S-4

As filed with the Securities and Exchange Commission on December 16, 2004

Registration No. 333-            

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM S-4

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

United Refining Company

(Exact name of registrant as specified in its charter)

Pennsylvania	2721	25-1411751
(State or other jurisdiction of incorporation or organization)	(Primary Standard Industrial Classification Code Number)	(I.R.S. Employer Identification Number)

15 Bradley Street

Warren, Pennsylvania 16365

(814) 723-1500

(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)

SEE TABLE OF ADDITIONAL REGISTRANTS

John R. Wagner, Esq.

Vice President, General Counsel and Secretary

15 Bradley Street

Warren, Pennsylvania 16365

(814) 723-1500

(Name, address, including zip code, and telephone number, including area code, of agent for service)

Copy to:

Thomas D. Balliett, Esq.

Kramer Levin Naftalis & Frankel LLP

919 Third Avenue

New York, New York 10022

(212) 715-9100

Approximate date of commencement of proposed sale of the securities to the public:    As soon as practicable after this registration statement becomes effective.

If the securities being registered on this form are being offered in connection with the formation of a holding company and there is compliance with General Instruction G, check the following box.  ¨

If this form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ¨

If this form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ¨

CALCULATION OF REGISTRATION FEE

Title of Shares to be Registered	Proposed Maximum Aggregate Offering Price	Amount of Registration Fee
10 1/2% Senior Notes due 2012	$200,000,000(1)	$23,540(2)
Guarantees related to the 10 1/2% Senior Notes due 2012(3)	N/A	N/A

(1) Pursuant to Rule 457(f) under the Securities Act, the book value as of December 15, 2004 of the securities for which the securities being registered are to be exchanged has been used as the basis for calculating the registration fee.

(2) Calculated on the basis of the maximum aggregate offering price in accordance with Rule 457(o) under the Securities Act.

(3) No separate consideration will be received for the guarantees, and, therefore, pursuant to Rule 457(n) under the Securities Act, no additional fee is required.

The registrants hereby amend this registration statement on such date or dates as may be necessary to delay its effective date until the registrants shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act or until the registration statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.

TABLE OF ADDITIONAL REGISTRANTS

Name of Additional Registrant*	State of Incorporation or Formation	IRS Employer Identification Number
Kiantone Pipeline Corporation	New York	25-1211902
Kiantone Pipeline Company	Pennsylvania	25-1416278
United Refining Company of Pennsylvania	Pennsylvania	25-0850960
United Jet Center, Inc.	Delaware	52-1623169
Kwik-Fill Corporation	Pennsylvania	25-1525543
Independent Gas and Oil Company of Rochester, Inc.	New York	06-1217388
Bell Oil Corp.	Michigan	38-1884781
PPC, Inc.	Ohio	31-0821706
Super Test Petroleum, Inc.	Michigan	38-1901439
Kwik-Fil, Inc.	New York	25-1525615
Vulcan Asphalt Refining Corporation	Delaware	23-2486891
Country Fair, Inc.	Pennsylvania	25-1149799

* The address and telephone number of the principal executive offices of each of the registrants listed below are the same as those of United Refining Company.

The information in this prospectus is not complete and may be changed. We may not sell these securities or accept any offer to buy these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.

SUBJECT TO COMPLETION, DATED                     , 2004

PROSPECTUS

$200,000,000

United Refining Company

Exchange Offer for

10 ¹/2% Senior Notes due 2012

We are hereby offering to exchange an aggregate principal amount of up to $200,000,000 of our new 10 ¹/2% Senior Notes due 2012 for a like amount of our old 10 ¹/2% Senior Notes due 2012.

The new notes will evidence the same debt as the old notes and the terms of the new notes are substantially identical in all respects (including principal amount, interest rate and maturity) to the terms of the old notes for which they may be exchanged pursuant to this exchange offer, except that the new notes:

• will be freely transferable by holders thereof; and

• will be issued free of any covenant regarding registration.

The old notes are and the new notes will be senior unsecured obligations of the issuer and will be fully and unconditionally guaranteed, jointly and severally, on a senior unsecured basis by the subsidiary guarantors. The notes and each subsidiary guarantee will rank pari passu with all other unsecured and unsubordinated indebtedness and senior to all subordinated indebtedness of the issuer and the applicable subsidiary guarantor, respectively.

The exchange offer expires at 5:00 p.m., New York City time, on                     , unless we extend it.

The new notes will not be listed on any national securities exchange or the Nasdaq Stock Market.

Each broker-dealer that receives new notes pursuant to the exchange offer must acknowledge that it will deliver a prospectus in connection with any resale of the new notes. If the broker-dealer acquired the old notes as a result of market making or other trading activities, such broker-dealer may use the prospectus for the exchange offer, as supplemented or amended, in connection with the resales of new notes.

For a discussion of risk factors that should be considered in connection with an investment in the new notes, see “ Risk Factors” beginning on page 10.

WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND US A PROXY.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

The date of this prospectus is                     .

This prospectus incorporates important business and financial information about us that is not included in or delivered with this prospectus. This information is available without charge to security holders upon written or oral request to United Refining Company, 15 Bradley Street, Warren, Pennsylvania 16365, Attention: Investor Relations, telephone number (814) 723-1500. To obtain timely delivery, security holders must request the information no later than                     .

TABLE OF CONTENTS

WHERE YOU CAN FIND MORE INFORMATION	-ii-
ACCOMPANYING FORM 10-K	-ii-
INCORPORATION BY REFERENCE	-ii-
INFORMATION REGARDING FORWARD-LOOKING STATEMENTS	-iii-
SUMMARY	1
RISK FACTORS	10
USE OF PROCEEDS	15
CAPITALIZATION	15
THE EXCHANGE OFFER	16
SELECTED FINANCIAL DATA	25
DESCRIPTION OF CERTAIN INDEBTEDNESS	28
DESCRIPTION OF THE NOTES	28
CERTAIN UNITED STATES FEDERAL TAX CONSIDERATIONS	54
PLAN OF DISTRIBUTION AND SELLING RESTRICTIONS	58
LEGAL MATTERS	59
EXPERTS	59

ABOUT THIS PROSPECTUS

In this prospectus, unless the context otherwise requires:

• United Refining Company and “issuer” refer to United Refining Company, a Pennsylvania corporation, the issuer of the new notes;

• “subsidiary guarantors” refers to the subsidiaries of United Refining Company that will guarantee the new notes; and

• “we,” “us,” “our” and similar terms refer to United Refining Company and, unless the context otherwise requires, its subsidiaries, including the subsidiary guarantors.

Certain terms used herein have been defined in “Description of the Notes—Certain Definitions” appearing on page 42 of this prospectus and in other sections under “Description of the Notes” beginning on page 28 of this prospectus.

The distribution of this prospectus and the offer and sale of the new notes and related guarantees may be restricted by law in certain jurisdictions. Persons who come into possession of this prospectus or any of the new notes must inform themselves about and observe any such restrictions. You must comply with all applicable laws and regulations in force in any jurisdiction in which you purchase, offer or sell the new notes or possess or distribute this prospectus and, in connection with any purchase, offer or sale by you of the new notes, must obtain any consent, approval or permission required under the laws and regulations in force in any jurisdiction to which you are subject or in which you make such purchase, offer or sale.

-i-

WHERE YOU CAN FIND MORE INFORMATION

In connection with the exchange offer, the issuer and the subsidiary guarantors have filed with the Securities and Exchange Commission, or SEC, a registration statement relating to the new notes on Form S-4 under the Securities Act of 1933, as amended, or the Securities Act. This prospectus constitutes a part of the registration statement. As permitted under SEC rules, the prospectus does not include all of the information contained in the registration statement. We refer you to the registration statement, including all amendments, supplements, schedules and exhibits thereto, for further information about us and the new notes. References in this prospectus to any of our contracts or other documents are not necessarily complete. If we have filed any document as an exhibit to the registration statement, you should read the exhibit for a more complete understanding of that document.

We file current reports and other information with the SEC. The public may read and copy any materials filed with the SEC at the SEC’s Public Reference Room at 450 Fifth Street, N.W., Washington, D.C. 20549. The public may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC maintains an Internet site at http://www.sec.gov that contains reports, proxy and information statements and other information regarding issuers that file electronically with the SEC. The indenture governing the new notes requires us to file with the SEC, and to make available to securities analysts and prospective investors upon request, reports and other information called for by rules under the Securities Exchange Act of 1934, as amended, or the Exchange Act, regardless of whether we are subject to the reporting requirements of the Exchange Act.

ACCOMPANYING FORM 10-K

A copy of our Annual Report on Form 10-K for the fiscal year ended August 31, 2004, which is our latest Annual Report on Form 10-K filed pursuant to the Exchange Act with the SEC, accompanies this prospectus.

INCORPORATION BY REFERENCE

Rather than include certain information in this prospectus that we have already included in documents filed with the SEC, we are incorporating this information by reference, which means that we are disclosing important information to you by referring to those publicly filed documents that contain the information. The information incorporated by reference is considered to be part of this prospectus. Accordingly, we incorporate by reference the following documents we filed with the SEC:

• Annual Report on Form 10-K for the fiscal year ended August 31, 2004, filed with the SEC on November 24, 2004.

In addition, all reports and other documents we subsequently file pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this prospectus and until the termination of the exchange offer will be deemed to be incorporated by reference in this prospectus and to be part of this prospectus from the date of the filing of such reports and documents.

References in this prospectus to this prospectus will be deemed to include the documents incorporated by reference, which are an integral part of this prospectus. You should obtain and review carefully copies of the documents incorporated by reference. Any statement contained in the documents incorporated by reference will be modified or superseded for purposes of this prospectus to the extent that a statement contained in a subsequently dated document incorporated by reference or in this prospectus modifies or supersedes the statement. Information that we file later with the SEC will automatically update the information incorporated by reference and the information in this prospectus. Any statement so modified or superseded will not be deemed, except as so modified or superseded, to constitute a part of this prospectus.

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Any person to whom this prospectus is delivered may obtain without charge a copy of any or all of the documents incorporated in this prospectus by reference, excluding exhibits to any such document unless such exhibits are specifically incorporated by reference into such document. Written requests should be directed to United Refining Company, 15 Bradley Street, Warren, Pennsylvania 16365, Attention: Investor Relations. Oral requests should be made by telephoning (814) 723-1500. In order to obtain timely delivery, you must request the information no later than                     .

INFORMATION REGARDING FORWARD-LOOKING STATEMENTS

This prospectus, including the information we incorporate by reference, contains “forward-looking statements” as to expectations, beliefs, plans, objectives and future financial performance, and assumptions underlying or concerning the foregoing. These forward-looking statements involve known and unknown risks, uncertainties and other factors, which could cause our actual results, performance or outcomes to differ materially from those expressed or implied in the forward-looking statements. The following are some of the important factors that could cause actual results, performance or outcomes to differ materially from those discussed in the forward-looking statements:

• repayment of debt;

• fluctuations in the price of oil based on market dynamics;

• risks and uncertainties with respect to the actions of actual or potential competitive suppliers of refined petroleum products in our markets;

• the demand for and supply of crude oil and refined products;

• the spread between market prices for refined products and market prices for crude oil;

• the possibility of inefficiencies or shutdowns in refinery operations or pipelines;

• the availability and cost of financing to us;

• environmental, tax, tobacco or other legislation or regulation relating to our business;

• volatility of gasoline prices, margins and supplies;

• merchandising margins;

• labor costs;

• level of capital expenditures;

• customer traffic;

• weather conditions;

• acts of terrorism and war;

• our business strategies and our ability to effectuate such strategies;

• expansion and growth of operations;

• future projects and investments;

• future exposure to currency devaluations or exchange rate fluctuations;

• expected outcomes of legal and administrative proceedings and their expected effects on our financial position, results of operations and cash flows;

• future operating results and financial condition;

• the effectiveness of our disclosure controls and procedures and internal control over financial reporting; and

• general economic, business and market conditions.

-iii-

We have based these statements on our assumptions and analyses in light of our experience and perception of historical trends, current conditions, expected future developments and other factors we believe are appropriate in the circumstances. These statements are subject to a number of assumptions, risks and uncertainties, including those described in this prospectus under “Risk Factors” and in our SEC filings and the following:

• general economic business conditions;

• prices of oil and gas and industry expectations about future prices;

• foreign exchange controls and currency fluctuations;

• political stability;

• the business opportunities (or lack thereof) that may be presented to and pursued by us;

• changes in laws or regulations;

• the validity of the assumptions used in the design of our disclosure controls and procedures; and

• our ability to implement in a timely manner internal control procedures necessary to allow our management to report on the effectiveness of our internal control over financial reporting.

Most of these factors are beyond our control. We caution you that forward-looking statements are not guarantees of future performance and that actual results or developments may differ materially from those projected in these statements.

[Remainder of page intentionally left blank]

-iv-

SUMMARY

The following summary should be read together with the information contained in other parts of this prospectus and the documents we incorporate by reference. You should carefully read this prospectus and the documents we incorporate by reference to fully understand the terms of the new notes as well as the other considerations that are important to you in making a decision about whether to invest in the new notes. All references to a fiscal year refer to the year ended August 31 of the stated year. We acquired 100% of the operations and working capital assets of Country Fair, Inc. on December 21, 2001. Country Fair results are included from and after the acquisition date.

The Company

We are the leading integrated refiner and marketer of petroleum products in our primary market area, which encompasses western New York and northwestern Pennsylvania. We own and operate a medium complexity 65,000 barrel per day, or bpd, petroleum refinery in Warren, Pennsylvania where we produce a variety of products, including various grades of gasoline, diesel fuel, kerosene, No. 2 heating oil and asphalt. Our operations are organized into two business segments: wholesale and retail. The wholesale segment is responsible for the acquisition of crude oil, petroleum refining, supplying petroleum products to the retail segment and the marketing of petroleum products to wholesale and industrial customers.

The retail segment sells petroleum products under the Kwik Fill^®, Citgo^® and Keystone^® brand names through a network of company-operated retail units, and sells convenience and grocery items through company-owned gasoline stations and convenience stores under the Red Apple Food Mart^® and Country Fair^® brand names. As of August 31, 2004, we operated 372 units, of which, 185 units are owned, 127 units are leased, and the remaining stores are operated under a management agreement. Approximately 22% of the gasoline stations within this network are branded Citgo^® pursuant to a license agreement granting us the right to use Citgo’s applicable brand names, trademarks and other forms of Citgo’s identification. For the year ended August 31, 2004 (sometimes referred to as fiscal 2004), approximately 81% and 19% of our gasoline and distillate production, respectively, was sold through our retail network.

For the fiscal year ended August 31, 2004, we had total net sales of $1.5 billion, of which approximately 54% were derived from gasoline sales, approximately 34% were from sales of other petroleum products and 12% were from sales of merchandise and other revenue. Our capacity utilization rates have ranged from approximately 90% to approximately 100% over the last five years.

Corporate Information

Our principal executive offices are located at 15 Bradley Street, Warren, Pennsylvania 16365 and our telephone number is (814) 723-1500. We maintain a website on the internet at www.urc.com. Our website and the information it contains are not a part of this registration statement.

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THE EXCHANGE OFFER

On August 6, 2004, we privately sold and issued $200,000,000 principal amount of 10 ¹/2% Senior Notes due 2012 (the old notes) to which the exchange offer applies, to a group of initial purchasers in reliance on exemptions from, or in transactions not subject to, the registration requirements of the Securities Act and applicable state securities laws. The old notes were unconditionally guaranteed, jointly and severally, on a senior unsecured basis, by the subsidiary guarantors. In connection with the initial purchasers’ purchase of the old notes, the issuer and the subsidiary guarantors agreed to commence the exchange offer following the initial offering of the old notes.

The Exchange Offer The issuer is offering new 10 ¹/2% Senior Notes due 2012, unconditionally guaranteed by the subsidiary guarantors, jointly and severally, on a senior unsecured basis, which new notes and guarantees will be registered under the Securities Act, in exchange for the old notes.

To exchange your old notes, you must properly tender them, and the issuer must accept them. The issuer will exchange all old notes that you validly tender and do not validly withdraw. The issuer will issue registered new notes promptly after the expiration of the exchange offer.

Resale of New Notes We believe that, if you are not a broker-dealer, you may offer new notes (together with the guarantees thereof) for resale, resell and otherwise transfer the new notes (and the related guarantees) without complying with the registration and prospectus delivery requirements of the Securities Act (but subject to all other regulatory requirements) if you:

• acquired the new notes in the ordinary course of business;

• are not engaged in, do not intend to engage in and have no arrangement or understanding with any person to participate in a “distribution,” as defined under the Securities Act, of the new notes; and

• are not an “affiliate,” as defined under the Securities Act, of the issuer or any subsidiary guarantor.

If any of these conditions are not satisfied, you must comply with the registration and prospectus delivery requirements of the Securities Act in connection with any resale transaction. Our belief that transfers of new notes would be permitted without registration or prospectus delivery under the conditions described above is based on the interpretations of the SEC given to other, unrelated issuers in transactions similar to the exchange offer. We cannot assure you that the SEC would take the same position with respect to the exchange offer.

Each broker-dealer that receives new notes for its own account in exchange for old notes, where the old notes were acquired by it as a result of market-making activities or other trading activities, may be deemed to be an “underwriter” within the meaning of the Securities Act and must acknowledge that it will deliver a prospectus that meets

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the requirements of the Securities Act in connection with any resale of the new notes. However, by so acknowledging and by delivering a prospectus, a broker-dealer will not be deemed to admit that it is an “underwriter” within the meaning of the Securities Act.

Expiration Date The exchange offer will expire at 5:00 p.m., New York City time, on                     , unless we extend it.

Withdrawal You may withdraw your tender of old notes under the exchange offer at any time before the exchange offer expires. Any withdrawal must be in accordance with the procedures described in “The Exchange Offer—Withdrawal Rights.”

Procedures for Tendering Old Notes Each holder of old notes that wishes to accept the exchange offer must, before the exchange offer expires, either:

• transmit a properly completed and duly executed letter of transmittal, together with all other documents required by the letter of transmittal, including the old notes, to the exchange agent; or

• if old notes are tendered in accordance with book-entry procedures, arrange with The Depository Trust Company, or DTC, to cause to be transmitted to the exchange agent an agent’s message indicating, among other things, the holder’s agreement to be bound by the letter of transmittal,

or comply with the procedures described below under “—Guaranteed Delivery.”

A holder of old notes that tenders old notes in the exchange offer must represent, among other things, that:

• the holder is not an affiliate of the issuer or any subsidiary guarantor;

• the holder is acquiring the new notes in its ordinary course of business;

• the holder is not engaged in, does not intend to engage in and has no arrangement or understanding with any person to participate in a distribution of the new notes; and

• the holder is not acting on behalf of any person who could not truthfully make the foregoing representations.

Do not send letters of transmittal, certificates representing old notes or other documents to us or DTC. Send these documents only to the exchange agent at the address given in this prospectus and in the letter of transmittal.

Special Procedures for Tenders by

    Beneficial Owners of Old Notes If:

• you beneficially own old notes;

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• those old notes are registered in the name of a broker, dealer, commercial bank, trust company or other nominee or custodian; and

• you wish to tender your old notes in the exchange offer,

you should contact the registered holder as soon as possible and instruct it to tender the old notes on your behalf and comply with the instructions set forth in this prospectus and the letter of transmittal.

Guaranteed Delivery If you hold old notes in certificated form or if you own old notes in the form of a book-entry interest in a global note deposited with the trustee, as custodian for DTC, and you wish to tender those old notes but

• the certificates for your old notes are not immediately available or all required documents are unlikely to reach the exchange agent before the exchange offer expires; or

• you cannot complete the procedure for book-entry transfer on time,

you may tender your old notes in accordance with the procedures described in “The Exchange Offer—Procedures for Tendering Old Notes—Guaranteed Delivery.”

Consequences of Not Exchanging Old Notes If you do not tender your old notes or we reject your tender, your old notes will remain outstanding and will continue to be subject to the provisions in the indenture regarding the transfer and exchange of the old notes and the existing restrictions on transfer set forth in the legends on the old notes. Holders of old notes will not be entitled to any further registration rights under the registration rights agreement.

You do not have any appraisal or dissenters’ rights in connection with the exchange offer.

Certain United States Federal Tax Considerations Your exchange of old notes for new notes will not be treated as a taxable exchange for U.S. federal income tax purposes. See “Certain United States Federal Tax Considerations.”

Conditions to the Exchange Offer The exchange offer is subject to the conditions that it not violate applicable law or any SEC policy.

Use of Proceeds We will not receive any cash proceeds from the exchange offer.

Acceptance of Old Notes and Delivery of New Notes The issuer will accept for exchange any and all old notes properly tendered prior to the expiration of the exchange offer. The issuer and the subsidiary guarantors will complete the exchange offer and the issuer will issue the new notes promptly after the expiration of the exchange offer.

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Exchange Agent The Bank of New York is serving as exchange agent for the exchange offer. The address and the facsimile and telephone numbers of the exchange agent are provided in this prospectus under “The Exchange Offer—Exchange Agent” and in the letter of transmittal.

THE NEW NOTES

The exchange offer applies to the $200,000,000 principal amount of the old notes outstanding as of the date hereof. The terms of the new notes are substantially identical in all respects (including principal amount, interest rate and maturity) to the terms of the old notes for which they may be exchanged pursuant to this exchange offer, except that the new notes:

• will be freely transferable by holders thereof; and

• will be issued free of any covenant regarding registration.

The new notes will represent the same debt as the old notes and will be governed by the same indenture, which is governed by New York law. See “Description of the Notes.” Certain capitalized terms used below are defined under the caption “Description of the Notes—Certain Definitions” appearing on page 42 of this prospectus and in other sections under “Description of the Notes” beginning on page 28 of this prospectus.

Issuer United Refining Company.

The Notes $200,000,000 aggregate principal amount of 10 ¹/2% Senior Notes due 2012.

Maturity Date August 15, 2012.

Subsidiary Guarantees All of the subsidiary guarantors will unconditionally guarantee the new notes on a senior unsecured basis. Each subsidiary that we acquire or form will be required to guarantee the new notes on the same basis.

Interest Payment Dates Interest will be payable in cash on February 15 and August 15 of each year, beginning on February 15, 2005.

Ranking The new notes will be our senior unsecured obligations and will rank equally with all of our existing and future senior unsecured indebtedness, and senior to any of our subordinated indebtedness. The guarantees of the new notes by the subsidiary guarantors will rank equally to all of such subsidiary guarantors’ existing and future senior unsecured obligations. The new notes and the subsidiary guarantees thereof will be effectively subordinated to all secured indebtedness of ours and the subsidiary guarantors to the extent of the assets securing such indebtedness. As of August 31, 2004, we and the subsidiary guarantors had $15.6 million of secured indebtedness.

Optional Redemption Prior to August 15, 2008, we may redeem some or all of the new notes by paying a “make-whole” premium based on U.S. Treasury rates plus the outstanding principal amount and accrued and unpaid interest and Liquidated Damages, if any, to the date of redemption.

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On and after August 15, 2008, we may redeem all or part of the new notes at the redemption prices (expressed as percentages of principal amount) set forth under “Description of the Notes—Optional Redemption of Notes.”

In addition, at any time on or prior to August 15, 2007, we may redeem up to 35% of the issued aggregate principal amount of the new notes with the proceeds of one or more equity offerings at a redemption price equal to 110.50% of the principal amount thereof, plus accrued and unpaid interest, if any, to the date of redemption; provided that after giving effect to such redemption at least 65% of the principal amount of the new notes remains outstanding. The new notes are not otherwise redeemable at our option.

Change of Control In the event of a change of control, you will have the right, as a holder of the new notes, to require us to repurchase some or all of your notes at 101% of their principal amount, plus accrued and unpaid interest, if any, to the repurchase date. See “Description of the Notes—Change of Control.”

Certain Covenants The indenture governing the new notes contains certain covenants limiting, among other things:

• the incurrence of additional indebtedness by us or our subsidiaries;

• the issuance of stock of our subsidiaries;

• the payment of dividends and certain other payments by us and our subsidiaries;

• the creation of certain liens by us and our subsidiaries;

• our ability and our subsidiaries’ ability to enter into sale/leaseback transactions;

• our creation of restrictions on the ability of our subsidiaries to make payments to us;

• our ability to engage in asset sales;

• our ability or our subsidiaries’ ability to enter into certain transactions with affiliates; and

• our ability or our subsidiaries’ ability to merge, consolidate or transfer substantially all of their assets.

No Public Market We do not intend to apply for listing or quotation of the new notes on any securities exchange or market.

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SUMMARY HISTORICAL AND CONSOLIDATED FINANCIAL DATA

The following table sets forth certain historical financial and operating data as of and for the years ended August 31, 2001, 2002, 2003 and 2004. The summary financial and operating data set forth below should be read in conjunction with, and are qualified by reference to, “Selected Financial Data” and the financial statements and related notes, included in and incorporated by reference, respectively, in this prospectus, and the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” contained in our Annual Report on Form 10-K for the fiscal year ended August 31, 2004, which report is incorporated herein by reference. See “Where You Can Find More Information” and “Incorporation by Reference.”

	Year Ended August 31,
	2001			2002			2003			2004
	(dollars in thousands)
Income Statement Data:
Net sales	$	1,108,565		$	1,052,016		$	1,290,351		$	1,488,937
Gross margin(1)		216,701			163,192			231,435			277,716
Refining operating expenses(2)		90,271			77,821			99,666			104,938
Selling, general and administrative expenses(3)		73,234			94,297			106,427			111,808
Operating income (loss)		42,483			(20,700	)		13,123			48,517
Interest expense		21,051			20,064			21,376			21,445
Interest income		1,606			330			36			22
Other income (expense)		1,836			(1,345	)		(1,291	)		(2,201	)
Costs associated with terminated acquisition		(1,300	)		—			—			—
Equity in net earnings of affiliate		516			1,242			867			672
Gain (loss) on early extinguishment of debt(4)		5,210			—			—			(6,770	)
Income (loss) before income tax expense (benefit)		29,300			(40,537	)		(8,641	)		18,795
Income tax expense (benefit)		12,021			(15,596	)		(3,370	)		7,400
Net income (loss)		17,279			(24,941	)		(5,271	)		11,395
Balance Sheet Data (at end of period):
Total assets		355,557			371,440			361,428			366,382
Total debt		181,100			206,413			214,410			212,948
Total stockholder’s equity		75,966			48,196			41,975			47,106
Selected Financial Data:
EBITDA(5)		59,570			(5,643	)		28,555			60,088
Depreciation and amortization		14,429			14,830			15,820			16,620
Capital expenditures (cash)		10,052			9,061			8,043			10,075

Credit Ratios:
Ratio of EBITDA(5) to interest expense	2.8x
Ratio of long-term debt(6) to EBITDA(5)	3.3x
Ratio of net debt(7) to EBITDA(5)	3.4x

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	Year Ended August 31,
	2001			2002			2003			2004
Operating Information:
Refining Operations:
Crude oil input (mbbls/day)		62.4			62.2			58.8			63.7
Utilization		96.0	%		95.8	%		90.5	%		98.0	%
Total saleable refinery production (mbbls/day)		62.8			63.0			60.3			65.2
Gasoline		26.9			28.4			26.7			27.9
Middle distillates		17.1			16.2			14.7			16.6
Asphalt		15.7			16.2			16.4			17.4
Total saleable products (mbbls/day) (production & purchases)		70.1			70.0			66.1			71.0
Gross profit (per bbl)	$	2.34		$	(0.01	)	$	1.14		$	2.66
Refining operating expenses (per bbl)	$	3.53		$	3.04		$	4.13		$	4.04
Retail Network:
Number of stores (at period end)(8)		252			311			312			312
Gasoline volume (m gal)		234,078			280,796			304,815			296,518
Gasoline gross profit (cents/gal)		15.7			13.7			15.5			15.7
Average gasoline volume per store (m gal/month)		78.7			77.0			83.6			81.6
Distillate volume (m gal)		43,733			47,902			46,895			47,008
Distillate gross profit (cents/gal)		10.61			10.53			12.31			11.19
Merchandise sales (000s)	$	95,365		$	149,762		$	182,564		$	180,702
Merchandise gross margin		26.4	%		28.3	%		28.1	%		28.6	%
Merchandise profit (000s)	$	25,219		$	42,414		$	51,297		$	51,650
Average merchandise sales per store/per month (000s)	$	31.5		$	40.1		$	48.8		$	48.3

(1) Gross margin is defined as gross profit plus refining operating expenses. Refinery operating expenses are expenses incurred in refining and included in costs of goods sold in our consolidated financial statements. Refining operating expenses equals refining operating expenses per barrel, multiplied by the volume of total saleable products per day, multiplied by the number of days in the period.

(2) Refining operating expenses include refinery fuel produced and consumed in refinery operations.

(3) Fiscal 2002 includes eight months of Selling, general and administrative expenses for Country Fair operations and fiscal 2003 and 2004 include twelve months of Country Fair operations.

(4) In accordance with Statement of Financial Accounting Standards No. 145, “Rescission of Statements No. 4, 44 and 64, Amendment of FASB Statement No. 13, and Technical Corrections,” we have reclassified our gain on early extinguishment of debt in 2001.

(5) EBITDA represents net income (loss), excluding gains on early extinguishment of debt as per the indenture, plus interest expense, taxes, depreciation, amortization and prepayment premium on debt refinancing. EBITDA should not be considered in isolation from, or as a substitute for, net income, cash flow from operations or other cash flow statement data prepared in accordance with generally accepted accounting principles of the United States (“GAAP”) as a measure of a company’s profitability or liquidity. We use this term because it is a widely accepted financial indicator utilized to analyze and compare companies on the basis of operating performance and is used to calculate certain debt coverage ratios included in several of our debt agreements. Our method of computation of EBITDA may or may not be comparable to other similarly titled measures used by other companies.

(6) Long-term debt is defined as total debt including current maturities less Revolving Credit Facility, as reflected under “Capitalization.”

(7) Net debt is defined as total debt, less cash, as reflected under “Capitalization.”

(8) Fiscal 2002, 2003 and 2004 exclude 60 stores operated under long-term management agreements.

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	Year Ended August 31,
	2001			2002			2003			2004
EBITDA Reconciliation:
Net income (loss)	$	17,279		$	(24,941	)	$	(5,271	)	$	11,395
Gain on early extinguishment of debt		(5,210	)		—			—			—
Interest expense		21,051			20,064			21,376			21,445
Income tax expense (benefit)		12,021			(15,596	)		(3,370	)		7,400
Depreciation		10,713			11,774			12,218			12,453
Amortization		3,716			3,056			3,602			4,167
Prepayment premium of debt refinancing		—			—			—			3,228
EBITDA	$	59,570		$	(5,643	)	$	28,555		$	60,088

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RISK FACTORS

Holders of old notes should carefully consider the following risk factors in addition to the other information contained in this prospectus before tendering their old notes in the exchange offer for new notes, although the risk factors (other than those dealing specifically with the new notes) are generally applicable to the old notes as well as the new notes. Any of the following risks could materially and adversely affect our business, financial condition or results of operations. The risks described below are not the only risks facing us. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial may also materially and adversely affect our business, financial condition or results of operations. In the following discussion of risk factors, when we refer to the term “note” or “notes,” we are referring to both the old notes and the new notes to be issued in the exchange offer.

Risks Relating to the Business

Substantial Leverage and Ability to Service and Refinance Debt

As of August 31, 2004, our aggregate total debt was $212.9 million and our stockholder’s equity was $47.1 million. The ratio of our earnings to fixed charges for fiscal 2004 was 1.70. In addition, subject to the restrictions in the indenture and the Revolving Credit Facility described in “Description of Certain Indebtedness,” we may incur additional indebtedness from time to time to provide working capital, to finance acquisitions or capital expenditures or for other corporate purposes.

The level of our indebtedness could have important consequences to holders of the notes, including: (i) a substantial portion of our cash flow from operations must be dedicated to debt service and will not be available for other purposes; (ii) our ability to obtain additional debt financing in the future for working capital, capital expenditures or acquisitions may be limited; and (iii) our level of indebtedness could limit our flexibility in planning for and reacting to changes in the industry and economic conditions generally.

Our ability to pay interest and principal on the notes and to satisfy our other debt obligations will depend upon our future operating performance, which will be affected by prevailing economic conditions and financial, business and other factors, most of which are beyond our control. We anticipate that our operating cash flow, together with borrowings under the Revolving Credit Facility, will be sufficient to meet our operating expenses and capital expenditures, to sustain operations and to service our interest requirements as they become due. If we are unable to generate sufficient cash flow to service our indebtedness and fund our capital expenditures, we will be forced to adopt an alternative strategy that may include reducing or delaying capital expenditures, selling assets, restructuring or refinancing our indebtedness (including the notes) or seeking additional equity capital. There can be no assurance that any of these strategies could be effected on satisfactory terms, if at all. Our ability to meet our debt service obligations will be dependent upon our future performance which, in turn, is subject to future economic conditions and to financial, business and other factors, many of which are beyond our control.

Volatility of Crude Oil Prices and Refining Margins

We are engaged primarily in the business of refining crude oil and selling refined petroleum products. Our earnings and cash flows from operations are dependent upon us realizing refining and marketing margins at least sufficient to cover our fixed and variable expenses. The cost of crude oil and the prices of refined products depend upon numerous factors beyond our control, such as the supply of and demand for crude oil, gasoline and other refined products, which are affected by, among other things, changes in domestic and foreign economies, political events, and instability or armed conflict in oil producing regions, production levels, weather, the availability of imports, the marketing of gasoline and other refined petroleum products by our competitors, the marketing of competitive fuels, the impact of energy conservation efforts, and the extent of domestic and foreign government regulation and taxation. A large, rapid increase in crude oil prices would adversely affect our operating margins if the increased cost of raw materials could not be passed to our customers on a timely basis, and would adversely affect our sales volumes if consumption of refined products, particularly gasoline, were to

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decline as a result of such price increases. A sudden drop in crude oil prices would adversely affect our operating margins since wholesale prices typically decline promptly in response thereto, while we will be paying the higher crude oil prices until our crude supply at such higher prices is processed. The prices which we may obtain for our refined products are also affected by regional factors, such as local market conditions and the operations of competing refiners of petroleum products as well as seasonal factors influencing demand for such products. In addition, our refinery through put and operating costs may vary due to scheduled and unscheduled maintenance shutdowns.

Competition

Many of our competitors are fully integrated companies engaged on a national and/or international basis in many segments of the petroleum business, including exploration, production, transportation, refining and marketing, on scales much larger than ours. Large oil companies, because of the diversity and integration of their operations, larger capitalization and greater resources, may be better able to withstand volatile market conditions, compete on the basis of price, and more readily obtain crude oil in times of shortages.

We face strong competition in our market for the sale of refined petroleum products, including gasoline. Such competitors have in the past and may in the future engage in marketing practices that result in profit margin deterioration for us for periods of time, causing an adverse impact on us.

Concentration of Refining Operations

All of our refinery activities are conducted at our facility in Warren, Pennsylvania. In addition, we obtain substantially all of our crude oil supply through our owned and operated Kiantone Pipeline. Any prolonged disruption to the operations of our refinery or the Kiantone Pipeline, whether due to labor difficulties, destruction of or damage to such facilities, severe weather conditions, interruption of utilities service or other reasons, would have a material adverse effect on our business, results of operations or financial condition. In order to minimize the effects of any such incident, we maintain a full schedule of insurance coverage which includes, but is not limited to, property and business interruption insurance. The property insurance policy has a combined loss limit for a property loss at our refinery and business interruption of $300 million. A deductible of $5 million applies to physical damage claims, with a 45-day wait period deductible for business interruption. We believe that our business interruption coverage is adequate. However, there can be no assurance that the proceeds of any such insurance would be paid in a timely manner or be in an amount sufficient to meet our needs if such an event were to occur.

Impact of Environmental Regulation; Governmental Regulation

Our operations and properties are subject to increasingly more stringent environmental laws and regulations, such as those governing the use, storage, handling, generation, treatment, transportation, emission, release, discharge and disposal of certain materials, substances and wastes, remediation of areas of contamination and the health and safety of employees. These laws may impose strict, and under certain circumstances, joint and several, liability for remediation costs and also can impose responsibility for natural resource damages. Failure to comply, including failure to obtain required permits, can also result in significant fines and penalties, as well as potential claims for personal injury and property damage.

We cannot predict the nature, scope or effect of environmental legislation or regulatory requirements that could be imposed or how existing or future laws or regulations will be administered or interpreted. The nature of our operations and previous operations by others at certain of our facilities exposes us to the risk of claims under those laws and regulations. There can be no assurance that material costs or liabilities will not be incurred in connection with such claims, including potential claims arising from discovery of currently unknown conditions.

We are currently conducting remediation projects at several of our owned facilities including our refining site at Warren, Pennsylvania, our terminals at Rochester, New York and Tonawanda, New York and

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approximately 167 retail locations. Environmental compliance has required, and will continue to require, capital expenditures. We spent approximately $1.7 million in fiscal year 2004 for such compliance activities and capital expenditures for such activities are not expected to be significantly more in fiscal year 2005 than expenditures in fiscal year 2004.

Investments in the Coker Project

We intend to commence our delayed Coker and related infrastructure project in the first quarter of 2005, at which time we plan to raise the necessary financing and commence construction. We expect an approximate three-year construction and start-up period, with commercial operations commencing in the first quarter of 2008. Risks that could reduce or delay the expected long-term benefits from this project include timing delays, over budgeting and associated construction risks. The availability of future borrowings and access to the capital markets for equity financing for the Coker project depends on prevailing market conditions and the acceptability of financing terms offered to us.

Nature of Demand for Asphalt

For the fiscal year ended August 31, 2004, asphalt sales represented 12.6% of our total revenues. Over the same period, approximately 80% of our asphalt was produced for use in paving or repaving roads and highways. The level of paving activity is, in turn, dependent upon funding available from federal, state and local governments. Funding for paving has been affected in the past, and may be affected in the future, by budget difficulties at the federal, state or local levels. A decrease in demand for asphalt could cause us to sell asphalt at significantly lower prices or to curtail production of asphalt by processing more costly lower sulfur content crude oil which would adversely affect refining margins. In addition, paving activity in our marketing area generally ceases in the winter months. Therefore, much of our asphalt production during the winter must be stored until warmer weather arrives, resulting in deferred revenue and inventory buildups each year.

Controlling Stockholder

John A. Catsimatidis indirectly owns all of our outstanding voting stock. By virtue of such stock ownership, Mr. Catsimatidis has the power to control all matters submitted to our stockholders and to elect all of our directors. The interests of Mr. Catsimatidis as equity holder may differ from the interests of holders of the notes.

Restrictions Imposed by Terms of Indebtedness

The terms of the Revolving Credit Facility, the indenture and the other agreements governing our indebtedness impose operating and financing restrictions on us and our subsidiaries. Such restrictions affect, and in many respects limit or prohibit, among other things, our ability and our subsidiaries’ ability to incur additional indebtedness, create liens, sell assets, or engage in mergers or acquisitions. These restrictions could limit our ability to plan for or react to market conditions or meet extraordinary capital needs or otherwise could restrict corporate activities. There can be no assurance that such restrictions will not adversely affect our ability to finance our future operations or capital needs or to engage in other business activities which will be in our interest. See “Description of the Notes—Certain Covenants” and “Description of Certain Indebtedness.”

Our pension plans are currently under funded and we may have to make significant cash payments to the plans, reducing the cash available for our business.

Substantially all of our employees are covered by three noncontributory defined benefit pension plans. As of August 31, 2004, as measured under FAS 87 (which is not the same as the measure used for purposes of calculating required contributions and potential liability to the Pension Benefit Guaranty Corporation, or PBGC), the aggregate accumulated benefit obligation under our pension plans was approximately $48.3 million and the value of the assets of the plans was approximately $32.7 million. In fiscal year 2004, we contributed $4.1 million to the three plans, and we currently expect to make additional contributions to our pension plans of $3.9 million

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in fiscal year 2005 and $3.9 million in fiscal year 2006. If the performance of the assets in our pension plans does not meet our expectations, or if other actuarial assumptions are modified, our contributions for those fiscal years could be higher than we expect.

Our pension plans are subject to the Employee Retirement Income Security Act of 1974, or ERISA. Under ERISA, the PBGC generally has the authority to terminate an under funded pension plan if the possible long-run loss of the PBGC with respect to the plan may reasonably be expected to increase unreasonably if the plan is not terminated. In the event our pension plans are terminated for any reason while the plans are under funded, we will incur a liability to the PBGC that may be equal to the entire amount of the under funding and, under certain circumstances, the liability could be senior to the notes.

Risks Relating to the Notes

Change of Control

Upon a Change of Control (as defined herein), the holders of the notes have the right to require us to offer to purchase all of the outstanding notes at 101% of the principal amount thereof, plus accrued and unpaid interest to the date of purchase. There can be no assurance that we will have sufficient funds available or will be permitted by our other debt agreements to purchase the notes upon the occurrence of a Change of Control. In addition, a Change of Control may require us to offer to purchase other outstanding indebtedness and may cause a default under the Revolving Credit Facility. The inability to purchase all of the tendered notes would constitute an Event of Default (as defined herein) under the indenture. See “Description of the Notes—Change of Control.”

Ranking of the Notes; Security

Although the old notes are, and the new notes will be, senior unsecured obligations for us ranking pari passu with all of our other existing and future senior debt, our indebtedness under the Revolving Credit Facility will be secured by all of our accounts receivable and certain of our and our subsidiaries’ inventory. Accordingly, the old notes and the subsidiary guarantees are, and the new notes and subsidiary guarantees will be, effectively subordinated to the extent of such security interests. See “Description of the Notes—Ranking.”

Fraudulent Conveyance; Unenforceability of Subsidiary Guarantees

We believe that the indebtedness represented by the subsidiary guarantees is being incurred for proper purposes and in good faith and each subsidiary guarantor is, and after the consummation of the exchange offer will be, solvent, will have sufficient capital for carrying on its business and will be able to pay its debts as they mature. Revenues of the subsidiary guarantors accounted for approximately 56% of our consolidated revenues for fiscal year 2003 and 53% for fiscal year 2004 and as of August 31, 2003 and August 31, 2004, the assets of such subsidiary guarantors were approximately 40% and 41%, respectively, of our assets on a consolidated basis. If a court of competent jurisdiction in a suit by a creditor or representative of creditors of any subsidiary guarantor (such as a trustee in bankruptcy or a debtor-in-possession) were to find that, at the time of the incurrence of the indebtedness represented by the subsidiary guarantee, such subsidiary guarantor was insolvent, was rendered insolvent by reason of such incurrence of such guarantee, was engaged in a business or transaction for which its remaining assets constituted unreasonably small capital, intended to incur, or believes that it would incur, debts beyond its ability to pay such debts as they matured, or intended to hinder, delay or defraud its creditors, and that the indebtedness was incurred for less than fair consideration or reasonably equivalent value, then such court could, among other things, (a) void all or a portion of such subsidiary guarantor’s obligations to the holders of the notes, the effect of which could be that the holders of the notes may not be repaid in full and/or (b) subordinate such subsidiary guarantor’s obligations to the holders of the notes to other existing and future indebtedness of such subsidiary guarantor, the effect of which would be to entitle such other creditors to be paid in full before any payment could be made on the notes.

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Risks Related to the Exchange Offer

If you fail to follow the exchange offer procedures, your old notes will not be accepted for exchange.

We will not accept your old notes for exchange if you do not follow the exchange offer procedures. We will issue new notes as part of this exchange offer only after timely receipt of your old notes, a properly completed and duly executed letter of transmittal and all other required documents or if you comply with the guaranteed delivery procedures for tendering your old notes. Therefore, if you want to tender your old notes, please allow sufficient time to ensure timely delivery. If we do not receive your old notes, letter of transmittal, and all other required documents by the expiration date of the exchange offer, or you do not otherwise comply with the guaranteed delivery procedures for tendering your old notes, we will not accept your old notes for exchange. We are under no duty to give notification of defects or irregularities with respect to the tenders of old notes for exchange. If there are defects or irregularities with respect to your tender of old notes, we will not accept your old notes for exchange unless we decide in our sole discretion to waive such defects or irregularities.

Any outstanding old notes after the consummation of the exchange offer will continue to be subject to existing transfer restrictions, and the holders of old notes after the consummation of the exchange offer may not be able to sell their old notes.

We did not register the old notes under the Securities Act or any state securities laws, nor do we intend to do so after the exchange offer. As a result, the old notes may only be transferred in limited circumstances under the securities laws. If you do not exchange your old notes in the exchange offer, you will lose your right to have the old notes registered under the Securities Act, subject to certain limitations. If you continue to hold old notes after the exchange offer, you may be unable to sell the old notes. Old notes that are not tendered or are tendered but not accepted will, following the exchange offer, continue to be subject to existing transfer restrictions.

Lack of an active market for the new notes may adversely affect the liquidity and market price of the new notes.

While the old notes are presently eligible for trading in the PORTAL^® Market, there is no existing market for the new notes. We do not intend to apply for a listing of the new notes on any securities exchange. We do not know if an active public market for the new notes will develop or, if developed, will continue. If an active public market does not develop or is not maintained, the market price and liquidity of the new notes may be adversely affected. We cannot make any assurances regarding the liquidity of the market for the new notes, the ability of holders to sell their new notes or the price at which holders may sell their new notes. In addition, the liquidity and the market price of the new notes may be adversely affected by changes in the overall market for securities similar to the new notes, by changes in our business, financial condition or results of operations and by changes in conditions in our industry.

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USE OF PROCEEDS

We will not receive any proceeds from the exchange offer. Because we are exchanging the new notes for the old notes, which have substantially identical terms, the issuance of the new notes will not result in any increase in our indebtedness. The exchange offer is intended to satisfy our obligations under the registration rights agreement.

The net proceeds of $191,600,000 from the offering of the old notes were used to retire all of our outstanding 10 ³/4% Senior Unsecured Notes due 2007, Series B, to pay accrued interest of $3,700,000 and a redemption premium related thereto and to pay a dividend of $5,000,000 to our stockholder. A loss of $6,770,000 on the early extinguishment of debt was recorded consisting of a redemption premium of $3,228,000, a write-off of deferred financing costs of $1,990,000 and additional interest paid of $1,552,000.

CAPITALIZATION

The following is a summary of our consolidated debt and total capitalization as of August 31, 2004. You should read this summary in conjunction with “Selected Financial Data” and our consolidated financial statements, including the accompanying notes, incorporated by reference in this prospectus.

	As of August 31, 2004
	(dollars in thousands)
Cash and cash equivalents	$	11,552
Total debt:
Revolving Credit Facility(1)	$	13,000
10 1/2% Senior Notes due 2012		200,000
Debt discount		(2,635	)
Other debt		2,583
Total debt including current maturities		212,948
Stockholder’s equity		47,106
Total capitalization	$	260,054

(1) The maximum borrowings allowed under our Revolving Credit Facility is $75,000,000. For a further description of the secured Revolving Credit Facility, see “Description of Certain Indebtedness.”

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THE EXCHANGE OFFER

Purpose of the Exchange Offer

Simultaneously with the issuance and sale of the old notes on August 6, 2004, the issuer and the subsidiary guarantors entered into a registration rights agreement with the initial purchasers of the old notes. Under the registration rights agreement, the issuer and the subsidiary guarantors agreed, among other things, to:

• file with the SEC an exchange offer registration statement relating to the new notes on or prior to December 17, 2004;

• use their best efforts to have the registration statement declared effective by the SEC on or prior to March 18, 2005; and

• use their best efforts to consummate an exchange offer, in which new notes will be issued in exchange for old notes, within 45 business days, or longer if required by federal securities laws, after the registration statement is declared effective.

The issuer and the subsidiary guarantors are conducting the exchange offer to satisfy these obligations under the registration rights agreement.

Under some circumstances, the issuer and the subsidiary guarantors may be required to file and use their reasonable best efforts to cause to be declared effective by the SEC, in addition to or in lieu of the exchange offer registration statement, a shelf registration statement covering resales of the old notes. If the issuer and the subsidiary guarantors fail to meet specified deadlines under the registration rights agreement, then the issuer, and, to the extent of their guarantees of the notes, the subsidiary guarantors, will be obligated to pay liquidated damages to holders of the old notes. See “Description of the Notes—Registration Rights; Liquidated Damages.”

Terms of the Exchange Offer

The issuer and the subsidiary guarantors are offering to exchange an aggregate principal amount of up to $200 million of new notes and guarantees thereof for a like aggregate principal amount of old notes and guarantees thereof. The terms of the new notes are substantially identical in all respects (including principal amount, interest rate and maturity) to the terms of the old notes for which they may be exchanged pursuant to this exchange offer, except that the new notes:

• will be freely transferable by holders thereof; and

• will be issued free of any covenant regarding registration.

The new notes will represent the same debt as the old notes and will be governed by the same indenture, which is governed by New York law. For a complete description of the terms of the new notes, see “Description of the Notes.” We will not receive any cash proceeds from the exchange offer.

The exchange offer is not extended to holders of old notes in any jurisdiction where the exchange offer would not comply with the securities or blue sky laws of that jurisdiction.

As of the date of this prospectus, $200 million aggregate principal amount of old notes is outstanding and registered in the name of Cede & Co., as nominee for DTC. Only registered holders of the old notes, or their legal representatives and attorneys-in-fact, as reflected on the records of the trustee under the indenture, may participate in the exchange offer. The issuer and the subsidiary guarantors will not set a fixed record date for determining registered holders of the old notes entitled to participate in the exchange offer. This prospectus, together with the letter of transmittal, is being sent to all registered holders of old notes and to others believed to have beneficial interests in the old notes.

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Upon the terms and subject to the conditions described in this prospectus and in the accompanying letter of transmittal, the issuer will accept for exchange old notes which are properly tendered on or before the expiration date and not withdrawn as permitted below. As used in this section of the prospectus entitled, “The Exchange Offer,” the term “expiration date” means 5:00 p.m., New York City time, on                     . If, however, the issuer and the subsidiary guarantors, in their sole discretion, extend the period of time for which the exchange offer is open, the term “expiration date” means the latest time and date to which the exchange offer is so extended. Old notes tendered in the exchange offer must be in denominations of the principal amount of $1,000 and any integral multiple of $1,000 in excess thereof.

If you do not tender your old notes or if you tender old notes that are not accepted for exchange, your old notes will remain outstanding. Existing transfer restrictions would continue to apply to old notes that remain outstanding. See “—Consequences of Failure to Exchange Old Notes” for more information regarding old notes outstanding after the exchange offer. Holders of the old notes do not have any appraisal or dissenters’ rights in connection with the exchange offer.

None of the issuer and the subsidiary guarantors, their respective boards of directors or their management recommends that you tender or not tender old notes in the exchange offer or has authorized anyone to make any recommendation. You must decide whether to tender old notes in the exchange offer and, if you decide to tender, the aggregate amount of old notes to tender.

The issuer and the subsidiary guarantors have the right, in their reasonable discretion and in accordance with applicable law, at any time:

• to extend the expiration date;

• to delay the acceptance of any old notes or to terminate the exchange offer and not accept any old notes for exchange if the issuer and the subsidiary guarantors determine that any of the conditions to the exchange offer described below under “—Conditions to the Exchange Offer” have not occurred or have not been satisfied; and

• to amend the terms of the exchange offer in any manner.

During an extension, all old notes previously tendered will remain subject to the exchange offer and may be accepted for exchange by the issuer.

We will give oral or written notice of any extension, delay, non-acceptance, termination or amendment to the exchange agent as promptly as practicable and make a public announcement of the extension, delay, non-acceptance, termination or amendment. In the case of an extension, the announcement will be made no later than 9:00 a.m., New York City time, on the next business day after the previously scheduled expiration date.

If the issuer and the subsidiary guarantors amend the exchange offer in a manner that we consider material, we will as promptly as practicable distribute to the holders of the old notes a prospectus supplement or, if appropriate, an updated prospectus from a post-effective amendment to the registration statement of which this prospectus is a part disclosing the change and extend the exchange offer for a period of five to ten business days, depending upon the significance of the amendment of the exchange offer and the manner of disclosure to the registered holders, if the exchange offer would otherwise expire during the five to ten business day period.

Procedures for Tendering Old Notes

Valid Tender

When the holder of old notes tenders, and the issuer accepts, old notes for exchange, a binding agreement between the issuer and the subsidiary guarantors, on the one hand, and the tendering holder, on the other hand, shall be created, upon the terms and subject to the conditions set forth in this prospectus and the accompanying letter of transmittal.

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Except as described below under “—Guaranteed Delivery,” a holder of old notes who wishes to tender old notes for exchange must, on or prior to the expiration date:

• transmit a properly completed and duly executed letter of transmittal, together with all other documents required by the letter of transmittal, to the exchange agent at the address provided below under “—Exchange Agent”; or

• if old notes are tendered in accordance with the book-entry procedures described below under “—Book-Entry Transfers,” arrange with DTC to cause an agent’s message to be transmitted to the exchange agent at the address provided below under “—Exchange Agent.”

The term “agent’s message” means a message transmitted to the exchange agent by DTC which states that DTC has received an express acknowledgment that the tendering holder agrees to be bound by the letter of transmittal and that the issuer and the subsidiary guarantors may enforce the letter of transmittal against that holder.

In addition, on or prior to the expiration date:

• the exchange agent must receive the certificates for the old notes being tendered; or

• the exchange agent must receive a confirmation, referred to as a “book-entry confirmation,” of the book-entry transfer of the old notes being tendered into the exchange agent’s account at DTC, and the book-entry confirmation must include an agent’s message; or

• the holder must comply with the guaranteed delivery procedures described below under “—Guaranteed Delivery.”

If you beneficially own old notes and those notes are registered in the name of a broker, dealer, commercial bank, trust company or other nominee or custodian and you wish to tender your old notes in the exchange offer, you should contact the registered holder as soon as possible and instruct it to tender the old notes on your behalf and comply with the instructions set forth in this prospectus and the letter of transmittal.

The method of delivery of the certificates for the old notes, the letter of transmittal and all other required documents is at your election and risk. If delivery is by mail, we recommend registered mail with return receipt requested, properly insured, or overnight delivery service. In all cases, you should allow sufficient time to assure delivery to the exchange agent before the expiration date. Delivery is complete when the exchange agent actually receives the items to be delivered. Delivery of documents to DTC in accordance with DTC’s procedures does not constitute delivery to the exchange agent. Do not send letters of transmittal or old notes to the issuer or any subsidiary guarantor.

The issuer will not accept any alternative, conditional or contingent tenders. Each tendering holder, by execution of a letter of transmittal or by causing the transmission of an agent’s message, waives any right to receive any notice of the acceptance of such tender.

Signature Guarantees

Signatures on a letter of transmittal or a notice of withdrawal, as the case may be, must be guaranteed unless the old notes surrendered for exchange are tendered:

• by a registered holder of old notes who has not completed the box entitled “Special Issuance Instructions” or “Special Delivery Instructions” on the letter of transmittal; or

• for the account of an eligible institution.

An “eligible institution” is a firm or other entity which is identified as an “Eligible Guarantor Institution” in Rule 17Ad-15 under the Exchange Act, including:

• a bank;

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• a broker, dealer, municipal securities broker or dealer or government securities broker or dealer;

• a credit union;

• a national securities exchange, registered securities association or clearing agency; or

• a savings association.

If signatures on a letter of transmittal or notice of withdrawal are required to be guaranteed, the guarantor must be an eligible institution.

If old notes are registered in the name of a person other than the signer of the letter of transmittal, the old notes surrendered for exchange must be endorsed or accompanied by a written instrument or instruments of transfer or exchange, in satisfactory form as determined by the issuer and the subsidiary guarantors in their sole discretion, duly executed by the registered holder with the holder’s signature guaranteed by an eligible institution, and must also be accompanied by such opinions of counsel, certifications and other information as the issuer and the subsidiary guarantors or the trustee under the indenture for the old notes may require in accordance with the restrictions on transfer applicable to the old notes.

Book-Entry Transfers

For tenders by book-entry transfer of old notes cleared through DTC, the exchange agent will make a request to establish an account at DTC for purposes of the exchange offer. Any financial institution that is a DTC participant may make book-entry delivery of old notes by causing DTC to transfer the old notes into the exchange agent’s account at DTC in accordance with DTC’s procedures for transfer. The exchange agent and DTC have confirmed that any financial institution that is a participant in DTC may use the Automated Tender Offer Program, or ATOP, procedures to tender old notes. Accordingly, any participant in DTC may make book-entry delivery of old notes by causing DTC to transfer those old notes into the exchange agent’s account at DTC in accordance with DTC’s ATOP procedures.

Notwithstanding the ability of holders of old notes to effect delivery of old notes through book-entry transfer at DTC, either:

• the letter of transmittal or an agent’s message in lieu of the letter of transmittal, with any required signature guarantees and any other required documents, such as endorsements, bond powers, opinions of counsel, certifications and powers of attorney, if applicable, must be transmitted to and received by the exchange agent prior to the expiration date at the address given below under “—Exchange Agent”; or

• the guaranteed delivery procedures described below must be complied with.

Guaranteed Delivery

If a holder wants to tender old notes in the exchange offer and (1) the certificates for the old notes are not immediately available or all required documents are unlikely to reach the exchange agent on or prior to the expiration date, or (2) a book-entry transfer cannot be completed on a timely basis, the old notes may be tendered if:

• the tender is made by or through an eligible institution;

• the eligible institution delivers a properly completed and duly executed notice of guaranteed delivery, substantially in the form provided, to the exchange agent by hand, facsimile, mail or overnight delivery service on or prior to the expiration date:

• stating that the tender is being made;

• setting forth the name and address of the holder of the old notes being tendered and the amount of the old notes being tendered; and

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• guaranteeing that, within three New York Stock Exchange trading days after the date of execution of the notice of guaranteed delivery, the certificates for all physically tendered old notes, in proper form for transfer, or a book-entry confirmation, as the case may be, together with a properly completed and duly executed letter of transmittal, or an agent’s message, with any required signature guarantees and any other documents required by the letter of transmittal, will be deposited by the eligible institution with the exchange agent; and

• the exchange agent receives the certificates for the old notes, or a book-entry confirmation, and a properly completed and duly executed letter of transmittal, or an agent’s message in lieu thereof, with any required signature guarantees and any other documents required by the letter of transmittal within three New York Stock Exchange trading days after the date of execution of the notice of guaranteed delivery.

Determination of Validity

The issuer and the subsidiary guarantors, in their sole discretion, will resolve all questions regarding the form of documents, validity, eligibility, including time of receipt, and acceptance for exchange of any tendered old notes. The determination of these questions by the issuer and the subsidiary guarantors, as well as their interpretation of the terms and conditions of the exchange offer, including the letter of transmittal, will be final and binding on all parties. A tender of old notes is invalid until all defects and irregularities have been cured or waived. Holders must cure any defects and irregularities in connection with tenders of old notes for exchange within such reasonable period of time as the issuer and the subsidiary guarantors will determine, unless they waive the defects or irregularities. None of the issuer and the subsidiary guarantors, any of their respective affiliates or assigns, the exchange agent or any other person is under any obligation to give notice of any defects or irregularities in tenders, nor will any of them be liable for failing to give any such notice.

The issuer and the subsidiary guarantors reserve the absolute right, in their sole and absolute discretion:

• to reject any tenders determined to be in improper form or unlawful;

• to waive any of the conditions of the exchange offer; and

• to waive any condition or irregularity in the tender of old notes by any holder, whether or not we waive similar conditions or irregularities in the case of other holders.

If any letter of transmittal, certificate, endorsement, bond power, power of attorney, or any other document required by the letter of transmittal is signed by a trustee, executor, administrator, guardian, attorney-in-fact, officer of a corporation or other person acting in a fiduciary or representative capacity, that person must indicate such capacity when signing. In addition, unless waived by the issuer, the person must submit proper evidence satisfactory to the issuer, in its sole discretion, of the person’s authority to so act.

