EXHIBIT 10.1
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (the "Agreement") is made and
entered into this lst day of July, 2003, between Valero Energy Corporation, a
Delaware corporation (the "Company"), and Orion Refining Corporation, a Delaware
corporation ("Orion").
W I T N E S S E T H:
WHEREAS, concurrently with the execution and delivery of this
Agreement, the Company is issuing to Orion preferred stock ("Preferred Stock")
which is convertible into common stock, $.01 par value, of the Company ("Common
Stock") pursuant to a Purchase and Sale Agreement dated as of May 13, 2003, and,
in connection with that issuance, the Company has agreed to provide the
following persons or entities with registration rights as provided herein: (i)
Orion, (ii) any trustee appointed in the bankruptcy of Orion (a "Trustee"),
(iii) any trust or other entity created as part of the bankruptcy of Orion for
the benefit of any equity holder, debtholder or other creditor of Orion (each,
an "Orion Trust") to which Securities are Transferred and (iv) any Transferee
(as defined herein), including without limitation any of the stockholders and
debtholders of Orion who acquire the Preferred Stock through the bankruptcy
proceedings of Orion, (Orion, any Trustees, any Orion Trusts and any Transferees
are collectively referred to herein as the "Holders"). The Preferred Stock and
the Common Stock issuable upon conversion of the Preferred Stock are
collectively referred to as "Securities" and each referred to singularly as a
"Security." Capitalized terms used but not defined herein shall have the
meanings ascribed to them in the Purchase and Sale Agreement.
In consideration of the foregoing, the parties hereto agree as follows:
1. Shelf Registration. So long as any Transfer Restricted
Security (as defined in Section 5 hereof) exists until the second anniversary of
the date of issuance of the Preferred Stock, the Company shall take the
following actions:
(a) The Company shall, within ten days after the date of
issuance of the Preferred Stock, file with the Securities and Exchange
Commission (the "Commission") and thereafter use its commercially
reasonable best efforts to cause to be declared effective as soon as
practicable following such filing (but in any event no later than 90
days after the date of issuance of the Preferred Stock) a registration
statement (the "Shelf Registration Statement") on an appropriate form
under the Securities Act relating to the offer and sale of the Transfer
Restricted Securities by the Holders thereof from time to time in
accordance with the methods of distribution set forth in the Shelf
Registration Statement and Rule 415 (or any successor provision) under
the Securities Act (hereinafter, the "Shelf Registration"); provided,
however, that no Holder shall be entitled to have the Securities held
by it covered by such Shelf Registration Statement unless such Holder
agrees in writing to be bound by all the provisions of this Agreement
applicable to such Holder.
(b) The Company shall use its commercially reasonable
best efforts to keep the Shelf Registration Statement continuously
effective, and, when necessary for that purpose, to amend the Shelf
Registration Statement or to supplement the prospectus included therein
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all as required by the Securities Act, in order to permit the
prospectus included therein to be lawfully delivered by the Holders of
the relevant Securities, until such time as all the Securities covered
by the Shelf Registration Statement have been sold pursuant thereto or
are eligible to be sold under Rule 144(k) under the Securities Act (or
any successor rule thereof), assuming for this purpose that the Holders
thereof are not affiliates of the Company (in any such case, such
period being called the "Shelf Registration Period"); provided,
however, that the Company shall not be obligated to keep such Shelf
Registration Statement usable during a Suspension Period (as defined
below) if:
(i) (A) at such time the Company is engaged in
confidential negotiations or other confidential business
activities and (B) the Company determines, in its reasonable
judgment, upon advice of counsel, that the continued usability
of such Shelf Registration Statement (x) would require the
disclosure of such confidential negotiations or other
confidential business activities (but disclosure would not be
otherwise required) and (y) such disclosure could be
reasonably be expected to be detrimental to the Company in any
material respect (a "Confidential Event");
(ii) the Company determines, in its reasonable
judgment, upon written advice of a nationally recognized
investment banking firm selected by the Company to the effect
that resales of the Transfer Restricted Securities pursuant to
the Shelf Registration Statement could reasonably be expected
to interfere in any material respect with the success of a
public offering by the Company of its equity securities for
which the Company has a good faith intention to promptly
commence marketing efforts or other material transaction in
which the Company is engaged involving the issuance of equity
securities by the Company (a "Company Offering Event"); or
(iii) any event occurs or facts are discovered
("Misstatement Event") which make any statement made in such
Shelf Registration Statement or the related prospectus untrue
in any material respect or which require the making of any
changes in such Registration Statement or prospectus in order
to make the statements therein not misleading (a "Material
Misstatement") and the Company thereafter complies with the
requirements of Section 2(h) hereof;
provided, further, that the failure to keep such Shelf Registration Statement
usable for offers and sales of Securities for any of the foregoing reasons (X)
for the first six months following the effective date of the Shelf Registration
Statement, shall occur no more than once and in such instance shall last no
longer than 30 days, and (Y) after the sixth-month anniversary of such effective
date, shall occur no more than four times in any 365 day period and shall last
no longer than 60 days in any 365 day period; provided, further, that the
