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EXHIBIT 10.1
UNITED REFINING COMPANY
$200,000,000 10 3/4% SERIES A SENIOR NOTES DUE 2007
PURCHASE AGREEMENT
June 4, 1997
New York, New York
Dillon, Read & Co. Inc.
Bear, Stearns & Co. Inc.
c/o Dillon, Read & Co. Inc.
535 Madison Avenue
New York, New York 10022
Ladies and Gentlemen:
United Refining Company (the "Company"), a Pennsylvania
corporation, agrees with you as follows:
1. ISSUANCE OF NOTES. The Company and Kiantone Pipeline
Corporation, Kiantone Pipeline Company, United Jet Center, Inc., United Refining
Company of Pennsylvania, Kwik-Fil, Inc., Kwik Fill, Inc., Independent Gasoline
and Oil Company of Rochester, Inc., Bell Oil Corp., PPC, Inc., Super Test
Petroleum, Inc., and Vulcan Asphalt Refining Corporation (collectively, the
"Subsidiary Guarantors") proposes to issue and sell to Dillon, Read & Co. Inc.
and Bear, Stearns & Co. Inc. (the "Initial Purchasers") an aggregate of
$200,000,000 principal amount of 10 3/4% Series A Senior Notes due 2007 (the
"Senior Notes"). The Senior Notes will be issued pursuant to an indenture (the
"Indenture"), to be dated the Closing Date (as defined below), by and among the
Company, the Subsidiary Guarantors and IBJ Schroder Bank & Trust Company, as
trustee (the "Trustee"). The Company's obligations under the Senior Notes will
be unconditionally guaranteed on a senior basis by each of the Subsidiary
Guarantors pursuant to each of their guarantees (the "Subsidiary Guarantees").
All references herein to the Senior Notes include the related guarantees, unless
the context otherwise requires. Capitalized terms used but not otherwise defined
herein shall have the meanings given to such terms in the Indenture or the
Offering Memorandum (as defined below).
The Senior Notes will be offered and sold to the Initial
Purchasers pursuant to an exemption from the registration
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requirements under the Securities Act of 1933, as amended (the "Act"). The
Company has prepared a preliminary offering memorandum, dated May 16, 1997 (the
"Preliminary Offering Memorandum"), and a final offering memorandum, dated and
available for distribution on the date hereof (the "Offering Memorandum"),
relating to the Company, the Subsidiary Guarantors and the Senior Notes.
The Initial Purchasers have advised the Company that the
Initial Purchasers intend, as soon as it deems advisable after this Purchase
Agreement has been executed and delivered, to resell (the "Exempt Resales") the
Senior Notes purchased by the Initial Purchasers under this Purchase Agreement
(this "Agreement") in private sales exempt from registration under the Act on
the terms set forth in the Offering Memorandum, as amended or supplemented,
solely to (i) persons whom the Initial Purchasers reasonably believe to be
"qualified institutional buyers," as defined in Rule 144A under the Act
("QIBs"), (ii) institutional "accredited investors" (as defined in Rule
501(a)(1), (2), (3) or (7) under Regulation D of the Act) that make certain
representations and agreements (each, an "Institutional Accredited Investor")
and (iii) other eligible purchasers pursuant to offers and sales that occur
outside the U.S. within the meaning of Regulation S under the Act; the persons
specified in clauses (i)-(iii) are sometimes collectively referred to herein as
the "Eligible Purchasers."
Holders (including subsequent transferees) of the Senior Notes
will have the registration rights set forth in the registration rights agreement
(the "Registration Rights Agreement"), to be dated the Closing Date, in the form
of Exhibit A to this Agreement, for so long as such Senior Notes constitute
"Transfer Restricted Securities" (as defined in the Registration Rights
Agreement). Pursuant to the Registration Rights Agreement, the Company and the
Subsidiary Guarantors will agree to (A) file with the Securities and Exchange
Commission (the "Commission"), under the circumstances set forth in the
Registration Rights Agreement, (i) a registration statement under the Act (the
"Exchange Offer Registration Statement") relating to the 10 3/4% Series B Senior
Notes due 2007 (the "Series B Senior Notes" and, together with the Senior Notes,
the "Notes," which term includes the Subsidiary Guarantees related thereto) to
be offered in exchange for the Senior Notes (the "Exchange Offer") and/or (ii) a
shelf registration statement pursuant to Rule 415 under the Act (the "Shelf
Registration Statement" and, together with the Exchange Offer Registration
Statement, the "Registration Statements") relating to the resale by certain
holders of the Senior Notes, and (B) use their best efforts to
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cause such Registration Statements to be declared effective as soon as
practicable. This Agreement, the Escrow Agreement, the Notes, the Indenture and
the Registration Rights Agreement are hereinafter sometimes referred to
collectively as the "Operative Documents."
A portion of the net proceeds from the sale of the Senior
Notes will be deposited with IBJ Schroder Bank & Trust Company, as escrow agent
(the "Escrow Agent") as described in the Offering Memorandum and in accordance
with the Escrow Agreement and the Indenture.
Upon original issuance of the Senior Notes and until such time
as the same is no longer required under the applicable requirements of the Act,
the Senior Notes shall bear the following legend:
"THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY
ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE
U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND THE
SECURITY EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE
TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE
EXEMPTION THEREFROM. EACH PURCHASER OF THE SECURITY EVIDENCED HEREBY IS
HEREBY NOTIFIED THAT THE SELLER MAY BE RELYING ON THE EXEMPTION FROM
THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A
THEREUNDER. THE HOLDER OF THE SECURITY EVIDENCED HEREBY AGREES FOR THE
BENEFIT OF THE COMPANY THAT (A) SUCH SECURITY MAY BE RESOLD, PLEDGED OR
OTHERWISE TRANSFERRED ONLY (1) (a) TO A PERSON WHO THE SELLER
REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN
RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144A, (b) IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144 UNDER THE SECURITIES ACT, (c) OUTSIDE THE U.S.
TO A FOREIGN PERSON IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE
904 UNDER THE SECURITIES ACT OR (d) IN ACCORDANCE WITH ANOTHER
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND
BASED UPON AN OPINION OF COUNSEL IF THE COMPANY SO REQUESTS), (2) TO
THE COMPANY OR (3) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT AND, IN EACH CASE, IN ACCORDANCE WITH ANY
APPLICABLE SECURITIES LAWS OF ANY STATE OF THE U.S. OR ANY OTHER
APPLICABLE JURISDICTION AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT
HOLDER IS REQUIRED
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TO, NOTIFY ANY PURCHASER FROM IT OF THE SECURITY EVIDENCED HEREBY OF
THE RESALE RESTRICTIONS SET FORTH IN (A) ABOVE.
In connection with the offering of the Notes hereby, the
Company will enter into a $35 million senior secured revolving credit facility
(the "New Bank Credit Facility").
2. AGREEMENTS TO SELL AND PURCHASE. On the basis of the
representations, warranties and covenants contained in this Agreement, and
subject to the terms and conditions contained in this Agreement, the Company
agrees to issue and sell to the Initial Purchasers, and the Initial Purchasers
agree to purchase from the Company, the aggregate principal amount of the Senior
Notes. The purchase price for the Senior Notes shall be 10 3/4% of their
principal amount. The Company shall cause each Subsidiary Guarantor to
unconditionally guarantee on a senior basis by such Subsidiary Guarantor the
Company's obligations under the Notes.
3. DELIVERY AND PAYMENT. Delivery of, and payment of the
purchase price for, the Senior Notes shall be made at 9:00 a.m., New York City
time, on the third business day following the date of this Agreement (the
"Closing Date") at the offices of Cahill Gordon & Reindel, LLP, 80 Pine Street,
New York, New York 10019. The Closing Date and the location of delivery of and
the form of payment for the Senior Notes may be varied by mutual agreement
between the Initial Purchasers and the Company.
One or more of the Senior Notes in global form or certificated
form, as the case may be, registered in such names as the Initial Purchasers may
request upon at least one business day's notice prior to the Closing Date,
having an aggregate principal amount corresponding to the aggregate principal
amount of the Senior Notes sold pursuant to Exempt Resales to QIBs and
Institutional Accredited Investors, in the case of the Notes in global form, and
to other Eligible Purchasers, in the case of Notes in certificated form sold
pursuant to Regulation S, shall be delivered by the Company to the Initial
Purchasers (or as the Initial Purchasers direct), against payment by the Initial
Purchasers of the purchase price therefor by means of transfer of immediately
available funds (including book transfer) reasonably acceptable to the Initial
Purchasers and the Company to the order of the Company. The Senior Notes in
global form shall be made available to the Initial Purchasers for inspection not
later than 9:30 a.m. on the business day immediately preceding the Closing Date.
