-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, HNgwbWZ7B1YQN/FDa3FglUpTX6QzGRmDVCQdSUTpxy953A80Zlxvktdym9CRjjdS 3BE4UyjYRhynyEmtV3z15A== 0000950124-04-001781.txt : 20040423 0000950124-04-001781.hdr.sgml : 20040423 20040423060507 ACCESSION NUMBER: 0000950124-04-001781 CONFORMED SUBMISSION TYPE: S-3/A PUBLIC DOCUMENT COUNT: 9 FILED AS OF DATE: 20040423 FILER: COMPANY DATA: COMPANY CONFORMED NAME: GIANT INDUSTRIES INC CENTRAL INDEX KEY: 0000856465 STANDARD INDUSTRIAL CLASSIFICATION: PETROLEUM REFINING [2911] IRS NUMBER: 860642718 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-3/A SEC ACT: 1933 Act SEC FILE NUMBER: 333-113590 FILM NUMBER: 04749313 BUSINESS ADDRESS: STREET 1: 23733 N SCOTTSDALE RD CITY: SCOTTSDALE STATE: AZ ZIP: 85255 BUSINESS PHONE: 4805858888 MAIL ADDRESS: STREET 1: 23733 N SCOTTSDALE RD CITY: SCOTTSDALE STATE: AZ ZIP: 85255 S-3/A 1 p68915a3sv3za.htm S-3/A sv3za
 

As filed with the Securities and Exchange Commission on April 23, 2004
Registration No. 333-113590



SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549


AMENDMENT NO. 3 TO

Form S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933


Giant Industries, Inc.

(Exact name of registrants as specified in their charters)
     
Delaware
  86-0642718
(State or other jurisdiction of incorporation or organization)   (I.R.S. Employer Identification No.)


23733 North Scottsdale Road

Scottsdale, Arizona 85255
(480) 585-8888
(Address, including zip code, and telephone number, including area code, of registrants’ principal executive offices)


Kim H. Bullerdick

Vice President, General Counsel, and Secretary
Giant Industries, Inc.
23733 North Scottsdale Road
Scottsdale, Arizona 85255
(480) 585-8888
(Address, including zip code, and telephone number, including area code, of agent for service)


Copy to:

Karen C. McConnell

Fennemore Craig, P.C.
3003 North Central, Suite 2600
Phoenix, Arizona 85012-2913
(602) 916-5000


      Approximate date of commencement of proposed sale to public:  From time to time, following the effective date of this registration statement, as determined by Giant Industries, Inc.

      If the only securities being registered on this Form are being offered pursuant to dividend or interest reinvestment plans, please check the following box.     o

      If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, check the following box.     þ

      If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.     o

      If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.     o

      If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box.     o

      The registrants hereby amend this registration statement on such date or dates as may be necessary to delay its effective date until the registrants shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the registration statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.




 

TABLE OF ADDITIONAL REGISTRANTS

                 
State or
Other I.R.S. Employer
Jurisdiction of Identification
Name Incorporation Number



Giant Industries Arizona, Inc. 
    AZ       86-0218157  
Ciniza Production Company
    NM       74-2468207  
Giant Stop-N-Go of New Mexico, Inc. 
    NM       85-0389396  
Giant Four Corners, Inc. 
    AZ       86-0739055  
Phoenix Fuel Co., Inc. 
    AZ       86-0109486  
San Juan Refining Company
    NM       74-2759385  
Giant Mid-Continent, Inc. 
    AZ       86-0784398  
Giant Pipeline Company
    NM       85-0467397  
Giant Yorktown, Inc. 
    DE       27-0003663  
Giant Yorktown Holding Company
    DE       20-0805473  

EXPLANATORY NOTE

      This Amendment No. 3 is being filed solely for the purpose of amending Items 16 and 17 of Part II of the Registration Statement (Registration No. 333-113590) and filing certain additional exhibits. This Amendment No. 3 does not contain a copy of the Prospectus Supplements or the Prospectus included in the Registration Statement, which are unchanged from Amendment No. 2 filed on April 13, 2004.


 

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

 
Item 14. Other Expenses of Issuance and Distribution

      The expenses to be paid by us in connection with the distribution of the securities being registered are as set forth in the following table:

         
SEC registration fee
  $ 38,010  
*Rating Agency fees
  $ 125,000  
*Printing expenses
  $ 300,000  
*Legal fees and expenses
  $ 300,000  
*Accounting fees and expenses
  $ 300,000  
*Blue Sky fees
  $ 10,000  
*Miscellaneous expenses
  $ 100,000  
     
 
Total
  $ 1,173,010  


*Estimated

 
Item 15. Indemnification of Directors and Officers

      Giant Industries, Inc. (the “Company”) has purchased insurance on behalf of the registrants’ directors and officers against certain liabilities that may be asserted against such persons in connection with any actual or alleged Wrongful Act (as defined in the policy) in their capacities as directors and officers of the registrants, including certain liabilities under the federal and state securities laws, except to the extent that the registrants have indemnified the directors and officers.

      The following contains summaries of certain circumstances in which indemnification is provided pursuant to the registrants’ Certificate or Articles of Incorporation and Bylaws. Such summaries are qualified in their entirety by reference to the registrants’ Certificate or Articles of Incorporation and Bylaws.

The Company, Giant Yorktown, Inc. and Giant Yorktown Holding Company

      As permitted by the Delaware General Corporation law (the “DGCL”), the Company’s Restated Certificate of Incorporation and the Certificates of Incorporation of Giant Yorktown, Inc. (“Yorktown”) and Giant Yorktown Holding Company (“Holding”) provide that a director of such corporation shall not be liable to the corporation or its stockholders for monetary damages for breach of fiduciary duty as a director, including grossly negligent business judgments made in good faith, except for liability (i) for breach of the duty of loyalty to the corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) under Section 174 of the DGCL (governing distributions to stockholders), or (iv) for any transaction for which a director derives an improper personal benefit. In addition, Section 145 of the DGCL and the respective Bylaws of the Company, Yorktown, and Holding under certain circumstances, provide for the indemnification of the Company’s, Yorktown’s, and Holding’s officers, directors, employees, and agents against liabilities, which they may incur in such capacities.

      Section 145 of the DGCL provides that a Delaware corporation may indemnify directors and officers as well as other employees and individuals against expenses (including attorneys’ fees), judgments, fines, and amounts paid in settlement in connection with specified actions, suits and proceedings, whether civil, criminal, administrative or investigative (other than action by or in the right of the corporation — a “derivative action”), if they acted in good faith and in a manner they reasonably believed to be in or not opposed to the best interests of the corporation and, with respect to any criminal action or proceeding, had no reasonable cause to believe their conduct was unlawful. A similar standard is applicable in the case of derivative actions, except that indemnification only extends to expenses (including attorneys’ fees) incurred in

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connection with the defense or settlement of such action, and the statute requires court approval before there can be any indemnification where the person seeking indemnification has been found liable to the corporation. The statute provides that it is not exclusive of other indemnification that may be granted by a corporation’s certificate of incorporation, bylaws, disinterested director vote, stockholder vote, agreement, or otherwise.

      The Company’s and Holding’s Bylaws provide that no person seeking indemnification may be denied indemnification unless the Board of Directors or the stockholders of such company determine in good faith, or independent legal counsel for such company opines in writing, that the standards for indemnification have not been met. A successful defense is deemed conclusive evidence of a person’s right to be indemnified against expenses. The Company or Holding may advance funds to pay the expenses of any person involved in such action provided that the Company or Holding, as applicable, receives an undertaking that the person will repay the advanced funds if it is ultimately determined that he is not entitled to indemnification.

      Yorktown’s Bylaws provide that all expenses (including attorneys’ fees), costs, judgments, fines and amounts paid in settlement actually and reasonably incurred by a person seeking indemnification shall be paid by Yorktown in advance of the final disposition of the action, suit or proceeding. However, as a condition to any such advance, Yorktown must receive an undertaking by or on behalf of such person to repay the amounts advanced if a final adjudication is made by a court of competent jurisdiction that such person was not entitled to indemnification. Such advances shall be mandatory, and no determination of the Board of Directors shall be required as a condition to such advances.

      Indemnification may also be granted pursuant to provisions of Bylaws, which may be adopted in the future, pursuant to the terms of agreements that may be entered into in the future or pursuant to a vote of stockholders or disinterested directors.

      Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the Company pursuant to the foregoing provisions, or otherwise, the Company has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable.

Giant Arizona, Giant Four Corners, Inc., Phoenix Fuel Co., Inc. and Giant Mid-Continent, Inc.

      With respect to Giant Industries Arizona, Inc., Giant Four Corners, Inc., Phoenix Fuel Co., Inc. and Giant Mid-Continent, Inc., all Arizona corporations (collectively referred to herein as the “Arizona Subsidiaries”), the Arizona Revised Statutes empower a corporation to indemnify directors or officers of the corporation who are made a party to a proceeding, including any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that the person is or was a director or officer of the corporation only if that person acted in good faith and reasonably believed (a) in the case of conduct in the person’s official capacity with the corporation that the person’s conduct was in its best interest; and (b) in all other cases, the person’s conduct was at least not opposed to the Arizona Subsidiaries’ best interests. In the case of any criminal proceeding, the person must have had no reasonable cause to believe that the person’s conduct was unlawful. Indemnification shall not be provided in respect of: (i) any proceeding by or in the right of the corporation in which the person was adjudged liable to the corporation, or (ii) any proceeding charging improper financial benefit to the person, whether or not involving action in the person’s official capacity for the corporation, in which the person was adjudged liable on the basis that financial benefit was improperly received by that person.

      Unless ordered by a court, indemnification pursuant to the foregoing may only be made by the Arizona Subsidiaries as authorized in a specific case upon a determination that indemnification is proper under the circumstances because the director or officer has met the applicable standard of conduct. Such determination shall be made (a) by the board of directors of the Arizona Subsidiary, acting by a majority vote of a quorum consisting of directors who are not parties to the proceeding; (b) by special legal counsel selected by a majority vote of the disinterested directors or, if there are no disinterested directors, by majority vote of the board; or (c) by the stockholders, but shares owned by or voted under the control of persons who are parties to the proceeding shall not be voted.

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      In addition, under Arizona law, unless limited by the articles of incorporation, the Arizona Subsidiaries are required to indemnify a director or officer against expenses in connection with any lawsuit or proceeding if such person has been successful on the merits or otherwise in the defense of such lawsuit or proceeding. Further, the Arizona Subsidiaries are required to indemnify an outside director against liability except (1) in the cases described above in which indemnification is not permitted and (2) if a court determines that the director did not meet the applicable standard of conduct. The Arizona Subsidiaries may advance or pay expenses incurred by a director or officer in advance of final disposition of a proceeding if all of the following conditions exist: (a) the person furnishes the corporation with a written affirmation of the person’s good faith belief that the person has met the applicable standard of conduct; and (b) the person furnishes the corporation with a written undertaking by or on behalf of such person to repay the advance if it is ultimately determined that the person did not met the applicable standard of conduct.

      The respective Articles of Incorporation (“Articles”) and Bylaws of the Arizona Subsidiaries provide that the Arizona Subsidiaries shall indemnify each director and officer to the fullest extent permitted by law. The Arizona Subsidiaries’ Bylaws extend that protection to employees and agents of the corporation. No modification of the indemnification provision may adversely affect any director’s or officer’s right to indemnification with respect to any act or omission occurring prior to such modifications.

      The Arizona Subsidiaries’ respective Articles provide that no director of the Arizona Subsidiaries shall be liable to the Arizona Subsidiaries or their respective stockholders for monetary damages for breach of fiduciary duty as a director; provided, however, that the Articles and Arizona law do not permit the elimination of liability (a) for any breach of the director’s duty of loyalty to the corporation or its stockholders; (b) for acts or omissions which are not in good faith or which involve intentional misconduct or a knowing violation of law; (c) for authorizing the unlawful payment of a dividend or other distribution on shares of the corporation’s capital stock; (d) for any transaction from which the director derived an improper personal benefit; or (e) for any violation of Section 10-041 of the Arizona Revised Statues, which relates to directors’ conflicts of interests. The effect of this provision in the Articles is to eliminate the rights of the Arizona Subsidiaries and their respective stockholders (through stockholders’ derivative suits on behalf of the Arizona Subsidiaries) to recover monetary damages against a director for breach of fiduciary duty as a director (including breaches resulting from negligent or grossly negligent behavior) except in the situations described in clauses (a) through (e) above. This provision will not alter the liability of directors under federal securities laws.

Giant Stop-N-Go of New Mexico, Inc., Ciniza Production Company, San Juan Refining Company, and Giant Pipeline Company

      With respect to Giant Stop-N-Go of New Mexico, Inc., Ciniza Production Company, San Juan Refining Company, and Giant Pipeline Company, all New Mexico corporations (collectively referred to herein as the “New Mexico Subsidiaries”), Section 53-11-4.1 NMSA 1978 of the New Mexico Business Corporation Act empowers a corporation to indemnify directors, officers, employees or agents of the corporation who are made a party to a proceeding, including any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that the person is or was a director, officer, employee or agent of the corporation only if that person acted in good faith and reasonably believed (a) in the case of conduct in the person’s official capacity with the corporation that the person’s conduct was in its best interest; and (b) in all other cases, the person’s conduct was at least not opposed to the New Mexico Subsidiaries’ best interests. In the case of any criminal proceeding, the person must have had no reasonable cause to believe that the person’s conduct was unlawful. Indemnification shall not be provided in respect of any proceeding charging improper personal benefit to the person, whether or not involving action in the person’s official capacity for the corporation, in which the person shall have been adjudged to be liable on the basis that personal benefit was improperly received by that person.

      If a determination has been made by the board of directors that the person has been wholly successful in the defense of the proceeding brought against him, or if a court should so determine that indemnification is required, the person shall be indemnified against reasonable expenses incurred by him in connection with the proceeding.

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      The New Mexico Subsidiaries may not indemnify a person until a determination has been made that the indemnification of that person in permissible under the circumstances because that person has met the standards of conduct required by Section 53-11-4.1B NMSA 1978. This determination shall be made (1) by the board of directors by a majority vote of a quorum consisting of directors who are not parties to the proceeding; (2) if that quorum cannot be obtained, by a majority vote by a committee of the board elected by a majority of the full board; (3) by special legal counsel selected by the board of directors or a committee thereof; or (4) by the stockholders. The reasonable expenses incurred by a person who is a party to the proceeding may be paid or reimbursed by the corporation in advance if (1) that person furnishes the New Mexico Subsidiaries with a written affirmation of his good faith belief that the person has met the standard of conduct necessary for indemnification by the New Mexico Subsidiaries; (2) the person furnishes the New Mexico Subsidiaries a written undertaking by or on his behalf to repay that amount if it is ultimately determined that the person has not met those standards of conduct; and (3) a determination is made that the facts then known to those making the determination will not preclude indemnification.

      The Bylaws of the New Mexico Subsidiaries provide for indemnification of directors and officers and each person who may serve at the corporation’s request as the director or officer of another corporation in which the corporation owns shares of capital stock or of which it is a creditor, against expenses actually and reasonably incurred in connection with the settlement or defense of any action, suit or proceeding, civil or criminal, in which that person is made a party by reason of being or having been such director or officer, except in relation to matters as to which he shall be adjudged in such action, suit or proceeding to be liable for negligence or misconduct in the performance of duty to the corporation. This provision specifically indemnifies each such director and officer from payment of any judgment, levy, or demand that might be granted against that person by virtue of his occupancy of that office growing out of any such action, suit or proceeding.

      The Bylaws of the New Mexico Subsidiaries provide that the indemnification contained therein is in addition, and not in lieu of, the indemnification of directors and officers described in Section 53-11-4.1 NMSA 1978, as that law may be amended from time to time.

      The Articles of San Juan Refining Company provide that, subject to certain exceptions, its directors shall not be personally liable to it or it stockholders for monetary damages for breach of fiduciary duties.

 
Item 16. Exhibits

      The following exhibits are filed with this registration statement:

         
Exhibit
No. Description


  1.1**     Form of Underwriting Agreement for Senior Subordinated Notes due 2014 among Giant Industries, Inc., as issuer, and Banc of America Securities LLC and BNP Paribas Securities Corp., as underwriters.
  1.2**     Form of Underwriting Agreement for Common Stock among Giant Industries, Inc., as issuer, and Banc of America Securities LLC, Credit Suisse First Boston LLC and Friedman, Billings, Ramsey & Co., Inc., as underwriters.
  2.1     Asset Purchase Agreement dated February 8, 2002, by and among, BP Corporation North America Inc., BP Products North America Inc., and Giant Industries, Inc. Incorporated by reference to Exhibit 2.3 to Giant’s Annual Report on Form 10-K for fiscal year ended December 31, 2001, File No. 1-10398.
  4.1     Restated Certificate of Incorporation of Giant Industries, Inc., a Delaware corporation. Incorporated by reference to Exhibit 3.1 to Amendment No. 3 to Giant’s Registration Statement on Form S-1 under the Securities Act of 1933 as filed December 12, 1989, File No. 33-31584.
  4.2     Bylaws of Giant Industries, Inc., a Delaware corporation, as amended September 9, 1999. Incorporated by reference to Exhibit 3.2 to Giant’s Annual Report on Form 10-K for the fiscal year ended December 31, 1999, File No. 1-10398.

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Exhibit
No. Description


  4.3     Indenture dated as of August 26, 1997, among Giant, as Issuer, the Subsidiary Guarantors, as guarantors, and The Bank of New York, as Trustee, relating to $150,000,000 of 9% Senior Subordinated Notes due 2007. Incorporated by reference to Exhibit 4.8 to Giant’s Registration Statement on Form S-4 under the Securities Act of 1933 as filed October 9, 1997, File No. 333-37561.
  4.4**     Supplemental Indenture to Indenture dated as of August 26, 1997 for $150,000,000 9% Senior Subordinated Notes due 2007, dated as of February 10, 1998, between DeGuelle Oil Company, as additional Subsidiary Guarantor, and The Bank of New York, as Trustee.
  4.5**     Supplemental Indenture to Indenture dated as of August 26, 1997 for $150,000,000 9% Senior Subordinated Notes due 2007, dated as of December 1, 2000, between Giant Pipeline Company, as additional Subsidiary Guarantor, and The Bank of New York, as Trustee.
  4.6**     Supplemental Indenture, dated as of April 2, 2002, among Giant Industries, Inc., the Subsidiary Guarantors and The Bank of New York relating to the 9% Senior Subordinated Notes due 2007.
  4.7**     Supplemental Indenture to Indenture dated as of August 26, 1997 for $150,000,000 9% Senior Subordinated Notes due 2007, dated as of May 10, 2002, among Giant Yorktown, Inc. and Giant Yorktown Holding Company, as additional Subsidiary Guarantors, and The Bank of New York, as Trustee.
  4.8     Indenture, dated as of May 14, 2002, among Giant, as Issuer, the Subsidiary Guarantors, as guarantors, and The Bank of New York, as Trustee, relating to $200,000,000 of 11% Senior Subordinated Notes due 2012. Incorporated by reference to Exhibit 4.2 to Giant’s Registration Statement on Form S-4 under the Securities Act of 1933 as filed July 15, 2002, File No. 333-92386.
  4.9**     Form of Indenture among Giant Industries, Inc., the subsidiary guarantors identified therein and The Bank of New York, as trustee.
  4.10**     Form of Supplemental Indenture for Senior Subordinated Notes due 2014.
  4.11**     Form of Senior Subordinated Note due 2014 (included in Exhibit 4.10).
  4.12*     Form of Certificate of Designation for Preferred Stock.
  4.13*     Form of Preferred Stock Certificate.
  4.14*     Form of Equity Warrant Agreement.
  4.15*     Form of Equity Warrant (included in Exhibit 4.14).
  4.16*     Form of Debt Warrant Agreement.
  4.17*     Form of Debt Warrant (included in Exhibit 4.16).
  4.18*     Form of Purchase Contract.
  4.19*     Form of Unit Agreement, including form of Unit Certificate.
  4.20     Specimen Certificate for shares of Common Stock, par value $.01 per share. Incorporated by reference to Exhibit 4.1 to Giant’s Registration Statement on Form S-1 under the Securities Act of 1933 as filed October 16, 1989, File No. 33-31584.
  5.1†     Opinion of Fennemore Craig, P.C., as to the legality of the securities being registered by Giant.
  12.1†     Statement of Computation of Ratios.
  23.1†     Consent of Deloitte & Touche LLP.
  23.2†     Consent of Fennemore Craig, P.C. (included in Exhibit 5.1).
  24.1†     Powers of Attorney (included in the signature pages of this registration statement).
  25.1†     Statement of Eligibility of Trustee on Form T-1 under the Trust Indenture Act of 1939.


  *  To be filed by amendment or as an exhibit to a Current Report on Form 8-K report filed under the Securities Exchange Act of 1934, as amended, and incorporated herein by reference.

**  Filed herewith.
 
  †  Previously filed.

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Item 17. Undertakings

      (a) We hereby undertake:

        (1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:

        (i) To include any prospectus required by Section 10(a)(3) of the Securities Act;
 
        (ii) To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement;
 
        (iii) To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement;

  provided, however, that information required to be included in a post-effective amendment by paragraphs (a)(1)(i) and (a)(1)(ii) above may be contained in periodic reports filed by the registrant pursuant to Section 13 or Section 15(d) of the Exchange Act that are incorporated by reference in the registration statement.

        (2) That, for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
 
        (3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.

      (b) We hereby undertake that, for purposes of determining any liability under the Securities Act, each filing of our annual report pursuant to Section 13(a) or Section 15(d) of the Exchange Act (and, where applicable, each filing of an employee benefit plan’s annual report pursuant to Section 15(d) of the Exchange Act) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

      (c) Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of Giant pursuant to the provisions described in this registration statement above, or otherwise, we have been advised that in the opinion of the Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by us of expenses incurred or paid by a director, officer or controlling person of us in the successful defense of any action, suit or proceeding) is asserted against us by such director, officer or controlling person in connection with the securities being registered, we will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.

      (d) For purposes of determining any liability under the Securities Act of 1933, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and

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contained in a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective.

      (e) For the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

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SIGNATURES

      Pursuant to the requirements of the Securities Act of 1933, Giant Industries, Inc. certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3 and has duly caused this Amendment No. 3 to Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Scottsdale, State of Arizona, on April 23, 2004.

  GIANT INDUSTRIES, INC.

  By:  /s/ ROGER D. SANDEEN
 
  Roger D. Sandeen
  Vice President, Chief Accounting Officer and Assistant Secretary

      Pursuant to the requirements of the Securities Act of 1933, this Amendment No. 3 to Registration Statement has been signed by the following persons in the capacities indicated on April 23, 2004.

         
Signature Title


*

Fred L. Holliger
  Chairman of the Board, Chief Executive Officer and Director (Principal Executive Officer)
 
*

Mark B. Cox
  Vice President, Treasurer, Chief Financial Officer and Assistant Secretary (Principal Financial Officer)
 
/s/ ROGER D. SANDEEN

Roger D. Sandeen
  Vice President, Chief Accounting Officer and Assistant Secretary (Principal Accounting Officer)
 


James E. Acridge
  Director
 
*

Anthony J. Bernitsky
  Director
 
*

George M. Rapport
  Director
 
*

Richard T. Kalen, Jr.
  Director
 
*

Larry L. DeRoin
  Director

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Signature Title


 
*

Brooks J. Klimley
  Director
 
*

Donald M. Wilkinson
  Director
 
*By:   /s/ ROGER D. SANDEEN

Roger D. Sandeen
Attorney-in-fact
   

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SIGNATURES

      Pursuant to the requirements of the Securities Act of 1933, Giant Industries Arizona, Inc. certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3 and has duly caused this Amendment No. 3 to Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Scottsdale, State of Arizona, on April 23, 2004.

  GIANT INDUSTRIES ARIZONA, INC.

  By:  /s/ ROGER D. SANDEEN
 
  Roger D. Sandeen
  Chief Accounting Officer

      Pursuant to the requirements of the Securities Act of 1933, this Amendment No. 3 to Registration Statement has been signed by the following persons in the capacities indicated on April 23, 2004.

         
Signature Title


*

Fred L. Holliger
  Chief Executive Officer
(Principal Executive Officer)
 
*

Kim H. Bullerdick
  Director
 
*

Mark B. Cox
  Chief Financial Officer and Director
(Principal Financial Officer)
 
/s/ ROGER D. SANDEEN

Roger D. Sandeen
  Chief Accounting Officer and Director
(Principal Accounting Officer)
 
*By:   /s/ ROGER D. SANDEEN

Roger D. Sandeen
Attorney-in-fact
   

II-10


 

SIGNATURES

      Pursuant to the requirements of the Securities Act of 1933, Ciniza Production Company certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3 and has duly caused this Amendment No. 3 to Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Scottsdale, State of Arizona, on April 23, 2004.

  CINIZA PRODUCTION COMPANY

  By:  /s/ ROGER D. SANDEEN
 
  Roger D. Sandeen
  Chief Accounting Officer

      Pursuant to the requirements of the Securities Act of 1933, this Amendment No. 3 to Registration Statement has been signed by the following persons in the capacities indicated on April 23, 2004.

         
Signature Title


*

Fred L. Holliger
  Chief Executive Officer
(Principal Executive Officer)
 
*

Kim H. Bullerdick
  Director
 
*

Mark B. Cox
  Chief Financial Officer and Director
(Principal Financial Officer)
 
/s/ ROGER D. SANDEEN

Roger D. Sandeen
  Chief Accounting Officer and Director
(Principal Accounting Officer)
 
*By:   /s/ ROGER D. SANDEEN

Roger D. Sandeen
Attorney-in-fact
   

II-11


 

SIGNATURES

      Pursuant to the requirements of the Securities Act of 1933, Giant Stop-N-Go of New Mexico, Inc. certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3 and has duly caused this Amendment No. 3 to Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Scottsdale, State of Arizona, on April 23, 2004.

  GIANT STOP-N-GO OF NEW MEXICO, INC.

  By:  /s/ ROGER D. SANDEEN
 
  Roger D. Sandeen
  Chief Accounting Officer

      Pursuant to the requirements of the Securities Act of 1933, this Amendment No. 3 to Registration Statement has been signed by the following persons in the capacities indicated on April 23, 2004.

         
Signature Title


*

Fred L. Holliger
  Chief Executive Officer
(Principal Executive Officer)
 
*

Kim H. Bullerdick
  Director
 
*

Mark B. Cox
  Chief Financial Officer and Director
(Principal Financial Officer)
 
/s/ ROGER D. SANDEEN

Roger D. Sandeen
  Chief Accounting Officer and Director
(Principal Accounting Officer)
 
*By:   /s/ ROGER D. SANDEEN

Roger D. Sandeen
Attorney-in-fact
   

II-12


 

SIGNATURES

      Pursuant to the requirements of the Securities Act of 1933, Giant Four Corners, Inc. certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3 and has duly caused this Amendment No. 3 to Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Scottsdale, State of Arizona, on April 23, 2004.

  GIANT FOUR CORNERS, INC.

  By:  /s/ ROGER D. SANDEEN
 
  Roger D. Sandeen
  Chief Accounting Officer

      Pursuant to the requirements of the Securities Act of 1933, this Amendment No. 3 to Registration Statement has been signed by the following persons in the capacities indicated on April 23, 2004.

         
Signature Title


*

Fred L. Holliger
  Chief Executive Officer
(Principal Executive Officer)
 
*

Kim H. Bullerdick
  Director
 
*

Mark B. Cox
  Chief Financial Officer and Director
(Principal Financial Officer)
 
/s/ ROGER D. SANDEEN

Roger D. Sandeen
  Chief Accounting Officer and Director
(Principal Accounting Officer)
 
*By:   /s/ ROGER D. SANDEEN

Roger D. Sandeen
Attorney-in-fact
   

II-13


 

SIGNATURES

      Pursuant to the requirements of the Securities Act of 1933, Phoenix Fuel Co., Inc. certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3 and has duly caused this Amendment No. 3 to Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Scottsdale, State of Arizona, on April 23, 2004.

  PHOENIX FUEL CO., INC.

  By:  /s/ ROGER D. SANDEEN
 
  Roger D. Sandeen
  Chief Accounting Officer

      Pursuant to the requirements of the Securities Act of 1933, this Amendment No. 3 to Registration Statement has been signed by the following persons in the capacities indicated on April 23, 2004.

         
Signature Title


*

Fred L. Holliger
  Chief Executive Officer
(Principal Executive Officer)
 
*

Kim H. Bullerdick
  Director
 
*

Mark B. Cox
  Chief Financial Officer and Director
(Principal Financial Officer)
 
/s/ ROGER D. SANDEEN

Roger D. Sandeen
  Chief Accounting Officer and Director
(Principal Accounting Officer)
 
*By:   /s/ ROGER D. SANDEEN

Roger D. Sandeen
Attorney-in-fact
   

II-14


 

SIGNATURES

      Pursuant to the requirements of the Securities Act of 1933, San Juan Refining Company certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3 and has duly caused this Amendment No. 3 to Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Scottsdale, State of Arizona, on April 23, 2004.

  SAN JUAN REFINING COMPANY

  By:  /s/ ROGER D. SANDEEN
 
  Roger D. Sandeen
  Chief Accounting Officer

      Pursuant to the requirements of the Securities Act of 1933, this Amendment No. 3 to Registration Statement has been signed by the following persons in the capacities indicated on April 23, 2004.

         
Signature Title


*

Fred L. Holliger
  Chief Executive Officer
(Principal Executive Officer)
 
*

Kim H. Bullerdick
  Director
 
*

Mark B. Cox
  Chief Financial Officer and Director
(Principal Financial Officer)
 
/s/ ROGER D. SANDEEN

Roger D. Sandeen
  Chief Accounting Officer and Director
(Principal Accounting Officer)
 
*By:   /s/ ROGER D. SANDEEN

Roger D. Sandeen
Attorney-in-fact
   

II-15


 

SIGNATURES

      Pursuant to the requirements of the Securities Act of 1933, Giant Mid-Continent, Inc. certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3 and has duly caused this Amendment No. 3 to Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Scottsdale, State of Arizona, on April 23, 2004.

  GIANT MID-CONTINENT, INC.

  By:  /s/ ROGER D. SANDEEN
 
  Roger D. Sandeen
  Chief Accounting Officer

      Pursuant to the requirements of the Securities Act of 1933, this Amendment No. 3 to Registration Statement has been signed by the following persons in the capacities indicated on April 23, 2004.

         
Signature Title


*

Fred L. Holliger
  Chief Executive Officer
(Principal Executive Officer)
 
*

Kim H. Bullerdick
  Director
 
*

Mark B. Cox
  Chief Financial Officer and Director
(Principal Financial Officer)
 
/s/ ROGER D. SANDEEN

Roger D. Sandeen
  Chief Accounting Officer and Director
(Principal Accounting Officer)
 
*By:   /s/ ROGER D. SANDEEN

Roger D. Sandeen
Attorney-in-fact
   

II-16


 

SIGNATURES

      Pursuant to the requirements of the Securities Act of 1933, Giant Pipeline Company certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3 and has duly caused this Amendment No. 3 to Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Scottsdale, State of Arizona, on April 23, 2004.

  GIANT PIPELINE COMPANY

  By:  /s/ ROGER D. SANDEEN
 
  Roger D. Sandeen
  Chief Accounting Officer

      Pursuant to the requirements of the Securities Act of 1933, this Amendment No. 3 to Registration Statement has been signed by the following persons in the capacities indicated on April 23, 2004.

         
Signature Title


*

Fred L. Holliger
  Chief Executive Officer
(Principal Executive Officer)
 
*

Kim H. Bullerdick
  Director
 
*

Mark B. Cox
  Chief Financial Officer and Director
(Principal Financial Officer)
 
/s/ ROGER D. SANDEEN

Roger D. Sandeen
  Chief Accounting Officer and Director
(Principal Accounting Officer)
 
*By:   /s/ ROGER D. SANDEEN

Roger D. Sandeen
Attorney-in-fact
   

II-17


 

SIGNATURES

      Pursuant to the requirements of the Securities Act of 1933, Giant Yorktown, Inc. certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3 and has duly caused this Amendment No. 3 to Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Scottsdale, State of Arizona, on April 23, 2004.

  GIANT YORKTOWN, INC.

  By:  /s/ ROGER D. SANDEEN
 
  Roger D. Sandeen
  Chief Accounting Officer

      Pursuant to the requirements of the Securities Act of 1933, this Amendment No. 3 to Registration Statement has been signed by the following persons in the capacities indicated on April 23, 2004.

         
Signature Title


*

Fred L. Holliger
  Chief Executive Officer
(Principal Executive Officer)
 
*

Kim H. Bullerdick
  Director
 
*

Mark B. Cox
  Chief Financial Officer and Director
(Principal Financial Officer)
 
/s/ ROGER D. SANDEEN

Roger D. Sandeen
  Chief Accounting Officer and Director
(Principal Accounting Officer)
 
*By:   /s/ ROGER D. SANDEEN

Roger D. Sandeen
Attorney-in-fact
   

II-18


 

SIGNATURES

      Pursuant to the requirements of the Securities Act of 1933, Giant Yorktown Holding Company certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3 and has duly caused this Amendment No. 3 to Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Scottsdale, State of Arizona, on April 23, 2004.

  GIANT YORKTOWN HOLDING COMPANY

  By:  /s/ ROGER D. SANDEEN
 
  Roger D. Sandeen
  Chief Accounting Officer

      Pursuant to the requirements of the Securities Act of 1933, this Amendment No. 3 to Registration Statement has been signed by the following persons in the capacities indicated on April 23, 2004.

         
Signature Title


*

Fred L. Holliger
  Chief Executive Officer
(Principal Executive Officer)
 
*

Kim H. Bullerdick
  Director
 
*

Mark B. Cox
  Chief Financial Officer and Director
(Principal Financial Officer)
 
/s/ ROGER D. SANDEEN

Roger D. Sandeen
  Chief Accounting Officer and Director
(Principal Accounting Officer)
 
*By:   /s/ ROGER D. SANDEEN

Roger D. Sandeen
Attorney-in-fact
   

II-19


 

INDEX TO EXHIBITS

         
Exhibit
No. Description


  1.1**     Form of Underwriting Agreement for Senior Subordinated Notes due 2014 among Giant Industries, Inc., as issuer, and Banc of America Securities LLC and BNP Paribas Securities Corp., as underwriters.
  1.2**     Form of Underwriting Agreement for Common Stock among Giant Industries, Inc., as issuer, and Banc of America Securities LLC, Credit Suisse First Boston LLC and Friedman, Billings, Ramsey & Co., Inc., as underwriters.
  2.1     Asset Purchase Agreement dated February 8, 2002, by and among, BP Corporation North America Inc., BP Products North America Inc., and Giant Industries, Inc. Incorporated by reference to Exhibit 2.3 to Giant’s Annual Report on Form 10-K for fiscal year ended December 31, 2001, File No. 1-10398.
  4.1     Restated Certificate of Incorporation of Giant Industries, Inc., a Delaware corporation. Incorporated by reference to Exhibit 3.1 to Amendment No. 3 to Giant’s Registration Statement on Form S-1 under the Securities Act of 1933 as filed December 12, 1989, File No. 33-31584.
  4.2     Bylaws of Giant Industries, Inc., a Delaware corporation, as amended September 9, 1999. Incorporated by reference to Exhibit 3.2 to Giant’s Annual Report on Form 10-K for the fiscal year ended December 31, 1999, File No. 1-10398.
  4.3     Indenture dated as of August 26, 1997, among Giant, as Issuer, the Subsidiary Guarantors, as guarantors, and The Bank of New York, as Trustee, relating to $150,000,000 of 9% Senior Subordinated Notes due 2007. Incorporated by reference to Exhibit 4.8 to Giant’s Registration Statement on Form S-4 under the Securities Act of 1933 as filed October 9, 1997, File No. 333-37561.
  4.4**     Supplemental Indenture to Indenture dated as of August 26, 1997 for $150,000,000 9% Senior Subordinated Notes due 2007, dated as of February 10, 1998, between DeGuelle Oil Company, as additional Subsidiary Guarantor, and the Bank of New York, as Trustee.
  4.5**     Supplemental Indenture to Indenture dated as of August 26, 1997 for $150,000,000 9% Senior Subordinated Notes due 2007, dated as of December 1, 2000, between Giant Pipeline Company, as additional Subsidiary Guarantor, and The Bank of New York, as Trustee.
  4.6**     Supplemental Indenture, dated as of April 2, 2002, among Giant Industries, Inc., the Subsidiary Guarantors and the Bank of New York relating to the 9% Senior Subordinated Notes due 2007.
  4.7**     Supplemental Indenture to Indenture dated as of August 26, 1997 for $150,000,000 9% Senior Subordinated Notes due 2007, dated as of May 10, 2002, among Giant Yorktown, Inc. and Giant Yorktown Holding Company, as additional Subsidiary Guarantors, and the Bank of New York, as Trustee.
  4.8     Indenture, dated as of May 14, 2002, among Giant, as Issuer, the Subsidiary Guarantors, as guarantors, and The Bank of New York, as Trustee, relating to $200,000,000 of 11% Senior Subordinated Notes due 2012. Incorporated by reference to Exhibit 4.2 to Giant’s Registration Statement on Form S-4 under the Securities Act of 1933 as filed July 15, 2002, File No. 333-92386.
  4.9**     Form of Indenture among Giant Industries, Inc., the subsidiary guarantors identified therein and The Bank of New York, as trustee.
  4.10**     Form of Supplemental Indenture for Senior Subordinated Notes due 2014.
  4.11**     Form of Senior Subordinated Note due 2014 (included in Exhibit 4.10).
  4.12*     Form of Certificate of Designation for Preferred Stock.
  4.13*     Form of Preferred Stock Certificate.
  4.14*     Form of Equity Warrant Agreement.
  4.15*     Form of Equity Warrant (included in Exhibit 4.14).
  4.16*     Form of Debt Warrant Agreement.
  4.17*     Form of Debt Warrant (included in Exhibit 4.16).
  4.18*     Form of Purchase Contract.
  4.19*     Form of Unit Agreement, including form of Unit Certificate.


 

         
Exhibit
No. Description


  4.20     Specimen Certificate for shares of Common Stock, par value $.01 per share. Incorporated by reference to Exhibit 4.1 to Giant’s Registration Statement on Form S-1 under the Securities Act of 1933 as filed October 16, 1989, File No. 33-31584.
  5.1†     Opinion of Fennemore Craig, P.C., as to the legality of the securities being registered by Giant.
  12.1†     Statement of Computation of Ratios.
  23.1†     Consent of Deloitte & Touche LLP.
  23.2†     Consent of Fennemore Craig, P.C. (included in Exhibit 5.1).
  24.1†     Powers of Attorney (included in the signature pages of this registration statement).
  25.1†     Statement of Eligibility of Trustee on Form T-1 under the Trust Indenture Act of 1939.


*  To be filed by amendment or as an exhibit to a Current Report on Form 8-K report filed under the Securities Exchange Act of 1934, as amended, and incorporated herein by reference.

