Exhibit 10.1

 

UNITED REFINING COMPANY

 

$200,000,000

 

10 1/2% Senior Notes Due 2012

 

Purchase Agreement

 

August 3, 2004

 

Citigroup Global Markets Inc.

As Representative of the Initial Purchasers

c/o Citigroup Global Markets Inc.

388 Greenwich Street

New York, New York 10013

 

Ladies and Gentlemen:

 

United Refining Company, a corporation organized under the laws of Pennsylvania
(the “Company”), proposes to issue and sell to the several parties named in
Schedule I hereto (the “Initial Purchasers”), for whom you (the
“Representative”) are acting as Representative, $200,000,000 principal amount of
its 10 1/2% Senior Notes Due 2012 (the “Notes”). The Notes are to be issued
under an indenture (the “Indenture”), to be dated as of the Closing Date (as
defined herein), among the Company, the Guarantors (as defined herein) and The
Bank of New York, as trustee (the “Trustee”). The Company’s obligations under
the Notes will be guaranteed (the “Guarantees,” and, together with the Notes,
the “Securities”) on a senior unsecured basis by each of the guarantors listed
on the signature pages hereto (collectively, the “Guarantors,” and together with
the Company, the “Issuers”).

 

The Securities will have the benefit of a registration rights agreement (the
“Registration Rights Agreement”), to be dated as of the Closing Date, among the
Issuers and the Initial Purchasers, pursuant to which the Issuers will agree to
register the Securities under the Act subject to the terms and conditions
therein specified. The use of the neuter in this Agreement shall include the
feminine and masculine wherever appropriate. Certain terms used herein are
defined in Section 18 hereof.

 

The sale of the Securities to the Initial Purchasers will be made without
registration of the Securities under the Act in reliance upon exemptions from
the registration requirements of the Act.

 

In connection with the sale of the Securities, the Issuers have prepared a
preliminary offering memorandum, dated July 22, 2004 (as amended or supplemented
at the date thereof, including any and all exhibits thereto and any information
incorporated by reference therein, the “Preliminary Memorandum”), and a final
offering memorandum, dated August 3, 2004 (as amended or supplemented at the
Execution Time, including any and all exhibits thereto and any information
incorporated by reference therein, the “Final Memorandum”). Each of the
Preliminary Memorandum and the Final Memorandum sets forth certain information
concerning the Issuers and the Securities. Each of the Issuers hereby confirms
that it has authorized the use of the Preliminary Memorandum and the Final
Memorandum, and any amendment or supplement thereto, in connection with the
offer and sale of the Securities by the Initial Purchasers as contemplated by
this Agreement, the Preliminary Memorandum and the Final Memorandum. Unless
stated to the contrary, any references herein to the terms “amend”, “amendment”
or “supplement” with respect to the Final Memorandum shall be deemed to refer to
and include any information filed under the Exchange Act subsequent to the
Execution Time that is incorporated by reference therein.

--------------------------------------------------------------------------------

1. Representations and Warranties. The Issuers, jointly and severally, represent
and warrant to each Initial Purchaser as set forth below in this Section 1.

 

(a) The Preliminary Memorandum, at the date thereof, did not contain any untrue
statement of a material fact or omit to state any material fact necessary to
make the statements therein, in the light of the circumstances under which they
were made, not misleading. At the Execution Time and on the Closing Date the
Final Memorandum did not and will not (and any amendment or supplement thereto,
at the date thereof and at the Closing Date will not) contain any untrue
statement of a material fact or omit to state any material fact necessary to
make the statements therein, in the light of the circumstances under which they
were made, not misleading; provided, however, that the Issuers make no
representation or warranty as to the information contained in or omitted from
the Preliminary Memorandum or the Final Memorandum, or any amendment or
supplement thereto, in reliance upon and in conformity with information
furnished in writing to the Company by or on behalf of the Initial Purchasers
through the Representative specifically for inclusion therein.

 

(b) None of the Issuers, their Affiliates, or any person acting on their behalf
has, directly or indirectly, made offers or sales of any security, or solicited
offers to buy, any security under circumstances that would require the
registration of the Securities under the Act.

 

(c) None of the Issuers, their Affiliates, or any person acting on their behalf
has: (i) engaged in any form of general solicitation or general advertising
(within the meaning of Regulation D) in connection with any offer or sale of the
Securities or (ii) engaged in any directed selling efforts (within the meaning
of Regulation S) with respect to the Securities; and each of the Issuers, their
Affiliates and each person acting on their behalf has complied with the offering
restrictions requirement of Regulation S.

 

(d) The Securities satisfy the eligibility requirements of Rule 144A(d)(3) under
the Act.

 

(e) No registration under the Act of the Securities is required for the offer
and sale of the Securities to or by the Initial Purchasers in the manner
contemplated herein and in the Final Memorandum assuming in each case (i) that
the purchasers who buy the Securities in the resales are either “qualified
institutional buyers” (as defined under Rule 144A of the Act) or “Accredited
Investors” (within the meaning of Regulation D) and (ii) the accuracy of and
compliance with the Initial Purchasers’ representations, warranties and
covenants contained in Section 4 of this Agreement.

 

(f) No Issuer is, or after giving effect to the offering and sale of the
Securities and the application of the proceeds thereof as described in the Final
Memorandum will not be, an “investment company” as defined in the Investment
Company Act, without taking account of any exemption arising out of the number
of holders of the Issuers’ securities.

 

(g) Each Issuer is subject to and in full compliance with the reporting
requirements of Section 13 or Section 15(d) of the Exchange Act.

 

(h) No Issuer has paid or agreed to pay to any person any compensation for
soliciting another to purchase any securities of any Issuer under circumstances
that would require the registration of the Securities under the Act (except as
contemplated in this Agreement).

 

(i) No Issuer has taken, directly or indirectly, any action designed to cause or
result, under the Exchange Act or otherwise, in stabilization or manipulation of
the price of any security of any Issuer to facilitate the sale or resale of the
Securities.

 

(j) Each Issuer has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the jurisdiction in which it is
chartered or organized with full corporate power and authority

 

-2-

--------------------------------------------------------------------------------

to own or lease, as the case may be, and to operate its properties and conduct
its business as described in the Final Memorandum, and is duly qualified to do
business as a foreign corporation and is in good standing under the laws of each
jurisdiction that requires such qualification, or is subject to no material
liability by reason of the failure to be so qualified in any such jurisdiction.

 

(k) All the outstanding shares of capital stock of each subsidiary have been
duly authorized and validly issued and are fully paid and nonassessable, and,
except as otherwise set forth in the Final Memorandum, all outstanding shares of
capital stock of the subsidiaries are owned by the Company either directly or
through wholly owned subsidiaries free and clear of any security interest,
claim, lien or encumbrance.

 

(l) The statements set forth in the Final Memorandum under the caption
“Description of Notes,” insofar as they purport to constitute a summary of the
terms of the Securities, and under the caption “Certain United States Federal
Tax Consequences, “ insofar as they purport to describe United States tax
considerations to holders of the Securities,” fairly summarize the matters
described therein.

