EXHIBIT 1.1
GIANT INDUSTRIES, INC.
U.S. $150,000,000
[____] % Senior Subordinated Notes due 2014
UNDERWRITING AGREEMENT
Dated April [__], 2004
BANC OF AMERICA SECURITIES LLC
BNP PARIBAS SECURITIES CORP.
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TABLE OF CONTENTS
SECTION 1. REPRESENTATIONS AND WARRANTIES....................................................................... 3
(a) Compliance with Registration Requirements.................................................................... 3
(b) Exchange Act Compliance...................................................................................... 4
(c) Offering Materials Furnished to Underwriters................................................................. 4
(d) Distribution of Offering Material By the Company............................................................. 4
(e) Authorization of the Underwriting Agreement.................................................................. 4
(f) Authorization of the Indenture............................................................................... 4
(g) Authorization of the DTC Letter of Representations........................................................... 5
(h) Authorization of the Notes................................................................................... 5
(i) Authorization of the Guarantees of the Notes................................................................. 5
(j) No Applicable Registration or Other Similar Rights........................................................... 5
(k) No Material Adverse Change................................................................................... 5
(l) Independent Accountants...................................................................................... 6
(m) Preparation of the Financial Statements...................................................................... 6
(n) Incorporation and Good Standing of the Company............................................................... 6
(o) Incorporation and Good Standing of the Subsidiary Guarantors................................................. 6
(p) Capitalization and Other Capital Stock Matters............................................................... 7
(q) Description of the Notes..................................................................................... 7
(r) Non-Contravention of Existing Instruments; No Further Authorizations or Approvals Required................... 7
(s) Required Consents............................................................................................ 8
(t) Supplemental Indenture....................................................................................... 8
(u) Notice of Term Loan Prepayment............................................................................... 8
(v) No Material Actions or Proceedings........................................................................... 8
(w) No Labor Disputes............................................................................................ 8
(x) Intellectual Property Rights................................................................................. 9
(y) All Necessary Permits, etc................................................................................... 9
(z) Title to Properties.......................................................................................... 9
(aa) Tax Law Compliance.......................................................................................... 9
(bb) Company Not an "Investment Company"......................................................................... 9
(cc) Insurance................................................................................................... 10
(dd) No Mandatory Redemption..................................................................................... 10
(ee) Solvency.................................................................................................... 10
(ff) No Price Stabilization or Manipulation...................................................................... 10
(gg) Related Party Transactions.................................................................................. 10
(hh) No Unlawful Contributions or Other Payments................................................................. 10
(ii) Company's Accounting System................................................................................. 10
(jj) Compliance with Environmental Laws.......................................................................... 11
(kk) Periodic Review of Costs of Environmental Compliance........................................................ 11
(ll) ERISA Compliance............................................................................................ 11
(mm) Brokers..................................................................................................... 12
(nn) No Outstanding Loans or Other Indebtedness.................................................................. 12
(oo) Compliance with Laws........................................................................................ 12
(pp) No Event of Default......................................................................................... 12
(qq) Disclosure Controls and Procedures.......................................................................... 12
SECTION 2. PURCHASE, SALE AND DELIVERY OF THE SECURITIES......................................................... 13
(a) The Closing Date............................................................................................. 13
(b) Public Offering of the Securities............................................................................ 13
(c) Payment for the Securities................................................................................... 13
(d) Delivery of the Securities................................................................................... 13
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(e) Delivery of Prospectus to the Underwriters................................................................... 14
SECTION 3. ADDITIONAL COVENANTS OF THE COMPANY................................................................... 14
(a) Representatives' Review of Proposed Amendments and Supplements............................................... 14
(b) Securities Act Compliance.................................................................................... 14
(c) Notification of Breach of this Agreement..................................................................... 14
(d) Amendments and Supplements to the Prospectus and Other Securities Act Matters................................ 14
(e) Copies of any Amendments and Supplements to the Prospectus................................................... 15
(f) Blue Sky Compliance.......................................................................................... 15
(g) DTC Eligibility.............................................................................................. 15
(h) Clearstream and Euroclear Eligibility........................................................................ 15
(i) Use of Proceeds.............................................................................................. 15
(j) Earnings Statement........................................................................................... 15
(k) Periodic Reporting Obligations............................................................................... 15
(l) Company to Provide Interim Financial Statements.............................................................. 15
(m) Agreement Not to Offer or Sell Additional Securities......................................................... 15
(n) Future Reports to the Representatives........................................................................ 16
(o) Investment Limitation........................................................................................ 16
(p) No Manipulation of Price..................................................................................... 16
(q) Existing Lock-Up Agreement................................................................................... 16
(r) Compliance with Consents..................................................................................... 16
(s) Notice of Redemption for 9% Notes............................................................................ 17
SECTION 4. PAYMENT OF EXPENSES................................................................................... 17
SECTION 5. CONDITIONS TO OBLIGATIONS OF THE UNDERWRITERS......................................................... 17
(a) No Untrue Statements; Inadvisable to Proceed................................................................. 17
(b) Corporate Proceedings........................................................................................ 18
(c) Resolutions.................................................................................................. 18
(d) Accountant's Comfort Letter.................................................................................. 18
(e) Bring-Down Comfort Letters................................................................................... 18
(f) Compliance with Registration Requirements; No Stop Order; No Objection from NASD............................. 18
(g) No Material Adverse Change................................................................................... 19
(h) Opinion of Counsel for the Company........................................................................... 19
(i) Opinion of Counsel for the Underwriters...................................................................... 19
(j) Officers' Certificate........................................................................................ 19
(k) Officer's Certificate Related to Financial Covenants......................................................... 20
(l) Other Certificates........................................................................................... 20
(m) Additional Documents......................................................................................... 20
(n) DTC Acceptance............................................................................................... 20
(o) Supplemental Indenture....................................................................................... 20
(p) Required Consents............................................................................................ 20
(q) Deposit in redemption trust account.......................................................................... 20
SECTION 6. REIMBURSEMENT OF UNDERWRITERS' EXPENSES............................................................... 21
SECTION 7. EFFECTIVENESS OF THIS AGREEMENT....................................................................... 21
SECTION 8. INDEMNIFICATION....................................................................................... 21
(a) Indemnification of the Company, its Directors and Officers................................................... 22
(b) Notifications and Other Indemnification Procedures........................................................... 22
(c) Settlements.................................................................................................. 23
SECTION 9. CONTRIBUTION.......................................................................................... 23
SECTION 10. DEFAULT OF ONE OR MORE OF THE SEVERAL UNDERWRITERS................................................... 24
SECTION 11. TERMINATION OF THIS AGREEMENT........................................................................ 25
SECTION 12. REPRESENTATIONS AND INDEMNITIES TO SURVIVE DELIVERY.................................................. 25
SECTION 13. NOTICES.............................................................................................. 26
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SECTION 14. SUCCESSORS........................................................................................... 26
SECTION 15. PARTIAL UNENFORCEABILITY............................................................................. 26
SECTION 16. GOVERNING LAW PROVISIONS............................................................................. 27
SECTION 17. GENERAL PROVISIONS................................................................................... 27
UNDERWRITING AGREEMENT
April [__], 2004
BANC OF AMERICA SECURITIES LLC
BNP PARIBAS SECURITIES CORP.
As Representatives of the several Underwriters
c/o Banc of America Securities LLC
9 West 57th Street
New York, New York 10019
Ladies and Gentlemen:
Introductory. Giant Industries Inc., a Delaware corporation (the
"Company"), proposes to issue and sell to the several underwriters named in
Schedule A (the "Underwriters") acting severally and not jointly, the
respective amounts set forth in such Schedule A of U.S. $150,000,000
aggregate principal amount of the Company's [____]% senior subordinated
notes due 2014 (the "Notes"). Banc of America Securities LLC ("BAS"), and
BNP Paribas Securities Corp. have agreed to act as representatives of the
several Underwriters (in such capacity, the "Representatives") in
connection with the offering and sale of the Notes.
The Notes are to be issued pursuant to an Indenture, to be dated
[____], 2004 and a supplemental indenture to be dated as of May [__], 2004,
each among the Company, the Subsidiary Guarantors (as defined below), and
The Bank of New York, as indenture trustee (the "Trustee") (collectively,
the "Indenture"). Notes issued in book-entry form will be issued in the
name of Cede & Co., as nominee of The Depository Trust Company ("DTC")
pursuant to a letter of representations, to be dated as of the Delivery
Date (as defined in Section 3) (the "DTC Letter of Representations"), among
the Company, the Subsidiary Guarantors party thereto, the Trustee and DTC.
The payment of principal of, premium and interest on the Notes will be
fully and unconditionally guaranteed on a senior subordinated basis,
jointly and severally, by all the Subsidiary Guarantors (collectively, the
"Subsidiary Guarantors", and together with the Company, the "Sellers"),
pursuant to their guarantees (the "Guarantees"). Each of the Subsidiary
Guarantors as of the date of this Agreement is listed in Schedule B. The
Notes and the Guarantees thereof are herein collectively referred to as the
"Securities".
The Company has prepared and filed with the Securities and Exchange
Commission (the "Commission") a registration statement on Form S-3 (File
No. 333-113590) for the registration of debt securities (including the
Notes), preferred stock, common stock, debt and equity warrants, stock
purchase contracts, stock purchase units and units of the Company under the
Securities Act of 1933, as amended, and the rules and regulations
promulgated thereunder (collectively, the "Securities Act"), and the
offering thereof from time to time in accordance with Rule 415 under the
Securities Act. Such registration statement has been declared effective by
the Commission. Such registration statement, as so amended, if applicable,
including the exhibits and schedules thereto, and including all documents
incorporated or deemed to be incorporated by reference therein pursuant to
Item 12 of Form S-3, prior to the execution of this Agreement, is called
the "Registration Statement". The final prospectus and the final prospectus
supplement relating to the offering of the Notes, in the form first
furnished to the Underwriters by the Company for use in connection with the
offering of the Notes, including all documents incorporated or deemed to be
incorporated by reference therein pursuant to
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Item 12 of Form S-3, prior to the execution of this Agreement, is called
the "Prospectus". A "preliminary prospectus" shall be deemed to refer to
any prospectus that omitted information to be included upon pricing in a
form of prospectus filed with the Commission pursuant to Rule 424(b) under
the Securities Act and was used prior to the execution and delivery of this
Agreement. All references in this Agreement to the Registration Statement,
a preliminary prospectus, the Prospectus or any amendments or supplements
to any of the foregoing, shall include any copy thereof filed with the
Commission pursuant to its Electronic Data Gathering, Analysis and
Retrieval System ("EDGAR").
All references in this Agreement to financial statements and schedules
and other information which is "contained", "included" or "stated" (all
other references of like import) in the Registration Statement, a
preliminary prospectus or the Prospectus shall be deemed to mean and
include all such financial statements and schedules and other information
which is or is deemed to be incorporated by reference in the Registration
Statement, a preliminary prospectus or the Prospectus, as the case may be,
prior to the execution of this Agreement; and all references in this
Agreement to amendments or supplements to the Registration Statement, a
preliminary prospectus or the Prospectus shall be deemed to mean and
include the filing of any document under the Securities Exchange Act of
1934, as amended, and the rules and regulations promulgated thereunder
(collectively, the "Exchange Act") which is or is deemed to be incorporated
by reference in the Registration Statement, a preliminary prospectus or the
Prospectus, as the case may be, after the execution of this Agreement.
On April 13, 2004, the Company mailed (the "Tender Offer and Consent
Solicitation") an Offer to Purchase and Consent Solicitation Statement
along with a Letter of Transmittal and Consent, thereby making a tender
offer to purchase for cash all $150 million aggregate principal amount
outstanding of the Company's 9% senior subordinated notes due 2007 (the "9%
Notes") and a consent solicitation to the adoption of certain proposed
amendments to the Indenture, dated August 26, 1997, as amended, among the
Company, the guarantors party thereto and The Bank of New York, as trustee
(the "1997 Indenture"). The Tender Offer and Consent Solicitation is
conditioned upon closing of the Senior Subordinated Notes Offering. The
closing of the Senior Subordinated Notes Offering is conditioned upon
receipt of appropriate waivers and/or consents, which were received from
the lenders party to the Revolving Credit Facility (as defined below) on
April 7th, 2004 and from the lenders party to the Term Loan Agreement (as
defined below) on April 6th, 2004 (collectively, the "Consents"). As
described in the Prospectus, the proceeds from the offering of the Notes,
together with cash in hand, will be used to finance the Tender Offer and
Consent Solicitation, and pay related transaction fees and expenses. The
consent solicitation relates to consents of the holders of the 9% Notes to
amend the provisions of the 1997 Indenture. Upon receipt of the requisite
consents (the "Requisite Consents"), the Company, the guarantors party
thereto and the trustee will enter into a supplemental indenture (the
"Supplemental Indenture") giving effect to the proposed amendments, which
would eliminate substantially all of the restrictive covenants and certain
other related provisions (including certain events of default of the 1997
Indenture).
In the event that all of the outstanding 9% Notes are not tendered to
the Company pursuant to the Tender Offer and Consent Solicitation, or the
Tender Offer and Consent Solicitation is not consummated for any reason,
the proceeds from the offering of the Notes not otherwise used in the
Tender Offer and Consent Solicitation, together with cash on hand, will be
used to redeem all of the $150 million aggregate principal amount of the 9%
Notes that remain outstanding after the completion or termination of the
Tender Offer and Consent Solicitation in accordance with the terms and
conditions under the 1997 Indenture (the "Back-End Redemption") and to pay
related redemption premiums and transaction fees and expenses. In the event
of a Back-End Redemption, the Company will issue an irrevocable notice of
such redemption of the 9% Notes (the "9% Notes Notice of
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Redemption") promptly (but in any event within 2 business days) following
expiration or termination of the Tender Offer and Consent Solicitation in
accordance with the terms and conditions under the 1997 Indenture and in
accordance with the terms contained in the Consents.
Concurrently with this offering of Notes pursuant to this Agreement,
the Company will issue and sell an aggregate of 3,000,000 shares (the "Firm
Common Shares") of its common stock, par value $0.01 per share (the "Common
Stock"), with an option granted to the underwriters in the offering to
purchase up to an additional 450,000 shares (the "Optional Common Shares")
of Common Stock, pursuant to a separate underwriting agreement dated the
date hereof, among the Company and the underwriters thereto, some of whom
are underwriters in this offering. The Firm Common Shares and, if and to
the extent such option is exercised, the Optional Common Shares are
collectively called the "Common Shares" and the offering of the Common
Shares is hereinafter referred to as the "Common Shares Offering". The
proceeds from the Common Shares Offering will be used to redeem a portion
of the aggregate outstanding principal amount of the Company's 11% senior
subordinated notes due 2012 (the "11% Notes") in accordance with the terms
and conditions under the Indenture, dated as of May 14, 2002, as amended,
among the Company, the guarantors party thereto and The Bank of New York,
as trustee (the "2002 Indenture"), and pay related redemption premiums and
transaction fees and expenses. The Company will issue an irrevocable notice
of such redemption of the 11% Notes (the "11% Notes Notice of Redemption")
on the closing date of the Common Shares Offering in accordance with the
terms and conditions under the 2002 Indenture.
Prior to the date hereof, the Company has given notice to the lenders
under the Term Loan Agreement (as defined below) to prepay the remaining
amounts outstanding under the Term Loan Agreement in July 2004 (the "Term
Loan Agreement Notice").
The Common Shares Offering, the 11% Notes Notice of Redemption and the
prepayment of the Term Loan Agreement in July 2004 are herein collectively
referred to as the "Related Transactions".
The Company hereby confirms its respective agreements with the
Underwriters as follows:
SECTION 1. REPRESENTATIONS AND WARRANTIES.
The Company and each Subsidiary Guarantor jointly and severally hereby
represent, warrant and covenant to each Underwriter as follows:
(a) Compliance with Registration Requirements. The Company meets the
requirements for use of Form S-3 under the Securities Act. The Registration
Statement has been declared effective by the Commission under the
Securities Act. No stop order suspending the effectiveness of the
Registration Statement is in effect and no proceedings for such purpose
have been instituted or are pending or, to the knowledge of the Company,
have been threatened by the Commission.
Each preliminary prospectus and the prospectus filed as part of the
Registration Statement as originally filed or as part of any amendment
thereto, or filed pursuant to Rule 424 under the Securities Act, complied
when so filed in all material respects with the Securities Act and each
preliminary prospectus and the Prospectus delivered to the Underwriter for
use in connection with the offer and sale of the Notes will, at the time of
such delivery, be identical to any copies filed by electronic transmission
pursuant to EDGAR (except as may be permitted by Regulation S-T under the
Securities Act). The Registration Statement and any post-effective
amendment thereto, at the time it
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became effective and at all subsequent times through the end of the
Prospectus Delivery Period (as hereinafter defined), complied and will
comply in all material respects with the Securities Act and did not and
will not contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading. The Prospectus, as amended or
supplemented, as of its date and at all subsequent times through the end of
the Prospectus Delivery Period, did not and will not contain any untrue
statement of a material fact or omit to state a material fact necessary in
order to make the statements therein, in the light of the circumstances
under which they were made, not misleading. The representations and
warranties set forth in the two immediately preceding sentences do not
apply to statements in or omissions from the Registration Statement, or any
post-effective amendment thereto, or the Prospectus, or any amendments or
supplements thereto, made in reliance upon and in conformity with
information relating to any Underwriter furnished to the Company in writing
by or on behalf of the Representatives expressly for use therein. There are
no contracts or other documents required to be described in the Prospectus
or to be filed as exhibits to the Registration Statement that have not been
described or filed as required.
(b) Exchange Act Compliance. The documents incorporated or deemed to
be incorporated by reference in the Registration Statement and Prospectus,
at the time they were or hereafter are filed with the Commission, complied
and will comply in all material respects with the requirements of the
Exchange Act, and, when read together with the other information in the
Prospectus, at the time the Registration Statement became effective and at
the Closing Date will not contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances under which
they were made, not misleading.
(c) Offering Materials Furnished to Underwriters. The Company has
delivered to the Representatives one complete manually signed copy of the
Registration Statement and of each consent and certificate of experts filed
as a part thereof.
(d) Distribution of Offering Material By the Company. The Company has
not distributed and will not distribute, prior to the later of the Closing
Date (as defined below) and the completion of the Underwriters'
distribution of the Notes, any offering material in connection with the
offering and sale of the Notes other than a preliminary prospectus, the
Prospectus or the Registration Statement.
(e) Authorization of the Underwriting Agreement. This Agreement has
been duly authorized, executed and delivered by, and is a valid and binding
agreement of, each Seller, enforceable in accordance with its terms, except
as rights to indemnification hereunder may be limited by applicable law and
except as the enforcement hereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or affecting
the rights and remedies of creditors or by general equitable principles.
(f) Authorization of the Indenture. The Indenture has been duly
authorized by each Seller and will be qualified under the Trust Indenture
Act of 1939, as amended ("the Trust Indenture Act"); on the Closing Date,
the Indenture will have been duly executed and delivered by each Seller
and, assuming due authorization, execution and delivery of the Indenture by
the Trustee, will constitute a legally valid and binding agreement of each
Seller enforceable against each Seller in accordance with its terms, except
to the extent that the enforceability thereof may be limited by (i)
bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer or
other similar laws relating to creditors' rights generally and (ii) general
principles of equity (regardless of whether such enforcement is considered
in a proceeding in equity or at law) and an implied covenant of good faith
and fair dealing.
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(g) Authorization of the DTC Letter of Representations. The DTC Letter
of Representations has been duly authorized by each Seller and, on the
Closing Date, will have been duly executed and delivered by each Seller and
will constitute a valid and legally binding agreement of each Seller,
enforceable against each Seller in accordance with its terms, except to the
extent that the enforceability thereof may be limited by (i) bankruptcy,
insolvency, reorganization, moratorium, fraudulent transfer or other
similar laws relating to creditors' rights generally and (ii) general
principles of equity (regardless of whether such enforcement is considered
in a proceeding in equity or at law) and an implied covenant of good faith
and fair dealing.
(h) Authorization of the Notes. The Notes are in the form contemplated
by the Indenture, have been duly authorized for issuance and sale as
contemplated by this Agreement, the Indenture and the Prospectus and, on
the Closing Date will have been duly executed by the Company and, when
issued and authenticated in accordance with the terms of the Indenture, and
delivered in the manner provided for in this Agreement against payment of
the consideration therefor specified in the Prospectus, will constitute
valid and legally binding obligations of the Company, enforceable against
the Company in accordance with their terms, and will be entitled to the
benefits of the Indenture, except to the extent that the enforceability
thereof may be limited by (i) bankruptcy, insolvency, reorganization,
moratorium, fraudulent transfer or other similar laws relating to
creditors' rights generally and (ii) general principles of equity
(regardless of whether such enforcement is considered in a proceeding in
equity or at law) and an implied covenant of good faith and fair dealing.
(i) Authorization of the Guarantees of the Notes. The Guarantees of
the Notes are in the respective forms contemplated by the Indenture, have
been duly authorized for issuance as contemplated by this Agreement, the
Indenture and the Prospecuts and, on the Closing Date will have been duly
executed by each of the Subsidiary Guarantors and, when the Notes have been
issued and authenticated in accordance with the terms of the Indenture and
delivered against payment therefor, will constitute valid and legally
binding obligations of the Subsidiary Guarantors, enforceable against each
of the Subsidiary Guarantors in accordance with their terms, and will be
entitled to the benefits of the Indenture, except to the extent that the
enforceability thereof may be limited by (i) bankruptcy, insolvency,
reorganization, moratorium, fraudulent transfer or other similar laws
relating to creditors' rights generally and (ii) general principles of
equity (regardless of whether such enforcement is considered in a
proceeding in equity or at law) and an implied covenant of good faith and
fair dealing.
(j) No Applicable Registration or Other Similar Rights. There are no
persons with registration or other similar rights to have any equity or
debt securities registered for sale under the Registration Statement or
included in the offering contemplated by this Agreement or the concurrent
Common Shares Offering.
(k) No Material Adverse Change. Since the respective dates as of which
information is given in the Prospectus, and except as otherwise stated
therein, (i) there has been no material adverse change in the assets,
liabilities, results of operations, condition (financial or otherwise),
earnings, business affairs or prospects, whether or not arising from
transactions in the ordinary course of business, of the Company and its
subsidiaries, taken as a whole (any such change is called a "Material
Adverse Change"), (ii) there has been no transaction entered into or
material liability or obligation, direct, indirect or contingent, incurred
by the Company or any subsidiary that is material to the Company and its
subsidiaries, taken as a whole, and (iii) there has been no dividend
declared, paid or made by the Company or, except for dividends paid to the
Company or other subsidiaries, any of its subsidiaries on any class of its
capital stock or repurchase or redemption by the Company or any of its
subsidiaries of any class of capital stock.
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(l) Independent Accountants. Deloitte & Touche LLP, the accountants
who have audited and reported upon the financial statements of the Company
and its subsidiaries and the related notes thereto, together with the
supporting schedules filed with the Commission as part of the Registration
Statement and included in the Prospectus, are independent public
accountants with respect to the Company and its subsidiaries within the
meaning of the Exchange Act.
(m) Preparation of the Financial Statements. The financial statements
of the Company and its consolidated subsidiaries and the related notes
thereto filed with the Commission as a part of the Registration Statement
and included in the Prospectus present fairly the consolidated financial
position of the Company and its consolidated subsidiaries as of the dates
indicated and the results of their operations for the periods specified;
such financial statements have been prepared in conformity with generally
accepted accounting principles applied on a consistent basis throughout the
periods involved. No other financial statements or supporting schedules are
required to be included in the Registration Statement. The historical
financial data set forth in the Prospectus under the captions "Prospectus
Supplement Summary - Summary Financial Data," "Selected Financial Data" and
"Capitalization" fairly present the information set forth therein on a
basis consistent with that of the audited financial statements contained in
the Registration Statement.
(n) Incorporation and Good Standing of the Company. The Company has
been duly incorporated and is validly existing as a corporation in good
standing under the laws of the State of Delaware, with full corporate power
and authority to own, lease and operate its properties and conduct its
business as presently conducted and as described in the Prospectus and to
enter into and perform its obligations under each of this Agreement, the
DTC Letter of Representations, the Securities and the Indenture and to
consummate the Tender Offer and Consent Solicitation and/or the Back-End
Redemption of the 9% Notes and to enter into and perform its obligations
under the Related Transactions. The Company is duly qualified as a foreign
corporation to transact business and is in good standing in each
jurisdiction in which such qualification is required, whether by reason of
the ownership or leasing of property or the conduct of business, except
where the failure to so qualify would not, singly or in the aggregate, have
a Material Adverse Effect on the Company and its subsidiaries, taken as a
whole. As used herein, "Material Adverse Effect," with respect to any
person, means a material adverse effect on the assets, liabilities, results
of operations, condition (financial or otherwise), earnings, business
affairs or prospects, whether or not arising from transactions in the
ordinary course of business, of such person and its subsidiaries, taken as
a whole.
(o) Incorporation and Good Standing of the Subsidiary Guarantors. The
Subsidiary Guarantors are the only direct or indirect subsidiaries, whether
wholly or partially owned, of the Company, other than Navajo Convenient
Stores Co., LLC. Each of the Subsidiary Guarantors has been duly
incorporated and is validly existing as a corporation in good standing
under the laws of the jurisdiction of its incorporation, has corporate
power and authority to own, lease and operate its properties and conduct
its business as presently conducted and as described in the Prospectus and
to enter into and perform its obligations under each of this Agreement, the
DTC Letter of Representations, the Securities and the Indenture and to
consummate the Tender Offer and Consent Solicitation and/or the Back-End
Redemption of the 9% Notes, to enter into and perform its obligations under
the Related Transactions. Each of the Subsidiary Guarantors is duly
qualified as a foreign corporation to transact business and is in good
standing in each jurisdiction in which such qualification is required,
whether by reason of the ownership or leasing of property or the conduct of
business, except where the failure to so qualify would not, singly or in
the aggregate, have a Material Adverse Effect on the Company. Except with
respect to Navajo Convenient Store Co., LLC (which is a majority owned
subsidiary), all the issued and outstanding capital stock of each such
Subsidiary Guarantor has been duly authorized and validly issued, is fully
paid and nonassessable and is owned by the Company or another Subsidiary
Guarantor, free and clear of any security interest, mortgage,
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pledge, lien, charge or other encumbrance (each, a "Lien"), except for the
Liens under the (i) $100 million Second Amended and Restated Credit
Agreement, dated as of May 14, 2002, among the Company, the lenders party
thereto and Bank of America, N.A., as administrative agent and as letter of
credit bank, as amended by the First Amendment to Second Amended and
Restated Credit Agreement, dated October 28, 2002, the Second Amendment to
Second Amended and Restated Credit Agreement, dated September 30, 2003, and
the Third Amendment to Second Amended and Restated Credit Agreement, dated
February 9, 2004 (collectively, the "Revolving Credit Facility"), and (ii)
Loan Agreement, dated as of May 14, 2002, among Giant Yorktown, Inc., Banc
of America Leasing & Capital, LLC, and Wells Fargo Bank Nevada, National
Association, as collateral agent, as amended by the Amendment to Loan
Agreement and Omnibus Amendment, dated as of May 22, 2002, the Second
Amendment to Loan Agreement and Omnibus Amendment, dated as of October 28,
2002, the Third Amendment to Loan Agreement and Omnibus Amendment, dated as
of December 20, 2002, and the Fourth Amendment to Loan Agreement and
Omnibus Amendment, dated as of February 9, 2004 (collectively, the "Term
Loan Agreement"). The Company does not own or control, directly or
indirectly, any corporation, association or other entity other than the
subsidiaries listed in Exhibit 21.1 to the Company's Annual Report on Form
10-K for the fiscal year ended December 31, 2003.
(p) Capitalization and Other Capital Stock Matters. The authorized,
issued and outstanding capitalization is as set forth in the Prospectus
under the caption "Capitalization". All the issued and outstanding shares
of the capital stock of the Company have been duly authorized and validly
issued and are fully paid and non-assessable and have been issued in
compliance with Federal and State securities laws. None of the outstanding
shares of Common Stock were issued in violation of any preemptive rights,
rights of first refusal or other similar rights to subscribe for or
purchase securities of the Company. There are no authorized or outstanding
options, warrants, preemptive rights, rights of first refusal or other
rights to purchase, or equity or debt securities convertible into or
exchangeable or exercisable for, any capital stock of the Company or any of
its subsidiaries other than those accurately described in the Prospectus.
The description of the Company's stock option, stock bonus and other stock
plans or arrangements, and the options or other rights granted thereunder,
set forth in the Prospectus accurately and fairly presents the information
required to be shown with respect to such plans, arrangements, options and
rights under the Securities Act and Exchange Act.
(q) Description of the Notes. The Notes, the Guarantees of the Notes
and the Indenture will conform in all material respects to the respective
statements thereto contained in the Prospectus.
(r) Non-Contravention of Existing Instruments; No Further
Authorizations or Approvals Required. No Seller is in violation of its
charter or by-laws and no Seller is in default (or, with the giving of
notice or lapse of time, would be in default) ("Default") in the
performance or observance of any obligation, agreement, covenant or
condition contained in any Contract (as defined below) or any applicable
law, administrative regulation or administrative or court order or decree,
except for such defaults as would not, singly or in the aggregate, have a
Material Adverse Effect on the Company. The execution, delivery and
performance by the Sellers of this Agreement, the DTC Letter of
Representations and the Indenture and the issuance and delivery of the
Securities and the consummation of the transactions contemplated herein and
therein and in the Prospectus (including the consummation of the Tender
Offer and Consent Solicitation and/or the Back-End Redemption the 9% Notes)
and the Related Transactions have been duly authorized by all necessary
corporate action and will not conflict with or constitute a breach of, or a
Default or a Debt Repayment Triggering Event (as defined below) under, or
the loss of any material benefit under, or the termination of, or result in
the creation or imposition of any Lien upon any property or assets of any
Seller pursuant to any contract, indenture, mortgage, loan agreement, note,
lease, license or other instrument to which any Seller is a party or by
which any of them may be bound (including, without limitation, the 2002
8
Indenture, the 1997 Indenture, the Revolving Credit Facility and the Term
Loan Agreement or to which any of the property or assets of any of them is
subject (each, a "Contract"), except for such conflicts, breaches,
Defaults, losses or Liens as would not, singly or in the aggregate, have a
Material Adverse Effect on the Company, nor will such action result in any
violation of the provisions of the charter or bylaws of any Seller or any
applicable law, administrative regulation or administrative or court order
or decree applicable to any Seller. Except such as have been obtained by
the Sellers and are in full force and effect under the Securities Act,
applicable state securities or blue sky laws and from the New York Stock
Exchange or the National Association of Securities Dealers, Inc. (the
"NASD"), no consent, approval, authorization or order of, or notice to or
filing with, any United States federal or state governmental or regulatory
agency or body or any court of the United States or of any state thereof is
required for each Seller's execution, delivery and performance of this
Agreement, the DTC Letter of Representations or the Indenture or the
issuance and delivery of the Securities, or consummation of the
transactions contemplated herein and therein and in the Prospectus
(including the consummation of the Tender Offer and Consent Solicitation
and/or the Back-End Redemption of the 9% Notes) and the Related
Transactions. As used herein, a "Debt Repayment Triggering Event" means any
event or condition which gives, or with the giving of notice or lapse of
time would give, the holder of any note, debenture or other evidence of
indebtedness (or any person acting on such holder's behalf) the right to
require the repurchase, redemption or repayment of all or a portion of such
indebtedness by any Seller.
(s) Required Consents. The Company has, on or prior to the date
hereof, obtained the Consents to permit the consummation of the Senior
Subordinated Notes Offering and such Consents continue to be in effect on
the date hereof.
(t) Supplemental Indenture. On or prior to the date hereof, the
Supplemental Indenture has been duly authorized, executed and delivered by
the Company and the guarantors party thereto, and (assuming due
authorization, execution and delivery thereof by the trustee) the
Supplemental Indenture, as well as the 1997 Indenture (as amended by the
Supplemental Indenture) and the 9% Notes issued thereunder, will be the
valid and legally binding obligations of the Company entitled, in the case
of the 9% Notes, to the benefits of the 1997 Indenture (as amended by the
Supplemental Indenture) and are enforceable against the Company in
accordance with their respective terms, except as enforcement thereof may
be limited by bankruptcy, insolvency, reorganization, moratorium or other
laws relating to or affecting creditors' rights and remedies generally and
general principles of equity (regardless of whether enforcement is sought
in a proceeding at law or in equity). The Company has obtained the
Requisite Consents of the holders of the Notes necessary to enter into the
Supplemental Indenture.
(u) Notice of Term Loan Prepayment. Prior to the date hereof, the
Company has given the Term Loan Agreement Notice.
(v) No Material Actions or Proceedings. Except as otherwise disclosed
in the Prospectus, there is no action, suit or proceeding before or by any
court or governmental agency or body now pending or, to the knowledge of
any Seller, threatened against or affecting any Seller which, if adversely
determined, would result in a Material Adverse Effect on the Company, or
would prevent or hinder the consummation of all the transactions
contemplated by this Agreement and in the Prospectus (including the
consummation of the Tender Offer and Consent Solicitation and/or the
Back-End Redemption of the 9% Notes) and the Related Transactions.
(w) No Labor Disputes. No strike, work stoppage or other similar labor
dispute with the employees of any Seller, or, to the knowledge of the
Company, with the employees of any principal
9
supplier of any Seller, exists or, to the knowledge of the any Seller, is
threatened, which would have a Material Adverse Effect on the Company.
(x) Intellectual Property Rights. The Sellers own or possess
sufficient trademarks, trade names, copyrights, licenses, approvals, trade
secrets and other similar rights (collectively, "Intellectual Property
Rights") reasonably necessary to conduct their businesses as now conducted;
and the expected expiration of any of such Intellectual Property Rights
would not result in a Material Adverse Effect on the Company. None of the
Sellers has received any notice of infringement or conflict with asserted
Intellectual Property Rights of others, which infringement or conflict, if
the subject of an unfavorable decision, would result in a Material Adverse
Effect on the Company.
(y) All Necessary Permits, etc. The Sellers possess such certificates,
authorizations or permits issued by the appropriate regulatory or other
governmental agencies or bodies as are necessary to conduct the business as
now conducted by the Sellers and as described in the Prospectus, each such
certificate, authorization and permit being in full force and effect and
each Seller is in compliance with the terms of each such certificate,
authorization and permit, except where the failure to possess or comply
with any such certificate, authorization or permit would not, singly or in
the aggregate, have a Material Adverse Effect on the Company; and neither
the Company nor any Subsidiary Guarantor has received any notice of
proceedings relating to the revocation or modification of, or
non-compliance with, any such certificate, authorization or permit which,
singly or in the aggregate, if the subject of an unfavorable decision,
ruling or finding, would have a Material Adverse Effect on the Company.
(z) Title to Properties. Each Seller has good and marketable title to
all the properties and assets reflected as owned in the financial
statements of the Company and its consolidated subsidiaries referred to in
Section 1(o) above (or elsewhere in the Prospectus) free and clear of any
Liens, except for the Liens under the Revolving Credit Facility and the
Term Loan Agreement and such as do not materially and adversely affect the
value of such property and do not materially interfere with the use made or
proposed to be made of such property by such Seller. The real property,
improvements, equipment and personal property held under lease by such
Seller are held under valid and enforceable leases, with such exceptions as
are not material and do not materially interfere with the use made or
proposed to be made of such real property, improvements, equipment or
personal property by such Seller.
(aa) Tax Law Compliance. All necessary federal, state and foreign
income and franchise tax returns required to be filed by any Seller have
been filed, other than those filings being contested in good faith, and all
material taxes, including withholding taxes, penalties and interest,
assessments, fees and other charges due or claimed to be due from such
entities have been paid, other than those being contested in good faith and
for which adequate reserves have been provided or those currently payable
without penalty or interest. The Company has made adequate charges,
accruals and reserves in the applicable financial statements referred to in
Section 1(j) above in respect of all federal, state and foreign income and
franchise taxes for all periods as to which the tax liability of any Seller
has not been finally determined.
(bb) Company Not an "Investment Company". The Company is not and will
not after receipt of payment for the Securities and the Senior Subordinated
Notes in the concurrent Senior Subordinated Notes Offering be (i) an
"investment company" or a company "controlled" by an investment company
within the meaning of the United States Investment Company Act of 1940, as
amended, (ii) a "holding company" or a "subsidiary company" of a holding
company or an "affiliate" thereof within the meaning of the United States
Public Utility Holding Company Act of 1935, as amended, or (iii)
10
subject to regulation under the United States Federal Power Act or any
federal or state statute or regulation limiting its ability to incur
indebtedness for borrowed money.
(cc) Insurance. Except as otherwise disclosed in the Prospectus, each
of the Sellers is insured by recognized, financially sound institutions
with policies in such amounts and with such deductibles and covering such
risks as are generally deemed adequate and customary for its business
including, but not limited to, policies covering real and personal property
owned or leased by such Seller against theft, damage, destruction, acts of
vandalism and earthquakes. Except as disclosed in the Prospectus, none of
the Sellers has any reason to believe that it will not be able (i) to renew
its existing insurance coverage as and when such policies expire or (ii) to
obtain comparable coverage from similar institutions as may be necessary or
appropriate to conduct its business as now conducted and at a cost that
would not result in a Material Adverse Effect on the Company, as the case
may be. None of the Sellers has been denied any insurance coverage which it
has sought or for which it has applied.
(dd) No Mandatory Redemption. Except as otherwise disclosed in the
Prospectus, the Company is not actively considering any plan or transaction
that, if consummated, would result in any mandatory requirement to redeem,
or make an offer to purchase, any securities of the Company pursuant to the
terms thereof.
(ee) Solvency. Each of the Sellers is, and immediately after the
Closing Date (after giving effect to the sale of the Securities and the
application of the proceeds therefrom, and the Related Transactions), will
be, Solvent. As used herein, the term "Solvent" means, with respect to any
Seller on a particular date, that on such date the fair market value of the
assets of such Seller is greater than the total amount of liabilities
(including contingent liabilities) of such Seller, (ii) the present fair
salable value of the assets of such Seller is greater than the amount that
will be required to pay the probable liabilities of such Seller on its
debts as they become absolute and matured, (iii) such Seller is able to
realize upon its assets and pay its debts and other liabilities, including
contingent obligations, as they mature and (iv) such Seller does not have
unreasonably small capital.
(ff) No Price Stabilization or Manipulation. The Company has not taken
and will not take, directly or indirectly, any action designed to or that
might be reasonably expected to cause or result in stabilization or
manipulation of the price of Securities to facilitate the sale or resale of
the Securities.
(gg) Related Party Transactions. There are no business relationships
or related-party transactions involving the Sellers or any other person
required to be described in the Prospectus which have not been described as
required.
(hh) No Unlawful Contributions or Other Payments. None of the Sellers
nor, to the knowledge of the senior management of the Company, any employee
or agent of any Seller, has, at any time during the last five years, made
any contribution or other payment to any official of, or candidate for, any
federal, state or foreign office in violation of any law where such
violation would result in a Material Adverse Change or be of the character
required to be disclosed in the Prospectus.
(ii) Company's Accounting System. Except as otherwise disclosed in the
Prospectus, the Company maintains a system of accounting controls
sufficient to provide reasonable assurances that (i) transactions are
executed in accordance with management's general or specific authorization;
(ii) transactions are recorded as necessary to permit preparation of
financial statements in conformity with generally accepted accounting
principles and to maintain accountability for assets; (iii) access to
assets is permitted only in accordance with management's general or
specific authorization; and (iv) the recorded accountability for assets is
compared with existing assets at reasonable intervals and appropriate
action is taken with respect to any differences.
11
(jj) Compliance with Environmental Laws. Except as otherwise disclosed
in the Prospectus or as would not, singly or in the aggregate, result in a
Material Adverse Effect on the Company, as the case may be, (i) none of the
Sellers is in violation of any federal, state, local or foreign law or
regulation relating to pollution or protection of human health or the
environment (including, without limitation, ambient air, surface water,
groundwater, land surface or subsurface strata) or wildlife, including,
without limitation, laws and regulations relating to emissions, discharges,
releases or threatened releases of chemicals, pollutants, contaminants,
wastes, toxic substances, hazardous substances, petroleum and petroleum
products (collectively, "Materials of Environmental Concern"), or otherwise
relating to the manufacture, processing, distribution, use, treatment,
storage, disposal, transport or handling of Materials of Environmental
Concern (collectively, "Environmental Laws"), which violation includes, but
is not limited to, noncompliance with any permits or other governmental
authorizations required for the operation of the business of any Seller
under applicable Environmental Laws, or noncompliance with the terms and
conditions thereof, nor has any Seller received any written communication,
whether from a governmental authority, citizens group, employee or
otherwise, that alleges that such Seller is in violation of any
Environmental Law; (ii) there is no claim, action or cause of action filed
with a court or governmental authority, nor investigation with respect to
which any Seller has received written notice, and no written notice by any
person or entity alleging potential liability for investigatory costs,
cleanup costs, governmental responses costs, natural resources damages,
property damages, personal injuries, attorneys' fees or penalties arising
out of, based on or resulting from the presence, or release into the
environment, of any Material of Environmental Concern at any location
owned, leased or operated by such Seller, now or in the past (collectively,
"Environmental Claims"), pending, or, to the best of such Seller's
knowledge, threatened or contemplated against such Seller or any of its
subsidiaries or any person or entity whose liability for any Environmental
Claim such Seller has retained or assumed either contractually or by
operation of law; and (iii) to the best of such Seller's knowledge, there
are no past or present actions, activities, circumstances, conditions,
events or incidents, including, without limitation, the release, emission,
discharge, presence or disposal of any Material of Environmental Concern,
that reasonably could result in a violation of any Environmental Law or
form the basis of a potential Environmental Claim against such Seller or
against any person or entity whose liability for any Environmental Claim
such Seller has retained or assumed either contractually or by operation of
law.
(kk) Periodic Review of Costs of Environmental Compliance. In the
ordinary course of its business, the Sellers conduct a periodic review of
the effect of Environmental Laws on its business, operations and
properties, in the course of which it identifies and evaluates associated
costs and liabilities (including, without limitation, any capital or
operating expenditures required for clean-up, closure of properties or
compliance with Environmental Laws or any permit, license or approval, any
related constraints on operating activities and any potential liabilities
to third parties). On the basis of such review and the amount of its
established reserves, the Sellers have reasonably concluded that such
associated costs and liabilities would not, singly or in the aggregate,
result in a Material Adverse Effect on the Company, except as otherwise
disclosed in the Prospectus.
(ll) ERISA Compliance. The Sellers and any "employee benefit plan" (as
defined under the Employee Retirement Income Security Act of 1974, as
amended, and the regulations and published interpretations thereunder
(collectively, "ERISA")) established or maintained by any Seller or their
"ERISA Affiliates" (as defined below) are and will be in compliance in all
material respects with ERISA. "ERISA Affiliate" means, with respect to any
Seller, any member of any group of organizations described in Section
414(b), (c), (m) or (o) of the Internal Revenue Code of 1986, as amended,
and the regulations and published interpretations thereunder (the "Code")
of which such Seller is a member. No "reportable event" (as defined under
ERISA and for which notice has not been waived by applicable regulations)
has occurred or is reasonably expected to occur with respect to any
"employee benefit plan" established or maintained by any Seller or any of
their ERISA
12
Affiliates. No "employee benefit plan" established or maintained by any
Seller or any of their ERISA Affiliates, if such "employee benefit plan"
were terminated, would have any "amount of unfunded benefit liabilities"
(as defined in Title IV of ERISA), except that, in the case of the Giant
Yorktown Cash Balance Plan, the amount of such unfunded benefit
liabilities, if any, would not have a Material Adverse Effect on the
Company. None of the Sellers or any of their ERISA Affiliates has incurred
or reasonably expects to incur any liability under (i) Title IV of ERISA
with respect to termination of, or withdrawal from, any "employee benefit
plan" or (ii) Sections 412, 4971, 4975 or 4980B of the Code. Each "employee
benefit plan" established or maintained by any Seller or any of their ERISA
Affiliates that is intended to be qualified under Section 401 of the Code
is and will be so qualified and, to the best of the Sellers' knowledge,
nothing has occurred, whether by action or failure to act, which would
cause the loss of such qualification.
(mm) Brokers. There is no broker, finder or other party that is
entitled to receive from the Company any brokerage or finder's fee or other
fee or commission as a result of any transactions contemplated by this
Agreement, except as provided in this Agreement.
(nn) No Outstanding Loans or Other Indebtedness. Except as otherwise
disclosed in the Prospectus, there are no outstanding loans, advances
(except normal advances for business expenses in the ordinary course of
business) or guarantees of indebtedness by the Company to or for the
benefit of any of the officers or directors of the Company.
(oo) Compliance with Laws. The Company has not been advised, and has
no reason to believe, that it and each of its subsidiaries are not
conducting business in compliance with all applicable laws, rules and
regulations of the jurisdictions in which it is conducting business, except
as otherwise disclosed in the Prospectus or except where failure to be so
in compliance would not result in a Material Adverse Change.
(pp) No Event of Default. No event of default exists under any
contract, indenture, mortgage, loan agreement, note, lease or other
agreement or instrument constituting Senior Indebtedness (as defined in the
2002 Indenture).
(qq) Disclosure Controls and Procedures. The Company has established
and maintains disclosure controls and procedures (as such term is defined
in Rule 13a-14 under the Exchange Act), which (i) are designed to ensure
that material information relating to the Company, including its
consolidated subsidiaries, is made known to the Company's principal
executive officer and itssac principal financial officer by others within
those entities, particularly during the periods in which the periodic
reports required under the Exchange Act are being prepared, (ii) have been
evaluated for effectiveness as of a date within 90 days prior to the filing
of the Company's most recent annual or quarterly report filed with the
Commission and (iii) are effective in all material respects to perform the
functions for which they were established. Based on the evaluation of the
Company's disclosure controls and procedures described above, the Company
is not aware of (a) any significant deficiency in the design or operation
of internal controls which could adversely affect the Company's ability to
record, process, summarize and report financial data or any material
weaknesses in internal controls or (b) any fraud, whether or not material,
that involves management or other employees who have a significant role in
the Company's internal controls. Since the most recent evaluation of the
Company's disclosure controls and procedures described above, there have
been no significant changes in internal controls or in other factors that
could significantly affect internal controls.
Any certificate signed by an officer of the Company and delivered to
the Representatives or to counsel for the Underwriters shall be deemed to
be a representation and warranty by the Company to each Underwriter as to
the matters set forth therein.
13
The Company acknowledges that the Underwriters and, for purposes of the
opinions to be delivered pursuant to Section 5 hereof, counsel to the Company
and counsel to the Underwriters, will rely upon the accuracy and truthfulness of
the foregoing representations and hereby consents to such reliance.
SECTION 2. PURCHASE, SALE AND DELIVERY OF THE SECURITIES.
The Securities. Upon the terms herein set forth, the Sellers agree to issue and
sell to the several Underwriters an aggregate of $150,000,000 Securities. On the
basis of the representations, warranties and agreements herein contained, and
upon the terms but subject to the conditions herein set forth, the Underwriters
agree, severally and not jointly, to purchase from the Company the respective
number of Securities set forth opposite their names on Schedule A. The purchase
price of the Securities to be paid by the several Underwriters to the Company
shall be [________]% of the aggregate principal amount of the Securities.
(a) The Closing Date. Delivery of certificates for the Securities to be
purchased by the Underwriters and payment therefor shall be made at the offices
of Shearman & Sterling LLP, 599 Lexington Avenue, New York, New York 10022 (or
such other place as may be agreed to by the Company and the Representatives) at
9:00 a.m. New York time, on May [__], 2004 or such other time and date as the
Representatives and the Company shall agree (the time and date of such closing
are called the "Closing Date").
(b) Public Offering of the Securities. The Representatives hereby advise the
Company that the Underwriters intend to offer for sale to the public, as
described in the Prospectus, their respective portions of the Securities as soon
after this Agreement has been executed and the Registration Statement has been
declared effective as the Representatives, in their sole judgment, have
determined is advisable and practicable.
(c) Payment for the Securities. Payment for the Securities to be sold by the
Company shall be made at the Closing Date by wire transfer of immediately
available funds to the order of the Company.
It is understood that the Representatives have been authorized, for their
own account and the accounts of the several Underwriters, to accept delivery of
and receipt for, and make payment of the purchase price for, the Securities the
Underwriters have agreed to purchase. BAS, individually and not as a
Representative of the Underwriters, may (but shall not be obligated to) make
payment for any Securities to be purchased by any Underwriter whose funds shall
not have been received by the Representatives by the Closing Date for the
account of such Underwriter, but any such payment shall not relieve such
Underwriter from any of its obligations under this Agreement.
(d) Delivery of the Securities. The Company shall deliver, or cause to be
delivered, to the Representatives for the accounts of the several Underwriters
certificates for the Securities to be sold by them at the Closing Date, against
the irrevocable release of a wire transfer of immediately available funds for
the amount of the purchase price therefor. The certificates for the Securities
shall be in definitive form and registered in such names and denominations as
the Representatives shall have requested at least two full business days prior
to the Closing Date and shall be made available for inspection on the business
day preceding the Closing Date at a location in New York City as the
Representatives may designate. Time shall be of the essence, and delivery at the
time and place specified in this Agreement is a further condition to the
obligations of the Underwriters.
14
(e) Delivery of Prospectus to the Underwriters. Not later than 12:00 p.m. on
the second business day following the date the Securities are first released by
the Underwriters for sale to the public, the Company shall deliver or cause to
be delivered, copies of the Prospectus in such quantities and at such places as
the Representatives shall request.
SECTION 3. ADDITIONAL COVENANTS OF THE COMPANY.
The Company and each Subsidiary Guarantor jointly and severally further covenant
and agree with each Underwriter as follows:
(a) Representatives' Review of Proposed Amendments and Supplements. During
such period beginning on the date hereof and ending on the later of the Closing
Date or such date, as in the opinion of counsel for the Underwriters, the
Prospectus is no longer required by law to be delivered in connection with sales
by an Underwriter or dealer (the "Prospectus Delivery Period"), prior to
amending or supplementing the Registration Statement (including any registration
statement filed under Rule 462(b) under the Securities Act) or the Prospectus,
the Company shall furnish to the Representatives for review a copy of each such
proposed amendment or supplement, and the Company shall not file any such
proposed amendment or supplement to which the Representatives or their counsel
reasonably object.
(b) Securities Act Compliance. After the date of this Agreement, the Company
shall promptly advise the Representatives in writing (i) of the receipt of any
comments of, or requests for additional or supplemental information from, the
Commission, (ii) of the time and date of any filing of any post-effective
amendment to the Registration Statement or any amendment or supplement to any
preliminary prospectus or the Prospectus, (iii) of the time and date that any
post-effective amendment to the Registration Statement becomes effective and
(iv) of the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or any post-effective amendment
thereto or of any order preventing or suspending the use of any preliminary
prospectus or the Prospectus, or of any proceedings to remove, suspend or
terminate from listing or quotation the Common Stock from any securities
exchange upon which it is listed for trading or included or designated for
quotation, or of the threatening or initiation of any proceedings for any of
such purposes. If the Commission shall enter any such stop order at any time,
the Company will use its best efforts to obtain the lifting of such order at the
earliest possible moment. Additionally, the Company agrees that it shall comply
with the provisions of Rules 424(b), 430A and 434, as applicable, under the
Securities Act and will use its reasonable efforts to confirm that any filings
made by the Company under such Rule 424(b) were received in a timely manner by
the Commission.
(c) Notification of Breach of this Agreement. The Sellers shall comply with
the terms of the Indenture and the Prospectus and shall promptly notify the
Representatives if any of the Sellers discovers that any of its representations
contained in this Agreement is not, at any time prior to the completion of the
distribution of the Securities, true and correct, or if any of the Sellers has
at any such time breached any of its obligations hereunder.
(d) Amendments and Supplements to the Prospectus and Other Securities Act
Matters. If, during the Prospectus Delivery Period, any event shall occur or
condition exist as a result of which it is necessary to amend or supplement the
Prospectus in order to make the statements therein, in the light of the
circumstances when the Prospectus is delivered to a purchaser, not misleading,
or if in the opinion of the Representatives or counsel for the Underwriters it
is otherwise necessary to amend or supplement the Prospectus to comply with law,
the Company agrees to promptly prepare (subject to Section 3(A)(a) hereof), file
with the Commission and furnish at its own expense to the Underwriters and to
dealers, amendments or supplements to the Prospectus so that the statements in
the Prospectus
15
as so amended or supplemented will not, in the light of the circumstances when
the Prospectus is delivered to a purchaser, be misleading or so that the
Prospectus, as amended or supplemented, will comply with law.
(e) Copies of any Amendments and Supplements to the Prospectus. The Company
agrees to furnish the Representatives, without charge, during the Prospectus
Delivery Period, as many copies of the Prospectus and any amendments and
supplements thereto (including any documents incorporated or deemed incorporated
by reference therein) as the Representatives may reasonably request.
(f) Blue Sky Compliance. The Sellers shall cooperate with the Representatives
and counsel for the Underwriters to qualify or register the Securities for sale
under (or obtain exemptions from the application of) the state securities or
Blue Sky laws of those jurisdictions designated by the Representatives, shall
comply with such laws and shall continue such qualifications, registrations and
exemptions in effect so long as required for the distribution of the Securities.
The Sellers shall not be required to qualify as foreign corporations or to take
any action that would subject them to general service of process in any such
jurisdiction where they are not presently qualified or where they would be
subject to taxation as foreign corporations. The Sellers will advise the
Representatives promptly of the suspension of the qualification or registration
of (or any such exemption relating to) the Securities for offering, sale or
trading in any jurisdiction or any initiation or threat of any proceeding for
any such purpose, and in the event of the issuance of any order suspending such
qualification, registration or exemption, the Sellers shall use their best
efforts to obtain the withdrawal thereof at the earliest possible moment.
(g) DTC Eligibility. The Sellers shall use their best efforts to assist the
Representatives in arranging to cause the Securities to be eligible for
settlement through the facilities of DTC.
(h) Clearstream and Euroclear Eligibility. The Sellers shall, if requested by
the Representatives, use their best efforts to cause the Securities to be
eligible for settlement through the facilities of Clearstream, societe anonyme
("Clearstream"), and the Euroclear System ("Euroclear").
(i) Use of Proceeds. The Company shall apply the net proceeds from the sale
of the Securities sold by it and, if completed, the net proceeds of the Common
Shares Offering in the manner described under the caption "Use of Proceeds" in
the Prospectus.
(j) Earnings Statement. As soon as practicable, the Company will make
generally available to its security holders and to the Representatives an
earnings statement (which need not be audited) covering the twelve-month period
ending June 30, 2004 that satisfies the provisions of Section 11(a) of the
Securities Act.
(k) Periodic Reporting Obligations. During the Prospectus Delivery Period the
Company shall file, on a timely basis, with the Commission and the New York
Stock Exchange all reports and documents required to be filed under the Exchange
Act.
(l) Company to Provide Interim Financial Statements. Prior to the Closing
Date, the Company will furnish the Underwriters, as soon as they have been
prepared by or are available to the Company, a copy of any unaudited interim
financial statements of the Company for any period subsequent to the period
covered by the most recent financial statements appearing in the Registration
Statement and the Prospectus.