**  Filed herewith.
 
  †  Previously filed.
EX-1.1 3 p68915a3exv1w1.txt EX-1.1 EXHIBIT 1.1 GIANT INDUSTRIES, INC. U.S. $150,000,000 [____] % Senior Subordinated Notes due 2014 UNDERWRITING AGREEMENT Dated April [__], 2004 BANC OF AMERICA SECURITIES LLC BNP PARIBAS SECURITIES CORP. i TABLE OF CONTENTS SECTION 1. REPRESENTATIONS AND WARRANTIES....................................................................... 3 (a) Compliance with Registration Requirements.................................................................... 3 (b) Exchange Act Compliance...................................................................................... 4 (c) Offering Materials Furnished to Underwriters................................................................. 4 (d) Distribution of Offering Material By the Company............................................................. 4 (e) Authorization of the Underwriting Agreement.................................................................. 4 (f) Authorization of the Indenture............................................................................... 4 (g) Authorization of the DTC Letter of Representations........................................................... 5 (h) Authorization of the Notes................................................................................... 5 (i) Authorization of the Guarantees of the Notes................................................................. 5 (j) No Applicable Registration or Other Similar Rights........................................................... 5 (k) No Material Adverse Change................................................................................... 5 (l) Independent Accountants...................................................................................... 6 (m) Preparation of the Financial Statements...................................................................... 6 (n) Incorporation and Good Standing of the Company............................................................... 6 (o) Incorporation and Good Standing of the Subsidiary Guarantors................................................. 6 (p) Capitalization and Other Capital Stock Matters............................................................... 7 (q) Description of the Notes..................................................................................... 7 (r) Non-Contravention of Existing Instruments; No Further Authorizations or Approvals Required................... 7 (s) Required Consents............................................................................................ 8 (t) Supplemental Indenture....................................................................................... 8 (u) Notice of Term Loan Prepayment............................................................................... 8 (v) No Material Actions or Proceedings........................................................................... 8 (w) No Labor Disputes............................................................................................ 8 (x) Intellectual Property Rights................................................................................. 9 (y) All Necessary Permits, etc................................................................................... 9 (z) Title to Properties.......................................................................................... 9 (aa) Tax Law Compliance.......................................................................................... 9 (bb) Company Not an "Investment Company"......................................................................... 9 (cc) Insurance................................................................................................... 10 (dd) No Mandatory Redemption..................................................................................... 10 (ee) Solvency.................................................................................................... 10 (ff) No Price Stabilization or Manipulation...................................................................... 10 (gg) Related Party Transactions.................................................................................. 10 (hh) No Unlawful Contributions or Other Payments................................................................. 10 (ii) Company's Accounting System................................................................................. 10 (jj) Compliance with Environmental Laws.......................................................................... 11 (kk) Periodic Review of Costs of Environmental Compliance........................................................ 11 (ll) ERISA Compliance............................................................................................ 11 (mm) Brokers..................................................................................................... 12 (nn) No Outstanding Loans or Other Indebtedness.................................................................. 12 (oo) Compliance with Laws........................................................................................ 12 (pp) No Event of Default......................................................................................... 12 (qq) Disclosure Controls and Procedures.......................................................................... 12 SECTION 2. PURCHASE, SALE AND DELIVERY OF THE SECURITIES......................................................... 13 (a) The Closing Date............................................................................................. 13 (b) Public Offering of the Securities............................................................................ 13 (c) Payment for the Securities................................................................................... 13 (d) Delivery of the Securities................................................................................... 13
ii (e) Delivery of Prospectus to the Underwriters................................................................... 14 SECTION 3. ADDITIONAL COVENANTS OF THE COMPANY................................................................... 14 (a) Representatives' Review of Proposed Amendments and Supplements............................................... 14 (b) Securities Act Compliance.................................................................................... 14 (c) Notification of Breach of this Agreement..................................................................... 14 (d) Amendments and Supplements to the Prospectus and Other Securities Act Matters................................ 14 (e) Copies of any Amendments and Supplements to the Prospectus................................................... 15 (f) Blue Sky Compliance.......................................................................................... 15 (g) DTC Eligibility.............................................................................................. 15 (h) Clearstream and Euroclear Eligibility........................................................................ 15 (i) Use of Proceeds.............................................................................................. 15 (j) Earnings Statement........................................................................................... 15 (k) Periodic Reporting Obligations............................................................................... 15 (l) Company to Provide Interim Financial Statements.............................................................. 15 (m) Agreement Not to Offer or Sell Additional Securities......................................................... 15 (n) Future Reports to the Representatives........................................................................ 16 (o) Investment Limitation........................................................................................ 16 (p) No Manipulation of Price..................................................................................... 16 (q) Existing Lock-Up Agreement................................................................................... 16 (r) Compliance with Consents..................................................................................... 16 (s) Notice of Redemption for 9% Notes............................................................................ 17 SECTION 4. PAYMENT OF EXPENSES................................................................................... 17 SECTION 5. CONDITIONS TO OBLIGATIONS OF THE UNDERWRITERS......................................................... 17 (a) No Untrue Statements; Inadvisable to Proceed................................................................. 17 (b) Corporate Proceedings........................................................................................ 18 (c) Resolutions.................................................................................................. 18 (d) Accountant's Comfort Letter.................................................................................. 18 (e) Bring-Down Comfort Letters................................................................................... 18 (f) Compliance with Registration Requirements; No Stop Order; No Objection from NASD............................. 18 (g) No Material Adverse Change................................................................................... 19 (h) Opinion of Counsel for the Company........................................................................... 19 (i) Opinion of Counsel for the Underwriters...................................................................... 19 (j) Officers' Certificate........................................................................................ 19 (k) Officer's Certificate Related to Financial Covenants......................................................... 20 (l) Other Certificates........................................................................................... 20 (m) Additional Documents......................................................................................... 20 (n) DTC Acceptance............................................................................................... 20 (o) Supplemental Indenture....................................................................................... 20 (p) Required Consents............................................................................................ 20 (q) Deposit in redemption trust account.......................................................................... 20 SECTION 6. REIMBURSEMENT OF UNDERWRITERS' EXPENSES............................................................... 21 SECTION 7. EFFECTIVENESS OF THIS AGREEMENT....................................................................... 21 SECTION 8. INDEMNIFICATION....................................................................................... 21 (a) Indemnification of the Company, its Directors and Officers................................................... 22 (b) Notifications and Other Indemnification Procedures........................................................... 22 (c) Settlements.................................................................................................. 23 SECTION 9. CONTRIBUTION.......................................................................................... 23 SECTION 10. DEFAULT OF ONE OR MORE OF THE SEVERAL UNDERWRITERS................................................... 24 SECTION 11. TERMINATION OF THIS AGREEMENT........................................................................ 25 SECTION 12. REPRESENTATIONS AND INDEMNITIES TO SURVIVE DELIVERY.................................................. 25 SECTION 13. NOTICES.............................................................................................. 26
iii SECTION 14. SUCCESSORS........................................................................................... 26 SECTION 15. PARTIAL UNENFORCEABILITY............................................................................. 26 SECTION 16. GOVERNING LAW PROVISIONS............................................................................. 27 SECTION 17. GENERAL PROVISIONS................................................................................... 27
UNDERWRITING AGREEMENT April [__], 2004 BANC OF AMERICA SECURITIES LLC BNP PARIBAS SECURITIES CORP. As Representatives of the several Underwriters c/o Banc of America Securities LLC 9 West 57th Street New York, New York 10019 Ladies and Gentlemen: Introductory. Giant Industries Inc., a Delaware corporation (the "Company"), proposes to issue and sell to the several underwriters named in Schedule A (the "Underwriters") acting severally and not jointly, the respective amounts set forth in such Schedule A of U.S. $150,000,000 aggregate principal amount of the Company's [____]% senior subordinated notes due 2014 (the "Notes"). Banc of America Securities LLC ("BAS"), and BNP Paribas Securities Corp. have agreed to act as representatives of the several Underwriters (in such capacity, the "Representatives") in connection with the offering and sale of the Notes. The Notes are to be issued pursuant to an Indenture, to be dated [____], 2004 and a supplemental indenture to be dated as of May [__], 2004, each among the Company, the Subsidiary Guarantors (as defined below), and The Bank of New York, as indenture trustee (the "Trustee") (collectively, the "Indenture"). Notes issued in book-entry form will be issued in the name of Cede & Co., as nominee of The Depository Trust Company ("DTC") pursuant to a letter of representations, to be dated as of the Delivery Date (as defined in Section 3) (the "DTC Letter of Representations"), among the Company, the Subsidiary Guarantors party thereto, the Trustee and DTC. The payment of principal of, premium and interest on the Notes will be fully and unconditionally guaranteed on a senior subordinated basis, jointly and severally, by all the Subsidiary Guarantors (collectively, the "Subsidiary Guarantors", and together with the Company, the "Sellers"), pursuant to their guarantees (the "Guarantees"). Each of the Subsidiary Guarantors as of the date of this Agreement is listed in Schedule B. The Notes and the Guarantees thereof are herein collectively referred to as the "Securities". The Company has prepared and filed with the Securities and Exchange Commission (the "Commission") a registration statement on Form S-3 (File No. 333-113590) for the registration of debt securities (including the Notes), preferred stock, common stock, debt and equity warrants, stock purchase contracts, stock purchase units and units of the Company under the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder (collectively, the "Securities Act"), and the offering thereof from time to time in accordance with Rule 415 under the Securities Act. Such registration statement has been declared effective by the Commission. Such registration statement, as so amended, if applicable, including the exhibits and schedules thereto, and including all documents incorporated or deemed to be incorporated by reference therein pursuant to Item 12 of Form S-3, prior to the execution of this Agreement, is called the "Registration Statement". The final prospectus and the final prospectus supplement relating to the offering of the Notes, in the form first furnished to the Underwriters by the Company for use in connection with the offering of the Notes, including all documents incorporated or deemed to be incorporated by reference therein pursuant to 2 Item 12 of Form S-3, prior to the execution of this Agreement, is called the "Prospectus". A "preliminary prospectus" shall be deemed to refer to any prospectus that omitted information to be included upon pricing in a form of prospectus filed with the Commission pursuant to Rule 424(b) under the Securities Act and was used prior to the execution and delivery of this Agreement. All references in this Agreement to the Registration Statement, a preliminary prospectus, the Prospectus or any amendments or supplements to any of the foregoing, shall include any copy thereof filed with the Commission pursuant to its Electronic Data Gathering, Analysis and Retrieval System ("EDGAR"). All references in this Agreement to financial statements and schedules and other information which is "contained", "included" or "stated" (all other references of like import) in the Registration Statement, a preliminary prospectus or the Prospectus shall be deemed to mean and include all such financial statements and schedules and other information which is or is deemed to be incorporated by reference in the Registration Statement, a preliminary prospectus or the Prospectus, as the case may be, prior to the execution of this Agreement; and all references in this Agreement to amendments or supplements to the Registration Statement, a preliminary prospectus or the Prospectus shall be deemed to mean and include the filing of any document under the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder (collectively, the "Exchange Act") which is or is deemed to be incorporated by reference in the Registration Statement, a preliminary prospectus or the Prospectus, as the case may be, after the execution of this Agreement. On April 13, 2004, the Company mailed (the "Tender Offer and Consent Solicitation") an Offer to Purchase and Consent Solicitation Statement along with a Letter of Transmittal and Consent, thereby making a tender offer to purchase for cash all $150 million aggregate principal amount outstanding of the Company's 9% senior subordinated notes due 2007 (the "9% Notes") and a consent solicitation to the adoption of certain proposed amendments to the Indenture, dated August 26, 1997, as amended, among the Company, the guarantors party thereto and The Bank of New York, as trustee (the "1997 Indenture"). The Tender Offer and Consent Solicitation is conditioned upon closing of the Senior Subordinated Notes Offering. The closing of the Senior Subordinated Notes Offering is conditioned upon receipt of appropriate waivers and/or consents, which were received from the lenders party to the Revolving Credit Facility (as defined below) on April 7th, 2004 and from the lenders party to the Term Loan Agreement (as defined below) on April 6th, 2004 (collectively, the "Consents"). As described in the Prospectus, the proceeds from the offering of the Notes, together with cash in hand, will be used to finance the Tender Offer and Consent Solicitation, and pay related transaction fees and expenses. The consent solicitation relates to consents of the holders of the 9% Notes to amend the provisions of the 1997 Indenture. Upon receipt of the requisite consents (the "Requisite Consents"), the Company, the guarantors party thereto and the trustee will enter into a supplemental indenture (the "Supplemental Indenture") giving effect to the proposed amendments, which would eliminate substantially all of the restrictive covenants and certain other related provisions (including certain events of default of the 1997 Indenture). In the event that all of the outstanding 9% Notes are not tendered to the Company pursuant to the Tender Offer and Consent Solicitation, or the Tender Offer and Consent Solicitation is not consummated for any reason, the proceeds from the offering of the Notes not otherwise used in the Tender Offer and Consent Solicitation, together with cash on hand, will be used to redeem all of the $150 million aggregate principal amount of the 9% Notes that remain outstanding after the completion or termination of the Tender Offer and Consent Solicitation in accordance with the terms and conditions under the 1997 Indenture (the "Back-End Redemption") and to pay related redemption premiums and transaction fees and expenses. In the event of a Back-End Redemption, the Company will issue an irrevocable notice of such redemption of the 9% Notes (the "9% Notes Notice of 3 Redemption") promptly (but in any event within 2 business days) following expiration or termination of the Tender Offer and Consent Solicitation in accordance with the terms and conditions under the 1997 Indenture and in accordance with the terms contained in the Consents. Concurrently with this offering of Notes pursuant to this Agreement, the Company will issue and sell an aggregate of 3,000,000 shares (the "Firm Common Shares") of its common stock, par value $0.01 per share (the "Common Stock"), with an option granted to the underwriters in the offering to purchase up to an additional 450,000 shares (the "Optional Common Shares") of Common Stock, pursuant to a separate underwriting agreement dated the date hereof, among the Company and the underwriters thereto, some of whom are underwriters in this offering. The Firm Common Shares and, if and to the extent such option is exercised, the Optional Common Shares are collectively called the "Common Shares" and the offering of the Common Shares is hereinafter referred to as the "Common Shares Offering". The proceeds from the Common Shares Offering will be used to redeem a portion of the aggregate outstanding principal amount of the Company's 11% senior subordinated notes due 2012 (the "11% Notes") in accordance with the terms and conditions under the Indenture, dated as of May 14, 2002, as amended, among the Company, the guarantors party thereto and The Bank of New York, as trustee (the "2002 Indenture"), and pay related redemption premiums and transaction fees and expenses. The Company will issue an irrevocable notice of such redemption of the 11% Notes (the "11% Notes Notice of Redemption") on the closing date of the Common Shares Offering in accordance with the terms and conditions under the 2002 Indenture. Prior to the date hereof, the Company has given notice to the lenders under the Term Loan Agreement (as defined below) to prepay the remaining amounts outstanding under the Term Loan Agreement in July 2004 (the "Term Loan Agreement Notice"). The Common Shares Offering, the 11% Notes Notice of Redemption and the prepayment of the Term Loan Agreement in July 2004 are herein collectively referred to as the "Related Transactions". The Company hereby confirms its respective agreements with the Underwriters as follows: SECTION 1. REPRESENTATIONS AND WARRANTIES. The Company and each Subsidiary Guarantor jointly and severally hereby represent, warrant and covenant to each Underwriter as follows: (a) Compliance with Registration Requirements. The Company meets the requirements for use of Form S-3 under the Securities Act. The Registration Statement has been declared effective by the Commission under the Securities Act. No stop order suspending the effectiveness of the Registration Statement is in effect and no proceedings for such purpose have been instituted or are pending or, to the knowledge of the Company, have been threatened by the Commission. Each preliminary prospectus and the prospectus filed as part of the Registration Statement as originally filed or as part of any amendment thereto, or filed pursuant to Rule 424 under the Securities Act, complied when so filed in all material respects with the Securities Act and each preliminary prospectus and the Prospectus delivered to the Underwriter for use in connection with the offer and sale of the Notes will, at the time of such delivery, be identical to any copies filed by electronic transmission pursuant to EDGAR (except as may be permitted by Regulation S-T under the Securities Act). The Registration Statement and any post-effective amendment thereto, at the time it 4 became effective and at all subsequent times through the end of the Prospectus Delivery Period (as hereinafter defined), complied and will comply in all material respects with the Securities Act and did not and will not contain any 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. The Prospectus, as amended or supplemented, as of its date and at all subsequent times through the end of the Prospectus Delivery Period, did not and will not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. The representations and warranties set forth in the two immediately preceding sentences do not apply to statements in or omissions from the Registration Statement, or any post-effective amendment thereto, or the Prospectus, or any amendments or supplements thereto, made in reliance upon and in conformity with information relating to any Underwriter furnished to the Company in writing by or on behalf of the Representatives expressly for use therein. There are no contracts or other documents required to be described in the Prospectus or to be filed as exhibits to the Registration Statement that have not been described or filed as required. (b) Exchange Act Compliance. The documents incorporated or deemed to be incorporated by reference in the Registration Statement and Prospectus, at the time they were or hereafter are filed with the Commission, complied and will comply in all material respects with the requirements of the Exchange Act, and, when read together with the other information in the Prospectus, at the time the Registration Statement became effective and at the Closing Date 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, in the light of the circumstances under which they were made, not misleading. (c) Offering Materials Furnished to Underwriters. The Company has delivered to the Representatives one complete manually signed copy of the Registration Statement and of each consent and certificate of experts filed as a part thereof. (d) Distribution of Offering Material By the Company. The Company has not distributed and will not distribute, prior to the later of the Closing Date (as defined below) and the completion of the Underwriters' distribution of the Notes, any offering material in connection with the offering and sale of the Notes other than a preliminary prospectus, the Prospectus or the Registration Statement. (e) Authorization of the Underwriting Agreement. This Agreement has been duly authorized, executed and delivered by, and is a valid and binding agreement of, each Seller, enforceable in accordance with its terms, except as rights to indemnification hereunder may be limited by applicable law and except as the enforcement hereof may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws relating to or affecting the rights and remedies of creditors or by general equitable principles. (f) Authorization of the Indenture. The Indenture has been duly authorized by each Seller and will be qualified under the Trust Indenture Act of 1939, as amended ("the Trust Indenture Act"); on the Closing Date, the Indenture will have been duly executed and delivered by each Seller and, assuming due authorization, execution and delivery of the Indenture by the Trustee, will constitute a legally valid and binding agreement of each Seller enforceable against each Seller in accordance with its terms, except to the extent that the enforceability thereof may be limited by (i) bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer or other similar laws relating to creditors' rights generally and (ii) general principles of equity (regardless of whether such enforcement is considered in a proceeding in equity or at law) and an implied covenant of good faith and fair dealing. 5 (g) Authorization of the DTC Letter of Representations. The DTC Letter of Representations has been duly authorized by each Seller and, on the Closing Date, will have been duly executed and delivered by each Seller and will constitute a valid and legally binding agreement of each Seller, enforceable against each Seller in accordance with its terms, except to the extent that the enforceability thereof may be limited by (i) bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer or other similar laws relating to creditors' rights generally and (ii) general principles of equity (regardless of whether such enforcement is considered in a proceeding in equity or at law) and an implied covenant of good faith and fair dealing. (h) Authorization of the Notes. The Notes are in the form contemplated by the Indenture, have been duly authorized for issuance and sale as contemplated by this Agreement, the Indenture and the Prospectus and, on the Closing Date will have been duly executed by the Company and, when issued and authenticated in accordance with the terms of the Indenture, and delivered in the manner provided for in this Agreement against payment of the consideration therefor specified in the Prospectus, will constitute valid and legally binding obligations of the Company, enforceable against the Company in accordance with their terms, and will be entitled to the benefits of the Indenture, except to the extent that the enforceability thereof may be limited by (i) bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer or other similar laws relating to creditors' rights generally and (ii) general principles of equity (regardless of whether such enforcement is considered in a proceeding in equity or at law) and an implied covenant of good faith and fair dealing. (i) Authorization of the Guarantees of the Notes. The Guarantees of the Notes are in the respective forms contemplated by the Indenture, have been duly authorized for issuance as contemplated by this Agreement, the Indenture and the Prospecuts and, on the Closing Date will have been duly executed by each of the Subsidiary Guarantors and, when the Notes have been issued and authenticated in accordance with the terms of the Indenture and delivered against payment therefor, will constitute valid and legally binding obligations of the Subsidiary Guarantors, enforceable against each of the Subsidiary Guarantors in accordance with their terms, and will be entitled to the benefits of the Indenture, except to the extent that the enforceability thereof may be limited by (i) bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer or other similar laws relating to creditors' rights generally and (ii) general principles of equity (regardless of whether such enforcement is considered in a proceeding in equity or at law) and an implied covenant of good faith and fair dealing. (j) No Applicable Registration or Other Similar Rights. There are no persons with registration or other similar rights to have any equity or debt securities registered for sale under the Registration Statement or included in the offering contemplated by this Agreement or the concurrent Common Shares Offering. (k) No Material Adverse Change. Since the respective dates as of which information is given in the Prospectus, and except as otherwise stated therein, (i) there has been no material adverse change in the assets, liabilities, results of operations, condition (financial or otherwise), earnings, business affairs or prospects, whether or not arising from transactions in the ordinary course of business, of the Company and its subsidiaries, taken as a whole (any such change is called a "Material Adverse Change"), (ii) there has been no transaction entered into or material liability or obligation, direct, indirect or contingent, incurred by the Company or any subsidiary that is material to the Company and its subsidiaries, taken as a whole, and (iii) there has been no dividend declared, paid or made by the Company or, except for dividends paid to the Company or other subsidiaries, any of its subsidiaries on any class of its capital stock or repurchase or redemption by the Company or any of its subsidiaries of any class of capital stock. 6 (l) Independent Accountants. Deloitte & Touche LLP, the accountants who have audited and reported upon the financial statements of the Company and its subsidiaries and the related notes thereto, together with the supporting schedules filed with the Commission as part of the Registration Statement and included in the Prospectus, are independent public accountants with respect to the Company and its subsidiaries within the meaning of the Exchange Act. (m) Preparation of the Financial Statements. The financial statements of the Company and its consolidated subsidiaries and the related notes thereto filed with the Commission as a part of the Registration Statement and included in the Prospectus present fairly the consolidated financial position of the Company and its consolidated subsidiaries as of the dates indicated and the results of their operations for the periods specified; such financial statements have been prepared in conformity with generally accepted accounting principles applied on a consistent basis throughout the periods involved. No other financial statements or supporting schedules are required to be included in the Registration Statement. The historical financial data set forth in the Prospectus under the captions "Prospectus Supplement Summary - Summary Financial Data," "Selected Financial Data" and "Capitalization" fairly present the information set forth therein on a basis consistent with that of the audited financial statements contained in the Registration Statement. (n) Incorporation and Good Standing of the Company. The Company has been duly incorporated and is validly existing as a corporation in good standing under the laws of the State of Delaware, with full corporate power and authority to own, lease and operate its properties and conduct its business as presently conducted and as described in the Prospectus and to enter into and perform its obligations under each of this Agreement, the DTC Letter of Representations, the Securities and the Indenture and to consummate the Tender Offer and Consent Solicitation and/or the Back-End Redemption of the 9% Notes and to enter into and perform its obligations under the Related Transactions. The Company is duly qualified as a foreign corporation to transact business and is in good standing in each jurisdiction in which such qualification is required, whether by reason of the ownership or leasing of property or the conduct of business, except where the failure to so qualify would not, singly or in the aggregate, have a Material Adverse Effect on the Company and its subsidiaries, taken as a whole. As used herein, "Material Adverse Effect," with respect to any person, means a material adverse effect on the assets, liabilities, results of operations, condition (financial or otherwise), earnings, business affairs or prospects, whether or not arising from transactions in the ordinary course of business, of such person and its subsidiaries, taken as a whole. (o) Incorporation and Good Standing of the Subsidiary Guarantors. The Subsidiary Guarantors are the only direct or indirect subsidiaries, whether wholly or partially owned, of the Company, other than Navajo Convenient Stores Co., LLC. Each of the Subsidiary Guarantors has been duly incorporated and is validly existing as a corporation in good standing under the laws of the jurisdiction of its incorporation, has corporate power and authority to own, lease and operate its properties and conduct its business as presently conducted and as described in the Prospectus and to enter into and perform its obligations under each of this Agreement, the DTC Letter of Representations, the Securities and the Indenture and to consummate the Tender Offer and Consent Solicitation and/or the Back-End Redemption of the 9% Notes, to enter into and perform its obligations under the Related Transactions. Each of the Subsidiary Guarantors is duly qualified as a foreign corporation to transact business and is in good standing in each jurisdiction in which such qualification is required, whether by reason of the ownership or leasing of property or the conduct of business, except where the failure to so qualify would not, singly or in the aggregate, have a Material Adverse Effect on the Company. Except with respect to Navajo Convenient Store Co., LLC (which is a majority owned subsidiary), all the issued and outstanding capital stock of each such Subsidiary Guarantor has been duly authorized and validly issued, is fully paid and nonassessable and is owned by the Company or another Subsidiary Guarantor, free and clear of any security interest, mortgage, 7 pledge, lien, charge or other encumbrance (each, a "Lien"), except for the Liens under the (i) $100 million Second Amended and Restated Credit Agreement, dated as of May 14, 2002, among the Company, the lenders party thereto and Bank of America, N.A., as administrative agent and as letter of credit bank, as amended by the First Amendment to Second Amended and Restated Credit Agreement, dated October 28, 2002, the Second Amendment to Second Amended and Restated Credit Agreement, dated September 30, 2003, and the Third Amendment to Second Amended and Restated Credit Agreement, dated February 9, 2004 (collectively, the "Revolving Credit Facility"), and (ii) Loan Agreement, dated as of May 14, 2002, among Giant Yorktown, Inc., Banc of America Leasing & Capital, LLC, and Wells Fargo Bank Nevada, National Association, as collateral agent, as amended by the Amendment to Loan Agreement and Omnibus Amendment, dated as of May 22, 2002, the Second Amendment to Loan Agreement and Omnibus Amendment, dated as of October 28, 2002, the Third Amendment to Loan Agreement and Omnibus Amendment, dated as of December 20, 2002, and the Fourth Amendment to Loan Agreement and Omnibus Amendment, dated as of February 9, 2004 (collectively, the "Term Loan Agreement"). The Company does not own or control, directly or indirectly, any corporation, association or other entity other than the subsidiaries listed in Exhibit 21.1 to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2003. (p) Capitalization and Other Capital Stock Matters. The authorized, issued and outstanding capitalization is as set forth in the Prospectus under the caption "Capitalization". All the issued and outstanding shares of the capital stock of the Company have been duly authorized and validly issued and are fully paid and non-assessable and have been issued in compliance with Federal and State securities laws. None of the outstanding shares of Common Stock were issued in violation of any preemptive rights, rights of first refusal or other similar rights to subscribe for or purchase securities of the Company. There are no authorized or outstanding options, warrants, preemptive rights, rights of first refusal or other rights to purchase, or equity or debt securities convertible into or exchangeable or exercisable for, any capital stock of the Company or any of its subsidiaries other than those accurately described in the Prospectus. The description of the Company's stock option, stock bonus and other stock plans or arrangements, and the options or other rights granted thereunder, set forth in the Prospectus accurately and fairly presents the information required to be shown with respect to such plans, arrangements, options and rights under the Securities Act and Exchange Act. (q) Description of the Notes. The Notes, the Guarantees of the Notes and the Indenture will conform in all material respects to the respective statements thereto contained in the Prospectus. (r) Non-Contravention of Existing Instruments; No Further Authorizations or Approvals Required. No Seller is in violation of its charter or by-laws and no Seller is in default (or, with the giving of notice or lapse of time, would be in default) ("Default") in the performance or observance of any obligation, agreement, covenant or condition contained in any Contract (as defined below) or any applicable law, administrative regulation or administrative or court order or decree, except for such defaults as would not, singly or in the aggregate, have a Material Adverse Effect on the Company. The execution, delivery and performance by the Sellers of this Agreement, the DTC Letter of Representations and the Indenture and the issuance and delivery of the Securities and the consummation of the transactions contemplated herein and therein and in the Prospectus (including the consummation of the Tender Offer and Consent Solicitation and/or the Back-End Redemption the 9% Notes) and the Related Transactions have been duly authorized by all necessary corporate action and will not conflict with or constitute a breach of, or a Default or a Debt Repayment Triggering Event (as defined below) under, or the loss of any material benefit under, or the termination of, or result in the creation or imposition of any Lien upon any property or assets of any Seller pursuant to any contract, indenture, mortgage, loan agreement, note, lease, license or other instrument to which any Seller is a party or by which any of them may be bound (including, without limitation, the 2002 8 Indenture, the 1997 Indenture, the Revolving Credit Facility and the Term Loan Agreement or to which any of the property or assets of any of them is subject (each, a "Contract"), except for such conflicts, breaches, Defaults, losses or Liens as would not, singly or in the aggregate, have a Material Adverse Effect on the Company, nor will such action result in any violation of the provisions of the charter or bylaws of any Seller or any applicable law, administrative regulation or administrative or court order or decree applicable to any Seller. Except such as have been obtained by the Sellers and are in full force and effect under the Securities Act, applicable state securities or blue sky laws and from the New York Stock Exchange or the National Association of Securities Dealers, Inc. (the "NASD"), no consent, approval, authorization or order of, or notice to or filing with, any United States federal or state governmental or regulatory agency or body or any court of the United States or of any state thereof is required for each Seller's execution, delivery and performance of this Agreement, the DTC Letter of Representations or the Indenture or the issuance and delivery of the Securities, or consummation of the transactions contemplated herein and therein and in the Prospectus (including the consummation of the Tender Offer and Consent Solicitation and/or the Back-End Redemption of the 9% Notes) and the Related Transactions. As used herein, a "Debt Repayment Triggering Event" means any event or condition which gives, or with the giving of notice or lapse of time would give, the holder of any note, debenture or other evidence of indebtedness (or any person acting on such holder's behalf) the right to require the repurchase, redemption or repayment of all or a portion of such indebtedness by any Seller. (s) Required Consents. The Company has, on or prior to the date hereof, obtained the Consents to permit the consummation of the Senior Subordinated Notes Offering and such Consents continue to be in effect on the date hereof. (t) Supplemental Indenture. On or prior to the date hereof, the Supplemental Indenture has been duly authorized, executed and delivered by the Company and the guarantors party thereto, and (assuming due authorization, execution and delivery thereof by the trustee) the Supplemental Indenture, as well as the 1997 Indenture (as amended by the Supplemental Indenture) and the 9% Notes issued thereunder, will be the valid and legally binding obligations of the Company entitled, in the case of the 9% Notes, to the benefits of the 1997 Indenture (as amended by the Supplemental Indenture) and are enforceable against the Company in accordance with their respective terms, except as enforcement thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or other laws relating to or affecting creditors' rights and remedies generally and general principles of equity (regardless of whether enforcement is sought in a proceeding at law or in equity). The Company has obtained the Requisite Consents of the holders of the Notes necessary to enter into the Supplemental Indenture. (u) Notice of Term Loan Prepayment. Prior to the date hereof, the Company has given the Term Loan Agreement Notice. (v) No Material Actions or Proceedings. Except as otherwise disclosed in the Prospectus, there is no action, suit or proceeding before or by any court or governmental agency or body now pending or, to the knowledge of any Seller, threatened against or affecting any Seller which, if adversely determined, would result in a Material Adverse Effect on the Company, or would prevent or hinder the consummation of all the transactions contemplated by this Agreement and in the Prospectus (including the consummation of the Tender Offer and Consent Solicitation and/or the Back-End Redemption of the 9% Notes) and the Related Transactions. (w) No Labor Disputes. No strike, work stoppage or other similar labor dispute with the employees of any Seller, or, to the knowledge of the Company, with the employees of any principal 9 supplier of any Seller, exists or, to the knowledge of the any Seller, is threatened, which would have a Material Adverse Effect on the Company. (x) Intellectual Property Rights. The Sellers own or possess sufficient trademarks, trade names, copyrights, licenses, approvals, trade secrets and other similar rights (collectively, "Intellectual Property Rights") reasonably necessary to conduct their businesses as now conducted; and the expected expiration of any of such Intellectual Property Rights would not result in a Material Adverse Effect on the Company. None of the Sellers has received any notice of infringement or conflict with asserted Intellectual Property Rights of others, which infringement or conflict, if the subject of an unfavorable decision, would result in a Material Adverse Effect on the Company. (y) All Necessary Permits, etc. The Sellers possess such certificates, authorizations or permits issued by the appropriate regulatory or other governmental agencies or bodies as are necessary to conduct the business as now conducted by the Sellers and as described in the Prospectus, each such certificate, authorization and permit being in full force and effect and each Seller is in compliance with the terms of each such certificate, authorization and permit, except where the failure to possess or comply with any such certificate, authorization or permit would not, singly or in the aggregate, have a Material Adverse Effect on the Company; and neither the Company nor any Subsidiary Guarantor has received any notice of proceedings relating to the revocation or modification of, or non-compliance with, any such certificate, authorization or permit which, singly or in the aggregate, if the subject of an unfavorable decision, ruling or finding, would have a Material Adverse Effect on the Company. (z) Title to Properties. Each Seller has good and marketable title to all the properties and assets reflected as owned in the financial statements of the Company and its consolidated subsidiaries referred to in Section 1(o) above (or elsewhere in the Prospectus) free and clear of any Liens, except for the Liens under the Revolving Credit Facility and the Term Loan Agreement and such as do not materially and adversely affect the value of such property and do not materially interfere with the use made or proposed to be made of such property by such Seller. The real property, improvements, equipment and personal property held under lease by such Seller are held under valid and enforceable leases, with such exceptions as are not material and do not materially interfere with the use made or proposed to be made of such real property, improvements, equipment or personal property by such Seller. (aa) Tax Law Compliance. All necessary federal, state and foreign income and franchise tax returns required to be filed by any Seller have been filed, other than those filings being contested in good faith, and all material taxes, including withholding taxes, penalties and interest, assessments, fees and other charges due or claimed to be due from such entities have been paid, other than those being contested in good faith and for which adequate reserves have been provided or those currently payable without penalty or interest. The Company has made adequate charges, accruals and reserves in the applicable financial statements referred to in Section 1(j) above in respect of all federal, state and foreign income and franchise taxes for all periods as to which the tax liability of any Seller has not been finally determined. (bb) Company Not an "Investment Company". The Company is not and will not after receipt of payment for the Securities and the Senior Subordinated Notes in the concurrent Senior Subordinated Notes Offering be (i) an "investment company" or a company "controlled" by an investment company within the meaning of the United States Investment Company Act of 1940, as amended, (ii) a "holding company" or a "subsidiary company" of a holding company or an "affiliate" thereof within the meaning of the United States Public Utility Holding Company Act of 1935, as amended, or (iii) 10 subject to regulation under the United States Federal Power Act or any federal or state statute or regulation limiting its ability to incur indebtedness for borrowed money. (cc) Insurance. Except as otherwise disclosed in the Prospectus, each of the Sellers is insured by recognized, financially sound institutions with policies in such amounts and with such deductibles and covering such risks as are generally deemed adequate and customary for its business including, but not limited to, policies covering real and personal property owned or leased by such Seller against theft, damage, destruction, acts of vandalism and earthquakes. Except as disclosed in the Prospectus, none of the Sellers has any reason to believe that it will not be able (i) to renew its existing insurance coverage as and when such policies expire or (ii) to obtain comparable coverage from similar institutions as may be necessary or appropriate to conduct its business as now conducted and at a cost that would not result in a Material Adverse Effect on the Company, as the case may be. None of the Sellers has been denied any insurance coverage which it has sought or for which it has applied. (dd) No Mandatory Redemption. Except as otherwise disclosed in the Prospectus, the Company is not actively considering any plan or transaction that, if consummated, would result in any mandatory requirement to redeem, or make an offer to purchase, any securities of the Company pursuant to the terms thereof. (ee) Solvency. Each of the Sellers is, and immediately after the Closing Date (after giving effect to the sale of the Securities and the application of the proceeds therefrom, and the Related Transactions), will be, Solvent. As used herein, the term "Solvent" means, with respect to any Seller on a particular date, that on such date the fair market value of the assets of such Seller is greater than the total amount of liabilities (including contingent liabilities) of such Seller, (ii) the present fair salable value of the assets of such Seller is greater than the amount that will be required to pay the probable liabilities of such Seller on its debts as they become absolute and matured, (iii) such Seller is able to realize upon its assets and pay its debts and other liabilities, including contingent obligations, as they mature and (iv) such Seller does not have unreasonably small capital. (ff) No Price Stabilization or Manipulation. The Company has not taken and will not take, directly or indirectly, any action designed to or that might be reasonably expected to cause or result in stabilization or manipulation of the price of Securities to facilitate the sale or resale of the Securities. (gg) Related Party Transactions. There are no business relationships or related-party transactions involving the Sellers or any other person required to be described in the Prospectus which have not been described as required. (hh) No Unlawful Contributions or Other Payments. None of the Sellers nor, to the knowledge of the senior management of the Company, any employee or agent of any Seller, has, at any time during the last five years, made any contribution or other payment to any official of, or candidate for, any federal, state or foreign office in violation of any law where such violation would result in a Material Adverse Change or be of the character required to be disclosed in the Prospectus. (ii) Company's Accounting System. Except as otherwise disclosed in the Prospectus, the Company maintains a system of accounting controls sufficient to provide reasonable assurances that (i) transactions are executed in accordance with management's general or specific authorization; (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with generally accepted accounting principles and to maintain accountability for assets; (iii) access to assets is permitted only in accordance with management's general or specific authorization; and (iv) the recorded accountability for assets is compared with existing assets at reasonable intervals and appropriate action is taken with respect to any differences. 11 (jj) Compliance with Environmental Laws. Except as otherwise disclosed in the Prospectus or as would not, singly or in the aggregate, result in a Material Adverse Effect on the Company, as the case may be, (i) none of the Sellers is in violation of any federal, state, local or foreign law or regulation relating to pollution or protection of human health or the environment (including, without limitation, ambient air, surface water, groundwater, land surface or subsurface strata) or wildlife, including, without limitation, laws and regulations relating to emissions, discharges, releases or threatened releases of chemicals, pollutants, contaminants, wastes, toxic substances, hazardous substances, petroleum and petroleum products (collectively, "Materials of Environmental Concern"), or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of Materials of Environmental Concern (collectively, "Environmental Laws"), which violation includes, but is not limited to, noncompliance with any permits or other governmental authorizations required for the operation of the business of any Seller under applicable Environmental Laws, or noncompliance with the terms and conditions thereof, nor has any Seller received any written communication, whether from a governmental authority, citizens group, employee or otherwise, that alleges that such Seller is in violation of any Environmental Law; (ii) there is no claim, action or cause of action filed with a court or governmental authority, nor investigation with respect to which any Seller has received written notice, and no written notice by any person or entity alleging potential liability for investigatory costs, cleanup costs, governmental responses costs, natural resources damages, property damages, personal injuries, attorneys' fees or penalties arising out of, based on or resulting from the presence, or release into the environment, of any Material of Environmental Concern at any location owned, leased or operated by such Seller, now or in the past (collectively, "Environmental Claims"), pending, or, to the best of such Seller's knowledge, threatened or contemplated against such Seller or any of its subsidiaries or any person or entity whose liability for any Environmental Claim such Seller has retained or assumed either contractually or by operation of law; and (iii) to the best of such Seller's knowledge, there are no past or present actions, activities, circumstances, conditions, events or incidents, including, without limitation, the release, emission, discharge, presence or disposal of any Material of Environmental Concern, that reasonably could result in a violation of any Environmental Law or form the basis of a potential Environmental Claim against such Seller or against any person or entity whose liability for any Environmental Claim such Seller has retained or assumed either contractually or by operation of law. (kk) Periodic Review of Costs of Environmental Compliance. In the ordinary course of its business, the Sellers conduct a periodic review of the effect of Environmental Laws on its business, operations and properties, in the course of which it identifies and evaluates associated costs and liabilities (including, without limitation, any capital or operating expenditures required for clean-up, closure of properties or compliance with Environmental Laws or any permit, license or approval, any related constraints on operating activities and any potential liabilities to third parties). On the basis of such review and the amount of its established reserves, the Sellers have reasonably concluded that such associated costs and liabilities would not, singly or in the aggregate, result in a Material Adverse Effect on the Company, except as otherwise disclosed in the Prospectus. (ll) ERISA Compliance. The Sellers and any "employee benefit plan" (as defined under the Employee Retirement Income Security Act of 1974, as amended, and the regulations and published interpretations thereunder (collectively, "ERISA")) established or maintained by any Seller or their "ERISA Affiliates" (as defined below) are and will be in compliance in all material respects with ERISA. "ERISA Affiliate" means, with respect to any Seller, any member of any group of organizations described in Section 414(b), (c), (m) or (o) of the Internal Revenue Code of 1986, as amended, and the regulations and published interpretations thereunder (the "Code") of which such Seller is a member. No "reportable event" (as defined under ERISA and for which notice has not been waived by applicable regulations) has occurred or is reasonably expected to occur with respect to any "employee benefit plan" established or maintained by any Seller or any of their ERISA 12 Affiliates. No "employee benefit plan" established or maintained by any Seller or any of their ERISA Affiliates, if such "employee benefit plan" were terminated, would have any "amount of unfunded benefit liabilities" (as defined in Title IV of ERISA), except that, in the case of the Giant Yorktown Cash Balance Plan, the amount of such unfunded benefit liabilities, if any, would not have a Material Adverse Effect on the Company. None of the Sellers or any of their ERISA Affiliates has incurred or reasonably expects to incur any liability under (i) Title IV of ERISA with respect to termination of, or withdrawal from, any "employee benefit plan" or (ii) Sections 412, 4971, 4975 or 4980B of the Code. Each "employee benefit plan" established or maintained by any Seller or any of their ERISA Affiliates that is intended to be qualified under Section 401 of the Code is and will be so qualified and, to the best of the Sellers' knowledge, nothing has occurred, whether by action or failure to act, which would cause the loss of such qualification. (mm) Brokers. There is no broker, finder or other party that is entitled to receive from the Company any brokerage or finder's fee or other fee or commission as a result of any transactions contemplated by this Agreement, except as provided in this Agreement. (nn) No Outstanding Loans or Other Indebtedness. Except as otherwise disclosed in the Prospectus, there are no outstanding loans, advances (except normal advances for business expenses in the ordinary course of business) or guarantees of indebtedness by the Company to or for the benefit of any of the officers or directors of the Company. (oo) Compliance with Laws. The Company has not been advised, and has no reason to believe, that it and each of its subsidiaries are not conducting business in compliance with all applicable laws, rules and regulations of the jurisdictions in which it is conducting business, except as otherwise disclosed in the Prospectus or except where failure to be so in compliance would not result in a Material Adverse Change. (pp) No Event of Default. No event of default exists under any contract, indenture, mortgage, loan agreement, note, lease or other agreement or instrument constituting Senior Indebtedness (as defined in the 2002 Indenture). (qq) Disclosure Controls and Procedures. The Company has established and maintains disclosure controls and procedures (as such term is defined in Rule 13a-14 under the Exchange Act), which (i) are designed to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to the Company's principal executive officer and itssac principal financial officer by others within those entities, particularly during the periods in which the periodic reports required under the Exchange Act are being prepared, (ii) have been evaluated for effectiveness as of a date within 90 days prior to the filing of the Company's most recent annual or quarterly report filed with the Commission and (iii) are effective in all material respects to perform the functions for which they were established. Based on the evaluation of the Company's disclosure controls and procedures described above, the Company is not aware of (a) any significant deficiency in the design or operation of internal controls which could adversely affect the Company's ability to record, process, summarize and report financial data or any material weaknesses in internal controls or (b) any fraud, whether or not material, that involves management or other employees who have a significant role in the Company's internal controls. Since the most recent evaluation of the Company's disclosure controls and procedures described above, there have been no significant changes in internal controls or in other factors that could significantly affect internal controls. Any certificate signed by an officer of the Company and delivered to the Representatives or to counsel for the Underwriters shall be deemed to be a representation and warranty by the Company to each Underwriter as to the matters set forth therein. 13 The Company acknowledges that the Underwriters and, for purposes of the opinions to be delivered pursuant to Section 5 hereof, counsel to the Company and counsel to the Underwriters, will rely upon the accuracy and truthfulness of the foregoing representations and hereby consents to such reliance. SECTION 2. PURCHASE, SALE AND DELIVERY OF THE SECURITIES. The Securities. Upon the terms herein set forth, the Sellers agree to issue and sell to the several Underwriters an aggregate of $150,000,000 Securities. On the basis of the representations, warranties and agreements herein contained, and upon the terms but subject to the conditions herein set forth, the Underwriters agree, severally and not jointly, to purchase from the Company the respective number of Securities set forth opposite their names on Schedule A. The purchase price of the Securities to be paid by the several Underwriters to the Company shall be [________]% of the aggregate principal amount of the Securities. (a) The Closing Date. Delivery of certificates for the Securities to be purchased by the Underwriters and payment therefor shall be made at the offices of Shearman & Sterling LLP, 599 Lexington Avenue, New York, New York 10022 (or such other place as may be agreed to by the Company and the Representatives) at 9:00 a.m. New York time, on May [__], 2004 or such other time and date as the Representatives and the Company shall agree (the time and date of such closing are called the "Closing Date"). (b) Public Offering of the Securities. The Representatives hereby advise the Company that the Underwriters intend to offer for sale to the public, as described in the Prospectus, their respective portions of the Securities as soon after this Agreement has been executed and the Registration Statement has been declared effective as the Representatives, in their sole judgment, have determined is advisable and practicable. (c) Payment for the Securities. Payment for the Securities to be sold by the Company shall be made at the Closing Date by wire transfer of immediately available funds to the order of the Company. It is understood that the Representatives have been authorized, for their own account and the accounts of the several Underwriters, to accept delivery of and receipt for, and make payment of the purchase price for, the Securities the Underwriters have agreed to purchase. BAS, individually and not as a Representative of the Underwriters, may (but shall not be obligated to) make payment for any Securities to be purchased by any Underwriter whose funds shall not have been received by the Representatives by the Closing Date for the account of such Underwriter, but any such payment shall not relieve such Underwriter from any of its obligations under this Agreement. (d) Delivery of the Securities. The Company shall deliver, or cause to be delivered, to the Representatives for the accounts of the several Underwriters certificates for the Securities to be sold by them at the Closing Date, against the irrevocable release of a wire transfer of immediately available funds for the amount of the purchase price therefor. The certificates for the Securities shall be in definitive form and registered in such names and denominations as the Representatives shall have requested at least two full business days prior to the Closing Date and shall be made available for inspection on the business day preceding the Closing Date at a location in New York City as the Representatives may designate. Time shall be of the essence, and delivery at the time and place specified in this Agreement is a further condition to the obligations of the Underwriters. 14 (e) Delivery of Prospectus to the Underwriters. Not later than 12:00 p.m. on the second business day following the date the Securities are first released by the Underwriters for sale to the public, the Company shall deliver or cause to be delivered, copies of the Prospectus in such quantities and at such places as the Representatives shall request. SECTION 3. ADDITIONAL COVENANTS OF THE COMPANY. The Company and each Subsidiary Guarantor jointly and severally further covenant and agree with each Underwriter as follows: (a) Representatives' Review of Proposed Amendments and Supplements. During such period beginning on the date hereof and ending on the later of the Closing Date or such date, as in the opinion of counsel for the Underwriters, the Prospectus is no longer required by law to be delivered in connection with sales by an Underwriter or dealer (the "Prospectus Delivery Period"), prior to amending or supplementing the Registration Statement (including any registration statement filed under Rule 462(b) under the Securities Act) or the Prospectus, the Company shall furnish to the Representatives for review a copy of each such proposed amendment or supplement, and the Company shall not file any such proposed amendment or supplement to which the Representatives or their counsel reasonably object. (b) Securities Act Compliance. After the date of this Agreement, the Company shall promptly advise the Representatives in writing (i) of the receipt of any comments of, or requests for additional or supplemental information from, the Commission, (ii) of the time and date of any filing of any post-effective amendment to the Registration Statement or any amendment or supplement to any preliminary prospectus or the Prospectus, (iii) of the time and date that any post-effective amendment to the Registration Statement becomes effective and (iv) of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement or any post-effective amendment thereto or of any order preventing or suspending the use of any preliminary prospectus or the Prospectus, or of any proceedings to remove, suspend or terminate from listing or quotation the Common Stock from any securities exchange upon which it is listed for trading or included or designated for quotation, or of the threatening or initiation of any proceedings for any of such purposes. If the Commission shall enter any such stop order at any time, the Company will use its best efforts to obtain the lifting of such order at the earliest possible moment. Additionally, the Company agrees that it shall comply with the provisions of Rules 424(b), 430A and 434, as applicable, under the Securities Act and will use its reasonable efforts to confirm that any filings made by the Company under such Rule 424(b) were received in a timely manner by the Commission. (c) Notification of Breach of this Agreement. The Sellers shall comply with the terms of the Indenture and the Prospectus and shall promptly notify the Representatives if any of the Sellers discovers that any of its representations contained in this Agreement is not, at any time prior to the completion of the distribution of the Securities, true and correct, or if any of the Sellers has at any such time breached any of its obligations hereunder. (d) Amendments and Supplements to the Prospectus and Other Securities Act Matters. If, during the Prospectus Delivery Period, any event shall occur or condition exist as a result of which it is necessary to amend or supplement the Prospectus in order to make the statements therein, in the light of the circumstances when the Prospectus is delivered to a purchaser, not misleading, or if in the opinion of the Representatives or counsel for the Underwriters it is otherwise necessary to amend or supplement the Prospectus to comply with law, the Company agrees to promptly prepare (subject to Section 3(A)(a) hereof), file with the Commission and furnish at its own expense to the Underwriters and to dealers, amendments or supplements to the Prospectus so that the statements in the Prospectus 15 as so amended or supplemented will not, in the light of the circumstances when the Prospectus is delivered to a purchaser, be misleading or so that the Prospectus, as amended or supplemented, will comply with law. (e) Copies of any Amendments and Supplements to the Prospectus. The Company agrees to furnish the Representatives, without charge, during the Prospectus Delivery Period, as many copies of the Prospectus and any amendments and supplements thereto (including any documents incorporated or deemed incorporated by reference therein) as the Representatives may reasonably request. (f) Blue Sky Compliance. The Sellers shall cooperate with the Representatives and counsel for the Underwriters to qualify or register the Securities for sale under (or obtain exemptions from the application of) the state securities or Blue Sky laws of those jurisdictions designated by the Representatives, shall comply with such laws and shall continue such qualifications, registrations and exemptions in effect so long as required for the distribution of the Securities. The Sellers shall not be required to qualify as foreign corporations or to take any action that would subject them to general service of process in any such jurisdiction where they are not presently qualified or where they would be subject to taxation as foreign corporations. The Sellers will advise the Representatives promptly of the suspension of the qualification or registration of (or any such exemption relating to) the Securities for offering, sale or trading in any jurisdiction or any initiation or threat of any proceeding for any such purpose, and in the event of the issuance of any order suspending such qualification, registration or exemption, the Sellers shall use their best efforts to obtain the withdrawal thereof at the earliest possible moment. (g) DTC Eligibility. The Sellers shall use their best efforts to assist the Representatives in arranging to cause the Securities to be eligible for settlement through the facilities of DTC. (h) Clearstream and Euroclear Eligibility. The Sellers shall, if requested by the Representatives, use their best efforts to cause the Securities to be eligible for settlement through the facilities of Clearstream, societe anonyme ("Clearstream"), and the Euroclear System ("Euroclear"). (i) Use of Proceeds. The Company shall apply the net proceeds from the sale of the Securities sold by it and, if completed, the net proceeds of the Common Shares Offering in the manner described under the caption "Use of Proceeds" in the Prospectus. (j) Earnings Statement. As soon as practicable, the Company will make generally available to its security holders and to the Representatives an earnings statement (which need not be audited) covering the twelve-month period ending June 30, 2004 that satisfies the provisions of Section 11(a) of the Securities Act. (k) Periodic Reporting Obligations. During the Prospectus Delivery Period the Company shall file, on a timely basis, with the Commission and the New York Stock Exchange all reports and documents required to be filed under the Exchange Act. (l) Company to Provide Interim Financial Statements. Prior to the Closing Date, the Company will furnish the Underwriters, as soon as they have been prepared by or are available to the Company, a copy of any unaudited interim financial statements of the Company for any period subsequent to the period covered by the most recent financial statements appearing in the Registration Statement and the Prospectus. (m) Agreement Not to Offer or Sell Additional Securities. During the period commencing on the date hereof and ending on the 180th day following the date of the Prospectus, the Company will not, 16 without the prior written consent of BAS (which consent may be withheld at the sole discretion of BAS), directly or indirectly, sell, offer, contract or grant any option to sell, pledge, transfer or establish an open "put equivalent position" within the meaning of Rule 16a-1(h) under the Exchange Act, or otherwise dispose of or transfer, or announce the offering of, or file any registration statement under the Securities Act in respect of, any debt securities of the Company similar to the Securities or securities exchangeable for or convertible into any debt securities of the Company similar to the Securities (other than as contemplated by this Agreement); Notwithstanding the foregoing, if (x) during the last 17 days of the 180-day restricted period the Company issues an earnings release or material news or a material event relating to the Company occurs; or (y) prior to the expiration of the 180-day restricted period, the Company announces that it will release earnings results during the 16-day period beginning on the last day of the 180-day period; the restrictions imposed in this clause (m) shall continue to apply until the expiration of the 18-day period beginning on the issuance of the earnings release or the occurrence of the material news or material event; provided however, that this sentence shall not apply if the research published or distributed on the Company is compliant under Rule 139 of the Securities Act and the Company's securities are actively traded as defined in Rule 101(c)(1) of Regulation M of the Exchange Act. (n) Future Reports to the Representatives. During the period of three years hereafter the Company will furnish to the Representatives at 700 Louisiana, 8th Floor, Houston, Texas 77002-2700, Attention: Scott Warrander: (i) as soon as practicable after the end of each fiscal year, copies of the Annual Report of the Company containing the balance sheet of the Company as of the close of such fiscal year and statements of income, stockholders' equity and cash flows for the year then ended and the opinion thereon of the Company's independent public or certified public accountants; (ii) as soon as practicable after the filing thereof, copies of each proxy statement, Annual Report on Form 10-K, Quarterly Report on Form 10-Q, Current Report on Form 8-K or other report filed by the Company with the Commission, the NASD or any securities exchange; and (iii) as soon as available, copies of any report or communication of the Company mailed generally to holders of its capital stock. (o) Investment Limitation. The Sellers shall not invest, or otherwise use the proceeds received by the Company from its sale of the Securities in such a manner as would require the any of the Sellers to register as an investment company under the Investment Company Act. (p) No Manipulation of Price. Neither the Company nor any of its affiliates will take, directly or indirectly, any action designed to or which constitutes or which might reasonably be expected to cause or result in stabilization or manipulation of the price of the Securities of the Company at any time prior to the Representatives notifying the Company of the completion of the distribution of the Securities. (q) Existing Lock-Up Agreement. The Company will enforce all existing agreements between the Company and any of its security holders that prohibit the sale, transfer, assignment, pledge or hypothecation of any of the Company's securities in connection with a public offering by the Company. In addition, the Company will direct the transfer agent to place stop transfer restrictions upon any such securities of the Company that are bound by such existing "lock-up" agreements for the duration of the periods contemplated in such agreements. (r) Compliance with Consents The Company will comply with the terms of the Consents, including the conditions with respect to the use of the proceeds from the sale of the Securities as contemplated herein and in the Prospectus. 17 (s) Notice of Redemption for 9% Notes Promptly (but in any event within 2 business days) following the expiration or termination of the Tender Offer and Consent Solicitation, the Company will give the 9% Notes Notice of Redemption for the redemption of the 9% Notes in accordance with the terms and conditions under the 1997 Indenture and in accordance with the terms contained in the Consents. SECTION 4. PAYMENT OF EXPENSES. The Sellers jointly and severally agree to pay all costs, fees and expenses incurred in connection with the performance of its obligations hereunder and in connection with the transactions contemplated hereby, including without limitation (i) all expenses incident to the issuance and delivery of the Securities (including all printing and engraving costs), (ii) all necessary issue, transfer and other stamp taxes in connection with the issuance and sale of the Securities to the Underwriters, (iii) all fees and expenses of the Sellers' respective counsel, independent public or certified public accountants and other advisors, (iv) all costs and expenses incurred in connection with the preparation, printing, filing, shipping and distribution of the Registration Statement (including financial statements and exhibits), each preliminary prospectus and the Prospectus, and all amendments and supplements thereto, this Agreement, the Indenture, the DTC Letter of Representations, and the Notes and the Guarantees of the Notes, (v) all filing fees, attorneys' fees and expenses incurred by the Sellers or the Underwriters in connection with qualifying or registering (or obtaining exemptions from the qualification or registration of) all or any part of the Securities for offer and sale under the state securities or Blue Sky laws, and, if requested by the Representatives, preparing and printing a "Blue Sky Survey" or memorandum, and any supplements thereto, advising the Underwriters of such qualifications, registrations and exemptions, (vi) the fees and expenses of the Trustee, including the fees and disbursements of counsel for Trustee in connection with the Indenture and the Securities, (vii) any fees payable in connection with the rating of the Securities with the rating agencies, (viii) any filing fees incident to, and any reasonable fees and disbursements of counsel for the Underwriters in connection with, the NASD's review and approval of the Underwriters' participation in the offering and distribution of the Securities, (ix) all fees and expenses (including reasonable fees and expenses of counsel) of the Sellers in connection with approval of the Securities by the DTC for "book-entry" transfer, and the performance by the Sellers of their respective other obligations under this Agreement, and (x) all other fees, costs and expenses referred to in Item 14 of Part II of the Registration Statement. Except as provided in clauses (xi) and (vii) of this Section 4, Section 6, Section 8 and Section 9 hereof, the Underwriters shall pay their own expenses, including the fees and disbursements of their counsel. SECTION 5. CONDITIONS TO OBLIGATIONS OF THE UNDERWRITERS The obligations of the several Underwriters to purchase and pay for the Securities as provided herein on the Closing Date shall be subject to the accuracy of the representations and warranties on the part of the Sellers set forth in Section 1 hereof as of the date hereof and as of the Closing Date as though then made to the timely performance by the Sellers of their respective covenants and other obligations hereunder, and to each of the following additional conditions: (a) No Untrue Statements; Inadvisable to Proceed. The Representatives shall not have disclosed to the Company on or prior to the Closing Date that the Prospectus contains an untrue statement of a fact which, in the reasonable opinion of the Representatives, is material or omits to state a fact which, in the reasonable opinion of the Representatives, is material and is necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; the Company shall not have prepared and distributed any amendment or supplement to the Prospectus either without prior review by, or over the reasonable objection of, the Representatives; and no 18 change shall have occurred under the Securities Act which in the reasonable judgment of the Representatives makes it impracticable or inadvisable to proceed with the purchase, sale and delivery of the Securities on the terms and in the manner contemplated in the Prospectus. (b) Corporate Proceedings. All corporate proceedings and other legal matters incident to the authorization, form and validity of this Agreement, the DTC Letter of Representations, the Indenture, the Notes, Guarantees of the Notes, the Prospectus and all other legal matters relating to this Agreement and the transactions contemplated hereby and thereby (including the Tender Offer and Consent Solicitation and/or the Back-End Redemption of the 9% Notes) shall be reasonably satisfactory in all respects to the Representatives and their counsel, and the each Seller shall have furnished to the Representatives all documents and information that they may reasonably request to enable them to pass upon such matters. (c) Resolutions. Each Seller shall have delivered to the Representatives a certified copy of the resolutions of the Board of Directors (or any authorized committee thereof, together with the resolutions of the Board of Directors establishing such committee) of each Seller approving the issuance of the Notes and the Guarantees of the Notes, respectively, on the terms and conditions of the Indenture and this Agreement and approving the terms hereof and authorizing the execution and delivery of this Agreement, the DTC Letter of Representations, the Indenture, the Notes and the Guarantees of the Notes, and all other documents relevant to the issue of the Securities by such Seller (including the Tender Offer and Consent Solicitation and/or the Back-End Redemption of the 9% Notes). (d) Accountant's Comfort Letter. The Company shall have furnished to the Representatives on the date hereof a letter of Deloitte & Touche LLP, independent public accountants for the Company, addressed to the Underwriters and dated the date hereof, in form and substance reasonably satisfactory to the Representatives, containing statements and information of the type ordinarily included in accountant's "comfort letters" to initial purchasers, delivered according to Statement of Auditing Standards Nos. 72 and 76 (or any successor bulletins), with respect to the Company's audited financial statements and unaudited pro forma financial statements and certain financial information contained in the Registration Statement and the Prospectus (and the Representatives shall have received an additional two conformed copies of such accountants' letter for each of the several underwriters). (e) Bring-Down Comfort Letters. The Company shall have furnished to the Representatives on the Closing Date, a letter of Deloitte & Touche LLP, independent public accountants for the Company, addressed to the Representatives and dated as of the Closing Date, in form and substance reasonably satisfactory to the Representatives, to the effect that they reaffirm the statements made in the letter furnished by them pursuant to Section 5(d), except that the specified date referred to therein for the carrying out of procedures shall be no more than three business days prior to the Closing Date (and the Representatives shall have received an additional two conformed copies of such accountants' letter for each of the several underwriters). (f) Compliance with Registration Requirements; No Stop Order; No Objection from NASD. For the period from and after effectiveness of this Agreement and prior to the Closing Date: (i) the Company shall have filed the Prospectus with the Commission (including the information required by Rule 430A under the Securities Act) in the manner and within the time period required by Rule 424(b) under the Securities Act; or the Company shall have filed a post-effective amendment to the Registration Statement containing the information required by such Rule 430A, and such post-effective amendment shall have become effective; 19 or, if the Company elected to rely upon Rule 434 under the Securities Act and obtained the Representatives' consent thereto, the Company shall have filed a Term Sheet with the Commission in the manner and within the time period required by such Rule 424(b); (ii) no stop order suspending the effectiveness of the Registration Statement or any post-effective amendment to the Registration Statement, shall be in effect and no proceedings for such purpose shall have been instituted or threatened by the Commission; and (iii) the NASD shall have raised no objection to the fairness and reasonableness of the underwriting terms and arrangements. (g) No Material Adverse Change. For the period from and after the date of this Agreement and prior to the Closing Date, in the reasonable judgment of the Representatives, there shall not have occurred any Material Adverse Change. (h) Opinion of Counsel for the Company. On the Closing Date, the Representatives shall have received (i) the favorable opinion of Fennemore Craig, P.C., United States counsel for the Company, addressed to the Representatives and dated as of the Closing Date, the form of which is attached as Exhibit A, (ii) the favorable opinion of McGuire Woods, LLP, special counsel for the Company, addressed to the Representatives and dated as of the Closing Date, the form of which is attached as Exhibit B, (iii) the favorable opinion of Kim Bullerdick, Esq., the General Counsel of the Company, addressed to the Representatives and dated as of the Closing Date, the form of which is attached as Exhibit C, and (iv) the favorable opinion of Montgomery & Andrews, New Mexico counsel to the Company and Ciniza Production Company, Giant Stop-N-Go of New Mexico, Inc., San Juan Refining Company and Giant Pipeline Company (collectively, the "New Mexico Subsidiary Guarantors"), addressed to the Representatives and dated as of the Closing Date, the form of which is attached as Exhibit D (and the Representatives shall have received an additional two conformed copies of each such counsel's legal opinion for each of the several Underwriters). (i) Opinion of Counsel for the Underwriters. On the Closing Date, the Representatives shall have received the favorable opinion of Shearman & Sterling LLP, counsel for the Underwriters, dated as of the Closing Date, (and the Representatives shall have received an additional two conformed copies of such counsel's legal opinion for each of the several Underwriters) with respect to such matters as the Representatives may reasonably request. (j) Officers' Certificate. On the Closing Date the Representatives shall have received a written certificate from each Seller executed by the President or a Vice President and the principal financial or accounting officer of the Company, dated as of the Closing Date, to the effect set forth in subsection (f)(ii) of this Section 5, and further to the effect that: (i) for the period from and after the date of this Agreement and prior to the Closing Date, there has not occurred any Material Adverse Change; (ii) the representations, warranties and covenants of the Sellers set forth in Section 1 of this Agreement are true and correct with the same force and effect as though expressly made on and as of the Closing Date; (iii) the Sellers have has complied with all the agreements and satisfied all the conditions on their part to be performed or satisfied at or prior to the Closing Date; and 20 (iv) there shall not have occurred any downgrading, nor shall any notice have been given of any intended or potential downgrading or of any review for a possible change that does not indicate the direction of the possible change, in the rating accorded any securities of the Company or any of its subsidiaries by any "nationally recognized statistical rating organization" as such term is defined for purposes of Rule 436 under the Securities Act. (k) Officer's Certificate Related to Financial Covenants. The Company shall have furnished to the Representatives on the Closing Date a certificate, dated the Closing Date, of the principal financial or accounting officer of the Company stating that the Total Leverage Ratio, the Senior Leverage Ratio, the Minimum Consolidated Net Worth and the Minimum Fixed Charge Coverage Ratio (each as defined in the Revolving Credit Facility), based on the pro forma financial statements of the Company giving effect to the offering of the Securities and the Related Transactions prepared in accordance with the requirements of Regulation S-X under the Securities Act and all other accounting rules and regulations of the Commission promulgated thereunder, was not greater than the respective ratios set forth in the Revolving Credit Facility. (l) Other Certificates. The Sellers shall have furnished to the Representatives such further certificates and documents, including certificates of officers of the Subsidiary Guarantors, as the Representatives shall have reasonably requested. (m) Additional Documents. On or before the Closing Date, the Representatives and counsel for the Underwriters shall have received such information, documents and opinions as they may reasonably require for the purposes of enabling them to pass upon the issuance and sale of the Securities as contemplated herein, or in order to evidence the accuracy of any of the representations and warranties, or the satisfaction of any of the conditions or agreements, herein contained. (n) DTC Acceptance. The Securities shall have been accepted for (i) settlement through the facilities of DTC, and (ii) if applicable, settlement throughout the facilities of Clearstream and Euroclear. (o) Supplemental Indenture. The Supplemental Indenture shall have been executed and delivered by the parties thereto on or prior to the Closing Date. (p) Required Consents. The Consents referred to in Section 1(s) above shall remain in effect as of the Closing Date. There shall exist at and as of the Closing Date no condition that would constitute a Default under the Revolving Credit Facility or the Term Loan Agreement. (q) Deposit in redemption trust account. The Company shall deposit the net proceeds from the sale of the Securities sold by it into a trust account or otherwise apply such net proceeds on the Closing Date as required by the Consents. All opinions (other than the opinion set forth in Section 5(i) above), letters, evidences and certificates mentioned above or elsewhere in this Agreement shall be deemed to be in compliance with the provisions hereof only if they are in form and substance reasonably satisfactory to Shearman & Sterling LLP, counsel to the Underwriters. If any condition specified in this Section 5 is not satisfied when and as required to be satisfied, this Agreement may be terminated by the Representatives by notice to the Company at any time on or prior to the Closing Date, which termination shall be without liability on the part of any party to any other party, except that Section 4, Section 6, Section 8 and Section 9 shall at all times be effective and shall survive such termination. 