 

(m) This Agreement has been duly authorized, executed and delivered by each
Issuer; the Indenture has been duly authorized by each Issuer and, assuming due
authorization, execution and delivery thereof by the Trustee, when executed and
delivered by each Issuer, will constitute a legal, valid, binding instrument
enforceable against each Issuer in accordance with its terms (subject, as to the
enforcement of remedies, to applicable bankruptcy, reorganization, insolvency,
moratorium or other laws affecting creditors’ rights generally from time to time
in effect and to general principles of equity); the Notes have been duly
authorized by the Company and, when executed by the Company and authenticated by
the Trustee in accordance with the provisions of the Indenture and delivered to
and paid for by the Initial Purchasers, will constitute the legal, valid and
binding obligations of the Company entitled to the benefits of the Indenture
(subject, as to the enforcement of remedies, to applicable bankruptcy,
reorganization, insolvency, moratorium or other laws affecting creditors’ rights
generally from time to time in effect and to general principles of equity); and
the Registration Rights Agreement has been duly authorized by each Issuer and,
when executed by each Issuer and delivered by each Issuer, will constitute the
legal, valid, binding and enforceable instrument of each Issuer (subject, as to
the enforcement of remedies, to applicable bankruptcy, reorganization,
insolvency, moratorium or other laws affecting creditors’ rights generally from
time to time in effect and to general principles of equity).

 

(n) Each of the Guarantees has been duly authorized by the applicable Guarantor
and, when executed by the applicable Guarantor and delivered to the Trustee in
accordance with the terms of the Indenture, will constitute the legal, valid and
binding obligation of such Guarantor enforceable against such Guarantor in
accordance with its terms (subject as to the enforcement of remedies, to
applicable bankruptcy, reorganization, insolvency (including, without
limitation, all laws relating to fraudulent transfers), moratorium or other laws
affecting creditors’ rights generally from time to time in effect and to the
general principles of equity).

 

(o) No consent, approval, authorization, filing with or order of any court or
governmental agency or body is required in connection with the transactions
contemplated herein, in the Indenture or in the Registration Rights Agreement,
except such as may be required under the blue sky laws of any jurisdiction in
which the Securities are offered and sold and, in the case of the Registration
Rights Agreement, such as will be obtained under the Act and the Trust Indenture
Act.

 

(p) None of the execution and delivery by the Issuers of the Indenture, this
Agreement or the Registration Rights Agreement, the issuance and sale of the
Securities, or the consummation of any other of the transactions herein or
therein contemplated, or the fulfillment of the terms hereof or thereof will
conflict with, result in a breach or violation or imposition of any lien, charge
or encumbrance upon any property or assets of any Issuer pursuant to, (i) the
charter or by-laws of any Issuer; (ii) the terms of any indenture, contract,
lease, mortgage, deed of trust, note agreement, loan agreement or other
agreement, obligation, condition, covenant or instrument to which any Issuer is
a party or bound or to which its property is subject; or (iii) any statute, law,
rule, regulation, judgment, order or decree of any court, regulatory body,
administrative agency, governmental body, arbitrator or other authority having
jurisdiction over an Issuer or any of its properties, except where such breach
or violation or imposition of any lien, charge or encumbrance upon any property
or assets of any Issuer as set forth in clauses (ii) or (iii) above would not
reasonably be expected to have a material adverse effect on the condition
(financial or otherwise), earnings,

 

-3-

--------------------------------------------------------------------------------

business or properties of the Company and its subsidiaries, taken as a whole,
whether or not arising from transactions in the ordinary course of business (a
“Material Adverse Effect”), except as set forth in or contemplated in the Final
Memorandum (exclusive of any amendment or supplement thereto).

 

(q) The consolidated historical financial statements and schedules of the
Company and its consolidated subsidiaries included or incorporated by reference
in the Final Memorandum present fairly the financial condition, results of
operations and cash flows of the Company as of the dates and for the periods
indicated, comply as to form with the applicable accounting requirements of
Regulation S-X and have been prepared in conformity with generally accepted
accounting principles applied on a consistent basis throughout the periods
involved (except as otherwise noted therein); the selected financial data set
forth under the caption “Selected Consolidated Financial and Other Operating
Data” in the Final Memorandum, the summary financial data set forth under the
caption “Summary Historical and Pro Forma Consolidated Financial and Other
Operating Data” in the Final Memorandum, and financial information set forth
under the caption “Capitalization” in the Final Memorandum, fairly presents, on
the basis stated in the Final Memorandum, the information included therein.

 

(r) No action, suit or proceeding by or before any court or governmental agency,
authority or body or any arbitrator involving any of the Issuers or their
property is pending or, to the best knowledge of any Issuer, threatened that (i)
would reasonably be expected to have a material adverse effect on the
performance of this Agreement, the Indenture, the Securities or the Registration
Rights Agreement, or the consummation of any of the transactions contemplated
hereby or thereby or (ii) would not have a Material Adverse Effect, except as
set forth in or contemplated in the Final Memorandum (exclusive of any amendment
or supplement thereto).

 

(s) Each Issuer owns or leases all such properties as are necessary to the
conduct of its operations as presently conducted.

 

(t) No Issuer is in violation or default of (i) any provision of its charter or
bylaws or other organizational or governing documents; (ii) the terms of any
indenture, contract, lease, mortgage, deed of trust, note agreement, loan
agreement or other agreement, obligation, condition, covenant or instrument to
which it is a party or bound or to which its property is subject; or (iii) any
statute, law, rule, regulation, judgment, order or decree applicable to any
Issuer of any court, regulatory body, administrative agency, governmental body,
arbitrator or other authority having jurisdiction over the Issuers or any of
their properties, as applicable, except where such violation or default as set
forth in clause (ii) or (iii) would not have a Material Adverse Effect.

 

(u) BDO Seidman, LLP, who have certified certain financial statements of the
Company and its consolidated subsidiaries and delivered their report with
respect to the audited consolidated financial statements and schedules included
or incorporated by reference in the Final Memorandum, are independent public
accountants with respect to the Company within the meaning of the Act.

 

(v) The Issuers have filed all foreign, federal, state and local tax returns
that are required to be filed or has requested extensions thereof (except in any
case in which the failure so to file would not have a Material Adverse Effect
and except as set forth in or contemplated in the Final Memorandum (exclusive of
any amendment or supplement thereto)) and have paid all taxes required to be
paid by them and any other assessment, fine or penalty levied against them, to
the extent that any of the foregoing is due and payable, except for any such
assessment, fine or penalty that is currently being contested in good faith or
as would not have a Material Adverse Effect and except as set forth in or
contemplated in the Final Memorandum (exclusive of any amendment or supplement
thereto).

 

(w) No labor problem or dispute with the employees of any of the Issuers exists
or, to the knowledge of the Company, is threatened or imminent, and the Company
is not aware of any existing or imminent labor disturbance by the employees of
any of the Issuers’ principal suppliers, contractors or customers, except as
would not have a Material Adverse Effect, and except as set forth in or
contemplated in the Final Memorandum (exclusive of any amendment or supplement
thereto).

 

-4-

--------------------------------------------------------------------------------

(x) The Issuers are insured by insurers of recognized financial responsibility
against such losses and risks and in such amounts as are prudent and customary
in the businesses in which they are engaged, and no Issuer has any reason to
believe that it will not be able to renew its existing insurance coverage as and
when such coverage expires or to obtain similar coverage from similar insurers
as may be necessary to continue its business at a cost that would not have a
Material Adverse Effect, except as set forth in or contemplated in the Final
Memorandum (exclusive of any amendment or supplement thereto).

