EXHIBIT 10.28 PLEDGE AND SECURITY AGREEMENT THIS PLEDGE AGREEMENT (hereinafter "Agreement"), is dated effective as of March 10, 2000, and is made by JAMES E. ACRIDGE, an unmarried man ("Acridge") and PINNACLE RODEO, L.L.C., an Arizona limited liability company ("Rodeo") (referred to together in the singular, from time to time, as "Pledgor"), to GIANT INDUSTRIES, INC., a Delaware corporation ("Pledgee"). PRELIMINARY STATEMENTS: A. Acridge and Pledgee have entered into a loan transaction wherein Pledgee has lent to Acridge the sum of $5,000,000.00 in accordance with the terms of an Amended and Restated Loan Agreement of even date herewith, and an Amended and Restated Promissory Note of even date herewith (the "Note"). The parties have also entered into an Amended and Restated Loan Agreement of even date herewith (the "Loan Agreement"). The obligations of Acridge under the Note and the Loan Agreement are referred to from time to time hereafter as the "Obligations." B. Acridge is the sole member of Rodeo, which in turn is the sole owner of 100% of the membership interests (the "Membership Interest") in Pinnacle Rawhide, L.L.C., an Arizona limited liability company, (the "Company"). C. Pursuant to the terms of certain financing agreements with Western Town, L.L.C. and Hirsch Investment Co., L.L.C., both Arizona limited liability companies, Pledgor is entitled to pledge to third parties no more than 49% of the ownership interests in the Company, and Pledgor is willing to do so pursuant to the terms hereof. D. Each capitalized term used herein that is not otherwise defined herein shall have the meaning ascribed to such term in the Note. NOW, THEREFORE, in consideration of the premises, Pledgor hereby agrees as follows: 1. PLEDGE. Pledgor hereby grants to Pledgee a first priority security interest in the following (the "Pledged Collateral"): 1.1. Collateral Definition: The Collateral shall consist of the following: 1.1.1. All rights of Rodeo as a member of the Company to the extent of 49% of the total Membership Interest therein (including without limitation the right to distributions of cash or property from the Company), which is herein called the "Interest;" and 1.1.2. All proceeds of or distributions or payments under the Interest. 1.2. Definition of "Net Cash Flow". For the purposes of this Agreement, the term "Net Cash Flow" shall mean means the gross cash proceeds to the Company from all sources, less the portion thereof used to pay or establish reserves for Company expenses, debt payments, capital improvements, replacements and contingencies, all as determined by the Manager of Company, Rodeo, in its reasonable discretion. 1.3. Payment of Net Cash Flow with respect to the Interest When No Default Exists: During the term of this Pledge, and prior to any default under the Note, the Loan Agreement or hereunder, the Net Cash Flow after accounting for any payments or reserves required by the existing lenders to Rodeo or Company attributable to the Interest shall be paid as follows: 1.3.1. Pledgor shall cause the Company to distribute from time to time sufficient amounts of all Net Cash Flow to Pledgee to make payments then due; and 1.3.2. Pledgor shall cause the Company to distribute from time to time the balance of all Net Cash Flow to Pledgor. 1.4. Payment of Net Cash Flow with respect to the Interest After Default: After any default has occurred under the Note, the Loan Agreement or hereunder, Pledgor shall cause the Company to distribute all Net Cash Flow after accounting for any payments or reserves required by the existing lenders to Rodeo or Company to Pledgee on account of Acridge's Obligations under the Note, the Loan Agreement and hereunder. 2. SECURITY FOR OBLIGATIONS. 2.1. Obligations Secured. This Agreement secures the payment and performance of the Obligations by Acridge. 2.2. Acknowledgment of Consideration. Rodeo acknowledges that it has benefited by the investment of moneys by Acridge in Rodeo, and that the results of such investment enabled it to acquire the Interest pledged herein. Although the Obligations are those of Acridge and not of Rodeo, Rodeo acknowledges that it has received valuable consideration in the form of the aforesaid investment of moneys by Acridge, the receipt and sufficiency of which are hereby acknowledged, for its pledge of the Interest as set forth herein, and all of the terms and conditions of this Agreement are fully binding upon it as set forth herein. 3. FINANCING STATEMENTS. To perfect the security interest granted hereby in accordance with the Uniform Commercial Code in effect in the State of Arizona (the "Code"), Pledgor shall, contemporaneously with the execution hereof, execute and deliver to Pledgee a financing statement (the "Financing Statement") in form satisfactory to Pledgee. Pledgor agrees that, from time to time hereafter, it will execute and deliver to Pledgee such further instruments and documents as Pledgee may reasonably request which are necessary for the purpose of perfecting and continuing the perfection of the security interest granted hereby. 4. REPRESENTATIONS AND WARRANTIES. Pledgor represents and warrants to Pledgee as follows: 4.1. Authorization. This Agreement has been duly authorized, executed and delivered by Pledgor and creates a valid security interest in the Pledged Collateral under the Code, and when the Financing Statement is duly filed with the Arizona Secretary of State, Pledgee will have a first priority security interest in the Pledged Collateral. 