Document:

Exhibit

EXHIBIT 10.09

LEASE AND ACCESS AGREEMENT
(Corpus Christi West Terminal)
THIS LEASE AND ACCESS AGREEMENT (this “Lease”) is made and entered into to be effective as of the 1st day of October, 2015 (the “Effective Date”), between Valero Refining-Texas, L.P., a Texas limited partnership (herein called “Lessor”), and Valero Partners Corpus West, LLC, a Delaware limited liability company (herein called “Lessee”).
W I T N E S S E T H:
WHEREAS, on the Effective Date, Lessee has acquired from Lessor the Tank Farm Assets (as defined below) located on the Refinery Site (as defined below) in Corpus Christi, Texas;
WHEREAS, Lessor has agreed to lease to Lessee and Lessee has agreed to lease from Lessor the land on which the Tank Farm Assets are located, on the terms and conditions set forth in this Lease;
WHEREAS, Lessor owns and operates certain facilities and other improvements at the Refinery Site that are necessary or desirable for Lessee to utilize in Lessee’s operations of the Tank Farm Assets but that may also be utilized by Lessor and that Lessor has agreed to provide Lessee with access to in accordance with this Lease; and
NOW, THEREFORE, for and in consideration of the premises, the mutual agreements hereinafter set forth, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Lessor and Lessee covenant and agree as follows:
ARTICLE 1
DEMISE AND PREMISES
1.1    Certain Defined Terms.  Unless the context otherwise requires, the following terms shall have the respective meanings set forth in this Section 1.1:
“Affiliate” means any entity that directly or indirectly Controls, is Controlled by, or is under common Control with the referenced entity, including, without limitation, the referenced entity’s parents and their general partners; provided that, for purposes of this Agreement, Valero and its subsidiaries (other than the General Partner and the Partnership and its subsidiaries), including the Lessor, on the one hand, and the General Partner and the Partnership and its subsidiaries, including the Lessee, on the other hand, shall not be considered Affiliates of each other.
“Applicable Law” means all applicable constitutions, laws (including common law), treaties, statutes, orders, decrees, rules, injunctions, licenses, permits, approvals, agreements, regulations, codes, ordinances issued by any Governmental Authority, including applicable judicial or administrative orders, consents, decrees, and judgments, published directives, guidelines, governmental authorizations, requirements or other governmental restrictions which have the force of law, and determinations by, or interpretations of any of the foregoing by any Governmental 

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Authority having jurisdiction over the matter in question and binding on a given Person, whether in effect as of the date hereof or thereafter and, in each case, as amended.
“Business Day” means any Day except for Saturday, Sunday or an official holiday in the State of Texas.
“Charge Pump” means the last pump prior to pumped inputs entering a refining unit.
“Commencement Date” has the meaning set forth in Section 3.1.
“Control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through ownership of voting securities, by contract, or otherwise.
“Day” means the period of time commencing at 12:00 a.m. on one calendar day and running until, but not including, 12:00 a.m. on the next calendar day, according to local time where the Premises are located.
“Demarcation Point” is defined in the definition of “Facility Pipelines”.
“Environmental Cleanup” has the meaning set forth in Section 10.4.
“Environmental Laws” means all federal, state, and local laws, statutes, rules, regulations, orders, judgments, ordinances, codes, injunctions, decrees, Environmental Permits and other legally enforceable requirements and rules of common law relating to pollution or protection of human health, natural resources, wildlife and the environment or workplace health or safety including the federal Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended, 42 U.S.C. §§9601 et seq., the Resource Conservation and Recovery Act of 1976, as amended, 42 U.S.C. §§6901 et seq., the Clean Air Act, as amended, 42 U.S.C. §§7401 et seq., the Federal Water Pollution Control Act, as amended, 33 U.S.C. §§1251 et seq., the Toxic Substances Control Act, as amended, 15 U.S.C. §§2601 et seq., the Oil Pollution Act of 1990, 33 U.S.C. §§2701 et seq., the Safe Drinking Water Act of 1974, as amended, 42 U.S.C. §§300f et seq., the Hazardous Materials Transportation Act of 1994, as amended, 49 U.S.C. §§ 5101 et seq., and other environmental conservation and protection laws and the Occupational Safety and Health Act of 1970, 29 U.S.C. §§ 651 et seq, and the regulations promulgated pursuant thereto, and any state or local counterparts, each as amended from time to time.
“Environmental Permit” means any permit, approval, identification number, license, registration, certification, consent, exemption, variance or other authorization required under or issued pursuant to any applicable Environmental Law, including applications for renewal of such permits in which the application allows for continued operation under the terms of an expired permit.
“Facility Pipelines” means all crude oil, intermediates and refined product pipelines to the extent they are (i) located wholly on, below, above and/or within the Premises and connect into the Tanks or (ii) located partially on and partially off the Premises and used in connection with the operation of the Tanks, provided that the Parties shall demarcate the point at which any such pipeline 

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located partially on and partially off the Premises connects to any Refinery Pipeline (as determined, the “Demarcation Point”) and that portion extending from the boundary of the Premises to the Demarcation Point shall be considered Facility Pipeline. The Facility Pipelines do not include the Refinery Facilities.
“General Partner” means Valero Energy Partners GP LLC, a Delaware limited liability company.
“Governmental Authority” means any federal, state, tribal, foreign or local governmental entity, authority, department, court or agency, including any political subdivision thereof, exercising, or entitled to exercise, any administrative, executive, judicial, legislative, police, regulatory or taxing authority or power of any nature, and including any arbitrating body, commission or quasi-governmental authority or self-regulating organization of competent authority exercising or enlisted to exercise similar power or authority.
“Hazardous Substance” means (i) any substance, whether solid, liquid, gaseous, semi-solid, or any combination thereof, that is designated, defined or classified as a hazardous waste, solid waste, hazardous material, pollutant, contaminant or toxic or hazardous substance, or terms of similar meaning, or that is otherwise regulated under any Environmental Law, including any hazardous substance as defined under the Comprehensive Environmental Response, Compensation, and Liability Act, as amended, and including asbestos and lead-containing paints or coatings and (ii) petroleum, oil, gasoline, natural gas, fuel oil, motor oil, waste oil, diesel fuel, jet fuel, and other refined petroleum hydrocarbons.
“Improvements” and “Material Improvements” have the meanings set forth in Section 7.1.
“Interest Rate” means an annual rate (based on a 360-day year) equal to the lesser of (i) two percent (2%) over the prime rate as published under “Money Rates” in the Wall Street Journal in effect at the close of the Business Day on which payment was due and (ii) the maximum rate permitted by Applicable Law.
“Lessee Indemnified Party(ies)” means Lessee and all other members of the Partnership Group and their respective officers, directors, shareholders, unitholders, members, managers, employees, agents, representatives, successors and assigns.
“Lessee Responsible Parties” has the meaning set forth in Section 10.1.
“Lessor Indemnified Party(ies)” means Lessor and its ultimate parent company and their Affiliates (other than members of the Partnership Group) and their respective officers, directors, shareholders, unitholders, members, managers, employees, agents, representatives, successors and assigns.
“Lessor Services” has the meaning set forth in Section 5.1.
“Losses” means any losses, damages, liabilities, claims, demands, causes of action, judgments, settlements, fines, penalties, costs and expenses (including court costs and reasonable 

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attorney’s and expert’s fees) of any and every kind or character, known or unknown, fixed or contingent.
“Omnibus Agreement” means that certain Amended and Restated Omnibus Agreement dated July 1, 2014, among Valero Energy Corporation, a Delaware corporation, Valero Marketing and Supply Company, a Delaware corporation, Valero Terminaling and Distribution Company, a Delaware corporation, The Premcor Refining Group Inc., a Delaware corporation, The Premcor Pipeline Co., a Delaware corporation, Valero Energy Partners LP, a Delaware limited partnership, Valero Energy Partners GP LLC, a Delaware limited liability company, Valero Partners Operating Co. LLC, a Delaware limited liability company, Valero Partners EP, LLC, a Delaware limited liability company, Valero Partners Lucas, LLC, a Delaware limited liability company, Valero Partners Memphis, LLC, a Delaware limited liability company, Valero Partners North Texas, LLC, a Delaware limited liability company, Valero Partners South Texas, LLC, a Delaware limited liability company, Valero Partners Wynnewood, LLC, a Delaware limited liability company, Valero Partners Louisiana, LLC, a Delaware limited liability company, and Valero Partners Houston, LLC, a Delaware limited liability company, as the same has been amended by that certain Amendment and Restatement of Schedules to Amended and Restated Omnibus Agreement dated as of the Effective Date, and as the same may be further amended and supplemented from time to time.
“Partnership” means Valero Energy Partners LP.
“Partnership Agreement” means the First Amended and Restated Agreement of Limited Partnership of the Partnership, dated as of December 16, 2013, as the same may be amended from time to time.
“Partnership Change in Control” means Valero ceases to Control the general partner of the Partnership.
“Partnership Group” has the meaning ascribed to such term in the Partnership Agreement.
“Permitted Exceptions” has the meaning set forth in Section 2.2.
“Permitted Transferee” has the meaning set forth in Section 17.3.
“Permitted Use” has the meaning set forth in Section 6.1.
“Permits” means all permits, licenses, franchises, authorities, consents, and approvals, as necessary under applicable Environmental Laws for operating the Tank Farm Assets and/or the Premises.
“Person” means any individual or entity, including any partnership, corporation, association, joint stock company, trust, joint venture, limited liability company, unincorporated organization or Governmental Authority (or any department, agency or political subdivision thereof).
“Premises” means those tracts or parcels of land located in Corpus Christi, Texas on which the Tank Farm Assets are situated as depicted by the cross-hatched areas identified on Exhibit C attached hereto and made a part hereof for all purposes. The Premises is shown on Exhibit C as 

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four (4) separate depictions with each including a cross reference to the Refinery Site parcel or tract upon which the Premises is located. For avoidance of doubt, the Premises is intended to include all of the land underlying the Tanks and those portions adjacent to the Tanks that are necessary for the use and operation of the Tank Farm Assets and the Improvements, including where applicable, the dike walls or other containment areas surrounding the Tanks. The Premises do not include the Refinery Facilities and any roads, drives or other ingress and egress areas located within the boundaries of the Premises (it being understood that Lessee shall have a non-exclusive right to use such roads, drives or other ingress and egress areas pursuant to Section 2.2 hereof).
“Refinery” means the crude oil refinery and related facilities (commonly known as the “Valero Corpus Christi West Refinery”) owned and operated by Lessor in Corpus Christi, Texas at the Refinery Site.
“Refinery Facilities” means those assets and facilities of Lessor or third parties that may be located on the Premises but are used in connection with the operation of the Refinery (as opposed to the delivery, storage and redelivery of crude oil, feedstocks and products to the Tanks) or are necessary in order for Lessor to provide the Lessor Services, including without limitation any (i) water lines water tanks and fire water systems; (ii) waste water facilities; (iii) control or maintenance buildings; (iv) Charge Pumps; (v) pressurized tanks (bullets and spheres); (vi) Refinery Pipelines; (vii) pipe racks that are not wholly located within the Premises; (viii) tanks not in hydrocarbon service; and (ix) electrical and IT/controls infrastructure.
“Refinery Pipelines” means (i) any crude oil, intermediates or refined products pipeline or portion thereof that runs between a Demarcation Point and a point off the Premises for the purpose of delivering crude oil, intermediates and products into the Tanks or receiving crude oil, intermediates and products from the Tanks and (ii) any crude oil, intermediates or refined products pipeline, or portion thereof, that runs between a Demarcation Point and a point off the Premises for the purpose of delivering crude oil, intermediates and refined products to the Refinery process units or receiving crude oil, intermediates and refined products from the Refinery process units.
“Refinery Site” means those tracts or parcels of land located in Corpus Christi, Texas where the Premises are located as more particularly described on Exhibit B attached hereto and made a part hereof for all purposes, or which may be acquired by Lessor after the date hereof for which access thereto is necessary for the use and operation of the Tank Farm Assets or the Improvements, together with any other tracts or parcels of land adjacent thereto and any common areas, parking areas and driveways for vehicular and pedestrian ingress/egress related thereto to the extent owned or controlled by Lessor and, for which access is necessary for the use and operation of the Tank Farm Assets or the Improvements.
“Refinery Site-Wide Permits” means those Permits under which Lessor, immediately prior to the Commencement Date, operated the Refinery and the Tank Farm Assets.
“Release” means any spilling, leaking, seeping, pumping, pouring, emitting, emptying, injecting, discharging, escaping, leaching, dumping, disposing or releasing of any Hazardous Substances into the environment (including the air, soil, surface water, or groundwater) of any kind whatsoever, but not any offsite disposal or treatment in accordance with Environmental Law.

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“Rent” has the meaning set forth in Section 4.1.
“Shared Access Facilities” has the meaning set forth in Section 2.2.
“Tanks” means the crude oil, refined products and intermediates storage tanks identified on Exhibit A attached hereto and incorporated herein for all purposes. For further identification the Tanks have been cross-hatched on the depiction of the Premises set forth on Exhibit C.
“Tank Farm Assets” means the Tanks, together with (i) tank valves, tank gauges, booster pumps, transfer pumps, meters, vapor combustion unit, recorders, fittings, pressure and temperature equipment, cathodic protection equipment, leak detection equipment, improvements and other equipment, all of which are located on the Premises and used in connection with the operation of the Tanks and (ii) the Facility Pipelines.
“Tax Reimbursement” has the meaning set forth in Section 9.2.
“Taxes” means all federal, state and local real and personal property ad valorem taxes, assessments, and other governmental charges, general and special, ordinary and extraordinary, including but not limited to assessments for public improvements or benefits assessed against the Premises or Tank Farm Assets or the use or operation thereof during the Term, including, but not limited to, any federal state or local income, gross receipts, withholding, franchise, excise, sales, use, value added, recording, transfer or stamp tax, levy, duty, charge or withholding of any kind imposed or assessed by any Governmental Authority, together with any addition to tax, penalty, fine or interest thereon. The term “Taxes” does not, however, include federal or state income taxes or franchise taxes imposed on Lessor.
“Term” has the meaning set forth in Section 3.1.
“Third Party Maintenance Contracts” has the meaning set forth in Section 5.5.
“Transaction Agreement” means that certain Transaction Agreement dated October 1, 2015, among Valero Terminaling and Distribution Company and the Partnership.
“Valero” means Valero Energy Corporation.
1.2    References.  As used in this Lease, unless a clear contrary intention appears: (a) the singular includes the plural and vice versa; (b) reference to any Person includes such Person’s successors and assigns but, in the case of a Party, only if such successors and assigns are permitted by this Lease, and reference to a Person in a particular capacity excludes such Person in any other capacity; (c) reference to any gender includes each other gender; (d) reference to any agreement (including this Lease), document or instrument means such agreement, document, or instrument as amended or modified and in effect from time to time in accordance with the terms thereof and, if applicable, the terms of this Lease; (e) reference to any Section means such Section of this Lease, and references in any Section or definition to any clause means such clause of such Section or definition; (f) “hereunder,” “hereof,” “hereto” and words of similar import will be deemed references to this Lease as a whole and not to any particular Section or other provision hereof or thereof; 

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(g) “including” (and with correlative meaning “include”) means including without limiting the generality of any description preceding such term; and (h) relative to the determination of any period of time, “from” means “from and including,” “to” means “to but excluding” and “through” means “through and including.”
ARTICLE 2
DEMISE OF PREMISES
2.1    Demise of Premises.  Lessor, in consideration of the Rent to be paid and of the covenants and agreements in this Lease to be performed by Lessee, does hereby lease and demise to Lessee and Lessee hereby leases, the Premises, upon and subject to the terms, covenants and conditions set forth in this Lease.
2.2    Shared Access Facilities.  During the Term, Lessor hereby grants to Lessee and its respective Affiliates, agents, employees and contractors, for no additional consideration, an irrevocable, non-exclusive right of access to and use of those portions of the Refinery Site that are reasonably necessary for access to and/or the use, operation, maintenance, replacement, inspection, protection, repair and removal of the Tank Farm Assets and Improvements by Lessee, all so long as such access and use by any of the Lessee Responsible Parties does not unreasonably interfere in any material respect with Lessor’s operations at the Refinery Site and materially complies with Lessor’s rules, norms and procedures governing safety and security at the Refinery Site. Such access rights in favor of Lessee shall include, but not be limited to the right to use roads within the Refinery Site that provide Lessee access, ingress and egress to the Tank Farm Assets and Improvements and the right to use the Refinery Pipelines, docks, and pumps (and associated utilities) for the movement of crude oil, intermediates and refined products in and out of the Tank Farm Assets, whether or not such Refinery Pipelines are wholly-located on the Refinery Site. Lessor shall not unreasonably interfere with such access and use rights. The facilities from time to time on the Refinery Site that are subject to the access and use rights provided under this Section 2.2 are referred to herein as the “Shared Access Facilities”.
2.3    “Subject to” Restrictions, Etc.; Reservations.  This Lease is expressly granted by Lessor and accepted by Lessee subject to all applicable building, zoning and other ordinances and governmental requirements affecting the Premises and to all restrictions, covenants, encumbrances, rights-of-ways, easements, exceptions, reservations and other matters of record encumbering or affecting the Premises. Furthermore, subject to the rights of Lessee hereunder, Lessor reserves the right to grant any, easements, licenses, and other similar agreements affecting the Premises, including, without limitation, utility and pipeline easements, provided that such easements and licenses shall be located in a manner that minimizes interference with the operations of Lessee at the Premises and does not increase any operational cost or risk to Lessee, while also minimizing construction and operational costs and risks for Lessor. The matters referenced in this Section 2.3 are the “Permitted Exceptions”.
2.4    Acceptance of Premises.  Lessee acknowledges that it is familiar with the Premises and its condition. Lessee accepts the Premises in its “AS-IS,” “WITH ALL FAULTS” physical condition as of the Commencement Date, subject to the terms and conditions of this Lease. LESSOR MAKES NO REPRESENTATIONS OR WARRANTIES WHATSOEVER, EXPRESS OR IMPLIED, OR ARISING BY OPERATION OF LAW, INCLUDING, BUT NOT LIMITED TO, ANY 