 

(y) No subsidiary of the Company is currently prohibited, directly or
indirectly, from paying any dividends to the Company, from making any other
distribution on such subsidiary’s capital stock, from repaying to the Company
any loans or advances to such subsidiary from the Company or from transferring
any of such subsidiary’s property or assets to the Company or any other
subsidiary of the Company, except (i) as described in or contemplated in the
Final Memorandum (exclusive of any amendment or supplement thereto) and (ii) in
connection with the Revolving Credit Facility.

 

(z) The Issuers possess all licenses, certificates, permits and other
authorizations issued by the appropriate federal, state or foreign regulatory
authorities necessary to conduct their respective businesses, and no Issuer has
received any notice of proceedings relating to the revocation or modification of
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, except as set forth in or contemplated in the Final
Memorandum (exclusive of any amendment or supplement thereto).

 

(aa) Each Issuer maintains a system of internal accounting controls sufficient
to provide reasonable assurance that (i) transactions are executed in accordance
with management’s general or specific authorizations; (ii) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to maintain asset
accountability; (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 the existing assets at reasonable
intervals and appropriate action is taken with respect to any differences.

 

(bb) Each Issuer (i) is in compliance with any and all applicable foreign,
federal, state and local laws and regulations relating to the protection of
human health and safety, the environment or hazardous or toxic substances or
wastes, pollutants or contaminants (“Environmental Laws”); (ii) has received and
is in compliance with all permits, licenses or other approvals required of it
under applicable Environmental Laws to conduct its respective businesses; and
(iii) has not received notice of any actual or potential liability under any
Environmental Law, except where such non-compliance with Environmental Laws,
failure to receive required permits, licenses or other approvals, or liability
would not, individually or in the aggregate, have a Material Adverse Effect,
except as set forth in or contemplated in the Final Memorandum (exclusive of any
amendment or supplement thereto). Except as set forth in the Final Memorandum,
no Issuer has been named as a “potentially responsible party” under the
Comprehensive Environmental Response, Compensation, and Liability Act of 1980,
as amended, except in such cases that would not have a Material Adverse Effect.

 

(cc) The Issuers have no costs and liabilities associated with Environmental
Laws (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) that would, singly or
in the aggregate, have a Material Adverse Effect, except as set forth in or
contemplated in the Final Memorandum (exclusive of any amendment or supplement
thereto).

 

(dd) The minimum funding standard under Section 302 of the Employee Retirement
Income Security Act of 1974, as amended, and the regulations and published
interpretations thereunder (“ERISA”), has been satisfied by each “pension plan”
(as defined in Section 3(2) of ERISA) which has been established or maintained
by the Issuers, and the trust forming part of each such plan which is intended
to be qualified under Section 401 of the Code is so qualified; each Issuer has
fulfilled its obligations, if any, under Section 515 of ERISA; each pension plan
and welfare plan established or maintained by the Issuers is in compliance in
all material respects with the currently applicable provisions of ERISA; and no
Issuer has incurred or could reasonably be expected to incur any withdrawal
liability under Section 4201 of ERISA, any liability under Section 4062, 4063,
or 4064 of ERISA, or any other liability under Title IV of ERISA.

 

-5-

--------------------------------------------------------------------------------

(ee) The statistical and market-related data included in the Final Memorandum
(exclusive of any amendment or supplement thereto) are based on or derived from
sources which the Issuers believe to be reliable and accurate.

 

(ff) None of the Issuers or any agent acting on their behalf has taken or will
take any action that might cause this Agreement or the sale of the Securities to
violate Regulation T, U or X of the Board of Governors of the Federal Reserve
System, in each case as in effect, or as the same may hereafter be in effect, on
the Closing Date.

 

(gg) No Issuer or, to the knowledge of the Issuers, any director, officer,
agent, employee or Affiliate of any Issuer is aware of or has taken any action,
directly or indirectly, that would result in a violation by such Persons of
Foreign Corrupt Practices Act of 1977, as amended, and the rules and regulations
thereunder (the “FCPA”), including, without limitation, making use of the mails
or any means or instrumentality of interstate commerce corruptly in furtherance
of an offer, payment, promise to pay or authorization of the payment of any
money, or other property, gift, promise to give, or authorization of the giving
of anything of value to any “foreign official” (as such term is defined in the
FCPA) or any foreign political party or official thereof or any candidate for
foreign political office, in contravention of the FCPA; and the Issuers and, to
the knowledge of the Issuers, their Affiliates have conducted their businesses
in compliance with the FCPA.

 

(hh) The Company is in compliance with all the applicable provisions of the
Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”) that are currently in
effect and require compliance on or before the date hereof.

 

(ii) None of the Company, any of its subsidiaries or, to the knowledge of the
Company, any director, officer, agent, employee or Affiliate of the Company or
any of its subsidiaries is currently subject to any U.S. sanctions administered
by the Office of Foreign Assets Control of the U.S. Department of the Treasury
(“OFAC”); and the Company will not directly or indirectly use the proceeds of
the offering of the Securities hereunder, or lend, contribute or otherwise make
available such proceeds to any subsidiary, joint venture partner or other person
or entity, for the purpose of financing the activities of any person currently
subject to any U.S. sanctions administered by OFAC.

 

(jj) All of the Company’s subsidiaries are listed on Schedule II hereto and each
such subsidiary will be a Guarantor unless indicated otherwise on such schedule.

 

Any certificate signed by any officer of any Issuer and delivered to the
Representative or counsel for the Initial Purchasers in connection with the
offering of the Securities shall be deemed a representation and warranty by each
such Issuer, as to matters covered thereby, to each Initial Purchaser.

 

2. Purchase and Sale. Subject to the terms and conditions and in reliance upon
the representations and warranties herein set forth, the Issuers agree to sell
to each Initial Purchaser, and each Initial Purchaser agrees, severally and not
jointly, to purchase from the Issuers, at a purchase price of 95.921% of the
principal amount thereof, plus accrued interest, if any, from August 6, 2004 to
the Closing Date, the principal amount of Securities set forth opposite such
Initial Purchaser’s name in Schedule I hereto.

 

3. Delivery and Payment. Delivery of and payment for the Securities shall be
made at 10:00 A.M., New York City time, on August 6, 2004 or at such time on
such later date not more than three Business Days after the foregoing date as
the Representative shall designate, which date and time may be postponed by
agreement between the Representative and the Company or as provided in Section 9
hereof (such date and time of delivery and payment for the Securities being
herein called the “Closing Date”). Delivery of the Securities shall be made to
the Representative for the respective accounts of the several Initial Purchasers
against payment by the several Initial Purchasers through the Representative of
the purchase price thereof to or upon the order of the Company by wire transfer
payable in same-day funds to the account specified by the Company. Delivery of
the Securities shall be made through the facilities of The Depository Trust
Company unless the Representative shall otherwise instruct.