(m) Agreement Not to Offer or Sell Additional Securities. During the period
commencing on the date hereof and ending on the 180th day following the date of
the Prospectus, the Company will not,
16
without the prior written consent of BAS (which consent may be withheld at the
sole discretion of BAS), directly or indirectly, sell, offer, contract or grant
any option to sell, pledge, transfer or establish an open "put equivalent
position" within the meaning of Rule 16a-1(h) under the Exchange Act, or
otherwise dispose of or transfer, or announce the offering of, or file any
registration statement under the Securities Act in respect of, any debt
securities of the Company similar to the Securities or securities exchangeable
for or convertible into any debt securities of the Company similar to the
Securities (other than as contemplated by this Agreement); Notwithstanding the
foregoing, if (x) during the last 17 days of the 180-day restricted period the
Company issues an earnings release or material news or a material event relating
to the Company occurs; or (y) prior to the expiration of the 180-day restricted
period, the Company announces that it will release earnings results during the
16-day period beginning on the last day of the 180-day period; the restrictions
imposed in this clause (m) shall continue to apply until the expiration of the
18-day period beginning on the issuance of the earnings release or the
occurrence of the material news or material event; provided however, that this
sentence shall not apply if the research published or distributed on the Company
is compliant under Rule 139 of the Securities Act and the Company's securities
are actively traded as defined in Rule 101(c)(1) of Regulation M of the Exchange
Act.
(n) Future Reports to the Representatives. During the period of three years
hereafter the Company will furnish to the Representatives at 700 Louisiana, 8th
Floor, Houston, Texas 77002-2700, Attention: Scott Warrander: (i) as soon as
practicable after the end of each fiscal year, copies of the Annual Report of
the Company containing the balance sheet of the Company as of the close of such
fiscal year and statements of income, stockholders' equity and cash flows for
the year then ended and the opinion thereon of the Company's independent public
or certified public accountants; (ii) as soon as practicable after the filing
thereof, copies of each proxy statement, Annual Report on Form 10-K, Quarterly
Report on Form 10-Q, Current Report on Form 8-K or other report filed by the
Company with the Commission, the NASD or any securities exchange; and (iii) as
soon as available, copies of any report or communication of the Company mailed
generally to holders of its capital stock.
(o) Investment Limitation. The Sellers shall not invest, or otherwise use the
proceeds received by the Company from its sale of the Securities in such a
manner as would require the any of the Sellers to register as an investment
company under the Investment Company Act.
(p) No Manipulation of Price. Neither the Company nor any of its affiliates
will take, directly or indirectly, any action designed to or which constitutes
or which might reasonably be expected to cause or result in stabilization or
manipulation of the price of the Securities of the Company at any time prior to
the Representatives notifying the Company of the completion of the distribution
of the Securities.
(q) Existing Lock-Up Agreement. The Company will enforce all existing
agreements between the Company and any of its security holders that prohibit the
sale, transfer, assignment, pledge or hypothecation of any of the Company's
securities in connection with a public offering by the Company. In addition, the
Company will direct the transfer agent to place stop transfer restrictions upon
any such securities of the Company that are bound by such existing "lock-up"
agreements for the duration of the periods contemplated in such agreements.
(r) Compliance with Consents The Company will comply with the terms of the
Consents, including the conditions with respect to the use of the proceeds from
the sale of the Securities as contemplated herein and in the Prospectus.
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(s) Notice of Redemption for 9% Notes Promptly (but in any event within 2
business days) following the expiration or termination of the Tender Offer and
Consent Solicitation, the Company will give the 9% Notes Notice of Redemption
for the redemption of the 9% Notes in accordance with the terms and conditions
under the 1997 Indenture and in accordance with the terms contained in the
Consents.
SECTION 4. PAYMENT OF EXPENSES.
The Sellers jointly and severally agree to pay all costs, fees and
expenses incurred in connection with the performance of its obligations
hereunder and in connection with the transactions contemplated hereby, including
without limitation (i) all expenses incident to the issuance and delivery of the
Securities (including all printing and engraving costs), (ii) all necessary
issue, transfer and other stamp taxes in connection with the issuance and sale
of the Securities to the Underwriters, (iii) all fees and expenses of the
Sellers' respective counsel, independent public or certified public accountants
and other advisors, (iv) all costs and expenses incurred in connection with the
preparation, printing, filing, shipping and distribution of the Registration
Statement (including financial statements and exhibits), each preliminary
prospectus and the Prospectus, and all amendments and supplements thereto, this
Agreement, the Indenture, the DTC Letter of Representations, and the Notes and
the Guarantees of the Notes, (v) all filing fees, attorneys' fees and expenses
incurred by the Sellers or the Underwriters in connection with qualifying or
registering (or obtaining exemptions from the qualification or registration of)
all or any part of the Securities for offer and sale under the state securities
or Blue Sky laws, and, if requested by the Representatives, preparing and
printing a "Blue Sky Survey" or memorandum, and any supplements thereto,
advising the Underwriters of such qualifications, registrations and exemptions,
(vi) the fees and expenses of the Trustee, including the fees and disbursements
of counsel for Trustee in connection with the Indenture and the Securities,
(vii) any fees payable in connection with the rating of the Securities with the
rating agencies, (viii) any filing fees incident to, and any reasonable fees and
disbursements of counsel for the Underwriters in connection with, the NASD's
review and approval of the Underwriters' participation in the offering and
distribution of the Securities, (ix) all fees and expenses (including reasonable
fees and expenses of counsel) of the Sellers in connection with approval of the
Securities by the DTC for "book-entry" transfer, and the performance by the
Sellers of their respective other obligations under this Agreement, and (x) all
other fees, costs and expenses referred to in Item 14 of Part II of the
Registration Statement. Except as provided in clauses (xi) and (vii) of this
Section 4, Section 6, Section 8 and Section 9 hereof, the Underwriters shall pay
their own expenses, including the fees and disbursements of their counsel.
SECTION 5. CONDITIONS TO OBLIGATIONS OF THE UNDERWRITERS
The obligations of the several Underwriters to purchase and pay for the
Securities as provided herein on the Closing Date shall be subject to the
accuracy of the representations and warranties on the part of the Sellers set
forth in Section 1 hereof as of the date hereof and as of the Closing Date as
though then made to the timely performance by the Sellers of their respective
covenants and other obligations hereunder, and to each of the following
additional conditions:
(a) No Untrue Statements; Inadvisable to Proceed. The Representatives shall
not have disclosed to the Company on or prior to the Closing Date that the
Prospectus contains an untrue statement of a fact which, in the reasonable
opinion of the Representatives, is material or omits to state a fact which, in
the reasonable opinion of the Representatives, is material and is necessary in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading; the Company shall not have prepared and
distributed any amendment or supplement to the Prospectus either without prior
review by, or over the reasonable objection of, the Representatives; and no
18
change shall have occurred under the Securities Act which in the reasonable
judgment of the Representatives makes it impracticable or inadvisable to proceed
with the purchase, sale and delivery of the Securities on the terms and in the
manner contemplated in the Prospectus.
(b) Corporate Proceedings. All corporate proceedings and other legal matters
incident to the authorization, form and validity of this Agreement, the DTC
Letter of Representations, the Indenture, the Notes, Guarantees of the Notes,
the Prospectus and all other legal matters relating to this Agreement and the
transactions contemplated hereby and thereby (including the Tender Offer and
Consent Solicitation and/or the Back-End Redemption of the 9% Notes) shall be
reasonably satisfactory in all respects to the Representatives and their
counsel, and the each Seller shall have furnished to the Representatives all
documents and information that they may reasonably request to enable them to
pass upon such matters.
(c) Resolutions. Each Seller shall have delivered to the Representatives a
certified copy of the resolutions of the Board of Directors (or any authorized
committee thereof, together with the resolutions of the Board of Directors
establishing such committee) of each Seller approving the issuance of the Notes
and the Guarantees of the Notes, respectively, on the terms and conditions of
the Indenture and this Agreement and approving the terms hereof and authorizing
the execution and delivery of this Agreement, the DTC Letter of Representations,
the Indenture, the Notes and the Guarantees of the Notes, and all other
documents relevant to the issue of the Securities by such Seller (including the
Tender Offer and Consent Solicitation and/or the Back-End Redemption of the 9%
Notes).
(d) Accountant's Comfort Letter. The Company shall have furnished to the
Representatives on the date hereof a letter of Deloitte & Touche LLP,
independent public accountants for the Company, addressed to the Underwriters
and dated the date hereof, in form and substance reasonably satisfactory to the
Representatives, containing statements and information of the type ordinarily
included in accountant's "comfort letters" to initial purchasers, delivered
according to Statement of Auditing Standards Nos. 72 and 76 (or any successor
bulletins), with respect to the Company's audited financial statements and
unaudited pro forma financial statements and certain financial information
contained in the Registration Statement and the Prospectus (and the
Representatives shall have received an additional two conformed copies of such
accountants' letter for each of the several underwriters).
(e) Bring-Down Comfort Letters. The Company shall have furnished to the
Representatives on the Closing Date, a letter of Deloitte & Touche LLP,
independent public accountants for the Company, addressed to the Representatives
and dated as of the Closing Date, in form and substance reasonably satisfactory
to the Representatives, to the effect that they reaffirm the statements made in
the letter furnished by them pursuant to Section 5(d), except that the specified
date referred to therein for the carrying out of procedures shall be no more
than three business days prior to the Closing Date (and the Representatives
shall have received an additional two conformed copies of such accountants'
letter for each of the several underwriters).
(f) Compliance with Registration Requirements; No Stop Order; No Objection
from NASD. For the period from and after effectiveness of this Agreement and
prior to the Closing Date:
(i) the Company shall have filed the Prospectus with the Commission
(including the information required by Rule 430A under the Securities Act)
in the manner and within the time period required by Rule 424(b) under the
Securities Act; or the Company shall have filed a post-effective amendment
to the Registration Statement containing the information required by such
Rule 430A, and such post-effective amendment shall have become effective;
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or, if the Company elected to rely upon Rule 434 under the Securities Act
and obtained the Representatives' consent thereto, the Company shall have
filed a Term Sheet with the Commission in the manner and within the time
period required by such Rule 424(b);
(ii) no stop order suspending the effectiveness of the Registration
Statement or any post-effective amendment to the Registration Statement,
shall be in effect and no proceedings for such purpose shall have been
instituted or threatened by the Commission; and
(iii) the NASD shall have raised no objection to the fairness and
reasonableness of the underwriting terms and arrangements.
(g) No Material Adverse Change. For the period from and after the date of
this Agreement and prior to the Closing Date, in the reasonable judgment of the
Representatives, there shall not have occurred any Material Adverse Change.
(h) Opinion of Counsel for the Company. On the Closing Date, the
Representatives shall have received (i) the favorable opinion of Fennemore
Craig, P.C., United States counsel for the Company, addressed to the
Representatives and dated as of the Closing Date, the form of which is attached
as Exhibit A, (ii) the favorable opinion of McGuire Woods, LLP, special counsel
for the Company, addressed to the Representatives and dated as of the Closing
Date, the form of which is attached as Exhibit B, (iii) the favorable opinion of
Kim Bullerdick, Esq., the General Counsel of the Company, addressed to the
Representatives and dated as of the Closing Date, the form of which is attached
as Exhibit C, and (iv) the favorable opinion of Montgomery & Andrews, New Mexico
counsel to the Company and Ciniza Production Company, Giant Stop-N-Go of New
Mexico, Inc., San Juan Refining Company and Giant Pipeline Company
(collectively, the "New Mexico Subsidiary Guarantors"), addressed to the
Representatives and dated as of the Closing Date, the form of which is attached
as Exhibit D (and the Representatives shall have received an additional two
conformed copies of each such counsel's legal opinion for each of the several
Underwriters).
(i) Opinion of Counsel for the Underwriters. On the Closing Date, the
Representatives shall have received the favorable opinion of Shearman & Sterling
LLP, counsel for the Underwriters, dated as of the Closing Date, (and the
Representatives shall have received an additional two conformed copies of such
counsel's legal opinion for each of the several Underwriters) with respect to
such matters as the Representatives may reasonably request.
(j) Officers' Certificate. On the Closing Date the Representatives shall have
received a written certificate from each Seller executed by the President or a
Vice President and the principal financial or accounting officer of the Company,
dated as of the Closing Date, to the effect set forth in subsection (f)(ii) of
this Section 5, and further to the effect that:
(i) for the period from and after the date of this Agreement and
prior to the Closing Date, there has not occurred any Material Adverse
Change;
(ii) the representations, warranties and covenants of the Sellers
set forth in Section 1 of this Agreement are true and correct with the
same force and effect as though expressly made on and as of the Closing
Date;
(iii) the Sellers have has complied with all the agreements and
satisfied all the conditions on their part to be performed or satisfied at
or prior to the Closing Date; and
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(iv) there shall not have occurred any downgrading, nor shall any
notice have been given of any intended or potential downgrading or of any
review for a possible change that does not indicate the direction of the
possible change, in the rating accorded any securities of the Company or
any of its subsidiaries by any "nationally recognized statistical rating
organization" as such term is defined for purposes of Rule 436 under the
Securities Act.
(k) Officer's Certificate Related to Financial Covenants. The Company shall
have furnished to the Representatives on the Closing Date a certificate, dated
the Closing Date, of the principal financial or accounting officer of the
Company stating that the Total Leverage Ratio, the Senior Leverage Ratio, the
Minimum Consolidated Net Worth and the Minimum Fixed Charge Coverage Ratio (each
as defined in the Revolving Credit Facility), based on the pro forma financial
statements of the Company giving effect to the offering of the Securities and
the Related Transactions prepared in accordance with the requirements of
Regulation S-X under the Securities Act and all other accounting rules and
regulations of the Commission promulgated thereunder, was not greater than the
respective ratios set forth in the Revolving Credit Facility.
(l) Other Certificates. The Sellers shall have furnished to the
Representatives such further certificates and documents, including certificates
of officers of the Subsidiary Guarantors, as the Representatives shall have
reasonably requested.
