Exhibit 10.4

December 11, 2007

United Refining Energy Corp.

823 11th Avenue

New York, New York 10019

Deutsche Bank Securities Inc.

60 Wall Street

New York, New York 10005

Maxim Group LLC

405 Lexington Ave.

New York, New York 10174

 

Re: Initial Public Offering

Gentlemen:

The undersigned stockholder, officer and/or director of United Refining Energy
Corp. (the “Company”), in consideration of Deutsche Bank Securities Inc
(“Deutsche Bank”) and Maxim Group LLC (“Maxim” and, collectively with Deutsche
Bank, the “Representatives”) entering into a letter of intent (the “Letter of
Intent”) to underwrite an initial public offering (the “IPO”) of the securities
of the Company and embarking on, undertaking and continuing to participate in
the IPO process, hereby agrees as follows (certain capitalized terms used herein
are defined in paragraph 13 hereof):

1. If the Company solicits approval of its stockholders of an Extended Period or
a Business Combination, the undersigned will: (i) vote all Insider Shares owned
by the undersigned in accordance with the majority of the votes cast by the
Public Stockholders, (ii) vote any shares of Common Stock acquired in or
following the IPO or upon exercise of the Warrants acquired in the Private
Placement in favor of the Extended Period and the Business Combination and
(iii) all Insider Shares and all shares that may be acquired by it in or
following the IPO or upon exercise of the Warrants acquired in the Private
Placement for an amendment to the Company’s Amended and Restated Certificate of
Incorporation to provide for perpetual existence of the Company in the event the
Business Combination is approved.

2. (a) In the event that the Company fails to consummate a Business Combination
within 24 months from the effective date (the “Effective Date”) of the
registration statement relating to the IPO, or 30 months from the Effective Date
in the event the Extended Period is approved by the Company’s stockholders (the
later date being the “Termination Date”), the undersigned shall, in accordance
with all applicable requirements of the Delaware General Corporation Law, take
all action reasonably within his power to liquidate the Company and distribute
all funds held in the Trust Account to the Public Stockholders as soon as
reasonably practicable following the Termination Date in the manner and subject
to the deductions set forth in the Prospectus. In addition, from and after the
Termination Date, the undersigned will, in accordance with the Company’s Amended
and Restated Certificate of Incorporation, take all action reasonably within his
power to limit the Company’s activities to winding up its affairs and to
dissolving the Company and liquidating the Trust Account.

(b) Except with respect to any of the IPO Shares acquired by the undersigned in
connection with or following the IPO, the undersigned hereby irrevocably:
(i) waives any and all right, title, interest, cause of action or claim of any
kind (a “Claim”) in or to all funds in the Trust Account and any remaining net
assets of the Company upon liquidation of the Trust Account and dissolution of
the

 

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Company; (ii) waives any Claim the undersigned may have in the future as a
result of, or arising out of, any contracts or agreements with the Company,
which Claim would reduce, encumber or otherwise adversely affect the amounts
held in the Trust Account; and (iii) agrees that the undersigned will not seek
recourse (legal, equitable or otherwise) against the Trust Account for any
reason whatsoever. The undersigned hereby agrees that it shall promptly
reimburse the Trust Account for any distribution of amounts in the Trust Account
received by the undersigned in respect of its Shares. For clarity, the
undersigned may receive distributions from the Trust Account in respect of IPO
Shares.

3. The undersigned agrees to indemnify and hold harmless the Company against any
and all loss, liability, claims, damage and expense whatsoever (including, but
not limited to, any and all legal or other expenses reasonably incurred in
investigating, preparing or defending against any litigation, whether pending or
threatened, or any claim whatsoever) to which the Company may become subject as
a result of any claim by any target business or prospective target business or
any vendor or other entity that is owed money by the Company for services
rendered or products sold to the Company or the claims of any prospective or
actual target businesses but only to the extent necessary to ensure that such
loss, liability, claim, damage or expense does not reduce the amount in the
Trust Account below $9.97 per IPO Share and only in the event that such target
business or prospective target business, vendor or other entity has not executed
a valid and binding waiver of its right to seek payment of amounts due to it out
of the Trust Account. In the event that the Company does not consummate a
Business Combination and must distribute to its Public Stockholders the amount
in the Trust Account (including any accrued interest) plus any remaining net
assets, and if such funds are insufficient to complete such liquidation, the
undersigned agrees to advance such funds necessary to complete such liquidation
to the extent necessary to maintain $9.97 per IPO Share in the Trust Account and
agrees not to seek repayment for such expenses.