21 SECTION 6. REIMBURSEMENT OF UNDERWRITERS' EXPENSES If this Agreement is terminated by the Representatives pursuant to Section 5, Section 7, Section 10 or Section 11, or if the sale to the Underwriters of the Securities on the Closing Date is not consummated because of any refusal, inability or failure on the part of the Company to perform any agreement herein or to comply with any provision hereof, the Company agrees to reimburse the Representatives and the other Underwriters (or such Underwriters as have terminated this Agreement with respect to themselves), severally, upon demand for all out-of-pocket expenses that shall have been reasonably incurred by the Representatives and the other Underwriters in connection with the proposed purchase and the offering and sale of the Securities, including but not limited to fees and disbursements of counsel, printing expenses, travel expenses, postage, facsimile and telephone charges. SECTION 7. EFFECTIVENESS OF THIS AGREEMENT. This Agreement shall not become effective until the execution of this Agreement by the parties hereto and (ii) notification by the Commission to the Company and the Representative of the effectiveness of the Registration Statement under the Securities Act. Prior to such effectiveness, this Agreement may be terminated by any party by notice to each of the other parties hereto, and any such termination shall be without liability on the part of (a) the Company to any Underwriter, except that the Company shall be obligated to reimburse the expenses of the Representative and the Underwriters pursuant to Sections 4 and 6 hereof, (b) of any Underwriter to the Company, or (c) of any party hereto to any other party except that the provisions of Section 8 and Section 9 shall at all times be effective and shall survive such termination. SECTION 8. INDEMNIFICATION. Indemnification of the Underwriters by the Company. The Sellers jointly and severally agree to indemnify and hold harmless each Underwriter, its directors, officers and employees, and each person, if any, who controls any Underwriter within the meaning of the Securities Act and the Exchange Act against any loss, claim, damage, liability or expense, as incurred, to which such Underwriter or such controlling person may become subject, under the Securities Act, the Exchange Act or other federal or state statutory law or regulation, or at common law or otherwise (including in settlement of any litigation, if such settlement is effected with the written consent any Seller), insofar as such loss, claim, damage, liability or expense (or actions in respect thereof as contemplated below) arises out of or is based (i) upon any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement, or any amendment thereto, including any information deemed to be a part thereof pursuant to Rule 430A or Rule 434 under the Securities Act, or the omission or alleged omission therefrom of a material fact required to be stated therein or necessary to make the statements therein not misleading; or (ii) upon any untrue statement or alleged untrue statement of a material fact contained in any preliminary prospectus or the Prospectus (or any amendment or supplement thereto) or the omission or alleged omission therefrom of a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; or (iii) in whole or in part upon any inaccuracy in the representations and warranties of the Sellers contained herein; or (iv) in whole or in part upon any failure of any Seller to perform its obligations hereunder or under law; and to reimburse each Underwriter and each such controlling person for any and all expenses (including the fees and disbursements of counsel chosen by BAS) as such expenses are reasonably incurred by such Underwriter or such controlling person in connection with investigating, defending, settling, compromising or paying any such loss, claim, damage, liability, expense or action; provided, 22 however, that the foregoing indemnity agreement shall not apply to any loss, claim, damage, liability or expense to the extent, but only to the extent, arising out of or based upon any untrue statement or alleged untrue statement or omission or alleged omission made in reliance upon and in conformity with written information furnished to the Company by the Representatives expressly for use in the Registration Statement, any preliminary prospectus or the Prospectus (or any amendment or supplement thereto). The indemnity agreement set forth in this Section 8(a) shall be in addition to any liabilities that the Company may otherwise have. (a) Indemnification of the Company, its Directors and Officers. Each Underwriter agrees, severally and not jointly, to indemnify and hold harmless each Seller, each of its directors, each of its officers who signed the Registration Statement and each person, if any, who controls such Seller within the meaning of the Securities Act or the Exchange Act, against any loss, claim, damage, liability or expense, as incurred, to which such Seller, or any such director, officer or controlling person may become subject, under the Securities Act, the Exchange Act, or other federal or state statutory law or regulation, or at common law or otherwise (including in settlement of any litigation, if such settlement is effected with the written consent of such Underwriter), insofar as such loss, claim, damage, liability or expense (or actions in respect thereof as contemplated below) arises out of or is based upon any untrue or alleged untrue statement of a material fact contained in the Registration Statement, any preliminary prospectus or the Prospectus (or any amendment or supplement thereto), or arises out of or is based upon the 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 each case to the extent, but only to the extent, that such untrue statement or alleged untrue statement or omission or alleged omission was made in the Registration Statement, any preliminary prospectus, the Prospectus (or any amendment or supplement thereto), in reliance upon and in conformity with written information furnished to the Company by the Representatives expressly for use therein; and to reimburse such Seller, or any such director, officer or controlling person for any legal and other expense reasonably incurred by such Seller, or any such director, officer or controlling person in connection with investigating, defending, settling, compromising or paying any such loss, claim, damage, liability, expense or action. Each Seller hereby acknowledges that the only information that the Underwriters have furnished to the Company expressly for use in the Registration Statement, any preliminary prospectus or the Prospectus (or any amendment or supplement thereto) are the statements set forth in the table in the first paragraph and as the third and seventh paragraphs under the caption "Underwriting" in the final prospectus supplement; and the Underwriters confirm that such statements are correct. The indemnity agreement set forth in this Section 8(b) shall be in addition to any liabilities that each Underwriter may otherwise have. (b) Notifications and Other Indemnification Procedures. Promptly after receipt by an indemnified party under this Section 8 of notice of the commencement of any action, such indemnified party will, if a claim in respect thereof is to be made against an indemnifying party under this Section 8, notify the indemnifying party in writing of the commencement thereof, but the omission so to notify the indemnifying party will not relieve it from any liability which it may have to any indemnified party for contribution or otherwise than under the indemnity agreement contained in this Section 8 or to the extent it is not prejudiced as a proximate result of such failure. In case any such action is brought against any indemnified party and such indemnified party seeks or intends to seek indemnity from an indemnifying party, the indemnifying party will be entitled to participate in, and, to the extent that it shall elect, jointly with all other indemnifying parties similarly notified, by written notice delivered to the indemnified party promptly after receiving the aforesaid notice from such indemnified party, to assume the defense thereof with counsel reasonably satisfactory to such indemnified party; provided, however, if the defendants in any such action include both the indemnified party and the indemnifying party and the 23 indemnified party shall have reasonably concluded that a conflict may arise between the positions of the indemnifying party and the indemnified party in conducting the defense of any such action or that there may be legal defenses available to it and/or other indemnified parties which are different from or additional to those available to the indemnifying party, the indemnified party or parties shall have the right to select separate counsel to assume such legal defenses and to otherwise participate in the defense of such action on behalf of such indemnified party or parties. Upon receipt of notice from the indemnifying party to such indemnified party of such indemnifying party's election so to assume the defense of such action and approval by the indemnified party of counsel, the indemnifying party will not be liable to such indemnified party under this Section 8 for any legal or other expenses subsequently incurred by such indemnified party in connection with the defense thereof unless (i) the indemnified party shall have employed separate counsel in accordance with the proviso to the next preceding sentence (it being understood, however, that the indemnifying party shall not be liable for the expenses of more than one separate counsel (together with local counsel), approved by the indemnifying party (BAS in the case of Section 8(b) and Section 9), representing the indemnified parties who are parties to such action) or (ii) the indemnifying party shall not have employed counsel satisfactory to the indemnified party to represent the indemnified party within a reasonable time after notice of commencement of the action, in each of which cases the fees and expenses of counsel shall be at the expense of the indemnifying party. (c) Settlements. The indemnifying party under this Section 8 shall not be liable for any settlement of any proceeding effected without its written consent, but if settled with such consent or if there be a final judgment for the plaintiff, the indemnifying party agrees to indemnify the indemnified party against any loss, claim, damage, liability or expense by reason of such settlement or judgment. Notwithstanding the foregoing sentence, if at any time an indemnified party shall have requested an indemnifying party to reimburse the indemnified party for fees and expenses of counsel as contemplated by Section 8(c) hereof, the indemnifying party agrees that it shall be liable for any settlement of any proceeding effected without its written consent if (i) such settlement is entered into more than 30 days after receipt by such indemnifying party of the aforesaid request and (ii) such indemnifying party shall not have reimbursed the indemnified party in accordance with such request prior to the date of such settlement. No indemnifying party shall, without the prior written consent of the indemnified party, effect any settlement, compromise or consent to the entry of judgment in any pending or threatened action, suit or proceeding in respect of which any indemnified party is or could have been a party and indemnity was or could have been sought hereunder by such indemnified party, unless such settlement, compromise or consent includes an unconditional release of such indemnified party from all liability on claims that are the subject matter of such action, suit or proceeding. SECTION 9. CONTRIBUTION. If the indemnification provided for in Section 8 is for any reason held to be unavailable to or otherwise insufficient to hold harmless an indemnified party in respect of any losses, claims, damages, liabilities or expenses referred to therein, then each indemnifying party shall contribute to the aggregate amount paid or payable by such indemnified party, as incurred, as a result of any losses, claims, damages, liabilities or expenses referred to therein (i) in such proportion as is appropriate to reflect the relative benefits received by the Sellers, on the one hand, and the Underwriters, on the other hand, from the offering of the Securities pursuant to this Agreement or (ii) if the allocation provided by clause (i) above is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of the Sellers, on the one hand, and the Underwriters, on the other hand, in connection with the statements or omissions or inaccuracies in the representations and warranties herein which resulted in such losses, claims, damages, liabilities or expenses, as well as any other relevant equitable considerations. The relative benefits received by the Sellers, on the one hand, and the Underwriters, on the other hand, in connection with the offering of the Notes pursuant to this 24 Agreement shall be deemed to be in the same respective proportions as the total net proceeds from the offering of the Notes pursuant to this Agreement (before deducting expenses) received by the Sellers, and the total underwriting discount received by the Underwriters, in each case as set forth on the front cover page of the Prospectus bear to the aggregate initial public offering price of the Securities as set forth on such cover. The relative fault of the Sellers, on the one hand, and the Underwriters, on the other hand, shall be determined by reference to, among other things, whether any such untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact or any such inaccurate or alleged inaccurate representation or warranty relates to information supplied by the Sellers, on the one hand, or the Underwriters, on the other hand, and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The amount paid or payable by a party as a result of the losses, claims, damages, liabilities and expenses referred to above shall be deemed to include, subject to the limitations set forth in Section 8(c), any legal or other fees or expenses reasonably incurred by such party in connection with investigating or defending any action or claim. The provisions set forth in Section 8(c) with respect to notice of commencement of any action shall apply if a claim for contribution is to be made under this Section 9; provided, however, that no additional notice shall be required with respect to any action for which notice has been given under Section 8(c) for purposes of indemnification. The Sellers and the Underwriters agree that it would not be just and equitable if contribution pursuant to this Section 9 were determined by pro rata allocation (even if the Underwriters were treated as one entity for such purpose) or by any other method of allocation which does not take account of the equitable considerations referred to in this Section 9. Notwithstanding the provisions of this Section 9, no Underwriter shall be required to contribute any amount in excess of the underwriting commissions received by such Underwriter in connection with the Securities underwritten by it and distributed to the public. 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 was not guilty of such fraudulent misrepresentation. The Underwriters' obligations to contribute pursuant to this Section 9 are several, and not joint, in proportion to their respective underwriting commitments as set forth opposite their names in Schedule A. For purposes of this Section 9, each officer and employee of an Underwriter and each person, if any, who controls an Underwriter within the meaning of the Securities Act and the Exchange Act shall have the same rights to contribution as such Underwriter, and each director of a Seller, each officer of a Seller who signed the Registration Statement, and each person, if any, who controls a Seller with the meaning of the Securities Act and the Exchange Act shall have the same rights to contribution as such Seller. SECTION 10. DEFAULT OF ONE OR MORE OF THE SEVERAL UNDERWRITERS. If, on the Closing Date any one or more of the several Underwriters shall fail or refuse to purchase Securities that it or they have agreed to purchase hereunder on such date, and the aggregate number of Securities which such defaulting Underwriter or Underwriters agreed but failed or refused to purchase does not exceed 10% of the aggregate number of the Securities to be purchased on such date, the other Underwriters shall be obligated, severally, in the proportions that the number of Securities set forth opposite their respective names on Schedule A bears to the aggregate number of Securities set forth opposite the names of all such non-defaulting Underwriters, or in such other proportions as may be specified by the Representatives with the consent of the non-defaulting Underwriters, to purchase the Securities which such defaulting Underwriter or Underwriters agreed but failed or refused to purchase on such date. If, on the Closing Date any one or more of the 25 Underwriters shall fail or refuse to purchase Securities and the aggregate number of Securities with respect to which such default occurs exceeds 10% of the aggregate number of Securities to be purchased on such date, and arrangements satisfactory to the Representatives and the Sellers for the purchase of such Securities are not made within 48 hours after such default, this Agreement shall terminate without liability of any party to any other party except that the provisions of Section 4, Section 6, Section 8, Section 9 and the last sentence of this Section 10 shall at all times be effective and shall survive such termination. In any such case either the Representatives or the Sellers shall have the right to postpone the Closing Date, but in no event for longer than seven days in order that the required changes, if any, to the Registration Statement and the Prospectus or any other documents or arrangements may be effected. As used in this Agreement, the term "Underwriter" shall be deemed to include any person substituted for a defaulting Underwriter under this Section 10. Any action taken under this Section 10 shall not relieve any defaulting Underwriter from liability in respect of any default of such Underwriter under this Agreement. SECTION 11. TERMINATION OF THIS AGREEMENT. Prior to the Closing Date, this Agreement may be terminated by the Representatives by notice given to the Company if at any time (i) trading or quotation in any of the Company's securities shall have been suspended or limited by the Commission or by the New York Stock Exchange, or trading in securities generally on either the Nasdaq Stock Market or the New York Stock Exchange shall have been suspended or limited, or minimum or maximum prices shall have been generally established on any of such stock exchanges by the Commission or the NASD; (ii) a general banking moratorium shall have been declared by any of federal, New York or Delaware authorities; (iii) there shall have occurred any outbreak or escalation of national or international hostilities or any crisis or calamity, or any change in the United States or international financial markets, or any substantial change or development involving a prospective substantial change in United States or international political, financial or economic conditions, as in the judgment of the Representatives is material and adverse and makes it impracticable to market the Securities in the manner and on the terms described in the Prospectus or to enforce contracts for the sale of securities; (iv) in the judgment of the Representatives there shall have occurred any Material Adverse Change; (v) the Company or any of its subsidiaries shall have sustained a loss by strike, fire, flood, earthquake, accident or other calamity of such character as in the judgment of the Representatives may interfere materially with the conduct of the business and operations of the Company and its subsidiaries regardless of whether or not such loss shall have been insured; or (vi) there shall have occurred a material disruption in commercial banking or securities settlement or clearance services in the United States. Any termination pursuant to this Section 11 shall be without liability on the part of (a) any Seller to any Underwriter, except that the Sellers shall be obligated to reimburse the expenses of the Representatives and the Underwriters pursuant to Sections 4 and 6 hereof, (b) any Underwriter to any Seller, or (c) of any party hereto to any other party except that the provisions of Section 8 and Section 9 shall at all times be effective and shall survive such termination. SECTION 12. REPRESENTATIONS AND INDEMNITIES TO SURVIVE DELIVERY. The respective indemnities, agreements, representations, warranties and other statements of the Sellers, of its officers, and of the several Underwriters set forth in or made pursuant to this Agreement will remain in full force and effect, regardless of any investigation made by or on behalf of any Underwriter or any Seller or any of its or their partners, officers or directors or any controlling person, as the case may be, and will survive delivery of and payment for the Securities sold hereunder. 26 SECTION 13. NOTICES. All communications hereunder shall be in writing and shall be mailed, hand delivered or telecopied and confirmed to the parties hereto as follows: If to the Representatives: Banc of America Securities LLC 9 West 57th Street New York, New York 10019 Facsimile: (212) 583-8567 Attention: Legal Department with a copy to: Shearman & Sterling LLP 599 Lexington Avenue New York, New York 10022 Facsimile: (212) 848-7179 Attention: Andrew R. Schleider If to the Company or any Subsidiary Guarantor: Giant Industries, Inc. 23733 North Scottsdale Road Scottsdale, Arizona 95255 Facsimile: (480) 585-8985 Attention: General Counsel with a copy to: Fennemore Craig, P.C. 3003 North Central, Suite 2600 Phoenix, Arizona 85012-2913 Facsimile: (602) 916-5507 Attention: Karen C. McConnell Any party hereto may change the address for receipt of communications by giving written notice to the others. SECTION 14. SUCCESSORS. This Agreement will inure to the benefit of and be binding upon the parties hereto, including any substitute Underwriters pursuant to Section 10 hereof, and to the benefit of the employees, officers and directors and controlling persons referred to in Section 8 and Section 9, and in each case their respective successors, and personal representatives, and no other person will have any right or obligation hereunder. The term "successors" shall not include any purchaser of the Securities as such from any of the Underwriters merely by reason of such purchase. SECTION 15. PARTIAL UNENFORCEABILITY. The invalidity or unenforceability of any Section, paragraph or provision of this Agreement shall not affect the validity or enforceability of any other Section, paragraph or provision hereof. If any Section, paragraph or provision of this Agreement is for any reason determined to be 27 invalid or unenforceable, there shall be deemed to be made such minor changes (and only such minor changes) as are necessary to make it valid and enforceable. SECTION 16. GOVERNING LAW PROVISIONS. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. SECTION 17. GENERAL PROVISIONS. No indemnified party shall be entitled to any consequential, special or punitive damages by virtue of Section 8 or 9 of this Agreement except to the extent that such indemnified party is obligated to pay such types of damages to a third party in respect of a claim for which such indemnified party is entitled to indemnification or contribution. This Agreement constitutes the entire agreement of the parties to this Agreement and supersedes all prior written or oral and all contemporaneous oral agreements, understandings and negotiations with respect to the subject matter hereof. This Agreement may be executed in two or more counterparts, each one of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. This Agreement may not be amended or modified unless in writing by all of the parties hereto, and no condition herein (express or implied) may be waived unless waived in writing by each party whom the condition is meant to benefit. The Table of Contents and the Section headings herein are for the convenience of the parties only and shall not affect the construction or interpretation of this Agreement. Each of the parties hereto acknowledges that it is a sophisticated business person who was adequately represented by counsel during negotiations regarding the provisions hereof, including, without limitation, the indemnification provisions of Section 8 and the contribution provisions of Section 9, and is fully informed regarding said provisions. Each of the parties hereto further acknowledges that the provisions of Sections 8 and 9 hereto fairly allocate the risks in light of the ability of the parties to investigate the Company or any Subsidiary Guarantor, its affairs and its business in order to assure that adequate disclosure has been made in the Registration Statement, any preliminary prospectus and the Prospectus (and any amendments and supplements thereto), as required by the Securities Act and the Exchange Act. 28 If the foregoing is in accordance with your understanding of our agreement, kindly sign and return to the Company the enclosed copies hereof, whereupon this instrument, along with all counterparts hereof, shall become a binding agreement in accordance with its terms. Very truly yours, THE COMPANY: GIANT INDUSTRIES, INC. a Delaware corporation By:______________________________ Name: Title: THE SUBSIDIARY GUARANTORS: GIANT INDUSTRIES ARIZONA, INC., an Arizona corporation By:______________________________ Name: Title: CINIZA PRODUCTION COMPANY, a New Mexico corporation By:______________________________ Name: Title: GIANT STOP-N-GO OF NEW MEXICO, INC., a New Mexico corporation By:______________________________ Name: Title: GIANT FOUR CORNERS, INC., an Arizona corporation By:______________________________ Name: Title: PHOENIX FUEL CO., INC., an Arizona corporation 29 By:______________________________ Name: Title: SAN JUAN REFINING COMPANY, a New Mexico corporation By:______________________________ Name: Title: GIANT MID-CONTINENT, INC., an Arizona corporation By:______________________________ Name: Title: GIANT PIPELINE COMPANY, a New Mexico corporation By:______________________________ Name: Title: GIANT YORKTOWN, INC., a Delaware corporation By:______________________________ Name: Title: GIANT YORKTOWN HOLDING COMPANY, a Delaware corporation By:______________________________ Name: Title: 30 The foregoing Underwriting Agreement is hereby confirmed and accepted by the Representatives in New York, New York as of the date first above written. BANC OF AMERICA SECURITIES LLC BNP PARIBAS SECURITIES CORP. As Representatives of the several Underwriters named in the attached Schedule A By: BANC OF AMERICA SECURITIES LLC By:______________________________ Name: Title: SCHEDULE A
AGGREGATE PRINCIPAL UNDERWRITERS AMOUNT OF NOTES TO BE PURCHASED Banc of America Securities LLC........ $[ ] BNP Paribas Securities Corp........... [ ] ------------- Total.................................. $ 150,000,000 =============
SCHEDULE B SUBSIDIARY GUARANTORS Giant Industries Arizona, Inc. Giant Four Corners, Inc. Giant Mid-Continent, Inc. Phoenix Fuel Co., Inc. Ciniza Production Company Giant Stop-N-Go of New Mexico, Inc. San Juan Refining Company Giant Pipeline Company Giant Yorktown, Inc. Giant Yorktown Holding Company EXHIBIT A Opinion of Fennemore Craig, P.C., United States counsel for the Company to be delivered pursuant to Section 5(h) of the Underwriting Agreement. References to the Prospectus in this Exhibit A include any supplements thereto at the Closing Date. (i) The Company has been duly incorporated and is validly existing as a corporation in good standing under the laws of the State of Delaware. (ii) The Securities and the Indenture conform in all material respects to the respective statements relating thereto contained in the Prospectus and the forms of the certificates used to evidence the Securities comply with the requirements of the Securities Act, the Exchange Act and the Trust Indenture Act (iii) No consent, approval, authorization or other order of, or registration or filing with, any court or other governmental authority or agency, is required for the Company's execution, delivery and performance of the Underwriting Agreement, the DTC Letter of Representations or the Indenture, or the issuance and delivery of the Securities, or and consummation of the transactions contemplated thereby and by the Prospectus, except as required under the Securities Act, applicable state securities or Blue Sky laws, or the rules of the NASD. (iv) Each of the Underwriting Agreement and the Indenture has been duly authorized, executed and delivered by each Seller. (v) The DTC Letter of Representations has been duly authorized, executed and delivered by the Company. (vi) The Notes are in the form contemplated by the Indenture and have been duly authorized by all necessary corporate action on the part of the Company and have been duly executed by the proper officers of the Company. (vii) The Guarantees of the Notes are in the forms contemplated by the Indenture and have been duly authorized by all necessary corporate action on the part of each of the Subsidiary Guarantors and the Guarantees of the Notes have been duly executed by the proper officers of each of the Subsidiary Guarantors and duly delivered as contemplated by this Agreement and by the Indenture. (viii) The Notes to be purchased by the Underwriters from the Company have been duly authorized for issuance and sale pursuant to the Underwriting Agreement and, when issued and delivered by the Company pursuant to the Underwriting Agreement against payment of the consideration set forth therein, will be validly issued, fully paid and nonassessable. (ix) The Registration Statement has been declared effective by the Commission under the Securities Act. To the knowledge of such counsel, no stop order suspending the effectiveness of the Registration Statement has been issued under the Securities Act and no proceedings for such purpose have been instituted or are pending by the Commission. Any required filing of the Prospectus and any supplement thereto pursuant to Rule 424(b) under A-1 the Securities Act has been made in the manner and within the time period required by such Rule 424(b). (x) The Registration Statement, the Prospectus including any document incorporated by reference therein, and each amendment or supplement to the Prospectus including any document incorporated by reference therein (other than the financial statements and supporting schedules included or incorporated by reference therein or in exhibits to or excluded from the Registration Statement, as to which no opinion need be rendered), as of the issue date thereof in the case of the Prospectus or any supplement thereto or the filing date thereof in the case of the Registration Statement or any document incorporated by reference therein or in the Prospectus or any supplement thereto, comply as to form in all material respects with the applicable requirements of the Securities Act and the Exchange Act. (xi) No consent, approval, authorization or other order of, or registration or filing with, any court or other governmental authority or agency, is required for the Company's execution, delivery and performance of the Underwriting Agreement and consummation of the transactions contemplated thereby and by the Prospectus, except as required under the Securities Act, applicable state securities or Blue Sky laws, or the rules of the NASD. (xii) The execution and delivery of the Underwriting Agreement by the Company and the performance by the Company of its obligations thereunder (other than performance by the Company of its obligations under the indemnification section of the Underwriting Agreement, as to which no opinion need be rendered) the Tender Offer and Consent Solicitation and/or the Back-End Redemption of the 9% Notes and the Related Transactions (a) have been duly authorized by all necessary corporate action on the part of the Company; (b) will not result in any violation of the provisions of the charter or by-laws of the Company; (c) will not constitute a breach of, or Default or a Debt Repayment Triggering Event under, or result in the creation or imposition of any lien, charge or encumbrance upon any property or assets of the Company or any of its subsidiaries pursuant to the 2002 Indenture, the 1997 Indenture, the Revolving Credit Facility, the Term Loan Agreement or any document filed as an exhibit to the Registration Statement or a filing specifically listed as being incorporated into the Prospectus or (d) to the knowledge of such counsel, will not result in any violation of any law, administrative regulation or administrative or court decree applicable to the Company. (xiii) The Company is not and will not as a result of the offer and sale of the Securities be (i) an "investment company" or a company "controlled" by an investment company within the meaning of the United States Investment Company Act of 1940, as amended, (ii) a "holding company" or a "subsidiary company" of a holding company or an "affiliate" thereof within the meaning of the United States Public Utility Holding Company Act of 1935, as amended, or (iii) subject to regulation under the United States Federal Power Act or any federal or state statute or regulation limiting its ability to incur indebtedness for borrowed money. In addition, such counsel shall state that they have participated in conferences with officers and other representatives of the Company, representatives of the independent public or certified public accountants for the Company and with representatives of the Underwriters at which the contents of the Registration Statement and the Prospectus, and any supplements or amendments thereto, and related matters were discussed and, although such counsel is not passing upon the A-2 accuracy, completeness of the statements contained in the Registration Statement or the Prospectus (other than as specified in paragraph (ii) above), and any supplements or amendments thereto, on the basis of the foregoing, nothing has come to their attention which gives them reason to believe that either the Registration Statement or any amendments thereto, at the time the Registration Statement or such amendments became effective or as the date of the Underwriting Agreement, contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading or that the Prospectus or any amendment or supplement thereto, as of its date, at the date of any such amendment or supplement or at the Closing Date, contained an untrue statement of a material fact or omitted to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading (it being understood that such counsel need express no belief as to the financial statements and financial data included or incorporated by reference in the Registration Statement or the Prospectus or any amendments or supplements thereto). The aforementioned opinion shall be limited to the federal laws of the United States of America, the laws of the State of Arizona and the general corporate law of the State of Delaware. Such counsel may state that insofar as the aforementioned opinion is indicated to be based on the best of such counsel's knowledge, such opinion is based upon such counsel's actual knowledge, which the attorneys in such counsel's firm have obtained in connection with the representation of the Sellers. Such counsel may rely, to the extent they deem proper and specified in such opinion, on opinions (which shall be dated the Closing Date and shall be satisfactory in form and substance to the Underwriters, shall expressly state that the Underwriters may rely on such opinion as if it were addressed to them and shall be furnished to the Representatives) of local counsel reasonably satisfactory to the Underwriters with respect to matters of law of jurisdictions other than the federal laws of the United States of America, the laws of the State of Arizona and the general corporate law of the State of Delaware; provided, however, that such counsel shall further state that they believe that they and the Underwriters are justified in relying upon such opinion of other counsel, and as to matters of fact, to the extent they deem proper, on certificates of responsible officers of the Company and public officials. A-3 EXHIBIT B Opinion of McGuire Woods, LLP, special counsel for the Company to be delivered pursuant to the Section 5(h) of the Underwriting Agreement. (i) The Indenture constitutes the legal, valid and binding agreement of each Seller, enforceable against each Seller in accordance with its terms, except to the extent that the enforceability thereof may be limited by (A) bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium, fraudulent transfer or other laws relating to creditors' rights generally and (B) general principles of equity (regardless of whether such enforcement is considered in a proceeding in equity or at law) and an implied covenant of good faith and fair dealing. (ii) The DTC Letter of Representations constitutes the legal, valid and binding agreement of the Company, enforceable against the Company in accordance with its terms, except to the extent that the enforceability thereof may be limited by (A) bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium, fraudulent transfer or other laws relating to creditors' rights generally and (B) general principles of equity (regardless of whether such enforcement is considered in a proceeding in equity or at law) and an implied covenant of good faith and fair dealing. (iii) The Notes are in the form contemplated by the Indenture and, assuming the Notes have been duly authenticated by the Trustee and delivered as contemplated by this Agreement and by the Indenture, and delivered in the manner provided for in this Agreement against payment of the consideration therefor specified in the Prospectus, constitute valid and binding obligations of the Company, enforceable against the Company in accordance with their terms, and entitled to the benefits of the Indenture, except to the extent that the enforceability thereof may be limited by (A) bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium, fraudulent transfer or other laws relating to creditors' rights generally and (B) general principles of equity (regardless of whether such enforcement is considered in a proceeding in equity or at law) and an implied covenant of good faith and fair dealing. (iv) The Guarantees of the Notes are in the forms contemplated by the Indenture. The Guarantees of the Notes constitute valid and legally binding obligations of the Subsidiary Guarantors, enforceable in accordance with their terms, and will be entitled to the benefits of the Indenture, except to the extent that the enforceability thereof may be limited by (A) bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium, fraudulent transfer or other laws relating to creditors' rights generally and (B) general principles of equity (regardless of whether such enforcement is considered in a proceeding in equity or at law) and an implied covenant of good faith and fair dealing. The aforementioned opinion shall be limited to the federal laws of the United States of America, the laws of the State of New York and the general corporate law of the State of Delaware. Such counsel may state that insofar as the aforementioned opinion is indicated to be based on the best of such counsel's knowledge, such opinion is based upon such counsel's actual knowledge, which the attorneys in such counsel's firm have obtained in connection with the representation of the Sellers. Such counsel may rely, to the extent they deem proper and specified in such opinion, on opinions (which shall be dated the Closing Date and shall be satisfactory in form and substance to the Underwriters, shall expressly state that the Underwriters may rely on such opinion as if it were addressed to them and shall be furnished to the Representatives) of local counsel reasonably satisfactory to the Underwriters with respect to matters of B-1 law of jurisdictions other than the federal laws of the United States of America, the laws of the State of New York and the general corporate law of the State of Delaware; provided, however, that such counsel shall further state that they believe that they and the Underwriters are justified in relying upon such opinion of other counsel, and as to matters of fact, to the extent they deem proper, on certificates of responsible officers of the Company and public officials. B-2 EXHIBIT C Opinion of Kim Bullerdick, Esq., General Counsel of the Company to be delivered pursuant to Section 5(h) of the Underwriting Agreement. (i) The Company has been duly incorporated and is validly existing as a corporation in good standing under the laws of the State of Delaware; has the corporate power and authority to own, lease and operate its properties and to conduct its business as presently conducted and as described in the Prospectus and to enter into and perform its obligations under this Agreement, the DTC Letter of Representations, the Securities and the Indenture (including the Tender Offer and Consent Solicitation and/or the Back-End Redemption of the 9% Notes) and to enter into and perform its obligations under the Related Transactions; and is duly qualified as a foreign corporation to transact business and is in good standing in each jurisdiction in which such qualification is required, whether by reason of the ownership or leasing of property or the conduct of business, except where the failure to so qualify would not have a Material Adverse Effect on the Company. (ii) Each Subsidiary Guarantor has been duly incorporated and is validly existing as a corporation in good standing under the laws of the jurisdiction of its incorporation; has the corporate power and authority to own, lease and operate its properties and conduct its business as presently conducted and as described in the Prospectus and to enter into and perform its obligations under this Agreement, the DTC Letter of Representations, the Securities and the Indenture (including the Tender Offer and Consent Solicitation and/or the Back-End Redemption of the 9% Notes) and to enter and perform its obligations under the Related Transactions; and is duly qualified as a foreign corporation to transact business and is in good standing in each jurisdiction in which such qualification is required, whether by reason of the ownership or leasing of property or the conduct of business, except where the failure to so qualify would not have a Material Adverse Effect on the Company. Except with respect to Navajo Convenient Store Co., LLC (which is a majority owned subsidiary), all the issued and outstanding capital stock of each Subsidiary Guarantor has been duly authorized and validly issued, is fully paid and nonassessable and is owned, directly or indirectly, by the Company, and, to the knowledge of such counsel, free and clear of any Lien, except for the Liens under the Revolving Credit Facility and the Term Loan Agreement. (iii) The descriptions in the Prospectus of statutes, legal and governmental proceedings, contracts and other documents are accurate and fairly present the information which, to such counsel's knowledge, is required to be shown; and such counsel does not know of any statutes or legal or governmental proceedings required to be described in the Prospectus that are not described as required, or of any contracts or documents of a character required to be described in the Prospectus that are not described as required. (iv) The statements (a) in the prospectus supplement under the captions "Management's Discussion and Analysis of Financial Condition and Results of Operation - Liquidity and Capital Resources", "Business - Regulatory, Environmental and Other Matters", "Business - Motor Fuel Programs", Business - MTBE Litigation", "Business - Alleged Regulatory Violations", "Business - Discharges, Releases and Cleanup Activities", "Business - Health and Safety", "Business - Changes in Environmental, Health and Safety Laws", "Business - Rights-Of-Way", "Business - Jet Fuel Claims", "Business - Yorktown Power Outage Claim", "Description of Capital Stock" and "Underwriting", (b) in the base prospectus under the caption "Description of Capital Stock" and "Plan of Distribution", and C-1 (c) in Item 15 of the Registration Statement, insofar as such statements constitute summaries of legal matters, the documents or legal proceedings, fairly present and summarize, in all material respects, the matters referred to therein. (v) To the best of such counsel's knowledge, neither the Company nor any Subsidiary Guarantor is in violation of its charter or bylaws, and to the best of such counsel's knowledge, except as otherwise disclosed in the Prospectus, neither the Company nor any Subsidiary Guarantor is in Default in the performance or observance of any obligation, agreement, covenant or condition contained in any Contract or any applicable law, administrative regulation or administrative or court order or decree, which violation or default would, singly or in the aggregate, have a Material Adverse Effect on the Company. (vi) The issuance and delivery of the Notes and the Guarantees of the Notes, the execution and delivery of this Agreement, the DTC Letter of Representations and the Indenture and the consummation of the transactions contemplated herein (including the Tender Offer and Consent Solicitation and/or the Back-End Redemption of the 9% Notes) and the Related Transactions will not conflict with or constitute a breach of, or Default or a Debt Repayment Triggering Event under, or result in the creation or imposition of any Lien upon any material property or assets of the Company or any Subsidiary Guarantor pursuant to any Contract, which conflict, breach, Default, Debt Repayment Triggering Event or Lien would, singly or in the aggregate, have a Material Adverse Effect on the Company. (vii) The issuance and delivery of the Notes and the Guarantees of the Notes, the execution and delivery of this Agreement, the DTC Letter of Representations and the Indenture and the consummation of the transactions contemplated herein (including the Tender Offer and Consent Solicitation and/or the Back-End Redemption of the 9% Notes) and the Related Transactions will not result in a violation of the provisions of the charter or bylaws of the Company or any Subsidiary Guarantor or, to the best of such counsel's knowledge, any material applicable law, administrative regulation, administrative or court order or decree. (viii) All of the issued and outstanding capital stock of each subsidiary of the Company is owned, directly or indirectly, by the Company, and, to the knowledge of such counsel, free and clear of any security interest, mortgage, pledge, lien, encumbrance or any pending or threatened claim. (ix) To the knowledge of such counsel, there are no legal or governmental actions, suits or proceedings pending or threatened which are required to be disclosed in the Registration Statement, other than those disclosed therein. (x) To the knowledge of such counsel, there are no Contracts required to be described or referred to in the Registration Statement or to be filed as exhibits thereto other than those described or referred to therein or filed or incorporated by reference as exhibits thereto; and the descriptions thereof and references thereto are correct in all material respects. (xi) To the knowledge of such counsel, there are no persons with registration or other similar rights to have any equity or debt securities registered for sale under the Registration Statement or included in the offering contemplated by this Agreement or the concurrent Senior Subordinated Notes Offering. C-2 In addition, such counsel shall state that such counsel has reviewed the Prospectus, and any supplements or amendments thereto, and, on the basis of such review, to the best of such counsel's knowledge, the Prospectus, or any supplements or amendments thereto, as of its date, at the date of any such amendment or supplement or at the Closing Date did not contain any 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, in the light of the circumstances in which made, not misleading. The aforementioned opinion shall be limited to the federal laws of the United States of America, the laws of the State of Arizona and the corporate law of the State of Delaware. Such counsel may state that insofar as the aforementioned opinion is indicated to be based on the best of such counsel's knowledge, such opinion is based upon such counsel's actual knowledge. Such counsel may rely, to the extent he deems proper and specified in such opinion, on opinions (which shall be dated the Closing Date and shall be satisfactory in form and substance to the Underwriters, shall expressly state that the Underwriters may rely on such opinion as if it were addressed to them and shall be furnished to the Representatives) of local counsel satisfactory to the Underwriters with respect to matters of law of jurisdictions other than the federal laws of the United States of America, the laws of the State of Arizona and the general corporate law of the State of Delaware; provided, however, that such counsel shall further state that he believes that he and the Underwriters are justified in relying upon such opinion of other counsel, and as to matters of fact, to the extent they deem proper, on certificates of responsible officers of any Seller and public officials. Such counsel may rely on certificates of good standing and foreign qualification from appropriate state officials with respect to opinions regarding good standing and foreign qualification. C-3 EXHIBIT D Opinion of Montgomery & Andrews, New Mexico counsel to the Company and the New Mexico Subsidiary Guarantors, to be delivered pursuant to Section 5(h) of the Underwriting Agreement. (i) Each of the Underwriting Agreement, the Indenture and the Guarantees of the Notes has been duly authorized, executed and delivered by each of the New Mexico Subsidiary Guarantors. (xii) Each of the New Mexico Subsidiary Guarantors is a corporation duly organized, validly existing and in good standing under the laws of the State of New Mexico. D-1
EX-1.2 4 p68915a3exv1w2.txt EX-1.2 Exhibit 1.2 GIANT INDUSTRIES, INC. 3,000,000 Shares Common Stock UNDERWRITING AGREEMENT dated April [__], 2004 BANC OF AMERICA SECURITIES LLC CREDIT SUISSE FIRST BOSTON LLC FRIEDMAN, BILLINGS, RAMSEY & CO., INC. TABLE OF CONTENTS SECTION 1. REPRESENTATIONS AND WARRANTIES.............................. 5 (a) Compliance with Registration Requirements.......................... 5 (b) Exchange Act Compliance............................................ 6 (c) Offering Materials Furnished to Underwriters....................... 6 (d) Distribution of Offering Material By the Company................... 6 (e) Authorization of the Underwriting Agreement........................ 6 (f) Authorization of the Common Shares................................. 6 (g) No Applicable Registration or Other Similar Rights................. 6 (h) No Material Adverse Change......................................... 6 (i) Independent Accountants............................................ 7 (j) Preparation of the Financial Statements............................ 7 (k) Incorporation and Good Standing of the Company and its Subsidiaries 7 (l) Capitalization and Other Capital Stock Matters..................... 8 (m) Stock Exchange Listing............................................. 8 (n) Non-Contravention of Contracts; No Further Authorizations or Approvals Required.................................................. 8 (o) Notice of Term Loan Prepayment..................................... 9 (p) No Material Actions or Proceedings................................. 9 (q) No Labor Disputes.................................................. 9 (r) Intellectual Property Rights....................................... 9 (s) All Necessary Permits, etc......................................... 9 (t) Title to Properties................................................ 9 (u) Tax Law Compliance................................................. 10 (v) Company Not an "Investment Company"................................ 10 (w) Insurance.......................................................... 10 (x) No Mandatory Redemption............................................ 10 (y) Solvency........................................................... 10 (z) No Price Stabilization or Manipulation............................. 11 (aa) Related Party Transactions........................................ 11 (bb) No Unlawful Contributions or Other Payments....................... 11 (cc) Company's Accounting System....................................... 11 (dd) Compliance with Environmental Laws................................ 11 (ee) Periodic Review of Costs of Environmental Compliance.............. 12 (ff) ERISA Compliance.................................................. 12 (gg) Brokers........................................................... 12 (hh) No Outstanding Loans or Other Indebtedness........................ 12 (ii) Compliance with Laws.............................................. 13 (jj) No Event of Default............................................... 13 (kk) Disclosure Controls and Procedures................................ 13 SECTION 2. PURCHASE, SALE AND DELIVERY OF THE COMMON SHARES............ 13 (a) The Firm Common Shares............................................. 13 (b) The First Closing Date............................................. 13 (c) The Optional Common Shares; the Second Closing Date................ 14 (d) Public Offering of the Common Shares............................... 14 (e) Payment for the Common Shares...................................... 14 (f) Delivery of the Common Shares...................................... 15 (g) Delivery of Prospectus to the Underwriters......................... 15 SECTION 3. ADDITIONAL COVENANTS OF THE COMPANY......................... 15 (a) Representatives' Review of Proposed Amendments and Supplements..... 15 (b) Securities Act Compliance.......................................... 15
2 (c) Notification of Breach of this Agreement........................... 16 (d) Amendments and Supplements to the Prospectus and Other Securities Act Matters........................................................ 16 (e) Copies of any Amendments and Supplements to the Prospectus......... 16 (f) Blue Sky Compliance................................................ 16 (g) Use of Proceeds.................................................... 16 (h) Transfer Agent..................................................... 16 (i) Earnings Statement................................................. 16 (j) Periodic Reporting Obligations..................................... 16 (k) Company to Provide Interim Financial Statements.................... 17 (l) Listing............................................................ 17 (m) Agreement Not to Offer or Sell Additional Securities............... 17 (n) Future Reports to the Representatives.............................. 17 (o) Investment Limitation.............................................. 17 (p) No Manipulation of Price........................................... 18 (q) Existing Lock-Up Agreement......................................... 18 SECTION 4. PAYMENT OF EXPENSES......................................... 18 SECTION 5. CONDITIONS TO OBLIGATIONS OF THE UNDERWRITERS............... 18 (a) No Untrue Statements; Inadvisable to Proceed....................... 19 (b) Corporate Proceedings.............................................. 19 (c) Resolutions........................................................ 19 (d) Accountant's Comfort Letter........................................ 19 (e) Bring-Down Comfort Letters......................................... 19 (f) Compliance with Registration Requirements; No Stop Order; No Objection from NASD................................................ 20 (g) No Material Adverse Change......................................... 20 (h) Opinion of Counsel for the Company................................. 20 (i) Opinion of Counsel for the Underwriters............................ 20 (j) Officers' Certificate.............................................. 20 (k) Other Certificates................................................. 21 (l) Lock-Up Agreement from Certain Securityholders of the Company...... 21 (m) Additional Documents............................................... 21 (n) Notice of Redemption for 11% Notes................................. 21 SECTION 6. REIMBURSEMENT OF UNDERWRITERS' EXPENSES..................... 21 SECTION 7. EFFECTIVENESS OF THIS AGREEMENT............................. 22 SECTION 8. INDEMNIFICATION............................................. 22 (a) Indemnification of the Underwriters by the Company................. 22 (b) Indemnification of the Company, its Directors and Officers......... 22 (c) Notifications and Other Indemnification Procedures................. 23 (d) Settlements........................................................ 24 SECTION 9. CONTRIBUTION................................................ 24 SECTION 10. DEFAULT OF ONE OR MORE OF THE SEVERAL UNDERWRITERS......... 25 SECTION 11. TERMINATION OF THIS AGREEMENT.............................. 26 SECTION 12. REPRESENTATIONS AND INDEMNITIES TO SURVIVE DELIVERY........ 26 SECTION 13. NOTICES.................................................... 26 SECTION 14. SUCCESSORS................................................. 28 SECTION 15. PARTIAL UNENFORCEABILITY................................... 28 SECTION 16. GOVERNING LAW PROVISIONS................................... 28 SECTION 17. GENERAL PROVISIONS......................................... 28
3 UNDERWRITING AGREEMENT April [__], 2004 BANC OF AMERICA SECURITIES LLC CREDIT SUISSE FIRST BOSTON LLC FRIEDMAN, BILLINGS, RAMSEY & CO., INC. As Representatives of the several Underwriters c/o BANC OF AMERICA SECURITIES LLC 9 West 57th Street New York, New York 10019 Ladies and Gentlemen: Introductory. Giant Industries Inc., a Delaware corporation (the "Company"), proposes to issue and sell to the several underwriters named in Schedule A (the "Underwriters") an aggregate of 3,000,000 shares (the "Firm Common Shares") of its common stock, par value $0.01 per share (the "Common Stock"). In addition, the Company has granted to the Underwriters an option to purchase up to an additional 450,000 shares (the "Optional Common Shares") of Common Stock, as provided in Section 2. The Firm Common Shares and, if and to the extent such option is exercised, the Optional Common Shares are collectively called the "Common Shares". Banc of America Securities LLC ("BAS"), Credit Suisse First Boston LLC and Friedman, Billings, Ramsey & Co., Inc., have agreed to act as representatives of the several Underwriters (in such capacity, the "Representatives") in connection with the offering and sale of the Common Shares. The Company has prepared and filed with the Securities and Exchange Commission (the "Commission") a registration statement on Form S-3 (File No. 333-113590) for the registration of Common Stock (including the Common Shares), preferred stock, debt securities, debt and equity warrants, stock purchase contracts, stock purchase units and units of the Company under the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder (collectively, the "Securities Act"), and the offering thereof from time to time in accordance with Rule 415 under the Securities Act. Such registration statement has been declared effective by the Commission. Such registration statement, as so amended, if applicable, including the exhibits and schedules thereto, and including all documents incorporated or deemed to be incorporated by reference therein pursuant to Item 12 of Form S-3, prior to the execution of this Agreement, is called the "Registration Statement". The final prospectus and the final prospectus supplement relating to the offering of the Common Shares, in the form first furnished to the Underwriters by the Company for use in connection with the offering of the Common Shares, including all documents incorporated or deemed to be incorporated by reference therein pursuant to Item 12 of Form S-3, prior to the execution of this Agreement, is called the "Prospectus". A "preliminary prospectus" shall be deemed to refer to any prospectus that omitted information to be included upon pricing in a form of prospectus filed with the Commission pursuant to Rule 424(b) under the Securities Act and was used prior to the execution and delivery of this Agreement. All references in this Agreement to the Registration Statement, a preliminary prospectus, the Prospectus or any amendments or supplements to any of the foregoing, shall include any copy thereof filed with the Commission pursuant to its Electronic Data Gathering, Analysis and Retrieval System ("EDGAR"). 4 All references in this Agreement to financial statements and schedules and other information which is "contained", "included" or "stated" (all other references of like import) in the Registration Statement, a preliminary prospectus or the Prospectus shall be deemed to mean and include all such financial statements and schedules and other information which is or is deemed to be incorporated by reference in the Registration Statement, a preliminary prospectus or the Prospectus, as the case may be, prior to the execution of this Agreement; and all references in this Agreement to amendments or supplements to the Registration Statement, a preliminary prospectus or the Prospectus shall be deemed to mean and include the filing of any document under the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder (collectively, the "Exchange Act") which is or is deemed to be incorporated by reference in the Registration Statement, a preliminary prospectus or the Prospectus, as the case may be, after the execution of this Agreement. As described in the Prospectus, the proceeds from the offering of the Common Shares will be used to redeem a portion of the aggregate outstanding principal amount of the Company's 11% senior subordinated notes due 2012 (the "11% Notes") in accordance with the terms and conditions under the Indenture, dated as of May 14, 2002, as amended, among the Company, the guarantors party thereto and The Bank of New York, as trustee (the "2002 Indenture"), and pay related redemption premiums and transaction fees and expenses. The Company will issue an irrevocable notice of such redemption of the 11% Notes (the "11% Notes Notice of Redemption") on the First Closing Date and the Second Closing Date, as the case may be (each as defined below), in accordance with the terms and conditions under the 2002 Indenture. Concurrently with this offering of Common Shares pursuant to this Agreement, the Company will issue and sell $150 million of senior subordinated notes (the "Senior Subordinated Notes") pursuant to a separate underwriting agreement dated the date hereof, among the Company, certain subsidiary guarantors and the underwriters thereto, some of whom are underwriters in this offering (the "Senior Subordinated Notes Offering"). On April 13, 2004, the Company mailed (the "Tender Offer and Consent Solicitation") an Offer to Purchase and Consent Solicitation Statement along with a Letter of Transmittal and Consent, thereby making a tender offer to purchase for cash all $150 million aggregate principal amount outstanding of the Company's 9% senior subordinated notes due 2007 (the "9% Notes") and a consent solicitation to the adoption of certain proposed amendments to the Indenture, dated August 26, 1997, as amended, among the Company, the guarantors party thereto and The Bank of New York, as trustee (the "1997 Indenture"). The Tender Offer and Consent Solicitation is conditioned upon closing of the Senior Subordinated Notes Offering. The closing of the Senior Subordinated Notes Offering is conditioned upon receipt of appropriate waivers and/or consents, which were received from the lenders party to the Revolving Credit Facility (as defined below) on April 7th, 2004 and from the lenders party to the Term Loan Agreement (as defined below) on April 6th, 2004 (collectively, the "Consents"). The proceeds from the Senior Subordinated Notes Offering, together with cash on hand, will be used to finance the Tender Offer and Consent Solicitation, and pay related transaction fees and expenses. The consent solicitation relates to consents of the holders of the 9% Notes to amend the provisions of the 1997 Indenture. Upon receipt of the requisite consents (the "Requisite Consents"), the Company, the guarantors party thereto and the trustee will enter into a supplemental indenture (the "Supplemental Indenture") giving effect to the proposed amendments, which would eliminate substantially all of the restrictive covenants and certain other related provisions (including certain events of default of the 1997 Indenture). In the event that all of the outstanding 9% Notes are not tendered to the Company pursuant to the Tender Offer and Consent Solicitation, or the Tender Offer and Consent Solicitation is not consummated for any reason, the proceeds from the Senior Subordinated Notes Offering not otherwise used in the Tender Offer and Consent Solicitation, together with cash on hand, will be used to redeem all of the $150 million aggregate principal amount of the 9% Notes that remain outstanding 5 after the completion or termination of the Tender Offer and Consent Solicitation in accordance with the terms and conditions under the 1997 Indenture (the "Back-End Redemption") and to pay related redemption premiums and transaction fees and expenses. In the event of a Back-End Redemption, the Company will issue an irrevocable notice of such redemption of the 9% Notes (the "9% Notes Notice of Redemption") promptly (but in any event within 2 business days) following expiration or termination of the Tender Offer and Consent Solicitation) in accordance with the terms and conditions under the 1997 Indenture and in accordance with the terms contained in the Consents. Prior to the date hereof, the Company has given notice to the lenders under the Term Loan Agreement (as defined below) to prepay the remaining amounts outstanding under the Term Loan Agreement in July 2004 (the "Term Loan Agreement Notice"). The Senior Subordinated Notes Offering, the Tender Offer and Consent Solicitation, the Back-End Redemption and the prepayment of the Term Loan Agreement in July 2004 are herein collectively referred to as the "Related Transactions". The Company hereby confirms its respective agreements with the Underwriters as follows: SECTION 1. REPRESENTATIONS AND WARRANTIES. The Company hereby represents, warrants and covenants to each Underwriter as follows: (a) Compliance with Registration Requirements. The Company meets the requirements for use of Form S-3 under the Securities Act. The Registration Statement has been declared effective by the Commission under the Securities Act. No stop order suspending the effectiveness of the Registration Statement is in effect and no proceedings for such purpose have been instituted or are pending or, to the knowledge of the Company, have been threatened by the Commission. Each preliminary prospectus and the prospectus filed as part of the Registration Statement as originally filed or as part of any amendment thereto, or filed pursuant to Rule 424 under the Securities Act, complied when so filed in all material respects with the Securities Act and each preliminary prospectus and the Prospectus delivered to the Underwriter for use in connection with the offer and sale of the Common Shares will, at the time of such delivery, be identical to any copies filed by electronic transmission pursuant to EDGAR (except as may be permitted by Regulation S-T under the Securities Act). The Registration Statement and any post-effective amendment thereto, at the time it became effective and at all subsequent times through the end of the Prospectus Delivery Period (as hereinafter defined), complied and will comply in all material respects with the Securities Act and did not and will not contain any 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. The Prospectus, as amended or supplemented, as of its date and at all subsequent times through the end of the Prospectus Delivery Period, did not and will not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. The representations and warranties set forth in the two immediately preceding sentences do not apply to statements in or omissions from the Registration Statement, or any post-effective amendment thereto, or the Prospectus, or any amendments or supplements thereto, made in reliance upon and in conformity with information relating to any Underwriter furnished to the Company in writing by or on behalf of the Representatives expressly for use therein. There are no contracts or other documents required to be 6 described in the Prospectus or to be filed as exhibits to the Registration Statement that have not been described or filed as required. (b) Exchange Act Compliance. The documents incorporated or deemed to be incorporated by reference in the Registration Statement and Prospectus, at the time they were or hereafter are filed with the Commission, complied and will comply in all material respects with the requirements of the Exchange Act, and, when read together with the other information in the Prospectus, at the time the Registration Statement became effective and at the First Closing Date and the Second Closing Date, as the case may be, 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, in the light of the circumstances under which they were made, not misleading. (c) Offering Materials Furnished to Underwriters. The Company has delivered to the Representatives one complete manually signed copy of the Registration Statement and of each consent and certificate of experts filed as a part thereof. (d) Distribution of Offering Material By the Company. The Company has not distributed and will not distribute, prior to the later of the Second Closing Date (as defined below) and the completion of the Underwriters' distribution of the Common Shares, any offering material in connection with the offering and sale of the Common Shares other than a preliminary prospectus, the Prospectus or the Registration Statement. (e) Authorization of the Underwriting Agreement. This Agreement has been duly authorized, executed and delivered by, and is a valid and binding agreement of, the Company, enforceable in accordance with its terms, except as rights to indemnification hereunder may be limited by applicable law and except as the enforcement hereof may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws relating to or affecting the rights and remedies of creditors or by general equitable principles. (f) Authorization of the Common Shares. The Common Shares to be purchased by the Underwriters from the Company have been duly authorized for issuance and sale pursuant to this Agreement and, when issued and delivered by the Company to the Underwriters pursuant to and in accordance with the terms of this Agreement against payment of the consideration set forth herein, will be validly issued, fully paid and nonassessable. (g) No Applicable Registration or Other Similar Rights. There are no persons with registration or other similar rights to have any equity or debt securities registered for sale under the Registration Statement or included in the offering contemplated by this Agreement or the concurrent Senior Subordinated Notes Offering. (h) No Material Adverse Change. Since the respective dates as of which information is given in the Prospectus, and except as otherwise stated therein, (i) there has been no material adverse change in the assets, liabilities, results of operations, condition (financial or otherwise), earnings, business affairs or prospects, whether or not arising from transactions in the ordinary course of business, of the Company and its subsidiaries, taken as a whole (any such change is called a "Material Adverse Change"), (ii) there has been no transaction entered into or material liability or obligation, direct, indirect or contingent, incurred by the Company or any subsidiary that is material to the Company and its subsidiaries, taken as a whole, and (iii) there has been no dividend declared, paid or made by the Company or, except for dividends paid to the Company or other subsidiaries, any of its subsidiaries on any class of its capital stock or repurchase or redemption by the Company or any of its subsidiaries of any class of capital stock. 7 (i) Independent Accountants. Deloitte & Touche LLP, the accountants who have audited and reported upon the financial statements of the Company and its subsidiaries and the related notes thereto, together with the supporting schedules filed with the Commission as part of the Registration Statement and included in the Prospectus, are independent public accountants with respect to the Company and its subsidiaries within the meaning of the Exchange Act. (j) Preparation of the Financial Statements. The financial statements of the Company and its consolidated subsidiaries and the related notes thereto filed with the Commission as a part of the Registration Statement and included in the Prospectus present fairly the consolidated financial position of the Company and its consolidated subsidiaries as of the dates indicated and the results of their operations for the periods specified; such financial statements have been prepared in conformity with generally accepted accounting principles applied on a consistent basis throughout the periods involved. No other financial statements or supporting schedules are required to be included in the Registration Statement. The historical financial data set forth in the Prospectus under the captions "Prospectus Supplement Summary - Summary Financial Data," "Selected Financial Data" and "Capitalization" fairly present the information set forth therein on a basis consistent with that of the audited financial statements contained in the Registration Statement. (k) Incorporation and Good Standing of the Company and its Subsidiaries. Each of the Company and its subsidiaries has been duly incorporated and is validly existing as a corporation in good standing under the laws of the jurisdiction of its incorporation, with full corporate power and authority to own, lease and operate its properties and conduct its business as presently conducted and as described in the Prospectus and to enter into and perform its obligations under this Agreement, to redeem the 11% Notes in accordance with the terms and conditions of the 2002 Indenture and to enter into and perform its obligations under the Related Transactions. Each of the Company and its subsidiaries is duly qualified as a foreign corporation to transact business and is in good standing in each jurisdiction in which such qualification is required, whether by reason of the ownership or leasing of property or the conduct of business, except where the failure to so qualify would not, singly or in the aggregate, have a Material Adverse Effect on the Company and its subsidiaries, taken as a whole. As used herein, "Material Adverse Effect," with respect to any person, means a material adverse effect on the assets, liabilities, results of operations, condition (financial or otherwise), earnings, business affairs or prospects, whether or not arising from transactions in the ordinary course of business, of such person and its subsidiaries, taken as a whole. Except with respect to Navajo Convenient Store Co., LLC (which is a majority owned subsidiary), all the issued and outstanding capital stock of each subsidiary of the Company has been duly authorized and validly issued, is fully paid and nonassessable and is owned by the Company or another subsidiary of the Company, free and clear of any security interest, mortgage, pledge, lien, charge or other encumbrance (each, a "Lien"), except for the Liens under the (i) $100 million Second Amended and Restated Credit Agreement, dated as of May 14, 2002, among the Company, the lenders party thereto and Bank of America, N.A., as administrative agent and as letter of credit bank, as amended by the First Amendment to Second Amended and Restated Credit Agreement, dated October 28, 2002, the Second Amendment to Second Amended and Restated Credit Agreement, dated September 30, 2003, and the Third Amendment to Second Amended and Restated Credit Agreement, dated February 9, 2004 (collectively, the "Revolving Credit Facility"), and (ii) Loan Agreement, dated as of May 14, 2002, among Giant Yorktown, Inc., Banc of America Leasing & Capital, LLC, and Wells Fargo Bank Nevada, National Association, as collateral agent, as amended by the Amendment to Loan Agreement and Omnibus Amendment, dated as of May 22, 2002, the Second Amendment to Loan Agreement and Omnibus Amendment, dated as of October 28, 2002, the Third Amendment to Loan Agreement and Omnibus Amendment, dated as of December 20, 2002, and the Fourth Amendment to Loan Agreement and Omnibus Amendment, dated as of February 9, 2004 (collectively, the "Term Loan Agreement"). The Company does not own or control, directly or indirectly, any corporation, 8 association or other entity other than the subsidiaries listed in Exhibit 21.1 to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2003. (l) Capitalization and Other Capital Stock Matters. The authorized, issued and outstanding capitalization is as set forth in the Prospectus under the caption "Capitalization". The Common Stock (including the Common Shares) conforms in all material respects to the description thereof contained in the Prospectus. All the issued and outstanding shares of the capital stock of the Company have been duly authorized and validly issued, are fully paid and non-assessable and have been issued in compliance with Federal and state securities laws. None of the outstanding shares of Common Stock were issued in violation of any preemptive rights, rights of first refusal or other similar rights to subscribe for or purchase securities of the Company. There are no authorized or outstanding options, warrants, preemptive rights, rights of first refusal or other rights to purchase, or equity or debt securities convertible into or exchangeable or exercisable for, any capital stock of the Company or any of its subsidiaries other than those accurately described in the Prospectus. The description of the Company's stock option, stock bonus and other stock plans or arrangements, and the options or other rights granted thereunder, set forth in the Prospectus accurately and fairly presents the information required to be shown with respect to such plans, arrangements, options and rights under the Securities Act and Exchange Act. (m) Stock Exchange Listing. The Common Shares have been approved for listing on the New York Stock Exchange, subject only to official notice of issuance. (n) Non-Contravention of Contracts; No Further Authorizations or Approvals Required. Neither the Company nor any of its subsidiaries is in violation of its charter or by-laws or is in default (or, with the giving of notice or lapse of time, would be in default) ("Default") in the performance or observance of any obligation, agreement, covenant or condition contained in any Contract (as defined below) or any applicable law, administrative regulation or administrative or court order or decree, except for such defaults as would not, singly or in the aggregate, have a Material Adverse Effect on the Company. The execution, delivery and performance by the Company of this Agreement and the issuance and delivery of the Common Shares and the consummation of the transactions contemplated herein and in the Prospectus (including the redemption of the 11% Notes in accordance with the terms and conditions of the 2002 Indenture) and the Related Transactions have been duly authorized by all necessary corporate action and will not conflict with or constitute a breach of, or a Default or a Debt Repayment Triggering Event (as defined below) under, or the loss of any material benefit under, or the termination of, or result in the creation or imposition of any Lien upon any property or assets of the Company or any of its subsidiaries pursuant to any contract, indenture, mortgage, loan agreement, note, lease, license or other instrument to which the Company or any of its subsidiaries is a party or by which any of them may be bound (including, without limitation, the 2002 Indenture, the 1997 Indenture, the Revolving Credit Facility and the Term Loan Agreement) or to which any of the property or assets of any of them is subject (each, a "Contract"), except for such conflicts, breaches, Defaults, losses or Liens as would not, singly or in the aggregate, have a Material Adverse Effect on the Company, nor will such action result in any violation of the provisions of the charter or bylaws of the Company or any of its subsidiaries or any applicable law, administrative regulation or administrative or court order or decree applicable to the Company or any of its subsidiaries. Except such as have been obtained by the Company and are in full force and effect under the Securities Act, applicable state securities or Blue Sky laws and from the New York Stock Exchange or the National Association of Securities Dealers, Inc. (the "NASD"), no consent, approval, authorization or order of, or notice to or filing with, any United States federal or state governmental or regulatory agency or body or any court of the United States or of any state thereof is required for the Company's execution, delivery and performance of this Agreement or the issuance and delivery of the Common Shares, or consummation of the transactions contemplated herein and in the Prospectus (including the 9 redemption of the 11% Notes in accordance with the terms and conditions of the 2002 Indenture) and the Related Transactions. As used herein, a "Debt Repayment Triggering Event" means any event or condition which gives, or with the giving of notice or lapse of time would give, the holder of any note, debenture or other evidence of indebtedness (or any person acting on such holder's behalf) the right to require the repurchase, redemption or repayment of all or a portion of such indebtedness by the Company or any of its subsidiaries. (o) Notice of Term Loan Prepayment. Prior to the date hereof, the Company has given the Term Loan Agreement Notice. (p) No Material Actions or Proceedings. Except as otherwise disclosed in the Prospectus, there is no action, suit or proceeding before or by any court or governmental agency or body now pending or, to the Company's knowledge, threatened against or affecting the Company or any of its subsidiaries which, if adversely determined, would result in a Material Adverse Effect on the Company, or would prevent or hinder the consummation of all the transactions contemplated by this Agreement and in the Prospectus (including the redemption of the 11% Notes in accordance with the terms and conditions of the 2002 Indenture) and the Related Transactions. (q) No Labor Disputes. No strike, work stoppage or other similar labor dispute with the employees of the Company or any subsidiary, or, to the knowledge of the Company, with the employees of any principal supplier of the Company or any subsidiary, exists or, to the knowledge of the Company, is threatened, which would have a Material Adverse Effect on the Company. (r) Intellectual Property Rights. The Company and its subsidiaries own or possess sufficient trademarks, trade names, copyrights, licenses, approvals, trade secrets and other similar rights (collectively, "Intellectual Property Rights") reasonably necessary to conduct their businesses as now conducted; and the expected expiration of any of such Intellectual Property Rights would not result in a Material Adverse Effect on the Company. Neither the Company nor any of its subsidiaries has received any notice of infringement or conflict with asserted Intellectual Property Rights of others, which infringement or conflict, if the subject of an unfavorable decision, would result in a Material Adverse Effect on the Company. (s) All Necessary Permits, etc. The Company and each subsidiary possesses such certificates, authorizations or permits issued by the appropriate regulatory or other governmental agencies or bodies as are necessary to conduct their respective businesses as currently conducted and as described in the Prospectus, each such certificate, authorization and permit being in full force and effect and the Company and each subsidiary is in compliance with the terms of each such certificate, authorization and permit, except where the failure to possess or comply with any such certificate, authorization or permit would not, singly or in the aggregate, have a Material Adverse Effect on the Company; and neither the Company nor any of its subsidiaries has received any notice of proceedings relating to the revocation or modification of, or non-compliance with, any such certificate, authorization or permit which, singly or in the aggregate, if the subject of an unfavorable decision, ruling or finding, would have a Material Adverse Effect on the Company. (t) Title to Properties. The Company and each subsidiary has good and marketable title to all the properties and assets reflected as owned in the financial statements of the Company and its consolidated subsidiaries referred to in Section 1(k) above (or elsewhere in the Prospectus) free and clear of any Liens, except for the Liens under the Revolving Credit Facility and the Term Loan Agreement and such as do not materially and adversely affect the value of such property and do not materially interfere with the use made or proposed to be made of such property by the Company or such subsidiary. The real property, improvements, equipment and personal property held under lease 10 by the Company or any subsidiary are held under valid and enforceable leases, with such exceptions as are not material and do not materially interfere with the use made or proposed to be made of such real property, improvements, equipment or personal property by the Company or such subsidiary. (u) Tax Law Compliance. All necessary federal, state and foreign income and franchise tax returns required to be filed by the Company and its subsidiaries have been filed, other than those filings being contested in good faith, and all material taxes, including withholding taxes, penalties and interest, assessments, fees and other charges due or claimed to be due from such entities have been paid, other than those being contested in good faith and for which adequate reserves have been provided or those currently payable without penalty or interest. The Company has made adequate charges, accruals and reserves in the applicable financial statements referred to in Section 1(j) above in respect of all federal, state and foreign income and franchise taxes for all periods as to which the tax liability of the Company or any of its subsidiaries has not been finally determined. (v) Company Not an "Investment Company". The Company is not and will not after receipt of payment for the Common Shares and the Senior Subordinated Notes in the concurrent Senior Subordinated Notes Offering be (i) an "investment company" or a company "controlled" by an investment company within the meaning of the United States Investment Company Act of 1940, as amended, (ii) a "holding company" or a "subsidiary company" of a holding company or an "affiliate" thereof within the meaning of the United States Public Utility Holding Company Act of 1935, as amended, or (iii) subject to regulation under the United States Federal Power Act or any federal or state statute or regulation limiting its ability to incur indebtedness for borrowed money. (w) Insurance. Except as otherwise disclosed in the Prospectus, each of the Company and its subsidiaries is insured by recognized, financially sound institutions with policies in such amounts and with such deductibles and covering such risks as are generally deemed adequate and customary for its business including, but not limited to, policies covering real and personal property owned or leased by the Company and its subsidiaries against theft, damage, destruction, acts of vandalism and earthquakes. Except as disclosed in the Prospectus, neither the Company nor any of its subsidiaries has any reason to believe that it will not be able (i) to renew its existing insurance coverage as and when such policies expire or (ii) to obtain comparable coverage from similar institutions as may be necessary or appropriate to conduct its business as now conducted and at a cost that would not result in a Material Adverse Effect on the Company, as the case may be. Neither the Company nor any of its subsidiaries has been denied any insurance coverage which it has sought or for which it has applied. (x) No Mandatory Redemption. Except as otherwise disclosed in the Prospectus, the Company is not actively considering any plan or transaction that, if consummated, would result in any mandatory requirement to redeem, or make an offer to purchase, any securities of the Company pursuant to the terms thereof. (y) Solvency. The Company is, and immediately after the First Closing Date and the Second Closing Date, as the case may be (after giving effect to the sale of the Common Shares and the application of the proceeds therefrom, and the Related Transactions), will be, Solvent. As used herein, the term "Solvent" means, with respect to the Company on a particular date, that on such date the fair market value of the assets of the Company is greater than the total amount of liabilities (including contingent liabilities) of the Company, (ii) the present fair salable value of the assets of the Company is greater than the amount that will be required to pay the probable liabilities of the Company on its debts as they become absolute and matured, (iii) the Company is able to realize upon its assets and pay its debts and other liabilities, including contingent obligations, as they mature and (iv) the Company does not have unreasonably small capital. 11 (z) No Price Stabilization or Manipulation. The Company has not taken and will not take, directly or indirectly, any action designed to or that might be reasonably expected to cause or result in stabilization or manipulation of the price of the Common Stock to facilitate the sale or resale of the Common Shares. (aa) Related Party Transactions. There are no business relationships or related-party transactions involving the Company or any subsidiary or any other person required to be described in the Prospectus which have not been described as required. (bb) No Unlawful Contributions or Other Payments. Neither the Company nor any of its subsidiaries nor, to the knowledge of the senior management of the Company, any employee or agent of the Company or any subsidiary, has, at any time during the last five years, made any contribution or other payment to any official of, or candidate for, any federal, state or foreign office in violation of any law where such violation would result in a Material Adverse Change or be of the character required to be disclosed in the Prospectus. (cc) Company's Accounting System. Except as otherwise disclosed in the Prospectus, the Company maintains a system of accounting controls sufficient to provide reasonable assurances that (i) transactions are executed in accordance with management's general or specific authorization; (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with generally accepted accounting principles and to maintain accountability for assets; (iii) access to assets is permitted only in accordance with management's general or specific authorization; and (iv) the recorded accountability for assets is compared with existing assets at reasonable intervals and appropriate action is taken with respect to any differences. (dd) Compliance with Environmental Laws. Except as otherwise disclosed in the Prospectus or as would not, singly or in the aggregate, result in a Material Adverse Effect on the Company, as the case may be, (i) neither the Company nor any of its subsidiaries is in violation of any federal, state, local or foreign law or regulation relating to pollution or protection of human health or the environment (including, without limitation, ambient air, surface water, groundwater, land surface or subsurface strata) or wildlife, including, without limitation, laws and regulations relating to emissions, discharges, releases or threatened releases of chemicals, pollutants, contaminants, wastes, toxic substances, hazardous substances, petroleum and petroleum products (collectively, "Materials of Environmental Concern"), or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of Materials of Environmental Concern (collectively, "Environmental Laws"), which violation includes, but is not limited to, noncompliance with any permits or other governmental authorizations required for the operation of the business of the Company or any of its subsidiaries under applicable Environmental Laws, or noncompliance with the terms and conditions thereof, nor has the Company or any of its subsidiaries received any written communication, whether from a governmental authority, citizens group, employee or otherwise, that alleges that such the Company or such subsidiary is in violation of any Environmental Law; (ii) there is no claim, action or cause of action filed with a court or governmental authority, nor investigation with respect to which the Company has received written notice, and no written notice by any person or entity alleging potential liability for investigatory costs, cleanup costs, governmental responses costs, natural resources damages, property damages, personal injuries, attorneys' fees or penalties arising out of, based on or resulting from the presence, or release into the environment, of any Material of Environmental Concern at any location owned, leased or operated by the Company or any of its subsidiaries, now or in the past (collectively, "Environmental Claims"), pending, or, to the best of the Company's knowledge, threatened or contemplated against the Company or any of its subsidiaries or any person or entity whose liability for any Environmental Claim the Company or any of is subsidiaries has retained or assumed either contractually or by operation of law; and (iii) to the 12 best of the Company's knowledge, there are no past or present actions, activities, circumstances, conditions, events or incidents, including, without limitation, the release, emission, discharge, presence or disposal of any Material of Environmental Concern, that reasonably could result in a violation of any Environmental Law or form the basis of a potential Environmental Claim against the Company or any of its subsidiaries or against any person or entity whose liability for any Environmental Claim the Company or any of its subsidiaries has retained or assumed either contractually or by operation of law. (ee) Periodic Review of Costs of Environmental Compliance. In the ordinary course of its business, the Company conducts a periodic review of the effect of Environmental Laws on its business, operations and properties, in the course of which it identifies and evaluates associated costs and liabilities (including, without limitation, any capital or operating expenditures required for clean-up, closure of properties or compliance with Environmental Laws or any permit, license or approval, any related constraints on operating activities and any potential liabilities to third parties). On the basis of such review and the amount of its established reserves, the Company has reasonably concluded that such associated costs and liabilities would not, singly or in the aggregate, result in a Material Adverse Effect on the Company, except as otherwise disclosed in the Prospectus. (ff) ERISA Compliance. The Company or such subsidiary and any "employee benefit plan" (as defined under the Employee Retirement Income Security Act of 1974, as amended, and the regulations and published interpretations thereunder (collectively, "ERISA")) established or maintained by the Company, its subsidiaries or their "ERISA Affiliates" (as defined below) are and will be in compliance in all material respects with ERISA. "ERISA Affiliate" means, with respect to the Company or a subsidiary, any member of any group of organizations described in Section 414(b), (c), (m) or (o) of the Internal Revenue Code of 1986, as amended, and the regulations and published interpretations thereunder (the "Code") of which the Company or such subsidiary is a member. No "reportable event" (as defined under ERISA and for which notice has not been waived by applicable regulations) has occurred or is reasonably expected to occur with respect to any "employee benefit plan" established or maintained by the Company, its subsidiaries or any of their ERISA Affiliates. No "employee benefit plan" established or maintained by the Company, its subsidiaries or any of their ERISA Affiliates, if such "employee benefit plan" were terminated, would have any "amount of unfunded benefit liabilities" (as defined in Title IV of ERISA), except that, in the case of the Giant Yorktown Cash Balance Plan, the amount of such unfunded benefit liabilities, if any, would not have a Material Adverse Effect on the Company. Neither the Company, its subsidiaries nor any of their ERISA Affiliates has incurred or reasonably expects to incur any liability under (i) Title IV of ERISA with respect to termination of, or withdrawal from, any "employee benefit plan" or (ii) Sections 412, 4971, 4975 or 4980B of the Code. Each "employee benefit plan" established or maintained by the Company, its subsidiaries or any of their ERISA Affiliates that is intended to be qualified under Section 401 of the Code is and will be so qualified and, to the best of the Company's knowledge, nothing has occurred, whether by action or failure to act, which would cause the loss of such qualification. (gg) Brokers. There is no broker, finder or other party that is entitled to receive from the Company any brokerage or finder's fee or other fee or commission as a result of any transactions contemplated by this Agreement, except as provided in this Agreement. (hh) No Outstanding Loans or Other Indebtedness. Except as otherwise disclosed in the Prospectus, there are no outstanding loans, advances (except normal advances for business expenses in the ordinary course of business) or guarantees of indebtedness by the Company to or for the benefit of any of the officers or directors of the Company. 13 (ii) Compliance with Laws. The Company has not been advised, and has no reason to believe, that it and each of its subsidiaries are not conducting business in compliance with all applicable laws, rules and regulations of the jurisdictions in which it is conducting business, except as otherwise disclosed in the Prospectus or except where failure to be so in compliance would not result in a Material Adverse Change. (jj) No Event of Default. No event of default exists under any contract, indenture, mortgage, loan agreement, note, lease or other agreement or instrument constituting Senior Indebtedness (as defined in the 2002 Indenture). (kk) Disclosure Controls and Procedures. The Company has established and maintains disclosure controls and procedures (as such term is defined in Rule 13a-14 under the Exchange Act), which (i) are designed to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to the Company's principal executive officer and its principal financial officer by others within those entities, particularly during the periods in which the periodic reports required under the Exchange Act are being prepared, (ii) have been evaluated for effectiveness as of a date within 90 days prior to the filing of the Company's most recent annual or quarterly report filed with the Commission and (iii) are effective in all material respects to perform the functions for which they were established. Based on the evaluation of the Company's disclosure controls and procedures described above, the Company is not aware of (a) any significant deficiency in the design or operation of internal controls which could adversely affect the Company's ability to record, process, summarize and report financial data or any material weaknesses in internal controls or (b) any fraud, whether or not material, that involves management or other employees who have a significant role in the Company's internal controls. Since the most recent evaluation of the Company's disclosure controls and procedures described above, there have been no significant changes in internal controls or in other factors that could significantly affect internal controls. Any certificate signed by an officer of the Company and delivered to the Representatives or to counsel for the Underwriters shall be deemed to be a representation and warranty by the Company to each Underwriter as to the matters set forth therein. The Company acknowledges that the Underwriters and, for purposes of the opinions to be delivered pursuant to Section 5 hereof, counsel to the Company and counsel to the Underwriters, will rely upon the accuracy and truthfulness of the foregoing representations and hereby consents to such reliance. SECTION 2. PURCHASE, SALE AND DELIVERY OF THE COMMON SHARES. (a) The Firm Common Shares. Upon the terms herein set forth, the Company agrees to issue and sell to the several Underwriters an aggregate of 3,000,000 Firm Common Shares. On the basis of the representations, warranties and agreements herein contained, and upon the terms but subject to the conditions herein set forth, the Underwriters agree, severally and not jointly, to purchase from the Company the respective number of Firm Common Shares set forth opposite their names on Schedule A. The purchase price per Firm Common Share to be paid by the several Underwriters to the Company shall be $[_______] per share. (b) The First Closing Date. Delivery of certificates for the Firm Common Shares to be purchased by the Underwriters and payment therefor shall be made at the offices of Shearman & Sterling LLP, 599 Lexington Avenue, New York, New York 10022 (or such other place as may be agreed to by the Company and the Representatives) at 9:00 a.m. New York time, on May [__], 2004 14 or such other time and date as the Representatives and the Company shall agree (the time and date of such closing are called the "First Closing Date"). (c) The Optional Common Shares; the Second Closing Date. In addition, on the basis of the representations, warranties and agreements herein contained, and upon the terms but subject to the conditions herein set forth, the Company hereby grants an option to the several Underwriters to purchase, severally and not jointly, up to an aggregate of 450,000 Optional Common Shares from the Company at the purchase price per share to be paid by the Underwriters for the Firm Common Shares. The option granted hereunder may be exercised by the Underwriters solely for the purpose of covering any over-allotments in connection with the sale and distribution of the Firm Common Shares. The option granted hereunder may be exercised at any time (but not more than once) upon notice by the Representatives to the Company, which notice may be given at any time within 30 days from the date of this Agreement. Such notice shall set forth (i) the aggregate number of Optional Common Shares as to which the Underwriters are exercising the option, (ii) the names and denominations in which the certificates for the Optional Common Shares are to be registered and (iii) the time, date and place at which such certificates will be delivered (which time and date may be simultaneous with, but not earlier than, the First Closing Date; and in such case the term "First Closing Date" shall refer to the time and date of delivery of certificates for the Firm Common Shares and the Optional Common Shares). Such time and date of delivery, if subsequent to the First Closing Date, is called the "Second Closing Date" and shall be determined by the Representatives and shall not be earlier than three nor later than five full business days after delivery of such notice of exercise. If any Optional Common Shares are to be purchased, (a) each Underwriter agrees, severally and not jointly, to purchase the number of Optional Common Shares (subject to such adjustments to eliminate fractional shares as the Representatives may determine) that bears the same proportion to the total number of Optional Common Shares to be purchased as the number of Firm Common Shares set forth on Schedule A opposite the name of such Underwriter bears to the total number of Firm Common Shares and (b) the Company agrees to sell up to an aggregate of 450,000 Optional Common Shares as requested by the Representatives. The Representatives may cancel the option at any time prior to its expiration by giving written notice of such cancellation to the Company. (d) Public Offering of the Common Shares. The Representatives hereby advise the Company that the Underwriters intend to offer for sale to the public, as described in the Prospectus, their respective portions of the Common Shares as soon after this Agreement has been executed and the Registration Statement has been declared effective as the Representatives, in their sole judgment, have determined is advisable and practicable. (e) Payment for the Common Shares. Payment for the Common Shares to be sold by the Company shall be made at the First Closing Date (and, if applicable, at the Second Closing Date) by wire transfer of immediately available funds to the order of the Company. It is understood that the Representatives have been authorized, for their own account and the accounts of the several Underwriters, to accept delivery of and receipt for, and make payment of the purchase price for, the Firm Common Shares and any Optional Common Shares the Underwriters have agreed to purchase. BAS, individually and not as a Representative of the Underwriters, may (but shall not be obligated to) make payment for any Common Shares to be purchased by any Underwriter whose funds shall not have been received by the Representatives by the First Closing Date or the Second Closing Date, as the case may be, for the account of such Underwriter, but any such payment shall not relieve such Underwriter from any of its obligations under this Agreement. 15 (f) Delivery of the Common Shares. The Company shall deliver, or cause to be delivered, to the Representatives for the accounts of the several Underwriters certificates for the Firm Common Shares to be sold by them at the First Closing Date, against the irrevocable release of a wire transfer of immediately available funds for the amount of the purchase price therefor. The Company shall also deliver, or cause to be delivered, to the Representatives for the accounts of the several Underwriters, certificates for the Optional Common Shares the Underwriters have agreed to purchase at the First Closing Date or the Second Closing Date, as the case may be, against the irrevocable release of a wire transfer of immediately available funds for the amount of the purchase price therefor. The certificates for the Common Shares shall be in definitive form and registered in such names and denominations as the Representatives shall have requested at least two full business days prior to the First Closing Date (or the Second Closing Date, as the case may be) and shall be made available for inspection on the business day preceding the First Closing Date (or the Second Closing Date, as the case may be) at a location in New York City as the Representatives may designate. Time shall be of the essence, and delivery at the time and place specified in this Agreement is a further condition to the obligations of the Underwriters. (g) Delivery of Prospectus to the Underwriters. Not later than 12:00 p.m. on the second business day following the date the Common Shares are first released by the Underwriters for sale to the public, the Company shall deliver or cause to be delivered, copies of the Prospectus in such quantities and at such places as the Representatives shall request. SECTION 3. ADDITIONAL COVENANTS OF THE COMPANY. The Company further covenants and agrees with each Underwriter as follows: (a) Representatives' Review of Proposed Amendments and Supplements. During such period beginning on the date hereof and ending on the later of the First Closing Date or such date, as in the opinion of counsel for the Underwriters, the Prospectus is no longer required by law to be delivered in connection with sales by an Underwriter or dealer (the "Prospectus Delivery Period"), prior to amending or supplementing the Registration Statement (including any registration statement filed under Rule 462(b) under the Securities Act) or the Prospectus, the Company shall furnish to the Representatives for review a copy of each such proposed amendment or supplement, and the Company shall not file any such proposed amendment or supplement to which the Representatives or their counsel reasonably object. (b) Securities Act Compliance. After the date of this Agreement, the Company shall promptly advise the Representatives in writing (i) of the receipt of any comments of, or requests for additional or supplemental information from, the Commission, (ii) of the time and date of any filing of any post-effective amendment to the Registration Statement or any amendment or supplement to any preliminary prospectus or the Prospectus, (iii) of the time and date that any post-effective amendment to the Registration Statement becomes effective and (iv) of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement or any post-effective amendment thereto or of any order preventing or suspending the use of any preliminary prospectus or the Prospectus, or of any proceedings to remove, suspend or terminate from listing or quotation the Common Stock from any securities exchange upon which it is listed for trading or included or designated for quotation, or of the threatening or initiation of any proceedings for any of such purposes. If the Commission shall enter any such stop order at any time, the Company will use its best efforts to obtain the lifting of such order at the earliest possible moment. Additionally, the Company agrees that it shall comply with the provisions of Rules 424(b), 430A and 434, as applicable, under the Securities Act and will use its reasonable efforts to confirm that any filings made by the Company under such Rule 424(b) were received in a timely manner by the Commission. 16 (c) Notification of Breach of this Agreement. The Company shall promptly notify the Representatives if the Company discovers that any of its representations contained in this Agreement is not, at any time prior to the completion of the distribution of the Common Shares, true and correct, or if the Company has at any such time breached any of its obligations hereunder. (d) Amendments and Supplements to the Prospectus and Other Securities Act Matters. If, during the Prospectus Delivery Period, any event shall occur or condition exist as a result of which it is necessary to amend or supplement the Prospectus in order to make the statements therein, in the light of the circumstances when the Prospectus is delivered to a purchaser, not misleading, or if in the opinion of the Representatives or counsel for the Underwriters it is otherwise necessary to amend or supplement the Prospectus to comply with law, the Company agrees to promptly prepare (subject to Section 3(A)(a) hereof), file with the Commission and furnish at its own expense to the Underwriters and to dealers, amendments or supplements to the Prospectus so that the statements in the Prospectus as so amended or supplemented will not, in the light of the circumstances when the Prospectus is delivered to a purchaser, be misleading or so that the Prospectus, as amended or supplemented, will comply with law. (e) Copies of any Amendments and Supplements to the Prospectus. The Company agrees to furnish the Representatives, without charge, during the Prospectus Delivery Period, as many copies of the Prospectus and any amendments and supplements thereto (including any documents incorporated or deemed incorporated by reference therein) as the Representatives may reasonably request. (f) Blue Sky Compliance. The Company shall cooperate with the Representatives and counsel for the Underwriters to qualify or register the Common Shares for sale under (or obtain exemptions from the application of) the state securities or Blue Sky laws of those jurisdictions designated by the Representatives, shall comply with such laws and shall continue such qualifications, registrations and exemptions in effect so long as required for the distribution of the Common Shares. The Company shall not be required to qualify as a foreign corporation or to take any action that would subject it to general service of process in any such jurisdiction where it is not presently qualified or where it would be subject to taxation as a foreign corporation. The Company will advise the Representatives promptly of the suspension of the qualification or registration of (or any such exemption relating to) the Common Shares for offering, sale or trading in any jurisdiction or any initiation or threat of any proceeding for any such purpose, and in the event of the issuance of any order suspending such qualification, registration or exemption, the Company shall use its best efforts to obtain the withdrawal thereof at the earliest possible moment. (g) Use of Proceeds. The Company shall apply the net proceeds from the sale of the Common Shares sold by it and, if completed, the net proceeds of the Senior Subordinated Notes Offering in the manner described under the caption "Use of Proceeds" in the Prospectus. (h) Transfer Agent. The Company shall engage and maintain, at its expense, a registrar and transfer agent for the Common Stock. (i) Earnings Statement. As soon as practicable, the Company will make generally available to its security holders and to the Representatives an earnings statement (which need not be audited) covering the twelve-month period ending June 30, 2004 that satisfies the provisions of Section 11(a) of the Securities Act. (j) Periodic Reporting Obligations. During the Prospectus Delivery Period the Company shall file, on a timely basis, with the Commission and the New York Stock Exchange all reports and documents required to be filed under the Exchange Act. 17 (k) Company to Provide Interim Financial Statements. Prior to the Closing Date, the Company will furnish the Underwriters, as soon as they have been prepared by or are available to the Company, a copy of any unaudited interim financial statements of the Company for any period subsequent to the period covered by the most recent financial statements appearing in the Registration Statement and the Prospectus. (l) Listing. The Company will use its best efforts to list, subject to notice of issuance, the Common Shares on the New York Stock Exchange. (m) Agreement Not to Offer or Sell Additional Securities. During the period commencing on the date hereof and ending on the 90th day following the date of the Prospectus, the Company will not, without the prior written consent of BAS (which consent may be withheld at the sole discretion of BAS), directly or indirectly, sell, offer, contract or grant any option to sell, pledge, transfer or establish an open "put equivalent position" within the meaning of Rule 16a-1(h) under the Exchange Act, or otherwise dispose of or transfer, or announce the offering of, or file any registration statement under the Securities Act in respect of, any shares of Common Stock, options or warrants to acquire shares of the Common Stock or securities exchangeable or exercisable for or convertible into shares of Common Stock (other than as contemplated by this Agreement with respect to the Common Shares); provided, however, that the Company may issue shares of its Common Stock or options to purchase its Common Stock, or Common Stock upon exercise of options, pursuant to any stock option, stock bonus or other stock plan or arrangement described in the Prospectus, but only if the executive officers and directors that are holders of such shares, options, or shares issued upon exercise of such options, agree in writing not to sell, offer, dispose of or otherwise transfer any such shares or options during such 90 day period without the prior written consent of BAS (which consent may be withheld at the sole discretion of the BAS). Notwithstanding the foregoing, if (x) during the last 17 days of the 90-day restricted period the Company issues an earnings release or material news or a material event relating to the Company occurs; or (y) prior to the expiration of the 90-day restricted period, the Company announces that it will release earnings results during the 16-day period beginning on the last day of the 90-day period; the restrictions imposed in this clause (m) shall continue to apply until the expiration of the 18-day period beginning on the issuance of the earnings release or the occurrence of the material news or material event; provided however, that this sentence shall not apply if the research published or distributed on the Company is compliant under Rule 139 of the Securities Act and the Company's securities are actively traded as defined in Rule 101(c)(1) of Regulation M of the Exchange Act. (n) Future Reports to the Representatives. During the period of three years hereafter the Company will furnish to the Representatives at 700 Louisiana, 8th Floor, Houston, Texas 77002-2700, Attention: Scott Warrander: (i) as soon as practicable after the end of each fiscal year, copies of the Annual Report of the Company containing the balance sheet of the Company as of the close of such fiscal year and statements of income, stockholders' equity and cash flows for the year then ended and the opinion thereon of the Company's independent public or certified public accountants; (ii) as soon as practicable after the filing thereof, copies of each proxy statement, Annual Report on Form 10-K, Quarterly Report on Form 10-Q, Current Report on Form 8-K or other report filed by the Company with the Commission, the NASD or any securities exchange; and (iii) as soon as available, copies of any report or communication of the Company mailed generally to holders of its capital stock. (o) Investment Limitation. The Company shall not invest, or otherwise use the proceeds received by the Company from its sale of the Common Shares in such a manner as would require the Company or any of its subsidiaries to register as an investment company under the Investment Company Act. 18 (p) No Manipulation of Price. Neither the Company nor any of its affiliates will take, directly or indirectly, any action designed to or which constitutes or which might reasonably be expected to cause or result in stabilization or manipulation of the price of any securities of the Company at any time prior to the Representatives notifying the Company of the completion of the distribution of the Common Shares. (q) Existing Lock-Up Agreement. The Company will enforce all existing agreements between the Company and any of its security holders that prohibit the sale, transfer, assignment, pledge or hypothecation of any of the Company's securities in connection with a public offering by the Company. In addition, the Company will direct the transfer agent to place stop transfer restrictions upon any such securities of the Company that are bound by such existing "lock-up" agreements for the duration of the periods contemplated in such agreements. SECTION 4. PAYMENT OF EXPENSES. The Company agrees to pay all costs, fees and expenses incurred in connection with the performance of its obligations hereunder and in connection with the transactions contemplated hereby, including without limitation (i) all expenses incident to the issuance and delivery of the Common Shares (including all printing and engraving costs), (ii) all fees and expenses of the registrar and transfer agent of the Common Stock, (iii) all necessary issue, transfer and other stamp taxes in connection with the issuance and sale of the Common Shares to the Underwriters, (iv) all fees and expenses of the Company's counsel, independent public or certified public accountants and other advisors, (v) all costs and expenses incurred in connection with the preparation, printing, filing, shipping and distribution of the Registration Statement (including financial statements and exhibits), each preliminary prospectus and the Prospectus, and all amendments and supplements thereto, and this Agreement, (vi) all filing fees, attorneys' fees and expenses incurred by the Company or the Underwriters in connection with qualifying or registering (or obtaining exemptions from the qualification or registration of) all or any part of the Common Shares for offer and sale under the state securities or Blue Sky laws, and, if requested by the Representatives, preparing and printing a "Blue Sky Survey" or memorandum, and any supplements thereto, advising the Underwriters of such qualifications, registrations and exemptions, (vii) any filing fees incident to, and any reasonable fees and disbursements of counsel for the Underwriters in connection with, the NASD's review and approval of the Underwriters' participation in the offering and distribution of the Common Shares, (viii) the fees and disbursements associated with listing the Common Shares on the New York Stock Exchange, and (ix) all other fees, costs and expenses referred to in Item 14 of Part II of the Registration Statement. Except as provided in clauses (vi) and (vii) of this Section 4, Section 6, Section 8 and Section 9 hereof, the Underwriters shall pay their own expenses, including the fees and disbursements of their counsel. SECTION 5. CONDITIONS TO OBLIGATIONS OF THE UNDERWRITERS. The obligations of the several Underwriters to purchase and pay for the Common Shares as provided herein on the First Closing Date and, with respect to the Optional Common Shares, the Second Closing Date, shall be subject to the accuracy of the representations and warranties on the part of the Company set forth in Section 1 hereof as of the date hereof and as of the First Closing Date as though then made and, with respect to the Optional Common Shares, as of the Second Closing Date as though then made, to the timely performance by the Company of their respective covenants and other obligations hereunder, and to each of the following additional conditions: 19 (a) No Untrue Statements; Inadvisable to Proceed. The Representatives shall not have disclosed to the Company on or prior to the First Closing Date or the Second Closing Date, as the case may be, that the Prospectus contains an untrue statement of a fact which, in the reasonable opinion of the Representatives, is material or omits to state a fact which, in the reasonable opinion of the Representatives, is material and is necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; the Company shall not have prepared and distributed any amendment or supplement to the Prospectus either without prior review by, or over the reasonable objection of, the Representatives; and no change shall have occurred under the Securities Act which in the reasonable judgment of the Representatives makes it impracticable or inadvisable to proceed with the purchase, sale and delivery of the Common Shares on the terms and in the manner contemplated in the Prospectus. (b) Corporate Proceedings. All corporate proceedings and other legal matters incident to the authorization, form and validity of this Agreement, the Prospectus and all other legal matters relating to this Agreement and the transactions contemplated hereby and thereby (including the redemption of the 11% Notes in accordance with the terms and conditions of the 2002 Indenture) shall be reasonably satisfactory in all respects to the Representatives and their counsel, and the Company and each subsidiary shall have furnished to the Representatives all documents and information that they may reasonably request to enable them to pass upon such matters. (c) Resolutions. The Company shall have delivered to the Representatives a certified copy of the resolutions of the Board of Directors (or any authorized committee thereof, together with the resolutions of the Board of Directors establishing such committee) of the Company approving the issuance of the Common Shares on the terms and conditions of this Agreement and approving the terms hereof and authorizing the execution and delivery of this Agreement and all other documents relevant to the issue of the Common Shares by the Company (including the redemption of the 11% Notes in accordance with the terms and conditions of the 2002 Indenture). (d) Accountant's Comfort Letter. The Company shall have furnished to the Representatives on the date hereof a letter of Deloitte & Touche LLP, independent public accountants for the Company, addressed to the Underwriters and dated the date hereof, in form and substance reasonably satisfactory to the Representatives, containing statements and information of the type ordinarily included in accountant's "comfort letters" to initial purchasers, delivered according to Statement of Auditing Standards Nos. 72 and 76 (or any successor bulletins), with respect to the Company's audited financial statements and unaudited pro forma financial statements and certain financial information contained in the Registration Statement and the Prospectus (and the Representatives shall have received an additional two conformed copies of such accountants' letter for each of the several underwriters). (e) Bring-Down Comfort Letters. The Company shall have furnished to the Representatives on each of the First Closing Date and the Second Closing Date, a letter of Deloitte & Touche LLP, independent public accountants for the Company, addressed to the Representatives and dated as of such Closing Date, in form and substance reasonably satisfactory to the Representatives, to the effect that they reaffirm the statements made in the letter furnished by them pursuant to Section 5(d), except that the specified date referred to therein for the carrying out of procedures shall be no more than three business days prior to the First Closing Date or Second Closing Date, as the case may be (and the Representatives shall have received an additional two conformed copies of such accountants' letter for each of the several underwriters). 20 (f) Compliance with Registration Requirements; No Stop Order; No Objection from NASD. For the period from and after effectiveness of this Agreement and prior to the First Closing Date and, with respect to the Optional Common Shares, the Second Closing Date: (i) the Company shall have filed the Prospectus with the Commission (including the information required by Rule 430A under the Securities Act) in the manner and within the time period required by Rule 424(b) under the Securities Act; or the Company shall have filed a post-effective amendment to the Registration Statement containing the information required by such Rule 430A, and such post-effective amendment shall have become effective; or, if the Company elected to rely upon Rule 434 under the Securities Act and obtained the Representatives' consent thereto, the Company shall have filed a Term Sheet with the Commission in the manner and within the time period required by such Rule 424(b); (ii) no stop order suspending the effectiveness of the Registration Statement or any post-effective amendment to the Registration Statement, shall be in effect and no proceedings for such purpose shall have been instituted or threatened by the Commission; and (iii) the NASD shall have raised no objection to the fairness and reasonableness of the underwriting terms and arrangements. (g) No Material Adverse Change. For the period from and after the date of this Agreement and prior to the First Closing Date and, with respect to the Optional Common Shares, the Second Closing Date, in the reasonable judgment of the Representatives there shall not have occurred any Material Adverse Change. (h) Opinion of Counsel for the Company. On each of the First Closing Date and the Second Closing Date, the Representatives shall have received (i) the favorable opinion of Fennemore Craig, P.C., United States counsel for the Company, addressed to the Representatives and dated as of such Closing Date, the form of which is attached as Exhibit A, and (ii) the favorable opinion of Kim Bullerdick, Esq., the General Counsel of the Company, addressed to the Representatives and dated as of such Closing Date, the form of which is attached as Exhibit B (and the Representatives shall have received an additional two conformed copies of each such counsel's legal opinion for each of the several Underwriters). (i) Opinion of Counsel for the Underwriters. On each of the First Closing Date and the Second Closing Date, the Representatives shall have received the favorable opinion of Shearman & Sterling LLP, counsel for the Underwriters, dated as of such Closing Date, (and the Representatives shall have received an additional two conformed copies of such counsel's legal opinion for each of the several Underwriters) with respect to such matters as the Representatives may reasonably request. (j) Officers' Certificate. On each of the First Closing Date and the Second Closing Date the Representatives shall have received a written certificate executed by the President or a Vice President and the principal financial or accounting officer of the Company, dated as of such Closing Date, to the effect set forth in subsection (f)(ii) of this Section 5, and further to the effect that: (i) for the period from and after the date of this Agreement and prior to such Closing Date, there has not occurred any Material Adverse Change; (ii) the representations, warranties and covenants of the Company set forth in Section 1 of this Agreement are true and correct with the same force and effect as though expressly made on and as of such Closing Date; 21 (iii) the Company and each subsidiary has complied with all the agreements hereunder and satisfied all the conditions on its part to be performed or satisfied hereunder at or prior to such Closing Date; and (iv) there shall not have occurred any downgrading, nor shall any notice have been given of any intended or potential downgrading or of any review for a possible change that does not indicate the direction of the possible change, in the rating accorded any securities of the Company or any of its subsidiaries by any "nationally recognized statistical rating organization" as such term is defined for purposes of Rule 436 under the Securities Act. (k) Other Certificates. The Company shall have furnished to the Representatives such further certificates and documents, including certificates of officers of the Company's subsidiaries, as the Representatives shall have reasonably requested. (l) Lock-Up Agreement from Certain Securityholders of the Company. On or prior to the date hereof, the Company shall have furnished to the Representatives an agreement in the form of Exhibit C hereto from each officer and director listed on Schedule B hereto, and such agreement shall be in full force and effect on each of the First Closing Date and the Second Closing Date. (m) Additional Documents. On or before each of the First Closing Date and the Second Closing Date, the Representatives and counsel for the Underwriters shall have received such information, documents and opinions as they may reasonably require for the purposes of enabling them to pass upon the issuance and sale of the Common Shares as contemplated herein, or in order to evidence the accuracy of any of the representations and warranties, or the satisfaction of any of the conditions or agreements, herein contained. (n) Notice of Redemption for 11% Notes. On the First Closing Date and the Second Closing Date, as the case may be, the Company shall have given the 11% Notes Notice of Redemption for the redemption of the 11% Notes in accordance with the terms and conditions of the 2002 Indenture. All opinions (other than the opinion set forth in Section 5(i) above), letters, evidences and certificates mentioned above or elsewhere in this Agreement shall be deemed to be in compliance with the provisions hereof only if they are in form and substance reasonably satisfactory to Shearman & Sterling LLP, counsel to the Underwriters. If any condition specified in this Section 5 is not satisfied when and as required to be satisfied, this Agreement may be terminated by the Representatives by notice to the Company at any time on or prior to the First Closing Date and, with respect to the Optional Common Shares, at any time prior to the Second Closing Date, which termination shall be without liability on the part of any party to any other party, except that Section 4, Section 6, Section 8 and Section 9 shall at all times be effective and shall survive such termination. SECTION 6. REIMBURSEMENT OF UNDERWRITERS' EXPENSES. If this Agreement is terminated by the Representatives pursuant to Section 5, Section 7, Section 10 or Section 11, or if the sale to the Underwriters of the Common Shares on the First Closing Date is not consummated because of any refusal, inability or failure on the part of the Company to perform any agreement herein or to comply with any provision hereof, the Company agrees to reimburse the Representatives and the other Underwriters (or such Underwriters as have terminated this Agreement with respect to themselves), severally, upon demand for all out-of-pocket expenses that shall have been reasonably incurred by the Representatives and the other Underwriters 22 in connection with the proposed purchase and the offering and sale of the Common Shares, including but not limited to fees and disbursements of counsel, printing expenses, travel expenses, postage, facsimile and telephone charges. SECTION 7. EFFECTIVENESS OF THIS AGREEMENT. This Agreement shall not become effective until the later of (i) the execution of this Agreement by the parties hereto and (ii) notification by the Commission to the Company and the Representative of the effectiveness of the Registration Statement under the Securities Act. Prior to such effectiveness, this Agreement may be terminated by any party by notice to each of the other parties hereto, and any such termination shall be without liability on the part of (a) the Company to any Underwriter, except that the Company shall be obligated to reimburse the expenses of the Representative and the Underwriters pursuant to Sections 4 and 6 hereof, (b) of any Underwriter to the Company, or (c) of any party hereto to any other party except that the provisions of Section 8 and Section 9 shall at all times be effective and shall survive such termination. SECTION 8. INDEMNIFICATION. (a) Indemnification of the Underwriters by the Company. The Company agrees to indemnify and hold harmless each Underwriter, its directors, officers and employees, and each person, if any, who controls any Underwriter within the meaning of the Securities Act and the Exchange Act against any loss, claim, damage, liability or expense, as incurred, to which such Underwriter or such controlling person may become subject, under the Securities Act, the Exchange Act or other federal or state statutory law or regulation, or at common law or otherwise (including in settlement of any litigation, if such settlement is effected with the written consent of the Company), insofar as such loss, claim, damage, liability or expense (or actions in respect thereof as contemplated below) arises out of or is based (i) upon any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement, or any amendment thereto, including any information deemed to be a part thereof pursuant to Rule 430A or Rule 434 under the Securities Act, or the omission or alleged omission therefrom of a material fact required to be stated therein or necessary to make the statements therein not misleading; or (ii) upon any untrue statement or alleged untrue statement of a material fact contained in any preliminary prospectus or the Prospectus (or any amendment or supplement thereto) or the omission or alleged omission therefrom of a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; or (iii) in whole or in part upon any inaccuracy in the representations and warranties of the Company contained herein; or (iv) in whole or in part upon any failure of the Company to perform its obligations hereunder or under law; and to reimburse each Underwriter and each such controlling person for any and all expenses (including the fees and disbursements of counsel chosen by BAS) as such expenses are reasonably incurred by such Underwriter or such controlling person in connection with investigating, defending, settling, compromising or paying any such loss, claim, damage, liability, expense or action; provided, however, that the foregoing indemnity agreement shall not apply to any loss, claim, damage, liability or expense to the extent, but only to the extent, arising out of or based upon any untrue statement or alleged untrue statement or omission or alleged omission made in reliance upon and in conformity with written information furnished to the Company by the Representatives expressly for use in the Registration Statement, any preliminary prospectus or the Prospectus (or any amendment or supplement thereto). The indemnity agreement set forth in this Section 8(a) shall be in addition to any liabilities that the Company may otherwise have. (b) Indemnification of the Company, its Directors and Officers. Each Underwriter agrees, severally and not jointly, to indemnify and hold harmless the Company, each of its directors, each of 23 its officers who signed the Registration Statement and each person, if any, who controls the Company within the meaning of the Securities Act or the Exchange Act, against any loss, claim, damage, liability or expense, as incurred, to which the Company, or any such director, officer or controlling person may become subject, under the Securities Act, the Exchange Act, or other federal or state statutory law or regulation, or at common law or otherwise (including in settlement of any litigation, if such settlement is effected with the written consent of such Underwriter), insofar as such loss, claim, damage, liability or expense (or actions in respect thereof as contemplated below) arises out of or is based upon any untrue or alleged untrue statement of a material fact contained in the Registration Statement, any preliminary prospectus or the Prospectus (or any amendment or supplement thereto), or arises out of or is based upon the 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 each case to the extent, but only to the extent, that such untrue statement or alleged untrue statement or omission or alleged omission was made in the Registration Statement, any preliminary prospectus, the Prospectus (or any amendment or supplement thereto), in reliance upon and in conformity with written information furnished to the Company by the Representatives expressly for use therein; and to reimburse the Company, or any such director, officer or controlling person for any legal and other expense reasonably incurred by the Company, or any such director, officer or controlling person in connection with investigating, defending, settling, compromising or paying any such loss, claim, damage, liability, expense or action. The Company hereby acknowledges that the only information that the Underwriters have furnished to the Company expressly for use in the Registration Statement, any preliminary prospectus or the Prospectus (or any amendment or supplement thereto) are the statements set forth in the table in the first paragraph and as the third, eighth, ninth, tenth and eleventh paragraphs under the caption "Underwriting" in the final prospectus supplement; and the Underwriters confirm that such statements are correct. The indemnity agreement set forth in this Section 8(b) shall be in addition to any liabilities that each Underwriter may otherwise have. (c) Notifications and Other Indemnification Procedures. Promptly after receipt by an indemnified party under this Section 8 of notice of the commencement of any action, such indemnified party will, if a claim in respect thereof is to be made against an indemnifying party under this Section 8, notify the indemnifying party in writing of the commencement thereof, but the omission so to notify the indemnifying party will not relieve it from any liability which it may have to any indemnified party for contribution or otherwise than under the indemnity agreement contained in this Section 8 or to the extent it is not prejudiced as a proximate result of such failure. In case any such action is brought against any indemnified party and such indemnified party seeks or intends to seek indemnity from an indemnifying party, the indemnifying party will be entitled to participate in, and, to the extent that it shall elect, jointly with all other indemnifying parties similarly notified, by written notice delivered to the indemnified party promptly after receiving the aforesaid notice from such indemnified party, to assume the defense thereof with counsel reasonably satisfactory to such indemnified party; provided, however, if the defendants in any such action include both the indemnified party and the indemnifying party and the indemnified party shall have reasonably concluded that a conflict may arise between the positions of the indemnifying party and the indemnified party in conducting the defense of any such action or that there may be legal defenses available to it and/or other indemnified parties which are different from or additional to those available to the indemnifying party, the indemnified party or parties shall have the right to select separate counsel to assume such legal defenses and to otherwise participate in the defense of such action on behalf of such indemnified party or parties. Upon receipt of notice from the indemnifying party to such indemnified party of such indemnifying party's election so to assume the defense of such action and approval by the indemnified party of counsel, the indemnifying party will not be liable to such indemnified party under this Section 8 for any legal or other expenses subsequently incurred by such indemnified party in connection with the defense thereof unless (i) the indemnified 24 party shall have employed separate counsel in accordance with the proviso to the next preceding sentence (it being understood, however, that the indemnifying party shall not be liable for the expenses of more than one separate counsel (together with local counsel), approved by the indemnifying party (BAS in the case of Section 8(b) and Section 9), representing the indemnified parties who are parties to such action) or (ii) the indemnifying party shall not have employed counsel satisfactory to the indemnified party to represent the indemnified party within a reasonable time after notice of commencement of the action, in each of which cases the fees and expenses of counsel shall be at the expense of the indemnifying party. (d) Settlements. The indemnifying party under this Section 8 shall not be liable for any settlement of any proceeding effected without its written consent, but if settled with such consent or if there be a final judgment for the plaintiff, the indemnifying party agrees to indemnify the indemnified party against any loss, claim, damage, liability or expense by reason of such settlement or judgment. Notwithstanding the foregoing sentence, if at any time an indemnified party shall have requested an indemnifying party to reimburse the indemnified party for fees and expenses of counsel as contemplated by Section 8(c) hereof, the indemnifying party agrees that it shall be liable for any settlement of any proceeding effected without its written consent if (i) such settlement is entered into more than 30 days after receipt by such indemnifying party of the aforesaid request and (ii) such indemnifying party shall not have reimbursed the indemnified party in accordance with such request prior to the date of such settlement. No indemnifying party shall, without the prior written consent of the indemnified party, effect any settlement, compromise or consent to the entry of judgment in any pending or threatened action, suit or proceeding in respect of which any indemnified party is or could have been a party and indemnity was or could have been sought hereunder by such indemnified party, unless such settlement, compromise or consent includes an unconditional release of such indemnified party from all liability on claims that are the subject matter of such action, suit or proceeding. SECTION 9. CONTRIBUTION. If the indemnification provided for in Section 8 is for any reason held to be unavailable to or otherwise insufficient to hold harmless an indemnified party in respect of any losses, claims, damages, liabilities or expenses referred to therein, then each indemnifying party shall contribute to the aggregate amount paid or payable by such indemnified party, as incurred, as a result of any losses, claims, damages, liabilities or expenses referred to therein (i) in such proportion as is appropriate to reflect the relative benefits received by the Company, on the one hand, and the Underwriters, on the other hand, from the offering of the Common Shares pursuant to this Agreement or (ii) if the allocation provided by clause (i) above is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of the Company, on the one hand, and the Underwriters, on the other hand, in connection with the statements or omissions or inaccuracies in the representations and warranties herein which resulted in such losses, claims, damages, liabilities or expenses, as well as any other relevant equitable considerations. The relative benefits received by the Company, on the one hand, and the Underwriters, on the other hand, in connection with the offering of the Common Shares pursuant to this Agreement shall be deemed to be in the same respective proportions as the total net proceeds from the offering of the Common Shares pursuant to this Agreement (before deducting expenses) received by the Company, and the total underwriting discount received by the Underwriters, in each case as set forth on the front cover page of the Prospectus bear to the aggregate initial public offering price of the Common Shares as set forth on such cover. The relative fault of the Company, on the one hand, and the Underwriters, on the other hand, shall be determined by reference to, among other things, whether any such untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact or any such inaccurate or alleged inaccurate representation or warranty relates to information supplied by the Company, on the one hand, or the 25 Underwriters, on the other hand, and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The amount paid or payable by a party as a result of the losses, claims, damages, liabilities and expenses referred to above shall be deemed to include, subject to the limitations set forth in Section 8(c), any legal or other fees or expenses reasonably incurred by such party in connection with investigating or defending any action or claim. The provisions set forth in Section 8(c) with respect to notice of commencement of any action shall apply if a claim for contribution is to be made under this Section 9; provided, however, that no additional notice shall be required with respect to any action for which notice has been given under Section 8(c) for purposes of indemnification. The Company and the Underwriters agree that it would not be just and equitable if contribution pursuant to this Section 9 were determined by pro rata allocation (even if the Underwriters were treated as one entity for such purpose) or by any other method of allocation which does not take account of the equitable considerations referred to in this Section 9. Notwithstanding the provisions of this Section 9, no Underwriter shall be required to contribute any amount in excess of the underwriting commissions received by such Underwriter in connection with the Common Shares underwritten by it and distributed to the public. 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 was not guilty of such fraudulent misrepresentation. The Underwriters' obligations to contribute pursuant to this Section 9 are several, and not joint, in proportion to their respective underwriting commitments as set forth opposite their names in Schedule A. For purposes of this Section 9, each officer and employee of an Underwriter and each person, if any, who controls an Underwriter within the meaning of the Securities Act and the Exchange Act shall have the same rights to contribution as such Underwriter, and each director of the Company, each officer of the Company who signed the Registration Statement, and each person, if any, who controls the Company with the meaning of the Securities Act and the Exchange Act shall have the same rights to contribution as the Company. SECTION 10. DEFAULT OF ONE OR MORE OF THE SEVERAL UNDERWRITERS. If, on the First Closing Date or the Second Closing Date, as the case may be, any one or more of the several Underwriters shall fail or refuse to purchase Common Shares that it or they have agreed to purchase hereunder on such date, and the aggregate number of Common Shares which such defaulting Underwriter or Underwriters agreed but failed or refused to purchase does not exceed 10% of the aggregate number of the Common Shares to be purchased on such date, the other Underwriters shall be obligated, severally, in the proportions that the number of Firm Common Shares set forth opposite their respective names on Schedule A bears to the aggregate number of Firm Common Shares set forth opposite the names of all such non-defaulting Underwriters, or in such other proportions as may be specified by the Representatives with the consent of the non-defaulting Underwriters, to purchase the Common Shares which such defaulting Underwriter or Underwriters agreed but failed or refused to purchase on such date. If, on the First Closing Date or the Second Closing Date, as the case may be, any one or more of the Underwriters shall fail or refuse to purchase Common Shares and the aggregate number of Common Shares with respect to which such default occurs exceeds 10% of the aggregate number of Common Shares to be purchased on such date, and arrangements satisfactory to the Representatives and the Company for the purchase of such Common Shares are not made within 48 hours after such default, this Agreement shall terminate without liability of any party to any other party except that the provisions of Section 4, Section 6, Section 8, Section 9, and the last sentence of this Section 10 shall at all times be effective and shall survive such 26 termination. In any such case either the Representatives or the Company shall have the right to postpone the First Closing Date or the Second Closing Date, as the case may be, but in no event for longer than seven days in order that the required changes, if any, to the Registration Statement and the Prospectus or any other documents or arrangements may be effected. As used in this Agreement, the term "Underwriter" shall be deemed to include any person substituted for a defaulting Underwriter under this Section 10. Any action taken under this Section 10 shall not relieve any defaulting Underwriter from liability in respect of any default of such Underwriter under this Agreement. SECTION 11. TERMINATION OF THIS AGREEMENT. Prior to the First Closing Date, this Agreement may be terminated by the Representatives by notice given to the Company if at any time (i) trading or quotation in any of the Company's securities shall have been suspended or limited by the Commission or by the New York Stock Exchange, or trading in securities generally on either the Nasdaq Stock Market or the New York Stock Exchange shall have been suspended or limited, or minimum or maximum prices shall have been generally established on any of such stock exchanges by the Commission or the NASD; (ii) a general banking moratorium shall have been declared by any of federal, New York or Delaware authorities; (iii) there shall have occurred any outbreak or escalation of national or international hostilities or any crisis or calamity, or any change in the United States or international financial markets, or any substantial change or development involving a prospective substantial change in United States or international political, financial or economic conditions, as in the judgment of the Representatives is material and adverse and makes it impracticable to market the Common Shares in the manner and on the terms described in the Prospectus or to enforce contracts for the sale of securities; (iv) in the judgment of the Representatives there shall have occurred any Material Adverse Change; (v) the Company or any of its subsidiaries shall have sustained a loss by strike, fire, flood, earthquake, accident or other calamity of such character as in the judgment of the Representatives may interfere materially with the conduct of the business and operations of the Company and its subsidiaries regardless of whether or not such loss shall have been insured; or (vi) there shall have occurred a material disruption in commercial banking or securities settlement or clearance services in the United States. Any termination pursuant to this Section 11 shall be without liability on the part of (a) the Company to any Underwriter, except that the Company shall be obligated to reimburse the expenses of the Representatives and the Underwriters pursuant to Sections 4 and 6 hereof, (b) any Underwriter to the Company, or (c) of any party hereto to any other party except that the provisions of Section 8 and Section 9 shall at all times be effective and shall survive such termination. SECTION 12. REPRESENTATIONS AND INDEMNITIES TO SURVIVE DELIVERY. The respective indemnities, agreements, representations, warranties and other statements of the Company, of its officers, and of the several Underwriters set forth in or made pursuant to this Agreement will remain in full force and effect, regardless of any investigation made by or on behalf of any Underwriter or the Company or any of its or their partners, officers or directors or any controlling person, as the case may be, and will survive delivery of and payment for the Common Shares sold hereunder. SECTION 13. NOTICES. All communications hereunder shall be in writing and shall be mailed, hand delivered or telecopied and confirmed to the parties hereto as follows: 27 If to the Representatives: Banc of America Securities LLC 9 West 57th Street New York, New York 10019 Facsimile: (212) 583-8567 Attention: Legal Department with a copy to: Shearman & Sterling LLP 599 Lexington Avenue New York, New York 10022 Facsimile: (212) 848-7179 Attention: Andrew R. Schleider If to the Company: Giant Industries, Inc. 23733 North Scottsdale Road Scottsdale, Arizona 95255 Facsimile: (480) 585-8985 Attention: General Counsel with a copy to: Fennemore Craig, P.C. 3003 North Central, Suite 2600 Phoenix, Arizona 85012-2913 Facsimile: (602) 916-5507 Attention: Karen C. McConnell 28 Any party hereto may change the address for receipt of communications by giving written notice to the others. SECTION 14. SUCCESSORS. This Agreement will inure to the benefit of and be binding upon the parties hereto, including any substitute Underwriters pursuant to Section 10 hereof, and to the benefit of the employees, officers and directors and controlling persons referred to in Section 8 and Section 9, and in each case their respective successors, and personal representatives, and no other person will have any right or obligation hereunder. The term "successors" shall not include any purchaser of the Common Shares as such from any of the Underwriters merely by reason of such purchase. SECTION 15. PARTIAL UNENFORCEABILITY. The invalidity or unenforceability of any Section, paragraph or provision of this Agreement shall not affect the validity or enforceability of any other Section, paragraph or provision hereof. If any Section, paragraph or provision of this Agreement is for any reason determined to be invalid or unenforceable, there shall be deemed to be made such minor changes (and only such minor changes) as are necessary to make it valid and enforceable. SECTION 16. GOVERNING LAW PROVISIONS. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. SECTION 17. GENERAL PROVISIONS. No indemnified party shall be entitled to any consequential, special or punitive damages by virtue of Section 8 or 9 of this Agreement except to the extent that such indemnified party is obligated to pay such types of damages to a third party in respect of a claim for which such indemnified party is entitled to indemnification or contribution. This Agreement constitutes the entire agreement of the parties to this Agreement and supersedes all prior written or oral and all contemporaneous oral agreements, understandings and negotiations with respect to the subject matter hereof. This Agreement may be executed in two or more counterparts, each one of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. This Agreement may not be amended or modified unless in writing by all of the parties hereto, and no condition herein (express or implied) may be waived unless waived in writing by each party whom the condition is meant to benefit. The Table of Contents and the Section headings herein are for the convenience of the parties only and shall not affect the construction or interpretation of this Agreement. Each of the parties hereto acknowledges that it is a sophisticated business person who was adequately represented by counsel during negotiations regarding the provisions hereof, including, without limitation, the indemnification provisions of Section 8 and the contribution provisions of Section 9, and is fully informed regarding said provisions. Each of the parties hereto further acknowledges that the provisions of Sections 8 and 9 hereto fairly allocate the risks in light of the ability of the parties to investigate the Company, its affairs and its business in order to assure that adequate disclosure has been made in the Registration Statement, any preliminary prospectus and the Prospectus (and any amendments and supplements thereto), as required by the Securities Act and the Exchange Act. 29 If the foregoing is in accordance with your understanding of our agreement, kindly sign and return to the Company the enclosed copies hereof, whereupon this instrument, along with all counterparts hereof, shall become a binding agreement in accordance with its terms. Very truly yours, GIANT INDUSTRIES, INC. a Delaware corporation By:______________________________ Name: Title: The foregoing Underwriting Agreement is hereby confirmed and accepted by the Representatives in New York, New York as of the date first above written. BANC OF AMERICA SECURITIES LLC CREDIT SUISSE FIRST BOSTON LLC FRIEDMAN, BILLINGS, RAMSEY & CO., INC. As Representatives of the several Underwriters named in the attached Schedule A By: BANC OF AMERICA SECURITIES LLC By:______________________________ Name: Title: 30 SCHEDULE A
NUMBER OF FIRM COMMON SHARES UNDERWRITERS TO BE PURCHASED - ------------ --------- Banc of America Securities LLC............................... [________] Credit Suisse First Boston LLC............................... [________] Friedman, Billings, Ramsey & Co., Inc........................ [________] Total............................................... 3,000,000 =========
SCHEDULE B LIST OF PERSONS SUBJECT TO LOCK-UP Anthony J. Bernitsky Kim H. Bullerdick Mark B. Cox C. Leroy Crow Larry DeRoin Fred L. Holliger S. Leland Gould Morgan Gust Richard T. Kalen, Jr. Jack W. Keller Brooks Klimley George Rapport Roger Sandeen Robert C. Sprouse Donald M. Wilkinson EXHIBIT A Opinion of Fennemore Craig, P.C., United States counsel for the Company to be delivered pursuant to Section 5(h) of the Underwriting Agreement. References to the Prospectus in this Exhibit A include any supplements thereto at the Closing Date. (i) The Company has been duly incorporated and is validly existing as a corporation in good standing under the laws of the State of Delaware. (ii) The authorized, issued and outstanding capital stock of the Company (including the Common Stock) conform in all material respects to the descriptions thereof (other than with respect to the number of issued or outstanding shares of capital stock, as to which no opinion need be rendered) set forth in the Prospectus. The form of certificate used to evidence the Common Stock complies with all applicable requirements of the charter and by-laws of the Company and the General Corporation Law of the State of Delaware. (iii) No stockholder of the Company or any other person has any preemptive right, right of first refusal or other similar right to subscribe for or purchase securities of the Company arising by operation of the charter or by-laws of the Company or the General Corporation Law of the State of Delaware. (iv) The Underwriting Agreement has been duly authorized, executed and delivered by the Company. (v) The Common Shares to be purchased by the Underwriters from the Company have been duly authorized for issuance and sale pursuant to the Underwriting Agreement and, when issued and delivered by the Company pursuant to the Underwriting Agreement against payment of the consideration set forth therein, will be validly issued, fully paid and nonassessable. (vi) The Registration Statement has been declared effective by the Commission under the Securities Act. To the knowledge of such counsel, no stop order suspending the effectiveness of the Registration Statement has been issued under the Securities Act and no proceedings for such purpose have been instituted or are pending by the Commission. Any required filing of the Prospectus and any supplement thereto pursuant to Rule 424(b) under the Securities Act has been made in the manner and within the time period required by such Rule 424(b). (vii) The Registration Statement, the Prospectus including any document incorporated by reference therein, and each amendment or supplement to the Prospectus including any document incorporated by reference therein (other than the financial statements and supporting schedules included or incorporated by reference therein or in exhibits to or excluded from the Registration Statement, as to which no opinion need be rendered), as of the issue date thereof in the case of the Prospectus or any supplement thereto or the filing date thereof in the case of the Registration Statement or any document incorporated by reference therein or in the Prospectus or any supplement thereto, comply as to form in all material respects with the applicable requirements of the Securities Act and the Exchange Act. (viii) The Common Shares have been approved for listing upon notice of issuance on the New York Stock Exchange. A-1 (ix) No consent, approval, authorization or other order of, or registration or filing with, any court or other governmental authority or agency, is required for the Company's execution, delivery and performance of the Underwriting Agreement and consummation of the transactions contemplated thereby and by the Prospectus, except as required under the Securities Act, applicable state securities or Blue Sky laws, or the rules of the NASD. (x) The execution and delivery of the Underwriting Agreement by the Company and the performance by the Company of its obligations thereunder (other than performance by the Company of its obligations under the indemnification section of the Underwriting Agreement, as to which no opinion need be rendered), the redemption of the 11% Notes in accordance with the terms of the 2002 Indenture and the Related Transactions (a) have been duly authorized by all necessary corporate action on the part of the Company; (b) will not result in any violation of the provisions of the charter or by-laws of the Company; (c) will not constitute a breach of, or Default or a Debt Repayment Triggering Event under, or result in the creation or imposition of any lien, charge or encumbrance upon any property or assets of the Company or any of its subsidiaries pursuant to the 2002 Indenture, the 1997 Indenture, the Revolving Credit Facility, the Term Loan Agreement or any document filed as an exhibit to the Registration Statement or a filing specifically listed as being incorporated into the Prospectus or (d) to the knowledge of such counsel, will not result in any violation of any law, administrative regulation or administrative or court decree applicable to the Company. (xi) The Company is not and will not as a result of the offer and sale of the Common Shares be (i) an "investment company" or a company "controlled" by an investment company within the meaning of the United States Investment Company Act of 1940, as amended, (ii) a "holding company" or a "subsidiary company" of a holding company or an "affiliate" thereof within the meaning of the United States Public Utility Holding Company Act of 1935, as amended, or (iii) subject to regulation under the United States Federal Power Act or any federal or state statute or regulation limiting its ability to incur indebtedness for borrowed money. In addition, such counsel shall state that they have participated in conferences with officers and other representatives of the Company, representatives of the independent public or certified public accountants for the Company and with representatives of the Underwriters at which the contents of the Registration Statement and the Prospectus, and any supplements or amendments thereto, and related matters were discussed and, although such counsel is not passing upon the accuracy, completeness of the statements contained in the Registration Statement or the Prospectus (other than as specified in paragraph (ix) above), and any supplements or amendments thereto, on the basis of the foregoing, nothing has come to their attention which gives them reason to believe that either the Registration Statement or any amendments thereto, at the time the Registration Statement or such amendments became effective or as the date of the Underwriting Agreement, contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading or that the Prospectus or any amendment or supplement thereto, as of its date, at the date of any such amendment or supplement or at the First Closing Date or the Second Closing Date, as the case may be, contained an untrue statement of a material fact or omitted to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading (it being understood that such counsel need express no belief as to the financial statements and financial data included or incorporated by reference in the Registration Statement or the Prospectus or any amendments or supplements thereto). The aforementioned opinion shall be limited to the federal laws of the United States of America, the laws of the State of Arizona and the general corporate law of the State of Delaware. A-2 Such counsel may state that insofar as the aforementioned opinion is indicated to be based on the best of such counsel's knowledge, such opinion is based upon such counsel's actual knowledge, which the attorneys in such counsel's firm have obtained in connection with the representation of the Company. Such counsel may rely, to the extent they deem proper and specified in such opinion, on opinions (which shall be dated the First Closing Date or the Second Closing Date, as the case may be, and shall be satisfactory in form and substance to the Underwriters, shall expressly state that the Underwriters may rely on such opinion as if it were addressed to them and shall be furnished to the Representatives) of local counsel reasonably satisfactory to the Underwriters with respect to matters of law of jurisdictions other than the federal laws of the United States of America, the laws of the State of Arizona and the general corporate law of the State of Delaware; provided, however, that such counsel shall further state that they believe that they and the Underwriters are justified in relying upon such opinion of other counsel, and as to matters of fact, to the extent they deem proper, on certificates of responsible officers of the Company and public officials. A-3 EXHIBIT B Opinion of Kim Bullerdick, Esq., General Counsel of the Company to be delivered pursuant to Section 5(h) of the Underwriting Agreement. (i) The Company has been duly incorporated and is validly existing as a corporation in good standing under the laws of the State of Delaware; has the corporate power and authority to own, lease and operate its properties and to conduct its business as presently conducted and as described in the Prospectus and to enter into and perform its obligations under this Agreement (including the redemption of the 11% Notes in accordance with the terms of the 2002 Indenture) and to enter into and perform its obligations under the Related Transactions; and is duly qualified as a foreign corporation to transact business and is in good standing in each jurisdiction in which such qualification is required, whether by reason of the ownership or leasing of property or the conduct of business, except where the failure to so qualify would not have a Material Adverse Effect on the Company. (ii) Each subsidiary of the Company has been duly incorporated and is validly existing as a corporation in good standing under the laws of the jurisdiction of its incorporation; has the corporate power and authority to own, lease and operate its properties and conduct its business as presently conducted and as described in the Prospectus and to enter into and perform its obligations under this Agreement (including the redemption of the 11% Notes in accordance with the terms of the 2002 Indenture) and to enter into and perform its obligations under the Related Transactions; and is duly qualified as a foreign corporation to transact business and is in good standing in each jurisdiction in which such qualification is required, whether by reason of the ownership or leasing of property or the conduct of business, except where the failure to so qualify would not have a Material Adverse Effect on the Company. Except with respect to Navajo Convenient Store Co., LLC (which is a majority owned subsidiary), all the issued and outstanding capital stock of each subsidiary of the Company has been duly authorized and validly issued, is fully paid and nonassessable and is owned, directly or indirectly, by the Company, and, to the knowledge of such counsel, free and clear of any Lien, except for the Liens under the Revolving Credit Facility and the Term Loan Agreement. (iii) The descriptions in the Prospectus of statutes, legal and governmental proceedings, contracts and other documents are accurate and fairly present the information which, to such counsel's knowledge, is required to be shown; and such counsel does not know of any statutes or legal or governmental proceedings required to be described in the Prospectus that are not described as required, or of any contracts or documents of a character required to be described in the Prospectus that are not described as required. (iv) The statements (a) in the prospectus supplement under the captions "Management's Discussion and Analysis of Financial Condition and Results of Operation - Liquidity and Capital Resources", "Business - Regulatory, Environmental and Other Matters", "Business - Motor Fuel Programs", Business - MTBE Litigation", "Business - Alleged Regulatory Violations", "Business - Discharges, Releases and Cleanup Activities", "Business - Health and Safety", "Business - Changes in Environmental, Health and Safety Laws", "Business - Rights-Of-Way", "Business - Jet Fuel Claims", "Business - Yorktown Power Outage Claim", "Description of Capital Stock" and "Underwriting", (b) in the base prospectus under the caption "Description of Capital Stock" and "Plan of Distribution", and (c) in Item 15 of the Registration Statement, insofar as such statements constitute summaries of legal matters, the documents or legal proceedings, fairly present and summarize, in all material respects, the matters referred to therein. B-1 (v) To the best of such counsel's knowledge, neither the Company nor any of its subsidiaries is in violation of its charter or bylaws, and to the best of such counsel's knowledge, except as otherwise disclosed in the Prospectus, neither the Company nor any of its subsidiaries is in Default in the performance or observance of any obligation, agreement, covenant or condition contained in any Contract or any applicable law, administrative regulation or administrative or court order or decree, which violation or default would, singly or in the aggregate, have a Material Adverse Effect on the Company. (vi) The issuance and delivery of the Common Shares, the execution and delivery of this Agreement and the consummation of the transactions contemplated herein (including the redemption of the 11% Notes in accordance with the terms of the 2002 Indenture) and the Related Transactions will not conflict with or constitute a breach of, or Default or a Debt Repayment Triggering Event under, or result in the creation or imposition of any Lien upon any material property or assets of the Company or any of its subsidiaries pursuant to any Contract, which conflict, breach, Default, Debt Repayment Triggering Event or Lien would, singly or in the aggregate, have a Material Adverse Effect on the Company. (vii) The issuance and delivery of the Common Shares, the execution and delivery of this Agreement and the consummation of the transactions contemplated herein (including the redemption of the 11% Notes in accordance with the terms of the 2002 Indenture) and the Related Transactions will not result in a violation of the provisions of the charter or bylaws of the Company or any of its subsidiaries or, to the best of such counsel's knowledge, any material applicable law, administrative regulation, administrative or court order or decree. (viii) All of the issued and outstanding capital stock of each subsidiary of the Company is owned, directly or indirectly, by the Company, and, to the knowledge of such counsel, free and clear of any security interest, mortgage, pledge, lien, encumbrance or any pending or threatened claim. (ix) All of the outstanding shares of Common Stock have been duly authorized and validly issued, are fully paid and nonassessable and, to the knowledge of such counsel, have been issued in compliance with the registration and qualification requirements of federal and state securities laws. (x) To the knowledge of such counsel, no stockholder of the Company or any other person has any preemptive right, right of first refusal or other similar right to subscribe for or purchase securities of the Company arising by contract or agreement. (xi) To the knowledge of such counsel, there are no legal or governmental actions, suits or proceedings pending or threatened which are required to be disclosed in the Registration Statement, other than those disclosed therein. (xii) To the knowledge of such counsel, there are no Contracts required to be described or referred to in the Registration Statement or to be filed as exhibits thereto other than those described or referred to therein or filed or incorporated by reference as exhibits thereto; and the descriptions thereof and references thereto are correct in all material respects. (xiii) To the knowledge of such counsel, there are no persons with registration or other similar rights to have any equity or debt securities registered for sale under the Registration Statement or included in the offering contemplated by this Agreement or the concurrent Senior Subordinated Notes Offering. B-2 In addition, such counsel shall state that such counsel has reviewed the Prospectus, and any supplements or amendments thereto, and, on the basis of such review, to the best of such counsel's knowledge, the Prospectus, or any supplements or amendments thereto, as of its date, at the date of any such amendment or supplement or at the First Closing Date or the Second Closing Date, as the case may be, did not contain any 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, in the light of the circumstances in which made, not misleading. The aforementioned opinion shall be limited to the federal laws of the United States of America, the laws of the State of Arizona and the corporate law of the State of Delaware. Such counsel may state that insofar as the aforementioned opinion is indicated to be based on the best of such counsel's knowledge, such opinion is based upon such counsel's actual knowledge. Such counsel may rely, to the extent he deems proper and specified in such opinion, on opinions (which shall be dated the First Closing Date or the Second Closing Date, as the case may be, and shall be satisfactory in form and substance to the Underwriters, shall expressly state that the Underwriters may rely on such opinion as if it were addressed to them and shall be furnished to the Representatives) of local counsel satisfactory to the Underwriters with respect to matters of law of jurisdictions other than the federal laws of the United States of America, the laws of the State of Arizona and the general corporate law of the State of Delaware; provided, however, that such counsel shall further state that he believes that he and the Underwriters are justified in relying upon such opinion of other counsel, and as to matters of fact, to the extent they deem proper, on certificates of responsible officers of the Company and its subsidiaries and public officials. Such counsel may rely on certificates of good standing and foreign qualification from appropriate state officials with respect to opinions regarding good standing and foreign qualification. B-3 EXHIBIT C _______, 2004 Banc of America Securities LLC BNP Paribas Securities Corp Credit Suisse First Boston LLC Friedman, Billings, Ramsey & Co., Inc. (As Representatives of the several Underwriters) c/o Banc of America Securities LLC 9 West 57th Street New York, New York 10019 Re: Giant Industries, Inc. (the "Company") Ladies and Gentlemen: The undersigned is an owner of record or beneficially of certain shares of Common Stock of the Company ("Common Stock") or securities convertible into or exchangeable or exercisable for Common Stock. The Company proposes to carry out a public offering of Common Stock (the "Offering") for which you will act as the representatives of the underwriters. The undersigned recognizes that the Offering will be of benefit to the undersigned and will benefit the Company by, among other things, raising additional capital for its operations. The undersigned acknowledges that you and the other underwriters are relying on the representations and agreements of the undersigned contained in this letter in carrying out the Offering and in entering into underwriting arrangements with the Company with respect to the Offering. In consideration of the foregoing, the undersigned hereby agrees that the undersigned will not, (and will cause any spouse or immediate family member of the spouse or the undersigned living in the undersigned's household not to), without the prior written consent of Banc of America Securities LLC (which consent may be withheld in its sole discretion), directly or indirectly, sell, offer, contract or grant any option to sell (including without limitation any short sale), pledge, transfer, establish an open "put equivalent position" within the meaning of Rule 16a-1(h) under the Securities Exchange Act of 1934, as amended, or otherwise dispose of any shares of Common Stock, options or warrants to acquire shares of Common Stock, or securities exchangeable or exercisable for or convertible into shares of Common Stock currently or hereafter owned either of record or beneficially (as defined in Rule 13d-3 under the Securities Exchange Act of 1934, as amended) by the undersigned (or such spouse or family member), or publicly announce an intention to do any of the foregoing, for a period commencing on the date hereof and continuing through the close of trading on the date 90 days after the date of the Prospectus. Notwithstanding the foregoing, if (x) during the last 17 days of the 90-day restricted period the Company issues an earnings release or material news or a material event relating to the Company occurs; or (y) prior to the expiration of the 90-day restricted period, the Company announces that it will release earnings results during the 16-day period beginning on the last day of C-1 the 90-day period; the restrictions imposed above shall continue to apply until the expiration of the 18-day period beginning on the issuance of the earnings release or the occurrence of the material news or material event; provided however, that this sentence shall not apply if the research published or distributed on the Company is compliant under Rule 139 of the Securities Act and the Company's securities are actively traded as defined in Rule 101(c)(1) of Regulation M of the Exchange Act. The undersigned also agrees and consents to the entry of stop transfer instructions with the Company's transfer agent and registrar against the transfer of shares of Common Stock or securities convertible into or exchangeable or exercisable for Common Stock held by the undersigned except in compliance with the foregoing restrictions. This agreement is irrevocable and will be binding on the undersigned and the respective successors, heirs, personal representatives, and assigns of the undersigned. _______________________________________ Printed Name of Holder By:____________________________________ Signature _______________________________________ Printed Name of Person Signing (indicate capacity of person signing if signing as custodian, trustee, or on behalf of an entity) C-2
EX-4.4 5 p68915a3exv4w4.txt EX-4.4 EXHIBIT 4.4 SUPPLEMENTAL INDENTURE to Indenture dated as of August 26, 1997 for $150,000,000 9% Senior Subordinated Notes Due 2007 between DEGUELLE OIL COMPANY as Additional Subsidiary Guarantor, and The Bank of New York as Trustee Dated effective as of February 10, 1998 SUPPLEMENTAL INDENTURE THIS SUPPLEMENTAL INDENTURE, dated effective as of February 10, 1998, is between DeGuelle Oil Company, a Colorado corporation as an Additional Subsidiary Guarantor ("DOC"), and the Bank of New York, as Trustee. Recitals WHEREAS, effective August 26, 1997, Giant Industries, Inc. (the "Company"), the Subsidiary Guarantors, and the Trustee, executed an Indenture (the "Indenture") in the amount of $150,000,000 for the equal and ratable benefit of the holders of the Company's 9% Senior Subordinated Notes due 2007. WHEREAS, Giant Industries Arizona, Inc., an Arizona corporation ("Giant Arizona"), is a wholly-owned subsidiary of the Company and a signator of the Indenture as a Subsidiary Guarantor. WHEREAS, DOC is a wholly-owned subsidiary of Giant Arizona. WHEREAS, DOC was acquired by Giant Arizona after the Issue Date. WHEREAS, in accordance with Section 11.03 of the Indenture, DOC desires to execute and deliver a supplemental indenture pursuant to which DOC, as a Restricted Subsidiary, shall guarantee the payment of the securities issued pursuant to the Indenture. NOW, THEREFORE, the parties agree as follows: Agreement 1. This Supplemental Indenture is being delivered pursuant to the provisions of the Indenture and shall be construed and interpreted consistently therewith. Capitalized terms used herein without definition shall have the meaning ascribed to them in the Indenture. 2. DOC acknowledges and agrees that it is subject to the provisions (including the representations and warranties) of the Indenture as a Subsidiary Guarantor. IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture to be duly executed, and their respective corporate seals to be hereunto affixed and attested, all as of the date first written above. ADDITIONAL SUBSIDIARY GUARANTOR DeGuelle Oil Company, as Subsidiary Guarantor By: /s/ MARK B. COX ------------------------------------------- Name: Mark B. Cox Title: Vice President and Financial Officer TRUSTEE The Bank of New York By: /s/ WALTER N. GITLIN ------------------------------------------- Name: Walter N. Gitlin Title: Vice President EX-4.5 6 p68915a3exv4w5.txt EX-4.5 EXHIBIT 4.5 SUPPLEMENTAL INDENTURE to Indenture dated as of August 26, 1997 for $150,000,000 9% Senior Subordinated Notes Due 2007 between GIANT PIPELINE COMPANY as Additional Subsidiary Guarantor, and The Bank of New York as Trustee Dated effective as of December 1, 2000 SUPPLEMENTAL INDENTURE THIS SUPPLEMENTAL INDENTURE, dated effective as of December 1, 2000, is between Giant Pipeline Company, a New Mexico corporation as an Additional Subsidiary Guarantor ("GPC"), and The Bank of New York, as Trustee. Recitals WHEREAS, effective August 26, 1997, Giant Industries, Inc. (the "Company"), the Subsidiary Guarantors, and the Trustee, executed an Indenture (the "Indenture") in the amount of $150,000,000 for the equal and ratable benefit of the holders of the Company's 9% Senior Subordinated Notes due 2007. WHEREAS, Giant Industries Arizona, Inc., an Arizona corporation ("Giant Arizona"), is a wholly-owned subsidiary of the Company and a signator of the Indenture as a Subsidiary Guarantor. WHEREAS, GPC is a wholly-owned subsidiary of Giant Arizona. WHEREAS, GPC was formed by Giant Arizona after the Issue Date. WHEREAS, in accordance with Section 11.03 of the Indenture, GPC desires to execute and deliver a supplemental indenture pursuant to which GPC, as a Restricted Subsidiary, shall guarantee the payment of the securities issued pursuant to the Indenture. NOW, THEREFORE, the parties agree as follows: Agreement 1. This Supplemental Indenture is being delivered pursuant to the provisions of the Indenture and shall be construed and interpreted consistently therewith. Capitalized terms used herein without definition shall have the meaning ascribed to them in the Indenture. 2. GPC acknowledges and agrees that it is subject to the provisions (including the representations and warranties) of the Indenture as a Subsidiary Guarantor. IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture to be duly executed, and their respective corporate seals to be hereunto affixed and attested, all as of the date first written above. ADDITIONAL SUBSIDIARY GUARANTOR Giant Pipeline Company, as Subsidiary Guarantor By: /s/ MARK B. COX -------------------------------------------- Name: Mark B. Cox Title: Vice President and Financial Officer TRUSTEE The Bank of New York By: /s/ WALTER N. GITLIN -------------------------------------------- Name: Walter N. Gitlin Title: Vice President EX-4.6 7 p68915a3exv4w6.txt EX-4.6 EXHIBIT 4.6 SUPPLEMENTAL INDENTURE SUPPLEMENTAL INDENTURE dated as of April 3, 2002, among Giant Industries, Inc., a corporation duly organized and existing under the laws of the State of Delaware (the "Company"), the Subsidiary Guarantors listed as signatories hereto (the "Subsidiary Guarantors"), and The Bank of New York, a banking corporation duly organized and existing under the laws of the State of New York, as Trustee (the "Trustee"). WHEREAS, the Company, the Subsidiary Guarantors and the Trustee have heretofore executed and delivered an Indenture dated as of August 26, 1997, as supplemented (the "Indenture"), providing for the issuance from time to time of its 9% Senior Subordinated Notes due 2007; WHEREAS, Section 9.02 of the Indenture provides that the Company, the Subsidiary Guarantors and the Trustee may amend the Indenture with the consent of the Holders of at least a majority in principal amount of the then outstanding Securities (such term and each other capitalized term used in this First Supplemental Indenture and not defined herein having the meanings assigned thereto in the Indenture); WHEREAS, the Company and the Subsidiary Guarantors desire to amend the Indenture, as set forth in Article I hereof; WHEREAS, the Holders of at least a majority in aggregate principal amount of the Securities outstanding have consented to the amendments effected by this Supplemental Indenture; and WHEREAS, this Supplemental Indenture has been duly authorized by all necessary corporate action on the part of the Company and the Subsidiary Guarantors. NOW, THEREFORE, the Company, the Subsidiary Guarantors and the Trustee agree as follows for the equal and ratable benefit of the Holders of the Securities: ARTICLE I AMENDMENT SECTION 1.01. Amendment to Section 1.01. The definition of "Restricted Payment" in Section 1.01 of the Indenture is hereby amended by deleting clause (iii) of said definition and adding in lieu thereof the following: "(iii) the making of any principal payment on, or the purchase, defeasance, repurchase, redemption or other acquisition or retirement for value, prior to any scheduled maturity, scheduled repayment or scheduled sinking fund payment, of any Indebtedness which is pari passu or subordinated in right of payment to the Securities, except that any such payment, purchase, defeasance, repurchase, redemption or other acquisition or retirement for value of pari passu Indebtedness shall not constitute a Restricted Payment unless the Indebtedness, if any, incurred to refinance such pari passu Indebtedness is senior in right of payment to the Securities or has any scheduled principal payment prior to the maturity date of the Securities;" ARTICLE II MISCELLANEOUS SECTION 2.01. Interpretation; Severability; Headings. Upon the execution and delivery of this Supplemental Indenture, the Indenture shall be modified and amended in accordance with this Supplemental Indenture, and all the terms and conditions of both shall be read together as though they constitute one instrument, except that, in case of conflict, the provisions of this Supplemental Indenture will control. The Indenture, as modified and amended by this Supplemental Indenture, is hereby ratified and confirmed in all respects and shall bind every Holder of Securities. In case of conflict between the terms and conditions contained in the Securities and those contained in the Indenture, as modified and amended by this Supplemental Indenture, the provisions of the Indenture, as modified and amended by this Supplemental Indenture, shall control. In case any provision in this Supplemental Indenture shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. The Article and Section headings of this Supplemental Indenture have been inserted for convenience of reference only, are not to be considered a part hereof and shall in no way modify or restrict any of the terms or provisions hereof. SECTION 2.02. Conflict with TIA. If any provision of this Supplemental Indenture limits, qualifies or conflicts with any provision of the TIA that is required under the TIA to be part of and govern any provision of this Supplemental Indenture, the provision of the TIA shall control. If any provision of this Supplemental Indenture modifies or excludes any provision of the TIA that may be so modified or excluded, the provision of the TIA shall be deemed to apply to the Indenture as so modified or to be excluded by this Supplemental Indenture, as the case may be. SECTION 2.03. Successors; Benefits of Supplemental Indenture, etc. All agreements of the Company and the Subsidiary Guarantors in this Supplemental Indenture shall bind their respective successors. All agreements of the Trustee in this Supplemental Indenture shall bind its successors. Nothing in this Supplemental Indenture or the Securities, express or implied, shall give to any Person, other than the parties hereto and thereto and their successors hereunder and thereunder and the Holders of the Securities, any benefit of any legal or equitable right, remedy or claim under the Indenture, this Supplemental Indenture or the Securities. SECTION 2.04. Certain Duties and Responsibilities of the Trustee; Trustee Not Responsible for Recitals. In entering into this Supplemental Indenture, the Trustee shall be entitled to the benefit of every provision of the Indenture relating to the conduct or affecting the liability or affording protection to the Trustee, whether or not elsewhere herein so provided. The Trustee shall not be responsible in any manner whatsoever for or in respect of the validity or 2 sufficiency of this Supplemental Indenture or for or in respect of the recitals contained herein, all of which recitals are made solely by the Company and the Subsidiary Guarantors. SECTION 2.05. Governing Law. This Supplemental Indenture shall be construed in accordance with the laws of the State of New York without reference to its conflict of law provisions, and the obligations, rights and remedies of the parties hereunder shall be determined in accordance with such laws. SECTION 2.06. Duplicate Originals. All parties may sign any number of copies or counterparts of this Supplemental Indenture. Each signed copy or counterpart shall be an original, but all of them together shall represent the same agreement. IN WITNESS WHEREOF, each party hereto has caused this Supplemental Indenture to be signed by its officer thereunto duly authorized as of the date first written above. GIANT INDUSTRIES, INC., By /s/ ------------------------------------ Name: Title: THE BANK OF NEW YORK, as Trustee, By /s/ ------------------------------------ Name: Title: SUBSIDIARY GUARANTORS Giant Industries Arizona, Inc., an Arizona corporation By /s/ ------------------------------------ Name: Title: Ciniza Production Company, a New Mexico corporation By /s/ ------------------------------------ Name: Title: 3 Giant Stop-N-Go of New Mexico, Inc., a New Mexico corporation By /s/ ------------------------------------ Name: Title: Giant Four Corners, Inc., an Arizona corporation By /s/ ------------------------------------ Name: Title: Phoenix Fuel Co., Inc., an Arizona corporation By /s/ ------------------------------------ Name: Title: San Juan Refining Company, a New Mexico corporation By /s/ ------------------------------------ Name: Title: Giant Mid-Continent, Inc., an Arizona corporation By /s/ ------------------------------------ Name: Title: Giant Pipeline Company, a New Mexico corporation By /s/ ------------------------------------ Name: Title: 4 DeGuelle Oil Company, a Colorado corporation By /s/ ------------------------------------ Name: Title: 5 EX-4.7 8 p68915a3exv4w7.txt EX-4.7 Exhibit 4.7 SUPPLEMENTAL INDENTURE to Indenture dated as of August 26, 1997 for $150,000,000 9% Senior Subordinated Notes Due 2007 among GIANT YORKTOWN, INC. And GIANT YORKTOWN HOLDING COMPANY as Additional Subsidiary Guarantors, and The Bank of New York as Trustee Dated effective as of May 10, 2002 SUPPLEMENTAL INDENTURE THIS SUPPLEMENTAL INDENTURE, dated effective as of May 10, 2002, is among Giant Yorktown, Inc., a Delaware corporation ("GYI"), and Giant Yorktown Holding Company, a Delaware corporation ("GYHC"), as Additional Subsidiary Guarantors, and The Bank of New York, as Trustee. Recitals WHEREAS, effective August 26, 1997, Giant Industries, Inc. (the "Company"), the Subsidiary Guarantors, and the Trustee, executed an Indenture (the "Indenture") in the amount of $150,000,000 for the equal and ratable benefit of the holders of the Company's 9% Senior Subordinated Notes due 2007. WHEREAS, Giant Industries Arizona, Inc., an Arizona corporation ("Giant Arizona"), is a wholly-owned subsidiary of the Company and a signator of the Indenture as a Subsidiary Guarantor. WHEREAS, GYI and GYHC each are wholly-owned subsidiaries of Giant Arizona. WHEREAS, GYI and GYHC were both formed by Giant Arizona after the Issue Date. WHEREAS, in accordance with Section 11.03 of the Indenture, GYI and GYHC desire to execute and deliver a supplemental indenture pursuant to which GYI and GYHC, as Restricted Subsidiaries, shall guarantee the payment of the securities issued pursuant to the Indenture. NOW, THEREFORE, the parties agree as follows: Agreement 1. This Supplemental Indenture is being delivered pursuant to the provisions of the Indenture and shall be construed and interpreted consistently therewith. Capitalized terms used herein without definition shall have the meaning ascribed to them in the Indenture. 2. GYI and GYHC each acknowledge and agree that it is subject to the provisions (including the representations and warranties) of the Indenture as a Subsidiary Guarantor. IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture to be duly executed, and their respective corporate seals to be hereunto affixed and attested, all as of the date first written above. ADDITIONAL SUBSIDIARY GUARANTOR Giant Yorktown, Inc., as Subsidiary Guarantor By: /s/ Mark B. Cox -------------------------------------------- Name: Mark B. Cox Title: Vice President and Chief Financial Officer Giant Yorktown Holding Company, as Subsidiary Guarantor By: /s/ Mark B. Cox -------------------------------------------- Name: Mark B. Cox Title: Vice President and Chief Financial Officer TRUSTEE The Bank of New York By: /s/ Remo J. Reale -------------------------------------------- Name: Remo J. Reale Title: Vice President EX-4.9 9 p68915a3exv4w9.txt EX-4.9 Exhibit 4.9 ================================================================================ GIANT INDUSTRIES, INC. AND THE SUBSIDIARY GUARANTORS AND THE BANK OF NEW YORK, AS TRUSTEE INDENTURE DATED AS OF __________________ PROVIDING FOR ISSUANCE OF NOTES IN SERIES ================================================================================ GIANT INDUSTRIES, INC. INDENTURE DETAILED CROSS-REFERENCE TABLE
Trust Indenture Act Indenture Section Section ------- ------- 310 (a)................................................................................. 7.10 (b)................................................................................. 7.08, 7.10 (c)................................................................................. N.A. 311 (a)................................................................................. 7.03 (b)................................................................................. 7.03 (c)................................................................................. 7.03 312 (a)................................................................................. 2.10, 13.02 (b)................................................................................. 13.02 (c)................................................................................. N.A. 313 (a)................................................................................. 7.06 (b)................................................................................. 7.06 (c)................................................................................. 7.05, 7.06 314 (a)................................................................................. N.A. (b) (1)............................................................................. N.A. (b) (2)............................................................................. N.A. (c) (1)............................................................................. N.A. (c) (2)............................................................................. N.A. (c) (3)............................................................................. N.A. (d)................................................................................. N.A. (e)................................................................................. N.A. (f)................................................................................. N.A. 315 (a)................................................................................. 7.02 (b)................................................................................. 7.02 (c)................................................................................. 7.02 (d)................................................................................. 7.02 (e)................................................................................. N.A. 316 (a)................................................................................. N.A. (b)................................................................................. N.A. (c)................................................................................. 13.02 317 (a) (1)............................................................................. N.A. (a) (2)............................................................................. N.A. (b)................................................................................. N.A.
i 318 (a)................................................................................. N.A. (b)................................................................................. N.A. (c)................................................................................. N.A.
ii TABLE OF CONTENTS
Page ---- ARTICLE I. DEFINITIONS AND INCORPORATION BY REFERENCE......................................... 1 Section 1.01. Definitions...................................................................... 1 Section 1.02. Rules of Construction............................................................ 8 Section 1.03. Incorporation by Reference of the Trust Indenture Act............................ 9 ARTICLE II. THE NOTES.......................................................................... 9 Section 2.01. Unlimited in Amount, Issuable in Series, Form and Dating......................... 9 Section 2.02. Execution, Authentication and Denominations...................................... 12 Section 2.03. Registrar, Paying Agent and Authenticating Agent; Paying Agent to Hold Money in Trust 14 Section 2.04. Replacement Notes................................................................ 15 Section 2.05. Outstanding Notes................................................................ 15 Section 2.06. Temporary Notes.................................................................. 16 Section 2.07. Cancellation..................................................................... 16 Section 2.08. CUSIP Numbers.................................................................... 17 Section 2.09. Global Notes; Transfer and Exchange.............................................. 17 Section 2.10. Noteholder Lists................................................................. 20 Section 2.11. Defaulted Interest............................................................... 21 Section 2.12. Computation of Interest.......................................................... 21 ARTICLE III. REDEMPTION......................................................................... 21 Section 3.01. Method and Effect of Redemption.................................................. 21 Section 3.02. Exclusion of Certain Notes From Eligibility for Selection for Redemption......... 23 Section 3.03. Deposit of Redemption Price...................................................... 23 ARTICLE IV. COVENANTS.......................................................................... 23 Section 4.01. Payment of Principal, Premium and Interest....................................... 23 Section 4.02. Offices for Payments, Etc........................................................ 24 Section 4.03. Appointment to Fill a Vacancy in Office of Trustee............................... 24 Section 4.04. Paying Agents.................................................................... 24 Section 4.05. Written Statement to Trustee..................................................... 25 Section 4.06. Calculation of Original Issue Discount........................................... 25 ARTICLE V. CONSOLIDATION, MERGER, SALE OR CONVEYANCE.......................................... 26 Section 5.01. Company May Consolidate, Merge, Etc., on Certain Terms........................... 26 Section 5.02. Successor Company Substituted.................................................... 26
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Page ---- Section 5.03. Opinion of Counsel to Trustee.................................................... 26 ARTICLE VI. DEFAULT AND REMEDIES............................................................... 27 Section 6.01. Events of Default................................................................ 27 Section 6.02. Acceleration..................................................................... 28 Section 6.03. Other Remedies................................................................... 30 Section 6.04. Waiver of Past Defaults.......................................................... 30 Section 6.05. Control by Majority.............................................................. 30 Section 6.06. Limitation on Suits.............................................................. 30 Section 6.07. Rights of Holders to Receive Payment............................................. 31 Section 6.08. Collection Suit by Trustee....................................................... 31 Section 6.09. Trustee May File Proofs of Claim................................................. 31 Section 6.10. Priorities....................................................................... 32 Section 6.11. Restoration of Rights and Remedies............................................... 32 Section 6.12. Undertaking for Costs............................................................ 33 Section 6.13. Rights and Remedies Cumulative................................................... 33 Section 6.14. Delay or Omission Not Waiver..................................................... 33 Section 6.15. Waiver of Stay, Extension or Usury Laws.......................................... 33 ARTICLE VII. THE TRUSTEE........................................................................ 34 Section 7.01. General.......................................................................... 34 Section 7.02. Certain Rights of Trustee........................................................ 34 Section 7.03. Individual Rights of Trustee..................................................... 35 Section 7.04. Trustee's Disclaimer............................................................. 36 Section 7.05. Notice of Default................................................................ 36 Section 7.06. Reports by Trustee to Holders.................................................... 36 Section 7.07. Compensation and Indemnity....................................................... 37 Section 7.08. Replacement of Trustee........................................................... 37 Section 7.09. Successor Trustee by Merger...................................................... 39 Section 7.10. Eligibility...................................................................... 39 Section 7.11. Money Held in Trust.............................................................. 39 ARTICLE VIII. DEFEASANCE AND DISCHARGE........................................................... 39 Section 8.01. Discharge of Company's Obligations............................................... 39 Section 8.02. Legal Defeasance................................................................. 40 Section 8.03. Covenant Defeasance.............................................................. 41
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Page ---- Section 8.04. Application of Trust Money....................................................... 41 Section 8.05. Repayment to Company............................................................. 41 Section 8.06. Reinstatement.................................................................... 42 ARTICLE IX. SUPPLEMENTAL INDENTURES............................................................ 42 Section 9.01. Supplemental Indentures Without Consent of Holders............................... 42 Section 9.02. Supplemental Indentures with Consent of Holders.................................. 44 Section 9.03. Execution of Supplemental Indentures............................................. 45 Section 9.04. Effect of Supplemental Indentures................................................ 45 Section 9.05. Conformity with Trust Indenture Act.............................................. 46 Section 9.06. Reference in Notes to Supplemental Indentures.................................... 46 ARTICLE X. SINKING FUNDS...................................................................... 46 Section 10.01. Applicability of Article......................................................... 46 Section 10.02. Satisfaction of Sinking Fund Payments with Notes................................. 46 Section 10.03. Redemption of Notes for Sinking Fund............................................. 46 ARTICLE XI. SUBORDINATION OF NOTES............................................................. 47 Section 11.01. Applicability of Article; Agreement to Subordinate Notes to Senior Indebtedness.. 47 Section 11.02. No Payment on Subordinated Notes in Certain Circumstances........................ 47 Section 11.03. Subordinated Notes Subordinated to Prior Payment of All Senior Indebtedness on Dissolution, Liquidation or Reorganization of the Company 49 Section 11.04. Holders of Subordinated Notes to be Subrogated to Rights of Holders of Senior Indebtedness 50 Section 11.05. Obligations of the Company Unconditional......................................... 50 Section 11.06. Entitled to Assume Payments Not Prohibited in Absence of Notice.................. 51 Section 11.07. Application by Trustee of Assets Deposited With It............................... 51 Section 11.08. Subordination Rights Not Impaired by Acts or Omissions of the Company or Holders of Senior Indebtedness 51 Section 11.09. Holders Authorize Trustee to Effectuate Subordination of Subordinated Notes...... 52 Section 11.10. Right of Trustee to Hold Senior Indebtedness..................................... 52 Section 11.11. Article Eleven Not to Prevent Events of Default.................................. 52 Section 11.12. Payment.......................................................................... 52 Section 11.13. Trustee Not Fiduciary for Holders of Senior Indebtedness......................... 53
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Page ---- ARTICLE XII. SUBSIDIARY GUARANTEES.............................................................. 53 Section 12.01. Unconditional Guarantees......................................................... 53 Section 12.02. Execution and Delivery of Guarantees............................................. 54 Section 12.03. Limitation of Guarantor's Liability.............................................. 55 Section 12.04. Subordination of Guarantees...................................................... 55 ARTICLE XIII. MISCELLANEOUS...................................................................... 55 Section 13.01. Trust Indenture Act of 1939...................................................... 55 Section 13.02. Noteholder Communications; Noteholder Actions.................................... 55 Section 13.03. Notices.......................................................................... 56 Section 13.04. Certificate and Opinion as to Conditions Precedent............................... 57 Section 13.05. Statements Required in Certificate or Opinion.................................... 58 Section 13.06. Payment Date Other Than a Business Day........................................... 58 Section 13.07. Governing Law; Waiver of Jury Trial.............................................. 58 Section 13.08. No Adverse Interpretation of Other Agreements.................................... 58 Section 13.09. Successors....................................................................... 58 Section 13.10. Duplicate Originals.............................................................. 58 Section 13.11. Separability..................................................................... 59 Section 13.12. Table of Contents and Headings................................................... 59 Section 13.13. No Liability of Directors, Officers, Employees, Incorporators and Stockholders... 59 EXHIBIT EXHIBIT A - DTC Legend.......................................................................... A-1
vi INDENTURE, dated as of _______________, among Giant Industries, Inc., a Delaware corporation (the "Company"), the Subsidiary Guarantors listed as signatories hereto, and The Bank of New York, a New York banking corporation, as Trustee ("Trustee"). RECITALS The Company has duly authorized the execution and delivery of this Indenture to provide for the issuance from time to time of its senior or subordinated debentures, notes or other evidences of indebtedness, which may be convertible into or exchangeable for any securities of any person (including the Company), and which may be guaranteed by the Subsidiary Guarantors, to be issued in one or more series (the "Notes"), as herein provided, up to such principal amount as may from time to time be authorized in or pursuant to one or more resolutions of the Board of Directors or by supplemental indenture. All things necessary to make this Indenture a valid, legal and binding agreement of the Company and each of the Subsidiary Guarantors, in accordance with its terms, have been done. This Indenture is subject to, and will be governed by, the provisions of the Trust Indenture Act that are required to be a part of and govern indentures qualified under the Trust Indenture Act. For and in consideration of the premises and the purchase from time to time of the Notes by the Holders thereof, the parties hereto covenant and agree, for the equal and proportionate benefit of all Holders, as follows: ARTICLE I DEFINITIONS AND INCORPORATION BY REFERENCE Section 1.01 Definitions. "Act" has the meaning assigned to such term in Section 13.02(b). "Affiliate" of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person. For the purposes of this definition, "control" when used with respect to any specified Person means the power to direct the management and policies of such Person directly or indirectly, whether through the ownership of Voting Stock, by contract or otherwise; and the terms "controlling" and "controlled" have meanings correlative to the foregoing. "Agent" means any Registrar, Paying Agent or Authenticating Agent. "Agent Member" means a member of, or a participant in, the Depositary. "Authenticating Agent" refers to a Person engaged to authenticate the Notes instead of the Trustee. "Bankruptcy Default" has the meaning assigned to such term in Section 6.01(h). "Board of Directors" means, with respect to any Person, the Board of Directors of such Person or any committee of the Board of Directors of such Person duly authorized to act on behalf of the Board of Directors of such Person. "Board Resolution" means, with respect to any Person, a copy of a resolution certified by the Secretary or an Assistant Secretary of such Person to have been duly adopted by the Board of Directors of such Person and to be in full force and effect on the date of such certification, and delivered to the Trustee. "Business Day" means any day except a Saturday, Sunday or other day on which commercial banks in New York City or in the city where the Corporate Trust Office of the Trustee is located are authorized by law to close. "Capital Stock" means, with respect to any Person, any and all shares, interests, participations or other equivalents (however designated) of corporate stock or partnership interests and any and all warrants, options and rights with respect thereto (whether or not currently exercisable), including each class of common stock and preferred stock of such Person. "Certificated Note" means a Note in fully-registered certificated form without interest coupons. "Commission" means the Securities and Exchange Commission. "Company" means Giant Industries, Inc., a Delaware corporation, or any successor obligor under the Indenture and the Notes pursuant to Article V. "Company Order" means a written request or order signed in the name of the Company by two Officers of the Company or by an Officer and the controller, treasurer, an assistant treasurer, the secretary or an assistant secretary, and delivered to the Trustee in respect of the series of Notes to which the Company Order shall relate. A Company Order shall specify the amount of Notes to be authenticated and the date on which the original issue of Notes is to be authenticated. "Corporate Trust Office" means the office of the Trustee, the Registrar and any Paying Agent, the principal corporate trust office at which at any particular time such respective entity's corporate trust business shall be administered, which at the date of the Indenture is located at 101 Barclay Street, 8 West, New York, New York 10286. "Credit Agreements" means the Company's Second Amended and Restated Credit Agreement dated as of May 14, 2002, among the Company, Bank of America, N. A., as Administrative Agent and as Letter of Credit Bank, and the lenders party thereto, as amended, and the Company's Loan Agreement, dated as of May 14, 2002, by and among Giant Yorktown, Inc., as Borrower, Wells Fargo Bank Nevada, National Association, as Collateral Agent, and the persons listed therein as lenders, as amended. "Default" means any event that is, or after notice or passage of time or both would be, an Event of Default. 2 "Depositary" means with respect to the Notes of any series issuable or issued in whole or in part in the form of one or more Global Notes, the Person designated as Depositary for such series by the Company, which Depositary shall be a clearing agency registered under the Exchange Act; and if at any time there is more than one such Person, "Depositary" as used with respect to the Notes of any series shall mean the Depositary with respect to the Notes of such series. The initial Depositary shall be DTC. "Designated Senior Indebtedness" means (1) any Senior Indebtedness of the Company and/or any Subsidiary Guarantor permitted under this Indenture, the original principal amount of which is $20 million or more and that has been designated by the Company or such Subsidiary Guarantor as "Designated Senior Indebtedness" and (2) the Indebtedness and/or other obligations under the Credit Agreements. "DTC" means The Depository Trust Company, a New York corporation, and its successors. "DTC Legend" means the legend set forth in Exhibit A. "Event of Default" has the meaning assigned to such term in Section 6.01 hereof. "Exchange Act" means the Securities and Exchange Act of 1934, as amended, and the rules of and regulations of the SEC thereunder. "GAAP" means generally accepted accounting principles as in effect in the United States of America from time to time. "Global Note" means a Note in registered global form without interest coupons. "Guarantees" means, with respect to the Notes of any series, the guarantees with respect to the Notes of such series by a Subsidiary Guarantor pursuant to Article XII or a supplemental indenture thereto. "Guarantor Obligations" has the meaning assigned to such term in Section 12.01. "Holder" or "Noteholder" means the registered holder of any Note. "Indebtedness" has, for any series of Notes issued or outstanding hereunder, the meaning assigned to such term pursuant to a Board Resolution or an Officers' Certificate or established in one or more indentures supplemental hereto, prior to the issuance of Notes of any series pursuant to Section 2.01. "Indenture" means this indenture, as amended, supplemented or restated from time to time and shall include the terms of the or those particular series of Notes established as contemplated by Section 2.01 and the particular Guarantees, if any, established as contemplated by Section 12.01; provided, however, that, if at any time more than one Person is acting as Trustee under this instrument, "Indenture" shall mean, with respect to any one or more series of Notes for which a Person is Trustee, this instrument as originally executed or as it may from time to time be amended, supplemented or restated by one or more indentures supplemental hereto 3 entered into pursuant to the applicable provisions hereof, and shall include the terms of the or those particular series of Notes for which such Person is Trustee established as contemplated by Section 2.01, exclusive, however, of any provisions or terms which relate solely to other series of Notes for which such Person is not Trustee, regardless of when such terms or provisions were adopted, and exclusive of any provisions or terms adopted by means of one or more indentures supplemental hereto executed and delivered after such Person had become such Trustee but to which such Person, as such Trustee, was not a party. "Insolvency or Liquidation Proceeding" means, with respect to any Person, (i) an insolvency or bankruptcy case or proceeding, or any receivership, liquidation, reorganization proceeding or other similar case or proceeding, relative to such Person, as such, or its assets, or (ii) any liquidation, dissolution, reorganization proceeding or winding up of such Person (other than any reincorporation of such Person in another jurisdiction), whether voluntary or involuntary and whether or not involving insolvency or bankruptcy, or (iii) any assignment for the benefit of creditors or any other marshaling of assets and liabilities of such Person. "Interest", when used with respect to an Original Issue Discount Note that by its terms bears interest only after maturity, means interest payable after maturity. "Interest Payment Date" means, for any series of Notes issued and outstanding hereunder, the date or dates in each year on which any interest on such series is due and payable. "Lien" means, with respect to any Person, any mortgage, pledge, lien, encumbrance, easement, restriction, covenant, right-of-way, charge or adverse claim affecting title or resulting in an encumbrance against real or personal property of such Person, or a security interest of any kind (including any conditional sale or other title retention agreement, any lease in the nature thereof, any option, right of first refusal or other similar agreement to sell, in each case securing obligations of such Person, and any filing of or agreement to give any financing statement under the Uniform Commercial Code (or equivalent statute or statutes) of any jurisdiction). "Notes" has the meaning assigned to such term in the recitals hereof and more particularly means any Notes authenticated and delivered under this Indenture; provided, however, that, if at any time there is more than one Person acting as Trustee under this Indenture, "Notes" with respect to the series as to which such Person is Trustee shall have the meaning stated in the first recital of this Indenture and shall more particularly mean Notes authenticated and delivered under this Indenture, exclusive, however, of Notes of any series as to which such Person is not Trustee. "Officer" means the president or chief executive officer, any vice president, the chief financial officer, the chief accounting officer, the controller, the treasurer or any assistant treasurer, or the secretary or any assistant secretary, of the Company or any Subsidiary Guarantor, as the case may be. "Officers' Certificate" means, with respect to any Person, a certificate signed by two officers, one of which must be the principal executive, principal financial or principal accounting officer. 4 "Opinion of Counsel" means a written opinion signed by legal counsel, who may be an employee of or counsel to the Company or any Subsidiary Guarantor. Each opinion shall include the statements provided for in Section 13.05 hereof. "Original Issue Discount Note" means any Note that provides that an amount less than its principal amount is due and payable upon acceleration after an Event of Default. "Payment Blockage Period" has the meaning assigned to such term in Section 11.02. "Payment Default" has the meaning assigned to such term in Section 11.02. "Payment Notice" has the meaning assigned to such term in Section 11.02. "Paying Agent" has the meaning assigned to such term in Section 2.03(a) hereof. "Person" means any individual, corporation, partnership, joint venture, trust, estate, unincorporated organization or government or any agency or political subdivision thereof. "Post-Commencement Interest" means all interest accrued or accruing after the commencement of any Insolvency or Liquidation Proceeding in accordance with and at the contract rate (including, without limitation, any rate applicable upon default) specified in the agreement or instrument creating, evidencing, or governing any Senior Indebtedness, whether or not, pursuant to applicable law or otherwise, the claim for such interest is allowed as a claim in such Insolvency or Liquidation Proceeding. "Principal" of any indebtedness means the principal amount of such indebtedness (or if such indebtedness was issued with original issue discount, the face amount of such indebtedness less the remaining unamortized portion of the original issue discount of such indebtedness), together with, unless the context otherwise indicates, any premium then payable on such indebtedness. "Redemption Price" has the meaning assigned to such term in Section 3.01(b)(ii). "Register" has the meaning assigned to such term in Section 2.03(a) hereof. "Registrar" has the meaning assigned to such term in Section 2.03(a) hereof. "Regular Record Date" means, for the interest payable on any Interest Payment Date in respect of any series of Notes, except as provided in, or pursuant to, Board Resolution and/or supplemental indenture (if any) relating thereto, the day (whether or not a Business Day) that is fifteen days preceding the applicable Interest Payment Date. "Responsible Officer" shall mean, when used with respect to the Trustee, any officer within the corporate trust department of the Trustee, including any vice president, assistant vice president, treasurer, assistant treasurer, trust officer or any other officer of the Trustee who customarily performs functions similar to those performed by the persons who at the time shall be such officers, respectively, or to whom any corporate trust matter is referred because of such 5 person's knowledge of and familiarity with the particular subject and who shall have direct responsibility for the administration of this Indenture. "Restricted Subsidiary" means any Subsidiary of the Company other than an Unrestricted Subsidiary. "Senior Indebtedness" has, for any series of Notes issued or outstanding hereunder, the meaning assigned to such term pursuant to a Board Resolution or an Officers' Certificate or established in one or more indentures supplemental hereto, prior to the issuance of Notes of any series pursuant to Section 2.01. "Special Record Date" has the meaning assigned to such term in Section 2.11 hereof. "Stated Maturity" means with respect to any indebtedness, the date specified as the fixed date on which the final installment of principal of such indebtedness is due and payable. "Subordinated Notes" has the meaning assigned to such term in Section 11.01 hereof. "Subordinated Securities" means, with respect to Subordinated Notes, securities of the Company or any Subsidiary Guarantor that are subordinated at least to the same extent as the Subordinated Notes or Guarantees, respectively, to Senior Indebtedness of the Company and such Subsidiary Guarantor and to any securities that are issued in exchange for any such Senior Indebtedness. A "subsidiary" of any Person means (1) a corporation a majority of whose Voting Stock is at the time, directly or indirectly, owned by such Person, by one or more subsidiaries of such Person or by such Person and one or more subsidiaries of such Person, (2) a partnership in which such Person or a subsidiary of such Person is, at the date of determination, a general or limited partner of such partnership, but only if such Person or its subsidiary is entitled to receive more than 50% of the assets of such partnership upon its dissolution, or (3) any other Person (other than a corporation or partnership) in which such Person, directly or indirectly, at the date of determination thereof, has (A) at least a majority ownership interest or (B) the power to elect or direct the election of a majority of the directors or other governing body of such Person. For purposes of the foregoing definition, an arrangement by which a Person who owns an interest in an oil and gas property is subject to a joint operating agreement, processing agreement, net profits interest, overriding royalty interest, farm-out agreement, development agreement, area of mutual interest agreement, joint bidding agreement, unitization agreement, pooling arrangement or other similar agreement or arrangement shall not, in and of itself, cause such Person to be considered a Subsidiary. "Subsidiary" means any subsidiary of the Company. "Subsidiary Guarantor" means (i) each of the Company's Subsidiaries in existence on the date of this Indenture, except for Navajo Convenient Stores Co., LLC, (ii) each of the Subsidiaries that becomes a guarantor of the Notes in compliance with the provisions of this Indenture and (iii) each of the Subsidiaries executing a supplemental indenture in which such Subsidiary agrees to be bound by the terms of the Indenture; and their respective successors and 6 assigns until released from their obligations under their Guarantee in accordance with the Indenture. "Trust Indenture Act" means the Trust Indenture Act of 1939 as in effect on the date this Indenture is originally executed. "Trustee" means the party named as such in the first paragraph of the Indenture or any successor trustee under the Indenture pursuant to Article VII. If at any time there is more than one Person acting as Trustee hereunder, "Trustee" as used with respect to the Notes of any series shall mean the Trustee with respect to the Notes of that series. "Unrestricted Subsidiary" means (1) any Subsidiary of the Company which at the time of determination shall be an Unrestricted Subsidiary (as designated by the Company's Board of Directors, as provided below) and (2) any Subsidiary of an Unrestricted Subsidiary. The Company's Board of Directors may designate any Subsidiary of the Company (including any newly acquired or newly formed Subsidiary) to be an Unrestricted Subsidiary unless such Subsidiary owns any Capital Stock of, or owns, or holds any Lien on, any property of the Company or any other Restricted Subsidiary of the Company which is not a Subsidiary of the Subsidiary to be so designated. The Company's Board of Directors may designate any Unrestricted Subsidiary to be a Restricted Subsidiary. The Company shall not, and shall not cause or permit any Restricted Subsidiary to, at any time (1) provide credit support for, or subject any of its property or assets, other than the capital stock of any Unrestricted Subsidiary, to the satisfaction of, any Indebtedness of any Unrestricted Subsidiary, including any undertaking, agreement or instrument evidencing such Indebtedness, or (2) be directly or indirectly liable for any Indebtedness of any Unrestricted Subsidiary. For purposes of the foregoing, the designation of a Subsidiary as an Unrestricted Subsidiary shall be deemed to be the designation of all of the Subsidiaries of such Subsidiary. "U.S. Government Obligations" means securities that are (1) direct obligations of the United States of America for the payment of which its full faith and credit is pledged, (2) obligations of a Person controlled or supervised by and acting as an agency or instrumentality of the United States of America the payment of which is unconditionally guaranteed as a full faith and credit obligation of the United States of America, which, in either case under clauses (1) or (2) are not callable or redeemable at the option of the issuer thereof. "Voting Stock" means, with respect to any Person, securities of any class or classes of Capital Stock in such Person entitling the holders thereof (whether at all times or only so long as no senior class of stock has voting power by reason of any contingency) to vote in the election of members of the Board of Directors or other governing body of such Person. Section 1.02. Rules of Construction. Unless the context otherwise requires or except as otherwise expressly provided, (1) an accounting term not otherwise defined has the meaning assigned to it in accordance with GAAP; 7 (2) "herein," "hereof" and other words of similar import refer to the Indenture as a whole and not to any particular Section, Article or other subdivision; (3) all references to Sections or Articles or Exhibits refer to Sections or Articles or Exhibits of or to the Indenture unless otherwise indicated; (4) references to agreements or instruments, or to statutes or regulations, are to such agreements or instruments, or statutes or regulations, as amended from time to time (or to successor statutes and regulations); (5) in the event that a transaction meets the criteria of more than one category of permitted transactions or listed exceptions the Company may classify such transaction as it, in its sole discretion, determines; (6) a term has the meaning assigned to it; (7) "or" is not exclusive; (8) words in the singular include the plural, and words in the plural include the singular; (9) any gender used in this Indenture shall be deemed to include the neuter, masculine or feminine genders; and (10) provisions apply to successive events and transactions. Section 1.03. Incorporation by Reference of the Trust Indenture Act. Whenever this Indenture refers to a provision of the Trust Indenture Act, the provision is incorporated by reference in and made a part of this Indenture. The following Trust Indenture Act terms used in this Indenture have the following meanings: (1) "indenture securities" means the Notes. (2) "indenture securityholder" means a Noteholder. (3) "indenture to be qualified" means this Indenture. (4) "indenture trustee" or "institutional trustee" means the Trustee. (5) "obligor" on the Notes means the Company and any successor obligor on the Notes. All other terms used in this Indenture that are defined by the Trust Indenture Act, defined by Trust Indenture Act reference to another statute or defined by Commission rule under the Trust Indenture Act have the meanings so assigned to them. 8 ARTICLE II THE NOTES Section 2.01. Unlimited in Amount, Issuable in Series, Form and Dating. The aggregate principal amount of Notes that may be authenticated and delivered under this Indenture is unlimited. The Notes may be issued in one or more series. The Notes may be subordinated in right of payment to Senior Indebtedness as provided in Article XI. There shall be established in or pursuant to a Board Resolution or an Officers' Certificate pursuant to authority granted under a Board Resolution or established in one or more indentures supplemental hereto, prior to the issuance of Notes of any series, any or all of the following, as applicable: (a) the title and series designation of the Notes of the series (which shall distinguish the Notes of the series from all other series of Notes); (b) any limit upon the aggregate principal amount of Notes of the series that may be authenticated and delivered under this Indenture (except for Notes authenticated and delivered upon registration of transfer of, or in exchange for, or in lieu of, other Notes of the series pursuant to this Article II); (c) the price or prices (expressed as a percentage of the aggregate principal amount thereof) at which the Notes of the series will be issued; (d) the date or dates on which the principal of the Notes of the series is payable or the manner in which such date or dates are determined; (e) the rate or rates that may be fixed or variable at which the Notes of the series shall bear interest, if any, or the manner in which such rate or rates shall be determined, the date or dates from which such interest shall accrue, the Interest Payment Dates for the Notes of the series and the Regular Record Dates for the determination of Holders to whom interest is payable and the basis upon which interest shall be calculated, if other than on the basis of a 360-day year of twelve, 30-day months; (f) the place or places where the principal of, premium, if any, and any interest, if any, on Notes of the series shall be payable or the method of such payment, if by wire transfer, mail or by other means; and the place or places where notices or demands to or upon the Company in respect of the Notes of the series and this Indenture may be served, if, in each case, other than as provided herein; (g) the obligation or right, if any, of the Company to redeem, purchase or repay Notes of the series, in whole or in part, pursuant to any redemption, any sinking fund or analogous provisions or at the option of a Holder thereof, and the price or prices at which and the period and periods within which and the terms and conditions upon which Notes of the series may or shall be redeemed, purchased or repaid, in whole or in part, pursuant to such obligation or right; (h) the date or dates, if any, on which, and the price or prices at which, the Notes of the series will be repurchased by the Company at the option of the Holders thereof and other detailed terms and provisions of such repurchase obligations; 9 (i) if other than the Trustee, the identity of the trustee, Registrar and/or Paying Agent and, if applicable, the Authentication Agent for the Notes of that series; (j) if other than denominations of $1,000 and any integral multiple thereof, the denominations in which Notes of the series shall be issuable; (k) if other than the principal amount thereof, the portion of the principal amount of Notes of the series which shall be payable upon declaration of acceleration of the maturity thereof pursuant to Section 6.02 hereof or the method by which such portion shall be determined; (l) any addition to, change in, or deletion from the covenants set forth in Articles IV or V or the discharge and defeasance provisions set forth in Article VIII that applies to Notes of the series; (m) any addition to, changes in or deletion from the Events of Default with respect to the Notes of a particular series and any change in the right of the Trustee or the requisite Holders of such Notes to declare the principal amount thereof due and payable pursuant to Section 6.02 hereof; (n) whether the amount of payment of principal of (and premium, if any, on) or interest, if any, on the Notes of the series may be determined with reference to an index, formula or other method (which index, formula or method may be based, without limitation, on one or more currencies, commodities, equity indices, or other indices), and the manner in which such amounts shall be determined; (o) the terms and conditions of any warrants that may be offered by the Company in connection with Notes of any series; (p) the forms of the Notes of the series and whether the Notes will be issuable, in whole or in part, as Global Notes; (q) the terms and conditions, if any, upon which such Global Note or Notes may be exchanged in whole or in part for other individual Notes, and the Depositary for such Global Note and Notes, if other than as set forth herein; (r) the provisions, if any, relating to any security provided for the Notes of the series; (s) the terms and conditions, if any, upon which additional interest or amounts may be payable with respect to Notes of any series; (t) the terms and conditions, if any, upon which the Notes of the series shall be exchanged for or converted into other securities of the Company or securities of another Person; (u) any depositories, interest rate calculation agents or other agents with respect to Notes of such series if other than those appointed herein; 10 (v) whether the Notes of such series are subject to subordination and any modification of, addition to or provision in lieu of any of the provisions of Article XI hereof, and whether such Notes rank as senior Subordinated Notes or Subordinated Notes or any combination thereof; (w) whether payment of any amounts due on the Notes will be guaranteed by one of more guarantors, including Subsidiary Guarantors; (x) any terms and conditions of the Guarantees that differ from those described herein; (y) the securities exchange or quotation system, if any, upon which Notes of any series will be listed or quoted and any CUSIP number, if any; and (z) any other terms of the series (which terms may modify, supplement or delete any provision of this Indenture with respect to such series; provided, however, that no such term may modify or delete any provision hereof if imposed by the Trust Indenture Act; and provided, further, that any modification or deletion of the rights, duties or immunities of the Trustee hereunder shall have been consented to in writing by the Trustee). All Notes of any one series shall be substantially identical except as to denomination and except as may otherwise be provided in or pursuant to such Board Resolution or Officers' Certificate or in any such indenture supplemental hereto in each case, with appropriate insertions, omissions, substitutions and other variations as are required or permitted by this Indenture. Not all Notes of any one series need be issued at the same time, and, unless otherwise provided, a series may be reopened for issuance of additional Notes of such series. Notes may differ between series in respect of any matters, provided that all series of Notes shall be equally and ratably entitled to the benefits of this Indenture. The principal of, premium, if any, and any interest on the Notes shall be payable at the office or agency of the Company designated in the form of Note for the series (if other than the office or agency designated in Section 4.02 hereof); provided, however, that payment of interest may be made at the option of the Company by check mailed to the address of the Person entitled thereto as such address shall appear in the Register of Notes referred to in Section 2.03 hereof or by wire transfer to an account of the Person entitled thereto as such account shall be provided to the Registrar and shall appear on the Register. Each Note shall be in one of the forms approved from time to time by or pursuant to a Board Resolution or Officers' Certificate, or established in one or more indentures supplemental hereto. Prior to the delivery of a Note to the Trustee for authentication in any form approved by or pursuant to a Board Resolution, Officers' Certificate or supplemental indenture hereto, the Company shall deliver to the Trustee the Board Resolution, Officers' Certificate or supplemental indenture hereto by or pursuant to which such form of Note has been approved, which Board Resolution, Officers' Certificate or supplemental indenture hereto shall have attached thereto a true and correct copy of the form of Note that has been approved by or pursuant thereto. 11 The Notes may have notations, legends or endorsements required by law, stock exchange rule or usage. Section 2.02. Execution, Authentication and Denominations. The Notes shall be executed for the Company by two Officers by facsimile or manual signature in the name and on behalf of the Company. Such signatures may be the manual or facsimile signatures of such Officers. If an Officer whose signature is on a Note no longer holds that office at the time the Note is authenticated, the Note will still be valid. (a) A Note will not be valid until the Trustee manually signs the certificate of authentication on the Note, with the signature conclusive evidence that the Note has been authenticated under the Indenture. The form of the Trustee's certificate of authentication to be borne by the Notes shall be substantially as follows: TRUSTEE'S CERTIFICATE OF AUTHENTICATION This is one of the Notes issued under the within-mentioned Indenture. [Trustee], as Trustee By: _________________________________ Authorized Signatory Dated: _____________ (b) At any time and from time to time after the execution and delivery of this Indenture, the Company may deliver Notes of any series executed by the Company to the Trustee, together with a Company Order for the authentication and delivery of such Notes. The Company Order may provide that the Notes that are the subject thereof shall be authenticated and delivered by the Trustee upon the written order of Persons designated in the Company Order, and that such Persons are authorized to specify the terms and conditions of such Notes, to the extent permitted by the Board Resolutions, Officers' Certificate and/or supplemental indenture (if any) relating thereto. If not all the Notes of any series are to be issued at one time and if the Board Resolution, Officers' Certificate or supplemental indenture establishing such series shall so permit, such Company Order may set forth procedures acceptable to the Trustee for the issuance of such Notes and determination of the terms of particular Notes of such series such as interest rate, maturity date, date of issuance and date from which interest shall accrue. The Trustee shall execute and deliver the supplemental indenture (if any) relating to the Notes and the Trustee shall authenticate and deliver the Notes as specified in such Company Order; provided that, prior to authentication and delivery of the first Notes of any Series, the Trustee shall have received: (1) a copy of the Board Resolutions or Officers' Certificate, with a copy of (i) the form of Note approved thereby and (ii) with respect to an Officers' Certificate, the Board Resolution approving such series, attached thereto, or a supplemental indenture in respect of the issuance of the Notes of the series, executed on behalf of the Company; 12 (2) an Officers' Certificate to the effect that the Notes of such series comply or will comply with the requirements of this Indenture and the Board Resolutions, Officer's Certificate and/or supplemental indenture (if any); (3) an Opinion of Counsel: (i) to the effect that (A) the Notes of such series, the Board Resolutions, Officers' Certificate and/or the supplemental indenture (if any) relating thereto comply or will comply with the requirements of this Indenture, and (B) the Notes of such series, when authenticated and delivered by the Trustee in accordance with the said Company Order, will constitute valid, legal and binding obligations of the Company enforceable in accordance with their terms and will be entitled to the benefits of the Indenture, subject to (x) bankruptcy and other laws affecting creditors' rights generally as in effect from time to time, (y) limitations of generally applicable equitable principles and (z) other exceptions acceptable to the Trustee and its counsel; and (ii) relating to such other matters as may reasonably be requested by the Trustee or its counsel; and (4) if the Notes to be issued are Original Issue Discount Notes, an Officers' Certificate setting forth the yield to maturity for the Notes or other information sufficient to compute amounts due on acceleration, or specifying the manner in which such amounts are to be determined, if such yield to maturity and other facts are not specified in the form of the Notes. (c) Subject to Section 7.02 hereof, the Trustee shall be fully protected in relying upon the documents delivered to it as provided above in connection with the issuance of any series of Notes. (d) The Trustee shall have the right to decline to authenticate and deliver any Notes under this Section 2.02 if the Trustee, being advised by counsel, determines that such action may not lawfully be taken or the Trustee in good faith shall determine that such action would expose the Trustee to liability to Holders of previously issued and outstanding Notes. (e) Each Note shall be dated the date of its authentication unless otherwise specified in the Officers' Certificate, Board Resolutions and/or supplemental indenture relating thereto. (f) The Notes of each series shall be issuable in definitive registered form without coupons and, except for any Global Note, in such denominations as shall be specified as contemplated by Section 2.01. In the absence of any such provisions with respect to the Notes of any series, the Notes of such series, other than a Global Note, shall be issuable in denominations of $1,000 and any integral multiple thereof. Section 2.03. Registrar, Paying Agent and Authenticating Agent; Paying Agent to Hold Money in Trust. (a) The Company shall maintain an office or agency where Notes of a particular series may be presented for registration of transfer or for exchange (the 13 "Registrar") and an office or agency where Notes of that series may be presented for payment (a "Paying Agent"). The Registrar for a particular series of Notes shall keep a register of the holders of the Notes of that series and of their registration of transfer and exchange (the "Register"). The Company may appoint one or more co-Registrars and one or more additional paying agents for each series of Notes. The term "Paying Agent" includes any additional paying agent. The Company shall promptly notify the Trustee in writing of the name and address of any Paying Agent not a party to this Indenture. The Company may appoint an Authenticating Agent, in which case each reference in the Indenture to the Trustee in respect of the obligations of the Trustee to be performed by that Agent will be deemed to be references to the Agent. The Company may act as Registrar or (except for purposes of Article VIII) Paying Agent. In each case the Company and the Trustee will enter into an appropriate agreement with the Agent implementing the provisions of the Indenture relating to the obligations of the Trustee to be performed by the Agent and the related rights. The Company initially appoints the Trustee as Registrar and Paying Agent. The Company may change the Registrar or Paying Agent without notice to any Holder; provided that upon any bankruptcy or reorganization proceedings relating to the Company, the Trustee may serve as Paying Agent for the Notes. (b) On or prior to each due date of the principal of, premium, if any, and interest on any Note, the Company shall deposit with the Paying Agent a sum sufficient to pay such amount when so becoming due. The Company will require each Paying Agent other than the Trustee to agree in writing that the Paying Agent will hold in trust for the benefit of the Holders or the Trustee all money held by the Paying Agent for the payment of principal of, premium, if any, and interest on the Notes and will promptly notify the Trustee of any default by the Company in making any such payment. The Company at any time may require a Paying Agent to pay all money held by it to the Trustee and account for any funds disbursed, and the Trustee may at any time during the continuance of any payment default, upon written request to a Paying Agent, require the Paying Agent to pay all money held by it to the Trustee and to account for any funds disbursed. Upon doing so, the Paying Agent will have no further liability for the money so paid over to the Trustee. Section 2.04. Replacement Notes. If a mutilated Note is surrendered to the Trustee or the Company or if a Holder claims that its Note has been lost, destroyed or wrongfully taken, the Company will issue and the Trustee will authenticate a replacement Note of like tenor and principal amount and bearing a number not contemporaneously outstanding. Every replacement Note is an additional obligation of the Company and entitled to the benefits of the Indenture. An indemnity must be furnished by the Holder that is sufficient in the judgment of both the Trustee and the Company to protect the Company, the Subsidiaries, the Trustee, and any Agent from any loss they may suffer if a Note is replaced. The Company may charge the Holder for the expenses of the Company and the Trustee in replacing a Note. In case the mutilated, lost, destroyed or wrongfully taken Note has become or is about to become due and payable, the Company in its discretion may pay the Note instead of issuing a replacement Note. Upon the issuance of any replacement Note under this Section, the Company may require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other expenses (including the fees and expenses of the Trustee) connected therewith. 14 Section 2.05. Outstanding Notes. (a) Notes outstanding at any time are all Notes that have been authenticated by the Trustee except for: (i) Notes cancelled by the Trustee or delivered to it for cancellation; (ii) any Note which has been replaced pursuant to Section 2.04 unless and until the Trustee and the Company receive proof satisfactory to them that the replaced Note is held by a bona fide purchaser in whose hands such Note is a valid obligation of the Company; (iii) on or after the maturity date or any redemption date, those Notes payable or to be redeemed or purchased on that date for which the Trustee (or Paying Agent, other than the Company or an Affiliate of the Company) holds in trust money sufficient to pay all amounts then due; provided that if such Notes, or portions thereof, are to be redeemed prior to the maturity thereof, notice of such redemption shall have been given as herein provided, or provisions satisfactory to the Trustee shall have been made for giving such notice; and (iv) solely to the extent provided in Article VIII, Notes which are subject to legal defeasance or covenant defeasance as provided in Section 8.02 or 8.03. (b) A Note does not cease to be outstanding because the Company, a Subsidiary or one of their Affiliates holds the Note, provided that in determining whether the Holders of the requisite principal amount of the outstanding Notes have given or taken any request, demand, authorization, direction, notice, consent, waiver or other action hereunder, Notes owned by the Company or any Affiliate of the Company will be disregarded and deemed not to be outstanding (it being understood that in determining whether the Trustee is protected in relying upon any such request, demand, authorization, direction, notice, consent, waiver or other action, only Notes which a Responsible Officer of the Trustee knows to be so owned will be so disregarded). Notes so owned which have been pledged in good faith may be regarded as outstanding if the pledgee establishes to the satisfaction of the Trustee the pledgee's right so to act with respect to such Notes and that the pledgee is not the Company or any Affiliate of the Company. (c) In determining whether the holders of the requisite principal amount of outstanding Notes of any or all series have given any request, demand, authorization, direction, notice, consent or waiver hereunder, (i) the principal amount of an Original Issue Discount Note that shall be deemed to be outstanding for such purposes shall be the amount of the principal thereof that would be due and payable as of the date of such determination upon a declaration of acceleration of the maturity thereof, and (ii) Notes owned beneficially by the Company or any other obligor on the Notes with respect to which such determination is being made or any Affiliate of the Company or any Affiliate of any other obligor on the Notes with respect to which such determination is being made shall be disregarded and deemed not to be outstanding, except that, in determining 15 whether the Trustee shall be protected in relying upon any such request, demand, authorization, direction, notice, consent or waiver, only Notes which a Responsible Officer of the Trustee actually knows to be so owned shall be so disregarded. Notes so owned by the Company which have been pledged in good faith may be regarded as outstanding for such purpose if the pledgee establishes to the satisfaction of the Trustee the pledgee's right so to act with respect to such Notes and that the pledgee is not the Issuer. Section 2.06. Temporary Notes. Until definitive Notes of any series are ready for delivery, the Company may prepare and the Trustee will authenticate temporary Notes upon a Company Order. Temporary Notes will be substantially in the form of definitive Notes of such series but may have insertions, substitutions, omissions and other variations determined to be appropriate by the Officers executing the temporary Notes, as evidenced by the execution and authentication of the temporary Notes. If temporary Notes are issued, the Company will cause definitive Notes to be prepared without unreasonable delay. After the preparation of definitive Notes, the temporary Notes will be exchangeable for definitive Notes upon surrender of the temporary Notes at the office or agency of the Company designated for the purpose pursuant to Section 4.02, without charge to the Holder. Upon surrender for cancellation of any temporary Notes, the Company will execute and the Trustee will authenticate and deliver in exchange therefor a like principal amount of definitive Notes of authorized denominations. Until so exchanged, the temporary Notes will be entitled to the same benefits under the Indenture as definitive Notes. Section 2.07. Cancellation. The Company at any time may deliver to the Trustee for cancellation any Notes previously authenticated and delivered hereunder which the Company may have acquired in any manner whatsoever, and may deliver to the Trustee for cancellation any Notes previously authenticated hereunder that the Company has not issued and sold. Any Registrar or the Paying Agent will forward to the Trustee any Notes surrendered to it for transfer, exchange or payment. The Trustee will cancel all Notes surrendered for transfer, exchange, payment or cancellation and dispose of them in accordance with its normal procedures or a Company Order. The Trustee shall deliver certification of all cancelled Notes to the Company and shall return cancelled Notes to the Company upon its written request therefor. The Company may not issue new Notes to replace Notes it has paid in full or delivered to the Trustee for cancellation. If the Company acquires any of the Notes, such acquisition shall not operate as a redemption or satisfaction of indebtedness represented by such Notes unless or until the same are delivered to the Trustee for cancellation. Section 2.08. CUSIP Numbers. The Company in issuing the Notes may use "CUSIP" numbers, and the Trustee will use CUSIP numbers in notices of redemption or exchange as a convenience to Holders. Any such notice may state that no representation is made as to the correctness of such numbers either as printed on the Notes or as contained in any notice of redemption or exchange and reliance may be placed only on the identification number printed on the Notes, and any such redemption or exchange shall not be affected by any defect or omission in such numbers. The Company will promptly notify the Trustee in writing of any change in the CUSIP numbers. Section 2.09. Global Notes; Transfer and Exchange. 16 (a) The Notes will be issued in registered form only, without coupons, and the Company shall cause the Registrar to maintain the Register for registering the record ownership of the Notes by the Holders and transfers and exchanges of the Notes. (b) Each Global Note will be registered in the name of the Depositary or its nominee. The Depositary shall be a clearing agency registered under the Exchange Act. The Company initially appoints DTC to act as Depositary with respect to the Notes in global form. Initially, the Global Notes shall be issued to the Depositary, registered in the name of Cede & Co., as the nominee of the Depositary, and deposited with the Trustee as custodian for Cede & Co. So long as DTC is serving as the Depositary thereof, each Global Note will bear the DTC Legend. (i) Each Global Note will be delivered to the Trustee as custodian for the Depositary. Transfers of a Global Note (but not a beneficial interest therein) will be limited to transfers thereof in whole, but not in part, by the Depositary to a nominee of the Depositary or by a nominee of the Depositary to the Depositary or another nominee of the Depositary or by the Depositary or any such nominee to a successor Depositary or a nominee of such successor Depositary except as set forth in Section 2.09(b)(iv). (ii) Agent Members will have no rights under the Indenture with respect to any Global Note held on their behalf by the Depositary, and the Depositary may be treated by the Company, the Trustee and any agent of the Company or the Trustee as the absolute owner and Holder of such Global Note for all purposes whatsoever. Notwithstanding the foregoing, the Depositary or its nominee may grant proxies and otherwise authorize any Person (including any Agent Member and any Person that holds a beneficial interest in a Global Note through an Agent Member) to take any action which a Holder is entitled to take under the Indenture or the Notes, and nothing herein will impair, as between the Depositary and its Agent Members, the operation of customary practices governing the exercise of the rights of a holder of any security. (iii) If (A) the Depositary notifies the Company that it is unwilling or unable to continue as Depositary for a Global Note and a successor depositary is not appointed by the Company within 90 days of the notice or (B) the Company notifies the Trustee to effect such exchange, the Trustee will promptly exchange each beneficial interest in the Global Note for one or more Certificated Notes in authorized denominations having an equal aggregate principal amount and registered in the name of the owner of such beneficial interest, as identified to the Trustee by the Depositary, and thereupon the Global Note will be deemed canceled. (iv) Unless otherwise provided herein or in a Board Resolution or Officers' Certificate establishing a series of Notes or in an indenture supplemental hereto, beneficial interests in a Global Note may not be exchanged for Certificated Notes. 