Acceptance of Old Notes for Exchange; Delivery of New Notes

Upon satisfaction or waiver of all of the conditions to the exchange offer, the issuer will, promptly after the expiration date, accept all old notes properly tendered and issue new notes registered under the Securities Act. See “—Conditions to the Exchange Offer” for a discussion of the conditions that must be satisfied or waived before old notes are accepted for exchange. The exchange agent might not deliver the new notes to all tendering holders at the same time. The timing of delivery depends upon when the exchange agent receives and processes the required documents.

For purposes of the exchange offer, the issuer will be deemed to have accepted properly tendered old notes for exchange when it gives oral or written notice to the exchange agent of acceptance of the tendered old notes, with written confirmation of any oral notice to be given promptly thereafter. The exchange agent is the agent of the issuer for receiving tenders of old notes, letters of transmittal and related documents.

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For each old note accepted for exchange, the holder will receive a new note registered under the Securities Act having a principal amount equal to, and in the denomination of, that of the surrendered old note. Accordingly, registered holders of new notes issued in the exchange offer on the relevant record date for the first interest payment date following the consummation of the exchange offer will receive interest accruing from the most recent date to which interest has been paid on the old notes or, if no interest has been paid on the old notes, from August 6, 2004. Old notes accepted for exchange will cease to accrue interest from and after the date of consummation of the exchange offer.

In all cases, the issuer will issue new notes in the exchange offer for old notes that are accepted for exchange only after the exchange agent timely receives:

• certificates for those old notes or a timely book-entry confirmation of the transfer of those old notes into the exchange agent’s account at DTC;

• a properly completed and duly executed letter of transmittal or an agent’s message; and

• all other required documents, such as endorsements, bond powers, opinions of counsel, certifications and powers of attorney, if applicable.

If for any reason under the terms and conditions of the exchange offer the issuer does not accept any tendered old notes, or if a holder submits old notes for a greater principal amount than the holder desires to exchange, the issuer will return the unaccepted or non-exchanged old notes without cost to the tendering holder promptly after the expiration or termination of the exchange offer. In the case of old notes tendered by book-entry transfer through DTC, any unexchanged old notes will be credited to an account maintained with DTC.

Resales of New Notes

Based on interpretive letters issued by the SEC staff to other, unrelated issuers in transactions similar to the exchange offer, we believe that a holder of new notes, other than a broker-dealer, may offer new notes (together with the guarantees thereof) for resale, resell and otherwise transfer the new notes (and the related guarantees) without delivering a prospectus to prospective purchasers, if the holder acquired the new notes in the ordinary course of business, has no intention of engaging in a “distribution,” as defined under the Securities Act, of the new notes and is not an “affiliate,” as defined under the Securities Act, of the issuer or any subsidiary guarantor. We will not seek our own interpretive letter. As a result, we cannot assure you that the SEC staff would take the same position with respect to this exchange offer as it did in interpretive letters to other parties in similar transactions.

If the holder is an affiliate of the issuer or any subsidiary guarantor or is engaged in, or intends to engage in, or has an arrangement or understanding with any person to participate in, a distribution of the new notes, that holder or other person may not rely on the applicable interpretations of the staff of the SEC and must comply with the registration and prospectus delivery requirements of the Securities Act in connection with any resale transaction.

By tendering old notes, the holder of those old notes will represent to the issuer and the subsidiary guarantors that, among other things:

• the holder is not an affiliate of the issuer or any subsidiary guarantor;

• the holder is acquiring the new notes in its ordinary course of business;

• the holder is not engaged in, does not intend to engage in and has no arrangement or understanding with any person to participate in a distribution of the new notes; and

• the holder is not acting on behalf of any person who could not truthfully make the foregoing representations.

Any broker-dealer that holds old notes acquired for its own account as a result of market-making activities or other trading activities (other than old notes acquired directly from the issuer) may exchange those old notes

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pursuant to the exchange offer; however, such broker-dealer may be deemed to be an “underwriter” within the meaning of the Securities Act and must, therefore, deliver a prospectus meeting the requirements of the Securities Act in connection with any resales of the new notes received by such broker-dealer in the exchange offer. To date, the SEC has taken the position that broker-dealers may use a prospectus such as this one to fulfill their prospectus delivery requirements with respect to resales of new notes received in an exchange such as the exchange pursuant to the exchange offer, if the old notes for which the new notes were received in the exchange were acquired for their own accounts as a result of market-making or other trading activities. Any profit on these resales of new notes and any commissions or concessions received by a broker-dealer in connection with these resales may be deemed to be underwriting compensation under the Securities Act. The letter of transmittal states that by acknowledging that it will deliver and by delivering a prospectus, a broker-dealer will not admit that it is an “underwriter” within the meaning of the Securities Act. See “Plan of Distribution and Selling Restrictions” for a discussion of the exchange and resale obligations of broker-dealers in connection with the exchange offer and the new notes.

Withdrawal Rights

You can withdraw tenders of old notes at any time prior to the expiration date. For a withdrawal to be effective, you must deliver a written notice of withdrawal to the exchange agent or comply with the appropriate procedures of ATOP. Any notice of withdrawal must:

• specify the name of the person that tendered the old notes to be withdrawn;

• identify the old notes to be withdrawn, including the principal amount of those old notes; and

• where certificates for old notes are transmitted, the name of the registered holder of the old notes if different from the person withdrawing the old notes.

If you delivered or otherwise identified certificated old notes to the exchange agent, you must submit the serial numbers of the old notes to be withdrawn and the signature on the notice of withdrawal must be guaranteed by an eligible institution, except in the case of old notes tendered for the account of an eligible institution. See “The Exchange Offer—Procedures for Tendering Old Notes—Signature Guarantees” for further information on the requirements for guarantees of signatures on notices of withdrawal. If you tendered old notes in accordance with applicable book-entry transfer procedures, the notice of withdrawal must specify the name and number of the account at DTC to be credited with the withdrawn old notes and you must deliver the notice of withdrawal to the exchange agent. You may not rescind withdrawals of tender; however, old notes properly withdrawn may again be tendered at any time on or prior to the expiration date in accordance with the procedures described under “The Exchange Offer—Procedures for Tendering Old Notes.”

The issuer and the subsidiary guarantors will determine, in their sole discretion, all questions regarding the validity, form and eligibility, including time of receipt, of notices of withdrawal. Their determination of these questions as well as their interpretation of the terms and conditions of the exchange offer (including the letter of transmittal) will be final and binding on all parties. None of the issuer and the subsidiary guarantors, any of their respective affiliates or assigns, the exchange agent or any other person is under any obligation to give notice of any irregularities in any notice of withdrawal, nor will any of them be liable for failing to give any such notice.

Withdrawn old notes will be returned to the holder as promptly as practicable after withdrawal without cost to the holder. In the case of old notes tendered by book-entry transfer through DTC, the old notes withdrawn will be credited to an account maintained with DTC.

Conditions to the Exchange Offer

Notwithstanding any other provision of the exchange offer, the issuer is not required to accept for exchange, or to issue new notes in exchange for, any old notes, and the issuer and the subsidiary guarantors may terminate or amend the exchange offer, if at any time prior to the expiration date, the issuer and the subsidiary guarantors determine that the exchange offer violates applicable law or SEC policy.

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The foregoing conditions are for our sole benefit, and we may assert them regardless of the circumstances giving rise to any such condition, or we may waive the conditions, completely or partially, whenever or as many times as we choose, in our reasonable discretion. The foregoing rights are not deemed waived because we fail to exercise them, but continue in effect, and we may still assert them whenever or as many times as we choose. If we determine that a waiver of conditions materially changes the exchange offer, the prospectus will be amended or supplemented, and the exchange offer extended, if appropriate, as described under “—Terms of the Exchange Offer.”

In addition, at a time when any stop order is threatened or in effect with respect to the registration statement of which this prospectus constitutes a part or with respect to the qualification of the indenture under the Trust Indenture Act of 1939, as amended, we will not accept for exchange any old notes tendered, and no new notes will be issued in exchange for any such old notes.

If the issuer and the subsidiary guarantors are not permitted to consummate the exchange offer because the exchange offer is not permitted by applicable law or SEC policy, the registration rights agreement requires that the issuer and the subsidiary guarantors file a shelf registration statement to cover resales of the old notes by the holders thereof who satisfy specified conditions relating to the provision of information in connection with the shelf registration statement. See “Description of the Notes—Registration Rights; Liquidated Damages.”

Exchange Agent

We have appointed The Bank of New York as exchange agent for the exchange offer. You should direct questions and requests for assistance, requests for additional copies of this prospectus or of the letter of transmittal and requests for notices of guaranteed delivery to the exchange agent. Holders of old notes seeking to tender old notes in the exchange offer should send certificates for old notes, letters of transmittal and any other required documents to the exchange agent by registered, certified or regular mail, hand delivery, overnight delivery service or facsimile, as follows:

For delivery by mail, hand or overnight:

The Bank of New York

Corporate Trust Operations

Reorganization Unit

101 Barclay Street — Floor 7E

New York, NY 10286

Attention: Mr. Enrique Lopez

For delivery by facsimile (for eligible institutions only):

(212) 298-1915

Attention: Mr. Enrique Lopez,

Reorganization Unit — Floor 7E

For confirmation by telephone call:

(212) 815-2742

If you deliver the letter of transmittal or any other required documents to an address or facsimile number other than as indicated above, your tender of old notes will be invalid.

Fees and Expenses

The registration rights agreement provides that the issuer and the subsidiary guarantors will bear all expenses in connection with the performance of their obligations relating to the registration of the new notes and the conduct of the exchange offer. These expenses include registration and filing fees, accounting and legal fees and printing costs, among others. We will pay the exchange agent reasonable and customary fees for its services and reasonable out-of-pocket expenses. We will also reimburse brokerage houses and other custodians, nominees and fiduciaries for customary mailing and handling expenses incurred by them in forwarding this prospectus and related documents to their clients that are holders of old notes and for handling or tendering for those clients.

We have not retained any dealer-manager in connection with the exchange offer and will not pay any fee or commission to any broker, dealer, nominee or other person, other than the exchange agent, for soliciting tenders of old notes pursuant to the exchange offer.

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Transfer Taxes

Holders who tender their old notes for exchange will not be obligated to pay any transfer taxes in connection with the exchange. If, however, new notes issued in the exchange offer are to be delivered to, or are to be issued in the name of, any person other than the holder of the old notes tendered, or if a transfer tax is imposed for any reason other than the exchange of old notes in connection with the exchange offer, then any such transfer taxes, whether imposed on the registered holder or on any other person, will be payable by the holder or such other person. If satisfactory evidence of payment of, or exemption from, such taxes is not submitted with the letter of transmittal, the amount of such transfer taxes will be billed directly to the tendering holder.

Accounting Treatment

The new notes will be recorded at the same carrying value as the old notes. Accordingly, we will not recognize any gain or loss for accounting purposes. We intend to amortize the expenses of the exchange offer and issuance of the old notes over the term of the new notes.

Consequences of Failure to Exchange Old Notes

Holders of the old notes do not have any appraisal or dissenters’ rights in the exchange offer. Old notes that are not tendered or are tendered but not accepted will, following the consummation of the exchange offer, remain outstanding and continue to be subject to the provisions in the indenture regarding the transfer and exchange of the old notes and the existing restrictions on transfer set forth in the legends on the old notes. In general, the old notes, unless registered under the Securities Act, may not be offered or sold except pursuant to an exemption from, or in a transaction not subject to, the Securities Act and applicable state securities laws. Following the consummation of the exchange offer, except in limited circumstances with respect to specific types of holders of old notes, the issuer and the subsidiary guarantors will have no further obligation to provide for the registration under the Securities Act of the old notes. See “Description of the Notes—Registration Rights; Liquidated Damages.” We do not currently anticipate that we will take any action following the consummation of the exchange offer to register the old notes under the Securities Act or under any state securities laws.

The new notes and any old notes which remain outstanding after consummation of the exchange offer will vote together for all purposes as a single class under the indenture.

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SELECTED FINANCIAL DATA

The financial and operating data set forth below should be read in conjunction with, and are qualified by reference to, the financial statements and related notes incorporated by reference in this prospectus, and the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” contained in our Annual Report on Form 10-K for the fiscal year ended August 31, 2004, which report is incorporated herein by reference. See “Where You Can Find More Information” and “Incorporation by Reference.”

	Year Ended August 31,
	2000			2001			2002			2003			2004
	(dollars in thousands)
Income Statement Data:
Net sales(1)	$	1,123,439		$	1,108,565		$	1,052,016		$	1,290,351		$	1,488,937
Gross margin(1)(2)		200,379			216,701			163,192			231,435			277,716
Refining operating expenses(3)		70,812			90,271			77,821			99,666			104,938
Selling, general and administrative expenses(4)		80,390			73,234			94,297			106,427			111,808
Operating income (loss)(1)		39,009			42,483			(20,700	)		13,123			48,517
Interest expense		22,962			21,051			20,064			21,376			21,445
Interest income		288			1,606			330			36			22
Other income (expense)(1)		(2,822	)		1,836			(1,345	)		(1,291	)		(2,201	)
Costs associated with terminated acquisition		—			(1,300	)		—			—			—
Equity in net earnings of affiliate		—			516			1,242			867			672
Gain (loss) on early extinguishment of debt(5)		—			5,210			—			—			(6,770	)
Income (loss) before income tax expense (benefit)		13,513			29,300			(40,537	)		(8,641	)		18,795
Income tax expense (benefit)		6,828			12,021			(15,596	)		(3,370	)		7,400
Net income (loss)		6,685			17,279			(24,941	)		(5,271	)		11,395
Balance Sheet Data (at end of period):
Total assets		340,368			355,557			371,440			361,428			366,382
Total debt		201,111			181,100			206,413			214,410			212,948
Total stockholder’s equity		55,106			75,966			48,196			41,975			47,106
Selected Financial Data:
EBITDA(6)		49,967			59,570			(5,643	)		28,555			60,088
Depreciation and amortization		13,492			14,429			14,830			15,820			16,620
Capital expenditures (cash)		5,900			10,052			9,061			8,043			10,075
Ratio of earnings to fixed charges(7)		1.56	x		2.31	x		—			—			1.70	x

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	Year Ended August 31,
	2000			2001			2002			2003			2004
Operating Information:
Refining Operations:
Crude oil input (mbbls/day)		62.1			62.4			62.2			58.8			63.7
Utilization		95.6	%		96.0	%		95.8	%		90.5	%		98.0	%
Total saleable refinery production (mbbls/day)		64.1			62.8			63.0			60.3			65.2
Gasoline		27.9			26.9			28.4			26.7			27.9
Middle distillates		17.5			17.1			16.2			14.7			16.6
Asphalt		15.1			15.7			16.2			16.4			17.4
Total saleable products (mbbls/day) (production & purchases)		70.4			70.1			70.0			66.1			71.0
Gross profit (per bbl)	$	2.31		$	2.34		$	(0.01	)	$	1.14		$	2.66
Refining operating expenses (per bbl)	$	2.75		$	3.53		$	3.04		$	4.13		$	4.04
Retail Network:
Number of stores (at period end)(8)		303			252			311			312			312
Gasoline volume (m gal)		284,704			234,078			280,796			304,815			296,518
Gasoline gross profit (cents/gal)		13.0			15.7			13.7			15.5			15.7
Average gasoline volume per store (m gal/month)		79.0			78.7			77.0			83.6			81.6
Distillate volume (m gal)		44,476			43,733			47,902			46,895			47,008
Distillate gross profit (cents/gal)		10.7			10.61			10.53			12.31			11.19
Merchandise sales (000s)	$	112,468		$	95,365		$	149,762		$	182,564		$	180,702
Merchandise gross margin		25.2	%		26.4	%		28.3	%		28.1	%		28.6	%
Merchandise profit (000s)	$	28,304		$	25,219		$	42,414		$	51,297		$	51,650
Average merchandise sales per store/per month (000s)	$	30.9		$	31.5		$	40.1		$	48.8		$	48.3
	Year Ended August 31,
	2000			2001			2002			2003			2004
EBITDA Reconciliation:
Net income (loss)	$	6,685		$	17,279		$	(24,941	)	$	(5,271	)	$	11,395
Gain on early extinguishment of debt		—			(5,210	)		—			—			—
Interest expense		22,962			21,051			20,064			21,376			21,445
Income tax expense (benefit)		6,828			12,021			(15,596	)		(3,370	)		7,400
Depreciation		10,168			10,713			11,774			12,218			12,453
Amortization		3,324			3,716			3,056			3,602			4,167
Prepayment of debt refinancing		—			—			—			—			3,228
EBITDA	$	49,967		$	59,570		$	(5,643	)	$	28,555		$	60,088

(1) Certain amounts in the fiscal 2000 Consolidated Financial Statements have been reclassified to conform to the 2001 to 2004 presentation.

(2) Gross margin is defined as gross profit plus refining operating expenses. Refinery operating expenses are expenses incurred in refining and included in costs of goods sold in our consolidated financial statements. Refining operating expense equals refining operating expenses per barrel, multiplied by the volume of total saleable products per day, multiplied by the number of days in the period.

(3) Refinery operating expenses include refinery fuel produced and consumed in refinery operations.

(4) Fiscal 2002 includes eight months of Selling, general and administrative expenses for Country Fair operations and fiscal 2003 and 2004 include twelve months of Country Fair operations.

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(5) In accordance with Statement of Financial Accounting Standards No. 145, “Rescission of Statements No. 4, 44 and 64, Amendment of FASB Statement No. 13, and Technical Corrections,” we have reclassified our gain on early extinguishment of debt in 2001.

(6) EBITDA represents net income (loss), excluding gains on early extinguishment of debt as per the indenture, plus interest expense, taxes, depreciation, amortization and prepayment premium on debt financing. EBITDA should not be considered in isolation from, or as a substitute for, net income, cash flow from operations or other cash flow statement data prepared in accordance with GAAP as a measure of a company’s profitability or liquidity. We use this term because it is a widely accepted financial indicator utilized to analyze and compare companies on the basis of operating performance and is used to calculate certain debt coverage ratios included in several of our debt agreements. Our method of computation of EBITDA may or may not be comparable to other similarly titled measures used by other companies.

(7) The ratio of earnings to fixed charges is computed by dividing (i) income before provision for income taxes plus fixed charges by (ii) fixed charges. Fixed charges consist of interest on indebtedness including amortization of discount and debt issuance costs and the estimated interest component of rental expense. The estimated interest component of rental expense is calculated using the actual interest expense for those assets leased from related entities at a fixed rate of 9.59% or a variable rate based on the London interbank offered rate (“LIBOR”). All other estimated interest of rental expense is calculated using 10.5%.

(8) Fiscal 2002, 2003 and 2004 exclude 60 stores operated under long-term management agreements.

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DESCRIPTION OF CERTAIN INDEBTEDNESS

We have a Revolving Credit Facility with PNC Bank, National Association as Agent Bank. This is a $75,000,000 revolving credit facility, which expires May 9, 2007. The Revolving Credit Facility is secured primarily by certain cash accounts, accounts receivable, and inventory. Until maturity, we may borrow on a borrowing base formula as set forth in the facility. For Base Rate borrowings, interest is calculated at the greater of the agent bank’s prime rate or federal fund rate plus 1%, plus an applicable margin of .25% to .75%, which was 5.00% at August 31, 2004. For Euro-Rate borrowings, interest is calculated at the LIBOR rate plus an applicable margin of 1.75% to 3.00%. The applicable margin varies with our facility leverage ratio calculation. As of August 31, 2004, $0 of Euro-Rate borrowings and $13,000,000 of Base Rate borrowings were outstanding under the agreement.

We had outstanding letters of credit of $385,000 as of August 31, 2004.

As of August 31, 2004 the outstanding borrowings under the Revolving Credit Facility was $13,385,000 resulting in net availability of $61,615,000. The corresponding balance of cash and cash equivalents as of August 31, 2004 was $11,552,000.

DESCRIPTION OF THE NOTES

The old notes were, and the new notes will be, issued under an indenture, dated as of August 6, 2004, among the issuer, the Subsidiary Guarantors and The Bank of New York, as trustee (the “Trustee”).

The terms of the new notes are substantially identical in all respects (including principal amount, interest rate and maturity) to the terms of the old notes for which they may be exchanged pursuant to this exchange offer, except that the new notes:

• will be freely transferable by holders thereof; and

• will be issued free of any covenant regarding registration.

The new notes will represent the same debt as the old notes, will be governed by and entitled to benefits of the same indenture, which is governed by New York law, and will rank pari passu with all unsecured and unsubordinated indebtedness and senior to all subordinated indebtedness of the issuer and the applicable Subsidiary Guarantor, respectively. Any provision of the indenture which requires actions by or approval of a specified percentage of old notes shall require the approval of the holders of such percentage of old notes and new notes, in the aggregate. The terms of the notes include those stated in the indenture and those made part of the indenture by reference to the Trust Indenture Act of 1939, as amended.

The following is a summary of the material terms and provisions of the notes. This summary does not purport to be a complete description of the notes and is subject to the detailed provisions of, and qualified in its entirety by reference to, the notes and the indenture (including the definitions contained therein). Certain capitalized terms used in this description but not defined below under “—Certain Definitions” have the meanings assigned to them in the indenture. Except as otherwise indicated, the following summary relates to both the old notes and the new notes to be issued in the exchange offer; the term “note” or “notes” refers to both the old notes and the new notes. We urge you to read the indenture because it, and not this description, defines your rights as a holder of the notes. The indenture has been included as Exhibit 4.1 to the registration statement of which this prospectus is a part, which incorporates by reference to the Company’s Annual Report on Form 10-K for fiscal year ended August 31, 2004. See “Where You Can Find More Information” and “Incorporation by Reference.” Copies of the indenture are available as described under “—Additional Information.”

General

The notes are senior unsecured obligations of the issuer limited to an aggregate principal amount of $200 million.

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The notes bear interest at 10 ¹/2%, payable on February 15 and August 15 of each year, commencing on February 15, 2005, to holders of record at the close of business on February 1 or August 1, as the case may be, immediately preceding the relevant interest payment date. The notes will mature on August 15, 2012 and will be issued in registered form, without coupons, and in denominations of $1,000 and integral multiples thereof. The notes are payable as to principal, premium, if any, and interest at our office or agency maintained for such purpose within the City and State of New York or, at our option, by wire transfer of immediately available funds or, in the case of certificated securities only, by mailing a check to the registered address of the holder. See “—Delivery and Form of Securities—Book Entry, Delivery and Form.” Until otherwise designated by us, our office or agency in New York will be the office of the Trustee maintained for such purpose.

Subsidiary Guarantees

The issuer’s payment obligations under the notes are jointly and severally guaranteed by the Subsidiary Guarantors. The obligations of each Subsidiary Guarantor under its subsidiary guarantee is joint and several and full and unconditional, limited only so as not to constitute a fraudulent conveyance under applicable law.

The indenture provides that no Subsidiary Guarantor may consolidate with or merge with or into (whether or not such Subsidiary Guarantor is the surviving Person) another Person whether or not affiliated with such Subsidiary Guarantor unless (i) the Person formed by or surviving any such consolidation or merger (if other than such Subsidiary Guarantor) assumes all of the obligations of such Subsidiary Guarantor pursuant to a supplemental indenture, in form and substance satisfactory to the Trustee, under the notes and the indenture; (ii) immediately after giving effect to such transaction, no Default or Event of Default exists; and (iii) immediately after giving effect to such transaction we could incur at least $1.00 of additional Indebtedness pursuant to the Consolidated Fixed Charge Coverage Ratio test set forth in the covenant described under “—Certain Covenants—Limitations on Additional Indebtedness.”

Ranking

The notes and each subsidiary guarantee are senior unsecured obligations of the issuer and the applicable Subsidiary Guarantor, respectively, and rank pari passu in right of payment with other existing and future unsecured and unsubordinated Indebtedness of the issuer and the Subsidiary Guarantors, respectively, and senior to all existing and future subordinated indebtedness of the issuer and the Subsidiary Guarantors. At August 31, 2004, the issuer and the Subsidiary Guarantors had approximately $15.6 million of Indebtedness outstanding other than the notes, all of which was secured. Subject to certain limitations, the issuer and its Subsidiaries (including the Subsidiary Guarantors) may incur additional Indebtedness in the future. See “—Certain Covenants—Limitations on Additional Indebtedness.”

Optional Redemption of the Notes

The notes are redeemable, in whole or in part, at our option at any time or from time to time, prior to August 15, 2008, at the Make-Whole Price (as defined below), in accordance with the provisions of the indenture.

“Make-Whole Price” means an amount equal to the greater of:

(1) 100% of the principal amount of the notes to be redeemed; and

(2) as determined by an Independent Investment Banker, the sum of the present values of (a) the redemption price of the notes at August 15, 2008 (as set forth below) and (b) the remaining scheduled payments of interest from the redemption date to August 15, 2008 (not including any portion of such payments of interest accrued as of the redemption date) discounted back to the redemption date on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months) at the Treasury Rate (as defined below) plus 50 basis points.

plus, in the case of both (1) and (2), accrued and unpaid interest and Liquidated Damages, if any, to the redemption date. Unless we default in payment of the Make-Whole Price, on and after the applicable redemption date, interest will cease to accrue on the notes to be redeemed.

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“Comparable Treasury Issue” means the United States Treasury security selected by an Independent Investment Banker as having the maturity comparable to the remaining term of the notes to be redeemed that would be utilized, at the time of selection and in accordance with customary financial practice, in pricing new issues of corporate debt securities of comparable maturity to the remaining term of the notes.

“Comparable Treasury Price” means, with respect to any redemption date, (1) the average of four Reference Treasury Dealer Quotations for such redemption date, after excluding the highest and lowest of such Reference Treasury Dealer Quotations, or (2) if the trustee obtains fewer than four such Reference Treasury Dealer Quotations, the average of all such Reference Treasury Dealer Quotations.

“Independent Investment Banker” means Citigroup Global Markets Inc. and its successors, or, if Citigroup Global Markets Inc. or its successors, if any, are unwilling or unable to select the Comparable Treasury Issue, an independent investment banking institution of national standing appointed by us.

“Reference Treasury Dealers” means Citigroup Global Markets Inc. and three additional primary U.S. government securities dealers in New York City, (each a “Primary Treasury Dealer”) selected by us, and their respective successors (provided, however, that if Citigroup Global Markets Inc. or any such successor, as the case may be, shall cease to be a primary U.S. government securities dealer in New York City, we shall substitute therefor another Primary Treasury Dealer).

“Reference Treasury Quotations” means, with respect to each Reference Treasury Dealer and any redemption date, the average, as determined by the Trustee, of the bid and asked prices for the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount) quoted in writing to the trustee by such Reference Treasury Dealer at 5:00 p.m., New York City time, on the third business day preceding such redemption date.

“Treasury Rate” means, with respect to any redemption date, (1) the yield, under the heading which represents the average for the immediately preceding week, appearing in the most recently published statistical release designated “H.15 (519)” or any successor publication that is published weekly by the Board of Governors of the Federal Reserve System and that establishes yields on actively traded United States Treasury securities adjusted to constant maturity under the caption “Treasury Constant Maturities,” for the maturity corresponding to the Comparable Treasury Issue (if no maturity is within three months before and after the stated maturity, yields for the two published maturities most closely corresponding to the Comparable Treasury Issue shall be determined, and the Treasury Rate shall be interpolated or extrapolated from such yields on a straight-line basis, rounding to the nearest month) or (2) if such release (or any successor release) is not published during the week preceding the calculation date or does not contain such yields, the rate per annum equal to the semi-annual equivalent yield to maturity of the Comparable Treasury Issue, calculated using a price for the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the Comparable Treasury Price for such redemption date. The Treasury Rate shall be calculated on the third business day preceding the redemption date.

The notice of redemption with respect to the foregoing redemption need not set forth the Make-Whole Price but only the manner of calculation thereof. We will notify the trustee of the Make-Whole Price with respect to any redemption promptly after the calculation thereof, and the Trustee shall not be responsible for such calculation.

The notes will be redeemable at our option, in whole or in part, at any time on or after August 15, 2008, at the following redemption prices (expressed as percentages of principal amount), together with accrued and unpaid interest, if any, thereon to the redemption date, if redeemed during the 12-month period beginning August 15:

Year	Optional Redemption Price
2008	105.250	%
2009	102.625	%
2010 and thereafter	100.000	%

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Notwithstanding the foregoing, at any time prior to August 15, 2007, we may redeem up to 35% of the aggregate principal amount of the notes with the net cash proceeds of one or more Equity Offerings at a redemption price equal to 110.50% of the principal amount thereof, plus accrued and unpaid interest to the redemption date; provided that (a) at least 65% of the aggregate principal amount of the notes issued under the indenture remains outstanding immediately after the occurrence of such redemption and (b) such redemption occurs within 60 days of the date of the closing of any such Equity Offering.

If less than all of the notes are to be redeemed at any time, selection of the notes to be redeemed will be made by the Trustee from among the outstanding notes on a pro rata basis, by lot or by any other method permitted in the indenture; provided that in the case of a redemption with the net cash proceeds of an Equity Offering pursuant to the immediately preceding paragraph, selection shall be made on a pro rata basis. Notice of redemption will be mailed at least 30 days but not more than 60 days before the redemption date to each holder whose notes are to be redeemed at the registered address of such holder. On and after the redemption date, interest will cease to accrue on the notes or portions thereof called for redemption.

Change of Control

Upon the occurrence of a Change of Control, we shall be obligated to make an offer to all holders of notes to purchase (a “Change of Control Offer”) all outstanding notes and will purchase, on a business day not more than 60 days nor less than 30 days after the occurrence of the Change of Control (such purchase date being the “Change of Control Purchase Date”), all notes properly tendered pursuant to such offer to purchase for a cash price (the “Change of Control Purchase Price”) equal to 101% of the principal amount of the notes, plus accrued and unpaid interest, if any, to the Change of Control Purchase Date. The Change of Control Offer is required to remain open for at least 20 business days or for such longer period as is required by law.

In order to effect a Change of Control Offer, we shall within 30 days after the occurrence of the Change of Control mail to the Trustee, who shall mail to each holder of notes, a copy of the Change of Control Offer, which shall state, among other things, the procedures that holders must follow to accept the Change of Control Offer.

The occurrence of the events constituting a Change of Control under the indenture may result in an event of default in respect of our and our Subsidiaries’ other Indebtedness and, consequently, the lenders thereof may have the right to require repayment of such Indebtedness in full. If a Change of Control Offer is made, there can be no assurance that we will have available funds sufficient to pay for all or any of the notes that might be delivered by holders of notes seeking to accept the Change of Control Offer. Our obligation to make a Change of Control Offer will be satisfied if a third party makes the Change of Control Offer in the manner and at the times and otherwise in compliance with the requirements applicable to a Change of Control Offer made by us and purchases all notes properly tendered and not withdrawn under such Change of Control Offer. The definition of Change of Control includes the sale of “all or substantially all” of our assets or our and our Subsidiaries’ assets taken as a whole. The phrase “all or substantially all” is subject to interpretation under applicable legal precedent and has no clear meaning. As a result, there may be uncertainty as to whether a Change of Control has occurred.

The Change of Control feature of the notes, by requiring a Change of Control Offer, may in certain circumstances make more difficult or discourage a sale or takeover of us, and, thus, the removal of incumbent management. The Change of Control feature, however, is not part of a plan by management to adopt a series of anti-takeover provisions. Instead, the Change of Control feature is a result of negotiations between us and the initial purchasers. Subject to the limitations discussed below, we could, in the future, enter into certain transactions, including acquisitions, refinancings or other recapitalizations, that would not constitute a Change of Control under the indenture, but that could increase the amount of Indebtedness outstanding at such time or otherwise affect our capital structure or credit ratings.

We will comply with the requirements of Rule 14e-1 under the Exchange Act to the extent applicable in connection with the purchase of notes pursuant to a Change of Control Offer.

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Certain Covenants

Limitations on Additional Indebtedness. (a) The indenture provides that (i) we will not, and will not permit any of our Subsidiaries to, directly or indirectly, create, incur, assume, guarantee or otherwise become liable with respect to (collectively, “incur”) any Indebtedness (including without limitation Acquired Indebtedness), and (ii) we will not permit any of our Subsidiaries to issue (except if issued to or owned beneficially and of record by us or any of our Subsidiaries) any Capital Stock having a preference in liquidation or with respect to the payment of dividends; provided that (i) we and our Subsidiaries may incur Permitted Indebtedness and (ii) we may incur Indebtedness if, after giving effect thereto, our Consolidated Fixed Charge Coverage Ratio on the date thereof would be at least 2.0 to 1, determined on a pro forma basis as if the incurrence of such additional Indebtedness, and the application of the net proceeds therefrom, had occurred at the beginning of the four-quarter period used to calculate our Consolidated Fixed Charge Coverage Ratio.

(b) We will not, and will not permit any of our Subsidiaries to, incur any Indebtedness that is expressly subordinated to any of our or such Subsidiary’s other Indebtedness unless such Indebtedness by its terms is also expressly made subordinated to the notes, in the case of us, or the subsidiary guarantees, in the case of a Subsidiary.

For purposes of determining compliance with this “Limitations on Additional Indebtedness” covenant, in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Indebtedness described in clauses (i) through (x) of the definition of Permitted Indebtedness, or is entitled to be incurred pursuant to the first paragraph of this covenant, we, in our sole discretion, may classify such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this covenant. Indebtedness under the Revolving Credit Facility outstanding on the Issue Date will initially be deemed to have been incurred on such date in reliance on the exception provided by clause (i) of the definition of Permitted Indebtedness.

Limitations on Restricted Payments. The indenture provides that we will not, and will not permit any of our Subsidiaries to, directly or indirectly, make any Restricted Payment (except as permitted below) if at the time of such Restricted Payment:

(i) a Default or Event of Default shall have occurred and be continuing or shall occur as a consequence thereof;

(ii) we would be unable to incur an additional $1.00 of Indebtedness pursuant to the Consolidated Fixed Charge Coverage Ratio test set forth in the covenant described under “Limitations on Additional Indebtedness”; or

(iii) the amount of such Restricted Payment, when added to the aggregate amount of all Restricted Payments made after the Issue Date, exceeds the sum of (A) 50% of our Consolidated Net Income (taken as one accounting period) from but not including May 31, 2004 to the end of our most recently ended fiscal quarter for which financial statements are available at the time of such Restricted Payment (or, if such aggregate Consolidated Net Income shall be a deficit, minus 100% of such aggregate deficit) plus (B) the net cash proceeds from the issuance and sale (other than to a Subsidiary of ours) after the Issue Date of our Capital Stock that is not Disqualified Capital Stock, plus (C) to the extent that any Restricted Investment that was made after the Issue Date is sold for cash or otherwise liquidated or repaid for cash, the lesser of (x) the cash return of capital with respect to such Restricted Investment (less the cost of disposition, if any) and (y) the initial amount of such Restricted Investment plus (D) the amount of Restricted Investment outstanding in an Unrestricted Subsidiary at the time such Unrestricted Subsidiary is designated our Subsidiary in accordance with the definition of “Unrestricted Subsidiary”.

The foregoing provisions will not prohibit, so long as no default shall have occurred and be continuing:

(1) the payment of any dividend within 60 days after the date of declaration thereof, if at said date of declaration such payment would have complied with the provisions of the indenture;

(2) the redemption, repurchase, retirement or other acquisition of any of our Capital Stock in exchange for, or out of the proceeds of, the substantially concurrent sale (other than to a Subsidiary of ours) of other of our Capital Stock (other than any Disqualified Capital Stock);

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(3) the defeasance, redemption, repurchase or other retirement of Subordinated Indebtedness in exchange for, or out of the proceeds of, the substantially concurrent issue and sale of our Capital Stock (other than (x) Disqualified Capital Stock, (y) Capital Stock sold to a Subsidiary of ours and (z) Capital Stock purchased with the proceeds of loans from us or any of our Subsidiaries);

(4) the making of Related Business Investments not otherwise treated as Investments with respect to a new Coker plant so long as the amount of such investments outstanding (less the amount of cash received upon the disposition of any such investments or the return of capital thereon) or committed does not exceed at any time $30.0 million; provided that no portion of such amount shall be utilized for any Investment unless we would be permitted at such time to incur an additional $1 of Additional Indebtedness (other than Permitted Indebtedness) pursuant to the Consolidated Fixed Charge Coverage Ratio test set forth in the covenant described under “Limitations on Additional Indebtedness” and either (x) the new Coker plant is operational and already performing to approximate design specifications; or (y) to the extent an Investment has been made in the new Coker plant and the new Coker plant has thereafter been terminated or abandoned, in either case as evidenced by a Board Resolution, in which case, Investments may be made up to the amount of $30 million available under this subsection (4), less the Investment in the new Coker plant made pursuant to subsection (6);

(5) the making of a Related Business Investment in joint ventures or Unrestricted Subsidiaries out of the proceeds of the substantially concurrent issue and sale of our Capital Stock (other than (x) Disqualified Capital Stock, (y) Capital Stock sold to a Subsidiary of ours and (z) Capital Stock purchased with the proceeds of loans from us or any of our Subsidiaries); and

(6) Investments with respect to a new Coker plant not otherwise treated as Related Business Investments in an amount at any time outstanding not to exceed $25.0 million.

The amounts referred to in clauses (1), (2) and (5) shall be included as Restricted Payments in any computation made pursuant to clause (iii) above.

Not later than the date of making any Restricted Payment, we shall deliver to the Trustee an Officers’ Certificate stating that such Restricted Payment is permitted and setting forth the basis upon which the calculations required by the covenant “Limitations on Restricted Payments” were computed, which calculations shall be based upon our latest available financial statements.

Limitations on Restrictions on Distributions from Subsidiaries. The indenture provides that we will not, and will not permit any of our Subsidiaries to, create or otherwise cause or suffer to exist or become effective any consensual Payment Restriction with respect to any of our Subsidiaries, except for (a) any such Payment Restriction in effect on the Issue Date under the Revolving Credit Facility or any similar Payment Restriction under any similar bank credit facility or any replacement thereof, provided that such similar Payment Restriction is no more restrictive than the Payment Restriction in effect on the date of the indenture under the Revolving Credit Facility, (b) any such Payment Restriction under any agreement evidencing any Acquired Indebtedness that was permitted to be incurred pursuant to the indenture, provided that such Payment Restriction only applies to assets that were subject to such restriction and encumbrances prior to the acquisition of such assets by us or our Subsidiaries and (c) any such Payment Restriction arising in connection with Refinancing Indebtedness; provided that any such Payment Restrictions that arise under such Refinancing Indebtedness are not, taken as a whole, more restrictive than those under the agreement creating or evidencing the Indebtedness being refunded or refinanced.

Limitations on Transactions with Affiliates. The indenture provides that we will not, and will not permit any of our Subsidiaries to, directly or indirectly, in one transaction or a series of related transactions, sell, lease, transfer or otherwise dispose of any of its properties or assets to, or purchase any property or assets from or enter into any contract, agreement, understanding, loan, advance or guarantee with, or for the benefit of, any Affiliate (each of the foregoing, an “Affiliate Transaction”), unless (i) such Affiliate Transaction is on terms that are no less favorable to us or the relevant Subsidiary than those that would have been obtained in a comparable transaction by us or such Subsidiary with an unrelated Person and (ii) we deliver to the Trustee (a) with respect to

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any Affiliate Transaction (or series of related transactions) involving aggregate payments in excess of $2.5 million but less than $5.0 million, an Officers’ Certificate certifying that such Affiliate Transaction complies with clause (i) above and a Secretary’s Certificate which sets forth and authenticates a resolution that has been adopted by a vote of a majority of the Independent Directors approving such Affiliate Transaction or, if at the time fewer than four Independent Directors are then in office, a Secretary’s Certificate which sets forth and authenticates a resolution that has been adopted unanimously by our Board of Directors set forth in a Secretary’s Certificate and (b) with respect to any Affiliate Transaction (or series of related transactions) involving aggregate payments of $5.0 million or more, the certificates described in the preceding clause (a) and an opinion as to the fairness to us or such Subsidiary from a financial point of view issued by an Independent Financial Advisor; provided, however, that (v) the Management Agreements, (w) any employment agreement entered into by us or any of our Subsidiaries in the ordinary course of business and consistent with our or such Subsidiary’s past practice, (x) transactions exclusively between or among us and/or our Subsidiaries, (y) the payment of up to $2 million per fiscal year pursuant to the Servicing Agreement and (z) payments under the Tax Sharing Agreement shall not be deemed to be Affiliate Transactions. Notwithstanding the foregoing proviso, we shall not, and shall not permit any of our Subsidiaries to, pay any of our employees total annual compensation in excess of $350,000 unless (a) such amount of compensation has been approved by a vote of a majority of the Independent Directors, or (b) such employee’s total annual compensation in effect on the Issue Date exceeded $350,000. Any increase in total compensation over and above the amount previously approved in the case of clause (a) or the employee’s total annual compensation on the Issue Date in the case of clause (b) shall be approved by a vote of a majority of the Independent Directors, other than an increase at the end of any year in the amount of total compensation by an amount equal to the Index Amount for such year.

Independent Directors. (a) The indenture provides that our Board of Directors shall at all times have at least four Independent Directors; provided, however, that, notwithstanding the foregoing, if an Independent Director resigns, dies or is terminated for any reason and the remaining number of Independent Directors is less than four, a replacement for that Independent Director shall be elected as promptly as practicable, but in no event later than the date that is six months from the date of the resignation, death or termination of the Independent Director being replaced.

(b) After the Issue Date, the election of any new Independent Directors must be approved by a unanimous vote of the Independent Directors then in office, provided that only a majority vote of the Independent Directors is required if at the time there are four or more Independent Directors in office. The Independent Directors shall approve such new Independent Director unless the Independent Directors determine that such person does not satisfy the requirements to serve as an Independent Director under the indenture or such person is not able or willing to perform the obligations of the Independent Directors under the indenture.

(c) If at any time the number of Independent Directors then in office is less than two, then until such time as the number of Independent Directors exceeds two we shall not, and shall not permit any of our Subsidiaries to, engage in any transaction that the indenture requires be approved by a vote of the Independent Directors.

(d) Any transaction that the indenture requires be approved by a vote of the Independent Directors shall be evidenced by a Secretary’s Certificate setting forth a resolution adopted by at least the requisite number of Independent Directors, a copy of which shall be delivered to the Trustee, which resolution shall state that the transaction being approved is not unfair to the holders of the notes. The failure to comply with this clause (d) shall have the effect of us failing to comply with the requirement in the indenture to obtain a vote of the Independent Directors.

Limitations on Liens. The indenture provides that neither we nor any of our Subsidiaries may directly or indirectly create, incur, assume or suffer to exist any Lien on any property or asset now owned or hereafter acquired, or on any income or profits therefrom, or assign or convey any right to receive income therefrom, except Permitted Liens, unless prior thereto or simultaneously therewith the notes are equally and ratably secured; provided that if such Indebtedness is Subordinated Indebtedness the Lien securing such Indebtedness shall be junior to the Lien securing the notes.

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Limitations on Asset Sales. (a) The indenture provides that we will not, and will not permit any of our Subsidiaries to, consummate any Asset Sale unless (i) we receive consideration at the time of such Asset Sale at least equal to the Fair Market Value of the assets included in such Asset Sale; provided that the aggregate Fair Market Value of the consideration received from any Asset Sale that is not in the form of cash or Cash Equivalents shall not, when aggregated with the Fair Market Value of all other non-cash consideration received by us and our Subsidiaries from all previous Asset Sales since the Issue Date that have not, prior to such date, been converted to cash or Cash Equivalents, exceed five percent of our Consolidated Tangible Assets at the time of the Asset Sale under consideration; and provided, further, that with respect to any Asset Sales to Affiliates we receive consideration consisting of no less than 75% cash or Cash Equivalents and (ii) we deliver to the Trustee an Officers’ Certificate certifying that such Asset Sale complies with clause (i). The amount (without duplication) of any of our or such Subsidiary’s Indebtedness (other than Subordinated Indebtedness) that is expressly assumed by the transferee in such Asset Sale and with respect to which we or such Subsidiary, as the case may be, is unconditionally released by the holder of such Indebtedness, shall be deemed to be cash or Cash Equivalents for purposes of clause (ii) and shall also be deemed to constitute a repayment of, and a permanent reduction in, the amount of such Indebtedness for purposes of the following paragraph (b). If at any time any non-cash consideration received by us or any Subsidiary of ours, as the case may be, in connection with any Asset Sale is converted into or sold or otherwise disposed of for cash (other than interest received with respect to any such non-cash consideration), then the date of such conversion or disposition shall be deemed to constitute the date of an Asset Sale hereunder and the Net Available Proceeds thereof shall be applied in accordance with this covenant. A transfer of assets by us to a Subsidiary or by a Subsidiary to us or to a Subsidiary will not be deemed to be an Asset Sale and a transfer of assets that constitutes a Restricted Investment and that is permitted under “—Limitations on Restricted Payments” will not be deemed to be an Asset Sale.

In the event of the transfer of substantially all (but not all) of our and our Subsidiaries’ property and assets as an entirety to a Person in a transaction permitted under “—Limitations on Mergers and Certain Other Transactions,” the successor Person shall be deemed to have sold our and our Subsidiaries’ properties and assets not so transferred for purposes of this covenant, and shall comply with the provisions of this covenant with respect to such deemed sale as if it were an Asset Sale. In addition, the Fair Market Value of such of our or our Subsidiaries’ properties and assets deemed to be sold shall be deemed to be Net Available Proceeds for purposes of this covenant.

(b) If we or any Subsidiary engage in an Asset Sale, we or any Subsidiary may either, no later than 360 days after such Asset Sale, (i) apply all or any of the Net Available Proceeds therefrom to repay amounts outstanding under the Revolving Credit Facility or any other of our or any Subsidiary’s Indebtedness (other than Subordinated Indebtedness); provided, in each case, that the related loan commitment (if any) is thereby permanently reduced by the amount of such Indebtedness so repaid or (ii) invest all or any part of the Net Available Proceeds thereof in properties and assets that replace the properties or assets that were the subject of such Asset Sale or in other properties or assets that will be used in our and our Subsidiaries’ business as it existed on the Issue Date. The amount of such Net Available Proceeds not applied or invested as provided in this paragraph will constitute “Excess Proceeds.”

(c) When the aggregate amount of Excess Proceeds equals or exceeds $10.0 million, we will be required to make an offer to purchase, from all holders of the notes, an aggregate principal amount of notes equal to such Excess Proceeds as follows:

(i) We will make an offer to purchase (a “Net Proceeds Offer”) from all holders of the notes in accordance with the procedures set forth in the indenture the maximum principal amount (expressed as a multiple of $1,000) of notes that may be purchased out of the amount (the “Payment Amount”) of such Excess Proceeds.

(ii) The offer price for the notes will be payable in cash in an amount equal to 100% of the principal amount of the notes tendered pursuant to a Net Proceeds Offer, plus accrued and unpaid interest and Liquidated Damages, if any, to the date such Net Proceeds Offer is consummated (the “Offered Price”), in

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accordance with the procedures set forth in the indenture. To the extent that the aggregate Offered Price of notes tendered pursuant to a Net Proceeds Offer is less than the Payment Amount relating thereto (such shortfall constituting a “Net Proceeds Deficiency”), we may use such Net Proceeds Deficiency, or a portion thereof, for general corporate purposes, subject to the limitations of the “Limitations on Restricted Payments” covenant.

(iii) If the aggregate Offered Price of notes validly tendered and not withdrawn by holders thereof exceeds the Payment Amount, notes to be purchased will be selected on a pro rata basis.

(iv) Upon completion of such Net Proceeds Offer, the amount of Excess Proceeds remaining shall be zero.

We will not permit any Subsidiary to enter into or suffer to exist any agreement that would place any restriction of any kind (other than pursuant to law or regulation) on our ability to make a Net Proceeds Offer following any Asset Sale. We will comply with Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder, if applicable, in the event that an Asset Sale occurs and we are required to purchase notes as described above.

Restrictions on Sale and Leaseback Transactions. The indenture provides that we will not, and will not permit any of our Subsidiaries to, directly or indirectly, enter into, renew or extend any Sale and Leaseback Transaction unless: (i) we or such Subsidiary would be entitled, under the covenant described under “Limitations on Additional Indebtedness” to incur Indebtedness in an amount equal to the Attributable Indebtedness with respect to such Sale and Leaseback Transaction, (ii) such Sale and Leaseback Transaction would not result in a violation of the covenant described under “Limitations on Liens”; and (iii) the Net Available Proceeds from any such Sale and Leaseback Transaction are applied in a manner consistent with the provisions described under “Limitations on Asset Sales.”

Restrictions on Sale of Capital Stock of Subsidiaries. The indenture provides that we will not, and will not permit any Subsidiary to, directly or indirectly sell or otherwise dispose of any of the Capital Stock of any Subsidiary unless: (i) (a) we shall retain ownership, directly or indirectly, of more than 50% of the Common Equity of such Subsidiary or (b) all of the Capital Stock of such Subsidiary shall be sold or otherwise disposed of; and (ii) the Net Available Proceeds from any such sale or disposition are applied in a manner consistent with the provisions described under “Limitations on Asset Sales.”

Limitations on Mergers and Certain Other Transactions. The indenture provides that we will not, in a single transaction or a series of related transactions, (i) consolidate or merge with or into (other than a merger with a Wholly-Owned Subsidiary solely for the purpose of changing our applicable jurisdiction of incorporation to another State of the United States), or sell, lease, transfer, convey or otherwise dispose of or assign all or substantially all of our or our and the Subsidiaries’ assets (taken as a whole), or assign any of our obligations under the notes and the indenture, to any Person or (ii) adopt a Plan of Liquidation unless, in either case: (a) the Person formed by or surviving such consolidation or merger (if other than us) or to which such sale, lease, conveyance or other disposition or assignment shall be made (or, in the case of a Plan of Liquidation, any Person to which assets are transferred) (collectively, the “Successor”), is a Person organized and existing under the laws of the United States or any State thereof or the District of Columbia, and the Successor assumes by supplemental indenture in a form satisfactory to the Trustee all of our obligations under the notes and the indenture; (b) immediately prior to and immediately after giving effect to such transaction and the assumption of the obligations as set forth in clause (a) above and the incurrence of any Indebtedness to be incurred in connection therewith, no Default or Event of Default shall have occurred and be continuing; and (c) immediately after and giving effect to such transaction and the assumption of the obligations set forth in clause (a) above and the incurrence of any Indebtedness to be incurred in connection therewith, and the use of any net proceeds therefrom on a pro forma basis, we or the Successor, as the case may be, could incur at least $1.00 of additional Indebtedness pursuant to the Consolidated Fixed Charge Coverage Ratio test set forth in the covenant described under “Limitations on Additional Indebtedness;” and (d) each Subsidiary Guarantor, unless it is the other party to

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the transactions described above, shall have by amendment to its guarantee confirmed that its guarantee of the notes shall apply to our obligations or the obligations of the Successor under the notes and the indenture. For purposes of this covenant, any Indebtedness of the Successor which was not our Indebtedness immediately prior to the transaction shall be deemed to have been incurred in connection with such transaction.

Additional Subsidiary Guarantees. The indenture provides that if we or any of our Subsidiaries shall acquire or create another Subsidiary, then such newly acquired or created Subsidiary will be required to execute a subsidiary guarantee, in accordance with the terms of the indenture, unless it has been designated as an Unrestricted Subsidiary.

Reports. Whether or not required by the rules and regulations of the Securities and Exchange Commission (the “Commission”), so long as any notes are outstanding, we and the Subsidiary Guarantors will file with the Commission, to the extent such filings are accepted by the Commission, and will furnish to the holders of notes all quarterly and annual reports and other information, documents and reports that would be required to be filed with the Commission pursuant to Section 13 of the Exchange Act if we and the Subsidiary Guarantors were required to file under such section. In addition, we and the Subsidiary Guarantors will make such information available to prospective purchasers of the notes, securities analysts and broker-dealers who request it in writing. We and the Subsidiary Guarantors have agreed that, for so long as any notes remain outstanding, we and they will furnish to the holders and beneficial holders of notes and to prospective purchasers of notes designated by the holders of Transfer Restricted Securities and to broker dealers, upon their request, the information required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act.

Events of Default

An “Event of Default” is defined in the indenture as (i) failure by us to pay interest on any of the notes when it becomes due and payable and the continuance of any such failure for 30 days; (ii) failure by us to pay the principal or premium, if any, on any of the notes when it becomes due and payable, whether at stated maturity, upon redemption, upon acceleration or otherwise; (iii) we shall fail to comply with any of its agreements or covenants described above under “Change of Control”, “Certain Covenants—Limitations on Asset Sales” or “—Independent Directors”; (iv) failure by us to comply with any other covenant in the indenture and continuance of such failure for 30 days after notice of such failure has been given to us by the Trustee or by the holders of at least 25% of the aggregate principal amount of the notes then outstanding; (v) failure by either us or any of our Subsidiaries to make any payment when due after the expiration of any applicable grace period, in respect of any Indebtedness of ours or any of such Subsidiaries that has an aggregate outstanding principal amount of $5.0 million or more; (vi) a default under any Indebtedness of ours or any Subsidiary, whether such Indebtedness now exists or hereafter shall be created, if (A) such default results in the holder or holders of such Indebtedness causing the Indebtedness to become due prior to its stated maturity and (B) the outstanding principal amount of such Indebtedness, together with the outstanding principal amount of any other such Indebtedness the maturity of which has been so accelerated, aggregate $5.0 million or more at any one time; (vii) one or more final judgments or orders that exceed $5.0 million in the aggregate for the payment of money have been entered by a court or courts of competent jurisdiction against us or any Subsidiary of ours and such judgment or judgments have not been satisfied, stayed, annulled or rescinded within 60 days of being entered; (viii) certain events of bankruptcy, insolvency or reorganization involving us or any Subsidiary Guarantor of ours; and (ix) except as permitted by the indenture, any subsidiary guarantee ceases to be in full force and effect or any Subsidiary Guarantor repudiates its obligations under any guarantee.

If an Event of Default (other than an Event of Default specified in clause (viii) above), shall have occurred and be continuing under the indenture, the Trustee, by written notice to us, or the holders of at least 25% in aggregate principal amount of the notes then outstanding by written notice to us and the Trustee may declare all amounts owing under the notes to be due and payable immediately. Upon such declaration of acceleration, the aggregate principal of, premium, if any, and interest on the outstanding notes shall immediately become due and payable. If an Event of Default results from bankruptcy, insolvency or reorganization involving us or any

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Subsidiary Guarantor, all outstanding notes shall become immediately due and payable without any further action or notice. In certain cases, the holders of a majority in aggregate principal amount of the notes then outstanding may waive an existing Default or Event of Default and its consequences, except a default in the payment of principal of, premium, if any, and interest on the notes.

The holders may not enforce the provisions of the indenture or the notes except as provided in the indenture. Subject to certain limitations, holders of a majority in principal amount of the notes then outstanding may direct the Trustee in its exercise of any trust or power; provided, however, that such direction does not conflict with the terms of the indenture. The Trustee may withhold from the holders notice of any continuing Default or Event of Default (except any Default or Event of Default in payment of principal of, premium, if any, or interest on the Senior Notes) if the Trustee determines that withholding such notice is in the holders’ interest.

We and the Subsidiary Guarantors are required to deliver to the Trustee annually a statement regarding compliance with the indenture and, upon any Officer of ours becoming aware of any Default or Event of Default, a statement specifying such Default or Event of Default and what action we are taking or propose to take with respect thereto.

Satisfaction and Discharge of Indenture; Defeasance

We may terminate our obligations under the indenture at any time by delivering all outstanding notes to the Trustee for cancellation and paying all sums payable by it thereunder. We, at our option, (i) will be discharged from any and all obligations with respect to the notes (except for certain of our obligations to register the transfer or exchange of such notes, replace stolen, lost or mutilated notes, maintain paying agencies and hold moneys for payment in trust) or (ii) need not comply with certain of the restrictive covenants with respect to the indenture, if we deposit with the Trustee, in trust, U.S. Legal Tender or U.S. Government Obligations or a combination thereof that, through the payment of interest and premium thereon and principal amount at maturity in respect thereof in accordance with their terms, will be sufficient to pay all the principal amount at maturity of and interest and premium on the notes on the dates such payments are due in accordance with the terms of such notes as well as the Trustee’s fees and expenses. To exercise either such option, we are required to deliver to the Trustee (A) an Opinion of Counsel and, in connection with a discharge pursuant to clause (i) above, a private letter ruling issued to us by the Internal Revenue Service (the “Service”), to the effect that the holders of the notes will not recognize income, gain or loss for federal income tax purposes as a result of the deposit and related defeasance and will be subject to federal income tax on the same amount and in the same manner and at the same times as would have been the case if such option had not been exercised, (B) subject to certain qualifications, an Opinion of Counsel to the effect that funds so deposited will not be subject to avoidance under applicable bankruptcy law and (C) an Officers’ Certificate and an Opinion of Counsel to the effect that we have complied with all conditions precedent to the defeasance. Notwithstanding the foregoing, the Opinion of Counsel required by clause (A) above need not be delivered if all notes not theretofore delivered to the Trustee for cancellation (i) have become due and payable, (ii) will become due and payable on the maturity date within one year or (iii) are to be called for redemption within one year under arrangements satisfactory to the Trustee for the giving of notice of redemption by the Trustee in our name, and at our expense.

Transfer and Exchange

A holder will be able to register the transfer of or exchange notes only in accordance with the provisions of the indenture. The registrar may require a holder, among other things, to furnish appropriate endorsements and transfer documents and to pay any taxes and fees required by law or permitted by the indenture. Without our prior consent, the registrar is not required (i) to register the transfer of or exchange any note selected for redemption, (ii) to register the transfer of or exchange any note for a period of 1 day before a selection of notes to be redeemed or (iii) to register the transfer or exchange of a note between a record date and the next succeeding interest payment date. The registered holder of a note will be treated as the owner of such note for all purposes.

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Amendment, Supplement and Waiver

Subject to certain exceptions, the indenture or the notes may be amended or supplemented with the consent (which may include consents obtained in connection with a tender offer or exchange offer for notes) of the holders of at least a majority in principal amount of the notes then outstanding, and any existing Default under, or compliance with any provision of, the indenture may be waived (other than any continuing Default or Event of Default in the payment of the principal of, premium, if any, or interest on the notes) with the consent (which may include consents obtained in connection with a tender offer or exchange offer for notes) of the holders of a majority in principal amount of the notes then outstanding. Without the consent of any holder, we and the Trustee may amend or supplement the indenture or the notes to cure any ambiguity, defect or inconsistency, to provide for uncertificated notes in addition to or in place of certificated notes, to provide for the assumption of our obligations to holders in the case of a merger or acquisition, or to make any change that does not adversely affect the rights of any holder.

Without the consent of each holder affected, we and the Trustee may not: (i) extend the maturity of any note; (ii) affect the terms of any scheduled payment of interest on or principal of the notes (including without limitation any redemption provisions); (iii) make any change in the provisions described above under the caption “Change of Control” or in our obligations to make a Net Proceeds Offer or Special Offer or the definitions related thereto that could adversely affect the rights of any holder of the notes; (iv) take any action that would subordinate the notes or the subsidiary guarantees to any other Indebtedness of ours or any of our Subsidiaries, respectively, or otherwise affect the ranking of the notes or the subsidiary guarantees; (v) reduce the percentage of holders necessary to consent to an amendment, supplement or waiver to the indenture.

Concerning the Trustee

The indenture contains certain limitations on the rights of the Trustee, should it become a creditor of ours, to obtain payment of claims in certain cases, or to realize on certain property received in respect of any such claim as security or otherwise. The Trustee will be permitted to engage in other transactions; however, if it acquires any conflicting interest (as defined in the indenture), it must eliminate such conflict or resign.