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4. AGREEMENTS OF THE ISSUERS. The Company and the Subsidiary
Guarantors covenant and agree with the Initial Purchasers as follows:
(a) To furnish the Initial Purchasers and those persons
identified by the Initial Purchasers, without charge, with as many
copies of the Preliminary Offering Memorandum and the Offering
Memorandum, and any amendments or supplements thereto, as the Initial
Purchasers may reasonably request for purposes contemplated by the Act.
The Company consents to the use of the Preliminary Offering Memorandum
and the Offering Memorandum, and any amendments and supplements thereto
required pursuant to this Agreement, by the Initial Purchasers in
connection with Exempt Resales that are in compliance with Section 5(b)
of this Agreement.
(b) Not to amend or supplement the Offering Memorandum prior
to the Closing Date unless the Initial Purchasers shall previously have
been advised of, and shall not have objected to (any such objection not
to be unreasonable), such amendment or supplement within a reasonable
time, but in any event not longer than five days after being furnished
with a copy of such amendment or supplement. The Company shall promptly
prepare, upon the Initial Purchasers' reasonable request, any amendment
or supplement to the Offering Memorandum that may be necessary or
advisable in connection with Exempt Resales.
(c) If, during the time that an Offering Memorandum is
required to be delivered in connection with any Exempt Resales or
market-making transactions after the date of this Agreement and prior
to the consummation of the Exchange Offer, any event shall occur that,
in the judgment of the Company or in the judgment of counsel to the
Initial Purchasers, makes any statement of a material fact in the
Offering Memorandum untrue or that requires the making of any additions
to or changes in the Offering Memorandum in order to make the
statements in the Offering Memorandum, in the light of the
circumstances under which they are made, not misleading, or if it is
necessary to amend or supplement the Offering Memorandum to comply with
all applicable laws, the Company shall promptly notify the Initial
Purchasers of such event and prepare an appropriate amendment or
supplement to the Offering Memorandum so that (i) the statements in the
Offering Memorandum as amended or supplemented will, in the light of
the circumstances at the time that the Offering Memorandum is deliv-
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ered to prospective Eligible Purchasers, not be misleading and (ii) the
Offering Memorandum will comply with applicable law.
(d) To cooperate with the Initial Purchasers and counsel to
the Initial Purchasers in connection with the qualification or
registration of the Senior Notes under the securities or Blue Sky laws
of such jurisdictions as the Initial Purchasers may request and to
continue such qualification in effect so long as required for the
Exempt Resales. Notwithstanding the foregoing, the Company shall not be
required to qualify as foreign corporations in any jurisdiction in
which it is not so qualified or to file a general consent to service of
process in any such jurisdiction or subject itself to taxation in
excess of a nominal dollar amount in any such jurisdiction where it is
not then so subject.
(e) Whether or not the transactions contemplated by this
Agreement are consummated or this Agreement becomes effective or is
terminated, to pay all costs, expenses, fees, disbursements (including
fees, expenses and disbursements of counsel) and stamp, documentary or
similar taxes imposed by the U.S. incident to and in connection with:
(i) the preparation, printing, filing and distribution of the
Preliminary Offering Memorandum and the Offering Memorandum (including,
without limitation, financial statements) and all amendments and
supplements thereto, (ii) the preparation and delivery of the Operative
Documents and all other agreements, memoranda, correspondence and
documents prepared and delivered in connection with this Agreement and
with the Exempt Resales, (iii) the issuance, transfer and delivery by
the Company and the Subsidiary Guarantors of the Senior Notes and the
Subsidiary Guarantees, respectively, to the Initial Purchasers, (iv)
the qualification or registration of the Notes for offer and sale under
the securities or Blue Sky laws of the several states (including,
without limitation, the cost of printing and mailing a preliminary and
final Blue Sky memorandum and the fees and disbursements of counsel to
the Initial Purchasers relating thereto), (v) the furnishing of such
copies of the Preliminary Offering Memorandum and the Offering
Memorandum, and all amendments and supplements thereto, as may be
reasonably requested for use in connection with Exempt Resales, (vi)
the preparation of certificates for the Notes (including, without
limitation, printing and engraving thereof), (vii) the application for
quotation of the Notes in the National Asso-
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ciation of Securities Dealers, Inc. ("NASD") Automated Quotation - System PORTAL
("PORTAL"), including, but not limited to, all listing fees and expenses, (viii)
the approval of the Notes by The Depository Trust Company ("DTC") for
"book-entry" transfer, (ix) the rating of the Notes by rating agencies, (x) the
fees and expenses of the Trustee and Escrow Agent and its counsel and (xi) the
performance by the Company and the Subsidiary Guarantors of their other
obligations under the Operative Documents, including, but not limited to, the
fees, disbursements and expenses of the Company's counsel and accountants.
(f) To use the proceeds from the sale of the Senior Notes in
the manner described in the Offering Memorandum under the caption "Use
of Proceeds."
(g) To do and perform all things required to be done and
performed under this Agreement by it prior to or after the Closing Date
and to satisfy all conditions precedent on its part to the delivery of
the Senior Notes.
(h) Not to sell, offer for sale or solicit offers to buy or
otherwise negotiate in respect of any security (as defined in the Act)
that would be integrated with the sale of the Senior Notes in a manner
that would require the registration under the Act of the sale of the
Senior Notes to the Initial Purchasers or any Eligible Purchasers.
(i) From and after the Closing Date, for so long as any of the
Notes remain outstanding and are "restricted securities" within the
meaning of Rule 144(a)(3) under the Act and during any period in which
the Company is not subject to Section 13 or 15(d) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), to make
available the information required by Rule 144A(d)(4) under the Act to
(i) any Holder or beneficial owner of Notes in connection with any sale
of such Notes and (ii) any prospective purchaser of such Notes from any
such Holder or beneficial owner designated by the Holder or beneficial
owner.
(j) To comply with all of its agreements set forth in the
Registration Rights Agreement and all agreements set forth in the
representations letter of the Company to DTC relating to the approval
of the Notes by DTC for "book-entry" transfer.
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(k) To use its best efforts to effect the inclusion of the
Senior Notes in PORTAL and to obtain approval of the Notes by DTC for
"book-entry" transfer.
(l) From and after the Closing Date, for so long as any of the
Notes remain outstanding, to deliver without charge to the Initial
Purchasers, promptly upon their becoming available, copies of all
reports and other communications (financial or otherwise) that the
Company shall mail or otherwise make available to its securityholders
and all reports or financial statements furnished to or filed by the
Company and each of the Subsidiary Guarantors with the Commission or
any national securities exchange.
(m) Prior to the Closing Date, to furnish to the Initial
Purchasers, as soon as they have been prepared by the Company and the
Subsidiary Guarantors, a copy of any regularly prepared internal
financial statements of the Company and each of the Subsidiary
Guarantors for any period subsequent to the period covered by the
financial statements appearing in the Offering Memorandum and prior to
the Closing Date.
(n) Not to distribute prior to the Closing Date any offering
material in connection with the offer and sale of the Senior Notes
other than the Preliminary Offering Memorandum and the Offering
Memorandum.
5. REPRESENTATIONS AND WARRANTIES. (a) Each of the Company and
the Subsidiary Guarantors represent and warrant to the Initial Purchasers that:
(i) Each of the Preliminary Offering Memorandum and the
Offering Memorandum has been prepared in connection with the Exempt
Resales. Neither the Preliminary Offering Memorandum nor the Offering
Memorandum, or any supplement or amendment thereto, contains any untrue
statement of a material fact or omits to state any material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided,
however, that the Company makes no representation or warranty with
respect to information contained in or omitted from the Preliminary
Offering Memorandum or the Offering Memorandum, as supplemented or
amended, in reliance upon and in conformity with information furnished
to the Company in writing by the Initial Purchasers expressly for
inclusion in the Preliminary Offering Memorandum or the Offering
Memorandum or any sup-
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plement or amendment thereto. No order asserting that any of the
transactions contemplated by this Agreement are subject to the
registration requirements of the Act has been issued or threatened.
(ii) There are no securities of either the Company or any of
the Subsidiary Guarantors that are listed on a national securities
exchange registered under Section 6 of the Exchange Act or that are
quoted in a United States automated interdealer quotation system.