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WARRANTY OF CONDITION, HABITABILITY, SUITABILITY, MERCHANTABILITY, OR FITNESS FOR A PARTICULAR PURPOSE, AND INCLUDING WITHOUT LIMITATION, (A) THE CONDITION OR SUFFICIENCY OF THE PREMISES FOR LESSEE’S INTENDED USE; (B) THE CONDITION OR ZONING STATUS OF THE PREMISES, OR ANY OTHER FACT OR MATTER RELATING THERETO; OR (C) WHETHER ANY OF THE PREMISES CONTAINS ANY SUBSTANCE OR MATERIAL WHICH IS OR MAY BE IN VIOLATION OF ANY ENVIRONMENTAL LAW. Lessee acknowledges that, except as may be otherwise expressly provided herein, in no event shall Lessor have any obligation for any defects in the Premises or any limitation on its use. The taking of possession of the Premises shall be conclusive evidence that the Premises was in good condition at the time possession was taken.
ARTICLE 3
TERM
3.1    Term.  The initial term of this Lease (the “Initial Term”) shall be for 10 years commencing on October 1, 2015 (the “Commencement Date”). Following the Initial Term the Term of this Lease shall automatically renew for four successive five-year periods (each a “Renewal Term”). Lessee may terminate this Lease at the end of the Initial Term or any subsequent Renewal Term by delivering written notice to Lessor, on or before 180 days prior to the end of any such period, that Lessee has elected to terminate this Lease. The Initial Term together with any applicable Renewal Terms shall be referred to herein as the “Term”. In addition, at Lessee's option, Lessee may terminate this Lease, by providing written notice to Lessor on or before 180 days prior to the desired termination date, if Lessee ceases to operate the Tanks, or ceases its business operations. In the event of such termination prior to the end of the Term, Lessor shall retain one half of the remaining Rent (as defined below) for the current 12‐month rental period as set forth in Section 4.1 below as its sole and exclusive remedy for such early termination and shall refund to Lessee the remaining Rent. In the event the aforesaid Commencement Date shall occur on a date other than the first day of the calendar month, then the Term of this Lease shall be for the number of full lease years plus the number of days remaining in the month in which the Term commences.
ARTICLE 4
RENT
4.1    Rent.  Lessee shall pay to Lessor annual rent (“Rent”) in the initial amount of $663,000.00 per year, payable in equal monthly installments on or before the last day of each month in the amount of $55,250.00. If any installment of Rent falls due on a day that is not a Business Day, then such installment shall be due and payable on the next day that is a Business Day. Rent for any partial lease year and/or month at the beginning and/or end of the Term shall be prorated based on the number of days during such lease year and/or month that this Lease was in effect.
4.2    Accrual and Payment of Rent.  All Rent shall be payable in immediately available funds to an account specified in writing by Lessor from time to time, or at Lessor’s address set forth in Section 19.12 (or at such place or places as Lessor may from time to time direct), free from all claims, demands, set offs, or counterclaims against Lessor of any kind or character. Any delinquent payment (that is, any payment not made within five calendar days after the due date) shall, in addition to any other remedy of Lessor, incur a late charge of 5% (which late charge is intended to compensate 

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Lessor for the cost of handling and processing such delinquent payment and should not be considered interest) and bear interest at the Interest Rate, such interest to be computed from and including the date such payment was due through and including the date of the payment; provided, however, in no event shall Lessee be obligated to pay a sum of late charge and interest higher than the maximum rate permitted by Applicable Law.
4.3    Escalation.  On July 1, 2016, and on July 1st of each year thereafter during the Term, Lessor shall adjust Rent by multiplying Rent by an amount equal to a maximum of (a) 1.0 plus (b) a fraction, of which (i) the numerator is the positive change, if any, in the Consumer Price Index – All Urban Consumers (Series ID CUUR0300SA0) (such index, the “CPI”) during the 12‐month period ending March 31st of such year, as reported during the month of April of such year and (ii) the denominator is the CPI as of the first day of such 12‐month period, provided that if, with respect to any such 12‐month period, the CPI has decreased during such 12‐month period, Company may increase fees on the following July 1 only to the extent that the percentage change in the CPI since the most recent previous such increase in fees is greater than the aggregate amount of the cumulative decreases in the CPI during the intervening period or periods.
4.4    Independent Covenant.  The obligation of Lessee to pay Rent is an independent covenant, and no act or circumstances whatsoever, whether such act or circumstances constitutes a breach of a covenant by Lessor or not, shall release Lessee of the obligation to pay Rent.
4.5    Rental.  Wherever the term “Rental” or “Rent” is used under the terms of this Lease it shall be deemed to refer to the Rent as well as any additional rental due hereunder unless the context specifically states otherwise.
ARTICLE 5
ADDITIONAL LESSOR OBLIGATIONS
5.1    Provision of Lessor Services.  During the Term of this Lease, in consideration of the Rent, Lessor shall make available and provide to Lessee, in accordance with the terms and conditions of this Lease, shared use of certain services, utilities, materials and facilities as more fully described on Exhibit D (the “Lessor Services”), located or utilized at the Refinery that are necessary to operate and maintain the Tank Farm Assets as currently operated and maintained.
5.2    Adjustment to Rent for Lessor Services.  If the actual cost to Lessor of providing any Lessor Services or any additional Lessor Services exceeds the amount allocated therefor in the Rent (taking into account any increases in Rent pursuant to Section 4.3), Lessor may increase the Rent by an amount equal to such increase. Lessor shall provide Lessee reasonable supporting documentation for any such increase, and if Lessee objects to the amount of any such increase Lessor and Lessee will negotiate in good faith to resolve such dispute. Prior to resolution of any such dispute, Lessee shall continue to pay the Rent prevailing prior to Lessor’s requested adjustment, with a true-up payment to be made by Lessee promptly upon resolution of the dispute (assuming that the parties agree to an increase in Rent).

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5.3    Increased Quantities and Additional Lessor Services:
		
	(a)
	If subsequent to the date hereof increased quantities of any Lessor Services are reasonably required by Lessee in connection with its ownership, operation or maintenance of the Tank Farm Assets or any improvements or additions thereto, Lessor shall use commercially reasonable efforts to provide such increased quantities of such Lessor Services on the same terms and conditions set forth in Exhibit D, so long as the provision of such increased quantities does not interfere in any material respect with Lessor’s operations at the Refinery Site or require Lessor to make a capital improvement in order to provide such increased Lessor Services. If the provision by Lessor of increased quantities of any Lessor Services as requested by Lessee would require Lessor to make such a capital improvement, then Lessee may submit a request to Lessor. If increased quantities of any Lessor Services is requested by Lessee, and provided by Lessor, the Rent may be increased in accordance with Section 5.2 hereof. Notwithstanding anything to the contrary herein, in the event that (i) Lessee uses the Tank Farm Assets to provide services to third parties; (ii) Lessee’s provision of such third-party services results in a material increase of any Lessor Services required by Lessor Services; and (iii) provision of such Lessor Services is available to Lessee from third-party vendors on commercially reasonable terms, then Lessor may decline to provide such increased and additional Lessor Services.

		
	(b)
	If subsequent to the date hereof Lessor Services not specifically described herein, but which are being produced or utilized by Lessor or its Affiliates in the normal course of their operations at the Refinery Site, are or become reasonably necessary to operate or maintain the Tank Farm Assets and any Improvements, Lessor shall use commercially reasonable efforts to provide such Lessor Services on terms and conditions consistent with the provision of the existing Lessor Services by Lessor. The Rent with respect to such additional Lessor Services may be increased in accordance with Section 5.2 hereof.

5.4    Disclaimers.
		
	(a)
	FAILURE TO ANY EXTENT TO MAKE AVAILABLE, OR ANY SLOW-DOWN, STOPPAGE OR INTERRUPTION OF ANY LESSOR SERVICES DESCRIBED IN THIS ARTICLE 5 RESULTING FROM ANY CAUSE WHATSOEVER (OTHER THAN LESSOR’S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT) SHALL NOT RENDER LESSOR LIABLE IN ANY RESPECT FOR DAMAGES, NOR BE CONSTRUED AS AN EVICTION OF LESSEE (ACTUAL OR CONSTRUCTIVE) NOR RELIEVE LESSEE FROM FULFILLMENT OF ANY COVENANT OR AGREEMENT HEREOF. NEITHER LESSOR NOR ANY OF ITS LESSOR INDEMNIFIED PARTIES SHALL BE LIABLE TO LESSEE OR ANY OF THE LESSEE INDEMNIFIED PARTIES FOR ANY LOSSES ARISING OUT OF THE PROVISION AND DELIVERY OF (OR FAILURE TO PROVIDE AND DELIVER) ANY LESSOR SERVICES, AND 

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LESSEE HEREBY RELEASES THE LESSOR INDEMNIFIED PARTIES FROM ALL SUCH LOSSES.
		
	(b)
	LESSEE ASSUMES ALL RISKS AND LIABILITIES IN CONNECTION WITH ITS USE OF ANY LESSOR SERVICES PROVIDED BY LESSOR PURSUANT TO THE TERMS OF THIS LEASE OTHER THAN TO THE EXTENT ARISING FROM LESSOR’S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT. LESSEE HAS NOT MADE, DOES NOT MAKE, AND SPECIFICALLY DISCLAIMS ANY AND ALL REPRESENTATIONS, WARRANTIES, COVENANTS, AGREEMENTS, OR GUARANTIES OF ANY KIND OR CHARACTER WHATSOEVER, WHETHER EXPRESS OR IMPLIED, ORAL OR WRITTEN, PAST, PRESENT, OR FUTURE, OF, AS TO, CONCERNING OR WITH RESPECT TO THE LESSOR SERVICES SO PROVIDED INCLUDING WITHOUT LIMITATION (I) THE NATURE, QUALITY, CHARACTER OR SUFFICIENCY OF FACILITIES AND EQUIPMENT UTILIZED TO SUPPLY THE LESSOR SERVICES TO LESSEE; (II) THE CONDITION OF THE LESSOR SERVICES; (III) ANY SPECIFIC PRESSURE OR VOLUME OF FIREWATER, IT BEING UNDERSTOOD THAT NO SUCH GUARANTEE IS PROVIDED BY LESSOR, AND THAT THERE MAY BE TIMES WHEN THE FIREWATER SERVICE TO EITHER OR BOTH THE TANKS AND THE REFINERY IS INTERRUPTED OR UNAVAILABLE; (IV) THE COMPLIANCE OF OR BY THE LESSOR SERVICES WITH ANY APPLICABLE LAWS; (V) THE MERCHANTABILITY, OR FITNESS OF THE LESSOR SERVICES FOR A PARTICULAR PURPOSE; OR (VI) ANY OTHER MATTER WITH RESPECT TO THE LESSOR SERVICES OR THEIR RESPECTIVE DELIVERY FACILITIES (COLLECTIVELY THE “DISCLAIMED MATTERS”). LESSEE HEREBY WAIVES ANY SUCH DISCLAIMED MATTERS. FURTHER, LESSOR MAKES NO WARRANTY OR REPRESENTATION THAT THE LESSOR SERVICES CONFORM TO LESSEE’S SPECIFICATIONS OR ANY LEGAL OR INDUSTRY STANDARDS.

5.5    Third Party Maintenance Providers.  Lessor and its Affiliates have contracts with third-party service providers with respect to the maintenance and inspection of certain Refinery Facilities and Shared Access Facilities which contracts have historically related in part to the Tank Farm Assets (the “Third Party Maintenance Contracts”). With respect to those Third Party Maintenance Contracts that have not been assigned to Lessee or its Affiliates or that Lessee or its Affiliates are not a party to, (i) Lessor or its Affiliates shall cause such third-party service providers to perform such services under such Third Party Maintenance Contracts as reasonably requested by Lessee or its Affiliates with respect to the Tank Farm Assets and (ii) Lessee and its Affiliates shall be solely responsible for any costs, fees or expenses or any Losses arising from such requests, and shall indemnify and hold harmless Lessor and its Affiliates therefor.

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ARTICLE 6
CONDUCT OF BUSINESS
6.1    Use of Premises.  Lessee shall have the right to use the Premises for the purpose of operating, maintaining, repairing and replacing the Tank Farm Assets and for any other lawful purpose associated with the operation and ownership of the Tank Farm Assets (the “Permitted Use”). Lessee shall not use the Premises (or permit the Premises to be used by or under Lessee) for any unlawful purpose. Lessee shall not use the Premises in any manner or for any purpose which will cause the forfeiture of or will violate any Applicable Law or in such a manner as to materially threaten or harm Lessor’s interest in the Premises. No activities or operations performed by or on behalf of Lessee under this Lease shall cause any interference with the operations of Lessor at the Refinery.
6.2    Waste.  Lessee shall not commit, or suffer to be committed, any waste upon the Premises, ordinary wear and tear or damages to the extent caused by any Lessor Indemnified Party excepted, and subject to the provisions of Article 14.
6.3    Governmental Regulations.  Lessee shall, at Lessee’s sole cost and expense, at all times comply with all Applicable Laws (including, without limitation, requirements under Environmental Laws, zoning laws, building and fire codes, and permitting requirements) now in force, or which may hereafter be in force, pertaining to the Premises or the ownership, operation and maintenance of the Tank Farm Assets.
6.4    Refinery Site-Wide Permits.  Lessee and Lessor shall use commercially reasonable efforts to cause the applicable Governmental Authorities, to the extent allowed by Applicable Law, to separate the Tank Farm Assets and the Improvements from the coverage of any Refinery Site-Wide Permits following the Commencement Date in order to provide for separate Permits to be held directly by Lessee with respect to the Tank Farm Assets and the Improvements. To the extent that the Tank Farm Assets and the Improvements remain under any Refinery Site-Wide Permits or other Permits held directly by Lessor, Lessor agrees to allow (to the extent allowed by Applicable Law) such Tank Farm Assets and the Improvements to continue coverage under such Permits.
ARTICLE 7
ALTERATIONS, IMPROVEMENTS AND MAINTENANCE
7.1    Improvements.  Lessee may make any alterations, additions, improvements or other changes to the Tank Farm Assets as may be necessary or useful in connection with the Permitted Use in Lessee’s reasonable discretion (collectively, the “Improvements”), without the prior written consent of Lessor, provided Lessee complies with the requirements of this Lease (including, without limitation, Section 6.3 and this Article 7) with respect thereto. If such Improvements require alterations, additions or improvements to the Premises or any of the Shared Access Facilities, Lessee shall notify Lessor in writing in advance and the parties shall negotiate in good faith any increase to the rental paid by Lessee or otherwise provide for reimbursement of any material increase in cost (if any) to Lessor that result from any modifications to the Premises or the Shared Access Facilities necessary to accommodate the Improvements, or as otherwise mutually agreed by the parties. Notwithstanding the foregoing or any other provision to the contrary contained herein, if there is a Partnership Change in Control, then Lessee shall not be permitted to make any Material 

12

Improvements (as defined below), without the prior written consent of Lessor, which may not be unreasonably withheld, conditioned or delayed; provided that Lessor’s consent shall not be required hereunder if the Improvements (i) are required by Applicable Law; (ii) are pursuant to Section 14.2 below; or (iii) do not interfere in any material respect with the operations of the Refinery and do not materially increase any of Lessor’s obligations or liabilities under this Lease or any other related agreement. If the Material Improvements cause such interference or materially increase Lessor’s obligations or liabilities under this Lease or any other related agreement, Lessee agrees to indemnify, defend and hold harmless the Lessor Indemnified Parties from and against any Losses resulting from such interference or the increase in Lessor’s obligations or liabilities under this Lease or any other related agreement. For purposes of this paragraph, the term “Material Improvements” means any Improvements which cost in excess of $15,000,000. If Lessor’s consent is required hereunder, Lessor shall provide written notice to Lessee of Lessor’s acceptance or rejection of any proposed construction or material alteration within thirty (30) days after Lessor’s receipt of the written request for such consent and adequate written explanation and supporting written information respecting the proposed construction or material alteration. In no way shall Lessee act or represent to any contractor, subcontractor, materialman, supplier or laborer that it is acting on behalf of or as agent of Lessor with regard to any construction, maintenance, repair or other work whatsoever on or about the Premises.
7.2    Maintenance by Lessee.  Except as otherwise expressly provided below in Article 14, Lessee shall at its sole cost, risk and expense at all times keep the Premises, the Tank Farm Assets and the Improvements in good order and repair and make all necessary repairs thereto, structural and nonstructural, ordinary and extraordinary, and unforeseen and foreseen (ordinary wear and tear excepted). When used in this Section 7.2, the term “repairs” shall include all necessary replacements, renewal, alterations and additions. All repairs made by Lessee shall be at least equal in quality and class to the original work. Lessor may (but shall not be obligated to) perform any repairs if Lessee fails to do so (following Lessor’s notice to Lessee and Lessee’s opportunity to cure such failure pursuant to Section 13.11(b) hereof, except in the event of an emergency situation), in which event Lessee shall reimburse Lessor for all reasonable costs and expenses incurred by Lessor in connection therewith.
7.3    Requirements for all Construction.  In connection with any construction, alteration, repair, maintenance, or other similar work at or about the Premises done by or under Lessee, including any Improvements: (i) all work shall be performed in a good and workmanlike manner, and shall comply with all Applicable Laws; (ii) for construction or alterations requiring Lessor’s consent as described above, all construction and material alteration work shall be performed in accordance with plans and specifications previously approved by Lessor, which approval shall not be unreasonably withheld, conditioned, or delayed (provided that such plans and specifications shall be provided to Lessor in advance for Lessor’s review even if Lessor’s approval is not required under this Lease); and (iii) Lessee shall not permit any mechanics’, materialman’s or other liens to be filed or recorded against the Premises for any work or materials performed for or provided to Lessee (other than a notice of commencement or similar notice of the commencement of statutory lien rights which is not a claim or notice of a failure to pay, and except for liens being contested in good faith by Lessee that Lessee has bonded over or otherwise taken appropriate steps to ensure cannot be foreclosed or otherwise enforced). Without limiting the foregoing, Lessee agrees to indemnify 

13

and hold harmless Lessor and the Premises from and against all claims, liens and demands (including, without limitation, mechanic’s and materialman’s liens) by or on behalf of any party, arising from the use, occupancy, conduct or management of or from any work or thing whatsoever done in, on or about the Premises by Lessee or any party acting under Lessee (other than any Lessor Indemnified Party).
7.4    Liability Disclaimer.  No review or approval of plans, specifications or other information or documentation by Lessor shall constitute a representation or warranty by Lessor that such plans, specifications or other information or documentation satisfy any applicable laws or other requirements or will provide for a safe operation, and no such review or approval shall make Lessor otherwise liable with respect thereto. Lessee shall be solely responsible for determining whether its plans, specifications, construction and maintenance meet its needs, satisfy applicable laws and other requirements and will provide for a safe operation.
ARTICLE 8
ACCESS; RELOCATION
8.1    Lessor’s Access.  Lessor hereby retains for itself and its Affiliates, agents, employees and contractors, the right of access to all of the Premises, the Tank Farm Assets and the Improvements (i) to determine whether the conditions and covenants contained in this Lease are being kept and performed; (ii) to comply with Environmental Laws; (iii) to inspect, maintain, repair, improve, replace and operate the Refinery Facilities or the Shared Access Facilities and any assets of Lessor located on the Premises or to install or construct any structures or equipment necessary for the maintenance, operation or improvement of any such assets or the installation, construction or maintenance of any connection facilities; (iv) if reasonably necessary for access to an/or the operation, maintenance, replacement, inspection, protection, repair and removal of any of Lessor’s assets; and/or (v) to show the Premises to prospective lenders or purchasers, provided, however, that Lessor’s entry upon, inspection of and/or access to the Premises shall not unreasonably interfere in any material respect with Lessee’s operation of the Premises and complies with Lessee’s reasonable safety requirements.
8.2    Relocation of Tank Farm Assets.  Lessor shall have the right to move Lessor’s assets located on the Refinery Site, so long as it is not reasonably foreseeable that such relocation will adversely affect Lessee’s business operations on the Premises and the operation of the Tank Farm Assets or Improvements. If such relocation of Lessor’s assets requires relocation of any of the Tank Farm Assets or Improvements, then such relocation of the Tank Farm Assets or Improvements shall be at Lessor’s sole cost and expense.
ARTICLE 9
TAXES, ASSESSMENTS
9.1    Lessee’s Obligation for Taxes on the Tank Farm Assets.  Lessee shall pay and discharge, prior to delinquency all Taxes which are levied or assessed, and/or which become payable during the Term upon all or any part of the Tank Farm Assets and the Improvements or Lessee’s use or operation of the Tank Farm Assets and the Improvements. Upon written request by Lessor, Lessee shall provide Lessor evidence that Lessee has paid all Taxes within thirty (30) days thereafter. In 

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the event Lessee fails to pay any such taxes before the final due date for those sums, Lessor may pay those sums to the taxing authority and any amounts paid by Lessor shall bear interest at the Interest Rate from the date paid by Lessor until repaid by Lessee.
9.2    Lessee’s Obligation for Taxes on the Premises.  Lessor and Lessee shall use commercially reasonable efforts to cause the Premises to be separately assessed for purposes of Taxes as soon as reasonably practicable following the Commencement Date (to the extent allowed by Applicable Law). During the Term, Lessee shall pay all Taxes assessed directly against the Premises directly to the applicable taxing authority prior to delinquency and shall promptly thereafter provide Lessor with evidence of such payment. In the event Lessor and Lessee are unable to cause the Premises to be separately assessed as provided above, Lessee shall pay or reimburse Lessor, upon request, for any such Taxes paid by Lessor to the applicable taxing authorities (the “Tax Reimbursement”). The Tax Reimbursement shall be equal to the total portion of such Taxes attributable to the Premises, as determined in the reasonable discretion of Lessor, provided however, if the Premises are not rendered as a separate tax parcel the Tax Reimbursement as to the Premises shall equal the product of the total portion of Taxes relating to the combined land area of the Refinery and the Premises multiplied by a fraction, the numerator of which is the actual number of square feet of the Premises and the denominator of which is the total number of square feet of the combined land area of the Refinery and the Premises at the time of the assessment. The certificate issued or given by the appropriate officials authorized or designated by applicable Law to issue or give the same or to receive payment of such Taxes shall be prima facie evidence of the existence, payment, nonpayment and amount of such Taxes. Lessee may contest the validity or amount of any such Taxes or the valuation of the Premises, at Lessee’s sole cost and expense, by appropriate proceedings, diligently conducted in good faith in accordance with applicable Law. If Lessee contests such items, then Lessor shall cooperate with Lessee in any such contesting of the validity or amount of any such Taxes or the valuation of the Premises. Taxes for the first and last years of the Term shall be prorated between the parties based on the portions of such years that are coincident with the applicable tax years and for which each applicable party is responsible
ARTICLE 10
ENVIRONMENTAL
10.1    Compliance.  During the Term, Lessee shall comply with Environmental Laws applicable to its operations and business at or on the Premises which compliance shall include handling, storing, and disposing of all substances at, in or on the Premises in compliance with all applicable Environmental Laws and satisfying any and all environmental enforcement, permitting, notifications or reporting requirements directly arising out of Lessee’s use of the Premises, as required by Applicable Law. Without limiting the foregoing, Lessee shall not (i) use or knowingly permit the use by or under Lessee or any vendors, equipment lessors, invitees, licensees, carriers, contractors or subcontractors of any tier of any of the Lessee Indemnified Parties (collectively, the “Lessee Responsible Parties”) of the Premises for the on-site disposal of Hazardous Substances or any other activities in violation of Environmental Laws or (ii) Release, or knowingly allow the Release by or under Lessee or any Lessee Responsible Parties, of any Hazardous Substances onto the Premises or adjacent lands or waters in violation of or at concentrations that exceed those allowed by Environmental Laws.

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10.2    Hazardous Substances.  Lessee may not store any types or quantities of Hazardous Substances on the Premises except for petroleum products used, stored and handled in connection with the operation of the Tank Farm Assets in accordance with the Permitted Use and de minimis quantities of other Hazardous Substances, provided that such Hazardous Substances are used, stored, and otherwise handled in compliance with applicable Environmental Laws.
10.3    Notices.
		
	(a)
	Lessee shall provide Lessor with material safety data sheets (“MSDS”) on all Hazardous Substances brought onto the Premises or stored in the Tanks.

		
	(b)
	Except with respect to those Hazardous Substances used, stored and otherwise handled by Lessee in conjunction with the operation of the Tank Farm Assets in accordance with the Permitted Use and used, stored, and otherwise handled in compliance with applicable Environmental Laws (Lessor hereby acknowledging that certain Hazardous Substances will be used, handled and stored in the ordinary course of operations), Lessee shall notify Lessor promptly upon the discovery by Lessee of any Hazardous Substances at, on or in the Premises, at concentrations exceeding those allowed by Environmental Laws or upon receipt of written communication from any governmental agency concerning the actual or alleged violation of an applicable Environmental Law in any way related to the Premises. Lessee shall provide notice to Lessor of any suit filed against Lessee or with respect to the Premises by any non-governmental third party alleging violations of applicable Environmental Law by Lessee (or anyone acting on behalf of Lessee) at the Premises.

		
	(c)
	Lessor shall promptly notify Lessee of any Release of Hazardous Substances at or associated with Lessor’s refinery process to the extent adversely affecting the Premises or that could present an unreasonable risk to Lessee’s employees.

10.4    Lessee Indemnity.  Except to the extent otherwise provided in the Omnibus Agreement or the Transaction Agreement (which shall govern and control in the event of any conflict with this Section 10.4), Lessee shall indemnify, defend and hold harmless the Lessor Indemnified Parties from and against all Losses suffered or incurred by any of the Lessor Indemnified Parties, directly or indirectly, including as a result of any claim by a third party, by reason of or arising out of:
		
	(a)
	Lessee’s failure or alleged failure to comply with Environmental Laws or its obligations under Article 10 hereof;

		
	(b)
	any violation of Environmental Laws resulting or arising from Lessee’s occupancy of the Premises on or after the Commencement Date; or

		
	(c)
	any environmental remediation or corrective action that is required by Environmental Law, to the extent resulting or arising from a Release on, under, about or migrating to or from the Premises occurring on or after the Commencement Date: including (i) the cost and expense of any investigation, assessment, evaluation, monitoring, containment, cleanup, repair, restoration, remediation, risk-based closure activities, 

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or other corrective action required or necessary under Environmental Laws and (ii) the cost and expense of the preparation and implementation of any closure, remedial, corrective action, or other plans required or necessary under Environmental Laws.
ARTICLE 11
INSURANCE
11.1    Lessee agrees to maintain during the Term hereof (i) all risk property insurance with respect to the Tank Farm Assets and all improvements, equipment and other personal property (for the full replacement value thereof) owned by Lessee or used by Lessee on the Premises; (ii) commercial general liability insurance covering injury or death to persons or damage to property in an amount of not less than One Million and 00/100 Dollars ($1,000,000.00) per occurrence including, but not limited to, the following coverages: Contractual Liability, Products and Completed operations, Coverage for explosion, collapse and underground hazards and sudden and accidental pollution liability; (iii) Automobile bodily injury and property damage liability insurance, including but not limited to insurance for pollution-related events, which extends to owned, if any, non-owned, and hired automobiles used by Lessee in connection with its operations, the limits of which liability of such insurance shall not be less than One Million and 00/100 Dollars ($1,000,000.00) combined single limit for bodily injury and property damage combined per accident; (iv) Workers’ Compensation Insurance for statutory limits and employer’s liability coverage in an amount not less than One Million and 00/100 Dollars ($1,000,000.00) or as required by applicable law; and (v) excess liability/umbrella coverage in excess of underlying coverages in a limit not less than Fifteen Million and 00/100 Dollars ($15,000,000.00) any one occurrence and in the aggregate.
11.2    All such policies, except for Workers’ Compensation, shall name Lessor and its ultimate parent, Valero and its respective subsidiaries and Affiliates as additional insureds to the fullest extent permitted by applicable Law, such that the breadth of coverage afforded such additional insureds under the policies is at least as broad as that afforded the primary insured under such policies, and in all events such that the policies will respond to losses arising out of any act, omission, failure to act or negligence on the part of any such additional insured relating to the performance of Lessee’s obligations under this Lease, including losses associated with completed operations. All such policies shall also include a provision making them primary over (and not secondary to or contributory with) any insurance carried by Lessor or any other additional insured added pursuant to this Lease. With respect to all policies, Lessee shall waive, and does waive, all rights of subrogation as against the Lessor Indemnified Parties and the Lessee Indemnified Parties. There shall be no gap in the dollar value of the additional insureds’ coverage under the above policies from the policies’ deductible amounts up to the full limits of the policies. Contemporaneously with its execution of this Lease and on each yearly anniversary thereafter, Lessee shall furnish certificates of insurance evidencing that such insurance is in effect, and that the required waivers of subrogation and additional insured endorsements have been provided, and containing the unequivocal agreement on the part of the insurer to notify Lessor of any cancellation or material change in coverage at least 30 days before the effective date of such cancellation or change. The insurance coverage required hereunder shall operate independent and apart from any of Lessee’s indemnity obligations hereunder and shall in no way serve to waive or limit any such obligations.

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ARTICLE 12
INDEMNITY
12.1    Indemnification by Lessee.  Except in respect of Losses related to environmental matters, which are exclusively addressed in Article 10 hereof, and except to the extent otherwise provided in the Omnibus Agreement, Lessee agrees to indemnify, defend and hold harmless the Lessor Indemnified Parties from and against any and all Losses which may be imposed on, incurred by or asserted against the Lessor Indemnified Parties, in any way and to the extent relating to or arising out of (i) actions taken or omissions any of the Lessee Indemnified Parties or any Lessee Responsible Parties in connection with the ownership, use or operation of the Tank Farm Assets, the Improvements and/or the Premises or any accident or occurrence in connection therewith; (ii) any failure to perform any covenant or agreement made or undertaken by Lessee in this Lease; (iii) the use and/or occupation of the Premises, by Lessee and any of the Lessee Responsible Parties; and/or (iv) any injury or damage to any person or property, occurring in or about the Premises; provided, however, that Lessee shall not be required to indemnify the Lessor Indemnified Parties for any Losses under clauses (i), (ii), (iii) or (iv), to the extent resulting from or arising out of the sole or gross negligence or willful misconduct of any of the Lessor Indemnified Parties. IT IS INTENDED THAT, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THE FOREGOING INDEMNIFICATION SHALL OPERATE TO PROTECT THE LESSOR INDEMNIFIED PARTIES AGAINST EVEN THOSE LOSSES THAT ARE CAUSED OR ALLEGEDLY CAUSED, IN WHOLE OR IN PART, BY THE SOLE, PARTIAL, JOINT, JOINT AND SEVERAL, COMPARATIVE OR CONTRIBUTORY NEGLIGENCE (BUT NOT THE GROSS NEGLIGENCE) OF ANY OF THE LESSOR INDEMNIFIED PARTIES, OR FOR WHICH ANY OF THE LESSOR INDEMNIFIED PARTIES MAY BE LIABLE UNDER ANY SO-CALLED “STRICT LIABILITY” LAW OR ANY OTHER APPLICABLE LAW OR LEGAL THEORY IMPOSING LIABILITY ON A PERSON WITHOUT REGARD TO SUCH PERSON’S ACTUAL DEGREE OF FAULT OR NEGLIGENCE.
12.2    Indemnification by Lessor.  Except to the extent otherwise provided in the Omnibus Agreement (which shall govern and control in the event of any conflict with this Section 12.2), and except with respect to Losses related to environmental matters, which are exclusively addressed in Article 10 hereof, Lessor agrees to indemnify, defend and hold harmless the Lessee Indemnified Parties from and against any Losses which may be imposed on, incurred by or asserted against the Lessee Indemnified Parties as a result of, caused by, arising out of, or in any way relating to any injury or damage to any person or property, occurring in or about the Premises as a direct result of the sole negligent act or omission or gross negligence or willful misconduct of any of the Lessor Indemnified Parties.
12.3    Survival.  Notwithstanding anything contained in this Lease to the contrary, the provisions of this Article 12 shall survive the expiration or earlier termination of this Lease.

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ARTICLE 13
DEFAULTS; REMEDIES; TERMINATION
13.1    Lessee Event of Default.  Each of the following events shall be an event of default (“Event of Default”) by Lessee under this Lease:
		
	(a)
	Lessee shall fail to make any payment of Rent or any other sums which are payable under this Lease when due, and such failure shall continue for a period of 10 days after receipt of written notice from Lessor of such failure, provided however, Lessor shall only be required to provide notice under this paragraph once during any calendar year;

		
	(b)
	Lessee shall fail to comply with any term, provision or covenant of this Lease (other than the preceding subparagraph), and shall not cure, or have commenced to cure and pursue completion of the cure with due diligence, such failure within 30 days after written notice thereof to Lessee; provided however, that if any such default is of a nature that cannot reasonably be cured within 30 days and cure of such default has been commenced in good faith within such 30 day period, the commencement of the cure of such default within such 30 day period and the diligent prosecution to completion of such cure within a reasonable amount of time, but in any event within 120 days after the date Lessor sends the above-described notice, shall be deemed to be a cure of such default for purposes of this paragraph; or

		
	(c)
	Lessee or any guarantor or surety of Lessee’s obligations hereunder shall (i) make a general assignment for the benefit of creditors; (ii) commence any case, proceeding or other action seeking to have an order for relief entered on its behalf as a debtor or to adjudicate it as bankrupt or insolvent, or seeking reorganization, arrangement, adjustment, liquidation, dissolution or composition of it or its debts or seeking appointment of a receiver, trustee, custodian or other similar official for it or for all or of any substantial part of its property (collectively a “proceeding for relief”); (iii) become the subject of any proceeding for relief which is not dismissed within 60 days of its filing or entry; (iv) abandon the Premises for a period exceeding 180 days; or (v) be dissolved or otherwise fail to maintain its legal existence.

13.2    Lessor’s Remedies.
		
	(a)
	Upon the occurrence of any default or Event of Default under this Lease which has not been cured as permitted pursuant to Section 13.1, Lessor shall have the right (without an election of remedies and without in any way limiting Lessor in the exercise of any right or remedy which Lessor may have by reason of such default or Event of Default) to do any one or more of the following: exercise all remedies available at law or equity including, without limitation, the bringing of an action for damages or an injunction on account of such default or Event of Default or for specific performance of this Lease, or:

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	(1)
	With or without terminating this Lease, may take any reasonable action to remedy any failure of Lessee to comply with or perform this Lease, and may enter the Premises as necessary notwithstanding the foregoing notice requirement described in Section 13.1, in the event of an emergency, to provide Lessee with such notice as is reasonable thereof. Lessee shall reimburse Lessor on written demand for all costs so incurred, plus a reasonable charge to compensate Lessor for the additional administrative burden;

		
	(2)
	Terminate this Lease, in which event Lessee shall immediately surrender the Premises to Lessor, and if Lessee fails to do so, Lessor may, without prejudice to any other remedy which it may have for possession or arrearages in rent, enter upon (as applicable) and take possession of the Premises and expel or remove Lessee and any other person who may be occupying the Premises or any part thereof, by force if necessary (and Lessee hereby waives any claim for loss or damage by reason of such reentry, repossession, or removal), in which event Lessee shall pay to Lessor upon demand the sum of (A) all Rent and other amounts accrued hereunder to the date of termination; (B) all amounts due under Section 13.2(b) below; and (C) damages in an amount equal to the total Rent that Lessee would have been required to pay for the remainder of the Term discounted to present value at a discount rate reasonably designated by Lessor diminished by any net sums thereafter received by Lessor through reletting the Premises during said period; or

		
	(3)
	Terminate Lessee’s right of possession (but not this Lease), enter and repossess the Premises without further demand or notice of any kind to Lessee and without terminating this Lease, and remove all persons or property therefrom using such lawful force as may be necessary (and Lessee hereby waives any claim for loss or damage by reason of such reentry, repossession, or removal), in which event Lessee shall pay to Lessor upon demand (A) all Rent and other amounts accrued hereunder to the date of termination of possession; (B) all amounts due from time to time under Section 13.2(b) below; and (C) all Rent and other sums required hereunder to be paid by Lessee during the remainder of the Term as they become due, diminished by any net sums thereafter received by Lessor through reletting the Premises during said period. Reentry by Lessor in the Premises will not affect the obligations of Lessee hereunder for the unexpired Term. Lessor may bring action against Lessee to collect amounts due by Lessee on one or more occasions, without the necessity of Lessor's waiting until expiration of the Term. Notwithstanding any such reletting without termination, Lessor may at any time thereafter elect in writing to terminate this Lease for such previous breach.

		
	(b)
	Upon any Event of Default (after the expiration of any applicable notice and cure period), Lessee shall also pay to Lessor all necessary and reasonable costs and 

20

expenses incurred by Lessor, including court costs and reasonable attorneys' fees, in (i) retaking or otherwise obtaining possession of the Premises; (ii) removing and storing Lessee's or any other occupant's property; (iii) repairing, restoring, altering, remodeling or otherwise returning the Premises into its original condition (normal wear and tear and casualty excepted); (iv) reletting all or any part of the Premises; (v) paying or performing the underlying obligation which Lessee failed to pay or perform; and (vi) enforcing any of Lessor 's rights or remedies arising as a consequence of the Event of Default.
		