4. In order to minimize potential conflicts of interest that may arise from
multiple affiliations, and subject to the Right of First Refusal and Corporate
Opportunities Agreement by and between the Company and the undersigned, the
undersigned agrees to present to the Company for its consideration, prior to the
undersigned’s exploitation of that opportunity in any way or the presentation to
any other person or entity, any suitable opportunity to acquire an operating
business or related assets, until the earlier of the consummation by the Company
of a Business Combination, the liquidation of the Company or until such time as
the undersigned ceases to be an officer or director of the Company, but subject,
in each case, to any pre-existing fiduciary obligations the undersigned might
have, which fiduciary obligations are disclosed to the Company’s board of
directors prior to the Effective Date.

5. Other than as set forth in Section 4 above, the undersigned acknowledges and
agrees that the Company will not consummate any Business Combination involving a
company affiliated with any of the Insiders, unless the Company obtains an
opinion from an independent investment banking firm reasonably acceptable to the
Representatives that the Business Combination is fair to the Company’s
stockholders from a financial perspective.

6. Neither the undersigned, any member of the family of the undersigned, nor any
Affiliate of the undersigned will be entitled to receive and will not accept any
compensation for services rendered to the Company prior to the consummation of
the Business Combination; provided that the undersigned shall be entitled to
reimbursement from the Company for his out-of-pocket expenses incurred in
connection with seeking and consummating a Business Combination or provided
that, commencing on the Effective Date, the undersigned, shall be allowed to
charge the Company up to $7,500 per month, representing an allocable share of
the undersigned’s overhead, to compensate it for the Company’s use of the
undersigned’s offices, utilities and personnel. The undersigned shall be
entitled to reimbursement from the Company for its out-of-pocket expenses
incurred in connection with seeking and consummating a Business Combination.

 

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7. The undersigned agrees that neither the undersigned, any member of the family
of the undersigned, nor any Affiliate of the undersigned will be entitled to
receive or accept, and the undersigned, on behalf of the undersigned and the
aforementioned parties, hereby waives any rights to, a finder’s fee or any other
compensation payable by the Company in the event the undersigned, any member of
the family of the undersigned or any Affiliate of the undersigned originates a
Business Combination.

8. The undersigned will escrow its Insider Shares for the period commencing on
the Effective Date and ending on the earlier to occur of (i) three years from
the date of the Prospectus and (ii) one (1) year following the consummation of a
Business Combination, in each case subject to the terms of a Stock Escrow
Agreement which the Company will enter into with the undersigned and an escrow
agent acceptable to the Company.

9. The undersigned will escrow its Sponsor Warrants for the period commencing on
the Effective Date and ending on the later of: (i) one day after the
consummation of a Business Combination and (ii) one (1) year from the date of
the Prospectus, in each case subject to the terms of a Stock Escrow Agreement
which the Company will enter into with the undersigned and an escrow agent
acceptable to the Company.

10. The undersigned’s information furnished to the Company and the
Representatives is true and accurate in all respects, does not omit any material
information with respect to the undersigned’s background and contains all of the
information required to be disclosed pursuant to Section 401 of Regulation S-K,
promulgated under the Securities Act of 1933, as amended. The undersigned’s
Questionnaire furnished to the Company and the Representatives is true and
accurate in all respects. The undersigned further represents and warrants to the
Company and the Representatives that:

(a) No petition under the Federal bankruptcy laws or any state insolvency law
has been filed by or against, or a receiver, fiscal agent or similar officer was
appointed by a court for the business or property of the undersigned, or any
partnership in which the undersigned was or is a general partner at or within
two years prior to the date hereof, or any corporation or business association
of which the undersigned was an executive officer at or within two (2) years
prior to the date hereof;

(b) The undersigned has not been convicted in any criminal proceeding nor is the
undersigned currently a named subject of a pending criminal proceeding
(excluding traffic violations and other minor offenses);

(c) The undersigned has not been the subject of any order, judgment, or decree,
not subsequently reversed, suspended or vacated, of any court of competent
jurisdiction, permanently or temporarily enjoining the undersigned from, or
otherwise limiting, the following activities:

(i) Acting as a futures commission merchant, introducing broker, commodity
trading advisor, commodity pool operator, floor broker, leverage transaction
merchant, any other person regulated by the Commodity Futures Trading
Commission, or an associated person of any of the foregoing, or as an investment
adviser, underwriter, broker or dealer in securities, or as an affiliated
person, director or employee of any investment company, bank, savings and loan
association or insurance company, or engaging in or continuing any conduct or
practice in connection with such activity;

(ii) Engaging in any type of business practice; or

 

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(iii) Engaging in any activity in connection with the purchase or sale of any
security or commodity or in connection with any violation of Federal or State
securities laws or Federal commodities laws;

(d) The undersigned has not been the subject of any order, judgment or decree,
not subsequently reversed, suspended or vacated, of any Federal or State
authority barring, suspending or otherwise limiting for more than sixty
(60) days the right of the undersigned to engage in any activity described in
paragraph (c)(i) above, or to be associated with persons engaged in any such
activity;

(e) The undersigned has not been found by a court of competent jurisdiction in a
civil action or by the Securities and Exchange Commission to have violated any
Federal or State securities law, and the judgment in such civil action or
finding by the Securities and Exchange Commission has not been subsequently
reversed, suspended, or vacated; and

(f) The undersigned has not been found by a court of competent jurisdiction in a
civil action or by the Commodity Futures Trading Commission to have violated any
Federal commodities law, and the judgment in such civil action or finding by the
Commodity Futures Trading Commission has not been subsequently reversed,
suspended or vacated.

11. The undersigned has full right and power, without violating any agreement by
which the undersigned is bound, to enter into this letter agreement.

12. The undersigned authorizes any employer, financial institution, or consumer
credit reporting agency to release to the Representatives and their legal
representatives or agents (including any investigative search firm retained by
the Representatives) any information they may have about the undersigned’s
background and finances (the “Information”). Neither the Representatives nor
their agents shall be violating the undersigned’s right of privacy in any manner
in requesting and obtaining the Information and the undersigned hereby releases
them from liability for any damage whatsoever in that connection.

13. The undersigned hereby agrees not to propose or vote in favor of, any
amendment to the Company’s amended and restated certificate of incorporation
that requires the affirmative vote of at least 95% of the Company’s outstanding
Common Stock other than in connection with the proposal to approve the Extended
Period and in connection with the Business Combination. This paragraph may not
be modified or amended under any circumstances.

14. As used herein: (i) a “Business Combination” shall mean an acquisition, by
merger, capital stock exchange, asset or stock acquisition, reorganization or
otherwise and as otherwise described in the registration statement relating to
the IPO, of an operating business selected by the Company; (ii) “Common Stock”
shall mean the common stock, par value $.0001 per share, of the Company;
(iii) “Extended Period” shall mean the extension of the Company’s corporate
existence from 24 months to 30 months pursuant to the Company’s Amended and
Restate Certificate of Incorporation; (iv) “Insiders” shall mean all officers,
directors and stockholders of the Company immediately prior to the IPO;
(v) “Insider Shares” shall mean all of the shares of Common Stock owned by an
Insider prior to the IPO; (vi) “IPO Shares” shall mean the shares of Common
Stock issued in the Company’s IPO; (vii) “Private Placement” shall mean the
private placement of 15,600,000 warrants of the Company prior to the IPO;
(viii) “Prospectus” shall mean the prospectus contained in the registration
statement relating to the IPO; (ix) “Public Stockholders” shall mean the holders
of the securities issued by the Company in the IPO; (x) “Sponsor Warrants” shall
mean the 2,500,000 warrants granted to United Refining, Inc. by the Company; and
(xi) “Trust Account” means the trust account in which the proceeds to the
Company of the IPO will be deposited and held for the benefit of the holders of
the IPO shares, as described in greater detail in the Prospectus.

 

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15. The undersigned hereby agrees that any action, proceeding or claim against
the undersigned arising out of or relating in any way to this Agreement shall be
brought and enforced in the courts of the State of New York or the United States
District Court for the Southern District of New York, and irrevocably submits to
such jurisdiction, which jurisdiction shall be exclusive. The undersigned hereby
waives any objection to such exclusive jurisdiction and that such courts
represent an inconvenience forum.

 

UNITED REFINING, INC. By:  

/s/ John A. Catsimatidis

Name:   John A. Catsimatidis Title:   Chief Executive Officer

 

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