(m) Additional Documents. On or before the Closing Date, the Representatives
and counsel for the Underwriters shall have received such information, documents
and opinions as they may reasonably require for the purposes of enabling them to
pass upon the issuance and sale of the Securities as contemplated herein, or in
order to evidence the accuracy of any of the representations and warranties, or
the satisfaction of any of the conditions or agreements, herein contained.
(n) DTC Acceptance. The Securities shall have been accepted for (i)
settlement through the facilities of DTC, and (ii) if applicable, settlement
throughout the facilities of Clearstream and Euroclear.
(o) Supplemental Indenture. The Supplemental Indenture shall have been
executed and delivered by the parties thereto on or prior to the Closing Date.
(p) Required Consents. The Consents referred to in Section 1(s) above shall
remain in effect as of the Closing Date. There shall exist at and as of the
Closing Date no condition that would constitute a Default under the Revolving
Credit Facility or the Term Loan Agreement.
(q) Deposit in redemption trust account. The Company shall deposit the net
proceeds from the sale of the Securities sold by it into a trust account or
otherwise apply such net proceeds on the Closing Date as required by the
Consents.
All opinions (other than the opinion set forth in Section 5(i) above),
letters, evidences and certificates mentioned above or elsewhere in this
Agreement shall be deemed to be in compliance with the provisions hereof only if
they are in form and substance reasonably satisfactory to Shearman & Sterling
LLP, counsel to the Underwriters.
If any condition specified in this Section 5 is not satisfied when and as
required to be satisfied, this Agreement may be terminated by the
Representatives by notice to the Company at any time on or prior to the Closing
Date, which termination shall be without liability on the part of any party to
any other party, except that Section 4, Section 6, Section 8 and Section 9 shall
at all times be effective and shall survive such termination.
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SECTION 6. REIMBURSEMENT OF UNDERWRITERS' EXPENSES
If this Agreement is terminated by the Representatives pursuant to
Section 5, Section 7, Section 10 or Section 11, or if the sale to the
Underwriters of the Securities on the Closing Date is not consummated because of
any refusal, inability or failure on the part of the Company to perform any
agreement herein or to comply with any provision hereof, the Company agrees to
reimburse the Representatives and the other Underwriters (or such Underwriters
as have terminated this Agreement with respect to themselves), severally, upon
demand for all out-of-pocket expenses that shall have been reasonably incurred
by the Representatives and the other Underwriters in connection with the
proposed purchase and the offering and sale of the Securities, including but not
limited to fees and disbursements of counsel, printing expenses, travel
expenses, postage, facsimile and telephone charges.
SECTION 7. EFFECTIVENESS OF THIS AGREEMENT.
This Agreement shall not become effective until the execution of
this Agreement by the parties hereto and (ii) notification by the Commission to
the Company and the Representative of the effectiveness of the Registration
Statement under the Securities Act.
Prior to such effectiveness, this Agreement may be terminated by any
party by notice to each of the other parties hereto, and any such termination
shall be without liability on the part of (a) the Company to any Underwriter,
except that the Company shall be obligated to reimburse the expenses of the
Representative and the Underwriters pursuant to Sections 4 and 6 hereof, (b) of
any Underwriter to the Company, or (c) of any party hereto to any other party
except that the provisions of Section 8 and Section 9 shall at all times be
effective and shall survive such termination.
SECTION 8. INDEMNIFICATION.
Indemnification of the Underwriters by the Company. The Sellers
jointly and severally agree to indemnify and hold harmless each Underwriter, its
directors, officers and employees, and each person, if any, who controls any
Underwriter within the meaning of the Securities Act and the Exchange Act
against any loss, claim, damage, liability or expense, as incurred, to which
such Underwriter or such controlling person may become subject, under the
Securities Act, the Exchange Act or other federal or state statutory law or
regulation, or at common law or otherwise (including in settlement of any
litigation, if such settlement is effected with the written consent any Seller),
insofar as such loss, claim, damage, liability or expense (or actions in respect
thereof as contemplated below) arises out of or is based (i) upon any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement, or any amendment thereto, including any information
deemed to be a part thereof pursuant to Rule 430A or Rule 434 under the
Securities Act, or the omission or alleged omission therefrom of a material fact
required to be stated therein or necessary to make the statements therein not
misleading; or (ii) upon any untrue statement or alleged untrue statement of a
material fact contained in any preliminary prospectus or the Prospectus (or any
amendment or supplement thereto) or the omission or alleged omission therefrom
of a material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading; or (iii)
in whole or in part upon any inaccuracy in the representations and warranties of
the Sellers contained herein; or (iv) in whole or in part upon any failure of
any Seller to perform its obligations hereunder or under law; and to reimburse
each Underwriter and each such controlling person for any and all expenses
(including the fees and disbursements of counsel chosen by BAS) as such expenses
are reasonably incurred by such Underwriter or such controlling person in
connection with investigating, defending, settling, compromising or paying any
such loss, claim, damage, liability, expense or action; provided,
22
however, that the foregoing indemnity agreement shall not apply to any loss,
claim, damage, liability or expense to the extent, but only to the extent,
arising out of or based upon any untrue statement or alleged untrue statement
or omission or alleged omission made in reliance upon and in conformity with
written information furnished to the Company by the Representatives expressly
for use in the Registration Statement, any preliminary prospectus or the
Prospectus (or any amendment or supplement thereto). The indemnity agreement
set forth in this Section 8(a) shall be in addition to any liabilities that
the Company may otherwise have.
(a) Indemnification of the Company, its Directors and Officers. Each
Underwriter agrees, severally and not jointly, to indemnify and hold harmless
each Seller, each of its directors, each of its officers who signed the
Registration Statement and each person, if any, who controls such Seller
within the meaning of the Securities Act or the Exchange Act, against any
loss, claim, damage, liability or expense, as incurred, to which such Seller,
or any such director, officer or controlling person may become subject, under
the Securities Act, the Exchange Act, or other federal or state statutory law
or regulation, or at common law or otherwise (including in settlement of any
litigation, if such settlement is effected with the written consent of such
Underwriter), insofar as such loss, claim, damage, liability or expense (or
actions in respect thereof as contemplated below) arises out of or is based
upon any untrue or alleged untrue statement of a material fact contained in
the Registration Statement, any preliminary prospectus or the Prospectus (or
any amendment or supplement thereto), or arises out of or is based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, in
each case to the extent, but only to the extent, that such untrue statement
or alleged untrue statement or omission or alleged omission was made in the
Registration Statement, any preliminary prospectus, the Prospectus (or any
amendment or supplement thereto), in reliance upon and in conformity with
written information furnished to the Company by the Representatives expressly
for use therein; and to reimburse such Seller, or any such director, officer
or controlling person for any legal and other expense reasonably incurred by
such Seller, or any such director, officer or controlling person in
connection with investigating, defending, settling, compromising or paying
any such loss, claim, damage, liability, expense or action. Each Seller
hereby acknowledges that the only information that the Underwriters have
furnished to the Company expressly for use in the Registration Statement, any
preliminary prospectus or the Prospectus (or any amendment or supplement
thereto) are the statements set forth in the table in the first paragraph and
as the third and seventh paragraphs under the caption "Underwriting" in the
final prospectus supplement; and the Underwriters confirm that such
statements are correct. The indemnity agreement set forth in this Section
8(b) shall be in addition to any liabilities that each Underwriter may
otherwise have.
(b) Notifications and Other Indemnification Procedures. Promptly after
receipt by an indemnified party under this Section 8 of notice of the
commencement of any action, such indemnified party will, if a claim in
respect thereof is to be made against an indemnifying party under this
Section 8, notify the indemnifying party in writing of the commencement
thereof, but the omission so to notify the indemnifying party will not
relieve it from any liability which it may have to any indemnified party for
contribution or otherwise than under the indemnity agreement contained in
this Section 8 or to the extent it is not prejudiced as a proximate result of
such failure. In case any such action is brought against any indemnified
party and such indemnified party seeks or intends to seek indemnity from an
indemnifying party, the indemnifying party will be entitled to participate
in, and, to the extent that it shall elect, jointly with all other
indemnifying parties similarly notified, by written notice delivered to the
indemnified party promptly after receiving the aforesaid notice from such
indemnified party, to assume the defense thereof with counsel reasonably
satisfactory to such indemnified party; provided, however, if the defendants
in any such action include both the indemnified party and the indemnifying
party and the
23
indemnified party shall have reasonably concluded that a conflict may arise
between the positions of the indemnifying party and the indemnified party in
conducting the defense of any such action or that there may be legal defenses
available to it and/or other indemnified parties which are different from or
additional to those available to the indemnifying party, the indemnified
party or parties shall have the right to select separate counsel to assume
such legal defenses and to otherwise participate in the defense of such
action on behalf of such indemnified party or parties. Upon receipt of notice
from the indemnifying party to such indemnified party of such indemnifying
party's election so to assume the defense of such action and approval by the
indemnified party of counsel, the indemnifying party will not be liable to
such indemnified party under this Section 8 for any legal or other expenses
subsequently incurred by such indemnified party in connection with the
defense thereof unless (i) the indemnified party shall have employed separate
counsel in accordance with the proviso to the next preceding sentence (it
being understood, however, that the indemnifying party shall not be liable
for the expenses of more than one separate counsel (together with local
counsel), approved by the indemnifying party (BAS in the case of Section 8(b)
and Section 9), representing the indemnified parties who are parties to such
action) or (ii) the indemnifying party shall not have employed counsel
satisfactory to the indemnified party to represent the indemnified party
within a reasonable time after notice of commencement of the action, in each
of which cases the fees and expenses of counsel shall be at the expense of
the indemnifying party.
(c) Settlements. The indemnifying party under this Section 8 shall not be
liable for any settlement of any proceeding effected without its written
consent, but if settled with such consent or if there be a final judgment for
the plaintiff, the indemnifying party agrees to indemnify the indemnified
party against any loss, claim, damage, liability or expense by reason of such
settlement or judgment. Notwithstanding the foregoing sentence, if at any
time an indemnified party shall have requested an indemnifying party to
reimburse the indemnified party for fees and expenses of counsel as
contemplated by Section 8(c) hereof, the indemnifying party agrees that it
shall be liable for any settlement of any proceeding effected without its
written consent if (i) such settlement is entered into more than 30 days
after receipt by such indemnifying party of the aforesaid request and (ii)
such indemnifying party shall not have reimbursed the indemnified party in
accordance with such request prior to the date of such settlement. No
indemnifying party shall, without the prior written consent of the
indemnified party, effect any settlement, compromise or consent to the entry
of judgment in any pending or threatened action, suit or proceeding in
respect of which any indemnified party is or could have been a party and
indemnity was or could have been sought hereunder by such indemnified party,
unless such settlement, compromise or consent includes an unconditional
release of such indemnified party from all liability on claims that are the
subject matter of such action, suit or proceeding.
SECTION 9. CONTRIBUTION.
If the indemnification provided for in Section 8 is for any reason
held to be unavailable to or otherwise insufficient to hold harmless an
indemnified party in respect of any losses, claims, damages, liabilities or
expenses referred to therein, then each indemnifying party shall contribute
to the aggregate amount paid or payable by such indemnified party, as
incurred, as a result of any losses, claims, damages, liabilities or expenses
referred to therein (i) in such proportion as is appropriate to reflect the
relative benefits received by the Sellers, on the one hand, and the
Underwriters, on the other hand, from the offering of the Securities pursuant
to this Agreement or (ii) if the allocation provided by clause (i) above is
not permitted by applicable law, in such proportion as is appropriate to
reflect not only the relative benefits referred to in clause (i) above but
also the relative fault of the Sellers, on the one hand, and the
Underwriters, on the other hand, in connection with the statements or
omissions or inaccuracies in the representations and warranties herein which
resulted in such losses, claims, damages, liabilities or expenses, as well as
any other relevant equitable considerations. The relative benefits received
by the Sellers, on the one hand, and the Underwriters, on the other hand, in
connection with the offering of the Notes pursuant to this
24
Agreement shall be deemed to be in the same respective proportions as the
total net proceeds from the offering of the Notes pursuant to this Agreement
(before deducting expenses) received by the Sellers, and the total
underwriting discount received by the Underwriters, in each case as set forth
on the front cover page of the Prospectus bear to the aggregate initial
public offering price of the Securities as set forth on such cover. The
relative fault of the Sellers, on the one hand, and the Underwriters, on the
other hand, shall be determined by reference to, among other things, whether
any such untrue or alleged untrue statement of a material fact or omission or
alleged omission to state a material fact or any such inaccurate or alleged
inaccurate representation or warranty relates to information supplied by the
Sellers, on the one hand, or the Underwriters, on the other hand, and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission.
The amount paid or payable by a party as a result of the losses,
claims, damages, liabilities and expenses referred to above shall be deemed
to include, subject to the limitations set forth in Section 8(c), any legal
or other fees or expenses reasonably incurred by such party in connection
with investigating or defending any action or claim. The provisions set forth
in Section 8(c) with respect to notice of commencement of any action shall
apply if a claim for contribution is to be made under this Section 9;
provided, however, that no additional notice shall be required with respect
to any action for which notice has been given under Section 8(c) for purposes
of indemnification.
The Sellers and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section 9 were determined by pro
rata allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of
the equitable considerations referred to in this Section 9.
Notwithstanding the provisions of this Section 9, no Underwriter
shall be required to contribute any amount in excess of the underwriting
commissions received by such Underwriter in connection with the Securities
underwritten by it and distributed to the public. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The Underwriters' obligations to
contribute pursuant to this Section 9 are several, and not joint, in
proportion to their respective underwriting commitments as set forth opposite
their names in Schedule A. For purposes of this Section 9, each officer and
employee of an Underwriter and each person, if any, who controls an
Underwriter within the meaning of the Securities Act and the Exchange Act
shall have the same rights to contribution as such Underwriter, and each
director of a Seller, each officer of a Seller who signed the Registration
Statement, and each person, if any, who controls a Seller with the meaning of
the Securities Act and the Exchange Act shall have the same rights to
contribution as such Seller.
SECTION 10. DEFAULT OF ONE OR MORE OF THE SEVERAL UNDERWRITERS.