17 (c) Each Certificated Note will be registered in the name of the Holder thereof or its nominee. (d) A Holder may transfer a Note of any series (or a beneficial interest therein) to another Person or exchange a Note of any series (or a beneficial interest therein) for another Note or Notes of any authorized denomination of the same series by presenting to the Trustee a written request therefor stating the name of the proposed transferee or requesting such an exchange, accompanied by any certification, opinion or other document reasonably required by the Trustee. The Trustee will promptly register any transfer or exchange that meets the requirements of this Section by noting the same in the register maintained by the Trustee for the purpose; provided that: (i) no transfer or exchange will be effective until it is registered in such register, and (ii) the Trustee will not be required (A) to issue, register the transfer of or exchange any Note of any particular series during the period 15 days before the day of mailing of a note of redemption of Notes of that series to be redeemed or purchased, (B) to register the transfer of or exchange any Note so selected for redemption or purchase in whole or in part, except, in the case of a partial redemption or purchase, that portion of any Note not being redeemed or purchased, or (C) if a redemption or a purchase is to occur after a Regular Record Date but on or before the corresponding Interest Payment Date, to register the transfer of or exchange such Note on or after the Regular Record Date and before the date of redemption or purchase. Prior to the registration of any transfer, the Company, the Trustee and their agents will treat the Person in whose name the Note is registered as the owner and Holder thereof for all purposes (whether or not the Note is overdue) and will not be affected by notice to the contrary. From time to time the Company will execute and the Trustee will authenticate additional Notes as necessary in order to permit the registration of a transfer or exchange in accordance with this Section. No service charge will be imposed in connection with any transfer or exchange of any Note, but the Company may require payment of a sum sufficient to cover any transfer tax or similar governmental charge payable in connection therewith (other than a transfer tax or other similar governmental charge payable upon exchange pursuant to subsection (b)(iv)). (e) If a beneficial interest in a Global Note of any particular series is transferred or exchanged for a beneficial interest in another Global Note of the same series, the Trustee will (A) record a decrease in the principal amount of the Global Note being transferred or exchanged equal to the principal amount of such transfer or exchange and (B) record a like increase in the principal amount of the other Global Note. Any beneficial interest in one Global Note that is so transferred to a Person who takes delivery in the form of an interest in another Global Note, or so exchanged for an interest in another Global Note, will, upon such transfer or exchange, cease to be an interest in such 18 Global Note and become an interest in such other Global Note for as long as it remains such an interest. (f) If a beneficial interest in a Global Note of any particular series is transferred or exchanged for a Certificated Note of the same series, the Trustee will (A) record a decrease in the principal amount of such Global Note equal to the principal amount of such transfer or exchange and (B) deliver one or more new Certificated Notes of such series in authorized denominations having an equal aggregate principal amount to the transferee (in the case of a transfer) or the owner of such beneficial interest (in the case of an exchange), registered in the name of such transferee or owner, as applicable. (g) If a Certificated Note of any particular series is transferred or exchanged for a beneficial interest in a Global Note of the same series, the Trustee will (A) cancel such Certificated Note, (B) record an increase in the principal amount of such Global Note equal to the principal amount of such transfer or exchange and (C) in the event that such transfer or exchange involves less than the entire principal amount of the canceled Certificated Note, deliver to the Holder thereof one or more new Certificated Notes of the same series in authorized denominations having an aggregate principal amount equal to the untransferred or unexchanged portion of the canceled Certificated Note, registered in the name of the Holder thereof. (h) If a Certificated Note of any particular series is transferred or exchanged for another Certificated Note of the same series, the Trustee will (A) cancel the Certificated Note being transferred or exchanged, (B) deliver one or more new Certificated Notes of such series in authorized denominations having an aggregate principal amount equal to the principal amount of such transfer or exchange to the transferee (in the case of a transfer) or the Holder of the canceled Certificated Note (in the case of an exchange), registered in the name of such transferee or Holder, as applicable, and (C) if such transfer or exchange involves less than the entire principal amount of the canceled Certificated Note, deliver to the Holder thereof one or more Certificated Notes of such series in authorized denominations having an aggregate principal amount equal to the untransferred or unexchanged portion of the canceled Certificated Note, registered in the name of the Holder thereof. (i) With respect to the Trustee, (i) The Trustee shall have no responsibility or obligation to any beneficial owner in a Global Note, a member of, or a participant in the Depository or other Person with respect to the accuracy of the records of the Depository or its nominee or of any participant or member thereof, with respect to any ownership interest in the Notes or with respect to the delivery to any participant, member, beneficial owner or other Person (other than the Depository) of any notice (including any notice of redemption) or the payment of any amount, under or with respect to such Notes. All notices and communications to be given to the Holders and all payments to be made to Holders under the Notes shall be given or made only to or upon the order of the registered Holders (which shall be the Depository or its nominee in the case of the Global Note). The rights of beneficial owners in 19 the Global Note shall be exercised only through the Depository subject to the applicable rules and procedures of the Depository. The Trustee may rely and shall be fully protected in relying upon information furnished by the Depository with respect to its members, participants and any beneficial owners. (ii) The Trustee shall have no obligation or duty to monitor, determine or inquire as to compliance with any restrictions on transfer imposed under this Indenture or under applicable law with respect to any transfer of any interest in any Note (including any transfers between or among Depository participants, members or beneficial owners in the Global Note) other than to make any required delivery of such certificates and other documentation or evidence as are expressly required by, and to do so if and when expressly required by, the terms of this Indenture, and to examine the same to determine substantial compliance as to form with the express requirements hereof. Section 2.10. Noteholder Lists. The Trustee shall preserve in as current a form as is reasonably practicable the most recent list available to it of the names and addresses of Noteholders, separately by series, and shall otherwise comply with Trust Indenture Act Section 312(a). If the Trustee is not the Registrar, the Company shall furnish to the Trustee on the Regular Record Date and at such other times as the Trustee may request in writing, a list in such form and as of such date as the Trustee may reasonably require of the names and addresses of Noteholders, separately by series, relating to such Interest Payment Date or request, as the case may be. Section 2.11. Defaulted Interest. If the Company defaults in a payment of interest on the Notes of any series, such installment of interest shall forthwith cease to be payable to the Holders in whose names the Notes were registered on the Regular Record Date applicable to such installment of interest. Defaulted interest (including any interest on such defaulted interest) may be paid by the Company, at its election, as provided in clause (a) or (b) below. (a) The Company may elect to make payment of any defaulted interest (including any interest on such defaulted interest) to the Holders in whose names the Notes are registered at the close of business on a special record date for the payment of such defaulted interest (a "Special Record Date"), which shall be fixed in the following manner. The Company shall notify the Trustee in writing of the amount of defaulted interest proposed to be paid and the date of the proposed payment. Thereupon the Trustee shall fix a Special Record Date for the payment of such defaulted interest, which shall not be more than 15 calendar days and not less than 10 calendar days prior to the date of the proposed payment and not less than 10 calendar days after the receipt by the Trustee of the notice of the proposed payment. The Trustee shall promptly notify the Company of such Special Record Date and, in the name and at the expense of the Company, shall cause notice of the proposed payments of such defaulted interest and the Special Record Date therefor to be sent, first-class mail, postage prepaid, to each Holder at such Holder's address as it appears in the registration books of the Registrar, at least 15 calendar days prior to such Special Record Date. Notice of the proposed payment of such defaulted interest and the Special Record Date therefor having been mailed as aforesaid, such defaulted interest shall be paid to the Holders in whose names the Notes are 20 registered at the close of business on such Special Record Date and shall no longer be payable pursuant to the following clause (b). (b) Alternatively, the Company may make payment of any defaulted interest (including any interest on such defaulted interest) in any other lawful manner not inconsistent with the requirements of any securities exchange on which the Notes may be listed, and upon such notice as may be required by such exchange, if, after notice given by the Company to the Trustee of the proposed payment pursuant to this clause (b), such manner of payment shall be deemed practicable by the Trustee. Section 2.12. Computation of Interest. Except as otherwise specified as contemplated by Section 2.01 for Notes of any series, any interest on the Notes of each series shall be computed on the basis of a 360-day year of twelve, 30-day months. ARTICLE III. REDEMPTION Section 3.01. Method and Effect of Redemption. (a) If the Company elects to redeem Notes of any series pursuant to the optional redemption provisions (if any) thereof, it must notify the Trustee of the redemption date, the redemption price and the principal amount of Notes of that series to be redeemed by delivering written notice at least 35 days before the redemption date (unless a shorter period is satisfactory to the Trustee). Any such notice may be cancelled at any time prior to notice of such redemption being mailed to any Holder and shall thereby be void and of no effect. If fewer than all of the Notes of any series are being redeemed, the particular Notes to be redeemed shall be selected not more than 30 days prior to the redemption date by the Trustee, from the outstanding Notes of such series not previously called for redemption, by such method as may be specified by the terms of such Notes or, if no such method is so specified, by such method as the Trustee shall deem fair and appropriate. The Trustee shall notify the Company promptly in writing of the Notes or portions of Notes to be called for redemption and, in the case of any Notes selected for partial redemption, the principal amount thereof to be redeemed. Except as otherwise provided as to any particular series of Notes, Notes and portions thereof that the Trustee selects shall be in amounts equal to the minimum authorized denomination for Notes of the series to be redeemed or any integral multiple thereof, except that if all of the Notes of the series are to be redeemed, the entire outstanding amount of the Notes of the series held by such Holder, even if not equal to the minimum authorized denomination for the Notes of that series, shall be redeemed. Provisions of this Indenture that apply to Notes called for redemption also apply to portions of Notes called for redemption. (b) Notice of redemption must be mailed by first-class mail by the Company or at the Company's request, by the Trustee in the name and at the expense of the Company, to Holders at the address set forth in the most recent noteholder list described in Section 2.10 hereof whose Notes are to be redeemed at least 30 days but not more than 60 days before the redemption date (unless the Trustee shall have agreed to a shorter 21 period). The notice of redemption will identify the Notes (including CUSIP numbers) to be redeemed and will include or state the following: (i) the redemption date; (ii) the redemption price fixed in accordance with the terms of the Notes of the series to be redeemed, plus accrued interest, if any, to the date fixed for redemption (the "Redemption Price"); (iii) the place or places where Notes are to be surrendered to the Paying Agent for redemption; (iv) that Notes called for redemption must be so surrendered to the Paying Agent in order to collect the Redemption Price; (v) that, on the redemption date, the Redemption Price will become due and payable on Notes called for redemption, and, unless the Company defaults in payment of the Redemption Price, interest on Notes called for redemption will cease to accrue on and after the redemption date; (vi) if less than all the outstanding Notes of any series are to be redeemed, the identification (and, in the case of partial redemption, the principal amounts) of the particular Notes to be redeemed; (vii) if any Note contains a CUSIP number, no representation is being made as to the correctness of the CUSIP number either as printed on the Notes or as contained in the notice of redemption and that the Holder should rely only on the other identification numbers printed on the Notes; and (viii) that the redemption is for a sinking fund, if such is the case. (ix) Once notice of redemption is sent to the Holders, Notes called for redemption become due and payable at the Redemption Price on the redemption date, and upon surrender of the Notes called for redemption, the Company shall redeem such Notes at the Redemption Price. Commencing on the redemption date, Notes redeemed will cease to accrue interest. Upon surrender of any Note redeemed in part, the Holder will receive a new Note equal in principal amount to the unredeemed portion of the surrendered Note. Section 3.02. Exclusion of Certain Notes From Eligibility for Selection for Redemption. Notes shall be excluded from eligibility for selection for redemption if they are identified by registration and certificate number in an Officers' Certificate delivered to the Trustee at least 40 days prior to the last date on which notice of redemption may be given as being owned of record and beneficially by, and not pledged or hypothecated by either (a) the Company or (b) an entity specifically identified in such Officers' Certificate as an Affiliate of the Company. Section 3.03. Deposit of Redemption Price. Prior to 10:00 a.m. E.S.T. on any redemption date, the Company shall deposit with the Trustee or with a Paying Agent (or, if the 22 Company is acting as its own Paying Agent, segregate and hold in trust as provided in Section 4.04) an amount of money sufficient to pay the Redemption Price of, and (except if the redemption date shall be an Interest Payment Date, unless otherwise specified in or pursuant to the Board Resolutions or in the supplemental indenture executed in connection with the particular series of Notes) any accrued interest on, all the Notes or portions thereof which are to be redeemed on that date. ARTICLE IV. COVENANTS Section 4.01. Payment of Principal, Premium and Interest. The Company covenants and agrees for the benefit of each series of Notes that it will duly and punctually pay or cause to be paid the principal of, and interest on, each of the Notes of such series (together with any additional amounts payable pursuant to the terms of such Notes) at the place or places, at the respective time or times and in the manner provided in such Notes and in this Indenture. Each installment of interest on any Note may at the Company's option be paid by mailing a check for such interest, payable to or upon the written order of the Person entitled thereto pursuant to Section 2.03, to the address of such Person as it appears on the Register or by wire transfer to an account of the Person entitled thereto as such account shall be provided to the Registrar and shall appear on the Register. At the option of the Company, all payments of principal may be paid by official bank check to the Holder of the Note or other Person entitled thereto against surrender of such Note. Section 4.02. Offices for Payments, Etc. The Company will maintain in the Borough of Manhattan, The City of New York, an agency where the Notes of each series may be presented for payment, an agency where the Notes of each series may be presented for exchange as is provided in this Indenture and, if applicable, pursuant to Section 2.03 an agency where the Notes of each series may be presented for registration of transfer as is provided in this Indenture, which, in each case, initially shall be the Corporate Trust Office of the Trustee. The Company will give to the Trustee written notice of the location of each such agency and of any change of location thereof. In case the Company shall fail to maintain any agency required by this Section to be located in the Borough of Manhattan, The City of New York, or shall fail to give such notice of the location or of any change in the location of any of the above agencies, presentations and demands may be made and notices may be served at the Corporate Trust Office of the Trustee. The Company hereby initially appoints the Trustee as its agency for each of said purposes. The Company may from time to time designate one or more additional agencies where the Notes of a series may be presented for payment, where the Notes of that series may be presented for exchange as provided in this Indenture and pursuant to Section 2.03 and where the Notes of that series may be presented for registration of transfer as provided in this Indenture, and the Company may from time to time rescind any such designation, as the Company may deem desirable or expedient; provided, however, that no such designation or rescission shall in any manner relieve the Company of its obligation to maintain the agency provided for in the first paragraph of this Section 4.02. The Company will give to the Trustee prompt written notice of any such designation or rescission thereof. 23 Section 4.03. Appointment to Fill a Vacancy in Office of Trustee. The Company, whenever necessary to avoid or fill a vacancy in the office of Trustee, will appoint, in the manner provided in Section 7.08, a Trustee, so that there shall at all times be a Trustee with respect to each series of Notes hereunder. Section 4.04. Paying Agents. Whenever the Company shall appoint a paying agent other than the Trustee with respect to the Notes of any series, it will cause such paying agent to execute and deliver to the Trustee an instrument in which such agent shall agree with the Trustee, subject to the provisions of this Section, (a) that it will hold all sums received by it as such agent for the payment of the principal of or interest on the Notes of such series in trust for the benefit of the holders of the Notes of such series or of the Trustee; (b) that it will give the Trustee notice of any failure by the Company to make any payment of the principal of or interest on the Notes of such series when the same shall be due and payable; and (c) that at any time during the continuance of any such failure, upon the written request of the Trustee it will forthwith pay to the Trustee all sums so held in trust by such paying agent. The Company will, prior to each due date of the principal of or interest on the Notes of such series, deposit with the paying agent a sum sufficient to pay such principal or interest so becoming due, and (unless such paying agent is the Trustee) the Company will promptly notify the Trustee of any failure to take such action. If the Company shall act as its own paying agent with respect to the Notes of any series, it will, on or before each due date of the principal of or interest on the Notes of such series, set aside, segregate and hold in trust for the benefit of the holders of the Notes of such series a sum sufficient to pay such principal or interest so becoming due. The Company will promptly notify the Trustee of any failure to take such action. Notwithstanding anything in this Section to the contrary, the Company may, at any time, for the purpose of obtaining satisfaction and discharge of one or more series of Notes, or for any other reason, pay, or cause to be paid, to the Trustee all sums held in trust by the Company or any Paying Agent, such sums to be held by the Trustee upon the same trusts and upon the same arrangement as those upon which such sums were held by the Company or such Paying Agent. Notwithstanding anything in this Section to the contrary, the agreement to hold sums in trust as provided in this Section is subject to the provisions of Section 8.05. Section 4.05. Written Statement to Trustee. The Company shall deliver to the Trustee on or before May 15 in each year (beginning the May 15 after the first issuance of Notes under this Indenture) a written statement (which need not comply with Section 13.05 hereof), signed by two of its Officers, one of which shall be the principal executive, principal financial or principal accounting officer to the Company, stating that in the course of the performance of their duties as officers of the Company they would normally have knowledge of any default by the Company in 24 the performance or fulfillment of any covenant, agreement or condition contained in this Indenture, without regard to notice requirements or periods of grace, stating whether or not they have knowledge of any such default and, if so, specifying each such default of which the signers have knowledge and the nature thereof. The Company shall deliver to a Responsible Officer of the Trustee, as soon as possible and in any event within 10 Business Days after the Company becomes aware of the occurrence of any Event of Default or an event which, with notice or the lapse of time or both, would constitute an Event of Default, in each case, under clauses (d), (e) or (f) of Section 6.01 hereof, an Officers' Certificate setting forth the details of such Event of Default or default and the action which the Company proposes to take with respect thereto. Section 4.06. Calculation of Original Issue Discount. The Company shall file with the Trustee promptly at the end of each calendar year (a) a written notice specifying the amount of original issue discount (including daily rates and accrual periods) accrued on outstanding Notes as of the end of such year and (b) such other specific information relating to such original issue discount as may then be relevant under the Internal Revenue Code of 1986, as amended from time to time. ARTICLE V. CONSOLIDATION, MERGER, SALE OR CONVEYANCE Section 5.01. Company May Consolidate, Merge, Etc., on Certain Terms. The Company covenants that it will not merge or consolidate into or convey, transfer or lease all or substantially all of its assets to any Person, unless (i) either, in the case of a merger, the Company shall be the surviving corporation, or the Person into which the Company is merged or which acquires all or substantially all the assets of the Company (if other than the Company) shall expressly assume the due and punctual payment of the principal of and interest on all the Notes of each series, according to their tenor, and the due and punctual performance and observance of all of the covenants and conditions of this Indenture to be performed or observed by the Company, by supplemental indenture satisfactory to the Trustee, executed and delivered to the Trustee by such corporation or Person, and (ii) the Company or such surviving corporation or Person, as the case may be, shall not, immediately after such merger or consolidation, or such conveyance, transfer or lease, be in Default in the performance of any such covenant or condition. Section 5.02. Successor Company Substituted. In case of any such consolidation, merger, conveyance, transfer or lease, and following such an assumption by the successor corporation, such successor corporation shall succeed to and be substituted for the Company, with the same effect as if it had been named herein. Such successor corporation may cause to be signed, and may issue either in its own name or in the name of the Company prior to such succession any or all of the Notes issuable hereunder, which theretofore shall not have been signed by the Company and delivered to the Trustee; and, upon the order of such successor corporation instead of the Company and subject to all the terms, conditions and limitations in this Indenture prescribed, the Trustee shall authenticate and shall deliver any Notes, which previously shall have been signed and delivered by the Officers of the Company to the Trustee for authentication, and any Notes, which such successor corporation thereafter shall cause to be 25 signed and delivered to the Trustee for that purpose. All of the Notes so issued shall in all respects have the same legal rank and benefit under this Indenture as the Notes theretofore or thereafter issued in accordance with the terms of this Indenture as though all of such Notes had been issued at the date of the execution hereof. In case of any such consolidation, merger, sale, transfer or lease, such changes in phraseology and form (but not in substance) may be made in the Notes thereafter to be issued as may be appropriate. In the event of any such sale or conveyance (other than a conveyance by way of lease), the Company or any successor corporation which shall theretofore have become such in the manner described in this Article shall be discharged from all obligations and covenants under this Indenture and the Notes and may be liquidated and dissolved. Section 5.03. Opinion of Counsel to Trustee. The Trustee, subject to the provisions of Sections 7.01 and 7.02, shall be provided with an Opinion of Counsel, prepared in accordance with Section 13.05, as conclusive evidence that any such consolidation, merger, conveyance, sale or lease, and any such assumption, and any such liquidation or dissolution, complies with the applicable provisions of this Indenture. ARTICLE VI. DEFAULT AND REMEDIES Section 6.01. Events of Default. An "Event Of Default" occurs with respect to Notes of any particular series, unless it is specifically deleted or modified in the Officers' Certificate, Board Resolutions and/or supplemental indenture (if any) in respect of such series, and in addition to any other events which may be specified as Events of Default in the Officers' Certificate, Board Resolutions and/or supplemental indenture (if any) in respect of such series, if: (a) the Company or any Subsidiary Guarantor defaults in the payment of the principal of or premium, if any, on any Note of such series when the same becomes due and payable at maturity, upon acceleration or redemption, or otherwise (whether or not prohibited by the subordination provisions of the Indenture); (b) the Company or any Subsidiary Guarantor defaults in the payment of interest on any Note of such series when the same becomes due and payable (whether or not prohibited by the subordination provisions of this Indenture), and the default continues for a period of 30 days; (c) the Company defaults in the payment of any sinking fund installment, when and as due by the terms of a Note of that series, and the default continues for a period of 30 days; (d) the Company or any Subsidiary Guarantor defaults in the performance of or breaches any other covenant or agreement of the Company contained in the Notes of such series, in the Guarantees or in this Indenture (other than a default specified in (a) or (b) above) and the default or breach continues for a period of 60 consecutive days after written notice to the Company or such Subsidiary Guarantor by the Trustee or to the 26 Company or such Subsidiary Guarantor and the Trustee by the Holders of 25% or more in principal amount of the Notes of such affected series then outstanding; (e) the acceleration of the maturity, or failure to make any payment when due at the final maturity, of any other Indebtedness of the Company, any Subsidiary Guarantor or any Restricted Subsidiary having an outstanding principal amount of $15 million or more individually or in the aggregate; (f) judgments or orders for the payment of money in an aggregate amount in excess of $15 million (net of applicable insurance coverage which is acknowledged in writing by the insurer) having been rendered against the Company, any Subsidiary Guarantor or any Restricted Subsidiary and such judgments or orders shall continue unsatisfied and unstayed for a period of 60 days; (g) a Guarantee by a Subsidiary Guarantor shall cease to be in full force and effect (other than a release of a Guarantee in accordance with this Indenture or any supplemental indenture) or any Subsidiary Guarantor shall deny or disaffirm its obligations with respect thereto; (h) there has been an entry of a decree or order by a court having jurisdiction in the premises adjudging the Company, any Subsidiary Guarantor or any Restricted Subsidiary as bankrupt or insolvent, or approving as properly filed a petition seeking reorganization, arrangement, adjustments or composition of or in respect of the Company, any Subsidiary Guarantor or any Restricted Subsidiary under the Federal Bankruptcy Code or any other applicable federal or state law, or appointing a receiver, liquidator, assignee, trustee, sequestrator (or other similar official) of the Company, any Subsidiary Guarantor or any Restricted Subsidiary or of any substantial part of its property, or ordering the winding up or liquidation of its affairs, and the continuance of any such decree or order unstayed and in effect for a period of 90 consecutive days; (i) the Company, any Subsidiary Guarantor or any Restricted Subsidiary institute proceedings to be adjudicated as bankrupt or insolvent, or consent to the institution of bankruptcy or insolvency proceedings against it, or file a petition or answer or consent seeking reorganization or relief under the Federal Bankruptcy Code or any other applicable federal or state law, or consent to the filing of any such petition or to the appointment of a receiver, liquidator, assignee, trustee, sequestrator (or other similar official) of the Company, any Subsidiary Guarantor or any Restricted Subsidiary or of any substantial part of its property, or makes an assignment for the benefit of creditors, or admits in writing its inability to pay its debts generally as they become due (an event of default specified in clause (g) or (h) a "Bankruptcy Default"). Section 6.02. Acceleration. (a) If an Event of Default (other than a Bankruptcy Default) with respect to the Notes of any series occurs and is continuing under the Indenture, unless the principal of all the Notes of such series have already become due and payable, the Trustee or the Holders of at least 25% in principal amount of the Notes of such series then outstanding 27 (each such series voting as a separate class), by written notice to the Company (and to the Trustee if the notice is given by the Holders), may, and the Trustee at the request of such Holders shall, declare the principal of, premium, if any, and accrued interest on the Notes to be immediately due and payable (or if the Notes of such series are Original Discount Notes, such portion of the principal amount as may be specified in the terms of such series). Upon a declaration of acceleration, such principal and interest will become immediately due and payable. If a Bankruptcy Default occurs and is continuing with respect to the Company, the principal of, premium, if any, and accrued interest on all Notes of each series then outstanding (or if the Notes of such series are Original Discount Notes, such portion of the principal amount as may be specified in the terms of such series) will, unless the principal of all the Notes of such series shall have already become due and payable, become immediately due and payable without any declaration or other act on the part of the Trustee or any Holder. (b) At any time after such a declaration of acceleration with respect to the Notes of a series has been made and before a judgment or decree for payment of the money due has been obtained by the Trustee as hereinafter provided, the Holders of a majority in principal amount of outstanding Notes of such series, by written notice to the Company and the Trustee, may rescind and annul such declaration and its consequences if: (i) the Company has paid or deposited with the Trustee a sum sufficient to pay: (A) all overdue interest on all the Notes of such series; (B) the principal of, and premium, if any, on any of the Notes of such series which has become due otherwise than by such declaration of acceleration, and interest thereon at the rate or rates prescribed therefor in such Notes; (C) to the extent that payment of such interest is lawful and applicable, interest upon overdue installments of interest at the rate or rates prescribed therefor in such Notes; and (D) all sums paid or advanced by the Trustee under this Indenture and the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel; (ii) such rescission would not conflict with any judgment or decree of a court of competent jurisdiction; and (iii) all Events of Default with respect to the Notes of such series, other than the non-payment of the principal of, and interest on, such Notes which have become due solely by such declaration of acceleration, have been cured or waived or otherwise remedied in accordance with the provisions of this Indenture. 28 Notwithstanding the preceding paragraph, in the event of a declaration of acceleration in respect of the Notes of any series because an Event of Default shall have occurred and be continuing, such declaration of acceleration shall be automatically annulled if the Indebtedness that is the subject of such Event of Default has been discharged or the holders thereof have rescinded their declaration of acceleration in respect of such Indebtedness, and written notice of such discharge or rescission, as the case may be, shall have been given to the Trustee by the Company and countersigned by the Holders of such Notes or a trustee, fiduciary or agent for such Holders within 30 days after such declaration of acceleration in respect of the Notes of any series, and no other Event of Default has occurred during such 30-day period which has not been cured or waived during such period. For all purposes under this Indenture, if a portion of the principal of any Original Issue Discount Notes shall have been accelerated and declared due and payable pursuant to the provisions hereof, then, from and after such declaration, unless such declaration has been rescinded and annulled, the principal amount of such Original Issue Discount Notes shall be deemed, for all purposes hereunder, to be such portion of the principal thereof as shall be due and payable as a result of such acceleration, and payment of such portion of the principal thereof as shall be due and payable as a result of such acceleration together with interest, if any, thereon and all other amounts owing thereunder, shall constitute payment in full of such Original Issue Discount Notes. Section 6.03. Other Remedies. If an Event of Default occurs, has not been waived, and is continuing with respect to the Notes of any series, the Trustee may pursue, in its own name or as trustee of an express trust, any available remedy by proceeding at law or in equity to collect the payment of principal of, premium, if any and interest on the Notes of such series or to enforce the performance of any provision of the Notes of such series or the Indenture. The Trustee may maintain a proceeding even if it does not possess any of the Notes of such series or does not produce any of them in the proceeding. Section 6.04. Waiver of Past Defaults. Except as otherwise provided in Sections 6.02, 6.07 and 9.02, the Holders of a majority in aggregate principal amount of the outstanding Notes may, by notice to the Trustee, waive an existing Default and its consequences. Upon such waiver, the Default will cease to exist, any Event of Default arising therefrom will be deemed to have been cured and each of the Company, the Subsidiary Guarantors, if any, the Trustee and the Holders of the Notes will be restored to their former positions and rights hereunder; provided, however, that no such waiver will extend to any subsequent or other Default or impair any right consequent thereon. Section 6.05. Control by Majority. The Holders of a majority in aggregate principal amount of the outstanding Notes of a particular series (or if more than one series is affected, of all such series voting as a separate class) may direct the time, method and place of conducting any proceeding for any remedy available to the Trustee or exercising any trust or power conferred on the Trustee. The Trustee may, however, refuse to follow any such direction that conflicts with law or this Indenture, that may involve the Trustee in personal liability, or that the Trustee determines in good faith may be unduly prejudicial to the rights of Holders of Notes of such series not joining in the giving of such direction, and may take any other action it deems proper that is not inconsistent with such direction. 29 Section 6.06. Limitation on Suits. A Holder may not pursue any proceeding, judicial or otherwise, or the appointment of a receiver or trustee, or any other remedy under the Indenture or the Notes of the applicable series, unless: (a) the Holder has previously given to the Trustee written notice of a continuing Event of Default; (b) Holders of at least 25% in principal amount of then outstanding Notes of the series in respect of which the Event of Default has occurred have made written request to the Trustee to pursue a remedy in respect of the Event of Default; (c) such Holders have offered and, if requested, provided to the Trustee indemnity and security reasonably satisfactory to the Trustee against any costs, liabilities or expenses to be incurred in compliance with such request; (d) the Trustee for 60 days after its receipt of such notice, request and offer of indemnity has failed to pursue any such remedy; and (e) during such 60-day period, the Holders of a majority in aggregate principal amount of the outstanding Notes of such series have not given the Trustee a direction that is inconsistent with such written request. The foregoing limitations do not apply to the right of any Holder to receive payment of principal of, premium, if any, or interest on any series of Notes or to bring suit for the enforcement of any payment on or after the due date, which right shall not be impaired or affected without the consent of the Holder. No Holder of any series of Notes may use this Indenture to affect, disturb or prejudice the rights of another Holder of Notes of that series or to obtain a preference or priority over another Holder of Notes of that series (it being understood that the Trustee does not have an affirmative duty to ascertain whether or not such actions or forbearances are unduly prejudicial to such Holders). Section 6.07. Rights of Holders to Receive Payment. Notwithstanding anything herein to the contrary, the right of any Holder to receive payment of principal of and premium, if any, and interest on its Note on or after the Stated Maturities thereof, or to bring suit for the enforcement of any such payment on or after such respective dates, may not be impaired or affected without the consent of that Holder. Section 6.08. Collection Suit by Trustee. If an Event of Default in payment of principal or interest specified in clause (a) or (b) of Section 6.01 occurs and is continuing with respect to the Notes of any series, upon the demand of the Trustee, the Company will pay to the Trustee for the benefit of the Holders of any affected series of Notes the premium, if any, and interest remaining unpaid on the Notes of that series then outstanding, together with interest on overdue principal and, to the extent lawful, overdue installments of interest, in each case at the rate specified in the Notes, and such further amount as is sufficient to cover the costs and expenses of collection, including the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel and any other amounts due the Trustee hereunder. If the 30 Company fails to pay such amount upon demand by the Trustee, the Trustee will be empowered to recover judgment in its own name and as trustee of an express trust the sums so due and payable. Section 6.09. Trustee May File Proofs of Claim. The Trustee may file proofs of claim and other papers or documents as may be necessary or advisable in order to have the claims of the Trustee (including any claim for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee hereunder) and the Holders allowed in any judicial proceedings relating to the Company, the Subsidiary Guarantors, if applicable, or their respective creditors or property, and is entitled and empowered to collect, receive and distribute any money, securities or other property payable or deliverable upon any such claims. Any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Holder to make such payments to the Trustee and, if the Trustee consents to the making of such payments directly to the Holders, to pay to the Trustee any amount due to it for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agent and counsel, and any other amounts due the Trustee hereunder. Nothing in the Indenture will be deemed to empower the Trustee to authorize or consent to, or accept or adopt on behalf of any Holder, any plan of reorganization, arrangement, adjustment or composition affecting the Notes or the rights of any Holder thereof, or to authorize the Trustee to vote in respect of the claim of any Holder in any such proceeding. Section 6.10. Priorities. If the Trustee collects any money with respect to Notes of any series pursuant to this Article, it shall pay out the money in the following order: (a) First, to the payment of costs and expenses applicable to such series in respect of which monies have been collected, including reasonable compensation to the Trustee and each predecessor Trustee and their respective agents and attorneys and of all expenses and liabilities incurred, and all advances made, by the Trustee and each predecessor Trustee except as a result of negligence or bad faith, and all other amounts due to the Trustee or any predecessor Trustee pursuant to Section 7.07; (b) Second, in accordance with the subordination provisions, if any, of the Notes of such series; (c) Third, in case the principal of the Notes of such series in respect of which monies have been collected shall not have become and be then due and payable, to the payment of interest on the Notes of such series in default in the order of the maturity of the installments of such interest, with interest (to the extent that such interest has been collected by the Trustee) upon the overdue installments of interest at the same rate as the rate of interest or yield to maturity (in the case of Original Issue Discount Notes) specified in such Notes, such payments to be made ratably to the Persons entitled thereto, without discrimination or preference; (d) Fourth, in case the principal of the Notes of such series in respect of which monies have been collected shall have become and shall be then due and payable, to the payment of the whole amount then owing and unpaid upon all the Notes of such series for 31 principal and interest, with interest upon the overdue principal, and (to the extent such interest has been collected by the Trustee) upon overdue installments of interest at the same rate as the rate of interest or yield to maturity (in the case of Original Issue Discount Notes) specified in the Notes of such series; and in case such monies shall be insufficient to pay in full the whole amount so due and unpaid upon the Notes of such series, then to the payment of such principal and interest, without preference or priority of principal over interest or yield to maturity, or of interest or yield to maturity over principal, or of any installment of interest over any other installment of interest, or of any Notes of such series over any other Notes of such series, ratably to the aggregate of such principal and accrued and unpaid interest or yield to maturity; and (e) Fifth, to the Company or such other Person as a court of competent jurisdiction may direct. The Trustee, upon written notice to the Company, may fix a record date and payment date for any payment to Holders pursuant to this Section. Section 6.11. Restoration of Rights and Remedies. If the Trustee or any Holder has instituted a proceeding to enforce any right or remedy under the Indenture and the proceeding has been discontinued or abandoned for any reason, or has been determined adversely to the Trustee or to the Holder, then, subject to any determination in the proceeding, the Company, the Subsidiary Guarantors, the Trustee and the Holders will be restored severally and respectively to their former positions hereunder and thereafter all rights and remedies of the Company, the Subsidiary Guarantors, the Trustee and the Holders will continue as though no such proceeding had been instituted. Section 6.12. Undertaking for Costs. In any suit for the enforcement of any right or remedy under the Indenture or in any suit against the Trustee for any action taken or omitted to be taken by it as Trustee, all parties to this Indenture agree, and each Holder shall be deemed to have agreed, that a court may require any party litigant in such suit (other than the Trustee) to file an undertaking to pay the costs of the suit, and the court may assess reasonable costs, including reasonable attorneys' fees and expenses, against any party litigant (other than the Trustee) in the suit, having due regard to the merits and good faith of the claims or defenses made by the party litigant. This Section does not apply to a suit by a Holder to enforce payment of principal, premium, if any, and interest on any Note of any series on the respective due dates, or a suit by Holders of more than 10% in principal amount of the outstanding Notes of any series. Section 6.13. Rights and Remedies Cumulative. Except as otherwise provided with respect to the replacement of lost, destroyed or wrongfully taken Notes of any series in Section 2.04, no right or remedy conferred or reserved to the Trustee or to the Holders under this Indenture is intended to be exclusive of any other right or remedy, and all such rights and remedies are, to the extent permitted by law, cumulative and in addition to every other right and remedy hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or exercise of any right or remedy hereunder, or otherwise, will not prevent the concurrent assertion or exercise of any other right or remedy. 32 Section 6.14. Delay or Omission Not Waiver. No delay or omission of the Trustee or of any Holder to exercise any right or remedy accruing upon any Event of Default will impair the exercise of any such right or remedy or constitute a waiver of any such Event of Default or an acquiescence therein. Every right and remedy given by this Article or by law to the Trustee or to the Holders may be exercised from time to time, and as often as may be deemed expedient, by the Trustee or by the Holders, as the case may be. Section 6.15. Waiver of Stay, Extension or Usury Laws. Each of the Company and the Subsidiary Guarantors, if any, covenants, to the extent that it may lawfully do so, that it will not at any time insist upon, or plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay or extension law or any usury law or other law that would prohibit or forgive the Company and the Subsidiary Guarantors from paying all or any portion of the principal of, premium, if any, or interest on the Notes of any series as contemplated herein, wherever enacted, now or at any time hereafter in force, or that may affect the covenants or the performance of the Indenture. The Company hereby expressly waives, to the extent that it may lawfully do so, all benefit or advantage of any such law and covenants that it will not hinder, delay or impede the execution of any power herein granted to the Trustee, but will suffer and permit the execution of every such power as if no such law had been enacted. ARTICLE VII. THE TRUSTEE Section 7.01. General. (a) The duties and responsibilities of the Trustee are as provided by the Trust Indenture Act and as set forth herein. Whether or not expressly so provided, every provision of the Indenture relating to the conduct or affecting the liability of or affording protection to the Trustee is subject to this Article. (b) Except during the continuance of an Event of Default with respect to the Notes of any series, the Trustee need perform only those duties that are specifically set forth in the Indenture and no others, and no implied covenants or obligations will be read into the Indenture that are adverse to the Trustee. In case an Event of Default has occurred and is continuing with respect to the Notes of any series, the Trustee shall exercise those rights and powers vested in it by the Indenture, and use the same degree of care and skill in their exercise, as a prudent person would exercise or use under the circumstances in the conduct of his own affairs. (c) No provision of the Indenture shall be construed to relieve the Trustee from liability for its own negligent action, its own negligent failure to act, or its own willful misconduct. Section 7.02. Certain Rights of Trustee. Subject to Trust Indenture Act Section 315(a) through (d): (a) In the absence of negligence or willful misconduct on its part, the Trustee may conclusively rely, and will be protected in acting or refraining from acting, upon any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, 33 consent, order, bond, debenture, note, other evidence of indebtedness or other paper or document (whether in its original or facsimile form) believed by it to be genuine and to have been signed or presented by the proper Person. The Trustee need not investigate any fact or matter stated in the document, but, in the case of any document which is specifically required to be furnished to the Trustee pursuant to any provision hereof, the Trustee shall examine the document to determine whether it conforms to the requirements of the Indenture (but need not confirm or investigate the accuracy of mathematical calculations or other facts stated therein). The Trustee, in its discretion, may make further inquiry or investigation into such facts or matters as it sees fit. (b) Before the Trustee acts or refrains from acting, it may require an Officers' Certificate or an Opinion of Counsel conforming to Section 13.05, and the Trustee will not be liable for any action it takes or omits to take in good faith in reliance on the certificate or opinion. (c) The Trustee may act through its attorneys and agents and will not be responsible for the misconduct or negligence of any agent appointed with due care. (d) The Trustee will be under no obligation to exercise any of the rights or powers vested in it by the Indenture at the request or direction of any of the Holders of any series of Notes, unless such Holders have offered to the Trustee reasonable security or indemnity satisfactory to it against the costs, expenses and liabilities that might be incurred by it in compliance with such request or direction. (e) The Trustee will not be liable for any action it takes or omits to take in good faith that it believes to be authorized or within its rights or powers or for any action it takes or omits to take in accordance with the direction of the Holders of any series of Notes in accordance with Section 6.05 relating to the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred upon the Trustee, under this Indenture. (f) The Trustee may consult with counsel, and the advice of such counsel or any Opinion of Counsel will be full and complete authorization and protection in respect of any action taken, suffered or omitted by it hereunder in good faith and in reliance thereon. (g) No provision of this Indenture will require the Trustee to expend or risk its own funds or otherwise incur any financial liability in the performance of its duties hereunder, or in the exercise of its rights or powers, unless it receives indemnity satisfactory to it against any loss, liability or expense. (h) The Trustee shall not be deemed to have notice of any default or Event of Default unless a Responsible Officer of the Trustee has actual knowledge thereof or unless written notice of any event which is in fact such a default is received by the Trustee at its Corporate Trust Office and such notice references the Notes and this Indenture. 34 (i) The rights, privileges, protections, immunities and benefits given to the Trustee, including, without limitation, its rights to be indemnified, are extended to, and shall be enforceable by, the Trustee in each of its capacities hereunder, and each agent, custodian and other Person employed to act hereunder. (j) In no event shall the Trustee be responsible or liable for special, indirect or consequential loss or damage of any kind whatsoever (including, but not limited to, loss of profit) irrespective of whether the Trustee has been advised of the likelihood of such loss or damage and regardless of the form of action. (k) The Trustee may request that the Company deliver an Officers' Certificate setting forth the names of individuals and/or titles of officers authorized at such time to take specified actions pursuant to this Indenture, which Officers' Certificate may be signed by any person authorized to sign an Officers' Certificate, including any person specified as so authorized in any such certificate previously delivered and not superseded. Section 7.03. Individual Rights of Trustee. The Trustee, in its individual or any other capacity, may become the owner or pledgee of Notes and may otherwise deal with the Company or its Affiliates with the same rights it would have if it were not the Trustee. Any Agent may do the same with like rights. The Trustee is, however, subject to Trust Indenture Act Section 311. For purposes of Trust Indenture Act Sections 311(b)(4) and (6): (a) "Cash Transaction" means any transaction in which full payment for goods or securities sold is made within seven days after delivery of the goods or securities in currency or in checks or other orders drawn upon banks or bankers and payable upon demand; and (b) "Self-Liquidating Paper" means any draft, bill of exchange, acceptance or obligation which is made, drawn, negotiated or incurred by the Company for the purpose of financing the purchase, processing, manufacturing, shipment, storage or sale of goods, wares or merchandise and which is secured by documents evidencing title to, possession of, or a lien upon, the goods, wares or merchandise or the receivables or proceeds arising from the sale of the goods, wares or merchandise previously constituting the security, provided the security is received by the Trustee simultaneously with the creation of the creditor relationship arising from the making, drawing, negotiating or incurring of the draft, bill of exchange, acceptance or obligation. Section 7.04. Trustee's Disclaimer. The Trustee (i) makes no representation as to the validity or adequacy of the Indenture or the Notes of any series, (ii) is not accountable for the Company's use or application of the proceeds from the Notes of any series, and (iii) is not responsible for any statement in the Notes of any series other than its certificate of authentication. Section 7.05. Notice of Default. If any Default or Event of Default occurs and is continuing with respect to the Notes of any series, and if it is known to the Trustee, the Trustee will send notice of the uncured Default to each Holder of the Notes of such series within five days after it occurs, unless the Default has been cured; provided that, except in the case of a 35 default in the payment of the principal of, premium, if any, or interest on any such Note, the Trustee may withhold the notice if and so long as the board of directors, the executive committee or a trust committee of directors of the Trustee in good faith determines that withholding the notice is in the interest of the Holders. Notice to Holders under this Section will be given in the manner and to the extent provided in Trust Indenture Act Section 313(c); and provided further that in the case of any Default of the character specified in Section 6.01(4) no such notice to Holders shall be given until at least 30 days after the occurrence thereof. Except in the case of an Event of Default resulting from nonpayment on any Note, the Trustee shall not be deemed to have notice of any Default or Event of Default unless a Responsible Officer of the Trustee has actual knowledge thereof or unless written notice of any event which is in fact such a Default is received by the Trustee at the Corporate Trust Office of the Trustee, and such notice references the Notes and this Indenture. Section 7.06. Reports by Trustee to Holders. The Trustee shall transmit to each Holder such reports concerning, among other things, the Trustee and its action under this Indenture as may be required pursuant to the Trust Indenture Act at the time and in compliance with Section 313(a) of the Trust Indenture Act. The Trustee also shall comply with Sections 313(b)(2) and 313(c) of the Trust Indenture Act. A copy of each such report at the time of its mailing to Noteholders shall be filed with the Commission and each stock exchange, if any, on which the Notes of any series are listed. The Company shall notify the Trustee in writing if the Notes of any series become listed on any stock exchange or any delisting thereof. Section 7.07. Compensation and Indemnity. (a) The Company and the Subsidiary Guarantors, if applicable, jointly and severally, will pay the Trustee from time to time such compensation as shall be agreed upon in writing for its services. The compensation of the Trustee is not limited by any law on compensation of a Trustee of an express trust. The Company and the Subsidiary Guarantors, if applicable, will reimburse the Trustee upon request for all reasonable out-of-pocket expenses, disbursements and advances incurred or made by the Trustee while acting as Trustee under this Indenture, including the reasonable compensation, disbursements and expenses of the Trustee's attorneys, accountants, experts and other such professionals as the Trustee deems necessary, advisable or appropriate, except any such expense as shall be determined to have been caused by its own negligence or willful misconduct. (b) The Company and the Subsidiary Guarantors, if applicable, will jointly and severally indemnify the Trustee and any predecessor Trustee (which for purposes of this Section 7.07 shall include its officers, directors, employees, agents and shareholders) for, and hold it harmless against, any and all loss, damage, claim or liability or expense (including the reasonable fees and expenses of counsel and taxes other than those based upon the income of the Trustee) incurred by it without negligence or willful misconduct on its part arising out of or in connection with the acceptance or administration of the Indenture and its duties under the Indenture and the Notes of each series, including the costs and expenses of defending itself against any claim (whether asserted by the Company, any Holder or any Person) or liability and of complying with any process served upon it or any of its officers in connection with the exercise or performance of any 36 of its powers or duties under the Indenture and any such Notes. When the Trustee incurs expenses or renders services after an Event of Default specified in Section 6.01(7) and (8) occurs, the expenses and the compensation for the services are intended to constitute expenses of administration under any bankruptcy law. (c) The obligations of the Company and the Subsidiary Guarantors, if applicable, under this Section shall not be subordinated to the payment of Senior Indebtedness pursuant to Article XI hereof and shall constitute additional indebtedness hereunder and shall survive the satisfaction and discharge of this Indenture. To secure the Company's and the Subsidiary Guarantors', if applicable, payment obligations in this Section, the Trustee will have a lien prior to the Notes of each series on all money or property held or collected by the Trustee, in its capacity as Trustee, except money or property held in trust to pay principal of, premium, if any, and interest on particular Notes of any series. Section 7.08. Replacement of Trustee. (a) (i) The Trustee may resign at any time by written notice to the Company. (i) The Holders of a majority in aggregate principal amount of the outstanding Notes of all series for which any one Trustee is acting as Trustee (voting as a single class) may remove such Trustee by written notice to the Company and the Trustee. (ii) If the Trustee is no longer eligible under Section 7.10 or in the circumstances described in Trust Indenture Act Section 310(b), any Holder that satisfies the requirements of Trust Indenture Act Section 310(b) may petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee. (iii) The Company may remove the Trustee if: (i) the Trustee is no longer eligible under Section 7.10; (ii) the Trustee is adjudged a bankrupt or an insolvent; (iii) a receiver or other public officer takes charge of the Trustee or its property; or (iv) the Trustee becomes incapable of acting. A resignation or removal of the Trustee and appointment of a successor Trustee will become effective only upon the successor Trustee's acceptance of appointment as provided in this Section. (b) If the Trustee has been removed by the Holders, Holders of a majority in principal amount of the outstanding Notes of all series for which the Trustee was acting as Trustee (voting as a single class) may appoint a successor Trustee for all such series with the consent of the Company. Otherwise, if the Trustee resigns or is removed, or if a vacancy exists in the office of Trustee for any reason, the Company will promptly appoint a successor Trustee. If the successor Trustee does not deliver its written acceptance within 30 days after the retiring Trustee resigns or is removed, the retiring Trustee, the Company or the Holders of a majority in aggregate principal amount of the 37 outstanding Notes of all series for which such Trustee was acting as Trustee (voting as a single class) may petition at the expense of the Company any court of competent jurisdiction for the appointment of a successor Trustee. (c) Upon delivery by the successor Trustee of a written acceptance of its appointment to the retiring Trustee and to the Company, (i) the retiring Trustee will upon payment of charges hereunder transfer all property held by it as Trustee to the successor Trustee, subject to the lien provided for in Section 7.07(c), (ii) the resignation or removal of the retiring Trustee will become effective, and (iii) the successor Trustee will have all the rights, powers and duties of the Trustee under the Indenture. Upon request of any successor Trustee, the Company will execute any and all instruments for fully vesting in and confirming to the successor Trustee all such rights, powers and trusts. The successor Trustee will mail notice of any resignation and any removal of the Trustee and its appointment to all Holders, and include in the notice its name and the address of its Corporate Trust Office. (d) Notwithstanding replacement of the Trustee pursuant to this Section, the Company's obligations under Section 7.07 will continue for the benefit of the retiring Trustee. (e) The Trustee agrees to give the notices provided for in, and otherwise comply with, Trust Indenture Act Section 310(b). Section 7.09. Successor Trustee by Merger. If the Trustee consolidates with, merges or converts into, or transfers all or substantially all of its corporate trust business to, another corporation or national banking association, the resulting, surviving or transferee corporation or national banking association without any further act will, if such resulting, surviving or transferee corporation or national banking association is otherwise eligible under the Indenture, be the successor Trustee with the same effect as if the successor Trustee had been named as the Trustee in the Indenture. Section 7.10. Eligibility. The Indenture must always have a Trustee that satisfies the requirements of Trust Indenture Act Section 310(a) and (b) and has a combined capital and surplus of at least $50,000,000 as set forth in its most recent published annual report of condition. Section 7.11. Money Held in Trust. The Trustee will not be liable for interest on any money received by it except as it may agree with the Company. Money held in trust by the Trustee need not be segregated from other funds except to the extent required by law and except for money held in trust under Article XI. ARTICLE VIII. DEFEASANCE AND DISCHARGE Section 8.01. Discharge of Company's Obligations. (a) Subject to paragraph (b) of this Section 8.01, the Company's obligations under any series of Notes and this Indenture will terminate if: 38 (i) all Notes of such series previously authenticated and delivered (other than (A) destroyed, lost or stolen Notes of such series that have been replaced or (B) Notes of such series that are paid pursuant to Section 4.01 or (C) Notes of such series for whose payment money or U.S. Government Obligations have been held in trust and then repaid to the Company pursuant to Section 8.05) have been delivered to the Trustee for cancellation and the Company has paid all sums payable by it hereunder, or the Notes of such series not theretofore delivered to the Trustee have become due and payable, or mature within one year, or all of them are to be called for redemption within one year under arrangements satisfactory to the Trustee for giving the notice of redemption; and (ii) the Company irrevocably deposits in trust with the Trustee, as trust funds solely for the benefit of the Holders of such Notes, money or U.S. Government Obligations or a combination thereof sufficient, in the opinion of a nationally recognized firm of independent public accountants expressed in a written certificate delivered to the Trustee, without consideration of any reinvestment, to pay principal of, premium, if any, and each installment of interest on such Notes to maturity or redemption, as the case may be, and to pay all other sums payable by it hereunder; and (iii) the Company has paid or caused to be paid all other sums payable hereunder by the Company; and (iv) the Company delivers to the Trustee an Officers' Certificate and an Opinion of Counsel, in each case stating that all conditions precedent provided for herein relating to the satisfaction and discharge of the Indenture have occurred. (b) After satisfying the conditions in clause (i), only the Company's obligations under Section 7.07 will survive. After satisfying the conditions in clause (ii), only the Company's obligations in Article II, Sections 4.01, 4.02, 7.07, 7.08 and this Article VIII, and the rights, powers, trusts, duties and immunities of the Trustee hereunder will survive such satisfaction and discharge. In either case, upon request, the Trustee will acknowledge in writing the discharge of the Company's obligations under the Notes of such series and the Indenture other than the surviving obligations. Section 8.02. Legal Defeasance. Unless this Section 8.02 is otherwise specified to be inapplicable to Notes of any series pursuant to Section 2.01(1), after the 91st day following the deposit referred to in clause (a) of this Section 8.02, the Company will be deemed to have paid and will be discharged from its obligations in respect of the Notes of such series and the Indenture (as it relates to the Notes of such series), other than its obligations in Article II, Sections 4.01, 4.02, 7.07, 7.08, and this Article VIII and the rights, powers, trusts, duties and immunities of the Trustee hereunder, provided the following conditions have been satisfied: (a) The Company has irrevocably deposited in trust with the Trustee, as trust funds solely for the benefit of the Holders of Notes of such series, money or U.S. Government Obligations or a combination thereof sufficient, in the opinion of a nationally recognized firm of independent public accountants expressed in a written 39 certificate thereof delivered to the Trustee, without consideration of any reinvestment, to pay principal of, premium, if any, and each installment of interest on the Notes of such series to maturity or redemption, as the case may be, provided that any redemption before maturity has been irrevocably provided for under arrangements satisfactory to the Trustee. (b) No Default or event that with the passing of time or the giving of notice, or both, would constitute an Event of Default, has occurred and is continuing on the date of the deposit. (c) The deposit will not result in a breach or violation of, or constitute a default under, the Indenture or any other agreement or instrument to which the Company is a party or by which it is bound. (d) The Company has delivered to the Trustee an Officers' Certificate and an Opinion of Counsel, in each case stating that all conditions precedent provided for herein relating to the defeasance have occurred. (e) The Company has delivered to a Responsible Officer of the Trustee: (i) an Opinion of Counsel stating either that (A) the Company has received from or there has been published by the Internal Revenue Service a ruling or (B) there has been a change in law after the date of this Indenture to the effect that the Holders of the Notes of such series will not recognize gain or loss for federal income tax purposes as a result of the deposit, defeasance and discharge and will be subject to federal income tax on the same amount and in the same manner and at the same times as would otherwise have been the case, and (ii) an Opinion of Counsel to the effect that after the passage of 91 days following the deposit, the trust funds will not be subject to the effect of Section 547 of the United States Bankruptcy Code or Section 15 of the New York Debtor and Creditor Law. (f) Such defeasance shall not cause the Trustee to have a conflicting interest, as determined by the Trustee, with respect to any securities of the Company. Prior to the end of the 91-day period, none of the Company's obligations under the Indenture will be discharged. Thereafter, upon request, the Trustee will acknowledge in writing the discharge of the Company's obligations under the Notes of such series and the Indenture (as it relates to the Notes of such series) except for the surviving obligations set forth in this Section 8.02. Section 8.03. Covenant Defeasance. Unless this Section 8.03 is otherwise specified to be inapplicable to the Notes of any series pursuant to Section 2.01(1), after the 91st day following the deposit referred to in clause (a) of Section 8.02, the Company's obligations set forth in Article V will terminate, and clauses (c), (d), (e), (f), (g) and (h) of Section 6.01 will no longer constitute Events of Default, provided the Company has complied with Section 8.02. Notwithstanding the foregoing, for purposes of this Section 8.03, the Opinion of Counsel 40 required pursuant to Section 8.02(e)(i) does not need to be based upon either an Internal Revenue Service ruling or a change in law after the date of this Indenture. Except as specifically stated in this Section 8.03, none of the Company's obligations under the Indenture will be discharged as a result of covenant defeasance pursuant to this Section 8.03. Section 8.04. Application of Trust Money. Subject to Section 8.05, the Trustee will hold in trust the money or U.S. Government Obligations deposited with it pursuant to Section 8.01, 8.02 or 8.03, and apply the deposited money and the proceeds from deposited U.S. Government Obligations to the payment of principal of, premium, if any, and interest on the series of Notes for which such deposit was made in accordance with the Notes of such series and the Indenture. Such money and U.S. Government Obligations need not be segregated from other funds except to the extent required by law. Section 8.05. Repayment to Company. Subject to Sections 7.07, 8.01, 8.02 or 8.03, the Trustee will promptly pay to the Company upon request any excess money or U.S. Government Obligations held by the Trustee at any time and thereupon be relieved from all liability with respect to such money. The Trustee will pay to the Company upon request any money or U.S. Government Obligations held for payment with respect to the Notes of any series that remains unclaimed for two years; provided that before making such payment the Trustee may at the expense of the Company publish once in a newspaper of general circulation in New York City, or send to each Holder entitled to such money, notice that the money remains unclaimed and that after a date specified in the notice (at least 30 days after the date of the publication or notice) any remaining unclaimed balance of money will be repaid to the Company. After payment to the Company, Holders entitled to such money must look solely to the Company for payment, unless applicable law designates another Person, and all liability of the Trustee with respect to such money will cease. Section 8.06. Reinstatement. If and for so long as the Trustee is unable to apply any money or U.S. Government Obligations held in trust pursuant to Section 8.01, 8.02 or 8.03 by reason of any legal proceeding or by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, the Company's obligations under the Indenture (with respect to the applicable series of Notes) and the Notes of the applicable series will be reinstated as if no such deposit in trust had been made. If the Company makes any payment of principal of, premium, if any, or interest on any Notes because of the reinstatement of its obligations, it will be subrogated to the rights of the Holders of such Notes to receive such payment from the money or U.S. Government obligations held in trust. ARTICLE IX. SUPPLEMENTAL INDENTURES Section 9.01. Supplemental Indentures Without Consent of Holders. Without the consent of any Holders, the Company, when authorized by a Board Resolution, the Subsidiary Guarantors, if any, and when authorized by a Board Resolution, and the Trustee, at any time and 41 from time to time, may enter into one or more indentures supplemental hereto, in form satisfactory to the Trustee, for any of the following purposes: (a) to evidence the succession of another corporation to the Company or any Subsidiary Guarantor and the assumption by such successor of the covenants of the Company herein and in the Notes; (b) to add to the covenants of the Company or any Subsidiary Guarantor for the benefit of the Holders of all or any series of Notes (and, if such covenants are to be for the benefit of less than all series of Notes, stating that such covenants are expressly being included solely for the benefit of such series), or to surrender any right or power herein conferred upon the Company or any Subsidiary Guarantor; (c) to add any additional Events of Default (and, if such Events of Default are to be applicable to less than all series of Notes, stating that such Events of Default are expressly being included solely to be applicable to such series); provided, however, that in respect of any such additional Events of Default such supplemental indenture may provide for a particular grace period after default (which period may be shorter or longer than that allowed in the case of other defaults) or may provide for an immediate enforcement upon such default or may limit the remedies available to the Trustee upon such default or may limit the right of the Holders of a majority in aggregate principal amount of the series of Notes to which such additional Events of Default apply to waive such default; (d) to change or eliminate any restrictions on the payment of principal (or premium, if any) of Notes, provided that any such action shall not adversely affect the interests of the Holders of Notes of any series in any material respect; (e) to change or eliminate any of the provisions of this Indenture; provided that any such change or elimination shall become effective only when there is no outstanding Note of any series created prior to the execution of such supplemental indenture that is entitled to the benefit of such provision; (f) to establish the form or terms of Notes of any series as permitted by Section 2.01; (g) to evidence and provide for the acceptance of appointment hereunder by a successor Trustee with respect to the Notes of one or more series and to add to or change any of the provisions of this Indenture as shall be necessary to provide for or facilitate the administration of the trusts hereunder by more than one Trustee; (h) to add to the provisions of this Indenture relating to the Guarantees, including additional subordination provisions; (i) to reflect the addition or release of any Subsidiary Guarantor, as provided for by this Indenture; 42 (j) to provide for uncertificated outstanding Notes in addition to or in the place of outstanding Notes; (k) to supplement any of the provisions of the Indenture to such extent as shall be necessary to permit or facilitate the defeasance and discharge of any series of Notes pursuant to Sections 8.01, 8.02 or 8.03; provided that any such action shall not adversely affect the interests of the Holders of Notes of such series or any other series of Notes in any material respect; (l) to cure any ambiguity or omission, to correct or supplement any provision herein that may be defective or inconsistent with any other provision herein, or to make any other provisions with respect to matters or questions arising under this Indenture that shall not be inconsistent with any provisions of this Indenture; provided such other provisions shall not adversely affect the interests of the Holders of Notes of any series in any material respect; (m) to secure the Notes; (n) to make any changes that would provide any additional rights or benefits to Holders of Notes or that do not adversely affect the rights of any such Holder in any material respect; (o) to comply with the requirements of the Commission in order to effect or maintain the qualification of the Indenture under the Trust Indenture Act; (p) to provide for the conversion rights of Holders of Notes in certain events such as an amalgamation, consolidation, merger or sale of all or substantially all of the assets of the Company; or (q) to reduce the conversion price, if applicable, of any series of Notes. Section 9.02. Supplemental Indentures with Consent of Holders. (a) Except as provided in Section 9.01, with the consent of the Holders of not less than a majority in principal amount of the outstanding Notes affected by such supplemental indenture, by act of such Holders delivered to the Company and the Trustee, the Company when authorized by a Board Resolution, the Subsidiary Guarantors, if any and when authorized by a Board Resolution, and the Trustee may enter into an indenture or indentures supplemental hereto for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of this Indenture or of modifying in any manner the rights of the Holders under this Indenture of such Notes; provided, however, that no such supplemental indenture shall, without the consent of the Holder of each outstanding Note affected thereby: (i) reduce the percentage of principal amount of outstanding Notes whose Holders may consent to an amendment, supplement or waiver; 43 (ii) reduce the rate or change the time or times for payment of interest, including default interest, on any outstanding Note; (iii) reduce the principal amount of any Note or change the Maturity Date of the Notes; (iv) reduce the redemption price, including premium, if any, payable upon redemption of any Note or change the time or times at which any Note may or shall be redeemed; (v) reduce the repurchase price, including premium, if any, payable upon the repurchase of any Note; (vi) make any Note payable in money other than that stated in the Note; (vii) impair the right to institute suit for the enforcement of principal of, premium, if any, or interest on any Note; or (viii) make any change in the percentage of principal amount of Notes necessary to amend or waive compliance in Section 6.04 or Section 6.07 or in this sentence of this Section 9.02. (b) In addition, any amendment to, or waiver of, the provisions of this Indenture relating to subordination of any Notes that adversely affects the rights of the Holders of the outstanding Notes of such series will require the consent of the Holders of at least 75% in aggregate principal amount of outstanding Notes of such series then outstanding. (c) It shall not be necessary for any Act of Holders under this Section to approve the particular form of any proposed supplemental indenture, but it shall be sufficient if such Act shall approve the substance thereof. (d) A supplemental indenture that changes or eliminates any covenant or other provisions of this Indenture that has expressly been included solely for the benefit of one or more particular series of Notes, or that modifies the rights of the Holders of Notes of such series with respect to such covenant or other provision, shall be deemed not to affect the rights under this Indenture of the Holders of Notes of any other series. (e) After an amendment, modification or waiver under this Section becomes effective, the Company will send to the Holders affected thereby a notice briefly describing the amendments, modification or waiver. The Company will send supplemental indentures to Holders upon request. Any failure of the Company to send such notice, or any defect therein, will not, however, in any way impair or affect the validity of any such amendment, modification, supplemental indenture or waiver. Section 9.03. Execution of Supplemental Indentures. In executing, or accepting the additional trusts created by, any supplemental indenture permitted by this Article (other than Section 9.01(f)) or the modifications thereby of the trusts created by this Indenture, the Trustee 44 shall be provided with and, subject to Section 7.02, shall be fully protected in relying upon, an Opinion of Counsel stating that the execution of such supplemental indenture is authorized or permitted by this Indenture, is not inconsistent herewith, is a valid, legal and binding obligation of the Company and any Subsidiary Guarantor enforceable in accordance with its terms, subject to enforceability being limited by bankruptcy, insolvency or other laws or foreign governmental actions affecting the enforcement of creditors' rights generally and equitable remedies including the remedies of specific performance and injunction being granted only in the discretion of a court of competent jurisdiction and, in connection with a supplemental indenture executed pursuant to Section 9.01, that the Trustee is authorized to execute and deliver such supplemental indenture without the consent of the Holders and, in connection with a supplemental indenture executed pursuant to Section 9.02, that the requisite consents of the Holders have been validly obtained in accordance with Section 9.02 hereof. The Trustee may, but shall not be obligated to, enter into any such supplemental indenture that affects the Trustee's own rights, duties or immunities under this Indenture or otherwise. Section 9.04. Effect of Supplemental Indentures. Upon the execution of any supplemental indenture under this Article, this Indenture shall be modified in accordance therewith, and such supplemental indenture shall form a part of this Indenture for all purposes; and every Holder of a series of Notes affected by the supplemental indenture theretofore or thereafter authenticated and delivered under this Indenture shall be bound by the supplemental indenture. Section 9.05. Conformity with Trust Indenture Act. Every supplemental indenture executed pursuant to this Article shall conform to the requirements of the Trust Indenture Act as then in effect. Section 9.06. Reference in Notes to Supplemental Indentures. Notes of any series authenticated and delivered after the execution of any supplemental indenture pursuant to this Article may, and shall if required by the Trustee, bear a notation in form approved by the Trustee as to any matter provided for in such supplemental indenture. If the Company shall so determine, new Notes of any series so modified as to conform to any such supplemental indenture may be prepared and executed by the Company and authenticated and delivered by the Trustee in exchange for outstanding Notes of such series. ARTICLE X. SINKING FUNDS Section 10.01. Applicability of Article. The provisions of this Article shall be applicable to any sinking fund for the retirement of Notes of a series except as otherwise specified pursuant to Section 2.01 for Notes of such series. The minimum amount of any sinking fund payment provided for by the terms of Notes of any series is herein referred to as "mandatory sinking fund payment", and any payment in excess of such minimum amount provided for by the terms of Notes of any series is herein referred to as an "optional sinking fund payment". If provided for by the terms of Notes of any series, the amount of any sinking fund payment may be subject to reduction as provided in Section 10.02. Each sinking fund payment shall be applied to the redemption of Notes of any series as provided for by the terms of such Notes. 45 Section 10.02. Satisfaction of Sinking Fund Payments with Notes. In lieu of making all or part or any mandatory sinking fund payment in cash, the Company may deliver outstanding Notes of a series (other than any previously called for redemption) and may apply as a credit Notes of a series that have been redeemed either at the election of the Company pursuant to the terms of such Notes or through the application of permitted optional sinking fund payments pursuant to the terms of such Notes, in each case, in satisfaction of all or any part of any sinking fund payment with respect to such Notes of such series required to be made pursuant to, and as provided for by, their terms; provided that such Notes have not been previously so credited. Such Notes shall be received and credited for such purpose by the Trustee at the redemption price specified in such Notes for redemption through operation of the sinking fund and the amount of such sinking fund payment shall be reduced accordingly. Section 10.03. Redemption of Notes for Sinking Fund. Not less than 60 days prior to each sinking fund payment date for any series of Notes (unless a shorter period shall be satisfactory to the Trustee), the Company will deliver to the Trustee an Officers' Certificate of such entity specifying the amount of the next sinking fund payment for that series pursuant to the terms of that series, the portion thereof, if any, that is to be satisfied by delivering and crediting Notes of that series pursuant to Section 10.02 and the basis for any such credit and, prior to or concurrently with the delivery of such Officers' Certificate, also will deliver to the Trustee any Notes to be credited and not theretofore delivered to the Trustee. Not less than 45 days (unless a shorter period shall be satisfactory to the Trustee) before each sinking fund payment date the Trustee shall select the Notes to be redeemed upon such sinking fund payment date in the manner specified in Section 3.01 and cause notice of the redemption thereof to be given in the name of and at the expense of the Company in the manner provided in Section 3.01. Such notice having been duly given, the redemption of such Notes shall be made upon the terms and in the manner stated in Sections 3.01 and 3.02. ARTICLE XI. SUBORDINATION OF NOTES Section 11.01. Applicability of Article; Agreement to Subordinate Notes to Senior Indebtedness. In the event a series of Notes is designated as subordinated pursuant to Section 2.01 ("Subordinated Notes") and except as otherwise provided in a supplemental indenture or pursuant to Section 2.01, the Company, for itself, its successors and assigns, covenants and agrees, and each Holder of Subordinated Notes by his acceptance thereof, likewise covenants and agrees, that the payment of the principal of, premium, if any, and interest on each and all of the Subordinated Notes is hereby expressly subordinated, to the extent and in the manner set forth in this Article, in right of payment to the prior payment in full of all Senior Indebtedness. This Article XI shall constitute a continuing offer to all Persons who become holders of, or continue to hold, Senior Indebtedness, and such provisions are made for the benefit of the holders of Senior Indebtedness, and such holders are made obligees hereunder and any one or more of them may enforce such provisions. Section 11.02. No Payment on Subordinated Notes in Certain Circumstances. 