the parties in exercising any
power or right hereunder shall operate as a waiver thereof, nor shall any single or partial
exercise of any such right or power, or any abandonment or discontinuance of steps to enforce such
right or power, preclude any other or further exercise thereof or the exercise of any other right
or power. No modification or waiver of any provision of this Agreement, nor the consent to any
departure by the parties therefrom, shall in any event be effective unless the same shall be in
writing, and then such waiver or consent shall be effective only in the specific instance and for
the purpose for which given.

          (h) Setoff. All payments to be made by any party under this Agreement shall be made
without setoff, counterclaim or withholding, all of which are expressly waived.

          (i) Change of Law. If, due to any change in applicable law or regulations or their
interpretation by any court of law or other governing body having jurisdiction subsequent to the
date of this Agreement, the performance of any provision of this Agreement or any transaction
contemplated hereby shall become impracticable or impossible, the parties hereto shall use their
best efforts to find and employ an alternative means to achieve the same or substantially the same
result as that contemplated by such provision.

          (j) Confidentiality. Subject to any contrary requirement of law and the right of each
party to enforce its rights hereunder in any arbitration or legal action, each party agrees that it
shall keep strictly confidential, and shall cause its employees and agents to keep strictly
confidential, any information which it or any of its employees or agents may acquire pursuant to,
or in the course of performing its obligations under, any provision of this Agreement.

          (k) Headings. Descriptive headings are for convenience only and shall not control or
affect the meaning or construction of any provision of this Agreement.

          (l) Counterparts. For the convenience of the parties, any number of counterparts of
this Agreement may be executed by the parties hereto, and each such executed counterpart shall be,
and shall be deemed to be, an original instrument.

          (m) Notices. All notices, consents, requests, instructions, approvals and other
communications provided for herein shall be validly given, made or served, if in writing and
delivered personally, by telegram or sent by registered mail, postage prepaid, or by facsimile
transmission to:

Alon USA at:

Alon USA Energy, Inc.

7616 LBJ Freeway

Suite 300

- 10 -

 

Dallas, Texas 75251

Attn: Chief Financial Officer

Fax: (972) 367-3719

Brands at:

Alon Brands, Inc.

7616 LBJ Freeway

Third Floor

Dallas, Texas 75251

Attn: Chief Financial Officer

Fax:                                                             

or to such other address as any party may, from time to time, designate in a written notice given
in a like manner. Notice delivered personally or given by telegram shall be deemed delivered when
received by the recipient. Notice given by mail as set out above shall be deemed delivered five
calendar days after the date the same is mailed. Notice given by facsimile transmission shall be
deemed delivered on the day of transmission provided telephone confirmation of receipt is obtained
promptly after completion of transmission.

          (n) Costs and Expenses. Unless otherwise specifically provided herein, each party
agrees to pay its own costs and expenses resulting from the exercise of its respective rights or
the fulfillment of its respective obligations hereunder.

          (o) Applicable Law. This Agreement shall be governed by and construed and enforced in
accordance with the domestic substantive laws of the State of Texas without regard to any choice or
conflict of laws, rules or provisions that would cause the application of the domestic substantive
laws of any other jurisdiction.

- 11 -

 

     IN WITNESS WHEREOF, the undersigned have caused this Agreement to be duly executed by their
respective officers, each of whom is duly authorized, all as of the day and year first above
written.

	 	 	 	 	 

	 	 	ALON USA ENERGY, INC.
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	Name:	 	 
	 

	 	 	 	 
	 	 	Title: Chief Financial Officer
	 
	 	 	 	 
	 	 	ALON BRANDS, INC.
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	Name:	 	 
	 

	 	 	 	 
	 	 	Title: Chief Financial Officerexv10w16

Exhibit 10.16

REGISTRATION RIGHTS AGREEMENT

          This Registration Rights Agreement (the “Agreement”) is made and entered into as of
__________, 2011, by and between Alon Brands, Inc., a Delaware corporation (the “Company”),
and Alon USA, LP, a Texas limited partnership (the “Holder”).

RECITALS

	A.	 	Upon the completion of an initial public offering of shares of common stock, par
value $0.01 per share (“Common Stock”), of the Company (the “Initial
Public Offering”), the Company will cease to be a wholly owned subsidiary of the
Holder.
	 
	B.	 	In connection with the Initial Public Offering, the Company desires to grant Holder
registration rights with respect to the Holder’s ownership of Common Stock.
	 
	C.	 	This Agreement sets forth the understandings and agreements of the parties with
respect to the rights and obligations of the Holder and the Company with respect to
such registration rights.
	 
	 	 	NOW, THEREFORE, the parties hereto agree as follows:

	 	1.	 	Definitions. The following terms have the following meanings
when used in this Agreement with initial capital letters:

          “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.

          “Form S-3” means such form under the Securities Act as in effect on the date hereof or
any registration form under the Securities Act subsequently adopted by the SEC that permits
incorporation of substantial information by reference to other documents filed by the Company with
the SEC.

