Exhibit 4.02


 




 





 


VALERO LOGISTICS OPERATIONS, L.P.,
ISSUER


 


VALERO L.P.,


GUARANTOR


 


KANEB PIPE LINE OPERATING PARTNERSHIP, L.P.,


AFFILIATE GUARANTOR


 


AND


 


THE BANK OF NEW YORK TRUST COMPANY, N.A.

AS SUCCESSOR TRUSTEE TO

THE BANK OF NEW YORK,
TRUSTEE


 


THIRD SUPPLEMENTAL INDENTURE
DATED AS OF JULY 1,  2005



TO



INDENTURE


DATED AS OF JULY 15, 2002




 


 





 





















 


TABLE OF CONTENTS


 


	
  ARTICLE I
  AMENDMENTS TO THE INDENTURE

  	
   

  
	
  SECTION 1.01 Definitions

  	
   

  
	
  SECTION 1.02 Unconditional Affiliate Guarantee

  	
   

  
	
   

  	
   

  
	
  ARTICLE II
  MISCELLANEOUS

  	
   

  
	
  SECTION 2.01 Execution as Supplemental
  Indenture

  	
   

  
	
  SECTION 2.02 Responsibility for
  Recitals, Etc

  	
   

  
	
  SECTION 2.03 Provisions Binding on
  Partnership’s, Guarantor’s and Affiliate Guarantor’s Successors

  	
   

  
	
  SECTION 2.04 Governing Law

  	
   

  
	
  SECTION 2.05 Execution and
  Counterparts

  	
   

  
	
  SECTION 2.06 Capitalized Terms

  	
   

  



 


 


i





















 


THIRD SUPPLEMENTAL INDENTURE,
dated as of July 1, 2005 (this “Third Supplemental Indenture”),
among Valero Logistics Operations, L.P., a Delaware limited partnership having
its principal office at One Valero Way, San Antonio, Texas 78249 (the “Partnership”),
Valero L.P., a Delaware limited partnership (the “Guarantor”), Kaneb
Pipe Line Operating Partnership, L.P., a Delaware limited partnership and an
Affiliate of the Partnership (the “Affiliate Guarantor”), and The Bank
of New York Trust Company, N.A. as successor trustee to The Bank of New York, a
New York banking corporation, as trustee (the “Trustee”).


 


RECITALS OF THE
PARTNERSHIP


 


The Partnership, the
Guarantor and the Trustee have heretofore executed and delivered the Indenture
dated as of July 15, 2002 (the “Original Indenture,”), as amended
and supplemented by (i) the First Supplemental Indenture thereto dated as
of July 15, 2002 (the “First Supplemental Indenture”) and (ii) the
Second Supplemental Indenture thereto dated as of March 18, 2003 (the “Second
Supplemental Indenture”) (the Original Indenture, as supplemented from time
to time, including without limitation pursuant to the First Supplemental
Indenture, the Second Supplemental Indenture and this Third Supplemental
Indenture, being referred to herein as the “Indenture”), providing for
the issuance from time to time of one or more series of the Partnership’s
Securities, each to be guaranteed by the Guarantor and the terms of which are
to be determined as set forth in Section 301 of the Original Indenture.


 


Section 901 of the
Original Indenture provides, among other things, that the Partnership, the
Guarantor and the Trustee may enter into indentures supplemental to the
Original Indenture without the consent of any Holders for, among other things,
the purpose of making any provisions with respect to matters or questions
arising under the Indenture which shall not adversely affect the interests of
the Holders of Securities of any series in any material respect.


 


Each of the Partnership,
the Guarantor and the Affiliate Guarantor desires that the Affiliate Guarantor
execute and deliver to the Trustee a supplemental indenture pursuant to which
the Affiliate Guarantor shall guarantee the payment of each and every series of
Securities issued under the Indenture pursuant to a guarantee on the terms and
conditions set forth herein.


 


All acts and things
necessary to make this Third Supplemental Indenture the valid and binding
obligation of the Partnership, the Guarantor and the Affiliate Guarantor, and
to constitute these presents a valid and binding supplemental indenture and
agreement according to its terms, have been done and performed.


 


Pursuant to Section 901
of the Original Indenture, the Trustee is authorized to execute and deliver
this Third Supplemental Indenture.


