S-4

As filed with the Securities and Exchange Commission on July 15, 2002

Registration No. 333-            

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form S-4

REGISTRATION STATEMENT

UNDER THE SECURITIES ACT OF 1933

Giant Industries, Inc.

Subsidiary Guarantors Listed on Schedule A Hereto

(Exact name of registrants as specified in their charters)

Delaware	2911, 5541	86-0642718
(State or other jurisdiction of incorporation or organization)	(Primary standard industrial classification code number)	(I.R.S. employer identification number)

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

(Name, address, including zip code, and telephone number, including area code, of agent for service)

With a copy to:

Karen C. McConnell

W. T. Eggleston, Jr.

Fennemore Craig, P.C.

3003 North Central, Suite 2600

Phoenix, Arizona 85213-2912

(602) 916-5000

     Approximate date of commencement of proposed sale of the securities to the public: As soon as practicable after the effective date of this registration statement.

     If any of the securities being registered on this form are being offered in connection with the formation of a holding company and there is compliance with General Instruction G, check the following box.    o

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

CALCULATION OF REGISTRATION FEE

		Proposed Maximum	Proposed Maximum
Title of Class of	Amount to be	Aggregate Price	Aggregate	Amount of
Securities to be Registered	Registered	Per Note(1)	Offering Price(1)	Registration Fee
11% Senior Subordinated Notes due 2012	$200,000,000	100%	$200,000,000	$18,400
Guarantees of the 11% Senior Subordinated Notes due 2012	$200,000,000	N/A	N/A	(2)

(1)	Estimated solely for the purpose of computing the registration fee in accordance with Rule 457(f)(2) under the Securities Act.
(2)	No additional registration fee is due for guarantees pursuant to Rule 457(n) under the Securities Act.

     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 this Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.

Schedule A

Subsidiary Guarantors

GIANT INDUSTRIES ARIZONA, INC., an Arizona corporation

CINIZA PRODUCTION COMPANY, a New Mexico corporation

GIANT STOP-N-GO OF NEW MEXICO, INC., a New Mexico corporation

GIANT FOUR CORNERS, INC., an Arizona corporation

PHOENIX FUEL CO., INC., an Arizona corporation

SAN JUAN REFINING COMPANY, a New Mexico corporation

GIANT MID-CONTINENT, INC., an Arizona corporation

GIANT PIPELINE COMPANY, a New Mexico corporation

DEGUELLE OIL COMPANY, a Colorado corporation

GIANT YORKTOWN, INC., a Delaware corporation

GIANT YORKTOWN HOLDING COMPANY, a Delaware corporation

The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and we are not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.

SUBJECT TO COMPLETION, DATED JULY      , 2002

PROSPECTUS

[GIANT INDUSTRIES, INC. LOGO]

OFFER TO EXCHANGE

$200,000,000 principal amount of its 11% Senior Subordinated Notes due 2012,

which have been registered under the Securities Act,

for any and all of its outstanding 11% Senior Subordinated Notes due 2012

       We are offering to exchange 11% senior subordinated notes due 2012, or the “exchange notes,” for our currently outstanding 11% senior subordinated notes due 2012, or the “outstanding notes”. The exchange notes are substantially identical to the outstanding notes, except that the exchange notes have been registered under the federal securities laws, and will not bear any legend restricting their transfer. The exchange notes will represent the same debt as the outstanding notes, and we will issue the exchange notes under the same indenture.

      Each of our existing and future domestic restricted subsidiaries will guarantee the exchange notes on a senior subordinated basis. The exchange notes and guarantees will be unsecured senior subordinated obligations and will be subordinated to all of our and the guarantors’ senior debt.

      The principal features of the exchange offer are as follows:

•  The exchange offer expires at 5:00 p.m., New York City time, on                     , 2002, unless extended.

•  We will exchange all outstanding notes that are validly tendered and not validly withdrawn prior to the expiration of the exchange offer.

•  You may withdraw tendered outstanding notes at any time prior to the expiration of the exchange offer.

•  The exchange of outstanding notes for exchange notes pursuant to the exchange offer will not be a taxable event for U.S. federal income tax purposes.

•  We will not receive any proceeds from the exchange offer.

      Broker-dealers receiving exchange notes in exchange for outstanding notes acquired for their own account though market-making or other trading activities must deliver a prospectus in any resale of the exchange notes.

       Investing in the exchange notes involves risks. See “Risk Factors” beginning on page 17.

       Neither the U.S. Securities and Exchange Commission nor any other federal or state agency has approved or disapproved of these securities to be distributed in the exchange offer, nor have any of these organizations determined that this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

The date of this Prospectus is                     , 2002

TABLE OF CONTENTS

EX-3.15

EX-3.18

EX-3.23

EX-3.24

EX-4.2

EX-4.3

EX-10.1

EX-10.36

EX-10.37

EX-10.38

EX-12.1

EX-21.1

EX-23.1

EX-23.2

EX-24.2

EX-25.1

EX-99.1

EX-99.2

TABLE OF CONTENTS

	Page
Where You Can Find More Information		i
Incorporation of Certain Documents by Reference		ii
Market Ranking and Other Data		iii
Terms Used in this Prospectus		iii
Trademarks		iv
Forward–Looking Statements		v
Prospectus Summary		1
Risk Factors		16
Use of Proceeds		24
Capitalization		25
Pro Forma Financial Statements		26
Selected Historical and Unaudited Pro Forma Financial and Other Data		34
Management’s Discussion and Analysis of Financial Condition and Results of Operations		37
The Exchange Offer		55
Business		64
Yorktown Acquisition Agreements		76
Management		78
Security Ownership of Certain Beneficial Owners and Management		82
Related Party Transactions		85
Description of Other Debt		89
Description of the Exchange Notes		92
Certain Federal Income Tax Consequences		119
Plan of Distribution		123
Legal Matters		124
Experts		124
Index to Financial Statements		F-1

      Each broker-dealer that receives exchange notes for its own account pursuant to the exchange offer must acknowledge that it will deliver a prospectus in connection with any resale of such exchange notes. The letter of transmittal delivered with this prospectus states that by so acknowledging and by delivering a prospectus, a broker-dealer will not be deemed to admit that it is an “underwriter” within the meaning of the Securities Act. A broker-dealer may use this prospectus, as it may be amended or supplemented from time to time, in connection with resales of exchange notes received in exchange for outstanding notes where such outstanding notes were acquired by such broker-dealer as a result of market-making activities or other trading activities. We have agreed that, for a period ending on the earlier of (i) 180 days from the date on which the exchange offer registration statement is declared effective and (ii) the date on which a broker-dealer is no longer required to deliver a prospectus in connection with market-making or other trading activities, we will make this prospectus available to any broker-dealer for use in connection with any such resale. See “Plan of Distribution.”

      WE HAVE NOT AUTHORIZED ANY DEALER, SALESMAN OR OTHER PERSON TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATION OTHER THAN THOSE CONTAINED OR INCORPORATED BY REFERENCE IN THIS PROSPECTUS. YOU MUST NOT RELY UPON ANY INFORMATION OR REPRESENTATION NOT CONTAINED OR INCORPORATED BY REFERENCE IN THIS PROSPECTUS AS IF WE HAD AUTHORIZED IT. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY SECURITIES OTHER THAN THE REGISTERED SECURITIES TO WHICH IT RELATES, NOR DOES THIS PROSPECTUS CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY SECURITIES IN ANY JURISDICTION TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION IN SUCH JURISDICTION.

      We make no representation to any purchaser of the notes regarding the legality of any investment in the notes by the purchaser under any legal investment or similar laws or regulations. You should not consider any information in this prospectus to be legal, business or tax advice. You should consult your own attorney, business advisor and tax advisor for legal, business and tax advice regarding an investment in the notes.

      None of BP Corporation North America Inc., BP Products North America Inc. or any of their affiliates is offering the exchange notes or any other securities hereby, and none of BP Corporation North America Inc, BP Products North America Inc. or any of their affiliates has guaranteed or is otherwise responsible in any way for the exchange notes, our offering of the exchange notes or any other securities that we may issue, or for the accuracy or completeness of the information contained in this prospectus.

Where You Can Find More Information

      Giant and the subsidiary guarantors have filed with the U.S. Securities and Exchange Commission, or the “SEC,” a registration statement on Form S-4, or the “registration statement,” which term encompasses all amendments, exhibits, annexes and schedules thereto, pursuant to the Securities Act of 1933, as amended, or the “Securities Act,” covering the exchange notes being offered. This prospectus does not contain all the information in the registration statement. For further information with respect to Giant, the subsidiary guarantors and the exchange offer, we refer you to the registration statement. Statements made in this prospectus as to the contents of any contract, agreement or other documents referred to are not necessarily complete. For a more complete understanding and description of each contract, agreement or other document filed as an exhibit to the registration statement, we encourage you to read the documents contained in the exhibits.

      We file annual, quarterly and special reports, proxy statements and other information with the SEC. Our SEC filings are available to the public over the Internet at the SEC’s web site at http://www.sec.gov. You also may read and copy any document we file at the SEC’s public reference room at 450 Fifth Street, N.W., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information on the public reference room. Our common stock is listed and traded on the New York Stock Exchange under the trading

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symbol “GI.” You also may inspect and copy our reports, proxy statements and other information filed with the SEC at the New York Stock Exchange, 20 Broad Street, New York, New York.

      We have agreed that, for so long as any of the notes remains outstanding, we will furnish to holders of the notes and to prospective purchasers of the notes, the information required to be delivered by Rule 144A(d)(4) under the Securities Act to permit compliance with Rule 144A in connection with resales of notes.

Incorporation of Certain Documents by Reference

      The SEC allows us to “incorporate by reference” the information we file with it, which means that we can disclose important information to you by referring you to documents containing that information. The information incorporated by reference is considered to be part of this prospectus, and later information that we file with the SEC will automatically update and supersede this information.

      We incorporate by reference the information under the captions “Executive Compensation,” “Election of Directors — Compensation of Directors,” “Compensation Committee Report on Executive Compensation,” and “Comparison of Cumulative Total Return among the Company, S&P Industrials Index, and S&P Energy Composite Index” in our definitive proxy statement, dated March 29, 2002, for our annual meeting of shareholders held on May 9, 2002. Additionally, we incorporate by reference the documents listed below and any future filings we make with the SEC under Section 13(a), 13(c), 14 or 15(d) of the Exchange Act prior to the expiration of the exchange offer.

      (a) Giant’s Annual Report on Form 10-K for the fiscal year ended December 31, 2001, except for Item 8 of Part III and Item 14(a)(1) of Part IV, filed on April 1, 2002;

      (b) Giant’s Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2002, filed on May 14, 2002;

      (c) Giant’s Current Report on Form 8-K filed on February 12, 2002;

      (d) Giant’s Current Report on Form 8-K filed on April 26, 2002;

      (e) Giant’s Current Report on Form 8-K filed on April 29, 2002;

      (f) Giant’s Current Report on Form 8-K filed on May 14, 2002; and

      (g) Giant’s Current Report on Form 8-K filed on July 15, 2002.

      Any statement contained herein, or in any documents incorporated or deemed to be incorporated by reference herein, shall be deemed to be modified or superseded for the purpose of this prospectus to the extent that a subsequent statement contained herein or in any subsequently filed document which also is or is deemed to be incorporated by reference herein modifies or supersedes such statement. Any such statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this prospectus.

      You may request a copy of these filings at no cost by writing or telephoning us as follows:

Giant Industries, Inc.

Attention: Mark Cox

23733 North Scottsdale Road

Scottsdale, Arizona 85255

(480) 585-8888

      To obtain timely delivery of any copies of filings requested, please write or telephone no later than                     , 2002, five days prior to the expiration of the exchange offer.

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MARKET, RANKING AND OTHER DATA

      The data included in this prospectus regarding markets and ranking, including the size of certain markets and our position and the position of our competitors within these markets, is based on independent industry publications, reports of government agencies or other published industry sources and our estimates are based on our management’s knowledge of, and experience in, the markets in which we operate. Information on Gulf Coast refinery margins presented in this prospectus is derived from Reuters America historical data of 3-2-1 crack spreads for the Gulf Coast from 1997 through 2001. Information in this prospectus as to the Solomon complexity rating of the Yorktown refinery has been derived from the 2000 Solomon Associates Yorktown Performance Analysis Report. Retail industry data presented in this prospectus has been derived from the 2001 National Association of Convenience Stores State of the Industry Annual Report. Information on refinery yield industry averages presented in this prospectus is derived from Purvin & Gertz Inc.’s BP-Yorktown Refinery Evaluation dated October 24, 2001, as updated on December 3, 2001 and March 22, 2002. Our estimates have been based on information obtained from our customers, suppliers, trade and business organizations and other contacts in the markets in which we operate. We believe these estimates to be accurate as of the date of this prospectus. This information, however, may prove to be inaccurate because of the method by which we obtained some of the data for our estimates or because this information cannot always be verified with complete certainty due to the limits on the availability and reliability of raw data, the voluntary nature of the data gathering process, and other limitations and uncertainties. As a result, you should be aware that market, ranking and other similar data included in this prospectus, and estimates and beliefs based on that data, may not be reliable.

TERMS USED IN THIS PROSPECTUS

      In this prospectus, unless otherwise noted or the context otherwise requires:

•  The terms “Giant,” “we,” “our” and “us” refer to Giant Industries, Inc. and our subsidiaries.

•  The term “outstanding notes” refers to the 11% senior subordinated notes due 2012 that were issued on May 14, 2002 and the term “exchange notes” refers to the 11% senior subordinated notes due 2012 offered by this prospectus. We sometimes refer to the outstanding notes and the exchange notes collectively as the “notes.”

•  The term “Yorktown refinery” refers to the refinery and related assets in Yorktown, Virginia that we acquired concurrently with the offering of the outstanding notes.

•  The term “Yorktown acquisition” refers to our acquisition from BP Corporation North America Inc. and BP Products North America Inc. of the Yorktown refinery and associated inventory.

•  The term “9 3/4% notes” refers to our $100.0 million of 9 3/4% senior subordinated notes due 2003, which we refinanced with a portion of the proceeds from the related financing transactions.

•  The phrase “related financing transactions” refers to: (a) the offering of the outstanding notes, (b) our entering into senior secured credit facilities consisting of a $100.0 million new senior secured revolving credit facility and a $40.0 million new senior secured mortgage loan facility, (c) the receipt of the requisite consents from the holders of our 9% senior subordinated notes due 2007 to allow for the redemption of our 9 3/4% notes, and (d) the application of the proceeds from these financings together with cash on hand to make the Yorktown acquisition, redeem our 9 3/4% notes, and pay related transaction fees and expenses.

•  The term “EBITDA” refers to earnings before interest, taxes, depreciation, amortization and certain non-cash charges, and is a measure we use for internal analysis and in presentations to analysts, investors and lenders. The calculation of EBITDA is not based on generally accepted accounting principles in the United States, or “U.S. GAAP,” and you should not consider it as an alternative to net earnings or cash flows from operating activities (which are determined in accordance with U.S. GAAP) as an indicator of operating performance or as a measure of liquidity. EBITDA may not be comparable to similarly titled measures used by other entities.

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•  The term “adjusted EBITDA” on a pro forma basis means combined EBITDA of Giant and the Yorktown refinery plus unusual expenses resulting from a 2001 fire at the Yorktown refinery plus estimated savings in corporate overhead allocation.

•  The phrase “Four Corners” or “Four Corners area” refers to the area of the southwestern United States where New Mexico, Arizona, Colorado and Utah join. The phrase “Four Corners refineries” refers to our Ciniza and Bloomfield refineries in New Mexico.

•  The term “refining capacity” refers to the amount of crude oil and natural gas liquids, or “NGLs”, throughput our facilities can refine on a stream-day basis.

TRADEMARKS

      Mustang^TM is our trademark. Conoco® is a trademark of Conoco, Inc.

      The PORTAL Market® is a registered trademark of The Nasdaq Stock Market, Inc.®

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FORWARD-LOOKING STATEMENTS

      This prospectus includes and incorporates by reference forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act. These statements are included throughout this prospectus, including in the sections entitled “Prospectus Summary,” “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and “Business.” These statements relate to projections of capital expenditures and other financial items. These statements also relate to our business strategy, goals and expectations concerning our market position, future operations, acquisitions, margins, profitability, liquidity and capital resources. We have used the words “believe,” “expect,” “anticipate,” “estimate,” “could,” “plan,” “intend,” “may,” “project,” “predict,” “will” and similar terms and phrases to identify forward-looking statements in this prospectus and in the documents incorporated by reference in this prospectus.

      Although we believe the assumptions upon which these forward-looking statements are based are reasonable, any of these assumptions could prove to be inaccurate, and the forward-looking statements based on these assumptions could be incorrect. While we have made these forward-looking statements in good faith and they reflect our current judgment regarding such matters, actual results could vary materially from the forward-looking statements. Accordingly, these forward-looking statements are qualified in their entirety by reference to the factors described in “Risk Factors” as well as to other factors in this prospectus.

      Actual results and trends in the future may differ materially depending on a variety of factors. These factors include the following:

•  availability of Four Corners sweet crude oil and the adequacy and costs of raw material supplies generally;

•  our ability to negotiate new crude oil supply contracts;

•  our ability to successfully integrate the Yorktown refinery and manage the liabilities, including environmental liabilities, that we assumed in the Yorktown acquisition;

•  competitive pressures from existing competitors and new entrants, including the potential effects of various pipeline projects;

•  volatility in the difference, or spread, between market prices for refined products and crude oil and other feedstocks;

•  state or federal legislation or regulation, or findings by a regulator with respect to existing operations, including the impact of government-mandated specifications for gasoline and diesel fuel on our operations;

•  unplanned or extended shutdowns in refinery operations;

•  general economic factors affecting our operations, markets, products, services and prices;

•  unexpected environmental remediation costs; and

•  weather conditions affecting our operations or the areas in which our products are refined or marketed.

      All subsequent written and oral forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the previous statements. Forward-looking statements we make represent our judgment on the dates such statements are made. We assume no obligation to update any information contained in this prospectus or to publicly release the results of any revisions to any forward-looking statements to reflect events or circumstances that occur, or that we become aware of, after the date of this prospectus.

v

PROSPECTUS SUMMARY

      The following summary is qualified in its entirety by, and you should read it in conjunction with, the more detailed information and financial statements and notes thereto appearing elsewhere or incorporated in this prospectus. You should carefully consider the matters discussed under the caption “Risk Factors.” Unless otherwise noted or the context otherwise requires, the discussion presented in this prospectus gives effect to the Yorktown acquisition and the related financing transactions.

Our Company

Overview

      We are the only integrated refiner and marketer of petroleum products with refineries in the Four Corners area. As a result of our acquisition of the Yorktown refinery, we also own the only refinery in Virginia, and we have expanded our market presence and more than doubled our refining capacity to approximately 104,500 barrels per day (“bpd”) from approximately 42,600 bpd. In addition, we own and operate 145 service stations with convenience stores or kiosks, a travel center and a wholesale petroleum products distributor. Our operations are divided into three strategic business units:

•  Refining Group. Our Refining Group owns and operates the Ciniza and Bloomfield refineries in New Mexico and the Yorktown refinery in Virginia. In addition to these three refineries, our Refining Group owns and operates a crude oil gathering pipeline system in New Mexico that services our Four Corners refineries, two finished products distribution terminals and a fleet of 81 crude oil and finished product truck transports.

•  Retail Group. Our Retail Group owns and operates 145 retail service stations with convenience stores or kiosks in New Mexico, Arizona and Colorado operating under brand names including Giant, Conoco® and Mustang^TM. We also own and operate a travel center in New Mexico that is located adjacent to our Ciniza refinery. In 2001, approximately 35% of our Four Corners refineries’ production was sold from our service stations and our travel center.

•  Phoenix Fuel. We believe Phoenix Fuel is the largest wholesale petroleum products distributor in Arizona. It serves the mining, construction, utility, manufacturing, aviation and agriculture industries. As part of our Phoenix Fuel operations, we own and operate five lubricant and bulk petroleum distribution plants, 19 cardlock (unmanned fleet fueling) operations, a bulk lubricant terminal facility, and a fleet of 64 finished product and lubricant delivery trucks.

      On May 14, 2002, we acquired the Yorktown refinery from BP Corporation North America Inc. and BP Products North America Inc., or “BP,” for $127.5 million, plus the value of associated inventory at closing, or $65.2 million, the assumption of certain liabilities, and an earn-out. The Yorktown refinery is the only refinery in Virginia and services a geographic region from South Carolina to the New York Harbor. The Yorktown acquisition increased our number of refineries from two to three and more than doubled our total refining capacity from approximately 42,600 bpd to approximately 104,500 bpd. Pro forma for the Yorktown acquisition, we would have had consolidated net revenues of $1,664.8 million, net earnings of $16.9 million, EBITDA of $127.3 million and adjusted EBITDA of $145.3 million for the year ended December 31, 2001.

Refining Group

      We operate three refineries, each of which sells into markets where we can supply products at a transportation cost advantage. These three refineries have a total refining capacity of approximately 104,500 bpd, detailed as follows:

•  The Yorktown refinery, located in Yorktown, Virginia — 61,900 bpd;

•  The Ciniza refinery, located in Gallup, New Mexico — 26,000 bpd; and

•  The Bloomfield refinery, located in Farmington, New Mexico — 16,600 bpd.

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      Our Ciniza and Bloomfield refineries are the only refineries in the Four Corners area. These refineries currently source crude oil from locally available supplies. Constrained pipeline capacity into Albuquerque and transportation costs of delivering refined products into the Four Corners area provide us with a competitive advantage in this market. We historically have generated higher refining margins than Gulf Coast refineries. From 1997 to 2001, our average annual refining margins have ranged from a low of $4.83 per barrel in 1998 to a high of $9.69 per barrel in 2001, with a weighted average of $6.99 per barrel. During the same period, annual average Gulf Coast refining margins have ranged from a low of $1.82 per barrel in 1999 to a high of $4.44 per barrel in 2001. Although the Ciniza and Bloomfield refineries are 120 miles apart, we operate them in an integrated fashion. Consolidating the environmental, safety, marketing, supply, purchasing, engineering and accounting functions has led to efficiency gains and cost reductions. In 2001, our Ciniza and Bloomfield refineries yielded 91% of high-value products, including gasoline and diesel fuel, from each barrel of refinery intake. During 2001, we sold approximately 7.7 million barrels of gasoline and 3.1 million barrels of diesel fuel from our Ciniza and Bloomfield refineries.

      The Yorktown refinery services a geographic region stretching from South Carolina to the New York Harbor. It lies along the York River in York County, Virginia, adjacent to its own deep-water port and close to the Norfolk military complex and Hampton Roads shipyards. The Yorktown refinery’s sales historically have been concentrated in Eastern Virginia and Maryland, where more than 50% of its gasoline production has been sold. We believe the location of the refinery allows it to realize as much as $1.25 per barrel in transportation cost advantages compared with Gulf Coast refineries who sell into this mid-Atlantic region. Under our ownership, we intend to increase sales into the mid-Atlantic region to take advantage of local, higher-margin sales. The Yorktown refinery currently sources crude oil from Canada, the North Sea, West Africa, South America and the Far East.

      At the closing of the Yorktown acquisition, we entered into agreements that provide for 100% of the supply of crude oil to, and 100% of the offtake of production, including propane and butane at prices based on an index, from, the Yorktown refinery. These agreements include: (a) transitional feedstock supply agreements, with terms ranging from six months to one year, by which BP will supply 100% of the refinery’s crude oil and other raw material needs; (b) a one-year contract with BP under which the Yorktown refinery will continue to supply BP’s branded product in the local area and in Salisbury, Maryland; (c) the assumption of existing contracts with Exxon Mobil, Chevron, Citgo, Southern States, and Sunoco to supply them product on a wholesale basis; and (d) transitional contracts, with terms ranging from six months to one year, requiring BP to purchase the balance of production from the Yorktown refinery, estimated to be 33,400 bpd. Given market dynamics and conversations we have had with current and potential new customers, we believe there is sufficient demand to purchase all of the Yorktown refinery’s production once the transitional offtake agreements have expired.

      The Yorktown refinery has a Solomon complexity rating of 11.0 and in 2001 yielded 88% of high-value products from each barrel of refinery intake. The Yorktown refinery can manufacture both conventional and reformulated gasoline, as well as low- and high-sulfur diesel. It is capable of processing heavy, high acid crude oils, as well as light and heavy sweet crude oils. During 2001, the Yorktown refinery, which was operated to maximize the refinery’s contribution to BP’s global system, sold approximately 11.6 million barrels of gasoline, 7.1 million barrels of diesel fuel and No. 2 fuel oil, 870,000 barrels of liquid petroleum gases and 222,806 short tons of petroleum coke. We expect, however, to operate this refinery in a way that maximizes profitability, which may include a different mix of finished products.

      Pro forma for the Yorktown acquisition, our Refining Group would have had net revenue of $1,146.3 million, operating income of $92.2 million, including loss on sale or disposition of assets, EBITDA before corporate overhead of $121.9 million and adjusted EBITDA before corporate overhead of $139.9 million for the year ended December 31, 2001.

Retail Group

      We own and operate 145 service stations with convenience stores or kiosks. These service stations are located in New Mexico, Arizona and Colorado, where we have been active in retail marketing for more than

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20 years. Our retail operations provide a market outlet for a significant portion of our Ciniza and Bloomfield refineries’ production. In 2001, our service stations and our travel center sold approximately 35% of our combined total production from our Ciniza and Bloomfield refineries. We regularly invest to upgrade our service station network, including signage upgrades and other enhancements. During 2000 our service stations averaged fuel margins of 16.8 cents per gallon compared to a national average of 13.3 cents per gallon. In addition, our service stations generated fuel gross profit dollars per store of $219,772 compared to a national average of $168,000.

      Our convenience stores sell items such as general merchandise, tobacco products, alcoholic and nonalcoholic beverages, fast food, health and beauty aids, and automotive products, and most of our locations offer ATM services. These stores offer a mix of our own branded food service/ deli items and certain of the stores offer nationally franchised products such as Blimpie, Taco Bell and A&W. Our kiosks offer limited merchandise, consisting primarily of tobacco products, but also including candy and other snacks and some automotive products. During 2000 our convenience stores and kiosks exceeded national industry averages in several performance categories, including merchandise gross margin and merchandise sales per store. Our same store merchandise sales volume increased by a compound annual growth rate of approximately 11% over the last three years.

      We attribute our strong performance to our focus on site location, access/ design, automation, attractive merchandising and an emphasis on value-added customer service. We have a strong commitment to customer service, and believe we retain the loyalty of many of our customers through our use of promotional items and offerings of free air and water.

      We also own and operate a travel center adjacent to our Ciniza refinery that provides a direct market for a portion of this refinery’s diesel production, which we can sell at virtually no incremental transportation cost. During 2001, we sold approximately 27% of the Ciniza refinery’s diesel production at our travel center.

      Our Retail Group had net revenues of $390.4 million, operating income of $2.2 million, including loss on sale or disposition of assets, and EBITDA before corporate overhead of $17.9 million for the year ended December 31, 2001.

Phoenix Fuel

      Phoenix Fuel, we believe, is the largest wholesale petroleum products distributor in Arizona. Phoenix Fuel markets gasoline, diesel fuel, jet fuel, kerosene, motor oil, hydraulic oil, gear oil, cutting oil, grease, and various chemicals and solvents. Phoenix Fuel operates five lubricant and bulk petroleum distribution plants, 19 cardlock locations, a bulk lubricant terminal facility and a fleet of 32 finished product transports, 21 finished product tankwagons and 11 lubricant delivery trucks. Phoenix Fuel’s operations are located throughout Arizona, and it markets primarily in Arizona and also in Nevada, New Mexico and Texas. During 2001, Phoenix Fuel sold 394.2 million gallons of gasoline and diesel fuel. Phoenix Fuel offers its customers a variety of services, including fuel management systems, tank level monitoring, and automated dispatch. Phoenix Fuel also is a large purchaser of refined products supplied into the Phoenix and Tucson markets. Phoenix Fuel markets under the trade names Phoenix Fuel, Firebird Fuel, Tucson Fuel and Mesa Fuel.

      Phoenix Fuel had net revenues of $391.2 million, operating income of $4.8 million and EBITDA before corporate overhead of $7.4 million for the year ended December 31, 2001.

Strategy and Competitive Strengths

      Our strategy is to continue to profitably operate our refining, retail and Phoenix Fuel business units. Our immediate strategic focus is to:

•  efficiently integrate the Yorktown refinery into our existing operations while maximizing the profitability of all of our refineries;

•  work with producers in the Four Corners area to augment crude oil supply;

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•  continue to maximize the profitability of our Retail Group by increasing sales of high-margin merchandise and continuing to reduce costs;

•  continue to maximize the profitability of Phoenix Fuel by increasing wholesale fuel volumes, expanding service offerings and broadening its wholesale customer base;

•  increase our cash flow by continuing to reduce operating expenses and eliminating non-essential capital expenditures; and

•  rationalize our asset base by selling non-strategic and underperforming assets and selectively pursuing acquisitions.

      We believe we are well positioned to execute our strategy as a result of the following factors:

      Higher Refining Margins Due to Operations in Attractive Markets. Each of the Ciniza, Bloomfield and Yorktown refineries serves market areas where there are limited alternative refining operations. Each refinery therefore has a competitive advantage due to the transportation costs that others would incur to bring products into our markets. The Yorktown refinery also has the ability to opportunistically sell product into the New York Harbor market, a market where demand has typically exceeded local supply and where margins are typically higher than Gulf Coast margins.

      In the Four Corners market, we face limited competition due to constrained pipeline capacity for refined products into Albuquerque and the transportation costs of delivering additional products to our markets. These economic barriers to entry have contributed to historically higher refining margins for us as compared to margins experienced by Gulf Coast refiners. In 2001, refining margins for our Ciniza and Bloomfield refineries averaged $9.69 per barrel, as compared to the average margin of $4.44 per barrel for Gulf Coast refiners.

      The Yorktown refinery also benefits from transportation cost advantages over refined products shipped from the Gulf Coast into the mid-Atlantic region. As the Yorktown refinery receives and transports products by barge from its dedicated docks, it has greater flexibility to receive and move product than its competitors who rely on a pipeline system. In 2001, on a pro forma basis, the refining margins at the Yorktown refinery were $4.70 per barrel.

      Realization of Benefits of the Yorktown Acquisition. The Yorktown acquisition has more than doubled our refining capacity, to approximately 104,500 bpd, and diversified our geographical presence. Under BP’s ownership, the Yorktown refinery was operated as a part of BP’s global refining, production and distribution system. As such, we believe that the refinery was not always operated to maximize the profitability of the refinery, but rather the refinery’s contribution to BP’s overall operations. Our strategy at the Yorktown refinery will focus on maximizing its profitability, and accordingly, we believe we can operate the Yorktown refinery more profitably than it was operated historically.

      We intend to increase the Yorktown refinery’s profitability by:

•  directing refined products to markets that offer us the highest margin and by optimally sourcing crude oil;

•  increasing local distribution;

•  processing lower grade crude oil, which should produce higher margins;

•  delivering products on short notice to east-coast terminals to take advantage of shortages; and

•  exchanging products to and from the Gulf Coast, the New York Harbor, and the East Coast markets and from our Four Corners refineries based on local demand.

      Diversified Revenue Streams Through Broad Product and Services Offerings. In addition to our refinery operations, we offer a wide range of products and services through our 145 retail service stations with convenience stores or kiosks, our Phoenix Fuel petroleum products distributor, and our travel center. We believe demand for certain of these products and services lessens our exposure to fluctuations in profitability

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due to changes in refining margins and to adverse economic cycles. Our convenience store operations, in particular, provide relatively high and stable merchandise margins of approximately 28% for each of the last three years, and our merchandise sales volume, based on same store sales, has increased by a compound annual rate of 11% over the last three years. In addition, the Yorktown acquisition further diversified our revenue base as it reduced our dependence on the Four Corners area.

      Favorable Refinery Yields. With the high-quality feedstocks available in the Four Corners area, we are able to achieve refinery yields at our Ciniza and Bloomfield refineries that are comparable to those achieved by some larger, more complex refineries located outside of this area. In addition, the Yorktown refinery is a complex refinery with the ability to process many types of lower-grade crude oils. All three refineries are equipped with fluid catalytic cracking, naphtha hydrotreating, reforming and liquefied petroleum gas recovery units, as well as diesel hydrotreating and sulfur recovery units to manufacture currently required low sulfur diesel fuels. During 2001, these processing configurations enabled our Four Corners refineries to yield 91% of high-value products, including gasoline and diesel fuel, from each barrel of refinery intake, and the Yorktown refinery to yield 88% of high-value products from each barrel of refinery intake. This compares with the 2001 industry average yield of 86% of high-value products.

      Integrated Marketing Network. We have improved our distribution of refined products from our Four Corners refineries through our retail network and by entering into longer-term supply arrangements with existing wholesale and exchange customers. During 2001, we sold approximately 7.7 million barrels of gasoline and 3.1 million barrels of diesel fuel from our Four Corners refineries. Our service stations and our travel center sold approximately 40% of these gasoline sales and 22% of these diesel sales in 2001, or approximately 35% of our Four Corners refineries’ output.

      Experienced Management Team. We have a highly experienced senior management team, with our executive officers having an average of more than 22 years of experience in the energy industry. Our senior management team has significantly improved our operating and financial performance over the last five years and has led us through several industry cycles. In addition, this team has successfully integrated several substantial acquisitions, including the acquisitions of the Bloomfield refinery in October 1995, 96 retail service stations from Thriftway in May 1997, and Phoenix Fuel in June 1997. Fredric L. Holliger had served as Executive Vice President and Chief Operating Officer from October 1989, the date of our inception, to March 2002, when he was named our Chairman of the Board and Chief Executive Officer.

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Recent Developments

The Yorktown Acquisition

      On May 14, 2002, we acquired the 61,900 bpd Yorktown refinery from BP for $127.5 million, plus the value of inventory at closing, or $65.2 million, the assumption of certain liabilities, and an earn-out.

      As part of the Yorktown acquisition, we agreed to pay to BP, beginning in 2003 and concluding at the end of 2005, earn-out payments up to a maximum of $25.0 million when the average monthly spreads for regular reformulated gasoline or No. 2 distillate over West Texas Intermediate, or “WTI,” equivalent light crude oil on the New York Mercantile Exchange, or the “MERC spreads,” exceed $5.50 or $4.00 per barrel, respectively. The MERC spreads are correlated with historical Yorktown refinery margins. The earn-out payment will equal the MERC spreads multiplied by a fixed volume of 10,000 bpd each (approximately one-third of capacity of the Yorktown refinery). If the earn-out is triggered, we expect to benefit from the improved margins on any volumes in excess of 10,000 bpd, provided that the MERC spreads are not excessively volatile. The average monthly MERC spreads for June 2002 were $6.48 and $1.68 per barrel for reformulated gasoline and No. 2 distillate, respectively.

The Related Financing Transactions

      In conjunction with the Yorktown acquisition, we completed the following transactions.

      New Senior Secured Revolving Credit Facility. We entered into a new three-year senior secured revolving credit facility in the amount of $100.0 million. Our obligations under this facility have been guaranteed by each of our subsidiaries and secured by a security interest in our personal property and the personal property of our subsidiaries, including accounts receivable, inventory, contracts, chattel paper, trademarks, copyrights, patents, license rights, deposit and investment accounts and general intangibles, but excluding most fixed assets.

      New Senior Secured Mortgage Loan Facility. We entered into a new three-year senior secured mortgage loan facility in the amount of $40.0 million. The loan has been secured by the Yorktown refinery property, fixtures and equipment, excluding inventory, accounts receivable and other Yorktown refinery assets securing the new senior secured revolving credit facility. We and our subsidiaries have guaranteed the loan.

      Notes Offering. On May 14, 2002, we issued $200.0 million in aggregate principal amount of outstanding notes in a private placement under Rule 144A under the Securities Act. We used the proceeds from the sale of the outstanding notes, together with cash on hand and initial borrowings under our new senior secured credit facilities, to fund our acquisition of the Yorktown refinery and associated inventory, to redeem all $100.0 million of our 9 3/4% notes, and to pay related transaction fees and expenses.

      The outstanding notes are fully and unconditionally guaranteed, jointly and severally, on a senior subordinated basis, by each of our existing and future domestic restricted subsidiaries. The outstanding notes and the guarantees are unsecured senior subordinated obligations of Giant and each guarantor, respectively. Accordingly, they will rank:

•  behind all existing and future senior debt of Giant and each guarantor, respectively, including our new senior secured credit facilities;

•  equally with all existing and future unsecured senior subordinated debt of Giant and each guarantor, respectively, including our $150.0 million principal amount of 9% senior subordinated notes due 2007; and

•  ahead of any future debt of Giant and each guarantor, respectively, that expressly provides that it is subordinated to the outstanding notes.

      Redemption of 9 3/4 Notes. On June 28, 2002, we redeemed all $100.0 million of our 9 3/4% notes at par plus accrued interest. To permit this redemption, we obtained a consent from the holders of our 9% senior subordinated notes due 2007.

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Giant

      For our first quarter ended March 31, 2002, we reported net revenues of $188.4 million, net earnings of $0.1 million and EBITDA of $11.6 million. This compares to net revenues of $251.2 million, net earnings of $0.9 million and EBITDA of $15.3 million for the first quarter ended March 31, 2001. The revenue decrease primarily resulted from lower average selling prices of refined products in our Refining Group, lower wholesale prices, and declines in fuel gallons sold by our Retail Group and Phoenix Fuel business units. The net earnings and EBITDA decrease was primarily due to lower refining margins in our Refining Group and lower fuel margins in our Retail Group.

      Total feedstock throughput for the first quarter ended March 31, 2002 increased to 33,785 bpd from 33,417 bpd for the same period last year, while our refining margin decreased to $7.36 per barrel from $8.23 per barrel for the same period last year.

Yorktown

      On April 12, 2002, the Yorktown refinery suspended operations for a portion of its operating units due to an unplanned power interruption. The cause of this power interruption was determined to be minor in nature and has been repaired. All affected units have been inspected and all of the Yorktown refinery’s operating units, including those that were in planned, scheduled turnaround, have been restarted at various times since the power interruption.

      For the first quarter ended March 31, 2002, the Yorktown refinery reported net revenues of $133.3 million and a net loss of $6.8 million. This compares to net revenues of $166.7 million and net earnings of $2.6 million for the first quarter ended March 31, 2001. The net earnings decrease was primarily due to lower gross margins, which decreased to $6.8 million for the first quarter ended March 31, 2002, compared to $24.7 million for the same period last year.

      Operating data for the Yorktown refinery is provided below. For the quarter ended March 31, 2002, total feedstock throughput was 55,973 bpd, consisting of 94.7% crude oil, and residual feedstocks, and 5.3% intermediates. This compares to the quarter ended March 31, 2001 with total feedstock throughput of 55,142 bpd, consisting of 97.6% crude oil and residual feedstocks, and 2.4% intermediates.

      Total product volume for the quarter ended March 31, 2002 was 56,603 bpd, consisting of 55.9% gasoline, 32.8% diesel fuel and No. 2 fuel oil and 11.3% other. This compares to total product volume for the quarter ended March 31, 2001 of 57,436 bpd, consisting of 44.2% gasoline, 34.3% diesel fuel and No. 2 fuel oil and 21.5% other.

      We were incorporated in Delaware in 1989. Our principal executive offices are located at 23733 North Scottsdale Road, Scottsdale, Arizona 85255, and our telephone number is (480) 585-8888.

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The Offering

      On May 14, 2002, we completed an offering of $200.0 million in aggregate principal amount of our outstanding notes. The offering was exempt from registration under the Securities Act. We used the proceeds from the sale of the outstanding notes, together with cash on hand and initial borrowings under our new senior secured credit facilities, to fund our acquisition of the Yorktown refinery and associated inventory, to redeem all $100.0 million of our 9 3/4% notes, and to pay related transaction fees and expenses.

Outstanding Notes	We sold the outstanding notes to Banc of America Securities LLC, BNP Paribas Securities Corp., and Fleet Securities, Inc., or the “initial purchasers,” on May 14, 2002. The initial purchasers subsequently resold the outstanding notes to qualified institutional buyers pursuant to Rule 144A under the Securities Act and to non-U.S. persons outside the United States in reliance on Regulation S under the Securities Act.
Registration Rights Agreement	In connection with the sale of the outstanding notes, we have agreed to:
	• file a registration statement within 60 days after the issue date of the outstanding notes enabling the holders of the outstanding notes to exchange the notes for publicly registered exchange notes with substantially identical terms;
	• use our best efforts to cause the registration statement to become effective within 150 days after the issue date of the outstanding notes;
	• consummate the exchange offer within 30 business days after the effective date of the registration statement for the exchange notes;
	• file a shelf registration statement for the resale of the outstanding notes if we cannot effect an exchange offer and in certain other circumstances;
	• use our best efforts to cause the shelf registration statement to be declared effective; and
	• keep the shelf registration statement effective until the time when the notes can be sold pursuant to Rule 144 under the Securities Act.
	If we do not comply with certain of our obligations under the registration rights agreement, we have agreed to pay liquidated damages. The exchange offer is being made pursuant to the registration rights agreement and is intended to satisfy the rights granted under the registration rights agreement, which rights generally terminate upon completion of the exchange offer. The outstanding notes will be eligible for trading in The PORTAL Market®. See “Description of the Notes — Registration Rights; Liquidated Damages.”

The Exchange Offer

Securities Offered $200.0 million aggregate principal amount of 11% senior subordinated notes due 2012.

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Exchange Offer	We are offering to exchange $1,000 principal amount of our 11% senior subordinated notes due 2012, which have been registered under the Securities Act, for each $1,000 principal amount of our currently outstanding 11% senior subordinated notes due 2012. We will accept any and all outstanding notes validly tendered and not withdrawn prior to 5:00 p.m., New York City time, on                     , 2002. Holders may tender some or all of their outstanding notes pursuant to the exchange offer. However, notes may be tendered only in integral multiples of $1,000 in principal amount. The form and terms of the exchange notes are the same as the form and terms of the outstanding notes except that:
	• the exchange notes have been registered under the federal securities laws and will not bear any legend restricting their transfer;
	• the exchange notes bear a different CUSIP number than the outstanding notes; and
	• the holders of the exchange notes will not be entitled to certain rights under the registration rights agreement, including the provisions for an increase in the interest rate on the outstanding notes in some circumstances relating to the timing of the exchange offer.
	See “The Exchange Offer.”
Transferability of Exchange Notes	We believe you will be able to freely transfer the exchange notes without registration or any prospectus delivery requirement so long as you may accurately make the representations listed under “The Exchange Offer — Transferability of the Exchange Notes.” If you are a broker-dealer that acquired outstanding notes as a result of market-making or other trading activities, you must deliver a prospectus in connection with any resale of the exchange notes. See “Plan of Distribution.”
Expiration Date	The exchange offer will expire at 5:00 p.m., New York City time, on                     , 2002, which is the expiration date, unless we decide to extend it.
Conditions to the Exchange Offer	The exchange offer is subject to certain customary conditions, some of which we may waive.
Procedures for Tendering Outstanding Notes	If you wish to accept the exchange offer, you must complete, sign and date the letter of transmittal, or a facsimile of the letter of transmittal, in accordance with the instructions contained in this prospectus and in the letter of transmittal. You should then mail or otherwise deliver the letter of transmittal, or facsimile, together with the outstanding notes to be exchanged and any other required documentation, to the exchange agent at the address set forth in this prospectus and in the letter of transmittal.

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	By executing the letter of transmittal, you will represent to us that, among other things:
	• you, or the person or entity receiving the related exchange notes, are acquiring the exchange notes in the ordinary course of business;
	• neither you nor any person or entity receiving the related exchange notes is engaging in or intends to engage in a distribution of the exchange notes within the meaning of the federal securities laws;
	• neither you nor any person or entity receiving the related exchange notes has an arrangement or understanding with any person or entity to participate in any distribution of the exchange notes;
	• neither you nor any person or entity receiving the related exchange notes is an “affiliate” of Giant Industries, Inc. or the subsidiary guarantors, as the term “affiliate” is defined under Rule 405 of the Securities Act; and
	• you are not acting on behalf of any person or entity that could not truthfully make these statements.
	See “The Exchange Offer — Procedures for Tendering Outstanding Notes” and “Plan of Distribution.”
Effect of Not Tendering	Any outstanding notes that are not tendered or that are tendered but not accepted will remain subject to the restrictions on transfer. Because the outstanding notes have not been registered under the federal securities laws, they bear a legend restricting their transfer absent registration or the availability of a specific exemption from registration. Upon the completion of the exchange offer, we will have no further obligations, except under limited circumstances, to provide for registration of the outstanding notes under the federal securities laws. See “The Exchange Offer — Effect of Not Tendering.”
Interest on the Exchange Notes and the Outstanding Notes	The exchange notes will bear interest from the most recent interest payment date to which interest has been paid on the notes or, if no interest has been paid, from May 14, 2002. Interest on the outstanding notes accepted for exchange will cease to accrue upon the issuance of the exchange notes.
Withdrawal Rights	You may withdraw tenders at any time prior to 5:00 p.m., New York City time, on the expiration date pursuant to the procedures described under “The Exchange Offer — Withdrawals of Tenders.”
Federal Tax Consequences	There will be no federal income tax consequences to you if you exchange your outstanding notes for exchange notes in the exchange offer. See “Certain Federal Income Tax Consequences.”
Use of Proceeds	We will not receive any proceeds from the issuance of exchange notes pursuant to the exchange offer.
Exchange Agent	The Bank of New York.

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The Exchange Notes

      The summary below describes the principal terms of the exchange notes. The financial terms and covenants of the exchange notes are the same as the outstanding notes. Some of the terms and conditions described below are subject to important limitations and exceptions. The “Description of the Notes” section of this prospectus contains a more detailed description of the terms and conditions of the exchange notes.

Issuer	Giant Industries, Inc.
Securities Offered	$200.0 million in principal amount of 11% senior subordinated notes due 2012.
Maturity Date	May 15, 2012.
Interest	Annual Rate: 11%
	Payment frequency: every 6 months on May 15 and November 15.
	First payment: November 15, 2002.
Guarantees	The exchange notes will be fully and unconditionally guaranteed, jointly and severally, on a senior subordinated basis, by each of our existing and future domestic restricted subsidiaries.
Ranking	The exchange notes and the guarantees will be unsecured senior subordinated obligations of Giant and each guarantor, respectively. Accordingly, they will rank:
	• behind all existing and future senior debt of Giant and each guarantor, respectively, including our new senior secured credit facilities;
	• equally with all existing and future unsecured senior subordinated debt of Giant and each guarantor, respectively, including our $150.0 million principal amount of 9% senior subordinated notes due 2007; and
	• ahead of any future debt of Giant and each guarantor, respectively, that expressly provides that it is subordinated to the exchange notes.
	Assuming we had completed the Yorktown acquisition and the related financing transactions on March 31, 2002, we would have had $435.5 million of indebtedness outstanding, $91.4 million of which would have been senior debt.
Optional Redemption	We may redeem the exchange notes, in whole or in part, on or after May 15, 2007, at the redemption prices described in this prospectus, plus accrued and unpaid interest. At any time before May 15, 2007, we may redeem the exchange notes, in whole or in part, at a redemption price equal to 100% of their principal amount plus a make-whole premium, together with accrued interest to the redemption date.
	In addition, on or before May 15, 2005, we may redeem up to 35% of the aggregate principal amount of the exchange notes at the redemption price described in this prospectus with the net cash proceeds from certain equity offerings. We may only make such redemptions, however, if at least 65% of the aggregate principal amount of the exchange notes remains outstanding after each such

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	redemption. See “Description of the Exchange Notes — Optional Redemption.”
Certain Covenants	The covenants contained in our indenture, among other things, limit our ability, and the ability of our restricted subsidiaries, to:
	• borrow money or sell preferred stock;
	• create liens;
	• pay dividends, or redeem or repurchase our stock or prepay indebtedness that is pari passu with, or subordinated in right of payment to, the exchange notes;
	• make certain types of investments;
	• sell stock in our restricted subsidiaries;
	• restrict dividends and other payments from our subsidiaries to us;
	• enter into transactions with affiliates; and
	• sell assets or merge with other companies.
	These covenants are subject to a number of important exceptions, limitations and qualifications that are described under “Description of the Exchange Notes.”
Absence of a Public Market for the Exchange Notes	We do not intend to list the exchange notes on any securities exchange.

      You should carefully consider all of the information contained in this prospectus, including the discussion under the caption “Risk Factors” regarding specific risks involved in an investment in the notes.

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Summary Historical and Unaudited Pro Forma Financial and Other Data

      The following table summarizes our financial information and sets forth certain pro forma information after giving effect to the Yorktown acquisition and the related financing transactions. The summary historical statement of earnings and balance sheet data presented below for each of the years ended December 31, 2001, 2000, 1999, 1998 and 1997 has been derived from our audited financial statements. The historical information for the three months ended March 31, 2002 and 2001 is unaudited. The unaudited information is taken from unaudited financial statements that include all adjustments, which are only of a normal recurring nature, which we consider necessary for a fair presentation of the results of operations for these periods. Operating results for the three months ended March 31, 2002 are not necessarily indicative of the results that may be expected for the entire year ending December 31, 2002.

      The pro forma statement of earnings data for the year ended December 31, 2001 and the three months ended March 31, 2002 gives effect to the Yorktown acquisition and the related financing transactions, as if they had occurred on January 1, 2001. The pro forma balance sheet data as of March 31, 2002 gives effect to the Yorktown acquisition and the related financing transactions, as if they had occurred on March 31, 2002. The unaudited pro forma information set forth below is not necessarily indicative of the results that actually would have been achieved had the Yorktown acquisition and the related financing transactions been consummated on January 1, 2001 or March 31, 2002, as the case may be, or that may be achieved in the future. You should read this information in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” the pro forma financial statements and related notes thereto, our historical financial statements and related notes thereto, and the historical financial statements of the Yorktown refinery business and related notes thereto included in this prospectus.

	Year Ended December 31,																		Three Months Ended March 31,
	Pro Forma			Historical															Pro Forma			Historical
	Combined																		Combined
	2001			2001			2000			1999			1998			1997			2002			2002			2001
	(dollars in thousands)
Statement of Earnings Data:
Net revenues:
Refining Group	$	1,146,326		$	450,226		$	518,172		$	388,300		$	312,632		$	428,688		$	217,418		$	82,718		$	111,190
Retail Group		390,379			390,379			421,339			338,565			273,651			216,858			76,215			76,215			93,543
Phoenix Fuel		391,172			391,172			443,224			272,685			196,511			136,543			75,784			75,784			109,608
Other		244			244			367			677			528			427			50			50			72
Intersegment(a)		(263,342	)		(263,342	)		(308,740	)		(217,544	)		(140,818	)		(125,238	)		(46,371	)		(46,371	)		(63,201	)
Consolidated total net revenues		1,664,779			968,679			1,074,362			782,683			642,504			657,278			323,096			188,396			251,212
Cost of products sold		1,327,014			738,514			859,001			568,005			464,936			487,748			268,339			141,839			200,502
Gross margin		337,765			230,165			215,361			214,678			177,568			169,530			54,757			46,557			50,710
Operating expenses		173,660			114,260			122,650			115,599			103,207			85,177			39,511			26,411			28,848
Depreciation and amortization		41,875			33,875			33,579			31,129			29,166			23,991			10,771			8,771			8,113
Selling, general and administrative expenses		40,064			27,864			25,373			28,166			25,288			19,256			7,997			5,197			6,583
Loss on the disposal/ write-down of assets		6,212			6,212			—			2,387			—			—			30			30			139
Allowance for related party note and interest receivable		5,409			5,409			—			—			—			—			—			—			—
Operating income (loss)		70,545			42,545			33,759			37,397			19,907			41,106			(3,552	)		6,148			7,027
Interest expense		(44,698	)		(24,098	)		(24,411	)		(23,417	)		(25,464	)		(18,139	)		(11,136	)		(6,003	)		(6,043	)
Interest and investment income		1,661			1,661			1,989			2,476			1,831			2,133			64			64			563
Earnings (loss) before income taxes		27,508			20,108			11,337			16,456			(3,726	)		25,100			(14,624	)		209			1,547
Provision (benefit) for income taxes		10,627			7,727			4,048			5,678			(1,509	)		9,806			(5,633	)		86			597
Net earnings (loss)	$	16,881		$	12,381		$	7,289		$	10,778		$	(2,217	)	$	15,294		$	(8,991	)	$	123		$	950

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	Year Ended December 31,																		Three Months Ended March 31,
	Pro Forma			Historical															Pro Forma			Historical
	Combined																		Combined
	2001			2001			2000			1999			1998			1997			2002			2002			2001
	(dollars in thousands, except per share and operating data)
Balance Sheet Data (at end of period):
Total assets		—		$	507,174		$	528,565		$	546,799		$	527,414		$	535,371		$	714,747		$	506,567		$	514,794
Total long-term debt (net of current portion)		—			256,749			258,009			258,272			282,484			275,557			435,441			256,741			257,997
Total stockholders’ equity		—			136,410			127,703			132,462			127,702			133,467			136,233			136,533			128,653
Other Data:
Net cash provided (used) by operating activities		69,256			65,256			29,492			59,799			26,892			31,292			16,038			(2,562	)		7,777
Capital expenditures		61,256			57,056			22,455			46,361			60,320			35,752			3,432			2,332			2,222
EBITDA(b)		127,343			91,343			67,338			63,805			57,464			67,982			3,949			11,648			15,279
Adjusted EBITDA(c)		145,343																		4,449
Ratio of earnings to fixed charges(d)		1.57	x		1.73	x		1.39	x		1.57	x		0.86	x		2.23	x		—			1.03	x		1.22	x
Operating Data(e):
Refining Group:
Crude oil/ NGL/residual feedstock throughput (bpd)		88,645			33,167			35,359			38,360			38,158			40,183			89,758			33,785			33,417
Refinery sourced sales barrels (bpd)		94,685			32,025			34,287			37,368			37,898			39,037			87,764			31,161			30,651
Average crude oil costs ($/bbl)		n/a		$	25.00		$	29.26		$	17.64		$	14.29		$	20.60			n/a		$	18.90		$	27.90
Refining margins ($/bbl)	$	6.39		$	9.69		$	7.63		$	6.89		$	4.83		$	6.39		$	3.65		$	7.36		$	8.23
Retail Group:
Fuel gallons sold (in thousands)		212,116			212,116			234,823			239,864			209,325			144,653			48,237			48,237			51,358
Fuel margins ($/gal)	$	0.1618		$	0.1618		$	0.1603		$	0.1717		$	0.1950		$	0.1990		$	0.1307		$	0.1307		$	0.1515
Merchandise sales	$	144,531		$	144,531		$	138,544		$	118,894		$	102,827		$	74,983		$	32,837		$	32,837		$	32,826
Merchandise margins		28.7	%		28.7	%		29.0	%		28.9	%		31.0	%		31.0	%		27.7	%		27.7	%		30.2	%
Number of operating units at end of period(f)		151			151			180			173			167			149			150			150			171
Phoenix Fuel:
Fuel gallons sold (in thousands)		394,158			394,158			424,290			351,949			314,763			172,121			92,471			92,471			104,920
Fuel margins ($/gal)	$	0.0498		$	0.0498		$	0.0524		$	0.0644		$	0.0670		$	0.0750		$	0.0520		$	0.0520		$	0.0494
Lubricant sales	$	22,347		$	22,347		$	24,210		$	22,067		$	22,517		$	12,923		$	5,387		$	5,387		$	5,053
Lubricant margins		16.6	%		16.6	%		16.4	%		15.2	%		14.0	%		14.0	%		16.5	%		16.5	%		18.3	%

(a)  The intersegment sales elimination represents intercompany transactions primarily from the Refining Group to the Retail Group, the Refining Group to Phoenix Fuel, and Phoenix Fuel to the Retail Group. The following table is a summary of intersegment sales for the years indicated:

													Three Months
													Ended
			Year Ended December 31,										March 31,
			2001		2000		1999		1998		1997		2002		2001
			(dollars in thousands)
Intersegment sales:
	Refining Group		$	183,217	$	228,488	$	197,760	$	131,599	$	118,748	$	34,065	$	42,188
	Retail Group			—		—		—		1,876		1,994		—		—
	Phoenix Fuel			80,125		80,252		19,784		7,343		4,496		12,306		21,013
		Total	$	263,342	$	308,740	$	217,544	$	140,818	$	125,238	$	46,371	$	63,201

(b)  EBITDA is defined as earnings before interest, taxes, depreciation, amortization, and certain non-cash charges. During 2001 non-cash charges for Giant consisted of the loss on the disposal or write-down of

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assets for $6.2 million, an allowance for a related party note and interest receivable for $5.4 million, and a $3.3 million adjustment for the lower of cost or market inventory write-downs, which is included in cost of products sold. During 1999, non-cash items consisted of a $2.4 million charge for the loss on the disposal or write-down of assets and a $7.1 million gain for a lower of cost or market inventory adjustment included in cost of products sold. EBITDA excluded non-cash charges for the lower of cost or market inventory write-downs of $8.4 million for 1998 and $2.9 million for 1997, which were included in cost of products sold. During the first quarter of 2002, non-cash items consisted of a $3.3 million gain for a lower of cost or market inventory adjustment, which is included in cost of products sold, and the loss on the disposal or write-down of assets of $30,000. During the first quarter of 2001, non-cash items consisted of the loss on the disposal or write-down of assets of $139,000. Adjusted EBITDA and pro forma EBITDA are presented net of $19.9 million of corporate expenses for 2001, $17.0 million for 2000, $19.9 million for 1999, $18.1 million for 1998, and $14.6 million for 1997.

	The calculation of EBITDA is not based on U.S. GAAP, and you should not consider it as an alternative to net earnings or cash flows from operating activities (which are determined in accordance with U.S. GAAP), as an indicator of operating performance or as a measure of liquidity. EBITDA may not be comparable to similarly titled measures used by other entities.
(c)	Adjusted EBITDA is defined as EBITDA plus certain unusual items regarding the Yorktown refinery. We believe it is another useful tool for analyzing our ability to service debt. EBITDA reconciles to adjusted EBITDA as follows:

				Three Months
		Year Ended		Ended
		December 31,		March 31,
		2001		2002
		(dollars in		(dollars in
		thousands)		thousands)
EBITDA		$	127,343	$	3,949
	Unusual repair expenses due to a 2001 fire at Yorktown		13,300
	Estimated savings in the Yorktown refinery corporate overhead allocation		4,700		500
Adjusted EBITDA		$	145,343	$	4,449

BP was self-insured with respect to the Yorktown refinery. We obtained insurance coverage for the Yorktown refinery at a cost of $2.4 million for the first six months of coverage.

(d)  The ratio of earnings to fixed charges is computed by dividing (i) earnings before income taxes plus fixed charges minus capitalized interest by (ii) fixed charges. Fixed charges consist of interest on indebtedness, amortization of debt issue costs, capitalized interest and the estimated interest component (one-third) of rental and lease expense. Earnings were insufficient to cover fixed charges by $14.6 million on a pro forma combined basis for the three months ended March 31, 2002 and by $4.1 million for the year ended December 31, 1998.

(e)  Operating data includes the operations of various Retail Group acquisitions in 1997 and 1998 and the acquisition of Phoenix Fuel in 1997.

(f)  At the end of 2001, the number of retail operating units included 149 service stations, the travel center, and one restaurant.

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RISK FACTORS

      You should carefully consider the following risks and all of the information set forth in this prospectus before participating in the exchange offer.

Risks Relating to the Exchange Notes

If you do not properly tender your outstanding notes, your ability to transfer the outstanding notes will be adversely affected.

      We will only issue exchange notes in exchange for outstanding notes that are timely received by the exchange agent, together with all required documents, including a properly completed and signed letter of transmittal. Therefore, you should allow sufficient time to ensure timely delivery of the outstanding notes and you should carefully follow the instructions on how to tender your outstanding notes. Neither we nor the exchange agent are required to tell you of any defects or irregularities with respect to your tender of the outstanding notes. If you do not tender your outstanding notes or if we do not accept your outstanding notes because you did not tender your outstanding notes properly, then, after we consummate the exchange offer, you may continue to hold outstanding notes that are subject to the existing transfer restrictions. In addition, if you tender your outstanding notes for the purpose of participating in a distribution of the exchange notes, you will be required to comply with the registration and prospectus delivery requirements of the Securities Act in connection with any resale of the exchange notes. If you are a broker-dealer that receives exchange notes for your own account in exchange for outstanding notes that you acquired as a result of market-making activities or any other trading activities, you will be required to acknowledge that you will deliver a prospectus in connection with any resale of such exchange notes. After the exchange offer is consummated, if you continue to hold any outstanding notes, you may have difficulty selling them because there will be less outstanding notes outstanding. In addition, if a large amount of outstanding notes are not tendered or are tendered improperly, the limited amount of exchange notes that would be issued and outstanding after we consummate the exchange offer could lower the market price of such exchange notes.

We have a substantial amount of debt that could adversely affect our operations.

      We have a substantial amount of debt. At March 31, 2002, as adjusted to give effect to the Yorktown acquisition and the related financing transactions as if they had occurred on that date, our total debt would have been $435.5 million and stockholders’ equity would have been $136.2 million. In addition, we would have had $52.1 million of availability under our new senior secured revolving credit facility (subject to our borrowing base). Our high degree of leverage may have important consequences to you. Among other things, it may:

•  limit our ability to use our cash flow, or obtain additional financing, for future working capital, capital expenditures, acquisitions or other general corporate purposes;

•  require a substantial portion of our cash flow from operations to make debt service payments;

•  limit our flexibility to plan for, or react to, changes in our business and industry;

•  place us at a competitive disadvantage compared to our less leveraged competitors; and

•  increase our vulnerability to the impact of adverse economic and industry conditions and, to the extent of our outstanding debt under our senior credit facilities, the impact of increases in interest rates.

      We cannot assure you that we will continue to generate sufficient cash flow or that we will be able to borrow funds under our new senior secured revolving credit facility in amounts sufficient to enable us to service our debt, including the 9% senior subordinated notes and the exchange notes offered hereby, or meet our working capital and capital expenditure requirements. If we are not able to generate sufficient cash flow from operations or to borrow sufficient funds to service our debt, due to borrowing base restrictions or otherwise, we may be required to sell assets, reduce capital expenditures, refinance all or a portion of our existing debt, including the exchange notes, or obtain additional financing. We cannot assure you that we will be able to refinance our debt, sell assets or borrow more money on terms acceptable to us, if at all. In

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addition, our ability to incur additional debt will be restricted under the covenants contained in our senior credit facilities and our senior subordinated note indentures.

Your right to receive payments on the exchange notes and the subsidiary guarantees may be adversely affected by the rights of the holders of our and the subsidiary guarantors’ senior debt.

      The exchange notes will be general unsecured senior subordinated obligations of us and our subsidiary guarantors, junior to all senior debt and effectively junior to any secured debt that we and our subsidiary guarantors have or may have in the future. Assuming we had completed the Yorktown acquisition and the related financing transactions on March 31, 2002, we would have had $435.5 million of indebtedness outstanding, $91.4 million of which would have been senior debt. If we default in the payment of principal or interest with respect to any senior debt, you will not receive any amounts owing on the exchange notes unless and until we have cured the default or our senior lenders have waived it. In addition, if any default occurs that permits the acceleration of the payment of designated senior debt where notice of the default has been given to us, you will not receive any payment with respect to any amounts owing on the exchange notes for up to 179 days unless and until we have cured the default or the senior lenders have waived it.

      In the event of any liquidation, dissolution, reorganization, bankruptcy or other similar proceeding regarding our or our subsidiaries’ assets, whether voluntary or involuntary, the holders of our and our subsidiaries guarantors’ senior debt will be entitled to receive payment before we can make any payment with respect to the exchange notes or the subsidiary guarantees. If any of the foregoing events occurs, we cannot assure you that we or our subsidiary guarantors will have sufficient assets to pay amounts due on our and our subsidiary guarantors’ senior debt, the exchange notes and the subsidiary guarantees. As a result, you may receive less, ratably, than the holders of senior debt and other creditors, or recover nothing, if any liquidation, dissolution, reorganization, bankruptcy or other similar proceeding occurs.

Our debt instruments impose restrictions on us that may adversely affect our ability to operate our business.

      The indenture governing the exchange notes and the indenture governing our 9% senior subordinated notes contain covenants that restrict, among other things, our ability to:

•  pay dividends and make other distributions with respect to our capital stock, purchase, redeem or retire our capital stock, prepay pari passu or subordinated debt, and make investments;

•  incur additional debt and issue preferred stock;

•  enter into asset sales;

•  enter into transactions with affiliates;

•  incur liens to secure debt;

•  engage in certain business activities; and

•  engage in mergers or consolidations.

      In addition, our new senior secured credit facilities contain other and more restrictive covenants. We also must comply with specified financial covenants in our senior secured credit facilities, including maintaining compliance with specified levels of total leverage and senior leverage, fixed charge coverages and consolidated tangible net worth. Some of these financial ratios become more restrictive over the life of the facilities. Our ability to comply with these covenants may be affected by many events beyond our control, and we cannot assure you that our future operating results will be sufficient to comply with the covenants. Our failure to comply with those financial covenants or to comply with the other restrictions contained in our senior credit facilities could result in a default, which could cause that debt (and by reason of cross-default provisions, debt under our indentures and other debt) to become immediately due and payable. If we are unable to repay those amounts, the lenders under our senior secured credit facilities could proceed against the collateral granted to them to secure that debt. If those lenders accelerate the payment of the senior secured credit

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facilities, we cannot assure you that our assets would be sufficient to pay that debt and other debt, including the exchange notes.

The exchange notes and guarantees may not be enforceable because of fraudulent conveyance laws.

      Our incurrence of debt, such as the exchange notes, may be subject to review under United States federal bankruptcy law or relevant state fraudulent conveyance laws if a bankruptcy lawsuit is commenced by or on behalf of any of our or the guarantors’ unpaid creditors. Under these laws, if a court were to find that, at the time Giant or a guarantor incurred debt, including debt represented by the exchange notes or a guarantee, Giant or a guarantor:

•  incurred this debt with the intent of hindering, delaying or defrauding current or future creditors; or

•  received less than reasonably equivalent value or fair consideration for incurring this debt, and:

•  was insolvent or was rendered insolvent by reason of the acquisition and related financing transactions;

•  was engaged, or about to engage, in a business or transaction for which its remaining assets constituted unreasonably small capital to carry on its business; or

•  intended to incur, or believed that it would incur, debts beyond its ability to pay these debts as they matured;

then the court could void the exchange notes or the guarantee or subordinate the amounts owing under the exchange notes or the guarantee to our presently existing or future debt or take other actions detrimental to you.

      In addition, the subsidiary guarantors may be subject to the allegation that because they incurred their guarantees for Giant’s benefit, they incurred the obligations under the guarantees for less than reasonably equivalent value or fair consideration.

      The measure of insolvency for purposes of the foregoing considerations will vary depending upon the law of the jurisdiction that is being applied in the proceeding. Generally, a company is considered insolvent if, at the time it incurred the debt or issued the guarantee:

•  it could not pay its debts or contingent liabilities as they become due;

•  the sum of its debts, including contingent liabilities, is greater than its assets, at fair valuation; or

•  the present fair saleable value of its assets is less than the amount required to pay the probable liability on its total existing debts and liabilities, including contingent liabilities, as they become absolute and matured.

      If the exchange notes or any guarantee is voided as a fraudulent conveyance or found to be unenforceable for any other reason, you will not have a claim against that obligor and will only be a creditor of Giant or any guarantor whose obligation was not set aside or found to be unenforceable.

We may not be able to finance a change of control offer as required by the indenture, which would result in defaults under our indenture and our credit facilities.

      Upon a change of control under the indenture, we will be required to offer to repurchase all of the exchange notes then outstanding at 101% of the principal amount, plus accrued and unpaid interest and liquidated damages, if any, to the repurchase date. Because the events that constitute a change of control under the indenture also constitute a change of control under the indenture that governs our 9% senior subordinated notes, we also would be required to offer to repurchase all of our 9% senior subordinated notes then outstanding at 101% of the principal amount, plus accrued and unpaid interest to the repurchase date. Prior to repurchasing any of the exchange notes or any of our 9% senior subordinated notes, we must either repay all of our senior debt (including debt under our senior secured credit facilities) or obtain the required consents from the holders of our senior debt to allow us to repurchase the exchange notes. In such circumstances, we cannot assure you that we would have the financial resources available to repay all of our

18

senior debt and any other debt that would become payable upon a change of control and to repurchase all of the exchange notes at the required premium, which would constitute an event of default under our indentures and, accordingly, under our senior credit facilities.

An active public market may not develop for the exchange notes, which may hinder your ability to sell your investment.

      The exchange notes are a new issue of securities with no established trading market, and we do not intend to list them on any securities exchange. We cannot assure you that an active trading market will develop for the exchange notes.

      In addition, the liquidity of the trading market for the exchange notes, if any, and the market price quoted for the exchange notes may be adversely affected by changes in interest rates in the market for high yield securities and by changes in our financial performance or prospects, as well as by declines in the prices of securities, or the financial performance or prospects of similar companies.

Risks Relating to the Yorktown Acquisition

Integrating our operations with the Yorktown refinery may strain our resources.

      The significant expansion of our business and operations, both in terms of geography and magnitude, resulting from the Yorktown acquisition may strain our administrative, operational and financial resources. Integrating the Yorktown refinery, which is more than 2,000 miles away from our other operations, will require the dedication of management resources that may temporarily detract attention from our other day-to-day business operations. These types of demands and uncertainties could have a material adverse effect on our business, financial condition and results of operations. We cannot assure you that we will be able to manage the combined operations and assets effectively or realize any of the anticipated benefits of the Yorktown acquisition.

As a result of the Yorktown acquisition, we will have operations with which we have limited operational experience.

      Prior to the Yorktown acquisition, we did not own a refinery on the East Coast of the United States. We have no prior experience with local regulatory issues, with purchasing crude oil on the world market, with arranging for waterborne transportation of incoming crude oil or with East Coast refined product marketing and transportation. We will therefore be heavily dependent on the key management personnel we have retained at the Yorktown refinery with respect to their experience in and knowledge of these issues and upon the transitional agreements with BP to supply 100% of our feedstock needs and purchase unsold amounts of our refined product outputs.

We have assumed liabilities in connection with the Yorktown acquisition and we may face significant exposure to unknown liabilities for which we have not obtained indemnification from BP.

      We have assumed certain liabilities and obligations in connection with our purchase of the Yorktown refinery. These assumed liabilities include, subject to certain exceptions, all obligations and liabilities under health, safety and environmental laws caused by, arising from, incurred in connection with or relating in any way to the ownership of the Yorktown refinery or its operation. We have agreed to indemnify BP against losses of any kind incurred in connection with or related to the liabilities and obligations we have assumed. We only have limited indemnification rights against BP.

      In particular, we assumed BP’s responsibilities and liabilities under a consent decree, dated August 29, 2001, among the United States, BP Exploration and Oil Co., Amoco Oil Company, and Atlantic Richfield Company. The consent decree requires the Yorktown refinery, among other things, to reduce NOx, SO₂ and particulate matter emissions and to upgrade the refinery’s leak detection and repair program. We estimate, and considered in our purchase price for the Yorktown refinery, that we will incur capital expenditures of approximately $20 to $27 million to comply with the consent decree over a period of approximately five years, although we believe we will incur most of these expenses in 2006. In addition, we estimate that we

19

will incur operating expenses associated with the requirements of the consent decree of approximately $1.7 to $2.7 million per year.

Risks Relating to Our Business

If we are unable to maintain an adequate supply of feedstocks at our Ciniza and Bloomfield refineries, our operating results may be adversely affected.

      Our Ciniza and Bloomfield refineries primarily process a mixture of high gravity, low sulfur crude oil, condensate, and natural gas liquids. The locally produced, high quality crude oil known as Four Corners Sweet is the primary feedstock for these refineries.

      These refineries continue to be affected by reduced crude oil production in the Four Corners area. The Four Corners basin is a mature production area and accordingly is subject to natural decline in production over time. In the past, this natural decline has been offset to some extent by new drilling, field workovers, and secondary recovery projects, which resulted in additional production from existing reserves. Many of these projects were cut back, however, when crude oil prices declined dramatically in 1998. Although crude oil prices have recovered from 1998 levels, a lower than anticipated allocation of capital to Four Corners basin production activities has resulted in greater than anticipated net declines in production.

      As a result of the declining production of crude oil in the Four Corners area since 1997, we have not been able to cost-effectively obtain sufficient amounts of crude oil to operate our Four Corners refineries at full capacity. Our utilization rates declined from 92% in 1997 to 73% in 2001. Our current projections of Four Corners crude oil production indicate that our crude oil demand will exceed the crude oil supply that is available from local sources for the foreseeable future. We expect to operate our Ciniza and Bloomfield refineries at lower levels than we would otherwise schedule as a result of shortfalls in Four Corners crude oil production. Because a large portion of our refinery costs are fixed, a decrease in utilization could significantly affect our profitability.

      We continue to evaluate supplemental feedstock alternatives for our Four Corners refineries on both a short-term and long-term basis. We have not, however, identified any significant, cost effective crude oil feedstock alternatives to date. Whether or not supplemental feedstocks are used at our refineries depends on a number of factors. These factors include, among other things, the availability of supplemental feedstocks, the cost involved, the quantities required, the quality of the feedstocks, the demand for finished products, and the selling prices of finished products.

      We also are assessing other long-term options to address the continuing decline in Four Corners crude oil production. The options we are considering include: (a) encouraging, and occasionally sponsoring, exploration and production activities in the Four Corners area; and (b) examining other potentially economic raw material sources, such as crude oil produced outside the Four Corners area.

      We cannot assure you that Four Corners crude oil supply for our Ciniza and Bloomfield refineries will continue to be available at all or on acceptable terms. Any significant, long-term interruption or decline in Four Corners crude oil supply, either by reduced production or significant long-term interruption of crude oil transportation systems, would have an adverse effect on our Four Corners refinery operations and on our overall operations.

      We have a 239-mile pipeline system for gathering and delivering crude oil to our refineries and a 13-mile pipeline for natural gas liquids. If we are unable to use either the crude oil pipeline system or the natural gas liquids pipeline, this could have a material adverse effect on our business, financial condition or results of operation.

The volatility of crude oil prices and refined product prices may adversely affect our business, financial condition and operating results.

      Our cash flow from operations depends primarily on producing and selling quantities of refined products at refinery margins sufficient to cover fixed and variable expenses. In recent years, crude oil costs and prices

20

of refined products have fluctuated substantially. These costs and prices depend on numerous factors beyond our control, including, among other things:

•  the demand for crude oil, gasoline and other refined products;

•  changes in the economy;

•  changes in the level of foreign and domestic production of crude oil and refined products;

•  worldwide political conditions;

•  availability of crude oil and refined product imports;

•  the marketing of alternative and competing fuels;

•  the extent of government regulations; and

•  local factors, including market conditions, pipeline capacity, and the level of operations of other refineries in our markets.

      Our crude oil requirements are supplied from sources that include major oil companies, large independent producers, and smaller local producers. In general, crude oil supply contracts are relatively short-term contracts with market-responsive pricing provisions. During 2001, we obtained approximately 24% of our Four Corners refineries’ crude oil supply pursuant to a contract with Exxon Mobil and approximately 15% of our Four Corners refineries’ crude oil supply pursuant to a contract with Texaco Exploration and Production, Inc., each of which is negotiated annually. An increase in crude oil prices would adversely affect our operating margins if we cannot pass along the increased cost of raw materials to our customers.

      Our sale prices for refined products are influenced by the commodity price of crude oil. Generally, an increase or decrease in the price of crude oil results in a corresponding increase or decrease in the price of gasoline and other refined products. The timing of the relative movement of the prices, however, as well as the overall change in product prices, could reduce profit margins and could have a significant impact on our refining and marketing operations and our earnings and cash flows. In addition, we maintain inventories of crude oil, intermediate products, and refined products, the values of which are subject to rapid fluctuation in market prices. We purchase our refinery feedstocks prior to selling the refined products manufactured. Price level changes during the period between purchasing feedstocks and selling the manufactured refined products from these feedstocks could have a significant effect on our operating results.

Our industry is highly competitive, and we may not be able to compete effectively against larger competitors with greater resources.

      Our industry is highly competitive. Many of our competitors are large, integrated oil companies which, because of their more diverse operations, larger refineries, stronger capitalization and better brand name recognition, may be better able than we are to withstand volatile industry conditions, including shortages or excesses of crude oil or refined products or intense price competition at the wholesale and retail levels. Because some of our competitors’ refineries are larger and more efficient than our refineries, many of our competitors’ refineries have lower per barrel crude oil refinery processing costs. See “Business — Competitive Conditions.”

The completion of certain pipeline projects could result in increased competition by increasing the amount of refined products available in the Albuquerque, El Paso, Tucson, and Phoenix market areas and other market areas.

      We are aware of a number of actions, proposals or industry discussions regarding product pipeline projects that could impact portions of our marketing areas. One of these projects is the potential conversion and extension of the existing Texas-New Mexico crude oil pipeline to transport refined products from West Texas to New Mexico, including Albuquerque, New Mexico and potentially Bloomfield, New Mexico. Another potential project would take product on to Salt Lake City, Utah. Previously, these two projects were referred to as the Aspen Pipeline. In addition, various actions have been undertaken to increase the supply of refined products to El Paso, Texas, which is connected by the Chevron pipeline to the Albuquerque, New

21

Mexico area to the north and by the Kinder-Morgan pipeline to the Phoenix and Tucson, Arizona markets to the west. The completion of some or all of these projects, including the Longhorn Pipeline that runs from Houston to El Paso, Texas, could result in increased competition by increasing the amount of refined products potentially available in these markets, as well as improving competitor access to these areas.

Any significant interruptions in the operations of any of our refineries could materially and adversely affect our business, financial condition and operating results.

      Our refining activities are conducted at our two refinery locations in New Mexico and the Yorktown refinery in Virginia. The refineries constitute a significant portion of our operating assets, and our two New Mexico refineries supply a significant portion of our retail operations. As a result, our operations would be subject to significant interruption if any of the refineries were to experience a major accident, be damaged by severe weather or other natural disaster, or otherwise be forced to shut down. In 2001, the Yorktown refinery experienced a fire that damaged certain equipment, including its catalytic reformer, which resulted in an interruption in its operations. In addition, in 2002, the Yorktown refinery suspended operations for a portion of its operating units due to an unplanned power interruption. The Yorktown refinery’s operating expenses for 2001 included $13.3 million for the costs to repair certain equipment damaged by the fire. If any of the refineries were to experience an interruption in supply or operations, our business, financial condition and operating results could be materially and adversely affected.

Our operations are subject to various hazards that are not fully insured.

      Our operations are subject to normal hazards of operations, including fire, explosion and weather-related perils. We maintain various insurance coverages, including business interruption insurance, subject to certain deductibles and consistent with standard practices for comparable companies. We are not fully insured against certain risks because such risks are not fully insurable, coverage is unavailable or premium costs, in our judgment, do not justify the expenditures. Any such event that causes a loss for which we are not fully insured could have a material and adverse effect on our business, financial condition and operating results.

Compliance with various regulatory and environmental laws and regulations could increase the cost of operating our business.

      Our operations are subject to a variety of federal, state and local environmental, health and safety laws and regulations governing the discharge of pollutants into the soil, air and water, product specifications, and the generation, treatment, storage, transportation and disposal of solid and hazardous waste and materials. Violations of such laws and regulations can lead to substantial fines and penalties. Also, these laws and regulations have become, and are becoming, increasingly stringent. Moreover, we cannot predict the nature, scope or effect of legislation or regulatory requirements that could be imposed, or how existing or future laws or regulations will be administered or interpreted, with respect to products or activities to which they have not been previously applied. Compliance with more stringent laws or regulations, as well as more vigorous enforcement policies of the regulatory agencies, could require us to make substantial expenditures for, among other things, the installation and operation of refinery equipment, pollution control systems and other equipment we do not currently possess, or the acquisition or modification of permits applicable to our activities.

      The federal Environmental Protection Agency, or “EPA,” has issued a rule pursuant to the Clean Air Act that requires refiners to reduce the sulfur content of gasoline and diesel fuel. Regulations that will be applicable to our Four Corners refineries require us to meet the ultra low sulfur, or “Tier 2,” gasoline standards by January 2007 and the ultra low sulfur diesel, or “ULSD,” standards by July 2006. The rule contains provisions that, under certain circumstances, extend the compliance deadlines, and we believe that we qualify for an extension of the Tier 2 gasoline standard until December 2008. We anticipate that we will spend approximately $3.5 million to purchase and install the equipment to produce gasoline that meets the revised standards, most of which we expect to incur in 2006. In addition, we anticipate that we will spend approximately $15 million to purchase and install the equipment to produce diesel that meets the ULSD standards, most of which we expect to incur in 2005 and 2006.

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      The Yorktown refinery is also subject to the Tier 2 gasoline and the ULSD standards, and it has to meet these standards by January 2004 and July 2006, respectively. We anticipate that we will spend approximately $40 million to purchase and install the equipment necessary to produce Tier 2 gasoline at the Yorktown refinery, and project that we will incur these expenditures half in 2003 and half in 2004. We also anticipate that we will spend approximately $15 million to purchase and install the equipment necessary to produce ULSD by 2006, and project that we will incur these expenditures half in 2005 and half in 2006.

      There are a number of factors that could affect the cost to comply with the Tier 2 and ULSD standards. The regulations affect the entire industry, so contract engineering and construction companies will be busy and may charge a premium for their services. Moreover, detailed engineering for the Yorktown refinery is not yet completed, and this refinery may have some unusual circumstances that could be costly to correct. Also, the relatively short time left to comply might result in increased costs to expedite ordering for otherwise long delivery items or added overtime by contractors to meet the implementation schedule.

      The implementation schedule for achieving the Tier 2 and ULSD requirements at the Yorktown refinery is tight. We believe that BP identified a reasonable plan for achieving these requirements, but made little actual progress in implementing this plan. Although we still believe it will be possible to complete the Tier 2 and ULSD projects in a timely manner, we cannot assure you of this. Any failure to complete either of these projects by the applicable deadlines could result in a reduction of the quantity of gasoline and diesel fuel available for sale, and an increase of the quantity of components not subject to the requirements, such as heating oil, available for sale, which would likely reduce refining earnings.

      Also, applicable laws and regulations govern the investigation and remediation of contamination at our current and former properties, as well as at third-party sites to which we sent wastes for disposal. We may be held liable for contamination existing at current or former properties, notwithstanding that a prior operator of the site, or other third party, caused the contamination. We may be held responsible for costs associated with cleaning up contamination at third-party disposal sites, notwithstanding that the original disposal activities accorded with all then applicable regulatory requirements. We are currently engaged in several such remediation projects.

      Moreover, we face significant exposure from actual or potential claims and lawsuits, brought by either governmental authorities or private parties, alleging non-compliance with environmental, health and safety laws and regulations, or property damage or personal injury caused by the environmental, health or safety impacts of our operations or of historic contamination. Governmental authorities may also impose penalties and fines for alleged violations of environmental laws and regulations. For instance, in June 2001, the New Mexico Environment Department, or “NMED,” issued four compliance orders to us in connection with alleged violations of air regulations at the Ciniza and Bloomfield refineries. These alleged violations were discovered pursuant to NMED inspections in 1999 and 2000. The Company settled the orders in the first quarter of 2002 by paying an aggregate penalty of $135,000. In addition, we received a draft compliance order from NMED in June 2002 in connection with five alleged violations of air quality regulations at the Ciniza refinery. These alleged violations relate to an inspection completed in April 2001. Potential penalties could be as high as $564,000. We expect to provide information to NMED that may result in the modification or dismissal of some of the alleged violations and reductions in the amount of the potential penalties.

      Future expenditures related to compliance with environmental, health and safety laws and regulations, the investigation and remediation of contamination, and the defense or settlement of governmental enforcement actions or private-party claims cannot be reasonably quantified in many circumstances for various reasons, including the speculative nature of remediation and clean-up cost estimates and methods, imprecise and conflicting data regarding the hazardous nature of various types of substances, the number of other potentially responsible parties involved, various defenses which may be available to us, and changing environmental laws, regulations and their respective interpretations. We cannot assure you that compliance with such laws or regulations, such investigations or cleanups, or such enforcement proceedings or private-party claims will not have a material adverse effect on our business, financial condition or results of operation.

23

Our operations are inherently subject to discharges or other releases of petroleum or hazardous substances for which we may face significant liabilities.

      Our operations, as with others in the businesses in which we operate, are inherently subject to spills, discharges or other releases of petroleum or hazardous substances that may give rise to liability to governmental entities or private parties under federal, state or local environmental laws, as well as under common law. Spills, discharges or other releases of contaminants have occurred from time to time during the normal course of our operations, including releases associated with our refineries, pipeline and trucking operations, as well as releases at gasoline service stations and other petroleum product distribution facilities we have operated and are operating. We cannot assure you that additional spills, discharges and other releases will not occur in the future, that future action will not be taken in connection with past incidents (including at the Yorktown refinery), that governmental agencies will not assess penalties against us in connection with any past or future discharges or incidents, or that third parties will not assert claims against us for damages allegedly arising out of any such past or future discharges or incidents.

Terrorist attacks and threats or actual war may negatively impact our business, financial condition and results of operations.

      Our business is affected by general economic conditions and fluctuations in consumer confidence and spending, which can decline as a result of numerous factors outside of our control. Recent terrorist attacks in the United States, as well as events occurring in response to or in connection with them, including future terrorist attacks against United States targets, rumors or threats of war, actual conflicts involving the United States or its allies, or military or trade disruptions impacting our suppliers or our customers, may adversely impact our operations. As a result, there could be delays or losses in the delivery of supplies and raw materials to us, decreased sales of our products and extension of time for payment of accounts receivable from our customers. Strategic targets such as energy-related assets (which could include refineries such as ours) may be at greater risk of future terrorist attacks than other targets in the United States. These occurrences could have an adverse impact on energy prices, including prices for our products, and an adverse impact on the margins from our refining and marketing operations. In addition, disruption or significant increases in energy prices could result in government-imposed price controls. Any or a combination of these occurrences could have a material adverse effect on our business, financial condition and results of operations.

      In particular, our Phoenix Fuel operations have been affected by the events of September 11, 2001 due to reduced demand by our customers, particularly in the mining and construction industries whose businesses were adversely affected by those events. Phoenix Fuel also has been affected by an economic downturn in its major markets. The combination of the events of September 11, 2001 and the economic downturn has resulted in reduced demand for finished products and lubricants, as well as having a negative impact on finished product margins.

USE OF PROCEEDS

      We will not receive any proceeds from the issuance of the exchange notes in the exchange offer. We will retire or cancel all of the outstanding notes tendered in the exchange offer.

      On May 14, 2002, we issued and sold the outstanding notes. The net proceeds from the sale of the outstanding notes, after deducting the discount paid to the initial purchasers and offering expenses, were approximately $187.4 million. We have used the proceeds of the sale of the outstanding notes, together with cash on hand and borrowings under our new senior secured credit facilities, to acquire the Yorktown refinery and associated inventory, to redeem all $100.0 million of our 9 3/4% notes, and to pay related transaction fees and expenses.

24

CAPITALIZATION

      The following table sets forth our consolidated cash and cash equivalents and capitalization as of March 31, 2002 both on an actual basis and as adjusted to give effect to the Yorktown acquisition and the related financing transactions.

      You should read this table in conjunction with “Use of Proceeds,” “Pro Forma Financial Statements,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” “Description of Other Debt,” the financial statements and related notes, and other financial information included elsewhere in this prospectus.

			As of March 31, 2002
			Actual		As Adjusted
			(dollars in millions)
Cash and cash equivalents			$	9.7	$	2.7
Long-term debt (including current maturities):
	New senior secured revolving credit facility(a)		$	—	$	44.6
	New senior secured mortgage loan facility			—		40.0
	Capital leases and other debt			6.8		6.8
	9 3/4% senior subordinated notes due 2003.			100.0		—
	9% senior subordinated notes due 2007.			150.0		150.0
	Notes offered hereby			—		194.1
		Total long-term debt (including current maturities)	$	256.8	$	435.5
Stockholders’ equity			$	136.5	$	136.2	(b)
Total capitalization			$	393.3	$	571.7

(a)  Reflects initial borrowings under our $100.0 million new senior secured revolving credit facility. Availability under this facility will be governed by a borrowing base and will be reduced by outstanding letters of credit. At March 31, 2002, on a pro forma basis, our borrowing base would have been approximately $100.0 million and we would have had $44.6 million of borrowings and $3.3 million of letters of credit outstanding. See “Description of Other Debt — New Senior Secured Revolving Credit Facility.”

(b)  Reflects the write-off of the remaining debt issuance costs associated with the 9 3/4% notes.

25

PRO FORMA FINANCIAL STATEMENTS

      The following unaudited pro forma combined condensed balance sheets give effect to the following events as if each had occurred on March 31, 2002 and the following unaudited pro forma combined condensed statements of operations gives effect to the following events as if each had occurred on January 1, 2001:

•  the Yorktown acquisition;

•  the offering of the Notes;

•  borrowings of $44.6 million under our new senior secured revolving credit facility;

•  borrowings of $40.0 million under our new senior secured mortgage loan facility; and

•  the application of the proceeds from the above financings together with cash on hand to make the Yorktown acquisition, redeem in full our 9 3/4% notes, and pay related transaction fees and expenses.

      The Yorktown acquisition will be accounted for using the purchase method of accounting. The estimates of the fair value of the Yorktown refinery assets and related liabilities are based on preliminary estimates. These estimates will be updated based on valuations with respect to inventories, property, plant and equipment, intangible assets and certain assumed liabilities, and may change from the amounts shown.

      The unaudited pro forma combined condensed financial statements are based on assumptions that we believe are reasonable under the circumstances and are intended for informational purposes only. They are not necessarily indicative of the future financial position or future results of the combined operations or of the financial position or the results of operations that would have actually occurred had the Yorktown acquisition taken place as of the dates or for the periods presented. The Yorktown refinery has certain shared assets and incurs or is charged certain common costs which relate to both the Yorktown refinery and other BP operations. As such, BP has made certain allocations of assets, liabilities and expenses to the refinery in its financial statements. While the basis for allocating such costs is considered reasonable by BP, amounts allocated to the refinery could differ significantly from amounts that would otherwise be determined if the refinery were operated on a standalone basis. The unaudited pro forma combined condensed statement of operations contains allocations of corporate overhead totaling $6.7 million related to the historical financial statements. We believe the actual incremental corporate overhead that we will incur will be less than the allocated amounts.

      These unaudited pro forma combined condensed financial statements should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” our historical financial statements and related notes thereto, and the historical financial statements of the Yorktown refinery business and related notes thereto included in this prospectus.

26

GIANT INDUSTRIES, INC. AND SUBSIDIARIES

UNAUDITED PRO FORMA COMBINED CONDENSED BALANCE SHEET

March 31, 2002

			Historical						Pro Forma
			Giant			Yorktown			Adjustments			Combined
			(dollars in millions)
ASSETS
Current Assets:
	Cash and cash equivalents		$	9.7		$	—		$	(7.0	)(a)	$	2.7
	Receivables, net			51.6			15.0			(15.0	)(b)		51.6
	Accounts receivable, affiliates			—			1.1			(1.1	)(b)		—
	Inventories			62.5			22.3			47.3	(a)		132.1
	Prepaid expenses and other			3.0			0.3			(0.3	)(b)		3.0
	Deferred income taxes			3.7			0.5			5.9	(c)		10.1
		Total current assets		130.5			39.2			29.8			199.5
Property, plant and equipment				527.0			250.4			(117.8	)(a)		659.6
	Less accumulated depreciation and amortization			(209.6	)		(159.8	)		159.8	(a)		(209.6	)
				317.4			90.6			42.0			450.0
Goodwill				19.8			—			—			19.8
Other assets				38.9			—			6.6	(d)		45.5
			$	506.6		$	129.8		$	78.4		$	714.8
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities:
	Accounts payable		$	47.2		$	36.4		$	(23.4	)(a)	$	60.2
	Accounts payable, affiliates			—			11.7			(11.7	)(b)		—
	Accrued expenses			31.0			7.9			(8.0	)(b)		30.9
		Total current liabilities		78.2			56.0			(43.1	)		91.1
Long-term debt, net of current portion				256.8			—			178.7	(d)		435.5
Deferred income taxes				32.8			17.5			(17.5	)(b)		32.8
Other liabilities				2.3			11.4			5.5	(a)		19.2
Parent company investment				—			44.9			(44.9	)(e)		—
Stockholders’ equity				136.5			—			(0.3	)(f)		136.2
			$	506.6		$	129.8		$	78.4		$	714.8

See accompanying notes to pro forma combined condensed financial statements.

27

NOTES TO UNAUDITED PRO FORMA COMBINED CONDENSED BALANCE SHEET

March 31, 2002

      (a) Purchase Price Allocation — Following is the purchase price related to the Yorktown acquisition (in millions):

Purchase price under the purchase agreement		$	127.5
Purchased hydrocarbon inventories			65.2
Estimated direct costs of acquisition			2.0
	Total purchase price	$	194.7

In addition, we incurred $14.0 million of financing fees related to the Yorktown acquisition.

      As part of the Yorktown acquisition, we agreed to pay to BP, beginning in 2003 and concluding at the end of 2005, under certain circumstances, earn-out payments up to a maximum of $25.0 million. See “Yorktown Acquisition Agreements.”

      For purposes of this pro forma analysis, the above purchase price has been allocated based on a preliminary assessment of the fair value of the assets to be acquired and liabilities to be assumed as follows (in millions):

Property, plant and equipment, including turnaround assets			$	132.6
Other assets				3.0
Deferred income tax assets				6.4
Inventories:
	Feedstocks and refined products			65.2
	Materials and supplies			4.4
Environmental liabilities assumed				(7.5	)
Pension and retiree medical obligations assumed				(9.4	)
		Total cash purchase price	$	194.7

      Cash and Cash Equivalents — The adjustment to cash represents the amount available to be used for the Yorktown acquisition. This amount includes a $10.0 million non-refundable deposit paid to BP on February 8, 2002.

      Inventories — The adjustment to inventories is to reflect the amount paid for the Yorktown refinery inventories in excess of the historical values as follows (in millions):

Feedstocks and refined products		$	65.2
Materials and supplies			4.4
	Total inventories purchased		69.6
	Historical values of inventories		(22.3	)
	Adjustment to inventories	$	47.3

      Property, Plant and Equipment — The adjustment to property, plant and equipment represents the difference in the preliminary allocated purchase price compared to historical costs of the Yorktown refinery property, plant and equipment.

      The adjustment to accumulated depreciation and amortization represents the elimination of the historical Yorktown refinery amounts.

      Liabilities — The adjustment to other liabilities for $5.5 million reflects the amount of the environmental liability to be assumed by us, after giving effect to the environmental indemnification provisions of the acquisition agreement, and our assumption of certain pension and retiree medical obligations. The total

28

environmental accrual as discussed in Note I of the audited financial statements for the Yorktown refinery amounted to $14.9 million of which a portion was included in accrued expenses. The environmental liability to be assumed by us is $7.5 million.

      Accounts Payable — The adjustment to accounts payable represents the amount due BP for the final inventory determined after the closing date of the Yorktown acquisition less liabilities of the Yorktown refinery business we did not assume.

      (b) Represents an adjustment to exclude assets and liabilities of the Yorktown refinery business we are not acquiring or assuming.

      (c) The adjustment to deferred income taxes reflects the tax effects of temporary differences arising from purchase accounting.

      (d) Long-Term Debt — Represents an adjustment to reflect (1) $194.1 million aggregate principal amount of outstanding notes ($200.0 million net of original issue discount of $5.9 million), (2) $44.6 million at March 31, 2002 for initial borrowings under our new senior secured revolving credit facility, (3) $40.0 million of borrowings under our new senior secured mortgage loan facility, and (4) the redemption of all $100.0 million aggregate principal amount of our 9 3/4% notes.

      Other Assets — The adjustment to other assets represents the financing fees to be incurred in the amount of $14.0 million less the write-off of unamortized debt issuance costs associated with the 9 3/4% notes, $3 million of estimated intangibles, less a $10.0 million non-refundable deposit paid to BP on February 8, 2002.

      (e) Represents the elimination of BP’s investment related to the Yorktown refinery business.

      (f) Represents an after-tax adjustment of $0.3 million to write-off unamortized debt issuance costs associated with the 9 3/4% notes.

29

GIANT INDUSTRIES, INC. AND SUBSIDIARIES

UNAUDITED PRO FORMA COMBINED CONDENSED STATEMENTS OF OPERATIONS

For the Year Ended December 31, 2001

		Historical
					Yorktown			Pro Forma
					Refinery
		Giant			Business			Adjustments			Combined
		(dollars in millions, except per share data)
Revenues		$	968.7		$	688.4	(1)	$	7.7	(a)	$	1,664.8
Costs and expenses:
	Costs of products sold		738.5			588.5			—			1,327.0
	Operating expenses		114.3			76.5	(2)		(7.4	)(b)		173.7
									(9.7	)(c)
	Selling, general and administrative expenses		27.9			5.5			—			33.4
	Corporate overhead allocation		—			6.7	(3)		—			6.7
	Depreciation and amortization		33.9			8.2			(0.2	)(d)		41.9
	Loss on the disposal/write-down of assets		6.2			—			—			6.2
	Allowance for related party note and interest receivable		5.4			—			—			5.4
Operating income			42.5			3.0	(1)(2)		25.0			70.5
Interest and financing costs			(24.1	)		—			(20.6	)(e)		(44.7	)
Interest income			1.7			—						1.7
Earnings before income tax			20.1			3.0			4.4			27.5
Income tax provision			7.7			1.2			1.7	(f)		10.6
Net earnings		$	12.4		$	1.8		$	2.7		$	16.9
Weighted average common shares (in millions)
	Basic		8.87									8.87
	Diluted		8.89									8.89
Net earnings per share:
	Basic	$	1.40								$	1.91
	Diluted	$	1.39								$	1.90

See accompanying notes to pro forma combined condensed financial statements.

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GIANT INDUSTRIES, INC. AND SUBSIDIARIES

UNAUDITED PRO FORMA COMBINED CONDENSED STATEMENTS OF OPERATIONS

For the Three Months Ended March 31, 2002

		Historical
					Yorktown			Pro Forma
					Refinery
		Giant			Business			Adjustments			Combined
		(dollars in millions, except per share data)
Revenues		$	188.4		$	133.3	(1)	$	1.4	(a)	$	323.1
Costs and expenses:
	Costs of products sold		141.9			126.5			—			268.4
	Operating expenses		26.4			13.1			—			39.5
									—
	Selling, general and administrative expenses		5.2			1.8			—			7.0
	Corporate overhead allocation		—			1.0			—			1.0
	Depreciation and amortization		8.8			2.0			—			10.8
	Loss on the disposal/write-down of assets		—			—			—			—
	Allowance for related party note and interest receivable		—			—			—			—
Operating income (loss)			6.1			(11.1	)		1.4			(3.6	)
Interest and financing costs			(6.0	)		—			(5.1	)(e)		(11.1	)
Interest income			0.1			—						0.1
Earnings (loss) before income tax			0.2			(11.1	)		(3.7	)		(14.6	)
Income tax provision (benefit)			0.1			(4.3	)		(1.4	)(f)		(5.6	)
Net earnings (loss)		$	0.1		$	(6.8	)	$	(2.3	)	$	(9.0	)
Weighted average common shares (in millions)
	Basic		8.55									8.55
	Diluted		8.57									8.57
Net earnings (loss) per share:
	Basic	$	0.01								$	(1.05	)
	Diluted	$	0.01								$	(1.05	)

See accompanying notes to pro forma combined condensed financial statements.

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NOTES TO UNAUDITED PRO FORMA COMBINED CONDENSED

STATEMENTS OF OPERATIONS

For the Year Ended December 31, 2001

and the Three Months Ended March 31, 2002

Informational Notes:

      (1) Under BP’s ownership, the Yorktown refinery was operated as a part of BP’s global refining, production and distribution system. As such, we believe the Yorktown refinery was not always operated to maximize the sales and profitability of the refinery, but rather the refinery’s contribution to BP’s overall operations. In addition, in 2001 the Yorktown refinery experienced a fire that damaged certain equipment, including its catalytic reformer and conducted a major planned maintenance turnaround. The interruption of business caused by the fire and turnaround, which lasted 92 days, resulted in significant lost sales and profit opportunities at the Yorktown refinery in 2001.

      (2) As discussed in Note J of the audited financial statements for the Yorktown refinery, operating expenses include $13.3 million for the costs to repair certain equipment damaged by a fire during 2001. Also included in operating expenses for 2001 are costs related to a major planned maintenance turnaround in the amount of $9.7 million. See note (c) below.

      (3) Historical Yorktown refinery business results include $6.7 million of allocated corporate overhead. We estimate that the amount of incremental overhead related to the Yorktown refinery will be approximately $2.0 million per year, which represents a reduction of $4.7 million per year. BP was self-insured with respect to the Yorktown refinery. We obtained insurance coverage for the Yorktown refinery at a cost of $2.4 million for the first six months of coverage.

Yorktown Refinery Adjustments:

      (a) As discussed in Note E of the audited financial statements for the Yorktown refinery business, the Yorktown refinery transferred 100% of its propane and butane production to BP and its affiliates at fixed fee arrangements. We have entered into new contracts with BP, which expire in March 2003, for the sale of butane and propane to BP at market-based prices that are higher than the current fixed fee arrangements. Under the new contracts, sales revenues would have been higher by $7.7 million for 2001 and $1.4 million for the three months ended March 31, 2002. The new contract pricing became effective as of the closing date of the Yorktown acquisition.

      (b) Represents the adjustment to the environmental liability accrual to reflect the liability assumed by us, as provided for in the environmental indemnification provisions of the Yorktown transaction. As discussed in Note I of the audited financial statements for Yorktown, a pre-tax charge of $11.3 million was incurred during 2001 relating to expected remediation costs associated with the refinery site. The total amount of the accrual at December 31, 2001 amounted to $14.9 million, of which $7.5 million was assumed by us.

      (c) Represents an adjustment to conform the accounting policy for refinery maintenance turnaround costs to our current policy of deferring and amortizing such costs. An exposure draft has been issued by the American Institute of Certified Public Accountants that is expected to require companies to expense the non-capital portion of major maintenance costs as incurred. This change in accounting is expected to be adopted for fiscal years beginning after June 15, 2002, and it is expected that the effect of expensing existing unamortized deferred non-capital major maintenance costs, if any, will be reported as a cumulative effect of an accounting change in the consolidated statement of operations. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Turnaround Costs.”

      (d) Represents an adjustment to record depreciation expense based upon our preliminary allocation of fair values to property, plant and equipment based on a weighted-average estimated useful life of 20 years. Turnaround assets are amortized over a 5-year period.

      (e) Represents an adjustment to record interest expense (and amortization of deferred financing costs and original issue discount) on the notes and our new senior secured credit facilities required to finance the

32

Yorktown acquisition and to pay related transaction fees and expenses, at a weighted average annual interest cost of 9.99% and the amortization of consent fees, offset by a decrease in interest expense (and amortization of deferred financing costs) related to the 9 3/4% notes. A  1/8% change in the weighted average interest rate associated with the notes and the new senior secured credit facilities would have a $0.3 million effect on our annual interest expense.

      (f) Represents the income tax effect of the adjustments above at a combined statutory tax rate of 38%.

33

SELECTED HISTORICAL AND UNAUDITED

PRO FORMA FINANCIAL AND OTHER DATA

      The following table summarizes our financial information and sets forth certain pro forma information after giving effect to the Yorktown acquisition and the related financing transactions. The summary historical statement of earnings and balance sheet data presented below for each of the years ended December 31, 2001, 2000, 1999, 1998 and 1997 has been derived from our audited financial statements. The historical information for the three months ended March 31, 2002 and 2001 is unaudited. The unaudited information is taken from unaudited financial statements that include all adjustments, which are only of a normal recurring nature, which we consider necessary for a fair presentation of the results of operations for these periods. Operating results for the three months ended March 31, 2002 are not necessarily indicative of the results that may be expected for the entire year ending December 31, 2002.

      The pro forma statement of earnings data for the year ended December 31, 2001 and the three months ended March 31, 2002 gives effect to the Yorktown acquisition and the related financing transactions, as if they had occurred on January 1, 2001. The pro forma balance sheet data as of March 31, 2002 gives effect to the Yorktown acquisition and the related financing transactions, as if they had occurred on March 31, 2002. The unaudited pro forma information set forth below is not necessarily indicative of the results that actually would have been achieved had the Yorktown acquisition and the related financing transactions been consummated on January 1, 2001 or March 31, 2002, as the case may be, or that may be achieved in the future. You should read this information in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” the pro forma financial statements and related notes thereto, our historical financial statements and related notes thereto, and the historical financial statements of the Yorktown refinery business and related notes thereto included in this prospectus.

	Year Ended December 31,																		Three Months Ended March 31,
	Pro Forma			Historical															Pro Forma			Historical
	Combined																		Combined
	2001			2001			2000			1999			1998			1997			2002			2002			2001
	(dollars in thousands)
Statement of Earnings Data:
Net revenues:
Refining Group	$	1,146,326		$	450,226		$	518,172		$	388,300		$	312,632		$	428,688		$	217,418		$	82,718		$	111,190
Retail Group		390,379			390,379			421,339			338,565			273,651			216,858			76,215			76,215			93,543
Phoenix Fuel		391,172			391,172			443,224			272,685			196,511			136,543			75,784			75,784			109,608
Other		244			244			367			677			528			427			50			50			72
Intersegment(a)		(263,342	)		(263,342	)		(308,740	)		(217,544	)		(140,818	)		(125,238	)		(46,371	)		(46,371	)		(63,201	)
Consolidated total net revenues		1,664,779			968,679			1,074,362			782,683			642,504			657,278			323,096			188,396			251,212
Cost of products sold		1,327,014			738,514			859,001			568,005			464,936			487,748			268,339			141,839			200,502
Gross margin		337,765			230,165			215,361			214,678			177,568			169,530			54,757			46,557			50,710
Operating expenses		173,660			114,260			122,650			115,599			103,207			85,177			39,511			26,411			28,848
Depreciation and amortization		41,875			33,875			33,579			31,129			29,166			23,991			10,771			8,771			8,113
Selling, general and administrative expenses		40,064			27,864			25,373			28,166			25,288			19,256			7,997			5,197			6,583
Loss on the disposal/ write-down of assets		6,212			6,212			—			2,387			—			—			30			30			139
Allowance for related party note and interest receivable		5,409			5,409			—			—			—			—			—			—			—
Operating income (loss)		70,545			42,545			33,759			37,397			19,907			41,106			(3,552	)		6,148			7,027
Interest expense		(44,698	)		(24,098	)		(24,411	)		(23,417	)		(25,464	)		(18,139	)		(11,136	)		(6,003	)		(6,043	)
Interest and investment income		1,661			1,661			1,989			2,476			1,831			2,133			64			64			563
Earnings (loss) before income taxes		27,508			20,108			11,337			16,456			(3,726	)		25,100			(14,624	)		209			1,547
Provision (benefit) for income taxes		10,627			7,727			4,048			5,678			(1,509	)		9,806			(5,633	)		86			597
Net earnings (loss)	$	16,881		$	12,381		$	7,289		$	10,778		$	(2,217	)	$	15,294		$	(8,991	)	$	123		$	950

34

	Year Ended December 31,																		Three Months Ended March 31,
	Pro Forma			Historical															Pro Forma			Historical
	Combined																		Combined
	2001			2001			2000			1999			1998			1997			2002			2002			2001
	(dollars in thousands, except per share and operating data)
Balance Sheet Data (at end of period):
Total assets	$	—		$	507,174		$	528,565		$	546,799		$	527,414		$	535,371		$	714,747		$	506,567		$	514,794
Total long-term debt (net of current portion)		—			256,749			258,009			258,272			282,484			275,557			435,441			256,741			257,997
Total stockholders’ equity		—			136,410			127,703			132,462			127,702			133,467			136,233			136,533			128,653
Other Data:
Net cash provided (used) by operating activities		69,256			65,256			29,492			59,799			26,892			31,292			16,038			(2,562)			7,777
Capital expenditures		61,256			57,056			22,455			46,361			60,320			35,752			3,432			2,332			2,222
EBITDA(b)		127,343			91,343			67,338			63,805			57,464			67,982			3,949			11,648			15,279
Adjusted EBITDA(c)		145,343																		4,449
Ratio of earnings to fixed charges(d)		1.57	x		1.73	x		1.39	x		1.57	x		0.86	x		2.23	x		—			1.03	x		1.22	x
Operating Data(e):
Refining Group:
Crude oil/ NGL/ residual feedstock throughput (bpd)		88,645			33,167			35,359			38,360			38,158			40,183			89,758			33,785			33,417
Refinery sourced sales barrels (bpd)		94,685			32,025			34,287			37,368			37,898			39,037			87,764			31,161			30,651
Average crude oil costs ($/bbl)		n/a		$	25.00		$	29.26		$	17.64		$	14.29		$	20.60			n/a		$	18.90		$	27.90
Refining margins ($/bbl)		6.39			9.69			7.63			6.89			4.83			6.39		$	3.65		$	7.36		$	8.23
Retail Group:
Fuel gallons sold (in thousands)		212,116			212,116			234,823			239,864			209,325			144,653			48,237			48,237			51,358
Fuel margins ($/gal)	$	0.1618		$	0.1618		$	0.1603		$	0.1717		$	0.1950		$	0.1990		$	0.1307		$	0.1307		$	0.1515
Merchandise sales	$	144,531		$	144,531		$	138,544		$	118,894		$	102,827		$	74,983		$	32,837		$	32,837		$	32,826
Merchandise margins		28.7	%		28.7	%		29.0	%		28.9	%		31.0	%		31.0	%		27.7	%		27.7	%		30.2	%
Number of operating units at end of period(f)		151			151			180			173			167			149			150			150			171
Phoenix Fuel:
Fuel gallons sold (in thousands)		394,158			394,158			424,290			351,949			314,763			172,121			92,471			92,471			104,920
Fuel margins ($/gal)	$	0.0498		$	0.0498		$	0.0524		$	0.0644		$	0.0670		$	0.0750		$	0.0520		$	0.0520		$	0.0494
Lubricant sales	$	22,347		$	22,347		$	24,210		$	22,067		$	22,517		$	12,923		$	5,387		$	5,387		$	5,053
Lubricant margins		16.6	%		16.6	%		16.4	%		15.2	%		14.0	%		14.0	%		16.5	%		16.5	%		18.3	%

 (a)  The intersegment sales elimination represents intercompany transactions primarily from the Refining Group to the Retail Group, the Refining Group to Phoenix Fuel, and Phoenix Fuel to the Retail Group. The following table is a summary of intersegment sales for the years indicated:

													Three Months Ended
			Year Ended December 31,										March 31,
			2001		2000		1999		1998		1997		2002		2001
			(dollars in thousands)
Intersegment sales:
	Refining Group		$	183,217	$	228,488	$	197,760	$	131,599	$	118,748	$	34,065	$	42,188
	Retail Group			—		—		—		1,876		1,994		—		—
	Phoenix Fuel			80,125		80,252		19,784		7,343		4,496		12,306		21,013
		Total	$	263,342	$	308,740	$	217,544	$	140,818	$	125,238	$	46,371	$	63,201

 (b)  EBITDA is defined as earnings before interest, taxes, depreciation, amortization, and certain non-cash charges. During 2001 non-cash charges for Giant consisted of the loss on the disposal or write-down of assets for $6.2 million, an allowance for a related party note and interest receivable for $5.4 million, and a $3.3 million adjustment for the lower of cost or market inventory write-downs, which is included in cost of products sold. During 1999, non-cash items consisted of a $2.4 million charge for the loss on the disposal or write-down of assets and a $7.1 million gain for a lower of cost or market inventory adjustment included in cost of products sold. EBITDA excluded non-cash charges for the lower of cost or market inventory write-downs of $8.4 million for 1998 and $2.9 million for 1997, which were included in cost of products

35

sold. During the first quarter of 2002, non-cash items consisted of a $3.3 million gain for a lower of cost or market inventory adjustment, which is included in cost of products sold, and the loss on the disposal or write-down of assets of $30,000. During the first quarter of 2001, non-cash items consisted of the loss on the disposal or write-down of assets of $139,000. Adjusted EBITDA and pro forma EBITDA are presented net of $19.9 million of corporate expenses for 2001, $17.0 million for 2000, $19.9 million for 1999, $18.1 million for 1998, and $14.6 million for 1997.

The calculation of EBITDA is not based on U.S. GAAP, and you should not consider it as an alternative to net earnings or cash flows from operating activities (which are determined in accordance with U.S. GAAP), as an indicator of operating performance or as a measure of liquidity. EBITDA may not be comparable to similarly titled measures used by other entities.

 (c)  Adjusted EBITDA is defined as EBITDA plus certain unusual items regarding the Yorktown refinery. We believe it is another useful tool for analyzing our ability to service debt. EBITDA reconciles to adjusted EBITDA for 2001 as follows:

				Three Months
		Year Ended		Ended
		December 31,		March 31,
		2001		2002
		(dollars in		(dollars in
		thousands)		thousands)
EBITDA		$	127,343	$	3,949
	Unusual repair expenses due to a 2001 fire at Yorktown		13,300		—
	Estimated savings in the Yorktown refinery corporate overhead allocation		4,700		500
Adjusted EBITDA		$	145,343	$	4,449

	BP was self-insured with respect to the Yorktown refinery. We obtained insurance coverage for the Yorktown refinery at a cost of $2.4 million for the first six months of coverage.
(d)	The ratio minus capitalized interest of earnings to fixed charges is computed by dividing (i) earnings before income taxes plus fixed charges minus capitalized interest by (ii) fixed charges. Fixed charges consist of interest on indebtedness, amortization of debt issue costs, capitalized interest and the estimated interest component (one-third) of rental and lease expense. Earnings were insufficient to cover fixed charges by $14.6 million on a pro forma combined basis for the three months ended March 31, 2002 and by $4.1 million for the year ended December 31, 1998.
(e)	Operating data includes the operations of various Retail Group acquisitions in 1997 and 1998 and the acquisition of Phoenix Fuel in 1997.
(f)	At the end of 2001, the number of retail operating units included 149 service stations, the travel center, and one restaurant.

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MANAGEMENT’S DISCUSSION AND ANALYSIS

OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Outlook

      Our strategy is to continue to profitably operate our refining, retail marketing and Phoenix Fuel operations. The immediate strategic focus is to: (a) efficiently integrate the Yorktown refinery into our existing operations while maximizing the profitability of all of our refineries; (b) work with producers in the Four Corners area to augment crude oil supply; (c) continue to maximize the profitability of our Retail Group by increasing sales of high-margin merchandise and continuing to reduce costs; (d) continue to maximize the profitability of Phoenix Fuel by increasing wholesale fuel volumes, expanding service offerings, and broadening its wholesale customer base; (e) increase our cash flow by continuing to reduce operating expenses and eliminating non-essential capital expenditures; and (f) rationalize our asset base by selling non-strategic and underperforming assets and selectively pursuing acquisitions.

      Our earnings and cash flows from operations depend on producing or purchasing, and selling, sufficient quantities of refined products at margins sufficient to cover our fixed and variable expenses. The prices of crude oil and refined products have fluctuated substantially in recent years. These prices depend on many factors, including the demand for crude oil, gasoline and other refined products, which in turn depend on, among other factors, changes in the economy, the level of foreign and domestic production of crude oil and refined products, worldwide political conditions, the availability of imports of crude oil and refined products, the marketing of alternative and competing fuels, and the extent of government regulations. The prices we receive for refined products also are affected by local market conditions. Fluctuations in the costs of crude oil and other refinery feedstocks and the price of refined products can affect the margins we generate as well as the value of our inventory. In addition, new pipelines bringing refined products into the Four Corners market have impacted our operations and the completion of proposed pipeline projects may result in additional competition for us. The completion of these projects, however, also could result in new opportunities for us. We are, through Phoenix Fuel and our Retail Group, a net purchaser of refined products in some of these areas and would benefit from any reductions in prices for refined products resulting from increased competition.

      As a result of the declining production of crude oil in the Four Corners area since 1997, we have not been able to cost-effectively obtain sufficient amounts of comparable quality crude oil to operate our Four Corners refineries at full capacity. Our utilization has declined from 92% in 1997 to 73% in 2001. Our current projections of Four Corners crude oil production indicate that our crude oil demand will exceed the crude oil supply that is available from local sources for 2002 and the foreseeable future. If we cannot cost-effectively supplement the Four Corners crude oil with other feedstocks, the volume of refined products we produce at our Four Corners refineries will continue to decline. In addition, because a large portion of our Four Corners refineries’ costs are fixed, a sustained decrease in their utilization could affect our profitability.

      We will continue to evaluate and potentially dispose of non-strategic and underperforming assets in our retail operations. We continue to face competition in the markets in which we operate from major oil companies, independent oil companies and non-traditional gasoline marketers. We have been, and expect to continue to be, competitive in most of these markets and to realize acceptable margins. The Phoenix market has been, and continues to be, extremely competitive due to dealer tankwagon pricing. We have implemented and are evaluating new marketing strategies for our fuel and merchandise operations in order to address this increased competition.

      The mining and construction industries are significant markets for our Phoenix Fuel sales. These industries are subject to fluctuations in the general business cycle. A disruption or downturn in the business of these industries could affect the profitability of our Phoenix Fuel operations. In addition, our Phoenix Fuel operations were affected by the events of September 11, 2001 and general economic conditions. This has resulted in reduced demand for finished products and lubricants, as well as having a negative impact on finished product margins.

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Critical Accounting Policies

      Inherent in the preparation of our consolidated financial statements are the selection and application of certain accounting principles, policies, and procedures that affect the amounts that are reported. In order to apply these principles, policies, and procedures, we must make judgments, assumptions, and estimates based on the best available information at the time. Actual results may differ based on the accuracy of the information utilized and subsequent events, some of which we may have little or no control over. In addition, the methods used in applying the above may result in amounts that differ considerably from those that would result from the application of other acceptable methods.

      We describe our significant accounting policies in Note 1 of our consolidated financial statements. Certain critical accounting policies that materially affect the amounts recorded in our consolidated financial statements are the use of the last in, first-out (“LIFO”) method of valuing certain inventories, the accounting for certain environmental remediation liabilities, the accounting for certain related party transactions, and assessing the possible impairment of certain long-lived assets.

      As described in Note 1, our inventories are stated at the lower of cost or market. We determine costs for crude oil and refined products produced by the refineries, and lubricants and other merchandise of Phoenix Fuel by the LIFO method. Under this method, we charge the most recent acquisition costs to cost of sales and value inventories at the earliest acquisition costs. We selected this method because we believe it more accurately reflects the cost of our current sales. The use of this method results in reported earnings that can differ significantly from those that might be reported under a different inventory method such as the first-in, first-out (“FIFO”) method. Under the FIFO method, the earliest acquisition costs are charged to cost of sales and inventories are valued at the latest acquisition costs. If inventories had been determined using the FIFO method at December 31, 2001, 2000, and 1999, net earnings and diluted earnings per share for the years ended December 31, 2001, 2000, and 1999 would have been (lower) higher by $(6,981,000) and $(0.79), $2,935,000 and $.32, and $4,408,000 and $0.41, respectively. In addition, the use of the LIFO inventory method may result in increases or decreases to cost of sales in years that inventory volumes decline as the result of charging cost of sales with LIFO inventory costs generated in prior periods. For the years ended December 31, 2001, 2000, and 1999, cost of sales was (lower) higher by $(231,000), $(1,737,000) and $2,551,000 because of declines in inventory volumes.

      In periods of rapidly declining prices, we may have to write down LIFO inventories to market due to the higher costs assigned to LIFO volumes in prior periods. We determine market value based on estimated selling prices less applicable refining, transportation and other selling costs, generally for the month subsequent to the end of the reporting period. For the year ended December 31, 2001, declining prices resulted in the write-down of inventory values by approximately $3,302,000. Further declines in prices could result in additional write-downs.

      We have recorded various environmental remediation liabilities described in more detail in Note 16 to our consolidated financial statements. These liabilities result for the most part from past operations, including liabilities associated with past operations arising out of changes in environmental laws, and liabilities assumed in connection with acquired assets. We are conducting remediation activities in connection with these matters, including investigation, sampling, cleanup, disposal, and monitoring. We record such liabilities when environmental assessments and/or remedial efforts are probable and the costs can be reasonably estimated. We do not discount environmental liabilities to their present value and we record them without considering potential recoveries from third parties. We employ independent consultants or our own internal environmental personnel to investigate and assemble pertinent facts, recommend an appropriate remediation plan in light of regulatory standards, assist in estimating remediation costs based on existing technologies, and complete remediation according to approved plans. When we do not utilize consultants, we estimate remediation costs based on the knowledge and experience of our employees having responsibility for the remediation project. Because of the amount of uncertainty involved in the nature of our various remediation efforts and the period of time such efforts may take to complete, we base estimates on current regulatory standards. We update our estimates as needed to reflect changes in factual information, available technology, or applicable laws and regulations. Subsequent adjustments to estimates, which may be significant, often occur as more information

38

becomes available, as the requirements of government agencies are changed or clarified, or as other circumstances change.

      We have entered into various transactions with James E. Acridge, our former Chairman and Chief Executive Officer, as more fully described in “Related Party Transactions” and in Note 6 to our consolidated financial statements. Except as noted, the Board of Directors has approved these transactions. Among other things, management has obtained an independent appraisal and financial information from Mr. Acridge to assist in evaluating the accounting for, and the collectability of, a note receivable from him. As discussed in “Related Party Transactions” and Note 6, at December 31, 2001 we had fully reserved for the note receivable and related accrued interest.

      We review the carrying values of our long-lived assets for possible impairment whenever events or changes in circumstances indicate that the carrying amount of the assets to be held and used may not be recoverable. For assets to be disposed of, we report long-lived assets at the lower of the carrying amount or fair value less cost to sell. During 2001, we recorded impairment write-downs of $926,000 relating to assets held for disposal. Additionally, we have several operating service stations that are being marketed for potential sale if acceptable offers are received. We evaluated these operating stations for impairment using an undiscounted cash flow methodology. The sum of expected future cash flows for certain of the stores was less than the carrying value; accordingly, in 2001 we recorded an impairment loss of $1,293,000 based on estimated fair market values. In determining the amount of this write-down, we based the fair market value estimates upon either internally prepared estimates based on comparable sales or sales offers received. In addition, we recorded write-downs of $500,000 for other impairments. Changes in current economic conditions, assumptions regarding the timing and amounts of cash flows, or fair market value estimates could result in additional write-downs of these assets in the future.

Results of Operations

      Included below are certain operating results and operating data for us and for our operating segments.

										Three Months Ended
	Year Ended December 31,									March 31,
	2001			2000			1999			2002			2001
	(dollars in thousands, except per share data)
Net revenues	$	968,679		$	1,074,362		$	782,683		$	188,396		$	251,212
Cost of products sold		738,514			859,001			568,005			141,839			200,502
Gross margin		230,165			215,361			214,678			46,557			50,710
Operating expenses		114,260			122,650			115,599			26,411			28,848
Depreciation and amortization		33,875			33,579			31,129			8,771			8,113
Selling, general and administrative expenses		27,864			25,373			28,166			5,197			6,583
Loss on the disposal/write-down of assets		6,212			—			2,387			30			139
Allowance for related party note and interest receivable		5,409			—			—			—			—
Operating income		42,545			33,759			37,397			6,148			7,027
Interest expense		(24,098	)		(24,411	)		(23,417	)		(6,003	)		(6,043	)
Interest and investment income		1,661			1,989			2,476			64			563
Earnings before income taxes		20,108			11,337			16,456			209			1,547
Provision for income taxes		7,727			4,048			5,678			86			597
Net earnings	$	12,381		$	7,289		$	10,778		$	123		$	950

39

											Three Months Ended
		Year Ended December 31,									March 31,
		2001			2000			1999			2002			2001
		(dollars in thousands, except per share data)
Earnings per common share:
	Basic	$	1.40		$	0.79		$	1.01		$	0.01		$	0.11
	Assuming dilution	$	1.39		$	0.79		$	1.01		$	0.01		$	0.11
Net revenues:(a)
	Refining Group	$	450,226		$	518,172		$	338,300		$	82,718		$	111,190
	Retail Group		390,379			421,339			338,565			76,215			93,543
	Phoenix Fuel		391,172			443,224			272,685			75,784			109,608
	Other		244			367			677			50			72
	Intersegment(b)		(263,342	)		(308,740	)		(217,544	)		(46,371	)		(63,201	)
	Consolidated	$	968,679		$	1,074,362		$	782,683		$	188,396		$	251,212
Income (loss) from operations:(a)
	Refining Group	$	66,148		$	45,790		$	51,323		$	9,059		$	11,085
	Retail Group		5,214			31			3,790			(672	)		(362	)
	Phoenix Fuel		4,731			7,275			8,549			1,473			1,468
	Other		(21,927	)		(19,337	)		(23,878	)		(3,682	)		(5,025	)
	Loss on disposal/ write-down of assets		(6,212	)		—			(2,387	)		(30	)		(139	)
	Allowance for related party note and interest receivable		(5,409	)		—			—			—			—
Consolidated		$	42,545		$	33,759		$	37,397		$	6,148		$	7,027
Refining Group Operating Data:
	Crude oil/ NGL throughput (bpd)		33,167			35,359			38,360			33,785			33,417
	Refinery sourced sales barrels (bpd)		32,025			34,287			37,368			31,161			30,651
	Average crude oil costs ($/bbl)	$	25.00		$	29.26		$	17.64		$	18.90		$	27.90
	Refining margins ($/bbl)	$	9.69		$	7.63		$	6.89		$	7.36		$	8.23
Retail Group Operating Data:
	Fuel gallons sold (in thousands)		212,116			234,823			239,864			48,237			51,358
	Fuel margins ($/gal)	$	0.1618		$	0.1603		$	0.1717		$	0.131		$	0.151
	Merchandise sales	$	144,531		$	138,544		$	118,894		$	32,837		$	32,826
	Merchandise margins		28.7	%		29.0	%		28.9	%		27.7	%		30.2	%
	Number of operating units at end of period		151	(c)		180			173			150			171
Phoenix Fuel Operating Data:
	Fuel gallons sold (in thousands)		394,158			424,290			351,949			92,471			104,920
	Fuel margins ($/gal)	$	0.0498		$	0.0524		$	0.0644		$	0.052		$	0.049
	Lubricant sales	$	22,347		$	24,210		$	22,067		$	5,387		$	5,053
	Lubricant margins		16.6	%		16.4	%		15.2	%		16.5	%		18.3	%

(a)  Our Refining Group, as presented for the periods described above, consists of our two Four Corners refineries, our fleet of crude oil and finished product truck transports, our crude oil pipeline gathering operations, and our finished product terminaling operations. In the future, it also will include the Yorktown refinery that we acquired on May 14, 2002. Our Retail Group consists of service stations with convenience stores or kiosks and a travel center. Phoenix Fuel is an industrial/commercial petroleum fuels

40

and lubricants distribution operation, which includes a number of bulk distribution plants, cardlock (unmanned fleet fueling) operations and a fleet of finished product truck transports. The Other category is primarily corporate staff operations.

 (b)  The intersegment sales elimination represents intercompany transactions primarily from the Refining Group to the Retail Group, the Refining Group to Phoenix Fuel, and Phoenix Fuel to the Retail Group.

 (c)  Includes 149 service stations, the travel center and one restaurant.

      In the second quarter of 2000, we changed our methodology for treating product purchased to supply our retail operations and, as a result, certain segment information for the Refining Group is not comparable with that reported for 2000. This change in methodology had no effect on gross margin or net income.

Comparison of the Three Months Ended March 31, 2002 and March 31, 2001

Earnings Before Income Taxes

      For the three months ended March 31, 2002, earnings before income taxes were $209,000, a decrease of $1,338,000 from $1,547,000 for the three months ended March 31, 2001. The decrease was primarily due to an 11% decrease in refinery margins; an 8% decline in retail merchandise margins on relatively flat sales, although same store merchandise sales were up approximately 6%; a 14% decrease in retail fuel margins; a 9% decrease in wholesale fuel volumes sold by Phoenix Fuel to third-party customers; higher depreciation and amortization costs; and higher net interest expense. These decreases were offset in part by reduced operating expenses, lower selling, general, and administrative expenses (“SG&A”), a 5% increase in Phoenix Fuel finished product margins, and a 2% increase in refinery sourced finished product sales volumes.

Revenues

      Revenues for the three months ended March 31, 2002, decreased approximately $62,816,000 or 25% to $188,396,000 from $251,212,000 in the comparable 2001 period. The decrease was primarily due to a 28% decline in refinery weighted average selling prices; a 15% decrease in Phoenix Fuel’s weighted average selling prices, along with a 9% decline in wholesale fuel volumes sold by Phoenix Fuel to third-party customers; and a 19% decrease in retail refined product selling prices, along with a 6% decline in retail fuel volumes sold. These increases were partially offset by a 2% increase in refinery sourced finished product sales volumes.

      The volumes of refined products sold through our retail units decreased approximately 6% from period to period. The volume declines were primarily related to the sale or closure of 29 retail units since the end of 2000. The volume of finished product sold from retail units that were in operation for a full year in each period increased approximately 2%, in spite of reduced volumes from stores in our Phoenix market area because of increased price competition. Volumes sold from our travel center increased approximately 15%.

Cost of Products Sold

      For the three months ended March 31, 2002, cost of products sold decreased $58,663,000 or 29% to $141,839,000 from $200,502,000 in the comparable 2001 period. The decrease was primarily due to a 17% decline in the cost of finished products purchased by Phoenix Fuel, along with a 9% decrease in wholesale fuel volumes sold by Phoenix Fuel to third-party customers, and a 32% decline in weighted average crude oil costs. These decreases were partially offset by a 2% increase in refinery sourced finished product sales volumes.

Operating Expenses

      For the three months ended March 31, 2002, operating expenses decreased approximately $2,437,000 or 8% to $26,411,000 from $28,848,000 in the comparable 2001 period. The decrease was due to, among other things, lower lease expense due to the repurchase of 59 retail units from FFCA Capital Holding Corporation (“FFCA”) in July 2001 that had been sold to FFCA as part of a sale-leaseback transaction between us and FFCA in December 1998, and reduced expenses for payroll and related costs and other operating expenses for

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retail operations, due in part to the closure of 29 retail units since the end of 2000, as well as the implementation of certain cost reduction programs. These decreases were offset in part by higher general insurance premiums.

Depreciation and Amortization

      For the three months ended March 31, 2002, depreciation and amortization increased approximately $658,000 or 8% to $8,771,000 from $8,113,000 in the comparable 2001 period. The increase was primarily related to additional depreciation expense related to the repurchase of 59 retail units from FFCA in July 2001; higher refinery amortization costs in 2002 due to a revision in the estimated amortization period for certain refinery turnaround costs incurred in 1998; and construction, remodeling and upgrades in retail and refining operations during 2001. These increases were offset in part by reductions in depreciation expense due to the closure or sale of 29 retail units since the end of 2000 and the nonamortization of goodwill in 2002 due to the adoption of SFAS 142.

Selling, General and Administrative Expenses

      For the three months ended March 31, 2002, selling, general and administrative expenses decreased approximately $1,386,000 or 21% to $5,197,000 from $6,583,000 in the comparable 2001 period. The decrease was primarily due to the revision of estimated accruals for 2001 management incentive bonuses, following the determination of bonuses to be paid to employees; lower claims experience for our self-insured health insurance plan; and lower workers compensation costs.

Interest Expense, Net

      For the three months ended March 31, 2002, net interest expense (interest expense less interest income) increased approximately $459,000 or 8% to $5,939,000 from $5,480,000 in the comparable 2001 period. The increase was primarily due to a reduction in interest and investment income from the investment of funds in short-term instruments. This reduction in interest and investment income was due in part to a reduction in the amount of funds available for investment because of the repurchase of 59 retail units from FFCA in July 2001 and a $10,000,000 deposit made in February 2002 in connection with the acquisition of the Yorktown refinery.

Income Taxes

      The effective tax rate for the three months ended March 31, 2002 was approximately 41% and for the three months ended March 31, 2001 was approximately 39%. The difference in the two rates is primarily due to the relationship of permanent tax differences to estimated annual income used in each period to estimate quarterly income taxes.

Comparison of the Years Ended December 31, 2001 and December 31, 2000

Earnings Before Income Taxes

      For the year ended December 31, 2001, earnings before income taxes were $20,108,000, an increase of $8,771,000 from earnings before income taxes of $11,337,000 for the year ended December 31, 2000. The increase was primarily due to a 27% increase in refinery margins, due in part to a reduction in crude oil costs resulting from contract negotiations with suppliers; lower operating expenses, including depreciation and amortization; and a 4% increase in retail merchandise sales with relatively flat margins year-to-year. These increases were offset in part by a 7% decline in refinery sourced finished product sales volumes, due in part to reduced crude oil production and competitive conditions in the Four Corners area; a 10% decline in wholesale fuel volumes sold by Phoenix Fuel to third party customers, due in part to a slowdown in the commercial/industrial sector in Arizona and increased volumes sold in the third quarter of 2000 related to increased diesel demand because of disruptions of natural gas supplies into Arizona; a 5% decrease in Phoenix Fuel finished product margins; and an increase in SG&A.

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      In addition, 2001 earnings before income taxes were reduced by $6,212,000 as the result of losses on the disposal/write-down of various refining and retail assets and by $5,409,000 due to the recording of a reserve for a note and interest receivable from Mr. Acridge, as discussed in “Related Party Transactions” and in Note 6 to our consolidated financial statements.

Revenues

      Revenues for the year ended December 31, 2001, decreased approximately $105,683,000 or 10% to $968,679,000 from $1,074,362,000 in the comparable 2000 period. The decrease was due to, among other things, a 10% decline in wholesale fuel volumes sold by Phoenix Fuel to third party customers, due in part to the factors stated above, along with a 6% decrease in related finished product selling prices; an 8% decline in refinery average selling prices, along with a 7% decrease in refinery sourced finished product sales volumes; and a 13% decline in retail refined product selling prices. These decreases were partially offset by a 4% increase in retail merchandise sales.

      The volumes of finished products sold through our retail units decreased approximately 10% from 2000 levels. We closed 20 and sold 19 service stations and opened or acquired three since the beginning of 2000. The volume of finished product sold from service stations that were in operation for a full year in each period decreased approximately 4%. These declines were primarily due to increased price competition in our Phoenix and Tucson markets. Volumes sold from our travel center declined approximately 6%, due in part to direct competition from a truck stop/casino that opened in 2001. This decrease in volume was mitigated as we supplied products to this new truck stop/casino.

Cost of Products Sold

      For the year ended December 31, 2001, cost of products sold decreased $120,487,000 or 14% to $738,514,000 from $859,001,000 in the comparable 2000 period. The decrease was due in part to a 15% decline in average crude oil costs; a 10% decline in wholesale fuel volumes sold by Phoenix Fuel to third party customers, along with a 5% decrease in the cost of finished products purchased; and a 7% decline in refinery sourced finished product sales volumes. These decreases were partially offset by a 4% increase in retail merchandise sales. In addition, 2001 cost of products sold increased by approximately $3,302,000 as a result of a reduction in the carrying value of inventories related to declines in crude oil and refined product prices.

      For the year 2001, certain lower cost refinery LIFO inventory layers were liquidated, which resulted in a decrease in the cost of products sold of approximately $231,000. For the year 2000, certain lower cost Phoenix Fuel LIFO inventory layers were liquidated, which resulted in a decrease in the cost of products sold of approximately $1,737,000.

Operating Expenses

      For the year ended December 31, 2001, operating expenses decreased approximately $8,390,000 or 7% to $114,260,000 from $122,650,000 in the comparable 2000 period. The decrease was due to, among other things, reduced expenses for payroll and related costs for retail operations, including operating bonuses, along with a reduction in other operating expense categories, due in part to the closure of 20 and sale of 19 service stations during 2000 and 2001; lower lease expense due to the repurchase of 59 service stations from FFCA in July 2001, which had been sold as part of a sale-leaseback transaction between us and FFCA in December 1998; decreased payroll and related costs and repair and maintenance expenses for Phoenix Fuel; and lower chemical and additive costs and reduced purchase fuel costs for the refineries. These decreased costs were offset in part by higher refinery costs for materials, contract labor, and utilities.

Depreciation and Amortization

      For the year ended December 31, 2001, depreciation and amortization increased approximately $296,000 or 1% to $33,875,000 from $33,579,000 in the comparable 2000 period. The increase was primarily related to the repurchase of 59 service stations from FFCA in July 2001; newly acquired service stations; the

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capitalization of the 2000 contingent payment related to the acquisition of the Bloomfield refinery discussed in more detail in Note 3 to our consolidated financial statements; and construction, remodeling and upgrades in retail and refining operations during 2000 and 2001. These increases were offset in part by lower refinery turnaround amortization costs in 2001.

Selling, General and Administrative Expenses

      For the year ended December 31, 2001, SG&A increased approximately $2,491,000 or 10% to $27,864,000 from $25,373,000 in the comparable 2000 period. The increase was primarily due to increased expense accruals for bonuses paid under our management incentive bonus plan in January 2002; certain outside legal expenditures, including expenditures related to transactions involving Mr. Acridge or related entities; certain consulting expenditures; certain related party transactions discussed in more detail in “Related Party Transactions” and in Note 6 to our consolidated financial statements; and accruals for certain environmental costs. These increases were offset in part by lower self-funded group health insurance costs in 2001 due to improved claims experience, severance pay costs incurred in the first quarter of 2000 relating to a reorganization and staff reduction program, and expenditures incurred in 2000 for certain strategic planning costs.

Loss on the Disposal/ Write-down of Assets

      For the year ended December 31, 2001, we recorded a pre-tax loss on the disposal/write-down of assets of $6,212,000. This amount included losses of $609,000 on the sale of assets in the ordinary course of business, primarily related to the sale of 11 service stations; losses of $2,719,000 on the write-down of assets due to impairment, resulting from the application of Statement of Financial Accounting Standard (“SFAS”) No. 121 due to a strategy to sell certain service stations, some of which were closed; losses of $592,000 relating to the value of leasehold improvements included in leased service stations returned to the lessors; and losses of $2,292,000 primarily related to the retirement or replacement of certain refinery property, plant, and equipment. In addition, we recorded a reserve in the amount of $5,409,000 for a note and interest receivable from Mr. Acridge as discussed in “Related Party Transactions” and in Note 6 to our consolidated financial statements.

Interest Expense (Income)

      For the year ended December 31, 2001, interest expense decreased approximately $313,000 or 1% to $24,098,000 from $24,411,000 in the comparable 2000 period. The decrease was primarily due to interest expense in 2000 related to borrowings under our revolving credit facility.

      For the year ended December 31, 2001, interest and investment income decreased approximately $328,000 or 16% to $1,661,000 from $1,989,000 in the comparable 2000 period. The decrease was primarily due to a decline in the amount of funds available for investment in short-term instruments, as a result of the FFCA repurchase.

Income Taxes

      The effective tax rate for the year ended December 31, 2001 was approximately 38% and for the year ended December 31, 2000 was approximately 35%. The difference in the rates was primarily the result of coal seam gas tax and state pollution control credits utilized in 2000.

Comparison of the Years Ended December 31, 2000 and December 31, 1999

Earnings Before Income Taxes

      For the year ended December 31, 2000, earnings before income taxes were $11,337,000, a decrease of $5,119,000 from earnings before income taxes of $16,456,000 for the year ended December 31, 1999. The decrease was primarily due to higher operating expenses, including depreciation and amortization; an 8% decline in refinery sourced finished product sales volumes, due in part to reduced crude oil production in the

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Four Corners area, competitive conditions and, in the first quarter of 2000, to customers using inventory they had stored at the end of 1999 in anticipation of potential Y2K problems; a 7% decline in retail fuel margins; and a 19% decline in Phoenix Fuel finished product margins. These decreases were offset in part by an 11% increase in refinery margins, due in part to a reduction in crude oil costs resulting from contract negotiations with suppliers; a 17% increase in retail merchandise sales with relatively flat margins year-to-year; a reduction in SG&A; and a 5% increase in wholesale fuel volumes sold by Phoenix Fuel to third party customers.

      In addition, 1999 earnings were reduced as the result of the write-off of $2,387,000 in net book value of assets that were either demolished for new construction or replaced with new systems.

Revenues

      Revenues for the year ended December 31, 2000, increased approximately $291,679,000 or 37% to $1,074,362,000 from $782,683,000 in the comparable 1999 period. The increase was due to, among other things, a 48% increase in refinery weighted average selling prices; a 41% increase in Phoenix Fuel weighted average selling prices, along with a 5% increase in wholesale fuel volumes sold to third party customers, due in part to increased diesel demand related to allocations and disruptions of natural gas supplies into Arizona, primarily in the third quarter of 2000; and a 17% increase in retail merchandise sales. This increase was partially offset by an 8% decline in refinery sourced finished product sales volumes.

      The volumes of refined products sold through our retail units decreased approximately 2% from 1999 levels. The volume of finished product sold from service stations that were in operation for a full year in each period decreased approximately 3%, while volumes sold from our travel center declined approximately 5%. These declines were offset in part by volumes sold from nine Giant constructed and remodeled service stations, opened in 1999 and 2000, that exceeded the volumes lost from the sale of 10 units during the same period.

Cost of Products Sold

      For the year ended December 31, 2000, cost of products sold increased $290,996,000 or 51% to $859,001,000 from $568,005,000 in the comparable 1999 period. The increase was due in part to a 66% increase in average crude oil costs, despite negotiated supply cost reductions; a 45% increase in the cost of finished products purchased by Phoenix Fuel, along with a 5% increase in wholesale fuel volumes sold to third party customers; and a 17% increase in retail merchandise sales. These increases were partially offset by an 8% decline in refinery sourced finished product sales volumes.

      For the year 2000, certain lower cost Phoenix Fuel LIFO inventory layers were liquidated which resulted in a decrease in the cost of products sold of approximately $1,737,000. For the year 1999, certain higher cost refinery LIFO inventory layers were liquidated which resulted in an increase in the cost of products sold of approximately $2,551,000.

Operating Expenses

      For the year ended December 31, 2000, operating expenses increased approximately $7,051,000 or 6% to $122,650,000 from $115,599,000 in the comparable 1999 period. The increase was due to, among other things, increased retail operating costs related to new service stations opened or acquired in 1999 and 2000, including wages and related costs, and increased retail credit card processing fees resulting from an increase in the number of transactions, as well as the average dollar amount of each transaction due to higher fuel prices. There also were higher costs and increased volumes of purchased fuel for the refineries, along with higher expenditures for catalyst, chemicals and additives. These increases were offset in part by lower lease expenses due to the repurchase of 24 service stations in the third and fourth quarters of 1999, which had originally been sold to FFCA as part of a sale-leaseback transaction completed in December 1998, and reduced expense accruals for refinery related management incentive bonuses. In addition, 2000 reflects reduced retail advertising costs, as well as reduced expenditures for other promotional programs.

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Depreciation and Amortization

      For the year ended December 31, 2000, depreciation and amortization increased approximately $2,450,000 or 8% to $33,579,000 from $31,129,000 in the comparable 1999 period. The increase was primarily related to newly acquired service stations; construction, remodeling and upgrades in retail and refining operations during 1999 and 2000; the capitalization of the 1999 contingent payment related to the acquisition of the Bloomfield Refinery; the amortization of refinery turnaround costs; and the repurchase of 24 service stations sold as part of a sale-leaseback transaction between us and FFCA in December 1998. The increase was offset in part by reduced depreciation and amortization in 2000 resulting from the sale of certain natural gas properties that were being amortized in 1999 and the 1999 adjustment of the value of certain real estate assets held for sale.

Selling, General and Administrative Expenses

      For the year ended December 31, 2000, SG&A decreased approximately $2,793,000 or 10% to $25,373,000 from $28,166,000 in the comparable 1999 period. The decrease was primarily due to a more normal contribution of $825,000 to our former Employee Stock Ownership Plan (“ESOP”) in 2000, after a larger than normal $3,000,000 contribution in 1999; lower expenses for the estimated costs of incentive bonuses and accruals for other employee benefits made in 2000 as compared to 1999; and reduced costs related to a reorganization and staff reduction program implemented in the first quarter of 2000. The decrease was offset in part by severance pay costs incurred in 2000 relating to the reorganization and staff reduction program, certain strategic planning costs, and higher wages and related costs. In addition, 1999 costs were reduced because of insurance reimbursements received relating to prior workers compensation claims that we had paid.

Interest Expense (Income)

      For the year ended December 31, 2000, interest expense increased approximately $994,000 or 4% to $24,411,000 from $23,417,000 in the comparable 1999 period. The increase was due in part to additional interest expense related to borrowings from our revolving credit facility in the first six months of 2000 and the capitalization of more interest in 1999.

      For the year ended December 31, 2000, interest and investment income decreased approximately $487,000 or 20% to $1,989,000 from $2,476,000 in the comparable 1999 period. The decrease was primarily due to a decline in the amount of funds available for investment in short-term instruments.

Income Taxes

      The effective tax rate for each of the years ended December 31, 2000 and 1999 was approximately 35%. These rates were somewhat lower than our expected effective tax rate of between 39% and 40% because of coal seam gas tax and state pollution control credits utilized in 2000 and the resolution of various tax matters and deferred tax adjustments in 1999.

Liquidity and Capital Resources

      Our primary sources of liquidity are cash we expect to generate from operating activities, our existing cash balances and, if necessary, future borrowings under our revolving credit agreement.

      On May 14, 2002, we purchased the 61,900 bpd Yorktown refinery for $127,500,000, plus the value of inventory at closing, or $65,200,000, the assumption of certain liabilities, and an earn-out, the maximum amount of which cannot exceed $25,000,000. See “Yorktown Acquisition Agreements.”

      As more fully described below under “Capital Structure,” we have used the proceeds from the sale of the outstanding notes, together with cash on hand and borrowings under our new $100,000,000, three-year senior secured revolving credit facility and our new $40,000,000, three-year senior secured mortgage loan facility, to consummate the Yorktown acquisition, redeem all $100,000,000 of our 9  3/4% notes, and pay related transaction fees and expenses. See “Use of Proceeds.”

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Cash Flows

      Operating cash flows decreased for the three months ended March 31, 2002 compared to the three months ended March 31, 2001, primarily as a result of a decrease in cash flows related to changes in operating assets and liabilities in each period, along with a decrease in net earnings in 2002. Net cash used by operating activities totaled $2,562,000 for the three months ended March 31, 2002, compared to net cash provided by operating activities of $7,777,000 in the comparable 2001 period.

      Net cash provided by operating activities totaled $65,256,000 for 2001 compared to $29,492,000 for 2000. Operating cash flows increased for 2001, primarily as a result of an increase in net earnings and related non-cash adjustments in 2001, along with an increase in cash flows related to changes in working capital in each period.

      Working capital at March 31, 2002 consisted of current assets of $130,453,000 and current liabilities of $78,228,000, or a current ratio of 1.67:1. At December 31, 2001, the current ratio was 1.72:1 with current assets of $135,981,000 and current liabilities of $78,837,000.

      Current assets have decreased since December 31, 2001, primarily due to a decrease in cash and cash equivalents. These decreases were offset in part by increases in accounts receivable and inventories. Accounts receivable have increased primarily due to an increase in trade receivables resulting from increased sales volumes and higher finished product selling prices. Inventories have increased primarily due to an increase in refined product prices and exchange, terminal, and refinery onsite refined product inventory volumes. These increases were offset in part by a decrease in Phoenix Fuel and retail refined product inventory volumes.

      Current liabilities have decreased slightly since December 31, 2001, due to a decrease in accrued expenses, offset in part by an increase in accounts payable. Accrued expenses have decreased primarily as a result of the payment and reversal of 2001 accrued bonuses, the payment of 401(k) company matching and discretionary contributions, and the payment of certain accrued interest balances. These decreases were offset in part by higher balances in accounts that were subsequently paid to our self-insured health insurance trust and 2002 accruals for 401(k) company matching and discretionary contributions. Accounts payable have increased primarily as a result of higher raw material and finished product costs.

      Working capital at December 31, 2001 consisted of current assets of $135,981,000 and current liabilities of $78,837,000, or a current ratio of 1.72:1. At December 31, 2000, the current ratio was 1.49:1 with current assets of $165,184,000 and current liabilities of $110,690,000.

      Current assets decreased during 2001, primarily due to a decrease in trade receivables. This decrease was offset in part by an increase in inventories. Trade receivables decreased due to a decrease in weighted average selling prices and lower sales volumes in December 2001 as compared to December 2000. Inventories increased primarily due to an increase in the volumes of refinery crude oil and refinery and Phoenix Fuel refined products on hand. These increases were offset in part by a decline in weighted average inventory costs, along with a decrease in certain retail refined product volumes.

      Current liabilities decreased due to decreases in accounts payable and accrued expenses. Accounts payable decreased primarily as a result of a decrease in the cost of certain raw materials and finished products. In addition, two months of natural gas liquids purchases were included in accounts payable at December 31, 2000, due to the timing of year-end payments. Accrued expenses decreased primarily as a result of the payment of the final accrued contingent payment related to the 1995 acquisition of the Bloomfield refinery more fully discussed in Note 3 to our consolidated financial statements, lower accruals for federal and state excise taxes, settlement and payment of certain legal matters previously accrued for, and lower or reduced accruals for refinery purchased fuel and utilities. These decreases were offset in part by increased accruals for bonus, profit sharing and retirement plans.

      Net cash used in investing activities for the purchase of property, plant and equipment totaled approximately $2,332,000 for the three months ended March 31, 2002. Expenditures were primarily for financial accounting software upgrades, operational and environmental projects for the refineries, and retail

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operation upgrades. In addition, we made a deposit of $10,000,000 in connection with the acquisition of the Yorktown refinery.

      Net cash used by investing activities of $59,908,000 for 2001 included (a) $57,056,000 for purchases of property, plant and equipment, including $38,052,000 for the repurchase of 59 service stations from FFCA in July 2001 and expenditures for, among other things, certain major maintenance turnaround costs for the Bloomfield refinery, the acquisition and replacement of certain pipeline assets, operational and environmental projects for the refineries, and remodeling and upgrades for retail operations; (b) $5,139,000, representing the final contingent payment required under the purchase agreement relating to our 1995 acquisition of the Bloomfield refinery (the contingent payments are considered additional purchase price, were allocated to the appropriate assets and are being amortized over their remaining useful lives); and (c) $5,602,000 for the purchase of a parcel of land, which we call the Jomax Property, including the purchase of an option and right of first refusal granted by us, from a trust of which Mr. Acridge is the beneficiary, all as more fully described in “Related Party Transactions.” In addition, we received proceeds of $7,889,000 from the sale of property, plant and equipment and other assets in 2001, primarily from the sale of 11 service stations, a bulk petroleum distribution plant, and certain vacant land.

      In December 1998, we sold 83 service stations to FFCA for $51,763,000 and leased them back. Net proceeds to us, after expenses, were $50,124,000. In the second half of 1999, we repurchased 24 of the service stations for $13,711,000, plus closing costs and, in July 2001, we repurchased the remaining 59 service stations for $38,052,000 plus closing costs. These amounts were equal to the original selling prices of the units. Certain deferrals on our consolidated balance sheet relating to the sale-leaseback transaction, including a deferred gain on the original sale to FFCA and deferred lease allocations included in “Other Liabilities and Deferred Income,” and deferred costs associated with the original sale included in “Other Assets,” reduced the value of the assets recorded in property, plant and equipment by $1,736,000. The repurchase of these service stations in 2001 will reduce our average annual lease expense by $4,500,000, while depreciation expense will increase $2,600,000 annually. We repurchased these service stations with cash balances that had been generated, principally from the higher refining margins we experienced during the year, and the lack of pre-payable debt available to us to apply these cash amounts.

      Net cash used in investing activities of $23,424,000 for 2000 included (a) $22,455,000 for, among other things, the assignment of certain leases/subleases to us associated with nine service stations located on the Navajo and Zuni Indian Reservations, the acquisition of an interest in five service stations located on the Navajo Indian Reservation, certain maintenance turnaround costs, operational and environmental projects for the refineries, construction, remodeling and upgrades of retail operations, and the acquisition of customer loaned equipment and construction costs related to the remodeling of a cardlock location for Phoenix Fuel; and (b) $5,442,000, representing the contingent payment required under the purchase agreement relating to our 1995 acquisition of the Bloomfield refinery. In addition, we received proceeds of $4,473,000 from the sale of property, plant and equipment and other assets in 2000, primarily from the sale of eight service stations and certain natural gas properties.

      For the three months ended March 31, 2002, net cash used by financing activities of approximately $1,564,000 relates to fees paid to various financial institutions in connection with financing arrangements for our acquisition of the Yorktown refinery.

      Net cash used by financing activities of $5,640,000 in 2001 included the purchase of 417,300 shares of our common stock, including 400,000 shares purchased from Mr. Acridge, as more fully described in “Related Party Transactions,” for $3,674,000 and the repayment of $1,429,000 of debt. Net cash used by financing activities of $12,395,000 for 2000 included the purchase of $12,157,000 of common stock, including the purchase of 1,169,414 shares for $10,525,000 plus expenses of approximately $213,000 pursuant to a tender offer that closed on February 8, 2000.

Capital Spending

      We have recently revised our budget for capital spending for our Ciniza and Bloomfield refineries. We have budgeted $18,914,000 for capital expenditures in 2002, excluding the Yorktown acquisition and any

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related capital expenditures, and any other potential acquisitions. Of this amount, $4,233,000 is for the completion of projects that were started in 2001. In addition, $10,298,000 is budgeted for non-discretionary projects, including $5,600,000 of maintenance capital expenditures, that are required by law or regulation or to maintain the physical integrity of existing assets. These expenditures are primarily for operational and environmental projects at our Four Corners refineries, including $2,600,000 for a partial turnaround at the Ciniza refinery. The remaining budget of $4,383,000 is for general capital expenditure contingencies and discretionary projects. We expect that maintenance capital expenditures will be approximately $5,500,000 annually over each of the next three years, exclusive of any growth projects, acquisitions, and acquisition related capital expenditures.

      For our Retail Group and Phoenix Fuel, we have budgeted a combined $4,700,000 for capital expenditures in 2002, related primarily to projects designed to maintain the physical appearances of our service stations. We expect that capital expenditures for our Retail Group and Phoenix Fuel will be approximately $3,300,000 annually over each of the next three years, exclusive of acquisitions and acquisition-related capital expenditures.

      Much of the capital currently budgeted for environmental compliance is integrally related to operations or to operationally required projects. We do not specifically identify capital expenditures related to such projects on the basis of whether they are for environmental as opposed to economic purposes. With respect to capital expenditures budgeted primarily to satisfy environmental regulations, we estimate that approximately $1,900,000, $1,100,000 and $900,000 were spent in 2001, 2000 and 1999, respectively, and that approximately $1,700,000 will be spent in 2002. With respect to our operating expenses for environmental compliance, while we do not keep records specifically identifying or allocating such expenditures, we believe that we incur significant operating expense for such purposes.

      For the Yorktown refinery, we have budgeted $6,569,000 for capital expenditures for the period of 2002 after we acquired it. Of this amount, $3,795,000 is budgeted for non-discretionary projects that are required by law or regulation or to maintain the physical integrity of existing assets. In addition, $2,374,000 is for the replacement of information services that were historically provided by BP, and $400,000 is to increase the rack capacity at the refinery. We expect that maintenance capital expenditures for the Yorktown refinery will be approximately $7,800,000 annually over each of the next three years, exclusive of any growth projects, acquisitions, and acquisition related capital expenditures.

      We continue to investigate other capital improvements to our existing facilities. The amount of capital projects that are actually undertaken in 2002 will depend on, among other things, general business conditions and results of operations. We also are evaluating the possible sale or exchange of other non-strategic or underperforming assets. Changes in the tax laws, changes in federal and state clean air and clean fuel requirements and other changes in environmental laws and regulations also may increase future capital and operating expenditure levels.

Turnaround Costs

      Each refinery operating unit requires regular maintenance, as well as repair and upgrade shutdowns (referred to as “turnarounds”), during which it is not in operation. Turnaround cycles vary for different units. In general, a major refinery turnaround is scheduled every four years. The Ciniza refinery had such a turnaround in 1998 at a cost of approximately $7,200,000. The Bloomfield refinery had a major turnaround in the fourth quarter of 2001 at a cost of approximately $4,500,000. The Yorktown refinery had a major turnaround in 2001 at a cost of approximately $9,700,000.

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      The following table summarizes the turnaround schedule for the refineries and estimated costs over the next five years:

Refinery	Year Scheduled		Maintenance Procedure		Estimated Cost
					(in millions)
Ciniza		2002		Alkylation Unit and Crude Unit	$	2.6
		2003		Catalytic Cracking Unit	$	3.0
Bloomfield		2005		Complete Turnaround	$	4.0
Yorktown		2003		Crude and Coker Unit	$	7.0
		2006		Catalytic Cracking Unit	$	10.0

      Historically, we expensed current maintenance charges and capitalized turnaround costs. Capitalized costs are then amortized over the estimated period until the next turnaround. The American Institute of Certified Public Accountants has issued an Exposure Draft for a Proposed Statement of Position “Accounting for Certain Costs and Activities Related to Property, Plant and Equipment” that is expected to require companies to expense the non-capital portion of major maintenance costs as incurred. The statement is expected to require that any existing unamortized deferred non-capital major maintenance costs be expensed immediately. The exposure draft indicates that this change will be required to be adopted for fiscal years beginning after June 15, 2002, and that the effect of expensing existing unamortized deferred non-capital major maintenance costs will be reported as a cumulative effect of an accounting change in the consolidated statement of operations. At December 31, 2001, we had $12,769,000 of turnaround costs, classified as machinery and equipment, included in property, plant and equipment. We have not determined the amount, if any, of these costs that could be capitalized under the provisions of the exposure draft.

Capital Structure

      At March 31, 2002 and December 31, 2001, our long-term debt was 65.3% of total capital and our net debt (long-term debt less cash and cash equivalents) to total capitalization percentages were 64.4% and 62.8%, respectively.

      At December 31, 2001 and December 31, 2000, our long-term debt was 65.3% and 66.9% of total capital, respectively, and our net debt (long-term debt less cash and cash equivalents) to total capitalization percentages were 62.8% and 64.4%, respectively. At December 31, 2001, we had $256,749,000 of long-term debt outstanding, excluding the current portion, compared to $258,009,000 at December 31, 2000. At December 31, 2001 our long-term debt primarily consisted of $150,000,000 of 9% senior subordinated notes due 2007 and $100,000,000 of 9 3/4% notes. The indentures supporting these notes contain restrictive covenants that, among other things, restrict our ability, and the ability of our subsidiaries, to create liens, to incur or guarantee debt, to pay dividends, to repurchase shares of our capital stock, to sell certain assets or subsidiary stock, to engage in mergers, to engage in transactions with affiliates or to alter our line of business. These notes are guaranteed by all of our subsidiaries on a senior subordinated basis. As described below, as part of the related financing transactions we entered into in conjunction with the Yorktown acquisition, we redeemed all of the outstanding 9 3/4% notes on June 28, 2002. See “Use of Proceeds” and “Description of Other Debt.”

      In addition, we had a $65,000,000 senior secured revolving credit agreement that was to mature November 14, 2003. This credit agreement was primarily a working capital and letter of credit facility and was secured by eligible accounts receivable and inventories as defined in the credit agreement. Availability under the credit agreement was the lesser of (a) $65,000,000, or (b) the amount determined under a borrowing base calculation tied to the eligible accounts receivable and inventories. At March 31, 2002, the availability of funds under the credit agreement was $65,000,000. There were no direct borrowings outstanding under this facility at March 31, 2002, and there were approximately $3,286,000 of irrevocable letters of credit outstanding, primarily to insurance companies and regulatory agencies. The interest rate applicable to the credit agreement was tied to various short-term indices. At March 31, 2002, this rate was approximately 4% per annum. We were required to pay a quarterly commitment fee ranging from 0.325% to 0.500% per annum of the unused amount of the facility. The exact rate depended on meeting certain

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conditions in the credit agreement. On May 14, 2002, we replaced this credit agreement with a new $100,000,000 million, three-year, senior secured revolving credit facility. For a description of the new senior, secured revolving credit facility, see “Description of Other Debt.”

      We have used the proceeds from the sale of the outstanding notes, together with cash on hand and initial borrowings under a new $100,000,000, three-year, senior secured revolving credit facility and a new $40,000,000, three-year, senior secured mortgage loan facility to consummate the Yorktown acquisition, redeem all $100,000,000 of our 9 3/4% notes, and pay related transaction fees and expenses of approximately $15,000,000. For a description of the new senior secured revolving credit facility, the new senior secured mortgage loan facility and the Exchange Notes, see “Description of Other Debt” and “Description of the Exchange Notes.”

      Our senior subordinated rating was recently downgraded due to the acquisition of the Yorktown refinery, which was primarily debt financed. This should not have an impact on our ability to borrow funds under our new senior secured revolving credit facility or trigger any event of default under our outstanding notes. We presently have senior subordinated ratings of B3 from Moody’s Investor Services and B from Standard & Poor’s.

      We anticipate that our working capital, including that necessary for capital expenditures and debt service, will be funded through our cash balances, cash generated from operating activities, and borrowings expected to be available under our new senior secured revolving credit facility. Our future liquidity, both short and long-term, will continue to be primarily dependent on producing or purchasing, and selling, sufficient quantities of refined products at margins sufficient to cover fixed and variable expenses. We believe we will have sufficient working capital to meet our needs over the next 12-month period.

      Our operations are subject to fluctuations in supply and demand that could adversely affect costs and selling prices, and in return margins realized. Any long-term adverse relationships between costs and prices could impact our ability to generate sufficient operating cash flows to meet our working capital needs. In addition, our ability to borrow funds under our new senior secured revolving credit facility could be adversely impacted by low product prices that could limit the availability of funds by reducing the borrowing base tied to eligible accounts receivable and inventories. See “Description of Other Debt — New Senior Secured Resolving Credit Facility.” In addition, our new senior secured revolving credit facility also contains certain restrictive covenants that could limit our ability to borrow funds if certain thresholds are not maintained. Although the above factors could impact our ability to generate or access funds, we are not aware of any limiting factors at this time.

      Included in the tables below are lists of our existing obligations and commitments to make future payments under contracts and under commercial commitments as of March 31, 2002.

	Payments Due
													All
													Remaining
Contractual Obligations	Total		2002		2003		2004		2005		2006		Years
Long-term debt	$	250,079,000	$	33,000	$	100,029,000	$	17,000	$	—	$	—	$	150,000,000
Capital lease obligations		6,703,000		—		—		—		—		—		6,703,000
Operating leases		18,256,000		3,454,000		3,414,000		2,577,000		1,711,000		1,096,000		6,004,000
Total contractual cash obligations	$	275,038,000	$	3,487,000	$	103,443,000	$	2,594,000	$	1,711,000	$	1,096,000	$	162,707,000

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	Amount of Commitment Expiration
													All
													Remaining
Other Commercial Commitments	Total		2002		2003		2004		2005		2006		Years
Lines of credit (including standby letters of credit)	$	65,000,000	$	—	$	65,000,000	$	—	$	—	$	—	$	—
Standby letters of credit		3,286,000		3,286,000		—		—		—		—		—
Total commercial commitments	$	68,286,000	$	3,286,000	$	65,000,000	$	—	$	—	$	—	$	—

      We are also committed under a long-term purchase contract that expires in August 2005 to purchase a minimum of 3,500 barrels per day of natural gasoline at market price plus an additional amount per gallon. In addition, we issued additional letters of credit in connection with the Yorktown acquisition.

Environmental and Other

      Federal, state and local laws and regulations relating to health and the environment affect nearly all of our operations. As is the case with other companies engaged in similar industries, we face significant exposure from actual or potential claims and lawsuits involving environmental matters. These matters include soil and water contamination, air pollution and personal injuries or property damage allegedly caused by substances manufactured, handled, used, released or disposed of by us. Future expenditures related to health and environmental matters cannot be reasonably quantified in many circumstances for various reasons, including the speculative nature of remediation and cleanup cost estimates and methods, imprecise and conflicting data regarding the hazardous nature of various types of substances, the number of other potentially responsible parties involved, various defenses that may be available to us and changing environmental laws and interpretations of environmental laws.

      Rules and regulations implementing federal, state and local laws relating to health and the environment will continue to affect our operations. We cannot predict what health or environmental legislation or regulations will be enacted or become effective in the future or how existing or future laws or regulations will be administered or enforced with respect to our products or activities. Compliance with more stringent laws or regulations, as well as more vigorous enforcement policies of the regulatory agencies, could have an adverse effect on our financial position and the results of operations and could require substantial expenditures by us for, among other things: (a) the installation and operation of refinery equipment, pollution control systems and other equipment not currently possessed by us; (b) the acquisition or modification of permits applicable to our activities; and (c) the initiation or modification of cleanup activities. As of March 31, 2002, we had an environmental liability accrual of approximately $2,300,000. Approximately $1,500,000 of this accrual is for the following projects, all of which are discussed in more detail in Note 16 to our consolidated financial statements included in this prospectus: (a) the remediation of the hydrocarbon plume that appears to extend no more than 1,800 feet south of our inactive Farmington refinery; (b) environmental obligations assumed in connection with the acquisition of the Bloomfield refinery; and (c) hydrocarbon contamination on and adjacent to the 5.5 acres that we own in Bloomfield, New Mexico. The remaining amount of the accrual relates to the closure of certain solid waste management units at the Ciniza refinery, which is being conducted in accordance with the refinery’s Resource Conservation and Recovery Act permit; closure of the Ciniza refinery land treatment facility, including post-closure expenses; and certain smaller remediation projects. The environmental accrual is recorded in the current and long-term sections of our consolidated balance sheets. In addition, see the information regarding contingencies in Note 16 to our consolidated financial statements.

      We have assumed certain liabilities and obligations in connection with our purchase of the Yorktown refinery, but we have been provided with specified levels of indemnification for certain matters. These liabilities and obligations include, subject to certain exceptions and indemnifications, all obligations, responsibilities, liabilities, costs and expenses under health, safety and environmental laws, caused by, arising from, incurred in connection with or relating in any way to the ownership of the refinery or its operation. We

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have agreed to indemnify BP from and against losses of any kind incurred in connection with, or related to, liabilities and obligations assumed by us.

      Environmental obligations we assumed include BP’s responsibilities and liabilities under a consent decree among various parties covering many locations. Parties to the consent decree include the United States, BP Exploration and Oil Co., Amoco Oil Company, and Atlantic Richfield Company. BP entered into the consent decree on August 29, 2001. As applicable to the Yorktown refinery, the consent decree requires, among other things, reduction of NOx, SO₂ and particulate matter emissions and upgrades to the refinery’s leak detection and repair program. We estimate that we will incur capital expenditures of between $20,000,000 and $27,000,000 to comply with the consent decree and that these costs will be incurred over a period of approximately five years, although we believe most of the expenditures will be incurred in 2006. In addition, we estimate that we will incur operating expenses associated with the requirements of the consent decree of between $1,700,000 and $2,700,000 per year, beginning in 2002.

      The environmental obligations assumed by us in connection with the Yorktown acquisition also include BP’s obligations under an administrative order issued by EPA in 1991 pursuant to the Resource Conservation and Recovery Act, or “RCRA.” The order requires an investigation of certain areas of the refinery and the development of measures to correct any releases of contaminants or hazardous constituents found in these areas. A RCRA Facility Investigation and a Corrective Measures Study, or “RFI/ CMS,” already has been prepared. It was revised by BP, in draft form, to incorporate comments from EPA and the Virginia Department of Environmental Quality, although a final RFI/CMS has not yet been approved. The draft RFI/CMS proposes certain investigation, sampling, monitoring, and cleanup measures, including the construction of an on-site corrective action management unit that would be used to consolidate hazardous materials associated with these measures. These proposed actions relate to soil, sludge, and remediation wastes relating to certain solid waste management units, groundwater in the aquifers underlying the refinery, and surface water and sediment in a small pond and tidal salt marsh on the refinery property. We estimate that expenses associated with the actions described in the proposed RFI/ CMS will be approximately $15,000,000, and will be incurred over a period of approximately 30 years, with approximately $5,000,000 of this amount being incurred over an initial 6-year period. We may not be responsible, however, for all of these expenditures as a result of the environmental indemnification provisions included in the purchase agreement with BP, as more fully discussed below.

      BP has agreed to indemnify, defend, save and hold us harmless from and against all losses that are caused by, arising from, incurred in connection with or relate in any way to property damage caused by, or any environmental remediation required due to, a violation of health, safety and environmental laws during the operation of the refinery by BP. In order to have a claim against BP, however, the aggregate of all such losses must exceed $5,000,000, in which event our claim only relates to the amount exceeding $5,000,000. After $5,000,000 is reached, our claim is limited to 50% of the amount by which the losses exceed $5,000,000 until the aggregate of all such losses exceeds $10,000,000. After $10,000,000 is reached, our claim would be for 100% of the amount by which the losses exceed $10,000,000. In applying these provisions, losses amounting to less that $250,000 in the aggregate arising out of the same occurrence or matter are not aggregated with any other losses for purposes of determining whether and when the $5,000,000 or $10,000,000 has been reached. After the $5,000,000 or $10,000,000 has been reached, BP has no obligation to indemnify us with respect to such matters for any losses amounting to less than $250,000 in the aggregate arising out of the same occurrence or matter. Except as specified in the Yorktown purchase agreement, in order to seek indemnification from BP, we must notify BP of a claim within two years following the closing date. Further, BP’s aggregate liability for indemnification under the refinery purchase agreement, including liability for environmental indemnification, is limited to $35,000,000.

      The EPA has issued a rule that requires refiners, including our Yorktown refinery, to produce ultra low sulfur, or “Tier 2,” gasoline by January 2004 and ultra low sulfur diesel by 2006. We anticipate that we will spend approximately $40,000,000 to purchase and install the equipment necessary to produce Tier 2 gasoline at our Yorktown refinery, and project that we will incur these expenditures half in 2003 and half in 2004. We anticipate that we will spend approximately $15,000,000 to purchase and install the equipment necessary to

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produce ultra low sulfur diesel by 2006, and project that we will incur these expenditures half in 2005 and half in 2006.

      With respect to our Ciniza and Bloomfield refineries, based on our production of low-sulfur diesel fuel, we believe that we will qualify for an extension of the low-sulfur standards until December 2008. We anticipate that we will spend approximately $3,500,000 to make the necessary changes to our Four Corners refineries, primarily in 2003 and 2004, to comply with the new gasoline rule, and approximately $15,000,000, primarily in 2005 and 2006, to comply with the new diesel fuel rule.

      On June 14, 2002, we received a draft compliance order from the New Mexico Environment Department, or “NMED”, in connection with five alleged violations of air quality regulations at the Ciniza refinery. These alleged violations relate to an inspection completed in April 2001. Potential penalties could be as high as $564,000. We expect to provide information to NMED that may result in the modification or dismissal of some of the alleged violations and reductions in the amount of the potential penalties.

Risk Management

      We are exposed to various market risks, including changes in certain commodity prices and interest rates. To manage the volatility relating to these normal business exposures, we have in the past used commodity futures and options contracts to reduce price volatility, to fix margins in its refining and marketing operations and to protect against price declines associated with its crude oil and finished products inventories.

      We had no open commodity futures or options contracts at March 31, 2002. Our credit agreement is floating-rate debt tied to various short-term indices. As a result, our annual interest costs associated with this debt may fluctuate. At March 31, 2002, however, there were no direct borrowings outstanding under the credit agreement.

      On January 1, 2001, we adopted SFAS No. 133, “Accounting for Derivative Instruments and Hedging Activities,” as amended by SFAS No. 138, “Accounting for Certain Derivative Instruments and Certain Hedging Activities, an amendment to SFAS No. 133.” SFAS No. 133, as amended, establishes accounting and reporting standards for derivative instruments, including certain derivative instruments embedded in other contracts, and for hedging activities. It requires that entities record all derivatives as either assets or liabilities, measured at fair value, with any change in fair value recognized in earnings or in other comprehensive income, depending on the use of the derivative and whether it qualifies for hedge accounting. There was no effect on the our financial position, results of operations, or cash flows as a result of adopting SFAS No. 133.

      Our operations are subject to normal hazards of operations, including fire, explosion and weather-related perils. We maintain various insurance coverage, including business interruption insurance, subject to certain deductibles. We are not fully insured against certain risks because such risks are not fully insurable, coverage is unavailable or premium costs, in our judgment, do not justify such expenditures.

      Credit risk with respect to customer receivables is concentrated in the geographic area in which we operate and relates primarily to customers in the oil and gas industry. To minimize this risk, we perform ongoing credit evaluations of our customers’ financial position and require collateral, such as letters of credit, in certain circumstances.

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THE EXCHANGE OFFER

Purpose of the Exchange Offer

      We sold the outstanding notes to Banc of America Securities LLC, BNP Paribas Securities Corp., and Fleet Securities, Inc., or the “initial purchasers,” on May 14, 2002. The initial purchasers subsequently resold the outstanding notes to qualified institutional buyers in reliance on Rule 144A under the Securities Act and to non-U.S. persons outside the United States in reliance on Regulation S under the Securities Act. In connection with the issuance of the outstanding notes, Giant, the subsidiary guarantors and the initial purchasers entered into a registration rights agreement. The registration rights agreement requires us to, among other things, at our cost, file a registration statement with the SEC with respect to our offer to exchange the outstanding notes for the exchange notes. The exchange notes will have terms substantially identical in all material respects to the outstanding notes (except that the exchange notes will not contain terms with respect to transfer restrictions and with respect to the payment of additional interest under circumstances relating to breaches of the registration rights agreement by Giant and the subsidiary guarantors). We are effecting the exchange offer to comply with the registration rights agreement. We have filed a copy of the registration rights agreement as an exhibit to the registration statement of which this prospectus is a part, and a description of the registration rights agreement appears in “Description of the Exchange Notes — Registration Rights; Liquidated Damages.” The term “holder” with respect to the exchange offer means any person in whose name the outstanding notes are registered on our books or any other person who has obtained a properly completed bond power from the registered holder.

      Because the exchange offer is for any and all outstanding notes, the number of outstanding notes tendered and exchanged in the exchange offer will reduce the principal amount of outstanding notes outstanding. Following the completion of the exchange offer, holders of the outstanding notes who did not tender their outstanding notes generally will not have any further registration rights under the registration rights agreement, and such outstanding notes will continue to be subject to restrictions on transfer. Accordingly, the liquidity of the market for such outstanding notes could be adversely affected. The outstanding notes are currently eligible for sale pursuant to Rule 144A through the The PORTAL Market®. Because we anticipate that most holders of outstanding notes will elect to exchange them for exchange notes, we anticipate that the liquidity of the market for any outstanding notes remaining after the completion of the exchange offer may be substantially limited.

      Based on an interpretation of the Securities Act by the staff of the SEC in several no-action letters issued to third parties unrelated to us, we believe that you, or any other person receiving exchange notes, may offer for resale, resell or otherwise transfer such notes without complying with the registration and prospectus delivery requirements of the federal securities laws, if:

•  you, or the person or entity receiving such exchange notes, is acquiring such notes in the ordinary course of business;

•  neither you nor any such person or entity is engaging in or intends to engage in a distribution of the exchange notes within the meaning of the federal securities laws;

•  neither you nor any such person or entity has an arrangement or understanding with any person or entity to participate in any distribution of the exchange notes;

•  neither you nor any such person or entity is an “affiliate” of us or the guarantors, as such term is defined under Rule 405 under the Securities Act; and

•  you are not acting on behalf of any person or entity who could not truthfully make these statements.

      To participate in the exchange offer, you must represent as the holder of outstanding notes that each of these statements is true.

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      Any holder of outstanding notes who is our affiliate or who intends to participate in the exchange offer for the purpose of distributing the exchange notes:

•  will not be able to rely on the interpretation of the staff of the SEC set forth in the no-action letters described above; and

•  must comply with the registration and prospectus delivery requirements of the Securities Act in connection with any sale or transfer of the notes, unless the sale or transfer is made pursuant to an exemption from those requirements.

      Broker-dealers receiving exchange notes in exchange for outstanding notes acquired for their own account through market-making or other trading activities may not rely on this interpretation by the SEC. Such broker-dealers may be deemed to be “underwriters” within the meaning of the Securities Act and must therefore acknowledge, by signing the letter of transmittal, that they will deliver a prospectus meeting the requirements of the Securities Act in connection with resale of the exchange notes. The letter of transmittal states that by acknowledging that it will deliver, and by delivering, a prospectus, a broker-dealer will not be deemed to admit that it is an “underwriter” within the meaning of the Securities Act. The SEC has taken the position that participating broker-dealers may fulfill their prospectus delivery requirements with respect to the exchange notes, other than a resale of an unsold allotment from the original sale of the outstanding notes, with the prospectus contained in the exchange offer registration statement. As described above, under the registration rights agreement, we have agreed to allow participating broker-dealers and other persons, if any, subject to similar prospectus delivery requirements to use the prospectus contained in the exchange offer registration statement in connection with the resale of the exchange notes. See “Plan of Distribution.”

Terms of the Exchange Offer

      This prospectus, together with the letter of transmittal, is first being sent on or about                     , 2002, to all holders of outstanding notes known to us. Upon the terms and subject to the conditions set forth in this prospectus and in the letter of transmittal, we will accept any and all outstanding notes validly tendered and not withdrawn prior to 5:00 p.m. New York City time on                     , 2002. We will issue $1,000 principal amount of exchange notes in exchange for each $1,000 principal amount of outstanding notes accepted in the exchange offer. Holders may tender some or all of their outstanding notes pursuant to the exchange offer. However, outstanding notes may be tendered only in integral multiples of $1,000.

      The form and terms of the exchange notes are the same as the form and terms of the outstanding notes except that:

•  the exchange notes have been registered under the federal securities laws and will not bear any legend restricting their transfer;

•  the exchange notes will bear a different CUSIP number from the outstanding notes; and

•  the holders of the exchange notes will not be entitled to certain rights under the registration rights agreement, including the provisions for an increase in the interest rate on the outstanding notes in some circumstances relating to the timing of the exchange offer.

The exchange notes will evidence the same debt as the outstanding notes. Holders of exchange notes will be entitled to the benefits of the indenture.

      Holders of outstanding notes do not have any appraisal or dissenter’s rights under the General Corporation Law of Delaware or the indenture in connection with the exchange offer. We intend to conduct the exchange offer in accordance with the applicable requirements of the Exchange Act and the rules and regulations of the SEC under the Exchange Act.

      We shall be deemed to have accepted validly tendered outstanding notes when and if we have given written notice to the exchange agent of our acceptance. The exchange agent will act as agent for the tendering holders for the purpose of receiving the exchange notes from us.

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      If any tendered outstanding notes are not accepted for exchange because of an invalid tender, the occurrence of other events described in this prospectus or otherwise, the certificates for any such unaccepted outstanding notes will be returned, without expense, to the tendering holder thereof as promptly as practicable after the expiration of the exchange offer.

      Holders who tender outstanding notes in the exchange offer will not be required to pay brokerage commissions or fees or, subject to the instructions in the letter of transmittal, transfer taxes with respect to the exchange of outstanding notes pursuant to the exchange offer. We will pay all charges and expenses, other than transfer taxes in certain circumstances, in connection with the exchange offer. See “— Fees and Expenses.”

Expiration Date; Extensions; Amendments

      The exchange offer will expire at 5:00 p.m., New York City time, on                     , 2002, which is the expiration date, unless we extend it. To extend the exchange offer, we will notify the exchange agent of any extension by oral or written notice, followed by a public announcement thereof no later than 9:00 a.m., New York City time, on the next business day after the previously scheduled expiration date.

      We reserve the right, in our reasonable judgment, (a) to delay accepting any outstanding notes, to extend the exchange offer or to terminate the exchange offer if any of the conditions set forth below under “— Conditions” shall not have been satisfied, by giving oral or written notice of such delay, extension or termination to the exchange agent, or (b) to amend the terms of the exchange offer in any manner. Any such delay in acceptance, extension, termination or amendment will be followed as promptly as practicable by a public announcement. If the exchange offer is amended in a manner determined by us to constitute a material change, we will promptly disclose such amendment by means of a prospectus supplement that will be distributed to the registered holders, and, depending upon the significance of the amendment and the manner of disclosure to the registered holders, we will extend the exchange offer for a period of five to ten business days if the exchange offer would otherwise expire during this five to ten business-day period.

      Without limiting the manner in which we may choose to make public announcement of any delay, extension, amendment or termination of the exchange offer, we shall have no obligation to publish, advertise or otherwise communicate any such public announcement, other than by making a timely release to the Business Wire.

Exchange Offer Procedures

      Only a holder of outstanding notes may tender notes in the exchange offer. To tender in the exchange offer, you must:

•  complete, sign and date the letter of transmittal, or a facsimile of the letter of transmittal;

•  have the signatures guaranteed if required by the letter of transmittal; and

•  mail or otherwise deliver the letter of transmittal or such facsimile, together with the outstanding notes and any other required documents, to the exchange agent prior to 5:00 p.m., New York City time, on the expiration date.

      To tender outstanding notes effectively, you must complete the letter of transmittal and other required documents and the exchange agent must receive all the documents prior to 5:00 p.m., New York City time, on the expiration date. Delivery of the outstanding notes may be made by book-entry transfer in accordance with the procedures described below. The exchange agent must receive confirmation of book-entry transfer prior to the expiration date.

      By executing the letter of transmittal you will make to us the representations set forth in the second paragraph under the heading “— Resale of Exchange Notes.”

      All tenders not withdrawn before the expiration date and the acceptance of the tender by us will constitute an agreement between you and us under the terms and subject to the conditions in this prospectus

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and in the letter of transmittal, including an agreement to deliver good and marketable title to all tendered notes prior to the expiration date free and clear of all liens, charges, claims, encumbrances, adverse claims and rights and restrictions of any kind.

      The method of delivery of outstanding notes and the letter of transmittal and all other required documents to the exchange agent is at your election and at your sole risk. Instead of delivery by mail, you should use an overnight or hand delivery service. In all cases, you should allow for sufficient time to ensure delivery to the exchange agent before the expiration of the exchange offer. You may request your broker, dealer, commercial bank, trust company or nominee to effect these transactions for you. You should not send any note, letter of transmittal or other required document to us.

      If your notes are registered in the name of a broker, dealer, commercial bank, trust company or other nominee and you desire to tender, you should contact the registered holder promptly and instruct the registered holder to tender on your behalf.

      The exchange of notes will be made only after timely receipt by the exchange agent of certificates for outstanding notes, a letter of transmittal and all other required documents, or timely completion of a book-entry transfer. If any tendered notes are not accepted for any reason or if outstanding notes are submitted for a greater principal amount than the holder desires to exchange, the exchange agent will return such unaccepted or non-exchanged notes to the tendering holder promptly after the expiration or termination of the exchange offer. In the case of outstanding notes tendered by book-entry transfer, the exchange agent will credit the non-exchanged notes to an account maintained with The Depository Trust Company.