          “Holders” shall mean the Holder and any permitted assignee of the Holder’s rights
under this Agreement.

          “Restricted Stock” shall mean all shares of Common Stock owned by the Holder from time
to time. As to any particular outstanding shares or other units of Restricted Stock, such
securities shall cease to be Restricted Stock when (i) a registration statement with respect to the
offer and sale of such securities shall have become effective under the Securities Act and such
securities shall have been disposed of in accordance with such registration statement, (ii) such
securities shall have been distributed to the public pursuant to Rule 144 (or any successor
provision) under the Securities Act, (iii) such securities may be freely distributed by the Holder
thereof in a public offering or otherwise without the need for registration or qualification of
such securities under the Securities Act or any similar state law then in force in light of legal
requirements or market conditions and without any restriction on the volume or the manner of sale
or any other limitations under Rule 144 (or any successor provision) under the Securities Act, (iv)
such securities shall have ceased to be outstanding, or (v) the Holder thereof shall agree in
writing that such Restricted Stock shall no longer be Restricted Stock.

 

 

          “SEC” shall mean the U.S. Securities and Exchange Commission.

          “Securities Act” shall mean the Securities Act of 1933, as amended.

          “Selling Holder” shall mean a Holder selling or distributing Restricted Stock pursuant
to this Agreement.

	 	2.	 	Demand Registration.

	 	(a)	 	Request for Registration. Subject to the
provisions of Section 5 hereof, at any time and from time to time after
the effective date of the registration statement for Initial Public
Offering any Holder or Holders holding in the aggregate 10% or more of
the shares or other units of the Restricted Stock then outstanding may
make a written request for registration under the Securities Act of all
or part of its or their Restricted Stock pursuant to this Section 2 (a
“Demand Registration”), provided that the number of shares or
other units of Restricted Stock proposed to be sold or distributed
pursuant to such registration shall be equal to 10% or more of the
aggregate number of shares or other units of Restricted Stock then
outstanding, but (if fewer than all outstanding shares or other units
of Restricted Stock are proposed to be so sold or distributed) in no
event less than 5% of the initial aggregate number of shares or other
units of Restricted Stock outstanding as of the date of this Agreement
(subject to appropriate adjustment for any stock dividend, stock split,
combination, recapitalization, merger, consolidation, reorganization or
other occurrence affecting the number of shares or other units of
Restricted Stock then outstanding). Such request will specify the
aggregate number of shares or other units of Restricted Stock proposed
to be sold or distributed and will also specify the intended method of
disposition thereof. Within 10 business days after receipt of such
request, the Company will give written notice of such registration
request to all other Holders of Restricted Stock, if any, and include
in such registration all Restricted Stock with respect to which the
Company has received written requests for inclusion therein within 15
business days after the date on which such notice is so given. Each
such request will also specify the number of shares or other units of
Restricted Stock to be registered and the intended method of
disposition thereof. No party other than a Holder shall be permitted
to include securities in any Demand Registration unless the Holder or
Holders of a majority of the shares or other units of Restricted Stock
to be included therein shall have consented thereto in writing.
	 
	 	(b)	 	Priority on Demand Registration. If the
Holders of a majority of the shares or other units of the Restricted
Stock to be included in a Demand Registration so elect, the offering of
such Restricted Stock pursuant to such Demand Registration shall be in
the form of an underwritten offering. In such event, if the managing
underwriter or underwriters of such offering selected in accordance
with Section 2(c) advise the Company and

2

 

	 	 	 	the Holders in writing that in their good faith opinion the
aggregate amount of Restricted Stock requested to be included in
such offering is so large that it will materially and adversely
affect the success of such offering, the Company will include in
such registration the aggregate number of shares or other units of
Restricted Stock which in the good faith opinion of such managing
underwriter or underwriters can be sold without any such material
adverse effect, and such number of shares shall be allocated pro
rata among the Holders of Restricted Stock on the basis of the
number of shares of Restricted Stock requested by such Holders to be
included in such registration, provided that the number of
shares of Restricted Stock held by the Holders to be included in
such registration shall not be reduced unless all other securities
are first entirely excluded from the registration. To the extent
Restricted Stock so requested to be registered is excluded from the
registration, then the Holders of such Restricted Stock shall have
the right to one additional Demand Registration under this Section 2
with respect to such Restricted Stock (in addition to the number of
Demand Registrations permitted under Section 5(a)(ii) below),
provided that the failure of such Restricted Stock to be
registered is through no fault of such Holders.
	 
	 	(c)	 	Selection of Underwriters and Counsel. If any
Demand Registration is in the form of an underwritten offering, the
Holders of a majority of the shares or other units of Restricted Stock
to be registered will select and obtain the services of the investment
banker or investment bankers and manager or managers that will
administer the offering and the counsel to such investment bankers and
managers; provided that such investment bankers, managers and
counsel must be reasonably satisfactory to the Company.