(iii) John A. Catsimatidis beneficially owns 100% of the
outstanding capital stock and other securities evidencing equity
ownership of the Company and the Company owns 100% of the outstanding
capital stock and other securities evidencing equity ownership of the
Subsidiary Guarantors, free and clear of any pledge, fiduciary
transfer, security interest, claim, lien, limitation on voting rights
or encumbrance, and all such securities will have been duly authorized
and validly issued, fully paid and nonassessable and will not have been
issued in violation of, or subject to, any preemptive or similar
rights. There will not be any outstanding rights, warrants or options
to acquire, or instruments convertible into or exchangeable for, any
shares of capital stock or other equity interest of any Subsidiary
Guarantor.
(iv) The Company and each of the Subsidiary Guarantors has
been duly incorporated, is validly existing as a corporation in good
standing under the laws of its respective jurisdiction of incorporation
and has all requisite corporate power and authority, and all necessary
authorizations, approvals, orders, licenses, certificates and permits
of and from regulatory or governmental officials, bodies and tribunals,
except where the failure to obtain such authorizations, approvals,
orders, licenses, certificates and permits would not result in a
Material Adverse Effect, to (a) carry on its business as it is
currently being conducted and as described in the Offering Memorandum
and (b) own, lease, license and operate its respective properties in
accordance with its business as currently conducted. The Company and
each of the Subsidiary Guarantors is duly qualified and in good
standing as a foreign corporation authorized to do business in each
jurisdiction in which the nature of its business or its ownership or
leasing of property requires such qualification, except where the
failure to be so qualified would not, either individually or in the
aggregate, result in a Material Ad-
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verse Effect. A "Material Adverse Effect" means any material adverse
effect on the business, condition (financial or other), properties,
assets, liabilities, results of operations or prospects of the Company
and the Subsidiary Guarantors taken as a whole.
(v) The Company and each of the Subsidiary Guarantors has
all requisite corporate power and authority to execute, deliver and
perform all of its obligations under the Operative Documents and to
consummate the transactions contemplated by the Operative Documents
and, without limitation, the Company has all requisite corporate power
and authority to issue, sell and deliver the Notes and each of the
Subsidiary Guarantors has all requisite corporate power and authority
to execute, deliver and perform all of its obligations under the
Subsidiary Guarantees.
(vi) This Agreement has been duly and validly authorized,
executed and delivered by the Company and each of the Subsidiary
Guarantors.
(vii) The Indenture has been, or upon the Closing Date will
be, duly and validly authorized by the Company and each of the
Subsidiary Guarantors and, when duly executed and delivered by the
Company and each of the Subsidiary Guarantors, will be a legal, valid
and binding obligation of each of the Company and the Subsidiary
Guarantors, enforceable against each of them in accordance with its
terms, except that enforceability of the Indenture may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the enforcement of creditors' rights generally and by general
principles of equity and the discretion of the court before which any
proceedings therefor may be brought. The Indenture, when executed and
delivered, will conform in all material respects to the description
thereof in the Preliminary Offering Memorandum and the Offering
Memorandum.
(viii) The Senior Notes have been duly and validly authorized
for issuance and sale to the Initial Purchasers by the Company and,
when issued, authenticated and delivered by the Company against payment
by the Initial Purchasers in accordance with the terms of this
Agreement and the Indenture, the Senior Notes will be legal, valid and
binding obligations of the Company, entitled to the benefits of the
Indenture and enforceable against the Company in accordance with their
terms, except that enforceability of the Senior Notes may be limited by
bankruptcy, insol-
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vency, reorganization, moratorium or similar laws affecting the
enforcement of creditors' rights generally and by general principles of
equity and the discretion of the court before which any proceedings
therefor may be brought. The Senior Notes, when issued, authenticated
and delivered, will conform in all material respects to the description
thereof in the Preliminary Offering Memorandum and the Offering
Memorandum.
(ix) The Series B Senior Notes have been duly and validly
authorized for issuance by the Company and, when issued, authenticated
and delivered by the Company in accordance with the terms of the
Exchange Offer and the Indenture, the Series B Senior Notes will be
legal, valid and binding obligations of the Company, entitled to the
benefits of the Indenture and enforceable against the Company in
accordance with their terms, except that enforceability of the Series B
Senior Notes may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting the enforcement of creditors'
rights generally and by general principles of equity and the discretion
of the court before which any proceedings therefor may be brought. The
Series B Senior Notes, when issued, authenticated and delivered, will
conform in all material respects to the description thereof in the
Preliminary Offering Memorandum and the Offering Memorandum.
(x) The Subsidiary Guarantees will be duly and validly
authorized by the Subsidiary Guarantors and, when the Notes are
executed and delivered in accordance with the terms of the Indenture
and the Registration Rights Agreement, will be legal, valid and binding
obligations of the Subsidiary Guarantors, enforceable against each of
them in accordance with their terms, except that enforceability of the
Subsidiary Guarantees may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors' rights generally and by general principles of equity and the
discretion of the court before which any proceedings therefor may be
brought. The Subsidiary Guarantees, when executed and delivered, will
conform in all material respects to the description thereof in the
Preliminary Offering Memorandum and the Offering Memorandum.
(xi) The Registration Rights Agreement has been, or upon the
Closing Date, will be, duly and validly authorized, executed and
delivered by the Company and each of the Subsidiary Guarantors and is a
legal, valid and bind-
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ing obligation of the Company and each of the Subsidiary Guarantors,
enforceable against each of them in accordance with its terms, except
that (a) enforceability of the Registration Rights Agreement may be
limited by bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting the enforcement of creditors' rights generally
and by general principles of equity and the discretion of the court
before which any proceedings therefor may be brought and (b) any rights
to indemnity or contribution thereunder may be limited by federal and
state securities laws and public policy considerations. The
Registration Rights Agreement will conform in all material respects to
the description thereof in the Preliminary Offering Memorandum and the
Offering Memorandum.
(xii) None of the Company or the Subsidiary Guarantors is (A)
in violation of its charter, constitutive documents or bylaws or (B) in
default (or, with notice or lapse of time or both, would be in default)
in the performance or observance of any obligation, agreement, covenant
or condition contained in any bond, debenture, note, indenture,
mortgage, deed of trust, loan agreement, note, lease, license,
franchise agreement, authorization, permit, certificate or other
agreement or instrument to which any of them is a party or by which any
of them is bound or to which any of their assets or properties is
subject (collectively, "Agreements"), or (C) in violation of any law,
statute, rule, regulation, judgment, order or decree of any domestic or
foreign court with jurisdiction over any of them or any of their assets
or properties or other governmental or regulatory authority, agency or
other body, that, in the case of clauses (B) and (C) above, would
result in a Material Adverse Effect. There exists no condition that,
with notice, the passage of time or otherwise, would constitute a
default by the Company or any of the Subsidiary Guarantors under any
such document or instrument or result in the imposition of any penalty
or the acceleration of any indebtedness, other than penalties, defaults
or conditions that would not result in a Material Adverse Effect.
(xiii) The New Bank Credit Facility has been duly and validly
authorized, and when executed and delivered by the Company and Kiantone
Pipeline Corporation and United Refining Company of Pennsylvania, will
constitute the legal, valid and binding obligations of the Company and
Kiantone Pipeline Corporation and United Refining Company of
Pennsylvania, as applicable, enforceable against the Company
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and Kiantone Pipeline Corporation and United Refining Company of
Pennsylvania, as applicable, in accordance with their terms, except
that enforceability of the New Bank Credit Facility may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the enforceability of creditors' rights generally and by
general principles of equity and the discretion of the court before
which any proceedings therefor may be brought. The New Bank Credit
Facility conforms in all material respects to the description thereof
in the Preliminary Offering Memorandum and the Offering Memorandum.
(xiv) The Escrow Agreement has been duly and validly
authorized, executed and delivered by the Company, and constitutes the
legal, valid and binding obligations of the Company enforceable against
the Company in accordance with their terms except that enforceability
of the Escrow Agreement may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforceability
of creditors' rights generally and by general principles of equity and
the discretion of the court before which any proceedings therefor may
be brought.
(xv) The execution, delivery or performance by the Company
and the Subsidiary Guarantors (as applicable) of this Agreement and the
other Operative Documents to which they are a party does not or will
not violate, conflict with or constitute a breach of any of the terms
or provisions of, or a default under (or an event that with notice or
the lapse of time, or both, would constitute a default), or require
consent under, or result in the creation or imposition of a lien,
charge or encumbrance on any property or assets of the Company or any
of the Subsidiary Guarantors or an acceleration of any indebtedness of
the Company or any of the Subsidiary Guarantors pursuant to, (i) the
charter, constitutive documents or bylaws of the Company or any of the
Subsidiary Guarantors, (ii) any Agreement except for the Existing
Facility as defined and described in the Offering Memorandum under the
caption "Description of Certain Indebtedness," (iii) any law, statute,
rule or regulation applicable to the Company or any of the Subsidiary
Guarantors or their assets or properties or (iv) any judgment, order or
decree of any domestic or foreign court or governmental agency or
authority having jurisdiction over the Company or any of the Subsidiary
Guarantors or their assets or properties that, in the case of clauses
(ii), (iii) and (iv) above, would result in a Material Adverse Effect.