46 Upon the maturity of any Senior Indebtedness by lapse of time, acceleration or otherwise, unless and until all principal thereof, premium, if any, interest thereon and other amounts due thereon shall first be paid in full, no payment shall be made by or on behalf of the Company with respect to the principal of, premium, if any, interest on or other amounts owing on the Subordinated Notes (except that, subject to applicable law, Holders may receive Subordinated Securities of the Company). Upon the happening of any default in the payment of any principal of or interest on or other amounts due on any Senior Indebtedness (a "Payment Default"), then, unless and until such default shall have been cured or waived or shall have ceased to exist, no payment shall be made by or on behalf of the Company with respect to the principal of, premium, if any, interest on or other amounts owing on the Subordinated Notes. Upon the happening of any default or event of default (other than a Payment Default) (including any event which with the giving of notice or the lapse of time or both would become an event of default and including any default or event of default which would result upon any payment with respect to the Subordinated Notes) with respect to any Designated Senior Indebtedness, as such default or event of default is defined therein or in the instrument or agreement or other document under which it is outstanding, then upon written notice thereof given to the Company and the Trustee by a holder or holders of any such Designated Senior Indebtedness or their representative ("Payment Notice"), no payment shall be made by or on behalf of the Company with respect to the principal of, premium, if any, interest on or other amounts owing on the Subordinated Notes during the period (the "Payment Blockage Period") commencing on the date of such receipt of such Payment Notice and ending on the earlier of (i) the date, if any, on which such default is cured or waived or ceases to exist or (ii) the date, if any, on which the Designated Senior Indebtedness to which such default relates is discharged, provided, however, that no default or event of default (other than a Payment Default) shall prevent the making of any payment for more than 179 days after the Payment Notice shall have been given. Notwithstanding the foregoing, (i) not more than one Payment Notice shall be given within a period of 360 consecutive days, (ii) no event of default which existed or was continuing on the date of any Payment Notice shall be made the basis for the giving of a subsequent Payment Notice unless all such events of default shall have been cured or waived for a period of at least 180 consecutive days after such date, and (iii) if the Company or the Trustee receives any Payment Notice, a similar notice relating to or arising out of the same default or facts giving rise to such default (whether or not such default is on the same issue of Designated Senior Indebtedness) shall not be effective for purposes of this paragraph. The Company shall resume payments of principal of, premium, if any, and interest on the Subordinated Notes (i) in the case of a Payment Default, upon the date such Payment Default is cured or waived by the holders of Senior Indebtedness to which such Payment Default relates and (ii) in the case of a default or event of default (other than a Payment Default) with respect to Designated Senior Indebtedness, on the earlier of (A) the date such default or event of default is cured or (B) the expiration of the Payment Blockage Period with respect thereto if, in the case of this clause (B), this Article XI otherwise does not prohibit such payment. 47 In furtherance of the provisions of Section 11.01, in the event that, notwithstanding the foregoing provisions of this Section 11.02, any payment (other than a payment in the form of Subordinated Securities) with respect to the principal of, premium, if any, or interest on the Notes shall be made by or on behalf of the Company, and received by the Trustee, by any Holder or by any such Paying Agent (or, if the Company is acting as its own Paying Agent, money for any such payment shall be segregated and held in trust), at a time when such payment was prohibited by the provisions of this Section 11.02, then, unless and until such payment is no longer prohibited by this Section 11.02, such payment (subject to the provisions of Sections 11.06 and 11.07) shall be received and held in trust by the Trustee or such Holder or Paying Agent for the benefit of and shall be immediately paid over to the holders of Senior Indebtedness or their representative, ratably according to the aggregate amounts remaining unpaid on account of the principal of, premium, if any, and interest on the Senior Indebtedness held or represented by each, for application to the payment of all Senior Indebtedness in accordance with its terms, after giving effect to any concurrent payment or distribution to or for the benefit of the holders of Senior Indebtedness. The provisions of this Section 11.02 shall not modify or limit in any way the application of Section 11.03. The Company shall give prompt written notice to the Trustee of any default in the payment of any Senior Indebtedness or any acceleration under any Senior Indebtedness or under any agreement pursuant to which Senior Indebtedness may have been issued. Failure to give such notice shall not affect the subordination of the Subordinated Notes to the Senior Indebtedness or the application of the other provisions provided in this Article XI. Section 11.03. Subordinated Notes Subordinated to Prior Payment of All Senior Indebtedness on Dissolution, Liquidation or Reorganization of the Company. In the event of any Insolvency or Liquidation Proceeding with respect to the Company, all amounts payable in respect of any Senior Indebtedness shall first be paid in full before the Holders of Subordinated Notes are entitled to receive any direct or indirect payment or distribution of any cash, property or securities (other than Subordinated Securities of the Company) on account of principal of or interest on the Subordinated Notes or any other payment with respect to the Notes. The holders of Senior Indebtedness shall be entitled to receive directly, for application to the payment of Senior Indebtedness (to the extent necessary to pay in full all Senior Indebtedness, whether or not due, including specifically, without limitation, all Post-Commencement Interest, whether or not allowed as a claim in such Insolvency or Liquidation Proceedings, after giving effect to any substantially concurrent payment or distribution to the holders of Senior Indebtedness on account of Senior Indebtedness), any payment or distribution of any kind or character, whether in cash, property or securities (other than Subordinated Securities of the Company), including any payment or distribution which may be payable or deliverable by reason of the payment of any other Indebtedness of the Company being subordinated to the payment of the Subordinated Notes which may be payable or deliverable in respect of the Subordinated Notes in any such Insolvency or Liquidation Proceeding. 48 In the event that, notwithstanding the foregoing provisions of this Section 11.03, the Trustee or any Paying Agent or the Holder of any Subordinated Note shall have received any payment from or distribution of assets of the Company or the estate created by the commencement of any such Insolvency or Liquidation Proceeding, of any kind or character in respect of the Subordinated Notes, whether in cash, property or securities (other than Subordinated Securities of the Company), including any payment or distribution which may be payable or deliverable by reason of the payment of any other Indebtedness of the Company being subordinated to the payment of the Subordinated Notes, before all Senior Indebtedness (whether or not due including specifically, without limitation, all Post-Commencement Interest, whether or not allowed as a claim in such Insolvency or Liquidation Proceeding) is paid in full, then and in such event such payment or distribution shall be received and held in trust by the Trustee, any such Paying Agent or Holder for and shall be paid over to the holders of Senior Indebtedness (to the extent necessary to pay in full all such Senior Indebtedness, whether or not due, including specifically, without limitation, all Post-Commencement Interest thereon, whether or not allowed as a claim in such Insolvency or Liquidation Proceeding), after giving effect to any substantially concurrent payment or distribution to the holders of Senior Indebtedness on account of Senior Indebtedness, for application to the payment in full of such Senior Indebtedness. The Company shall give prompt written notice to the Trustee of any Insolvency or Liquidation Proceeding with respect to it. Section 11.04. Holders of Subordinated Notes to be Subrogated to Rights of Holders of Senior Indebtedness. After all amounts payable under or in respect of Senior Indebtedness (whether or not due) are paid in full, the Holders of Subordinated Notes shall be subrogated (without any duty on the part of the holders of Senior Indebtedness to warrant, create, effectuate, preserve or protect such subrogation), to the extent of the payments or distributions made to the holders of Senior Indebtedness pursuant to the provisions of this Article XI (equally and ratably with the holders of all other indebtedness of the Company which by its express terms is subordinate and subject in right of payment to Senior Indebtedness to substantially the same extent as the Subordinated Notes are so subordinate and subject in right of payment and which is entitled to like rights of subrogation), to the rights of the holders of Senior Indebtedness to receive payments and distributions of cash, property and securities applicable to the Senior Indebtedness, until the principal of, and premium, if any, and interest on the Subordinated Notes shall be paid in full. For the purpose of such subrogation no such payments or distributions to the holders of Senior Indebtedness by or on behalf of the Company, or by or on behalf of the Holders by virtue of this Article XI, which otherwise would have been made to the Holders shall, as between the Company and the Holders of the Subordinated Notes, be deemed to be payment by the Company to or on account of the Senior Indebtedness, it being understood that the provisions of this Article XI are and are intended solely for the purpose of defining the relative rights of the Holders of Subordinated Notes, on the one hand, and the holders of Senior Indebtedness, on the other hand. Section 11.05. Obligations of the Company Unconditional. 49 Nothing contained in this Article XI or elsewhere in this Indenture or in any Subordinated Note is intended to or shall impair, as between the Company and the Holders of the Subordinated Notes, the obligations of the Company, which are absolute and unconditional, to pay to the Holders of the Subordinated Notes the principal of and premium, if any, and interest on the Subordinated Notes as and when the same shall become due and payable in accordance with their terms, or is intended to or shall effect the relative rights of the Holders of Subordinated Notes and creditors of the Company, other than the holders of the Senior Indebtedness, nor shall anything herein or therein prevent the Trustee or any Holder of any Subordinated Note from exercising all remedies otherwise permitted by applicable law upon default under this Indenture, subject to the rights, if any, under this Article XI, of the holders of Senior Indebtedness in respect of cash, property or securities of the Company received upon the exercise of any such remedy. Upon any distribution of assets of the Company referred to in this Article XI, the Trustee, subject to the provisions of Section 7.01, and the Holders shall be entitled to rely upon any order or decree made by any court of competent jurisdiction in which such Insolvency or Liquidation Proceeding is pending, or a certificate of the liquidating trustee or agent or other Person making any distribution to the Trustee or to the Holders for the purpose of ascertaining the Persons entitled to participate in such distribution, the holders of the Senior Indebtedness and other indebtedness of the Company, the amount thereof or payable thereon, the amount or amounts paid or distributed thereon and all other facts pertinent thereto or to this Article XI. Section 11.06. Entitled to Assume Payments Not Prohibited in Absence of Notice. The Trustee shall not at any time be charged with knowledge of the existence of any facts which would prohibit the making of any payment to or by the Trustee in respect of the Subordinated Notes, unless and until the Trustee or any Paying Agent shall have received written notice from the Company or from one or more holders of Senior Indebtedness or from any representative therefor and, prior to the receipt of any such written notice, the Trustee, subject to the provisions of Section 7.01, shall be entitled in all respects conclusively to assume that no such facts exist. Nothing in this Section 11.06 is intended to or shall relieve any Holder of Subordinated Notes from the obligations imposed under Sections 11.02 and 11.03 with respect to money or other distributions received in violation of the provisions thereof. Section 11.07. Application by Trustee of Assets Deposited With It. All money and U.S. Government Obligations deposited in trust with the Trustee pursuant to and in accordance with Section 8.01 shall be for the sole benefit of the Holders and shall not be subject to this Article XI. Otherwise, any deposit of assets by the Company with the Trustee or any Paying Agent (whether or not in trust) for the payment of principal of, premium, if any, or interest on any Subordinated Notes shall be subject to the provisions of this Article XI; provided that, if prior to the second Business Day preceding the date on which by the terms of this Indenture any such assets may become distributable for any purpose (including without limitation, the payment of the principal of (and premium, if any, of interest on any Subordinated Note) the Trustee or such Paying Agent shall not have received with respect to such assets the written notice provided for in Section 11.06, then the Trustee or such Paying Agent shall have full power and authority to receive such assets and to apply the same to the purpose for which they were received, and shall not be affected by any notice to the contrary which may be received by it on or after such date. The preceding sentence shall be construed solely for the 50 benefit of the Trustee and each Paying Agent and shall not otherwise affect the rights of holders of Senior Indebtedness. Section 11.08. Subordination Rights Not Impaired by Acts or Omissions of the Company or Holders of Senior Indebtedness. No right of any present or future holder of any Senior Indebtedness to enforce the subordination provisions in this Article XI shall at any time in any way be prejudiced or impaired by any act or failure to act on the part of the Company or by any act or failure to act by any such holder, or by any noncompliance by the Company with the terms of this Indenture, regardless of any knowledge thereof which any such holder may have or be otherwise charged with. The holders of Senior Indebtedness may extend, renew, modify or amend the terms of the Senior Indebtedness or any security therefor and release, sell or exchange such security and otherwise deal freely with the Company, all without affecting the liabilities and obligations of the parties to this Indenture or the Holders of the Subordinated Notes. Section 11.09. Holders Authorize Trustee to Effectuate Subordination of Subordinated Notes. Each Holder of Subordinated Notes by his acceptance thereof (a) authorizes and expressly directs the Trustee on his behalf to take such action as may be necessary or appropriate to effectuate the subordination provided in this Article XI and to protect the rights of the Holders of Subordinated Notes pursuant to this Indenture, and (b) appoints the Trustee his attorney-in-fact for such purpose, including in the event of any Insolvency or Liquidation Proceeding with respect to the Company, the timely filing of a claim for the unpaid balance of his Subordinated Notes in the form required in such proceeding and the causing of such claim to be approved. If the Trustee shall not file a proper claim or proof of debt in the form required in such proceeding prior to 30 days before the expiration of the time to file such claim or claims, then the holders of the Senior Indebtedness or their representative shall have the right to file an appropriate claim for and on behalf of the Holders of Subordinated Notes. Nothing herein contained shall be deemed to authorize the Trustee or any holder of Senior Indebtedness or their representative to authorize or consent to or accept or adopt on behalf of any Holder of Subordinated Notes any plan of reorganization, arrangement, adjustment or composition affecting the Subordinating Notes or the rights of any Holder of Subordinated Notes, or to authorize the Trustee or any holder of Senior Indebtedness or their representative to vote in respect of the claim of any Holder of Subordinated Notes in any such proceeding. Section 11.10. Right of Trustee to Hold Senior Indebtedness. The Trustee shall be entitled to all of the rights set forth in this Article XI in respect of any Senior Indebtedness at any time held by it to the same extent as any other holder of Senior Indebtedness, and nothing in this Indenture shall be construed to deprive the Trustee of any of its rights as such holder. Section 11.11. Article Eleven Not to Prevent Events of Default. 51 The failure to make a payment of principal of, premium, if any, or interest on the Subordinated Notes by reason of any provision of this Article XI shall not be construed as preventing the occurrence of a Default or an Event of Default. Section 11.12. Payment. A payment with respect to a Subordinated Note or with respect to principal of or interest on a Subordinated Note shall include, without limitation, payment of, principal of, premium, if any, and interest on any Subordinated Note, any depositing of funds under Article VIII, any payment on account of any mandatory or optional repurchase or redemption of any Subordinated Note (including payments pursuant to Article III) and any payment or recovery on any claim and any payment or recovery on any claim (whether for rescission or damages and whether based on contract, tort, duty imposed by law, or any other theory of liability) relating to or arising out of the offer, sale or purchase of any Subordinated Note, provided that any such payment, deposit, other payment or recovery (a) not prohibited pursuant to this Article XI at the time actually made shall not be subject to any recovery by any holder of Senior Indebtedness or representative therefor or other Person pursuant to this Article XI at any time thereafter and (b) made by or from any Person other than the Company shall not be subject to any recovery by any holder of Senior Indebtedness or representative therefor or other Person pursuant to this Article XI at any time thereafter except to the extent such Person recovers any such amount paid from the Company, whether pursuant to rights of indemnity, rescission or otherwise. Section 11.13. Trustee Not Fiduciary for Holders of Senior Indebtedness. The Trustee shall not be deemed to owe any fiduciary duty to the holders of Senior Indebtedness and shall not be liable to any such holders if the Trustee shall in good faith mistakenly pay over or distribute to Holders of Notes or to the Company or to any other Person cash, property or securities to which any holders of Senior Indebtedness shall be entitled to by virtue of this Article or otherwise. With respect to the holders of Senior Indebtedness, the Trustee undertakes to perform or to observe only such of its covenants or obligations as are specifically set forth in this Article, and no implied covenants or obligations with respect to holders of Senior Indebtedness shall be read into this Indenture against the Trustee. Nothing in this Article shall apply to the claims of, or payments to, the Trustee under or pursuant to Section 7.07. ARTICLE XII. SUBSIDIARY GUARANTEES Section 12.01. Unconditional Guarantees. (a) If any Notes of or within a series are specified to be guaranteed by the Subsidiary Guarantors, then each of the Subsidiary Guarantors hereby fully and unconditionally guarantees, jointly and severally, to each Holder of any such Note which is authenticated and delivered by the Trustee and to the Trustee for itself and on behalf of each such Holder, the due and punctual payment of the principal of, premium, if any, and interest (including, in case of default, interest on principal and, to the extent permitted by applicable law, on overdue interest, and including any additional interest required to be 52 paid according to the terms of any such Note), if any, on each such Note, and the due and punctual payment of any sinking fund payment (or analogous obligation), if any, provided for with respect to any such Note, when and as the same shall become due and payable, whether at Stated Maturity, upon redemption, upon acceleration, upon tender for repayment at the option of any Holder or otherwise, according to the terms thereof and of this Indenture and all other obligations of the Company hereunder (the "Guarantor Obligations"). In case of the failure of the Company or any successor thereto punctually to pay any such principal, premium, interest or sinking fund payment, each of the Subsidiary Guarantors hereby agrees to cause any such payment to be made punctually when and as the same shall become due and payable, whether at Stated Maturity, upon redemption, upon declaration of acceleration, upon tender for repayment at the option of any Holder or otherwise, as if such payment were made by the Company. (b) Each of the Subsidiary Guarantors hereby agrees that its Guarantor Obligations hereunder shall be as if it were principal debtor and not merely surety and shall be absolute and unconditional, irrespective of the identity of the Company, the validity, regularity or enforceability of any such Note or this Indenture, the absence of any action to enforce the same, any waiver or consent by the Holder of any such Note with respect to any provisions thereof, the recovery of any judgment against the Company or any action to enforce the same, or any other circumstance which might otherwise constitute a legal or equitable discharge or defense of a Subsidiary Guarantor. Each of the Subsidiary Guarantors hereby waives diligence, presentment, demand of payment, filing of claims with a court in the event of insolvency or bankruptcy of the Company, any right to require a proceeding first against the Company, protest, notice and all demands whatsoever and covenants that its Guarantee will not be discharged except by complete performance of its obligations contained in any such Note and in its Guarantee. (c) If the Trustee or the Holder of any Note is required by any court or otherwise to return to the Company or any Subsidiary Guarantor, or any custodian, receiver, liquidator, assignee, trustee, sequestrator or other similar official acting in relation to the Company or such Subsidiary Guarantor, any amount paid to the Trustee or such Holder in respect of a Note, the related Guarantee, to the extent theretofore discharged, shall be reinstated in full force and effect. Each of the Subsidiary Guarantors further agrees, to the fullest extent that it may lawfully do so, that, as between such Subsidiary Guarantor, on the one hand, and the Holders and the Trustee, on the other hand, the maturity of the obligations guaranteed hereby may be accelerated as provided in Article VI hereof for the purposes of this Guarantee, notwithstanding any stay, injunction or other prohibition under any applicable bankruptcy law preventing such acceleration in respect of the obligations guaranteed hereby. (d) Each of the Subsidiary Guarantors shall be subrogated to all rights of the Holders of the Notes of a series against the Company in respect of any amounts paid by such Subsidiary Guarantor on account of such Notes or this Indenture; provided, however, that such Subsidiary Guarantor shall not be entitled to enforce or to receive any payments arising out of, or based upon, such right of subrogation until the principal of, 53 premium, if any, and interest, if any, on all Notes of such series shall have been indefeasibly paid in full. Section 12.02. Execution and Delivery of Guarantees. (a) To evidence the Guarantees with respect to Notes of or within any series that are specified to be guaranteed by the Subsidiary Guarantors, each of the Subsidiary Guarantors hereby agrees to execute its Guarantee, in a form established pursuant to Section 2.01, to be endorsed on each Note of such series authenticated and delivered by the Trustee. Each such Guarantee shall be executed on behalf of such Subsidiary Guarantor by two Officers. The signature of any of these Officers on the Guarantees may be manual or facsimile. (b) Any Guarantee bearing the manual or facsimile signatures of the individuals who were the proper Officers of any Subsidiary Guarantor shall bind such Subsidiary Guarantor, notwithstanding that such individuals or any of them have ceased to hold such offices prior to the authentication and delivery of the Notes upon which such Guarantee are endorsed or did not hold such offices at the date of such Notes. (c) The delivery of any Notes by the Trustee, after the authentication thereof hereunder, shall constitute due delivery of the Guarantees endorsed thereon on behalf of the Subsidiary Guarantors. Each of the Subsidiary Guarantors hereby agrees that its Guarantee set forth in this Article XII shall remain in full force and effect notwithstanding any failure to endorse on each Note a notation of such Guarantee. Section 12.03. Limitation of Guarantor's Liability. Each of the Subsidiary Guarantors, and by its acceptance of a Note each Holder, hereby confirms that it is the intention of all such parties that in no event shall any Guarantor Obligations under the Guarantees constitute or result in a fraudulent transfer or conveyance for purposes of, or result in a violation of, any United States federal, or applicable United States state, fraudulent transfer or conveyance or similar law. To effectuate the foregoing intention, in the event that the Guarantor Obligations of any Subsidiary Guarantor in respect of the Notes of any series would, but for this sentence, constitute or result in such a fraudulent transfer or conveyance or violation, then the liability of such Subsidiary Guarantor under its Guarantee in respect of the Notes of such series shall be reduced to the extent necessary to eliminate such fraudulent transfer or conveyance or violation under the applicable fraudulent transfer or conveyance or similar law. Section 12.04. Subordination of Guarantees. If any Notes of or within a series specified to be guaranteed by the Subsidiary Guarantors are Subordinated Notes, then each of the Subsidiary Guarantors hereby agrees that the Guarantees are subordinated to the same extent and subject to the same terms, conditions, restrictions and limitations as apply to the Company with respect to the Subordinated Notes in Article XI of this Indenture. 54 ARTICLE XIII. MISCELLANEOUS Section 13.01. Trust Indenture Act of 1939. The Indenture shall incorporate and be governed by the provisions of the Trust Indenture Act that are required to be part of and to govern indentures qualified under the Trust Indenture Act. Section 13.02. Noteholder Communications; Noteholder Actions. (a) The rights of Holders to communicate with other Holders with respect to the Indenture or the Notes are as provided by the Trust Indenture Act, and the Company, the Subsidiary Guarantors and the Trustee shall comply with the requirements of Trust Indenture Act Sections 312(a) and 312(b). Neither the Company, the Subsidiary Guarantors, nor the Trustee will be held accountable by reason of any disclosure of information as to names and addresses of Holders made pursuant to the Trust Indenture Act. (b) Any request, demand, authorization, direction, notice, consent to amendment, modification or waiver or other action provided by this Indenture to be given or taken by a Holder (an "Act") may be evidenced by an instrument signed by the Holder delivered to the Trustee. The fact and date of the execution of the instrument, or the authority of the Person executing it, may be proved in any manner that the Trustee deems sufficient. (c) The Trustee may make reasonable rules for action by or at a meeting of Holders of any one or more series of Notes, which will be binding on all the Holders of such Notes. (d) The ownership of Notes shall be proved by the Register. (e) Any Act by the Holder of any Note binds that Holder and every subsequent Holder of a Note that evidences the same debt as the Note of the acting Holder, even if no notation thereof appears on the Note. Subject to Section 13.02(f), a Holder may revoke an Act as to its Notes, but only if the Trustee receives the notice of revocation before the date the amendment or waiver or other consequence of the Act becomes effective. (f) The Company or any Subsidiary Guarantor may, but is not obligated to, fix a record date (which need not be within the time limits otherwise prescribed by Trust Indenture Act Section 316(c)) for the purpose of determining the Holders entitled to Act with respect to any amendment or waiver or in any other regard, except that during the continuance of an Event of Default, only the Trustee may set a record date as to notices of default, any declaration or acceleration or any other remedies or other consequences of the Event of Default. If a record date is fixed, those Persons that were Holders at such record date and only those Persons will be entitled to Act, or to revoke any previous Act, whether or not those Persons continue to be Holders after the record date. No Act will be valid or effective for more than 90 days after the record date. 55 Section 13.03. Notices. (a) Any notice or communication to the Company or any Subsidiary Gurantor will be deemed given if in writing (i) when delivered in person or (ii) five days after mailing when mailed by first class mail, or (iii) when sent by facsimile transmission, with transmission confirmed. Any notice or communication to the Trustee will be deemed given if in writing (i) when delivered in person, or (ii) when sent by facsimile transmission, with transmission confirmed. In each case the notice or communication should be addressed as follows: if to the Company or any Subsidiary Guarantor: Giant Industries, Inc. 23733 N. Scottsdale Road Scottsdale, Arizona 85255 Fax: (480) 585-8893 Attention: Chief Financial Officer and General Counsel if to the Trustee: The Bank of New York 101 Barclay Street, 8 West New York, New York 10286 Fax: (212) 815-5707 Attention: Corporate Trust Administration The Company, any Subsidiary Guarantor or the Trustee by notice to the other may designate additional or different addresses for subsequent notices or communications. (b) Except as otherwise expressly provided with respect to published notices, any notice or communication to a Holder will be deemed given when mailed to the Holder at its last address as it appears on the Register by first class mail or, as to any Global Note registered in the name of DTC or its nominee, as agreed by the Company, the Trustee and DTC. Copies of any notice or communication to a Holder, if given by the Company or any Subsidiary Guarantor, will be mailed to the Trustee at the same time. Defect in mailing a notice or communication to any particular Holder will not affect its sufficiency with respect to other Holders. (c) Where the Indenture provides for notice, the notice may be waived in writing by the Person entitled to receive such notice, either before or after the event, and the waiver will be the equivalent of the notice. Waivers of notice by Holders must be filed with the Trustee, but such filing is not a condition precedent to the validity of any action taken in reliance upon such waivers. Section 13.04. Certificate and Opinion as to Conditions Precedent. Upon any request or application by the Company or any Subsidiary Guarantor to the Trustee to take any action under 56 the Indenture, the Company or such Subsidiary Guarantor will furnish to a Responsible Officer of the Trustee: (a) an Officers' Certificate stating that, in the opinion of the signers, all conditions precedent, if any, provided for in the Indenture relating to the proposed action have been complied with; and (b) an Opinion of Counsel stating that all such conditions precedent have been complied with. Section 13.05. Statements Required in Certificate or Opinion. Each Officers' Certificate or Opinion of Counsel with respect to compliance with a condition or covenant provided for in the Indenture must include: (a) a statement that each Person signing the Officers' Certificate or Opinion of Counsel has read the covenant or condition and the related definitions; (b) a brief statement as to the nature and scope of the examination or investigation upon which the statement or opinion contained in the Officers' Certificate or Opinion of Counsel is based; (c) a statement that, in the opinion of each such Person, that Person has made such examination or investigation as is necessary to enable the Person to express an informed opinion as to whether or not such covenant or condition has been complied with; and (d) a statement as to whether or not, in the opinion of each such Person, such condition or covenant has been complied with, provided that an Opinion of Counsel may rely on an Officers' Certificate or certificates of public officials with respect to matters of fact. Section 13.06. Payment Date Other Than a Business Day. If any payment with respect to a payment of any principal of, premium, if any, or interest on any Note (including any payment to be made on any date fixed for redemption or purchase of any Note) is due on a day which is not a Business Day, then the payment need not be made on such date, but may be made on the next Business Day with the same force and effect as if made on such date, and no interest will accrue for the intervening period. Section 13.07. Governing Law; Waiver of Jury Trial. This Indenture and the Notes shall be governed by, and construed in accordance with, the laws of the State of New York without giving effect to applicable principles of conflicts of laws thereof. EACH OF THE COMPANY AND THE TRUSTEE HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS INDENTURE, THE NOTES OR THE TRANSACTION CONTEMPLATED HEREBY. Section 13.08. No Adverse Interpretation of Other Agreements. The Indenture may not be used to interpret another indenture or loan or debt agreement of the Company or any 57 Subsidiary of the Company, and no such indenture or loan or debt agreement may be used to interpret the Indenture. Section 13.09. Successors. All agreements of the Company and the Subsidiary Guarantors in the Indenture, the Notes and the Guarantees, as the case may be, will bind their respective successors. All agreements of the Trustee in the Indenture will bind its successor. Section 13.10. Duplicate Originals. The parties may sign any number of copies of the Indenture. Each signed copy shall be an original, but all of them together represent the same agreement. Section 13.11. Separability. In case any provision in the Indenture or in the Notes is invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions will not in any way be affected or impaired thereby. Section 13.12. Table of Contents and Headings. The Table of Contents, Cross-Reference Table and headings of the Articles and Sections of the Indenture have been inserted for convenience of reference only, are not to be considered a part of the Indenture and in no way modify or restrict any of the terms and provisions of the Indenture. Section 13.13. No Liability of Directors, Officers, Employees, Incorporators and Stockholders. No director, officer, employee, incorporator, member or stockholder of the Company or any Subsidiary will have any liability for any obligations of the Company or any Subsidiary Guarantor under the Notes, the Guarantees or the Indenture or for any claim based on, in respect of, or by reason of, such obligations. Each Holder of Notes by accepting a Note waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Notes. * * * This instrument may be executed in any number of counterparts, each of which so executed shall be deemed to be an original, but all such counterparts shall together constitute but one and the same instrument. SIGNATURES IN WITNESS WHEREOF, the parties hereto have caused the Indenture to be duly executed as of the date first written above. COMPANY: GIANT INDUSTRIES, INC. By: -------------------------------------- Name: Title: SUBSIDIARY GUARANTORS: GIANT INDUSTRIES ARIZONA, INC. By: -------------------------------------- Name: Title: CINIZA PRODUCTION COMPANY By: -------------------------------------- Name: Title: GIANT STOP-N-GO OF NEW MEXICO, INC. By: -------------------------------------- Name: Title: 59 GIANT FOUR CORNERS, INC. By: -------------------------------------- Name: Title: PHOENIX FUEL CO., INC. By: -------------------------------------- Name: Title: SAN JUAN REFINING COMPANY By: -------------------------------------- Name: Title: GIANT MID-CONTINENT, INC. By: -------------------------------------- Name: Title: GIANT PIPELINE COMPANY By: -------------------------------------- Name: Title: 60 GIANT YORKTOWN, INC. By: -------------------------------------- Name: Title: GIANT YORKTOWN HOLDING COMPANY By: -------------------------------------- Name: Title: TRUSTEE: THE BANK OF NEW YORK By: -------------------------------------- Name: Title: EXHIBIT A For Global Note only: UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (THE "DEPOSITORY", WHICH TERM INCLUDES ANY SUCCESSOR DEPOSITORY FOR THE CERTIFICATES), TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY (AND ANY PAYMENT HEREIN IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
EX-4.10 10 p68915a3exv4w10.txt EX-4.10 Exhibit 4.10 GIANT INDUSTRIES, INC. AND THE SUBSIDIARY GUARANTORS AND THE BANK OF NEW YORK, AS TRUSTEE FIRST SUPPLEMENTAL INDENTURE DATED AS OF _____________, 2004 TABLE OF CONTENTS
Page ---- ARTICLE I. DEFINITIONS................................................................................... 1 Section 1.01. Certain Terms Defined in the Indenture........................................... 1 Section 1.02. Definitions...................................................................... 1 ARTICLE II. FORM AND TERMS OF THE NOTES................................................................... 14 Section 2.01. Terms of the Notes............................................................... 14 Section 2.02. Events of Default................................................................ 15 Section 2.03. Covenants........................................................................ 15 Section 2.04. Consolidation, Merger, Sale or Conveyance........................................ 23 Section 2.05. Application of Article III of the Indenture Regarding Redemption of Notes........ 23 Section 2.06. Application of Article X of the Indenture Regarding Sinking Funds................ 24 Section 2.07. Subsidiary Guarantees............................................................ 24 ARTICLE III. MISCELLANEOUS................................................................................. 35 Section 3.01. Governing Law; Waiver of Jury Trial.............................................. 35 Section 3.02. Separability..................................................................... 35 Section 3.03. Ratification..................................................................... 36 Section 3.04. Effectiveness.................................................................... 36 EXHIBIT EXHIBIT A - Form of __% Senior Subordinated Note due 2014.............................................. A-1
FIRST SUPPLEMENTAL INDENTURE (this "First Supplemental Indenture"), dated as of _______________, 2004, among Giant Industries, Inc., a Delaware corporation (the "Company"), the Subsidiary Guarantors listed as signatories hereto, and The Bank of New York, a New York banking corporation, as Trustee ("Trustee"). RECITALS The Company, Trustee and the Subsidiary Guarantors executed and delivered an Indenture, dated as of _______, 2004 (the "Base Indenture" and, as supplemented by this First Supplemental Indenture, the "Indenture"), to provide for the issuance by the Company from time to time of Notes to be issued in one or more series as provided in the Indenture. The issuance and sale of $150 million aggregate principal amount of a new series of the Company's ___% Senior Subordinated Notes due _____, 2014 guaranteed by the Subsidiary Guarantors (the "Notes") have been authorized by resolutions adopted by the Board of Directors of the Company and the Subsidiary Guarantors on _______, 2004. The Company desires to issue and sell $150 million aggregate principal amount of the Notes on the date hereof, with the terms set forth in this Indenture. All things necessary to make this First Supplemental Indenture a valid supplement to the Indenture according to its terms and the terms of the Indenture have been done. For and in consideration of the premises and the purchase of the Notes by the Holders thereof, the parties hereby enter into this First Supplemental Indenture, and covenant and agree, for the equal and proportionate benefit of all Holders of the Notes, as follows: ARTICLE I DEFINITIONS Section 1.01. Certain Terms Defined in the Indenture. All capitalized terms used but not defined in this First Supplemental Indenture shall have the meanings ascribed to such terms in the Base Indenture, as amended hereby. Section 1.02. Definitions. (a) Except as may be provided in a future supplemental indenture, for the benefit of the Holders of all Notes, Section 1.01 of the Indenture shall be amended by adding or superceding the following definitions: "Asset Sale" means any sale, capitalized lease (within the meaning of GAAP), transfer, exchange or other disposition (or series of related sales, capitalized leases, transfers, exchanges or dispositions) of shares of Capital Stock of a Subsidiary (other than directors' qualifying shares), or of property or assets or any interests therein (each referred to for purposes of this definition as a "disposition") by the Company or any of its Restricted Subsidiaries, including any disposition by means of a merger, consolidation or similar transaction (other than, (i) by the Company to a Restricted Subsidiary or by a Restricted Subsidiary to the Company or a Restricted Subsidiary, (ii) a sale of inventory or hydrocarbons or other products (including both crude oil and refined products), in each case in the ordinary course of business of the Company's or a Restricted Subsidiary's operations, (iii) the merger or consolidation of, or the disposition of all or substantially all of the assets of the Company made in compliance with Section 5.01, (iv) the merger or consolidation of a Restricted Subsidiary made in compliance with Section 12.02(b)(i)(A), (v) the sale or lease of equipment, inventory, accounts receivable or other assets in the ordinary course of business, (vi) dispositions of receivables in connection with the compromise, settlement or collection thereof in the ordinary course of business or in bankruptcy or similar proceedings and exclusive of factoring or similar arrangements, (vii) a Restricted Payment that is permitted by Section 4.08, and (viii) any sale or disposition of any property or equipment that has become damaged, worn out, obsolete or otherwise unsuitable for use in connection with the business of the Company or its Restricted Subsidiaries. "Average Life" means, as of the date of determination, with respect to any Indebtedness, the quotient obtained by dividing (i) the sum of the products of (A) the number of years from such date to the date of each successive scheduled principal payment of such Indebtedness multiplied by (B) the amount of such principal payment by (ii) the sum of all such principal payments. "Bank Credit Facility" means a revolving credit and/or letter of credit and/or bankers' acceptance facility the proceeds of which are used for working capital and other general corporate purposes existing on the Issue Date or entered into after the Issue Date by one or more of the Company and its Restricted Subsidiaries and one or more financial institutions, as amended, extended or refinanced from time to time. "Borrowing Base" means, as of any date, an amount equal to the sum of (i) 85% of the book value of all accounts receivable owned by the Company and its Restricted Subsidiaries (excluding any accounts receivable from an Affiliate of the Company or that are more than 90 days past due, less (without duplication) the allowance for doubtful accounts attributable to such current accounts receivable) and (ii) 60% of the book value of all inventory owned by the Company and its Restricted Subsidiaries as of such date, all calculated on a consolidated basis and in accordance with GAAP. To the extent that information is not available as to the amount of accounts receivable as of a specific date, the Company may utilize the most recent available information for purposes of calculating the Borrowing Base. "Capitalized Lease Obligations" of any Person means the obligations of such Person to pay rent or other amounts under a lease of property, real or personal, that is required to be capitalized for financial reporting purposes in accordance with GAAP, and the amount of such obligations shall be the capitalized amount thereof determined in accordance with GAAP. "Change of Control" means any event or series of events by which: (i) any "Person" (as such term is used in Sections 13(d) and 14(d) of the Exchange Act) is or becomes the "beneficial owner" (as defined in Rules 13d-3 and 13d-5 under the Exchange Act) of 50% or more of the total voting power of the Voting Stock of the Company; 2 (ii) the Company consolidates with or merges or amalgamates with or into another Person or conveys, transfers, or leases all or substantially all of its assets to any Person, or any Person consolidates with, or merges or amalgamates with or into the Company, in any such event pursuant to a transaction in which the outstanding Voting Stock of the Company is changed into or exchanged for cash, securities or other property, other than any such transaction where (A) the outstanding Voting Stock of the Company is changed into or exchanged for Voting Stock of the surviving corporation which is not Disqualified Stock and (B) the holders of the Voting Stock of the Company immediately prior to such transaction own, directly or indirectly, not less than a majority of the Voting Stock of the surviving corporation immediately after such transaction; (iii) the stockholders of the Company approve any plan of liquidation or dissolution of the Company; or (iv) during any period of 12 consecutive months, individuals who at the beginning of such period constituted the Board of Directors of the Company (or whose appointment or nomination for election by the stockholders of the Company was approved by a vote of not less than a majority of the directors then still in office who were either directors at the beginning of such period or whose election or nomination for election was previously so approved) cease for any reason to constitute a majority of the Board of Directors of the Company then in office. "Change of Control Notice" has the meaning assigned to such term in Section 4.15(b). "Change of Control Offer" has the meaning assigned to such term in Section 4.15(a). "Change of Control Payment Date" has the meaning assigned to such term in Section 4.15(a). "Consolidated Coverage Ratio" means, for any Reference Period, the ratio on a pro forma basis of (i) Consolidated EBITDA for the Reference Period to (ii) Consolidated Interest Expense for such Reference Period; provided that, in calculating Consolidated EBITDA and Consolidated Interest Expense (A) with respect to any acquisition or disposition which occurs during the Reference Period or subsequent to the Reference Period and on or prior to the date giving rise to the need to calculate the Consolidated Coverage Ratio (the "Determination Date"), such acquisition or disposition shall be assumed to have occurred on the first day of the Reference Period, (B) with respect to the incurrence of any Indebtedness (including the Notes) during the Reference Period or subsequent to the Reference Period and on or prior to the Determination Date, the incurrence of such Indebtedness shall be assumed to have occurred on the first day of such Reference Period, (C) any Indebtedness that had been outstanding during the Reference Period that has been repaid on or prior to the Determination Date shall be assumed to have been repaid as of the first day of such Reference Period, (D) the Consolidated Interest Expense attributable to interest or dividends on any Indebtedness bearing a floating interest (or dividend) rate shall be computed on a pro forma basis as if the rate in effect on the Determination Date were the average rate in effect during the entire Reference Period, and (E) in determining the amount of Indebtedness pursuant to Section 4.07, the incurrence of Indebtedness giving rise to the need to calculate the Consolidated Coverage Ratio and, to the extent the net proceeds from 3 the incurrence or issuance thereof are used to retire Indebtedness, the application of the proceeds therefrom, shall be assumed to have occurred on the first day of the Reference Period. "Consolidated EBITDA" means, for any Reference Period, the Consolidated Net Income of the Company and its Restricted Subsidiaries for such Reference Period, increased (to the extent deducted in determining Consolidated Net Income) by the sum of (i) all income taxes of the Company and its Restricted Subsidiaries paid or accrued according to GAAP for such period (other than income taxes attributable to extraordinary gains or losses), (ii) all interest expense of the Company and its Restricted Subsidiaries paid or accrued in accordance with GAAP for such period (including amortization of original issue discount and other non-cash interest expense), (iii) depreciation and depletion of the Company and its Restricted Subsidiaries, (iv) amortization of the Company and its Restricted Subsidiaries including, without limitation, amortization of capitalized debt issuance costs, (v) other non-cash charges (excluding any such non-cash charges to the extent they require an accrual of, or a reserve for, cash charges for any future periods) to the extent such non-cash charges are deducted in connection with the determination of Consolidated Net Income minus non-cash items increasing such Consolidated Net Income and (vi) extraordinary losses to the extent deducted in connection with the determination of Consolidated Net Income. "Consolidated Interest Expense" means, with respect to the Company and its Restricted Subsidiaries, for any Reference Period, the aggregate amount (without duplication) of (i) interest expensed or capitalized in accordance with GAAP (including, in accordance with the following sentence, interest attributable to Capitalized Lease Obligations) during such period in respect of all Indebtedness of the Company and its Restricted Subsidiaries, including (A) amortization of original issue discount on any Indebtedness, (B) the interest portion of all deferred payment obligations, calculated in accordance with GAAP, and (C) all commissions, discounts and other fees and charges owed with respect to bankers' acceptance financing and currency and interest rate swap arrangements, in each case to the extent attributable to such Reference Period, and (ii) dividend requirements of the Company and its Restricted Subsidiaries with respect to Disqualified Stock of the Company or its Restricted Subsidiaries, whether in cash or otherwise (except dividends paid solely in shares of Qualified Stock of the Company), paid (other than to the Company or any of its Restricted Subsidiaries), declared, accrued or accumulated during such period, divided by the difference of one minus the applicable actual combined federal, state, local and foreign income tax rate of the Company and its Restricted Subsidiaries (expressed as a decimal), on a consolidated basis, for the four quarters immediately preceding the date of the transaction giving rise to the need to calculate Consolidated Interest Expense, in each case to the extent attributable to such Reference Period and excluding items eliminated in consolidation. For purposes of this definition, (i) interest on a Capitalized Lease Obligation shall be deemed to accrue at an interest rate reasonably determined by the Company to be the rate of interest implicit in such Capitalized Lease Obligation in accordance with GAAP and (ii) interest expense attributable to any Indebtedness represented by the guarantee by the Company or a Restricted Subsidiary of the Company of an obligation of another Person shall be deemed to be the interest expense attributable to the Indebtedness guaranteed. "Consolidated Net Income" of the Company means, for any period, the aggregate net income (or loss) of the Company and its Restricted Subsidiaries for such period on a consolidated basis, determined in accordance with GAAP, provided that (i) the net income for 4 such period of any Person that is not a Restricted Subsidiary or that is accounted for by the equity method of accounting will be included only to the extent of the amount of dividends, payments or distributions actually paid to the Company or its Restricted Subsidiaries by such other Person in such period; (ii) the net income for such period of any Restricted Subsidiary of the Company that is subject to any Payment Restriction will be included only to the extent of the amount of dividends, payments or distributions which (A) are actually paid by such Restricted Subsidiary in such period to the Company (or another Restricted Subsidiary which is not subject to a Payment Restriction) and (B) are not in excess of the amount which such Restricted Subsidiary would be permitted to pay to the Company (or another Restricted Subsidiary which is not subject to a Payment Restriction) in any future period under the Payment Restrictions applicable to such Restricted Subsidiary, assuming that the net income of such Restricted Subsidiary in each future period is equal to the net income for such Restricted Subsidiary for such period; and (iii) the following will be excluded: (A) any net gain on the sale or other disposition by the Company or any of its Restricted Subsidiaries of assets (other than a sale of inventory or hydrocarbons or other products (including both crude oil and refined products), in each case in the ordinary course of business of the Company's operations) and of the Capital Stock of any Restricted Subsidiary of the Company, (B) the net income (or loss) of any other Person acquired by the Company or any Restricted Subsidiary prior to the date of such acquisition, (C) extraordinary gains, and (D) the $5.4 million reserve recorded in 2001 for a related party note and interest thereon. "Consolidated Net Tangible Assets" means, as of any date, the total assets of the Company and its Restricted Subsidiaries on a consolidated basis as of such date (less applicable reserves and other items properly deductible from total assets) and after deducting therefrom: (i) total liabilities and total capital items as of such date except the following: items constituting Indebtedness, paid-in capital and retained earnings, provisions for deferred income taxes and deferred gains, and reserves which are not reserves for any contingencies not allocated to any particular purpose; (ii) goodwill, trade names, trademarks, patents, unamortized debt discount and expense, and other intangible assets; and (iii) all Investments other than Permitted Investments. "Consolidated Tangible Net Worth" means, with respect to any Person, as at any date of the determination, the sum of Capital Stock (other than Disqualified Stock) and paid-in capital plus retained earnings (or minus accumulated deficit) minus all intangible assets, including, without limitation, organization costs, patents, trademarks, copyrights, franchise, research and development costs, and any amount reflected in treasury stock, of such Person determined on a consolidated basis in accordance with GAAP. "Disqualified Stock" means any Capital Stock of a Person which, by its terms (or by the terms of any security into which it is convertible or for which it is exchangeable), or upon the happening of any event or with the passage of time, matures or is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or is redeemable at the option of the holder thereof, in whole or in part, on or prior to the Maturity Date or which is exchangeable or convertible into debt securities of such Person or any other Person, except to the extent that such exchange or conversion rights cannot be exercised prior to the Maturity Date. 5 "Domestic Subsidiary" means any Restricted Subsidiary that was formed under the laws of the United States or any state thereof or the District of Columbia or that guarantees or otherwise provides direct credit support for any Indebtedness of the Company or any Subsidiary Guarantor. "Equity Offering" means a public or private sale of Capital Stock (other than Disqualified Stock) of the Company. "Indebtedness" means, without duplication, with respect to any Person, (i) all obligations of such Person (A) in respect of borrowed money (whether or not the recourse of the lender is to the whole of the assets of such Person or only to a portion thereof), (B) evidenced by bonds, notes, debentures or similar instruments, (C) representing the balance deferred and unpaid of the purchase price of any property or services (other than accounts payable or other obligations arising in the ordinary course of business), (D) evidenced by bankers' acceptances or similar instruments issued or accepted by banks, (E) for the payment of money relating to a Capitalized Lease Obligation, or (F) evidenced by a letter of credit or a reimbursement obligation of such Person with respect to any letter of credit; (ii) all net obligations of such Person as of the date of a required calculation under interest rate swap obligations and foreign currency hedges, other than interest rate swap obligations and foreign currency hedges incurred to protect the Company or its Restricted Subsidiaries from fluctuations in interest rates or foreign currency exchange rates; (iii) all liabilities of others of the kind described in the preceding clauses (i) or (ii) that such Person has guaranteed or that are otherwise its legal liability; (iv) Indebtedness (as otherwise defined in this definition) of another Person secured by a Lien on any asset of such Person, whether or not such Indebtedness is assumed by such Person, the amount of such obligations being deemed to be the lesser of (A) the full amount of such obligations so secured, and (B) the fair market value of such asset, as determined in good faith by the Board of Directors of such Person, which determination shall be evidenced by a Board Resolution of such Person; (v) the liquidation preference and any mandatory redemption payment obligations in respect of Disqualified Stock of such Person; and (vi) any and all deferrals, renewals, extensions, refinancings and refundings (whether direct or indirect) of, or amendments, modifications or supplements to, any liability of the kind described in any of the preceding clauses (i), (ii), (iii), (iv), (v), or this clause (vi), whether or not between or among the same parties. "Investment" of any Person means (i) all investments by such Person in any other Person in the form of loans, advances or capital contributions (excluding advances to employees in the ordinary course of business in an aggregate amount outstanding at any one time not to exceed $5 million), (ii) all guarantees of Indebtedness or other obligations of any other Person by such Person, (iii) all purchases (or other acquisitions for consideration) by such Person of Indebtedness, Capital Stock or other securities of any other Person and (iv) all other items that would be classified as investments or advances on a balance sheet of such Person prepared in accordance with GAAP. "Issue Date" means the date on which the Notes are originally issued under this First Supplemental Indenture. "Make-Whole Premium" means, with respect to a Note on any date of redemption, the greater of (i) 1% of the principal amount of such Note or (ii) the excess of (A) the present value 6 at such date of redemption of (1) the redemption price of such Note at [ ], 2009 (as provided in Section 3.04(a)) plus (2) all remaining required interest payments (exclusive of interest accrued and unpaid to the date of redemption) due on such Note through [ ], 2009, computed using a discount rate equal to the Treasury Rate plus 50 basis points, over (B) the then outstanding principal amount of such Note. "Maturity Date" means [ ], 2014. "Net Available Proceeds" means, with respect to any Asset Sale of any Person, cash proceeds received (including any cash proceeds received by way of deferred payment of principal pursuant to a note or installment receivable or otherwise, but only as and when received, and excluding any other consideration until such time as such consideration is converted into cash) therefrom, in each case net of all legal, title and recording tax expenses, commissions and other fees and expenses incurred, and all federal, state or local taxes required to be accrued as a liability as a consequence of such Asset Sale, and in each case net of all Indebtedness which is secured by such assets, in accordance with the terms of any Lien upon or with respect to such assets, or which must, by its terms or in order to obtain a necessary consent to such Asset Sale to prevent a default or event of default under Senior Indebtedness or by applicable law, be repaid out of the proceeds from such Asset Sale and which is actually so repaid. "Net Cash Proceeds" means, in the case of any sale by the Company of securities pursuant to Section 4.08(a)(iii)(B) or (C), the aggregate net cash proceeds received by the Company, after payment of expenses, commissions, discounts and any other transaction costs incurred in connection therewith. "Pari Passu Indebtedness" means the 9% Notes and the 11% Notes and any other Indebtedness of the Company that specifically provides that such Indebtedness is to rank pari passu with the Notes in right of payment and is not subordinated by its terms in right of payment to any Indebtedness or other obligation of the Company which is not Senior Indebtedness. "Permitted Business Investments" means: (i) Investments by the Company or any Restricted Subsidiary in any Person which immediately prior to the making of such Investment is a Restricted Subsidiary; (ii) Investments in the Company by any Restricted Subsidiary; (iii) Investments by the Company or any Restricted Subsidiary of the Company in a Person, if as a result of such Investment (A) such Person becomes a Restricted Subsidiary of the Company or (B) such Person is merged, consolidated or amalgamated with or into, or transfers or conveys all or substantially all of its assets to, or is liquidated into, the Company or a Restricted Subsidiary of the Company; (iv) Investments arising in connection with interest rate protection agreements, foreign currency hedging agreements and commodity hedging agreements incurred in the ordinary course of business for the purpose of fixing or hedging interest rate, currency or 7 commodity risk in connection with the conduct of the business of the Company and its Restricted Subsidiaries and not for speculative purposes; (v) Investments received by the Company or any Restricted Subsidiary in connection with Asset Sales, provided that the aggregate fair market value of all Investments permitted pursuant to this clause (v) after the Issue Date shall not exceed $10 million in the aggregate; (vi) Investments to the extent acquired in exchange for, or out of the Net Cash Proceeds of a substantially concurrent offering of, Capital Stock (other than Disqualified Stock) of the Company; (vii) stock, obligations or securities received in satisfaction of judgments; and (viii) other Investments in any Person that is not an Affiliate of the Company (other than a Restricted Subsidiary) having an aggregate fair market value (measured on the date each such Investment was made and without giving effect to subsequent changes in value), when taken together with all other Investments made pursuant to this clause (viii) since the date of the Indenture, not to exceed $10 million. "Permitted Financial Investments" means: (i) United States dollars; (ii) securities issued or directly and fully guaranteed or insured by the United States government or any agency or instrumentality thereof; (iii) certificates of deposit and eurodollar time deposits with maturities of 12 months or less from the date of acquisition, bankers' acceptances with maturities not exceeding 12 months and overnight bank deposits, in each case with any domestic commercial bank having capital and surplus in excess of $300 million; (iv) repurchase obligations with a term of not more than seven days for underlying securities of the types described in clauses (ii) and (iii) entered into with any financial institution meeting the qualifications specified in clause (iii) above; (v) commercial paper rated at least A-2 or the equivalent thereof at the time of purchase by Standard & Poor's or rated at least P-2 or the equivalent at the time of purchase by Moody's Investors Service, Inc., and in each case maturing within 12 months after the date of acquisition; (vi) money market mutual or similar funds having assets in excess of $100 million; and (vii) any debt securities or adjustable rate preferred stock issued by a corporation organized under the laws of a state of the United States of America or issued by any state, county or municipality located within the United States of America which is rated at least AA- or the equivalent thereof by Moody's Investors Service, Inc. and 8 Standard & Poor's Corporation and maturing or having a call provision not exceeding 24 months from the date of acquisition. "Permitted Investments" means Permitted Business Investments and Permitted Financial Investments. "Permitted Liens" means: (i) Liens existing on the Issue Date; (ii) Liens on property of the Company now or hereafter securing Senior Indebtedness of the Company and Liens on property of a Subsidiary Guarantor now or hereafter securing Senior Indebtedness of such Subsidiary Guarantor; (iii) Liens now or hereafter securing any interest rate hedging obligations (A) that the Company is required to enter into with respect to the Bank Credit Facility or (B) that are entered into for the purpose of managing interest rate risk with respect to Indebtedness of the Company and its Restricted Subsidiaries, provided that such interest rate obligations under clauses (A) and (B) do not have an aggregate notional amount which exceeds the aggregate principal amount of Indebtedness of the Company and its Restricted Subsidiaries; (iv) Liens securing obligations under agreements that the Company enters into in the ordinary course of business for the purpose of protecting against fluctuations in oil, natural gas, or refined products prices; (v) Liens securing Indebtedness, the proceeds of which are used to refinance secured Indebtedness of the Company or its Restricted Subsidiaries; provided that such Liens extend to or cover only the property or assets currently securing the Indebtedness being refinanced; (vi) Liens for taxes, assessments and governmental charges not yet delinquent or being contested in good faith and for which adequate reserves have been established to the extent required by GAAP; (vii) mechanics', workmen's, materialmen's, operator's or similar Liens arising in the ordinary course of business for sums that are not yet delinquent or are being contested in good faith by appropriate action; (viii) Liens in connection with workmen's compensation, unemployment insurance or other social security, old age pension or public liability obligations not yet due or which are being contested in good faith by appropriate action; (ix) Liens, deposits or pledges to secure the performance of bids, tenders, contracts (other than contracts for the payment of money), leases, public or statutory obligations, surety, stay, appeal, indemnity, performance or other similar bonds, or other similar obligations arising in the ordinary course of business; 9 (x) survey exceptions, encumbrances, easements or reservations, or rights of others for, rights of way, zoning or other restrictions as to the use of real properties, and minor defects in title which, in the case of any of the foregoing, were not incurred or created to secure the payment of borrowed money or the deferred purchase price of property or services, and in the aggregate do not materially adversely affect the value of such properties or materially impair use for the purposes of which such properties are held by the Company or any Restricted Subsidiaries; (xi) Liens on, or related to, properties to secure all or part of the costs incurred in the ordinary course of business of exploration, drilling, development or operation thereof; (xii) Liens on pipeline or pipeline facilities which arise out of operation of law; (xiii) judgment and attachment Liens not giving rise to an Event of Default or Liens created by or existing from any litigation or legal proceeding that are currently being contested in good faith by appropriate proceedings and for which adequate reserves have been established to the extent required by GAAP; (xiv) (A) Liens upon any property of any Person existing at the time of acquisition thereof by the Company or a Subsidiary, (B) Liens upon any property of a Person existing at the time such Person is merged or consolidated with the Company or any Restricted Subsidiary or existing at the time of the sale or transfer of any such property of such Person to the Company or any Restricted Subsidiary, or (C) Liens upon any property of a Person existing at the time such Person becomes a Restricted Subsidiary; provided that in each case such Lien has not been created in contemplation of such sale, merger, consolidation, transfer or acquisition, and provided further that in each such case no such Lien shall extend to or cover any property of the Company or any Restricted Subsidiary other than the property being acquired and improvements thereon; (xv) Liens on deposits to secure public or statutory obligations or in lieu of surety or appeal bonds entered into in the ordinary course of business; (xvi) Liens in favor of collecting or payor banks having a right of setoff, revocation, refund or chargeback with respect to money or instruments of the Company or any Restricted Subsidiary on deposit with or in possession of such bank; (xvii) purchase money Liens granted in connection with the acquisition of fixed assets in the ordinary course of business and consistent with past practices, provided that (A) such Liens attach only to the property so acquired with the purchase money indebtedness secured thereby and (B) such Liens secure only Indebtedness that is not in excess of 100% of the purchase price of such fixed assets; (xviii) Liens reserved in oil and gas mineral leases for bonus or rental payments and for compliance with the terms of such leases; (xix) Liens arising under partnership agreements, oil and gas leases, farm-out agreements, division orders, contracts for the sale, purchase, exchange, transportation or 10 processing of oil, gas or other hydrocarbons, unitization and pooling declarations and agreements, development agreements, operating agreements, area of mutual interest agreements, and other agreements which are customary in the Principal Business; and (xx) other Liens provided that such other Liens shall not secure obligations in excess of $10 million in the aggregate at any one time outstanding. "Permitted Refinancing Indebtedness" means: (i) Indebtedness of the Company or any Restricted Subsidiary, the terms of which have been amended, modified or supplemented in a manner that does not (A) affect the priority of such Indebtedness in right of payment in relation to the Notes or the Guarantees, (B) accelerate the maturity of such Indebtedness or (C) shorten the Average Life of such Indebtedness, and (ii) Indebtedness of the Company or any Restricted Subsidiary, the net proceeds of which are used to renew, extend, refinance, defease, refund or repurchase outstanding Indebtedness of the Company or such Subsidiary, provided that (A) if the Indebtedness (including any guarantee thereof) being renewed, extended, refinanced, defeased, refunded or repurchased is pari passu with or subordinated in right of payment to the Notes or Guarantees, then such Indebtedness is pari passu with or subordinated in right of payment to, as the case may be, the Notes or Guarantees at least to the same extent as the Indebtedness being renewed, extended, refinanced, defeased, refunded or repurchased, (B) such Indebtedness is scheduled to mature no earlier than the Indebtedness being renewed, extended, refinanced, defeased, refunded or repurchased, (C) such Indebtedness has an Average Life at the time such Indebtedness is incurred that is equal to or greater than the remaining Average Life of the Indebtedness being renewed, extended, refinanced, defeased, refunded or repurchased and (D) such Indebtedness is incurred either by the Company or the Restricted Subsidiary who is the obligor on the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded; provided further that such Indebtedness (to the extent that such Indebtedness constitutes Permitted Refinancing Indebtedness) is in an aggregate principal amount (or, if such Indebtedness is issued at a price less than the principal amount thereof, the aggregate amount of gross proceeds therefrom is) not in excess of the aggregate principal amount then outstanding under the Indebtedness being renewed, extended, refinanced, defeased, refunded or repurchased (or if the Indebtedness being renewed, extended, refinanced, defeased, refunded or repurchased was issued at a price less than the principal amount thereof, then not in excess of the amount of liability in respect thereof determined in accordance with GAAP) plus all accrued interest thereon and the amount of any reasonably determined premium necessary to accomplish such refinancing and such reasonable expenses incurred in connection therewith. "Principal Business" means (i) the business of the exploration for, and development, acquisition, production, processing, marketing, refining, storage and transportation of, hydrocarbons, (ii) any related energy and natural resource business, (iii) any business currently engaged in by the Company or its Subsidiaries, (iv) convenience stores, retail service stations, 11 truck stops and other public accommodations in connection therewith, and (v) any activity or business that is a reasonable extension, development or expansion of any of the foregoing. "Publicly Traded Stock" means, with respect to any Person, Voting Stock of such Person which is registered under Section 12 of the Exchange Act and which is actively traded on the New York Stock Exchange or American Stock Exchange or quoted in the Nasdaq National Market System. "Qualified Stock" means any Capital Stock that is not Disqualified Stock. "Reference Period" means, with respect to any Person, the four full fiscal quarters ended immediately preceding any date upon which any determination is to be made pursuant to the terms of the Notes or the Indenture. "Restricted Payment" means, with respect to any Person, any of the following: (i) any dividend or other distribution in respect of such Person's Capital Stock (other than (A) dividends or distributions payable solely in Capital Stock (other than Disqualified Stock) of such Person and (B) in the case of Restricted Subsidiaries of the Company, dividends or distributions payable to the Company or to a Restricted Subsidiary of the Company; (ii) the purchase, redemption or other acquisition or retirement for value of any Capital Stock, or any option, warrant, or other right to acquire shares of Capital Stock, of the Company or any of its Restricted Subsidiaries other than any such purchase, redemption or other acquisition or retirement for value by the Company or any Restricted Subsidiary of the Company of any Capital Stock, or any option, warrant or other right to acquire shares of Capital Stock, of any Restricted Subsidiary with respect to such Capital Stock, option, warrant or other right which is owned, at the time of any such transaction, by the Company or another Restricted Subsidiary; (iii) the making of any principal payment on, or the purchase, defeasance, repurchase, redemption or other acquisition or retirement for value, prior to any scheduled maturity, scheduled repayment or scheduled sinking fund payment, of any Indebtedness which is subordinated in right of payment to the Notes or any Guarantee; and (iv) the making by such Person of any Investment other than a Permitted Investment. "Restricted Subsidiary" means any Subsidiary of the Company other than an Unrestricted Subsidiary. By a Board Resolution of the Company, as evidenced by written notice thereof delivered to the Trustee, the Company may designate any Unrestricted Subsidiary to be a Restricted Subsidiary; provided, however, that, immediately after giving effect to such designation, (i) the Company could incur at least $1.00 in additional Indebtedness pursuant to Section 4.07(a), and (ii) no Default or Event of Default shall have occurred and be continuing. 12 "Senior Indebtedness" means any Indebtedness (other than the 9% Notes and the 11% Notes and any Restricted Subsidiary's guarantee thereof) of a Person (whether outstanding on the date hereof or hereafter incurred), unless such Indebtedness is stated to be pari passu with or is contractually subordinate or junior in right of payment to the Notes or Guarantee; provided that Senior Indebtedness does not include (i) any liability for federal, state, local or other taxes owed or owing by the Company; (ii) any Indebtedness of the Company to any of its Subsidiaries or other Affiliates; (iii) any trade payables; or (iv) the portion of any Indebtedness that is incurred in violation of the Indenture. "Subsidiary Guarantor" means (i) each of the Company's Subsidiaries in existence on the Issue Date, except for Navajo Convenient Stores Co., LLC, (ii) each of the Subsidiaries that becomes a guarantor of the Notes in compliance with the provisions of the Indenture and (iii) each of the Subsidiaries executing a supplemental indenture in which such Subsidiary agrees to be bound by the terms of the Indenture; and their respective successors and assigns until released from their obligations under their Guarantee in accordance with the Indenture. "Treasury Rate" means the yield to maturity at the time of computation of United States Treasury securities with a constant maturity (as compiled and published in the most recent Federal Reserve Statistical Release H.15 (519) which has become publicly available at least two Business Days prior to the date fixed for prepayment (or, if such Statistical Release is no longer published, any publicly available source for similar market data)) most nearly equal to the then remaining term of the Notes to [ ], 2009; provided, however, that if the then remaining term to [ ], 2009 is not equal to the constant maturity of a United States Treasury security for which a weekly average yield is given, the Treasury Rate shall be obtained by linear interpolation (calculated to the nearest one-twelfth of a year) from the weekly average yields of United States Treasury securities for which such yields are given, except that if the then remaining term of the Notes to [ ], 2009 is less than one year, the weekly average yield on actually traded United States Treasury securities adjusted to a constant maturity of one year shall be used. "Unrestricted Subsidiary" means (i) any Subsidiary of an Unrestricted Subsidiary or (ii) any Subsidiary of the Company or of a Restricted Subsidiary that is designated as an Unrestricted Subsidiary by a Board Resolution of the Company in accordance with the following sentence. The Company may designate any Subsidiary of the Company or of a Restricted Subsidiary (including any Restricted Subsidiary or any newly formed or newly acquired Subsidiary) to be an Unrestricted Subsidiary by a Board Resolution of the Company, as evidenced by written notice thereof delivered to the Trustee, if after giving effect to such designation, (i) the Company could incur $1.00 of additional Indebtedness pursuant to Section 4.07(a), (ii) the Company could make an additional Restricted Payment of $1.00 pursuant to Section 4.08(a), (iii) such Subsidiary does not own or hold any Capital Stock of, or any Lien on any property of, the Company or any Restricted Subsidiary and (iv) such Subsidiary is not liable, directly or indirectly, with respect to any Indebtedness other than Unrestricted Subsidiary Indebtedness and Indebtedness to be released upon such Subsidiary's designation as an Unrestricted Subsidiary. "Unrestricted Subsidiary Indebtedness" of any Person means Indebtedness of such Person (i) as to which neither the Company nor any Restricted Subsidiary is directly or indirectly liable 13 (by virtue of the Company's or such Restricted Subsidiary's being the primary obligor, or guarantor of, or otherwise liable in any respect on, such Indebtedness), (ii) which, with respect to Indebtedness incurred after the date of the Indenture by the Company or any Restricted Subsidiary, upon the occurrence of a default with respect thereto, does not result in, or permit any holder of any Indebtedness of the Company or any Restricted Subsidiary to declare, a default on such Indebtedness of the Company or any Restricted Subsidiary and (iii) which is not secured by any assets of the Company or of any Restricted Subsidiary. "9% Notes" means the 9% senior subordinated notes due 2007 of the Company issued under an indenture, dated as of August 26, 1997, among the Company, the guarantors party thereto and The Bank of New York, as trustee. "11% Notes" means the 11% senior subordinated notes due 2012 of the Company issued under an indenture, dated as of May 14, 2002, among the Company, the guarantors party thereto and The Bank of New York, as trustee. Article II FORM AND TERMS OF THE NOTES Section 2.01. Terms of the Notes. The following terms relating to the Notes are hereby established: (a) The Notes shall constitute a series of Notes having the title "[ ]% Senior Subordinated Notes due 2014." The Notes shall form their own series for voting purposes, and shall not be part of the same class or series as any other notes issued by the Company. (b) The aggregate principal amount of the Notes that may be authenticated and delivered under this First Supplemental Indenture is unlimited; provided, however, that the Company complies with the provisions of this First Supplemental Indenture. (c) The entire outstanding principal amount of the Notes shall be payable on [ ], 2014. (d) The rate at which the Notes shall bear interest shall be [ ]%. Interest on the Notes shall accrue from the date hereof. The Interest Payment Dates for the Notes on which interest shall be payable shall be [ ] and [ ] of each year, beginning [ ], 2004. The Regular Record Dates for the interest payable on the Notes on any Interest Payment Date shall be [ ] with respect to the [ ] Interest Payment Date and [ ] with respect to the [ ] Interest Payment Date. Interest on overdue principal and premium, if any, shall be at the same rate as borne by the Notes, to the extent lawful, and interest on overdue interest (without regard to any applicable grace period) shall be at the same rate, to the extent lawful. (e) Each of the Notes shall be issuable in whole in the registered form of one or more Global Notes, without coupons, and the Depositary for such Global Notes will be DTC. (f) Each of the Notes shall be guaranteed by the Subsidiary Guarantors in accordance with Article XII of the Base Indenture and Section 2.07 of this First Supplemental Indenture. 14 (g) The Notes shall rank pari passu with the Pari Passu Indebtedness of the Company. (h) All provisions of the Base Indenture shall apply to the Notes, except as otherwise provided in this First Supplemental Indenture and except as provided in any future Supplemental Indenture. Without limiting the generality of the foregoing, the subordination provisions of Article XI of the Base Indenture shall apply to the Notes. (i) The Notes, Subsidiary Guarantees and the Trustee's certificate of authentication shall be substantially in the form of Exhibit A attached hereto. Section 2.02. Events of Default. Except as may be provided in a future supplemental indenture, for the benefit of the Holders of the Notes, Section 6.01(a) of the Base Indenture is deleted in its entirety and replaced with the following new Section 6.01(a): "the Company or any Subsidiary Guarantor defaults in the payment of the principal of or premium, if any, on any Note of such series when the same becomes due and payable at maturity, upon repurchase pursuant to a Change of Control Offer or a Asset Sale Offer, upon acceleration or otherwise (whether or not prohibited by the subordination provisions of the Indenture);" Section 2.03. Covenants. Except as may be provided in a future supplemental indenture, for the benefit of the Holders of the Notes, the following new Sections 4.07 through 4.15 are hereby added to the Indenture: "4.07 Limitation on Incurrence of Additional Indebtedness. (a) The Company will not, and will not permit any of the Restricted Subsidiaries, directly or indirectly, to issue, incur, assume, guarantee, become liable, contingently or otherwise, with respect to or otherwise become responsible for the payment of (collectively, "incur") any Indebtedness; provided, however, that if no Default or Event of Default with respect to the Notes shall have occurred and be continuing at the time or as a consequence of the incurrence of such Indebtedness, the Company or the Restricted Subsidiaries may incur Indebtedness if, on a pro forma basis, after giving effect to such incurrence and the application of the proceeds therefrom, the Consolidated Coverage Ratio would have been equal to or greater than 2.0 to 1.0. (b) Notwithstanding the foregoing, (i) the Company may incur Indebtedness consisting of the Notes to be issued on the Issue Date; (ii) the Subsidiary Guarantors may incur the Guarantees; (iii) the Company and the Subsidiary Guarantors may incur Indebtedness in existence on the date of this Indenture; (iv) the Company or any Subsidiary may incur secured or unsecured Indebtedness outstanding at any time in an aggregate principal amount not to exceed the greater of (A) $100 million or (B) the Borrowing Base; (v) the Company may incur Permitted Company Refinancing Indebtedness; (vi) any Restricted Subsidiary may incur Permitted Subsidiary Refinancing Indebtedness; (vii) the Company may incur Indebtedness to any Restricted Subsidiary, and any Restricted Subsidiary may incur Indebtedness to the Company or to any Restricted Subsidiary; provided that (X) any subsequent issuance or transfer that results in any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary 15 or (Y) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Restricted Subsidiary, shall be deemed, in each case to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (vii); (viii) the Company or any Subsidiary Guarantor may incur Indebtedness represented by Capitalized Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of construction or improvement of property, plant or equipment used in the business of the Company or such Subsidiary Guarantor, in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (viii), not to exceed $15 million at any time outstanding; (ix) this covenant will not prohibit the Guarantee by the Company or any of the Subsidiary Guarantors of Indebtedness of the Company or a Restricted Subsidiary of the Company that was permitted to be incurred by another provision of this covenant; and (x) the Company or any Subsidiary Guarantor may incur additional Indebtedness in an aggregate principal amount at any time outstanding, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (x), not to exceed $15 million. (c) Any Indebtedness of a Person existing at the time such Person becomes a Restricted Subsidiary (whether by merger, consolidation, acquisition or otherwise) shall be deemed to be incurred by such Restricted Subsidiary at the time it becomes a Restricted Subsidiary. For purposes of determining compliance with this Section 4.07, in the event that any proposed Indebtedness meets the criteria of more than one of the categories of debt described in paragraph (b) above or is entitled to be incurred pursuant to paragraph (a) above, the Company will be permitted to classify such item of Indebtedness on the date of its incurrence in any manner that complies with this covenant, including applying such Indebtedness to any one or more categories. 