	 	3.	 	Piggyback Registration. If the Company proposes to file a
registration statement under the Securities Act with respect to an offering (i)
for its own account of any class of its equity securities (other than a
registration statement on Form S-8 (or any successor form), Form S-4 (or any
successor form) or any other registration statement relating solely to employee
benefit plans or filed in connection with an exchange offer, a transaction to
which Rule 145 (or any successor provision) under the Securities Act applies or
an offering of securities solely to the Company’s existing stockholders (each,
an “Excluded Registration”)) or (ii) for the account of any other
holder of Common Stock (to the extent any agreement with such holder permitted
under Section 11 hereof (a “Third Party Agreement”) permits the
registration of Restricted Stock in connection with such offering), then the
Company shall in each case give written notice of such proposed filing to the
Holders as soon as practicable (but no later than 20 business days) before the
anticipated filing date, and such notice shall offer each Holder the
opportunity to register such number of shares or other units of Restricted
Stock as such Holder may request. Each Holder desiring to have Restricted
Stock included in such registration statement shall so advise the Company in
writing within 10 business days after the date on which the Company’s notice is
so given, setting forth the

3

 

	 	 	 	number of shares or other units of Restricted Stock for which registration
is requested. If the offering is to be an underwritten offering, the
Company shall, subject to the further provisions of this Agreement and to
the provisions of a Third Party Agreement, if applicable, use reasonable
efforts to cause the managing underwriter or underwriters to permit the
Holders of the Restricted Stock requested to be included in the registration
for such offering to include such Restricted Stock in such offering on the
same terms and conditions as any similar securities of the Company included
therein. The right of each Holder to registration pursuant to this Section
3 in connection with an underwritten offering shall, unless the Company
otherwise assents, be conditioned upon such Holder’s participation as a
seller in such underwritten offering and its execution of an underwriting
agreement in customary form with the managing underwriter or underwriters
selected by the Company. Notwithstanding the foregoing, if the managing
underwriter or underwriters of such offering deliver a written opinion to
the Company to the effect that in its or their good faith judgment either
because of (a) the kind of securities that the Company, the Holders and any
other person or entities intend to include in such offering or (b) the size
of the offering that the Company, the Holders and any other persons or
entities intend to make, the success of the offering would be materially and
adversely affected by inclusion of the Restricted Stock requested to be
included, then (i) if the size of the offering is the basis of such managing
underwriter’s opinion, the number of shares or other units of Restricted
Stock to be registered and offered for the accounts of Holders shall be
reduced pro rata on the basis of the number of securities requested by such
Holders to be registered and offered to the extent necessary to reduce the
total amount of securities to be included in such offering to the amount
recommend by such managing underwriter or underwriters (provided
that if securities are being registered and offered for the account of other
persons or entities as well as the Company in an offering by the Company,
such reduction shall not be proportionally greater than any similar
reductions imposed on such other persons or entities) and (ii) if the
combination of securities to be offered is the basis of such managing
underwriter’s opinion, (x) the Registered Stock to be included in such
registration and offering shall be reduced as described in clause (i) above
or (y) if such actions would, in the good faith judgment of the managing
underwriter, be insufficient to substantially eliminate the adverse effect
that inclusion of the Restricted Stock requested to be included would have
on such offering, such Restricted Stock will be excluded entirely from such
registration and offering.

	 	4.	 	Registration Procedures. Whenever, pursuant to Section 2 or 3
hereof, Holders of Restricted Stock have requested that any Restricted Stock be
registered, the Company shall, subject to the provisions of Section 5 hereof,
use reasonable efforts to effect the registration and the sale or distribution
of such Restricted Stock in accordance with the intended method of disposition
thereof as promptly as practicable, and in connection with any such request,
the Company shall:

	 	(a)	 	in connection with a request pursuant to Section 2
hereof, prepare and file with the SEC, not later than 45 days after
receipt of such a request, a

4

 

	 	 	 	registration statement on any form for which the Company then
qualifies and which counsel for the Company shall deem appropriate
and which form shall be available for the sale or distribution of
such Restricted Stock in accordance with the intended method of
distribution thereof, and use reasonable efforts to cause such
registration statement to become effective; provided that if
the Company shall furnish to the Holders making such a request a
certificate signed by either the chief executive officer or the
chief financial officer of the Company stating that in the good
faith judgment of the Company’s board of directors, it would be
significantly disadvantageous to the Company for such a registration
statement to be filed on or before the date filing would otherwise
be required hereunder and explaining the reasons therefor, the
Company shall have an additional period of not more than 90 days
within which to file such registration statement, provided,
however, that (x) the Company may not invoke this right more
than once in any twelve (12) month period and (y) the Company shall
not register any securities for its own account or that of any other
stockholder during such 90 day period other than an Excluded
Registration; and, provided further, that (i) before
filing a registration statement or prospectus or any amendments or
supplements thereto, the Company will furnish to one counsel
selected by the Holders of a majority of the shares or other units
of Restricted Stock covered by such registration statement copies of
all such documents proposed to be filed, which documents will be
subject to the review and comment of such counsel and (ii) after the
filing of the registration statement, the Company shall promptly
notify each Selling Holder of Restricted Stock of any stop order
issued or, to the knowledge of the Company, threatened by the SEC
and take all reasonable actions to prevent the entry of such stop
order or to remove it if entered (and the period during which the
Company shall be required to keep a registration statement effective
as provided in this Section 4 shall be extended by the number of
days the registration statement was not available);
	 