Guarantee of Signatures

      Holders must obtain a guarantee of all signatures on a letter of transmittal or a notice of withdrawal unless the outstanding notes are tendered:

•  by a registered holder who has not completed the box entitled “Special Registration Instructions” or “Special Delivery Instructions” on the letter of transmittal; or

•  for the account of an “eligible guarantor institution.”

      Signature guarantees must be made by a member of or participant in the Securities Transfer Agents Medallion Program, the New York Stock Exchange Medallion Signature Program, the Stock Exchange Medallion Program, or by an “eligible guarantor institution” within the meaning of Rule l7Ad-15 under the Exchange Act (namely, banks; brokers and dealers; credit unions; national securities exchanges; registered securities associations; clearing agencies; and savings associations).

Signature on the Letter of Transmittal; Bond Powers and Endorsements

      If a person other than the registered holder of the outstanding notes signs the letter of transmittal, the registered holder must endorse the outstanding notes or provide a properly completed bond power. Any such endorsement or bond power must be signed by the registered holder as that registered holder’s name appears on the outstanding notes. Signatures on such outstanding notes and bond powers must be guaranteed by an “eligible guarantor institution.”

      If you sign the letter of transmittal or any outstanding notes or bond power as a trustee, executor, administrator, guardian, attorney-in-fact, officer of a corporation, fiduciary or in any other representative capacity, you must so indicate when signing. You must submit satisfactory evidence to the exchange agent of your authority to act in such capacity.

Book-Entry Transfer

      We understand that the exchange agent will make a request promptly after the date of this prospectus to establish accounts with respect to the outstanding notes at the book-entry transfer facility, The Depository Trust Company, for the purpose of facilitating the exchange offer. Subject to the establishment of the accounts, any financial institution that is a participant in DTC’s system may make book-entry delivery of

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outstanding notes by causing DTC to transfer the notes into the exchange agent’s account in accordance with DTC’s procedures for such transfer. However, although delivery of outstanding notes may be effected through book-entry transfer into the exchange agent’s account at DTC, the letter of transmittal (or a manually signed facsimile of the letter of transmittal) with any required signature guarantees, or an “agent’s message” in connection with a book-entry transfer, and any other required documents, must, in any case, be transmitted to and received by the exchange agent, or the guaranteed delivery procedures set forth below must be complied with, in each case, prior to the expiration date. Delivery of documents to DTC does not constitute delivery to the exchange agent.

      The exchange agent and DTC have confirmed that the exchange offer is eligible for the DTC Automated Tender Offer Program. Accordingly, DTC participants may electronically transmit their acceptance of the exchange offer by causing DTC to transfer outstanding notes to the exchange agent in accordance with DTC’s Automated Tender Offer Program procedures for transfer. Upon receipt of such holder’s acceptance through the Automated Tender Offer Program, DTC will edit and verify the acceptance and send an “agent’s message” to the exchange agent for its acceptance. Delivery of tendered notes must be made to the exchange agent pursuant to the book-entry delivery procedures set forth above, or the tendering DTC participant must comply with the guaranteed delivery procedures set forth below.

      The term “agent’s message” means a message transmitted by DTC, and received by the exchange agent and forming part of the confirmation of a book-entry transfer, which states that:

•  DTC has received an express acknowledgment from the DTC participant tendering notes subject to the book-entry confirmation;

•  the participant has received and agrees to be bound by the terms of the letter of transmittal; and

•  we may enforce such agreement against such participant.

      In the case of an agent’s message relating to guaranteed delivery, the term means a message transmitted by DTC and received by the exchange agent, which states that DTC has received an express acknowledgment from the DTC participant tendering notes that such participant has received and agrees to be bound by the notice of guaranteed delivery.

Determination of Valid Tenders; Our Rights Under the Exchange Offer

      We will determine all questions as to the validity, form, eligibility, time of receipt, acceptance and withdrawal of tendered notes in our sole discretion, and our determination will be final and binding on all parties. We expressly reserve the absolute right, in our sole discretion, to reject any or all outstanding notes not properly tendered or any outstanding notes the acceptance of which would, in the opinion of our counsel, be unlawful. We also reserve the absolute right in our sole discretion to waive or amend any conditions of the exchange offer or to waive any defects or irregularities of tender for any particular note, whether or not similar defects or irregularities are waived in the case of other notes. Our interpretation of the terms and conditions of the exchange offer will be final and binding on all parties. No alternative, conditional or contingent tenders will be accepted. Unless waived, any defects or irregularities in connection with tenders of outstanding notes must be cured by the tendering holder within such time as we determine.

      Although we intend to notify holders of defects or irregularities in tenders of outstanding notes, neither we, the exchange agent or any other person shall be under any duty to give notification of defects or irregularities in such tenders or will incur any liability to holders for failure to give such notification. Holders will be deemed to have tendered outstanding notes only when such defects or irregularities have been cured or waived. The exchange agent will return to the tendering holder, after the expiration of the exchange offer, any outstanding notes that are not properly tendered and as to which the defects have not been cured or waived.

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Guaranteed Delivery Procedures

      If you desire to tender outstanding notes pursuant to the exchange offer and (1) certificates representing such outstanding notes are not immediately available, (2) time will not permit your letter of transmittal, certificates representing such outstanding notes and all other required documents to reach the exchange agent on or prior to the expiration date, or (3) the procedures for book-entry transfer (including delivery of an agent’s message) cannot be completed on or prior to the expiration date, you may nevertheless tender your outstanding notes with the effect that your tender will be deemed to have been received on or prior to the expiration date if all the following conditions are satisfied:

•  you must effect your tender through an “eligible guarantor institution,” which is defined above under the heading “— Guarantee of Signatures;”

•  a properly completed and duly executed notice of guaranteed delivery, substantially in the form provided by us with the letter of transmittal, or an agent’s message with respect to guaranteed delivery that is accepted by us, is received by the exchange agent on or prior to the expiration date as provided below; and

•  the certificates for the tendered notes, in proper form for transfer (or a book-entry confirmation of the transfer of such notes into the exchange agent account at DTC as described above), together with a letter of transmittal (or a manually signed facsimile of the letter of transmittal) properly completed and duly executed, with any signature guarantees and any other documents required by the letter of transmittal or a properly transmitted agent’s message, are received by the exchange agent within three New York Stock Exchange, Inc. trading days after the date of execution of the notice of guaranteed delivery.

      The notice of guaranteed delivery may be sent by hand delivery, facsimile transmission or mail to the exchange agent and must include a guarantee by an eligible guarantor institution in the form set forth in the notice of guaranteed delivery.

Withdrawal Rights

      Except as otherwise provided in this prospectus, you may withdraw tendered notes at any time before 5:00 p.m., New York City time, on                     , 2002. For a withdrawal of tendered notes to be effective, a written or facsimile transmission notice of withdrawal must be received by the exchange agent on or prior to the expiration of the exchange offer. For DTC participants, a written notice of withdrawal may be made by electronic transmission through DTC’s Automated Tender Offer Program. Any notice of withdrawal must:

•  specify the name of the person having tendered the notes to be withdrawn;

•  identify the notes to be withdrawn, including the certificate number(s) and principal amount of such notes, or, in the case of notes transferred by book-entry transfer, the name and number of the account at DTC;

•  be signed by the holder in the same manner as the original signature on the letter of transmittal by which such notes were tendered, with any required signature guarantees, or be accompanied by documents of transfer sufficient to have the trustee with respect to the notes register the transfer of such notes into the name of the person withdrawing the tender and a properly completed irrevocable proxy authorizing such person to effect such withdrawal on behalf of such holder; and

•  specify the name in which any such notes are to be registered, if different from that of the registered holder.

      You may not rescind a proper withdrawal of notes. Any notes properly withdrawn will thereafter be deemed not to have been validly tendered for purposes of the exchange offer. The exchange agent will return any withdrawn notes without cost to the holder promptly after withdrawal of the notes. Holders may retender properly withdrawn notes at any time before the expiration of the exchange offer by following one of the procedures described above under the heading “— Exchange Offer Procedures.”

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Conditions to the Exchange Offer

      Notwithstanding any other term of the exchange offer, we are not required to accept for exchange, or issue any exchange notes for, any outstanding notes, and may terminate or amend the exchange offer as provided in this prospectus before the acceptance of the outstanding notes, if we determine that the exchange offer violates any law, statute, rule, regulation or interpretation by the staff of the SEC or any order of any governmental agency or court of competent jurisdiction.

      These conditions are for the sole benefit of us and the subsidiary guarantors, and we may assert them or waive them in whole or in part at any time and from time to time in our sole discretion. Our failure to exercise any of these rights at any time will not be deemed a waiver of these rights, and each of these rights shall be deemed an ongoing right which we may assert at any time and from time to time.

      In addition, we will accept for exchange any outstanding notes tendered, but no exchange notes will be issued in exchange for those outstanding notes, if at any time any stop order is threatened or issued with respect to the registration statement for the exchange offer and the exchange notes or the qualification of the indenture under the Trust Indenture Act of 1939. In any such event, we must use our best efforts to obtain the withdrawal or lifting of any stop order at the earliest possible moment.

Exchange Agent

      The Bank of New York will act as exchange agent for the exchange offer.

      You should direct all executed letters of transmittal to the exchange agent at one of the addresses set forth below. You should direct questions and requests for assistance, requests for additional copies of this prospectus or of the letter of transmittal and requests for copies of the notice of guaranteed delivery to the exchange agent, addressed as follows:

      By registered or certified mail:

The Bank of New York

101 Barclay Street, 7E

New York, New York 10286

Attn: Reorganization Section

      By hand/overnight courier:

The Bank of New York

Corporate Trust Services Window, Ground Level

101 Barclay Street

New York, New York 10286

Attn: Reorganization Section

      By facsimile (eligible institutions only):

(212) 571-3080

      For telephone inquiries:

(212) 815-6333

      Delivery to an address other than as set forth above will not constitute a valid delivery.

Fees and Expenses

      We will bear the expenses of the exchange offer. We are mailing the principal solicitation. However, our and our affiliates’ officers and regular employees may make additional solicitation by telegraph, telephone, facsimile or in person.

      We have not retained any dealer-manager in connection with the exchange offer. We will not make any payments to brokers or other persons soliciting acceptances of the exchange offer. We, however, will pay the

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exchange agent reasonable and customary fees for its services and will reimburse it for its reasonable out-of-pocket expenses.

      We will pay the cash expenses incurred in connection with the exchange offer. These expenses include fees and expenses of the trustee, accounting and legal fees, and printing and distribution costs, among others.

Transfer Taxes

      We will pay all transfer taxes, if any, applicable to the exchange of the outstanding notes pursuant to the exchange offer. If, however, certificates representing the exchange notes or the outstanding notes for principal amounts not tendered or accepted for exchange are to be delivered to, or are to be issued in the name of, any person other than the registered holder of the outstanding notes tendered, or if tendered outstanding notes are registered in the name of any person other than the person signing the letter of transmittal, or if a transfer tax is imposed for any reason other than the exchange of the notes pursuant to the exchange offer, then the amount of any such transfer taxes (whether imposed on the registered holder or any other person) will be payable by the tendering holder.

Accounting Treatment

      The exchange notes will be recorded at the same carrying value as the outstanding notes. Accordingly, we will recognize no gain or loss for accounting purposes. We will amortize the expenses of the exchange offer over the term of the exchange notes.

Consequences of Failure to Exchange

      As a result of making this exchange offer, we will have fulfilled one of our obligations under the registration rights agreement, and holders who do not tender their outstanding notes generally will not have any further registration rights under the registration rights agreement or otherwise. Accordingly, any holder of outstanding notes that does not exchange those notes for exchange notes will continue to hold the untendered outstanding notes and will be entitled to all the rights and limitations applicable thereto under the indenture, except to the extent that such rights or limitations, by their terms, terminate or cease to have further effectiveness as a result of the exchange offer.

      The outstanding notes that are not exchanged for exchange notes pursuant to the exchange offer will remain restricted securities. Accordingly, such outstanding notes may be offered, resold, pledged or otherwise transferred only:

•  to us (upon redemption thereof or otherwise);

•  pursuant to an effective registration statement under the Securities Act;

•  inside the United States to a person whom the seller reasonably believes is a qualified institutional buyer (as defined in Rule 144A under the Securities Act) in a transaction meeting the requirements of Rule 144A;

•  outside the United States in an offshore transaction in accordance with Rule 904 under the Securities Act; or

•  pursuant to an exemption from registration under the Securities Act provided by Rule 144 thereunder (if available), in each case in accordance with any applicable securities laws of any state of the United States.

Regulatory Approvals

      Other than the federal securities laws, there are no federal or state regulatory requirements that we must comply with and there are no approvals that we must obtain in connection with the exchange offer.

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Other

      Participation in the exchange offer is voluntary. You should carefully consider whether to accept the exchange offer. You should consult your financial and tax advisors in making your own decision on what action to take.

      We may in the future seek to acquire untendered outstanding notes in open market or privately negotiated transactions, through subsequent exchange offers or otherwise. We have no present plans to acquire any outstanding notes that are not tendered in the exchange offer or to file a registration statement to permit resales of any untendered outstanding notes.

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BUSINESS

      Unless otherwise noted or the context otherwise requires, the discussion presented in this “Business” section gives effect to the acquisition of the Yorktown refinery and the related financing transactions.

Overview

      We are the only integrated refiner and marketer of petroleum products with refineries in the Four Corners area. As a result of our acquisition of the Yorktown refinery, we also own the only refinery in Virginia, and we have expanded our market presence and more than doubled our refining capacity to approximately 104,500 barrels per day (“bpd”) from approximately 42,600 bpd. In addition, we own and operate 145 service stations with convenience stores or kiosks, a travel center and a wholesale petroleum products distributor. Our operations are divided into three strategic business units:

•  Refining Group. Our Refining Group owns and operates the Ciniza and Bloomfield refineries in New Mexico and the Yorktown refinery in Virginia. In addition to these three refineries, our Refining Group owns and operates a crude oil gathering pipeline system in New Mexico that services our Four Corners refineries, two finished products distribution terminals and a fleet of 81 crude oil and finished product truck transports.

•  Retail Group. Our Retail Group owns and operates 145 retail service stations with convenience stores or kiosks in New Mexico, Arizona and Colorado operating under brand names including Giant, Conoco® and Mustang™. We also own and operate a travel center in New Mexico that is located adjacent to our Ciniza refinery. In 2001, approximately 35% of our Four Corners refineries’ production was sold from our service stations and our travel center.

•  Phoenix Fuel. We believe Phoenix Fuel is the largest wholesale petroleum products distributor in Arizona. It serves the mining, construction, utility, manufacturing, aviation and agriculture industries. As part of our Phoenix Fuel operations, we own and operate five lubricant and bulk petroleum distribution plants, 19 cardlock (unmanned fleet fueling) operations, and a bulk lubricant terminal facility, and a fleet of 64 finished product and lubricant delivery trucks.

      On May 14, 2002, we acquired the Yorktown refinery from BP Corporation North America Inc. and BP Products North America Inc., or “BP,” for $127.5 million, plus the value of associated inventory at closing, or $65.2 million, the assumption of certain liabilities, and an earn-out. The Yorktown refinery is the only refinery in Virginia and services a geographic region from South Carolina to the New York Harbor. The Yorktown acquisition increased our number of refineries from two to three and more than doubled our total refining capacity from approximately 42,600 bpd to approximately 104,500 bpd. Pro forma for the Yorktown acquisition, we would have had net revenues of $1,664. million, net earnings of $16.9 million, EBITDA of $127.3 million and adjusted EBITDA of $145.3 million for the year ended December 31, 2001.

Strategy and Competitive Strengths

      Our strategy is to continue to profitably operate our refining, retail and Phoenix Fuel business units. Our immediate strategic focus is to:

•  efficiently integrate the Yorktown refinery into our existing operations while maximizing the profitability of all of our refineries;

•  work with producers in the Four Corners area to augment crude oil supply;

•  continue to maximize the profitability of our Retail Group by increasing sales of high-margin merchandise and continuing to reduce costs;

•  continue to maximize the profitability of Phoenix Fuel by increasing wholesale fuel volumes, expanding service offerings and broadening its wholesale customer base;

•  increase our cash flow by continuing to reduce operating expenses and eliminating non-essential capital expenditures; and

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•  rationalize our asset base by selling non-strategic and underperforming assets and selectively pursuing acquisitions.

      We believe we are well positioned to execute our strategy as a result of the following factors:

      Higher Refining Margins Due to Operations in Attractive Markets. Each of the Ciniza, Bloomfield and Yorktown refineries serves market areas where there are limited alternative refining operations. Each refinery therefore has a competitive advantage due to the transportation costs that others would incur to bring products into our markets. The Yorktown refinery also has the ability to opportunistically sell product into the New York Harbor market, a market where demand has typically exceeded local supply and where margins are typically higher than Gulf Coast margins.

      In the Four Corners market, we face limited competition due to constrained pipeline capacity for refined products into Albuquerque and the transportation costs of delivering additional products to our markets. These economic barriers to entry have contributed to historically higher refining margins for us as compared to margins experienced by Gulf Coast refiners. In 2001, refining margins for our Ciniza and Bloomfield refineries averaged $9.69 per barrel, as compared to the average margin of $4.44 per barrel for Gulf Coast refiners.

      The Yorktown refinery also benefits from transportation cost advantages over refined products shipped from the Gulf Coast into the mid-Atlantic region. As the Yorktown refinery receives and transports products by barge from its dedicated docks, it has greater flexibility to receive and move product than its competitors who rely on a pipeline system. In 2001, on a pro forma basis, the refining margins at the Yorktown refinery were $4.70 per barrel.

      Realization of Benefits of the Yorktown Acquisition. The Yorktown acquisition has more than doubled our refining capacity, to approximately 104,500 bpd, and diversified our geographical presence. Under BP’s ownership, the Yorktown refinery was operated as a part of BP’s global refining, production and distribution system. As such, we believe that the refinery was not always operated to maximize the profitability of the refinery, but rather the refinery’s contribution to BP’s overall operations. Our strategy at the Yorktown refinery will focus on maximizing its profitability, and accordingly, we believe we can operate the Yorktown refinery more profitably than it was operated historically.

      We intend to increase the Yorktown refinery’s profitability by:

•  directing refined products to markets that offer us the highest margin and by optimally sourcing crude oil;

•  increasing local distribution;

•  processing lower grade crude oil, which should produce higher margins;

•  delivering products on short notice to east-coast terminals to take advantage of shortages; and

•  exchanging products to and from the Gulf Coast, the New York Harbor, and the East Coast markets and from our Four Corners refineries based on local demand.

      Diversified Revenue Streams Through Broad Product and Services Offerings. In addition to our refinery operations, we offer a wide range of products and services through our 145 retail service stations with convenience stores or kiosks, our Phoenix Fuel petroleum products distributor, and our travel center. We believe demand for certain of these products and services lessens our exposure to fluctuations in profitability due to changes in refining margins and to adverse economic cycles. Our convenience store operations, in particular, provided relatively high and stable merchandise margins of approximately 28% for each of the last three years, and our merchandise sales volume, based on same store sales, has increased by a compound annual rate of 11% over the last three years. In addition, the Yorktown acquisition further diversified our revenue base as it reduced our dependence on the Four Corners area.

      Favorable Refinery Yields. With the high-quality feedstocks available in the Four Corners area, we are able to achieve refinery yields at our Ciniza and Bloomfield refineries that are comparable to those achieved

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by some larger, more complex refineries located outside of this area. In addition, the Yorktown refinery is a complex refinery with the ability to process many types of lower-grade crude oils. All three refineries are equipped with fluid catalytic cracking, naphtha hydrotreating, reforming and liquefied petroleum gas recovery units, as well as diesel hydrotreating and sulfur recovery units to manufacture currently required low sulfur diesel fuels. During 2001, these processing configurations enabled our Four Corners refineries to yield 91% of high-value products, including gasoline and diesel fuel, from each barrel of refinery intake, and the Yorktown refinery to yield 88% of high-value products from each barrel of refinery intake. This compares with the 2001 industry average yield of 86% of high-value products.

      Integrated Marketing Network. We have improved our distribution of refined products from our Four Corners refineries through our retail network and by entering into longer-term supply arrangements with existing wholesale and exchange customers. During 2001, we sold approximately 7.7 million barrels of gasoline and 3.1 million barrels of diesel fuel from our Four Corners refineries. Our service stations and our travel center sold approximately 40% of these gasoline sales and 22% of these diesel sales in 2001, or approximately 35% of our Four Corners refineries’ output.

      Experienced Management Team. We have a highly experienced senior management team, with our executive officers having an average of more than 22 years of experience in the energy industry. Our senior management team has significantly improved our operating and financial performance over the last five years and has led us through several industry cycles. In addition, this team has successfully integrated several substantial acquisitions, including the acquisitions of the Bloomfield refinery in October 1995, 96 retail service stations from Thriftway in May 1997, and Phoenix Fuel in June 1997. Fredric L. Holliger had served as Executive Vice President and Chief Operating Officer from October 1989, the date of our inception, to March 2002, when he was named our Chairman of the Board and Chief Executive Officer.

Refining Group

      We operate three refineries, each of which sells into markets where we can supply products at a transportation cost advantage. These three refineries have a total refining capacity of approximately 104,500 bpd, detailed as follows:

•  The Yorktown refinery, located in Yorktown, Virginia — 61,900 bpd;

•  The Ciniza refinery, located in Gallup, New Mexico — 26,000 bpd; and

•  The Bloomfield refinery, located in Farmington, New Mexico — 16,600 bpd.

      Our Ciniza and Bloomfield refineries are the only refineries in the Four Corners area. These refineries currently source crude oil from locally available supplies. Constrained pipeline capacity into Albuquerque and transportation costs of delivering refined products into the Four Corners area provide us with a competitive advantage in this market. We historically have generated higher refining margins than Gulf Coast refineries. From 1997 to 2001, our average annual refining margins have ranged from a low of $4.83 per barrel in 1998 to a high of $9.69 per barrel in 2001, with a weighted average of $6.99 per barrel. During the same period, annual average Gulf Coast refining margins have ranged from a low of $1.82 per barrel in 1999 to a high of $4.44 per barrel in 2001.

      The Yorktown refinery is the only refinery in Virginia and services a geographic region stretching from South Carolina to the New York Harbor. Because it is adjacent to its own deep-water port, the Yorktown refinery benefits from transportation cost advantages over refined products shipped from the Gulf Coast. In 2001, on a pro forma basis, the refining margins at the Yorktown refinery were $4.70 per barrel as compared to the average margin of $4.44 per barrel for Gulf Coast refiners. Historically, this refinery was operated as part of BP’s global network, and we believe may not have been operated to maximize refinery profitability. We will operate the Yorktown refinery to maximize profitability and, as a result, we believe we will be able to operate the refinery to realize higher refining margins than those realized by the refinery as BP operated it.

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The Ciniza and Bloomfield Refineries

Refining

      We own and operate the only active refineries in the Four Corners area. The Ciniza refinery is located on 880 acres near Gallup, New Mexico and the Bloomfield refinery is located on 285 acres near Farmington, New Mexico. Although the Ciniza and Bloomfield refineries are 120 miles apart, we operate them in an integrated fashion. Consolidating the environmental, safety, marketing, supply, purchasing, engineering and accounting functions historically has led to efficiency gains and cost reductions.

      Our Ciniza and Bloomfield refineries primarily process a mixture of high gravity, low sulfur crude oil, condensate and NGLs. NGLs consist of natural gasoline, normal butane and isobutane and are used as gasoline blending components and to supply the isomerization and alkylation units of the refineries. NGLs increase the percentage of gasoline and the octane levels that the refineries can produce, which typically increases our refining margins. NGLs further enhance refinery margins because we typically have been able to purchase NGLs at a lower cost per barrel than crude oil.

      We believe that the technical capabilities of these two refineries, together with the high quality of locally available feedstocks, enable us to achieve favorable refinery yields. Both refineries are equipped with fluid catalytic cracking, naphtha hydrotreating, reforming, and liquefied petroleum gases recovery units, as well as diesel hydrotreating and sulfur recovery units to manufacture low sulfur diesel fuel that meets currently-effective requirements. The Ciniza refinery utilizes an alkylation process to manufacture high-octane gasoline from its catalytic cracking unit. The Bloomfield refinery accomplishes this using a catalytic polymerization unit. The Ciniza refinery also is equipped with an isomerization unit, which enables it to produce additional gasoline through the processing of NGLs, and cogeneration facilities. These processing configurations enabled the refineries to yield 91% of high-value products, including gasoline and diesel fuel, from each barrel of refinery intake in 2001. This compares with the 2001 industry average yield of 86% of high-value products. The refineries’ product slate can include 100% unleaded gasoline or 100% low sulfur diesel fuel.

      During 2001, we sold approximately 7.7 million barrels of gasoline and 3.1 million barrels of diesel fuel from our Ciniza and Bloomfield refineries. Our service stations and our travel center sold approximately 40% of these gasoline sales and 22% of these diesel sales, or a total of approximately 35% of combined production, in 2001. Gasoline and diesel deliveries made through product exchanges with other oil companies accounted for approximately 15% of the volume sold by these refineries in 2001. The remaining gasoline and diesel sales were made to wholesalers, retailers and industrial/ commercial customers. Supplementing sales barrels sourced from both refineries were purchases for resale of gasoline and diesel from other sources. We market our remaining refined products to various third party customers.

      Set forth below is data with respect to the Ciniza and Bloomfield refinery operations and the primary refined products produced during the indicated periods.

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			Year Ended December 31,
			2001			2000			1999			1998			1997
Feedstock throughput (bpd):
	Crude oil			27,000			29,600			31,900			32,500			33,700
	NGLs and oxygenates			6,200			5,800			6,500			5,700			6,500
		Total		33,200			35,400			38,400			38,200			40,200
Crude oil throughput (as a % of total)				81	%		84	%		83	%		85	%		84	%
Rated crude oil capacity utilized				73	%		80	%		87	%		88	%		92	%
Refinery margin ($/bbl)				$9.69		$	7.63		$	6.89		$	4.83		$	6.39
Products (bpd):
	Gasoline			21,400			22,500			23,800			23,800			24,800
	Diesel fuel			8,600			9,600			10,700			11,400			11,000
	Jet fuel			—			—			—			—			800
	Other			3,200			3,300			3,900			3,000			3,600
		Total		33,200			35,400			38,400			38,200			40,200
High value products (as a % of total):
	Gasoline			65	%		64	%		62	%		62	%		62	%
	Diesel fuel			26	%		27	%		28	%		30	%		27	%
	Jet fuel			—			—			—			—			2	%
		Total		91	%		91	%		90	%		92	%		91	%

Raw material supply

      The Four Corners area serves as our primary source of crude oil and NGLs for our Ciniza and Bloomfield refineries. The locally produced, high-quality crude oil known as Four Corners Sweet is our primary feedstock. Four Corners Sweet has a high gravity and low sulfur content. The Four Corners basin is a mature production area and is subject to natural decline in production over time. In the past, this natural decline has been offset to some extent by new drilling, field workovers, and secondary recovery projects, which have resulted in additional production from existing reserves. Many of these projects were cut back, however, when crude oil prices declined dramatically in 1998. Although crude oil prices have recovered from 1998 levels, a lower than anticipated allocation of capital to Four Corners basin production activities has resulted in greater than anticipated net declines in production.

      We supplement the Four Corners crude oil used at the Ciniza and Bloomfield refineries with other feedstocks as necessary. These feedstocks currently include locally produced NGLs and other feedstocks produced outside of the Four Corners area. We continue to evaluate supplemental feedstock alternatives for our refineries on both a short-term and long-term basis.

      We also are assessing other long-term options to address the continuing decline in Four Corners crude oil production. Among the options we are considering are: (a) encouraging, and occasionally sponsoring, exploration and production activities in the Four Corners area; and (b) examining other potentially economic raw material sources, such as crude oil produced outside the Four Corners area. If we experience a significant long-term decline in available Four Corners crude oil supply, our profitability may be affected.

      We currently acquire crude oil from a number of sources, including major oil companies and large and small independent producers, under arrangements that contain market-responsive pricing provisions. Many of these arrangements are subject to cancellation by either party or have terms that are not in excess of one year. In addition, these arrangements are subject to periodic renegotiation, which could result in higher prices being paid for crude oil or lost crude oil volumes. In 2000 and 2001, certain crude oil contracts were renegotiated resulting in our ability to reduce our crude oil acquisition costs. During 2001, we obtained

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approximately 24% of our Four Corners refineries’ crude oil supply pursuant to a contract with Exxon Mobil and approximately 15% of our Four Corners refineries’ crude oil supply pursuant to a contract with Texaco Exploration and Production, Inc., each of which is negotiated annually. A small percentage of the Four Corners refineries’ purchases are structured as exchange agreements. In the exchanges, purchases are made in conjunction with matching sales to the supplier at other domestic locations, as may be negotiated periodically. The effect of these arrangements is to make a portion of the cost of the refineries’ supply dependent upon market conditions in other locations, which may differ from those in the Four Corners area. These arrangements currently have a nominal effect on our crude oil acquisition costs.

      We currently acquire the majority of our NGLs pursuant to a long-term agreement. This agreement contains market sensitive pricing arrangements under which prices are adjusted on a monthly basis.

Transportation

      Crude oil supply for the Four Corners refineries comes primarily from the Four Corners area and is either connected by pipelines, including ours, or delivered by our truck transports to pipeline injection points or refinery tankage. We now have approximately 239 miles of pipeline for gathering and delivering crude oil to our refineries. The pipeline system supplying our Four Corners refineries reaches into the San Juan Basin and connects with local common carrier pipelines. During the second quarter of 2002, we sold approximately 132 miles of pipeline we previously owned. We continue to ship crude oil on the pipeline segments that were sold. The Ciniza refinery receives NGLs primarily through our 13-mile pipeline connected to a NGLs fractionation plant. Currently, more than 30 of our truck transports are involved in collecting crude oil from producing wells to supply the refineries.

Marketing and distribution

      The Four Corners area is the primary market area for our products refined at the Ciniza and Bloomfield refineries. Our secondary markets include the Albuquerque area, the largest market in New Mexico, and the Northern Arizona area. These secondary markets are primarily supplied from the Ciniza refinery or our Flagstaff products terminal. We estimate that during 2001 our gasoline production was distributed approximately 49% in New Mexico, 38% in Arizona, 12% in Colorado and 1% in Utah; and our diesel production was distributed approximately 55% in New Mexico, 35% in Arizona, 9% in Colorado and 1% in Utah. Our truck transports support refinery sales in our primary market as well as our secondary markets. These vehicles transported approximately 46% of the Ciniza and Bloomfield refineries’ sales barrels in 2001. Customer or common carrier trucking transported the remaining 54%. Approximately 35% of our refined product volumes were sold through our retail units in 2001, including sales of products received from others in exchange for products from our refineries.

Terminal operations

      In May 1999, we opened a 6,000 bpd capacity finished products terminal near Flagstaff, Arizona. This terminal includes 65,000 barrels of finished product tankage and a truck loading rack with three loading spots. We could expand the terminal capacity to 12,000 bpd of finished products at an estimated cost of approximately $300,000 if demand for finished products in this market increases and we are able to source sufficient crude supply. Product deliveries to the Flagstaff terminal are being made by truck transport from Phoenix, Arizona or our refineries. In July 1995, we acquired a 10,000 bpd capacity finished products terminal in Albuquerque, New Mexico. This terminal includes approximately 170,000 barrels of finished product tankage and a truck loading rack with two loading spots. Product deliveries to this terminal are made by truck transport from our Ciniza refinery or by pipeline from El Paso, Texas. These terminals are part of our strategy to maximize both product volumes and margins for the Ciniza and Bloomfield refineries, and to maximize our customer base.

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The Yorktown Refinery

Refining

      The Yorktown refinery is a 61,900 bpd coking refinery located on 570 acres of land known as Goodwin’s Neck, which lies along the York River in York County, Virginia. The Yorktown refinery is situated adjacent to its own deep-water port on the York River, close to the Norfolk military complex and Hampton Roads shipyards. We believe this location allows the refinery to realize transportation advantages of as much as $1.25 per barrel compared with Gulf Coast refineries shipping to the mid-Atlantic market. The Yorktown refinery began operations in 1956 under the ownership of Amoco Oil Company, and has been repeatedly expanded and upgraded to be modern and efficient. The Yorktown refinery’s sales historically have been concentrated in Eastern Virginia and Maryland, where more than 50% of its gasoline production was sold. The Yorktown refinery’s most profitable markets are the Yorktown peninsula and Salisbury, Maryland. Under our ownership, we believe we can expand the Yorktown refinery’s refining capacity to 75,000 bpd at a total cost of approximately $5 million, and will consider doing so depending on market conditions. Our strategy at the Yorktown refinery will focus on maximizing its profitability, which may include processing lower-grade, low cost crude oil and selling products into higher-margin markets. As a result, we believe we can operate the Yorktown refinery more profitably than it was operated historically.

      The Yorktown refinery has a Solomon complexity rating of 11.0 and in 2001 yielded 88% of high-value products from each barrel of refinery intake. The Yorktown refinery can manufacture both conventional and reformulated gasoline, as well as low- and high-sulfur diesel. It is capable of processing heavy, high acid crude oils, as well as light and heavy sweet crude oils. It has demonstrated its ability to process 21 different types of crude oil annually, which are sourced from Canada, the North Sea, West Africa, South America and the Far East. The refinery’s strategic location on the York River and its own deep-water port access allow it to easily receive supply shipments from these regions and provide flexibility to transport finished products by barge, without dependence on area pipelines. During 2001, the Yorktown refinery sold approximately 11.6 million barrels of gasoline, 7.1 million barrels of diesel fuel and No. 2 fuel oil, 870,000 barrels of liquid petroleum gases and 222,806 short tons of petroleum coke.

      Set forth below is data with respect to the Yorktown refinery operations and the primary refined products produced during the indicated periods.

			Year Ended December 31,
			2001			2000			1999			1998
Feedstock throughput (bpd):
	Crude oil and residual feedstocks			55,478			59,996			56,256			55,468
	Intermediates			5,210			5,784			4,549			2,451
		Total		60,687			65,780			60,805			57,918
Rated crude oil capacity utilized				90	%		97	%		91	%		90	%
Products (bpd):
	Gasoline			33,356			36,000			32,898			28,318
	Diesel fuel and No. 2 fuel oil			19,941			22,589			19,433			19,865
	Other(a)			9,419			9,501			11,166			11,567
		Total		62,716			68,090			63,498			59,750
High-value products (as a percentage of total feedstocks):
	Gasoline			55	%		55	%		54	%		49	%
	Diesel fuel and No. 2 fuel oil			33	%		34	%		32	%		34	%
		Total		88	%		89	%		86	%		83	%

(a)  Other products includes petroleum coke converted to a fuel oil equivalent number of barrels.

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      During 1999, the Yorktown refinery switched from a sour crude facility to a heavy sweet crude facility, partially due to the decreased supply of Venezuelan sour crude oil. Completed at a cost of approximately $100,000, the project reduced the refinery’s crude sulfur input by a factor of four, enabling it to reduce sulfur content in compliance with EPA-mandated specifications well in advance of the 2004 deadline. This reduction in crude sulfur input allowed the refinery to reduce sulfur in its products while increasing production of higher-quality reformulated gasoline and low sulfur distillate. As part of the crude switch project, the sulfur recovery unit was modified to permit appropriate turndown when operating on low sulfur input; however, the refinery is capable of processing sour crude oils by reversing the prior modifications should there be an economic advantage to do so. As a result of the decision to switch from sour to sweet crude oil, the Yorktown refinery ran at a reduced rate for seven days. Additionally, due to the residual of sour crude in the tanks post-switch, the Yorktown refinery was forced to sell product at lower margins, resulting in reduced operating profits.

Raw material supply

      Most of the Yorktown refinery’s feedstocks come from Canada, the North Sea, West Africa, South America, and the Far East. The ability to process a wide range of crude oils allows the Yorktown refinery to vary crude oils in order to maximize margins. The incoming crude slate includes 30,000-40,000 bpd of heavy sweet crude oil, 10,000-15,000 bpd of low sulfur atmospheric and/or vacuum residuum, and 5,000-10,000 bpd of light sweet crude oil. To assure continued supply while we integrate the Yorktown refinery, we have entered into agreements requiring BP to provide, for periods ranging from six months to one year after the acquisition, 100% of the refinery’s feedstock supply, including crude oil and intermediate feedstocks, and other raw material needs. We are not obligated to receive our feedstock supply from BP, and may terminate the agreements at any time with 30 days notice. We believe there are abundant sources of crude oil and other raw material supply for the Yorktown refinery.

      The Yorktown refinery also imports process unit feedstocks to supplement the various process units, and blendstocks to optimize the product blending operations. Reformer naphtha is the most commonly imported feedstock, although gas oil is imported from time to time. Subsequent to the crude switch project, the refinery increased its alkylate and MTBE imports for increased levels of reformulated gasoline production. The refinery also occasionally imports reformates, aromatics and sub-octane gasolines.

Transportation

      The Yorktown refinery’s strategic location on the York River and its own deep-water port access allow it to easily receive supply shipments from various regions of the world. All of the crude oil supplied to the Yorktown refinery is delivered to it by barge to its dock. As a result, it has greater flexibility to receive and move product than its competitors who rely on pipeline systems.

Marketing and distribution

      We group the Yorktown refinery’s end markets into tiers, which represent varying refining margin potential. Tier 1 areas have the highest refining margin potential and include the Yorktown region. Tier 2 markets include Salisbury and Baltimore, Maryland. Norfolk and North and South Carolina are considered Tier 3 markets, and the New York Harbor area is designated Tier 4. We will focus on selling products within Tiers 1, 2 and 3, unless favorable refining margin opportunities arise in markets like the New York Harbor.

      During 2001, the Yorktown refinery’s sales were concentrated in Eastern Virginia and Maryland, where more than 50% of its gasoline production was sold. Approximately 90% of product volume moves across the marine dock, with the remaining amount being transported by truck or rail. Third-party truck transports are primarily used to deliver products to the refinery’s Tier 1 customers. The CSX rail system, on which the refinery is located, transports shipments of mixed butane and anode coke from the refinery to its customers.

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Terminal operations

      The refinery’s dock system, which is capable of handling 80,000 ton deadweight tankers and barges up to 100,000 barrels, handles all crude oil receipts and the bulk of the finished product. The refinery includes approximately 1.9 million barrels of crude tankage, including approximately 500,000 barrels of storage capacity through leased tanks from Virginia Power. The refinery also owns approximately 600,000 barrels of gasoline tank storage, 800,000 barrels of gasoline blendstock storage, and 300,000 barrels of distillate tank storage. We believe we can increase the capacity of the truck loading rack through an upgrade of the rack for a cost of approximately $800,000.

Retail Group

      We own and operate 145 service stations with full convenience stores or kiosks. These service stations are located in New Mexico, Arizona and Colorado, where we have been active in retail marketing for more than 20 years. Our retail operations provide a market outlet for a significant portion of our Ciniza and Bloomfield refineries’ production. In 2001, our service stations and our travel center sold approximately 35% of our combined total production from our Ciniza and Bloomfield refineries. We regularly invest to upgrade our service station network, including signage upgrades and other enhancements. During 2000 our service stations averaged fuel margins of 16.8 cents per gallon compared to a national average of 13.3 cents per gallon. In addition, our service stations generated fuel gross profit dollars per store of $219,772 in 2001 compared to a national average of $168,000.

      Our convenience stores sell items such as general merchandise, tobacco products, alcoholic and nonalcoholic beverages, fast food, health and beauty aids, and automotive products, and most of our locations offer ATM services. These stores offer a mix of our own branded food service/deli items and certain of the stores offer nationally franchised products such as Blimpie, Taco Bell and A&W. Our kiosks offer limited merchandise, consisting primarily of tobacco products, but also including candy and other snacks and some automotive products.

      We obtained all of our kiosk operations as ancillary assets in acquisition transactions, and we do not develop new kiosk operations. During 2000 our convenience stores and kiosks exceeded national industry averages in several performance categories, including merchandise gross margin and merchandise sales per store. Our same store merchandise sales volume increased by a compound annual growth rate of approximately 11% over the last three years.

      We attribute our strong performance to our focus on site location, access/design, automation, attractive merchandising and an emphasis on value-added customer service. We have a strong commitment to customer service, and believe we retain the loyalty of many of our customers through our use of promotional items and offerings of free air and water.

      As a result of our ongoing retail asset evaluation initiated in 2001, we identified 60 non-strategic or underperforming units for possible divestiture, most of which included kiosks rather than full convenience stores. We subsequently removed 13 of these units from the list due to improved performance. Of the remaining units, 13 have been sold, eight have been closed and reclassified as assets held for sale and one leased unit has been returned to its owner. We continue to operate the remaining 25 stations and may divest them if we receive and negotiate acceptable offers. In addition, we closed 12 other units in the first half of 2001. Seven of these units are classified as assets held for sale, we returned three leased units to their owners, and we are attempting to sublease two others. Additionally, management agreements for four Navajo-owned service stations were terminated in 2001 and the locations returned to their owners. In addition, consistent with our stated strategy to rationalize our asset base, we also are evaluating the possible sale of certain additional retail assets if acceptable terms can be negotiated.

      In 2001, we continued to re-brand various service stations in an effort to consolidate the number of gasoline brands under which our products are sold. At December 31, 2001, we had 25 Giant branded sites, 54 Mustang branded sites, seven Thriftway branded sites, and one each of Gasamat, Gasman and Diamond Shamrock branded sites. At December 31, 2001, we had converted an additional 62 units (including the travel

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center) to the Conoco brand pursuant to a 1997 strategic branding/licensing agreement with Conoco Oil Co. This agreement allows us to brand approved gasoline locations with the Conoco gasoline brand. We are considering re-branding the remaining 10 miscellaneous branded sites.

      In addition to our service stations, we own and operate a travel center adjacent to the Ciniza refinery on I-40. The travel center provides a direct market for a portion of the Ciniza refinery’s diesel production, which we can sell at virtually no incremental transportation cost. During 2001, we sold approximately 23.1 million gallons of diesel fuel at the travel center (approximately 27% of the Ciniza refinery’s total diesel production). The travel center facility includes 18 high volume diesel fuel islands, a large truck repair facility, and a 29,000 square foot shopping mall. It also contains a 265-seat, full-service restaurant; Taco Bell, Pizza Hut Express and A&W Root Beer fast food operations; two large convenience stores; a 24-hour movie theater; a hair salon; and other accommodations such as showers, laundry, security and lighted parking. During 2002, we plan to add a state of the art business center, serving the needs of both professional drivers and local residents.

      Set forth below is data with respect to our retail operations for the indicated periods.

	Year Ended December 31,
	2001			2000			1999			1998			1997
Retail Group
Service Stations
Fuel gallons sold (in thousands)		187,152			208,125			211,873			184,375			125,219
Product margin ($/gallon)	$	0.170		$	0.168		$	0.179		$	0.206		$	0.213
Merchandise sold ($ in thousands)	$	138,403		$	131,825		$	111,603		$	95,496		$	67,601
Merchandise margin		28	%		28	%		28	%		30	%		30	%
Number of outlets at year end		150			179			172			166			148
Travel Center
Fuel gallons sold (in thousands)		24,964			26,698			27,991			24,950			19,434
Product margin ($/gallon)	$	0.103		$	0.104		$	0.111		$	0.111		$	0.111
Merchandise sold ($ in thousands)	$	6,128		$	6,719		$	7,291		$	7,331		$	7,382
Merchandise margin		44	%		46	%		45	%		45	%		44	%
Number of outlets at year end		1			1			1			1			1

Phoenix Fuel

      Phoenix Fuel, we believe, is the largest wholesale petroleum products distributor in Arizona. Phoenix Fuel markets gasoline, diesel fuel, jet fuel, kerosene, motor oil, hydraulic oil, gear oil, cutting oil, grease, and various chemicals and solvents. Phoenix Fuel operates five lubricant and bulk petroleum distribution plants, 19 cardlock locations, a bulk lubricant terminal facility and a fleet of 32 finished product transports, 21 finished product tankwagons and 11 lubricant delivery trucks. Phoenix Fuel’s operations are located throughout Arizona, and it markets primarily in Arizona and also in Nevada, New Mexico and Texas. Phoenix Fuel offers its customers a variety of services, including fuel management systems, tank level monitoring, and automated dispatch. Phoenix Fuel markets under the trade names Phoenix Fuel, Firebird Fuel, Tucson Fuel and Mesa Fuel. Phoenix Fuel’s principal markets are mining, construction, utility, manufacturing, aviation and agriculture.

      In December 2001, Phoenix Fuel sold its lubricants business in Las Vegas, Nevada. Phoenix Fuel will continue to distribute finished products to customers in southern Nevada.

      During 2001, Phoenix Fuel sold approximately 394.2 million gallons of gasoline and diesel fuel for approximately $364.6 million. Sales of additional products, including approximately 4.5 million gallons of lubricants and other related items, totaled approximately $25.7 million during 2001. Phoenix Fuel primarily purchases the petroleum products it sells from other refiners and marketers and to a lesser extent from the

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Refining Group. Phoenix Fuel is a large purchaser of refined products supplied into the Phoenix and Tucson markets.

      Set forth below is data with respect to our Phoenix Fuel operations for the indicated periods.

	Year Ended December 31,
	2001			2000			1999			1998			1997
Phoenix Fuel
Fuel gallons sold (in thousands)		394,158			424,290			351,949			314,763			172,121
Product margin ($/gallon)	$	0.050		$	0.052		$	0.064		$	0.067		$	0.075
Lubricant sales ($ in thousands)	$	22,347		$	24,210		$	22,067		$	22,517		$	12,923
Lubricant margin		17	%		16	%		15	%		14	%		14	%

Oxygenates

      The government has mandated the use of gasoline containing oxygenates in certain areas in which we sell motor vehicle fuel. Oxygenates are oxygen-containing compounds that can be used as a motor vehicle fuel supplement to reduce carbon monoxide emissions. We anticipate that we will be able to purchase sufficient quantities of oxygenates from third parties at acceptable prices for the foreseeable future.

Employees

      We employed approximately 2,317 persons as of March 31, 2002, including approximately 2,092 full-time and approximately 225 part-time employees. The Retail Group employed approximately 1,598 persons, including approximately 220 part-time. The Refining Group employed approximately 419 persons, including two part-time. Phoenix Fuel employed approximately 201 persons, including two part-time. Corporate staff operations employed approximately 97 persons, including one part-time. As of June 30, 2002, the Yorktown refinery also employed approximately 190 persons.

      We historically have had no employees covered by a collective bargaining agreement. The hourly workforce at the Yorktown refinery is represented by the Paper, Allied — Industrial, Chemical and Energy Workers International Union Local 2-10 pursuant to an agreement that expires in 2006.

Competitive Conditions

      Our industry is highly competitive. Many of our competitors are large, integrated oil companies which, because of their more diverse operations, stronger capitalization and better brand name recognition, may be better able than we are to withstand volatile industry conditions, including shortages or excesses of crude oil or refined products or intense price competition.

      The principal competitive factors affecting our refining operations are: (a) the quality, quantity and delivered costs of crude oil, NGLs and other refinery feedstocks; (b) refinery processing efficiencies; (c) refined product mix; (d) refined product selling prices; (e) refinery processing costs per barrel; (f) the cost of delivering refined products to markets; and (g) the ability of competitors to deliver refined products into our market areas by pipeline or other means.

      The principal competitive factors affecting our retail marketing business are (a) location of service stations, (b) product price, (c) product availability and cost, including prices being offered for refined products by major oil companies to our competitors in certain markets, (d) appearance and cleanliness of service stations, (e) brand acceptance, and (f) the development of gasoline retail operations by non-traditional marketers.

      The principal competitive factors affecting Phoenix Fuel are (a) the availability of product supply from other refiners and marketers, and (b) the ability to generate margins sufficient to cover fixed and variable expenses.

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Competitors in the Four Corners Market

      Our competitors have refineries that are located outside the Four Corners area. Some of our competitors’ refineries are larger and more efficient than our refineries. As a result, many of these refineries have lower per barrel crude oil refinery processing costs. We compete with major and larger integrated oil companies and with independent refiners in Southeastern New Mexico, West Texas, the Texas Panhandle, Utah, Colorado and Southern California in connection with the sale of refined products. Refined products from the Texas and Southeastern New Mexico refineries can be shipped to Albuquerque, New Mexico, primarily through two common carrier pipelines, the Chevron line originating in El Paso, Texas and the Emerald Line originating in Amarillo, Texas. In late 1999, an existing NGLs pipeline was converted to a refined products pipeline. This converted line originates in Southeastern New Mexico and delivers petroleum products into the Four Corners area and diesel fuel to a terminal in Moriarty, New Mexico, 40 miles east of Albuquerque. We understand that projects to expand the pumping capacity of the pipeline and to expand the terminal in Moriarty to include gasoline and jet fuel have been completed. This project, mergers between large integrated oil companies and upgrades to competitors’ refineries and pipeline systems have resulted in increased competition for our southwestern U.S. operations.

      We are aware of a number of actions, proposals or industry discussions regarding product pipeline projects that could impact portions of our marketing areas. One of these projects is the potential conversion and extension of the existing Texas-New Mexico crude oil pipeline to transport refined products from West Texas to New Mexico, including Albuquerque and potentially Bloomfield. Another potential project would take product on to Salt Lake City, Utah. Previously these two projects were referred to as the Aspen Pipeline. In addition, various actions have been undertaken to increase the supply of refined products to El Paso, Texas, including the Longhorn Pipeline project. El Paso, Texas is currently connected by the Chevron pipeline to the Albuquerque, New Mexico area to the north and by the Kinder-Morgan pipeline to the Phoenix and Tucson, Arizona markets to the west. The completion of some or all of these projects could result in increased competition by increasing the amount of refined products potentially available in these markets, as well as improving competitor access to these areas. It also could result in new opportunities for us, as we are a net purchaser of refined products in some of these areas.

Competitors in the Yorktown Refinery’s Market

      The Yorktown refinery is located in the petroleum administration defense district, or “PADD 1.” PADD 1 product demand is approximately 5 million bpd. There are 11 refineries located in PADD 1 supplying approximately 1.7 million bpd of refined products. The balance, approximately 3.3 million bpd, is imported from other PADD refiners, primarily the Gulf Coast via the Colonial Pipeline (2.8 million bpd) and offshore refiners by water transport (.5 million bpd). We believe the Yorktown refinery’s position between the Gulf Coast and the New York Harbor provides a cost advantage versus Gulf Coast refiners of as much as two to three cents per gallon, or approximately $1.25 per barrel. The refinery’s ability to produce conventional and reformulated gasolines, plus on road diesel fuel (low sulfur) and heating oil (high sulfur) adds flexibility for the marketing of products. The Yorktown refinery competes with major and larger integrated refiners in PADD 1 and the Gulf Coast.

Legal Proceedings

      We are a party to ordinary routine litigation incidental to our business. In addition, see the information under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Environmental and Other,” the discussion contained in “Related Party Transactions” and the information regarding contingencies in Note 16 to our consolidated financial statements.

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YORKTOWN ACQUISITION AGREEMENTS

      On May 14, 2002, we acquired the Yorktown refinery from BP Corporation North America Inc. and BP Products North America Inc., or “BP,” for $127.5 million, plus the value of associated inventory at closing, or $65.2 million, the assumption of certain liabilities, and an earn-out.

      As part of the Yorktown acquisition, we agreed to pay to BP, beginning in 2003 and concluding at the end of 2005, earn-out payments up to a maximum of $25.0 million when the average monthly spreads for regular reformulated gasoline or No. 2 distillate over West Texas Intermediate, or “WTI,” equivalent light crude oil on the New York Mercantile Exchange, or “MERC spreads,” exceed $5.50 or $4.00 per barrel, respectively. The MERC spreads are highly correlated with historical Yorktown refinery margins. The earn-out payment will equal the MERC spreads multiplied by a fixed volume of 10,000 bpd each (approximately one-third of capacity of the Yorktown refinery). If the earn-out is triggered, we expect to benefit from the improved margins on any volumes in excess of 10,000 bpd, provided that the MERC spreads are not excessively volatile. The average monthly MERC spreads for June 2002 were $6.48 and $1.68 per barrel for reformulated gasoline and No. 2 distillate, respectively.

      We have assumed certain liabilities and obligations in connection with our purchase of the Yorktown refinery. These assumed liabilities include, subject to certain exceptions, all obligations and liabilities under health, safety and environmental laws caused by, arising from, incurred in connection with or relating in any way to the ownership of the Yorktown refinery or its operation. We have agreed to indemnify BP against losses of any kind incurred in connection with or related to the liabilities and obligations we have assumed. As described below, we only have limited indemnification rights against BP.

      In particular, we assumed BP’s responsibilities and liabilities under a consent decree, dated August 29, 2001, among the United States, BP Exploration and Oil Co., Amoco Oil Company, and Atlantic Richfield Company. The consent decree requires the Yorktown refinery, among other things, to reduce NOx, SO₂ and particulate matter emissions and to upgrade the refinery’s leak detection and repair program. We estimate, and considered in our purchase price for the Yorktown refinery, that we will incur capital expenditures of approximately $20 to $27 million to comply with the consent decree over a period of approximately five years, although we believe we will incur most of these expenses in 2006. In addition, we estimate that we will incur operating expenses associated with the requirements of the consent decree of approximately $1.6 to $2.6 million per year.

      BP has agreed to indemnify us for all losses that are incurred by us and relating to (a) BP’s breach or failure to perform any covenant or agreement in the agreement, (b) BP’s breach of a representation or warranty in the agreement that survives the closing of the Yorktown acquisition, (c) liabilities prior to the closing date for litigation, personal injury or wrongful death claims, or (d) BP’s failure to comply with bulk sales laws. In order to have a claim against BP for losses relating to any of these matters, the aggregate of all losses from these matters must exceed $4.0 million. Losses amounting to less than $250,000 in the aggregate arising out of the same occurrence or matter are not aggregated with other losses for the purpose of reaching the $4.0 million threshold. After the threshold has been reached, BP has no obligation to indemnify us with respect to such matters for any losses amounting to less than $250,000 in the aggregate arising out of the same occurrence or matter.

      BP also has agreed to indemnify us for losses that are incurred by us and relating to liabilities prior to the closing date for taxes, including real property taxes, accounts payable, indebtedness for borrowed money, violations of anti-trust laws, environmental liabilities associated with off-site disposal, civil or criminal penalties imposed upon BP or its affiliates by governmental entities, expenses or brokerage fees related to the Yorktown acquisition and the excluded assets. There is no threshold or minimum claim amount that is required for us to seek a claim against BP for any of these matters.

      BP also has agreed to indemnify us for all losses that are incurred by us in connection with or related in any way to property damage caused by, or any environmental remediation required due to, a violation of health, safety and environmental laws during the operation of the refinery by BP. In order to have a claim against BP, however, the aggregate of all such losses must exceed $5.0 million, in which event our claim only

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relates to the amount exceeding $5.0 million. After $5.0 million is reached, our claim is limited to 50% of the amount by which the losses exceed $5.0 million until the aggregate of all such losses exceeds $10.0 million. After $10.0 million is reached, our claim would be for 100% of the amount by which the losses exceed $10.0 million. In applying these provisions, losses amounting to less than $250,000 in the aggregate arising out of the same occurrence or matter are not aggregated with any other losses for purposes of determining whether and when the $5.0 million or $10.0 million has been reached. After the $5.0 million or $10.0 million has been reached, BP has no obligation to indemnify us with respect to such matters for any losses amounting to less than $250,000 in the aggregate arising out of the same occurrence or matter.

      Except as specified in the Yorktown purchase agreement, in order to seek indemnification from BP, we must notify BP of a claim within two years following the closing date. BP’s aggregate liability for indemnification under the refinery purchase agreement, including liability for environmental indemnification, is limited to $35.0 million.

      We have entered into agreements that provide for 100% of the supply of crude oil to, and 100% of the offtake (including propane and butane at prices based on an index) of production from, the Yorktown refinery. These agreements include: (a) transitional feedstock supply agreements, with terms ranging from six months to one year, by which BP will supply 100% of the refinery’s crude oil and other raw material needs; (b) a one-year contract with BP under which the Yorktown refinery will continue to supply BP’s branded product in the local area and Salisbury, Maryland; (c) the assumption of existing contracts with Exxon Mobil, Chevron, Citgo, Southern States, and Sunoco to supply them product on a wholesale basis; and (d) transitional contracts, with terms ranging from six months to one year, requiring BP to purchase the balance of production from the Yorktown refinery, estimated to be 33,400 bpd. Given market dynamics and conversations we have had with current and potential new customers, we believe there is sufficient demand to purchase all of the Yorktown refinery’s production once the transitional off-take agreements have expired.

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MANAGEMENT

Giant Management

      The following table sets forth certain information with respect to our directors, executive officers and key employees as of June 30, 2002

Name	Age		Position
Fredric L. Holliger		54	Chairman of the Board and Chief Executive Officer
Richard T. Kalen, Jr.		59	Director
James E. Acridge		62	Director
Anthony J. Bernitsky, Jr.		72	Director
George M. Rapport		59	Director
Larry L. DeRoin		60	Director
Morgan Gust		55	President
S. Leland Gould		46	Executive Vice President, Governmental Affairs and Real Estate
Jack W. Keller		58	President of Phoenix Fuel Strategic Business Unit
Miguel A. Foegal		49	Executive Vice President of Retail Group Strategic Business Unit
Carl D. Shook		63	Executive Vice President of Refining Group Strategic Business Unit
C. Leroy Crow		51	Executive Vice President of Refining Group Strategic Business Unit
Kim H. Bullerdick		48	Vice President, General Counsel, and Secretary
Mark B. Cox		43	Vice President, Treasurer, Chief Financial Officer, and Assistant Secretary
Gary R. Dalke		50	Vice President, Controller, Chief Accounting Officer, and Assistant Secretary

      Fredric L. Holliger has served as our director since October 1989 and as Chairman of the Board and Chief Executive Officer since March 2002. Mr. Holliger also serves as Chairman of the Nominating Committee. From October 1989 to March 2002, Mr. Holliger was our Executive Vice President and Chief Operating Officer. Mr. Holliger joined Giant Industries Arizona, Inc. (“Giant Arizona”), now a principal subsidiary of ours, as Senior Vice President, and President of the Giant Arizona refining division in February 1989. Mr. Holliger also has served as the Chief Executive Officer of Phoenix Fuel since it was acquired by Giant Arizona in June 1997, and was a director of Phoenix Fuel from June 1997 through March 2002.

      Richard T. Kalen, Jr. has served as our director since December 1989. Mr. Kalen also serves as Chairman of the Compensation Committee and as a member of the Nominating Committee. He has been the President and owner of Kalen & Associates, an executive search and consulting firm, since April 1988.

      James E. Acridge has served as our director since October 1989. Mr. Acridge started Giant Arizona in 1969. Mr. Acridge also serves as a member of the Nominating Committee. From October 1989 through March 2002, Mr. Acridge served as our Chairman of the Board, President and Chief Executive Officer.

      Anthony J. Bernitsky, Jr. has served as our director since August 1996. Mr. Bernitsky also serves as a member of the Audit Committee and the Nominating Committee. From its formation in 1982 through October 1998, Mr. Bernitsky was a co-owner, director and the President of Sandia Oil Company. Mr. Bernitsky also was a founder, co-owner, officer and director of Sandia Stores, a business that was substantially the same as Sandia Oil Company. Until October 1998, Sandia Oil Company operated a wholesale and retail gasoline business with service stations and convenience stores located in New Mexico and on the Navajo Indian Reservation. In October 1998, Sandia leased all of its operating assets to an unrelated company then known as Sandia Acquisition Company. Sandia Acquisition Company subsequently

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was renamed Sandia Oil Company and the original Sandia Oil Company was renamed PoorBern Leasing Company. Mr. Bernitsky remains a co-owner, director and the President of PoorBern Leasing Company. Mr. Bernitsky is not an owner, officer or director of the new Sandia Oil Company. Mr. Bernitsky also is a director of the New Mexico Petroleum Marketers Association.

      George M. Rapport has served as our director since September 2001. Mr. Rapport also serves as the Chairman of the Audit Committee and as a member of the Compensation Committee and the Stock Incentive Plan Committee. Since September 2001, Mr. Rapport also has served as the Senior Vice President and Chief Financial Officer for Nimir Petroleum Limited, a London-based, international oil and gas exploration and production company. From 1969 to September 2001, Mr. Rapport served in a number of capacities with Chase Manhattan Bank in the United States and Europe, including Managing Director — Private Banking and Managing Director — Global Petroleum.

      Larry L. DeRoin has served as our director since June 2002. Mr. DeRoin also serves as a member of the Audit Committee, the Compensation Committee and the Nominating Committee and is Chairman of the Stock Incentive Plan Committee. Since September 2000, Mr. DeRoin has been the President of DeRoin Management, Inc., which provides consulting services to Northern Border Pipeline Co. and Northern Border Partners, L.P. From 1993 to September 2000, Mr. DeRoin was Chairman and Chief Executive Officer of Northern Border Partners, L.P., Chairman of the Management Committee for Northern Border Pipeline Co., and President of Northern Plains Natural Gas Co.

      Morgan Gust has served as our President since March 2002. From September 1998 to March 2002, Mr. Gust served as our Executive Vice President and as Executive Vice President of Giant Arizona. Mr. Gust joined us in August 1990, and over the years served in various senior management positions for us and for Giant Arizona, including Vice President, Vice President Administration, General Counsel, and Secretary.

      S. Leland Gould has served as Giant Arizona’s Executive Vice President, Governmental Affairs and Real Estate, since June 2002. From March 2002 to June 2002, Mr. Gould served as our and Giant Arizona’s Executive Vice President, Director of Retail Operations. Mr. Gould joined Giant Arizona in August 2000 as Vice President, Strategic Business Development. Prior to August 2000, Mr. Gould was Vice President and National Sales manager for Wolf Camera, a photo retail store chain with 800 stores nationwide. Prior to that, Mr. Gould served as Vice President of Fox Photo and CPI Corporation, a subsidiary of Eastman Kodak, from May 1993 to July 1998.

      Jack W. Keller has served as the President of Phoenix Fuel since it was acquired by Giant Arizona in June 1997 and as Chief Operating Officer of Phoenix Fuel since May 1998. From 1989 to June 1997, Mr. Keller served in various senior management roles with Phoenix Fuel, including President from December 1996 to June 1997, Chief Operating Officer from 1993 to 1996, and General Manager from 1989 to 1993. From December 1997 to September 1998, Mr. Keller also served as Senior Vice President, Marketing Division of Giant Arizona.

      Miguel A. Foegal has served as Executive Vice President of our Retail Group and as Executive Vice President, Retail Group of Giant Arizona since May 2000. From March 1999 to May 2000, Mr. Foegal served as Senior Vice President, Retail Marketing for Giant Arizona. Mr. Foegal joined us as Vice President, Retail Marketing in February 1998. From January 1992 to February 1998, Mr. Foegal was a Regional Vice President for Circle K/Tosco Marketing Co., where he was responsible for convenience and gas stores in the western United States.

      Carl D. Shook has served as Executive Vice President of our Refining Group and as Executive Vice President, Refining Group of Giant Arizona since March 2000. From February 1999 to February 2000, Mr. Shook served as Senior Vice President, Engineering and Technical Services for Giant Arizona. From January 1998 to February 1999, Mr. Shook served as Vice President, Engineering and Analysis for Giant Arizona. From October 1996 until January 1998, Mr. Shook served as Vice President, Corporate Planning and Evaluation for Giant Arizona. From February 1995 until October 1996, Mr. Shook served as Senior Vice President of Refinery Operations for Giant Arizona.

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      C. Leroy Crow has served as Executive Vice President of our Refining Group and as Executive Vice President, Refining Group of Giant Arizona since March 2000. From February 1999 to February 2000, Mr. Crow served as Senior Vice President, Refinery Operations and Raw Material Supply for Giant Arizona. From December 1997 to February 1999, Mr. Crow served as Senior Vice President, Operations Division for Giant Arizona. From February 1996 to June 1997, when it was acquired by Giant Arizona, Mr. Crow served as the Vice President of Operations for Phoenix Fuel. Following the acquisition, Mr. Crow served as Vice President of Operations until December 1997. Prior to joining Phoenix Fuel in February 1996, Mr. Crow was the General Manager of Pro Petroleum, a wholesale fuel distributor in Phoenix, Arizona, from 1993 to 1996.

      Kim H. Bullerdick has served as our Vice President and Secretary and as Vice President and Secretary of Giant Arizona since December 1998 and as our and Giant Arizona’s General Counsel since May 2000. From December 1998 to May 2000, Mr. Bullerdick also was our and Giant Arizona’s Legal Department Director. From September 1998 to December 1998, Mr. Bullerdick served as our and Giant Arizona’s Assistant Secretary. Mr. Bullerdick joined Giant Arizona in June 1987 as Corporate Counsel. In August 1995, he was appointed Assistant General Counsel of Giant Arizona, and in 1998, he was appointed Associate General Counsel; Manager, Legal Department; and Manager, Regulatory Affairs.

      Mark B. Cox has served as our and Giant Arizona’s Vice President, Treasurer, Financial Officer and Assistant Secretary since December 1998. In March 2002, Mr. Cox was named Chief Financial Officer. From September 1998 to December 1998, Mr. Cox served as our and Giant Arizona’s Treasurer and Assistant Secretary. From December 1996 to September 1998, Mr. Cox served as our and Giant Arizona’s Treasurer. From October 1994 to December 1996, Mr. Cox served as Assistant Treasurer of Giant Arizona.

      Gary R. Dalke has served as our and Giant Arizona’s Vice President, Controller, Accounting Officer and Assistant Secretary since December 1998. In March 2002, Mr. Dalke was named Chief Accounting Officer. From September 1998 to December 1998, Mr. Dalke served as our and Giant Arizona’s Assistant Secretary. From April 1998 to September 1998, Mr. Dalke served as Chief Information Officer of Giant Arizona, and from July 1998 to December 1998, Mr. Dalke served as the Controller for Giant Arizona. From January 1990 to June 1997 when it was acquired by Giant Arizona, Mr. Dalke served as Chief Financial Officer of Phoenix Fuel. From January 1997 to June 1997, Mr. Dalke also was Vice President of Phoenix Fuel. Following the acquisition, Mr. Dalke was Vice President and Chief Financial Officer of Phoenix Fuel from June 1997 to July 1998, and from June 1997 to September 1998, he also was Treasurer of Phoenix Fuel.

Yorktown Refinery Management

      The four key members of the Yorktown refinery management team are Darrell Garrett, Dale Crumpler, Steve Baird and Aretha Preston. Together, they have an average of 21 years of experience in the energy industry. Each of them has accepted our offer to continue their employment at the refinery. In addition, John Stokes of Giant has relocated to Yorktown as the Senior Vice President in charge of the refinery. Biographical information on Messrs. Stokes, Garrett, Crumpler and Baird and Ms. Preston is summarized below:

      John Stokes is the Senior Vice President of the Yorktown refinery. Since 1998, he has been the Vice President of Refining at both our Bloomfield and Ciniza refineries. From 1995 to 1998, he was the Refinery Manager at the Bloomfield refinery. Mr. Stokes worked at the Ciniza refinery for 20 years, 13 years under our management and seven years under Shell management.

      Darrell Garrett has been Manager of Maintenance, Engineering and Reliability at the Yorktown refinery since January 1999. He has worked within the BP organization for over 30 years, and has previously held various maintenance positions at several facilities. Before coming to the Yorktown refinery, he was at BP’s Alliance refinery.

      Dale Crumpler came to the Yorktown refinery in January 1998 as Process Hazards Management Coordinator, and since November of 2000, he has been the Asset Superintendent for Ultra/ Util/ Oil Movements. From April 1994 to December 1997, Mr. Crumpler was a senior engineer, providing process safety management audit services and conducting process hazards analysis and incident investigations, with

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JBF Associates. Prior to working for JBF, Mr. Crumpler worked for Amoco for approximately 18 years at the Yorktown refinery and Amoco’s Chicago general office.

      Steve Baird has been the Combo/ Coker Asset Superintendent at the Yorktown refinery since 1999, responsible for the safe, environmentally sound, and profitable operation of the Combo/ Coker units. Mr. Baird joined Amoco in 1982 at its Texas City refinery, where he held a number of positions in the Engineering Department. In 1988 he transferred to the Yorktown refinery, and thereafter held various operating engineer positions on several units, and lead the process computing group, until taking his current position.

      Aretha Preston has been the Human Resources Manager at the Yorktown refinery since September 1996. Prior to this assignment she held various human resources positions within the BP organization for six years in both the Chicago general office and the Texas City refinery.

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SECURITY OWNERSHIP OF

CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

Security Ownership of Certain Beneficial Owners

      The following table sets forth information concerning the beneficial ownership of our common stock as of June 30, 2002 (unless otherwise noted) by each stockholder who is known by us to own beneficially in excess of 5% of our outstanding common stock. Except as set forth below, no other person or entity is known by us to beneficially own more than 5% of our outstanding common stock.

		Amount and
		Nature
		of Beneficial			Percent
Name and Address of Beneficial Owners		Ownership			of Class
James E. Acridge			1,456,849	(a)		16.89	%
	Pinnacle Sonoran Properties 23023 N. Scottsdale Road Scottsdale, Arizona 85255
Fidelity Management Trust Company, as Trustee of Giant Industries, Inc. 401(k) Plan			1,051,169	(b)		12.26	%
	82 Devonshire Street, C8A Boston, Massachusetts 02109
FMR Corp.			901,600	(c)		10.52	%
	82 Devonshire Street Boston, Massachusetts 02109
Dimensional Fund Advisors Inc.			800,900	(d)		9.34	%
	1299 Ocean Avenue, 11th Floor Santa Monica, California 90401
ROI Capital Management, Inc.			449,000	(e)		5.24	%
	17 E. Sir Frances Drake Blvd., Suite 225 Larkspur, California 94939

(a)	The nature of the beneficial ownership of the shares held by Mr. Acridge is described in more detail below in the table captioned “Security Ownership of Management.”
(b)	As of May 31, 2002.
(c)	Such shares are as reported on a Schedule 13G, dated May 10, 2001, filed by FMR Corp. Fidelity Management & Research Company, or “Fidelity,” 82 Devonshire Street, Boston, Massachusetts 02109, a wholly-owned subsidiary of FMR Corp. and an investment adviser registered under Section 203 of the Investment Advisors Act of 1940, is the beneficial owner of 901,600 shares of Giant’s outstanding common stock as a result of acting as investment advisor to various investment companies registered under Section 8 of the Investment Company Act of 1940. The ownership of one investment company, Fidelity Low Priced Stock Fund, amounted to 901,600 shares of the common stock outstanding. Fidelity Low Priced Stock Fund has its principal business office at 82 Devonshire Street, Boston, Massachusetts 02109. Each of Edward C. Johnson 3d, FMR Corp., through its control of Fidelity, and the funds has sole power to dispose of the 901,600 shares owned by the funds. Neither FMR Corp. nor Mr. Johnson, Chairman of FMR Corp., has the sole power to vote or direct the voting of the shares owned directly by the Fidelity Funds, which power resides with the Funds’ Boards of Trustees. Fidelity carries out the voting of the shares under written guidelines established by the Funds’ Boards of Trustees. Members of the Johnson family are the predominant owners of Class B shares of common stock of FMR Corp., representing approximately 49% of the voting power of FMR Corp. Mr. Johnson owns 12.0% and Ms. Johnson owns 24.5% of the aggregate outstanding voting stock of FMR Corp. Mr. Johnson is Chairman of FMR Corp. and Ms. Johnson is a Director of FMR Corp. The Johnson family group and all other Class B shareholders have entered into a shareholders’ voting agreement under which all Class B shares will be voted in accordance with the majority vote of Class B shares. Accordingly, through their ownership of voting common stock and the execution of the shareholders’ voting

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	agreement, members of the Johnson family may be deemed, under the Investment Company Act of 1940, to form a controlling group with respect to FMR Corp.
(d)	Such shares are as reported on a Schedule 13G, dated January 30, 2002, filed by Dimensional Fund Advisors Inc., or “Dimensional.” The Schedule 13G states that Dimensional, an investment advisor registered under Section 203 of the Investment Advisors Act of 1940, furnishes investment advice to four investment companies registered under the Investment Company Act of 1940, and serves as investment manager to certain other commingled group trusts and separate accounts (as used in this paragraph only, collectively, the “Funds”). The Schedule 13G further states that in its role as investment advisor or manager, Dimensional possesses both voting and/or investment power over our common stock owned by the Funds. The Schedule 13G states that all our common stock reported in the Schedule 13G is owned by the Funds, and that Dimensional disclaims beneficial ownership of such securities.
(e)	Such shares are as reported on a Schedule 13G, dated February 14, 2002, filed by ROI Capital Management, Inc., or “ROICM.” The Schedule 13G states that ROICM is deemed to be the beneficial owner of the shares described in the Schedule 13G pursuant to separate arrangements whereby it acts as investment adviser to certain persons, including ROI Partners, L.P. The Schedule 13G further states that each person for whom ROICM acts as investment adviser has the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, the securities purchased or held pursuant to such arrangements. The Schedule 13G also states that Mitchell J. Soboleski and Mark T. Boyer are deemed to be the beneficial owners of the number of securities described in the Schedule 13G pursuant to their ownership interest in ROICM.

Security Ownership of Management

      The following table sets forth information concerning the beneficial ownership of our common stock as of June 30, 2002 (unless otherwise noted) by: (a) each director, (b) each named executive officer, and (c) all executive officers and directors as a group (15 persons). Except as otherwise indicated, to our knowledge, all persons listed below have sole voting and investment power with respect to their shares of our common stock, except to the extent that authority is shared by spouses under applicable law. Our only outstanding class of equity securities is our common stock.

				Options
				Exercisable
				Within						Total
				60 Days						Beneficially		Percent
Name	Common Stock			of March 20			401(k)(a)			Owned		of Class
James E. Acridge		1,400,527	(b)(c)		55,800			522			1,456,849		16.89	%
Fredric L. Holliger		23,927	(d)		80,000			10,930			114,857		*
Morgan Gust		10,500			78,000			6,850			95,350		*
C. Leroy Crow		0			11,666			1,554			13,220		*
Carl D. Shook		7,500			14,000			1,924			23,424		*
Anthony J. Bernitsky, Jr.		30,000	(e)		0	(f)		0	(f)		30,000		*
George M. Rapport		0			0	(f)		0	(f)		0		*
Richard T. Kalen, Jr.		100			0	(f)		0	(f)		100		*
Larry L. DeRoin		1,000			0	(f)		0	(f)		1,000		*
Executive Officers and Directors as a Group (15 Persons)		1,477,179			296,796			38,538			1,812,513		20.44	%

*  Less than 1%

(a) The amount listed is the approximate number of shares of our common stock allocated to the Giant Stock Fund portion of the individual’s account in the Giant Industries, Inc. and Affiliate Companies 401(k) Plan (the “401(k)”) as of June 30, 2002. The Giant Stock Fund is a unitized stock fund composed primarily of our common stock and a small amount (approximately 5%) of short-term money market funds. Ownership in the Giant Stock Fund is measured in units rather than shares of our common stock. Each 401(k) participant has the right to direct the trustee of the 401(k) to vote the participant’s

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	proportionate share of all shares of our common stock underlying the units in the Giant Stock Fund with such proportionate share being determined by multiplying the total number of underlying shares held in the Giant Stock Fund by a fraction, the numerator of which is the number of underlying shares allocated to such participant and the denominator of which is the number of underlying shares allocated to all participants’ accounts as of the record date. The trustee of the 401(k) and the participants have shared dispositive power with respect to the shares allocated to a participant’s account.
(b)	Includes 200 shares of common stock owned by Mr. Acridge’s wife as to which Mr. Acridge disclaims beneficial ownership.
(c)	Mr. Acridge has advised us that he has pledged 1,400,327 shares of his common stock to various lenders as security for loans, the proceeds of which were used for general purposes and not to finance the acquisition of common stock. Mr. Acridge retains the right to direct the voting and disposition of such shares and the right to receive all dividends, if any, subject to standard default provisions. We have been advised that an entity Mr. Acridge owns did not make when due a monthly payment due and owning to certain lenders in December 2001. We understand that a letter agreement was entered into with the lenders, in which the lenders agreed to forbear from exercising certain rights and remedies available to them in connection with the December payment, if certain terms and conditions were satisfied. We further understand that, in connection with the forbearance letter, Mr. Acridge pledged 29,622 shares of our common stock to the lenders as additional collateral. We do not know whether the terms and conditions set forth in the forbearance letter have been satisfied. See “Related Party Transactions,” second bullet point.
	In connection with a loan to Mr. Acridge made by a lender that was secured by 144,040 shares of common stock, Mr. Acridge also granted a purchase option to such lender for the 144,040 pledged shares at a price of $10.625 per share. Such option could have been exercised at any time after the earliest of (a) November 22, 1999; (b) our execution of a letter of intent, agreement or other document with respect to a transaction or series of transactions relating to a corporate reorganization or other fundamental event that would lead to the delisting of our capital stock on the New York Stock Exchange; or (c) the occurrence of an event of default under the stock pledge agreement related to the loan. In addition, if at any time Mr. Acridge tendered payment in full of all principal and accrued but unpaid interest under the loan, the lender had five business days to elect, in his sole discretion, to either (a) accept such payment and surrender his rights under the option, or (b) exercise the option as an offset of the amounts due under the loan. If the option was not exercised within such five-day period, it expired. Unless the option expired earlier in connection with the repayment of the loan by Mr. Acridge, the option expired on November 22, 2000. Although the option technically expired on November 22, 2000, a dispute has arisen between Mr. Acridge and the lender that could impact the shares subject to the option.
(d)	Includes 1,000 shares of common stock owned by Mr. Holliger’s minor child as to which Mr. Holliger disclaims beneficial ownership.
(e)	Shares are held in a living trust in which Mr. Bernitsky and his spouse are settlors, co-trustees and beneficiaries.
(f)	To date, non-employee directors have not participated in our stock incentive plans or the 401(k).

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RELATED PARTY TRANSACTIONS

      The following summary discloses transactions between us and our officers, directors, significant stockholders, and their respective family members.

•  On February 19, 2002, we retained Kalen & Associates, an executive search and consulting firm owned by Mr. Kalen, to identify potential candidates for a position at the Yorktown refinery. If Kalen & Associates identifies a candidate that we hire, it will receive a total fee equal to $78,375 plus reasonable expenses incurred. The fee is payable as follows: $26,125 on execution of the contract, $26,125 thirty days after execution, and $26,125 if a candidate found by Kalen & Associates is hired. Kalen & Associates is entitled to the first two payments regardless of whether we hire a candidate it proposes.

•  We loaned $4.0 million to Mr. Acridge on September 17, 1998. The loan was originally evidenced by an unsecured promissory note bearing interest at the prime rate published by the Wall Street Journal on September 17, 1998 (the “Prime Rate”) plus 2.0%. Principal and accrued interest were due and payable in one lump sum on February 28, 1999. On December 23, 1998, we entered into a revised loan agreement with Mr. Acridge. The amount of the loan was increased to $5.0 million, the loan’s interest rate was increased to the Prime Rate plus 3.0%, and the loan’s maturity date was extended to February 28, 2001. An initial interest payment was made on February 28, 1999 for interest due through December 31, 1998. Subsequent interest was due and payable semi-annually on June 30 and December 31 of each year.

We modified the loan again on March 10, 2000. We revised the terms of the loan so that all principal and interest, including interest that otherwise would have been payable on December 31, 1999, became due and payable on February 28, 2001. As security for the modified loan, we received a pledge by an entity owned by Mr. Acridge of a 49% equity interest in an entity that owns the Rawhide Wild West Town (“Rawhide”). We further modified the loan on February 28, 2001 to extend the loan’s maturity date to March 28, 2001. This modification reflected that our purchase of a parcel of land from a trust of which Mr. Acridge was the beneficiary had not closed. A portion of the proceeds of this sale was used to pay the interest that became due and payable under the loan on February 28, 2001. On March 21, 2001, the Board approved an additional two-year extension of the loan’s maturity date, making all principal and interest due and payable on March 28, 2003. This extension was conditioned upon, among other things, Mr. Acridge’s payment of all interest due and payable on March 28, 2001, which was paid. In return for the extension, Mr. Acridge provided additional security for the loan by pledging all of his equity interest in the entity he owns.

We are aware of prior liens on the real property and on certain of the collateral pledged to us that relate to loans entered into by the entity Mr. Acridge owns. We also understand that Mr. Acridge has personally guaranteed these loans. On July 18, 2001, our Board was advised that the entity Mr. Acridge owns was not able to make the monthly payment due and owing to its lenders in the month of July. The Board was asked to make such payment, in the amount of $240,833, on behalf of Mr. Acridge for the benefit of this entity. The Board authorized us to make the July payment in order to avoid a default under the loans. We have been advised that the entity Mr. Acridge owns did not make when due the monthly payment due and owning to the lenders in December 2001. We understand that a letter agreement was entered into with the lenders, in which the lenders agreed to forbear from exercising certain rights and remedies available to them in connection with the December payment, if certain terms and conditions were satisfied. We further understand that, in connection with the forbearance letter, Mr. Acridge pledged 29,622 shares of our common stock to the lenders as additional collateral. We do not know whether the terms and conditions set forth in the forbearance letter have been satisfied.

Mr. Acridge’s entity’s failure to make the December payment when due constitutes a default under the terms of our loan to Mr. Acridge. We have been advised that Mr. Acridge also is in default under a provision of the loan that addresses his failure to discharge when due all sums owed under any loan secured by a stock pledge.

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In view of recent events, including Mr. Acridge’s defaults under the terms of our loan to him and the failure of the entity controlled by Mr. Acridge to pay rent in connection with space subleased to it by us, we have evaluated the collectability of the loan. The entity’s sublease and certain associated litigation are discussed above. We have reviewed financial information requested from Mr. Acridge, including a personal financial statement and 2000 tax returns for Mr. Acridge and certain of his material affiliated entities. We have also obtained an appraisal of the real property and conducted a search of public records for third party claims evidenced by filed litigation and liens.

We believe that the Yorktown acquisition will constrain our ability to obtain waivers or other approvals in connection with restrictive covenants contained in our $100.0 million secured credit facility that may apply to certain courses of action potentially available to us in connection with the collateral for our loan to Mr. Acridge. Restrictive covenants in the indenture supporting our senior subordinated notes due 2007 and in the indenture supporting our senior subordinated notes due 2012 also could constrain our ability to take certain actions. It is possible that we will not be able to recover all or any of the amounts due and owing from Mr. Acridge as a result of such restrictive covenants. Accordingly, in view of our evaluation of the loan’s collectability, under generally accepted accounting principles, it is appropriate to record a financial reserve in the full amount of the loan, including interest accrued through December 31, 2001. Such a reserve totaling $5,409,000 has been recorded as of December 31, 2001.

The largest amount of indebtedness outstanding under the loan since January 1, 2001 was $5,938,008, which included $938,008 of accrued interest. For financial reporting purposes, the indebtedness is fixed at the reserve amount of $5,409,000, but will continue to accrue interest as provided in the note until paid in full.

•  Until August 16, 2001, when the lease was canceled, a partnership controlled by Mr. Acridge leased approximately 3,900 square feet of excess office space in our headquarters building. The partnership paid annual rent of $26.00 per square foot. During 2001, the partnership owed us $64,440 as rent under the terms of the lease. At present, the rent due remains unpaid.

•  We lease approximately 5,590 square feet of office space in an office building owned by a limited liability company in which Mr. Acridge owns a 51% interest. Pursuant to a sublease between another company controlled by Mr. Acridge and us, we sublease the space to that company. The current annual rent is $21.76 per square foot. The rent is subject to adjustment annually based on changes in the Consumer Price Index. The term of the lease is five years, terminating on July 1, 2003, with one option to renew for an additional five years. The term of the sublease is from April 1, 2000 through the earlier of the termination of the lease or July 31, 2003. In addition, if the term of the lease is extended, the sublessee has the option to extend the term of the sublease for the same period.

•  In addition to the above-described space, we lease approximately 8,176 square feet of additional space from the same limited liability company. Pursuant to a sublease between a separate limited liability company controlled by Mr. Acridge and us, we sublease the space to such entity for use as an inn. The initial term for each of the lease and the sublease is for five years, terminating on June 30, 2003, with one option to renew for an additional five years, and the annual rent under each currently is $21.76 per square foot. The rent is subject to adjustment annually based on changes in the Consumer Price Index. The sublease also provides that we may terminate the sublease at any time upon 120 days prior written notice. The owner of the 49% interest in the lessor has notified us that the sublessee is delinquent on the payment of the rent due, and on or about December 28, 2001, the owner filed a derivative lawsuit for and on behalf of the lessor against us to collect all amounts owing under the lease. The suit is for the recovery of rents past due and owing in excess of $156,990 from August 1, 2000 through the date of the complaint. The plaintiff claims that the amount owing at June 30, 2002 is approximately $347,500. Pursuant to a letter dated January 16, 2002, we made a formal demand on the sublessee for the sublessee to pay all of the past due amounts. In addition, we filed a motion to dismiss or, alternatively, to compel binding arbitration pursuant to the terms of the lease. The court has ruled that the arbitration clause applies, and has referred the dispute to the arbitrators. On May 23,

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	2002, we also made a separate demand for arbitration against the sublessee and a request to consolidate the two arbitrations. In July 2002, the plaintiff filed a motion for summary judgment in the arbitration.
•	In the first quarter of 2001, our Board approved the purchase of up to $165,000 of artwork from Mr. Acridge for display in our headquarters building. The purchase price for such artwork was the appraised fair market value of the pieces. Mr. Acridge used the proceeds of that transaction to pay balances due on certain amounts owed to us by Mr. Acridge and by entities controlled by him, including $90,596 of rent due at December 31, 2000 for the lease of excess office space in our headquarters building, $32,070 for landscaping services performed in 2000 and 2001, $27,323 for fuel purchases in 2000 and 2001, and $7,788 as reimbursement for certain expenses related to the sale of the Jomax Property discussed below. A substantial portion of the artwork had been displayed in our headquarters building for up to 10 years without charge to us.
•	On January 25, 2001, our Board accepted an offer from Mr. Acridge, on behalf of a trust of which he is the beneficiary, to sell a parcel of land to us, for the lesser of $5.0 million or the land’s appraised value. In March 2001, we purchased the land for $5.0 million. A portion of the proceeds from the sale was used to pay all interest due and payable as of March 28, 2001 under the terms of our outstanding loan to Mr. Acridge. As part of the transaction, we granted the trust an option, exercisable for a period of two years, to repurchase the property at the greater of the amount we paid to purchase the property and the property’s appraised value, and a right of first refusal, exercisable for a period of two years, to repurchase the property on the same terms as contained in a bona fide offer from a bona fide purchaser.

On September 20, 2001, we agreed to purchase the trust’s option and right of first refusal for $600,000. We subsequently acquired these rights for this amount. At the time of the sale, we were negotiating with a potential purchaser for the sale of the land for a price in excess of our purchase price. The potential purchaser was requiring us to represent in the purchase and sale agreement that there were no effective options to purchase, or rights of first refusal, affecting the land. The purchase of the option and right of first refusal rights would have enabled us to make this representation and would have avoided any other complications associated with the option and right of first refusal rights that potentially could have affected the sale. The potential purchaser subsequently advised us that it was discontinuing negotiations regarding the possible sale because general market and economic conditions, coupled with the financial uncertainties arising out of the terrorist attack on the World Trade Center and other terrorist activities that occurred on September 11, 2001, had severely depressed the real estate market.

•  During October 2001, we agreed to repurchase 400,000 shares of our common stock from Mr. Acridge for $8.80 per share or $3,520,000. The purchase price was the closing price of our common stock on the New York Stock Exchange on October 11, 2001, the date the conditions to purchase set by the Board were satisfied, including the receipt of necessary bank waivers and consents.

      Our Board reviewed and approved all of the foregoing transactions. The Board’s policy is to review all related party transactions at least once a year.

•  In addition to the above transactions, we have numerous marketing relationships with Rawhide, which is owned and operated by entities controlled by Mr. Acridge. Since January 2000, we have paid Rawhide $10,000 per year to be a sponsor at Rawhide. The current agreement expires December 31, 2002. Throughout 2001, we and Rawhide also were involved in a number of cross marketing promotions in which advertisements and coupons for our convenience stores were distributed at Rawhide and similar items for Rawhide were made available at our convenience stores. In addition, we have been involved in Halloween and Christmas promotions at Rawhide and were a sponsor for the Kruse Car Auction held at Rawhide. These promotions typically involve no material out of pocket expense to us. In connection with the Christmas promotions, Rawhide and we jointly sponsored the “Holiday Haulers,” which were two decorated trailers that participated in a number of holiday events. The total costs associated with the Holiday Haulers were $94,335, of which we paid $68,366. The

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$68,366 includes the costs of the trailers and lights, which we purchased before Rawhide agreed to co-sponsor the program. Our employees and Rawhide employees were involved in these projects, including one of our employees who spent more than half his time on projects involving Rawhide and other entities controlled by Mr. Acridge. We anticipate requesting reimbursement in an amount up to $96,000 for this employee’s time from the entities for whom the services were provided. We expect, however, to reimburse entities controlled by Mr. Acridge for the time their employees spent on matters for us.

•

Mr. Acridge was terminated as Giant’s Chairman, President and Chief Financial Officer on March 29, 2002, although he remains on the Board of Directors. Since that time, Mr. Acridge and Giant have been engaged in settlement discussions regarding open issues and claims between them. Giant has continued to pay Mr. Acridge the equivalent of his pre-termination base salary, and has made no decision regarding the duration of these payments. In addition, Giant has extended the exercise period of Mr. Acridge’s stock options until June 29, 2003. Mr. Acridge recently notified Giant in writing that he will be proceeding with a lawsuit. At this time, Giant does not know if or when a suit will be filed. In the event of litigation, Giant will defend the suit vigorously.

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DESCRIPTION OF OTHER DEBT

New Senior Secured Revolving Credit Facility

      In connection with the Yorktown acquisition, we entered into a $100.0 million new senior secured revolving credit facility provided by a syndicate of lenders led by Bank of America, N.A., an affiliate of Banc of America Securities LLC. The new senior secured revolving credit facility replaced our prior $65.0 million amended and restated credit agreement. Our obligations under the new senior secured revolving credit facility have been guaranteed by all of our subsidiaries and secured by a security interest in our personal property and the personal property of our subsidiaries, including accounts receivable, inventory, contracts, chattel paper, trademarks, copyrights, patents, license rights, deposit and investment accounts and general intangibles, but excluding equipment, fixtures, rolling stock and the stock of our subsidiaries.

      The availability of borrowings under the new senior secured revolving credit facility is limited to the lesser of the maximum commitment amount or the sum of the eligible accounts receivable (85% of regular accounts receivable and 90% of preferred accounts receivable) and eligible refinery hydrocarbon inventory (80% of refinery hydrocarbon inventory except for hydrocarbon inventory at service stations and the travel center, which is calculated at 50%) plus 50% of eligible lubricants inventory and reduced by an amount equal to 100% of the liens related to certain first purchase crude payables and amounts outstanding under letters of credit. The percentage of our borrowing base from eligible inventory is initially limited to 75% and will be reduced to 60% over time. The availability of borrowings is determined weekly and advances of a minimum of $2.0 million are required. The new senior secured revolving credit facility is due and payable in full three years from closing.

      The new senior secured revolving credit facility bears interest, at our option, at a spread over the euro dollar rate for one, two, three or six months as elected by us, or a spread over a base rate, which is defined as the higher of (a) the Federal Funds Rate plus  1/2 of 1% or (b) the reference rate announced by Bank of America, N.A. from time to time. The exact percentage will be determined by our total leverage ratio from time to time. The total leverage ratio is determined by dividing (a) consolidated funded indebtedness (the sum of borrowed money, off balance sheet leases, including synthetic leases, but excluding operating leases, obligations to redeem or purchase any of our capital stock or the capital stock of a subsidiary, and any guaranty of the foregoing obligations for us and our subsidiaries) by (b) EBITDA (as defined and adjusted in the new senior secured revolving credit facility) for us and our subsidiaries, determined on a pro forma basis taking into account the Yorktown acquisition. We also are required to pay a fee based upon the unused commitment of the facility at the rate of 0.5% per annum. The initial rate for borrowings under the new senior secured revolving credit facility is the euro dollar rate plus 2.75%. The following table shows the relationship of the total leverage ratio and the various pricing options:

	Libor			Base Rate
Total Leverage Ratio	Margin			Margin
Less than or equal to 2.50		2.25	%		1.25	%
Greater than 2.50 but less than or equal to 3.50		2.50	%		1.50	%
Greater than 3.50		2.75	%		1.75	%

      The new senior secured revolving credit facility contains negative covenants limiting, among other things, our ability, and the ability of our subsidiaries, to:

•  incur additional indebtedness;

•  create liens;

•  dispose of assets;

•  consolidate or merge;

•  make loans and investments;

•  enter into transactions with affiliates;

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•  use loan proceeds for certain purposes;

•  guarantee obligations and incur contingent obligations;

•  enter into agreements restricting the ability of subsidiaries to pay dividends to us;

•  make distributions or stock repurchases;

•  make significant changes in accounting practices or change our fiscal year; and

•  except on terms acceptable to the senior secured lenders, to prepay or modify subordinated indebtedness.

      The new senior secured revolving credit facility requires us to maintain certain financial ratios, each calculated on a pro forma basis for the Yorktown acquisition, including maintaining:

•  a minimum consolidated tangible net worth not less than the sum of (a) $99,110,000, which was 85% of consolidated tangible net worth at December 31, 2001, plus (b) 50% of positive consolidated net income on a cumulative basis for periods beginning January 1, 2002, plus (c) 75% of the proceeds of any equity offering after December 31, 2001;

•  a minimum fixed charge coverage ratio of not less than 1.1 to 1.0 for the prior four fiscal quarters (determined by a formula of the ratio of (a) consolidated EBITDA (as defined and adjusted in the new senior secured revolving credit facility), plus consolidated rents payable, plus earn-out payments to BP under the Yorktown refinery purchase agreement, less capital expenditures, less cash taxes, to (b) consolidated interest expense plus consolidated rents plus scheduled amortization of any indebtedness plus payments under the earn-out agreement);

•  a total leverage ratio of not greater than 4.25 to 1.0 for the prior four fiscal quarters with step-downs; and

•  a senior leverage ratio of consolidated senior indebtedness to consolidated EBITDA for the prior four fiscal quarters of not greater than 1.50 to 1.0.

      Our failure to satisfy any of these financial covenants would be an event of default under the new senior secured revolving credit facility. The new senior secured revolving credit facility also includes other customary events of default, including, among other things, a cross-default to our other material indebtedness and certain changes of control.

New Senior Secured Mortgage Loan Facility

      In connection with the Yorktown acquisition, we entered into a $40.0 million senior secured mortgage loan facility provided by Banc of America Leasing and Capital, LLC, an affiliate of Banc of America Securities, LLC. We and our subsidiaries have guaranteed the obligations under the facility.

      We have issued notes to the lenders, which bear interest, at our option, at a spread over the euro dollar rate for one month of 4.25% per annum or a base rate equal to the higher of the federal funds rate plus  1/2% or the Bank of America prime rate plus 2.0%. The notes will not fully amortize during the three-year term, and provide for a final balloon payment of $5,333,332 at maturity. The notes are secured by a mortgage on and security interest in the Yorktown refinery property, fixtures and equipment, excluding inventory and accounts receivable.

      The senior secured mortgage loan facility contains negative covenants limiting our ability and the ability of our subsidiaries to, among other things:

•  incur debt;

•  create liens;

•  dispose of assets;

•  consolidate or merge;

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•  make loans and investments;

•  enter into transactions with affiliates;

•  use loan proceeds for certain purposes;

•  guarantee obligations and incur contingent obligations;

•  pay dividends or make distributions or stock repurchases;

•  make significant changes in accounting practices; or

•  change our fiscal year.

      Our failure to satisfy any of these financial covenants would be an event of default under the new senior secured mortgage loan facility. The new senior secured mortgage loan facility also includes other customary events of default, including, among other things, a cross-default to our other material indebtedness and certain changes of control.

      The new senior secured mortgage loan facility requires us to maintain certain financial ratios, including maintaining ratios substantially the same as the new senior secured revolving credit facility.

9% Senior Subordinated Notes due 2007

      In August 1997, we issued $150.0 million of 9% senior subordinated notes. These notes are unconditionally guaranteed on a senior subordinated basis by all of our subsidiaries. The 9% senior subordinated notes mature on September 1, 2007, with interest payable semi-annually on March 1 and September 1 of each year.

      We may redeem the 9% senior subordinated notes at any time, in whole or in part, on or after September 1, 2002, at a redemption price equal to 104.5% of their principal amount, and declining ratably each year to 100% at September 1, 2005, in each case plus accrued but unpaid interest to the redemption date.

      The indenture governing the 9% senior subordinated notes contains covenants which, among other things, restrict our and our subsidiaries’ ability to:

•  pay dividends and make other distributions with respect to our and our subsidiaries’ capital stock; purchase, redeem or retire our and our subsidiaries’ capital stock; prepay pari passu or subordinated debt; and make investments;

•  incur additional debt;

•  enter into asset sales;

•  enter into transactions with affiliates;

•  incur liens to secure debt;

•  engage in certain business activities; and

•  engage in mergers or consolidations.

      These covenants are substantially similar to the covenants which govern the outstanding notes and which will govern the exchange notes.

      Our failure to satisfy any of the covenants would constitute an event of default under the indenture, notwithstanding our ability to meet our debt service obligations, and may accelerate our payment obligations. The indenture governing the 9% senior subordinated notes also includes other customary events of default, which are substantially similar to the events of default in the indenture governing the notes offered hereby.

      Upon the occurrence of a change in control, each holder of the 9% senior subordinated notes will have the right to require us to repurchase all or part of that holder’s notes at a price equal to 101% of their principal amount, plus accrued but unpaid interest to the repurchase date.

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DESCRIPTION OF THE EXCHANGE NOTES

      The exchange notes will be issued pursuant to an Indenture dated as of the Issue Date (the “Indenture”) among Giant industries, Inc., the Subsidiary Guarantors and The Bank of New York, as trustee (the “Trustee”). The following is a summary of material provisions of the Indenture. The following summaries of certain provisions of the exchange notes and the Indenture do not purport to be complete and are subject to, and are qualified in their entirety by reference to, the exchange notes and the Indenture, including the definitions therein of certain capitalized terms used but not defined herein. For the definitions of certain capitalized terms, see “Certain Definitions” below. For purposes of this Description of the Exchange Notes, the term the “Company” means Giant Industries, Inc., but not any of its subsidiaries, unless the context otherwise requires. Copies of the Indenture and the Registration Rights Agreement (as defined below) are available from the Company and have been filed as exhibits to the registration statement of which this prospectus is a part.

General

      Each exchange note will mature on May 15, 2012 and will bear interest at the rate per annum stated on the cover page hereof, payable semi-annually on May 15 and November 15 of each year, commencing November 15, 2002, to the person in whose name the exchange note is registered at the close of business on the May 1 or November 1 preceding such interest payment date. Interest will be computed on the basis of a 360-day year of twelve 30-day months. Principal and interest will be payable at the offices of the Trustee and the Paying Agent, provided that, at the option of the Company, payment of interest will be made by check mailed to the address of the person entitled thereto as it appears in the register of the exchange notes maintained by the Registrar.

      The Indenture provides for the issuance by the Company of notes with an unlimited principal amount, of which $200.0 million of outstanding notes were issued on May 14, 2002. The Company may issue additional notes (the “Additional Notes”) from time to time. Any offering of Additional Notes is subject to the covenant described below under the caption “— Certain Covenants — Limitation on Incurrence of Additional Indebtedness.” The outstanding notes, any exchange notes that may be issued pursuant to this exchange offer, and any Additional Notes subsequently issued under the Indenture would be treated as a single class for all purposes under the Indenture, including, without limitation, waivers, amendments, redemptions and offers to purchase.

      The exchange notes will be transferable and exchangeable at the office of the Registrar or any co-registrar and will be issued in fully registered form, without coupons, in denominations of $1,000 and any whole multiple thereof. The Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection with certain transfers and exchanges.

Book-Entry, Delivery and Form

      The exchange notes will be issued in the form of a global exchange note (the “Global Exchange Note”), except as described below. The Global Exchange Note will be deposited with, or on behalf of, the Depository Trust Company (the “Depositary”), in New York, New York, and registered in the name of the Depositary or its nominee. Except as set forth below, the Global Exchange Note may be transferred, in whole and not in part, only to the Depositary or another nominee of the Depositary. Investors may hold their beneficial interests in the Global Exchange Note directly through the Depositary if they have an account with the Depositary or indirectly through organizations that have accounts with the Depositary.

      Exchange notes that are (i) transferred to institutional “accredited investors” (as defined in Rule 501(a)(1), (2), (3) or (7) under the Securities Act) that are not qualified institutional buyers or (ii) issued as described below under “Certificated Exchange Notes” will be issued in definitive form. Upon the transfer of an exchange note in definitive form, such exchange note will, unless the Global Exchange Note has previously been exchanged for exchange notes in definitive form, be exchanged for an interest in the Global Exchange Note representing the principal amount of exchange notes being transferred.

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      The Depositary has advised the Company as follows: The Depositary is a limited-purpose trust company organized under the laws of the State of New York, a member of the Federal Reserve System, a “clearing corporation” within the meaning of the New York Uniform Commercial Code, and “a clearing agency” registered pursuant to the provisions of Section 17A of the Exchange Act. The Depositary was created to hold securities of institutions that have accounts with the Depositary (“participants”) and to facilitate the clearance and settlement of securities transactions among its participants in such securities through electronic book-entry changes in accounts of the participants, thereby eliminating the need for physical movement of securities certificates. The Depositary’s participants include securities brokers and dealers (which may include the initial purchasers of the Notes), banks, trust companies, clearing corporations and certain other organizations. Access to the Depositary’s book-entry system is also available to others such as banks, brokers, dealers and trust companies that clear through or maintain a custodial relationship with a participant, whether directly or indirectly.

      Upon the issuance of the Global Exchange Note, the Depositary will credit, on its book-entry registration and transfer system, the principal amount of the exchange notes represented by such Global Exchange Note to the accounts of participants. The accounts to be credited shall be designated by the initial purchasers of such exchange notes. Ownership of beneficial interests in the Global Exchange Note will be limited to participants or persons that may hold interests through participants. Ownership of beneficial interests in the Global Exchange Note will be shown on, and the transfer of those ownership interests will be effected only through, records maintained by the Depositary (with respect to participants’ interests) and such participants (with respect to the owners of beneficial interests in the Global Exchange Note other than participants). The laws of some jurisdictions may require that certain purchasers of securities take physical delivery of such securities in definitive form. Such limits and laws may impair the ability to transfer or pledge beneficial interests in the Global Exchange Note.

      So long as the Depositary, or its nominee, is the registered holder and owner of the Global Exchange Note, the Depositary or such nominee, as the case may be, will be considered the sole legal owner and holder of the related exchange notes for all purposes of such exchange notes and the Indenture. Except as set forth below, owners of beneficial interests in the Global Exchange Note will not be entitled to have the exchange notes represented by the Global Exchange Note registered in their names, will not receive or be entitled to receive physical delivery of certificated exchange notes in definitive form and will not be considered to be the owners or holders of any exchange notes under the Global Exchange Note. The Company understands that under existing industry practice, in the event an owner of a beneficial interest in the Global Exchange Note desires to take any action that the Depositary, as the holder of the Global Exchange Note, is entitled to take, the Depositary would authorize the participants to take such action, and that the participants would authorize beneficial owners owning through such participants to take such action or would otherwise act upon the instructions of beneficial owners owning through them.

      Payment of principal of and interest on exchange notes represented by the Global Exchange Note registered in the name of and held by the Depositary or its nominee will be made to the Depositary or its nominee, as the case may be, as the registered owner and holder of the Global Exchange Note.

      The Company expects that the Depositary or its nominee, upon receipt of any payment of principal of or interest on the Global Exchange Note, will credit participants’ accounts with payments in amounts proportionate to their respective beneficial interests in the principal amount of the Global Exchange Note as shown on the records of the Depositary or its nominee. The Company also expects that payments by participants to owners of beneficial interests in the Global Exchange Note held through such participants will be governed by standing instructions and customary practices and will be the responsibility of such participants. The Company will not have any responsibility or liability for any aspect of the records relating to, or payments made on account of, beneficial ownership interests in the Global Exchange Note for any exchange note or for maintaining, supervising or reviewing any records relating to such beneficial ownership interests or for any other aspect of the relationship between the Depositary and its participants or the relationship between such participants and the owners of beneficial interests in the Global Exchange Note owning through such participants.

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      Unless and until it is exchanged in whole or in part for certificated exchange notes in definitive form, the Global Exchange Note may not be transferred except as a whole by the Depositary to a nominee of such Depositary or by a nominee of such Depositary to such Depositary or another nominee of such Depositary.

      Although the Depositary has agreed to the foregoing procedures in order to facilitate transfers of interests in the Global Exchange Note among participants of the Depositary, it is under no obligation to perform or continue to perform such procedures, and such procedures may be discontinued at any time. Neither the Trustee nor the Company will have any responsibility for the performance by the Depositary or its participants or indirect participants of their respective obligations under the rules and procedures governing their operations.

Certificated Exchange Notes

      The exchange notes represented by the Global Exchange Note are exchangeable for certificated exchange notes in definitive form of like tenor as such exchange notes in denominations of U.S.$1,000 and integral multiples thereof if (i) the Depositary notifies the Company that it is unwilling or unable to continue as Depositary for the Global Exchange Note or if at any time the Depositary ceases to be a clearing agency registered under the Exchange Act, (ii) the Company in its discretion at any time determines not to have all of the exchange notes represented by the Global Exchange Note or (iii) a default entitling the holders of the exchange notes to accelerate the maturity thereof has occurred and is continuing. Any exchange note that is exchangeable pursuant to the preceding sentence is exchangeable for certificated exchange notes issuable in authorized denominations and registered in such names as the Depositary shall direct. Subject to the foregoing, the Global Exchange Note is not exchangeable, except for a Global Exchange Note of the same aggregate denomination to be registered in the name of the Depositary or its nominee. In addition, such certificates will bear the legend referred to under “Notice to Investors” (unless the Company determines otherwise in accordance with applicable law) subject, with respect to such Exchange Notes, to the provisions of such legend.

Subordination of Exchange Notes; Subsidiary Guarantees

      The Indebtedness evidenced by the exchange notes will be subordinated to the prior payment when due of the principal of, premium, if any, and accrued and unpaid interest on, and all other amounts payable with respect to, all existing and future Senior Indebtedness of the Company and pari passu with or senior in right of payment to principal of, premium, if any, and accrued and unpaid interest on, all existing and future subordinated Indebtedness of the Company.

      The Indenture provides that, upon any distribution of assets of the Company in any dissolution, winding up, liquidation or reorganization of the Company, all holders of Senior Indebtedness must be paid in full before any payment or distribution is made with respect to the exchange notes (except that, subject to applicable law, holders of exchange notes may receive securities that are subordinated, at least to the same extent as the exchange notes, to Senior Indebtedness and to any securities issued in exchange for any such Senior Indebtedness). Because of these subordination provisions, unless sufficient sums are available to pay the holders of the exchange notes and the holders of Senior Indebtedness are paid in full, holders of Senior Indebtedness, as well as certain creditors of the Company who are not holders of Senior Indebtedness, may recover more, ratably, than the holders of the exchange notes.

      The Indenture provides that, upon the maturity of any Senior Indebtedness by lapse of time, acceleration or otherwise, unless and until all principal thereof, premium, if any, and 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 exchange notes (except in such subordinated securities, as described above). 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”), unless and until such default shall have been cured or waived or have ceased to exist, no payment shall be made by or on behalf of the Company or any Subsidiary Guarantor with respect to the principal of, premium, if any, interest on or other amounts owing on the exchange notes. Upon the happening of any default or event of

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default (other than a Payment Default) (including an 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 exchange 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 Designated Senior Indebtedness or their Representative (“Payment Notice”), no payment shall be made by or on behalf of the Company or any Subsidiary Guarantor with respect to the principal of, premium, if any, interest on or other amounts owing on the exchange 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 on the exchange notes 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 that 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 Indenture provides that the Company or a Subsidiary Guarantor, as the case may be, shall resume payments of principal of, premium, if any, and interest on the exchange 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.

      Each of the Company’s Subsidiaries existing on the Issue Date unconditionally guaranteed (each, a “Guarantee,” and collectively, the “Guarantees”) on a joint and several basis the Company’s obligations to pay the principal of, premium, if any, and interest on the exchange notes. The Indenture also provides that each Person that becomes a Domestic Subsidiary after the Issue Date shall guarantee the payment of the exchange notes. Under the terms of the Indenture, a Subsidiary Guarantor may be released from its Guarantee in the event of the consolidation or merger of such Subsidiary Guarantor, in the event such Subsidiary Guarantor is sold or disposed of by the Company to another Person in accordance with the Indenture, or in the event of the liquidation and dissolution of such Subsidiary Guarantor into the Company or any other Subsidiary Guarantor, as described below.

      Each Subsidiary Guarantor’s Guarantee will be subordinate to Senior Indebtedness of such Subsidiary Guarantor including such Subsidiary Guarantor’s guarantees of Senior Indebtedness of the Company, on the same basis as the Company’s obligations under the Indenture and the exchange notes will be subordinate to Senior Indebtedness of the Company. The Guarantees will, however, rank at least on a parity with claims of all unsecured creditors, other than holders of Senior Indebtedness, of the respective Subsidiary Guarantors; however, because of the subordination provisions, unless sufficient sums are available to pay the full amounts required under the Guarantees and to pay the unsecured creditors of the respective Subsidiary Guarantors, such other unsecured creditors of the Subsidiary Guarantors may recover more, ratably, than the holders of the exchange notes would recover with respect to the Guarantees. Each Subsidiary Guarantor will be prohibited from making payments under its Guarantee if defaults and certain other events with respect to Senior Indebtedness of a Subsidiary Guarantor have occurred that prohibit the Subsidiary Guarantor from making payment on the exchange notes pursuant to the Guarantees.

      The obligations of each Subsidiary Guarantor are 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 its contribution obligations

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under the Indenture, result in the obligations of such Subsidiary Guarantor under its Guarantee not constituting a fraudulent conveyance or fraudulent transfer under federal, state or foreign law. Each Subsidiary Guarantor that makes a payment or distribution under a Guarantee shall be entitled to a contribution from each other Subsidiary Guarantor.

      Each Subsidiary Guarantor may consolidate with or merge into or sell all or substantially all of its assets to the Company or another Subsidiary Guarantor without limitation. 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 any Subsidiary Guarantor), unless (i) with respect to a consolidation or merger of such Subsidiary Guarantor, either (A)(1) the surviving entity is a Subsidiary of the Company or, as a result of the transaction, becomes a 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 Consolidated Tangible Net Worth of the surviving entity is equal to or greater than the Consolidated Tangible Net Worth of such Subsidiary Guarantor immediately before such transaction, (4) 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 the first paragraph of the covenant captioned “Limitation on Incurrence of Additional Indebtedness,” (5) 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 the Indenture, in accordance with the provisions of the Indenture, and (6) such transaction does not (x) violate any covenant under the Indenture or (y) result in a Default or Event of Default immediately thereafter that is continuing or (B)(1) such transaction is made in accordance with the covenant captioned “Limitation on Sale of Assets” and (2) such transaction does not (x) violate any other covenant under 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 the covenant captioned “Limitation on Sale of Assets” and (B) such transaction does not (x) violate any other covenants under the Indenture or (y) result in a Default or Event of Default immediately thereafter that is continuing. A Subsidiary Guarantor may be released from its Guarantee and its related obligations under the Indenture only if (i) the Capital Stock of a Subsidiary Guarantor is sold to another Person, or if such Subsidiary Guarantor consolidates with, or merges into, another Person, or if such Subsidiary Guarantor is dissolved and liquidated into the Company or any other Subsidiary Guarantor, in accordance with the requirements of clauses (i)(B) or (ii) of the preceding sentence or (ii) such Subsidiary Guarantor has been designated by the Board of Directors of the Company as an Unrestricted Subsidiary and such designation is made in compliance with the terms of the Indenture. Except as provided in the preceding sentences a Subsidiary Guarantor may not otherwise be released from its Guarantee.

      As of March 31, 2002, after giving pro forma effect to the Yorktown acquisition and related financing transactions, the Company and the Subsidiary Guarantors would have had $435.5 million of indebtedness outstanding on a consolidated basis, $91.4 million would have been Senior Indebtedness and $150 million would have ranked pari passu with the exchange notes. See “Use of Proceeds,” “Unaudited Pro Forma Financial Data” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

Optional Redemption

      At any time on or after May 15, 2007, the Company may, at its option, redeem all or any portion of the exchange notes at the redemption prices (expressed as percentages of the principal amount of the exchange

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notes) set forth below, plus, in each case, accrued interest thereon to the applicable redemption date, if redeemed during the 12-month period beginning May 15 of the years indicated below:

Year	Percentage
2007		105.500	%
2008		103.667	%
2009		101.833	%
2010 and thereafter		100.000	%

      In addition, at any time prior to May 15, 2007, the Company may redeem all or part of the exchange 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 on or prior to May 15, 2005, the Company may, at its option, redeem up to 35% of the aggregate principal amount of the exchange notes originally issued with the net cash proceeds of one or more Public Equity Offerings (as defined) at a redemption price equal to 111% 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 exchange 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 Public Equity Offering.

      If less than all of the exchange notes are to be redeemed, the Trustee shall select pro rata or by lot the exchange notes to be redeemed in multiples of $1,000. Exchange notes in denominations larger than $1,000 may be redeemed in part.

Mandatory Redemption

      The exchange notes will not be entitled to the benefit of sinking fund or other mandatory redemption provisions.

Change of Control

      The Indenture provides that, within 30 days following the occurrence of any Change of Control, the Company will offer (a “Change of Control Offer”) to purchase all outstanding exchange notes at a purchase price equal to 101% of the aggregate principal amount of the exchange notes, plus accrued and unpaid interest to the date of purchase. The Change of Control Offer shall be deemed to have commenced upon mailing of the notice described in the Indenture and shall terminate 20 business days after its commencement, unless a longer offering period is then required by law. Promptly after the termination of the Change of Control Offer (the “Change of Control Payment Date”), the Company shall purchase and mail or deliver payment for all exchange notes tendered in response to the Change of Control Offer.

      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 exchange notes at the option of the holders upon a Change of Control.

      “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; (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

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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.

      It is expected that any agreements with respect to Senior Indebtedness the Company may enter into would prohibit the repurchase of Indebtedness subordinated to Indebtedness thereunder, which would include the exchange notes. Failure of the Company to repurchase the exchange notes validly tendered to the Company pursuant to a Change of Control Offer would create an Event of Default with respect to the exchange notes. In addition, the subordination provisions of the Indenture prohibit, subject to certain conditions, the repurchase or repayment of the exchange notes if there is a default under Senior Indebtedness. As a result, the Company may be prohibited from making payment upon a Change of Control. The definition of Change of Control includes any event by which the Company conveys, transfers or leases all or substantially all of its assets to any Person; the phrase “all or substantially all” is subject to applicable legal precedent and as a result in the future there may be uncertainty as to whether a Change of Control has occurred.

Certain Covenants

      Limitation on Incurrence of Additional Indebtedness. The Indenture provides that the Company will not, and will not permit any of its 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 shall have occurred and be continuing at the time or as a consequence of the incurrence of such Indebtedness, the Company or its 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.

      Notwithstanding the foregoing, (i) the Company may incur Indebtedness consisting of the outstanding notes and exchange notes; (ii) the Subsidiary Guarantors may incur the Guarantees; (iii) the Company and the Subsidiary Guarantors may incur Indebtedness in existence on the date of the 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; and (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 (a) any subsequent issuance or transfer that results in any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary or (b) 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).

      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 “Limitation on Incurrence of Additional Indebtedness” covenant, in the event that any proposed Indebtedness meets the criteria of more than one of the categories of debt described above or is entitled to be incurred pursuant to the first paragraph of this

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covenant, 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.

      Limitation on Restricted Payments. The Indenture provides that the Company will not, and will not permit any of its 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 the first paragraph of the covenant captioned “Limitation on Incurrence of Additional Indebtedness”; and

      (iii) immediately after giving effect to such Restricted Payment, the aggregate amount 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) 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, except in the case of a Restricted Payment or series of related Restricted Payments to a present or Former Affiliate of the Company having a fair market value in excess of $2 million, in which case, as determined by an independent accounting, appraisal or investment banking firm of national reputation), 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, except in the case of a Restricted Payment or series of related Restricted Payments to a present or Former Affiliate of the Company having a fair market value in excess of $2 million, in which case, as determined by an independent accounting, appraisal or investment banking firm of national reputation), 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 Company’s Board of Directors, whose determination shall be conclusive and evidenced by a Board Resolution; or (2) in case any Restricted Subsidiary has been redesignated an Unrestricted Subsidiary, minus the greater of (x) the book value (determined in accordance with GAAP) at the date of redesignation 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 redesignation, as determined in good faith by the Company’s Board of Directors, whose determination shall be conclusive and evidenced by a resolution of such Board; (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 outstanding notes, the exchange notes or the Subsidiary Guarantees), the amount of any such Indebtedness that has been

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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 after the Issue Date pursuant to this clause (iii); and (F) $30 million.

      As of December 31, 2001, we would have had approximately $14.6 million available for Restricted Payments.

      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 of the Indenture; (ii) the purchase, redemption, acquisition or retirement of any shares of Capital Stock of the Company in exchange for, or out of the net proceeds of the substantially concurrent sale (other than to a Restricted Subsidiary of the Company) of, other shares of Capital Stock (other than Disqualified Stock) of the Company; or (iii) the defeasance, redemption or retirement of Indebtedness of the Company which is pari passu or subordinate in right of payment to the exchange notes, 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; 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.

      Limitation on Sale of Assets. The Indenture provides that 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 $10 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, except in the case of a transaction or series of related transactions with a present or Former Affiliate of the Company having a fair market value in excess of $2 million, in which case, as determined by an independent accounting, appraisal or investment banking firm of national reputation);

      (ii) at least 85% 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 any sale of such other consideration shall be for cash and shall be considered an Asset Sale under the Indenture and no such consideration shall be received in a transaction with a present or Former Affiliate of the Company, or (E) 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 outstanding notes and exchange 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 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

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      (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 the two paragraphs following the succeeding paragraph.

      Notwithstanding the foregoing, the Company and its Restricted Subsidiaries may dispose of property and assets of the Company or its Restricted Subsidiaries in exchange for capital property and capital assets (i) which are directly related to a Principal Business, (ii) which are of the same type of property or assets, or which have the same function, as the properties or assets being disposed of and (iii) which have an aggregate fair market value equal to or greater than the aggregate fair market value of the property and assets being disposed of; provided, however, that (A) in no event may the Company and its Restricted Subsidiaries, in any 12-month period, dispose of property or assets pursuant to this paragraph having an aggregate fair market value of $10 million or more and (B) with respect to any property or assets being disposed of having a fair market value of $1 million or more, the Board of Directors of the Company shall have determined, in good faith and evidenced by a Board Resolution, that the aggregate fair market value of the property and assets being received by the Company and its Restricted Subsidiaries is equal to or greater than the aggregate fair market value of the property and assets being disposed of.

      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 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.

      If, upon completion of the 360-day period (the “Trigger Date”), any portion of the Net Available Proceeds of any Asset Sale shall not have been applied by the Company as described in clauses (i) or (ii) of the preceding paragraph and such remaining Net Available Proceeds, together with any remaining net cash proceeds from any prior Asset Sale (such aggregate constituting “Excess Proceeds”), exceeds $10 million, then the Company will be obligated to make an offer (a “Net Proceeds Offer”) to purchase from all holders of the outstanding notes and exchange notes and holders of any then outstanding Pari Passu Indebtedness required to be repurchased or repaid on a permanent basis in connection with an Asset Sale, an aggregate principal amount of outstanding notes and exchange notes and any then outstanding Pari Passu Indebtedness equal to such Excess Proceeds as follows:

      (1) not later than the 30th day following the Trigger Date, (i) the Company shall make a Net Proceeds Offer to purchase from all holders of the outstanding notes and exchange notes in accordance with the procedures set forth in the Indenture the maximum principal amount (expressed as a multiple of $1,000) of outstanding notes and exchange notes that may be purchased out of an amount (the “Net Proceeds Offer Amount”) equal to the product of such Excess Proceeds multiplied by a fraction, the numerator of which is the outstanding principal amount of the outstanding notes and exchange notes and the denominator of which is the sum of the outstanding principal amount of the outstanding notes and exchange notes and such Pari Passu Indebtedness, if any (subject to proration in the event such amount is less than the aggregate Offered Price (as hereinafter defined) of all outstanding notes and exchange notes tendered), and (ii) to the extent required by such Pari Passu Indebtedness and provided there is a permanent reduction in the principal amount of such Pari Passu Indebtedness, the Company shall make an offer to purchase such Pari Passu Indebtedness (the “Pari Passu Offer”) in an amount (the “Pari Passu Indebtedness Amount”) equal to the excess of the Excess Proceeds over the Net Proceeds Offer Amount.

      (2) the offer price for the outstanding notes and exchange notes shall be payable in cash in an amount equal to 100% of the principal amount of the outstanding notes and exchange notes tendered pursuant to a Net Proceeds Offer, plus accrued and unpaid interest, if any, to the date such Net Proceeds Offer is consummated (the “Offered Price”), in accordance with the procedures set forth in the Indenture. To the extent that the aggregate Offered Price of the outstanding notes and exchange notes tendered pursuant to a Net Proceeds Offer is less than the Net Proceeds Offer Amount relating thereto or

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the aggregate amount of the Pari Passu Indebtedness that is purchased or repaid pursuant to the Pari Passu Offer is less than the Pari Passu Indebtedness Amount (such shortfall constituting a “Net Proceeds Deficiency”), the Company may use such Net Proceeds Deficiency, or a portion thereof, for general corporate purposes, subject to the “Limitation on Restricted Payments” covenant.

      (3) if the aggregate Offered Price of outstanding notes and exchange notes validly tendered and not withdrawn by holders thereof exceeds the Net Proceeds Offer Amount, outstanding notes and exchange notes to be purchased will be selected on a pro rata basis. Upon completion of a Net Proceeds Offer and a Pari Passu Offer, the amount of Excess Proceeds shall be reset to zero.

      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 exchange notes at the option of the holders pursuant to a Net Proceeds Offer.

      It is expected that agreements with respect to Senior Indebtedness the Company may enter into would prohibit the repurchase of Indebtedness subordinated to Indebtedness thereunder, which would include the exchange notes. Failure of the Company to repurchase the exchange notes validly tendered to the Company pursuant to a Net Proceeds Offer would create an Event of Default with respect to the exchange notes. In addition, the subordination provisions of the Indenture prohibit, subject to certain conditions, the repurchase or repayment of the exchange notes if there is a default under Senior Indebtedness. As a result, the Company may be prohibited from making payment pursuant to a Net Proceeds Offer in connection with an Asset Sale.

      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.

      Limitation on Liens Securing Indebtedness. The Indenture provides that the Company will not, and will not permit any of its Restricted Subsidiaries to, create, incur, assume or suffer to exist any Liens (other than Permitted Liens) upon any of their respective properties securing (i) any Indebtedness of the Company (other than Senior Indebtedness of the Company), unless the outstanding notes and exchange notes are equally and ratably secured or (ii) 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; provided, however, that if such Indebtedness is expressly subordinated to the outstanding notes and exchange notes or the Guarantees, the Lien securing such Indebtedness will be subordinated and junior to any Lien securing the outstanding notes and exchange notes or the Guarantees, with the same relative priority as such subordinated Indebtedness of the Company or subordinated Indebtedness of a Subsidiary Guarantor will have with respect to the outstanding notes or the guarantees, as the case may be.

      Limitation on Payment Restrictions Affecting Restricted Subsidiaries. The Indenture provides that the Company will not, and will 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 on 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 restriction was entered into in connection with, or in contemplation of, such entity becoming a 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

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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 outstanding notes and exchange notes than those under the agreement so refinanced or replaced; and (H) any encumbrance or restriction due to applicable law.

      Limitation on Transactions with Affiliates. The Indenture provides that neither the Company nor any of its Restricted Subsidiaries, directly or indirectly, shall (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) a present or Former 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 5% 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) an Officers’ Certificate shall not be required for Affiliate Transactions that, in the aggregate, do not exceed $100,000 in any 12-month period, (w) transactions between or among the Company and any of its Restricted Subsidiaries shall not be deemed to constitute Affiliate Transactions, (x) 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, and (y) 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 present or former Affiliates 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.

      Limitation on Future Senior Subordinated Indebtedness. The Indenture provides that the Company will not incur any Indebtedness other than the outstanding notes and exchange notes 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 outstanding notes and exchange notes. No Subsidiary Guarantor shall incur any Indebtedness other than the Guarantee of such Subsidiary Guarantor 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.

Line of Business

      For so long as any outstanding notes or exchange 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.

Limitations on Mergers and Consolidations

      The Indenture provides that the Company will not consolidate with or merge with any Person or convey, transfer or lease all or substantially all of its property to any Person, unless: (i) 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 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 outstanding notes and exchange notes and the

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performance of every other covenant and obligation of the Company under the Indenture; (ii) immediately before and after giving effect to such transaction no Default or Event of Default exists; (iii) immediately after giving effect to such transaction on a pro forma basis, the Consolidated Tangible Net Worth of the Company (or the surviving or transferee entity) is equal to or greater than the Consolidated Tangible Net Worth of the Company immediately before such transaction; and (iv) 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 the first paragraph of the covenant captioned “Limitation on Incurrence of Additional Indebtedness.” 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 the 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 the Indenture and the exchange notes.

Certain Definitions

      The following is a summary of certain defined terms to be used in the Indenture. Reference is made to the Indenture for the full definition of all such terms and for the definitions of capitalized terms used herein and not defined below.

      “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.

      “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 the covenant captioned “Limitations on Mergers and Consolidations” and (iv) the merger or consolidation of a Restricted Subsidiary made in compliance with clause (i)(A) of the second sentence of the eighth paragraph under the caption “Subordination of Exchange Notes; Subsidiary Guarantees”).

      “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.

      “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.

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      “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.

      “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.

      “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.

      “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.

      “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 of the incurrence of Indebtedness giving rise to the need to calculate the Consolidated Coverage Ratio (the “Debt Incurrence 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 Debt Incurrence 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 Debt Incurrence 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 Debt Incurrence Date were the average rate in effect during the entire Reference Period, and (E) in determining the amount of Indebtedness pursuant to the covenant captioned “Limitation of Incurrence of Additional Indebtedness,” the incurrence of Indebtedness giving rise to the need to calculate the Consolidated Coverage Ratio and, to the extent the net proceeds from 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-recurring, 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

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(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), 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 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,

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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.

      “Credit Agreements” means the Company’s three year, senior secured revolving credit facility in the amount of $100 million and the Company’s three year, senior secured mortgage loan facility in the amount of $40 million, and in each case as amended, extended or refinanced from time to time.

      “Designated Senior Indebtedness” means (i) any Senior Indebtedness of the Company and/or any Subsidiary Guarantor permitted under the Indenture, the original principal amount of which is $10 million or more and (ii) the Indebtedness and/or other obligations under the Credit Agreements or a Bank Credit Facility.

      “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.

      “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.

      “Exchange Act” means the Securities and Exchange Act of 1934, as amended, and the rules of and regulations of the SEC thereunder.

      “Exchange Offer” means an offer by the Company, pursuant to the registration rights agreement, to certain holders of the Notes, to issue and deliver to such holders, in exchange for the outstanding notes, a like aggregate principal amount of exchange notes registered under the Securities Act.

      “exchange notes” means the notes to be issued pursuant to the Indenture in connection with this exchange offer pursuant to the registration rights agreement.

      “Former Affiliate” means any Person who was an Affiliate of the Company at any time during the three year period prior to the date for which determination of Affiliate status is required.

      “GAAP” means generally accepted accounting principles as in effect in the United States of America from time to time.

      “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

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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 other than advances to present or Former Affiliates of the Company in an aggregate amount outstanding at any one time not to exceed $1 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 outstanding notes were originally issued under the Indenture, or May 14, 2002.

      “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).

      “Make-Whole Premium” means, with respect to an outstanding note or exchange note on any date of redemption, the greater of (x) 1% of the principal amount of such outstanding note or exchange note or (y) the excess of (A) the present value at such date of redemption of (1) the redemption price of such outstanding note or exchange note at May 15, 2007 (such redemption price being described under “— Optional Redemption”) plus (2) all remaining required interest payments (exclusive of interest accrued and unpaid to the date of redemption) due on such outstanding note or exchange note through May 15, 2007, computed using a discount rate equal to the Treasury Rate plus 50 basis points, over (B) the then outstanding principal amount of such outstanding note or exchange note.

      “Maturity Date” means May 15, 2012.

      “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 clause (B) or (C) of Section (iii) of the covenant captioned “Limitation on Restricted Payments,” 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 any other Indebtedness of the Company that specifically provides that such Indebtedness is to rank pari passu with the outstanding notes and exchange

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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 commodity risk in connection with the conduct of the business of the Company and its Restricted Subsidiaries and not for speculative purposes; and (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 $5 million in the aggregate.

      “Permitted Company Refinancing Indebtedness” means (i) Indebtedness of the Company, 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 outstanding notes and exchange notes, (B) accelerate the maturity of such Indebtedness or (C) shorten the Average Life of such Indebtedness and (ii) Indebtedness of the Company, the net proceeds of which are used to renew, extend, refinance, defease, refund or repurchase outstanding Indebtedness of the Company, provided that (A) if the Indebtedness (including the outstanding notes and exchange notes) being renewed, extended, refinanced, defeased, refunded or repurchased is pari passu with or subordinated in right of payment to the outstanding notes and exchange notes, then such Indebtedness is pari passu with or subordinated in right of payment to, as the case may be, the outstanding notes and exchange notes 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, and (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; provided, further, that such Indebtedness (to the extent that such Indebtedness constitutes Permitted Company 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 of 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).

      “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 $300.0 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 $100.0 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 Standard & Poor’s Corporation and maturing or having a call provision not exceeding 24 months from the date of acquisition.

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      “Permitted Investments” means Permitted Business Investments and Permitted Financial Investments.

      “Permitted Liens” means (i) Liens existing on the Issue Date; (ii) Liens now or hereafter securing Senior Indebtedness; (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; (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 processing of oil, gas or other hydrocarbons, unitization and pooling declarations and agreements, development agreements, operating agreements, area of mutual interest agreements, and other

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agreements which are customary in the Principal Business; and (xx) other Liens provided that such other Liens shall not secure obligations in excess of $5.0 million in the aggregate at any one time outstanding.

      “Permitted Subsidiary Refinancing Indebtedness” means (i) Indebtedness of any 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 Guarantees, (B) accelerate the maturity of such Indebtedness or (C) shorten the Average Life of such Indebtedness and (ii) Indebtedness of any Subsidiary, the net proceeds of which are used to renew, extend, refinance, defease, refund or repurchase outstanding Indebtedness of 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 Guarantees, then such Indebtedness is pari passu with or subordinated in right of payment to, as the case may be, the 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, and (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; provided further, that such Indebtedness (to the extent that such Indebtedness constitutes Permitted Subsidiary 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).

      “Person” means any individual, corporation, partnership, joint venture, trust, estate, unincorporated organization or government or any agency or political subdivision thereof.

      “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, 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.

      “Public Equity Offering” means an underwritten primary public offering of common stock of the Company pursuant to an effective registration statement under the Securities Act.

      “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 outstanding notes and exchange 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 that is a Wholly-Owned Subsidiary); (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 that is a Wholly Owned Subsidiary of any Capital Stock, or any option, warrant or other right to acquire shares of

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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 pari passu or subordinated in right of payment to the outstanding notes and exchange notes or any Guarantee, 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 outstanding notes and exchange notes or any Guarantee or is scheduled to mature earlier than, or has an Average Life less than the remaining Average Life of, the Indebtedness being refinanced; 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 the first paragraph of the covenant captioned “Limitation on Incurrence of Additional Indebtedness” and (ii) no Default or Event of Default shall have occurred and be continuing.

      “Senior Indebtedness” means any Indebtedness (other than the Company’s 9% Senior Subordinated Notes due 2007 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 outstanding notes and exchange notes; 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.

      A “subsidiary” of any Person means (i) 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, (ii) 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 (iii) 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 Issue Date, (ii) each of the Subsidiaries that becomes a guarantor of the outstanding notes and exchange notes in compliance with the provisions of Article Eleven 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.

      “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 exchange notes to May 15, 2007, provided, however, that if the then remaining term to May 15, 2007 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

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States Treasury securities for which such yields are given, except that if the then remaining term of the exchange notes to May 15, 2007 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 the first paragraph under the covenant captioned “Limitation on Incurrence of Additional Indebtedness,” (ii) the Company could make an additional Restricted Payment of $1.00 pursuant to the first paragraph of the covenant captioned “Limitation on Restricted Payments,” (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 (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.

      “U.S. Government Obligations” means securities that are (i) direct obligations of the United States of America for the payment of which its full faith and credit is pledged or (ii) 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 by the United States of America, which, in either case under clauses (i) or (ii) are not callable or redeemable at the option of the issuer thereof.

      “U.S. Legal Tender” means such coin or currency of the United States as at the time of payment shall be legal tender for the payment of public and private debts.

      “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.

      “Wholly-Owned Subsidiary” means a Subsidiary all the Capital Stock (other than directors’ qualifying shares, if applicable) of which is owned by the Company or another Wholly-Owned Subsidiary.

Events of Default

      An Event of Default is defined in the Indenture as being: (i) default by the Company or any Subsidiary Guarantor in the payment of principal of or premium, if any, on the outstanding notes or exchange notes when due and payable at maturity, upon repurchase pursuant to a Change of Control Offer or a Net Proceeds Offer, upon acceleration or otherwise (whether or not prohibited by the subordination provisions of the Indenture); (ii) default by the Company or any Subsidiary Guarantor for 30 days in payment of any interest on the outstanding notes or exchange notes (whether or not prohibited by the subordination provisions of the Indenture); (iii) default by the Company or any Subsidiary Guarantor in the deposit of any optional redemption payment; (iv) default by the Company or any Subsidiary Guarantor in performance or breach of any other covenant or agreement in the outstanding notes or exchange notes, the Guarantees or the Indenture which shall not have been remedied within 60 days after written notice by the Trustee or by the holders of at

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least 25% in principal amount of the outstanding notes and exchange notes then outstanding; (v) 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 $5.0 million or more individually or in the aggregate; (vi) judgments or orders for the payment of money in an aggregate amount in excess of $5.0 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; (vii) other than a release of a Guarantee pursuant to the terms of the Indenture, any ineffectiveness of a Guarantee or any denial or disaffirmation of a Guarantee by any Subsidiary Guarantor; or (viii) certain events involving bankruptcy, insolvency or reorganization of the Company, any Subsidiary Guarantor or any Restricted Subsidiary. The Indenture provides that the Trustee may withhold notice to the holders of the outstanding notes and exchange notes of any default (except in payment of principal of, or premium, if any, or interest on the outstanding notes and exchange notes) if the Trustee considers it in the interest of the holders of the exchange notes to do so.

      The Indenture provides that if an Event of Default (other than with respect to clause (viii) of the preceding paragraph) occurs and is continuing with respect to the Indenture, the Trustee or the holders of not less than 25% in principal amount of the outstanding notes and exchange notes then outstanding may declare the principal of, premium, if any, and accrued but unpaid interest on all outstanding notes and exchange notes then outstanding to be due and payable. Upon such a declaration, such principal, premium, if any, and interest will be due and payable immediately. If an Event of Default relating to certain events of bankruptcy, insolvency or reorganization of the Company or any Subsidiary Guarantor occurs and is continuing, the principal of and premium, if any, and interest on all the outstanding notes and exchange notes will become and be immediately due and payable without any declaration or other act on the part of the Trustee or any holders of the outstanding notes and exchange notes. The amount due and payable on the acceleration of any note will be equal to 100% of the principal amount of such note, plus accrued interest to the date of payment. Under certain circumstances, the holders of a majority in principal amount of the outstanding notes and exchange notes may rescind any such acceleration with respect to the outstanding notes and exchange notes and its consequences.

      The Indenture provides that no holder of an outstanding note or exchange note may pursue any remedy under the Indenture unless (i) the Trustee shall have received written notice of a continuing Event of Default from the Company or a holder of an outstanding note or exchange note, (ii) the Trustee shall have received a request from holders of at least 25% in principal amount of the outstanding notes and exchange notes to pursue such remedy, (iii) the Trustee shall have been offered indemnity and security reasonably satisfactory to it, and (iv) the Trustee shall have failed to act for a period of 60 days after receipt of such notice, request and offer of indemnity; however, such provision does not affect the right of a holder of an outstanding note or exchange note to sue for enforcement of any overdue payment thereon.

      The holders of a majority in principal amount of the outstanding notes and exchange notes then outstanding will have the right, by an instrument or concurrent instruments in writing executed and delivered to the Trustee, to direct the time, method and place of conducting any proceeding for exercising any remedy available to the Trustee under the Indenture or exercising any trust or power conferred on such Trustee, subject to certain limitations specified in the Indenture. The Indenture requires the annual filing by the Company with the Trustee of a written statement as to compliance with the covenants contained in the Indenture.

Modification and Waiver

      The Indenture provides that modifications and amendments to the Indenture or the outstanding notes or exchange notes may be made by the Company, the Subsidiary Guarantors and the Trustee with the consents of the holders of a majority in principal amount of the outstanding notes and exchange notes then outstanding; provided that no such modification or amendment may, without the consent of the holder of each outstanding note or exchange note then outstanding affected thereby, (i) reduce the percentage of principal amount of outstanding notes and exchange notes whose holders may consent to an amendment, supplement or

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waiver; (ii) reduce the rate or change the time for payment of interest, including default interest, on any outstanding note or exchange note; (iii) reduce the principal amount of any outstanding note or exchange note or change the Maturity Date of the outstanding notes and exchange notes; (iv) reduce the redemption price, including premium, if any, payable upon redemption of any outstanding note or exchange note or change the time at which any outstanding note or exchange note may or shall be redeemed; (v) reduce the repurchase price, including premium, if any, payable upon the repurchase of any outstanding note or exchange note or change the time at which any outstanding note or exchange note may or shall be repurchased; (vi) make any outstanding note or exchange note payable in money other than that stated in the outstanding note or exchange note; (vii) impair the right to institute suit for the enforcement of any payment of principal of, or premium, if any, or interest on, any outstanding note or exchange note; (viii) make any change in the percentage of principal amount of outstanding notes and exchange notes necessary to waive compliance with certain provisions of the Indenture; or (ix) except as otherwise provided in the Indenture, waive a continuing Default or Event of Default in the payment of principal of, premium, if any, or interest on the outstanding notes and exchange notes. In addition, any amendment to, or waiver of, the provisions of the Indenture relating to subordination that adversely affects the rights of the holders of the outstanding notes and exchange notes will require the consent of the holders of at least 75% in aggregate principal amount of outstanding notes and exchange notes then outstanding. The Indenture provides that modifications, amendments and supplements of the Indenture may be made by the Company, the Subsidiary Guarantors and the Trustee without notice to or consent of any holders of outstanding notes and exchange notes in certain limited circumstances, including (i) to cure any ambiguity, omission, defect or inconsistency, (ii) to provide for the assumption of the obligations of the Company or any Subsidiary Guarantor under the Indenture upon the merger, consolidation or sale or other disposition of all or substantially all of the assets of the Company or any such Subsidiary Guarantor, (iii) to provide for uncertificated outstanding notes or exchange notes in addition to or in place of certificated outstanding notes or exchange notes, (iv) to reflect the release of any Subsidiary Guarantor from its Guarantee, or the addition of any Subsidiary of the Company as a Subsidiary Guarantor, in the manner provided by the Indenture, (v) to comply with any requirement of the SEC in order to effect or maintain the qualification of the Indenture under the Trust Indenture Act of 1939 or (vi) to make any change that would provide any additional benefit or rights to the holders or that does not adversely affect the rights of any holder of outstanding notes or exchange notes in any material respect.

      The Indenture provides that the holders of a majority in aggregate principal amount of the outstanding notes and exchange notes then outstanding may waive any past default under the Indenture, except a default in the payment of principal, premium, if any, or interest.

Discharge and Termination

      The Company may at any time terminate its obligation under the outstanding notes and exchange notes and the Indenture, with certain exceptions specified in the Indenture, by irrevocably depositing in trust cash or obligations of the United States government and its agencies for payment of principal of, premium, if any, and interest on, the outstanding notes and exchange notes to redemption or maturity, subject to the satisfaction of certain conditions.

      Subject to the conditions described below, at the Company’s option, either (i) the Company and all Subsidiary Guarantors will be deemed to have been discharged from their respective obligations with respect to the outstanding notes and exchange notes on the 91st day after the applicable conditions set forth below have been satisfied or (ii) the Company and all Subsidiary Guarantors will cease to be under any obligation to comply with certain restrictive covenants, including those described under “— Certain Covenants” as well as the subordination and guarantee provisions of the Indenture at any time after the applicable conditions set forth below have been satisfied: (A) the Company or any Subsidiary Guarantor has deposited or caused to be deposited irrevocably with the Trustee as trust funds in trust, specifically pledged as security for, and dedicated solely to, the benefit of the holders (1) U.S. Legal Tender or (2) U. S. Government Obligations, which through the payment of interest and principal in respect thereof in accordance with their terms will provide (without any reinvestment of such interest or principal), not later than one day before the due date of any payment, U.S. Legal Tender or (3) a combination of (1) and (2), in an amount sufficient, in the opinion

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(with respect to (2) and (3)) of a nationally recognized firm of independent public accountants expressed in a written certification thereof delivered to the Trustee at or prior to the time of such deposit, to pay and discharge each installment of principal of, premium, if any, and interest on, the outstanding notes and exchange notes then outstanding on the date such installments are due; (B) the Company has delivered to the Trustee an officers’ certificate certifying whether the outstanding notes and exchange notes are then listed on a national securities exchange; (C) if the outstanding notes and exchange notes are then listed on a national securities exchange, the Company has delivered to the Trustee an officers’ certificate to the effect that the Company’s exercise of its option described above would not cause the outstanding notes and exchange notes to be delisted; (D) no Default or Event of Default has occurred and is continuing on the date of such deposit or will occur as a result of such deposit and such deposit will not result in a breach or violation of, or constitute a default under, any other instrument to which the Company or a Subsidiary Guarantor is a party or by which any of them is bound, as evidenced to the Trustee in an officers’ certificate delivered to the Trustee concurrently with such deposit; (E) the Company has delivered to the Trustee an opinion of counsel (which counsel may be an employee of the Company) to the effect that holders of the outstanding notes and exchange notes will not recognize income, gain or loss for federal income tax purposes as a result of the Company’s exercise of its option described above and will be subject to federal income tax on the same amount and in the same manner and at the same time as would have been the case if such option had not been exercised, and, in the case of the outstanding notes and exchange notes being discharged, accompanied by a ruling to that effect received from or published by the Internal Revenue Service (it being understood that (1) such opinion will also state that such ruling is consistent with the conclusions reached in such opinion and (2) the Trustee will be under no obligation to investigate the basis of correctness of such ruling); (F) the Company has delivered to the Trustee an opinion of counsel (which counsel may be an employee of the Company) to the effect that the Company’s exercise of its option described above will not result in any of the Company, the Trustee or the trust created by the Company’s deposit of funds hereunder becoming or being deemed to be an “investment company” under the Investment Company Act of 1940, as amended; (G) the Company or any Subsidiary Guarantor has paid or duly provided for payment of all amounts then due to the Trustee pursuant to the terms of the Indenture; and (H) the Company has delivered to the Trustee an officers’ certificate and an opinion of counsel (which counsel may be an employee of the Company), each stating that all conditions precedent provided for in the Indenture relating to the satisfaction and discharge of the Indenture have been complied with.

      Upon the termination of the Company’s obligations under the outstanding notes and exchange notes and the Indenture, the obligations of the Subsidiary Guarantors under the Guarantees will also terminate.

Governing Law

      The Indenture provides that it will be governed by, and construed in accordance with, the laws of the State of New York.

Registration Rights; Liquidated Damages

      The following description is a summary of the material provisions of the Registration Rights Agreement entered into by the Company, the Subsidiary Guarantors and the initial purchasers. It does not restate that agreement in its entirety. We urge you to read the form of Registration Rights Agreement in its entirety because it, and not this description, defines your registration rights as holders of the outstanding notes or exchange notes.

      Pursuant to the Registration Rights Agreement, the Company and the Subsidiary Guarantors agreed to file with the SEC a registration statement, or the exchange offer registration statement, on the appropriate form under the Securities Act with respect to the outstanding notes. Upon the effectiveness of the exchange offer registration statement, the Company and the Subsidiary Guarantors will offer to the holders of outstanding notes pursuant to the exchange offer who are able to make certain representations the opportunity to exchange their outstanding notes for exchange notes.

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      If:

      (1) the Company and the Subsidiary Guarantors are not permitted to consummate the exchange offer because the exchange offer is not permitted by applicable law or SEC policy; or

      (2) any holder of outstanding notes notifies the Company prior to the 20th day following consummation of the exchange offer that:

      (a) it is prohibited by law or SEC policy from participating in the exchange offer; or

      (b) that it may not resell the exchange notes acquired by it in the exchange offer to the public without delivering a prospectus and the prospectus contained in the exchange offer registration statement is not appropriate or available for such resales; or

      (c) that it is a broker-dealer and owns outstanding notes acquired directly from the Company or an affiliate of the Company,

the Company and the Subsidiary Guarantors will file with the SEC a shelf registration statement to cover resales of the outstanding notes or the exchange notes by the holders thereof who satisfy certain conditions relating to the provision of information in connection with the shelf registration statement.

      The Company and the Subsidiary Guarantors will use their best efforts to cause the applicable registration statement to be declared effective as promptly as possible by the SEC.

      The Registration Rights Agreement provides:

      (1) the Company and the Subsidiary Guarantors will file an exchange offer registration statement with the SEC on or prior to July 15, 2002;

      (2) the Company and the Subsidiary Guarantors will use their best efforts to have the exchange offer registration statement declared effective by the SEC on or prior to October 11, 2002;

      (3) unless the exchange offer would not be permitted by applicable law or SEC policy, the Company and the Subsidiary Guarantors will

      (a) commence the exchange offer; and

      (b) issue exchange notes in exchange for all outstanding notes tendered prior thereto in the exchange offer; and

      (4) if obligated to file the shelf registration statement, the Company and the Subsidiary Guarantors will file the shelf registration statement with the SEC on or prior to 45 days after such filing obligation arises and use their best efforts to cause the shelf registration statement to be declared effective by the SEC on or prior to 135 days after such obligation arises.

      If:

      (1) the Company and the Subsidiary Guarantors fail to file any of the registration statements required by the Registration Rights Agreement on or before the date specified for such filing; or

      (2) any of such registration statements is not declared effective by the SEC on or prior to the date specified for such effectiveness (the “Effectiveness Target Date”); or

      (3) the Company and the Subsidiary Guarantors fail to consummate the exchange offer within 30 business days of the Effectiveness Target Date with respect to the exchange offer registration statement; or

      (4) the shelf registration statement or the exchange offer registration statement is declared effective but thereafter ceases to be effective or usable in connection with resales or exchanges of outstanding notes or exchange notes during the periods specified in the Registration Rights Agreement (each such event referred to in clauses (1) through (4) above, a “Registration Default”),

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then the Company will pay liquidated damages to each holder of notes, with respect to the first 90-day period immediately following the occurrence of the first Registration Default, equal to one-half of one percent (0.50%) per annum on the principal amount of Notes held by such holder.

      The amount of the liquidated damages will increase by an additional one-half of one percent (0.50%) per annum on the principal amount of notes with respect to each subsequent 90-day period until all Registration Defaults have been cured, up to a maximum amount of liquidated damages for all Registration Defaults of 1.5% per annum.

      All accrued liquidated damages will be paid by the Company on each interest payment date to the Global Exchange Note holder by wire transfer of immediately available funds or by federal funds check and to holders of Certificated Notes by wire transfer to the accounts specified by them or by mailing checks to their registered addresses if no such accounts have been specified.

      Following the cure of all Registration Defaults, the accrual of liquidated damages will cease.

      Holders of outstanding notes will be required to make certain representations to the Company and the Subsidiary Guarantors (as described in the Registration Rights Agreement) in order to participate in the exchange offer and will be required to deliver certain information to be used in connection with the shelf registration statement and to provide comments on the shelf registration statement within the time periods set forth in the Registration Rights Agreement in order to have their outstanding notes or exchange notes included in the shelf registration statement and benefit from the provisions regarding liquidated damages set forth above. By acquiring outstanding notes or exchange notes, a holder will be deemed to have agreed to indemnify the Company and the Subsidiary Guarantors against certain losses arising out of information furnished by such holder in writing for inclusion in any shelf registration statement. Holders of outstanding notes and exchange notes will also be required to suspend their use of the prospectus included in the shelf registration statement under certain circumstances upon receipt of written notice to that effect from the Company.

      The registration statement of which this prospectus is a part has been filed with the SEC and the exchange offer is being made to satisfy the Company’s and the Subsidiary Guarantors’ obligations under the Registration Rights Agreement.

The Trustee

      The Bank of New York is the Trustee under the Indenture. The Company has also appointed the Trustee as the initial Registrar and Paying Agent under the Indenture. The Bank of New York is also the trustee under the Company’s 9% senior subordinated notes due 2007.

      The Company may maintain depository and other normal banking relationships with the Trustee or any of its affiliates. The Trustee will be permitted to engage in other transactions with the Company; however, the Trustee would be required to resign within 90 days of the occurrence of a Default or an Event of Default (without regard to the giving of notice or the passage of time) if the Trustee then has any conflicting interest (as defined in the Trust Indenture Act of 1939).

      The Indenture contains certain limitations on the right of the Trustee, should it become a creditor of the Company, to obtain payment of claims in certain cases, or to realize on certain property received in respect of any such claim as security or otherwise. The Trustee will be permitted to engage in other transactions; however, if it acquires any conflicting interest (as defined in the Trust Indenture Act of 1939), it must eliminate such conflict or resign.

      The Indenture provides that in case an Event of Default shall occur (and be continuing), the Trustee will be required to use the degree of care and skill of a prudent man in the conduct of his own affairs. The Trustee will be under no obligation to exercise any of its powers under the Indenture at the request of any of the holders of the outstanding notes or exchange notes, unless such holders shall have offered the Trustee indemnity and security reasonably satisfactory to it.

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CERTAIN FEDERAL INCOME TAX CONSEQUENCES

      The following is a summary of certain United States federal income tax consequences relevant to initial purchasers of the notes and exchange notes. This summary is based on currently existing provisions of the Internal Revenue Code, existing and proposed Treasury regulations promulgated under the Code and administrative and judicial interpretations of the Code, all as in effect or proposed on the date of this prospectus. These provisions, regulations and interpretations are subject to change, possibly with retroactive effect. This summary does not address the tax consequences to subsequent purchasers of the outstanding notes and exchange notes, and is limited to purchasers who hold the outstanding notes or exchange notes as capital assets, within the meaning of Section 1221 of the Code. In addition, this summary is for general information only, and does not address all of the tax consequences that may be relevant to particular purchasers in light of their personal circumstances. This summary also does not address tax consequences to certain types of purchasers (such as certain financial institutions, insurance companies, tax-exempt entities, dealers in securities or currencies, persons holding notes as part of a hedging, integrated, conversion or constructive sale transaction or a straddle, traders in securities that elect to use a mark-to-market method of accounting for their securities holdings, persons liable for alternative minimum tax, or holders of outstanding notes or exchange notes whose “functional currency” is not the U.S. dollar) or the effect of applicable state, local or foreign tax law.

      If a partnership holds the outstanding notes or exchange notes, the tax treatment of a partner will generally depend on the status of the partner and the tax treatment of the partnership. A partner of a partnership holding the notes should consult its tax advisors.

      WE URGE PROSPECTIVE PARTICIPANTS IN THE EXCHANGE OFFER TO CONSULT THEIR OWN TAX ADVISORS AS TO THE PARTICULAR TAX CONSEQUENCES TO THEM OF THE ACQUISITION, OWNERSHIP AND DISPOSITION OF THE OUTSTANDING NOTES AND EXCHANGE NOTES, INCLUDING THE APPLICABILITY OF ANY FEDERAL TAX LAWS OR ANY STATE, LOCAL OR FOREIGN TAX LAWS, AND ANY CHANGES (OR PROPOSED CHANGES) IN APPLICABLE TAX LAWS OR INTERPRETATIONS THEREOF.

      As used in this summary, the term “U.S. Holder” means a beneficial owner of the outstanding notes or exchange notes who or that is an individual who is a citizen or resident of the United States (including certain former citizens and former long-term residents), a corporation, partnership or other entity created or organized in or under the laws of the United States or of any state, an estate, the income of which is subject to United States federal income taxation regardless of its source, or a trust if a United States court is able to exercise primary supervision over the administration of the trust and one or more United States persons have authority to control all substantial decisions of the trust, or if the trust has a valid election in effect under applicable Treasury regulations to be treated as a United States person. A “Non-U.S. Holder” is a beneficial owner of the outstanding notes or exchange notes who or that is not a U.S. Holder.

U.S. Holders

Payments of Interest on Notes

      The outstanding notes were issued at a discount from their stated principal amount at maturity. For United States federal income tax purposes, the excess of the stated principal amount at maturity of each outstanding note or exchange note over the issue price (the initial offering price to investors at which a substantial amount of the outstanding notes were sold) constitutes original issue discount. In addition to stated cash interest on an outstanding note or exchange note, which will be taxable to a holder as ordinary interest income at the time it accrues or is paid depending on the holder’s method of accounting for United States federal income tax purposes, holders of outstanding notes and exchange notes will be required to include original issue discount in income periodically over the term of the outstanding notes and exchange notes before receipt of the cash or other payment attributable to such income. For United States federal income tax purposes, each holder of an outstanding note or exchange note must generally include in gross income a portion of the original issue discount in each taxable year during which the outstanding note or exchange note is held in an amount equal to the original issue discount that accrues on the note during such period,

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determined by using a constant yield to maturity method. The original issue discount included in income for each year will be calculated under a compounding formula that will result in the allocation of less original issue discount to the earlier years of the term of the outstanding note or exchange note and more original issue discount to later years. Any amount included in income as original issue discount will increase the holder’s tax basis in the outstanding note or exchange note.

      Our failure to complete the exchange offer, or to file or cause to be declared effective the shelf registration statement as described in “Description of the Exchange Notes — Registration Rights; Liquidated Damages,” will cause a U.S. Holder to recognize as ordinary income the additional interest payable as a result of such failure when that amount is accrued or paid, in accordance with such U.S. Holder’s regular method of accounting. According to Treasury regulations, the possibility of a change in the interest rate will not affect the amount of interest income recognized by a U.S. Holder (or the timing of the recognition) if the likelihood of the change, as of the date the Notes are issued, is remote. We believe that the likelihood of a change in the interest rate on the outstanding notes or exchange notes is remote, and do not intend to treat the possibility of a change in the interest rate as affecting the yield to maturity of any outstanding note or exchange note.

Sale, Exchange or Retirement of Outstanding Notes or Exchange Notes

      Upon the sale, exchange, redemption, retirement at maturity or other disposition of an outstanding note or exchange note, a U.S. Holder will generally recognize taxable gain or loss equal to the difference between the sum of cash plus the fair market value of all other property received on such disposition (except to the extent such cash or property is attributable to accrued but unpaid interest, which will be taxable as ordinary income) and such beneficial owner’s adjusted tax basis in the outstanding note or exchange note. A U.S. Holder’s adjusted tax basis in an outstanding note or exchange note generally will equal the cost of the outstanding note or exchange note to such holder, increased by any accrued original issue discount includable in such holder’s gross income and reduced by any principal payments received by such holder.

      Gain or loss recognized on the disposition of an outstanding note or exchange note generally will be capital gain or loss, and will be long-term capital gain or loss if, at the time of such disposition, the U.S. Holder’s holding period for the outstanding note or exchange note is more than one year. Long-term capital gains of individuals may be subject to tax at a lower tax rate. The deduction of capital losses is subject to certain limitations. U.S. Holders of outstanding notes or exchange notes should consult tax advisors regarding the treatment of capital gains and losses.

      We are offering to exchange the outstanding notes for exchange notes in satisfaction of our obligations under the registration rights agreement. See “Description of the Exchange Notes — Registration Rights; Liquidated Damages.” The exchange of an outstanding note by a U.S. Holder for an exchange note pursuant to the exchange offer will not be treated as an “exchange” for U.S. federal income tax purposes because the exchange notes will not be considered to differ materially in kind or extent from the outstanding notes. Under existing Treasury regulations relating to modifications and exchanges of debt instruments, any increase in the interest rate of the outstanding notes resulting from the exchange offer not being consummated, or a shelf registration statement not being declared effective, would not be treated as a taxable exchange, as such change in interest rate would occur pursuant to the original terms of the outstanding notes.

Information Reporting and Backup Withholding

      For each calendar year in which the outstanding notes or exchange notes are outstanding, we are required to provide the Internal Revenue Service with information regarding certain payments of principal, premium, if any, interest and accrued original issue discount on an outstanding note or exchange note to a U.S. Holder and proceeds paid to a U.S. Holder from the sale or redemption of an outstanding note or exchange note. The information we are required to report to the IRS includes the beneficial owner’s name, address and taxpayer identification number, the aggregate amount of interest paid (and original issue discount allocable) to that beneficial owner during the calendar year and the amount of tax withheld, if any. This obligation, however, does not apply with respect to certain payments to U.S. Holders, including corporations, financial institutions,

120

tax-exempt organizations, qualified pension and profit sharing trusts and individual retirement accounts, provided that they establish entitlement to an exemption.

      If a U.S. Holder subject to the reporting requirements described above fails to supply its correct taxpayer identification number in the manner required by applicable law or underreports its tax liability, we, our agent, a broker, the trustee or any paying agent, as the case may be, may be required to deduct and withhold the applicable tax from any reportable payment that is subject to backup withholding tax. This backup withholding is not an additional tax, and may be credited against the U.S. Holder’s United States federal income tax liability, provided that the required information is furnished to the IRS.

Non-U.S. Holders

Payments of Interest on Notes

      The following is a summary of certain United States federal income tax and estate tax consequences to a Non-U.S. Holder that holds an outstanding note or exchange note. No United States federal withholding tax under Sections 1441 and 1442 of the Code will be imposed with respect to the payment by us or our paying agent of principal, premium, if any, interest or accrued original issue discount on an outstanding note or exchange note owned by a Non-U.S. Holder under the portfolio interest exception, provided that: (1) the Non-U.S. Holder or the financial institution holding the outstanding note or exchange note on behalf of the Non-U.S. Holder provides an owners statement, which may be provided on IRS Form W-8BEN, IRS Form W-8EXP, or IRS Form W-8IMY, as applicable, to us, our paying agent or the person who would otherwise be required to withhold tax, certifying, under penalties of perjury, that such Non-U.S. Holder is not a United States person and providing the name and address of the Non-U.S. Holder; (2) such interest (including original issue discount) is treated as not effectively connected with the Non-U.S. Holder’s United States trade or business; (3) such interest (including original issue discount) is treated as not effectively connected with the Non-U.S. Holder within a foreign country that the IRS has listed on a list of countries having provisions inadequate to prevent United States tax evasion; (4) such Non-U.S. Holder does not actually or constructively own 10% or more of the total combined voting power of all of our stock entitled to vote; (5) such Non-U.S. Holder is not a controlled foreign corporation within the meaning of Section 957 of the Code that is related to us through stock ownership within the meaning of Section 864(d)(4) of the Code; and (6) the beneficial owner is not a bank whose receipt of interest on an outstanding note or exchange note represents interest on an extension of credit pursuant to a loan agreement as described in Section 881(c)(3)(A) of the Code. As used in this summary, the term financial institution means a securities clearing organization, bank or other financial institution that holds customers’ securities in the ordinary course of its trade or business and holds an outstanding note or exchange note on behalf of the owner of the outstanding note or exchange note.

      A Non-U.S. Holder who does not qualify for the portfolio interest exception as described above would, under current law, generally be subject to United States federal withholding tax at a flat rate of 30% (or lower applicable treaty rate) on interest payments, including payments attributable to accrued original issue discount. A Non-U.S. Holder, however, will not be subject to the 30% withholding tax if such Non-U.S. Holder provides us with a properly executed (1) IRS Form W-8BEN (or other applicable form) demonstrating an exemption from or reduction in withholding under the benefit of a tax treaty, or (2) IRS Form W-8ECI (or substitute form) stating that the interest paid on the Notes or Exchange Notes is not subject to withholding tax because it is effectively connected to the beneficial owner’s conduct of a trade or business in the United States. The 30% United States federal withholding tax will generally not apply to any gain that a Non-U.S. Holder recognizes upon the redemption, retirement, sale, exchange or other disposition of a Note or Exchange Note.

Sale, Exchange or Retirement of Notes

      In general, gain recognized by a Non-U.S. Holder upon the redemption, retirement, sale, exchange or other disposition of an outstanding note or exchange note will not be subject to United States federal income tax unless such gain or loss is effectively connected with a trade or business in the United States of such

121

Non-U.S. Holder. A Non-U.S. Holder, however, may be subject to a United States federal income tax at a flat rate of 30% (unless a lower applicable treaty rate applies) on any such gain if the Non-U.S. Holder is an individual who is present in the United States for 183 days or more during the taxable year of the disposition of the note and certain other requirements are met.

Effectively Connected Income

      If a Non-U.S. Holder is engaged in a trade or business in the United States and if interest (including original issue discount) on an outstanding note or exchange note is effectively connected with the conduct of such trade or business, the Non-U.S. Holder, although exempt from United Stated federal withholding tax as discussed above, will be subject to United States federal income tax on such interest (including original issue discount) on a net income basis in the same manner as if the holder were a U.S. Holder. In addition, if such holder is a foreign corporation, it may be subject to a branch profits tax equal to 30%, or applicable lower tax treaty rate, of its effectively connected earnings and profits for the taxable year, subject to adjustments. For this purpose, interest on an outstanding note or exchange note (including original issue discount) will be included in such foreign corporation’s effectively connected earnings and profits.

Backup Withholding and Information Reporting

      Backup withholding and information reporting requirements generally do not apply to payments of principal or interest (including original issue discount) made by us or any of our agents to a Non-U.S. Holder if the owner’s statement described above under the portfolio interest exception is received, provided that the payor does not have actual knowledge the that the holder is a U.S. Holder. If any payments of principal and interest are made to the beneficial owner of an outstanding note or exchange note by or through a foreign office of a foreign custodian, foreign nominee, broker (as defined in applicable Treasury regulations), or other foreign agent of such beneficial owner, information reporting or backup withholding requirements also will not apply, assuming the owner’s statement described above is received (and the payor does not have actual knowledge that the beneficial owner is a United States person) or the beneficial owner otherwise establishes an exemption. Information reporting (but not backup withholding) may apply, however, to a payment by a foreign office of such custodian, nominee, broker or agent that is (1) a U.S. person, (2) a foreign person that derives 50% or more of its gross income for certain periods from the conduct of a trade or business in the United States, (3) a foreign partnership in which one or more U.S. persons, in the aggregate, own more than 50% of the income or capital interests in the partnership or a foreign partnership that is engaged in a trade or business in the Unites States, or (4) a controlled foreign corporation within the meaning of Section 957 of the Code, unless the Non-U.S. Holder provides an owners statement and certain other conditions are met or the holder otherwise establishes an exemption. Payment of principal and interest (including original issue discount) on a note to a Non-U.S. Holder by a United States office of a custodian, nominee or agent, or the payment by the United States office of a broker of the proceeds of sale of an outstanding note or exchange note, will be subject to both information reporting and backup withholding unless the holder or beneficial owner provides the owner’s statement described above (and the payor does not have actual knowledge that the beneficial owner is a United States person) or otherwise establishes an exemption from information reporting and backup withholding.

Estate Tax

      Subject to applicable estate tax treaty provisions, outstanding notes or exchange notes beneficially owned by a Non-U.S. Holder who is an individual nonresident at the time of death for U.S. federal estate tax purposes will not be included in such holder’s gross estate for such purposes, provided that (1) the individual does not actually or constructively own 10% or more of the total combined voting power of all classes of our stock entitled to vote within the meaning of the Code and applicable Treasury regulations, and (2) the interest payments (including original issue discount) with respect to such outstanding note or exchange note would not have been, if received at the time of such individual’s death, effectively connected with the conduct of a United States trade or business by such individual Non-U.S. Holder.

122

PLAN OF DISTRIBUTION

      Each broker-dealer that receives exchange notes for its own account pursuant to the exchange offer must acknowledge that it will deliver a prospectus in connection with any resale of such exchange notes. This prospectus, as it may be amended or supplemented from time to time, may be used by a broker-dealer in connection with resales of exchange notes received in exchange for outstanding notes where such outstanding notes were acquired as a result of market-making activities or other trading activities. We have agreed that we will, for a period of ending on the earlier of (a) 180 days from the date on which the registration statement of which this prospectus is a part is declared effective and (b) the date on which a broker-dealer is no longer required to deliver a prospectus in connection with market-making or other trading activities, make this prospectus, as amended or supplemented, available to any broker-dealer for use in connection with any such resale.

      We will not receive any proceeds from any sale of exchange notes by broker-dealers. Exchange notes received by broker-dealers for their own account pursuant to the exchange offer may be sold from time to time in one or more transactions in the over-the-counter market, in negotiated transactions, through the writing of options on the exchange notes or a combination of such methods of resale, at market prices prevailing at the time of resale, at prices related to such prevailing market prices or negotiated prices. Any such resale may be made directly to purchasers or to or through brokers or dealers who may receive compensation in the form of commissions or concessions from any such broker-dealer and/or the purchasers of any such exchange notes. Any broker-dealer that resells exchange notes that were received by it for its own account pursuant to the exchange offer and any broker or dealer that participates in a distribution of such exchange notes may be deemed to be an “underwriter” within the meaning of the Securities Act and any profit on any such resale of exchange notes and any commissions or concessions received by any such persons may be deemed to be underwriting compensation under the Securities Act. The letter of transmittal states that by acknowledging that it will deliver and by delivering a prospectus, a broker-dealer will not be deemed to admit that it is an “underwriter” within the meaning of the Securities Act.

      For the period described in this first paragraph in this “Plan of Distribution” section, we will promptly send additional copies of the prospectus and any amendment or supplement to this prospectus to any broker-dealer that requests such document. We have agreed to pay all expenses incident to the exchange offer other than commissions or concessions of any brokers or dealers and will indemnify the holders of the exchange notes, including any broker-dealers, against certain liabilities, including liabilities under the Securities Act.

123

LEGAL MATTERS

      The validity of the exchange notes will be passed upon for us by Fennemore Craig, P.C., Phoenix, Arizona.

EXPERTS

      The consolidated financial statements and schedules of Giant Industries, Inc. and Subsidiaries as of December 31, 2001 and 2000, and for each of the three years in the period ended December 31, 2001, included and incorporated by reference in this prospectus have been audited by Deloitte & Touche LLP, independent auditors, as stated in their reports, which are included and incorporated by reference herein, and have been so included and incorporated in reliance upon the report of such firm given upon their authority as experts in accounting and auditing.

      The financial statements of the Yorktown Refinery of BP Corporation North America Inc. as of December 31, 2000 and 2001 and for the years then ended, included and incorporated by reference in this prospectus, have been audited by Ernst & Young LLP, independent auditors, as set forth in their report appearing elsewhere and incorporated by reference herein, and are so included and incorporated by reference in reliance upon such report given on the authority of such firm as experts in accounting and auditing.

124

INDEX TO FINANCIAL STATEMENTS

	Page
Consolidated Financial Statements of Giant Industries, Inc. and Subsidiaries for the Years Ended December 31, 2001, 2000 and 1999
Independent Auditors’ Report		F-2
Consolidated Balance Sheets — December 31, 2001 and 2000		F-3
Consolidated Statements of Earnings — Years Ended December 31, 2001, 2000 and 1999		F-4
Consolidated Statements of Stockholders’ Equity — Years Ended December 31, 1999, 2000 and 2001		F-5
Consolidated Statements of Cash Flows — Years Ended December 31, 2001, 2000 and 1999		F-6
Notes to Consolidated Financial Statements		F-7
Condensed Consolidated Financial Statements of Giant Industries, Inc. and Subsidiaries for the Three Months Ended March 31, 2002 and 2001 (Unaudited)
Condensed Consolidated Balance Sheets — March 31, 2002 and December 31, 2001		F-34
Condensed Consolidated Statements of Earnings — Three Months Ended March 31, 2002 and 2001		F-35
Condensed Consolidated Statements of Cash Flows — Three Months Ended March 31, 2002 and 2001		F-36
Notes to Condensed Consolidated Financial Statements		F-37
Financial Statements of the Yorktown Refinery of BP Corporation North America Inc. for the Years Ended December 31, 2000 and 2001, and (Unaudited) Three Months Ended March 31, 2001 and 2002
Report of Independent Auditors		F-53
Balance Sheets — December 31, 2000 and 2001, and March 31, 2002		F-54
Statements of Operations — Years Ended December 31, 2000 and 2001, and Three Months Ended March 31, 2001 and 2002		F-55
Statements of Parent Company Investment — Years Ended December 31, 2000 and 2001, and Three Months Ended March 31, 2002		F-56
Statements of Cash Flows — Years Ended December 31, 2000 and 2001, and Three Months Ended March 31, 2001 and 2002		F-57
Notes to Financial Statements		F-58

F-1

INDEPENDENT AUDITORS’ REPORT

Board of Directors and Stockholders
Giant Industries, Inc.
Scottsdale, Arizona

      We have audited the accompanying consolidated balance sheets of Giant Industries, Inc. and subsidiaries as of December 31, 2001 and 2000, and the related consolidated statements of earnings, stockholders’ equity and cash flows for each of the three years in the period ended December 31, 2001. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

      We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

      In our opinion, such consolidated financial statements present fairly, in all material respects, the financial position of Giant Industries, Inc. and subsidiaries as of December 31, 2001 and 2000, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2001, in conformity with accounting principles generally accepted in the United States of America.

Phoenix, Arizona

March 29, 2002 (except for Note 19, as to which the date is July 12, 2002)

F-2

GIANT INDUSTRIES, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

			December 31,
			2001			2000
			(In thousands,
			except share and
			per share data)
ASSETS
Current assets:
	Cash and cash equivalents		$	26,326		$	26,618
	Receivables:
		Trade, less allowance for doubtful accounts of $540 and $356		37,181			69,215
		Income tax refunds		1,497			741
		Other		4,852			5,591
				43,530			75,547
	Inventories			58,729			56,607
	Prepaid expenses and other			3,661			3,659
	Deferred income taxes			3,735			2,753
		Total current assets		135,981			165,184
Property, plant and equipment				525,345			508,384
	Less accumulated depreciation and amortization			(201,823	)		(192,234	)
				323,522			316,150
Goodwill, less accumulated amortization of $5,361 and $4,292				19,815			20,806
Note and interest receivable from a related party, less allowance for doubtful account of $5,409 and $0 (Note 6)				—			5,810
Other assets				27,856			20,615
			$	507,174		$	528,565
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
	Current portion of long-term debt		$	45		$	213
	Accounts payable			42,255			66,461
	Accrued expenses			36,537			44,016
		Total current liabilities		78,837			110,690
Long-term debt, net of current portion				256,749			258,009
Deferred income taxes				32,772			27,621
Other liabilities and deferred income				2,406			4,542
Commitments and contingencies (Notes 3, 6, 10, 11, 13, 14, 15, 16 and 18)
Stockholders’ equity:
	Preferred stock, par value $.01 per share, 10,000,000 shares authorized, none issued
	Common stock, par value $.01 per share, 50,000,000 shares authorized, 12,305,859 and 12,282,688 shares issued			123			122
	Additional paid-in capital			73,589			73,099
	Retained earnings			99,152			87,262
				172,864			160,483
	Less common stock in treasury — at cost, 3,751,980 and 3,334,680 shares			(36,454	)		(32,780	)
		Total stockholders’ equity		136,410			127,703
			$	507,174		$	528,565

The accompanying notes are an integral part of these consolidated financial statements.

F-3

GIANT INDUSTRIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF EARNINGS

		Year Ended December 31,
		2001			2000			1999
		(In thousands, except
		per share data)
Net revenues		$	968,679		$	1,074,362		$	782,683
Cost of products sold			738,514			859,001			568,005
Gross margin			230,165			215,361			214,678
Operating expenses			114,260			122,650			115,599
Depreciation and amortization			33,875			33,579			31,129
Selling, general and administrative expenses			27,864			25,373			28,166
Loss on the disposal/write-down of assets			6,212			—			2,387
Allowance for related party note and interest receivable			5,409			—			—
Operating income			42,545			33,759			37,397
Interest expense			(24,098	)		(24,411	)		(23,417	)
Interest and investment income			1,661			1,989			2,476
Earnings before income taxes			20,108			11,337			16,456
Provision for income taxes			7,727			4,048			5,678
Net earnings		$	12,381		$	7,289		$	10,778
Earnings per common share:
	Basic	$	1.40		$	0.79		$	1.01
	Assuming dilution	$	1.39		$	0.79		$	1.01

The accompanying notes are an integral part of these consolidated financial statements.

F-4

GIANT INDUSTRIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

	Common Stock
							Additional						Treasury Stock					Total
	Shares			Par			Paid-in			Retained								Stockholders’
	Issued			Value			Capital			Earnings			Shares		Cost			Equity
	(In thousands, except number of shares)
Balances, January 1, 1999		12,232,367		$	122		$	72,699		$	69,391			1,393,600	$	(14,510	)	$	127,702
Purchase of treasury stock		—			—			—			—			569,100		(6,113	)		(6,113	)
Stock options exercised		120,857			1			1,069			—			—		—			1,070
Shares cancelled on net exercise of stock options		(87,036	)		(1	)		(778	)		(196	)		—		—			(975	)
Net earnings		—			—			—			10,778			—		—			10,778
Balances, December 31, 1999		12,266,188			122			72,990			79,973			1,962,700		(20,623	)		132,462
Purchase of treasury stock		—			—			—			—			1,371,980		(12,157	)		(12,157	)
Stock options exercised		16,500			—			109			—			—		—			109
Net earnings		—			—			—			7,289			—		—			7,289
Balances, December 31, 2000		12,282,688			122			73,099			87,262			3,334,680		(32,780	)		127,703
Purchase of treasury stock		—			—			—			—			417,300		(3,674	)		(3,674	)
Stock options exercised		126,601			2			1,105			—			—		—			1,107
Shares cancelled on net exercise of stock options		(103,430	)		(1	)		(615	)		(491	)		—		—			(1,107	)
Net earnings		—			—			—			12,381			—		—			12,381
Balances, December 31, 2001		12,305,859		$	123		$	73,589		$	99,152			3,751,980	$	(36,454	)	$	136,410

The accompanying notes are an integral part of these consolidated financial statements.

F-5

GIANT INDUSTRIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

				Year Ended December 31,
				2001			2000			1999
				(In thousands)
Cash flows from operating activities:
	Net earnings			$	12,381		$	7,289		$	10,778
	Adjustments to reconcile net earnings to net cash provided by operating activities:
		Depreciation and amortization			33,875			33,579			31,129
		Deferred income taxes			4,169			(432	)		5,132
		Deferred lease expense			296			791			837
		Allowance for related party note and interest receivable			5,409			—			—
		Loss on the disposal/write-down of assets			6,212			—			2,181
		Interest received on related party note receivable			938			—			380
		Interest accrued on related party note receivable			(537	)		(539	)		(528	)
		Other			1,344			(806	)		(782	)
		Changes in operating assets and liabilities:
			Decrease (increase) in receivables		32,177			(571	)		(23,330	)
			(Increase) decrease in inventories		(4,645	)		1,640			(6,685	)
			(Increase) decrease in prepaid expenses and other		(133	)		479			1,209
			(Decrease) increase in accounts payable		(24,206	)		(10,372	)		33,930
			(Decrease) increase in accrued expenses		(2,024	)		(1,566	)		5,548
Net cash provided by operating activities					65,256			29,492			59,799
Cash flows from investing activities:
	Purchases of property, plant and equipment				(57,056	)		(22,455	)		(46,361	)
	Purchases of other assets				(5,602	)		—			—
	Refinery acquisition contingent payment				(5,139	)		(5,442	)		(7,289	)
	Proceeds from sale of property, plant and equipment and other assets				7,889			4,473			2,288
Net cash used by investing activities					(59,908	)		(23,424	)		(51,362	)
Cash flows from financing activities:
	Proceeds of long-term debt				—			68,000			—
	Payments of long-term debt				(1,429	)		(68,347	)		(25,115	)
	Purchase of treasury stock				(3,674	)		(12,157	)		(6,113	)
	Deferred financing costs				(537	)		—			(56	)
	Proceeds from exercise of stock options				—			109			95
Net cash used by financing activities					(5,640	)		(12,395	)		(31,189	)
Net decrease in cash and cash equivalents					(292	)		(6,327	)		(22,752	)
	Cash and cash equivalents:
		Beginning of year			26,618			32,945			55,697
		End of year		$	26,326		$	26,618		$	32,945
Income taxes paid				$	4,675		$	4,060		$	2,099
Interest paid				$	24,135		$	24,458		$	24,176

     Significant Noncash Investing and Financing Activities. During 2001, the Company received 103,430 shares of its own common stock valued at approximately $1,107,000 from James E. Acridge, the Company’s former Chairman of the Board and Chief Executive Officer (the “CCEO”), as payment for the exercise by the CCEO of 126,601 common stock options. These shares were immediately cancelled. In addition, the Company repurchased, for cash, 59 service station/ convenience stores from FFCA Capital Holding Corporation (“FFCA”) for approximately $38,052,000 plus closing costs. These service station/ convenience stores had been sold to FFCA in a sale-leaseback transaction completed in December 1998. Certain deferrals on the Balance Sheet relating to the sale-leaseback transaction reduced the cost basis of the assets recorded in “Property, Plant and Equipment” by approximately $1,736,000. These deferrals included a deferred gain on the original sale to FFCA and deferred lease allocations included in “Other Liabilities and Deferred Income,” and deferred costs associated with the original sale included in “Other Assets.” During 2000, approximately $5,200,000 was incurred as a contingent payment related to the 1995 acquisition of the Bloomfield Refinery. This amount was adjusted downward in 2001 to $5,139,000, the amount that was actually paid. During 1999, the Company received 87,036 shares of its own common stock valued at approximately $975,000 from two officers of the Company as payment for the exercise of 108,857 common stock options. These shares were immediately cancelled. In addition, approximately $10,692,000 was incurred as a contingent payment related to the 1995 acquisition of the Bloomfield Refinery, of which $5,250,000 was paid in 1999 and $5,442,000 in 2000.

The accompanying notes are an integral part of these consolidated financial statements.

F-6

GIANT INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1 — Description of Business and Significant Accounting Policies:

Organization

      Giant Industries, Inc., a Delaware corporation, together with its subsidiaries, (“Giant” or the “Company”), through its wholly-owned subsidiary Giant Industries Arizona, Inc. and its subsidiaries (“Giant Arizona”), is engaged in the refining and marketing of petroleum products in New Mexico, Arizona, and Colorado, with a concentration in the Four Corners area where these states adjoin. In addition, Phoenix Fuel Co., Inc. (“Phoenix Fuel”), a wholly-owned subsidiary of Giant Arizona, operates an industrial/ commercial petroleum fuels and lubricants distribution operation.

Description of Business

      The Company operates primarily as an independent refiner and marketer of petroleum products. The Company’s principal business is the refining of crude oil into petroleum products which are sold through branded retail outlets as well as through distributors, industrial/ commercial accounts and major oil companies. The Company has two operating refineries in New Mexico. The Ciniza Refinery, with a crude oil throughput capacity of 20,800 barrels per day (“bpd”) and a total capacity including natural gas liquids of 26,000 bpd, is located near Gallup, New Mexico. The Bloomfield Refinery, with a crude oil throughput capacity of 16,000 bpd and a total capacity including natural gas liquids of 16,600 bpd, is located in Bloomfield, New Mexico.

      At December 31, 2001, the Company had 150 retail service station/ convenience stores and a travel center. These operations sell various grades of gasoline, diesel fuel, general merchandise and food products to the general public.

      In addition, through Phoenix Fuel, the largest independent petroleum products distributor in the state of Arizona, the Company distributes gasoline, diesel fuel and various lubricants to industrial and commercial accounts.

      (See Note 2 for a further discussion of business segments, Note 3 for recent acquisitions and dispositions, and Note 18 for the pending acquisition of the Yorktown Refinery.)

Principles of Consolidation

      The consolidated financial statements include the accounts of Giant and all of its subsidiaries. All significant intercompany accounts and transactions have been eliminated.

Use of Estimates in the Preparation of Financial Statements

      The preparation of the Company’s consolidated financial statements, in conformity with accounting principles generally accepted in the United States of America, requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Net Revenues

      Revenues are recognized from sales when product ownership is transferred to the customer. Excise and other similar taxes are excluded from net revenues.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Statements of Cash Flows

      All highly liquid instruments with an original maturity of three months or less are considered to be cash equivalents.

Derivatives

      The Company has in the past entered into futures or option contracts to hedge its exposure to price fluctuations on crude oil and refined products. For purposes of the Statement of Cash Flows, hedging transactions are considered to be operating activities.

      The Company from time to time speculates in the purchasing and selling of crude oil and finished products and may enter into futures, options and wet barrel contracts to speculate on price fluctuations in these commodities. These activities are transacted in accordance with policies established by the Company, which set limits on quantities, requires various levels of approval and requires certain review and reporting procedures. Gains and losses on all speculative transactions are reflected in earnings in the period that they occur.

      The Company had no open commodity futures or options contracts at December 31, 2001.

      On January 1, 2001, the Company adopted Statement of Financial Accounting Standards (“SFAS”) No. 133, “Accounting for Derivative Instruments and Hedging Activities,” as amended by SFAS No. 138, “Accounting for Certain Derivative Instruments and Certain Hedging Activities, an amendment to SFAS No. 133.” SFAS No. 133, as amended, establishes accounting and reporting standards for derivative instruments, including certain derivative instruments embedded in other contracts, and for hedging activities. It requires that entities record all derivatives as either assets or liabilities, measured at fair value, with any change in fair value recognized in earnings or in other comprehensive income, depending on the use of the derivative and whether it qualifies for hedge accounting. There was no effect on the Company’s financial position, results of operations or cash flows as a result of adopting SFAS No. 133.