failure to keep such Shelf Registration Statement usable for offers and sales of
Securities for a single Company Offering Event or a single Misstatement Event
shall last no longer than 30 days in respect of such event. Any such period
during which the Company is excused from keeping the Shelf Registration
Statement usable for offers and sales of Securities is referred to herein as a
"Suspension Period"; a Suspension Period shall commence on and include the date
that the Company gives prompt notice to the Holders that the Shelf Registration
Statement and the prospectus included therein is no longer usable for offers and
sales of Securities as a result of the application of the proviso (which
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contains clauses (i), (ii) and (iii)) of the foregoing sentence and shall end on
the earliest to occur of (1) in the event of a Confidential Event, two business
days following the public announcement by the Company of the related
transaction, (2) in the event of a Confidential Event or a Company Offering
Event, the abandonment by the Company of negotiations regarding the Confidential
Event or the Company Offering (upon which the Company shall promptly notify the
Holders in writing), (3) in the event of a Misstatement Event, two business days
following the day on which, whether through the filing of an amendment to the
Registration Statement, the making of another filing with the Commission or
otherwise, there is no longer a Material Misstatement, (4) the date on which
each Holder of Securities covered by the Shelf Registration Statement either
receives the copies of the supplemented or amended prospectus contemplated by
Section 2(h) hereof or is advised in writing by the Company, which shall occur
as promptly as practicable following its determination, that use of the
prospectus may be resumed, (5) the expiration of 60 days in the aggregate in any
365 day period and (6) in the event of a Company Offering Event or a
Misstatement Event, the expiration of 30 days. The Company shall extend the
Shelf Registration Period by the number of days during any Suspension Period or
any period during which the prospectus has been suspended pursuant to Section
2(h). Notwithstanding anything contained in this Section 1 to the contrary, the
Company shall not be excused from keeping the Shelf Registration Statement
usable for offers and sales of Securities during any applicable Holder Resale
Period due to a Company Offering Event of which the Holders did not have notice
prior to initiating such Holder Resale Period, unless on or after the date of
the commencement of the applicable Holder Resale Period and prior to the later
to occur of 9:00 p.m., Houston time, on the business day immediately following
the date of such commencement or 48 hours from receipt of notice of the
commencement of a Holder Resale Period, the Company provides written notice to
such Holders that the Company elects to commence a Suspension Period as a result
of a Company Offering Event in accordance with the terms of this Section 1. A
"Holder Resale Period" shall mean a period commencing on the day that Holders of
at least 25% of the Transfer Restricted Securities shall have provided written
notice to the Company of a current intention to sell Transfer Restricted
Securities pursuant to the Shelf Registration Statement and ending at 5:00 p.m.,
Houston time, on the 12th business day thereafter.
(c) Notwithstanding any other provisions of this
Agreement to the contrary, the Company shall cause the Shelf
Registration Statement and the related prospectus and any amendment or
supplement thereto, as of the effective date of the Shelf Registration
Statement or any amendment and as of the date of the related prospectus
or any supplement, (i) to comply in all material respects with the
applicable requirements of the Securities Act and the rules and
regulations of the Commission and (ii) not to contain any untrue
statement of a material fact or omit to state a material fact required
to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading; provided, however, the Company shall have no such
obligations or liabilities with respect to any written information
pertaining to any Holder and furnished to the Company by or on behalf
of such Holder specifically for inclusion therein.
(d) The Shelf Registration Statement shall not include
any securities other than the Securities.
(e) The methods of distribution of the Securities
specified in the Shelf Registration Statement shall include, without
limitation, an offering "at market," a firm underwriting and a "best
efforts" underwriting.
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2. Registration Procedures. In connection with the Shelf
Registration contemplated by Section 1 hereof and the intended method of
disposition thereof, the following provisions shall apply so long as any
Transfer Restricted Security exists:
(a) The Company shall (i), if requested by Orion or a
Holder of more than 15% of the Transfer Restricted Securities, furnish,
without charge, to Orion or such Holder, prior to the filing thereof
with the Commission on a timely basis so as to permit review thereof, a
copy of the Shelf Registration Statement and each amendment thereof and
each supplement, if any, to the prospectus included therein (except any
supplement reflecting only previous sales by the Holders listed
therein) and, in the event that Orion or such Holder is participating
in the Shelf Registration Statement, the Company shall use its best
efforts to reflect in each such document, when so filed with the
Commission, such comments as Orion or such Holder reasonably may
propose, (ii) include in each such document the names of the Holders
who have delivered written notice to the Company at least three
business days prior to the filing thereof that they propose to sell
Transfer Restricted Securities pursuant to the Shelf Registration
Statement as selling securityholders and (iii) file pursuant to Rule
424(b) under the Securities Act, or as otherwise required by the
Securities Act, an amendment to the Shelf Registration Statement or
supplement the prospectus to cover new Holders of Securities upon at
least seven business days' prior written notice by such new Holders to
such effect.