The holders of a majority in principal amount of the then outstanding notes will have the right to direct the time, method and place of conducting any proceeding for exercising any remedy available to the Trustee, subject to certain exceptions. The indenture provides that, in case an Event of Default occurs and is not cured, the Trustee will be required, in the exercise of its power, to use the degree of care of a prudent person in similar circumstances in the conduct of his own affairs. Subject to such provisions, the Trustee will be under no obligation to exercise any of its rights or powers under the indenture at the request of any holder, unless such holder shall have offered to the Trustee security and indemnity satisfactory to the Trustee.

Governing Law

Each of the indenture, the notes and the subsidiary guarantees provides that it will be governed by, and construed in accordance with, the laws of the State of New York.

Delivery and Form of Securities

Book-Entry, Delivery and Form

The old notes were initially issued in the form of two Global Notes (the “Global Notes”). The Global Notes were deposited on the date of the closing of the sale of the old notes (the “Closing Date”) with, or on behalf of, The Depository Trust Company, or DTC (the “Depository”), and registered in the name of Cede & Co., as nominee of the Depository (such nominee being referred to herein as the “Global Note Holder”). The Depositary maintains the old notes in denominations of $1,000 and integral multiples thereof through its book-entry facilities.

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The new notes will be issued in the form of one or more global notes, which will be deposited with the Depository and registered in the name of the Global Note Holder.

The Depositary is a limited-purpose trust company that was created to hold securities for its participating organizations (collectively, the “Participants” or the “Depositary’s Participants”) and to facilitate the clearance and settlement of transactions in such securities between Participants through electronic book-entry changes in accounts of its Participants. The Depositary’s Participants include securities brokers and dealers (including the initial purchasers), banks and trust companies, clearing corporations and certain other organizations. Access to the Depositary’s system is also available to other entities such as banks, brokers, dealers and trust companies (collectively, the “Indirect Participants” or the “Depositary’s Indirect Participants”) that clear through or maintain a custodial relationship with a Participant, either directly or indirectly. Persons who are not Participants may beneficially own securities held by or on behalf of the Depositary only through the Depositary’s Participants or the Depositary’s Indirect Participants.

We expect that pursuant to procedures established by the Depositary (i) upon deposit of the Global Notes, the Depositary will credit the accounts of Participants with portions of the principal amount of the Global Notes and (ii) ownership of the new notes will be shown on, and the transfer of ownership thereof will be effected only through, records maintained by the Depositary (with respect to the interests of the Depositary’s Participants), the Depositary’s Participants and the Depositary’s Indirect Participants.

The laws of some states require that certain persons take physical delivery in definitive form of securities that they own. Consequently, the ability to transfer the notes will be limited to such extent. Because the Depository can act only on behalf of Participants, which in turn act on behalf of Indirect Participants, the ability of a Person having beneficial interests in the Global Notes to pledge such interests to Persons that do not participate in the Depository system, or otherwise take actions in respect of such interests, may be affected by the lack of a physical certificate evidencing such interests. For certain other restrictions on the transferability of the notes, see “Notice to Investors.”

So long as the Global Note Holder is the registered owner of any notes, the Global Note Holder will be considered the sole holder of outstanding notes under the indenture. Except as provided below, owners of notes will not be entitled to have notes registered in their names and will not be considered the owners or holders thereof under the indenture for any purpose, including with respect to the giving of any directions, instructions or approvals to the Trustee thereunder. Neither we nor the Subsidiary Guarantors or the Trustee will have any responsibility or liability for any aspect of the records relating to or payments made on account of notes by the Depositary, or for maintaining, supervising or reviewing any records of the Depositary relating to such notes.

Payments in respect of the principal of, premium, if any, and interest on any notes registered in the name of a Global Note Holder on the applicable record date will be payable by the Trustee to or at the direction of such Global Note Holder in its capacity as the registered holder under the indenture. Under the terms of the indenture, we and the Trustee may treat the persons in whose names any notes, including the Global Notes, are registered as the owners thereof for the purpose of receiving such payments and for any and all other purposes whatsoever. Consequently, neither we nor the Trustee has or will have any responsibility or liability for the payment of such amounts to beneficial owners of notes (including principal, premium, if any, and interest). We believe, however, that it is currently the policy of the Depositary to immediately credit the accounts of the relevant Participants with such payments, in amounts proportionate to their respective beneficial interests in the relevant security as shown on the records of the Depositary. Payments by the Depositary’s Participants and the Depositary’s Indirect Participants to the beneficial owners of notes will be governed by standing instructions and customary practice and will be the responsibility of the Depositary’s Participants or the Depositary’s Indirect Participants.

Subject to certain conditions, any person having a beneficial interest in the Global Notes may, upon request to the Trustee, exchange such beneficial interest for notes in definitive form. Upon any such issuance, the Trustee

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is required to register such notes in the name of, and cause the same to be delivered to, such person or persons (or the nominee of any thereof). Such notes would be issued in fully registered form and would be subject to the legal requirements described herein under the caption “Notice to Investors.” In addition, if (i) we notify the Trustee in writing that the Depositary is no longer willing or able to act as a depositary and we are unable to locate a qualified successor within 90 days or (ii) we, at our option, notify the Trustee in writing that we elect to cause the issuance of notes in definitive form under the indenture, then, upon surrender by the relevant Global Note Holder of its Global Notes, notes in such form will be issued to each person that such Global Note Holder and the Depositary identifies as being the beneficial owner of the related notes.

Neither we nor the Trustee will be liable for any delay by the Global Note Holder or the Depositary in identifying the beneficial owners of notes we and the Trustee may conclusively rely on, and will be protected in relying on, instructions from the Global Note Holder or the Depositary for all purposes.

The indenture requires that payments in respect of the notes represented by the Global Notes (including principal, premium, if any, interest and Liquidated Damages) be made in same-day funds.

Registration Rights; Liquidated Damages

We and the initial purchasers entered into a registration rights agreement in connection with the issuance and sale of the old notes. Pursuant to the registration rights agreement, we agreed to file with the Commission the exchange offer registration statement on the appropriate form under the Securities Act with respect to the new notes. Upon the effectiveness of the exchange offer registration statement, we will offer, pursuant to the exchange offer, to the holders of Transfer Restricted Securities who are able to make certain representations the opportunity to exchange their Transfer Restricted Securities for new notes. If (i) we are not required to file the exchange offer registration statement because the exchange offer is not permitted by applicable law or Commission policy or (ii) any holder of Transfer Restricted Securities notifies us that (a) it is prohibited by law or Commission policy from participating in the exchange offer or (b) it may not resell the new notes acquired by it in the exchange offer to the public without delivering a prospectus and the prospectus contained in the exchange offer registration statement is not appropriate or available for such resales or (c) it is a broker-dealer and holds old notes acquired directly from us or an affiliate of ours, we will file with the Commission a shelf registration statement to cover resales of the old notes by the holders thereof who satisfy certain conditions relating to the provision of information in connection with the shelf registration statement. We will use our best efforts to cause the applicable registration statement to be declared effective as promptly as possible by the Commission. For purposes of the foregoing, “Transfer Restricted Securities” means each old note or new note until (i) the date on which such old note has been exchanged by a person other than a broker-dealer for a new note in the exchange offer, (ii) following the exchange by a broker-dealer in the exchange offer of an old note for a new note, the date on which such new note is sold to a purchaser who receives from such broker-dealer on or prior to the date of such sale a copy of the prospectus contained in the exchange offer registration statement, (iii) the date on which such old note has been effectively registered under the Securities Act and disposed of in accordance with the shelf registration statement or (iv) the date on which such note is distributed to the public pursuant to Rule 144 under the Securities Act.

The registration rights agreement provides that (i) we and the Subsidiary Guarantors will file an exchange offer registration statement with the Commission on or prior to 135 days after the Issue Date, (ii) we and the Subsidiary Guarantors will use our best efforts to have the exchange offer registration statement declared effective by the Commission on or prior to 225 days after the Issue Date, (iii) unless the exchange offer would not be permitted by a policy of the Commission, we and the Subsidiary Guarantors will commence the exchange offer and will use our best efforts to issue on or prior to 45 days after the date on which the exchange offer registration statement is declared effective by the Commission (the “Exchange Offer Effective Date”) new notes in exchange for all old notes tendered prior thereto in the exchange offer and (iv) if obligated to file the shelf registration statement, we and the Subsidiary Guarantors will use our best efforts to file the shelf registration statement with the Commission on or prior to 135 days after such obligation arises and to cause the shelf

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registration statement to be declared effective by the Commission on or prior to 225 days after such obligation arises. If (a) we and the Subsidiary Guarantors fail to file within 135 days, or cause to become effective within 225 days, the exchange offer registration statement or (b) we and the Subsidiary Guarantors are obligated to file the shelf registration statement and such shelf registration statement is not filed within 135 days, or declared effective within 225 days, of the date on which we and the Subsidiary Guarantors became so obligated or (c) we and the Subsidiary Guarantors fail to consummate the exchange offer within 45 days of the Exchange Offer Effective Date or (d) the shelf registration statement or the exchange offer registration statement is declared effective but thereafter ceases to be effective or usable in connection with resales of Transfer Restricted Securities during the periods specified in the registration rights agreement (each such event referred to in clauses (a) through (d) above a “Registration Default”), in the case of clause (b) only, other than by reason of the failure of the holders to make certain representations to or provide information reasonably requested by us or by reason of delays caused by the failure of any holder to provide information to the National Association of Securities Dealers, Inc. or to any other regulatory agency having jurisdiction over any of the holders, then we will pay liquidated damages (“Liquidated Damages”) to each holder of Transfer Restricted Securities, during the first 90-day period immediately following the occurrence of such Registration Default in an amount equal to $.05 per week per $1,000 principal amount of old notes constituting Transfer Restricted Securities held by such holder. The amount of the Liquidated Damages will increase an additional $.05 per week per $1,000 principal amount constituting Transfer Restricted Securities for each subsequent 90-day period until the applicable Registration Default has been cured, up to a maximum amount of Liquidated Damages of $.20 per week per $1,000 principal amount of old notes constituting Transfer Restricted Securities. All accrued Liquidated Damages will be paid by us on each damages payment date to the Global Note Holder by wire transfer of immediately available funds or by federal funds check and to the holders of certificated securities by mailing a check to such holders’ registered addresses. Following the cure of all Registration Defaults, the accrual of Liquidated Damages will cease.

Holders of the old notes will be required to make certain representations to us (as described in the registration rights agreement) in order to participate in the exchange offer and will be required to deliver information to be used in connection with the shelf registration statement within the time periods set forth in the registration rights agreement in order to have their old notes included in the shelf registration statement and benefit from the provisions regarding Liquidated Damages set forth above.

Following the consummation of the exchange offer, holders of the old notes who were eligible to participate in the exchange offer but who did not tender their old notes will not have any further registration rights and such old notes will continue to be subject to certain restrictions on transfer. Accordingly, the liquidity of the market for such old notes could be adversely affected.

Additional Information

Anyone who receives this prospectus may obtain a copy of the indenture or the registration rights agreement without charge by contacting us at 15 Bradley Street, Warren, Pennsylvania 16365 (telephone (814) 723-1500), Attention: Secretary.

Certain Definitions

Set forth below is a summary of certain of the defined terms used in the indenture. Reference is made to the indenture for the full definition of all such terms.

“Acquired Indebtedness” means (a) with respect to any Person that becomes a direct or indirect Subsidiary of ours after the date of the indenture, Indebtedness of such Person and its Subsidiaries existing at the time such Person becomes a Subsidiary of ours that was not incurred in connection with, or in contemplation of, such Person becoming a Subsidiary of ours and (b) with respect to us or any of our Subsidiaries, any Indebtedness assumed by us or any of our Subsidiaries in connection with the acquisition of an asset from another Person that was not incurred by such other Person in connection with, or in contemplation of, such acquisition.

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“Affiliate” of any Person means any Person (i) which directly or indirectly controls or is controlled by, or is under direct or indirect common control with, the referent Person, (ii) which beneficially owns or holds 10% or more of any class of the Voting Stock of the referent Person, (iii) of which 10% or more of the Voting Stock (or, in the case of a Person which is not a corporation, 10% or more of the equity interest) is beneficially owned or held by the referent Person or (iv) with respect to an individual, any immediate family member of such person. For purposes of this definition, control of a Person shall mean the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; notwithstanding the foregoing, a Person shall not be deemed to be an affiliate of the referent Person solely as a result of the referent Person owning Voting Stock of such Person.

“Asset Sale” means any sale, issuance, conveyance, transfer, lease, assignment or other disposition to any Person other than us or any of our Subsidiaries (including, without limitation, by means of a Sale and Leaseback Transaction or a merger or consolidation) (collectively, for purposes of this definition, a “transfer”), directly or indirectly, in one transaction or a series of related transactions, of (a) any Capital Stock of any Subsidiary or (b) any other properties or assets of ours or any of our Subsidiaries other than transfers of cash, Cash Equivalents, accounts receivable, inventory or other properties or assets in the ordinary course of business. For the purposes of this definition, the term “Asset Sale” shall not include any of the following: (i) any transfer of properties or assets (including Capital Stock) that is governed by, and made in accordance with the provisions described under “Covenants—Limitations on Mergers and Certain Other Transactions”; (ii) any transfer of properties or assets to an Unrestricted Subsidiary, if permitted under the “Limitations on Restricted Payments” covenant; (iii) sales of damaged, worn-out or obsolete equipment or assets that, in our reasonable judgment, are either no longer used or useful in our or our Subsidiaries’ business; (iv) any Sale and Leaseback Transactions not to exceed $5.0 million outstanding at anytime; and (v) any transfers that, but for this clause (v), would be Asset Sales, if after giving effect to such transfers, the aggregate Fair Market Value of the properties or assets transferred in such transaction or any such series of related transactions does not exceed $1,000,000.

“Attributable Indebtedness” when used with respect to any Sale and Leaseback Transaction, means, as at the time of determination, property subject to such Sale and Leaseback Transaction and the present value (discounted at a rate equivalent to our then-current weighted average cost of funds for borrowed money as at the time of determination, compounded on a semi-annual basis) of the total obligations of the lessee for rental payments during the remaining term of the lease included in any such Sale and Leaseback Transaction.

“Bankruptcy Law” means Title 11, U.S. Code or any similar federal, state or foreign law for the relief of debtors.

“Board Resolution” means a duly adopted resolution of our Board of Directors.

“Capital Stock” of any Person means any and all shares, rights to purchase, warrants or options (whether or not currently exercisable), participations or other equivalents of or interests in (however designated) the equity (including without limitation common stock, preferred stock and partnership interests) of such Person.

“Capitalized Lease Obligations” of any Person means the obligations of such Person to pay rent or other amounts under a lease that is required to be capitalized for financial reporting purposes in accordance with GAAP, and the amount of such obligation shall be the capitalized amount thereof determined in accordance with GAAP.

“Cash Equivalents” means (i) marketable obligations with a maturity of 180 days or less issued or directly and fully guaranteed or insured by the United States of America or any agency or instrumentality thereof (provided that the full faith and credit of the United States of America is pledged in support thereof); (ii) demand and time deposits and certificates of deposit or acceptances with a maturity of 180 days or less of any financial institution that is a member of the Federal Reserve System having combined capital and surplus and undivided profits of not less than $500 million; (iii) commercial paper maturing no more than 180 days from the date of

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creation thereof issued by a Person that is not an Affiliate of ours and is organized under the laws of any state of the United States or the District of Columbia and rated at least A-1 by S&P or at least P-1 by Moody’s; (iv) repurchase obligations with a term of not more than seven days for underlying securities of the types described in clause (i) above entered into with any commercial bank meeting the specifications of clause (ii) above; and (v) investments in money market or other mutual funds substantially all of whose assets comprise securities of the types described in clauses (i) through (iv) above.

“Change of Control” means the occurrence of any of the following: (i) the consummation of any transaction the result of which is (x) if such transaction occurs prior to the first sale of our Common Equity pursuant to a registration statement under the Securities Act that results in at least 20% of the then outstanding of our Common Equity having been sold to the public, that Permitted Holders beneficially own less than, directly or indirectly, 51% of our Common Equity, and (y) if such transaction occurs thereafter, that any Person or group (as such term is used in Section 13(d)(3) of the Exchange Act) (other than Permitted Holders) owns, directly or indirectly, a majority of our Common Equity, (ii) we consolidate with, or merge with or into, another person or sell, assign, convey, transfer, lease or otherwise dispose of all or substantially all of our assets or our assets and our Subsidiaries (taken as a whole) to any Person, or any Person consolidates with, or merges with or into us, in any such event pursuant to a transaction in which our outstanding Voting Stock, as the case may be, is converted into or exchanged for cash, securities or other property, other than any such transaction where our outstanding Voting Stock, as the case may be, is converted into or exchanged for Voting Stock (other than Disqualified Stock) of the surviving or transferee Person and the beneficial owners of our Voting Stock immediately prior to such transaction own, directly or indirectly, not less than a majority of the Voting Stock of the surviving or transferee Person immediately after such transaction, (iii) we, either individually or in conjunction with one or more Subsidiaries sell, assign, convey, transfer, lease or otherwise dispose of, or the Subsidiaries sell, assign, convey, transfer, lease or otherwise dispose of, all or substantially all of our properties and assets and our Subsidiaries, taken as a whole (either in one transaction or a series of related transactions), including Capital Stock of the Subsidiaries, to any Person (other than us or a Wholly-Owned Subsidiary), or (iv) during any consecutive two-year period, individuals who at the beginning of such period constituted our Board of Directors (together with any new directors whose election by such Board of Directors or whose nomination for election by our stockholders was approved by either (i) a vote of two-thirds of the directors then still in office who were either directors at the beginning of such period or whose election or nomination for election was previously so approved or (ii) a Permitted Holder) cease for any reason to constitute a majority of our Board of Directors then in office.

“Common Equity” of any Person means all Capital Stock of such Person that is generally entitled to (i) vote in the election of directors of such Person or (ii) if such Person is not a corporation, vote or otherwise participate in the selection of the governing body, partners, managers or others that control the management and policies of such Person.

“Consolidated Amortization Expense” of any Person for any period means the amortization expense of such Person and its Subsidiaries for such period (to the extent included in the computation of Consolidated Net Income of such Person), determined on a consolidated basis in accordance with GAAP.

“Consolidated Depreciation Expense” of any Person for any period means the depreciation expense of such Person and its Subsidiaries for such period (to the extent included in the computation of Consolidated Net Income of such Person), determined on a consolidated basis in accordance with GAAP.

“Consolidated Fixed Charge Coverage Ratio” of any Person means, with respect to any determination date, the ratio of (i) EBITDA for such Person’s four full fiscal quarters immediately preceding the determination date, to (ii) the aggregate Fixed Charges of such Person for such four fiscal quarters. In making such computations, (i) EBITDA and Fixed Charges shall be calculated on a pro forma basis assuming that (A) the Indebtedness to be incurred or the Disqualified Capital Stock to be issued (and all other Indebtedness incurred or Disqualified Capital Stock issued after the first day of such period of four full fiscal quarters referred to in the covenant

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described in paragraph (a) under “—Certain Covenants—Limitations on Additional Indebtedness” through and including the date of determination), and (if applicable) the application of the net proceeds therefrom (and from any other such Indebtedness or Disqualified Capital Stock), including the refinancing of other Indebtedness, had been incurred on the first day of such four quarter period and, in the case of Acquired Indebtedness, on the assumption that the related transaction (whether by means of purchase, merger or otherwise) also had occurred on such date with the appropriate adjustments with respect to such acquisition being included in such pro forma calculation and (B) any acquisition or disposition by us or any Subsidiary of any properties or assets outside the ordinary course of business or any repayment of any principal amount of any Indebtedness of ours or any Subsidiary prior to the stated maturity thereof, in either case since the first day of such period of four full fiscal quarters through and including the date of determination, had been consummated on such first day of such four quarter period; (ii) the Fixed Charges attributable to interest on any Indebtedness required to be computed on a pro forma basis in accordance with the covenant described in paragraph (a) under “—Certain Covenants—Limitations on Additional Indebtedness” and (A) bearing a floating interest rate shall be computed as if the rate in effect on the date of computation had been the applicable rate for the entire period and (B) which was not outstanding during the period for which the computation is being made but which bears, at our option, a fixed or floating rate of interest, shall be computed by applying, at our option, either the fixed or floating rate; (iii) the Fixed Charges attributable to interest on any Indebtedness under a revolving credit facility required to be computed on a pro forma basis in accordance with the covenant described in paragraph (a) under “—Certain Covenants—Limitations on Additional Indebtedness” shall be computed based upon the average daily balance of such Indebtedness during the applicable period, provided that such average daily balance shall be reduced by the amount of any repayment of Indebtedness under a revolving credit facility during the applicable period, which repayment permanently reduced the commitments or amounts available to be reborrowed under such facility, (iv) notwithstanding the foregoing clauses (ii) and (iii), interest on Indebtedness determined on a fluctuating basis, to the extent such interest is covered by agreements relating to Hedging Obligations, shall be deemed to have accrued at the rate per annum resulting after giving effect to the operation of such agreements; and (v) if after the first day of the applicable four quarter period we have permanently retired any Indebtedness, Fixed Charges shall be calculated on a pro forma basis as if such Indebtedness had been retired on the first day of such period.

“Consolidated Income Tax Expense” means, for any Person for any period, the provision for taxes based on income and profits of such Person and its Subsidiaries to the extent such income or profits were included in computing Consolidated Net Income of such Person for such period.

“Consolidated Interest Expense” means, without duplication, with respect to any Person for any period, the sum of the interest expense on all Indebtedness of such Person and its Subsidiaries for such period, determined on a consolidated basis in accordance with GAAP and including, without limitation (i) imputed interest on Capitalized Lease Obligations and Attributable Indebtedness, (ii) commissions, discounts and other fees and charges owed with respect to letters of credit securing financial obligations and bankers’ acceptance financing, (iii) the net costs associated with Hedging Obligations, (iv) amortization of other financing fees and expenses, (v) the interest portion of any deferred payment obligations, (vi) amortization of debt discount or premium, if any, (vii) all other non-cash interest expense, (viii) capitalized interest, (ix) all interest payable with respect to discontinued operations, and (x) all interest on any Indebtedness of any other Person guaranteed by the referent Person or any of its Subsidiaries.

“Consolidated Net Income” of any Person for any period means the net income (or loss) of such Person and its Subsidiaries for such period determined on a consolidated basis in accordance with GAAP; provided that there shall be excluded from such net income (to the extent otherwise included therein), without duplication: (i) the net income (or loss) of any Person (other than a Subsidiary of the referent Person) in which any Person other than the referent Person has an ownership interest, except to the extent that any such income has actually been received by the referent Person or any of its Wholly-Owned Subsidiaries in the form of cash dividends during such period; (ii) except to the extent includible in the consolidated net income of the referent Person pursuant to the foregoing clause (i), the net income (or loss) of any Person that accrued prior to the date that (a) such Person becomes a

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Subsidiary of the referent Person or is merged into or consolidated with the referent Person or any of its Subsidiaries or (b) the assets of such Person are acquired by the referent Person or any of its Subsidiaries; (iii) the net income of any Subsidiary of the referent Person during such period to the extent that the declaration or payment of dividends or similar distributions by such Subsidiary of that income is not permitted by operation of the terms of its charter or any agreement, instrument, judgment, decree, order, statute, rule or governmental regulation applicable to that Subsidiary during such period; (iv) any gain (but not loss), together with any related provisions for taxes on any such gain, realized during such period by the referent Person or any of its Subsidiaries upon (a) the acquisition of any securities, or the extinguishment of any Indebtedness, of the referent Person or any of its Subsidiaries or (b) any Asset Sale by the referent Person or any of its Subsidiaries, (v) any extraordinary gain (but not extraordinary loss), together with any related provision for taxes on any such extraordinary gain, realized by the referent Person or any of its Subsidiaries during such period; and (vi) in the case of a successor to such Person by consolidation, merger or transfer of its assets, any earnings of the successor prior to such merger, consolidation or transfer of assets; and provided, further, that (y) any gain referred to in clauses (iv) and (v) above that relates to a Restricted Investment and which is received in cash by the referent Person or one of its Subsidiaries during such period shall be included in the consolidated net income of the referent Person.

“Consolidated Tangible Assets” of any Person as of any date means the total assets of such Person and its Subsidiaries (excluding any assets that would be classified as “intangible assets” under GAAP) on a consolidated basis at such date, determined in accordance with GAAP, less all write-ups subsequent to the Issue Date in the book value of any asset owned by such Person or any of its Subsidiaries.

“Custodian” means any receiver, trustee, assignee, liquidator, sequestrator or similar official under any Bankruptcy Law.

“Default” means any event, act or condition that is, or after notice or the passage of time or both would be, an Event of Default.

“Disqualified Capital Stock” means any Capital Stock of such Person or any of its Subsidiaries that, by its terms, by the terms of any agreement related thereto or by the terms of any security into which it is convertible, puttable or exchangeable, is, or upon the happening of any event or the passage of time would be, required to be redeemed or repurchased by such Person or any to its Subsidiaries, whether or not at the option of the holder thereof, or matures or is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, in whole or in part, on or prior to the final maturity date of the notes; provided, however, that any class of Capital Stock of such Person that, by its terms, authorizes such Person to satisfy in full its obligations with respect to the payment of dividends or upon maturity, redemption (pursuant to a sinking fund or otherwise) or repurchase thereof or otherwise by the delivery of Capital Stock that is not Disqualified Capital Stock, and that is not convertible, puttable or exchangeable for Disqualified Capital Stock or Indebtedness, shall not be deemed to be Disqualified Capital Stock so long as such Person satisfies its obligations with respect thereto solely by the delivery of Capital Stock that is not Disqualified Capital Stock.

“EBITDA” means, with respect to any Person for any period, without duplication, the sum of the amounts for such period of (i) Consolidated Net Income, (ii) Consolidated Income Tax Expense, (iii) Consolidated Amortization Expense (but only to the extent not included in Fixed Charges), (iv) Consolidated Depreciation Expense, (v) Fixed Charges, (vi) prepayment or make-whole payments incurred in connection with the repayment of Indebtedness on the date of the indenture, and (vii) all other non-cash items reducing the Consolidated Net Income (excluding any such non-cash charge that results in an accrual of a reserve for cash charges in any future period) of such Person and its Subsidiaries, in each case determined on a consolidated basis in accordance with GAAP (provided, however, that the amounts set forth in clauses (ii) through (vii) shall be included without duplication and only to the extent such amounts actually reduced Consolidated Net Income), less the aggregate amount of all non-cash items, determined on a consolidated basis, to the extent such items increase Consolidated Net Income.

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“Equity Offering” means an offering or sale of Capital Stock (other than Disqualified Capital Stock) of United Refining Company pursuant to a registration statement filed with the Commission in accordance with the Securities Act or pursuant to an exemption from the registration requirements thereof.

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

“Existing Indebtedness” means all of our and our Subsidiaries’ Indebtedness that is outstanding on the Issue Date.

“Fair Market Value” means the fair market value as determined in good faith by the Board of Directors and evidenced by a Board Resolution.

“Fixed Charges” means, with respect to any Person for any period, the sum of (a) the Consolidated Interest Expense of such Person and its Subsidiaries for such period, and (b) the product of (i) all cash dividend payments (and non-cash dividend payments in the case of a Person that is a Subsidiary) on any series of preferred stock of such Person or a Subsidiary of such Person, times (ii) a fraction, the numerator of which is one and the denominator of which is one minus the then current combined federal, state and local statutory tax rate of such Person, expressed as a decimal, in each case, on a consolidated basis and in accordance with GAAP.

“GAAP” means generally accepted accounting principles set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other entity as may be approved by a significant segment of the accounting profession of the United States, as in effect on the Issue Date.

“Hedging Obligations” of any person means the obligations of such person pursuant to any interest rate swap agreement, interest rate collar agreement or other similar agreement or arrangement relating to interest rates.

“Indebtedness” of any Person at any date means, without duplication:

(i) all liabilities, contingent or otherwise, of such Person for borrowed money (whether or not the recourse of the lender is to the whole of the assets of such person or only to a portion thereof);

(ii) all obligations of such Person evidenced by bonds, debentures, notes or other similar instruments;

(iii) all obligations of such Person in respect of letters of credit or other similar instruments (or reimbursement obligations with respect thereto);

(iv) all obligations of such Person to pay the deferred and unpaid purchase price of property or services, except trade payables and accrued expenses incurred by such Person in the ordinary course of business in connection with obtaining goods, materials or services, which payable is not overdue by more than 60 days according to the original terms of sale unless such payable is being contested in good faith;

(v) the maximum fixed repurchase price of all Disqualified Capital Stock of such Person;

(vi) all Capitalized Lease Obligations of such Person;

(vii) all Indebtedness of others secured by a Lien on any asset of such Person, whether or not such Indebtedness is assumed by such Person;

(viii) all Indebtedness of others guaranteed by such Person to the extent of such guarantee; provided that Indebtedness of ours or our Subsidiaries that is guaranteed by us or our Subsidiaries shall only be counted once in the calculation of the amount of Indebtedness of ours and our Subsidiaries on a consolidated basis; and

(ix) all Attributable Indebtedness.

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The amount of Indebtedness of any Person at any date shall be the outstanding balance at such date of all unconditional obligations as described above, the maximum liability of such Person for any such contingent obligations at such date and, in the case of clause (vii), the lesser of (A) the Fair Market Value of any asset subject to a Lien securing the Indebtedness of others on the date that the Lien attaches and (B) the amount of the Indebtedness secured. For purposes of the preceding sentence, the “maximum fixed repurchase price” of any Disqualified Capital Stock that does not have a fixed repurchase price shall be calculated in accordance with the terms of such Disqualified Capital Stock as if such Disqualified Capital Stock were purchased on any date on which Indebtedness shall be required to be determined pursuant to the indenture, and if such price is based upon, or measured by, the fair market value of such Disqualified Capital Stock (or any equity security for which it may be exchanged or converted), such fair market value shall be determined in good faith by the Board of Directors of such Person, which determination shall be evidenced by a Board Resolution.

“Independent Director” means a director of ours who has not and whose Affiliates have not, at any time during the twelve months prior to the taking of any action hereunder, directly or indirectly, received, or entered into any understanding or agreement to receive, any compensation, payment or other benefit, of any type or form, from us or any of our Affiliates, other than customary directors fees for serving on our or any Affiliate Board of Directors and reimbursement of out-of-pocket expenses for attendance at our or Affiliate’s board and board committee meetings.

“Independent Financial Advisor” means an accounting, appraisal or investment banking firm of nationally recognized standing that is, in the reasonable judgment of our Board of Directors, qualified to perform the task for which it has been engaged and disinterested and independent with respect to us and our Affiliates.

“Index Amount” means, for any year, an amount equal to the percentage increase, if any, in the Index as of the end of such year when compared to the Index in effect at the end of the previous year multiplied by the applicable amount of total compensation for such year. The “Index” means the Consumer Price Index for all Urban Consumers (CPI-U), Northeast, all items, 1982-84 = 100, published by the Bureau of Labor Statistics of the U.S. Department of Labor or if at any time such Index is not published, any substitute index designated by United Refining Company and appropriately adjusted.

“Investments” of any Person means (i) all investments by such Person in any other Person in the form of loans, advances or capital contributions (excluding commission, travel and similar advances to officers and employees made in the ordinary course of business) or similar credit extensions constituting Indebtedness of such Person, and any guarantee of Indebtedness of any other Person, (ii) all purchases (or other acquisitions for consideration) by such Person of Indebtedness, Capital Stock or other securities of any other Person and (iii) all other items that would be classified as investments (including without limitation purchases of assets outside the ordinary course of business) on a balance sheet of such Person prepared in accordance with GAAP.

“Issue Date” means the date the old notes were initially issued.

“Lien” means, with respect to any asset or property, any mortgage, deed of trust, lien (statutory or other), pledge, lease, easement, restriction, covenant, charge, security interest or other encumbrance of any kind or nature in respect of such asset or property, whether or not filed, recorded or otherwise perfected under applicable law (including without limitation any conditional sale or other title retention agreement, and any lease in the nature thereof, any option or other agreement to sell, and any filing of, or agreement to give, any financing statement under the Uniform Commercial Code (or equivalent statutes) of any jurisdiction).

“Management Agreements” means (i) the Management Agreement, dated September 29, 2000, between United Refining Holdings, Inc. and United Refining Company of Pennsylvania and (ii) the Management Agreement, dated July 12, 2002, between United Refining, Inc. and Country Fair, Inc., each as subsequently amended, restated or replaced from time to time in any manner resulting in the terms and conditions of such Management Agreement being no less favorable to United Refining Company or any of its Subsidiaries as on the Issue Date.

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“Net Available Proceeds” means, with respect to any Asset Sale, the proceeds thereof in the form of cash or Cash Equivalents including payments in respect of deferred payment obligations when received in the form of cash or Cash Equivalents (except to the extent that such obligations are financed or sold with recourse to us or any Subsidiary), net of (i) brokerage commissions and other fees and expenses (including fees and expenses of legal counsel, accountants and investment banks) related to such Asset Sale, (ii) provisions for all taxes payable as a result of such Asset Sale (after taking into account any available tax credits or deductions and any tax sharing arrangements), (iii) amounts required to be paid to any Person (other than us or any Subsidiary) owning a beneficial interest in the properties or assets subject to the Asset Sale or having a Lien therein and (iv) appropriate amounts to be provided by us or any Subsidiary, as the case may be, as a reserve required in accordance with GAAP against any liabilities associated with such Asset Sale and retained by us or any Subsidiary, as the case may be, after such Asset Sale, including, without limitation, pensions and other post employment benefit liabilities, liabilities related to environmental matters and liabilities under any indemnification obligations associated with such Asset Sale, all as reflected in an Officers’ Certificate delivered to the Trustee; provided, however, that any amounts remaining after adjustments, revaluations or liquidations of such reserves shall constitute Net Available Proceeds.

“Non-Recourse Purchase Money Indebtedness” means Indebtedness of ours or any of our Subsidiaries incurred (a) to finance the purchase of any assets of ours or any of our Subsidiaries within 90 days of such purchase, (b) to the extent the amount of Indebtedness thereunder does not exceed 100% of the purchase cost of such assets, (c) to the extent the purchase cost of such assets is or should be included in “additions to property, plant and equipment” in accordance with GAAP, (d) to the extent that such Indebtedness is non-recourse to us or any of our Subsidiaries or any of their respective assets other than the assets so purchased, and (e) to the extent the purchase of such assets is not part of an acquisition of any Person.

“Payment Restriction”, with respect to a Subsidiary of any Person, means any encumbrance, restriction of limitation, whether by operation of the terms of its charter or by reason of any agreement, instrument, judgment, decree, order, statute, rule or governmental regulation, on the ability of (i) such Subsidiary to (a) pay dividends or make other distributions on its Capital Stock or make payments on any obligation, liability or Indebtedness owed to such Person or any other Subsidiary of such Person, (b) make loans or advances to such Person or any other Subsidiary or such Person or (c) transfer any of its properties or assets to such Person or any other Subsidiary of such Person or (ii) such Person or any other Subsidiary of such Person to receive or retain any such dividends, distributions or payments, loans or advances or transfer or properties or assets.

“Permitted Holders” means John A. Catsimatidis and his Related Parties.

“Permitted Indebtedness” means any of the following:

(i) Indebtedness in an aggregate principal amount at any time outstanding not to exceed the greater of (1) $75.0 million or (2) 85% of the book value of the eligible accounts receivable and 60% of our and our Subsidiaries’ inventory, calculated on a consolidated basis and in accordance with GAAP;

(ii) Indebtedness under the notes, the subsidiary guarantees and the indenture;

(iii) Existing Indebtedness;

(iv) Indebtedness under Hedging Obligations, provided that (1) such Hedging Obligations are related to payment obligations on Permitted Indebtedness or Indebtedness otherwise permitted by paragraph (a) of the “Limitations on Additional Indebtedness” covenant, and (2) the notional principal amount of such Hedging Obligations does not exceed the principal amount of such Indebtedness to which such Hedging Obligations relate;

(v) our Indebtedness to a Subsidiary and Indebtedness of any Subsidiary to us or a Subsidiary; provided, however, that upon either (1) the subsequent issuance (other than directors’ qualifying shares), sale, transfer or other disposition of any Capital Stock or any other event which results in any such

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Subsidiary ceasing to be a Subsidiary or (2) the transfer or other disposition of any such Indebtedness (except to us or a Subsidiary), the provisions of any such Indebtedness (except to us or a Subsidiary), the provisions of this clause (v) shall no longer be applicable to such Indebtedness and such Indebtedness shall be deemed, in each case, to be incurred and shall be treated as an incurrence for purposes of paragraph (a) of the “Limitations on Additional Indebtedness” covenant at the time the Subsidiary in question ceased to be a Subsidiary or the time such transfer or other disposition occurred;

(vi) Indebtedness in respect of bid, performance or surety bonds issued for our account in the ordinary course of business, including guarantees or our obligations with respect to letters of credit supporting such bid, performance or surety obligations (in each case other than for an obligation for money borrowed);

(vii) Indebtedness in respect of Non-Recourse Purchase Money Indebtedness incurred by us or any Subsidiary;

(viii) Refinancing Indebtedness;

(ix) Indebtedness in respect of Recourse Purchase Money Indebtedness (including Capitalized Lease Obligations) incurred by us or any Subsidiary in an aggregate principal amount at any time outstanding not to exceed $10.0 million; and

(x) other Indebtedness of ours and our Subsidiaries in an aggregate principal amount at any time outstanding not to exceed $10.0 million.

“Permitted Liens” means:

(i) Liens for taxes, assessments or governmental charges or claims that either (a) are not yet delinquent or (b) are being contested in good faith by appropriate proceedings and as to which appropriate reserves or other provisions have been made in accordance with GAAP;

(ii) statutory Liens of landlords and carriers’, warehousemen’s, mechanics’, suppliers’, materialmen’s, repairmen’s or other Liens imposed by law arising in the ordinary course of business and with respect to amounts that either (a) are not yet delinquent or (b) are being contested in good faith by appropriate proceedings and as to which appropriate reserves or other provisions have been made in accordance with GAAP;

(iii) Liens incurred or deposits made in the ordinary course of business in connection with workers’ compensation, unemployment insurance and other types of social security;

(iv) Liens incurred or deposits made to secure the performance of tenders, bids, leases, statutory obligations, surety and appeal bonds, progress payments, government contracts and other obligations of like nature (exclusive of obligations for the payment of borrowed money), in each case, incurred in the ordinary course of business;

(v) easements, rights-of-way, restrictions and other similar charges or encumbrances in respect of real property not interfering with the ordinary conduct of our business or any of our Subsidiaries and not materially affecting the value of the property subject thereto;

(vi) leases or subleases granted to others not interfering with the ordinary conduct of our business or any of our Subsidiaries and not materially affecting the value of the property subject thereto;

(vii) Liens securing Acquired Indebtedness, provided that such Liens (x) are not incurred in connection with, or in contemplation of, the acquisition of the property or assets acquired and (y) do not extend to or cover any of our or any of our Subsidiaries’ property or assets other than the property or assets so acquired;

(viii) Liens securing Refinancing Indebtedness to the extent incurred to repay, refinance or refund Indebtedness that is secured by Liens and outstanding as of the Issue Date (after giving effect to the application of the proceeds of the initial offering of the old notes), provided that such Refinancing Indebtedness shall be secured solely by the assets securing the outstanding Indebtedness being repaid, refinanced or refunded;

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(ix) Liens that secure Sale and Leaseback Transactions that are permitted under the covenants described under “Limitations on Additional Indebtedness” and “Limitations on Sale and Leaseback Transactions” that extend to or cover property and assets acquired by us or a Subsidiary prior to or on the Issue Date in an aggregate amount at any time outstanding not to exceed $5.0 million or that extend to or cover property and assets acquired by us or a Subsidiary after the Issue Date;

(x) Liens securing Indebtedness between us and our Wholly-Owned Subsidiaries or among such Wholly-Owned Subsidiaries;

(xi) Liens existing on the Issue Date to the extent and in the manner such Liens are in effect on the Issue Date (after giving effect to the application of the proceeds of the initial offering of the old notes);

(xii) Liens securing the Revolving Credit Facility in an aggregate principal amount at any time outstanding not to exceed the greater of (1) $75.0 million or (2) 85% of the book value of the eligible accounts receivable and 60% of our and our Subsidiaries’ inventory, calculated on a consolidated basis and in accordance with GAAP;

(xiii) Liens securing Non-Recourse Purchase Money Indebtedness or Recourse Purchase Money Indebtedness (including Capitalized Lease Obligations), provided, that such Liens extend only to the property being acquired and such Lien is created within 90 days of the purchase of such property;

(xiv) Liens securing Indebtedness in an amount not to exceed $10.0 million at any time outstanding; and

(xv) Liens on raw materials in transit.

“Person” means any individual, corporation, partnership, joint venture, incorporated or unincorporated association, joint-stock company, trust, unincorporated organization or government or other agency or political subdivision thereof or other entity of any kind.

“Plan of Liquidation”, with respect to any Person, means a plan that provides for, contemplates or the effectuation of which is preceded or accompanied by (whether or not substantially contemporaneously, in phases or otherwise): (i) the sale, lease, conveyance or other disposition of all or substantially all of the assets of such Person otherwise than as an entirety or substantially as an entirety; and (ii) the distribution of all or substantially all of the proceeds of such sale, lease, conveyance or other disposition and all or substantially all of the remaining assets of such Person to holders of Capital Stock of such Person.

“Recourse Purchase Money Indebtedness” means Indebtedness of ours or any of our Subsidiaries incurred (a) to finance the purchase of any of our or any of our Subsidiaries’ assets within 90 days of such purchase, (b) to the extent the amount of Indebtedness thereunder does not exceed 100% of the purchase cost of such assets, (c) to the extent the purchase cost of such assets is or should be included in “additions to property, plant and equipment” in accordance with GAAP, and (d) to the extent the purchase of such assets is not part of an acquisition of any Person.

“Refinancing Indebtedness” means Indebtedness of ours or a Subsidiary of ours issued in exchange for, or the proceeds from the issuance and sale or disbursement of which are used substantially concurrently to repay, redeem, refund, refinance, discharge or otherwise retire for value, in whole or in part (collectively, “repay”), or constituting an amendment, modification or supplement to or a deferral or renewal of (collectively, an “amendment”), any Indebtedness of ours or any of our Subsidiaries or incurred pursuant to the Fixed Charge Coverage Ratio test of the covenant described under “Limitations on Additional Indebtedness” in a principal amount not in excess of the principal amount of the Indebtedness so repaid or amended (or, if such Refinancing Indebtedness refinances Indebtedness under a revolving credit facility or other agreement providing a commitment for subsequent borrowings, with a maximum commitment not to exceed the maximum commitment under such revolving credit facility or other agreement); provided that: (i) the Refinancing Indebtedness is the obligation of the same Person, and is subordinated to the notes, if at all, to the same extent, as the Indebtedness being repaid or amended; (ii) the Refinancing Indebtedness is scheduled to mature either (a) no earlier than the Indebtedness being repaid or amended or (b) after the maturity date of the notes; (iii) the portion, if any, of the Refinancing Indebtedness that is scheduled to mature on or prior to the maturity date of the notes has a Weighted

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Average Life to Maturity at the time such Refinancing Indebtedness is incurred that is equal to or greater than the Weighted Average Life to Maturity of the portion of the Indebtedness being repaid that is scheduled to mature on or prior to the maturity date of the notes; and (iv) the Refinancing Indebtedness is secured only to the extent, if at all, and by the assets, that the Indebtedness being repaid or amended is secured.

“Related Business Investment” means any Investment directly by us or our Subsidiaries in any business that is closely related to or complements our or our Subsidiaries’ business as such business exists on the Issue Date.

“Related Party” with respect to any Person means (i) any 80% (or more) owned Subsidiary, or spouse or immediate family member (in the case of an individual) of such Person, or (ii) any trust, corporation, partnership or other entity, the beneficiaries, stockholders, partners, owners or Persons beneficially holding an 80% or more controlling interest of which consist of such Person and/or such other Persons referred to in the immediately preceding clause (i).

“Restricted Debt Payment” means any purchase, redemption, defeasance (including without limitation in substance or legal defeasance) or other acquisition or retirement for value, directly or indirectly, by us or a Subsidiary, prior to the scheduled maturity or prior to any scheduled repayment of principal or sinking fund payment, as the case may be, in respect of Subordinated Indebtedness.

“Restricted Investment” with respect to any Person, means any Investment by such Person (other than investments in Cash Equivalents) in any Person that is not a Subsidiary, including its Unrestricted Subsidiaries, if any.

“Restricted Payment” means with respect to any Person: (i) the declaration of any dividend (other than a dividend declared by a Wholly Owned Subsidiary to holders of its Common Equity) or the making of any other payment or distribution of cash, securities or other property or assets in respect of such Person’s Capital Stock (except that a dividend payable solely in Capital Stock (other than Disqualified Capital Stock) of such Person shall not constitute a Restricted Payment); (ii) any payment on account of the purchase, redemption, retirement or other acquisition for value of such Person’s Capital Stock or any other payment or distribution made in respect thereof, either directly or indirectly (other than a payment solely in Capital Stock that is not Disqualified Capital Stock); (iii) any Restricted Investment; (iv) any Restricted Debt Payment; or (v) any payments under the Servicing Agreement in excess of $2 million per fiscal year.

“Revolving Credit Facility” means that certain Amended and Restated Credit Agreement, dated as of July 12, 2002, as amended by that Amendment No. 1 to Credit Agreement, dated as of November 27, 2002, as amended by that Limited Waiver and Amendment No. 2, dated as of February 19, 2003, as amended by that Limited Waiver and Amendment No. 3, dated as of March 24, 2003, as amended by that Amendment No. 4 to Credit Agreement, dated as of January 27, 2004 and as amended by that Amendment No. 5 to Credit Agreement, dated as of August 6, 2004, among us, United Refining Company of Pennsylvania, Kiantone Pipeline Corporation, Country Fair, Inc., Kwik-Fill Corporation and the Banks party thereto and PNC Bank, National Association, as Agent, as subsequently amended, restated or replaced from time to time.

“Sale and Leaseback Transaction” means with respect to any Person an arrangement with any bank, insurance company or other lender or investor or to which such lender or investor is a party, providing for the leasing by such Person or any of its Subsidiaries of any property or asset of such Person or any of its Subsidiaries which has been or is being sold or transferred by such Person or such Subsidiary to such lender or investor or to any Person to whom funds have been or are to be advanced by such lender or investor on the security of such property or asset.

“Securities Act” means the Securities Act of 1933, as amended.

“Servicing Agreement” means that certain agreement between Red Apple Group, Inc. and us, dated June 9, 1997, pursuant to which we shall pay to Red Apple Group, Inc. for the use of Red Apple Group, Inc.’s New York headquarters, as such agreement may be amended from time to time, and any agreement concerning the same subject matter between us and John A. Catsimatidis and/or any of his Affiliates, whether such agreement is a replacement thereof or in addition thereto.

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“Significant Subsidiary” means any Subsidiary that would be a “significant subsidiary” as defined in Article 1, Rule 1-02 of Regulation S-X, promulgated pursuant to the Securities Act, as such Regulation is in effect on the Issue Date, except all references to “10 percent” in such definition shall be changed to “2 percent”.

“Subordinated Indebtedness” means Indebtedness of ours or any Subsidiary that is subordinated in right of payment to the notes or the subsidiary guarantees, respectively.

“Subsidiary” of any Person means (i) any corporation of which at least a majority of the aggregate voting power of all classes of the Common Equity is owned by such Person directly or through one or more other Subsidiaries of such Person and (ii) any entity other than a corporation in which such Person, directly or indirectly, owns at least a majority of the Common Equity of such entity, other than any such person designated as an Unrestricted Subsidiary in accordance with the definition of “Unrestricted Subsidiary”.

“Subsidiary Guarantors” means each of Country Fair, Inc., Kiantone Pipeline Corporation, Kiantone Pipeline Company, United Jet Center, Inc., United Refining Company of Pennsylvania, Kwik Fill Corporation, Independent Gasoline and Oil Company of Rochester, Inc., Bell Oil Corp., PPC, Inc., Super Test Petroleum, Inc., Kwik-Fil, Inc. and Vulcan Asphalt Refining Corporation and each other person who is required to become a Subsidiary Guarantor by the terms of the indenture.

“Tax Sharing Agreement” means the Tax Sharing Agreement dated as of June 9, 1997, by and among Red Apple Group, Inc., us and certain of our affiliates, as in effect on the Issue Date and as amended from time to time thereafter; provided that any such amendment does not increase the liability or decrease our or any of our Subsidiaries’ rights under the Tax Sharing Agreement.

“Unrestricted Subsidiary” means each of our Subsidiaries so designated by a resolution adopted by our Board of Directors and whose creditors have no direct or indirect recourse (including without limitation recourse with respect to the payment of principal of or interest on Indebtedness of such Subsidiary) to us or a Subsidiary; provided, however, that our Board of Directors will be prohibited from designating as an Unrestricted Subsidiary any Subsidiary existing on the date of the indenture. Our Board of Directors may designate an Unrestricted Subsidiary to be a Subsidiary, provided that (i) any such redesignation shall be deemed to be an incurrence by us and our Subsidiaries of the Indebtedness (if any) of such redesignated Subsidiary for purposes of the “Limitations on Additional Indebtedness” covenant in the indenture as of the date of such redesignation and (ii) immediately after giving effect to such redesignation and the incurrence of any such additional Indebtedness, we and our Subsidiaries could incur $1 of additional Indebtedness pursuant to the Consolidated Fixed Charge Coverage Ratio test set forth in the “Limitations on Additional Indebtedness” covenant described above. Any such designation or redesignation by the Board of Directors shall be evidenced to the Trustee by the filing with the Trustee of a certified copy of the Board Resolution giving effect to such designation or redesignation and an Officer’s Certificate certifying that such designation or redesignation complied with the foregoing conditions and setting forth the underlying calculations of such certificate.

“Voting Stock”, with respect to any Person, means securities of any class of Capital Stock of such Person entitling the holders thereof (whether at all times or only so long as no senior class of stock has voting power by reason of any contingency) to vote in the election of members of the board of directors of such Person.

“Weighted Average Life to Maturity”, when applied to any Indebtedness at any date, means the number of years obtained by dividing (i) the sum of the products obtained by multiplying (a) the amount of each then remaining installment, sinking fund, serial maturity or other required payment of principal, including payment at final maturity, in respect thereof, by (b) the number of years (calculated to the nearest one-twelfth) that will elapse between such date and the making of such payment by (ii) the then outstanding principal amount of such Indebtedness.

“Wholly-Owned Subsidiary” of ours means a Subsidiary of ours, of which 100% of the Common Equity (except for directors’ qualifying shares or certain minority interests owned by other Persons solely due to local law requirements that there be more than one stockholder, but which interest is not in excess of what is required for such purpose) is owned directly by us or through one or more of our Wholly-Owned Subsidiaries.

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CERTAIN UNITED STATES FEDERAL TAX CONSIDERATIONS

The following discussion summarizes certain material U.S. federal income tax and, in the case of non-U.S. holders, estate tax consequences of the exchange of old notes for new notes and the ownership and disposition of the new notes. This discussion is based upon the Internal Revenue Code of 1986, as amended (the “Code”), existing and proposed Treasury regulations, rulings and pronouncements of the Internal Revenue Service (the “IRS”), and judicial decisions as of the date hereof, all of which are subject to change, possibly with retroactive effect, or are subject to different interpretations. We cannot assure you that the IRS will not challenge one or more of the tax consequences described herein, and we have not obtained, nor do we intend to obtain, a ruling from the IRS or an opinion of counsel with respect to the U.S. federal tax consequences described herein.

This discussion is limited to holders who hold the notes as capital assets, within the meaning of section 1221 of the Code. Moreover, in this discussion, we do not purport to address all tax considerations that may be important to a particular holder in light of the holder’s circumstances, or to certain categories of investors (such as financial institutions, insurance companies, tax-exempt organizations, dealers in securities, partnerships or other pass-through entities or persons who hold the notes through partnerships or other pass-through entities, U.S. expatriates, former long-term residents or persons who hold the notes as part of a hedge, conversion transaction, straddle or other risk reduction transaction) that may be subject to special rules. This summary does not address the tax considerations arising under the laws of any foreign, state or local jurisdiction, any U.S. federal estate or gift tax considerations (except as otherwise set forth in “—Consequences to Non-U.S. Holders” below) or the effect of any tax treaty. We will treat the notes as our indebtedness for U.S. federal income tax purposes, and this discussion assumes that such treatment will be respected.

This discussion of certain U.S. federal tax considerations is for general information only and is not tax advice. You are urged to consult your tax advisor with respect to the application of U.S. federal tax laws to your particular situation as well as to any tax consequences under the laws of any state, local, foreign or other taxing jurisdiction and under any applicable tax treaty.

Exchange of Notes

The exchange of new notes for old notes will not be treated as a taxable event for U.S. federal income tax purposes. Rather, the new notes received by you will be treated as a continuation of the old notes in your hands. Accordingly, you will have the same tax basis and holding period in the new notes as you had in the old notes immediately prior to the exchange.

Consequences to U.S. Holders

You are a U.S. holder for purposes of this discussion if you are a beneficial owner of notes and you are for U.S. federal income tax purposes:

• an individual who is a citizen or resident of the United States;

• a corporation, or other entity taxable as a corporation for U.S. federal income tax purposes, that was created or organized in or under U.S. law (federal or state);

• an estate whose world-wide income is subject to U.S. federal income taxation; or

• a trust that either (1) is subject to the supervision of a court within the United States and has one or more U.S. persons with authority to control all substantial decisions or (2) has a valid election in effect under applicable Treasury regulations to be treated as a U.S. person.

Payments of Interest

Stated interest on the notes will be taxable to you as ordinary income at the time it is paid or accrued in accordance with your method of accounting for U.S. federal income tax purposes.

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Sale, Exchange, Redemption or Other Disposition of Notes

Subject to the discussion of market discount below, you will generally recognize gain or loss upon the sale, exchange, redemption or other disposition of a note in an amount equal to the difference between (1) the amount realized on the disposition (other than amounts attributable to accrued interest, which will be treated as ordinary interest income as described above) and (2) your adjusted tax basis in the note. Your adjusted tax basis in a note will generally equal your cost thereof, increased by any market discount previously included in income by you and reduced by any amortized premium. Any gain or loss that is recognized on the disposition of a note will be capital gain or loss, and will be a long-term capital gain or loss if you have held the note for more than one year. If you are not a corporation, then any long-term capital gain will be subject to U.S. federal income tax at a reduced rate. Your ability to deduct capital losses is subject to certain limitations.

Market Discount

A holder of notes may be affected by the market discount provisions of the Code. For this purpose, and subject to a de minimis exception, the market discount on a note generally will equal the amount, if any, by which the stated redemption price at maturity of the note (which is its stated principal amount) exceeds the holder’s adjusted tax basis in the note when purchased. Subject to a limited exception, these provisions generally require a U.S. holder who acquires a note at a market discount to include as ordinary income upon the disposition, retirement or gift of that note an amount equal to the lesser of (i) the gain realized upon the disposition or retirement or, in the case of a gift, the appreciation in the notes and (ii) the accrued market discount on that note at the time of disposition, maturity or gift, unless the U.S. holder elects to include accrued market discount in income over the remaining life of the note.

The election to include market discount in income over the life of the note, once made, applies to all market discount obligations acquired on or after the first taxable year to which the election applies and may not be revoked without the consent of the IRS. In general, market discount will be treated as accruing on a straight-line basis over the remaining term of the note at the time of acquisition, or, at the election of the U.S. holder, under a constant yield method. A U.S. holder who acquires a note at a market discount and who does not elect to include accrued market discount in income over the life of the note may be required to defer the deduction of a portion of the interest on any indebtedness incurred or maintained to purchase or carry the note until maturity or until the note is disposed of in a taxable transaction. The rules regarding market discount are complex, and U.S. holders should consult their tax advisors.

Premium

A U.S. holder who purchases a note at a premium over its stated principal amount, plus accrued interest, generally may elect to amortize that premium from the purchase date to the note’s maturity date under a constant-yield method. Amortized premium, which reduces the holder’s basis in the note, can only offset interest income on a note and may not be deducted against other income. The election to amortize premium on a constant yield method, once made, applies to all debt obligations held or subsequently acquired by the electing U.S. holder on or after the first day of the first taxable year to which the election applies and may not be revoked without the consent of the IRS. The rules regarding premium are complex, and U.S. holders should consult their tax advisors.

Information Reporting and Backup Withholding

In general, information reporting is required as to certain payments of principal and interest on the notes and on the proceeds of the sale of a note unless you are a corporation or other exempt recipient.

In addition, you will be subject to a backup withholding tax if you fail to (1) furnish your taxpayer identification number (social security or employer identification number), (2) certify that such number is correct or (3) certify that you are not subject to backup withholding. Any amount that is withheld under the backup withholding rules will be allowed as a refund or a credit against your U.S. federal income tax liability provided that you timely provide certain information to the IRS.

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Consequences to Non-U.S. Holders

You are a non-U.S. holder for purposes of this discussion if you are a beneficial owner of notes and you are for U.S. federal income for purposes an individual, corporation, trust or estate that is not a U.S. holder.

Payments of Interest

Subject to the discussion of backup withholding below, under the portfolio interest exemption, interest on a note that you receive will not be subject to U.S. federal income or withholding tax if the interest is not effectively connected with the conduct of a trade or business in the United States by you and you

• do not own, actually or constructively, 10% or more of the total combined voting power of all classes of our voting stock; and

• are not a controlled foreign corporation that is related to us; and

the U.S. person who would otherwise be required to deduct and withhold tax from the interest payment receives a statement meeting specified requirements that you are not a U.S. person. A statement that meets these specified requirements may be provided by you under penalties of perjury on a properly completed IRS Form W-8BEN or by certain other persons who have received certain information from you. If such a statement is not received by the person who would otherwise be required to withhold tax from the interest or if the portfolio interest exemption is not available for another reason, then the interest on a note may be subject to U.S. federal income tax withholding at a rate of 30%, or a lower rate that is available by reason of any applicable income tax treaty.

Interest on a note that is effectively connected with the conduct of a trade or business in the United States by you is not subject to withholding if you provide a properly completed IRS Form W-8ECI. However, you will generally be subject to U.S. federal income tax on such interest in the same manner as if you were a U.S. person. If you are a foreign corporation, you may also be subject to any applicable branch profits tax on such interest at a 30% rate (or lower applicable treaty rate).

Sale, Exchange, Redemption or Other Disposition of Notes

Subject to the discussion of backup withholding below, you will not be subject to U.S. federal income or withholding tax on any gain realized on the sale, exchange, redemption or other disposition of a note unless the gain is effectively connected with your conduct of a trade or business in the United States or, if you are an individual, you are present in the United States for 183 days or more in the taxable year in which the sale, exchange, redemption or other disposition occurs and certain other conditions are met. Any amount which you receive on the sale, exchange, redemption or other disposition of a note which is attributable to accrued interest will be subject to U.S. federal income tax in accordance with the rules for taxation of interest described above.

If your gain is effectively connected with your conduct of a United States trade or business, you generally will be subject to U.S. federal income tax on the net gain derived from the sale in the same manner as if you were a U.S. person. If you are a corporation, you may also, under certain circumstances, be subject to any applicable branch profits tax at a 30% rate (or lower applicable treaty rate). If you are subject to the 183-day rule described above, you generally will be subject to U.S. federal income tax at a rate of 30% (or a reduced rate under an applicable treaty) on the amount by which capital gains allocable to U.S. sources (including gains from the sale, exchange, retirement or other disposition of the note) exceed capital losses allocable to U.S. sources.

Information Reporting and Backup Withholding

If you are a non-U.S. holder, the payment of interest on a note will be subject to information reporting and backup withholding unless you certify as to your non-U.S. holder status by providing an IRS Form W-8BEN, IRS Form W-8EXP, or IRS Form W-8ECI, as applicable, to us, our paying agent or the person who would otherwise be required to withhold tax, or you otherwise qualify for an exemption. In any case, information reporting on IRS Form 1042-S will generally apply to interest payments.