If, on the Closing Date any one or more of the several Underwriters
shall fail or refuse to purchase Securities that it or they have agreed to
purchase hereunder on such date, and the aggregate number of Securities which
such defaulting Underwriter or Underwriters agreed but failed or refused to
purchase does not exceed 10% of the aggregate number of the Securities to be
purchased on such date, the other Underwriters shall be obligated, severally,
in the proportions that the number of Securities set forth opposite their
respective names on Schedule A bears to the aggregate number of Securities
set forth opposite the names of all such non-defaulting Underwriters, or in
such other proportions as may be specified by the Representatives with the
consent of the non-defaulting Underwriters, to purchase the Securities which
such defaulting Underwriter or Underwriters agreed but failed or refused to
purchase on such date. If, on the Closing Date any one or more of the
25
Underwriters shall fail or refuse to purchase Securities and the aggregate
number of Securities with respect to which such default occurs exceeds 10% of
the aggregate number of Securities to be purchased on such date, and
arrangements satisfactory to the Representatives and the Sellers for the
purchase of such Securities are not made within 48 hours after such default,
this Agreement shall terminate without liability of any party to any other
party except that the provisions of Section 4, Section 6, Section 8, Section
9 and the last sentence of this Section 10 shall at all times be effective
and shall survive such termination. In any such case either the
Representatives or the Sellers shall have the right to postpone the Closing
Date, but in no event for longer than seven days in order that the required
changes, if any, to the Registration Statement and the Prospectus or any
other documents or arrangements may be effected.
As used in this Agreement, the term "Underwriter" shall be deemed to
include any person substituted for a defaulting Underwriter under this
Section 10. Any action taken under this Section 10 shall not relieve any
defaulting Underwriter from liability in respect of any default of such
Underwriter under this Agreement.
SECTION 11. TERMINATION OF THIS AGREEMENT.
Prior to the Closing Date, this Agreement may be terminated by the
Representatives by notice given to the Company if at any time (i) trading or
quotation in any of the Company's securities shall have been suspended or
limited by the Commission or by the New York Stock Exchange, or trading in
securities generally on either the Nasdaq Stock Market or the New York Stock
Exchange shall have been suspended or limited, or minimum or maximum prices
shall have been generally established on any of such stock exchanges by the
Commission or the NASD; (ii) a general banking moratorium shall have been
declared by any of federal, New York or Delaware authorities; (iii) there
shall have occurred any outbreak or escalation of national or international
hostilities or any crisis or calamity, or any change in the United States or
international financial markets, or any substantial change or development
involving a prospective substantial change in United States or international
political, financial or economic conditions, as in the judgment of the
Representatives is material and adverse and makes it impracticable to market
the Securities in the manner and on the terms described in the Prospectus or
to enforce contracts for the sale of securities; (iv) in the judgment of the
Representatives there shall have occurred any Material Adverse Change; (v)
the Company or any of its subsidiaries shall have sustained a loss by strike,
fire, flood, earthquake, accident or other calamity of such character as in
the judgment of the Representatives may interfere materially with the conduct
of the business and operations of the Company and its subsidiaries regardless
of whether or not such loss shall have been insured; or (vi) there shall have
occurred a material disruption in commercial banking or securities settlement
or clearance services in the United States. Any termination pursuant to this
Section 11 shall be without liability on the part of (a) any Seller to any
Underwriter, except that the Sellers shall be obligated to reimburse the
expenses of the Representatives and the Underwriters pursuant to Sections 4
and 6 hereof, (b) any Underwriter to any Seller, or (c) of any party hereto
to any other party except that the provisions of Section 8 and Section 9
shall at all times be effective and shall survive such termination.
SECTION 12. REPRESENTATIONS AND INDEMNITIES TO SURVIVE DELIVERY.
The respective indemnities, agreements, representations, warranties
and other statements of the Sellers, of its officers, and of the several
Underwriters set forth in or made pursuant to this Agreement will remain in
full force and effect, regardless of any investigation made by or on behalf
of any Underwriter or any Seller or any of its or their partners, officers or
directors or any controlling person, as the case may be, and will survive
delivery of and payment for the Securities sold hereunder.
26
SECTION 13. NOTICES.
All communications hereunder shall be in writing and shall be
mailed, hand delivered or telecopied and confirmed to the parties hereto as
follows:
If to the Representatives:
Banc of America Securities LLC
9 West 57th Street
New York, New York 10019
Facsimile: (212) 583-8567
Attention: Legal Department
with a copy to:
Shearman & Sterling LLP
599 Lexington Avenue
New York, New York 10022
Facsimile: (212) 848-7179
Attention: Andrew R. Schleider
If to the Company or any Subsidiary Guarantor:
Giant Industries, Inc.
23733 North Scottsdale Road
Scottsdale, Arizona 95255
Facsimile: (480) 585-8985
Attention: General Counsel
with a copy to:
Fennemore Craig, P.C.
3003 North Central, Suite 2600
Phoenix, Arizona 85012-2913
Facsimile: (602) 916-5507
Attention: Karen C. McConnell
Any party hereto may change the address for receipt of communications by
giving written notice to the others.
SECTION 14. SUCCESSORS.
This Agreement will inure to the benefit of and be binding upon the
parties hereto, including any substitute Underwriters pursuant to Section 10
hereof, and to the benefit of the employees, officers and directors and
controlling persons referred to in Section 8 and Section 9, and in each case
their respective successors, and personal representatives, and no other
person will have any right or obligation hereunder. The term "successors"
shall not include any purchaser of the Securities as such from any of the
Underwriters merely by reason of such purchase.
SECTION 15. PARTIAL UNENFORCEABILITY.
The invalidity or unenforceability of any Section, paragraph or
provision of this Agreement shall not affect the validity or enforceability
of any other Section, paragraph or provision hereof. If any Section,
paragraph or provision of this Agreement is for any reason determined to be
27
invalid or unenforceable, there shall be deemed to be made such minor changes
(and only such minor changes) as are necessary to make it valid and
enforceable.
SECTION 16. GOVERNING LAW PROVISIONS.
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK.
SECTION 17. GENERAL PROVISIONS.
No indemnified party shall be entitled to any consequential, special
or punitive damages by virtue of Section 8 or 9 of this Agreement except to
the extent that such indemnified party is obligated to pay such types of
damages to a third party in respect of a claim for which such indemnified
party is entitled to indemnification or contribution. This Agreement
constitutes the entire agreement of the parties to this Agreement and
supersedes all prior written or oral and all contemporaneous oral agreements,
understandings and negotiations with respect to the subject matter hereof.
This Agreement may be executed in two or more counterparts, each one of which
shall be an original, with the same effect as if the signatures thereto and
hereto were upon the same instrument. This Agreement may not be amended or
modified unless in writing by all of the parties hereto, and no condition
herein (express or implied) may be waived unless waived in writing by each
party whom the condition is meant to benefit. The Table of Contents and the
Section headings herein are for the convenience of the parties only and shall
not affect the construction or interpretation of this Agreement.
Each of the parties hereto acknowledges that it is a sophisticated
business person who was adequately represented by counsel during negotiations
regarding the provisions hereof, including, without limitation, the
indemnification provisions of Section 8 and the contribution provisions of
Section 9, and is fully informed regarding said provisions. Each of the
parties hereto further acknowledges that the provisions of Sections 8 and 9
hereto fairly allocate the risks in light of the ability of the parties to
investigate the Company or any Subsidiary Guarantor, its affairs and its
business in order to assure that adequate disclosure has been made in the
Registration Statement, any preliminary prospectus and the Prospectus (and
any amendments and supplements thereto), as required by the Securities Act
and the Exchange Act.
28
If the foregoing is in accordance with your understanding of our
agreement, kindly sign and return to the Company the enclosed copies hereof,
whereupon this instrument, along with all counterparts hereof, shall become a
binding agreement in accordance with its terms.
Very truly yours,
THE COMPANY:
GIANT INDUSTRIES, INC.
a Delaware corporation
By:______________________________
Name:
Title:
THE SUBSIDIARY GUARANTORS:
GIANT INDUSTRIES ARIZONA, INC.,
an Arizona corporation
By:______________________________
Name:
Title:
CINIZA PRODUCTION COMPANY,
a New Mexico corporation
By:______________________________
Name:
Title:
GIANT STOP-N-GO OF NEW MEXICO, INC.,
a New Mexico corporation
By:______________________________
Name:
Title:
GIANT FOUR CORNERS, INC.,
an Arizona corporation
By:______________________________
Name:
Title:
PHOENIX FUEL CO., INC.,
an Arizona corporation
29
By:______________________________
Name:
Title:
SAN JUAN REFINING COMPANY,
a New Mexico corporation
By:______________________________
Name:
Title:
GIANT MID-CONTINENT, INC.,
an Arizona corporation
By:______________________________
Name:
Title:
GIANT PIPELINE COMPANY,
a New Mexico corporation
By:______________________________
Name:
Title:
GIANT YORKTOWN, INC.,
a Delaware corporation
By:______________________________
Name:
Title:
GIANT YORKTOWN HOLDING COMPANY,
a Delaware corporation
By:______________________________
Name:
Title:
30
The foregoing Underwriting Agreement is hereby confirmed and
accepted by the Representatives in New York, New York as of the date first
above written.
BANC OF AMERICA SECURITIES LLC
BNP PARIBAS SECURITIES CORP.
As Representatives of the several Underwriters
named in the attached Schedule A
By: BANC OF AMERICA SECURITIES LLC
By:______________________________
Name:
Title:
SCHEDULE A
AGGREGATE
PRINCIPAL
UNDERWRITERS AMOUNT OF NOTES
TO BE PURCHASED
Banc of America Securities LLC........ $[ ]
BNP Paribas Securities Corp...........
[ ]
-------------
Total.................................. $ 150,000,000
=============
SCHEDULE B
SUBSIDIARY GUARANTORS
Giant Industries Arizona, Inc.
Giant Four Corners, Inc.
Giant Mid-Continent, Inc.
Phoenix Fuel Co., Inc.
Ciniza Production Company
Giant Stop-N-Go of New Mexico, Inc.
San Juan Refining Company
Giant Pipeline Company
Giant Yorktown, Inc.
Giant Yorktown Holding Company
EXHIBIT A
Opinion of Fennemore Craig, P.C., United States counsel for the
Company to be delivered pursuant to Section 5(h) of the Underwriting
Agreement.
References to the Prospectus in this Exhibit A include any
supplements thereto at the Closing Date.
(i) The Company has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the State of Delaware.
(ii) The Securities and the Indenture conform in all material
respects to the respective statements relating thereto contained in the
Prospectus and the forms of the certificates used to evidence the
Securities comply with the requirements of the Securities Act, the
Exchange Act and the Trust Indenture Act
(iii) No consent, approval, authorization or other order of, or
registration or filing with, any court or other governmental authority or
agency, is required for the Company's execution, delivery and performance
of the Underwriting Agreement, the DTC Letter of Representations or the
Indenture, or the issuance and delivery of the Securities, or and
consummation of the transactions contemplated thereby and by the
Prospectus, except as required under the Securities Act, applicable state
securities or Blue Sky laws, or the rules of the NASD.
(iv) Each of the Underwriting Agreement and the Indenture has been
duly authorized, executed and delivered by each Seller.
(v) The DTC Letter of Representations has been duly authorized,
executed and delivered by the Company.
(vi) The Notes are in the form contemplated by the Indenture and
have been duly authorized by all necessary corporate action on the part of
the Company and have been duly executed by the proper officers of the
Company.
(vii) The Guarantees of the Notes are in the forms contemplated by
the Indenture and have been duly authorized by all necessary corporate
action on the part of each of the Subsidiary Guarantors and the Guarantees
of the Notes have been duly executed by the proper officers of each of the
Subsidiary Guarantors and duly delivered as contemplated by this Agreement
and by the Indenture.
(viii) The Notes to be purchased by the Underwriters from the
Company have been duly authorized for issuance and sale pursuant to the
Underwriting Agreement and, when issued and delivered by the Company
pursuant to the Underwriting Agreement against payment of the
consideration set forth therein, will be validly issued, fully paid and
nonassessable.
(ix) The Registration Statement has been declared effective by the
Commission under the Securities Act. To the knowledge of such counsel, no
stop order suspending the effectiveness of the Registration Statement has
been issued under the Securities Act and no proceedings for such purpose
have been instituted or are pending by the Commission. Any required filing
of the Prospectus and any supplement thereto pursuant to Rule 424(b) under
A-1
the Securities Act has been made in the manner and within the time period
required by such Rule 424(b).
(x) The Registration Statement, the Prospectus including any
document incorporated by reference therein, and each amendment or
supplement to the Prospectus including any document incorporated by
reference therein (other than the financial statements and supporting
schedules included or incorporated by reference therein or in exhibits to
or excluded from the Registration Statement, as to which no opinion need
be rendered), as of the issue date thereof in the case of the Prospectus
or any supplement thereto or the filing date thereof in the case of the
Registration Statement or any document incorporated by reference therein
or in the Prospectus or any supplement thereto, comply as to form in all
material respects with the applicable requirements of the Securities Act
and the Exchange Act.
(xi) No consent, approval, authorization or other order of, or
registration or filing with, any court or other governmental authority or
agency, is required for the Company's execution, delivery and performance
of the Underwriting Agreement and consummation of the transactions
contemplated thereby and by the Prospectus, except as required under the
Securities Act, applicable state securities or Blue Sky laws, or the rules
of the NASD.
(xii) The execution and delivery of the Underwriting Agreement by
the Company and the performance by the Company of its obligations
thereunder (other than performance by the Company of its obligations under
the indemnification section of the Underwriting Agreement, as to which no
opinion need be rendered) the Tender Offer and Consent Solicitation and/or
the Back-End Redemption of the 9% Notes and the Related Transactions (a)
have been duly authorized by all necessary corporate action on the part of
the Company; (b) will not result in any violation of the provisions of the
charter or by-laws of the Company; (c) will not constitute a breach of, or
Default or a Debt Repayment Triggering Event under, or result in the
creation or imposition of any lien, charge or encumbrance upon any
property or assets of the Company or any of its subsidiaries pursuant to
the 2002 Indenture, the 1997 Indenture, the Revolving Credit Facility, the
Term Loan Agreement or any document filed as an exhibit to the
Registration Statement or a filing specifically listed as being
incorporated into the Prospectus or (d) to the knowledge of such counsel,
will not result in any violation of any law, administrative regulation or
administrative or court decree applicable to the Company.