(b) The Company shall give written notice to Orion, the
Holders of the Securities and the Holders of Transfer Restricted
Securities included within the coverage of the Shelf Registration
Statement (which notice pursuant to clauses (ii)-(v) hereof shall be
accompanied by an instruction to suspend the use of the prospectus
until the requisite changes have been made):
(i) (1) when the Shelf Registration Statement or
any amendment or supplement thereto has been filed with the
Commission and (2) when the Shelf Registration Statement or
any post-effective amendment thereto has become effective;
(ii) of any request by the Commission for
amendments or supplements to the Shelf Registration Statement
after it has been declared effective or the prospectus
included therein or for additional information;
(iii) of the issuance by the Commission of any
stop order suspending the effectiveness of the Shelf
Registration Statement or the initiation of any proceedings
for that purpose;
(iv) of the receipt by the Company or its legal
counsel of any notification with respect to the suspension of
the qualification of the Securities for sale in any
jurisdiction or the initiation or threatening of any
proceeding for such purpose; and
(v) of the happening of any event that requires
the Company to make changes in the Shelf Registration
Statement or the prospectus in order that the Shelf
Registration Statement or the prospectus do not contain an
untrue statement of a
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material fact nor omit to state a material fact required to be
stated therein or necessary to make the statements therein (in
the case of the prospectus, in light of the circumstances
under which they were made) not misleading.
The Company shall also give notice to Orion and one person designated
by the Holders of a majority of the Transfer Restricted Securities to
act on behalf of the Holders of the receipt of any comments from the
Commission or the staff thereof on the Shelf Registration Statement or
the receipt of any other written communications from the Commission or
the staff thereof in respect of the Shelf Registration Statement.
(c) The Company shall make every commercially reasonable
effort to obtain the withdrawal at the earliest possible time, of any
order suspending the effectiveness of the Shelf Registration Statement.
(d) The Company shall furnish to each Holder of Transfer
Restricted Securities included within the coverage of the Shelf
Registration, without charge, if the Holder so requests in writing, at
least one copy of the Shelf Registration Statement and any
post-effective amendment thereto, including financial statements and
schedules and all exhibits thereto (including those, if any,
incorporated by reference).
(e) The Company shall, during the Shelf Registration
Period, deliver to each Holder of Transfer Restricted Securities
included within the coverage of the Shelf Registration Statement,
without charge, as many copies of the prospectus (including each
preliminary prospectus) included in the Shelf Registration Statement
and any amendment or supplement thereto as such person may reasonably
request. The Company consents, subject to the provisions of this
Agreement, to the use of the prospectus or any amendment or supplement
thereto by each of the selling Holders in connection with the offering
and sale of the Transfer Restricted Securities covered by the
prospectus, or any amendment or supplement thereto, included in the
Shelf Registration Statement.
(f) Prior to any public offering of the Securities
pursuant to the Shelf Registration Statement, the Company shall
register or qualify or cooperate with the Holders of the Transfer
Restricted Securities included therein and their respective counsel in
connection with the registration or qualification of the Securities for
offer and sale under the securities or "blue sky" laws of such states
of the United States as any Holder reasonably requests in writing and
do any and all other acts or things necessary or advisable to enable
the offer and sale in such jurisdictions of the Securities covered by
the Shelf Registration Statement; provided, however, that the Company
shall not be required to (i) qualify generally to do business in any
jurisdiction where it is not then so qualified or (ii) take any action
which would subject it to general service of process or to taxation in
any jurisdiction where it is not then so subject.
(g) The Company shall cooperate with the Holders of the
Transfer Restricted Securities to facilitate the timely preparation and
delivery of certificates representing the Securities to be sold
pursuant to the Shelf Registration Statement free of any restrictive
legends and in such denominations and registered in such names as the
Holders may request
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a reasonable period of time prior to sales of the Securities pursuant
to the Shelf Registration Statement.
(h) Upon the occurrence of any event contemplated by
paragraphs (ii) through (v) of Section 2(b) above during the Shelf
Registration Period, the Company shall promptly prepare and file a
post-effective amendment to the Shelf Registration Statement or a
supplement to the related prospectus and any other required document so
that, as thereafter delivered to Holders of the Securities or
purchasers of Securities, the prospectus will not contain an untrue
statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading and furnish promptly to each such Holder a copy of the
prospectus as so amended or supplemented and such additional copies as
any such Holder may reasonably request. If the Company notifies Orion
or the Holders of Transfer Restricted Securities included within the
coverage of the Shelf Registration Statement that it is invoking a
Suspension Period pursuant to Section 1(b) and to suspend the use of
the prospectus until the requisite changes to the prospectus have been
made, then Orion and the Holders shall suspend use of such prospectus
during such Suspension Period.
(i) Not later than the effective date of the Shelf
Registration Statement, the Company will provide CUSIP numbers for the
Preferred Stock registered for resale under the Shelf Registration
Statement, and provide one or more certificates for such Preferred
Stock, in a form eligible for deposit with The Depository Trust
Company.