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The payment of the proceeds of the disposition (including a redemption) of a note to or through the U.S. office of a U.S. or foreign broker will be subject to information reporting and backup withholding unless you provided the certification described above or you otherwise qualify for an exemption. The proceeds of a disposition (including a redemption) effected outside the United States by you to or through a foreign office of a broker generally will not be subject to backup withholding or information reporting. However, if such broker has specified connections with the United States, information reporting requirements will apply unless such broker has documentary evidence in its files of your non-U.S. status, or unless you otherwise qualify for an exemption. Any amount withheld under the backup withholding rules is allowable as a credit against your U.S. federal income tax liability, if any, provided the required information is furnished to the IRS.

United States Federal Estate Tax

A note held by an individual who at the time of death is not a citizen or resident of the United States (as specially defined for U.S. federal estate tax purposes) will not be subject to U.S. federal estate tax if the individual did not actually or constructively own 10% or more of the total combined voting power of all classes of our stock entitled to vote and, at the time of the individual’s death, payments with respect to such note would not have been effectively connected with the conduct by such individual of a trade or business in the United States.

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PLAN OF DISTRIBUTION AND SELLING RESTRICTIONS

The exchange offer is not being made to, nor will the issuer or the subsidiary guarantors accept surrenders of old notes for exchange from, holders of old notes in any jurisdiction in which the exchange offer or the acceptance thereof would not be in compliance with the securities or blue sky laws of such jurisdiction.

The distribution of this prospectus and the offer and sale of the new notes may be restricted by law in certain jurisdictions. Persons who come into possession of this prospectus or any of the new notes must inform themselves about and observe any such restrictions. You must comply with all applicable laws and regulations in force in any jurisdiction in which you purchase, offer or sell the new notes or possess or distribute this prospectus and, in connection with any purchase, offer or sale by you of the new notes, must obtain any consent, approval or permission required under the laws and regulations in force in any jurisdiction to which you are subject or in which you make such purchase, offer or sale.

Based on interpretive letters issued by the SEC staff to third parties in transactions similar to the exchange offer, we believe that a holder of new notes, other than a broker-dealer, may offer new notes (together with the guarantees thereof) for resale, resell and otherwise transfer the new notes (and the related guarantees) without delivering a prospectus to prospective purchasers, if the holder acquired the new notes in the ordinary course of business, has no intention of engaging in a “distribution,” as defined under the Securities Act, of the new notes and is not an “affiliate,” as defined under the Securities Act, of the issuer or any subsidiary guarantor.

Any broker-dealer that holds old notes acquired for its own account as a result of market-making activities or other trading activities (other than old notes acquired directly from the issuer) may exchange those old notes pursuant to the exchange offer; however, such broker-dealer may be deemed to be an “underwriter” within the meaning of the Securities Act and must, therefore, deliver a prospectus meeting the requirements of the Securities Act in connection with any resales of the new notes received by such broker-dealer in the exchange offer. To date, the SEC has taken the position that broker-dealers may use a prospectus such as this one to fulfill their prospectus delivery requirements with respect to resales of new notes received in an exchange such as the exchange pursuant to the exchange offer, if the old notes for which the new notes were received in the exchange were acquired for their own accounts as a result of market-making or other trading activities. Any profit on these resales of new notes and any commissions or concessions received by a broker-dealer in connection with these resales may be deemed to be underwriting compensation under the Securities Act. The letter of transmittal states that by acknowledging that it will deliver and by delivering a prospectus, a broker-dealer will not admit that it is an “underwriter” within the meaning of the Securities Act.

The issuer and the subsidiary guarantors shall use their best efforts to keep the exchange offer registration statement continuously effective, supplemented and amended to the extent necessary to ensure that it is available for resales of notes acquired by broker-dealers for their own accounts as a result of market-making activities or other trading activities, and to ensure that it conforms with the requirements of the registration rights agreement, the Securities Act and the policies, rules and regulations of the SEC as announced from time to time. The issuer shall provide sufficient copies of the latest version of such prospectus to broker-dealers promptly upon request at any time during such period in order to facilitate such resales.

A broker-dealer desiring that the exchange offer registration statement be kept continuously effective for resales of new notes must notify the issuer in writing that such broker-dealer acquired new notes as a result of market-making or other similar activities such that the broker-dealer would be required to deliver a prospectus under the Securities Act upon a subsequent sale or other disposition of the new notes. A broker-dealer making dispositions of new notes pursuant to the exchange offer registration statement will be required to suspend its use of the prospectus included in the exchange offer registration statement, as amended or supplemented, under specified circumstances upon receipt of written notice to that effect from the issuer.

We will not receive any proceeds from any sale of the new notes by broker-dealers. Broker-dealers acquiring new notes for their own accounts may sell the notes in one or more transactions in the over-the-counter

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market, in negotiated transactions, through writing options on the new notes or a combination of such methods of resale, at market prices prevailing at the time of resale, at prices related to such prevailing market prices or at negotiated prices. Any such resale may be made directly to purchasers or to or through brokers or dealers who may receive compensation in the form of commissions or concessions from any such broker-dealer and/or the purchasers of such new notes.

We have agreed to pay all expenses incident to the exchange offer (including the reasonable expenses of one counsel for the holders of the notes) other than commissions or concessions of any brokers or dealers and will indemnify holders of the notes (including any broker-dealers selling new notes in accordance with this “Plan of Distribution and Selling Restrictions” section) against certain liabilities, including liabilities under the Securities Act.

LEGAL MATTERS

The validity of the issuance of the new notes offered hereby and certain legal matters relating thereto will be passed upon for us by Kramer Levin Naftalis & Frankel LLP, New York, New York.

EXPERTS

The consolidated financial statements and schedule incorporated by reference in this prospectus have been audited by BDO Seidman, LLP, Independent Registered Public Accountants, to the extent and for the periods set forth in their reports incorporated herein by reference, and are incorporated herein in reliance upon such reports given upon the authority of said firm as experts in auditing and accounting.

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$200,000,000

Exchange Offer for

10 ¹/2% Senior Notes due 2012

United Refining Company

PROSPECTUS

                            ,                     

No dealer, sales representative or other person has been authorized to give any information or to make any representations other than those contained in this prospectus and, if given or made, such information or representations must not be relied upon as having been authorized by United Refining Company or any of its subsidiaries. This prospectus does not constitute an offer to sell or a solicitation of an offer to buy any securities other than the securities to which it relates, nor does it constitute an offer to sell or the solicitation of an offer to buy such securities, in any jurisdiction in which such offer or solicitation is not authorized, or in which the person making such offer or solicitation is not qualified to do so, or to any person to whom it is unlawful to make such an offer or solicitation. Neither the delivery of this prospectus nor any sale made hereunder shall, under any circumstances, create any implication that there has been no change in the affairs of United Refining Company and any of its subsidiaries since the date hereof or that information contained in this prospectus is correct as of any time subsequent to its date.

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS

Indemnification of Directors and Officers of United Refining Company

The following summary is qualified in its entirety by reference to the complete text of any statutes referred to below and the Certificate of Incorporation and the Bylaws of United Refining Company (the “Issuer”).

Section 1741 of the Pennsylvania Business Corporation Law (the “PBCL”) grants Pennsylvania corporations, unless otherwise restricted by the corporation’s Bylaws, the power to indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the corporation), by reason of the fact that he is or was a representative of the corporation, or is or was serving at the request of the corporation as a representative of another domestic or foreign corporation for profit or not-for-profit, partnership, joint venture, trust or other enterprise, against expenses (including attorney’s fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him in connection with the action or proceeding if he acted in good faith and in a manner he reasonably believed to be in, or not opposed to, the best interests of the corporation and, with respect to any criminal proceeding, had no reasonable cause to believe his conduct was unlawful.

In the context of derivative or corporate actions, Section 1742 of the PBCL grants Pennsylvania corporations, unless otherwise restricted in its bylaws, the power to indemnify any person who was or is a party, or is threatened to be made a party, to any threatened, pending or completed action by or in the right of the corporation to procure a judgment in its favor by reason of the fact that he is or was a representative of the corporation or is or was serving at the request of the corporation as a representative of another domestic or foreign corporation for profit or not-for-profit, partnership, joint venture, trust or other enterprise, against expenses (including attorneys’ fees) actually and reasonably incurred by him in connection with the defense or settlement of the action if he acted in good faith and in a manner he reasonably believed to be in, or not opposed to, the best interests of the corporation. Indemnification shall not be made under this section in respect of any claim, issue or matter as to which the person has been adjudged to be liable to the corporation unless and only to the extent that the court of common pleas of the judicial district embracing the county in which the registered office of the corporation is located or the court in which the action was brought determines upon application that, despite the adjudication of liability but in view of all the circumstances of the case, the person is fairly and reasonably entitled to indemnity for the expenses that the court of common pleas or other court deems proper.

Section 1743 of the PBCL further provides that, to the extent that a representative of a business corporation has been successful on the merits or otherwise in defense of any action or proceeding referred to in Section 1741 of the PBCL (relating to third-party actions) or Section 1742 of the PBCL (relating to derivative and corporate actions) or in defense of any claim, issue or matter therein, he shall be indemnified against expenses (including attorney fees) actually and reasonably incurred by him in connection therewith. Under Section 1745 of the PBCL, expenses (including attorneys’ fees) incurred in defending any action or proceeding referred to in this subchapter may be paid by a business corporation in advance of the final disposition of the action or proceeding upon receipt of an undertaking by or on behalf of the representative to repay the amount if it is ultimately determined that he is not entitled to be indemnified by the corporation as authorized herein or otherwise. Under Section 1746 of the PBCL, the indemnification and advancement of expenses shall not be deemed exclusive of any other rights to which a person seeking indemnification or advancement of expenses may be entitled under any bylaw, agreement, vote of shareholders or disinterested directors or otherwise, both as to action in his official capacity and as to action in another capacity while holding that office.

Section 1747 of the PBCL further provides that, unless otherwise restricted in its Bylaws, a business corporation shall have power to purchase and maintain insurance.

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The Certificate of Incorporation and Bylaws of the Issuer do not contain provisions regarding the indemnification of its officers and directors.

The Issuer maintains an insurance policy on behalf of itself and its subsidiaries, and on behalf of the directors and officers thereof, covering certain liabilities which may arise as a result of the actions of such directors and officers.

Indemnification of Directors and Officers of the Subsidiary Guarantors

The following summaries are qualified in their entirety by reference to the complete text of any statutes referred to below and the certificates of incorporation and the bylaws or similar organizational documents of each guarantor (other than the Issuer) guaranteeing the Issuer’s 10 ¹/2% Senior Notes due 2012 (collectively, the “Subsidiary Guarantors”).

Delaware Subsidiary Guarantors

United Jet Center, Inc. (“UJCI”) and Vulcan Asphalt Refining Corporation (“VARC”), each a Delaware corporation.

Section 145 of the General Corporation Law of the State of Delaware (the “DGCL”) grants corporations the power to indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the corporation) by reason of the fact that the person is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by the person in connection with such action, suit or proceeding if the person acted in good faith and in a manner the person reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe the person’s conduct was unlawful.

In the case of an action by or in the right of the corporation, Section 145 of the DGCL grants corporations the power to indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by reason of the fact that the person is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by the person in connection with such action, suit or proceeding if the person acted in good faith and in a manner the person reasonably believed to be in or not opposed to the best interests of the corporation and except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable to the corporation unless and only to the extent that the Court of Chancery or the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which the Court of Chancery or such other court shall deem proper.

Section 145 of the DGCL also empowers a corporation to purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against any liability asserted against such person and incurred by such person in any such capacity, or arising out of such person’s status as such, whether or not the corporation would have the power to indemnify such person against such liability under Section 145 of the DGCL.

Section 102(b)(7) of the DGCL allows a corporation to eliminate or limit the personal liability of directors to a corporation or its stockholders for monetary damages for a breach of fiduciary duty as a director, except

II-2

where the director breached his duty of loyalty, failed to act in good faith, engaged in intentional misconduct or knowingly violated a law, authorized the payment of a dividend or approved a stock repurchase or redemption in violation of Delaware corporate law or obtained an improper personal benefit.

The Certificate of Incorporation of UJCI and the Certificate of Incorporation and Bylaws of VARC provide for indemnification of the directors, officers, employers and other agents of UJCI and VARC, respectively, to the fullest extent permitted by the provisions of Section 145 of the DGCL, as the same shall be amended and supplemented.

Article Seven of the UJCI Certificate of Incorporation provides for the elimination of personal liability of directors of the corporation to the corporation or its stockholders for monetary damages for breach of fiduciary duty as a director, except in the cases of director liability (i) for breach of the director’s duty of loyalty to the corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) under Section 174 of the DGCL or (iv) for any transaction from which the director derived an improper benefit.

Article Eight of the VARC Certificate of Incorporation also provides for the elimination of personal liability of directors of the corporation to the corporation or its stockholders for monetary damages for breach of fiduciary duty as a director, to the extent permitted by the DGCL, as amended and supplemented, provided that any amendment or repeal of such provision shall not apply to or affect the liability of any director with respect to acts or omissions occurring prior to such amendment or repeal. In addition, Section 5.1 of the VARC Bylaws provides for indemnification of directors and officers in language consistent with Section 145 of the DGCL.

The Issuer maintains an insurance policy on behalf of itself and its subsidiaries, including UJCI and VARC, and on behalf of the directors and officers thereof, covering certain liabilities which may arise as a result of the actions of such directors and officers.

Michigan Subsidiary Guarantors

Bell Oil Corp. (“BOC”) and Super Test Petroleum, Inc. (“STPI”), each a Michigan Corporation.

Sections 561 and 562 of the Michigan Corporate Business Act (the “MCBA”) provide that a Michigan corporation shall have power to indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending, or completed action, suit, or proceeding, whether civil, criminal, administrative or investigative and whether formal or informal, including an action by or in the right of the corporation to procure judgment in its favor, by reason of the fact that he or she is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, partner, trustee, employee or agent of another foreign or domestic corporation, partnership, joint venture, trust or other enterprise, whether for profit or not, against expenses, including attorneys’ fees, judgments, penalties, fines and amounts paid in settlement actually and reasonably incurred by him or her in connection with such action, suit or proceeding if the person acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the best interests of the corporation or its shareholders, and with respect to any criminal action or proceeding, if the person had no reasonable cause to believe his conduct was unlawful.

Section 563 of the MCBA states that, to the extent that a director, officer, employee, or agent of a corporation has been successful on the merits or other in defense of an action, suit, or proceeding referred to in Sections 561 or 562 of the MCBA, or in defense of a claim, issue, or matter in the action, suit, or proceeding, he or she shall be indemnified against actual and reasonable expenses, including attorneys’ fee, incurred by him or her in connection with the action, suit or proceeding and an action, suit, or proceeding brought to enforce the mandatory indemnification provided in this section.

Under Section 565 of the MCBA, the indemnification or advancement of expenses is not exclusive of other rights to which a person seeking indemnification or advancement of expenses may be entitled under the articles

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of incorporation, bylaws, or a contractual agreement and continues as to a person who ceases to be a director, officer, employee, or agent and shall inure to the benefit of the heirs, personal representatives, and administrators of the person.

Section 567 of the MCBA grants Michigan corporations the power to purchase and maintain insurance on behalf of any person described above.

The Certificates of Incorporation and Bylaws of BOC and STPI do not contain provisions regarding the indemnification of its officers and directors.

The Issuer maintains an insurance policy on behalf of itself and its subsidiaries, including BOC and STPI, and on behalf of the directors and officers thereof, covering certain liabilities which may arise as a result of the actions of such directors and officers.

New York Subsidiary Guarantors

Independent Gasoline and Oil Company of Rochester, Inc. (“IGOCRI”), Kiantone Pipeline Corporation (“KPC”) and Kwik-Fil, Inc. (“K-FI”), each a New York corporation.

Section 722(a) of the New York Business Corporation Law (the “NYBCL”) provides that a corporation may indemnify any person made, or threatened to be made, a party to any action or proceeding (other than one by or in the right of the corporation to procure a judgment in its favor), whether civil or criminal, including an action by or in the right of any other corporation or any partnership, joint venture, trust, employee benefit plan or other enterprise, which any director or officer of the corporation served in any capacity at the request of the corporation, by reason of the fact that he, his testator or intestate, was a director or officer of the corporation, or served such other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise in any capacity, against judgments, fines, amounts paid in settlement and reasonable expenses, including attorneys’ fees actually and necessarily incurred as a result of such action or proceeding, or any appeal therein, if such director or officer acted in good faith for a purpose which he reasonably believed to be in, or, in the case of service for any other corporation or partnership, joint venture, trust, employee benefit plan or other enterprise, not opposed to, the best interests of the corporation and, in criminal actions or proceedings, in addition, had no reasonable cause to believe that his conduct was unlawful.

Section 722(c) of the NYBCL provides that a corporation may indemnify its directors and officers in relation to an action by or in the right of the corporation to procure a judgment in its favor in similar circumstances to those described in Section 722(a) of the NYBCL against amounts paid in settlement and reasonable expenses, including attorney’s fees, actually and necessarily incurred by him or her in connection with the defense or settlement of such action, except that no indemnification shall be made in respect of a threatened action, or a pending action which is settled or otherwise disposed of, or any claim, issue or matter as to which such person shall have been adjudged to be liable to the corporation, unless and only to the extent that the court in which the action was brought, or, if no action was brought, any court of competent jurisdiction, determines upon application that, in view of all the circumstances of the case, the person is fairly and reasonably entitled to indemnity for such portion of the settlement amount and expenses as the court deems proper.

Section 721 of the NYBCL provides that, in addition to indemnification provided in Article 7 of the NYBCL, a corporation may indemnify a director or officer by a provision contained in the certificate of incorporation or bylaws or by a duly authorized resolution of its shareholders or directors or by agreement, provided that no indemnification may be made to or on behalf of any director or officer if a judgment or other final adjudication adverse to the director or officer establishes that his acts were committed in bad faith or were the result of active and deliberate dishonesty and were material to the cause of action, or that such director or officer personally gained in fact a financial profit or other advantage to which he was not entitled.

Section 726 of the NYBCL permits the purchase and maintenance of insurance to indemnify (1) the corporation for any obligation which it incurs as a result of the indemnification of directors and officers under

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sections outlined above, (2) directors and officers in instances in which they may be indemnified by the corporation under such sections, and (3) directors and officers in instances in which they may not otherwise be indemnified by the corporation under such sections, provided the contract of insurance covering such directors and officers provides, in a manner acceptable to the New York superintendent of insurances, for a retention amount and for co-insurance.

Section 402(b) of the NYBCL provides that a corporation’s certificate of incorporation may include a provision eliminating or limiting the personal liability of its directors to the corporation or its shareholders for damages for any breach of duty in such capacity, except in circumstances involving acts or omissions not in good faith or that involve intentional misconduct or a knowing violation of law, self-dealing, liability arising under Section 7.19 of the NYBCL or acts or omissions that occurred prior to the adoption of a provision authorized by Section 402(b) of the NYBCL.

The Certificates of Incorporation and Bylaws of IGOCRI, KPC and K-FI do not contain provisions regarding the indemnification of its officers and directors.

The Issuer maintains an insurance policy on behalf of itself and its subsidiaries, including IGOCRI, KPC and K-FI, and on behalf of the directors and officers thereof, covering certain liabilities which may arise as a result of the actions of such directors and officers.

Ohio Subsidiary Guarantors

PPC, INC. (“PPCI”), an Ohio Corporation.

Sections 1701.13(E)(1)-(2) of the Ohio General Corporation Law (the “OGCL”) provide that a corporation may indemnify or agree to indemnify any person who was or is a party, or is threatened to be made a party, to any threatened, pending, or completed action, suit, or proceeding, whether civil, criminal, administrative, or investigative, including an action or suit by or in the right of the corporation to procure a judgment in its favor, by reason of the fact that he is or was a director, officer, employee, or agent of the corporation, or is or was serving at the request of the corporation as a director, trustee, officer, employee, member, manager, or agent of another corporation, domestic or foreign, nonprofit or for profit, a limited liability company, or a partnership, joint venture, trust, or other enterprise, against expenses, including attorney’s fees, judgments, fines, and amounts paid in settlement actually and reasonably incurred by him in connection with such action, suit or proceeding, if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, if he had no reasonable cause to believe his conduct was unlawful.

Under Section 1701.13(E)(3) of the OGCL, to the extent that a director, trustee, officer, employee, member, manager, or agent has been successful on the merits or otherwise in defense of any action, suit, or proceeding referred to in Section 1701.13(E)(1) or (2) of the OGCL, or in defense of any claim, issue, or matter therein, he shall be indemnified against expenses, including attorney’s fees, actually and reasonably incurred by him in connection with the action, suit, or proceeding.

Section 1701.13(E)(5)(b) of the OGCL provides that expenses, including attorney’s fees, incurred by a director in defending the action, suit, or proceeding shall be paid by the corporation as they are incurred, in advance of the final disposition of the action, suit, or proceeding, upon receipt of an undertaking.

Section 1701.13(6) of the OGCL states that the indemnification authorized by this section shall not be exclusive of, and shall be in addition to, any other rights granted to those seeking indemnification under the articles, the regulations, any agreement a vote of shareholders or disinterested directors, or otherwise, both as to action in their official capacities and as to action in another capacity while holding their offices or positions, and shall continue as to a person who has ceased to be a director, trustee, officer, employee, member, manager, or agent and shall inure to the benefit of the heirs, executors, and administrators of such a person.

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Section 1701.13(7) of the OGCL grants Ohio corporations the power to purchase and maintain insurance on behalf of or for its officers and directors.

The Certificate of Incorporation and Bylaws of PPCI do not contain any provisions regarding the indemnification of its officers and directors.

The Company maintains an insurance policy on behalf of itself and its subsidiaries, including PPCI, and on behalf of the directors and officers thereof, covering certain liabilities which may arise as a result of the actions of such directors and officers.

Pennsylvania Subsidiary Guarantors

Country Fair, Inc. (“CFI”), Kiantone Pipeline Company (“KPCY”), Kwik Fill Corporation (“KFC”) and United Refining Company of Pennsylvania (“URCP”), each a Pennsylvania corporation.

As discussed in greater detail with respect to the Issuer above, Sections 1741-1747 of the Pennsylvania Business Corporations Law grant Pennsylvania corporations, unless otherwise restricted by the corporation’s Bylaws, the power to indemnify representatives of the corporation.

Article VIII of the Bylaws of KFC contains provisions requiring indemnification of its directors and officers to the fullest extent permitted by law and permitting it to maintain insurance to protect itself and its directors or officers against liability arising out of such directors’ and officers’ service to KFC.

The Certificates of Incorporation of CFI, KPCY, KFC and URCP, as well as the Bylaws of CFI, KPCY and URCP, do not contain any provisions regarding the indemnification of its officers and directors.

The Issuer maintains an insurance policy on behalf of itself and its subsidiaries, including CFI, KPCY, KFC and URCP, and on behalf of the directors and officers thereof, covering certain liabilities which may arise as a result of the actions of such directors and officers.

ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a) Exhibits.

Exhibit Number	Description
3.1	Certificate of Incorporation of United Refining Company (“URC”). Incorporated by reference to Exhibit 3.1 to the Registrant’s Registration Statement on Form S-4 (File No. 333-35083) (the “Registration Statement”).
3.2	Bylaws of URC. Incorporated by reference to Exhibit 3.2 to the Registration Statement.
3.3	Certificate of Incorporation of United Refining Company of Pennsylvania (“URCP”). Incorporated by reference to Exhibit 3.3 to the Registration Statement.
3.4	Bylaws of URCP. Incorporated by reference to Exhibit 3.4 to the Registration Statement.
3.5	Certificate of Incorporation of Kiantone Pipeline Corporation (“KPC”). Incorporated by reference to Exhibit 3.5 to the Registration Statement.
3.6	Bylaws of KPC. Incorporated by reference to Exhibit 3.6 to the Registration Statement.
3.7	Certificate of Incorporation of Kiantone Pipeline Company (“KPCY”). Incorporated by reference to Exhibit 3.7 to the Registration Statement.
3.8	Bylaws of KPCY. Incorporated by reference to Exhibit 3.8 to the Registration Statement.

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Exhibit Number	Description
3.9	Certificate of Incorporation of Kwik Fill Corporation (“KFC”). Incorporated by reference to Exhibit 3.9 to the Registration Statement.
3.10	Bylaws of KFC. Incorporated by reference to Exhibit 3.10 to the Registration Statement.
3.11	Certificate of Incorporation of Independent Gasoline & Oil Company of Rochester, Inc. (“IGOCRI”). Incorporated by reference to Exhibit 3.11 to the Registration Statement.
3.12	Bylaws of IGOCRI. Incorporated by reference to Exhibit 3.12 to the Registration Statement.
3.13	Certificate of Incorporation of Bell Oil Corp. (“BOC”). Incorporated by reference to Exhibit 3.13 to the Registration Statement.
3.14	Bylaws of BOC. Incorporated by reference to Exhibit 3.14 to the Registration Statement.
3.15	Certificate of Incorporation of PPC, Inc. (“PPCI”). Incorporated by reference to Exhibit 3.15 to the Registration Statement.
3.16	Bylaws of PPCI. Incorporated by reference to Exhibit 3.16 to the Registration Statement.
3.17	Certificate of Incorporation of Super Test Petroleum, Inc. (“STPI”). Incorporated by reference to Exhibit 3.17 to the Registration Statement.
3.18	Bylaws of STPI. Incorporated by reference to Exhibit 3.18 to the Registration Statement.
3.19	Certificate of Incorporation of Kwik-Fil, Inc. (“K-FI”). Incorporated by reference to Exhibit 3.19 to the Registration Statement.
3.20	Bylaws of K-FI. Incorporated by reference to Exhibit 3.20 to the Registration Statement.
3.21	Certificate of Incorporation of Vulcan Asphalt Refining Corporation (“VARC”). Incorporated by reference to Exhibit 3.21 to the Registration Statement.
3.22	Bylaws of VARC. Incorporated by reference to Exhibit 3.22 to the Registration Statement.
3.23	Certificate of Incorporation of United Jet Center, Inc. (“UJCI”). Incorporated by reference to Exhibit 3.23 to the Registration Statement.
3.24	Bylaws of UJCI. Incorporated by reference to Exhibit 3.24 to the Registration Statement.
*3.25	Certificate of Incorporation of Country Fair, Inc. (“CFI”).
*3.26	Bylaws of CFI.
4.1	Indenture dated as of August 6, 2004 between URC, CFI, KPC, KPCY, UJCI, URCP, KFC, IGOCRI, BOC, PPCI, STPI, K-FI, VARC and the Bank of New York (“BONY”), relating to the 10 1/2% Senior Notes due 2012. Incorporated by reference to Exhibit 4.1 to Registrant’s Annual Report on Form 10-K for fiscal year ended August 31, 2004.
4.2	Form of Note. Incorporated by reference to Exhibit 4.2 to Registrant’s Annual Report on Form 10-K for fiscal year ended August 31, 2004.
**5.1	Opinion of Kramer Levin Naftalis & Frankel LLP.
10.1	Purchase Agreement dated August 6, 2004 between URC, CFI, KPC, KPCY, UJCI, URCP, KFC, IGOCRI, BOC, PPCI, STPI, STPI, K-FI, VARC, Citigroup (“CITI”), Goldman, Sachs & Co. (“GSC”), and PCN Capital Markets, Inc. (“PNCCMI”). Incorporated by reference to Exhibit 10.1 to Registrant’s Annual Report on Form 10-K for fiscal year ended August 31, 2004.
10.2	Registration Rights Agreement dated August 6, 2004 between URC, CFI, KPC, KPCY, UJCI, URCP, KFC, IGOCRI, BOC, STPI, K-FI, VARC, CITI, GSC and PNCCMI. Incorporated by reference to Exhibit 10.2 to Registrant’s Annual Report on Form 10-K for fiscal year ended August 31, 2004.

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Exhibit Number	Description
10.3	Servicing Agreement dated June 9, 1997 between URC and Red Apple Group, Inc. Incorporated by reference to Exhibit 10.4 to the Registration Statement.
10.4	Deferred Compensation Agreement dated September 1, 1996 with Thomas C. Covert. Incorporated by reference to Exhibit 10.14 of Registrant’s Annual Report on Form 10-K for fiscal year ended August 31, 1998.
10.5	Amended and Restated Credit Agreement dated July 12, 2002 by and among URC, URCP, KPC, CFI and the Banks party thereto and PNC Bank, National Association, as Agent. Incorporated by reference to Exhibit 10.21 of Registrant’s Quarterly Report on Form 10-Q for fiscal quarter ended May 31, 2002.
10.6	Amendment to Credit Agreement dated as of July 12, 2002 by and among URC, URCP, KPC, CFI and the Banks party thereto and PNC Bank, National Association, as Agent. Incorporated by reference to Exhibit 10.12 of Registrant’s Annual Report on Form 10-K for fiscal year ended August 31, 2002.
10.7	Limited Waiver and Amendment No. 3 to Credit Agreement dated as of March 24, 2003 by and among, URC, URCP, KPC, CFI and the Banks thereto and PNC Bank, National Association, as Agent. Incorporated by reference to Exhibit 10.13 of Registrant’s Quarterly Report on Form 10-Q for fiscal quarter ended May 31, 2003.
10.8	Amendment to Credit Agreement dated as of January 27, 2004 by and among URC, URCP, KPC, CFI, Kwik Fill and the Banks party thereto and PNC Bank, National Association, as Agent. Incorporated by reference to Exhibit 10.9 of Registrant’s Quarterly Report on Form 10-Q for fiscal quarter ended February 29, 2004.
10.9	Amendment No. 5 to Credit Agreement dated as of August 6, 2004 by and among URC, URCP, KPC, CFI, K-FI and the Banks party thereto and PNC Bank, National Association, as Agent. Incorporated by reference to Exhibit 10.9 to Registrant’s Annual Report on Form 10-K for fiscal year ended August 31, 2004.
*12	Computation of Ratio of Earnings to Fixed Charges.
*13.1	Registrant’s Annual Report on Form 10-K for fiscal year ended August 31, 2004.
21.1	Subsidiaries of the Registrants. A) Incorporated by reference to Exhibit 21.1 to the Registration Statement. B) Country Fair, Inc. Incorporated in the Commonwealth of Pennsylvania in 1965, doing business as “Country Fair.”
**23.1	Consent of Kramer Levin Naftalis & Frankel LLP (included in Exhibit 5.1).
*23.2	Consent of BDO Seidman, LLP.
24.1	Powers of Attorney (contained on the signature page to the registration statement).
*25.1	Statement of Eligibility of Trustee on Form T-1 relating to the 10 1/2% Senior Notes due 2012.
*99.1	Letter of Transmittal relating to the 10 1/2% Senior Notes due 2012.
*99.2	Form of Notice of Guaranteed Delivery relating to the 10 1/2% Senior Notes due 2012.
*99.3	Form of Letter to Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees relating to the 10 1/2% Senior Notes due 2012.
*99.4	Form of Letter to Clients relating to the 10 1/2% Senior Notes due 2012.

* Filed herewith.

** To be filed by amendment.

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(b) Financial Statement Schedules.

Report of Independent Registered Public Accounting Firm Schedule II—Valuation and Qualifying Accounts. Incorporated by reference to Item 15(a)(2) of Registrant’s Annual Report on Form 10-K for fiscal year ended August 31, 2004.

ITEM 22. UNDERTAKINGS

The following undertakings are made by each of the undersigned registrants:

(a) The undersigned registrant hereby undertakes:

(1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:

(i) To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933;

(ii) To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement.

(iii) To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement.

(2) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

(3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.

(b) The undersigned registrant hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, each filing of the registrant’s annual report pursuant to section 13(a) or section 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan’s annual report pursuant to section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

(c) Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the

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matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question of whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.

The undersigned registrant hereby undertakes to respond to requests for information that is incorporated by reference into the prospectus pursuant to Item 4, 10(b), 11 or 13 of this form, within one business day of receipt of such request, and to send the incorporated documents by first class mail or other equally prompt means. This includes information contained in documents filed subsequent to the effective date of the registration statement through the date of responding to the request.

The undersigned registrant hereby undertakes to supply by means of a post-effective amendment all information concerning a transaction, and the company being acquired involved therein, that was not the subject of and included in the registration statement when it became effective.

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SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereto duly authorized, in the City of Warren, State of Pennsylvania, on December 16, 2004.

UNITED REFINING COMPANY
By:	/s/ Myron L. Turfitt
	Myron L. Turfitt President and Chief Operating Officer

POWER OF ATTORNEY

Each person whose signature appears below constitutes and appoints Myron L. Turfitt, James E. Murphy and Martin R. Bring, or any of them acting singly, as his lawful attorney-in-fact and agent with full power of substitution and resubstitution for him and in his name, place and stead in any and all capacities to execute in the name of each such person who is then an officer or director of the registrant any and all amendments (including post-effective amendments) to this registration statement and to file the same with all exhibits thereto and other documents in connection therewith with the Securities and Exchange Commission, granting unto said attorney-in-fact and agent full power and authority to do and perform each and every act and thing required or necessary to be done in and about the premises as fully as he might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agent, or his substitute or substitutes, may lawfully do or cause to be done by virtue thereof. Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the dates indicated.

Signature	Title	Date
/s/ John A. Catsimatidis John A. Catsimatidis	Chairman of the Board, Chief Executive Officer, Director	December 16, 2004
/s/ Myron L. Turfitt Myron L. Turfitt	President, Chief Operating Officer, Director	December 16, 2004
/s/ James E. Murphy James E. Murphy	Vice President, Chief Financial Officer (Principal Accounting Officer)	December 15, 2004
/s/ Thomas C. Covert Thomas C. Covert	Vice Chairman, Director	December 16, 2004
/s/ Martin R. Bring Martin R. Bring	Director	December 16, 2004
/s/ Evan Evans Evan Evans	Director	December 16, 2004
/s/ Douglas Lemmonds Douglas Lemmonds	Director	December 15, 2004

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Signature	Title	Date
Andrew Maloney	Director	December     , 2004
/s/ Dennis Mehiel Dennis Mehiel	Director	December 16, 2004
/s/ Kishore Lall Kishore Lall	Director	December 16, 2004

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SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereto duly authorized, in the City of Warren, State of Pennsylvania, on December 16, 2004.

UNITED REFINING COMPANY OF PENNSYLVANIA
By:	/s/ Myron L. Turfitt
	Myron L. Turfitt President and Chief Operating Officer

POWER OF ATTORNEY

Each person whose signature appears below constitutes and appoints Myron L. Turfitt or James E. Murphy, or any of them acting singly, as his lawful attorney-in-fact and agent with full power of substitution and resubstitution for him and in his name, place and stead in any and all capacities to execute in the name of each such person who is then an officer or director of the registrant any and all amendments (including post-effective amendments) to this registration statement and to file the same with all exhibits thereto and other documents in connection therewith with the Securities and Exchange Commission, granting unto said attorney-in-fact and agent full power and authority to do and perform each and every act and thing required or necessary to be done in and about the premises as fully as he might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agent, or his substitute or substitutes, may lawfully do or cause to be done by virtue thereof. Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the dates indicated.

Signature	Title	Date
/s/ John A. Catsimatidis John A. Catsimatidis	Chairman of the Board, Chief Executive Officer, Director	December 16, 2004
/s/ Myron L. Turfitt Myron L. Turfitt	President, Chief Operating Officer	December 16, 2004
/s/ James E. Murphy James E. Murphy	Vice President, Chief Financial Officer (Principal Accounting Officer)	December 15, 2004

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SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereto duly authorized, in the City of Warren, State of Pennsylvania, on December 16, 2004.

KIANTONE PIPELINE CORPORATION
By:	/s/ Myron L. Turfitt
	Myron L. Turfitt President and Chief Operating Officer

POWER OF ATTORNEY

Each person whose signature appears below constitutes and appoints Myron L. Turfitt or James E. Murphy, or any of them acting singly, as his lawful attorney-in-fact and agent with full power of substitution and resubstitution for him and in his name, place and stead in any and all capacities to execute in the name of each such person who is then an officer or director of the registrant any and all amendments (including post-effective amendments) to this registration statement and to file the same with all exhibits thereto and other documents in connection therewith with the Securities and Exchange Commission, granting unto said attorney-in-fact and agent full power and authority to do and perform each and every act and thing required or necessary to be done in and about the premises as fully as he might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agent, or his substitute or substitutes, may lawfully do or cause to be done by virtue thereof. Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the dates indicated.

Signature	Title	Date
/s/ John A. Catsimatidis John A. Catsimatidis	Chairman of the Board, Chief Executive Officer, Director	December 16, 2004
/s/ Myron L. Turfitt Myron L. Turfitt	President, Chief Operating Officer	December 16, 2004
/s/ James E. Murphy James E. Murphy	Vice President, Chief Financial Officer (Principal Accounting Officer)	December 15, 2004

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SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereto duly authorized, in the City of Warren, State of Pennsylvania, on December 16, 2004.

KIANTONE PIPELINE COMPANY
By:	/s/ Myron L. Turfitt
	Myron L. Turfitt Executive Vice President

POWER OF ATTORNEY

Each person whose signature appears below constitutes and appoints Myron L. Turfitt and James E. Murphy, or any of them acting singly, as his lawful attorney-in-fact and agent with full power of substitution and resubstitution for him and in his name, place and stead in any and all capacities to execute in the name of each such person who is then an officer or director of the registrant any and all amendments (including post-effective amendments) to this registration statement and to file the same with all exhibits thereto and other documents in connection therewith with the Securities and Exchange Commission, granting unto said attorney-in-fact and agent full power and authority to do and perform each and every act and thing required or necessary to be done in and about the premises as fully as he might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agent, or his substitute or substitutes, may lawfully do or cause to be done by virtue thereof. Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the dates indicated.

Signature	Title	Date
/s/ John A. Catsimatidis John A. Catsimatidis	Chairman of the Board, Chief Executive Officer, Director	December 16, 2004
/s/ Myron L. Turfitt Myron L. Turfitt	Executive Vice President	December 16, 2004
/s/ James E. Murphy James E. Murphy	Vice President, Chief Financial Officer (Principal Accounting Officer)	December 15, 2004

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SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereto duly authorized, in the City of Warren, State of Pennsylvania, on December 16, 2004.

UNITED JET CENTER
By:	/s/ Myron L. Turfitt
	Myron L. Turfitt Executive Vice President

POWER OF ATTORNEY

Each person whose signature appears below constitutes and appoints Myron L. Turfitt and James E. Murphy, or any of them acting singly, as his lawful attorney-in-fact and agent with full power of substitution and resubstitution for him and in his name, place and stead in any and all capacities to execute in the name of each such person who is then an officer or director of the registrant any and all amendments (including post-effective amendments) to this registration statement and to file the same with all exhibits thereto and other documents in connection therewith with the Securities and Exchange Commission, granting unto said attorney-in-fact and agent full power and authority to do and perform each and every act and thing required or necessary to be done in and about the premises as fully as he might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agent, or his substitute or substitutes, may lawfully do or cause to be done by virtue thereof. Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the dates indicated.

Signature	Title	Date
/s/ John A. Catsimatidis John A. Catsimatidis	Chairman of the Board, Chief Executive Officer, Director	December 16, 2004
/s/ Myron L. Turfitt Myron L. Turfitt	Executive Vice President	December 16, 2004
/s/ James E. Murphy James E. Murphy	Vice President, Chief Financial Officer (Principal Accounting Officer)	December 15, 2004

II-16

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereto duly authorized, in the City of Warren, State of Pennsylvania, on December 16, 2004.

VULCAN ASPHALT REFINING CORPORATION
By:	/s/ Myron L. Turfitt
	Myron L. Turfitt Executive Vice President

POWER OF ATTORNEY

Each person whose signature appears below constitutes and appoints Myron L. Turfitt and James E. Murphy, or any of them acting singly, as his lawful attorney-in-fact and agent with full power of substitution and resubstitution for him and in his name, place and stead in any and all capacities to execute in the name of each such person who is then an officer or director of the registrant any and all amendments (including post-effective amendments) to this registration statement and to file the same with all exhibits thereto and other documents in connection therewith with the Securities and Exchange Commission, granting unto said attorney-in-fact and agent full power and authority to do and perform each and every act and thing required or necessary to be done in and about the premises as fully as he might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agent, or his substitute or substitutes, may lawfully do or cause to be done by virtue thereof. Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the dates indicated.

Signature	Title	Date
/s/ John A. Catsimatidis John A. Catsimatidis	Chairman of the Board, Chief Executive Officer, Director	December 16, 2004
/s/ Myron L. Turfitt Myron L. Turfitt	Executive Vice President	December 16, 2004
/s/ James E. Murphy James E. Murphy	Vice President, Chief Financial Officer (Principal Accounting Officer)	December 15, 2004

II-17

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereto duly authorized, in the City of Warren, State of Pennsylvania, on December 16, 2004.

COUNTRY FAIR, INC.
By:	/s/ Myron L. Turfitt
	Myron L. Turfitt Executive Vice President

POWER OF ATTORNEY

Each person whose signature appears below constitutes and appoints Myron L. Turfitt and James E. Murphy, or any of them acting singly, as his lawful attorney-in-fact and agent with full power of substitution and resubstitution for him and in his name, place and stead in any and all capacities to execute in the name of each such person who is then an officer or director of the registrant any and all amendments (including post-effective amendments) to this registration statement and to file the same with all exhibits thereto and other documents in connection therewith with the Securities and Exchange Commission, granting unto said attorney-in-fact and agent full power and authority to do and perform each and every act and thing required or necessary to be done in and about the premises as fully as he might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agent, or his substitute or substitutes, may lawfully do or cause to be done by virtue thereof. Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the dates indicated.

Signature	Title	Date
/s/ John A. Catsimatidis John A. Catsimatidis	Chairman of the Board, Chief Executive Officer, Director	December 16, 2004
/s/ Myron L. Turfitt Myron L. Turfitt	Executive Vice President, Director	December 16, 2004
/s/ James E. Murphy James E. Murphy	Vice President, Chief Financial Officer	December 15, 2004
/s/ Kishore Lall Kishore Lall	Director	December 16, 2004

II-18

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereto duly authorized, in the City of Warren, State of Pennsylvania, on December 16, 2004.

KWIK-FIL, INC.
By:	/s/ Myron L. Turfitt
	Myron L. Turfitt Executive Vice President

POWER OF ATTORNEY

Each person whose signature appears below constitutes and appoints Myron L. Turfitt and James E. Murphy, or any of them acting singly, as his lawful attorney-in-fact and agent with full power of substitution and resubstitution for him and in his name, place and stead in any and all capacities to execute in the name of each such person who is then an officer or director of the registrant any and all amendments (including post-effective amendments) to this registration statement and to file the same with all exhibits thereto and other documents in connection therewith with the Securities and Exchange Commission, granting unto said attorney-in-fact and agent full power and authority to do and perform each and every act and thing required or necessary to be done in and about the premises as fully as he might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agent, or his substitute or substitutes, may lawfully do or cause to be done by virtue thereof. Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the dates indicated.

Signature	Title	Date
/s/ John A. Catsimatidis John A. Catsimatidis	Chairman of the Board, Chief Executive Officer, Director	December 16, 2004
/s/ Myron L. Turfitt Myron L. Turfitt	Executive Vice President	December 16, 2004
/s/ James E. Murphy James E. Murphy	Vice President, Chief Financial Officer (Principal Accounting Officer)	December 15, 2004

II-19

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereto duly authorized, in the City of Warren, State of Pennsylvania, on December 16, 2004.

KWIK FILL CORPORATION
By:	/s/ Myron L. Turfitt
	Myron L. Turfitt Executive Vice President

POWER OF ATTORNEY

Each person whose signature appears below constitutes and appoints Myron L. Turfitt and James E. Murphy, or any of them acting singly, as his lawful attorney-in-fact and agent with full power of substitution and resubstitution for him and in his name, place and stead in any and all capacities to execute in the name of each such person who is then an officer or director of the registrant any and all amendments (including post-effective amendments) to this registration statement and to file the same with all exhibits thereto and other documents in connection therewith with the Securities and Exchange Commission, granting unto said attorney-in-fact and agent full power and authority to do and perform each and every act and thing required or necessary to be done in and about the premises as fully as he might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agent, or his substitute or substitutes, may lawfully do or cause to be done by virtue thereof. Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the dates indicated.

Signature	Title	Date
/s/ John A. Catsimatidis John A. Catsimatidis	Chairman of the Board, Chief Executive Officer, Director	December 16, 2004
/s/ Myron L. Turfitt Myron L. Turfitt	Executive Vice President	December 16, 2004
/s/ James E. Murphy James E. Murphy	Vice President, Chief Financial Officer (Principal Accounting Officer)	December 15, 2004

II-20

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereto duly authorized, in the City of Warren, State of Pennsylvania, on December 16, 2004.

INDEPENDENT GASOLINE & OIL COMPANY OF ROCHESTER, INC.
By:	/s/ Myron L. Turfitt
	Myron L. Turfitt Executive Vice President

POWER OF ATTORNEY

Each person whose signature appears below constitutes and appoints Myron L. Turfitt and James E. Murphy, or any of them acting singly, as his lawful attorney-in-fact and agent with full power of substitution and resubstitution for him and in his name, place and stead in any and all capacities to execute in the name of each such person who is then an officer or director of the registrant any and all amendments (including post-effective amendments) to this registration statement and to file the same with all exhibits thereto and other documents in connection therewith with the Securities and Exchange Commission, granting unto said attorney-in-fact and agent full power and authority to do and perform each and every act and thing required or necessary to be done in and about the premises as fully as he might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agent, or his substitute or substitutes, may lawfully do or cause to be done by virtue thereof. Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the dates indicated.

Signature	Title	Date
/s/ John A. Catsimatidis John A. Catsimatidis	Chairman of the Board, Chief Executive Officer, Director	December 16, 2004
/s/ Myron L. Turfitt Myron L. Turfitt	Executive Vice President	December 16, 2004
/s/ James E. Murphy James E. Murphy	Vice President, Chief Financial Officer (Principal Accounting Officer)	December 15, 2004

II-21

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereto duly authorized, in the City of Warren, State of Pennsylvania, on December 16, 2004.

BELL OIL CORP.
By:	/s/ Myron L. Turfitt
	Myron L. Turfitt Executive Vice President

POWER OF ATTORNEY

Each person whose signature appears below constitutes and appoints Myron L. Turfitt and James E. Murphy, or any of them acting singly, as his lawful attorney-in-fact and agent with full power of substitution and resubstitution for him and in his name, place and stead in any and all capacities to execute in the name of each such person who is then an officer or director of the registrant any and all amendments (including post-effective amendments) to this registration statement and to file the same with all exhibits thereto and other documents in connection therewith with the Securities and Exchange Commission, granting unto said attorney-in-fact and agent full power and authority to do and perform each and every act and thing required or necessary to be done in and about the premises as fully as he might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agent, or his substitute or substitutes, may lawfully do or cause to be done by virtue thereof. Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the dates indicated.

Signature	Title	Date
/s/ John A. Catsimatidis John A. Catsimatidis	Chairman of the Board, Chief Executive Officer, Director	December 16, 2004
/s/ Myron L. Turfitt Myron L. Turfitt	Executive Vice President	December 16, 2004
/s/ James E. Murphy James E. Murphy	Vice President, Chief Financial Officer (Principal Accounting Officer)	December 15, 2004

II-22

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereto duly authorized, in the City of Warren, State of Pennsylvania, on December 16, 2004.

PPC, INC.
By:	/s/ Myron L. Turfitt
	Myron L. Turfitt Executive Vice President

POWER OF ATTORNEY

Each person whose signature appears below constitutes and appoints Myron L. Turfitt and James E. Murphy, or any of them acting singly, as his lawful attorney-in-fact and agent with full power of substitution and resubstitution for him and in his name, place and stead in any and all capacities to execute in the name of each such person who is then an officer or director of the registrant any and all amendments (including post-effective amendments) to this registration statement and to file the same with all exhibits thereto and other documents in connection therewith with the Securities and Exchange Commission, granting unto said attorney-in-fact and agent full power and authority to do and perform each and every act and thing required or necessary to be done in and about the premises as fully as he might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agent, or his substitute or substitutes, may lawfully do or cause to be done by virtue thereof. Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the dates indicated.

Signature	Title	Date
/s/ John A. Catsimatidis John A. Catsimatidis	Chairman of the Board, Chief Executive Officer, Director	December 16, 2004
/s/ Myron L. Turfitt Myron L. Turfitt	Executive Vice President	December 16, 2004
/s/ James E. Murphy James E. Murphy	Vice President, Chief Financial Officer (Principal Accounting Officer)	December 15, 2004

II-23

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereto duly authorized, in the City of Warren, State of Pennsylvania, on December 16, 2004.

SUPER TEST PETROLEUM, INC.
By:	/s/ Myron L. Turfitt
	Myron L. Turfitt Executive Vice President

POWER OF ATTORNEY

Each person whose signature appears below constitutes and appoints Myron L. Turfitt and James E. Murphy, or any of them acting singly, as his lawful attorney-in-fact and agent with full power of substitution and resubstitution for him and in his name, place and stead in any and all capacities to execute in the name of each such person who is then an officer or director of the registrant any and all amendments (including post-effective amendments) to this registration statement and to file the same with all exhibits thereto and other documents in connection therewith with the Securities and Exchange Commission, granting unto said attorney-in-fact and agent full power and authority to do and perform each and every act and thing required or necessary to be done in and about the premises as fully as he might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agent, or his substitute or substitutes, may lawfully do or cause to be done by virtue thereof. Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the dates indicated.

Signature	Title	Date
/s/ John A. Catsimatidis John A. Catsimatidis	Chairman of the Board, Chief Executive Officer, Director	December 16, 2004
/s/ Myron L. Turfitt Myron L. Turfitt	Executive Vice President	December 16, 2004
/s/ James E. Murphy James E. Murphy	Vice President, Chief Financial Officer (Principal Accounting Officer)	December 15, 2004

II-24

EX-3.25

Exhibit 3.25

Commonwealth of Pennsylvania

Department of State

Office of the

Secretary of the Commonwealth

TO ALL TO WHOM THESE PRESENTS COME, GREETING:

WHEREAS, Under the provisions of the Business Corporation Law, approved the 5th day of May, Anno Domini, one thousand nine hundred and thirty-three, P. L., 364, as amended, the Department of State is authorized and required to issue a

CERTIFICATE OF INCORPORATION

evidencing the incorporation of a business corporation organized under the terms of that law.

AND WHEREAS, The stipulations and conditions of that law have been fully complied with by the persons desiring to incorporate as

COUNTRY FAIR, INC.

THEREFORE, KNOW YE, That subject to the Constitution of this Commonwealth and under the authority of the Business Corporation Law, I do by these presents, which I have caused to be sealed with the Great Seal of the Commonwealth, create, erect, and incorporate the incorporators of and the subscribers to the shares of the proposed corporation named above, their associates and successors, and also those who may thereafter become subscribers or holders of the shares of such corporation, into a body politic and corporate in deed and in law by the name chosen and hereinbefore specified, which shall exist perpetually and shall be invested with and have and enjoy all the powers, privileges, and franchises incident to a business corporation and be subject to all the duties, requirements, and restrictions specified and enjoined in and by the Business Corporation Law and all other applicable laws of this Commonwealth.

GIVEN under my Hand and the Great Seal of the Commonwealth, at the City of Harrisburg, this 1st day of February in the year of our Lord one thousand nine hundred and sixty-five and of the Commonwealth the one hundred and eighty-ninth

GEORGE I. BLOOM

Secretary of the Commonwealth

EX-3.26

Exhibit 3.26

CONSTITUTION AND BY-LAWS

OF

COUNTRY FAIR, INC.

Incorporated 1965

Article I

Stockholders’ Meetings

Section 1:

All meetings of the stockholders shall be held at the principal office of the Corporation, or at such other place as may be designated from time to time by the Board of Directors, or by a majority in interest of the Stockholders.

Section 2:

The annual meeting of the Stockholders shall be held the first Monday in January, or in the event said day may be a legal holiday, upon the following day at 2:00 P. M.

Section 3:

At the said annual meeting of the stockholders, there shall be held an election of Directors to serve for the ensuing year, or until their successors be elected chosen or qualify, and such other business as may come before the meeting including a financial report by the Treasurer.

Section 4:

Special meetings of the stockholders may be called by the President, or by the Board of Directors, or by the holders of not less than one-third (1/3) of the issued and outstanding capital stock of the Corporation.

Section 5:

Stockholders shall be required to receive at least ten (10) days written notice of the time and place of all stockholders’ meetings, with said notice to be send to the last registered address of the stockholder, as to all stockholders entitled to vote, and further subject to all of the Acts of Assembly of the Commonwealth of Pennsylvania, providing for the same.

Said notices shall contain the statement of whether the said meeting is a regular or special meeting, and in the case of special meetings, shall further state briefly the specific business to come before the meeting, and only such business as so outlined shall be considered, unless by and with the consent of holders of two-thirds (2/3) of the entire capital stock of the

Corporation. Provided further, a special meeting may be held by and with consent of all of the stockholders, by waiver of notice thereof duly executed by all of said stockholders.

Section 6:

At all stockholders’ meetings, any stockholder may attend either in person, or be represented by proxy, with all of the said proxies to be executed in writing to conform with the laws of the Commonwealth of Pennsylvania. In any election, each holder of common stock shall be entitled to one (1) vote for every share of stock held.

Section 7:

The holders of the majority of the issued stock and outstanding shall constitute a quorum for the transaction of all business at any regular or special meeting of the stockholders; but the holders of a lesser number, appearing at the time and place for which such meeting was called, may adjourn from time to time, and day to day, or sine die.

Section 8:

All elections shall be by ballot, unless by unanimous consent of all stockholders present that the vote may be viva voce.

Article II

Board of Directors

Section 1:

The Board of Directors shall consist of five (5) members, who shall serve for a period of one (1) year, or until their successors are duly elected, appointed, and/or qualify, and shall be elected at the annual meeting of the stockholders.

The Board of Directors may accept resignations of individual directors, and the remaining directors shall have the power to fill any vacancy at any time occurring because of death, resignation, or otherwise, and who shall serve until the next annual meeting of the stockholders, or until their successor is elected and qualifies.

Section 2:

The first regular meeting of the Board of Directors shall be held each year, immediately upon the adjournment of the annual stockholders’ meeting.

Regular meetings of the Board of Directors shall be held upon the first Wednesday of June and December, at such time and place as may be fixed by the Board Chairman.

Special meetings of the Board of Directors may be called at any time by the Chairman of the Board, at any reasonable time or place, with due notice of such meetings to be given as in the case of all other special meetings.

Notice of all such meetings, Regular and Special, shall be given to each Director personally, or by depositing the same in the mail in order that each may secure Five (5) days notice thereof. And provided further, such meeting or meetings may be held by unanimous consent of all Board member, or by their presence at the meeting.

Section 3:

A majority of the Board of Directors shall constitute a quorum for the transaction of business, and a majority of those present may determine all questions coming before the meeting.

Section 4:

The Board of Directors shall be responsible for the determination of the policies of the Corporation, and shall fix the compensation of the officers and agents and employees of the Corporation.

Article III

Officers

Section 1:

At the first regular meeting of the Board of Directors, they shall elect a President, who shall also act as Chairman of the Board, a Vice-President, a Secretary, and a Treasurer, to serve for the following year, and/or until their successors are elected and qualify. The office of secretary and treasurer may be jointly held by One (1) person.

Section 2:

The Chairman of the Board shall preside at all meetings of the Board of Directors.

Section 3:

The President shall preside at all stockholders’ meetings and shall be the chief officer of the Corporation, and shall direct the general policies of the Corporation, and shall have and exercise such powers and duties as in corporate management usually devolve upon the President, subject nevertheless at all times to the control of the Board of Directors.

Section 4:

The Vice-President shall exercise all of the duties and powers of the President during his absence or disability.

Section 5:

The Secretary shall keep true and faithful records of all of the meetings of the Corporation, and Board of Directors, and such other matters delegated to him.

He shall notify the Stockholders, and the members of the Board of Directors of all meetings called, and perform such other usual customary duties incidental to the office of secretary in bodies corporate, including the custody of corporate records, minutes, letters, seal, etc., in the office of the Corporation.

He shall execute all stock certificates, bond, mortgages, and all other documents and papers to which his signature may become necessary, and shall affix the seal of the Corporation as required.

The Treasurer shall have charge of and be responsible for the collection, receipt, custody, and disbursement of the funds of the Corporation, provided however, the Board in its discretion may require that 11 funds and disbursements be into and from a fund requiring the joint signature of the Treasurer, and other officer, or designated individual. Subject nevertheless, to such, he shall execute all checks, drafts, or other commercial paper for the payment of money by the Corporation for approved purposes in the usual course of business, and shall have such other powers and duties as may be prescribed for him by the Board of Directors.

He further may be required to be bonded for the faithful performance of such duties with such sureties as may be determined by the Board of Directors.

He shall make a true and faithful report of the financial condition of the Corporation at the annual meeting of the stockholders, at the annual meeting of the Board of Directors, and at such other meetings as may be requested.

All funds of the Corporation shall be deposited to the credit thereof in such monetary institution or institutions as may be determined from time to time by the Board of Directors, and all checks, drafts, or orders on said funds must be executed by the Treasurer, and such other office and/or individual as the Board of Directors may direct.

Article IV

Certificates of Stock

Section 1:

Each holder of fully paid stock shall be entitled to a certificate or certificates of stock stating the number of shares owned by each stockholder, and shall be signed at the time of the issuance thereof by the President and Secretary, as further authenticated by the seal of the Corporation.

Section 2:

Shares of stock shall be transferable only on the books of the Corporation in person or by Attorney, upon surrender of the Certificate properly endorsed, provided further, the shares represented by the Certificate, are further subject to the By-laws of the Corporation and to any and all agreements between the Shareholders of the Corporation. In addition thereto, the shares represented by the certificate shall not be sold, transferred, assigned, pledged, or hypothecated, except by and with the consent of all the Shareholders of the Corporation. If an outstanding certificate or certificates shall be lost, stolen, or destroyed, the holder thereof may have a new certificate upon producing satisfactory evidence of the same to the Board of Directors, and the furnishing of such bond of indemnity of such sufficiency as the Board may require.

Article V

Miscellaneous

Section 1:

No officer, agent, or employee of the Corporation shall have the right or power to obligate the Corporation, in any manner or for any purpose, other than such purpose or purposes as may be required in the usual conducting and operation of its business, unless specifically authorized by the Board of Directors, in writing.

No debts or obligations shall be contracted for except for current operation expenses and operations of the business, unless specifically authorized by the Board of Directors in writing, by any officer, agent, or employee.

No bonds, mortgages, notes, commercial paper, or instruments having for its purpose of the binding of the Corporation in the future in and for the behalf of the Corporation shall be valid, unless authorized by the Board of Directors, and executed by both the President or the Vice-President, and counter-signed by the Secretary or Treasurer.

Section 2:

The fiscal year of the Corporation shall be at the close of business at the end of December of each year.

Section 3:

Dividends shall be declared and paid out or surplus only, to such stockholders of record as of the time of said declaration by the Board of Directors, but the declaration thereof, if any, from time to time shall be to such extent, and paid in such fashion as the Board of Directors in its discretion may deem advisable for the best interests of the Corporation.

Section 4:

The Corporate seal shall consist of two circles, and upon which shall be imprinted the name of the Corporation, Country Fair, Inc., the Commonwealth in which it was incorporated, and its date of incorporation, 1965, the impression of which is attached thereto.

Corporate Seal - - -

Article VI

Amendments

Section 1:

Amendments to this Constitution and By-Laws may be made at any regular or special meeting of the stockholders, by a majority vote of the entire outstanding stock of the Corporation, provided, however, no amendment shall be made unless there is given Fifteen (15) days written notice to the registered address of the stockholders stating the general nature of the proposed amendment thereto.

Section 2:

The Board of Directors may adopt additional By-Laws in harmony with the ones expressed herewith, but shall not alter and shall not repeal the By-Laws expressed herein and as adopted by the stockholders.

