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
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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,
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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).
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(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.
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(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.
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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