 


Now, Therefore, This
Third Supplemental Indenture Witnesseth:


 


That in consideration of
the premises, the Partnership, the Guarantor, the Affiliate Guarantor and the
Trustee mutually covenant and agree, for the equal and proportionate benefit of
all Holders of each and every series of Securities, as follows:


 





















 


ARTICLE I



AMENDMENTS TO THE INDENTURE


 


SECTION 1.01 Definitions.  Section 101 of the Indenture is hereby
amended and supplemented by inserting, in the appropriate alphabetical
position, the following definitions:


 


“Affiliate Guarantees”
has the meaning specified in Section 1501.


 


“Affiliate Guarantor”
means Kaneb Pipe Line Operating Partnership, L.P., a Delaware limited
partnership, until a successor Affiliate Guarantor shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter “Affiliate
Guarantor” shall mean or include each Person who is then an Affiliate Guarantor
hereunder.


 


SECTION 1.02 Unconditional
Affiliate Guarantee.  The Indenture
is hereby amended and supplemented by inserting the following new Article XV
immediately after Article XIV of the Indenture:


 


“ARTICLE XV


 


SECTION 1501.     Unconditional
Affiliate Guarantee.


 


For value received, the Affiliate Guarantor hereby fully, irrevocably,
unconditionally and absolutely guarantees to the Holders and to the Trustee the
due and punctual payment of the principal of, and premium, if any, and interest
on the Securities and all other amounts due and payable under this Indenture
and the Securities by the Partnership (including, without limitation, all costs
and expenses (including reasonable legal fees and disbursements) incurred by
the Trustee or the Holders in connection with the enforcement of this Indenture
and the Affiliate Guarantees) (collectively for the purposes of this Article XV,
the “Indenture Obligations”), when and as such principal, premium, if any, and
interest and such other amounts shall become due and payable, whether at the
Stated Maturity, upon redemption or by declaration of acceleration or
otherwise, according to the terms of the Securities and this Indenture.  The guarantees by the Affiliate Guarantor set
forth in this Article XV are referred to herein as the “Affiliate
Guarantees.”  Without limiting the
generality of the foregoing, the Affiliate Guarantor’s liability shall extend
to all amounts that constitute part of the Indenture Obligations and would be
owed by the Partnership under this Indenture and the Securities but for the
fact that they are unenforceable, reduced, limited, impaired, suspended or not
allowable due to the existence of a bankruptcy, reorganization or similar
proceeding involving the Partnership.


 


Failing payment when due of any amount guaranteed pursuant to the
Affiliate Guarantees, for whatever reason, the Affiliate Guarantor will be
obligated (to the fullest extent permitted by applicable law) to pay the same
immediately to the Trustee, without set-off or counterclaim or other reduction
whatsoever (whether for taxes, withholding or otherwise).  Each Affiliate Guarantee hereunder is
intended to be a general, unsecured, senior obligation of the Affiliate
Guarantor and will rank pari passu in right of payment with all indebtedness of
the Affiliate Guarantor that is not, by its terms, expressly subordinated in
right of payment to the Affiliate Guarantee of the Affiliate Guarantor.  The Affiliate Guarantor hereby agrees that to
the fullest extent permitted by applicable


 


2





















 


law, its obligations hereunder shall be full,
irrevocable, unconditional and absolute, irrespective of the validity,
regularity or enforceability of the Securities, the Affiliate Guarantees or
this Indenture, the absence of any action to enforce the same, any waiver or
consent by any Holder with respect to any provisions hereof or thereof, the
recovery of any judgment against the Partnership, any action to enforce the
same or any other circumstance which might otherwise constitute a legal or
equitable discharge or defense of the Affiliate Guarantor.  The Affiliate Guarantor hereby agrees that in
the event of a default in payment of the principal of, or premium, if any, or
interest on the Securities of any series or any other amounts payable under
this Indenture and the Securities by the Partnership, whether at the Stated Maturity,
upon redemption or by declaration of acceleration or otherwise, legal
proceedings may be instituted by the Trustee on behalf of the Holders or,
subject to Section 507 hereof, by the Holders, on the terms and conditions
set forth in this Indenture, directly against the Affiliate Guarantor to
enforce the Affiliate Guarantees without first proceeding against the
Partnership.