(j) The Company will comply with all rules and
regulations of the Commission to the extent and so long as they are
applicable to the Shelf Registration and will make generally available
to its security holders (or otherwise provide in accordance with
Section 11(a) of the Securities Act) an earnings statement satisfying
the provisions of Section 11(a) of the Securities Act, no later than 45
days after the end of a 12-month period (or 90 days, if such period is
a fiscal year) beginning with the first month of the Company's first
fiscal quarter commencing after the effective date of the Shelf
Registration Statement, which statement shall cover such 12-month
period.
(k) The Company may require each Holder of Securities to
be sold pursuant to the Shelf Registration Statement to furnish to the
Company such information regarding the Holder and the distribution of
the Securities as the Company may from time to time reasonably require
for inclusion in the Shelf Registration Statement, and the Company may
exclude from such Shelf Registration Statement the Securities of a
Holder until such Holder furnishes such information to the Company.
(l) The Company shall enter into such customary
agreements (including, if requested, an underwriting agreement in
customary form) and take all such other action, if any, as any Holder
of the Securities shall reasonably request in order to facilitate the
disposition of the Securities pursuant to the Shelf Registration.
(m) In the case of the Shelf Registration, the Company
shall (i) make reasonably available for inspection by a single
representative of the Holders that is designated by a majority of the
Transfer Restricted Securities, any underwriter participating in any
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disposition pursuant to the Shelf Registration Statement and any
attorney, accountant or other agent retained by the Holders of the
Securities or any such underwriter all relevant financial and other
records, pertinent corporate documents and properties of the Company
and (ii) cause the Company's officers, directors, employees,
accountants and auditors to supply all relevant information reasonably
requested by such representative of the Holders of the Securities or
any such underwriter, attorney, accountant or agent in connection with
the Shelf Registration Statement, in each case, as shall be reasonably
necessary to enable such persons, to conduct a reasonable investigation
within the meaning of Section 11 of the Securities Act; provided,
however, that the foregoing inspection and information gathering shall
be coordinated on behalf of the Holders by one person or entity
designated by a majority of the Transfer Restricted Securities and on
behalf of the other parties, by one counsel designated by and on behalf
of such other parties.
(n) In the case of any Shelf Registration, the Company,
if requested by any Holder of Securities covered thereby selling such
Securities in an underwritten public offering, shall cause (i) its
counsel to deliver an opinion and updates thereof relating to the
Securities in customary form addressed to such Holders and the managing
underwriters thereof and dated the closing date of such sale (it being
agreed that the matters to be covered by such opinion shall include,
without limitation, the due incorporation and good standing of the
Company and its subsidiaries; the qualification of the Company and its
subsidiaries to transact business as foreign corporations; the due
authorization, execution and delivery of the relevant agreement of the
type referred to in Section 2(l) hereof; the due authorization,
execution, authentication and issuance, and the validity and
enforceability, of the applicable Securities; the absence of
governmental approvals required to be obtained in connection with the
Shelf Registration Statement, the offering and sale of the applicable
Securities, or any agreement of the type referred to in Section 2(l)
hereof; the compliance as to form of such Shelf Registration Statement
and any documents incorporated by reference therein with the
requirements of the Securities Act; and, as of the date of the opinion
and as of the effective date of the Shelf Registration Statement or
most recent post-effective amendment thereto, as the case may be, the
absence from such Shelf Registration Statement and the prospectus
included therein, as then amended or supplemented, and from any
documents incorporated by reference therein of an untrue statement of a
material fact or the omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not
misleading (in the case of any such documents, in the light of the
circumstances existing at the time that such documents were filed with
the Commission under the Securities and Exchange Act of 1934, as
amended (the "Exchange Act")); (ii) its officers to execute and deliver
all customary documents and certificates and updates thereof requested
by any underwriters of the applicable Securities and (iii) its
independent public accountants to provide to any underwriter therefor a
comfort letter in customary form and covering matters of the type
customarily covered in comfort letters in connection with primary
underwritten offerings, subject to receipt of appropriate documentation
as contemplated, and only if permitted, by Statement of Auditing
Standards No. 72.
(o) The Company shall use its commercially reasonable
best efforts to cause the Common Stock included in such Shelf
Registration Statement to be, upon resale thereunder, listed on each
securities exchange, if any, on which any shares of Common Stock are
then listed.
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(p) The Company shall use its commercially reasonable
best efforts to take all other steps necessary to effect the
registration of the Transfer Restricted Securities covered by the Shelf
Registration Statement contemplated hereby.
(q) In the case of an underwritten offering and if
requested by the managing underwriter or agent or any Holder, the
Company shall promptly incorporate in a prospectus supplement or
post-effective amendment to the Shelf Registration Statement such
information as the managing underwriter or agent or such Holder
reasonably requests to be included therein, including, with respect to
the number of Securities being sold by such Holder to such underwriter
or agent, the purchase price being paid therefor by such underwriter or
agent and with respect to any other terms of any underwritten offering
of the Securities to be sold in such offering; and make all required
filings of such prospectus supplement or post-effective amendment as
soon as practicable after being notified of the matters incorporated in
such prospectus supplement or post-effective amendment.