Assuming the accu-
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racy of the representations and warranties of the Initial Purchasers in
Section 5(b) of this Agreement, no consent, approval, authorization or
order of, or filing, registration, qualification, license or permit of
or with, any court or governmental agency, body or administrative
agency, domestic or foreign, is required to be obtained or made by the
Company for the execution, delivery and performance by the Company and
the Subsidiary Guarantors of this Agreement or any of the other
Operative Documents, except (i) such as have been or will be obtained
or made prior to Closing, (ii) registration of the Notes under the Act
pursuant to the Registration Rights Agreement or (iii) such as may be
required by the NASD. No consents or waivers from any other person or
entity are required for the execution, delivery and performance of this
Agreement or any of the other Operative Documents, the execution,
delivery and performance of the New Bank Credit Facility or any of the
transactions contemplated thereby.
(xvi) The Company has delivered to the Initial Purchasers true
and correct executed copies of the New Bank Credit Facility and there
have been no amendments, alterations or modifications thereto or
waivers of any of the provisions thereof. The representations and
warranties of the Company set forth in the New Bank Credit Facility
will be true and correct as of the Closing Date (except to the extent
that any such representation or warranty was expressly made as of any
other date, in which case such representation and warranty was true and
correct as of such date).
(xvii) There is (i) no action, suit or proceeding before or by
any court, arbitrator or governmental agency, body or official,
domestic or foreign, now pending or, to the knowledge of the Company or
the Subsidiary Guarantors, threatened or contemplated, to which the
Company or any of the Subsidiary Guarantors is or may be a party or to
which the business, assets or property of such person is or may be
subject, (ii) no statute, rule, regulation or order that has been
enacted, adopted or issued or, to the knowledge of the Company or the
Subsidiary Guarantors, that has been proposed by any governmental body
or agency, domestic or foreign, (iii) no injunction, restraining order
or order of any nature by a federal or state court or foreign court of
competent jurisdiction to which the Company or any of the Subsidiary
Guarantors is or may be subject that (x) in the case of clause (i)
above, if determined adversely to the Company or the Subsidiary
Guarantors, would
15
-15-
be reasonably likely to, either individually or in the aggregate, (1)
result in a Material Adverse Effect, or (2) interfere with or adversely
affect the issuance of the Notes or the Subsidiary Guarantees in any
jurisdiction or adversely affect the consummation of the transactions
contemplated by any of the Operative Documents and (y) in the case of
clauses (ii) and (iii) above, would, either individually or in the
aggregate, (1) result in a Material Adverse Effect, or (2) interfere
with or adversely affect the issuance of the Notes or the Subsidiary
Guarantees in any jurisdiction or adversely affect the consummation of
the transactions contemplated by any of the Operative Documents. Every
request of any securities authority or agency of any jurisdiction for
additional information with respect to Notes that has been received by
the Company, the Subsidiary Guarantors or their counsel prior to the
date hereof has been, or will prior to the Closing Date be, complied
with in all material respects.
(xviii) No labor disturbance by the employees of the Company or
any of the Subsidiary Guarantors exists or, to the actual knowledge of
the Company or the Subsidiary Guarantors, is imminent, that might
reasonably be expected to have a Material Adverse Effect; the Company
and the Subsidiary Guarantors are in compliance in all respects with,
as applicable and except where a failure to so comply would not have a
Material Adverse Effect, all presently applicable provisions of the
Employee Retirement Income Security Act of 1974, as amended, including
the regulations and published interpretations thereunder ("ERISA"); no
"reportable event" (as defined in ERISA) has occurred with respect to
any "pension plan" (as defined in ERISA) for which the Company or the
Subsidiary Guarantors would have any liability; none of the Company or
the Subsidiary Guarantors has incurred or expects to incur liability
under (i) Title IV of ERISA with respect to termination of, or
withdrawal from, any "pension plan" or (ii) Sections 412 or 4971 of the
Internal Revenue Code of 1986, as amended, including the regulations
and published interpretations thereunder (the "Code"); and each
"pension plan" that is maintained or contributed to by the Company or
the Subsidiary Guarantors that is intended to be qualified under
Section 401(a) of the Code is so qualified and nothing has occurred,
whether by action or by failure to act, that would cause the loss of
such qualification.
(xix) Except as set forth in the Offering Memorandum, the
Company and each of the Subsidiary Guarantors (i) is
16
-16-
in compliance with, or not subject to costs or liabilities under, all
local, state, provincial, federal and foreign laws, regulations, rules
of common law, orders and decrees, as in effect as of the date hereof,
and any present judgments and injunctions issued or promulgated
thereunder relating to pollution or protection of public and employee
health and safety and the environment applicable to it or its business
or operations or ownership or use of its property ("Environmental
Laws"), other than noncompliance or such costs or liabilities that
would not result in a Material Adverse Effect, and (ii) possesses all
permits, licenses or other approvals required under applicable
Environmental Laws, other than permits, licenses or approvals the lack
of which would not result in a Material Adverse Effect. All currently
pending and, to their knowledge, threatened proceedings, notices of
violation, demands, notices of potential responsibility or liability,
suits and existing environmental conditions with respect to which the
Company or the Subsidiary Guarantors could reasonably be expected to
have any liability are fully and accurately described in all material
respects in the Offering Memorandum except as would not have a Material
Adverse Effect.
(xx) The Company and each of the Subsidiary Guarantors has
(i) good and marketable title to all of the properties and assets
described in the Offering Memorandum as owned by it and good and
marketable title to the leasehold estates in the real and personal
property described in the Offering Memorandum as leased by it, free and
clear of all Liens (as defined in the Indenture), except for Liens
described in the Offering Memorandum, Liens permitted under the
Indenture and such Liens as would not have a Material Adverse Effect,
(ii) all licenses, certificates, permits, authorizations, approvals,
franchises and other rights from, and has made all declarations and
filings with, all federal, state, local and foreign authorities, all
self-regulatory authorities and all courts and other tribunals (each,
an "Authorization") necessary to engage in the business conducted by it
in the manner described in the Offering Memorandum, except where
failure to hold such Authorizations would not have a Material Adverse
Effect, and (iii) no reason to believe that any governmental body or
agency, domestic or foreign, is considering limiting, suspending or
revoking any such Authorization, other than revocations that would not
result in a Material Adverse Effect. Except where the failure to be in
full force and effect would not have a Material Adverse Effect, all
such
17
-17-
Authorizations are valid and in full force and effect and the Company
and each of the Subsidiary Guarantors is in compliance in all material
respects with the terms and conditions of all such Authorizations and
with the rules and regulations of the regulatory authorities having
jurisdiction with respect to such Authorizations. All leases to which
the Company or any of the Subsidiary Guarantors is a party are valid
and binding, except as such enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws now
or hereafter affecting the enforcement of creditors' rights generally
and by general principles of equity and the discretion of the court
before which any proceedings therefor may be brought and no default has
occurred and is continuing thereunder, other than defaults that would
not result in a Material Adverse Effect.
(xxi) The Company and each of the Subsidiary Guarantors owns,
possesses or has the right to employ all patents, patent rights,
licenses, inventions, copyrights, know-how (including trade secrets and
other unpatented and/or unpatentable proprietary or confidential
information, systems or procedures), trademarks, service marks and
trade names (collectively, the "Intellectual Property") necessary to
conduct the businesses operated by it as described in the Offering
Memorandum, other than such Intellectual Property the failure to own,
possess or have the right to employ would not result in a Material
Adverse Effect. None of the Company or the Subsidiary Guarantors has
received any notice of infringement of or conflict with (and neither
knows of any such infringement or a conflict with) asserted rights of
others with respect to any of the foregoing that, if such assertion of
infringement or conflict were sustained, would have a Material Adverse
Effect. The use of the Intellectual Property in connection with the
business and operations of the Company and the Subsidiary Guarantors
does not infringe on the rights of any person.
(xxii) All tax returns required to be filed by the Company and
each of the Subsidiary Guarantors have been filed in all jurisdictions
where such returns are required to be filed; and all taxes, including
withholding taxes, penalties and interest, assessments, fees and other
charges due or claimed to be due from such entities or that are due and
payable have been paid, other than those being contested in good faith
and for which reserves have been provided in accordance with generally
accepted accounting
18
-18-
principles or those currently payable without penalty or interest,
except where the failure to make any such filing or payment would not
have a Material Adverse Effect. To the knowledge of the Company and
each of the Subsidiary Guarantors, there are no material proposed
additional tax assessments against any of them or their assets or
property.