	 	(b)	 	in connection with a request pursuant to Section 2
hereof, prepare and file with the SEC such amendments and supplements
to such registration statement and the prospectus used in connection
therewith as may be necessary to keep such registration statement
effective for a period of not less than 180 days or such shorter period
as shall terminate when the distribution of all Restricted Stock
covered by such registration statement shall have terminated and comply
with the provisions of the Securities Act with respect to the
disposition of all securities covered by such registration statement
during such period in accordance with the intended methods of
disposition by the Selling Holders thereof set forth in such
registration statement;
	 
	 	(c)	 	as soon as reasonably practicable, furnish to each
Selling Holder, prior to filing a registration statement, copies of
such registration statement as proposed to be filed and thereafter
furnish to such Selling Holder such

5

 

	 	 	 	number of copies of such registration statement, each amendment and
supplement thereto, the prospectus included in such registration
statement (including any preliminary prospectus, any summary
prospectus and any issuer free writing prospectus) and such other
documents as such Selling Holder may reasonably request in order to
facilitate the disposition of the Restricted Stock owned by such
Selling Holder;
	 
	 	(d)	 	use its reasonable efforts to register or qualify such
Restricted Stock under such other securities or blue sky laws of such
jurisdictions as any Selling Holder reasonably (in light of such
Selling Holder’s intended plan of distribution) requests and do any and
all other acts and things which may be reasonably necessary or
advisable to enable such Selling Holder to consummate the disposition
in such jurisdictions of the Restricted Stock owned by such Selling
Holder; provided that the Company shall not be required to (i)
qualify generally to do business or file a general consent to service
of process in any jurisdiction or (ii) take any action that would
subject itself to taxation in any such jurisdiction;
	 
	 	(e)	 	promptly notify each Selling Holder of such Restricted
Stock, at any time when a prospectus relating thereto is required to be
delivered under the Securities Act, of the occurrence of any event
known to the Company requiring the preparation of a supplement or
amendment to such prospectus so that, as thereafter delivered to the
purchasers or recipients of such Restricted Stock, such prospectus will
not contain an untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the
statements therein not misleading and promptly make available to each
Selling Holder any such supplement or amendment;
	 
	 	(f)	 	in connection with a request pursuant to Section 2
hereof, enter into an underwriting agreement in customary form, the
form and substance of such underwriting agreement being subject to the
reasonable satisfaction of the Company and a majority in interest of
the Selling Holders;
	 
	 	(g)	 	make available for inspection by any Selling Holder,
any underwriter participating in any sale or distribution pursuant to
such registration statement and any attorney, accountant or other agent
retained by any such Selling Holder or underwriter (collectively, the
“Inspectors”) all financial and other records, pertinent
corporate documents and properties of the Company (collectively, the
“Records”) as shall be reasonably necessary to enable them to
exercise their due diligence responsibility, and cause the Company’s
officers and employees to supply all information reasonably requested
for such purpose by any such Inspector in connection with such
registration statement, and to respond to such inquiries as shall be
reasonably necessary, in the opinion of respective counsel to such
Inspectors, to conduct a reasonable investigation within the meaning of
the Securities Act, and permit the Inspectors to participate in the
preparation

6

 

of such registration statement and any prospectus contained therein
and any amendment or supplement thereto and to require the insertion
therein of material furnished to the Company in writing relating to
a Selling Holder or its plan of distribution, which in the
reasonable judgment of the Selling Holder and its counsel should be
included; provided that the Company shall have no obligation
to permit such access to the Records or its officers or employees in
a manner that would unreasonably disrupt the normal conduct of its
business operations;

	 	(h)	 	in the event such sale is pursuant to an underwritten
offering, use its reasonable efforts to obtain a comfort letter or
letters from the Company’s independent public accountants in customary
form and covering such matters of the type customarily covered by
comfort letters as the managing underwriter reasonably requests;
	 
	 	(i)	 	promptly notify each Selling Holder (a) when a
registration statement or any prospectus used in connection therewith,
or any amendment or supplement thereto, has been filed and, with
respect to such registration statement or any post-effective amendment
thereto, when the same has become effective; (b) of any written
comments from the Commission with respect to any filing referred to in
clause (a) above and of any written request by the Commission for
amendments or supplements to such registration statement or prospectus;
and (c) of the receipt by the Company of any notification with respect
to the suspension of the qualification or registration of any
Restricted Stock for sale under the applicable securities or blue sky
laws of any jurisdiction;
	 
	 	(j)	 	provide a transfer agent and registrar for all
Restricted Stock covered by a registration statement and a CUSIP number
for all such Restricted Stock, in each case not later than the
effective date of such registration statement;
	 
	 	(k)	 	cause all Restricted Stock covered by a registration
statement to be listed, upon official notice of issuance, on any
securities exchange on which any of the securities of the same class as
the Restricted Stock are then listed; and
	 
	 	(l)	 	otherwise use its reasonable efforts to comply with all
applicable rules and regulations of the SEC and make available to its
security holders, as soon as reasonably practicable, an earnings
statement complying with the provisions of Section 11(a) of the
Securities Act (including, at the option of the Company, pursuant to
Rule 158 (or any successor provision) under the Securities Act).