 

-6-

--------------------------------------------------------------------------------

4. Offering by Initial Purchasers. (a) Each Initial Purchaser acknowledges that
the Securities have not been and will not be registered under the Act and may
not be offered or sold within the United States or to, or for the account or
benefit of, U.S. persons, except pursuant to an exemption from, or in a
transaction not subject to, the registration requirements of the Act.

 

(b) Each Initial Purchaser, severally and not jointly, represents and warrants
to and agrees with the Issuers that:

 

(i) it has not offered or sold, and will not offer or sell, any Securities
within the United States or to, or for the account or benefit of, U.S. persons
(x) as part of their distribution at any time or (y) otherwise until 40 days
after the later of the commencement of the offering and the date of closing of
the offering except:

 

(A) to those it reasonably believes to be “qualified institutional buyers” (as
defined in Rule 144A under the Act) or

 

(B) in accordance with Rule 903 of Regulation S;

 

(ii) neither it nor any person acting on its behalf has made or will make offers
or sales of the Securities in the United States by means of any form of general
solicitation or general advertising (within the meaning of Regulation D) in the
United States;

 

(iii) in connection with each sale pursuant to Section 4(b)(i)(A), it has taken
or will take reasonable steps to ensure that the purchaser of such Securities is
aware that such sale is being made in reliance on Rule 144A;

 

(iv) neither it, nor any of its Affiliates nor any person acting on its or their
behalf has engaged or will engage in any directed selling efforts (within the
meaning of Regulation S) with respect to the Securities;

 

(v) it has not entered and will not enter into any contractual arrangement with
any distributor (within the meaning of Regulation S) with respect to the
distribution of the Securities, except with its affiliates or with the prior
written consent of the Company;

 

(vi) it and its Affiliates have complied and will comply with the offering
restrictions requirement of Regulation S;

 

(vii) at or prior to the confirmation of sale of Securities (other than a sale
of Securities pursuant to Section 4(b)(i)(A) of this Agreement), it shall have
sent to each distributor, dealer or person receiving a selling concession, fee
or other remuneration that purchases Securities from it during the distribution
compliance period (within the meaning of Regulation S) a confirmation or notice
to substantially the following effect:

 

“The Securities covered hereby have not been registered under the U.S.
Securities Act of 1933 (the “Act”) and may not be offered or sold within the
United States or to, or for the account or benefit of, U.S. persons (i) as part
of their distribution at any time or (ii) otherwise until 40 days after the
later of the commencement of the offering and the date of closing of the
offering, except in either case in accordance with Regulation S or Rule 144A
under the Act. Terms used in this paragraph have the meanings given to them by
Regulation S.”

 

-7-

--------------------------------------------------------------------------------

(viii) it has not offered or sold and, prior to the date six months after the
date of issuance of the Securities, will not offer or sell any Securities to
persons in the United Kingdom except to persons whose ordinary activities
involve them in acquiring, holding, managing or disposing of investments (as
principal or as agent) for the purposes of their businesses or otherwise in
circumstances which have not resulted and will not result in an offer to the
public in the United Kingdom within the meaning of the Public Offers of
Securities Regulations 1995;

 

(ix) it has complied and will comply with all applicable provisions of the FSMA
with respect to anything done by it in relation to the Securities in, from or
otherwise involving the United Kingdom; and

 

(x) it has only communicated or caused to be communicated and will only
communicate or cause to be communicated any invitation or inducement to engage
in investment activity (within the meaning of section 21 of the FSMA) received
by it in connection with the issue or sale of any Securities, in circumstances
in which section 21(1) of the FSMA does not apply to the Company.

 

5. Agreements. The Issuers, jointly and severally, agree with each Initial
Purchaser that:

 

(a) The Issuers will furnish to the Initial Purchasers and to counsel for the
Initial Purchasers, without charge, during the period referred to in paragraph
(c) below, as many copies of the Final Memorandum and any amendments and
supplements thereto as they may reasonably request.

 

(b) The Issuers will not amend or supplement the Final Memorandum, other than by
filing documents under the Exchange Act that are incorporated by reference
therein, without the prior written consent of the Representative; provided,
however, that, prior to the completion of the distribution of the Securities by
the Initial Purchasers (as determined by the Initial Purchasers), the Company
will not file any document under the Exchange Act that is incorporated by
reference in the Final Memorandum unless, prior to such proposed filing, the
Company has furnished the Representative with a copy of such document for its
review and the Representative has not reasonably objected to the filing of such
document. The Company will promptly advise the Representative when any document
filed under the Exchange Act that is incorporated by reference in the Final
Memorandum shall have been filed with the Commission.

 

(c) If at any time prior to the completion of the sale of the Securities by the
Initial Purchasers (as determined by the Representative), but in any event no
later than nine months from the date of the Final Memorandum, any event occurs
as a result of which the Final Memorandum, as then amended or supplemented,
would include any untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or if it should be
necessary to amend or supplement the Final Memorandum to comply with applicable
law, the Issuers will promptly (i) notify the Representative of any such event;
(ii) subject to the requirements of paragraph (b) of this Section 5, prepare an
amendment or supplement that will correct such statement or omission or effect
such compliance; and (iii) supply any supplemented or amended Final Memorandum
to the several Initial Purchasers and counsel for the Initial Purchasers without
charge in such quantities as they may reasonably request.

 

(d) The Issuers will arrange, upon the request of the Representative, for the
qualification of the Securities for sale by the Initial Purchasers under the
laws of such jurisdictions as the Representative may designate and will maintain
such qualifications in effect so long as required for the sale of the
Securities; provided that in no event shall any Issuer be obligated to qualify
to do business in any jurisdiction where it is not now so qualified or to take
any action that would subject it to service of process in suits, other than
those arising out of the offering or sale of the Securities, in any jurisdiction
where it is not now so subject. The Issuers will promptly advise the
Representative of the receipt by any Issuer of any notification with respect to
the suspension of the qualification of the Securities for sale in any
jurisdiction or the initiation or threatening of any proceeding for such
purpose.

 

-8-

--------------------------------------------------------------------------------

(e) During the period of two years after the Closing Date, the Issuers will not,
and will not permit any of their Affiliates to, resell any Securities that
constitute “restricted securities” under Rule 144 that have been acquired by any
of them.

 

(f) None of the Issuers, their Affiliates, or any person acting on any of their
behalf will, directly or indirectly, make offers or sales of any security, or
solicit offers to buy any security, under circumstances that would require the
registration of the Securities under the Act.

 

(g) None of the Issuers, their Affiliates, or any person acting on any of their
behalf will engage in any form of general solicitation or general advertising
(within the meaning of Regulation D) in connection with any offer or sale of the
Securities in the United States and none of the Issuers, their Affiliates, or
any person acting on any of their behalf will engage in any directed selling
efforts with respect to the Securities, and each of them will comply with the
offering restrictions requirement of Regulation S. Terms used in this paragraph
have the meanings given to them by Regulation S.

 

(h) So long as any of the Securities are “restricted securities” within the
meaning of Rule 144(a)(3) under the Act, the Issuers will, during any period in
which it is not subject to and in compliance with Section 13 or 15(d) of the
Exchange Act, provide to each holder of such restricted securities and to each
prospective purchaser (as designated by such holder) of such restricted
securities, upon the request of such holder or prospective purchaser, any
information required to be provided by Rule 144A(d)(4) under the Act. This
covenant is intended to be for the benefit of the holders, and the prospective
purchasers designated by such holders, from time to time of such restricted
securities.