(xxiii) None of the Company or the Subsidiary Guarantors is an
"investment company" or a company "controlled" by an "investment
company" within the meaning of the Investment Company Act of 1940, as
amended (the "Investment Company Act"), or analogous foreign laws and
regulations.
(xxiv) Except with respect to the Notes, there are no holders
of securities of the Company or any of the Subsidiary Guarantors who
have the right to request or demand that the Company or any of the
Subsidiary Guarantors register under the Act or analogous foreign laws
and regulations any of such securities held by any such holders.
(xxv) The Company and each of the Subsidiary Guarantors
maintains a system of internal accounting controls sufficient to
provide reasonable assurance that: (A) transactions are executed in
accordance with management's general or specific authorizations; (B)
transactions are recorded as necessary to permit preparation of its
financial statements in conformity with United States generally
accepted accounting principles and to maintain accountability for
assets; (C) access to assets is permitted only in accordance with
management's general or specific authorization; and (D) the recorded
accountability for its assets is compared with the existing assets at
reasonable intervals and appropriate action is taken with respect to
any differences.
(xxvi) The Company and each of the Subsidiary Guarantors
maintains insurance covering its properties, assets, operations,
personnel and businesses, and such insurance is of such type and in
such amounts in accordance with customary industry practice to protect
the Company and the Subsidiary Guarantors and their businesses. None of
the Company or the Subsidiary Guarantors has received notice from any
insurer or agent of such insurer that any material capital improvements
or other material expenditures will have to be made in order to
continue any insurance maintained by any of them other than capital
improvements
19
-19-
and other expenditures that have been budgeted by the Company or the
Subsidiary Guarantors, as the case may be.
(xxvii) None of the Company, the Subsidiary Guarantors or their
Affiliates (as defined in Rule 501(b) of Regulation D under the Act)
has (A) taken, directly or indirectly, any action designed to, or that
might reasonably be expected to, cause or result in stabilization or
manipulation of the price of any security of the Company to facilitate
the sale or resale of the Senior Notes or (B) since the date of the
Preliminary Offering Memorandum (x) sold, bid for, purchased or paid
any person any compensation for soliciting purchases of the Senior
Notes in a manner that would require registration of the Senior Notes
under the Act or (y) paid or agreed to pay to any person any
compensation for soliciting another to purchase any other securities of
the Company or any of the Subsidiary Guarantors in a manner that would
require registration of the Senior Notes under the Act.
(xxviii) No registration under the Act of the Senior Notes is
required for the sale of the Senior Notes to the Initial Purchasers as
contemplated by this Agreement or for the Exempt Resales, assuming in
each case that (A) the purchasers who buy the Senior Notes in the
Exempt Resales are either QIBs or Accredited Investors and (B) the
accuracy of and compliance with the Initial Purchasers'
representations, warranties and covenants contained in Section 5(b) of
this Agreement. No form of general solicitation or general advertising
(prohibited by the Act in connection with offers or sales such as the
Exempt Resales) was used by the Company, any of the Subsidiary
Guarantors or any of their representatives (provided that no
representation is being made in this paragraph (xxviii) with respect to
the Initial Purchasers) in connection with the offer and sale of any of
the Senior Notes or in connection with Exempt Resales, including, but
not limited to, articles, notices or other communications published in
any newspaper, magazine or similar medium or broadcast over television
or radio, or any seminar or meeting whose attendees have been invited
by any general solicitation or general advertising.
(xxix) The execution and delivery of this Agreement, the other
Operative Documents and the sale of the Notes and Subsidiary Guarantees
to be purchased by the QIBs and the Accredited Investors will not
involve any prohibited transaction within the meaning of Section 406(a)
of ERISA
20
-20-
or Section 4975(c)(1)(A)-(D) of the Code. The representation made by
the Company and each of the Subsidiary Guarantors in the preceding
sentence is made in reliance upon and subject to the accuracy of, and
compliance with, the representations and covenants made or deemed made
by the QIBs and the Accredited Investors as set forth in the Offering
Memorandum under the caption "Transfer Restrictions."
(xxx) Each of the Preliminary Offering Memorandum and the
Offering Memorandum, as of its date, and each amendment or supplement
thereto, as of its date, contains the information specified in, and
meets the requirements of, Rule 144A(d)(4) under the Act.
(xxxi) As of February 28, 1997, neither the Company nor any of
the Subsidiary Guarantors had any material liabilities or obligations,
direct or contingent, that were not set forth in the Company's
consolidated balance sheet as February 28, 1997, or in the notes
thereto. Since February 28, 1997 and up to the Closing Date, except as
set forth in the Offering Memorandum, (a) none of the Company or the
Subsidiary Guarantors has (1) incurred any liabilities or obligations,
direct or contingent, that are not in the ordinary course of business
that would have a Material Adverse Effect or (2) entered into any
material transaction not in the ordinary course of business, and (b)
there has not been any event or development in respect of the business,
development or financial condition of the Company that would, either
individually or in the aggregate, result in a Material Adverse Effect.
(xxxii) Neither the Company nor any of the Subsidiary Guarantors
(nor any agent thereof acting its behalf has taken, and none of them
will take, any action that might cause this Agreement or the issuance
or sale of the Notes to violate Regulation G (12 C.F.R. Part 207),
Regulation T (12 C.F.R. Part 220), Regulation U (12 C.F.R. Part 221) or
Regulation X (12 C.F.R. Part 224) of the Board of Governors of the
Federal Reserve System or analogous foreign laws and regulations, in
each case as in effect, or as the same may hereafter be in effect, on
the Closing Date.
(xxxiii) The accountants who have certified or shall certify the
financial statements included or to be included as part of the Offering
Memorandum are independent accountants within the meaning of the Act.
The historical financial statements of the Company comply as to form in
21
-21-
all material respects with the requirements applicable to registration
statements on Form S-1 under the Act and present fairly in all material
respects the consolidated financial position and results of operations
of the Company at the respective dates and for the respective periods
indicated. Such financial statements have been prepared in accordance
with United States generally accepted accounting principles applied on
a consistent basis throughout the periods presented (except as
disclosed in the Offering Memorandum) and comply as to form with the
rules and regulations promulgated under the Act. The pro forma
financial statements included in the Offering Memorandum have been
prepared on a basis consistent with such historical statements, except
for the pro forma adjustments specified therein, and give effect to
assumptions made on a reasonable basis and present fairly in all
material respects the historical and proposed transactions contemplated
by the Offering Memorandum, this Agreement and the other Operative
Documents. The other financial and statistical information and data
included in the Offering Memorandum, historical and pro forma, are
accurately presented in all material respects and prepared on a basis
consistent with the financial statements and the books and records of
the Company and the Subsidiary Guarantors.
(xxxiv) None of the Company or the Subsidiary Guarantors (A) is
"insolvent" as that term is defined in Section 101(32) of the United
States Bankruptcy Code (the "Bankruptcy Code") (11 U.S.C. Section
101(32)), Section 2 of the Uniform Fraudulent Transfer Act ("UFTA") or
Section 2 of the Uniform Fraudulent Conveyance Act ("UFCA"), (B) has
"unreasonably small capital" as that term is used in Section
548(a)(2)(ii) of the Bankruptcy Code or Section 5 of the UFCA, (C) is
engaged or about to engage in a business or transaction for which its
remaining property is "unreasonably small" in relation to the business
or transaction as that term is used in Section 4 of the UFTA or (D) is
unable to pay its debts as they mature or become due, within the
meaning of Section 548(a)(2)(B)(iii) of the Bankruptcy Code, Section 4
of the UFTA and Section 6 of the UFCA. The Company and each of the
Subsidiary Guarantors now owns assets having a value both at "fair
valuation" and at "present fair saleable value" greater than the amount
required to pay its "debts" as such terms are used in Section 2 of the
UFTA and Section 2 of the UFCA. None of the Company or the Subsidiary
Guarantors will be rendered insolvent by the execution and delivery of
any of
22
-22-
the Operative Documents or the New Bank Credit Facility or by the
transactions contemplated hereunder or thereunder.
(xxxv) Except as described in the section entitled "Certain
Relationships and Related Transactions" in the Offering Memorandum,
there are no contracts, agreements or understandings between the
Company or any of the Subsidiary Guarantors and any other person other
than the Initial Purchasers that would give rise to a valid claim
against the Company, the Subsidiary Guarantors or the Initial
Purchasers for a brokerage commission, finder's fee or like payment in
connection with the issuance, purchase and sale of the Notes.
(xxxvi) The Company has the authorized, issued and outstanding
capitalization set forth in the Offering Memorandum under the caption
"Capitalization"; all of the outstanding capital stock of the Company
has been duly authorized and validly issued, is or will be on the
Closing Date fully paid and nonassessable and was not issued in
violation of any preemptive or similar rights.
(xxxvii) The statistical and market-related data included in the
Offering Memorandum are based on or derived from sources that the
Company believes to be reliable and accurate in all material respects
and represent the Company's good faith estimates that are made on the
basis of data derived from such sources.
(xxxviii) Each certificate signed by any officer of the Company or
any of the Subsidiary Guarantors and delivered to the Initial
Purchasers or counsel for the Initial Purchasers pursuant to, or in
connection with, this Agreement shall be deemed to be a representation
and warranty by the Company or such Subsidiary Guarantor to the Initial
Purchasers as to the matters covered by such certificate.
The Company and each of the Subsidiary Guarantors acknowledges
that the Initial Purchasers and, for purposes of the opinions to be delivered to
the Initial Purchasers pursuant to Section 8 of this Agreement, the various law
firms acting as counsel to the Company and each of the Subsidiary Guarantors and
counsel to the Initial Purchasers will rely upon the accuracy and truth of the
foregoing representations and the Company and each Subsidiary Guarantor hereby
consent to such reliance.
(b) The Initial Purchasers represent, warrant and covenant (as
to themselves only) to the Company that they are
23
-23-
QIBs with such knowledge and experience in financial and business matters as are
necessary in order to evaluate the merits and risks of an investment in the
securities. The Initial Purchasers represent, warrant and agree (as to
themselves only) with the Company that (i) they have not and will not solicit
offers for, or offer or sell, the Notes by any form of general solicitation or
general advertising (as those terms are used in Regulation D under the Act) or
in any manner involving a public offering within the meaning of Section 4(2) of
the Act and (ii) they have and will solicit offers for the Notes only from, and
will offer the Notes only to, (x) persons whom the Initial Purchasers reasonably
believe to be QIBs or, if any such person is buying for one or more
institutional accounts for which such person is acting as fiduciary or agent,
only when such person has represented to the Initial Purchasers that each such
account is a QIB to whom notice has been given that such sale or delivery is
being made in reliance on Rule 144A, and, in each case, in transactions under
Rule 144A, (y) a limited number of other institutional investors reasonably
believed by the Initial Purchasers to be Institutional Accredited Investors
that, prior to their purchase of the Notes, deliver to the Initial Purchasers a
letter containing the representations and agreements set forth in Annex C to the
Offering Memorandum or (z) persons other than U.S. persons outside the U.S. in
reliance on Regulation S.
The Initial Purchasers represent and warrant that the source
of funds being used by them to acquire the Notes does not include the assets of
any "employee benefit plan" (within the meaning of Section 3 of ERISA) or any
"plan" (within the meaning of Section 4975 of the Code).
The Initial Purchasers understand that the Company and, for
purposes of the opinion to be delivered to them pursuant to Section 8(f) hereof,
counsel to the Company will rely upon the accuracy and truth of the foregoing
representations, and the Initial Purchasers hereby consent to such reliance.
6. INDEMNIFICATION. (a) Each of the Company and the Subsidiary
Guarantors, on a joint and several basis, agrees to indemnify and hold harmless
the Initial Purchasers, each person, if any, who controls the Initial Purchasers
within the meaning of Section 15 of the Act or Section 20(a) of the Exchange
Act, the agents, employees, officers and directors of the Initial Purchasers and
the agents, employees, officers and directors of any such controlling person
from and against any and all losses, liabilities, claims, damages and expenses
whatsoever (including but not limited to reasonable attorneys' fees
24
-24-
and any and all reasonable expenses whatsoever incurred in investigating,
preparing or defending against any litigation, commenced or threatened, or any
claim whatsoever, and any and all reasonable amounts paid in settlement of any
claim or litigation) to which they or any of them may become subject under the
Act, the Exchange Act or otherwise insofar as such losses, liabilities, claims,
damages or expenses (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 Offering Memorandum or the Offering Memorandum, or
in any supplement thereto or amendment thereof, 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; provided,
however, that the Company and Subsidiary Guarantors will not be liable (i) in
any such case to the extent, but only to the extent, that any such loss,
liability, claim, damage or expense arises out of or is based upon any such
untrue statement or alleged untrue statement or omission or alleged omission
made therein in reliance upon and in conformity with written information
relating to the Initial Purchasers furnished to the Company by or on behalf of
the Initial Purchasers expressly for use therein or (ii) with respect to the
Preliminary Offering Memorandum, to the extent that any such loss, claim, damage
or liability results solely from an untrue statement of a material fact
contained in, or the omission of a material fact from, such preliminary Offering
Memorandum that was corrected in the final Offering Memorandum, if the Company
or the Subsidiary Guarantors shall sustain the burden of proving that such
Indemnified Person sold Notes to the person alleging such loss, claim, damage or
liability without sending or giving, at or prior to the written confirmation of
such sale, a copy of the Prospectus or of the Offering Memorandum as then
amended or supplemented even though the Company and the Subsidiary Guarantors
had previously furnished copies thereof to such Indemnified Person. This
indemnity agreement will be in addition to any liability that the Company may
otherwise have, including, but not limited to, under this Agreement.
(b) The Initial Purchasers agree, severally and not jointly,
to indemnify and hold harmless the Company, each person, if any, who controls
the Company within the meaning of Section 15 of the Act or Section 20(a) of the
Exchange Act, and each of its agents, employees, officers and directors and the
agents, employees, officers and directors of such controlling person from and
against any losses, liabilities, claims, damages and reasonable expenses
whatsoever (including but not lim-
25
-25-
ited to reasonable attorneys' fees and any and all reasonable expenses
whatsoever incurred in investigating, preparing or defending against any
litigation, commenced or threatened, or any claim whatsoever and any and all
reasonable amounts paid in settlement of any claim or litigation) to which they
or either of them may become subject under the Act, the Exchange Act or
otherwise insofar as such losses, liabilities, claims, damages or expenses (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
Offering Memorandum or the Offering Memorandum, or in any amendment thereof 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, in each case to the extent, but only
to the extent, that any such loss, liability, claim, damage or expense arises
out of or is based upon any untrue statement or alleged untrue statement or
omission or alleged omission made therein in reliance upon and in conformity
with written information relating to the Initial Purchasers furnished to the
Company by the Initial Purchasers expressly for use therein. The Company and the
Initial Purchasers acknowledge that the information set forth in Section 9 is
the only information furnished in writing by the Initial Purchasers to the
Company expressly for use in the Offering Memorandum.
(c) Promptly after receipt by an indemnified party under
subsection (a) or (b) above of notice of the commencement of any action, suit or
proceeding (collectively, an "action"), such indemnified party shall, if a claim
in respect thereof is to be made against the indemnifying party under such
subsection, notify each party against whom indemnification is to be sought in
writing of the commencement of such action (but the failure so to notify an
indemnifying party shall not relieve such indemnifying party from any liability
that it may have under this Section 6 except to the extent that it has been
prejudiced in any material respect by such failure or from any liability which
it may otherwise have). In case any such action is brought against any
indemnified party, and it notifies an indemnifying party of the commencement of
such action, the indemnifying party will be entitled to participate in such
action, and to the extent it may elect by written notice delivered to the
indemnified party promptly after receiving the aforesaid notice from such
indemnified party, to assume the defense of such action with counsel
satisfactory to such indemnified party. Notwithstanding the foregoing, the
indemnified party or parties shall have the right to employ its or their
26
-26-
own counsel in any such action, but the fees and expenses of such counsel shall
be at the expense of such indemnified party or parties unless (i) the employment
of such counsel shall have been authorized in writing by the indemnifying
parties in connection with the defense of such action, (ii) the indemnifying
parties shall not have employed counsel to take charge of the defense of such
action within a reasonable time after notice of commencement of the action, or
(iii) such indemnified party or parties shall have reasonably concluded that
there may be defenses available to it or them that are different from or
additional to those available to one or all of the indemnifying parties (in
which case the indemnifying parties shall not have the right to direct the
defense of such action on behalf of the indemnified party or parties), in any of
which events such reasonable fees and expenses of counsel shall be borne by the
indemnifying parties. In no event shall the indemnifying party be liable for the
fees and expenses of more than one counsel (together with appropriate local
counsel) at any time for all indemnified parties in connection with any one
action or separate but substantially similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances.