4.08. Limitation on Restricted Payments. (a) The Company will not, and will not permit any of the Restricted Subsidiaries to, directly or indirectly, make any Restricted Payment, unless: (i) no Default or Event of Default shall have occurred and be continuing at the time of or immediately after giving effect to such Restricted Payment; (ii) at the time of and immediately after giving effect to such Restricted Payment, the Company would be able to incur at least $1.00 of additional Indebtedness pursuant to Section 4.07(a); and (iii) immediately after giving effect to such Restricted Payment, the aggregate of all Restricted Payments declared or made after August 26, 1997 does not exceed the sum of (A) 50% of the Consolidated Net Income of the Company and its Restricted Subsidiaries (or in the event such Consolidated Net Income shall be a deficit, minus 100% of such deficit) during the period (treated as one accounting period) 16 subsequent to September 30, 1997 and ending on the last day of the fiscal quarter immediately preceding the date of such Restricted Payment; (B) the aggregate Net Cash Proceeds, and the fair market value of property other than cash (as determined in good faith by the Company's Board of Directors and evidenced by a Board Resolution), received by the Company during such period from any Person other than a Restricted Subsidiary of the Company as a result of the issuance or sale of Capital Stock of the Company (other than any Disqualified Stock), other than in connection with the conversion of Indebtedness or Disqualified Stock; (C) the aggregate Net Cash Proceeds, and the fair market value of property other than cash (as determined in good faith by the Company's Board of Directors and evidenced by a Board Resolution), received by the Company during such period from any Person other than a Restricted Subsidiary of the Company as a result of the issuance or sale of any Indebtedness or Disqualified Stock to the extent that at the time the determination is made such Indebtedness or Disqualified Stock, as the case may be, has been converted into or exchanged for Capital Stock of the Company (other than Disqualified Stock); (D)(1) in case any Unrestricted Subsidiary has been redesignated a Restricted Subsidiary, an amount equal to the lesser of (x) the book value (determined in accordance with GAAP) at the date of such redesignation of the aggregate Investments made by the Company and its Restricted Subsidiaries in such Unrestricted Subsidiary and (y) the fair market value of such Investments in such Unrestricted Subsidiary at the time of such redesignation, as determined in good faith by the Board of Directors of the Company, whose determination shall be conclusive and evidenced by a Board Resolution; or (2) in case any Restricted Subsidiary has been designated an Unrestricted Subsidiary, minus the greater of (x) the book value (determined in accordance with GAAP) at the date of designation of the aggregate Investments made by the Company and its Restricted Subsidiaries in such Restricted Subsidiary and (y) the fair market value of such Investments in such Restricted Subsidiary at the time of such designation, as determined in good faith by the Board of Directors, whose determination shall be conclusive and evidenced by a Board Resolution; (E) without duplication, with respect to any Investment (other than a Permitted Investment) of any Person which has previously been made by the Company or any of its Restricted Subsidiaries, the amount of any such Investment that has been fully and unconditionally repaid to the Company or a Restricted Subsidiary, not to exceed the cash amount received by the Company or such Restricted Subsidiary upon such repayment or with respect to any Indebtedness of any Person that has previously been guaranteed by the Company or any of its Restricted Subsidiaries (other than the Notes or Subsidiary Guarantees), the amount of any such Indebtedness that has been fully and unconditionally released from any and all further obligation or liability with respect thereto, provided in each case that such amount shall not exceed the aggregate amount of Restricted Payments previously taken into account with respect to such amount for purposes of determining the aggregate amount of all Restricted Payments declared or made pursuant to this clause (iii); and (F) $30 million. Notwithstanding the foregoing, the above limitations will not prevent (i) the payment of any dividend within 60 days after the date of declaration thereof, if at such date of declaration, such payment complied with the provisions hereof, (ii) the purchase, redemption, acquisition or retirement of any shares of Capital Stock of the Company or any Subsidiary Guarantor in exchange for, or out of the net proceeds of the substantially 17 concurrent sale (other than to a Restricted Subsidiary of the Company) of, other shares of Capital Stock (other than Disqualified Stock) of the Company; (iii) the defeasance, redemption, repurchase, retirement or other acquisition of Indebtedness which is subordinate in right of payment to the Notes or any Guarantee, in exchange for, by conversion into, or out of the net proceeds of the substantially concurrent issue or sale (other than to a Restricted Subsidiary of the Company) of Capital Stock (other than Disqualified Stock) of the Company (iv) the defeasance, redemption, repurchase, retirement or other acquisition of Indebtedness which is subordinate in right of payment to the Notes or any Guarantee with the net cash proceeds from an incurrence of Permitted Refinancing Indebtedness; (v) the payment of any dividend by a Restricted Subsidiary of the Company to the holders of its common Equity Interests on a pro rata basis; or (vi) the repurchase of Capital Stock deemed to occur upon the exercise of options or warrants if such Capital Stock represents all or a portion of the exercise price thereof; provided that, other than with respect to clause (i) above, no Default or Event of Default has occurred and is continuing at the time, or shall occur as a result thereof. 4.09. Limitation on Sale of Assets. (a) The Company will not, and will not permit any Restricted Subsidiary to, make any Asset Sales that, in the aggregate, have a fair market value of $15 million or more in any 12-month period unless: (i) the Company (or its Restricted Subsidiaries, as the case may be) receives consideration at the time of such sale or other disposition at least equal to the fair market value thereof (as determined in good faith by the Company's Board of Directors and evidenced by a Board Resolution in the case of any Asset Sales or series of related Asset Sales having a fair market value of $15 million or more; (ii) not less than 75% of the proceeds received by the Company (or its Restricted Subsidiaries, as the case may be) from each such Asset Sale consists of (A) cash, (B) cash equivalents which would constitute Permitted Financial Investments, (C) Publicly Traded Stock of a Person primarily engaged in a Principal Business, (D) other consideration with an aggregate fair market value, together with all other consideration of the type specified in this clause (D) received by the Company and its Restricted Subsidiaries from all Asset Sales after the Issue Date, not to exceed $5 million; provided that any sale of such other consideration shall be for cash and shall be considered an Asset Sale under this Indenture, (E) all or substantially all of the assets of a Principal Business, the majority of the Voting Stock of another Person engaged in a Principal Business that thereupon becomes a Restricted Subsidiary or long-term assets that are used or useful in a Principal Business, or (F) any combination of the foregoing; provided, however, that (1) the amount of (x) any liabilities (as shown on the Company's or such Restricted Subsidiary's most recent balance sheet or in the notes thereto) of the Company or such Restricted Subsidiary (other than liabilities that are by their terms expressly subordinated to the Notes or any guarantee thereof) that are assumed by the transferee of any such assets and (y) any notes or other obligations received by the Company or any such Restricted Subsidiary from such transferee that, within 90 days following the closing of such sale or disposition, are converted by the Company or such 18 Restricted Subsidiary into cash (to the extent of the cash received), shall be deemed to be cash for purposes of this provision and (2) the aggregate fair market value (as determined in good faith by the Board of Directors of the Company, evidenced by a Board Resolution) of all consideration of the type specified in clause (C) above received by the Company and its Restricted Subsidiaries from all Asset Sales after the Issue Date shall not exceed 15% of Consolidated Net Tangible Assets at the time of such Asset Sale; and (iii) the Net Available Proceeds received by the Company (or its Restricted Subsidiaries, as the case may be) from such Asset Sales are applied in accordance with paragraph (b) or (c) hereof. (b) The Company may, within 360 days following the receipt of Net Available Proceeds from any Asset Sale, apply such Net Available Proceeds to: (i) the repayment of Indebtedness of the Company under a Bank Credit Facility or other Senior Indebtedness of the Company or Senior Indebtedness of a Subsidiary Guarantor or Indebtedness of a Restricted Subsidiary that is not a Subsidiary Guarantor (but only from proceeds of Asset Sales of such Restricted Subsidiary) that results in a permanent reduction in the principal amount of such Senior Indebtedness in an amount equal to the principal amount so repaid; or (ii) make an investment in capital assets used in a Principal Business. (c) Any Net Available Proceeds from Asset Sales that are not applied or invested as provided in the preceding paragraph will constitute "Excess Proceeds." Within 10 days after the aggregate amount of Excess Proceeds exceeds $10 million, the Company will make an Asset Sale Offer to all holders of Notes and all holders of other Indebtedness that is pari passu with the Notes or any Subsidiary Guarantee containing provisions similar to those set forth in the Indenture with respect to offers to purchase with the proceeds of sales of assets, to purchase the maximum principal amount of Notes and such other Pari Passu Indebtedness that may be purchased out of the Excess Proceeds. The offer price in any Asset Sale Offer will be equal to 100% of the principal amount of the Notes and such other Pari Passu Indebtedness plus accrued and unpaid interest to the date of purchase, and will be payable in cash. If any Excess Proceeds remain after consummation of an Asset Sale Offer, the Company may use such Excess Proceeds for any purpose not otherwise prohibited by the Indenture. If the aggregate principal amount of Notes and such other Pari Passu Indebtedness tendered into such Asset Sale Offer exceeds the amount of Excess Proceeds, the Notes and such other Pari Passu Indebtedness shall be purchased on a pro rata basis based on the principal amount of Notes and such other Pari Passu Indebtedness tendered. Upon completion of each Asset Sale Offer, the amount of Excess Proceeds shall be reset at zero. (d) The Company will comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder to the extent such laws and regulations are applicable in connection with each repurchase of Notes pursuant to an Asset Sale Offer. To the extent that the provisions of any securities laws or regulations conflict with the Asset Sales provisions of the Indenture, the Company will comply with the applicable securities laws and regulations and will not be deemed to have breached its obligations under the Asset Sale provisions of the Indenture by virtue of such compliance. 19 (e) During the period between any Asset Sale and the application of the Net Available Proceeds therefrom in accordance with this covenant, all Net Available Proceeds shall be invested in Permitted Financial Investments or may be used to repay indebtedness under a Bank Credit Facility. 4.10. Limitation on Liens Securing Indebtedness. The Company will not, and will not permit any of Restricted Subsidiaries to, create, incur, assume or suffer to exist any Liens (other than Permitted Liens) upon any of their respective properties securing (a) any Indebtedness of the Company (other than Senior Indebtedness of the Company), unless the Notes are equally and ratably secured until such time as such obligations are no longer secured by a Lien or (b) any Indebtedness of any Subsidiary Guarantor (other than Senior Indebtedness of such Subsidiary Guarantor), unless the Guarantees of such Subsidiary Guarantors are equally and ratably secured until such time as such obligations are no longer secured by a Lien; provided, however, that if such Indebtedness is expressly subordinated to the Notes or the Guarantees, the Lien securing such Indebtedness will be subordinated and junior to the Lien securing the Notes or the Guarantees, with the same relative priority as such subordinated Indebtedness of the Company or a Subsidiary Guarantor will have with respect to the Notes or the Guarantees, as the case may be. 4.11. Limitation on Payment Restrictions Affecting Restricted Subsidiaries. The Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create or otherwise cause or suffer to exist or become effective any consensual encumbrance or consensual restriction on the ability of any Restricted Subsidiary of the Company to (i) pay dividends or make any other distributions on its Capital Stock, or any other interest or participation in a Restricted Subsidiary; (ii) pay any Indebtedness owed to the Company or a Restricted Subsidiary of the Company; (iii) make loans or advances to the Company or a Restricted Subsidiary of the Company; or (iv) transfer any of its properties or assets to the Company or a Restricted Subsidiary of the Company (each, a "Payment Restriction"), except for (A) encumbrances or restrictions with respect to Senior Indebtedness in effect on the Issue Date; (B) encumbrances or restrictions under a Bank Credit Facility; (C) consensual encumbrances or consensual restrictions binding upon any Person at the time such Person becomes a Restricted Subsidiary of the Company (unless the agreement creating such consensual encumbrance or consensual restrictions was entered into in connection with, or in contemplation of, such entity becoming a Restricted Subsidiary); (D) customary provisions restricting subletting or assignment of any lease governing a leasehold interest of any Restricted Subsidiary; (E) customary restrictions in security agreements or mortgages securing Indebtedness of a Restricted Subsidiary to the extent such restrictions restrict the transfer of the property subject to such security agreements and mortgages; (F) customary restrictions in purchase money obligations for property acquired in the ordinary course of business restricting the transfer of the property acquired thereby; (G) consensual encumbrances or consensual restrictions under any agreement that refinances or replaces any agreement described in clauses (A), (B), (C), (D), (E) or (F) above, provided that the terms and conditions of any such restrictions are no less favorable to the Holders of the Notes than those under the agreement so refinanced or replaced; and (H) any encumbrance or restriction due to applicable law. 20 Section 4.12 Limitation on Transactions with Affiliates. The Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, (i) sell, lease, transfer or otherwise dispose of any of its properties, assets or securities to, (ii) purchase or lease any property, assets or securities from, (iii) make any Investment in, or (iv) enter into or amend any contract or agreement with or for the benefit of, either (A) an Affiliate of any of them, (B) any Person, or Person who is a member of a group (as such term is used for purposes of Sections 13(d) and 14(d) of the Exchange Act, whether or not applicable) that, directly or indirectly, is the beneficial holder of 10% or more of any class of equity securities of the Company, (C) any Person who is an Affiliate of any such holder, or (D) any officers, directors, or employees of any of the above (each case under (A), (B), (C) and (D), an "Affiliate Transaction"), in one or a series of related transactions (to either party), except for transactions evidenced by an Officers' Certificate addressed and delivered to the Trustee stating that such Affiliate Transaction is made in good faith, the terms of which are fair and reasonable to the Company and such Restricted Subsidiary, as the case may be, or, with respect to Affiliate Transactions between the Company and any of its Subsidiaries, to the Company; provided that (v) transactions between or among the Company and any of its Restricted Subsidiaries shall not be deemed to constitute Affiliate Transactions, (w) any reasonable employment, compensation, benefit or indemnification agreement entered into by the Company or any of its Restricted Subsidiaries in the ordinary course of business shall not be deemed to constitute Affiliate Transactions, (x) Restricted Payments that are permitted by the provisions of this Indenture described in Section 4.08 shall not be deemed to constitute Affiliate Transactions, (y) any sale of Capital Stock (other than Disqualified Stock) of the Company shall not be deemed to constitute Affiliate Transactions, and (z) with respect to any Affiliate Transaction or series of related transactions with an aggregate value (to either party) in excess of $2 million (excluding issuances of Qualified Stock of the Company and any forgiveness of Indebtedness to an Affiliate existing on the Issue Date), the Company must, prior to the consummation thereof, obtain a written favorable opinion as to the fairness of such transaction to itself from a financial point of view from an independent accounting, appraisal or investment banking firm of national reputation. Section 4.13 Limitation on Future Senior Subordinated Indebtedness. The Company shall not incur any Indebtedness that is subordinated in right of payment to any other Indebtedness of the Company unless such Indebtedness by its terms, is pari passu with or subordinated to the Notes to the same extent. No Subsidiary Guarantor shall incur any Indebtedness that is subordinated in right of payment to any other Indebtedness of such Subsidiary Guarantor unless such Indebtedness, by its terms, is pari passu with or subordinated to the Guarantee of such Subsidiary Guarantor to the same extent. For purposes of the foregoing, no Indebtedness will be deemed to be subordinated in right of payment to any other Indebtedness of the Company or any Subsidiary Guarantor, as applicable, solely by virtue of being unsecured or by virtue of the fact that the holders of any secured Indebtedness have entered into intercreditor agreements giving one or more of such holders priority over the other holders in the collateral held by them. Section 4.14 Line of Business. 21 For so long as any Notes are outstanding, the Company shall not, and shall not permit any of its Restricted Subsidiaries to, engage in any business or activity other than a Principal Business. Section 4.15 Change of Control. (a) Within 30 days following the occurrence of any Change of Control, the Company shall offer (a "Change of Control Offer") to purchase all outstanding Notes at a purchase price equal to 101% of the aggregate principal amount of the Notes, plus accrued and unpaid interest to the date of purchase. The Change of Control Offer shall include a payment date (the "Change of Control Payment Date"), which shall be no earlier than 30 days and no later than 60 days from the date the Change of Control Offer is mailed. If the Change of Control Payment Date is on or after an interest payment record date and on or before the related interest payment date, any accrued interest will be paid to the Person in whose name a Note is registered at the close of business on such record date, and no additional interest will be payable to Holders who tender Notes pursuant to the Change of Control Offer. (b) Within 30 days after any Change of Control, the Company (with notice to the Trustee), or the Trustee at the Company's request, will mail or cause to be mailed to all Holders on the date of the Change of Control a notice (the "Change of Control Notice") of the occurrence of such Change of Control and of the Holders' rights arising as a result thereof. The Change of Control Notice will contain all instructions and materials necessary to enable Holders to tender their Notes to the Company. The Change of Control Notice, which shall govern the terms of the Change of Control Offer, shall state: (1) that the Change of Control Offer is being made pursuant to this Section 4.15; (2) the purchase price and the Change of Control Payment Date; (3) that any Note not tendered will continue to accrue interest; (4) that any Note accepted for payment pursuant to the Change of Control Offer shall cease to accrue interest on the Change of Control Payment Date; (5) that Holders electing to have a Note purchased pursuant to any Change of Control Offer will be required to surrender the Note, with the form entitled "Option of Holder to Elect Purchase" on the reverse of the Note completed, to the Company, a depositary, if appointed by the Company, or a Paying Agent at the address specified in the notice prior to termination of the Change of Control Offer; (6) that Holders will be entitled to withdraw their election if the Company, depositary or Paying Agent, as the case may be, receives, not later than the expiration of the Change of Control Offer, or such longer period as may be required by law, a facsimile transmission or letter setting forth the name of the Holder, the certificate or other identifying number, the principal amount of the Note the Holder delivered for purchase and a statement that such Holder is withdrawing his election to have the Note purchased; and (7) that Holders whose Notes are purchased only in part will be issued Notes equal in principal amount to the unpurchased portion of the Notes surrendered. (c) On the Change of Control Payment Date, the Company shall (i) accept for payment Notes or portions thereof tendered pursuant to the Change of Control Notice, (ii) if the Company appoints a depositary or Paying Agent, deposit with such depositary or Paying Agent money sufficient to pay the purchase price of all Notes or portions thereof so tendered and (iii) deliver to the Trustee Notes so accepted together with an Officers' Certificate stating the aggregate principal amount of Notes or portions thereof tendered to the Company. The depositary, the Company or the Paying Agent, as the case may be, shall promptly mail to the 22 Holder of Notes so accepted payment in an amount equal to the purchase price, and the Trustee shall promptly authenticate and mail to such Holders a new Note equal in principal amount to any unpurchased portion of the Note surrendered. Prior to complying with the provisions of this Section 4.15, but in any event within 30 days following a Change of Control, the Company will either repay all outstanding Senior Indebtedness or obtain the requisite consents, if any, under all agreements governing Senior Indebtedness to permit the repurchase of the Notes required by this Section 4.15. The Company will publicly announce the results of the Change of Control Offer on or as soon as practicable after the Change of Control Payment Date. For purposes of this Section 4.15, the Trustee shall act as the Paying Agent. (d) The Company, to the extent applicable and if required by law, will comply with Section 14 of the Exchange Act and the provisions of Regulation 14E and any other tender offer rules under the Exchange Act and any other federal and state securities laws, rules and regulations which may then be applicable to any offer by the Company to purchase the Notes of the Holders upon a Change of Control." (e) The Company will not be required to make a Change of Control Offer upon a Change of Control if a third party makes the Change of Control Offer in the manner, at the times and otherwise in compliance with the requirements set forth in this Indenture applicable to a Change of Control Offer made by the Company and purchases all of the Notes validly tendered and not withdrawn under such Change of Control Offer. Section 2.04. Consolidation, Merger, Sale or Conveyance. Except as may be provided in a future supplemental indenture, for the benefit of the Holders of the Notes, Section 5.01 of the Base Indenture is hereby deleted and replaced with the following new Section 5.01: "5.01.Company May Consolidate, Merge, Etc. on Certain Terms. The Company will not, directly or indirectly, consolidate with or merge with or into another Person or convey, transfer, lease or otherwise dispose of all or substantially all of the properties and assets of the Company and its Restricted Subsidiaries taken as a whole, in one or more related transactions, to any Person, unless: (a) the Company survives such merger or the Person formed by such consolidation or into which the Company is merged or that acquires by conveyance or transfer or other disposition, or which leases, all or substantially all of the property of the Company is a corporation organized and existing under the laws of the United States of America, any state thereof or the District of Columbia and expressly assumes, by supplemental indenture, the due and punctual payment of the principal of, premium, if any, and interest on, all the Notes and the performance of every other covenant and obligation of the Company under this Indenture; (b) immediately before and after giving effect to such transaction no Default or Event of Default exists; (c) immediately after giving effect to such transaction on a pro forma basis, the Company (or the surviving or transferee entity) would be able to incur $1.00 of additional Indebtedness under the tests described in Section 4.07(a) and (d) the Company delivers to the Trustee an Officers' Certificate (attaching the arithmetic computation to demonstrate compliance with clause (c) above) and Opinion of Counsel, in each case stating that such transaction and such agreement complies with this covenant and that all conditions precedent provided for herein relating to such transaction have been complied with. 23 Upon any such consolidation, merger, lease, conveyance or transfer in accordance with the foregoing, the successor Person formed by such consolidation or into which the Company is merged or to which such lease, conveyance or transfer is made shall succeed to, and be substituted for, and may exercise every right and power of, the Company under this Indenture with the same effect as if such successor had been named as the Company therein and thereafter (except in the case of a lease) the predecessor corporation will be relieved of all further obligations and covenants under this Indenture and the Notes. Clause (c) above of this covenant will not apply to any merger, conveyance, transfer or other disposition of assets between or among the Company and any of its Restricted Subsidiaries." Section 2.05. Application of Article III of the Indenture Regarding Redemption of Notes. Article III of the Base Indenture, as amended hereby, shall apply to the Notes. Except as may be provided in a future supplemental indenture, for the benefit of the Holders of the Notes, a new Section 3.04 shall be added to Article III of the Indenture as follows: "3.04. Optional Redemption. (a) At any time on or after ___________, 2009, the Company may, at its option, redeem all or any portion of the Notes at the redemption prices (expressed as percentages of the principal amount of the Notes) set forth below, plus, in each case, accrued interest thereon to the applicable redemption date, if redeemed during the 12-month period beginning ___________, 2009 of the years indicated below:
YEAR PERCENTAGE ---- ---------- 2009.................... 2010.................... 2011.................... 2012 and thereafter..... 100.0%
(b) In addition, at any time prior to __________, 2009, the Company may redeem all or part of the Notes upon not less than 30 days nor more than 60 days' notice at a redemption price equal to the sum of (i) the principal amount thereof, plus (ii) accrued and unpaid interest, if any, to the applicable date of redemption, plus (iii) the Make-Whole Premium. (c) At any time on or prior to __________, 2007, the Company may, at its option, redeem up to 35% of the aggregate principal amount of the Notes originally issued with the net cash proceeds of one or more Equity Offerings at a redemption price equal to [ ] % of the principal amount thereof, plus accrued and unpaid interest, if any, to the date of redemption, provided that at least 65% of the aggregate initial principal amount of the Notes remain outstanding after giving effect to each such redemption. In order to effect the foregoing redemption, the Company must mail notice of redemption no later than 60 days after the related Equity Offering. (d) If less than all of the Notes are to be redeemed, the Trustee shall select pro rata or by lot the Notes to be redeemed in multiples of $1,000. Notes in denominations larger than $1,000 may be redeemed in part." 24 Section 2.06. Application of Article X of the Indenture Regarding Sinking Funds. Except as may be provided in a future supplemental indenture, the Notes shall not be entitled to the benefit of any sinking fund and the provisions of the Base Indenture relating to a sinking fund, including Article X, shall not apply to the Notes. Section 2.07. Subsidiary Guarantees. Except as may be provided in a future supplemental indenture, for the benefit of the Holders of the Notes, Article XII of the Base Indenture is hereby deleted and replaced with the following new Article XII: "Section 12.01 Unconditional Guarantee. Each Subsidiary Guarantor hereby, jointly and severally, unconditionally guarantees (such guarantee to be referred to herein as the "Guarantee") to each Holder and to the Trustee the due and punctual payment of the principal of, premium, if any, and interest on the Notes and all other amounts due and payable under this Indenture and the Notes by the Company whether at maturity, by acceleration, redemption, repurchase or otherwise, including, without limitation, interest on the overdue principal of, premium, if any, and interest on the Notes, to the extent lawful, all in accordance with the terms hereof and thereof; subject, however, to the limitations set forth in Article XII. Failing payment when due of any amount so guaranteed for whatever reason, the Subsidiary Guarantors will be jointly and severally obligated to pay the same immediately. Each Subsidiary Guarantor hereby agrees that its obligations hereunder shall be unconditional, irrespective of the validity, regularity or enforceability of the Notes or this Indenture, the absence of any action to enforce the same, any waiver or consent by any Holder of the Notes with respect to any provisions hereof or thereof, the recovery of any judgment against the Company, any action to enforce the same or any other circumstance which might otherwise constitute a legal or equitable discharge or defense of a guarantor. Each Subsidiary Guarantor hereby waives diligence, presentment, demand of payments, filing of claims with a court in the event of insolvency or bankruptcy of the Company, any right to require a proceeding first against the Company, protest, notice and all demands whatsoever and covenants that this Guarantee will not be discharged except by complete performance of the obligations contained in the Notes, this Indenture and in this Guarantee. If any Holder or the Trustee is required by any court or otherwise to return to the Company, any Subsidiary Guarantor, or any custodian, trustee, liquidator or other similar official acting in relation to the Company or any Subsidiary Guarantor, any amount paid by the Company or any Subsidiary Guarantor to the Trustee or such Holder, this Guarantee, to the extent theretofore discharged, shall be reinstated in full force and effect. Each Subsidiary Guarantor agrees it shall not be entitled to any right of subrogation in relation to the Holders in respect of any obligations guaranteed hereby until payment in full of all obligations guaranteed hereby. Each Subsidiary Guarantor further agrees that, as between each Subsidiary Guarantor, on the one hand, and the Holders and the Trustee, on the other hand, (x) the maturity of the obligations guaranteed hereby may be accelerated as provided in Article VI for the purposes of this Guarantee, notwithstanding any stay, injunction or other prohibition preventing such acceleration in respect of the obligations guaranteed hereby, and (y) in the event of any acceleration of such obligations as provided in Article VI, such obligations (whether or not due and payable) shall forthwith become due and payable by each Subsidiary Guarantor for the purpose of this Guarantee. 25 The guarantee of each Subsidiary Guarantor herein shall be, in the manner and to the extent set forth in Article XII, subordinated in right of payment to the prior payment when due of the principal of, premium, if any, accrued and unpaid interest and all other amounts owing on all existing and future Senior Indebtedness of such Subsidiary Guarantor and of the Company, as the case may be, and senior to the right of payment of principal of, premium, if any, and accrued and unpaid interest on all existing and future Subordinated Indebtedness of such Subsidiary Guarantor. Section 12.02 Subsidiary Guarantors May Consolidate, Etc., on Certain Terms. (a) Nothing contained in this Indenture or in any of the Notes shall prevent any consolidation or merger of a Subsidiary Guarantor with or into the Company or another Subsidiary Guarantor or shall prevent any sale or conveyance of all or substantially all of its assets to the Company or another Subsidiary Guarantor. (b) The Company may not sell the Capital Stock of a Subsidiary Guarantor, and a Subsidiary Guarantor may not consolidate with or merge into or sell all or substantially all of its assets (in a single transaction or series of related transactions) to any Person other than the Company or another Subsidiary Guarantor (whether or not affiliated with the Company or the Subsidiary Guarantor), unless (i) with respect to a consolidation or merger of such Subsidiary Guarantor, either (A)(1) the surviving entity is a Restricted Subsidiary of the Company or, as a result of the transaction, becomes a Restricted Subsidiary of the Company, (2) the surviving entity remains a Restricted Subsidiary of the Company or, simultaneously with the consummation of the transaction, is designated as a Restricted Subsidiary of the Company, (3) immediately after giving effect to such transaction on a pro forma basis, the Company would be able to incur $1.00 of additional Indebtedness under the test described in Section 4.07(a), (4) if the surviving entity is not the Subsidiary Guarantor, the surviving entity agrees to assume such Subsidiary Guarantor's Guarantee and all its obligations pursuant to this Indenture in accordance with the provisions of Section 12.03, and (5) such transaction does not (x) violate any covenant in the Indenture or (y) result in a Default or an Event of Default immediately thereafter that is continuing or (B)(1) such transaction is made in accordance with Section 4.09 and (2) such transaction does not (x) violate any other covenant in the Indenture or (y) result in a Default or Event of Default immediately thereafter that is continuing and (ii) with respect to the sale of the Capital Stock or all or substantially all of the assets of such Subsidiary Guarantor, (A) such transaction is made in accordance with Section 4.09 and (B) such transaction does not (x) violate any other covenants in the Indenture or (y) result in a Default or Event of Default immediately thereafter that is continuing. In the case of any such consolidation, merger, sale or conveyance involving the assumption by the successor entity of a Subsidiary Guarantor's obligations under the Indenture, such successor entity shall assume such obligations by supplemental indenture executed and delivered to the Trustee in accordance with the provisions of Section 12.03. Upon execution and delivery of such supplemental indenture, such successor entity shall succeed to and be substituted for the Subsidiary Guarantor with the same effect as if it had been named herein as a Subsidiary Guarantor. Section 12.03 Addition of Subsidiary Guarantors. 26 (a) The Company agrees to cause each Person that shall become a Domestic Subsidiary after the Issue Date to execute and deliver a supplemental indenture pursuant to which such Restricted Subsidiary shall guarantee the payment of the Notes pursuant to the terms hereof. (b) Any Person who is not a Subsidiary Guarantor on the Issue Date may become a Guarantor by executing and delivering to the Trustee (i) a supplemental indenture in form and substance satisfactory to the Trustee, which subjects such Person to the provisions (including the representations and warranties) of this Indenture as a Subsidiary Guarantor and (ii) an Opinion of Counsel and Officers' Certificate to the effect that such supplemental indenture has been duly authorized and executed by such Person and constitutes the legal, valid, binding and enforceable obligation of such Person (subject to such customary exceptions concerning creditors' rights and equitable principles as may be acceptable to the Trustee and provided that no opinion need be rendered concerning the enforceability of the Guarantee). Section 12.04 Release of a Subsidiary Guarantor. A Subsidiary Guarantor shall be deemed released from its Guarantee and all of its obligations in this Indenture upon (i) (A) the sale of all of the Capital Stock of such Subsidiary Guarantor, the consolidation or merger of such Subsidiary Guarantor, or in the event of the liquidation and dissolution of such Subsidiary Guarantor into the Company or any other Subsidiary Guarantor, made in accordance with the provisions of either Section 12.02(b)(i)(B) or Section 12.02(b)(ii) (other than a sale of substantially all of the assets of the Subsidiary Guarantor) or (B) the designation of a Restricted Subsidiary as an Unrestricted Subsidiary, provided that such designation is made in accordance with the provisions of this Indenture, and (ii) receipt of a request by the Company accompanied by an Officers' Certificate and an Opinion of Counsel certifying that all conditions specified in this Indenture for such release have been satisfied in accordance with the provisions of this Indenture. Upon receipt of the items specified in clause (ii) of the preceding sentence, the Trustee shall deliver to the Company an appropriate instrument evidencing such release. Any Subsidiary Guarantor not so released remains liable for the full amount of principal of and interest on the Notes as provided in this Article XII. Section 12.05 Limitation of Subsidiary Guarantor's Liability. Each Subsidiary Guarantor and by its acceptance hereof each Holder hereby confirms that it is the intention of all such parties that the guarantee by such Subsidiary Guarantor pursuant to its Guarantee not constitute a fraudulent transfer or conveyance for purposes of any federal, state or foreign law. To effectuate the foregoing intention, the Holders and each Subsidiary Guarantor hereby irrevocably agree that the obligations of each Subsidiary Guarantor under the Guarantee shall be limited to the maximum amount as will, after giving effect to all other contingent and fixed liabilities of such Subsidiary Guarantor and after giving effect to any collections from or payments made by or on behalf of any other Subsidiary Guarantor in respect of the obligations of such other Subsidiary Guarantor under its Guarantee or pursuant to Section 12.06, result in the obligations of such Subsidiary Guarantor under the Guarantee not constituting a fraudulent conveyance or fraudulent transfer under federal, state or foreign law. 27 Section 12.06 Contribution. In order to provide for just and equitable contribution among the Subsidiary Guarantors, the Subsidiary Guarantors agree, inter se, that in the event any payment or distribution is made by any Subsidiary Guarantor (a "Funding Guarantor") under the Guarantee, such Funding Guarantor shall be entitled to a contribution from each other Subsidiary Guarantor for all payments, damages and expenses incurred by the Funding Guarantor in discharging the Company's obligations with respect to the Notes or any other Subsidiary Guarantor's obligations with respect to the Guarantee. Section 12.07 Execution and Delivery of Guarantee. To further evidence the Guarantees set forth in Section 12.01, each Subsidiary Guarantor hereby agrees that a notation relating to such Guarantee shall be endorsed on each Note authenticated and delivered by the Trustee and executed by either manual or facsimile signature of two Officers of each Subsidiary Guarantor. Each of the Subsidiary Guarantors hereby agrees that its Guarantee set forth in Section 12.01 shall remain in full force and effect notwithstanding any failure to endorse on each Note a notation relating to such Guarantee. If an Officer of a Guarantor whose signature is on this Indenture or a Note no longer holds that office at the time the Trustee authenticates such security or at any time thereafter, such Subsidiary Guarantor's Guarantee of such Note shall be valid nevertheless. The delivery of any Note by the Trustee, after the authentication thereof hereunder, shall constitute due delivery of any Guarantee set forth in this Indenture on behalf of the Subsidiary Guarantor. Section 12.08 Severability. In case any provision of this Guarantee shall be invalid, illegal or unenforceable, that portion of such provision that is not invalid, illegal or unenforceable shall remain in effect, and the validity, legality, and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. Section 12.09 Consent to Jurisdiction and Service of Process. Each Subsidiary Guarantor that is not organized under the laws of the United States or any state thereof (each a "Non-U.S. Subsidiary Guarantor") hereby appoints the principal office of CT Corporation System in The City of New York which, on the date hereof, is located at 1633 Broadway, New York, New York 10019, as the authorized agent thereof (the "Authorized Agent") upon whom process may be served in any action, suit or proceeding arising out of or based on this Indenture or the Notes which may be instituted in the Supreme Court of the State of New York or the United States District Court for the Southern District of New York, in either case in The Borough of Manhattan, The City of New York, by the Holder of any Note, and each Non-U.S. Subsidiary Guarantor hereby waives any objection which it may now have to the laying of venue of any such proceeding and expressly and irrevocably accepts and submits, 28 for the benefit of the Holders from time to time of the Notes, to the nonexclusive jurisdiction of any such court in respect of any such action, suit or proceeding, for itself and with respect to its properties, revenues and assets. Such appointment shall be irrevocable unless and until the appointment of a successor authorized agent for such purpose, and such successor's acceptance of such appointment, shall have occurred. Each Non-U.S. Subsidiary Guarantor agrees to take any and all actions, including the filing of any and all documents and instruments, that may be necessary to continue such appointment in full force and effect as aforesaid. Service of process upon the Authorized Agent with respect to any such action shall be deemed, in every respect, effective service of process upon any such Non-U.S. Subsidiary Guarantor. Notwithstanding the foregoing, any action against any Non-U.S. Subsidiary Guarantor arising out of or based on any Note may also be instituted by the Holder of such Note in any court in the jurisdiction of organization of such Non-U.S. Subsidiary Guarantor, and such Non-U.S. Subsidiary Guarantor expressly accepts the jurisdiction of any such court in any such action. The Company shall require the Authorized Agent to agree in writing to accept the foregoing appointment as agent for service of process. Section 12.10 Waiver of Immunity. To the extent that any Non-U.S. Subsidiary Guarantor or any of its properties, assets or revenues may have or may hereafter become entitled to, or have attributed to it, any right of immunity, on the grounds of sovereignty or otherwise, from any legal action, suit or proceeding, from the giving of any relief in any thereof, from set-off or counterclaim, from the jurisdiction of any court, from service of process, from attachment upon or prior to judgment, from attachment in aid of execution of judgment, or from execution of judgment, or other legal process or proceeding for the giving of any relief or for the enforcement of any judgment, in any jurisdiction in which proceedings may at any time be commenced, with respect to its obligations, liabilities or any other matter under or arising out of or in connection with this Indenture or the Notes, such Non-U.S. Subsidiary Guarantor, to the maximum extent permitted by law, hereby irrevocably and unconditionally waives, and agrees not to plead or claim, any such immunity and consents to such relief and enforcement. Section 12.11 Judgment Currency. Each Non-U.S. Subsidiary Guarantor agrees to indemnify the Trustee and each Holder against any loss incurred by it as a result of any judgment or order against such Non-U.S. Subsidiary being given or made and expressed and paid in a currency (the "Judgment Currency") other than United States dollars and as a result of any variation as between (i) the rate of exchange at which the United States dollar amount is converted into the Judgment Currency for the purpose of such judgment or order and (ii) the spot rate of exchange in The City of New York at which the Trustee or such Holder on the date of payment of such judgment or order is able to purchase United States dollars with the amount of the Judgment Currency actually received by the Trustee or such Holder. The foregoing indemnity shall constitute a separate and independent obligation of each Non-U.S. Subsidiary Guarantor and shall continue in full force and effect notwithstanding any such judgment or order as aforesaid. The term "spot rate of exchange" shall include any premiums and costs of exchange payable in connection with the purchase of, or conversion into, United States dollars. 29 Section 12.12 Subordination of Subsidiary Guarantees. (a) Guarantees Subordinated to Senior Indebtedness. Each Subsidiary Guarantor, for itself and its successors, and each Holder, by his acceptance of Notes, agrees that the Guarantees of such Subsidiary Guarantor are subordinated, to the extent and in the manner provided in this Section 12.12, to the prior payment in full of all Senior Indebtedness of such Subsidiary Guarantor (hereinafter in this Section 12.12 referred to as "Senior Indebtedness"). The Guarantees shall rank pari passu in right of payment with all guarantees by a Subsidiary Guarantor of Pari Passu Indebtedness of the Company. This Section 12.12 shall constitute a continuing offer to all Persons who become holders of, or continue to hold, Senior Indebtedness, and such provisions are made for the benefit of the holders of Senior Indebtedness, and such holders are made obligees hereunder and any one or more of them may enforce such provisions. (b) No Payment on Guarantees in Certain Circumstances. Upon the maturity of any Senior Indebtedness by lapse of time, acceleration or otherwise, unless and until all principal thereof, premium, if any, interest thereon and other amounts due thereon shall first be paid in full, no payment shall be made by or on behalf of any Subsidiary Guarantor pursuant to the Guarantees with respect to the principal of, premium, if any, interest on or other amounts owing on the Notes. Upon the happening of any default in the payment of any principal of, premium, if any, or interest on or other amounts due on any Senior Indebtedness (a "Payment Default"), then, unless and until such default shall have been cured or waived or shall have ceased to exist, no payment shall be made by or on behalf of any Subsidiary Guarantor pursuant to the Guarantees with respect to the principal of, premium, if any, interest on or other amounts owing on the Notes (except that, subject to applicable law, Holders may receive Subordinated Securities of Subsidiary Guarantors). Upon the happening of any default or event of default (other than a Payment Default) (including any event which with the giving of notice or the lapse of time or both would become an event of default and including any default or event of default which would result upon any payment pursuant to the Guarantees) with respect to any Senior Indebtedness of a Subsidiary Guarantor, as such default or event of default is defined therein or in the instrument or agreement or other document under which it is outstanding, then upon written notice thereof given to the Subsidiary Guarantors and the Trustee by a holder or holders of any Designated Senior Indebtedness or their representative ("Payment Notice"), no payment shall be made by or on behalf of the Subsidiary Guarantors pursuant to the Guarantees with respect to the principal of, premium, if any, interest on or other amounts owing on the Notes during the period (the "Payment Blockage Period") commencing on the date of such receipt of such Payment Notice and ending on the earlier of (i) the date, if any, on which such default is cured or waived or ceases to exist or (ii) the date, if any, on which the Designated Senior Indebtedness to which such default relates is discharged; provided, however, that no default or event of default (other than a Payment Default) shall prevent the making of any payment pursuant to the Guarantees for more than 179 days after the Payment Notice shall have been given. Notwithstanding the 30 foregoing, (i) not more than one Payment Notice shall be given within a period of 360 consecutive days, and (ii) no event of default which existed or was continuing on the date of any Payment Notice shall be made the basis for the giving of a subsequent Payment Notice unless all such events of default shall have been cured or waived for a period of at least 180 consecutive days after such date, and (iii) if any Subsidiary Guarantor or the Trustee receives any Payment Notice, a similar notice relating to or arising out of the same default or facts giving rise to such default (whether or not such default is on the same issue of Designated Senior Indebtedness) shall not be effective for purposes of this paragraph. The Subsidiary Guarantors shall resume payments of principal of, premium, if any, and interest on the Guarantees (i) in the case of a Payment Default, upon the date such Payment Default is cured or waived by the holders of Senior Indebtedness to which such Payment Default relates and (ii) in the case of a default or event of default (other than a Payment Default) with respect to Designated Senior Indebtedness, on the earlier of (A) the date such default or event of default is cured or (B) the expiration of the Payment Blockage Period with respect thereto if, in the case of this clause (B), this Section 12.12 otherwise does not prohibit such payment. In furtherance of the provisions of Section 12.12(a), in the event that, notwithstanding the foregoing provisions of this Section 12.12(b), any payment (other than a payment in the form of Subordinated Securities of Subsidiary Guarantors) with respect to the principal of, premium, if any or interest on the Notes shall be made by or on behalf of any Subsidiary Guarantor, and received by the Trustee, by any Holder or by any Paying Agent (or, if the Company is acting as its own Paying Agent, money for any such payment shall be segregated and held in trust), at a time when such payment was prohibited by the provisions of this Section 12.02, then, unless and until such payment is no longer prohibited by this Section 12.12(b), such payment (subject to the provisions of Sections 12.12(f) and 12.12(g)) shall be received and held in trust by the Trustee or such Holder or Paying Agent for the benefit of and shall be immediately paid over to the holders of Senior Indebtedness or their representative, ratably according to the aggregate amounts remaining unpaid on account of the principal of, premium, if any, and interest on the Senior Indebtedness held or represented by each, for application to the payment of all Senior Indebtedness in accordance with its terms, after giving effect to any concurrent payment or distribution to or for the benefit of the holders of Senior Indebtedness. The provisions of this Section 12.12(b) shall not modify or limit in any way the application of Section 12.12(c). Each Subsidiary Guarantor shall give prompt written notice to the Trustee of any default in the payment of any Senior Indebtedness of such Subsidiary Guarantor or any acceleration under any such Senior Indebtedness or under any agreement pursuant to which such Senior Indebtedness may have been issued. Failure to give such notice shall not affect the subordination of the Guarantees to the Senior Indebtedness or the application of the other provisions provided in this Section 12.12. (c) Guarantees Subordinated to Prior Payment of All Senior Indebtedness on Dissolution, Liquidation or Reorganization of a Subsidiary Guarantor. 31 In the event of any Insolvency or Liquidation Proceeding with respect to any Subsidiary Guarantor, all amounts payable in respect of any Senior Indebtedness of such Subsidiary Guarantor shall first be paid in full before the Holders are entitled to receive any direct or indirect payment or distribution of any cash, property or securities (other than Subordinated Securities of Subsidiary Guarantors) pursuant to the Guarantees on account of principal of, premium, if any, or interest on the Notes or any other payment with respect to the Notes. The holders of Senior Indebtedness shall be entitled to receive directly, for application to the payment of Senior Indebtedness (to the extent necessary to pay in full all Senior Indebtedness, whether or not due, including specifically, without limitation, all Post-Commencement Interest, whether or not allowed as a claim in such insolvency or Liquidation Proceeding, after giving effect to any substantially concurrent payment or distribution to the holders of Senior Indebtedness on account of Senior Indebtedness), any payment or distribution of any kind or character, whether in cash, property or securities (other than Subordinated Securities of Subsidiary Guarantors), including any payment or distribution which may be payable or deliverable by reason of the payment of any other payment of any other indebtedness of such Subsidiary Guarantor being subordinated to the payment of the Guarantees) which may be payable or deliverable in respect of the Guarantees in any such Insolvency or Liquidation Proceeding. In the event that, notwithstanding the foregoing provisions of this Section 12.12(c), the Trustee or any Paying Agent or the Holder of any Note shall have received any payment from or distribution of assets of such Subsidiary Guarantor or the estate created by the commencement of any such Insolvency or Liquidation Proceeding, of any kind or character in respect of the Guarantees, whether in cash, property or securities (other than Subordinated Securities of Subsidiary Guarantors), including any payment or distribution which may be payable or deliverable by reason of the payment of any other indebtedness of such Subsidiary Guarantor being subordinated to the payment of the Guarantees, before all Senior Indebtedness (whether or not due including specifically, without limitation, all Post-Commencement Interest, whether or not allowed as a claim in such Insolvency or Liquidation Proceeding) is paid in full, then and in such event such payment or distribution shall be received and held in trust by the Trustee, any such Paying Agent or Holder for and shall be paid over to the holders of Senior Indebtedness (to the extent necessary to pay in full all such Senior Indebtedness, whether or not due, including specifically, without limitation, all Post-Commencement Interest thereon, whether or not allowed as a claim in such Insolvency or Liquidation Proceeding), after giving effect to any substantially concurrent payment or distribution to the holders of Senior Indebtedness on account of Senior Indebtedness, for application to the payment in full of such Senior Indebtedness. The Company and each Subsidiary Guarantor shall give prompt written notice to the Trustee of any Insolvency or Liquidation Proceeding with respect to such Subsidiary Guarantor. (d) Holders to Be Subrogated to Rights of Holders of Senior Indebtedness. 32 After all amounts payable under or in respect of Senior Indebtedness (whether or not due) are paid in full, the Holders shall be subrogated (without any duty on the part of the holders of Senior Indebtedness to warrant, create, effectuate, preserve or protect such subrogation), to the extent of the payments or distributions made to the holders of Senior Indebtedness pursuant to the provisions of this Section 12.12 (equally and ratably with the holders of all other indebtedness of any Subsidiary Guarantor which by its express terms is subordinate and subject in right of payment to Senior Indebtedness to substantially the same extent as the Guarantees are so subordinated and subject in right of payment and which is entitled to like rights and subrogation), to the rights of the holders of Senior Indebtedness to receive payments and distributions of cash, property and securities applicable to the Senior Indebtedness, until the principal of and interest on the Notes shall be paid in full. For the purpose of such subrogation no such payments or distributions to the holders of Senior Indebtedness by or on behalf of the Company, or by or on behalf of the Holders by virtue of this Section 12.12, which otherwise would have been made to the Holders shall, as between any Subsidiary Guarantor and the Holders, be deemed to be payment by such Subsidiary Guarantor to or on account of the Senior Indebtedness, it being understood that the provisions of this Section 12.12 are and are intended solely for the purpose of defining the relative rights of the Holders, on the one hand, and the holders of Senior Indebtedness, on the other hand. (e) Guarantees Unconditional. Except as otherwise provided herein, nothing contained in this Indenture or in any Guarantee is intended to or shall impair, as between the Subsidiary Guarantors and the Holders, the Guarantees, which are absolute and unconditional, as and when the same shall become due and payable in accordance with their terms, or is intended to or shall affect the relative rights of the Holders and creditors of the Subsidiary Guarantors, other than the holders of the Senior Indebtedness, nor shall anything herein or therein prevent the Trustee or any Holder from exercising all remedies otherwise permitted by applicable law upon default under this Indenture, subject to the rights, if any, under this Section 12.12, of the holders of Senior Indebtedness in respect of cash, property or securities of any Subsidiary Guarantor received upon the exercise of any such remedy. Upon any distribution of assets of any Subsidiary Guarantor referred to in this Section 12.12, the Trustee, subject to the provisions of Section 7.01, and the Holders shall be entitled to rely upon any order or decree made by any court of competent jurisdiction in which such Insolvency or Liquidation Proceedings is pending, or a certificate of the liquidating trustee or agent or other Person making any distribution to the Trustee or to the Holders for the purpose of ascertaining the Persons entitled to participate in such distribution, the holders of the Senior Indebtedness and other indebtedness of such Subsidiary Guarantor, the amount thereof or payable thereon, the amount or amounts paid or distributed thereon and all other facts pertinent thereto or to this Section 12.12. (f) Trustee Entitled to Assume Payments Not Prohibited in Absence of Notice. The Trustee shall not at any time be charged with knowledge of the existence of any facts which would prohibit the making of any payment to or by the Trustee unless and until the Trustee or any Paying Agent shall have received written notice at the address specified in Section 13.03 from the Company or a Subsidiary Guarantor or from one or more holders of 33 Senior Indebtedness or from any representative therefor and, prior to the receipt of any such written notice, the Trustee, subject to the provisions of Section 7.01, shall be entitled in all respects conclusively to assume that no such fact exits. Nothing in this Section 12.12(f) is intended to or shall relieve any Holder from the obligations imposed under Sections 12.12(b) and 12.12(c) with respect to money or other distributions received in violation of the provisions thereof. (g) Application by Trustee of Assets Deposited With It. All money and U.S. Government Obligations deposited in trust with the Trustee pursuant to and in accordance with Section 8.01 shall be for the sole benefit of the Holder and shall not be subject to this Section 12.12. Otherwise, any deposit of assets by any Subsidiary Guarantor pursuant to the Guarantees with the Trustee or any Paying Agent (whether or not in trust) for the payment of principal of or interest on any Notes shall be subject to the provisions of this Section 12.12; provided that, if prior to the second Business Day preceding the date on which by the terms of this Indenture any such assets may become distributable for any purpose (including without limitation, the payment of either principal of or interest on any Note) the Trustee or such Paying Agent shall not have received with respect to such assets the written notice provided for in Section 12.12(f), then the Trustee or such Paying Agent shall have full power and authority to receive such assets and to apply the same to the purpose for which they were received, and shall not be affected by any notice to the contrary which may be received by it on or after such date. The preceding sentence shall be construed solely for the benefit of the Trustee and each Paying Agent and shall not otherwise affect the rights of holders of Senior Indebtedness. (h) Subordination Rights Not Impaired by Acts or Omissions of the Subsidiary Guarantors or Holders of Senior Indebtedness. No right of any present or future holder of any Senior Indebtedness to enforce the subordination provisions in this Section 12.12 shall at any time in any way be prejudiced or impaired by any act or failure to act on the part of any Subsidiary Guarantor or by any act or failure to act by any such holder, or by any noncompliance by the Company with the terms of this Indenture, regardless of any knowledge thereof which any such holder may have or be otherwise charged with. The holders of Senior Indebtedness may extend, renew, modify or amend the terms of the Senior Indebtedness or any security therefor and release, sell or exchange such security and otherwise deal freely with the Subsidiary Guarantors, all without affecting the liabilities and obligations of the parties to this Indenture or the Holders. (i) Holders Authorize Trustee to Effectuate Subordination of Notes. Each Holder of Notes by his acceptance thereof (i) authorizes and expressly directs the Trustee on his behalf to take such action as may be necessary or appropriate to effectuate the subordination provided in this Section 12.12 and to protect the rights of the Holders pursuant to this Indenture, and (ii) appoints the Trustee his attorney-in-fact for such purpose, including in the event of any Insolvency or Liquidation Proceeding with respect to any Subsidiary Guarantor, the timely filing of a claim of the unpaid balance of his Notes pursuant to the Guarantees in the form required in said proceeding and the causing of such claim to be 34 approved. If the Trustee shall not file a proper claim or proof of debt in the form required in such proceeding prior to 30 days before the expiration of the time to file such claim or claims, then the holders of the Senior Indebtedness or their representative shall have the right to file an appropriate claim for and on behalf of the Holders. Nothing herein contained shall be deemed to authorize the Trustee or any holder of Senior Indebtedness or their representative to authorize or consent to or accept or adopt on behalf of any Holder any plan of reorganization, arrangement, adjustment or composition affecting the Notes, the Guarantees or the rights of any Holder, or to authorize the Trustee or any holder of Senior Indebtedness or their representative to vote in respect of the claim of any Holder in any such proceeding. (j) Right of Trustee to Hold Senior Indebtedness. The Trustee shall be entitled to all of the rights set forth in this Section 12.12 in respect of any Senior Indebtedness at any time held by it to the same extent as any other holder of Senior Indebtedness, and nothing in this Indenture shall be construed to deprive the Trustee of any of its rights as such holder. (k) Payment. A payment pursuant to the Guarantees with respect to a Note or with respect to principal of, premium, if any, or interest on a Note shall include, without limitation, payment of principal of, premium, if any, and interest on any Note, any depositing of funds under Article IV, any payment on account of any mandatory or optional repurchase or redemption of any Note (including payments pursuant to Article III or Section 4.08 or Section 4.15) and any payment or recovery on any claim (whether for rescission or damages and whether based on contract, tort, duty imposed by law, or any other theory of liability) relating to or arising out of the offer, sale or purchase of any Note, provided that any such payment, deposit, other payment or recovery (i) not prohibited pursuant to this Section 12.12 at the time actually made shall not be subject to any recovery by any holder of Senior Indebtedness or representative therefor or other Person pursuant to this Section 12.12 at any time thereafter and (ii) made by or from any Persons other than any Subsidiary Guarantor shall not be subject to any recovery by any holder of Senior Indebtedness or representative therefor or other Person pursuant to this Section 12.12 at any time thereafter except to the extent such Person recovers any such amount paid from such Subsidiary Guarantor, whether pursuant to rights of indemnity, rescission or otherwise. (l) Trustee Not Fiduciary for Holders of Senior Indebtedness. The Trustee shall not be deemed to owe any fiduciary duty to the holders of Senior Indebtedness. With respect to the holders of Senior Indebtedness, the Trustee undertakes to perform or to observe only such of its covenants or obligations as are specifically set forth in this Article and no implied covenants or obligations with respect to holders of Senior Indebtedness shall be read into this Indenture against the Trustee." Article III. MISCELLANEOUS Section 3.01. Governing Law; Waiver of Jury Trial. This Indenture and the Notes shall be governed by, and construed in accordance with, the laws of the State of New York without 35 giving effect to applicable principles of conflicts of law thereof. EACH OF THE COMPANY AND THE TRUSTEE HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS INDENTURE, THE NOTES OR THE TRANSACTION CONTEMPLATED HEREBY. Section 3.02. Separability. In case any provision in the Indenture or in the Notes is invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions will not in any way be affected or impaired thereby. Section 3.03. Ratification. The Base Indenture, as supplemented and amended by this First Supplemental Indenture, is in all respects ratified and confirmed, and the Base Indenture and this First Supplemental Indenture shall be read, taken and construed as one and the same instrument. All provisions included in this First Supplemental Indenture supersede any conflicting provisions included in the Base Indenture unless not permitted by law. Section 3.04. Effectiveness. The provisions of this First Supplemental Indenture shall become effective as of the date hereof. * * * This instrument may be executed in any number of counterparts, each of which so executed shall be deemed to be an original, but all such counterparts shall together constitute but one and the same instrument. 36 SIGNATURES IN WITNESS WHEREOF, the parties hereto have caused the First Supplemental Indenture to be duly executed as of the date first written above. COMPANY: GIANT INDUSTRIES, INC. By: ---------------------------------------- Name: Title: SUBSIDIARY GUARANTORS: GIANT INDUSTRIES ARIZONA, INC. By: ---------------------------------------- Name: Title: CINIZA PRODUCTION COMPANY By: ---------------------------------------- Name: Title: GIANT STOP-N-GO OF NEW MEXICO, INC. By: ---------------------------------------- Name: Title:
37 GIANT FOUR CORNERS, INC. By: ---------------------------------------- Name: Title: PHOENIX FUEL CO., INC. By: ---------------------------------------- Name: Title: SAN JUAN REFINING COMPANY By: ---------------------------------------- Name: Title: GIANT MID-CONTINENT, INC. By: ---------------------------------------- Name: Title: GIANT PIPELINE COMPANY By: ---------------------------------------- Name: Title:
38 GIANT YORKTOWN, INC. By: ---------------------------------------- Name: Title: GIANT YORKTOWN HOLDING COMPANY By: ---------------------------------------- Name: Title: TRUSTEE: THE BANK OF NEW YORK By: ---------------------------------------- Name: Title:
39 EXHIBIT A [FACE OF NOTE] GIANT INDUSTRIES, INC. FORM OF __% SENIOR SUBORDINATED NOTES DUE 2014 For Global Notes only: UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (THE "DEPOSITORY", WHICH TERM INCLUDES ANY SUCCESSOR DEPOSITORY FOR THE CERTIFICATES), TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY (AND ANY PAYMENT HEREIN IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN. No. ________ $__________________________________ CUSIP No. _______ Giant Industries, Inc., a Delaware corporation, promises to pay to___________ or registered assigns the principal sum of ____________________ DOLLARS on _______, 2014. Interest Payment Dates: ______ and _______, commencing _________, 2004 Record Dates: _____ and ______. Reference is hereby made to the further provisions of this Note set forth on the reverse hereof, which further provisions shall for all purposes have the same effect as if set forth at this place. 40 In Witness Whereof, Giant Industries, Inc. has caused this Note to be signed manually or by facsimile by its duly authorized officers. GIANT INDUSTRIES, INC. By: -------------------------------------- Name: Title: By: -------------------------------------- Name: Title: Dated: ------------------- Certificate of Authentication: The Bank of New York, as Trustee, certifies that this is one of the Notes referred to in the within- mentioned Indenture. By: -------------------------------- Authorized Signatory 41 [REVERSE OF NOTE] GIANT INDUSTRIES, INC. ___% SENIOR SUBORDINATED NOTES DUE 2014 1. Interest. Giant Industries, Inc., a Delaware corporation (the "Company"), promises to pay interest on the principal amount of this Note at __% per annum from [ ], 2004 until maturity. The Company will pay interest semiannually on [ ] and [ ] of each year (each an "Interest Payment Date"), or if any such day is not a Business Day, on the next succeeding Business Day. Interest on the Notes will accrue from the most recent Interest Payment Date on which interest has been paid or, if no interest has been paid, from [ ], 2004; provided that if there is no existing Default in the payment of interest, and if this Note is authenticated between a record date referred to on the face hereof and the next succeeding Interest Payment Date, interest shall accrue from such next succeeding Interest Payment Date; provided further that the first Interest Payment Date shall be [ ], 2004. The Company shall pay interest on overdue principal and premium, if any, from time to time on demand at a rate equal to the interest rate then in effect; it shall pay interest on overdue installments of interest (without regard to any applicable grace periods) from time to time on demand at the same rate to the extent lawful. Interest will be computed on the basis of a 360-day year of twelve 30-day months. 2. Method of Payment. The Company will pay interest on the Notes to the persons who are registered holders of Notes at the close of business on the record date immediately preceding the Interest Payment Date, even if such Notes are cancelled after the record date and on or before the Interest Payment Date. Holders must surrender Notes to a Paying Agent to collect principal payments. The Company will pay principal of, premium, if any, and interest on the Notes in money of the United States of America that at the time of payment is legal tender for payment of public and private debts. However, the Company may pay such amounts by check payable in such money. It may mail an interest check to a Holder's registered address. 3. Paying Agent and Registrar. Initially, the Trustee will act as Paying Agent and Registrar. The Company may change any Paying Agent, Registrar or co-registrar without notice. The Company or any of its Subsidiaries may act as Paying Agent or Registrar. 4. Indenture. The Company issued the Notes under an Indenture, dated as of [ ], 2004, as amended by the First Supplemental Indenture, dated as of [ ], 2004 (together, the "Indenture"), each among the Company, the Subsidiary Guarantors and the Trustee. Capitalized terms herein are used as defined in the Indenture unless otherwise defined herein. The terms of the Notes include those stated in the Indenture and those made part of the Indenture by reference to the Trust Indenture Act of 1939 (15 U.S. Code Sections 77aaa-77bbb) as in effect on the date of the Indenture. Notwithstanding anything to the contrary herein, the Notes are subject to all such terms, and Holders are referred to the Indenture and such Act for a statement of such terms. To the extent any provision of this Note conflicts with the express provisions of the Indenture, the provisions of the Indenture shall govern and control. The Indenture pursuant to which the Notes are issued provides that an unlimited aggregate principal amount of Notes may be issued thereunder. 5. Ranking and Guarantees. The Notes are general senior subordinated unsecured obligations of the Company. The Company's obligation to pay principal, premium, if any, and interest with respect to the Notes is unconditionally guaranteed on a senior subordinated basis, jointly and severally, by the Subsidiary Guarantors pursuant to Article XII of the Indenture. Certain limitations to the obligations of the Subsidiary Guarantors are set forth in further detail in the Indenture. 6. Optional Redemption. At any time on or after [ ], 2009, the Company may, at its option, redeem all or any portion of the Notes at the redemption prices (expressed as percentages of the principal amount of the Notes) set forth below, plus, in each case, accrued interest thereon to the applicable redemption date, if redeemed during the 12-month period beginning [ ] of the years indicated below:
Year Percentage ---- ---------- 2009 _____%
42 2010 _____% 2011 _____% 2012 and 100.0% thereafter
In addition, at any time prior to [ ], 2009, the Company may redeem all or part of the Notes upon not less than 30 days nor more than 60 days' notice at a redemption price equal to the sum of (i) the principal amount thereof, (ii) accrued and unpaid interest, if any, to the applicable date of redemption, and (iii) the Make-Whole Premium. At any time and from time to time on or prior to [ ], 2007, the Company may redeem in the aggregate up to 35% of the aggregate principal amount of the Notes originally issued with the net proceeds of one or more Equity Offerings, at a redemption price (expressed as a percentage of principal amount) of [ ]%, plus accrued and unpaid interest, if any, to the redemption date (subject to the right of Holders of record on the relevant record date to receive interest due on the relevant interest payment date); provided, however, that at least 65% of the aggregate initial principal amount of the Notes must remain outstanding after each such redemption. In order to effect the foregoing redemption, the Company must mail notice of redemption in accordance with the terms of the Indenture no later than 60 days after the related Equity Offering. 7. Notice of Redemption. Notice of redemption will be mailed to the Holder's registered address at least 30 days but not more than 60 days before the redemption date to each Holder of Notes to be redeemed. If less than all Notes are to be redeemed, the Trustee shall select pro rata or by lot the Notes to be redeemed in multiples of $1,000. Notes in denominations larger than $1,000 may be redeemed in part. On and after the redemption date interest ceases to accrue on Notes or portions of them called for redemption (unless the Company shall default in the payment of the redemption price or accrued interest). 8. Change of Control. In the event of a Change of Control of the Company, the Company shall be required to make an offer to purchase each Holder's Notes, at 101% of the principal amount thereof, plus accrued interest to the Change of Control Payment Date. 9. Asset Sales Offer. In the event of certain Asset Sales, the Company may be required to make an Asset Sales Offer to purchase pro rata or by lot all or any portion of each Holder's Notes, at 100% of the principal amount of the Notes plus accrued interest to the date of purchase. 10. Restrictive Covenants. The Indenture imposes certain limitations on, among other things, the ability of the Company to merge or consolidate with any other Person or sell, lease or otherwise transfer all or substantially all of its properties or assets, and the ability of the Company and its Restricted Subsidiaries to dispose of certain assets, to pay dividends and make certain other distributions and payments, to make certain investments or redeem, retire, repurchase or acquire for value shares of Capital Stock, to incur additional Indebtedness or incur encumbrances against certain property and to enter into certain transactions with Affiliates, all subject to certain limitations described in the Indenture. 11. Denominations, Transfer, Exchange. The Notes are in registered form without coupons in denominations of $1,000 and whole multiples of $1,000. A Holder may transfer or exchange Notes in accordance with the Indenture. The Registrar may require a Holder, among other things, to furnish appropriate endorsements and transfer documents and to pay any taxes and fees required by law or permitted by the Indenture. The Registrar need not transfer or exchange any Notes selected for redemption. Also, it need not transfer or exchange any Notes for a period of 15 days before the mailing of a notice of redemption of Notes to be redeemed. 12. Persons Deemed Owners. The registered Holder of a Note may be treated as the owner of it for all purposes and neither the Company, any Subsidiary Guarantor, the Trustee nor any Agent shall be affected by notice to the contrary. 13. Unclaimed Money. If money for the payment of principal or interest remains unclaimed for one year, the Trustee or Paying Agent will pay the money back to the Company at its written request. After that, all liability of the Trustee and such Paying Agent with respect to such money shall cease. 43 14. Amendment, Supplement, Waiver. Subject to certain exceptions, the Indenture or the Notes may be amended or supplemented with the consent of the Holders of at least a majority in principal amount of the Notes, and any past default or noncompliance with any provision may be waived with the consent of the Holders of a majority in principal amount of the Notes. In addition, any amendment to, or waiver of, the provisions of the Indenture relating to subordination that adversely affects the right of the Holders of the Notes will require the consent of the Holders of at least 75% in aggregate principal amount of Notes then outstanding. Without the consent of any Holder, the Company may amend or supplement the Indenture or the Notes to, among other things, cure any ambiguity, defect or inconsistency or to provide for uncertificated Notes in addition to certificated Notes or to make any change that does not adversely affect the rights of any Holder. 15. Successor Corporation. When a successor corporation assumes all the obligations of its predecessor under the Notes and the Indenture, the predecessor corporation will be released from those obligations. 16. Defaults and Remedies. An event of default generally is: default by the Company or any Subsidiary Guarantor for 30 days in payment of interest on the Notes; default by the Company or any Subsidiary Guarantor in payment of principal of or premium, if any, on the Notes; default by the Company or any Subsidiary Guarantor in the deposit of any optional redemption payment when due and payable; failure to pay at maturity or defaults resulting in acceleration prior to maturity of certain other Indebtedness; failure by the Company or any Subsidiary Guarantor for 60 days after notice to comply with any of its other agreements in the Indenture; certain final judgments against the Company or Subsidiaries; a failure of any Guarantee of a Subsidiary Guarantor to be in full force and effect or denial by any Subsidiary Guarantor of its obligations with respect thereto; and certain events of bankruptcy or insolvency. Subject to certain limitations in the Indenture, if an Event of Default occurs and is continuing, the Trustee or the Holders of at least 25% in principal amount of the then outstanding Notes may declare all the Notes to be due and payable immediately, except that in the case of an Event of Default arising from certain events of bankruptcy, insolvency or reorganization relating to the Company, all outstanding Notes shall become due and payable immediately without further action or notice. Holders may not enforce the Indenture or the Notes except as provided in the Indenture. The Trustee may require indemnity and security satisfactory to it before it enforces the Indenture or the Notes. Subject to certain limitations, Holders of a majority in principal amount of the Notes may direct the Trustee in its exercise of any trust or power. The Company must furnish an annual compliance certificate to the Trustee. 17. Trustee Dealings with Company and Subsidiary Guarantors. The Bank of New York, the Trustee under the Indenture, in its individual or any other capacity, may become the owner or pledgee of Notes and may otherwise deal with the Company, the Subsidiary Guarantors or their respective Subsidiaries or Affiliates with the same rights it would have if it were not Trustee. 18. No Recourse Against Others. A director, officer, employee or stockholder, as such, of the Company, any Subsidiary Guarantor or the Trustee, shall not have any liability for any obligations of the Company, any Subsidiary Guarantor or the Trustee, under the Notes or the Indenture or for any claim based on, in respect of or by reason of, such obligations or their creation. Each Holder by accepting a Note waives and releases all such liability. The waiver and release are part of the consideration for the issue of the Notes. 19. Authentication. This Note shall not be valid until the Trustee or an authenticating agent signs the certificate of authentication on the other side of this Note. 20. Abbreviations. Customary abbreviations may be used in the name of a Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by the entireties), JT TEN (= joint tenants with right of survivorship and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts to Minors Act). 21. CUSIP Numbers. Pursuant to a recommendation promulgated by the Committee on Uniform Security Identification Procedures, the Company will cause CUSIP numbers to be printed on the Notes as a convenience to Holders of the Notes. No representation is made as to the accuracy of such numbers as printed on the Notes and reliance may be placed only on the other identification numbers printed hereon. 44 This Note shall be governed by and construed in accordance with the laws of the State of New York. The Company will furnish to any Holder upon written request and without charge a copy of the Indenture. Requests may be made to: Giant Industries, Inc., 23733 North Scottsdale Road, Scottsdale, Arizona 85255, Attention: Treasurer. 45 GUARANTEE The Subsidiary Guarantors (as defined in the Indenture), jointly and severally, have unconditionally guaranteed the due and punctual payment of the principal of, premium, if any, and interest on the Notes, and all other amounts due and payable under the Indenture and the Notes by the Company, whether at maturity, acceleration, redemption, repurchase or otherwise, including, without limitation, the due and punctual payment of interest on the overdue principal of, premium, if any, and interest on the Notes, to the extent lawful. The obligations of the Subsidiary Guarantors pursuant to the Guarantee are subject to the terms and limitations set forth in Article XII of the Indenture, and reference is made thereto for the precise terms of the Guarantee. 46 In Witness Whereof, the Subsidiary Guarantors have caused this Guarantee to be signed manually or by facsimile by its duly authorized officers. SUBSIDIARY GUARANTORS Giant Industries Arizona, Inc., an Arizona corporation Attest: By: ------------------------ -------------------------------------- Name: Title: Ciniza Production Company, a New Mexico corporation Attest: By: ------------------------ -------------------------------------- Name: Title: Giant Stop-N-Go of New Mexico, Inc., a New Mexico corporation Attest: By: ------------------------ -------------------------------------- Name: Title: Giant Four Corners, Inc., an Arizona corporation Attest: By: ------------------------ -------------------------------------- Name: Title: Phoenix Fuel Co., Inc., an Arizona corporation Attest: By: ------------------------ ------------------------------------ Name: Title:
47 San Juan Refining Company, a New Mexico corporation Attest: By: ------------------------ ------------------------------------ Name: Title: Giant Mid-Continent, Inc., an Arizona corporation Attest: By: ------------------------ ------------------------------------ Name: Title: Giant Pipeline Company, a New Mexico corporation Attest: By: ----------------------- ---------------------------------- Name: Title: Giant Yorktown, Inc., a Delaware corporation Attest: By: ----------------------- ---------------------------------- Name: Title: Giant Yorktown Holding Company, a Delaware corporation Attest: By: ----------------------- ---------------------------------- Name: Title:
48 ASSIGNMENT FORM To assign this Note, fill in the form below: I or we assign and transfer this Note to: - -------------------------------------------------------------------------------- (Insert assignee's social security or tax I.D. no.) - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- (Print or type assignee's name, address and zip code) and irrevocably appoint as agent to transfer ---------------------------------- this Note on the books of the Company. The agent may substitute another to act for him. - -------------------------------------------------------------------------------- Your Signature: --------------------------------------------------------------- (Sign exactly as your name appears on the other side of this Note) Your Name: -------------------------------------------------------------------- Date: ------------------------------------------ Signature Guarantee: ---------------------------------------------------------- 49 FORM OF OPTION OF HOLDER TO ELECT PURCHASE If you want to elect to have this Note purchased by the Company pursuant to Section 4.09 or Section 4.15 of the Indenture, check the box: [ ] If you want to have only part of this Note purchased by the Company pursuant to Section 4.09 or Section 4.15 of the Indenture, state the amount (in integral multiples of $1,000): $ ---------------------- Date: Signature: ----------------------------------- ----------------------------- (Sign exactly as your name appears on the other side of this Note) Name: ------------------------------------------------------------------------- Signature Guarantee: ---------------------------------------------------------- 50 SCHEDULE OF INCREASES OR DECREASES IN GLOBAL NOTE The following increases or decreases in this Global Note have been made: DATE OF EXCHANGE AMOUNT OF AMOUNT OF PRINCIPAL SIGNATURE OF DECREASE IN INCREASE IN AMOUNT OF THIS AUTHORIZED PRINCIPAL PRINCIPAL GLOBAL NOTE SIGNATORY OF AMOUNT OF THIS AMOUNT OF FOLLOWING SUCH TRUSTEE OR GLOBAL NOTE THIS GLOBAL DECREASE OR NOTES NOTE INCREASE CUSTODIAN
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