I do hereby certify the above to be the Constitution and By-Laws of the Country Fair, Inc. Corporation.

Secretary

As approved and adopted at a meeting on April 5, 1965 called for said purpose,

EX-12

Exhibit 12

COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES

(in thousands, except ratios)

	Fiscal Year Ended August 31,
	2000		2001		2002		2003		2004
FIXED CHARGES
Interest expensed and capitalized	$	22,962	$	21,051	$	20,064	$	21,376	$	21,445
Amortized premiums related to indebtedness		683		923		818		928		902
Estimate of interest within rental expense		349		338		3,252		4,422		4,333
TOTAL FIXED CHARGES	$	23,994	$	22,312	$	24,134	$	26,726	$	26,680
EARNINGS
ADD
Pretax income (loss) from continuing operations before minority interests in consolidated subsidiaries or income (loss) from equity investees	$	13,513	$	29,300	$	(40,537)	$	(8,641)	$	18,795
Fixed charges		23,994		22,312		24,134		26,726		26,680
TOTAL ADJUSTED EARNINGS	$	37,507	$	51,612	$	(16,403)	$	18,085	$	45,475
RATIO OF ADJUSTED EARNINGS TO FIXED CHARGES		1.56x		2.31x		—		—		1.70x
DEFICIENCY OF EARNINGS TO FIXED CHARGES		—		—	$	(40,537)	$	(8,641)		—

EX-13.1

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE FISCAL YEAR ENDED AUGUST 31, 2004

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from              to             

Commission File No. 333-35083

UNITED REFINING COMPANY

(Exact name of registrant as specified in its charter)

Pennsylvania	25-1411751
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

See Table of Additional Subsidiary Guarantor Registrants

15 Bradley Street, Warren, PA	16365-3299
(Address of principal executive offices)	(Zip Code)

(814) 723-1500

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12 (b) of the Act:

None

Securities registered pursuant to Section 12 (g) of the Act:

None

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13, or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.     Yes  x    No  ¨

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of the registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.  x

Indicate by check mark whether the registrant is an accelerated filer (as defined in Exchange Act Rule 12-b – 2).    Yes  ¨    No  x

As of November 24, 2004, 100 shares of the Registrant’s common stock, $0.10 par value per share, were outstanding. All shares of common stock of the Registrant’s are held by an affiliate. Therefore, the aggregate market value of the voting and non-voting common equity held by non-affiliates of the Registrant is zero.

Documents Incorporated by Reference: None

TABLE OF ADDITIONAL REGISTRANTS

Name	State of Other Jurisdiction of Incorporation	IRS Employer Identification Number	Commission File Number
Kiantone Pipeline Corporation	New York	25-1211902	333-35083-01
Kiantone Pipeline Company	Pennsylvania	25-1416278	333-35083-03
United Refining Company of Pennsylvania	Pennsylvania	25-0850960	333-35083-02
United Jet Center, Inc.	Delaware	52-1623169	333-35083-06
Kwik-Fill Corporation	Pennsylvania	25-1525543	333-35083-05
Independent Gas and Oil Company of Rochester, Inc.	New York	06-1217388	333-35083-11
Bell Oil Corp.	Michigan	38-1884781	333-35083-07
PPC, Inc.	Ohio	31-0821706	333-35083-08
Super Test Petroleum Inc.	Michigan	38-1901439	333-35083-09
Kwik-Fil, Inc.	New York	25-1525615	333-35083-04
Vulcan Asphalt Refining Corporation	Delaware	23-2486891	333-35083-10

2

ITEM 1.    BUSINESS.

Introduction

We are the leading integrated refiner and marketer of petroleum products in our primary market area, which encompasses western New York and northwestern Pennsylvania. We own and operate a medium complexity 65,000 barrel per day (“bpd”) petroleum refinery in Warren, Pennsylvania where we produce a variety of products, including various grades of gasoline, diesel fuel, kerosene, No. 2 heating oil and asphalt. Operations are organized into two business segments: wholesale and retail. The wholesale segment is responsible for the acquisition of crude oil, petroleum refining, supplying petroleum products to the retail segment and the marketing of petroleum products to wholesale and industrial customers.

The retail segment sells petroleum products under the Kwik Fill^®, Citgo^® and Keystone^® brand names at a network of Company-operated retail units and convenience and grocery items through Company-owned gasoline stations and convenience stores under the Red Apple Food Mart^® and Country Fair^® brand names. As of August 31, 2004, we operated 372 units, of which, 185 units are owned, 127 units are leased, and the remaining stores are operated under a management agreement. Approximately 22% of the gasoline stations within this network are branded Citgo^® pursuant to a license agreement granting us the right to use Citgo’s applicable brand names, trademarks and other forms of Citgo’s identification. For the year ended August 31, 2004 (sometimes referred to as “fiscal 2004”), approximately 81% and 19% of our gasoline and distillate production, respectively, was sold through our retail network.

For the fiscal year ended August 31, 2004, we had total net sales of $1.5 billion, of which approximately 54% were derived from gasoline sales, approximately 34% were from sales of other petroleum products and 12% were from sales of merchandise and other revenue. Our capacity utilization rates have ranged from approximately 90% to approximately 100% over the last five years.

We believe that the location of our 65,000 bpd refinery in Warren, Pennsylvania provides us with a transportation cost advantage over our competitors, which is significant within an approximately 100-mile radius of our refinery. For example, in Buffalo, New York over our last five fiscal years, we have experienced approximately 1.82 cents per gallon transportation cost advantage over those competitors who are required to ship gasoline by pipeline and truck from New York Harbor sources to Buffalo. For the fiscal year ended August 31, 2004, our transportation cost advantage was approximately 1.95 cents per gallon. We own and operate the Kiantone Pipeline, a 78-mile long crude oil pipeline which connects the refinery to Canadian, U.S. and world crude oil sources through the Enbridge Pipelines Inc. and affiliates (collectively, “Enbridge”) pipeline system. Utilizing the storage capability of the pipeline, we are able to blend various grades of crude oil from different suppliers, allowing us to efficiently schedule production while managing feedstock mix and product yields in order to optimize profitability.

It is our view that the high construction costs and the stringent regulatory requirements inherent in petroleum refinery operations make it uneconomical for new competing refineries to be constructed in our primary market area. The nearest fuels refinery is over 160 miles from Warren, Pennsylvania and we believe that no significant production from such refinery is currently shipped into our primary market area.

Our primary market area is western New York and northwestern Pennsylvania and our core market area encompasses our Warren County base and the eight contiguous counties in New York and Pennsylvania. Our retail gasoline and merchandise sales are split approximately 59% / 41% between rural and urban markets. Margins on gasoline sales are traditionally higher in rural markets, while gasoline sales volume is greater in urban markets. Our urban markets include Buffalo, Rochester and Syracuse, New York and Erie, Pennsylvania.

As of August 31, 2004, 175 of our retail units were located in New York, 184 in Pennsylvania and 13 in Ohio. In fiscal year 2004, approximately 81% of the refinery’s gasoline production was sold through our retail network. In addition to gasoline, all units sell convenience merchandise, 103 are QSRs including franchise

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operations and seven of the units are full-service truck stops. Customers may pay for purchases with credit cards including our own Kwik Fill^® credit card. In addition to this credit card, we maintain a fleet credit card catering to regional truck and automobile fleets. Sales of convenience products, which tend to have constant margins throughout the year, have served to reduce the effects of the seasonality inherent in gasoline retail margins.

We intend to commence our delayed Coker and related infrastructure project in the first quarter of 2005, at which time we plan to raise the necessary financing and commence construction. We expect an approximate three-year construction and start-up period, with commercial operations commencing in the first quarter of 2008.

A delayed Coker converts the heaviest portion of crude oil that would otherwise produce asphalt or residual fuel oil into lighter material which can be blended into higher priced gasoline and distillate. This will allow us to take advantage of significant discounts for heavy grades of crude oil versus lighter grades by purchasing a higher percentage of these discounted heavy grades without uneconomically increasing our asphalt production or decreasing our gasoline and distillate production.

We anticipate that this project will be financed through a newly formed project company by way of a combination of senior tax-exempt debt, subordinated debt, and/or equity totaling approximately $400 million to $450 million. This project company will own the delayed Coker and related infrastructure and lease them to us on a fully net basis. The availability of future borrowings and access to the capital markets for equity financing for this project depends on prevailing market conditions and the acceptability of financing terms offered to us. There can be no assurance that future borrowings or equity financing will be available to us, or available on acceptable terms, in amounts sufficient to fund the needs of the delayed Coker and related infrastructure project.

In connection with this project, we are currently negotiating with Canadian crude oil suppliers to provide a long-term crude oil supply agreement, contribute equity or subordinated debt, and provide a floor on the differential between light and heavy crude oil. We expect this project to position us to be able to process a heavier sour crude slate and thereby maximize the benefit of a favorable light/heavy crude differential.

On October 8, 2003, the Pennsylvania Department of Environmental Protection (“DEP”) issued air and water permits to us at our Warren, Pennsylvania Refinery authorizing the construction and operation of a delayed coker unit among other refinery upgrades. The Coker and other improvements, if financed and constructed, will allow the refinery to process a 100% heavy, sour crude slate, increase crude oil throughput to 70,000 bpd and will allow it to meet new low sulfur fuel requirements.

As used herein, the term “The Company” refers to United Refining Company together with its consolidated subsidiaries.

Recent Developments

The annual shut down of the refinery’s reformer unit was completed in November 2004 to regenerate the reformer catalyst. The reformer unit was shut down for 9 days from November 2 to November 11. We also decided to shut down the crude unit for minor maintenance during the period of the reformer unit shutdown, at which time crude oil throughput would have been otherwise restricted. The crude unit was shut down for 5 days from November 3 to November 8. The crude unit maintenance enables us to defer the crude units major turnaround from October 2005 to October 2006.

On August 6, 2004, we completed a private placement offering of $200,000,000 in Senior Notes due 2012 which bear an interest rate of 10.5%. The notes were issued at 98.671% of par to yield 10 ³/4% to maturity, resulting in a debt discount of $2,658,000, which will be amortized over the life of the notes using the interest method. The net proceeds of the offering of $191,600,000 were used to retire all of our outstanding 10 ³/4% Senior Unsecured Notes due 2007, Series B, pay accrued interest of $3,700,000 and a redemption premium related thereto and to pay a dividend of $5,000,000 to the Company’s stockholder. A loss of $6,770,000 on the early extinguishment of debt was recorded consisting of a redemption premium of $3,228,000, a write-off of

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deferred financing costs of $1,990,000 and additional interest paid of $1,552,000. Such notes are fully and unconditionally guaranteed on a senior unsecured basis by all of the Company’s subsidiaries (see Notes 9 and 17 to Consolidated Financial Statements, Item 8). The notes will be eligible for resale under Rule 144A of the Securities Act of 1933.

Industry Overview

We are a regional refiner and marketer located primarily in PADD I. As of January 1, 2004, there were 16 operable refineries operating in PADD I with a combined crude processing capacity of 1.7 million bpd, representing approximately 10% of U.S. refining capacity. Petroleum product consumption during calendar year 2003 in PADD I averaged 6.25 million bpd, representing approximately 31% of U.S. demand based on industry statistics reported by the EIA. According to the EIA, prime supplier sales volume of gasoline in the region grew by approximately 7.7% during the five-year period ending December 2003. Refined petroleum production in PADD I is insufficient to satisfy demand for such products in the region, making PADD I a net importer of such products.

We believe that domestic refining capacity utilization is close to maximum sustainable limits because of the existing high throughput coupled with a minimal change in refining capacity. We believe that high utilization rates coupled with little anticipated crude capacity expansion is likely to result in sustainable current operating margins in the refining industry over the long term.

Asphalt is a residual product of the crude oil refining process, which is used primarily for construction and maintenance of roads and highways and as a component of roofing shingles. Distribution of asphalt is localized, usually within a distance of 150 miles from a refinery or terminal, and demand is influenced by levels of federal, state, and local government funding for highway construction and maintenance and by levels of roofing construction activities. We believe that an ongoing need for highway maintenance and domestic economic growth will sustain asphalt demand.

Refining Operations

Our refinery is located on a 92-acre site in Warren, Pennsylvania. The refinery has a nominal capacity of 65,000 bpd of crude oil processing and averaged saleable production of approximately 65,200 bpd during fiscal 2004.

The West End of the refinery consisting of the FCC Unit, polymerization unit, alkylation unit and sulfur recovery unit-2 was shut down April 4, 2004 for a scheduled 26-day turnaround. The FCC had been on-stream for 41 months between turnarounds.

The major activity in addition to normal shutdown maintenance was the replacement of FCC regenerator cyclones and expansion joints which were original equipment having functioned for 23 years. Metallurgical testing during prior turnarounds enabled us to extend the useful life of this equipment beyond a normal life expectancy of 15 years. For more on the scheduled maintenance turnaround, see “Refining Operations—Refinery Turnarounds.”

We believe our geographic location in the product short PADD I is a significant marketing advantage. Our refinery is located in northwestern Pennsylvania and is geographically distant from the majority of PADD I refining capacity. The nearest fuels refinery is over 160 miles from Warren, Pennsylvania and we believe that no significant production from such refinery is currently shipped into our primary market area (see Note 16 to Consolidated Financial Statements, Item 8).

Products

We produce three primary petroleum products: gasoline, middle distillates, and asphalt. We presently produce two grades of unleaded gasoline, 87-octane regular and 93-octane premium. We also blend our 87 and

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93 octane gasoline to produce a mid-grade 89-octane. In fiscal year 2004, approximately 81% of our gasoline production was sold through our retail network and the remaining 19% of such production was sold to wholesale customers.

Middle distillates include kerosene, diesel fuel, and heating oil (No. 2 oil). For the fiscal year ended August 31, 2004, approximately 81% of our distillate production was sold to wholesale customers and the remaining 19% through our retail network.

We optimize our bottom of the barrel processing by producing asphalt, a higher value alternative to residual fuel oil. Asphalt production as a percentage of all refinery production has exceeded 22% over the last five fiscal years due to our ability and decision to process a larger amount of less costly heavy higher sulfur content crude oil in order to realize higher overall refining margins.

Refining Process

Our production of petroleum products from crude oil involves many complex steps, which are briefly summarized below.

We seek to maximize refinery profitability by selecting crude oil and other feedstocks taking into account factors including product demand and pricing in our market areas as well as price, quality and availability of various grades of crude oil. We also consider product inventory levels and any planned turnarounds of refinery units for maintenance. The combination of these factors is optimized by a sophisticated proprietary linear programming computer model, which selects the most profitable feedstock and product mix. The linear programming model is continuously updated and improved to reflect changes in the product market place and in the refinery’s processing capability.

Blended crude is stored in a tank farm near the refinery, which has a capacity of approximately 200,000 barrels. The blended crude is then brought into the refinery where it is first distilled at low pressure into its component streams in the crude and preflash unit. This yields the following intermediate products: light products consisting of fuel gas components (methane and ethane) and LPG (propane and butane), naphtha or gasoline, kerosene, diesel or heating oil, heavy atmospheric distillate, and crude tower bottoms which are further distilled under vacuum conditions to yield light and heavy vacuum distillates and asphalt. The present capacity of the crude unit is 65,000 bpd.

The intermediate products are then processed in downstream units that are blended to produce finished products. A naphtha hydrotreater treats naphtha with hydrogen across a fixed bed catalyst to remove sulfur before further treatment. The treated naphtha is then distilled into light and heavy naphtha at a prefractionator. Light naphtha is then sent to an isomerization unit and heavy naphtha is sent to a reformer in each case for octane enhancement. The isomerization unit converts the light naphtha catalytically into a gasoline component with 83 octane. The reformer unit converts the heavy naphtha into another gasoline component with up to 94 octane depending upon the desired octane requirement for the grade of gasoline to be produced. The reformer also produces as a co-product all the hydrogen needed to operate hydrotreating units in the refinery.

Raw kerosene or heating oil is treated with hydrogen at a distillate hydrotreater to remove sulfur and make finished kerosene and No. 2 fuel oil. A distillate hydrotreater built in 1993 also treats raw distillates to produce low sulfur diesel fuel.

The long molecular chains of the heavy atmospheric and vacuum distillates are broken or “cracked” in the fluid catalytic cracking (FCC) unit and separated and recovered in the gas concentration unit to produce fuel gas, propylene, butylene, LPG, gasoline, light cycle oil and clarified oil. Fuel gas is burned within the refinery, propylene is fed to a polymerization unit which polymerizes its molecules into a larger chain to produce an 87 octane gasoline component, butylene is fed into an alkylation unit to produce a gasoline component and LPG is

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treated to remove trace quantities of water and then sold. Clarified oil is burned in the refinery or sold. Various refinery gasoline components are blended together in refinery tankage to produce 87 octane and 93 octane finished gasoline. Likewise, light cycle oil is blended with other distillates to produce low sulfur diesel and No. 2 fuel oil. A portion of the FCC gasoline is hydrotreated in order to meet new more stringent legally mandated limits on gasoline sulfur content which took effect January 1, 2004.

Our refining configuration allows the processing of a wide variety of crude oil inputs. During the past five years our inputs have been of Canadian origin and range from light low sulfur (38 degrees API, 0.5% sulfur) to high sulfur heavy asphaltic (21 degrees API, 3.5% sulfur). Our ability to market asphalt on a year round basis enables us to purchase selected heavier crude oils at higher differentials and thus at a lower cost.

Supply of Crude Oil

Even though our crude supply is currently nearly all Canadian, it is not dependent on this source alone. Within 90 days, we could shift up to 80% of our crude oil requirements to some combination of domestic and offshore crude. With additional time, 100% of our crude requirements could be obtained from non-Canadian sources. 86% of our contracts with our crude suppliers are on a month-to-month evergreen basis, with 60-to-90 day cancellation provisions; 14% of our crude contracts are on an annual basis (with month to month pricing provisions). As of August 31, 2004, we had supply contracts with approximately 30 different suppliers for an aggregate of 58,000 bpd of crude oil. We have contracts with four vendors amounting to 69% of daily crude oil supply (none more than 16,000 barrels per day). None of the remaining suppliers accounted for more than 10% of our crude oil supply.

We access crude through the Kiantone Pipeline, which connects with the Enbridge pipeline system in West Seneca, New York, which is near Buffalo. The Enbridge pipeline system provides access to most North American and foreign crude oils through three primary routes: (i) Canadian crude oils are transported eastward from Alberta and other points in Canada; (ii) various mid-continent crude oils from Texas, Oklahoma and Kansas are transported northeast along the Ozark, Woodpat and Chicap Pipelines (foreign crude oils shipped on the Seaway system can also access this route), which connects to the Enbridge pipeline system at Mokena, Illinois; and (iii) foreign crude oils unloaded at the Louisiana Offshore Oil Port are transported north via the Capline and Chicap pipelines which connect to the Enbridge pipeline system at Mokena, Illinois.

The Kiantone Pipeline, a 78-mile Company-owned and operated pipeline, connects our West Seneca, New York terminal at the pipeline’s northern terminus to the refinery’s tank farm at its southern terminus. We completed construction of the Kiantone Pipeline in 1971 and have operated it continuously since then. We are the sole shipper on the Kiantone Pipeline, and can currently transport up to 70,000 bpd along the pipeline. Our right to maintain the pipeline is derived from approximately 265 separate easements, right-of-way agreements, licenses, permits, leases and similar agreements.

The pipeline operation is monitored by a computer at the refinery. Shipments of crude arriving at the West Seneca terminal are separated and stored in one of the terminal’s three storage tanks, which have an aggregate storage capacity of 485,000 barrels. The refinery tank farm has two additional crude storage tanks with a total capacity of 200,000 barrels. An additional 35,000 barrels of crude can be stored at the refinery.

Refinery Turnarounds

Turnaround cycles vary for different refinery units. A planned turnaround of each of the two major refinery units (the crude unit and the fluid catalytic cracking unit) is conducted approximately every three to five years, during which time such units are shut down for internal inspection and repair. The most recent turnarounds occurred in October and November 2002 at our crude unit and its related processing equipment and in April 2004, at our FCC unit and its related processing equipment. A turnaround, which generally takes two to four weeks to complete in the case of the two major refinery units, consists of a series of moderate to extensive

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maintenance exercises. Turnarounds are planned and accomplished in a manner that allows for reduced production during maintenance instead of a complete plant shutdown. We defer the cost of turnarounds when incurred and amortized on a straight-line basis over the period of benefit, which ranges from 3 to 10 years. Thus, we charge costs to production over the period most clearly benefited by the turnarounds.

The scheduled maintenance turnarounds during late October and early November 2002 and during April 2004 resulted in an inventory build-up (starting in August 2002 and February 2004, respectively) of petroleum products to meet minimum sales demand during the maintenance shutdown periods.

Marketing and Distribution

General

We have a long history of service within our market area. Our first retail service station was established in 1927 near the Warren refinery, and we have steadily expanded our distribution network over the years.

We maintain an approximate 59% / 41% split between sales at our rural and urban units. We believe this to be advantageous, balancing the higher gross margins and lower volumes often achievable due to decreased competition in rural areas with higher volumes and lower gross margins in urban areas. We believe that our network of rural convenience store units provide an important alternative to traditional grocery store formats. In fiscal year 2004, approximately 81% and 19% of our gasoline and distillate production, respectively, was sold through this retail network.

We also have a 50% interest in a joint venture with an unrelated entity for the marketing of asphalt products. This joint venture is accounted for using the equity method of accounting.

Retail Operations

As of August 31, 2004, we operated a retail-marketing network (including those stores operated under a management agreement) that includes 372 retail units, of which 175 are located in western New York, 184 in northwestern Pennsylvania and 13 in eastern Ohio. We own 185 of these units. The retail segment sells petroleum products under the Kwik Fill^®, Citgo^® and Keystone^® brand names and grocery items under the Red Apple Food Mart^® and Country Fair^® brand names. We believe that Red Apple Food Mart^®, Kwik Fill^®, Country Fair^®, Keystone^® and Citgo^® are well-recognized names in our marketing areas. Approximately 22% of the gasoline stations within this network are branded Citgo^® pursuant to a license agreement granting us the right to use Citgo’s applicable brand names, trademarks and other forms of Citgo’s identification. We believe that the operation of our retail units provides us with a significant advantage over competitors that operate wholly or partly through dealer arrangements because we have greater control over pricing and operating expenses.

We classify our retail stores into four categories: convenience stores, limited gasoline stations, truck stop facilities, and other stores. Convenience stores sell a wide variety of foods, snacks, cigarettes, and beverages and also provide self-service gasoline. One hundred and three of our 372 retail outlets include QSRs where food is prepared on the premises for retail sales and also distribution to our other nearby units which do not have in-store delicatessens. Limited gasoline stations sell gasoline, cigarettes, oil and related car care products and provide full service for gasoline customers. Truckstop facilities sell gasoline and diesel fuel on a self-service and full-service basis. All truckstops include either a full or mini convenience store.

Total merchandise sales for fiscal year 2004 were $180.7 million, with a gross profit of approximately $51.7 million. Gross margins on the sale of convenience merchandise averaged 28.6% for fiscal 2004 and have been between 25% and 28.6% for the last five years, (see Note 16 to Consolidated Financial Statements, Item 8). In our experience, these sales are essentially unaffected by variations in crude oil and petroleum products prices.

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Merchandise Supply

Our primary merchandise vendor is Tripifoods, which is located in Buffalo, New York. During fiscal year 2004, we purchased approximately 87% of our convenience merchandise from this vendor. Tripifoods supplies us with tobacco products, candy, deli foods, grocery, health and beauty products, and sundry items on a cost plus basis for resale. We also purchase coffee, dairy products, beer, soda, snacks, and novelty goods from direct store vendors for resale. We annually review our suppliers’ costs and services versus those of alternate suppliers. We believe that alternative sources of merchandise supply at competitive prices are readily available.

Location Performance Tracking

We maintain a store tracking mechanism to collect operating data including sales and inventory levels for our retail network. Data transmissions are made using personal computers, which are available at each location. Once verified, the data interfaces with a variety of retail accounting systems, which support daily, weekly, and monthly performance reports. These different reports are then provided to both the field management and administrative personnel. Upon completion of a capital project, management tracks “before and after” performance, to evaluate the return on investment which has resulted from the improvements.

Wholesale Marketing and Distribution

We sold in fiscal year 2004, on a wholesale basis, approximately 48,200 bpd of gasoline, distillate and asphalt products to distributor, commercial, and government accounts. In addition, we sell approximately 1,000 bpd of propane to liquefied petroleum gas marketers. In fiscal year 2004, our production of gasoline, distillate, and asphalt sold at wholesale was 19%, 81%, and 100%, respectively. We sell approximately 98% of our wholesale gasoline and distillate products from our refinery in Warren, PA, and our Company-owned and operated product terminals. The remaining 2% are sold through third-party exchange terminals.

Our wholesale gasoline customer base includes 54 branded dealer/distributor units operating under our proprietary “Keystone^®” (including one Company-operated location) and “Kwik Fill^®” brand names. Long-term dealer/distributor contracts accounted for approximately 19% of our wholesale gasoline sales in fiscal 2004. Supply contracts generally range from three to five years in length, with branded prices based on our prevailing wholesale rack price in Warren.

We believe that the location of our refinery provides us with a transportation cost advantage over our competitors, which is significant within an approximately 100-mile radius of our refinery. For example, in Buffalo, New York over our last five fiscal years, we have experienced an approximately 1.82 cents per gallon transportation cost advantage over those competitors who are required to ship gasoline by pipeline and truck from New York Harbor sources to Buffalo. For the fiscal year ended August 31, 2004, our transportation cost advantage was approximately 1.95 cents per gallon. In addition to this transportation cost advantage, our proximity to local accounts allows it a greater range of shipment options, including the ability to deliver truckload quantities of approximately 210 barrels versus much larger 10,000 barrel pipeline batch deliveries, and faster response time, which we believe helps us provide enhanced service to our customers.

Our ability to market asphalt is critical to the performance of our refinery, since such marketing ability enables us to process lower cost higher sulfur content crude oils which in turn affords us higher refining margins. Sales of paving asphalt generally occur during the summer months (May 31 to October 31) due primarily to weather conditions. In order to maximize our asphalt sales, we have made substantial investments to increase our asphalt storage capacity through the installation of additional tanks, as well as through the purchase or lease of outside terminals. Partially mitigating the seasonality of the asphalt paving business is our ability to sell asphalt year-round to roofing shingle manufacturers. In fiscal year 2004, we sold 7.7 million barrels of asphalt while producing 6.4 million barrels. This difference is primarily attributed to us purchasing product for resale.

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We have a significant share of the asphalt market in the cities of Pittsburgh, Pennsylvania and Rochester and Buffalo, New York. We distribute asphalt from the refinery by railcar and truck transport to our owned and leased asphalt terminals in such cities or their suburbs. Asphalt can be purchased in the Gulf Coast area and delivered by barge to third party or Company-owned terminals near Pittsburgh.

We also have a 50% interest in a joint venture with an entity for the marketing of asphalt products. This joint venture is accounted for using the equity method of accounting.

We use a network of six terminals to store and distribute refined products. This network provides gasoline, distillate, and asphalt storage capacities of approximately 505,000, 770,000 and 1,750,000 barrels, respectively, as of August 31, 2004.

During fiscal 2004, approximately 93% of our refined products were transported from the refinery via truck transports, with the remaining 7% transported by rail. The majority of our wholesale and retail gasoline distribution is handled by common carrier trucking companies at competitive costs. We also operate a fleet of ten tank trucks that supply approximately 25% of our Kwik Fill^® retail stations.

Product distribution costs to both retail and wholesale accounts are minimized through product exchanges. Through these exchanges, we have access to product supplies at approximately 31 sources located throughout our retail marketing area. We seek to minimize retail distribution costs through the use of a system wide distribution model.

Environmental Considerations

General

We are subject to extensive federal, state and local laws and regulations relating to pollution and protection of the environment such as those governing releases of certain materials into the environment and the storage, treatment, transportation, disposal and clean-up of wastes, including, but not limited to, the Federal Clean Water Act as amended, the Clean Air Act as amended (“CAA”), the Resource Conservation and Recovery Act of 1976 as amended, the Comprehensive Environmental Response Compensation and Liability Act of 1980 as amended (“CERCLA”), and analogous state and local laws and regulations. As with the industry in general, compliance with existing and anticipated environmental laws and regulations increases the overall cost of business, including capital costs to construct, maintain and upgrade equipment and facilities.

The Clean Air Act Amendments of 1990

In 1990, the CAA was amended to greatly expand the role of the government in controlling product quality and air emissions. The legislation included provisions that have significantly impacted the manufacture of both gasoline and diesel fuel including the requirement for significantly lower sulfur content. In regards to emissions, the government has required increasingly stringent emission controls on process equipment. For example, we will need to comply with the second phase of regulations effective April 2005, establishing Maximum Achievable Control Technologies for petroleum refineries. These regulations, which became effective in April 2002, may require additional emission controls on certain refinery units.

Gasoline and Diesel Fuel Sulfur Content

In February 2000, the United States Environmental Protection Agency (“USEPA”) issued a final rule requiring a phased reduction of the sulfur content in gasoline to ultimately achieve 30 Parts Per Million (“PPM”). Many refiners had to make this reduction beginning in January 2004, but some smaller refiners and those in certain Western states will be allowed to phase down sulfur more slowly, reaching the 30 PPM level as late as January 2008. Although we are of comparable size to some of the small refiners granted more time to comply, we

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were not classified as a small refiner for this purpose, nor are our operations located in any of the Western states given additional time. However, the rule allows individual refiners to seek additional time to comply on a case-by-case basis at the discretion of the USEPA. We applied for and were granted additional time to phase down the sulfur content of gasoline. USEPA granted this relief in the form of a three-phase compliance approach giving us until January 2008 to meet the 30 PPM sulfur limit. We made the initial required sulfur reduction on January 1, 2004 by modifying the refinery kerosene hydrotreater to allow it to hydrotreat gasoline as well as kerosene.

The USEPA promulgated another set of regulations under the CAA in January 2001 that limits allowable sulfur content in highway diesel fuel. By June 1, 2006, the sulfur content in highway diesel fuel must be reduced to 15 PPM. Furthermore, USEPA has proposed a comprehensive national program to reduce emissions from non-road diesel engines by forcing the eventual reduction of sulfur in non-road diesel to 15 PPM by 2010.

We anticipate that a material investment of funds will be required before 2008 to comply with the low sulfur fuel requirements for both gasoline and diesel. It is believed that compliance with the low sulfur gasoline and diesel fuel mandates will require an estimated expenditure of approximately $15 to $30 million in capital improvements.

Competition

Petroleum refining and marketing is highly competitive. Our major retail competitors include British Petroleum, Amerada Hess, Mobil, Sunoco, Sheetz, Delta Sonic, and Uni-Marts. With respect to wholesale gasoline and distillate sales, we compete with Sunoco, Inc., Mobil, and other major refiners. We primarily compete with PetroCanada and Marathon Ashland Petroleum in the asphalt market. Many of our principal competitors are integrated multinational oil companies that are substantially larger and better known than us. Because of their diversity, integration of operations, larger capitalization and greater resources, these major oil companies may be better able to withstand volatile market conditions, compete on the basis of price and more readily obtain crude oil in times of shortages.

The principal competitive factors affecting our refining operations are crude oil and other feedstock costs, refinery efficiency, refinery product mix and product distribution and transportation costs. Certain of our larger competitors have refineries, which are larger and more complex and, as a result, could have lower per barrel costs or higher margins per barrel of throughput. We have no crude oil reserves and are not engaged in exploration. We believe that we will be able to obtain adequate crude oil and other feedstocks at generally competitive prices for the foreseeable future.

The principal competitive factors affecting our retail marketing network are location of stores, product price and quality, appearance and cleanliness of stores and brand identification. Competition from large, integrated oil companies, as well as from convenience stores which sell motor fuel, is expected to continue. The principal competitive factors affecting our wholesale marketing business are quality and price of our products, reliability and availability of supply and location of distribution points.

Employees

As of August 31, 2004, we had approximately 4,173 employees; 1,961 full-time and 2,212 part-time employees. Approximately 3,536 persons were employed at our retail units, 397 persons at our refinery, Kiantone Pipeline and at terminals operated by us, with the remainder at our office in Warren, Pennsylvania. We have entered into collective bargaining agreements with International Union of Operating Engineers Local No. 95, United Steel Workers of America Local No. 2122-A, the International Union of Plant Guard Workers of America Local No. 502 and General Teamsters Local Union No. 397 covering 215, 9, 23 and 20 employees, respectively. The agreements expire on February 1, 2006, January 31, 2006, June 25, 2005 and July 31, 2005, respectively. We believe that our relationship with our employees is good.

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Intellectual Property

We own various federal and state service and trademarks used by us, including Kwik Fill^®, United^®, Country Fair^®, SuperKwik^®, Keystone^®, SubFare^® and PizzaFare^®. Our subsidiary, Country Fair, along with us, have licensing agreements with Citgo Petroleum Corporation (“Citgo”) for the right to use Citgo’s applicable brand names, trademarks and other forms of Citgo’s identification for petroleum products purchased under a distributor franchise agreement.

We have obtained the right to use the Red Apple Food Mart^® service mark to identify our retail units under a royalty-free, nonexclusive, nontransferable license from Red Apple Supermarkets, Inc., a corporation which is indirectly wholly owned by John A. Catsimatidis, the indirect sole stockholder, Chairman of the Board and Chief Executive Officer of the Company. The license is for an indefinite term. The licensor has the right to terminate this license in the event that we fail to maintain quality acceptable to the licensor. We license the right to use the Keystone^® trademark to approximately 54 independent distributors on a non-exclusive royalty-free basis.

We currently do not own any material patents. Management believes that it does not infringe upon the patent rights of others, nor does our lack of patent ownership impact our business in any material manner.

Governmental Approvals

We believe we have obtained all necessary governmental approvals, licenses, and permits to operate the refinery and convenience stores.

Financing

On August 6, 2004, we completed a private placement offering of $200,000,000 in Senior Notes due 2012 which bear an interest rate of 10.5%. The notes were issued at 98.671% of par to yield 10 ³/4% to maturity, resulting in a debt discount of $2,658,000, which will be amortized over the life of the notes using the interest method. The net proceeds of the offering of $191,600,000 were used to retire all of our outstanding 10 ³/4% Senior Unsecured Notes due 2007, Series B, pay accrued interest of $3,700,000 and a redemption premium related thereto and to pay a dividend of $5,000,000 to the Company’s stockholder. A loss of $6,770,000 on the early extinguishment of debt was recorded consisting of a redemption premium of $3,228,000, a write-off of deferred financing costs of $1,990,000 and additional interest paid of $1,552,000. Such notes are fully and unconditionally guaranteed on a senior unsecured basis by all of the Company’s subsidiaries (see Notes 9 and 17 to Consolidated Financial Statements, Item 8). The notes will be eligible for resale under Rule 144A of the Securities Act of 1933.

Effective January 27, 2004, the Company amended its secured credit facility to increase the maximum facility commitment from $50,000,000 to $75,000,000 on a permanent basis. The facility expires on May 9, 2007 and is secured by certain cash accounts, accounts receivable, and inventory. Until maturity, the Company may borrow on a borrowing base formula as set forth in the facility. For Base Rate borrowings, interest is calculated at the greater of the Agent Bank’s prime rate or federal fund rate plus 1%, plus an applicable margin of .25% to .75%, which was 5.00% at August 31, 2004. For Euro-Rate borrowings, interest is calculated at the LIBOR rate plus an applicable margin of 1.75% to 3.00%. The applicable margin varies with the Company’s facility leverage ratio calculation. As of August 31, 2004, $0 of Euro-Rate borrowings and $13,000,000 of Base Rate borrowings were outstanding under the agreement. The Company pays a commitment fee of 3/8% per annum on the unused balance of the facility.

We had outstanding letters of credit of $385,000 as of August 31, 2004.

As of August 31, 2004 the outstanding borrowings under the Revolving Credit Facility was $13,385,000 resulting in net availability of $61,615,000. The corresponding balance of cash and cash equivalents as of August 31, 2004 was $11,552,000.

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ITEM 2.    PROPERTIES.

We own a 92-acre site in Warren, Pennsylvania upon which we operate our refinery. The site also contains an office building housing our principal executive office.

We own various real property in the states of Pennsylvania, New York, Ohio, and Alabama as of August 31, 2004, upon which we operate 185 retail units and two crude oil and six refined product storage terminals. We also own the 78-mile long Kiantone Pipeline, a pipeline which connects our crude oil storage terminal to the refinery’s tank farm. Our right to maintain the pipeline is derived from approximately 265 separate easements, right-of-way agreements, leases, permits, and similar agreements. We also have easements, right-of-way agreements, leases, permits, and similar agreements that would enable us to build a second pipeline on property contiguous to the Kiantone Pipeline.

We also lease an aggregate of 127 sites in Pennsylvania, New York, and Ohio upon which we operate retail units. As of August 31, 2004, 66 of these leases had an average remaining term of 52 months, exclusive of option terms, and 61 leased Country Fair locations had terms from 10 to 20 years remaining.

ITEM 3.    LEGAL PROCEEDINGS.

The Company and its subsidiaries are from time to time parties to various legal proceedings that arise in the ordinary course of their respective business operations. These proceedings include various administrative actions relating to federal, state and local environmental laws and regulations as well as civil matters before various courts seeking money damages. The Company believes that if these legal proceedings in which it is currently involved were determined against the Company, there would be no Company’s operations or its consolidated financial condition. In the opinion of management, all such matters are adequately covered by insurance, or if not so covered, are without merit or are of such kind, or involve such amounts that an unfavorable disposition would not have a material adverse effect on the consolidated operations or financial position of the Company.

ITEM 4.    SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

NONE

ITEM 5.    MARKET FOR REGISTRANT’S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.

NONE

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ITEM 6.    SELECTED FINANCIAL DATA.

The following table sets forth certain historical financial and operating data (the “Selected Information”) as of the end of and for each of the years in the five-year period ended August 31, 2004. The selected income statement, balance sheet, financial and ratio data as of and for each of the five years ended August 31, 2004 has been derived from our audited consolidated financial statements. The operating information for all periods presented has been derived from our accounting and financial records. The Selected Information set forth below should be read in conjunction with, and is qualified by reference to, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Item 7 and our Consolidated Financial Statements and Notes thereto in Item 8 and other financial information included elsewhere herein.

	Year Ended August 31,
	2000			2001			2002			2003			2004
	(dollars in thousands)
Income Statement Data:
Net sales(2)	$	1,123,439		$	1,108,565		$	1,052,016		$	1,290,351		$	1,488,937
Gross margin(1)(2)		200,379			216,701			163,192			231,435			277,716
Refining operating expenses(3)		70,812			90,271			77,821			99,666			104,938
Selling, general and administrative expenses(4)		80,390			73,234			94,297			106,427			111,808
Operating income (loss)(2)		39,009			42,483			(20,700	)		13,123			48,517
Interest expense		22,962			21,051			20,064			21,376			21,445
Interest income		288			1,606			330			36			22
Other, net(2)		(2,822	)		1,836			(1,345	)		(1,291	)		(2,201	)
Costs associated with terminated acquisition		—			(1,300	)		—			—			—
Equity in net earnings of affiliate		—			516			1,242			867			672
Gain (loss) on early extinguishment of debt(5)		—			5,210			—			—			(6,770	)
Income (loss) before income tax expense (benefit)		13,513			29,300			(40,537	)		(8,641	)		18,795
Income tax expense (benefit)		6,828			12,021			(15,596	)		(3,370	)		7,400
Net Income (loss)		6,685			17,279			(24,941	)		(5,271	)		11,395
Balance Sheet Data (at end of period):
Total assets		340,368			355,557			371,440			361,428			366,382
Total debt		201,111			181,100			206,413			214,410			212,948
Total stockholder’s equity		55,106			75,966			48,196			41,975			47,106

(1) Gross margin is defined as gross profit plus refining operating expenses. Refinery operating expenses are expenses incurred in refining and included in costs of goods sold in our consolidated financial statements. Refining operating expense equals refining operating expenses per barrel, multiplied by the volume of total saleable products per day, multiplied by the number of days in the period.

(2) Certain amounts in the fiscal 2000 Consolidated Financial Statements have been reclassified to conform to the 2001 through 2004 presentation.

(3) Refinery operating expenses include refinery fuel produced and consumed in refinery operations.

(4) Fiscal 2002 includes eight months of Selling, general and administrative expenses for Country Fair^® operations and fiscal 2003 and 2004 include twelve months of Country Fair^® operations.

(5) In accordance with Statement of Financial Accounting Standards (“SFAS”) No. 145, “Rescission of Statements No. 4, 44 and 64, Amendment of FASB Statement No. 13, and Technical Corrections”, we have reclassified our gain on early extinguishment of debt in fiscal 2001.

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ITEM 7.    MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

Forward Looking Statements

This Annual Report on Form 10-K contains certain statements that constitute “forward looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These forward looking statements may include, among other things, United Refining Company and its subsidiaries current expectations with respect to future operating results, future performance of its refinery and retail operations, capital expenditures and other financial items. Words such as “expects”, “intends”, “plans”, “projects”, “believes”, “estimates”, “may”, “will”, “should”, “shall”, “anticipates”, “predicts”, and similar expressions typically identify such forward looking statements in this Annual Report on Form 10-K.

By their nature, all forward looking statements involve risk and uncertainties. All phases of the Company’s operations involve risks and uncertainties, many of which are outside of the Company’s control, and any one of which, or a combination of which, could materially affect the Company’s results of operations and whether the forward looking statements ultimately prove to be correct. Actual results may differ materially from those contemplated by the forward looking statements for a number of reasons.

Although we believe our expectations are based on reasonable assumptions within the bounds of its knowledge, investors and prospective investors are cautioned that such statements are only projections and that actual events or results may differ materially depending on a variety of factors described in greater detail in the Company’s filings with the SEC, including quarterly reports on Form 10-Q, annual reports on Form 10-K, reports on Form 8-K, etc. In addition to the factors discussed elsewhere in this Annual Report 10-K, the Company’s actual consolidated quarterly or annual operating results have been affected in the past, or could be affected in the future, by additional factors, including, without limitation:

• repayment of debt;

• general economic, business and market conditions;

• risks and uncertainties with respect to the actions of actual or potential competitive suppliers of refined petroleum products in our markets;

• the demand for and supply of crude oil and refined products;

• the spread between market prices for refined products and market prices for crude oil;

• the possibility of inefficiencies or shutdowns in refinery operations or pipelines;

• the availability and cost of financing to us;

• environmental, tax and tobacco legislation or regulation;

• volatility of gasoline prices, margins and supplies;

• merchandising margins;

• labor costs;

• level of capital expenditures;

• customer traffic;

• weather conditions;

• acts of terrorism and war;

• business strategies;

• expansion and growth of operations;

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• future projects and investments;

• future exposure to currency devaluations or exchange rate fluctuations;

• expected outcomes of legal and administrative proceedings and their expected effects on our financial position, results of operations and cash flows;

• future operating results and financial condition; and

• the effectiveness of our disclosure controls and procedures and internal control over financial reporting.

All subsequent written and oral forward looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by the foregoing. We undertake no obligation to update any information contained herein or to publicly release the results of any revisions to any such forward looking statements that may be made to reflect events or circumstances that occur, or which we becomes aware of, after the date of this Annual Report on Form 10-K.

Business Strategy and Overview

Our strategy is to strengthen our position as a leading producer and marketer of high quality refined petroleum products within our market area. We plan to accomplish this strategy through continued attention to optimizing our operations, resulting in the lowest possible crude and overhead costs, and continuing to improve and enhance our retail and wholesale positions. More specifically, we intend to:

• Maximize the favorable economic impact of our transportation cost advantage by increasing our retail and wholesale market shares within our market area.

• Optimize profitability by managing feedstock costs, product yields, and inventories through our refinery feedstock management program and our system-wide distribution model.

• Continue to investigate additional strategic acquisitions and capital improvements to our existing facilities.

• Construct a delayed Coker and related infrastructure to position us to process a heavier sour crude slate and thereby maximize the benefit of a favorable light/heavy crude differential.

Company Background

Critical Accounting Policies

The accompanying consolidated financial statements and supplementary information were prepared in accordance with accounting principles generally accepted in the United States of America. Significant accounting policies are discussed in Note 1 to the Consolidated Financial Statements, Item 8. Inherent in the application of many of these accounting policies is the need for management to make estimates and judgments in the determination of certain revenues, expenses, assets and liabilities. As such, materially different financial results can occur as circumstances change and additional information becomes known. The policies with the greatest potential effect on our results of operation and financial position include:

Revenue Recognition

Revenues from wholesale sales are recognized upon shipment or when title passes. Retail revenues are recognized immediately upon sale to the customer. Revenue derived from other sources including freight charges are recognized when the related product revenue is recognized.

Collectibility of Accounts Receivable

For accounts receivable we estimate the net collectibility considering both historical and anticipated trends relating to our customers and the possibility of non-collection due to their financial position. While such

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non-collections have been historically within our expectations and the allowances the Company has established, the Company cannot guarantee that it will continue to experience non-collection rates that it has experienced in the past. A significant change in the financial position of our customers could have a material impact on the quality of our accounts receivable and our future operating results.

Goodwill and Other Non-Amortizable Assets

In accordance with SFAS No. 141, “Business Combinations”, and No. 142, “Goodwill and Other Intangible Assets”, goodwill and intangible assets deemed to have indefinite lives are no longer amortized but are subject to annual impairment tests. We assess the impairment of goodwill and other indefinite-lived intangible assets annually.

The Company performed separate impairment tests on June 1, 2004 for its tradename and other intangible assets using discounted and undiscounted cash flow methods, respectively. The fair value of the tradename and other intangible assets exceeded their respective carrying values. The Company has noted no subsequent indication that would require testing the tradename and intangible assets for impairment.

There were no material changes in the gross carrying amounts of goodwill, tradename, or other intangible assets for the fiscal year ended August 31, 2004.

Long-Lived Assets

Whenever events or changes in circumstances indicate that the carrying value of any of these assets may not be recoverable, the Company will assess the recoverability of such assets based upon estimated undiscounted cash flow forecasts. When any such impairment exists, the related assets will be written down to fair value.

Value of Pension Assets

The Company maintains three noncontributory defined benefit retirement plans for substantially all its employees. The assets of the plans are invested through financial institutions that follow an investment policy drafted by the Company. The investment guidelines provide a percentage range for each class of assets to be managed by the financial institution. The historic performance of these asset classes supports the Company’s expected return on the assets. The asset classes are rebalanced periodically should they fall outside the range allocations.

The percentage of total asset allocation range is as follows:

Asset Class	Minimum		Maximum
Equity	55	%	75	%
Fixed Income	25	%	35	%
Cash or Cash Equivalents	0	%	10	%

The discount rate utilized in valuing the benefit obligations of the plans was derived from the rate of return on high quality bonds as of August 31, 2004. Similarly, the rate of compensation utilizes historic increases granted by the Company and the industry as well as future compensation policies. See Note 10 to Consolidated Financial Statements, Item 8.

Environmental Remediation and Litigation Reserve Estimations

Management also makes judgments and estimates in recording liabilities for environmental cleanup and litigation. Liabilities for environmental remediation are subject to change because of matters such as changes in laws, regulations and their interpretation; the effect of additional information on the extent and nature of site contamination; and improvements in technology. Likewise, actual litigation costs can vary from estimates based on the facts and circumstance and application of laws in individual cases.

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The above assessment of critical accounting policies is not meant to be an all-inclusive discussion of the uncertainties to financial results that occur from the application of the full range of the Company’s accounting policies. Materially different financial results could occur in the application of other accounting policies as well. Likewise, materially different results can occur upon the adoption of new accounting standards promulgated by the various rule-making bodies.

General

The Company is engaged in the refining and marketing of petroleum products. In fiscal 2004, approximately 81% and 19% of the Company’s gasoline and distillate production, respectively, was sold through the Company’s network of service stations and truck stops. The balances of the Company’s refined products were sold to wholesale customers. In addition to transportation and heating fuels, primarily gasoline and distillate, the Company is a major regional wholesale marketer of asphalt. The Company also sells convenience merchandise at convenience stores located at most of its service stations. The Company’s profitability is influenced by fluctuations in the market prices of crude oils and refined products. Although the Company’s product sales mix helps to reduce the impact of large short-term variations in crude oil price, net sales and costs of goods sold can fluctuate widely based upon fluctuations in crude oil prices. Specifically, the margins on wholesale gasoline and distillate tend to decline in periods of rapidly declining crude oil prices, while margins on asphalt, retail gasoline and distillate tend to improve. During periods of rapidly rising crude oil prices, margins on wholesale gasoline and distillate tend to improve, while margins on asphalt and retail gasoline and distillate tend to decline. Gross margins on the sale of convenience merchandise averaged 28.6% for fiscal 2004 and have been between 25% and 28.6% for the last five years and are essentially unaffected by variations in crude oil and petroleum products prices.

The Company includes in costs of goods sold operating expenses incurred in the refining process. Therefore, operating expenses reflect only selling, general and administrative expenses, including all expenses of the retail network, and depreciation and amortization.

Recent Developments

The Company’s results in fiscal 2004 were impacted by high and rising worldwide crude oil prices, as indicated by crude oil contracts traded on the New York Mercantile Exchange (NYMEX). Monthly average NYMEX crude prices increased $9.21/BBL from $31.60/BBL in September 2003, the first month of the fiscal year, to $40.81/BBL in August 2004, the final month of the fiscal year. For all of fiscal 2004, NYMEX crude oil prices averaged approximately $35/BBL, or 18% higher than the approximate $30/BBL average for fiscal 2003.

The first several months of fiscal 2005 have seen a continuation of the increases in worldwide crude oil prices, with prices for September and October 2004 NYMEX contracts averaging more than $45/BBL, while October trading in November NYMEX contacts closed higher than $50/BBL on several individual trading days.

Industry-wide margins on gasoline and distillate for fiscal 2004 versus fiscal 2003, as indicated by the difference between the prices of crude oil contracts traded on the NYMEX and the prices of NYMEX gasoline and heating oil contracts, increased 21% for gasoline and 13% for heating oil, as increases in gasoline and distillate prices more than kept pace with rising crude oil prices. This contributed to higher gross profit, operating income and net income for the Company.

We continue to benefit from our ability to process a significant percentage of heavy, high sulfur grades of crude oil. In fiscal 2004, the price spread between heavy high sulfur crude oils and light low sulfur crude oil was about 35.6% greater than fiscal 2003. This resulted in a decrease in our average crude cost relative to the NYMEX average crude cost of $1.48/barrel for fiscal 2004 versus fiscal 2003. The benefit of increased crude oil

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price discounts out weighed reduced margins on associated asphalt production, such that the net benefit of heavy crude processing increased significantly. This pattern has continued into the early months of fiscal 2005, with further increases in crude price discounts offsetting lower asphalt margins.

Results of Operations

The Company is a petroleum refiner and marketer in its primary market area of Western New York and Northwestern Pennsylvania. Operations are organized into two business segments: wholesale and retail.

The wholesale segment is responsible for the acquisition of crude oil, petroleum refining, supplying petroleum products to the retail segment and the marketing of petroleum products to wholesale and industrial customers. The retail segment sells petroleum products under the Kwik Fill^®, Citgo^® and Keystone^® brand names at a network of Company-operated retail units and convenience and grocery items through Company-owned gasoline stations and convenience stores under the, Red Apple Food Mart^® and Country Fair^® brand names.

A discussion and analysis of the factors contributing to the Company’s results of operations are presented below. The accompanying Consolidated Financial Statements and related Notes (see Item 8), together with the following information, are intended to supply investors with a reasonable basis for evaluating the Company’s operations, but should not serve as the only criteria for predicting the Company’s future performance.

Retail Operations:

	Fiscal Year Ended August 31,
	2004			2003			2002
	(dollars in thousands)
Net Sales
Petroleum	$	596,922		$	536,340		$	430,316
Merchandise and other		180,702			182,564			149,762
Total Net Sales	$	777,624		$	718,904		$	580,078
Costs of Goods Sold	$	674,022		$	614,552		$	494,493
Gross Profit	$	103,602		$	104,352		$	85,585
Operating Expenses	$	98,439		$	93,725		$	80,929
Segment Operating Income	$	5,163		$	10,627		$	4,656
Petroleum Sales (thousands of gallons)		343,526			351,711			328,699
Gross Profit
Petroleum(a)	$	51,952		$	53,062		$	43,181
Merchandise and other		51,650			51,290			42,404
	$	103,602		$	104,352		$	85,585
Petroleum margin ($/gallon)(b)		.1512			.1509			.1314
Merchandise margin (percent of sales)		28.6	%		28.1	%		28.3	%
Average number of stations (during period)
Owned and leased		312			312			310
Managed		60			60			60
		372			372			370

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(a) Includes the effect of intersegment purchases from our wholesale segment at prices, which approximate market.

(b) Company management calculates petroleum margin per gallon by dividing petroleum gross margin by petroleum sales volumes. Management uses fuel margin per gallon calculations to compare profitability to other companies in the industry. Petroleum margin per gallon may not be comparable to similarly titled measures used by other companies in the industry.

Net Sales

2004 vs. 2003

Retail sales increased during 2004 by $58.7 million, or 8.2% from $718.9 million to $777.6 million. The retail sales increase was a result of a $60.6 million increase in petroleum sales, offset by a reduction of $1.9 million in merchandise sales. The petroleum sales increase is due to a 13.9% increase in retail selling prices offset by a 2.3% decrease in retail petroleum volume. The merchandise sales decrease was attributable to reduced tobacco related sales.

2003 vs. 2002

Retail sales increased during 2003 by $138.8 million, or 23.9% from $580.1 million to $718.9 million. The retail sales increase was primarily due to a $32.8 million increase in merchandise sales and a $106.0 million increase in petroleum sales. The petroleum sales increase results from a 7% increase in retail petroleum volume (on a same store basis and including the Country Fair locations) and by a 16.5% increase in retail selling prices (on a same store basis and including the Country Fair locations).

On December 21, 2001 the Company acquired 100% of the operations and working capital assets of Country Fair. The fiscal year ended August 31, 2003 was positively impacted by the additional sales from Country Fair for the entire period versus the fiscal year ended August 31, 2002 in which Country Fair sales were only included from the acquisition date of December 21, 2001. See Note 5 to Consolidated Financial Statements, Item 8.

Costs of Goods Sold

2004 vs. 2003

Retail costs of goods sold increased during 2004 by $59.4 million or 9.7% from $614.6 million to $674.0 million. The cost of gasoline increased 25%, on a per gallon basis, over fiscal year 2003. The cost of distillates increased 14%, on a per gallon basis, over the prior fiscal year. These cost increases, offset by sales volume declines, resulted in an increased costs of goods sold for petroleum purchases of $61.5 million. Other material increases to costs of goods sold were increased freight costs of $.3 million and $.9 million for the year-end impact of valuing the Company’s inventories under the LIFO cost method. Reductions in retail costs of goods sold were $.6 million in fuel taxes, $2.2 million in merchandise purchases and $.5 million in other sundry costs.

2003 vs. 2002

Retail costs of goods sold increased during 2003 by $120.0 million or 24.3% from $494.5 million to $614.6 million. The fiscal year ended August 31, 2003 was impacted by the additional sales from Country Fair for the entire period versus the fiscal year ended August 31, 2002 in which Country Fair sales were only included from the acquisition date of December 21, 2001. The cost of gasoline increased 28%, on a per gallon basis, over fiscal year 2002. The cost of distillates increased 31%, on a per gallon basis, over the prior fiscal year. This combined with the additional sales volume resulted in an increased costs of goods sold for petroleum purchases of $82.1 million. Other material increases to costs of goods sold were increased fuel taxes of $11.8 million, increased

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freight costs of $.9 million and increased merchandise purchases of $23.9 million. Costs of goods sold was positively impacted by an approximate $.3 million increase in the value of the Company’s working inventories on a market valuation basis, which decreased costs of goods sold. For the fiscal year 2002, costs of goods was positively impacted by an approximately $.3 million increase in the value of the Company’s working inventories on a market valuation basis, which decreased costs of goods sold. However, costs of goods sold was increased during fiscal 2003 by the effect of valuing the Company’s inventories under the LIFO cost method, which decreased the value of the Company’s total inventories by $1.4 million than if the FIFO method had been used.

Gross Profit/(Loss)

2004 vs. 2003

Retail gross profit decreased during 2004 by $.8 million or .8%. Petroleum margins decreased $1.1 million and merchandise margin increased by $.3 million. The merchandise margin increased despite a reduction in merchandise sales. This margin increase was due to a renegotiated supply contract with a major vendor. Petroleum margins were impacted by the 2.3% decrease in petroleum volume and per gallon cost increases.

2003 vs. 2002

Retail gross profit increased during 2003 by $18.8 million or 21.9%. Inclusive of Country Fair, the Company increased its petroleum margins by $9.9 million and its merchandise margin by $8.9 million. These margin increases were a result of 23.0 million gallons of additional volume sold and $32.8 million in increased merchandise sales.

Operating Expenses

2004 vs. 2003

Retail operating expenses increased during 2004 by $4.7 million or 5.0%. Operating expenses increased due to increased payroll and payroll costs of $2.4 million, increased maintenance costs of $.3 million, increased advertising costs of $.3 million, increased credit/customer service costs of $.6 million, increased legal/professional services costs of $.2 million, increased pension/post retirement costs of $.2 million, increased insurance, utilities and taxes of $.2 million, increased rent expenses of $.1 million and increased miscellaneous sundry items of $.4 million. The largest increase, payroll and payroll costs, was due primarily to $.9 million workers compensation costs of which approximately $.6 million was related to prior period workers compensation claim balances and increased costs in health insurance of $1.1 million.

2003 vs. 2002

Retail operating expenses increased during 2003 by $12.8 million or 15.8%. Retail operations for the fiscal year ended August 31, 2003 included Country Fair for the entire period versus the fiscal year ended August 31, 2002 in which Country Fair operations were only included from the acquisition date of December 21, 2001 which resulted in increased operating expenses of $10.4 million from $20.7 million for the fiscal year ended 2002 to $31.1 million for the fiscal year ended 2003. The remaining increases to operating expenses were due to increased payroll and payroll costs of $1.1 million, increased maintenance costs of $.3 million, increased insurance, utilities and taxes of $.3 million, increased credit/customer service costs of $.7 million and increased depreciation of $.3 million offset by lower legal/professional services costs of $.2 million and lower pension/post retirement costs of $.1 million.

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Wholesale Operations:

	Fiscal Year Ended August 31,
	2004		2003		2002
	(dollars in thousands)
Net Sales(a)	$	711,313	$	571,447	$	471,938
Costs of Goods Sold		642,137		544,030		472,152
Gross Profit / (Loss)	$	69,176	$	27,417	$	(214	)
Operating Expenses		25,822		24,921		25,142
Segment Operating Income / (Loss)	$	43,354	$	2,496	$	(25,356	)
Crude throughput (thousand barrels per day)		63.7		58.8		62.2

Refinery Product Yield

(thousands of barrels)

	Fiscal Year Ended August 31,
	2004		2003		2002
Gasoline and gasoline blendstock	10,210		9,751		10,351
Distillates	6,058		5,348		5,904
Asphalt	6,352		5,975		5,898
Butane, propane, residual products, internally produced fuel and other	2,735		2,298		2,343
Total Product Yield	25,355		23,372		24,496
% Heavy Crude Oil of Total Refinery Throughput(b)	54	%	57	%	53	%

Product Sales

(dollars in thousands)(a)

	Fiscal Year Ended August 31,
	2004		2003		2002
Gasoline and gasoline blendstock	$	285,949	$	207,823	$	180,325
Distillates		216,585		180,976		147,279
Asphalt		187,237		167,242		136,086
Other		21,542		15,406		8,248
	$	711,313	$	571,447	$	471,938

Product Sales

(thousand of barrels)(a)

	Fiscal Year Ended August 31,
	2004	2003	2002
Gasoline and gasoline blendstock	6,090	5,432	6,121
Distillates	5,041	4,668	5,179
Asphalt	7,732	6,749	6,872
Other	822	719	575
	19,685	17,568	18,747

(a) Sources of total product sales include products manufactured at the refinery located in Warren, Pennsylvania and products purchased from third parties.