Anything in this subsection to the contrary notwithstanding, an indemnifying
party shall not be liable for any settlement of any claim or action effected
without its written consent; provided, however, that such consent was not
unreasonably withheld.
7. CONTRIBUTION. In order to provide for contribution in
circumstances in which the indemnification provided for in Section 6 of this
Agreement is for any reason held to be unavailable from the indemnifying party,
or is insufficient to hold harmless a party indemnified under Section 6 of this
Agreement, the Company, the Subsidiary Guarantors and the Initial Purchasers
shall contribute to the aggregate losses, claims, damages, liabilities and
expenses of the nature contemplated by such indemnification provision (including
any reasonable investigation, legal and other expenses incurred in connection
with, and any amount paid in settlement of, any action or any claims asserted)
to which the Company and the Initial Purchasers may be subject in such
proportion as is appropriate to reflect the relative benefits received by the
Company and the Subsidiary Guarantors, on the one hand, and the Initial
Purchasers, on the other hand, from the offering of the Senior Notes or, if such
allocation is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to above but also
the relative fault of the Company and the Subsidiary Guarantors, on the one
hand, and the Initial Purchasers, on the other hand, in connec-
27
-27-
tion with the statements or omissions that resulted in such losses, claims,
damages, liabilities or expenses, as well as any other relevant equitable
considerations. The relative benefits received by the Company and the Subsidiary
Guarantors, on the one hand, and the Initial Purchasers, on the other hand,
shall be deemed to be in the same proportion as (x) the total proceeds from the
offering of Senior Notes (net of discounts and commissions but before deducting
expenses) received by the Company and the Subsidiary Guarantors and (y) the
total discounts and commissions received by the Initial Purchasers as set forth
in the table on the cover page of the Offering Memorandum. The relative fault of
the Company and the Subsidiary Guarantors, on the one hand, and the Initial
Purchasers, on the other hand, shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company or the Initial Purchasers and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission or alleged statement or omission.
The Company, the Subsidiary Guarantors and the Initial
Purchasers agree that it would not be just and equitable if contribution
pursuant to this Section 7 were determined by pro rata allocation or by any
other method of allocation that does not take into account the equitable
considerations referred to above. Notwithstanding the provisions of this Section
7, (i) in no case shall the Initial Purchasers be required to contribute any
amount in excess of the amount by which the total discount and commissions
applicable to the Senior Notes pursuant to this Agreement exceeds the amount of
any damages that the Initial Purchasers have otherwise been required to pay by
reason of any untrue or alleged untrue statement or omission or alleged omission
and (ii) 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 7, each person, if any, who controls the Initial Purchasers within the
meaning of Section 15 of the Act or Section 20(a) of the Exchange Act shall have
the same rights to contribution as the Initial Purchasers, and each person, if
any, who controls the Company within the meaning of Section 15 of the Act or
Section 20(a) of the Exchange Act shall have the same rights to contribution as
the Company, subject in each case to clauses (i) and (ii) of this Section 7. Any
party entitled to contribution will, promptly after receipt of notice of
commencement of any action against such party in respect of
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which a claim for contribution may be made against another party or parties
under this Section 7, notify such party or parties from whom contribution may be
sought, but the omission to so notify such party or parties shall not relieve
the party or parties from whom contribution may be sought from any obligation it
or they may have under this Section 7 or otherwise; provided, however, that no
additional notice shall be required with respect to any action for which notice
has been given under Section 6 for purposes of indemnification. No party shall
be liable for contribution with respect to any action or claim settled without
its written consent, provided, however, that such written consent was not
unreasonably withheld.
8. CONDITIONS OF INITIAL PURCHASERS' OBLIGATIONS. The
obligations of the Initial Purchasers to purchase and pay for the Senior Notes,
as provided for in this Agreement, shall be subject to satisfaction of the
following conditions prior to or concurrently with such purchase:
(a) All of the representations and warranties of the Company
and the Subsidiary Guarantors contained in this Agreement shall be true
and correct on the date of this Agreement and on the Closing Date. The
Company and the Subsidiary Guarantors shall have performed or complied
with all of the agreements contained in this Agreement and required to
be performed or complied with by then at or prior to the Closing Date.
(b) No stop order suspending the qualification or exemption
from qualification of the Senior Notes in any jurisdiction shall have
been issued and no proceeding for that purpose shall have been
commenced or shall be pending or threatened.
(c) No action shall have been taken and no statute, rule,
regulation or order shall have been enacted, adopted or issued by any
governmental agency that would, as of the Closing Date, prevent the
issuance of the Senior Notes or the Exchange Offer; no action, suit or
proceeding shall have been commenced and be pending against or
affecting or, to the best knowledge of the Company and the Subsidiary
Guarantors, threatened against the Company and/or the Subsidiary
Guarantors before any court or arbitrator or any governmental body,
agency or official that, if adversely determined, would result in a
Material Adverse Effect.
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(d) Since February 28, 1997, except as contemplated by the
Offering Memorandum, neither the Company nor any of the Subsidiary
Guarantors had any material liabilities or obligations, direct or
contingent, that were not set forth in the Company's consolidated
balance sheet as of February 28, 1997 or in the notes thereto. Since
February 28, 1997 and up to the Closing Date, except as set forth in
the Offering Memorandum, (a) none of the Company or the Subsidiary
Guarantors has (1) incurred any liabilities or obligations, direct or
contingent, that are material to any of them (other than obligations to
sell petroleum products in the ordinary course of business) or (2)
entered into any material transaction not in the ordinary course of
business, and (b) there has not been any event or development that
would result in a Material Adverse Effect.
(e) The Initial Purchasers shall have received certificates,
dated the Closing Date, signed by (i) the Chief Executive Officer and
(ii) the chief financial or accounting officer of the Company
confirming, as of the Closing Date, the matters set forth in paragraphs
(a), (b), (c) and (d) of this Section 8.
(f) The Initial Purchasers shall have received on the Closing
Date an opinion dated the Closing Date, addressed to the Initial
Purchasers, of Lowenthal, Landau, Fischer & Bring, P.C., counsel to the
Company, in form and substance as set forth in Exhibit B hereto.
(g) The Initial Purchasers shall have received on the Closing
Date an opinion (satisfactory in form and substance to the Initial
Purchasers) dated the Closing Date of Cahill Gordon & Reindel, special
counsel to the Initial Purchasers, covering such matters as are
customarily covered in such opinions.
(h) Prior to the execution of this Agreement, the Initial
Purchasers shall have received a "comfort letter" from BDO Seidman LLP,
independent public accountants for the Company, dated as of the date of
this Agreement, addressed to the Initial Purchasers and in form and
substance satisfactory to the Initial Purchasers and counsel to the
Initial Purchasers. In addition, as of the Closing Date, the Initial
Purchasers shall have received a "bring-down comfort letter" from BDO
Seidman LLP in form and substance satisfactory to the Initial
Purchasers and counsel to the Initial Purchasers covering the same
items and matters as covered in the "comfort letter" but as of a
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date that is not more than three days prior to the date thereof and any
changes and additions to the Preliminary Offering Memorandum that were
made producing the Offering Memorandum.
(i) The Initial Purchasers shall have received from Ernst &
Young/Wright Killen (satisfactory in form and substance to the Initial
Purchasers and counsel to the Initial Purchasers) a report and analysis
of the strategy and economics of the refinery expansion and retail
capital improvements outlined in the Offering Memorandum.
(j) The Company, the Subsidiary Guarantors and the Trustee
shall have entered into the Indenture and the Initial Purchasers shall
have received counterparts, conformed as executed, thereof.
(k) The Company and the Subsidiary Guarantors shall have
entered into the Registration Rights Agreement and the Initial
Purchasers shall have received counterparts, conformed as executed,
thereof.
(l) The Company, the Subsidiary Guarantors and the Escrow
Agent shall have entered into the Escrow Agreement and the Initial
Purchasers shall have received counterparts, conformed as executed,
thereof.
(m) The Company shall have entered into the New Bank Credit
Facility, which shall be in form and substance satisfactory to the
Initial Purchasers and counsel to the Initial Purchasers; and the
Initial Purchasers shall have received counterparts, conformed as
executed, thereof.
(n) The Initial Purchasers shall have been furnished with
certified copies of such documents as they may reasonably request,
including, but not limited to, certified copies of the New Bank Credit
Facility, and all closing documents from the closings of the
transactions contemplated hereby.