	(c)
	Any self-help option granted to Lessor hereunder shall not release Lessee from its obligation to perform the terms, provisions, covenants and conditions set forth in this Lease and required to be performed by Lessee hereunder.

		
	(d)
	The rights, remedies and recourses hereunder upon an Event of Default shall be cumulative and no right, remedy or recourse, whether or not exercised, shall be deemed to be in exclusion of any other right, remedy, or recourse.

		
	(e)
	As described in Section 4.2 hereof, if Lessee fails to pay any amount due hereunder, as and when due, the amount due and unpaid shall bear interest at the Interest Rate from the date due until paid.

13.3    No Waiver.  Exercise by Lessor of any one or more remedies hereunder granted or otherwise available shall not be deemed to be an acceptance of surrender of the Premises and/or a termination of this Lease by Lessor, whether by agreement or by operation of law, it being understood that such surrender and/or termination can be effected only by the written agreement of Lessor and Lessee. Any law, usage, or custom to the contrary notwithstanding, Lessor shall have the right at all times to enforce the provisions of this Lease in strict accordance with the terms hereof; and the failure of Lessor at any time to enforce its rights under this Lease strictly in accordance with same shall not be construed as having created a custom in any way or manner contrary to the specific terms, provisions, and covenants of this Lease or as having modified the same. Lessee and Lessor further agree that forbearance or waiver by Lessor to enforce its rights pursuant to this Lease or at law or in equity, shall not be a waiver of Lessor's right to enforce one or more of its rights in connection with any subsequent default. A receipt by Lessor of rent or other payment with knowledge of the breach of any covenant hereof shall not be deemed a waiver of such breach, and no waiver by Lessor of any provision of this Lease shall be deemed to have been made unless expressed in writing and signed by Lessor. The terms “enter,” “re-enter,” “entry” or “re-entry,” as used in this Lease, are not restricted to their technical legal meanings. Any reletting of the Premises shall be on such terms and conditions as Lessor in its sole discretion may determine (including without limitation a term different than the remaining Lease Term, rental concessions, alterations and repair of the Premises, lease of less than the entire Premises to any tenant and leasing any or all other portions of the Project before reletting the Premises). Lessor shall not be liable, nor shall Lessee's obligations hereunder be diminished because of, Lessor's failure to relet the Premises or collect rent due in respect of such reletting. Notwithstanding the foregoing, Lessor agrees that it shall use commercially reasonable efforts to mitigate its damages as a result of Lessee’s default under this Lease.

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13.4    Lessor Event of Default.  If Lessor shall violate, neglect or fail to perform or observe any of the covenants, terms, conditions, agreements, or obligations contained in this Lease on its part to be performed or observed, which default continues for a period of more than thirty (30) days after its receipt of written notice from Lessee specifying such default (provided that if such default is of a nature that cannot reasonably be cured within thirty (30) days, then as long as Lessor commences to cure said default within such thirty (30) day period and thereafter diligently pursues such efforts to completion, but in no event longer than one hundred eighty (180) days after the date Lessee sends the default notice, then Lessor shall be deemed to have cured such default for purposes of this paragraph), Lessee may, at its election (in addition to any other rights or remedies provided Lessee at law, in equity or hereunder), upon further written notice to Lessor: (i) effect such a cure and incur any reasonable expense or cost necessary to perform such obligation of Lessor and bill Lessor for the reasonable cost thereof and Lessor shall pay all such reasonable costs and expenses incurred by Lessee within thirty (30) days after Lessor’s receipt of such notice, which notice shall include an itemization and documentation of the expenses and costs incurred by Lessee; (ii) notwithstanding the foregoing notice requirement, in the event of an emergency, to provide Lessor with such notice as is reasonable thereof and to effect a cure and incur such expenses as necessary to effect such cure in order to protect and prevent the loss of life and/or risk of loss, life or property and Lessor shall pay all such reasonable costs and expenses within thirty (30) days after Lessor’s receipt of notice thereof and written itemization and documentation for such expenses; (iii) initiate an action for damages, specific performance or an injunction; (iv) terminate this Lease by the giving of written notice to Lessor; or (v) pursue any remedies available to Lessee at law or in equity.
ARTICLE 14
EMINENT DOMAIN; CASUALTY
14.1    Eminent Domain.  If the whole or any substantial part, in Lessor's reasonable discretion of the Premises should be taken for any public or quasi-public use under governmental law, ordinance or regulation, or by right of eminent domain, or by private purchase in lieu thereof (a “Taking”), this Lease shall terminate and the Rent shall be abated during the unexpired portion of this Lease, effective when the physical taking of the Premises shall occur. If there is a Taking of less than a substantial part of the Premises, this Lease shall not terminate, but the Rent payable hereunder during the unexpired portion of this Lease shall be reduced to such extent as may be fair and reasonable under all of the circumstances, including the proportion to the reduction in utility of the Premises caused by such Taking. In the event of any such Taking, Lessor and Lessee shall each be entitled to receive and retain such separate awards and/or portion of lump sum awards as may be allocated to their respective interests in any condemnation proceedings. Lessor shall be entitled to any award and all damages payable as a result of any condemnation or taking of the fee of the Premises. Lessee shall have the right to claim and recover from the condemning authority, but not from Lessor, such compensation as may be separately awarded or recoverable by Lessee in Lessee’s own right on account of any and all damage to the Tank Farm Assets and/or Lessee’s business by reason of the condemnation, including loss of value of any unexpired portion of the Term, and for or on account of any cost or loss to which Lessee might be put in removing Lessee’s personal property, fixtures, leasehold improvements and equipment, including, without limitation, the Tank Farm Assets, from the Premises.

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14.2    Casualty.
		
	(a)
	Lessee to Repair Improvements.  Subject to Section 14.2(b) below, if during the Term all or any portion of the Tank Farm Assets shall be damaged or destroyed by fire or other casualty, Lessee shall repair or restore the Tank Farm Assets. The work of repair or restoration, which shall be completed with due diligence, shall be commenced within a reasonable time after the damage or loss occurs. Rent shall not abate while the Tank Farm Assets are being repaired or restored.

		
	(b)
	Damage at the End of Lease.  If, during the last three (3) years of the Term, any portion of the Tank Farm Assets shall be damaged by fire or other casualty in excess of 50% of the replacement cost thereof, then Lessee shall have the option, to be exercised within sixty (60) days after such event, to either (i) repair or restore the Tank Farm Assets as hereinabove provided or (ii) terminate this Lease by notice to Lessor, which termination shall be deemed to be effective as of the date of the casualty. If Lessee terminates this Lease pursuant to this Section 14.2(b), Lessee shall surrender possession of the Premises to Lessor and will, at the request of Lessor from the insurance proceeds otherwise payable to Lessor, cause the Tank Farm Assets to be razed and the Premises to be leveled, cleaned, and otherwise put in good order. No termination of this Lease pursuant to this Section 14.2(b) will be effective until Lessee pays and performs all of Lessee's duties and obligations in connection with the termination.

ARTICLE 15
SURRENDER OF THE PREMISES
15.1    Surrender of Premises.  Lessee shall at the expiration of the Term, or at any earlier termination of this Lease, surrender the Premises to Lessor in as good condition as it received the Premises, ordinary wear and tear and damaged caused by any Lessor Indemnified Parties excepted, and subject to the provisions of Article 14.
15.2    Removal of Improvements.  Except as otherwise expressly agreed to by Lessor and Lessee, Lessee shall have the right to remove all Tank Farm Assets and other improvements, fixtures, equipment, materials, supplies and personal property installed by Lessee from the Premises upon the termination or expiration of this Lease, but in no event later than the date that is 120 days following the expiration or termination of this Lease (the “Removal Date”) and Lessor shall provide Lessee with access to the Premises at reasonable times until expiration of the Removal Date for the purpose of removing such items. Lessee shall provide Lessor with written notice of its election to remove the Tank Farm Assets and other improvements, fixtures, equipment, materials, supplies and personal property from the Premises at least 60 days prior to the expiration of the Lease. If Lessee elects to remove the Tank Farm Assets and Improvements from the Premises after such removal Lessee shall restore any damage to the Premises and clean the Premises so as to eliminate therefrom any accumulation (other than any de minimis and non-hazardous accumulation) of foreign substances, materials, or debris, in addition to any Environmental Cleanup that may be required under Article 10. Lessee shall pay Lessor pro rata Rent (based on the amount of Rent applicable during the last month prior to the termination or expiration) through the date of Lessee’s complete 

23

removal of all such items. During the period of such removal and clean-up, all terms and conditions of this Lease, including, the indemnity and insurance provisions shall continue in full force and effect. If Lessee elects not to remove all of the Tank Farm Assets and Improvements from the Premises on or before the Removal Date, and provided that such facilities are in good working condition at the expiration of the Term (ordinary wear and tear excepted) then, such Tank Farm Assets and Improvements shall be deemed permanently abandoned to Lessor’s sole ownership, and Lessor may remove and dispose of such facilities in any manner which Lessor may deem appropriate, without any liability whatsoever to Lessee. If Lessee elects not to remove all of the Tank Farm Assets and Improvements from the Premises on or before the Removal Date and such facilities are not in good working condition at the expiration of the term (ordinary wear and tear excepted), or Lessee fails to so remove any or all of the Tank Farm Assets and Improvements from the Premises before the Removal Date, then, in addition to all rights and remedies available at law or in equity, without any prior notice, Lessor may (but shall be under no obligation), at Lessor’s option, deem such Tank Farm Assets and Improvements to be permanently abandoned to Lessor’s sole ownership, and Lessor may remove and dispose of such facilities in any manner which Lessor may deem appropriate, without any liability whatsoever to Lessee, and Lessee shall reimburse Lessor for all costs of such removal and disposal upon demand from Lessor. If requested by Lessor, Lessee shall execute any and all documents necessary to evidence that title to the Tank Farm Assets and Improvements that Lessee does not remove by the Removal Date is in Lessor and to extinguish and remove any cloud or potential cloud on the title to the Premises and/or such facilities created by Lessee.
15.3    Holding Over.  If Lessee retains possession of the Premises after the termination of the Term, unless otherwise agreed in writing or for removal of its facilities during the Removal Period, such possession shall be subject to immediate termination by Lessor at any time, and all of the other terms and provisions of this Lease (excluding any expansion or renewal option or other similar right or option) shall be applicable during such holdover period, except that Lessee shall pay Lessor from time to time, upon demand, as Rent for the holdover period, an amount equal to 150% of the Rent in effect on the termination date computed on a monthly basis for each month or part thereof during such holding over. All other payments shall continue under the terms of this Lease. In addition, Lessee shall be liable for all damages incurred by Lessor as a result of such holding over. No holding over by Lessee, whether with or without consent of Lessor, shall operate to extend this Lease except as otherwise expressly provided, and this Section 15.3 shall not be construed as consent for Lessee to retain possession of the Premises.
ARTICLE 16
LIMITATION OF LIABILITY
16.1    Release of Certain Liability.  Without limiting any obligations of Lessor or its Affiliates, under the Omnibus Agreement or the Transaction Agreement, except in the event of sole or gross negligence or willful misconduct on the part of Lessor or its employees or agents, Lessor shall not be liable to Lessee or any of the Lessee Responsible Parties or any other person claiming by, through or under Lessee or entering upon the Premises under or with the express or implied invitation of Lessee for any personal injury, including death, to persons or damage to property due to (a) the condition or design or any defect in the Premises or (b)  any portion of the Premises becoming out 

24

of repair or arising from the leaking of gas, water, sewer, steam, pipes, electricity or otherwise. Lessee, with respect to itself and the Lessee Responsible Parties or any other person entering upon the Premises under or with the express or implied invitation of Lessee hereby expressly assumes all risks of personal injury, including death, to persons or damage to property, either proximate or remote, by reason of the present or future condition of the Premises and expressly release Lessor of and from any and all liability for such damage or loss.
16.2    Exculpation.  Any liability of Lessor under the terms of this Lease or in connection with the Premises shall be limited to the interest of Lessor in the Premises and Lessor shall not be personally liable for any deficiency. None of Lessor’s officers, managers, partners, members, employees, agents or representatives will ever have any personal liability to Lessee under or in connection with this Lease, and Lessee hereby waives and releases all claims, causes of action, or other rights of recovery it may ever have against such parties under or in connection with this Lease. NOTWITHSTANDING ANY PROVISION OF THIS LEASE TO THE CONTRARY, IN NO EVENT SHALL EITHER PARTY HERETO BE LIABLE TO THE OTHER PARTY FOR ANY SPECIAL, PUNITIVE, EXEMPLARY, CONSEQUENTIAL, INCIDENTAL OR INDIRECT LOSSES OR DAMAGES (IN TORT, CONTRACT OR OTHERWISE) UNDER OR IN RESPECT OF THIS LEASE, EXCEPT TO THE EXTENT ANY SUCH DAMAGES ARE OWED TO A THIRD PARTY AND THE OBLIGATED PARTY IS ENTITLED TO INDEMNIFICATION THEREFOR BY THE OTHER PARTY UNDER THE EXPRESS TERMS OF THIS LEASE.
ARTICLE 17
ASSIGNMENT AND SUBLETTING
17.1    Assignment by Lessor.  Lessor may assign or transfer its rights, interests, and obligations under this Lease and in any part of the Premises to any third party (including any Person who acquires the Refinery or any interest therein), provided that an such third party expressly assumes all obligations of Lessor under the Lease for the period on and after the effective date of the assignment and Lessor shall remain liable for the performance and obligations of lessor/landlord hereunder for the period prior to the effective date of such assignment. Upon any such transfer Lessee will attorn to the transferee lessor and look solely to the transferee lessor to perform any obligations of Lessor accruing on or after the effective date of the transfer.
17.2    Assignment and Sublease by Lessee.  Lessee shall not assign, pledge or encumber this Lease, or sublet the whole or any part of the Premises without the prior written consent of Lessor. This prohibition against assigning or subletting shall be construed to include a prohibition against any assignment or subletting by operation of law. For purposes of this paragraph, a transfer of the ownership interests controlling Lessee shall be deemed an assignment of this Lease. In the event any assignment or subletting of this Lease is made with or without Lessor's consent, Lessee shall nevertheless remain liable for the performance of all of the terms, conditions and covenants of this Lease. Any assignment or subletting without the prior written consent of Lessor shall be void and constitute a breach of the Lease and shall, at the option of the Lessor, terminate the Lease. No consent to any assignment, voluntarily or by operation of law, of this Lease or any subletting of said Premises shall be deemed to be a consent to any subsequent assignment or subletting.

25

17.3    Permitted Transfers.  Notwithstanding the prohibition on assignment in Section 17.2 hereof, Lessee may assign all of its interest in this Lease or sublet all of the Premises only by written instrument evidencing such assignment or sublease to any Affiliate of Lessee or any Person who purchases or acquires all or substantially all of the Tank Farm Assets of Lessee, or any successor to Lessee by merger, consolidation or otherwise (each a “Permitted Transferee”), provided that (a) Lessee shall promptly notify Lessor of any such Permitted Transfer; (b) Lessee shall remain liable for the performance of all of the obligations of Lessee hereunder; and (c) if Lessee no longer exists because of a merger, consolidation, or acquisition, the surviving or acquiring entity shall expressly assume in writing the obligations of Lessee hereunder. Additionally, the Permitted Transferee shall assume all of Lessee's obligations and comply with all of the terms and conditions of this Lease. Promptly after the effective date of any permitted transfer hereunder, Lessee agrees to furnish Lessor with copies of the instrument effecting any of the foregoing transfers and documentation establishing Lessee's satisfaction of the requirements set forth above applicable to any such assignment or sublet. The occurrence of a permitted transfer hereunder shall not waive Lessor's rights as to any subsequent assignment, subletting or other transfer of this Lease or any interest therein. Any subsequent assignment, subletting or other transfer of this Lease or any interest therein by a Permitted Transferee shall be subject to Lessor's prior written consent (as hereinabove provided).
ARTICLE 18
QUIET ENJOYMENT
18.1    Lessor covenants and warrants that Lessee, upon paying the Rent reserved hereunder and observing and performing all of the covenants, conditions and provisions on Lessee’s part to be observed and performed hereunder, may peaceably and quietly have, hold, occupy, use and enjoy, and shall have the full, exclusive and unrestricted use and enjoyment of, all the Premises during the Term for the Permitted Use and subject to the terms and conditions of this Lease, and Lessor agrees to warrant and forever defend title to the Premises (other than the Permitted Exceptions) against the claims of any and all persons whomsoever lawfully claiming or to claim the same or any part thereof. Lessor’s undertaking in the immediately preceding sentence is made solely for the benefit of Lessee and not for the benefit of any title insurer, and any such title insurer shall not be subrogated to the rights of Lessee hereunder.
ARTICLE 19
GENERAL PROVISIONS
19.1    Estoppel Certificates.  Lessee and Lessor shall, at any time and from time to time upon not less than 20 days prior written request from the other party, execute, acknowledge and deliver to the other a statement in writing (a) certifying that this Lease is unmodified and in full force and effect (or, if modified, stating the nature of such modification and certifying that this Lease, as so modified, is in full force and effect) and the date to which Rent and other charges are paid and (b) acknowledging that there are not, to the executing party’s knowledge, any uncured defaults on the part of the other party hereunder (or specifying such defaults, if any are claimed). Any such statement may be conclusively relied upon by any prospective purchaser of the Premises or the 

26

leasehold. Nothing in this Section 19.1 shall be construed to waive the conditions elsewhere contained in this Lease applicable to assignment or subletting of the Premises by Lessee.
19.2    Leasehold Mortgage.  Lessee shall at all times and from time to time have the right to encumber by mortgage, deed of trust, or security agreement (the “Mortgage”) Lessee’s leasehold estate in the Premises, together with Lessee’s rights and interests in all buildings, fixtures, equipment, and improvements situated thereon, and all rents, issues, profits, revenues, and other income to be derived by Lessee therefrom, to secure such loans from time to time made by any Person to Lessee; provided, however, that such Mortgage shall in no event encumber Lessor’s fee title or leasehold interest (as applicable) in the Premises or Lessor’s interest under this Lease.
19.3    Subordination, Non-Disturbance and Attornment.  Upon request of Lessor or the holder of any Mortgage covering Lessor’s interest in the Premises (a “Mortgagor”), Lessee will enter into a subordination, non-disturbance and attornment agreement in a customary form reasonably acceptable to the Mortgagor, Lessor and Lessee, evidencing that Lessee’s rights under this Lease are subordinate to the lien of such Mortgage and to all advances made or thereafter to be made upon the security thereof.
19.4    Conflict Between this Lease and the Omnibus Agreement.  Notwithstanding any provision to the contrary contained herein, for so long as the Omnibus Agreement remains in full force and effect, to the extent of any conflict between the terms of this Lease and the terms of the Omnibus Agreement, the terms of the Omnibus Agreement shall govern and control. Further, notwithstanding any waiver or agreement of either of the parties hereto contained in this Lease, no such waiver or agreement shall affect or limit the rights or remedies of such party under the Omnibus Agreement, or the obligations and liabilities of the other parties to the Omnibus Agreement.
19.5    Notices.  All notices, requests, demands and other communications required or permitted to be given under this Lease shall be deemed to have been duly given if in writing and delivered personally or sent via first class, postage prepaid, registered or certified mail (return receipt requested), or by overnight delivery service or facsimile transmission addressed as follows:
	
	
	If to Lessor:

	 

	Valero Refining-Texas, L.P.

