FIRST AMENDMENT AND WAIVER dated as of
September 22, 1997, to the STOCKHOLDER AGREEMENT
dated as of May 1, 1997 (the "Original
Agreement"), between VALERO ENERGY CORPORATION,
formerly known as Valero Refining and Marketing
Company, a Delaware corporation (the "Company"),
and SALOMON INC, a Delaware corporation
("Stockholder").
WHEREAS the Company and Stockholder are parties to the
Original Agreement, which provides, among other things, for
certain restrictions on transfer by Stockholder of the Spin-Off
Shares (capitalized terms used and not defined in this Amendment
and Waiver have the meanings assigned such terms in the Original
Agreement); and
WHEREAS the Company has agreed, on the terms and
subject to the conditions set forth in this Amendment and Waiver,
to waive certain of such restrictions.
NOW, THEREFORE, in consideration of the mutual
covenants and agreements set forth herein and for good and
valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties agree as follows:
SECTION 1. Amendment and Waiver. (a) Notwithstanding
Section 3.02 of the Original Agreement, Stockholder may sell all,
but not less than all, the Spin-Off Shares in a transaction or
series of related transactions (a
"Permitted Transaction") that:
(i) is consummated prior to September 30, 1997;
(ii) results in cash proceeds to Stockholder (before
selling commissions or discounts and other expenses) of not
less than $33.00 per Spin-Off Share; and
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(iii) involves a bona fide, broad public offering
and distribution of the Spin-Off Shares.
(b) The Company hereby waives its rights under Section
3.04 with respect to any Permitted Transaction.
SECTION 2. Permitted Transaction Procedures. (a)
Officer's Certificate. On the settlement date for a Permitted
Transaction (the "Closing Date"), the Company shall furnish to
Stockholder a certificate of the Company, signed by the Executive
Vice President and Chief Financial Officer of the Company, in
form and substance satisfactory to Stockholder.
(b) Opinion. On the Closing Date, the Company shall
furnish to Stockholder the opinion of Xxxxxxx X. Xxxx, General
Counsel of the Company, in form and substance satisfactory to
Stockholder.
(c) Indemnification.
(i) By the Company. The Company agrees, in connection
with a Permitted Transaction, to indemnify Stockholder, its
officers, directors, employees and agents and each Person
who controls (within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act)
Stockholder or such other indemnified Person and the
officers, directors, employees and agents of such control
Persons or other indemnified Persons against all losses,
claims, damages, liabilities and expenses, including,
without limitation, reasonable attorneys' fees and expenses
(collectively, "Losses"), as incurred, caused by, resulting
from or relating to (i) any untrue or alleged untrue
statement of material fact contained in the Form S-1
(including the Prospectus), the Form 10-Q or any amendment
thereof or supplement thereto or any omission or alleged
omission of a 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 or (ii) any violation by the
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Company of any Federal or state law, rule or regulation
applicable to the Company and relating to any action
required of, or inaction required by, the Company with
respect to the Form S-1 (including the Prospectus), the
Form 10-Q or any amendment thereto or supplement thereof;
provided, however, that the Company's liability under this
indemnity shall not exceed the amount of net proceeds
received by Stockholder from the sale of Spin-Off Shares in
a Permitted Transaction.
(ii) By Stockholder. In connection with a Permitted
Transaction, Stockholder shall indemnify the Company, its
directors, officers, employees and agents and each Person
who controls (within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act) the
Company or such other indemnified Person and the officers,
directors, employees and agents of such control Persons or
other indemnified Persons against all Losses, as incurred,
caused by, resulting from or relating to any untrue or
alleged untrue statement of material fact contained in any
offering memorandum or other offering materials used in
connection with a Permitted Transaction (other than any
attachment thereto consisting of the Form S-1 or the Form
10-Q) or any amendment thereof or supplement thereto or any
omission or alleged omission of a 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, but only to the extent that such
untrue statement or omission or alleged untrue statement or
omission is caused by, results from or relates to, or is
alleged to be omitted from, the information in such
offering memorandum or such other offering materials
prepared or furnished by Stockholder; provided, however,
that Stockholder shall not be liable for any claims
hereunder in excess of the amount of net proceeds received
by Stockholder from the sale of Spin-Off Shares in a
Permitted Transaction.
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(iii) Notice. Notice shall be in accordance with
Section 11(g) of the Purchase Agreement.
(iv) Defense of Actions. Defense of actions shall
be in accordance with Section 11(g) of the Purchase
Agreement.
(v) Survival. The indemnification provided for herein
shall remain in full force and effect regardless of any
investigation made by or on behalf of the indemnified
Person and will survive the transfer of the Spin-Off
Shares.
(vi) Contribution. If the indemnification provided for
in this Section 2(c) is unavailable to an indemnified party
or is insufficient to hold such indemnified party harmless
for any Losses in respect of which this Section 2(c) would
otherwise apply by its terms, then the indemnifying party,
in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such
indemnified party as a result of such Losses, in such
proportion as is appropriate to reflect the relative fault
of the indemnifying party, on the one hand, and such
indemnified party, on the other hand, in connection with
the actions, statements or omissions that resulted in such
Losses as well as any other relevant equitable
considerations. The relative fault of such indemnifying
party, on the one hand, and the indemnified party, on the
other hand, shall be determined by reference to, among
other things, whether any action in question, including any
untrue or alleged untrue statement of a material fact or
omission or alleged omission to state a material fact, has
been taken by, or relates to information supplied by, each
indemnifying party or indemnified party, and the parties'
relative intent, knowledge, access to information and
opportunity to correct or prevent any such action,
statement or omission. The amount paid or payable by a
party as a result of any Losses shall be deemed to include
any legal or other fees or expenses
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incurred by such party, to the extent such party would have
been indemnified for such expenses if the indemnification
provided for in Section 2(c)(i) or 2(c)(ii) was available
to such party. The parties hereto agree that it would not
be just and equitable if contribution pursuant to this
Section 2(c)(vi) 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 2(c)(vi). 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 found guilty of such fraudulent
misrepresentation.
SECTION 3. Miscellaneous. (a) Except as
expressly set forth in this Amendment and Waiver, all the
provisions of the Original Agreement shall remain in full
force and effect.
(b) This Amendment and Waiver and all the provisions
hereof shall be binding upon and inure to the benefit of the
parties hereto and their respective heirs, executors, successors
and permitted assigns, but, except as expressly contemplated
herein, neither this Amendment and Waiver nor any of the rights,
interests or obligations hereunder shall be assigned, directly or
indirectly, by the Company or Stockholder without the prior
written consent of the other.
(c) This Amendment and Waiver may be executed in
counterparts, each of which shall be deemed an original, but all
of which together shall constitute one and the same instrument.
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(d) THIS AMENDMENT AND WAIVER SHALL BE GOVERNED BY
THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE
PRINCIPLES OF CONFLICTS OF LAW THEREOF.
IN WITNESS WHEREOF, the undersigned hereby agree to be
bound by the terms and provisions of this Amendment and Waiver as
of the date first above written.
VALERO ENERGY CORPORATION,
By:__________________________
Name:
Title:
SALOMON INC,
By:__________________________
Name:
Title:
