THE CORPORATE LIBRARY

Related Party Transactions and Outside Related Director Information

Alon USA Energy, Inc. (ALJ)

4/13/2006 Proxy Information

Management and Consulting Agreement with Alon Israel

Alon Israel provides strategic planning and management consulting services to Alon pursuant to a management and consulting agreement dated as of August 1, 2003. In particular, Alon Israel advises AlonŐs management regarding policy initiatives, financial planning and strategic planning relating to AlonŐs operations. The management and consulting agreement had an initial term of three years and provided that Alon pay Alon Israel an annual management and consulting fee. Alon paid Alon Israel $4.0 million in 2005 in accordance with the agreement. Upon completion of AlonŐs initial public offering, the term of the agreement was extended until December 31, 2009, and AlonŐs payment obligations under the agreement were terminated in exchange for an aggregate payment by Alon to Alon Israel of $6.0 million, $2.0 million of which was paid upon completion of AlonŐs initial public offering and the remaining $4.0 million of which was paid on January 19, 2006. Alon IsraelŐs obligations to provide consulting services under the amended agreement will remain in effect through the end of the term of the agreement.

As of March 31, 2006, Alon Israel was the beneficial owner of approximately 74.3% of AlonŐs outstanding common stock. David Wiessman, AlonŐs Executive Chairman of the Board, is the Chief Executive Officer, President and a director of Alon Israel. Mr. Wiessman also is the sole beneficiary of a trust which owns 2.0% of Alon Israel in the form of non-voting shares. Mr. Wiessman owns 20% of Bielsol Investments (1987) Ltd., which owns 37.2% of Alon Israel. The remaining 80% of Bielsol Investments (1987) Ltd. is owned by Shebug Ltd., which is wholly-owned by the family of Shraga Biran, the father of Boaz Biran, one of AlonŐs directors.

Service Relationships with Directors

From September 2002 until May 2005, Mr. Ron W. Haddock, one of AlonŐs directors, provided Alon with consulting services related to the U.S. oil and gas industry and new business opportunities. These consulting services were provided pursuant to an oral arrangement that became effective in September 2002. Pursuant to that consulting arrangement, Alon paid Mr. Haddock $12,500 in 2005. The terms of the oral consulting arrangement are based on the terms of a written consulting agreement with Mr. Haddock that expired in September 2002. AlonŐs oral consulting arrangement with Mr. Haddock and all obligations with respect to consulting fees were terminated in May 2005.

Alon entered into an agreement with Mr. Wiessman, effective January 1, 2005, pursuant to which he will serve as AlonŐs Executive Chairman of the Board through December 31, 2009. Pursuant to this agreement, Alon will pay Mr. Wiessman, through a company owned by him, a fee of $24,000 per month, and Mr. Wiessman will be entitled to participate in AlonŐs employee bonus plan at the same level as its Chief Executive Officer. Mr. Wiessman will be entitled to a 5% fee increase at the end of each of the second, third and fourth year of the new agreement. Alon will also pay the maintenance and utility costs associated with Mr. WiessmanŐs Dallas, Texas residence, will provide medical insurance benefits to Mr. Wiessman and will reimburse Mr. Wiessman for airfare incurred to transport his family members between Israel and the United States (up to a maximum of eight tickets per year). Alon may terminate this agreement on six months notice and Mr. Wiessman will be entitled to receive his full compensation and benefits during the notice period. Upon termination of this agreement following the notice period, Alon will be required to pay Mr. Wiessman a fee equal to the product of (1) 200% of his monthly fee multiplied by (2) the number of years of Mr. WiessmanŐs service with Alon since August 2000. Alon will also be required to pay Mr. Wiessman twelve months of severance.

Registration Rights Agreement with Alon Israel

Pursuant to the terms of a Registration Rights Agreement with Alon Israel, Alon has provided Alon Israel with registration rights, including demand registration rights and Ňpiggy-backÓ registration rights, with respect to Alon common stock owned by Alon Israel. AlonŐs obligations are subject to limitations relating to a minimum amount of common stock required for registration, the timing of registration and other similar matters. Alon is obligated to pay all expenses incidental to such registration, excluding underwritersŐ discounts and commissions and certain legal fees and expenses. Repayment of Indebtedness

On August 3, 2005, Alon used a portion of the net proceeds of its initial public offering to repay $20.7 million of outstanding subordinated notes payable to Alon Israel. The subordinated notes bore interest at a fixed rate of 7.0% per annum.

On February 28, 2005, Alon repaid $25.0 million of outstanding indebtedness borrowed from Alon Israel in August 2002 to finance the purchase of 40% minority interest in Alon USA Capital, Inc., a subsidiary of Alon. This indebtedness bore interest at a rate of 7.0% per annum.

Alon acquired substantially all of its operating assets from Atofina Petrochemicals, Inc., or Fina, in August 2000. A portion of the financing for this acquisition was provided by issuing an aggregate of $11.2 million of promissory notes to Rosebud Medical Ltd. and Africa Israel Energy Ltd., each of which subsequently assigned a 4.0% interest in such notes to Springer Investments S.A., an investment company wholly owned by David Wiessman. The promissory notes bore interest at a rate of 7.0% per annum. Alon paid all principal and accrued interest on such notes as follows: (See page 20 of proxy for table).

Rosebud Medical Ltd., a public company listed on the Tel Aviv Stock Exchange, is owned 76.1% by Tani-Pan Ltd. and 23.91% by public shareholders. Tani-Pan Ltd. is owned 24.5% by Biesol Investments, 51.0% by Mandelboum Gate Ltd. and 24.5% by unrelated third parties. Mr. Wiessman, through a company wholly-owned by him, owns 21.3% of Mandelboum Gate Ltd. and the family of Shraga Biran (the father of Boaz Biran, one of our directors) beneficially owns the remaining 78.7% of Mandelboum Gate Ltd.

Africa Israel Investments Ltd., a public company listed on the Tel Aviv Stock Exchange, is the sole stockholder of Africa Israel Trade & Agencies Ltd., which owns 26.4% of Alon Israel. Pinchas Cohen, one of our directors, is the Chief Executive Officer of Africa Israel Investment Ltd. Mr. Cohen is also a director of Alon Israel. Shaul Gliksberg, one of our directors, is the Senior Vice President of Finance of Africa Israel Investments Ltd.

In connection with AlonŐs acquisition from Fina, AlonŐs subsidiary, Alon Assets, Inc., issued subordinated promissory notes to Mr. Morris and Mr. Hart in principal amounts of $369,364 and $92,341, respectively, bearing interest at 7.0% per annum. In 2002, Alon repaid $236,097 and $59,024 of the principal and accrued interest owed to Mr. Morris and Mr. Hart, respectively. In 2003, Alon repaid $199,725 and $49,931 of the principal and interest owed to Mr. Morris and Mr. Hart, respectively. In April 2005, Alon repaid $10,369 and $1,444 to Mr. Morris and Mr. Hart in full payment of these notes. Relationships With Directors

Mr. Boaz Biran, one of AlonŐs directors, and the law firm in which he is a partner, Shraga F. Biran & Company, provide legal services to Alon Israel and its subsidiaries, including Alon, and are paid legal fees comparable to fees which would be paid to a third-party performing similar services on an armŐs length basis. During 2005, Alon paid Shraga F. Biran & Company approximately $60,000 in legal fees.

SCS Beverage

On February 29, 2004, Alon sold 17 licenses for the sale of alcoholic beverages at 17 stores in New Mexico to SCS Beverage, Inc., a corporation treated as a pass-through entity that is wholly-owned by Jeff D. Morris, AlonŐs President and Chief Executive Officer. Under rules and regulations of the New Mexico Alcohol and Gaming Division, or GAD, a holder of a license to sell alcoholic beverages in New Mexico must provide substantial documentation in the application for and annual renewal of the license, including detailed questionnaires and fingerprints of the officers and directors of each entity beneficially owning 10% or more of the holder of the license. Alon engaged in this transaction to expedite the process of renewing the licenses by limiting the required disclosures to one individual stockholder. The purchase price paid by SCS Beverage consisted of approximately $2.6 million for the 17 licenses and approximately $0.2 million for the inventory of alcoholic beverages on the closing date. The purchase price was paid by SCS Beverage issuing to Alon a demand promissory note in the amount of $2.8 million. The demand note is payable solely by transferring the licenses and inventory existing at the time of payment back to Alon. The demand note is secured by a pledge of the licenses and the inventory and a pledge of 100% of the stock of SCS Beverage. Pursuant to the purchase and sale agreement, SCS Beverage granted Alon an option to re-acquire the licenses at any time at a purchase price equal to the same purchase price paid by SCS Beverage to acquire the licenses.

As the holder of the New Mexico licenses, SCS Beverage is the only party entitled to purchase alcoholic beverages to be sold at the locations covered by the licenses and to receive revenues from the sale of alcoholic beverages at those locations. Simultaneously with the transfer of the licenses, SCS Beverage entered into a premises lease with Alon to lease space at each of the locations covered by the licenses for the purpose of conducting the alcoholic beverages concessions. The total annual payments by SCS Beverage to Alon under this premises lease agreement are approximately $1.85 million, subject to adjustment by Alon based on the volume of sales of alcoholic beverages at the locations covered by the licenses. To date, the profits realized by SCS Beverage from the sale of alcoholic beverages at these locations have not exceeded lease payments by SCS Beverage to Alon and it anticipates that this will continue to be the case in the future. As a result, Mr. Morris has not received any economic benefit from the ownership of SCS Beverage, and Alon does not anticipate that Mr. Morris will derive any economic benefit from his ownership of SCS Beverage in the future.

Alon Assets and Alon Operating Dividends

On February 28, 2005, Messrs. Morris, Hart and Concienne, each of whom is an executive officer of Alon, were paid cash dividends of $1,127,913, $281,967, and $72,134, respectively, in their capacities as stockholders of Alon Assets, Inc., a subsidiary of Alon. These dividends were funded from the cash proceeds Alon received in conjunction with its contribution of three product pipelines and three product terminals to Holly Energy Partners, LP

In connection with AlonŐs initial public offering, Messrs. Morris, Hart and Concienne received dividend payments from Alon USA Operating, Inc. in the respective amounts of $2,901,495, $725,781 and $246,721. In addition, because the underwritersŐ option to purchase additional shares was exercised in full, Messrs. Morris, Hart and Concienne received additional dividend payments from Alon USA Operating, Inc. in the respective amounts of $583,243, $145,292 and $49,594.