	One Valero Way

	San Antonio, Texas 78249

	Attention:  General Counsel

	Facsimile:  (210) 345-3214

27

	
	
	If to Lessee:

	 

	Valero Partners Corpus West, LLC

	One Valero Way

	San Antonio, Texas 78249

	Attention:  General Counsel

	Facsimile:  (210) 345-3214

Any party may change the address to which the communications are to be directed to it by giving notice to the other in the manner provided in this Section 19.5. Notice by mail shall be deemed to have been given and received on the third calendar day after posting. Notice by overnight delivery service, facsimile transmission or personal delivery shall be deemed given on the date of actual delivery.
19.6    Mutual Cooperation; Further Assurances.  Upon request by either party from time to time during the Term, each party hereto agrees to execute and deliver all such other and additional instruments, notices and other documents and do all such other acts and things as may be necessary to carry out the purposes of this Lease and to more fully assure the parties’ rights and interests provided for hereunder. Lessor and Lessee each agree to cooperate with the other on all matters relating to required permits and regulatory compliance by either Lessee or Lessor in respect of the Premises so as to ensure continued full operation of the Premises by Lessee pursuant to the terms of this Lease.
19.7    Recording.  Upon the request of either Party, Lessor and Lessee shall execute, acknowledge, deliver and record a “short form” memorandum of this Lease in a form mutually acceptable to the Parties and sufficient to provide public notice of the existence of this Lease. Promptly upon request by Lessor at any time following the expiration or earlier termination of this Lease, however such termination may be brought about, Lessee shall execute and deliver to Lessor an instrument, in recordable form, evidencing the termination of this Lease and the release by Lessee of all of Lessee’s right, title and interest in and to the Premises existing under and by virtue of this Lease.
19.8    Force Majeure.  In the event of Lessor or Lessee being rendered unable, wholly or in part, by Force Majeure to carry out its obligations under this Lease, other than to make payments due hereunder, it is agreed that on such party’s giving notice and full particulars of such Force Majeure to the other party as soon as practicable after the occurrence of the cause relied on, then the obligations of the parties, so far as they are affected by such Force Majeure, shall be suspended during the continuance of any inability so caused but for no longer period, and such cause shall, as far as possible, be remedied with all reasonable dispatch. The term “Force Majeure” as employed herein means any circumstances beyond the reasonable control of the contracting parties experiencing such inability to perform, whether of the kind enumerated herein or not, including but not limited to, acts of God, strikes, lockouts, or other industrial disturbances, curtailments or shutdowns, acts of the public enemy, sabotage, wars (whether or not an official declaration is made thereof), blockades, insurrection, riots, epidemics, landslides, lightning, earthquakes, fires, hurricanes, tornadoes, storms, floods, washouts, freezeoffs, civil disturbances, explosions, breakage, accidents to machinery, equipment or lines of pipe, repairs, maintenance, improvements, replacements or 

28

alterations to plants or lines of pipe, inability of either party to obtain necessary machinery, materials or permits, or the act of any Governmental Authority. It is understood and agreed that the settlement of strikes or lockouts shall be entirely within the discretion of the party having the difficulty, and that the above requirements that any force majeure shall be remedied with all reasonable dispatch shall not require the settlement of strikes or lockouts by acceding to the demands of the opposing party when such course is inadvisable in the discretion of the party having the difficulty.
19.9    Entire Agreement; Amendment.  Subject to Section 19.4, this Lease, including the exhibits attached hereto, constitutes the entire agreement and understanding between the parties hereto with respect to the lease of the Premises, and supersedes all prior and contemporaneous agreements and undertakings of the parties, in connection herewith. This Lease may be modified in writing only, signed by the parties to interest at the time of modification.
19.10    Binding Effect.  Except as herein otherwise expressly provided, this Lease shall be binding upon and inure to the benefit of the parties hereto and their respective successors, sublessees and assigns. Nothing in this Section 19.10 shall be construed to waive the conditions elsewhere contained in this Lease applicable to assignment or subletting of the Premises by Lessee.
19.11    Waivers.  No waiver or waivers of any breach or default or any breaches or defaults by either party of any term, condition or liability of or performance by the other party of any duty or obligation hereunder shall be deemed or construed to be a waiver or waivers of subsequent breaches or defaults of any kind, character or description under any circumstance. The acceptance of Rent hereunder by Lessor shall not be a waiver of any preceding breach by Lessee of any provision hereof, other than the failure of Lessee to pay the particular Rent so accepted, regardless of Lessor’s knowledge of such preceding breach at the time of acceptance of such Rent.
19.12    No Partnership.  The relationship between Lessor and Lessee at all times shall remain solely that of landlord and tenant and shall not be deemed a partnership or joint venture.
19.13    Choice of law.  The provisions of this Lease shall be governed by and construed in accordance with the laws of the State of Texas, excluding any conflicts-of-law rule or principle that might require the application of laws of another jurisdiction.
19.14    Waiver of Jury Trial.  LESSEE AND LESSOR WAIVE ANY RIGHT TO TRIAL BY JURY OR TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT, OR OTHERWISE, BETWEEN LESSOR AND LESSEE ARISING OUT OF THIS LEASE OR ANY OTHER INSTRUMENT, DOCUMENT, OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH OR THE TRANSACTIONS RELATED HERETO.
19.15    Severability.  The invalidity or unenforceability of any provision of this Lease, as determined by a court of competent jurisdiction, shall in no way affect the validity or enforceability of any other provision hereof.
19.16    Survival.  All obligations of Lessor and Lessee that shall have accrued under this Lease prior to the expiration or earlier termination hereof shall survive such expiration or termination to the 

29

extent the same remain unsatisfied as of the expiration or earlier termination of this Lease. Lessor and Lessee further expressly agree that all provisions of this Lease which contemplate performance after the expiration or earlier termination hereof shall survive such expiration or earlier termination of this Lease.
19.17    Time of Essence.  Time is of the essence in the performance of all obligations falling due hereunder.
19.18    Captions.  The headings to Articles, Sections and other subdivisions of this Lease are inserted for convenience of reference only and will not affect the meaning or interpretation of this Lease.
19.19    Schedules and Exhibits.  All schedules and exhibits hereto which are referred to herein are hereby made a part hereof and incorporated herein by such reference.
19.20    Counterparts.  This Lease may be executed in multiple originals and when executed, all such counterparts shall constitute one document.
[Remainder of Page Intentionally Left Blank]

30

The parties hereto have executed this Lease to be effective as of the Effective Date.
LESSOR:

	
		
	VALERO REFINING-TEXAS, L.P.

	 
	 

	By:
	Valero Tejas Company LLC

	Its:
	General Partner

	 
	 

	 
	 

	By:
	 /s/ R. Lane Riggs

	Name:
	R. Lane Riggs

	Title:
	Executive Vice President

LESSEE:

	
		
	VALERO PARTNERS CORPUS EAST, LLC

	 
	 

	 
	 

	By:
	 /s/ Richard F. Lashway

	Name:
	Richard F. Lashway

	Title:
	President and Chief Operating Officer

Signature Page to Lease and Access Agreement (Corpus Christi West Terminal)

EXHIBIT A
TANKS
	
			
	Corpus Tank Ref #
	Type
	Shell Capacity (Barrels)

	03TK156
	IFR
	11,090

	03TK161
	IFR
	11,253

	50TK57
	EFR
	106,358

	50TK58
	IFR
	58,314

	50TK59
	EFR
	106,036

	50TK60
	IFR
	58,282

	50TK61
	EFR
	106,864

	50TK62
	IFR
	66,648

	50TK63
	IFR
	66,575

	50TK64
	IFR
	77,718

	50TK65
	IFR
	77,677

	70TK100
	IFR
	10,160

	70TK101
	IFR
	54,960

	70TK102
	IFR
	55,616

	70TK103
	IFR
	20,066

	70TK104
	IFR
	55,054

	70TK105
	Cone
	55,520

	70TK108
	IFR
	55,225

	70TK109
	IFR
	20,022

	70TK110
	IFR
	19,970

	70TK114
	IFR
	76,575

	70TK115
	IFR
	21,984

	70TK116
	IFR
	65,260

	70TK139
	IFR
	79,549

	70TK149
	Cone
	61,346

	70TK150
	Cone
	61,358

	70TK51
	IFR
	21,844

	70ATK66
	IFR
	52,996

	70ATK67
	IFR
	53,202

	70ATK68
	IFR
	53,138

	70TK93
	IFR
	10,240

	70TK94
	IFR
	10,207

Exhibit A

	
			
	Corpus Tank Ref #
	Type
	Shell Capacity (Barrels)

	70TK95
	Cone
	10,223

	70TK96
	Cone
	10,356

	70TK97
	Cone
	10,267

	70TK98
	Cone
	10,325

	70TK99
	IFR
	10,141

	72TK111
	IFR
	150,486

	72TK112
	IFR
	150,006

	72TK14
	Cone
	258,136

	72TK15
	EFR
	256,792

	72TK16
	Cone
	61,181

	72TK17
	Cone
	61,282

	72TK18
	Cone
	61,290

	72TK19
	Cone
	30,456

	72TK20
	Cone
	30,451

	72TK75
	IFR
	22,034

	72TK76
	IFR
	60,638

	72TK77
	IFR
	21,053

	72TK78
	IFR
	21,033

	73TK166
	EFR
	344,030

	73TK167
	EFR
	344,030

	73TK168
	IFR
	250,000

	VCU
	NA
	NA

	 
	TOTAL
	3,835,317

Exhibit A

EXHIBIT B
CORPUS CHRISTI WEST REFINERY

DESCRIPTION OF THE REFINERY SITE

PARCEL ONE:

Being a 60.02 acre tract of land, Identified as Lot One (1), Block (1), Tule Lake Industrial Park, situated in the Rincon del Oso Grant to Enrique Villareal, Abstract 1, Nueces County, Texas as described in a “Warranty Deed with Vendor’s Lien”, dated July 10, 1974 from Jess Edwards, Inc. to Saber Refining Company, as recorded in Volume 1499, Page 873, Deed Records, Nueces County, Texas.

The portion of the Premises on Parcel One as depicted on Exhibit C includes the following
Tanks:

	
			
	Corpus Tank #
	Type
	Shell Capacity (Barrels)

	72TK14
	Cone
	258,136

	72TK15
	EFR
	256,792

	72TK16
	Cone
	61,181

	72TK17
	Cone
	61,282

	72TK18
	Cone
	61,290

	72TK19
	Cone
	30,456

	72TK20
	Cone
	30,451

	70TK51
	IFR
	21,844

	50TK57
	EFR
	106,358

	50TK58
	IFR
	58,314

	50TK59
	EFR
	106,036

	50TK60
	IFR
	58,282

	50TK61
	EFR
	106,864

	50TK62
	IFR
	66,648

	50TK63
	IFR
	66,575

	50TK64
	IFR
	77,718

	50TK65
	IFR
	77,677

	70ATK66
	IFR
	52,996

	70ATK67
	IFR
	53,202

	70ATK68
	IFR
	53,138

	72TK75
	IFR
	22,034

	72TK76
	IFR
	60,638

Exhibit B

	
			
	Corpus Tank #
	Type
	Shell Capacity (Barrels)

	72TK77
	IFR
	21,053

	72TK78
	IFR
	21,033

	70TK93
	IFR
	10,240

	70TK94
	IFR
	10,207

	70TK95
	Cone
	10,223

	70TK96
	Cone
	10,356

	70TK97
	Cone
	10,267

	70TK98
	Cone
	10,325

	70TK99
	IFR
	10,141

	70TK100
	IFR
	10,160

	70TK101
	IFR
	54,960

	70TK102
	IFR
	55,616

	70TK103
	IFR
	20,066

	70TK104
	IFR
	55,054

	70TK105
	Cone
	55,520

	70TK108
	IFR
	55,225

	70TK109
	IFR
	20,022

	70TK110
	IFR
	19,970

	72TK111
	IFR
	150,486

	72TK112
	IFR
	150,006

	70TK114
	IFR
	76,575

	70TK115
	IFR
	21,984

	70TK116
	IFR
	65,260

	70TK139
	IFR
	79,549

	70TK149
	Cone
	61,346

	70TK150
	Cone
	61,358

PARCEL TWO:

Being a 149.2026 acre tract of land situated in the Rincon del Oso Grant to Enrique Villareal, Abstract 1, Nueces County, Texas as described in a “Special Warranty Deed”, dated October 31, 1979, from CPC International Inc. to Saber Refining Company, as recorded in Volume 1718, Page 683, Deed Records, Nueces County, Texas.

Exhibit B

The portion of the Premises on Parcel Two as depicted on Exhibit C includes the following
Tanks:

	
			
	Corpus Tank #
	Type
	Shell Capacity (Barrels)

	03TK156
	IFR
	11,090

	03TK161
	IFR
	11,253

	VCU
	NA
	NA

PARCEL SEVEN:

Being a 3.7531 acre tract of land situated in the Charles and William Ohler Survey and being part of the Rincon del Oso Grant to Enrique Villareal, Abstract 1, Nueces County, Texas as described in a “General Warranty Deed”, dated April 28, 1992, from Irene S. Meaney, Individually and as Independent Executrix of The Estate of James J. Meaney, Deceased to Valero Refining Company, as filed under Nueces County Clerk’s File No. 803000, Official Public Records of Real Property, Nueces County, Texas.

The portion of the Premises on Parcel Seven as depicted on Exhibit C includes the following
Tanks:

	
			
	Corpus Tank #
	Type
	Shell Capacity (Barrels)

	73TK168
	IFR
	250,000

PARCELS EIGHT, NINE AND TEN:

Being a 6.703 acre tract of land situated in the E. Villareal Survey, Abstract No. 1, Nueces County, Texas as described in a “Special Warranty Deed”, dated September 18, 2013, from Basic Equipment Co. to Valero Terminaling and Distribution Company, as filed under Nueces County Clerk’s File No. 2013040447, Official Public Records of Real Property, Nueces County, Texas and also being a 7.4729 acre tract of land situated in the Rincon del Oso Grant to Enrique Villareal, Abstract 1, Nueces County, Texas as described in a “Special Warranty Deed”, dated December 29, 1981 from Frank Bailey Grain Co., Inc., Eggleston Grain Co., Inc., Frank A. Bailey III, Ann Bailey Ferguson and William Edward Bailey to Saber Refining Company, as recorded in Volume 1867, Page 802, Deed Records, Nueces County, Texas and also being a 7.2640 acre tract of land situated in the Rincon del Oso Grant to Enrique Villareal, Abstract 1, Nueces County, Texas as described in a “Special Warranty Deed”, dated April 12, 1983 from Frank Bailey Grain Co., Inc., Eggleston Grain Co., Inc., Frank A. Bailey, III, Ann Bailey Ferguson and William Edward Bailey to Saber Refining Company, as recorded in Volume 2162, Page 486, Deed Records, Nueces County, Texas.

The portion of the Premises on Parcels Eight, Nine and Ten as depicted on Exhibit C includes
the following Tanks:

	
			
	Corpus Tank #
	Type
	Shell Capacity (Barrels)

	73TK166
	EFR
	344,030

	73TK167
	EFR
	344,030

Exhibit B

EXHIBIT C
DEPICTION OF THE PREMISES

Exhibit C

EXHIBIT D
LESSOR SERVICES
Lessor will supply the Lessor Services listed on this Exhibit D to Lessee with respect to Lessee’s ownership, operation and maintenance of the Tank Farm Assets, together with such additional services and/or Refinery Facilities as the Parties may agree from time to time.
		
	•
	Utilities  All utilities (including gas, water, steam, industrial gases, electricity and telephone) will be furnished by Lessor for Lessee’s operation of the Tank Farm Assets consistent with past practice. If Lessee’s electrical load or use of other utilities at the Tank Farm Assets increases above historical rates, Lessor will only be required to supply the increased load to the extent Lessor’s existing utility infrastructure is capable of doing so without detriment to the safe and reliable operation of the Refinery. Lessee shall reimburse Lessor for all utilities consumed at the Tank Farm Assets, calculated in a manner mutually reasonably agreed to by the parties, at the same rates that Lessor is required to pay its provider, plus any taxes and other applicable fees (but without any markup by Lessor). If Lessor’s actual cost of providing electricity materially changes or Lessee’s use of electricity materially changes, Lessor or Lessee may request an adjustment to the Rent by an appropriate amount, and the other party will not unreasonably refuse to grant such adjustment. Lessee agrees to reasonably cooperate with Lessor, if requested by Lessor or required by Applicable Law or the rules of the utility provider, to cause all electricity used at the Tank Farm Assets to be separately metered or sub-metered at Lessee's sole cost and expense.

		
	•
	Wastewater Processing  To the extent allowed by Applicable Law, all waste water treatment will be supplied to Lessee by Lessor from existing Refinery Site sources. This treatment pertains to dock and sump materials generated during the normal course of operations and includes sump generated waste materials. The Parties acknowledge that Governmental Authorities may impose pre-treatment standards on any waste waters Lessee releases to Lessor for processing. If such pre-treatment standards are imposed, Lessor shall be responsible for ensuring that the relevant Lessee personnel are adequately trained to comply with such standards and for submitting any related and required reports with the applicable Governmental Authority. Lessee will supply field data to Lessor to fulfill any such reposting requirements.