(r) If any of the Transfer Restricted Securities covered
by any Shelf Registration are to be sold in an underwritten offering,
the investment banker or investment bankers and manager or managers
that will administer the offering ("Managing Underwriters") will be
selected by the Holders of a majority in number of shares of such
Transfer Restricted Securities to be included in such offering and will
be a firm to which the Company shall not have reasonably objected.
Notwithstanding anything to the contrary contained herein, the Company
shall not be required to participate in an underwritten public offering
of the Transfer Restricted Securities in the manner contemplated by
this Agreement unless requested in writing by a majority in number of
the Transfer Restricted Securities.
(s) No person may participate in any underwritten
registration hereunder unless such person (i) agrees to sell such
person's Transfer Restricted Securities on the basis reasonably
provided in any underwriting arrangements approved by the persons
entitled hereunder to approve such arrangements and (ii) completes and
executes all questionnaires, powers of attorney, indemnities,
underwriting agreements and other documents reasonably required under
the terms of such underwriting arrangements.
(t) The Company shall use its commercially reasonable
best efforts to make available the executive officers of the Company as
reasonably designated by the Company to participate with the Holders of
the Securities and any underwriters in one "road show" and associated
selling efforts that may be reasonably requested by the Holders in
connection with such road show.
3. Registration Expenses.
(a) All expenses incident to the Company's performance of
and compliance with this Agreement will be borne by the Company,
regardless of whether the Shelf Registration Statement is ever filed or
becomes effective, including without limitation:
(i) all registration and filing fees and
expenses (including filings made with the National Association
of Securities Dealers, Inc.);
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(ii) all fees and expenses of compliance with
federal securities and state "blue sky" or securities laws;
(iii) all expenses of providing certificates and
prospectuses;
(iv) all fees and disbursements of counsel for
the Company;
(v) all application and filing fees in
connection with listing on a national securities exchange or
automated quotation system pursuant to the requirements
hereof; and
(vi) all fees and disbursements of independent
certified public accountants of the Company (including the
expenses of any special audit and comfort letters required by
or incident to such performance).
The Company will bear its internal expenses (including, without
limitation, all salaries and expenses of its officers and employees
performing legal or accounting duties), the expenses of any annual
audit and the fees and expenses of any person, including special
experts, retained by the Company.
(b) In connection with the Shelf Registration Statement,
Orion and the Holders of Transfer Restricted Securities who are selling
or reselling Securities pursuant to the "Plan of Distribution"
contained in the Shelf Registration Statement shall bear their own
expenses.
4. Indemnification.
(a) The Company agrees to indemnify and hold harmless
each Holder of the Transfer Restricted Securities included within the
coverage of the Shelf Registration Statement, each director or officer
of such Holder and each other person, if any, who controls such Holder
within the meaning of the Securities Act or the Exchange Act (each
Holder and such directors, officers and controlling persons are
referred to collectively as the "Indemnified Parties") from and against
any losses, claims, damages or liabilities, joint or several, or any
actions in respect thereof (including, but not limited to, any losses,
claims, damages, liabilities or actions relating to purchases and sales
of the Securities) to which each Indemnified Party may become subject
under the Securities Act, the Exchange Act or otherwise, insofar as
such losses, claims, damages, liabilities or actions arise out of or
are based upon any untrue statement or alleged untrue statement of a
material fact contained or incorporated by reference in the Shelf
Registration Statement or the related prospectus or in any amendment or
supplement thereto or in any preliminary prospectus relating to the
Shelf Registration, or arise out of, or are based upon, the omission or
alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, and
shall reimburse, as incurred, the Indemnified Parties for any legal or
other expenses reasonably incurred by them in connection with
investigating or defending any such loss, claim, damage, liability or
action in respect thereof; provided, however, that (i) the Company
shall not be liable in any such case to the extent that such loss,
claim, damage or liability arises out of or is based upon any untrue
statement or alleged untrue statement or omission or alleged omission
made in the Shelf Registration
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Statement or prospectus or in any amendment or supplement thereto or in
any preliminary prospectus relating to a Shelf Registration in reliance
upon and in conformity with written information pertaining to such
Holder and furnished to the Company by or on behalf of such Holder
specifically for inclusion therein and (ii) with respect to any untrue
statement or omission or alleged untrue statement or omission made in
any prospectus relating to a Shelf Registration Statement, the
indemnity agreement contained in this subsection (a) shall not inure to
the benefit of any Holder from whom the person asserting any such
losses, claims, damages or liabilities purchased the Securities
concerned, to the extent that a prospectus relating to such Securities
was required to be delivered by such Holder under the Securities Act in
connection with such purchase and any such loss, claim, damage or
liability of such Holder results from the fact that there was not sent
or given to such person, at or prior to the written confirmation of the
sale of such Securities to such person, a copy of the final prospectus
if the Company had previously furnished copies thereof to such Holder;
provided further, however, that this indemnity agreement will be in
addition to any liability which the Company may otherwise have to such
Indemnified Party. The Company shall also indemnify underwriters, their
officers and directors and each person who controls such underwriters
within the meaning of the Securities Act or the Exchange Act to the
same extent as provided above with respect to the indemnification of
the Holders of the Securities if requested by such Holders.