 


To the fullest extent permitted by applicable law, the obligations of
the Affiliate Guarantor under this Article XV shall be as aforesaid full,
irrevocable, unconditional and absolute and shall not be impaired, modified,
discharged, released or limited by any occurrence or condition whatsoever,
including, without limitation, (i) any compromise, settlement, release,
waiver, renewal, extension, indulgence or modification of, or any change in,
any of the obligations and liabilities of the Partnership, the Guarantor or the
Affiliate Guarantor contained in any of the Securities or this Indenture, (ii) any
impairment, modification, release or limitation of the liability of the
Partnership, the Guarantor, the Affiliate Guarantor or any of their estates in
bankruptcy, or any remedy for the enforcement thereof, resulting from the
operation of any present or future provision of any applicable Bankruptcy Law,
as amended, or other statute or from the decision of any court, (iii) the
assertion or exercise by the Partnership, the Guarantor, the Affiliate
Guarantor or the Trustee of any rights or remedies under any of the Securities
or this Indenture or their delay in or failure to assert or exercise any such
rights or remedies, (iv) the assignment or the purported assignment of any
property as security for any of the Securities, including all or any part of
the rights of the Partnership, the Guarantor or the Affiliate Guarantor under
this Indenture, (v) the extension of the time for payment by the
Partnership, the Guarantor or the Affiliate Guarantor of any payments or other
sums or any part thereof owing or payable under any of the terms and provisions
of any of the Securities or this Indenture or of the time for performance by
the Partnership, the Guarantor or the Affiliate Guarantor of any other
obligations under or arising out of any such terms and provisions or the
extension or the renewal of any thereof, (vi) the modification or
amendment (whether material or otherwise) of any duty, agreement or obligation
of the Partnership, the Guarantor or the Affiliate Guarantor set forth in this
Indenture, (vii) the voluntary or involuntary liquidation, dissolution,
sale or other disposition of all or substantially all of the assets, marshaling
of assets and liabilities, receivership, insolvency, bankruptcy, assignment for
the benefit of creditors, reorganization, arrangement, composition or
readjustment of, or other similar proceeding affecting, the Partnership, the
Guarantor, the Affiliate Guarantor or any of their respective assets, or the
disaffirmance of any of the Securities, the Guarantees, the Affiliate
Guarantees or this Indenture in any such proceeding, (viii) the release or
discharge of the Partnership, the Guarantor or the Affiliate Guarantor from the
performance or observance of any agreement, covenant, term or condition
contained in any of such instruments by operation of law, (ix) the
unenforceability of any of the Securities, the Guarantees, the Affiliate
Guarantees or this Indenture, (x) any change in


 


3





















 


the name, business, capital structure, corporate
existence, or ownership of the Partnership, the Guarantor or the Affiliate
Guarantor, or (xi) any other circumstance which might otherwise constitute a
defense available to, or a legal or equitable discharge of, a surety or the
Affiliate Guarantor.


 


To the fullest extent permitted by applicable law, the Affiliate
Guarantor hereby (i) waives diligence, presentment, demand of payment,
notice of acceptance, filing of claims with a court in the event of the merger,
insolvency or bankruptcy of the Partnership, the Guarantor or the Affiliate
Guarantor, and all demands and notices whatsoever, (ii) acknowledges that
any agreement, instrument or document evidencing the Affiliate Guarantees may
be transferred and that the benefit of its obligations hereunder shall extend
to each Holder of the Securities without notice to them and (iii) covenants
that its Affiliate Guarantees will not be discharged except by complete
performance of the Affiliate Guarantees. 
The Affiliate Guarantor further agrees that to the fullest extent
permitted by applicable law, if at any time all or any part of any payment
theretofore applied by any Person to any Affiliate Guarantee is, or must be,
rescinded or returned for any reason whatsoever, including without limitation,
the insolvency, bankruptcy or reorganization of the Affiliate Guarantor, such
Affiliate Guarantee shall, to the extent that such payment is or must be
rescinded or returned, be deemed to have continued in existence notwithstanding
such application, and the Affiliate Guarantees shall continue to be effective
or be reinstated, as the case may be, as though such application had not been
made.


 


The Affiliate Guarantor shall be subrogated to all rights of the
Holders and the Trustee against the Partnership in respect of any amounts paid
by the Affiliate Guarantor pursuant to the provisions of this Indenture; provided, however,
that the Affiliate Guarantor shall not be entitled to enforce or to receive any
payments arising out of, or based upon, such right of subrogation with respect
to any of the Securities until all of the Securities and the Affiliate
Guarantees thereof shall have been indefeasibly paid in full or discharged.


 


A director, officer, employee, stockholder, partner, member or
unitholder, as such, of the Affiliate Guarantor shall not have any liability
for any obligations of the Affiliate Guarantor under this Indenture or for any
claim based on, in respect of or by reason of such obligations or their
creation.