		
	•
	Fire and Emergency Protection  Lessor will provide response support in the event of an emergency. Lessor will maintain the existing tank farm fire water and emergency response system and any necessary improvements will be made by Lessor. As further provided below, Lessor does not make, and hereby expressly disclaims, any and all representations or warranties (whether express, implied or statutory) as to the delivery pressure or volume of firewater that may be available to the Tank Farm Assets, or as to any other aspects of any firewater services provided hereunder, and Lessee acknowledges that there may be times when the firewater service to the Tank Farm Assets is interrupted or unavailable. Lessee agrees that Lessor shall have access to the Tank Farm Assets to operate, repair, inspect and maintain portions of the Refinery firewater system located therein.

		
	•
	Groundwater Monitoring.  Lessor currently operates any existing groundwater monitoring and remedial systems and will retain the obligation to maintain the existing systems until such time as the applicable Governmental Authority grants closure or Lessee and Lessor mutually agree that further operation is not necessary. As set forth in the Omnibus Agreement, in the event that Lessee has a Release following the Effective Date of this Lease and the Release has a material adverse impact on the existing remedial system or triggers new remedial obligations, Lessee shall reimburse Lessor for the additional costs incurred as a result of the Release.

		
	•
	Solid/Hazardous Waste Processing.  Lessor shall provide solid/hazardous waste processing consistent with Applicable Law.

Exhibit D

		
	•
	LDAR Monitoring and Reporting.  Lessor will provide to Lessee services necessary to perform leak detection, monitoring and reporting on all Tank Farm Assets within the Refinery Site as required by Applicable Law and any applicable consent decree. Lessor’s and Lessee’s employees will be included in the Refinery LDAR training program, which training program shall comply with the Clean Air Act and any applicable consent decree. Lessor will provide data to Lessee on all LDAR surveillance activities.

		
	•
	Security.  Lessor shall provide routine security patrols, general monitoring and surveillance, provided however Lessor be responsible for the loss of or damage to the Tank Farm Assets and Improvements.

		
	•
	IT/Controls Infrastructure.  Lessee will be entitled to access and use all necessary IT/Controls infrastructures for the operation of the Tank Farm Assets. Lessor shall maintain all IT/Controls infrastructures.

		
	•
	Laydown Areas/Storage for Spares.  Lessor will provide laydown areas and storage for spares on an as-needed basis.

		
	•
	Landscape Maintenance.  Lessor will provide or cause to be provided landscape maintenance services to the Premises.

		
	•
	Janitorial Services.  Lessor will provide or cause to be provided janitorial services to the Premises.

		
	•
	Non-hazardous Waste Handling and Collection.  Lessor will provide or cause to be provided non-hazardous waste handling and collection services to the Premises, including vacuum truck services other than for tank dewatering purposes.

		
	•
	Thermal Oxidizer.  Lessor will provide or cause to be provided thermal oxidizer services to the Premises.

Exhibit DExhibit

Exhibit 10.10

SUBORDINATED CREDIT AGREEMENT 
 
dated as of October 1, 2015 
 
among 
 
VALERO ENERGY PARTNERS LP, 
as the Borrower
The GUARANTORS Party Hereto,
and
VALERO ENERGY CORPORATION, 
as the Lender 

TABLE OF CONTENTS
Page

ARTICLE I 
DEFINITIONS
	
				
	Section 1.01
	Defined Terms
	1
	

	Section 1.02
	Classification of Borrowings
	16
	

	Section 1.03
	Terms Generally
	16
	

	Section 1.04
	Accounting Terms; GAAP
	16
	

ARTICLE II 
THE CREDITS
	
				
	Section 2.01
	Term Loan
	17
	

	Section 2.02
	Borrowing Mechanics
	17
	

	Section 2.03
	Requests for Fundings
	17
	

	Section 2.04
	Interest Elections
	18
	

	Section 2.05
	Repayment of Term Loan; Evidence of Debt
	19
	

	Section 2.06
	Prepayment of Term Loan
	19
	

	Section 2.07
	Interest
	19
	

	Section 2.08
	Alternate Rate of Interest
	20
	

	Section 2.09
	Taxes
	20
	

	Section 2.10
	Payments Generally
	21
	

ARTICLE III 
REPRESENTATIONS AND WARRANTIES
	
				
	Section 3.01
	Corporate Existence and Power
	21
	

	Section 3.02
	Corporate and Governmental Authorization; Contravention
	21
	

	Section 3.03
	Enforceability
	22
	

	Section 3.04
	Financial Information
	22
	

	Section 3.05
	Litigation; No Material Adverse Effect
	22
	

	Section 3.06
	Environmental Matters
	22
	

	Section 3.07
	Taxes
	23
	

	Section 3.08
	Solvency
	23
	

	Section 3.09
	Compliance with Laws
	23
	

	Section 3.10
	Title to Properties
	23
	

	
			
	 
	-i-
	 

TABLE OF CONTENTS
(Continued)
Page

ARTICLE IV 
CONDITIONS

ARTICLE V 
AFFIRMATIVE COVENANTS
	
			
	Section 5.01
	Financial Reporting Requirements
	24

	Section 5.02
	Notices
	25

	Section 5.03
	Existence; Conduct of Business
	25

	Section 5.04
	Payment of Taxes
	25

	Section 5.05
	Maintenance of Property; Insurance
	25

	Section 5.06
	Compliance with Laws
	26

	Section 5.07
	Books and Records; Inspection Rights
	26

	Section 5.08
	Use of Proceeds
	26

	Section 5.09
	First Tier Subsidiaries; Additional Guarantors
	26

	Section 5.10
	Designation and Conversion of Restricted and Unrestricted
Subsidiaries; Certain other Matters Pertaining to Unrestricted
Subsidiaries
	26

	Section 5.11
	Employee Matters
	27

ARTICLE VI 
NEGATIVE COVENANTS
	
			
	Section 6.01
	Liens
	28

	Section 6.02
	Fundamental Changes; Dispositions
	31

	Section 6.03
	Indebtedness; Securitization Transactions; Sale/Leaseback 
Transactions
	31

	Section 6.04
	Restricted Payments
	34

	Section 6.05
	Changes in Organization Documents
	34

	Section 6.06
	Restrictive Agreements
	34

	Section 6.07
	Change in Nature of Business
	35

	Section 6.08
	Consolidated Leverage Ratio
	35

ARTICLE VII 
EVENTS OF DEFAULT
ARTICLE VIII 
SUBORDINATION TERMS

	
			
	 
	-ii-
	 

TABLE OF CONTENTS
(Continued)
Page

ARTICLE IX 
MISCELLANEOUS
	
			
	Section 9.01
	Notices
	41

	Section 9.02
	Waivers; Amendments
	42

	Section 9.03
	Successors and Assigns
	42

	Section 9.04
	Counterparts; Integration; Effectiveness
	42

	Section 9.05
	Severability
	42

	Section 9.06
	Governing Law; Consent to Service of Process
	43

	Section 9.07
	Headings
	43

	Section 9.08
	Interest Rate Limitation
	43

	Section 9.09
	No Liability of General Partner
	43

ARTICLE X 
SUBSIDIARY GUARANTEE
	
			
	Section 10.01
	Guarantee
	43

	Section 10.02
	Waiver of Subrogation
	44

	Section 10.03
	Amendments, Etc., with respect to the Guaranteed Obligations
	44

	Section 10.04
	Guarantee Absolute and Unconditional
	44

	Section 10.05
	Reinstatement
	45

	Section 10.06
	Payments
	45

	Section 10.07
	Additional Guarantors
	45

	Section 10.08
	Guaranty Release Matters
	45

	
			
	 
	-iii-
	 

ANNEXES:

Annex A     – Leverage-Based Pricing Grid
Annex B     – Ratings-Based Pricing Grid

EXHIBITS:

Exhibit A     – Form of Promissory Note
Exhibit B     – Form of Guarantee Joinder

	
			
	 
	-iv-
	 

SUBORDINATED CREDIT AGREEMENT, dated as of October 1, 2015, among VALERO ENERGY PARTNERS LP, the Guarantors party hereto from time to time and VALERO ENERGY CORPORATION.
NOW THEREFORE, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01    Defined Terms. As used in this Agreement, the following terms have the meanings specified below:
“Acquisition Period” means the period beginning with the date on which payment of the purchase price for a Specified Acquisition is made and ending on the earlier of (a) the last day of the second full fiscal quarter following the fiscal quarter in which such payment is made, and (b) the date on which the Borrower notifies the Lender that it desires to end the Acquisition Period for such Specified Acquisition; provided that once any Acquisition Period is in effect, the next Acquisition Period may not commence until the termination of such Acquisition Period then in effect. As used above, “Specified Acquisition” means any one or more transactions (i) pursuant to which the Borrower or any Restricted Subsidiary acquires for an aggregate purchase price of not less than $50,000,000 (x) more than 50% of the Equity Interests in any other Person or (y) other property or assets (other than acquisitions of Equity Interests of a Person, capital expenditures and acquisitions of inventory or supplies in the ordinary course of business) of, or of an operating division or business unit of, any other Person, and (ii) which is designated by the Borrower (by written notice to the Lender) as a “Specified Acquisition”.
“Agreement” means this Subordinated Credit Agreement, as amended, restated, amended and restated, supplemented or otherwise modified from time to time.
“Applicable Rate” means, for any day, with respect to any Prime Rate Borrowing or Eurodollar Borrowing, (a) at all times prior to the Rating Date, the applicable rate per annum set forth in the Leverage-Based Pricing Grid based upon the Consolidated Leverage Ratio under the caption “Prime Rate Margin,” or “LIBOR Margin”, as the case may be, and (b) at all times from and after the Rating Date, the applicable rate per annum set forth in the Ratings-Based Pricing Grid based upon the Designated Rating under the caption “Prime Rate Margin” or “LIBOR Margin”, as the case may be.
“Attributable Debt” means in respect of a Sale/Leaseback Transaction, as at the time of determination, the present value of the total obligations of the lessee for rental payments during the remaining term of the lease included in such Sale/Leaseback Transaction (including any period for which such lease has been extended); provided, however, that if such Sale/Leaseback Transaction results in a Capital Lease Obligation, the amount of Indebtedness represented thereby will be determined in accordance with the definition of and will constitute “Capital Lease Obligations.” Such present value shall be calculated using a discount rate equal to the rate of interest implicit in such transaction, determined in accordance with GAAP.

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“Authorized Officer” means a duly authorized officer of a Loan Party or the General Partner acting on behalf of such Loan Party.
“Borrower” means Valero Energy Partners LP, a Delaware limited partnership.
“Borrowing” means, with respect to any portion of the Term Loan, such portion that is of the same Type, made, converted or continued on the same date and, in the case of Eurodollar Borrowings, as to which a single Interest Period is in effect. 
“Borrowing Request” means a request by the Borrower for funding the Term Loan in accordance with Section 2.03. 
“Business Day” means any day that is not a Saturday, Sunday or other day on which commercial banks in San Antonio, Texas or New York City are authorized or required by law to remain closed; provided that, when used in connection with a Eurodollar Borrowing, the term “Business Day” shall also exclude any day on which banks are not open for dealings in dollar deposits in the London interbank market.
“Capital Lease Obligations” as to any Person, means the obligations of such Person to pay rent or other amounts under any lease of (or other arrangement conveying the right to use) real or personal property, or a combination thereof, which obligations are required to be classified and accounted for as capital leases on a balance sheet of such Person under GAAP, and the amount of such obligations shall be the capitalized amount thereof determined in accordance with GAAP; provided that any lease that would have been considered an operating lease under the provisions of GAAP in effect as of December 31, 2013 shall be treated as an operating lease for all purposes under this Agreement.
“Change in Control” means (a) Valero Energy Corporation ceases to own, directly or indirectly, a majority of the Equity Interests of, or ceases to Control, the General Partner; (b) the Borrower ceases to own, directly or indirectly, 100% of the Equity Interests of the Initial Guarantor; or (c) the General Partner ceases to be the sole general partner of, or ceases to Control, the Borrower.
“Closing Date” means the date upon which this Agreement has been executed by all parties hereto and all conditions precedent set forth in Article IV have been satisfied.
“Commercial Operation Date” means the date on which a Qualified Project is substantially complete and commercially operable.
“Consolidated EBITDA” means for any period, an amount equal to the sum of (a) Consolidated Net Income for such period plus, (b) to the extent reducing Consolidated Net Income for such period, and without duplication: (i) net federal, state, local or foreign income or franchise tax expense; (ii) net interest expense (including amortization or write-off of debt issuance costs and commissions, discounts and other fees and charges associated with Indebtedness), amortization of capitalized interest and the net amount accrued (whether or not actually paid) pursuant to any interest rate protection agreement during such period (or minus the net amount receivable (whether or not actually received) during such period); (iii) depreciation, depletion and 

-2-

amortization expense, including amortization of intangibles; (iv) extraordinary expenses or loss and unusual or non-recurring expenses or losses (including, whether or not otherwise includable as a separate item in the statement of such Consolidated Net Income for such period, (A) losses from dispositions not in the ordinary course of business and (B) goodwill or intangible asset impairment); (v) transaction expenses directly related to the Transactions; and (vi) any non-cash charges to income not included in the foregoing clauses (i) through (v); minus, (c) to the extent included in the calculation of Consolidated Net Income for such period, without duplication, the sum of: (i) any extraordinary income or gains (including, whether or not otherwise includable as a separate item in the statement of such Consolidated Net Income for such period, gains on dispositions not in the ordinary course of business); (ii) any cash expenditures during such period on account of any non-cash item which was added back to Consolidated EBITDA during any prior period with respect to which a calculation of Consolidated EBITDA was made under this Agreement (and; provided that the cash expenditure does not impact Consolidated Net Income in the period paid); and (iii) any other unusual or non-recurring income or gains, all as determined for the Borrower and its Restricted Subsidiaries on a consolidated basis.
In the event Borrower or any of its Restricted Subsidiaries acquires (x) more than 50% of the Equity Interests in any other Person or (y) other property or assets (other than acquisitions of Equity Interests of a Person, capital expenditures and acquisitions of inventory or supplies in the ordinary course of business) of, or of an operating division or business unit of, any other Person, at Borrower’s option, Consolidated EBITDA for the relevant period shall be calculated after giving effect, on a pro forma basis, to such acquisition as if such acquisition occurred on the first day of the period. Any such pro forma adjustments shall be calculated in good faith by the Borrower and shall be supported by reasonably detailed calculations furnished together with the compliance certificate delivered pursuant to Section 5.01(c) for the applicable period.
Further, in connection with any Qualified Project, Consolidated EBITDA, as used in determining the Consolidated Leverage Ratio, may be modified so as to include Qualified Project EBITDA Adjustments, as provided in Section 6.08.
“Consolidated Leverage Ratio” means as of any date of determination, the ratio of Consolidated Total Debt as of such date to Consolidated EBITDA for the four fiscal quarter period ending on such date.
“Consolidated Net Assets” means at any date, the total amount of assets of the Borrower and its Restricted Subsidiaries after deducting therefrom (a) all current liabilities of the Borrower and its Restricted Subsidiaries (excluding any thereof which are by their terms extendible or renewable at the option of the Borrower or a Restricted Subsidiary to a time more than 12 months after the time as of which the amount thereof is being computed), and (b) total prepaid expenses and deferred charges of the Borrower and its Restricted Subsidiaries. For purposes of the definition of “Material Subsidiaries” and Section 5.10(f), the references to Restricted Subsidiaries in this definition shall be deemed to be references to all Subsidiaries.
“Consolidated Net Income” means for any period, the net income (loss) of the Borrower and its Restricted Subsidiaries on a consolidated basis determined in accordance with GAAP, provided that there shall be excluded from such net income (to the extent otherwise included 

-3-

therein), the income (or loss) of any entity other than a Restricted Subsidiary in which the Borrower or any Restricted Subsidiary has an ownership interest, except to the extent that any such income has been actually received by the Borrower or such Restricted Subsidiary in the form of cash dividends or similar cash distributions. Further, when determining Consolidated Net Income for any fiscal quarter, Consolidated Net Income shall not include any undistributed net income of a Restricted Subsidiary to the extent that the ability of such Restricted Subsidiary to make Restricted Payments to the Borrower or to a Restricted Subsidiary is, as of the date of determination of Consolidated Net Income, prohibited by its Organization Documents, or restricted by any Contractual Obligation (other than pursuant to this Agreement) or any applicable law.
“Consolidated Net Tangible Assets” means at any date, (a) Consolidated Net Assets minus (b) goodwill and other intangible assets of the Borrower and its Restricted Subsidiaries, in each case determined on a consolidated basis in accordance with GAAP, all as reflected in the consolidated financial statements most recently delivered to the Lender pursuant to Section 5.01 (a) or Section 5.01 (b) (or with respect to the periods prior to the initial delivery of financial statements under Section 5.01, as reflected on the Initial Financial Statements). For purposes of the definition of “Material Subsidiaries” and Section 5.10(f), the references to Restricted Subsidiaries in this definition shall be deemed to be references to all Subsidiaries.
“Consolidated Total Debt” means at any date, without duplication the aggregate amount of the Indebtedness of the Borrower and its Restricted Subsidiaries of the type specified in clause (a), (b), (c), (d), (e) or (h), clause (g) (so long as obligations specified in such clause are not contingent) or clause (f) (if the Guarantees specified in such clause are of Indebtedness of the type referred to above) of the definition of “Indebtedness” as of such date determined on a consolidated basis.
“Contractual Obligation” means as to any Person, any provision of any security issued by such Person or of any agreement, instrument or other undertaking to which such Person is a party or by which it or any of its property is bound.
“Control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract or otherwise. “Controlling” and “Controlled” have meanings correlative thereto.
 “Default” means any event or condition which constitutes an Event of Default or which upon notice, lapse of time or both would, unless cured or waived, become an Event of Default.
“Designated Rating” means with respect to any Rating Agency, (i) the rating assigned by such Rating Agency to the Borrower’s Senior Debt, or (ii) if and only if such Rating Agency does not have in effect a rating described in the preceding clause (i), the rating assigned by such Rating Agency to the facility evidenced by this Agreement at any time such a rating is in effect, or (iii) if and only if such Rating Agency does not have in effect a rating described in the preceding clauses (i) or (ii), the Borrower’s “company” or “corporate credit” rating (or its equivalent) assigned by such Rating Agency.