(b) Each Holder of the Securities, severally and not
jointly, will indemnify and hold harmless the Company, each director or
officer of the Company and each person, if any, who controls the
Company within the meaning of the Securities Act or the Exchange Act
from and against any losses, claims, damages or liabilities or any
actions in respect thereof, to which the Company or any such
controlling person may become subject under the Securities Act, the
Exchange Act or otherwise, insofar as such losses, claims, damages,
liabilities or actions arise out of or are based upon any untrue
statement or alleged untrue statement of a material fact contained in a
Shelf Registration Statement or prospectus or in any amendment or
supplement thereto or in any preliminary prospectus relating to a Shelf
Registration, or arise out of or are based upon the omission or alleged
omission to state therein a material fact necessary to make the
statements therein not misleading, but in each case only to the extent
that the untrue statement or omission or alleged untrue statement or
omission was made in reliance upon and in conformity with written
information pertaining to such Holder and furnished to the Company by
or on behalf of such Holder specifically for inclusion therein; and,
subject to the limitation set forth immediately preceding this clause,
shall reimburse, as incurred, the Company for any legal or other
expenses reasonably incurred by the Company or any such controlling
person in connection with investigating or defending any loss, claim,
damage, liability or action in respect thereof; provided, however, that
no such Holder shall be liable for any claims hereunder in excess of
the amount of net proceeds received by such Holder from the sale of
Securities pursuant to such Shelf Registration Statement. This
indemnity agreement will be in addition to any liability which such
Holder may otherwise have to the Company or any of its controlling
persons.
(c) Promptly after receipt by an indemnified party under
this Section 4 of notice of the commencement of any action or
proceeding (including a governmental investigation), such indemnified
party will, if a claim in respect thereof is to be made against the
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indemnifying party under this Section 4, notify the indemnifying party
of the commencement thereof; but the omission so to notify the
indemnifying party will not, in any event, relieve the indemnifying
party from any obligations to any indemnified party except to the
extent that the indemnifying party has been materially prejudiced by
such omission. In case any such action is brought against any
indemnified party, and it notifies the indemnifying party of the
commencement thereof, the indemnifying party will be entitled to
participate therein and, to the extent that it may wish, jointly with
any other indemnifying party similarly notified, to assume the defense
thereof, with one counsel reasonably satisfactory to such indemnified
parties (who shall not, except with the consent of the indemnified
party, be counsel to the indemnifying party), and after notice from the
indemnifying party to such indemnified party of its election so to
assume the defense thereof the indemnifying party will not be liable to
such indemnified party under this Section 4 for any legal or other
expenses, other than reasonable costs of investigation, subsequently
incurred by such indemnified party in connection with the defense
thereof. In the event the indemnifying party assumes defense of such
proceeding, any indemnified party shall have the right to participate
in such proceeding and retain its own counsel, but the fees and
expenses of such counsel shall be at the expense of such indemnified
party unless the named parties to any such proceeding include both the
indemnifying party and the indemnified party and representation of both
parties by the same counsel would be inappropriate due to actual or
potential differing interests between them, in which case the
indemnifying party shall be responsible for the reasonable expenses of
a single additional counsel mutually selected by the indemnifying and
the indemnified parties to represent the indemnified parties. If the
indemnifying party declines or fails to assume the defense of the
action or to employ counsel reasonably satisfactory to the indemnified
party, in either case within a 30-day period following notice from the
indemnified party, or if a court of competent jurisdiction determines
that the indemnifying party is not vigorously defending such action,
then such indemnified party may employ counsel to represent or defend
it in any such action and the indemnifying party shall pay the
reasonable fees and disbursements of such counsel or other
representative as incurred. No indemnifying party shall, without the
prior written consent of the indemnified party, effect any settlement
of any pending or threatened action in respect of which any indemnified
party is or could have been a party and indemnity could have been
sought hereunder by such indemnified party unless such settlement (i)
includes an unconditional release of such indemnified party from all
liability on any claims that are the subject matter of such action,
(ii) does not include a statement as to or an admission of fault,
culpability or a failure to act by or on behalf of any indemnified
party and (iii) such settlement involves only the payment of money.
(d) If the indemnification provided for in this Section 4
is unavailable or insufficient to hold harmless an indemnified party
under subsections (a) or (b) above, then each indemnifying party shall
contribute to the amount paid or payable by such indemnified party as a
result of the losses, claims, damages or liabilities (or actions in
respect thereof) referred to in subsection (a) or (b) above in such
proportion as is appropriate to reflect the relative fault of the
indemnifying party or parties on the one hand and the indemnified party
on the other in connection with the statements or omissions that
resulted in such losses, claims, damages or liabilities (or actions in
respect thereof) as well as any other relevant equitable
considerations. The relative fault of the parties shall be determined
by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or
11
the omission or alleged omission to state a material fact relates to
information supplied by the Company on the one hand or such Holder or
such other indemnified party, as the case may be, on the other, and the
parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The
amount paid by an indemnified party as a result of the losses, claims,
damages or liabilities referred to in the first sentence of this
subsection (d) shall be deemed to include any legal or other expenses
reasonably incurred by one counsel on behalf of such indemnified party
in connection with investigating or defending any action or claim which
is the subject of this subsection (d). Notwithstanding any other
provision of this Section 4(d), the Holders shall not be required to
contribute any amount in excess of the amount by which the net proceeds
received by such Holders from the sale of the Securities pursuant to
the Shelf Registration Statement exceeds the amount of damages which
such Holders have otherwise been required to pay by reason of such
untrue or alleged untrue statement or omission or alleged omission. The
parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 4(d) were determined by pro rata
allocation or by any other method of allocation that does not take
account of the equitable considerations referred to in this Section
4(d). No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. For purposes of this paragraph (d), each person, if
any, who controls such indemnified party within the meaning of the
Securities Act or the Exchange Act shall have the same rights to
contribution as such indemnified party and each person, if any, who
controls the Company within the meaning of the Securities Act or the
Exchange Act shall have the same rights to contribution as the Company.
(e) The agreements contained in this Section 4 shall
survive the sale of the Securities pursuant to the Shelf Registration
Statement and shall remain in full force and effect, regardless of any
termination or cancellation of this Agreement or any investigation made
by or on behalf of any indemnified party.
5. Rules 144 and 144A. The Company shall use its best efforts to
file the reports required to be filed by it under the Securities Act and the
Exchange Act in a timely manner and, if at any time during the Shelf
Registration Period the Company is not required to file such reports, it will,
upon the request of any Holder of Transfer Restricted Securities, make publicly
available other information so long as necessary to permit sales of their
securities pursuant to Rules 144 and 144A. The Company covenants that it will
take such further action as any Holder of Transfer Restricted Securities may
reasonably request, all to the extent required from time to time to enable such
Holder to sell Transfer Restricted Securities without registration under the
Securities Act within the limitation of the exemptions provided by Rules 144 and
144A (including the requirements of Rule 144A(d)(4)) or any other exemption from
the registration requirements of the Securities Act. The Company will provide a
copy of this Agreement to prospective purchasers of the Preferred Stock
identified to the Company by a Holder upon request. Notwithstanding the
foregoing, nothing in this Section 5 shall be deemed to require the Company to
register any of the Preferred Stock pursuant to the Exchange Act.
"Transfer Restricted Securities" means each Security until (i) the date
on which such Security has been effectively registered under the Securities Act
and disposed of in accordance with the Shelf Registration Statement; provided
that, for the avoidance of any doubt, unless Orion
12
agrees otherwise in writing, any Transfer (including from an Orion Trust) of
Securities to any equity holder, debt holder or other creditor of Orion or any
affiliate thereof (each an "Orion Claimant") in exchange for or satisfaction of
all or any portion of such Orion Claimant's claims against or interests in Orion
or any Orion Trust and any Transfer to any Orion Trust, shall not be deemed to
be a disposition of such Securities in accordance with the Shelf Registration
Statement or (ii) the date on which such Security is distributed to the public
pursuant to Rule 144 under the Securities Act or is saleable pursuant to Rule
144(k) under the Securities Act.
6. Miscellaneous.
(a) Remedies. The Company acknowledges and agrees that
any failure by the Company to comply with its obligations under Section
1 hereof may result in material irreparable injury to Orion or the
Holders for which there is no adequate remedy at law, that it will not
be possible to measure damages for such injuries precisely and that, in
the event of any such failure, Orion or any Holder may obtain such
relief as may be required to specifically enforce the Company's
obligations under Section 1 hereof. The Company further agrees to waive
the defense in any action for specific performance that a remedy at law
would be adequate.
(b) No Inconsistent Agreements. The Company will not on
or after the date of this Agreement enter into any agreement with
respect to its securities that is inconsistent with the rights granted
to the Holders in this Agreement or otherwise conflicts with the
provisions hereof. The Company hereby represents and warrants that the
rights granted to the Holders hereunder do not in any way conflict with
and are not inconsistent with the rights granted to the holders of the
Company's securities under any agreement in effect on the date hereof.
(c) Amendments and Waivers. The provisions of this
Agreement may not be amended, modified or supplemented, and waivers or
consents to departures from the provisions hereof may not be given,
except by the Company and the written consent of the Holders of a
majority in number of shares of Transfer Restricted Securities
(provided that Holders of Common stock issued upon conversion of
Preferred Stock shall be deemed to be Holders of the aggregate number
of shares of Preferred stock from which such Common Stock was
converted) affected by such amendment, modification, supplement, waiver
or consents. Notwithstanding the foregoing, the provisions of this
Agreement may not be amended, modified or supplemented in any manner
that would uniquely and adversely affect a Holder or group of Holders
without such amendment, modification or supplement being approved by
written consent of the affected Holder or Holders, as the case may be.