 


No failure to exercise and no delay in exercising, on the part of the
Trustee or the Holders, any right, power, privilege or remedy under this Article XV
and the Affiliate Guarantees shall operate as a waiver thereof, nor shall any
single or partial exercise of any rights, power, privilege or remedy preclude
any other or further exercise thereof, or the exercise of any other rights,
powers, privileges or remedies.  The
rights and remedies herein provided for are cumulative and not exclusive of any
rights or remedies provided in law or equity. 
Nothing contained in this Article XV shall limit the right of the Trustee
or the Holders to take any action to accelerate the maturity of the Securities
pursuant to Article V or to pursue any rights or remedies hereunder or
under applicable law.”


 


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ARTICLE II



MISCELLANEOUS


 


SECTION 2.01 Execution
as Supplemental Indenture.  By its execution and delivery of this Third
Supplemental Indenture, the undersigned Affiliate Guarantor agrees to be bound
by the provisions of the Indenture, including those of Article XV
thereof.  This Third Supplemental
Indenture is executed and shall be construed as an indenture supplemental to
the Indenture and, as provided in the Indenture, this Third Supplemental
Indenture forms a part thereof.  Except
as herein expressly otherwise defined, the use of the terms and expressions
herein is in accordance with the definitions, uses and constructions contained
in the Indenture.


 


SECTION 2.02 Responsibility
for Recitals, Etc. 
The recitals herein and in the Securities (except in the Trustee’s
certificate of authentication) shall be taken as the statements of the
Partnership, and the Trustee assumes no responsibility for the correctness
thereof.  The Trustee makes no
representations as to the validity or sufficiency of this Third Supplemental
Indenture or of the Securities.  The
Trustee shall not be accountable for the use or application by the Partnership
of the Securities or of the proceeds thereof.


 


SECTION 2.03 Provisions
Binding on Partnership’s, Guarantor’s and Affiliate Guarantor’s Successors.  All the covenants, stipulations, promises and
agreements contained in this Third Supplemental Indenture by each of the
Partnership, the Guarantor and the Affiliate Guarantor shall bind its
respective successors and assigns whether so expressed or not.


 


SECTION 2.04 Governing Law.  THIS THIRD SUPPLEMENTAL
INDENTURE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK.


 


SECTION 2.05 Execution
and Counterparts. 
This Third Supplemental Indenture may be executed with counterpart signature
pages or in any number of counterparts, each of which shall be an original
but such counterparts shall together constitute but one and the same
instrument.


 


SECTION 2.06 Capitalized Terms.  Capitalized terms not otherwise defined in
this Third Supplemental Indenture shall have the respective meanings assigned
to them in the Indenture.


 


(The
remainder of this page is intentionally blank.)


 


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IN WITNESS WHEREOF, the
parties hereto have caused this Third Supplemental Indenture to be duly
executed, all as of the day and year first above written.


 


	
   

  	
  Partnership:

  
	
   

  	
   

  
	
   

  	
  VALERO LOGISTICS OPERATIONS, L.P.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Valero GP, Inc.,

  
	
   

  	
   

  	
  Its General Partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Curtis V.
  Anastasio

  	
   

  
	
   

  	
   

  	
  Name:  Curtis
  V. Anastasio

  
	
   

  	
   

  	
  Title:  President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Guarantor:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  VALERO L.P.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  Riverwalk Logistics, L.P.,

  
	
   

  	
   

  	
  Its General Partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  Valero GP, LLC,

  
	
   

  	
   

  	
   

  	
  Its General
  Partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Curtis V.
  Anastasio

  	
   

  
	
   

  	
   

  	
  Name:  Curtis
  V. Anastasio

  
	
   

  	
   

  	
  Title:  President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Affiliate
  Guarantor:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  KANEB PIPE LINE
  OPERATING PARTNERSHIP, L.P.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Kaneb Pipe Line Company LLC,

  
	
   

  	
   

  	
  Its General Partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Steven A.
  Blank

  	
   

  
	
   

  	
   

  	
  Name:  Steven
  A. Blank

  
	
   

  	
   

  	
  Title:  Senior
  Vice President

  
									



 





















 


	
   

  	
  Trustee:

  
	
   

  	
   

  	
   

  
	
   

  	
  THE BANK OF NEW YORK TRUST COMPANY, N.A. AS
  SUCCESSOR TRUSTEE TO THE BANK OF NEW YORK, AS TRUSTEE

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Patrick T. Giordano

  	
   

  
	
   

  	
  Name:  Patrick
  T. Giordano

  
	
   

  	
  Title:  Vice
  President