(b) The Company defines “heavy” crude oil as crude oil with an American Petroleum Institute specific gravity of 26 or less.

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Net Sales

2004 vs. 2003

Wholesale sales increased during 2004 by $139.9 million or 24.5% from $571.4 million to $711.3 million. The wholesales increase was due to a 12.1% increase in wholesale volume and a 11.1% increase in wholesale prices.

2003 vs. 2002

Wholesale sales increased during 2003 by $99.5 million or 21.1% from $471.9 million to $571.4 million. The wholesale sales increase was due to a 29.2% increase in wholesale prices offset by a 6.3% decrease in wholesale volume.

Costs of Goods Sold

2004 vs. 2003

Wholesale costs of goods sold increased during 2004 by $98.1 million or 18.0% from $544.0 million to $642.1 million. The increase in wholesale costs of goods sold was primarily due to the 10.1% increase in the Company’s average crude oil purchase price for fiscal 2004 as compared to the prior year period. Worldwide crude oil prices, as indicated by NYMEX crude oil contract prices, increased 17.9% as compared to the prior year period. Additionally, crude throughput increased 8.3% over the prior year, which is attributable to the Company’s scheduled maintenance turnaround of late October and early November 2002. Costs of goods sold increased $13.3 million during fiscal 2004 by the year-end impact of valuing the Company’s inventories under the LIFO cost method.

2003 vs. 2002

Wholesale costs of goods sold increased during 2003 by $71.8 million or 15.2% from $472.2 million to $544.0 million. The increase in wholesale costs of goods was primarily due to the 26.3% increase in the Company’s average crude oil purchase price for the fiscal year ended 2003 as compared to the prior year period. Worldwide crude oil prices, as indicated by NYMEX crude oil contract prices, increased 23.1% as compared to the prior year period. For the fiscal year 2002, costs of goods was positively impacted by an approximately $1.2 million increase in the value of the Company’s working inventories on a market valuation basis, which decreased costs of goods sold. However, costs of goods sold was increased during fiscal 2003 by the effect of valuing the Company’s inventories under the LIFO cost method, which decreased the value of the Company’s total inventories by $3.9 million than if the FIFO method had been used.

Gross Profit/(Loss)

2004 vs. 2003

Wholesale gross profit increased $41.8 million from $27.4 million for fiscal year ended 2003 to $69.2 million for the fiscal year ended 2004. This increase is due to the increases in wholesale selling prices and wholesale sales volume.

2003 vs. 2002

Wholesale gross profit increased $27.6 million from ($.2) million for fiscal year ended 2002 to $27.4 million for the fiscal year ended 2003. This increase was primarily due to the increase in wholesale selling prices and to 7.7% higher discounts on heavy high-sulfur crude oil grades processed by the Company.

23

Operating Expenses

2004 vs. 2003

Wholesale operating expenses increased during 2004 by $.9 million or 3.6%. For 2004 operating expenses were $25.8 million, or 3.6% of net wholesale sales, compared to $24.9 million or 4.4% of net wholesale sales for 2003.

2003 vs. 2002

Wholesale operating expenses remained relatively consistent between fiscal year ended 2002 and fiscal year ended 2003, decreasing by $.2 million or .8%.

Interest Expense

Net interest expense (interest expense less interest income) increased during fiscal 2004 by $.1 million from $21.3 million for the fiscal year ended 2003 to $21.4 million for the fiscal year ended 2004. The increased net interest expense was primarily due to an increase in borrowings on our revolving credit facility throughout the fiscal year.

Net interest expense (interest expense less interest income) increased during fiscal 2003 by $1.6 million from $19.7 million for the fiscal year ended 2002 to $21.3 million for the fiscal year ended 2003. The increased net interest expense was due to a $.2 million reduction in interest income earned and $1.2 million increased interest expense for borrowings on our revolving credit facility.

Income Tax Expense/(Benefit)

Our fiscal 2004 effective tax remained relatively consistent with that for fiscal 2003 which was approximately 39%.

Our fiscal 2003 effective tax rate remained relatively consistent with that for fiscal 2002 which was approximately 39%.

Liquidity and Capital Resources

On August 6, 2004, we completed a private placement offering of $200,000,000 in Senior Notes due 2012 which bear an interest rate of 10.5%. The notes were issued at 98.671% of par to yield 10 ³/4% to maturity, resulting in a debt discount of $2,658,000, which will be amortized over the life of the notes using the interest method. The net proceeds of the offering of $191,600,000 were used to retire all of our outstanding 10 ³/4% Senior Unsecured Notes due 2007, Series B, pay accrued interest of $3,700,000 and a redemption premium related thereto and to pay a dividend of $5,000,000 to the Company’s stockholder. A loss of $6,770,000 on the early extinguishment of debt was recorded consisting of a redemption premium of $3,228,000, a write-off of deferred financing costs of $1,990,000 and additional interest paid of $1,552,000. Such notes are fully and unconditionally guaranteed on a senior unsecured basis by all of the Company’s subsidiaries (see Notes 9 and 17 to Consolidated Financial Statements, Item 8). The notes will be eligible for resale under Rule 144A of the Securities Act of 1933.

We operate in an environment where our liquidity and capital resources are impacted by changes in the price of crude oil and refined petroleum products, availability of credit, market uncertainty and a variety of additional factors beyond our control. Included in such factors are, among others, the level of customer product demand, weather conditions, governmental regulations, worldwide political conditions and overall market and economic conditions.

The following table summarizes selected measures of liquidity and capital sources (in thousands):

	August 31, 2004		August 31, 2003
Cash and cash equivalents	$	11,552	$	13,819
Working capital	$	66,222	$	37,638
Current ratio		1.8		1.4
Debt	$	212,948	$	214,410

24

Primary sources of liquidity have been cash and cash equivalents, cash flows from operations and borrowing availability under a revolving line of credit. We believe available capital resources will be adequate to meet our working capital, debt service, and capital expenditure requirements for existing operations.

Our cash and cash equivalents consist of bank balances and investments in money market funds. These investments have staggered maturity dates, none of which exceed three months. They have a high degree of liquidity since the securities are traded in public markets. During the fiscal year ended August 31, 2004, significant uses of cash include $181.0 million to pay off 10 ³/4% Notes due 2007, $10.0 million for purchases of property, plant and equipment, which includes $1.7 million for USEPA low sulfur gasoline compliance, $2.8 million for FCC regenerator cyclone replacement and related equipment, and $5.5 million for other general repair and maintenance. Also, $5.4 million for additions to refinery turnaround costs $18.5 million of reductions to borrowings on the Revolving Credit Facility an increase in cash used by working capital items including $6.9 million for prepaid expenses and $6.4 million for accounts payable, both related primarily to increased crude oil costs.

We require a substantial investment in working capital which is susceptible to large variations during the year resulting from purchases of inventory and seasonal demands. Inventory purchasing activity is a function of sales activity and turnaround cycles for the different refinery units.

Maintenance and non-discretionary capital expenditures have averaged approximately $4 million annually over the last three years for the refining and marketing operations. Management does not foresee any increase in maintenance and non-discretionary capital expenditures during fiscal year 2004.

Future liquidity, both short and long-term, will continue to be primarily dependent on realizing a refinery margin sufficient to cover fixed and variable expenses, including planned capital expenditures. We expect to be able to meet our working capital, capital expenditure, contractual obligations, letter of credit and debt service requirements out of cash flow from operations, cash on hand and borrowings under our Revolving Credit Facility with PNC Bank, N.A. as Agent Bank. This is a $75,000,000 revolving facility, which expires May 9, 2007. The Revolving Credit Facility is secured primarily by certain cash accounts, accounts receivable, and inventory. Until maturity, we may borrow on a borrowing base formula as set forth in the facility. For Base Rate borrowings, interest is calculated at the greater of the agent bank’s prime rate or federal fund rate plus 1%, plus an applicable margin of .25% to .75%, which was 5.00% at August 31, 2004. For Euro-Rate borrowings, interest is calculated at the LIBOR rate plus an applicable margin of 1.75% to 3.00%. The applicable margin varies with our facility leverage ratio calculation. As of August 31, 2004, $0 of Euro-Rate borrowings and $13,000,000 of Base Rate borrowings were outstanding under the agreement.

We had outstanding letters of credit of $385,000 as of August 31, 2004.

As of August 31, 2004 the outstanding borrowings under the Revolving Credit Facility was $13,385,000 resulting in net availability of $61,615,000.

The following is a summary of our significant contractual cash obligations for the periods indicated that existed as of August 31, 2004 and is based on information appearing in the Notes to the Consolidated Financial Statements in Item 8:

	Payments due by period
Contractual Obligations	Total		Less Than 1 Year		1 – 3 Years		3 –5 Years			More than 5 Years
	(in thousands)
Long-term debt (a) (b)	$	199,948	$	452	$	212	$	(251	)	$	199,535
Operating leases		106,643		10,257		18,763		15,286			62,337
Capital lease obligations		1,971		240		484		447			800
Total contractual cash obligations	$	308,562	$	10,949	$	19,459	$	15,488		$	262,672

(a) Does not include the following:

(i) Interest on the 10.5 % Senior Notes.

25

(ii) Interest on the Revolving Credit Facility, which is calculated at the greater of the agent bank’s prime rate or federal fund rate plus 1%, plus an applicable margin of .25% to ..75%, which was 5.00% at August 31, 2004. For Euro-Rate borrowings, interest is calculated at the LIBOR rate plus an applicable margin of 1.75% to 3.00%. The applicable margin varies with our facility leverage ratio calculation.

(b) Amounts reflect amortization of debt discount on $200 million of Senior Notes due 2012 issued August 6, 2004, which will be amortized over the life of the notes using the interest method (see Note 9 to Consolidated Financial Statements, Item 8).

Although we are not aware of any pending circumstances which would change our expectation, changes in the tax laws, the imposition of and changes in federal and state clean air and clean fuel requirements and other changes in environmental laws and regulations may also increase future capital expenditure levels. Future capital expenditures are also subject to business conditions affecting the industry. We continue to investigate strategic acquisitions and capital improvements to our existing facilities.

Federal, state and local laws and regulations relating to the environment affect nearly all of our operations. As is the case with all the companies engaged in similar industries, we face significant exposure from actual or potential claims and lawsuits involving environmental matters. Future expenditures related to environmental matters cannot be reasonably quantified in many circumstances due to the uncertainties as to required remediation methods and related clean-up cost estimates. We cannot predict what additional environmental legislation or regulations will be enacted or become effective in the future or how existing or future laws or regulations will be administered or interpreted with respect to products or activities to which they have not been previously applied.

Related Party Transactions

See Item 13, Certain Relationships and Related Transactions.

Seasonal Factors

Seasonal factors affecting the Company’s business may cause variation in the prices and margins of some of the Company’s products. For example, demand for gasoline tends to be highest in spring and summer months, while demand for home heating oil and kerosene tends to be highest in winter months.

As a result, the margin on gasoline prices versus crude oil costs generally tends to increase in the spring and summer, while margins on home heating oil and kerosene tend to increase in winter.

Inflation

The effect of inflation on the Company has not been significant during the last five fiscal years.

Recent Accounting Pronouncements

In January 2003, the Financial Accounting Standards Board (“FASB”) issued Interpretation (“FIN”) No. 46, “Consolidation of Variable Interest Entities” and in December 2003, a revised interpretation was issued (“FIN 46(R)”). In general, a variable interest entity (“VIE”) is a corporation, partnership, trust, or any other legal structure used for business purposes that either does not have equity investors with voting rights or has equity investors that do not provide sufficient financial resources for the entity to support its activities. FIN 46(R) requires a VIE to be consolidated by a company if that company is designated as the primary beneficiary. The interpretation applies to VIEs created after January 31, 2003, and for all financial statements issued after December 15, 2003 for VIEs in which an enterprise held a variable interest that is acquired before February 1, 2003. The adoption of FIN 46(R) did not have any effect on the Company’s financial position or results of operations.

In December 2003, the FASB issued a revision to Statement No. 132, “Employers’ Disclosures about Pensions and Other Postretirement Benefits” (Statement 132”). The revision to Statement 132 requires additional

26

disclosures relating to the description of the types of plan assets, investment strategy, measurement date(s), plan obligations, cash flows, and components of net periodic benefit costs of defined benefit pension plans and other defined postretirement benefit plans recognized during interim periods. These disclosure requirements are effective for all of the Company’s future quarterly and annual reports. Disclosures required under Statement 132 are included in Note 5 to the Consolidated Financial Statements, Item 8.

In May 2004, the FASB released Staff Position No. 106-2, “Accounting and Disclosure Requirements related to the Medicare Prescription Drug, Improvement and Modernization Act of 2003” (“FSP 106-2”), which supersedes Staff Position No. 106-1. FSP 106-2 addresses the accounting and disclosure implications that are expected to arise as a result of the Medicare Prescription Drug, Improvement and Modernization Act of 2003 enacted on December 8, 2003. FSP 106-2 is effective for interim or annual periods beginning after June 15, 2004. The Company adopted the provisions of FSP 106-2 for the year ended August 31, 2004.

In March 2004, the Emerging Issues Task Force (“EITF”) reached a consensus on Issue No. 03-1, “The Meaning of Other-Than-Temporary Impairments and Its Application to Certain Investments” (“EITF 03-1”). EITF 03-1 provides a three-step impairment model for determining whether an investment is other-than-temporarily impaired and requires the Company to recognize such impairments as an impairment loss equal to the difference between the investment’s cost and fair value at the reporting date. The guidance is effective for the Company during the first quarter of fiscal 2005. The Company does not believe that the adoption of EITF 03-1 will have a material effect on its financial position or results of operations.

ITEM 7A.    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

We use our Revolving Credit Facility to finance a portion of our operations. These on-balance sheet financial instruments, to the extent they provide for variable rates, expose us to interest rate risk resulting from changes in the PNC Prime rate, the Federal Funds rate or the LIBOR rate.

We have exposure to price fluctuations of crude oil and refined products. We do not manage the price risk related to all of our inventories of crude oil and refined products with a permanent formal hedging program, but we do manage our risk exposures by managing inventory levels. During the fiscal years ended August 31, 2004 and 2003, the Company realized net gains from its trading activity of $400,000 and $1,600,000, respectively, which is included as a reduction of costs of goods sold. At August 31, 2004, the Company had net open futures positions of 750,000 barrels of crude oil that will expire during the first quarter of 2005. The unrealized loss associated with the open future positions amounted to $299,000 at August 31, 2004.

At August 31, 2004, we were exposed to the risk of market price declines with respect to a substantial portion of our crude oil and refined product inventories.

ITEM 8.    FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

INDEX TO FINANCIAL STATEMENTS

	Page
Report of Independent Registered Public Accounting Firm	28
Consolidated Financial Statements:
Balance Sheets	29
Statements of Operations	30
Statements of Comprehensive Income (Loss)	31
Statements of Stockholder’s Equity	32
Statements of Cash Flows	33
Notes to Consolidated Financial Statements	34 thru 61

27

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors and Stockholder

United Refining Company

Warren, Pennsylvania

We have audited the accompanying consolidated balance sheets of United Refining Company and subsidiaries as of August 31, 2004 and 2003, and the related consolidated statements of operations, comprehensive income (loss), stockholder’s equity and cash flows for each of the three years in the period ended August 31, 2004. These consolidated financial statements are the responsibility of the management of United Refining Company and its subsidiaries. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of United Refining Company and subsidiaries as of August 31, 2004 and 2003, and the results of their operations and their cash flows for each of the three years in the period ended August 31, 2004, in conformity with accounting principles generally accepted in the United States of America.

/s/    BDO Seidman, LLP

New York, New York

October 29, 2004

28

UNITED REFINING COMPANY AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(in thousands, except share amounts)

	August 31,
	2004			2003
Assets
Current:
Cash and cash equivalents	$	11,552		$	13,819
Accounts receivable, net		44,596			42,732
Inventories		75,623			76,123
Prepaid expenses and other assets		17,247			10,336
Amounts due from affiliated companies, net		—			639
Total current assets		149,018			143,649
Property, plant and equipment, net		184,705			186,879
Investment in affiliated company		846			574
Deferred financing costs, net		6,723			2,963
Goodwill		1,349			1,349
Tradename		10,500			10,500
Amortizable intangible assets, net		3,103			3,588
Deferred turnaround costs and other assets, net		10,138			8,217
Deferred income taxes		—			3,709
	$	366,382		$	361,428
Liabilities and Stockholder’s Equity
Current:
Revolving credit facility	$	13,000		$	31,500
Current installments of long-term debt		452			683
Accounts payable		28,732			35,111
Accrued liabilities		16,300			15,707
Income taxes payable		795			—
Sales, use and fuel taxes payable		19,466			17,853
Deferred income taxes		3,919			5,157
Amounts due to affiliated companies, net		132			—
Total current liabilities		82,796			106,011
Long term debt: less current installments		199,496			182,227
Deferred income taxes		1,898			—
Deferred gain on settlement of pension plan obligations		915			1,130
Deferred retirement benefits		32,402			28,398
Other noncurrent liabilities		1,769			1,687
Total liabilities		319,276			319,453
Commitments and contingencies
Stockholder’s equity:
Common stock; $.10 par value per share—shares authorized 100; issued and outstanding 100		—			—
Additional paid-in capital		16,648			16,648
Retained earnings		32,762			26,367
Accumulated other comprehensive loss		(2,304	)		(1,040	)
Total stockholder’s equity		47,106			41,975
	$	366,382		$	361,428

See accompanying notes to consolidated financial statements.

29

UNITED REFINING COMPANY AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands)

	Year Ended August 31,
	2004			2003			2002
Net sales (includes consumer excise taxes of $167,629, $168,241, and $156,489)	$	1,488,937		$	1,290,351		$	1,052,016
Costs of goods sold		1,316,159			1,158,582			966,645
Gross profit		172,778			131,769			85,371
Expenses:
Selling, general and administrative expenses		111,808			106,427			94,297
Depreciation and amortization expenses		12,453			12,219			11,774
Total operating expenses		124,261			118,646			106,071
Operating income (loss)		48,517			13,123			(20,700	)
Other income (expense):
Interest expense, net		(21,423	)		(21,340	)		(19,734	)
Other, net		(2,201	)		(1,291	)		(1,345	)
Equity in net earnings of affiliate		672			867			1,242
Loss on early extinguishment of debt		(6,770	)		—			—
		(29,722	)		(21,764	)		(19,837	)
Income (loss) before income tax expense (benefit)		18,795			(8,641	)		(40,537	)
Income tax expense (benefit):
Current		2,200			258			(2,702	)
Deferred		5,200			(3,628	)		(12,894	)
		7,400			(3,370	)		(15,596	)
Net income (loss)	$	11,395		$	(5,271	)	$	(24,941	)

See accompanying notes to consolidated financial statements.

30

UNITED REFINING COMPANY AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(in thousands)

	Year Ended August 31,
	2004			2003			2002
Net income (loss)	$	11,395		$	(5,271	)	$	(24,941	)
Other comprehensive loss:
Minimum pension liability, net of taxes		(1,264	)		(950	)		(90	)
Other comprehensive loss		(1,264	)		(950	)		(90	)
Total comprehensive income (loss)	$	10,131		$	(6,221	)	$	(25,031	)

See accompanying notes to consolidated financial statements.

31

UNITED REFINING COMPANY AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDER’S EQUITY

(in thousands, except share data)

				Additional Paid-In Capital		Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Total Stockholder’s Equity
	Common Stock
	Shares	Amount
Balance at August 31, 2001	100	$	—	$	16,648	$	59,318		$	—		$	75,966
Dividend to stockholder	—		—		—		(2,130	)		—			(2,130	)
Net loss	—		—		—		(24,941	)		—			(24,941	)
Distribution to Parent under the Tax Sharing Agreement	—		—		—		(609	)		—			(609	)
Other comprehensive loss	—		—		—		—			(90	)		(90	)
Balance at August 31, 2002	100		—		16,648		31,638			(90	)		48,196
Net loss	—		—		—		(5,271	)		—			(5,271	)
Other comprehensive loss	—		—		—		—			(950	)		(950	)
Balance at August 31, 2003	100		—		16,648		26,367			(1,040	)		41,975
Dividend to stockholder	—		—		—		(5,000	)		—			(5,000	)
Other comprehensive loss	—		—		—		—			(1,264	)		(1,264	)
Net income	—		—		—		11,395			—			11,395
Balance at August 31, 2004	100	$	—	$	16,648	$	32,762		$	(2,304	)	$	47,106

See accompanying notes to consolidated financial statements.

32

UNITED REFINING COMPANY AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

	Year Ended August 31,
	2004			2003			2002
Cash flows from operating activities:
Net income (loss)	$	11,395		$	(5,271	)	$	(24,941	)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation and amortization		16,620			15,820			14,830
Write-off of deferred financing costs		1,990			—			—
Equity in net earnings of affiliate		(672	)		(867	)		(1,242	)
Deferred income taxes		5,200			(3,628	)		(12,894	)
Loss on asset dispositions		1,046			585			630
Cash (used in) provided by working capital items		(10,882	)		(2,545	)		2,279
Other, net		(2	)		18			(41	)
Change in operating assets and liabilities:
Other assets		(147	)		(750	)		—
Deferred retirement benefits		1,911			2,693			4,336
Other noncurrent liabilities		82			(663	)		—
Total adjustments		15,146			10,663			7,898
Net cash provided by (used in) operating activities		26,541			5,392			(17,043	)
Cash flows from investing activities:
Purchase of business, net of cash acquired		—			—			(16,900	)
Additions to property, plant and equipment		(10,075	)		(8,043	)		(9,061	)
Additions to turnaround costs		(5,360	)		(5,619	)		(1,415	)
Dividends received		400			2,000			1,064
Proceeds from asset dispositions		32			17			3
Net cash used in investing activities		(15,003	)		(11,645	)		(26,309	)
Cash flows from financing activities:
Net (reductions) borrowings on revolving credit facility		(18,500	)		7,186			24,314
Proceeds from issuance of long-term debt		197,342			—			—
Principal reductions of long-term debt		(180,994	)		(379	)		(227	)
Dividends to stockholder		(5,000	)		—			(2,130	)
Deferred financing costs		(6,653	)		(250	)		(314	)
Net cash (used in) provided by financing activities		(13,805	)		6,557			21,643
Net (decrease) increase in cash and cash equivalents		(2,267	)		304			(21,709	)
Cash and cash equivalents, beginning of year		13,819			13,515			35,224
Cash and cash equivalents, end of year	$	11,552		$	13,819		$	13,515
Cash (used in) provided by working capital items:
Accounts receivable, net	$	(1,864	)	$	(8,867	)	$	8,877
Inventories		500			17,444			(25,014	)
Prepaid expenses and other assets		(6,911	)		843			3,518
Refundable income taxes		—			3,300			(3,300	)
Accounts payable		(6,379	)		(15,527	)		21,944
Accrued liabilities		593			1,705			376
Amounts due affiliated companies		771			(779	)		(2,210	)
Income taxes payable		795			—			(2,473	)
Sales, use and fuel taxes payable		1,613			(664	)		561
Total change	$	(10,882	)	$	(2,545	)	$	2,279
Cash paid (received) during the period for:
Interest	$	21,490		$	21,538		$	19,728
Income taxes	$	1,721		$	(2,753	)	$	2,723
Non-cash investing and financing activities:
Property additions and capital leases	$	690		$	1,181		$	1,238

See accompanying notes to consolidated financial statements.

33

UNITED REFINING COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.    Description of Business and Summary of Significant Accounting Policies

Description of Business and Basis of Presentation

The consolidated financial statements include the accounts of United Refining Company and its subsidiaries, United Refining Company of Pennsylvania and its subsidiaries, and Kiantone Pipeline Corporation (collectively, the “Company”). All significant intercompany balances and transactions have been eliminated in consolidation.

The Company is a petroleum refiner and marketer in its primary market area of Western New York and Northwestern Pennsylvania. Operations are organized into two business segments: wholesale and retail.

The wholesale segment is responsible for the acquisition of crude oil, petroleum refining, supplying petroleum products to the retail segment and the marketing of petroleum products to wholesale and industrial customers. The retail segment sells petroleum products under the Kwik Fill^®, Citgo^® and Keystone^® brand names at a network of Company-operated retail units and convenience and grocery items through Company-owned gasoline stations and convenience stores under the Red Apple Food Mart^® and Country Fair^® brand names.

The Company is a wholly-owned subsidiary of United Refining, Inc., a wholly-owned subsidiary of United Acquisition Corporation, which in turn is a wholly-owned subsidiary of Red Apple Group, Inc. (the “Parent”).

Cash and Cash Equivalents

For purposes of the consolidated statements of cash flows, the Company considers all highly liquid investment securities with maturities of three months or less at date of acquisition to be cash equivalents.

Derivative Financial Instruments

From time to time the Company uses derivatives to reduce its exposure to fluctuations in crude oil purchase costs and refining margins. Derivative products, specifically crude oil options contracts and crack spread option contracts are used to hedge the volatility of these items. The Company does not enter such contracts for speculative purposes.

For derivative instruments that are designated and qualify as fair value hedges (i.e. hedging the exposure to changes in the fair value of an asset or a liability or an identified portion thereof that is attributable to a particular risk), the gain or loss on the derivative instrument as well as the offsetting gain or loss on the hedge item attributable to the hedged risk is recognized in earnings in the current period. For derivative instruments not designated as hedging instruments, changes in fair market values are recognized in earnings as a component of costs of goods sold.

The Company accounts for changes in the fair value of its contracts by marking them to market and recognizing any resulting gains or losses in its statement of operations. During the fiscal years ended August 31, 2004 and 2003, the Company realized net gains from its trading activities of $400,000 and $1,600,000, respectively, which is included as a reduction of costs of goods sold. The Company includes the carrying amounts of the contracts in prepaid expenses and other assets in the Consolidated Balance Sheet.

At August 31, 2004, the Company had net open futures positions of 750,000 barrels of crude oil that will expire during the first quarter of 2005. The unrealized loss associated with the open future positions amounted to $299,000 at August 31, 2004.

34

UNITED REFINING COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Inventories and Exchanges

Inventories are stated at the lower of cost or market, with cost being determined under the Last-in, First-out (LIFO) method for crude oil and petroleum product inventories and the First-in, First-out (FIFO) method for merchandise. Supply inventories are stated at either lower of cost or market or replacement cost and include various parts for the refinery operations. If the cost of inventories exceeds their market value, provisions are made currently for the difference between the cost and the market value. As of August 31, 2004 and 2003, had the Company utilized the FIFO inventory method, petroleum product inventories would have been higher by $19,515,000 and $5,301,000, respectively. As of August 31, 2004, the Company had a LIFO layer liquidation resulting in an inventory gain of approximately $252,000. As of August 31, 2003, the Company had no LIFO layer liquidation.

Property, Plant and Equipment

Property, plant and equipment is stated at cost and depreciated by the straight-line method over the respective estimated useful lives. Routine current maintenance, repairs and replacement costs are charged against income. Expenditures which materially increase values, expand capacities or extend useful lives are capitalized. A summary of the principal useful lives used in computing depreciation expense is as follows:

	Estimated Useful Lives (Years)
Refinery Equipment	20-30
Marketing	15-30
Transportation	20-30

Deferred Maintenance Turnarounds

The cost of maintenance turnarounds, which consist of complete shutdown and inspection of significant units of the refinery at intervals of two or more years for necessary repairs and replacements, are deferred when incurred and amortized on a straight-line basis over the period of benefit, which ranges from 3 to 10 years. As of August 31, 2004 and 2003, deferred turnaround costs included in deferred turnaround costs and other assets, net amounted to $9,077,000 and $7,090,000, net of accumulated amortization of $5,209,000 and $5,494,000, respectively. Amortization expense included in costs of goods sold for the fiscal years ended August 31, 2004, 2003 and 2002 amounted to $3,372,000, $2,889,000 and $2,455,000, respectively.

Amortizable Intangible Assets

The Company amortizes identifiable intangible assets such as brand names, non-compete agreements, leasehold covenants and deed restrictions on a straight line basis over their estimated useful lives which range from 5 to 25 years.

Revenue Recognition

Revenues from wholesale sales are recognized upon shipment or when title passes. Retail revenues are recognized immediately upon sale to the customer.

Income Taxes

The Company accounts for income taxes using the asset and liability method. Under the asset and liability method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to

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UNITED REFINING COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

The Company joins with the Parent and the Parent’s other subsidiaries in filing a Federal Income tax return on a consolidated basis. Income taxes are calculated on a separate return basis with consideration of the Tax Sharing Agreement between the Parent and its subsidiaries.

Post-Retirement Healthcare Benefits

The Company provides at no cost to retirees, post-retirement healthcare benefits to salaried and certain hourly employees. The benefits provided are hospitalization, medical coverage and dental coverage for the employee and spouse until age 65. After age 65, benefits continue until the death of the retiree, which results in the termination of benefits for all dependent coverage. If an employee leaves the Company as a terminated vested member of a pension plan prior to normal retirement age, the person is not entitled to any post-retirement healthcare benefits.

The Company accrues post-retirement benefits other than pensions, during the years that the employee renders the necessary service, of the expected cost of providing those benefits to an employee and the employee’s beneficiaries and covered dependents. The Company has elected to amortize the transition obligation of approximately $12,000,000 on a straight-line basis over a 20-year period.

Use of Estimates

The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Allowance for Doubtful Accounts

The Company records an allowance for doubtful accounts based on specifically identified amounts that we believe to be uncollectible. We also record additional allowances based on historical collection experience and our assessment of the general financial conditions affecting our customer base. Senior management reviews accounts receivable on a weekly basis to determine if any receivables will potentially be uncollectible. After all attempts to collect a receivable have failed, the receivable is written off against the allowance.

Concentration of Credit Risk

Financial instruments which potentially subject the Company to concentrations of credit risk consist principally of temporary cash investments.

The Company places its temporary cash investments with quality financial institutions. At times, such investments were in excess of FDIC insurance limits. The Company has not experienced any losses in such accounts.

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UNITED REFINING COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Environmental Matters

The Company expenses environmental expenditures related to existing conditions resulting from past or current operations and from which no current or future benefit is discernible. Expenditures, which extend the life of the related property or mitigate or prevent future environmental contamination are capitalized. The Company determines its liability on a site by site basis and records a liability at the time when it is probable and can be reasonably estimated. The Company’s estimated liability is reduced to reflect the anticipated participation of other potentially responsible parties in those instances where it is probable that such parties are legally responsible and financially capable of paying their respective shares of the relevant costs. The estimated liability of the Company is not reduced for possible recoveries from insurance carriers and is recorded in accrued liabilities.

Goodwill and Other Non-Amortizable Assets

In accordance with Statement of Financial Accounting Standard No. 142, “Goodwill and Other Intangible Assets” (“Statement 142”), goodwill and intangible assets deemed to have indefinite lives are no longer amortized but are subject to annual impairment tests in accordance with Statement 142. Other intangible assets continue to be amortized over their estimated useful lives.

The Company performed separate impairment tests for its goodwill and tradename using the discounted cash flow methods. The fair value of the goodwill and tradename exceeded their respective carrying values. The Company has noted no subsequent indication that would require testing its goodwill and tradename for impairment.

Long-Lived Assets

Whenever events or changes in circumstances indicate that the carrying value of any of these assets (other than goodwill and tradename) may not be recoverable, the Company will assess the recoverability of such assets based upon estimated undiscounted cash flow forecasts. When any such impairment exists, the related assets will be written down to fair value.

Other Comprehensive Income (Loss)

The Company reports comprehensive income (loss) in accordance with Statement of Financial Accounting Standard No. 130, “Reporting Comprehensive Income” (“Statement 130”). Statement 130 establishes guidelines for the reporting and display of comprehensive income (loss) and its components in financial statements. Comprehensive income (loss) includes charges and credits to equity that are not the result of transactions with the shareholder. Included in other comprehensive income (loss) for the Company is a minimum pension liability adjustment, which is net of taxes.

Recent Accounting Pronouncements

In January 2003, the FASB issued Interpretation (“FIN”) No. 46, “Consolidation of Variable Interest Entities” and in December 2003, a revised interpretation was issued (“FIN 46(R)”). In general, a variable interest entity (“VIE”) is a corporation, partnership, trust, or any other legal structure used for business purposes that either does not have equity investors with voting rights or has equity investors that do not provide sufficient financial resources for the entity to support its activities. FIN 46(R) requires a VIE to be consolidated by a company if that company is designated as the primary beneficiary. The interpretation applies to VIEs created

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UNITED REFINING COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

after January 31, 2003, and for all financial statements issued after December 15, 2003 for VIEs in which an enterprise held a variable interest that is acquired before February 1, 2003. The adoption of FIN 46(R) did not have any effect on the Company’s financial position or results of operations.

In December 2003, the FASB issued a revision to Statement No. 132, “Employers’ Disclosures about Pensions and Other Postretirement Benefits” (“Statement 132”). The revision to Statement 132 requires additional disclosures relating to the description of the types of plan assets, investment strategy, measurement date(s), plan obligations, cash flows, and components of net periodic benefit costs of defined benefit pension plans and other defined postretirement benefit plans recognized during interim periods. These disclosure requirements are effective for all of the Company’s future quarterly and annual reports. Disclosures required under Statement 132 are included in Note 10 to the Consolidated Financial Statements herein.

In May 2004, the FASB released Staff Position No. 106-2, “Accounting and Disclosure Requirements related to the Medicare Prescription Drug, Improvement and Modernization Act of 2003” (“FSP 106-2”), which supersedes Staff Position No. 106-1. FSP 106-2 addresses the accounting and disclosure implications that are expected to arise as a result of the Medicare Prescription Drug, Improvement and Modernization Act of 2003 enacted on December 8, 2003. FSP 106-2 is effective for interim or annual periods beginning after June 15, 2004. The Company adopted the provisions of FSP 106-2 for the year ended August 31, 2004 (see Note 10 to the Consolidated Financial Statements).

In March 2004, the Emerging Issues Task Force (“EITF”) reached a consensus on Issue No. 03-1, “The Meaning of Other-Than-Temporary Impairments and Its Application to Certain Investments” (“EITF 03-1”). EITF 03-1 provides a three-step impairment model for determining whether an investment is other-than-temporarily impaired and requires the Company to recognize such impairments as an impairment loss equal to the difference between the investment’s cost and fair value at the reporting date. The guidance is effective for the Company during the first quarter of fiscal 2005. The Company does not believe that the adoption of EITF 03-1 will have a material effect on its financial position or results of operations.

2.    Accounts Receivable, Net

As of August 31, 2004 and 2003, accounts receivable were net of allowance for doubtful accounts of $1,460,000 and $1,469,000, respectively.

3.    Inventories

Inventories consist of the following:

	August 31,
	2004		2003
	(in thousands)
Crude Oil	$	12,445	$	14,093
Petroleum Products		33,431		33,406
Total @ LIFO		45,876		47,499
Merchandise		15,275		14,554
Supplies		14,472		14,070
Total @ FIFO		29,747		28,624
Total Inventory	$	75,623	$	76,123

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UNITED REFINING COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Included in petroleum product inventories are exchange balances either held for or due from other petroleum marketers. These balances are not significant.

The Company does not own sources of crude oil and depends on outside vendors for its needs.

4.    Property, Plant and Equipment

Property, plant and equipment is summarized as follows:

	August 31,
	2004		2003
	(in thousands)
Refinery equipment, including construction-in-progress	$	194,183	$	191,197
Marketing (i.e. retail outlets)		89,422		87,173
Transportation		7,704		7,549
		291,309		285,919
Less: Accumulated depreciation		106,604		99,040
	$	184,705	$	186,879

5.    Goodwill and Intangible Assets

On December 21, 2001, the Company acquired 100% of the operations and working capital assets of Country Fair for approximately $17,300,000 in cash. Country Fair currently operates 71 convenience stores in northwestern Pennsylvania, southwestern New York, and eastern Ohio. The fixed assets of Country Fair were acquired by related entities controlled by John A. Catsimatidis, the indirect sole shareholder of the Company (See Footnote 14 to Consolidated Financial Statements).

The acquisition was accounted for under the purchase method of accounting and, accordingly, the consolidated financial statements include the results of operations of Country Fair from the acquisition date. The cost of the acquisition was allocated on the basis of the estimated fair value of the assets acquired over the liabilities assumed, based on an independent appraisal. The excess of the purchase price over the net assets acquired of approximately $1,400,000 has been recorded as goodwill.

39

UNITED REFINING COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The following table summarizes the fair values of the assets acquired and liabilities assumed at the date of acquisition.

At December 21, 2001

(in thousands)

Current assets		$	8,012
Property, plant and equipment			400
Deferred taxes			3,361
Intangible assets not subject to amortization:
Tradename			10,500
Intangible assets subject to amortization:
Vendor contracts	2,600
Deed restrictions	800
Non-compete agreements	400
Leasehold covenants	1,537		5,337
Goodwill			1,349
Total assets acquired			28,959
Current liabilities			(8,864	)
Other long-term liabilities			(2,795	)
Total liabilities assumed			(11,659	)
Net assets acquired		$	17,300

The following unaudited pro forma information presents the Company’s consolidated results of operations as if the Country Fair acquisition had occurred on September 1, 2000. These pro forma amounts have been prepared for comparative purposes only and do not purport to be indicative of the results of operations which actually would have resulted had the acquisition occurred on September 1, 2000, or which may result in the future.

	Year Ended August 31, 2002
	(in thousands)
Net sales	$	1,103,329
Net income (loss)	$	(24,326	)

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UNITED REFINING COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

During the fiscal year ended August 31, 2004, the Company acquired $104,000 of leasehold covenants. As of August 31, 2004 and 2003, the Company’s intangible assets and goodwill, included in the Company’s retail segment, were as follows:

	Weighted Average Remaining Life	August 31, 2004				August 31, 2003
		Gross Carrying Amount		Accumulated Amortization		Gross Carrying Amount		Accumulated Amortization
	(in thousands)
Amortizable intangible assets:
Vendor contracts	4 yrs.	$	2,600	$	991	$	2,600	$	619
Deed restrictions	20 yrs.		800		85		800		53
Non-compete agreement	2 yrs.		400		213		400		133
Leasehold covenants	15 yrs.		1,641		278		1,537		173
			5,441		1,567		5,337		978
Less current portion			771		—		771		—
		$	4,670	$	1,567	$	4,566	$	978
Non-amortizable assets:
Tradename		$	10,500	$	—	$	10,500	$	—
Goodwill		$	1,349	$	—	$	1,349	$	—

Amortization expense for the fiscal years ended August 31, 2004, 2003, and 2002 amounted to $589,000, $585,000, and $390,000, respectively.

Amortization expense for intangible assets subject to amortization for each of the years in the five-year period ending August 31, 2009 is estimated to be $591,000 in 2005, $588,000 in 2006, $505,000 in 2007, $478,000 in 2008, and $230,000 in 2009.

6.    Accrued Liabilities

Accrued liabilities include the following:

	August 31,
	2004		2003
	(in thousands)
Interest	$	1,519	$	4,330
Payrolls and benefits		13,007		9,831
Other		1,774		1,546
	$	16,300	$	15,707

7.    Leases

The Company occupies premises, primarily retail gas stations and convenience stores and office facilities under long-term leases which require minimum annual rents plus, in certain instances, the payment of additional rents based upon sales. The leases generally are renewable for one to three five-year periods.

As of August 31, 2004 and 2003, capitalized lease obligations, included in long-term debt, amounted to $1,028,000 and $1,130,000, respectively, net of current portion of $102,000 and $89,000, respectively. The

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UNITED REFINING COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

related assets (retail gas stations and convenience stores) as of August 31, 2004 and 2003 amounted to $856,000 and $974,000, net of accumulated amortization of $586,000 and $468,000, respectively. Lease amortization amounting to $118,000, $118,000, and $94,000 for the years ended August 31, 2004, 2003, and 2002, respectively, is included in depreciation and amortization expense.

Future minimum lease payments as of August 31, 2004 are summarized as follows:

Year ended August 31,	Capital Leases		Operating Leases
	(in thousands)
2005	$	240	$	10,257
2006		244		9,637
2007		240		9,126
2008		221		8,075
2009		226		7,211
Thereafter		800		62,337
Total minimum lease payments		1,971		106,643
Less: Minimum sublease rents		—		95
Net minimum sublease payments		1,971	$	106,548
Less: Amount representing interest		841
Present value of net minimum lease payments	$	1,130

Net rent expense for operating leases amounted to $10,231,000, $10,105,000, and $7,786,000 for the years ended August 31, 2004, 2003 and 2002, respectively.

8.    Credit Facility

Effective January 27, 2004, the Company amended its secured credit facility to increase the maximum facility commitment from $50,000,000 to $75,000,000 on a permanent basis. Additionally, the amendments revised select covenant calculations, including the fixed charge coverage ratio and redefined select definitions.

The facility expires on May 9, 2007 and is secured by certain cash accounts, accounts receivable, and inventory, which amounted to $104,893,000 as of August 31, 2004. Until maturity, the Company may borrow on a borrowing base formula as set forth in the facility. For Base Rate borrowings, interest is calculated at the greater of the Agent Bank’s prime rate or federal fund rate plus 1%, plus an applicable margin of .25% to .75%, which was 5.00% and 4.75% at August 31, 2004 and 2003, respectively. For Euro-Rate borrowings, interest is calculated at the LIBOR rate plus an applicable margin of 1.75% to 3.00%. The applicable margin varies with the Company’s facility leverage ratio calculation. As of August 31, 2004, $13,000,000 of Base-Rate borrowings and no Euro-Rate borrowings were outstanding under the agreement. As of August 31, 2003, $1,500,000 of Base Rate borrowings and $30,000,000 of Euro-Rate borrowings were outstanding under the agreement. $385,000 and $615,000 of letters of credit were outstanding under the agreement at August 31, 2004 and 2003, respectively. The weighted average interest rate for Base Rate borrowings for the years ended August 31, 2004 and 2003 was 4.8%, respectively. The weighted average interest rate for Euro-Rate borrowings was 4.1% for the fiscal years ending August 31, 2004 and 2003, respectively. The Company pays a commitment fee of 3/8% per annum on the unused balance of the facility.

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UNITED REFINING COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

9.    Long-Term Debt

During August 2004, the Company sold $200,000,000 of 10 ¹/2% Senior Unsecured Notes due 2012 (the “Senior Unsecured Notes”) for $197,342,000, resulting in debt discount of $2,658,000 which will be amortized over the life of the notes using the interest method. The net proceeds of the offering of $191,600,000 were used to retire all of its outstanding 10 ³/4% Senior Unsecured Notes due 2007, Series B, pay accrued interest of $3,700,000 and a redemption premium related thereto and to pay a dividend of $5,000,000 to the Company’s stockholder. A loss of $6,770,000 on the early extinguishment of debt was recorded consisting of a redemption premium of $3,228,000, a write-off of deferred financing costs of $1,990,000 and additional interest paid of $1,552,000. Such notes are fully and unconditionally guaranteed on a senior unsecured basis by all of the Company’s subsidiaries (see Footnote 17 to Consolidated Financial Statements).

Both the Indenture of the Senior Unsecured Notes and the facility (See Footnote 8 to Consolidated Financial Statements) require that the Company maintain certain financial covenants. The facility requires the Company to meet certain financial covenants, as defined in the facility, a minimum Fixed Charge Coverage Ratio and a minimum Consolidated Net Worth. In addition, the facility limits the amount the Company can distribute for capital and operating leases. Both the facility and the Indenture of the Senior Unsecured Notes restrict the amount of dividends payable and the incurrence of additional Indebtedness. As of August 31, 2004 the Company is currently in compliance with covenants under the facility and the Indenture.

A summary of long-term debt is as follows:

	August 31,
	2004		2003
	(in thousands)
Long-term debt:
10.50% Senior Unsecured Notes due August 15, 2012	$	197,365	$	—
10.75% Senior Unsecured Notes due June 9, 2007, Series B		—		180,135
Other long-term debt		2,583		2,775
		199,948		182,910
Less: Current installments of long-term debt		452		683
Total long-term debt, less current installments	$	199,496	$	182,227

The principal amount of long-term debt outstanding as of August 31, 2004, net of unamortized discount matures as follows:

Year ended August 31,
	(in thousands)
2005	$	452
2006		248
2007		(36	)
2008		(105	)
2009		(146	)
Thereafter		199,535
	$	199,948

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UNITED REFINING COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The following financing costs have been deferred and are being amortized to expense over the term of the related debt:

	August 31,
	2004		2003
	(in thousands)
Beginning balance	$	7,922	$	7,672
Current year additions		6,653		250
Total financing costs		14,575		7,922
Less:
Write-off of deferred financing costs		7,358		—
Accumulated amortization		494		4,959
	$	6,723	$	2,963

Amortization expense for the fiscal years ended August 31, 2004, 2003 and 2002 amounted to $902,000, $928,000, and $818,000, respectively.

10.    Employee Benefit Plans

Substantially all employees of the Company are covered by noncontributory defined benefit retirement plans. The benefits are based on each employee’s years of service and compensation. The Company’s policy is to contribute the minimum amounts required by the Employee Retirement Income Security Act of 1974 (ERISA), as amended. The assets of the plans are invested in an investment trust fund and consist of interest-bearing cash and bank common/collective trust funds.

In addition to the above, the Company provides certain post-retirement healthcare benefits to salaried and certain hourly employees. These post-retirement benefit plans are unfunded and the costs are shared by the Company and its retirees.

Net periodic pension cost and post-retirement healthcare benefit cost consist of the following components for the years ended August 31, 2004, 2003, and 2002:

	Pension Benefits									Other Post-Retirement Benefits
	2004			2003			2002			2004		2003		2002
	(in thousands)
Service cost	$	2,031		$	1,785		$	2,013		$	1,427	$	1,213	$	1,178
Interest cost on benefit obligation		3,210			2,948			2,848			2,396		2,290		1,920
Expected return on plan assets		(2,588	)		(2,332	)		(2,583	)		—		—		—
Amortization of transition obligation		140			140			140			597		597		597
Amortization and deferrals		583			250			207			507		401		146
Net periodic benefit cost	$	3,376		$	2,791		$	2,625		$	4,927	$	4,501	$	3,841

44

UNITED REFINING COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The following table summarizes the change in benefit obligations and fair values of plan assets for the years ended August 31, 2004 and 2003:

	Pension Benefits						Other Post-Retirement Benefits
	2004			2003			2004			2003
	(in thousands)
CHANGE IN BENEFIT OBLIGATION:
Benefit obligation @ beginning of year	$	49,171		$	44,702		$	36,851		$	32,707
Service cost		2,031			1,785			1,427			1,213
Interest cost		3,210			2,948			2,396			2,290
Medicare act subsidy effect		—			—			(3,940	)		—
Actuarial losses		3,527			1,027			4,371			1,714
Benefits paid		(1,400	)		(1,291	)		(1,124	)		(1,073	)
Benefit obligation @ end of year		56,539			49,171			39,981			36,851
CHANGE IN PLAN ASSETS:
Fair values of plan assets @ beginning of year		27,560			25,322			—			—
Actual return on plan assets		2,350			2,329			—			—
Company contributions		4,143			1,200			1,124			1,073
Benefits paid		(1,400	)		(1,291	)		(1,124	)		(1,073	)
Fair values of plan assets @ end of year		32,653			27,560			—			—
Funded status		23,886			21,611			39,981			36,851
Unrecognized net actuarial loss		(12,031	)		(8,617	)		(10,708	)		(10,785	)
Unrecognized prior service cost		(2,225	)		(2,457	)		—			—
Unrecognized transition obligation		(491	)		(631	)		(5,371	)		(5,968	)
Net amount recognized	$	9,139		$	9,906		$	23,902		$	20,098
AMOUNTS RECOGNIZED IN THE BALANCE SHEET CONSIST OF:
Accrued benefit cost	$	9,139		$	9,906
Additional minimum liability		6,515			4,808
Intangible asset		(2,716	)		(3,103	)
Accumulated other comprehensive loss		(3,799	)		(1,705	)
Net amount recognized	$	9,139		$	9,906

Note: For plans with assets less than the accumulated benefit obligation (ABO), the aggregate ABO is $48,307,000 while the aggregate asset value is $32,653,000.

WEIGHTED AVERAGE ASSUMPTIONS:
Discount rate	6.00	%	6.35	%	6.0	%	6.35	%
Expected return on plan assets	9.00	%	9.00	%
Rate of compensation increase	3.50	%	3.00	%

45

UNITED REFINING COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

For measurement purposes, the assumed annual rate of increase in the per capita cost of covered medical and dental benefits was 10% and 5%, respectively for 2004; the rates were assumed to decrease gradually to 5% for both medical and dental benefits until 2010 and remain at that level thereafter. The healthcare cost trend rate assumption has a significant effect on the amounts reported. To illustrate, a 1 percentage point change in the assumed healthcare cost trend rate would have the following effects:

	1% Point Increase		1% Point Decrease
Effect on total of service and interest cost components	$	702	$	(563	)
Effect on post-retirement benefit obligation		6,166		(5,124	)

A reconciliation of the above accrued benefit costs to the consolidated amounts reported on the Company’s balance sheets follows:

	August 31,
	2004			2003
	(in thousands)
Accrued pension benefits	$	9,139		$	9,906
Accrued other post-retirement benefits		23,902			20,098
		33,041			30,004
Current portion of above benefits, included in payrolls and benefits in accrued liabilities		(5,149	)		(4,211	)
Minimum pension liability, net of intangible asset		3,799			1,705
Supplemental pension and other deferred compensation benefits		711			900
Deferred retirement benefits	$	32,402		$	28,398

The pension plans weighted-average target allocation for the year ended August 31, 2005 and strategic asset allocation matrix as of August 31, 2004 and 2003 are as follows:

	Target Allocation		Plan Assets @ 8/31
Asset Category	2005		2004		2003
Equity Securities	55 – 75	%	67	%	69	%
Debt Securities	25 – 35	%	28	%	27	%
Real Estate	—	%	—	%	—	%
Cash/Cash Equivalents	0 – 10	%	5	%	4	%
			100	%	100	%

The investment policy for the plans is formulated by the Company’s Pension Plan Committee (the “Committee”). The Committee is responsible for adopting and maintaining the investment policy, managing the investment of plan assets and ensuring that the plans’ investment program is in compliance with all provisions of ERISA, as well as the appointment of any investment manager who is responsible for implementing the plans’ investment process.

In drafting a strategic asset allocation policy, the primary objective is to invest assets in a prudent manner to meet the obligations of the plans to the Company’s employees, their spouses and other beneficiaries, when the obligations come due. The stability and improvement of the plans’ funded status is based on the various reasons for which money is funded. Other factors that are considered include the characteristics of the plans’ liabilities and risk-taking preferences.

46

UNITED REFINING COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The asset classes used by the plan are the United States equity market, the international equity market, the United States fixed income or bond market and cash or cash equivalents. Plan assets are diversified to minimize the risk of large losses. Cash flow requirements are coordinated with the custodian trustees and the investment manager to minimize market timing effects. The asset allocation guidelines call for a maximum and minimum range for each broad asset class as noted above.

The target strategic asset allocation and ranges established under the asset allocation represents a long-term perspective. The Committee will rebalance assets to ensure that divergences outside of the permissible allocation ranges are minimal and brief as possible.

The net of investment manager fee asset return objective is to achieve a return earned by passively managed market index funds, weighted in the proportions identified in the strategic asset allocation matrix. Each investment manager is expected to perform in the top one-third of funds having similar objectives over a full market cycle.

The investment policy is reviewed by the Committee at least annually and confirmed or amended as needed.

The following contributions and benefit payments, which reflect expected future service, as appropriate, are expected to be paid:

Employer Contributions	Pension Benefits		Other Postretirement Benefits
			Gross		(Subsidy Receipts)
	(in thousands)
FYE 8/31/2005 (expected)	$	3,949	$	1,458	$	—
Expected Benefit Payments for the fiscal years ending August 31,
2005		1,631		1,458		—
2006		1,819		1,569		(79	)
2007		2,106		1,781		(126	)
2008		2,409		1,960		(146	)
2009		2,707		2,175		(162	)
2010—2014		18,697		14,001		(1,069	)

The pension plan contributions are deposited into the plans’ trusts, and the pension plan benefit payments are made from trust assets. For the postretirement benefit plan, the contributions and the benefit payments are the same and represent expected benefit amounts, which are paid from general assets.

The Company’s postretirement benefit plan is likely to be affected by The Medicare Prescription Drug, Improvement and Modernization Act of 2003 (the “Act”). Beginning in 2006, the Act provides a Federal subsidy payment to companies providing benefit plans that meet certain criteria regarding their generosity. The Company expects to receive those subsidy payments. The Company has accounted for the Act in accordance with FSP, which requires, in the Company’s case, recognition on August 31, 2004. The benefit obligation as of that date reflects the effect of the federal subsidy, and this amount is identified in the table reconciling the change in benefit obligation above. The estimated effect of the subsidy on cash flow is shown in the accompanying table of expected benefit payments above. The Act will not affect the net periodic postretirement benefit cost until the fiscal year ending August 31, 2005.

47

UNITED REFINING COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The Company’s deferred gain on settlement of past pension plan obligations amounted to $915,000 and $1,130,000 as of August 31, 2004 and 2003, respectively, and is being amortized over 23 years. The related amortization amounted to $215,000 for each of the years ended August 31, 2004, 2003 and 2002.

The Company also contributes to voluntary employee savings plans through regular monthly contributions equal to various percentages of the amounts invested by the participants. The Company’s contributions to these plans amounted to $567,000, $538,000, and $751,000 for the years ended August 31, 2004, 2003 and 2002, respectively.

11.    Income Taxes

Income tax expense (benefit) consists of:

	Year Ended August 31,
	2004			2003			2002
	(in thousands)
Federal:
Current	$	260		$	(521	)	$	(2,953	)
Deferred		5,375			(2,929	)		(9,019	)
		5,635			(3,450	)		(11,972	)
State:
Current		1,940			779			251
Deferred		(175	)		(699	)		(3,875	)
		1,765			80			(3,624	)
	$	7,400		$	(3,370	)	$	(15,596	)

Reconciliation of the differences between income taxes computed at the Federal statutory rate and the provision for income taxes attributable to income (loss) before income tax expense (benefit) is as follows:

	Year Ended August 31,
	2004			2003			2002
	(in thousands)
U. S. federal income taxes at the statutory rate of 34%	$	6,390		$	(2,937	)	$	(13,783	)
State income taxes, net of Federal benefit		1,037			(201	)		(2,338	)
Federal income tax audit		—			—			188
Nondeductible expenses		316			225			259
Prior period accrual adjustment		(67	)		(745	)		113
Other		(276	)		288			(35	)
Income tax attributable to income (loss) before income tax expense (benefit)	$	7,400		$	(3,370	)	$	(15,596	)

48

UNITED REFINING COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Deferred income tax liabilities (assets) are comprised of the following:

	August 31,
	2004			2003
	(in thousands)
Current deferred income tax liabilities (assets):
Inventory valuation	$	6,833		$	7,517
Accounts receivable allowance		(587	)		(641	)
Accrued liabilities		(2,462	)		(1,988	)
Other		135			269
		3,919			5,157
Deferred income tax liabilities (assets):
Property, plant and equipment		34,076			32,436
Accrued liabilities		(17,011	)		(15,769	)
Tax credits and carryforwards		(8,515	)		(13,862	)
State net operating loss carryforwards		(6,841	)		(6,963	)
Valuation allowance		162			416
Other		27			33
		1,898			(3,709	)
Net deferred income tax liability	$	5,817		$	1,448

The Company’s results of operations are included in the consolidated Federal tax return of the Parent (See Footnote 14 to Consolidated Financial Statements). The Company has a net operating loss carryfoward for regular tax purposes of $3,400,000, which will expire after 2022. For financial reporting purposes, valuation allowances of $162,000 and $416,000 at August 31, 2004 and 2003, respectively, were recognized for state net operating loss carryforwards not anticipated to be realized before expiration.

The Tax Reform Act of 1986 created a separate parallel tax system called the Alternative Minimum Tax (“AMT”) system. AMT is calculated separately from the regular U.S. Federal income tax and is based on a flat rate of 20% applied to a broader tax base. The higher of the two taxes is paid. The excess AMT over regular tax is a tax credit, which can be carried forward indefinitely to reduce regular tax liabilities in excess of AMT liabilities of future years. The Company generated AMT credits in prior years of approximately $6,500,000 that is available to offset the regular tax liability in the future years.

12.    Disclosures About Fair Value of Financial Instruments

The following methods and assumptions were used to estimate the fair value of each class of financial instrument for which it is practicable to estimate that value.

The carrying amount of cash and cash equivalents, trade accounts receivable, the revolving credit facility and current liabilities approximate fair value because of the short maturity of these instruments.

The fair value of long-term debt (See Footnote 9 to Consolidated Financial Statements) was determined using the fair market value of the individual debt instruments. As of August 31, 2004, the carrying amount and estimated fair value of these debt instruments approximated $199,948,000 and $192,103,000, respectively.

49

UNITED REFINING COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

13.    Contingencies

In addition to the environmental matters discussed in Footnote 15 to the Consolidated Financial Statements, the Company is a defendant in various claims, legal actions and complaints arising in the ordinary course of business. In the opinion of management, all such matters are adequately covered by insurance, or if not so covered, are without merit or are of such kind, or involve such amounts that an unfavorable disposition would not have a material adverse effect on the consolidated financial position of the Company.

14.    Transactions with Affiliated Companies

On December 21, 2001, the Company acquired the operations and working capital assets of Country Fair (See Footnote 5 to Consolidated Financial Statements). The fixed assets of Country Fair were acquired by related entities controlled by John A. Catsimatidis, the indirect sole shareholder of the Company. These assets are being leased to the Company at an annual aggregate rental of approximately $5,200,000, which management, based on an independent third party valuation believes is fair, over a period ranging from 10 to 20 years. During the fiscal years ended August 31, 2004, 2003 and 2002, $5,215,000, $5,215,000, and $3,481,000 of rent payments were made to these related entities. The Company is not a guarantor on the underlying mortgages on the properties.

Concurrent with the above acquisition of Country Fair, the Company entered into a management agreement with a non-subsidiary affiliate to operate and manage 18 of the retail units owned by the non-subsidiary affiliate on a turn-key basis. For the years ended August 31, 2004, 2003 and 2002, the Company billed the affiliate $779,000, $761,000, and $525,000 for management fees and overhead expenses incurred in the management and operation of the 18 retail units which amount was deducted from expenses. As of August 31, 2004 and 2003, the Company owed the affiliate $28,000 and $229,000 under the terms of the agreement.

Effective June 1, 2001, the Company sold certain intangible assets to an unrelated entity and realized a $3,000,000 gain on the transaction which was recorded in other income. Concurrent with the sale, the Company entered into a 50% joint venture with the entity for the marketing of asphalt products. The joint venture is accounted for using the equity method of accounting. As part of its investment in the joint venture, the Company transferred $1,013,000 of inventory to it. For the years ended August 31, 2004, 2003 and 2002, net sales to the joint venture amounted to $9,209,000, $5,373,000, and $4,756,000, respectively. As of August 31, 2004 and 2003, the Company had a receivable from the joint venture of $651,000 and $1,529,000, respectively, under the terms of the agreement.