 

(i) The Issuers will cooperate with the Representative and use their best
efforts to permit the Securities to be eligible for clearance and settlement
through The Depository Trust Company.

 

(j) No Issuer will take, directly or indirectly, any action designed to result,
under the Exchange Act or otherwise, in stabilization or manipulation of the
price of any security of any Issuer to facilitate the sale or resale of the
Securities.

 

(k) The Company agrees to pay the costs and expenses relating to the following
matters: (i) the preparation of the Indenture and the Registration Rights
Agreement, the issuance of the Securities and the fees of the Trustee; (ii) the
preparation, printing or reproduction of the Preliminary Memorandum and the
Final Memorandum and each amendment or supplement to either of them; (iii) the
printing (or reproduction) and delivery (including postage, air freight charges
and charges for counting and packaging) of such copies of the Preliminary
Memorandum and the Final Memorandum, and all amendments or supplements to either
of them, as may, in each case, be reasonably requested for use in connection
with the offering and sale of the Securities; (iv) the preparation, printing,
authentication, issuance and delivery of certificates for the Securities; (v)
any stamp or transfer taxes in connection with the original issuance and sale of
the Securities; (vi) the printing (or reproduction) and delivery of this
Agreement, any blue sky memorandum and all other agreements or documents printed
(or reproduced) and delivered in connection with the offering of the Securities;
(vii) any registration or qualification of the Securities for offer and sale
under the securities or blue sky laws of the several states and any other
jurisdictions specified pursuant to Section 5(d) (including filing fees and the
reasonable fees and expenses of counsel for the Initial Purchasers relating to
such registration and qualification); (viii) admitting the Securities for
trading in the PORTAL Market; (ix) the transportation and other expenses
incurred by or on behalf of Company representatives in connection with
presentations to prospective purchasers of the Securities; (x) the fees and
expenses of the Issuers’ accountants and the fees and expenses of counsel
(including local and special counsel) for the Issuers; and (xi) all other costs
and expenses incident to the performance by the Issuers of their obligations
hereunder. It is understood, however, that the Initial Purchasers will pay all
of their own costs and expenses, including the fees of their counsel, transfer
taxes, fees and commissions on resale of any of the securities by them, and any
advertising expenses connected with any offers they may make.

 

-9-

--------------------------------------------------------------------------------

(l) The Company will, for a period of twelve months following the Execution
Time, furnish to the Representative (i) all reports or other communications
(financial or other) generally made available to stockholders, and deliver such
reports and communications to the Representative as soon as they are available,
unless such documents are furnished to or filed with the Commission or any
securities exchange on which any class of securities of the Company is listed
and generally made available to the public and (ii) such additional information
concerning the business and financial condition of the Company as Representative
may from time to time reasonably request (such statements to be on a
consolidated basis to the extent the accounts of the Company and its
subsidiaries are consolidated in reports furnished to stockholders).

 

(m) Each Issuer will comply with all applicable securities and other laws, rules
and regulations, including, without limitation, the Sarbanes-Oxley Act, and use
its best efforts to cause each of their directors and officers, in their
capacities as such, to comply with such laws, rules and regulations, including,
without limitation, the provisions of the Sarbanes-Oxley Act.

 

6. Conditions to the Obligations of the Initial Purchasers. The obligations of
the Initial Purchasers to purchase the Securities shall be subject to the
accuracy of the representations and warranties of the Issuers contained herein
at the Execution Time and the Closing Date, to the accuracy of the statements of
the Issuers made in any certificates pursuant to the provisions hereof, to the
performance by the Issuers of their respective obligations hereunder and to the
following additional conditions:

 

(a) The Representative shall have received from Kramer Levin Naftalis & Frankel
LLP, counsel for the Company, an opinion, dated the Closing Date and addressed
to the Representative, substantially in the form of Annex A attached hereto.

 

(b) The Representative shall have received from John R. Wagner, General Counsel
for the Issuers, the opinion, dated the Closing Date and addressed to the
Representative, substantially in the form of Annex B attached hereto.

 

(c) The Representative shall have received from Cahill Gordon & Reindel LLP,
counsel for the Initial Purchasers, such opinion or opinions, dated the Closing
Date and addressed to the Representative, with respect to the issuance and sale
of the Securities, the Indenture, the Registration Rights Agreement, the Final
Memorandum (as amended or supplemented at the Closing Date) and other related
matters as the Representative may reasonably require, and each of the Issuers
shall have furnished to such counsel such documents as they request for the
purpose of enabling them to pass upon such matters.

 

(d) The Company shall have furnished to the Representative a certificate of the
Company, signed by (x) the Chairman of the Board or the President and (y) the
principal financial or accounting officer of the Company, dated the Closing
Date, to the effect that the signers of such certificate have reviewed the Final
Memorandum, any amendment or supplement to the Final Memorandum and this
Agreement and that:

 

(i) the representations and warranties of each Issuer in this Agreement are true
and correct on and as of the Closing Date with the same effect as if made on the
Closing Date, and each Issuer has complied with all the agreements and satisfied
all the conditions on its part to be performed or satisfied hereunder at or
prior to the Closing Date; and

 

(ii) since the date of the most recent financial statements included or
incorporated by reference in the Final Memorandum (exclusive of any amendment or
supplement thereto), there has been no material adverse change to the condition
(financial or otherwise), earnings, business or properties of the Company and
its subsidiaries, taken as a whole, whether or not arising from transactions in
the ordinary course of business, except as set forth in or contemplated in the
Final Memorandum (exclusive of any amendment or supplement thereto).

 

(e) At the Execution Time and at the Closing Date, the Issuers shall have
requested and caused BDO Seidman, LLP to furnish to the Representative, a
“comfort” letter, dated as of the Execution Time and

 

-10-

--------------------------------------------------------------------------------

a bring-down “comfort letter”, dated as of the Closing Date, in form and
substance satisfactory to the Representative, confirming that they are
independent accountants within the meaning of the Exchange Act and the
applicable rules and regulations thereunder and confirming certain matters with
respect to the audited and unaudited financial statements and other financial
and accounting information contained in the Final Memorandum.

 

(f) Subsequent to the Execution Time or, if earlier, the dates as of which
information is given in the Final Memorandum (exclusive of any amendment or
supplement thereto), there shall not have been (i) any change or decrease
specified in the letter or letters referred to in paragraph (e) of this Section
6; or (ii) any change, or any development involving a prospective change in or
affecting the condition (financial or otherwise), earnings, business or
properties of the Company and its subsidiaries taken as a whole, whether or not
arising from transactions in the ordinary course of business, except as set
forth in or contemplated in the Final Memorandum (exclusive of any amendment or
supplement thereto), the effect of which, in any case referred to in clause (i)
or (ii) above, is, in the sole judgment of the Representative, so material and
adverse as to make it impractical or inadvisable to proceed with the offering or
delivery of the Securities as contemplated in the Final Memorandum (exclusive of
any amendment or supplement thereto).