Concentration of Credit Risk

      Credit risk with respect to customer receivables is concentrated in the geographic area in which the Company operates and relates primarily to customers in the oil and gas industry. To minimize this risk, the Company performs ongoing credit evaluations of its customers’ financial position and requires collateral, such as letters of credit, in certain circumstances. The Company maintained its cash and cash equivalents in federally insured banking institutions or other financial service providers.

Inventories

      Inventories are stated at the lower of cost or market. Costs for crude oil and refined products produced by the refineries, and the lubricants and other merchandise of Phoenix Fuel, are determined by the last-in, first-out (“LIFO”) method. Costs for retail, exchange and terminal refined products and shop supplies are determined by the first-in, first-out (“FIFO”) method. Costs for merchandise inventories at retail locations are determined by the retail inventory method.

Property, Plant and Equipment

      Property, plant and equipment are stated at cost and are depreciated on the straight-line method over their respective estimated useful lives.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

      The estimated useful lives for the various categories of property, plant and equipment are:

Buildings and improvements	7 – 30 years
Machinery and equipment	7 – 24 years
Pipelines	30 years
Furniture and fixtures	2 – 15 years
Vehicles	3 –  7 years

      Routine maintenance, repairs and replacement costs are charged against earnings as incurred. Turnaround costs, which consist of complete shutdown and inspection of significant units of the refineries at intervals of two or more years for necessary repairs and replacements, are deferred and amortized over the period until the next expected shutdown, which generally ranges from 24 to 48 months depending on the type of shutdown and the unit involved. Expenditures which materially increase values, expand capacities or extend useful lives are capitalized. Interest expense is capitalized as part of the cost of constructing major facilities and equipment.

      The American Institute of Certified Public Accountants has issued a “Statement of Position” exposure draft on cost capitalization that is expected to require companies to expense the non-capital portion of major maintenance costs as incurred. The statement is expected to require that any existing unamortized deferred non-capital major maintenance costs be expensed immediately. The exposure draft indicates that this change will be required to be adopted for fiscal years beginning after June 15, 2002, and that the effect of expensing existing unamortized deferred non-capital major maintenance costs will be reported as a cumulative effect of an accounting change in the consolidated statement of operations. At December 31, 2001, the Company had $12,769,000 of turnaround costs, classified as machinery and equipment, included in property, plant and equipment. Company management has not determined the amount, if any, of these costs that could be capitalized under the provisions of the exposure draft.

Goodwill

      Goodwill, which results from business acquisitions, represents the excess of the purchase price over the fair value of the net assets acquired and is carried at cost less accumulated amortization. Goodwill is amortized on the straight-line method over the period of expected benefit ranging from 15 to 30 years.

      Effective in 2002, the Company is required to adopt SFAS No. 142, “Goodwill and Other Intangible Assets.” This Statement requires, among other things, that goodwill not be amortized, but be tested for impairment. The provisions of the Statement apply to fiscal years beginning after December 15, 2001. Impairment losses for goodwill and indefinite-lived intangible assets that arise due to the initial application of this Statement (resulting from a transitional impairment test) must be reported as resulting from a change in accounting principle. At December 31, 2001, the Company had goodwill of $19,815,000, of which $14,722,000 related to the acquisition of Phoenix Fuel and $4,891,000 related to various retail acquisitions. The Company has not determined, but is in the process of evaluating, the impact that this new standard will have on its financial position and results of operations. See Note 19 for pro forma information excluding such goodwill amortization.

Long-Lived Assets

      In accordance with Statement of Financial Accounting Standards (“SFAS”) No. 121, “Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of ”, issued by the Financial Accounting Standards Board (“FASB”), the Company reviews the carrying values of its long-lived assets and identifiable intangibles for possible impairment whenever events or changes in circumstances indicate that the carrying amount of assets to be held and used may not be recoverable. For assets to be

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GIANT INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

disposed of, the Company reports long-lived assets and certain identifiable intangibles at the lower of carrying amount or fair value less cost to sell. (See Note 4)

      Effective in 2002, the Company is required to adopt SFAS No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets.” This Statement defines an impairment as “the condition that exists when the carrying amount of a long-lived asset (asset group) is not recoverable and exceeds its fair value.” It develops a single accounting model for the disposal of long-lived assets, whether previously held or newly acquired. This Statement applies to recognized long-lived assets of an entity to be held and used or to be disposed of, and applies to the entire group when a long-lived asset is a part of the group. A group is defined as the lowest level of operations with identifiable cash flows that are largely independent of the cash flows of other assets and liabilities. The Statement identifies the circumstances that apply when testing for recoverability, as well as other potential adjustments or revisions relating to recoverability. Specific guidance is provided for recognition and measurement and reporting and disclosure for long-lived assets held and used, disposed of other than by sale, and disposed of by sale. The Company has not determined, but is in the process of evaluating, the impact that this new standard will have on its financial position and results of operations.

Treasury Stock

      The Company’s Board of Directors has authorized the repurchase of up to 2,900,000 shares of the Company’s common stock. These purchases may be made from time to time as conditions permit. Shares may be repurchased through privately-negotiated transactions, block share purchases and open market transactions. Through the end of 2001, the Company had repurchased 2,582,566 shares under this program at a cost of approximately $25,716,000. These shares are being treated as treasury shares. In addition, the Company purchased 1,169,414 shares of its common stock, as treasury shares, for $9.00 per share, net to the sellers, through a Schedule 13E-4 Issuer Tender Offer completed on February 8, 2000.

Environmental Expenditures

      Environmental expenditures that relate to current operations are expensed or capitalized as appropriate. Expenditures that relate to an existing condition caused by past operations, and which do not contribute to current or future revenue generation, are expensed. Liabilities are recorded when environmental assessments and/or remedial efforts are probable and the costs can be reasonably estimated. Environmental liabilities are not discounted to their present value and are recorded without consideration of potential recoveries from third parties. Subsequent adjustments to estimates, which may be significant, may be made as more information becomes available or as circumstances change (See Note 16).

Income Taxes

      The provision for income taxes is based on earnings (loss) reported in the financial statements. Deferred income taxes are provided to reflect temporary differences between the basis of assets and liabilities for financial reporting purposes and income tax purposes, as well as the effects of tax credits.

Earnings Per Common Share

      Earnings per share are calculated in accordance with SFAS No. 128, “Earnings Per Share.” Basic earnings per common share are computed by dividing consolidated net earnings by the weighted average number of shares of common stock outstanding during each period. Earnings per common share assuming dilution is computed by dividing consolidated net earnings by the sum of the weighted average number of shares of common stock outstanding plus additional shares representing the exercise of outstanding common stock options using the treasury stock method, unless such calculation is antidilutive. (See Note 5.)

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GIANT INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

New Accounting Pronouncements

      In June 2001, the Company adopted SFAS No. 141, “Business Combinations.” This Statement requires, among other things, that the purchase method of accounting be used to account for all business combinations. The provisions of the Statement apply to all business combinations initiated after June 30, 2001, and to all business combinations accounted for using the purchase method for which the date of acquisition is July 1, 2001, or later. The Company has always used the purchase method of accounting for acquisitions and business combinations and does not anticipate that the application of SFAS No. 141 will have a material affect on the way the Company records acquisitions or business combinations. However, the Company does anticipate that more intangible assets will be recorded as a result of SFAS No. 141.

      In June 2001, the FASB issued SFAS No. 143, “Accounting for Asset Retirement Obligations.” This Statement addresses financial accounting and reporting for obligations associated with the retirement of tangible long-lived assets and the associated asset retirement costs. It applies to legal obligations associated with the retirement of long-lived assets that result from the acquisition, construction, development and/or the normal operation of a long-lived asset, except for certain obligations of lessees. As used in this Statement, a legal obligation is an obligation that a party is required to settle as a result of an existing or enacted law, statute, ordinance, or written or oral contract or by legal construction of a contract under the doctrine of promissory estoppel.

      SFAS No. 143 requires that the fair value of a liability for an asset retirement obligation be recognized in the period in which it is incurred if a reasonable estimate of fair value can be made. The associated asset retirement costs are capitalized as part of the carrying amount of the long-lived asset. Disclosure requirements include descriptions of asset retirement obligations and reconciliations of changes in the components of those obligations. This Statement is effective for financial statements issued for fiscal years beginning after June 15, 2002. The Company has not determined, but is evaluating the effect SFAS No. 143 will have relative to its refining and marketing assets.

Other Comprehensive Income

      For the years ended December 31, 2001, December 31, 2000, and December 31, 1999, respectively, the only component of other comprehensive income is net income as reported on the Company’s Consolidated Statements of Earnings.

Reclassifications

      Certain reclassifications have been made to prior years’ consolidated financial statements to conform to the statement classifications used in the current year. These reclassifications had no effect on reported earnings or stockholders’ equity.

Note 2 — Business Segments:

      The Company is organized into three operating segments based on manufacturing and marketing criteria. These segments are the Refining Group, the Retail Group and Phoenix Fuel. A description of each segment and principal products and operations are as follows:

•  Refining Group: The Refining Group consists of the Company’s two refineries, its fleet of crude oil and finished product truck transports, its crude oil pipeline gathering operations, and its finished product terminaling operations. The Company’s two refineries manufacture various grades of gasoline, diesel fuel, and other products from crude oil, other feedstocks and blending components. In addition, finished products are acquired through exchange agreements, from third party suppliers, and from Phoenix Fuel. These products are sold through Company-operated retail facilities, independent wholesalers and retailers, industrial/ commercial accounts, and sales and exchanges with major oil

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GIANT INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

	companies. Crude oil, other feedstocks, and blending components are purchased from third party suppliers.
•	Retail Group: The Retail Group consists of service station/convenience stores and one travel center. These operations sell various grades of gasoline, diesel fuel, general merchandise and food products to the general public through retail locations. The Refining Group or Phoenix Fuel supplies the petroleum fuels sold by the Retail Group. General merchandise and food products are obtained from third party suppliers.
•	Phoenix Fuel: Phoenix Fuel is an industrial/commercial petroleum fuels and lubricants distribution operation, which includes a number of bulk distribution plants, an unattended fleet fueling (“cardlock”) operation and a fleet of finished product truck transports. The petroleum fuels and lubricants sold are primarily obtained from third party suppliers and to a lesser extent from the Refining Group.

      Operations that are not included in any of the three segments are included in the category “Other.” These operations consist primarily of corporate staff operations, including selling, general, and administrative expenses.

      Operating income for each segment consists of net revenues less cost of products sold, operating expenses, depreciation and amortization and the segment’s selling, general, and administrative expenses. The sales between segments are made at market prices. Cost of products sold reflects current costs adjusted, where appropriate, for LIFO and lower of cost or market inventory adjustments.

      The total assets of each segment consist primarily of net property, plant and equipment, inventories, accounts receivable and other assets directly associated with the segment’s operations. Included in the total assets of the corporate staff operations are a majority of the Company’s cash and cash equivalents, various accounts receivable, net property, plant and equipment and other long-term assets.

      Disclosures regarding the Company’s reportable segments with reconciliations to consolidated totals are presented below.

				As of and for the Year Ended December 31, 2001
				Refining		Retail		Phoenix					Reconciling
				Group		Group		Fuel		Other			Items			Consolidated
				(In thousands)
Customer net revenues:
	Finished products			$	257,636	$	228,533	$	284,430	$	—		$	—		$	770,599
	Merchandise and lubricants				—		144,531		24,555		—			—			169,086
	Other				9,373		17,315		2,062		244			—			28,994
		Total			267,009		390,379		311,047		244			—			968,679
Intersegment net revenues:
	Finished products				166,546		—		80,125		—			(246,671	)		—
	Other				16,671		—		—		—			(16,671	)		—
		Total			183,217		—		80,125		—			(263,342	)		—
			Total net revenues	$	450,226	$	390,379	$	391,172	$	244		$	(263,342	)	$	968,679
Operating income (loss)				$	66,148	$	5,214	$	4,731	$	(21,927	)	$	(11,621	)	$	42,545
Interest expense																	(24,098	)
Interest income																	1,661
Earnings before income taxes																$	20,108
Depreciation and amortization				$	16,463	$	12,709	$	2,696	$	2,007		$	—		$	33,875
Capital expenditures				$	13,310	$	41,337	$	985	$	1,424		$	—		$	57,056
Total assets				$	228,403	$	165,176	$	65,539	$	48,056		$	—		$	507,174

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

				As of and for the Year Ended December 31, 2000
				Refining		Retail		Phoenix					Reconciling
				Group		Group		Fuel		Other			Items			Consolidated
				(In thousands)
Customer net revenues:
	Finished products			$	280,525	$	267,201	$	334,122	$	—		$	—		$	881,848
	Merchandise and lubricants				—		138,543		26,662		—			—			165,205
	Other				9,159		15,595		2,188		367			—			27,309
		Total			289,684		421,339		362,972		367			—			1,074,362
Intersegment net revenues:
	Finished products				212,957		—		80,252		—			(293,209	)		—
	Other				15,531		—		—		—			(15,531	)		—
		Total			228,488		—		80,252		—			(308,740	)		—
			Total net revenues	$	518,172	$	421,339	$	443,224	$	367		$	(308,740	)	$	1,074,362
Operating income (loss)				$	45,790	$	31	$	7,275	$	(19,337	)	$	—		$	33,759
Interest expense																	(24,411	)
Interest income																	1,989
Earnings before income taxes																$	11,337
Depreciation and amortization				$	17,138	$	11,528	$	2,554	$	2,359		$	—		$	33,579
Capital expenditures				$	6,850	$	13,470	$	1,413	$	722		$	—		$	22,455
Total assets				$	244,947	$	148,992	$	82,084	$	52,542		$	—		$	528,565

				As of and for the Year Ended December 31, 1999
				Refining		Retail		Phoenix					Reconciling
				Group		Group		Fuel		Other			Items			Consolidated
				(In thousands)
Customer net revenues:
	Finished products			$	180,277	$	206,485	$	225,199	$	—		$	—		$	611,961
	Merchandise and lubricants				—		118,895		24,150		—			—			143,045
	Other				10,263		13,185		3,552		677			—			27,677
		Total			190,540		338,565		252,901		677			—			782,683
Intersegment net revenues:
	Finished products				180,933		—		19,784		—			(200,717	)		—
	Other				16,827		—		—		—			(16,827	)		—
		Total			197,760		—		19,784		—			(217,544	)		—
			Total net revenues	$	388,300	$	338,565	$	272,685	$	677		$	(217,544	)	$	782,683
Operating income (loss)				$	51,323	$	3,790	$	8,549	$	(23,878	)	$	(2,387	)	$	37,397
Interest expense																	(23,417	)
Interest income																	2,476
Earnings before income taxes																$	16,456
Depreciation and amortization				$	15,615	$	9,270	$	2,273	$	3,971		$	—		$	31,129
Capital expenditures				$	8,419	$	33,235	$	1,984	$	2,723		$	—		$	46,361
Total assets				$	252,356	$	146,110	$	79,731	$	68,602		$	—		$	546,799

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GIANT INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Note 3 — Acquisitions and Dispositions:

      In December 1998, the Company and FFCA Capital Holding Corporation (“FFCA”) completed a sale-leaseback transaction. Under the terms of the Sale and Lease Agreement (the “Agreement”), FFCA purchased 83 service station/convenience stores from the Company for approximately $51,763,000. The Company in turn leased the 83 service station/convenience stores back from FFCA under an operating lease arrangement with an initial term of 15 years and three separate options to continue the lease for successive periods of five years. In the second half of 1999, the Company reacquired 24 of the service station/convenience stores for approximately $13,711,000, which was the original selling price of these properties. In the second quarter of 2001, FFCA approached the Company to determine whether the Company had any interest in acquiring the remaining 59 service station/convenience stores. Subsequently, in July 2001, the Company repurchased, for cash, the 59 service station/convenience stores for approximately $38,052,000, which was the original selling price of these properties, plus closing costs. Certain deferrals on the Balance Sheet relating to the sale-leaseback transaction reduced the cost basis of the assets recorded in “Property, Plant and Equipment” by approximately $1,736,000. These deferrals included a deferred gain on the original sale to FFCA and deferred lease allocations included in “Other Liabilities and Deferred Income,” and deferred costs associated with the original sale included in “Other Assets.” Lease expense related to these assets totaled $2,610,000 for 2001, $4,556,000 for 2000, and $4,556,000 for 1999. Depreciation expense related to these same assets totaled $2,937,000 in 2001, $1,499,000 in 2000, and $627,000 in 1999. For 2002, depreciation expense is estimated to be approximately $4,137,000 based on depreciation expense recorded in January 2002. This amount could change depending on the sale of any of these assets. The original total base rent payments under the FFCA sale-leaseback transaction, included scheduled increases of six percent on the second anniversary of the Agreement and every second anniversary thereafter, on a compounded basis during the initial lease term and any extension thereof. At December 31, 2000, the Company had recorded a deferred credit of approximately $1,628,000 to reflect the excess of rent expense over cash payments made. This deferred credit is included in “Other Liabilities and Deferred Income” in the Company’s Consolidated Balance Sheet at December 31, 2000. The Company had recorded a gain of approximately $5,650,000 on the original transaction, which was deferred and was being amortized over the initial lease period of 15 years. This deferred gain was reduced to $990,000 at December 31, 2000, as the result of the 1999 repurchase and annual amortization. The deferred gain is reflected in “Other Liabilities and Deferred Income” in the Company’s Consolidated Balance Sheet at December 31, 2000. The amounts recorded for deferred credits and deferred gain were used to reduce the cost basis of the 59 units repurchased in 2001, as described above.

      In October 1995, the Company completed the purchase of the Bloomfield Refinery along with related pipeline and transportation assets for $55,000,000 from Gary-Williams Energy Co. and its wholly-owned subsidiary, Bloomfield Refining Company (“BRC”). The purchase agreement provided for potential contingent payments to be made to BRC over approximately six years from the acquisition date of approximately $35,000,000, not to exceed a net present value of $25,000,000 as of October 1995, should certain criteria be met. These contingent payments were considered to be additional purchase price and were allocated to the assets acquired in the same proportions as the original purchase price was allocated, not to exceed the estimated current replacement cost, and amortized over the estimated remaining life of the assets. For 2000, the Company accrued $5,200,000 in accordance with the purchase agreement relating to 2000 operations. This amount was adjusted downward in 2001 to $5,139,000, which amount was paid. This payment represented the final amount due under the purchase agreement. For 1999, the Company paid approximately $5,250,000 and had accrued an additional $5,442,000 at December 31, 1999, relating to 1999 operations. In addition, the Company accrued $2,250,000 in 1996 relating to certain environmental obligations assumed in the purchase, which amount was also considered to be additional purchase price.

      Refer to Note 18 for a discussion of the pending acquisition of the Yorktown Refinery.

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GIANT INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Note 4 — Loss on the Disposal/ Write-Down of Assets:

      For the year ended December 31, 2001, the Company recorded a pre-tax loss on the disposal/write-down of assets of $6,212,000. This amount included losses of $609,000 on the sale of assets in the ordinary course of business, primarily related to the sale of 11 service station/convenience stores; losses of $2,719,000 on the write-down of assets due to impairment, resulting from the application of Statement of Financial Accounting Standard (“SFAS”) No. 121 due to a strategy to sell certain service station/convenience stores, some of which were closed; losses of $592,000 relating to the value of leasehold improvements included in leased service station/convenience stores returned to the lessors; and losses of $2,292,000 primarily related to the retirement or replacement of certain refinery property, plant, and equipment.

      As a result of the Company’s ongoing retail asset evaluation initiated in 2001, the Company identified 60 non-strategic or underperforming units for possible divestiture. Eight of these units were subsequently removed from the list due to improved performance. Of the remaining units, 11 were sold, six were closed and reclassified as assets held for sale, one leased unit was returned to the lessor, and four are in escrow and are expected to close in the second quarter of 2002. The remaining 30 stores continue to be operated by the Company, but are being marketed for potential sale in accordance with the Company’s strategy, and may be divested if acceptable offers are received and negotiated during 2002.

      In addition, 12 other units were closed in 2001. Seven of these units were classified as assets held for sale, three leased units were returned to the lessors, and the Company is attempting to sublease two others.

      In 2001, the Company also recorded a reserve totaling $5,409,000 related to a note and accrued interest receivable from a related party. For a further discussion of this matter refer to Note 6.

Note 5 — Earnings Per Share:

      The following is a reconciliation of the numerators and denominators of the basic and diluted per share computations for earnings as required by SFAS No. 128:

		Year Ended December 31,
		2001						2000						1999
						Per						Per						Per
		Earnings		Shares		Share		Earnings		Shares		Share		Earnings		Shares		Share
		(Numerator)		(Denominator)		Amount		(Numerator)		(Denominator)		Amount		(Numerator)		(Denominator)		Amount
Earnings per common share — basic:
	Earnings	$	12,381,000		8,871,006	$	1.40	$	7,289,000		9,214,470	$	0.79	$	10,778,000		10,678,773	$	1.01
	Effect of dilutive stock options				14,128						8,950						40,084
Earnings per common share — assuming dilution:
	Earnings	$	12,381,000		8,885,134	$	1.39	$	7,289,000		9,223,420	$	0.79	$	10,778,000		10,718,857	$	1.01

      In October 2001, the Company’s Board of Directors (the “Board”) directed the Company to purchase 400,000 shares of its common stock under its stock repurchase program from the CCEO for $3,520,000 or $8.80 per share. This was the closing price of the Company’s common stock on the New York Stock Exchange on the date that the conditions to purchase set by the Board were satisfied, including the receipt of necessary bank waivers and consents.

      At December 31, 2001 and 2000, there were 8,553,879 and 8,948,008 shares, respectively, of the Company’s common stock outstanding.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

      There were no transactions subsequent to December 31, 2001, that if the transactions had occurred before December 31, 2001, would materially change the number of common shares or potential common shares outstanding as of December 31, 2001.

Note 6 — Related Party Transactions:

      The Company loaned $4,000,000 to James E. Acridge, its former Chairman and Chief Executive Officer (the “CCEO”) on September 17, 1998 (the “Loan”). The Loan was originally evidenced by an unsecured promissory note bearing interest at the prime rate published by the Wall Street Journal on September 17, 1998 (the “Prime Rate”) plus 2%. Principal and accrued interest were due and payable in one lump sum on February 28, 1999. On December 23, 1998, the Company and the CCEO entered into a revised loan agreement. The amount of the Loan was increased to $5,000,000, the Loan’s interest rate was increased to the Prime Rate plus 3%, and the Loan’s maturity date was extended to February 28, 2001. An initial interest payment was made on February 28, 1999 for interest due through December 31, 1998. Subsequent interest was due and payable semi-annually on June 30 and December 31 of each year.

      The Loan was modified again on March 10, 2000. The terms of the Loan were revised so that all principal and interest, including interest that otherwise would have been payable on December 31, 1999, became due and payable on February 28, 2001. As security for the modified loan, the Company received a pledge by an entity owned by the CCEO (the “LLC”) of a 49% equity interest in an entity that owns certain real property in north Scottsdale, Arizona (the “Real Property”). The loan was further modified on February 28, 2001 to extend the Loan’s maturity date to March 28, 2001. This modification reflected the fact that the Company’s purchase of a parcel of land from a trust of which the CCEO was the beneficiary had not closed. A portion of the proceeds of this sale was used to pay the interest that became due and payable under the Loan on February 28, 2001. On March 21, 2001, the Company’s Board of Directors (the “Board”) approved an additional two-year extension of the Loan’s maturity date, making all principal and interest due and payable on March 28, 2003. This extension was conditioned upon, among other things, the CCEO’s payment of all interest due and payable on March 28, 2001, which was paid. In return for the extension of the Loan, the CCEO provided additional security for the Loan by pledging all of his equity interest in the LLC.

      The Company is aware of prior liens on the Real Property and on certain of the collateral pledged to the Company (the “Prior Liens”) that relate to loans entered into by the LLC (the “LLC Loans”). The Company also understands that the CCEO has personally guaranteed the LLC Loans. On July 18, 2001, the Board was advised that the LLC was not able to make the monthly payment due and owing to its lenders (the “Lenders”) in the month of July. The Board was asked to make such payment, in the amount of $240,833, on behalf of the CCEO for the benefit of the LLC. The Board authorized the Company to make the July payment in order to avoid a default under the LLC Loans. The Company also has been advised that the LLC did not make, when due, the monthly payment due and owing to the Lenders in December 2001 (the “December Payment”). The Company understands that a letter agreement was entered into with the Lenders, in which the Lenders agreed to forbear from exercising certain rights and remedies available to them in connection with the December payment if certain terms and conditions were satisfied (the “Forbearance Letter”). The Company further understands that, in connection with the Forbearance Letter, the CCEO pledged 29,622 shares of the Company’s common stock owned by him to the Lenders as additional collateral.

      The LLC’s failure to make the December Payment when due constitutes a default under the terms of the Loan. The Company has been advised that the CCEO also is in default under a provision of the Loan that addresses the CCEO’s failure to discharge when due all sums owed under any loan secured by a stock pledge.

      In view of recent events, including the CCEO’s defaults under the terms of the Loan and the failure of a limited liability company controlled by the CCEO to pay rent in connection with space subleased to the limited liability company by the Company, the Company has evaluated the collectability of the Loan. The

F-16

GIANT INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

limited liability company’s sublease and certain associated litigation is further discussed in Note 16. The Company has reviewed financial information requested from the CCEO, including a personal financial statement and 2000 tax returns for the CCEO and certain of his material affiliated entities. It has also obtained an appraisal of the Real Property and conducted a search of public records for third party claims evidenced by filed litigation and liens.

      The Company believes that the Yorktown Refinery acquisition will constrain the Company’s ability to obtain waivers or other approvals in connection with restrictive covenants contained in the Company’s $65,000,000 secured Credit Agreement that may be applicable to certain courses of action potentially available to the Company in connection with the collateral for the Loan. Restrictive covenants in the Indenture supporting the Company’s senior subordinated notes due 2003 and in the Indenture supporting the Company’s senior subordinated notes due 2007 also could constrain the Company’s ability to take certain actions. It is possible that the Company will not be able to recover all or any of the amounts due and owing from the CCEO as a result of such restrictive covenants. Accordingly, in view of the Company’s evaluation of the Loan’s collectability, under generally accepted accounting principles, it is appropriate to record a financial reserve in the full amount of the Loan, including interest accrued through December 31, 2001, and such a reserve totaling $5,409,000 has been recorded as of December 31, 2001. The Company is aware that the CCEO is pursuing a number of potential transactions that may provide him with funds to satisfy his obligations under the Loan. In the event that certain of these transactions occur, the Company will reevaluate its reserve.

      On January 25, 2001, the Board accepted an offer from the CCEO, on behalf of a trust of which the CCEO is the beneficiary, to sell a parcel of land (the “Jomax Property”) to the Company for the lesser of $5,000,000 or the Jomax Property’s appraised value. In March 2001, the Jomax Property was sold to the Company for $5,000,000. The trust had an option, exercisable for a period of two years, to repurchase the property at the greater of the amount paid by the Company to purchase the property or the property’s appraised value. The trust also had a right of first refusal, exercisable for a period of two years, to repurchase the property on the same terms as contained in a bona fide offer from a bona fide purchaser. On September 20, 2001, the Board directed the Company to purchase the trust’s option and right of first refusal (collectively, the “Rights”) for $600,000, and the Rights were subsequently sold to the Company for this price. At the time of the sale, the Company was negotiating with a potential purchaser for the sale of the Jomax Property for a price in excess of the Company’s purchase price. The potential purchaser was requiring the Company to represent in the purchase and sale agreement that there were no effective options to purchase, or rights of first refusal, affecting the property. The Company’s purchase of the Rights would have enabled the Company to make this representation and would have avoided any other complications associated with the Rights that potentially could have affected the sale. The potential purchaser subsequently advised the Company that it was discontinuing negotiations regarding the possible sale because general market and economic conditions, coupled with the financial uncertainties arising out of the events that occurred on September 11, 2001, had severely depressed the real estate market. Although the potential purchaser re-approached the Company during the first quarter of 2002 about purchasing the property, the Company is exploring other alternatives.

      In the third quarter of 2001, the Board directed the transfer to the CCEO of a life insurance policy on his life with a cash surrender value of $251,078. This policy and life insurance policies for another executive had been issued prior to the Company’s going public in 1989. In connection with its determination that the policy should be transferred to the CCEO, the Board considered historical information and other relevant matters relating to the policy, including the fact that several life insurance policies on the other executive’s life had previously been transferred to that executive. The cash value of the life insurance policy was considered compensation to the CCEO for tax purposes in 2001. The $251,078 cash surrender value recorded on the Company’s books was expensed by the Company in the third quarter and is included in selling, general and administrative expenses (“SG&A”).

F-17

GIANT INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

      In the third quarter of 2001, the CCEO submitted statements to the Company for reimbursement of certain expenditures made by the CCEO on behalf of the Company in the current year and prior years for which the CCEO had not previously been reimbursed. In August 2001, the Company reimbursed the CCEO $204,293 in connection with such statements. This amount was considered compensation to the CCEO for tax purposes in 2001. The $204,293 was expensed by the Company in the third quarter and is included in SG&A.

      As described above, the payment of $240,833 made on behalf of the CCEO was expensed by the Company in the third quarter of 2001. This amount was considered compensation to the CCEO for tax purposes in 2001 and is included in SG&A.

      During 2001, the Board directed the Company to repurchase 400,000 shares of its common stock from the CCEO for $3,520,000 or $8.80 per share. This was the closing price of the Company’s common stock on the New York Stock Exchange on the date that the conditions to purchase set by the Board were satisfied, including the receipt of necessary bank waivers and consents. The Board directed the Company to purchase these shares under the stock repurchase program. The repurchased shares are treated as treasury shares. In addition, the Board authorized the purchase of artwork from the CCEO for display in the corporate headquarters. The artwork was purchased at its appraised value of $162,550. A substantial portion of the artwork had been displayed in the Company’s corporate office for up to ten years without any financial consideration being provided to the CCEO for its use. The proceeds of the artwork transaction were used by the CCEO to pay balances due on certain amounts owed to Giant Arizona by the CCEO and by entities controlled by the CCEO.

      During 2000, the Company repurchased 129,466 shares of its common stock under its stock repurchase program from the CCEO for $896,887 or $7.00 per share for 99,466 shares and $6.6875 per share for 30,000 shares. The per share price paid for the shares was the low price reported for the Company’s common stock on the New York Stock Exchange on the dates the purchases were made. All of the repurchased shares are treated as treasury shares. In addition, the Company’s Board of Directors authorized the purchase of artwork from the CCEO for display at the Company’s headquarters building. The artwork was purchased at its appraised value of approximately $450,000. A substantial portion of the artwork had been displayed in the Company’s corporate office for up to ten years without any financial consideration being provided to the CCEO for its use.

      During 1999, the Company repurchased 440,000 shares of its common stock under its stock repurchase program from the CCEO for $4,950,000 or $11.25 per share. The per share price paid for the shares was at a discount to the then current fair market value. The repurchased shares are treated as treasury shares.

      All of the material foregoing transactions were reviewed and approved by the Board or committees of the Board.

F-18

GIANT INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Note 7 — Inventories:

      Inventories consist of the following:

			December 31,
			2001			2000
			(In thousands)
First-in, first-out (“FIFO”) method:
	Crude oil		$	12,835		$	17,420
	Refined products			21,982			24,679
	Refinery and shop supplies			8,111			10,829
	Merchandise			3,928			3,882
Retail method:
	Merchandise			9,179			8,737
		Subtotal		56,035			65,547
Adjustment for last-in, first-out (“LIFO”) method				5,996			(8,940	)
Allowance for lower of cost or market				(3,302	)		—
		Total	$	58,729		$	56,607

      The portion of inventories valued on a LIFO basis totaled $30,872,000 and $28,319,000 at December 31, 2001 and 2000, respectively. The data in the following paragraph will facilitate comparison with the operating results of companies using the FIFO method of inventory valuation.

      If inventories had been determined using the FIFO method at December 31, 2001, 2000 and 1999, net earnings and diluted earnings per share for the years ended December 31, 2001, 2000 and 1999 would have been (lower) higher by $(6,981,000) and $(0.79), $2,935,000 and $0.32, and $4,408,000 and $0.41, respectively.

      In 2001, cost of products sold were increased by approximately $3,302,000 as a result of a reduction in the carrying value of inventories related to a decline in crude oil and refined product prices.

      For the year 2001, certain lower cost refinery LIFO inventory layers were liquidated resulting in an increase in 2001 earnings of approximately $139,000 or $0.02 per share.

      For the year 2000, certain lower cost Phoenix Fuel LIFO inventory layers were liquidated resulting in an increase in 2000 earnings of approximately $1,042,000 or $0.11 per share.

      For the year 1999, certain higher cost refinery LIFO inventory layers were liquidated resulting in a reduction of 1999 earnings of approximately $1,531,000 or $0.14 per share.

F-19

GIANT INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Note 8 — Property, Plant and Equipment:

      Property, plant and equipment, at cost, consist of the following:

		December 31,
		2001			2000
		(In thousands)
Land and improvements		$	38,139		$	31,681
Buildings and improvements			136,478			123,941
Machinery and equipment			291,614			291,250
Pipelines			11,560			10,761
Furniture and fixtures			29,544			25,822
Vehicles			7,874			8,503
Construction in progress			10,136			16,426
	Subtotal		525,345			508,384
Accumulated depreciation and amortization			(201,823	)		(192,234	)
	Total	$	323,522		$	316,150

Note 9 — Accrued Expenses:

      Accrued expenses are comprised of the following:

		December 31,
		2001		2000
		(In thousands)
Excise taxes		$	12,200	$	13,787
Bloomfield Refinery acquisition contingent payment			—		5,200
Payroll and related costs			6,941		7,320
Bonus, profit sharing and retirement plans			6,566		3,162
Interest			5,681		5,719
Other			5,149		8,828
	Total	$	36,537	$	44,016

Note 10 — Long-Term Debt:

      Long-term debt consists of the following:

		December 31,
		2001			2000
		(In thousands)
9% senior subordinated notes, due 2007, interest payable semi-annually		$	150,000		$	150,000
9 3/4% senior subordinated notes, due 2003, interest payable semi-annually			100,000			100,000
Capital lease obligations, 11.3%, due through 2007, interest payable monthly			6,703			7,917
Other			91			305
	Subtotal		256,794			258,222
Less current portion			(45	)		(213	)
	Total	$	256,749		$	258,009

F-20

GIANT INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

      Repayment of the Notes is jointly and severally guaranteed on an unconditional basis by the Company’s direct and indirect wholly-owned subsidiaries, subject to a limitation designed to ensure that such guarantees do not constitute a fraudulent conveyance. Except as otherwise allowed in the Indentures pursuant to which the Notes were issued, there are no restrictions on the ability of such subsidiaries to transfer funds to the Company in the form of cash dividends, loans or advances. General provisions of applicable state law, however, may limit the ability of any subsidiary to pay dividends or make distributions to the Company in certain circumstances.

      Separate financial statements of the Company’s subsidiaries are not included herein because the aggregate assets, liabilities, earnings and equity of the subsidiaries are substantially equivalent to the assets, liabilities, earnings and equity of the Company on a consolidated basis; the subsidiaries are jointly and severally liable for repayment of the Notes; and the separate financial statements and other disclosures concerning the subsidiaries are not deemed material to investors.

      The Indentures supporting the Notes contain restrictive covenants that, among other things, restrict the ability of the Company and its subsidiaries to create liens, to incur or guarantee debt, to pay dividends, to repurchase shares of the Company’s common stock, to sell certain assets or subsidiary stock, to engage in certain mergers, to engage in certain transactions with affiliates or to alter the Company’s current line of business. In addition, subject to certain conditions, the Company is obligated to offer to purchase a portion of the Notes at a price equal to 100% of the principal amount thereof, plus accrued and unpaid interest, if any, to the date of purchase, with the net cash proceeds of certain sales or other dispositions of assets. Upon a change of control, the Company would be required to offer to purchase all of the Notes at 101% of the principal amount thereof, plus accrued interest, if any, to the date of purchase. At December 31, 2001, retained earnings available for dividends under the most restrictive terms of the Indentures were approximately $7,128,000.

      On December 23, 1998, the Company entered into a $65,000,000 secured Credit Agreement (the “Credit Agreement”) that was to expire December 23, 2001, with a group of banks including Bank of America, N.A. as lead bank and administrative agent. On December 19, 2001, this Credit Agreement was extended until November 14, 2003, under substantially the same terms and conditions. This Credit Agreement, a revolving loan agreement, is primarily a working capital and letter of credit facility and is secured by eligible accounts receivable and inventories as defined in the Credit Agreement. The Credit Agreement also allows the Company to borrow up to $10,000,000 for other acquisitions as defined in the Credit Agreement. The availability of funds under this facility is the lesser of (i) $65,000,000, or (ii) the amount determined under a borrowing base calculation tied to the eligible accounts receivable and inventories. At December 31, 2001, the availability of funds under the Credit Agreement was $57,215,000. The borrowing base is less than $65,000,000 primarily due to lower selling prices and sales volumes that affected eligible accounts receivable, and reduced inventory valuations that affected eligible inventories. There were no direct borrowings outstanding under this facility at December 31, 2001, and there were approximately $4,258,000 of irrevocable letters of credit outstanding, primarily to insurance companies and regulatory agencies.

      The interest rate applicable to the Credit Agreement is tied to various short-term indices. At December 31, 2001, this rate was approximately 4% per annum. The Company is required to pay a quarterly commitment fee ranging from 0.325% to 0.500% per annum of the unused amount of the facility. The exact rate depends on meeting certain conditions in the Credit Agreement.

      The Credit Agreement contains certain restrictive covenants, which require the Company to, among other things, maintain a minimum consolidated net worth, a minimum interest coverage ratio, and a maximum capitalization ratio. It also places limits on investments, dispositions of assets, prepayments of senior subordinated debt, guarantees, liens and restricted payments. The Credit Agreement is guaranteed by certain of the Company’s direct and indirect wholly-owned subsidiaries.

F-21

GIANT INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

      In connection with the acquisition of the Yorktown Refinery, the Company expects to replace the Credit Agreement with a new and larger credit facility.

      In 1997, as part of the acquisition of certain service station/convenience stores, the Company leased 64 service station/convenience stores for a period of 10 years with options to purchase the assets during the ten-year period for approximately $22,904,000. These leases were accounted for as capital leases. At December 31, 2001, six stores remained to be purchased and continue to be leased under the original terms. One of these stores is a grocery store and does not sell gasoline. The Company intends to purchase the six stores pursuant to options to purchase during the remaining lease period for approximately $6,700,000, of which $2,000,000 has been paid in advance and is recorded in “Other Assets” in the Company’s Consolidated Balance Sheet. The remaining lease obligations of approximately $6,700,000 are being accounted for as capital leases and require annual lease payments of approximately $753,000, all of which are recorded as interest expense. Assets associated with these lease obligations of approximately $7,601,000 are included in property, plant and equipment. Accumulated depreciation as of December 31, 2001 of approximately $3,079,000 is related to these assets. Assets of $580,000, primarily liquor licenses, are included in other assets.

      Aggregate annual maturities of long-term debt as of December 31, 2001 are: 2002 — $45,000; 2003 — $100,029,000; 2004 — $17,000; 2005 — $0; 2006 — $0; and all years thereafter — $156,703,000.

Note 11 — Financial Instruments and Hedging Activity:

      The following disclosure of the estimated fair value of financial instruments is made in accordance with the requirements of SFAS No. 107, “Disclosures about Fair Value of Financial Instruments,” as amended by SFAS No. 133. The Company, using available market information and valuation methodologies described below, determined the estimated fair value amounts. Considerable judgment is required, however, in interpreting market data to develop the estimates of fair value. Accordingly, the estimates presented herein may not be indicative of the amounts that the Company could realize in a current market exchange. The use of different market assumptions or valuation methodologies may have a material effect on the estimated fair value amounts.

      The carrying amounts and estimated fair values of the Company’s financial instruments are as follows:

		December 31,
		2001				2000
		Carrying		Estimated		Carrying		Estimated
		Amount		Fair Value		Amount		Fair Value
				(In thousands)
Balance Sheet — Financial Instruments:
	Fixed rate long-term debt	$	250,091	$	244,633	$	250,305	$	229,256

      The fair value of fixed rate long-term debt was determined using quoted market prices, where applicable, or estimated by discounting future cash flows using rates estimated to be currently available for debt of similar terms and remaining maturities.

      The carrying values of cash and cash equivalents, receivables, accounts payable and accrued expenses approximate fair values due to the short-term maturities of these instruments. Variable rate long-term debt instruments are estimated to approximate fair values as rates are tied to short-term indices.

      The Company also has a $5,000,000 long-term note receivable with a related party. This note was fully reserved for at December 31, 2001.

F-22

GIANT INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Hedging Activities

      From time to time, the Company enters into futures and options contracts to reduce price volatility, to fix margins in its refining and marketing operations and to protect against price declines for inventory volumes.

      At December 31, 2001 and 2000, the Company had no hedging transactions in place.

      Gains and losses from market changes on contracts not qualifying for hedge accounting are recognized immediately in operations. For 2001, 2000 and 1999 the Company incurred losses of $10,000, $471,000 and $306,000, respectively, related to these activities.

Note 12 — Income Taxes:

      The provision (benefit) for income taxes is comprised of the following:

	Year Ended December 31,
	2001			2000			1999
	(In thousands)
Current: Federal	$	2,978		$	4,292		$	532
State		579			188			14
Deferred: Federal		4,184			(628	)		3,412
State		(14	)		196			1,720
	$	7,727		$	4,048		$	5,678

      Income taxes paid in 2001, 2000 and 1999 were $4,675,000, $4,060,000, and $2,099,000, respectively.

      A reconciliation of the difference between the provision for income taxes and income taxes at the statutory U.S. federal income tax rate is as follows:

		Year Ended December 31,
		2001		2000			1999
		(In thousands)
Income taxes at the statutory U.S. federal income tax rate of 35%		$	7,038	$	3,968		$	5,760
Increase (decrease) in taxes resulting from:
	State taxes, net		470		301			795
	Resolution of tax matters		—		—			(320	)
	Nonconventional fuel credits, net		—		(249	)		—
	General business credits, net		—		—			(205	)
	Other, net		219		28			(352	)
		$	7,727	$	4,048		$	5,678

F-23

GIANT INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

      Deferred income taxes are provided to reflect temporary differences in the basis of net assets for income tax and financial reporting purposes, as well as available tax credit carryforwards. The tax effected temporary differences and credit carryforwards which comprise deferred taxes are as follows:

		December 31, 2001									December 31, 2000
		Assets			Liabilities			Total			Assets			Liabilities			Total
		(In thousands)
Nondeductible accruals for uncollectible receivables		$	156		$	—		$	156		$	70		$	—		$	70
Insurance accruals			672			—			672			627			—			627
Insurance settlements			(94	)		—			(94	)		902			—			902
Contribution carryover			897			—			897			—			—			—
Other reserves			1,009			—			1,009			1,246			—			1,246
Inventory costs capitalized for income tax purposes			(211	)		—			(211	)		(92	)		—			(92	)
Nondeductible accrual for lower of cost or market adjustment to inventory			1,306			—			1,306			—			—			—
	Total current		3,735			—			3,735			2,753			—			2,753
Other nondeductible accruals			1,101			(98	)		1,003			980			(195	)		785
Accelerated plant costs			—			(1,660	)		(1,660	)		—			(135	)		(135	)
Deferred lease payments			—			—			—			645			—			645
Accelerated depreciation			—			(41,575	)		(41,575	)		—			(42,734	)		(42,734	)
Other			1,978			(877	)		1,101			—			(665	)		(665	)
Tax credit carryforwards			8,359			—			8,359			14,483			—			14,483
	Total noncurrent		11,438			(44,210	)		(32,772	)		16,108			(43,729	)		(27,621	)
Total		$	15,173		$	(44,210	)	$	(29,037	)	$	18,861		$	(43,729	)	$	(24,868	)

      At December 31, 2001, the Company had an alternative minimum tax credit carryforward of approximately $8,282,000 available to offset future income taxes payable to the extent regular income taxes payable exceeds alternative minimum taxes payable. Alternative minimum tax credits can be carried forward indefinitely.

      In 2001, the Company utilized $3,777,000 of general business credits. There are no remaining general business credits to offset regular taxes payable at December 31, 2001.

Note 13 — Employee Stock Ownership and 401(k) Plans:

      The Company has a 401(k) retirement plan (“401(k)”) for its employees who meet plan eligibility requirements. Until it was merged into the 401(k) effective December 31, 2000, the Company also had an Employee Stock Ownership Plan (“ESOP”), which was a noncontributory defined contribution plan established primarily to acquire shares of the Company’s common stock. The ESOP’s assets were transferred into the 401(k) on April 24, 2001. The merger was done to reduce costs and simplify reporting and accounting obligations. On December 31, 2000, the ESOP’s assets included 1,187,897 shares of the Company’s common stock. All of these shares were allocated to the participants’ accounts effective as of December 31, 2000. In addition to investments in the Company’s common stock, the ESOP held investments in a balanced mutual fund. Contributions to the ESOP were made at the discretion of the Company’s Board of Directors. The Company made contributions of $825,000 and $3,000,000 to the ESOP for 2000 and 1999, respectively.

F-24

GIANT INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

      The Company matches the employee’s contributions to the 401(k) at a rate of 50% up to a maximum of 6% of the employee’s annual compensation, subject to a per participant maximum contribution amount. For the years ended December 31, 2001, 2000, and 1999, the Company expensed $1,454,000, $1,415,000, and $1,388,000, respectively, for matching contributions under this plan. The Company’s matching contribution can be invested in available options at the discretion of the participant. Additional contributions to the 401(k) are made at the discretion of the Company’s Board of Directors. For the year ending December 31, 2001, the Company made a discretionary contribution of $900,000 to the 401(k). This amount is similar to the discretionary contributions made in past years to the ESOP. This amount will be used to purchase the Company’s common stock, which will be allocated to employees’ accounts according to the same formula used for discretionary contributions to the ESOP. At December 31, 2001, the assets of the 401(k) included 995,568 shares of the Company’s common stock.

Note 14 — Stock Incentive Plans:

      Under the 1998 Stock Incentive Plan (the “1998 Plan”), shares of the Company’s common stock are authorized to be issued to deserving employees in connection with awards of options, appreciation rights, restricted shares, performance shares or performance units, all as defined in the 1998 Plan. Appreciation rights, performance shares and performance units may be settled in cash, common shares of the Company or any combination thereof.

      The total number of shares available for grant under the 1998 Plan is 2% of the total number of common shares outstanding as of the first day of each calendar year, which amount was 178,960 shares for 2001, and was 206,070 shares for 2000, subject to a 400,000 share annual limitation on the number of common shares available for the grant of options that are intended to qualify as “incentive stock options” under Section 422 of the Internal Revenue Code. Common shares available for grant in any particular calendar year that are not, in fact, granted in such year cannot be added to the common shares available for grant in any subsequent calendar year. For 2002, the number of shares available for grant is 171,077.

      On May 17, 2001, 177,500 nonqualified stock options were granted to 13 employees under the 1998 Plan. The exercise price for all of the options was $9.95, which was the closing price for the Company’s Common Stock on the New York Stock Exchange on the date of grant. One-third of each grant vested on the date of grant, one-third on May 17, 2002, and the remaining one-third on May 17, 2003. All of the options expire on May 16, 2011.

      No grants were made in 2000.

      The 1998 Plan provides that all grants are subject to restrictions, conditions and terms more specifically described in the 1998 Plan, including, but not limited to, the exercise price for stock options and appreciation rights and time vesting requirements for all awards. In general, the 1998 Plan provides that grants of stock options and appreciation rights must expire no more than 10 years from the date of grant. In addition, all grants under the 1998 Plan are subject to forfeiture under certain circumstances, and all unvested awards may vest immediately under various circumstances defined in the 1998 Plan.

      On December 31, 1999, 100,000 nonqualified stock options were granted under the 1998 Plan, 50,000 stock options at an exercise price of $12.00 per share and 50,000 stock options at $18.50 per share. The stock options were granted to two employees who had been granted an equal number of Phantom Stock units under the Giant Industries, Inc. 1998 Phantom Stock Plan (the “Phantom Stock Plan”), which was terminated by the Company in 1999. Each Phantom Stock unit was equivalent to one share of the Company’s common stock. The stock options were granted under the original terms of the Phantom Stock Plan grant as to exercise price, vesting and expiration date. The exercise prices exceeded the fair market value at the date of grant, 60,000 options became vested on the grant date, and the remaining options vest in varying amounts,

F-25

GIANT INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

and at various times, through December 31, 2001. All of the options expire on February 1, 2008. No other awards were outstanding under the Phantom Stock Plan at the time of its termination.

      Under the Company’s 1989 Stock Incentive Plan (the “1989 Plan”), 500,000 shares of the Company’s common stock were authorized to be issued to deserving employees in the form of options and/or restricted stock. At December 31, 2001, no shares were available for future grants under the 1989 Plan because, by its terms, no new awards may be made after December 11, 1999.

      All of the options or restricted stock granted under the 1989 Plan are fully vested. At December 31, 2001, 121,450 shares granted under the 1989 Plan remained to be exercised.

      The following summarizes stock option transactions under the 1989 and 1998 Plans:

					Weighted Average
Options Outstanding At		Shares			Exercise Price
January 1, 1999			431,408		$	8.80
	Granted		100,000			15.25
	Exercised		(120,857	)		8.86
December 31, 1999			410,551			10.36
	Exercised		(16,500	)		6.61
	Forfeited		(15,000	)		14.88
	Expired		(5,000	)		10.50
December 31, 2000			374,051			10.34
	Granted		177,500			9.95
	Exercised		(126,601	)		8.74
	Expired		(26,000	)		10.63
December 31, 2001			398,950		$	10.65
Options exercisable at December 31:
	2001		280,613		$	10.95
	2000		298,251			10.07
	1999		252,285			9.80

      The following summarizes information about stock options outstanding under the 1989 and 1998 Plans at December 31, 2001:

Options Outstanding						Options Exercisable
				Weighted
				Average				Weighted
Range of		Number		Remaining		Number		Average
Exercise Prices		Outstanding		Contractual Life		Exercisable		Exercise Price
	$5.25		17,900		0.3 Years		17,900	$	5.25
	7.75		47,750		1.3 Years		47,750		7.75
	12.00 to 18.50		100,000		6.1 Years		100,000		15.25
	8.88		55,800		7.1 Years		55,800		8.88
	9.95		177,500		9.4 Years		59,163		9.95
			398,950		6.9 Years		280,613	$	10.95

      In October 1995, the FASB issued SFAS No. 123 “Accounting for Stock Based Compensation.” The Company has determined that it will not change to the fair value method prescribed in the Statement and will continue to use Accounting Principles Board Opinion No. 25 for measurement and recognition of employee stock based compensation.

F-26

GIANT INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

      The Company has adopted the disclosure-only provisions of SFAS No. 123. If the Company had elected to recognize compensation costs based on the fair value at the date of grant for awards granted in 2001, 1999 and 1998, consistent with the provisions of SFAS No. 123, the Company’s net earnings and earnings per share for the years ended December 31, 2001, 2000 and 1999 would have decreased by approximately $634,000 and $0.07 per share, $289,000 and $0.03 per share, and $497,000 and $0.05 per share, respectively.

      The pro forma effects of applying SFAS No. 123 in this disclosure are not necessarily indicative of future amounts.

      The estimated weighted average fair values of options granted during 2001, 1999 and 1998 were $5.96, $9.14 and $5.40 per share, respectively, and were estimated using the Black-Scholes option-pricing model with the following weighted average assumptions:

	2001			1999			1998
Expected life in years		8			8			7
Risk-free interest rate		5.4	%		6.5	%		6	%
Volatility		47	%		45	%		38	%
Dividend Yield		—			—			1.2	%

Note 15 — Interest, Operating Leases and Rent Expense:

      Interest paid and capitalized for 2001 was $24,135,000 and $0, for 2000 was $24,458,000 and $62,000, and for 1999 was $24,176,000 and $183,000, respectively.

      As discussed in Note 3, on December 31, 1998, the Company and FFCA completed a sale-leaseback transaction. Under the terms of the Agreement, FFCA purchased 83 service station/convenience stores from the Company and the Company in turn leased the 83 service station/convenience stores back from FFCA under an operating lease arrangement with an initial term of 15 years and three separate options to continue the lease for successive periods of five years. The Company reacquired 24 of the service station/convenience stores in the second half of 1999 and the remaining 59 in the third quarter of 2001.

      The Company is committed to annual minimum rentals under noncancelable operating leases that have initial or remaining lease terms in excess of one year as of December 31, 2001 as follows:

	Land, building,
	machinery and
	equipment leases
	(In thousands)
2002	$	4,606,000
2003		3,414,000
2004		2,577,000
2005		1,711,000
2006		1,096,000
2007 – 2024		6,004,000
Total minimum payments required	$	19,408,000

      Total rent expense was $8,459,000, $11,017,000, and $12,134,000 for 2001, 2000, and 1999, respectively.

Note 16 — Commitments and Contingencies:

      Various legal actions, claims, assessments and other contingencies arising in the normal course of the Company’s business, including those matters described below, are pending against the Company and certain

F-27

GIANT INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

of its subsidiaries. Certain of these matters involve or may involve significant claims for compensatory, punitive or other damages. These matters are subject to many uncertainties, and it is possible that some of these matters could be ultimately decided, resolved or settled adversely. The Company has recorded accruals for losses related to those matters that it considers to be probable and that can be reasonably estimated. Although the ultimate amount of liability at December 31, 2001, that may result from those matters for which the Company has recorded accruals is not ascertainable, the Company believes that any amounts exceeding the Company’s recorded accruals should not materially affect the Company’s financial condition. It is possible, however, that the ultimate resolution of these matters could result in a material adverse effect on the Company’s results of operations for a particular reporting period.

      Federal, state and local laws and regulations relating to health and the environment affect nearly all of the operations of the Company. As is the case with all companies engaged in similar industries, the Company faces significant exposure from actual or potential claims and lawsuits involving environmental matters. These matters include soil and water contamination, air pollution and personal injuries or property damage allegedly caused by substances manufactured, handled, used, released or disposed of by the Company. Future expenditures related to health and environmental matters cannot be reasonably quantified in many circumstances for various reasons, including the speculative nature of remediation and clean-up cost estimates and methods, imprecise and conflicting data regarding the hazardous nature of various types of substances, the number of other potentially responsible parties involved, various defenses which may be available to the Company and changing environmental laws and interpretations of environmental laws.

      In June 2001, NMED issued four compliance orders (“Orders”) to the Company in connection with alleged violations of air regulations at the Company’s Ciniza and Bloomfield refineries. The Orders allege violations discovered during NMED inspections in 1999 and 2000. The civil penalties proposed in connection with the Orders originally totaled approximately $550,000. The Company settled the alleged violations for $135,000 during the first quarter of 2002.

      In 1973, the Company constructed the Farmington Refinery that was operated until 1982. The Company became aware of soil and shallow groundwater contamination at this facility in 1985. The Company hired environmental consulting firms to investigate the contamination and undertake remedial action. The consultants identified several areas of contamination in the soils and shallow groundwater underlying the Farmington property. A consultant to the Company has indicated that contamination attributable to past operations at the Farmington property has migrated off the refinery property, including a hydrocarbon plume that appears to extend no more than 1,800 feet south of the refinery property. Remediation activities are ongoing by the Company under the supervision of the New Mexico Oil Conservation Division (“OCD”), although no cleanup order has been received. The Company’s environmental reserve for this matter is approximately $570,000.

      The Farmington property is located adjacent to the Lee Acres Landfill (the “Landfill”), a closed landfill formerly operated by San Juan County, which is situated on lands owned by the United States Bureau of Land Management (the “BLM”). Industrial and municipal wastes were disposed of in the Landfill by numerous sources. While the Landfill was operational, the Company used it to dispose of office trash, maintenance shop trash, used tires and water from the Farmington refinery’s evaporation pond.

      The Landfill was added to the National Priorities List as a CERCLA Superfund site in 1990. In connection with this listing, EPA defined the site as the Landfill and the Landfill’s associated groundwater plume. EPA excluded any releases from the Farmington refinery itself from the definition of the site. In May 1991, EPA notified the Company that it may be a potentially responsible party under CERCLA for the release or threatened release of hazardous substances, pollutants or contaminants at the Landfill.

      BLM made a proposed plan of action for the Landfill available to the public in 1996. Remediation alternatives examined by BLM in connection with the development of its proposed plan ranged in projected

F-28

GIANT INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

cost from no cost to approximately $14,500,000. BLM proposed the adoption of a remedial action alternative that it believes would cost approximately $3,900,000 to implement. BLM’s $3,900,000 cost estimate is based on certain assumptions that may or may not prove to be correct and is contingent on confirmation that the remedial actions, once implemented, are adequately addressing Landfill contamination. For example, if assumptions regarding groundwater mobility and contamination levels are incorrect, BLM is proposing to take additional remedial actions with an estimated cost of approximately $1,800,000.

      BLM has received public comment on its proposed plan. The final remedy for the site, however, has not yet been selected. Although the Company was given reason to believe that a final remedy would be selected in 2000, that selection did not occur. The Company has been advised that the site remedy may be announced in 2002. In 1989, a consultant to the Company estimated, based on various assumptions, that the Company’s share of potential liability could be approximately $1,200,000. This figure was based upon estimated Landfill remediation costs significantly higher than those being proposed by BLM. The figure also was based on the consultant’s evaluation of such factors as available clean-up technology, BLM’s involvement at the site and the number of other entities that may have had involvement at the site, but did not include an analysis of all of the Company’s potential legal defenses and arguments, including possible setoff rights.

      Potentially responsible party liability is joint and several, such that a responsible party may be liable for all of the clean-up costs at a site even though the party was responsible for only a small part of such costs. Although it is possible that the Company may ultimately incur liability for clean-up costs associated with the Landfill, a reasonable estimate of the amount of this liability, if any, cannot be made at this time because, among other reasons, the final site remedy has not been selected, a number of entities had involvement at the site, allocation of responsibility among potentially responsible parties has not yet been made, and potentially applicable factual and legal issues have not been resolved. Based on current information, the Company does not believe that it needs to record a liability in relation to BLM’s proposed plan.

      BLM may assert claims against the Company and others for reimbursement of investigative, cleanup and other costs incurred by BLM in connection with the Landfill and surrounding areas. It is also possible that the Company will assert claims against BLM in connection with contamination that may be originating from the Landfill. Private parties and other governmental entities also may assert claims against BLM, the Company and others for property damage, personal injury and other damages allegedly arising out of any contamination originating from the Landfill and the Farmington property. Parties also may request judicial determination of their rights and responsibilities, and the rights and responsibilities of others, in connection with the Landfill and the Farmington property. Currently, however, there is no outstanding litigation against the Company by BLM or any other party.

      In connection with the acquisition of the Bloomfield Refinery, the Company assumed certain environmental obligations including Bloomfield Refining Company’s (“BRC”) obligations under an administrative order issued by EPA in 1992 pursuant to the Resource Conservation and Recovery Act (the “Order”). The Order required BRC to investigate and propose measures for correcting any releases of hazardous waste or hazardous constituents at or from the Bloomfield Refinery. EPA has delegated its oversight authority over the Order to NMED’s Hazardous Waste Bureau (“HWB”). In 2000, OCD approved the groundwater discharge permit for the refinery, which included an abatement plan that addressed the Company’s environmental obligations under the Order. The abatement plan reflects new information relating to the site as well as remediation methods that were not originally contemplated in connection with the Order. Discussions between OCD, HWB and the Company have resulted in proposed revisions to the abatement plan. Adoption of the abatement plan as the appropriate corrective action remedy under the Order would significantly reduce the Company’s corrective action costs. The Company estimates that remediation expenses associated with the abatement plan will be in the range of approximately $50,000 to $150,000, and will be incurred over a period of approximately 30 years. If the Company’s request is not granted, the Company estimates that remaining remediation expenses could range as high as $1,000,000, which is reflected in the

F-29

GIANT INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Company’s environmental reserve for this matter, and could be as low as $600,000. If, as expected, the abatement plan is approved as submitted, the Company anticipates that the reserve will be reduced.

      The Company has discovered hydrocarbon contamination adjacent to a 55,000 barrel crude oil storage tank (the “Tank”) that was located in Bloomfield, New Mexico. The Company believes that all or a portion of the Tank and the 5.5 acres owned by the Company on which the Tank was located may have been a part of a refinery, owned by various other parties, that, to the Company’s knowledge, ceased operations in the early 1960s. Based upon a January 13, 2000 report filed with OCD, it appears possible that contaminated groundwater is contained within the property boundaries and does not extend offsite. The Company anticipates that OCD will not require remediation of offsite soil based upon the low contaminant levels found there. In the course of conducting cleanup activities approved by OCD, it was discovered that the extent of contamination was greater than anticipated. The Company received approval to conduct a pilot bioventing project to address remaining contamination at the site, which was completed on June 26, 2001, at a cost of approximately $15,000. Based on the results of the pilot project, the Company submitted a remediation plan to OCD that proposes the use of bioventing to address remaining contamination. The Company anticipates that it would incur approximately $150,000 in remediation expenses in connection with this plan over a period of one to two years, and the Company has created an environmental reserve in this amount. If the Company’s plan is not approved, the Company cannot reasonably estimate remaining remediation costs because, among other reasons, it does not know what remediation technology would be approved by OCD for use at the site.

      As of December 31, 2001, the Company had an environmental liability accrual of approximately $2,500,000. Approximately $1,600,000 of this accrual is for the following previously discussed projects: (i) the remediation of the hydrocarbon plume that appears to extend no more than 1,800 feet south of the Company’s inactive Farmington refinery; (ii) environmental obligations assumed in connection with the acquisition of the Bloomfield Refinery; and (iii) hydrocarbon contamination on and adjacent to the 5.5 acres that the Company owns in Bloomfield, New Mexico. The remaining amount of the accrual relates to the closure of certain solid waste management units at the Ciniza Refinery, which is being conducted in accordance with the refinery’s Resource Conservation and Recovery Act permit; closure of the Ciniza Refinery land treatment facility including post-closure expenses; and amounts for smaller remediation projects. The accrual balance reflects a reduction in amounts accrued for environmental obligations assumed in connection with the acquisition of the Bloomfield Refinery and increases in reserves for other environmental projects. The environmental accrual is recorded in the current and long-term sections of the Company’s Consolidated Balance Sheets.

      On June 11, 2001, the Company filed claims against the United States Defense Energy Support Center (“DESC”) in connection with jet fuel that the Company sold to DESC from 1983 through 1994. The Company asserted that the DESC underpaid for the jet fuel in the approximate amount of $17,000,000. The Company believes that its claims are supported by recent federal court decisions, including decisions from the United States Claims Court, dealing with contract provisions similar to those contained in the contracts that are the subject of the Company’s claims. On March 12, 2002, the DESC denied the Company’s claims. The Company has 12 months to bring an action in the United States Court of Federal Claims relating to the denied claims. The DESC has indicated that it will counterclaim if the Company pursues its claims and will assert, based on its interpretation of the contract provisions, that the Company may owe additional amounts of approximately $4,900,000. The Company is evaluating its options. Due to the preliminary nature of this matter, there can be no assurance that the Company would ultimately prevail should it decide to pursue its claims nor is it possible to predict when any payment would be received if the Company were successful. Accordingly, the Company has not recorded a receivable for this claim.

      Giant Arizona leases approximately 8,176 square feet of space from a limited liability company in which the CCEO owns a 51% interest. Pursuant to a sublease between Giant Arizona and a separate limited liability

F-30

GIANT INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

company controlled by the CCEO, Giant Arizona subleases the space to such entity for use as an inn. The owner of the 49% interest in the lessor has notified Giant Arizona that the sublessee is delinquent on the payment of the rent due, and on or about December 28, 2001, such owner filed a derivative lawsuit for and on behalf of the lessor against Giant Arizona to collect all amounts owing under the lease. The suit is for the recovery of rents past due and owing in excess of $156,990 from August 1, 2000 through date of the complaint. Pursuant to a letter dated January 16, 2002, Giant Arizona made a formal demand on the sublessee for the sublessee to pay all of the past due amounts. In addition, Giant Arizona has filed a motion to dismiss the lawsuit for failure to comply with the express provisions of the Arizona derivative action statute or, alternatively, to compel binding arbitration pursuant to the terms of the lease.

Note 17 — Quarterly Financial Information (Unaudited):

	Year Ended December 31, 2001
	Quarter
	First		Second		Third		Fourth
	(In thousands, except per share data)
Net revenues	$	251,212	$	281,158	$	241,228	$	195,081
Cost of products sold		200,502		209,917		181,834		146,261
Gross margin		50,710		71,241		59,394		48,820
Operating expenses		28,848		28,736		27,957		28,719
Depreciation and amortization		8,113		8,139		8,608		9,015
Selling, general and administrative expenses		6,583		8,755		7,659		4,867
Loss on the disposal/write-down of assets		139		343		1,301		4,429
Allowance for related party note and interest receivable		—		—		—		5,409
Net earnings (loss)		950		11,953		5,135		(5,657	)
Net earnings (loss) per common share — basic	$	0.11	$	1.33	$	0.57	$	(0.66	)
Net earnings (loss) per common share — assuming dilution	$	0.11	$	1.33	$	0.57	$	(0.66	)

	Year Ended December 31, 2000
	Quarter
	First			Second		Third		Fourth
	(In thousands, except per share data)
Net revenues	$	225,134		$	266,066	$	301,213	$	281,949
Cost of products sold		178,017			210,630		240,873		229,481
Gross margin		47,117			55,436		60,340		52,468
Operating expenses		29,430			29,375		30,429		33,416
Depreciation and amortization		8,305			8,370		8,650		8,254
Selling, general and administrative expenses		6,402			6,396		7,202		5,373
Net earnings (loss)		(1,632	)		3,281		5,015		625
Net earnings (loss) per common share — basic	$	(0.17	)	$	0.36	$	0.55	$	0.07
Net earnings (loss) per common share — assuming dilution	$	(0.17	)	$	0.36	$	0.55	$	0.07

      In the fourth quarter of 2001, the Company recorded a loss on the disposal/ write-down of certain refining and retail assets due to obsolescence and replacement, recorded the write-down of various service station/ convenience stores due to impairment, and recorded an allowance for a related party note and interest receivable.

F-31

GIANT INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Note 18 — Subsequent Event:

      On February 8, 2002, the Company entered into an agreement with BP Corporation North America Inc. and BP Products North America Inc. (collectively “BP”) to purchase a refinery in Yorktown, Virginia (the “Yorktown Refinery”). The refinery is located in Yorktown, Virginia, on the York River. It has a crude oil processing capacity of 61,900 barrels per day. Gasoline comprises approximately 50% of the refinery’s current product slate, which also encompasses a wide range of other products including diesel fuel, heating oil and coke. The refinery is the only refinery in Virginia and, due to its coastal location, is able to purchase crude oil produced around the world and to deliver refined petroleum products to New York Harbor as well as to the area around the refinery.

      The Yorktown Refinery will be acquired for $127,500,000, plus the value of inventory at closing, which the Company currently projects will have a value of approximately $42,000,000. The agreement also provides for conditional potential monthly payments, in an amount not to exceed a combined total of $25,000,000, if certain refining margin spreads over a specified index are reached. The payments begin in the year 2003 and conclude at the end of 2005. The Company made a deposit of $10,000,000 to BP when the refinery purchase agreement was executed, which is only refundable under limited circumstances. In addition to the purchase price, the Company anticipates that it will incur direct costs in connection with the refinery acquisition of approximately $800,000, excluding financing costs.

      The Company will assume certain liabilities and obligations, including certain environmental obligations, in connection with its purchase of the Yorktown Refinery, but will be provided with specified levels of indemnification for certain matters.

      The Company expects the refinery purchase to close during the second quarter of 2002. The closing is contingent on satisfaction of all contract conditions, including the nonexercise of a right of first refusal held by an adjacent property owner and the expiration or termination of the required waiting period under the Hart-Scott-Rodino Antitrust Improvement Act (“HSR”) and any extension of this waiting period by the federal government. The purchase agreement can be terminated by the Company or BP if the closing does not occur on or prior to May 31, 2002, although Buyer may not terminate the agreement until September 30, 2002 if the only condition to closing that has not occurred is termination or expiration of the HSR waiting period. By letter dated February 2002, the Federal Trade Commission notified the Company that the HSR waiting period had been terminated.

      The Company intends to finance the acquisition of the refinery with a combination of committed financing and cash on hand. The debt financing is anticipated to consist of borrowing under: (i) the Company’s Credit Agreement, which will be amended and restated to, among other things, increase the Company’s maximum available borrowing under the facility and extend the facility’s term by an additional year; (ii) a capital lease facility; (iii) a mortgage financing facility; and (iv) potentially additional public debt. The Company anticipates that financing costs associated with the Yorktown Refinery acquisition, including the possible refinancing of the Company’s 9 3/4% Notes, will be approximately $13,500,000 to $15,000,000.

Note 19 — Goodwill Amortization:

      In accordance with SFAS No. 142, the Company discontinued the amortization of goodwill effective January 1, 2002. A reconciliation of net earnings and related per share amounts reported in the Consolidated Statements of Earnings to the pro forma amounts adjusted for the exclusion of goodwill amortization, net of the related tax effect, is presented below. For purposes of the calculation, goodwill amortization was tax effected using the Company’s estimated incremental combined federal and state tax rate of approximately 40%. The pro forma results reflecting the exclusion of goodwill amortization have been prepared only to demonstrate the impact of goodwill amortization, net of tax effect, on net earnings and related per share amounts and are for comparative purposes only.

F-32

GIANT INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

			Year Ended December 31,
			2001		2000		1999
			(In thousands,
			except per share data)
Reported net earnings			$	12,381	$	7,289	$	10,778
Add: Goodwill amortization, net of tax effect				641		641		650
Adjusted net earnings			$	13,022	$	7,930	$	11,428
Earnings per common share:
	Basic:
		Reported net earnings	$	1.40	$	0.79	$	1.01
		Add: Goodwill amortization, net of tax effect		0.07		0.07		0.06
		Adjusted net earnings	$	1.47	$	0.86	$	1.07
	Diluted:
		Reported net earnings	$	1.39	$	0.79	$	1.01
		Add: Goodwill amortization, net of tax effect		0.07		0.07		0.06
		Adjusted net earnings	$	1.46	$	0.86	$	1.07

Note 20 — Subsidiary Guarantors (Unaudited):

      In connection with the Company’s acquisition of the Yorktown refinery (see Note 18), the Company completed a private placement for $200.0 million of senior subordinated notes. The Company will offer to exchange such notes for a new issue of substantially identical debt securities registered under the Securities Act of 1933.

      The notes will be fully and unconditionally guaranteed, jointly and severally, on a senior subordinated basis, by each of the Company’s existing and future domestic restricted subsidiaries, subject to a limitation designed to ensure that such guarantees do not constitute a fraudulent conveyance. Except as otherwise provided in the indentures pursuant to which the notes were issued, there are no restrictions on the ability of such subsidiaries to transfer funds to the Company in the form of cash dividends, loans or advances. General provisions of applicable state law, however, may limit the ability of any subsidiary to pay dividends or make distributions to the Company in certain circumstances.

      Separate financial information for such subsidiaries and the parent company are not provided as the parent company has no independent assets or operations, the guarantees are full and unconditional and joint and several, any of the subsidiaries of the Company other than the subsidiary guarantors are minor and the separate financial statements and other disclosures concerning the subsidiaries are not deemed material to investors.

F-33

GIANT INDUSTRIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

			March 31,			December 31,
			2002			2001
			(Unaudited)
			(In thousands)
ASSETS
Current assets:
	Cash and cash equivalents		$	9,730		$	26,326
	Receivables, net			51,539			43,530
	Inventories			62,494			58,729
	Prepaid expenses and other			2,955			3,661
	Deferred income taxes			3,735			3,735
		Total current assets		130,453			135,981
Property, plant and equipment				527,001			525,345
	Less accumulated depreciation and amortization			(209,602	)		(201,823	)
				317,399			323,522
Goodwill, net				19,815			19,815
Other assets				38,900			27,856
			$	506,567		$	507,174
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
	Current portion of long-term debt		$	41		$	45
	Accounts payable			47,181			42,255
	Accrued expenses			31,006			36,537
		Total current liabilities		78,228			78,837
Long-term debt, net of current portion				256,741			256,749
Deferred income taxes				32,816			32,772
Other liabilities				2,249			2,406
Commitments and contingencies (Notes 5 and 6)
Stockholders’ equity:
	Preferred stock, par value $.01 per share, 10,000,000 shares authorized, none issued
	Common stock, par value $.01 per share, 50,000,000 shares authorized, 12,305,859 shares issued			123			123
	Additional paid-in capital			73,589			73,589
	Retained earnings			99,275			99,152
				172,987			172,864
	Less common stock in treasury — at cost, 3,751,980 shares			(36,454	)		(36,454	)
		Total stockholders’ equity		136,533			136,410
			$	506,567		$	507,174

See accompanying notes to condensed consolidated financial statements.

F-34

GIANT INDUSTRIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS

		Three Months Ended
		March 31,
		2002		2001
		(Unaudited)
		(In thousands, except
		per share data)
Net revenues		$	188,396	$	251,212
Cost of products sold			141,839		200,502
Gross margin			46,557		50,710
Operating expenses			26,411		28,848
Depreciation and amortization			8,771		8,113
Selling, general and administrative expenses			5,197		6,583
Loss on disposal/write-down of assets			30		139
Operating income			6,148		7,027
Interest expense, net			5,939		5,480
Earnings before income taxes			209		1,547
Provision for income taxes			86		597
Net earnings		$	123	$	950
Net earnings per common share:
	Basic	$	0.01	$	0.11
	Assuming dilution	$	0.01	$	0.11

See accompanying notes to condensed consolidated financial statements.

F-35

GIANT INDUSTRIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

				Three Months Ended
				March 31,
				2002			2001
				(Unaudited)
				(In thousands)
Cash flows from operating activities:
	Net earnings			$	123		$	950
	Adjustments to reconcile net earnings to net cash (used) provided by operating activities:
		Depreciation and amortization			8,771			8,113
		Deferred income taxes			44			318
		Loss on the disposal/write-down of assets			30			139
		Other			235			275
		Changes in operating assets and liabilities:
			(Increase) decrease in receivables		(8,009	)		15,181
			Increase in inventories		(3,759	)		(8,277	)
			Decrease in prepaid expenses and other		706			757
			Increase (decrease) in accounts payable		4,926			(6,571	)
			Decrease in accrued expenses		(5,629	)		(3,108	)
Net cash (used) provided by operating activities					(2,562	)		7,777
Cash flows from investing activities:
	Yorktown refinery acquisition deposit and costs				(10,158	)		—
	Purchases of property, plant and equipment				(2,332	)		(2,222	)
	Refinery acquisition contingent payment				—			(5,139	)
	Purchase of other assets				—			(5,014	)
	Proceeds from sale of property, plant and equipment				32			201
Net cash used by investing activities					(12,458	)		(12,174	)
Cash flows from financing activities:
	Payments of long-term debt				(12	)		(11	)
	Deferred financing costs				(1,564	)		—
Net cash used by financing activities					(1,576	)		(11	)
Net decrease in cash and cash equivalents					(16,596	)		(4,408	)
	Cash and cash equivalents:
		Beginning of period			26,326			26,618
		End of period		$	9,730		$	22,210

See accompanying notes to condensed consolidated financial statements.

F-36

GIANT INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 1 — Organization and Basis of Presentation:

      Giant Industries, Inc., a Delaware corporation (together with its subsidiaries, “Giant” or the “Company”), through its wholly-owned subsidiary Giant Industries Arizona, Inc. and its subsidiaries (“Giant Arizona”), is engaged in the refining and marketing of petroleum products in New Mexico, Arizona and Colorado, with a concentration in the Four Corners area where these states adjoin. In addition, Phoenix Fuel Co., Inc. (“Phoenix Fuel”), a wholly-owned subsidiary of Giant Arizona, operates a wholesale petroleum products distribution operation. (See Note 2 for a further discussion of Company operations and Note 8 for a discussion of the pending Yorktown refinery acquisition.)

      The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America, hereafter referred to as generally accepted accounting principles, for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and notes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments and reclassifications considered necessary for a fair and comparable presentation have been included and are of a normal recurring nature. Operating results for the three months ended March 31, 2002 are not necessarily indicative of the results that may be expected for the year ending December 31, 2002. The enclosed financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2001.

      Effective for 2002, the Company adopted Statement of Financial Accounting Standard (“SFAS”) No. 142, “Goodwill and Other Intangible Assets.” SFAS No. 142, among other things, specifies that goodwill and certain intangible assets with indefinite lives no longer be amortized, but instead be subject to periodic impairment testing. At March 31, 2002, the Company determined that there was no impairment to its indefinite lived intangible assets. These indefinite lived intangible assets will continue to be evaluated for impairment as required by SFAS No. 142. As required by SFAS No. 142, the transitional impairment test for goodwill will be completed during the second quarter of 2002. At March 31, 2002 and December 31, 2001, the Company had goodwill of $19,815,000, of which $14,722,000 related to the acquisition of Phoenix Fuel and $4,891,000 related to various retail acquisitions.

      Intangible assets with finite lives will continue to be amortized over their respective useful lives and will be tested for impairment in accordance with SFAS No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets,” more fully discussed below.

      A summary of intangible assets at March 31, 2002 is presented below:

		Gross				Net
		Carrying		Accumulated		Carrying
		Value		Amortization		Value
		(In thousands)
Amortized intangible assets:
	Rights-of-way	$	3,585	$	2,254	$	1,331
	Contracts		3,971		3,387		584
			7,556		5,641		1,915
Unamortized intangible assets:
	Liquor licenses		7,303		—		7,303
Total intangible assets:		$	14,859	$	5,641	$	9,218

F-37

GIANT INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

      Intangible asset amortization expense for the three months ended March 31, 2002 was $73,000. Estimated amortization expense for the five succeeding fiscal years is as follows:

	(In thousands)
2002	$	291
2003		291
2004		291
2005		291
2006		288

      The following sets forth a reconciliation of net income and earnings per share information for the three months ended March 31, 2002 and 2001 adjusted for the non-amortization provisions of SFAS No. 142.

		For The Three
		Months Ended
		March 31,
		2002		2001
		(In thousands,
		except per share data)
Reported net earnings		$	123	$	950
Add: Goodwill amortization, net of tax effect			—		160
Adjusted net earnings		$	123	$	1,110
Basic earnings per share:
	Reported net earnings	$	0.01	$	0.11
	Adjusted net earnings	$	0.01	$	0.12
Diluted earnings per share:
	Reported net earnings	$	0.01	$	0.11
	Adjusted net earnings	$	0.01	$	0.12

      Effective for 2002, the Company adopted SFAS No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets.” This Statement defines an impairment as “the condition that exists when the carrying amount of a long-lived asset (asset group) is not recoverable and exceeds its fair value.” The Statement provides for a single accounting model for the disposal of long-lived assets, whether previously held or newly acquired. This Statement applies to recognized long-lived assets of an entity to be held and used or to be disposed of, and applies to the entire group when a long-lived asset is a part of the group. A group is defined as the lowest level of operations with identifiable cash flows that are largely independent of the cash flows of other assets and liabilities. The Statement identifies the circumstances that apply when testing for recoverability, as well as other potential adjustments or revisions relating to recoverability. Specific guidance is provided for recognition and measurement and reporting and disclosure for long-lived assets held and used, disposed of other than by sale, and disposed of by sale. The adoption of this new standard had no initial effect on the Company’s financial position and results of operations.

      In June 2001, the Financial Accounting Standards Board (“FASB”) issued SFAS No. 143, “Accounting for Asset Retirement Obligations.” This Statement addresses financial accounting and reporting for obligations associated with the retirement of tangible long-lived assets and the associated asset retirement costs. It applies to legal obligations associated with the retirement of long-lived assets that result from the acquisition, construction, development and/or the normal operation of a long-lived asset, except for certain obligations of lessees. As used in this Statement, a legal obligation is an obligation that a party is required to settle as a result of an existing or enacted law, statute, ordinance, or written or oral contract or by legal construction of a contract under the doctrine of promissory estoppel.

      SFAS No. 143 requires that the fair value of a liability for an asset retirement obligation be recognized in the period in which it is incurred if a reasonable estimate of fair value can be made. The associated asset

F-38

GIANT INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

retirement costs are capitalized as part of the carrying amount of the long-lived asset. Disclosure requirements include descriptions of asset retirement obligations and reconciliation of changes in the components of those obligations. This Statement is effective for financial statements issued for fiscal years beginning after June 15, 2002. The Company has not determined, but is in the process of evaluating, the effect SFAS No. 143 will have relative to its refining and marketing assets.

      Certain reclassifications have been made to the 2001 financial statements and notes to conform to the statement classifications used in 2002.

Note 2 — Business Segments:

      The Company is organized into three operating segments based on manufacturing and marketing criteria. These segments are the Refining Group, the Retail Group and Phoenix Fuel. A description of each segment and its principal products follows:

•  Refining Group: The Refining Group owns and operates the Company’s two refineries, its crude oil gathering pipeline system, two finished products distribution terminals, and a fleet of crude oil and finished product truck transports. The Company’s two refineries manufacture various grades of gasoline, diesel fuel, and other products from crude oil, other feedstocks and blending components. In addition, finished products are acquired through exchange agreements, from third party suppliers and from Phoenix Fuel. These products are sold through Company-operated retail facilities, independent wholesalers and retailers, industrial/ commercial accounts, and sales and exchanges with major oil companies. Crude oil, other feedstocks and blending components are purchased from third party suppliers.

•  Retail Group: The Retail Group consists of service stations with convenience stores or kiosks and one travel center. These operations sell various grades of gasoline, diesel fuel, general merchandise and food products to the general public through retail locations. The Refining Group or Phoenix Fuel supplies the petroleum fuels sold by the Retail Group. General merchandise and food products are obtained from third party suppliers.

•  Phoenix Fuel: Phoenix Fuel is a wholesale petroleum products distribution operation, which includes several lubricant and bulk petroleum distribution plants, an unmanned fleet fueling (“cardlock”) operation, a bulk lubricant terminal facility, and a fleet of finished product and lubricant delivery trucks. The petroleum fuels and lubricants sold are primarily obtained from third party suppliers and to a lesser extent from the Refining Group.

      Operations that are not included in any of the three segments are included in the category “Other.” These operations consist primarily of corporate staff operations, including selling, general and administrative expenses.

      Operating income for each segment consists of net revenues less cost of products sold, operating expenses, depreciation and amortization, and the segment’s selling, general and administrative expenses. The sales between segments are made at market prices. Cost of products sold reflects current costs adjusted, where appropriate, for LIFO and lower of cost or market inventory adjustments.

      The total assets of each segment consist primarily of net property, plant and equipment, inventories, accounts receivable and other assets directly associated with the segment’s operations. Included in the total assets of the corporate staff operations are a majority of the Company’s cash and cash equivalents, various accounts receivable, net property, plant and equipment and other long-term assets.

F-39

GIANT INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

      Disclosures regarding the Company’s reportable segments with reconciliation to consolidated totals are presented below.

				As of and for the Three Months Ended March 31, 2002
				Refining		Retail			Phoenix					Reconciling
				Group		Group			Fuel		Other			Items			Consolidated
				(In thousands)
Customer net revenues:
	Finished products			$	46,810	$	39,419		$	56,782	$	—		$	—		$	143,011
	Merchandise and lubricants				—		32,837			5,968		—			—			38,805
	Other				1,843		3,959			728		50			—			6,580
		Total			48,653		76,215			63,478		50			—			188,396
Intersegment net revenues:
	Finished products				29,592		—			12,306		—			(41,898	)		—
	Other				4,473		—			—		—			(4,473	)		—
		Total			34,065		—			12,306		—			(46,371	)		—
			Total net revenues	$	82,718	$	76,215		$	75,784	$	50		$	(46,371	)	$	188,396
Operating income (loss)				$	9,059	$	(672	)	$	1,473	$	(3,682	)	$	(30	)	$	6,148
Interest expense																		(6,003	)
Interest income																		64
Earnings before income taxes																	$	209
Depreciation and amortization				$	4,549	$	3,200		$	538	$	484		$	—		$	8,771
Total assets				$	235,682	$	155,653		$	65,230	$	50,002		$	—		$	506,567
Capital expenditures				$	890	$	308		$	216	$	918		$	—		$	2,332

				For the Three Months Ended March 31, 2001
				Refining		Retail			Phoenix					Reconciling
				Group		Group			Fuel		Other			Items			Consolidated
				(In thousands)
Customer net revenues:
	Finished products			$	66,049	$	56,621		$	82,189	$	—		$	—		$	204,859
	Merchandise and lubricants				—		32,826			5,658		—			—			38,484
	Other				2,953		4,096			748		72			—			7,869
		Total			69,002		93,543			88,595		72			—			251,212
Intersegment net revenues:
	Finished products				38,527		—			21,013		—			(59,540	)		—
	Other				3,661		—			—		—			(3,661	)		—
		Total			42,188		—			21,013		—			(63,201	)		—
			Total net revenues	$	111,190	$	93,543		$	109,608	$	72		$	(63,201	)	$	251,212
Operating income (loss)				$	11,085	$	(362	)	$	1,468	$	(5,025	)	$	(139	)	$	7,027
Interest expense																		(6,043	)
Interest income																		563
Earnings before income taxes																	$	1,547
Depreciation and amortization				$	3,949	$	2,986		$	660	$	518		$	—		$	8,113
Capital expenditures				$	1,396	$	420		$	299	$	107		$	—		$	2,222

F-40

GIANT INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Note 3 — Earnings Per Share:

      The following is a reconciliation of the numerators and denominators of the basic and diluted per share computations for net earnings:

		Three Months Ended March 31,
		2002						2001
						Per						Per
		Earnings		Shares		Share		Earnings		Shares		Share
		(Numerator)		(Denominator)		Amount		(Numerator)		(Denominator)		Amount
Earnings per common share — basic:
	Net earnings	$	123,000		8,553,879	$	0.01	$	950,000		8,948,008	$	0.11
	Effect of dilutive stock options				17,843						5,727
Earnings per common share — assuming dilution:
	Net earnings	$	123,000		8,571,722	$	0.01	$	950,000		8,953,735	$	0.11

      At March 31, 2002, there were 8,553,879 shares of the Company’s common stock outstanding. Except as set forth below, there were no transactions subsequent to March 31, 2002, that if the transactions had occurred before March 31, 2002, would materially change the number of common shares or potential common shares outstanding as of March 31, 2002.

      On April 29, 2002, 17,900 stock options granted May 1, 1992, were exercised. These stock options were scheduled to expire on April 30, 2002.

Note 4 — Inventories:

			March 31,		December 31,
			2002		2001
			(In thousands)
First-in, first-out (“FIFO”) method:
	Crude oil		$	12,824	$	12,835
	Refined products			25,756		21,982
	Refinery and shop supplies			8,437		8,111
	Merchandise			3,667		3,928
Retail method:
	Merchandise			8,968		9,179
		Subtotal		59,652		56,035
Adjustment for last-in, first-out (“LIFO”) method				2,842		5,996
Allowance for lower of cost or market				—		(3,302	)
		Total	$	62,494	$	58,729

      The portion of inventories valued on a LIFO basis totaled $34,339,000 and $30,872,000 at March 31, 2002 and December 31, 2001, respectively. The following data will facilitate comparison with the operating results of companies using the FIFO method of inventory valuation.

F-41

GIANT INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

      If inventories had been determined using the FIFO method at March 31, 2002 and 2001, net earnings and diluted earnings per share for the three months ended March 31, 2002 and 2001, would have been lower by $89,000 and $0.01, and $1,801,000 and $0.20, respectively.

      For interim reporting purposes, inventory increments expected to be liquidated by year-end are valued at the most recent acquisition costs, and inventory liquidations that are expected to be reinstated by year end are ignored for LIFO inventory valuation calculations. The LIFO effects of inventory increments not expected to be liquidated by year-end, and the LIFO effects of inventory liquidations not expected to be reinstated by year-end, are recorded in the period such increments and liquidations occur.

Note 5 — Long-Term Debt:

      The Company has issued $150,000,000 of 9% senior subordinated notes due 2007 (the “9% Notes”) and $100,000,000 of 9 3/4% senior subordinated notes due 2003 (the “9 3/4% Notes”, and collectively with the 9% Notes, the “Notes”). The indentures supporting the Notes contain restrictive covenants that, among other things, restrict the ability of the Company and its subsidiaries to create liens, to incur or guarantee debt, to pay dividends, to repurchase shares of the Company’s common stock, to sell certain assets or subsidiary stock, to engage in certain mergers, to engage in certain transactions with affiliates or to alter the Company’s current line of business. In addition, subject to certain conditions, the Company is obligated to offer to purchase a portion of the Notes at a price equal to 100% of the principal amount thereof, plus accrued and unpaid interest, if any, to the date of purchase, with the net cash proceeds of certain sales or other dispositions of assets. Upon a change of control, the Company would be required to offer to purchase all of the Notes at 101% of the principal amount thereof, plus accrued interest, if any, to the date of purchase.

      Repayment of the Notes is jointly and severally guaranteed on an unconditional basis by the Company’s direct and indirect wholly-owned subsidiaries, subject to a limitation designed to ensure that such guarantees do not constitute a fraudulent conveyance. Except as otherwise specified in the indentures pursuant to which the Notes were issued, there are no restrictions on the ability of such subsidiaries to transfer funds to the Company in the form of cash dividends, loans or advances. General provisions of applicable state law, however, may limit the ability of any subsidiary to pay dividends or make distributions to the Company in certain circumstances.

      Separate financial statements of the Company’s subsidiaries are not included herein because the aggregate assets, liabilities, earnings, and equity of the subsidiaries are substantially equivalent to the assets, liabilities, earnings, and equity of the Company on a consolidated basis; the subsidiaries are jointly and severally liable for the repayment of the Notes; and the separate financial statements and other disclosures concerning the subsidiaries are not deemed by the Company to be material to investors.

      The Company recently completed solicitation of consents from the holders of its 9% Notes to amend the 9% Notes indenture to permit the Company to refinance the 9 3/4% Notes prior to their maturity. The Company is in the process of offering for sale $200,000,000 of 11% senior subordinated notes due 2012 in a private placement transaction. See Note 8 for a more detailed discussion of these notes. The net proceeds of the offering will be used to redeem all $100,000,000 principal amount of the 9 3/4% Notes and partially fund the Company’s pending acquisition of the Yorktown refinery and related transaction fees and expenses.

      The Company has a $65,000,000 secured Credit Agreement (the “Credit Agreement”) with a group of banks that expires November 14, 2003. This Credit Agreement, a revolving loan agreement, is primarily a working capital and letter of credit facility and is secured by eligible accounts receivable and inventories as defined in the Credit Agreement. The Credit Agreement also allows the Company to borrow up to $10,000,000 for other acquisitions as defined in the Credit Agreement. The availability of funds under this facility is the lesser of (i) $65,000,000, or (ii) the amount determined under a borrowing base calculation tied to the eligible accounts receivable and inventories. At March 31, 2002, the availability of funds under the

F-42

GIANT INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Credit Agreement was $65,000,000. There were no direct borrowings outstanding under this facility at March 31, 2002, and there were approximately $3,286,000 of irrevocable letters of credit outstanding, primarily to insurance companies and regulatory agencies.

      The interest rate applicable to the Credit Agreement is tied to various short-term indices. At March 31, 2002, this rate was approximately 4% per annum. The Company is required to pay a quarterly commitment fee ranging from 0.325% to 0.500% per annum of the unused amount of the facility. The exact rate depends on meeting certain conditions in the Credit Agreement.

      The Credit Agreement contains certain restrictive covenants that require the Company to, among other things, maintain a minimum consolidated net worth, a minimum interest coverage ratio and a maximum capitalization ratio. It also places limits on investments, dispositions of assets, prepayments of senior subordinated debt, guarantees, liens and restricted payments. The Credit Agreement is guaranteed by certain of the Company’s direct and indirect wholly-owned subsidiaries.

      In connection with the acquisition of the Yorktown refinery, the Company expects to replace the Credit Agreement with a new $100,000,000 senior secured revolving credit facility and borrow $40,000,000 under a new senior secured mortgage loan facility. See Note 8 for a more detailed discussion of these credit facilities.

      The Company also had approximately $6,703,000 of capital lease obligations outstanding at March 31, 2002, which require annual lease payments of approximately $753,000, all of which are recorded as interest expense. The Company intends to purchase the assets associated with these lease obligations pursuant to options to purchase during the remaining lease period of approximately five years for $6,703,000, of which $2,000,000 has been paid in advance and is recorded in “Other Assets” in the Company’s Consolidated Balance Sheets.

Note 6 — Commitments and Contingencies:

      Various legal actions, claims, assessments and other contingencies arising in the normal course of the Company’s business, including those matters described below, are pending against the Company and certain of its subsidiaries. Certain of these matters involve or may involve significant claims for compensatory, punitive or other damages. These matters are subject to many uncertainties, and it is possible that some of these matters could be ultimately decided, resolved or settled adversely. The Company has recorded accruals for losses related to those matters that it considers to be probable and that can be reasonably estimated. Although the ultimate amount of liability at March 31, 2002, that may result from those matters for which the Company has recorded accruals is not ascertainable, the Company believes that any amounts exceeding the Company’s recorded accruals should not materially affect the Company’s financial condition. It is possible, however, that the ultimate resolution of these matters could result in a material adverse effect on the Company’s results of operations for a particular reporting period.

      Federal, state and local laws and regulations relating to health and the environment affect nearly all of the operations of the Company. As is the case with all companies engaged in similar industries, the Company faces significant exposure from actual or potential claims and lawsuits involving environmental matters. These matters include soil and water contamination, air pollution and personal injuries or property damage allegedly caused by substances manufactured, handled, used, released or disposed of by the Company. Future expenditures related to health and environmental matters cannot be reasonably quantified in many circumstances for various reasons, including the speculative nature of remediation and clean-up cost estimates and methods, imprecise and conflicting data regarding the hazardous nature of various types of substances, the number of other potentially responsible parties involved, various defenses which may be available to the Company and changing environmental laws and interpretations of environmental laws.

      In June 2001, the New Mexico Environment Department (“NMED”) issued four compliance orders (“Orders”) to the Company in connection with alleged violations of air regulations at the Company’s Ciniza

F-43

GIANT INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

and Bloomfield refineries. The Orders allege violations discovered during NMED inspections in 1999 and 2000. The civil penalties proposed in connection with the Orders originally totaled approximately $550,000. The Company settled the alleged violations for $135,000 during the first quarter of 2002.

      In 1973, the Company constructed the Farmington Refinery that was operated until 1982. The Company became aware of soil and shallow groundwater contamination at this facility in 1985. The Company hired environmental consulting firms to investigate the contamination and undertake remedial action. The consultants identified several areas of contamination in the soils and shallow groundwater underlying the Farmington property. A consultant to the Company has indicated that contamination attributable to past operations at the Farmington property has migrated off the refinery property, including a hydrocarbon plume that appears to extend no more than 1,800 feet south of the refinery property. Remediation activities are ongoing by the Company under the supervision of the New Mexico Oil Conservation Division (“OCD”), although no cleanup order has been received. The Company’s environmental reserve for this matter is approximately $570,000.

      The Farmington property is located adjacent to the Lee Acres Landfill (the “Landfill”), a closed landfill formerly operated by San Juan County, which is situated on lands owned by the United States Bureau of Land Management (the “BLM”). Industrial and municipal wastes were disposed of in the Landfill by numerous sources. While the Landfill was operational, the Company used it to dispose of office trash, maintenance shop trash, used tires and water from the Farmington Refinery’s evaporation pond.

      The Landfill was added to the National Priorities List as a Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA”) Superfund site in 1990. In connection with this listing, the Environmental Protection Agency (“EPA”) defined the site as the Landfill and the Landfill’s associated groundwater plume. EPA excluded any releases from the Farmington refinery itself from the definition of the site. In May 1991, EPA notified the Company that it may be a potentially responsible party under CERCLA for the release or threatened release of hazardous substances, pollutants or contaminants at the Landfill.

      BLM made a proposed plan of action for the Landfill available to the public in 1996. Remediation alternatives examined by BLM in connection with the development of its proposed plan ranged in projected cost from no cost to approximately $14,500,000. BLM proposed the adoption of a remedial action alternative that it believes would cost approximately $3,900,000 to implement. BLM’s $3,900,000 cost estimate is based on certain assumptions that may or may not prove to be correct and is contingent on confirmation that the remedial actions, once implemented, are adequately addressing Landfill contamination. For example, if assumptions regarding groundwater mobility and contamination levels are incorrect, BLM is proposing to take additional remedial actions with an estimated cost of approximately $1,800,000.

      BLM has received public comment on its proposed plan. The final remedy for the site, however, has not yet been selected. Although the Company was given reason to believe that a final remedy would be selected in 2001, that selection did not occur. The Company has been advised that the site remedy may be announced in 2002. In 1989, a consultant to the Company estimated, based on various assumptions, that the Company’s share of potential liability could be approximately $1,200,000. This figure was based upon estimated Landfill remediation costs significantly higher than those being proposed by BLM. The figure also was based on the consultant’s evaluation of such factors as available clean-up technology, BLM’s involvement at the site and the number of other entities that may have had involvement at the site, but did not include an analysis of all of the Company’s potential legal defenses and arguments, including possible setoff rights.

      Potentially responsible party liability is joint and several, such that a responsible party may be liable for all of the clean-up costs at a site even though the party was responsible for only a small part of such costs. Although it is possible that the Company may ultimately incur liability for clean-up costs associated with the Landfill, a reasonable estimate of the amount of this liability, if any, cannot be made at this time because, among other reasons, the final site remedy has not been selected, a number of entities had involvement at the

F-44

GIANT INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

site, allocation of responsibility among potentially responsible parties has not yet been made, and potentially applicable factual and legal issues have not been resolved. Based on current information, the Company does not believe that it needs to record a liability in relation to BLM’s proposed plan.

      BLM may assert claims against the Company and others for reimbursement of investigative, cleanup and other costs incurred by BLM in connection with the Landfill and surrounding areas. It is also possible that the Company will assert claims against BLM in connection with contamination that may be originating from the Landfill. Private parties and other governmental entities also may assert claims against BLM, the Company and others for property damage, personal injury and other damages allegedly arising out of any contamination originating from the Landfill and the Farmington property. Parties also may request judicial determination of their rights and responsibilities, and the rights and responsibilities of others, in connection with the Landfill and the Farmington property. Currently, however, there is no outstanding litigation against the Company by BLM or any other party.

      In connection with the acquisition of the Bloomfield Refinery, the Company assumed certain environmental obligations including Bloomfield Refining Company’s (“BRC”) obligations under an administrative order issued by EPA in 1992 pursuant to the Resource Conservation and Recovery Act (the “Order”). The Order required BRC to investigate and propose measures for correcting any releases of hazardous waste or hazardous constituents at or from the Bloomfield Refinery. EPA has delegated its oversight authority over the Order to NMED’s Hazardous Waste Bureau (“HWB”). In 2000, OCD approved the groundwater discharge permit for the refinery, which included an abatement plan that addressed the Company’s environmental obligations under the Order. The abatement plan reflects new information relating to the site as well as remediation methods that were not originally contemplated in connection with the Order. Discussions between OCD, HWB and the Company have resulted in proposed revisions to the abatement plan. Adoption of the abatement plan as the appropriate corrective action remedy under the Order would significantly reduce the Company’s corrective action costs. The Company estimates that remediation expenses associated with the abatement plan will be in the range of approximately $50,000 to $150,000, and will be incurred over a period of approximately 30 years. If the Company’s request is not granted, the Company estimates that remaining remediation expenses could range as high as $800,000, after taking into account first quarter 2002 expenditures, and could be as low as $600,000. The Company’s environmental reserve for this matter is approximately $800,000. If, as expected, the abatement plan is approved as submitted, the Company anticipates that the reserve will be reduced.

      The Company has discovered hydrocarbon contamination adjacent to a 55,000 barrel crude oil storage tank (the “Tank”) that was located in Bloomfield, New Mexico. The Company believes that all or a portion of the Tank and the 5.5 acres owned by the Company on which the Tank was located may have been a part of a refinery, owned by various other parties, that, to the Company’s knowledge, ceased operations in the early 1960s. Based upon a January 13, 2000 report filed with OCD, it appears possible that contaminated groundwater is contained within the property boundaries and does not extend offsite. The Company anticipates that OCD will not require remediation of offsite soil based upon the low contaminant levels found there. In the course of conducting cleanup activities approved by OCD, it was discovered that the extent of contamination was greater than anticipated. The Company received approval to conduct a pilot bioventing project to address remaining contamination at the site, which was completed on June 26, 2001, at a cost of approximately $15,000. Based on the results of the pilot project, the Company submitted a remediation plan to OCD that proposes the use of bioventing to address remaining contamination. The Company anticipates that it would incur approximately $150,000 in remediation expenses in connection with this plan over a period of one to two years, and the Company has created an environmental reserve in this amount. If the Company’s plan is not approved, the Company cannot reasonably estimate remaining remediation costs because, among other reasons, it does not know what remediation technology would be approved by OCD for use at the site.

F-45

GIANT INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

      As of March 31, 2002, the Company had an environmental liability accrual of approximately $2,300,000. Approximately $1,500,000 of this accrual is for the following previously discussed projects: (i) the remediation of the hydrocarbon plume that appears to extend no more than 1,800 feet south of the Company’s inactive Farmington Refinery; (ii) environmental obligations assumed in connection with the acquisition of the Bloomfield Refinery; and (iii) hydrocarbon contamination on and adjacent to the 5.5 acres that the Company owns in Bloomfield, New Mexico. The remaining amount of the accrual relates to the closure of certain solid waste management units at the Ciniza Refinery, which is being conducted in accordance with the refinery’s Resource Conservation and Recovery Act permit; closure of the Ciniza Refinery land treatment facility including post-closure expenses; and certain other smaller remediation projects. The environmental accrual is recorded in the current and long-term sections of the Company’s Condensed Consolidated Balance Sheets.

      On June 11, 2001, the Company filed claims against the United States Defense Energy Support Center (“DESC”) in connection with jet fuel that the Company sold to DESC from 1983 through 1994. The Company asserted that the DESC underpaid for the jet fuel in the approximate amount of $17,000,000. The Company believes that its claims are supported by recent federal court decisions, including decisions from the United States Court of Federal Claims, dealing with contract provisions similar to those contained in the contracts that are the subject of the Company’s claims. On March 12, 2002, the DESC denied the Company’s claims. The Company has 12 months to bring an action in the United States Court of Federal Claims relating to the denied claims. The DESC has indicated that it will counterclaim if the Company pursues its claims and will assert, based on its interpretation of the contract provisions, that the Company may owe additional amounts of approximately $4,900,000. The Company is evaluating its options. Due to the preliminary nature of this matter, there can be no assurance that the Company would ultimately prevail should it decide to pursue its claims nor is it possible to predict when any payment would be received if the Company were successful. Accordingly, the Company has not recorded a receivable for this claim.

      Giant Arizona leases approximately 8,176 square feet of space from a limited liability company in which the Company’s former Chairman and Chief Executive Officer (“CCEO”) owns a 51% interest. Pursuant to a sublease between Giant Arizona and a separate limited liability company controlled by its former CCEO, Giant Arizona subleases the space to such entity for use as an inn. The initial term for each of the lease and the sublease is for five years, terminating on June 30, 2003, with one option to renew for an additional five years, and the annual rent under each currently is $21.76 per square foot. The rent is subject to adjustment annually based on changes in the Consumer Price Index. The sublease also provides that the Company may terminate the sublease at any time upon 120 days prior written notice. The owner of the 49% interest in the lessor has notified Giant Arizona that the sublessee is delinquent on the payment of the rent due, and on or about December 28, 2001, such owner filed a derivative lawsuit for and on behalf of the lessor against Giant Arizona to collect all amounts owing under the lease. The suit is for the recovery of rents past due and owing in excess of $156,990 from August 1, 2000 through the date of the complaint. The plaintiff claims that the amount owing currently approximates $275,000, and amounts will continue to accrue at a rate of approximately $22,000 per month plus interest. Pursuant to a letter dated January 16, 2002, Giant Arizona made a formal demand on the sublessee for the sublessee to pay all of the past due amounts. In addition, Giant Arizona filed a motion to dismiss the lawsuit for failure to comply with the express provisions of the Arizona derivative action statute or, alternatively, to compel binding arbitration pursuant to the terms of the lease. The court has ruled that the arbitration clause applies, and has referred the dispute to the arbitrators.

Note 7 — Other:

      In the first quarter of 2002, the Company revised its estimate for accrued management incentive bonuses for the year ended December 31, 2001, following the determination of bonuses to be paid to employees. This resulted in an increase in net earnings for the first quarter of 2002 of approximately $283,000 or $0.03 per share.

F-46

GIANT INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Note 8 — Yorktown Refinery Acquisition:

      On February 8, 2002, the Company entered into a definitive agreement with BP Corporation North America Inc. and BP Products North America Inc. (collectively, “BP”) to acquire the Yorktown refinery for $127,500,000, plus the value of associated inventory at closing, estimated to be approximately $53,200,000, the assumption of certain liabilities, and an earn-out. Pursuant to the terms of the agreement, the Company paid a $10,000,000 deposit to BP, which is refundable only in certain limited circumstances. The acquisition is expected to close in May 2002.

      As part of the Yorktown acquisition, the Company agreed to pay to BP, beginning in 2003 and concluding at the end of 2005, earn-out payments up to a maximum of $25,000,000 when the average monthly spreads for regular reformulated gasoline or No. 2 distillate over West Texas Intermediate (“WTI”) equivalent light crude oil on the New York Mercantile Exchange (the “MERC Spreads”) exceed $5.50 or $4.00 per barrel, respectively. The MERC Spreads are correlated with historical Yorktown refinery margins. The earn-out payment will equal the MERC Spreads multiplied by a fixed volume of 10,000 bpd each (approximately one-third of capacity of the Yorktown refinery). If the earn-out is triggered, the Company expects to benefit from the improved margins on any volumes in excess of 10,000 bpd, provided that the MERC Spreads are not excessively volatile. The average monthly MERC spreads for March 2002 were $8.62 and $2.41 for reformulated gasoline and No. 2 distillate, respectively.

      The Company will assume certain liabilities and obligations in connection with the Company’s purchase of the Yorktown refinery. These assumed liabilities include, subject to certain exceptions, all obligations and liabilities under health, safety and environmental laws caused by, arising from, incurred in connection with or relating in any way to the ownership of the Yorktown refinery or its operation. The Company has agreed to indemnify BP against losses of any kind incurred in connection with or related to the liabilities and obligations the Company will assume. As described below, the Company only has limited indemnification rights against BP.

      In particular, the Company will assume BP’s responsibilities and liabilities under a consent decree, dated August 29, 2001, among the United States, BP Exploration and Oil Co., Amoco Oil Company, and Atlantic Richfield Company. The consent decree requires the Yorktown refinery, among other things, to reduce NOx, SO₂ and particulate matter emissions and to upgrade the refinery’s leak detection and repair program. The Company estimates, and considered in its purchase price for the Yorktown refinery, that the Company will incur capital expenditures of approximately $20,000,000 to $27,000,000 to comply with the consent decree over a period of approximately five years, although the Company believes it will incur most of these expenditures in 2006. In addition, the Company estimates that it will incur operating expenses associated with the requirements of the consent decree of approximately $1,600,000 to $2,600,000 per year.

      BP has agreed to indemnify the Company for all losses that are incurred by the Company and relating to (a) BP’s breach or failure to perform any covenant or agreement in the agreement, (b) BP’s breach of a representation or warranty in the agreement that survives the closing of the Yorktown acquisition, (c) liabilities prior to the closing date for litigation, personal injury or wrongful death claims, or (d) BP’s failure to comply with bulk sales laws. In order to have a claim against BP for losses relating to any of these matters, the aggregate of all losses from these matters must exceed $4,000,000. Losses amounting to less than $250,000 in the aggregate arising out of the same occurrence or matter are not aggregated with other losses for the purpose of reaching the $4,000,000 threshold. After the threshold has been reached, BP has no obligation to indemnify the Company with respect to such matters for any losses amounting to less than $250,000 in the aggregate arising out of the same occurrence or matter.

      BP also has agreed to indemnify the Company for losses that are incurred by the Company and relating to liabilities prior to the closing date for taxes, including real property taxes, accounts payable, indebtedness for borrowed money, violations of anti-trust laws, environmental liabilities associated with off-site disposal,

F-47

GIANT INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

civil or criminal penalties imposed upon BP or its affiliates by governmental entities, expenses or brokerage fees related to the Yorktown acquisition and the excluded assets. There is no threshold or minimum claim amount that is required for the Company to seek a claim against BP for any of these matters.

      BP also has agreed to indemnify the Company for all losses that are incurred by the Company in connection with or related in any way to property damage caused by, or any environmental remediation required due to, a violation of health, safety and environmental laws during the operation of the refinery by BP (“Remediation Losses”). In order to have a claim against BP, however, the aggregate of all Remediation Losses must exceed $5,000,000, in which event the Company’s claim only relates to the amount exceeding $5,000,000 (the “First Threshold”). After the First Threshold is reached, the Company’s claim is limited to 50% of the amount by which the Remediation Losses exceed the First Threshold until the aggregate of all such losses exceeds $10,000,000 (the “Second Threshold”). After the Second Threshold is reached, the Company’s claim would be for 100% of the amount by which the Remediation Losses exceed the Second Threshold. In applying these provisions, Remediation Losses amounting to less than $250,000 in the aggregate arising out of the same occurrence or matter are not aggregated with any other Remediation Losses for purposes of determining whether and when the First Threshold or Second Threshold has been reached. After the First Threshold or Second Threshold has been reached, BP has no obligation to indemnify the Company with respect to such matters for any Remediation Losses amounting to less than $250,000 in the aggregate arising out of the same occurrence or matter.

      Except as specified, in order to seek indemnification from BP, the Company must notify BP of a claim within two years following the closing date. BP’s aggregate liability for indemnification under the refinery purchase agreement, including liability for environmental indemnification, is limited to $35,000,000.

      At the closing of the Yorktown acquisition, the Company expects to enter into agreements that provide for 100% of the supply of crude oil to, and 100% of the off-take (including propane and butane at prices based on an index) of production from, the Yorktown refinery. The Company anticipates these agreements will include: (a) transitional feedstock supply agreements, with terms ranging from six months to one year, by which BP will supply 100% of the refinery’s crude oil and other raw material needs; (b) a one-year contract with BP under which the Yorktown refinery will continue to supply BP’s branded product in the local area and Salisbury, Maryland; (c) the assumption of existing contracts with Exxon Mobil, Chevron, Citgo, Southern States, and Sunoco to supply them product on a wholesale basis; and (d) transitional contracts, with terms ranging from six months to one year, requiring BP to purchase the balance of production from the Yorktown refinery, estimated to be 33,400 bpd. Given market dynamics and conversations the Company has had with current and potential new customers, the Company believes there is sufficient demand to purchase all of the Yorktown refinery’s production once the transitional off-take agreements have expired.

      The Company intends to finance the acquisition of the Yorktown refinery with a combination of debt and cash on hand. The debt financing is anticipated to consist of borrowings under: (i) a new $100,000,000 senior secured revolving credit facility; (ii) a new $40,000,000 senior secured mortgage loan facility; and (iii) part of the proceeds from the issuance of $200,000,000 of 11% senior subordinated notes due 2012. The Company anticipates that transaction fees and expenses associated with the Yorktown refinery acquisition and the related financing transactions will be approximately $15,000,000.

New Senior Secured Revolving Credit Facility

      In connection with the Yorktown acquisition, the Company expects to enter into a $100,000,000 senior secured revolving credit facility provided by a syndicate of lenders led by Bank of America, N.A., an affiliate of Banc of America Securities LLC. The new senior secured revolving credit facility would replace the Company’s current $65,000,000 amended and restated credit agreement. The Company’s obligations under the new senior secured revolving credit facility will be guaranteed by certain of the Company’s subsidiaries and secured by a security interest in the Company’s personal property and the personal property of the

F-48

GIANT INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Company’s subsidiaries, including accounts receivable, inventory, contracts, chattel paper, trademarks, copyrights, patents, license rights, deposit and investment accounts and general intangibles, but excluding equipment, fixtures, rolling stock and the stock of the Company’s subsidiaries.

      The availability of borrowings under the new senior secured revolving credit facility will be limited to the lesser of the maximum commitment amount or the sum of the eligible accounts receivable (85% of regular accounts receivable and 90% of preferred accounts receivable) and eligible refinery hydrocarbon inventory (80% of refinery hydrocarbon inventory except for refinery hydrocarbon inventory at service stations and the travel center, which is calculated at 50%) plus 50% of eligible lubricants inventory and reduced by 100% of certain first purchase crude payables and amounts outstanding under letters of credit. The percentage of the Company’s borrowing base from eligible inventory is initially limited to 75% and will be reduced to 60% over time. The availability of borrowings will be determined weekly and advances of a minimum of $2,000,000 are required. The new senior secured revolving credit facility will be due and payable in full three years from closing.

      The new senior secured revolving credit facility will bear interest, at the Company’s option, at a spread over the euro dollar rate for one, two, three or six months as elected by the Company, or a spread over a base rate, which is defined as the higher of (a) the Federal Funds Rate plus  1/2 of 1% or (b) the reference rate announced by Bank of America, N.A. from time to time. The exact percentage will be determined by the Company’s total leverage ratio from time to time. The total leverage ratio is determined by dividing (a) consolidated funded indebtedness (the sum of borrowed money, off balance sheet leases, including synthetic leases, but excluding operating leases, obligations to redeem or purchase any of the Company’s capital stock or the capital stock of a subsidiary, and any guaranty of the foregoing obligations for the Company and the Company’s subsidiaries) by (b) EBITDA (as defined and adjusted in the new senior secured revolving credit facility) for the Company and the Company’s subsidiaries, determined on a pro forma basis taking into account the Yorktown acquisition. The Company also will pay a fee based upon the unused commitment of the facility at the rate of 0.5% per annum. The initial rate for borrowings under the new senior secured revolving credit facility will be the euro dollar rate plus 2.75%. The following table shows the relationship of the total leverage ratio and the various pricing options:

	Libor			Base
Total Leverage Ratio	Margin			Rate Margin
Less than or equal to 2.50		2.25	%		1.25	%
Greater than 2.50 but less than or equal to 3.50		2.50	%		1.50	%
Greater than 3.50		2.75	%		1.75	%

      The new senior secured revolving credit facility will contain negative covenants limiting, among other things, the Company’s ability, and the ability of the Company’s subsidiaries, to:

•  incur additional indebtedness;

•  create liens;

•  dispose of assets;

•  consolidate or merge;

•  make loans and investments;

•  enter into transactions with affiliates;

•  use loan proceeds for certain purposes;

•  guarantee obligations and incur contingent obligations;

F-49

GIANT INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

•  enter into agreements restricting the ability of subsidiaries to pay dividends to the Company;

•  make distributions or stock repurchases;

•  make significant changes in accounting practices or change the Company’s fiscal year; and

•  except on terms acceptable to the senior secured lenders, to prepay or modify subordinated indebtedness.

      The new senior secured revolving credit facility will require the Company to maintain certain financial ratios, each calculated on a pro forma basis for the Yorktown acquisition, including maintaining:

•  a minimum consolidated tangible net worth not less than the sum of (a) $99,110,000, which was 85% of consolidated tangible net worth at December 31, 2001, plus (b) 50% of positive consolidated net income on a cumulative basis for periods beginning January 1, 2002, plus (c) 75% of the proceeds of any equity offering after December 31, 2001;

•  a minimum fixed charge coverage ratio of not less than 1.1 to 1.0 for the prior four fiscal quarters (determined by a formula of the ratio of (a) consolidated EBITDA (as defined and adjusted in the new senior secured revolving credit facility), plus consolidated rents payable, plus earn-out payments to BP under the Yorktown refinery purchase agreement, less capital expenditures, less cash taxes, to (b) consolidated interest expense plus consolidated rents plus scheduled amortization of any indebtedness plus payments under the earn-out agreement);

•  a total leverage ratio of not greater than 4.25 to 1.0 for the prior four fiscal quarters with step-downs; and

•  a senior leverage ratio of consolidated senior indebtedness to consolidated EBITDA for the prior four fiscal quarters of not greater than 1.50 to 1.0.

      The Company’s failure to satisfy any of these financial covenants will be an event of default under the new senior secured revolving credit facility. The new senior secured revolving credit facility also will include other customary events of default, including, among other things, a cross-default to the Company’s other material indebtedness and certain changes of control.

      The foregoing description of the Company’s $100,000,000 new senior secured revolving credit facility is based upon the commitments and drafts of documents the Company’s lenders provided to the Company. The Company is in the process of finalizing the credit agreement, and the terms of the final credit agreement may vary from those described above.

New Senior Secured Mortgage Loan Facility

      In connection with the Yorktown acquisition, the Company expects to enter into a $40,000,000 senior secured mortgage loan facility provided by a syndicate of lenders led by Bank of America Facilities Leasing, LLC, an affiliate of Banc of America Securities LLC, as lead arranger and book manager. The Company and certain of the Company’s subsidiaries will guarantee the obligations under the facility.

      The Company will issue notes to the lenders, which will bear interest, at the Company’s option, at a spread over the euro dollar rate for one month of 4.25% per annum or the Bank of America prime rate plus 3.0%. The notes will fully amortize during the three-year term. The notes will be secured by a mortgage on and security interest in the Yorktown refinery property, fixtures and equipment, excluding inventory and accounts receivable.

F-50

GIANT INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

      The senior secured mortgage loan facility will contain negative covenants limiting the Company’s ability and the ability of the Company’s subsidiaries to, among other things:

•  incur debt;

•  create liens;

•  dispose of assets;

•  consolidate or merge;

•  make loans and investments;

•  enter into transactions with affiliates;

•  use loan proceeds for certain purposes;

•  guarantee obligations and incur contingent obligations;

•  pay dividends or make distributions or stock repurchases;

•  make significant changes in accounting practices; or

•  change the Company’s fiscal year.

      The Company’s failure to satisfy any of these financial covenants will be an event of default under the new senior secured mortgage loan facility. The new senior secured mortgage loan facility also will include other customary events of default, including, among other things, a cross-default to the Company’s other material indebtedness and certain changes of control.

      The new senior secured mortgage loan facility will require the Company to maintain certain financial ratios, including maintaining (a) ratios substantially the same as the new senior secured revolving credit facility and (b) total senior debt to tangible net worth (consolidated senior funded indebtedness to total consolidated net worth less intangible assets) ratio of not to exceed 1.65 to 1.

      The foregoing description of the Company’s new senior secured mortgage loan facility is based upon the commitments and drafts of documents the Company’s lenders provided the Company. The Company is in the process of finalizing the agreements relating to the new senior secured mortgage loan facility, and the terms of the final agreements may vary from those described above.

11% Senior Subordinated Notes due 2012

      In connection with the acquisition of the Yorktown refinery, the Company expects to issue $200,000,000 of 11% senior subordinated notes due 2012 (the “11% Notes”). The 11% Notes are being offered at a discount and the price to investors will be 97.0721%, plus accrued interest, if any. The 11% Notes mature on May 15, 2012, with interest payable semi-annually on May 15 and November 15 of each year.

      The indenture supporting the 11% Notes contains restrictive covenants that, among other things, restrict the ability of the Company and its subsidiaries to (i) pay dividends, or redeem or repurchase the Company’s stock or prepay indebtedness that is pari passu with, or subordinated in right of payment to, the 11% Notes; (ii) make certain types of investments; (iii) borrow money or sell preferred stock; (iv) create liens; (v) sell stock in the Company’s restricted subsidiaries; (vi) restrict dividends and other payments from the Company’s subsidiaries; (vii) enter into transactions with affiliates; and (viii) sell assets or merge with other companies. In addition, subject to certain conditions, the Company is obligated to offer to purchase a portion of the 11% Notes at a price equal to 100% of the principal amount thereof, plus accrued and unpaid interest, if any, to the date of purchase, with the net cash proceeds of certain sales or other dispositions of assets. Upon a

F-51

GIANT INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

change of control, the Company would be required to offer to purchase all of the 11% Notes at 101% of the principal amount thereof, plus accrued interest, if any, to the date of purchase.

      Repayment of the 11% Notes is fully and unconditionally guaranteed, jointly and severally, on a senior subordinated basis, by all of the Company’s existing and future domestic restricted subsidiaries.

      The Company may redeem the 11% Notes at the redemption prices indicated below, plus accrued but unpaid interest to the redemption date, at any time, in whole or in part, on or after May 15, 2007, if redeemed during the 12-month period beginning May 15 of the years indicated, as follows: 2007 — 105.5%, 2008 — 103.667%, 2009 — 101.833%, and 2010 and thereafter — 100%.

      In addition, at any time prior to May 15, 2007, the Company may redeem all or part of the 11% Notes at a redemption price equal to the sum of (i) the principal amount thereof, (ii) accrued and unpaid interest, if any, and (iii) the Make-Whole Premium. The “Make-Whole Premium” means the greater of (x) 1% of the principal amount of the 11% Note or (y) the excess of (A) the present value at the date of redemption of (1) the redemption price at May 15, 2007 as described above plus (2) all remaining required interest payments (exclusive of interest accrued and unpaid to the date of redemption) due on the 11% Note through May 15, 2007, computed using a discount equal to the Treasury Rate plus 50 basis points, over (B) the then outstanding principal amount of the 11% Note.

      In addition, on or before May 15, 2005, the Company may redeem up to 35% of the aggregate principal amount of the 11% Notes at the redemption price of 111% of the principal amount thereof, plus accrued and unpaid interest, if any, with the net cash proceeds from certain equity offerings. Such redemptions may only be made, however, if at least 65% of the aggregate principal amount of the 11% Notes originally issued remains outstanding after each such redemption.

F-52

REPORT OF INDEPENDENT AUDITORS

Board of Directors

BP Corporation North America Inc.

      We have audited the accompanying balance sheets of the Yorktown Refinery of BP Corporation North America Inc. as of December 31, 2001 and 2000, and the related statements of operations, parent company investment, and cash flows for the years then ended. These financial statements are the responsibility of BP Corporation North America Inc.’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

      We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

      In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Yorktown Refinery of BP Corporation North America Inc. at December 31, 2001 and 2000, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.

Chicago, Illinois

March 20, 2002

F-53

THE YORKTOWN REFINERY

OF BP CORPORATION NORTH AMERICA INC.

BALANCE SHEETS

(Millions of dollars)

			December 31,
									March 31,
			2000			2001			2002
									(Unaudited)
ASSETS
Current assets
	Accounts receivable		$	20.7		$	12.9		$	15.0
	Accounts receivable — affiliates			7.4			1.0			1.1
	Inventories			42.5			37.4			22.3
	Deferred tax			1.5			.8			.5
	Prepayments and other			.4			.1			.3
		Total current assets		72.5			52.2			39.2
Property, plant and equipment
	Property, plant and equipment – gross			245.1			249.3			250.4
	Accumulated depreciation and amortization			(149.6	)		(157.8	)		(159.8	)
		Net property plant and equipment		95.5			91.5			90.6
Total assets			$	168.0		$	143.7		$	129.8
LIABILITIES AND PARENT COMPANY INVESTMENT
LIABILITIES
Current liabilities
	Accounts payable		$	29.5		$	27.1		$	36.4
	Accounts payable — affiliates			37.8			11.1			11.7
	Accrued expenses			10.7			7.3			7.9
		Total current liabilities		78.0			45.5			56.0
Long term liabilities
	Environmental accruals			3.7			11.4			11.4
	Deferred income taxes			19.1			17.6			17.5
		Total long term liabilities		22.8			29.0			28.9
Parent company investment				67.2			69.2			44.9
Total liabilities and parent company investment			$	168.0		$	143.7		$	129.8

See accompanying notes to financial statements.

F-54

THE YORKTOWN REFINERY

OF BP CORPORATION NORTH AMERICA INC.

STATEMENTS OF OPERATIONS

(Millions of dollars)

									Three Months
			Year Ended						Ended
			December 31,						March 31,
			2000			2001			2001			2002
									(Unaudited)
Revenues
	Sales and other revenues		$	832.8		$	688.4		$	166.7		$	133.3
Costs and expenses
	Cost of products sold			735.8			588.5			142.0			126.5
	Operating expenses			40.3			76.5			15.7			13.1
	Selling, general and administrative			4.7			5.5			1.4			1.8
	Corporate overhead allocations			6.5			6.7			1.5			1.0
	Depreciation and amortization			8.1			8.2			1.9			2.0
		Total costs and expenses		795.4			685.4			162.5			144.4
Income (loss) before income taxes				37.4			3.0			4.2			(11.1	)
Income tax (provision) benefit				(14.6	)		(1.2	)		(1.6	)		4.3
Net income (loss)			$	22.8		$	1.8		$	2.6		$	(6.8	)

See accompanying notes to financial statements.

F-55

THE YORKTOWN REFINERY

OF BP CORPORATION NORTH AMERICA INC.

STATEMENTS OF PARENT COMPANY INVESTMENT

(Millions of dollars)

Balance at January 1, 2000	$	78.8
Net income		22.8
Net distributions to parent		(34.4	)
Balance at December 31, 2000		67.2
Net income		1.8
Net contributions by parent		.2
Balance at December 31, 2001		69.2
Net loss(a)		(6.8	)
Net distributions to parent(a)		(17.5	)
Balance at March 31, 2002(a)	$	44.9

(a)      Unaudited

See accompanying notes to financial statements.

F-56

THE YORKTOWN REFINERY

OF BP CORPORATION NORTH AMERICA INC.

STATEMENTS OF CASH FLOWS

(Millions of Dollars)

			Year Ended						Three Months
			December 31,						Ended March 31,
			2000			2001			2001			2002
									(Unaudited)
Operating activities
Net income (loss)			$	22.8		$	1.8		$	2.6		$	(6.8	)
Adjustments to reconcile net income (loss) to cash provided by (used in) operating activities:
	Depreciation and amortization			8.1			8.2			1.9			2.0
	Deferred income tax (benefit) provision			2.2			(.8	)		.1			.2
	Change in operating assets and liabilities:
		(Increase) decrease in accounts receivable		(.4	)		14.2			5.3			(2.2	)
		(Increase) decrease in inventories		(24.3	)		5.1			11.8			15.1
		(Increase) decrease in prepayments and other		(.1	)		.3			.1			(.2	)
		Increase (decrease) in accounts payable		28.4			(29.1	)		(25.3	)		9.9
		Increase (decrease) in accrued expenses		3.1			(3.4	)		(3.1	)		.6
		Increase (decrease) in environmental accruals		(2.3	)		7.7			(.4	)		—
Cash provided by (used in) operating activities				37.5			4.0			(7.0	)		18.6
Investing activities
Capital expenditures				(3.1	)		(4.2	)		(2.4	)		(1.1	)
Cash used in investing activities				(3.1	)		(4.2	)		(2.4	)		(1.1	)
Financing activities
Net (distributions to) contributions by parent				(34.4	)		.2			9.4			(17.5	)
Net cash (used in) provided by financing activities				(34.4	)		.2			9.4			(17.5	)
Cash and cash equivalents — beginning of period				—			—			—			—
Cash and cash equivalents — end of period			$	—		$	—		$	—		$	—

See accompanying notes to financial statements.

F-57

THE YORKTOWN REFINERY

OF BP CORPORATION NORTH AMERICA INC.

NOTES TO FINANCIAL STATEMENTS

Years Ended December 31, 2000 and 2001, and (Unaudited) Three Months Ended March 31, 2001 and 2002

Note A — Basis of Presentation

      On February 12, 2002, BP Corporation North America Inc. (the Company), an indirect wholly owned subsidiary of BP p.l.c., entered into an agreement (the Agreement) providing for the purchase by Giant Industries, Inc. (“Giant”) of substantially all of the Company’s Yorktown, Virginia refining business (the Refinery). The Refinery is located on the York River and has a crude oil processing capacity of approximately 62,000 barrels per day. The product slate, approximately 50% gasoline, also includes a wide range of products such as diesel fuel, heating oil and petroleum coke. The refinery serves the local area, as well as the New York Harbor.

      The accompanying special-purpose financial statements reflect the specific assets, liabilities and related operations of the Refinery to be purchased by Giant pursuant to the Agreement on a historical cost basis. The effects of the acquisition of the Refinery by Giant are not reflected in these special-purpose financial statements. The accompanying financial statements are not intended to be a complete presentation of the assets, liabilities or the results of operations of the Company or of the Refinery on a stand alone basis.

      The Refinery has certain shared assets and incurs certain common costs which relate to both the Refinery and other Company operations. As such, for purposes of preparing these special-purpose financial statements, management of the Company has made certain allocations of assets, liabilities and expenses to the Refinery. While the basis for allocating such costs is considered reasonable by management, amounts allocated to the Refinery could differ significantly from amounts that would otherwise be determined if the Refinery were operated on a stand alone basis.

      The parent company investment reflects the Company’s investment in the Refinery, accumulated earnings and losses of the Refinery and intercompany balances with the Company and other affiliates that are not settled on a current basis.

      The financial information included herein may not necessarily reflect the financial position, results of operations or cash flows of the Refinery in the future or what the financial position, results of operations or cash flows of the Refinery would have been if it had been a separate stand alone entity during the periods presented.

Note B — Accounting Policies

      Use of estimates: The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect reported amounts and disclosures in the notes to financial statements. Actual results could differ from the estimates and assumptions used.

      Inventories: Inventories are stated at cost, but not in excess of net realizable value. The cost of inventories is determined primarily by the last-in, first-out method (LIFO), except for materials and supplies, for which cost is determined using the average cost method.

F-58

THE YORKTOWN REFINERY

OF BP CORPORATION NORTH AMERICA INC.

NOTES TO FINANCIAL STATEMENTS — (Continued)

      Property, plant and equipment: Property, plant and equipment is stated at cost. Depreciation is computed on a straight-line basis over the estimated useful life generally as following:

Land improvements	20 years
Buildings	40 years
Machinery and equipment	20 years
Computers and telecom	3 to 5 years
Transportation equipment	3 to 5 years
Furniture and fixtures	10 years

      Expenditures for renewals and improvements that extend the useful life of an asset are capitalized. Expenditures for routine repairs and maintenance, including those for refinery turnarounds, are charged to operations when incurred. Property items retired or otherwise disposed of are removed from the property and related accumulated depreciation accounts. Any profit or loss is included in operations.

      Impairment of long-lived assets: Carrying amounts of long-lived assets are reviewed when events or circumstances indicate that such carrying amounts may not be recoverable. Assets that are to be held and used with recorded values that are not expected to be recovered through future cash flows are written down to current fair value. Fair value is generally determined from estimated discounted future net cash flows. Assets that are held for sale are reported at the lower of carrying amount or fair value less cost to sell.

      Environmental liabilities: The Refinery has provided in its accounts for the reasonably estimable future costs of probable environmental remediation obligations relating to current and past activities, including obligations for previously disposed assets. In the case of long-lived cleanup projects, the effects of inflation and other factors, such as improved application of known technologies and methodologies, are considered in determining the amount of estimated liabilities. The liability is undiscounted and primarily consists of costs such as site assessment, monitoring, equipment, utilities and soil and ground water treatment and disposal.

      Revenue recognition: Revenues from product sales are generally recognized upon delivery to customers. Sales to affiliates are made at internal transfer prices.

      Shipping, handling and other transportation costs: Shipping, handling and other transportation costs are included in costs and expenses.

      Fair value of financial instruments: The carrying value of receivables and payables, which is based on historical cost, approximates their fair value.

      Business segments: The Refinery operates in one business segment, the refining of petroleum products.

      New accounting pronouncements: Effective January 1, 2001, the Refinery adopted Financial Accounting Standards Board (FASB) Statement of Financial Accounting Standards No. 133, “Accounting for Derivative Instruments and Hedging Activities” (SFAS 133). The adoption of SFAS 133 did not have a significant effect on the results of operations or financial position of the Refinery.

      In June 2001, the FASB issued Statement of Financial Accounting Standards No. 143, “Accounting for Asset Retirement Obligations” (SFAS 143). SFAS 143 requires companies to record liabilities equal to the fair value of their asset retirement obligations when they are incurred. When the liability is initially recorded, companies capitalize an equivalent amount as part of the cost of the asset. Over time, the liability is accreted for the change in its present value each period, and the initial capitalized cost is depreciated over the useful life of the related asset. SFAS 143 is effective for accounting periods beginning after June 15, 2002. The Refinery has not yet determined the effect of adopting SFAS 143 on its results of operations and financial condition.

F-59

THE YORKTOWN REFINERY

OF BP CORPORATION NORTH AMERICA INC.

NOTES TO FINANCIAL STATEMENTS — (Continued)

      Effective January 1, 2002, the Refinery adopted Statement of Financial Accounting Standards No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets” (SFAS 144). SFAS 144 retains the requirement to recognize an impairment loss only where the carrying value of a long-lived asset is not recoverable from its undiscounted cash flows and to measure such loss as the difference between the carrying amount and fair value of the asset. SFAS 144, among other things, changes the criteria that have to be met to in order to classify an asset as held-for-sale and requires that operating losses from discontinued operations be recognized in the period that the losses are incurred rather than as of the measurement date. The adoption of SFAS 144 did not have a significant effect on the results of operations or financial position of the Refinery.

Note C — Inventories

      As a result of the use of the LIFO inventory valuation method, certain inventories are reported in the balance sheet at amounts less than current cost. Inventories valued under the LIFO method were approximately 90%, 88%, and 81% of total inventories in the balance sheet at December 31, 2000 and 2001, and March 31, 2002, respectively. The following is information about the current cost of inventories, determined primarily using the first-in, first-out method (in millions).

	December 31,
							March 31,
	2000			2001			2002
							(Unaudited)
Crude oil and other feedstocks	$	53.6		$	31.7		$	31.2
Refined and other finished products		38.6			29.2			24.4
Materials and supplies		4.2			4.4			4.3
		96.4			65.3			59.9
Excess of current cost over reported balance sheet amounts		(53.9	)		(27.9	)		(37.6	)
Reported balance sheet amounts	$	42.5		$	37.4		$	22.3

      In 2001, inventory volumes decreased resulting in a liquidation of LIFO inventory quantities carried at lower costs prevailing in prior years as compared with the cost of 2001 purchases. The effect of this liquidation was to decrease 2001 income before income taxes by $.1 million.

Note D — Property, Plant and Equipment

      Major classes of property, plant and equipment are as follows (in millions).

	December 31,
							March 31,
	2000			2001			2002
							(Unaudited)
Land	$	3.0		$	3.0		$	3.0
Buildings and land improvements		16.1			17.3			17.3
Machinery, equipment and other		226.0			229.0			230.1
		245.1			249.3			250.4
Accumulated depreciation and amortization		(149.6	)		(157.8	)		(159.8	)
	$	95.5		$	91.5		$	90.6

F-60

THE YORKTOWN REFINERY

OF BP CORPORATION NORTH AMERICA INC.

NOTES TO FINANCIAL STATEMENTS — (Continued)

Note E — Related Party Transactions

      The Refinery is part of a centralized cash management system whereby all cash disbursements of the Refinery are funded by, and all cash receipts are transferred to, the Company.

      The Refinery enters into transactions with the Company and its affiliates. Such transactions are made at prices that generally approximate market. Transactions involving the transfer of propane, butane and petroleum coke reflect fixed fee arrangements. Sales to the Company and its affiliates, sales to third parties and other revenues were as follows (in millions):

					Three Months
	Year Ended				Ended
	December 31,				March 31,
	2000		2001		2001		2002
					(Unaudited)
Sales to affiliates	$	262.9	$	311.1	$	78.5	$	38.8
Sales to third parties		568.4		375.9		88.0		94.3
Other revenues		1.5		1.4		.2		.2
	$	832.8	$	688.4	$	166.7	$	133.3

      Purchases of crude oil from the Company and its affiliates amounted to $243.0 million, $229.4 million, $66.3 million, and $47.0 million during the years ended December 31, 2000 and 2001, and three months ended March 31, 2001 and 2002, respectively.

      The Company provides the Refinery with various financial and administrative services for which the Refinery was charged associated direct costs and an allocation of certain centrally incurred costs. These services include, among others, information technology, research and development, tax, treasury, legal and employee benefit administration. For these services, the Refinery receives an allocation which amounted to $6.5 million, $6.7 million, $1.5 million and $1.0 million during the years ended December 31, 2000 and 2001, and three months ended March 31, 2001 and 2002, respectively. It is the policy of the Company to allocate centrally incurred costs primarily on the basis of usage or on estimated time spent. In the opinion of management, these allocations and charges have been made on a reasonable basis; however, they are not necessarily indicative of the level of expenses which might have been incurred had the Refinery been operating as a separate stand alone entity.

      Certain equipment in use at the Refinery is recorded under a capital lease between the Company and the Industrial Development Authority of York County, Virginia. This equipment had a net book value of nil at December 31, 2001, and is pledged as security for Environmental and Pollution Control Revenue Bonds which are recorded on the books of the Company. Amounts outstanding with respect to these bonds amounted to $3.3 million at December 31, 2001 and 2000, and these amounts are recorded as a component of parent company investment. Related interest expense, which was allocated to the Refinery by the Company, amounted to $.2 million during each of the years ended December 31, 2001 and 2000, and $.1 million during each of the three months ended March 31, 2002 and 2001, and is included in corporate overhead allocations.

Note F — Retirement Plans and Other Postretirement Benefits

      The Refinery participates in defined benefit retirement plans sponsored by the Company. The Company’s master defined benefit retirement plans cover substantially all domestic employees of the Company. The assets of these plans are held in U.S. and foreign equity securities, fixed income securities, interest bearing cash and real estate. Net pension expense (income) allocated to the Refinery amounted to $(.4) million, $(.7) million, $(.2) million and $.2 million during the years ended December 31, 2000 and 2001, and three months ended March 31, 2001 and 2002, respectively. Amounts allocated are principally determined based on payroll.

F-61

THE YORKTOWN REFINERY

OF BP CORPORATION NORTH AMERICA INC.

NOTES TO FINANCIAL STATEMENTS — (Continued)

      The Refinery participates in postretirement benefit plans sponsored by the Company. Through these plans, the Company provides certain health care and life insurance benefits for retired employees who meet eligibility requirements. These benefits are provided through insured and self-insured arrangements. Net postretirement benefit expense allocated to the Refinery amounted to $.6 million, $1.3 million, $.3 million and $.3 million during the years ended December 31, 2000 and 2001, and three months ended March 31, 2001 and 2002, respectively. Amounts allocated are principally determined based on payroll.

Note G — Income Taxes

      The results of operations of the Refinery are included in the consolidated income tax returns filed by its parent. The Refinery’s provision for income taxes is computed as if the Refinery filed its annual tax returns on a separate company basis. The current portion of the income tax provision is satisfied by the Refinery through a charge or credit to parent company investment.

      The (provision) benefit for income taxes consists of the following (in millions).

								Three Months
		Year Ended						Ended
		December 31,						March 31,
		2000			2001			2001			2002
								(Unaudited)
Current
	Federal	$	(10.5	)	$	(1.7	)	$	(1.4	)	$	3.8
	State		(1.9	)		(.3	)		(.2	)		.7
			(12.4	)		(2.0	)		(1.6	)		4.5
Deferred
	Federal		(1.9	)		.7			—			(.2	)
	State		(.3	)		.1			—			—
			(2.2	)		.8			—			(.2	)
		$	(14.6	)	$	(1.2	)	$	(1.6	)	$	4.3

      The (provision) benefit for income taxes differs from the amount computed by applying the statutory federal income tax rate as follows (in millions).

							Three Months
	Year Ended						Ended
	December 31,						March 31,
	2000			2001			2001			2002
							(Unaudited)
Income tax provision at statutory rate	$	(13.1	)	$	(1.1	)	$	(1.5	)	$	4.1
State income taxes, net of federal benefit		(1.5	)		(.1	)		(.1	)		.2
	$	(14.6	)	$	(1.2	)	$	(1.6	)	$	4.3

F-62

THE YORKTOWN REFINERY

OF BP CORPORATION NORTH AMERICA INC.

NOTES TO FINANCIAL STATEMENTS — (Continued)

      The major components of deferred tax assets and liabilities were as follows (in millions).

		December 31,
								March 31,
		2000			2001			2002
								(Unaudited)
Deferred tax liabilities
	Property, plant and equipment	$	22.9		$	23.7		$	23.3
Deferred tax assets
	Accrued liabilities		(5.3	)		(6.9	)		(6.3	)
Net deferred tax liability		$	17.6		$	16.8		$	17.0

Note H — Derivative Financial Instruments

      The Company enters into futures contracts to manage the commodity price risk associated with certain crude oil acquisition costs of the Refinery. These contracts are marked to market with gains (losses) included in cost of products sold and amounted to $9.7 million, $(11.9) million, $(3.7) million and $1.5 million for the years ended December 31, 2000 and 2001, and three months ended March 31, 2001 and 2002, respectively.

      The notional amount of outstanding contracts at March 31, 2002, and at December 31, 2001 and 2000 amounted to 11.7 million barrels, 5.7 million barrels and 3.8 million barrels, respectively. All of the open futures contracts at March 31, 2002 will be closed by June 2002.

Note I — Commitments and Contingencies

      Operating leases: The Refinery rents certain machinery and equipment under various operating leases that are renewable on an annual basis. Total rental expense for the years ended December 31, 2000 and 2001, and three months ended March 31, 2001 and 2002, amounted to $.6 million, $.8 million, $.2 million, and $.3 million, respectively.

      Receivables: Financial instruments that potentially subject the Refinery to concentration of credit risk consist principally of trade receivables. Substantially all of the Refinery’s non-affiliate accounts receivable are due from companies operating in various industries located in the eastern United States. Credit is extended based on an evaluation of the customer’s financial condition, and collateral or other forms of security are generally not required.

      Environmental matters: In the normal course of business, the Refinery is required to comply with the environmental standards and regulations of various regulatory agencies. Under these standards and regulations, the Refinery is subject to possible obligations to remove or mitigate the effects on the environment resulting from the placement, storage, disposal or release of certain chemical or petroleum substances by the Refinery or other parties.

      The Refinery is currently participating in the cleanup of several sites. The reasonably estimable future costs of probable environmental obligations, including the Refinery’s probable costs for obligations for which the Refinery is jointly and severally liable, have been provided for in the Refinery’s results of operations. During 2001, several environmental studies were completed. As a result of these studies, the results of operations for the year ended December 31, 2001 includes a pre-tax charge of $11.3 million relating to expected remediation costs associated with the refinery site. The accrued liability, which amounted to $14.9 million and $14.4 million at December 31, 2001 and March 31, 2002, respectively, represents a reasonable best estimate of the expenditures expected to be incurred in the future to remediate sites with known environmental obligations. As the scope of the obligations becomes better defined, there may be changes in the estimated future costs, which could result in charges against the Refinery’s future operations.

F-63

THE YORKTOWN REFINERY

OF BP CORPORATION NORTH AMERICA INC.

NOTES TO FINANCIAL STATEMENTS — (Continued)

      Litigation: The Refinery is engaged in various litigation and proceedings with private parties and governmental authorities and has a number of unresolved claims pending. While the amounts claimed in the aggregate are substantial and the ultimate liability in respect of such litigation, proceedings and claims cannot be determined at this time, management of the Refinery is of the opinion that the aggregate amount of any such liability will not have a material effect on the financial position of the Refinery or the results of its operations.

Note J — Results of Operations

      Repairs and maintenance: During 2001, a fire occurred at the Refinery. Costs incurred to repair certain equipment, included in 2001 operating expenses, amounted to $13.3 million. Also included in operating expenses for 2001 are costs related to a major turnaround of $9.7 million.

F-64

[GIANT INDUSTRIES, INC. LOGO]

OFFER TO EXCHANGE

$200,000,000 principal amount of its 11% Senior Subordinated Notes due 2012,

which have been registered under the Securities Act,

for any and all of its outstanding 11% Senior Subordinated Notes due 2012.

PROSPECTUS

, 2002

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

Item 20.     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 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

II-1

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 of 1933 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 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, 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 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, officer, employee or agent 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 shareholders (but shares owned by or voted under the control of persons who are parties to the proceeding shall not be voted.

      In addition, under Arizona law, the Arizona Subsidiaries are required to indemnify a director, officer, employee or agent 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, officer, employee or agent 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

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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 shareholders 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 shareholders; (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 shareholders (through shareholders’ 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.

      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 shareholders. 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.

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      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 shareholders for monetary damages for breach of fiduciary duties.

DeGuelle Oil Company

      Under provisions of the Colorado Business Corporation Act (the “Colorado Act”), each person who is or was a director or officer of DeGuelle Oil Company (“DeGuelle”) shall or may be indemnified by DeGuelle summarized as follows:

      (a) Under the Colorado Act, a person who is wholly successful on the merits in defense of a suit or proceeding brought against him by reason of the fact that he is a director or officer of the corporation shall be indemnified against reasonable expenses (including attorneys’ fees) in connection with such suit or proceeding;

      (b) Except as provided in subparagraph (c) below, a director may be indemnified under such law against both (1) reasonable expenses (including attorneys’ fees), and (2) judgments, penalties, fines and amounts paid in settlement, if he acted in good faith and reasonably believed, in the case of conduct in his official capacity as a director, that his conduct was in the corporation’s best interests, or in all other cases that his conduct was not opposed to the best interests of the corporation, and with respect to any criminal action, he had not reasonable cause to believe his conduct was unlawful, but the corporation may not indemnify the director if the director is found liable to the corporation or is found liable on the basis that personal benefit was improperly received by the director in connection with any suit or proceeding charging improper personal benefit to the director;

      (c) In connection with a suit or proceeding by or in the right of the corporation, indemnification is limited to reasonable expenses incurred in connection with the suit or proceeding, but the corporation may not indemnify the director if the director was found liable to the corporation; and

      (d) Officers of DeGuelle will be indemnified to the same extent as directors as described in (a) above and may be indemnified to the same extent as directors as described in (b) and (c) above. Employees, fiduciaries and agents of DeGuelle may also be indemnified and advanced expenses to the same extent as directors.

      DeGuelle 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 applicable standards of conduct. 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 shareholders.

      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 corporation with a written

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affirmation of his good faith belief that the person has met the standard of conduct necessary for indemnification by the corporation; (2) the person furnishes the corporation 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.

Item 21.     Exhibits and Financial Data Schedules

      (A) Exhibits

      The following is a list of all the exhibits filed as part of the exchange offer registration statement.

Definitions:

      Form S-1 — Refers to the Form S-1 Registration Statement under the Securities Act of 1933 as filed October 16, 1989, File No. 33-31584.

      Amendment No. 3 — Refers to the Amendment No. 3 to Form S-1 Registration Statement under the Securities Act of 1933 as filed December 12, 1989, File No. 33-31584.

      Form S-3 — Refers to the Form S-3 Registration Statement under the Securities Act of 1933 as filed September 22, 1993, File No. 33-69252.

Exhibit
No.		Description
	2.1	Definitive Agreement dated April 18, 1997, by and between Giant Four Corners, Inc., as “Buyer”, and Thriftway Marketing Corp. and Clayton Investment Company, collectively, as “Seller”. Incorporated by reference to Exhibit 2.1 to the Company’s Report on Form 8-K for the period May 28, 1997, File No. 1-10398.
	2.2	Stock Purchase Agreement dated April 30, 1997, by and among Phoenix Fuel Co., Inc., (the “Company”), J.W. Wilhoit, as Trustee of the Wilhoit Trust Agreement Dated 12/26/74, Katherine C. Lahowetz, as Trustee of the Theresa Ann Wilhoit Grantor Retained Annuity Trust Dated 4/4/97, Katherine C. Lahowetz, and Katherine C. Lahowetz, as Custodian for the Benefit of Emily Lahowetz, a minor (collectively, the “Shareholders”) and Giant Industries Arizona, Inc., (the “Purchaser”). Incorporated by reference to Exhibit 2.1 to the Company’s Report on Form 8-K for the period June 3, 1997, File No. 1-10398.
	2.3	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 the Company’s Annual Report on Form 10-K for fiscal year ended December 31, 2001, File No. 1-10398.
	3.1	Restated Certificate of Incorporation of Giant Industries, Inc., a Delaware corporation. Incorporated by reference to Exhibit 3.1 to Amendment No. 3.
	3.2	Bylaws of Giant Industries, Inc., a Delaware corporation, as amended September 9, 1999. Incorporated by reference to Exhibit 3.2 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 1999, File No. 1-10398.
	3.3	Articles of Incorporation of Giant Industries Arizona, Inc., an Arizona corporation (“Giant Arizona”), formerly Giant Acquisition Corp. Incorporated by reference to Exhibit 2.1, Annex V to Form S-1.
	3.4	Bylaws of Giant Arizona. Incorporated by reference to Exhibit 2.1, Annex VI to Form S-1.
	3.5	Articles of Incorporation of Ciniza Production Company. Incorporated by reference to Exhibit 3.7 to Form S-3.
	3.6	Bylaws of Ciniza Production Company. Incorporated by reference to Exhibit 3.8 to Form S-3.
	3.7	Articles of Incorporation of Giant Stop-N-Go of New Mexico, Inc. Incorporated by reference to Exhibit 3.9 to Form S-3.
	3.8	Bylaws of Giant Stop-N-Go of New Mexico, Inc. Incorporated by reference to Exhibit 3.10 to Form S-3.

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Exhibit
No.		Description
	3.9	Articles of Incorporation of Giant Four Corners, Inc. Incorporated by reference to Exhibit 3.11 to Form S-3.
	3.10	Bylaws of Giant Four Corners, Inc. Incorporated by reference to Exhibit 3.12 to Form S-3.
	3.11	Articles of Incorporation of Giant Mid-Continent, Inc. Incorporated by reference to Exhibit 3.13 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 1994, File No. 1-10398.
	3.12	Bylaws of Giant Mid-Continent, Inc. Incorporated by reference to Exhibit 3.14 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 1994, File No. 1-10398.
	3.13	Articles of Incorporation of San Juan Refining Company. Incorporated by reference to Exhibit 3.15 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 1995, File No. 1-10398.
	3.14	Bylaws of San Juan Refining Company. Incorporated by reference to Exhibit 3.16 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 1995, File No. 1-10398.
	3.15**	Amended and Restated Articles of Incorporation of Phoenix Fuel Co., Inc.
	3.16	Amended Bylaws of Phoenix Fuel Co., Inc. Incorporated by reference to Exhibit 3.18 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 1997, File No. 1-10398.
	3.17	Articles of Incorporation of DeGuelle Oil Company. Incorporated by reference to Exhibit 3.19 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 1998, File No. 1-10398.
	3.18**	Amended Bylaws of DeGuelle Oil Company.
	3.19	Articles of Incorporation of Giant Pipeline Company. Incorporated by reference to Exhibit 3.21 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 1999, File No. 1-10398.
	3.20	Bylaws of Giant Pipeline Company. Incorporated by reference to Exhibit 3.22 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 1999, File No. 1-10398.
	3.21	Certificate of Incorporation of Giant Yorktown, Inc. Incorporated by reference to Exhibit 3.21 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2001, File No. 1-10398.
	3.22	Bylaws of Giant Yorktown, Inc. Incorporated by reference to Exhibit 3.22 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2001, File No. 1-10398.
	3.23**	Certificate of Incorporation of Giant Yorktown Holding Company.
	3.24**	Bylaws of Giant Yorktown Holding Company.
	4.1	Indenture dated as of August 26, 1997, among the Company, 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 the Company’s Registration Statement on Form S-4 under the Securities Act of 1933 as filed October 9, 1997, File No. 333-37561.
	4.2**	Indenture, dated as of May 14, 2002, among the Company, 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.
	4.3**	Form of Exchange Note.
	5.1***	Opinion of Fennemore Craig, P.C., as to the legality of the Exchange Notes.
	10.1**	Second Amended and Restated Credit Agreement, dated May 14, 2002, among Giant Industries, Inc., Bank of America, N.A., as Administrative Agent and as Letter of Credit Issuing Bank and the Lenders parties thereto.
	10.2	Giant Industries, Inc. 1998 Stock Incentive Plan. Incorporated by reference to Appendix H to the Joint Proxy Statement/Prospectus included in the Company’s Registration Statement on Form S-4 under the Securities Act of 1933 as filed May 4, 1998, File No. 333-51785.

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Exhibit
No.		Description
	10.3	1989 Stock Incentive Plan of the Company. Incorporated by reference to Exhibit 10.1 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 1989, File No. 1-10398.
	10.4	Amendment No. 1 dated August 14, 1996, to 1989 Stock Incentive Plan. Incorporated by reference to Exhibit 10 to the Company’s Report on Form 10-Q for the quarter ended September 30, 1996, File No. 1-10398.
	10.5	ESOP Substitute Excess Deferred Compensation Benefit Plan. Incorporated by reference to Exhibit 10.8 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 1992, File No. 1-10398.
	10.6	Retail Lease dated July 1, 1998, between Pinnacle Citadel LLC (“Landlord”) and Giant Industries Arizona, Inc. (“Tenant”). Incorporated by reference to Exhibit 10.29 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 1998, File No. 1-10398.
	10.7	Sublease dated September 1, 2000, between Prime Pinnacle Peak Properties, Inc., (“Sublessee”) and Giant Industries Arizona, Inc., (“Sublessor”). Incorporated by reference to Exhibit 10.10 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2000, File No. 1-10398.
	10.8	Retail Lease dated July 1, 1998, between Pinnacle Citadel LLC (“Landlord”) and Giant Industries Arizona, Inc. (“Tenant”). Incorporated by reference to Exhibit 10.30 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 1998, File No. 1-10398.
	10.9	Retail Sublease dated July 1, 1998 between Giant Industries Arizona, Inc. (“Lessor”) and Pinnacle Inn at the Citadel LLC (“Tenant”). Incorporated by reference to Exhibit 10.31 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 1998, File No. 1-10398.
	10.10	Aircraft Lease Purchase Agreement dated as of June 21, 1991, between Metlife Capital Corporation and the Company. Incorporated by reference to Exhibit 10.1 to the Company’s Report on Form 10-Q for the quarter ended June 30, 1991, File No. 1-10398.
	10.11	Agreement dated September 17, 1998, between James E. Acridge (“Borrower”) and Giant Industries, Inc. (“Lender”). Incorporated by reference to Exhibit 10.34 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 1998, File No. 1-10398.
	10.12	Modification Agreement dated December 23, 1998, to Agreement dated September 17, 1998, between James E. Acridge (“Borrower”) and Giant Industries, Inc. (“Lender”). Incorporated by reference to Exhibit 10.36 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 1998, File No. 1-10398.
	10.13	Amended and Restated Loan Agreement dated March 20, 2000, between James E. Acridge (“Borrower”) and Giant Industries, Inc. (“Lender”). Incorporated by reference to Exhibit 10.26 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 1999, File No. 1-10398.
	10.14	Loan Modification Agreement dated February 28, 2001, by and among James E. Acridge (“Borrower”), Giant Industries, Inc., and Pinnacle Rodeo, L.L.C. Incorporated by reference to Exhibit 10.18 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2000, File No. 1-10398.
	10.15	First Amendment to Amended and Restated Promissory Note and Loan Modification Agreement dated March 28, 2001, by James E. Acridge and Giant Industries, Inc. Incorporated by reference to Exhibit 10.19 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2000, File No. 1-10398.
	10.16	Promissory Note for $4,000,000 dated September 17, 1998, from James E. Acridge to Giant Industries, Inc. Incorporated by reference to Exhibit 10.35 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 1998, File No. 1-10398.
	10.17	Amended and Restated Promissory Note for $5,000,000 dated December 23, 1998, from James E. Acridge to Giant Industries, Inc. Incorporated by reference to Exhibit 10.37 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 1998, File No. 1-10398.

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Exhibit
No.		Description
	10.18	Amended and Restated Promissory Note for $5,000,000 dated March 10, 2000, from James E. Acridge to Giant Industries, Inc. Incorporated by reference to Exhibit 10.27 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 1999, File No. 1-10398.
	10.19	Modification Agreement dated February 28, 2001, between James E. Acridge (“Borrower”) and Giant Industries, Inc. Incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2001, File No. 1-10398.
	10.20	Amended and Restated Promissory Note dated February 28, 2001. Incorporated by reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2001, File No. 1-10398.
	10.21	Fourth Amended and Restated Promissory Note dated March 28, 2001, from James E. Acridge to Giant Industries, Inc. Incorporated by reference to Exhibit 10.21 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2001, File No. 1-10398.
	10.22	Pledge and Security Agreement dated March 10, 2000 from James E. Acridge and Pinnacle Rodeo, L.L.C., to Giant Industries, Inc. Incorporated by reference to Exhibit 10.28 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 1999, File No. 1-10398.
	10.23	First Amendment dated March 9, 2001, to Pledge and Security Agreement dated March 10, 2000, from James E. Acridge and Pinnacle Rodeo, L.L.C., to Giant Industries, Inc. Incorporated by reference to Exhibit 10.24 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2000, File No. 1-10398.
	10.24	Pledge and Security Agreement dated March 28, 2001, by James E. Acridge in favor of Giant Industries, Inc. Incorporated by reference to Exhibit 10.25 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2000, File No. 1-10398.
	10.25	Purchase Agreement dated January 26, 2001 between James E. Acridge, Trustee, for and on behalf of the Acridge Family Trust (“Seller”), and Giant Industries, Inc. (“Buyer”). Incorporated by reference to Exhibit 10.26 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2000, File No. 1-10398.
	10.26	Deed of Trust dated January 26, 2001 by and among James E. Acridge, Trustee, for and on behalf of the Acridge Family Trust (“Trustor”), Giant Industries, Inc. (“Beneficiary”), and First American Title Insurance Company (“Trustee”). Incorporated by reference to Exhibit 10.27 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2000, File No. 1-10398.
	10.27	First Amendment dated February 12, 2001 to Purchase Agreement dated January 26, 2001, between James E. Acridge, Trustee, for and on behalf of the Acridge Family Trust, and Giant Industries, Inc. Incorporated by reference to Exhibit 10.28 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2000, File No. 1-10398.
	10.28	Second Amendment dated March 1, 2001, to Purchase Agreement dated January 26, 2001, between James E. Acridge, Trustee, for and on behalf of the Acridge Family Trust, and Giant Industries, Inc. Incorporated by reference to Exhibit 10.29 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2000, File No. 1-10398.
	10.29	Third Amendment dated March 9, 2001, to Purchase Agreement dated January 26, 2001, between James E. Acridge, Trustee, for and on behalf of the Acridge Family Trust, and Giant Industries, Inc. Incorporated by reference to Exhibit 10.30 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2000, File No. 1-10398.
	10.30	Rights Purchase Agreement dated September 20, 2001, by and between Giant Industries Arizona, Inc. and James E. Acridge, Trustee for and on behalf of the Acridge Family Trust. Incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2001, File No. 1-10398.
	10.31	Other Arrangements. Incorporated by reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2001, File No. 1-10398.
	10.32	Employment Agreement dated as of December 11, 1997, between James E. Acridge and the Company. Incorporated by reference to Exhibit 10.23 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 1997, File No. 1-10398.

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Exhibit
No.		Description
	10.33	Employment Agreement dated as of December 11, 1997, between Fredric L. Holliger and the Company. Incorporated by reference to Exhibit 10.24 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 1997, File No. 1-10398.
	10.34	Employment Agreement dated as of December 11, 1997, between Morgan Gust and the Company. Incorporated by reference to Exhibit 10.25 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 1997, File No. 1-10398.
	10.35	Consulting Agreement dated January 1, 1990, between the Company and Kalen and Associates. Incorporated by reference to Exhibit 10.66 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 1990, File No. 1-10398.
	10.36**	Registration Rights Agreement, dated as of May 14, 2002, among the Company, the Subsidiary Guarantors, Banc of America Securities, LLC, BNP Paribas Securities Corp. and Fleet Securities, Inc.
	10.37**	Purchase Agreement, dated May 9, 2002, among the Company, the Subsidiary Guarantors, Banc of America Securities, LLC, BNP Paribas Securities Corp. and Fleet Securities, Inc.
	10.38**	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 on Schedule IA thereto, as Lenders.
	12.1**	Statement of Computation of Ratios
	18.1	Letter regarding change in accounting principles. Incorporated by reference to Exhibit 18.1 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 1990, File No. 1-10398.
	21.1**	Subsidiaries of the Company.
	23.1**	Consent of Deloitte & Touche LLP.
	23.2**	Consent of Ernst & Young LLP.
	23.3***	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).
	24.2**	Board of Directors resolutions authorizing Powers of Attorney.
	25.1**	Statement of Eligibility of Trustee on Form T-1 of The Bank of New York under the Trust Indenture Act of 1939.
	99.1**	Form of Letter of Transmittal.
	99.2**	Form of Notice of Guaranteed Delivery.

**	Filed herewith.
***	To be filed by amendment.

      (B) Financial Statement Schedules

      The following financial statement schedule of Giant Industries, Inc. for the years ended December 31, 2001, 2000 and 1999 is incorporated by reference in this Registration Statement and should be read in conjunction with the Consolidated Financial Statements of Giant Industries, Inc.

Independent Auditors’ Report on Schedule	S-1
Schedule II — Valuation and Qualifying Accounts	S-2

      Schedules not listed above have been omitted because they are not applicable or are not required or because the information required to be set forth therein is included in the Consolidated Financial Statements or Notes thereto.

II-9

Item 22.     Undertakings

      The undersigned registrants hereby undertake:

      (a) 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 of 1933;

      (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 percent 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;

      (b) That, for the purpose of determining any liability under the Securities Act of 1933, 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.

      (c) 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.

      (d) To supply by means of a post-effective amendment all information concerning a transaction, and the company being acquired involved therein, that was not the subject of and included in the registration statement when it became effective.

      (e) That, for purposes of determining any liability under the Securities Act of 1933, each filing of the Company’s annual report pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan’s annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934) 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.

      (f) To respond to requests for information that is incorporated by reference into the prospectus pursuant to Item 4, 10(b), 11, or 13 of this form, within one business day of receipt of such request, and to send the incorporated documents by first class mail or equally prompt means. This includes information contained in documents filed subsequent to the effective date of the registration statement through the date of responding to the request.

      Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrants have been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrants will, unless in the opinion of their 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 Act and will be governed by the final adjudication of such issue.

II-10

SIGNATURES

      Pursuant to the requirements of the Securities Act of 1933, the Registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Scottsdale, State of Arizona on July 15, 2002.

GIANT INDUSTRIES, INC.

/s/ FREDRIC L. HOLLIGER

Fredric L. Holliger

Chairman of the Board

Chief Executive Officer and Director

POWER OF ATTORNEY

      Each of the undersigned hereby appoints Fredric L. Holliger, Mark Cox and Kim Bullerdick and each of them, with full power to act alone, as attorney and agents for the undersigned, with full power of substitution, for and in the name, place and stead of the undersigned, to sign and file with the Commission under the Securities Act any and all amendments and exhibits to this Registration Statement and any and all applications, instruments and other documents to be filed with the Commission pertaining to the registration of the securities covered hereby, with full power and authority to do and perform any and all acts and things whatsoever requisite or desirable.

      Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities indicated on July 15, 2002.

Signature	Title
/s/ FREDRIC L. HOLLIGER Fredric L. Holliger	Chairman of the Board, Chief Executive Officer and Director (Principal Executive Officer)
/s/ MARK B. COX Mark B. Cox	Chief Financial Officer (Principal Financial Officer)
/s/ GARY R. DALKE Gary R. Dalke	Chief Accounting Officer (Principal Accounting Officer)
/s/ JAMES E. ACRIDGE James E. Acridge	Director
/s/ ANTHONY J. BERNITSKY Anthony J. Bernitsky	Director
/s/ GEORGE M. RAPPORT George M. Rapport	Director

II-11

Signature	Title
/s/ RICHARD T. KALEN, JR. Richard T. Kalen, Jr.	Director
/s/ LARRY L. DEROIN Larry L. DeRoin	Director

II-12

SIGNATURES

      Pursuant to the requirements of the Securities Act of 1933, the Registrant has duly caused this Amendment to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Scottsdale, State of Arizona on July 15, 2002.

GIANT INDUSTRIES ARIZONA, INC.

/s/ FREDRIC L. HOLLIGER

Fredric L. Holliger,

Chief Executive Officer

POWER OF ATTORNEY

      Each of the undersigned hereby appoints Fredric L. Holliger, Mark Cox and Kim Bullerdick and each of them, with full power to act alone, as attorney and agents for the undersigned, with full power of substitution, for and in the name, place and stead of the undersigned, to sign and file with the Commission under the Securities Act any and all amendments and exhibits to this Registration Statement and any and all applications, instruments and other documents to be filed with the Commission pertaining to the registration of the securities covered hereby, with full power and authority to do and perform any and all acts and things whatsoever requisite or desirable.

      Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities indicated on July 15, 2002.

Signature	Title
/s/ FREDRIC L. HOLLIGER Fredric L. Holliger	Chief Executive Officer (Principal Executive Officer)
/s/ KIM H. BULLERDICK Kim H. Bullerdick	Director
/s/ MARK B. COX Mark B. Cox	Chief Financial Officer and Director (Principal Financial Officer)
/s/ GARY R. DALKE Gary R. Dalke	Chief Accounting Officer and Director (Principal Accounting Officer)

II-13

SIGNATURES

      Pursuant to the requirements of the Securities Act of 1933, the Registrant has duly caused this Amendment to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Scottsdale, State of Arizona on July 15, 2002.

CINIZA PRODUCTION COMPANY

/s/ FREDRIC L. HOLLIGER

Fredric L. Holliger

Chief Executive Officer

POWER OF ATTORNEY

      Each of the undersigned hereby appoints Fredric L. Holliger, Mark Cox and Kim Bullerdick and each of them, with full power to act alone, as attorney and agents for the undersigned, with full power of substitution, for and in the name, place and stead of the undersigned, to sign and file with the Commission under the Securities Act any and all amendments and exhibits to this Registration Statement and any and all applications, instruments and other documents to be filed with the Commission pertaining to the registration of the securities covered hereby, with full power and authority to do and perform any and all acts and things whatsoever requisite or desirable.

      Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities indicated on July 15, 2002.

Signature	Title
/s/ FREDRIC L. HOLLIGER Fredric L. Holliger	Chief Executive Officer (Principal Executive Officer)
/s/ KIM H. BULLERDICK Kim H. Bullerdick	Director
/s/ MARK B. COX Mark B. Cox	Chief Financial Officer and Director (Principal Financial Officer)
/s/ GARY R. DALKE Gary R. Dalke	Chief Accounting Officer and Director (Principal Accounting Officer)

II-14

SIGNATURES

      Pursuant to the requirements of the Securities Act of 1933, the Registrant has duly caused this Amendment to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Scottsdale, State of Arizona on July 15, 2002.

GIANT STOP-N-GO OF NEW MEXICO, INC.

/s/ FREDRIC L. HOLLIGER

Fredric L. Holliger

Chief Executive Officer

POWER OF ATTORNEY

      Each of the undersigned hereby appoints Fredric L. Holliger, Mark Cox and Kim Bullerdick and each of them, with full power to act alone, as attorney and agents for the undersigned, with full power of substitution, for and in the name, place and stead of the undersigned, to sign and file with the Commission under the Securities Act any and all amendments and exhibits to this Registration Statement and any and all applications, instruments and other documents to be filed with the Commission pertaining to the registration of the securities covered hereby, with full power and authority to do and perform any and all acts and things whatsoever requisite or desirable.

      Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities indicated on July 15, 2002.

Signature	Title
/s/ FREDRIC L. HOLLIGER Fredric L. Holliger	Chief Executive Officer (Principal Executive Officer)
/s/ KIM H. BULLERDICK Kim H. Bullerdick	Director
/s/ MARK B. COX Mark B. Cox	Chief Financial Officer and Director (Principal Financial Officer)
/s/ GARY R. DALKE Gary R. Dalke	Chief Accounting Officer and Director (Principal Accounting Officer)

II-15

SIGNATURES

      Pursuant to the requirements of the Securities Act of 1933, the Registrant has duly caused this Amendment to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Scottsdale, State of Arizona on July 15, 2002.

GIANT FOUR CORNERS, INC.

/s/ FREDRIC L. HOLLIGER

Fredric L. Holliger

Chief Executive Officer

POWER OF ATTORNEY

      Each of the undersigned hereby appoints Fredric L. Holliger, Mark Cox and Kim Bullerdick and each of them, with full power to act alone, as attorney and agents for the undersigned, with full power of substitution, for and in the name, place and stead of the undersigned, to sign and file with the Commission under the Securities Act any and all amendments and exhibits to this Registration Statement and any and all applications, instruments and other documents to be filed with the Commission pertaining to the registration of the securities covered hereby, with full power and authority to do and perform any and all acts and things whatsoever requisite or desirable.

      Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities indicated on July 15, 2002.

Signature	Title
/s/ FREDRIC L. HOLLIGER Fredric L. Holliger	Chief Executive Officer (Principal Executive Officer)
/s/ KIM H. BULLERDICK Kim H. Bullerdick	Director
/s/ MARK B. COX Mark B. Cox	Chief Financial Officer and Director (Principal Financial Officer)
/s/ GARY R. DALKE Gary R. Dalke	Chief Accounting Officer and Director (Principal Accounting Officer)

II-16

SIGNATURES

      Pursuant to the requirements of the Securities Act of 1933, the Registrant has duly caused this Amendment to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Scottsdale, State of Arizona on July 15, 2002.

PHOENIX FUEL CO., INC.

/s/ FREDRIC L. HOLLIGER

Fredric L. Holliger

Chief Executive Officer

POWER OF ATTORNEY

      Each of the undersigned hereby appoints Fredric L. Holliger, Mark Cox and Kim Bullerdick and each of them, with full power to act alone, as attorney and agents for the undersigned, with full power of substitution, for and in the name, place and stead of the undersigned, to sign and file with the Commission under the Securities Act any and all amendments and exhibits to this Registration Statement and any and all applications, instruments and other documents to be filed with the Commission pertaining to the registration of the securities covered hereby, with full power and authority to do and perform any and all acts and things whatsoever requisite or desirable.

      Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities indicated on July 15, 2002.

Signature	Title
/s/ FREDRIC L. HOLLIGER Fredric L. Holliger	Chief Executive Officer (Principal Executive Officer)
/s/ KIM H. BULLERDICK Kim H. Bullerdick	Director
/s/ MARK B. COX Mark B. Cox	Chief Financial Officer and Director (Principal Financial Officer)
/s/ GARY R. DALKE Gary R. Dalke	Chief Accounting Officer and Director (Principal Accounting Officer)

II-17

SIGNATURES

      Pursuant to the requirements of the Securities Act of 1933, the Registrant has duly caused this Amendment to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Scottsdale, State of Arizona on July 15, 2002.

SAN JUAN REFINING COMPANY

/s/ FREDRIC L. HOLLIGER

Fredric L. Holliger

Chief Executive Officer

POWER OF ATTORNEY

      Each of the undersigned hereby appoints Fredric L. Holliger, Mark Cox and Kim Bullerdick and each of them, with full power to act alone, as attorney and agents for the undersigned, with full power of substitution, for and in the name, place and stead of the undersigned, to sign and file with the Commission under the Securities Act any and all amendments and exhibits to this Registration Statement and any and all applications, instruments and other documents to be filed with the Commission pertaining to the registration of the securities covered hereby, with full power and authority to do and perform any and all acts and things whatsoever requisite or desirable.

      Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities indicated on July 15, 2002.

	Signature	Title
/s/ FREDRIC L. HOLLIGER Fredric L. Holliger		Chief Executive Officer (Principal Executive Officer)
/s/ KIM H. BULLERDICK Kim H. Bullerdick		Director
/s/ MARK B. COX Mark B. Cox		Chief Financial Officer and Director (Principal Financial Officer)
/s/ GARY R. DALKE Gary R. Dalke		Chief Accounting Officer and Director (Principal Accounting Officer)

II-18

SIGNATURES

      Pursuant to the requirements of the Securities Act of 1933, the Registrant has duly caused this Amendment to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Scottsdale, State of Arizona on July 15, 2002.

GIANT MID-CONTINENT, INC.

/s/ FREDRIC L. HOLLIGER

Fredric L. Holliger

Chief Executive Officer

POWER OF ATTORNEY

      Each of the undersigned hereby appoints Fredric L. Holliger, Mark Cox and Kim Bullerdick and each of them, with full power to act alone, as attorney and agents for the undersigned, with full power of substitution, for and in the name, place and stead of the undersigned, to sign and file with the Commission under the Securities Act any and all amendments and exhibits to this Registration Statement and any and all applications, instruments and other documents to be filed with the Commission pertaining to the registration of the securities covered hereby, with full power and authority to do and perform any and all acts and things whatsoever requisite or desirable.

      Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities indicated on July 15, 2002.

	Signature	Title
/s/ FREDRIC L. HOLLIGER Fredric L. Holliger		Chief Executive Officer (Principal Executive Officer)
/s/ KIM H. BULLERDICK Kim H. Bullerdick		Director
/s/ MARK B. COX Mark B. Cox		Chief Financial Officer and Director (Principal Financial Officer)
/s/ GARY R. DALKE Gary R. Dalke		Chief Accounting Officer and Director (Principal Accounting Officer)

II-19

SIGNATURES

      Pursuant to the requirements of the Securities Act of 1933, the Registrant has duly caused this Amendment to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Scottsdale, State of Arizona on July 15, 2002.

GIANT PIPELINE COMPANY

/s/ FREDRIC L. HOLLIGER

Fredric L. Holliger

Chief Executive Officer

POWER OF ATTORNEY

      Each of the undersigned hereby appoints Fredric L. Holliger, Mark Cox and Kim Bullerdick and each of them, with full power to act alone, as attorney and agents for the undersigned, with full power of substitution, for and in the name, place and stead of the undersigned, to sign and file with the Commission under the Securities Act any and all amendments and exhibits to this Registration Statement and any and all applications, instruments and other documents to be filed with the Commission pertaining to the registration of the securities covered hereby, with full power and authority to do and perform any and all acts and things whatsoever requisite or desirable.

      Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities indicated on July 15, 2002.

	Signature	Title
/s/ FREDRIC L. HOLLIGER Fredric L. Holliger		Chief Executive Officer (Principal Executive Officer)
/s/ KIM H. BULLERDICK Kim H. Bullerdick		Director
/s/ MARK B. COX Mark B. Cox		Chief Financial Officer and Director (Principal Financial Officer)
/s/ GARY R. DALKE Gary R. Dalke		Chief Accounting Officer and Director (Principal Accounting Officer)

II-20

SIGNATURES

      Pursuant to the requirements of the Securities Act of 1933, the Registrant has duly caused this Amendment to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Scottsdale, State of Arizona on July 15, 2002.

DEGUELLE OIL COMPANY

/s/ FREDRIC L. HOLLIGER

Fredric L. Holliger

Chief Executive Officer

POWER OF ATTORNEY

      Each of the undersigned hereby appoints Fredric L. Holliger, Mark Cox and Kim Bullerdick and each of them, with full power to act alone, as attorney and agents for the undersigned, with full power of substitution, for and in the name, place and stead of the undersigned, to sign and file with the Commission under the Securities Act any and all amendments and exhibits to this Registration Statement and any and all applications, instruments and other documents to be filed with the Commission pertaining to the registration of the securities covered hereby, with full power and authority to do and perform any and all acts and things whatsoever requisite or desirable.

      Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities indicated on July 15, 2002.

	Signature	Title
/s/ FREDRIC L. HOLLIGER Fredric L. Holliger		Chief Executive Officer (Principal Executive Officer)
/s/ KIM H. BULLERDICK Kim H. Bullerdick		Director
/s/ MARK B. COX Mark B. Cox		Chief Financial Officer and Director (Principal Financial Officer)
/s/ GARY R. DALKE Gary R. Dalke		Chief Accounting Officer and Director (Principal Accounting Officer)

II-21

SIGNATURES

      Pursuant to the requirements of the Securities Act of 1933, the Registrant has duly caused this Amendment to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Scottsdale, State of Arizona on July 15, 2002.

GIANT YORKTOWN, INC.

/s/ FREDRIC L. HOLLIGER

Fredric L. Holliger

Chief Executive Officer

POWER OF ATTORNEY

      Each of the undersigned hereby appoints Fredric L. Holliger, Mark Cox and Kim Bullerdick and each of them, with full power to act alone, as attorney and agents for the undersigned, with full power of substitution, for and in the name, place and stead of the undersigned, to sign and file with the Commission under the Securities Act any and all amendments and exhibits to this Registration Statement and any and all applications, instruments and other documents to be filed with the Commission pertaining to the registration of the securities covered hereby, with full power and authority to do and perform any and all acts and things whatsoever requisite or desirable.

      Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities indicated on July 15, 2002.

	Signature	Title
/s/ FREDRIC L. HOLLIGER Fredric L. Holliger		Chief Executive Officer (Principal Executive Officer)
/s/ KIM H. BULLERDICK Kim H. Bullerdick		Director
/s/ MARK B. COX Mark B. Cox		Chief Financial Officer and Director (Principal Financial Officer)
/s/ GARY R. DALKE Gary R. Dalke		Chief Accounting Officer and Director (Principal Accounting Officer)

II-22

SIGNATURES

      Pursuant to the requirements of the Securities Act of 1933, the Registrant has duly caused this Amendment to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Scottsdale, State of Arizona on July 15, 2002.

GIANT YORKTOWN HOLDING COMPANY

/s/ FREDRIC L. HOLLIGER

Fredric L. Holliger

Chief Executive Officer

POWER OF ATTORNEY

      Each of the undersigned hereby appoints Fredric L. Holliger, Mark Cox and Kim Bullerdick and each of them, with full power to act alone, as attorney and agents for the undersigned, with full power of substitution, for and in the name, place and stead of the undersigned, to sign and file with the Commission under the Securities Act any and all amendments and exhibits to this Registration Statement and any and all applications, instruments and other documents to be filed with the Commission pertaining to the registration of the securities covered hereby, with full power and authority to do and perform any and all acts and things whatsoever requisite or desirable.

      Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities indicated on July 15, 2002.

	Signature	Title
/s/ FREDRIC L. HOLLIGER Fredric L. Holliger		Chief Executive Officer (Principal Executive Officer)
/s/ KIM H. BULLERDICK Kim H. Bullerdick		Director
/s/ MARK B. COX Mark B. Cox		Chief Financial Officer and Director (Principal Financial Officer)
/s/ GARY R. DALKE Gary R. Dalke		Chief Accounting Officer and Director (Principal Accounting Officer)

II-23

EXHIBIT INDEX

Exhibit No.		Description
	3.15	Amended and Restated Articles of Incorporation of Phoenix Fuel Co., Inc.
	3.18	Amended Bylaws of DeGuelle Oil Company.
	3.23	Certificate of Incorporation of Giant Yorktown Holding Company.
	3.24	Bylaws of Giant Yorktown Holding Company.
	4.2	Indenture, dated as of May 14, 2002, among the Company, 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.
	4.3	Form of Exchange Note.
	10.1	Second Amended and Restated Credit Agreement, dated May 14, 2002, among Giant Industries, Inc., Bank of America, N.A., as Administrative Agent and as Letter of Credit Issuing Bank and the Lenders parties thereto.
	10.36	Registration Rights Agreement, dated as of May 14, 2002, among the Company, the Subsidiary Guarantors, Banc of America Securities, LLC, BNP Paribas Securities Corp. and Fleet Securities, Inc.
	10.37	Purchase Agreement, dated May 9, 2002, among the Company, the Subsidiary Guarantors, Banc of America Securities, LLC, BNP Paribas Securities Corp. and Fleet Securities, Inc.
	10.38	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 on Schedule IA thereto, as Lenders.
	12.1	Statement of Computation of Ratios.
	21.1	Subsidiaries of the Company.
	23.1	Consent of Deloitte & Touche LLP.
	23.2	Consent of Ernst & Young LLP.
	24.1	Powers of Attorney (included in the signature pages of this Registration Statement).
	24.2	Board of Directors resolutions authorizing Powers of Attorney.
	25.1	Statement of Eligibility of Trustee of Form T-1 of The Bank of New York under the Trust Indenture Act of 1939.
	99.1	Form of Letter of Transmittal.
	99.2	Form of Notice of Guaranteed Delivery.

EX-3.15

                                                                   EXHIBIT 3.15


                      ARTICLES OF AMENDMENT AND RESTATEMENT

                                       OF

                             PHOENIX FUEL CO., INC.


         Pursuant to the provisions of A.R.S. Sections 10-1006 and 10-1007,
Phoenix Fuel Co., Inc., an Arizona corporation, hereby adopts the following
Amended and Restated Articles of Incorporation and certifies as follows:

         FIRST:  The name of the corporation is Phoenix Fuel Co., Inc.

         SECOND: The Articles of Incorporation are amended and restated as set
forth in Exhibit "A" attached hereto and incorporated herein by this reference.

         THIRD: The Amended and Restated Articles of Incorporation contain an
amendment to the Articles of Incorporation requiring shareholder approval.

         FOURTH: The Amended and Restated Articles of Incorporation were adopted
by the shareholder and the board of directors of the corporation on May 1, 2002,
in the manner prescribed by the Arizona General Corporation Law.

         FIFTH: As of the date of adopting the amendment, there were 560 shares
of common stock outstanding and entitled to vote. All shares of common stock
entitled to vote voted to approve the amendment, which was a sufficient number
to approve the amendment.

         SIXTH: The Amended and Restated Articles of Incorporation remove any
reference to par value for shares of the corporation.

         SEVENTH: The Amended and Restated Articles of Incorporation supersede
the original Articles of Incorporation and all amendments thereto in their
entirety.

         DATED: May 1, 2002.

                                         Phoenix Fuel Co., Inc.,
                                         an Arizona corporation


                                         By:      /s/ Gary R. Dalke
                                            ------------------------------------
                                              Gary R. Dalke, Vice President

                                   EXHIBIT "A"

                 AMENDED AND RESTATED ARTICLES OF INCORPORATION
                                       OF
                             PHOENIX FUEL CO., INC.


                                     I. NAME

         The name of the corporation is Phoenix Fuel Co., Inc.

                             II. AUTHORIZED CAPITAL

         The corporation shall have authority to issue 5,000 shares of Common
Stock.

                        III. PURPOSE AND INITIAL BUSINESS

         The corporation is organized for the purpose of transacting all lawful
business for which corporations may be organized under the laws of the State of
Arizona, as amended from time to time. The corporation initially intended to
conduct in the State of Arizona the business of buying, selling, marketing,
transporting and otherwise dealing in petroleum products.

                         IV. CURRENT BOARD OF DIRECTORS

         The current Board of Directors consists of three members, who shall
serve as directors until their successors are elected and qualified, and whose
names and address are as follows:

                                Kim H. Bullerdick
                                   Mark B. Cox
                                  Gary R. Dalke
                             23733 N. Scottsdale Rd.
                              Scottsdale, AZ 85255


                               V. STATUTORY AGENT

         CT Corporation System, 3225 North Central Avenue, Phoenix, Arizona
85012 is the statutory agent for the corporation for the State of Arizona.

                           VI. KNOWN PLACE OF BUSINESS

         The street address of the corporation's known place of business is 2343
North 27th Avenue Phoenix, Arizona 85009.

                     VII. ELIMINATION OF DIRECTOR LIABILITY

         To the fullest extent permitted by the Arizona Revised Statutes as the
same exist or may be hereafter amended, no director of the corporation shall be
liable to the corporation or its shareholders for monetary damages for any
action taken or any failure to take any action as a director. No repeal,
amendment or modification of this article, whether direct or indirect, shall
eliminate or reduce its effect with respect to any act or failure to act of a
director of the corporation occurring prior to such repeal, amendment or
modification.

                              VIII. INDEMNIFICATION

         To the fullest extent permitted by the Arizona Revised Statutes as the
same exist or may be hereafter amended, the corporation shall indemnify and
advance expenses to any person who incurs expenses or liabilities by reason of
the fact he or she is or was an officer or director of the corporation or is or
was serving at the request of the corporation as a director, officer, employee
or agent of another foreign or domestic corporation, partnership, joint venture,
trust, employee benefit plan or other entity. The foregoing indemnification and
advancement of expenses shall be mandatory in all circumstances in which the
same are permitted by law. No repeal, amendment or modification of this article,
whether direct or indirect, shall eliminate or reduce its effect with respect to
any matter giving rise to indemnification and advancement of expenses occurring
prior to such repeal, amendment or modification.

EX-3.18

                                                                   EXHIBIT 3.18
                                     BY-LAWS
                                       OF
                              DE GUELLE OIL COMPANY
                           (AS AMENDED MARCH 29, 2002)


                               ARTICLE I. OFFICES

         The principal office of the corporation in the State of Colorado shall
be located in the City of Durango, County of La Plata. The corporation may have
such other offices, either within or without the State of Colorado, as the Board
of Directors may designate or as the business of the corporation may require
from time to time.

                            ARTICLE II. SHAREHOLDERS

         SECTION 1. Annual Meeting. The annual meeting of the shareholders shall
be held on the 1st day in the month of September in each year, beginning with
the year 1979, at the hour of 4 o'clock p.m., for the purpose of electing
Directors and for the transaction of such other business as may come before the
meeting. If the day fixed for the annual meeting shall be a legal holiday in the
State of Colorado, such meeting shall be held on the next succeeding business
day. If the election of Directors shall not be held on the day designated herein
for any annual meeting of the shareholders, or at any adjournment thereof, the
Board of Directors shall cause the election to be held at a special meeting of
the shareholders as soon thereafter as conveniently may be.

         SECTION 2. Special Meetings. Special meetings of the shareholders for
any purpose or purposes, unless otherwise prescribed by statute, may be called
by the President or by the Board of Directors, and shall be called by the
President at the request of the holders of not less than fifty percent of all
the outstanding shares of the corporation entitled to vote at the meeting.

         SECTION 3. Place of Meeting. The Board of Directors may designate any
place, either within or without the State of Colorado unless otherwise
prescribed by statute, as the place of meeting for any annual meeting or for any
special meeting called by the Board of Directors. A waiver of notice signed by
all shareholders entitled to vote at a meeting may designate any place, either
within or without the State of Colorado, unless otherwise prescribed by statute,
as the place for the holding of such meeting. If no designation is made, or if a
special meeting be otherwise called, the place of meeting shall be the principal
office of the corporation in the State of Colorado.

         SECTION 4. Notice of Meeting. Written notice stating the place, day and
hour of the meeting and, in case of special meeting, the purpose or purposes for
which the meeting is called, shall unless otherwise prescribed by statute, be
delivered not less than ten days nor more than thirty days before the date of
the meeting, either personally or by mail, by or at the direction of the
President, or the Secretary, or the persons calling the meeting. If mailed, such
notice shall be deemed to be delivered when deposited in the United States mail,
addressed to the shareholder at his address as it appears on the stock transfer
books of the corporation, with postage thereon prepaid.

         SECTION 5. Closing of Transfer Books or Fixing of Record Date. For the
purpose of determining shareholders entitled to notice of or to vote at any
meeting of shareholders or any adjournment thereof, or shareholders entitled to
receive payment of any dividend, or in order to make a determination of
shareholders for any other proper purpose, the Board of Directors of the
corporation may provide that the stock transfer books shall be closed for a
stated period but not to exceed, in any case, 30 days. If the stock transfer
books shall be closed for the purpose of determining shareholders entitled to


                                       1

notice of or to vote at a meeting of shareholders, such books shall be closed
for at least 30 days immediately preceding such meeting. In lieu of closing the
stock transfer books, the Board of Directors may fix in advance a date as the
record date for any such determination of shareholders, such date in any case to
be not more than 30 days and, in case of a meeting of shareholders, not less
than 30 days prior to the date on which the particular action, requiring such
determination of shareholders, is to be taken. If the stock transfer books are
not closed and no record date is fixed for the determination of shareholders
entitled to notice of or to vote at a meeting of shareholders, or shareholders
entitled to receive payment of a dividend, the date on which notice of the
meeting is mailed or the date on which the resolution of the Board of Directors
declaring such dividend is adopted, as the case may be, shall be the record date
for such determination of shareholders. When a determination of shareholders
entitled to vote at any meeting of shareholders has been made as provided in
this section, such determination shall apply to any adjournment thereof.

         SECTION 6. Voting Lists. The officer or agent having charge of the
stock transfer books for shares of the corporation shall make a complete list of
the shareholders entitled to vote at each meeting of shareholders or any
adjournment thereof, arranged in alphabetical order, with the address of and the
number of shares held by each. Such list shall be produced and kept open at the
time and place of the meeting and subject to the inspection of any shareholder
during the whole time of the meeting for the purposes thereof.

         SECTION 7. Quorum. A majority of the outstanding shares of the
corporation entitled to vote, represented in person or by proxy, shall
constitute a quorum at a meeting of shareholders. If less than a majority of the
outstanding shares are represented at a meeting, a majority of the shares so
represented may adjourn the meeting from time to time without further notice. At
such adjourned meeting at which a quorum shall be present or represented, any
business may be transacted which might have been transacted at the meeting as
originally noticed. The shareholders present at a duly organized meeting may
continue to transact business until adjournment, not withstanding the withdrawal
of enough shareholders to leave less than a quorum.

         SECTION 8. Proxies. At all meetings of shareholders, a shareholder may
vote in person or by proxy executed in writing by shareholder or by his duly
authorized attorney in fact. Such proxy shall be filed with the secretary of the
corporation before or at the time of the meeting. No proxy shall be valid after
one month from the date of its execution, unless otherwise provided in the
proxy.

         SECTION 9. Voting of Shares. Subject to the provisions of Section 12 of
this Article II, each outstanding share entitled to vote shall be entitled to
one vote upon each matter submitted to a vote at a meeting of shareholders. In
accordance with the Articles of Incorporation previously filed for this
corporation, cumulative voting of shares shall not be authorized.

         SECTION 10. Voting of Shares by Certain Holders. Shares standing in the
name of another corporation may be voted by such officer, agent or proxy as the
By-Laws of such corporation may prescribe, or, in the absence of such provision,
as the Board of Directors of such corporation may determine.

         Shares held by an administrator, executor, guardian or conservator may
be voted by him either in person or by proxy, without a transfer of such shares
into his name. Shares standing in the name of a trustee may be voted by him,
either in person or by proxy, but no trustee shall be entitled to vote shares
held by him without a transfer of such shares into his name.


                                       2

         Shares standing in the name of a receiver may be voted by such
receiver, and shares held by or under the control of a receiver may be voted by
such receiver without the transfer thereof into his name if authority so to do
be contained in an appropriate order of the court by which such receiver was
appointed.

         A shareholder whose shares are pledged shall be entitled to vote such
shares until the shares have been transferred into the name of the pledgee, and
thereafter the pledgee shall be entitled to vote the shares so transferred.

         Shares of its own stock belonging to the corporation shall not be
voted, directly or indirectly, at any meeting, and shall not be counted in
determining the total number of outstanding shares at any given time.

         SECTION 11. Informal Action by Shareholders. Unless otherwise provided
by law, any action required to be taken at a meeting of the shareholders, or any
other action which may be taken at a meeting of the shareholders, may be taken
without a meeting if a consent in writing, setting forth the action so taken,
shall be signed by all of the stockholders entitled to vote with respect to the
subject matter thereof.

                         ARTICLE III. BOARD OF DIRECTORS

         SECTION 1. General Powers. The business and affairs of the corporation
shall be managed by its Board of Directors.

         SECTION 2. Number, Tenure and Qualifications. The number of directors
of the corporation shall be three. Each director shall hold office until the
next annual meeting of shareholders and until his successor shall have been
elected and qualified.

         SECTION 3. Regular Meetings. A regular meeting of the Board of
Directors shall be held without other notice than this By-Law immediately after,
and at the same place as, the annual meeting of shareholders. The Board of
Directors may provide, by resolution, the time and place for the holding of
additional regular meetings without other notice than such resolution.

         SECTION 4. Special Meetings. Special meetings of the Board of Directors
may be called by or at the request of the President or any two directors. The
person or persons authorized to call special meetings of the Board of Directors
may fix the place for holding any special meeting of the Board of Directors
called by them.

         SECTION 5. Notice. Notice of any special meeting shall be given at
least ten days previously thereto by written notice delivered personally or
mailed to each director at his business address, or by telegram. If mailed, such
notice shall be deemed to be delivered when deposited in the United States mail
so addressed, with postage thereon prepaid. If notice be given by telegram, such
notice shall be deemed to be delivered when the telegram is delivered to the
telegraph company. Any director may waive notice of any meeting. The attendance
of a director at a meeting shall constitute a waiver of such meeting, except
where a director attends a meeting for the express purpose of objecting to the
transaction of any business because the meeting is not lawfully called or
convened.

         SECTION 6. Quorum. A majority of the number of directors fixed by
Section 2 of this Article III shall constitute a quorum for the transaction of
business at any meeting of the Board of Directors, but if less than such
majority is present at a meeting, a majority of the directors present may
adjourn the meeting from time to time without further notice.


                                       3

         SECTION 7. Manner of Acting. The act of the majority of the directors
present at a meeting at which a quorum is present shall be the act of the Board
of Directors.

         SECTION 8. Action Without a Meeting. Any action that may be taken by
the Board of Directors at a meeting may be taken without a meeting if a consent
in writing, setting forth the action so to be taken, shall be signed before such
action by all of the Directors.

         SECTION 9. Vacancies. Any vacancy occurring in the Board of Directors
may be filled by the affirmative vote of a majority of the remaining directors
though less than a quorum of the Board of Directors, unless otherwise provided
by law. A director elected to fill a vacancy shall be elected for the unexpired
term of his predecessor in office. Any directorship to be filled by reason of an
increase in the number of directors may be filled by election by the Board of
Directors for a term of office continuing only until the next election of
Directors by the shareholders.

         SECTION 10. Compensation. By resolution of the Board of Directors, each
Director may be paid his expenses, if any, of attendance at each meeting of the
Board of Directors, and may be paid a stated salary as Director or a fixed sum
for attendance at each meeting of the Board of Directors or both. No such
payment shall preclude any Director from serving the corporation in any other
capacity and receiving compensation therefor.

         SECTION 11. Presumption of Assent. A director of the corporation who is
present at a meeting of the Board of Directors at which action on any corporate
matter is taken shall be presumed to have assented to the action taken unless
his dissent shall be entered in the minutes of the meeting or unless he shall
file his written dissent to such action with the person acting as the secretary
of the meeting before the adjournment thereof or shall forward such dissent by
registered mail to the secretary of the corporation immediately after the
adjournment of the meeting. Such right to dissent shall not apply to a Director
who voted in favor of such action.

                              ARTICLE IV. OFFICERS

         SECTION 1. Number. The officers of the corporation shall be a
President, a Vice-President, a Secretary and a Treasurer, each of whom shall be
elected by the Board of Directors. Such other officers and assistant officers as
may be deemed necessary may be elected or appointed by the Board of Directors.

         SECTION 2. Election and Term of Office. The officers of the corporation
to be elected by the Board of Directors shall be elected annually by the Board
of Directors at the first meeting of the Board of Directors held after each
annual meeting of the shareholders. If the election of officers shall not be
held at such meeting, such election shall be held as soon thereafter as
conveniently may be. Each officer shall hold office until his successor shall
have been duly elected and shall have qualified or until his death or until he
shall resign or shall have been removed in the manner hereinafter provided.

         SECTION 3. Removal. Any officer or agent may be removed by the Board of
Directors whenever in its judgment, the best interests of the corporation will
be served thereby, but such removal shall be without prejudice to the contract
rights, if any, of the person so removed. Election or appointment of an officer
or agent shall not of itself create contract rights.

         SECTION 4. Vacancies. A vacancy in any office because of death,
resignation, removal, disqualification or otherwise, may be filled by the Board
of Directors for the unexpired portion of the term.


                                       4

         SECTION 5. President. The President shall be the principal executive
officer of the corporation and, subject to the control of the Board of
Directors, shall in general supervise and control all of the business and
affairs of the corporation. He shall, when present, preside at all meetings of
the shareholders and the Board of Directors. He may sign, with the Secretary or
any other proper officer of the corporation thereunto authorized by the Board of
Directors, certificates for shares of the corporation, any deeds, mortgages,
bonds, contracts, or other instruments which the Board of Directors has
authorized to be executed, except in cases where the signing and execution
thereof shall be expressly delegated by the Board of Directors or by these
By-Laws to some other officer or agent of the corporation, or shall be required
by law to be otherwise signed or executed; and in general shall perform all
duties incident to the office of President and such other duties as may be
prescribed by the Board of Directors from time to time.

         SECTION 6. Vice-President. In the absence of the President or in the
event of his death, inability or refusal to act, the Vice-President shall
perform the duties of the President, and when so acting, shall have all the
powers of and be subject to all the restrictions upon the President. The
Vice-President shall perform such other duties as from time to time may be
assigned to him by the President or by the Board of Directors.

         SECTION 7. Secretary. The Secretary shall: (a) keep the minutes of the
proceedings of the shareholders and of the Board of Directors in one or more
books provided for that purpose; (b) see that all notices are duly given in
accordance with the provisions of these By-Laws or as required by law; (c) be
custodian of the corporate records and of the seal of the corporation and see
that the seal of the corporation is affixed to all documents the execution of
which on behalf of the corporation under its seal is duly authorized; (d) keep a
register of the post office address of each shareholder which shall be furnished
to the Secretary by such shareholder; (e) sign with the President certificates
for shares of the corporation, the issuance of which shall have been authorized
by resolution of the Board of Directors; (f) have general charge of the stock
transfer books of the corporation; and (g) in general, perform all duties
incident to the office of Secretary and such other duties as from time to time
may be assigned to him by the President or by the Board of Directors.

         SECTION 8. Treasurer. The Treasurer shall: (a) have charge and custody
of and be responsible for all funds and securities of the corporation; (b)
receive and give receipts for moneys due and payable to the corporation from any
source whatsoever, and deposit all such moneys in the name of the corporation in
such banks, trust companies or other depositories as shall be selected in
accordance with the provisions of Article V of these By-laws; and (c) in
general, perform all of the duties incident to the office of Treasurer and such
other duties as from time to time may be assigned to him by the President or by
the Board of Directors. If required by the Board of Directors, the Treasurer
shall give a bond for the faithful discharge of his duties in such sum and with
such surety or sureties as the Board of Directors shall determine.

         SECTION 9. Salaries. The salaries of the officers shall be fixed from
time to time by the Board of Directors and no officer shall be prevented from
receiving such salary by reason of the fact that he is also a Director of the
corporation.

                ARTICLE V. CONTRACTS, LOANS, CHECKS AND DEPOSITS

         SECTION 1. Contracts. The Board of Directors may authorize any officer
or officers, agent or agents, to enter into any contract or execute and deliver
any instrument in the name of and on behalf of the corporation, and such
authority may be general or confined to specific instances.


                                       5

         SECTION 2. Checks, Drafts, Etc. All checks, drafts or other orders for
the payment of money, notes or other evidences of indebtedness issued in the
name of the corporation, shall be signed by such officer or officers, agent or
agents of the corporation and in such manner as shall from time to time be
determined by resolution of the Board of Directors.

         SECTION 3. Deposits. All funds of the corporation not otherwise
employed shall be deposited from time to time to the credit of the corporation
in such banks, trust companies or other depositories as the Board of Directors
may select.

             ARTICLE VI. CERTIFICATES FOR SHARES AND THEIR TRANSFER

         SECTION 1. Certificates for Shares. Certificates representing shares of
the corporation shall be in such form as shall be determined by the Board of
Directors. Such certificates shall be signed by the President and by the
Secretary or by such other officers authorized by law and by the Board of
Directors so to do, and sealed with the corporate seal. All certificates for
shares shall be consecutively numbered and otherwise identified. The name and
address of the person to whom the shares represented thereby are issued, with
the number of shares and date of issue, shall be entered on the stock transfer
books of the corporation. All certificates surrendered to the corporation for
transfer shall be cancelled and no new certificate shall be issued until the
former certificate for a like number of shares shall have been surrendered and
cancelled, except that in case of a lost, destroyed or mutilated certificate a
new one may be issued therefor upon such terms and indemnity to the corporation
as the Board of Directors prescribe.

         SECTION 2. Transfer of Shares. Transfer of shares of the corporation
shall be made only on the stock transfer books of the corporation by the holder
of record thereof or by his legal representative, who shall furnish proper
evidence of authority to transfer, or by his attorney thereunto authorized by
power of attorney duly executed and filed with the Secretary of the corporation,
and on surrender for cancellation of the certificate for such shares. The person
in whose name shares stand on the books of the corporation shall be deemed by
the corporation to be the owner thereof for all purposes.

         SECTION 3. Encumbrance of Stock. No shareholder shall encumber any of
his stock in the company without first obtaining written consent to do so from
all other shareholders. Any encumbered stock shall have attached thereto a
notice that in the event of foreclosure and transfer of said stock, the new
stockholder shall be required to offer the stock for sale to the corporation and
to the remaining stockholders under the same terms and conditions and at the
same price as set forth in Section 4 hereof.

         SECTION 4. Restrictions on Sale of Stock. In the event that any
shareholder desires to sell or transfer his shares for a valuable consideration,
such shareholder must first offer said stock for sale to the corporation and the
offer shall be in writing and delivered to the Board of Directors. Within 20
days after receipt of the written offer, the Board of Directors shall call a
meeting of the shareholders, at which meeting the stock shall be offered for
sale to the company for the purpose of retirement of the shares or to place the
same in treasury stock. The corporation may exercise its option to purchase as
of the day of the meeting. Any stock which is offered for sale to the company
and not purchased in accordance with the offer shall then be offered on a
proportionate ownership basis to the remaining stockholders who desire to
purchase said stock upon the same terms and conditions as set forth in the offer
made to the company. In the event that the stock is not purchased by the company
or by the shareholders, then the shareholder offering the stock for sale shall
be free to sell the same to any third person for the same or a greater price but
not for a lesser price than the price at which the stock was offered to the
corporation and the shareholders.


                                       6

                            ARTICLE VII. FISCAL YEAR

         The fiscal year of the corporation shall begin and end on such days as
the Board of Directors shall fix by resolution.

                             ARTICLE VIII. DIVIDENDS

         The Board of Directors may from time to time declare, and the
corporation may pay, dividends on its outstanding shares in the manner and upon
the terms and conditions provided by law and its Articles of Incorporation.

                           ARTICLE IX. CORPORATE SEAL

         The Board of Directors shall provide a corporate seal which shall be
circular in form and shall have inscribed thereon the name of the corporation
and the state of incorporation and the words, "Corporate Seal".

                          ARTICLE X. WAIVER OF NOTICE.

         Unless otherwise provided by law, whenever any notice is required to be
given to any shareholder or director of the corporation under the provisions of
these By-Laws or under the provisions of the Small Business Corporation Act, a
waiver thereof in writing, signed by the person or persons entitled to such
notice, whether before or after the time stated therein, shall be deemed
equivalent to the giving of such notice.

                             ARTICLE XI. AMENDMENTS

         These By-Laws may be altered, amended or repealed and new By-Laws may
be adopted by the Board of Directors at any regular or special meeting of the
Board of Directors.


                                       7

EX-3.23

                                                                    EXHIBIT 3.23

                          CERTIFICATE OF INCORPORATION

                                       OF

                         GIANT YORKTOWN HOLDING COMPANY



         1. The name of the Corporation is Giant Yorktown Holding Company (the
"Corporation").

         2. The address of the registered office of the Corporation in the State
of Delaware is Corporation Trust Center, 1209 Orange Street, in the City of
Wilmington, County of New Castle. The name of its registered agent at that
address is The Corporation Trust Company.

         3. The purpose of the Corporation is to engage in any lawful act or
activity for which corporations may be organized under the General Corporation
Law of the State of Delaware (the "DGCL").

         4. The total number of shares which the Corporation will have authority
to issue is 5,000 shares of common stock, par value $ 1.00 per share.

         5. The name and mailing address of the incorporator is Alan Lundgren at
23733 N. Scottsdale Road, Scottsdale, Arizona 85255.

The powers of the incorporator shall terminate upon the filing of this
Certificate of Incorporation.

         6. The initial Directors of the Corporation and their addresses are as
follows:

                           Kim H. Bullerdick
                           Mark B. Cox
                           Gary R. Dalke
                           23733 N. Scottsdale Road
                           Scottsdale, Arizona 85255

         7. In furtherance and not in limitation of the powers conferred by
statute, the Board of Directors shall have the power to make, alter, amend,
change, add to or repeal the bylaws of the Corporation.

         8. Elections of directors need not be by written ballot unless the
bylaws of the Corporation shall so provide.

         9. The Corporation reserves the right to amend, alter, change or repeal
any provision contained in this Certificate of Incorporation, in the manner now
or hereafter prescribed by statute.

         10. A director of the Corporation shall not be personally liable to the
corporation or its stockholders for monetary damages for breach of fiduciary
duty as a director, except to the extent

that the elimination or limitation of liability is prohibited under the DGCL as
in effect when such liability is determined. No amendment or repeal of this
provision shall deprive a director of the benefits hereof with respect to any
act or omission occurring prior to such amendment or repeal.

         11. The Corporation shall, to the fullest extent permitted by Section
145 of the DGCL, as amended from time to time, or any successor section,
indemnify each person who was or is a party or is threatened to be made a party
to any threatened, pending or completed action, suit or proceeding, whether
civil, criminal, administrative or investigative, by reason of the fact that he
is or was a director or officer of the Corporation, or is or was serving at the
request of the Corporation, as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise, against
expenses (including attorneys' fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by him in connection with such
action, suit or proceeding and any appeal therefrom.

         Indemnification may include payment by the Corporation of expenses in
defending an action or proceeding in advance of the final disposition of such
action or proceeding upon receipt of an undertaking by the person indemnified to
repay such payment if it is ultimately determined that such person is not
entitled to indemnification under this Article, which undertaking may be
accepted without reference to the financial ability of such person to make such
repayments.

         The Corporation shall not indemnify any such person seeking
indemnification in connection with a proceeding (or part thereof) initiated by
such person unless the initiation thereof was approved by the Board of Directors
of the Corporation.

         The indemnification rights provided in this Article 11 (i) shall not be
deemed exclusive of any other rights to which those indemnified may be entitled
under any law, agreement or vote of stockholders or disinterested directors or
otherwise, and (ii) shall inure to the benefit of the heirs, executors and
administrators of such persons. The Corporation may, to the extent authorized
from time to time by its Board of Directors, grant indemnification rights to
other employees or agents of the Corporation or other persons serving the
Corporation and such rights may be equivalent to, or greater or less than, those
set forth in this Article 11.

         12. Whenever a compromise or arrangement is proposed between this
Corporation and its creditors or any class of them and/or between this
Corporation and its stockholders or any class of them, any court of equitable
jurisdiction within the State of Delaware may, on the application in a summary
way of the Corporation or of any creditor or stockholder thereof, or on the
application of any receiver or receivers appointed for this Corporation under
Section 291 of Title 8 of the Delaware Code or on the application of trustees in
dissolution or of any receiver or receivers appointed for this Corporation under
Section 279 of Title 8 of the Delaware Code order a meeting of the creditors
and/or class of creditors, and/or of the stockholders or class of stockholders
of this Corporation, as the case may be, to be summoned in such manner as the
said court directs. If a majority in number representing three-fourths in value
of the creditors or class of creditors, and/or of the stockholders or class of
stockholders of this Corporation, as the case may be, agree to any compromise or
arrangement and to any reorganization of this Corporation, as a consequence of
such compromise or arrangement, the said compromise or arrangement and the said
reorganization shall, if sanctioned by the court to which the said application
has been made, be binding on all the creditors or class of


                                       2

creditors, and/or on all the stockholders or class of stockholders, of this
Corporation, as the case may be, and also on this Corporation.

         13. Immediately after the filing of this Certificate of Incorporation
with the Delaware Secretary of State, the undersigned incorporator shall resign
and thereafter the affairs of the Corporation shall be managed by the directors
named herein and their successors.

         IN WITNESS WHEREOF, the undersigned incorporator has caused this
Certificate of Incorporation to be duly executed as of the 1st day of May, 2002.



                                            /s/ Alan Lundgren
                                            -----------------------------------
                                            Alan Lundgren, Incorporator



                                       3

EX-3.24

                                                                    Exhibit 3.24

                                     BYLAWS
                                       OF
                         GIANT YORKTOWN HOLDING COMPANY

                     (HEREINAFTER CALLED THE "CORPORATION")

                                    ARTICLE I
                                     OFFICES

         Section 1. Registered Office. The registered office of the Corporation
shall be in the City of Wilmington, County of New Castle, State of Delaware.

         Section 2. Other Offices. The Corporation may also have offices at such
other places both within and outside of the State of Delaware as the Board of
Directors may from time to time determine.

                                   ARTICLE II
                            MEETINGS OF STOCKHOLDERS

         Section 1. Place of Meetings. Meetings of the stockholders for the
election of directors or for any other purpose shall be held at such time and
place, either within or outside of the State of Delaware, as shall be designated
from time to time by the Board of Directors and stated in the notice of the
meeting or in a duly executed waiver of notice thereof.

         Section 2. Annual Meetings. The Annual Meetings of Stockholders shall
be held on such date and at such time as shall be designated from time to time
by the Board of Directors and stated in the notice of the meeting, at which
meetings the stockholders shall elect Directors in accordance with Section 1 of
Article III of these Bylaws, and transact such other business as may properly be
brought before the meeting. Written notice of the Annual Meeting stating the
place, date and hour of the meeting shall be given to each stockholder entitled
to vote at such meeting not less than ten (10) (unless a longer period is
required by law) nor more than sixty (60) days before the date of the meeting.

         Section 3. Special Meetings. Unless otherwise prescribed by law or by
the Certificate of Incorporation, as the same may be amended from time to time,
Special Meetings of Stockholders may be called only by the Chairman of the
Board, if there is one, the President, the Board of Directors pursuant to a
resolution adopted by a majority of the entire Board of Directors (whether or
not there exist any vacancies in previously authorized directorships at the time
any such resolution is presented to the Board of Directors for adoption) or by
the owner or owners, at the time of such call for a Special Meeting, of ten
percent (10%), or more, of the issued and outstanding shares of common stock of
the Corporation. Written notice of a Special Meeting stating the place, date and
hour of the meeting and the purpose or purposes for which the meeting is called
shall be given not less than ten (10) (unless a longer period is required by
law) nor more than sixty (60) days before the date of the meeting to each
stockholder entitled to vote at such meeting. Business transacted at all Special
Meetings shall be confined to the objects stated in the call.

         Section 4. Quorum. Except as otherwise provided by law or by the
Certificate of Incorporation, as the same may be amended from time to time, the
holders of a majority of the capital stock issued and outstanding and entitled
to vote thereat, present in person or represented by proxy, shall constitute a
quorum at all meetings of the stockholders for the transaction of business. If,
however, such quorum shall not be present or represented at any meeting of the
stockholders, the stockholders entitled to vote thereat, present in person or
represented by proxy, shall have power to adjourn the meeting from time to time,
without notice other than announcement at the meeting, until a quorum shall be
present or represented. At such adjourned meeting at which a quorum shall be
present or represented, any business may be transacted which might have been
transacted at the meeting as originally noticed. If the adjournment is for more
than thirty (30) days, or if after the adjournment a new record date is fixed
for the adjourned meeting, a notice of the adjourned meeting shall be given to
each stockholder entitled to vote at the meeting.

         Section 5. Voting. Unless otherwise required by law, the Certificate of
Incorporation or these Bylaws, as the same may be amended from time to time, (i)
any question brought before any meeting of stockholders shall be decided by the
vote of the holders of a majority of the stock represented and entitled to vote
thereat, and (ii) each stockholder represented at a meeting of stockholders
shall be entitled to cast one vote for each share of the capital stock entitled
to vote thereat held by such stockholder. Such votes may be cast in person or by
proxy but no proxy shall be voted on or after three years from its date, unless
such proxy provides for a longer period. The Board of Directors, in its
discretion, or the officer of the Corporation presiding at a meeting of
stockholders, in his discretion, may require that any votes cast at such meeting
shall be cast by written ballot.

         Section 6. List of Stockholders Entitled to Vote. The officer of the
Corporation who has charge of the stock ledger of the Corporation shall prepare
and make, at least ten (10) days before every meeting of stockholders, a
complete list of the stockholders entitled to vote at the meeting, arranged in
alphabetical order, and showing the address of each stockholder and the number
of shares registered in the name of each stockholder. Such list shall be open to
the examination of any stockholder, for any purpose germane to the meeting,
during ordinary business hours, for a period of at least ten (10) days prior to
the meeting, either at a place within the city where the meeting is to be held,
which place shall be specified in the notice of the meeting, or, if not so
specified, at the place where the meeting is to be held. The list shall also be
produced and kept at the time and place of the meeting during the whole time
thereof, and may be inspected by any stockholder of the Corporation who is
present.

         Section 7. Stock Ledger. The stock ledger of the Corporation shall be
the only evidence as to who are the stockholders entitled to examine the stock
ledger, the list required by Section 6 of this Article II or the books of the
Corporation, or to vote in person or by proxy at any meeting of stockholders.

         Section 8. Election Inspectors. Prior to any meeting of the
stockholders, the Board of Directors shall appoint one (1) or more inspectors
who shall ascertain the number of shares


                                       2

outstanding and the voting power of each; determine the shares represented at a
meeting and the validity of proxies and ballots; count all votes and ballots;
determine and retain for a reasonable time period a record of the disposition of
any challenges made to any determination by the inspectors; certify the
determination of the number of shares represented at the meeting, and the count
of all votes and ballots; and perform such other duties and actions as may be
requested by the Board of Directors or required by law. No such election
inspector need be a stockholder of the Corporation.

         Section 9. Organization and Conduct of Meetings. Each meeting of the
stockholders shall be called to order and thereafter chaired by the Chairman of
the Board of Directors if there is one; or, if not, or if the Chairman of the
Board is absent or so requests, then by the President; or if the Chairman of the
Board and the President are unavailable, such other officer of the Corporation
or such stockholder as may be appointed by the Board of Directors. The
Corporation's Secretary shall act as secretary of each meeting of the
stockholders; in the Secretary's absence, the chairman of the meeting may
appoint any person (whether a stockholder or not) to act as secretary for the
meeting. Absent a showing of bad faith on his part, and subject to any state law
restrictions or requirements, the chairman of a meeting shall, among other
things, have absolute authority to fix the period of time allowed for the
registration of stockholders and the filing of proxies, to determine the order
of business to be conducted at such meeting and to establish reasonable rules
for expediting the business of the meeting (including any informal, or question
and answer portions thereof).

         Section 10. Action by Written Consent. Any action required or permitted
to be taken by the stockholders of the Corporation may be effected either at an
Annual or Special Meeting of the stockholders of the Corporation or by unanimous
written consent of the stockholders.

                                   ARTICLE III
                                    DIRECTORS

         Section 1. Number and Election of Directors. The business and affairs
of the Corporation shall be managed by or under the direction of a Board of
Directors, who shall serve one-year terms, consisting of not less than one (1)
nor more than nine (9) directors, the exact number of directors to be determined
from time to time by resolution adopted by the affirmative vote of a majority of
the directors then in office. A director shall hold office until the next Annual
Meeting and until his successor shall be elected and shall qualify, subject,
however, to prior death, resignation, retirement, disqualification or removal
from office. Directors of the Corporation may be removed with or without cause
by the affirmative vote of a majority of the votes entitled to be cast by the
holders of all the then issued and outstanding shares of common stock of the
Corporation.

         Section 2. Vacancies. Any vacancy on the Board of Directors that
results from an increase in the number of directors may be filled by a majority
of the Board of Directors then in office, provided that a quorum is present, and
any other vacancy occurring in the Board of Directors may be filled by a
majority of the directors then in office, even if less than a quorum, or by a
sole remaining director.


                                       3

         Section 3. Duties and Powers. The business of the Corporation shall be
managed by or under the direction of the Board of Directors, which may exercise
all such powers of the Corporation and do all such lawful acts and things as are
not by statute or by the Certificate of Incorporation or by these Bylaws, as the
same may be amended from time to time, directed or required to be exercised or
done by the stockholders.

         Section 4. Meetings. The Board of Directors of the Corporation may hold
meetings, both regular and special, either outside of or within the State of
Delaware. Regular meetings of the Board of Directors may be held without notice
at such time and at such place as may from time to time be determined by the
Board of Directors. Special meetings of the Board of Directors may be called by
the Chairman, if there is one, the President or any majority of the entire Board
of Directors. Notice thereof stating the place, date and hour of the meeting
shall be given to each director either by mail not less than forty-eight (48)
hours before the date of the meeting, by telephone, electronic facsimile or
telegram on twenty-four (24) hours' notice, or on such shorter notice as the
person or persons calling such meeting may deem necessary or appropriate in the
circumstances.

         Section 5. Quorum. Except as may be otherwise specifically provided by
law, the Certificate of Incorporation or these Bylaws, as the same may be
amended from time to time, at all meetings of the Board of Directors, a majority
of the entire Board of Directors shall constitute a quorum for the transaction
of business, and the act of a majority of the directors present at any meeting
at which there is a quorum shall be the act of the Board of Directors. If a
quorum shall not be present at any meeting of the Board of Directors, the
directors present thereat may adjourn the meeting from time to time, without
notice other than announcement at the meeting, until a quorum shall be present.

         Section 6. Actions of Board. Unless otherwise provided by the
Certificate of Incorporation or these Bylaws, as the same may be amended from
time to time, any action required or permitted to be taken at any meeting of the
Board of Directors or of any committee thereof may be taken without a meeting,
if all the members of the Board of Directors or committee, as the case may be,
consent thereto in writing, and the writing or writings are filed with the
minutes of proceedings of the Board of Directors or committee.

         Section 7. Meetings by Means of Conference Telephone. Unless otherwise
provided by the Certificate of Incorporation or these Bylaws, as the same may be
amended from time to time, members of the Board of Directors of the Corporation,
or any committee designated by the Board of Directors, may participate in a
meeting of the Board of Directors or such committee by means of a conference
telephone or similar communications equipment through which all persons
participating in the meeting can hear each other, and participation in a meeting
pursuant to this Section 7 of this Article III shall constitute presence in
person at such meeting.

         Section 8. Committees. The Board of Directors may, by resolution passed
by a majority of the entire Board of Directors, designate one (1) or more
committees, each committee to consist of two (2) or more of the directors of the
Corporation. The Board of Directors may


                                       4

designate directors as alternate members of any committee, who may replace any
absent or disqualified member at any meeting of any such committee. In the
absence or disqualification of a member of a committee, and in the absence of a
designation by the Board of Directors of an alternate member to replace the
absent or disqualified member, the member or members thereof present at any
meeting and not disqualified from voting, whether or not he or they constitute a
quorum, may unanimously appoint another member of the Board of Directors to act
at the meeting in the place of any absent or disqualified member. Any committee,
to the extent allowed by law and provided in the resolution establishing such
committee, shall have and may exercise all the powers and authority of the Board
of Directors in the management of the business and affairs of the Corporation.
Each committee shall keep regular minutes and report to the Board of Directors
when required. The Board shall have the power at any time to change the members
of any such committee, to fill vacancies and to discharge any such committee.

         Section 9. Compensation. Directors shall be reimbursed by the
Corporation for their reasonable out-of-pocket expenses incurred in connection
with their attendance at Board meetings, and shall receive such other
compensation as determined by the Board of Directors from time to time by
majority vote.

         Section 10. Interested Directors. No contract or transaction between
the Corporation and one or more of its directors or officers, or between the
Corporation and any other corporation, partnership, association or other
organization in which one or more of its directors or officers are directors or
officers, or have a financial interest, shall be void or voidable solely for
this reason, or solely because the director or officer is present at or
participates in the meeting of the Board of Directors or committee thereof which
authorizes the contract or transaction, or solely because his or their votes are
counted for such purpose if (i) the material facts as to his or their
relationship or interest and as to the contract or transaction are disclosed or
are known to the Board of Directors or the committee, and the Board of Directors
or committee in good faith authorizes the contract or transaction by the
affirmative votes of a majority of the disinterested directors, even though the
disinterested directors be less than a quorum; or (ii) the material facts as to
his or their relationship or interest and as to the contract or transaction are
disclosed or are known to the stockholders entitled to vote thereon, and the
contract or transaction is specifically approved in good faith by vote of the
stockholders; or (iii) the contract or transaction is fair as to the Corporation
as of the time it is authorized, approved or ratified, by the Board of
Directors, a committee thereof or the stockholders. Common or interested
directors may be counted in determining the presence of a quorum at a meeting of
the Board of Directors or of a committee which authorizes the contract or
transaction.

                                   ARTICLE IV
                                    OFFICERS

         Section 1. General. The officers of the Corporation shall be chosen by
the Board of Directors and shall, at a minimum, include a President and a
Secretary. The Board of Directors, in its discretion, may also choose a Chairman
of the Board of Directors (who must be a director), a Treasurer, an Executive
Vice President and one or more Vice Presidents, Assistant Secretaries, Assistant
Treasurers and other officers. Any number of offices may be held by the same
person,


                                       5

unless otherwise prohibited by law, the Certificate of Incorporation or these
Bylaws, as the same may be amended from to time. The officers of the Corporation
need not be stockholders of the Corporation nor, except in the case of the
Chairman of the Board of Directors, need such officers be directors of the
Corporation.

         Section 2. Election and Compensation. The Board of Directors, at its
first meeting held after each Annual Meeting of Stockholders, shall elect the
officers of the Corporation, who shall hold their offices for such terms and
shall exercise such powers and perform such duties as shall be determined from
time to time by the Board of Directors; and all officers of the Corporation
shall hold office until their successors are chosen and qualified, or until
their earlier resignation or removal. Any vacancy occurring in any office of the
Corporation shall be filled by the Board of Directors. The salaries and any
bonuses or other compensation of all officers of the Corporation shall be fixed
by the Board of Directors. No officer shall be prevented from receiving a salary
by reason of the fact that such officer is also a director of the Corporation.

         Section 3. Voting Securities Owned by the Corporation. Powers of
attorney, proxies, waivers of notice of meeting, consents and other instruments
relating to securities owned by the Corporation may be executed in the name of
and on behalf of the Corporation by the President or any Vice President, and any
such officer may, in the name of and on behalf of the Corporation, take all such
action as any such officer may deem advisable to vote in person or by proxy at
any meeting of security holders of any corporation in which the Corporation may
own securities and at any such meeting shall possess and may exercise any and
all rights and powers incident to the ownership of such securities and which, as
the owner thereof, the Corporation might have exercised and possessed if
present. The Board of Directors may, by resolution, from time to time confer
like powers upon any other person or persons.

         Section 4. Chairman of the Board of Directors. The Chairman of the
Board of Directors, if there is one, shall preside at all meetings of the
stockholders and of the Board of Directors. Except where by law the signature of
the President is required, the Chairman of the Board of Directors shall possess
the same power as the President to sign all contracts, certificates and other
instruments of the Corporation which may be authorized by the Board of
Directors. The Chairman of the Board of Directors shall also perform such other
duties and may exercise such other powers as from time to time may be assigned
to him by these Bylaws or by the Board of Directors.

         Section 5. President. The President shall, subject to the control of
the Board of Directors, have general supervision of the business of the
Corporation and shall see that all orders and resolutions of the Board of
Directors are carried into effect. The President shall execute all bonds,
mortgages, contracts and other instruments of the Corporation requiring a seal,
under the seal of the Corporation, except where required or permitted by law to
be otherwise signed and executed and except that the other officers of the
Corporation may sign and execute documents when so authorized by these Bylaws,
the Board of Directors, the Chairman of the Board of Directors, or the
President. The President shall also perform such other duties and may exercise
such other powers as from time to time may be assigned to him by these Bylaws,
the Chairman of the Board of Directors or by the Board of Directors.


                                       6

         Section 6. Vice Presidents. At the request of the President or in his
absence or in the event of his inability or refusal to act (and if there be no
Chairman of the Board of Directors), the Vice President or the Vice Presidents
if there are more than one (in the order designated by the Board of Directors)
shall perform the duties of the President, and when so acting, shall have all
the powers of and be subject to all the restrictions upon the President. Each
Vice President shall perform such other duties and have such other powers as the
Board of Directors from time to time may prescribe. If there is no Chairman of
the Board of Directors and no Vice President, the Board of Directors shall
designate the officer of the Corporation who, in the absence of the President or
in the event of the inability or refusal of the President to act, shall perform
the duties of the President, and when so acting, shall have all the powers of
and be subject to all the restrictions upon the President.

         Section 7. Secretary. The Secretary shall attend all meetings of the
Board of Directors and all meetings of stockholders and record all the
proceedings thereat in a book or books to be kept for that purpose; the
Secretary shall also perform like duties for the standing committees when
required. The Secretary shall give, or cause to be given, notice of all meetings
of the stockholders and special meetings of the Board of Directors, and shall
perform such other duties as may be prescribed by the Board of Directors, the
Chairman of the Board of Directors or President, under whose supervision he
shall be. If the Secretary shall be unable or shall refuse to cause to be given
notice of all meetings of the stockholders and special meetings of the Board of
Directors, and if there is no Assistant Secretary, then either the Board of
Directors or the President may choose another officer to cause such notice to be
given. The Secretary shall have custody of the seal of the Corporation and the
Secretary or any Assistant Secretary, if there is one, shall have authority to
affix the same to any instrument requiring it and when so affixed, it may be
attested by the signature of the Secretary or by the signature of any such
Assistant Secretary. The Board of Directors may give general authority to any
other officer to affix the seal of the Corporation and to attest the affixing by
his signature. The Secretary shall see that all books, reports, statements,
certificates and other documents and records required by law to be kept or filed
are properly kept or filed, as the case may be.

         Section 8. Treasurer. The Treasurer shall have the custody of the
corporate funds and securities and shall keep full and accurate accounts of
receipts and disbursements in books belonging to the Corporation and shall
deposit all moneys and other valuable effects in the name and to the credit of
the Corporation in such depositories as may be designated by the Board of
Directors. The Treasurer shall disburse the funds of the Corporation as may be
ordered by the Board of Directors, taking proper vouchers for such
disbursements, and shall render to the President and the Board of Directors, at
its regular meetings, or, from time to time, when the Board of Directors so
requires, an account of all his transactions as Treasurer and of the financial
condition of the Corporation. If required by the Board of Directors, the
Treasurer shall give the Corporation a bond in such sum and with such surety or
sureties as shall be satisfactory to the Board of Directors for the faithful
performance of the duties of his office and for the restoration to the
Corporation, in case of his death, resignation, retirement or removal from
office, of all books, papers, vouchers, money and other property of whatever
kind in his possession or under his control belonging to the Corporation.


                                       7

         Section 9. Assistant Secretaries. Except as may be otherwise provided
in these Bylaws, Assistant Secretaries, if there are any, shall perform such
duties and have such powers as from time to time may be assigned to them by the
Board of Directors, the Chairman of the Board of Directors, the President, any
Vice President, if there are any appointed, or the Secretary, and in the absence
of the Secretary or in the event of his disability or refusal to act, shall
perform the duties of the Secretary, and when so acting, shall have all the
powers of and be subject to all the restrictions upon the Secretary.

         Section 10. Assistant Treasurers. Assistant Treasurers, if there are
any, shall perform such duties and have such powers as from time to time may be
assigned to them by the Board of Directors, the Chairman of the Board of
Directors, the President, any Vice President, or the Treasurer, and in the
absence of the Treasurer or in the event of his disability or refusal to act,
shall perform the duties of the Treasurer, and when so acting, shall have all
the powers of and be subject to all the restrictions upon the Treasurer. If
required by the Board of Directors, an Assistant Treasurer shall give the
Corporation a bond in such sum and with such surety or sureties as shall be
satisfactory to the Board of Directors for the faithful performance of the
duties of his office and for the restoration to the Corporation, in case of his
death, resignation, retirement or removal from office, of all books, papers,
vouchers, money and other property of whatever kind in his possession or under
his control belonging to the Corporation.

         Section 11. Other Officers. Such other officers as the Board of
Directors may choose shall perform such duties and have such powers as from time
to time may be assigned to them by the Board of Directors. The Board of
Directors may delegate to any other officer of the Corporation the power to
choose such other officers and to prescribe their respective duties and powers.

                                    ARTICLE V
                                      STOCK

         Section 1. Form of Certificates. Every holder of stock in the
Corporation shall be entitled to have a certificate signed, in the name of the
Corporation (i) by the President or any Vice President and (ii) by the Secretary
or Treasurer of the Corporation, certifying the number of shares owned by him in
the Corporation.

         Section 2. Signatures. Where a certificate is countersigned by (i) a
transfer agent other than the Corporation or its employee, or (ii) a registrar
other than the Corporation or its employee, any other signature on the
certificate may be a facsimile. In case any officer, transfer agent or registrar
who has signed or whose facsimile signature has been placed upon a certificate
shall have ceased to be such officer, transfer agent or registrar before such
certificate is issued, it may be issued by the Corporation with the same effect
as if he were such officer, transfer agent or registrar at the date of issue.

         Section 3. Lost Certificates. The President or Secretary may direct a
new certificate to be issued in place of any certificate theretofore issued by
the Corporation alleged to have been lost, stolen or destroyed, upon the making
of an affidavit of that fact by the person claiming the


                                       8

certificate of stock to be lost, stolen or destroyed. When authorizing such
issue of a new certificate, the Board of Directors may, in its discretion and as
a condition precedent to the issuance thereof, require the owner of such lost,
stolen or destroyed certificate, or his legal representative, to advertise the
same in such manner as the Board of Directors shall require and/or to give the
Corporation a bond in such sum as it may direct as indemnity against any claim
that may be made against the Corporation with respect to the certificate alleged
to have been lost, stolen or destroyed.

         Section 4. Transfers. Stock of the Corporation shall be transferable in
the manner prescribed by law and in these Bylaws. Transfers of stock shall be
made on the books of the Corporation only by the person named in the certificate
or by his attorney lawfully constituted in writing and upon the surrender of the
certificate therefor, which shall be canceled before a new certificate shall be
issued.

         Section 5. Record Date. In order that the Corporation may determine the
stockholders entitled to notice of or to vote at any meeting of stockholders or
any adjournment thereof, or entitled to receive payment of any dividend or other
distribution or allotment of any rights, or entitled to exercise any rights in
respect of any change, conversion or exchange of stock, or for the purpose of
any other lawful action, the Board of Directors may fix, in advance, a record
date, which shall not be more than sixty (60) days nor less than ten (10) days
before the date of such meeting, nor more than sixty (60) days prior to any
other action. A determination of stockholders of record entitled to notice of or
to vote at a meeting of stockholders shall apply to any adjournment of the
meeting; provided, however, that the Board of Directors may fix a new record
date for the adjourned meeting.

         Section 6. Beneficial Owners. The Corporation shall be entitled to
recognize the exclusive right of a person registered on its books as the owner
of shares to receive dividends, and to vote as such owner, and shall not be
bound to recognize any equitable or other claim to or interest in such share or
shares on the part of any other person, whether or not it shall have express or
other notice thereof, except as otherwise provided by law.

                                   ARTICLE VI
                                     NOTICES

         Section 1. Notices. Whenever written notice is required by law, the
Certificate of Incorporation or these Bylaws, as the same may be amended from
time to time, to be given to any director, member of a committee or stockholder,
such notice may be given by mail, addressed to such director, member of a
committee or stockholder, at his address as it appears on the records of the
Corporation, with postage thereon prepaid, and such notice shall be deemed to be
given at the time when the same shall be deposited in the United States mail.
Written notice may also be given personally or by electronic facsimile,
telegram, telex or cable.

         Section 2. Waivers of Notice. Whenever any notice is required by law,
the Certificate of Incorporation or these Bylaws, as the same may be amended
from time to time, to be given to any director, member of a committee or
stockholder, a waiver thereof in writing, signed, by the person or persons
entitled to said notice, whether before or after the time stated therein, shall
be


                                       9

deemed equivalent thereto.

                                   ARTICLE VII
                               GENERAL PROVISIONS

         Section 1. Dividends. Dividends upon the capital stock of the
Corporation, subject to the Delaware General Corporation Law the provisions of
the Certificate of Incorporation, as the same may be amended from time to time,
if any, may be declared by a decision of a majority of the entire Board of
Directors at any regular or special meeting, and may be paid in cash, in
property, or in shares of the capital stock of the Corporation. Before payment
of any dividend, there may be set aside out of any funds of the Corporation
available for dividends such sum or sums as the Board of Directors from time to
time, in its absolute discretion, deems proper as a reserve or reserves to meet
contingencies, or for equalizing dividends, or for repairing or maintaining any
property of the Corporation, or for any proper purpose, and the Board of
Directors, in its absolute discretion, may modify or abolish any such reserve.

         Section 2. Disbursements. All checks or demands for money and notes of
the Corporation shall be signed by such officer or officers or such other person
or persons as the Board of Directors may from time to time designate.

         Section 3. Fiscal Year. The fiscal year of the Corporation shall be
fixed by resolution of the Board of Directors.

         Section 4. Corporate Seal. The corporate seal shall have inscribed
thereon the name of the Corporation, the year of its organization and the words
"Corporate Seal, Delaware". The seal may be used by causing it or a facsimile
thereof to be impressed or affixed or reproduced or otherwise.

         Section 5. Gender. All words used in any gender in these Bylaws shall
extend to and include all genders.

                                  ARTICLE VIII
                                 INDEMNIFICATION

         Section 1. Power to Indemnify in Actions, Suits or Proceedings other
Than Those by or in the Right of the Corporation. Subject to Sections 3, 4 and 5
of this Article VIII, the Corporation shall indemnify, defend and hold harmless
any officer or director of the Corporation (an "Actor") who was or is a party or
is threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative
(other than an action by or in the right of the Corporation) by reason of the
fact that such Actor is or was a director or officer of the Corporation, or is
or was serving at the request of the Corporation as a director, officer,
employee or agent (including a manager) of another corporation, limited
liability company, partnership, joint venture, trust, employee benefit plan or
other enterprise (each, an "Enterprise"), against all expenses (including
attorneys' fees), costs, judgments, fines and amounts paid in settlement
actually and reasonably incurred by such Actor in connection with such action,
suit or


                                       10

proceeding, if he acted in good faith and in a manner he 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 his
conduct was unlawful.

         Section 2. Power to Indemnify in Actions, Suits or Proceedings by or in
the Right of the Corporation. Subject to Sections 3, 4 and 5 of this Article
VIII, the Corporation shall indemnify, defend and hold harmless any Actor who is
a party or is threatened to be made a party to any threatened, pending or
completed action or suit by or in the right of the Corporation to procure a
judgment in its favor by reason of the fact that such Actor is or was a director
or officer of the Corporation, or is or was serving at the request of the
Corporation as a director, officer, employee or agent (including a manager) of
another Enterprise against all expenses (including attorneys' fees), costs,
judgments, fines and amounts paid in settlement actually and reasonably incurred
by such Actor in connection with the defense or settlement of such action or
suit if he acted in good faith and in a manner he reasonably believed to be in
or not opposed to the best interests of the Corporation; except that no
indemnification shall be made in respect of any claim, issue or matter as to
which such Actor shall have been adjudged to be liable to the Corporation unless
and only to the extent that the Court of Chancery or the court in which such
action or suit was brought shall determine upon application that, despite the
adjudication of liability but in view of all the circumstances of the case, such
Actor is fairly and reasonably entitled to indemnity for such amounts which the
Court of Chancery or such other court shall deem proper.

         Section 3. Advance of Expenses, Costs, Judgments, Fines, Etc. All
expenses (including attorneys' fees), costs, judgments, fines and amounts paid
in settlement actually and reasonably incurred by an Actor in connection with
the defense or settlement of any threatened or pending action, suit or
proceeding, whether civil, criminal, administrative or investigative (including,
without limitation, any threatened or pending action, suit or proceeding by or
in the right of the Corporation to procure a judgment in its favor), by reason
of the fact that such Actor is or was a director or officer of the Corporation,
or is or was serving at the request of the Corporation as a director, officer,
employee or agent (including a manager) of another Enterprise, shall be paid by
the Corporation to or on behalf of the Actor in advance of the final disposition
of such action, suit or proceeding, based on written requests for payment
submitted from time to time by such Actor to the Corporation; provided that as a
condition to any such advance, there shall first be delivered to the Corporation
an undertaking by or on behalf of such Actor to repay the amounts advanced in
accordance with Section 4 of this Article VIII. Advances under this Section 3
shall be mandatory, and no determination of the Board of Directors (including,
without limitation, a determination of whether an Actor is then entitled to
indemnity payments under Section 1 or 2 of this Article VIII) shall be required
as a condition to such advances. Payments by the Corporation pursuant to this
Section 3 of this Article VIII shall be due and payable not later than five
business days following submission by an Actor of any request for payment made
in accordance with the terms hereof.

         Section 4. Repayment of Advances. If advances are made by the
Corporation to or for the benefit of an Actor pursuant to Section 3 of this
Article VIII, and if a final adjudication is made by a court of competent
jurisdiction by judgment or order that such Actor was not entitled to indemnity
for such amounts under Section 1 or Section 2 of this Article VIII, as the case
may be, then within thirty (30) days following such adjudication, the Actor
shall reimburse the Corporation


                                       11

for the portion of any such advances which did not qualify for indemnity, as may
be directed by the court. A determination that an Actor was not entitled to
indemnity under Section 1 of this Article VIII shall be based solely on a
finding that the Actor failed to act in good faith or in a manner he reasonably
believed to be in or not opposed to the best interests of the Corporation, or,
in the case of any criminal action or proceeding, that the Actor had reasonable
cause to believe that his conduct was unlawful. A determination that an Actor
was not entitled to indemnity under Section 2 of this Article VIII shall be
based solely on a finding that the Actor failed to act in good faith or in a
manner he reasonably believed to be in or not opposed to the best interests of
the Corporation, or on a finding that the Actor was liable to the Corporation in
the action or suit at issue and that in view of all of the circumstances of the
case, the Actor was not fairly and reasonably entitled to indemnity. For
purposes of this Article VIII, an adjudication shall become final on the date on
which no further appeals may be taken from such judgment, order or conviction.

         Section 5. Actions by Corporation With Respect to Indemnification. If
an Actor has not requested and received advances to Section 3 of this Article
VIII with respect to a threatened, pending or completed action, suit or
proceeding, the Actor may submit a written claim for indemnification to the
Corporation pursuant to this Section 5 of this Article VIII. Unless ordered by a
court (and subject to the Corporation's obligation to make advances in
accordance with Section 3 of this Article VIII), indemnification pursuant to
this Article VIII shall be made by the Corporation only as authorized in the
specific case, upon a determination that indemnification of the Actor is proper
in the circumstances because he has met the applicable standard of conduct set
forth in Section 1 or Section 2 of this Article VIII, as the case may be. Such
determination shall be made (i) by a majority vote of the directors who are not
parties to such action, suit or proceeding, even though less than a quorum, or
(ii) by a committee of such directors designated by majority vote of such
directors, even though less than a quorum, or (iii) if there are no such
directors, or even if there are, and such directors so direct, by independent
legal counsel in a written opinion, or (iv) by the stockholders. To the extent,
however, that an Actor has been successful on the merits or otherwise in defense
of any action, suit or proceeding described above, or in defense of any claim,
issue or matter therein, he shall be indemnified against expenses (including
attorneys' fees), costs and other obligations or amounts actually and reasonably
incurred by him in connection therewith, without the necessity of authorization
in the specific case. Nothing in this Section 5 of this Article VIII shall be
construed as a limitation on an Actor's right to receive, or on the
Corporation's obligation to make, advances in the manner described in Section 3
of this Article VIII, and in the event of a request for such advances, the
provisions of Sections 3 and 4 of this Article VIII, rather than the provisions
of this Section 5 of this Article VIII, shall apply.

         Section 6. Good Faith Defined. For purposes of any determination
required under this Article VIII, an Actor shall be deemed to have acted in good
faith and in a manner he reasonably believed to be in or not opposed to the best
interests of the Corporation, or, with respect to any criminal action or
proceeding, to have had no reasonable cause to believe his conduct was unlawful,
if his action is based on the records or books of account of the Corporation or
another Enterprise, or on information supplied to him by the officers of the
Corporation or another Enterprise in the course of their duties, or on the
advice of legal counsel for the Corporation or another Enterprise or on
information or records given or reports made to the Corporation or another
Enterprise by an independent certified public accountant or by an appraiser or
other expert selected by the


                                       12

Corporation or another Enterprise. The provisions of this Section 6 of this
Article VIII shall not be deemed to be exclusive or to limit in any way the
circumstances in which an Actor may be deemed to have met the applicable
standard of conduct set forth in Section 1 or Section 2 of this Article VIII, as
the case may be. The termination of any action, suit or proceeding by judgment,
order, settlement, conviction, or upon a plea of nolo contendere or its
equivalent, shall not, of itself, create a presumption that an Actor did not act
in good faith and in a manner which he 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 reasonable cause to believe that his conduct
was unlawful.

         Section 7. Indemnification by a Court. Notwithstanding any contrary
determination in the specific case under Section 5 of this Article VIII, and
notwithstanding the absence of any determination thereunder, any Actor may apply
to any court of competent jurisdiction in the State of Delaware for
indemnification to the extent otherwise permissible under Sections 1 and 2 of
this Article VIII. The basis of such indemnification by a court shall be a
determination by such court that indemnification of the director or officer is
proper in the circumstances because he has met the applicable standards of
conduct set forth in Section 1 or Section 2 of this Article VIII, as the case
may be. Neither a contrary determination in the specific case under Section 5 of
this Article VIII nor the absence of any determination thereunder shall be a
defense to such application or create a presumption that an Actor seeking
indemnification has not met any applicable standard of conduct. Notice of any
application for indemnification pursuant to this Section 7 of this Article VIII
shall be given to the Corporation promptly upon the filing of such application.
If successful, in whole or in part, the Actor seeking indemnification shall also
be entitled to be paid the expense of prosecuting such application.

         Section 8. Nonexclusivity of Indemnification and Advancement of
Amounts. The indemnification and advancement of amounts to Actors as provided by
or granted pursuant to this Article VIII shall not be deemed exclusive of any
other rights to an Actor seeking indemnification or advancement of amounts may
be entitled under any Bylaw, agreement, contract, vote of stock holders or
disinterested directors or pursuant to the direction (howsoever embodied) of any
court of competent jurisdiction or otherwise, both as to action in the Actor's
official capacity and as to action in another capacity while holding such
office, it being the policy of the Corporation that indemnification of the
Actors specified in Sections 1 and 2 of this Article VIII shall be made to the
fullest extent permitted by law. The provisions of this Article VIII shall not
be deemed to preclude the indemnification of any person who is not specified in
Section 1 or Section 2 of this Article VIII but whom the Corporation has the
power or obligation to indemnify under the provisions of the Delaware General
Corporation Law, or otherwise.

         Section 9. Insurance. The Corporation may purchase and maintain
insurance on behalf of any Actor against any liability asserted against him and
incurred by him in any his capacity as an officer or director of the Corporation
or as a director, officer, employee or agent (including a manager) of another
Entity at the request of the Corporation, or arising out of his status as such,
whether or not the Corporation would have the power or the obligation to
indemnify him against such liability under the provisions of this Article VIII.

         Section 10. Survival of Indemnification and Related Obligations. The
indemnification


                                       13

and advancement of amounts provided by, or granted pursuant to, this Article
VIII shall, unless otherwise provided when authorized or ratified, continue as
to an Actor who has ceased to be a director or officer and shall inure to the
benefit of the heirs, executors and administrators of such a person.

         Section 11. Limitation on Indemnification. Notwithstanding anything
contained in this Article VIII to the contrary, except for proceedings to
enforce rights to indemnification (which shall be governed by Section 7 of this
Article VIII), but subject in all events to the Corporation's obligation to make
advances pursuant to Section 3 of this Article VIII, the Corporation shall not
be obligated to indemnify any director or officer in connection with a
proceeding (or part thereof) initiated by such person unless such proceeding (or
part thereof) was authorized or consented to by the Board of Directors of the
Corporation.

         Section 12. Indemnification of Employees and Agents. The Corporation
may, to the extent authorized from time to time by the Board of Directors,
provide rights to indemnification and to the advancement of amounts to employees
and agents of the Corporation similar to those conferred in this Article VIII to
directors and officers of the Corporation.

                                   ARTICLE IX
                                  MISCELLANEOUS

         Section 1. Amendment of Bylaws. Except as otherwise provided in the
Certificate of Incorporation, these Bylaws may be altered, amended or repealed,
in whole or in part, or new Bylaws may be adopted by the stockholders or by the
Board of Directors; provided, however, that notice of such alteration,
amendment, repeal or adoption of new Bylaws be contained in the notice of such
meeting of stockholders or Board of Directors, as the case may be. Except as
otherwise provided in the Certificate of Incorporation, all such amendments must
be approved by either the holders of a majority of the outstanding capital stock
entitled to vote thereon or by a majority of the entire Board of Directors then
in office.

                             CERTIFICATE OF ADOPTION

                  The undersigned Secretary hereby certifies that the foregoing
Bylaws were adopted by the Board of Directors of Giant Yorktown Holding Company
pursuant to a written consent of the Board of Directors dated May 2, 2002.


                                              /s/ Kim H. Bullerdick
                                              ---------------------------------
                                              Kim H. Bullerdick, Secretary


                                       14

EX-4.2

                                                                    EXHIBIT 4.2




                             GIANT INDUSTRIES, INC.,

                                   as Issuer,

                           THE SUBSIDIARY GUARANTORS,

                                 as Guarantors,

                                       and

                              THE BANK OF NEW YORK,

                                   as Trustee




                                    INDENTURE

                            DATED AS OF MAY 14, 2002




                     11% SENIOR SUBORDINATED NOTES DUE 2012

                                TABLE OF CONTENTS


                                                                            PAGE
                                                                            ----
                                                                         

ARTICLE ONE
     DEFINITIONS AND INCORPORATION BY REFERENCE...........................     1

     Section 1.01.   Definitions..........................................     1
     Section 1.02.   Other Definitions....................................    12
     Section 1.03.   Incorporation by Reference of Trust Indenture Act....    13
     Section 1.04.   Rules of Construction................................    13

ARTICLE TWO
     THE NOTES............................................................    14

     Section 2.01.   Form and Dating......................................    14
     Section 2.02.   Execution and Authentication.........................    15
     Section 2.03.   Registrar and Paying Agent...........................    15
     Section 2.04.   Paying Agent to Hold Money in Trust..................    16
     Section 2.05.   Lists of Holders of Notes............................    16
     Section 2.06.   Transfer and Exchange................................    16
     Section 2.07.   Replacement Notes....................................    21
     Section 2.08.   Outstanding Notes; Treasury Notes....................    21
     Section 2.09.   Temporary Notes and Definitive Notes.................    21
     Section 2.10.   Cancellation.........................................    22
     Section 2.11.   Defaulted Interest...................................    22
     Section 2.12.   CUSIP Number.........................................    22
     Section 2.13.   Persons Deemed Owners................................    22
     Section 2.14.   Issuance of Additional Notes.........................    23

ARTICLE THREE
     REDEMPTION...........................................................    23

     Section 3.01.   Notice to Trustee....................................    23
     Section 3.02.   Selection of Notes to Be Redeemed....................    23
     Section 3.03.   Notice of Redemption.................................    23
     Section 3.04.   Effect of Notice of Redemption.......................    24
     Section 3.05.   Deposit of Redemption Price..........................    24
     Section 3.06.   Notes Redeemed in Part...............................    24

ARTICLE FOUR
     COVENANTS............................................................    25

     Section 4.01.   Payment of Notes.....................................    25
     Section 4.02.   Commission Reports...................................    25
     Section 4.03.   Compliance Certificates..............................    25
     Section 4.04.   Maintenance of Office or Agency......................    26
     Section 4.05.   Corporate Existence..................................    26
     Section 4.06.   Waiver of Stay, Extension or Usury Laws..............    27
     Section 4.07.   Payment of Taxes and Other Claims....................    27
     Section 4.08.   Maintenance of Properties and Insurance; Line of
                        Business..........................................    27
     Section 4.09.   Limitation on Incurrence of Additional Indebtedness..    27
     Section 4.10.   Limitation on Restricted Payments....................    28
     Section 4.11.   Limitation on Sale of Assets.........................    29


                                                                         
     Section 4.12.   Limitation on Liens Securing Indebtedness............    32
     Section 4.13.   Limitation on Payment Restrictions Affecting
                       Restricted Subsidiaries............................    32
     Section 4.14.   Limitation on Transactions with Affiliates...........    32
     Section 4.15.   Limitation on Future Senior Subordinated Indebtedness    33
     Section 4.16.   Change of Control....................................    33

ARTICLE FIVE
     SUCCESSOR CORPORATION................................................    34

     Section 5.01.   When Company May Merge, Etc..........................    34
     Section 5.02.   Successor Corporation Substituted....................    35

ARTICLE SIX
     DEFAULTS AND REMEDIES................................................    35

     Section 6.01.   Events of Default....................................    35
     Section 6.02.   Acceleration.........................................    36
     Section 6.03.   Other Remedies.......................................    37
     Section 6.04.   Waiver of Past Defaults..............................    37
     Section 6.05.   Control by Majority..................................    37
     Section 6.06.   Limitation on Remedies...............................    37
     Section 6.07.   Rights of Holders to Receive Payment.................    38
     Section 6.08.   Collection Suit by Trustee...........................    38
     Section 6.09.   Trustee May File Proofs of Claim.....................    38
     Section 6.10.   Priorities...........................................    38
     Section 6.11.   Undertaking for Costs................................    38

ARTICLE SEVEN
     TRUSTEE..............................................................    39

     Section 7.01.   Duties of Trustee....................................    39
     Section 7.02.   Rights of Trustee....................................    40
     Section 7.03.   Individual Rights of Trustee.........................    40
     Section 7.04.   Trustee's Disclaimer.................................    41
     Section 7.05.   Notice of Defaults...................................    41
     Section 7.06.   Reports by Trustee to Holders........................    41
     Section 7.07.   Compensation and Indemnity...........................    41
     Section 7.08.   Replacement of Trustee...............................    42
     Section 7.09.   Successor Trustee by Merger, Etc.....................    43
     Section 7.10.   Eligibility; Disqualification........................    43
     Section 7.11.   Preferential Collection of Claims Against Company....    43

ARTICLE EIGHT
     DISCHARGE OF INDENTURE...............................................    43

     Section 8.01.   Termination of Company's Obligations.................    43
     Section 8.02.   Application of Trust Money...........................    44
     Section 8.03.   Repayment to Company.................................    44
     Section 8.04.   Reinstatement........................................    45
     Section 8.05.   Survival of Certain Obligations......................    45

ARTICLE NINE
     AMENDMENTS, SUPPLEMENTS AND WAIVERS..................................    45




                                       ii

                                                                         
     Section 9.01.   Without Consent of Holders...........................    45
     Section 9.02.   With Consent of Holders..............................    46
     Section 9.03.   Compliance with Trust Indenture Act..................    47
     Section 9.04.   Revocation and Effect of Consents....................    47
     Section 9.05.   Notation on or Exchange of Notes.....................    47
     Section 9.06.   Trustee Protected....................................    47

ARTICLE TEN
     SUBORDINATION OF NOTES...............................................    48

     Section 10.01.  Notes Subordinated to Senior Indebtedness............    48
     Section 10.02.  No Payment on Notes in Certain Circumstances.........    48
     Section 10.03.  Notes Subordinated to Prior Payment of All Senior
                       Indebtedness on Dissolution, Liquidation or
                       Reorganization of the Company......................    49
     Section 10.04.  Holders to Be Subrogated to Rights of Holders of
                       Senior Indebtedness................................    50
     Section 10.05.  Obligations of the Company Unconditional.............    50
     Section 10.06.  Trustee Entitled to Assume Payments, Not Prohibited
                       in Absence of Notice...............................    50
     Section 10.07.  Application by Trustee of Assets Deposited With It...    51
     Section 10.08.  Subordination Rights Not Impaired by Acts or
                       Omissions of the Company or Holders of Senior
                       Indebtedness.......................................    51
     Section 10.09.  Holders Authorize Trustee to Effectuate
                       Subordination of Notes.............................    51
     Section 10.10.  Right of Trustee to Hold Senior Indebtedness.........    51
     Section 10.11.  Article Ten Not to Prevent Events of Default.........    52
     Section 10.12.  Payment..............................................    52
     Section 10.13.  Trustee Not Fiduciary for Holders of Senior
                       Indebtedness.......................................    52

ARTICLE ELEVEN
     GUARANTEES...........................................................    52

     Section 11.01.  Unconditional Guarantee..............................    52
     Section 11.02.  Subsidiary Guarantors May Consolidate, Etc., on
                       Certain Terms......................................    53
     Section 11.03.  Addition of Subsidiary Guarantors....................    54
     Section 11.04.  Release of a Subsidiary Guarantor....................    54
     Section 11.05.  Limitation of Subsidiary Guarantor's Liability.......    54
     Section 11.06.  Contribution.........................................    54
     Section 11.07.  Execution and Delivery of Guarantee..................    55
     Section 11.08.  Severability.........................................    55
     Section 11.09.  Consent to Jurisdiction and Service of Process.......    55
     Section 11.10.  Waiver of Immunity...................................    55
     Section 11.11.  Judgment Currency....................................    56

ARTICLE TWELVE
     SUBORDINATION OF GUARANTEES..........................................    56

     Section 12.01.  Guarantees Subordinated to Senior Indebtedness.......    56
     Section 12.02.  No Payment on Guarantees in Certain Circumstances....    56
     Section 12.03.  Guarantees Subordinated to Prior Payment of All
                       Senior Indebtedness on Dissolution, Liquidation or
                       Reorganization of a Subsidiary Guarantor...........    57
     Section 12.04.  Holders to Be Subrogated to Rights of Holders of
                       Senior Indebtedness................................    58
     Section 12.05.  Guarantees Unconditional.............................    58
     Section 12.06.  Trustee Entitled to Assume Payments Not Prohibited in
                       Absence of Notice..................................    59
     Section 12.07.  Application by Trustee of Assets Deposited With It...    59
     Section 12.08.  Subordination Rights Not Impaired by Acts or
                       Omissions of the Subsidiary Guarantors or Holders
                       of Senior Indebtedness.............................    59




                                      iii

                                                                         
     Section 12.09.  Holders Authorize Trustee to Effectuate Subordination
                       of Notes...........................................    60
     Section 12.10.  Right of Trustee to Hold Senior Indebtedness.........    60
     Section 12.11.  Payment..............................................    60
     Section 12.12.  Trustee Not Fiduciary for Holders of Senior
                       Indebtedness.......................................    60

ARTICLE THIRTEEN
     MISCELLANEOUS........................................................    61

     Section 13.01.  Trust Indenture Act Controls.........................    61
     Section 13.02.  Notices..............................................    61
     Section 13.03.  Communication by Holders with Other Holders..........    61
     Section 13.04.  Certificate and Opinion as to Conditions Precedent...    62
     Section 13.05.  Statements Required in Certificate or Opinion........    62
     Section 13.06.  Rules by Trustee and Agents..........................    62
     Section 13.07.  Legal Holidays.......................................    62
     Section 13.08.  Governing Law........................................    62
     Section 13.09.  No Adverse Interpretation of Other Agreements........    62
     Section 13.10.  No Recourse Against Others...........................    63
     Section 13.11.  Successors...........................................    63
     Section 13.12.  Duplicate Originals..................................    63
     Section 13.13.  Severability.........................................    63




Exhibit A - Form of Initial Note
Exhibit B - Form of Exchange Note






                                       iv

                              CROSS-REFERENCE TABLE



TRUST INDENTURE                                                        INDENTURE
  ACT SECTION                                                           SECTION
- ---------------                                                        ---------
                                                                   

310(a)(1)...................................................................7.10
   (a)(2)....................................................................N/A
   (a)(3)....................................................................N/A
   (a)(4)....................................................................N/A
   (a)(5)...................................................................7.08
   (b)......................................................................7.10
   (c).......................................................................N/A
311(a)......................................................................7.11
   (b)......................................................................7.11
   (c).......................................................................N/A
312(a).......................................................................N/A
   (b).....................................................................13.03
   (c).....................................................................13.03
313(a)......................................................................7.06
   (b)(1)....................................................................N/A
   (b)(2)...................................................................7.06
   (c)......................................................................7.06
   (d).......................................................................N/A
314(a)................................................................4.02; 4.03
   (b).......................................................................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).......................................................................N/A
   (b).......................................................................N/A
   (c).......................................................................N/A
   (d).......................................................................N/A
   (e).......................................................................N/A
316(a)(1)(A).................................................................N/A
   (a)(1)(B).................................................................N/A
   (a)(2)....................................................................N/A
   (b).......................................................................N/A
   (c).......................................................................N/A
317(a)(1)....................................................................N/A
   (a)(2)....................................................................N/A
   (b).......................................................................N/A
318(a).......................................................................N/A
   (b).......................................................................N/A
   (c).....................................................................13.01


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

N/A means Not Applicable

NOTE: This Cross-Reference Table shall not, for any purpose, be deemed to be
      part of this Indenture.


                                       v

      INDENTURE, dated as of May 14, 2002, 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.

      The Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance, initially, of up to $200,000,000
aggregate principal amount of the Company's 11% Senior Subordinated Notes due
2012 (the "Notes") issuable as provided in this Indenture. All actions necessary
to make this Indenture a valid and legally binding agreement of the Company and
each Subsidiary Guarantor, in accordance with its terms, have been taken.

      Each party agrees as follows for the benefit of the other parties and for
the equal and ratable benefit of the holders of the Notes.

                                   ARTICLE ONE

                   DEFINITIONS AND INCORPORATION BY REFERENCE

Section 1.01.     Definitions.

      "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 co-registrar.

      "Asset Sale" means any sale, capitalized lease (in accordance with GAAP),
transfer, exchange or other disposition (or series of related sales, capitalized
leases (in accordance with GAAP), 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 to a
Restricted Subsidiary, (ii) a sale of inventory or hydrocarbons or other
products (including both crude 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 Article
Five of this Indenture and (iv) the merger or consolidation of a Restricted
Subsidiary made in compliance with the requirements set forth in Section
11.02(b)(i)(A)).

      "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/or its
Restricted Subsidiaries and one or more financial institutions, as amended,
extended or refinanced from time to time.

      "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.

      "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.

      "Business Day" means any day on which the New York Stock Exchange, Inc. is
open for trading and which is not a Legal Holiday.

      "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.

      "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; (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 twelve
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.

      "Commission" means the Securities and Exchange Commission.

      "Company" means the party named as such above, until a successor replaces
such Person in accordance with the terms of this Indenture, and thereafter means
such successor.

      "Consolidated Coverage Ratio" means, for any Reference Period, the ratio
on a pro forma basis of (i) Consolidated EBITDA for such 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 of the
incurrence of Indebtedness giving rise to the need to calculate the Consolidated


                                       2

Coverage Ratio (the "Debt Incurrence 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 Debt Incurrence 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 Debt Incurrence 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 Debt Incurrence Date were the average rate in effect
during the entire Reference Period, and (E) in determining the amount of
Indebtedness pursuant to Section 4.09, the incurrence of Indebtedness giving
rise to the need to calculate the Consolidated Coverage Ratio and, to the extent
the net proceeds from 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-recurring 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 payable solely in shares of Qualified
Stock), 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" 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 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


                                       3

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 or loss 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 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 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.

      "Credit Agreements" means the Company's three year, senior secured
revolving credit facility in the amount of $100,000,000 and the Company's three
year, senior mortgage loan facility in the amount of $40,000,000, and in each
case as amended, extended or refinanced from time to time.

      "Default" means any event which is, or after notice or passage of time
would be, an Event of Default.

      "Depository" means The Depository Trust Company, its nominees and their
respective successors.

      "Designated Senior Indebtedness" means (i) any Senior Indebtedness of the
Company and/or any Subsidiary Guarantor permitted under this Indenture, the
original principal amount of which is $10 million or more and (ii) the
Indebtedness and/or other obligations under the Credit Agreements or a Bank
Credit Facility.

      "Disqualified Stock" means any Capital Stock of a Person which, by its
terms (or by 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.

      "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.

      "Exchange Act" means the Securities Exchange Act of 1934, as amended, and
the rules and regulations promulgated by the Commission thereunder.



                                       4

      "Exchange Offer" means an offer by the Company, pursuant to a Registration
Rights Agreement, to Holders of Initial Notes to issue and deliver to such
Holders, in exchange for the Initial Notes, a like aggregate principal amount of
Exchange Notes registered under the Securities Act.

      "Exchange Notes" means Notes to be issued pursuant to this Indenture in
connection with an Exchange Offer pursuant to the relevant Registration Rights
Agreement.

      "Existing Subordinated Notes" means $150 million in original principal
amount of the Company's 9% Senior Subordinated Notes due 2007.

      "Former Affiliate" means any Person who was an Affiliate of the Company at
any time during the three year period prior to the date for which determination
of Affiliate status is required.

      "GAAP" means generally accepted accounting principles as in effect in the
United States of America from time to time.

      "Guarantee" means, individually and collectively, the guarantees given by
the Subsidiary Guarantors pursuant to Article Eleven hereof, including a
notation in the Notes substantially in the form attached hereto as Exhibit A.

      "Holder" means a Person in whose name a Note is registered on the
Registrar's books.

      "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 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.

      "Indenture" means this Indenture, as amended or supplemented from time to
time in accordance with the terms hereof.

      "Initial Notes" means up to $200 million principal amount of Notes that
are issued pursuant to this Indenture on the Issue Date and shall include any
other Notes issued under this Indenture after the Issue Date in a private
placement.

      "Initial Purchasers" means Banc of America Securities LLC, BNP Paribas
Securities Corp. and Fleet Securities, Inc.



                                       5

      "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.

      "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 other than advances to
present or Former Affiliates of the Company in an aggregate amount outstanding
at any one time not to exceed $1 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 Indenture.

      "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).

      "Make-Whole Premium" means, with respect to a Note on any date of
redemption, the greater of (x) 1% of the principal amount of such Note or (y)
the excess of (A) the present value at such date of redemption of (1) the
redemption price of such Note at May 15, 2007 (such redemption price being
described under Paragraph 6 of the Note) plus (2) all remaining required
interest payments (exclusive of interest accrued and unpaid to the date of
redemption) due on such Note through May 15, 2007, 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 May 15, 2012.

      "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 clause (B) or (C) of Section 4.10(a)(iii), the aggregate
net cash proceeds received by the Company, after payment of expenses,
commissions, discounts and any other transaction costs incurred in connection
therewith.

      "Notes" means any of the securities, as defined in the first paragraph of
the recitals hereof, that are authenticated and delivered under this Indenture.
For all purposes of this Indenture, the term "Notes" shall include the Initial
Notes issued on the Issue Date, any Exchange Notes to be issued and exchanged
for any Initial Notes pursuant to a Registration Rights Agreement and this
Indenture, and any other Notes issued after the Issue Date under this Indenture.
For purposes of this Indenture, all Notes shall vote together as one series of
Notes under this Indenture.



                                       6

      "Notes Custodian" means the custodian with respect to a Global Note (as
appointed by the Depository), or any successor person thereto and shall
initially be the Trustee.

      "Officer" means, with respect to any Person, the Chairman of the Board,
the President, any Vice President, the Chief Financial Officer or the Treasurer
of such Person.

      "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 of the Company.

      "Opinion of Counsel" means a written opinion from legal counsel. The
counsel may be an employee of or counsel to the Company (or any Subsidiary
Guarantor, if applicable).

      "Pari Passu Indebtedness" means the Existing Subordinated 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; and (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
commodity risk in connection with the conduct of the business of the Company and
its Restricted Subsidiaries and not for speculative purposes; and (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 $5 million in the aggregate.

      "Permitted Company Refinancing Indebtedness" means (i) Indebtedness of the
Company, 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, (B) accelerate the maturity of such
Indebtedness or (C) shorten the Average Life of such Indebtedness and (ii)
Indebtedness of the Company, the net proceeds of which are used to renew,
extend, refinance, defease, refund or repurchase outstanding Indebtedness of the
Company, provided that (A) if the Indebtedness (including the Notes) being
renewed, extended, refinanced, defeased refunded or repurchased is pari passu
with or subordinated in right of payment to the Notes then such Indebtedness is
pari passu with or subordinated in right of payment to, as the case may be, the
Notes 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, and (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; provided further that
such Indebtedness (to the extent that such Indebtedness constitutes Permitted
Company 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 of 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).

      "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


                                       7

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) above 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 in the United States of America which
is rated at least AA- or the equivalent thereof by Moody's Investors Service,
Inc. and 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
now or hereafter securing Senior Indebtedness; (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; (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; (x) survey exceptions,
encumbrances, easements or reservations of, 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 nor 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 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


                                       8

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 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 $5.0
million in the aggregate at any one time outstanding.

      "Permitted Subsidiary Refinancing Indebtedness" means (i) Indebtedness of
any 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 Guarantees, (B) accelerate the maturity of such
Indebtedness or (C) shorten the Average Life of such Indebtedness and (ii)
Indebtedness of any Subsidiary, the net proceeds of which are used to renew,
extend, refinance, defease, refund or repurchase outstanding Indebtedness of
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 Guarantees, then
such Indebtedness is pari passu with or subordinated in right of payment to, as
the case may be, the 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, and (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; provided
further that such Indebtedness (to the extent that such Indebtedness constitutes
Permitted Subsidiary 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).

      "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 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, 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.

      "pro forma" means, with respect to any calculation made or required to be
made pursuant to the terms of this Indenture, a calculation in accordance with
the rules and regulations under the Securities Act.

      "Public Equity Offering" means an underwritten primary public offering of
common stock of the Company pursuant to an effective registration statement
under the Securities Act.

      "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 National Association of Securities Dealers Automated Quotation
System (National Market System).



                                       9

      "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.

      "Registration Rights Agreement" means the Registration Rights Agreement
dated May 14, 2002 among the Company, the Subsidiary Guarantors and the Initial
Purchasers, or any other Registration Rights Agreement executed in connection
with the issuance of Initial Notes after the Issue Date, as the case may be.

      "Representative" means the indenture trustee or other trustee, agent or
representative of holders of any Senior Indebtedness.

      "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 that is a Wholly Owned
Subsidiary); (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
that is a Wholly Owned Subsidiary 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 pari passu or subordinated in right of
payment to the Notes or any Guarantee, 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 Notes or any Guarantee or is scheduled to
mature earlier than, or has an Average Life less than the remaining Average Life
of, the Indebtedness being refinanced; 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. The Company may designate any Unrestricted Subsidiary
to be a Restricted Subsidiary by a Board Resolution of the Company, as evidenced
by written notice thereof delivered to the Trustee; 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 4.09(a) and (ii)
no Default or Event of Default shall have occurred and be continuing.

      "Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder.

      "Senior Indebtedness" means any Indebtedness (other than the Company's
Existing Subordinated 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; 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 this
Indenture.

      "Shelf Registration Statement" means the registration statement issued by
the Company in connection with the offer and sale of Initial Notes pursuant to
the Registration Rights Agreement.

      "Subordinated Securities" means securities of the Company or any
Subsidiary Guarantor that are subordinated, at least to the same extent as the
Notes or the Guarantees, respectively, to Senior Indebtedness of the


                                       10

Company and such Subsidiary Guarantor and to any securities that are issued in
exchange for any such Senior Indebtedness.

      "subsidiary" of any Person means (i) 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, (ii) 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 (iii) 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 Issue Date, (ii) each of the Subsidiaries that becomes a
guarantor of the Notes in compliance with the provisions of Article Eleven
hereof and (iii) each of the Subsidiaries executing a supplemental indenture in
which such Subsidiary agrees to be bound by the terms of this Indenture.

      "TIA" means the Trust Indenture Act of 1939 (15 U.S. Code Sections
77aaa-77bbbb) as in effect on the date of this Indenture, except as provided in
Section 9.03.

      "Transfer Restricted Notes" means Definitive Notes and Notes that bear or
are required to bear the legend set forth in Section 2.06(d).

      "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 May 15, 2007, provided, however, that if the
then remaining term to May 15, 2007 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 May 15, 2007 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.

      "Trust Officer" means, when used with respect to the Trustee, any officer
within the corporate trust department of the Trustee, including any vice
president, assistant vice president, assistant secretary, 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 person's knowledge of and familiarity with the particular
subject and who shall have direct responsibility for the administration of this
Indenture.

      "Trustee" means the party named as such above until a successor replaces
it in accordance with the applicable provisions of this Indenture and thereafter
means the successor.

      "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


                                       11

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 4.09(a), (ii) the Company could make
an additional Restricted Payment of $1.00 pursuant to Section 4.10(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 (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 this 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.

      "U.S. Government Obligations" means securities that are (i) direct
obligations of the United States of America for the payment of which its full
faith and credit is pledged or (ii) 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 by the United States of America, which, in either case under
clauses (i) or (ii) are not callable or redeemable at the option of the issuer
thereof.

      "U.S. Legal Tender" means such coin or currency of the United States as at
the time of payment shall be legal tender for the payment of public and private
debts.

      "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.

      "Wholly Owned Subsidiary" means a Subsidiary all the Capital Stock (other
than directors" qualifying shares, if applicable) of which is owned by the
Company or another Wholly Owned Subsidiary.

Section 1.02.     Other Definitions.

      Term Defined in Section

                                                                
      "Affiliate Transaction".............................................4.14
      "Agent Members".....................................................2.01
      "Authorized Agent".................................................11.09
      "Bankruptcy Law"....................................................6.01
      "Change of Control Notice"..........................................4.16
      "Change of Control Offer"...........................................4.16
      "Change of Control Payment Date"....................................4.16
      "Custodian".........................................................6.01
      "Debt Incurrence Date"..............................................1.01
      "Definitive Notes"..................................................2.01
      "Event of Default"..................................................6.01
      "Excess Proceeds"...................................................4.11
      "Funding Guarantor"................................................11.06
      "Global Note".......................................................2.01
      "IAI"...............................................................2.01
      "incur".............................................................4.09




                                       12

                                                                
      "Judgment Currency"................................................11.11
      "Legal Holiday"....................................................13.07
      "Net Proceeds Deficiency"...........................................4.11
      "Net Proceeds Offer"................................................4.11
      "Net Proceeds Offer Amount".........................................4.11
      "Net Proceeds Payment Date".........................................4.11
      "Non-U.S. Subsidiary Guarantor"....................................11.09
      "Note Register".....................................................2.03
      "Offered Price".....................................................4.11
      "Pari Passu Indebtedness Amount"....................................4.11
      "Pari Passu Offer"..................................................4.11
      "Paying Agent"......................................................2.03
      "Payment Blockage Period"...................................10.02, 12.02
      "Payment Default"...........................................10.02, 12.02
      "Payment Notice"............................................10.02, 12.02
      "Payment Restriction"...............................................4.13
      "Purchase Notice"...................................................4.11
      "QIB"...............................................................2.01
      "Registrar"........................................................ 2.03
      "Regulation S"......................................................2.01
      "Rule 144A".........................................................2.01
      "Trigger Date"......................................................4.11



Section 1.03.     Incorporation by Reference of Trust Indenture Act.

      Whenever this Indenture refers to a provision of the TIA, the provision is
incorporated by reference in and made a part of this Indenture. The following
TIA terms, if used in this Indenture, have the following meanings:

      "Commission" means the Commission.

      "indenture securities" means the Notes and the Guarantees.

      "indenture security holder" means a Holder.

      "indenture to be qualified" means this Indenture.

      "indenture trustee" or "institutional trustee" means the Trustee.

      "obligor" on the indenture securities means the Company, the Subsidiary
Guarantors and any other obligor on the Notes or the Guarantees.

      All other TIA terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by Commission rule have
the meanings assigned to them therein.

Section 1.04.     Rules of Construction.

      Unless the context otherwise requires:

            (1)   a term has the meaning assigned to it;

            (2)   an accounting term not otherwise defined has the meaning
      assigned to it in accordance with GAAP;

            (3)   "or" is not exclusive;



                                       13

            (4)   words in the singular include the plural, and words in the
      plural include the singular;

            (5)   any gender used in this Indenture shall be deemed to include
      the neuter, masculine or feminine genders;

            (6)   provisions apply to successive events and transactions; and

            (7)   "herein," "hereof" and other words of similar import refer to
      this Indenture as a whole and not to any particular Article, Section or
      other Subdivision.

                                   ARTICLE TWO

                                    THE NOTES

Section 2.01.     Form and Dating.

      The Initial Notes and the Trustee's certificate of authentication shall be
substantially in the form of Exhibit A hereto, the terms of which are
incorporated in and made a part of this Indenture. The Exchange Notes issued in
exchange for the Initial Notes and the Trustee's certificate of authentication
shall be substantially in the form of Exhibit B, which is hereby incorporated by
reference and expressly made a part of this Indenture. The Notes may have such
notations, legends or endorsements approved as to form by the Company and
required, as applicable, by law, stock exchange rule, agreements to which the
Company is subject and/or usage. Each Note shall be dated the date of its
authentication. The Notes shall be issuable only in denominations of $1,000 and
integral multiples thereof. The terms of the Notes set forth in Exhibit A and
Exhibit B are part of the terms of this Indenture.

      (a)   Global Notes. Initial Notes offered and sold to "qualified
institutional buyers" (as defined in Rule 144A under the Securities Act) (a
"QIB") in reliance on Rule 144A under the Securities Act ("Rule 144A") or in
reliance on Regulation S under the Securities Act ("Regulation S"), each shall
be issued initially in the form of permanent global Notes in definitive, fully
registered form without interest coupons (each a "Global Note") with the global
security legend and restricted security legend set forth in Exhibit A hereto,
which shall be deposited on behalf of the purchasers of the Initial Notes
represented thereby with the Trustee, as custodian for the Depository (or with
such other custodian as the Depository may direct), and registered in the name
of the Depository or a nominee of the Depository, duly executed by the Company
and authenticated by the Trustee as hereinafter provided. The aggregate
principal amount of the Global Notes may from time to time be increased or
decreased by adjustments made on the records of the Trustee and the Depository
or its nominee as hereinafter provided.

      (b)   Book-Entry Provisions. This Section 2.01(b) shall apply only to
Global Notes deposited with or on behalf of the Depository.

      The Company shall execute and the Trustee shall, in accordance with this
Section 2.01(b), authenticate and deliver initially the Global Notes that (i)
shall be registered in the name of the Depository or the nominee of the
Depository and (ii) shall be delivered by the Trustee to the Depository or
pursuant to the Depository's instructions or held by the Trustee as custodian
for the Depository.

      Members of, or participants in, the Depository ("Agent Members") shall
have no rights under this Indenture with respect to the Global Notes held on
their behalf by the Depository or by the Trustee as the custodian of the
Depository or under such Global Notes, and the Depository may be treated by the
Company, the Trustee and any agent of the Company or the Trustee as the absolute
owner of such Global Notes for all purposes whatsoever. Notwithstanding the
foregoing, nothing herein shall prevent the Company, the Trustee or any agent of
the Company or the Trustee from giving effect to any written certification,
proxy or other authorization furnished by the Depository or impair, as between
the Depository and its Agent Members, the operation of customary practices of
such Depository governing the exercise of the rights of a holder of a beneficial
interest in a Global Note.



                                       14

      (c)   Definitive Notes. Except as provided in this Section, Section 2.06
or Section 2.09, owners of beneficial interests in a Global Note will not be
entitled to receive Definitive Notes. Purchasers of Initial Notes who are
institutional "accredited investors" as described in Rule 501(a)(1), (2), (3) or
(7) under the Securities Act (each an "IAI") and who are not QIBs and did not
purchase Initial Notes sold in reliance on Regulation S will receive physical
delivery of certificated Initial Notes (certificated Notes are herein referred
to as "Definitive Notes"); provided, however, that upon transfer of such
Definitive Notes to a QIB or in reliance on Regulation S such Definitive Notes
will, unless the applicable Global Note has previously been exchanged for
Definitive Notes pursuant to Section 2.06 or Section 2.09, be exchanged for an
interest in the Global Note pursuant to the provisions of Section 2.06.
Definitive Notes will bear the restricted securities legend set forth on Exhibit
A unless removed in accordance with Section 2.06(d).

Section 2.02.     Execution and Authentication.

      Two Officers of the Company shall sign the Notes for the Company, and two
Officers of each Subsidiary Guarantor shall sign the notation on the Notes
relating to the Guarantee of such Subsidiary Guarantor on behalf of such
Subsidiary Guarantor, in each case by manual or facsimile signature.

      If an Officer of the Company or any Subsidiary Guarantor whose signature
is on a Note no longer holds that office at the time such Note is authenticated
such Note shall be valid nevertheless.

      A Note shall not be valid until authenticated by the manual signature of
the Trustee. The signature of the Trustee shall be conclusive evidence that a
Note has been authenticated in accordance with the terms of this Indenture.

      The Trustee, upon a written order of the Company signed by two Officers of
the Company, shall authenticate and deliver Notes for original issue in an
aggregate principal amount specified in such order. Such order shall specify the
amount of the Notes to be authenticated and the date on which the original issue
of Notes is to be authenticated. The aggregate principal amount of Notes which
may be authenticated and delivered under this Indenture is unlimited.

      The Trustee may appoint an authenticating agent acceptable to the Company
to authenticate the Notes. Unless limited by the terms of such appointment, any
such authenticating agent may authenticate the Notes whenever the Trustee may do
so. Each reference in this Indenture to authentication by the Trustee includes
authentication by such authenticating agent of the Trustee. An authenticating
agent has the same rights as an Agent to deal with the Company or an Affiliate
of the Company.

Section 2.03.     Registrar and Paying Agent.

      The Company shall maintain (i) an office or agency where the Notes may be
presented for registration of transfer or for exchange (including any
co-registrar, the "Registrar"); and (ii) an office or agency where the Notes may
be presented for payment ("Paying Agent"). The Registrar shall keep a register
of the Holders of Notes and of the transfer and exchange of such Notes (the
"Note Register"). The Company may appoint one or more co-registrars and one or
more additional paying agents. The term "Paying Agent" shall include any such
additional paying agent. The Company may change any Paying Agent, Registrar or
co-registrar without prior notice to any Holder of a Note. The Company shall
notify the Trustee and the Trustee shall, at the Company's expense, notify the
Holders of the Notes of the name and address of any Agent not a party to this
Indenture. The Company or any of its domestically incorporated Wholly Owned
Subsidiaries may act as Paying Agent, Registrar or co-registrar. The Company
shall enter into an appropriate agency agreement with any Agent not a party to
this Indenture, which shall incorporate the provisions of the TIA. Any such
agency agreement shall implement the provisions of this Indenture that relate to
such Agent. If the Company fails to maintain a Registrar or Paying Agent, or
fails to give the foregoing notice, the Trustee shall act as such, as
appropriate, and shall be entitled to appropriate compensation in accordance
with Section 7.07.



                                       15

      The Company initially appoints the Trustee as Registrar, Paying Agent and
agent for service of notices and demands in connection with the Notes.

Section 2.04.     Paying Agent to Hold Money in Trust.

      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 principal, premium, if any, and interest when so becoming
due. The Company shall require each Paying Agent (other than the Trustee) to
agree in writing that the Paying Agent shall hold in trust for the benefit of
the Holders of the Notes 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
shall notify the Trustee of any Default by the Company in making any such
payment. While any such Default continues, the Trustee may require a Paying
Agent to pay all money held by it to the Trustee and to account for any funds
disbursed. The Company at any time may require a Paying Agent to pay all money
held by it to the Trustee. Upon payment over to the Trustee and accounting for
any funds disbursed, the Paying Agent (if other than the Company) shall have no
further liability for the money delivered to the Trustee. If the Company acts as
Paying Agent, it shall segregate and hold in a separate trust fund for the
benefit of the Holders of the Notes all money held by it as Paying Agent.

Section 2.05.     Lists of Holders of Notes.

      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
the Holders of Notes. If the Trustee is not the Registrar, the Company shall
furnish or cause to be furnished to the Trustee at least ten Business Days
before each interest payment 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 the Holders of Notes, including
the aggregate principal amount of Notes held by each such Holder of Notes.

Section 2.06.     Transfer and Exchange.

      (a)   Transfer and Exchange of Definitive Notes. Definitive Notes shall be
issued in registered form and shall be transferable only upon the surrender of
Definitive Notes for registration of transfer. When Definitive Notes are
presented to the Registrar with a request to register the transfer or to
exchange them for an equal principal amount of Definitive Notes of other
denominations, the Registrar shall register the transfer or make the exchange if
its requirements for such transactions are met; provided, however, that any
Definitive Notes presented or surrendered for registration of transfer or
exchange:

            (i)   shall be duly endorsed or accompanied by a written instruction
      of transfer in form satisfactory to the Registrar and the Trustee duly
      executed by the Holder thereof or by his attorney duly authorized in
      writing; and

            (ii)  are being transferred pursuant to Section 2.06(b) or pursuant
      to clause (A), (B) or (C) below, and are accompanied by the following
      additional information and documents, as applicable:

                  (A)   if such Definitive Notes are being delivered to the
            Registrar by a Holder for registration in the name of such Holder,
            without transfer, a certification from such Holder to that effect
            (in the form set forth on the reverse of the Note); or

                  (B)   if such Definitive Notes are being transferred to the
            Company a certification to that effect (in the form set forth on the
            reverse of the Note); or

                  (C)   if such Definitive Notes are being transferred pursuant
            to an exemption from registration in accordance with Rule 144, Rule
            144A or Regulation S under the Securities Act: (i) a certificate to
            that effect (in the form of Annex A set forth on the reverse of the
            Note), and (ii) if the Company or Registrar so requests, evidence
            reasonably satisfactory to them as to the compliance with the
            restrictions set forth in the legend set forth in Section
            2.06(d)(i); or



                                       16

                  (D)   if such Definitive Notes are being transferred to an IAI
            pursuant to an exemption from the registration requirements of the
            Securities Act other than those listed in clause (C) above: (i) a
            certificate to that effect (in the form of Annex B set forth on the
            reverse of the Note), and (ii) if the Company or Registrar so
            requests, evidence reasonably satisfactory to them as to the
            compliance with the restrictions set forth in the legend set forth
            in Section 2.06(d)(i).

      (b)   Restrictions on Transfer of a Definitive Note for a Beneficial
Interest in the Global Note. A Definitive Note may not be exchanged for a
beneficial interest in a Global Note except upon satisfaction of the
requirements set forth below. Upon receipt by the Trustee of a Definitive Note,
duly endorsed or accompanied by appropriate instruments of transfer, in form
satisfactory to the Trustee, together with:

            (i)   certification, in the form of Annex A set forth on the reverse
      of the Note, that such Definitive Note is being transferred to a QIB in
      accordance with Rule 144A under the Securities Act or to a non-U.S. person
      in accordance with Rule 904 under the Securities Act or certification in
      the form of Annex B set forth on the reverse of the Note, that such
      Definitive Note is being transferred to an IAI pursuant to an exemption
      from the registration requirements of the Securities Act; and

            (ii)  written instructions directing the Trustee to make, or to
      direct the Notes Custodian to make, an adjustment on its books and records
      with respect to such Global Note to reflect an increase in the aggregate
      principal amount of the Notes represented by such Global Note,

then the Trustee shall cancel such Definitive Note and cause, or direct the
Notes Custodian to cause, in accordance with the standing instructions and
procedures existing between the Depository and the Notes Custodian, the
aggregate principal amount of Notes represented by the Global Note to be
increased accordingly. If the Global Note is not then outstanding, the Company
shall issue and the Trustee shall authenticate, upon written order of the
Company in the form of an Officers' Certificate, a new Global Note in the
appropriate principal amount.

      (c)   Transfer and Exchange of Global Notes.

            (i)   The transfer and exchange of the Global Note or beneficial
      interests therein shall be effected through the Depository, in accordance
      with this Indenture (including applicable restrictions on transfer set
      forth herein, if any) and the procedures of the Depository therefor, if
      applicable.

            (ii)  Notwithstanding any other provisions of this Indenture (other
      than the provisions set forth in Section 2.09), a Global Note may not be
      transferred as a whole except by the Depository to a nominee of the
      Depository or by a nominee of the Depository to the Depository or another
      nominee of the Depository or by the Depository or any such nominee to a
      successor Depository or a nominee of such successor Depository.

            (iii) In the event that a Global Note is exchanged for Definitive
      Notes pursuant to Section 2.09, prior to the consummation of an Exchange
      Offer or the effectiveness of a Shelf Registration Statement with respect
      to such Notes, such Notes may be exchanged only in accordance with such
      procedures as are substantially consistent with the provisions of this
      Section 2.06 (including the certification requirements set forth on the
      reverse of the Initial Notes) and such other procedures as may from time
      to time be adopted by the Company.

      (d)   Legend.

            (i)   Except as permitted by the following paragraphs (ii) and
      (iii), each certificate evidencing a Transfer Restricted Note (and all
      Notes issued in exchange therefor or substitution thereof) shall bear a
      legend in substantially the following form:

            "THIS NOTE (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A
      TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE UNITED STATES
      SECURITIES


                                       17

      ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND THIS NOTE MAY NOT BE
      OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION
      OR AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THIS NOTE IS
      HEREBY NOTIFIED THAT THE SELLER MAY BE RELYING ON THE EXEMPTION FROM THE
      PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A
      THEREUNDER. THE HOLDER OF THIS NOTE AGREES FOR THE BENEFIT OF THE ISSUER
      THAT:

                  (A)   SUCH NOTE MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE
            TRANSFERRED, ONLY

                  (i)   (a) TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A
            QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE
            SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE
            144A, (b) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144
            UNDER THE SECURITIES ACT, (c) OUTSIDE THE UNITED STATES TO A FOREIGN
            PERSON IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 904 UNDER
            THE SECURITIES ACT, (d) TO AN INSTITUTIONAL "ACCREDITED INVESTOR"
            (AS DEFINED IN RULE 501(a)(1), (2), (3) OR (7) OF THE SECURITIES ACT
            (AN "INSTITUTIONAL ACCREDITED INVESTOR")) THAT, PRIOR TO SUCH
            TRANSFER, FURNISHES THE TRUSTEE A SIGNED LETTER CONTAINING CERTAIN
            REPRESENTATIONS AND AGREEMENTS (THE FORM OF WHICH CAN BE OBTAINED
            FROM THE TRUSTEE) AND, IF SUCH TRANSFER IS IN RESPECT OF AN
            AGGREGATE PRINCIPAL AMOUNT OF NOTES LESS THAN $100,000, AN OPINION
            OF COUNSEL ACCEPTABLE TO THE ISSUER THAT SUCH TRANSFER IS IN
            COMPLIANCE WITH THE SECURITIES ACT, OR (e) IN ACCORDANCE WITH
            ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
            SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL IF THE ISSUER
            SO REQUESTS),

                  (ii)  TO THE ISSUER, OR

                  (iii) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT AND, IN
            EACH CASE, IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY
            STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION AND

                  (B)   THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED
            TO, NOTIFY ANY PURCHASER FROM IT OF THIS NOTE OF THE RESALE
            RESTRICTIONS SET FORTH IN (A) ABOVE."

      When set forth on a Global Note, the legend will include the following
additional words:

      "UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), NEW YORK, NEW
YORK, 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
SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY
PAYMENT IS MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC), 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.

      TRANSFERS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT
NOT IN PART, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR'S
NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL NOTE SHALL BE LIMITED TO


                                       18

TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE INDENTURE
REFERRED TO ON THE REVERSE HEREOF."

            (ii)  Upon any sale or transfer of a Transfer Restricted Note
      (including any Transfer Restricted Note represented by a Global Note)
      pursuant to Rule 144 under the Securities Act or an effective registration
      statement under the Securities Act, which shall be certified to the
      Trustee and Registrar upon which each may conclusively rely:

                  (A)   in the case of any Transfer Restricted Note that is a
            Definitive Note, the Registrar shall permit the Holder thereof to
            exchange such Transfer Restricted Note for a Definitive Note that
            does not bear the legend set forth above and rescind any restriction
            on the transfer of such Transfer Restricted Note;

                  (B)   in the case of any Transfer Restricted Note represented
            by a Global Note, such Transfer Restricted Note shall not be
            required to bear the legend set forth in (i) above if all other
            interests in such Global Note have been or are concurrently being
            sold or transferred pursuant to Rule 144 under the Securities Act or
            pursuant to an effective registration statement under the Securities
            Act, but such Transfer Restricted Note shall continue to be subject
            to the provisions of Section 2.06(c) hereof; provided, however, that
            with respect to any request for an exchange of a Transfer Restricted
            Note that is represented by a Global Note for a Definitive Note that
            does not bear a legend set forth in (i) above, which request is made
            in reliance upon Rule 144 under the Securities Act, the Holder
            thereof shall certify in writing to the Notes Registrar that such
            request is being made pursuant to Rule 144 under the Securities Act
            (such certification to be substantially in the form of Exhibit A
            hereto and upon which the Registrar may conclusively rely).

                  (C)   Notwithstanding the foregoing, upon consummation of an
            Exchange Offer, the Company shall issue and, upon receipt of an
            authentication order in accordance with Section 2.02 hereof, the
            Trustee shall authenticate Exchange Notes in exchange for Initial
            Notes accepted for exchange in the Exchange Offer, which Exchange
            Notes shall not bear the legend set forth in (i) above (other than
            the Global Note legend), and the Registrar shall rescind any
            restriction on the transfer of such Notes, in each case unless the
            Holder of such Initial Notes is either (A) a broker-dealer, (B) a
            Person participating in the distribution of the Notes or (C) a
            Person who is an affiliate (as defined in Rule 144 under the
            Securities Act) of the Company. The Company shall identify to the
            Trustee such Holders of the Notes in a written certification signed
            by an Officer of the Company and, absent certification from the
            Company to such effect, the Trustee shall assume that there are no
            such Holders.

            (iii) After a transfer of any Initial Notes during the period of the
      effectiveness of a Shelf Registration Statement with respect to such
      Initial Notes, all requirements pertaining to legends on such Initial Note
      will cease to apply, the requirements requiring any such Initial Note
      issued to certain Holders be issued in the form of a Global Note will
      cease to apply, and a Note in the form of a Definitive Note without
      legends will be available to the transferee of the Holder of such Initial
      Notes or upon receipt of directions to transfer such Holder's interest in
      a Global Note, as applicable.

            (iv)  Upon the consummation of an Exchange Offer with respect to
      Initial Notes pursuant to which Holders of such Initial Notes are offered
      Exchange Notes in exchange for their Initial Notes, (A) all requirements
      pertaining to such Initial Notes that Initial Notes issued to certain
      Holders be issued in the form of a Global Note will cease to apply, (B)
      Initial Notes in the form of Definitive Notes with the restricted
      securities legend set forth in Exhibit A hereto will be available to
      Holders of such Initial Notes that do not exchange their Initial Notes,
      and (C) Exchange Notes in the form of Definitive Notes without the
      restricted securities legend set forth in Exhibit A hereto will be
      available to Holders that exchange such Initial Notes in such Exchange
      Offer.



                                       19

      (e)   Cancellation or Adjustment of Global Note. At such time as all
beneficial interests in the Global Note have either been exchanged for
Definitive Notes, redeemed, repurchased or canceled, such Global Note shall be
returned to the Depository for cancellation or retained and canceled by the
Trustee. At any time prior to such cancellation, if any beneficial interest in
the Global Note is exchanged for Definitive Notes, redeemed, repurchased or
canceled, the principal amount of Notes represented by such Global Note shall be
reduced and an adjustment shall be made by the Trustee or the Notes Custodian to
reflect such reduction on the books and records of the Notes Custodian for such
Global Note with respect to such Global Note.

      (f)   Obligations with Respect to Transfers and Exchanges of Notes.

            (i)   To permit registration of transfers and exchanges, the Company
      shall execute and the Trustee shall authenticate certificated Notes,
      Definitive Notes and Global Notes at the Registrar's or co-registrar's
      request.

            (ii)  The Company may require payment of a sum sufficient to pay all
      taxes, assessments or other governmental charges in connection with any
      transfer or exchange pursuant to this Section 2.06.

            (iii) The Company shall not be required to make and the Registrar or
      co-registrar need not register transfers or exchanges of Definitive Notes
      selected for redemption (except, in the case of any Definitive Note to be
      redeemed in part, the portion thereof not to be redeemed), or any Notes
      for a period of 15 days before the mailing of a notice of redemption of
      Notes to be redeemed or 15 days before an interest payment date.

            (iv)  Prior to the due presentation for registration of transfer of
      any Note, the Company, the Trustee, the Paying Agent, the Registrar or any
      co-registrar may deem and treat the person in whose name a Note is
      registered as the absolute owner of such Note for the purpose of receiving
      payment of principal of and interest on such Note and for all other
      purposes whatsoever, whether or not such Note is overdue, and none of the
      Company, the Trustee, the Paying Agent, the Registrar or any co-registrar
      shall be affected by notice to the contrary.

            (v)   All Notes issued upon any transfer or exchange pursuant to the
      terms of this Indenture will evidence the same debt and will be entitled
      to the same benefits under this Indenture as the Notes surrendered upon
      such transfer or exchange.

      (g)   No Obligation of 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 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


                                       20

      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 2.07.     Replacement Notes.

      If any mutilated Note is surrendered to the Trustee, or the Company and
the Trustee receive evidence to their satisfaction of the destruction, loss or
theft of any Note, the Company shall issue and the Trustee shall authenticate a
replacement Note if the Company's and the Trustee's reasonable requirements for
the replacements of Notes are met. An indemnity bond shall be supplied by the
Holder that is sufficient in the judgment of the Trustee, the Company and the
Subsidiary Guarantors to protect the Company, the Trustee, any Agent or any
authenticating agent from any loss which any of them may suffer if a Note is
replaced. The Company may charge for its expenses (including fees and expenses
of the Trustee) in replacing a Note.

      Every replacement Note shall be an obligation of the Company.

Section 2.08.     Outstanding Notes; Treasury Notes.

      The Notes outstanding at any time are all the Notes authenticated by the
Trustee, except for those canceled by it, those delivered to it for cancellation
and those described in this Section 2.08 as not outstanding. A Note does not
cease to be outstanding because the Company, a Subsidiary Guarantor or any of
their respective Subsidiaries or Affiliates of the Company holds such Note.

      In determining whether the Holders of the required principal amount of
Notes have concurred in any direction, waiver or consent, Notes owned by the
Company, any Subsidiary Guarantor or an Affiliate of the Company shall be
considered as though they are not outstanding, except that for the purposes of
determining whether the Trustee shall be protected in relying on any such
direction, waiver or consent, only Notes which a Trust Officer of the Trustee
actually knows are so owned shall be so disregarded.

      If a Note is replaced pursuant to Section 2.07, it shall cease to be
outstanding unless the Trustee receives proof satisfactory to it that such
replaced Note is held by a bona fide purchaser. A mutilated Note ceases to be
outstanding upon surrender of such Note and replacement thereof pursuant to
Section 2.07.

      If the Paying Agent segregates and holds in trust, in accordance with this
Indenture, on a redemption date or maturity date money sufficient to pay all
principal and interest payable on that date with respect to the Notes (or
portions thereof) to be redeemed or maturing, as the case may be, and the Paying
Agent is not prohibited from paying such money to the Holders of Notes on that
date pursuant to the terms of this Indenture, then on and after that date such
Notes (or portions thereof) shall cease to be outstanding and interest thereon
shall cease to accrue.

Section 2.09.     Temporary Notes and Definitive Notes.

      (a)   Until certificates in definitive form for the Notes are ready for
delivery, the Company may prepare and the Trustee shall authenticate
certificates in temporary form for the Notes. Certificates in temporary form for
the Notes shall be substantially in the form of certificates in definitive form
for the Notes but may have such variations as the Company and the Trustee
consider appropriate for certificates in temporary form for the Notes. Without
unreasonable delay, the Company shall prepare and the Trustee shall authenticate
certificates in definitive form for the Notes in exchange for certificates in
temporary form for the Notes. Until such exchange, certificates in temporary
form for the Notes shall be entitled to the same rights, benefits and privileges
as certificates in definitive form for the Notes.

      (b)   A Global Note deposited with the Depository or with the Trustee as
custodian for the Depository pursuant to Section 2.01 shall be transferred to
the beneficial owners thereof in the form of Definitive Notes in an aggregate
principal amount equal to the principal amount of such Global Note, in exchange
for such Global Note, only if such transfer complies with Section 2.06 and (i)
the Depository notifies the Company that it is unwilling or unable to continue
as Depository for such Global Note or if at any time such Depository ceases to
be a "clearing


                                       21

agency" registered under the Exchange Act and a successor depository is not
appointed by the Company within 90 days of such notice, (ii) an Event of Default
has occurred and is continuing or (iii) the Company, in its sole discretion,
notifies the Trustee in writing that it elects to cause the issuance of
Definitive Notes under this Indenture.

      (c)   Any Global Note that is transferable to the beneficial owners
thereof pursuant to this Section shall be surrendered by the Depository to the
Trustee to be so transferred, in whole or from time to time in part, without
charge, and the Trustee shall authenticate and deliver, upon such transfer of
each portion of such Global Note, an equal aggregate principal amount of
Definitive Notes of authorized denominations. Any portion of a Global Note
transferred pursuant to this Section shall be executed, authenticated and
delivered only in denominations of $1,000 and any integral multiple thereof and
registered in such names as the Depository shall direct. Any Definitive Note
delivered in exchange for an interest in a Global Note shall, except as
otherwise provided by Section 2.06(d), bear the restricted securities legend set
forth in Exhibit A hereto.

      (d)   Subject to the provisions of Section 2.09(c), the registered Holder
of a Global Note may grant proxies and otherwise authorize any person, including
agent members, participants and persons that may hold interests through agent
members, to take any action which a Holder is entitled to take under this
Indenture or the Notes.

      (e)   In the event of the occurrence of any of the events specified in
Section 2.09(b), the Company will promptly make available to the Trustee a
reasonable supply of Definitive Notes in definitive, fully registered form
without interest coupons.

Section 2.10.     Cancellation.

      The Company or any Subsidiary Guarantor at any time may deliver Notes to
the Trustee for cancellation. The Registrar and the Paying Agent shall forward
to the Trustee any Notes surrendered to them for registration of transfer,
exchange or payment. The Trustee and no one else shall cancel all Notes
surrendered for registration of transfer, exchange, payment, replacement or
cancellation, and shall dispose of such canceled Notes in its customary manner.

Section 2.11.     Defaulted Interest.

      If the Company defaults in a payment of interest on the Notes, the Company
shall pay such defaulted interest in any lawful manner. The Company may pay such
defaulted interest to the Persons who are Holders of the Notes on a subsequent
special record date, which date shall be at the earliest practicable date but in
all events at least five Business Days prior to the payment date, in each case
at the rate provided in the Notes. The Company shall fix or cause to be fixed
any such special record date and payment date, and, at least 15 days prior to
the special record date, the Company shall mail or cause to be mailed to each
Holder of a Note a notice that states such special record date, such related
payment date and the amount of any such defaulted interest to be paid to Holders
of the Notes.

Section 2.12.     CUSIP Number.

      The Company in issuing the Notes may use a "CUSIP" number, and, if the
Company shall do so, the Trustee shall use such CUSIP number in notices of
redemption or exchange as a convenience to Holders; provided, however, that any
such notice may state that no representation is made as to the correctness or
accuracy of the CUSIP number printed in such notice or on the Notes and that
reliance may be placed only on the other identification numbers printed on the
Notes. The Company will promptly notify the Trustee of any change in a CUSIP
number.

Section 2.13.     Persons Deemed Owners.

      The Company, any Subsidiary Guarantor, the Trustee, any Paying Agent and
any authenticating agent may treat the Person in whose name any Note is
registered as the owner of such Note for the purpose of receiving payments of
principal of, premium, if any, or interest on such Note and for all other
purposes. None of the


                                       22

Company, any Subsidiary Guarantor, the Trustee, any Paying Agent or any
authenticating agent shall be affected by any notice to the contrary.

Section 2.14.     Issuance of Additional Notes.

      The Company may, subject to Article Four of this Indenture and applicable
law, issue additional Notes under this Indenture. The Notes issued on the Issue
Date and any additional Notes subsequently issued shall be treated as a single
class for all purposes under this Indenture.

                                  ARTICLE THREE

                                   REDEMPTION

Section 3.01.     Notice to Trustee.

      If the Company elects to redeem Notes pursuant to the optional redemption
provisions of paragraph 6 of the Notes, it shall furnish to the Trustee, at
least 45 days but not more than 60 days before the redemption date, an Officers'
Certificate setting forth the redemption date, the principal amount of Notes to
be redeemed and the redemption price.

Section 3.02.     Selection of Notes to Be Redeemed.

      If less than all of the Notes are to be redeemed, the Trustee shall select
the Notes to be redeemed in multiples of $1,000 pro rata, by lot or by any other
method that the Trustee considers fair and appropriate; provided that if the
Notes are listed on any securities exchange, that such method complies with the
requirements of such exchange. The Trustee shall make the selection from
outstanding Notes not previously called for redemption not less than 30 nor more
than 60 days prior to the redemption date. The Trustee may select for redemption
portions of the principal of Notes that have denominations larger than $1,000.
Notes and portions of them it selects shall be in amounts of $1,000 or whole
multiples of $1,000. Provisions of this Indenture that apply to Notes called for
redemption also apply to portions of Notes called for redemption. The Trustee
shall notify the Company promptly of the Notes or portions of Notes selected for
redemption.

Section 3.03.     Notice of Redemption.

      (a)   At least 30 days but not more than 60 days before a redemption date,
the Company shall mail a notice of redemption by first-class mail to each Holder
of Notes to be redeemed at such Holder's registered address.

      The notice shall identify the Notes to be redeemed and shall state:

            (1)   the redemption date;

            (2)   the redemption price;

            (3)   the aggregate principal amount of Notes being redeemed;

            (4)   the name and address of the Paying Agent;

            (5)   that Notes called for redemption must be surrendered to the
      Paying Agent at the address specified in such notice to collect the
      redemption price;



                                       23

            (6)   that, unless the Company defaults in the payment of the
      redemption price or accrued interest, interest on Notes called for
      redemption ceases to accrue on and after the redemption and the only
      remaining right of the Holders is to receive payment of the redemption
      prices upon surrender to the Paying Agent of the Notes;

            (7)   if any Note is being redeemed in part, the portion of the
      principal amount of such Note to be redeemed and that, after the
      redemption date, upon surrender of such Note, a new Note or Notes in
      principal amount equal to the unredeemed portion will be issued;

            (8)   the paragraph of the Notes pursuant to which the Notes called
      for redemption are being redeemed; and

            (9)   the CUSIP number of the Notes.

      (b)   At the Company's request, the Trustee shall give the notice of
redemption required in Section 3.03(a) in the Company's name and at the
Company's expense; provided, however, that the Company shall deliver to the
Trustee, at least 45 days prior to the redemption date, an Officers' Certificate
requesting that the Trustee give such notice and setting forth the information
to be stated in such notice as provided in Section 3.03(a).

Section 3.04.     Effect of Notice of Redemption.

      Once notice of redemption is mailed in accordance with Section 3.03, Notes
called for redemption become due and payable on the redemption date at the
redemption price. Upon surrender to the Paying Agent, such Notes shall be paid
at the redemption price, plus accrued interest to the redemption date.

Section 3.05.     Deposit of Redemption Price.

      Prior to the redemption date, the Company shall deposit with the Paying
Agent funds available on the redemption date sufficient to pay the redemption
price of, and accrued interest on, the Notes to be redeemed on that date. The
Paying Agent shall promptly return to the Company any money so deposited which
is not required for that purpose upon the written request of the Company, except
with respect to monies owed as obligations to the Trustee pursuant to Article
Seven.

      If any Note called for redemption shall not be so paid upon redemption
because of the failure of the Company to comply with the preceding paragraph,
interest will continue to be payable on the unpaid principal and premium, if
any, including from the redemption date until such principal and premium, if
any, is paid, and, to the extent lawful, on any interest not paid on such unpaid
principal, in each case at the rate provided in the Notes and in Section 4.01
hereof.

Section 3.06.     Notes Redeemed in Part.

      Upon surrender of a Note that is to be redeemed in part, the Company shall
issue and the Trustee shall authenticate for the Holder, at the expense of the
Company, a new Note equal in aggregate amount to the unredeemed portion of the
Note surrendered.



                                       24

                                  ARTICLE FOUR

                                    COVENANTS

Section 4.01.     Payment of Notes.

      The Company shall pay the principal of, premium, if any, and interest on,
the Notes on the dates and in the manner provided in the Notes and this
Indenture. Principal, premium, if any, and interest shall be considered paid on
the date due if the Trustee or Paying Agent holds on that date money deposited
by the Company designated for and sufficient to pay all principal, premium, if
any, and interest then due.

      The Company shall pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue principal, and premium, if any,
at the rate borne by the Notes to the extent lawful; and it shall pay interest
(including post-petition interest in any proceeding under any Bankruptcy Law) on
overdue installments of interest (without regard to any applicable grace period)
at the same rate to the extent lawful.

Section 4.02.     Commission Reports.

      (a)   The Company shall file with the Trustee, within 15 days after it
files the same with the Commission, copies of the annual reports and the
information, documents and other reports (or copies of any such portions of any
of the foregoing as the Commission may by rules and regulations prescribe) that
the Company is required to file with the Commission pursuant to Section 13 or
15(d) of the Exchange Act. If the Company is not subject to the requirements of
such Section 13 or 15(d), the Company shall file with the Trustee, within 15
days after it would have been required to file the same with the Commission,
financial statements, including any notes thereto (and with respect to annual
reports, an auditors' report by a firm of established national reputation), and
a "Management's Discussion and Analysis of Financial Condition and Results of
Operations," both comparable to that which the Company would have been required
to include in such annual reports, information, documents or other reports if
the Company had been subject to the requirements of such Section 13 or 15(d).
The Company and each Subsidiary Guarantor shall also comply with the provisions
of TIA Section 314(a).

      (b)   If the Company is required to furnish annual or quarterly reports to
its stockholders pursuant to the Exchange Act, the Company shall cause any
annual report furnished to its stockholders generally and any quarterly or other
financial reports furnished by it to its stockholders generally to be filed with
the Trustee and mailed to the Holders at their addresses appearing in the
register of Notes maintained by the Registrar. If the Company is not required to
furnish annual or quarterly reports to its stockholders pursuant to the Exchange
Act, the Company shall cause its financial statements referred to in Section
4.03(b), including any notes thereto (and with respect to annual reports, an
auditors' report by a firm of established national reputation), to be so mailed
to the Holders within 90 days after the end of each of the Company's fiscal
years and within 60 days after the end of each of the Company's first three
fiscal quarters.

      (c)   The Company shall provide the Trustee with a sufficient number of
copies of all reports and other documents and information that the Trustee may
be required to deliver to Holders under this Section. Delivery of such reports,
information and documents to the Trustee is for informational purposes only and
the Trustee's receipt of such shall not constitute constructive notice of any
information contained therein or determinable from information contained
therein, including the Company's compliance with any of its covenants hereunder
(as to which the Trustee is entitled to rely exclusively on Officers'
Certificates).

Section 4.03.     Compliance Certificates.

      (a)   The Company shall deliver to the Trustee, within 90 days after the
end of each fiscal year of the Company, an Officers' Certificate stating that a
review of the activities of the Company and the Subsidiaries during the
preceding fiscal year has been made under the supervision of the signing
Officers with a view to determining whether the Company has kept, observed,
performed and fulfilled its obligations under this Indenture, and further
stating, as to each such Officer signing such certificate, that, to the best of
such Officer's knowledge, the Company


                                       25

and each Subsidiary Guarantor has kept, observed, performed and fulfilled each
and every covenant contained in this Indenture and is not in default in the
performance or observance of any of the terms, provisions and conditions hereof
(or, if a Default or Event of Default shall have occurred, describing all such
Defaults or Events of Default of which such Officer may have knowledge and what
action the Company is taking or proposes to take with respect thereto) and that
to the best of such Officer's knowledge no event has occurred and remains in
existence by reason of which payments on account of the principal of, premium,
if any, or interest, if any, on the Notes are prohibited or, if such event has
occurred, a description of the event and what action the Company and the
Subsidiary Guarantors are taking or propose to take with respect thereto. Such
Officers' Certificate shall comply with TIA Section 314(a)(4).

      (b)   So long as not contrary to the then current recommendations of the
American Institute of Certified Public Accountants, the year-end financial
statements delivered pursuant to Section 4.02 shall be accompanied by a written
statement of the Company's independent public accountants (which shall be a firm
of established national reputation) that in making the examination necessary for
certification of such financial statements nothing has come to their attention
that would lead them to believe that the Company has violated any provisions of
Articles 4 or 5 of this Indenture (to the extent such provisions relate to
accounting matters) or, if any such violation has occurred, specifying the
nature and period of existence thereof, it being understood that such
accountants shall not be liable directly or indirectly to any Person for any
failure to obtain knowledge of any such violation.

      (c)   The Company and the Subsidiary Guarantors will, so long as any of
the Notes are outstanding, deliver to the Trustee as soon as possible and in any
event within five days after any Officer becomes aware of any Default or Event
of Default, an Officers' Certificate specifying such Default or Event of Default
and what action the Company or any Subsidiary Guarantor proposes to take with
respect thereto.

Section 4.04.     Maintenance of Office or Agency.

      The Company will maintain in the Borough of Manhattan, The City of New
York, an office or agency where Notes may be surrendered for registration of
transfer or exchange or for presentation for payment and where notices and
demands to or upon the Company in respect of the Notes and this Indenture may be
served. The Company initially designates The Bank of New York, 101 Barclay
Street, 21 West, New York, New York 10286 to be its agent for purposes of the
preceding sentence. The Company will give prompt written notice to the Trustee
of any change in the location of such office or agency. If at any time the
Company shall fail to maintain any such required office or agency or shall fail
to furnish the Trustee with the address thereof, such presentations, surrenders,
notices and demands may be made or served at the address of the Trustee set
forth in Section 13.02.

      The Company may also from time to time designate one or more other offices
or agencies where the Notes may be presented or surrendered for any or all such
purposes and may from time to time rescind such designations; provided that no
such designation or rescission shall in any manner relieve the Company of its
obligation to maintain an office or agency in the Borough of Manhattan, The City
of New York, for such purposes. The Company will give prompt written notice to
the Trustee of any such designation or rescission and of any change in the
location of any such other office or agency.

Section 4.05.     Corporate Existence.

      Subject to the provisions of the Indenture on mergers, consolidations,
reorganizations, sales of capital stock of Restricted Subsidiaries and releases,
the Company will do or cause to be done all things necessary to preserve and
keep in full force and effect its corporate existence and the corporate,
partnership or other existence of each Restricted Subsidiary and all rights
(charter and statutory) and franchises of the Company and the Restricted
Subsidiaries; provided that the Company shall not be required to preserve the
corporate existence of any Restricted Subsidiary, or any such right or
franchise, if the Board of Directors of the Company shall determine that the
preservation thereof is no longer desirable in the conduct of the business of
the Company and that the loss thereof is not disadvantageous in any material
respect to the Holders.



                                       26

Section 4.06.     Waiver of Stay, Extension or Usury Laws.

      The Company and each Subsidiary Guarantor covenants (to the extent that
each may lawfully do so) that it will not at any time insist upon, plead, or in
any manner whatsoever claim or take the benefit or advantage of, any stay,
extension, or usury law or other law, which would prohibit or forgive the
Company or any Subsidiary Guarantor from paying all or any portion of the
principal of, premium, if any, or interest on the Notes as contemplated herein,
wherever enacted, now or at any time hereafter in force, or which may affect the
covenants or the performance of this Indenture; and (to the extent that each may
lawfully do so) the Company and each Subsidiary Guarantor hereby expressly
waives 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 though
no such law had been enacted.

Section 4.07.     Payment of Taxes and Other Claims.

      The Company shall pay or discharge or cause to be paid or discharged,
before the same shall become delinquent, (a) all taxes, assessments and
governmental charges levied or imposed upon the Company or any Subsidiary or
upon the income, profits or property of the Company or any Subsidiary and (b)
all lawful claims for labor, materials and supplies which, if unpaid, might by
law become a Lien upon the property of the Company or any Subsidiary; provided,
however, that the Company shall not be required to pay or discharge or cause to
be paid or discharged any such tax, assessment, charge or claim whose amount,
applicability or validity is being contested in good faith by appropriate
proceedings.

Section 4.08.     Maintenance of Properties and Insurance; Line of Business.

      (a)   The Company shall cause all properties used or necessary in the
conduct of its business or the business of any Restricted Subsidiary to be
maintained and kept in good condition, repair and working order (ordinary wear
and tear excepted) and supplied with all necessary equipment and shall cause to
be made all necessary repairs, renewals, replacements, betterments and
improvements thereof, all as in the judgment of the Company may be necessary so
that the business carried on in connection therewith may be properly and
advantageously conducted at all times; provided, however, that nothing in this
Section shall prevent the Company from discontinuing the operation or
maintenance of any such property, or disposing of it, if such discontinuance or
disposal is, in the judgment of the Company, desirable in the conduct of its
business and not disadvantageous in any material respect to the Holders.

      (b)   The Company shall provide, or cause to be provided, for itself and
each of its Restricted Subsidiaries, insurance (including appropriate
self-insurance) against loss or damage of the kinds that, in the reasonable,
good faith opinion of the Company are adequate and appropriate for the conduct
of the business of the Company and such Restricted Subsidiaries in a prudent
manner, with reputable insurers or with the government of the United States or
an agency or instrumentality thereof, in such amounts, with such deductibles,
and by such methods as shall be customary, in the reasonable, good faith opinion
of the Company, for corporations similarly situated in the industry.

      (c)   For as 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 4.09.     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.



                                       27

      (b)   Notwithstanding the foregoing, (i) the Company may incur
Indebtedness consisting of the Notes; (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; and (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
(a) any subsequent issuance or transfer that results in any such Indebtedness
being held by a Person other than the Company or a Restricted Subsidiary or (b)
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).

      (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 4.09, 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.

Section 4.10.     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 4.09(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) 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, except in the case of a Restricted
      Payment or series of related Restricted Payments to a present or Former
      Affiliate of the Company having a fair market value in excess of $2
      million, in which case, as determined by an independent accounting,
      appraisal or investment banking firm of national reputation), 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, except in the case of a
      Restricted Payment or series of related Restricted Payments to a present
      or Former Affiliate of the Company having a fair market value in excess of
      $2 million, in which case, as determined by an independent accounting,
      appraisal or investment banking firm of national reputation), 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


                                       28

      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 redesignated an Unrestricted Subsidiary,
      minus the greater of (x) the book value (determined in accordance with
      GAAP) at the date of redesignation 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 redesignation, 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 repaid or
      for which the guarantees of the Company and each of its Restricted
      Subsidiaries which are guarantors thereof have 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 after the
      Issue Date pursuant to this clause (iii); and (F) $30 million.

      (b)   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 in exchange for, or out of the net
proceeds of the substantially concurrent sale (other than to a Restricted
Subsidiary of the Company) of, other shares of Capital Stock (other than
Disqualified Stock) of the Company; or (iii) the defeasance, redemption or
retirement of Indebtedness of the Company which is pari passu or subordinate in
right of payment to the Notes, 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; 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.

Section 4.11.     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 $10
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, except in the case of a
      transaction or series of related transactions with a present or Former
      Affiliate of the Company having a fair market value in excess of $2
      million, in which case, as determined by an independent accounting,
      appraisal or investment banking firm of national reputation);

            (ii)  not less than 85% 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


                                       29

      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 and no
      such consideration shall be received in a transaction with a present or
      Former Affiliate of the Company, or (E) 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 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.

      Notwithstanding the foregoing, the Company and its Restricted Subsidiaries
may dispose of property and assets of the Company or its Restricted Subsidiaries
in exchange for capital property and capital assets (i) which are directly
related to a Principal Business; (ii) which are of the same type of property or
assets, or which have the same function, as the properties or assets being
disposed of; and (iii) which have an aggregate fair market value equal to or
greater than the aggregate fair market value of the property and assets being
disposed of; provided, however, that (A) in no event may the Company and its
Restricted Subsidiaries, in any 12-month period, dispose of property or assets
pursuant to this paragraph having an aggregate fair market value of $10 million
or more and (B) with respect to any property or assets being disposed of having
a fair market value of $1 million or more, the Board of Directors of the Company
shall have determined in good faith and evidenced by a Board Resolution, that
the aggregate fair market value of the property and assets being received by the
Company and its Restricted Subsidiaries is equal to or greater than the
aggregate fair market value of the property and assets being disposed of.

      (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, provided that any such repayment shall result 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)   If, upon completion of the 360-day period (the "Trigger Date"), any
portion of the Net Available Proceeds of any Asset Sale shall not have been
applied by the Company as described in clauses 4.11(b)(i) or (ii) and such
remaining Net Available Proceeds, together with any remaining net cash proceeds
from any prior Asset Sale (such aggregate constituting "Excess Proceeds"),
exceeds $10 million, then the Company will be obligated to make an offer (a "Net
Proceeds Offer") to purchase, from all Holders of the Notes and holders of any
then outstanding Pari Passu Indebtedness required to be repurchased or repaid on
a permanent basis in connection with an Asset Sale, an aggregate principal
amount of Notes and any then outstanding Pari Passu Indebtedness equal to such
Excess Proceeds as follows:

            (1)   not later than the 30th day following the Trigger Date, the
      Company shall (i) give to the Trustee and each Holder of the Notes in the
      manner provided in Section 13.02 hereof, a notice (a "Purchase Notice")
      offering to purchase from all Holders of the Notes the maximum principal
      amount (expressed as a multiple of $1,000) of Notes that may be purchased
      out of an amount (the "Net Proceeds Offer Amount") equal to the product of
      such Excess Proceeds multiplied by a fraction, the numerator of which is
      the outstanding principal amount of the Notes and the denominator of which
      is the sum of the outstanding principal amount of the Notes and any then
      outstanding Pari Passu Indebtedness (subject to proration in the event
      such amount is less than the aggregate Offered Price (as hereinafter
      defined) of all Notes tendered),


                                       30

      and (ii) to the extent required by any then outstanding Pari Passu
      Indebtedness and provided there is a permanent reduction in the principal
      amount of such Pari Passu Indebtedness, the Company shall make an offer to
      purchase such Pari Passu Indebtedness (the "Pari Passu Offer") in an
      amount (the "Pari Passu Indebtedness Amount") equal to the excess of the
      Excess Proceeds over the Net Proceeds Offer Amount.

            (2)   the offer price for the Notes shall be payable in cash in an
      amount equal to 100% of the principal amount of the Notes tendered
      pursuant to a Net Proceeds Offer, plus accrued and unpaid interest, if
      any, to the date such Net Proceeds Offer is consummated (the "Offered
      Price"), in accordance with paragraphs (d) and (e) of this Section. To the
      extent that the aggregate Offered Price of the Notes tendered pursuant to
      a Net Proceeds Offer is less than the Net Proceeds Offer Amount relating
      thereto or the aggregate amount of the Pari Passu Indebtedness that is
      purchased or repaid pursuant to the Pari Passu Offer is less than the Pari
      Passu Indebtedness Amount (such shortfall constituting a "Net Proceeds
      Deficiency"), the Company may use such Net Proceeds Deficiency, or a
      portion thereof, for general corporate purposes, subject to the
      limitations of Section 4.10 hereof.

            (3)   if the aggregate Offered Price of Notes validly tendered and
      not withdrawn by Holders thereof exceeds the Net Proceeds Offer Amount,
      Notes to be purchased will be selected on a pro rata basis by the Trustee
      based on the principal amount of Notes so tendered. Upon completion of a
      Net Proceeds Offer and a Pari Passu Offer, the amount of Excess Proceeds
      shall be reset to zero.

      The Purchase Notice shall set forth a purchase date (the "Net Proceeds
Payment Date"), which shall be on a Business Day no earlier than 30 days nor
later than 70 days from the Trigger Date. The Purchase Notice shall also state
(i) that a Trigger Date with respect to one or more Asset Sales has occurred and
that such Holder has the right to require the Company to repurchase such
Holder's Notes at the Offered Price, subject to the limitations described in the
foregoing paragraph (3), (ii) any information regarding such Net Proceeds Offer
required to be furnished pursuant to Rule 14e-1 under the Exchange Act and any
other securities laws and regulations thereunder, (iii) that any Note, or
portion thereof, not tendered or accepted for payment will continue to accrue
interest, (iv) that, unless the Company defaults in depositing money with the
Paying Agent in accordance with paragraph (e) of this Section 4.11, or payment
is otherwise prevented, any Note, or portion thereof, accepted for payment
pursuant to the Net Proceeds Offer shall cease to accrue interest after the Net
Proceeds Payment Date, and (v) the instructions a Holder must follow in order to
have its Notes repurchased in accordance with paragraph (d) of this Section.

      (d)   Notice of a Net Proceeds Offer to purchase the Notes will be made on
behalf of the Company not less than 25 business days nor more than 60 business
days before the Net Proceeds Payment Date. Notes tendered to the Company
pursuant to a Net Proceeds Offer will cease to accrue interest after the Net
Proceeds Payment Date. If the Net Proceeds 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 Net
Proceeds Offer.

      (e)   On the Net Proceeds Payment Date, the Company will (i) accept for
payment Notes or portions thereof pursuant to the Net Proceeds Offer in an
aggregate principal amount equal to the Net Proceeds Offer Amount or such lesser
amount of Notes as has been tendered, (ii) deposit with the Paying Agent money
sufficient to pay the purchase price of all Notes or portions thereof so
tendered in an aggregate principal amount equal to the lesser of (A) the Net
Proceeds Offer Amount or (B) the aggregate principal amount of all Notes or
portions thereof so tendered, and (iii) deliver, or cause to be delivered 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.
If the aggregate principal amount of Notes tendered exceeds the Net Proceeds
Offer Amount, the Trustee will select the Notes to be purchased (in integral
multiples of $1,000) pro rata or by lot based on the principal amount of Notes
so tendered. The Paying Agent will promptly mail or deliver to Holders so
accepted payment in an amount equal to the purchase price, and the Company will
execute and the Trustee will promptly authenticate and mail or make available
for delivery to such Holders a new Note equal in principal amount to any
unpurchased portion of the Note surrendered. Any Notes not so accepted will be
promptly mailed or delivered to the Holder thereof. The Company will publicly
announce the results of the Net Proceeds Offer on or as soon as practicable
after the Net Proceeds Payment Date. For purposes of this Section 4.11, the
Trustee will act as the Paying Agent.



                                       31

      (f)   During the period between any Asset Sale and the application of the
Net Available Proceeds therefrom in accordance with this Section 4.11, all Net
Available Proceeds shall be invested in Permitted Financial Investments or may
be used to repay Indebtedness under a Bank Credit Facility.

      (g)   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 at the option of the Holders
pursuant to a Net Proceeds Offer.

Section 4.12.     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 (i) any Indebtedness of
the Company (other than Senior Indebtedness of the Company), unless the Notes
are equally and ratably secured or (ii) 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;
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.

Section 4.13.     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 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 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.

Section 4.14.     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) a present or Former 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 5% 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


                                       32

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) an Officer's Certificate shall not be required for Affiliate Transactions
that, in the aggregate, do not exceed $100,000 in any 12-month period, (w)
transactions between or among the Company and any of its Restricted Subsidiaries
shall not be deemed to constitute Affiliate Transactions, (x) 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, and (y) 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 present
or Former Affiliates 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 4.15.     Limitation on Future Senior Subordinated Indebtedness.

      The Company shall not incur any Indebtedness other than the Notes 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.
No Subsidiary Guarantor shall incur any Indebtedness other than the Guarantee of
such Subsidiary Guarantor 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.

Section 4.16.     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 be deemed to have commenced upon mailing of
the notice described in Section 4.16(b) and shall terminate 20 Business Days
after its commencement, unless a longer offering period is then required by law.
Promptly after the termination of the Change of Control Offer (the "Change of
Control Payment Date"), the Company shall purchase and mail or deliver payment
for all Notes tendered in response to the Change of Control Offer. 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 4.16; (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


                                       33

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 depository or Paying Agent, deposit with
such depository 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
depository, the Company or the Paying Agent, as the case may be, shall promptly
mail to the 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. 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 4.16, 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.


                                  ARTICLE FIVE

                              SUCCESSOR CORPORATION

Section 5.01.     When Company May Merge, Etc.

      The Company shall not consolidate with or merge with any Person or convey,
transfer or lease all or substantially all of its property to any Person,
unless:

            (1)   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 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 the Indenture;

            (2)   immediately before and after giving effect to such transaction
      no Default or Event of Default exists;

            (3)   immediately after giving effect to such transaction on a pro
      forma basis, the Consolidated Tangible Net Worth of the Company (or the
      surviving or transferee entity) is equal to or greater than the
      Consolidated Tangible Net Worth of the Company immediately before such
      transaction; and

            (4)   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 test described in
      Section 4.09(a).

      In connection with any consolidation, merger, conveyance, transfer or
lease contemplated by this Section 5.01, the Company shall deliver to the
Trustee prior to the consummation of the proposed transaction an Officers'
Certificate to the foregoing effect and an Opinion of Counsel stating that the
proposed transaction and such supplemental indenture comply with this Indenture.



                                       34

Section 5.02.     Successor Corporation Substituted.

      Upon any consolidation, merger, lease, conveyance or transfer in
accordance with Section 5.01, 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 herein 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.


                                   ARTICLE SIX

                              DEFAULTS AND REMEDIES

Section 6.01.     Events of Default.

      An "Event of Default" occurs upon:

            (1)   default by the Company or any Subsidiary Guarantor in the
      payment of principal of, or premium, if any, on the Notes when due and
      payable at maturity, upon repurchase pursuant to Section 4.11 or 4.16,
      upon acceleration or otherwise (whether or not such payment shall be
      prohibited by the provisions of Articles Ten or Twelve);

            (2)   default by the Company or any Subsidiary Guarantor in the
      payment of any installment of interest on the Notes when due and payable
      and continuance of such default for 30 days (whether or not such payment
      shall be prohibited by the provisions of Articles Ten or Twelve);

            (3)   default by the Company or any Subsidiary Guarantor in the
      deposit of any optional redemption payment, when and as due and payable
      pursuant to Article Three;

            (4)   (i) failure to make any principal payment when due on any
      other Indebtedness of the Company, any Subsidiary Guarantor or any
      Restricted Subsidiary or (ii) any default on any other Indebtedness of the
      Company, any Subsidiary Guarantor or any Restricted Subsidiary if such
      default results in the acceleration of the maturity of any such
      Indebtedness, if the Indebtedness referred to in (i) and (ii) that is in
      default or the maturity of which has been so accelerated has a principal
      amount of $5.0 million or more individually or taken together;

            (5)   default in the performance, or breach, of any other covenant
      or agreement of the Company or any Subsidiary Guarantor in this Indenture,
      the Notes or the Guarantees and failure to remedy such default within a
      period of 60 days after written notice thereof from the Trustee or Holders
      of at least 25% in principal amount of the then outstanding Notes;

            (6)   the entry by a court of one or more judgments or orders
      against the Company, any Subsidiary Guarantor or any Restricted Subsidiary
      in an aggregate amount in excess of $5.0 million (net of applicable
      insurance coverage by a third party insurer which is acknowledged in
      writing by such insurer) that has not been vacated, discharged, satisfied
      or stayed pending appeal within 60 days from the entry thereof,

            (7)   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 Section 11.04) or any Subsidiary Guarantor shall deny or disaffirm
      its obligations with respect thereto;



                                       35

            (8)   the Company, any Subsidiary Guarantor or any Restricted
      Subsidiary pursuant to or within the meaning of any Bankruptcy Law:

                  (A)   commences a voluntary case or proceeding,

                  (B)   consents to the entry of an order for relief against it
            in an involuntary case or proceeding,

                  (C)   consents to the appointment of a Custodian of it or for
            all or substantially all of its property,

                  (D)   makes a general assignment for the benefit of its
            creditors, or

                  (E)   admits in writing that it generally is unable to pay its
            debts as the same become due; or

            (9)   a court of competent jurisdiction enters an order or decree
      under any Bankruptcy Law that:

                  (A)   is for relief (with respect to the petition commencing
            such case) against the Company, any Subsidiary Guarantor or any
            Restricted Subsidiary in an involuntary case or proceeding,

                  (B)   appoints a Custodian of the Company, any Subsidiary
            Guarantor or any Restricted Subsidiary or for all or substantially
            all of its respective property, or

                  (C)   orders the liquidation of the Company, any Subsidiary
            Guarantor or any Restricted Subsidiary,

      and the order or decree remains unstayed and in effect for 60 days.

      The term "Bankruptcy Law" means Title 11, U.S. Code or any similar federal
or state law for the relief of debtors. The term "Custodian" means any receiver,
trustee, assignee, liquidator or similar official under any Bankruptcy Law.

Section 6.02.     Acceleration.

      If an Event of Default (other than an Event of Default specified in
clauses 8 and 9) under Section 6.01 occurs and is continuing, then and in every
such case the Trustee or the Holders of not less than 25% in principal amount of
the outstanding Notes may declare the unpaid principal of, premium, if any, and
accrued and unpaid interest on, all the Notes then outstanding to be due and
payable, by a notice in writing to the Company (and to the Trustee, if given by
Holders) and upon any such declaration such principal, premium, if any, and
accrued and unpaid interest shall become immediately due and payable,
notwithstanding anything contained in this Indenture or the Notes to the
contrary. If an Event of Default specified in clauses 8 or 9 above occurs, all
unpaid principal of, and accrued interest on, the Notes then outstanding will
become due and payable, without any declaration or other act on the part of the
Trustee or any Holder.

      If (i) (A) the Company or any Subsidiary Guarantor has paid or deposited
with such Trustee a sum sufficient to pay (1) all overdue installments of
interest on all the Notes, (2) the principal of, and premium, if any, on any
Notes that have become due otherwise than by such declaration of acceleration
and interest thereon at the rate or rates prescribed therefor in the Notes, (3)
to the extent that payment of such interest is lawful, interest on the defaulted
interest at the rate or rates prescribed therefor in the Notes, and (4) all
money paid or advanced by the Trustee thereunder and the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel; (B) all Events of Default, other than the nonpayment of the
principal of any Notes that have


                                       36

become due solely by such declaration of acceleration, have been cured or waived
as provided in the Indenture; and (C) the rescission would not conflict with any
judgment or decree of a court of competent jurisdiction and (ii) the Holders of
a majority in principal amount of then outstanding Notes give written notice to
the Company, the Subsidiary Guarantors and the Trustee of their desire to
rescind and annul a declaration of acceleration and its consequences, then such
declaration of acceleration shall be deemed rescinded and annulled. No such
rescission will affect any subsequent Event of Default or impair any right
consequent thereon.

Section 6.03.     Other Remedies.

      If an Event of Default occurs and is continuing, the Trustee may pursue,
in its own name and as trustee of an express trust, any available remedy by
proceeding at law or in equity to collect the payment of principal or interest
on the Notes or to enforce the performance of any provision of the Notes or this
Indenture.

      The Trustee may maintain a proceeding even if it does not possess any of
the Notes or does not produce any of them in the proceeding. A delay or omission
by the Trustee or any Holder in exercising any right or remedy accruing upon an
Event of Default shall not impair the right or remedy or constitute a waiver of
or acquiescence in the Event of Default. No remedy is exclusive of any other
remedy. All available remedies are cumulative.

Section 6.04.     Waiver of Past Defaults.

      Subject to Sections 6.07 and 9.02, the Holders of at least a majority in
principal amount of Notes then outstanding by notice to the Trustee may waive an
existing Default or Event of Default and its consequences, except a Default or
Event of Default in payment of principal or interest on the Notes, including any
optional redemption payments or Change of Control or Net Proceeds Offer
payments.

Section 6.05.     Control by Majority.

      The Holders of a majority in principal amount of the Notes then
outstanding will have the right, by an instrument or concurrent instruments in
writing executed and delivered to the Trustee, to direct the time, method and
place of conducting any proceeding for exercising any remedy available to the
Trustee under this Indenture or exercising any trust or power conferred on such
Trustee, provided that (i) such direction is not in conflict with any rule of
law or with this Indenture and (ii) the Trustee may take any other action deemed
proper by such Trustee that is not inconsistent with such direction.

Section 6.06.     Limitation on Remedies.

      No Holder of any of the Notes will have any right to institute any
proceeding, judicial or otherwise, or for the appointment of a receiver or
trustee or pursue any remedy under this Indenture, unless:

            (1)   such Holder has previously given notice to the Trustee of a
      continuing Event of Default,

            (2)   the Holders of not less than 25% in principal amount of the
      outstanding Notes have made written request to such Trustee to pursue such
      remedy, including, if applicable, to institute proceedings in respect of
      such Event of Default in its own name as Trustee under the Indenture,

            (3)   such Holder or Holders have offered to such Trustee reasonable
      indemnity and security satisfactory to the Trustee against the costs,
      expenses and liabilities to be incurred in compliance with such request,

            (4)   such Trustee for 60 days after its receipt of such notice,
      request and offer of indemnity has failed to institute any proceeding, and

            (5)   no direction inconsistent with such written request has been
      given to such Trustee during such 60-day period by the Holders of a
      majority in principal amount of the outstanding Notes.



                                       37

      A Holder may not use this Indenture to prejudice the rights of another
Holder or to obtain a preference or priority over other Holders.

Section 6.07.     Rights of Holders to Receive Payment.

      Notwithstanding any other provision of this Indenture, the Holder of any
Notes will have the right, which is absolute and unconditional, to receive
payment of the principal of and interest on such Notes on the stated maturity
therefor and to institute suit for the enforcement of any such payment, and such
right may not be impaired without the consent of such Holder.

Section 6.08.     Collection Suit by Trustee.

      If an Event of Default in payment of principal, premium, if any, or
interest specified in Section 6.01(l), (2) or (3) occurs and is continuing, the
Trustee may recover judgment in its own name and as trustee of an express trust
against the Company or any Subsidiary Guarantor for the whole amount of
principal, premium, if any, and interest remaining unpaid with respect to the
Notes, and interest on overdue principal and premium, if any, and, to the extent
lawful, interest on overdue interest, and such further amounts as shall be
sufficient to cover the costs and expenses of collection, including the
reasonable compensation and expenses of the Trustee, its agents and counsel.

Section 6.09.     Trustee May File Proofs of Claim.

      (a)   The Trustee may file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the claims of the
Trustee and the Holders allowed in any judicial proceedings relative to the
Company, the Subsidiary Guarantors, their creditors or their property and may
collect and receive any money or other property payable or deliverable on any
such claims and to distribute the same.

      (b)   Nothing herein contained shall be deemed to authorize 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 pursuant to this Article Six, it shall
pay out the money in the following order:

      First:      to the Trustee for amounts due under Section 7.07;

      Second:     to Holders of Senior Indebtedness to the extent required by
                  Article Ten;

      Third:      to Holders for amounts due and unpaid on the Notes for
                  principal and interest, ratably, without preference or
                  priority of any kind, according to the amounts due and payable
                  on the Notes for principal and interest, respectively; and

      Fourth:     to the Company.

      The Trustee may fix a record date and payment date for any payment to
Holders pursuant to this Section 6.10.

Section 6.11.     Undertaking for Costs.

      In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or omitted by
it as Trustee, a court in its discretion may require the filing by any party
litigant in the suit of an undertaking to pay the costs of the suit, and the
court in its discretion may assess reasonable costs,


                                       38

including reasonable attorney's fees and expenses, against any party litigant in
the suit, having due regard to the merits and good faith of the claims or
defenses made by the party litigant. The foregoing shall not apply to a suit by
the Trustee, a suit by a holder pursuant to Section 6.07 hereof, or a suit by
Holders or more than 10% in principal amount of the then outstanding Notes.


                                  ARTICLE SEVEN

                                     TRUSTEE

Section 7.01.     Duties of Trustee.

      (a)   If an Event of Default has occurred and is continuing, the Trustee
shall exercise such rights and powers vested in it by this Indenture and use the
same degree of care and skill in such exercise as a prudent person would
exercise or use under the circumstances in the conduct of such person's own
affairs.

      (b)   Except during the continuance of an Event of Default:

            (1)   The Trustee need perform only those duties that are
      specifically set forth (or incorporated by reference) in this Indenture
      and no implied covenants or obligations shall be read into this Indenture
      against Trustee.

            (2)   In the absence of bad faith on its part, the Trustee may
      conclusively rely, as to the truth of the statements and the correctness
      of the opinions expressed therein, upon certificates or opinions furnished
      to the Trustee and conforming to the requirements of this Indenture.
      However, in the case of any such certificates or opinions which by any
      provision hereof are specifically required to be furnished to the Trustee,
      the Trustee shall examine such certificates and opinions to determine
      whether or not they conform to the requirements of this Indenture (but
      need not confirm or investigate the accuracy of mathematical calculations
      or other facts stated therein).

      (c)   The Trustee may not be relieved from liability for its own negligent
action, its own negligent failure to act, or its own willful misconduct, except
that:

            (1)   This paragraph (c) does not limit the effect of paragraph (b)
      of this Section.

            (2)   The Trustee shall not be liable for any error of judgment made
      in good faith by an officer of the Trustee, unless it is proved that the
      Trustee was negligent in ascertaining the pertinent facts.

            (3)   The Trustee shall not be liable with respect to action it
      takes or omits to take in good faith in accordance with a direction
      received by it pursuant to Section 6.05, and the Trustee shall be entitled
      from time to time to request such a direction.

      (d)   Every provision of this Indenture that in any way relates to the
Trustee is subject to paragraphs (a), (b) and (c) of this Section.

      (e)   The Trustee shall be under no obligation and may refuse to perform
any duty or exercise any right or power unless it receives indemnity
satisfactory to it against any loss, liability or expense.

      (f)   The Trustee shall not be liable for interest on any money received
by it except as the Trustee may agree in writing with the Company. Money held in
trust by the Trustee need not be segregated from other funds except to the
extent required by law.



                                       39

Section 7.02.     Rights of Trustee.

      Subject to Section 7.01:

      (a)   The Trustee may conclusively rely on and shall be protected in
acting or refraining from acting upon any 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 shall not be bound to make any
investigation into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction, consent,
order, bond, debenture or other paper or document.

      (b)   Before the Trustee acts or refrains from acting, it may require an
Officers' Certificate or an Opinion of Counsel. The Trustee shall not be liable
for any action it takes or omits to take in good faith in reliance on such
certificate or opinion.

      (c)   The Trustee may act through agents and shall not be responsible for
the misconduct or negligence of any agent appointed with due care.

      (d)   The Trustee shall not be liable for any action it takes or omits to
take in good faith which it believes to be authorized or within its rights or
powers.

      (e)   The Trustee may consult with counsel of its selection and the advice
of such counsel or any Opinion of Counsel shall 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.

      (f)   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.

      (g)   The Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction of
any of the Holders pursuant to this Indenture, unless such Holders shall have
offered to the Trustee security or indemnity satisfactory to the Trustee against
the costs, expenses and liabilities that might be incurred by it in compliance
with such request or direction;

      (h)   The rights, privileges, protections, immunities and benefits given
to the Trustee, including, without limitation, its right to be indemnified, are
extended to, and shall be enforceable by, the Trustee in each of its capacities
hereunder, and to each agent, custodian and other Person employed to act
hereunder; and

      (i)   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 Subsidiaries
or Affiliates with the same rights it would have if it were not Trustee. Any
Agent may do the same with like rights. However, the Trustee must comply with
Sections 7.10 and 7.11.



                                       40

Section 7.04.     Trustee's Disclaimer.

      The Trustee makes no representation as to the validity or adequacy of this
Indenture or the Notes, it shall not be accountable for the Company's use of the
proceeds from the Notes, and it shall not be responsible for any statement in
the Notes other than its certificate of authentication.

Section 7.05.     Notice of Defaults.

      If a Default occurs and is continuing and if it is actually known to the
Trustee, the Trustee shall mail to each Holder pursuant to Section 13.02 a
notice of the Default within 90 days after the occurrence thereof. Except in the
case of a Default in any payment on any Note, the Trustee may withhold the
notice if and so long as the board of directors, executive committee or a trust
committee of its directors and/or officers in good faith determines that
withholding the notice is in the interests of Holders.

Section 7.06.     Reports by Trustee to Holders.

      Within 60 days after each May 15, beginning with May 15, 2003, the Trustee
shall mail to each Holder a brief report dated as of such May 15 that complies
with TIA Section 313(a), but only if such report is required in any year under
TIA Section 313(a). The Trustee also shall comply with TIA Sections 313(b) and
313(c).

      A copy of each report at the time of its mailing to Holders shall be filed
with the Commission and each stock exchange on which the Notes are listed. The
Company shall promptly notify the Trustee in writing if the Notes become listed
on any national securities exchange or of any delisting thereof.

Section 7.07.     Compensation and Indemnity.

      The Company and the Subsidiary Guarantors jointly and severally agree to
pay the Trustee from time to time such compensation as the Company and the
Trustee shall from time to time agree in writing for its services rendered by it
hereunder (which compensation shall not be limited by any provision of law in
regard to the compensation of a trustee of an express trust). The Company and
the Subsidiary Guarantors jointly and severally agree to reimburse the Trustee
upon request for all reasonable out-of-pocket expenses, disbursements and
advances incurred by it. Such expenses may include the reasonable compensation
and expenses of the Trustee's agents and counsel.

      The Trustee shall not be under any obligation to institute any suit, or
take any remedial action under this Indenture, or to enter any appearance or in
any way defend any suit in which it may be a defendant, or to take any steps in
the execution of the trusts created hereby or thereby or in the enforcement of
any rights and powers under this Indenture, until it shall be indemnified to its
satisfaction against any and all reasonable expenses, disbursements and advances
incurred or made by the Trustee in accordance with any provisions of this
Indenture, including compensation for services, costs, expenses, outlays,
counsel fees and other disbursements, and against all liability not due to its
negligence or willful misconduct. The Company and the Subsidiary Guarantors
jointly and severally agree to indemnify each of the Trustee and any predecessor
trustee and their agents for and to hold them harmless against any and all loss,
liability, damage, claim or expense, including taxes (other than taxes based on
the income of Trustee) incurred by it in connection with the acceptance and
administration of the trust and its duties hereunder as Trustee, Registrar
and/or Paying Agent including the costs and expenses of defending itself against
any claim or liability in connection with the exercise or performance of any of
its powers or duties hereunder. The Trustee shall notify the Company and the
Subsidiary Guarantors of any claim of which a Trust Officer has received written
notice and for which it may seek indemnity; provided, however, unless the
position of the Company is prejudiced by such failure, the failure of the
Trustee to promptly notify the Company shall not limit its right to
indemnification. The Company shall defend each such claim and the Trustee shall
cooperate in the defense. The Trustee may retain separate counsel if the Trustee
shall have been reasonably advised by such counsel that there may be one or more
legal defenses available to it that are different from or additional to those
available to the Company and in the reasonable judgment of such counsel it is
advisable for the Trustee to employ separate counsel, and the Company


                                       41

shall reimburse the Trustee for the reasonable fees and expenses of such
counsel. The Company need not pay for any settlement made without its consent.

      Neither the Company nor the Subsidiary Guarantors shall be obligated to
reimburse any expense or indemnify against any loss or liability determined by a
court of competent jurisdiction to have been caused by the Trustee through the
Trustee's own negligence, willful misconduct or breach of its duties under this
Indenture.

      To secure the payment obligations of the Company and the Subsidiary
Guarantors in this Section, the Trustee shall have a lien prior to that of the
Holders of the Notes on all money or property held or collected by the Trustee
for any amount owing it or any predecessor trustee pursuant to this section,
except that held in trust to pay principal of and interest on particular Notes.

      When the Trustee incurs expenses or renders services after the occurrence
of any Event of Default specified in Section 6.01(8) or (9), the expenses
(including the reasonable charges and expenses of its counsel) and the
compensation for the services are intended to constitute expenses of
administration under any Bankruptcy Law.

      The provisions of this Section shall survive the termination of this
Indenture and resignation or removal of the Trustee.

Section 7.08.     Replacement of Trustee.

      The Trustee may resign by so notifying the Company and the Subsidiary
Guarantors. The Holders of a majority in principal amount of the Notes may
remove the Trustee by so notifying the Trustee, in writing. The Company may
remove the Trustee if:

            (1)   the Trustee fails to comply with Section 7.10;

            (2)   the Trustee is adjudged a bankrupt or an insolvent;

            (3)   a receiver or other public officer takes charge of the Trustee
      or its property; or

            (4)   the Trustee becomes incapable of acting as Trustee hereunder.

      If the Trustee resigns or is removed or if a vacancy exists in the office
of Trustee for any reason, the Company shall promptly appoint a successor
Trustee. Within one year after the successor Trustee takes office, the Holders
of a majority in principal amount of the Notes may appoint a successor Trustee
to replace the successor Trustee appointed by the Company.

      A successor Trustee shall deliver a written acceptance of its appointment
to the retiring Trustee and to the Company and the Subsidiary Guarantors.
Immediately after that, the retiring Trustee shall transfer all property held by
it as Trustee to the successor Trustee, subject to the lien provided for in
Section 7.07, the resignation or removal of the retiring Trustee shall become
effective, and the successor Trustee shall have all the rights, powers and
duties of the Trustee under this Indenture. A successor Trustee shall mail
notice of its succession to each Holder.

      If a successor Trustee does not take office within 30 days after the
retiring Trustee resigns or is removed, the retiring Trustee (at the expense of
the Company), the Company or the Holders of a majority in principal amount of
the Notes may petition any court of competent jurisdiction for the appointment
of a successor Trustee.

      If the Trustee fails to comply with Section 7.10, any Holder may petition
any court of competent jurisdiction for the removal of the Trustee and the
appointment of a successor Trustee. Any successor Trustee shall comply with TIA
Section 310(a)(5).



                                       42

Section 7.09.     Successor Trustee by Merger, Etc.

      If the Trustee consolidates, merges or converts into, or transfers all or
substantially all of its corporate trust assets to, another corporation, the
successor corporation without any further act shall be the successor Trustee;
provided that such corporation or association shall be otherwise eligible and
qualified under this Article.

Section 7.10.     Eligibility; Disqualification.

      This Indenture shall always have a Trustee which satisfies the
requirements of TIA Section 310(a)(1). The Trustee shall always have a combined
capital and surplus of at least $50 million as set forth in its most recent
published annual report of condition. The Trustee shall also comply with TIA
Section 310(b).

Section 7.11.     Preferential Collection of Claims Against Company.

      The Trustee shall comply with TIA Section 311(a), excluding any creditor
relationship listed in TIA Section 311(b). A Trustee who has resigned or been
removed shall be subject to TIA Section 311(a) to the extent indicated therein.


                                  ARTICLE EIGHT

                             DISCHARGE OF INDENTURE

Section 8.01.     Termination of Company's Obligations.

      (a)   This Indenture shall cease to be of further effect (subject to
Section 8.05) when all outstanding Notes theretofore authenticated and issued
hereunder have been delivered (other than any Notes which shall have been
destroyed, lost or stolen and which shall have been replaced or paid as provided
in Section 2.07) to the Trustee for cancellation and the Company or the
Subsidiary Guarantors have paid all sums payable hereunder and under the Notes.

      (b)   In addition to the provisions of Section 8.01(a), at the Company's
option, either (i) the Company and all Subsidiary Guarantors shall be deemed to
have been discharged from their respective obligations with respect to the Notes
and the provisions of this Indenture (subject to Section 8.05) on the 91st day
after the applicable conditions set forth below have been satisfied or (ii) the
Company and all Subsidiary Guarantors shall cease to be under any obligation to
comply with any term, provision or condition set forth in Sections 4.02, 4.03,
4.05 through 4.16 and 5.01 and Articles Ten and Eleven with respect to the Notes
at any time after the applicable conditions set forth below have been satisfied:

            (1)   the Company or any Subsidiary Guarantor shall have deposited
      or caused to be deposited irrevocably with the Trustee as trust funds in
      trust, specifically pledged as security for, and dedicated solely to, the
      benefit of the Holders (i) U.S. Legal Tender or (ii) U.S. Government
      Obligations, which through the payment of interest and principal in
      respect thereof in accordance with their terms will provide (without any
      reinvestment of such interest or principal), not later than one day before
      the due date of any payment, U.S. Legal Tender or (iii) a combination of
      (i) and (ii), in an amount sufficient, in the opinion (with respect to
      (ii) and (iii)) of a nationally recognized firm of independent public
      accountants expressed in a written certification thereof delivered to the
      Trustee at or prior to the time of such deposit, to pay and discharge each
      installment of principal of, premium, if any, and interest on the
      outstanding Notes on the dates such installments are due;

            (2)   the Company shall have delivered to the Trustee an Officers'
      Certificate certifying as to whether the Notes are then listed on a
      national securities exchange;



                                       43

            (3)   if the Notes are then listed on a national securities
      exchange, the Company shall have delivered to the Trustee an Officers'
      Certificate to the effect that the Company's exercise of its option under
      this Section 8.01 would not cause the Notes to be delisted;

            (4)   no Default or Event of Default shall have occurred and be
      continuing on the date of such deposit or shall occur as a result of such
      deposit and such deposit will not result in a breach or violation of, or
      constitute a default under, any other instrument to which the Company or a
      Subsidiary Guarantor is a party or by which any of them is bound, as
      evidenced to the Trustee in an Officers' Certificate delivered to the
      Trustee concurrently with such deposit;

            (5)   the Company shall have delivered to the Trustee an Opinion of
      Counsel to the effect that Holders will not recognize income, gain or loss
      for federal income tax purposes as a result of the Company's exercise of
      its option under this Section 8.01 and will be subject to federal income
      tax on the same amount and in the same manner and at the same time as
      would have been the case if such option had not been exercised, and, in
      the case of the Notes being discharged, accompanied by a ruling to that
      effect received from or published by the Internal Revenue Service (it
      being understood that (A) such Opinion of Counsel shall also state that
      such ruling is consistent with the conclusions reached in such Opinion of
      Counsel and (B) the Trustee shall be under no obligation to investigate
      the basis of correctness of such ruling);

            (6)   the Company shall have delivered to the Trustee an Opinion of
      Counsel to the effect that the Company's exercise of its option under this
      Section 8.01 will not result in any of the Company, the Trustee or the
      trust created by the Company's deposit of funds hereunder becoming or
      being deemed to be an "investment company" under the Investment Company
      Act of 1940, as amended;

            (7)   the Company or any Subsidiary Guarantor shall have paid or
      duly provided for payment of all amounts then due to the Trustee pursuant
      to Section 7.07; and

            (8)   the Company shall have delivered to the Trustee an Officers'
      Certificate and an Opinion of Counsel, each stating that all conditions
      precedent provided for in this Section 8.01 relating to the satisfaction
      and discharge of this Indenture have been complied with.

Section 8.02.     Application of Trust Money.

      The Trustee shall hold in trust money or U.S. Government Obligations
deposited with it pursuant to Section 8.01. It shall apply the deposited money
and the money from U.S. Government Obligations through the Paying Agent and in
accordance with the provisions of the Notes and this Indenture to the payment of
principal of, premium, if any, and interest on the Notes.

Section 8.03.     Repayment to Company.

      The Trustee and the Paying Agent shall promptly pay to the Company upon
written request any money or securities held by them at any time in excess of
amounts then required to pay principal of or interest on the Notes. The Trustee
and the Paying Agent shall pay to the Company upon written request any money
held by them for the payment of principal or interest that remains unclaimed for
two years; provided, however, that the Trustee or such Paying Agent before being
required to make any such repayment, may at the expense of the Company cause to
be published once in a newspaper of general circulation in The City of New York
or mail to each such Holder notice that such money remains unclaimed and that,
after a date specified therein, which shall not be less than 30 days from the
date of such publication or mailing any unclaimed balance of such money then
remaining will be paid to the Company. After repayment to the Company, any
Holder entitled to such money shall thereafter, as an unsecured general
creditor, look (unless an applicable abandoned property law designates another
Person) only to the Company for payment, and all liability of the Trustee or
such Paying Agent with respect to such trust money, and all liability of the
Company as trustee thereof, shall thereupon cease.



                                       44

Section 8.04.     Reinstatement.

      If the Trustee or Paying Agent is unable to apply any money or U.S.
Government Obligations in accordance with Section 8.01 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 and the Subsidiary Guarantors' obligations under this Indenture and
the Notes shall be revived and reinstated as though no deposit had occurred
pursuant to Section 8.01 until such time as the Trustee or Paying Agent is
permitted to apply all such money or U.S. Government Obligations in accordance
with Section 8.01; provided, however, that if the Company or any Subsidiary
Guarantor has made any payment of interest on or principal of any Notes because
of the reinstatement of its obligations, the Company or such Subsidiary
Guarantor shall be subrogated to the rights of the Holders of such Notes to
receive such payment from the money or U.S. Government Obligations held by the
Trustee or Paying Agent.

Section 8.05.     Survival of Certain Obligations.

      Notwithstanding the satisfaction and discharge of this Indenture and of
the Notes referred to in Section 8.01(a) and (b), the respective obligations of
the Company, the Subsidiary Guarantors and the Trustee under Sections 2.02,
2.03, 2.04, 2.05, 2.06, 2.07, 4.01, 4.04, 6.07, 7.07, 7.08, 8.02, 8.03, 8.04,
11.03 and 11.04 and Article Three shall survive until the Notes are no longer
outstanding, and thereafter the obligations of the Company and the Trustee under
Sections 7.07, 8.02 and 8.03 and 8.04 shall survive such satisfaction and
discharge. Nothing contained in this Article Eight shall abrogate any of the
obligations or duties of the Trustee under this Indenture.


                                  ARTICLE NINE

                       AMENDMENTS, SUPPLEMENTS AND WAIVERS

Section 9.01.     Without Consent of Holders.

      The Company, the Subsidiary Guarantors and the Trustee may modify, amend
or supplement this Indenture or the Notes without notice to or consent of any
Holder:

            (1)   to cure any ambiguity, omission, defect or inconsistency;

            (2)   to comply with Sections 5.01 or 11.02;

            (3)   to provide for uncertificated Notes in addition to or in place
      of certificated Notes;

            (4)   to reflect the addition or release of any Subsidiary
      Guarantor, as provided for by this Indenture;

            (5)   to comply with any requirements of the Commission in order to
      effect or maintain the qualification of this Indenture under the TIA; or

            (6)   to make any change that would provide any additional benefit
      or rights to the Holders or that does not adversely affect the rights of
      any Holder.

      Upon the request of the Company and the Subsidiary Guarantors, accompanied
by a Board Resolution of the Company and a resolution of the board of directors,
board of trustees or managing partners of each Subsidiary Guarantor authorizing
the execution of any such supplemental indenture, and upon receipt by the
Trustee of the documents described in Section 9.06, the Trustee may, but shall
not be obligated to, join with the Company and the Subsidiary Guarantors in the
execution of any supplemental indenture authorized or permitted by the terms of
this Indenture and make any further appropriate agreements and stipulations that
may be therein contained. After an


                                       45

amendment or waiver under this Section becomes effective, the Company shall mail
to the Holders of each Note affected thereby a notice briefly describing the
amendment or waiver. Any failure of the Company to mail such notice, or any
defect therein, shall not, however, in any way impair or affect the validity of
any such supplemental indenture.

Section 9.02.     With Consent of Holders.

      Except as provided below in this Section 9.02, the Company, the Subsidiary
Guarantors and the Trustee may amend this Indenture or the Notes with the
written consent (including consents obtained in connection with a tender offer
or exchange offer for Notes or a solicitation of consents in respect of Notes,
provided that in each case such offer or solicitation is made to all Holders of
then outstanding Notes on equal terms) of the Holders of at least a majority in
principal amount of the then outstanding Notes.

      Upon the request of the Company and the Subsidiary Guarantors, accompanied
by a Board Resolution of the Company and a resolution of the board of directors,
board of trustees or managing partners of each Subsidiary Guarantor authorizing
the execution of any such supplemental indenture, and upon the filing with the
Trustee of evidence of the consent of the Holders as aforesaid, and upon receipt
by the Trustee of the Opinion of Counsel documents described in Section 9.06,
the Trustee may, but shall not be obligated to, join with the Company and the
Subsidiary Guarantors in the execution of such supplemental indenture.

      It shall not be necessary for the consent of the Holders under this
Section to approve the particular form of any proposed amendment or waiver, but
it shall be sufficient if such consent approves the substance thereof.

      The Holders of a majority in principal amount of the then outstanding
Notes may waive compliance in a particular instance by the Company or the
Subsidiary Guarantors with any provision of this Indenture or the Notes
(including waivers obtained in connection with a tender offer or exchange offer
for Notes or a solicitation of consents in respect of Notes, provided that in
each case such offer or solicitation is made to all Holders of the then
outstanding Notes on equal terms). However, without the consent of each Holder
affected, an amendment or waiver under this Section may not:

            (1)   reduce the percentage of principal amount of Notes whose
      Holders must consent to an amendment, supplement or waiver of any
      provision of this Indenture or the Notes;

            (2)   reduce the rate or change the time for payment of interest,
      including defaulted interest, on the Notes;

            (3)   reduce the principal amount of any Note or change the Maturity
      Date of the Notes;

            (4)   reduce the redemption price, including premium, if any,
      payable upon the redemption of any Note or change the time at which any
      Note may be redeemed;

            (5)   reduce the repurchase price, including premium, if any,
      payable upon the repurchase of any Note pursuant to Section 4.11 or 4.16,
      or change the time at which any Note may or shall be repurchased
      thereunder;

            (6)   except as otherwise provided in this Indenture, waive a
      continuing Default or Event of Default in the payment of the principal of,
      premium, if any, or interest on the Notes;

            (7)   make any Note payable in money other than that stated in the
      Note;

            (8)   impair the right to institute suit for the enforcement of
      principal of, premium, if any, or interest on any Note pursuant to Section
      6.07 or 6.08, except as limited by Section 6.06; or

            (9)   make any change in Section 6.04 or Section 6.07 or in this
      sentence of this Section 9.02.



                                       46

In addition, any amendment to, or waiver of, the provisions of this Indenture
relating to subordination that adversely affects the rights 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. In determining whether any such
amendment adversely affects the rights of the holders of the Notes, the Trustee
shall be provided with and may rely upon an Opinion of Counsel to such effect.

      The right of any Holder to participate in any consent required or sought
pursuant to any provision of this Indenture (and the obligation of the Company
to obtain any such consent otherwise required from such Holder) may be subject
to the requirement that such Holder shall have been the Holder of record of any
Notes with respect to which such consent is required or sought as of a date
identified by the Trustee in a notice furnished to Holders in accordance with
the terms of this Indenture.

Section 9.03.     Compliance with Trust Indenture Act.

      Every amendment to or supplement of this Indenture or the Notes shall
comply with the TIA as then in effect.

Section 9.04.     Revocation and Effect of Consents.

      A consent to an amendment, supplement or waiver by a Holder of a Note
shall bind the Holder and every subsequent Holder of a Note or portion of a Note
that evidences the same debt as the consenting Holder's Note, even if notation
of the consent is not made on any Note. However, until an amendment, supplement
or waiver becomes effective, any such Holder or subsequent Holder may revoke the
consent as to his Note or portion of a Note. For such revocation to be
effective, the Trustee must receive the notice of revocation before the date the
amendment, supplement or waiver becomes effective.

      The Company may, but shall not be obligated to, fix a record date for the
purpose of determining the Holders entitled to consent to any amendment or
waiver. If the Company elects to fix a record date for such purpose, the record
date shall be fixed at (i) the later of 30 days prior to the first solicitation
of such consent or the date of the most recent list of Holders furnished to the
Trustee prior to such solicitation pursuant to Section 2.05, or (ii) such other
date as the Company shall designate. If a record date is fixed, then
notwithstanding the provisions of the immediately preceding paragraph, those
Persons who were Holders at such record date (or their duly designated proxies),
and only those Persons, shall be entitled to consent to such amendment or waiver
or to revoke any consent previously given, whether or not such Persons continue
to be Holders after such record date. No consent shall be valid or effective for
more than 90 days after such record date unless consent from the Holders of the
principal amount of Notes required hereunder for such amendment or waiver to be
effective also shall have been given and not revoked within such 90-day period.

      After an amendment, supplement or waiver becomes effective, it shall bind
every Holder unless it makes a change described in any of clauses (1) through
(9) of Section 9.02. In that case the amendment, supplement or waiver shall bind
each Holder of a Note who has consented to it and every subsequent Holder of a
Note or portion of a Note that evidences the same debt as the consenting
Holder's Note.

Section 9.05.     Notation on or Exchange of Notes.

      If an amendment, supplement or waiver changes the terms of a Note, the
Trustee may require the Holder of the Note to deliver it to the Trustee. The
Trustee may place an appropriate notation on the Note about the changed terms
and return it to the Holder. Alternatively, if the Company or the Trustee so
determines, the Company in exchange for the Note shall issue and the Trustee
shall authenticate a new Note that reflects the changed terms.

Section 9.06.     Trustee Protected.

      The Trustee shall sign any amendment or supplement or waiver authorized
pursuant to this Article. In signing such amendment or supplement or waiver the
Trustee shall be provided with, and (subject to Article Seven)


                                       47

shall be fully protected in relying upon, an Opinion of Counsel stating that
such amendment or supplement or waiver is authorized or permitted by and
complies with this Indenture. The Trustee may, but shall not be obligated to,
enter into any such supplemental indenture which affects the Trustee's own
rights, duties or immunities under this Indenture or otherwise.


                                   ARTICLE TEN

                             SUBORDINATION OF NOTES

Section 10.01.    Notes Subordinated to Senior Indebtedness.

      The Company, for itself and it successors, and each Holder, by his
acceptance of Notes, agrees that the payment of the principal of, premium, if
any, and interest on the Notes is subordinated, to the extent and in the manner
provided in this Article Ten, to the prior payment in full of all Senior
Indebtedness of the Company (hereinafter in this Article Ten referred to as
"Senior Indebtedness"). The Notes shall rank pari passu in right of payment with
all Pari Passu Indebtedness of the Company.

      This Article Ten 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 10.02.    No Payment on Notes 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 the Company 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 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 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
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 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


                                       48

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 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 Ten otherwise does not prohibit
such payment.

      In furtherance of the provisions of Section 10.01, in the event that,
notwithstanding the foregoing provisions of this Section 10.02, 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 10.02, then, unless and
until such payment is no longer prohibited by this Section 10.02, such payment
(subject to the provisions of Sections 10.06 and 10.07) 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 10.02 shall not modify or limit in any way
the application of Section 10.03.

      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 Notes to the Senior Indebtedness or the application of the other
provisions provided in this Article Ten.

Section 10.03.    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 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 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 Notes
which may be payable or deliverable in respect of the Notes in any such
Insolvency or Liquidation Proceeding.

      In the event that, notwithstanding the foregoing provisions of this
Section 10.03, the Trustee or any Paying Agent or the Holder of any 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 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 Notes, before all Senior Indebtedness


                                       49

(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 10.04.    Holders 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 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 Ten (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 Notes are so subordinate 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
Article Ten, which otherwise would have been made to the Holders shall, as
between the Company and the Holders, 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 Ten 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.

Section 10.05.    Obligations of the Company Unconditional.

      Nothing contained in this Article Ten or elsewhere in this Indenture or in
any Note is intended to or shall impair, as between the Company and the Holders,
the obligations of the Company, which are absolute and unconditional, to pay to
the Holders the principal of and interest on the 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 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 from exercising all remedies otherwise
permitted by applicable law upon default under this Indenture, subject to the
rights, if any, under this Article Ten, 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 Ten, 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 Ten.

Section 10.06.    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 13.02 thereof 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


                                       50

that no such fact exists. Nothing in this Section 10.06 is intended to or shall
relieve any Holder from the obligations imposed under Sections 10.02 and 10.03
with respect to money or other distributions received in violation of the
provisions thereof.

Section 10.07.    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 Ten. 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 Notes shall be subject to the provisions of this Article Ten;
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 10.06,
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 benefit of the Trustee and each Paying Agent and shall not
otherwise affect the rights of holders of Senior Indebtedness.

Section 10.08.    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 Ten 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.

Section 10.09.    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
Article Ten 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 the
Company, the timely filing of a claim for the unpaid balance of his Notes in the
form required in said 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. 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 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.

Section 10.10.    Right of Trustee to Hold Senior Indebtedness.

      The Trustee shall be entitled to all of the rights set forth in this
Article Ten 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.



                                       51

Section 10.11.    Article Ten Not to Prevent Events of Default.

      The failure to make a payment of principal of or interest on the Notes by
reason of any provision of this Article Ten shall not be construed as preventing
the occurrence of a Default or an Event of Default.

Section 10.12.    Payment.

      A payment with respect to a Note or with respect to principal of or
interest on a Note shall include, without limitation, payment of principal of
(and premium, if any) and interest on any Note, any depositing of funds under
Article Eight, any payment on account of any mandatory or optional repurchase or
redemption of any Note (including payments pursuant to Article Three or Section
4.10 or Section 4.16) and any payment or recovery on any claim (whether Section
4.10 or Section 4.16) and any payment or recovery on any claim (whether for
rescission 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 Article Ten 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 Ten at any
time thereafter and (ii) 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 Ten 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 10.13.    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. 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 ELEVEN

                                   GUARANTEES

Section 11.01.    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 Eleven and
Article Twelve.

      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


                                       52

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 Six 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 Six, such obligations (whether or not due and
payable) shall forthwith become due and payable by each Subsidiary Guarantor for
the purpose of this Guarantee.

      The guarantee of each Subsidiary Guarantor herein shall be, in the manner
and to the extent set forth in Article Twelve, 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 11.02.    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 Subsidiary of
the Company or, as a result of the transaction, becomes a 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 Consolidated Tangible Net Worth of
the surviving entity is equal to or greater than the Consolidated Tangible Net
Worth of such Subsidiary Guarantor immediately before such transaction, (4)
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 4.09(a), (5) 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 11.03, and (6) 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 the covenant in Section 4.11 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 the
covenant in Section 4.11 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 11.03. 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.



                                       53

Section 11.03.    Addition of Subsidiary Guarantors.