(d) Notices. All notices and other communications
provided for or permitted hereunder shall be made in writing by hand
delivery, first-class mail, facsimile transmission, or air courier
which guarantees overnight delivery:
(i) if to the Holders, at the most current
address shown for the Holders in the records of the Transfer
Agent, with a copy in like manner as follows:
(ii) if to Orion:
13
Orion Refining Corporation
00000 Xxxxxxxxxxx Xxxx Xxxxx
Xxxxx 000
Xxxxxxx, Xxxxx 00000
Attention: Xx. Xxxxxxx Xxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
with a copy to:
Xxxxxx & Xxxxxx L.L.P.
0000 Xxxxx Xxxx Xxxxx
Xxxxx 0000
Xxxxxxx, Xxxxx 00000-0000
Attention: Xx. Xxxxx X. Xxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
So long as Orion is subject to the jurisdiction of a
bankruptcy court. with an additional copy to:
Morris, Nichols, Arsht & Xxxxxxx
0000 Xxxxx Xxxxxx Xxxxxx, X.X. Xxx 0000
Xxxxxxxxxx, Xxxxxxxx 00000-0000
Attention: Xx. Xxxxxx Xxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
(iii) if to the Company, at its address as
follows:
Valero Energy Corporation
Xxx Xxxxxx Xxxxx
Xxx Xxxxxxx, Xxxxx 00000
Attention: Xxx Xxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
All such notices and communications shall be deemed to have
been duly given: at the time delivered by hand, if personally
delivered; three business days after being deposited in the mail,
postage prepaid, if mailed; when receipt is acknowledged by recipient's
facsimile machine operator, if sent by facsimile transmission; and on
the day delivered, if sent by overnight air courier guaranteeing next
day delivery.
(e) Third Party Beneficiaries. The Holders shall be third
party beneficiaries to the agreements made hereunder between the
Company, on the one hand, and Orion, on the other hand, and shall have
the right to enforce such agreements directly to the extent they
14
may deem such enforcement necessary or advisable to protect their
rights or the rights of Holders hereunder.
(f) Successors and Assigns. This Agreement shall inure to
the benefit of and be binding upon the successors and assigns of each
of the parties, including, without the need for an express assignment
or any consent by the Company thereto, subsequent Holders of Transfer
Restricted Securities. The Company hereby agrees to extend the benefits
of this Agreement to any Holder of Transfer Restricted Securities and
any such Holder may specifically enforce the provisions of this
Agreement as if an original party hereto.
(g) Counterparts. This Agreement may be executed in any
number of counterparts and by the parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the
same agreement.
(h) Headings. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect
the meaning hereof.
(i) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF TEXAS
WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS.
(j) Severability. If any one or more of the provisions
contained herein, or the application thereof in any circumstance, is
held invalid, illegal or unenforceable, the validity, legality and
enforceability of any such provision in every other respect and of the
remaining provisions contained herein shall not be affected or impaired
thereby.
(k) Securities Held by the Company. Whenever the consent
or approval of Holders of a specified number of Transfer Restricted
Securities is required hereunder, Securities held by the Company or its
affiliates (other than subsequent Holders of Transfer Restricted
Securities if such subsequent Holders are deemed to be affiliates
solely by reason of their holdings of such Securities) shall not be
counted in determining whether such consent or approval was given by
the Holders of such required percentage.
(l) Assignment of Rights Hereunder. In connection with
any Transfer (as defined herein) of any Transfer Restricted Securities
to any Transferee (as defined herein), the person or entity making such
Transfer ("Transferor") to a Transferee shall be entitled to assign to
such Transferee the Transferor's rights hereunder in respect of such
Transfer Restricted Securities provided that the Transferee agrees to
be bound by the terms of this Agreement. For purposes of this
Agreement, "Transfer" shall mean to sell, transfer, assign or otherwise
dispose of, either voluntarily or involuntarily, or to enter into any
contract, option or other arrangement or understanding with respect to
the sale, transfer, assignment or other disposition of, Transfer
Restricted Securities owned by a person or entity and "Transferee"
shall mean (i) any person or entity to whom Orion, a Trustee or any
Orion Trust Transfers any Transfer Restricted Securities, (ii) any
subsequent transferee thereof; provided that in the case of any
subsequent transferee, such subsequent transferee must receive Transfer
of the Transfer Restricted Securities prior to the sixth-month
anniversary
15
date of the effective date of this Agreement, (iii) any Orion Claimant
who receives Securities in exchange for or satisfaction of all or any
portion of such Orion Claimant's claims against or interests in Orion
or any Orion Trust, (iv) any affiliate of Orion, any Trustee, any Orion
Trust or any of the persons or entities described in clauses (i), (ii)
or (iiii) above and (v) any other person or entity who receives
Securities to which the Company agrees in writing to designate as a
Transferee.
16
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
VALERO ENERGY CORPORATION
By: /s/ Xxxxxxxx X. Xxxxxx
---------------------------------
Name: Xxxxxxxx X. Xxxxxx
Title: Vice President
Confirmed and accepted as
of the date first above
written:
ORION REFINING CORPORATION
By: /s/ X. X. Xxxxx
----------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Senior Vice President & General Counsel
17