 

(g) The Securities shall have been designated as PORTAL-eligible securities in
accordance with the rules and regulations of the NASD and the Securities shall
be eligible for clearance and settlement through The Depository Trust Company.

 

(h) Subsequent to the Execution Time, there shall not have been any decrease in
the rating of any of the Company’s securities by any “nationally recognized
statistical rating organization” (as defined for purposes of Rule 436(g) under
the Act) or any notice given of any intended or potential decrease in any such
rating or of a possible change in any such rating that does not indicate the
direction of the possible change.

 

(i) Prior to the Closing Date, the Company shall have furnished to the
Representative such further information, certificates and documents as the
Representative may reasonably request.

 

(j) The Company shall have entered into and delivered to the Representative an
amendment to the Revolving Credit Facility in form and substance reasonably
satisfactory to the Representative.

 

(k) The Company shall have dissolved United Refining Marketing, Inc, a Delaware
corporation and shall have delivered to the Representative a notice of
dissolution or equivalent evidence of dissolution from the Delaware Secretary of
State, in form and substance reasonably satisfactory to the Representative.

 

(l) The Company shall have caused a notice of redemption to be mailed to the
holders of the 10.75% Senior Notes due 2007 and irrevocably deposited an amount
equal to such redemption with IBJ Schroder Bank & Trust Company, in each case,
concurrently with the closing of the Securities.

 

If any of the conditions specified in this Section 6 shall not have been
fulfilled when and as provided in this Agreement, or if any of the opinions and
certificates mentioned above or elsewhere in this Agreement shall not be
reasonably satisfactory in form and substance to the Representative and counsel
for the Initial Purchasers, this Agreement and all obligations of the Initial
Purchasers hereunder may be cancelled at, or at any time prior to, the Closing
Date by the Representative. Notice of such cancellation shall be given to the
Company in writing or by telephone or facsimile confirmed in writing.

 

The documents required to be delivered by this Section 6 will be delivered at
the office of counsel for the Initial Purchasers, at 80 Pine Street, New York,
New York 10005, on the Closing Date.

 

7. Reimbursement of Expenses. If the sale of the Securities provided for herein
is not consummated because any condition to the obligations of the Initial
Purchasers set forth in Section 6 hereof is not satisfied, because of any
termination pursuant to Section 10 hereof or because of any refusal, inability
or failure on the part of the Issuers to perform any agreement herein or comply
with any provision hereof other than by reason of a default by any of the
Initial Purchasers, the Issuers will reimburse the Initial Purchasers severally
through Citigroup on demand for all expenses (including reasonable fees and
disbursements of counsel) that shall have been incurred by them in connection
with the proposed purchase and sale of the Securities.

 

-11-

--------------------------------------------------------------------------------

8. Indemnification and Contribution. (a) The Issuers, jointly and severally,
agree to indemnify and hold harmless each Initial Purchaser, the directors,
officers, employees, Affiliates and agents of each Initial Purchaser and each
person who controls any Initial Purchaser within the meaning of either the Act
or the Exchange Act against any and all losses, claims, damages or liabilities,
joint or several, to which they or any of them may become subject under the Act,
the Exchange Act or other U.S. federal or state statutory law or regulation, at
common law or otherwise, insofar as such losses, claims, damages or liabilities
(or actions in respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of a material fact contained in the
Preliminary Memorandum, the Final Memorandum or in any amendment or supplement
thereto or arise out of or are 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, in the light of the circumstances under which they were
made, not misleading, and agrees to reimburse each such indemnified party, as
incurred, for any legal or other expenses reasonably incurred by it in
connection with investigating or defending any such loss, claim, damage,
liability or action; provided, however, that the Issuers will not be liable in
any such case to the extent that any such loss, claim, damage or liability
arises out of or is based upon any such untrue statement or alleged untrue
statement or omission or alleged omission made in the Preliminary Memorandum,
the Final Memorandum or in any amendment thereof or supplement thereto, in
reliance upon and in conformity with written information furnished to the
Issuers by or on behalf of any Initial Purchaser through the Representative
specifically for inclusion therein. This indemnity agreement will be in addition
to any liability that the Company may otherwise have.

 

(b) Each Initial Purchaser severally, and not jointly, agrees to indemnify and
hold harmless each Issuer, each of their directors, each of their officers, and
each person who controls such Issuer within the meaning of either the Act or the
Exchange Act, to the same extent as the foregoing indemnity from such Issuer to
each Initial Purchaser, but only with reference to written information relating
to such Initial Purchaser furnished to such Issuer by or on behalf of such
Initial Purchaser through the Representative specifically for inclusion in the
Preliminary Memorandum, the Final Memorandum or in any amendment or supplement
thereto. This indemnity agreement will be in addition to any liability that any
Initial Purchaser may otherwise have. Each Issuer acknowledges that (i) the
statements set forth in the last paragraph of the cover page regarding delivery
of the Securities and (ii), under the heading “Plan of Distribution”, the
paragraphs related to over-allotment, covering transactions and stabilizing
transactions in the Preliminary Memorandum and the Final Memorandum constitute
the only information furnished in writing by or on behalf of the Initial
Purchasers for inclusion in the Preliminary Memorandum, the Final Memorandum or
in any amendment or supplement thereto.

 

(c) 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 the indemnifying party under this
Section 8, notify the indemnifying party in writing of the commencement thereof;
but the failure so to notify the indemnifying party (i) will not relieve it from
liability under paragraph (a) or (b) above unless and to the extent it did not
otherwise learn of such action and such failure results in the forfeiture by the
indemnifying party of substantial rights and defenses and (ii) will not, in any
event, relieve the indemnifying party from any obligations to any indemnified
party other than the indemnification obligation provided in paragraph (a) or (b)
above. The indemnifying party shall be entitled to appoint counsel (including
local counsel) of the indemnifying party’s choice at the indemnifying party’s
expense to represent the indemnified party in any action for which
indemnification is sought (in which case the indemnifying party shall not
thereafter be responsible for the fees and expenses of any separate counsel,
other than local counsel if not appointed by the indemnifying party, retained by
the indemnified party or parties except as set forth below); provided, however,
that such counsel shall be reasonably satisfactory to the indemnified party.
Notwithstanding the indemnifying party’s election to appoint counsel (including
local counsel) to represent the indemnified party in an action, the indemnified
party shall have the right to employ separate counsel (including local counsel),
and the indemnifying party shall bear the reasonable fees, costs and expenses of
such separate counsel if (i) the use of counsel chosen by the indemnifying party
to represent the indemnified party would present such counsel with a conflict of
interest; (ii) the actual or potential defendants in, or targets of, any such
action include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that there may be legal
defenses available to it and/or other indemnified parties that are different
from or additional to those available to the indemnifying party; (iii) the
indemnifying party shall not have

 

-12-

--------------------------------------------------------------------------------

employed counsel satisfactory to the indemnified party to represent the
indemnified party within a reasonable time after notice of the institution of
such action; or (iv) the indemnifying party shall authorize in writing the
indemnified party to employ separate counsel at the expense of the indemnifying
party; provided, however, the indemnifying party shall not be liable for the
fees and expenses of more than one such separate counsel (together with local
counsel) in connection with any action or related proceeding in the same
jurisdiction. An indemnifying party will not, without the prior written consent
of the indemnified parties, which consent shall not be unreasonably withheld,
delayed or conditioned, settle, compromise or consent to the entry of any
judgment with respect to any pending or threatened claim, action, suit or
proceeding in respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified parties are actual or potential
parties to such claim or action) unless such settlement, compromise or consent
includes an unconditional release of each indemnified party from all liability
arising out of such claim, action, suit or proceeding.