      (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 11.04.    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 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 11.02(b)(i)(B) or Section 11.02(b)(ii) 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 Eleven.

Section 11.05.    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
11.06, 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.

Section 11.06.    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.



                                       54

Section 11.07.    Execution and Delivery of Guarantee.

      To further evidence the Guarantees set forth in Section 11.01, each
Subsidiary Guarantor hereby agrees that a notation relating to such Guarantee,
in substantially the form of Exhibit A-1, 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 11.01 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 11.08.    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 11.09.    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, 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 11.10.    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


                                       55

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 11.11.    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.


                                 ARTICLE TWELVE

                           SUBORDINATION OF GUARANTEES

Section 12.01.    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
Article Twelve, to the prior payment in full of all Senior Indebtedness of such
Subsidiary Guarantor (hereinafter in this Article Twelve 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 Article Twelve 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 12.02.    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


                                       56

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 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 Article Twelve
otherwise does not prohibit such payment.

      In furtherance of the provisions of Section 12.01, in the event that,
notwithstanding the foregoing provisions of this Section 12.02, 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 12.02, such payment (subject to the provisions of Sections 12.06
and 12.07) 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 12.02 shall not modify or limit in any way
the application of Section 12.03.

      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 Article Twelve.

Section 12.03.    Guarantees Subordinated to Prior Payment of All Senior
Indebtedness on Dissolution, Liquidation or Reorganization of a Subsidiary
Guarantor.

      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


                                       57

(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 12.03, 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.

Section 12.04.    Holders 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 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 Twelve (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 Article Twelve, 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
Article Twelve 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.

Section 12.05.    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


                                       58

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 Article Twelve, 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 Article Twelve, 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 Article Twelve.

Section 12.06.    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 13.02 thereof from the
Company or a Subsidiary Guarantor 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 fact
exits. Nothing in this Section 12.06 is intended to or shall relieve any Holder
from the obligations imposed under Sections 12.02 and 12.03 with respect to
money or other distributions received in violation of the provisions thereof.

Section 12.07.    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 Holder and shall not be subject to this Article Twelve.
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 Article Twelve; 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 12.06, 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 benefit of the Trustee and
each Paying Agent and shall not otherwise affect the rights of holders of Senior
Indebtedness,

Section 12.08.    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 Article Twelve 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.



                                       59

Section 12.09.    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
Article Twelve 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 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.

Section 12.10.    Right of Trustee to Hold Senior Indebtedness.

      The Trustee shall be entitled to all of the rights set forth in this
Article Twelve 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 12.11.    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 Four, any payment on account of
any mandatory or optional repurchase or redemption of any Note (including
payments pursuant to Article Three or Section 4.10 or Section 4.16) 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 Article Twelve 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 Twelve 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 Article Twelve 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.

Section 12.12.    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.



                                       60

                                ARTICLE THIRTEEN

                                  MISCELLANEOUS

Section 13.01.    Trust Indenture Act Controls.

      If any provision of this Indenture limits, qualifies, or conflicts with
the duties imposed by operation of TIA Section 318(c), the imposed duties shall
control.

Section 13.02.    Notices.

      Any notice or communication shall be sufficiently given if in writing and
delivered in person or mailed by certified or registered mail (return receipt
requested), telecopier or overnight air courier guaranteeing next day delivery,
addressed as follows:

      If to the Company or any Subsidiary Guarantor:

            Giant Industries, Inc.
            23733 North Scottsdale Road
            Scottsdale, Arizona 85255
            Attention:  Treasurer

      If to the Trustee:

            The Bank of New York
            101 Barclay Street, 21 West
            New York, NY 10286
            Attention:  Corporate Trust Administration

      The Company or any Subsidiary Guarantor or the Trustee by notice to the
other may designate additional or different addresses for subsequent notices or
communications.

      All notices and communications shall be deemed to have been duly given: at
the time delivered by hand, if personally delivered; five Business Days after
being deposited in the mail, postage prepaid, if mailed; when receipt
acknowledged, if telecopied; and the next Business Day after timely delivery to
the courier, if sent by overnight air courier guaranteeing next day delivery.

      Any notice or communication mailed to a Holder shall be mailed to him by
first-class mail at this address as it appears on the registration books of the
Registrar and shall be sufficiently given to him if so mailed within the time
prescribed. Failure to mail a notice or communication to a Holder or any defect
in it shall not affect its sufficiency with respect to other Holders.

      If a notice or communication is mailed in the manner provided above, it is
duly given, whether or not the addressee receives it. If the Company or any
Subsidiary Guarantor mails notice or communications to Holders it shall mail a
copy to the Trustee and each Agent at the same time.

Section 13.03.    Communication by Holders with Other Holders.

      Holders may communicate pursuant to TIA Section 312(b) with other Holders
with respect to their rights under this Indenture or the Notes. The Company, the
Subsidiary Guarantors, the Trustee, the Registrar and anyone else shall have the
protection of TIA Section 312(c).



                                       61

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 this Indenture (except with respect to
the initial issuance of the Notes), the Company or such Subsidiary Guarantor, as
the case may be, shall furnish to the Trustee:

            (1)   an Officers' Certificate (which shall include the statements
      set forth in Section 13.05) stating that, in the opinion of the signers,
      the conditions precedent, if any, provided for in this Indenture relating
      to the proposed action have been complied with; and

            (2)   an Opinion of Counsel stating that, in the opinion of such
      counsel, such conditions precedent have been complied with.

Section 13.05.    Statements Required in Certificate or Opinion.

      Each certificate or opinion with respect to compliance with a condition or
covenant provided for in this Indenture shall include:

            (1)   a statement that each person making such certificate or
      opinion has read such covenant or condition;

            (2)   a brief statement as to the nature and scope of the
      examination or investigation upon which the statements or opinions
      contained in such certificate or opinion are based;

            (3)   a statement that, in the opinion of each such person, he has
      made such examination or investigation as is necessary to enable him to
      express an informed opinion as to whether or not such covenant or
      condition has been complied with; and

            (4)   a statement as to whether or not, in the opinion of each such
      person, such covenant or condition has been complied with.

Section 13.06.    Rules by Trustee and Agents.

      The Trustee may make reasonable rules for action by or for a meeting of
Holders. The Registrar or Paying Agent may make reasonable rules for its
functions.

Section 13.07.    Legal Holidays.

      A "Legal Holiday" is a Saturday, a Sunday, or a day on which banks and
trust companies in The City of New York are not required by law or executive
order to be open. If a payment date is a Legal Holiday at a place of payment,
payment may be made at the place on the next succeeding day that is not a Legal
Holiday, without additional interest.

Section 13.08.    Governing Law.

      THIS INDENTURE AND THE NOTES AND THE GUARANTEES SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

Section 13.09.    No Adverse Interpretation of Other Agreements.

      This Indenture may not be used to interpret another indenture, loan or
debt agreement of the Company, any Subsidiary Guarantor or any other Subsidiary.
Any such indenture, loan or debt agreement may not be used to interpret this
Indenture.



                                       62

Section 13.10.    No Recourse Against Others.

      All liability described in paragraph 18 of the Notes of any director,
officer, employee or stockholder, as such, of the Company, the Subsidiary
Guarantors or the Trustee is waived and released.

Section 13.11.    Successors.

      All agreements of the Company and the Subsidiary Guarantors in this
Indenture and the Notes shall bind its successor. All agreements of the Trustee
in this Indenture shall bind its successor.

Section 13.12.    Duplicate Originals.

      The parties may sign any number of copies of this Indenture. Each signed
copy shall be an original, but all of them together represent the same
instrument.

Section 13.13.    Severability.

      In case any provision in this Indenture or in the Notes 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, and a
Holder shall have no claim therefor against any party hereto.



                                       63


                                   SIGNATURES

         IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed as of the date first written above.

                                  GIANT INDUSTRIES, INC.

                                  By:   /s/ Mark B. Cox
                                        ---------------------------------
                                       Name:  Mark B. Cox
                                       Title:  Chief Financial Officer

                                  THE BANK OF NEW YORK, as Trustee



                                  By:   /s/ Remo J. Reale
                                        ---------------------------------
                                       Name:  Remo J. Reale
                                       Title:  Vice President


                                       64

                        SUBSIDIARY GUARANTORS

                        Giant Industries Arizona, Inc.,
                            an Arizona corporation

                        By:   /s/ Mark B. Cox
                              -----------------------------------------------
                               Name:  Mark B. Cox
                               Title: Chief Financial Officer and Director

                        Ciniza Production Company,
                           a New Mexico corporation

                        By:   /s/ Mark B. Cox
                             ------------------------------------------------
                              Name:  Mark B. Cox
                              Title: Chief Financial Officer and Director

                        Giant Stop-N-Go of New Mexico, Inc.,
                           a New Mexico corporation


                        By:   /s/ Mark B. Cox
                              -----------------------------------------------
                               Name: Mark B. Cox
                               Title: Chief Financial Officer and Director

                        Giant Four Corners, Inc.,
                           an Arizona corporation

                       By:   /s/ Mark B. Cox
                             ------------------------------------------------
                             Name:  Mark B. Cox
                             Title: Chief Financial Officer and Director

                        Phoenix Fuel Co., Inc.
                           an Arizona corporation

                       By:  /s/ Mark B. Cox
                            -------------------------------------------------
                             Name:  Mark B. Cox
                             Title: Chief Financial Officer and Director

                        San Juan Refining Company,
                           a New Mexico corporation

                       By:  /s/ Mark B. Cox
                            -------------------------------------------------
                             Name:  Mark B. Cox
                             Title: Chief Financial Officer and Director


                                       65

                        Giant Mid-Continent, Inc.,
                            an Arizona corporation

                         By:  /s/ Mark B. Cox
                              -----------------------------------------------
                               Name:  Mark B. Cox
                               Title: Chief Financial Officer and Director

                        Giant Pipeline Company,
                            a New Mexico corporation

                         By:  /s/ Mark B. Cox
                              -----------------------------------------------
                               Name:  Mark B. Cox
                               Title: Chief Financial Officer and Director

                        DeGuelle Oil Company,
                            a Colorado corporation

                         By:  /s/ Mark B. Cox
                              -----------------------------------------------
                               Name:  Mark B. Cox
                               Title: Chief Financial Officer and Director

                        Giant Yorktown, Inc.,
                            a Delaware corporation

                         By:  /s/ Mark B. Cox
                              -----------------------------------------------
                               Name:  Mark B. Cox
                               Title: Chief Financial Officer and Director

                        Giant Yorktown Holding Company,
                           a Delaware corporation

                         By:  /s/ Mark B. Cox
                              ------------------------------------------------
                               Name:  Mark B. Cox
                               Title:  Chief Financial Officer and Director


                                       66

                                                                       EXHIBIT A

                         [FORM OF FACE OF INITIAL NOTE]

                             GIANT INDUSTRIES, INC.

                              [Global Notes Legend]


         UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), NEW YORK, NEW
YORK, 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
SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY
PAYMENT IS MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC), 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.

         TRANSFERS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS IN WHOLE,
BUT NOT IN PART, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH
SUCCESSOR"S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL NOTE SHALL BE
LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE
INDENTURE REFERRED TO ON THE REVERSE HEREOF.

                            [Restricted Notes Legend]

                  "THIS NOTE (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A
         TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE UNITED
         STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND
         THIS NOTE MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE
         ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH
         PURCHASER OF THIS NOTE IS HEREBY NOTIFIED THAT THE SELLER MAY BE
         RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE
         SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER. THE HOLDER OF THIS
         NOTE AGREES FOR THE BENEFIT OF THE ISSUER THAT:

                           (A) SUCH NOTE MAY BE OFFERED, RESOLD, PLEDGED OR
                  OTHERWISE TRANSFERRED, ONLY

                           (i) (a) TO A PERSON WHOM THE SELLER REASONABLY
                  BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN
                  RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING
                  THE REQUIREMENTS OF RULE 144A, (b) IN A TRANSACTION MEETING
                  THE REQUIREMENTS OF RULE 144 UNDER THE SECURITIES ACT, (c)
                  OUTSIDE THE UNITED STATES TO A FOREIGN PERSON IN A TRANSACTION
                  MEETING THE REQUIREMENTS OF RULE 904 UNDER THE SECURITIES ACT,
                  (d) TO AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN
                  RULE 501(a)(1), (2), (3) OR (7) OF THE SECURITIES ACT (AN
                  "INSTITUTIONAL ACCREDITED INVESTOR")) THAT, PRIOR TO SUCH
                  TRANSFER, FURNISHES THE TRUSTEE A SIGNED LETTER CONTAINING
                  CERTAIN REPRESENTATIONS AND AGREEMENTS (THE FORM OF WHICH CAN
                  BE OBTAINED FROM THE TRUSTEE) AND, IF SUCH TRANSFER IS IN
                  RESPECT OF AN AGGREGATE

                  PRINCIPAL AMOUNT OF NOTES LESS THAN $100,000, AN OPINION OF
                  COUNSEL ACCEPTABLE TO THE ISSUER THAT SUCH TRANSFER IS IN
                  COMPLIANCE WITH THE SECURITIES ACT, OR (e) IN ACCORDANCE WITH
                  ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
                  SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL IF THE
                  ISSUER SO REQUESTS),

                           (ii) TO THE ISSUER, OR

                           (iii) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
                  AND, IN EACH CASE, IN ACCORDANCE WITH ANY APPLICABLE
                  SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER
                  APPLICABLE JURISDICTION AND

                           (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS
                  REQUIRED TO, NOTIFY ANY PURCHASER FROM IT OF THIS NOTE OF THE
                  RESALE RESTRICTIONS SET FORTH IN (A) ABOVE."


                                      A-2

                     11% SENIOR SUBORDINATED NOTES DUE 2012

No. _______________                                      $_____________________

                                                          CUSIP No. ___________


         Giant Industries, Inc., a Delaware corporation, promises to pay to
______ or registered assigns the principal sum of______ Dollars on May 15, 2012.

         Interest Payment Dates: May 15 and November 15, commencing November 15,
2002

         Record Dates: May 1 and November 1.

         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.


                                      A-3

         In Witness Whereof, the Company 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


                                      A-4

                                [REVERSE OF NOTE]

                             GIANT INDUSTRIES, INC.

                     11% SENIOR SUBORDINATED NOTES DUE 2012

         1. Interest. Giant Industries, Inc., a Delaware corporation (the
"Company"), promises to pay interest on the principal amount of this Note at 11%
per annum from May 14, 2002 until maturity; provided, however, that if a
Registration Default (as defined in the Registration Rights Agreement) occurs,
additional interest will accrue on this Note from and including the date on
which any such Registration Default shall occur to but excluding the date on
which all Registration Defaults have been cured at a rate of 0.5% per annum with
respect to the first 90-day period following such Registration Default,
increasing by an additional 0.5% per annum with respect to each subsequent
90-day period until all Registration Defaults have been cured, up to a maximum
amount of additional interest of 1.5% per annum. The Company will pay interest
semiannually on May 15 and November 15 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 May 14, 2002; 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 November 15, 2002. 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 May 14, 2002 (the "Indenture"), 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. 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 Eleven 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 May 15, 2007, 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


                                      A-5

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 May
15 of the years indicated below:



             Year                         Percentage
             ----                         ----------
                                       
             2007                          105.500%
             2008                          103.667%
             2009                          101.833%
             2010 and thereafter           100.000%


         In addition, at any time prior to May 15, 2007, 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 May 15, 2005, the
Company may redeem in the aggregate up to 35% of the aggregate principal amount
of the Notes originally issued with the proceeds of one or more Public Equity
Offerings, at a redemption price (expressed as a percentage of principal amount)
of 111%, 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 Public 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 the Notes to be redeemed in
multiples of $1,000 pro rata, by lot or by any other method that the Trustee
considers fair and appropriate; provided that if the Notes are listed on any
securities exchange, that such method complies with the requirements of such
exchange. 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. Net Proceeds Offer. In the event of certain Asset Sales, the Company
may be required to make a Net Proceeds 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 Net Proceeds Payment Date.

         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.


                                      A-6

         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.

         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 this Indenture relating to
subordination that adversely affects the rights 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.


                                      A-7

         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.

         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.

                                      A-8

                                 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:____________________________________________________________

                                      A-9

            CERTIFICATE OF TRANSFER (TO BE DELIVERED UPON EXCHANGE OR
                   REGISTRATION OF TRANSFER RESTRICTED NOTES)


This certificate relates to $_______________principal amount of Notes held in
(check applicable space)________ book-entry or ______definitive form by the
undersigned.

The undersigned (check one box below):

[ ]      has requested the Trustee by written order to deliver in exchange for
         its beneficial interest in the Global Note held by the Depository a
         Note or Notes in definitive, registered form of authorized
         denominations and an aggregate principal amount equal to its beneficial
         interest in such Global Note (or the portion thereof indicated above);
         or

[ ]      has requested the Trustee by written order to exchange or register the
         transfer of a Note or Notes.

The undersigned confirms that such Notes are being:

CHECK ONE BOX BELOW:

         (1)      [ ] acquired for the undersigned's own account, without
                  Transfer (in satisfaction of Section 2.06(a)(ii)(A) of the
                  Indenture); or

         (2)      [ ] transferred pursuant to and in compliance with Rule 144A
                  under the Securities Act of 1933, as amended; or

         (3)      [ ] transferred pursuant to and in compliance with Rule 904
                  under the Securities Act of 1933, as amended; or

         (4)      [ ] transferred pursuant to and in compliance with Rule 144
                  under the Securities Act of 1933, as amended; or

         (5)      [ ] transferred to an institutional "accredited investor" (as
                  defined in Rule 501(a)(1), (2), (3) or (7) of Regulation D
                  under the Securities Act); or

         (6)      [ ] transferred pursuant to an effective registration
                  statement under the Securities Act of 1933, as amended.

Unless one of the boxes is checked, the Trustee will refuse to register any of
the Notes evidenced by this certificate in the name of any person other than the
registered holder thereof, provided, however, that (i) if box (3) is checked,
the Company and the Trustee will require the delivery of the certification set
forth as Annex A to this Note and such other evidence (which may include an
opinion of counsel) reasonably satisfactory to them as to the compliance with
Rule 904 under the Securities Act; (ii) if box (2) or (4) is checked, the
Company or the Trustee may require evidence reasonably satisfactory to them as
to the compliance with the restrictions set forth in the legend on the face of
this Note; and (iii) if box (5) is checked, the Company and the Trustee will
require the delivery of the certification set forth as Annex B to this Note and
such other evidence (which may include an opinion of counsel) reasonably
satisfactory to them that such transfer is in compliance with the Securities
Act.

                                       _________________________________________
                                       Signature

Signature Guarantee:                   _________________________________________



                                      A-10

                                                                         ANNEX A

                FORM OF CERTIFICATE TO BE DELIVERED IN CONNECTION
                     WITH TRANSFERS PURSUANT TO REGULATION S

                                                                 ______________,


The Bank of New York
Attention:  Corporate Trust Administration

Ladies and Gentlemen:

         In connection with our proposed sale of certain 11% Senior Subordinated
Notes due 2012 (the "Notes") of Giant Industries, Inc., a Delaware corporation
(the "Company"), we represent that:

                  (i) the offer of the Notes was not made to a person in the
         United States;

                  (ii) at the time the buy order was originated, the transferee
         was outside the United States or we and any person acting on our behalf
         reasonably believed that the transferee was outside the United States;

                  (iii) no directed selling efforts have been made by us in the
         United States in contravention of the requirements of Rule 903(b) or
         Rule 904(b) of Regulation S under the U.S. Securities Act of 1933, as
         applicable; and

                  (iv) the transaction is not part of a plan or scheme to evade
         the registration requirements of the U.S. Securities Act of 1933.

         You and the Company are entitled to rely upon this letter and you are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceedings or official inquiry with
respect to the matters covered hereby. Terms used in this certificate have the
meanings set forth in Regulation S under the U.S. Securities Act of 1933.

                                       Very truly yours,



                                       ______________________________________
                                       [Name]

                                       By:___________________________________
                                                Name:
                                                Title:
                                                Address:


                                      A-11

                                                                         ANNEX B

                            FORM OF CERTIFICATE TO BE
                          DELIVERED IN CONNECTION WITH
                                TRANSFERS TO IAIS

                                                                         ______,

The Bank of New York
Attention: Corporate Trust Trustee Administration

Ladies and Gentlemen:

         In connection with our proposed purchase of $_________ aggregate
principal amount of the Notes, we represent that:

         (i) We understand that any subsequent transfer of the Notes is subject
to certain restrictions and conditions set forth in the Indenture dated as of
May 14, 2002 (the "Indenture") relating to the Notes and the undersigned agrees
to be bound by, and not to resell, pledge or otherwise transfer the Notes except
in compliance with such restrictions and conditions and the Securities Act of
1933, as amended (the "Securities Act").

         (ii) We understand that the offer and sale of the Notes have not been
registered under the Securities Act, and that the Notes may not be offered or
sold except as permitted in the following sentence. We agree, on our own behalf
and on behalf of any accounts for which we are acting as hereinafter stated,
that if we should sell any Notes within the time period referred to in Rule
144(k) of the Securities Act, we will do so only (A) to the Company or any
subsidiary thereof, (B) in accordance with Rule 144A under the Securities Act to
a "qualified institutional buyer" (as defined therein), (C) to an institutional
"accredited investor" (as defined below) that, prior to such transfer, furnishes
(or has furnished on its behalf by a U.S. broker-dealer) to you and to the
Company a signed letter substantially in the form of this letter and, if such
transfer is in respect of an aggregate principal amount of less than $100,000,
an opinion of counsel acceptable to the Company that such transfer is in
compliance with the Securities Act, (D) outside the United States in accordance
with Rule 904 of Regulation S under the Securities Act, (E) pursuant to the
exemption from registration provided by Rule 144 under the Securities Act (if
available) or (F) pursuant to an effective registration statement under the
Securities Act, and we further agree to provide to any person purchasing any of
the Notes from us a notice advising such purchaser that resales of the Notes are
restricted as stated herein.

         (iii) We understand that, on any proposed resale of any Notes, we will
be required to furnish to you and the Company such certifications, legal
opinions and other information as you and the Company may reasonably require to
confirm that the proposed sale complies with the foregoing restrictions. We
further understand that the Notes purchased by us will bear a legend to the
foregoing effect.

         (iv) We are an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) and have
such knowledge and experience in financial and business matters as to be capable
of evaluating the merits and risks of our investment in the Notes, and we and
any accounts for which we are acting are each able to bear the economic risk of
our or its investment.

         (v) We are acquiring the Notes purchased by us for our own account or
for one or more accounts (each of which is an institutional "accredited
investor") as to each of which we exercise sole investment discretion.

         You and the Company are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceedings or official inquiry with
respect to the matters covered hereby.


                                      A-12

                                          Very truly yours,

                                          ________________________________
                                          [Name]

                                          By: ______________________________
                                              Name:
                                              Title
                                              Address:

                   FORM OF OPTION OF HOLDER TO ELECT PURCHASE

         If you want to elect to have this Note purchased by the Company
pursuant to Section 4.11 or Section 4.16 of the Indenture, check the box: [ ]

         If you want to have only part of this Note purchased by the Company
pursuant to Section 4.11 or Section 4.16 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:____________________________________________________________


                                      A-13

                            FORM OF NOTATION ON NOTE
                              RELATING TO 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 Articles Eleven and Twelve
of the Indenture, and reference is made thereto for the precise terms of the
Guarantee.

                                       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:


                                      A-14

                                       Giant Four Corners, Inc.,
                                          an Arizona corporation

Attest:                                By:
       ------------------------           ----------------------------------
                                           Name:
                                           Title:


                                       Phoenix Fuel Co., Inc.,
                                          an Arizona corporation

Attest:                                    By:
       ------------------------               ------------------------------
                                              Name:
                                              Title:


                                       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:


                                      A-15

                                       DeGuelle Oil Company,
                                          a Colorado 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:


                                      A-16

                        [TO BE ATTACHED TO GLOBAL NOTES]

                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 DECREASE IN      AMOUNT OF INCREASE IN      PRINCIPAL AMOUNT OF THIS     SIGNATURE OF AUTHORIZED
                   PRINCIPAL AMOUNT OF THIS   PRINCIPAL AMOUNT OF THIS   GLOBAL NOTE FOLLOWING SUCH   SIGNATORY OF TRUSTEE OR NOTES
                   GLOBAL NOTE                GLOBAL NOTE                DECREASE OR INCREASE         CUSTODIAN
                                                                                          





                                      A-17

                                                                       EXHIBIT B

                        *[FORM OF FACE OF EXCHANGE NOTE]

                     11% SENIOR SUBORDINATED NOTES DUE 2012

No.______________                                             $________________

                                                            CUSIP No. __________


         Giant Industries, Inc., a Delaware corporation, promises to pay to
_________________ or registered assigns the principal sum of ________________
Dollars on May 15, 2012.

         Interest Payment Dates: May 15 and November 15, commencing November 15,
2002

         Record Dates: May 1 and November 1

         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.


__________________________
*        If the Note is to be issued in global form, add the Global Notes Legend
         from Exhibit A and the attachment to Exhibit A captioned "[TO BE
         ATTACHED TO GLOBAL NOTES] - SCHEDULE OF INCREASES OR DECREASES IN
         GLOBAL NOTE."


                                      B-1

         In Witness Whereof, the Company 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


                                      B-2

                                [REVERSE OF NOTE]

                             GIANT INDUSTRIES, INC.

                     11% SENIOR SUBORDINATED NOTES DUE 2012

         1. Interest. Giant Industries, Inc., a Delaware corporation (the
"Company"), promises to pay interest on the principal amount of this Note at 11%
per annum from May 14, 2002 until maturity. The Company will pay interest
semiannually on May 15 and November 15 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 May 14, 2002; 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 November 15, 2002. 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 May 14, 2002 (the "Indenture"), 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. 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 Eleven 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 May 15, 2007, 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 May
15 of the years indicated below:



                Year                            Percentage
                ----                            ----------
                                             
                2007                             105.500%
                2008                             103.667%




                                      B-3

                                              
                2009                             101.833%
                2010 and thereafter              100.000%



         In addition, at any time prior to May 15, 2007, 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 May 15, 2005, the
Company may redeem in the aggregate up to 35% of the aggregate principal amount
of the Notes originally issued with the proceeds of one or more Public Equity
Offerings, at a redemption price (expressed as a percentage of principal amount)
of 111%, 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 Public 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 the Notes to be redeemed in
multiples of $1,000 pro rata, by lot or by any other method that the Trustee
considers fair and appropriate; provided that if the Notes are listed on any
securities exchange, that such method complies with the requirements of such
exchange. 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. Net Proceeds Offer. In the event of certain Asset Sales, the Company
may be required to make a Net Proceeds 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 Net Proceeds Payment Date.

         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.


                                      B-4

         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.

         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 this Indenture relating to
subordination that adversely affects the rights 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).


                                      B-5

         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.

         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.



                                      B-6

                                 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:
                    ------------------------------------------------------------


                                      B-7

                   FORM OF OPTION OF HOLDER TO ELECT PURCHASE

         If you want to elect to have this Note purchased by the Company
pursuant to Section 4.11 or Section 4.16 of the Indenture, check the box: [ ]

         If you want to have only part of this Note purchased by the Company
pursuant to Section 4.11 or Section 4.16 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:
                    ------------------------------------------------------------



                                      B-8

                            FORM OF NOTATION ON NOTE
                              RELATING TO 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 Articles Eleven and Twelve
of the Indenture, and reference is made thereto for the precise terms of the
Guarantee.

                                     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:


                                      B-9

                                     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:


                                     San Juan Refining Company,
                                        a New Mexico corporation

Attest:                                  By:
       -----------------------              --------------------------------
                                         Name:
                                         Title:


                                      B-10

                                     Giant Mid-Continent, Inc.,
                                        an Arizona corporation

Attest:                                  By:
       -----------------------              --------------------------------
                                         Name:
                                         Title:



                                     Giant Pipeline Company,
                                        a New Mexico corporation

Attest:                                  By:
       -----------------------              --------------------------------
                                         Name:
                                         Title:



                                     DeGuelle Oil Company,
                                        a Colorado 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:


                                      B-11

EX-4.3

                                                                     EXHIBIT 4.3

                        *[FORM OF FACE OF EXCHANGE NOTE]

                     11% SENIOR SUBORDINATED NOTES DUE 2012

No.                                                             $
   ---------------                                               ---------------

                                                            CUSIP No. __________


         Giant Industries, Inc., a Delaware corporation, promises to pay to
_________________ or registered assigns the principal sum of ________________
Dollars on May 15, 2012.

         Interest Payment Dates: May 15 and November 15, commencing November 15,
2002

         Record Dates: May 1 and November 1

         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.


- ----------------------
*        If the Note is to be issued in global form, add the Global Notes Legend
         from Exhibit A and the attachment to Exhibit A captioned "[TO BE
         ATTACHED TO GLOBAL NOTES] - SCHEDULE OF INCREASES OR DECREASES IN
         GLOBAL NOTE."

            In Witness Whereof, the Company 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

                                [REVERSE OF NOTE]

                             GIANT INDUSTRIES, INC.

                     11% SENIOR SUBORDINATED NOTES DUE 2012

         1. Interest. Giant Industries, Inc., a Delaware corporation (the
"Company"), promises to pay interest on the principal amount of this Note at 11%
per annum from May 14, 2002 until maturity. The Company will pay interest
semiannually on May 15 and November 15 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 May 14, 2002; 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 November 15, 2002. 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 May 14, 2002 (the "Indenture"), 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. 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 Eleven 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 May 15, 2007, 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 May
15 of the years indicated below:



                  Year                                  Percentage
                  ----                                  ----------
                                                     
                  2007                                    105.500%
                  2008                                    103.667%
                  2009                                    101.833%
                  2010 and thereafter                     100.000%


         In addition, at any time prior to May 15, 2007, 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 May 15, 2005, the
Company may redeem in the aggregate up to 35% of the aggregate principal amount
of the Notes originally issued with the proceeds of one or more Public Equity
Offerings, at a redemption price (expressed as a percentage of principal amount)
of 111%, 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 Public 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 the Notes to be redeemed in
multiples of $1,000 pro rata, by lot or by any other method that the Trustee
considers fair and appropriate; provided that if the Notes are listed on any
securities exchange, that such method complies with the requirements of such
exchange. 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. Net Proceeds Offer. In the event of certain Asset Sales, the Company
may be required to make a Net Proceeds 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 Net Proceeds Payment Date.

         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.

         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 this Indenture relating to
subordination that adversely affects the rights 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.

         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.

                                 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:
                    ------------------------------------------------------------

                   FORM OF OPTION OF HOLDER TO ELECT PURCHASE

         If you want to elect to have this Note purchased by the Company
pursuant to Section 4.11 or Section 4.16 of the Indenture, check the box: [ ]

         If you want to have only part of this Note purchased by the Company
pursuant to Section 4.11 or Section 4.16 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:
                    ------------------------------------------------------------

                            FORM OF NOTATION ON NOTE
                              RELATING TO 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 Articles Eleven and Twelve
of the Indenture, and reference is made thereto for the precise terms of the
Guarantee.

                                    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:

                                    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:


                                    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:



                                    DeGuelle Oil Company,
                                       a Colorado 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:

EX-10.1

                                                                   Exhibit 10.1

                                                                  EXECUTION COPY



                  SECOND AMENDED AND RESTATED CREDIT AGREEMENT


                            Dated as of May 14, 2002


                                      among


                             GIANT INDUSTRIES, INC.,


                             BANK OF AMERICA, N.A.,
                         as Administrative Agent and as
                          Letter of Credit Issuing Bank

                                       and

                           THE LENDERS PARTIES HERETO




                                   BNP PARIBAS
                                       and
                              FLEET NATIONAL BANK,
                              Co-Syndication Agents



                         BANC OF AMERICA SECURITIES LLC,
                             Sole Lead Arranger and
                                Sole Book Manager

                                TABLE OF CONTENTS


                                                                           Page
                                                                           ----
                                                                     
ARTICLE I   DEFINITIONS......................................................1
      1.01  Certain Defined Terms............................................1
      1.02  Other Interpretive Provisions...................................23
      1.03  Accounting Principles...........................................24

ARTICLE II  THE CREDITS.....................................................24
      2.01  Amounts and Terms of Commitments................................24
      2.02  Loan Accounts...................................................24
      2.03  Procedure for Borrowing.........................................25
      2.04  Conversion and Continuation Elections...........................25
      2.05  Termination or Reduction of Commitments.........................26
            (a)  Voluntary Termination or Reduction.........................26
            (b)  Additional Provisions......................................26
      2.06  Optional Prepayments............................................26
      2.07  Borrowing Base Determinations; Deposit Account Triggering Event;
            Mandatory Prepayments of Loans..................................27
      2.08  Repayment.......................................................28
            (a)  Principal..................................................28
            (b)  Interest...................................................28
      2.09  Fees............................................................28
            (a)  Arrangement, Agency Fees...................................28
            (b)  Commitment Fees............................................28
      2.10  Computation of Fees and Interest................................29
      2.11  Payments by the Company.........................................29
      2.12  Payments by the Lenders to the Administrative Agent.............30
      2.13  Sharing of Payments, Etc........................................30
      2.14  Security and Guaranty...........................................31
      2.15  Concentration Account...........................................31

ARTICLE III THE LETTERS OF CREDIT...........................................32
      3.01  The Letter of Credit Facility...................................32
      3.02  Issuance, Amendment and Renewal of Letters of Credit............33
      3.03  Existing Letters of Credit, Risk Participations,
            Drawings and Reimbursements ....................................34
      3.04  Repayment of Participations.....................................35
      3.05  Role of the Issuing Bank........................................36
      3.06  Obligations Absolute............................................36
      3.07  Cash Collateral Pledge..........................................37
      3.08  Letter of Credit Fees...........................................38
      3.09  Applicability of ISP98 and UCP..................................38

ARTICLE IV  TAXES, YIELD PROTECTION AND ILLEGALITY..........................38
      4.01  Taxes...........................................................38
      4.02  Illegality......................................................39
      4.03  Increased Costs and Reduction of Return.........................40



                                     - i -

                                                                      
      4.04  Funding Losses..................................................40
      4.05  Inability to Determine Rates....................................41
      4.06  Certificates of Lenders.........................................41
      4.07  Substitution of Lenders.........................................41
      4.08  Survival........................................................42

ARTICLE V   CONDITIONS PRECEDENT............................................42
      5.01  Conditions of Initial Credit Extensions.........................42
            (a)  Credit Agreement, Notes, Guaranty, Deposit Account
            Control Agreements, Yorktown Intercreditor Agreement and
            Perfection Certificate..........................................42
            (b)  Resolutions; Incumbency; Organization Documents............42
            (c)  Certificate (Organization, Qualification and Good Standing)42
            (d)  Legal Opinions.............................................42
            (e)  Payment of Fees............................................43
            (f) Certificate (Representations and Warranties, Etc.)..........43
            (g)  Certificate (Consents and Approvals, etc.).................43
            (h)  Certificate (Closing of Yorktown Acquisition and,
            Yorktown Term Loan) ............................................43
            (i) Copy of Yorktown Acquisition Documents and,
            Yorktown Term Loan Documents ...................................43
            (j) Certificate (Compliance with Indentures)....................44
            (k)  Satisfaction with Financial Condition......................44
            (l) Borrowing Base Report.......................................44
            (m)  Certificate and Financial Statements.......................44
            (n)  Collateral Documents.......................................44
            (o)  Completion of Field Audit..................................45
            (p)  Other Documents............................................45
      5.02  Conditions to All Credit Extensions.............................45
            (a)  Notice, Application........................................45
            (b)  Continuation of Representations and Warranties.............45
            (c)  No Existing Default........................................45
            (d)  No Material Adverse Effect.................................45
            (e)  No Future Advance Notice...................................45

ARTICLE VI  REPRESENTATIONS AND WARRANTIES..................................46
      6.01  Corporate Existence and Power...................................46
      6.02  Corporate Authorization; No Contravention.......................46
      6.03  Governmental Authorization......................................46
      6.04  Binding Effect..................................................46
      6.05  Litigation......................................................46
      6.06  No Default......................................................47
      6.07  ERISA Compliance................................................47
      6.08  Use of Proceeds; Margin Regulations.............................47
      6.09  Title to Properties.............................................47
      6.10  Taxes ..........................................................47
      6.11  Financial Condition.............................................48
      6.12  Environmental Matters...........................................48
      6.13  Regulated Entities..............................................48
      6.14  No Burdensome Restrictions......................................48




                                     - ii -

                                                                      
      6.15  Copyrights, Patents, Trademarks and Licenses, etc...............48
      6.16  Subsidiaries....................................................49
      6.17  Insurance ......................................................49
      6.18  Full Disclosure.................................................49
      6.19  Solvency........................................................49
      6.20  Labor Relations.................................................49
      6.21  Collateral Documents............................................49
      6.22  Yorktown Acquisition Documents..................................49

ARTICLE VII AFFIRMATIVE COVENANTS...........................................50
      7.01  Financial Statements............................................50
      7.02  Certificates; Field Audits; Other Information...................50
      7.03  Notices.........................................................51
      7.04  Preservation of Corporate Existence, Etc........................52
      7.05  Maintenance of Property.........................................52
      7.06  Insurance; Insurance and Condemnation Proceeds..................52
      7.07  Payment of Obligations..........................................54
      7.08  Compliance with Laws............................................54
      7.09  Compliance with ERISA...........................................54
      7.10  Inspection of Property and Books and Records; Field Audit.......54
      7.11  Environmental Laws..............................................54
      7.12  New Subsidiary Guarantors; New Subsidiary Security Agreements...55
      7.13  Use of Proceeds.................................................55
      7.14  Subordinated Indebtedness.......................................55
      7.15  Further Assurances..............................................55

ARTICLE VIII    NEGATIVE COVENANTS..........................................56
      8.01  Limitation on Liens.............................................56
      8.02  Disposition of Assets...........................................57
      8.03  Consolidations and Mergers......................................57
      8.04  Loans and Investments...........................................58
      8.05  Limitation on Indebtedness......................................58
      8.06  Transactions with Affiliates....................................59
      8.07  Use of Proceeds.................................................59
      8.08  [Intentionally Blank]...........................................59
      8.09  Restricted Payments.............................................59
      8.10  Subsidiary Dividends............................................59
      8.11  Subordinated Notes..............................................60
      8.12  Minimum Consolidated Net Worth..................................60
      8.13  Minimum Fixed Charge Coverage Ratio.............................60
      8.14  Total Leverage Ratio............................................60
      8.15  Senior Leverage Ratio...........................................60
      8.16  ERISA...........................................................60
      8.17  Change in Business..............................................61
      8.18  Accounting Changes..............................................61

ARTICLE IX  EVENTS OF DEFAULT...............................................61




                                    - iii -

                                                                      
      9.01  Event of Default................................................61
            (a)  Non-Payment................................................61
            (b)  Representation or Warranty.................................61
            (c)  Specific Defaults..........................................61
            (d)  Other Defaults.............................................61
            (e)  Cross-Default..............................................62
            (f)  Insolvency; Voluntary Proceedings..........................62
            (g)  Involuntary Proceedings....................................62
            (h)  ERISA......................................................63
            (i)  Monetary Judgments.........................................63
            (j)  Change of Control..........................................63
            (k)  Loss of Permit.............................................63
            (l)  Adverse Change.............................................63
            (m)  Guaranty Default...........................................63
            (n)  Invalidity of Subordination Provisions.....................63
            (o)  Prepayment of Subordinated Notes...........................63
            (p)  Collateral.................................................64
      9.02  Remedies........................................................64
      9.03  Rights Not Exclusive............................................65

ARTICLE X   THE AGENT.......................................................65
      10.01   Appointment and Authorization.................................65
      10.02   Delegation of Duties..........................................65
      10.03   Liability of Administrative Agent.............................65
      10.04   Reliance by Administrative Agent..............................66
      10.05   Notice of Default.............................................66
      10.06   Credit Decision...............................................66
      10.07   Indemnification; Certain Depository Bank Matters..............67
      10.08   Administrative Agent in Individual Capacity...................68
      10.09   Successor Administrative Agent................................68
      10.10   Foreign Lenders...............................................68
      10.11   Collateral Matters............................................69
      10.12   Field Audit and Examination Reports; Disclaimer by Lenders....70

ARTICLE XI  MISCELLANEOUS...................................................71
      11.01   Amendments and Waivers........................................71
      11.02   Notices.......................................................72
      11.03   No Waiver; Cumulative Remedies................................73
      11.04   Costs and Expenses............................................73
      11.05   Indemnity.....................................................73
      11.06   Payments Set Aside............................................74
      11.07   Successors and Assigns; Assignments, Participations, etc......75
      11.08   Confidentiality...............................................76
      11.09   Set-off.......................................................77
      11.10   Interest......................................................78
      11.11   Indemnity and Subrogation.....................................78
      11.12   Automatic Debits of Fees......................................78




                               - iv -

                                                                      
      11.13   Notification of Addresses, Lending Offices, Etc...............79
      11.14   Counterparts..................................................79
      11.15   Severability..................................................79
      11.16   No Third Parties Benefitted...................................79
      11.17   GOVERNING LAW.................................................79
      11.18   CERTAIN WAIVERS...............................................80
      11.19   Assignment....................................................80
      11.20   Entire Agreement..............................................81




                                     - v -

SCHEDULES

               
Schedule 1.01     Preferred Eligible Account Obligors
Schedule 1.01(A)  Scheduled Adjustments to Consolidated EBITDA
Schedule 2.01     Commitments
Schedule 2.02     Pricing Chart
Schedule 3.03     Existing Letters of Credit
Schedule 5.01     Post Closing Requirements
Schedule 6.11     Undisclosed Liabilities
Schedule 6.16     Subsidiaries and Minority Interests
Schedule 8.01     Permitted Liens
Schedule 8.04     Permitted Loans and Investments
Schedule 8.05     Certain Permitted Indebtedness
Schedule 11.02    Addresses for Notices




EXHIBITS

               
Exhibit A         Form of Notice of Borrowing
Exhibit B         Form of Notice of Conversion/Continuation
Exhibit C         Form of Compliance Certificate
Exhibit D-1       Form of Legal Opinion of Company's Counsel
Exhibit D-2       Form of Legal Opinion of Company's Special Counsel
Exhibit D-3       Form of Legal Opinion of Company's Special New York Counsel
Exhibit E         Form of Assignment and Assumption
Exhibit F         Form of Note
Exhibit G         Form of Guaranty Agreement
Exhibit H         Form of Borrowing Base Report
Exhibit I-1       Form of Security Agreement (Parent)
Exhibit I-2       Form of Security Agreement (Subsidiary)
Exhibit J         Form of Yorktown Intercreditor Agreement
Exhibit K         Form of Deposit Account Control Agreement




                                     - vi -

                  SECOND AMENDED AND RESTATED CREDIT AGREEMENT

         This AMENDED AND RESTATED CREDIT AGREEMENT is entered into as of May
14, 2002, among GIANT INDUSTRIES, INC., a Delaware corporation (the "COMPANY"),
the several financial institutions from time to time parties to this Agreement
(collectively, the "LENDERS"; individually, a "LENDER"), and BANK OF AMERICA,
N.A., as administrative agent for the Lenders and as Letter of Credit Issuing
Bank.

         WHEREAS, the Company, as borrower, Bank of America, N.A., as
administrative agent and as a lender, and certain other agents and lenders are
parties to that certain Credit Agreement dated as of December 23, 1998, as
amended by that certain First Amendment to Credit Agreement dated as of December
17, 1999 (the "ORIGINAL CREDIT AGREEMENT"); and

         WHEREAS, the Company, as borrower, Bank of America, N.A., as
administrative agent and as a lender, and certain other agents and lenders are
parties to that certain Amended and Restated Credit Agreement dated as of
December 19, 2001, which amended and restated the Original Credit Agreement (the
"EXISTING CREDIT AGREEMENT"); and

         WHEREAS, the Company has requested, and the Administrative Agent and
the Lenders have agreed, to amend and restate the Existing Credit Agreement and
to refinance, rearrange, increase and extend the obligations and indebtedness
outstanding thereunder, all subject to the terms and conditions set forth below.

         NOW, THEREFORE, in consideration of the mutual agreements, provisions
and covenants contained herein and other good and valuable consideration, the
receipt and adequacy of which is hereby acknowledged, the parties hereto agree
as follows:

                                    ARTICLE I

                                   DEFINITIONS

         1.01.    Certain Defined Terms. The following terms have the following
                  meanings:

                  "ACQUISITION" means any transaction or series of related
transactions for the purpose of or resulting, directly or indirectly, in (a) the
acquisition of all or substantially all of the assets of a Person, or of any
business or division of a Person, (b) the acquisition of in excess of 50% of the
capital stock of a corporation (or similar entity), which stock has ordinary
voting power for the election of the members of the acquiree's board of
directors or persons exercising similar functions (other than stock having such
power only by reason of the happening of a contingency), or the acquisition of
in excess of 50% of the partnership interests or equity of any Person not a
corporation which acquisition gives the acquirer the power to direct or cause
the direction of the management and policies of the acquiree, or (c) a merger or
consolidation or any other combination with another Person (other than a Person
that is a Subsidiary), provided that the Company or a Subsidiary of the Company
is the surviving entity.

                  "ADMINISTRATIVE AGENT" means Bank of America, N.A. in its
capacity as agent for the Lenders hereunder, and any successor agent arising
under SECTION 10.09.

                  "ADMINISTRATIVE AGENT'S PAYMENT OFFICE" means the address for
payments set forth on SCHEDULE 11.02 hereto in relation to the Administrative
Agent, or such other address as the Administrative Agent may from time to time
specify.

                  "ADMINISTRATIVE QUESTIONNAIRE" means an Administrative
Questionnaire, an Administrative Details Reply Form or similar form supplied by
the Administrative Agent to each Lender.

                  "AFFILIATE" means, with respect to a specified Person, another
Person that directly, or indirectly through one or more intermediaries, Controls
or is Controlled by or is under common Control with the Person specified.
"CONTROL" means the possession, directly or indirectly, of the power to direct
or cause the direction of the management or policies of a Person, whether
through the ability to exercise voting power, by contract or otherwise.
"CONTROLLING" and "CONTROLLED" have meanings correlative thereto.

                  "AGENT-RELATED PERSONS" means Bank of America and any
successor Administrative Agent arising under SECTION 10.09 and any successor
Letter of Credit Issuing Bank hereunder, together with their respective
Affiliates (including, in the case of Bank of America, the Arranger), and the
officers, directors, employees, agents and attorneys-in-fact of such Persons and
Affiliates.

                  "AGREEMENT" means this Second Amended and Restated Credit
Agreement, as renewed, extended, amended or restated from time to time.

                  "ALBUQUERQUE TERMINAL" means the terminal owned and operated
by Giant Mid-Continent, located in or near Albuquerque, New Mexico.

                  "APPLICABLE MARGIN" means with respect to Base Rate Loans and
Offshore Rate Loans, respectively, the specified percent per annum therefor set
forth in SCHEDULE 2.02 corresponding to the applicable pricing level determined
in accordance therewith.

                  "APPROVED FUND" means any Fund that is administered or managed
by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate
of an entity that administers or manages a Lender.

                  "ARRANGER" means Banc of America Securities LLC, in its
capacity as sole lead arranger and sole book manager.

                  "ASSIGNMENT AND ASSUMPTION" means an assignment and assumption
entered into by a Lender and an Eligible Assignee (with the consent of any party
whose consent is required by SECTION 11.07), and accepted by the Administrative
Agent, in substantially the form of EXHIBIT E or any other form approved by the
Administrative Agent.

                  "ATTORNEY COSTS" means and includes all reasonable fees and
disbursements of any law firm or other external counsel, the allocated cost of
internal legal services and all disbursements of internal counsel.

                  "AVAILABILITY" means, at any time, the sum of (a) the lesser
of (i) the Lenders' aggregate Commitments and (ii) the Borrowing Base, minus (b)
the sum of (i) the Effective Amount of all outstanding Revolving Loans and (ii)
the Effective Amount of all Letter of Credit Obligations.

                  "BANK OF AMERICA" means Bank of America, N.A., a national
banking association.

                  "BANKRUPTCY CODE" means the Federal Bankruptcy Reform Act of
1978 (11 U.S.C. Section 101, et seq.).

                  "BASE RATE" means, for any day, the higher of: (a) 0.50% per
annum above the latest Federal Funds Rate; and (b) the rate of interest in
effect for such day as publicly announced from time to


                                     - 2 -

time by Bank of America as its "prime rate." (The "prime rate" is a rate set by
Bank of America based upon various factors, including Bank of America's costs
and desired return, general economic conditions and other factors, and is used
as a reference point for pricing some loans, which may be priced at, above, or
below such announced rate.) Any change in the reference rate announced by Bank
of America shall take effect at the opening of business on the day specified in
the public announcement of such change.

                  "BASE RATE LOAN" means a Revolving Loan or an L/C Advance that
bears interest based on the Base Rate.

                  "BLOOMFIELD REFINERY" means the refinery owned by San Juan
Refining Company, and operated by Giant Arizona, located in or near Farmington,
New Mexico.

                  "BNY $150,000,000 INDENTURE" means that certain Indenture
dated August 26, 1997, between the Company, as Issuer, The Bank of New York, as
Trustee, and others evidenced by the BNY $150,000,000 Subordinated Notes.

                  "BNY $200,000,000 INDENTURE" means that certain Indenture
dated May 14, 2002, between the Company, as Issuer, The Bank of New York, as
Trustee, and others evidenced by the BNY $200,000,000 Subordinated Notes.

                  "BNY $150,000,000 SUBORDINATED NOTES" means the $150,000,000
9% Senior Subordinated Notes due 2007 issued by the Company under the BNY
$150,000,000 Indenture.

                  "BNY $200,000,000 SUBORDINATED NOTES" means the $200,000,000
11% Senior Subordinated Notes due 2012 issued by the Company under the BNY
$200,000,000 Indenture.

                  "BNY $200,000,000 SUBORDINATED NOTES OFFERING" means the
issuance and sale of the BNY $200,000,000 Subordinated Notes pursuant to the BNY
$200,000,000 Indenture.

                  "BORROWING" means a borrowing hereunder consisting of
Revolving Loans of the same Interest Rate Type made to the Company on the same
day by the Lenders under ARTICLE II, and, other than in the case of Base Rate
Loans, having the same Interest Period.

                  "BORROWING BASE" means the amount calculated weekly pursuant
to SECTION 2.07(A) based upon information contained in the Borrowing Base
Report.

                  "BORROWING BASE REPORT" means a report substantially in the
form of EXHIBIT H hereto.

                  "BORROWING DATE" means any date on which a Borrowing occurs
under ARTICLE II.

                  "BROKER" means a broker or securities intermediary that has
entered into an Investment Account Control Agreement.

                  "BUSINESS DAY" means any day other than a Saturday, Sunday or
other day on which commercial banks are authorized or required by law to close
under the Laws of, or are in fact closed in, Dallas, Texas or such other state
where the Administrative Agent's office for payments may be located, and, if the
applicable Business Day relates to any Offshore Rate Loan, means such a day on
which dealings are carried on in the applicable offshore dollar interbank
market.

                  "CAPITAL ADEQUACY REGULATION" means any guideline, request or
directive of any central bank or other Governmental Authority, or any other law,
rule or regulation, whether or not having the


                                     - 3 -

force of law, in each case regarding capital adequacy of any bank or of any
corporation controlling a bank.

                  "CAPITAL EXPENDITURES" means, for any period, expenditures
(including, without limitation, the aggregate amount of Capital Lease
Obligations incurred during such period) made by the Company or any of its
Consolidated Subsidiaries to acquire or construct fixed assets, plant and
equipment (including renewals, improvements and replacements thereof) during
such period computed in accordance with GAAP.

                  "CAPITAL LEASE" means a capital lease as determined in
accordance with GAAP.

                  "CAPITAL LEASE OBLIGATIONS" means, for any Person, all
obligations of such Person to pay rent or other amounts under a lease of (or
other agreement conveying the right to use) Property to the extent such
obligations are required to be classified and accounted for as a capital lease
on a balance sheet of such Person under GAAP (including Statement of Financial
Accounting Standards No. 13 of the Financial Accounting Standards Board), and,
for purposes of this Agreement, the amount of such obligations shall be the
capitalized amount thereof, determined in accordance with GAAP (including such
Statement No. 13).

                  "CASH COLLATERALIZE" means to pledge and deposit with or
deliver to the Administrative Agent, for the benefit of the Administrative
Agent, the Issuing Bank and the Lenders, as collateral for the L/C Obligations,
cash or deposit account balances pursuant to documentation in form and substance
satisfactory to the Administrative Agent and the Issuing Bank (which documents
are hereby consented to by the Lenders). Derivatives of such term shall have
corresponding meanings.

                  "CASH EQUIVALENTS" means: (a) securities issued or fully
guaranteed or insured by the United States Government or any agency thereof and
backed by the full faith and credit of the United States having maturities of
not more than twelve (12) months from the date of acquisition; (b) certificates
of deposit, time deposits, Eurodollar time deposits, or bankers' acceptances
having in each case a tenor of not more than twelve (12) months from the date of
acquisition issued by any U.S. commercial bank or any branch or agency of a
non-U.S. commercial bank licensed to conduct business in the U.S. having
combined capital and surplus of not less than Five Hundred Million Dollars
($500,000,000) whose long term securities are rated at least A (or then
equivalent grade) by S&P and A2 (or then equivalent grade) by Moody's at the
time of acquisition; (c) commercial paper of an issuer rated at least A-1 by S&P
or P-1 by Moody's at the time of acquisition, and in either case having a tenor
of not more than twelve (12) months; (d) repurchase agreements with a term of
not more than seven days for underlying securities of the types described in
CLAUSES (A) and (B) above; and (e) money market mutual or similar funds having
assets in excess of $100,000,000, at least 95% of the assets of which are
comprised of assets specified in CLAUSES (A) through (C) above.

                  "CHANGE OF CONTROL" means (a) a purchase or acquisition,
directly or indirectly, by any "person" or "group" within the meaning of Section
13(d)(3) and 14(d)(2) of the Securities and Exchange Act of 1934 (a "GROUP"), of
"beneficial ownership" (as such term is defined in Rule 13d-3 under the Exchange
Act) of securities of the Company which, together with any securities owned
beneficially by any "affiliates" or "associates" of such Group (as such terms
are defined in Rule 12b-2 under the Exchange Act), represent more than fifty
percent (50%) of the combined voting power of the Company's securities which are
entitled to vote generally in the election of directors and which are
outstanding on the date immediately prior to the date of such purchase or
acquisition; (b) a sale of all or substantially all of the assets of the Company
and its Subsidiaries taken as a whole to any Person or Group; (c) the
liquidation or dissolution of the Company; or (d) the first day on which a
majority of the Board of Directors of the Company are not Continuing Directors
(as herein defined). As herein defined,


                                     - 4 -

"Continuing Director" means any member of the Board of Directors of the Company
who (x) is a member of such Board of Directors as of the date of this Agreement
or (y) was nominated for election or elected to such Board of Directors with the
affirmative vote of two-thirds of the Continuing Directors who were members of
such Board of Directors at the time of such nomination or election.

                  "CINIZA REFINERY" means the refinery owned and operated by
Giant Arizona, located in or near Gallup, New Mexico.

                  "CLOSING DATE" means the date on which all conditions
precedent set forth in SECTION 5.01 and 5.02 are satisfied or waived by all
Lenders (or, in the case of SUBSECTION 5.01(e), waived by the Person entitled to
receive such payment).

                  "CODE" means the Internal Revenue Code of 1986, and
regulations promulgated thereunder.

                  "COLLATERAL" means all property and interests in property and
proceeds thereof now owned or hereafter acquired by the Company or any Guarantor
and their respective Subsidiaries in or upon which a Lien now or hereafter
exists in favor of the Lenders, or the Administrative Agent on behalf of the
Lenders, whether under this Agreement or under any other document executed by
any such Person and delivered to the Administrative Agent or the Lenders.

                  "COLLATERAL DOCUMENTS" means, collectively, (a) the Security
Agreement, the Guaranty and all other security agreements, mortgages, deeds of
trust, patent and trademark assignments, lease assignments, guarantees and other
similar agreements executed by the Company or any Subsidiary or any Guarantor
for the benefit of the Lenders now or hereafter delivered to the Lenders or the
Administrative Agent pursuant to or in connection with the transactions
contemplated hereby, and all financing statements (or comparable documents now
or hereafter filed in accordance with the UCC or comparable law) against the
Company or any Subsidiary or any Guarantor as debtor in favor of the Lenders or
the Administrative Agent for the benefit of the Lenders as secured party, and
(b) any amendments, supplements, modifications, renewals, replacements,
consolidations, substitutions and extensions of any of the foregoing.

                  "COMMITMENT" as to each Lender has the meaning specified in
SECTION 2.01.

                  "COMMITMENT FEE" has the meaning set forth in SUBSECTION
2.09(b).

                  "COMMODITY SWAP" means any commodity swap, commodity option or
commodity forward contract (including any option to enter into any of the
foregoing).

                  "COMPLIANCE CERTIFICATE" means a certificate substantially in
the form of EXHIBIT C.

                  "CONCENTRATION ACCOUNT" has the meaning set forth in SECTION
2.15.

                  "CONSOLIDATED EBITDA" means, for the relevant period, (a) the
sum of (i) the Consolidated Net Income for such period, (ii) Consolidated
Interest Expense, (iii) all taxes measured by income to the extent included in
the determination of such Consolidated Net Income, (iv) all amounts treated as
expenses for depreciation and the amortization of intangibles of any kind for
such period to the extent deducted in the determination of such Consolidated Net
Income for the relevant period, and (v) non-cash losses associated with asset
dispositions to the extent deducted in the determination of Consolidated Net
Income for the relevant period, minus (b) non-cash gains associated with asset
dispositions to the extent included in the determination of Consolidated Net
Income for the relevant

                                     - 5 -

period. Consolidated EBITDA for the fiscal quarters ended on March 31, 2002,
June 30, 2002, September 30, 2002, December 31, 2002 and March 31, 2003 shall be
adjusted on a pro forma basis to take into account the Yorktown Acquisition, as
set forth on SCHEDULE 1.01(A) attached hereto.

                  "CONSOLIDATED FUNDED INDEBTEDNESS" means, for the Company and
its Consolidated Subsidiaries, at any time, without duplication, the sum of: (a)
all Indebtedness (other than Indebtedness of the type described in CLAUSE
(h)(ii) of the definition of Indebtedness), (b) obligations to redeem or
purchase any stock or other equity security of the Company or a Subsidiary, and
(c) any guaranty obligations in respect of any of the foregoing.

                  "CONSOLIDATED INTEREST EXPENSE" means for the relevant period,
for the Company and its Consolidated Subsidiaries, without duplication, (a) the
sum of (i) all interest in respect of Indebtedness and all imputed interest with
respect to Capital Leases accrued or capitalized during such period (whether or
not actually paid during such period and including fees payable in respect of
letters of credit and bankers' acceptances), (ii) the net amount payable (or
minus the net amount receivable) under all Swap Contracts (other than Commodity
Swaps) during such period (whether or not actually paid or received during such
period), and (iii) all dividends paid, declared or otherwise accrued in respect
of preferred stock, minus (b) all fees and financing costs amortized during such
period related to the incurrence of Indebtedness, to the extent such non-cash
costs are included in the calculation of interest expense.

                  "CONSOLIDATED NET INCOME" means, for any period, the net
income (or net loss) of the Company and its Consolidated Subsidiaries for such
period determined in accordance with GAAP.

                  "CONSOLIDATED NET WORTH" means, at any date, an amount equal
to the consolidated stockholders' equity of the Company and its Consolidated
Subsidiaries determined in accordance with GAAP determined as of such date.

                  "CONSOLIDATED RENTS" means, with respect to any period, the
sum of the rental and other obligations required to be paid during such period
by the Company and its Consolidated Subsidiaries as lessee under all leases of
real or personal property (other than Capital Leases).

                  "CONSOLIDATED SENIOR INDEBTEDNESS" means Consolidated Funded
Indebtedness, other than Indebtedness evidenced by the Subordinated Notes.

                  "CONSOLIDATED SUBSIDIARIES" means, at any date, any Subsidiary
the accounts of which, in accordance with GAAP, would be consolidated with those
of the Company in its consolidated financial statements if such statements were
prepared as of such date.

                  "CONSOLIDATED TANGIBLE NET WORTH" means Consolidated Net
Worth, minus the net book value of all assets of the Company and its
Consolidated Subsidiaries (after deducting any reserves applicable thereto)
which would be shown as intangible assets on a consolidated balance sheet of the
Company and its Consolidated Subsidiaries prepared as of such time in accordance
with GAAP.

                  "CONTINGENT OBLIGATION" means, as to any Person without
duplication, any direct or indirect liability of that Person with or without
recourse, (a) with respect to any Indebtedness, lease, dividend, letter of
credit or other similar obligation (the "PRIMARY OBLIGATIONS") of another Person
(the "PRIMARY OBLIGOR"), including any obligation of that Person (i) to
purchase, repurchase or otherwise acquire such primary obligations or any
security therefor, (ii) to advance or provide funds for the payment or discharge
of any such primary obligation, or to maintain working capital or equity capital
of the primary obligor or otherwise to maintain the net worth or solvency or any
balance sheet item, level of income or financial condition of the primary
obligor, (iii) to purchase property, securities or services


                                     - 6 -

primarily for the purpose of assuring the owner of any such primary obligation
of the ability of the primary obligor to make payment of such primary
obligation, or (iv) otherwise to assure or hold harmless the holder of any such
primary obligation against loss in respect thereof (each, a "GUARANTY
OBLIGATION"); or (b) to purchase any materials, supplies or other property from,
or to obtain the services of, another Person if the relevant contract or other
related document or obligation requires that payment for such materials,
supplies or other property, or for such services, shall be made regardless of
whether delivery of such materials, supplies or other property is ever made or
tendered, or such services are ever performed or tendered. The amount of any
Contingent Obligation shall, in the case of Guaranty Obligations, be deemed
equal to the maximum stated or determinable amount of the primary obligation in
respect of which such Guaranty Obligation is made or, if not stated or if
indeterminable, the maximum reasonably anticipated liability in respect thereof,
and in the case of other Contingent Obligations, shall be equal to the maximum
reasonably anticipated liability in respect thereof.

                  "CONTRACTUAL OBLIGATION" means, as to any Person, any
provision of any security issued by such Person or of any agreement,
undertaking, contract, indenture, mortgage, deed of trust or other instrument,
document or agreement to which such Person is a party or by which it or any of
its property is bound.

                  "CONTROL NOTICE" has the same meaning set forth in SECTION
2.07(c)(ii).

                  "CONVERSION/CONTINUATION DATE" means any date on which, under
SECTION 2.04, the Company (a) converts Loans of one Interest Rate Type to
another Interest Rate Type, or (b) continues as Loans of the same Interest Rate
Type, but with a new Interest Period, Loans having Interest Periods expiring on
such date.

                  "CREDIT EXTENSION" means and includes (a) the making of any
Revolving Loans hereunder, and (b) the Issuance of any Letters of Credit
hereunder (including the Existing Letters of Credit).

                  "DEFAULT" means any event or circumstance which, with the
giving of notice, the lapse of time, or both, would (if not cured or otherwise
remedied during such time) constitute an Event of Default.

                  "DEFAULT RATE" has the meaning set forth in SUBSECTION
2.08(b)(iii).

                  "DEPOSIT ACCOUNT CONTROL AGREEMENT" means a Deposit Account
Control Agreement substantially in the form of EXHIBIT K hereto, or any other
agreement in form and substance satisfactory to the Administrative Agent serving
a similar purpose, among the Company, the Administrative Agent, and a Depository
Bank.

                  "DEPOSIT ACCOUNT TRIGGERING EVENT" has the meaning set forth
in SECTION 2.07(c).

                  "DEPOSITORY BANK" means a bank, savings bank, savings and loan
association, credit union, trust company, or other depository institution that
has entered into a Deposit Account Control Agreement.

                  "DOLLARS," "DOLLARS" and "$" each mean lawful money of the
United States.

                  "EFFECTIVE AMOUNT" means (i) with respect to any Revolving
Loans on any date, the aggregate outstanding principal amount thereof after
giving effect to any Borrowings and prepayments or repayments of Revolving Loans
occurring on such date under such facility; and (ii) with respect to any
outstanding L/C Obligations on any date, the amount of such L/C Obligations on
such date after giving


                                     - 7 -

effect to any Issuances of Letters of Credit occurring on such date and any
other changes in the aggregate amount of the L/C Obligations as of such date,
including as a result of any reimbursements of drawings under any Letters of
Credit or any reductions in the maximum amount available for drawing under
Letters of Credit taking effect on such date.

                  "ELIGIBLE ACCOUNT OBLIGOR" means, on any date, any Person
obligated to pay a Receivable (i) that is not the Company, a Subsidiary or
Affiliate of the Company; (ii) that has not filed for, and is not currently the
object of, a proceeding relating to its bankruptcy, insolvency, reorganization,
winding-up or composition or reorganization of debts; (iii) that is in good
standing with the Company and its Subsidiaries and satisfies all applicable
credit standards of the Company and its Subsidiaries; and (iv) for which not
more than 50% of the aggregate value of the Receivables of such Account Obligor
have not been paid by the date 30 days after the respective due dates therefor.

                  "ELIGIBLE ACCOUNTS RECEIVABLE" means, on any date, all
Receivables denominated in Dollars payable by Eligible Account Obligors, except:
(i) billed Receivables that have not been paid by the date 30 days after the
respective due dates therefor; (ii) any Receivable subject to any asserted
defense, dispute, claim, offset or counterclaim, provided that, if any such
defense, dispute, claim, offset or counterclaim is asserted with respect to such
Receivable in an amount equal to a sum certain, then such Receivable shall be an
Eligible Account Receivable to the extent the face amount thereof exceeds such
sum certain; (iii) all such Receivables subject to any repurchase or return
arrangement; (iv) Receivables of each Eligible Account Obligor to the extent
that the Receivables of such Eligible Account Obligor exceed 10% of all
Receivables; (v) all Receivables that are payable by their terms more than 30
days from the respective invoice dates therefor; (vi) any Receivable in which
the Lenders do not have a valid and perfected first priority security interest,
except that such security interest may be subject to statutory Liens in respect
of First Purchase Crude Payables that are not delinquent; (vii) any Receivable
of a Subsidiary with respect to which any event described in SUBSECTION 9.01(f)
or (g) shall have occurred and be continuing; (viii) Receivables with respect to
which the account debtor is not a Person resident in the United States; (ix)
Receivables with respect to which goods have been placed on consignment,
guaranteed sale or other terms by reason of which the payment by the account
debtor may be conditional; (x) Receivables with respect to which an invoice has
not been sent prior to the date of any Borrowing Base Report in which such
Receivable is included for purposes of calculation of the Borrowing Base; (xi)
Receivables which represent obligations of local, state or federal Governmental
Authorities, unless such Governmental Authority is a Governmental Authority of
the United States of America and such Governmental Authority has properly
acknowledged the receipt of the assignment of Eligible Accounts Receivables in
compliance with the Federal Assignment of Claims Act with respect thereto; (xii)
Receivables which arise out of any contract or order which, by its terms,
forbids or makes void or unenforceable any assignment by the Company to the
Administrative Agent, for the benefit of Lenders, of the Receivable arising with
respect thereto; (xiii) Receivables evidenced by any instrument, unless such
instrument has been delivered to the Administrative Agent for the benefit of the
Lenders, and (xiv) Receivables that are otherwise identified as unsatisfactory
to the Administrative Agent or the Majority Lenders using reasonable business
judgment.

                  "ELIGIBLE ASSIGNEE" means (a) a Lender; (b) an Affiliate of a
Lender; (c) an Approved Fund; and (d) any other Person (other than a natural
Person) approved by (i) the Administrative Agent, (ii) in the case of any
assignment of the Commitment, the L/C Issuing Lender, and (iii) unless a Default
or Event of Default has occurred and is continuing, the Company (each such
approval not to be unreasonably withheld or delayed); provided that
notwithstanding the foregoing, "Eligible Assignee" shall not include the Company
or any of the Company's Affiliates or Subsidiaries.

                  "ELIGIBLE REFINERY HYDROCARBON INVENTORY" means, at any date,
the aggregate value therefor on a FIFO basis calculated in accordance with GAAP
of all readily marketable, saleable and


                                     - 8 -

useful Feedstocks, Intermediate Products and Refined Products (excluding (a) any
and all Feedstocks, Intermediate Products and Refined Products in which the
Lenders do not have a valid and perfected first priority security interest,
except that such security interest may be subject to statutory Liens in respect
of First Purchase Crude Payables that are not delinquent; (b) any and all
Feedstocks, Intermediate Products and Refined Products located on leased
premises (other than Refined Product at leased service stations and travel
centers operated by the Company or one of its Subsidiaries), or held by a bailee
or otherwise subject to any third party interest, with respect to which any
landlord's waiver or other third party agreement requested by Secured Party or
the Majority Lenders shall not have been furnished, and (c) Feedstocks,
Intermediate Products and Refined Products of any Subsidiary with respect to
which any event described in SUBSECTION 9.01(f) or (g) shall have occurred and
be continuing), owned by the Company and its Subsidiaries (other than "inactive"
Subsidiaries) in field production tanks, storage tanks and lines (including line
fills but excluding basic sediment and water and slop oil), stored at the
Bloomfield Refinery, the Ciniza Refinery, the Yorktown Refinery, the Company's
or its Subsidiaries' bulk plants, service stations and travel centers (excluding
cardlocks), the Albuquerque Terminal, the Flagstaff Terminal and other Refined
Products terminals owned or leased by the Company or its Subsidiaries, or at
such other locations as may be approved from time to time by the Majority
Lenders, provided, however, that such Feedstocks, Intermediate Products and
Refined Products are not obsolete, unsalable, damaged or otherwise unfit for
sale or further processing in the ordinary course of business or otherwise
unsatisfactory to the Administrative Agent or the Majority Lenders using
reasonable business judgment.

                  "ELIGIBLE LUBRICANTS INVENTORY" means, at any date, the
aggregate value therefor on a FIFO basis calculated in accordance with GAAP of
all readily marketable, saleable and useful Lubricants (excluding (a) any and
all Lubricants in which the Lenders do not have a valid and perfected first
priority security interest, except that such security interest may be subject to
statutory Liens in respect of First Purchase Crude Payables that are not
delinquent; (b) any and all Lubricants located on leased premises or held by a
bailee or otherwise subject to any third party interest, with respect to which
any landlord's waiver or other third party agreement requested by Secured Party
or the Majority Lenders shall not have been furnished, and (c) Lubricants of any
Subsidiary with respect to which any event described in SUBSECTION 9.01(f) or
(g) shall have occurred and be continuing), owned by the Company and its
Subsidiaries (other than "inactive" Subsidiaries) in field production tanks,
storage tanks and lines (including line fills but excluding basic sediment and
water and slop oil), stored at the Bloomfield Refinery, the Ciniza Refinery, the
Yorktown Refinery, the Company's or its Subsidiaries' bulk plants, service
stations and travel centers (excluding cardlocks), the Albuquerque Terminal, the
Flagstaff Terminal and other Lubricants terminals owned or leased by the Company
or its Subsidiaries, or at such other locations as may be approved from time to
time by the Majority Lenders, provided, however, that such Lubricants are not
obsolete, unsalable, damaged or otherwise unfit for sale or further processing
in the ordinary course of business or otherwise unsatisfactory to the
Administrative Agent or the Majority Lenders using reasonable business judgment.

                  "ENVIRONMENTAL CLAIMS" means any and all actions, suits,
demands, demand letters, claims, complaints, notices of non-compliance or
violation, enforcement actions, investigations, or proceedings, relating in any
way to (a) the presence, alleged presence, or use of any Hazardous Substance on,
under, or about any property or assets of the Company or any of its Subsidiaries
or the migration or alleged migration of Hazardous Substances to or from such
property regardless of the source of such migration or when such migration
occurred or when such presence is discovered; (b) the Release or threatened
Release of any Hazardous Substance on, under, to or from any property or assets
of the Company or any of its Subsidiaries regardless of the source of such
Release or when such Release occurred; or (c) the violation of any Environmental
Law, regardless of whether the existence or alleged existence of such Hazardous
Substance or the violation of Environmental Law arose prior to the Company's or
its Subsidiary's ownership or operation of the subject property. "Environmental
Claims" includes, without limitation, any and all claims by any third party
seeking damages, contribution,


                                     - 9 -

indemnification, cost recovery, compensation or injunctive relief or any other
form of recovery arising in connection with any Hazardous Substance or arising
from alleged injury or threat of injury to property, human health or the
environment or from any nuisance condition.

                  "ENVIRONMENTAL DAMAGES" means (a) all costs and expenses of
investigation and defense of any Environmental Claim, regardless of whether such
Environmental Claim is ultimately defeated, and of any good faith settlement or
agreed judgment, including, without limitation, Attorney Costs, the allocated
cost of internal environmental audit or review, and consultants' fees; (b)
damages for personal injury or injury to or interference with property or
natural resources occurring on, under, or off of property of the Company or any
Subsidiary; (c) all costs, including without limitation Attorney Costs, the
allocated cost of internal environmental audit or review, consultants,
contractors, experts, and laboratories, incurred in connection with the
investigation of the presence or alleged presence of Hazardous Substances on,
about, under, or from property of the Company or any Subsidiary, or the removal
or remediation (including monitoring) of any Hazardous Substances; (d)
diminution in the value of property; and (e) all fines and penalties or other
liabilities arising from the violation of any Environmental Law.

                  "ENVIRONMENTAL LAW" means all applicable federal, state, and
local laws, statutes, rules, regulations, codes, ordinances, legally binding
guidance documents, rules of common law, legally binding directives or orders
("LAWS") of any Governmental Authority having jurisdiction over the Company or
any of its Subsidiaries, any of their respective properties, or any user or
occupant of property of the Company or any Subsidiary, relating to the
protection of human health, safety, public welfare, or the environment, now
existing or hereafter adopted, including without limitation, Laws relating to
the generation, processing, treatment, investigation, remediation, storage,
transport, disposal, management, handling, and use of Hazardous Substances, and
those relating to the protection of environmentally sensitive areas.

                  "ENVIRONMENTAL PERMITS" means all permits, approvals,
identification numbers, licenses, notifications, registrations and other
authorizations required under any applicable Environmental Laws.

                  "ERISA" means the Employee Retirement Income Security Act of
1974, and regulations promulgated thereunder.

                  "ERISA AFFILIATE" means any trade or business (whether or not
incorporated) under common control with the Company within the meaning of
Section 414(b) or (c) of the Code (and Sections 414(m) and (o) of the Code for
purposes of provisions relating to Section 412 of the Code).

                  "ERISA EVENT" means (a) a Reportable Event with respect to a
Pension Plan; (b) a withdrawal by the Company or any ERISA Affiliate from a
Pension Plan subject to Section 4063 of ERISA during a plan year in which it was
a substantial employer (as defined in Section 4001(a)(2) of ERISA) or a
cessation of operations which is treated as such a withdrawal under Section
4062(e) of ERISA; (c) a complete or partial withdrawal by the Company or any
ERISA Affiliate from a Multiemployer Plan or notification that a Multiemployer
Plan is in reorganization; (d) the filing of a notice of intent to terminate,
the treatment of a Plan amendment as a termination under Section 4041(c) or
4041A of ERISA, or the commencement of proceedings by the PBGC to terminate a
Pension Plan or Multiemployer Plan; (e) an event or condition which might
reasonably be expected to constitute grounds under Section 4042 of ERISA for the
termination of, or the appointment of a trustee to administer, any Pension Plan
or Multiemployer Plan; or (f) the imposition of any material liability under
Title IV of ERISA, other than PBGC premiums due but not delinquent under Section
4007 of ERISA, upon the Company or any ERISA Affiliate.


                                     - 10 -

                  "ESCROW ARRANGEMENT" means an escrow or similar arrangement in
form and substance satisfactory to the Administrative Agent, pursuant to which
funds are irrevocably deposited in an amount sufficient to redeem the NBD
Subordinated Notes in full.

                  "EURODOLLAR RESERVE PERCENTAGE" has the meaning specified in
the definition of "Offshore Rate."

                  "EVENT OF DEFAULT" means any of the events or circumstances
specified in SECTION 9.01.

                  "EXCHANGE ACT" means the Securities and Exchange Act of 1934,
as amended, and regulations promulgated thereunder.

                  "EXECUTION DATE" means the date specified on the cover page
hereof.

                  "EXISTING CREDIT AGREEMENT" is defined in the recitals hereof.

                  "EXISTING LETTERS OF CREDIT" means the letters of credit
described in SCHEDULE 3.03.

                  "FDIC" means the Federal Deposit Insurance Corporation, and
any Governmental Authority succeeding to any of its principal functions.

                  "FEDERAL FUNDS RATE" means, for any day, the rate per annum
(rounded upwards to the nearest 1/100 of 1%) equal to the weighted average of
the rates on overnight federal funds transactions with members of the Federal
Reserve System arranged by federal funds brokers on such day, as published by
the Federal Reserve Bank on the Business Day next succeeding such day; provided
that (a) if such day is not a Business Day, the Federal Funds Rate for such day
shall be such rate on such transactions on the next preceding Business Day as so
published on the next succeeding Business Day, and (b) if no such rate is so
published on such next succeeding Business Day, the Federal Funds Rate for such
day shall be the average rate charged to Bank of America on such day on such
transactions as determined by the Administrative Agent.

                  "FEE LETTER" has the meaning specified in SUBSECTION 2.09(a).

                  "FEEDSTOCKS" means all crude oil, natural gas liquids, other
hydrocarbons valued at the lower of cost or market crude oil prices and ethanol
valued at the lower of cost or market, in so far as such Feedstocks are used or
useful as fuel or in the manufacture, processing, refining, or blending of
Intermediate Products and Refined Products at the Bloomfield Refinery, the
Ciniza Refinery, or the Yorktown Refinery.

                  "FIRST PURCHASE CRUDE PAYABLES" means the unpaid amount of any
payable obligation of the Company or any of its Subsidiaries related to the
purchase of Feedstocks by the Company or any of its Subsidiaries which are (in
the judgment of the Administrative Agent) secured by a statutory Lien, which
shall include but not be limited to the statutory Liens created under the Laws
of Texas, New Mexico, Wyoming, Kansas, and Oklahoma, to the extent such payable
obligation is not at the time in question covered by a Letter of Credit issued
hereunder.

                  "FIXED CHARGE COVERAGE RATIO" means, as of any date of
determination, the ratio of (a) the sum, without duplication, of (i)
Consolidated EBITDA for the period of four fiscal quarters ending on such date,
plus (ii) Consolidated Rents for such period, plus (iii) to the extent excluded
in the calculation of Consolidated EBITDA, Margin Payments made by the Company
under the Yorktown Asset Purchase Agreement during such period, minus (iv)
Capital Expenditures during such period (excluding Margin


                                     - 11 -

Payments treated as Capital Expenditures), minus (v) all taxes measured by
income and paid in cash during such period, to (b) the sum, without duplication,
of (i) Consolidated Interest Expense during such period, plus (ii) Consolidated
Rents during such period, plus (iii) scheduled amortization of the Company's and
its Subsidiaries' Indebtedness during such period, plus (iv) Margin Payments
made by the Company under the Yorktown Asset Purchase Agreement during such
period. With respect to Indebtedness incurred in connection with the Yorktown
Acquisition (including Loans hereunder), Consolidated Interest Expense shall be
calculated on a pro forma basis for the four fiscal quarters most recently ended
as if such Indebtedness had been incurred on the first day of such period.

                  "FLAGSTAFF TERMINAL" means the terminal in or near Flagstaff,
Arizona, owned and operated by Giant Mid-Continent.

                  "FRB" means the Board of Governors of the Federal Reserve
System, and any Governmental Authority succeeding to any of its principal
functions.

                  "FRONTING FEE" has the meaning set forth in SECTION 3.08(b).

                  "FUND" means any Person (other than a natural person) that is
(or will be) engaged in making, purchasing, holding or otherwise investing in
commercial loans and similar extensions of credit in the ordinary course of its
business.

                  "GAAP" means generally accepted accounting principles set
forth from time to time in the opinions and pronouncements of the Accounting
Principles Board and the American Institute of Certified Public Accountants and
statements and pronouncements of the Financial Accounting Standards Board (or
agencies with similar functions of comparable stature and authority within the
U.S. accounting profession), which are applicable to the circumstances as of the
date of determination.

                  "GIANT ARIZONA" means Giant Industries Arizona, Inc., an
Arizona corporation.

                  "GIANT MID-CONTINENT" means Giant Mid-Continent, Inc., an
Arizona corporation and a Wholly-Owned Subsidiary of Giant Arizona.

                  "GIANT YORKTOWN" means Giant Yorktown, Inc., a Delaware
corporation and a Wholly-Owned Subsidiary of Giant Arizona.

                  "GOVERNMENTAL AUTHORITY" means any nation or government, any
state or other political subdivision thereof, any central bank (or similar
monetary or regulatory authority) thereof, any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government, and any corporation or other entity owned or controlled, through
stock or capital ownership or otherwise, by any of the foregoing.

                  "GUARANTOR" means (a) as of the Closing Date, each of Giant
Arizona, Giant Four Corners, Inc., an Arizona corporation, San Juan Refining
Company, a New Mexico corporation, Giant Mid-Continent, Giant Stop-N-Go of New
Mexico, Inc., a New Mexico corporation, Phoenix Fuel Co., Inc., an Arizona
corporation, Giant Yorktown, Inc., a Delaware corporation, and (b) any other
Subsidiary of the Company which is required to execute a Guaranty under SECTION
7.12.

                  "GUARANTY" means collectively each of the Second Amended and
Restated Guarantees substantially in the form of EXHIBIT G hereto executed by
each of the Guarantors in favor of the Administrative Agent and the Lenders, as
they may be amended, supplemented or otherwise modified from time to time, and
any other guaranty agreements delivered pursuant to this Agreement.


                                     - 12 -

                  "GUARANTY OBLIGATION" has the meaning specified in the
definition of "Contingent Obligation."

                  "HAZARDOUS SUBSTANCE" means any substance that poses a threat
to, or is regulated to protect, human health, safety, public welfare, or the
environment, including without limitation: (a) any "hazardous substance,"
"pollutant" or "contaminant," and any "petroleum" or "natural gas liquids" as
those terms are defined or used under Section 101 of the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended ( 42
U.S.C. Sections 9601 et seq.) ("CERCLA"), (b) "solid waste" as defined by
the federal Solid Waste Disposal Act (42 U.S.C. Sections 6901 et seq.),
(c) asbestos or a material containing asbestos, (d) any material that contains
lead or lead-based paint, (e) any item or equipment that contains or is
contaminated by polychlorinated biphenyls, (f) any radioactive material, (g)
urea formaldehyde, (h) putrescible materials, (i) infectious materials, (j)
toxic microorganisms, including mold, or (k) any substance the presence or
Release of which requires reporting, investigation or remediation under any
Environmental Law.

                  "HIGHEST LAWFUL RATE" means, as of a particular date, the
maximum nonusurious interest rate that may under applicable federal and state
law then be contracted for, charged or received by the Lenders in connection
with the Loans.

                  "HONOR DATE" has the meaning specified in SUBSECTION 3.03(c).

                  "INDEBTEDNESS" of any Person means, without duplication, (a)
all indebtedness for borrowed money; (b) all obligations issued, undertaken or
assumed as the deferred purchase price of property or services (other than trade
payables entered into in the ordinary course of business on ordinary terms); (c)
all direct or contingent reimbursement or payment obligations with respect to
Surety Instruments; (d) all obligations evidenced by notes, bonds, debentures or
similar instruments, including obligations so evidenced incurred in connection
with the acquisition of property, assets or businesses; (e) all indebtedness
created or arising under any conditional sale or other title retention
agreement, or incurred as financing, in either case with respect to property
acquired by the Person (even though the rights and remedies of the seller or
bank under such agreement in the event of default are limited to repossession or
sale of such property); (f) all obligations with respect to Capital Leases; (g)
all obligations with respect to "off-balance sheet" obligations(but not
including any operating lease under which aggregate rentals during the term
thereof is less than $500,000); (h) all net obligations under any Swap Contract
in an amount equal to (i) if such Swap Contract has been closed out the
termination value thereof, or (ii) if such Swap Contract has not been closed
out, the mark-to-market value thereof determined on the basis of readily
available quotations provided by any recognized dealer in such Swap Contract;
(i) all indebtedness referred to in CLAUSES (a) through (h) above secured by (or
for which the holder of such Indebtedness has an existing right, contingent or
otherwise, to be secured by) any Lien upon or in property (including accounts
and contracts rights) owned by such Person, even though such Person has not
assumed or become liable for the payment of such Indebtedness; and (j) all
Guaranty Obligations in respect of indebtedness or obligations of others of the
kinds referred to in CLAUSES (a) through (h) above.

                  "INDEMNIFIED LIABILITIES" has the meaning specified in SECTION
11.05.

                  "INDEMNIFIED PERSON" has the meaning specified in SECTION
11.05.

                  "INDENTURES" means the BNY $150,000,000 Indenture and the BNY
$200,000,000 Indenture, and any other Indentures pursuant to which other
Subordinated Notes are issued.

                  "INDEPENDENT AUDITOR" has the meaning specified in SUBSECTION
7.01(a).


                                     - 13 -

                  "INSOLVENCY PROCEEDING" means (a) any case, action or
proceeding relating to bankruptcy, reorganization, insolvency, liquidation,
receivership, dissolution, winding-up or relief of debtors, or (b) any general
assignment for the benefit of creditors, composition, marshalling of assets for
creditors, or other, similar arrangement in respect of its creditors generally
or any substantial portion of its creditors; undertaken under U.S. federal,
state or foreign law, including the Bankruptcy Code.

                  "INTEREST PAYMENT DATE" means, as to any Loan other than a
Base Rate Loan, the last day of each Interest Period applicable to such Loan
and, as to any Base Rate Loan, the last Business Day of each calendar quarter
and each date such Loan is converted into another Interest Rate Type of Loan,
provided, however, that if any Interest Period for an Offshore Rate Loan exceeds
three months, the date that falls three months after the beginning of such
Interest Period, and the date that falls three months after each Interest
Payment Date thereafter for such Interest Period, is also an Interest Payment
Date.

                  "INTEREST PERIOD" means, as to any Offshore Rate Loan, the
period commencing on the Borrowing Date of such Loan or on the
Conversion/Continuation Date on which the Loan is converted into or continued as
an Offshore Rate Loan, and ending on the date one, two, three or six months
thereafter as selected by the Company in its Notice of Borrowing or Notice of
Conversion/Continuation; provided that: (i) if any Interest Period would
otherwise end on a day that is not a Business Day, that Interest Period shall be
extended to the following Business Day unless, in the case of an Offshore Rate
Loan, the result of such extension would be to carry such Interest Period into
another calendar month, in which event such Interest Period shall end on the
preceding Business Day; (ii) any Interest Period pertaining to an Offshore Rate
Loan that begins on the last Business Day of a calendar month (or on a day for
which there is no numerically corresponding day in the calendar month at the end
of such Interest Period) shall end on the last Business Day of the calendar
month at the end of such Interest Period; and (iii) no Interest Period for any
Revolving Loan shall extend beyond the Termination Date.

                  "INTEREST RATE TYPE" means either the Base Rate of interest or
the Offshore Rate of interest charged against any Loan or Loans hereunder.

                  "INTERMEDIATE PRODUCTS" means all Feedstocks that have been
partially processed or refined as isomerate, cat feed, gasoline components or
naphtha and valued at the lower of cost or market crude oil prices.

                  "INVESTMENT ACCOUNT CONTROL AGREEMENT" means an Investment
Account Control Agreement in form and substance substantially similar to the
Deposit Account Control Agreement, or any other agreement in form and substance
satisfactory to the Administrative Agent serving a similar purpose, among the
Company, the Administrative Agent, and a Broker.

                  "IRS" means the Internal Revenue Service, and any Governmental
Authority succeeding to any of its principal functions under the Code.

                  "ISSUANCE DATE" has the meaning specified in SUBSECTION
3.01(a).

                  "ISSUE" means, with respect to any Letter of Credit, to
incorporate the Existing Letters of Credit into this Agreement, or to issue or
to extend the expiry of, or to renew or increase the amount of, such Letter of
Credit; and the terms "ISSUED," "ISSUING" and "ISSUANCE" have corresponding
meanings.

                  "ISSUING BANK" means Bank of America, in its capacity as
issuer of one or more Letters of Credit hereunder and as the issuer of Existing
Letters of Credit, together with any successor replacement letter of credit
issuer pursuant to SECTION 10.09.


                                     - 14 -




            "L/C ADVANCE" means each Lender's participation in any L/C Borrowing
in accordance with its Pro Rata Share.

            "L/C APPLICATION" and "L/C AMENDMENT APPLICATION" means an
application form for Issuance of, or for amendment of, Letters of Credit as
shall at any time be in use at the Issuing Bank.

            "L/C BORROWING" means an extension of credit resulting from a
drawing under any Letter of Credit which shall not have been reimbursed on the
date when made in accordance with SUBSECTION 3.03(b) nor converted into a
Borrowing of Revolving Loans under SUBSECTION 3.03(c).

            "L/C COMMITMENT" means the commitment of the Issuing Bank to Issue,
and the commitment of the Lenders severally to participate in, Letters of Credit
(including the Existing Letters of Credit) from time to time Issued or
outstanding under ARTICLE III, in an aggregate amount not to exceed on any date
the lesser of (a) the amount of $25,000,000 and (b) the combined Commitments, as
the same may be reduced as a result of a reduction in the Commitments pursuant
to SECTION 2.05; provided that the L/C Commitment is a part of the combined
Commitments, rather than a separate, independent commitment.

            "L/C OBLIGATIONS" means at any time the sum of (a) the aggregate
undrawn amount of all Letters of Credit then outstanding, plus (b) the amount of
all unreimbursed drawings under all Letters of Credit, including all outstanding
L/C Borrowings.

            "L/C-RELATED DOCUMENTS" means the Letters of Credit, the L/C
Applications, the L/C Amendment Applications and any other document relating to
any Letter of Credit, including any of the Issuing Bank's standard form
documents for letter of credit issuances.

            "LENDER" has the meaning specified in the introductory clause
hereto. References to the "Lenders" shall include Bank of America, including in
its capacity as Issuing Bank; for purposes of clarification only, to the extent
that Bank of America may have any rights or obligations in addition to those of
the Lenders due to its status as Issuing Bank, its status as such will be
specifically referenced.

            "LENDING OFFICE" means, as to any Lender, the office or offices of
such Lender specified as its "Lending Office" or "Domestic Lending Office" or
"Offshore Lending Office," or similar designation, as the case may be, in its
Administrative Questionnaire, or such other office or offices as such Lender may
from time to time notify the Company and the Administrative Agent.

            "LETTERS OF CREDIT" means the Existing Letters of Credit and any
standby letters of credit Issued by the Issuing Bank pursuant to ARTICLE III.

            "LIEN" means any security interest, mortgage, deed of trust, pledge,
hypothecation, assignment, charge or deposit arrangement, encumbrance, lien
(statutory or other) or preferential arrangement of any kind or nature
whatsoever in respect of any property (including those created by, arising under
or evidenced by any conditional sale or other title retention agreement, the
interest of a lessor under a Capital Lease, any financing lease having
substantially the same economic effect as any of the foregoing, or the filing of
any financing statement naming the owner of the asset to which such lien relates
as debtor, under the Uniform Commercial Code or any comparable law) and any
contingent or other agreement to provide any of the foregoing, but not including
the interest of a lessor under an Operating Lease.

            "LOAN" means an extension of credit by a Lender to the Company under
ARTICLE II or ARTICLE III in the form of a Revolving Loan or L/C Advance.


                                      -15-

            "LOAN DOCUMENTS" means this Agreement, the Notes, the Collateral
Documents, the Fee Letter, the L/C-Related Documents, the Deposit Control
Agreements, the Investment Account Control Agreements, the Yorktown
Intercreditor Agreement, and all other documents executed in connection herewith
in favor of the Administrative Agent or any Lender.

            "LOAN PARTY" means the Company, each Guarantor, and each of the
Company's Subsidiaries that executes a Collateral Document.

            "LUBRICANTS" means motor oil, hydraulic oil, gear oil, cutting oil,
grease, and various chemicals and solvents of a similar nature valued at the
lower of cost or market prices. For avoidance of doubt, Lubricants are not
Feedstocks, Intermediate Products or Refined Products.

            "MAJORITY LENDERS" means at any time Lenders then holding at least
66-2/3% of the then aggregate unpaid principal amount of the Loans, or, if no
such principal amount is then outstanding, Lenders then having at least 66-2/3%
of the Commitments.

            "MARGIN PAYMENTS" means the amounts payable by the Company to the
Yorktown Seller under Section 3(e) of the Yorktown Asset Purchase Agreement (as
in effect on the effective date thereof).

            "MARGIN STOCK" means "margin stock" as such term is defined in
Regulation T, U or X of the FRB.

            "MATERIAL ADVERSE EFFECT" means (a) a material adverse change in, or
a material adverse effect upon, the operations, business, properties,
liabilities (actual or contingent), capitalization, or condition (financial or
otherwise) of the Company and its Subsidiaries taken as a whole; (b) a material
impairment of the ability of the Company or any Significant Subsidiary to
perform under any Loan Document and to avoid any Event of Default; or (c) a
material adverse effect upon (i) the legality, validity, binding effect or
enforceability against the Company or any Significant Subsidiary of any Loan
Document or (ii) the perfection or priority of any Lien granted under any of the
Collateral Documents.

            "MATERIAL SUBSIDIARY" means, at any time, a Subsidiary with total
assets with a book value of $2,000,000 or more.

            "MOODY'S" means Moody's Investor Service, Inc.

            "MULTIEMPLOYER PLAN" means a "multiemployer plan," within the
meaning of Section 4001(a)(3) of ERISA, to which the Company or any ERISA
Affiliate makes, is making, or is obligated to make contributions or, during the
preceding three calendar years, has made, or been obligated to make,
contributions.

            "NBD INDENTURE" means that certain Indenture dated November 29,
1993, between the Company, as Issuer, NBD Bank, National Association (now known
as Bank One Trust Company, N.A.) ("NBD BANK"), as Trustee, and others evidenced
by the NBD Subordinated Notes.

            "NBD SUBORDINATED NOTES" means the $100,000,000 9-3/4% Senior
Subordinated Notes due 2003 issued by the Company under the NBD Indenture, to be
refinanced, pursuant to the Escrow Arrangement established on the Closing Date,
with the proceeds of the BNY $200,000,000 Subordinated Notes.

            "NOTE" means a promissory note executed by the Company in favor of a
Lender pursuant to SECTION 2.02 (b) or SECTION 11.07, in substantially the form
of EXHIBIT F hereto.


                                      -16-

            "NOTICE OF BORROWING" means a notice in substantially the form of
EXHIBIT A hereto.

            "NOTICE OF CONVERSION/CONTINUATION" means a notice in substantially
the form of EXHIBIT B hereto.

            "OBLIGATIONS" means all advances, debts, liabilities, obligations,
covenants and duties arising under any Loan Document owing by the Company or any
Guarantor to any Lender, any Affiliate of a Lender, the Administrative Agent, or
any Indemnified Person, whether direct or indirect (including those acquired by
assignment), absolute or contingent, due or to become due, now existing or
hereafter arising, provided that all references to the "Obligations" in the
Collateral Documents and in SECTIONS 2.13, 2.15(d) and 11.09 shall, in addition
to the foregoing, also include all present and future indebtedness, liabilities
and obligations now or hereafter owed to any Lender or any Affiliate of a Lender
arising from, by virtue of or pursuant to any Specified Swap Contracts by the
Company or any Subsidiary of the Company.

            "OFFSHORE RATE" means, for any Interest Period, with respect to
Offshore Rate Loans comprising part of the same Borrowing, the rate of interest
per annum (rounded upward to the next 1/16th of 1%) determined by the
Administrative Agent as follows:

                  Offshore Rate =               LIBOR
                                    ------------------------------------
                                    1.00 - Eurodollar Reserve Percentage

                  Where

                  "EURODOLLAR RESERVE PERCENTAGE" means for any day for any
      Interest Period the maximum reserve percentage (expressed as a decimal,
      rounded upward to the next 1/100th of 1%) in effect on such day (whether
      or not applicable to any Lender) under regulations issued from time to
      time by the FRB for determining the maximum reserve requirement (including
      any emergency, supplemental or other marginal reserve requirement) with
      respect to Eurocurrency funding (currently referred to as "Eurocurrency
      liabilities"); and

                  "LIBOR" means, for such Interest Period:

                  (a) the rate per annum equal to the rate determined by the
            Administrative Agent to be the offered rate that appears on the page
            of the Telerate screen (or any successor thereto) that displays an
            average British Bankers Association Interest Settlement Rate for
            deposits in Dollars (for delivery on the first day of such Interest
            Period) with a term equivalent to such Interest Period, determined
            as of approximately 11:00 a.m. (London time) two Business Days prior
            to the first day of such Interest Period, or

                  (b) in the event the rate referenced in the preceding
            SUBSECTION (a) does not appear on such page or service or such page
            or service shall cease to be available, the rate per annum equal to
            the rate determined by the Administrative Agent to be the offered
            rate on such other page or other service that displays an average
            British Bankers Association Interest Settlement Rate for deposits in
            Dollars (for delivery on the first day of such Interest Period) with
            a term equivalent to such Interest Period, determined as of
            approximately 11:00 a.m. (London time) two Business Days prior to
            the first day of such Interest Period, or


                                      -17-

                  (c) in the event the rates referenced in the preceding
            SUBSECTIONS (a) and (b) are not available, the rate per annum
            determined by the Administrative Agent as the rate of interest
            (rounded upward to the next 1/100th of 1%) at which deposits in
            Dollars for delivery on the first day of such Interest Period in
            same day funds in the approximate amount of the Offshore Rate Loan
            being made, continued or converted by Bank of America and with a
            term equivalent to such Interest Period would be offered by Bank of
            America's London Branch to major banks in the offshore Dollar market
            at their request at approximately 11:00 a.m. (London time) two
            Business Days prior to the first day of such Interest Period.

The Offshore Rate shall be adjusted automatically as to all Offshore Rate Loans
then outstanding as of the effective date of any change in the Eurodollar
Reserve Percentage.

            "OFFSHORE RATE LOAN" means a Loan that bears interest based on the
Offshore Rate.

            "OPERATING LEASE" means an operating lease determined in accordance
with GAAP.

            "ORGANIZATION DOCUMENTS" means, for any corporation, the certificate
or articles of incorporation, the bylaws, any certificate of determination or
instrument relating to the rights of preferred shareholders of such corporation,
any shareholder rights agreement, and all applicable resolutions of the board of
directors (or any committee thereof) of such corporation.

            "ORIGINAL CREDIT AGREEMENT" is defined in the recitals hereof.

            "OTHER TAXES" means any present or future stamp, court or
documentary taxes or any other excise or property taxes, charges or similar
levies which arise from any payment made hereunder or from the execution,
delivery, performance, enforcement or registration of, or otherwise with respect
to, this Agreement or any other Loan Documents, excluding, in the case of each
Lender and the Administrative Agent, such taxes (including income taxes or
franchise taxes) as are imposed on or measured by each Lender's net income by
(i) any jurisdiction (or any political subdivision thereof) under the laws of
which such Lender or the Administrative Agent, as the case may be, is organized
or maintains a Lending Office or (ii) any jurisdiction (or political subdivision
thereof) in which such Lender or the Administrative Agent, as the case may be,
is "doing business" (unless it would not be deemed to be "doing business" in
such jurisdiction absent the transactions contemplated hereby).

            "PARTICIPANT" has the meaning specified in SUBSECTION 11.07(d).

            "PBGC" means the Pension Benefit Guaranty Corporation, or any
Governmental Authority succeeding to any of its principal functions under ERISA.

            "PENSION PLAN" means any "employee pension benefit plan" (as defined
in Section 3(2) of ERISA) subject to Title IV of ERISA, other than a
Multiemployer Plan, which the Company or any of its Subsidiaries or any of their
respective ERISA Affiliates sponsors, maintains, or to which it makes, is
making, or is obligated to make contributions, or in the case of a multiple
employer plan (as described in Section 4064(a) of ERISA) has made contributions
at any time during the immediately preceding five (5) plan years.

            "PERMITTED LIENS" has the meaning set forth in SECTION 8.01.


                                      -18-

            "PERSON" means an individual, partnership, corporation, limited
liability company, business trust, joint stock company, trust, unincorporated
association, joint venture or Governmental Authority.

            "PHOENIX" means Phoenix Fuel Co., Inc., an Arizona corporation.

            "PLAN" means an employee benefit plan (as defined in Section 3(3) of
ERISA) established by the Company or any ERISA Affiliate.

            "PREFERRED ELIGIBLE ACCOUNT OBLIGOR" means any Person (a) from which
the Eligible Accounts Receivables are fully supported by a standby letter of
credit issued by a commercial bank organized under the laws of the United States
having an "A2/A" rating or better by Moody's and S&P, respectively, or (b) that
is major international oil or other company rated "A2/A" or better by Moody's
and S&P, respectively, or a Wholly-Owned Subsidiary of such company whose
obligations are guaranteed by such company, and is identified by the Company on
SCHEDULE 1.01 hereof, as may be amended from time to time with the approval of
the Majority Lenders.

            "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, 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.

            "PRO RATA SHARE" means, as to any Lender at any time, the percentage
equivalent (expressed as a decimal, rounded to the ninth decimal place) at such
time of (a) such Lender's Commitment, divided by (b) the combined Commitments of
all Lenders.

            "RECEIVABLES" shall mean, as to the Company or any of its
Subsidiaries (other than "inactive" Subsidiaries), all accounts receivable,
whether billed or unbilled, arising out of the sale of inventory in the ordinary
course of business.
            "REFINED PRODUCTS" means all gasoline, diesel, aviation fuel, fuel
oil, propane, ethanol, transmix and other products processed, refined or blended
from Feedstocks and Intermediate Products valued at the lower of cost or market
prices.

            "REFINERY ASSETS" means, with respect to Giant Yorktown, (a) the
Yorktown Refinery, and equipment used in connection therewith, and (b) rights
under contracts relating to the use or operation of the Yorktown Refinery.

            "REFINERY INVENTORY BORROWING BASE COMPONENT" has the meaning set
forth in SECTION 2.07(a).

            "REGULATION U" and "REGULATION X" means Regulation U and Regulation
X, respectively, of the Board of Governors of the Federal Reserve System from
time to time in effect and shall include any successor or other regulations or
official interpretations of said Board of Governors relating to the subject
matter addressed therein.

            "RELATED PARTIES" means, with respect to any specified Person, such
Person's Affiliates and the respective directors, officers, employees, agents
and advisors of such Person and such Person's Affiliates.


                                      -19-

            "RELEASE" means any depositing, spilling, leaking, pumping, pouring,
emitting, emptying, discharging, injecting, escaping, leaching, dumping,
migration, or disposing.

            "REPORTABLE EVENT" means, any of the events set forth in Section
4043(c) of ERISA or the regulations thereunder, other than any such event for
which the 30-day notice requirement under ERISA has been waived in regulations
issued by the PBGC.

            "REQUIREMENT OF LAW" means, as to any Person, any law (statutory or
common), treaty, rule or regulation or determination of an arbitrator or of a
Governmental Authority, in each case applicable to or binding upon the Person or
any of its property or to which the Person or any of its property is subject,
including without limitation Environmental Laws.

            "RESPONSIBLE OFFICER" means the officers of the Company with the
following titles: (i) president; (ii) executive vice president; (iii) vice
president and chief financial officer; and (iv) vice president and chief
accounting officer.

            "REVOLVING LOAN" has the meaning specified in SECTION 2.01.

            "RISK PARTICIPATION FEE" has the meaning set forth in SUBSECTION
3.08(a).

            "S&P" means Standard & Poor's Ratings Group, a Division of
McGraw-Hill, Inc., a New York corporation.

            "SAN JUAN" means San Juan Refining Company, a New Mexico
corporation.

            "SEC" means the Securities and Exchange Commission, or any
Governmental Authority succeeding to any of its principal functions.

            "SECURITY AGREEMENT" means collectively each of the Second Amended
and Restated Pledge, Assignment and Security Agreements and the Amended and
Restated Pledge, Assignment and Security Agreements, substantially in the form
of EXHIBITS I-1 and I-2 hereto, executed by the Company and certain Subsidiaries
in favor of the Administrative Agent and the Lenders, as they may be amended,
supplemented or otherwise modified from time to time, and any other security
agreements now or hereafter delivered pursuant to this Agreement.

            "SENIOR LEVERAGE RATIO" means, as of any date, the ratio of (a)
Consolidated Senior Indebtedness as of the determination date to (b)
Consolidated EBITDA for the four fiscal quarters ending on such date, or if such
date is not the last day of a fiscal quarter, ending on the last day of the
fiscal quarter most recently ended.

            "SIGNIFICANT SUBSIDIARY" means (a) Giant Arizona, (b) San Juan, (c)
Phoenix, (d) Giant Yorktown, and (e) any other Subsidiary of the Company having
total assets at or immediately prior to the time in question with a book value
of $10,000,000 or more.

            "SOLVENT" means, as to any Person at any time, that (a) the fair
value of all of the property of such Person is greater than the amount of such
Person's liabilities (including disputed, contingent and unliquidated
liabilities) as such value is established and liabilities evaluated for purposes
of Section 101(32) of the Bankruptcy Code; (b) the present fair saleable value
of all of the property of such Person is not less than the amount that will be
required to pay the probable liability of such Person on its debts as they
become absolute and matured; (c) such Person does not intend to, and does not
believe that it will, incur debts or liabilities beyond such Person's ability to
pay as such debts and liabilities mature; and (d)


                                      -20-

such Person is not engaged in business or a transaction, and is not about to
engage in business or a transaction, for which such Person's property would
constitute unreasonably small capital.

            "SPECIFIED SWAP CONTRACTS" means all Swap Contracts made or entered
into at any time, or in effect at any time, whether directly or indirectly, and
whether as a result of assignment or transfer or otherwise, between the Company
or any Subsidiary and any Swap Provider, which Swap Contract is or was intended
by the Company or such Subsidiary to have been entered into, in part or
entirely, for purposes of mitigating interest rate or currency exchange risk
relating to any liabilities owed or credit facilities in effect and not for the
purposes of financing, speculation or taking a "market view" (which intent shall
conclusively be deemed to exist if the Company or such Subsidiary so represents
to the Swap Provider in writing) and as to which the final scheduled payment by
the Company or its Subsidiary is not later than the Termination Date.

            "SUBORDINATED NOTES" means (i) the BNY $150,000,000 Subordinated
Notes issued under the BNY $150,000,000 Indenture, (ii) the BNY $200,000,000
Subordinated Notes issued under the BNY $200,000,000 Indenture and (iii) such
other notes as may be issued from time to time by the Company after the
Execution Date containing terms, and issued pursuant to an Indenture containing
terms, satisfactory to the Administrative Agent and the Majority Lenders, and
which are subordinated on terms and conditions satisfactory to the
Administrative Agent and the Majority Lenders, in their sole discretion, to all
Obligations, whether now existing or hereafter incurred. Notes shall not be
considered "Subordinated Notes" unless and until the Administrative Agent shall
have received copies of the documentation evidencing or relating to such notes
evidencing the terms and conditions of subordination required by the
Administrative Agent and the Majority Lenders.

            "SUBSIDIARY" of a Person means any corporation, association,
partnership, limited liability company, joint venture or other business entity
of which more than 50% of the voting stock, membership interests or other equity
interests (in the case of Persons other than corporations) is owned or
controlled directly or indirectly by the Person, or one or more of the
Subsidiaries of the Person, or a combination thereof. Unless the context
otherwise clearly requires, references herein to a "Subsidiary" refer to a
Subsidiary of the Company.

            "SUPPLEMENTAL GUARANTY" means an agreement, in substantially the
form attached to the Guaranty, pursuant to which the Person executing the same
elects to become a Guarantor for purposes of the Credit Agreement and agrees to
perform all of the obligations of a Guarantor under, and to be bound in all
respects by the terms of, the Guaranty, as if said Person were a signatory
thereto.

            "SURETY INSTRUMENTS" means all letters of credit (including
standby), banker's acceptances, bank guaranties, shipside bonds, surety bonds
and similar instruments.

            "SWAP CONTRACT" means any agreement (including any master agreement
and any agreement, whether or not in writing, relating to any single
transaction) that is an interest rate swap agreement, basis swap, forward rate
agreement, commodity swap, commodity option, commodity forward contracts, equity
or equity index swap or option, bond option, interest rate option, forward
foreign exchange agreement, rate cap, collar or floor agreement, currency swap
agreement, cross-currency rate swap agreement, swap option, currency option or
any other, similar agreement (including any option to enter into any of the
foregoing).

            "SWAP PROVIDER" means any Lender or any Affiliate of any Lender that
is at the time of determination party to a Swap Contract with the Company or any
Subsidiary.


                                      -21-

            "SWAP TERMINATION VALUES" means, in respect of any one or more Swap
Contracts, after taking into account the effect of any legally enforceable
netting agreement relating to such Swap Contracts, (a) for any date on or after
the date such Swap Contracts have been closed out and termination value(s)
determined in accordance therewith, such termination value(s), and (b) for any
date prior to the date referenced in CLAUSE (a), the amount(s) determined as the
mark-to-market value(s) for such Swap Contracts, as determined based upon one or
more mid-market or other readily available quotations provided by any recognized
dealer in such Swap Contracts (which may include any Lender).

             "SYNTHETIC LEASE" means a financing arrangement that is treated as
a lease for financial accounting purposes and as a loan for tax purposes.

            "TAXES" means any and all present or future taxes, levies,
assessments, imposts, duties, deductions, fees, withholdings or similar charges,
and all liabilities with respect thereto, excluding, in the case of each Lender
and the Administrative Agent, such taxes (including income taxes or franchise
taxes) as are imposed on or measured by each Lender's net income by (i) any
jurisdiction (or any political subdivision thereof) under the laws of which such
Lender or the Administrative Agent, as the case may be, is organized or
maintains a Lending Office, or (ii) any jurisdiction (or political subdivision
thereof) in which such Lender or the Administrative Agent, as the case may be,
is "doing business" (unless it would not be deemed to be "doing business" in
such jurisdiction absent the transactions contemplated hereby).

            "TERMINATION DATE" means the earlier of (a) May 13, 2005 or (b) the
date on which the Commitments terminate in accordance with the provisions of
this Agreement.

            "TOTAL LEVERAGE RATIO" means, as of any date, the ratio of (a)
Consolidated Funded Indebtedness as of the determination date to (b)
Consolidated EBITDA for the four fiscal quarters ending on such date, or if such
date is not the last day of a fiscal quarter, ending on the last day of the
fiscal quarter most recently then ended.

            "UCC" means the Uniform Commercial Code as adopted in the State of
New York.

            "UNFUNDED PENSION LIABILITY" means the excess of a Plan's benefit
liabilities under Section 4001(a)(16) of ERISA, over the current value of that
Plan's assets, determined in accordance with the assumptions used for funding
the Pension Plan pursuant to Section 412 of the Code for the applicable plan
year.

            "UNITED STATES" and "U.S." each mean the United States of America.

            "WHOLLY-OWNED SUBSIDIARY" means any corporation in which (other than
directors' qualifying shares required by law) 100% of the capital stock of each
class having ordinary voting power at the time as of which any determination is
being made, is owned, beneficially and of record, by the Company, or by one or
more of the other Wholly-Owned Subsidiaries, or both.

            "YORKTOWN ACQUISITION" means the acquisition by Giant Yorktown of
the Yorktown Assets pursuant to the Yorktown Acquisition Documents.

            "YORKTOWN ACQUISITION DOCUMENTS" means the Yorktown Asset Purchase
Agreement and each other agreement, document and instrument executed and
delivered by the Company, Giant Yorktown or any other Subsidiary of the Company,
and the Yorktown Seller in connection with Giant Yorktown's purchase of the
Yorktown Assets.


                                      -22-

            "YORKTOWN ASSET PURCHASE AGREEMENT" means the Asset Purchase
Agreement dated as of February 8, 2002, between the Company and the Yorktown
Seller with such amendments as may be satisfactory to the Administrative Agent
and the Majority Lenders.

            "YORKTOWN ASSETS" means the "Purchased Assets" defined in the
Yorktown Asset Purchase Agreement, including without limitation the Yorktown
Refinery.

            "YORKTOWN INTERCREDITOR AGREEMENT" means the Intercreditor Agreement
dated as of the date hereof, among the Company, the Administrative Agent, the
collateral agent under the Yorktown Term Loan Agreement, Giant Yorktown, and the
Guarantors, substantially in the form of EXHIBIT J hereto.

            "YORKTOWN REFINERY" means the refinery located in or near Yorktown,
Virginia, and the land and other real estate appurtenant thereto, acquired by
Giant Yorktown on the Closing Date pursuant to the Yorktown Asset Purchase
Agreement.

            "YORKTOWN SELLER" means BP Corporation North America Inc., an
Indiana corporation, and BP Products North America Inc., a Maryland
corporation, collectively the "Seller" under the Yorktown Asset Purchase
Agreement.

            "YORKTOWN TERM LOAN" means the term loan in the original principal
amount of $40,000,000 incurred by Giant Yorktown pursuant to the Yorktown Term
Loan Agreement, which is secured by the Yorktown Refinery (but, for the
avoidance of doubt, not by any inventory or accounts receivable associated
therewith).

            "YORKTOWN TERM LOAN AGREEMENT" means the Loan Agreement dated as of
the Closing Date among Giant Yorktown, as borrower, Wells Fargo Bank Nevada,
National Association, as collateral agent, and the lenders parties thereto.

            "YORKTOWN TERM LOAN DOCUMENTS" means the Yorktown Term Loan
Agreement, and the promissory notes, deed of trust, and other agreements,
documents and instruments evidencing, securing, guaranteeing or otherwise
executed and delivered in connection with the Yorktown Term Loan.


      1.02 Other Interpretive Provisions. The meanings of defined terms are
equally applicable to the singular and plural forms of the defined terms. Unless
otherwise specified or the context clearly requires otherwise, the words
"hereof," "herein," "hereunder" and similar words refer to this Agreement as a
whole and not to any particular provision of this Agreement; and subsection,
Section, Schedule and Exhibit references are to this Agreement. The term
"documents" includes any and all instruments, documents, agreements,
certificates, indentures, notices and other writings, however evidenced. The
term "including" is not limiting and means "including without limitation." In
the computation of periods of time from a specified date to a later specified
date, the word "from" means "from and including"; the words "to" and "until"
each mean "to but excluding," and the word "through" means "to and including."
Unless otherwise expressly provided herein, (a) references to agreements
(including this Agreement) and other contractual instruments shall be deemed to
include all subsequent amendments and other modifications thereto, but only to
the extent such amendments and other modifications are not prohibited by the
terms of any Loan Document, and (b) references to any statute or regulation are
to be construed as including all statutory and regulatory provisions
consolidating, amending, replacing, supplementing or interpreting the statute or
regulation. The captions and headings of this Agreement are for convenience of
reference only and shall not affect the interpretation of this Agreement. This
Agreement and other Loan Documents may use several different limitations, tests
or measurements to regulate the same or similar


                                      -23-

matters. All such limitations, tests and measurements are cumulative and shall
each be performed in accordance with their terms. This Agreement and the other
Loan Documents are the result of negotiations among and have been reviewed by
counsel to the Administrative Agent, the Company and the other parties, and are
the products of all parties. Accordingly, they shall not be construed against
the Lenders or the Administrative Agent merely because of the Administrative
Agent's or Lenders' involvement in their preparation.

      1.03  Accounting Principles.

            (a) Unless the context otherwise clearly requires, all accounting
terms not expressly defined herein shall be construed, and all financial
computations required under this Agreement shall be made, in accordance with
GAAP, consistently applied. References to "consolidated," when it precedes any
accounting term, means such term as it would apply to the Company and its
Subsidiaries on a consolidated basis, determined in accordance with GAAP.

            (b) References herein to "fiscal year" and "fiscal quarter" refer to
such fiscal periods of the Company.

                                   ARTICLE II

                                   THE CREDITS

      2.01 Amounts and Terms of Commitments. Each Lender severally agrees, on
the terms and conditions set forth herein, to make Loans to the Company (each
such loan, a "REVOLVING LOAN") from time to time on any Business Day during the
period from the Closing Date to the Termination Date, in an aggregate amount not
to exceed at any time outstanding the lesser of the following: (i) the amount
set forth on SCHEDULE 2.01 (such amount, as the same may be reduced under
SECTION 2.05 or as a result of one or more assignments under SECTION 11.07, the
Lender's "COMMITMENT") and (ii) the Lender's Pro Rata Share of the current
Borrowing Base; provided, however, that, after giving effect to any Borrowing of
Revolving Loans, the Effective Amount of all outstanding Revolving Loans,
together with the Effective Amount of all L/C Obligations, shall not at any time
exceed the combined Commitments of all of the Lenders. Within the limits of each
Lender's Commitment, and subject to the other terms and conditions of this
Agreement, the Company may borrow under this SECTION 2.01, prepay under SECTION
2.06 and reborrow under this SECTION 2.01.

      2.02  Loan Accounts.

            (a) The Loans made by each Lender shall be evidenced by one or more
loan accounts or records maintained by such Lender in the ordinary course of
business. The loan accounts or records maintained by the Administrative Agent
and each Lender shall be conclusive absent manifest error of the amount of the
Loans made by the Lenders to the Company and the interest and payments thereon.
Any failure so to record or any error in doing so shall not, however, limit or
otherwise affect the obligation of the Company hereunder to pay any amount owing
with respect to the Loans.

            (b) Upon the request of any Lender made through the Administrative
Agent, the Loans made by such Lender may be evidenced by one or more Notes,
instead of or in addition to loan accounts. Each such Lender may endorse on the
schedules annexed to its Note(s) the date, amount and maturity of each Loan made
by it and the amount of each payment of principal made by the Company with
respect thereto. Each such Lender is irrevocably authorized by the Company to
endorse its Note(s) and each Lender's record shall be conclusive absent manifest
error; provided, however, that the failure of


                                      -24-

a Lender to make, or an error in making, a notation thereon with respect to any
Loan shall not limit or otherwise affect the obligations of the Company
hereunder or under any such Note to such Lender.

      2.03  Procedure for Borrowing.

            (a) Each Borrowing of Revolving Loans shall be made upon the
Company's irrevocable written notice delivered to the Administrative Agent in
the form of a Notice of Borrowing, which notice must be received by the
Administrative Agent prior to 10:00 a.m. (Dallas, Texas time) (i) three Business
Days prior to the requested Borrowing Date, in the case of Offshore Rate Loans
and (ii) one Business Day prior to the requested Borrowing Date, in the case of
Base Rate Loans, specifying: (A) the amount of the Borrowing, which shall be in
an aggregate minimum amount of $2,000,000 or any multiple of $1,000,000 in
excess thereof; (B) the requested Borrowing Date, which shall be a Business Day;
(C) the Interest Rate Type of Loans comprising the Borrowing; and (D) the
duration of the Interest Period applicable to such Loans included in such
notice. If the Notice of Borrowing fails to specify the duration of the Interest
Period for any Borrowing comprised of Offshore Rate Loans, such Interest Period
shall be three months.

            (b) The Administrative Agent will promptly notify each Lender of its
receipt of any Notice of Borrowing and of the amount of such Lender's Pro Rata
Share of that Borrowing.

            (c) Each Lender will make the amount of its Pro Rata Share of each
Borrowing available to the Administrative Agent for the account of the Company
at the Administrative Agent's Payment Office by 12:00 noon (Dallas, Texas time)
on the Borrowing Date requested by the Company in funds immediately available to
the Administrative Agent. The proceeds of all such Loans will then be made
available to the Company by the Administrative Agent by wire transfer in
accordance with written instructions provided to the Administrative Agent by the
Company of like funds as received by the Administrative Agent.

            (d) After giving effect to any Borrowing, there may not be more than
seven (7) different Interest Periods in effect.

      2.04  Conversion and Continuation Elections.

            (a) The Company may, upon irrevocable written notice to the
Administrative Agent in accordance with SUBSECTION 2.04(b): (i) elect, as of any
Business Day, in the case of Base Rate Loans, or as of the last day of the
applicable Interest Period, in the case of Offshore Rate Loans, to convert any
such Loans (or any part thereof in an amount not less than $2,000,000, or that
is in an integral multiple of $1,000,000 in excess thereof) into Loans of any
other Interest Rate Type; or (ii) elect as of the last day of the applicable
Interest Period, to continue any Revolving Loans having Interest Periods
expiring on such day (or any part thereof in an amount not less than $2,000,000,
or that is in an integral multiple of $1,000,000 in excess thereof); provided,
that if at any time the aggregate amount of Offshore Rate Loans in respect of
any Borrowing is reduced, by payment, prepayment, or conversion of part thereof
to be less than $2,000,000, such Offshore Rate Loans shall automatically convert
into Base Rate Loans, and on and after such date the right of the Company to
continue such Loans as, and convert such Loans into, Offshore Rate Loans shall
terminate.

            (b)   The Company shall deliver a Notice of
Conversion/Continuation to be received by the Administrative Agent not later
than 10:00 a.m. (Dallas, Texas time) at least (i) three Business Days in advance
of the Conversion/Continuation Date, if the Loans are to be converted into or
continued as Offshore Rate Loans; and (ii) one Business Day in advance of the
Conversion/Continuation Date, if the Loans are to be converted into Base Rate
Loans, specifying: (A) the proposed Conversion/Continuation


                                      -25-

Date; (B) the aggregate amount of Loans to be converted or continued; (C) the
Interest Rate Type of Loans resulting from the proposed conversion or
continuation; and (D) other than in the case of conversions into Base Rate
Loans, the duration of the requested Interest Period.

            (c) If upon the expiration of any Interest Period applicable to
Offshore Rate Loans, the Company has failed to select timely a new Interest
Period to be applicable to Offshore Rate Loans, or if any Default or Event of
Default then exists, the Company shall be deemed to have elected to convert such
Offshore Rate Loans into Base Rate Loans effective as of the expiration date of
such Interest Period.

            (d) The Administrative Agent will promptly notify each Lender of its
receipt of a Notice of Conversion/Continuation, or, if no timely notice is
provided by the Company, the Administrative Agent will promptly notify each
Lender of the details of any automatic conversion. All conversions and
continuations shall be made ratably according to the respective outstanding
principal amounts of the Loans with respect to which the notice was given held
by each Lender.

            (e) Unless the Majority Lenders otherwise agree, during the
existence of a Default or Event of Default, the Company may not elect to have a
Loan converted into or continued as an Offshore Rate Loan.

            (f) After giving effect to any conversion or continuation of Loans,
there may not be more than seven (7) different Interest Periods in effect.

      2.05  Termination or Reduction of Commitments.

            (a) Voluntary Termination or Reduction. The Company may, upon not
less than five Business Days' prior notice to the Administrative Agent,
terminate the Commitments, or permanently reduce the Commitments (and,
correspondingly, as applicable, the L/C Commitment) by an aggregate minimum
amount of $2,000,000.00 or any multiple of $1,000,000.00 in excess thereof,
unless, after giving effect thereto and to any prepayments of Loans made on the
effective date thereof, (i) the Effective Amount of all Revolving Loans and L/C
Obligations together would exceed the amount of the combined Commitments then in
effect, or (ii) the Effective Amount of all L/C Obligations then outstanding
would exceed the amount of the L/C Commitment then in effect. Once reduced in
accordance with this subsection, the Commitments may not be increased.

            (b) Additional Provisions. Each reduction in aggregate Commitments
pursuant to PARAGRAPH (a) above shall be applied to each Lender according to its
Pro Rata Share. All accrued Commitment Fees on the amount of the Commitments so
terminated or reduced, Letter of Credit Fees, and Fronting Fees to, but not
including, the effective date of any reduction or termination of Commitments,
shall be paid by the Company on the effective date of such reduction or
termination.

      2.06 Optional Prepayments. Subject to SECTION 4.04, the Company may, at
any time or from time to time, upon irrevocable notice to the Administrative
Agent, not less than three (3) Business Days for Offshore Rate Loans and one (1)
Business Day for Base Rate Loans, ratably as to each Lender, prepay Loans in
whole or in part, in minimum amounts of $2,000,000 or any multiple of $1,000,000
in excess thereof. Such notice of prepayment shall specify the date and amount
of such prepayment and the Interest Rate Type(s) of Loans to be prepaid. The
Administrative Agent will promptly notify each Lender of its receipt of any such
notice, and of such Lender's Pro Rata Share of such prepayment. If such notice
is given by the Company, the Company shall make such prepayment and the payment
amount specified in such notice shall be due and payable on the date specified
therein, together with accrued interest to each such date on the amount prepaid
and any amounts required pursuant to SECTION 4.04.


                                      -26-

      2.07  Borrowing Base Determinations; Deposit Account Triggering Event;
Mandatory Prepayments of Loans.

            (a) The Borrowing Base shall be determined weekly on the last
Business Day of each week until the Termination Date, and shall be subject to
adjustment based upon the results of a field audit pursuant to SECTION 7.10(c),
and shall be equal to the sum of (i) eighty percent (80%) of Eligible Refinery
Hydrocarbon Inventory (except for Eligible Refinery Hydrocarbon Inventory at the
Company's and its Subsidiaries' service stations and travel centers), plus (ii)
fifty percent (50%) of Eligible Refinery Hydrocarbon Inventory at the Company's
and its Subsidiaries' service stations and travel centers, plus (iii) fifty
percent (50%) of Eligible Lubricants Inventory (the Eligible Refinery
Hydrocarbon Inventory and the Eligible Lubricants Inventory hereafter referred
to collectively as the "INVENTORY COMPONENT OF THE BORROWING BASE"), plus (iv)
ninety percent (90%) of Eligible Accounts Receivable from Preferred Eligible
Account Obligors, plus (v) eighty-five percent (85%) of Eligible Accounts
Receivable from Eligible Account Obligors other than Preferred Eligible Account
Obligors, minus 100% of First Purchase Crude Payables.


            (b) Notwithstanding the foregoing, the dollar amount of the
Inventory Component of the Borrowing Base shall not exceed (i) during the period
from the Closing Date through October 10, 2002, 75% of the Borrowing Base and
thereafter, 60% of the Borrowing Base.

            (c) (i) A "DEPOSIT ACCOUNT TRIGGERING EVENT" shall mean the
occurrence of either of the following: (A) in the event that the Company does
not deliver two consecutive Borrowing Base Reports in compliance with the
requirements hereof both of which show Availability of $10,000,000 or more
(either because of failure to deliver one more such reports in compliance with
this Agreement or because one or more of such reports show Availability of less
than $10,000,000), a Deposit Account Triggering Event shall be deemed to have
occurred, or (B) in the event that Availability on any date is less than
$10,000,000, the Administrative Agent, acting upon the direction of the Majority
Lenders, may declare that a Deposit Account Triggering Event has occurred on
such date or at any time thereafter. Upon the occurrence of a Deposit Account
Triggering Event, the Administrative Agent shall give a Control Notice to each
Depository Bank and each Broker, and the Administrative Agent may take such
other action as it deems necessary or desirable in order to establish the sole
dominion and control of the Administrative Agent over all deposit accounts and
all investment accounts of the Company and its Subsidiaries. In the event of the
occurrence of a Deposit Account Triggering Event, the Company shall execute all
documents and take such actions as shall be requested by the Administrative
Agent in order to establish the sole dominion and control of the Administrative
Agent over all deposit accounts and investment accounts of the Company and its
Subsidiaries.

                  (ii) A "CONTROL NOTICE" means notice by the Administrative
Agent to a Depository Bank or Broker instructing such Depository Bank or Broker
to do one or both of the following (A) cease permitting the Company and its
Subsidiaries from having access to the deposit accounts or investment accounts
held by such Depository Bank or Broker, and (B) sweep balances in such deposit
accounts or investment accounts daily into the Concentration Account.

                  (iii) Upon the occurrence of an Event of Default, (A) the
Administrative Agent may, or upon the direction of the Majority Banks shall,
give a Control Notice to each Depository Bank and each Broker, (B) the
Administrative Agent may take such other action as it deems necessary or
desirable in order to establish the sole dominion and control of the
Administrative Agent over all deposit accounts and all investment accounts of
the Company and its Subsidiaries, and (C) the Company shall execute all
documents and take such actions as shall be requested by the Administrative
Agent in order to


                                      -27-

establish the sole dominion and control of the Administrative Agent over all
deposit accounts and investment accounts of the Company and its Subsidiaries.

            (d) If on any date the Effective Amount of all Revolving Loans and
the Effective Amount of all L/C Obligations together exceed the Borrowing Base,
the Company shall, without notice or demand, prepay the outstanding principal
amount of the Revolving Loans by an amount equal to the applicable excess
("MANDATORY PREPAYMENT") and the provisions of SECTION 4.04 shall be applicable.
If on any date after giving effect to any Mandatory Prepayment made on such date
pursuant to the preceding sentence the Effective Amount of all L/C Obligations
together exceed the Borrowing Base, the Company shall immediately Cash
Collateralize on such date the outstanding Letters of Credit in an amount equal
to the amount by which the Effective Amount of the L/C Obligations exceeds the
Borrowing Base.

      2.08  Repayment.

            (a) Principal. The Company shall repay to the Lenders the aggregate
principal amount of Loans outstanding on the Termination Date.

            (b) Interest.

                  (i) Subject to CLAUSE (iii) of this SUBSECTION 2.08(b), each
      Revolving Loan shall bear interest on the outstanding principal amount
      thereof from the applicable Borrowing Date at a rate per annum equal to
      the lesser of (A) the Offshore Rate or the Base Rate, as the case may be,
      as selected by the Company or otherwise applicable to such Revolving Loan
      in accordance with the terms and provisions hereof (subject to the
      Company's right to convert to other Interest Rate Types of Loans under
      SECTION 2.04), plus the Applicable Margin, or (B) the Highest Lawful Rate.

                  (ii) Interest on each Revolving Loan shall be paid in arrears
      on each Interest Payment Date. Interest shall also be paid on the date of
      any prepayment of Loans under SECTION 2.06 or 2.07 for the portion of the
      Loans so prepaid and upon payment (including prepayment) in full thereof
      and, during the existence of any Event of Default, interest shall be paid
      on demand of the Administrative Agent at the request or with the consent
      of the Majority Lenders.

                  (iii) Notwithstanding CLAUSE (i) of this SUBSECTION 2.08(b),
      while any Event of Default exists or after acceleration, the Company shall
      pay interest (after as well as before entry of judgment thereon to the
      extent permitted by law) on the principal amount of all outstanding Loans,
      at a rate per annum equal to the lesser of (A) the Highest Lawful Rate and
      (B) the per annum rate equal to the rate set forth in CLAUSE (i) of this
      SUBSECTION 2.08(b) plus two percent (2%) per annum.

      2.09  Fees.  In addition to certain fees described in SECTION 3.08:

            (a) Arrangement, Agency Fees. The Company shall pay an arrangement
fee to the Arranger for the Arranger's own account, and shall pay an agency fee
to the Administrative Agent for the Administrative Agent's own account, as
required by the letter agreement ("FEE LETTER") between the Company and the
Arranger and Administrative Agent dated February 6, 2002.

            (b) Commitment Fees. The Company shall pay to the Administrative
Agent for the account of each Lender a commitment fee (the "COMMITMENT FEE") on
the average daily unused portion of such Lender's Commitment, computed on a
quarterly basis in arrears on the last Business Day of each


                                      -28-

calendar quarter based upon the daily utilization for that quarter as calculated
by the Administrative Agent, equal to the percent per annum set forth in
SCHEDULE 2.02 corresponding to the applicable pricing level determined in
accordance therewith. For purposes of calculating utilization under this
subsection, the Commitments shall be deemed used to the extent of the Effective
Amount of Revolving Loans then outstanding, plus the Effective Amount of L/C
Obligations then outstanding. Such Commitment Fee shall accrue from the
Execution Date to the Termination Date and shall be due and payable quarterly in
arrears on the last Business Day of each quarter commencing on June 30, 2002
through the Termination Date, with the final payment to be made on the
Termination Date; provided that, in connection with any reduction or termination
of Commitments under SECTION 2.05, the accrued Commitment Fee calculated for the
period ending on such date shall also be paid on the date of such reduction or
termination, with the following quarterly payment being calculated on the basis
of the period from such reduction or termination date to such quarterly payment
date. The Commitment Fee provided in this subsection shall accrue at all times
after the above-mentioned commencement date, including at any time during which
one or more conditions in ARTICLE V are not met.

      2.10  Computation of Fees and Interest.

            (a) All computations of interest for Base Rate Loans when the Base
Rate is determined by Bank of America's "reference rate" shall be made on the
basis of a year of 365 or 366 days, as the case may be, and actual days elapsed.
All other computations of fees and interest shall be made on the basis of a
360-day year and actual days elapsed (which results in more interest being paid
than if computed on the basis of a 365-day year). Interest and fees shall accrue
during each period during which interest or such fees are computed from the
first day thereof to the last day thereof.

            (b) Each determination of an interest rate by the Administrative
Agent shall be conclusive and binding on the Company and the Lenders in the
absence of manifest error.

      2.11  Payments by the Company.

            (a) All payments to be made by the Company shall be made without
condition or deduction for any defense, set-off, recoupment or counterclaim.
Except as otherwise expressly provided herein, all payments by the Company shall
be made to the Administrative Agent for the account of the Lenders at the
Administrative Agent's Payment Office, and shall be made in dollars and in
immediately available funds, no later than 11:00 a.m. (Dallas, Texas time) on
the date specified herein. The Administrative Agent will promptly distribute to
each Lender its Pro Rata Share (or other applicable share as expressly provided
herein) of such payment in like funds as received. Any payment received by the
Administrative Agent later than 11:00 a.m. (Dallas, Texas time) shall be deemed
to have been received on the following Business Day and any applicable interest
or fee shall continue to accrue.

            (b) Subject to the provisions set forth in the definition of
"Interest Period" herein, whenever any payment is due on a day other than a
Business Day, such payment shall be made on the following Business Day, and such
extension of time shall in such case be included in the computation of interest
or fees, as the case may be.

            (c) Unless the Administrative Agent receives notice from the Company
prior to the date on which any payment is due to the Lenders that the Company
will not make such payment in full as and when required, the Administrative
Agent may assume that the Company has made such payment in full to the
Administrative Agent on such date in immediately available funds and the
Administrative Agent may (but shall not be so required), in reliance upon such
assumption, distribute to each Lender on such due date an amount equal to the
amount then due such Lender. If and to the extent the Company has not made such
payment in full to the Administrative Agent, each Lender shall repay to the
Administrative


                                      -29-

Agent on demand such amount distributed to such Lender, together with interest
thereon at the Federal Funds Rate for each day from the date such amount is
distributed to such Lender until the date repaid.

      2.12  Payments by the Lenders to the Administrative Agent.

            (a) Unless the Administrative Agent receives notice from a Lender on
or prior to the Execution Date or, with respect to any Borrowing after the
Execution Date, at least one Business Day prior to the date of such Borrowing,
that such Lender will not make available as and when required hereunder to the
Administrative Agent for the account of the Company the amount of that Lender's
Pro Rata Share of the Borrowing, the Administrative Agent may assume that each
Lender has made such amount available to the Administrative Agent in immediately
available funds on the Borrowing Date and the Administrative Agent may (but
shall not be so required), in reliance upon such assumption, make available to
the Company on such date a corresponding amount. If and to the extent any Lender
shall not have made its full amount available to the Administrative Agent in
immediately available funds and the Administrative Agent in such circumstances
has made available to the Company such amount, that Lender shall on the Business
Day following such Borrowing Date make such amount available to the
Administrative Agent, together with interest at the Federal Funds Rate for each
day during such period. A notice of the Administrative Agent submitted to any
Lender with respect to amounts owing under this SUBSECTION (a) shall be
conclusive, absent manifest error. If such amount is so made available, such
payment to the Administrative Agent shall constitute such Lender's Loan on the
date of Borrowing for all purposes of this Agreement. If such amount is not made
available to the Administrative Agent on the Business Day following the
Borrowing Date, the Administrative Agent will notify the Company of such failure
to fund and, upon demand by the Administrative Agent, the Company shall pay such
amount to the Administrative Agent for the Administrative Agent's account,
together with interest thereon for each day elapsed since the date of such
Borrowing, at a rate per annum equal to the interest rate applicable at the time
to the Loans comprising such Borrowing.

            (b) The failure of any Lender to make any Loan on any Borrowing Date
shall not relieve any other Lender of any obligation hereunder to make a Loan on
such Borrowing Date, but no Lender shall be responsible for the failure of any
other Lender to make the Loan to be made by such other Lender on any Borrowing
Date.

      2.13 Sharing of Payments, Etc. If, other than as expressly provided
elsewhere herein, any Lender shall obtain on account of the Loans made by it any
payment (whether voluntary, involuntary, through the exercise of any right of
set-off, or otherwise) in excess of its Pro Rata Share, such Lender shall
immediately (a) notify the Administrative Agent of such fact, and (b) purchase
from the other Lenders such participations in the Loans made by them as shall be
necessary to cause such purchasing Lender to share the excess payment pro rata
with each of them; provided, however, that if all or any portion of such excess
payment is thereafter recovered from the purchasing Lender, such purchase shall
to that extent be rescinded and each other Lender shall repay to the purchasing
Lender the purchase price paid therefor, together with an amount equal to such
paying Lender's ratable share (according to the proportion of (i) the amount of
such paying Lender's required repayment to (ii) the total amount so recovered
from the purchasing Lender) of any interest or other amount paid or payable by
the purchasing Lender in respect of the total amount so recovered. The Company
agrees that any Lender so purchasing a participation from another Lender may, to
the fullest extent permitted by law, exercise all its rights of payment
(including the right of set-off, but subject to SECTION 11.09) with respect to
such participation as fully as if such Lender were the direct creditor of the
Company in the amount of such participation. The Administrative Agent will keep
records (which shall be conclusive and binding in the absence of manifest error)
of participations purchased under this Section and will in each case notify the
Lenders following any such purchases or repayments.


                                      -30-

      2.14 Security and Guaranty. (a) All obligations of the Company and the
Guarantors under this Agreement, the Notes, the Guaranty and all other Loan
Documents shall be secured, pro rata with the Specified Swap Contracts, in
accordance with the Collateral Documents.

            (b) All obligations of the Company under this Agreement, each of the
Notes and all other Loan Documents shall be unconditionally guaranteed by the
Guarantors pursuant to the Guaranty.

      2.15 Concentration Account. (a) The Administrative Agent shall maintain an
account styled "Giant Industries Concentration Account" (the "CONCENTRATION
ACCOUNT"). The Concentration Account shall be a blocked account from which only
authorized officers of the Administrative Agent may withdraw or authorize
withdrawal of funds. Pursuant to the terms of the Deposit Account Control
Agreements and the Investment Account Control Agreements, Depository Banks and,
to the extent applicable, the Brokers must transfer funds on deposit in the
Deposit Accounts (as defined in the Deposit Account Control Agreements) and the
Investment Accounts (as defined in the Investment Account Control Agreements) to
the Concentration Account upon receipt of notice from the Administrative Agent.
The Administrative Agent is authorized to give such notice as provided in
SECTION 2.07(c).

            (b) All amounts on deposit in the Concentration Account shall be
held by the Administrative Agent as collateral for the payment and performance
of the Obligations. The Administrative Agent shall have exclusive dominion and
control, including without limitation the exclusive right of withdrawal, over
the Concentration Account. The Administrative Agent shall permit the disbursal
of funds from the Concentration Account, upon the Company's request, to the
Company or to an account designated by the Company, as follows:

                  (i) Provided that no Default or Event of Default has occurred
            and is continuing, upon written request made by the Company, the
            Administrative Agent shall transfer funds to an unrestricted deposit
            account of the Company if together with such request the Company
            certifies that (A) no Default or Event of Default has occurred and
            is continuing, and (B) no part of such funds will be used for any
            (x) expenditure or other payment or transfer of funds to any Person
            in excess of $500,000, (y) payment of any extraordinary items, or
            (z) payment or transfer of funds to an Affiliate, officer, director
            or employee except payments in the ordinary course of business; and

                  (ii) Such other disbursals as may be permitted by the
            Administrative Agent in its sole discretion.

            (c) The Concentration Account shall be a blocked, non-interest
...bearing account held by the Administrative Agent or any Affiliate of the
Administrative Agent upon such terms and in such type of account as customary at
that depository institution. The Company shall pay any fees charged by such
depository institution which fees are of the type customarily charged by such
institution with respect to such accounts, and if such fees are not paid by the
Company, the institution holding the Concentration Account may deduct them from
such account.

            (d) The Company hereby irrevocably authorizes the Administrative
Agent to apply funds in the Concentration Account as follows, in such order as
may be designated by the Administrative Agent: (i) to payment of costs and
expenses required to be paid to the Administrative Agent pursuant to SECTION
11.04, and (ii) to payment or prepayment of principal of and interest on the
Loans, and (iii) to payment of any other Obligations; provided that if the
maturity of the Loans has been accelerated, amounts on deposit in the
Concentration Account shall be applied to satisfy the Obligations pro rata with
obligations to the Swap Providers under Specified Swap Contracts then due and
payable. The provisions of SECTION 4.04 shall apply to prepayments made pursuant
to this Section 2.15.


                                      -31-

            (e) As security for the payment of all Obligations, the Company
hereby grants, conveys, assigns, pledges, sets over and transfers to the
Administrative Agent, and creates in the Administrative Agent's favor a Lien on,
and security interest, in (i) the Concentration Account, (ii) all contract
rights, claims and privileges in respect of the Concentration Account, and (iii)
all money, cash, checks, instruments, securities, security entitlements, and
other items of value now or hereafter paid, deposited in, credited to, held in
(whether for collection, provisionally or otherwise) or otherwise in the
possession or under the control of, or in transit to, the depository institution
holding the Concentration Account, together with all proceeds thereof. At any
time and from time to time, upon the Administrative Agent's request, the Company
promptly shall execute and deliver any and all such further instruments and
documents as may be necessary, appropriate or desirable in the Administrative
Agent's judgment to obtain the full benefits (including perfection and priority)
of the security interest created or intended to be created by this SUBSECTION
2.15 and of the rights and powers herein granted.

                                   ARTICLE III

                              THE LETTERS OF CREDIT

      3.01  The Letter of Credit Facility.

            (a) On the terms and conditions set forth herein (i) the Issuing
Bank agrees, in reliance upon the agreements of the other Lenders set forth in
this SECTION 3.01, (A) from time to time on any Business Day during the period
from the Execution Date to the Termination Date to issue Letters of Credit for
the account of the Company, and to amend or renew Letters of Credit previously
issued by it, in accordance with SUBSECTIONS 3.02(c) and 3.02(e), and (B) to
honor drafts under the Letters of Credit; and (ii) the Lenders severally agree
to participate in Letters of Credit Issued for the account of the Company;
provided, that the Issuing Bank shall not be obligated to Issue, and no Lender
shall be obligated to participate in, any Letter of Credit if, as of the date of
Issuance of such Letter of Credit (the "ISSUANCE DATE"), after giving effect to
such Issuance, (1) the Effective Amount of all L/C Obligations plus the
Effective Amount of all Revolving Loans would exceed the lesser of (x) the
combined Commitments and (y) the Borrowing Base, or (2) the Effective Amount of
the L/C Obligations would exceed the L/C Commitment. Within the foregoing
limits, and subject to the other terms and conditions hereof, the Company's
ability to obtain Letters of Credit shall be fully revolving, and, accordingly,
the Company may, during the foregoing period, obtain Letters of Credit to
replace Letters of Credit which have expired or which have been drawn upon and
reimbursed.

            (b) The Issuing Bank is under no obligation to Issue any Letter of
Credit if: (i) any order, judgment or decree of any Governmental Authority or
arbitrator shall by its terms purport to enjoin or restrain the Issuing Bank
from Issuing such Letter of Credit, or any Requirement of Law applicable to the
Issuing Bank or any request or directive (whether or not having the force of
law) from any Governmental Authority with jurisdiction over the Issuing Bank
shall prohibit, or request that the Issuing Bank refrain from, the Issuance of
letters of credit generally or such Letter of Credit in particular or shall
impose upon the Issuing Bank with respect to such Letter of Credit any
restriction, reserve or capital requirement (for which the Issuing Bank is not
otherwise compensated hereunder) not in effect on the Execution Date, or shall
impose upon the Issuing Bank any unreimbursed loss, cost or expense which was
not applicable on the Execution Date and which the Issuing Bank in good faith
deems material to it; (ii) the Issuing Bank has received written notice from any
Lender, the Administrative Agent or the Company, on or prior to the Business Day
prior to the requested date of Issuance of such Letter of Credit, that one or
more of the applicable conditions contained in ARTICLE V is not then satisfied;
(iii) the expiry date of any requested Letter of Credit is (A) more than 360
days after the date of Issuance, unless the Issuing Bank and the Majority
Lenders have approved such expiry date in writing, or (B) after the Termination
Date,


                                      -32-

unless the Company has agreed to Cash Collateralize such Letter of Credit
in accordance with SECTION 3.07(b); (iv) the expiry date of any requested Letter
of Credit is prior to the maturity date of any financial obligation to be
supported by the requested Letter of Credit; (v) any requested Letter of Credit
does not provide for drafts, or is not otherwise in form and substance
acceptable to the Issuing Bank, or the Issuance of a Letter of Credit shall
violate any applicable policies of the Issuing Bank; (vi) any Letter of Credit
is for the purpose of supporting the issuance of any letter of credit by any
other Person; (vii) if such Letter of Credit is issued to support workmen's
compensation liabilities and the face amount is more than $1,750,000; or (viii)
the issuance of such Letter of Credit would violate one or more of the Issuing
Bank's policies.

      3.02  Issuance, Amendment and Renewal of Letters of Credit.

            (a) Each Letter of Credit shall be issued two (2) Business Days
after receipt by the Issuing Bank (if received by the Issuing Bank no later than
10:00 a.m. Dallas, Texas time) of an irrevocable written request from the
Company (with a copy sent by the Company to the Administrative Agent) or such
shorter time as the Issuing Bank may agree in a particular instance in its sole
discretion. Each such request for issuance of a Letter of Credit shall be by
facsimile, confirmed immediately in an original writing, in the form of an L/C
Application, and shall specify in form and detail satisfactory to the Issuing
Bank such matters as the Issuing Bank may require.

            (b) At least two Business Days prior to the Issuance of any Letter
of Credit, the Issuing Bank will confirm with the Administrative Agent (by
telephone or in writing) that the Administrative Agent has received a copy of
the L/C Application or L/C Amendment Application from the Company and, if the
Administrative Agent has not received such copy, the Issuing Bank will provide
the Administrative Agent with a copy thereof. Unless the Issuing Bank has
received notice on or before the Business Day immediately preceding the date the
Issuing Bank is to issue a requested Letter of Credit from the Administrative
Agent (A) directing the Issuing Bank not to issue such Letter of Credit because
such issuance is not then permitted under SUBSECTION 3.01(b); or (B) that one or
more conditions specified in ARTICLE V are not then satisfied; then, subject to
the terms and conditions hereof, the Issuing Bank shall, on the requested date,
issue a Letter of Credit for the account of the Company in accordance with the
Issuing Bank's usual and customary business practices.

            (c) From time to time while a Letter of Credit is outstanding and
prior to the Termination Date, the Issuing Bank will, upon the written request
of the Company received by the Issuing Bank (with a copy sent by the Company to
the Administrative Agent) at or before 10:00 a.m. Dallas, Texas time at least
two (2) Business Days (or such shorter time as the Issuing Bank may agree in a
particular instance in its sole discretion), amend any Letter of Credit issued
by it. Each such request for amendment of a Letter of Credit shall be made by
facsimile, confirmed immediately in an original writing, and made in such form
as the Issuing Bank may require. The Issuing Bank shall be under no obligation
to amend any Letter of Credit if: (A) the Issuing Bank would have no obligation
at such time to issue such Letter of Credit in its amended form under the terms
of this Agreement; or (B) the beneficiary of any such Letter of Credit does not
accept the proposed amendment to the Letter of Credit.

            (d) Upon receipt of notice from the Issuing Bank, the Administrative
Agent will promptly notify the Lenders of the Issuance of a Letter of Credit and
any amendment thereto.

            (e) If any outstanding Letter of Credit shall provide that it shall
be automatically renewed unless the beneficiary thereof receives notice from the
Issuing Bank that such Letter of Credit shall not be renewed, the Issuing Bank
shall be permitted to allow such Letter of Credit to renew, and the Company and
the Lenders hereby authorize such renewal. The Issuing Bank shall not be
obligated to


                                      -33-

allow such Letter of Credit to renew if the Issuing Bank would have no
obligation at such time to issue or amend such Letter of Credit under the terms
of this Agreement.

            (f) The Issuing Bank may, at its election (or as required by the
Administrative Agent at the direction of the Majority Lenders), deliver any
notices of termination or other communications to any Letter of Credit
beneficiary, and take any other action as necessary or appropriate, at any time
and from time to time, in order to cause the expiry date of such Letter of
Credit to be a date not later than the Termination Date.

            (g) This Agreement shall control in the event of any conflict with
any L/C-Related Document (other than any Letter of Credit).

            (h) The Issuing Bank will also deliver to the Administrative Agent,
concurrently or promptly following its delivery of a Letter of Credit, or
amendment to or renewal of a Letter of Credit, to an advising bank or a
beneficiary, a true and complete copy of each such Letter of Credit or amendment
to or renewal of a Letter of Credit.

      3.03  Existing Letters of Credit, Risk Participations, Drawings and
Reimbursements.

            (a) On and after the Execution Date, the Existing Letters of Credit
shall be deemed for all purposes, including for purposes of the fees to be
collected pursuant to SUBSECTIONS 3.08(a) and 3.08(c), and reimbursement of
costs and expenses to the extent provided herein, Letters of Credit outstanding
under this Agreement and entitled to the benefits of this Agreement and the
other Loan Documents, and shall be governed by the applications and agreements
pertaining thereto and by this Agreement. Each Lender shall be deemed to, and
hereby irrevocably and unconditionally agrees to, purchase from the Issuing Bank
on the Execution Date a participation in each such Letter of Credit and each
drawing thereunder in an amount equal to the product of (i) such Lender's Pro
Rata Share times (ii) the maximum amount available to be drawn under such Letter
of Credit and the amount of such drawing, respectively. For purposes of SECTION
2.01 and SUBSECTION 2.09(b), the Existing Letters of Credit shall be deemed to
utilize pro rata the Commitment of each Lender.

            (b) Immediately upon the Issuance of each Letter of Credit, each
Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to,
purchase from the Issuing Bank a participation in such Letter of Credit and each
drawing thereunder in an amount equal to the product of (i) the Pro Rata Share
of such Lender, times (ii) the maximum amount available to be drawn under such
Letter of Credit and the amount of such drawing, respectively. For purposes of
SECTION 2.01, each Issuance of a Letter of Credit shall be deemed to utilize the
Commitment of each Lender by an amount equal to the amount of such
participation.

            (c) In the event of any request for a drawing under a Letter of
Credit by the beneficiary thereof, the Issuing Bank will promptly notify the
Company. The Company shall reimburse the Issuing Bank prior to 10:00 a.m.
(Dallas, Texas time), on each date that any amount is paid by the Issuing Bank
under any Letter of Credit (each such date, an "HONOR DATE"), in an amount equal
to the amount so paid by the Issuing Bank. In the event the Company fails to
reimburse the Issuing Bank for the full amount of any drawing under any Letter
of Credit by 10:00 a.m. (Dallas, Texas time) on the Honor Date, the Issuing Bank
will promptly notify the Administrative Agent and the Administrative Agent will
promptly notify each Lender thereof, and the Company shall be deemed to have
requested that Base Rate Loans be made by the Lenders to be disbursed on the
Honor Date under such Letter of Credit, subject to the amount of the unutilized
portion of the Commitments and subject to the conditions set forth in ARTICLE V.
Any notice given by the Issuing Bank or the Administrative Agent pursuant to
this SUBSECTION 3.03(c)


                                      -34-

may be oral if immediately confirmed in writing (including by facsimile);
provided that the lack of such an immediate confirmation shall not affect the
conclusiveness or binding effect of such notice.

            (d) Each Lender shall upon any notice pursuant to SUBSECTION 3.03(c)
make available to the Administrative Agent for the account of the relevant
Issuing Bank an amount in Dollars and in immediately available funds equal to
its Pro Rata Share of the amount of the drawing, whereupon the participating
Lenders shall (subject to SUBSECTION 3.03(e)) each be deemed to have made a
Revolving Loan consisting of a Base Rate Loan to the Company in that amount. If
any Lender so notified fails to make available to the Administrative Agent for
the account of the Issuing Bank the amount of such Lender's Pro Rata Share of
the amount of the drawing by no later than 12:00 noon (Dallas, Texas time) on
the Honor Date, then interest shall accrue on such Lender's obligation to make
such payment, from the Honor Date to the date such Lender makes such payment, at
a rate per annum equal to the Federal Funds Rate in effect from time to time
during such period. The Administrative Agent will promptly give notice to each
Lender of the occurrence of the Honor Date, but failure of the Administrative
Agent to give any such notice on the Honor Date or in sufficient time to enable
any Lender to effect such payment on such date shall not relieve such Lender
from its obligations under this SECTION 3.03.

            (e) With respect to any unreimbursed drawing that is not converted
into Revolving Loans consisting of Base Rate Loans to the Company in whole or in
part, because of the Company's failure to satisfy the conditions set forth in
ARTICLE V or for any other reason, the Company shall be deemed to have incurred
from the Issuing Bank an L/C Borrowing in the amount of such drawing, which L/C
Borrowing shall be due and payable on demand (together with interest) and shall
bear interest at a rate per annum equal to the Base Rate plus 2% per annum, and
each Lender's payment to the Issuing Bank pursuant to SUBSECTION 3.03(d) shall
be deemed payment in respect of its participation in such L/C Borrowing and
shall constitute an L/C Advance from such Lender in satisfaction of its
participation obligation under this SECTION 3.03.

            (f) Each Lender's obligation in accordance with this Agreement to
make the Revolving Loans or L/C Advances, as contemplated by this SECTION 3.03,
as a result of a drawing under a Letter of Credit, shall be absolute and
unconditional and without recourse to the Issuing Bank and shall not be affected
by any circumstance, including (i) any set-off, counterclaim, recoupment,
defense or other right which such Lender may have against the Issuing Bank, the
Company or any other Person for any reason whatsoever; (ii) the occurrence or
continuance of a Default, an Event of Default or a Material Adverse Effect; or
(iii) any other circumstance, happening or event whatsoever, whether or not
similar to any of the foregoing; provided, however, that each Lender's
obligation to make Revolving Loans under this SECTION 3.03 is subject to the
conditions set forth in ARTICLE V.

      3.04  Repayment of Participations.

            (a) When the Administrative Agent receives (and only if the
Administrative Agent receives), for the account of the Issuing Bank, immediately
available funds from the Company (i) in reimbursement of any payment made by the
Issuing Bank under the Letter of Credit with respect to which any Lender has
paid the Administrative Agent for the account of the Issuing Bank for such
Lender's participation in the Letter of Credit pursuant to SECTION 3.03 or (ii)
in payment of interest thereon, the Administrative Agent will pay to each
Lender, in the same funds as those received by the Administrative Agent for the
account of the Issuing Bank, the amount of such Lender's Pro Rata Share of such
funds, and the Issuing Bank shall receive the amount of the Pro Rata Share of
such funds of any Lender that did not so pay the Administrative Agent for the
account of the Issuing Bank.

            (b) If the Administrative Agent or the Issuing Bank is required at
any time to return to the Company, or to a trustee, receiver, liquidator,
custodian, or any official in any Insolvency


                                      -35-

Proceeding, any portion of the payments made by the Company to the
Administrative Agent for the account of the Issuing Bank pursuant to SUBSECTION
3.04(a) in reimbursement of a payment made under the Letter of Credit or
interest or fee thereon, each Lender shall, on demand of the Administrative
Agent, forthwith return to the Administrative Agent or the Issuing Bank the
amount of its Pro Rata Share of any amounts so returned by the Administrative
Agent or the Issuing Bank plus interest thereon from the date such demand is
made to the date such amounts are returned by such Lender to the Administrative
Agent or the Issuing Bank, at a rate per annum equal to the Federal Funds Rate
in effect from time to time.

      3.05  Role of the Issuing Bank.

            (a) Each Lender and the Company agree that, in paying any drawing
under a Letter of Credit, the Issuing Bank shall not have any responsibility to
obtain any document (other than any sight draft, certificates and other
documents, if any, expressly required by the Letter of Credit) or to ascertain
or inquire as to the validity or accuracy of any such document or the authority
of the Person executing or delivering any such document.

            (b) No Agent-Related Person nor any of the respective
correspondents, participants or assignees of the Issuing Bank shall be liable to
any Lender for: (i) any action taken or omitted in connection herewith at the
request or with the approval of the Lenders (including the Majority Lenders, as
applicable); (ii) any action taken or omitted in the absence of gross negligence
or willful misconduct; or (iii) the due execution, effectiveness, validity or
enforceability of any L/C-Related Document.

            (c) The Company hereby assumes all risks of the acts or omissions of
any beneficiary or transferee with respect to its use of any Letter of Credit;
provided, however, that this assumption is not intended to, and shall not,
preclude the Company's pursuing such rights and remedies as it may have against
the beneficiary or transferee at law or under any other agreement. No
Agent-Related Person, nor any of the respective correspondents, participants or
assignees of the Issuing Bank, shall be liable or responsible for any of the
matters described in CLAUSES (I) through (VII) of SECTION 3.06; provided,
however, anything in such clauses to the contrary notwithstanding, that the
Company may have a claim against the Issuing Bank, and the Issuing Bank may be
liable to the Company, to the extent, but only to the extent, of any direct, as
opposed to consequential or exemplary, damages suffered by the Company which the
Company proves were caused by the Issuing Bank's willful misconduct or gross
negligence in failing to pay under any Letter of Credit after the presentation
to it by the beneficiary of a sight draft, certificate(s) and other documents,
if any, strictly complying with the terms and conditions of such Letter of
Credit. In furtherance and not in limitation of the foregoing: (i) the Issuing
Bank may accept documents that appear on their face to be in order, without
responsibility for further investigation, regardless of any notice or
information to the contrary; and (ii) the Issuing Bank shall not be responsible
for the validity or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign a Letter of Credit or the rights or benefits
thereunder or proceeds thereof, in whole or in part, which may prove to be
invalid or ineffective for any reason.

      3.06 Obligations Absolute. The obligations of the Company under this
Agreement and any L/C-Related Document to reimburse the Issuing Bank for a
drawing under a Letter of Credit, and to repay any L/C Borrowing and any drawing
under a Letter of Credit converted into Revolving Loans, shall be unconditional
and irrevocable, and shall be paid strictly in accordance with the terms of this
Agreement and each such other L/C-Related Document under all circumstances,
including the following: (i) any lack of validity or enforceability of this
Agreement or any L/C-Related Document; (ii) any change in the time, manner or
place of payment of, or in any other term of, all or any of the obligations of
the Company in respect of any Letter of Credit or any other amendment or waiver
of or any consent to departure from all or any of the L/C-Related Documents;
(iii) the existence of any claim, set-off, defense or other right that the
Company may have at any time against any beneficiary or any transferee of any
Letter of Credit (or


                                      -36-

any Person for whom any such beneficiary or any such transferee may be acting),
the Issuing Bank or any other Person, whether in connection with this Agreement,
the transactions contemplated hereby or by the L/C-Related Documents or any
unrelated transaction; (iv) any draft, demand, certificate or other document
presented under any Letter of Credit proving to be forged, fraudulent, invalid
or insufficient in any respect or any statement therein being untrue or
inaccurate in any respect; or any loss or delay in the transmission or otherwise
of any document required in order to make a drawing under any Letter of Credit;
(v) any payment by the Issuing Bank under any Letter of Credit against
presentation of a draft or certificate that does not strictly comply with the
terms of any Letter of Credit; or any payment made by the Issuing Bank under any
Letter of Credit to any Person purporting to be a trustee in bankruptcy,
debtor-in-possession, assignee for the benefit of creditors, liquidator,
receiver or other representative of or successor to any beneficiary or any
transferee of any Letter of Credit, including any arising in connection with any
Insolvency Proceeding; (vi) any exchange, release or non-perfection of any
collateral, or any release or amendment or waiver of or consent to departure
from any other guarantee, for all or any of the obligations of the Company in
respect of any Letter of Credit; or (vii) any other circumstance or happening
whatsoever, whether or not similar to any of the foregoing, including any other
circumstance that might otherwise constitute a defense available to, or a
discharge of, the Company or a guarantor.

      3.07  Cash Collateral Pledge.

            (a) The Company shall immediately Cash Collateralize the L/C
Obligations in an amount equal to the L/C Obligations upon the occurrence of any
of the following: (i) upon the request of the Administrative Agent, if the
Issuing Bank has honored any full or partial drawing request on any Letter of
Credit and such drawing has resulted in an L/C Borrowing hereunder; (ii) upon
the occurrence of the circumstances described in SUBSECTION 2.07(d) requiring
the Company to Cash Collateralize Letters of Credit; or (iii) upon the
occurrence of an Event of Default. If so instructed by the Administrative Agent,
the Company shall satisfy its obligation to Cash Collateralize the L/C
Obligations by placing funds in a cash collateral account established by the
Administrative Agent for such purpose (the "LETTER OF CREDIT CASH COLLATERAL
ACCOUNT"). The Letter of Credit Cash Collateral Account shall be held by the
Administrative Agent as collateral for the payment and performance of the
Obligations. The Administrative Agent shall have exclusive dominion and control,
including the exclusive right of withdrawal, over such account. The account
shall be a blocked, non-interest bearing account held by the Administrative
Agent or any Affiliate of the Administrative Agent upon such terms and in such
type of account as customary at that depository institution. The Company shall
pay any fees charged by such depository institution which fees are of the type
customarily charged by such institution with respect to such accounts. Moneys in
such account shall (i) be applied by the Administrative Agent to the payment of
Letter of Credit Borrowings and interest thereon, and (ii) be held for the
satisfaction of the reimbursement obligations of the Company in respect of
Letters of Credit.

            (b) As security for the payment of all Obligations, the Company
hereby grants, conveys, assigns, pledges, sets over and transfers to the
Administrative Agent, and creates in the Administrative Agent's favor a Lien on,
and security interest, in (i) the Letter of Credit Cash Collateral Account, (ii)
all contract rights, claims and privileges in respect of the Letter of Credit
Cash Collateral Account, and (iii) all money, cash, checks, instruments,
securities, and other items of value now or hereafter paid, deposited in,
credited to, held in (whether for collection, provisionally or otherwise) or
otherwise in the possession or under the control of, or in transit to, the
depository institution holding the Letter of Credit Cash Collateral Account,
together with all proceeds thereof. At any time and from time to time, upon the
Administrative Agent's request, the Company promptly shall execute and deliver
any and all such further instruments and documents as may be necessary,
appropriate or desirable in the Administrative Agent's judgment to obtain the
full benefits (including perfection and priority) of the security interest
created or intended to be created by this SUBSECTION 3.07(b) and of the rights
and powers herein granted.


                                      -37-

            (c) If, on the Termination Date, any one or more Letters of Credit
for any reason remain outstanding and partially or wholly undrawn, then the
Company shall on such date Cash Collateralize the L/C Obligations in an amount
equal to 110% of the L/C Obligations.

      3.08  Letter of Credit Fees.

            (a) The Company shall pay to the Administrative Agent for the
account of each of the Lenders a letter of credit fee (the "RISK PARTICIPATION
FEE") with respect to the Letters of Credit equal to (i) the percent per annum
therefor specified in SCHEDULE 2.02 corresponding to the applicable pricing
level determined in accordance therewith multiplied by (ii) the average daily
maximum amount available to be drawn on the outstanding Letters of Credit,
computed on a quarterly basis in arrears on the last Business Day of each
calendar quarter based upon Letters of Credit outstanding for that quarter as
calculated by the Administrative Agent. Such Risk Participation Fee shall be due
and payable quarterly in arrears on the last Business Day of each calendar
quarter during which Letters of Credit are outstanding, commencing on the first
such quarterly date to occur after the Execution Date, through the Termination
Date (or such later date upon which the outstanding Letters of Credit shall
expire), with the final payment to be made on the Termination Date (or such
later expiration date).

            (b) The Company shall pay to the Administrative Agent for the
account of the Issuing Bank a letter of credit fronting fee (the "FRONTING FEE")
for each Letter of Credit Issued by the Issuing Bank equal to 0.125% per annum
of the average daily maximum amount available to be drawn on the outstanding
Letters of Credit, computed on a quarterly basis in arrears on the last Business
Day of each calendar quarter based upon Letters of Credit outstanding for that
quarter.

            (c) The Company shall pay to the Issuing Bank from time to time on
demand the normal issuance, presentation, amendment and other processing fees,
and other standard costs and charges, of the Issuing Bank relating to letters of
credit as from time to time in effect.

      3.09 Applicability of ISP98 and UCP. Unless otherwise expressly agreed by
the Issuing Bank and the Company when a Letter of Credit is issued (including
any such agreement applicable to Existing Letters of Credit), (a) the rules of
the "International Standby Practices 1998" published by the Institute of
International Banking Law & Practice (or such later version thereof as may be in
effect at the time of issuance) shall apply to each standby Letter of Credit,
and (b) the rules of the Uniform Customs and Practice for Documentary Credits,
as most recently published by the International Chamber of Commerce (the "ICC")
at the time of issuance (including the ICC decision published by the Commission
on Banking Technique and Practice on April 6, 1998 regarding the European single
currency (euro)) shall apply to each commercial Letter of Credit.

                                   ARTICLE IV

                     TAXES, YIELD PROTECTION AND ILLEGALITY

      4.01  Taxes.

            (a) Any and all payments by the Company to each Lender or the
Administrative Agent under this Agreement and any other Loan Document shall be
made free and clear of, and without deduction or withholding for any Taxes. In
addition, the Company shall pay all Other Taxes.

            (b) The Company agrees to indemnify and hold harmless each Lender
and the Administrative Agent for the full amount of Taxes or Other Taxes
(including any Taxes or Other Taxes imposed by any jurisdiction on amounts
payable under this Section) paid by the Lender or the


                                      -38-

Administrative Agent and any liability (including penalties, interest, additions
to tax and expenses) arising therefrom or with respect thereto, whether or not
such Taxes or Other Taxes were correctly or legally asserted. Payment under this
indemnification shall be made within 30 days after the date the Lender or the
Administrative Agent makes written demand therefor.

            (c) If the Company shall be required by law to deduct or withhold
any Taxes or Other Taxes from or in respect of any sum payable hereunder to any
Lender or the Administrative Agent, then: (i) the sum payable shall be increased
as necessary so that after making all required deductions and withholdings
(including deductions and withholdings applicable to additional sums payable
under this Section) such Lender or the Administrative Agent, as the case may be,
receives an amount equal to the sum it would have received had no such
deductions or withholdings been made; (ii) the Company shall make such
deductions and withholdings; (iii) the Company shall pay the full amount
deducted or withheld to the relevant taxing authority or other authority in
accordance with applicable law; and (iv) the Company shall also pay to each
Lender or the Administrative Agent for the account of such Lender, at the time
interest is paid, all additional amounts which the respective Lender specifies
as necessary to preserve the after-tax yield the Lender would have received if
such Taxes or Other Taxes had not been imposed.

            (d) Within 30 days after the date of any payment by the Company of
Taxes or Other Taxes, the Company shall furnish the Administrative Agent the
original or a certified copy of a receipt evidencing payment thereof, or other
evidence of payment satisfactory to the Administrative Agent.

            (e) If the Company is required to pay additional amounts to any
Lender or the Administrative Agent pursuant to SUBSECTION (c) of this Section,
then upon written request of the Company such Lender shall use reasonable
efforts (consistent with legal and regulatory restrictions) to change the
jurisdiction of its Lending Office so as to eliminate any such additional
payment by the Company which may thereafter accrue, if such change in the
judgment of such Lender is not otherwise disadvantageous to such Lender.

      4.02  Illegality.

            (a) If any Lender determines that the introduction of any
Requirement of Law, or any change in any Requirement of Law, or in the
interpretation or administration of any Requirement of Law, has made it
unlawful, or that any central bank or other Governmental Authority has asserted
that it is unlawful, for any Lender or its applicable Lending Office to make
Offshore Rate Loans, or has materially restricted the authority of such Lender
to purchase or sell, or to take deposits of Dollars in the applicable offshore
Dollar market, or to determine or charge interest based on the Offshore Rate,
then, on notice thereof by the Lender to the Company through the Administrative
Agent, any obligation of that Lender to make Offshore Rate Loans or to convert
Base Rate Loans into Offshore Rate Loans shall be suspended until the Lender
notifies the Administrative Agent and the Company that the circumstances giving
rise to such determination no longer exist.

            (b) The Company shall, upon its receipt of a notice pursuant to
Section 4.02(a) and demand from such Lender (with a copy to the Administrative
Agent), prepay in full such Offshore Rate Loans of that Lender then outstanding,
together with interest accrued thereon and amounts required under SECTION 4.04,
either on the last day of the Interest Period thereof, if the Lender may
lawfully continue to maintain such Offshore Rate Loans to such day, or
immediately, if the Lender may not lawfully continue to maintain such Offshore
Rate Loan. If the Company is required to so prepay any Offshore Rate Loan, then
concurrently with such prepayment, the Company shall borrow from the affected
Lender, in the amount of such repayment, a Base Rate Loan.


                                      -39-

            (c) If the obligation of any Lender to make or maintain Offshore
Rate Loans has been so terminated or suspended, all Loans which would otherwise
be made by the Lender as Offshore Rate Loans shall be instead Base Rate Loans.

            (d) Before giving any notice to the Administrative Agent under this
Section, the affected Lender shall designate a different Lending Office with
respect to its Offshore Rate Loans if such designation will avoid the need for
giving such notice or making such demand and will not, in the judgment of the
Lender, be illegal or otherwise disadvantageous to the Lender.

      4.03  Increased Costs and Reduction of Return.

            (a) If any Lender determines that, due to either (i) the
introduction of or any change (other than any change by way of imposition of or
increase in reserve requirements included in the calculation of the Offshore
Rate) in or in the interpretation of any law or regulation or (ii) the
compliance by that Lender with any guideline or request from any central bank or
other Governmental Authority (whether or not having the force of law), there
shall be any increase in the cost to such Lender of agreeing to make or making,
funding or maintaining any Offshore Rate Loans or participating in Letters of
Credit, or, in the case of the Issuing Bank, any increase in the cost to the
Issuing Bank of agreeing to issue, issuing or maintaining any Letter of Credit
or of agreeing to make or making, funding or maintaining any unpaid drawing
under any Letter of Credit, or a reduction in the amount received or receivable
by such Lender in connection with any of the foregoing (excluding for purposes
of this subsection (a) any such increased costs or reduction in amount resulting
from (x) Taxes or Other Taxes (as to which Section 4.01 shall govern), (y)
changes in the basis of taxation of overall net income or overall gross income
by the United States or any foreign jurisdiction or any political subdivision of
either thereof under the Laws of which such Lender is organized or has its
Lending Officer, and (z) reserve requirements contemplated by the determination
of the Offshore Rate then the Company shall be liable for, and shall from time
to time, upon demand (with a copy of such demand to be sent to the
Administrative Agent), pay to the Administrative Agent for the account of such
Lender, additional amounts as are sufficient to compensate such Lender for such
increased costs.

            (b) If any Lender shall have determined that (i) the introduction of
any Capital Adequacy Regulation, (ii) any change in any Capital Adequacy
Regulation, (iii) any change in the interpretation or administration of any
Capital Adequacy Regulation by any central bank or other Governmental Authority
charged with the interpretation or administration thereof, or (iv) compliance by
the Lender (or its Lending Office) or any corporation controlling the Lender
with any Capital Adequacy Regulation, affects or would affect the amount of
capital required or expected to be maintained by the Lender or any corporation
controlling the Lender and (taking into consideration such Lender's or such
corporation's policies with respect to capital adequacy and such Lender's
desired return on capital) determines that the amount of such capital is
increased as a consequence of its Commitments, loans, credits or obligations
under this Agreement, then, upon demand of such Lender to the Company through
the Administrative Agent, the Company shall pay to the Lender, from time to time
as specified by the Lender, additional amounts sufficient to compensate the
Lender for such increase.

      4.04 Funding Losses. The Company shall reimburse each Lender and hold each
Lender harmless from any loss, cost or expense which the Lender may sustain or
incur as a consequence of: (a) the failure of the Company to make on a timely
basis any payment of principal of any Offshore Rate Loan; (b) the failure of the
Company to borrow, continue or convert a Loan after the Company has given (or is
deemed to have given) a Notice of Borrowing or a Notice of
Conversion/Continuation (including by reason of the failure to satisfy any
condition precedent thereto); (c) the failure of the Company to make any
prepayment in accordance with any notice delivered under SECTION 2.06; (d) the
prepayment (including pursuant to SECTION 2.07 or 2.08) or other payment
(including after acceleration thereof) of an


                                      -40-

Offshore Rate Loan on a day that is not the last day of the relevant Interest
Period; or (e) the automatic conversion under SECTION 2.04 of any Offshore Rate
Loan to a Base Rate Loan on a day that is not the last day of the relevant
Interest Period; including any such loss of anticipated profits and any loss or
expense arising from the liquidation or reemployment of funds obtained by it to
maintain its Offshore Rate Loans or from fees payable to terminate the deposits
from which such funds were obtained. The Company shall also pay customary
administrative fees charged by such Lender in connection with the foregoing. For
purposes of calculating amounts payable by the Company to the Lenders under this
Section and under SUBSECTION 4.03(a), each Offshore Rate Loan made by a Lender
(and each related reserve, special deposit or similar requirement) shall be
conclusively deemed to have been funded at the LIBOR used in determining the
Offshore Rate for such Offshore Rate Loan by a matching deposit or other
borrowing in the interbank eurodollar market for a comparable amount and for a
comparable period, whether or not such Offshore Rate Loan is in fact so funded.

      4.05 Inability to Determine Rates. If the Administrative Agent determines
that for any reason that (a) adequate and reasonable means do not exist for
determining the Offshore Rate for any requested Interest Period with respect to
a proposed Offshore Rate Loan, (b) adequate and reasonable means do not exist
for determining the Eurodollar Rate for any requested Interest Period, or (c)
that the Offshore Rate applicable pursuant to SUBSECTION 2.08(b)(i) for any
requested Interest Period with respect to a proposed Offshore Rate Loan does not
adequately and fairly reflect the cost to the Lenders of funding such Loan, the
Administrative Agent will promptly so notify the Company and each Lender.
Thereafter, the obligation of the Lenders to make or maintain Offshore Rate
Loans hereunder shall be suspended until the Administrative Agent upon the
instruction of the Majority Lenders revokes such notice in writing. Upon receipt
of such notice, the Company may revoke any Notice of Borrowing or Notice of
Conversion/Continuation then submitted by it. If the Company does not revoke
such Notice, the Lenders shall make, convert or continue the Loans, as proposed
by the Company, in the amount specified in the applicable notice submitted by
the Company, but such Loans shall be made, converted or continued as Base Rate
Loans instead of Offshore Rate Loans.

      4.06 Certificates of Lenders. Any Lender claiming reimbursement or
compensation under this ARTICLE IV shall deliver to the Company (with a copy to
the Administrative Agent) a certificate setting forth in reasonable detail the
amount payable to the Lender hereunder and such certificate shall be conclusive
and binding on the Company in the absence of manifest error.

      4.07 Substitution of Lenders. Upon the receipt by the Company from any
Lender (an "AFFECTED LENDER") of a notice of illegality under SECTION 4.02 or a
claim for compensation under SECTION 4.03, or the Company being or becoming
liable with respect to payments hereunder to any Lender (also an "AFFECTED
LENDER") for any Taxes pursuant to SECTION 4.01 assessed at a rate in excess of
the rate of any such Taxes for which it is liable with respect to payments to
any other Lender hereunder, the Company may: (i) request the Affected Lender to
use its best efforts to obtain a replacement bank or financial institution
satisfactory to the Administrative Agent (a "REPLACEMENT LENDER") to acquire and
assume all or a ratable part of all of such Affected Lender's Loans and
Commitment, and, if such Affected Lender or any Affiliate thereof is a Swap
Provider, all specified Swap Contracts of such Affected Lender and its
Affiliates; (ii) request one more of the other Lenders to acquire and assume all
or part of such Affected Lender's Loans and Commitment, and, if such Affected
Lender or any Affiliate thereof is a Swap Provider, all specified Swap Contracts
of such Affected Lender and its Affiliates, but none of the Lenders shall have
any obligation to do so; or (iii) designate a Replacement Lender satisfactory to
the Administrative Agent. Any such designation of a Replacement Lender under
CLAUSE (i) or (iii) shall be subject to the prior written consent of the
Administrative Agent which consent shall not be unreasonably withheld.


                                      -41-

      4.08 Survival. The agreements and obligations of the Company in this
ARTICLE IV shall survive the payment of all other Obligations.

                                    ARTICLE V

                              CONDITIONS PRECEDENT

      5.01 Conditions of Initial Credit Extensions. The obligation of each
Lender to make its initial Credit Extension and the obligation of the Issuing
Bank to issue the first Letter of Credit hereunder is subject to the condition
that the Administrative Agent shall have received on or before the Closing Date
all of the following (other than each item, if any, listed on SCHEDULE 5.01,
which items are hereby permitted to be delivered after the Closing Date but not
later than the respective date for delivery of each such item specified on
SCHEDULE 5.01 or such later date as the Administrative Agent may agree), in form
and substance satisfactory to the Administrative Agent and each Lender, and in
sufficient copies for each Lender and, unless otherwise specified below, in each
case dated as of the Closing Date:

            (a) Credit Agreement, Notes, Guaranty, Deposit Account Control
Agreements, Investment Account Control Agreements, Yorktown Intercreditor
Agreement and Perfection Certificate. This Agreement, the Notes, the Guaranty,
the Deposit Account Control Agreements, the Investment Account Control
Agreements, the Yorktown Intercreditor Agreement, and the other Loan Documents
executed by each party thereto, and a certificate in such form and detail as the
Administrative Agent may require as to matters relating to the Collateral;

            (b) Resolutions; Incumbency; Organization Documents. (i) Resolutions
of the board of directors of the Company and each Loan Party authorizing the
transactions contemplated hereby, certified by the Secretary or an Assistant
Secretary of such Person; (ii) Certificates of the Secretary or Assistant
Secretary of the Company and each Loan Party certifying the names and true
signatures of the officers or such Person authorized to execute, deliver and
perform, as applicable, this Agreement, the Notes, the Guaranties and all other
Loan Documents to be delivered by it hereunder; and (iii) articles or
certificates of incorporation and the bylaws of the Company and each Loan Party
as in effect on the Closing Date, certified by the Secretary or Assistant
Secretary of such Person as of the Closing Date, or a certificate of the
Secretary or Assistant Secretary certifying that such articles or certificates
of incorporation and bylaws have not been amended since copies thereof were
delivered to the Administrative Agent pursuant to the Existing Credit Agreement;

            (c) Certificate (Organization, Qualification and Good Standing). A
certificate signed by a Responsible Officer, identifying those states in which
the ownership, lease or operation of property or the conduct of its business
requires the Company and each other Loan Party, to be qualified or licensed to
do business as a foreign corporation, and attaching thereto, with respect to the
Company and each of the Guarantors, respectively, certificates of the Secretary
of State (and/or similar applicable Governmental Authority) of its state of
incorporation and each such state where it is so required to be qualified or
licensed to do business as a foreign corporation, certifying as of a recent date
each such Person's existence or qualification, as applicable, and good standing
in each such jurisdictions;

            (d) Legal Opinions. Copies of (i) a favorable opinion of Kim
Bullerdick, counsel to the Company, addressed to the Administrative Agent and
the Lenders, substantially in the form of EXHIBIT D-1; and (ii) a favorable
opinion of Fennemore Craig, P.C., special counsel to the Company, addressed to
the Administrative Agent and the Lenders, substantially in the form of EXHIBIT
D-2; and (iii) a favorable opinion of McGuirreWoods LLP, special counsel to the
Company, addressed to the Administrative Agent and the Lenders, substantially in
the form of EXHIBIT D-3;


                                      -42-

            (e) Payment of Fees. Evidence of payment by the Company of all
accrued and unpaid fees, costs and expenses owed pursuant to this Agreement and
the Fee Letter to the extent then due and payable on the Closing Date, together
with Attorney Costs of the Administrative Agent to the extent invoiced prior to
or on the Closing Date, plus such additional amounts of Attorney Costs as shall
constitute the Administrative Agent's estimate of Attorney Costs incurred or to
be incurred by it through the closing proceedings (provided that such estimate
shall not thereafter preclude final settling of accounts between the Company and
the Administrative Agent), including any such costs, fees and expenses arising
under or referenced in SECTIONS 2.09 and 11.04;

            (f) Certificate (Representations and Warranties, Etc.). A
certificate signed by a Responsible Officer, stating that (i) the
representations and warranties contained in ARTICLE VI are true and correct on
and as of such date, as though made on and as of such date; (ii) no Default or
Event of Default exists under the Existing Credit Agreement or hereunder or
would result from the Credit Extension being made on the Closing Date; (iii)
there has occurred since September 30, 2001 (A) no material adverse change in,
or material adverse effect upon, the operations, business, properties,
liabilities (actual or contingent), capitalization, condition (financial or
otherwise) or prospects of the Company and its Subsidiaries taken as a whole,
(B) no material impairment of the ability of the Company or any Significant
Subsidiary to perform under any Loan Document and to avoid any Event of Default;
or (C) no material adverse effect upon (1) the legality, validity, binding
effect or enforceability against the Company or any Significant Subsidiary of
any Loan Document or (2) the perfection or priority of any Lien granted under
any of the Collateral Documents.

            (g) Certificate (Consents and Approvals, etc.). A certificate of a
Responsible Officer certifying that (i) the Company has received all
governmental, shareholder and third party consents and approvals necessary or
desirable to consummate the Yorktown Acquisition, which consents and approvals
are in full force and effect, (ii) all waiting periods have expired without any
action being taken by any Governmental Authority that could restrain, prevent or
impose any material adverse condition on the Yorktown Acquisition or that could
seek to threaten the consummation of the Yorktown Acquisition, and no law or
regulation is applicable that could have such effect, (iii) no order, decree,
judgment, ruling or injunction exists which restrains the consummation of the
Yorktown Acquisition or the transactions contemplated by this Agreement, and
(iv) no pending or threatened action, suit, investigation or proceeding exists
which seeks to restrain or affect the Yorktown Acquisition, or which, if
adversely determined, could materially and adversely affect the Company, any of
its Subsidiaries, or the Yorktown Assets, any transaction contemplated hereby or
the ability of the Company and its Subsidiaries to consummate the Yorktown
Acquisition or perform its obligations under this Agreement and the other Loan
Documents, or the ability of the Lenders to exercise their rights thereunder;

            (h) Certificate (Closing of Yorktown Acquisition and, Yorktown Term
Loan). A certificate of a Responsible Officer of the Company certifying that the
Company is, concurrently with the funding of the initial Borrowing hereunder on
the Closing Date, consummating (i) the Yorktown Acquisition in accordance with
the terms of the Yorktown Asset Purchase Agreement, (ii) the Yorktown Term Loan
in accordance with the terms of the Yorktown Term Loan Documents, and (iii) the
BNY $200,000,000 Subordinated Notes Offering in accordance with the terms of the
BNY $200,000,000 Indenture, in each case with all of the material conditions
precedent thereto having been satisfied in all material respects by the parties
thereto;

            (i) Copy of Yorktown Acquisition Documents and, Yorktown Term Loan
Documents. A certificate of a Responsible Officer, identifying the following
material agreements: (i) the Yorktown Asset Purchase Agreement and all other
material Yorktown Acquisition Documents, (ii) the Yorktown Term Loan Agreement,
all agreements creating liens securing obligations thereunder, and all other
material Yorktown Term Loan Documents, and (iii) the BNY $200,000,000 Indenture;
in addition,


                                      -43-

true and correct copies of the documents described in the foregoing clauses (i),
(ii) and (iii) shall be attached to such certificate or shall have been
previously delivered to the Administrative Agent;

            (j) Certificate (Compliance with Indentures). A certificate of a
Responsible Officer of the Company certifying that (i) the Company is in
compliance with the terms of the Indentures, and (ii) the execution of this
Agreement and the consummation of the transactions contemplated hereby and by
the Yorktown Acquisition Documents and the Yorktown Term Loan Documents will not
violate the terms of the Indentures or result in an "Event of Default"
thereunder, and setting forth calculations demonstrating pro forma compliance
with the restrictions on Indebtedness set forth in the Indentures, taking into
account the obligations of the Company and its Subsidiaries pursuant to the
transactions described in this CLAUSE (ii);

            (k)   Satisfaction with Financial Condition.  The Administrative
Agent shall have received evidence that sufficient funds are available to the
Company to consummate the Yorktown Acquisition;

            (l) Borrowing Base Report. Borrowing Base Report, certified by a
Responsible Officer showing pro forma Availability of at least $20,000,000 on
the Closing Date after giving effect to the Yorktown Acquisition, the BNY
$200,000,000 Subordinated Notes Offering, the Yorktown Term Loan, and the Loans
and Letter of Credit Obligations contemplated to be made or incurred hereunder
on the Closing Date;

            (m) Certificate and Financial Statements. (i) Consolidated and
consolidating financial statements for the Company and its Subsidiaries as of
March 31, 2002, (ii) a certificate of the Company's chief financial officer or
chief accounting officer certifying that attached thereto are a pro forma
balance sheet and pro forma income statement of the Company and its Subsidiaries
as of March 31, 2002 after giving effect to the Yorktown Acquisition, together
with a Compliance Certificate as of March 31, 2002 executed by a Responsible
Officer, (iii) audited consolidated financial statements of the Company and its
Subsidiaries for the fiscal year ended December 31, 2001, and (iv) audited
consolidated financial statements for the Yorktown Refinery for the fiscal year
ended December 31, 2001;

            (n) Collateral Documents. The Collateral Documents, executed by the
Company and by each Subsidiary to the extent required by SECTION 7.12 that has
assets or conducts business, in appropriate form for recording, where necessary,
together with:

                  (i) such Lien searches as the Administrative Agent shall have
      requested, and such termination statements or other documents as may be
      necessary to confirm that the Collateral is subject to no other Liens
      (other than Permitted Liens) in favor of any Persons;

                  (ii)  funds sufficient to pay any filing or recording
      tax or fee in connection with any and all UCC-1 financing
      statements;

                  (iii) certificates of insurance certifying as to coverages,
      deductibles, and insurance companies, and certifying that the
      Administrative Agent and the Lenders have been named as loss payees under
      all policies of casualty insurance pertaining to the Collateral and as
      additional insureds under liability insurance policies;

                  (iv) such consents, estoppels, subordination agreements and
      other documents and instruments executed by landlords and other Persons
      party to material contracts relating to any Collateral as to which the
      Administrative Agent shall be granted


                                      -44-

      a Lien for the benefit of the Lenders, as requested by the Administrative
      Agent or any Lender; and

                  (v) evidence that all other actions necessary or, in the
      opinion of the Administrative Agent or the Lenders, desirable to perfect
      and protect the first priority Lien created by the Collateral Documents,
      and to enhance the Administrative Agent's ability to preserve and protect
      its interests in and access to the Collateral, have been taken;

            (o) Completion of Field Audit. Completion of the field audit and
examination report and valuation of inventory by Bank of America Business Credit
Services, Inc., in form and substance satisfactory to the Administrative Agent;

            (p) Deposit of Funds for Payment of NBD Subordinated Notes. The
Escrow Arrangement shall be in place, and funds shall have been irrevocably
deposited pursuant thereto in an amount sufficient to redeem the NBD
Subordinated Notes in full; and

            (q) Other Documents. Such other approvals, opinions, documents or
materials as the Administrative Agent or the Majority Lenders may request.

      5.02 Conditions to All Credit Extensions. The obligation of each Lender to
make any Revolving Loan to be made by it (including its initial Revolving Loan)
or to continue or convert any Revolving Loan under SECTION 2.04 and the
obligation of the Issuing Bank to Issue any Letter of Credit (including the
initial Letter of Credit) is subject to the satisfaction of the following
conditions precedent on the relevant Borrowing Date, Conversion/Continuation
Date or Issuance Date:

            (a) Notice, Application. The Administrative Agent shall have
received a timely Notice of Borrowing or a timely Notice of
Conversion/Continuation, as applicable, or, in the case of any Issuance of any
Letter of Credit, the Issuing Bank and the Administrative Agent shall have
received an L/C Application or L/C Amendment Application, as required under
SECTION 3.02;

            (b) Continuation of Representations and Warranties. The
representations and warranties in ARTICLE VI shall be true and correct on and as
of such Borrowing Date, Issuance Date or Conversion/Continuation Date with the
same effect as if made on and as of such Borrowing Date, Issuance Date or
Conversion/Continuation Date (except to the extent such representations and
warranties expressly refer to an earlier date, in which case they shall be true
and correct as of such earlier date);

            (c) No Existing Default. No Default or Event of Default shall exist
or shall result from such Credit Extension or continuation or conversion;

            (d) No Material Adverse Effect. No event or circumstance shall have
occurred that has resulted or would reasonably be expected to result in a
Material Adverse Effect; and

            (e) No Future Advance Notice. Neither the Administrative Agent nor
any Lender shall have received any notice that any Collateral Document will no
longer secure on a first priority basis future advances or future Loans to be
made or extended under this Agreement.

Each Notice of Borrowing, Notice of Conversion/Continuation and L/C Application
or L/C Amendment Application submitted by the Company hereunder shall constitute
a representation and warranty by the Company hereunder, as of the date of each
such notice and as of each Borrowing Date,


                                      -45-

Conversion/Continuation Date, or Issuance Date, as applicable, that the
conditions in SECTION 5.02 are satisfied.

                                   ARTICLE VI

                         REPRESENTATIONS AND WARRANTIES

      The Company represents and warrants to the Administrative Agent and each
Lender that:

      6.01 Corporate Existence and Power. The Company and each of its Material
Subsidiaries: (a) is a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation; (b) has the
power and authority and all material governmental licenses, authorizations,
consents and approvals to own its assets, carry on its business and to execute,
deliver, and perform its obligations under the Loan Documents; (c) is duly
qualified as a foreign corporation and is licensed and in good standing under
the laws of each jurisdiction where its ownership, lease or operation of
property or the conduct of its business requires such qualification or license;
and (d) is in compliance in all material respects with all Requirements of Law;
except, in each case referred to in CLAUSE (b), (c) and (d), to the extent that
the failure to do so would not reasonably be expected to have a Material Adverse
Effect.

      6.02 Corporate Authorization; No Contravention. The execution, delivery
and performance by the Company and its Subsidiaries of this Agreement and each
other Loan Document to which such Person is a party, have been duly authorized
by all necessary corporate action, and do not and will not: (a) contravene the
terms of any of that Person's Organization Documents; (b) conflict with or
result in any breach or contravention of, or the creation of any Lien under, any
document evidencing any material Contractual Obligation to which such Person is
a party or any order, injunction, writ or decree of any Governmental Authority
to which such Person or its property is subject; or (c) violate any Requirement
of Law.

      6.03 Governmental Authorization. No approval, consent, exemption,
authorization, or other action by, or notice to, or filing with, any
Governmental Authority is necessary or required in connection with the
execution, delivery or performance by, or enforcement against, the Company or
any of its Subsidiaries of this Agreement or any other Loan Document to which it
is a party.

      6.04 Binding Effect. This Agreement and each other Loan Document to which
the Company or any of its Subsidiaries is a party constitute the legal, valid
and binding obligations of the Company and any of its Subsidiaries to the extent
it is a party thereto, enforceable against such Person in accordance with their
respective terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, or similar laws affecting the enforcement of creditors'
rights generally or by equitable principles relating to enforceability.

      6.05 Litigation. There are no actions, suits, proceedings, claims or
disputes pending, or to the best knowledge of the Company, threatened or
contemplated, at law, in equity, in arbitration or before any Governmental
Authority, against the Company, or its Subsidiaries or any of their respective
properties which: (a) purport to affect or pertain to this Agreement or any
other Loan Document, or any of the transactions contemplated hereby or thereby;
or (b) if determined adversely to the Company or its Subsidiaries, would
reasonably be expected to have a Material Adverse Effect. No injunction, writ,
temporary restraining order or any order of any nature has been issued by any
court or other Governmental Authority purporting to enjoin or restrain the
Acquisition, execution, delivery or performance of this Agreement or any other
Loan Document, or directing that the transactions provided for herein or therein
not be consummated as herein or therein provided.


                                      -46-

      6.06 No Default. No Default or Event of Default exists or would be
reasonably expected to result from the incurring of any Obligations by the
Company or from the grant or perfection of the Liens of the Administrative Agent
and the Lenders on the Collateral. Neither the Company nor any Material
Subsidiary is in default under or with respect to any Contractual Obligation in
any respect which, individually or together with all such defaults, would
reasonably be expected to have a Material Adverse Effect, or that would, if such
default had occurred after the Closing Date, create an Event of Default under
SUBSECTION 9.01(e).

      6.07  ERISA Compliance.

            (a) Each Plan is in compliance in all material respects with the
applicable provisions of ERISA, the Code and other federal or state law. Each
Plan which is intended to qualify under Section 401(a) of the Code has received
a favorable determination letter from the IRS and to the best knowledge of the
Company, nothing has occurred which would cause the loss of such qualification.
The Company and each ERISA Affiliate has made all required contributions to any
Plan subject to Section 412 of the Code, and no application for a funding waiver
or an extension of any amortization period pursuant to Section 412 of the Code
has been made with respect to any Plan.

            (b) There are no pending or, to the best knowledge of Company,
threatened claims, actions or lawsuits, or action by any Governmental Authority,
with respect to any Plan which has resulted or could reasonably be expected to
result in a Material Adverse Effect. There has been no prohibited transaction or
violation of the fiduciary responsibility rules with respect to any Plan which
has resulted or could reasonably be expected to result in a Material Adverse
Effect.

            (c) (i) No ERISA Event has occurred or is reasonably expected to
occur; (ii) no Pension Plan has any Unfunded Pension Liability; (iii) neither
the Company nor any ERISA Affiliate has incurred, or reasonably expects to
incur, any liability under Title IV of ERISA with respect to any Pension Plan
(other than premiums due and not delinquent under Section 4007 of ERISA); (iv)
neither the Company nor any ERISA Affiliate has incurred, or reasonably expects
to incur, any liability (and no event has occurred which, with the giving of
notice under Section 4219 of ERISA, would result in such liability) under
Section 4201 or 4243 of ERISA with respect to a Multiemployer Plan; and (v)
neither the Company nor any ERISA Affiliate has engaged in a transaction that
could be subject to Section 4069 or 4212(c) of ERISA.

      6.08 Use of Proceeds; Margin Regulations. The proceeds of the Loans shall
be used solely for the purposes set forth in and permitted by SECTION 7.13 and
SECTION 8.07. Neither the Company nor any Subsidiary is generally engaged in the
business of purchasing or selling Margin Stock or extending credit for the
purpose of purchasing or carrying Margin Stock. Margin Stock does not constitute
more than 25% of the value of the consolidated assets of the Company and its
Subsidiaries, and the Company does not have any present intention that Margin
Stock will constitute more than 25% of the value of such assets.

      6.09 Title to Properties. The Company and each Subsidiary have good record
and marketable title in fee simple to, or valid leasehold interests in, or other
sufficient title to all real property necessary or used in the ordinary conduct
of their respective businesses, except for such defects in title as would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect. The property of the Company and its Subsidiaries is subject to
no Liens, other than Permitted Liens.

      6.10 Taxes. The Company and its Subsidiaries have filed all federal tax
returns and reports required to be filed, and have paid all federal taxes,
assessments, fees and other governmental charges levied or imposed upon them or
their properties, income or assets otherwise due and payable, except those which
are being contested in good faith by appropriate proceedings and for which
adequate reserves have


                                      -47-

been provided in accordance with GAAP. The Company and its Subsidiaries have
filed all material state and other material non-federal tax returns and reports
required to be filed, and have paid all material state and other material
non-federal taxes, assessments, fees and other governmental charges levied or
imposed upon them or their properties, income or assets otherwise due and
payable, except those which are being contested in good faith by appropriate
proceedings and for which adequate reserves have been provided in accordance
with GAAP, except where failure to do so would not reasonably be expected to
have a Material Adverse Effect. To the Company's knowledge, there is no proposed
tax assessment against the Company or any Subsidiary that would, if made,
reasonably be expected to have a Material Adverse Effect.

      6.11 Financial Condition. The consolidated financial statements of the
Company and its Subsidiaries dated December 31, 2001, and the related
consolidated statements of income or operations, shareholders' equity and cash
flows for the fiscal quarter ended on that date: (i) were prepared in accordance
with GAAP consistently applied throughout the period covered thereby, except as
otherwise expressly noted therein; (ii) fairly present in all material respects
the financial condition of the Company and its Subsidiaries as of the date
thereof and results of operations for the period covered thereby (subject to
ordinary, good faith year-end adjustments); and (iii) show all material
Indebtedness and other liabilities, direct or contingent, of the Company and its
consolidated Subsidiaries as of the date thereof, including liabilities for
taxes, material commitments and Contingent Obligations. Since December 31, 2001,
there has been no Material Adverse Effect.

      6.12 Environmental Matters. The Company conducts in the ordinary course of
business a review of the effect of existing Environmental Laws and existing
Environmental Claims on its business, operations and properties, and as a result
thereof the Company has reasonably concluded that such Environmental Laws and
Environmental Claims would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.

      6.13 Regulated Entities. None of the Company, any Person controlling the
Company, or any Subsidiary, is an "Investment Company" within the meaning of the
Investment Company Act of 1940. The Company is not subject to any provision of
the Public Utility Holding Company Act of 1935, the Federal Power Act, the
Interstate Commerce Act or any state public utilities code, or of any other
Federal or state statute or regulation, limiting its ability to incur
Indebtedness.

      6.14 No Burdensome Restrictions. Neither the Company nor any Subsidiary is
a party to or bound by any Contractual Obligation, or subject to any restriction
in any Organization Document, or any Requirement of Law, which would reasonably
be expected to have a Material Adverse Effect.

      6.15 Copyrights, Patents, Trademarks and Licenses, etc. The Company or its
Subsidiaries own or are licensed or otherwise have the right to use all of the
material patents, trademarks, service marks, trade names, copyrights,
contractual franchises, authorizations and other rights that are reasonably
necessary for the operation of their respective businesses, without conflict
with the rights of any other Person. To the best knowledge of the Company, no
slogan or other advertising device, product, process, method, substance, part or
other material now employed, or now contemplated to be employed, by the Company
or any Subsidiary infringes upon any rights held by any other Person. No claim
or litigation regarding any of the foregoing is pending or threatened, and no
patent, invention, device, application, principle or any statute, law, rule,
regulation, standard or code is pending or, to the knowledge of the Company,
proposed, which, in either case, would reasonably be expected to have a Material
Adverse Effect.


                                      -48-

      6.16 Subsidiaries. As of the Execution Date, the Company has no
Subsidiaries other than those specifically disclosed in PART (a) of SCHEDULE
6.16 hereto and has no material equity investments in any other corporation or
entity other than those specifically disclosed in PART (b) of SCHEDULE 6.16.

      6.17 Insurance. The properties of the Company and its Subsidiaries are
insured with financially sound and reputable insurance companies not Affiliates
of the Company, in such amounts, with such deductibles and covering such risks
as are customarily carried by companies engaged in similar businesses and owning
similar properties in localities where the Company or such Subsidiary operates.

      6.18 Full Disclosure. None of the representations or warranties made by
the Company or any Subsidiary in the Loan Documents as of the date such
representations and warranties are made or deemed made, and none of the
statements contained in any exhibit, report, written statement or certificate
furnished by or on behalf of the Company or any Subsidiary in connection with
the Loan Documents (including the offering and disclosure materials delivered by
or on behalf of the Company to the Lenders prior to the Execution Date), taken
as whole, contains any untrue statement of a material fact known to the Company
or omits any material fact known to the Company required to be stated therein or
necessary to make the statements made therein, in light of the circumstances
under which they are made, not misleading as of the time when made or delivered.

      6.19  Solvency.  The Company and its Subsidiaries, taken as a whole,
and the Company, individually, and each of the Guarantors, individually, is
Solvent.

      6.20 Labor Relations. There is (a) no significant unfair labor practice
complaint pending against the Company or any of its Subsidiaries or, to the
knowledge of the Company, threatened against any of them, and no significant
grievance or significant arbitration proceeding arising out of or under any
collective bargaining agreement is so pending against the Company or any of its
Subsidiaries or, to the knowledge of the Company, threatened against any of
them, (b) no significant strike, labor dispute, slowdown or stoppage pending
against the Company or any of its Subsidiaries or, to the knowledge of the
Company, threatened against the Company or any of its Subsidiaries and (c) to
the knowledge of the Company, no union representation question existing with
respect to the employees of the Company or any of its Subsidiaries and, to the
knowledge of the Company, no union organizing activities are taking place,
except (with respect to any matter specified in CLAUSE (a), (b) or (c) above,
either individually or in the aggregate) such as could not reasonably be
expected to have a Material Adverse Effect.

      6.21  Collateral Documents.

            (a) The provisions of each of the Collateral Documents are effective
to create in favor of the Administrative Agent for the benefit of the Lenders, a
legal, valid and enforceable first priority security interest in all right,
title and interest of the Company and its Subsidiaries in the collateral
described therein; and financing statements have been filed in the offices in
all of the jurisdictions listed in the schedule to the Security Agreement.

            (b) All representations and warranties of the Company and any of its
Subsidiaries party thereto contained in the Collateral Documents are true and
correct in all material respects.

      6.22  Yorktown Acquisition Documents.  To the best of the Company's
knowledge, each of the representations and warranties of the Yorktown Seller
set forth in the Yorktown Acquisition Documents is true and correct as of the
date hereof.


                                      -49-

                                   ARTICLE VII

                              AFFIRMATIVE COVENANTS

      So long as any Lender shall have any Commitment hereunder, or any Loan or
other Obligation shall remain unpaid or unsatisfied, or any Letter of Credit
shall remain outstanding, unless the Majority Lenders waive compliance in
writing:

      7.01 Financial Statements. The Company shall maintain for itself and each
Subsidiary, a system of accounting established and administered in accordance
with GAAP and deliver to the Administrative Agent and each Lender:

            (a) As soon as available, but not later than 90 days after the end
of each fiscal year a copy of the annual audited consolidated financial
statement of the Company as at the end of such year and the related consolidated
statements of income or operations, shareholders' equity and cash flows for such
year, setting forth in each case in comparative form the figures for the
previous fiscal year, and such financial statements shall be accompanied by the
opinion of a nationally recognized independent public accounting firm (the
"INDEPENDENT AUDITOR"), which opinion shall state that such consolidated
financial statements present fairly in all material respects the financial
position and results of operations of the Company and its Consolidated
Subsidiaries for the periods indicated in conformity with GAAP applied on a
basis consistent with prior years. Such opinion shall not be qualified or
limited because of a restricted or limited examination by the Independent
Auditor of any material portion of the Company's or any Subsidiary's records;
and

            (b) As soon as available, but not later than 45 days after the close
of each of the first three quarterly periods each fiscal year, a copy of the
unaudited consolidated balance sheet of the Company as of the end of such
quarter and the related consolidated statements of income, shareholders' equity
and cash flows for the period commencing on the first day and ending on the last
day of such quarter, and certified by a Responsible Officer as fairly
presenting, in accordance with GAAP (subject to ordinary, good faith year-end
audit adjustments), the financial position and the results of operations of the
Company and its Consolidated Subsidiaries.

      7.02  Certificates; Field Audits; Other Information.  The Company shall
furnish, at the Company's expense, to the Administrative Agent and each
Lender:

            (a) As soon as available, but not later than 12:00 noon (Dallas,
Texas time) on the last Business Day of each week, a Borrowing Base Report
certified by a Responsible Officer as fairly presenting the Eligible Refinery
Hydrocarbon Inventory, Eligible Lubricants Inventory, and Eligible Accounts
Receivable as of the last Business Day of the immediately preceding week, and,
if requested by the Administrative Agent or any Lender, a listing and aging of
Eligible Accounts Receivable by counterparty, and a schedule of inventory
volumes and market rates (with sources);

            (b) concurrently with the delivery of the financial statements
referred to in SUBSECTIONS 7.01(a) and (b), a Compliance Certificate executed by
a Responsible Officer;

            (c) on or before March 31 and September 30 of each year, commencing
September 30, 2002, a field audit and inventory valuation report prepared by
Bank of America Business Credit, Inc., in form and substance satisfactory to the
Administrative Agent;


                                      -50-

            (d) promptly, copies of all financial statements and reports that
the Company sends to its shareholders, and, promptly after the filing thereof,
copies of all financial statements and regular, periodical or special reports
(including Forms 10K, 10Q and 8K) that the Company or any Subsidiary may make
to, or file with, the SEC;

            (e) promptly upon execution thereof, copies of all material Yorktown
Term Loan Documents, and all material amendments and waivers related thereto;

            (f) with respect to the post-closing requirements set forth on
SCHEDULE 5.01, deliver, or cause to be delivered, to the Administrative Agent,
all agreements, documents, instruments, or other items listed on SCHEDULE 5.01
on or prior to the date specified for delivery thereof on SCHEDULE 5.01 or such
later date as the Administrative Agent may agree; and

            (g) promptly, such additional information regarding the business,
financial or corporate affairs of the Company or any Subsidiary as the
Administrative Agent, at the request of any Lender, may from time to time
reasonably request.

      7.03  Notices.  The Company shall promptly notify the Administrative
Agent and each Lender:

            (a) of the occurrence of any Default or Event of Default, and of the
occurrence or existence of any event or circumstance that would reasonably be
expected to become a Default or Event of Default;

            (b) of the receipt by the Company or any of its Subsidiaries of any
notice of default given or received pursuant to the Yorktown Acquisition
Documents, the Yorktown Term Loan Documents, or the Indentures or any other
agreement or instrument pertaining to Subordinated Notes;

            (c) of any matter that has resulted or may reasonably be expected to
result in a Material Adverse Effect, including (i) breach or non-performance of,
or any default under, a Contractual Obligation of the Company or any Subsidiary;
(ii) any dispute, litigation, investigation, proceeding or suspension between
the Company or any Subsidiary and any Governmental Authority; or (iii) the
commencement of, or any material development in, any litigation or proceeding
affecting the Company or any Subsidiary; including pursuant to any applicable
Environmental Laws;

            (d) of the occurrence of any of the following events affecting the
Company or any ERISA Affiliate (but in no event more than 10 days after such
event), and deliver to the Administrative Agent and each Lender a copy of any
notice with respect to such event that is filed with a Governmental Authority
and any notice delivered by a Governmental Authority to the Company or any ERISA
Affiliate with respect to such event: (i) an ERISA Event; (ii) a material
increase in the Unfunded Pension Liability of any Pension Plan; (iii) the
adoption of, or the commencement of contributions to, any Plan subject to
Section 412 of the Code by the Company or any ERISA Affiliate; or (iv) the
adoption of any amendment to a Plan subject to Section 412 of the Code, if such
amendment results in a material increase in contributions or Unfunded Pension
Liability;

            (e) of any material change in accounting policies or financial
reporting practices by the Company or any of its consolidated Subsidiaries;

            (f) of the entry by the Company or any of its Subsidiaries into any
Specified Swap Contract, specifying the identity of the Swap Provider, the
notional amount, the nature of the Specified Swap Contract and such other
information as the Administrative Agent reasonably may request;


                                      -51-

            (g) of the occurrence of any default, event of default, termination
event or other event under any Specified Swap Contract that after the giving of
notice, passage of time or both, would permit either counterparty to such
Specified Swap Contract to terminate early any or all trades relating to such
contract, and the liability, if any, of the Company or Subsidiary, as
applicable, in the event thereof;

            (h) upon the request from time to time of the Administrative Agent,
the Swap Termination Values, together with a description of the method by which
such values were determined, relating to any then outstanding Swap Contracts to
which the Company or any of its Subsidiaries is party; and

            (i) of the formation or acquisition of any Subsidiary.

            Each notice under this Section shall be accompanied by a written
statement by a Responsible Officer setting forth details of the occurrence
referred to therein, and stating what action the Company or any affected
Subsidiary proposes to take with respect thereto and at what time. Each notice
under SUBSECTION 7.03(a) shall describe with particularity any and all clauses
or provisions of this Agreement or other Loan Document that have been (or
foreseeably will be) breached or violated.

      7.04  Preservation of Corporate Existence, Etc.  The Company shall, and
shall cause each of its Material Subsidiaries to:

            (a) preserve and maintain in full force and effect its corporate
existence and good standing under the laws of its state or jurisdiction of
incorporation except where the failure to do so would not reasonably be expected
to have a Material Adverse Effect;

            (b) preserve and maintain in full force and effect all governmental
rights, privileges, qualifications, permits, licenses and franchises necessary
or desirable in the normal conduct of its business except where the failure to
do so would not reasonably be expected to have a Material Adverse Effect;

            (c) use reasonable efforts, in the ordinary course of business, to
preserve its business organization and goodwill except where the failure to do
so would not reasonably be expected to have a Material Adverse Effect; and

            (d) preserve or renew all of its registered patents, trademarks,
trade names and service marks, the non-preservation of which could reasonably be
expected to have a Material Adverse Effect.

      7.05 Maintenance of Property. The Company shall, and shall cause each of
its Material Subsidiaries to, maintain and preserve all its property which is
used or useful in its business in good working order and condition, ordinary
wear and tear excepted and to use the standard of care typical in the industry
in the operation and maintenance of its facilities except where the failure to
do so would not reasonably be expected to have a Material Adverse Effect.

      7.06  Insurance; Insurance and Condemnation Proceeds.

            (a) In addition to any other insurance requirements set forth in the
Collateral Documents, the Company shall, and shall cause each of its
Subsidiaries to, maintain, with financially sound and reputable independent
insurers, insurance with respect to its properties and business against loss or
damage of the kinds customarily insured against by Persons engaged in the same
or similar business, of such types and in such amounts as are customarily
carried under similar circumstances by


                                      -52-

such other Persons except where the failure to do so would not reasonably be
expected to have a Material Adverse Effect.

            (b) The Company shall cause the Administrative Agent, for the
ratable benefit of the Administrative Agent and the Lenders, to be named as
secured party or mortgagee and additional loss payee with respect to insurance
policies covering the Collateral, and as additional insured with respect to the
Company's general liability, auto liability, and excess liability insurance, in
a manner acceptable to the Administrative Agent. Each such policy of insurance
shall contain a clause or endorsement requiring the insurer to give not less
than 30 days prior written notice to the Administrative Agent in the event of
cancellation of the policy for any reason whatsoever and a clause or endorsement
stating that the interest of the Administrative Agent shall not be impaired or
invalidated by any act or neglect of the Company or its Subsidiaries for
purposes more hazardous than are permitted by such policy or similar language to
that effect. All premiums for such insurance shall be paid or caused to be paid
by the Company when due, and certificates of insurance and, if requested by the
Administrative Agent or any Lender, photocopies of the policies, shall be
delivered to the Administrative Agent, in each case in sufficient quantity for
distribution by the Administrative Agent to each of the Lenders. If the Company
or any Subsidiary fails to procure such insurance or to pay the premiums
therefor when due, the Administrative Agent may, and at the direction of the
Majority Lenders shall, do so from the proceeds of the Revolving Loans.

            (c) The Company shall promptly notify the Administrative Agent and
the Lenders of (i) any loss, damage, or destruction to the Collateral, and (ii)
any material loss, damage or destruction to any assets of the Company or its
Subsidiaries not constituting Collateral, in each case, whether or not covered
by insurance. So long as no Event of Default has occurred and is continuing, the
Company shall negotiate all claims for loss, damage or destruction consistent
with prudent business practice and, with respect to the assets subject to the
Yorktown Term Loan Documents, in accordance with the Yorktown Term Loan
Documents. From and after the occurrence of an Event of Default, the
Administrative Agent shall have the authority to negotiate all claims for loss,
damage or destruction of Collateral in the name of the Company.

            (d) The Administrative Agent is hereby authorized to collect all
insurance and condemnation proceeds in respect of Collateral directly and to
apply or remit them as follows: after deducting from such proceeds the
reasonable expenses, if any, incurred by the Administrative Agent in the
collection or handling thereof, the Administrative Agent shall apply such
proceeds, ratably, to the reduction of the Obligations and the payment of
Obligations then due under Specified Swap Contracts, pro rata.

            (e) With respect to insurance and condemnation proceeds relating to
the Company's or its Subsidiaries' assets not constituting Collateral, the
Administrative Agent shall permit the Company or its Subsidiaries, as
applicable, to use such proceeds, or any part thereof, to replace, repair,
restore or rebuild the relevant assets in a diligent and expeditious manner with
materials and workmanship of substantially the same quality as existed before
the loss, damage or destruction, so long as (i) no Default or Event of Default
has occurred and is continuing, (ii) the aggregate proceeds from and after the
Closing Date do not exceed $3,000,000, and (iii) the Company or the applicable
Subsidiary first demonstrates to the reasonable satisfaction of the
Administrative Agent and the Majority Lenders that the funds available to it
will be sufficient to complete such replacement, repair, restoration or
rebuilding in the manner provided therein. In all other circumstances, insurance
and condemnation proceeds shall be applied to the Obligations. The provisions of
this paragraph shall not apply to the insurance and condemnation proceeds with
respect to the Yorktown Refinery to the extent that such proceeds are applied to
repay the Yorktown Term Loan or used for the repair or rebuilding of the
Yorktown Refinery.


                                      -53-

      7.07 Payment of Obligations. The Company shall, and shall cause each of
its Material Subsidiaries to, pay and discharge as the same shall become due and
payable, all their respective obligations and liabilities, including: (a) all
tax liabilities, assessments and governmental charges or levies upon it or its
properties or assets, unless the same are being contested in good faith by
appropriate proceedings and adequate reserves in accordance with GAAP are being
maintained by the Company, such Guarantor or such Subsidiary; (b) all lawful
claims which, if unpaid, would by law become a Lien upon its property; and (c)
all Indebtedness, as and when due and payable, but subject to any subordination
provisions contained in any instrument or agreement evidencing such
Indebtedness; except where the failure to do so would not reasonably be expected
to have a Material Adverse Effect.

      7.08 Compliance with Laws. The Company shall, and shall cause each of its
Subsidiaries to, comply in all material respects with all Requirements of Law of
any Governmental Authority having jurisdiction over it or its business
(including the Federal Fair Labor Standards Act), except (x) such as may be
contested in good faith or as to which a bona fide dispute may exist or (y)
where the failure to do so would not reasonably be expected to have a Material
Adverse Effect.

      7.09 Compliance with ERISA. The Company shall, and shall cause each of its
ERISA Affiliates to: (a) maintain each Plan in compliance in all material
respects with the applicable provisions of ERISA, the Code and other federal or
state law; (b) cause each Plan which is qualified under Section 401(a) of the
Code to maintain such qualification; and (c) make all required contributions to
any Plan subject to Section 412 of the Code.

      7.10  Inspection of Property and Books and Records; Field Audit.

            (a) The Company shall, and shall cause each of its Subsidiaries to,
maintain proper books of record and account, in which full, true and correct
entries in conformity with GAAP consistently applied shall be made of all
financial transactions and matters involving the assets and business of the
Company and such Subsidiaries.

            (b) The Company and each Guarantor shall, and shall cause each of
their Subsidiaries to, permit, representatives and independent contractors of
the Administrative Agent or any Lender to visit and inspect any of their
respective properties, to examine their respective corporate, financial and
operating records, and make copies thereof or abstracts therefrom, and to
discuss their respective affairs, finances and accounts with their respective
directors, officers, and independent public accountants, all at the expense of
the Company and at such reasonable times during normal business hours and as
often as may be reasonably desired, upon reasonable advance notice to the
Company; provided, however, when an Event of Default exists the Administrative
Agent or any Lender may do any of the foregoing at the expense of the Company at
any time during normal business hours and without advance notice.

            (c) Pursuant to SECTION 7.02(c), the Company has agreed to obtain
and deliver field audit and inventory valuations at the expense of the Company,
as therein provided. In addition, when an Event of Default exists hereunder, the
Administrative Agent or any authorized representative or agent thereof may
conduct such field audit and inventory valuation at the expense of the Company
at any time during normal business hours and without advance notice.

      7.11 Environmental Laws. The Company shall, and shall cause each of its
Subsidiaries to, conduct its operations and keep and maintain its property in
compliance with all Environmental Laws except where the failure to do so would
not reasonably be expected to have a Material Adverse Effect.


                                      -54-

      7.12  New Subsidiary Guarantors; New Subsidiary Security Agreements.

            (a) If, at any time after the date of this Agreement, there exists
any Subsidiary organized under the laws of any state in the United States of
America that (i) has total assets with a book value of $2,000,000 or more or
(ii) executes a guaranty agreement with respect to the Indentures or any other
indebtedness for borrowed money, then the Company shall cause each such
Subsidiary to do the following: (x) execute and deliver to the Administrative
Agent a Supplemental Guaranty and (y) furnish the Administrative Agent with a
written opinion of counsel for each such Subsidiary Guarantor in substantially
the form set forth in EXHIBITS D-1 and D-2; in each case with such revisions as
may be reasonably requested by the Administrative Agent or the Majority Lenders.

            (b) The Company also shall cause each Person that becomes a
Subsidiary after the date of this Agreement (excluding any Subsidiary that has
no assets and conducts no business, but including any "inactive" Subsidiary that
resumes active business at any time after the date of this Agreement) to (i)
execute and deliver to the Administrative Agent a Security Agreement in
substantially the form of EXHIBIT I-2 in favor of the Administrative Agent, the
Lenders and the other Swap Providers, together with such financing statements
and other documents and instruments related thereto as the Administrative Agent
or the Majority Lenders may require; (ii) take all other actions necessary or,
in the opinion of the Administrative Agent or the Majority Lenders, desirable to
perfect and protect the first priority Lien created by the Collateral Documents,
and to enhance the Administrative Agent's ability to preserve and protect its
interests in and access to the Collateral; and (iii) furnish the Administrative
Agent with a written opinion of counsel for each such Person in substantially
the form set forth in EXHIBITS D-1 and D-2; in each case with such revisions as
may be reasonably requested by the Administrative Agent or the Majority Lenders.

            (c) Notwithstanding SUBSECTIONS (a) and (b) of this SECTION 7.12, as
long as (i) Navajo Convenient Stores Co., LLC has total assets with a book value
of less than $5,000,000, and (ii) Giant Yorktown Holding Company and Giant
Southwest Refining, LLC have no assets, Navajo Convenient Stores Co., LLC, Giant
Yorktown Holding Company and Giant Southwest Refining, LLC shall not be required
to execute a Supplemental Guaranty or a Security Agreement.

      7.13 Use of Proceeds. The Company shall use the proceeds of the Revolving
Loans as follows: (a) proceeds of Loans made on the Closing Date shall be used
to refinance outstanding loans under the Existing Credit Agreement and, in an
amount not to exceed $40,000,000, to finance a portion of the Yorktown
Acquisition, and (b) proceeds of Loans made on the Closing Date and thereafter
may be used for working capital and other lawful purposes.

      7.14 Subordinated Indebtedness. The Company shall maintain not less than
$350,000,000 principal amount of Subordinated Notes outstanding at all times
throughout the term hereof. The proceeds of the BNY $200,000,000 Subordinated
Notes Offering shall be used (i) to make an irrevocable deposit pursuant to the
Escrow Arrangement on the Closing Date in an amount sufficient to redeem the NBD
Subordinated Notes in full, and, within forty-five (45) days thereafter, shall
be used to repay the NBD Subordinated Notes in full, (ii) to finance a portion
of the Yorktown Acquisition, and (iii) to pay transaction costs incurred in
connection with the BNY $200,000,000 Subordinated Notes Offering.

      7.15 Further Assurances. Promptly upon request by the Administrative Agent
or the Majority Lenders, the Company shall (and shall cause any of its
Subsidiaries to) do, execute, acknowledge, deliver, record, re-record, file,
re-file, register and re-register, any and all such further acts, deeds,
conveyances, security agreements, mortgages, assignments, estoppel certificates,
financing statements and continuations thereof, termination statements, notices
of assignment, transfers, certificates, assurances and other instruments the
Administrative Agent or such Lenders, as the case may be, may reasonably require


                                      -55-

from time to time in order (i) to carry out more effectively the purposes of
this Agreement or any other Loan Document, (ii) to subject to the Liens created
by any of the Collateral Documents any of the properties, rights or interests
covered by any of the Collateral Documents, (iii) to perfect and maintain the
validity, effectiveness and priority of any of the Collateral Documents and the
Liens intended to be created thereby, and (iv) to better assure, convey, grant,
assign, transfer, preserve, protect and confirm to the Administrative Agent and
Lenders the rights granted or now or hereafter intended to be granted to the
Lenders under any Loan Document or under any other document executed in
connection therewith.

                                  ARTICLE VIII

                               NEGATIVE COVENANTS

      So long as any Lender shall have any Commitment hereunder, or any Loan or
other Obligation shall remain unpaid or unsatisfied, or any Letter of Credit
shall remain outstanding, unless the Majority Lenders waive compliance in
writing:

      8.01 Limitation on Liens. The Company shall not, and shall not permit any
of its Subsidiaries to, directly or indirectly, make, create, incur, assume or
suffer to exist any Lien upon or with respect to any part of its property,
whether now owned or hereafter acquired, other than the following (collectively,
"PERMITTED LIENS"):

            (a) (i) any Lien (other than a Lien on property constituting
Collateral) existing on property of the Company or any Subsidiary on the
Execution Date and set forth in SCHEDULE 8.01 securing Indebtedness outstanding
on such date, and (ii) Liens on the Yorktown Assets described in SCHEDULE 8.01
owned by Giant Yorktown securing Giant Yorktown's obligations under the Yorktown
Term Loan Agreement;

            (b) any Lien created under any Loan Document;

            (c) Liens for taxes, fees, assessments or other governmental charges
which are not delinquent or remain payable without penalty, or to the extent
that non-payment thereof is permitted by SECTION 7.07;

            (d) carriers', warehousemen's, mechanics', landlords',
materialmen's, repairmen's or other similar non-consensual statutory Liens
(including statutory liens in favor of mineral interest owners, securing only
amounts due for the purchase price, state royalty and taxes in respect of
product severed from a production unit in New Mexico in which such interest
owner owns an interest) arising in the ordinary course of business which are not
delinquent or remain payable without penalty or which are being contested in
good faith and by appropriate proceedings, which proceedings have the effect of
preventing the forfeiture or sale of the property subject thereto;

            (e) Liens (other than any Lien imposed by ERISA and other than Liens
on the Collateral) consisting of pledges or deposits required in the ordinary
course of business in connection with workers' compensation, unemployment
insurance and other social security legislation;

            (f) Liens, easements, rights-of-way, restrictions, defects or other
exceptions to title and other similar encumbrances with respect to real property
incurred in the ordinary course of business which, in the aggregate, are not
substantial in amount, and which do not in any case materially detract from the
value of the property subject thereto or interfere with the ordinary conduct of
the businesses of the Company and its Subsidiaries;


                                      -56-

            (g) Subject to the provisions of the Deposit Account Control
Agreements, Liens (other than Liens on the Collateral) arising solely by virtue
of any statutory or common law provision relating to banker's liens, rights of
set-off or similar rights and remedies as to deposit accounts or other funds
maintained with a creditor depository institution; provided that (i) such
deposit account is not a dedicated cash collateral account and is not subject to
restrictions against access by the Company, (ii) the Company (or applicable
Subsidiary) maintains (subject to such right of set off) dominion and control
over such account(s), and (iii) such deposit account is not intended by the
Company, any Guarantor or any Subsidiary to provide cash collateral to the
depository institution;

            (h) Liens (other than Liens on the Collateral) on any property
acquired or held by the Company or its Subsidiaries in the ordinary course of
business, securing Indebtedness incurred or assumed for the purpose of financing
all or any part of the cost of acquiring such property after the date hereof;
provided that (i) any such Lien has attached prior to acquisition of such
property or attaches to such property concurrently with or within 20 days after
the acquisition thereof, (ii) such Lien attaches solely to the property so
acquired in such transaction, (iii) the principal amount of the debt secured
thereby does not exceed 100% of the cost of such property, and (iv) the
principal amount of the Indebtedness secured by any and all such purchase money
security interests shall not exceed $1,000,000 in the aggregate at any time
outstanding; and

            (i) Any Liens (other than Liens on the Collateral) not otherwise
described in SUBSECTION 8.01(a) through (g) above, provided that the
Indebtedness and other obligations secured by such Liens shall not at any time
exceed $1,000,000 in the aggregate at any time outstanding.

      8.02 Disposition of Assets. The Company shall not, and shall not permit
any of its Subsidiaries to, directly or indirectly, sell, assign, lease, convey,
transfer or otherwise dispose of (whether in one or a series of transactions)
(collectively, "DISPOSITIONS") any property (including accounts and notes
receivable, with or without recourse) or enter into any agreement to do any of
the foregoing, except:

            (a) Dispositions of inventory, or used, worn-out or surplus
equipment, all in the ordinary course of business;

            (b) the sale of equipment to the extent that such equipment is
exchanged for credit against the purchase price of similar replacement
equipment, or the proceeds of such sale are reasonably promptly applied to the
purchase price of such replacement equipment;

            (c) Dispositions of assets by the Company or any Subsidiary to the
Company or any Wholly-Owned Subsidiary (other than Giant Yorktown Holding
Company and Giant Southwest Refining, LLC); and

            (d) Dispositions of assets not otherwise permitted hereunder which
are made for fair market value, provided, that (i) at the time of any such
Disposition, no Event of Default shall exist or shall result from such
Disposition, and (ii) the aggregate book value of assets disposed of by the
Company and its Subsidiaries in any fiscal year, beginning with fiscal year
2002, shall not exceed $5,000,000.

      8.03 Consolidations and Mergers. The Company shall not, and shall not
permit any of its Material Subsidiaries to, merge, consolidate with or into, or
convey, transfer, lease or otherwise dispose of (whether in one transaction or
in a series of transactions) all or substantially all of its assets (whether now
owned or hereafter acquired) to or in favor of any Person, except:


                                      -57-

            (a) the Company may merge with any Person, provided that the Company
is the surviving Person;

            (b) any Subsidiary may merge with any one or more Subsidiaries,
provided that if any transaction shall be between a Subsidiary that is not a
Wholly-Owned Subsidiary and a Wholly-Owned Subsidiary, the Wholly-Owned
Subsidiary shall be the continuing or surviving corporation; and

            (c) any Subsidiary may sell all or substantially all of its assets
(upon voluntary liquidation or otherwise), to the Company or a Wholly-Owned
Subsidiary (other than Giant Yorktown Holding Company and Giant Southwest
Refining, LLC).

      8.04 Loans and Investments. The Company shall not purchase or acquire, or
permit any of its Subsidiaries to purchase or acquire, or make any commitment
therefor, any capital stock, equity interest, or any obligations or other
securities of, or any interest in, any Person, or make or commit to make any
Acquisitions, or make or commit to make any advance, loan, extension of credit
or capital contribution to or any other investment in, any Person including any
Affiliate of the Company, except for:

            (a) investments in Cash Equivalents;

            (b) extensions of credit in the nature of accounts receivable or
notes receivable arising from the sale or lease of goods or services in the
ordinary course of business;

            (c) extensions of credit by the Company to any of its Wholly-Owned
Subsidiaries or by any of its Wholly-Owned Subsidiaries to the Company or
another of its Wholly-Owned Subsidiaries, and investments by the Company or any
of its Subsidiaries in any Subsidiary that, prior to such investment, is a
Wholly-Owned Subsidiary; and

            (d) extensions of credit described in SCHEDULE 8.04 through and
including the maturity date thereof, but not any increases or renewals.

            (e) investments by the Company and its Subsidiaries not otherwise
permitted in SUBSECTIONS 8.04(A) through (D), which do not exceed $1,000,000 in
the aggregate at any time outstanding.

      8.05 Limitation on Indebtedness and Contingent Obligations. The Company
shall not, and shall not permit any of its Subsidiaries to, create, incur,
assume, suffer to exist, or otherwise become or remain directly or indirectly
liable with respect to, any Indebtedness or Contingent Obligations, except:

            (a) Indebtedness incurred pursuant to this Agreement;

            (b) Other Indebtedness and Contingent Obligations described on
SCHEDULE 8.05;

            (c) Indebtedness of the Company under Subordinated Notes, not to
exceed $350,000,000 in principal amount at any time outstanding, and Guaranty
Obligations of Subsidiaries of the Company in respect thereto, provided that
each such Subsidiary shall also be a Guarantor of the Obligations;

            (d) Indebtedness of Giant Yorktown under the Yorktown Term Loan, and
Guaranty Obligations of the Company and its Subsidiaries who are Guarantors
hereunder in respect of the


                                      -58-

Yorktown Term Loan, in an aggregate principal amount not to exceed $40,000,000
at any time outstanding;

            (e) Obligations (contingent or otherwise) of the Company existing or
arising under any Swap Contract, provided that (i) such obligations are (or
were) entered into in the ordinary course of business for the purpose of
directly mitigating risks associated with liabilities, commitments, investments,
assets, or property held or reasonably anticipated, and not for purposes of
speculation or taking a "market view"; and (ii) such Swap Contract does not
contain any provision exonerating the non-defaulting party from its obligation
to make payments on outstanding transactions to the defaulting party;

            (f) Contingent Obligations consisting of endorsements for
collections or deposit in the ordinary course or business;

            (g) obligations of the Company in respect of Margin Payments under
the Yorktown Asset Purchase Agreement (as in effect on the effective date
thereof); and

            (h) Indebtedness in respect of purchase money obligations within the
limitations set forth in SECTION 8.01(H).

      8.06 Transactions with Affiliates. The Company shall not, and shall not
permit any of its Subsidiaries to, enter into any transaction with or make any
payment or transfer to any Affiliate of the Company, except in the ordinary
course of business and upon fair and reasonable terms no less favorable to the
Company or such Subsidiary than would obtain in a comparable arm's-length
transaction with a Person not an Affiliate of the Company or such Subsidiary.

      8.07 Use of Proceeds. The Company shall not, and shall not suffer or
permit any Subsidiary to, use any portion of the Loan proceeds or any Letter of
Credit, directly or indirectly, (i) to purchase or carry Margin Stock, (ii) to
repay or otherwise refinance indebtedness of the Company or others incurred to
purchase or carry Margin Stock, (iii) to extend credit for the purpose of
purchasing or carrying any Margin Stock, or (iv) to acquire any security in any
transaction that is subject to Section 13 or 14 of the Exchange Act.

      8.08  [Intentionally Blank]

      8.09 Restricted Payments. The Company shall not, and shall not permit any
of its Subsidiaries to, purchase, redeem or otherwise acquire for value any
shares of its capital stock or any warrants, rights or options to acquire such
shares, now or hereafter outstanding (collectively "RESTRICTED PAYMENTS");
provided that immediately prior to and after giving effect to any of the
following described payments, there exists no Default or Event of Default:

            (a) any Subsidiary may declare and make Restricted Payments to the
Company or any Wholly-Owned Subsidiary; and

            (b) the Company may purchase, redeem or otherwise acquire shares of
its common stock or warrants or options to acquire any such shares with the
proceeds received from the substantially concurrent issue of new shares of its
common stock.

      8.10 Subsidiary Dividends. The Company will not, and it will not permit
any of its Subsidiaries to, be a party to or enter into any agreement,
instrument or other document which prohibits or restricts in any way, or to
otherwise, directly or indirectly, create or cause or suffer to exist or become
effective any encumbrance or restriction on the ability of any Subsidiary of the
Company to (a) pay


                                      -59-

dividends or make any other distributions in respect of its capital stock or any
other equity interest or participation in any Subsidiary or pay or repay any
Indebtedness owed to the Company or any Subsidiary, (b) make loans or advances
to the Company or (c) transfer any of its properties or assets to the Company or
any Subsidiary (subject to the rights of any holder of a Lien on any such
properties or assets which Lien is a Permitted Lien); provided, however, that
the Company and its Subsidiaries may agree to restrictions on their ability to
transfer and encumber assets pursuant to the Yorktown Term Loan Documents in
effect on the date hereof.

      8.11 Subordinated Notes. The Company shall not, and shall not permit any
Subsidiary to: (a) amend, modify or change, or consent or agree to any
amendment, modification or change to, any of the terms of the Indentures, the
Subordinated Notes or the guarantees executed in connection therewith, other
than (i) any such amendment or modification which would extend the maturity or
reduce the amount of any payment of principal thereof or which would reduce the
rate or extend the date of payment of interest thereon, (ii) ministerial
amendments that do not affect the Lenders, including amendments pursuant to
Sections 9.01(1) through 9.01(5) of the BNY $150,000,000 Indenture and the BNY
$200,000,000 Indenture, and (iii) such other amendments and modifications
acceptable to the Majority Lenders; or (b) make any payments to the holders of
the Subordinated Notes or to any trustee acting under the Indentures which is
prohibited by the Indentures or (c) make any prepayment of or redeem in whole or
in part the Subordinated Notes.

      8.12 Minimum Consolidated Tangible Net Worth. From and after the Execution
Date, the Company will maintain at all times Consolidated Tangible Net Worth in
an amount not less than the sum of (i) $99,110,000 plus (ii) 50% of Consolidated
Net Income computed on a cumulative basis for the period beginning January 1,
2002 and ending on the date of determination (provided that no negative
adjustment will be made in the event that Consolidated Net Income is a deficit
figure for such period), plus (iii) 75% of the aggregate amount of the net
assets (cash or otherwise) received by the Company from the issuance of any
class of capital stock after December 31, 2001.

      8.13  Minimum Fixed Charge Coverage Ratio.  The Company shall not
permit the Fixed Charge Coverage Ratio as of the end of any fiscal quarter to
be less than 1.10 to 1.00.

      8.14 Total Leverage Ratio. The Company shall not permit the Total Leverage
Ratio at any time during each period set forth below to be greater than the
ratio set forth below opposite such period:



                                          Maximum Total
                Period                    Leverage Ratio
                ------                    --------------
                                       
      Closing Date through 3/31/03         4.25 to 1.00
      4/1/03 through 3/31/04               4.00 to 1.00
      4/1/04 and thereafter                3.75 to 1.00



      8.15  Senior Leverage Ratio.  The Company shall not permit the Senior
Leverage Ratio at any time to be greater than 1.50 to 1.00.

      8.16 ERISA. The Company shall not, and shall not suffer or permit any of
its ERISA Affiliates to: (a) engage in a prohibited transaction or violation of
the fiduciary responsibility rules with respect to any Plan which has resulted
or could reasonably expected to result in liability of the Company in an
aggregate amount which could have a Material Adverse Effect; or (b) engage in a
transaction that could be subject to Section 4069 or 4212(c) of ERISA, or permit
any Plan to (a) engage in any non-exempt "prohibited transaction" (as defined in
Section 4975 of the Code); (b) fail to comply with ERISA


                                      -60-

or any other applicable Laws; or (c) incur any material "accumulated funding
deficiency" (as defined in Section 302 or ERISA), which, with respect to each
event listed above, could be reasonably expected to have a Material Adverse
Effect.

      8.17 Change in Business. The Company shall not, and shall not permit any
Subsidiary to, engage in any business or activity other than the Principal
Business.

      8.18 Accounting Changes. The Company shall not, and shall not suffer or
permit any Subsidiary to, make any significant change in accounting treatment or
reporting practices, except as required by GAAP, or change the fiscal year of
the Company or of any Subsidiary.

                                   ARTICLE IX

                                EVENTS OF DEFAULT

      9.01  Event of Default.  Any of the following shall constitute an
"EVENT OF DEFAULT":

            (a) Non-Payment. The Company fails to pay, (i) when and as required
to be paid herein, any amount of principal of any Loan, or (ii) within two (2)
Business Days after the same becomes due, any L/C Obligation or any interest,
fee or other amount payable hereunder or under any other Loan Document; or

            (b) Representation or Warranty. Any representation or warranty by
the Company or any Subsidiary made or deemed made herein, in any other Loan
Document, or which is contained in any certificate, document or financial or
other statement by the Company, any Subsidiary, or any Responsible Officer,
furnished at any time under this Agreement, or in or under any other Loan
Document, is incorrect in any material respect on or as of the date made or
deemed made; or

            (c) Specific Defaults. The Company (i) fails to perform or observe
any term, covenant or agreement contained in SECTION 7.02(a), 7.02(f), 7.03(a),
7.06, 7.14, 8.12, 8.13, 8.14 or 8.15; or (ii) fails to perform or observe any
term, covenant or agreement contained in ARTICLE VIII (which is not specified in
the foregoing CLAUSE (c)(i)), and such default shall continue unremedied for a
period of 15 days after the occurrence thereof; or

            (d) Other Defaults. The Company or any Subsidiary fails to perform
or observe any other term or covenant contained in this Agreement or any other
Loan Document, and such default shall continue unremedied for a period of 30
days after the earlier of (i) the date upon which a Responsible Officer knew or
reasonably should have known of such default or (ii) the date upon which written
notice thereof is given to the Company by the Administrative Agent or any
Lender; or


                                      -61-

            (e) Cross-Default.

            (i) The Company or any Subsidiary (A) fails to make any payment in
respect of any Indebtedness or Contingent Obligation having an aggregate
principal amount (including undrawn committed or available amounts and including
amounts owing to all creditors under any combined or syndicated credit
arrangement) of more than $5,000,000, or any Specified Swap Contract (whatever
the amount), when due (whether by scheduled maturity, required prepayment,
acceleration, demand, or otherwise) and such failure continues after the
applicable grace or notice period, if any, specified in the relevant document on
the date of such failure; or (B) fails to perform or observe any other condition
or covenant, or any other event shall occur or condition exist, under any
agreement or instrument relating to any such Indebtedness or Contingent
Obligation having an aggregate principal amount (including undrawn committed or
available amounts and including amounts owing to all creditors under any
combined or syndicated credit arrangement) of more than $5,000,000, or any
Specified Swap Contract (whatever the amount), if the effect of such failure,
event or condition is to cause, or to permit the holder or holders of such
Indebtedness or beneficiary or beneficiaries of such Indebtedness (or a trustee
or agent on behalf of such holder or holders or beneficiary or beneficiaries) to
cause such Indebtedness, Specified Swap Contract or Contingent Obligation to be
declared to be due and payable prior to its stated maturity, or cash collateral
in respect thereof to be demanded; or (C) any Indebtedness or Contingent
Obligation of the Company or any Subsidiary in excess of $5,000,000, or any
Specified Swap Contract (whatever the amount), shall be declared due and payable
prior to its stated maturity or cash collateral is demanded in respect of such
Contingent Obligations or Specified Swap Contracts; or

            (ii) An "Event of Default" shall occur under and as defined in the
Yorktown Term Loan Agreement, or a "Loan Agreement Event of Default" shall occur
under and as defined in the Yorktown Term Loan Agreement, or any other event
shall occur or condition shall exist if the effect of such event or condition is
to cause, or to permit the holders of obligations under any of the Yorktown Term
Loan Documents to cause, any Indebtedness of Giant Yorktown, the Company, or any
of its Subsidiaries under any of the Yorktown Term Loan Documents to become due
prior to the stated maturity or stated due date thereof; or

            (iii) The Company (A) fails to make any Margin Payment under and as
defined in the Yorktown Asset Purchase Agreement when due and such failure
continues after the applicable grace or notice period, if any, specified in the
Yorktown Asset Purchase Agreement; or (B) fails to perform or observe any other
condition or covenant, or any other event shall occur or condition exist under
the Yorktown Asset Purchase Agreement, if the effect of such failure, event or
condition is to cause the Margin Payment, or any portion thereof, to be
immediately due and payable prior to any scheduled payment date therefore or
prior to its stated maturity (whether pursuant to SECTION 3(e)(iv) therein or
otherwise); or

            (f) Insolvency; Voluntary Proceedings. The Company or any Subsidiary
(i) generally fails to pay, or admits in writing its inability to pay, its debts
as they become due, subject to applicable grace periods, if any, whether at
stated maturity or otherwise; (ii) commences any Insolvency Proceeding with
respect to itself; or (iii) takes any action to effectuate or authorize any of
the foregoing; or

            (g) Involuntary Proceedings. (i) Any involuntary Insolvency
Proceeding is commenced or filed against the Company or any Material Subsidiary,
or any writ, judgment, warrant of attachment, execution or similar process, is
issued or levied against all or a substantial part of the Company's or any
Material Subsidiary's properties, and any such proceeding or petition shall not
be dismissed, or such writ, judgment, warrant of attachment, execution or
similar process shall not be released, vacated or fully bonded within 60 days
after commencement, filing or levy; (ii) the Company or


                                      -62-

any Material Subsidiary admits the material allegations of a petition against it
in any Insolvency Proceeding, or an order for relief (or similar order under
non-U.S. law) is ordered in any Insolvency Proceeding; or (iii) the Company or
any Material Subsidiary acquiesces in the appointment of a receiver, trustee,
custodian, conservator, liquidator, mortgagee in possession (or agent therefor),
or other similar Person for itself or a substantial portion of its property or
business; or

            (h) ERISA. (i) An ERISA Event shall occur with respect to a Pension
Plan or Multiemployer Plan which has resulted or could reasonably be expected to
result in liability of the Company or a Subsidiary under Title IV of ERISA to
the Pension Plan, Multiemployer Plan or the PBGC in an aggregate amount in
excess of $3,000,000 and such amount is not paid when due; or (ii) the aggregate
amount of Unfunded Pension Liability among all Pension Plans is in an aggregate
amount and could reasonably be expected to cause a Material Adverse Effect; or
(iii) the Company or any ERISA Affiliate fails to pay when due any installment
payment with respect to its withdrawal liability under Section 4201 of ERISA
under a multi-employer Plan in an aggregate amount in excess of $3,000,000;

            (i) Monetary Judgments. One or more final judgments, final orders,
decrees or arbitration awards is entered against the Company or any Subsidiary
involving in the aggregate a liability (to the extent not covered by independent
third-party insurance as to which the insurer does not dispute coverage) as to
any single or related series of transactions, incidents or conditions, of
$3,000,000 or more, and the same shall remain unsatisfied, unvacated and
unstayed pending appeal for a period of 30 days after the entry thereof; or

            (j) Change of Control. There occurs any Change of Control; or

            (k) Loss of Permit. Any Governmental Authority revokes or fails to
renew any material license, permit or franchise of the Company or any Material
Subsidiary, or the Company or any Material Subsidiary for any reason loses any
material license, permit or franchise, or the Company or any Material Subsidiary
suffers the imposition of any restraining order, escrow, suspension or impound
of funds in connection with any proceeding (judicial or administrative) with
respect to any material license, permit or franchise; or

            (l)   Adverse Change.  There occurs a Material Adverse Effect; or

            (m) Guaranty Default. A Guaranty is for any reason partially
(including with respect to future advances) or wholly revoked or invalidated, or
otherwise ceases to be in full force and effect, or such Guarantor or any other
Person contests in any manner the validity or enforceability thereof or denies
that it has any further liability or obligation thereunder; or any event
described at SUBSECTIONS (f) or (g) of this Section occurs with respect to such
Guarantor; or

            (n) Invalidity of Subordination Provisions. The subordination
provisions of any of the Indentures or Subordinated Notes are for any reason
revoked or invalidated, the Trustee under either of the Indentures, any
successor trustee thereto or any other Person contests in any material respect
the validity or enforceability thereof, or the Indebtedness hereunder does not
have the priority contemplated by this Agreement or the Indenture or such
subordination provisions; or

            (o) Prepayment of Subordinated Notes. If the Company or any
Subsidiary is required for any reason to prepay, redeem or purchase in whole or
in part any of the Subordinated Notes prior to the scheduled maturity thereof;
or


                                      -63-

            (p) Collateral.

               (i) any provision of any Collateral Document shall for any reason
      cease to be valid and binding on or enforceable against the Company or any
      Subsidiary party thereto or the Company or any Subsidiary shall so state
      in writing or bring an action to limit its obligations or liabilities
      thereunder; or

              (ii) any Collateral Document shall for any reason (other than
      pursuant to the terms thereof) cease to create a valid security interest
      in the Collateral purported to be covered thereby or such security
      interest shall for any reason cease to be a perfected and first priority
      security interest.

      9.02 Remedies. If any Event of Default occurs and is continuing, the
Administrative Agent shall, at the request of, or may, with the consent of, the
Majority Lenders, do any or all of the following:

            (a) declare the commitment of each Lender to make Loans and any
obligation of the Issuing Bank to Issue Letters of Credit to be terminated,
whereupon such Commitments shall be terminated;

            (b) declare an amount equal to the maximum aggregate amount that is
or at any time thereafter may become available for drawing under any outstanding
Letters of Credit (whether or not any beneficiary shall have presented, or shall
be entitled at such time to present, the drafts or other documents required to
draw under such Letters of Credit) to be immediately due and payable, and
require that the Company deliver such payments to the Administrative Agent to
Cash Collateralize the L/C Obligations;

            (c) declare the unpaid principal amount of all outstanding Loans,
all interest accrued and unpaid thereon, and all other amounts owing or payable
hereunder or under any other Loan Document to be immediately due and payable,
without presentment, demand, protest, notice of intention to accelerate, notice
of acceleration or any other notice of any kind, all of which are hereby
expressly waived by the Company; and

            (d) exercise on behalf of itself and the Lenders all rights and
remedies available to it and the Lenders under the Loan Documents or applicable
law;

provided, however, that upon the occurrence of any event specified in SUBSECTION
(f) or (g) of SECTION 9.01 (in the case of CLAUSE (i) of SUBSECTION (g) upon the
expiration of the 60-day period mentioned therein), the obligation of each
Lender to make Loans and any obligation of the Issuing Bank to Issue Letters of
Credit shall automatically terminate and without further act of the
Administrative Agent, the Issuing Bank or any Lender and without presentment,
demand, protest, notice of intention to accelerate, notice of acceleration or
any other notice of any kind, all of which are hereby expressly waived by the
Company, the unpaid principal amount of all outstanding Loans and all interest
and other amounts as aforesaid shall automatically become due and payable and an
amount equal to the maximum aggregate amount that is or at any time thereafter
may become available for drawing under any outstanding Letters of Credit
(whether or not any beneficiary shall have presented, or shall be entitled at
such time to present, the drafts or other documents required to draw under such
Letters of Credit) shall automatically be due and payable and shall be delivered
to the Administrative Agent to be held as cash collateral for the L/C
Obligations and shall not be subject to or affected by any right of setoff,
counterclaim or recoupment which the Company may now or hereafter have against
any beneficiary, the Issuing Bank, or any other Person for any reason
whatsoever.


                                      -64-

      9.03 Rights Not Exclusive. The rights provided for in this Agreement and
the other Loan Documents are cumulative and are not exclusive of any other
rights, powers, privileges or remedies provided by law or in equity, or under
any other instrument, document or agreement now existing or hereafter arising.

                                    ARTICLE X

                            THE ADMINISTRATIVE AGENT

      10.01 Appointment and Authorization.

            (a) Each Lender hereby irrevocably (subject to SECTION 10.09)
appoints, designates and authorizes the Administrative Agent to take such action
on its behalf under the provisions of this Agreement and each other Loan
Document and to exercise such powers and perform such duties as are expressly
delegated to it by the terms of this Agreement or any other Loan Document,
together with such powers as are reasonably incidental thereto. Notwithstanding
any provision to the contrary contained elsewhere in this Agreement or in any
other Loan Document, the Administrative Agent shall not have any duties or
responsibilities, except those expressly set forth herein, nor shall the
Administrative Agent have or be deemed to have any fiduciary relationship with
any Lender, and no implied covenants, functions, responsibilities, duties,
obligations or liabilities shall be read into this Agreement or any other Loan
Document or otherwise exist against the Administrative Agent. Without limiting
the generality of the foregoing sentence, the use of the term "agent" in this
Agreement or any other Loan Document with reference to the Administrative Agent
is not intended to connote any fiduciary or other implied (or express)
obligations arising under agency doctrine of any applicable law. Instead, such
term is used merely as a matter of market custom, and is intended to create or
reflect only an administrative relationship between independent contracting
parties.

            (b) The Issuing Bank shall act on behalf of the Lenders with respect
to any Letters of Credit Issued by it and the documents associated therewith
until such time and except for so long as the Administrative Agent may agree at
the request of the Majority Lenders to act for such Issuing Bank with respect
thereto; provided, however, that the Issuing Bank shall have all of the benefits
and immunities (i) provided to the Administrative Agent in this ARTICLE X with
respect to any acts taken or omissions suffered by the Issuing Bank in
connection with Letters of Credit Issued by it or proposed to be Issued by it
and the application and agreements for letters of credit pertaining to the
Letters of Credit as fully as if the term "Administrative Agent," as used in
this ARTICLE X, included the Issuing Bank with respect to such acts or
omissions, and (ii) as additionally provided in this Agreement with respect to
the Issuing Bank.

            (c) Each Lender hereby authorizes the Administrative Agent to
execute the Yorktown Intercreditor Agreement on behalf of the Lenders.

      10.02 Delegation of Duties. The Administrative Agent may execute any of
its duties under this Agreement or any other Loan Document by or through agents,
employees or attorneys-in-fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties. The Administrative Agent shall
not be responsible for the negligence or misconduct of any agent or
attorney-in-fact that it selects with reasonable care.

      10.03 Liability of Administrative Agent. None of the Agent-Related Persons
shall (i) be liable for any action taken or omitted to be taken by any of them
under or in connection with this Agreement or any other Loan Document or the
transactions contemplated hereby (except for its own gross negligence or willful
misconduct), or (ii) be responsible in any manner to any of the Lenders for any
recital, statement, representation or warranty made by the Company or any
Subsidiary or Affiliate of the Company, or any


                                      -65-

officer thereof, contained in this Agreement or in any other Loan Document, or
in any certificate, report, statement or other document referred to or provided
for in, or received by the Administrative Agent under or in connection with,
this Agreement or any other Loan Document, or for the value of or title to any
Collateral, or the validity, effectiveness (other than such Agent-Related
Person's own due execution and delivery), genuineness, enforceability or
sufficiency of this Agreement or any other Loan Document, or for any failure of
the Company or any other party to any Loan Document to perform its obligations
hereunder or thereunder. No Agent-Related Person shall be under any obligation
to any Lender to ascertain or to inquire as to the observance or performance of
any of the agreements contained in, or conditions of, this Agreement or any
other Loan Document, or to inspect the properties, books or records of the
Company or any of the Company's Subsidiaries or Affiliates.

      10.04 Reliance by Administrative Agent.

            (a) The Administrative Agent shall be entitled to rely, and shall be
fully protected in relying, upon any writing, resolution, notice, consent,
certificate, affidavit, letter, telegram, facsimile, telex or telephone message,
statement or other document or conversation believed by it to be genuine and
correct and to have been signed, sent or made by the proper Person or Persons,
and upon advice and statements of legal counsel (including counsel to the
Company), independent accountants and other experts selected by the
Administrative Agent. The Administrative Agent shall be fully justified in
failing or refusing to take any action under this Agreement or any other Loan
Document unless it shall first receive such advice or concurrence of the
Majority Lenders as it deems appropriate and, if it so requests, it shall first
be indemnified to its satisfaction by the Lenders against any and all liability
and expense which may be incurred by it by reason of taking or continuing to
take any such action. The Administrative Agent shall in all cases be fully
protected in acting, or in refraining from acting, under this Agreement or any
other Loan Document in accordance with a request or consent of the Majority
Lenders and such request and any action taken or failure to act pursuant thereto
shall be binding upon all of the Lenders.

            (b) For purposes of determining compliance with the conditions
specified in SECTION 5.01, each Lender that has made available to the
Administrative Agent its Pro Rata Share of the initial Credit Extension or
subsequent Credit Extension, as the case may be, shall be deemed to have
consented to, approved or accepted or to be satisfied with, each document or
other matter either sent by the Administrative Agent to such Lender for consent,
approval, acceptance or satisfaction, or required thereunder to be consented to
or approved by or acceptable or satisfactory to the Lender as a condition
precedent to such initial Credit Extension or subsequent Credit Extension, as
applicable.

      10.05 Notice of Default. The Administrative Agent shall not be deemed to
have knowledge or notice of the occurrence of any Default or Event of Default,
except with respect to defaults in the payment of principal, interest and fees
required to be paid to the Administrative Agent for the account of the Lenders,
unless the Administrative Agent shall have received written notice from a Lender
or the Company referring to this Agreement, describing such Default or Event of
Default and stating that such notice is a "notice of default." The
Administrative Agent will notify the Lenders of its receipt of any such notice.
Subject to SUBSECTION 10.04(a), the Administrative Agent shall take such action
with respect to such Default or Event of Default as may be requested by the
Majority Lenders in accordance with ARTICLE IX; provided, however, that unless
and until the Administrative Agent has received any such request, the
Administrative Agent may (but shall not be obligated to) take such action, or
refrain from taking such action, with respect to such Default or Event of
Default as it shall deem advisable or in the best interest of the Lenders.

      10.06 Credit Decision. Each Lender acknowledges that none of the
Agent-Related Persons has made any representation or warranty to it, and that no
act by any Agent-Related Person hereafter taken,


                                      -66-

including any review of the affairs of the Company and its Subsidiaries, shall
be deemed to constitute any representation or warranty by any Agent-Related
Person to any Lender. Each Lender represents to the Administrative Agent that it
has, independently and without reliance upon any Agent-Related Person and based
on such documents and information as it has deemed appropriate, made its own
appraisal of and investigation into the business, prospects, operations,
property, financial and other condition and creditworthiness of the Company and
its Subsidiaries, the value of and title to any Collateral and all applicable
bank regulatory laws relating to the transactions contemplated hereby, and made
its own decision to enter into this Agreement and to extend credit to the
Company hereunder. Each Lender also represents that it will, independently and
without reliance upon any Agent-Related Person and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit analysis, appraisals and decisions in taking or not taking action under
this Agreement and the other Loan Documents, and to make such investigations as
it deems necessary to inform itself as to the business, prospects, operations,
property, financial and other condition and creditworthiness of the Company.
Except for notices, reports and other documents expressly herein required to be
furnished to the Lenders by the Administrative Agent, the Administrative Agent
shall not have any duty or responsibility to provide any Lender with any credit
or other information concerning the business, prospects, operations, property,
financial and other condition or creditworthiness of the Company which may come
into the possession of any of the Agent-Related Persons.

      10.07 Indemnification; Certain Depository Bank Matters. (a) Whether or not
the transactions contemplated hereby are consummated, the Lenders shall
indemnify upon demand the Agent-Related Persons (to the extent not reimbursed by
or on behalf of the Company and without limiting the obligation of the Company
to do so), pro rata, from and against any and all Indemnified Liabilities
INCLUDING SUCH INDEMNIFIED LIABILITIES AS MAY ARISE OR BE CAUSED BY THE
NEGLIGENCE, SOLE, JOINT, CONCURRENT, COMPARATIVE OR OTHERWISE OF SUCH
AGENT-RELATED PERSONS; provided, however, that no Lender shall be liable for the
payment to the Agent-Related Persons of any portion of such Indemnified
Liabilities to the extent the same arise from such Person's gross negligence or
willful misconduct. Without limitation of the foregoing, each Lender shall
reimburse the Administrative Agent upon demand for its ratable share of any
costs or out-of-pocket expenses (including Attorney Costs and expenses incurred
in connection with field audits and inventory valuations) incurred by the
Administrative Agent in connection with the preparation, execution, delivery,
administration, modification, amendment or enforcement (whether through
negotiations, legal proceedings or otherwise) of, or legal advice in respect of
rights or responsibilities under, this Agreement, any other Loan Document, or
any document contemplated by or referred to herein, to the extent that the
Administrative Agent is not reimbursed for such expenses by or on behalf of the
Company. The undertaking in this Section shall survive the termination of the
Commitments, the repayment of all Obligations hereunder and the resignation or
replacement of the Administrative Agent.

            (b) The Lenders agree to indemnify upon demand: (i) each Depository
Bank (to the extent not reimbursed by the Company and without limiting the
obligation of the Company to do so) and hold it harmless from and against any
and all claims, other than those ultimately determined to be founded on gross
negligence or willful misconduct of such Depository Bank, and from and against
any damages, penalties, judgments, liabilities, losses or expenses (including
reasonable attorney's fees and disbursements) incurred as a result of the
assertion of any such claims, by any person or entity arising out of, or
otherwise related to any instructions given by the Administrative Agent to the
Depository Bank in connection with the Deposit Account Control Agreement to
which such Depository Bank is a party;

            (c) In the event that a Depository Bank transfers funds to the
Administrative Agent from a deposit account held by such Depository Bank
pursuant to a Control Notice and thereafter items deposited into such deposit
account are dishonored, the Company shall reimburse such Depository Bank as
provided in the applicable Deposit Account Control Agreement in the event the
Company fails to do


                                      -67-

so, to the extent funds on account of such item have been transferred to the
Lenders, the Lenders agree to reimburse the Depository Bank promptly (by
transfer to the Administrative Agent), provided that the Depository Bank submits
a claim for such reimbursement within the time period required by the Deposit
Account Control Agreement to which it is a party.

            (d) The Lenders agree to indemnify each Depository Bank and hold
each such Depository Bank harmless from and against any and all claims, other
than those ultimately determined to be founded on gross negligence or willful
misconduct of such Depository Bank, and from and against any damages, penalties,
judgments, liabilities, losses or expenses (including reasonable attorney's fees
and disbursements) incurred as a result of the assertion of any such claim, by
any person or entity arising out of, or otherwise related to any instructions
given by the Administrative Agent to the Depository Bank in connection with the
Deposit Account Control Agreement (whether pursuant to a Control Notice or
otherwise). The indemnification set forth in this SECTION 10.07(d) shall survive
termination of this Agreement and each Deposit Account Control Agreement.

      10.08 Administrative Agent in Individual Capacity. Bank of America and its
Affiliates may make loans to, issue letters of credit for the account of, accept
deposits from, acquire equity interests in and generally engage in any kind of
banking, trust, financial advisory, underwriting or other business with the
Company and its Subsidiaries and Affiliates as though Bank of America were not
the Administrative Agent or the Issuing Bank hereunder and without notice to or
consent of the Lenders. The Lenders acknowledge that, pursuant to such
activities, Bank of America or its Affiliates may receive information regarding
the Company or its Affiliates (including information that may be subject to
confidentiality obligations in favor of the Company or such Subsidiary) and
acknowledge that the Agent-Related Persons shall be under no obligation to
provide such information to them. With respect to its Loans, Bank of America
shall have the same rights and powers under this Agreement as any other Lender
and may exercise the same as though it were not the Administrative Agent.

      10.09 Successor Administrative Agent. The Administrative Agent may, and at
the request of the Majority Lenders shall, resign as Administrative Agent upon
30 days' notice to the Lenders. If the Administrative Agent resigns under this
Agreement, the Majority Lenders shall appoint from among the Lenders a successor
agent for the Lenders. If no successor agent is appointed prior to the effective
date of the resignation of the Administrative Agent, the Administrative Agent
may appoint, after consulting with the Lenders, a successor agent from among the
Lenders. Upon the acceptance of its appointment as successor agent hereunder,
such successor agent shall succeed to all the rights, powers and duties of the
retiring Administrative Agent and the term "Administrative Agent" shall mean
such successor agent and the retiring Administrative Agent's appointment, powers
and duties as Administrative Agent shall be terminated. After any retiring
Administrative Agent's resignation hereunder as Administrative Agent, the
provisions of this ARTICLE X and SECTIONS 11.04 and 11.05 shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was
Administrative Agent under this Agreement. If no successor agent has accepted
appointment as Administrative Agent by the date which is 30 days following a
retiring Administrative Agent's notice of resignation, the retiring
Administrative Agent's resignation shall nevertheless thereupon become effective
and the Lenders shall perform all of the duties of the Administrative Agent
hereunder until such time, if any, as the Majority Lenders appoint a successor
agent as provided for above. Notwithstanding the foregoing, however, for so long
as Bank of America is the Issuing Bank, then Bank of America may not be removed
as the Administrative Agent at the request of the Majority Lenders unless Bank
of America shall also simultaneously be replaced as "Issuing Bank" hereunder
pursuant to documentation in form and substance reasonably satisfactory to Bank
of America.

      10.10 Foreign Lenders. Each Lender that is a "foreign corporation,
partnership or trust" within the meaning of the Code (a "Foreign Lender") shall
deliver to the Administrative Agent, prior to receipt of any payment subject to
withholding under the Code (or after accepting an assignment of an interest


                                      -68-

herein), two duly signed completed copies of either IRS Form W-8BEN or any
successor thereto (relating to such Person and entitling it to an exemption from
withholding tax on all payments to be made to such Person by the Company
pursuant to this Agreement) or IRS Form W-8ECI or any successor thereto
(relating to all payments to be made to such Person by the Company pursuant to
this Agreement) or such other evidence satisfactory to the Company and the
Administrative Agent that such Person is entitled to an exemption from U.S.
withholding tax. Thereafter and from time to time, each such Person shall (a)
promptly submit to the Administrative Agent such additional duly completed and
signed copies of one of such forms (or such successor forms as shall be adopted
from time to time by the relevant United States taxing authorities) as may then
be available under then current United States laws and regulations to avoid, or
such evidence as is satisfactory to the Company and the Administrative Agent of
any available exemption from or reduction of, United States withholding taxes in
respect of all payments to be made to such Person by the Company pursuant to
this Agreement, (b) promptly notify the Agent of any change in circumstances
which would modify or render invalid any claimed exemption or reduction, and (c)
take such steps as shall not be materially disadvantageous to it, in the
reasonable judgment of such Lender, and as may be reasonably necessary
(including the re-designation of its Lending Office) to avoid any requirement of
applicable Laws that the Company make any deduction or withholding for taxes
from amounts payable to such Person. If such Person fails to deliver the above
forms or other documentation, then the Administrative Agent may withhold from
any interest payment to such Person an amount equivalent to the applicable
withholding tax imposed by Sections 1441 and 1442 of the Code, without
reduction. If any Governmental Authority asserts that the Administrative Agent
did not properly withhold any tax or other amount from payments made in respect
of such Person, such Person shall indemnify the Administrative Agent therefor,
including all penalties and interest, any taxes imposed by any jurisdiction on
the amounts payable to the Agent under this Section, and costs and expenses
(including Attorney Costs) of the Administrative Agent. The obligation of the
Lenders under this Section shall survive the payment of all Obligations and the
resignation or replacement of the Administrative Agent.

      10.11 Collateral Matters.

            (a) The Administrative Agent is authorized on behalf of all the
Lenders, without the necessity of any notice to or further consent from the
Lenders, from time to time to take any action with respect to any Collateral or
the Collateral Documents which may be necessary to perfect and maintain
perfected the security interest in and Liens upon the Collateral granted
pursuant to the Collateral Documents.

            (b) The Lenders irrevocably authorize the Administrative Agent, at
its option and in its discretion, to release any Lien granted to or held by the
Administrative Agent upon any Collateral (i) upon termination of the Commitments
and payment in full of all Loans and all other Obligations known to the
Administrative Agent and payable under this Agreement or any other Loan
Document; (ii) constituting property in which the Company or any Subsidiary
owned no interest at the time the Lien was granted or at any time thereafter;
(iii) consisting of an instrument evidencing Indebtedness or other debt
instrument, if the indebtedness evidenced thereby has been paid in full; or (iv)
if approved, authorized or ratified in writing by the Majority Lenders or all
the Lenders, as the case may be, as provided in SUBSECTION 11.01(f). Upon
request by the Administrative Agent at any time, the Lenders will confirm in
writing the Administrative Agent's authority to release particular types or
items of Collateral pursuant to this SUBSECTION 10.11(b), provided that the
absence of any such confirmation for whatever reason shall not affect the
Administrative Agent's rights under this SECTION 10.11.

            (c) Upon the occurrence and continuance of an Event of Default,
Lenders agree to promptly confer in order that Majority Lenders or Lenders, as
the case may be, may agree upon a course of action for the enforcement of the
rights of Lenders; and Administrative Agent shall be entitled to


                                      -69-

refrain from taking any action (without incurring any liability to any Person
for so refraining) unless and until Administrative Agent shall have received
instructions from Majority Lenders. All rights of action under the Loan
Documents and all rights to the Collateral, if any, hereunder may be enforced by
Administrative Agent and any suit or proceeding instituted by Administrative
Agent in furtherance of such enforcement shall be brought in its name as
Administrative Agent without the necessity of joining as plaintiffs or
defendants any other Lender, and the recovery of any judgment shall be for the
benefit of Lenders subject to the expenses of Administrative Agent. In actions
with respect to any property of Borrower, Administrative Agent is acting for the
ratable benefit of each Lender. Any and all agreements to subordinate (whether
made heretofore or hereafter) other indebtedness or obligations of Borrower to
the Obligations shall be construed as being for the ratable benefit of each
Lender.

            (d) The Administrative Agent shall have no obligation whatsoever to
any Lender or to any other Person to assure that the Collateral exists or is
owned by any Loan Party or is cared for, protected, or insured or has been
encumbered or that the Liens granted to the Administrative Agent herein or
pursuant thereto have been properly or sufficiently or lawfully created,
perfected, protected, or enforced, or are entitled to any particular priority,
or to exercise at all or in any particular manner or under any duty of care,
disclosure, or fidelity, or to continue exercising, any of the Rights granted or
available to the Administrative Agent in this SECTION 10.11 or in any of the
Collateral Documents; it being understood and agreed that in respect of the
Collateral, or any act, omission, or event related thereto, the Administrative
Agent any act in any manner it may deem appropriate, in its sole discretion,
given the Administrative Agent's own interest in the Collateral as one of the
Lenders and that the Administrative Agent shall have no duty or liability
whatsoever to any Lender, other than to act without gross negligence or willful
misconduct.

            (e) To the extent any Lender or any Affiliate of a Lender is a party
to a Specified Swap Agreement in accordance with the requirements of the Loan
Documents and accepts the benefits of the Liens in the Collateral arising
pursuant to the Collateral Documents, such Lender (for itself and on behalf of
any such Affiliates) shall be deemed (i) to appoint Bank of America, N.A., as
its nominee and agent, to act for and on behalf of such Lender or Affiliate
thereof in connection with the Collateral Documents and (ii) to be bound by the
terms of this ARTICLE X.

      10.12 Field Audit and Examination Reports; Disclaimer by Lenders.  By
signing this Agreement, each Lender:

            (a) is deemed to have requested that the Administrative Agent
furnish such Lender, promptly after it becomes available, a copy of each field
audit and inventory valuation report (each a "REPORT" and collectively, the
"REPORTS") prepared by or on behalf of the Administrative Agent;

            (b) expressly agrees and acknowledges that neither the
Administrative Agent nor any of its Affiliates (i) make any representation or
warranty as to the accuracy of any Report, or (ii) shall be liable for any
information contained in any Report;

            (c) expressly agrees and acknowledges that the Reports are not
comprehensive audits or examinations, that the party performing any audit or
examination will inspect only specific information regarding the Company and its
Subsidiaries and will rely significantly upon the books and records of the
Company and its Subsidiaries related thereto, as well as on representations of
personnel of the Company and its Subsidiaries;

            (d) agrees to keep all Reports confidential and strictly for its
internal use, and not to distribute except to its participants, or use any
Report in any other manner; and


                                      -70-

            (e) without limiting the generality of any other indemnification
provision contained in this Agreement, agrees: (i) to hold the Administrative
Agent, Bank of America Business Credit, any Agent-Related Person and any Lender
preparing a Report harmless from any action the indemnifying Lender may take or
conclusion the indemnifying Lender may reach or draw from any Report in
connection with any loans or other credit accommodations that the indemnifying
Lender has made or may make to the Company, or the indemnifying Lender's
participation in, or the indemnifying Lender's purchase of, a loan or loans of
the Company; and (ii) to pay and protect, and indemnify, defend and hold the
Administrative Agent, any Agent-Related Person and any such other Lender
preparing a Report harmless from and against, the claims, actions, proceedings,
damages, costs, expenses and other amounts (including Attorney Costs) incurred
by the Administrative Agent, any Agent-Related Person and any Lender preparing a
Report as the direct or indirect result of any third parties who might obtain
all or part of any Report through the indemnifying Lender.

                                   ARTICLE XI

                                  MISCELLANEOUS

      11.01 Amendments and Waivers. No amendment or waiver of any provision of
this Agreement or any other Loan Document, and no consent with respect to any
departure by the Company or any applicable Subsidiary therefrom, shall be
effective unless the same shall be in writing and signed by the Majority Lenders
(or by the Administrative Agent at the written request of the Majority Lenders)
and the Company and acknowledged by the Administrative Agent, and then any such
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which given; provided, however, that no such waiver,
amendment, or consent shall, unless in writing and signed by each Lender
directly affected thereby and the Company and acknowledged by the Administrative
Agent, do any of the following:

            (a) increase or extend the Commitment of such Lender (or reinstate
any Commitment of such Lender terminated pursuant to SECTION 9.02);

            (b) postpone or delay any date fixed by this Agreement or any other
Loan Document for any payment of principal, interest, fees or other amounts due
to such Lender hereunder or under any other Loan Document;

            (c) reduce the principal of, or the rate of interest specified
herein on any Loan, or (subject to CLAUSE (iii) below) any fees or other amounts
payable hereunder or under any other Loan Document;

            (d) change the percentage of the Commitments or of the aggregate
unpaid principal amount of the Loans which is required for the Lenders or any of
them to take any action hereunder; or

            (e) change the Pro Rata Share of any Lender; or

            (f) amend this Section, or SECTION 2.13 or any provision herein
providing for consent or other action by all Lenders; or

            (g) discharge any Guarantor, or, except as otherwise provided in
SECTION 10.11(b), release any material portion of the Collateral, except as
otherwise may be provided in the Collateral Documents or except where the
consent of the Majority Lenders only is specifically provided for;


                                      -71-

and, provided further, that (i) no amendment, waiver or consent shall, unless in
writing and signed by the Issuing Bank in addition to the Majority Lenders or
all the Lenders, as the case may be, affect the rights or duties of the Issuing
Bank under this Agreement or any L/C-Related Document relating to any Letter of
Credit Issued or to be Issued by it, (ii) no amendment, waiver or consent shall,
unless in writing and signed by the Administrative Agent in addition to the
Majority Lenders or all the Lenders, as the case may be, affect the rights or
duties of the Administrative Agent under this Agreement or any other Loan
Document, and (iii) the Fee Letter may be amended, or rights or privileges
thereunder waived, only in a writing executed by the parties thereto.

      11.02 Notices.

            (a) General. All notices, requests, consents, approvals, waivers and
other communications shall be in writing (including, unless the context
expressly otherwise provides, by facsimile transmission, provided that any
matter transmitted by the Company by facsimile (i) shall be immediately
confirmed by a telephone call to the recipient and (ii) shall be followed by
delivery within one (1) Business Day of a hard copy original thereof) and
mailed, faxed or delivered, (x) if to the Company or the Administrative Agent,
to the address or facsimile number specified for notices on SCHEDULE 11.02, and
(y) if to any Lender, to the address for notices specified in the Administrative
Questionnaire furnished by such Lender to the Administrative Agent in connection
with this Agreement; or, in the case of the Company or the Administrative Agent,
to such other address as shall be designated by such party in a written notice
to the other parties, and in the case of any other party, to such other address
as shall be designated by such party in a written notice to the Company and the
Administrative Agent.

All such notices and other communications shall be deemed to be given or made
upon the earlier to occur of (i) actual receipt by the intended recipient and
(ii) (A) if delivered by hand or by courier, when signed for by the intended
recipient; (B) if delivered by mail, four Business Days after deposit in the
mails, postage prepaid; (C) if delivered by facsimile, when sent and receipt has
been confirmed by telephone; and (D) if delivered by electronic mail (which form
of delivery is subject to the provisions of subsection (c) below), when
delivered; provided, however, that notices and other communications to the
Administrative Agent, the Issuing Bank pursuant to ARTICLE II shall not be
effective until actually received by such Person. Any notice or other
communication permitted to be given, made or confirmed by telephone hereunder
shall be given, made or confirmed by means of a telephone call to the intended
recipient at the number specified in accordance herewith, it being understood
and agreed that a voicemail message shall in no event be effective as a notice,
communication or confirmation hereunder.

            (b) Effectiveness of Facsimile Documents and Signatures. Loan
Documents may be transmitted and/or signed by facsimile. The effectiveness of
any such documents and signatures shall, subject to applicable Law, have the
same force and effect as manually-signed originals and shall be binding on all
Loan Parties, the Administrative Agent and the Lenders. The Administrative Agent
may also require that any such documents and signatures be confirmed by a
manually-signed original thereof; provided, however, that the failure to request
or deliver the same shall not limit the effectiveness of any facsimile document
or signature.

            (c) Limited Use of Electronic Mail. Electronic mail and internet and
intranet websites may be used only to distribute routine communications, such as
financial statements and other information, and to distribute Loan Documents for
execution by the parties thereto, and may not be used for any other purpose.

            (d) Reliance by Administrative Agent and Lenders. The Administrative
Agent and the Lenders shall be entitled to rely and act upon any notices
(including telephonic Notices of Borrowing)


                                      -72-

purportedly given by or on behalf of the Borrower even if (i) such notices were
not made in a manner specified herein, were incomplete or were not preceded or
followed by any other form of notice specified herein, or (ii) the terms
thereof, as understood by the recipient, varied from any confirmation thereof.
The Borrower shall indemnify each Agent-Related Person and each Lender from all
losses, costs, expenses and liabilities resulting from the reliance by such
Person on each notice purportedly given by or on behalf of the Borrower. All
telephonic notices to and other communications with the Administrative Agent may
be recorded by the Administrative Agent, and each of the parties hereto hereby
consents to such recording.

      11.03 No Waiver; Cumulative Remedies. No failure to exercise and no delay
in exercising, on the part of the Administrative Agent or any Lender, any right,
remedy, power or privilege hereunder, shall operate as a waiver thereof; nor
shall any single or partial exercise of any right, remedy, power or privilege
hereunder preclude any other or further exercise thereof or the exercise of any
other right, remedy, power or privilege.

      11.04 Costs and Expenses.  The Company shall:

            (a) whether or not the transactions contemplated hereby are
consummated, pay or reimburse the Administrative Agent, and the Issuing Bank
within five Business Days after demand (subject to SUBSECTION 5.01(e)) for all
reasonable costs and expenses incurred by the Administrative Agent and the
Issuing Bank in connection with the development, preparation, delivery,
administration and execution of, and any amendment, supplement, waiver or
modification to (in each case, whether or not consummated), this Agreement, any
Loan Document and any other documents prepared in connection herewith or
therewith, and the consummation of the transactions contemplated hereby and
thereby, including Attorney Costs incurred by the Administrative Agent and the
Issuing Bank with respect thereto and including expenses in connection with
field audits and inventory valuations; and

            (b) pay or reimburse the Administrative Agent, the Arranger and each
Lender within five Business Days after demand for all costs and expenses
(including Attorney Costs) incurred by each of them in connection with the
enforcement, attempted enforcement, or preservation of any rights or remedies
under this Agreement or any other Loan Document (including in connection with
any "workout" or restructuring regarding the Loans, and including in any
Insolvency Proceeding or appellate proceeding).

      11.05 Indemnity. (a) Whether or not the transactions contemplated hereby
are consummated, the Company shall indemnify, defend and hold the Agent-Related
Persons, and each Lender and each of their respective officers, directors,
employees, counsel, agents and attorneys-in-fact (each, an "INDEMNIFIED PERSON")
harmless from and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, charges, expenses and disbursements
(including Attorney Costs and costs of settlements of any such liabilities,
obligations, losses, damages, penalties, actions, judgments or suits) of any
kind or nature whatsoever which may at any time (including at any time following
repayment of the Loans, the termination of the Letters of Credit and the
termination, resignation or replacement of the Administrative Agent or
replacement of any Lender) be imposed on, incurred by or asserted against any
such Person in any way relating to or arising out of this Agreement or any
document contemplated by or referred to herein, or the transactions contemplated
hereby, or any action taken or omitted by any such Person under or in connection
with any of the foregoing, including with respect to any investigation,
litigation or proceeding (including any Insolvency Proceeding or appellate
proceeding) related to or arising out of this Agreement or the Loans or Letters
of Credit or the use of the proceeds thereof (excluding, however, any action
arising solely among the Lenders in their capacities as Lenders), whether or not
any Indemnified Person is a party thereto (all the foregoing, collectively, the
"INDEMNIFIED LIABILITIES"); provided, that the Company shall have no obligation
hereunder to any Indemnified Person


                                      -73-

with respect to Indemnified Liabilities to the extent same arise from the gross
negligence or willful misconduct of such Indemnified Person. The agreements in
this Section shall survive payment of all other Obligations.

            (b) (i) The Company shall indemnify, defend and hold harmless each
Indemnified Person, from and against any and all Environmental Claims and
Environmental Damages imposed on or asserted against an Indemnified Person or
any properties of the Company, and any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, charges, expenses or
disbursements (including Attorney Costs, the allocated cost of internal
environmental audit or review services, and costs of settlements of any such
liabilities, obligations, losses, damages, penalties, actions, judgments or
suits), which may be incurred by or asserted against such Indemnified Person in
connection with or arising out of any breach of any covenant by or the
inaccuracy of any representation or warranty made by, the Company or any other
Loan Party under this Agreement or any other Loan Document. No action taken by
legal counsel chosen by the Administrative Agent or any Lender in defending
against any such investigation, litigation or proceeding or requested remedial,
removal or response action shall vitiate or any way impair the Company's
obligation and duty hereunder to indemnify and hold harmless the Administrative
Agent and each Lender.

            (ii) In no event shall any site visit, observation, or testing by
the Administrative Agent or any Lender (or any contractee of the Administrative
Agent or any Lender) be deemed a representation or warranty that Hazardous
Substances are or are not present in, on, or under, any site, or that there has
been or shall be compliance with any Environmental Law. Neither the Company nor
any other Person is entitled to rely on any site visit, observation, or testing
by the Administrative Agent or any Lender. Neither the Administrative Agent nor
any Lender owes any duty of care to protect the Company or any other Person
against, or to inform the Company or any other party of, any Hazardous
Substances or any other adverse condition affecting any site or property.
Neither the Administrative Agent nor any Lender shall be obligated to disclose
to the Company or any other Person any report or findings made as a result of,
or in connection with, any site visit, observation, or testing by the
Administrative Agent or any Lender. Indemnified Parties hereby reserve the
right, and the Company hereby expressly authorizes any Indemnified Party, to
make available to any party (including any governmental agency or authority) any
and all reports, whether prepared by any Indemnified Party or prepared by the
Company and provided to any Indemnified Party (collectively, "ENVIRONMENTAL
REPORTS") that any Indemnified Party may have with respect to the property owned
or used by the Company or any of its Subsidiaries, to the extent required in
accordance with any Requirement of Law or by any Governmental Authority.

            (c) THE INDEMNIFICATION OBLIGATIONS OF THE COMPANY CONTAINED IN THIS
AGREEMENT SHALL APPLY WHETHER OR NOT SUCH INDEMNIFIED LIABILITIES ARISE OUT OF
OR AS A RESULT OF THE STRICT LIABILITY OF ANY INDEMNIFIED PARTY OR ANY
INDEMNIFIED PARTIES' NEGLIGENCE IN WHOLE OR IN PART, INCLUDING, WITHOUT
LIMITATION, THOSE CLAIMS WHICH RESULT FROM THE SOLE, JOINT, CONCURRENT OR
COMPARATIVE NEGLIGENCE OF THE INDEMNIFIED PARTY, OR ANY ONE OR MORE OF THEM. The
agreements in this SECTION 11.05 shall survive payment of all other Obligations.

      11.06 Payments Set Aside. To the extent that the Company makes a payment
to the Administrative Agent or the Lenders, or the Administrative Agent or the
Lenders exercise their right of set-off, and such payment or the proceeds of
such set-off or any part thereof are subsequently invalidated, declared to be
fraudulent or preferential, set aside or required (including pursuant to any
settlement entered into by the Administrative Agent or such Lender in its
discretion) to be repaid to a trustee, receiver or any other party, in
connection with any Insolvency Proceeding or otherwise, then (a) to the extent
of such recovery the obligation or part thereof originally intended to be
satisfied shall be revived


                                      -74-

and continued in full force and effect as if such payment had not been made or
such set-off had not occurred, and (b) each Lender severally agrees to pay to
the Administrative Agent upon demand its pro rata share of any amount so
recovered from or repaid by the Administrative Agent.

      11.07 Successors and Assigns; Assignments, Participations, etc. (a) The
provisions of this Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and assigns permitted hereby,
except that the Company may not assign or otherwise transfer any of its rights
or obligations hereunder without the prior written consent of each Lender and no
Lender may assign or otherwise transfer any of its rights or obligations
hereunder except (i) to an Eligible Assignee in accordance with the provisions
of PARAGRAPH (b) of this Section, (ii) by way of participation in accordance
with the provisions of PARAGRAPH (d) of this Section or (iii) by way of pledge
or assignment of a security interest subject to the restrictions of PARAGRAPH
(f) of this Section (and any other attempted assignment or transfer by any party
hereto shall be null and void). Nothing in this Agreement, expressed or implied,
shall be construed to confer upon any Person (other than the parties hereto,
their respective successors and assigns permitted hereby, Participants to the
extent provided in PARAGRAPH (d) of this Section and, to the extent expressly
contemplated hereby, the Related Parties of each of the Administrative Agent and
the Lenders) any legal or equitable right, remedy or claim under or by reason of
this Agreement.

            (b) Any Lender may at any time assign to one or more Eligible
Assignees all or a portion of its rights and obligations under this Agreement
(including all or a portion of its Commitment and the Loans at the time owing to
it); provided that (i) except in the case of an assignment of the entire
remaining amount of the assigning Lender's Commitment, the Loans at the time
owing to it and the L/C Obligations, or in the case of an assignment to a Lender
or an Affiliate of a Lender or an Approved Fund with respect to a Lender, the
aggregate amount of the Commitment (which for this purpose includes Loans
outstanding thereunder) or, if the applicable Commitment is not then in effect,
the principal outstanding balance of the Loan of the assigning Lender subject to
each such assignment, and L/C Obligations (in each case determined as of the
date the Assignment and Assumption with respect to such assignment is delivered
to the Administrative Agent) shall not be less than $5,000,000, unless the
Administrative Agent consents (each such consent not to be unreasonably withheld
or delayed); (ii) each partial assignment shall be made as an assignment of a
proportionate part of all the assigning Lender's rights and obligations under
this Agreement with respect to the Loan, the Commitment or the L/C Obligations
assigned; (iii) any assignment of a Lender's Commitment must be approved by the
Administrative Agent and the Issuing Bank unless the Person that is the proposed
assignee is itself a Lender with a Commitment (whether or not the proposed
assignee would otherwise qualify as an Eligible Assignee); and (iv) the parties
to each assignment shall execute and deliver to the Administrative Agent an
Assignment and Assumption, together with a processing and recordation fee of
$3,500.00, and the Eligible Assignee, if it shall not be a Lender, shall deliver
to the Administrative Agent an Administrative Questionnaire. Subject to
acceptance and recording thereof by the Administrative Agent pursuant to
PARAGRAPH (c) of this Section, from and after the effective date specified in
each Assignment and Assumption, the Eligible Assignee thereunder shall be a
party to this Agreement and, to the extent of the interest assigned by such
Assignment and Assumption, have the rights and obligations of a Lender under
this Agreement, and the assigning Lender thereunder shall, to the extent of the
interest assigned by such Assignment and Assumption, be released from its
obligations under this Agreement (and, in the case of an Assignment and
Assumption covering all of the assigning Lender's rights and obligations under
this Agreement, such Lender shall cease to be a party hereto) but shall continue
to be entitled to the benefits of SECTIONS 4.01, 4.02, 4.03, 4.04 and 4.05 with
respect to facts and circumstances occurring prior to the effective date of such
assignment. Any assignment or transfer by a Lender of rights or obligations
under this Agreement that does not comply with this paragraph shall be treated
for purposes of this Agreement as a sale by such Lender of a participation in
such rights and obligations in accordance with PARAGRAPH (d) of this Section.


                                      -75-

            (c) The Administrative Agent, acting solely for this purpose as an
agent of the Company, shall maintain at one of its offices in listed on SCHEDULE
11.02 hereto a copy of each Assignment and Assumption delivered to it and a
register for the recordation of the names and addresses of the Lenders, and the
Commitments of, and principal amounts of the Loans owing to, each Lender
pursuant to the terms hereof from time to time (the "REGISTER"). The entries in
the Register shall be conclusive, and the Company, the Administrative Agent and
the Lenders may treat each Person whose name is recorded in the Register
pursuant to the terms hereof as a Lender hereunder for all purposes of this
Agreement, notwithstanding notice to the contrary. The Register shall be
available for inspection by the Company and any Lender, at any reasonable time
and from time to time upon reasonable prior notice.

            (d) Any Lender may at any time, without the consent of, or notice
to, the Company or the Administrative Agent, sell participations to any Person
(other than a natural person or the Company or any of the Company's Affiliates
or Subsidiaries) (each, a "PARTICIPANT") in all or a portion of such Lender's
rights and/or obligations under this Agreement (including all or a portion of
its Commitment and/or the Loans owing to it and L/C Obligation); provided that
(i) such Lender's obligations under this Agreement shall remain unchanged, (ii)
such Lender shall remain solely responsible to the other parties hereto for the
performance of such obligations and (iii) the Company, the Administrative Agent
and the other Lenders shall continue to deal solely and directly with such
Lender in connection with such Lender's rights and obligations under this
Agreement. Any agreement or instrument pursuant to which a Lender sells such a
participation shall provide that such Lender shall retain the sole right to
enforce this Agreement and to approve any amendment, modification or waiver of
any provision of this Agreement. Subject to PARAGRAPH (e) of this Section, the
Company agrees that each Participant shall be entitled to the benefits of
SECTIONS 4.01, 4.03, 4.04 and 4.05 to the same extent as if it were a Lender and
had acquired its interest by assignment pursuant to PARAGRAPH (b) of this
Section. To the extent permitted by law, each Participant also shall be entitled
to the benefits of SECTION 11.09 as though it were a Lender, provided such
Participant agrees to be subject to SECTION 2.13 as though it were a Lender.

            (e) A Participant shall not be entitled to receive any greater
payment under SECTIONS 4.01, 4.03 and 4.04 than the applicable Lender would have
been entitled to receive with respect to the participation sold to such
Participant, unless the sale of the participation to such Participant is made
with the Company's prior written consent. A Participant that would be a Foreign
Lender if it were a Lender shall not be entitled to the benefits of SECTION 4.01
unless the Company is notified of the participation sold to such Participant and
such Participant agrees, for the benefit of the Company, to comply with SECTION
10.10 as though it were a Lender.

            (f) Any Lender may at any time pledge or assign a security interest
in all or any portion of its rights under this Agreement to secure obligations
of such Lender, including without limitation any pledge or assignment to secure
obligations to a Federal Reserve Bank; provided that no such pledge or
assignment shall release such Lender from any of its obligations hereunder or
substitute any such pledgee or assignee for such Lender as a party hereto.

            11.08  Confidentiality. Each Bank agrees to take normal and
reasonable precautions and exercise due care to maintain the confidentiality of
all information identified as "confidential" or "secret" by the Company and
provided to it by the Company or any of its Subsidiaries, or by the
Administrative Agent on such Company's or Subsidiary's behalf, under or in
connection with this Agreement or any other Loan Document, and neither it nor
any of its Affiliates shall use any such information other than in connection
with or in enforcement of this Agreement and the other Loan Documents or in
connection with other business now or hereafter existing or contemplated with
the Company or any Subsidiary; except to the extent such information (i) was or
becomes generally available to the public other than as a result of disclosure
by the Bank, or (ii) was or becomes available on a


                                      -76-

non-confidential basis from a source other than the Company, provided that such
source is not bound by a confidentiality agreement with the Company known to the
Bank; provided, however, that any Bank may disclose such information (A) at the
request or pursuant to any requirement of any Governmental Authority to which
the Bank is subject or in connection with an examination of such Bank by any
such authority; (B) pursuant to subpoena or other court process; (C) when
required to do so in accordance with the provisions of any applicable
Requirement of Law; (D) to the extent reasonably required in connection with any
litigation or proceeding to which the Administrative Agent, any Bank or their
respective Affiliates may be party; (E) to the extent reasonably required in
connection with the exercise of any remedy hereunder or under any other Loan
Document; (F) to such Bank's independent auditors and other professional
advisors; (G) to any Affiliate of such Bank, or to any Participant or Eligible
Assignee, actual or potential, provided that such Affiliate, Participant or
Eligible Assignee agrees to keep such information confidential to the same
extent required of the Banks hereunder; (H) as to any Bank, as expressly
permitted under the terms of any other document or agreement regarding
confidentiality to which the Company is party or is deemed party with such Bank;
and (I) to any nationally recognized rating agency or similar organization that
requires access to information about a Lender's or its Affiliates' investment
portfolio in connection with ratings issued with respect to such Lender or its
Affiliates.

      11.09 Set-off. In addition to any rights and remedies of the Lenders
provided by law, if an Event of Default exists or the Loans have been
accelerated, each Lender is authorized at any time and from time to time,
without prior notice to the Company, any such notice being waived by the Company
to the fullest extent permitted by law, to set off and apply any and all
deposits (general or special, time or demand, provisional or final) at any time
held by, and other indebtedness at any time owing by, such Lender to or for the
credit or the account of the Company against any and all Obligations now or
hereafter existing, irrespective of whether or not the Administrative Agent or
such Lender shall have made demand under this Agreement or any Loan Document and
although such Obligations may be contingent or unmatured. Each Lender agrees
promptly to notify the Company and the Administrative Agent after any such
set-off and application made by such Lender; provided, however, that the failure
to give such notice shall not affect the validity of such set-off and
application.


                                      -77-

      11.10 Interest. It is the intention of the parties hereto to comply with
applicable usury laws; accordingly, notwithstanding any provision to the
contrary in this Agreement, the Notes or in any of the other Loan Documents
securing the payment hereof or otherwise relating hereto, in no event shall this
Agreement, the Notes or such other Loan Documents require the payment or permit
the payment, taking, reserving, receiving, collection, or charging of any sums
constituting interest under applicable laws, if any, which exceed the maximum
amount permitted by such laws. If any such excess interest is called for,
contracted for, charged, taken, reserved, or received in connection with the
Loans evidenced by the Notes or in any of the Loan Documents securing the
payment thereof or otherwise relating thereto, or in any communication by the
Administrative Agent or the Lenders or any other person to the Company or any
other person, or in the event all or part of the principal or interest thereof
shall be prepaid or accelerated, so that under any of such circumstances or
under any other circumstance whatsoever the amount of interest contracted for,
charged, taken, reserved, or received on the amount of principal actually
outstanding from time to time under the Notes shall exceed the maximum amount of
interest permitted by applicable usury laws, then in any such event it is agreed
as follows: (i) the provisions of this paragraph shall govern and control, (ii)
neither the Company nor any other person or entity now or hereafter liable for
the payment of the Notes shall be obligated to pay the amount of such interest
to the extent such interest is in excess of the maximum amount of interest
permitted by applicable usury laws, (iii) any such excess which is or has been
received notwithstanding this paragraph shall be credited against the then
unpaid principal balance of the Notes or, if the Notes have been or would be
paid in full, refunded to the Company, and (iv) the provisions of this
Agreement, the Notes and the other Loan Documents securing the payment hereof
and otherwise relating hereto, and any communication to the Company, shall
immediately be deemed reformed and such excess interest reduced, without the
necessity of executing any other document, to the maximum lawful rate allowed
under applicable laws as now or hereafter construed by courts having
jurisdiction hereof or thereof. Without limiting the foregoing, all calculations
of the rate of the interest contracted for, charged, taken, reserved, or
received in connection with the Notes or this Agreement which are made for the
purpose of determining whether such rate exceeds the maximum lawful rate shall
be made to the extent permitted by applicable laws by amortizing, prorating,
allocating and spreading during the period of the full term of the Loans,
including all prior and subsequent renewals and extensions, all interest at any
time contracted for, charged, taken, reserved, or received. The terms of this
paragraph shall be deemed to be incorporated in every document and communication
relating to the Notes, the Loans or any other Loan Document.

      11.11 Indemnity and Subrogation. In addition to all such rights of
indemnity and subrogation as the Guarantors may have under applicable law, the
Company agrees that in the event a payment shall be made by any Guarantor under
a Guaranty in respect of a Loan to the Company, the Company shall indemnify such
Guarantor for the full amount of such payment and such Guarantor shall be
subrogated to the rights of the person to whom such payment shall have been made
to the extent of such payment subject to the provisions of the Guaranty executed
by such Guarantor. Notwithstanding any provision of this Agreement to the
contrary, all rights of the Guarantors under this SECTION 11.11 and all other
rights of indemnity, contribution or subrogation under applicable law or
otherwise shall be fully subordinated to the indefeasible payment in full of the
Obligations, and no payments may be made in respect of such rights of indemnity,
contribution or subrogation until all the Obligations have been paid in full,
all Commitments have expired and all Letters of Credit have expired. No failure
on the part of the Company to make the payments required by this Section (or any
other payments required under applicable law or otherwise) shall in any respect
limit the obligations and liabilities of any Guarantor with respect to any
Guaranty, and each Guarantor shall remain liable for the full amount of the
obligation of such Guarantor under each such Guaranty in accordance therewith.

      11.12 Automatic Debits of Fees. With respect to any commitment fee,
arrangement fee, letter of credit fee or other fee, or any other cost or expense
(including Attorney Costs) due and payable to the Administrative Agent, the
Issuing Bank, Bank of America or the Arranger under the Loan Documents, the


                                      -78-

Company hereby irrevocably authorizes Bank of America, after giving reasonable
prior notice to the Company, to debit any deposit account of the Company with
Bank of America in an amount such that the aggregate amount debited from all
such deposit accounts does not exceed such fee or other cost or expense. If
there are insufficient funds in such deposit accounts to cover the amount of the
fee or other cost or expense then due, such debits will be reversed (in whole or
in part, in Bank of America's sole discretion) and such amount not debited shall
be deemed to be unpaid. No such debit under this Section shall be deemed a
set-off.

      11.13 Notification of Addresses, Lending Offices, Etc. Each Lender shall
notify the Administrative Agent in writing of any changes in the address to
which notices to the Lender should be directed, of addresses of any Lending
Office, of payment instructions in respect of all payments to be made to it
hereunder and of such other administrative information as the Administrative
Agent shall reasonably request.

      11.14 Counterparts. This Agreement may be executed in any number of
separate counterparts, each of which, when so executed, shall be deemed an
original, and all of said counterparts taken together shall be deemed to
constitute but one and the same instrument.

      11.15 Severability. The illegality or unenforceability of any provision of
this Agreement or any instrument or agreement required hereunder shall not in
any way affect or impair the legality or enforceability of the remaining
provisions of this Agreement or any instrument or agreement required hereunder.

      11.16 No Third Parties Benefitted. This Agreement and the other Loan
Documents are made and entered into for the sole protection and legal benefit of
the Company, the Lenders, the Administrative Agent and the Agent-Related
Persons, and their permitted successors and assigns, and no other Person shall
be a direct or indirect legal beneficiary of, or have any direct or indirect
cause of action or claim in connection with, this Agreement or any of the other
Loan Documents.

      11.17 GOVERNING LAW.

            (a) THIS AGREEMENT AND THE NOTES SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK (WITHOUT GIVING EFFECT TO
ITS CONFLICTS OF LAW RULES OTHER THAN SECTION 5-1401 OF THE NEW YORK GENERAL
OBLIGATION LAW) AND APPLICABLE FEDERAL LAW; AND THE AGENT AND THE LENDERS SHALL
RETAIN ALL RIGHTS ARISING UNDER FEDERAL LAW.

            (b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR
ANY OTHER LOAN DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK
SITTING IN THE BOROUGH OF MANHATTAN OR OF THE UNITED STATES FOR THE SOUTHERN
DISTRICT OF NEW YORK, AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH OF
THE COMPANY, THE AGENT AND THE LENDERS CONSENTS, FOR ITSELF AND IN RESPECT OF
ITS PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF THOSE COURTS. EACH OF THE
COMPANY, THE AGENT AND THE LENDERS IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING
ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON
CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR
PROCEEDING IN SUCH JURISDICTION IN RESPECT OF THIS AGREEMENT OR ANY DOCUMENT
RELATED HERETO. THE COMPANY, THE AGENT AND THE LENDERS EACH WAIVE PERSONAL
SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER PROCESS, AND CONSENT TO THE SERVICE
OF PROCESS IN ANY SUCH LEGAL ACTION OR


                                      -79-

PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL,
POSTAGE PREPAID, TO IT AT ITS ADDRESS SET FORTH IN SCHEDULE 11.02, SUCH SERVICE
TO BECOME EFFECTIVE TEN DAYS AFTER SUCH MAILING. NOTHING HEREIN SHALL AFFECT THE
RIGHT OF THE AGENT OR ANY LENDER TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED
BY LAW. EACH OF THE COMPANY AND EACH GUARANTOR, BY ITS EXECUTION OF A GUARANTY,
HEREBY IRREVOCABLY APPOINTS CT CORPORATION SYSTEM, WITH AN ADDRESS AT 111 EIGHTH
AVENUE, 13TH FLOOR, NEW YORK, NEW YORK 10011 (THE "NEW YORK PROCESS AGENT") AS
PROCESS AGENT IN ITS NAME, PLACE AND STEAD TO RECEIVE AND FORWARD SERVICE OF ANY
AND ALL WRITS, SUMMONSES AND OTHER LEGAL PROCESS IN ANY SUIT, ACTION OR
PROCEEDING BROUGHT IN THE STATE OF NEW YORK, AGREES THAT SUCH SERVICE IN ANY
SUCH SUIT, ACTION OR PROCEEDING MAY BE MADE UPON THE NEW YORK PROCESS AGENT, AND
AGREES TO TAKE ALL SUCH ACTION AS MAY BE NECESSARY TO CONTINUE SAID APPOINTMENT
IN FULL FORCE AND EFFECT.

      11.18 CERTAIN WAIVERS.

            (a) WAIVER OF JURY TRIAL. THE COMPANY, EACH OTHER LOAN PARTY, THE
LENDERS AND THE ADMINISTRATIVE AGENT EACH IRREVOCABLY AND UNCONDITIONALLY WAIVE
TO THE FULLEST EXTENT PERMITTED BY LAW, THEIR RESPECTIVE RIGHTS TO A TRIAL BY
JURY OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF OR RELATED TO
THIS AGREEMENT, THE OTHER LOAN DOCUMENTS, OR THE TRANSACTIONS CONTEMPLATED
HEREBY OR THEREBY, IN ANY ACTION, PROCEEDING OR OTHER LITIGATION OF ANY TYPE
BROUGHT BY ANY OF THE PARTIES AGAINST ANY OTHER PARTY OR ANY AGENT-RELATED
PERSON, PARTICIPANT OR ASSIGNEE, WHETHER WITH RESPECT TO CONTRACT CLAIMS, TORT
CLAIMS, OR OTHERWISE. THE COMPANY, THE LENDERS AND THE ADMINISTRATIVE AGENT EACH
AGREE THAT ANY SUCH CLAIM OR CAUSE OF ACTION SHALL BE TRIED BY A COURT TRIAL
WITHOUT A JURY. WITHOUT LIMITING THE FOREGOING, THE PARTIES FURTHER AGREE THAT
THEIR RESPECTIVE RIGHT TO A TRIAL BY JURY IS WAIVED BY OPERATION OF THIS SECTION
AS TO ANY ACTION, COUNTERCLAIM OR OTHER PROCEEDING WHICH SEEKS, IN WHOLE OR IN
PART, TO CHALLENGE THE VALIDITY OR ENFORCEABILITY OF THIS AGREEMENT OR THE OTHER
LOAN DOCUMENTS OR ANY PROVISION HEREOF OR THEREOF. THIS WAIVER SHALL APPLY TO
ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS
AGREEMENT AND THE OTHER LOAN DOCUMENTS.

            (b) WAIVER OF CERTAIN DAMAGES. THE COMPANY AND EACH OTHER LOAN PARTY
EACH IRREVOCABLY AND UNCONDITIONALLY WAIVE, TO THE FULLEST EXTENT PERMITTED BY
LAW, ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY LITIGATION OF THE TYPE
DESCRIBED IN SECTION 11.18(a), ANY SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL
DAMAGES, OR DAMAGES OTHER THAN, OR IN ADDITION TO, ACTUAL DAMAGES.

      11.19 Assignment. Those Lenders who are parties to the Existing Credit
Agreement hereby assign to the Lenders who are signatories hereto the
indebtedness owed to them under the Existing Credit Agreement in such amounts so
that on the effective date of this Agreement all Lenders who are signatories
hereto have Commitments and hold Loans in the Pro Rata Shares that are set forth
on SCHEDULE 2.01 hereto.


                                      -80-

      11.20 Entire Agreement. This Agreement, together with the other Loan
Documents, embodies the entire agreement and understanding among the Company,
the Lenders and the Administrative Agent, and supersedes all prior or
contemporaneous agreements and understandings of such Persons, verbal or
written, relating to the subject matter hereof and thereof.

      THIS WRITTEN LOAN AGREEMENT, TOGETHER WITH THE OTHER WRITTEN LOAN
DOCUMENTS EXECUTED IN CONNECTION HEREWITH, REPRESENTS THE FINAL AGREEMENT
BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.

      THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.


                   [SIGNATURES BEGIN ON THE FOLLOWING PAGE]


                                      -81-

      IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their proper and duly authorized officers as of
the day and year first above written.


                                       GIANT INDUSTRIES, INC.



                                       By      /s/ Gary R. Dalke
                                          ------------------------------------
                                       Name:   Gary R. Dalke
                                            ----------------------------------
                                       Title:  Vice President
                                             ---------------------------------



           [THIS IS A SIGNATURE PAGE TO THE GIANT INDUSTRIES, INC.
                SECOND AMENDED AND RESTATED CREDIT AGREEMENT]

                                       BANK OF AMERICA, N.A., as Administrative
                                       Agent, as Letter of Credit Issuing Bank
                                       and as a Lender



                                       By  /s/ Claire M. Liu
                                           -----------------------------------
                                           Claire M. Liu
                                           Managing Director



           [THIS IS A SIGNATURE PAGE TO THE GIANT INDUSTRIES, INC.
                SECOND AMENDED AND RESTATED CREDIT AGREEMENT]

                                       BANK OF SCOTLAND



                                       By      /s/ Joseph Fratus
                                           -----------------------------------
                                       Name:   Joseph Fratus
                                            ----------------------------------
                                       Title:  Vice President
                                             ---------------------------------



           [THIS IS A SIGNATURE PAGE TO THE GIANT INDUSTRIES, INC.
                SECOND AMENDED AND RESTATED CREDIT AGREEMENT]

                                       BNP PARIBAS



                                       By      /s/ Mark A. Cox
                                           -----------------------------------
                                       Name:   Mark A. Cox
                                            ----------------------------------
                                       Title:  Director
                                             ---------------------------------



                                       By      /s/Greg Smothers
                                           -----------------------------------
                                       Name:   Greg Smothers
                                            ----------------------------------
                                       Title:  Vice President
                                             ---------------------------------



           [THIS IS A SIGNATURE PAGE TO THE GIANT INDUSTRIES, INC.
                SECOND AMENDED AND RESTATED CREDIT AGREEMENT]

                                       FLEET NATIONAL BANK



                                       By      /s/ Allison I. Rossi
                                           -----------------------------------
                                       Name:   Allison I. Rossi
                                            ----------------------------------
                                       Title:  Vice President
                                             ---------------------------------



           [THIS IS A SIGNATURE PAGE TO THE GIANT INDUSTRIES, INC.
                SECOND AMENDED AND RESTATED CREDIT AGREEMENT]

                                       HIBERNIA NATIONAL BANK



                                       By      /s/ Nancy G. Moragas
                                           -----------------------------------
                                       Name:   Nancy G. Moragas
                                            ----------------------------------
                                       Title:  Vice President
                                             ---------------------------------



           [THIS IS A SIGNATURE PAGE TO THE GIANT INDUSTRIES, INC.
                SECOND AMENDED AND RESTATED CREDIT AGREEMENT]

                                       RZB FINANCE LLC
                                       as a Lender


                                       By      /s/ Pearl Geffers
                                           -----------------------------------
                                       Name:   Pearl Geffers
                                            ----------------------------------
                                       Title:  First Vice President
                                             ---------------------------------


                                       By      /s/ John A. Valiska
                                           -----------------------------------
                                       Name:   John A. Valiska
                                            ----------------------------------
                                       Title:  Vice President
                                             ---------------------------------



           [THIS IS A SIGNATURE PAGE TO THE GIANT INDUSTRIES, INC.
                SECOND AMENDED AND RESTATED CREDIT AGREEMENT]

                                       WELLS FARGO BANK, N.A.



                                       By      /s/ Art Krasny
                                           -----------------------------------
                                       Name:   Art Krasny
                                            ----------------------------------
                                       Title:  Relationship Manager
                                             ---------------------------------



           [THIS IS A SIGNATURE PAGE TO THE GIANT INDUSTRIES, INC.
                SECOND AMENDED AND RESTATED CREDIT AGREEMENT]

                                  SCHEDULE 1.01

                       PREFERRED ELIGIBLE ACCOUNT OBLIGORS



              BP, P.L.C.
              Chevron Texaco Corporation
              Conoco, Inc.
              ExxonMobil Corporation
              Shell Transport & Trading Company, P.L.C.
              Texaco Trading & Transportation, Inc.

                                SCHEDULE 1.01(A)

                  SCHEDULED ADJUSTMENTS TO CONSOLIDATED EBITDA


      Consolidated EBITDA for the five (5) fiscal quarters ended on the dates
      set forth below shall be adjusted as follows on a pro forma basis to take
      into account the Yorktown Acquisition.



            Fiscal Quarter Ending:   Proforma Adjustment to Consolidated EBITDA
            ----------------------   ------------------------------------------
                                  
            March 31, 2002                        $45,900,000
            June 30, 2002                         $37,900,000
            September 30, 2002                    $24,600,000
            December 31, 2002                     $15,800,000
            March 31, 2003                        $ 8,000,000


                                  SCHEDULE 2.01

                                   COMMITMENTS




       BANK                          COMMITMENT             PRO RATA SHARE
                                                      
Bank of America, N.A.              $ 20,000,000                   20.0%
BNP Paribas                        $ 20,000,000                   20.0%
Fleet National Bank                $ 20,000,000                   20.0%
Bank of Scotland                   $ 10,000,000                   10.0%
Hibernia National Bank             $ 10,000,000                   10.0%
RZB Finance LLC                    $ 10,000,000                   10.0%
Wells Fargo Bank, N.A.             $ 10,000,000                   10.0%

Total                              $100,000,000                  100.0%


                                  SCHEDULE 2.02

                                  PRICING CHART


                        (Expressed in percent per annum)




================================================================================================
                                                                        LETTER OF
                                                                       CREDIT RISK
                                                  LIBOR    BASE RATE  PARTICIPATION  COMMITMENT
 LEVEL   TOTAL LEVERAGE RATIO                    MARGIN      MARGIN        FEE           FEE
- ------------------------------------------------------------------------------------------------
                                                                         
   I     Less than or equal to 2.50               2.25%      1.25%        2.25%        0.50%

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

  II          Greater than 2.50,                  2.50%      1.50%        2.50%        0.50%
        but less than or equal to 3.50

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

  III      Greater than 3.50                      2.75%      1.75%        2.75%        0.50%
================================================================================================


Each adjustment of the Applicable Margins, the Risk Participation Fee and the
Commitment Fee shall be made by the Administrative Agent and shall be effective
as of the earlier of (a) the date upon which the Company delivers a Compliance
Certificate to the Administrative Agent pursuant to SECTION 7.02(b) reflecting a
changed pricing level (accompanied and supported by the financial statements
with respect to which such Compliance Certificate is required to be delivered)
and (b) the date upon which the Company is required by SECTION 7.02(b) to
deliver such Compliance Certificate; provided, however, that, if a Compliance
Certificate is not delivered by the date required in SECTION 7.02(b), then,
subject to the other provisions of this Agreement, commencing on the date such
Compliance Certificate was required until such Compliance Certificate is
delivered, the Applicable Margins, the Risk Participation Fee and the Commitment
Fee shall be those indicated for Level III, and from and after the date such
Compliance Certificate is thereafter received, the Applicable Margins, the Risk
Participation Fee and the Commitment Fee shall be as determined from such
Compliance Certificate. Notwithstanding any provision of the foregoing to the
contrary, the Applicable Margins, the Risk Participation Fee and the Commitment
Fee shall be those indicated for Level III for the period commencing on the
Closing Date and continuing through the date upon which the Company delivers a
Compliance Certificate to the Administrative Agent pursuant to SECTION 7.02(b)
reflecting a changed pricing level (accompanied and supported by the financial
statements with respect to which such Compliance Certificate is required to be
delivered), but in any event not earlier than the date upon which the Company
delivers the Compliance Certificate for the fiscal quarter ended June 30, 2002.

                                  SCHEDULE 3.03

                           EXISTING LETTERS OF CREDIT





                                                  OUTSTANDING
                                 L/C NO.             AMOUNT
                                 -------             ------

                                                       US
No.                    Beneficiary                    Amount           Iss.        Exp.         Cur.
                                                                                
T00000000221969        CITY OF GALLUP, NM        $    6,600.00       8/23/99      6/23/02       USD
T00000000222564        STATE OF NEW MEXICO       $  400,000.00       8/23/99      5/04/02       USD
T00000007354858        STATE OF NEW MEXICO       $  776,840.00       8/23/99      6/01/02       USD
T00000000225605        CITY OF SANTA FE, NM      $   85,000.00       8/23/99     10/17/02       USD
T00000007400537        CITY OF SANTA FE, NM      $   79,582.05       8/23/99     10/25/02       USD
T00000007405118        NATIONAL UNION FIRE       $1,780,936.00       3/20/01     11/01/02       USD

T00000003006785        COMMERCIAL FUELING        $   10,000.00      10/10/01      9/15/02       USD
                       NETWORK
T00000007408524        LIBERTY MUTUAL INS.       $  147,500.00      12/28/01     11/02/02       USD

                               Total:            $3,286,458.05
                                                 =============


                                  SCHEDULE 5.01

                            POST-CLOSING REQUIREMENTS



            Compliance Item                        Date for Compliance(1)
            ---------------                        ----------------------
                                                
1. Deposit Account Control Agreements of
any depository bank other than Bank of
America, N.A.

2. Investment Account Control Agreements

3. Such consents, estoppels,
subordination agreements and other
documents and instruments executed by
landlords and other Persons party to
material contracts relating to any
Collateral as to which the
Administrative Agent shall be granted a
Lien for the benefit of the Lenders

4. Such other items as the
Administrative Agent may determine



(1) Date for compliance to be specified by the Administrative Agent, but no
longer than 90 days after the Closing Date

                                  SCHEDULE 6.11

                             UNDISCLOSED LIABILITIES

                                      NONE

                                  SCHEDULE 6.16

                       SUBSIDIARIES AND MINORITY INTERESTS


(a)   Subsidiaries

The following is a wholly-owned Subsidiary of the Company:

            Giant Industries Arizona, Inc., an Arizona corporation

The following are wholly-owned Subsidiaries of Giant Industries Arizona, Inc.:

            Ciniza Production Company, a New Mexico corporation
            San Juan Refining Company, a New Mexico corporation
            Giant Four Corners, Inc., an Arizona corporation
            Phoenix Fuel Co., Inc., an Arizona corporation
            De Guelle Oil Company, a Colorado corporation
            Giant Mid-Continent, Inc., an Arizona corporation
            Giant Stop-N-Go of New Mexico, a New Mexico corporation
            Giant Pipeline Company, a New Mexico corporation
            Giant Southwest Refining LLC, an Arizona limited liability company
            Giant Yorktown, Inc., a Delaware corporation
            Giant Yorktown Holding Company

The following is a Subsidiary of Giant Four Corners, Inc.:

            Navajo Convenient Stores Co., LLC, a New Mexico limited liability
            company

            -     66-2/3% owned by Giant Four Corners, Inc., remaining
                  interest owned by Navajo Convenient Stores Employee Trust

(b)   Equity Investments

            None

                                  SCHEDULE 8.01

                                 PERMITTED LIENS



1.    Liens Securing the Yorktown Term Loan ("Yorktown Term Loan Collateral"):

ALL RIGHT, TITLE AND INTEREST OF GIANT YORKTOWN, INC., AS GRANTOR ("GRANTOR"),
HOWEVER ARISING AND WHETHER NOW EXISTING OR HEREAFTER ACQUIRED OR ARISING, IN
AND TO THE FOLLOWING:

            (A) the Site and the Facility and all buildings, structures and
      other improvements now or in the future located on the Site (the
      "Improvements"), (the Site and Improvements, together with Appurtenant
      Rights, Fixtures and Related Equipment (as such terms are defined below)
      relating thereto being collectively referred to as the "Property");

            (B) all the estate, right, title, claim or demand whatsoever of
      Grantor, in possession or expectancy, in and to the Property or any part
      thereof;

            (C) all of the fixtures of every kind and nature whatsoever, and all
      appurtenances and additions thereto and substitutions or replacements
      thereof (together with, in each case, attachments, components, parts and
      accessories) currently or subsequently attached to the Property (all of
      the foregoing in this paragraph (C) being referred to as the "Fixtures");

            (D) all substitutes and replacements of, and all additions and
      improvements to, the Property and the Fixtures, subsequently acquired or
      constructed, assembled or placed on the Site, immediately upon such
      acquisition, construction, assembling or placement, including any and all
      building materials whether stored at the Property or offsite, and, in each
      such case, without any further conveyance, mortgage, assignment or other
      act by Grantor;

            (E) all equipment constituting part of the Facility and all
      equipment located on the Site, and all appurtenances and additions to the
      Property and substitutions or replacements to the Property (together with,
      in each case, attachments, components, parts and accessories) now or
      subsequently attached to, or contained in or used or usable in any way in
      connection with any operation or letting of the Property (all of the
      foregoing in this paragraph (E) being referred to collectively as the
      "Related Equipment");

            (F) all equipment records;

            (G) all insurance policies (including title insurance policies, to
      the extent assignable) required to be maintained pursuant to any Yorktown
      Term Loan Document, including the right to collect and receive such
      proceeds; and all awards and other compensation, including the interest
      payable thereon and the right to collect and receive the same, for the
      taking by eminent domain, condemnation or otherwise, of all or any part of
      the Property or any easement or other right therein and, to the extent nor
      otherwise included, all payments under insurance, or any indemnity,

      warranty or guaranty, payable by reason of loss or damage to or otherwise
      with respect to any of the foregoing;

            (H) (i) all consents, licenses, permits, certificates of occupancy
      and other governmental approvals relating to construction, completion,
      ownership, occupancy, use, maintenance or operation of the Property or any
      part thereof and (ii) all plans and specifications relating to the
      Property;

            (I) all rents, payments, purchase prices, receipts, revenues, issues
      and profits payable pursuant to any lease or sublease or occupancy
      agreement, including any guaranties relating thereto, with respect to the
      Property;

            (J) all intangible property used in connection with the Property,
      including without limitation, all contract rights, guarantees, licenses,
      permits, registrations and warranties relating solely to the ownership or
      maintenance of the Property; and all of the Grantor's right, title and
      interest in and to all proceeds of the conversion, whether voluntary or
      involuntary, of any of the above-described property into cash or other
      liquid claims, including, without limitation, all awards, payments or
      proceeds, including interest thereon, and the right to receive the same,
      which may be made as a result of casualty, any exercise of the right of
      eminent domain or deed in lieu thereof, the alteration of the grade of any
      street and any injury to or decrease in the value thereof, and any rights
      to a rebate, offset or other assignment, warranty or service under a
      purchase order, invoice or purchase agreement with any manufacturer or
      supplier of any portion of the foregoing, provided, however, that the
      foregoing shall exclude any and all contracts and contract rights relating
      to the supply of inventory (including without limitation all (A) crude
      oil, natural gas and natural gas liquids, other hydrocarbons and ethanol
      (together, "Feedstocks"), (B) Feedstocks that have been partially
      processed or refined as isomerate, cat feed, gasoline components or naptha
      (together, "Intermediate Products") and (C) gasoline, diesel, aviation
      fuel, fuel oil, propane, ethanol, transmix and other products processed,
      refined or blended from Feedstocks and Intermediate Products (together,
      "Refined Products")) to the Property and any and all contracts and
      contract rights relating to the sale of inventory (including without
      limitation all Feedstocks, Intermediate Products and Refined Products)
      processed, refined or blended at the Property;

            (K) all tenements, hereditaments, appurtenances, privileges, options
      to purchase or lease all or any part of the Property or any interest
      therein (and any greater estate in the Property now owned or hereafter
      acquired pursuant thereto), and all other rights and interests now or in
      the future benefiting or otherwise relating to the Property, including
      easements, rights-of-way, sidewalks, alleys and strips and gores of land
      adjacent to or used in connection with the Property, development rights,
      mineral rights, water rights and water stock (collectively, "Appurtenant
      Rights"); and

            (M) all accessions, rents, issues, profits, returns, income and
      proceeds, both cash and noncash, of the foregoing.


As used in this SCHEDULE 8.01, the term "Facility" means that certain refinery
located in Yorktown, Virginia and described in the Yorktown Term Loan Documents,
together with all improvements, fixtures,

equipment, appurtenant rights and attachments thereto now or hereafter located
thereon, related or attached thereto; the term "Property" means, collectively,
the Facility and the Site; and the term "Site" means the land and other rights
described in the Yorktown Term Loan Documents.

Notwithstanding any provision of the foregoing to the contrary, the Yorktown
Term Loan Collateral does not include or consist of, to any extent, any
inventory or accounts or proceeds of inventory or accounts (as such terms are
defined in the Uniform Commercial Code as now or hereafter in effect in the
State of New York) of the Grantor (collectively, the "Excluded Collateral"),
whether or not located on, related to or arising out of the use or operation of
the Property.

2. Liens securing capitalized service station lease obligations of Giant Four
Corners, Inc., presently in the aggregate amount of $6,702,831.72, to Thriftway
Marketing Corp.

                                  SCHEDULE 8.04

                         PERMITTED LOANS AND INVESTMENTS


1.    $5,000,000 loan by Giant Industries, Inc. to James E. Acridge due March,
      2003.

                                  SCHEDULE 8.05

                         CERTAIN PERMITTED INDEBTEDNESS


1.    The Company and Giant Arizona:




DESCRIPTION                               BALANCE
                                       
Miscellaneous                             $ 500,000 (estimate)

TOTAL                                     $ 500,000
                                          =========



2.    Phoenix:



DESCRIPTION                               BALANCE
                                       
David G. & Judith G. Scott                $ 63,740.77
Note

Chrysler Credit Corporation               $  6,869.29
Capital Lease

Naumann Hobbs                             $  8,225.82
                                          -----------
Capital Lease

                                          $ 78,835.88
                                          ===========


3. Obligations of Giant Four Corners, Inc. under the Master Lease and Option
Agreement executed pursuant to, and in the form attached as Exhibit B to, the
Definitive Agreement dated April 18, 1997 by and between Giant Four Corners,
Inc. as "Buyer" and Thriftway Marketing Corp. and Clayton Investment Company,
collectively as "Seller," and the Associated Purchase and Sale Agreements to
such Definitive Agreement, not to exceed $6,702,831.72 in the aggregate, such
obligations to be guaranteed by Giant Arizona.

4. The Company is Issuer of, and the Subsidiaries that are Guarantors hereunder
are Guarantors of, the $150,000,000 9% Senior Subordinated Notes Due 2007,
pursuant to Indenture dated as of August 26, 1997.

5. The Company is Issuer of, and the Subsidiaries that are Guarantors hereunder
are Guarantors of, the $200,000,000 11% Senior Subordinated Notes Due 2012,
pursuant to Indenture dated as of May 14, 2002.

6. The Company is Issuer of, and the Subsidiaries that are Guarantors hereunder
are Guarantors of, the $100,000,000 9 -3/4% Senior Subordinated Notes due 2003,
pursuant to Indenture dated November 29, 1993. The Company has irrevocably
deposited sufficient funds to repay such Indebtedness.

                                 SCHEDULE 11.02

             ADDRESSES FOR NOTICES TO BORROWER, GUARANTORS AND AGENT


GIANT INDUSTRIES, INC.

Giant Industries, Inc.
23733 North Scottsdale Road
Scottsdale, Arizona  85255-3465
Attention:  President
Telephone:  (602) 585-8888
Facsimile:  (602) 585-8893


GUARANTORS

[NAME OF GUARANTOR]
c/o Giant Industries, Inc.
23733 North Scottsdale Road
Scottsdale, Arizona  85255-3465
Attention:  President
Telephone:  (602) 585-8888
Facsimile:  (602) 585-8893


BANK OF AMERICA, N.A.,
  as Administrative Agent

Administrative Agent's Payment office:

Bank of America
ABA No.:  111000012
Acct. No.:  1292000883
Ref:  Giant Industries, Inc.

Bank of America, N.A.
901 Main Street
Dallas, Texas  75282--3714
Attention:  Ben Cosgrove
Telephone:  (214) 290-9254
Facsimile:  (214) 290-9439

BANK OF AMERICA, N.A.,
as Issuing Bank

Address for Notices:

231 South LaSalle Street
Chicago, Illinois 60697
Attention:  Riyaz Kaka
Telephone:  (312) 923-5924
Facsimile:   (312) 987-6828

With a copy to:

Bank of America, N.A.
Three Allen Center
333 Clay Street, Suite 4550
Attention:  Claire Liu/Pamela Rodgers
Houston, Texas 77002-4103
Telephone:  (713) 651-4855
Facsimile:   (713) 651-4841

EX-10.36

                                                                   EXHIBIT 10.36


                          REGISTRATION RIGHTS AGREEMENT

                                  BY AND AMONG

                             GIANT INDUSTRIES, INC.,

                            THE SUBSIDIARY GUARANTORS
                          LISTED ON SCHEDULE A HERETO,

                                       AND

                         BANC OF AMERICA SECURITIES LLC
                          BNP PARIBAS SECURITIES CORP.
                             FLEET SECURITIES, INC.


                            DATED AS OF MAY 14, 2002

                          REGISTRATION RIGHTS AGREEMENT

                  This Registration Rights Agreement (this "Agreement") is made
and entered into as of May 14, 2002, by and among Giant Industries, Inc., a
Delaware corporation (the "Company"), the subsidiary guarantors listed on
Schedule A hereto (the "Subsidiary Guarantors"), and Banc of America Securities
LLC, BNP Paribas Securities Corp. and Fleet Securities, Inc. (each a "Purchaser"
and, collectively, the "Purchasers"), each of whom has agreed to purchase the
Company's 11% Senior Subordinated Notes due 2012 (the "Notes") pursuant to the
Purchase Agreement (as defined below).

                  The payment of principal of, premium and Liquidated Damages
(as defined below), if any, and interest on the Notes and the Exchange Notes (as
defined below) will be fully and unconditionally guaranteed on a senior
subordinated basis, jointly and severally by each of the Subsidiary Guarantors
pursuant to their guarantees (the "Guarantees"). The Company and the Subsidiary
Guarantors are herein collectively referred to as the "Companies"; the Notes and
the Guarantees thereof are herein collectively referred to as the "Securities";
and the Exchange Notes and the Guarantees thereof are herein collectively
referred to as the "Exchange Securities".

                  This Agreement is made pursuant to the Purchase Agreement,
dated as of April , 2002 (the "Purchase Agreement"), by and among the Companies
and the Purchasers (i) for your benefit and for the benefit of each other
Purchaser and (ii) for the benefit of the holders from time to time of the
Securities and Exchange Securities (including you and each other Purchaser). In
order to induce the Purchasers to purchase the Securities, the Companies have
agreed to provide the registration rights set forth in this Agreement. The
execution and delivery of this Agreement is a condition to the obligations of
the Purchasers set forth in the Purchase Agreement.

                  The parties hereby agree as follows:

                           SECTION 1. DEFINITIONS

                  As used in this Agreement, the following capitalized terms
shall have the following meanings:

                  Advice: As defined in Section 6(d) hereto.

                  Agreement: As defined in the preamble hereto.

                  Broker-Dealer: Any broker or dealer registered under the
         Exchange Act.

                  Closing Date: The date of this Agreement.

                  Commission: The Securities and Exchange Commission.

                  Company: As defined in the preamble hereto.

                  Companies:  As defined in the preamble hereto.


                                       1

                  Consummate: A registered Exchange Offer shall be deemed
         "Consummated" for purposes of this Agreement upon the occurrence of (i)
         the filing and effectiveness under the Securities Act of the Exchange
         Offer Registration Statement relating to the Exchange Securities to be
         issued in the Exchange Offer, (ii) the maintenance of such Registration
         Statement continuously effective and the keeping of the Exchange Offer
         open for a period not less than the minimum period required pursuant to
         Section 3(b) hereof, and (iii) the delivery by the Companies to the
         Registrar under the Indenture of Exchange Securities in the same
         aggregate principal amount as the aggregate principal amount of
         Securities that were tendered by Holders thereof pursuant to the
         Exchange Offer.

                  Effectiveness Target Date: As defined in Section 3(a) hereof
         with respect to the Exchange Offer Registration Statement and as
         defined in Section 4(a) hereof with respect to the Shelf Registration
         Statement.

                  Exchange Act: The Securities Exchange Act of 1934 (15 U.S.C.,
         Sections 78a to 78jj), as amended.

                  Exchange Notes: The 11% Senior Subordinated Notes due 2012, of
         the same series under the Indenture as the Notes, to be issued to
         Holders in exchange for Transfer Restricted Securities pursuant to this
         Agreement, with the Exchange Notes having substantially identical terms
         to the Notes.

                  Exchange Offer: The registration by the Companies under the
         Securities Act of the Exchange Securities pursuant to a Registration
         Statement pursuant to which the Companies offer the Holders of all
         outstanding Transfer Restricted Securities the opportunity to exchange
         all such outstanding Transfer Restricted Securities held by such
         Holders for Exchange Securities in an aggregate principal amount equal
         to the aggregate principal amount of the Transfer Restricted Securities
         tendered in such exchange offer by such Holders.

                  Exchange Offer Registration Statement: The Registration
         Statement relating to the Exchange Offer, including the related
         Prospectus.

                  Exchange Securities: As defined in the preamble hereto.

                  Exempt Resales: The transactions in which the Purchasers
         propose to sell the Securities to certain "qualified institutional
         buyers," as such term is defined in Rule 144A under the Securities Act,
         and to non-U.S. persons pursuant to Regulation S under the Securities
         Act.

                  Guarantees: As defined in the preamble hereto.

                  Holder: As defined in Section 2(b) hereof.

                  Indemnified Holder: As defined in Section 8(a) hereof.

                  Indenture: The Indenture, dated as of April , 2002, among the
         Company, as issuer, the Subsidiary Guarantors, as guarantors, and The
         Bank of New York, as trustee


                                       2

         (the "Trustee"), pursuant to which the Securities and the Exchange
         Securities are to be issued, as such Indenture is amended or
         supplemented from time to time in accordance with the terms thereof.

                  Initial Placement: The issuance and sale by the Companies of
         the Securities to the Purchasers pursuant to the Purchase Agreement.

                  Liquidated Damages: As defined in Section 5 hereof.

                  NASD: The National Association of Securities Dealers, Inc.

                  Notes: As defined in the preamble hereto.

                  Person: An individual, partnership, corporation, limited
         liability company, trust or unincorporated organization, or a
         government or agency or political subdivision thereof.

                  Prospectus: The prospectus included in a Registration
         Statement, as amended or supplemented by any prospectus supplement and
         by all other amendments thereto, including post-effective amendments,
         and all material incorporated by reference into such prospectus.

                  Purchase Agreement: As defined in the preamble hereto.

                  Purchasers: As defined in the preamble hereto.

                  Registrar: As defined in the Indenture.

                  Registration Default: As defined in Section 5 hereof.

                  Registration Statement: Any registration statement of the
         Companies relating to (a) an offering of Exchange Securities pursuant
         to an Exchange Offer or (b) the registration for resale of Transfer
         Restricted Securities pursuant to the Shelf Registration Statement,
         which is filed pursuant to the provisions of this Agreement, in each
         case, including the Prospectus included therein, all amendments and
         supplements thereto (including post-effective amendments) and all
         exhibits and material incorporated by reference therein.

                  Securities: As defined in the preamble hereto.

                  Securities Act: The Securities Act of 1933 (15 U.S.C.,
         Sections 77a to 77aa), as amended.

                  Shelf Filing Deadline: As defined in Section 4 hereof.

                  Shelf Registration Statement: As defined in Section 4 hereof.

                  Subsidiary Guarantors: As defined in the preamble hereto.


                                       3

                  Suspension Period: As defined in Section 4(a) hereof.

                  Transfer Restricted Security: Each Security, until the
         earliest to occur of (a) the date on which such Security is exchanged
         in the Exchange Offer and entitled to be resold to the public by the
         Holder thereof without complying with the prospectus delivery
         requirements of the Securities Act, (b) the date on which such Security
         has been effectively registered under the Securities Act and disposed
         of in accordance with a Shelf Registration Statement and (c) the date
         on which such Security is distributed to the public pursuant to Rule
         144 under the Securities Act or by a Broker-Dealer pursuant to the
         "Plan of Distribution" contemplated by the Exchange Offer Registration
         Statement (including delivery of the Prospectus contained therein).

                  Trust Indenture Act: The Trust Indenture Act of 1939 (15
         U.S.C. Sections 77aaa to 77bbbb), as in effect on the date of the
         Indenture.

                  Underwritten Registration or Underwritten Offering: A
         registration in which Securities are sold to an underwriter for
         reoffering to the public.

                           SECTION 2. SECURITIES SUBJECT TO THIS AGREEMENT

                           (a) Transfer Restricted Securities. The securities
         entitled to the benefits of this Agreement are the Transfer Restricted
         Securities.

                           (b) Holders of Transfer Restricted Securities. A
         Person is deemed to be a holder of Transfer Restricted Securities
         (each, a "Holder") whenever such Person owns Transfer Restricted
         Securities.

                           SECTION 3. REGISTERED EXCHANGE OFFER

                           (a) Unless the Exchange Offer shall not be
         permissible under applicable law or Commission policy (after the
         procedures set forth in Section 6(a) below have been complied with),
         the Companies shall (i) cause to be filed with the Commission as soon
         as practicable after the Closing Date, but in no event later than 60
         days after the Closing Date (or, if the 60th day is not a business day,
         the first business day thereafter), a Registration Statement under the
         Securities Act relating to the Exchange Securities and the Exchange
         Offer, (ii) use its best efforts to cause such Registration Statement
         to become effective at the earliest possible time, but in no event
         later than 150 days after the Closing Date (or, if the 150th day is not
         a business day, the first business day thereafter) (as such date
         relates to the Exchange Offer Registration Statement, the
         "Effectiveness Target Date"), (iii) in connection with the foregoing,
         file (A) all pre-effective amendments to such Registration Statement as
         may be necessary in order to cause such Registration Statement to
         become effective, (B) if applicable, a post-effective amendment to such
         Registration Statement pursuant to Rule 430A under the Securities Act
         and (C) all necessary filings in connection with the registration and
         qualification of the Exchange Securities to be made under the Blue Sky
         laws of such jurisdictions as are necessary to permit Consummation of
         the Exchange Offer, and (iv) upon the effectiveness of such
         Registration Statement, commence the Exchange Offer. The Exchange Offer
         shall be on the appropriate form permitting registration of the
         Exchange Securities to be offered in


                                       4

         exchange for the Transfer Restricted Securities and to permit resales
         of Exchange Securities held by Broker-Dealers as contemplated by
         Section 3(c) below.

                           (b) The Companies shall cause the Exchange Offer
         Registration Statement to be effective continuously and shall keep the
         Exchange Offer open for a period of not less than the minimum period
         required under applicable federal and state securities laws to
         Consummate the Exchange Offer; provided, however, that in no event
         shall such period be less than 30 days after the date notice of the
         Exchange Offer is mailed to the Holders. The Companies shall cause the
         Exchange Offer to comply with all applicable federal and state
         securities laws. No securities other than the Exchange Securities shall
         be included in the Exchange Offer Registration Statement. The Companies
         shall use their best efforts to cause the Exchange Offer to be
         Consummated on the earliest practicable date after the Exchange Offer
         Registration Statement has become effective, but in no event later than
         30 business days after the Effectiveness Target Date with respect to
         the Exchange Offer Registration Statement.

                           (c) The Companies shall indicate in a "Plan of
         Distribution" section contained in the Prospectus forming a part of the
         Exchange Offer Registration Statement that any Broker-Dealer who holds
         Securities that are Transfer Restricted Securities and that were
         acquired for its own account as a result of market-making activities or
         other trading activities (other than Transfer Restricted Securities
         acquired directly from the Companies), may exchange such Securities
         pursuant to the Exchange Offer; however, such Broker-Dealer may be
         deemed to be an "underwriter" within the meaning of the Securities Act
         and must, therefore, deliver a prospectus meeting the requirements of
         the Securities Act in connection with any resales of the Exchange
         Securities received by such Broker-Dealer in the Exchange Offer, which
         prospectus delivery requirement may be satisfied by the delivery by
         such Broker-Dealer of the Prospectus contained in the Exchange Offer
         Registration Statement. Such "Plan of Distribution" section shall also
         contain all other information with respect to such resales by
         Broker-Dealers that the Commission may require in order to permit such
         resales pursuant thereto, but such "Plan of Distribution" shall not
         name any such Broker-Dealer or disclose the amount of Exchange
         Securities held by any such Broker-Dealer except to the extent required
         by the Commission as a result of a change in policy after the date of
         this Agreement.

                           The Companies shall use their best efforts to keep
         the Exchange Offer Registration Statement continuously effective,
         supplemented and amended as required by the provisions of Section 6(c)
         below to the extent necessary to ensure that it is available for
         resales of Exchange Securities received in exchange for Securities
         acquired by Broker-Dealers for their own accounts as a result of
         market-making activities or other trading activities, and to ensure
         that it conforms with the requirements of this Agreement, the
         Securities Act and the policies, rules and regulations of the
         Commission as announced from time to time, for a period ending on the
         earlier of (i) 180 days from the date on which the Exchange Offer
         Registration Statement is declared effective and (ii) the date on which
         a Broker-Dealer is no longer required to deliver a prospectus in
         connection with market-making or other trading activities.


                                       5

                           The Companies shall provide sufficient copies of the
         latest version of such Prospectus to Broker-Dealers promptly upon
         request at any time during such 180-day (or shorter as provided in the
         foregoing sentence) period in order to facilitate such resales.

                           SECTION 4. SHELF REGISTRATION

                           (a) Shelf Registration. If (i) the Companies are not
         required to file an Exchange Offer Registration Statement or to
         consummate the Exchange Offer because the Exchange Offer is not
         permitted by applicable law or Commission policy (after the procedures
         set forth in Section 6(a) below have been complied with), (ii) for any
         reason the Exchange Offer is not Consummated within 180 days after the
         Closing Date, or (iii) any Holder of Transfer Restricted Securities
         shall notify the Company prior to the 20th day following the
         Consummation of the Exchange Offer that (A) such Holder is prohibited
         by applicable law or Commission policy from participating in the
         Exchange Offer, or (B) such Holder may not resell the Exchange
         Securities acquired by it in the Exchange Offer to the public without
         delivering a prospectus and that the Prospectus contained in the
         Exchange Offer Registration Statement is not appropriate or available
         for such resales by such Holder, or (C) such Holder is a Broker-Dealer
         and holds Securities acquired directly from the Companies or one of
         their affiliates, then, upon such Holder's request, the Companies
         shall:

                                    (x) cause to be filed a shelf registration
                  statement pursuant to Rule 415 under the Securities Act, which
                  may be an amendment to the Exchange Offer Registration
                  Statement (in either event, the "Shelf Registration
                  Statement") on or prior to the earliest to occur of (1) the
                  45th day after the date on which the Companies determine that
                  they are not required to file the Exchange Offer Registration
                  Statement and (2) the 45th day after the date on which the
                  Companies receive the notice from a Holder of Transfer
                  Restricted Securities as contemplated by clause (iii) above
                  (such earliest date being the "Shelf Filing Deadline"), which
                  Shelf Registration Statement shall provide for resales of all
                  Transfer Restricted Securities the Holders of which shall have
                  provided the information required pursuant to Section 4(b)
                  hereof; and

                                    (y) use their best efforts to cause such
                  Shelf Registration Statement to be declared effective by the
                  Commission on or before the 90th day after the Shelf Filing
                  Deadline (as such date relates to the Shelf Registration
                  Statement, the "Effectiveness Target Date").

         The Companies shall use their best efforts to keep such Shelf
         Registration Statement continuously effective, supplemented and amended
         as required by the provisions of Sections 6(b) and (c) hereof to the
         extent necessary to ensure that it is available for resales of
         Securities and Exchange Securities by the Holders of Transfer
         Restricted Securities entitled to the benefit of this Section 4(a), and
         to ensure that it conforms with the requirements of this Agreement, the
         Securities Act and the policies, rules and



                                       6

         regulations of the Commission as announced from time to time, for a
         period of at least two years following the Closing Date (or shorter
         period that will terminate when all the Securities and Exchange
         Securities covered by such Shelf Registration Statement have been sold
         pursuant to such Shelf Registration Statement); provided, however, that
         the Companies shall not be obligated to keep the Shelf Registration
         Statement effective if (i) the Company determines, in its reasonable
         judgment, upon advice of counsel, as authorized by a resolution of its
         Board of Directors, that the continued effectiveness and usability of
         the Shelf Registration Statement would (x) require the disclosure of
         material information, which the Company has a bona fide business reason
         for preserving as confidential, or (y) interfere with any financing,
         acquisition, corporate reorganization or other material transaction
         involving the Company or any of its subsidiaries or its parent,
         provided that the failure to keep the Shelf Registration Statement
         effective and usable for offers and sales of Securities for such
         reasons shall last no longer than 45 days in any 12-month period
         (whereafter Liquidated Damages shall accrue and be payable), and (ii)
         the Companies promptly thereafter comply with the requirements of
         Section 6(c)(i) hereof, if applicable. Any such period during which the
         Companies are excused from keeping the Shelf Registration Statement
         effective and usable for offers and sales of Securities is referred to
         herein as a "Suspension Period." A Suspension Period shall commence on
         and include the date that the Company gives notice that the
         Registration Statement is no longer effective or the Prospectus
         included therein is no longer usable for offers and sales of Securities
         and shall end on the earlier to occur of (1) the date on which each
         seller of Securities covered by the Shelf Registration Statement either
         receives the copies of the supplemented or amended prospectus
         contemplated by Section 6(c)(i) hereof or is advised in writing by the
         Company that use of the Prospectus may be resumed and (2) the
         expiration of 45 days in any 12-month period during which one or more
         Suspension Periods has been in effect. The Companies shall be deemed
         not to have used their best efforts to keep the Shelf Registration
         Statement effective during the requisite period if any of the Companies
         voluntarily takes any action (other than actions which trigger a
         Suspension Period) that would result in Holders of Securities covered
         thereby not being able to offer and sell such securities during that
         period, unless such action is required by applicable law.

                           (b) Provision by Holders of Certain Information in
         Connection with the Shelf Registration Statement. No Holder of Transfer
         Restricted Securities may include any of its Transfer Restricted
         Securities in any Shelf Registration Statement pursuant to this
         Agreement unless and until such Holder furnishes to the Company in
         writing, within 20 business days after receipt of a request therefor,
         such information as the Company may reasonably request for use in
         connection with any Shelf Registration Statement or Prospectus or
         preliminary Prospectus included therein. Each Holder as to which any
         Shelf Registration Statement is being effected agrees to furnish
         promptly to the Company all information required to be disclosed in
         order to make the information previously furnished to the Company by
         such Holder not materially misleading.

                           SECTION 5. LIQUIDATED DAMAGES

                  If (i) any of the Registration Statements required by this
Agreement is not filed with the Commission on or prior to the date specified for
such filing in this Agreement, (ii) any



                                       7

of such Registration Statements has not been declared effective by the
Commission on or prior to the applicable Effectiveness Target Date, (iii) the
Exchange Offer has not been Consummated within 30 business days after the
Effectiveness Target Date with respect to the Exchange Offer Registration
Statement or (iv) any Registration Statement required by this Agreement is filed
and declared effective but shall thereafter cease to be effective or fail to be
usable for its intended purpose during the periods specified herein (other than
during a Suspension Period with respect to a Shelf Registration Statement) and
the Companies do not immediately file a post-effective amendment to such
Registration Statement that cures such failure and that is itself immediately
declared effective (each such event referred to in clauses (i) through (iv), a
"Registration Default"), the Companies hereby agree that the interest rate borne
by the Transfer Restricted Securities shall be increased by 0.5% per annum
during the 90-day period immediately following the occurrence of any
Registration Default and shall increase by 0.5% per annum at the end of each
subsequent 90-day period, but in no event shall such increase exceed 1.50% per
annum (any such interest assessed upon the occurrence of a Registration Default
is referred to as "Liquidated Damages"). Following the cure of all Registration
Defaults relating to any particular Transfer Restricted Securities, the interest
rate borne by the relevant Transfer Restricted Securities shall be reduced to
the original interest rate borne by such Transfer Restricted Securities;
provided, however, that, if after any such reduction in interest rate, a
different Registration Default occurs, the interest rate borne by the relevant
Transfer Restricted Securities shall again be increased pursuant to the
foregoing provisions.

                  All obligations of the Companies set forth in the preceding
paragraph that are outstanding with respect to any Transfer Restricted Security
at the time such security ceases to be a Transfer Restricted Security shall
survive until such time as all such obligations with respect to such Security
shall have been satisfied in full.

                           SECTION 6. REGISTRATION PROCEDURES

                           (a) Exchange Offer Registration Statement. In
         connection with the Exchange Offer, the Companies shall comply with all
         of the provisions of Section 6(c) below, shall use their best efforts
         to effect such exchange to permit the sale of Transfer Restricted
         Securities being sold in accordance with the intended method or methods
         of distribution thereof, and shall comply with all of the following
         provisions:

                           (i) If in the reasonable opinion of counsel to the
                  Companies (which may be in-house counsel) there is a question
                  as to whether the Exchange Offer is permitted by applicable
                  law, the Companies hereby agree to seek a no-action letter or
                  other favorable decision from the Commission allowing the
                  Companies to Consummate an Exchange Offer for such Securities.
                  The Companies hereby agree to pursue the issuance of such a
                  decision to the Commission staff level but shall not be
                  required to take commercially unreasonable action to effect a
                  change of Commission policy. The Companies hereby agree,
                  however, to (A) participate in telephonic conferences with the
                  Commission, (B) deliver to the Commission staff an analysis
                  prepared by counsel to the Companies (which may be in-house
                  counsel) setting forth the legal bases, if any, upon which
                  such counsel has concluded that such an Exchange Offer should




                                       8

                  be permitted and (C) diligently pursue a favorable resolution
                  by the Commission staff of such submission.

                           (ii) As a condition to its participation in the
                  Exchange Offer pursuant to the terms of this Agreement, each
                  Holder of Transfer Restricted Securities shall furnish, upon
                  the request of the Companies, prior to the Consummation
                  thereof, a written representation to the Companies (which may
                  be contained in the letter of transmittal contemplated by the
                  Exchange Offer Registration Statement) to the effect that (A)
                  it is not an affiliate of any of the Companies, (B) it is not
                  engaged in, and does not intend to engage in, and has no
                  arrangement or understanding with any person to participate
                  in, a distribution of the Exchange Securities to be issued in
                  the Exchange Offer and (C) it is acquiring the Exchange
                  Securities in its ordinary course of business. In addition,
                  all such Holders of Transfer Restricted Securities shall
                  otherwise cooperate in the Companies' preparations for the
                  Exchange Offer. Each Holder hereby acknowledges and agrees
                  that any Broker-Dealer and any such Holder using the Exchange
                  Offer to participate in a distribution of the securities to be
                  acquired in the Exchange Offer (1) could not under Commission
                  policy as in effect on the date of this Agreement rely on the
                  position of the Commission enunciated in Morgan Stanley and
                  Co., Inc. (available June 5, 1991) and Exxon Capital Holdings
                  Corporation (available May 13, 1988), as interpreted in the
                  Commission's letter to Shearman & Sterling dated July 2, 1993,
                  and similar no-action letters (which may include any no-action
                  letter obtained pursuant to clause (i) above), and (2) must
                  comply with the registration and prospectus delivery
                  requirements of the Securities Act in connection with a
                  secondary resale transaction and that such a secondary resale
                  transaction should be covered by an effective registration
                  statement containing the selling security holder information
                  required by Item 507 or 508, as applicable, of Regulation S-K
                  if the resales are of Exchange Securities obtained by such
                  Holder in exchange for Securities acquired by such Holder
                  directly from the Companies.

                           (b) Shelf Registration Statement. In connection with
         the Shelf Registration Statement, the Companies shall comply with all
         the provisions of Section 6(c) below and shall use their best efforts
         to effect such registration to permit the sale of the Transfer
         Restricted Securities being sold in accordance with the intended method
         or methods of distribution thereof, and pursuant thereto the Companies
         will prepare and file with the Commission prior to the Shelf Filing
         Deadline a Registration Statement relating to the registration on any
         appropriate form under the Securities Act, which form shall be
         available for the sale of the Transfer Restricted Securities in
         accordance with the intended method or methods of distribution thereof.

                           (c) General Provisions. In connection with any
         Registration Statement and any Prospectus required by this Agreement to
         permit the sale or resale of Transfer Restricted Securities (including,
         without limitation, any Registration Statement and the related
         Prospectus required to permit resales of Securities and Exchange
         Securities by Broker-Dealers), the Companies shall:




                                       9

                           (i) use their best efforts to keep such Registration
                  Statement continuously effective and provide all requisite
                  financial statements for the period specified in Section 3 or
                  4 of this Agreement, as applicable; upon the occurrence of any
                  event that would cause any such Registration Statement or the
                  Prospectus contained therein (A) to contain a material
                  misstatement or omission or (B) not to be effective and usable
                  for resale of Transfer Restricted Securities during the period
                  required by this Agreement, the Companies shall file promptly
                  an appropriate amendment to such Registration Statement, in
                  the case of clause (A), correcting any such misstatement or
                  omission, and, in the case of either clause (A) or (B), use
                  its best efforts to cause such amendment to be declared
                  effective and such Registration Statement and the related
                  Prospectus to become usable for their intended purpose(s) as
                  soon as practicable thereafter;

                           (ii) prepare and file with the Commission such
                  amendments and post-effective amendments to the Registration
                  Statement as may be necessary to keep the Registration
                  Statement effective for the applicable period set forth in
                  Section 3 or 4 hereof, as applicable, or such shorter period
                  as will terminate when all Transfer Restricted Securities
                  covered by such Registration Statement have been sold; cause
                  the Prospectus to be supplemented by any required Prospectus
                  supplement, and as so supplemented to be filed pursuant to
                  Rule 424 under the Securities Act, and to comply fully with
                  the applicable provisions of Rules 424 and 430A under the
                  Securities Act in a timely manner; and comply with the
                  provisions of the Securities Act with respect to the
                  disposition of all securities covered by such Registration
                  Statement during the applicable period in accordance with the
                  intended method or methods of distribution by the sellers
                  thereof set forth in such Registration Statement or supplement
                  to the Prospectus;

                           (iii) advise the underwriter(s), if any, and selling
                  Holders promptly and, if requested by such Persons, to confirm
                  such advice in writing, (A) when the Prospectus or any
                  Prospectus supplement or post-effective amendment has been
                  filed, and, with respect to any Registration Statement or any
                  post-effective amendment thereto, when the same has become
                  effective, (B) of any request by the Commission for amendments
                  to the Registration Statement or amendments or supplements to
                  the Prospectus or for additional information relating thereto,
                  (C) of the issuance by the Commission of any stop order
                  suspending the effectiveness of the Registration Statement
                  under the Securities Act or of the suspension by any state
                  securities commission of the qualification of the Transfer
                  Restricted Securities for offering or sale in any
                  jurisdiction, or the initiation of any proceeding for any of
                  the preceding purposes, (D) of the existence of any fact or
                  the happening of any event that makes any statement of a
                  material fact made in the Registration Statement, the
                  Prospectus, any amendment or supplement thereto, or any
                  document incorporated by reference therein untrue, or that
                  requires the making of any additions to or changes in the
                  Registration Statement or the Prospectus in order to make the
                  statements therein not misleading. If at any time the
                  Commission shall issue any stop order suspending the
                  effectiveness of the Registration Statement, or any state
                  securities commission or other regulatory authority shall
                  issue an order suspending the qualification or exemption from



                                       10

                  qualification of the Transfer Restricted Securities under
                  state securities or Blue Sky laws, the Companies shall use
                  their best efforts to obtain the withdrawal or lifting of such
                  order at the earliest possible time;

                           (iv) furnish without charge to each of the
                  Purchasers, each selling Holder named in any Registration
                  Statement, and each of the underwriter(s), if any, before
                  filing with the Commission, copies of any Registration
                  Statement or any Prospectus included therein or any amendments
                  or supplements to any such Registration Statement or
                  Prospectus (including all documents incorporated by reference
                  after the initial filing of such Registration Statement),
                  which documents will be subject to the review of such Holders
                  and underwriter(s) in connection with such sale, if any, for a
                  period of at least five business days, and the Companies will
                  not file any such Registration Statement or Prospectus or any
                  amendment or supplement to any such Registration Statement or
                  Prospectus (including all such documents incorporated by
                  reference) to which a Purchaser of Transfer Restricted
                  Securities covered by such Registration Statement or the
                  underwriter(s), if any, shall reasonably object in writing
                  within five business days after the receipt thereof (such
                  objection to be deemed timely made upon confirmation of
                  telecopy transmission within such period). The objection of a
                  Purchaser or underwriter, if any, shall be deemed to be
                  reasonable if such Registration Statement, amendment,
                  Prospectus or supplement, as applicable, as proposed to be
                  filed, contains a material misstatement or omission;

                           (v) promptly prior to the filing of any document that
                  is to be incorporated by reference into a Registration
                  Statement or Prospectus, provide copies of such document to
                  the Purchasers, each selling Holder named in any Registration
                  Statement, and to the underwriter(s), if any, make the
                  respective representatives of the Companies available for
                  discussion of such document and other customary due diligence
                  matters, and include such information in such document prior
                  to the filing thereof as such selling Holders or
                  underwriter(s), if any, reasonably may request;

                           (vi) make available at reasonable times for
                  inspection by the Purchasers, any managing underwriter
                  participating in any disposition pursuant to such Registration
                  Statement and any attorney or accountant retained by such
                  Purchasers or any of the underwriter(s), all financial and
                  other records, pertinent corporate documents and properties of
                  the Companies and cause the respective officers, directors and
                  employees of the Companies to supply all information
                  reasonably requested by any such Holder, underwriter, attorney
                  or accountant in connection with such Registration Statement
                  subsequent to the filing thereof and prior to its
                  effectiveness;

                           (vii) if requested by any selling Holders or the
                  underwriter(s), if any, promptly incorporate in any
                  Registration Statement or Prospectus, pursuant to a supplement
                  or post-effective amendment if necessary, such information as
                  such selling Holders and underwriter(s), if any, may
                  reasonably request to have included therein, including,
                  without limitation, information relating to the "Plan


                                       11

                  of Distribution" of the Transfer Restricted Securities,
                  information with respect to the principal amount of Transfer
                  Restricted Securities being sold to such underwriter(s), the
                  purchase price being paid therefor and any other terms of the
                  offering of the Transfer Restricted Securities to be sold in
                  such offering; and make all required filings of such
                  Prospectus supplement or post-effective amendment as soon as
                  practicable after the Company is notified of the matters to be
                  incorporated in such Prospectus supplement or post-effective
                  amendment;

                           (viii) use their best efforts to either (A) confirm
                  that the ratings obtained for the Securities prior to the
                  initial sale of the Securities will apply to the Transfer
                  Restricted Securities covered by the Registration Statement or
                  (B) cause the Transfer Restricted Securities covered by the
                  Registration Statement to be rated with the appropriate rating
                  agencies, if so requested by the Holders of a majority in
                  aggregate principal amount of Securities covered thereby or
                  the underwriter(s), if any;

                           (ix) furnish to each selling Holder and each of the
                  underwriter(s), if any, without charge, at least one copy of
                  the Registration Statement, as first filed with the
                  Commission, and of each amendment thereto, including financial
                  statements and schedules, all documents incorporated by
                  reference therein and all exhibits (including exhibits
                  incorporated therein by reference);

                           (x) deliver to each selling Holder and each of the
                  underwriter(s), if any, without charge, as many copies of the
                  Prospectus (including each preliminary prospectus) and any
                  amendment or supplement thereto as such Persons reasonably may
                  request; the Companies hereby consent to the use of the
                  Prospectus and any amendment or supplement thereto by each of
                  the selling Holders and each of the underwriter(s), if any, in
                  connection with the offering and the sale of the Transfer
                  Restricted Securities covered by the Prospectus or any
                  amendment or supplement thereto;

                           (xi) enter into an underwriting agreement, in
                  customary form, if requested in writing by Holders of a
                  majority in aggregate principal amount of Securities eligible
                  for inclusion in the Shelf Registration Statement; and take
                  all such other actions in connection therewith in order to
                  expedite or facilitate the disposition of the Transfer
                  Restricted Securities pursuant to any Registration Statement
                  contemplated by this Agreement; and whether or not an
                  underwriting agreement is entered into and whether or not the
                  registration is an Underwritten Registration, the Companies
                  shall:

                                    (1) furnish to each Purchaser, each selling
                           Holder and each underwriter, if any, in such
                           substance and scope as they may request and as are
                           customarily made by issuers to underwriters in
                           primary underwritten offerings, upon the date of the
                           Consummation of the Exchange Offer and, if
                           applicable, the effectiveness of the Shelf
                           Registration Statement:


                                       12

                                    (A) a certificate, dated the date of
                           Consummation of the Exchange Offer or the date of
                           effectiveness of the Shelf Registration Statement, as
                           the case may be, signed by (y) the President or any
                           Vice President and (z) a principal financial or
                           accounting officer of each of the Companies,
                           confirming, as of the date thereof, the matters set
                           forth in Section 8 (f) of the Purchase Agreement, and
                           such other matters as such parties may reasonably
                           request;

                                    (B) an opinion, dated the date of
                           Consummation of the Exchange Offer or the date of
                           effectiveness of the Shelf Registration Statement, as
                           the case may be, of counsel for the Companies (which
                           may be in-house counsel), covering the matters set
                           forth in Section 8(d), (e) and (f) of the Purchase
                           Agreement and such other matters as such parties may
                           reasonably request, and in any event including a
                           statement to the effect that such counsel has
                           participated in conferences with the respective
                           officers and other representatives of the Companies,
                           representatives of the independent public accountants
                           for the Companies, the Purchasers' representatives
                           and the Purchasers' counsel in connection with the
                           preparation of such Registration Statement and the
                           related Prospectus and have considered the matters
                           required to be stated therein and the statements
                           contained therein, although such counsel has not
                           independently verified the accuracy, completeness or
                           fairness of such statements (except as otherwise
                           stated in such opinion); and that such counsel
                           advises that, on the basis of the foregoing (relying
                           as to materiality upon facts provided to such counsel
                           by the respective officers and other representatives
                           of the Companies and without independent check or
                           verification), no facts came to such counsel's
                           attention that caused such counsel to believe that
                           the applicable Registration Statement, at the time
                           such Registration Statement or any post-effective
                           amendment thereto became effective, and, in the case
                           of the Exchange Offer Registration Statement, as of
                           the date of Consummation, 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 contained in such
                           Registration Statement as of its date and, in the
                           case of the opinion dated the date of Consummation of
                           the Exchange Offer, as of the date of Consummation,
                           contained an untrue statement of a material fact or
                           omitted to state a material fact necessary in order
                           to make the statements therein, in light of the
                           circumstances under which they were made, not
                           misleading. Without limiting the foregoing, such
                           counsel may state further that such counsel assumes
                           no responsibility for, and has not independently
                           verified, the accuracy, completeness or fairness of
                           the financial statements, notes and schedules and
                           other historical or pro forma financial data


                                       13

                           included in any Registration Statement contemplated
                           by this Agreement or the related Prospectus; and

                                    (C) a customary comfort letter, dated as of
                           the date of Consummation of the Exchange Offer or the
                           date of effectiveness of the Shelf Registration
                           Statement, as the case may be, from the Companies'
                           independent accountants, in the customary form and
                           covering matters of the type customarily covered in
                           comfort letters by underwriters in connection with
                           primary underwritten offerings, and affirming the
                           matters set forth in the comfort letters delivered
                           pursuant to Section 8(h) and (j) of the Purchase
                           Agreement, without exception;

                           (2) set forth in full or incorporate by reference in
                  the underwriting agreement, if any, the indemnification
                  provisions and procedures of Section 8 hereof with respect to
                  all parties to be indemnified pursuant to said Section; and

                           (3) deliver such other documents and certificates as
                  may be reasonably requested by such parties to evidence
                  compliance with clause (A) above and with any customary
                  conditions contained in the underwriting agreement or other
                  agreement entered into by the Companies pursuant to this
                  clause (xi), if any.

                  If at any time the representations and warranties of the
         Companies contemplated in this clause (xi) cease to be true and
         correct, the Companies shall so advise the Purchasers and the
         underwriter(s), if any, and each selling Holder promptly and, if
         requested by such Persons, shall confirm such advice in writing;

                  (xii) prior to any public offering of Transfer Restricted
         Securities, cooperate with the selling Holders, the underwriter(s), if
         any, and their respective counsel in connection with the registration
         and qualification (or exemption from such registration and
         qualification or preemption of such registration and qualification by
         federal law) of the Transfer Restricted Securities under the securities
         or Blue Sky laws of such jurisdictions as the selling Holders or
         underwriter(s) reasonably request in writing and do any and all other
         acts or things necessary or advisable to enable the disposition in such
         jurisdictions of the Transfer Restricted Securities covered by the
         Shelf Registration Statement; provided, however, that none of the
         Companies shall be required to register or qualify as a foreign
         corporation where it is not then so qualified or to take any action
         that would subject it to the service of process in suits or to
         taxation, other than as to matters and transactions relating to the
         Registration Statement, in any jurisdiction where it is not then so
         subject;

                  (xiii) shall issue, upon the request of any Holder of
         Securities covered by the Shelf Registration Statement, Exchange
         Securities having an aggregate principal amount equal to the aggregate
         principal amount of Securities



                                       14

         surrendered to the Company by such Holder in exchange therefor or being
         sold by such Holder; such Exchange Securities to be registered in the
         name of such Holder or in the name of the purchaser(s) of such
         Securities, as the case may be; in return, the Securities held by such
         Holder shall be surrendered to the Company for cancellation;

                  (xiv) cooperate with the selling Holders and the
         underwriter(s), if any, to facilitate the timely preparation and
         delivery of certificates representing Transfer Restricted Securities to
         be sold and not bearing any restrictive legends; and enable such
         Transfer Restricted Securities to be in such denominations and
         registered in such names as the Holders or the underwriter(s), if any,
         may request at least two business days prior to any sale of Transfer
         Restricted Securities made by such underwriter(s);

                  (xv) if any fact or event contemplated by Section 6(c)(iii)(D)
         above shall exist or have occurred, prepare a supplement or
         post-effective amendment to the Registration Statement or related
         Prospectus or any document incorporated therein by reference or file
         any other required document so that, as thereafter delivered to the
         purchasers of Transfer Restricted Securities, the Prospectus will not
         contain an untrue statement of a material fact or omit to state any
         material fact necessary to make the statements therein not misleading;

                  (xvi) provide a CUSIP number for all Transfer Restricted
         Securities not later than the effective date of the Registration
         Statement and provide the Trustee under the Indenture with printed
         certificates for the Transfer Restricted Securities which are in a form
         eligible for deposit with the Depositary Trust Company;

                  (xvii) cooperate and assist in any filings required to be made
         with the NASD and in the performance of any due diligence investigation
         by any underwriter (including any "qualified independent underwriter")
         that is required to be retained in accordance with the rules and
         regulations of the NASD, and use its reasonable best efforts to cause
         such Registration Statement to become effective and approved by such
         governmental agencies or authorities as may be necessary to enable the
         Holders selling Transfer Restricted Securities to consummate the
         disposition of such Transfer Restricted Securities;

                  (xviii) otherwise use their best efforts to comply with all
         applicable rules and regulations of the Commission, and make generally
         available to its security holders, as soon as practicable, a
         consolidated earnings statement meeting the requirements of Rule 158
         (which need not be audited) for the twelve-month period (A) commencing
         at the end of any fiscal quarter in which Transfer Restricted
         Securities are sold to underwriters in a firm or best efforts
         Underwritten Offering or (B) if not sold to underwriters in such an
         offering, beginning with the first month of the Company's first fiscal
         quarter commencing after the effective date of the Registration
         Statement;


                                       15

                  (xix) cause the Indenture to be qualified under the Trust
         Indenture Act not later than the effective date of the first
         Registration Statement required by this Agreement, and, in connection
         therewith, cooperate with the Trustee and the Holders of Securities and
         Exchange Securities to effect such changes to the Indenture as may be
         required for such Indenture to be so qualified in accordance with the
         terms of the Trust Indenture Act; and to execute and use its best
         efforts to cause the Trustee to execute all documents that may be
         required to effect such changes and all other forms and documents
         required to be filed with the Commission to enable such Indenture to be
         so qualified in a timely manner;

                  (xx) cause all Transfer Restricted Securities covered by the
         Registration Statement to be listed on each securities exchange on
         which similar securities issued by the Company are then listed, if any,
         if requested by the Holders of a majority in aggregate principal amount
         of Securities or the managing underwriter(s), if any; and

                  (xxi) provide promptly to each Holder upon request each
         document filed with the Commission pursuant to the requirements of
         Section 13 and Section 15 of the Exchange Act.

                  (d) Restrictions on Holders. Each Holder agrees by acquisition
of a Transfer Restricted Security that, upon receipt of any notice from the
Companies of the existence of any fact of the kind described in Section
6(c)(iii)(D) hereof, such Holder will forthwith discontinue disposition of
Transfer Restricted Securities pursuant to the applicable Registration Statement
until such Holder's receipt of the copies of the supplemented or amended
Prospectus contemplated by Section 6(c)(xvi) hereof, or until it is advised in
writing (the "Advice") by the Companies that the use of the Prospectus may be
resumed, and has received copies of any additional or supplemental filings that
are incorporated by reference in the Prospectus. If so directed by the
Companies, each Holder will deliver to the Companies (at the Companies' expense)
all copies, other than permanent file copies then in such Holder's possession,
of the Prospectus covering such Transfer Restricted Securities that was current
at the time of receipt of such notice. In the event the Companies shall give any
such notice, the time period regarding the effectiveness of such Registration
Statement set forth in Section 3 or 4 hereof, as applicable, shall be extended
by the number of days during the period from and including the date of the
giving of such notice pursuant to Section 6(c)(iii)(D) hereof to and including
the date when each selling Holder covered by such Registration Statement shall
have received the copies of the supplemented or amended Prospectus contemplated
by Section 6(c)(xvi) hereof or shall have received the Advice; however, no such
extension shall be taken into account in determining whether Liquidated Damages
are due pursuant to Section 5 hereof or the amount of such Liquidated Damages,
it being agreed that the Companies' option to suspend use of a Registration
Statement pursuant to this paragraph shall be treated as a Registration Default
for purposes of Section 5.


                                       16

                           SECTION 7. REGISTRATION EXPENSES

                  (a) All expenses incident to the Companies' performance of or
         compliance with this Agreement will be borne by the Companies,
         regardless of whether a Registration Statement becomes effective,
         including without limitation: (i) all registration and filing fees and
         expenses (including filings made by any Purchaser or Holder with the
         NASD (and, if applicable, the fees and expenses of any "qualified
         independent underwriter" and its counsel that may be required by the
         rules and regulations of the NASD)); (ii) all fees and expenses of
         compliance with federal securities and state Blue Sky or securities
         laws; (iii) all expenses of printing (including printing certificates
         for the Exchange Securities to be issued in the Exchange Offer and
         printing of Prospectuses), messenger and delivery services and
         telephone; (iv) all fees and disbursements of counsel for the Companies
         and, subject to Section 7(b) below, the Holders of Transfer Restricted
         Securities; and (v) all fees and disbursements of independent certified
         public accountants of the Companies (including the expenses of any
         special audit and comfort letters required by or incident to such
         performance).

                  The Companies will, in any event, bear their internal expenses
         (including, without limitation, all salaries and expenses of their
         respective officers and employees performing legal or accounting
         duties), the expenses of any annual audit and the fees and expenses of
         any Person, including special experts, retained by any of the
         Companies.

                  (b) In connection with any Registration Statement required by
         this Agreement (including, without limitation, the Exchange Offer
         Registration Statement and the Shelf Registration Statement), the
         Companies will jointly and severally reimburse the Purchasers and the
         Holders of Transfer Restricted Securities being tendered in the
         Exchange Offer and/or resold pursuant to the "Plan of Distribution"
         contained in the Exchange Offer Registration Statement or registered
         pursuant to the Shelf Registration Statement, as applicable, for the
         reasonable fees and disbursements of not more than one counsel, who
         shall be Shearman & Sterling or such other counsel as may be chosen by
         the Holders of a majority in principal amount of the Transfer
         Restricted Securities for whose benefit such Registration Statement is
         being prepared.

                           SECTION 8. INDEMNIFICATION

                  (a) The Companies jointly and severally agree to indemnify and
         hold harmless (i) each Holder and (ii) each person, if any, who
         controls (within the meaning of Section 15 of the Securities Act or
         Section 20 of the Exchange Act) any Holder (any of the persons referred
         to in this clause (ii) being hereinafter referred to as a "controlling
         person") and (iii) the respective officers, directors, partners,
         employees, representatives and agents of any Holder or any controlling
         person (any person referred to in clause (i), (ii) or (iii) may
         hereinafter be referred to as an "Indemnified Holder"), to the fullest
         extent lawful, from and against any and all losses, claims, damages,
         liabilities, judgments, actions and expenses (including without
         limitation and as incurred, reimbursement of all reasonable costs of
         investigating, preparing, pursuing, settling, compromising, paying or
         defending any claim or action, or any investigation or proceeding by
         any governmental agency or body, commenced or threatened, including the
         reasonable fees and expenses of


                                       17

         counsel to any Indemnified Holder), joint or several, directly or
         indirectly caused by, related to, based upon, arising out of or in
         connection with any untrue statement or alleged untrue statement of a
         material fact contained in any Registration Statement or Prospectus (or
         any amendment or supplement thereto), or any omission or alleged
         omission to state therein a material fact required to be stated therein
         or necessary to make the statements therein not misleading, except
         insofar as such losses, claims, damages, liabilities or expenses are
         caused by an untrue statement or omission or alleged untrue statement
         or omission that is made in reliance upon and in conformity with
         information relating to any of the Holders furnished in writing to the
         Company by any of the Holders expressly for use therein; provided,
         however, that the Companies will not be liable to any Purchaser, Holder
         (in its capacity as Holder) or underwriter (or any person who controls
         such party within the meaning of Section 15 of the Securities Act or
         Section 20 of the Exchange Act) with respect to any untrue statement or
         alleged untrue statement or omission or alleged omission of a material
         fact made in any preliminary Prospectus to the extent that the
         Companies shall sustain the burden of proving that any such loss,
         liability, claim, damage or expense resulted from the fact that such
         Purchaser, Holder (in its capacity as Holder), or underwriter, as the
         case may be, sold Transfer Restricted Securities to a Person to whom
         such Purchaser, Holder (in its capacity as Holder) or underwriter, as
         the case may be, failed to send or give, at or prior to the written
         confirmation of sale of such Securities a copy of the final Prospectus
         (as amended or supplemented) if the Companies have previously furnished
         copies thereof (sufficiently in advance of the closing of such sale to
         allow for distribution of the final Prospectus in a timely manner) to
         such Purchaser, Holder (in its capacity as Holder) or underwriter, as
         the case may be, and the loss, liability, claim, damage or expense of
         such Purchaser, Holder (in its capacity as Holder) or underwriter, as
         the case may be, resulted solely from an untrue statement or alleged
         untrue statement or omission or alleged omission of a material fact
         contained in or omitted from such preliminary Prospectus which was
         corrected in the final Prospectus. This indemnity agreement shall be in
         addition to any liability which any of the Companies may otherwise
         have.

                  In case any action or proceeding (including any governmental
         or regulatory investigation or proceeding) shall be brought or asserted
         against any of the Indemnified Holders with respect to which indemnity
         may be sought against any of the Companies, such Indemnified Holder (or
         the Indemnified Holder controlled by such controlling person) shall
         promptly notify the Company in writing (provided that the failure to
         give such notice shall not relieve any of the Companies of its
         obligations pursuant to this Agreement). The Companies shall be jointly
         and severally liable for any settlement of any such action or
         proceeding effected with the Company's prior written consent, which
         consent shall not be withheld unreasonably, and the Companies jointly
         and severally agree to indemnify and hold harmless any Indemnified
         Holder from and against any loss, claim, damage, liability or expense
         by reason of any settlement of any action effected with the written
         consent of the Company. The Companies shall not, without the prior
         written consent of each Indemnified Holder, settle or compromise or
         consent to the entry of judgment in or otherwise seek to terminate any
         pending or threatened action, claim, litigation or proceeding in
         respect of which indemnification or contribution may be sought
         hereunder (whether or not any Indemnified Holder is a party thereto),
         unless such settlement, compromise, consent or termination includes an


                                       18

         unconditional release of each Indemnified Holder from all liability
         arising out of such action, claim, litigation or proceeding.

                  (b) Each Holder of Transfer Restricted Securities agrees,
         severally and not jointly, to indemnify and hold harmless each of the
         Companies, and its directors and officers who sign a Registration
         Statement, and any person controlling (within the meaning of Section 15
         of the Securities Act or Section 20 of the Exchange Act) each of the
         Companies and the respective officers, directors, partners, employees,
         representatives and agents of each such person, to the same extent as
         the foregoing indemnity from the Companies to each of the Indemnified
         Holders, but only with respect to claims and actions based on
         information relating to such Holder furnished in writing by such Holder
         expressly for use in any Registration Statement. In case any action or
         proceeding shall be brought against any of the Companies or its
         directors or officers or any such controlling person in respect of
         which indemnity may be sought against a Holder of Transfer Restricted
         Securities, such Holder shall have the rights and duties given each of
         the Companies and each of the Companies or its directors or officers or
         such controlling person shall have the rights and duties given to each
         Holder by the preceding paragraph. In no event shall the liability of
         any selling Holder hereunder be greater in amount than the dollar
         amount of the proceeds received by such Holder upon the sale of the
         Securities and Exchange Securities giving rise to such indemnification
         obligation.

                  (c) In case any 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 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,
         representing the indemnified parties who are parties to such action) or
         (ii) the indemnifying party shall not have employed counsel reasonably
         satisfactory to the indemnified party to represent the indemnified
         party within a reasonable time after notice of commencement of the
         action,



                                       19

         in each of which cases the fees and expenses of counsel shall be at the
         expense of the indemnifying party.

                  (d) If the indemnification provided for in this Section 8 is
         unavailable to an indemnified party under Section 8(a) or Section 8(b)
         hereof (other than by reason of exceptions provided in those Sections)
         in respect of any losses, claims, damages, liabilities, judgments,
         actions or expenses referred to therein, then each applicable
         indemnifying party, in lieu of indemnifying such indemnified party,
         shall contribute to the amount paid or payable by such indemnified
         party as a result of such losses, claims, damages, liabilities or
         expenses in such proportion as is appropriate to reflect the relative
         benefits received by the Companies, on the one hand, and the Holders,
         on the other hand, from (x) the Initial Placement (which in the case of
         the Companies shall be deemed to be equal to the total gross proceeds
         from the Initial Placement as set forth on the cover page of the
         Offering Memorandum (as defined in the Purchase Agreement)), (y) the
         amount of Liquidated Damages which did not become payable as a result
         of the filing of the Registration Statement resulting in such losses,
         claims, damages, liabilities, judgments actions or expenses, and (z)
         such Registration Statement, or if such allocation is not permitted by
         applicable law, the relative fault of the Companies, on the one hand,
         and of the Indemnified Holder, on the other hand, in connection with
         the statements or omissions which resulted in such losses, claims,
         damages, liabilities or expenses, as well as any other relevant
         equitable considerations. The relative fault of the Companies, on the
         one hand, and of the Indemnified Holder, on the other, shall be
         determined by reference to, among other things, whether the untrue or
         alleged untrue statement of a material fact or the omission or alleged
         omission to state a material fact relates to information supplied by
         any of the Companies or by the Indemnified Holder 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 the second paragraph of Section
         8(a), any legal or other fees or expenses reasonably incurred by such
         party in connection with investigating or defending any action or
         claim.

                  The Companies and each Holder of Transfer Restricted
         Securities agree that it would not be just and equitable if
         contribution pursuant to this Section 8(d) were determined by pro rata
         allocation (even if the Holders 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 the immediately
         preceding paragraph. The amount paid or payable by an indemnified party
         as a result of the losses, claims, damages, liabilities or expenses
         referred to in the immediately preceding paragraph shall be deemed to
         include, subject to the limitations set forth above, any legal or other
         expenses reasonably incurred by such indemnified party in connection
         with investigating or defending any such action or claim.
         Notwithstanding the provisions of this Section 8, none of the Holders
         (and its related Indemnified Holders) shall be required to contribute,
         in the aggregate, any amount in excess of the amount by which the net
         proceeds received by such Holder from the sale of the Securities
         exceeds the amount of any damages which such Holder has otherwise been
         required to pay by reason of such untrue or alleged untrue statement or
         omission or alleged omission. No person guilty of fraudulent



                                       20

         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 Holders'
         obligations to contribute pursuant to this Section 8(c) are several in
         proportion to the respective principal amount of Securities held by
         each of the Holders hereunder and not joint.

                           SECTION 9. RULE 144A

                  The Companies hereby agree with each Holder, for so long as
any Transfer Restricted Securities remain outstanding, and during any period the
Companies (i) are not subject to Section 13 or 15(d) of the Exchange Act, to
make available to any Holder or beneficial owner of Transfer Restricted
Securities in connection with any sale thereof and any prospective purchaser of
such Transfer Restricted Securities from such Holder or beneficial owner, the
information required by Rule 144A(d)(4) under the Securities Act in order to
permit resales of such Transfer Restricted Securities pursuant to Rule 144A and
(ii) are subject to Section 13 or Section 15(d) of the Exchange Act, to make all
filings required thereunder in a timely manner in order to permit resales of
such Transfer Restricted Securities pursuant to Rule 144A.

                           SECTION 10. PARTICIPATION IN UNDERWRITTEN
                           REGISTRATIONS

                  No Holder may participate in any Underwritten Registration
hereunder unless such Holder (a) agrees to sell such Holder's Transfer
Restricted Securities on the basis provided in any underwriting arrangements
approved by the Persons entitled hereunder to approve such arrangements and (b)
completes and executes all reasonable questionnaires, powers of attorney,
indemnities, underwriting agreements, lock-up letters and other documents
required under the terms of such underwriting arrangements.

                           SECTION 11. SELECTION OF UNDERWRITERS

                  The Holders of Transfer Restricted Securities covered by the
Shelf Registration Statement who desire to do so may sell such Transfer
Restricted Securities in an Underwritten Offering. In any such Underwritten
Offering, the investment banker or investment bankers and manager or managers
that will administer the offering will be selected by the Holders of a majority
in aggregate principal amount of the Transfer Restricted Securities included in
such offering; provided, that such investment bankers and managers must be
reasonably satisfactory to the Companies.

                           SECTION 12. MISCELLANEOUS

                  (a) Remedies. The Companies hereby agree that monetary damages
         would not be adequate compensation for any loss incurred by reason of a
         breach by it of the provisions of this Agreement and hereby agree to
         waive the defense in any action for specific performance that a remedy
         at law would be adequate.

                  (b) No Inconsistent Agreements. The Companies will not, on or
         after the date of this Agreement, enter into any agreement with respect
         to its securities that is inconsistent with the rights granted to the
         Holders in this Agreement or otherwise conflicts with the provisions
         hereof. The rights granted to the Holders hereunder do not



                                       21

         in any way conflict with and are not inconsistent with the rights
         granted to the holders of any of the Companies' securities under any
         agreement in effect on the date hereof.

                  (c) Adjustments Affecting the Securities. The Companies will
         not take any action, or permit any change to occur, with respect to the
         Securities that would materially and adversely affect the ability of
         the Holders to Consummate any Exchange Offer.

                  (d) Amendments and Waivers. The provisions of this Agreement
         may not be amended, modified or supplemented, and waivers or consents
         to or departures from the provisions hereof may not be given unless the
         Companies have obtained the written consent of Holders of a majority of
         the outstanding principal amount of Transfer Restricted Securities.
         Notwithstanding the foregoing, a waiver or consent to departure from
         the provisions hereof that relates exclusively to the rights of Holders
         whose securities are being tendered pursuant to the Exchange Offer and
         that does not affect directly or indirectly the rights of other Holders
         whose securities are not being tendered pursuant to such Exchange Offer
         may be given by the Holders of a majority of the outstanding principal
         amount of Transfer Restricted Securities being tendered or registered;
         provided that, with respect to any matter that directly or indirectly
         affects the rights of any Purchaser hereunder, the Companies shall
         obtain the written consent of each such Purchaser with respect to which
         such amendment, qualification, supplement, waiver, consent or departure
         is to be effective.

                  (e) Notices. All notices and other communications provided for
         or permitted hereunder shall be made in writing by hand-delivery,
         first-class mail (registered or certified, return receipt requested),
         facsimile or air courier guaranteeing overnight delivery:

                  (i) if to a Holder, at the address set forth on the records of
         the Registrar under the Indenture, with a copy to the Registrar under
         the Indenture; and

                  (ii) if to the Companies:

                           Giant Industries, Inc.
                           23733 North Scottsdale Road
                           Scottsdale, Arizona 85255
                           Facsimile: (602) 585-8985
                           Attention: General Counsel

                           with a copy to:

                           Fennemore Craig, P.C.
                           3003 North Central Avenue
                           Suite 2600
                           Facsimile: (602) 916-5507
                           Attention:  Karen C. McConnell


                                       22

         All such notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; five business
days after being deposited in the mail, postage prepaid, if mailed; when receipt
acknowledged, if faxed; and on the next business day, if timely delivered to an
air courier guaranteeing overnight delivery.

         Copies of all such notices, demands or other communications shall be
concurrently delivered by the Person giving the same to the Trustee at the
address specified in the Indenture.

         (f) Successors and Assigns. This Agreement shall inure to the benefit
of and be binding upon the successors and assigns of each of the parties,
including without limitation and without the need for an express assignment,
subsequent Holders of Transfer Restricted Securities; provided, however, that
this Agreement shall not inure to the benefit of or be binding upon a successor
or assign of a Holder unless and to the extent such successor or assign acquired
Transfer Restricted Securities from such Holder.

         (g) Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.

         (h) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.

         (i) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

         (j) Severability. In the event that any one or more of the provisions
contained herein, or the application thereof in any circumstance, is held
invalid, illegal or unenforceable, the validity, legality and enforceability of
any such provision in every other respect and of the remaining provisions
contained herein shall not be affected or impaired thereby.

         (k) Entire Agreement. This Agreement together with the Purchase
Agreement, the DTC Letter of Representations, the Securities, the Exchange
Securities, and the Indenture (each as defined in the Purchase Agreement) is
intended by the parties as a final expression of their agreement and intended to
be a complete and exclusive statement of the agreement and understanding of the
parties hereto in respect of the subject matter contained herein. There are no
restrictions, promises, warranties or undertakings, other than those set forth
or referred to herein with respect to the registration rights granted by the
Companies with respect to the Transfer Restricted Securities. This Agreement
supersedes all prior agreements and understandings between the parties with
respect to such subject matter.

                [REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]



                                       23

                  IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first written above.

                                GIANT INDUSTRIES, INC.


                                By: /s/ Mark B. Cox
                                    -------------------------------------------
                                    Name:  Mark B. Cox
                                    Title: Chief Financial Officer


                                THE SUBSIDIARY GUARANTORS:

                                GIANT INDUSTRIES ARIZONA, INC.,
                                an Arizona corporation


                                By: /s/ Mark B. Cox
                                    -------------------------------------------
                                    Name:  Mark B. Cox
                                    Title: Chief Financial Officer and Director


                                CINIZA PRODUCTION COMPANY,
                                a New Mexico corporation


                                By: /s/ Mark B. Cox
                                    -------------------------------------------
                                    Name:  Mark B. Cox
                                    Title: Chief Financial Officer and Director


                                GIANT STOP-N-GO OF NEW MEXICO, INC.,
                                a New Mexico corporation


                                By: /s/ Mark B. Cox
                                    -------------------------------------------
                                    Name:  Mark B. Cox
                                    Title: Chief Financial Officer and Director



                                       24

                                 GIANT FOUR CORNERS, INC.,
                                 an Arizona corporation


                                 By: /s/ Mark B. Cox
                                     -------------------------------------------
                                     Name:  Mark B. Cox
                                     Title: Chief Financial Officer and Director

                                 PHOENIX FUEL CO., INC.,
                                 an Arizona corporation


                                 By: /s/ Mark B. Cox
                                     -------------------------------------------
                                 Name:  Mark B. Cox
                                 Title: Chief Financial Officer and Director


                                 SAN JUAN REFINING COMPANY,
                                 a New Mexico corporation


                                 By: /s/ Mark B. Cox
                                     -------------------------------------------
                                     Name:  Mark B. Cox
                                     Title: Chief Financial Officer and Director


                                 GIANT MID-CONTINENT, INC.,
                                 an Arizona corporation


                                 By: /s/ Mark B. Cox
                                     -------------------------------------------
                                     Name:  Mark B. Cox
                                     Title: Chief Financial Officer and Director


                                 GIANT PIPELINE COMPANY,
                                 a New Mexico corporation


                                 By: /s/ Mark B. Cox
                                     -------------------------------------------
                                     Name:  Mark B. Cox
                                     Title: Chief Financial Officer and Director


                                       25

                                 DEGUELLE OIL COMPANY,
                                 a Colorado corporation


                                 By: /s/ Mark B. Cox
                                     -------------------------------------------
                                     Name:  Mark B. Cox
                                     Title: Chief Financial Officer and Director


                                 GIANT YORKTOWN, INC.,
                                 a Delaware corporation


                                 By: /s/ Mark B. Cox
                                     -------------------------------------------
                                     Name:  Mark B. Cox
                                     Title: Chief Financial Officer and Director


                                 GIANT YORKTOWN HOLDING COMPANY,
                                 A Delaware corporation


                                 By: /s/ Mark B. Cox
                                     -------------------------------------------
                                     Name:  Mark B. Cox
                                     Title: Chief Financial Officer and Director



                                       26

The foregoing Registration Rights
Agreement is hereby confirmed and
accepted as of the date first above
written.

BANC OF AMERICA SECURITIES LLC
BNP PARIBAS SECURITIES CORP.
FLEET SECURITIES, INC.

BY:  BANC OF AMERICA SECURITIES LLC

By: /s/ Lily Chang
    -------------------------------
    Name:  Lily Chang
    Title:  Principal



                                       27

                                   SCHEDULE A

SUBSIDIARY GUARANTORS

GIANT INDUSTRIES ARIZONA, INC., an Arizona corporation
CINIZA PRODUCTION COMPANY, a New Mexico corporation
GIANT STOP-N-GO OF NEW MEXICO, INC., a New Mexico corporation
GIANT FOUR CORNERS, INC., an Arizona corporation
PHOENIX FUEL CO., INC., an Arizona corporation
SAN JUAN REFINING COMPANY, a New Mexico corporation
GIANT MID-CONTINENT, INC., an Arizona corporation
GIANT PIPELINE COMPANY, a New Mexico corporation
DEGUELLE OIL COMPANY, a Colorado corporation
GIANT YORKTOWN, INC., a Delaware corporation
GIANT YORKTOWN HOLDING COMPANY, a Delaware corporation

EX-10.37

                                                                   EXHIBIT 10.37


                                U.S.$200,000,000

                             GIANT INDUSTRIES, INC.

                     11% Senior Subordinated Notes due 2012

                               PURCHASE AGREEMENT

                                                                     May 9, 2002


BANC OF AMERICA SECURITIES LLC
BNP PARIBAS SECURITIES CORP.
FLEET SECURITIES, INC.
     As Purchasers
c/o BANC OF AMERICA SECURITIES LLC
9 West 57th Street
New York, New York 10019

Ladies and Gentlemen:

         Giant Industries, Inc., a Delaware corporation (the "Company"),
proposes, subject to the terms and conditions stated herein, to issue and sell
to the several Purchasers named in Schedule A (the "Purchasers"), acting
severally and not jointly, the respective amounts set forth in such Schedule A
of U.S.$200,000,000 aggregate principal amount of the Company's 11% Senior
Subordinated Notes due 2012 (the "Notes"). Banc of America Securities LLC, BNP
Paribas Securities Corp. and Fleet Securities, Inc. have agreed to act as the
several Purchasers in connection with the offering and sale of the Notes.

         The Notes are to be issued pursuant to an Indenture, to be dated as of
May 14, 2002 (the "Indenture"), among the Company, the Subsidiary Guarantors (as
defined below), and The Bank of New York, as indenture trustee (the "Trustee").
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.

         Holders (including subsequent transferees) of the Notes will have the
registration rights set forth in the Registration Rights Agreement to be dated
as of May 14, 2002 (the "Registration Rights Agreement") among the Company, the
Subsidiary Guarantors and the Purchasers. Pursuant to the Registration Rights
Agreement, the Company and the Subsidiary Guarantors will agree to file with the
Securities and Exchange Commission (the "Commission") (i) a registration
statement under the United States Securities Act of 1933, as amended (the

"Securities Act", which term, as used herein, includes the rules and regulations
of the Commission promulgated thereunder), relating to the senior subordinated
notes of the Company (the "Exchange Notes") identical in all material respects
to the Notes (except that the Exchange Notes will not contain terms with respect
to transfer restrictions) to be offered in exchange for the Notes (the "Exchange
Offer") and (ii) under certain circumstances, a shelf registration statement
pursuant to Rule 415 under the Securities Act.

         The payment of principal of, premium and Liquidated Damages (as defined
in the Registration Rights Agreement), if any, and interest on the Notes and the
Exchange Notes will be fully and unconditionally guaranteed on a senior
subordinated basis, jointly and severally, by all the Subsidiary Guarantors as
defined in the Offering Memorandum (as defined below) (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"; and the
Exchange Notes and the Guarantees thereof are herein collectively referred to as
the "Exchange Securities".

         As described in the Offering Memorandum, the proceeds from the offering
of the Securities, together with cash in hand and borrowings under (i) a new
three-year $100 million senior secured revolving credit agreement (the "New
Revolving Credit Facility Agreement") and (ii) a new three-year $40 million
senior secured mortgage loan agreement (the "New Mortgage Loan Agreement"), will
be used to (a) fund the acquisition (the "Yorktown Acquisition") of a refinery
located in Yorktown, Virginia (the "Yorktown Refinery"), and the associated
inventory, pursuant to the Asset Purchase Agreement, dated as of February 8,
2002 (the "Yorktown Asset Purchase Agreement"), between the Company, on the one
hand, and BP Corporation North America Inc. and BP Products North America Inc.
(collectively, "BP"), on the other hand, (b) redeem all $100 million aggregate
principal amount of the Company's 9-3/4% senior subordinated notes due 2003 (the
"9-3/4% Notes") in accordance with the terms and conditions under the Indenture,
dated as of November 29, 1993 (as amended and supplemented, the "1993
Indenture"), among the Company, the guarantors party thereto and The Bank of New
York, as trustee, and (c) pay related transaction fees and expenses. The New
Revolving Credit Facility Agreement, the New Mortgage Loan Agreement, the
Yorktown Acquisition and the redemption of the 9-3/4% Notes are herein
collectively referred to as the "Related Transactions".

         It is understood that (a) the Purchasers will offer and resell some or
all of the Securities in the United States to "qualified institutional buyers"
in reliance on Rule 144A under the Securities Act and (b) the Purchasers or
affiliates thereof may resell a portion of the Securities outside the United
States to certain persons in reliance on Regulation S under the Securities Act.
Such "qualified institutional buyers" and persons who purchase the Securities in
reliance on Regulation S are herein collectively referred to as the "Subsequent
Purchasers".

         This is to confirm the agreement among the Company, the Subsidiary
Guarantors and the Purchasers concerning the issue and purchase of the
Securities.



                                       2

                  1. Representations and Warranties. The Company and each
Subsidiary Guarantor jointly and severally represent, warrant and agree that:

                  (a) The Company has prepared a preliminary confidential
         offering memorandum dated April 26, 2002 and a confidential offering
         memorandum dated the date hereof relating to the Securities. Copies of
         such preliminary confidential offering memorandum and such confidential
         offering memorandum have been delivered by the Company to the
         Purchasers. As used in this Agreement, "Offering Memorandum" means such
         preliminary confidential offering memorandum and such confidential
         offering memorandum, as amended or supplemented, including all
         information incorporated by reference therein. The preliminary
         confidential offering memorandum, as of its date, and the Offering
         Memorandum does not, as of the date hereof, and will not, as of the
         date of any amendment or supplement thereto or as of the Delivery Date,
         contain any untrue statement of a material fact or omit to state any
         material fact necessary in order to make the statements therein, in the
         light of the circumstances under which they were made, not misleading;
         provided that the Sellers make no representation or warranty as to
         information contained in the Offering Memorandum in reliance upon and
         in conformity with written information furnished to the Sellers by or
         on behalf of any Purchaser expressly for inclusion therein and
         identified in Section 6(b) hereof. The Company has not distributed and
         will not distribute, prior to the later of the Delivery Date and the
         completion of the Purchasers' distribution of the Securities, any
         offering material in connection with the offering and sale of the
         Securities other than the Offering Memorandum.

                  (b) 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 Offering Memorandum and to enter into and
         perform its obligations under each of this Agreement, the Registration
         Rights Agreement, the DTC Letter of Representations, the Securities,
         the Exchange Securities, the Indenture, the Yorktown Asset Purchase
         Agreement, the New Revolving Credit Facility Agreement and the New
         Mortgage Loan Agreement and to redeem the 9-3/4% Notes in accordance
         with the terms and conditions of the 1993 Indenture. 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 (which, for
         purposes of this Agreement, includes the Yorktown Refinery), 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.

                  (c) The Subsidiary Guarantors are the only direct or indirect
         subsidiaries, whether wholly or partially owned, of the Company. Each
         of the Subsidiary Guarantors


                                       3

         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 Offering Memorandum and to enter into and perform its
         obligations under each of this Agreement, the Registration Rights
         Agreement, the Securities, the Exchange Securities, the Indenture, the
         New Revolving Credit Facility Agreement and the New Mortgage Loan
         Agreement. 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. 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, pledge,
         lien, charge or other encumbrance (each, a "Lien").

                  (d) The execution, delivery and performance by the Sellers of
         this Agreement, the Registration Rights Agreement, the DTC Letter of
         Representations and the Indenture, and the issuance and delivery of the
         Securities and the Exchange Securities and the consummation of the
         transactions contemplated herein and therein and in the Offering
         Memorandum have been duly authorized by all necessary corporate action
         and will not conflict with or constitute a breach of, or a default (or,
         with the giving of notice or lapse of time, would be a default)
         ("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 1993 Indenture and the Indenture,
         dated as of August 26, 1997, for the Company's $150,000,000 of 9%
         Senior Subordinated Notes due 2007, as amended and supplemented) 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, subject to
         compliance by the Purchasers with Section 11, 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 and such as may be required
         under applicable state securities or blue sky laws and except such as
         may be required by federal and state securities laws (including the
         Trust Indenture Act) with respect to the Sellers' obligations under the
         Registration Rights Agreement, 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 Registration
         Rights Agreement, the DTC Letter of Representations or the Indenture,
         or the issuance and delivery of the Securities or the Exchange
         Securities, or consummation of the transactions contemplated herein and


                                       4

         therein and in the Offering Memorandum. 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.

                  (e) This Agreement has been duly authorized, executed and
         delivered by each Seller. The Indenture has been duly authorized by
         each Seller and, at the Delivery Date, will have been duly executed and
         delivered by each Seller and, assuming due execution and delivery by
         the Trustee, 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. Each of the
         Registration Rights Agreement and the DTC Letter of Representations has
         been duly authorized by each Seller and, at the Delivery 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 and except as rights to indemnification
         under the Registration Rights Agreement may be limited by applicable
         law.

                  (f) 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 Offering Memorandum and, on the
         Delivery 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 Offering
         Memorandum, 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. The Exchange Notes have been duly and
         validly authorized for issuance by the Company, and when issued and
         authenticated in accordance with the terms of the Indenture, the
         Registration Rights Agreement and the Exchange Offer, 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


                                       5

         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.

                  (g) The Guarantees of the Notes and the Exchange 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 Offering Memorandum and, on the Delivery 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.

                  (h) No Seller is in violation of its charter or bylaws and no
         Seller 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, except for such defaults as would not, singly or
         in the aggregate, have a Material Adverse Effect on the Company.

                  (i) 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 Offering Memorandum,
         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. The Company will, upon
         completion of the Yorktown Acquisition, possess such certificates,
         authorizations or permits issued by the appropriate regulatory or other
         governmental agencies or bodies as are necessary to conduct the
         business of the Yorktown Refinery as described in the Offering
         Memorandum, 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 Yorktown Refinery.



                                       6

                  (j) 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, included in the Offering Memorandum, are
         independent public accountants with respect to the Company and its
         subsidiaries within the meaning of the Securities Act and the United
         States Securities Exchange Act of 1934, as amended (the "Exchange Act",
         which term, as used herein, includes the rules and regulations of the
         Commission promulgated thereunder).

                  (k) To the best of the Sellers' knowledge, Ernst & Young, LLP,
         the accountants who have audited and reported upon the financial
         statements of the business of the Yorktown Refinery and the related
         notes thereto included in the Offering Memorandum, are independent
         public accountants with respect to the Yorktown Refinery within the
         meaning of the Securities Act and the Exchange Act.

                  (l) The financial statements of the Company and its
         consolidated subsidiaries and the related notes thereto included in the
         Offering Memorandum 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. The financial statements of the
         business of the Yorktown Refinery and the related notes thereto
         included in the Offering Memorandum present fairly the financial
         position of the business of the Yorktown Refinery as of the dates
         indicated and the results of its 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. The historical financial data set
         forth in the Offering Memorandum under the captions "Offering
         Memorandum Summary - Summary Historical and Unaudited Pro Forma
         Financial and Other Data" and "Selected Historical and Unaudited Pro
         Forma Financial and Other Data" fairly present the information set
         forth therein on a basis consistent with that of the audited financial
         statements contained in the Offering Memorandum. The pro forma
         financial statements of the Company and its subsidiaries and the
         related notes thereto included under the caption "Offering Memorandum
         Summary - Summary Historical and Unaudited Pro Forma Financial and
         Other Data", "Pro Forma Financial Statements" and elsewhere in the
         Offering Memorandum present fairly the information contained therein,
         have been prepared in accordance with the Commission's rules and
         guidelines with respect to pro forma financial statements and have been
         properly presented on the bases described therein, and the assumptions
         used in the preparation thereof are reasonable and the adjustments used
         therein are appropriate to give effect to the transactions and
         circumstances referred to therein.

                  (m) Since the respective dates as of which information is
         given in the Offering Memorandum, 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, and no material adverse change in the
         assets, liabilities, results of operations,


                                       7

         condition (financial or otherwise), earnings, business affairs or
         prospects, whether or not arising from transactions in the ordinary
         course of business, of the Yorktown Refinery (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.

                  (n) No registration of the Securities under the Securities Act
         and no qualification of an indenture under the United States Trust
         Indenture Act of 1939, as amended (the "Trust Indenture Act"), is
         required in connection with the offer, sale and delivery of the
         Securities to each Purchaser and to each Subsequent Purchaser in the
         manner contemplated by the Offering Memorandum and this Agreement
         (other than pursuant to the terms of the Registration Rights
         Agreement).

                  (o) No strike, work stoppage or other similar labor dispute
         with the employees of any Seller or at the Yorktown Refinery, or with
         the employees of any principal supplier of any Seller or the Yorktown
         Refinery, exists or, to the knowledge of any Seller, is threatened,
         which would have a Material Adverse Effect on the Company or the
         Yorktown Refinery, as the case may be.

                  (p) 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 is not
         disclosed in the Offering Memorandum, and 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.

                  (q) Except as otherwise disclosed in the Offering Memorandum
         or as would not, singly or in the aggregate, result in a Material
         Adverse Effect on the Company or the Yorktown Refinery, as the case may
         be, (i) none of the Sellers or the Yorktown Refinery 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 or the Yorktown Refinery under applicable
         Environmental Laws, or noncompliance with the terms and conditions
         thereof, nor has any Seller received any written communication, whether
         from


                                       8

         a governmental authority, citizens group, employee or otherwise, that
         alleges that such Seller or the Yorktown Refinery 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 or
         involving the Yorktown Refinery, 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 or at the Yorktown
         Refinery, 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 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 each 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.

                  (r) In the ordinary course of their business, the Sellers
         conduct a periodic review of the effect of Environmental Laws on their
         business, operations and properties, in the course of which they
         identify and evaluate 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 their 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 Offering Memorandum.

                  (s) 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(l) 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.

                  (t) At December 31, 2001, on a consolidated basis, after
         giving pro forma effect to the issuance and sale of the Securities
         pursuant hereto and the Related Transactions, the Company would have an
         authorized and outstanding capitalization as


                                       9

         set forth in the Offering Memorandum 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.

                  (u) The Notes, the Exchange Notes, the Guarantees of the Notes
         and the Exchange Notes and the Indenture will conform in all material
         respects to the respective statements relating thereto contained in the
         Offering Memorandum.

                  (v) No holder of any security of the Company has the right to
         have any security owned by such holder registered under the Securities
         Act by reason of the issue or sale of the Securities.

                  (w) Neither the Company nor any of its affiliates nor any
         person acting on their behalf has, within the six months prior to the
         date of this Agreement, offered or sold (regardless of whether such
         offers or sales constitute a distribution within the meaning of
         Regulation M under the Exchange Act) any Securities, any securities of
         the same class and/or series as the Securities, or any immediately
         convertible into or exchangeable for the Securities, nor will any such
         offers or sales be made without the prior written consent of the
         Purchasers at any time prior to the date that is 90 days after the
         completion of the offering of the Securities contemplated hereby. The
         Company has not taken and will not take, directly or indirectly, any
         action prohibited by Regulation M. The Company has not entered into any
         contractual arrangement which provides for the distribution of the
         Securities other than this Agreement.

                  (x) Neither the Company nor any of its affiliates nor any
         persons authorized to act on behalf of the Company or any such
         affiliates (other than the Purchasers or any person acting on their
         behalf as to whom the Sellers do not warrant or covenant) have engaged
         or will engage in any directed selling efforts (within the meaning of
         Regulation S) with respect to the Securities and the Company, each such
         affiliate and each person authorized by the Company to act on behalf of
         any of them has complied and will comply with any applicable offering
         restrictions requirement of Regulation S in connection with the
         offering of the Securities outside the United States and, in connection
         therewith, the Offering Memorandum will contain the disclosure required
         by Rule 902.

                  (y) Neither the Company nor any of its affiliates nor any
         person authorized by the Company to act on behalf of the Company or any
         such affiliates (other than the Purchasers or any person acting on
         their behalf as to whom the Sellers do not warrant or covenant) has
         offered or sold, or will offer or sell, the Securities by means of any
         form of general solicitation or general advertising (within the meaning
         of Rule 502(c) of Regulation D under the Securities Act), including,
         but not limited to, (i) any advertisement, article, notice or other
         communication published in any newspaper, magazine or similar medium or
         broadcast over television or radio or (ii) any seminar or meeting whose
         attendees have been invited by any general solicitation or general
         advertising.


                                       10

                  (z) No securities of the same class (within the meaning of
         Rule 144A(d)(3) under the Securities Act) as the Securities are listed
         on any national securities exchange registered under Section 6 of the
         Exchange Act or quoted in a U.S. "automated inter-dealer quotation
         system" (as such term is used in Rule 144A(d)(3)).

                  (aa) The Company is not and will not after receipt of payment
         for 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.

                  (bb) 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, the Securities
         pursuant to the terms thereof.

                  (cc) The Company is a reporting issuer (within the meaning of
         Regulation S under the Securities Act).

                  (dd) 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.

                  (ee) 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(l) above (or elsewhere in the Offering Memorandum) and the Company or
         a subsidiary of the Company will, upon completion of the Yorktown
         Acquisition, obtain good and marketable title to all the properties and
         assets reflected as part of the business of the Yorktown Refinery in
         the financial statements of the business of the Yorktown Refinery
         referred to in Section 1(l) above (or elsewhere in the Offering
         Memorandum), in each case free and clear of any Liens, except for the
         Liens under the New Revolving Credit Facility Agreement and the New
         Mortgage 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 any 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.



                                       11

                  (ff) Except as disclosed in the Offering Memorandum, each of
         the Sellers and the Yorktown Refinery 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 and the Yorktown Refinery against theft, damage, destruction,
         acts of vandalism and earthquakes. Except as disclosed in the Offering
         Memorandum, 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 or the Yorktown Refinery, 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.

                  (gg) Each of the Sellers is, and immediately after the
         Delivery 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.

                  (hh) 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.

                  (ii) 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 (or, to the best of
         the Sellers' knowledge, required to be established or maintained in
         connection with the Yorktown Acquisition) 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) has occurred or is
         reasonably expected to occur with respect to any "employee


                                       12

         benefit plan" established or maintained (or, to the best of the
         Sellers' knowledge, required to be established or maintained in
         connection with the Yorktown Acquisition) by any Seller or any of their
         ERISA Affiliates. No "employee benefit plan" established or maintained
         (or, to the best of the Sellers' knowledge, required to be established
         or maintained in connection with the Yorktown Acquisition) 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 for the amount
         of unfunded benefit liabilities, if any, as would not, singly or in the
         aggregate, 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"
         (including, to the best of the Sellers' knowledge, any such plan
         required to be established or maintained in connection with the
         Yorktown Acquisition) or (ii) Sections 412, 4971, 4975 or 4980B of the
         Code. Each "employee benefit plan" established or maintained (or, to
         the best of the Sellers' knowledge, required to be established or
         maintained in connection with the Yorktown Acquisition) 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.

                  (jj) The Yorktown Asset Purchase Agreement has been duly
         authorized, executed and delivered by the Company and constitutes a
         valid and legally binding obligation of the Company, enforceable 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 now or hereafter
         in effect 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. Each of the New Revolving Credit
         Facility Agreement and the New Mortgage Loan Agreement has been duly
         authorized by each Seller and, when duly executed and delivered by each
         Seller, will constitute valid and legally binding obligation of each
         Seller, enforceable 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 now or hereafter in effect 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.

                  (kk) 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 Indenture).

                  Any certificate signed by an officer of a Seller and delivered
to the Purchasers or to counsel for the Purchasers shall be deemed to be a
representation and warranty by such Seller to each Purchaser as to the matters
set forth therein.



                                       13

                  2. Purchase and Offering of the Securities. On the basis of
the representations and warranties contained in, and upon the terms and subject
to conditions of, this Agreement, the Sellers agree to issue and sell to the
Purchasers and the Purchasers agree, severally and not jointly, to purchase and
pay for the respective principal amounts of Securities set forth opposite the
name of the several Purchasers in Schedule A hereto at a purchase price of
94.1971% of the principal amount of the Securities. The sale of the Securities
to the Purchasers will be made without registration of the Securities under the
Securities Act, in reliance on the exemption therefrom provided by Section 4(2)
of the Securities Act.

                  3. Delivery and Payment. Payment of the purchase price for the
Securities shall be made by the Purchasers to the Sellers or their order in U.S.
dollars in same-day funds by 9:00 A.M., New York City time, on May 14, 2002 or
at such later date and time as may be determined by agreement between the
Sellers and the Purchasers. This date and time are sometimes referred to as the
"Delivery Date". Such payment shall be made against delivery of one or more
certificates in global or definitive form for the Securities in such
denominations and registered in such names as the Purchasers request upon notice
to the Company at least one business day prior to the Delivery Date.

                  4. Covenants. The Company and each Subsidiary Guarantor
jointly and severally agree as follows:

                  (a) The Company shall furnish promptly to each of the
         Purchasers a copy of the Offering Memorandum and each amendment and
         supplement thereto and shall deliver promptly to the Purchasers such
         number of copies of the Offering Memorandum and each amendment and
         supplement thereto as the Purchasers may reasonably request.

                  (b) If at any time prior to the completion, as determined by
         the Purchasers, of the distribution of the Securities, any event occurs
         as a result of which the Offering Memorandum would contain any untrue
         statement of a material fact or omit to state a material fact necessary
         in order to make the statements made therein, in the light of the
         circumstances under which they were made, not misleading, the Company
         will promptly so notify the Purchasers and will prepare and furnish at
         its own expense to the Purchasers, subject to Section 4(c), copies of
         such amendments or supplements to the Offering Memorandum as may be
         necessary so that the statements in the Offering Memorandum as so
         amended or supplemented will not contain any such untrue statement or
         omit to state any such material fact or be misleading and so that the
         Offering Memorandum, as so amended or supplemented, will comply with
         applicable law.

                  (c) Within a reasonable amount of time prior to any proposed
         publication of any amendment or supplement to the Offering Memorandum,
         the Company shall furnish a copy thereof to the Purchasers and shall
         not publish or use any such amendment or supplement to which the
         Purchasers or their counsel shall reasonably object.

                  (d) The Sellers shall comply with the terms of the Indenture
         and the Offering Memorandum and shall promptly notify the Purchasers if
         any of the Sellers discovers that any of its representations contained
         in this Agreement is not, at any time prior to the


                                       14

         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.

                  (e) If, at any time prior to two years after the Delivery Date
         when the Company is neither subject to Section 13 or 15(d) of the
         Exchange Act nor exempt from reporting pursuant to Rule 12g3-2(b) under
         the Exchange Act, the Sellers shall furnish, as soon as available, to
         the Purchasers, and, upon request of a holder of the Securities, to
         such holder and any prospective purchaser designated by such holder,
         copies of the information required to be delivered to holders and
         prospective purchasers of any Securities which constitute "restricted
         securities" under Rule 144 under the Securities Act in order to permit
         compliance with Rule 144A under the Securities Act.

                  (f) 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 at any time prior to the
         Purchasers notifying the Company of the completion of the distribution
         of the Securities.

                  (g) The Sellers will endeavor to qualify the Securities for
         offer and sale under (or obtain exemptions from the application of) the
         securities or Blue Sky laws of such jurisdictions as the Purchasers
         shall reasonably request and to continue such qualification in effect
         so long as reasonably required for resale by the Purchasers of the
         Securities; provided that the Sellers shall not be required to (i)
         qualify generally to do business in any jurisdiction where it is not
         then so qualified or (ii) take any action that would subject it to
         general service of process or to taxation in any jurisdiction where it
         is not then so subject. The Sellers will advise the Purchasers 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.

                  (h) So long as any Securities or Exchange Securities are
         outstanding, the Company will promptly furnish to Banc of America
         Securities LLC copies of all reports or other communications (financial
         or other) furnished by the Company or the Trustee to holders of
         Securities, and copies of filings including financial statements
         furnished to or filed with the Commission or any national securities
         exchange by the Company.

                  (i) The Sellers will take all action that is appropriate or
         necessary to assure that its offerings of other securities will not be
         integrated, for purposes of the registration requirements of the
         Securities Act, with the offerings contemplated hereby.

                  (j) The Sellers shall use their best efforts to assist the
         Purchasers in arranging to cause the Securities to be eligible for
         settlement through the facilities of DTC.



                                       15

                  (k) The Sellers shall, if requested by the Purchasers, 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").

                  (l) The Sellers shall apply the net proceeds from the sale of
         the Securities and the initial borrowings under the New Revolving
         Credit Facility Agreement and the New Mortgage Loan Agreement
         substantially in the manner described under the caption "Use of
         Proceeds" in the Offering Memorandum.

                  (m) Each certificate for a Security will bear the legend
         contained in "Notice to Investors" in the Offering Memorandum for the
         time period and upon the other terms stated in the Offering Memorandum.

                  (n) During the period of 180 days following the date of the
         Offering Memorandum, the Company will not, without the prior written
         consent of Banc of America Securities LLC (which consent may be
         withheld at the sole discretion of Banc of America Securities LLC),
         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 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 debt securities of the Company
         similar to the securities (other than as contemplated by this Agreement
         and to register the Exchange Securities).

                  5. Payment of Expenses. The Sellers jointly and severally
agree to pay all costs, fees and expenses incurred in connection with the
performance of their 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 Purchasers,
(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 Offering Memorandum (including financial statements and
exhibits), and all amendments and supplements thereto, this Agreement, the
Registration Rights Agreement, the Indenture, the DTC Letter of Representations,
and the Notes and the Guarantees, (v) all filing fees, attorneys' fees and
expenses incurred by the Sellers or the Purchasers 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 Blue Sky laws
and, if requested by the Purchasers, preparing and printing a "Blue Sky Survey"
or memorandum, and any supplements thereto, advising the Purchasers of such
qualifications, registrations and exemptions, (vi) the fees and expenses of the
Trustee, including the fees and disbursements of counsel for the Trustee in
connection with the Indenture, the Securities and the Exchange Securities, (vii)
any fees payable in connection with the rating of the Securities or the Exchange
Securities with the ratings agencies, (viii) any filing fees incident to, and
any reasonable fees and disbursements of counsel to the Purchasers in connection
with the review by the National Association of Securities Dealers, Inc., if any,
of the terms of the sale of the


                                       16

Securities or the Exchange Securities, and (ix) all fees and expenses (including
reasonable fees and expenses of counsel) of the Sellers in connection with
approval of the Securities by DTC for "book-entry" transfer, and the performance
by the Sellers of their respective other obligations under this Agreement.

                  If this Agreement is terminated by the Purchasers pursuant to
Section 10(iv) or (v), or if the sale to the Purchasers of the Securities on the
Delivery Date is not consummated because of any refusal, inability or failure on
the part of any Seller to perform any agreement herein or to comply with any
provision hereof, the Sellers jointly and severally agree to reimburse the
Purchasers (or such Purchasers 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 Purchasers 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. If this Agreement is terminated by the
Purchasers pursuant to Section 10(i), (ii), (iii) or (vi), the Sellers jointly
and severally agree to reimburse the Purchasers (or such Purchasers as have
terminated this Agreement with respect to themselves), severally, upon demand
for all fees and disbursements of counsel and other advisors and printing
expenses that shall have been reasonably incurred by the Purchasers in
connection with the proposed purchase and the offering and sale of the
Securities. Except as provided in this Section 5, Section 6 and Section 7
hereof, the Purchasers shall pay their own expenses, including the fees and
disbursements of their counsel.

                  6. Indemnification.

                  (a) The Sellers jointly and severally agree to indemnify and
hold harmless each Purchaser, its directors, officers and employees, and each
person, if any, who controls any Purchaser within the meaning of the Securities
Act and the Exchange Act against any loss, claim, damage, liability or expense,
as incurred, to which such Purchaser 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 any Seller), insofar as such loss, claim, damage, liability or
expense (or actions in respect thereof as contemplated below) arises (i) out of
or is based upon any untrue statement or alleged untrue statement of a material
fact contained in any Offering Memorandum, 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
(ii) in whole or in part upon any inaccuracy in the representations and
warranties of the Sellers contained herein; or (iii) in whole or in part upon
any failure of any Seller to perform its obligations hereunder or under law; or
(iv) any act or failure to act or any alleged act or failure to act by any
Purchaser in connection with, or relating in any manner to, the offering
contemplated hereby, and which is included as part of or referred to in any
loss, claim, damage, liability or action arising out of or based upon any matter
covered by clause (i) above, provided that the Sellers shall not be liable under
this clause (iv) to the extent that a court of competent jurisdiction shall have
determined by a final judgment that such loss, claim, damage, liability or
action resulted directly from any such acts or failures to act undertaken or
omitted to be taken by such Purchaser through its gross negligence or willful
misconduct; and to reimburse each Purchaser and each such controlling person for
any and all


                                       17

expenses (including the fees and disbursements of counsel chosen by Banc of
America Securities LLC) as such expenses are reasonably incurred by such
Purchaser 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 Purchasers expressly for use in any Offering Memorandum. The
indemnity agreement set forth in this Section 6(a) shall be in addition to any
liabilities that each Seller may otherwise have.

                  (b) Each Purchaser agrees, severally and not jointly, to
indemnify and hold harmless each Seller and each of its directors 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, 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 Purchaser), 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 any Offering Memorandum, 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 any
Offering Memorandum, in reliance upon and in conformity with written information
furnished to the Company by such Purchaser expressly for use therein; and to
reimburse such Seller or any such director or controlling person for any legal
and other expenses reasonably incurred by such Seller or any such director 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
Purchasers have furnished to the Company expressly for use in any Offering
Memorandum are the statements set forth as the fourth paragraph on introductory
page iii of the Offering Memorandum concerning stabilization by the Purchasers
and in the fifth paragraph under the caption "Plan of Distribution" in the
Offering Memorandum; and the Purchasers confirm that such statements are
correct. The indemnity agreement set forth in this Section 6(b) shall be in
addition to any liabilities that each Purchaser may otherwise have.

                  (c) Promptly after receipt by an indemnified party under this
Section 6 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 6, 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 under the indemnity agreement contained in this
Section 6 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



                                       18

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 6 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 (Banc of America Securities LLC in the case of Section 6(b) and Section
7), 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) The indemnifying party under this Section 6 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
6(c) hereof, the indemnifying party agrees that it shall be liable for any
settlement of any proceeding effected without its written consent if 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.

                  7. Contribution. (i) If the indemnification provided for in
Section 6 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


                                       19

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 in such proportion as is appropriate
to reflect the relative benefits received by the Sellers, on the one hand, and
the Purchasers, 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 Purchasers, 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 Purchasers, on the other hand, in connection with the offering of the
Securities pursuant to this Agreement shall be deemed to be in the same
respective proportions as the total net proceeds from the offering of the
Securities pursuant to this Agreement (before deducting expenses) received by
the Sellers, and the total discount received by the Purchasers bear to the
aggregate initial offering price of the Securities. The relative fault of the
Sellers, on the one hand, and the Purchasers, 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 Purchasers, 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 6(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 6(c) with respect to notice of commencement of any action shall apply if
a claim for contribution is to be made under this Section 7; provided, however,
that no additional notice shall be required with respect to any action for which
notice has been given under Section 6(c) for purposes of indemnification.

                  The Sellers and the Purchasers agree that it would not be just
and equitable if contribution pursuant to this Section 7 were determined by pro
rata allocation (even if the Purchasers 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 7.

                  Notwithstanding the provisions of this Section 7, no Purchaser
shall be required to contribute any amount in excess of the discount received by
such Purchaser in connection with the Securities distributed by it. No person
guilty of fraudulent misrepresentation (within the meaning of Section 11 of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The Purchasers' obligations to
contribute pursuant to this Section 7 are several, and not joint, in proportion
to their respective commitments as set forth opposite their names in Schedule A.
For purposes of this Section 7, each director, officer and employee of a
Purchaser and each person, if any, who controls a Purchaser within the meaning
of the Securities Act and the Exchange Act shall have the same


                                       20

rights to contribution as such Purchaser, and each director of a Seller, 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.

                  8. Conditions to Obligation of the Purchasers. The obligations
of the several Purchasers to purchase the Securities are subject to the
accuracy, when made and on the Delivery Date, of the representations and
warranties of the Sellers contained herein, to the performance by the Sellers of
their respective obligations hereunder to be performed at or prior to the
Delivery Date and to each of the following additional conditions:

                  (a) The Purchasers shall not have disclosed to the Company on
         or prior to the Delivery Date that the Offering Memorandum contains an
         untrue statement of a fact which, in the reasonable opinion of the
         Purchasers, is material or omits to state a fact which, in the
         reasonable opinion of the Purchasers, 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 Offering
         Memorandum either without prior review by, or over the reasonable
         objection of, the Purchasers; and no change shall have occurred in Rule
         144A or Regulation S under the Securities Act which in the reasonable
         judgment of the Purchasers 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 Offering Memorandum.

                  (b) All corporate proceedings and other legal matters incident
         to the authorization, form and validity of this Agreement, the
         Registration Rights Agreement, the DTC Letter of Representations, the
         Indenture, the Notes, the Exchange Notes, the Guarantees of the Notes
         and the Exchange Notes, the Offering Memorandum and all other legal
         matters relating to this Agreement and the transactions contemplated
         hereby and thereby shall be reasonably satisfactory in all respects to
         the Purchasers and their counsel, and each Seller shall have furnished
         to the Purchasers all documents and information that they may
         reasonably request to enable them to pass upon such matters.

                  (c) Each Seller shall have delivered to the Purchasers 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 creation and issue of the Notes, the Exchange Notes, the
         Guarantees of the Notes and the Exchange 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 Registration Rights Agreement, the DTC Letter of
         Representations, the Indenture, the Notes, the Exchange Notes, the
         Guarantees of the Notes and the Exchange Notes, and all other documents
         relevant to the issue of the Securities by such Seller.

                  (d) The Company shall have furnished to the Purchasers the
         opinion or opinions of Fennemore Craig, P.C., United States counsel to
         the Company, addressed to the Purchasers and dated the Delivery Date to
         the effect that:



                                       21

                           (i) Each of this Agreement, the Indenture and the
                  Registration Rights Agreement has been duly authorized,
                  executed and delivered by each Seller.

                           (ii) The DTC Letter of Representations has been duly
                  authorized, executed and delivered by the Company.

                           (iii) 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.

                           (iv) The Exchange Notes have been duly and validly
                  authorized for issuance by the Company.

                           (v) The Guarantees of the Notes and the Exchange
                  Notes are in the respective 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.

                           (vi) The Securities and the Indenture conform in all
                  material respects to the respective statements relating
                  thereto contained in the Offering Memorandum 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.

                           (vii) Subject to compliance by the Purchasers with
                  Section 11 hereof, no authorization, consent or approval of,
                  or order by any administrative or governmental authority or
                  agency or, to the best of such counsel's knowledge, any court
                  is required by or on behalf of any Seller's execution,
                  delivery and performance of this Agreement, the Registration
                  Rights Agreement, the DTC Letter of Representations or the
                  Indenture, or the issuance and delivery of the Securities or
                  the Exchange Securities, or consummation of the transactions
                  contemplated herein and therein and in the Offering
                  Memorandum, except as may have been obtained by the Sellers
                  and are in full force and effect and such as may be required
                  under applicable securities or Blue Sky laws of any state of
                  the United States and except as may be required by federal and
                  state securities laws (including the Trust Indenture Act) with
                  respect to the Sellers' obligations under the Registration
                  Rights Agreement.

                           (viii) The statements in the Offering Memorandum
                  under the captions "Description of Other Debt", "Description
                  of the Notes", "Certain Federal Income Tax Consequences" and
                  "Notice to Investors", insofar as such statements constitute
                  summaries of legal matters, documents or legal proceeding
                  fairly present and summarize, in all material respects, the
                  matters referred to therein.



                                       22

                           (ix) No registration of the Notes or the Guarantees
                  under the Securities Act and no qualification of an indenture
                  under the Trust Indenture Act is required in connection with
                  the purchase of the Securities by the Purchasers or the
                  initial resale of the Securities by the Purchasers to
                  Subsequent Purchasers in the manner contemplated by this
                  Agreement and the Offering Memorandum.

                           (x) 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 such counsel has
         participated in the preparation of the Offering Memorandum, including
         conferences with officers and other representatives of the Company and
         its subsidiaries, representatives of the independent public accountants
         of the Company and its subsidiaries and representatives of the
         Purchasers, at which conferences the contents of the confidential
         offering memorandum dated the date hereof and related matters were
         discussed and, although they are not passing upon the accuracy or
         completeness of the statements contained in the Offering Memorandum
         (except as specified in Section 8(d)(vi) and (viii) above), on the
         basis of the foregoing, nothing has come to the attention of such
         counsel which gives them reason to believe that such confidential
         offering memorandum, as of its date and at the Delivery Date (except as
         to the financial statements and financial data contained therein, as to
         which such counsel need express no opinion), contained or contains any
         untrue statement of a material fact or omitted or omits to state a
         material fact required to be stated therein or necessary to make the
         statements therein, in the light of 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 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
         Delivery Date and shall be satisfactory in form and substance to the
         Purchasers, shall expressly state that the Purchasers may rely on such
         opinion as if it were addressed to them and shall be furnished to the
         Purchasers) of local counsel reasonably satisfactory to the Purchasers
         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 Purchasers are justified in relying upon such


                                       23

         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.

                  (e) The Company shall have furnished to the Purchasers the
         opinion or opinions of McGuireWoods, LLP, special counsel to the
         Company, addressed to the Purchasers and dated the Delivery Date to the
         effect that:

                           (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 Registration Rights Agreement 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 and except as
                  rights to indemnification may be limited by applicable law.

                           (iii) 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.

                           (iv) 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 Offering Memorandum, 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



                                       24

                  (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.

                           (v) The Exchange Notes, when issued and authenticated
                  in accordance with the terms of the Indenture, the
                  Registration Rights Agreement and the Exchange Offer, will
                  constitute valid and 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 (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.

                           (vi) The Guarantees of the Notes are in the forms
                  contemplated by the Indenture. The Guarantees of the Notes
                  constitute, and the Guarantees of the Exchange Notes will
                  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 laws of the
                  State of New York.

                  (f) The Company shall have furnished to the Purchasers the
         opinion or opinions of Kim H. Bullerdick, Esq., General Counsel of the
         Company, addressed to the Purchasers and dated the Delivery Date to the
         effect that:

                           (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 Offering Memorandum and to enter into and perform its
                  obligations under each of this Agreement, the Registration
                  Rights Agreement, the DTC Letter of Representations, the
                  Securities, the Exchange Securities, the Indenture, the
                  Yorktown Asset Purchase Agreement, the New Revolving Credit
                  Facility Agreement and the New Mortgage Loan Agreement and to
                  redeem the 9-3/4% Notes in accordance with the terms and
                  conditions of the 1993 Indenture; 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.

                                       25

                           (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 Offering
                  Memorandum and to enter into and perform its obligations under
                  each of this Agreement, the Registration Rights Agreement, the
                  DTC Letter of Representations, the Securities, the Exchange
                  Securities, the Indenture, the New Revolving Credit Facility
                  Agreement and the New Mortgage Loan Agreement to which it is a
                  party; 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. 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.

                           (iii) The descriptions in the Offering Memorandum 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 Offering Memorandum that are not described as required, or
                  of any contracts or documents of a character required to be
                  described in the Offering Memorandum that are not described as
                  required.

                           (iv) 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, 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.

                           (v) The issuance and delivery of the Notes, the
                  Exchange Notes and the Guarantees of the Notes and the
                  Exchange Notes, the execution and delivery of this Agreement,
                  the Registration Rights Agreement, the DTC Letter of
                  Representations, the Indenture, the Yorktown Asset Purchase
                  Agreement, the New Revolving Credit Facility Agreement and the
                  New Mortgage Loan Agreement and the consummation of the
                  transactions contemplated herein and therein 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
                  material Contract, which conflict, breach, Default, Debt



                                       26

                  Repayment Triggering Event or Lien would, singly or in the
                  aggregate, have a Material Adverse Effect on the Company.

                           (vi) The issuance and delivery of the Notes, the
                  Exchange Notes and the Guarantees of the Notes and the
                  Exchange Notes, the execution and delivery of this Agreement,
                  the Registration Rights Agreement, the DTC Letter of
                  Representations, the Indenture, the Yorktown Asset Purchase
                  Agreement, the New Revolving Credit Facility Agreement and the
                  New Mortgage Loan Agreement and the consummation of the
                  transactions contemplated herein and therein 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.

                  In addition, such counsel shall state that such counsel has
         reviewed the sections of the Offering Memorandum under the captions
         "Risk Factors", "Management's Discussion and Analysis of Financial
         Condition and Results of Operations - Liquidity and Capital Resources -
         Environmental and Other", "Business - Legal Proceedings" and "Related
         Party Transactions", and, on the basis of such review, to the best of
         such counsel's knowledge, such sections of the Offering Memorandum, as
         of the date of the Offering Memorandum and at the Delivery 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 Delivery Date and shall be satisfactory in
         form and substance to the Purchasers, shall expressly state that the
         Purchasers may rely on such opinion as if it were addressed to them and
         shall be furnished to the Purchasers) of local counsel satisfactory to
         the Purchasers 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 New York, 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 Purchasers
         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.

                  (g) Each Seller shall have furnished to the Purchasers on the
         Delivery Date a certificate, dated the Delivery Date, of the President
         or a Vice President and the principal financial or accounting officer
         of the Company stating that (i) for the period from and after the date
         of this Agreement and prior to the Delivery Date there has not occurred
         any Material Adverse Change; (ii) the representations and warranties of
         the Sellers in Section


                                       27

         1 are true and correct as of the Delivery Date; (iii) the Sellers have
         complied with all the agreements and satisfied all the conditions on
         their part to be performed or satisfied at or prior to the Delivery
         Date; (iv) all the agreements and conditions for the closing of the
         Yorktown Acquisition have been performed or satisfied at or prior to
         the Delivery Date; and (v) 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.

                  (h) The Company shall have furnished to the Purchasers on the
         Delivery Date a certificate, dated the Delivery Date, of the principal
         financial or accounting officer of the Company stating that the Total
         Leverage Ratio and the Senior Leverage Ratio (each as defined in the
         New Revolving Credit Facility Agreement), 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
         New Revolving Credit Facility Agreement.

                  (i) The Company shall have furnished to the Purchasers on the
         date hereof a letter of Deloitte & Touche LLP, independent public
         accountants for the Company, addressed to the Purchasers and dated the
         date hereof, in form and substance reasonably satisfactory to the
         Purchasers, 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 Offering
         Memorandum.

                  (j) The Company shall have furnished to the Purchasers on the
         Delivery Date, a letter of Deloitte & Touche LLP, independent public
         accountants for the Company, addressed to the Purchasers and dated the
         Delivery Date, in form and substance reasonably satisfactory to the
         Purchasers, to the effect that they reaffirm the statements made in the
         letter furnished by them pursuant to Section 8(i), 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 Delivery Date.

                  (k) The Company shall have furnished to the Purchasers on the
         date hereof, a letter of Ernst & Young LLP, independent public
         accountants for the Yorktown Refinery, addressed to the Purchasers and
         dated the date hereof, in form and substance reasonably satisfactory to
         the Purchasers, 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),


                                       28

         with respect to the audited financial statements related to the
         Yorktown refinery and certain financial information contained in the
         Offering Memorandum.

                  (l) The Company shall have furnished to the Purchasers on the
         Delivery Date, a letter of Ernst & Young LLP, independent public
         accountants for the Yorktown Refinery, addressed to the Purchasers and
         dated the Delivery Date, in form and substance reasonably satisfactory
         to the Purchasers, to the effect that they reaffirm the statements made
         in the letter furnished by them pursuant to Section 8(k), 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
         Delivery Date.

                  (m) The Purchasers shall have received the opinion of Shearman
         & Sterling, their counsel, dated as of the Delivery Date, with respect
         to such matters as the Purchasers may reasonably request.

                  (n) The Securities shall have been accepted for (i) settlement
         through the facilities of DTC, and (ii) if applicable, settlement
         through the facilities of Clearstream and Euroclear.

                  (o) The Sellers shall have furnished to the Purchasers such
         further certificates and documents, including certificates of officers
         of the Subsidiary Guarantors, as the Purchasers shall have reasonably
         requested.

                  (p) The Sellers shall have executed and delivered the
         Registration Rights Agreement.

                  (q) Each of the New Revolving Credit Facility Agreement and
         the New Mortgage Loan Agreement shall have been executed and delivered
         by the Company and each lender thereunder, and shall be in full force
         and effect and all conditions to the initial borrowings thereunder
         shall have been satisfied other than the closing of the offering and
         sale of the Securities and the Yorktown Acquisition.

                  (r) Concurrently with the closing of this offering, the
         Company shall have given the requisite notices for the redemption of
         the 9-3/4% Notes in accordance with the terms and conditions of the
         1993 Indenture.

                  (s) Concurrently with the closing of this offering, the
         Related Transactions shall have been consummated on terms and
         conditions reasonably acceptable to the Purchasers.

                  All opinions (other than the opinion set forth in Section 8(m)
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,
counsel to the Purchasers.

                  9. Stabilization. The Purchasers may, at their discretion, to
the extent permitted by applicable law, make purchases and sales of the
Securities for their own accounts in


                                       29

the open market or otherwise for long or short account, on such terms as they
deem advisable in connection with the distribution of the Securities, with a
view to stabilizing or maintaining the market price of the Securities at a level
other than that which might otherwise prevail on the open market. Such
transactions, if commenced, may be discontinued at any time. In such
circumstances, as between the Sellers, on the one hand, and the Purchasers, on
the other hand, the Purchasers shall act as principal, and any loss resulting
from stabilization shall be borne, and any profit arising therefrom and any sum
received by it shall be beneficially retained, by the Purchasers for their own
account.

                  10. Termination. Prior to the Delivery Date, this Agreement
may be terminated by the Purchasers by notice given to the Company if at any
time after the date of this Agreement (i) trading or quotation in any of the
Company's securities shall have been suspended or limited by the Commission or
by the NYSE, or trading in securities generally on either the Nasdaq Stock
Market or the NYSE 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 National Association of Securities Dealers, Inc.; (ii) a
general banking moratorium shall have been declared by any of federal, New York,
Washington or California 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 Purchasers is material and adverse and
makes it impracticable to market the Securities in the manner and on the terms
described in the Offering Memorandum or to enforce contracts for the sale of
securities; (iv) in the judgment of the Purchasers 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 Purchasers 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 10 shall be without liability on the part
of (a) any Seller to any Purchaser, except that the Sellers shall be obligated
to reimburse the expenses of the Purchasers pursuant to Section 5 hereof, (b)
any Purchaser to any Seller, or (c) any party hereto to any other party except
that the provisions of Section 6 and Section 7 shall at all times be effective
and shall survive such termination.

                  11. Representations, Warranties and Agreements of the
Purchasers. Each Purchaser severally represents, warrants and agrees that:

                  (a) The Purchasers understand that the Securities have not
         been and will not be registered under the Securities Act, and the
         Securities have not been and will not be offered or sold by a Purchaser
         or its affiliates or persons acting on its behalf except in accordance
         with Regulation S under the Securities Act or pursuant to an exemption
         from the registration requirements of the Securities Act. The
         Purchasers have offered and sold the Securities and will offer and sell
         the Securities, (i) as part of their distribution at any time and (ii)
         otherwise until 40 days after the later of the commencement of the
         offering of the Securities and the Delivery Date (the "restricted
         period"), only in accordance with


                                       30

         the provisions of Regulation S or Rule 144A under the Securities Act.
         Accordingly, no Purchaser, nor their affiliates nor any persons acting
         on their behalf has engaged or will engage in any directed selling
         efforts with respect to the Securities, and they have complied and will
         comply with any applicable offering restrictions requirement of
         Regulation S with respect to the Securities. Each Purchaser will have
         sent, at or prior to confirmation of sale of Securities pursuant to
         Regulation S, to each distributor, dealer or person receiving a selling
         concession, fee or other remuneration in respect of the Securities from
         it during the restricted period a confirmation or notice to
         substantially the following effect:

                           "The Securities covered hereby have not been
                  registered under the United States Securities Act of 1933, as
                  amended (the "Securities Act"), and may not be offered or sold
                  within the United States or to, or for the account or benefit
                  of, United States persons (i) as part of their distribution at
                  any time or (ii) otherwise until 40 days after the later of
                  the commencement of the offering and the closing date, except
                  in either case in accordance with Regulation S or Rule 144A
                  under the Securities Act. Terms used in this paragraph have
                  the meanings given to them by Regulation S."

         Terms used in this paragraph (a) have the meanings given to them by
         Regulation S.

                  (b) No Purchaser will offer or sell the Securities in the
         United States by means of any form of general solicitation or general
         advertising within the meaning of Section 502(c) under the Securities
         Act; provided, however, that such limitation shall not preclude the
         placing of any customary tombstone advertisement with respect to the
         resale of the Securities following the expiration of the restricted
         period. With respect to resales made in reliance on Rule 144A of any of
         the Securities, each Purchaser will deliver either with the
         confirmation of such resale or otherwise prior to settlement of such
         resale a notice to the effect that the resale of such Securities has
         been made in reliance upon the exemption from the registration
         requirements of the Securities Act provided by Rule 144A.

                  (c) Each Purchaser represents, warrants and agrees that:

                           (i) it has not offered or sold and, prior to the
                  expiry of the period of six months from the issue date of the
                  Securities, will not offer or sell any Securities in the
                  United Kingdom except to persons whose ordinary activities
                  involve them in acquiring, holding, managing or disposing of
                  investments (as principal or agent) for the purposes of their
                  businesses or otherwise in circumstances which have not
                  resulted and will not result in an offer to the public in the
                  United Kingdom within the meaning of the Public Offers of
                  Securities Regulations 1995 (as amended);

                           (ii) it has only communicated or caused to be
                  communicated and will only communicate or cause to be
                  communicated an invitation or inducement to engage in
                  investment activity (within the meaning of Section 21 of the
                  Financial


                                       31

                  Services and Markets Act 2000 (the "FSMA") received by it in
                  connection with the issue or sale of any Securities in
                  circumstances in which Section 21(1) of the FSMA does not
                  apply to the Issuer; and

                           (iii) it has complied and will comply with all
                  applicable provisions of the FSMA with respect to anything
                  done by it in relation to the Securities in, from or otherwise
                  involving the United Kingdom.

                  Following the sale of the Securities by the Purchasers to
Subsequent Purchasers pursuant to the terms hereof, the Purchasers shall not be
liable or responsible to any Seller for any losses, damages or liabilities
suffered or incurred by any Seller, including any losses, damages or liabilities
under the Securities Act, arising from or relating to any resale or transfer of
any Security.

                  The Sellers acknowledge and agree that the Purchasers may,
subject to the provisions of this Section 11, offer Securities to other brokers
and dealers for resale by such brokers and dealers.

                  12. Survival of Representations, Warranties and Agreements.
The representations, warranties and agreements and other statements of any
person set forth in or made pursuant to this Agreement shall survive the
delivery of and payment for the Securities and shall remain in full force and
effect as made on the Delivery Date regardless of any investigation made by or
on behalf of any person referred to in Section 6. The provisions of Section 5,
Section 6 and Section 7 shall survive the termination or cancellation of this
Agreement.

                  13. Notices. Any notice or notification in any form to be
given hereunder shall be in writing and shall be delivered in person or sent by
telephone or facsimile transmission (but in the case of a notification by
telephone, with subsequent confirmation by letter or facsimile transmission).
Any notice or notification to the Company or any Subsidiary Guarantor shall be
addressed to or in care of the Company at:

                  Giant Industries, Inc.
                  23733 North Scottsdale Road
                  Scottsdale, Arizona  85255
                  Attention:  General Counsel
                  Fax:  (602) 585-8985

Any notice or notification to the Purchasers shall be addressed to it or them
at:

                  c/o Banc of America Securities LLC
                  9 West 57th Street
                  New York, New York 10019
                  Attention:  Capital Markets Transaction Management
                  Fax:  (212) 847-6442

Any notice or notification shall take effect at the time of receipt.



                                       32

                  14. Benefit. This Agreement shall be binding upon the
Purchasers, the Sellers and their respective successors. This Agreement and the
terms and provisions hereof are for the sole benefit of only those persons,
except that (a) the representations, warranties, indemnities and agreements of
the Sellers contained in this Agreement shall also be deemed to be for the
benefit of each person referred to in Section 6(a) hereof, and (b) the
representations, warranties, indemnities and agreements of the Purchasers
contained in Section 11 hereof shall be deemed to be for the benefit of each
person referred to in Section 6(b) hereof. Nothing in this Agreement is intended
or shall be construed to give any person, other than the persons referred to in
this Section 14, any legal or equitable right, remedy or claim under or in
respect of this Agreement or any provision contained herein. This Agreement
shall not be assigned by any party hereto without the prior written consent of
the other parties hereto.

                  15. Default of One or More of the Several Purchasers. If any
one or more of the several Purchasers shall fail or refuse to purchase
Securities that it or they have agreed to purchase hereunder on the Delivery
Date, and the aggregate number of Securities which such defaulting Purchaser or
Purchasers 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
Purchasers 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 Purchasers, or in such other proportions as may be specified by
the Purchasers with the consent of the non-defaulting Purchasers, to purchase
the Securities which such defaulting Purchaser or Purchasers agreed but failed
or refused to purchase on such date. If any one or more of the Purchasers 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 the Delivery Date, and arrangements satisfactory
to the Purchasers 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
5, Section 6 and Section 7 shall at all times be effective and shall survive
such termination. In any such case either the Purchasers or the Sellers shall
have the right to postpone the Delivery 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 Offering Memorandum or any other documents or arrangements may be effected.

                  As used in this Agreement, the term "Purchaser" shall be
deemed to include any person substituted for a defaulting Purchaser under this
Section 15. Any action taken under this Section 15 shall not relieve any
defaulting Purchaser from liability in respect of any default of such Purchaser
under this Agreement.

                  16. Governing Law; Consent to Jurisdiction.

                  (a) THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

                  (b) Any legal suit, action or proceeding arising out of or
based upon this Agreement or the transactions contemplated hereby ("Related
Proceedings") may be instituted in the federal courts of the United States of
America located in the City and County of New York or


                                       33

the courts of the State of New York in each case located in the City and County
of New York (collectively, the "Specified Courts"), and each party irrevocably
submits to the non-exclusive jurisdiction (except for proceedings instituted in
regard to the enforcement of a judgment of any such court (a "Related
Judgment"), as to which such jurisdiction is non-exclusive) of such courts in
any such suit, action or proceeding. Service of any process, summons, notice or
document by mail to such party's address set forth above shall be effective
service of process for any suit, action or other proceeding brought in any such
court. The parties irrevocably and unconditionally waive any objection to the
laying of venue of any suit, action or other proceeding in the Specified Courts
and irrevocably and unconditionally waive and agree not to plead or claim in any
such court that any such suit, action or other proceeding brought in any such
court has been brought in an inconvenient forum.

                  17. Miscellaneous. This Agreement may be executed in one or
more counterparts, and if executed in more than one counterpart, the executed
counterparts shall together constitute a single instrument. The descriptive
headings in this Agreement are for convenience of reference only and shall not
define or limit the provisions hereof. Time shall be of the essence of this
Agreement.





                                       34

                  If the foregoing is in accordance with the Purchasers'
understanding of our agreement, kindly sign and return to us one of the
counterparts hereof, whereupon it will become a binding agreement between the
Sellers and the Purchasers in accordance with its terms.

                                 Very truly yours,

                                 THE COMPANY:

                                 GIANT INDUSTRIES, INC.,
                                 a Delaware corporation


                                 By: /s/ Mark B. Cox
                                     -------------------------------------------
                                     Name: Mark B. Cox
                                     Title: Chief Financial Officer


                                 THE SUBSIDIARY GUARANTORS:

                                 GIANT INDUSTRIES ARIZONA, INC.,
                                 an Arizona corporation


                                 By: /s/ Mark B. Cox
                                     -------------------------------------------
                                     Name: Mark B. Cox
                                     Title: Chief Financial Officer and Director


                                 CINIZA PRODUCTION COMPANY,
                                 a New Mexico corporation


                                 By: /s/ Mark B. Cox
                                     -------------------------------------------
                                     Name: Mark B. Cox
                                     Title: Chief Financial Officer and Director


                                 GIANT STOP-N-GO OF NEW MEXICO, INC.,
                                 a New Mexico corporation


                                 By: /s/ Mark B. Cox
                                     -------------------------------------------
                                     Name: Mark B. Cox
                                     Title: Chief Financial Officer and Director


                                       35

                                 GIANT FOUR CORNERS, INC.,
                                 an Arizona corporation


                                 By: /s/ Mark B. Cox
                                     -------------------------------------------
                                     Name: Mark B. Cox
                                     Title: Chief Financial Officer and Director


                                 PHOENIX FUEL CO., INC.,
                                 an Arizona corporation


                                 By: /s/ Mark B. Cox
                                     -------------------------------------------
                                 Name: Mark B. Cox
                                 Title: Chief Financial Officer and Director


                                 SAN JUAN REFINING COMPANY,
                                 a New Mexico corporation


                                 By: /s/ Mark B. Cox
                                     -------------------------------------------
                                     Name: Mark B. Cox
                                     Title: Chief Financial Officer and Director


                                 GIANT MID-CONTINENT, INC.,
                                 an Arizona corporation


                                 By: /s/ Mark B. Cox
                                     -------------------------------------------
                                     Name: Mark B. Cox
                                     Title: Chief Financial Officer and Director


                                 GIANT PIPELINE COMPANY,
                                 a New Mexico corporation


                                 By: /s/ Mark B. Cox
                                     -------------------------------------------
                                     Name: Mark B. Cox
                                     Title: Chief Financial Officer and Director


                                       36

                                 DEGUELLE OIL COMPANY,
                                 a Colorado corporation


                                 By: /s/ Mark B. Cox
                                     -------------------------------------------
                                     Name: Mark B. Cox
                                     Title: Chief Financial Officer and Director


                                 GIANT YORKTOWN, INC.,
                                 a Delaware corporation


                                 By: /s/ Mark B. Cox
                                     -------------------------------------------
                                     Name: Mark B. Cox
                                     Title: Chief Financial Officer and Director


                                 GIANT YORKTOWN HOLDING COMPANY,
                                 a Delaware corporation


                                 By: /s/ Mark B. Cox
                                     -------------------------------------------
                                     Name: Mark B. Cox
                                     Title: Chief Financial Officer and Director



                                       37

THE PURCHASERS:

The foregoing Purchase Agreement is hereby confirmed and accepted as of the date
first above written.

BANC OF AMERICA SECURITIES LLC
BNP PARIBAS SECURITIES CORP.
FLEET SECURITIES, INC.
By: Bank of America Securities LLC

By: /s/ Lily Chang
    -----------------------------------
    Name: Lily Chang
    Title: Principal



                                       38

                                   SCHEDULE A



                                                                                               PRINCIPAL
PURCHASERS                                                                               AMOUNT OF SECURITIES
- ----------                                                                               --------------------
                                                                                      
Banc of America Securities LLC...................................................            $150,000,000
BNP Paribas Securities Corp......................................................            $ 30,000,000
Fleet Securities, Inc. ..........................................................            $  20,000000
                                                                                             ------------
                                                                                             $200,000,000
                                                                                             ============


                                   SCHEDULE B

SUBSIDIARY GUARANTORS

GIANT INDUSTRIES ARIZONA, INC., an Arizona corporation
CINIZA PRODUCTION COMPANY, a New Mexico corporation
GIANT STOP-N-GO OF NEW MEXICO, INC., a New Mexico corporation
GIANT FOUR CORNERS, INC., an Arizona corporation
PHOENIX FUEL CO., INC., an Arizona corporation
SAN JUAN REFINING COMPANY, a New Mexico corporation
GIANT MID-CONTINENT, INC., an Arizona corporation
GIANT PIPELINE COMPANY, a New Mexico corporation
DEGUELLE OIL COMPANY, a Colorado corporation
GIANT YORKTOWN, INC., a Delaware corporation
GIANT YORKTOWN HOLDING COMPANY, a Delaware corporation

EX-10.38

                                                                   EXHIBIT 10.38


Execution Copy


                                 LOAN AGREEMENT




                                  by and among


                       GIANT YORKTOWN, INC., AS BORROWER,

       WELLS FARGO BANK NEVADA, NATIONAL ASSOCIATION, AS COLLATERAL AGENT,

                                       and

              THE PERSONS LISTED ON SCHEDULE IA HERETO, AS LENDERS



                            dated as of May 14, 2002









              BANC OF AMERICA FACILITIES LEASING, LLC, AS ARRANGER

                                TABLE OF CONTENTS



SECTION                                              HEADING                                                   PAGE
                                                                                                         
SECTION 1.             DEFINITIONS......................................................................         1


SECTION 2.             REPRESENTATION AND WARRANTIES....................................................        26

       Section 2.1.    Representation of Borrower.......................................................        26
       Section 2.2.    Representations and Warranties of Lenders........................................        26
       Section 2.3.    Representations and Warranties of Collateral Agent...............................        27

SECTION 3.             COVENANTS........................................................................        28

       Section 3.1.    Possession and Use of Mortgaged Property; Compliance with Laws...................        28
       Section 3.2.    Leases and Assignments...........................................................        28
       Section 3.3.    Maintenance......................................................................        29
       Section 3.4.    Alterations, Modifications, etc..................................................        30
       Section 3.5.    Liens............................................................................        31
       Section 3.6.    Casualty.........................................................................        31
       Section 3.7.    Insurance Coverages..............................................................        34
       Section 3.8.    General Requirements.............................................................        35
       Section 3.9.    Insurance Certificates...........................................................        36
       Section 3.10.   No Duty to Verify or Review......................................................        36

SECTION 4.             COMMITMENTS; INTEREST; PREPAYMENTS; FEES.........................................        37

       Section 4.1.    Loans............................................................................        37
       Section 4.2.    Notes............................................................................        37
       Section 4.3.    Scheduled Payments of Principal; Mandatory Prepayments...........................        37
       Section 4.4.    Interest Rates and Payment Dates.................................................        37
       Section 4.5.    Pro Rata Treatment and Payment...................................................        38
       Section 4.6.    Mutilated, Destroyed, Lost or Stolen Notes.......................................        38
       Section 4.7.    Computations; Interest Rate Determination; Conclusive Determinations.............        39
       Section 4.8.    Highest Lawful Rate..............................................................        39
       Section 4.9.    Fees.............................................................................        40
       Section 4.10.   Adjustment.......................................................................        41
       Section 4.11.   Payments and Distributions.......................................................        41

SECTION 5.             PAYMENTS.........................................................................        41

       Section 5.1.    End of Term......................................................................        41
       Section 5.2.    Prepayment Option................................................................        41

SECTION 6.             INTENTIONALLY OMITTED............................................................        41


1



SECTION                                                                                                        PAGE
                                                                                                         
SECTION 7.             CONDITIONS PRECEDENT TO THE LOAN.................................................        41

       Section 7.1.    Closing Notice...................................................................        42
       Section 7.2.    [Reserved].......................................................................        42
       Section 7.3.    Operative Documents..............................................................        42
       Section 7.4.    Notes............................................................................        42
       Section 7.5.    Representations and Warranties True; Absence of Defaults.........................        42
       Section 7.6.    Consents and Approvals...........................................................        42
       Section 7.7.    Filings and Recordings...........................................................        42
       Section 7.8.    Payment of Impositions...........................................................        43
       Section 7.9.    Transaction Costs; Fees..........................................................        43
       Section 7.10.   Opinions of Counsel..............................................................        43
       Section 7.11.   Corporate Status and Proceedings.................................................        43
       Section 7.12.   Financial Statements.............................................................        44
       Section 7.13.   Material Adverse Effect..........................................................        44
       Section 7.14.   Litigation.......................................................................        44
       Section 7.15.   Bill of Sale.....................................................................        44
       Section 7.16.   [Reserved].......................................................................        44
       Section 7.17.   Deed.............................................................................        44
       Section 7.18.   Search Reports...................................................................        44
       Section 7.19.   Appraisal........................................................................        45
       Section 7.20.   Insurance........................................................................        45
       Section 7.21.   No Casualty......................................................................        45
       Section 7.22.   Environmental Report.............................................................        45
       Section 7.23.   Survey...........................................................................        45
       Section 7.24.   Title and Title Insurance........................................................        45
       Section 7.25.   Mortgaged Property Acquisition/Operation.........................................        45
       Section 7.26.   Giant Industries Credit Agreement................................................        46
       Section 7.27.   Subordinated Debt................................................................        46
       Section 7.28.   Lender Approval..................................................................        46
       Section 7.29.   Deposit of Funds for Payment of NBD Subordinated Notes...........................        47
       Section 7.30.   Proceedings Satisfactory, Etc....................................................        47

SECTION 8.             EVENTS OF DEFAULT AND REMEDIES...................................................        47

       Section 8.1.    Defaults.........................................................................        47
       Section 8.2.    Non-Bankruptcy Defaults..........................................................        51
       Section 8.3.    Bankruptcy Defaults..............................................................        51
       Section 8.4.    Remedies on Default..............................................................        51

SECTION 9.             ASSIGNMENT BY LENDERS; PARTICIPATIONS............................................        52

       Section 9.1.    Assignments......................................................................        52
       Section 9.2.    Participations...................................................................        53
       Section 9.3.    Pledges..........................................................................        53

SECTION 10.            THE COLLATERAL AGENT.............................................................        53



                                      -ii-




SECTION                                                                                                        PAGE
                                                                                                         
       Section 10.1.   Appointment......................................................................        53
       Section 10.2.   Delegation of Duties.............................................................        54
       Section 10.3.   Exculpatory Provisions...........................................................        54
       Section 10.4.   Reliance by Collateral Agent; Indemnity..........................................        54
       Section 10.5.   Notice of Default................................................................        55
       Section 10.6.   Non-Reliance on Collateral Agent and Other Lenders...............................        55
       Section 10.7.   Indemnification..................................................................        56
       Section 10.8.   Collateral Agent in Its Individual Capacity......................................        56
       Section 10.9.   Successor Collateral Agent.......................................................        56
       Section 10.10.  Action upon Instructions.........................................................        57
       Section 10.11.  Substitution of Deed of Trust Trustee............................................        57

SECTION 11.            INDEMNITY........................................................................        57

       Section 11.1.   General Indemnification..........................................................        57
       Section 11.2.   General Tax Indemnity............................................................        59
       Section 11.3.   Gross Up.........................................................................        62
       Section 11.4.   Increased Capital Costs..........................................................        62
       Section 11.5.   Environmental Indemnity..........................................................        62
       Section 11.6.   LIBO Rate Illegal, Unavailable or Impracticable..................................        63
       Section 11.7.   Funding Losses...................................................................        64
       Section 11.8.   Actions of Lenders...............................................................        64

SECTION 12.            GENERAL CONDITIONS...............................................................        64

       Section 12.1.   Payment of Transaction Costs and Other Costs.....................................        64
       Section 12.2.   Effect of Waiver.................................................................        65
       Section 12.3.   Survival of Covenant.............................................................        65
       Section 12.4.   Applicable Law...................................................................        65
       Section 12.5.   Effect and Modification..........................................................        65
       Section 12.6.   Notices..........................................................................        66
       Section 12.7.   Consideration for Consents to Waivers and Amendments.............................        67
       Section 12.8.   Severability.....................................................................        67
       Section 12.9.   Successors and Assigns...........................................................        68
       Section 12.10.  No Third-Party Beneficiaries.....................................................        68
       Section 12.11.  Brokers..........................................................................        68
       Section 12.12.  Captions; Table of Contents......................................................        68
       Section 12.13.  Schedules and Exhibits...........................................................        68
       Section 12.14.  Submission to Jurisdiction.......................................................        68
       Section 12.15.  Jury Trial.......................................................................        69
       Section 12.16.  Role of Banc of America Facilities Leasing, LLC..................................        69
       Section 12.17.  Syndication......................................................................        69

Signature Page..........................................................................................        70




                                      -iii-


                                    SCHEDULES

SCHEDULE IA      --    Lenders' Commitments
SCHEDULE IB      --    Addresses for Notice and Payment
SCHEDULE IIA     --    Description of Mortgaged Property
SCHEDULE IIB     --    Principal Payment Schedule
SCHEDULE III     --    Constituent Company Guarantors
SCHEDULE IV      --    Scheduled Adjustments to Consolidated EBITDA


                              EXHIBITS

EXHIBIT A        --    Form of Promissory Note
EXHIBIT B        --    [Reserved]
EXHIBIT C-1      --    Form of Opinion of Special Counsel to Borrower and each
                       Guarantor
EXHIBIT C-2      --    Form of Opinion of General Counsel to Borrower and each
                       Guarantor
EXHIBIT C-3      --    Form of Opinion of New York and Virginia Counsel to
                       Borrower and each Guarantor
EXHIBIT C-4      --    [Reserved]
EXHIBIT D        --    Form of Closing Notice
EXHIBIT E-1      --    Form of Officer's Certificate of Borrower
EXHIBIT E-2      --    Form of Secretary's Certificate of Borrower
EXHIBIT E-3      --    Form of Officer's Certificate of each Guarantor
EXHIBIT E-4      --    Form of Secretary's Certificate of each Guarantor
EXHIBIT E-5      --    [Reserved]
EXHIBIT E-6      --    Form of Compliance Certificate
EXHIBIT F        --    Form of Assignment and Assumption Agreement
EXHIBIT G        --    [Reserved]
EXHIBIT H        --    Form of Supplemental Guaranty
EXHIBIT I        --    Form of Constituent Companies Guaranty
EXHIBIT J        --    [Reserved]
EXHIBIT K        --    Form of Parent Guaranty



                                      -iv-

                              GIANT YORKTOWN, INC.

                                 LOAN AGREEMENT

         This Loan Agreement dated as of May 14, 2002 (as amended, supplemented
or otherwise modified from time to time, this "Loan Agreement"), is among GIANT
YORKTOWN, INC., a Delaware corporation (the "Borrower"), WELLS FARGO BANK
NEVADA, NATIONAL ASSOCIATION, a national banking association, not in its
individual capacity (except as specifically set forth herein), but solely in its
capacity as collateral agent (the "Collateral Agent"), and each of the Persons
listed on SCHEDULE IA hereto as a Lender (each individually, together with any
permitted successors and assigns, a "Lender" and collectively, the "Lenders").

                                   WITNESSETH:

         WHEREAS, the Lenders shall, on the terms and subject to the conditions
hereinafter set forth, make loans to the Borrower on the Closing Date; and

         WHEREAS, the Borrower will use the proceeds of such Loans to purchase
the Mortgaged Property and pay Transaction Costs hereunder;

         NOW, THEREFORE, in consideration of the foregoing and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:

SECTION 1.        DEFINITIONS.

         Unless the context otherwise requires, the following terms shall for
all purposes of this Loan Agreement have the meanings herein specified and the
following definitions shall be equally applicable to both the singular and
plural forms of any of the terms herein defined.

         "Acquisition" shall mean any transaction or series of related
transactions for the purpose of or resulting, directly or indirectly, in (a) the
acquisition of all or substantially all of the assets of a Person, or of any
business or division of a Person, (b) the acquisition of in excess of 50% of the
capital stock of a corporation (or similar entity), which stock has ordinary
voting power for the election of the members of the acquiree's board of
directors or persons exercising similar functions (other than stock having such
power only by reason of the happening of a contingency), or the acquisition of
in excess of 50% of the partnership interests or equity of any Person not a
corporation which acquisition gives the acquirer the power to direct or cause
the direction of the management and policies of the acquiree, or (c) a merger or
consolidation or any other combination with another Person (other than a Person
that is a Subsidiary), provided that Giant Industries or a Subsidiary of Giant
Industries is the surviving entity.

         "Adjusted LIBO Rate" shall mean the LIBO Rate plus the Applicable
Lender Margin.

Giant Yorktown, Inc.                                             Loan Agreement

         "Administrative Charge" shall mean an amount equal to the amount, if
any, required to compensate each Lender for any losses (including, without
limitation, any loss, cost or expense incurred by reason of the liquidation or
reemployment of deposits or funds acquired by such Lender to fund its
obligations under the Operative Documents) it may incur as a result of (i)
Borrower's payment of principal or interest on the Notes on any date other than
on a Payment Date, (ii) Borrower's payment of the Loan Balance on any date other
than a Payment Date, or (iii) any condition described in SECTION 11 hereof.

         "Affiliate" shall mean, with respect to a specified Person, another
Person that directly, or indirectly through one or more intermediaries, Controls
or is Controlled by or is under common Control with the Person specified.
"Control" shall mean the possession, directly or indirectly, of the power to
direct or cause the direction of the management or policies of a Person, whether
through the ability to exercise voting power, by contract or otherwise.
"Controlling" and "Controlled" have meanings correlative thereto.

         "Agent" shall mean, individually, any of the Collateral Agent or the
Deed of Trust Trustee and "Agents" shall mean collectively, both of them.

         "Aggregate Commitment Amount" shall mean $40,000,000.

         "Applicable Administrative Charge" shall mean, as of any date of
determination in respect of any event, any Administrative Charge determined to
be due and owing in respect of such event.

         "Applicable Lender Margin" shall mean, at any time of determination of
the LIBO Rate, 4.25% per annum.

         "Appraisal" shall mean any appraisal of the Mortgaged Property from an
Appraiser received pursuant to the terms of this Loan Agreement.

         "Appraised Value" shall mean, with respect to the Mortgaged Property as
of any date of determination, the Fair Market Value of the Mortgaged Property as
set forth in the Appraisal therefor.

         "Appraiser" shall mean Purvin & Gertz, Inc., or such other Person as
may be selected by the Collateral Agent.

         "Arrangement Fee" shall mean the percentage referred to in the
Arrangement Fee Letter multiplied by the Underwriting Amount.

         "Arrangement Fee Letter" shall mean that certain letter agreement
between Arranger and Giant Industries dated February 5, 2002.

         "Arranger" shall mean Banc of America Facilities Leasing, LLC, a
Delaware limited liability company, and its successors.


                                      -2-


Giant Yorktown, Inc.                                              Loan Agreement


         "Assignment and Assumption" shall mean an Assignment and Assumption
Agreement substantially in the form of EXHIBIT F attached hereto or otherwise
acceptable to the Collateral Agent entered into pursuant to SECTION 9.1.

         "Bank of America" shall mean Bank of America, National Association, a
national banking association, and its successors.

         "Bankruptcy Code" shall mean the Federal Bankruptcy Reform Act of 1978
(11 U.S.C.Section 101, et seq.).

         "Bankruptcy Event" shall mean, with respect to any Person, the
occurrence of any of the following with respect to such Person: (a) a court or
governmental agency having jurisdiction in the premises shall enter a decree or
order for relief in respect of such Person in an involuntary case under any
applicable bankruptcy, insolvency or other similar law now or hereafter in
effect, or appointing a receiver, liquidator, assignee, custodian, trustee,
sequestrator (or similar official) of such Person or for any substantial part of
its property or ordering the winding up or liquidation of its affairs; or (b)
there shall be commenced against such Person an involuntary case under any
applicable bankruptcy, insolvency or other similar law now or hereafter in
effect, or any case, proceeding or other action for the appointment of a
receiver, liquidator, assignee, custodian, trustee, sequestrator (or similar
official) of such Person or for any substantial part of its property or for the
winding up or liquidation of its affairs, and such involuntary case or other
case, proceeding or other action shall remain undismissed, undischarged or
unbonded for a period of sixty (60) consecutive days; or (c) such Person shall
commence a voluntary case under any applicable bankruptcy, insolvency or other
similar law now or hereafter in effect, or consent to the entry of an order for
relief in an involuntary case under any such law, or consent to the appointment
or taking possession by a receiver, liquidator, assignee, custodian, trustee,
sequestrator (or similar official) of such Person or for any substantial part of
its property or make any general assignment for the benefit of creditors; or (d)
such Person shall admit in writing its inability to pay its debts generally as
they become due.

         "Base Rate" shall mean, on any day with respect to the Loan Balance,
the rate per annum equal to the higher of (a) the Federal Funds Rate for such
day plus one-half of one percent (0.5%) and (b) the Prime Rate for such day plus
2.00%. Any change in the Base Rate due to a change in the Federal Funds Rate or
the Prime Rate shall be effective on the effective date of such change in the
Federal Funds Rate or the Prime Rate, without notice to the Borrower or any
Guarantor.

         "Benefited Lender" shall have the meaning assigned to such term in
SECTION 4.10.

         "Bill of Sale" shall have the meaning assigned to such term in SECTION
7.15.

         "BNY $150,000,000 Indenture" shall mean that certain Indenture dated
August 26, 1997, between Giant Industries, as issuer, The Bank of New York, as
trustee, and others evidenced by the BNY $150,000,000 Subordinated Notes.



                                      -3-

Giant Yorktown, Inc.                                              Loan Agreement


         "BNY $200,000,000 Indenture" shall mean that certain Indenture dated
[May 13], 2002, between Giant Industries, as issuer, the Bank of New York, as
trustee, and others evidenced by the BNY $200,000,000 Subordinated Notes.

         "BNY $150,000,000 Subordinated Notes" shall mean the $150,000,000 9%
Senior Subordinated Notes due 2007 issued by Giant Industries under the BNY
$150,000,000 Indenture.

         "BNY $200,000,000 Subordinated Notes" shall mean the $200,000,000 11%
Senior Subordinated Notes due 2012 issued by Giant Industries under the BNY
$200,000,000 Indenture.

         "BNY $200,000,000 Subordinated Notes Offering" shall mean the issuance
and sale of the BNY $200,000,000 Subordinated Notes pursuant to the BNY
$200,000,000 Indenture.

         "Board of Directors" shall mean, with respect to a corporation, either
the board of directors or any duly authorized committee of that board of
directors which, pursuant to the by-laws of such corporation, has the same
authority as that board of directors as to the matter at issue.

         "Borrower" shall mean Giant Yorktown, Inc., a Delaware corporation and
a Wholly-Owned Subsidiary of Giant Arizona, or any successor thereto.

         "Borrower Part" shall have the meaning assigned to such term in SECTION
3.4.

         "Business Day" shall mean a day (other than a Saturday, Sunday or other
day on which commercial banks in Scottsdale, Arizona, New York, New York, or
Yorktown, Virginia are authorized or required by law to close), except that,
with respect to any determination of LIBO Rate such day shall also be a day on
which dealings between banks are carried on in U.S. dollar deposits in London,
England.

         "Capital Lease" shall mean a capital lease as determined in accordance
with GAAP.

         "Capital Stock" shall mean (a) in the case of a corporation, capital
stock, (b) in the case of an association or business entity, any and all shares,
interests, participations, rights or other equivalents (however designated) of
capital stock, (c) in the case of a partnership, partnership interests (whether
general or limited), (d) in the case of a limited liability company, membership
interests, (e) any other interest or participation that confers on a Person the
right to receive a share of the profits and losses of, or distributions of
assets of, the issuing Person and (f) all rights to purchase, warrants, options
and other securities exercisable for, exchangeable for or convertible into any
of the foregoing.

         "Cash Equivalents" shall mean: (a) securities issued or fully
guaranteed or insured by the United States Government or any agency thereof and
backed by the full faith and credit of the United States having maturities of
not more than twelve (12) months from the date of acquisition; (b) certificates
of deposit, time deposits, Eurodollar time deposits, or bankers' acceptances
having in each case a tenor of not more than twelve (12) months from the date of
acquisition issued by any U.S. commercial bank or any branch or agency of a
non-U.S.


                                      -4-

Giant Yorktown, Inc.                                              Loan Agreement


commercial bank licensed to conduct business in the U.S. having combined capital
and surplus of not less than Five Hundred Million Dollars ($500,000,000) whose
long term securities are rated at least A (or then equivalent grade) by S&P and
A2 (or then equivalent grade) by Moody's at the time of acquisition; (c)
commercial paper of an issuer rated at least A-1 by S&P or P-1 by Moody's at the
time of acquisition, and in either case having a tenor of not more than twelve
(12) months; (d) repurchase agreements with a term of not more than seven days
for underlying securities of the types described in clauses (a) and (b) above;
and (e) money market mutual or similar funds having assets in excess of
$100,000,000, at least 95% of the assets of which are comprised of assets
specified in clauses (a) through (c) above.

         "Casualty" shall mean either a Total Casualty or a Partial Casualty.

         "Casualty Notice" shall have the meaning assigned to such term in
SECTION 3.6.

         "Casualty Proceeds" shall have the meaning assigned to such term in
SECTION 3.6(F).

         "Casualty Recoveries" shall have the meaning assigned to such term in
SECTION 3.6(E).

         "Change of Control" shall mean (a) a purchase or acquisition, directly
or indirectly, by any "person" or "group" within the meaning of Section 13(d)(3)
and 9(d)(2) of the Exchange Act (a "Group"), of "beneficial ownership" (as such
term is defined in Rule 13d-3 under the Exchange Act) of securities of Giant
Industries which, together with any securities owned beneficially by any
"affiliates" or "associates" of such Group (as such terms are defined in Rule
12b-2 under the Exchange Act), represent more than fifty percent (50%) of the
combined voting power of Giant Industries' securities which are entitled to vote
generally in the election of directors and which are outstanding on the date
immediately prior to the date of such purchase or acquisition; (b) a sale of all
or substantially all of the assets of Giant Industries and its Subsidiaries
taken as a whole to any Person or Group; (c) the liquidation or dissolution of
Giant Industries; (d) the first day on which Borrower is no longer, either
directly or indirectly, a Wholly-Owned Subsidiary of Giant Industries; or (e)
the first day on which a majority of the Board of Directors of Giant Industries
are not Continuing Directors (as herein defined). As herein defined, "Continuing
Director" shall mean any member of the Board of Directors of Giant Industries
who (x) is a member of such Board of Directors as of the date of this Loan
Agreement or (y) was nominated for election or elected to such Board of
Directors with the affirmative vote of two-thirds of the Continuing Directors
who were members of such Board of Directors at the time of such nomination or
election.

         "Claims" shall mean liabilities, obligations, damages, losses, demands,
penalties, fines, claims, actions, suits, judgments, settlements, utility
charges, costs, fees, expenses and disbursements (including, without limitation,
legal fees and expenses and costs of investigation which, in the case of counsel
or investigators retained by an Indemnitee, shall be reasonable) of any kind and
nature whatsoever.

         "Closing Date" shall mean May 14, 2002.

         "Closing Notice" shall have the meaning assigned to such term in
SECTION 7.1.



                                      -5-

Giant Yorktown, Inc.                                              Loan Agreement


         "Code" shall mean the Internal Revenue Code of 1986, as amended, and
any successor statute thereto, as interpreted by the rules and regulations
issued thereunder, in each case as in effect from time to time. References to
sections of the Code shall be construed also to refer to any successor sections.

         "Collateral Agent" shall mean Wells Fargo Bank Nevada, National
Association, not in its individual capacity, but solely as Collateral Agent, and
any successor or replacement Collateral Agent expressly permitted hereunder.

         "Collateral Agent Fee Letter" shall mean the fee letter dated as of the
date hereof between Borrower and Trust Company.

         "Commitment" shall mean, with respect to each Lender, the amount set
forth opposite such Lender's name on SCHEDULE IA under the column designated as
"Commitment."

         "Commitment Fees" shall have the meaning assigned to such term in
SECTION 4.9.

         "Commitment Percentage" shall mean, as to any Lender, the percentage
set forth opposite such Lender's name under the heading "Commitment Percentage"
on SCHEDULE IA.

         "Commodity Swap" shall mean any commodity swap, commodity option or
commodity forward contract (including any option to enter into any of the
foregoing).

         "Compliance Certificate" shall mean a certificate substantially in the
form of EXHIBIT E-6 hereto.

         "Consolidated EBITDA" shall mean, for the relevant period, (a) the sum
of (i) the Consolidated Net Income for such period, (ii) Consolidated Interest
Expense, (iii) all taxes measured by income to the extent included in the
determination of such Consolidated Net Income, (iv) all amounts treated as
expenses for depreciation and the amortization of intangibles of any kind for
such period to the extent deducted in the determination of such Consolidated Net
Income for the relevant period, and (v) non-cash losses associated with asset
dispositions to the extent deducted in the determination of Consolidated Net
Income for the relevant period, minus (b) non-cash gains associated with asset
dispositions to the extent included in the determination of Consolidated Net
Income for the relevant period. Consolidated EBITDA for the fiscal quarters
ended on March 31, 2002, June 30, 2002, September 30, 2002, December 31, 2002
and March 31, 2003 shall be adjusted on a pro forma basis to take into account
the Yorktown Acquisition, as set forth on SCHEDULE IV hereto.

         "Consolidated Funded Indebtedness" shall mean, for Giant Industries and
its Consolidated Subsidiaries, at any time, without duplication, the sum of: (a)
all Indebtedness (other than Indebtedness of the type described in clause
(h)(ii) of the definition of Indebtedness), (b) obligations to redeem or
purchase any stock or other equity security of Giant Industries or a Subsidiary,
and (c) any guaranty obligations in respect of any of the foregoing.



                                      -6-

Giant Yorktown, Inc.                                              Loan Agreement


         "Consolidated Interest Expense" shall mean for the relevant period, for
Giant Industries and its Consolidated Subsidiaries, without duplication, (a) the
sum of (i) all interest in respect of Indebtedness and all imputed interest with
respect to Capital Leases accrued or capitalized during such period (whether or
not actually paid during such period and including fees payable in respect of
letters of credit and bankers' acceptances), (ii) the net amount payable (or
minus the net amount receivable) under all Swap Contracts (other than Commodity
Swaps) during such period (whether or not actually paid or received during such
period), and (iii) all dividends paid, declared or otherwise accrued in respect
of preferred stock, minus (b) all fees and financing cost amortized during such
period related to the incurrence of Indebtedness, to the extent included in the
calculation of interest expense.

         "Consolidated Net Income" shall mean, for any period, the net income
(or net loss) of Giant Industries and its Consolidated Subsidiaries for such
period determined in accordance with GAAP.

         "Consolidated Net Worth" shall mean, at any date, an amount equal to
the consolidated stockholders' equity of Giant Industries and its Consolidated
Subsidiaries determined in accordance with GAAP determined as of such date.

         "Consolidated Rents" shall mean, with respect to any period, the sum of
the rental and other obligations required to be paid during such period by Giant
Industries and its Consolidated Subsidiaries as lessee under all leases of real
or personal property (other than Capital Leases).

         "Consolidated Senior Indebtedness" shall mean Consolidated Funded
Indebtedness, other than Indebtedness evidenced by the Subordinated Notes.

         "Consolidated Subsidiaries" shall mean, at any date, any Subsidiary the
accounts of which, in accordance with GAAP, would be consolidated with those of
Giant Industries in its consolidated financial statements if such statements
were prepared as of such date.

         "Consolidated Tangible Net Worth" shall mean Consolidated Net Worth,
minus the net book value of all assets of Giant Industries and its Consolidated
Subsidiaries (after deducting any reserves applicable thereto) which would be
shown as intangible assets on a consolidated balance sheet of Giant Industries
and its Consolidated Subsidiaries prepared as of such time in accordance with
GAAP.

         "Constituent Company Guarantors" shall mean (a) as of the Closing Date,
each of Giant Four Corners, Inc., an Arizona corporation, San Juan, Giant
Mid-Continent, Giant Stop-N-Go of New Mexico, Inc., a New Mexico corporation,
and Phoenix, and (b) any other Subsidiary of Giant Industries which is required
to execute a Supplemental Guaranty under Section 6(l) of the Parent Guaranty.

         "Constituent Companies Guaranty" shall mean the Constituent Companies
Guaranty Agreement substantially in the form of EXHIBIT I to be executed in the
favor of the Deed of Trust Trustee, Collateral Agent and Lenders by the
Constituent Company Guarantors in accordance with the provisions of Section 6(l)
of the Parent Guaranty.



                                      -7-

Giant Yorktown, Inc.                                              Loan Agreement


         "Contingent Obligation" shall mean, as to any Person without
duplication, any direct or indirect liability of that Person with or without
recourse, (a) with respect to any Indebtedness, lease, dividend, letter of
credit or other similar obligation (the "primary obligations") of another Person
(the "primary obligor"), including any obligation of that Person (i) to
purchase, repurchase or otherwise acquire such primary obligations or any
security therefor, (ii) to advance or provide funds for the payment or discharge
of any such primary obligation, or to maintain working capital or equity capital
of the primary obligor or otherwise to maintain the net worth or solvency or any
balance sheet item, level of income or financial condition of the primary
obligor, (iii) to purchase property, securities or services primarily for the
purpose of assuring the owner of any such primary obligation of the ability of
the primary obligor to make payment of such primary obligation, or (iv)
otherwise to assure or hold harmless the holder of any such primary obligation
against loss in respect thereof (each, a "Guaranty Obligation"); or (b) to
purchase any materials, supplies or other property from, or to obtain the
services of, another Person if the relevant contract or other related document
or obligation requires that payment for such materials, supplies or other
property, or for such services, shall be made regardless of whether delivery of
such materials, supplies or other property is ever made or tendered, or such
services are ever performed or tendered. The amount of any Contingent Obligation
shall, in the case of Guaranty Obligations, be deemed equal to the maximum
stated or determinable amount of the primary obligation in respect of which such
Guaranty Obligation is made or, if not stated or if indeterminable, the maximum
reasonably anticipated liability in respect thereof, and in the case of other
Contingent Obligations, shall be equal to the maximum reasonably anticipated
liability in respect thereof.

         "Contractual Obligation" shall mean, as to any Person, any provision of
any security issued by such Person or of any agreement, undertaking, contract,
indenture, mortgage, deed of trust or other instrument, document or agreement to
which such Person is a party or by which it or any of its property is bound.

         "Conveyance Document" shall have the meaning assigned to such term in
SECTION 3.4.

         "Deed" shall mean that certain Deed from the Yorktown Seller to the
Borrower with respect to the Mortgaged Property.

         "Deed of Trust" shall mean the Deed of Trust, Assignment of Leases,
Security Agreement and Fixture Filing Statement dated as of the date hereof from
the Borrower, as grantor, to the Deed of Trust Trustee for the benefit of the
Collateral Agent, as secured party, for the benefit of the Lenders.

         "Deed of Trust Trustee" shall mean James W. DeBoer and any successor or
replacement Deed of Trust Trustee expressly permitted by the Deed of Trust.

         "Default" shall mean any event, act, or condition which with notice or
lapse of time or both, would constitute an Event of Default.

         "Deposit Account" shall have the meaning assigned to such term in
SECTION 3.6(f).



                                      -8-

Giant Yorktown, Inc.                                              Loan Agreement


         "Deposit Account Control Agreement" shall have the meaning assigned to
such term in the Giant Industries Credit Agreement.

         "Dispositions" is defined in Section 6A(b) of the Parent Guaranty.

         "Dollars" and "$" shall mean dollars in lawful currency of the United
States of America.

         "Eligible Assignee" shall mean (i) a commercial bank organized under
the laws of the United States, or any State thereof; (ii) a commercial bank
organized under the laws of any other country that is a member of the OECD or
has concluded special lending arrangements with the International Monetary Fund
associated with its General Arrangements to Borrow, or a political subdivision
of any such country, provided that such bank is acting through a branch or
agency located in the United States; (iii) a finance company, leasing company,
insurance company or other financial institution or fund (whether a corporation,
partnership or other entity) engaged generally in making, purchasing or
otherwise investing in commercial loans or leasing property or equipment in the
ordinary course of its business; (iv) the central bank of any country that is a
member of the OECD; or (v) any Lender; provided, however, that (A) any such
Person shall also have combined capital and surplus (as established in its most
recent report of condition to its primary regulator) of not less than
$50,000,000 (or its equivalent in foreign currency), or if such Person does not
meet the foregoing requirements in this proviso, such Person furnishes a
guaranty of an Affiliate, which Affiliate meets the requirements of this
proviso, of such Person's obligations under the Operative Documents and (B) any
Person described in clause (ii), (iii), (iv) or (v) above shall, on the date on
which it is to become a Lender hereunder, be entitled to receive payments
hereunder without deduction or withholding of any United States Federal income
taxes.

         "Engagement Letter" shall mean the engagement letter dated February 5,
2002 between Giant Industries and Arranger.

         "Environmental Audit" shall mean a Phase I Environmental Assessment of
the Site, in form and substance satisfactory to the Lenders.

         "Environmental Claims" shall have the meaning assigned to such term in
SECTION 11.5.

         "Environmental Law" shall mean all applicable federal, state, and local
laws, statutes, rules, regulations, codes, ordinances, legally binding guidance
documents, rules of common law, legally binding directives or orders ("Laws") of
any Governmental Authority having jurisdiction over Giant Industries or any of
its Subsidiaries, any of their respective properties, or any user or occupant of
property of Giant Industries or any Subsidiary, relating to the protection of
human health, safety, public welfare, or the environment, now existing or
hereafter adopted, including without limitation, Laws relating to the
generation, processing, treatment, investigation, remediation, storage,
transport, disposal, management, handling, and use of Hazardous Substances, and
those relating to the protection of environmentally sensitive areas.

         "Environmental Matters" shall mean any and all actions, suits, demands,
demand letters, claims, complaints, notices of non-compliance or violation,
enforcement actions, investigations,


                                      -9-

Giant Yorktown, Inc.                                              Loan Agreement


or proceedings, relating in any way to (a) the presence, alleged presence, or
use of any Hazardous Substance on, under, or about any property or assets of
Giant Industries or any of its Subsidiaries or the migration or alleged
migration of Hazardous Substances to or from such property regardless of the
source of such migration or when such migration occurred or when such presence
is discovered; (b) the Release or threatened Release of any Hazardous Substance
on, under, to or from any property or assets of Giant Industries or any of its
Subsidiaries regardless of the source of such Release or when such Release
occurred; or (c) the violation of any Environmental Law, regardless of whether
the existence or alleged existence of such Hazardous Substance or the violation
of Environmental Law arose prior to Giant Industries' or its Subsidiary's
ownership or operation of the subject property. "Environmental Matters"
includes, without limitation, any and all claims by any third party seeking
damages, contribution, indemnification, cost recovery, compensation or
injunctive relief or any other form of recovery arising in connection with any
Hazardous Substance or arising from alleged injury or threat of injury to
property, human health or the environment or from any nuisance condition.

         "ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended, and regulations promulgated thereunder.

         "ERISA Affiliate" shall mean any trade or business (whether or not
incorporated) under common control with Giant Industries within the meaning of
Section 414(b) or (c) of the Code (and Sections 414(m) and (o) of the Code for
purposes of provisions relating to Section 412 of the Code).

         "ERISA Event" shall mean (a) a Reportable Event with respect to a
Pension Plan; (b) a withdrawal by Giant Industries or any ERISA Affiliate from a
Pension Plan subject to Section 4063 of ERISA during a plan year in which it was
a substantial employer (as defined in Section 4001(a)(2) of ERISA) or a
cessation of operations which is treated as such a withdrawal under Section
4062(e) of ERISA; (c) a complete or partial withdrawal by Giant Industries or
any ERISA Affiliate from a Multiemployer Plan or notification that a
Multiemployer Plan is in reorganization; (d) the filing of a notice of intent to
terminate, the treatment of a Plan amendment as a termination under Section
4041(c) or 4041A of ERISA, or the commencement of proceedings by the PBGC to
terminate a Pension Plan or Multiemployer Plan; (e) an event or condition which
might reasonably be expected to constitute grounds under Section 4042 of ERISA
for the termination of, or the appointment of a Borrower to administer, any
Pension Plan or Multiemployer Plan; or (f) the imposition of any material
liability under Title IV of ERISA, other than PBGC premiums due but not
delinquent under Section 4007 of ERISA, upon Giant Industries or any ERISA
Affiliate.

         "Escrow Arrangement" shall mean an escrow or similar arrangement,
pursuant to which funds are irrevocably deposited in an amount sufficient to
redeem the NBD Subordinated Notes in full.

         "Event of Default" shall have the meaning assigned to such term in
SECTION 8.1.

         "Fair Market Value" shall mean, with respect to the Mortgaged Property
or a portion thereof as of any date, the price which a purchaser would pay to
purchase such Mortgaged


                                      -10-

Giant Yorktown, Inc.                                              Loan Agreement


Property in an arm's-length transaction between a willing buyer and a willing
seller, neither of them being under any compulsion to buy or sell. In making any
determination of Fair Market Value, Appraiser shall assume such Mortgaged
Property has been maintained in accordance with the requirements of this Loan
Agreement and that such Mortgaged Property is in the condition in which it is
required to be hereunder as of the date for which such determination is made.
Appraiser shall use such reasonable methods of appraisal as are satisfactory to
the Lenders.

         "Federal Funds Rate" shall mean, for any day, the rate per annum
(rounded upwards, if necessary, to the nearest 1/100 of 1%) equal to the
weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers on such
day, as published by the Federal Reserve Bank of New York on the Business Day
next succeeding such day; provided that (a) if such day is not a Business Day,
the Federal Funds Rate for such day shall be such rate on such transactions on
the next preceding Business Day as so published on the next succeeding Business
Day, and (b) if no such rate is so published on such next succeeding Business
Day, the Federal Funds Rate for such day shall be the average rate charged to
the Collateral Agent on such day on such transactions as determined by the
Collateral Agent.

         "Fee Letters" shall mean the Arrangement Fee Letter and the Collateral
Agent Fee Letter.

         "Fees" shall have the meaning assigned to such term in SECTION 4.9.

         "Fixed Charge Coverage Ratio" shall mean, as of any date of
determination, the ratio of (a) the sum, without duplication, of (i)
Consolidated EBITDA for the period of four fiscal quarters ending on such date,
plus (ii) Consolidated Rents for such period, plus (iii) to the extent excluded
in the calculation of Consolidated EBITDA, Margin Payments made by Giant
Industries under the Yorktown Asset Purchase Agreement during such period, minus
(iv) Capital Expenditures during such period (excluding Margin Payments treated
as Capital Expenditures), minus (v) all taxes measured by income and paid in
cash during such period, to (b) the sum, without duplication, of (i)
Consolidated Interest Expense during such period, plus (ii) Consolidated Rents
during such period, plus (iii) scheduled amortization of Giant Industries' and
its Subsidiaries' Indebtedness during such period, plus (iv) Margin Payments
made by Giant Industries under the Yorktown Asset Purchase Agreement during such
period. With respect to Indebtedness incurred in connection with the Yorktown
Acquisition (including Loans under the Giant Industries Credit Agreement),
Consolidated Interest Expense shall be calculated on a pro forma basis for the
four fiscal quarters most recently ended as if such Indebtedness had been
incurred on the first day of such period.

         "FRB" shall mean the Board of Governors of the Federal Reserve System,
and any Governmental Authority succeeding to any of its principal functions.

         "GAAP" shall mean generally accepted accounting principles set forth
from time to time in the opinions and pronouncements of the Accounting
Principles Board and the American Institute of Certified Public Accountants and
statements and pronouncements of the Financial Accounting Standards Board (or
agencies with similar functions of comparable stature and


                                      -11-

Giant Yorktown, Inc.                                              Loan Agreement


authority within the U.S. accounting profession), which are applicable to the
circumstances as of the date of determination.

         "Giant Arizona" shall mean Giant Industries Arizona, Inc., an Arizona
corporation, and its successors.

         "Giant Industries" shall mean Giant Industries, Inc., a Delaware
corporation, and its successors.

         "Giant Industries Credit Agreement" shall mean the Second Amended and
Restated Credit Agreement dated as of May 14, 2002, among Giant Industries, as
borrower, the several financial institutions from time to time parties thereto,
as lenders, and Bank of America, as administrative agent for the lenders and as
letter of credit issuing bank.

         "Giant Industries Credit Agreement Documents" shall mean the Giant
Industries Credit Agreement and each other agreement, document and instrument
executed and delivered by Giant Industries or any other Subsidiary of Giant
Industries in connection therewith.

         "Governmental Action" shall mean all permits, authorizations,
registrations, consents, approvals, waivers, exceptions, variances, orders,
judgments, written interpretations, decrees, licenses, exemptions, publications,
filings, notices to and declarations of or with, or required by, any
Governmental Authority, or required by any Requirement of Law, and shall
include, without limitation, all environmental and operating permits and
licenses that are required for the full use and operation of the Mortgaged
Property.

         "Governmental Authority" shall mean any nation or government, any state
or other political subdivision thereof, any central bank (or similar monetary or
regulatory authority) thereof, any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to government,
and any corporation or other entity owned or controlled, through stock or
capital ownership or otherwise, by any of the foregoing.

         "Guarantor" shall mean any Parent Guarantor or any Constituent Company
Guarantor.

         "Guaranty Obligation" has the meaning specified in the definition of
"Contingent Obligation."

         "Hazardous Substance" shall mean any substance that poses a threat to,
or is regulated to protect, human health, safety, public welfare, or the
environment, including without limitation: (a) any "hazardous substance,"
"pollutant" or "contaminant," and any "petroleum" or "natural gas liquids" as
those terms are defined or used under Section 101 of the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended (42
U.S.C. Sections 9601 et seq.) ("CERCLA"), (b) "solid waste" as defined by
the federal Solid Waste Disposal Act (42 U.S.C. Sections 6901 et seq.),
(c) asbestos or a material containing asbestos, (d) any material that contains
lead or lead-based paint, (e) any item or equipment that contains or is
contaminated by polychlorinated biphenyls, (f) any radioactive material, (g)
urea formaldehyde, (h) putrescible materials, (i) infectious materials, (j)
toxic microorganisms,


                                      -12-

Giant Yorktown, Inc.                                              Loan Agreement


including mold, or (k) any substance the presence or Release of which requires
reporting, investigation or remediation under any Environmental Law.

         "Highest Lawful Rate" shall have the meaning assigned to such term in
SECTION 4.8.

         "Indebtedness" of any Person shall mean, without duplication, (a) all
indebtedness for borrowed money; (b) all obligations issued, undertaken or
assumed as the deferred purchase price of property or services (other than trade
payables entered into in the ordinary course of business on ordinary terms); (c)
all direct or contingent reimbursement or payment obligations with respect to
Surety Instruments; (d) all obligations evidenced by notes, bonds, debentures or
similar instruments, including obligations so evidenced incurred in connection
with the acquisition of property, assets or businesses; (e) all indebtedness
created or arising under any conditional sale or other title retention
agreement, or incurred as financing, in either case with respect to property
acquired by the Person (even though the rights and remedies of the seller or
bank under such agreement in the event of default are limited to repossession or
sale of such property); (f) all obligations with respect to Capital Leases; (g)
all obligations with respect to "off-balance sheet" obligations (but not
including any operating lease under which aggregate rentals during the term
thereof is less than $500,000); (h) all net obligations under any Swap Contract
in an amount equal to (i) if such Swap Contract has been closed out the
termination value thereof, or (ii) if such Swap Contract has not been closed
out, the mark-to-market value thereof determined on the basis of readily
available quotations provided by any recognized dealer in such Swap Contract;
(i) all indebtedness referred to in clauses (a) through (h) above secured by (or
for which the holder of such Indebtedness has an existing right, contingent or
otherwise, to be secured by) any Lien upon or in property (including accounts
and contracts rights) owned by such Person, even though such Person has not
assumed or become liable for the payment of such Indebtedness; and (j) all
Guaranty Obligations in respect of indebtedness or obligations of others of the
kinds referred to in clauses (a) through (h) above.

         "Indemnitee" shall mean the Arranger, any Lender, the Collateral Agent,
the Deed of Trust Trustee, the Trust Company and their respective Affiliates,
successors, permitted assigns, permitted transferees, invitees, contractors,
servants, employees, officers, directors, shareholders, partners, participants,
representatives agents and their respective designees or nominees; provided,
however, that in no event shall any other Person (other than the Arranger, any
Lender, the Collateral Agent, the Deed of Trust Trustee, the Trust Company and
their respective Affiliates, successors, permitted assigns, permitted
transferees, invitees, contractors, servants, employees, officers, directors,
shareholders, partners, participants, representatives, agents and their
respective designees or nominees) who purchases the Mortgaged Property for value
following a foreclosure or other remedy be an Indemnitee.

         "Indentures" shall mean the BNY $150,000,000 Indenture and the BNY
$200,000,000 Indenture, and any other Indentures pursuant to which other
Subordinated Notes are issued.

         "Insolvency Proceeding" shall mean (a) any case, action or proceeding
relating to bankruptcy, reorganization, insolvency, liquidation, receivership,
dissolution, winding-up or relief of debtors, or (b) any general assignment for
the benefit of creditors, composition, marshalling of assets for creditors, or
other, similar arrangement in respect of its creditors


                                      -13-

Giant Yorktown, Inc.                                              Loan Agreement


generally or any substantial portion of its creditors; undertaken under U.S.
federal, state or foreign law, including the Bankruptcy Code.

         "Insurance Requirements" shall mean all terms and conditions of any
insurance policy required by this Loan Agreement to be maintained or caused to
be maintained by Borrower, and all requirements of the issuer of any such
policy.

         "Interest" shall mean, with respect to each Interest Period, an amount
equal to interest accrued on the Loan Balance outstanding during such period at
the Interest Rate.

         "Interest Period" shall mean initially the period commencing on (and
including) the Closing Date and ending on (but excluding) the next succeeding
Payment Date thereafter, and thereafter, each period commencing on (and
including) a Payment Date and ending on (but excluding) the next succeeding
Payment Date.

         "Interest Rate" shall mean for each day during each Interest Period
with respect thereto, (a) if no Default or Event of Default shall then exist,
(i) if the Base Rate is in effect pursuant to SECTION 11.6 or SECTION 4.7
hereof, a rate per annum equal to the Base Rate, or (ii) if the Adjusted LIBO
Rate is in effect pursuant to SECTION 4.7, a rate per annum equal to the
Adjusted LIBO Rate or (b) if at any time a Default or Event of Default shall
occur during such Interest Period then for so as long as such Default or Event
of Default shall exist or until a new Interest Rate is selected, or deemed to
have been selected, pursuant to SECTION 4.7 hereof, a rate per annum equal to
the Interest Rate in effect immediately prior to the occurrence of such Default
or Event of Default plus 2.00%.

         "IRS" shall mean the Internal Revenue Service, and any Governmental
Authority succeeding to any of its principal functions under the Code.

         "Lease" shall have the meaning assigned to such term in SECTION 3.2.

         "Lender Liens" shall mean Liens on or against the Mortgaged Property
(a) which result from any act of, or any Claim against, any Lender or any Agent
unrelated to the transactions contemplated by the Operative Documents or (b)
which result from any Tax owed by any such Person, except any Tax for which
Borrower is obligated to indemnify.

         "Lenders" shall mean the Persons set forth on SCHEDULE IA hereto,
together with any permitted successors and assigns.

         "Liabilities" shall have the meaning assigned to such term in the
Parent Guaranty.

         "LIBO Rate" shall mean with respect to any Interest Period at any time,
the applicable London interbank offered rate per annum for deposits in Dollars
appearing on Telerate Page 3750 as of 11:00 a.m. (London time) two (2) Business
Days prior to the first day of such Interest Period; or if no London interbank
offered rate of such maturity then appears on Telerate Page 3750, then the rate
equal to the London interbank offered rate per annum for deposits in Dollars
maturing immediately before or immediately after such maturity, whichever is
higher, as


                                      -14-

Giant Yorktown, Inc.                                              Loan Agreement


determined by the Collateral Agent from Telerate Page 3750; or if Telerate Page
3750 is not available, the applicable LIBO Rate for the relevant Interest Period
shall be the rate per annum determined by the Collateral Agent to be the
arithmetic average of the rates at which Bank of America offers to place
deposits in Dollars with first-class banks in the London interbank market at
approximately 11:00 a.m. (London time) two (2) Business Days prior to the first
day of such Interest Period, in the approximate amount of the aggregate
outstanding principal amount of the Notes and having a maturity approximately
equal to such Interest Period.

         "Lien" shall mean any security interest, mortgage, deed of trust,
pledge, hypothecation, assignment, charge or deposit arrangement, encumbrance,
lien (statutory or other) or preferential arrangement of any kind or nature
whatsoever in respect of any property (including those created by, arising under
or evidenced by any conditional sale or other title retention agreement, the
interest of a lessee under a Capital Lease, any financing lease having
substantially the same economic effect as any of the foregoing, or the filing of
any financing statement naming the owner of the asset to which such lien relates
as debtor, under the UCC or any comparable law) and any contingent or other
agreement to provide any of the foregoing, but not including the interest of a
lessee under an Operating Lease.

         "Loan" shall mean the loan from the Lenders to the Borrower pursuant to
the terms of this Loan Agreement.

         "Loan Agreement" shall have the meaning assigned to such term in the
introductory paragraph hereof.

         "Loan Balance" shall mean, as of any time, the aggregate principal
amount outstanding on the Notes at such time.

         "Loan Term" shall mean the period from the Closing Date to, and
including, the Maturity Date.

         "Majority Lenders" shall mean Lenders who hold Notes representing more
than 50% of the aggregate Loan Balance outstanding at such time.

         "Margin Payments" shall mean the amounts payable by Giant Industries to
the Yorktown Seller under Section 3(e) of the Yorktown Asset Purchase Agreement
(as in effect on the effective date thereof).

         "Margin Stock" shall mean "margin stock" as such term is defined in
Regulation T, U or X of the FRB.

         "Material Adverse Effect" shall mean (a) a material adverse change in,
or a material adverse effect upon, the operations, business, properties,
liabilities (actual or contingent), capitalization or condition (financial or
otherwise) of Giant Industries and its Subsidiaries taken as a whole; (b) a
material impairment of the ability of Borrower, Giant Industries or any
Significant Subsidiary to perform under any Operative Document and to avoid any
Event of Default; or (c) a material adverse effect upon (i) the legality,
validity, binding effect or


                                      -15-

Giant Yorktown, Inc.                                              Loan Agreement


enforceability against Borrower, Giant Industries or any Significant Subsidiary
of any Operative Document or any rights or remedies under any thereof, (ii) the
perfection or priority of any Lien granted under any of the Operative Documents,
(iii) the rights or interests of the Collateral Agent or any Lender in the
Mortgaged Property or (iv) the Fair Market Value, use, utility, useful life or
condition of the Mortgaged Property, other than any Partial Casualty pursuant to
which the Borrower has paid the Partial Casualty Amount or is rebuilding the
affected portion of the Mortgaged Property pursuant to SECTION 3.6.

         "Material Contracts" shall have the meaning assigned to such term in
Section 5(ff) of the Parent Guaranty.

         "Material Subsidiary" shall mean, at any time, a Subsidiary with total
assets with a book value of $2,000,000 or more.

         "Maturity Date" shall mean May 14, 2005, or such earlier date on which:
(i) the Borrower is required to pay the Total Casualty Amount pursuant to
SECTION 3.6 or the Payoff Amount pursuant to SECTION 5.2 or (ii) the principal
and interest on the Notes have become due and payable pursuant to SECTION 8.2 or
8.3.

         "Moody's" shall mean Moody's Investor Service, Inc.

         "Mortgaged Property" shall have the meaning assigned to such term in
the Deed of Trust.

         "Mortgaged Property Purchase Price" shall mean the sum of (a) Appraised
Value as of the Closing Date of the Mortgaged Property, and (b) Transaction
Costs.

         "Mortgaged Property Records" shall mean those maintenance and other
records, books, manuals, logs, writings, data bases, and other information
relating to the maintenance, operation, ownership and use of the Mortgaged
Property.

         "Mortgaged Property Value" shall mean, with respect to any Partial
Casualty, the lowest Fair Market Value during the remaining Loan Term after such
Partial Casualty, determined by an Appraisal acceptable to Collateral Agent for
the Mortgaged Property after such Partial Casualty.

         "Multiemployer Plan" shall mean a "multiemployer plan," within the
meaning of Section 4001(a)(3) of ERISA, to which Giant Industries or any ERISA
Affiliate makes, is making, or is obligated to make contributions or, during the
preceding three calendar years, has made, or been obligated to make,
contributions.

         "NBD Indenture" shall mean that certain Indenture dated November 29,
1993, between Giant Industries, as issuer, NBD Bank, National Association (now
known as Bank One Trust Company, N.A.) ("NBD Bank"), as borrower, and others
evidenced by the NBD Subordinated Notes.



                                      -16-

Giant Yorktown, Inc.                                              Loan Agreement

         "NBD Subordinated Notes" shall mean the $100,000,000 9-3/4% Senior
Subordinated Notes due 2003 issued by Giant Industries under the NBD Indenture,
to be refinanced, pursuant to the Escrow Agreement established on the Closing
Date with the proceeds of the BNY $200,000,000 Subordinated Notes.

         "Notes" shall have the meaning assigned to such term in SECTION 4.2.

         "Obligation" shall mean any obligation or liability of Borrower or any
Guarantor to any Agent or any Lender, howsoever created, arising or evidenced,
whether direct or indirect, absolute or contingent, now or hereafter existing,
or due or to become due, under or in connection with this Loan Agreement or any
other Operative Document.

         "Officer's Certificate" of a Person shall mean a certificate signed by
a Responsible Officer of such Person.

         "Operating Lease" shall mean an operating lease determined in
accordance with GAAP.

         "Operative Documents" shall mean this Loan Agreement (including all
Annexes, Exhibits and Schedules hereto), the Deed, the Parent Guaranty, the
Constituent Companies Guaranty, the Deed of Trust, the Bill of Sale, the Notes,
the Fee Letters, the Engagement Letter, the Closing Notice, and any Assignment
and Assumption and all other related agreements and documents issued or
delivered hereunder or thereunder or pursuant hereto or thereto (in each case as
the same may be amended, modified, restated, supplemented, extended, renewed or
replaced from time to time), and "Operative Document" shall mean any one of
them.

         "Organization Documents" shall mean, for any corporation, the
certificate or articles of incorporation, the bylaws, any certificate of
determination or instrument relating to the rights of preferred shareholders of
such corporation, any shareholder rights agreement, and all applicable
resolutions of the board of directors (or any committee thereof) of such
corporation.

         "Original Part" shall have the meaning assigned to such term in SECTION
3.4.

         "Overdue Rate" shall have the meaning assigned to such term in SECTION
4.4(b).

         "Parent Guarantors" shall mean each of Giant Industries and Giant
Arizona and each Person that becomes a Parent Guarantor by execution of a
Supplemental Guaranty in accordance with Section 6(l) of the Parent Guaranty,
together with their successor and permitted assigns, and "Parent Guarantor"
shall mean anyone of them.

         "Parent Guaranty" shall mean that certain Parent Guaranty Agreement
dated as of the date hereof by Giant Industries and Giant Arizona for the
benefit of the Arranger, the Deed of Trust Trustee, Collateral Agent and Lenders
in substantially the form of EXHIBIT K.

         "Part" shall have the meaning assigned to such term in SECTION 3.4.



                                      -17-

Giant Yorktown, Inc.                                              Loan Agreement


         "Partial Casualty" shall mean any event listed in the definition of
Total Casualty that does not result in a Total Casualty and results in damage
for which the cost to repair would exceed $5,000,000 (all other such events to
be remedied under SECTION 3.3 or 3.4).

         "Partial Casualty Amount" shall mean, with respect to the Mortgaged
Property as of any date specified for payment thereof, a portion of the Loan
Balance equal to the difference, if positive, between the Loan Balance and 50%
of the Mortgaged Property Value, plus all Interest accrued on such portion of
the Loan Balance to the date of payment, plus the Applicable Administrative
Charge on such portion of the Loan Balance.

         "Partial Casualty Settlement Date" shall have the meaning assigned to
such term in SECTION 3.6(b)(i).

         "Payment Date" shall mean (i) the fourteenth (14th) day of each month
or if such fourteenth (14th) day is not a Business Day, the next succeeding
Business Day, and (ii) in any case, the Maturity Date.

         "Payoff Amount" shall mean as of any date of determination, the sum of
(a) the Loan Balance as of the date of payment, plus (b) all accrued but unpaid
Interest, plus (c) the Applicable Administrative Charge, if any, plus (d) all
other sums then due and payable under the Operative Documents by Borrower, a
Guarantor or any of their Affiliates.

         "PBGC" shall mean the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA and any successor thereto.

         "Pension Plan" shall mean any "employee pension benefit plan" (as
defined in Section 3(2) of ERISA) subject to Title IV of ERISA, other than a
Multiemployer Plan, which Giant Industries or any of its Subsidiaries or any of
their respective ERISA Affiliates sponsors, maintains, or to which it makes, is
making, or is obligated to make contributions, or in the case of a multiple
employer plan (as described in Section 4064(a) of ERISA) has made contributions
at any time during the immediately preceding five (5) plan years.

         "Permitted Contest" shall mean actions taken by a Person to contest in
good faith, by appropriate proceedings initiated timely and diligently
prosecuted, the legality, validity or applicability to the Mortgaged Property or
any interest therein of any Person of: (a) any law, regulation, rule, judgment,
order, or other legal provision or judicial or administrative requirements; (b)
any term or condition of, or any revocation or amendment of, or other proceeding
relating to, any authorization or other consent, approval or other action by any
Governmental Authority; or (c) any Lien or Tax; provided that the initiation and
prosecution of such contest would not: (i) result in, or materially increase the
risk of, the imposition of any criminal liability on any Indemnitee; (ii)
materially and adversely affect the Liens created by the Operative Documents or
the right, title or interest of Deed of Trust Trustee, Collateral Agent or any
Lender in or to any of the Mortgaged Property or the right of Deed of Trust
Trustee, Collateral Agent or any Lender to receive payment of all or any portion
of any payment of Interest, principal, Loan Balance, Administrative Charge or
any other amount payable under the Operative Documents; (iii) permit, or pose a
material risk of, the sale or forfeiture of, or


                                      -18-

Giant Yorktown, Inc.                                              Loan Agreement


foreclosure on, the Mortgaged Property or (iv) materially and adversely affect
the Fair Market Value, utility or remaining useful life of the Mortgaged
Property or any interest therein or the continued economic operation thereof;
and provided further that in any event adequate reserves in accordance with GAAP
are maintained against any adverse determination of such contest.

         "Permitted Encumbrances" shall mean (i) any rights in favor of Deed of
Trust Trustee, Collateral Agent and the Lenders pursuant to this Loan Agreement
or any other Operative Documents; (ii) materialmen's, mechanics', workers',
artisan's, repairmen's, employees' or other like Liens securing payment of the
price of goods or services rendered in the ordinary course of business for
amounts the payment of which is not overdue or is being contested pursuant to a
Permitted Contest; (iii) any Lender Lien; (iv) Liens for current Taxes which are
not delinquent or the validity of which is being contested pursuant to a
Permitted Contest; (v) easements, rights-of-way, restrictions, defects or other
exceptions to title and other similar encumbrances with respect to the Site
incurred in the ordinary course of business which, in the aggregate, are not
substantial in amount, and which do not in any case materially detract from the
value of the property subject thereto or interfere with the ordinary conduct of
the business of Borrower; and (vi) the rights provided under those certain
Installment Sale Agreements by and between the Industrial Development Authority
of York County, Virginia and Amoco Oil Company, recorded February 11, 1997, at
the Clerk's Office of the Circuit Court of York County, Virginia in Deed Book
296, Page 781 and in Deed Book 297, Page 1.

         "Permitted Liens" has the meaning set forth in Section 6A(a) of the
Parent Guaranty.

         "Permitted Modification" shall have the meaning assigned to such term
in SECTION 3.4.

         "Person" shall mean an individual, partnership, corporation, limited
liability company, business trust, joint stock company, trust, unincorporated
association, joint venture or Governmental Authority.

         "Phoenix" shall mean Phoenix Fuel Co., Inc., an Arizona corporation.

         "Plan" shall mean an employee benefit plan (as defined in Section 3(3)
of ERISA) established by Giant Industries or any ERISA Affiliate.

         "Preferred Stock," as applied to the Capital Stock of any person, shall
mean Capital Stock of any class or classes (however designated) which is
preferred as to the payment of dividends or distributions, or as to the
distribution of assets upon any voluntary or involuntary liquidation or
dissolution of such corporation, over the Capital Stock of any other class of
such person.

         "Prepayment Option" shall have the meaning assigned to such term in
SECTION 5.2.

         "Prime Rate" shall mean the per annum rate of interest established from
time to time by Bank of America as its prime rate, which rate may not be the
lowest rate of interest charged by Bank of America to its customers.

                                      -19-

Giant Yorktown, Inc.                                              Loan Agreement


         "Principal Business" shall mean (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 Giant Industries
or its Subsidiaries, (iv) convenience stores, retail service stations, 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.

         "Prohibited Transaction" shall mean a transaction that is prohibited
under Code Section 4975 or ERISA Section 406 and not exempt under Code Section
4975 or ERISA Section 408.

         "Rating Agency" shall mean each of the following credit rating
agencies:

                  Standard & Poor's Ratings Services,
                  a division of The McGraw-Hill Companies, Inc.
                  55 Water Street, 40th Floor
                  New York, New York 10041-0003
                  Attn:  Structured Finance Ratings
                  Telephone No.: (212) 438-2000
                  Telecopier No.: (212) 438-7321

                                 and

                  Moody's Investors Service
                  99 Church Street
                  New York, New York 10007
                  Attn:  Asset Backed CP Monitoring Department
                  Telephone No.: (212) 553-0300
                  Telecopier No.: (212) 553-3850/0881

Except as otherwise indicated, any reference herein to "the Rating Agency" shall
be deemed to include each such credit rating agency.

         "Regulation T, U or X" shall mean Regulation T, U or X, respectively,
of the Board of Governors of the Federal Reserve System as from time to time in
effect and any successor to all or a portion thereof.

         "Release" shall mean any depositing, spilling, leaking, pumping,
pouring, emitting, emptying, discharging, injecting, escaping, leaching,
dumping, migration, or disposing.

         "Removable Part" shall have the meaning assigned to such term in
SECTION 3.4.

         "Reportable Event" shall mean any of the events set forth in Section
4043(c) of ERISA or the regulations thereunder, other than any such event for
which the 30-day notice requirement under ERISA has been waived in regulations
issued by the PBGC.

         "Replacement Parts" shall have the meaning assigned to such term in
SECTION 3.4.



                                      -20-

Giant Yorktown, Inc.                                              Loan Agreement


         "Required Alteration" shall have the meaning assigned to such term in
SECTION 3.4.

         "Required Lenders" shall mean Lenders who hold Notes representing at
least 66-2/3% of the aggregate Loan Balance outstanding at such time.

         "Required Prepayment" shall mean, for any Interest Period, a portion of
the Loan Balance in the amount set forth on SCHEDULE IIB for such Interest
Period.

         "Requirement of Law" shall mean, as to any Person, any law (statutory
or common), treaty, rule or regulation or determination of an arbitrator or of a
Governmental Authority, in each case applicable to or binding upon the Person or
any of its property or to which the Person or any of its property is subject,
including without limitation Environmental Laws.

         "Responsible Officer" shall mean the officers of Giant Industries with
the following titles: (i) president; (ii) executive vice president; (iii) vice
president and chief financial officer; and (iv) vice president and chief
accounting officer.

         "Responsible Officer's Certificate" shall mean a certificate signed by
an applicable Responsible Officer, which certificate shall certify as true and
correct the subject matter being certified to in such certificate.

         "Restricted Payments" is defined in Section 6A(i) of the Parent
Guaranty.

         "San Juan" shall mean San Juan Refining Company, a New Mexico
corporation.

         "SEC" shall mean the United States Securities and Exchange Commission.

         "Securities Act" shall mean the Securities Act of 1933, as amended.

         "Senior Leverage Ratio" shall mean, as of any date, the ratio of (a)
Consolidated Senior Indebtedness as of the determination date to (b)
Consolidated EBITDA for the four fiscal quarters ending on such date, or if such
date is not the last day of a fiscal quarter, ending on the last day of the
fiscal quarter most recently ended.

         "Significant Subsidiary" shall mean (a) Giant Arizona, (b) San Juan,
(c) Phoenix and (d) any other subsidiary of Giant Industries having total assets
at or immediately prior to the time in question with a book value of $10,000,000
or more.

         "Site" shall mean the land and the other rights described in Exhibit A
to the Deed of Trust.

         "Solvent" shall mean, as to any Person at any time, that (a) the fair
value of all of the property of such Person is greater than the amount of such
Person's liabilities (including disputed, contingent and unliquidated
liabilities) as such value is established and liabilities evaluated for purposes
of Section 101(32) of the Bankruptcy Code; (b) the present fair saleable value
of all of the property of such Person is not less than the amount that will be
required to pay


                                      -21-

Giant Yorktown, Inc.                                              Loan Agreement


the probable liability of such Person on its debts as they become absolute and
matured; (c) such Person does not intend to, and does not believe that it will,
incur debts or liabilities beyond such Person's ability to pay as such debts and
liabilities mature; and (d) such Person is not engaged in business or a
transaction, and is not about to engage in business or a transaction, for which
such Person's property would constitute unreasonably small capital.

         "S&P" shall mean Standard & Poor's Ratings Group, a Division of
McGraw-Hill, Inc., a New York corporation.

         "Specified Swap Contracts" shall mean all Swap Contracts made or
entered into at any time, or in effect at any time, whether directly or
indirectly, and whether as a result of assignment or transfer or otherwise,
between Giant Industries or any Subsidiary and any Swap Provider, which Swap
Contract is or was intended by Giant Industries or such Subsidiary to have been
entered into, in part or entirely, for purposes of mitigating interest rate or
currency exchange risk relating to any liabilities owed or credit facilities in
effect and not for the purposes of financing, speculation or taking a "market
view" (which intent shall conclusively be deemed to exist if Giant Industries or
such Subsidiary so represents to the Swap Provider in writing) and as to which
the final scheduled payment by Giant Industries or its Subsidiary is not later
than the Maturity Date.

         "Subordinated Documents" shall mean (i) the NBD Subordinated Notes and
(ii) the BNY Subordinated Notes and, in each case, each other agreement,
document and instrument executed and delivered in connection therewith.

         "Subordinated Notes" shall mean (i) the BNY $150,000,000 Subordinated
Notes issued under the BNY $150,000,000, (ii) the BNY $200,000,000 Subordinated
Notes issued under the BNY $200,000,000 Indenture and (iii) such other notes as
may be issued from time to time by Giant Industries after the Closing Date
containing terms, and issued pursuant to an Indenture containing terms,
satisfactory to the Collateral Agent and the Required Lenders, and which are
subordinated on terms and conditions satisfactory to the Collateral Agent and
the Required Lenders, in their sole discretion, to all Obligations, whether now
existing or hereafter incurred. Notes shall not be considered "Subordinated
Notes" unless and until the Collateral Agent shall have received copies of the
documentation evidencing or relating to such notes evidencing the terms and
conditions of subordination required by the Collateral Agent and the Required
Lenders.

         "Subsidiary" of a Person shall mean any corporation, association,
partnership, limited liability company, joint venture or other business entity
of which more than 50% of the voting stock, membership interests or other equity
interests (in the case of Persons other than corporations) is owned or
controlled directly or indirectly by the Person, or one or more of the
Subsidiaries of the Person, or a combination thereof. Unless the context
otherwise clearly requires, references herein to a "Subsidiary" refer to a
Subsidiary of Giant Industries.

         "Supplemental Guaranty" shall mean an agreement, in substantially the
form of EXHIBIT H, pursuant to which the Person executing the same elects to
become a Constituent Company Guarantor or a Parent Guarantor, as the case may
be, for purposes of this Loan


                                      -22-

Giant Yorktown, Inc.                                              Loan Agreement


Agreement and the other Operative Documents and agrees to perform all of the
obligations of a Constituent Company Guarantor or a Parent Guarantor, as the
case may be, under, and to be bound in all respects by the terms of, the
Constituent Company Guaranty or the Parent Guaranty, as the case may be, as if
said Person were a signatory thereto.

         "Supplemental Payment" shall mean any and all amounts, liabilities and
obligations other than Interest and Required Prepayments which Borrower assumes
or agrees or is otherwise obligated to pay under this Loan Agreement or any
other Operative Document (whether or not designated as Supplemental Payment) to
any Agent, any Lender or any other Person, including, without limitation, any
Administrative Charge, indemnities and damages for breach of any covenants,
representations, warranties or agreements.

         "Supplemental Underwriting Fee" shall mean the Supplemental
Underwriting Fee as described in the Arrangement Fee Letter.

         "Surety Instruments" shall mean all letters of credit (including
standby), banker's acceptances, bank guaranties, shipside bonds, surety bonds
and similar instruments.

         "Swap Contract" shall mean any agreement (including any master
agreement and any agreement, whether or not in writing, relating to any single
transaction) that is an interest rate swap agreement, basis swap, forward rate
agreement, commodity swap, commodity option, commodity forward contracts, equity
or equity index swap or option, bond option, interest rate option, forward
foreign exchange agreement, rate cap, collar or floor agreement, currency swap
agreement, cross-currency rate swap agreement, swap option, currency option or
any other, similar agreement (including any option to enter into any of the
foregoing).

         "Swap Provider" shall mean any lender under the Giant Industries Credit
Agreement or any Affiliate thereof that is at the time of determination party to
a Swap Contract with Giant Industries or any Subsidiary.

         "Swap Termination Value" shall mean, in respect of any one or more Swap
Contracts, after taking into account the effect of any legally enforceable
netting agreement relating to such Swap Contracts, (a) for any date on or after
the date such Swap Contracts have been closed out and termination value(s)
determined in accordance therewith, such termination value(s), and (b) for any
date prior to the date referenced in clause (a), the amount(s) determined as the
mark-to-market value(s) for such Swap Contracts, as determined based upon one or
more mid-market or other readily available quotations provided by any recognized
dealer in such Swap Contracts (which may include any Lender).

         "Synthetic Lease" shall mean a financing arrangement that is treated as
a lease for financial accounting purposes and as a loan for tax purposes.

         "Taxes" and "Tax" shall mean any and all fees (including, without
limitation, documentation, recording, license and registration fees), taxes
(including, without limitation, income (whether net, gross or adjusted gross)
taxes; gross and net receipts taxes; taxes that are or are in the nature of
franchise, value added, privilege or doing business taxes, license and

                                      -23-

Giant Yorktown, Inc.                                              Loan Agreement


registration fees; real and personal property (including intangibles) taxes;
sales, use and similar taxes (including rent taxes); any excise taxes; real
estate transfer taxes, mortgage taxes, conveyance taxes, turnover taxes,
value-added taxes; stamp taxes and documentary recording taxes and fees),
levies, imposts, duties, charges, assessments or withholdings of any nature
whatsoever, together with any penalties, fines or interest thereon or additions
thereto.

         "Title Insurance Company" shall mean a title insurance company selected
by Borrower and satisfactory to the Collateral Agent.

         "Title Policy" is defined in SECTION 7.24.

         "Total Casualty" shall mean any of the following events in respect of
all of the Mortgaged Property: (a) the total loss of the Mortgaged Property, or
the total loss of use thereof, due to theft, disappearance, destruction, damage
beyond repair or the rendering of the Mortgaged Property permanently unfit for
normal use for any reason whatsoever; (b) any damage to the Mortgaged Property
which results in an insurance settlement with respect to the Mortgaged Property
on the basis of a total loss or a constructive total loss; (c) the permanent
condemnation, confiscation or seizure of, or requisition of title to or use of,
the Mortgaged Property; or (d) as a result of any Requirements of Law or other
action by any Governmental Authority, the use of the Mortgaged Property in the
normal course of Borrower's business shall have been prohibited, directly or
indirectly, for a period equal to the lesser of 60 consecutive days and the
remaining Loan Term.

         "Total Casualty Amount" shall mean the Payoff Amount as of the date
specified for payment thereof.

         "Total Casualty Settlement Date" shall have the meaning assigned to
such term in SECTION 3.6(a).

         "Total Leverage Ratio" shall mean, as of any date, the ratio of (a)
Consolidated Funded Indebtedness as of the determination date to (b)
Consolidated EBITDA for the four fiscal quarters ending on such date, or if such
date is not the last day of a fiscal quarter, ending on the last day of the
fiscal quarter most recently then ended.

         "Transaction Costs" shall mean

                  (i) the reasonable fees and expenses of Chapman and Cutler
         incurred in connection with the negotiation, execution and delivery of
         the term sheet, the commitment letters, the Operative Documents, the
         syndication of the Notes and any amendments to the Operative Documents
         in connection therewith and the transactions contemplated thereby;

                  (ii) the reasonable fees and expenses of the Arranger
         including, without limitation, the fees and expenses of any insurance
         consultant hired by the Arranger and any fees and expenses incurred in
         connection with the syndication of the Notes;



                                      -24-

Giant Yorktown, Inc.                                              Loan Agreement


                           (iii) the actual and ongoing fees and expenses of the
                  Deed of Trust Trustee and Collateral Agent;

                           (iv) the reasonable counsel fees of the Collateral
                  Agent;

                           (v) the fees and expenses of the Appraiser;

                           (vi) all costs of searching and perfecting a first
                  priority Lien and security interest in the Mortgaged Property
                  (as defined in the Deed of Trust) (subject to Permitted
                  Encumbrances);

                           (vii) costs and expenses for the survey of the Site;

                           (viii) costs and expenses for any environmental
                  review or assessment of the Site;

                           (ix) costs and expenses for all title insurance and
                  policies relating to the Site;

                           (x) the Arrangement Fee and the Supplemental
                  Underwriting Fee; and

                           (xi) all other fees and expenses incurred by
                  Collateral Agent or any Lender in connection with the
                  Operative Documents and the transactions contemplated hereby.

         "Trust Company" shall mean Wells Fargo Bank Nevada, National
Association, or any successor financial institution acting as Collateral Agent
under the Operative Documents, in each case, in its individual capacity.

         "UCC" shall mean the Uniform Commercial Code of Virginia or any other
applicable jurisdiction.

         "Underwriting Amount" shall mean $75,000,000.

         "Unfunded Pension Liability" shall mean the excess of a Plan's benefit
liabilities under Section 4001(a)(16) of ERISA, over the current value of that
Plan's assets, determined in accordance with the assumptions used for funding
the Pension Plan pursuant to Section 412 of the Code for the applicable plan
year.

         "Wholly-Owned Subsidiary" shall mean any corporation in which (other
than directors' qualifying shares required by law) 100% of the capital stock of
each class having ordinary voting power at the time as of which any
determination is being made, is owned, beneficially and of record, by Giant
Industries, or by one or more of the other Wholly-Owned Subsidiaries, or both.

         "Yorktown Acquisition" shall mean the acquisition of the Mortgaged
Property from the Yorktown Seller.


                                      -25-

Giant Yorktown, Inc.                                              Loan Agreement

         "Yorktown Acquisition" shall mean the acquisition of the Mortgaged
Property from the Yorktown Seller.

         "Yorktown Acquisition Documents" shall mean the Yorktown Asset Purchase
Agreement and each other agreement, document and instrument executed and
delivered by Giant Industries, Borrower or any other Subsidiary of Giant
Industries, and the Yorktown Seller in connection with Borrower's purchase of
the Yorktown Assets.

         "Yorktown Assets" shall mean the "Purchased Assets" defined in the
Yorktown Asset Purchase Agreement, including without limitation the Mortgaged
Property.

         "Yorktown Asset Purchase Agreement" shall mean the Asset Purchase
Agreement dated as of February 8, 2002, between Giant Industries and the
Yorktown Seller with such amendments as may be satisfactory to the Collateral
Agent and the Required Lenders.

         "Yorktown Seller" shall mean BP Corporation North America Inc., an
Indiana corporation, and BP Products North America Inc., a Maryland corporation,
collectively the "Seller" under the Yorktown Asset Purchase Agreement.

         "Yorktown Subsidiaries" shall mean the Borrower.

SECTION 2. REPRESENTATION AND WARRANTIES.

         Section 2.1. Representation of Borrower. As to the date hereof and the
Closing Date, the Borrower makes the representations and warranties applicable
to it set forth in Section 5 of the Parent Guaranty (and such Section 5 of the
Parent Guaranty is hereby incorporated by reference) to each of the other
parties hereto.

         Section 2.2. Representations and Warranties of Lenders. Each Lender
represents and warrants, severally and only as to itself, to each of the other
parties hereto as follows:

                  (a) ERISA. Either (i) it is not and will not be purchasing any
         of its interest in the Notes with the assets of an "employee benefit
         plan" (as defined in Section 3(3) of ERISA) which is subject to Title I
         of ERISA, or a "plan" (as defined in Section 4975(e)(1) of the Code or
         (ii) the acquisition and holding of any Note will not result in a
         Prohibited Transaction.

                  (b) Investment. The Note being acquired by such Lender is
         being acquired by such Lender for investment for its own account and
         not with a view to the resale or distribution of such interest or any
         part thereof in any manner that would require registration under the
         Securities Act, but without prejudice, however, to the right of such
         Lender at all times to sell or otherwise dispose of all or any part of
         such interest under a registration available under the Securities Act
         or under an exemption from such registration available under the
         Securities Act, it being understood that the disposition by the
         undersigned of the Note to be purchased by such Lender shall, at all
         times, remain entirely within its control.

                  (c) Offer of Securities, etc. Neither such Lender nor any
         Person authorized to act on its behalf has, directly or indirectly,
         offered to sell the Notes or any other similar


                                      -26-

Giant Yorktown, Inc.                                              Loan Agreement

         securities (the sale or offer of which would be integrated with the
         sale or offer of the Notes), for sale to, or solicited any offer to
         acquire any of the same from, any Person.

                  (d) No Registration. Such Lender understands and acknowledges
         that the Notes have not been and will not be registered under the
         Securities Act in reliance upon the exemption provided in Section 4(2)
         of the Securities Act or any other applicable exemption, that the Notes
         have not and will not be registered or qualified under the securities
         or "blue sky" laws of any jurisdiction, that the Notes may be resold or
         otherwise transferred only if so registered or qualified or if an
         exemption from registration or qualification is available, that the
         Borrower is not required to register the Notes and that any transfer
         must comply with the provisions of the Operative Documents relating
         thereto. Such Lender will comply with all applicable federal and state
         securities laws in connection with any subsequent resale of the Notes
         held by it.

                  (e) Institutional Investor. Such Lender is a sophisticated
         institutional investor and an "accredited investor" as defined in
         paragraph (1), (2), (3) or (7) of Rule 501(a) of the Securities Act,
         and has knowledge and experience in financial and business matters and
         is capable of evaluating the merits and risks of its investment in the
         Notes and is able to bear the economic risk of such investment. Such
         Lender has been given such information concerning the Notes, the other
         Operative Documents, the Mortgaged Property and the Borrower as it has
         requested.

                  (f) Legend. Such Lender understands and acknowledges that the
         Note which it is acquiring will bear a legend as set forth in the form
         of Note included as EXHIBIT A.

         The making of any Loan on the Closing Date, and any assignment of any
Loan or this Loan Agreement shall constitute an affirmation by the subject
assignee or acquiring Lender of the preceding representations and warranties.

         Section 2.3. Representations and Warranties of Collateral Agent. Trust
Company, in its individual capacity and not in its capacity as Collateral Agent
(with the exception of CLAUSE (c) below, which representation and warranty is
made by Wells Fargo Bank Nevada, National Association, solely in its capacity as
Collateral Agent), hereby represents and warrants to each of the other parties
hereto that:

                  (a) Due Organization, etc. Trust Company is a national banking
         association duly organized, validly existing and in good standing under
         the laws of the United States of America; Trust Company has full
         banking and trust power and authority to enter into and perform its
         obligations under the Operative Documents to which it is or is to be a
         party and each other agreement, instrument and document to be executed
         and delivered by it on or before the Closing Date in connection with or
         as contemplated by each such Operative Document to which it is or is to
         be a party; and the Operative Documents to which Trust Company is a
         party, have been or will be duly executed and delivered by Trust
         Company.


                                      -27-

Giant Yorktown, Inc.                                              Loan Agreement

                  (b) Authorization; No Conflict. The execution and delivery by
         Trust Company of the Operative Documents to which it is or is to be a
         party, and the performance by Trust Company of its obligations under
         such Operative Documents, have been duly authorized by all necessary
         action on its part, and do not and will not: (i) contravene any Federal
         laws governing the banking powers of Trust Company; (ii) violate any
         provision of its articles of association or by-laws; (iii) result in a
         breach of or constitute a default under any indenture, loan or credit
         agreement, or any other agreement or instrument to which Trust Company
         is a party or by which it or its properties may be bound or affected,
         which breaches or defaults would be reasonably likely to materially and
         adversely affect the ability of Trust Company to perform its
         obligations under any Operative Documents to which it is or will be a
         party; or (iv) require any authorizations, consents, approvals,
         licenses or formal exemptions from, or any filings, declarations or
         registrations with, any Governmental Authority governing the banking
         powers of Trust Company or any consent or approval of any
         non-governmental Person.

                  (c) Enforceability, etc. Each Operative Document to which
         Trust Company is a party constitutes the legal, valid and binding
         obligation of Trust Company enforceable against it in accordance with
         the terms thereof, except as such enforceability may be limited by
         applicable bankruptcy, insolvency, reorganization, moratorium and
         similar laws affecting the enforcement of creditors' rights generally
         and by general equitable principles.

                  (d) Litigation. There is no action, proceeding or
         investigation known to Trust Company pending or threatened which
         questions the validity of the Operative Documents to which Trust
         Company is a party or any action taken or to be taken pursuant to the
         Operative Documents to which Trust Company is a party.

SECTION 3. COVENANTS.

         The Borrower covenants and agrees to perform the obligations applicable
to the Borrower set forth in Sections 6 and 6A of the Parent Guaranty and such
Sections 6 and 6A of the Parent Guaranty are hereby incorporated by reference.
The Borrower further covenants and agrees as follows:

         Section 3.1. Possession and Use of Mortgaged Property; Compliance with
Laws. Borrower agrees that the Mortgaged Property will be used and operated in
compliance with any and all Requirements of Law. Borrower shall procure and
maintain in effect all material licenses, registrations, certificates, permits,
approvals and consents required by any Requirement of Law or by any Governmental
Authority in connection with the ownership, delivery, installation, maintenance,
repair, use and operation of the Mortgaged Property. Borrower shall not (a) use,
operate, or maintain the Mortgaged Property or any portion thereof in violation
of SECTION 3.3 or any Insurance Requirement; (b) lease, assign or otherwise
permit the use of any of the Mortgaged Property except as may be permitted by
SECTION 3.2; or (c) except as set forth in SECTION 3.2, sell, assign or transfer
any of its rights or in any of the Mortgaged Property, or directly or indirectly


                                      -28-

Giant Yorktown, Inc.                                              Loan Agreement

create, incur or suffer to exist any Lien on any of its rights hereunder or in
any of the Mortgaged Property, except for Permitted Encumbrances.

         Section 3.2. Leases and Assignments. Except for leases permitted by
this SECTION 3.2, Borrower may not assign, lease, mortgage, pledge or otherwise
transfer to any Person, at any time, in whole or in part, any of its rights,
title or interest in, or obligations to or under this Loan Agreement, any other
Operative Document or to any portion of the Mortgaged Property. Each lease
entered into in accordance with this SECTION 3.2 shall be referred to as a
"Lease." Borrower may, so long as no Event of Default exists, lease all or any
portion of the Mortgaged Property to one or more of its Affiliates. With respect
to any Lease permitted under this SECTION 3.2, Borrower shall not lease any
portion of the Mortgaged Property to any Person who shall then be engaged in any
proceedings for relief under any bankruptcy or insolvency law or laws relating
to the relief of debtors.

         No Lease hereunder will (a) discharge or diminish any of Borrower's
obligations to Collateral Agent, Deed of Trust Trustee or any Lender hereunder
or Borrower's or any Guarantor's obligations to any other Person under any other
Operative Document, and Borrower shall remain directly and primarily liable
under this Loan Agreement with respect to all of the Mortgaged Property or (b)
extend beyond the last day of the Loan Term. Each Lease permitted hereby shall
be made and shall expressly provide that it is subject and subordinate to Deed
of Trust and the rights of Collateral Agent or Deed of Trust Trustee thereunder,
and shall expressly provide for the surrender of the Mortgaged Property leased
by the applicable lessee at the election of Collateral Agent or Deed of Trust
Trustee after an Event of Default.

         Borrower shall give the Collateral Agent prompt, and in any event
within 5 Business Days thereof, written notice of any Lease permitted under this
SECTION 3.2, and shall promptly provide the Collateral Agent with a fully
executed copy of each document evidencing such Lease, together with a
Certificate of a Responsible Officer of Borrower that such Lease complies with
this SECTION 3.2.

         Section 3.3. Maintenance. At all times during the term of this Loan
Agreement, Borrower shall, at its own cost and expense:

                  (a) keep, repair, maintain and preserve the Mortgaged Property
         in good order and operating condition and repair as existing on the
         Closing Date, ordinary wear and tear excepted, and in conformance with
         (i) prudent industry maintenance and repair standards, (ii) such
         maintenance and repair standards used by Giant Industries or any of its
         Affiliates for similar property owned or leased by it, and (iii) all
         material Requirements of Law and Insurance Requirements, and in the
         event that any Requirement of Law requires any alteration, replacement
         or addition of or to any Part of the Mortgaged Property, Borrower will
         conform therewith at its own expense;

                  (b) (i) conduct all scheduled maintenance of the Mortgaged
         Property in conformity with Giant Industries' and its Affiliates' past
         practices, and prudent industry maintenance and repair standards,
         (including, without limitation, Giant Industries' and its Affiliates'
         maintenance program for such equipment) and (ii) maintain such
         Mortgaged


                                      -29-

Giant Yorktown, Inc.                                              Loan Agreement

         Property so as to preserve its remaining economic useful life, utility
         and residual value; and

                  (c) cause the Mortgaged Property to continue to have at all
         times the capacity and functional ability to perform, on a continuing
         basis (subject to normal interruption in the ordinary course of
         business for maintenance, inspection, service, repair and testing) and
         in commercial operation, the functions for which it was specifically
         designed, other than any Partial Casualty pursuant to which the
         Borrower has paid the Partial Casualty Amount or is rebuilding the
         affected portion of the Mortgaged Property pursuant to SECTION 3.6.

         Borrower shall prepare and deliver to Collateral Agent and the Lenders
within 15 Business Days prior to the required date of filing (or, to the extent
permissible, file on behalf of Collateral Agent and the Lenders) any and all
material reports to be filed by Collateral Agent or any Lender with any
Governmental Authority by reason of the security interest of the Collateral
Agent or any Lender in the Mortgaged Property. Each Lender agrees to inform
Borrower of any request for such reports received by it. Borrower shall maintain
or cause to be maintained, all records, logs and other materials required by any
Governmental Authority having jurisdiction over the Mortgaged Property. Borrower
shall permit Collateral Agent and each Lender to inspect, during normal business
hours and upon notice within 5 Business Days, the Mortgaged Property and any and
all records, logs and other materials maintained by Borrower or any of its
Affiliates in respect of the Mortgaged Property; provided that from and after
the occurrence of an Event of Default, all costs and expenses of Collateral
Agent or any Lender in connection with such inspection shall be borne by
Borrower. Borrower hereby waives any right now or hereafter conferred by law to
make repairs on the Mortgaged Property at the expense of Collateral Agent or any
Lender.

         Section 3.4. Alterations, Modifications, etc. In case the Mortgaged
Property, or any item of equipment, part or appliance therein (each, a "Part")
is required to be altered, added to, replaced or modified in order to comply
with any Requirements of Law (a "Required Alteration") pursuant to SECTIONS 3.1
or 3.3 hereof, Borrower agrees to make such Required Alteration at its own
expense. Borrower shall have the right to make any modification, alteration or
improvement to the Mortgaged Property (herein referred to as a "Permitted
Modification"), or to remove any Part which has become worn out, broken or
obsolete, provided in each case that Borrower continues to be in compliance with
SECTIONS 3.1 and 3.3 hereof and that such action will not, in Borrower's
reasonable judgment, materially decrease the economic value of the Mortgaged
Property or impair its originally intended use or function or decrease its
economic useful life and in any event, will not decrease the Fair Market Value
of the Mortgaged Property throughout the Loan Term and at the end of the Loan
Term to less than 2 times the Loan Balance. In the event any Permitted
Modification (i) is readily removable without impairing the value or use which
the Mortgaged Property would have had at such time had such Part not been
affixed or placed to or on such Mortgaged Property (a "Removable Part"), (ii) is
not a Required Alteration and (iii) is not a Part which replaces any Part
originally incorporated or installed in or attached to such Mortgaged Property
on the date on which such Mortgaged Property became subject to the Deed of
Trust, or any Part in replacement of or substitution for any such original Part
(each an "Original Part"), any such Permitted Modification, if no Event of
Default is


                                      -30-

Giant Yorktown, Inc.                                              Loan Agreement

continuing, shall be and remain the property of Borrower that is not subject to
the Lien of the Deed of Trust and may be removed by Borrower (a "Borrower
Part"). To the extent such Permitted Modification is not a Removable Part, or is
a Required Alteration or an Original Part, and, to the extent a Removable Part
is not the property of Borrower that is not subject to the Lien of the Deed of
Trust because of the continuance of an Event of Default, the same shall
immediately and automatically be and become subject to the Lien of the Deed of
Trust. Any Required Alterations, and any Parts installed or replacements made by
Borrower upon any Mortgaged Property pursuant to its obligation to maintain and
keep the Mortgaged Property in good order, operating condition and repair under
SECTION 3.3 (collectively, "Replacement Parts") and all other Parts which become
the property of Borrower shall be considered, in each case, accessions to such
Mortgaged Property and a security interest therein shall be immediately and
automatically vested in Collateral Agent for the benefit of the Lenders. All
Replacement Parts shall be free and clear of all Liens (other than Permitted
Encumbrances) and shall be in as good an operating condition as, and shall have
a value and utility at least equal to, the Parts replaced, assuming such
replaced Parts and the Mortgaged Property were immediately prior to such
replacement or the event or events necessitating such replacement in the
condition and repair required to be maintained by the terms hereof. Any Part at
any time removed from any of the Mortgaged Property shall remain subject to the
interests of Collateral Agent and the Lenders under the Operative Documents, no
matter where located, until such time as such Part shall be replaced by a Part
which has been incorporated or installed in or attached to such Mortgaged
Property and which meets the requirements for a Replacement Part specified
above. No later than 45 days after the end of each fiscal quarter of Borrower,
Borrower shall deliver to Collateral Agent for the benefit of the Lenders, a
document evidencing the grant by Borrower of a security interest in such
Replacement Part to Collateral Agent for the benefit of the Lenders (a
"Conveyance Document"), of each Replacement Part not previously evidenced by a
Conveyance Document and such other documents in respect of such Part or Parts
and to the extent, as Collateral Agent may reasonably request in order to
confirm that a security interest to such Part or Parts has passed to Collateral
Agent for the benefit of the Lenders, as hereinabove provided. Any such
Replacement Part, regardless of whether evidenced by a Conveyance Document,
shall become subject to Deed of Trust and shall be deemed part of the Mortgaged
Property, for all purposes thereof to the same extent as the Parts originally
incorporated or installed in the Mortgaged Property, and a security interest to
such Replacement Part shall thereupon vest in the Collateral Agent. All
replacements pursuant to this SECTION 3.4 shall be purchased by Borrower with
its own funds. There shall be no obligation on the part of any Lender to pay for
or otherwise finance any such replacement.

         Section 3.5. Liens. Borrower will not directly or indirectly create,
incur, assume or suffer to exist any Lien (other than Permitted Encumbrances) on
or with respect to the Mortgaged Property or any Part thereof. Borrower, at its
own expense, will promptly pay, satisfy and otherwise take such actions as may
be necessary to keep the Mortgaged Property free and clear of, and to duly
discharge or eliminate or bond in a manner satisfactory to Collateral Agent, any
such Lien not excepted above if the same shall arise at any time. Borrower will
notify Collateral Agent and each Lender in writing within 5 Business Days upon
becoming aware of any Tax or other Lien (other than any Lien excepted above)
that shall attach to the Mortgaged Property, and of the full particulars
thereof. Without limiting the foregoing, Borrower shall not


                                      -31-

Giant Yorktown, Inc.                                              Loan Agreement

assign or pledge any of its rights under any Lease to any Person other than
Collateral Agent and the Deed of Trust Trustee for the benefit of the Lenders.

         Section 3.6. Casualty. Upon the occurrence of a Casualty prior to or
during the term of this Loan Agreement, Borrower shall give the Lenders and
Collateral Agent prompt, and in any event within 5 Business Days thereof,
written notice thereof (a "Casualty Notice") and in no event shall such notice
be more than 5 Business Days from the occurrence of such Casualty.

         (a) In the event of a Total Casualty, Borrower will pay to Collateral
Agent for the benefit of the Lenders, the Total Casualty Amount, which payment
shall be made no later than 90 days after such Total Casualty (the "Total
Casualty Settlement Date"), provided that in any event the Total Casualty
Settlement Date shall be no later than the last day of the Loan Term. Upon the
payment in full of the Total Casualty Amount, this Loan Agreement shall
terminate.

         (b) In the event of a Partial Casualty, the Casualty Notice shall
specify the Borrower's election of the option in clause (i) or clause (ii) below
(provided that upon the occurrence and during the continuance of a Default or an
Event of Default, Borrower shall be obligated, at the option of Collateral
Agent, to exercise the option in clause (i)) and Borrower shall on the date
specified in the relevant clause below, take such actions required thereby.

                  (i) Borrower will pay to the Lenders (such payment to be made
         directly to the Collateral Agent for the benefit of the Lenders), the
         Partial Casualty Amount to be applied to the Loan Balance, which
         payment shall be made no later than 90 days after such Partial Casualty
         (the "Partial Casualty Settlement Date"), provided that in any event
         the Partial Casualty Settlement Date shall be no later than the last
         day of the Loan Term; or

                  (ii) Borrower will replace the Mortgaged Property subject to
         the Partial Casualty pursuant to the provisions of SECTION 3.6(d).

         (c) If Borrower has elected, or is required, to pay the Total Casualty
Amount or the Partial Casualty Amount, Borrower shall continue to make all
payments of Required Prepayments and Interest due under this Loan Agreement
until and including the Total Casualty Settlement Date or the Partial Casualty
Settlement Date, as the case may be. If Borrower has elected to pay the Partial
Casualty Amount, then on the Partial Casualty Settlement Date, after payment of
the Partial Casualty Amount, the Loan Balance will be reduced by the amount of
such Partial Casualty Amount and Interest will continue to accrue on the Loan
Balance as so reduced. Such Partial Casualty Amount to be applied to the Loan
Balance shall be applied first, to the Final Payment Amount set forth on
SCHEDULE IIB and second, to, in inverse order of amounts to be paid as Required
Prepayments, Required Participants as set forth on SCHEDULE IIB.

         (d) If Borrower has given notice that Borrower intends to replace the
portion of the Mortgaged Property suffering a Partial Casualty, and such
replacement is permitted under the foregoing CLAUSE (b)(ii), Borrower may make
subject to the Deed of Trust, not later than the earlier of (i) 365 days after
the date of such Casualty Notice and (ii) the Maturity Date, a


                                      -32-

Giant Yorktown, Inc.                                              Loan Agreement

replacement for such portion of the Mortgaged Property meeting the suitability
standards hereinafter set forth. To be suitable as replacement Mortgaged
Property, an item must be of the same general type, year of construction (or a
later year of construction), useful life, function, utility, state of repair and
operating condition (immediately preceding the Partial Casualty assuming that
such portion of the Mortgaged Property had been maintained in accordance with
the terms of SECTION 3.3) as the portion of the Mortgaged Property suffering the
Partial Casualty, must have a Fair Market Value of not less than the Fair Market
Value (immediately preceding the Partial Casualty assuming that such portion of
the Mortgaged Property had been maintained in accordance with the terms of
SECTION 3.3) of the portion of the Mortgaged Property suffering the Partial
Casualty and be free and clear of any Liens other than Permitted Encumbrances.
Borrower shall cause a Conveyance Document (and such other instruments, if any,
necessary to grant a security interest to such replacement item to Collateral
Agent) in order to subject such replacement item to the Deed of Trust, and upon
such execution and delivery and the receipt by Collateral Agent and the Lenders
of (i) evidence reasonably satisfactory to the Collateral Agent of Borrower's
compliance with the insurance provisions of with respect to such replacement
item, and (ii) an opinion of counsel to Borrower in form and substance
reasonably satisfactory to the Collateral Agent opining, among other things, to
the effect that all appropriate filings, recordings and other acts have been
taken to protect the right, title and interest of the Collateral Agent and the
Lenders, in such replacement item and that no other filing, recording, deposit,
or giving of notice with or to any Governmental Authority is necessary to
protect such right, title and interest in such replacement item, such
replacement item shall be deemed part of the Mortgaged Property for all purposes
hereof.

         (e) Subject to the provisions of SECTION 3.6(f), if the Collateral
Agent has received the amount payable with respect to the Casualty and all other
amounts due hereunder, the Borrower has complied with the requirements of
SECTION 3.6(a) or of CLAUSE (i) or CLAUSE (ii), as applicable, of SECTION 3.6(b)
or SECTION 3.3 and no Event of Default or Default exists, Borrower shall be
entitled to receive from the Collateral Agent, within 30 days after receipt of
such amounts by the Collateral Agent, all other proceeds of any recovery in
respect of the Mortgaged Property from insurance or otherwise ("Casualty
Recoveries"), and Collateral Agent, subject to the rights of any insurer
insuring the Mortgaged Property as provided herein, shall execute and deliver to
Borrower, or to its assignee or nominee, a release of its security interest
(without representations or warranties except that the Mortgaged Property or
part of the Mortgaged Property, as the case may be, is free and clear of Liens
attributable to it) in the Mortgaged Property subject to a Total Casualty or
part of the Mortgaged Property replaced pursuant to SECTION 3.6(d), as the case
may be, and such other documents as may be required to release such Mortgaged
Property or such part of the Mortgaged Property, as the case may be, from the
terms of the Deed of Trust, in such form as may reasonably be requested by
Borrower. All fees, costs and expenses relating to a substitution as described
herein shall be borne by Borrower. Except as otherwise provided in this SECTION
3.6, Borrower shall not be released from its obligations hereunder in the event
of, and shall bear the risk of, any Casualty to the Mortgaged Property or part
of the Mortgaged Property, as the case may be, prior to or during the term of
this Loan Agreement and thereafter until all Borrower's obligations hereunder
are fully performed.

         (f) All Casualty Recoveries (or other payments (including, without
limitation, insurance proceeds) received at any time by Borrower from any
Governmental Authority or other


                                      -33-

Giant Yorktown, Inc.                                              Loan Agreement

party with respect to any loss or damage to any part of the Mortgaged Property
not constituting a Total Casualty) (collectively, "Casualty Proceeds") shall be
deposited into a deposit account established by Collateral Agent for the benefit
of the Lenders (the "Deposit Account"). So long as no Default or Event of
Default shall exist, any Casualty Proceeds in the Deposit Account shall be
remitted promptly to Borrower for reimbursement to the Borrower from time to
time during the course of the Borrower's restoration of the Mortgaged Property
and compliance with the provisions of SECTION 3.6(d) and SECTION 3.3 and to fund
the payment of Interest accruing on the Loan Balance, Required Prepayments and
the payment of Fees accruing during such period. The Borrower and the Collateral
Agent shall, prior to any deposit contemplated by this SECTION 3.6 in the
Deposit Account, and thereafter from time to time as reasonably be requested by
the Collateral Agent, take any and all actions (including, without limitation,
the execution of such security and other agreements and UCC financing statements
as the Collateral Agent shall reasonably request) reasonably requested by the
Collateral Agent in order to grant to the Collateral Agent (on behalf of the
Lenders) a first priority perfected Lien on and security interest in the Deposit
Account and any and all amounts and other property from time to time on deposit
therein.

         Section 3.7. Insurance Coverages. Borrower shall at all times during
the Loan Term, at its expense, cause to be carried and maintained with
financially sound and reputable insurers, insurance against loss or damage to or
arising from the Mortgaged Property, of the kinds and in the amounts customarily
maintained (i) by Giant Industries and its Subsidiaries under Giant Industries'
and its Subsidiaries' risk management program, in effect as of the Closing Date
for equipment owned or leased by Giant Industries and its Subsidiaries similar
to the Mortgaged Property and (ii) by prudent corporations in similar
circumstances carrying on similar businesses, provided that in any event
Borrower will maintain:

                  (a) "All Risk" Property Insurance -- providing coverage
         against all risks of physical loss or damage to the Mortgaged Property
         including, without limitation, earthquake, flood, windstorm and boiler
         and machinery coverages. Such policy shall be on a replacement cost
         basis with a limit of not less than $250,000,000 each occurrence,
         including without limitation stock and finished product, provide
         coverage on a replacement cost basis, and contain deductibles
         customarily maintained by prudent corporations in similar circumstances
         subject to a maximum deductible of $2,000,000, except for windstorm
         which shall be 2% of the total insured values. At no time shall the
         amount of coverage be less than the sum of (x) the outstanding Loan
         Balance and (y) an amount equal to the aggregate amount of Interest to
         be accrued under this Loan Agreement for 90 days following the date of
         determination; Terrorism shall be procured in such amount and scope as
         is commercially available on reasonable terms. Said policy shall
         include (i) off-site storage and inland transit coverage with a limit
         of $1,000,000 or such higher amount as is to cover the values at risk,
         (ii) demolition and debris removal with a sublimit of $5,000,000, (iii)
         Pollution Clean-up and Removal with a sublimit of $500,000, (v)
         building ordinance with a sublimit of $10,000,000, (vi) expediting
         expenses with a sublimit of $1,000,000 and (iv) valuable records,
         papers and media coverage with a sublimit of $5,000,000.


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Giant Yorktown, Inc.                                              Loan Agreement

                  (b) Business Interruption Insurance -- (as a separate policy
         or as an extension of the "All Risk" Property Insurance policy) with
         limits sufficient to cover 12 months of fixed and continuing expenses
         including without limit Required Prepayments and Interest. Such
         insurance shall include extensions of coverage for (i) ingress and
         egress, (ii) interruption by civil or military authority and (iii)
         customers/suppliers. Waiting period deductibles shall not exceed 60
         days each occurrence.

                  (c) Commercial General Liability Insurance -- written on an
         occurrence basis for claims arising from the Borrower's operations with
         a combined single limit of liability for bodily injury, including
         death, property damage and personal injury in an amount at least equal
         to $3,000,000 per occurrence and in the aggregate. Said coverage shall
         include premises/operations, explosion, collapse and underground
         hazards, products/completed operations, broad form property damage,
         blanket contractual liability and sudden and accidental pollution.
         Severability of insureds and cross liability endorsements. Deductibles
         shall be consistent with industry practice and Borrower's risk
         management practice subject to a maximum deductible of $500,000.

                  (d) Automobile Liability Insurance -- including coverage for
         all owned, hired, non-owned, leased and rented vehicles with combined
         single limit of liability for bodily injury and property damage of
         $1,000,000 per accident.

                  (e) Workers' Compensation Insurance -- if the Borrower has any
         employees, workers' compensation insurance providing coverage as
         required by law including coverage under the United States
         Longshoreman's & Harbor Workers' Act and the Jones Act (including
         transportation, maintenance and cure).

                  (f) Employer's Liability Insurance -- if the Borrower has any
         employees, employer's liability insurance for the Borrower's liability
         arising out of injury to or death of employees of the Borrower in the
         amount of $1,000,000 per accident.

                  (g) Umbrella/Excess Liability Insurance -- with limits not
         less than $100,000,000 per occurrence and in the aggregate. Such
         coverage shall be on an occurrence basis and provide (i) follow form
         coverage excess of the insurance required in (c), (d) and (f) above,
         (ii) drop down to provide primary coverage in the event the underlying
         coverage is reduced/exhausted and (iii) provide that if such limits are
         reduced below the Loan Balance by claims not related to the operations
         of the Mortgaged Property, the Borrower shall, if available on
         commercially reasonable terms, repurchase limits necessary to comply
         with this SECTION 3.7(g).

                  (h) Marine Liability Insurance (as applicable) -- including
         without limit, watercraft liability, protection and indemnity,
         wharfinger's liability/landing dock bailee's liability and charter's
         legal liability with limits not less than $50,000,000. Coverage may be
         provided on a stand-alone basis or as a part of the coverages required
         in (c) and (g) above.


                                      -35-

Giant Yorktown, Inc.                                              Loan Agreement

                  (i) Pollution Legal Liability Insurance -- in an amount of
         $50,000,000 inclusive of defense costs. Such coverage shall apply to
         cleanup or remediation costs off site for conditions or releases of
         pollutants occurring from the Mortgaged Property as well as contingent
         liability arising from the from the transportation of pollutants.
         Deductibles shall not exceed $1,000,000 each loss.

                  (j) Other Insurance -- such other insurance in such amounts
         and against such risks as are customarily maintained by prudent
         corporations in similar circumstances carrying on similar businesses,
         including, self-insurance to the extent customarily maintained by
         prudent corporations in similar circumstances carrying on similar
         businesses.