4.2. No Default. Neither the execution and delivery of this Agreement nor the consummation of the transactions contemplated herein will conflict with or result in a breach, default or violation of any statute or governmental rule or regulation, or theng Agreement or any other agreement to which Pledgor is a party or by which any of Pledgor's property is bound. 4.3. Good Title. Pledgor is the legal owner of the Pledged Collateral and has neither granted any other security interest in the Pledged Collateral nor executed any financing statement with respect thereto (other than the Financing Statement), except that there is an existing security interest in the Pledged Collateral in favor of Western Town, L.L.C. and/or Hirsch Investment Co., L.L.C., which existing security interest will be subordinated to the Pledge herein created under documents complying with the obligations of such lienholders to subordinate to the Pledge herein created (the "Subordinate Pledge"). 4.4. Business Location. The chief place of business and chief executive office of Pledgor are located at the address for Pledgor specified on the signature page below. Pledgor shall promptly notify Pledgee of any change in either. 4.5. Priority. This Agreement creates a first priority security interest, free from any other liens, claims or security interests, at such time as the subordination agreements to create Subordinate Pledge have been executed. 4.6. No Amendments. That it will not consent to or permit any amendment to any governing document of, or to the admission of any new member of, either Company or Rodeo, without the prior written consent of Pledgee. 4.7. Consents. That no consent or approval of any member of the Company is required to permit the pledge of the Interest hereunder or such consent or approval has been given. 5. OTHER LIENS. Other than the Subordinate Pledge described herein, Pledgor agrees that it will not create or permit to exist any lien, security interest, or other charge or encumbrance upon or with respect to the Pledged Collateral, except for the security interest under this Agreement. 6. REMEDIES OF PLEDGEE. In the event that an Event of Default shall occur under the Note, then Pledgee shall have and may exercise, with respect to the Pledged Collateral and pursuant to the security interest created hereby, all rights and remedies under the Arizona Uniform Commercial Code (the "Code"). Pledgee may immediately direct the Company not to make any distributions to Pledgor, and to make all distributions directly to Pledgee. The proceeds from any foreclosure sale pursuant to the Code shall be applied first toward the costs and expenses of such sale, second towards any attorneys' fees owing to the Pledgee pursuant to Section 15 hereof, third towards the satisfaction of the defaulted Obligations, fourth toward the satisfaction of any indebtedness secured by a subordinate security interest in the Pledged Collateral, and the surplus (if any) to the Pledgor. Prior to Pledgee's foreclosure of the security interest herein granted in the Interest, none of Pledgor's rights, options, elections, privileges or other benefits of any nature under any governing document of Company or otherwise, including without limitation all rights to receive distributions of cash or property pursuant to any governing document of Company, shall be restricted or limited by the existence of such security interest (nor may Pledgee exercise any such rights, options, elections, privileges or other benefits), and Pledgor may continue to receive such distributions and exercise such other rights, options, elections, privileges and benefits, subject to the provisions of any governing document of Company. In the event that Pledgee has and exercises remedies under the Code pursuant to and in accordance with the terms of this Section 6, any notice of sale required by law shall be deemed "commercially reasonable" if such notice is given at least ten (10) days prior to the time of such sale. Pledgor recognizes that Pledgee may be unable to effect a public sale of any or all of the Pledged Collateral by reason of certain prohibitions contained in the Securities Act of 1933, as amended, and applicable state securities law, but may be compelled to resort to one or more private sales thereof to a restricted group of purchasers who will be obliged to agree, among other things, to acquire such Pledged Collateral for their own account for investment and not with a view to the distribution or resale thereof. Pledgor acknowledges and agrees that any such private sale may result in prices and other terms less favorable to the seller than if such sale were a public sale and, notwithstanding such circumstances, agrees that any such private sale (if otherwise commercially reasonable) shall be deemed to have been made in a commercially reasonable manner. Nothing contained in the two immediately preceding sentences shall be construed as an agreement between Pledgor and Pledgee that the Pledged Collateral does constitute a "security" within the meaning of the Securities Act of 1933 or applicable state securities laws, or that the Pledged Collateral cannot be sold at a public sale. 7. REMEDIES CUMULATIVE. The remedies of the parties hereto under this Agreement are cumulative and shall not exclude any other remedies to which any party may be lawfully entitled including, without limitation, the remedies under the Note or the Loan Agreement. 8. AMENDMENTS, ETC. Any amendment, modification or waiver of any provision of this Agreement shall be void and of no force or effect unless made in writing, signed by the party or parties to be bound and specifying with particularity the nature and extent of such amendment, modification or waiver. No delay in exercising, or failure to exercise, any right, remedy or power hereunder shall impair such right, remedy or power or any right, remedy or power of Pledgee under the Note or the Loan Agreement or shall be construed to be a waiver of any default hereunder or under the Note or the Loan Agreement. 