 

(d) In the event that the indemnity provided in paragraph (a) or (b) of this
Section 8 is unavailable to or insufficient to hold harmless an indemnified
party for any reason, the Issuers and the Initial Purchasers severally agree to
contribute to the aggregate losses, claims, damages and liabilities (including
legal or other expenses reasonably incurred in connection with investigating or
defending any loss, claim, damage, liability or action) (collectively “Losses”)
to which the Issuers and one or more of the Initial Purchasers may be subject in
such proportion as is appropriate to reflect the relative benefits received by
the Issuers on the one hand and by the Initial Purchasers on the other from the
offering of the Securities; provided, however, that in no case shall any Initial
Purchaser be responsible for any amount in excess of the purchase discount or
commission applicable to the Securities purchased by such Initial Purchaser
hereunder. If the allocation provided by the immediately preceding sentence is
unavailable for any reason, the Issuers and the Initial Purchasers severally
shall contribute in such proportion as is appropriate to reflect not only such
relative benefits but also the relative fault of the Issuers on the one hand and
the Initial Purchasers on the other in connection with the statements or
omissions that resulted in such Losses, as well as any other relevant equitable
considerations. Benefits received by the Issuers shall be deemed to be equal to
the total net proceeds from the offering (before deducting expenses) received by
them, and benefits received by the Initial Purchasers shall be deemed to be
equal to the total purchase discounts and commissions. Relative fault shall be
determined by reference to, among other things, whether any untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information provided by the Issuers on the one hand
or the Initial Purchasers on the other, the intent of the parties and their
relative knowledge, access to information and opportunity to correct or prevent
such untrue statement or omission. The Issuers and the Initial Purchasers agree
that it would not be just and equitable if contribution were determined by pro
rata allocation or any other method of allocation that does not take account of
the equitable considerations referred to above. Notwithstanding the provisions
of this paragraph (d), no person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. For purposes
of this Section 8, each person who controls an Initial Purchaser within the
meaning of either the Act or the Exchange Act and each director, officer,
employee, Affiliate and agent of any Initial Purchaser shall have the same
rights to contribution as such Initial Purchaser, and each person who controls
an Issuer within the meaning of either the Act or the Exchange Act and each
officer and director of an Issuer shall have the same rights to contribution as
such Issuer, subject in each case to the applicable terms and conditions of this
paragraph (d).

 

9. Default by an Initial Purchaser. If any one or more Initial Purchasers shall
fail to purchase and pay for any of the Securities agreed to be purchased by
such Initial Purchaser hereunder and such failure to purchase shall constitute a
default in the performance of its or their obligations under this Agreement, the
remaining Initial Purchasers shall be obligated severally to take up and pay for
(in the respective proportions which the principal amount of Securities set
forth opposite their names in Schedule I hereto bears to the aggregate principal
amount of Securities set forth opposite the names of all the remaining Initial
Purchasers) the Securities which the defaulting Initial Purchaser or Initial
Purchasers agreed but failed to purchase; provided, however, that in the event
that the aggregate principal amount of Securities which the defaulting Initial
Purchaser or Initial Purchasers agreed but failed to purchase shall exceed 10%
of the aggregate principal amount of Securities set forth in Schedule I hereto,
the remaining Initial Purchasers shall have the right to purchase all, but shall
not be under any obligation to purchase any, of the Securities, and if such
nondefaulting Initial Purchasers do not purchase all the Securities, this
Agreement will terminate without liability to any nondefaulting Initial
Purchaser or any Issuer. In the event of a default by any Initial Purchaser as
set forth in this Section 9, the Closing Date shall be postponed for such
period, not exceeding five Business Days, as the Representative shall determine
in order that the required changes in the

 

-13-

--------------------------------------------------------------------------------

Final Memorandum or in any other documents or arrangements may be effected.
Nothing contained in this Agreement shall relieve any defaulting Initial
Purchaser of its liability, if any, to the Issuers or any nondefaulting Initial
Purchaser for damages occasioned by its default hereunder.

 

10. Termination. This Agreement shall be subject to termination in the absolute
discretion of the Representative, by notice given to the Company prior to
delivery of and payment for the Securities, if at any time prior to such time
(i) trading in securities generally on the New York Stock Exchange or the Nasdaq
National Market shall have been suspended or limited or minimum prices shall
have been established on such exchange or the Nasdaq National Market; (ii) a
banking moratorium shall have been declared either by U.S. federal or New York
State authorities; or (iii) there shall have occurred any outbreak or escalation
of hostilities, declaration by the United States of a national emergency or war
or other calamity or crisis the effect of which on financial markets is such as
to make it, in the sole judgment of the Representative, impractical or
inadvisable to proceed with the offering or delivery of the Securities as
contemplated in the Final Memorandum (exclusive of any amendment or supplement
thereto).

 

11. Representations and Indemnities to Survive. The respective agreements,
representations, warranties, indemnities and other statements of the Issuers or
their respective officers and of the Initial Purchasers 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 the Initial Purchasers or the Issuers
or any of the indemnified persons referred to in Section 8 hereof, and will
survive delivery of and payment for the Securities. The provisions of Sections 7
and 8 hereof shall survive the termination or cancellation of this Agreement.

 

12. Notices. All communications hereunder will be in writing and effective only
on receipt, and, if sent to the Representative, will be mailed, delivered or
telefaxed to the Citigroup General Counsel (fax no.: (212) 816-7912) and
confirmed to Citigroup at 388 Greenwich Street, New York, New York 10013,
Attention: General Counsel; or, if sent to the Issuers, will be mailed,
delivered or telefaxed to (814) 723-4371 and confirmed to it at 15 Bradley
Street, Warren, Pennsylvania 16365, attention of the Legal Department.

 

13. Successors. This Agreement will inure to the benefit of and be binding upon
the parties hereto and their respective successors and the indemnified persons
referred to in Section 8 hereof and their respective successors, and, except as
expressly set forth in Section 5(h) hereof, no other person will have any right
or obligation hereunder.

 

14. Applicable Law. This Agreement will be governed by and construed in
accordance with the laws of the State of New York applicable to contracts made
and to be performed within the State of New York. The parties hereto each hereby
waive any right to trial by jury in any action, proceeding or counterclaim
arising out of or relating to this Agreement.

 

15. Counterparts. This Agreement may be signed in one or more counterparts, each
of which shall constitute an original and all of which together shall constitute
one and the same agreement.

 

16. Headings. The section headings used herein are for convenience only and
shall not affect the construction hereof.

 

17. Definitions. The terms that follow, when used in this Agreement, shall have
the meanings indicated.

 

“Act” shall mean the Securities Act of 1933, as amended, and the rules and
regulations of the Commission promulgated thereunder.

 

“Affiliate” shall have the meaning specified in Rule 501(b) of Regulation D.