          Upon receipt of any notice from the Company of the occurrence of any event of the kind
described in subsection (e) hereof, such Selling Holder shall forthwith discontinue all offerings,
sales and other dispositions of Restricted Stock pursuant to the registration statement covering
such Restricted Stock until such Selling Holder’s receipt of the copies of the supplemented or

7

 

amended prospectus contemplated by subsection (e) hereof. In the event the Company shall give
any such notice, the Company shall extend the period during which such registration statement shall
be maintained effective pursuant to this Agreement (including the period referred to in subsection
(b) hereof) by the number of days during the period from and including the date of the giving of
such notice pursuant to subsection (b) hereof to and including the first date on which each Selling
Holder covered by such registration statement shall have received the copies of the supplemented or
amended prospectus contemplated by subsection (e) hereof. Each Selling Holder shall notify the
Company if any event relating to such Selling Holder occurs which would require the preparation of
a supplement or amendment to the prospectus so that such prospectus will not contain an untrue
statement of a material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading.

	 	5.	 	Conditions and Limitations.

	 	(a)	 	The Company’s obligations under Section 2 hereof shall
be subject to the following limitations:

	 	(i)	 	the Company need not file a
registration statement either (x) during the period starting
with the date 60 days prior to the Company’s estimated date of
filing of, and ending 90 days after the effective date of
filing of, any registration statement pertaining to securities
of the Company (other than a registration of securities in a
transaction to which Rule 145 (or any successor provision)
under the Securities Act applies, in an exchange offer or with
respect to an employee benefit plan or dividend reinvestment
plan), provided that the Company is actively employing
good faith efforts to cause such registration statement to
become effective, and provided, further, that
if such Company registration statement is not filed within 90
days after the first date on which the Company notifies a
Holder of Restricted Stock that it will delay a Demand
Registration pursuant to this clause (x), the Company may not
further postpone such Demand Registration pursuant to this
clause (x) or (y) during the period specified in the first
proviso of subparagraph (a) of Section 4 hereof;
	 
	 	(ii)	 	except as provided in Section 2(b)
hereof, the Company shall not be required to cause to become
effective more than three Demand Registrations, other than
Demand Registrations meeting the requirements of Section 2 and
which can be made by the Company using Form S-3, which shall
not be limited in number; and
	 
	 	(iii)	 	the Company shall have received the
information and documents specified in Section 6 hereof and
each Selling Holder shall have observed or performed its other
covenants contained in Sections 6 and 10 hereof.

8

 

	 	(b)	 	The Company’s obligation under Section 3 hereof shall
be subject to the limitations and conditions specified in such Section
and in clause (iii) of subsection (a) of this Section 5, and to the
condition that the Company may at any time terminate its proposal to
register equity securities for its own account and discontinue its
efforts to cause a registration statement to become or remain effective
as to any and all shares or other units of Restricted Stock that would
otherwise have been eligible for inclusion in such registration.

	 	6.	 	Information from and Certain Covenants of Holders of Restricted
Stock.
Notices and requests delivered to the Company by Holders for whom
Restricted Stock is to be registered pursuant to this Agreement shall contain
such information regarding the Restricted Stock to be so registered, the Holder
and the intended method of disposition of such Restricted Stock as shall
reasonably be required in connection with the actions contemplated to be taken
pursuant to this Agreement. Any Holder whose Restricted Stock is included in a
registration statement pursuant to this Agreement shall exercise all consents,
powers of attorney, registration statements and other documents reasonably
required to be executed by it in order to cause such registration statement to
become effective. Each Selling Holder covenants that, in disposing of such
Holder’s shares, such Holder will comply with Regulation M and Rule 10b-5 (or
any successor provisions) under the Exchange Act and all other requirements of
applicable law.
	 
	 	7.	 	Registration Expenses.

	 	(a)	 	All Registration Expenses (as defined herein) will be
borne by the Company. Underwriting discounts and commissions
applicable to the sale of Restricted Stock shall be borne by the Holder
of the Restricted Stock to which such discount or commission relates.
	 