9. NOTICES, ETC. Except as otherwise expressly provided in this Agreement, any notice, request, instruction, correspondence or other document to be given hereunder by either party to the other (herein collectively called a "Notice") shall be in writing and shall be given either by hand delivery or by certified mail, return receipt requested, to the addresses set forth beneath the signature of each party hereto. Notices given by hand delivery shall be effective as of the date delivered. Notices sent by mail shall be effective three days following deposit with the United States Postal Service. Both parties agree that, in the event of any notice given to the other party, the notice shall also be sent to the holder of the Subordinate Pledge at the following address: c/o I. Jerome Hirsch, Jaren Corporation, 4455 East Camelback Road, Suite 215-A, Phoenix, Arizona 85018. In the event any party (including the holder of the Subordinate Pledge) wishes to change the address for notices as specified herein, it shall give a notice pursuant to this section, whereupon the new notice shall be effective after the time stated herein. 10. SEVERABLE PROVISIONS; ENFORCEABILITY. Each provision of this Agreement is intended to be severable. If any provisions hereof shall be declared by a court of competent jurisdiction to be illegal, unenforceable or invalid for any reason whatsoever, such illegality, unenforceability or invalidity shall not affect the validity of the remainder of this Agreement. Time is of the essence hereof. 11. TERMINOLOGY. All captions, headings or titles in the paragraphs or sections of this Agreement are inserted for convenience of reference only and shall not constitute a part of this Agreement or affect the construction or interpretation of this Agreement. 12. CONTINUING SECURITY INTEREST; TRANSFER OF OBLIGATIONS. This Agreement creates a continuing security interest in the Pledged Collateral and shall (i) remain in full force and effect until performance in full of the Obligations, (ii) be binding upon the Pledgor, its successors, transferees and assigns and (iii) inure to the benefit of the Pledgee and its successors, transferees and assigns. The security interest herein granted shall terminate, and Pledgee shall execute and deliver to Pledgor such termination statements and other instruments as shall be necessary to release such security interest, when the Obligations of Acridge have been fully satisfied and all liabilities and obligations of Acridge under the Note or the Loan Agreement has terminated. Pledgor shall promptly notify Pledgee of any transfer of Pledgor's Interest and any change in Pledgor's name or the location of its chief executive office or principal place of business, and upon the happening of any of the foregoing events shall cause the Pledgor and transferee to execute such additional financing statements, continuation statements or other documents as may be necessary to continue the perfection of the security interest herein granted. The security interest herein granted shall continue in effect notwithstanding any transfer of Pledgor's Interest, regardless of whether such transfer may be permitted pursuant to this Agreement or any governing document of the Company. Nothing in this Agreement, express or implied, is intended to confer upon any person or entity other than the parties hereto and their respective permitted successors and assigns any rights, benefits or obligations hereunder. 13. INTERPRETATION. The parties hereto and their respective legal counsel have participated extensively in the preparation, negotiation and drafting of this Agreement. Accordingly, no presumption will apply in favor of any party hereto in the interpretation of this Agreement or in the resolution of the ambiguity of any provision hereof. 14. GOVERNING LAW; TERMS. This Agreement shall be governed by, and construed and enforced in accordance with the laws of the State of Arizona. Unless otherwise defined herein, terms defined in Article 9 of the Code are used herein as therein defined. 15. ATTORNEYS' FEES. In the event of any claim, controversy or dispute arising out of or relating to this Agreement, or the breach thereof, the prevailing party shall be entitled to recover reasonable attorneys' fees incurred in connection with any arbitration or court proceeding. IN WITNESS WHEREOF, Pledgor has caused this Agreement to be duly executed and delivered by its authorized officer thereunto duly authorized as of the date first above written. PLEDGOR: PLEDGEE: GIANT INDUSTRIES, INC., a Delaware corporation /s/ JAMES E. ACRIDGE _________________________ By: /s/ MARK B. COX James E. Acridge _______________________ Name: Mark B. Cox Title: Treasurer Address: Address: 23733 N. Scottsdale Road 23733 N. Scottsdale Road Scottsdale, Arizona 85255 Scottsdale, Arizona 85255 PINNACLE RODEO, L.L.C., an Arizona limited liability company By: /s/ JAMES E. ACRIDGE ______________________________ James E. Acridge Sole Member Address: 23733 N. Scottsdale Road Scottsdale, Arizona 85255 This Agreement is executed by the undersigned limited liability company solely to consent to the pledge of the Interest hereunder. PINNACLE RAWHIDE, L.L.C., an Arizona limited liability company By: /s/ JAMES E. ACRIDGE ___________________________________ James E. Acridge, sole member of Pinnacle Rodeo, L.L.C., its manager Address: 23733 N. Scottsdale Road Scottsdale, Arizona 85255