 

“Business Day” shall mean any day other than a Saturday, a Sunday or a legal
holiday or a day on which banking institutions or trust companies are authorized
or obligated by law to close in The City of New York.

 

-14-

--------------------------------------------------------------------------------

“Citigroup” shall mean Citigroup Global Markets Inc.

 

“Code” shall mean the Internal Revenue Code of 1986, as amended.

 

“Commission” shall mean the Securities and Exchange Commission.

 

“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended, and
the rules and regulations of the Commission promulgated thereunder.

 

“Execution Time” shall mean the date and time that this Agreement is executed
and delivered by the parties hereto.

 

“Investment Company Act” shall mean the Investment Company Act of 1940, as
amended, and the rules and regulations of the Commission promulgated thereunder.

 

“NASD” shall mean the National Association of Securities Dealers, Inc.

 

“PORTAL” shall mean the Private Offerings, Resales and Trading through Automated
Linkages system of the NASD.

 

“Regulation D” shall mean Regulation D under the Act.

 

“Regulation S” shall mean Regulation S under the Act.

 

“Revolving Credit Facility” shall mean the Amended and Restated Credit
Agreement, dated as of July 12, 2002, as amended, among the Company, PNC Bank,
National Association, and the parties listed on the signature pages thereto.

 

“Trust Indenture Act” shall mean the Trust Indenture Act of 1939, as amended,
and the rules and regulations of the Commission promulgated thereunder.

 

If the foregoing is in accordance with your understanding of our agreement,
please sign and return to us the enclosed duplicate hereof, whereupon this
letter and your acceptance shall represent a binding agreement among the
Company, the Guarantors and the several Initial Purchasers.

 

[–Signature pages to follow–]

 

-15-

--------------------------------------------------------------------------------

Very truly yours,

UNITED REFINING COMPANY

By:

 

/s/ John A. Catsimatidis

--------------------------------------------------------------------------------

Name:

 

John A. Catsimatidis

Title:

 

Chief Executive Officer

 

-16-

--------------------------------------------------------------------------------

COUNTRY FAIR, INC.

By:

 

/s/ James E. Murphy

--------------------------------------------------------------------------------

Name:

 

James E. Murphy

Title:

 

Vice President – Finance

By:

 

/s/ John R. Wagner

--------------------------------------------------------------------------------

Name:

 

John R. Wagner

Title:

 

Secretary

 

-17-

--------------------------------------------------------------------------------

KIANTONE PIPELINE CORPORATION

By:  

/s/ John A. Catsimatidis

--------------------------------------------------------------------------------

Name:  

John A. Catsimatidis

Title:  

Chief Executive Officer

 

-18-

--------------------------------------------------------------------------------

KIANTONE PIPELINE COMPANY

By:  

/s/ John A. Catsimatidis

--------------------------------------------------------------------------------

Name:  

John A. Catsimatidis

Title:  

President

 

-19-

--------------------------------------------------------------------------------

UNITED JET CENTER, INC.

By:  

/s/ John A. Catsimatidis

--------------------------------------------------------------------------------

Name:  

John A. Catsimatidis

Title:  

President

 

-20-

--------------------------------------------------------------------------------

UNITED REFINING COMPANY OF PENNSYLVANIA By:  

/s/ John A. Catsimatidis

--------------------------------------------------------------------------------

Name:  

John A. Catsimatidis

Title:  

Chief Executive Officer

 

-21-

--------------------------------------------------------------------------------

KWIK FILL CORPORATION

By:  

/s/ John A. Catsimatidis

--------------------------------------------------------------------------------

Name:  

John A. Catsimatidis

Title:  

President

 

-22-

--------------------------------------------------------------------------------

INDEPENDENT GASOLINE AND OIL COMPANY OF ROCHESTER, INC. By:  

/s/ John A. Catsimatidis

--------------------------------------------------------------------------------

Name:  

John A. Catsimatidis

Title:  

President

 

-23-

--------------------------------------------------------------------------------

BELL OIL CORP.

By:  

/s/ James E. Murphy

--------------------------------------------------------------------------------

Name:  

James E. Murphy

Title:  

Vice President – Finance

By:  

/s/ John R. Wagner

--------------------------------------------------------------------------------

Name:  

John R. Wagner

Title:  

Secretary

 

-24-

--------------------------------------------------------------------------------

PPC, INC.

By:  

/s/ John A. Catsimatidis

--------------------------------------------------------------------------------

Name:  

John A. Catsimatidis

Title:  

President

 

-25-

--------------------------------------------------------------------------------

SUPER TEST PETROLEUM, INC.

By:  

/s/ John A. Catsimatidis

--------------------------------------------------------------------------------

Name:  

John A. Catsimatidis

Title:  

President

 

-26-

--------------------------------------------------------------------------------

KWIK-FIL, INC.

By:  

/s/ John A. Catsimatidis

--------------------------------------------------------------------------------

Name:  

John A. Catsimatidis

Title:  

President

 

-27-

--------------------------------------------------------------------------------

VULCAN ASPHALT REFINING CORPORATION

By:  

/s/ John A. Catsimatidis

--------------------------------------------------------------------------------

Name:  

John A. Catsimatidis

Title:  

President

 

-28-

--------------------------------------------------------------------------------

CITIGROUP GLOBAL MARKETS INC.

By:  

/s/ P. Sharkey

--------------------------------------------------------------------------------

Name:  

Paul Sharkey

Title:  

Vice President

For itself and the other several

Initial Purchasers named in

Schedule I to the foregoing

Agreement.

 

-29-

--------------------------------------------------------------------------------

SCHEDULE I

 

Initial Purchasers

--------------------------------------------------------------------------------

 

Principal Amount of

Securities to be Purchased

--------------------------------------------------------------------------------

Citigroup Global Markets Inc.   $ 176,000,000 Goldman, Sachs & Co     20,000,000
PNC Capital Markets, Inc.     4,000,000    

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

                Total   $ 200,000,000

--------------------------------------------------------------------------------

SCHEDULE II

 

Subsidiaries

 

Company

--------------------------------------------------------------------------------

  

Jurisdiction of Incorporation

--------------------------------------------------------------------------------

Country Fair, Inc.

   Pennsylvania

Kiantone Pipeline Corporation

   New York

Kiantone Pipeline Company

   Pennsylvania

United Jet Center, Inc.

   Delaware

United Refining Company of Pennsylvania

   Pennsylvania

Kwik Fill Corporation

   Pennsylvania

Independent Gasoline and Oil Company of Rochester, Inc.

   New York

Bell Oil Corp.

   Michigan

PPC, Inc.

   Ohio

Super Test Petroleum, Inc.

   Michigan

Kwik-Fil, Inc.

   New York

Vulcan Asphalt Refining Corporation

   Delaware

Vulcan-Koch Asphalt Marketing, LLC*

   Delaware

United Refining Marketing, Inc.*

   Delaware

--------------------------------------------------------------------------------

* Not a Guarantor

 

--------------------------------------------------------------------------------

ANNEX A

 

Form of Kramer Levin Naftalis & Frankel LLP Opinion

 

[to be provided by Issuers’ Counsel]

 

--------------------------------------------------------------------------------

ANNEX B

 

Form of John R. Wagner Opinion

 

[to be provided by John R. Wagner]