	 	(b)	 	As used herein, the term Registration Expenses means
all expenses incident to the Company’s performance of or compliance
with this Agreement (whether or not the registration in connection with
which such expenses are incurred ultimately becomes effective),
including without limitation all registration and filing fees, fees and
expenses of compliance with securities or blue sky laws (including
reasonable fees and disbursements of counsel in connection with blue
sky qualifications of the Restricted Stock), rating agency fees,
printing expenses, the fees and expenses incurred in connection with
the listing or admission for quotation of the securities to be
registered on any securities exchange or quotation system and fees and
disbursements of counsel for the Company and its independent certified
public accountants (including the expenses of any special audit or
comfort letters required by or incident to such performance),
securities act liability insurance (if the Company elects to obtain
such insurance), the reasonable fees and expenses of any special
experts retained by the Company in connection with such registration
and the fees and expenses of other persons retained by the Company, all
fees

9

 

	 	 	 	and expenses of counsel for the underwriters (to the extent not
borne by the underwriters), and all fees and expenses of one counsel
acting on behalf of the Selling Holders and selected by Selling
Holders holding a majority of the shares or other units of
Restricted Stock to be registered.

	 	8.	 	Indemnification; Contribution.

	 	(a)	 	Indemnification by the Company. In connection
with any offering of Restricted Stock pursuant to this Agreement, the
Company shall indemnify and hold harmless each Selling Holder, its
officers, directors and agents and each person, if any, who controls
such Selling Holder within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act from and against any
and all losses, claims, damages, liabilities and expenses (including
reasonable fees and disbursements of counsel) arising out of or based
upon (i) any untrue statement or alleged untrue statement of material
fact contained in any registration statement (or incorporated by
reference therein) or prospectus relating to Restricted Stock or in any
amendment or supplement thereto or in any preliminary prospectus,
summary prospectus, or issuer free writing prospectus relating to
Restricted Stock, (ii) any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to
make the statements therein not misleading in light of the
circumstances under which they were made, or (iii) any violation or
alleged violation by the Company of the Securities Act, the Exchange
Act or any state securities or “blue sky” laws or any rule or
regulation promulgated thereunder applicable to the Company and
relating to action or inaction required of the Company in connection
with any such registration, qualification or compliance, except insofar
as such losses, claims, damages, liabilities or expenses arise out of,
or are based upon, any such untrue statement or alleged untrue
statement or omission or alleged omission based upon information
furnished in writing to the Company by such Selling Holder or on such
Selling Holder’s behalf expressly for use therein. In connection with
any underwritten offering of Restricted Stock registered pursuant to
this Agreement, the Company shall cause to be included in any
underwriting agreement with the underwriters of such offering
provisions indemnifying and providing for contribution to such
underwriters and their officers and directors and each person who
controls such underwriters on substantially the same basis as the
provisions of this Section 8 indemnifying and providing for
contribution to the Selling Holders.
	 
	 	(b)	 	Indemnification by Holders of Restricted Stock.
In connection with any offering of Restricted Stock pursuant to this
Agreement, each Selling Holder shall, jointly and not severally,
indemnify and hold harmless the Company, its officers, directors and
agents and each person, if any, who controls the Company within the
meaning of either Section 15 of the Securities Act or Section 20 of the
Exchange Act, from and against any and all losses, claims, damages,
liabilities and expenses (including

10

 

	 	 	 	reasonable fees and disbursements of counsel) arising out of or
based upon (i) any untrue statement or alleged untrue statement of a
material fact contained in any registration statement (or
incorporated by reference therein) or prospectus relating to
Restricted Stock or in any amendment or supplement thereto or in any
preliminary prospectus, summary prospectus, or issuer free writing
prospectus relating to Restricted Stock, or (ii) any omission or
alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not
misleading in light of the circumstances under which they were made,
provided that (i) such losses, claims, damages, liabilities
or expenses arise out of, or are based upon, any such untrue
statement or alleged untrue statement or omission or alleged
omission based upon information furnished in writing to the Company
by such Selling Holder or on such Selling Holder’s behalf expressly
for use therein and (ii) no Selling Holder shall be liable for any
indemnification under this Section 8 in an aggregate amount which
exceeds the total net proceeds received by such Selling Holder from
such offering. In connection with any underwritten offering of
Restricted Stock registered pursuant to this Agreement, each Selling
Holder shall cause to be included in any underwriting agreement with
the underwriters of such offering provisions indemnifying and
providing for contribution to such underwriters, their officers and
directors and each person who controls such underwriters on
substantially the same basis as the provisions of this Section 8
indemnifying and providing for contribution to the Company.
	 