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“dollars” or “$” refers to lawful money of the United States of America.
“Elective Guarantor” means a Restricted Subsidiary that becomes a Guarantor pursuant to Section 5.09(b). A First Tier Subsidiary that is an Elective Guarantor shall cease to be an “Elective Guarantor” and shall become a “Required Guarantor” from and after the date that it becomes a Material Subsidiary.
“Environmental Laws” means all laws, rules, regulations, codes, ordinances, orders, decrees, judgments, injunctions, notices or binding agreements issued, promulgated or entered into by any Governmental Authority, relating in any way to the environment, preservation or reclamation of natural resources, the management, release or threatened release of any Hazardous Materials or to health and safety matters arising from the exposure to Hazardous Materials.
“Environmental Liability” means any liability, contingent or otherwise (including any liability for damages, costs of environmental remediation, fines, penalties or indemnities), of the Borrower or any Restricted Subsidiary directly or indirectly resulting from or based upon (a) violation of any Environmental Law, (b) the generation, use, handling, transportation, storage, treatment or disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials, (d) the release or threatened release of any Hazardous Materials into the environment or (e) any contract, agreement or other consensual arrangement pursuant to which liability is assumed or imposed with respect to any of the foregoing.
“Equity Interests” means with respect to any Person, all of the shares of capital stock of (or other ownership or profit interests in) such Person, all of the warrants, options or other rights for the purchase or acquisition from such Person of shares of capital stock of (or other ownership or profit interests in) such Person, all of the securities convertible into or exchangeable for shares of capital stock of (or other ownership or profit interests in) such Person or warrants, rights or options for the purchase or acquisition from such Person of such securities (or such other interests), and all of the other ownership or profit interests in such Person (including partnership, member or trust interests therein), whether voting or nonvoting, and whether or not such shares, warrants, options, rights or other interests are outstanding on any date of determination.
“Eurodollar”, when used in reference to the Term Loan, refers to whether the portion of the Term Loan comprising a Borrowing, is bearing interest at a rate determined by reference to the LIBO Rate. 
“Event of Default” has the meaning assigned to such term in Article VII.
“Excluded Subsidiary Debt” means (a) Unsecured Acquired Debt and refinancings, extensions, renewals, or refundings thereof provided that the principal amount thereof is not increased (other than by amounts incurred to pay the costs of such refinancing, extension, renewal or refunding and any premiums paid in connection therewith); (b) Indebtedness that is owed by a Restricted Subsidiary to the Borrower or to another Restricted Subsidiary; (c) amounts owing by a Restricted Subsidiary pursuant to Securitization Transactions as permitted by Section 6.03(b) (ii); and (d) Indebtedness in an amount not to exceed $150,000,000, outstanding on the Investment Grade Rating Date.

-5-

“Excluded Taxes” means, with respect to the Lender or any other recipient of any payment to be made by or on account of any obligation of the Borrower hereunder, (a) income or franchise Taxes imposed on (or measured by) its net income and/or net worth by the United States of America, or by the jurisdiction under the laws of which such recipient is organized or in which its principal office is located or (b) any branch profits Taxes imposed by the United States of America or any similar Tax imposed by any other jurisdiction in which the Borrower is located.
“Financial Officer” means the chief financial officer, principal accounting officer, financial vice president, treasurer or controller of a Loan Party or of the General Partner acting on behalf of a Loan Party.
“First Tier Subsidiary” means any direct Restricted Subsidiary.
 “GAAP” means generally accepted accounting principles in the United States of America as in effect from time to time.
“General Partner” means Valero Energy Partners GP LLC, a Delaware limited liability company.
“Governmental Authority” means the government of the United States of America, any other nation or any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government.
“Guarantee” means as to any Person, any obligation, contingent or otherwise, of such Person directly or indirectly guaranteeing any Indebtedness or other obligation of any other Person and, without limiting the generality of the foregoing, any obligation, direct or indirect, contingent or otherwise, of such Person (a) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other obligation (whether arising by virtue of partnership arrangements, by agreement to keep-well, to purchase assets, goods, securities or services, to take-or-pay, or to maintain financial statement conditions or otherwise) or (b) entered into for the purpose of assuring in any other manner the obligee of such Indebtedness or other obligation of the payment thereof or to protect such obligee against loss in respect thereof (in whole or in part); provided that the term “Guarantee” shall not include endorsements for collection or deposit in the ordinary course of business. The term “Guarantee” used as a verb has a corresponding meaning.
“Guarantee Joinder” means a Guarantee Joinder, substantially in the form of Exhibit B.
“Guaranteed Obligations” has the meaning assigned such term in Section 10.01.
“Guarantor” means the Initial Guarantor, each additional Required Guarantor (if any), and each Elective Guarantor (if any).

-6-

“Hazardous Materials” means all explosive or radioactive substances or wastes and all hazardous or toxic substances, wastes or other pollutants, including petroleum or petroleum distillates, asbestos or asbestos containing materials, polychlorinated biphenyls, radon gas, infectious or medical wastes and all other substances or wastes of any nature regulated pursuant to any Environmental Law.
“Hedging Agreement” means any rate swap transaction, basis swap, forward rate transaction, commodity swap, commodity option, equity or equity index swap, equity or equity index option, bond option, interest rate option, cap transaction, floor transaction, collar transaction, currency swap transaction, cross-currency rate swap transaction, currency option or any other similar transaction (including any option with respect to any of the foregoing transactions) or any combination of the foregoing transactions.
“Hedging Obligations” means obligations in respect of Hedging Agreements.
“Indebtedness” means as to any Person, at any date, without duplication, (a) all obligations of such Person for borrowed money, (b) all obligations of such Person evidenced by bonds, debentures, notes or other similar instruments, (c) all obligations of such Person to pay the deferred purchase price of property or services, except trade accounts payable arising in the ordinary course of business, (d) all Capital Lease Obligations of such Person, (e) all Indebtedness of others secured by a Lien on any asset of such Person (other than a Lien on Equity Interests in an Unrestricted Subsidiary owned by such Person securing Non-Recourse Debt on which such Unrestricted Subsidiary is an obligor), whether or not such Indebtedness is assumed by such Person (provided, that for purposes of this clause (e), if such Person has not assumed or otherwise become personally liable for any such Indebtedness, the amount of Indebtedness of such Person in connection therewith shall be limited to the lesser of (i) the fair market value of such asset(s) and (ii) the amount of Indebtedness secured by such Lien), (f) all Indebtedness of others Guaranteed by such Person, (g) all obligations of such Person in respect of bankers’ acceptances, (h) all non-contingent obligations of such Person to reimburse any bank or other Person in respect of amounts paid under a letter of credit or similar instrument (other than trade letters of credit and documentary letters of credit), provided, however that in the case of letters of credit, reimbursement obligations shall not be considered Indebtedness unless they have not been reimbursed within three Business Days after becoming due, and (i) all production payments, proceeds production payments or similar obligations of such Person. The Indebtedness of any Person shall include the Indebtedness of any other entity (including any partnership in which such Person is a general partner) to the extent such Person is liable therefor as a result of such Person’s ownership interest in or other relationship with such entity, except to the extent the terms of such Indebtedness provide that such Person is not liable therefor.
“Indemnified Taxes” means Taxes other than Excluded Taxes.
“Initial Financial Statements” means, collectively, (a) the audited annual consolidated financial statements of the Borrower dated as of December 31, 2014 and (b) the unaudited quarterly consolidated financial statements of the Borrower dated as of June 30, 2015.
“Initial Guarantor” means Valero Partners Operating Co. LLC, a Delaware limited liability company and any successor Guarantor thereto permitted pursuant to Section 6.02 hereof.

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“Interest Election Request” means a request by the Borrower to convert or continue a Borrowing in accordance with Section 2.04.
“Interest Payment Date” means (a) with respect to any Prime Rate Borrowing, the last day of each March, June, September and December and (b) with respect to any Eurodollar Borrowing, the last day of the Interest Period applicable to the Borrowing of which such Eurodollar Borrowing is a part and, in the case of a Eurodollar Borrowing with an Interest Period of more than three months’ duration each day prior to the last day of such Interest Period that occurs at intervals of three months’ duration after the first day of such Interest Period.
“Interest Period” means with respect to any Eurodollar Borrowing, the period commencing on the date of such Borrowing and ending on the numerically corresponding day in the calendar month that is one, two, three or six months thereafter (or, with the consent of the Lender, such other periods for which LIBO Rates are available at the time the Borrowing Request for such Eurodollar Borrowing is made), as the Borrower may elect; provided, that (i) if any Interest Period would end on a day other than a Business Day, such Interest Period shall be extended to the next succeeding Business Day unless such next succeeding Business Day would fall in the next calendar month, in which case such Interest Period shall end on the next preceding Business Day and (ii) any Interest Period that commences on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the last calendar month of such Interest Period) shall end on the last Business Day of the last calendar month of such Interest Period. For purposes hereof, the date of a Borrowing initially shall be the date on which such Borrowing is made, and thereafter shall be the effective date of the most recent conversion or continuation of such Borrowing.
“Investment Grade Rating” means a Designated Rating of (a) BBB- or higher by S&P or (b) Baa3 or higher by Moody’s.
“Investment Grade Rating Date” means the date on which the Borrower first obtains an Investment Grade Rating.
 “Laws” means all ordinances, statutes, rules, regulations, orders, injunctions, writs, treaties or decrees of any governmental or political subdivision or agency thereof, or of any court or similar entity established by any thereof.
“Lender” means Valero Energy Corporation and its successors and assigns.
“Leverage-Based Pricing Grid” means the Leverage-Based Pricing Grid attached hereto as Annex A.
“LIBO Rate” means, with respect to any Eurodollar Borrowing for any Interest Period, the rate appearing on Reuters BBA Libor Rates Page 3750 (or on any successor or substitute page of such Service, or any successor to or substitute for such Service, providing rate quotations comparable to those currently provided on such page of such Service, as determined by the Lender from time to time for purposes of providing quotations of interest rates applicable to dollar deposits in the London interbank market) at approximately 11:00 a.m., London time, two Business Days prior to the commencement of such Interest Period, as the rate for dollar deposits with a maturity 

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comparable to such Interest Period. In the event that such rate is not available at such time for any reason, then the “LIBO Rate” with respect to such Eurodollar Borrowing for such Interest Period shall be the rate at which dollar deposits of $5,000,000 and for a maturity comparable to such Interest Period are offered by the principal London office of the Administrative Agent under the Revolving Credit Agreement in immediately available funds in the London interbank market at approximately 11:00 a.m., London time, two Business Days prior to the commencement of such Interest Period.
“Lien” means with respect to any asset, any mortgage, lien, pledge, charge, security interest or encumbrance of any kind in respect of such asset (including any production payment, proceeds production payment or similar financing arrangement with respect to such asset). For the purposes of this Agreement, the Borrower or any Subsidiary shall be deemed to own subject to a Lien any asset which it has acquired or holds subject to the interest of a vendor or lessor under any conditional sale agreement, capital lease or other title retention agreement relating to such asset.
“Loan Documents” means this Agreement, including schedules and exhibits hereto, any Guarantee Joinder, any Note, and any other document executed by the Borrower or a Guarantor that states by its terms that it is a Loan Document, and amendments, modifications or supplements thereto or waivers thereof.
“Loan Party” means each of the Borrower and each Guarantor.
“Material Adverse Effect” means a material adverse effect on (a) the business, assets, operations or condition, financial or otherwise, of the Borrower and its Restricted Subsidiaries taken as a whole, or (b) the ability of the Borrower to perform any of its obligations under this Agreement.
“Material Subsidiary” means, at any time, a Subsidiary whose Net Tangible Assets represent 15% or more of Consolidated Net Tangible Assets for the Borrower’s most recently completed fiscal quarter.
“Maturity Date” means October 1, 2020.
“Moody’s” means Moody’s Investors Service, Inc.
“Net Assets” of a Person at any date, means the total amount of assets of such Person and its Subsidiaries after deducting therefrom (a) all current liabilities of such Person and its Subsidiaries (excluding any thereof which are by their terms extendible or renewable at the option of such Person or a Subsidiary of such Person to a time more than 12 months after the time as of which the amount thereof is being computed), and (b) total prepaid expenses and deferred charges of such Person and its Subsidiaries.
“Net Tangible Assets” of a Person at any date, means (a) Net Assets of such Person and its Subsidiaries minus (b) goodwill and other intangible assets of such Person and its Subsidiaries, in each case determined on a consolidated basis in accordance with GAAP, for the fiscal quarter for which financial statements have been most recently delivered to the Lender pursuant to Section 5.01(a) or Section 5.01(b) (or with respect to periods prior to the delivery of 

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the initial financial statements required under Section 5.01, as reflected on the Initial Financial Statements).
“Non-Guarantor Subsidiary” means a Restricted Subsidiary that is not a Guarantor.
“Non-Recourse Debt” means Indebtedness: (a) as to which neither the Borrower nor any of its Restricted Subsidiaries (i) provides credit support of any kind (including any undertaking, agreement or instrument that would constitute Indebtedness) or (ii) is directly or indirectly liable as a guarantor or otherwise, in either case, other than a pledge of the Equity Interests of an Unrestricted Subsidiary that is an obligor on such Indebtedness; and (b) no default with respect to which (including any rights that the holders of the Indebtedness may have to take enforcement action against an Unrestricted Subsidiary) would permit upon notice, lapse of time or both any holder of any other Indebtedness of the Borrower or any of its Restricted Subsidiaries to declare a default on such other Indebtedness or cause the payment of such other Indebtedness to be accelerated or payable prior to its maturity. For purposes of determining compliance with Section 6.03 hereof, in the event that any Non-Recourse Debt of any of the Borrower’s Unrestricted Subsidiaries ceases to be Non-Recourse Debt of such Unrestricted Subsidiary, such event will be deemed to constitute an incurrence of Indebtedness by a Restricted Subsidiary of the Borrower.
“Note” means a promissory note in substantially the form of Exhibit A hereof.
“Obligations” means all advances to, and debts, liabilities, obligations, covenants and duties of, any Loan Party arising under any Loan Document or otherwise with respect to the Term Loan, in each case whether direct or indirect (including those acquired by assumption), absolute or contingent, due or to become due, now existing or hereafter arising and including interest and fees that accrue after the commencement by or against any Loan Party or any Subsidiary thereof of any proceeding under any applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors’ rights generally naming such Person as the debtor in such proceeding, regardless of whether such interest and fees are allowed claims in such proceeding.
“Organization Documents” means (a) with respect to any corporation, the certificate or articles of incorporation and the bylaws; (b) with respect to any limited liability company, the certificate of formation and operating or limited liability company agreement; and (c) with respect to any partnership, joint venture, trust or other form of business entity, the partnership, joint venture or other applicable agreement of formation and any agreement, instrument, filing or notice with respect thereto filed in connection with its formation with the secretary of state or other department in the state of its formation, in each case as amended from time to time.
“Other Taxes” means any and all present or future stamp or documentary taxes or any other excise or property taxes, charges or similar levies arising from any payment made hereunder or from the execution, delivery or enforcement of, or otherwise with respect to, this Agreement.
“Person” means any natural person, corporation, limited liability company, trust, joint venture, association, company, partnership, Governmental Authority or other entity.

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“Prime Rate” means the rate of interest per annum publicly announced from time to time by JPMorgan Chase Bank, N.A. as its prime rate in effect at its principal office in New York City; each change in the Prime Rate shall be effective from and including the date such change is publicly announced as being effective.
“Prime Rate Borrowing”, when used in reference to the Term Loan, refers to whether the portion of the Term Loan comprising a Borrowing is bearing interest at a rate determined by reference to the Prime Rate.
“Priority Debt” has the meaning assigned such term in Section 6.03(b)(i).
“Qualified Project” means the construction or expansion of any capital project of the Borrower or any of its Restricted Subsidiaries, the aggregate actual or budgeted capital cost of which (in each case, including capital costs expended by the Borrower or any such Restricted Subsidiaries prior to the construction or expansion of such project) exceeds $50,000,000.
“Qualified Project EBITDA Adjustments” means with respect to each Qualified Project:
(a)    prior to the Commercial Operation Date of a Qualified Project (but including the fiscal quarter in which such Commercial Operation Date occurs), a percentage (based on the then-current completion percentage of such Qualified Project) of an amount to be approved by the Lender (such approval not to be unreasonably withheld or delayed) as the projected Consolidated EBITDA of the Borrower and its Restricted Subsidiaries attributable to such Qualified Project for the first 12-month period following the scheduled Commercial Operation Date of such Qualified Project (such amount to be determined based on customer contracts relating to such Qualified Project, the creditworthiness of the other parties to such contracts, and projected revenues from such contracts, capital costs and expenses, scheduled Commercial Operation Date, commodity price assumptions and other reasonable factors deemed appropriate by the Lender), which may, at the Borrower’s option, be added to actual Consolidated EBITDA for the Borrower and its Restricted Subsidiaries for the fiscal quarter in which construction of such Qualified Project commences and for each fiscal quarter thereafter until the Commercial Operation Date of such Qualified Project (including the fiscal quarter in which such Commercial Operation Date occurs, but net of any actual Consolidated EBITDA of the Borrower and its Restricted Subsidiaries attributable to such Qualified Project following such Commercial Operation Date); provided that if the actual Commercial Operation Date does not occur by the scheduled Commercial Operation Date, then the foregoing amount shall be reduced, for quarters ending after the scheduled Commercial Operation Date to (but excluding) the first full quarter after its actual Commercial Operation Date, by the following percentage amounts depending on the period of delay (based on the period of actual delay or then-estimated delay, whichever is longer): (i) 90 days or less, 0%, (ii) longer than 90 days, but not more than 180 days, 25%, (iii) longer than 180 days but not more than 270 days, 50%, (iv) longer than 270 days but not more than 365 days, 75% and (v) longer than 365 days, 100%; and
(b)    thereafter, actual Consolidated EBITDA of the Borrower and its Restricted Subsidiaries attributable to such Qualified Project for each full fiscal quarter after the Commercial Operation Date, plus the amount approved by the Lender pursuant to clause (a) above as the projected 

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Consolidated EBITDA of the Borrower and its Restricted Subsidiaries attributable to such Qualified Project for the fiscal quarters constituting the balance of the four full fiscal quarter period following such Commercial Operation Date; provided that in the event the actual Consolidated EBITDA of the Borrower and its Restricted Subsidiaries attributable to such Qualified Project for any full fiscal quarter after the Commercial Operation Date shall materially differ from the projected Consolidated EBITDA approved by the Lender pursuant to clause (a) above for such fiscal quarter, the projected Consolidated EBITDA of the Borrower and its Restricted Subsidiaries attributable to such Qualified Project for any remaining fiscal quarters included in the foregoing calculation shall be redetermined in the same manner as set forth in clause (a) above, such amount to be approved by the Lender (such approval not to be unreasonably withheld or delayed), which may, at the Borrower’s option, be added to actual Consolidated EBITDA for the Borrower and its Restricted Subsidiaries for such fiscal quarters.
Notwithstanding the foregoing:
(A)    no such additions shall be allowed with respect to any Qualified Project unless:
(1)    not later than 30 days prior to the delivery of any certificate required by the terms and provisions of Section 5.01(c) to the extent Qualified Project EBITDA Adjustments are requested be made to Consolidated EBITDA in determining compliance with Section 6.08, the Borrower shall have delivered to the Lender (i) written pro forma projections of Consolidated EBITDA of the Borrower and its Restricted Subsidiaries attributable to such Qualified Project and (ii) a certificate of the Borrower certifying that all written information provided to the Lender for purposes of approving such pro forma projections (including information relating to customer contracts relating to such Qualified Project, the creditworthiness of the other parties to such contracts, and projected revenues from such contracts, capital costs and expenses, scheduled Commercial Operation Date, commodity price assumptions) was prepared in good faith based upon assumptions that were reasonable at the time they were made; and
(2)    prior to the date such certificate is required to be delivered, the Lender shall have approved (such approval not to be unreasonably withheld) such projections and shall have received such other information and documentation as the Lender may reasonably request, all in form and substance satisfactory to the Lender; and
(B)    the aggregate amount of all Qualified Project EBITDA Adjustments during any period shall be limited to 20% of the total actual Consolidated EBITDA of the Borrower and its Restricted Subsidiaries for such period (which total actual Consolidated EBITDA shall be determined without including any Qualified Project EBITDA Adjustments).
“Rating Agency” means S&P and/or Moody’s.
“Rating Date” means the first date after the Closing Date upon which the Borrower obtains a Designated Rating.