         Section 3.8. General Requirements. All insurance required by Borrower
shall comply with the following general requirements:

                  (a) All insurance shall be written by reputable insurance
         companies that are financially sound and solvent, rated in Best's
         Insurance Guide or any successor thereto (or if there be none, an
         organization having a similar national reputation) with a general
         policyholder rating of "A" and a financial rating of at least "X" or
         otherwise reasonably acceptable to Borrower and Collateral Agent.

                  (b) With the exception of the coverage required in (e) and (f)
         above, all such insurance shall name the Collateral Agent and the
         Lenders as additional insureds or as lender loss-payees, as their
         respective interests may appear.

                  (c) Each policy referred to in SECTION 3.7 shall provide that
         (i) it will not be cancelled, or allowed to lapse without renewal,
         except after not less than 45 days' prior written notice to the
         Collateral Agent and the Lenders; (ii) the interests of the Collateral
         Agent and the Lenders shall not be invalidated or otherwise compromised
         by any act or negligence of, or breach of representation or warranty
         by, Borrower or any Person having an interest in the Mortgaged Property
         and (iii) such insurance is primary with respect to any other insurance
         carried by or available to the Collateral Agent and/or any Lender.

                  (d) All insurers shall waive their rights of subrogation,
         setoff, counterclaim, or other deduction, whether by attachment or
         otherwise, against the Collateral Agent and the Lenders and further the
         insurer shall waive any right to claim any premiums due or commission
         payable against the Collateral Agent or any Lender.

                  (e) All policies shall contain a cross-liability clause
         providing for coverage of each Lender as if separate policies had been
         issued to each of them.

                  (f) Borrower will notify the Collateral Agent and the Lenders
         promptly of any policy cancellation, reduction in policy limits, or of
         any modification or amendment which could adversely affect the
         Collateral Agent or the Lenders.


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Giant Yorktown, Inc.                                              Loan Agreement

         Section 3.9. Insurance Certificates. Prior to the Closing Date, and
thereafter not less than 15 days prior to the termination dates of the expiring
policies theretofore delivered pursuant to SECTION 3.7, Borrower shall deliver
to Collateral Agent and the Lenders certificates issued by the insurer(s) or
their authorized representatives for the insurance maintained pursuant to
SECTION 3.7. Upon the request of Collateral Agent or the Required Lenders,
Borrower will furnish to Collateral Agent and the Lenders a certificate of an
independent insurance broker of recognized standing evidencing the maintenance
of all insurance required hereunder.

         Section 3.10. No Duty to Verify or Review. No provision of this SECTION
3 shall impose on Collateral Agent or Lenders any duty or obligation to verify
the existence or adequacy of the insurance coverage maintained by the Borrower,
nor shall Collateral Agent or Lenders be responsible for any representations or
warranties made by or on behalf of the Borrower to any insurance company or
underwriter. Any failure on the part of Collateral Agent or Lenders to pursue or
obtain the evidence of insurance required by this Section from the Borrower
and/or failure of Collateral Agent or Lenders to point out any non-compliance of
such evidence of insurance shall not constitute a waiver of any of the insurance
requirements in this Section.

         Section 3.11. Commercial Unavailability. In the event, should any of
the coverages required in this SECTION 3 become commercially unavailable on
reasonable terms, the Borrower will notify the Collateral Agent of the coverages
affected and request a waiver of the same and provide the Collateral Agent with
a proposed remedy, such waiver shall not be unreasonably denied by the
Collateral Agent and the Lenders.

SECTION 4. COMMITMENTS; INTEREST; PREPAYMENTS; FEES.

         Section 4.1. Loans. Subject to the terms and conditions hereof, each
Lender severally agrees, on the Closing Date, to make a loan (individually a
"Loan" and collectively the "Loans") to Borrower in an amount equal to such
Lender's Commitment Percentage of the aggregate Loans requested by Borrower in
the Closing Notice; provided, however, that the Loan made by each Lender under
this Loan Agreement shall not exceed such Lender's Commitment.

         Section 4.2. Notes. The Loans made by each Lender shall be evidenced by
a promissory note or notes of Borrower substantially in the form of EXHIBIT A
(each as it may be amended or replaced from time to time, each a "Note" and,
collectively, the "Notes"), with appropriate insertions as to date and principal
amount, payable to the order of such Lender. Each Lender is hereby authorized to
record the date and amount of the Loan made by such Lender, each continuation
thereof and the date and amount of each payment or prepayment of principal
thereof, on the schedule annexed thereto, which schedule shall constitute a part
of any such Note, and any such recordation shall constitute prima facie evidence
of the accuracy of the information so recorded absent manifest error; provided,
that the failure to make any such recordation or any error in such recordation
shall not affect Borrower's obligations hereunder or under such Note. The Notes
shall (i) be dated the Closing Date, (ii) be stated to mature on the Maturity
Date and (iii) provide for the payment of principal and interest in accordance
with this Loan Agreement.

         Section 4.3. Scheduled Payments of Principal; Mandatory Prepayments.
(a) Borrower shall pay to the Collateral Agent for the pro rata benefit of the
Lenders the Required


                                      -37-


Giant Yorktown, Inc.                                              Loan Agreement

Prepayments, such payments to be due on each Payment Date in the amounts set
forth on SCHEDULE IIB hereto.

         (b) Borrower shall pay the unpaid principal amount of the Loans, in
full, together with (i) Interest accrued thereon to the date of payment, and
(ii) all other amounts then due and payable by Borrower hereunder or under the
other Operative Documents to the Lenders, including, without limitation, any
Applicable Administrative Charge, on the Maturity Date.

         (c) Upon the occurrence of a Partial Casualty with respect to a portion
of the Mortgaged Property that is not replaced pursuant to SECTION 3.6 hereof,
Borrower shall pay to each Lender its pro rata portion of the Partial Casualty
Amount of such Mortgaged Property, such payment to be due on the date specified
for payment with respect to such Partial Casualty in SECTION 3.6 hereof.

         (d) Upon the occurrence of a Total Casualty, Borrower shall pay to each
Lender its pro rata portion of the Total Casualty Amount, such return to be due
on the date specified for payment with respect to such termination in SECTION
3.6(a) hereof.

         Section 4.4. Interest Rates and Payment Dates. (a) Each Loan shall bear
Interest on the Loan Balance thereof.

         (b) If all or a portion of the principal amount of, or accrued Interest
on, any Loan, or any other amount payable hereunder, shall not be paid when due
(whether at the stated maturity, by acceleration or otherwise), such overdue
amount shall, without limiting the rights of the Lenders under any Operative
Document, bear interest at the rate per annum which is 2% above the applicable
Interest Rate in effect from time to time (the "Overdue Rate"), in each case
from the date due until payment is made. Such overdue interest shall be payable
on demand. Notwithstanding anything to the contrary set forth herein, including,
without limitation, in the definition of the term Interest Rate or in SECTION
4.7, at no time shall interest accrue on the Loans at a per annum rate which
exceeds the Adjusted LIBO Rate or the Base Rate, as the case may be, plus 2.00%.

         (c) Interest on each Loan shall be payable in arrears on each Payment
Date, the Maturity Date and on any other day on which the Loan Balance, or a
portion thereof, is to be reduced pursuant to the terms and conditions of this
Loan Agreement and the other Operative Documents.

         Section 4.5. Pro Rata Treatment and Payments. Each payment (including
each prepayment) by Borrower on account of principal of and Interest on the
Loans shall be made pro rata among the Lenders according to the respective
outstanding principal amounts of the Loans then held by each such Lender.
Subject to SECTIONS 4.10 and 4.11, all payments (including prepayments) to be
made by Borrower hereunder and under the Notes, whether on account of principal,
Interest or otherwise, shall be made without setoff or counterclaim and shall be
made by Borrower to Collateral Agent, for the benefit of the Lenders, prior to
12:00 noon, New York City time, to Collateral Agent's Payment Office (or to such
other office as may be designated by Collateral Agent from time to time in a
written notice pursuant to SECTION 12.6) in funds


                                      -38-

Giant Yorktown, Inc.                                              Loan Agreement

consisting of lawful currency of the United States of America which shall be
immediately available on the scheduled date when such payment is due. Payments
received after 12:00 noon, New York City time, on the date due shall be deemed
received on the next succeeding Business Day and shall be subject to interest at
the Overdue Rate as provided in SECTION 4.4(b).

         Section 4.6. Mutilated, Destroyed, Lost or Stolen Notes. (a) If any
Note shall become mutilated, destroyed, lost or stolen, then upon the written
request of the affected Lender, Borrower shall execute and deliver to the
affected Lender a new Note. Such new Note shall be: (i) recorded in the name in
which such mutilated, destroyed, lost or stolen Note was recorded; (ii) in the
same original face amount as such mutilated, destroyed, lost or stolen Note; and
(iii) dated the date of such mutilated, destroyed, lost or stolen Note. If the
Note being replaced has become mutilated, it shall be surrendered to Borrower.
If the Note being replaced has been destroyed, lost or stolen, the affected
Lender shall furnish to Borrower such security or indemnity as reasonably may be
required by it to save Borrower harmless from any loss and evidence satisfactory
to Borrower of the destruction, loss or theft of such Note and the ownership
thereof. Upon request, the Collateral Agent shall advise the affected Lender of:
(i) the aggregate principal amount of, and the aggregate accrued Interest on,
such mutilated, destroyed, lost or stolen Note that were paid to any Lender
thereof at any time prior to the delivery of such new Note; and (ii) the date to
which Interest on such mutilated, destroyed, lost or stolen Note had been paid
to any Lender thereof at the time of such delivery.

         (b) Any duplicate Note issued pursuant to this SECTION 4.6 shall
constitute complete and indefeasible evidence of ownership of such Note, as if
originally issued, whether or not the lost, stolen or destroyed Note shall be
found at any time.

         Section 4.7. Computations; Interest Rate Determination; Conclusive
Determinations.

         (a) Computations. All computations of interest at the Base Rate shall
be made on the basis of a year of 365 or 366 days, as the case may be, and
actual days elapsed. All other computations of accrued amounts pursuant to the
Operative Documents shall be made on the basis of actual number of days elapsed
in a 360-day year with respect to any determination. Borrower shall, as soon as
practicable, but in no event later than 12:00 noon New York time, one Business
Day prior to the effectiveness of each Interest Rate, calculate such Interest
Rate and notify Collateral Agent and each Lender thereof; provided that the
failure to give or receive any such notice shall not limit Borrower's
obligations under this Loan Agreement or any other Operative Document.

         (b) Interest Rate Determination. So long as no Default or Event of
Default shall have occurred and be continuing, the Borrower may, by irrevocable
written notice delivered to the Collateral Agent and each of the Lenders at
least five Business Days prior to the initial day of an Interest Period, specify
whether the Interest Rate to be applied during such Interest Period shall be the
Adjusted LIBO Rate or the Base Rate. If the Collateral Agent and each of the
Lenders shall not have received such written notice, the Borrower shall be
deemed to have selected a rate per annum equal to the Base Rate. Notwithstanding
the foregoing, if a Default or Event of Default shall exist at time such
selection is to be made, the applicable Interest Rate specified by the Borrower
for such Interest Period shall be deemed to be the Base Rate plus 2.00%.


                                      -39-

Giant Yorktown, Inc.                                              Loan Agreement

         (c) Conclusive Determinations. Each determination of the Interest Rate
pursuant to any provisions of this Loan Agreement or any of the other Operative
Documents shall be conclusive and binding on Borrower and the Lenders in the
absence of manifest error.

         Section 4.8. Highest Lawful Rate. It is the intention of the parties
hereto to conform strictly to applicable usury laws and, anything herein to the
contrary notwithstanding, the obligations of Borrower to the Lenders under this
Loan Agreement and the Notes shall be subject to the limitation that payments of
interest or of other amounts constituting interest under any Requirement of Law
shall not be required to the extent that receipt thereof would be in excess of
the Highest Lawful Rate, or otherwise contrary to provisions of law applicable
to the recipient limiting rates of interest which may be charged or collected by
the recipient. Accordingly, if the transactions or the amount paid or otherwise
agreed to be paid for the use, forbearance or detention of money under this Loan
Agreement, the Notes or any other Operative Document would exceed the Highest
Lawful Rate or otherwise be usurious under any Requirement of Law (including
without limitation the federal and state laws of the United States of America,
or of any other jurisdiction whose laws may be mandatorily applicable) with
respect to the recipient of any such amount, then, in that event,
notwithstanding anything to the contrary in this Loan Agreement, the Notes or
any other Operative Document, it is agreed as follows as to the recipient of any
such amount:

                  (i) the provisions of this SECTION 4.8 shall govern and
         control over any other provision in this Loan Agreement, the Notes and
         any other Operative Document, and each provision set forth therein is
         hereby so limited;

                  (ii) the aggregate of all consideration which constitutes
         interest under any Requirement of Law that is contracted for, charged
         or received under this Loan Agreement, the Notes or any other Operative
         Document shall under no circumstances exceed the maximum amount of
         interest allowed by such Requirement of Law (such maximum lawful
         interest rate, if any, with respect to such recipient herein called the
         "Highest Lawful Rate"), and all amounts owed under this Loan Agreement,
         the Notes and any other Operative Document shall be held subject to
         reduction and: (A) the amount of interest which would otherwise be
         payable to the recipient hereunder and under the Notes and any other
         Operative Document shall be automatically reduced to the amount allowed
         under such Requirement of Law, and (B) any unearned interest paid in
         excess of the Highest Lawful Rate shall be credited to the payor by the
         recipient (or, if such consideration shall have been paid in full,
         refunded to the payor);

                  (iii) all sums paid, or agreed to be paid for the use,
         forbearance and detention of the money under this Loan Agreement, the
         Notes or any other Operative Document shall, to the extent permitted by
         any Requirement of Law, be amortized, prorated, allocated and spread
         throughout the full term of such indebtedness until payment in full so
         that the actual rate of interest is uniform throughout the full term
         thereof; and

                  (iv) if at any time the interest, together with any other
         fees, late charges and other sums payable pursuant to or in connection
         with this Loan Agreement, the Notes and any other Operative Document
         executed in connection herewith or therewith and deemed


                                      -40-

Giant Yorktown, Inc.                                              Loan Agreement

         interest under any Requirement of Law, exceeds that amount which would
         have accrued at the Highest Lawful Rate, the amount of interest and any
         such fees, charges and sums to accrue to the recipient of such
         interest, fees, charges and sums pursuant to the Operative Documents
         shall be limited, notwithstanding anything to the contrary in the
         Operative Documents, to that amount which would have accrued at the
         Highest Lawful Rate for the recipient, but any subsequent reductions,
         as applicable, shall not reduce the interest to accrue pursuant to the
         Operative Documents below the recipient's Highest Lawful Rate until the
         total amount of interest payable to the recipient (including all
         consideration which constitutes interest) equals the amount of interest
         which would have been payable to the recipient (including all
         consideration which constitutes interest), plus the amount of fees
         which would have been received but for the effect of this SECTION 4.8.

         Section 4.9. Fees. (a) Borrower agrees to pay the fees set forth below
(collectively, the "Fees") on or prior to the Closing Date:

                  (i) to each Lender, for its own account, a fee in an amount
         equal to 0.75% times its Commitment (a "Commitment Fee");

                  (ii) to Trust Company, for its own account, the fees set forth
         in the Collateral Agent Fee Letter, payable in the amounts and on the
         dates set forth therein; and

                  (iii) to Arranger, the Arrangement Fee.

         (b) Borrower agrees to pay to the Arranger the Supplemental
Underwriting Fee in the amount and on the dates set forth in the Arrangement Fee
Letter.

         Section 4.10. Adjustments. If any Lender (a "Benefited Lender") shall
at any time receive any payment of all or part of its Loan Balance, or Interest
thereon, or receive any of the collateral in respect thereof (whether
voluntarily or involuntarily, by setoff, or otherwise), in an amount greater
than the amount to which such Lender was entitled pursuant to this Loan
Agreement, such benefitted Lender shall return such amount or collateral to the
Collateral Agent for distribution to the Person(s) entitled thereto in
accordance with this Loan Agreement; provided, however, that if all or any
portion of such excess payment or benefits is thereafter recovered from such
Benefited Lender so that the excess payment or benefits returned by such
Benefited Lender exceed the remaining excess payment or benefits held by such
Benefited Lender, the excess payment or benefits, as applicable, returned by
such Benefited Lender shall be restored to the Benefited Lender, to the extent
of such recovery, but without interest.

         Section 4.11. Payments and Distributions. All payments to be made by
Borrower hereunder, and all payments due and payable to the Lenders pursuant to
any other Operative Document, shall be distributed by Collateral Agent as
follows: pro rata, and in case moneys are insufficient to pay in full the whole
amount due, owing or unpaid to the Lenders, then application shall be made first
to any unpaid accrued Interest, second to any Supplemental Payments and third to
the Loan Balances. Any Supplemental Payments received by Collateral Agent shall
be paid by Collateral Agent to the Person to whom such Supplemental Payments are
payable under the provisions of the Operative Documents.


                                      -41-



Giant Yorktown, Inc.                                              Loan Agreement



SECTION 5. OPTIONAL PREPAYMENTS BY BORROWER.

         On any Payment Date occurring after the one year anniversary of the
Closing Date, upon at least 90 days' advance written notice from Borrower to
Collateral Agent and the Lenders, Borrower may prepay (the "Prepayment Option")
all but not less than all of the Loans for a purchase price equal to the Payoff
Amount.

SECTION 6. [INTENTIONALLY OMITTED].

SECTION 7. CONDITIONS PRECEDENT TO THE LOAN.

         Subject to the SECTION 12.18, the obligation of each Lender to make its
Loan hereunder on the Closing Date shall be subject to the fulfillment to the
satisfaction of (including, with respect to writings, such writings being in
form and substance reasonably satisfactory to Collateral Agent and each Lender),
or the waiver in writing by Collateral Agent and each Lender, of the conditions
precedent set forth in this SECTION 7 on or prior to the Closing Date:

     Section 7.1. Closing Notice. Borrower shall have delivered to Collateral
Agent and each Lender, not later than 12:00 noon, New York time, not earlier
than the tenth (10th) and not later than one Business Day prior to the Closing
Date, an irrevocable notice substantially in the form of EXHIBIT D (a "Closing
Notice"), setting forth (i) the amount of the Loans being requested, (ii) a
description of the Mortgaged Property to be purchased on the Closing Date, (iii)
the Mortgaged Property Purchase Price and (iv) wire transfer instructions for
the disbursement of funds.

     Section 7.2. [Reserved].

     Section 7.3. Operative Documents. On or prior to the Closing Date, the
Lenders and Collateral Agent shall have received a fully executed counterpart of
this Loan Agreement, the Deed of Trust, the Parent Guaranty, the Constituent
Companies Guaranty and each of the other Operative Documents, each of which
shall have been duly authorized, executed and delivered by each of the parties
thereto.

     Section 7.4. Notes. Each Lender shall have received from Borrower a Note
duly executed by Borrower and registered in such Lender's name evidencing such
Lender's Loan.

     Section 7.5. Representations and Warranties True; Absence of Defaults. Each
of the representations and warranties made by or on behalf of Borrower or any
Guarantor under the Operative Documents shall be true in all material respects
on and as of the Closing Date, and no Default, Event of Default hereunder or
event of default under the Giant Industries Credit Agreement shall have occurred
and be continuing.

     Section 7.6. Consents and Approvals. Borrower and each Guarantor shall have
obtained all material governmental, shareholder and third party consents and
approvals necessary in connection with the transactions contemplated by the
execution, delivery and performance of this


                                      -42-

Giant Yorktown, Inc.                                              Loan Agreement


Loan Agreement and the other Operative Documents, the other transactions
contemplated hereby and the continuing operations of Giant Industries and its
Subsidiaries and each Guarantor following the Closing Date.

     Section 7.7. Filings and Recordings. (a) Collateral Agent shall have
received from Borrower UCC financing statements, including fixture filings,
identifying the Borrower as debtor and Deed of Trust Trustee for the benefit of
the Collateral Agent as secured party for the benefit of the Lenders, and
describing the Mortgaged Property and Personal Property (as defined in the Deed
of Trust) as the collateral and such financing statements shall have been filed
or shall be filed in each applicable jurisdiction.

         (b)      All filings of the Operative Documents, including, without
limitation, this Loan Agreement, the Deed of Trust, and the Deed, reasonably
deemed necessary by Collateral Agent, to perfect the rights, titles and
interests of the Lenders, the Deed of Trust Trustee and the Collateral Agent
intended to be created by the Operative Documents shall have been made in the
appropriate places or offices, including any recordings and filings necessary to
create, perfect, preserve and protect the first priority liens for the benefit
of Collateral Agent, the Deed of Trust Trustee and the Lenders on the Mortgaged
Property.

     Section 7.8. Payment of Impositions. All Taxes payable on or prior to the
Closing Date in connection with the execution, delivery, recording or filing of
any of the Operative Documents, in connection with the filing of any of the
financing statements and any other documents, in connection with the
consummation of any other transactions contemplated hereby or by any of the
other Operative Documents, shall have been paid in full by Borrower.

     Section 7.9. Transaction Costs; Fees. Borrower shall have paid to
Collateral Agent, for the benefit of the Collateral Agent and the Lenders, any
Transaction Costs due, invoiced and not previously paid (other than those
directed to be paid pursuant to the Closing Notice). Such payment shall be made
by wire transfer of immediately available funds to the account specified for the
person to whom payment is due. On or prior to the Closing Date, Borrower shall
also have paid to the applicable parties all Fees due and payable on or prior to
the Closing Date pursuant to SECTION 4.9 hereof.

     Section 7.10. Opinions of Counsel. (a) Collateral Agent, Lenders and their
respective counsel shall have received,

                           (i)      a legal opinion of Fennemore Craig, special
                  counsel to Borrower and each Guarantor, in substantially the
                  form of EXHIBIT C-1,

                           (ii)     a legal opinion of Kim Bullerdick, Esq.,
                  General Counsel to Borrower and each Guarantor, in
                  substantially the form of EXHIBIT C-2, and

                           (iii)    a legal opinion of McGuireWoods LLP, New
                  York and Virginia special counsel to Borrower and each
                  Guarantor, in substantially the form of EXHIBIT C-3.


                                      -43-

Giant Yorktown, Inc.                                              Loan Agreement


                  (b)      By its execution hereof, Borrower expressly instructs
         each such counsel to execute and deliver such opinions to the Persons
         designated in the preceding sentences.

     Section 7.11. Corporate Status and Proceedings. Collateral Agent shall have
received:

                  (a)      certificates of existence and good standing with
         respect to Borrower and each Guarantor from the Secretary of State of
         the State of its incorporation or formation, as the case may be, and
         with respect to Borrower, from the Secretary of State in which the
         Mortgaged Property is located, in each case, dated no earlier than the
         15th day prior to the Closing Date;

                  (b)      an Officer's Certificate of Borrower substantially in
         the form of EXHIBIT E-1, dated the Closing Date, with respect to
         representations and warranties and absence of defaults;

                  (c)      a Certificate of the Secretary or Assistant Secretary
         of Borrower substantially in the form of EXHIBIT E-2, dated the Closing
         Date, with respect to Borrower's governing documents, resolutions and
         incumbent officers;

                  (d)      an Officer's Certificate of each Guarantor
         substantially in the form of EXHIBIT E-3, dated the Closing Date, with
         respect to representations and warranties and absence of defaults;

                  (e)      a Certificate of the Secretary or Assistant Secretary
         of each Guarantor substantially in the form of EXHIBIT E-4, dated the
         Closing Date, with respect to such Guarantor's governing documents,
         resolutions and incumbent officers; and

                  (f)      a Certificate of the Trust Company with respect to
         the Trust Company's governing documents, resolutions and incumbent
         officers.

     Section 7.12. Financial Statements. The Collateral Agent and Lenders shall
have received (1) pro forma consolidated and consolidating financial statements
for Giant Industries and its subsidiaries, including a pro forma balance sheet
of Giant Industries and its subsidiaries after giving effect to the Yorktown
Acquisition and (2) audited consolidated financial statements of Giant
Industries and the Yorktown Refinery of BP Corporation North America, in each
case, for the fiscal year ended December 31, 2001, which statements shall not be
materially different from the unaudited financial statements previously
delivered to the Collateral Agent and the Lenders by Giant Industries.

     Section 7.13. Material Adverse Effect. Since December 31, 2001, nothing
shall have occurred which has, or could reasonably be expected to have, a
Material Adverse Effect.

     Section 7.14. Litigation. No action or proceeding shall have been
instituted or threatened, nor shall any Governmental Action be instituted or
threatened before any Governmental Authority, nor shall any order, judgment or
decree have been issued or proposed to be issued by any Governmental Authority,
to set aside, restrain, enjoin or prevent the


                                      -44-

Giant Yorktown, Inc.                                              Loan Agreement


performance of this Loan Agreement or any transaction contemplated hereby or by
any other Operative Document, which could be reasonably expected to have a
Material Adverse Effect.

     Section 7.15. Bill of Sale. Yorktown Seller shall have executed and
delivered to the Borrower a bill of sale (the "Bill of Sale") with respect to
the Mortgaged Property to be sold by it to the Borrower on the Closing Date.

     Section 7.16. [Reserved].

     Section 7.17. Deed. Collateral Agent and each Lender shall have received a
copy of the Deed which shall have been duly authorized, executed and delivered
by each of the parties thereto.

     Section 7.18. Search Reports. Collateral Agent shall have received reports
acceptable to Collateral Agent and counsel to the Lenders as to Borrower and the
Mortgaged Property from each appropriate state and county filing or recording
office, each dated as close to the Closing Date as practicable, in respect of a
search of the applicable files and any indices of Liens maintained by such
offices (including, if applicable, indices of judgment, revenue and tax liens),
which search reports shall evidence Yorktown Seller's ownership of the Mortgaged
Property to be delivered on the Closing Date free and clear of all Liens (other
than Permitted Encumbrances), including, but not limited to any Lien as a result
of any right, claim or interest in favor of any party owning or holding any
interest in the real estate on which such Mortgaged Property is located.

     Section 7.19. Appraisal. At least five (5) Business Days prior to the
Closing Date, Collateral Agent and each Lender shall have received an Appraisal
(using appraisal methods satisfactory to Lenders), which Appraisal shall have
established a Fair Market Value for the Mortgaged Property in an amount such
that the Aggregate Commitment Amount is not more than 50% of the Fair Market
Value of the Mortgaged Property.

     Section 7.20. Insurance. Collateral Agent shall have received a current
certificate to the effect that insurance complying with SECTION 3.7 of this Loan
Agreement is in full force and effect, and there shall be no past due premiums
in respect of any such insurance.

     Section 7.21. No Casualty. No Casualty shall have occurred with respect to
any material portion of the Mortgaged Property.

     Section 7.22. Environmental Report. The Collateral Agent shall have
received:

                  (a)      an Environmental Audit of the Site satisfactory to
         the Lenders, and

                  (b)      either (i) a certification from a registered engineer
         or surveyor that the portion of the Site on which any improvements are
         or will be situated is not in a flood plain or designated as flood
         prone by any governmental body or (ii) evidence reasonably satisfactory
         to the Collateral Agent and the Lenders of appropriate flood insurance.


                                      -45-

Giant Yorktown, Inc.                                              Loan Agreement


     Section 7.23. Survey. Collateral Agent shall have received a survey of the
Mortgaged Property in a form satisfactory to the Lenders and the Title Insurance
Company.

     Section 7.24. Title and Title Insurance. Collateral Agent shall have
received from the Title Insurance Company an ALTA 1970 loan policy of title
insurance (the "Title Policy"), insuring the Lien of the Deed of Trust as a
valid first priority Lien against the Mortgaged Property, subject only to
Permitted Encumbrances and other matters acceptable to the Lenders. The Title
Policy shall: (i) be accompanied by complete, legible copies of all encumbrances
and plats of record, (ii) be dated as of the Closing Date, (iii) be in form and
substance acceptable to Lenders, and (iv) to the extent permitted under
Requirements of Laws, contain affirmative endorsements as to doing business,
usury, comprehensive coverage, access, survey and such other endorsements
reasonably requested by Lenders.

     Section 7.25. Mortgaged Property Acquisition/Operation. Collateral Agent
shall have received:

                  (a)      a true and complete copy of the Yorktown Acquisition
         Documents evidencing the purchase of the Mortgaged Property by the
         Borrower for a purchase price of not more than $127,500,000 plus
         inventories plus earn-out consideration payable in the future based
         upon the Mortgaged Property's operations in form and substance
         satisfactory to Collateral Agent and the Lenders, including without
         limitation, environmental indemnification provisions covering the
         Borrower and its Subsidiaries satisfactory to the Collateral Agent and
         the Lenders,

                  (b)      a true and complete copy of all governmental,
         shareholder and third party consents and approvals necessary or
         desirable in connection with the Yorktown Acquisition which consents
         and approvals shall be in force and effect and for which all applicable
         waiting periods shall have expired without any action being taken by
         any Governmental Authority that could reasonably be expected to
         restrain, prevent or otherwise impose any material adverse conditions
         on the Yorktown Acquisition or that could seek to threaten it, and no
         law or regulation shall be applicable which in the judgment of the
         Lenders or the Collateral Agent could have such effect,

                  (c)      a copy, certified as true and complete, of Material
         Contracts relating to the development, management, leasing or operation
         of the Mortgaged Property, and

                  (d)      a copy, certified as true and complete, of all
         material building and other permits, licenses, leases, franchises,
         agreements and authorizations currently required in connection with the
         use of the Mortgaged Property.

     Section 7.26. Giant Industries Credit Agreement. Collateral Agent shall
have received:

                  (a)      a true and complete copy of the Giant Industries
         Credit Agreement which shall be in full force and effect,


                                      -46-

Giant Yorktown, Inc.                                              Loan Agreement


                  (b)      a Responsible Officer's Certificate of Giant
         Industries evidencing that the minimum excess "Availability" under the
         Giant Industries Credit Agreement after giving pro forma effect to the
         transactions on the Closing Date is not less than $20,000,000, and

                  (c)      a true and complete copy of a written agreement by
         the lenders under the Giant Industries Credit Agreement in favor of the
         Collateral Agent confirming that no lien or security interest granted
         in connection with the Giant Industries Credit Agreement attaches to or
         affects the Mortgaged Property.

     Section 7.27. Subordinated Debt. Collateral Agent shall have received a
Responsible Officer's Certificate of Giant Industries evidencing compliance with
each covenant which limits the ability of Giant Industries to incur indebtedness
under Subordinated Documents after giving pro forma effect to the transactions
on the Closing Date.

     Section 7.28. Lender Approval. (a) The transactions contemplated by the
execution, delivery and performance of this Loan Agreement and the other
Operative Documents and the other transactions contemplated hereby shall have
been approved by the Lenders and the Collateral Agent, and

         (b)      the Lenders' due diligence relating to the Mortgaged Property
(including, without limitation, review of environmental matters) shall have been
completed, with results satisfactory to the Lenders.

     Section 7.29. Deposit of Funds for Payment of NBD Subordinated Notes. The
Escrow Arrangement shall be in place, and funds shall have been irrevocably
deposited pursuant thereto in an amount sufficient to redeem the NBD
Subordinated Notes in full.

     Section 7.30. Proceedings Satisfactory, Etc. All proceedings taken in
connection with the Closing Date and all documents relating thereto shall be
reasonably satisfactory to Collateral Agent, each Lender and their respective
counsel, and each such Person shall have received copies of such documents as
they may reasonably request in connection therewith, all in form and substance
reasonably satisfactory to each such Person.

SECTION 8. EVENTS OF DEFAULT AND REMEDIES.

     Section 8.1. Defaults. Any one or more of the following shall constitute an
"Event of Default":

                  (a)      Non-Payment. Borrower fails to pay (i) when and as
         required to be paid herein, any payment of Loan Balance, or (ii) within
         two (2) Business Days after the same becomes due, any Interest (other
         than payments of Loan Balance) or any other payment payable by Borrower
         hereunder to a party to this Loan Agreement or under any other
         Operative Document to a party to such other Operative Document
         (including without limitation, any amount payable pursuant to SECTION
         11); or


                                      -47-

Giant Yorktown, Inc.                                              Loan Agreement


                  (b)      Representation or Warranty. Any representation or
         warranty by Borrower or Giant Industries or any Subsidiary of Giant
         Industries made or deemed made herein, in any other Operative Document,
         or which is contained in any certificate, document or financial or
         other statement by Borrower, Giant Industries, any Subsidiary of Giant
         Industries, or any Responsible Officer, furnished at any time under
         this Loan Agreement, or in or under any other Operative Document, is
         incorrect in any material respect on or as of the date made or deemed
         made; or

                  (c)      Specific Defaults. Giant Industries or Borrower, as
         the case may be, (i) fails to perform or observe any term, covenant or
         agreement contained in Section 6(c)(i), 6(n), 6(r), 6A(l), 6A(m), 6A(n)
         or 6A(o) of the Parent Guaranty or SECTION 3.2, 3.5, 3.7 or SECTION 5
         of this Loan Agreement; or (ii) fails to perform or observe any term,
         covenant or agreement contained in Section 6A of the Parent Guaranty
         (which is not specified in the foregoing clause (c)(i)), and such
         default shall continue unremedied for a period of 15 days after the
         occurrence thereof; or

                  (d)      Other Defaults. Borrower or Giant Industries or any
         Subsidiary fails to perform or observe any other term or covenant
         contained in this Loan Agreement or any other Operative Document, and
         such default shall continue unremedied for a period of 30 days after
         the earlier of (i) the date upon which a Responsible Officer knew or
         reasonably should have known of such default or (ii) the date upon
         which written notice thereof is given to Giant Industries by the
         Collateral Agent or any Lender; or

                  (e)      Cross-Default.

                           (i)      Borrower or Giant Industries or any
                  Subsidiary (A) fails to make any payment in respect of any
                  Indebtedness or Contingent Obligation having an aggregate
                  principal amount (including undrawn committed or available
                  amounts and including amounts owing to all creditors under any
                  combined or syndicated credit arrangement) of more than
                  $5,000,000, or any Specified Swap Contract (whatever the
                  amount), when due (whether by scheduled maturity, required
                  prepayment, acceleration, demand, or otherwise) and such
                  failure continues after the applicable grace or notice period,
                  if any, specified in the relevant document on the date of such
                  failure; or (B) fails to perform or observe any other
                  condition or covenant, or any other event shall occur or
                  condition exist, under any agreement or instrument relating to
                  any such Indebtedness or Contingent Obligation having an
                  aggregate principal amount (including undrawn committed or
                  available amounts and including amounts owing to all creditors
                  under any combined or syndicated credit arrangement) of more
                  than $5,000,000, or any Specified Swap Contract (whatever the
                  amount), if the effect of such failure, event or condition is
                  to cause, or to permit the holder or holders of such
                  Indebtedness or beneficiary or beneficiaries of such
                  Indebtedness (or a Borrower or agent on behalf of such holder
                  or holders or beneficiary or beneficiaries) to cause such
                  Indebtedness, Specified Swap Contract or Contingent Obligation
                  to be declared to be due and payable prior to its stated
                  maturity, or cash collateral in respect thereof to be
                  demanded; or (C) any Indebtedness or Contingent Obligation of
                  Giant Industries


                                      -48-

Giant Yorktown, Inc.                                              Loan Agreement


                  or any Subsidiary in excess of $5,000,000, or any Specified
                  Swap Contract (whatever the amount), shall be declared due and
                  payable prior to its stated maturity or cash collateral is
                  demanded in respect of such Contingent Obligations or
                  Specified Swap Contracts; or

                           (ii)     An "Event of Default" shall occur under and
                  as defined in the Giant Industries Credit Agreement or any
                  other event shall occur or condition shall exist under any
                  agreement relating to the Giant Industries Credit Agreement
                  and the transactions contemplated thereby if the effect of
                  such event or condition is to cause, or to permit the holders
                  of obligations under any of the Giant Industries Credit
                  Agreement or any agreement relating thereto to cause, any
                  Indebtedness or other obligations of Giant Industries or any
                  of its Subsidiaries under any of the Giant Industries Credit
                  Agreement or any agreement relating thereto to become due
                  prior to the stated maturity or stated due date thereof; or

                           (iii)    Giant Industries (A) fails to make any
                  Margin Payment under and as defined in the Yorktown Asset
                  Purchase Agreement when due and such failure continues after
                  the applicable grace or notice period, if any, specified in
                  the Yorktown Asset Purchase Agreement; or (B) fails to perform
                  or observe any other condition or covenant, or any other event
                  shall occur or condition exist under the Yorktown Asset
                  Purchase Agreement, if the effect of such failure, event or
                  condition is to cause the Margin Payment, or any portion
                  thereof, to be immediately due and payable prior to any
                  scheduled payment date therefore or prior to its stated
                  maturity (whether pursuant to Section 7(e)(iv) therein or
                  otherwise; or

                  (f)      Insolvency; Voluntary Proceedings. Borrower or Giant
         Industries or any Subsidiary (i) generally fails to pay, or admits in
         writing its inability to pay, its debts as they become due, subject to
         applicable grace periods, if any, whether at stated maturity or
         otherwise; (ii) commences any Insolvency Proceeding with respect to
         itself; or (iii) takes any action to effectuate or authorize any of the
         foregoing; or

                  (g)      Involuntary Proceedings. (i) Any involuntary
         Insolvency Proceeding is commenced or filed against Borrower or Giant
         Industries or any Material Subsidiary, or any writ, judgment, warrant
         of attachment, execution or similar process, is issued or levied
         against all or a substantial part of Giant Industries' or any Material
         Subsidiary's properties, and any such proceeding or petition shall not
         be dismissed, or such writ, judgment, warrant of attachment, execution
         or similar process shall not be released, vacated or fully bonded
         within 60 days after commencement, filing or levy; (ii) Borrower or
         Giant Industries or any Material Subsidiary admits the material
         allegations of a petition against it in any Insolvency Proceeding, or
         an order for relief (or similar order under non-U.S. law) is ordered in
         any Insolvency Proceeding; or (iii) Borrower or Giant Industries or any
         Material Subsidiary acquiesces in the appointment of a receiver,
         trustee, custodian, conservator, liquidator, mortgagee in possession
         (or agent therefor), or other similar Person for itself or a
         substantial portion of its property or business; or


                                      -49-

Giant Yorktown, Inc.                                              Loan Agreement


                  (h)      ERISA. (i) An ERISA Event shall occur with respect to
         a Pension Plan or Multiemployer Plan which has resulted or could
         reasonably be expected to result in liability of Giant Industries or a
         Subsidiary under Title IV of ERISA to the Pension Plan, Multiemployer
         Plan or the PBGC in an aggregate amount in excess of $3,000,000 and
         such amount is not paid when due; or (ii) the aggregate amount of
         Unfunded Pension Liability among all Pension Plans is in an aggregate
         amount and could reasonably be expected to cause a Material Adverse
         Effect; or (iii) Giant Industries or any ERISA Affiliate fails to pay
         when due any installment payment with respect to its withdrawal
         liability under Section 4201 of ERISA under a multi-employer Plan in an
         aggregate amount in excess of $3,000,000; or

                  (i)      Monetary Judgments. One or more final judgments,
         final orders, decrees or arbitration awards is entered against Borrower
         or Giant Industries or any Subsidiary involving in the aggregate a
         liability (to the extent not covered by independent third-party
         insurance as to which the insurer does not dispute coverage) as to any
         single or related series of transactions, incidents or conditions, of
         $3,000,000 or more, and the same shall remain unsatisfied, unvacated
         and unstayed pending appeal for a period of 30 days after the entry
         thereof; or

                  (j)      Change of Control. There occurs any Change of
         Control; or

                  (k)      Loss of Permit. Any Governmental Authority revokes or
         fails to renew any material license, permit or franchise of Borrower or
         Giant Industries or any Material Subsidiary, or Giant Industries or any
         Material Subsidiary for any reason loses any material license, permit
         or franchise, or Giant Industries or any Material Subsidiary suffers
         the imposition of any restraining order, escrow, suspension or impound
         of funds in connection with any proceeding (judicial or administrative)
         with respect to any material license, permit or franchise; or

                  (l)      Adverse Change. There occurs a Material Adverse
         Effect; or

                  (m)      Guaranty Default. The Parent Guaranty or Constituent
         Companies Guaranty is for any reason partially or wholly revoked or
         invalidated, or otherwise ceases to be in full force and effect, or any
         Guarantor or any other Person contests in any manner the validity or
         enforceability thereof or denies that it has any further liability or
         obligation thereunder; or any event described at subsections (f) or (g)
         of this SECTION 8.1 occurs with respect to such Guarantor; or

                  (n)      Invalidity of Subordination Provisions. The
         subordination provisions of any of the Indentures or Subordinated Notes
         are for any reason revoked or invalidated, the Borrower under either of
         the Indentures, any successor Borrower thereto or any other Person
         contests in any material respect the validity or enforceability
         thereof, or the Indebtedness hereunder does not have the priority
         contemplated by this Loan Agreement and the other Operative Documents
         or the Indenture or such subordination provisions; or


                                      -50-

Giant Yorktown, Inc.                                              Loan Agreement


                  (o)      Prepayment of Subordinated Notes. If Borrower or
         Giant Industries or any Subsidiary is required for any reason to
         prepay, redeem or purchase in whole or in part any of the Subordinated
         Notes prior to the scheduled maturity thereof, other than pursuant to
         the Escrow Agreement; or

                  (p)      Mortgaged Property.

                           (i)      any provision of any Operative Document
                  granting a lien and security interest shall for any reason
                  cease to be valid and binding on or enforceable against
                  Borrower or Giant Industries or any Subsidiary party thereto
                  or Borrower or Giant Industries or any Subsidiary shall so
                  state in writing or bring an action to limit its obligations
                  or liabilities thereunder; or

                           (ii)     the Operative Documents shall for any reason
                  (other than pursuant to the terms thereof) cease to create a
                  valid security interest in the Mortgaged Property purported to
                  be covered thereby or such security interest shall for any
                  reason cease to be a perfected and first priority security
                  interest; or

                  (q)      Environmental Matters. Either (i) Borrower, Giant
         Industries or any of its Subsidiaries shall be liable, whether
         directly, indirectly through required indemnification of any Person or
         otherwise, for the costs of investigation and/or remediation of any
         Hazardous Substance originating from or affecting any property or
         properties, whether or not owned, leased or operated by Borrower, Giant
         Industries or any of its Subsidiaries, which liability, together with
         all other such liabilities of Borrower or any of its Subsidiaries,
         could reasonably be expected to exceed $9,000,000 in the aggregate or
         require payments by Borrower or any of its Subsidiaries exceeding
         $3,000,000 in any fiscal year of Borrower (excluding for purposes of
         such determination (i) such amount of any insurance proceeds paid to or
         for the benefit of the Borrower, Giant Industries or any of its
         Subsidiaries in respect of such liability or unconditionally
         acknowledged in writing to be payable by the insurance carrier that
         issued the related insurance policy, (ii) such amount of any indemnity
         payments made to the Borrower, Giant Industries or any of its
         Subsidiaries in respect of such liability or unconditionally
         acknowledged in writing to be payable by the party that indemnified
         such amounts, or (iii) an amount not to exceed $7,500,000 in the
         aggregate paid by the Borrower, Giant Industries or any of its
         Subsidiaries in respect of such liability pursuant to the Yorktown
         Asset Purchase Agreement) or (ii) any federal, state, regional, local
         or other environmental regulatory agency or authority shall commence an
         investigation or take any other action that, individually or in the
         aggregate, could reasonably be expected to have a Material Adverse
         Effect.

     Section 8.2. Non-Bankruptcy Defaults. If any Event of Default has occurred
and is continuing:

                  (a)      The Collateral Agent at the direction of the Required
         Lenders may, by notice in writing to the Borrower, declare the
         principal of and interest on the Notes to be forthwith due and payable
         and thereupon the Notes, including both principal and interest,


                                      -51-

Giant Yorktown, Inc.                                              Loan Agreement


         and all fees, charges and other amounts payable hereunder, including,
         without limitation, any Applicable Administrative Charge, under the
         Notes, the Deed of Trust and the Guaranties, shall be and become
         immediately due and payable without presentment, demand or further
         notice of any kind.

                  (b)      The Collateral Agent may offset any indebtedness,
         obligations or liabilities owed to the Borrower against any
         indebtedness, obligations or liabilities of the Borrower to the
         Lenders.

                  (c)      The Collateral Agent for the benefit of the Lenders
         may enforce any and all rights and remedies available to it under the
         Notes, the Deed of Trust and the Guaranties or under any Requirement of
         Law.

     Section 8.3. Bankruptcy Defaults. If any Event of Default described in
subsection (f) or (g) of SECTION 8.1 has occurred and is continuing, then the
entire Loan Balance and all accrued and unpaid Interest thereon, and all fees,
charges and other amounts payable hereunder, including, without limitation, any
Applicable Administrative Charge, under the Note, the Deed of Trust and the
Guaranties, shall immediately become due and payable without presentment,
demand, protest or notice of any kind. In addition, the Collateral Agent at the
direction of the Required Lenders may exercise any and all remedies available to
it hereunder, under the Note, the Deed of Trust and the Guaranties or under any
Requirement of Law.

     Section 8.4. Remedies on Default. In case any one or more Defaults or
Events of Default shall occur and be continuing, (i) any Lender may proceed to
protect and enforce the rights of such Lender by an action at law, suit in
equity or other appropriate proceeding, whether for the specific performance of
any agreement contained herein or in any Operative Document, or for an
injunction against a violation of any of the terms hereof or thereof, or in aid
of the exercise of any power granted hereby or thereby or by law or otherwise,
and (ii) the Collateral Agent and any Lender may exercise any rights or remedies
in their respective capacities under the Operative Documents in accordance with
the provisions thereof. No course of dealing and no delay on the part of any
Lender in exercising any right, power or remedy shall operate as a waiver
thereof or otherwise prejudice such Lender's rights, powers or remedies. No
right, power or remedy conferred by this Loan Agreement or by any Note upon any
holder thereof shall be exclusive of any other right, power or remedy referred
to herein or therein or now or hereafter available at law, in equity, by statute
or otherwise.

SECTION 9. ASSIGNMENT BY LENDERS; PARTICIPATIONS.

     Section 9.1. Assignments. (a) Any Lender may at any time assign to one or
more Eligible Assignees all or a portion of its rights and obligations under
this Loan Agreement, the other Operative Documents, the Mortgaged Property or
the Notes; provided that (i) each partial assignment shall be made as an
assignment of a proportionate part of all the assigning Lender's rights and
obligations under this Loan Agreement and the other Operative Documents; and
(ii) the parties to each assignment shall execute and deliver to the Collateral
Agent an Assumption in the form attached hereto as EXHIBIT F, together with a
processing and recordation fee of $500.00. Subject to acceptance and recording
thereof by the Collateral Agent pursuant to


                                      -52-

Giant Yorktown, Inc.                                              Loan Agreement


PARAGRAPH (b) of this Section, from and after the effective date specified in
each Assignment and Assumption, the Eligible Assignee thereunder shall be a
party to this Loan Agreement and, to the extent of the interest assigned by such
Assignment and Assumption, have the rights and obligations of a Lender under
this Loan Agreement, and the assigning Lender thereunder shall, to the extent of
the interest assigned by such Assignment and Assumption, be released from its
obligations under this Loan Agreement (and, in the case of an Assignment and
Assumption covering all of the assigning Lender's rights and obligations under
this Loan Agreement, such Lender shall cease to be a party hereto) but shall
continue to be entitled to the benefits of SECTION 11 with respect to facts and
circumstances occurring prior to the effective date of such assignment. Any
assignment or transfer by a Lender of rights or obligations under this Loan
Agreement that does not comply with this paragraph shall be treated for purposes
of this Loan Agreement as a sale by such Lender of a participation in such
rights and obligations in accordance with SECTION 9.2.

         (b)      The Collateral Agent, acting solely for this purpose as an
agent of the Borrower, shall maintain at its office listed in SCHEDULE IB a copy
of each Assignment and Assumption delivered to it and a register for the
recordation of the names and addresses of the Lenders, and the principal amounts
of the Loans owing to, each Lender pursuant to the terms hereof from time to
time (the "Register"). The entries in the Register shall be conclusive, and the
Borrower, the Collateral Agent and the Lenders may treat each Person whose name
is recorded in the Register pursuant to the terms hereof as a Lender hereunder
for all purposes of this Loan Agreement, notwithstanding notice to the contrary.
The Register shall be available for inspection by the Borrower and any Lender,
at any reasonable time and from time to time upon reasonable prior notice.

     Section 9.2. Participations. Any Lender may at any time, without the
consent of, or notice to, the Borrower or the Collateral Agent, sell
participations to any Person (other than a natural person or the Borrower or any
of the Borrower's Affiliates or Subsidiaries) (each, a "Participant") in all or
a portion of such Lender's rights and/or obligations under this Loan Agreement,
the other Operative Documents, the Mortgaged Property or the Notes; (including
all or a portion of the Loans owing to it); provided that (i) such Lender's
obligations under this Loan Agreement and the other Operative Documents shall
remain unchanged, (ii) such Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations and (iii) the Borrower,
the Collateral Agent and the other Lenders shall continue to deal solely and
directly with such Lender in connection with such Lender's rights and
obligations under this Loan Agreement and the other Operative Documents. Any
agreement or instrument pursuant to which a Lender sells such a participation
shall provide that such Lender shall retain the sole right to enforce this Loan
Agreement and the other Operative Documents and to approve any amendment,
modification or waiver of any provision of this Loan Agreement and the other
Operative Documents. Subject to PARAGRAPH (b) of this Section, the Company
agrees that each Participant shall be entitled to the benefits of SECTION 11 to
the same extent as if it were a Lender and had acquired its interest by
assignment pursuant to SECTION 9.1.

         (b)      A Participant shall not be entitled to receive any greater
payment under SECTION 11 than the applicable Lender would have been entitled to
receive with respect to the participation sold to such Participant, unless the
sale of the participation to such Participant is made with the


                                      -53-

Giant Yorktown, Inc.                                              Loan Agreement


Borrower's prior written consent. A Participant that would be a foreign Lender
if it were a Lender shall not be entitled to the benefits of SECTION 11.2 unless
the Borrower is notified of the participation sold to such Participant and such
Participant agrees, for the benefit of the Borrower to comply with SECTION 11.2
as though it were a Lender.

     Section 9.3. Pledges. Any Lender may at any time pledge or assign a
security interest in all or any portion of its rights under this Loan Agreement
or the other Operative Documents to secure obligations of such Lender, including
without limitation any pledge or assignment to secure obligations to a Federal
Reserve Bank; provided that no such pledge or assignment shall release such
Lender from any of its obligations hereunder or substitute any such pledgee or
assignee for such Lender as a party hereto.

SECTION 10. THE COLLATERAL AGENT.

     Section 10.1. Appointment. Each Lender hereby irrevocably designates and
appoints the Trust Company as the Collateral Agent under this Loan Agreement and
the other Operative Documents, and each such Lender irrevocably authorizes the
Collateral Agent, in such capacity, to take such action on its behalf under the
provisions of this Loan Agreement and the other Operative Documents and to
exercise such powers and perform such duties as are expressly delegated to the
Collateral Agent by the terms of this Loan Agreement and the other Operative
Documents, together with such other powers as are reasonably incidental thereto.
Notwithstanding any provision to the contrary elsewhere in this Loan Agreement,
the Trust Company shall not have any duties or responsibilities, except those
expressly set forth herein and in the other Operative Documents, or any
fiduciary relationship with any Lender or any other party to the Operative
Documents, and no implied covenants, functions, responsibilities, duties,
obligations or liabilities shall be read into this Loan Agreement or any other
Operative Document or otherwise exist against the Trust Company.

     Section 10.2. Delegation of Duties. The Collateral Agent may execute any of
its duties under this Loan Agreement and the other Operative Documents by or
through agents or attorneys-in-fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties. The Collateral Agent shall not
be responsible for the acts or omissions including, specifically the negligence
or willful misconduct of agents or attorneys-in-fact selected by it with
reasonable care.

     Section 10.3. Exculpatory Provisions. Neither the Trust Company nor the
Collateral Agent (in its capacity as such) nor any of its officers, directors,
employees, agents, attorneys-in-fact or Affiliates shall be (a) liable for any
action lawfully taken or omitted to be taken by the Collateral Agent or such
Person under or in connection with this Loan Agreement or any other Operative
Document, except for the Collateral Agent's or such Person's own willful
misconduct or gross negligence (or negligence in the handling of funds by the
Collateral Agent in such capacity) or (b) responsible in any manner to any of
the Lenders or any other party to the Operative Documents for any recitals,
statements, representations or warranties made by the Borrower or any other
party or any officer thereof contained in this Loan Agreement or any other
Operative Document or in any certificate, report, statement or other document
referred to or provided for in, or received by the Collateral Agent under or in
connection with, this Loan


                                      -54-

Giant Yorktown, Inc.                                              Loan Agreement


Agreement or any other Operative Document, or for the value, validity,
effectiveness, genuineness, enforceability or sufficiency of this Loan Agreement
or any other Operative Document or for any failure of Borrower to perform its
obligations hereunder or thereunder. The Collateral Agent shall not be under any
obligation to any Lender or any other party to the Operative Documents to
ascertain or to inquire as to the observance or performance of any of the
agreements contained in, or conditions of, this Loan Agreement or any other
Operative Document, or to inspect the properties, books or records of Borrower.

     Section 10.4. Reliance by Collateral Agent; Indemnity. The Collateral Agent
shall be entitled to rely, and shall be fully protected in relying, upon any
Note, writing, resolution, notice, consent, certificate, affidavit, letter,
facsimile message, statement, order or other document or other written
communication believed by it to be genuine and correct and to have been signed,
sent or made by the proper Person or Persons and upon advice and statements of
legal counsel (including, without limitation, counsel to Borrower), independent
accountants and other experts selected by the Collateral Agent. The Collateral
Agent may deem and treat the payee of any Note as the owner thereof for all
purposes unless a written notice of assignment, negotiation or transfer thereof
shall have been filed with the Collateral Agent, in accordance with this Loan
Agreement. The Collateral Agent shall be fully justified in failing or refusing
to take any action under this Loan Agreement or any other Operative Document
unless it shall first receive the advice or concurrence of the Required Lenders
or it shall first be indemnified to its satisfaction by the applicable Lenders
against any and all liability and expense which may be incurred by it by reason
of taking or continuing to take any such action. The Collateral Agent shall in
all cases be fully protected in acting, or in refraining from acting, under this
Loan Agreement and the other Operative Documents in accordance with a request of
the Required Lenders, and such request and any action taken or failure to act
pursuant thereto shall be binding upon all the Lenders and all future holders of
the applicable Notes. Wherever in the Operative Documents the consent or
approval of the Collateral Agent is required, in giving any such consent or
approval the Collateral Agent may rely upon, or make its approval subject to,
the directions of or consent or approval from the Required Lenders. The Lenders
agree to indemnify the Collateral Agent (to the extent not reimbursed under
SECTION 11 hereof, the Parent Guaranty and the Constituent Companies Guaranty,
but without limiting the obligations of the Borrower under SECTION 11 or of the
Guarantors) ratably in accordance with their respective Commitments, for any and
all liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses (including reasonable attorneys' fees) or disbursements
of any kind and nature whatsoever that may at any time (including at any time
following the final payment of all of the obligations of the Borrower hereunder
and under the other Operative Documents) be imposed on, incurred by or asserted
against the Collateral Agent (including by any Lender) in any way relating to or
arising out of this Loan Agreement or any Operative Document or the transactions
contemplated thereby or any action taken or omitted by the Collateral Agent
under this Loan Agreement or any Operative Document; provided that no Lender
shall be liable for any of the foregoing to the extent they arise from the gross
negligence or willful misconduct of the Person to be indemnified. Without
limitation of the foregoing, each Lender agrees to reimburse the Collateral
Agent promptly upon demand for its ratable share of any costs or expenses
payable by Borrower under SECTION 11, to the extent that the Collateral Agent is
not promptly reimbursed for such costs and expenses by Borrower or a Guarantor.


                                      -55-

Giant Yorktown, Inc.                                              Loan Agreement


     Section 10.5. Notice of Default. The Collateral Agent shall not be deemed
to have knowledge or notice of the occurrence of any Default or Event of Default
unless the Collateral Agent has received notice from a Lender referring to this
Loan Agreement, describing such Default or Event of Default and stating that
such notice is a "notice of default". In the event that the Collateral Agent
receives such a notice, the Collateral Agent shall promptly give notice thereof
to the Lenders and Borrower. The Collateral Agent shall take such action with
respect to such Default or Event of Default as shall be directed by the Required
Lenders; provided, however, that unless and until the Collateral Agent shall
have received such directions, the Collateral Agent may (but shall not be
obligated to) take such action, or refrain from taking such action, with respect
to such Default or Event of Default as it shall deem advisable in the best
interests of the Lenders.

     Section 10.6. Non-Reliance on Collateral Agent and Other Lenders. Each
Lender expressly acknowledges that neither the Collateral Agent, the Arranger
nor any of their respective officers, directors, employees, agents,
attorneys-in-fact or Affiliates, has made any representations or warranties to
it and that no act by the Collateral Agent, or the Arranger hereinafter taken,
including any review of the affairs of the Borrower, shall be deemed to
constitute any representation or warranty by the Collateral Agent or the
Arranger to any Lender. Each Lender represents to the Collateral Agent that it
has, independently and without reliance upon the Collateral Agent or the
Arranger or any other Lender, and based on such documents and information as it
has deemed appropriate, made its own appraisal of and investigation into the
business, operations, property, financial and other condition and
creditworthiness of the Borrower and made its own decision to enter into this
Loan Agreement. Each Lender also represents that it will, independently and
without reliance upon the Collateral Agent, the Arranger or any other Lender,
and based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit analysis, appraisals and decisions in
taking or not taking action under this Loan Agreement and the other Operative
Documents, and to make such investigation as it deems necessary to inform itself
as to the business, operations, property, financial and other condition and
creditworthiness of the Borrower. Except for notices, reports and other
documents expressly required to be furnished to the Lenders by the Collateral
Agent hereunder, neither the Collateral Agent nor the Arranger shall have any
duty or responsibility to provide any Lender with any credit or other
information concerning the business, operations, property, condition (financial
or otherwise), prospects or creditworthiness of the Borrower which may come into
the possession of the Collateral Agent, the Arranger or any of their respective
officers, directors, employees, agents, attorneys-in-fact or Affiliates.

     Section 10.7. Indemnification. Other than with respect to indemnification
provided to the Collateral Agent in accordance with SECTION 10.4, the Collateral
Agent agrees to look solely to Borrower under SECTION 11, and not to any other
party hereto, for any claim for indemnification which may arise hereunder or
under any other Operative Document.

     Section 10.8. Collateral Agent in Its Individual Capacity. Each Lender
acknowledges that Wells Fargo Bank Nevada, National Association, is acting as
Collateral Agent hereunder. Wells Fargo Bank Nevada, National Association, and
its Affiliates may make loans to, issue letters of credit for the account of,
accept deposits from, acquire equity interests in and generally engage in any
kind of banking, trust, financial advisory, underwriting or other business with


                                      -56-

Giant Yorktown, Inc.                                              Loan Agreement


Borrower and their Affiliates as though it was not the Collateral Agent
hereunder and under the other Operative Documents and without notice to or
consent of the Lenders. Each Lender acknowledges that, pursuant to such
activities, Wells Fargo Bank Nevada, National Association, or its Affiliates may
receive information regarding Borrower or its Affiliates (including information
that may be subject to confidentiality obligations in favor of Borrower or its
Affiliates) and acknowledges that such Persons shall be under no obligation to
provide such information to them.

     Section 10.9. Successor Collateral Agent. The Collateral Agent may resign
at any time by giving written notice thereof to the Lenders and Borrower and may
be removed at any time with or without cause by the Required Lenders. Upon any
such resignation or removal, the Required Lenders, with the consent of the
Borrower and the Giant Industries, such consent not to be unreasonably withheld,
shall have the right to appoint a successor Collateral Agent. If no successor
Collateral Agent shall have been so appointed by the Required Lenders, and shall
have accepted such appointment, within sixty (60) days after the retiring
Collateral Agent's giving of notice of resignation or the Required Lenders'
removal of the retiring Collateral Agent, then the retiring Collateral Agent
may, on behalf of the Lenders, appoint a successor Collateral Agent, which shall
be a commercial bank described in clause (i) or (ii) of the definition of
"Eligible Assignee" and having a combined capital and surplus of at least
$150,000,000. Upon the acceptance of any appointment as Collateral Agent
hereunder by a successor Collateral Agent, such successor Collateral Agent shall
thereupon succeed to and become vested with all the rights, powers, privileges
and duties of the retiring Collateral Agent, and the retiring Collateral Agent
shall be discharged from its duties and obligations under this Loan Agreement.
After any retiring Collateral Agent's resignation or removal hereunder as
Collateral Agent, the provisions of this SECTION 10 shall inure to its benefit
as to any actions taken or omitted to be taken by it while it was Collateral
Agent under this Loan Agreement. Notwithstanding the foregoing if no Event of
Default and no Default, shall have occurred and be continuing, then no successor
Collateral Agent shall be appointed under this SECTION 10.9 without the prior
written consent of Borrower, which consent shall not be unreasonably withheld or
delayed.

     Section 10.10. Action upon Instructions. Subject to the terms of SECTIONS
10.3, 10.4 and 10.7 and the Operative Documents, upon the written instructions
at any time and from time to time of the Required Lenders (for any action not
requiring the consent of all of the Lenders), Collateral Agent shall take such
of the following actions as may be specific in such instructions:

                  (a)      give such notice or direction or exercise such right
         or power under this Loan Agreement or any other Operative Document as
         shall be specified in such instructions;

                  (b)      approve as satisfactory to it all matters required by
         the terms of any Operative Document to be satisfactory to Collateral
         Agent; and

                  (c)      any other action as specified by the Required
         Lenders.

     Section 10.11. Substitution of Deed of Trust Trustee. The Deed of Trust
Trustee hereunder may act at any time upon designation by the Collateral Agent.
If the Collateral Agent, in its sole


                                      -57-

Giant Yorktown, Inc.                                              Loan Agreement


and absolute discretion, shall desire for any reason whatsoever to have a
substitute trustee or substitute trustees appointed, then the Collateral Agent
is hereby authorized and empowered to appoint, at any time and from time to
time, by an instrument duly executed and acknowledged and filed for recordation
wherever this Loan Agreement is recorded, a substitute trustee or substitute
trustees, in the place and stead of one or more of those initially named herein
or subsequently appointed by the Collateral Agent, which trustee or trustees
shall have all the rights, powers and authority and be charged with all the
duties and responsibilities that are conferred to charged upon the Deed of Trust
Trustee initially named herein. Such substitute trustee shall comply with all
Requirements of Law and with Section 23 of the Deed of Trust.

SECTION 11. INDEMNITY.

     Section 11.1. General Indemnification. Whether or not the transactions
contemplated hereby are consummated, to the fullest extent permitted by
Requirements of Law, Borrower hereby:

                  (x)      waives and releases any Claims now or hereafter
         existing against any Indemnitee on account of, and

                  (y)      assumes liability for and agrees to indemnify,
         protect, defend, save and keep harmless each Indemnitee on an after-tax
         basis (in accordance with SECTION 11.3) from and against, any and all
         Claims of every kind and nature whatsoever that may be imposed on,
         incurred by, or asserted against any Indemnitee, which are not caused
         by the gross negligence or willful misconduct (or negligence in the
         handling of funds by the Collateral Agent in such capacity) of the
         Indemnitee (provided that the indemnification provided under this
         SECTION 11.1 shall specifically include matters based on or arising
         from the negligence of any Indemnitee), whether or not such Indemnitee
         shall also be indemnified as to any such Claim by any other Person and
         whether or not such Claim arises or accrues prior to the Closing Date
         or after the Maturity Date, and which relates in any way to or arises
         in any way out of:

                           (a)      any of the Operative Documents or any of the
                  transactions contemplated thereby, or any investigation,
                  litigation or proceeding in connection therewith, and any
                  amendment, modification or waiver in respect thereof;

                           (b)      the Mortgaged Property or any Part thereof
                  or interest therein;

                           (c)      with respect to the Mortgaged Property or
                  Part thereof, the acquisition, mortgaging, design,
                  manufacture, re-manufacture, construction, preparation,
                  installation, inspection, delivery, non-delivery, acceptance,
                  rejection, purchase, ownership, possession, rental, lease,
                  sublease, repossession, maintenance, repair, alteration,
                  modification, addition or substitution, storage, titling or
                  retitling, transfer of title, registration or re-registration,
                  redelivery, use, operation, condition, financing, refinancing,
                  sale, return or other application or disposition or the
                  imposition of any Lien (or incurring of any liability to
                  refund or pay over any amount as a result of any Lien) on any
                  of the Mortgaged Property,


                                      -58-

Giant Yorktown, Inc.                                              Loan Agreement


                  including, without limitation, (i) Claims or penalties arising
                  from any violation of any Requirements of Law or in tort
                  (strict liability or otherwise), (ii) loss of or damage to the
                  environment (including, without limitation, investigation
                  costs, cleanup costs, response costs, remediation and removal
                  costs, costs of corrective action, costs of financial
                  assurance, and all other damages, costs, fees and expenses,
                  fines and penalties, including natural resource damages), or
                  death or injury to any Person, and any mitigative action
                  required by or under Environmental Laws, (iii) latent or other
                  defects, whether or not discoverable, and (iv) any Claim for
                  patent, trademark or copyright infringement;

                           (d)      the sale or other disposition of the
                  Mortgaged Property, including, without limitation, any
                  disposition pursuant to the Prepayment Option or as a result
                  of the exercise of remedies; provided, however, that in no
                  event shall any other Person (other than any Lender, Deed of
                  Trust Trustee, Trust Company, Collateral Agent and their
                  respective Affiliates, successors, permitted assigns,
                  permitted transferees, invitees, contractors, servants,
                  employees, officers, directors, shareholders, partners,
                  participants, representatives, agents and their respective
                  designees or nominees) who purchases the Mortgaged Property
                  for value following a foreclosure or other remedy be an
                  Indemnitee;

                           (e)      the offer, issuance, sale or delivery of the
                  Notes in accordance with the Operative Documents;

                           (f)      the breach by Borrower or a Guarantor of any
                  representation or warranty made by it or deemed made by it in
                  any Operative Document;

                           (g)      the transactions contemplated hereby or by
                  any other Operative Document in respect of the application of
                  Parts 4 and 5 of Subtitle B of Title I of ERISA and any
                  Prohibited Transaction described in Section 49115(c) of the
                  Code;

                           (h)      any Claims related to the release from the
                  Mortgaged Property of any substance into the environment,
                  including (without limitation) Claims arising out of the use
                  of the Mortgaged Property for the transportation or storage of
                  any Hazardous Substance;

                           (i)      any Claims related to any Indemnitee being
                  alleged to be an owner or operator of the Mortgaged Property
                  or the land on which the Mortgaged Property is situated, in
                  each case prior to taking possession thereof, under any
                  Environmental Law;

                           (j)      any failure on the part of Borrower or any
                  Guarantor to perform or comply with any of the terms of any
                  Operative Document to which it is a party; or

                           (k)      any other agreement entered into or assumed
                  by Borrower in connection with the Mortgaged Property.


                                      -59-

Giant Yorktown, Inc.                                              Loan Agreement


                  It is expressly understood and agreed that this SECTION 11.1
         shall not apply to Claims in respect of:

                                    (A)      Taxes (such Claims being subject to
                           SECTION 11.2), except with respect to (1) taxes or
                           penalties included in Claims described in clause (g)
                           above, and (2) any payment necessary to make payments
                           under this SECTION 11.1 in accordance with SECTION
                           11.3;

                                    (B)      as to an Indemnitee, Lender Liens
                           which such Indemnitee is responsible for discharging
                           under the Operative Documents;

                                    (C)      the gross negligence or willful
                           misconduct of such Indemnitee or any Affiliate,
                           agents, officers directors, servants or employees
                           thereof; and

                                    (D)      the breach by an Indemnitee of any
                           representation, warranty or covenant under any
                           Operative Document.

     Section 11.2. General Tax Indemnity. (a) Borrower shall pay, defend and
indemnify and hold each Indemnitee harmless on an after-tax basis (in accordance
with SECTION 11.3) from any and all Federal, state, local and foreign Taxes
imposed on or with respect to or in connection with any Indemnitee, the
Mortgaged Property or any portion thereof, any Operative Document, Borrower or
any sublessee or user of the Mortgaged Property, howsoever imposed, whether
levied or imposed upon or asserted against any Indemnitee, the Mortgaged
Property, or any Part thereof, by any taxing Governmental Authority (including
any Federal, state or local government or taxing Governmental Authority in the
United States and any taxing Governmental Authority or governmental subdivision
of a foreign country), upon or with respect to:

                  (i)      with respect to the Mortgaged Property or Part
         thereof, the acquisition, mortgaging, design, manufacture,
         re-manufacture, construction, preparation, installation, inspection,
         delivery, non-delivery, acceptance, rejection, purchase, ownership,
         possession, rental, lease, sublease agreement, repossession,
         maintenance, repair, alteration, modification, addition or
         substitution, storage, titling or retitling, transfer of title,
         registration or re-registration, redelivery, use, operation, condition,
         financing, refinancing, sale, return or other application or
         disposition or the imposition of any Lien (or incurrence of any
         liability to refund or pay over any amount as a result of any Lien)
         thereon,

                  (ii)     Interest or Supplemental Payments or the receipts or
         earnings arising from or received with respect to the Mortgaged
         Property or any Part thereof, or any interest therein or any
         applications or dispositions thereof,

                  (iii)    any other amount paid or payable pursuant to this
         Loan Agreement, the Notes or any other Operative Document,

                  (iv)     the Mortgaged Property or any Part thereof or any
         interest therein,


                                      -60-

Giant Yorktown, Inc.                                              Loan Agreement


                  (v)      all or any of the Operative Documents, any other
         documents contemplated thereby and any amendments and supplements
         thereto, and

                  (vi)     otherwise with respect to or in connection with the
         transactions contemplated by the Operative Documents;

provided, however, that subject to SECTION 11.6, the indemnification obligation
of this SECTION 11.2(a) shall not apply to (1) Taxes which are based upon or
measured by the Indemnitee's net income or Taxes (other than Taxes that are, on
in the nature of, sales, use, transfer, value-added, license or property taxes)
or which are expressly in substitution for, or relieve Indemnitee from, any
actual Tax based upon or measured by Indemnitee's net income (other than any
State or local Taxes imposed by means of withholding, Taxes incurred solely as a
result of the location of the Mortgaged Property, the operations, state of
formation, or place of payment of the Borrower, and Taxes necessary to pay the
obligations under this paragraph on an after-tax basis); (2) Taxes characterized
under local law as franchise, net worth, or shareholder's capital (excluding,
however, any value-added, license, property or similar Taxes); and (3) United
States withholding taxes under Code Section 1442 with respect to any payment to
an Indemnitee not incorporated under the laws of the United States or a state
thereof. Notwithstanding the proviso of the preceding sentence of this SECTION
11.2(a), Borrower shall pay or reimburse, and indemnify and hold harmless, on an
after-tax basis, any Indemnitee that is not incorporated under the laws of the
United States or a state thereof (i) from any deduction or withholding of any
United States federal income tax, if such Indemnitee, in compliance with SECTION
11.2(c), has certified that it is entitled to receive payments pursuant to the
Operative Documents without any such deduction or withholding, or (ii) if such
Indemnitee, in compliance with SECTION 11.2(c), has certified that it is
entitled to receive payments pursuant to the Operative Documents at a reduced
rate of withholding, from any deduction or withholding of any United States
federal income tax in excess of such reduced rate, or (iii) if such Indemnitee
has complied with SECTION 11.2(c) or otherwise validly established that it is a
foreign person thereby entitled to an exemption from United States backup
withholding taxes, from such backup withholding taxes. The Indemnitee will use
reasonable efforts to cooperate with the Borrower to recover from the
appropriate Governmental Authority any such excess withholding and will repay
any such amount recovered less reasonable costs of recovery to the Borrower to
the extent that the Borrower has previously indemnified Indemnitee.

         All of the indemnities contained in this SECTION 11.2 shall continue in
full force and effect notwithstanding the expiration or earlier termination of
this Loan Agreement in whole or in part, including the termination of this Loan
Agreement with respect to the Mortgaged Property, and are expressly made for the
benefit of, and shall be enforceable by, each Indemnitee.

         (b)      Borrower will promptly notify Collateral Agent and the Lenders
of all reports or returns required to be made with respect to any Tax with
respect to which Borrower is required to indemnify hereunder, and will, if
permitted by Requirement of Law, file the same. If Borrower is not permitted to
so file, Borrower shall prepare such reports or returns for signature by
Collateral Agent or the applicable Lender and shall forward the same, together
with immediately available funds for payment of any Tax due, to Collateral Agent
or such Lender, at least ten (10) days in advance of the date such payment is to
be made. Borrower shall furnish Collateral Agent


                                      -61-


Giant Yorktown, Inc.                                              Loan Agreement


or such Lender with copies of all paid receipts or other appropriate evidence of
payment for all Taxes paid by Borrower pursuant to this SECTION 11.2.

         (c)      At least five (5) Business Days prior to the first date on
which any payment is due under this Loan Agreement for the account of any Lender
not incorporated under the laws of the United States or a state thereof, such
Lender agrees that it will have delivered to Borrower and Collateral Agent two
valid, duly completed, original copies of Internal Revenue Service Form W-8BEN
or W-8ECI or successor applicable form or forms, properly and duly executed,
certifying in either case that such Lender is entitled to receive payments
pursuant to the Operative Documents without deduction or withholding of any
United States federal income taxes (or at a reduced rate, if applicable) and is
a foreign person thereby entitled to an exemption from United States backup
withholding taxes. Each such Lender covenants that (i) it will provide to
Borrower and Collateral Agent a new Internal Revenue Service Form W-8BEN or
W8-ECI and any such additional forms (or any successor form or forms) upon the
expiration or obsolescence of any previously delivered forms or after the
occurrence of any event requiring a change in the most recent forms delivered by
it in either case within 30 days of receipt from the Borrower and Collateral
Agreement of (1) written notice that the existing forms are to expire or become
obsolete and (2) the appropriate new forms, in accordance with applicable United
States laws and regulations and amendments, duly executed and completed by such
Lender to the extent Lender is eligible under law to complete and execute such
forms, and (ii) it will otherwise comply from time to time with all applicable
United States laws and regulations with regard to such withholding tax exemption
or entitlement to reduced rate withholding.

     Section 11.3. Gross Up. If an Indemnitee shall not be entitled to a
corresponding and equal deduction with respect to any payment or Tax which
Borrower is required to pay or reimburse under any other provision of this
SECTION 11 (each such payment or reimbursement under this SECTION 11, an
"original payment") and which original payment constitutes income to such
Indemnitee, then Borrower shall pay to such Indemnitee on demand the amount of
such original payment on a grossed-up basis such that, after subtracting all
Taxes imposed on such Indemnitee with respect to such original payment by
Borrower (including any Taxes otherwise excluded from the indemnification
provided under SECTION 11.2 and assuming for this purpose that such Indemnitee
were subject to taxation at the highest Federal, state or local marginal rates
applicable to widely held corporations for the year in which such income is
taxable), such payments shall be equal to the original payment to be received
(net of any credits, deductions or other Tax benefits then actually recognized
that arise from the payment by such Indemnitee of any amount, including Taxes,
for which the payment to be received is made).

     Section 11.4. Increased Capital Costs. If any change in, or the
introduction, adoption, effectiveness, interpretation, reinterpretation or
phase-in of, any law or regulation, directive, guideline, decision or request
(whether or not having the force of law) of any court, central bank regulator or
other Governmental Authority affects or would affect the amount of capital
required or expected to be maintained by any Lender directly or by its parent
company (including, without limitation, any reserve requirements specified under
regulations issued from time to time by the Board of Governors of the Federal
Reserve System and then applicable to assets or liabilities consisting of and
including "Eurocurrency Liabilities" as defined in Regulation D of such Board of
Governors) as determined by such Lender (in its sole and absolute discretion),
then, in any


                                      -62-

Giant Yorktown, Inc.                                              Loan Agreement


such case, upon written notification from time to time by such Lender to
Borrower, Borrower shall, within five (5) Business Days following receipt of the
statement referred to in the next sentence, pay directly to such Lender, as
Supplemental Payment, additional amounts sufficient to compensate such Lender or
its parent for such increased cost to such Lender (subject to SECTION 11.3). A
statement of a Lender as to any such additional amount or amounts (including
calculations thereof in reasonable detail) shall, in the absence of manifest
error, be conclusive and binding on Borrower. In determining such amount, each
Lender shall use any method of averaging or attribution that it (in its
reasonable discretion) shall deem applicable. Notwithstanding any provision of
this SECTION 11.4 to the contrary, no amount shall be payable by the Borrower
with respect to any such increased costs or reduced returns incurred more than
180 days before the date such Lender first notifies the Borrower of its
intention to demand compensation under this SECTION 11.4.

     Section 11.5. Environmental Indemnity. Without limitation of the other
provisions of this SECTION 11, the Borrower hereby agrees to indemnify, hold
harmless and defend each Indemnitee from and against any and all claims, losses,
damages, liabilities, fines, penalties, charges, administrative and judicial
proceedings (including informal proceedings) and orders, judgments, remedial
action, requirements, enforcement actions of any kind, and all reasonable and
documented costs and expenses incurred in connection therewith (including
reasonable and documented attorneys', expert consultants', expert witnesses',
and/or paralegals' fees and expenses), including all costs incurred in
connection with any investigation or monitoring of the condition of the
Mortgaged Property or any clean-up, remedial, removal or restoration work by any
Governmental Authority (collectively, "Environmental Claims"), arising in whole
or in part, out of:

                  (a)      the presence on, under or around the Mortgaged
         Property or any portion thereof of any Hazardous Material, or any
         releases or discharges of any Hazardous Material on, under, from, onto
         or around the Mortgaged Property or any portion thereof,

                  (b)      any activity, including, without limitation,
         construction carried on or undertaken on or off the Mortgaged Property
         or any portion thereof, and whether by Borrower or any of its
         Affiliates or any predecessor in title or any employees, agents,
         sublessees, contractors or subcontractors of the Borrower, any of its
         Affiliates or any predecessor in title, or any other Persons (including
         such Indemnitee), in connection with the handling, treatment, removal,
         storage, decontamination, clean-up, transport or disposal of any
         Hazardous Substance that at any time are located or present on, under
         or around, or that at any time migrate, flow, percolate, diffuse or in
         any way move onto or under the Mortgaged Property or any portion
         thereof,

                  (c)      loss of or damage to any property or the environment
         arising from, or in any way related to, the Mortgaged Property or
         Borrower or any of its Affiliates (including, without limitation,
         clean-up costs, response costs, remediation and removal costs, cost of
         corrective action, costs of financial assurance, fines and penalties
         and natural resource damages), or death or injury to any Person, and
         all expenses associated with the protection of wildlife, aquatic
         species, vegetation, flora and fauna, and any mitigative action
         required by or under Environmental Laws, in each case arising from, or


                                      -63-

Giant Yorktown, Inc.                                              Loan Agreement


         in any way related to, the Mortgaged Property, Borrower or the
         transactions contemplated by the Operative Documents or any portion
         thereof,

                  (d)      any claim concerning lack of compliance with
         Environmental Laws in connection with the Mortgaged Property
         (including, without limitation, any claim arising from the failure or
         alleged failure to obtain or comply with any permit required by any
         Environmental Laws for the construction or operation of the Mortgaged
         Property), or any act or omission causing an environmental condition
         that requires remediation or would allow any Governmental Authority to
         record a Lien against the Mortgaged Property or any portion thereof, or

                  (e)      any residual contamination on or under any of the
         Mortgaged Property, or adversely affecting any natural resources, and
         any contamination of any property or natural resources arising in
         connection with the generation, use, handling, storage, transport or
         disposal of any such Hazardous Substance, in each case arising from, or
         in any way related to, the Mortgaged Property, Borrower or the
         transactions contemplated by the Operative Documents or any portion
         thereof, and irrespective of whether any of such activities were or
         will be undertaken in accordance with all Requirements of Law.

     Section 11.6. LIBO Rate Illegal, Unavailable or Impracticable. If any
Lender shall determine in good faith (which determination shall, upon notice
thereof to Collateral Agent and Borrower, be conclusive and binding on Borrower)
that:

                  (a)      a change in law makes it unlawful, or the central
         bank or other Governmental Authority asserts that it is unlawful, for
         such Lender to make, continue or maintain any amount of such Lender's
         investment hereunder on a LIBO Rate basis,

                  (b)      deposits in Dollars (in the applicable amounts) are
         not being offered to such Lender in the relevant market for the
         applicable Interest Period, or that by reason of circumstances
         affecting the interbank eurodollar market adequate and reasonable means
         do not exist for ascertaining the applicable LIBO Rate, or

                  (c)      the LIBO Rate, as determined by such Lender, will not
         adequately and fairly reflect the cost to such Lender of maintaining or
         funding its investments for the applicable Interest Period, or that the
         making or funding of such Lender's investment hereunder on a LIBO Rate
         basis has become impracticable as a result of an event occurring after
         the date of this Loan Agreement which in the opinion of such Lender
         materially changes such investment,

then the obligations of such Lender to make, continue or maintain any such
investment shall, upon such determination, forthwith be suspended until such
Lender shall notify Collateral Agent and Borrower that such circumstances no
longer exist, and all Interest allocable to such Lender shall automatically be
determined on a Base Rate basis beginning on the next immediately succeeding
Payment Date with respect thereto or sooner, if required by such law, assertion
or determination.


                                      -64-

Giant Yorktown, Inc.                                              Loan Agreement


     Section 11.7. Funding Losses. Borrower agrees to reimburse any Lender for
any loss or expense incurred as a result of (i) the failure of the transaction
contemplated hereby to occur on the Closing Date specified in the Closing Notice
or (ii) any payment of all or any portion of the Loan Balance for any reason on
a date other than a Payment Date. Any affected Lender shall promptly notify
Borrower in writing of the amount of any claim under this SECTION 11.7, the
reason or reasons therefor and the additional amount required fully to
compensate such Lender for such loss or expense. Such written notice (which
shall include calculations in reasonable detail) shall, in the absence of
manifest error, be conclusive and binding on Borrower.

     Section 11.8. Actions of Lenders. Each Lender shall use reasonable efforts
(including reasonable efforts to change the booking office for this transaction)
to avoid or minimize any amounts which might otherwise be payable pursuant to
SECTIONS 11.4 and 11.5; provided, however, that such efforts shall not be deemed
by such Lender, in its sole discretion, to be disadvantageous to it.

SECTION 12. GENERAL CONDITIONS.

     Section 12.1. Payment of Transaction Costs and Other Costs. If the
transactions contemplated hereby are consummated, Borrower shall pay all
Transaction Costs and all Fees in accordance with SECTION 4.9 and 7.9 (or upon
such later date as agreed to by the Lenders), and in the event the transactions
contemplated hereby do not close, Borrower shall pay such Transaction Costs
promptly upon receipt of invoices therefor. In addition, Borrower shall pay or
reimburse Collateral Agent, Deed of Trust Trustee, Trust Company, Arranger and
the Lenders for all other Transaction Costs and Fees and all other out-of-pocket
costs and expenses (including reasonable attorneys fees) reasonably incurred in
connection with: (a) entering into, or the giving or withholding of, any future
amendments, supplements, waivers or consents with respect to the Operative
Documents; (b) any Casualty or termination of this Loan Agreement or any other
Operative Document; (c) the negotiation and documentation of any restructuring
or "workout", whether or not consummated, of any Operative Document; (d) the
enforcement of the rights or remedies under the Operative Documents; (e) further
assurances requested pursuant to Section 6(o) of the Parent Guaranty or any
similar provision in other Operative Documents; (f) any transfer by Collateral
Agent or a Lender of any interest in the Operative Documents during the
continuance of an Event of Default or pursuant to the syndication of the Notes
by the Arranger; and (g) the ongoing fees and expenses of Collateral Agent, Deed
of Trust Trustee and Trust Company under the Operative Documents.

     Section 12.2. Effect of Waiver. No delay or omission to exercise any right,
power or remedy accruing to Collateral Agent or any Lender upon any breach or
default of Borrower hereunder shall impair any such right, power or remedy nor
shall it be construed to be a waiver of any such breach or default, or an
acquiescence therein or of or in any similar breach or default thereafter
occurring, nor shall any single or partial exercise of any right, power or
remedy preclude other or further exercise thereof, or the exercise of any other
right, power or remedy, nor shall any waiver of any single breach or default be
deemed a waiver of any other breach or default theretofore or thereafter
occurring. Any waiver, permit, consent or approval of any kind or character on
the part of the Lenders or Collateral Agent of any breach or default under this


                                      -65-

Giant Yorktown, Inc.                                              Loan Agreement


Loan Agreement must be specifically set forth in writing and must satisfy the
requirements set forth in SECTION 12.5 with respect to approval by the Lenders
and Collateral Agent.

     Section 12.3. Survival of Covenant. All representations, warranties and
covenants of Borrower under SECTIONS 2.1, 3.1, 3.2, 3.3, 3.4, 3.5, 4 and 5 shall
survive the expiration or termination of this Loan Agreement to the extent
arising prior to any such expiration or termination.

     SECTION 12.4. APPLICABLE LAW. THIS LOAN AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED UNDER THE LAWS OF NEW YORK WITHOUT REGARD TO CONFLICT OF LAW
PRINCIPLES (OTHER THAN TITLE 14 OF ARTICLE V OF THE NEW YORK GENERAL OBLIGATIONS
LAW).

     Section 12.5. Effect and Modification. This Loan Agreement and the other
Operative Documents exclusively and completely states the rights of the Lenders
and Borrower with respect to the Loans and the Mortgaged Property and supersedes
all prior agreements, oral or written, with respect thereto. No Operative
Document nor any of the terms thereof may be terminated, amended, supplemented,
waived or modified without the written agreement or consent of Collateral Agent,
Borrower and the Required Lenders, and in the case of the Parent Guaranty, the
Constituent Company Guaranty or any definition used therein, the Guarantors
affected thereby; provided, however, that SECTIONS 12.1 and 12.16 hereof may not
be terminated, amended, supplemented, waived or modified without the written
agreement or consent of the Arranger; and provided, further, that such
termination, amendment, supplement, waiver or modification shall require the
written agreement or consent of each Lender if such termination, amendment,
supplement, waiver or modification would:

                  (a)      modify any of the provisions of this SECTION 12.5,
         change the definition of "Required Lenders" or modify or waive any
         provision of an Operative Document requiring action by each Lender;

                  (b)      amend, modify, waive or supplement any of the
         provisions of SECTION 4.5 or 4.6 of this Loan Agreement;

                  (c)      reduce, modify, amend or waive any fees or
         indemnities in favor of any Lender, including without limitation
         amounts payable pursuant to SECTION 11 (except that any Person may
         consent to any reduction, modification, amendment or waiver of any
         indemnity payable to it);

                  (d)      modify, postpone, reduce or forgive, in whole or in
         part, any payment of principal or Interest (other than pursuant to the
         terms of the Operative Documents), or any Loan or Loan Balance (except
         that any Person may consent to any modification, postponement,
         reduction or forgiveness of any payment of any Fee payable to it) or,
         subject to clause (c) above, any other amount payable to it under this
         Loan Agreement, or modify the definition or method of calculation of
         Interest (other than pursuant to the terms of the Operative Documents),
         Loans or Loan Balances or any other definition


                                      -66-

Giant Yorktown, Inc.                                              Loan Agreement


         which would affect the amounts to be advanced or which are payable
         under the Operative Documents or extend, modify or amend the Loan Term;
         or

                  (e)      release of any Lien granted by Borrower under the
         Operative Documents or release the Parent Guaranty or the Constituent
         Companies Guaranty, except as provided in the Operative Documents.

         Notwithstanding the foregoing, neither the Parent Guaranty or the
Constituent Companies Guaranty nor any of the terms thereof may be amended,
modified or waived, unless such amendment, modification or waiver is in writing
entered into by, or approved in writing by the Required Lenders, the Collateral
Agent and the Guarantors.

         Notwithstanding the foregoing or anything contained in the Operative
Documents to the contrary, the Borrower and the Guarantors agree to enter into
any amendment or modification to the Operative Documents requested by the
Arranger in connection with the syndication of the Notes by the Arranger.

     Section 12.6. Notices. All demands, notices and other communications
hereunder shall be in writing and shall be deemed to have been duly given when
personally delivered or one Business Day after being sent by overnight delivery
service or three days after being deposited in the mail, certified mail postage
prepaid, or when sent by facsimile transmission, if confirmed by mechanical
confirmation and if a copy thereof is promptly thereafter personally delivered,
sent by overnight delivery service or so deposited in the mail, addressed to:
(A) Borrower, a Guarantor, Deed of Trust Trustee or Collateral Agent at the
address set forth below, or at such other address as may hereafter be furnished
in accordance with this SECTION 12.6 by either party to the other and (B) each
Lender at its address set forth in SCHEDULE IB:

            (i)   if to Borrower:

                      Giant Yorktown, Inc.
                      23733 North Scottsdale Road
                      Scottsdale, Arizona 85255-3410
                      Attention:  Treasurer
                      Facsimile:  (480) 585-8985
                      Telephone:  (480) 585-8888

           (ii)   if to a Guarantor:

                      c/o Giant Industries, Inc.
                      23733 North Scottsdale Road
                      Scottsdale, Arizona 85255-3410
                      Attention:  Treasurer
                      Facsimile:  (480) 585-8985
                      Telephone:  (480) 585-8888


                                      -67-

Giant Yorktown, Inc.                                              Loan Agreement


          (iii)   if to the Deed of Trust Trustee:

                      James W. DeBoer
                      c/o First American Title Insurance Company
                      1051 East Cary Street, Suite 1111
                      Richmond, Virginia  23219

           (iv)   if to the Collateral Agent:

                      Wells Fargo Bank Nevada,
                      National Association
                      79 South Main Street
                      Salt Lake City, Utah  84111

     Section 12.7. Consideration for Consents to Waivers and Amendments.
Borrower hereby agrees that it will not, and that it will not permit any of its
Affiliates to, offer or give any consideration or benefit of any kind whatsoever
to Collateral Agent or any Lender in connection with, in exchange for, or as an
inducement to, Collateral Agent or such Lender's consent to any waiver in
respect of, any modification or amendment of, any supplement to, or any other
consent or approval under, any Operative Document unless such consideration or
benefit is offered ratably to all Lenders.

     Section 12.8. Severability. Whenever possible, each provision of this Loan
Agreement shall be interpreted in such manner as to be effective and valid under
any Requirements of Law; but if any provision of this Loan Agreement shall be
prohibited by or invalid under any Requirements of Law, such provision shall be
ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of this
Loan Agreement.

     Section 12.9. Successors and Assigns. This Loan Agreement shall be binding
upon the parties hereto and their respective successors and assigns and shall
inure to the benefit of the parties hereto and their respective successors and
permitted assigns.

     Section 12.10. No Third-Party Beneficiaries. Other than as set forth in
SECTION 12.16, nothing in this Loan Agreement or the other Operative Documents
shall be deemed to create any right in any Person not a party hereto or thereto
(other than the permitted successors and assigns of Lenders and Borrower), and
such agreements shall not be construed in any respect to be a contract in whole
or in part for the benefit of any third party except as aforesaid.

     Section 12.11. Brokers. None of the parties has engaged or authorized any
broker, finder, investment banker or other third party to act on its behalf,
directly or indirectly, as a broker, finder, investment banker, agent or any
other like capacity in connection with this Loan Agreement or the transactions
contemplated hereby, except that Borrower has engaged Arranger pursuant to the
Arrangement Fee Letter.


                                      -68-

Giant Yorktown, Inc.                                              Loan Agreement


     Section 12.12. Captions; Table of Contents. Section captions and the table
of contents used in this Loan Agreement (including the Schedules, Exhibits and
Annexes hereto) are for convenience of reference only and shall not affect the
construction of this Loan Agreement.

     Section 12.13. Schedules and Exhibits. The Schedules, Annexes and Exhibits
hereto, along with all attachments referenced in any of such items are
incorporated herein by reference and made a part hereof.

     Section 12.14. Submission to Jurisdiction. Any suit by Collateral Agent or
any Lender to enforce any claim arising out of the Operative Documents may be
brought in any state or Federal court located in New York having subject matter
jurisdiction, and with respect to any such claim, each party to this Loan
Agreement hereby irrevocably: (a) submits to the jurisdiction of such courts;
(b) consents to the service of process out of said courts in the manner provided
for notices in SECTION 12.6; and (c) Borrower hereby (i) irrevocably appoints CT
Corporation System, with an address on date hereof at 111 Eighth Avenue, 13th
Floor, New York, New York 10011 (the "New York Process Agent"), as process agent
in its name, place and stead to receive and forward service of any and all
writs, summonses and other legal process in any suit, action or proceeding
brought in the State of New York, (ii) agrees that such service in any such
suit, action or proceeding may be made upon the New York Process Agent and (iii)
agrees to take all such action as may be necessary to continue said appointment
in full force and effect or to appoint another agent so that Borrower will at
all times have an agent in the State of New York for service of process for the
above purposes. Borrower irrevocably waives, to the fullest extent permitted by
law: (A) any claim, or any objection, that it now or hereafter may have, that
venue is not proper with respect to any such suit, action or proceeding brought
in such a court located in New York including, without limitation, any claim
that any such suit, action or proceeding brought in such court has been brought
in an inconvenient forum; and (B) any claim that Borrower is not subject to
personal jurisdiction or service of process in such forum. Borrower agrees that
any suit to enforce any claim arising out of the Operative Documents or any
course of conduct or dealing of Collateral Agent or any Lender shall be brought
and maintained exclusively in any state or Federal court located in New York.
Nothing in this SECTION 12.14 shall affect the right of Collateral Agent or any
Lender to bring any action or proceeding against Borrower or the Mortgaged
Property in the courts of any other jurisdiction. Borrower agrees that a final
judgment in any action or proceeding in a state or Federal court within the
United States may be enforced in any other jurisdiction by suit on the judgment
or in any other manner provided by law.

     Section 12.15. Jury Trial. Borrower, each Lender and Collateral Agent
waives any right to a trial by jury in any action or proceeding to enforce or
defend any rights under this Loan Agreement or any other Operative Document or
under any amendment, instrument, document or agreement delivered or which may in
the future be delivered in connection herewith or therewith or arising from any
relationship existing in connection with this Loan Agreement or any other
Operative Document and agrees that any such action or proceeding shall be tried
before a court and not before a jury.

     Section 12.16. Role of Banc of America Facilities Leasing, LLC. Each party
hereto acknowledges hereby that it is aware of the fact that Banc of America
Facilities Leasing, LLC


                                      -69-

Giant Yorktown, Inc.                                              Loan Agreement


has acted and is acting as an "arranger" with respect to the overall
transaction. The parties hereto acknowledge and agree that Arranger and its
Affiliates, including Bank of America, have not made any representations or
warranties concerning, and that they have not relied upon Arranger as to, the
tax, accounting or legal characterization or validity of (i) the Operative
Documents or (ii) any aspect of the overall transaction. The parties hereto
acknowledge and agree that Arranger has no duties, express or implied, under the
Operative Documents in its capacity as Arranger. The parties hereto further
agree that SECTION 12.1, SECTION 12.11 and this SECTION 12.16 are for the
express benefit of Arranger, and Arranger shall be entitled to rely thereon as
if it were a party hereto.

     Section 12.17. Amendment to Engagement Letter. The parties hereto agree
that the date "May 15, 2002" which appears in the second line of the seventh
paragraph of the Engagement Letter is changed to "June 30, 2002".

     Section 12.18. Survey. The Borrower agrees and covenants that it shall use
its best efforts to deliver a survey in compliance with SECTION 7.23 within
seven (7) days following the Closing Date, but in any event, no later than
fourteen (14) days following the Closing Date.


                                      -70-

Giant Yorktown, Inc.                                              Loan Agreement


         Executed and delivered as of this 14 day of May, 2002.

                                     GIANT YORKTOWN, INC., a Delaware
                                        corporation, as Borrower

                                     By:  /s/ Mark B. Cox
                                          ----------------------------------
                                        Name:  Mark B. Cox
                                        Its:  Vice President and Chief Financial
                                              Officer


                                      -71-

Giant Yorktown, Inc.                                              Loan Agreement


         Accepted and agreed to as of the date last above written.

                                     BANC OF AMERICA LEASING & CAPITAL, LLC,
                                        as Lender

                                     By:  /s/ James E. Stano
                                          ----------------------------------
                                        Name:  James E. Stano
                                        Title:  Managing Director


                                      -72-

Giant Yorktown, Inc.                                              Loan Agreement


                                     WELLS FARGO BANK NEVADA, NATIONAL
                                        ASSOCIATION, as Collateral Agent

                                     By:  /s/ Val T. Orton
                                          ----------------------------------
                                        Name:  Val T. Orton
                                        Title:  Trust Officer


                                      -73-

                                   SCHEDULE IA
                                TO LOAN AGREEMENT
                            DATED AS OF MAY 14, 2002

                              LENDERS' COMMITMENTS




                 LENDER                   COMMITMENT       COMMITMENT
                                          PERCENTAGE
                                                    





Banc of America Leasing & Capital, LLC       100%         $40,000,000


                                   SCHEDULE IB
                                TO LOAN AGREEMENT
                            DATED AS OF MAY 14, 2002

      1.   Collateral Agent

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

      Address for all communications:
      Wells Fargo Bank Nevada, National Association
      c/o Wells Fargo Bank Northwest, National Association
      79 South Main Street, 3rd Floor
      Salt Lake City, Utah  84111
      Attn:  Corporate Trust Department

      ABA #:  121-000-248
      Account No. 0510922115
      Reference:  Giant Yorktown

      Contact:  Eric Morgan
      Phone:  801-246-5289

      2.   Banc of America Leasing & Capital, LLC

      Address for all communications:
      Banc of America Leasing & Capital, LLC
      c/o Bank of America Leasing & Capital Group
      555 California Street, 4th Floor
      Mail Code CA5-705-04-01
      San Francisco, CA 94104
      Attn:  Contract Administration
      Tele 415.765.7391
      Fax 415.765.7373

      Address for wire transfers:
      Bank of America SF
      ABA# 121-000-358
      Account: 12578-03258
      Account Name: Banc of America Leasing & Capital, LLC
      Reference 1: Giant Yorktown, Inc.
      Reference 2: Identify the purpose of wire

                                  SCHEDULE IIA
                                TO LOAN AGREEMENT
                            DATED AS OF MAY 14, 2002

                        DESCRIPTION OF MORTGAGED PROPERTY

                                LEGAL DESCRIPTION

All that certain piece or parcel of land, together with any buildings and
improvements thereon and the appurtenances thereunto, situate lying and being in
the County of York, Virginia, and known and designated as Parcel A, containing
658.11+/- Acres, shown on plat entitled "Subdivision Plat of the Property of
BP-Amoco Corporation, Containing 736.57+/- Acres, Grafton District, County of
York, Virginia", dated March 25, 2002, prepared by Michael Surveying & Mapping,
P.C., which plat is recorded in the Clerk's Office of the Circuit Court of York
County, Virginia.

BEGINNING AT A POINT located on the northerly right of way line of Goodwin Neck
Road (State Route 173), said point being the corner of Parcel A and other
property now or formerly owned by BP-Amoco Corporation. Said point further being
described as being approximately 783 feet in a westerly direction along the
northerly right of way line of Goodwin Neck Road (State Route 173) from its
intersection with the westerly right of way line of Dandy Loop Road (State Route
629). Thence along the northerly right of way line of Goodwin Neck Road (State
Route 173), N 89(degree)30 [minutes] 22 [seconds] W a distance of 361.87 feet to
a point; Thence along a tangent curve to the left with a radius of 995.35 feet,
a arc distance of 99.46 feet, a central angle of 05(degree)43 [minutes] 31
[seconds], a chord bearing of S 87(degree)37 [minutes] 53 [seconds] W and a
chord distance of 99.42 feet to a point; Thence N 76(degree)08 [minutes] 58
[seconds] W a distance of 94.19 feet to a point; Thence S 62(degree)06 [minutes]
00 [seconds] W a distance of 145.97 feet to a point; Thence, along a non-tangent
curve to the left having a radius of 995.35 feet, an arc length of 34.91 feet, a
central angle of 02(degree)00 [minutes] 34 [seconds], a chord bearing of S
70(degree)46 [minutes] 32 [seconds] W and a chord distance of 34.91 feet to a
point at the corner of the property of Dandy Baptist Church;

Thence departing the northerly right of way line of Goodwin Neck Road (State
Route 173) and along the line of Dandy Baptist Church, N 27(degree)57  [minutes]
11 [seconds] W a distance of 39.75 feet to a point; Thence S 62(degree)02
[minutes] 49 [seconds] W a distance of 45.00 feet to a point; Thence N
27(degree)57 [minutes] 1 [seconds] W a distance of 75.08 feet to a point; Thence
S 62(degree)04 [minutes] 42 [seconds] W a distance of 120.01 feet to a point;
Thence S 27(degree)55 [minutes] 18 [seconds] E a distance of 103.23 feet to a
point on the northerly right of way line of Goodwin Neck Road (State Route 173);

Thence along the northerly right of way line of Goodwin Neck Road (State Route
173), S 64(degree)49 [minutes] 03 [seconds] W a distance of 382.83 feet to a
point; Thence, along a non-tangent curve to the left having a radius of 756.20
feet, an arc length of 148.37 feet, a central angle of 11(degree)14 [minutes] 30
[seconds], a chord bearing of S 59(degree)10 [minutes] 4 [seconds] W and a chord
distance of 148.13 feet to a point at the corner of the property of the
Commonwealth of Virginia;

Thence departing the northerly right of way line of Goodwin Neck Road (State
Route 173) and along the property of the Commonwealth of Virginia, S
80(degree)02 [minutes] 43 [seconds] W a distance of 389.01 feet to

a point; Thence N 84(degree)36 [minutes] 52 [seconds] W a distance of 14.70 feet
to a point; Thence S 11(degree)04 [minutes] 43 [seconds] E a distance of 486.73
feet to a point on the easterly right of way line of Goodwin Neck Road (State
Route 173);

Thence continuing along the right of way line of Goodwin Neck Road (State Route
173), along a non-tangent curve to the left having a radius of 756.20 feet, an
arc length of 101.84 feet, a central angle of 07(degree)42 [minutes] 58
[seconds], a chord bearing of S 01(degree)03 [minutes] 35 [seconds] W and a
chord distance of 101.76 feet to a point; Thence S 02(degree)49 [minutes] 10
[seconds] E a distance of 114.17 feet to a point; Thence along a non-tangent
curve to the right having a radius of 914.76 feet, an arc length of 1666.29
feet, a central angle of 104(degree)22 [minutes] 04 [seconds], a chord bearing
of S 49(degree)23 [minutes] 50 [seconds] W and a chord distance of 1445.29 feet
to a point; Thence N 78(degree)26 [minutes] 05 [seconds] W a distance of 2100.11
feet to a point; Thence along a non-tangent curve to the left having a radius of
1184.79 feet, an arc length of 1861.13 feet, a central angle of 90(degree)00
[minutes] 11 [seconds], a chord bearing of S 56(degree)36 [minutes] 36 [seconds]
W and a chord distance of 1675.59 feet to a point; Thence S 11(degree)38
[minutes] 30 [seconds] W a distance of 786.05 feet to a point at the corner of
the property of Virginia Electric and Power Company;

Thence departing the right of way line of Goodwin Neck Road (State Route 173)
and along the line of Virginia Electric and Power Company N 89(degree)59
[minutes] 27 [seconds] W a distance of 2259.89 feet to a point on the easterly
right of way line of Waterview Road;

Thence along the easterly right of way line of Waterview Road, N 06(degree)43
[minutes] 13 [seconds] E a distance of 196.54 feet to a point; Thence along a
tangent curve to the left with a radius of 975.37 feet, a arc distance of 280.67
feet, a central angle of 16(degree)29 [minutes] 15 [seconds], a chord bearing of
N 01(degree)31 [minutes] 25 [seconds] W and a chord distance of 279.70 feet to a
point at the corner of the property of Virginia Electric and Power Company;

Thence departing the easterly right of way line of Waterview Road and along the
line of the property of Virginia Electric and Power Company N 06(degree)43
[minutes] 13 [seconds] E a distance of 643.82 feet to a point; Thence N
72(degree)29 [minutes] 14 [seconds] E a distance of 43.86 feet to a point;
Thence N 06(degree)43 [minutes] 13 [seconds] E a distance of 643.48 feet to a
point; Thence N 89(degree)57 [minutes] 43 [seconds] E a distance of 488.04 feet
to a point; Thence N 57(degree)05 [minutes] 43 [seconds] E a distance of 363.10
feet to a point; Thence N 00(degree)01 [minutes] 44 [seconds] W a distance of
2299.17 feet to a point; Thence N 89(degree)58 [minutes] 47 [seconds] E a
distance of 1654.85 feet to a point; Thence N 00(degree)01 [minutes] 13
[seconds] W a distance of 845.90 feet to a point on the southerly right of way
line of Waterview Road;

Thence along the southerly right of way line of Waterview Road, N 84(degree)32
[minutes] 37 [seconds] E a distance of 1370.21 feet to a point; Thence S
06(degree)20 [minutes] 27 [seconds] E a distance of 9.91 feet to a point; Thence
N 84(degree)30 [minutes] 52 [seconds] E a distance of 644.89 feet to a point;
Thence, along a non-tangent curve to the right having a radius of 2025.57 feet,
an arc length of 295.86 feet, a central angle of 08(degree)22 [minutes] 08
[seconds], a chord bearing of N 88(degree)42 [minutes] 02 [seconds] E and a
chord distance of 295.60 feet to a point. Thence S 87(degree)06 [minutes] 54
[seconds] E a distance of 455.69 feet to a point; Thence S 02(degree)53
[minutes] 31 [seconds] W a distance of 39.93 feet to a point; Thence S
87(degree)06 [minutes] 38 [seconds] E a distance of 86.07 feet to a point;
Thence N 01(degree)55 [minutes] 08 [seconds] W a distance of 418+/- feet to a
point at the low water line of the York River;


                                      -2-

Thence along the low water line of the York River in a generally easterly
direction, approximately 3,860+/- feet to the line of Parcel B and other
property now or formerly owned by BP-Amoco Corporation;


                                      -3-

Thence departing the low water line of the York River and along Parcel B and
other property now or formerly owned by BP-Amoco Corporation, S 19(degree)12
[minutes] 39 [seconds] E a distance of 2681+/- feet to a point; Thence S
74(degree)17 [minutes] 53 [seconds] W a distance of 185.40 feet to a point;
Thence S 52(degree)20 [minutes] 27 [seconds] E a distance of 200.13 feet to the
POINT OF BEGINNING.

         Being part of the same property conveyed to Giant Yorktown, Inc., a
Delaware corporation by BP Products North America Inc., formerly known as Amoco
Oil Company, by deed recorded in the Clerk's Office of the Circuit Court of the
County of York, Virginia.

         The Property is located North of Goodwin Neck Road (State Route 173)
and South of the York River and East of Waterview Road.


                                      -4-

                                  SCHEDULE IIB
                                TO LOAN AGREEMENT
                            DATED AS OF MAY 14, 2002

                              REQUIRED PREPAYMENTS
                  TO BE MADE ON THE PAYMENT DATE OF EACH MONTH


                                                 
                  MONTHS 1-12                       $1,111,111

                  MONTHS 13-24                      $  666,667

                  MONTHS 25-36                      $1,111,111

                  FINAL PAYMENT AMOUNT              $5,333,332



                                  SCHEDULE III
                                TO LOAN AGREEMENT
                            DATED AS OF MAY 14, 2002

                         CONSTITUENT COMPANY GUARANTORS


                            Giant Mid-Continent, Inc.
                       Giant Stop-N-Go of New Mexico, Inc.
                            Giant Four Corners, Inc.
                            San Juan Refining Company
                             Phoenix Fuel Co., Inc.

                                   SCHEDULE IV
                                TO LOAN AGREEMENT
                            DATED AS OF MAY 14, 2002

                  SCHEDULED ADJUSTMENTS TO CONSOLIDATED EBITDA

         Consolidated EBITDA for the five (5) fiscal quarters ended on the dates
set forth below shall be adjusted as follows on a pro forma basis to take into
account the Yorktown Acquisition.



      FISCAL QUARTER ENDING:           PROFORMA ADJUSTMENT TO CONSOLIDATED
                                       EBITDA
                                    
      March 31, 2002                                $45,900,000
      June 30, 2002                                 $37,900,000
      September 30, 2002                            $24,600,000
      December 31, 2002                             $15,800,000
      March 31, 2003                                 $8,000,000


                                    EXHIBIT A
                                TO LOAN AGREEMENT

                             FORM OF PROMISSORY NOTE

                              GIANT YORKTOWN, INC.

         THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT
         OF 1933, AS AMENDED, OR ANY STATE SECURITIES OR "BLUE SKY"
         LAW, AND MAY NOT BE TRANSFERRED, SOLD OR OFFERED FOR SALE
         IN VIOLATION OF SUCH ACT OR LAWS.

$_____________                                           _______________,_____

         FOR VALUE RECEIVED, the undersigned, GIANT YORKTOWN, INC., a Delaware
corporation (the "Borrower"), promises to pay to the order of
___________________(the "Lender") on the Maturity Date for the Loans the
principal sum of _________________ DOLLARS ($ ________) or such lesser amount
thereof as shall be outstanding, as recorded either on the grid attached to this
Note or in the records of Lender (and such recordation shall constitute prima
facie evidence of the information as recorded; provided, however, that the
failure to make any such recordation shall not in any way affect the Borrower's
obligation to repay this Note). The principal amount of the Loan evidenced
hereby shall be payable on or prior to the Maturity Date as provided in that
certain Loan Agreement, dated as of May 14, 2002 (together with all amendments
and other modifications, if any, from time to time thereafter made thereto, the
"Loan Agreement"), among Borrower, Wells Fargo Bank Nevada, National
Association, as Collateral Agent, and the various financial institutions
(including the Lender) as are, or may from time to time become, parties thereto.

         Borrower also promises to pay interest on the unpaid principal amount
hereof from time to time outstanding from the date hereof until maturity
(whether by acceleration or otherwise) and, after maturity, until paid, at the
rates per annum and on the dates specified in the Loan Agreement.

         Payments of both principal and interest are to be made without setoff
or counterclaim in lawful money of the United States of America in same day or
immediately available funds to the Payment Office of the Collateral Agent
specified in the Loan Agreement (or to such other account as the Collateral
Agent may from time to time designate in a written notice to Borrower).

         This Note is one of the Notes referred to in, and evidences
indebtedness incurred under, the Loan Agreement, to which reference is made for
a statement of the terms and conditions on which Borrower is permitted and
required to make prepayments and repayments of principal of the indebtedness
evidenced by this Note and on which such indebtedness may be declared to be or
automatically become immediately due and payable. This Note is secured pursuant
to the Deed of Trust and reference is made to the Deed of Trust for a statement
of the terms and provisions of such security.

         The transfer, assignment or pledge of this Note or any interest herein
is subject to the provisions of the Loan Agreement.

         Capitalized terms used but not otherwise defined herein have the
respective meanings specified in the Loan Agreement.

         All parties hereto, whether as makers, endorsers, or otherwise,
severally waive presentment for payment, demand, protest and notice of dishonor.

                                  [END OF PAGE]
                            [SIGNATURE PAGES FOLLOW]


                                      -2-

         THIS NOTE HAS BEEN DELIVERED IN NEW YORK, NEW YORK AND SHALL BE DEEMED
TO BE A CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF
NEW YORK WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES (EXCEPT TITLE 14 OF
ARTICLE 5 OF THE NEW YORK GENERAL OBLIGATIONS LAW).

                                     GIANT YORKTOWN, INC., a Delaware
                                        corporation

                                     By: ____________________________________
                                        Name:
                                        Its:

                              GRID ATTACHED TO NOTE
                          DATED ___________ __, ____ OF
                              GIANT YORKTOWN, INC.
                             PAYABLE TO THE ORDER OF
                          [__________________________]

Loans made by the Lender to the Borrower, and payments of principal of such
Loans.



                                              OUTSTANDING
                                           PRINCIPAL BALANCE
DATE OF FUNDING OR    AMOUNT OF FUNDING   (AFTER SUCH FUNDING
      PAYMENT             OR PAYMENT          OR PAYMENT)       NOTATION MADE BY
- ------------------    -----------------   -------------------   ----------------
                                                       

EX-12.1

                                                                    Exhibit 12.1

                             GIANT INDUSTRIES, INC.

                COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
                          (DOLLAR AMOUNTS IN THOUSANDS)




                                                                                                              THREE MONTHS
                                                        YEAR ENDED DECEMBER 31,                              ENDED MARCH 31,
                                         -----------------------------------------------------------   ---------------------------
                                           2001                                                          2002
                                         PRO FORMA    2001      2000      1999      1998        1997   PRO FORMA     2002     2001
                                         ---------    ----      ----      ----      ----        ----   ---------     ----     ----
                                                                                                  
Income before income taxes per
   income statement ...................   $27,508   $20,108   $11,337   $16,456   $ (3,726)   $25,100   $(14,638)   $  209   $1,547

Add:
   Portion of rents representative
     of the interest factor ...........     2,820     2,820     3,672     4,045      1,875      1,118        451       451      871
   Interest on indebtedness ...........    44,698    24,098    24,411    23,417     25,464     18,139     11,150     6,003    6,043
   Amortization of debt issue costs ...       705       705       721       763        808        609        208       208      199
                                          -------   -------   -------   -------   --------    -------   --------    ------   ------
Income as adjusted ....................   $75,731   $47,731   $40,141   $44,681   $ 24,421    $44,966   $ (2,829)   $6,871   $8,660
                                          =======   =======   =======   =======   ========    =======   ========    ======   ======

Fixed charges
   Interest on indebtedness (A) .......   $44,698   $24,098   $24,411   $23,417   $ 25,464    $18,139   $ 11,150    $6,003   $6,043
   Amortization of debt issue costs (B)       705       705       721       763        808        609        208       208      199
   Capitalized interest (C) ...........        --        --        62       183        373        332         --        --       --
   Rents:
     Total for Company ................     8,459     8,459    11,017    12,134      5,624      3,354      1,353     1,353    2,614
     Portion of rents representative
       of the interest factor (D) .....     2,820     2,820     3,672     4,045      1,875      1,118        451       451      871
                                          -------   -------   -------   -------   --------    -------   --------    ------   ------
Fixed charges
   (A) + (B) + (C) + (D) ..............   $48,223   $27,623   $28,866   $28,408   $ 28,520    $20,198   $ 11,809    $6,662   $7,113
                                          =======   =======   =======   =======   ========    =======   ========    ======   ======
Ratio of earnings to fixed charges ....      1.57x     1.73x     1.39x     1.57x      0.86x      2.23x                1.03x    1.22x
                                          =======   =======   =======   =======   ========    =======   ========    ======   ======

Deficiency of earnings to cover
         fixed charges ................                                           $  4,099              $ 14,638
                                                                                  ========              ========

EX-21.1

                                                                    EXHIBIT 21.1

                                 SUBSIDIARIES OF
                             GIANT INDUSTRIES, INC.
                            (a Delaware corporation)




                                       Jurisdiction of   Names Under Which
  Subsidiary                           Incorporation     Company Does Business
  ----------                           ---------------   ---------------------
                                                   
  Giant Industries
    Arizona, Inc.                        Arizona         Giant Refining Company
                                                         Ciniza Pipe Line Company
                                                         Giant Transportation
                                                         Giant Service Stations
                                                         Giant Travel Center
                                                         TransWest Tank Lines
    - Giant Four Corners, Inc.*          Arizona
        - Navajo Convenient Stores
            Co., LLC**                   New Mexico
    - Giant Mid-Continent, Inc.*         Arizona
    - Phoenix Fuel Co., Inc.*            Arizona         Phoenix Fuel Company
                                                         Mesa Fuel Company
                                                         Tucson Fuel Company
                                                         Firebird Fuel Company
                                                         PFC Lubricants Company
    - DeGuelle Oil Company*              Colorado
    - Ciniza Production Company*         New Mexico
    - Giant Stop-N-Go of
        New Mexico, Inc.*                New Mexico
    - San Juan Refining Company*         New Mexico
    - Giant Pipeline Company*            New Mexico
    - Giant Yorktown, Inc.               Delaware
    - Giant Yorktown Holding Company     Delaware


 *   A wholly-owned subsidiary of Giant Industries Arizona, Inc.

**   Giant Four Corners, Inc. has a 66 2/3% interest in this entity.

EX-23.1

                                                                    EXHIBIT 23.1


                          INDEPENDENT AUDITORS' CONSENT

We consent to the use in this Registration Statement of Giant Industries, Inc.,
on Form S-4 of our report dated March 29, 2002, (except for Note 19, as to which
the date is July 12, 2002) appearing in the Prospectus, which is part of this
Registration Statement, and to the incorporation by reference in this
Registration Statement of our report dated March 29, 2002, (except for Note 19,
as to which the date is July 12, 2002), appearing in the Current Report on Form
8-K (dated July 15, 2002), and to the incorporation by reference of our report
dated March 29, 2002 related to the financial statement schedules incorporated
by reference on page 72 in Form 10-K in this Registration Statement.

We also consent to the reference to us under the heading "Experts" in such
Prospectus.


/s/ DELOITTE & TOUCHE LLP
- ------------------------------------
DELOITTE & TOUCHE LLP

Phoenix, Arizona
July 12, 2002

EX-23.2

                                                                    EXHIBIT 23.2


                        CONSENT OF INDEPENDENT AUDITORS

     We consent to the reference to our firm under the caption "Experts" in the
Registration Statement on Form S-4 and related Prospectus of Giant Industries,
Inc. for the registration of $200,000,000 11% Senior Subordinated Notes due 2012
and to the inclusion and incorporation by reference therein of our report dated
March 20, 2002, with respect to the financial statements of the Yorktown
Refinery of BP Corporation North America Inc. as of December 31, 2001 and 2000,
and for the years then ended, included in this Registration Statement and in
Giant Industries, Inc.'s Form 8-K dated May 14, 2002 filed with the Securities
and Exchange Commission.


/s/ Ernst & Young LLP
- -----------------------------
Ernst & Young LLP

Chicago, Illinois
July 15, 2002

EX-24.2

                                                                    EXHIBIT 24.2




                         BOARD OF DIRECTORS RESOLUTIONS
                         AUTHORIZING POWERS OF ATTORNEY



COMPANY

         RESOLVED FURTHER, that each officer or director of the Company who may
be required to execute the Registration Statement or any amendment or amendments
thereto to be filed with the Commission, is hereby authorized and empowered, in
the name and on behalf of the Company, to execute a power of attorney appointing
Fred Holliger, Morgan Gust, Mark Cox and Kim Bullerdick and each of them,
severally, his or her true and lawful attorney or attorney-in-fact and agent or
agents with the power to act, with or without the other, with full power of
substitution and resubstitution, for him or her and in his or her name, place or
stead, in his or her capacity as director or officer or both, as the case may
be, of the Company, to sign the Registration Statement and any and all
amendments thereto and all documents or instruments necessary, appropriate or
desirable to enable the Company to comply with the Act and the Rules and
Regulations, other federal and state securities laws and other applicable United
States and other laws in connection with the Exchange Offering, and to file the
same with the Commission with full power and authority to each of said
attorneys-in-fact to do and to perform, in the name and on behalf of each such
officer or director, or both, as the case may be, every act whatsoever necessary
or appropriate, as fully and for all intents and purposes as such officer or
director, or both, as the case may be, might or could do in person.


SUBSIDIARY GUARANTORS

         FURTHER RESOLVED, that each officer or director of the Corporation who
may be required to execute the Registration Statement or any amendment or
amendments thereto to be filed with the Commission, is hereby authorized and
empowered, in the name and on behalf of the Corporation, to execute a power of
attorney appointing Fred Holliger, Morgan Gust and Kim Bullerdick and each of
them, severally, his or her true and lawful attorney or attorney-in-fact and
agent or agents with the power to act, with or without the other, with full
power of substitution and resubstitution, for him or her and in his or her name,
place or stead, in his or her capacity as a director or officer or both, as the
case may be, of the Corporation, to sign the Registration Statement and any and
all amendments thereto and all documents or instruments necessary, appropriate
or desirable to enable the Corporation to comply with the 1933 Act and the rules
and regulations promulgated thereunder, other federal and state securities laws
and other applicable United States and other laws in connection with the
Exchange Offering, and to file the same with the Commission with full power and
authority to each of said attorneys-in-fact to do and to perform, in the name
and on behalf of each such officer or director, or both, as the case may be,
every act whatsoever necessary or appropriate, as fully and for all intents and
purposes as such officer or director, or both, as the case may be, might or
could do in person.

EX-25.1

                                                                    Exhibit 25.1


= = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = =

                                    FORM T-1

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                            STATEMENT OF ELIGIBILITY
                   UNDER THE TRUST INDENTURE ACT OF 1939 OF A
                    CORPORATION DESIGNATED TO ACT AS TRUSTEE

                      CHECK IF AN APPLICATION TO DETERMINE
                      ELIGIBILITY OF A TRUSTEE PURSUANT TO
                             SECTION 305(b)(2) |__|
                           ---------------------------

                              THE BANK OF NEW YORK

               (Exact name of trustee as specified in its charter)

New York                                                 13-5160382
(State of incorporation                                  (I.R.S. employer
if not a U.S. national bank)                             identification no.)

One Wall Street, New York, N.Y.                          10286
(Address of principal executive offices)                 (Zip code)

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


                             Giant Industries, Inc.

               (Exact name of obligor as specified in its charter)

Delaware                                                 86-0642718

(State or other jurisdiction of                          (I.R.S. employer
incorporation or organization)                           identification no.)

23733 North Scottsdale Road                              85255
Scottsdale, AZ
                                                         (Zip code)
(Address of principal executive offices)

                         Giant Industries Arizona, Inc.

               (Exact name of obligor as specified in its charter)

Arizona                                                  86-0218157

(State or other jurisdiction of                          (I.R.S. employer
incorporation or organization)                           identification no.)

23733 North Scottsdale Road                              85255
Scottsdale, AZ
                                                         (Zip code)
(Address of principal executive offices)



                            Ciniza Production Company

               (Exact name of obligor as specified in its charter)

New Mexico                                               74-2468207

(State or other jurisdiction of                          (I.R.S. employer
incorporation or organization)                           identification no.)

23733 North Scottsdale Road                              85255
Scottsdale, AZ
                                                         (Zip code)
(Address of principal executive offices)



                       Giant Stop-N-Go of New Mexico, Inc.

               (Exact name of obligor as specified in its charter)

New Mexico                                               85-0389396

(State or other jurisdiction of                          (I.R.S. employer
incorporation or organization)                           identification no.)

23733 North Scottsdale Road                              85255
Scottsdale, AZ
                                                         (Zip code)
(Address of principal executive offices)


                                      -2-

                            Giant Four Corners, Inc.

               (Exact name of obligor as specified in its charter)

Arizona                                                  86-0739055

(State or other jurisdiction of                          (I.R.S. employer
incorporation or organization)                           identification no.)

23733 North Scottsdale Road                              85255
Scottsdale, AZ
                                                         (Zip code)
(Address of principal executive offices)



                             Phoenix Fuel Co., Inc.

               (Exact name of obligor as specified in its charter)

Arizona                                                  86-0109486

(State or other jurisdiction of                          (I.R.S. employer
incorporation or organization)                           identification no.)

23733 North Scottsdale Road                              85255
Scottsdale, AZ
                                                         (Zip code)
(Address of principal executive offices)



                            San Juan Refining Company

               (Exact name of obligor as specified in its charter)

New Mexico                                               74-2759385

(State or other jurisdiction of                          (I.R.S. employer
incorporation or organization)                           identification no.)

23733 North Scottsdale Road                              85255
Scottsdale, AZ
                                                         (Zip code)
(Address of principal executive offices)


                                      -3-

                            Giant Mid-Continent, Inc.

               (Exact name of obligor as specified in its charter)

Arizona                                                  86-0784398

(State or other jurisdiction of                          (I.R.S. employer
incorporation or organization)                           identification no.)

23733 North Scottsdale Road                              85255
Scottsdale, AZ
                                                         (Zip code)
(Address of principal executive offices)



                             Giant Pipeline Company

               (Exact name of obligor as specified in its charter)

New Mexico                                               85-0467397

(State or other jurisdiction of                          (I.R.S. employer
incorporation or organization)                           identification no.)

23733 North Scottsdale Road                              85255
Scottsdale, AZ
                                                         (Zip code)
(Address of principal executive offices)



                              DeGuelle Oil Company

               (Exact name of obligor as specified in its charter)

Colorado                                                 84-0791921

(State or other jurisdiction of                          (I.R.S. employer
incorporation or organization)                           identification no.)

23733 North Scottsdale Road                              85255
Scottsdale, AZ
                                                         (Zip code)
(Address of principal executive offices)


                                      -4-

                              Giant Yorktown, Inc.

               (Exact name of obligor as specified in its charter)

Delaware                                                 27-0003663

(State or other jurisdiction of                          (I.R.S. employer
incorporation or organization)                           identification no.)

23733 North Scottsdale Road                              85255
Scottsdale, AZ
                                                         (Zip code)
(Address of principal executive offices)



                         Giant Yorktown Holding Company

               (Exact name of obligor as specified in its charter)

Delaware

(State or other jurisdiction of                          (I.R.S. employer
incorporation or organization)                           identification no.)

23733 North Scottsdale Road                              85255
Scottsdale, AZ
                                                         (Zip code)
(Address of principal executive offices)

                                   ----------

                     11% Senior Subordinated Notes due 2012

                       (Title of the indenture securities)

= = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = =


                                      -5-

1.    GENERAL INFORMATION. FURNISH THE FOLLOWING INFORMATION AS TO THE TRUSTEE:

      (a)   NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISING AUTHORITY TO WHICH
            IT IS SUBJECT.




- --------------------------------------------------------------------------------------------------
                    Name                                                     Address
- --------------------------------------------------------------------------------------------------
                                                            
      Superintendent of Banks of the State of                  2 Rector Street, New York, N.Y.
      New York                                                 10006, and Albany, N.Y. 12203

      Federal Reserve Bank of New York                         33 Liberty Plaza, New York, N.Y.
                                                               10045

      Federal Deposit Insurance Corporation                    Washington, D.C.  20429

      New York Clearing House Association                      New York, New York   10005


      (b)   WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST POWERS.

      Yes.

2.    AFFILIATIONS WITH OBLIGOR.

      IF THE OBLIGOR IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH SUCH
      AFFILIATION.

      None.

16.   LIST OF EXHIBITS.

      EXHIBITS IDENTIFIED IN PARENTHESES BELOW, ON FILE WITH THE COMMISSION, ARE
      INCORPORATED HEREIN BY REFERENCE AS AN EXHIBIT HERETO, PURSUANT TO RULE
      7a-29 UNDER THE TRUST INDENTURE ACT OF 1939 (THE "ACT") AND 17 C.F.R.
      229.10(d).

      1.    A copy of the Organization Certificate of The Bank of New York
            (formerly Irving Trust Company) as now in effect, which contains the
            authority to commence business and a grant of powers to exercise
            corporate trust powers. (Exhibit 1 to Amendment No. 1 to Form T-1
            filed with Registration Statement No. 33-6215, Exhibits 1a and 1b to
            Form T-1 filed with Registration Statement No. 33-21672 and Exhibit
            1 to Form T-1 filed with Registration Statement No. 33-29637.)

      4.    A copy of the existing By-laws of the Trustee. (Exhibit 4 to Form
            T-1 filed with Registration Statement No. 33-31019.)

      6.    The consent of the Trustee required by Section 321(b) of the Act.
            (Exhibit 6 to Form T-1 filed with Registration Statement No.
            33-44051.)


                                      -6-

      7.    A copy of the latest report of condition of the Trustee published
            pursuant to law or to the requirements of its supervising or
            examining authority.


                                      -7-

                                   SIGNATURE


         Pursuant to the requirements of the Act, the Trustee, The Bank of New
York, a corporation organized and existing under the laws of the State of New
York, has duly caused this statement of eligibility to be signed on its behalf
by the undersigned, thereunto duly authorized, all in The City of New York, and
State of New York, on the 11th day of July, 2002.


                                           THE BANK OF NEW YORK


                                           By:  /S/ MING SHIANG
                                                ------------------------------
                                                Name: Ming Shiang
                                                Title:  Vice President


                                      -8-

                                                                       EXHIBIT 7

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

                       Consolidated Report of Condition of

                              THE BANK OF NEW YORK

                    of One Wall Street, New York, N.Y. 10286
                     And Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System, at the close of business March 31, 2002,
published in accordance with a call made by the Federal Reserve Bank of this
District pursuant to the provisions of the Federal Reserve Act.



                                                                          Dollar Amounts
                                                                           In Thousands
                                                                       
ASSETS

Cash and balances due from depository institutions:
   Noninterest-bearing balances and currency and coin..                      $ 3,765,462
   Interest-bearing balances...........................                        3,835,061
Securities:
   Held-to-maturity securities.........................                        1,232,736
   Available-for-sale securities.......................                       10,522,833
Federal funds sold and Securities purchased under
   agreements to resell................................                        1,456,635
Loans and lease financing receivables:
   Loans and leases held for sale................                                801,505
   Loans and leases, net of unearned
     income...............46,206,726
   LESS: Allowance for loan and
     lease losses............607,115
   Loans and leases, net of unearned
     income and allowance..............................                       35,249,695
Trading Assets.........................................                        8,132,696
Premises and fixed assets (including capitalized
   leases).............................................                          898,980
Other real estate owned................................                              911
Investments in unconsolidated subsidiaries and
   associated companies................................                          220,609
Customers' liability to this bank on acceptances
   outstanding.........................................                          574,020
Intangible assets......................................
   Goodwill............................................                        1,714,761
   Other intangible assets.............................                           49,213
Other assets...........................................                        5,001,308
                                                                             -----------


                                                                          
Total assets...........................................                      $73,954,859
                                                                             ===========
LIABILITIES
Deposits:
   In domestic offices.................................                      $29,175,631
   Noninterest-bearing.......................11,070,277
   Interest-bearing..........................18,105,354
   In foreign offices, Edge and Agreement
     subsidiaries, and IBFs............................                       24,596,600
   Noninterest-bearing..........................321,299
   Interest-bearing..........................24,275,301
Federal funds purchased and securities sold under
   agreements to repurchase............................                        1,922,197
Trading liabilities....................................                        1,970,040
Other borrowed money:
   (includes mortgage indebtedness and obligations
   under capitalized leases).......                                            1,577,518
Bank's liability on acceptances executed and
   outstanding.........................................                          575,362
Subordinated notes and debentures......................                        1,940,000
Other liabilities......................................                        5,317,831
                                                                             -----------
Total liabilities......................................                      $67,075,179
                                                                             ===========
EQUITY CAPITAL
Common stock...........................................                        1,135,284
Surplus................................................                        1,055,508
Retained earnings......................................                        4,227,287
Accumulated other comprehensive income.........                                  (38,602)
Other equity capital components.....................                                   0
- ----------------------------------------------------------------------------------------
Total equity capital...................................                        6,379,477
                                                                             -----------
Total liabilities and equity capital...................                      $73,954,859
                                                                             ===========




      I, Thomas J. Mastro, Senior Vice President and Comptroller of the
above-named bank do hereby declare that this Report of Condition has been
prepared in conformance with the instructions issued by the Board of Governors
of the Federal Reserve System and is true to the best of my knowledge and
belief.

                                                     Thomas J. Mastro,
                                 Senior Vice President and Comptroller

      We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us and to the best of our
knowledge and belief has been

prepared in conformance with the instructions issued by the Board of Governors
of the Federal Reserve System and is true and correct.


Thomas A. Renyi
Gerald L. Hassell
Alan R. Griffith                             Directors

EX-99.1

                                                                    EXHIBIT 99.1

                             LETTER OF TRANSMITTAL

                       OFFER FOR ANY AND ALL OUTSTANDING
                     11% SENIOR SUBORDINATED NOTES DUE 2012
                                IN EXCHANGE FOR
                     11% SENIOR SUBORDINATED NOTES DUE 2012
          WHICH HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933
              PURSUANT TO THE PROSPECTUS DATED             , 2002

       THE EXCHANGE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M.,
 NEW YORK CITY TIME, ON           , 2002, UNLESS THE OFFER IS EXTENDED. TENDERS
            MAY BE WITHDRAWN PRIOR TO 5:00 P.M., NEW YORK CITY TIME,
                            ON THE EXPIRATION DATE.

                 The Exchange Agent For The Exchange Offer Is:

                              THE BANK OF NEW YORK

                                                          
 By Hand Or Overnight Delivery     Facsimile Transmissions:       By Registered Or Certified
                                 (Eligible Institutions Only)                Mail:
     The Bank of New York
      101 Barclay Street                (212) 571-3080               The Bank of New York
Corporate Trust Services Window                                     101 Barclay Street, 7E
         Ground Level               To Confirm by Telephone        New York, New York 10286
   New York, New York 10286         or for Information Call        Attention: Reorganization
   Attention: Reorganization                                                Section
            Section                     (212) 815-6333



  DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET FORTH
 ABOVE OR TRANSMISSION OF THIS LETTER OF TRANSMITTAL VIA FACSIMILE TO A NUMBER
      OTHER THAN AS SET FORTH ABOVE DOES NOT CONSTITUTE A VALID DELIVERY.

     The undersigned acknowledges that he or she has received the Prospectus,
dated           , 2002 (the "Prospectus"), of Giant Industries, Inc., a Delaware
corporation ("Giant"), and this Letter of Transmittal, which together constitute
Giant's offer (the "Exchange Offer") to exchange an aggregate principal amount
of up to $200,000,000 of 11% Senior Subordinated Notes due 2012, which have been
registered under the Securities Act of 1933, as amended (the "Securities Act")
(the "Exchange Notes") for a like principal amount of the issued and outstanding
11% Senior Subordinated Notes due 2012 (the "Notes") of Giant from the holders
thereof.

     THE INSTRUCTIONS CONTAINED HEREIN SHOULD BE READ CAREFULLY BEFORE THIS
LETTER OF TRANSMITTAL IS COMPLETED.

     Capitalized terms used but not defined herein shall have the same meaning
given them in the Prospectus (as defined below).

     This Letter of Transmittal is to be completed by holders of Notes either if
Notes are to be forwarded herewith or if tenders of Notes are to be made by
book-entry transfer to an account maintained by The Bank of New York (the
"Exchange Agent") at The Depository Trust Company (the "Book-Entry Transfer
Facility" or "DTC") pursuant to the procedures set forth in "The Exchange
Offer -- Exchange Offer Procedures" in the Prospectus.


     Holders of Notes whose certificates (the "Certificates") for such Notes are
not immediately available or who cannot deliver their Certificates and all other
required documents to the Exchange Agent on or prior to the Expiration Date (as
defined in the Prospectus) or who cannot complete the procedures for book-entry
transfers on a timely basis, must tender their Notes according to the guaranteed
delivery procedures set forth in "The Exchange Offer -- Guaranteed Delivery
Procedures" in the Prospectus.

     DELIVERY OF DOCUMENTS TO THE BOOK-ENTRY TRANSFER FACILITY DOES NOT
CONSTITUTE DELIVERY TO THE EXCHANGE AGENT.

                    NOTE: SIGNATURES MUST BE PROVIDED BELOW
              PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY

     The undersigned has completed the appropriate boxes below and signed this
Letter of Transmittal to indicate the action the undersigned desires to take
with respect to the Exchange Offer.



- ---------------------------------------------------------------------------------------------------
                    DESCRIPTION OF NOTES                           1            2            3
- ---------------------------------------------------------------------------------------------------
                                                                            AGGREGATE
                                                                            PRINCIPAL    PRINCIPAL
      NAME(S) AND ADDRESS(ES) OF REGISTERED HOLDER(S):        CERTIFICATE    AMOUNT      AMOUNT OF
                 (PLEASE FILL IN, IF BLANK)                   NUMBER(S)*    OF NOTES       NOTES
- ---------------------------------------------------------------------------------------------------
                                                                               

                                                                                        Tendered**
                                                              -----------------------------------

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

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

                                                              -----------------------------------
                                                              TOTAL
- ---------------------------------------------------------------------------------------------------
  * Need not be completed if Notes are being tendered by book-entry holders.
 ** Notes may be tendered in whole or in part in integral multiples of $1,000. See Instruction 4.
    Unless otherwise indicated in the column, a holder will be deemed to have tendered all Notes
    represented by Notes indicated in Column 2. See Instruction 4.
- ---------------------------------------------------------------------------------------------------


                                        2


           (BOXES BELOW TO BE CHECKED BY ELIGIBLE INSTITUTIONS ONLY)

[ ]  CHECK HERE IF TENDERED NOTES ARE BEING DELIVERED BY BOOKENTRY TRANSFER MADE
     TO THE ACCOUNT MAINTAINED BY THE EXCHANGE AGENT WITH THE BOOK-ENTRY
     TRANSFER FACILITY AND COMPLETE THE FOLLOWING:

     Name of Tendering Institution
    ----------------------------------------------------------------------------

     Account Number ---------------      Transaction Code Number ---------------

[ ]  CHECK HERE AND ENCLOSE A PHOTOCOPY OF THE NOTICE OF GUARANTEED DELIVERY IF
     TENDERED NOTES ARE BEING DELIVERED PURSUANT TO A NOTICE OF GUARANTEED
     DELIVERY PREVIOUSLY SENT TO THE EXCHANGE AGENT AND COMPLETE THE FOLLOWING:

     Name of Registered Holder(s)
    ----------------------------------------------------------------------------

     Window Ticket Number (if any)
 -------------------------------------------------------------------------------

     Date of Execution of Notice of Guaranteed Delivery
    ----------------------------------------------------------

     Name of Institution which Guaranteed Delivery
    ---------------------------------------------------------------

     IF GUARANTEED DELIVERY IS TO BE MADE BY BOOK-ENTRY TRANSFER:

     Name of Tendering Institution
    ----------------------------------------------------------------------------

     Account Number ---------------      Transaction Code Number ---------------

[ ]  CHECK HERE IF TENDERED BY BOOK-ENTRY TRANSFER AND NON-EXCHANGED NOTES ARE
     TO BE RETURNED BY CREDITING THE BOOK-ENTRY TRANSFER FACILITY ACCOUNT NUMBER
     SET FORTH ABOVE.

[ ]  CHECK HERE IF YOU ARE A BROKER-DEALER WHO ACQUIRED THE NOTES FOR ITS OWN
     ACCOUNT AS A RESULT OF MARKET MAKING OR OTHER TRADING ACTIVITIES (A
     "PARTICIPATING BROKER-DEALER") AND WISH TO RECEIVE 10 ADDITIONAL COPIES OF
     THE PROSPECTUS AND 10 COPIES OF ANY AMENDMENTS OR SUPPLEMENTS THERETO.

     Name:
    ----------------------------------------------------------------------------

     Address:
    ----------------------------------------------------------------------------

                                        3


Ladies and Gentlemen:

     Upon the terms and subject to the conditions of the Exchange Offer, the
undersigned hereby tenders to Giant the above-described aggregate principal
amount of Giant's Notes in exchange for a like aggregate principal amount of
Giant's Exchange Notes which have been registered under the Securities Act upon
the terms and subject to the conditions set forth in the Prospectus dated
          , 2002 (as the same may be amended or supplemented from time to time,
the "Prospectus"), receipt of which is acknowledged, and in this Letter of
Transmittal (which, together with the Prospectus, constitute the "Exchange
Offer").

     Subject to and effective upon the acceptance for exchange of all or any
portion of the Notes tendered herewith in accordance with the terms and
conditions of the Exchange Offer (including, if the Exchange Offer is extended
or amended, the terms and conditions of any such extension or amendment), the
undersigned hereby sells, assigns and transfers to or upon the order of Giant
all right, title and interest in and to such Notes as are being tendered
herewith. The undersigned hereby irrevocably constitutes and appoints the
Exchange Agent as its agent and attorney-in-fact (with full knowledge that the
Exchange Agent is also acting as agent of Giant in connection with the Exchange
Offer) with respect to the tendered Notes, with full power of substitution (such
power of attorney being deemed to be an irrevocable power coupled with an
interest) subject only to the right of withdrawal described in the Prospectus,
to (i) deliver Certificates for Notes to Giant together with all accompanying
evidences of transfer and authenticity to, or upon the order of, Giant, upon
receipt by the Exchange Agent, as the undersigned's agent, of the Exchange Notes
to be issued in exchange for such Notes, (ii) present Certificates for such
Notes for transfer, and to transfer the Notes on the books of Giant, and (iii)
receive for the account of Giant all benefits and otherwise exercise all rights
of beneficial ownership of such Notes, all in accordance with the terms and
conditions of the Exchange Offer.

     THE UNDERSIGNED HEREBY REPRESENTS AND WARRANTS THAT THE UNDERSIGNED HAS
FULL POWER AND AUTHORITY TO TENDER, EXCHANGE, SELL, ASSIGN AND TRANSFER THE
NOTES TENDERED HEREBY AND THAT, WHEN THE SAME ARE ACCEPTED FOR EXCHANGE, GIANT
WILL ACQUIRE GOOD, MARKETABLE AND UNENCUMBERED TITLE THERETO, FREE AND CLEAR OF
ALL LIENS, RESTRICTIONS, CHARGES AND ENCUMBRANCES, AND THAT THE NOTES TENDERED
HEREBY ARE NOT SUBJECT TO ANY ADVERSE CLAIMS OR PROXIES. THE UNDERSIGNED WILL,
UPON REQUEST, EXECUTE AND DELIVER ANY ADDITIONAL DOCUMENTS DEEMED BY GIANT OR
THE EXCHANGE AGENT TO BE NECESSARY OR DESIRABLE TO COMPLETE THE EXCHANGE,
ASSIGNMENT AND TRANSFER OF THE NOTES TENDERED HEREBY, AND THE UNDERSIGNED WILL
COMPLY WITH ITS OBLIGATIONS UNDER THE REGISTRATION RIGHTS AGREEMENT. THE
UNDERSIGNED HAS READ AND AGREES TO ALL OF THE TERMS OF THE EXCHANGE OFFER.

     The name(s) and address(es) of the registered holder(s) of the Notes
tendered hereby should be printed above, if they are not already set forth
above, as they appear on the Certificates representing such Notes. The
Certificate number(s) and the Notes that the undersigned wishes to tender should
be indicated in the appropriate boxes above.

     If any tendered Notes are not exchanged pursuant to the Exchange Offer for
any reason, or if Certificates are submitted for more Notes than are tendered or
accepted for exchange, Certificates for such non-exchanged Notes will be
returned (or, in the case of Notes tendered by book-entry transfer, such Notes
will be credited to an account maintained at DTC), without expense to the
tendering holder, promptly following the expiration or termination of the
Exchange Offer.

     The undersigned understands that tenders of Notes pursuant to any one of
the procedures describe in "The Exchange Offer -- Exchange Offer Procedures" in
the Prospectus and in the instruction, attached hereto will, upon Giant's
acceptance for exchange of such tendered notes, constitute a binding agreement
between the undersigned and Giant upon the terms and subject to the conditions
of the Exchange Offer. The undersigned recognizes that, under certain
circumstances set forth in the Prospectus, Giant may not be required to accept
for exchange any of the Notes tendered hereby.

                                        4


     Unless otherwise indicated herein in the box entitled "Special Issuance
Instructions" below, the undersigned hereby directs that the Exchange Notes be
issues in the name(s) of the undersigned or, in the case of a book-entry
transfer of Notes, that such Exchange Notes be credited to the account indicated
above maintained at DTC. If applicable, substitute Certificates representing
Notes not exchanged or not accepted for exchange will be issued to the
undersigned or, in the case of a book-entry transfer of Notes will be credited
to the account indicated above maintained at DTC. Similarly, unless otherwise
indicated under "Special Delivery Instructions," please deliver Exchange Notes
to the undersigned at the address shown below the undersigned's signature.

     BY TENDERING NOTES AND EXECUTING THIS LETTER OF TRANSMITTAL, THE
UNDERSIGNED HEREBY REPRESENTS AND AGREES THAT: (I) THE UNDERSIGNED IS NOT AN
"AFFILIATE" OF GIANT OR, IF IT IS SUCH AN AFFILIATE, THAT THE EXCHANGE NOTES MAY
NOT BE OFFERED FOR RESALE, RESOLD OR OTHERWISE TRANSFERRED WITHOUT REGISTRATION
UNDER AND COMPLIANCE WITH THE PROSPECTUS DELIVERY REQUIREMENT OF THE SECURITIES
ACT OR AN EXEMPTION THEREFROM; (II) ANY EXCHANGE NOTES TO BE RECEIVED BY THE
UNDERSIGNED ARE BEING ACQUIRED IN THE ORDINARY COURSE OF ITS BUSINESS; (III) THE
UNDERSIGNED IS NOT ENGAGING IN AND DOES NOT INTEND TO ENGAGE IN A DISTRIBUTION
(WITHIN THE MEANING OF THE SECURITIES ACT) OF EXCHANGE NOTES TO BE RECEIVED IN
THE EXCHANGE OFFER; (IV) THE UNDERSIGNED HAS NO ARRANGEMENT OR UNDERSTANDING
WITH ANY PERSON TO PARTICIPATE IN A DISTRIBUTION (WITHIN THE MEANING OF THE
SECURITIES ACT) OF EXCHANGE NOTES TO BE RECEIVED IN THE EXCHANGE OFFER; (V) IF
THE UNDERSIGNED IS NOT A BROKER-DEALER, THE UNDERSIGNED IS NOT ENGAGED IN, AND
DOES NOT INTEND TO ENGAGE IN, A DISTRIBUTION (WITHIN THE MEANING OF THE
SECURITIES ACT) OF SUCH EXCHANGE NOTES; AND (VI) THE UNDERSIGNED IS NOT ACTING
ON BEHALF OF ANY PERSON OR ENTITY WHICH COULD NOT TRUTHFULLY MAKE THE ABOVE
REPRESENTATIONS. BY TENDERING NOTES PURSUANT TO THE EXCHANGE OFFER AND EXECUTING
THIS LETTER OF TRANSMITTAL, A HOLDER OF NOTES WHICH IS A BROKER-DEALER
REPRESENTS AND AGREES, CONSISTENT WITH CERTAIN INTERPRETIVE LETTERS ISSUED BY
THE STAFF OF THE DIVISION OF CORPORATION FINANCE OF THE SECURITIES AND EXCHANGE
COMMISSION TO THIRD PARTIES, THAT (A) SUCH NOTES HELD BY THE BROKER-DEALER ARE
HELD ONLY AS A NOMINEE, OR (B) SUCH NOTES WERE ACQUIRED BY SUCH BROKER-DEALER
FOR ITS OWN ACCOUNT AS A RESULT OF MARKET-MAKING ACTIVITIES OR OTHER TRADING
ACTIVITIES AND IT WILL DELIVER THE PROSPECTUS (AS AMENDED OR SUPPLEMENTED FROM
TIME TO TIME) MEETING THE REQUIREMENTS OF THE SECURITIES ACT IN CONNECTION WITH
ANY RESALE OF SUCH EXCHANGE NOTES (PROVIDED THAT, BY SO ACKNOWLEDGING AND BY
DELIVERING A PROSPECTUS, SUCH BROKER-DEALER WILL NOT BE DEEMED TO ADMIT THAT IT
IS AN "UNDERWRITER" WITHIN THE MEANING OF THE SECURITIES ACT).

     GIANT HAS AGREED THAT, SUBJECT TO THE PROVISIONS OF THE REGISTRATION RIGHTS
AGREEMENT, THE PROSPECTUS, AS IT MAY BE AMENDED OR SUPPLEMENTED FROM TIME TO
TIME, MAY BE USED BY A PARTICIPATING BROKER-DEALER (AS DEFINED BELOW) IN
CONNECTION WITH RESALES OF EXCHANGE NOTES RECEIVED IN EXCHANGE FOR NOTES, WHERE
SUCH NOTES WERE ACQUIRED BY SUCH PARTICIPATING BROKER-DEALER FOR ITS OWN ACCOUNT
AS A RESULT OF MARKET-MAKING ACTIVITIES OR OTHER TRADING ACTIVITIES, FOR A
PERIOD ENDING ON THE EARLIER OF (I) 180 DAYS AFTER THE EXCHANGE OFFER
REGISTRATION STATEMENT IS DECLARED EFFECTIVE OR (II) THE DATE ON WHICH A
BROKER-DEALER IS NO LONGER REQUIRED TO DELIVER A PROSPECTUS IN CONNECTION WITH
MARKET-MAKING OR OTHER TRADING ACTIVITIES. IN THAT REGARD, EACH BROKER-DEALER
WHO ACQUIRED NOTES FOR ITS OWN ACCOUNT AS A RESULT OF MARKET-MAKING OR OTHER
TRADING ACTIVITIES (A "PARTICIPATING BROKER-DEALER"), BY TENDERING SUCH NOTES
AND EXECUTING THIS LETTER OF TRANSMITTAL, AGREES THAT, UPON RECEIPT OF NOTICE
FROM GIANT OF THE OCCURRENCE OF ANY EVENT OR THE DISCOVERY OF ANY FACT WHICH
MAKES ANY STATEMENT CONTAINED OR INCORPORATED BY REFERENCE IN
                                        5


THE PROSPECTUS UNTRUE IN ANY MATERIAL RESPECT OR WHICH CAUSES THE PROSPECTUS TO
OMIT TO STATE A MATERIAL FACT NECESSARY IN ORDER TO MAKE THE STATEMENTS
CONTAINED OR INCORPORATED BY REFERENCE THEREIN, IN LIGHT OF THE CIRCUMSTANCES
UNDER WHICH THEY WERE MADE, NOT MISLEADING OR OF THE OCCURRENCE OF CERTAIN OTHER
EVENTS SPECIFIED IN THE REGISTRATION RIGHTS AGREEMENT, SUCH PARTICIPATING
BROKER-DEALER WILL SUSPEND THE SALE OF EXCHANGE NOTES PURSUANT TO THE PROSPECTUS
UNTIL GIANT HAS AMENDED OR SUPPLEMENTED THE PROSPECTUS TO CORRECT SUCH
MISSTATEMENT OR OMISSION AND HAS FURNISHED COPIES OF THE AMENDED OR SUPPLEMENTED
PROSPECTUS TO THE PARTICIPATING BROKER-DEALER OR GIANT HAS GIVEN NOTICE THAT THE
SALE OF EXCHANGE NOTES MAY BE RESUMED, AS THE CASE MAY BE. IF GIANT GIVES SUCH
NOTICE TO SUSPEND THE SALE OF EXCHANGE NOTES, IT SHALL EXTEND THE 180-DAY OR
SHORTER PERIOD REFERRED TO ABOVE DURING WHICH PARTICIPATING BROKER-DEALERS ARE
ENTITLED TO USE THE PROSPECTUS IN CONNECTION WITH THE RESALE OF EXCHANGE NOTES
BY THE NUMBER OF DAYS DURING THE PERIOD FROM AND INCLUDING THE DATE OF THE
GIVING OF SUCH NOTICE TO AND INCLUDING THE DATE WHEN PARTICIPATING
BROKER-DEALERS SHALL HAVE RECEIVED COPIES OF THE SUPPLEMENTED OR AMENDED
PROSPECTUS NECESSARY TO PERMIT RESALES OF EXCHANGE NOTES OR TO AND INCLUDING THE
DATE ON WHICH GIANT HAS GIVEN NOTICE THAT THE SALE OF EXCHANGE NOTES MAY BE
RESUMED, AS THE CASE MAY BE.

     Holders of Notes whose Notes are accepted for exchange will not receive
accrued interest on such Notes for any period from and after the last Interest
Payment Date to which interest has been paid or duly provided for on such Notes
prior to the original issue date of the Exchange Notes or, if no such interest
has been paid or duly provided for, will not receive any accrued interest on
such Notes, and the undersigned waives the right to receive any interest on such
Notes accrued from and after such Interest Payment Date or, if no such interest
has been paid or duly provided for, from and after May 14, 2002. The Exchange
Notes will bear interest from the most recent Interest Payment Date to which
interest has been paid on the Notes or, if no interest has been paid, from May
14, 2002.

     The undersigned will, upon request, execute and deliver any additional
documents deemed by Giant or the Exchange Agent to be necessary or desirable to
complete the sale, assignment and transfer of the Notes tendered hereby. All
authority herein conferred or agreed to be conferred in this Letter of
Transmittal shall survive the death or incapacity of the undersigned and any
obligation of the undersigned hereunder shall be binding upon the heirs,
executors, administrators, personal representatives, trustees in bankruptcy,
legal representatives, successors and assigns of the undersigned. Except as
stated in the Prospectus, this tender is irrevocable.

     THE UNDERSIGNED, BY COMPLETING THE BOX ENTITLED "DESCRIPTION OF NOTES"
ABOVE AND SIGNING THIS LETTER, WILL BE DEEMED TO HAVE TENDERED THE NOTES AS SET
FORTH IN SUCH BOX.

                                        6


                              HOLDER(S) SIGN HERE
                         (SEE INSTRUCTIONS 2, 5 AND 6)
                (PLEASE COMPLETE SUBSTITUTE FORM W-9 ON PAGE 18)
               (NOTE: SIGNATURE(S) MUST BE GUARANTEED IF REQUIRED
                               BY INSTRUCTION 2)

     Must be signed by registered holder(s) exactly as name(s) appear(s) on
Certificate(s) for the Notes hereby tendered or on the register of holders
maintained by or on behalf of Giant, or by any person(s) authorized to become
the registered holder(s) by endorsements and documents transmitted herewith
(including such opinions of counsel, certifications and other information as may
be required by Giant for the Notes to comply with the restrictions on transfer
applicable to the Notes). If signature is by an attorney-in-fact, executor,
administrator, trustee, guardian, officer of a corporation or another acting in
a fiduciary capacity or representative capacity, please set forth the signer's
full title. See Instruction 5.

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

- --------------------------------------------------------------------------------
                          (SIGNATURE(S) OF HOLDER(S))

Date:
- ------------------------------, 2002

Name(s)
- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------
                                 (PLEASE PRINT)

Capacity (full title)
- --------------------------------------------------------------------------------

Address
- --------------------------------------------------------------------------------

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

- --------------------------------------------------------------------------------
                               (INCLUDE ZIP CODE)

Area Code and Telephone Number
- ----------------------------------------------------------------------

- --------------------------------------------------------------------------------
               (TAX IDENTIFICATION OR SOCIAL SECURITY NUMBER(S))

                           GUARANTEE OF SIGNATURE(S)
                           (SEE INSTRUCTIONS 2 AND 5)

- --------------------------------------------------------------------------------
                             (AUTHORIZED SIGNATURE)

Date:
- ------------------------------, 2002

Name of Firm
- --------------------------------------------------------------------------------

Capacity (full title)
- --------------------------------------------------------------------------------
                                 (PLEASE PRINT)

Address
- --------------------------------------------------------------------------------

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

- --------------------------------------------------------------------------------
                               (INCLUDE ZIP CODE)

Area Code and Telephone Number
- -----------------------------------------------------------------------

                                        7


                         SPECIAL ISSUANCE INSTRUCTIONS
                         (SEE INSTRUCTIONS 1, 5 AND 6)

     To be completed ONLY if the Exchange Notes or Notes not tendered are to be
issued in the name of someone other than the registered holder of the Notes
whose name(s) appear(s) above.

Issue

[ ] Notes not tendered to:
[ ] Exchange Notes to:

Name(s)
- ---------------------------------------

Address
- ----------------------------------------

- -------------------------------------------------
                               (INCLUDE ZIP CODE)

Area Code and
Telephone Number
- ----------------------------

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

- -------------------------------------------------
                (TAX IDENTIFICATION OR SOCIAL SECURITY NUMBERS)

                         SPECIAL DELIVERY INSTRUCTIONS
                         (SEE INSTRUCTIONS 1, 5 AND 6)

     To be completed ONLY if Exchange Notes or Notes not tendered are to be sent
to someone other than the registered holder of Notes whose name(s) appear(s)
above, or such registered holder(s) at an address other than that shown above.

Mail

[ ] Notes not tendered to:
[ ] Exchange Notes to:

Name(s)
- ---------------------------------------

Address
- ----------------------------------------

- -------------------------------------------------
                               (INCLUDE ZIP CODE)

Area Code and
Telephone Number
- ----------------------------

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

- -------------------------------------------------
               (TAX IDENTIFICATION OR SOCIAL SECURITY NUMBER(S))

                                        8


                                  INSTRUCTIONS

         FORMING PART OF THE TERMS AND CONDITIONS OF THE EXCHANGE OFFER

     1.  DELIVERY OF LETTER OF TRANSMITTAL AND CERTIFICATES; GUARANTEED DELIVERY
PROCEDURES.  This Letter of Transmittal is to be completed either if (a)
Certificates are to be forwarded herewith or (b) tenders are to be made pursuant
to the procedures for tender by book-entry transfer set forth in "The Exchange
Offer -- Exchange Offer Procedures" in the Prospectus. Certificates, or timely
confirmation of a book-entry transfer of such Notes into the Exchange Agent's
account at DTC, as well as this Letter of Transmittal (or facsimile thereof),
properly completed and duly executed, with any required signature guarantees,
and any other documents required by this Letter of Transmittal, must be received
by the Exchange Agent at its address set forth herein on or prior to the
Expiration Date. Notes may be tendered in whole or in part in integral multiples
of $1,000.

     Holders who wish to tender their Notes and (i) whose Notes are not
immediately available or (ii) who cannot deliver their Notes, this Letter of
Transmittal and all other required documents to the Exchange Agent on or prior
to the Expiration Date or (iii) who cannot complete the procedures for delivery
by book-entry transfer on a timely basis, may tender their Notes by properly
completing and duly executing a Notice of Guaranteed Delivery pursuant to the
guaranteed delivery procedures set forth in "The Exchange Offer -- Guaranteed
Delivery Procedures" in the Prospectus. Pursuant to such procedures: (i) such
tender must be made by or through an Eligible Institution (as defined below);
(ii) a properly completed and duly executed Notice of Guaranteed Delivery,
substantially in the form made available by Giant, must be received by the
Exchange Agent on or prior to the Expiration Date; and (iii) the Certificates
(or a book-entry confirmation (as defined in the Prospectus)) representing all
tendered Notes, in proper form for transfer, together with a Letter of
Transmittal (or facsimile thereof), properly completed and duly executed, with
any required signature guarantees and any other documents required by this
Letter of Transmittal, must be received by the Exchange Agent within three New
York Stock Exchange, Inc. trading days after the Expiration Date, all as
provided in "The Exchange Offer -- Guaranteed Delivery Procedures" in the
Prospectus.

     The Notice of Guaranteed Delivery may be delivered by hand or transmitted
by facsimile or mail to the Exchange Agent, and must include a guarantee by an
Eligible Institution in the form set forth in such Notice. For Notes to be
properly tendered pursuant to the guaranteed delivery procedure, the Exchange
Agent must receive a Notice of Guaranteed Delivery on or prior to the Expiration
Date. As used herein and in the Prospectus, "Eligible Institution" means a firm
or other entity identified in Rule 17Ad-15 under the Exchange Act as "an
eligible guarantor institution," including (as such terms are defined therein)
(i) a bank; (ii) a broker, dealer, municipal securities broker or dealer or
government securities broker or dealer; (iii) a credit union; (iv) a national
securities exchange, registered securities association or clearing agency; or
(v) a savings association that is a participant in a Securities Transfer
Association.

     THE METHOD OF DELIVERY OF CERTIFICATES, THIS LETTER OF TRANSMITTAL AND ALL
OTHER REQUIRED DOCUMENTS IS AT THE OPTION AND SOLE RISK OF THE TENDERED HOLDER
AND THE DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE EXCHANGE
AGENT. IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED,
PROPERLY INSURED, OR OVERNIGHT DELIVERY SERVICE IS RECOMMENDED. IN ALL CASES,
SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY. NO LETTER OF
TRANSMITTAL, NOTES OR OTHER REQUIRED DOCUMENTS SHOULD BE SENT TO GIANT.

     Giant will not accept any alternative, conditional or contingent tenders.
Each tendering holder, by execution of a Letter of Transmittal (or facsimile
thereof), waives any right to receive any notice of the acceptance of such
tender.

     2.  GUARANTEE OF SIGNATURES.  No signature guarantee on this Letter of
Transmittal is required if:

          (i) this Letter of Transmittal is signed by the registered holder
     (which term, for purposes of this document, shall include any participant
     in DTC whose name appears on the register of holders maintained by or on
     behalf of Giant as the owner of the Notes) of Notes tendered herewith,
     unless such
                                        9


     holder(s) has completed either the box entitled "Special Issuance
     Instructions" or the box entitled "Special Delivery Instructions" above, or

          (ii) such Notes are tendered for the account of a firm that is an
     Eligible Institution.

     In all other cases, an Eligible Institution must guarantee the signature(s)
on this Letter of Transmittal. See Instruction 5.

     3.  INADEQUATE SPACE.  If the space provided in the box captioned
"Description of Notes" is inadequate, the Certificate number(s) and/or the
principal amount of Notes and any other required information should be listed on
a separate signed schedule which is attached to this Letter of Transmittal.

     4.  PARTIAL TENDERS AND WITHDRAWAL RIGHTS.  Tenders of Notes will be
accepted only in integral multiples of $1,000. If less than all the Notes
evidenced by any Certificate submitted are to be tendered, fill in the principal
amount of Notes which are to be tendered in the box entitled "Liquidation Amount
of Notes Tendered (if less than all)." In such case, new Certificate(s) will
only be sent to the holder of the Notes, promptly after the Expiration Date. All
Notes represented by Certificates delivered to the Exchange Agent will be deemed
to have been tendered unless otherwise indicated.

     Except as otherwise provided herein, tenders of Notes may be withdrawn at
any time on or prior to 5:00 p.m., New York City time, on the Expiration Date.
In order for a withdrawal to be effective on or prior to that time, a written,
telegraphic, telex or facsimile transmission of such notice of withdrawal must
be timely received by the Exchange Agent at one of its addresses set forth above
or in the Prospectus on or prior to 5:00 p.m., New York City time, on the
Expiration Date. Any such notice of withdrawal must specify the name of the
person who tendered the Notes to be withdrawn, the aggregate principal amount of
Notes to be withdrawn, and (if Certificates of Notes have been tendered) the
name of the registered holder of the Notes as set forth on the Certificate for
the Notes; if different from that of the person who tendered such Notes. If
Certificates for the Notes have been delivered or otherwise identified to the
Exchange Agent, then prior to the physical release of such Certificates for the
Notes, the tendering holder must submit the serial numbers shown on the
particular Certificates for the Notes to be withdrawn and the signature on the
notice of withdrawal must be guaranteed by an Eligible Institution, except in
the case of Notes tendered for the account of an Eligible Institution. If Notes
have been tendered pursuant to the procedures for book-entry transfer set forth
in the Prospectus under "The Exchange Offer -- Exchange Offer Procedures," the
notice of withdrawal must specify the name and number of the account at DTC to
be credited with the withdrawal of Notes, in which case a notice of withdrawal
will be effective if delivered to the Exchange Agent by written, telegraphic,
telex or facsimile transmission. Withdrawals of tenders of Notes may not be
rescinded. Notes properly withdrawn will not be deemed validly tendered for
purposes of the Exchange Offer, but may be retendered at any subsequent time on
or prior to 5:00 p.m., New York City time, on the Expiration Date by following
any of the procedures described in the Prospectus under "The Exchange
Offer -- Exchange Offer Procedures."

     All questions as to the validity, form and eligibility (including time of
receipt) of such withdrawal notices will be determined by Giant, in its sole
discretion, which determination shall be final and binding on all parties. None
of Giant, any affiliates or assigns of Giant, the Exchange Agent or any other
person shall be under any duty to give any notification of any irregularities in
any notice of withdrawal or incur any liability for failure to give any such
notification. Any Notes which have been tendered but which are withdrawn will be
returned to the holder thereof without cost to such holder promptly after
withdrawal.

     5.  SIGNATURES ON LETTER OF TRANSMITTAL, ASSIGNMENTS AND ENDORSEMENTS.  If
this Letter of Transmittal is signed by the registered holder(s) of the Notes
tendered hereby, the signature(s) must correspond exactly with the name(s) as
written on the face of the Certificate(s) without alteration, enlargement or any
change whatsoever.

     If any of the Notes tendered are owned of record by two or more joint
owners, all such owners must sign this Letter of Transmittal.

                                        10


     If any tendered Notes are registered in different name(s) on several
Certificates, it will be necessary to complete, sign and submit as many separate
Letters of Transmittal (or facsimiles thereof) as there are different
registrations of Certificates.

     If this Letter of Transmittal or any Certificates or bond powers are signed
by trustees, executors, administrators, guardians, attorneys-in-fact, officers
of corporations or others acting in a fiduciary or representative capacity, such
persons should so indicate when signing and must submit proper evidence
satisfactory to Giant, in its sole discretion, of each such person's authority
so to act.

     When this Letter of Transmittal is signed by the registered owner(s) of the
Notes listed and transmitted hereby, no endorsement(s) of Certificate(s) or
separate bond power(s) are required unless Notes are to be issued in the name of
a person other than the registered holder(s). Signature(s) on such
Certificate(s) or bond power(s) must be guaranteed by an Eligible Institution.

     If this Letter of Transmittal is signed by a person other than the
registered owner(s) of the Notes listed, the Certificates must be endorsed or
accompanied by appropriate bond powers, signed exactly as the name or names of
the registered owner(s) appear(s) on the Certificates, and also must be
accompanied by such opinions of counsel, certifications and other information as
Giant may require in accordance with the restrictions on transfer applicable to
the Notes. Signatures on such Certificates or bond powers must be guaranteed by
an Eligible Institution.

     6.  SPECIAL ISSUANCE AND DELIVERY INSTRUCTIONS.  If Notes are to be issued
in the name of a person other than the signer of this Letter of Transmittal, or
if Notes are to be sent to someone other than the signer of this Letter of
Transmittal or to an address other than that shown above, the appropriate boxes
on this Letter of Transmittal should be completed. Certificates for Notes not
exchanged will be returned by mail or, if tendered by book-entry transfer, by
crediting the account indicated above maintained at DTC. See Instruction 4.

     7.  Giant will determine, in its sole discretion, all questions as to the
form of documents, validity, eligibility (including time of receipt) and
acceptance for exchange of any tender of Notes, which determination shall be
final and binding on all parties. Giant reserves the absolute right to reject
any and all tenders determined by it not to be in proper form or the acceptance
of which, or exchange for which, may, in the view of counsel to Giant, be
unlawful. Giant also reserves the absolute right, subject to applicable law, to
waive any of the conditions of the Exchange Offer set forth in the Prospectus
under "The Exchange Offer -- Conditions to the Exchange Offer" or any conditions
or irregularity in any tender of Notes of any particular holder whether or not
similar conditions or irregularities are waived in the case of other holders.
Giant's interpretation of the terms and conditions of the Exchange Offer
(including this Letter of Transmittal and the instructions hereto) will be final
and binding. No tender of Notes will be deemed to have been validly made until
all irregularities with respect to such tender have been cured or waived. Giant,
any affiliates or assigns of Giant, the Exchange Agent, or any other person
shall not be under any duty to give notification of any irregularities in
tenders or incur any liability for failure to give such notification.

     8.  QUESTIONS, REQUESTS FOR ASSISTANCE AND ADDITIONAL COPIES.  Questions
and requests for assistance may be directed to the Exchange Agent at its address
and telephone number set forth on the front of this Letter of Transmittal.
Additional copies of the Prospectus, the Notice of Guaranteed Delivery and the
Letter of Transmittal may be obtained from the Exchange Agent or from your
broker, dealer, commercial bank, trust company or other nominee.

     9.  31% BACKUP WITHHOLDING; SUBSTITUTE FORM W-9.  Under U.S. Federal income
tax law, a holder whose tendered Notes are accepted for exchange is required to
provide the Exchange Agent with such holder's correct taxpayer identification
number ("TIN") on Substitute Form W-9 below. If the Exchange Agent is not
provided with the Correct TIN, the Internal Revenue Service (the "IRS") may
subject the holder or other payee to a $50 penalty. In addition, payments to
such holders or other payees with respect to Notes exchanged pursuant to the
Exchange Offer may be subject to 31% backup withholding.

     The box in Part 2 of the Substitute Form W-9 may be checked if the
tendering holder has not been issued a TIN and has applied for a TIN or intends
to apply for a TIN in the near future. If the box in Part 2
                                        11


is checked, the holder or other payee must also complete the Certificate of
Awaiting Taxpayer Identification Number below in order to avoid backup
withholding. Notwithstanding that the box in Part 2 is checked and the
Certificate of Awaiting Taxpayer Identification Number is completed, the
Exchange Agent will withhold 31% of all payments made prior to the time a
properly certified TIN is provided to the Exchange Agent. The Exchange Agent
will retain such amounts withheld during the 60-day period following the date of
the Substitute Form W-9. If the holder furnishes the Exchange Agent with its TIN
within 60 days after the date of the Substitute Form W-9, the amounts retained
during the 60-day period will be remitted to the holder and no further amounts
shall be retained or withheld from payments made to the holder thereafter. If,
however, the holder has not provided the Exchange Agent with its TIN within such
60-day period, amounts withheld will be remitted to the IRS as backup
withholding. In addition, 31% of all payments made thereafter will be withheld
and remitted to the IRS until a correct TIN is provided.

     The holder is required to give the Exchange Agent the TIN (e.g., social
security number or employer identification number) of the registered owner of
the Notes or of the last transferee appearing on the transfers attached to, or
endorsed on, the Notes. If the Notes are registered in more than one name or are
not in the name of the actual owner, consult the enclosed "Guidelines for
Certification of Taxpayer Identification Number on Substitute Form W-9" for
additional guidance on which number to report.

     Certain holders (including, among others, corporations, financial
institutions and certain foreign persons) may not be subject to these backup
withholding and reporting requirements. Such holders should nevertheless
complete the attached Substitute Form W-9 below, and write "exempt" on the face
thereof, to avoid possible erroneous backup withholding. A foreign person may
qualify as an exempt recipient by submitting a properly completed IRS Form W-8,
signed under penalties of perjury, attesting to that holder's exempt status.
Please consult the enclosed "Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9" for additional guidance on which
holders are exempt from backup withholding.

     Backup withholding is not an additional U.S. Federal income tax. Rather,
the U.S. Federal income tax liability of a person subject to backup withholding
will be reduced by the amount of tax withheld. If withholding results in an
overpayment of taxes, a refund may be obtained.

     10.  WAIVER OF CONDITIONS.  Giant reserves the absolute right to waive
satisfaction of any or all conditions enumerated in the Prospectus.

     11.  NO CONDITIONAL TENDERS.  No alternative, conditional, irregular or
contingent tenders will be accepted. All tendering holders of Notes, by
execution of this Letter of Transmittal, shall waive any right to receive notice
of the acceptance of their Notes for exchanges.

     Neither Giant, the Exchange Agent nor any other person is obligated to give
notice of any defect or irregularity with respect to any tender of Notes nor
shall any of them incur any liability for failure to give any such notice.

     12.  LOST, DESTROYED OR STOLEN CERTIFICATES.  If any Certificate(s)
representing Notes have been lost, destroyed or stolen, the holder should
promptly notify the Exchange Agent. The holder will then be instructed as to the
steps that must be taken in order to replace the Certificate(s). This Letter of
Transmittal and related documents cannot be processed until the procedures for
replacing lost, destroyed or stolen Certificate(s) have been followed.

     13.  SECURITY TRANSFER TAXES.  Holders who tender their Notes for exchange
will not be obligated to pay any transfer taxes in connection therewith. If,
however, Exchange Notes are to be delivered to, or are to be issued in the name
of, any person other than the registered holder of the Notes tendered, or if a
transfer tax is imposed for any reason other than the exchange of Notes in
connection with the Exchange Offer, then the amount of any such transfer tax
(whether imposed on the registered holder or any other persons) will be payable
by the tendering holder. If satisfactory evidence of payment of such taxes or
exemption therefrom is not submitted with the Letter of Transmittal, the amount
of such transfer taxes will be billed directly to such tendering holder.

                                        12


     IMPORTANT: THIS LETTER OF TRANSMITTAL (OR FACSIMILE THEREOF) AND ALL OTHER
REQUIRED DOCUMENTS MUST BE RECEIVED BY THE EXCHANGE AGENT ON OR PRIOR TO 5:00
P.M., NEW YORK CITY TIME, ON THE EXPIRATION DATE.

                                        13


                TO BE COMPLETED BY ALL TENDERING SECURITYHOLDERS
                              (SEE INSTRUCTION 9)

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

                                       PAYER'S NAME: THE BANK OF NEW YORK
- -----------------------------------------------------------------------------------------------------------------
 SUBSTITUTE                    PART 1 -- PLEASE PROVIDE YOUR TIN ON THE LINE AT
 FORM W-9                      RIGHT AND CERTIFY BY SIGNING AND DATING BELOW       TIN: -------------------------
                                                                                  Social Security Number
                                                                                  or Employer
                                                                                  Identification Number
                             ------------------------------------------------------------------------------------
DEPARTMENT OF THE
 TREASURY INTERNAL             PART 2 -- TIN Applied For [ ]
 REVENUE SERVICE               ----------------------------------------------------------------------------------
PAYOR'S REQUEST FOR            CERTIFICATION -- UNDER THE PENALTIES OF PERJURY, I CERTIFY THAT:
 TAXPAYER IDENTIFICATION
 NUMBER ("TIN") AND            (1) the number shown on this form is my correct taxpayer identification number (or
 CERTIFICATION                 I am waiting for a number to be issued to me).
                               (2) I am not subject to backup withholding either because (i) I am exempt from
                               backup withholding, (ii) I have not been notified by the Internal Revenue Service
                                   ("IRS") that I am subject to backup withholding as a result of a failure to
                                   report all interest or dividends, or (iii) the IRS has notified me that I am
                                   no longer subject to backup withholding, and
                               (3) any other information provided on this form is true and correct.
                               ----------------------------------------------------------------------------------

                               Signature  _____________________________________   Date  ______________ , 2002
- -----------------------------------------------------------------------------------------------------------------
 You must cross out item (iii) in Part (2) above if you have been notified by the IRS that you are subject to
 backup withholding because of underreporting interest or dividends on your tax return and you have not been
 notified by the IRS that you are no longer subject to backup withholding.
- -----------------------------------------------------------------------------------------------------------------



NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY IN CERTAIN CIRCUMSTANCES
RESULT IN BACKUP WITHHOLDING OF 31% OF ANY AMOUNTS PAID TO YOU PURSUANT TO THE
EXCHANGE OFFER. PLEASE REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF
TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.

       YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX
                        IN PART 2 OF SUBSTITUTE FORM W-9

                                                             
- -----------------------------------------------------------------------------------------------
                    CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER

 I certify under penalties of perjury that a taxpayer identification number has not been issued
 to me, and either (1) I have mailed or delivered an application to receive a taxpayer
 identification number to the appropriate Internal Revenue Service Center or Social Security
 Administration Office or (2) I intend to mail or deliver an application in the near future. I
 understand that if I do not provide a taxpayer identification number by the time of payment,
 31% of all payments made to me on account of the Exchange Notes shall be retained until I
 provide a taxpayer identification number to the Exchange Agent and that, if I do not provide
 my taxpayer identification number within 60 days, such retained amounts shall be remitted to
 the Internal Revenue Service as backup withholding and 31% of all reportable payments made to
 me thereafter will be withheld and remitted to the Internal Revenue Service until I provide a
 taxpayer identification number.
  Signature  ________________________________________________________ Date ---------------, 2002
- -----------------------------------------------------------------------------------------------



                                        14

EX-99.2

                                                                    EXHIBIT 99.2

                         NOTICE OF GUARANTEED DELIVERY

                                 FOR TENDER OF
                            ANY AND ALL OUTSTANDING
                     11% SENIOR SUBORDINATED NOTES DUE 2012
                                IN EXCHANGE FOR
                     11% SENIOR SUBORDINATED NOTES DUE 2012
          WHICH HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933
              PURSUANT TO THE PROSPECTUS DATED             , 2002

     This Notice of Guaranteed Delivery, or one substantially equivalent to this
form, must be used to accept the Exchange Offer (as defined below) if (i)
certificates for Giant's 11% Senior Subordinated Notes due 2012 (the "Notes")
are not immediately available, (ii) Notes, the Letter of Transmittal and all
other required documents cannot be delivered to The Bank of New York (the
"Exchange Agent") on or prior to 5:00 P.M., New York City time, on the
Expiration Date (as defined in the Prospectus referred to below) or (iii) the
procedures for delivery by book-entry transfer cannot be completed on a timely
basis. This Notice of Guaranteed Delivery may be delivered by hand, overnight
courier or mail, or transmitted by facsimile transmission, to the Exchange
Agent. See "The Exchange Offer -- Exchange Offer Procedures" and "-- Guaranteed
Delivery Procedures" in the Prospectus. In addition, in order to utilize the
guaranteed delivery procedure to tender Notes pursuant to the Exchange Offer, a
completed, signed and dated Letter of Transmittal relating to Notes (or
facsimile thereof) must also be received by the Exchange Agent prior to 5:00
P.M., New York City time, on the Expiration Date. Capitalized terms not defined
herein have the meanings assigned to them in the Prospectus.

                 The Exchange Agent For The Exchange Offer Is:

                              THE BANK OF NEW YORK

                                                          
          By Hand Or               Facsimile Transmissions:            By Registered Or
     Overnight Delivery:         (Eligible Institutions Only)          Certified Mail:
     The Bank of New York               (212) 571-3080               The Bank of New York
      101 Barclay Street                                            101 Barclay Street, 7E
   Corporate Trust Services        To Confirm by Telephone         New York, New York 10286
            Window                 or for Information Call        Attention: Reorganization
         Ground Level                                                      Section
   New York, New York 10286             (212) 815-6333
  Attention: Reorganization
           Section



 DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS OTHER THAN AS SET
FORTH ABOVE OR TRANSMISSION OF THIS NOTICE OF GUARANTEED DELIVERY VIA FACSIMILE
TO A NUMBER OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY.

     THIS NOTICE OF GUARANTEED DELIVERY IS NOT TO BE USED TO GUARANTEE
SIGNATURES. IF A SIGNATURE ON A LETTER OF TRANSMITTAL IS REQUIRED TO BE
GUARANTEED BY AN "ELIGIBLE INSTITUTION" UNDER THE INSTRUCTIONS THERETO, SUCH
SIGNATURE GUARANTEE MUST APPEAR IN THE APPLICABLE SPACE PROVIDED IN THE
SIGNATURE BOX ON THE LETTER OF TRANSMITTAL.


Ladies and Gentlemen:

     The undersigned hereby tenders to Giant Industries, Inc., a Delaware
corporation ("Giant"), upon the terms and subject to the conditions set forth in
the Prospectus dated           , 2002 (as the same may be amended or
supplemented from time to time, the "Prospectus"), and the related Letter of
Transmittal (which together constitute the "Exchange Offer"), receipt of which
is hereby acknowledged, the aggregate principal amount of Notes set forth below
pursuant to the guaranteed delivery procedures set forth in the Prospectus under
the caption "The Exchange Offer -- Guaranteed Delivery Procedures."

                                             
Aggregate Liquidation Amount                    Name(s) of Registered Holder(s):
Amount Tendered: $                              -------------------
- --------------------------------                --------------------------------------------


Certificate No(s)
(if available):
- ----------------------------------------


- --------------------------------------------
(Total Liquidation Amount Represented by
  Notes Certificate(s))


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


If Notes will be tendered by book-entry transfer, provide the following information:


DTC Account Number:
- -----------------------------


Date:
- --------------------------------------------



                                        2


     All authority herein conferred or agreed to be conferred shall survive the
death or incapacity of the undersigned and every obligation of the undersigned
hereunder shall be binding upon the heirs, personal representatives, successors
and assigns of the undersigned.

                                PLEASE SIGN HERE

X -----------------------------------        -----------------------------------

X -----------------------------------        -----------------------------------

SIGNATURE(S) OF OWNER(S)                     DATE
OR AUTHORIZED SIGNATORY

Area Code and Telephone Number: ----------------------

     Must be signed by the holder(s) of the Notes as their name(s) appear(s) on
certificates for Notes or on a security position listing, or by person(s)
authorized to become registered holder(s) by endorsement and documents
transmitted with this Notice of Guaranteed Delivery. If signature is by a
trustee, executor, administrator, guardian, attorney-in-fact, officer or other
person acting in a fiduciary or representative capacity, such person must set
forth his or her full title below.

                      PLEASE PRINT NAME(S) AND ADDRESS(ES)
Name(s): -----------------------------------------------------------------------

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

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

Capacity: ----------------------------------------------------------------------

Address(es) --------------------------------------------------------------------

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

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

                                        3


                                   GUARANTEE
                    (NOT TO BE USED FOR SIGNATURE GUARANTEE)

     The undersigned, a firm or other entity identified in Rule 17Ad-15 under
the Securities Exchange Act of 1934, as amended, as an "eligible guarantor
institution," including (as such terms are defined therein): (i) a bank; (ii) a
broker, dealer, municipal securities broker, municipal securities dealer,
government securities broker, government securities dealer; (iii) a credit
union; (iv) a national securities exchange, registered securities association or
clearing agency; or (v) a savings association that is a participant in a
Securities Transfer Association recognized program (each of the foregoing being
referred to as an "Eligible Institution"), hereby guarantees to deliver to the
Exchange Agent, at one of its addresses set forth above, either the Notes
tendered hereby in proper form for transfer, or confirmation of the book-entry
transfer of such Notes to the Exchange Agent's account at The Depository Trust
Company ("DTC"), pursuant to the procedures for book-entry transfer set forth in
the Prospectus, in either case together with one or more properly completed and
duly executed Letter(s) of Transmittal (or facsimile thereof) and any other
required documents within three New York Stock Exchange trading days after the
Expiration Date.

     The undersigned acknowledges that it must deliver the Letter(s) of
Transmittal and the Notes tendered hereby to the Exchange Agent within the time
period set forth above and that failure to do so could result in a financial
loss to the undersigned.

                                                    

    ------------------------------------------------       ------------------------------------------------
    NAME OF FIRM                                           AUTHORIZED SIGNATURE

    ------------------------------------------------       ------------------------------------------------
    ADDRESS                                                TITLE

    ------------------------------------------------       ------------------------------------------------
    ZIP CODE                                               (PLEASE TYPE OR PRINT)

    Area Code and Telephone No. --------------------       Date: ------------------------------------------

    

     NOTE: DO NOT SEND CERTIFICATES FOR NOTES WITH THIS FORM. CERTIFICATES FOR
NOTES SHOULD ONLY BE SENT WITH YOUR LETTER OF TRANSMITTAL.

                                        4