On September 29, 2000, the Company sold 42 retail units to an affiliate for $23,870,000. Concurrent with this asset sale, the Company terminated the leases on 8 additional retail locations which it had previously leased from a non-subsidiary affiliate. The Company has entered into a management agreement with the non-subsidiary affiliate to operate and manage the retail units owned by the non-subsidiary affiliate on a turnkey basis. For the years ended August 31, 2004, 2003 and 2002, the Company billed the affiliate $1,524,000, $1,554,000, and $1,436,000, respectively, for management fees and overhead expenses incurred in the management and operation of the 50 retail units, which amount was deducted from expenses. For the fiscal years ended August 31, 2004, 2003 and 2002, net sales to the affiliate amounted to $55,592,000, $44,816,000, and $35,617,000, respectively. As of August 31, 2004 and 2003, the Company owed the affiliate $310,000 and $318,000, respectively, under the terms of the agreement.

The Company paid a service fee relating to certain costs incurred by its Parent for the Company’s New York office. During the years ended August 31, 2004, 2003 and 2002, such fees amounted to approximately $984,000, $1,000,000, and $1,000,000, respectively.

50

UNITED REFINING COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The Company joins with the Parent and the Parent’s other subsidiaries in filing a Federal income tax return on a consolidated basis. Income taxes are calculated on a separate return basis with consideration of the Tax Sharing Agreement between the Parent and its subsidiaries. Amounts related to the Tax Sharing Agreement for the utilization by the Company of certain tax attributes of the Parent and other subsidiaries related to tax years ended August 31, 1997 through August 31, 2001, totaled $609,000 and have been recorded as a distribution in fiscal 2002. As of August 31, 2004 and 2003, the Company owed the Parent $445,000 under the terms of the Tax Sharing Agreement.

The Company paid an insurance premium of $102,000 during the fiscal year ending August 31, 2003 on behalf of a non-subsidiary affiliate which is included in amounts due from affiliated companies at August 31, 2003. This receivable was subsequently paid by the affiliate.

15.    Environmental Matters And Other Contingencies

The Company is subject to Federal, state and local laws and regulations relating to pollution and protection of the environment such as those governing releases of certain materials into the environment and the storage, treatment transportation, disposal and clean-up of wastes, including, but not limited to, the Federal Clean Water Act, as amended, the Clean Air Act, as amended, the Resource Conservation and Recovery Act of 1976, as amended, the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended, and analogous state and local laws and regulations.

Due to the nature of the Company’s business, the Company is and will continue to be subject to various environmental claims, legal actions, and complaints. In the opinion of management, all other current matters are without merit or are of such kind or involve such amounts that an unfavorable disposition would not have a material adverse effect on the consolidated financial position or operations of the Company.

In addition to the foregoing proceedings, the Company and its subsidiaries are from time to time parties to various legal proceedings that arise in the ordinary course of their respective business operations. These proceedings include various administrative actions relating to federal, state and local environmental laws and regulations. The Company believes that if these legal proceedings in which it is currently involved are determined against the Company, they would not result in a material adverse effect on the Company’s operations or its consolidated financial condition. In the opinion of management, all such matters are adequately covered by insurance, or if not so covered, are without merit or are of such kind, or involve such amounts that an unfavorable disposition would not have a material adverse effect on the consolidated financial position or results of operations of the Company.

The management of the Company believes that remediation and related environmental costs incurred during the normal course of business are not expected to be material.

16.    Segments of Business

The Company is a petroleum refiner and marketer in its primary market area of Western New York and Northwestern Pennsylvania. Operations are organized into two business segments: wholesale and retail.

The wholesale segment is responsible for the acquisition of crude oil, petroleum refining, supplying petroleum products to the retail segment and the marketing of petroleum products to wholesale and industrial

51

UNITED REFINING COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

customers. The retail segment sells petroleum products under the Kwik Fill^®, Citgo^® and Keystone^® brand names at a network of Company-operated retail units. and convenience and grocery items through Company-owned gasoline stations and convenience stores under the, Red Apple Food Mart^® and Country Fair^® brand names.

The accounting policies of the reportable segments are the same as those described in Footnote 1 to Consolidated Financial Statements. Intersegment revenues are calculated using estimated market prices and are eliminated upon consolidation. Summarized financial information regarding the Company’s reportable segments is presented in the following table.

	Year Ended August 31,
	2004		2003		2002
	(in thousands)
Net Sales
Retail	$	777,624	$	718,904	$	580,078
Wholesale		711,313		571,447		471,938
	$	1,488,937	$	1,290,351	$	1,052,016
Intersegment Sales
Wholesale	$	273,726	$	235,724	$	182,834
Operating Income (Loss)
Retail	$	5,163	$	10,627	$	4,656
Wholesale		43,354		2,496		(25,356	)
	$	48,517	$	13,123	$	(20,700	)
Total Assets
Retail	$	123,069	$	119,709	$	127,712
Wholesale		243,313		241,719		243,728
	$	366,382	$	361,428	$	371,440
Depreciation and Amortization
Retail	$	3,970	$	3,923	$	3,638
Wholesale		8,483		8,296		8,136
	$	12,453	$	12,219	$	11,774
Capital Expenditures
Retail	$	3,559	$	2,456	$	4,552
Wholesale		7,206		6,768		5,747
	$	10,765	$	9,224	$	10,299

17.    Subsidiary Guarantors

Certain of United Refining Company’s (the “issuer”) subsidiaries function as guarantors under the terms of the $200,000,000 Senior Unsecured Note Indenture due August 15, 2012. These subsidiaries were also guarantors under the terms of the $200,000,000 Senior Unsecured Notes due June 9, 2007, which were retired in August 2004. Financial information for the Company’s wholly-owned subsidiary guarantors (see Footnote 9 to Consolidated Financial Statements) is as follows:

52

UNITED REFINING COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

CONDENSED CONSOLIDATING BALANCE SHEETS

(in thousands)

	August 31, 2004
	Issuer			Guarantors			Eliminations			Consolidated
Assets
Current:
Cash and cash equivalents	$	4,709		$	6,843		$	—		$	11,552
Accounts receivable, net		33,459			11,137			—			44,596
Inventories		54,481			21,142			—			75,623
Prepaid expenses and other assets		12,090			5,157			—			17,247
Amounts due from affiliated companies		—			—			—			—
Intercompany		87,468			19,223			(106,691	)		—
Total current assets		192,207			63,502			(106,691	)		149,018
Property, plant and equipment, net		115,363			69,342			—			184,705
Investment in affiliated company		846			—			—			846
Deferred financing costs, net		6,723			—			—			6,723
Goodwill and other non-amortizable assets		—			11,849			—			11,849
Amortizable intangible assets		—			3,103			—			3,103
Deferred turnaround costs & other assets		9,462			1,847			(1,171	)		10,138
Deferred income taxes		—			—			—			—
	$	324,601		$	149,643		$	(107,862	)	$	366,382
Liabilities and Stockholder’s Equity
Current:
Revolving credit facility	$	13,000		$	—		$	—		$	13,000
Current installments of long-term debt		(181	)		633			—			452
Accounts payable		14,530			14,202			—			28,732
Accrued liabilities		11,100			5,200			—			16,300
Income taxes payable		958			(163	)		—			795
Sales, use and fuel taxes payable		16,217			3,249			—			19,466
Deferred income taxes		4,363			(444	)		—			3,919
Amounts due to affiliated companies		(206	)		338			—			132
Intercompany		—			106,691			(106,691	)		—
Total current liabilities		59,781			129,706			(106,691	)		82,796
Long term debt: less current installments		198,076			1,420			—			199,496
Deferred income taxes		(1,845	)		3,743			—			1,898
Deferred gain on settlement of pension plan obligations		915			—			—			915
Deferred retirement benefits		31,236			1,166			—			32,402
Other noncurrent liabilities		—			1,769			—			1,769
Total liabilities		288,163			137,804			(106,691	)		319,276
Commitment and contingencies
Stockholder’s equity
Common stock, $.10 par value per share—shares authorized 100; issued and outstanding 100		—			18			(18	)		—
Additional paid-in capital		7,150			10,651			(1,153	)		16,648
Retained earnings (deficit)		31,536			1,226			—			32,762
Accumulated other comprehensive loss		(2,248	)		(56	)		—			(2,304	)
Total stockholder’s equity		36,438			11,839			(1,171	)		47,106
	$	324,601		$	149,643		$	(107,862	)	$	366,382

53

UNITED REFINING COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

	August 31, 2003
	Issuer			Guarantors			Eliminations			Consolidated
Assets
Current:
Cash and cash equivalents	$	3,383		$	10,436		$	—		$	13,819
Accounts receivable, net		31,780			10,952			—			42,732
Inventories		55,435			20,688			—			76,123
Prepaid expenses and other assets		9,453			883			—			10,336
Amounts due from affiliated companies		1,186			(547	)		—			639
Intercompany		88,123			19,467			(107,590	)		—
Total current assets		189,360			61,879			(107,590	)		143,649
Property, plant and equipment, net		117,149			69,730			—			186,879
Investment in affiliated company		574			—			—			574
Deferred financing costs, net		2,963			—			—			2,963
Goodwill and other non-amortizable assets		—			11,849			—			11,849
Amortizable intangible assets		—			3,588			—			3,588
Deferred turnaround costs & other assets		8,204			1,184			(1,171	)		8,217
Deferred income taxes		7,455			(3,746	)		—			3,709
	$	325,705		$	144,484		$	(108,761	)	$	361,428
Liabilities and Stockholder’s Equity
Current:
Revolving credit facility	$	31,500		$	—		$	—		$	31,500
Current installments of long-term debt		89			594			—			683
Accounts payable		19,906			15,205			—			35,111
Accrued liabilities		11,708			3,999			—			15,707
Income taxes payable		—			—			—			—
Sales, use and fuel taxes payable		14,891			2,962			—			17,853
Deferred income taxes		5,123			34			—			5,157
Amounts due to affiliated companies		—			—			—			—
Intercompany		—			107,590			(107,590	)		—
Total current liabilities		83,217			130,384			(107,590	)		106,011
Long term debt: less current installments		180,375			1,852			—			182,227
Deferred income taxes		1,037			(1,037	)		—			—
Deferred gain on settlement of pension plan obligations		1,130			—			—			1,130
Deferred retirement benefits		27,174			1,224			—			28,398
Other noncurrent liabilities		—			1,687			—			1,687
Total liabilities		292,933			134,110			(107,590	)		319,453
Commitment and contingencies
Stockholder’s equity
Common stock, $.10 par value per share—shares authorized 100; issued and outstanding 100		—			18			(18	)		—
Additional paid-in capital		7,150			10,651			(1,153	)		16,648
Retained earnings (deficit)		26,662			(295	)		—			26,367
Accumulated other comprehensive loss		(1,040	)		—			—			(1,040	)
Total stockholder’s equity		32,772			10,374			(1,171	)		41,975
	$	325,705		$	144,484		$	(108,761	)	$	361,428

54

UNITED REFINING COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS

(in thousands)

	Year Ended August 31, 2004
	Issuer			Guarantors			Eliminations			Consolidated
Net sales	$	985,039		$	782,500		$	(278,602	)	$	1,488,937
Costs of goods sold		917,155			677,606			(278,602	)		1,316,159
Gross profit (loss)		67,884			104,894			—			172,778
Expenses:
Selling, general and administrative expenses		16,898			94,910			—			111,808
Depreciation and amortization expenses		8,311			4,142			—			12,453
Total operating expenses		25,209			99,052			—			124,261
Operating income (loss)		42,675			5,842			—			48,517
Other income (expense):
Interest expense, net		(17,386	)		(4,037	)		—			(21,423	)
Other, net		(2,732	)		531			—			(2,201	)
Equity in net earnings of affiliate		672			—			—			672
Loss on early extinguishment of debt		(6,770	)		—			—			(6,770	)
		(26,216	)		(3,506	)		—			(29,722	)
Income (loss) before income tax expense (benefit)		16,459			2,336			—			18,795
Income tax expense (benefit):
Current		1,979			221			—			2,200
Deferred		4,606			594			—			5,200
		6,585			815			—			7,400
Net income (loss)	$	9,874		$	1,521		$	—		$	11,395

55

UNITED REFINING COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

	Year Ended August 31, 2003
	Issuer			Guarantors			Eliminations			Consolidated
Net sales	$	807,171		$	723,384		$	(240,204	)	$	1,290,351
Costs of goods sold		781,053			617,733			(240,204	)		1,158,582
Gross profit (loss)		26,118			105,651			—			131,769
Expenses:
Selling, general and administrative expenses		16,253			90,174			—			106,427
Depreciation and amortization expenses		8,123			4,096			—			12,219
Total operating expenses		24,376			94,270			—			118,646
Operating income (loss)		1,742			11,381			—			13,123
Other income (expense):
Interest expense, net		(17,176	)		(4,164	)		—			(21,340	)
Other, net		(1,633	)		342			—			(1,291	)
Equity in net earnings of affiliate		867			—			—			867
Loss on early extinguishment of debt		—			—			—			—
		(17,942	)		(3,822	)		—			(21,764	)
Income (loss) before income tax expense (benefit)		(16,200	)		7,559			—			(8,641	)
Income tax expense (benefit):
Current		(3,542	)		3,800			—			258
Deferred		(3,207	)		(421	)		—			(3,628	)
		(6,749	)		3,379			—			(3,370	)
Net income (loss)	$	(9,451	)	$	4,180		$	—		$	(5,271	)

56

UNITED REFINING COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

	Year Ended August 31, 2002
	Issuer			Guarantors			Eliminations			Consolidated
Net sales	$	654,772		$	584,801		$	(187,557	)	$	1,052,016
Costs of goods sold		656,695			497,507			(187,557	)		966,645
Gross profit (loss)		(1,923	)		87,294			—			85,371
Expenses:
Selling, general and administrative expenses		16,670			77,627			—			94,297
Depreciation and amortization expenses		7,964			3,810			—			11,774
Total operating expenses		24,634			81,437			—			106,071
Operating income (loss)		(26,557	)		5,857			—			(20,700	)
Other income (expense):
Interest expense, net		(15,544	)		(4,190	)		—			(19,734	)
Other, net		(1,926	)		581			—			(1,345	)
Equity in net earnings of affiliate		1,242			—			—			1,242
Loss on early extinguishment of debt		—			—			—			—
		(16,228	)		(3,609	)		—			(19,837	)
Income (loss) before income tax expense (benefit)		(42,785	)		2,248			—			(40,537	)
Income tax expense (benefit):
Current		(3,840	)		1,138			—			(2,702	)
Deferred		(12,939	)		45			—			(12,894	)
		(16,779	)		1,183			—			(15,596	)
Net income (loss)	$	(26,006	)	$	1,065		$	—		$	(24,941	)

57

UNITED REFINING COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS

(in thousands)

	Year Ended August 31, 2004
	Issuer			Guarantors			Eliminations		Consolidated
Net cash provided by (used in) operating activities	$	25,204		$	1,337		$	—	$	26,541
Cash flows from investing activities:
Purchase of business, net of cash acquired		—			—			—		—
Dividends received		400			—			—		400
Additions to property, plant and equipment		(6,720	)		(3,355	)		—		(10,075	)
Additions to turnaround costs		(4,517	)		(843	)		—		(5,360	)
Proceeds from asset dispositions		13			19			—		32
Net cash used in investing activities		(10,824	)		(4,179	)		—		(15,003	)
Cash flows from financing activities:
Net (reductions) borrowings on revolving credit facility		(18,500	)		—			—		(18,500	)
Proceeds from issuance of long-term debt		197,342			—			—		197,342
Principal reductions of long-term debt		(180,243	)		(751	)		—		(180,994	)
Dividends		(5,000	)		—			—		(5,000	)
Deferred financing costs		(6,653	)		—			—		(6,653	)
Net cash (used in) provided by financing activities		(13,054	)		(751	)		—		(13,805	)
Net increase (decrease) in cash and cash equivalents		1,326			(3,593	)		—		(2,267	)
Cash and cash equivalents, beginning of year		3,383			10,436			—		13,819
Cash and cash equivalents, end of year	$	4,709		$	6,843		$	—	$	11,552

58

UNITED REFINING COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

	Year Ended August 31, 2003
	Issuer			Guarantors			Eliminations		Consolidated
Net cash provided by (used in) operating activities	$	2,026		$	3,366		$	—	$	5,392
Cash flows from investing activities:
Purchase of business, net of cash acquired		—			—			—		—
Dividends received		2,000			—			—		2,000
Additions to property, plant and equipment		(6,397	)		(1,646	)		—		(8,043	)
Additions to turnaround costs		(5,361	)		(258	)		—		(5,619	)
Proceeds from asset dispositions		17			—			—		17
Net cash used in investing activities		(9,741	)		(1,904	)		—		(11,645	)
Cash flows from financing activities:
Net (reductions) borrowings on revolving credit facility		7,186			—			—		7,186
Proceeds from issuance of long-term debt		—			—			—		—
Principal reductions of long-term debt		(92	)		(287	)		—		(379	)
Dividends		—			—			—		—
Deferred financing costs		(250	)		—			—		(250	)
Net cash (used in) provided by financing activities		6,844			(287	)		—		6,557
Net increase (decrease) in cash and cash equivalents		(871	)		1,175			—		304
Cash and cash equivalents, beginning of year		4,254			9,261			—		13,515
Cash and cash equivalents, end of year	$	3,383		$	10,436		$	—	$	13,819

59

UNITED REFINING COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

	Year Ended August 31, 2002
	Issuer			Guarantors			Eliminations		Consolidated
Net cash provided by (used in) operating activities	$	(41,140	)	$	24,097		$	—	$	(17,043	)
Cash flows from investing activities:
Purchase of business, net of cash acquired		—			(16,900	)		—		(16,900	)
Dividends received		1,064			—			—		1,064
Additions to property, plant and equipment		(5,251	)		(3,810	)		—		(9,061	)
Additions to turnaround costs		(1,415	)		—			—		(1,415	)
Proceeds from asset dispositions		—			3			—		3
Net cash used in investing activities		(5,602	)		(20,707	)		—		(26,309	)
Cash flows from financing activities:
Net (reductions) borrowings on revolving credit facility		24,314			—			—		24,314
Proceeds from issuance of long-term debt		—			—			—		—
Principal reductions of long-term debt		(71	)		(156	)		—		(227	)
Dividends		(2,130	)		—			—		(2,130	)
Deferred financing costs		(314	)		—			—		(314	)
Net cash (used in) provided by financing activities		21,799			(156	)		—		21,643
Net increase (decrease) in cash and cash equivalents		(24,943	)		3,234			—		(21,709	)
Cash and cash equivalents, beginning of year		29,197			6,027			—		35,224
Cash and cash equivalents, end of year	$	4,254		$	9,261		$	—	$	13,515

60

UNITED REFINING COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

18.    Quarterly Financial Data (unaudited)

	Net Sales		Gross Profit		Net Income (Loss)
	(in thousands)
2004
First Quarter	$	330,815	$	43,811	$	4,457
Second Quarter		326,965		36,877		527
Third Quarter		374,320		48,426		7,158
Fourth Quarter		456,837		43,664		(747	)
2003
First Quarter	$	293,305	$	27,986	$	(4,218	)
Second Quarter		311,429		41,542		3,662
Third Quarter		331,124		27,690		(4,808	)
Fourth Quarter		354,493		34,551		93

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ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.

NONE

ITEM 9A.    CONTROLS AND PROCEDURES

(a) Based on an evaluation of the Company’s disclosure controls and procedures (as defined in Rules 13(a)– 15(e) and 15(d)–15(e) of the Securities Exchange Act of 1934, as amended), as of the end of the Company’s fiscal year ended August 31, 2004, the Company’s Chief Executive Officer and Chief Financial Officer (its principal executive officer and principal financial officer, respectively) have concluded that the Company’s disclosure controls and procedures were effective.

(b) There have not been any significant changes in the Company’s internal controls over financial reporting that occurred during the Company’s fiscal quarter ended August 31, 2004 that has materially affected, or is reasonably likely to materially affect, the Company’s internal controls over financial reporting.

ITEM 9B.    OTHER INFORMATION

NONE

PART III

ITEM 10.    DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.

Set forth below is certain information as of November 24, 2004 with respect to all directors and executive officers of the Company.

Name	Age	Position
John A. Catsimatidis	56	Chairman of the Board, Chief Executive Officer, Director
Myron L. Turfitt	52	President, Chief Operating Officer, Director
Thomas C. Covert	70	Vice Chairman and Director
Ashton L. Ditka	63	Senior Vice President—Marketing
Thomas E. Skarada	62	Vice President—Refining
Frederick J. Martin, Jr.	50	Vice President—Supply and Transportation
James E. Murphy	59	Vice President and Chief Financial Officer
John R. Wagner	45	Vice President, General Counsel and Secretary
Dennis E. Bee, Jr.	62	Treasurer
Martin R. Bring	61	Director
Evan Evans	79	Director
Douglas Lemmonds	57	Director
Andrew Maloney	72	Director
Dennis Mehiel	61	Director
Kishore Lall	57	Director

John A. Catsimatidis has been Chairman of the Board and Chief Executive Officer since February 1986, when his wholly-owned company, United Acquisition Corp., purchased our parent. He also served as President from February 1986 until September 1996. He also serves as Chairman of the Board, Chief Executive Officer, President, and was the founder of Red Apple Group, Inc. (a holding company for certain businesses, including corporations which operate supermarkets in New York); Chief Executive Officer and Director of Gristede’s Foods, Inc., a public company whose common stock is listed on the American Stock Exchange and operates supermarkets in New York; a director of News Communications, Inc., a public company whose stock is traded over-the-counter; and Fonda Paper Company, Inc., a privately held company.

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Myron L. Turfitt has been President and Chief Operating Officer since September 1996. From June 1987 to September 1996 he was Chief Financial Officer and Executive Vice President. From August 1983 until June 1987 he was Senior Vice President—Finance and from July 1981 to August 1983, Mr. Turfitt held the position of Vice President, Accounting and Administration. Mr. Turfitt is a CPA with over 28 years of financial and operations experience in all phases of the petroleum business including exploration and production, refining and retail marketing. His experience covers both fully-integrated major oil companies and large independents.

Thomas C. Covert has been Vice Chairman since September 1996. From December 1987 to September 1996 Mr. Covert was Executive Vice President and Chief Operating Officer and from June 1986 to December 1987 he was Executive Vice President—Manufacturing. Mr. Covert was Executive Vice President of Prudential Energy Company from 1983 until June 1986. Prior thereto Mr. Covert was Vice President—Refining of Coastal Corporation. Mr. Covert is a petroleum expert with over 41 years of experience in the international and domestic petroleum industry. He is experienced in all phases of integrated oil company operations including crude oil and gas production, refining, marketing, marine and pipeline.

Ashton L. Ditka has been Senior Vice President—Marketing since July 1990. From December 1989 to July 1990 he was Vice President—Wholesale & Retail Marketing and from August 1976 until December 1989 he was Vice President—Wholesale Marketing. Mr. Ditka has over 36 years of experience in the petroleum industry, including 11 years in retail marketing with Atlantic Richfield Company.

Thomas E. Skarada has been Vice President—Refining since February 1996. From September 1994 to February 1996 he was Assistant Vice President—Refining and from March 1993, when he joined us, to September 1994 he was Director of Regulatory Compliance. Over his 36 year refining and marketing career, Mr. Skarada has worked in virtually every segment of the downstream business including supply, distribution, refinery operations, economics, planning, research and development. He has 18 years of managerial experience with Sun Refining and Marketing Co. and one year consulting with Muse Stancil and Co. in Dallas, Texas.

Frederick J. Martin, Jr. has been Vice President—Supply and Transportation since February 1993. From 1980 to January 1993 he held other positions with us involving transportation, product supply, crude supply and pipeline and terminal administration.

James E. Murphy has been Chief Financial Officer since January 1997. He was Vice President—Finance from April 1995 to December 1996 and since May 1982 has held other accounting and internal auditing positions with us, including Director of Internal Auditing since April 1986. Prior to joining us, Mr. Murphy had over 10 years experience in accounting and auditing with banking, public accounting and manufacturing companies.

John R. Wagner has been Vice President, General Counsel and Secretary since August 1997. Prior to joining us, Mr. Wagner served as Counsel to Dollar Bank, F.S.B. from 1988 to August 1997.

Dennis E. Bee, Jr. has been Treasurer since May 1988. Prior thereto and since he joined us in 1977, Mr. Bee held various positions in the accounting department including Assistant Treasurer from July 1982 to May 1988.

Martin R. Bring has served as a Director since 1988. He has also been a stockholder in the Anderson, Kill & Olick, P.C., a New York law firm since February 2002. Prior thereto Mr. Bring was a partner in the law firm of Wolf, Block, Schorr and Solis-Cohen LLP, a Philadelphia, Pennsylvania law firm and its predecessor law firm for more than 5 years. He also serves as a director for Gristede’s Foods, Inc., a public company whose common stock is listed on the American Stock Exchange and operates supermarkets in New York. Effective November 22, 2004, Mr. Bring will be joining the law office of Ellenoff Grossman & Schole, LLP as a partner.

Evan Evans has served as a Director since 1997. He has also been the Chairman of Holvan Properties, Inc., a privately owned petroleum industry consulting firm since 1983; a director of U.S. Energy Systems, Inc., a public company whose common stock is quoted on the Nasdaq SmallCap Market.

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Douglas Lemmonds has served as a Director since 1997. He has also served as Executive Vice President at SunTrust Bank (Washington D.C.) since 2002. From May 1996 to 2002 he served as Managing Director and the Chief Operating Officer, Private Banking-Americas of the Deutsche Bank Group. Private Banking-Americas operates across four separate legal entities, including a registered investment advisor, a broker-dealer, a trust company and a commercial bank. From June 1991 to May 1996 Mr. Lemmonds was the Regional Director of Private Banking of the Northeast Regional Office of the Bank of America and from August 1973 to June 1991 he held various other positions with Bank of America.

Andrew Maloney has served as a Director since 1997. He has also been counsel to De Feis O’Connell & Rose, a New York law firm since January 2003. From April 1998 to December 2002 Mr. Maloney was counsel to Kramer Levin Naftalis & Frankel LLP, a New York law firm. From December 1992 to April 1998 was a partner at Brown & Wood LLP, a New York law firm. From June 1986 to December 1992 he was the United States Attorney for the Eastern District of New York.

Dennis Mehiel has served as a Director since 1997. He has also been Chairman and Chief Executive Officer of The Fonda Group, Inc. since 1988. Since 1966 he has been the Chairman of Four M, a converter and seller of interior packaging, corrugated sheets and corrugated containers which he co-founded, and since 1977 (except during a leave of absence from April 1994 through July 1995) he has been the Chief Executive Officer of Four M. Mr. Mehiel is also the Chairman of MannKraft Corporation, a manufacturer of corrugated containers, and Chief Executive Officer and Chairman of Creative Expressions, Group, Inc.

Kishore Lall has served as a Director since 1997. He has also been Chief Financial Officer of Gristede’s Foods, Inc. since August 2003 and Executive Vice President—Finance and Administration and Secretary of Gristede’s Foods, Inc. since May 2002. He has also served as a Director of Gristede’s Foods, Inc. since 1997. From January 1997 to October 1997 he served as a consultant to Red Apple Group, Inc. From June 1994 to December 1996 has was a private investor. From January 1991 to May 1994 he was Senior Vice President and Head of Commercial Banking of ABN AMRO Bank (New York branch).

Audit Committee

We do not have a class of securities listed on a national securities exchange or national securities association subject to the requirements of Rule 10A-3 of the Securities Exchange Act of 1934, as amended. Consequently, the Company does not have an audit committee at this time, and has not designated an audit committee financial expert. However, the Company is reviewing whether it would be appropriate to appoint an audit committee consisting of independent members of its board of directors.

Code Of Ethics

We have adopted a Code of Ethics pursuant to Section 406 of the Sarbanes-Oxley Act of 2002.

Section 16(a) Beneficial Ownership Reporting Compliance

Not Applicable

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ITEM 11.    EXECUTIVE COMPENSATION

The following table sets forth for the three fiscal years ended August 31, 2002, 2003 and 2004 the compensation paid by the Company to its Chairman of the Board and Chief Executive Officer and each of the four other executive officers of the Company whose salary and bonus exceeded $100,000 for the fiscal year ended August 31, 2004.

SUMMARY COMPENSATION TABLE

	Year	Annual Compensation				Other Annual Compensation ($)(1)		Other Compensation ($)(2)
Name & Principal Position		Salary ($)		Bonus ($)
John A. Catsimatidis	2004	$	360,000	$	395,000	$	—	$	5,579
Chairman of the Board &	2003		360,000		308,000		—		1,602
Chief Executive Officer	2002		360,000		355,000		—		7,864
Myron L. Turfitt	2004	$	235,000	$	540,000	$	4,024	$	3,509
President &	2003		235,000		260,000		5,372		1,172
Chief Operating Officer	2002		235,000		300,000		5,460		6,231
Ashton L. Ditka	2004	$	163,020	$	65,000	$	2,827	$	3,786
Senior Vice President	2003		158,400		7,920		1,932		2,705
Marketing	2002		158,817		25,000		2,117		7,530
Thomas E. Skarada	2004	$	136,982	$	65,000	$	7,044	$	3,124
Vice President	2003		133,100		6,655		5,507		2,677
Refining	2002		133,604		25,000		6,813		6,235
Frederick J. Martin, Jr.	2004	$	117,531	$	25,000	$	6,137	$	1,528
Vice President	2003		114,200		5,710		6,530		1,611
Supply & Transportation	2002		114,534		25,000		6,409		4,586

(1) Amounts include automobile allowances.

(2) Amounts include Company matching contributions under the Company’s 401(K) Incentive Savings Plan for fiscal year2002, September through December 2002 and May through August 2004; and health and term life insurance benefits.

Pension Plan

The Company maintains a defined benefit pension plan for eligible employees. The following table shows estimated annual benefits payable upon retirement in specified compensation categories and years of service classifications.

Pension Plan Table

	Years of Service
Average Earnings	15		20		25		30		35
$100,000	$	17,036	$	22,714	$	28,393	$	34,071	$	39,750
$125,000		21,723		28,964		36,205		43,446		50,687
$150,000		26,411		35,214		44,018		52,821		61,625
$200,000 or more		30,161		40,214		50,268		60,321		70,375

The benefit formula is based on the average earnings of the participant for the three years in which such participant’s earnings were the highest. Earnings include salary and bonus up to a maximum of $205,000 per year. Benefits are calculated by multiplying the sum of (a) 1.1% of average earnings up to the Social Security

65

compensation base, plus (b) 1.25% of average earnings in excess of the Social Security compensation base, by (c) the number of years of service. Payments of retirement benefits are not reduced by any Social Security benefits received by the participant. Effective May 2001, for purposes of calculating retirement benefits, the Company has fixed the Social Security compensation base at $76,200.

Assuming that the following officers continue to be employed by the Company until they reach age 65, their credited years of service will be as follows:

Name of Individual	Current Years of Service	Years of Service At Age 65
John A. Catsimatidis	18	27
Myron L. Turfitt	26	39
Ashton L. Ditka	28	30
Thomas E. Skarada	11	14
Frederick J. Martin	24	39

Compensation of Directors

Non-officer directors receive a stipend of $15,000 per year and $1,000 for each meeting attended.

Employment and Consulting Agreements

Mr. Thomas C. Covert has entered into a Deferred Compensation Agreement with us pursuant to which since the date of his retirement on September 1, 1996, we have been paying Mr. Covert a retirement benefit at the rate of approximately $12,300 per year. The benefit is payable to Mr. Covert until his death, whereupon Mr. Covert’s surviving spouse, if any, is entitled to a benefit of approximately $6,150 per year until her death.

We do not have any employment agreements with our officers or employees.

ITEM 12.    SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

AND RELATED STOCKHOLDER MATTERS.

The following table sets forth certain information regarding ownership of Common Stock on November 24, 2004 by: (i) each stockholder known to the Company to own beneficially, directly or indirectly, more than 5% of the outstanding shares of Common Stock; (ii) each of the Company’s directors; and (iii) all officers and directors of the Company as a group. The Company believes that ownership of the shares by the persons named below is both of record and beneficial and such persons have sole voting and investing power with respect to the shares indicated.

Name and Address of Beneficial Owner	Number of Shares	Percent of Class
John A. Catsimatidis 823 Eleventh Avenue New York, NY 10019	100	100	%
All officers and directors as a group (15 persons)	100	100	%

ITEM 13.    CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

On December 21, 2001, we acquired the operations and working capital assets of Country Fair (see Note 5 to Consolidated Financial Statements, Item 8). The fixed assets of Country Fair were acquired by related entities controlled by John A. Catsimatidis, our indirect sole shareholder. These assets are being leased to us at an annual aggregate rental of approximately $5,200,000, which management, based on an independent third party valuation believes is fair, over a period ranging from 10 to 20 years. During the fiscal years ended August 31, 2004, 2003

66

and 2002, $5,215,000, $5,215,000, and $3,481,000 of rent payments were made to these related entities. We are not a guarantor on the underlying mortgages on the properties.

Concurrent with the above acquisition of Country Fair, we entered into a management agreement with a non-subsidiary affiliate to operate and manage 18 of the retail units owned by the non-subsidiary affiliate on a turn-key basis. For the years ended August 31, 2004, 2003 and 2002, we billed the affiliate $779,000, $761,000, and $525,000 for management fees and overhead expenses incurred in the management and operation of the 18 retail units which amount was deducted from expenses. As of August 31, 2004 and 2003, we owed the affiliate $28,000 and $229,000 under the terms of the agreement.

Effective June 1, 2001, we sold certain intangible assets to an unrelated entity and realized a $3,000,000 gain on the transaction which was recorded in other income. Concurrent with the sale, we entered into a 50% joint venture with the entity for the marketing of asphalt products. The joint venture is accounted for using the equity method of accounting. As part of its investment in the joint venture, we transferred $1,013,000 of inventory to it. For the years ended August 31, 2004, 2003 and 2002, net sales to the joint venture amounted to $9,209,000, $5,373,000, and $4,756,000, respectively. As of August 31, 2004 and 2003, we had a receivable from the joint venture of $651,000 and $1,529,000, respectively, under the terms of the agreement.

On September 29, 2000, we sold 42 retail units to an affiliate for $23,870,000. An opinion as to the fairness of this transaction was delivered by an independent financial advisor in connection therewith. Concurrent with this asset sale, we terminated the leases on 8 additional retail locations which we had previously leased from a non-subsidiary affiliate. We have entered into a management agreement with the non-subsidiary affiliate to operate and manage the retail units owned by the non-subsidiary affiliate on a turnkey basis. For the years ended August 31, 2004, 2003 and 2002, we billed the affiliate $1,524,000, $1,554,000, and $1,436,000, respectively, for management fees and overhead expenses incurred in the management and operation of the 50 retail units, which amount was deducted from expenses. For the fiscal years ended August 31, 2004, 2003 and 2002, net sales to the affiliate amounted to $55,592,000, $44,816,000, and $35,617,000, respectively. As of August 31, 2004 and 2003, we owed the affiliate $310,000 and $318,000, respectively, under the terms of the agreement.

We paid a service fee relating to certain costs incurred by its Parent for the Company’s New York office. During the years ended August 31, 2004, 2003 and 2002, such fees amounted to approximately $984,000, $1,000,000, and $1,000,000, respectively.

We join with the Parent and the Parent’s other subsidiaries in filing a Federal income tax return on a consolidated basis. Income taxes are calculated on a separate return basis with consideration of the Tax Sharing Agreement between the Parent and its subsidiaries. Amounts related to the Tax Sharing Agreement for the utilization by the Company of certain tax attributes of the Parent and other subsidiaries related to tax years ended August 31, 1997 through August 31, 2001, totaled $609,000 and have been recorded as a distribution in fiscal 2002. As of August 31, 2004 and 2003, we owed the Parent $445,000 under term of the Tax Sharing Agreement.

We paid an insurance premium of $102,000 during the fiscal year ending August 31, 2003 on behalf of a non subsidiary affiliate which is included in amounts due from affiliated companies at August 31, 2003. This receivable was subsequently paid by the affiliate.

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ITEM 14.    PRINCIPAL ACCOUNTANT FEES AND SERVICES

The following represents amounts billed and amounts expected to be billed to the Company for the professional services of BDO Seidman, LLP rendered during fiscal years 2004 and 2003:

	2004		2003
Audit Fees	$	482,225	$	328,480
Audit - Related Fees(1)	$	65,000	$	75,000
Tax Fees	$	—	$	—
All Other Fees	$	—	$	—
Total	$	547,225	$	403,480

(1) Services provided under this category consist of $65,000 and $75,000 for the audits of the Company’s employee benefit plans in 2004 and 2003, respectively.

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PART IV

ITEM 15.    EXHIBITS, FINANCIAL STATEMENT SCHEDULES.

(a)    (1)    Financial Statements

A list of all financial statements filed as part of this report is contained in the index to Item 8, which index is incorporated herein by reference.

(2) Financial Statement Schedules

Report of Independent Certified Public Accountants Schedule II—Valuation and Qualifying Accounts

(3) Exhibits

Number	Description
3.1	Certificate of Incorporation of United Refining Company (“URC”). Incorporated by reference to Exhibit 3.1 to the Registrant’s Registration Statement on Form S-4 (File No. 333-35083) (the “Registration Statement”).
3.2	Bylaws of URC. Incorporated by reference to Exhibit 3.2 to the Registration Statement.
3.3	Certificate of Incorporation of United Refining Company of Pennsylvania (“URCP”). Incorporated by reference to Exhibit 3.3 to the Registration Statement.
3.4	Bylaws of URCP. Incorporated by reference to Exhibit 3.4 to the Registration Statement.
3.5	Certificate of Incorporation of Kiantone Pipeline Corporation (“KPC”). Incorporated by reference to Exhibit 3.5 to the Registration Statement.
3.6	Bylaws of KPC. Incorporated by reference to Exhibit 3.6 to the Registration Statement.
3.7	Certificate of Incorporation of Kiantone Pipeline Company (“KPCY”). Incorporated by reference to Exhibit 3.7 to the Registration Statement.
3.8	Bylaws of KPCY. Incorporated by reference to Exhibit 3.8 to the registration Statement.
3.9	Certificate of Incorporation of Kwik FillCorporation. (“K-FC”). Incorporated by reference to Exhibit 3.9 to the Registration Statement.
3.10	Bylaws of K-FC. Incorporated by reference to Exhibit 3.10 to the Registration Statement.
3.11	Certificate of Incorporation of Independent Gasoline & Oil Company of Rochester, Inc. (“IGOCRI”). Incorporated by reference to Exhibit 3.11 to the Registration Statement.
3.12	Bylaws of IGOCRI. Incorporated by reference to Exhibit 3.12 to the Registration Statement.
3.13	Certificate of Incorporation of Bell Oil Corp. (“BOC”). Incorporated by reference to Exhibit 3.13 to the Registration Statement.
3.14	Bylaws of BOC. Incorporated by reference to Exhibit 3.14 to the Registration Statement.
3.15	Certificate of Incorporation of PPC, Inc. (“PPCI”). Incorporated by reference to Exhibit 3.15 to the Registration Statement.
3.16	Bylaws of PPCI. Incorporated by reference to Exhibit 3.16 to the Registration Statement.
3.17	Certificate of Incorporation of Super Test Petroleum, Inc. (“STPI”). Incorporated by reference to Exhibit 3.17 to the Registration Statement.
3.18	Bylaws of STPI. Incorporated by reference to Exhibit 3.18 to the Registration Statement.
3.19	Certificate of Incorporation of Kwik-Fil, Inc. (“K-FI”). Incorporated by reference to Exhibit 3.19 to the Registration Statement.

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Number	Description
3.20	Bylaws of K-FI. Incorporated by reference to Exhibit 3.20 to the Registration Statement.
3.21	Certificate of Incorporation of Vulcan Asphalt Refining Corporation (“VARC”). Incorporated by reference to Exhibit 3.21 to the Registration Statement.
3.22	Bylaws of VARC. Incorporated by reference to Exhibit 3.22 to the Registration Statement.
3.23	Certificate of Incorporation of United Jet Center, Inc. (“UJCI”). Incorporated by reference to Exhibit 3.23 to the Registration Statement.
3.24	Bylaws of UJCI. Incorporated by reference to Exhibit 3.24 to the Registration Statement.
*4.1	Indenture dated as of August 6, 2004 between URC, Country Fair, Inc, (“CFI”), KPC, KPCY, UJCI, URCP, K-FC, IGOCRI, BOC, PPCI, STPI, K-FI, VARC and The Bank of New York (“BONY”), relating to the 10 1/2% Series A Senior Notes due 2012.
*4.2	Form of Note.
*10.1	Purchase Agreement dated August 6, 2004 between URC, CFI, KPC, KPCY, UJCI, URCP, K-FC, IGOCRI, BOC, PPCI, STPI, K-FI, VARC, Citigroup (“CITI”), Goldman, Sachs & Co. (“GSC”), and PNC Capital Markets, Inc. (“PNCCMI”).
*10.2	Registration Rights Agreement dated August 6, 2004 between URC, CFI, KPC, KPCY, UJCI, URCP, K-FC, IGOCRI, BOC, PPCI, STPI, K-FI, VARC, CITI, GSC, and PNCCMI.
10.3	Servicing Agreement dated June 9, 1997 between URC and Red Apple Group, Inc. Incorporated by reference to Exhibit 10.4 to the Registration Statement.
10.4	Deferred Compensation Agreement dated September 1, 1996 with Thomas C. Covert. Incorporated by reference to Exhibit 10.14 of Registrant’s Annual Report on Form 10K for fiscal year ended August 31, 1998.
10.5	Amended and Restated Credit Agreement dated July 12, 2002 by and among URC, URCP, KPC, Country Fair and the Banks party thereto and PNC Bank, National Association, as Agent. Incorporated by reference to Exhibit 10.21 of Registrant’s Quarterly Report on Form 10Q for fiscal quarter ended May 31, 2002.
10.6	Amendment to Credit Agreement dated as of July 12, 2002 by and among URC, URCP, KPC, Country Fair and the Banks party thereto and PNC Bank, National Association, as Agent. Incorporated by reference to Exhibit 10.12 of Registrant’s Annual Report on Form 10K for fiscal year ended August 31, 2002.
10.7	Limited Waiver and Amendment No 3 to Credit Agreement dated as of March 24, 2003 by and among, URC, URCP, KPC, Country Fair and the Banks thereto and PNC Bank, National Association, as Agent. Incorporated by reference to Exhibit 10.13 of Registrant’s Quarterly Report on Form 10Q for fiscal quarter ended May 31, 2003.
10.8	Amendment to Credit Agreement dated as of January 27, 2004 by and among URC, URCP, KPC, CFI, K-FC and the Banks party thereto and PNC Bank, National Association, as Agent. Incorporated by reference to Exhibit 10.9 of Registrant’s Quarterly Report on Form 10Q for fiscal quarter ended February 29, 2004.
*10.9	Amendment No. 5 to Credit Agreement dated as of August 6, 2004 by and among URC, URCP, KPC, Country Fair, Inc., Kwik Fill, Inc., and the Banks party thereto and PNC Bank, National Association, as Agent.
14.1	Code of Ethics pursuant to Section 406 of the Sarbanes-Oxley Act of 2002. Incorporated by reference to Exhibit 14.1 in Registrant’s Annual Report on Form 10K for fiscal year ended August 31, 2003.

70

Number	Description
21.1	Subsidiaries of the Registrants. A) Incorporated by reference to Exhibit 21.1 to the Registration Statement. B) Country Fair, Inc. Incorporated in the Commonwealth of Pennsylvania in 1965, doing business as “Country Fair”.
*31.1	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
*31.2	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
*32.1	Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

* Filed herewith.

71

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and

Stockholder of United Refining Company

Warren, Pennsylvania

The audits referred to in our report dated October 29, 2004 relating to the consolidated financial statements of United Refining Company and Subsidiaries included the audits of the financial statement Schedule II—Valuation and Qualifying Accounts for each of the three years in the period ended August 31, 2004. This financial statement schedule is the responsibility of management. Our responsibility is to express an opinion on this schedule based on our audits.

In our opinion, such financial statement Schedule—Valuation and Qualifying Accounts, presents fairly, in all material respects, the information set forth therein.

/s/    BDO SEIDMAN, LLP

New York, New York

October 29, 2004

72

UNITED REFINING COMPANY AND SUBSIDIARIES

SCHEDULE II—VALUATION AND QUALIFYING ACCOUNTS

(in thousands)

Description	Balance at Beginning of Period		Charged to Costs and Expenses		Deductions			Balance at End Of Period
Year ended August 31, 2002:         Reserves and allowances deducted from asset accounts:         Allowance for uncollectible Accounts	$	1,370	$	420	$	(395	)	$	1,395
Year ended August 31, 2003:         Reserves and allowances deducted from asset accounts:         Allowance for uncollectible Accounts	$	1,395	$	440	$	(366	)	$	1,469
Year ended August 31, 2004:         Reserves and allowances deducted from asset accounts:         Allowance for uncollectible Accounts	$	1,469	$	409	$	(418	)	$	1,460

73

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Dated: November 24, 2004
	UNITED REFINING COMPANY
	By:	/s/  Myron L. Turfitt
		Myron L. Turfitt President and Chief Operating Officer

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated:

Signature	Title	Date
/s/  John A. Catsimatidis John A. Catsimatidis	Chairman of the Board, Chief Executive Officer and Director	November 24, 2004
/s/  Myron L. Turfitt Myron L. Turfitt	President, Chief Operating Officer and Director	November 24, 2004
/s/  Thomas C. Covert Thomas C. Covert	Vice Chairman and Director	November 24, 2004
/s/  James E. Murphy James E. Murphy	Vice President and Chief Financial Officer (Principal Accounting Officer)	November 24, 2004
/s/  Martin R. Bring Martin R. Bring	Director	November 24, 2004
/s/  Evan Evans Evan Evans	Director	November 24, 2004
/s/  Kishore Lall Kishore Lall	Director	November 24, 2004
/s/  Douglas Lemmonds Douglas Lemmonds	Director	November 24, 2004
/s/   Andrew Maloney	Director
/s/  Dennis Mehiel Dennis Mehiel	Director	November 24, 2004

74

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Dated: November 24, 2004
	UNITED REFINING COMPANY OF PENNSYLVANIA
	By:	/s/  Myron L. Turfitt
		Myron L. Turfitt President and Chief Operating Officer

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated:

Signature	Title	Date
/s/  John A. Catsimatidis John A. Catsimatidis	Chairman of the Board, Chief Executive Officer and Director	November 24, 2004
/s/  Myron L. Turfitt Myron L. Turfitt	President, Chief Operating Officer	November 24, 2004
/s/  James E. Murphy James E. Murphy	Vice President and Chief Financial Officer (Principal Accounting Officer)	November 24, 2004

75

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Dated: November 24, 2004
	KIANTONE PIPELINE CORPORATION
	By:	/s/  Myron L. Turfitt
		Myron L. Turfitt President and Chief Operating Officer

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated:

Signature	Title	Date
/s/  John A. Catsimatidis John A. Catsimatidis	Chairman of the Board, Chief Executive Officer and Director	November 24, 2004
/s/  Myron L. Turfitt Myron L. Turfitt	President, Chief Operating Officer and Director	November 24, 2004
/s/  James E. Murphy James E. Murphy	Vice President and Chief Financial Officer (Principal Accounting Officer)	November 24, 2004

76

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Dated: November 24, 2004
	KIANTONE PIPELINE COMPANY
	By:	/s/  Myron L. Turfitt
		Myron L. Turfitt Executive Vice President

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated:

Signature	Title	Date
/s/  John A. Catsimatidis John A. Catsimatidis	Chairman of the Board, Chief Executive Officer and Director	November 24, 2004
/s/  Myron L. Turfitt Myron L. Turfitt	Executive Vice President	November 24, 2004
/s/  James E. Murphy James E. Murphy	Vice President and Chief Financial Officer (Principal Accounting Officer)	November 24, 2004

77

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Dated: November 24, 2004
	UNITED JET CENTER, INC.
	By:	/s/  Myron L. Turfitt
		Myron L. Turfitt Executive Vice President

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated:

Signature	Title	Date
/s/  John A. Catsimatidis John A. Catsimatidis	Chairman of the Board, Chief Executive Officer and Director	November 24, 2004
/s/  Myron L. Turfitt Myron L. Turfitt	Executive Vice President	November 24, 2004
/s/  James E. Murphy James E. Murphy	Vice President and Chief Financial Officer (Principal Accounting Officer)	November 24, 2004

78

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Dated: November 24, 2004
	VULCAN ASPHALT REFINING CORPORATION
	By:	/s/  Myron L. Turfitt
		Myron L. Turfitt Executive Vice President

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated:

Signature	Title	Date
/s/  John A. Catsimatidis John A. Catsimatidis	Chairman of the Board, Chief Executive Officer and Director	November 24, 2004
/s/  Myron L. Turfitt Myron L. Turfitt	Executive Vice President	November 24, 2004
/s/  James E. Murphy James E. Murphy	Vice President and Chief Financial Officer (Principal Accounting Officer)	November 24, 2004

79

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Dated: November 24, 2004
	KWIK-FIL, INC.
	By:	/s/  Myron L. Turfitt
		Myron L. Turfitt Executive Vice President

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated:

Signature	Title	Date
/s/  John A. Catsimatidis John A. Catsimatidis	Chairman of the Board, Chief Executive Officer and Director	November 24, 2004
/s/  Myron L. Turfitt Myron L. Turfitt	Executive Vice President	November 24, 2004
/s/  James E. Murphy James E. Murphy	Vice President and Chief Financial Officer (Principal Accounting Officer)	November 24, 2004

80

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Dated: November 24, 2004
	KWIK-FILLCORPORATION
	By:	/s/  Myron L. Turfitt
		Myron L. Turfitt Executive Vice President

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated:

Signature	Title	Date
/s/  John A. Catsimatidis John A. Catsimatidis	Chairman of the Board, Chief Executive Officer and Director	November 24, 2004
/s/  Myron L. Turfitt Myron L. Turfitt	Executive Vice President	November 24, 2004
/s/  James E. Murphy James E. Murphy	Vice President and Chief Financial Officer (Principal Accounting Officer)	November 24, 2004

81

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Dated: November 24, 2004
	INDEPENDENT GASOLINE & OIL COMPANY OF ROCHESTER, INC.
	By:	/s/  Myron L. Turfitt
		Myron L. Turfitt Executive Vice President

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated:

Signature	Title	Date
/s/  John A. Catsimatidis John A. Catsimatidis	Chairman of the Board, Chief Executive Officer and Director	November 24, 2004
/s/  Myron L. Turfitt Myron L. Turfitt	Executive Vice President	November 24, 2004
/s/  James E. Murphy James E. Murphy	Vice President and Chief Financial Officer (Principal Accounting Officer)	November 24, 2004

82

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Dated: November 24, 2004
	BELL OIL CORP.
	By:	/s/  Myron L. Turfitt
		Myron L. Turfitt Executive Vice President

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated:

Signature	Title	Date
/s/  John A. Catsimatidis John A. Catsimatidis	Chairman of the Board, Chief Executive Officer and Director	November 24, 2004
/s/  Myron L. Turfitt Myron L. Turfitt	Executive Vice President	November 24, 2004
/s/  James E. Murphy James E. Murphy	Vice President and Chief Financial Officer (Principal Accounting Officer)	November 24, 2004

83

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Dated: November 24, 2004
	PPC, INC.
	By:	/s/  Myron L. Turfitt
		Myron L. Turfitt Executive Vice President

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated:

Signature	Title	Date
/s/  John A. Catsimatidis John A. Catsimatidis	Chairman of the Board, Chief Executive Officer and Director	November 24, 2004
/s/  Myron L. Turfitt Myron L. Turfitt	Executive Vice President	November 24, 2004
/s/  James E. Murphy James E. Murphy	Vice President and Chief Financial Officer (Principal Accounting Officer)	November 24, 2004

84

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Dated: November 24, 2004
	SUPER TEST PETROLEUM, INC.
	By:	/s/  Myron L. Turfitt
		Myron L. Turfitt Executive Vice President

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated:

Signature	Title	Date
/s/  John A. Catsimatidis John A. Catsimatidis	Chairman of the Board, Chief Executive Officer and Director	November 24, 2004
/s/  Myron L. Turfitt Myron L. Turfitt	Executive Vice President	November 24, 2004
/s/  James E. Murphy James E. Murphy	Vice President and Chief Financial Officer (Principal Accounting Officer)	November 24, 2004

85

SUPPLEMENTAL INFORMATION TO BE FURNISHED WITH REPORTS FILED PURSUANT TO SECTION 15(d) OF THE ACT BY REGISTRANTS WHICH HAVE NOT REGISTERED SECURITIES PURSUANT TO SECTION 12 OF THE ACT

No annual report or proxy material was sent to security holders by the Corporation during the fiscal year ended August 31, 2004.

86

EX-23.2

Exhibit 23.2

United Refining Company

Warren, Pennsylvania

We hereby consent to the incorporation by reference in the Prospectus constituting a part of this Registration Statement of our reports dated October 29, 2004, relating to the consolidated financial statements and schedule of United Refining Company and subsidiaries appearing in the Company’s Annual Report on Form 10-K for the year ended August 31, 2004.

We also consent to the reference to us under the caption “Experts” in the Prospectus.

/s/ BDO Seidman, LLP

New York, New York

December 13, 2004

EX-25.1

Exhibit 25.1

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM T-1

STATEMENT OF ELIGIBILITY UNDER THE TRUST

INDENTURE ACT OF 1939 OF A CORPORATION

DESIGNATED TO ACT AS TRUSTEE

CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A

TRUSTEE PURSUANT TO SECTION 305(b)(2)                     

THE BANK OF NEW YORK

(Exact name of trustee as specified in its charter)

New York	13-5160382
(Jurisdiction of incorporation if not a U.S. national bank)	(I.R.S. Employer Identification No.)
One Wall Street, New York, New York	10286
(Address of principal executive offices)	(Zip code)

UNITED REFINING COMPANY

(Exact name of obligor as specified in its charter)

Pennsylvania	25-1411751
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
15 Bradley Street Warren, Pennsylvania	16365
(Address of principal executive offices)	(Zip code)

(for Additional Obligors, please see “Table of Additional Obligors” on the following page)

10½% Senior Notes due 2012

(Title of the Indenture securities)

TABLE OF ADDITIONAL OBLIGORS

Name of Additional Registrant*	State of Incorporation or Formation	IRS Employer Identification Number
Kiantone Pipeline Corporation	New York	25-1211902
Kiantone Pipeline Company	Pennsylvania	24-1416278
United Refining Company of Pennsylvania	Pennsylvania	25-0850960
United Jet Center, Inc.	Delaware	52-1623169
Kwik-Fill Corporation	Pennsylvania	25-1525543
Independent Gas and Oil Company of Rochester, Inc.	New York	06-1217388
Bell Oil Corp.	Michigan	38-1884781
PPC, Inc.	Ohio	31-0821706
Super Test Petroleum, Inc.	Michigan	38-1901439
Kwik-Fil, Inc.	New York	25-1525615
Vulcan Asphalt Refining Corporation	Delaware	23-2486891
Country Fair, Inc.	Pennsylvania	25-1411751

* The address and telephone number of the principal executive offices of each of the registrants listed below are the same as those of United Refining Company.

Item 1. General Information.

Furnish the following information as to the Trustee:

(a) Name and address of each examining or supervising authority to which it is subject.

Superintendent of Banks of the State of New York	2 Rector Street, New York, N.Y. 10006 and Albany, N.Y. 12203
Federal Reserve Bank of New York	33 Liberty Plaza, New York, N.Y. 10045
Federal Deposit Insurance Corporation	550 17th Street, N.W., Washington, D.C. 20429
New York Clearing House Association	New York, N.Y. 10005

(b) Whether it is authorized to exercise corporate trust powers.

Yes.

Item 2. Affiliations with Obligor.

If the obligor is an affiliate of the trustee, describe each such affiliation.

None. (See Note on page 2.)

Item 16. List of Exhibits.

Exhibits identified in parentheses below, on file with the Commission, are incorporated herein by reference as an exhibit hereto, pursuant to Rule 7a-29 under the Trust Indenture Act of 1939 (the “Act”) and 17 C.F.R. 229.10(d).

1.	-	A copy of the Organization Certificate of The Bank of New York (formerly Irving Trust Company) as now in effect, which contains the authority to commence business and a grant of powers to exercise corporate trust powers. (Exhibit 1 to Amendment No. 1 to Form T-1 filed with Registration Statement No. 33-6215, Exhibits 1a and 1b to Form T-1 filed with Registration Statement No. 33-21672 and Exhibit 1 to Form T-1 filed with Registration Statement No. 33-29637.)
4.	-	A copy of the existing By-laws of the Trustee. (Exhibit 4 to Form T-1 filed as Exhibit 25(a) to Registration Statement No. 333-102200.)
6.	-	The consent of the Trustee required by Section 321(b) of the Act. (Exhibit 6 to Form T-1 filed with Registration Statement No. 33-44051.)
7.	-	A copy of the latest report of condition of the Trustee published pursuant to law or to the requirements of its supervising or examining authority.

NOTE

Inasmuch as this Form T-1 is being filed prior to the ascertainment by the Trustee of all facts on which to base a responsive answer to Item 2, the answer to said Item is based on incomplete information.

Item 2 may, however, be considered as correct unless amended by an amendment to this Form T-1.

SIGNATURE

Pursuant to the requirements of the Act, the Trustee, The Bank of New York, a corporation organized and existing under the laws of the State of New York, has duly caused this statement of eligibility to be signed on its behalf by the undersigned, thereunto duly authorized, all in The City of New York, and State of New York, on the 16th day of December, 2004.

THE BANK OF NEW YORK
By:	/S/    VAN K. BROWN
Name:	Van K. Brown
Title:	Vice President

Consolidated Report of Condition of

THE BANK OF NEW YORK

of One Wall Street, New York, N.Y. 10286

And Foreign and Domestic Subsidiaries,

a member of the Federal Reserve System, at the close of business June 30, 2004, published in

accordance with a call made by the Federal Reserve Bank of this District pursuant to the

provisions of the Federal Reserve Act.

	Dollar Amounts In Thousands
ASSETS
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coin	$	2,954,963
Interest-bearing balances		10,036,895
Securities:
Held-to-maturity securities		1,437,899
Available-for-sale securities		20,505,806
Federal funds sold and securities purchased under agreements to resell
Federal funds sold in domestic offices		5,482,900
Securities purchased under agreements to resell		838,105
Loans and lease financing receivables:
Loans and leases held for sale		48,034
Loans and leases, net of unearned income		38,299,913
LESS: Allowance for loan and lease losses		594,926
Loans and leases, net of unearned income and allowance		37,704,987
Trading Assets		2,986,727
Premises and fixed assets (including capitalized leases)		957,249
Other real estate owned		374
Investments in unconsolidated subsidiaries and associated companies		246,280
Customers’ liability to this bank on acceptances outstanding		251,948
Intangible assets
Goodwill		2,699,812
Other intangible assets		755,311
Other assets		7,629,093
Total assets	$	94,536,383

EXHIBIT 7

(Page 2 of 3)

LIABILITIES
Deposits:
In domestic offices	$	36,481,716
Noninterest-bearing		15,636,690
Interest-bearing		20,845,026
In foreign offices, Edge and Agreement subsidiaries, and IBFs		25,163,274
Noninterest-bearing		413,981
Interest-bearing		24,749,293
Federal funds purchased and securities sold under agreements to repurchase
Federal funds purchased in domestic offices		898,340
Securities sold under agreements to repurchase		721,016
Trading liabilities		2,377,862
Other borrowed money:
(includes mortgage indebtedness and obligations under capitalized leases)		10,475,320
Not applicable
Bank’s liability on acceptances executed and outstanding		254,569
Subordinated notes and debentures		2,422,807
Other liabilities		7,321,226
Total liabilities	$	86,116,130
Minority interest in consolidated subsidiaries		139,967
EQUITY CAPITAL
Perpetual preferred stock and related surplus		0
Common stock		1,135,284
Surplus		2,082,308
Retained earnings		5,118,989
Accumulated other comprehensive income		(56,295	)
Other equity capital components		0
Total equity capital		8,280,286
Total liabilities, minority interest, and equity capital	$	94,536,383

I, Thomas J. Mastro, Senior Vice President and Comptroller of the above-named bank do hereby declare that this Report of Condition is true and correct to the best of my knowledge and belief.