	 	(c)	 	Conduct of Indemnification Proceedings. If any
action or proceeding (including any governmental investigation) shall
be brought or asserted against any indemnified party hereunder in
respect of which indemnity may be sought from an indemnifying party
hereunder, (i) promptly after receipt by the indemnified party of
notice of the commencement of such action or proceeding, such
indemnified party shall give written notice to the indemnifying party
of the commencement of such action; provided that the failure of any
indemnified party to give notice as provided herein will not relieve
the indemnifying party of its obligations hereunder except to the
extent that the indemnifying party is actually materially prejudiced by
such failure to give notice, and (ii) such indemnifying party shall
assume the defense thereof, including the employment of counsel
reasonably satisfactory to such indemnified party, and shall assume the
payment of all expenses. Such indemnified party shall have the right
to employ separate counsel in any such action and to participate in the
defense thereof, but the fees and expenses of such counsel shall be at
the expenses of such indemnified party unless (i) the indemnifying
party has agreed to pay such fees and expenses, (ii) the indemnifying
party shall have failed to assume the defense of such action or
proceeding and employ counsel reasonably satisfactory to such
indemnified party, or (iii) the named parties to any such action or
proceeding (including any impleaded parties) include both such
indemnified party and such indemnifying party, and such indemnified
party shall have been advised by counsel that there may be

11

 

	 	 	 	one or more legal defenses available to such indemnified party which
are different from or additional to those available to the
indemnifying party (in which case, if such indemnified party
notifies the indemnifying party in writing that it elects to employ
separate counsel at the expense of the indemnifying party, the
indemnifying party shall not have the right to assume the defense of
such action or proceeding on behalf of such indemnified party; it
being understood, however, that the indemnifying party shall not, in
connection with any one such action or proceeding or separate but
substantially similar or related actions or proceedings in the same
jurisdiction arising out of the same general allegations or
circumstances, be liable for the fees and expenses of more than one
separate firm of attorneys (together with appropriate local counsel)
at any time for such indemnified party, which firm shall be
designated in writing by such indemnified party and reasonably
satisfactory to the indemnifying party). The indemnifying party
shall not be liable for any settlement of any such action or
proceeding effected without its written consent, but if settled with
its written consent, or if there is a final judgment for the
plaintiff in any such action or proceeding, the indemnifying party
shall indemnify and hold harmless the indemnified party from and
against any loss or liability (to the extent stated above) by reason
of such settlement or judgment.
	 
	 	(d)	 	Contribution. If the indemnification provided
for in this Section 8 is unavailable to the Company or the Selling
Holders in respect of any losses, claims, damages, liabilities or
judgments referred to herein, then each such indemnifying party, in
lieu of indemnifying such indemnified party, shall contribute to the
amount paid or payable by such indemnified party as a result of such
losses, claims, damages, liabilities and judgments in such proportion
as is appropriate to reflect the relative fault of each such party in
connection with such statements or omissions or alleged statements or
omissions, as well as any other relevant equitable considerations. The
relative fault of each such party shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material
fact relates to information supplied by such party, and the parties’
relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The Company and the
Selling Holders agree that it would not be just and equitable if
contribution pursuant to this Section 8(d) were determined by pro rata
allocation or by any other method of allocation which does not take
account of the equitable considerations referred to in the immediately
preceding paragraph. The amount paid or payable by an indemnified
party as a result of the losses, claims, damages, liabilities or
judgments referred to in the immediately preceding paragraph shall be
deemed to include, subject to the limitations set forth above, any
legal or other expenses reasonably incurred by such indemnified party
in connection with investigation or defending any such action or
claims. Notwithstanding the provisions of

12

 

	 	 	 	this Section 8(d), no Selling Holder shall be required to contribute
an amount in excess of the amount by which the total price at which
the Restricted Stock of such Selling Holder was offered to the
public exceeds the amount of any damages which such Selling Holder
has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person
guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who is not guilty of such fraudulent
misrepresentation.

	 	9.	 	Reports Under Exchange Act. With a view to making available to
the Holder the benefits of Rule 144 promulgated under the Securities Act and
any other rule or regulation of the SEC that may at any time permit a Holder to
sell securities of the Company to the public without registration or pursuant
to a registration on Form S-3, the Company agrees to:

	 	(a)	 	Make and keep public information available, as those
terms are understood and defined in SEC Rule 144, at all times after
the effective date of the first registration statement filed by the
Company for the offering of its securities to the general public so
long as the Company is subject to the periodic reporting requirements
under Sections 13 or 15(d) of the Exchange Act;
	 
	 	(b)	 	File with the SEC in a timely manner all reports and
other documents required of the Company under the Securities Act and
the Exchange Act; and
	 
	 	(c)	 	Furnish to any Holder, so long as the Holder owns
shares or other units of Restricted Stock, forthwith upon request (i) a
written statement by the Company that it has complied with the
reporting requirements of SEC Rule 144, the Securities Act and the
Exchange Act (at any time after it has become subject to such reporting
requirements), or that it qualifies as a registrant whose securities
may be resold pursuant to Form S-3 (at any time after it so qualifies),
(ii) a copy of the most recent annual or quarterly report of the
Company, and (iii) such other information as may be reasonably
requested in availing any Holder of any rule or regulation of the SEC
which permits the selling of any such securities without registration
or pursuant to such form.

	 	10.	 	Lock-Up Arrangements. In consideration of the covenants and
agreements of the Company contained herein, each Holder agrees that, in
connection with any offering by the Company of its securities, whether for the
account of the Company, any Holder, or any other holder of securities of the
Company, such Holder shall, with respect to any Restricted Stock then held by
such Holder which is not included in such offering, execute a customary
“lock-up” agreement reasonably requested by the Company or, if such offering is
an underwritten offering, by the underwriters in such offering; provided that
the period of such

13

 

	 	 	 	agreement shall not exceed 90 days (plus up to an additional 24 days in
certain circumstances relating to the timing of earnings or other material
news releases) after the initial sale of securities in such offering.
	 