(o) Cahill Gordon & Reindel, counsel to the Initial
Purchasers, shall have been furnished with such documents as they may
reasonably request to enable them to review or pass upon the matters
referred to in this Section 8 and in order to evidence the accuracy,
completeness or satisfaction in all material respects of any of the
representations, warranties or conditions contained in this Agreement.
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If any of the conditions specified in this Section 8 shall not have
been fulfilled when and as required by this Agreement to be fulfilled, this
Agreement may be terminated by the Initial Purchasers on notice to the Company
at any time at or prior to the Closing Date, and such termination shall be
without liability of any party to any other party except that the Company shall
reimburse the Initial Purchasers for all of their reasonable out-of-pocket
expenses, including the reasonable expense of Initial Purchasers' counsel,
incurred by the Initial Purchasers in connection with this Agreement.
Notwithstanding any such termination, the provisions of Sections 4(e), 6, 7, 10,
11(d) and 14 shall remain in effect.
The Company's obligation under this Agreement to sell the Senior
Notes to the Initial Purchasers on the Closing Date is subject to the Initial
Purchasers purchasing and paying for all of the Senior Notes.
9. INITIAL PURCHASERS' INFORMATION. The Company and the Initial
Purchasers severally acknowledge that the statements with respect to the offer
and sale of the Senior Notes set forth in the first sentence of the second
paragraph under the caption "Plan of Distribution" in the Offering Memorandum
constitute the only information furnished in writing by the Initial Purchasers
expressly for use in the Offering Memorandum.
10. SURVIVAL OF REPRESENTATIONS AND AGREEMENTS. All representations
and warranties, covenants and agreements contained in this Agreement, including
the agreements contained in Sections 4(e) and 11(d), the indemnity agreements
contained in Section 6 and the contribution agreements contained in Section 7
shall remain operative and in full force and effect regardless of any
investigation made by or on behalf of the Initial Purchasers or any controlling
person thereof or by or on behalf of the Company, any of the Subsidiary
Guarantors or any controlling person of any thereof, and shall survive delivery
of and payment for the Senior Notes to and by the Initial Purchasers. The
representations contained in Section 5 and the agreements contained in Sections
4(e), 6, 7, 11(d) and 14 shall survive the termination of this Agreement,
including pursuant to Sections 8 and 11.
11. EFFECTIVE DATE OF AGREEMENT; TERMINATION. (a) This Agreement
shall become effective upon execution and delivery of a counterpart hereof by
each of the parties hereto.
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(b) The Initial Purchasers shall have the right to terminate this
Agreement at any time prior to the Closing Date by notice to the Company
from the Initial Purchasers, without liability (other than with respect to
Sections 6 and 7) on the Initial Purchasers' if, on or prior to such date,
(i) the Company or any of the Subsidiary Guarantors shall have failed,
refused or been unable to perform in any material respect any agreement on
its part to be performed under this Agreement, (ii) any other condition of
the obligations of the Initial Purchasers under this Agreement as provided
in Section 8 is not fulfilled when and as required in any material
respect, (iii) trading in securities generally on the New York Stock
Exchange or the American Stock Exchange shall have been suspended or
materially limited, or minimum prices shall have been established on such
exchange by the Commission, or by such exchange or other regulatory body
or governmental authority having jurisdiction, (iv) a general banking
moratorium shall have been declared by federal or New York authorities, or
if a moratorium in foreign exchange trading by major international banks
or persons shall have been declared, (v) there is an outbreak or
escalation of armed hostilities involving the United States on or after
the date of this Agreement, or if there has been a declaration by the
United States of a national emergency or war, the effect of which shall
be, in the Initial Purchasers' judgment, to make it inadvisable or
impracticable to proceed with the offering or delivery of the Senior Notes
on the terms and in the manner contemplated in the Offering Memorandum or
(vi) there shall have been such a material adverse change in general
economic, political or financial conditions or the effect of international
conditions on the financial markets in the United States shall be such as,
in the Initial Purchasers' judgment, to make it inadvisable or
impracticable to proceed with the offering or delivery of the Senior Notes
on the terms and in the manner contemplated in the Offering Memorandum.
(c) Any notice of termination pursuant to this Section 11 shall be
given at the address specified in Section 12 below by telephone, telex,
telephonic facsimile or telegraph, confirmed in writing by letter.
(d) If this Agreement shall be terminated pursuant to clause (i) or
(ii) of Section 11(b), or if the sale of the Senior Notes provided for in
this Agreement is not consummated because any condition to the obligations
of the Initial Purchasers set forth in this Agreement is not
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satisfied or because of any refusal, inability or failure on the part of
either of the Company or any Subsidiary Guarantor to perform any agreement
in this Agreement or comply with any provision of this Agreement, the
Company will, subject to demand by the Initial Purchasers, reimburse the
Initial Purchasers for all of its reasonable out-of-pocket expenses
(including the reasonable fees and expenses of the Initial Purchasers'
counsel) incurred in connection with this Agreement.
12. NOTICE. All communications with respect to or under this
Agreement, except as may be otherwise specifically provided in this Agreement,
shall be in writing and, if sent to the Initial Purchasers, shall be mailed,
delivered, or telexed, telegraphed or telecopied and confirmed in writing to
Dillon, Read & Co. Inc., 535 Madison Avenue, New York, New York 10022
(telephone: (212) 906-7000), Attention: Corporate Finance Department, telecopy
number: (212) 593-0164; and if sent to the Company or the Subsidiary Guarantors,
shall be mailed, delivered or telexed, telegraphed or telecopied and confirmed
in writing to United Refining Company, 15 Bradley Street, Warren, Pennsylvania
16365 (telephone: (814) 726-4655), Attention: Myron Turfitt, telecopy number:
(814) 723-4371 and Lowenthal, Landau, Fischer & Bring, P.C., 250 Park Avenue,
10th floor, New York, New York 10177 (telephone: (212) 986-1116, telecopy
number: (212) 986-0604.
All such notices and communications shall be deemed to have been
duly given: when delivered by hand, if personally delivered; five business days
after being deposited in the mail, postage prepaid, if mailed; when answered
back, if telexed; when receipt acknowledged if telecopied; and one business day
after being timely delivered to a next-day air courier.
13. PARTIES. This Agreement shall inure solely to the benefit of,
and shall be binding upon, the Initial Purchasers and the Company and the
Subsidiary Guarantors and the controlling persons and agents referred to in
Sections 6 and 7, and their respective successors and assigns, and no other
person shall have or be construed to have any legal or equitable right, remedy
or claim under or in respect of or by virtue of this Agreement or any provision
herein contained. The term "successors and assigns" shall not include a
purchaser, in its capacity as such, of Senior Notes from the Initial Purchasers.
14. CONSTRUCTION. This Agreement shall be construed in accordance
with the internal laws of the State of New York (without giving effect to any
provisions thereof relating to
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conflicts of law) and each of the parties hereto consent to the jurisdiction of
the courts of the State of New York. Each of the parties hereto agrees to submit
to the jurisdiction of the courts of the State of New York and the U.S. Federal
Courts sitting in the City of New York for the purposes of any suit, action or
proceeding arising out of or relating to this Indenture. Nothing herein shall
affect the right to serve process in any other manner permitted by law or shall
limit the right of the Initial Purchasers to bring proceedings against the
Company in the courts of any other jurisdiction.
15. CAPTIONS. The captions included in this Agreement are included
solely for convenience of reference and are not to be considered a part of this
Agreement.
16. COUNTERPARTS. This Agreement may be executed in various
counterparts that together shall constitute one and the same instrument.
UNITED REFINING COMPANY
By:________________________
Name:
Title:
KIANTONE PIPELINE CORPORATION
By:________________________
Name:
Title:
KIANTONE PIPELINE COMPANY
By:________________________
Name:
Title:
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UNITED JET CENTER, INC.
By:________________________
Name:
Title:
UNITED REFINING COMPANY OF
PENNSYLVANIA
By:________________________
Name:
Title:
KWIK FILL, INC.
By:________________________
Name:
Title:
INDEPENDENT GASOLINE AND OIL
COMPANY OF ROCHESTER, INC.
By:_________________________
Name:
Title:
BELL OIL CORP.
By:_________________________
Name:
Title:
PPC, INC.
By:_________________________
Name:
Title:
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SUPER TEST PETROLEUM, INC.
By:_________________________
Name:
Title:
KWIK-FIL, INC.
By:_________________________
Name:
Title:
VULCAN ASPHALT REFINING
CORPORATION
By:_________________________
Name:
Title:
Confirmed and accepted as
of the date first above
written:
DILLON, READ & CO. INC.
By:________________________
Name:
Title:
37
Exhibit A
Form of Registration Rights Agreement