Thomas J. Mastro,

Senior Vice President and Comptroller

We, the undersigned directors, attest to the correctness of this statement of resources and liabilities. We declare that it has been examined by us, and to the best of our knowledge and belief has been prepared in conformance with the instructions and is true and correct.

Thomas A. Renyi	Directors
Gerald L. Hassell
Alan R. Griffith

EX-99.1

Exhibit 99.1

LETTER OF TRANSMITTAL

UNITED REFINING COMPANY

offer for all outstanding

10 ¹/2% Senior Notes due 2012

and the related guarantees

in exchange for

10 ¹/2% Senior Notes due 2012

and the related guarantees

which have been registered under

the Securities Act of 1933, as amended,

pursuant to the prospectus dated                     , 2004

THE EXCHANGE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON                     , 2004, UNLESS EXTENDED (SUCH TIME AND DATE, AS SO EXTENDED, THE “EXPIRATION DATE”). TENDERS MAY BE WITHDRAWN PRIOR TO THE EXPIRATION DATE.

The exchange agent for the exchange offer is:

The Bank of New York

For delivery by mail, hand or overnight:

The Bank of New York

Corporate Trust Operations

Reorganization Unit

101 Barclay Street — Floor 7E

New York, NY 10286

Attention: Mr. Enrique Lopez

For delivery by facsimile (for eligible institutions only):

(212) 298-1915

Attention: Mr. Enrique Lopez,

Reorganization Unit — Floor 7E

For confirmation by telephone call:

(212) 815-2742

DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OR FACSIMILE NUMBER OTHER THAN AS INDICATED ABOVE WILL NOT CONSTITUTE A VALID DELIVERY.

THE INSTRUCTIONS CONTAINED HEREIN SHOULD BE READ CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED.

The prospectus of United Refining Company, a Pennsylvania corporation (the “Issuer”), and certain subsidiaries of the Issuer (collectively the “Subsidiary Guarantors”), dated                     , 2004, as the same may be amended or supplemented from time to time (the “Prospectus”), and this letter of transmittal together constitute the Issuer’s and the Subsidiary Guarantors’ offer, referred to as the exchange offer, to exchange an aggregate principal amount of up to $200,000,000 of the Issuer’s 10 ¹/2% Senior Notes due 2012, including the guarantees thereof by the Subsidiary Guarantors, which have been registered under the Securities Act of 1933, as amended (the “New Notes”), for a like principal amount of the Issuer’s issued and outstanding 10 ¹/2% Senior Notes due 2012, which has not been registered under the Securities Act of 1933, as amended, including the

guarantees thereof by the Subsidiary Guarantors, (the “Old Notes”). Capitalized terms used but not defined in this letter of transmittal shall have the same meaning given to them in the Prospectus, as it may be amended or supplemented.

This letter of transmittal is to be completed by a holder of Old Notes if either (a) a tender of Old Notes is to be made by book-entry transfer to the account of the exchange agent at The Depository Trust Company (“DTC”), pursuant to the procedures for tender by book-entry transfer set forth in the Prospectus under “The Exchange Offer—Procedures for Tendering Old Notes” and an agent’s message, as defined below, is not delivered or (b) certificates for such Old Notes are to be forwarded herewith. Certificates or book-entry confirmation of the transfer of Old Notes into the exchange agent’s account at DTC, as well as this letter of transmittal, properly completed and duly executed, with any required signature guarantees, and any other documents, such as endorsements, bond powers, opinions of counsel, certifications and powers of attorney, if applicable, required by this letter of transmittal, must be received by the exchange agent at its address set forth herein on or prior to the expiration date. In connection with any tender of Old Notes by book-entry transfer, an agent’s message may be delivered as part of the book-entry confirmation in lieu of this letter of transmittal. The term “book-entry confirmation” means a confirmation of a book-entry transfer of Old Notes into the exchange agent’s account at DTC. The term “agent’s message” means a message transmitted to the exchange agent by DTC which states that DTC has received an express acknowledgment that the tendering holder agrees to be bound by the letter of transmittal and that the Issuer and the Subsidiary Guarantors may enforce the letter of transmittal against such holder.

If Old Notes are tendered pursuant to book-entry procedures, the exchange agent must receive, no later than 5:00 p.m., New York City time, on the expiration date, book-entry confirmation of the tender of the Old Notes into the exchange agent’s account at DTC, along with a completed letter of transmittal or an agent’s message.

By crediting the Old Notes to the exchange agent’s account at DTC and by complying with the applicable procedures of DTC’s Automated Tender Offer Program, or ATOP, with respect to the tender of the Old Notes, including by the transmission of an agent’s message, the holder of Old Notes acknowledges and agrees to be bound by the terms of this letter of transmittal, and the participant in DTC confirms on behalf of itself and the beneficial owners of such Old Notes all provisions of this letter of transmittal as being applicable to it and such beneficial owners as fully as if such participant and each such beneficial owner had provided the information required herein and executed and transmitted this letter of transmittal to the exchange agent.

Holders of Old Notes whose certificates for such Old Notes are not immediately available or who are unlikely to be able to deliver all required documents to the exchange agent on or prior to the expiration date or who cannot complete a book-entry transfer on a timely basis may tender their Old Notes according to the guaranteed delivery procedures described in the Prospectus under “The Exchange Offer—Procedures for Tendering Old Notes—Guaranteed Delivery.”

DELIVERY OF DOCUMENTS TO DTC DOES NOT CONSTITUTE DELIVERY TO THE EXCHANGE AGENT.

The undersigned has completed the appropriate boxes below and signed this letter of transmittal to indicate the action the undersigned desires to take with respect to the exchange offer.

List below the Old Notes to which this letter of transmittal relates. The name(s) and address(es) of the registered holder(s) of the Old Notes tendered hereby should be printed below, if they are not already set forth below, as they appear on the certificates representing such Old Notes. The certificate number(s) and the principal amount of Old Notes that the undersigned wishes to tender should be indicated in the appropriate boxes below. If the space provided below is inadequate, the certificate numbers and principal amount of Old Notes should be listed on a separate, signed schedule affixed hereto.

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DESCRIPTION OF OLD NOTES

Name(s) and Address(es) of
Registered Holder(s)
(Please fill in, if blank) Certificate
Number(s) * Aggregate Principal
Amount of Old Notes Principal Amount
Tendered**

¨ CHECK HERE IF TENDERED OLD NOTES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER TO THE ACCOUNT MAINTAINED BY THE EXCHANGE AGENT WITH DTC AND COMPLETE THE FOLLOWING:

Name of Tendering Institution

DTC Account Number

Transaction Code Number

¨ CHECK HERE IF TENDERED OLD NOTES ARE ENCLOSED HEREWITH.

¨ CHECK HERE AND ENCLOSE A PHOTOCOPY OF THE NOTICE OF GUARANTEED DELIVERY IF TENDERED OLD NOTES ARE BEING DELIVERED PURSUANT TO A NOTICE OF GUARANTEED DELIVERY PREVIOUSLY SENT TO THE EXCHANGE AGENT AND COMPLETE THE FOLLOWING (SEE INSTRUCTION 1):

Name(s) of Registered Holder(s)

Window Ticket Number (if any)

Date of Execution of Notice of Guaranteed Delivery

Name of Eligible Institution which Guaranteed Delivery

If Guaranteed Delivery is to be Made by Book-Entry Transfer:

Name of Tendering Institution

DTC Account Number

Transaction Code Number

* Need not be completed if Old Notes are being tendered by book-entry transfer.

** Unless otherwise indicated in this column, a holder will be deemed to have tendered ALL of the Old Notes represented by the Old Notes indicated in the second column. See Instruction 4. Old Notes tendered hereby must be in denominations of $1,000 or any integral multiple thereof.

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¨ CHECK HERE IF YOU ARE A BROKER-DEALER AND WISH TO RECEIVE 10 ADDITIONAL COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY AMENDMENTS OR SUPPLEMENTS THERETO.*

Name:                                                                                                                                                                                                       

Address:                                                                                                                                                                                                  

* You are entitled to as many copies as you reasonably believe necessary. If you require more than 10 copies, please indicate the total number required in the following space:

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PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY

Ladies and Gentlemen:

The undersigned hereby tenders to the Issuer the principal amount of Old Notes indicated above, upon the terms and subject to the conditions of the exchange offer. Subject to and effective upon the acceptance for exchange of all or any portion of the Old Notes tendered herewith in accordance with the terms and conditions of the exchange offer, including, if the exchange offer is extended or amended, the terms and conditions of any such extension or amendment, the undersigned hereby irrevocably sells, assigns and transfers to or upon the order of the Issuer all right, title and interest in and to such Old Notes.

The undersigned hereby irrevocably constitutes and appoints the exchange agent as its agent and attorney-in-fact, with full knowledge that the exchange agent is also acting as agent of the Issuer and the Subsidiary Guarantors in connection with the exchange offer and as trustee under the indenture governing the Old Notes and the New Notes, with respect to the tendered Old Notes, with full power of substitution (such power of attorney being deemed to be an irrevocable power coupled with an interest), subject only to the right of withdrawal described in the Prospectus, to (1) deliver certificates representing such Old Notes, together with all accompanying evidences of transfer and authenticity, to or upon the order of the Issuer upon receipt by the exchange agent, as the undersigned’s agent, of the New Notes to be issued in exchange for such Old Notes, (2) present certificates for such Old Notes for transfer and to transfer the Old Notes on the books of the Issuer and (3) receive for the account of the Issuer all benefits and otherwise exercise all rights of beneficial ownership of such Old Notes, all in accordance with the terms and conditions of the exchange offer.

The undersigned hereby represents and warrants that (1) the undersigned has full power and authority to tender, exchange, sell, assign and transfer the Old Notes tendered hereby, (2) the Issuer will acquire good, marketable and unencumbered title to the tendered Old Notes, free and clear of all liens, restrictions, charges and other encumbrances, and (3) the Old Notes tendered hereby are not subject to any adverse claims or proxies. The undersigned warrants and agrees that the undersigned will, upon request, execute and deliver any additional documents requested by the Issuer or any Subsidiary Guarantor or the exchange agent to complete the exchange, sale, assignment and transfer of the Old Notes tendered hereby. The undersigned agrees to all of the terms and conditions of the exchange offer.

The undersigned understands that tenders of Old Notes pursuant to any one of the procedures described in “The Exchange Offer—Procedures for Tendering Old Notes” in the Prospectus and in the instructions accompanying this letter of transmittal will, upon the Issuer’s acceptance for exchange of such tendered Old Notes, constitute a binding agreement between the undersigned and the Issuer upon the terms and subject to the conditions of the exchange offer and that the tendering holder will be deemed to have waived the right to receive any payment in respect of interest or otherwise on such Old Notes accrued up to the date of issuance of the New Notes. The undersigned recognizes that, under certain circumstances set forth in the Prospectus, the Issuer may not be required to accept for exchange any of the Old Notes tendered hereby.

Unless otherwise indicated herein in the box entitled “Special Issuance Instructions” below, the undersigned hereby directs that the New Notes be issued in the name(s) of the undersigned or, in the case of a book-entry transfer of Old Notes, that such New Notes be credited to the account indicated above maintained at DTC. If applicable, substitute certificates representing Old Notes not exchanged or not accepted for exchange will be issued to the undersigned or, in the case of a book-entry transfer of Old Notes, will be credited to the account indicated above maintained at DTC. Similarly, unless otherwise indicated under “Special Delivery Instructions,” the undersigned hereby directs that the New Notes be delivered to the undersigned at the address shown below the undersigned’s signature. The undersigned recognizes that the Issuer and the Subsidiary Guarantors have no obligation pursuant to “Special Delivery Instructions” to transfer any Old Notes from a registered holder thereof if the Issuer does not accept for exchange any of the principal amount of such Old Notes so tendered.

By tendering Old Notes and executing this letter of transmittal, the undersigned hereby represents and agrees that (i) the undersigned is not an “affiliate,” as defined in Rule 405 under the Securities Act of 1933, as

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amended (the “Securities Act”), of the Issuer or any of the Subsidiary Guarantors, (ii) any New Notes to be received by the undersigned are being acquired in the ordinary course of its business, (iii) the undersigned is not engaged in, does not intend to engage in and has no arrangement or understanding with any person to participate in a distribution (within the meaning of the Securities Act) of the New Notes and (iv) the undersigned is not acting on behalf of any person who could not truthfully make the foregoing representations.

The undersigned hereby acknowledges and agrees that any broker-dealer and any holder of Old Notes using the Exchange Offer to participate in a distribution of the New Notes (1) could not under SEC policy, as in effect on March 11, 2003, rely on the position of the SEC enunciated in its no-action letters entitled Morgan Stanley and Co., Inc. (available June 5, 1991) and Exxon Capital Holdings Corporation (available May 13, 1988), as interpreted in Shearman & Sterling (available July 2, 1993), and similar no-action letters, and (2) must comply with the registration and prospectus delivery requirements of the Securities Act in connection with a secondary resale transaction and that such transaction should be covered by an effective registration statement containing the selling security holder information required by Item 507 or 508, as applicable, of Regulation S-K if the resales are of New Notes obtained by such holder in exchange for Old Notes acquired by such holder directly from the Issuer.

If the undersigned is not a broker-dealer, the undersigned hereby acknowledges that it is not engaged in, and does not intend to engage in, a distribution of the New Notes.

If the undersigned is a broker-dealer holding Old Notes acquired for its own account as a result of market-making activities or other trading activities, the undersigned hereby acknowledges that it will deliver a prospectus that meets the requirements of the Securities Act in connection with any resale of New Notes received in respect of such Old Notes pursuant to the Exchange Offer. However, by so acknowledging and delivering a prospectus, the undersigned will not be deemed to admit that it is an “underwriter” within the meaning of the Securities Act.

All authority conferred or agreed to be conferred herein and every obligation of the undersigned under this letter of transmittal shall survive the death or incapacity of the undersigned, and any obligation of the undersigned hereunder shall be binding upon the heirs, executors, administrators, personal representatives, trustees in bankruptcy, legal representatives, successors and assigns of the undersigned. Except as stated in the Prospectus under “The Exchange Offer—Withdrawal Rights,” this tender is irrevocable.

The undersigned, by completing the box entitled “Description of Old Notes” above and signing this letter of transmittal, will be deemed to have tendered the Old Notes as set forth in such box.

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TO BE COMPLETED BY ALL TENDERING HOLDERS

(See Instructions 2 and 7)

PLEASE SIGN HERE

(Please Complete Substitute Form W-9 on Page 14

or a Form W-8; See Instruction 11)

Signature(s) of Holder(s)

Date:                                 

(Must be signed by the registered holder(s) exactly as name(s) appear(s) on certificate(s) for the Old Notes tendered or on a security position listing or by person(s) authorized to become the registered holder(s) by certificates and documents transmitted herewith. If signature is by a trustee, executor, administrator, guardian, attorney-in-fact, officer of a corporation or other person acting in a fiduciary or representative capacity, please provide the following information and see Instruction 7.)

Name(s):                                                                                                                                                                                                            

(Please Print)

Capacity (full title):                                                                                                                                                                                       

Address:                                                                                                                                                                                                             

Area Code and Telephone No.:                                                                                                                                                                

Taxpayer Identification Number:                                                                                                                                                             

GUARANTEE OF SIGNATURE(S)

(See Instruction 2)

Authorized Signature:                                                                                                                                                                                  

Name:                                                                                                                                                                                                                 

(Please Type or Print)

Title:                                                                                                                                                                                                                   

Name of Firm:                                                                                                                                                                                                

Address:                                                                                                                                                                                                             

(Include Zip Code)

Area Code and Telephone No.:                                                                                                                                                                

Date:                                                                                                                                                                                                                   

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SPECIAL ISSUANCE INSTRUCTIONS

(Signature Guarantee Required—

See Instructions 2, 6, 8 and 15)

TO BE COMPLETED ONLY if New Notes or Old Notes not tendered or not accepted are to be issued in the name of someone other than the registered holder(s) of the Old Notes whose signature(s) appear(s) above, or if Old Notes delivered by book-entry transfer and not accepted for exchange are to be returned for credit to an account maintained at DTC other than the account indicated above.

Issue (check appropriate box(es))

¨ Old Notes to:

¨ New Notes to:

Name:                                                                                                                                                                                                                 

(Please Print)

Address:                                                                                                                                                                                                             

(Include Zip Code)

Taxpayer Identification Number

¨ Credit unaccepted Old Notes tendered by book-entry transfer to the following account at DTC:

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SPECIAL DELIVERY INSTRUCTIONS

(Signature Guarantee Required—

See Instructions 2, 6, 8 and 15)

TO BE COMPLETED ONLY if New Notes or Old Notes not tendered or not accepted are to be sent to someone other than the registered holder(s) of the Old Notes whose signature(s) appear(s) above, or to such registered holder at an address other than that shown above.

Deliver (check appropriate box(es))

¨ Old Notes to:

¨ New Notes to:

Name:                                                                                                                                                                                                                 

(Please Print)

Address:                                                                                                                                                                                                             

(Include Zip Code)

INSTRUCTIONS

Forming Part of the Terms and Conditions of the Exchange Offer

1. Delivery of Letter of Transmittal and Certificates; Guaranteed Delivery Procedures. This letter of transmittal is to be completed by a holder of Old Notes to tender such holder’s Old Notes if either (a) tenders are to be made pursuant to the procedures for tender by book-entry transfer set forth in “The Exchange Offer—Procedures for Tendering Old Notes” in the Prospectus and an agent’s message, as defined on page 2 hereof, is not delivered or (b) certificates are to be forwarded herewith. Certificates or book-entry confirmation of transfer of Old Notes into the exchange agent’s account at DTC, as well as this letter of transmittal, properly completed and duly executed, with any required signature guarantees, and any other documents, such as endorsements, bond powers, opinions of counsel, certifications and powers of attorney, if applicable, required by this letter of transmittal, must be received by the exchange agent at its address set forth herein on or prior to the expiration date. If the tender of Old Notes is effected in accordance with applicable ATOP procedures for book-entry transfer, an agent’s message may be transmitted to the exchange agent in lieu of an executed letter of transmittal. Old Notes may be tendered in whole or in part in integral multiples of $1,000.

For purposes of the exchange offer, the term “holder” includes any participant in DTC named in a securities position listing as a holder of Old Notes. Only a holder of record may tender Old Notes in the exchange offer. Any beneficial owner of Old Notes who wishes to tender some or all of such Old Notes should arrange with DTC, a DTC participant or the record owner of such Old Notes to execute and deliver this letter of transmittal or to send an electronic instruction effecting a book-entry transfer on his or her behalf. See Instruction 7.

Holders who wish to tender their Old Notes and (i) whose certificates for the Old Notes are not immediately available or for whom all required documents are unlikely to reach the exchange agent on or prior to the expiration date; or (ii) who cannot complete the procedures for delivery by book-entry transfer on a timely basis, may tender their Old Notes by properly completing and duly executing a notice of guaranteed delivery pursuant to the guaranteed delivery procedures set forth in “The Exchange Offer—Procedures for Tendering Old Notes—Guaranteed Delivery” in the Prospectus. Pursuant to such procedures: (i) such tender must be made by or through an eligible institution; (ii) a properly completed and duly executed notice of guaranteed delivery, substantially in the form made available by the Issuer, must be received by the exchange agent on or prior to the expiration date; and (iii) the certificates for the Old Notes, or a book-entry confirmation, together with a properly completed and duly executed letter of transmittal, or an agent’s message in lieu thereof, with any required

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signature guarantees and any other documents required by this letter of transmittal, must be received by the exchange agent within three New York Stock Exchange trading days after the date of execution of such notice of guaranteed delivery for all such tendered Old Notes, all as provided in “The Exchange Offer—Procedures for Tendering Old Notes—Guaranteed Delivery” in the Prospectus.

The notice of guaranteed delivery may be delivered by hand, facsimile (for eligible institutions only), mail or overnight delivery service to the exchange agent, and must include a guarantee by an eligible institution in the form set forth in such notice of guaranteed delivery. For Old Notes to be properly tendered pursuant to the guaranteed delivery procedure, the exchange agent must receive a notice of guaranteed delivery on or prior to the expiration date. As used herein, “eligible institution” means a firm or other entity which is identified as an “Eligible Guarantor Institution” in Rule 17Ad-15 under the Securities Exchange Act of 1934, as amended, including a bank; a broker, dealer, municipal securities broker or dealer or government securities broker or dealer; a credit union; a national securities exchange, registered securities association or clearing agency; or a savings association.

The method of delivery of certificates for the Old Notes, this letter of transmittal and all other required documents is at the election and sole risk of the tendering holder. If delivery is by mail, registered mail with return receipt requested, properly insured, or overnight delivery service is recommended. In all cases, sufficient time should be allowed to ensure timely delivery. No letters of transmittal or Old Notes should be sent to the Issuer or any Subsidiary Guarantor. Delivery is complete when the exchange agent actually receives the items to be delivered. Delivery of documents to DTC in accordance with DTC’s procedures does not constitute delivery to the exchange agent.

The Issuer will not accept any alternative, conditional or contingent tenders. Each tendering holder, by execution of a letter of transmittal or by causing the transmission of an agent’s message, waives any right to receive any notice of the acceptance of such tender.

2. Guarantee of Signatures. No signature guarantee on this letter of transmittal is required if:

a. this letter of transmittal is signed by the registered holder (which term, for purposes of this document, shall include any participant in DTC whose name appears on a security position listing as the owner of the Old Notes) of Old Notes tendered herewith, unless such holder has completed either the box entitled “Special Issuance Instructions” or the box entitled “Special Delivery Instructions” above; or

b. such Old Notes are tendered for the account of a firm that is an eligible institution. In all other cases, an eligible institution must guarantee the signature(s) on this letter of transmittal. See Instruction 7.

3. Inadequate Space. If the space provided in the box captioned “Description of Old Notes” is inadequate, the certificate number(s) and/or the principal amount of Old Notes and any other required information should be listed on a separate, signed schedule which is attached to this letter of transmittal.

4. Partial Tenders (not applicable to holders who tender by book-entry transfer). If less than all the Old Notes evidenced by any certificate submitted are to be tendered, fill in the principal amount of Old Notes which are to be tendered in the “Principal Amount Tendered” column of the box entitled “Description of Old Notes” on page 3 of this letter of transmittal. In such case, new certificate(s) for the remainder of the Old Notes that were evidenced by your old certificate(s) will be sent only to the holder of the Old Notes as promptly as practicable after the expiration date. All Old Notes represented by certificates delivered to the exchange agent will be deemed to have been tendered unless otherwise indicated. Tender of Old Notes will be accepted only in integral multiples of $1,000.

5. Withdrawal Rights. Except as otherwise provided herein, tenders of Old Notes may be withdrawn at any time on or prior to the expiration date. In order for a withdrawal to be effective, a written notice of withdrawal must be timely received by the exchange agent at its address set forth above and in the Prospectus on or prior to the expiration date. Any such notice of withdrawal must specify the name of the person that tendered the Old

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Notes to be withdrawn; identify the Old Notes to be withdrawn, including the total principal amount of Old Notes to be withdrawn; and, where certificates for Old Notes are transmitted, the name of the registered holder of the Old Notes, if different from that of the person withdrawing such Old Notes. If certificates for the Old Notes have been delivered or otherwise identified to the exchange agent, then the tendering holder must submit the serial numbers of the Old Notes to be withdrawn and the signature on the notice of withdrawal must be guaranteed by an eligible institution, except in the case of Old Notes tendered for the account of an eligible institution. If Old Notes have been tendered pursuant to the procedures for book-entry transfer set forth in the Prospectus under “The Exchange Offer—Procedures for Tendering Old Notes,” the notice of withdrawal must specify the name and number of the account at DTC to be credited with the withdrawn Old Notes and the notice of withdrawal must be delivered to the exchange agent. Withdrawals of tenders of Old Notes may not be rescinded; however, Old Notes properly withdrawn may again be tendered at any time on or prior to the expiration date by following any of the procedures described in the Prospectus under “The Exchange Offer—Procedures for Tendering Old Notes.”

All questions regarding the validity, form and eligibility, including time of receipt, of withdrawal notices will be determined by the Issuer and the Subsidiary Guarantors, in their sole discretion, which determination of such questions as well as their interpretation of the terms and conditions of the exchange offer (including this letter of transmittal) will be final and binding on all parties. None of the Issuer and the Subsidiary Guarantors, any of their respective affiliates or assigns, the exchange agent or any other person is under any obligation to give notice of any irregularities in any notice of withdrawal, nor will any of them be liable for failing to give any such notice.

Withdrawn Old Notes will be returned to the holder after withdrawal. Old Notes tendered by book-entry transfer through DTC that are withdrawn will be credited to an account maintained with DTC. The Old Notes will be returned or credited to the account maintained at DTC as promptly as practicable after withdrawal. Any Old Notes which have been tendered for exchange but which are withdrawn will be returned to the holder thereof without cost to such holder.

6. Return of Unexchanged Old Notes. If any tendered Old Notes are not exchanged pursuant to the exchange offer for any reason, or if certificates are submitted for more Old Notes than are tendered or accepted for exchange, certificates for such nonexchanged or non-tendered Old Notes will be returned, or, in the case of Old Notes tendered by book-entry transfer, such Old Notes will be credited to an account maintained at DTC, without expense to the tendering holder, as promptly as practicable following the expiration or termination of the exchange offer.

7. Signatures on Letter of Transmittal, Assignments and Endorsements.

If this letter of transmittal is signed by the registered holder(s) of the Old Notes tendered hereby, the signature(s) must correspond exactly with the name(s) as written on the face of the certificate(s) without any change whatsoever.

If any Old Notes tendered hereby are owned of record by two or more joint owners, all such owners must sign this letter of transmittal.

If any tendered Old Notes are registered in different name(s) on several certificates, it will be necessary to complete, sign and submit as many separate letters of transmittal or facsimiles hereof as there are different registrations of certificates.

If this letter of transmittal or any certificates, endorsements, bond powers, powers of attorney or any other document required by this letter of transmittal are signed by trustees, executors, administrators, guardians, attorneys-in-fact, officers of corporations or others acting in a fiduciary or representative capacity, such persons should so indicate when signing and, unless waived by the Issuer, must submit proper evidence satisfactory to the Issuer, in its sole discretion, of each such person’s authority so to act.

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When this letter of transmittal is signed by the registered owner(s) of the Old Notes listed and transmitted hereby, no endorsement(s) of certificate(s) or separate instruments of transfer or exchange are required unless New Notes are to be issued in the name of a person other than the registered holder(s). Signature(s) on such certificate(s) or instruments of transfer or exchange must be guaranteed by an eligible institution.

If this letter of transmittal is signed by a person other than the registered owner(s) of the Old Notes listed, the certificates must be endorsed or accompanied by a written instrument or instruments of transfer or exchange, signed exactly as the name or names of the registered owner(s) appear(s) on the certificates, and also must be accompanied by such opinions of counsel, certifications and other information as the Issuer and the Subsidiary Guarantors or the trustee under the indenture for the Old Notes may require in accordance with the restrictions on transfer applicable to the Old Notes. Signatures on such certificates or bond powers must be guaranteed by an eligible institution.

8. Special Issuance and Delivery Instructions. If New Notes are to be issued in the name of a person other than the signer of this letter of transmittal, or if New Notes are to be sent to someone other than the signer of this letter of transmittal or to an address other than that shown above, the appropriate boxes on this letter of transmittal should be completed. In the case of issuance in a different name, the U.S. taxpayer identification number of the person named must also be indicated. A holder of Old Notes tendering Old Notes by book-entry transfer may instruct that Old Notes not exchanged be credited to such account maintained at DTC as such holder may designate. If no such instructions are given, certificates for Old Notes not exchanged will be returned by mail to the address of the signer of this letter of transmittal or, if the Old Notes not exchanged were tendered by book-entry transfer, such Old Notes will be returned by crediting the account indicated on page 3 above maintained at DTC. See Instruction 6.

9. Irregularities. All questions regarding the form of documents, validity, eligibility (including time of receipt) and acceptance for exchange of any tender of Old Notes will be determined by the Issuer and the Subsidiary Guarantors, in their sole discretion, which determination of such questions as well as their interpretation of the terms and conditions of the exchange offer will be final and binding on all parties. The Issuer and the Subsidiary Guarantors reserve the absolute right, in their sole and absolute discretion, to reject any tenders determined to be in improper form or the acceptance of which, or exchange for which, may, in the view of counsel to Playboy Enterprises or the Issuer be unlawful. The Issuer and the Subsidiary Guarantors also reserve the absolute right, subject to applicable law, to waive any of the conditions of the exchange offer set forth in the Prospectus under “The Exchange Offer—Conditions to the Exchange Offer” or any condition or irregularity in any tender of Old Notes by any holder, whether or not the Issuer and the Subsidiary Guarantors waived similar conditions or irregularities in the case of other holders. A tender of Old Notes is invalid until all defects and irregularities have been cured or waived. None of the Issuer and the Subsidiary Guarantors, any of their respective affiliates or assigns, the exchange agent or any other person is under any obligation to give notice of any irregularities in any notice of withdrawal, nor will any of them be liable for failing to give any such notice.

10. Questions, Requests for Assistance and Additional Copies. Questions regarding the procedure for tendering Old Notes and requests for assistance may be directed to the exchange agent at its address and telephone number set forth on the front of this letter of transmittal. Additional copies of the Prospectus, the letter of transmittal, the notice of guaranteed delivery and Forms W-8 (as defined in Instruction 11) may be obtained from the exchange agent at the address and telephone/facsimile numbers indicated above, or from your broker, dealer, commercial bank, trust company or other nominee.

11. Backup Withholding; Substitute Form W-9; Forms W-8. Under the United States federal income tax laws, interest paid to holders of New Notes received pursuant to the exchange offer may be subject to backup withholding. Generally, such payments will be subject to backup withholding unless the holder (i) is exempt from backup withholding or (ii) furnishes the payer with its correct taxpayer identification number (“TIN”), certifies that the number provided is correct and further certifies that such holder is a U.S. person (as defined for U.S. federal income tax purposes) and that such holder is not subject to backup withholding as a result of a

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failure to report all interest or dividend income. Each holder that wants to avoid backup withholding should provide the exchange agent with such holder’s correct TIN (or certify that such holder is awaiting a TIN) and certify that such holder is not subject to backup withholding by completing Substitute Form W-9 below.

Certain holders (including, among others, all corporations and certain foreign individuals) are exempt from these backup withholding and reporting requirements. In general, in order for a foreign individual to qualify as an exempt recipient, that holder must submit a statement, signed under the penalties of perjury, attesting to that individual’s exempt status. Such statements may be obtained from the exchange agent. Exempt holders (other than foreign persons), while not required to file Substitute Form W-9, should file Substitute Form W-9 and write “exempt” on its face to avoid possible erroneous backup withholding. Foreign persons not subject to backup withholding should complete and submit to the exchange agent a Form W-8BEN (Certificate of Foreign Status of Beneficial Owner For U.S. Withholding) and/or other applicable Form(s) W-8 (and any other required certifications) instead of the Substitute Form W-9. See the enclosed Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9 for additional instructions.

If backup withholding applies, the Issuer may be required to withhold at the applicable rate on interest payments made to a holder of New Notes. Backup withholding is not an additional tax. Rather, the amount of backup withholding is treated as an advance payment of a tax liability, and a holder’s U.S. federal income tax liability will be reduced by the amount of tax withheld. If withholding results in an overpayment of taxes, a refund may be obtained.

Purpose of Substitute Form W-9

To prevent backup withholding with respect to interest payments on the New Notes, a holder should notify the exchange agent of its correct TIN by completing the Substitute Form W-9 below and certifying on Substitute Form W-9 that the TIN provided is correct (or that the holder is awaiting a TIN). In addition, a holder is required to certify on Substitute Form W-9 that (i) it is exempt from backup withholding, or (ii) it is not subject to backup withholding due to prior underreporting of interest or dividend income, or (iii) the Internal Revenue Service (the “IRS”) has notified the holder that the holder is no longer subject to backup withholding.

What Number to Give the Exchange Agent

To avoid backup withholding with respect to interest payments on the New Notes, a holder is required to give the exchange agent the TIN of the registered holder of the New Notes. If such registered holder is an individual, the TIN is the taxpayer’s social security number. For most other entities, the TIN is the employer identification number. If the New Notes are in more than one name or are not in the name of the actual owner, consult the enclosed Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9 for additional guidelines on what number to report. If the exchange agent is provided with an incorrect TIN, the holder may be subject to a $50 penalty imposed by the IRS.

12. Waiver of Conditions. The Issuer and the Subsidiary Guarantors reserve the absolute right to waive satisfaction of any or all conditions, completely or partially, enumerated in the Prospectus.

13. No Conditional Tenders. No alternative, conditional or contingent tenders will be accepted. All tendering holders of Old Notes, by execution of this letter of transmittal, shall waive any right to receive notice of the acceptance of Old Notes for exchange.

None of the Issuer and the Subsidiary Guarantors, any of their respective affiliates or assigns, the exchange agent or any other person is under any obligation to give notice of any defect or irregularity with respect to any tender of Old Notes, nor will any of them incur any liability for failing to give any such notice.

14. Mutilated, Lost, Destroyed or Stolen Certificates. If any certificate(s) representing Old Notes have been mutilated, lost, destroyed or stolen, the holder should promptly notify the exchange agent. The holder will

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then be instructed as to the steps that must be taken in order to replace the certificate(s). This letter of transmittal and related documents cannot be processed until the procedures for replacing lost, destroyed or stolen certificate(s) have been followed.

15. Security Transfer Taxes. Except as provided below, holders who tender their Old Notes for exchange will not be obligated to pay any transfer taxes in connection therewith. If, however, (i) New Notes are to be delivered to, or are to be issued in the name of, any person other than the registered holder of the Old Notes tendered or (ii) a transfer tax is imposed for any reason other than the exchange of Old Notes in connection with the exchange offer, then the amount of any such transfer tax (whether imposed on the registered holder or any other persons) will be payable by the tendering holder or such other person. The exchange agent must receive satisfactory evidence of the payment of such taxes or exemption therefrom or the amount of such transfer taxes will be billed directly to the tendering holder.

Except as provided in this Instruction 15, it is not necessary for transfer tax stamps to be affixed to the Old Notes specified in this letter of transmittal.

16. Incorporation of Letter of Transmittal. This letter of transmittal shall be deemed to be incorporated in any tender of Old Notes by any DTC participant effected through procedures established by DTC and, by virtue of such tender, such participant shall be deemed to have acknowledged and accepted this letter of transmittal on behalf of itself and the beneficial owners of any Old Notes so tendered.

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REQUESTER’S NAME: THE BANK OF NEW YORK

SUBSTITUTE
Form	Please fill in your name and address below:
W-9
Department of the Treasury
Internal Revenue Service	Name
Payer’s Request for Taxpayer
Identification Number (“TIN”)
	Address (number, street, city, state and zip code)
	Please check the appropriate box: ¨ Individual Sole Proprietor    ¨ Corporation    ¨ Partnership    ¨ Other
	Part 1–PLEASE PROVIDE YOUR TIN, OR, IF YOU DO NOT HAVE A TIN, WRITE “APPLIED FOR,” IN THE BOX AT RIGHT AND CERTIFY BY SIGNING AND DATING BELOW.	Social Security Number or Employer Identification Number
	Part 2–Certification–Under penalties of perjury, I certify that:
	(1) the number shown on this form is my correct Taxpayer Identification Number (or I am waiting for a number to be issued to me); and
	(2) I am not subject to backup withholding either because (a) I am exempt from backup withholding, or (b) I have not been notified by the Internal Revenue Service (“IRS”) that I am subject to backup withholding as a result of failure to report all interest or dividends, or (c) the IRS has notified me that I am no longer subject to backup withholding; and
	(3) I am a U.S. person.
	Certification Instructions–You must cross out item (2) in Part 2 above if you have been notified by the IRS that you are subject to backup withholding because of under reporting interest or dividends on your tax return. However, if after being notified by the IRS that you were subject to backup withholding you received another notification from the IRS stating that you are no longer subject to backup withholding, do not cross out item (2).
	SIGNATURE                                                    Date:

NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING ON ANY PAYMENTS MADE TO YOU PURSUANT TO THE EXCHANGE OFFER. PLEASE REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL INFORMATION.

YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU WROTE “APPLIED FOR” ON SUBSTITUTE FORM W-9.

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CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER

I certify under penalties of perjury that a taxpayer identification number has not been issued to me, and either (a) I have mailed or delivered an application to receive a taxpayer identification number to the appropriate Internal Revenue Service Center or Social Security Administration Officer or (b) I intend to mail or deliver an application in the near future. I understand that until I provide a taxpayer identification number all reportable payments made to me will be subject to backup withholding, but will be refunded if I provide a certified taxpayer identification number within 60 days.

Signature Date

16

GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION

NUMBER ON SUBSTITUTE FORM W-9

Guidelines for Determining the Proper Identification Number for the Payee (You) to Give the Payer. Social security numbers have nine digits separated by two hyphens: i.e., 000-00-0000. Employee identification numbers have nine digits separated by only one hyphen: i.e., 00-0000000. The table below will help determine the number to give the payer. All “Section” references are to the Internal Revenue Code of 1986, as amended. “IRS” is the Internal Revenue Service.

For this type of account:	Give the name and social security number of	For this type of account:	Give the name and employer identification number of
1.     Individual	The individual	6.     Sole proprietorship	The owner (3)
2.     Two or more individuals (joint account)	The actual owner of the account or, if combined funds, the first individual on the account (1)	7.     A valid trust, estate, or pension trust	The legal entity (4)
3.     Custodian account of a minor	The minor (2)	8.     Corporate	The corporation
4.a.  The usual revocable savings trust account (grantor is also trustee)	The grantor-trustee (1)	9.     Association, club, religious, charitable, educational or tax-exempt organization	The organization
b.  So-called trust account that is not a legal or valid trust under state law	The actual owner (1)	10.   Partnership	The partnership
5.     Sole proprietorship	The owner (3)	11.   A broker or registered nominee	The public entity
		12.   Account with the Department of Agriculture in the name of a public entity (such as a state or local government, school district, or prison) that receives agricultural program payments

(1) List first and circle the name of the person whose number you furnish. If only one person on a joint account has a social security number, that person’s number must be furnished.

(2) Circle the minor’s name and furnish the minor’s social security number.

(3) You must show your individual name, but you may also enter your business or “doing business as” name. You may use either your social security number or your employer identification number (if you have one).

(4) List first and circle the name of the legal trust, estate, or pension trust. (Do not furnish the taxpayer identification number of the personal representative or trustee unless the legal entity itself is not designated in the account title.)

NOTE: If no name is circled when there is more than one name, the number will be considered to be that of the first name listed.

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GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION

NUMBER ON SUBSTITUTE FORM W-9

Obtaining a Number

If you do not have a taxpayer identification number or you do not know your number, obtain Form SS-5, Application for a Social Security Card, at the local Social Administration office, or Form SS-4, Application for Employer Identification Number, by calling 1 (800) TAX FORM or visiting the IRS’s Internet website at www.irs.gov, and apply for a number.

If you do not have a taxpayer identification number, write “Applied For” in the space for the taxpayer identification number, sign and date the form, and return it to the payer. For interest and dividend payments and certain payments made with respect to readily tradable instruments, you will generally have 60 days to get a taxpayer identification number and give it to the payer before you are subject to backup withholding. Other payments are subject to backup withholding without regard to the 60-day rule until you provide your taxpayer identification number.

NOTE: Writing “Applied For” means that you have already applied for a taxpayer identification number or that you intend to apply for one soon.

Payees Exempt from Backup Withholding

Payees specifically exempted from withholding include:

• An organization exempt from tax under Section 501(a), an individual retirement account (IRA), or a custodial account under Section 403(b)(7), if the account satisfies the requirements of Section 401(f)(2).

• The United States or a state thereof, the District of Columbia, a possession of the United States, or a political subdivision or instrumentality of any one or more of the foregoing.

• An international organization or any agency or instrumentality thereof.

• A foreign government or any political subdivision, agency or instrumentality thereof.

Payees that may be exempt from backup withholding include:

• A corporation.

• A financial institution.

• A dealer in securities or commodities required to register in the United States, the District of Columbia, or a possession of the United States.

• A real estate investment trust.

• A common trust fund operated by a bank under Section 584(a).

• An entity registered at all times during the tax year under the Investment Company Act of 1940.

• A middleman known in the investment community as a nominee or custodian.

• A futures commission merchant registered with the Commodity Futures Trading Commission.

• A foreign central bank of issue.

• A trust exempt from tax under Section 664 or described in Section 4947.

Payments of dividends and patronage dividends generally exempt from backup withholding include:

• Payments to nonresident aliens subject to withholding under Section 1441.

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• Payments to partnerships not engaged in a trade or business in the United States and that have at least one nonresident alien partner.

• Payments of patronage dividends not paid in money.

• Payments made by certain foreign organizations.

• Section 404(k) payments made by an ESOP.

Payments of interest generally exempt from backup withholding include:

• Payments of interest on obligations issued by individuals. Note: You will be subject to information reporting if this interest is $600 or more and may be subject to backup withholding if you have not provided your correct taxpayer identification number to the payer.

• Payments of tax-exempt interest (including exempt-interest dividends under Section 852).

• Payments described in Section 6049(b)(5) to nonresident aliens.

• Payments on tax-free covenant bonds under Section 1451.

• Payments made by certain foreign organizations.

• Mortgage or student loan interest paid to you.

Certain payments, other than payments of interest, dividends, and patronage dividends, that are exempt from information reporting are also exempt from backup withholding. For details, see the regulations under Sections 6041, 6041A, 6042, 6044, 6045, 6049, 6050A and 6050N.

Exempt payees described above must provide Form W-9 or a substitute Form W-9 to avoid possible erroneous backup withholding. FURNISH YOUR TAXPAYER IDENTIFICATION NUMBER, WRITE “EXEMPT” IN PART 2 OF THE FORM, SIGN AND DATE THE FORM, AND RETURN IT TO THE PAYER.

Privacy Act Notice—Section 6109 requires you to provide your correct taxpayer identification number to the payer, who must report the payments to the IRS. The IRS uses the numbers for identification purposes and may also provide this information to various government agencies for tax enforcement or litigation purposes. Payers must be given the numbers whether or not recipients are required to file tax returns. Payers must generally withhold a percentage of taxable interest, dividends, and certain other payments to a payee who does not furnish a taxpayer identification number to a payer. Certain penalties may also apply.

Penalties

(1) Failure to Furnish Taxpayer Identification Number.—If you fail to furnish your taxpayer identification number to the payer, you are subject to a penalty of $50 for each such failure unless your failure is due to reasonable cause and not to willful neglect.

(2) Civil Penalty for False Information With Respect to Withholding.—If you make a false statement with no reasonable basis that results in no backup withholding, you are subject to a $500 penalty.

(3) Criminal Penalty for Falsifying Information.—Willfully falsifying certifications or affirmations may subject you to criminal penalties including fines and/or imprisonment.

FOR ADDITIONAL INFORMATION CONTACT YOUR TAX CONSULTANT

OR THE INTERNAL REVENUE SERVICE

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EX-99.2

Exhibit 99.2

NOTICE OF GUARANTEED DELIVERY

UNITED REFINING COMPANY

offer for all outstanding

10 ½% Senior Notes due 2012

and the related guarantees

in exchange for 10 ½% Senior Notes due 2012

and the related guarantees

which have been registered under

the Securities Act of 1933, as amended,

pursuant to the prospectus dated                     , 2004

This notice of guaranteed delivery, or one substantially equivalent to this form, must be used to accept the above-referenced exchange offer (the “Exchange Offer”) pursuant to the prospectus of United Refining Company, a Pennsylvania corporation (the “Issuer”), and certain subsidiaries of the Issuer (collectively the “Guarantors”), dated                     , 2004, as the same may be amended or supplemented from time to time (the “Prospectus”) and the accompanying letter of transmittal (the “Letter of Transmittal”), if (i) certificates for the Issuer’s 10 ½% Senior Notes due 2012 (the “Old Notes”) are not immediately available or all required documents are unlikely to reach the exchange agent, Bank One, N.A., on or prior to the Expiration Date, as defined below; or (ii) a book-entry transfer cannot be completed on a timely basis. This notice of guaranteed delivery may be delivered by hand, facsimile, mail or overnight delivery service to the exchange agent. See “The Exchange Offer—Procedures for Tendering Old Notes” in the Prospectus. In addition, in order to utilize the guaranteed delivery procedure to tender Old Notes pursuant to the Exchange Offer, (a) such tender must be made by or through an eligible institution, (b) a properly completed and duly executed notice of guaranteed delivery must be received by the exchange agent on or prior to the Expiration Date and (c) the certificates for the Old Notes, or a book-entry confirmation, together with a properly completed and duly executed Letter of Transmittal, or an agent’s message in lieu thereof, with any required signature guarantees and any other documents required by the Letter of Transmittal, must be received by the exchange agent within three (3) New York Stock Exchange trading days after the date of execution of such notice of guaranteed delivery for all such tendered Old Notes. Unless indicated otherwise, capitalized terms used but not defined herein shall have the same meaning given to them in the Prospectus or the Letter of Transmittal, as the case may be.

THE EXCHANGE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON                     , 2004, UNLESS EXTENDED (SUCH TIME AND DATE, AS SO EXTENDED, THE “EXPIRATION DATE”). TENDERS MAY BE WITHDRAWN PRIOR TO THE EXPIRATION DATE.

The exchange agent for the exchange offer is:

The Bank of New York

For delivery by mail, hand or overnight:

The Bank of New York

Corporate Trust Operations

Reorganization Unit

101 Barclay Street — Floor 7E

New York, NY 10286

Attention: Mr. Enrique Lopez

For delivery by facsimile (for eligible institutions only):

(212) 298-1915

Attention: Mr. Enrique Lopez,

Reorganization Unit — Floor 7E

For confirmation by telephone call:

(212) 815-2742

Delivery of this notice of guaranteed delivery to an address other than as set forth above or transmission of this notice of guaranteed delivery via facsimile to a number other than as set forth above will not constitute a valid delivery.

This notice of guaranteed delivery is not to be used to guarantee signatures. If a signature on the Letter of Transmittal is required to be guaranteed by an “eligible institution” under the instructions thereto, such signature guarantee must appear in the applicable space provided in the signature box on the Letter of Transmittal.

Ladies and Gentlemen:

The undersigned hereby tenders to the Issuer, upon the terms and subject to the conditions set forth in the Prospectus and the Letter of Transmittal, and which together constitute the Exchange Offer, receipt of which is hereby acknowledged, the aggregate principal amount of Old Notes set forth below pursuant to the guaranteed delivery procedures set forth in the Prospectus under the caption “The Exchange Offer—Procedures for Tendering Old Notes—Guaranteed Delivery.”

Aggregate Principal Amount Name(s) of Registered Holder(s):

Tendered: $            *

Certificate No(s). (if available):

$
	(Total Principal Amount Represented by Old Note Certificate(s))
If Old Notes will be tendered by book-entry transfer, provide the following information:

DTC Account Number:

Date:

* Must be in integral multiples of $1,000.

All authority herein conferred or agreed to be conferred shall survive the death or incapacity of the undersigned and every obligation of the undersigned hereunder shall be binding upon the heirs, personal representatives, successors and assigns of the undersigned.

PLEASE SIGN HERE

X
X
Signature(s) of Owner(s) or Authorized Signatory	Date

Telephone Number:

2

Must be signed by the holder(s) of the Old Notes as their name(s) appear(s) on certificates for the Old Notes or on a security position listing, or by person(s) authorized to become registered holder(s) by endorsement and documents transmitted with this notice of guaranteed delivery. If signature is by a trustee, executor, administrator, guardian, attorney-in-fact, officer or other person acting in a fiduciary or representative capacity, such person must set forth his or her full title below and, unless waived by the Issuer, provide proper evidence satisfactory to the Issuer, in its sole discretion, of such person’s authority to so act.

Please print name(s) and address(es)

Name(s):

Capacity

Address(es): 

3

GUARANTEE OF DELIVERY

(Not to be used for signature guarantee)

The undersigned, a firm or other entity which is identified as an “Eligible Guarantor Institution” in Rule 17Ad-15 under the Securities and Exchange Act of 1934, as amended, including: a bank; a broker, dealer, municipal securities broker or dealer or government securities broker or dealer; a credit union; a national securities exchange, registered securities association or clearing agency; or a savings association, each of the foregoing being referred to as an “eligible institution,” hereby guarantees to deliver to the exchange agent, at the address set forth herein, either the Old Notes tendered hereby in proper form for transfer, or confirmation of the book-entry transfer of such Old Notes to the exchange agent’s account at DTC, pursuant to the procedures for book-entry transfer set forth in the Prospectus, in either case together with a properly completed and duly executed Letter of Transmittal, or an agent’s message in lieu thereof, and any other required documents within three (3) New York Stock Exchange trading days after the date of execution of this notice of guaranteed delivery.

The undersigned acknowledges that it must deliver to the exchange agent the Letter of Transmittal, or an agent’s message in lieu thereof, and the Old Notes tendered hereby in proper form for transfer or confirmation of the book-entry transfer of such Old Notes to the exchange agent’s account at DTC within the time period set forth above and that failure to do so could result in a financial loss to the undersigned.

Name of Firm	Authorized Signature
Address	Title
Zip Code (Please Type or Print)

Telephone Number:  Date:  

NOTE: DO NOT SEND CERTIFICATES FOR OLD NOTES WITH THIS FORM. CERTIFICATES FOR OLD NOTES SHOULD ONLY BE SENT WITH THE PROPERLY COMPLETED AND DULY EXECUTED LETTER OF TRANSMITTAL.

4

EX-99.3

Exhibit 99.3

UNITED REFINING COMPANY

offer for all outstanding

10 ½% Senior Notes due 2012

and the related guarantees

in exchange for

10 ½% Senior Notes due 2012

and the related guarantees

which have been registered under

the Securities Act of 1933, as amended,

pursuant to the prospectus dated                 , 2004

THE EXCHANGE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON                 , 2004, UNLESS EXTENDED (SUCH TIME AND DATE, AS SO EXTENDED, THE “EXPIRATION DATE”). TENDERS MAY BE WITHDRAWN PRIOR TO THE EXPIRATION DATE.

To Brokers, Dealers, Commercial Banks,

Trust Companies and other Nominees:

United Refining Company, a Pennsylvania corporation (the “Issuer”), and certain subsidiaries of the Issuer (collectively the “Guarantors”) are making an offer, referred to as the exchange offer, to exchange an aggregate principal amount of up to $200,000,000 of the Issuer’s 10 ½% Senior Notes due 2012, including the guarantees thereof by the Guarantors, which have been registered under the Securities Act of 1933, as amended, (the “New Notes”), for a like principal amount of the Issuer’s outstanding 10 ½% Senior Notes due 2010, including the guarantees thereof by the Guarantors (the “Old Notes”), upon the terms and subject to the conditions set forth in the prospectus dated                 , 2004 and in the related letter of transmittal. Unless indicated otherwise, capitalized terms used but not defined herein shall have the same meaning given to them in the prospectus or the letter of transmittal, as the case may be.

Enclosed herewith are copies of the following documents:

1.    the prospectus;

2.    the letter of transmittal for your use and for the information of your clients, including a substitute Internal Revenue Service Form W-9 for collection of information relating to backup United States federal income tax withholding;

3.    a notice of guaranteed delivery to be used to accept the exchange offer with respect to Old Notes in certificated form or Old Notes accepted for clearance through the facilities of The Depository Trust Company if (i) certificates for the Old Notes are not immediately available or all required documents are unlikely to reach the exchange agent on or prior to the expiration date or (ii) a book-entry transfer cannot be completed on a timely basis;

4.    a form of letter which may be sent to your clients for whose account you hold Old Notes in your name or in the name of a nominee, with space provided for obtaining such clients’ instructions with regard to the exchange offer; and

5.    return envelopes addressed to The Bank of New York, the exchange agent for the exchange offer.

PLEASE NOTE THAT THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON                 , 2004, UNLESS EXTENDED. WE URGE YOU TO CONTACT YOUR CLIENTS AS PROMPTLY AS POSSIBLE.

The Issuer has not retained any dealer-manager in connection with the exchange offer and will not pay any fee or commission to any broker, dealer, nominee or other person, other than the exchange agent, for soliciting tenders of Old Notes pursuant to the exchange offer. You will be reimbursed by the Issuer for customary mailing and handling expenses incurred by you in forwarding the enclosed materials to your clients and for handling or tendering for your clients.

Additional copies of the enclosed materials may be obtained by contacting the exchange agent as provided in the enclosed letter of transmittal.

Very truly yours,

United Refining Company

NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU OR ANY OTHER PERSON AS AN AGENT OF THE ISSUER, ANY OF THE GUARANTORS OR THE EXCHANGE AGENT, OR AUTHORIZE YOU OR ANY OTHER PERSON TO GIVE ANY INFORMATION OR MAKE ANY REPRESENTATION ON BEHALF OF ANY OF THEM WITH RESPECT TO THE EXCHANGE OFFER NOT CONTAINED IN THE PROSPECTUS OR THE LETTER OF TRANSMITTAL.

2

EX-99.4

Exhibit 99.4

UNITED REFINING COMPANY

offer for all outstanding

10 ½% Senior Notes due 2012

and the related guarantees

in exchange for

10 ½% Senior Notes due 2012

and the related guarantees

which have been registered under

the Securities Act of 1933, as amended,

pursuant to the prospectus dated                 , 2004

THE EXCHANGE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON                 , 2004, UNLESS EXTENDED (SUCH DATE AND TIME, AS SO EXTENDED, THE “EXPIRATION DATE”). TENDERS MAY BE WITHDRAWN PRIOR TO THE EXPIRATION DATE.

To Our Clients:

Enclosed for your consideration is a prospectus dated             , 2004 and the related letter of transmittal and instructions thereto in connection with the offer, referred to as the exchange offer, of United Refining Company, a Pennsylvania corporation (the “Issuer”), and certain subsidiaries of the Issuer (collectively the “Subsidiary Guarantors”), to exchange an aggregate principal amount of up to $200,000,000 of the Issuer’s 10 ½% Senior Notes due 2012, together with the guarantees thereof by the Subsidiary Guarantors, which have been registered under the Securities Act of 1933, as amended, (the “New Notes”), for a like principal amount of the Issuer’s outstanding 10 ½% Senior Notes due 2012, together with the guarantees thereof by the Subsidiary Guarantors, (the “Old Notes”), upon the terms and subject to the conditions set forth in the prospectus and the letter of transmittal. Consummation of the exchange offer is subject to certain conditions described in the prospectus. Unless indicated otherwise, capitalized terms used but not defined herein shall have the same meaning given to them in the prospectus or the letter of transmittal, as the case may be.

WE ARE THE REGISTERED HOLDER OF OLD NOTES HELD BY US FOR YOUR ACCOUNT. A TENDER OF ANY SUCH OLD NOTES CAN BE MADE ONLY BY US AS THE REGISTERED HOLDER AND PURSUANT TO YOUR INSTRUCTIONS. THE LETTER OF TRANSMITTAL IS FURNISHED TO YOU FOR YOUR INFORMATION ONLY AND CANNOT BE USED BY YOU TO TENDER OLD NOTES HELD BY US FOR YOUR ACCOUNT.

Accordingly, we request instructions as to whether you wish us to tender any or all such Old Notes held by us for your account pursuant to the terms and conditions set forth in the prospectus and the letter of transmittal. WE URGE YOU TO READ THE PROSPECTUS AND THE LETTER OF TRANSMITTAL CAREFULLY BEFORE INSTRUCTING US TO TENDER YOUR OLD NOTES.

Your instructions to us should be forwarded as promptly as possible in order to permit us to tender Old Notes on your behalf in accordance with the provisions of the exchange offer. THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME ON             , 2004, UNLESS EXTENDED. Old Notes tendered pursuant to the exchange offer may be withdrawn only under the circumstances described in the prospectus and the letter of transmittal.

Your attention is directed to the following:

1.    The exchange offer is for the entire aggregate principal amount of outstanding Old Notes.

2.    Consummation of the exchange offer is conditioned upon the terms and conditions set forth in the prospectus under “The Exchange Offer.”

3.    Tendering holders may withdraw their tender at any time prior to the Expiration Date.

4.    Any transfer taxes incident to the transfer of Old Notes from the tendering holder to the Issuer will be paid by the Issuer, except as provided in the prospectus and the instructions to the letter of transmittal.

5.    The exchange offer is not being made to, nor will the surrender of Old Notes for exchange be accepted from or on behalf of, holders of Old Notes in any jurisdiction in which the exchange offer or acceptance thereof would not be in compliance with the securities or blue sky laws of such jurisdiction.

6.    The acceptance for exchange of Old Notes validly tendered and not withdrawn will be effected as soon as practicable after the Expiration Date and the issuance of New Notes will be made as promptly as practicable thereafter.

7.    The Issuer and the Subsidiary Guarantors expressly reserve the right, in their reasonable discretion and in accordance with applicable law, (i) to extend the Expiration Date, (ii) to delay the acceptance of any Old Notes, (iii) to terminate the exchange offer and not accept any Old Notes for exchange if the Issuer and the Subsidiary Guarantors determine that any of the conditions to the exchange offer, as set forth in the prospectus, have not occurred or have not been satisfied and (iv) to amend the terms of the exchange offer in any manner. In the event of any extension, delay, non-acceptance, termination or amendment, the Issuer and the Subsidiary Guarantors will as promptly as practicable give oral or written notice of the action to the exchange agent and make a public announcement of such action. In the case of an extension, the announcement will be made no later than 9:00 a.m., New York City time, on the next business day after the previously scheduled Expiration Date.

8.    Consummation of the exchange offer may have adverse consequences to non-tendering Old Note holders, including that the reduced amount of outstanding Old Notes as a result of the exchange offer may adversely affect the trading market, liquidity and market price of the Old Notes.

If you wish to have us tender any or all of the Old Notes held by us for your account, please so instruct us by completing, executing and returning to us the instruction form that follows.

2

UNITED REFINING COMPANY

INSTRUCTIONS REGARDING THE EXCHANGE OFFER

WITH RESPECT TO THE

$200,000,000 OF 10 ½% SENIOR NOTES DUE 2012

AND THE RELATED GUARANTEES

THE UNDERSIGNED ACKNOWLEDGES RECEIPT OF YOUR LETTER AND THE ENCLOSED DOCUMENTS REFERRED TO THEREIN RELATING TO THE EXCHANGE OFFER OF THE ISSUER AND THE SUBSIDIARY GUARANTORS WITH RESPECT TO THE OLD NOTES.

THIS WILL INSTRUCT YOU WHETHER TO TENDER THE PRINCIPAL AMOUNT OF OLD NOTES INDICATED BELOW HELD BY YOU FOR THE ACCOUNT OF THE UNDERSIGNED PURSUANT TO THE TERMS OF AND CONDITIONS SET FORTH IN THE PROSPECTUS AND THE LETTER OF TRANSMITTAL.

Box 1    ¨    Please tender the Old Notes held by you for my account, as indicated below.

Box 2    ¨    Please do not tender any Old Notes held by you for my account.

Date                                                                                     , 2004	Signature(s)
Principal Amount of Old Notes to be Tendered: $                                                                                                     * (must be in the principal amount of $1,000 or an integral multiple thereof)	Please Print Name(s) Here Please Type or Print Address Area Code and Telephone Number Taxpayer Identification or Social Security Number My Account Number with You

* UNLESS OTHERWISE INDICATED, SIGNATURE(S) HEREON BY BENEFICIAL OWNER(S) SHALL CONSTITUTE AN INSTRUCTION TO THE NOMINEE TO TENDER ALL OLD NOTES OF SUCH BENEFICIAL OWNER(S)

3