	 	11.	 	Limitations on Subsequent Registration Rights. The Company
shall not, without the prior written consent of the Holders of a majority of
the Restricted Stock then outstanding, enter into any agreement with any holder
or prospective holder of any securities of the Company that would grant such
holder or prospective holder registration rights that would reduce the amount
of Restricted Stock a Holder may include in any registration by the Company.
	 
	 	12.	 	Miscellaneous.

	 	(a)	 	Effectiveness. This Agreement shall become
effective on the date on which the purchase and sale of shares of
Common Stock pursuant to the Initial Public Offering first occurs.
	 
	 	(b)	 	Successors and Assigns. This Agreement shall
be binding upon the parties hereto and their respective successors and
permitted assigns and shall inure to the benefit of the parties hereto
and their respective successors and permitted assigns. This Agreement
may not be assigned by the Company. This Agreement may be assigned by
a Holder to any of its affiliates or to any other person who acquires
from a Holder at least 10% of the initial aggregate number of shares or
other units of Restricted Stock.
	 
	 	(c)	 	No Third-Party Beneficiaries. Nothing
expressed or implied in this Agreement shall be construed to give any
person or entity other than the parties hereto any legal or equitable
rights hereunder.
	 
	 	(d)	 	Entire Agreement. This Agreement constitutes
the entire agreement between the parties with respect to the subject
matter hereof.
	 
	 	(e)	 	Amendment. This Agreement may not be amended
except by an instrument signed by the parties hereto.
	 
	 	(f)	 	Waivers. Either party hereto may (i) extend
the time for the performance of any of the obligations or other act of
the other party, (ii) waive any inaccuracies in the representations and
warranties contained herein, or (iii) waive compliance with any of the
agreements contained herein. No waiver of any term shall be construed
as a waiver of the same term, or a waiver of any other term, of this
Agreement. The failure of any party to assert any of its rights
hereunder will not constitute a waiver of any such rights.
	 
	 	(g)	 	Severability. Whenever possible, each
provision or portion of any provision of this Agreement shall be
interpreted in such manner as to be effective and valid under
applicable law, but if any provision or portion of any provision of
this Agreement is held to be invalid, illegal or

14

 

	 	 	 	unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability shall
not affect the validity, legality or enforceability of any other
provision or portion of any provision in such jurisdiction, and this
Agreement shall be reformed, construed and enforced in such
jurisdiction in such manner as will effect as nearly as lawfully
possible the purpose and intent of such invalid, illegal or
unenforceable provision.
	 
	 	(h)	 	Headings. Section headings in this Agreement
are included herein for convenience of reference only and shall not
constitute a part of this Agreement for any other purpose.
	 
	 	(i)	 	Notices. All notices given in connection with
this Agreement shall be in writing. Service of such notices shall be
deemed complete (i) if hand delivered, on the date of delivery, (ii) if
by telecopier, upon receipt of oral or written confirmation that such
transmission has been received, (iii) if by mail, on the sixth business
day following the day of deposit in the United States mail, by
certified or registered mail, first-class postage prepaid, or (iv) if
sent by FedEx or equivalent courier service, on the next business day.
Such notices shall be addressed to the parties at the following
addresses or at such other address for a party as shall be specified by
like notice (except that notices of change of address shall be
effective upon receipt):

	 	 	 	 	 

	 

	 	If to Holder:
	 	Alon USA, LP
	 

	 	 	 	7616 LBJ Freeway
	 

	 	 	 	Suite 300
	 

	 	 	 	Dallas, TX 75251
	 

	 	 	 	Attn: Chief Legal Counsel — Corporate
	 

	 	 	 	Facsimile No.: (972) 367-3724
	 
	 	 	 	 
	 

	 	If to the Company:
	 	Alon Brands, Inc.
	 

	 	 	 	7616 LBJ Freeway
	 

	 	 	 	Third Floor
	 

	 	 	 	Dallas, TX 75251
	 

	 	 	 	Attn: Chief Legal Counsel — Corporate
	 

	 	 	 	Facsimile No.: (972) 367-3724

	 	(j)	 	Governing Law. This Agreement shall be
governed by, and construed in accordance with, the law of the State of
Delaware, without giving effect to the principles of conflict of laws
of such State.
	 
	 	(k)	 	Counterparts. This Agreement may be executed
in counterparts, each of which shall be an original, but all of which
together shall constitute but one and the same instrument.

15

 

          IN WITNESS WHEREOF, the Company and the Holder have caused this Agreement to be executed on
the date first above written.

	 	 	 	 	 
	 	ALON BRANDS, INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	ALON USA, LP

By: Alon USA GP, LLC

Its: General Partner

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

16

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