(xiii) The Company is not and will not as a result of the offer and
sale of the Securities be (i) an "investment company" or a company
"controlled" by an investment company within the meaning of the United
States Investment Company Act of 1940, as amended, (ii) a "holding
company" or a "subsidiary company" of a holding company or an "affiliate"
thereof within the meaning of the United States Public Utility Holding
Company Act of 1935, as amended, or (iii) subject to regulation under the
United States Federal Power Act or any federal or state statute or
regulation limiting its ability to incur indebtedness for borrowed money.
In addition, such counsel shall state that they have participated
in conferences with officers and other representatives of the Company,
representatives of the independent public or certified public accountants for
the Company and with representatives of the Underwriters at which the
contents of the Registration Statement and the Prospectus, and any
supplements or amendments thereto, and related matters were discussed and,
although such counsel is not passing upon the
A-2
accuracy, completeness of the statements contained in the Registration
Statement or the Prospectus (other than as specified in paragraph (ii)
above), and any supplements or amendments thereto, on the basis of the
foregoing, nothing has come to their attention which gives them reason to
believe that either the Registration Statement or any amendments thereto, at
the time the Registration Statement or such amendments became effective or as
the date of the Underwriting Agreement, contained an untrue statement of a
material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein not misleading or that
the Prospectus or any amendment or supplement thereto, as of its date, at the
date of any such amendment or supplement or at the Closing Date, contained an
untrue statement of a material fact or omitted to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading (it being understood
that such counsel need express no belief as to the financial statements and
financial data included or incorporated by reference in the Registration
Statement or the Prospectus or any amendments or supplements thereto).
The aforementioned opinion shall be limited to the federal laws
of the United States of America, the laws of the State of Arizona and the
general corporate law of the State of Delaware. Such counsel may state that
insofar as the aforementioned opinion is indicated to be based on the best of
such counsel's knowledge, such opinion is based upon such counsel's actual
knowledge, which the attorneys in such counsel's firm have obtained in
connection with the representation of the Sellers. Such counsel may rely, to
the extent they deem proper and specified in such opinion, on opinions (which
shall be dated the Closing Date and shall be satisfactory in form and
substance to the Underwriters, shall expressly state that the Underwriters
may rely on such opinion as if it were addressed to them and shall be
furnished to the Representatives) of local counsel reasonably satisfactory to
the Underwriters with respect to matters of law of jurisdictions other than
the federal laws of the United States of America, the laws of the State of
Arizona and the general corporate law of the State of Delaware; provided,
however, that such counsel shall further state that they believe that they
and the Underwriters are justified in relying upon such opinion of other
counsel, and as to matters of fact, to the extent they deem proper, on
certificates of responsible officers of the Company and public officials.
A-3
EXHIBIT B
Opinion of McGuire Woods, LLP, special counsel for the Company to
be delivered pursuant to the Section 5(h) of the Underwriting Agreement.
(i) The Indenture constitutes the legal, valid and binding agreement
of each Seller, enforceable against each Seller in accordance with its
terms, except to the extent that the enforceability thereof may be limited
by (A) bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium, fraudulent transfer or other laws relating to creditors'
rights generally and (B) general principles of equity (regardless of
whether such enforcement is considered in a proceeding in equity or at
law) and an implied covenant of good faith and fair dealing.
(ii) The DTC Letter of Representations constitutes the legal, valid
and binding agreement of the Company, enforceable against the Company in
accordance with its terms, except to the extent that the enforceability
thereof may be limited by (A) bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium, fraudulent transfer or other laws
relating to creditors' rights generally and (B) general principles of
equity (regardless of whether such enforcement is considered in a
proceeding in equity or at law) and an implied covenant of good faith and
fair dealing.
(iii) The Notes are in the form contemplated by the Indenture and,
assuming the Notes have been duly authenticated by the Trustee and
delivered as contemplated by this Agreement and by the Indenture, and
delivered in the manner provided for in this Agreement against payment of
the consideration therefor specified in the Prospectus, constitute valid
and binding obligations of the Company, enforceable against the Company in
accordance with their terms, and entitled to the benefits of the
Indenture, except to the extent that the enforceability thereof may be
limited by (A) bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium, fraudulent transfer or other laws relating to
creditors' rights generally and (B) general principles of equity
(regardless of whether such enforcement is considered in a proceeding in
equity or at law) and an implied covenant of good faith and fair dealing.
(iv) The Guarantees of the Notes are in the forms contemplated by
the Indenture. The Guarantees of the Notes constitute valid and legally
binding obligations of the Subsidiary Guarantors, enforceable in
accordance with their terms, and will be entitled to the benefits of the
Indenture, except to the extent that the enforceability thereof may be
limited by (A) bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium, fraudulent transfer or other laws relating to
creditors' rights generally and (B) general principles of equity
(regardless of whether such enforcement is considered in a proceeding in
equity or at law) and an implied covenant of good faith and fair dealing.
The aforementioned opinion shall be limited to the federal laws of
the United States of America, the laws of the State of New York and the general
corporate law of the State of Delaware. Such counsel may state that insofar as
the aforementioned opinion is indicated to be based on the best of such
counsel's knowledge, such opinion is based upon such counsel's actual knowledge,
which the attorneys in such counsel's firm have obtained in connection with the
representation of the Sellers. Such counsel may rely, to the extent they deem
proper and specified in such opinion, on opinions (which shall be dated the
Closing Date and shall be satisfactory in form and substance to the
Underwriters, shall expressly state that the Underwriters may rely on such
opinion as if it were addressed to them and shall be furnished to the
Representatives) of local counsel reasonably satisfactory to the Underwriters
with respect to matters of
B-1
law of jurisdictions other than the federal laws of the United States of
America, the laws of the State of New York and the general corporate law of the
State of Delaware; provided, however, that such counsel shall further state that
they believe that they and the Underwriters are justified in relying upon such
opinion of other counsel, and as to matters of fact, to the extent they deem
proper, on certificates of responsible officers of the Company and public
officials.
B-2
EXHIBIT C
Opinion of Kim Bullerdick, Esq., General Counsel of the
Company to be delivered pursuant to Section 5(h) of the Underwriting
Agreement.
(i) The Company has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the State of Delaware;
has the corporate power and authority to own, lease and operate its
properties and to conduct its business as presently conducted and as
described in the Prospectus and to enter into and perform its obligations
under this Agreement, the DTC Letter of Representations, the Securities
and the Indenture (including the Tender Offer and Consent Solicitation
and/or the Back-End Redemption of the 9% Notes) and to enter into and
perform its obligations under the Related Transactions; and is duly
qualified as a foreign corporation to transact business and is in good
standing in each jurisdiction in which such qualification is required,
whether by reason of the ownership or leasing of property or the conduct
of business, except where the failure to so qualify would not have a
Material Adverse Effect on the Company.
(ii) Each Subsidiary Guarantor has been duly incorporated and is
validly existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation; has the corporate power and authority
to own, lease and operate its properties and conduct its business as
presently conducted and as described in the Prospectus and to enter into
and perform its obligations under this Agreement, the DTC Letter of
Representations, the Securities and the Indenture (including the Tender
Offer and Consent Solicitation and/or the Back-End Redemption of the 9%
Notes) and to enter and perform its obligations under the Related
Transactions; and is duly qualified as a foreign corporation to transact
business and is in good standing in each jurisdiction in which such
qualification is required, whether by reason of the ownership or leasing
of property or the conduct of business, except where the failure to so
qualify would not have a Material Adverse Effect on the Company. Except
with respect to Navajo Convenient Store Co., LLC (which is a majority
owned subsidiary), all the issued and outstanding capital stock of each
Subsidiary Guarantor has been duly authorized and validly issued, is fully
paid and nonassessable and is owned, directly or indirectly, by the
Company, and, to the knowledge of such counsel, free and clear of any
Lien, except for the Liens under the Revolving Credit Facility and the
Term Loan Agreement.
(iii) The descriptions in the Prospectus of statutes, legal and
governmental proceedings, contracts and other documents are accurate and
fairly present the information which, to such counsel's knowledge, is
required to be shown; and such counsel does not know of any statutes or
legal or governmental proceedings required to be described in the
Prospectus that are not described as required, or of any contracts or
documents of a character required to be described in the Prospectus that
are not described as required.
(iv) The statements (a) in the prospectus supplement under the
captions "Management's Discussion and Analysis of Financial Condition and
Results of Operation - Liquidity and Capital Resources", "Business -
Regulatory, Environmental and Other Matters", "Business - Motor Fuel
Programs", Business - MTBE Litigation", "Business - Alleged Regulatory
Violations", "Business - Discharges, Releases and Cleanup Activities",
"Business - Health and Safety", "Business - Changes in Environmental,
Health and Safety Laws", "Business - Rights-Of-Way", "Business - Jet Fuel
Claims", "Business - Yorktown Power Outage Claim", "Description of Capital
Stock" and "Underwriting", (b) in the base prospectus under the caption
"Description of Capital Stock" and "Plan of Distribution", and
C-1
(c) in Item 15 of the Registration Statement, insofar as such statements
constitute summaries of legal matters, the documents or legal proceedings,
fairly present and summarize, in all material respects, the matters
referred to therein.
(v) To the best of such counsel's knowledge, neither the Company nor
any Subsidiary Guarantor is in violation of its charter or bylaws, and to
the best of such counsel's knowledge, except as otherwise disclosed in the
Prospectus, neither the Company nor any Subsidiary Guarantor is in Default
in the performance or observance of any obligation, agreement, covenant or
condition contained in any Contract or any applicable law, administrative
regulation or administrative or court order or decree, which violation or
default would, singly or in the aggregate, have a Material Adverse Effect
on the Company.
(vi) The issuance and delivery of the Notes and the Guarantees of
the Notes, the execution and delivery of this Agreement, the DTC Letter of
Representations and the Indenture and the consummation of the transactions
contemplated herein (including the Tender Offer and Consent Solicitation
and/or the Back-End Redemption of the 9% Notes) and the Related
Transactions will not conflict with or constitute a breach of, or Default
or a Debt Repayment Triggering Event under, or result in the creation or
imposition of any Lien upon any material property or assets of the Company
or any Subsidiary Guarantor pursuant to any Contract, which conflict,
breach, Default, Debt Repayment Triggering Event or Lien would, singly or
in the aggregate, have a Material Adverse Effect on the Company.
(vii) The issuance and delivery of the Notes and the Guarantees of
the Notes, the execution and delivery of this Agreement, the DTC Letter of
Representations and the Indenture and the consummation of the transactions
contemplated herein (including the Tender Offer and Consent Solicitation
and/or the Back-End Redemption of the 9% Notes) and the Related
Transactions will not result in a violation of the provisions of the
charter or bylaws of the Company or any Subsidiary Guarantor or, to the
best of such counsel's knowledge, any material applicable law,
administrative regulation, administrative or court order or decree.
(viii) All of the issued and outstanding capital stock of each
subsidiary of the Company is owned, directly or indirectly, by the
Company, and, to the knowledge of such counsel, free and clear of any
security interest, mortgage, pledge, lien, encumbrance or any pending or
threatened claim.
(ix) To the knowledge of such counsel, there are no legal or
governmental actions, suits or proceedings pending or threatened which are
required to be disclosed in the Registration Statement, other than those
disclosed therein.
(x) To the knowledge of such counsel, there are no Contracts
required to be described or referred to in the Registration Statement or
to be filed as exhibits thereto other than those described or referred to
therein or filed or incorporated by reference as exhibits thereto; and the
descriptions thereof and references thereto are correct in all material
respects.
(xi) To the knowledge of such counsel, there are no persons with
registration or other similar rights to have any equity or debt securities
registered for sale under the Registration Statement or included in the
offering contemplated by this Agreement or the concurrent Senior
Subordinated Notes Offering.
C-2
In addition, such counsel shall state that such counsel has
reviewed the Prospectus, and any supplements or amendments thereto, and, on
the basis of such review, to the best of such counsel's knowledge, the
Prospectus, or any supplements or amendments thereto, as of its date, at the
date of any such amendment or supplement or at the Closing Date did not
contain any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances in which made, not misleading. The
aforementioned opinion shall be limited to the federal laws of the United
States of America, the laws of the State of Arizona and the corporate law of
the State of Delaware. Such counsel may state that insofar as the
aforementioned opinion is indicated to be based on the best of such counsel's
knowledge, such opinion is based upon such counsel's actual knowledge. Such
counsel may rely, to the extent he deems proper and specified in such
opinion, on opinions (which shall be dated the Closing Date and shall be
satisfactory in form and substance to the Underwriters, shall expressly state
that the Underwriters may rely on such opinion as if it were addressed to
them and shall be furnished to the Representatives) of local counsel
satisfactory to the Underwriters with respect to matters of law of
jurisdictions other than the federal laws of the United States of America,
the laws of the State of Arizona and the general corporate law of the State
of Delaware; provided, however, that such counsel shall further state that he
believes that he and the Underwriters are justified in relying upon such
opinion of other counsel, and as to matters of fact, to the extent they deem
proper, on certificates of responsible officers of any Seller and public
officials. Such counsel may rely on certificates of good standing and foreign
qualification from appropriate state officials with respect to opinions
regarding good standing and foreign qualification.
C-3
EXHIBIT D
Opinion of Montgomery & Andrews, New Mexico counsel to the
Company and the New Mexico Subsidiary Guarantors, to be delivered pursuant to
Section 5(h) of the Underwriting Agreement.
(i) Each of the Underwriting Agreement, the Indenture and the
Guarantees of the Notes has been duly authorized, executed and delivered
by each of the New Mexico Subsidiary Guarantors.
(xii) Each of the New Mexico Subsidiary Guarantors is a corporation
duly organized, validly existing and in good standing under the laws of
the State of New Mexico.
D-1