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“Ratings-Based Pricing Grid” means the Ratings-Based Pricing Grid attached hereto as Annex B.
“Required Guarantor” means any Material Subsidiary that is a First Tier Subsidiary; collectively the “Required Guarantors”.
 “Restricted Payment” by a Person means any dividend or other distribution (whether in cash, securities or other property) with respect to any Equity Interest in such Person, or any payment (whether in cash, securities or other property), including any sinking fund or similar deposit on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any such equity interest or of any option, warrant or other right to acquire any such equity interest.
“Restricted Subsidiary” means any Subsidiary of the Borrower other than an Unrestricted Subsidiary.
“Revolving Credit Agreement” has the meaning assigned to such term in Article VIII.
“S&P” means Standard & Poor’s Ratings Services, a division of McGraw-Hill Companies, Inc.
“Sale/Leaseback Transaction” means an arrangement whereby the Borrower or a Restricted Subsidiary transfers property owned by it to a Person and the Borrower or a Restricted Subsidiary leases it from such Person.
“SEC” means the United States Securities and Exchange Commission, or any Governmental Authority succeeding to the functions thereof.
“Securitization Entity” means any Person engaged solely in the business of effecting Securitization Transactions and related activities.
“Securitization Indebtedness” means any Indebtedness under any Securitization Transaction that does not permit or provide recourse for principal or interest (other than Standard Securitization Undertakings) to the Borrower or any Restricted Subsidiary of the Borrower (other than a Securitization Entity) or any property or asset of the Borrower or any Restricted Subsidiary of the Borrower (other than the property or assets of a Securitization Entity or any Equity Interests or securities issued by a Securitization Entity).
“Securitization Transaction” means any transaction in which the Borrower or a Restricted Subsidiary sells or otherwise transfers accounts receivable or other rights to payment (whether existing or arising in the future) and assets related thereto (a) to one or more purchasers or (b) to a special purpose entity that (i) borrows under a loan secured by or issues securities payable from such accounts receivable or other rights to payment (or undivided interests therein) and related assets or (ii) sells or otherwise transfers such accounts receivable or other rights to payment (or undivided interests therein) and related assets to one or more purchasers, whether or not amounts received in connection with the sale or other transfer of such accounts receivable or other rights to payment and related assets to an entity referred to in clause (a) or (b) above would under GAAP be 

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accounted for as liabilities on a consolidated balance sheet of the Borrower. The amount of any Securitization Transaction shall be deemed at any time to be (1) the aggregate outstanding principal or stated amount of the borrowings or securities in connection with the transactions referred to in clause (b)(i) of the preceding sentence; (2) the outstanding amount of capital invested in or unrecovered outstanding purchase price paid in connection with a transaction referred to in clause (b)(ii) of the preceding sentence; or (3) if there shall be no such principal or stated amount or outstanding capital invested or unrecovered purchase price, the uncollected amount of the accounts receivable transferred to such purchaser(s) pursuant to such Securitization Transaction net of any such accounts receivable that have been written off as uncollectible and any discount in the purchase price thereof.
“Senior Debt” means the Borrower’s senior unsecured, non-credit enhanced, long term debt for which a rating has been established by Moody’s and/or S&P.
“Solvent” means with respect to any Person and its Subsidiaries on a consolidated basis, as of a particular date, that on such date (a) such Person and its consolidated Subsidiaries are able to pay their debts and other liabilities, contingent obligations and other commitments, on a consolidated basis, as they mature in the normal course of business, (b) such Person and its consolidated Subsidiaries do not intend to, and do not believe that they will, incur debts or liabilities on a consolidated basis beyond their ability to pay as such debts and liabilities mature in their ordinary course, (c) such Person and its consolidated Subsidiaries are not engaged in a business or a transaction, and are not about to engage in a business or a transaction, for which their consolidated assets would constitute unreasonably small capital after giving due consideration to the prevailing practice in the industry in which such Persons are engaged or are to engage, (d) the fair value of the assets of such Person and its consolidated Subsidiaries is greater than the total amount of consolidated liabilities, including contingent liabilities, of such Person and its consolidated Subsidiaries and (e) the present fair saleable value of the consolidated assets of such Person and its consolidated Subsidiaries is not less than the amount that will be required to pay the probable consolidated liability of such Person and its consolidated Subsidiaries on their consolidated debts as they become absolute and matured. In computing the amount of contingent liabilities at any time, it is intended that such liabilities will be computed as the amount which, in light of all the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability.
“Standard Securitization Undertakings” means any representations, warranties, servicer obligations, covenants and indemnities entered into by the Borrower or any Restricted Subsidiary of the Borrower of a type that are reasonably customary in securitizations.
“Subsidiary” means with respect to any Person (the “parent”) at any date, any corporation, limited liability company, partnership, association or other entity the accounts of which would be consolidated with those of the parent in the parent’s consolidated financial statements if such financial statements were prepared in accordance with GAAP as of such date, as well as any other corporation, limited liability company, partnership, association or other entity of which securities or other ownership interests representing more than 50% of the equity or more than 50% of the ordinary voting power or, in the case of a partnership, more than 50% of the general partnership 

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interests are, as of such date, owned, or held by the parent or one or more subsidiaries of the parent or by the parent and one or more subsidiaries of the parent. Unless otherwise specified, all references herein to a “Subsidiary” or to “Subsidiaries” shall refer to a Subsidiary or Subsidiaries of the Borrower.
“Subsidiary Guarantee” has the meaning assigned to such term in Section 10.01.
“Taxes” means any and all present or future taxes, levies, imposts, duties, deductions, charges or withholdings imposed by any Governmental Authority.
“Term Loan” means the term loan of up to $395,000,000 made by the Lender to the Borrower pursuant to this Agreement.
“Transactions” means any incurrence of Indebtedness by the Borrower and the Guarantors under this Agreement on the Closing Date.
“Type”, when used in reference to any Borrowing, refers to whether the rate of interest on such Borrowing is determined by reference to the LIBO Rate or the Prime Rate.
“Unrestricted Subsidiary” means any Subsidiary, other than a Material Subsidiary, formed or acquired after the Closing Date that is designated by the Borrower as an Unrestricted Subsidiary; provided that: (a) such Subsidiary has no Indebtedness other than Non-Recourse Debt; (b) no Loan Party nor any Restricted Subsidiary Guarantees any Indebtedness of such Subsidiary or grants a Lien on any assets to secure any Indebtedness or other obligations of such Subsidiary except Liens on Equity Interests in Unrestricted Subsidiaries permitted by (or permitted under Section 6.01(a)(i) to be incurred as described in) Section 6.01(b)(xix); (c) except as permitted by the Lender, such Subsidiary is not party to any agreement, contract, arrangement or understanding with the Borrower or any Restricted Subsidiary of the Borrower; (d) such Subsidiary is a Person with respect to which neither the Borrower nor any of its Restricted Subsidiaries has any direct or indirect obligation (x) to make capital contributions to such Person or to subscribe for additional Equity Interests or (y) to maintain or preserve such Person’s financial condition or to cause such Person to achieve any specified levels of operating results; (e) such Subsidiary is not a Guarantor and has not Guaranteed or otherwise directly or indirectly provided credit support for any Indebtedness of the Borrower or any Restricted Subsidiaries; (f) such designation complies with Section 5.10; and (g) such Subsidiary has not been redesignated as an Unrestricted Subsidiary under Section 5.10. Any designation of a Subsidiary as an Unrestricted Subsidiary will be evidenced to the Lender by a certificate from a Financial Officer of the Borrower certifying that such designation complies with the preceding conditions. As of the Closing Date there are no Unrestricted Subsidiaries.
“Unsecured Acquired Debt” means unsecured Indebtedness of a Person that (a) exists at the time such Person becomes a Restricted Subsidiary as a result of an acquisition, merger or other combination, in each case, consummated after the Closing Date, or at the time such Person is merged or consolidated with or into, or otherwise acquired by, a Restricted Subsidiary, in each case, after the Closing Date, or (b) is assumed in connection with the acquisition of assets after the Closing Date; provided that, (x) in each case, such unsecured Indebtedness was not incurred or 

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granted in contemplation of such acquisition, merger, or other combination, and (y) in no event shall such unsecured Indebtedness exceed the value of the Person or property so acquired.
“Valero Energy Corporation” means Valero Energy Corporation, a Delaware corporation.
Section 1.02    Classification of Borrowings. Borrowings may be classified and referred to by Type (e.g., a “Eurodollar Borrowing”).
Section 1.03    Terms Generally. Unless otherwise specified therein, all terms defined in this Agreement shall have the defined meanings when used in any other Loan Document or any certificate or other document made or delivered pursuant hereto. The definitions of terms herein and in any other Loan Document or any certificate or other document made or delivered pursuant hereto shall apply equally to the singular and plural forms of the terms defined. Whenever the context may require, any pronoun used herein or in any other Loan Document or any certificate or other document made or delivered pursuant hereto shall include the corresponding masculine, feminine and neuter forms. The words “include”, “includes” and “including” when used herein or in any other Loan Document or any certificate or other document made or delivered pursuant hereto shall be deemed to be followed by the phrase “without limitation”. The word “will” when used herein or in any other Loan Document or any certificate or other document made or delivered pursuant hereto shall be construed to have the same meaning and effect as the word “shall”. Unless the context requires otherwise, when used herein or in any other Loan Document or any certificate or other document made or delivered pursuant hereto (a) any definition of or reference to any agreement, instrument or other document shall be construed as referring to such agreement, instrument or other document as from time to time amended, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth herein or in any other Loan Document), (b) any reference to any Person shall be construed to include such Person’s successors and assigns, (c) the words “herein”, “hereof” and “hereunder”, and words of similar import, shall be construed to refer to this Agreement, any other Loan Document or any certificate or other document made or delivered pursuant hereto, as the case may be, in its entirety and not to any particular provision hereof or thereof, (d) all references herein or in any other Loan Document or any certificate or other document made or delivered pursuant hereto, as the case may be, to Articles, Sections, Exhibits and Schedules shall be construed to refer to Articles and Sections of, and Exhibits and Schedules to, this Agreement or such other Loan Document or certificate or document, as the case may be and (e) the words “asset” and “property” shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts and contract rights.
Section 1.04    Accounting Terms; GAAP. Except as otherwise expressly provided herein, all terms of an accounting or financial nature shall be construed in accordance with GAAP, as in effect from time to time; provided that, if the Borrower notifies the Lender that the Borrower requests an amendment to any provision hereof to eliminate the effect of any change occurring after the date hereof in GAAP or in the application thereof on the operation of such provision, regardless of whether any such notice is given before or after such change in GAAP or in the application thereof, then such provision shall be interpreted on the basis of GAAP as in effect and applied 

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immediately before such change shall have become effective until such notice shall have been withdrawn or such provision amended in accordance herewith. Notwithstanding any other provision contained herein, all terms of an accounting or financial nature used herein shall be construed, and all computations of amounts and ratios referred to herein shall be made, without giving effect to any election under Financial Accounting Standards Board Accounting Standards Codification 825 (or any other Financial Accounting Standard having a similar result or effect) to value any Indebtedness or other liabilities of the Borrower or any Subsidiary at “fair value”, as defined therein.
ARTICLE II
THE CREDITS
Section 2.01    Term Loan. The Lender agrees, on the terms and conditions hereinafter set forth, to make a term loan (the “Term Loan”) to the Borrower, which Term Loan may, at the option of the Borrower, be made (a) in a single advance on the Closing Date or (b) to the extent that the full amount of the Term Loan is not fully borrowed on the Closing Date, on one or more occasions (which shall occur on a Business Day) thereafter on or prior to December 1, 2015, in an aggregate principal amount for the Term Loan not to exceed $395,000,000. Amounts repaid or prepaid in respect of the Term Loan may not be reborrowed.
Section 2.02    Borrowing Mechanics.
(a)    The Term Loan shall be made in dollars. Subject to Section 2.08, the Term Loan (or any portion thereof) may be comprised of Prime Rate Borrowings or Eurodollar Borrowings as the Borrower may request in accordance herewith; provided that there shall not at any time be more than a total of ten Eurodollar Borrowings outstanding.
(b)    Notwithstanding any other provision of this Agreement, the Borrower shall not be entitled to request, or to elect to convert or continue, any Eurodollar Borrowing if the Interest Period requested with respect thereto would end after the Maturity Date.
Section 2.03    Requests for Funding. To request a funding of any portion of the Term Loan, the Borrower shall notify the Lender of such request by telephone (a) in the case of a Eurodollar Borrowing, not later than 12:00 p.m., New York City time, three Business Days before the date of the proposed funding or (b) in the case of a Prime Rate Borrowing, not later than 12:00 p.m., New York City time, on the date of the proposed funding. Each such telephonic Borrowing Request shall be irrevocable and, if so requested by the Lender, shall be confirmed promptly by hand delivery or telecopy to the Lender of a written Borrowing Request. Each such telephonic or written Borrowing Request shall specify the following information in compliance with Section 2.02:
(i)    the aggregate amount of the requested funding;
(ii)    the date of such funding, which shall be a Business Day;
(iii)    whether the portion of the Term Loan to be funded is to be a Prime Rate Borrowing or a Eurodollar Borrowing;

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(iv)    in the case of a Eurodollar Borrowing, the initial Interest Period to be applicable thereto, which shall be a period contemplated by the definition of the term “Interest Period”; and
(v)    the location and number of the Borrower’s account to which funds are to be disbursed.
If no election as to the Type of Borrowing is specified, then the requested funding shall be a Prime Rate Borrowing. If no Interest Period is specified with respect to any requested Eurodollar Borrowing, then the Borrower shall be deemed to have selected an Interest Period of one month’s duration.
Section 2.04    Interest Elections.
(a)    Each Borrowing initially shall be of the Type specified in the applicable Borrowing Request and, in the case of a Eurodollar Borrowing, shall have an initial Interest Period as specified in such Borrowing Request. Thereafter, the Borrower may elect to convert such Borrowing to a different Type or to continue such Borrowing and, in the case of a Eurodollar Borrowing, may elect Interest Periods therefor, all as provided in this Section. The Borrower may elect different options with respect to different portions of the affected Borrowing.
(b)    To make an election pursuant to this Section, the Borrower shall notify the Lender of such election by telephone by the time that a Borrowing Request would be required under Section 2.03 if the Borrower were requesting a Borrowing of the Type resulting from such election to be made on the effective date of such election. Each such telephonic Interest Election Request shall be irrevocable and, if requested by the Lender, shall be confirmed promptly by hand delivery or telecopy to the Lender of a written Interest Election Request in a form approved by the Lender and signed by the Borrower.
(c)    Each telephonic and written Interest Election Request shall specify the following information in compliance with Section 2.02:
(i)    the Borrowing to which such Interest Election Request applies and, if different options are being elected with respect to different portions thereof, the portions thereof to be allocated to each resulting Borrowing (in which case the information to be specified pursuant to clauses (iii) and (iv) below shall be specified for each resulting Borrowing);
(ii)    the effective date of the election made pursuant to such Interest Election Request, which shall be a Business Day;
(iii)    whether the resulting Borrowing is to be a Prime Rate Borrowing or a Eurodollar Borrowing; and

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(iv)    if the resulting Borrowing is a Eurodollar Borrowing, the Interest Period to be applicable thereto after giving effect to such election, which shall be a period contemplated by the definition of the term “Interest Period”.
If any such Interest Election Request requests a Eurodollar Borrowing but does not specify an Interest Period, then the Borrower shall be deemed to have selected an Interest Period of one month’s duration.
(d)    If the Borrower fails to deliver a timely Interest Election Request with respect to a Eurodollar Borrowing prior to the end of the Interest Period applicable thereto, then, unless such Borrowing is repaid as provided herein, at the end of such Interest Period such Borrowing shall be converted to a Prime Rate Borrowing. Notwithstanding any contrary provision hereof, if an Event of Default has occurred and is continuing and the Lender so notifies the Borrower, then, so long as an Event of Default is continuing (i) no outstanding Borrowing may be converted to or continued as a Eurodollar Borrowing and (ii) unless repaid, each Eurodollar Borrowing shall be converted to a Prime Rate Borrowing at the end of the Interest Period applicable thereto.
Section 2.05    Repayment of Term Loan; Evidence of Debt.
(a)    The Borrower hereby unconditionally promises to pay to the Lender the then unpaid principal amount of the Term Loan on the Maturity Date.
(b)    The Lender shall maintain in accordance with its usual practice an account or accounts evidencing the indebtedness of the Borrower to the Lender resulting from the Term Loan, including the amounts of principal and interest payable and paid to the Lender from time to time hereunder.
(c)    The entries made in the accounts maintained pursuant to paragraph (b) of this Section shall be prima facie evidence of the existence and amounts of the obligations recorded therein; provided that the failure of the Lender to maintain such accounts or any error therein shall not in any manner affect the obligation of the Borrower to repay the Term Loan in accordance with the terms of this Agreement.
Section 2.06    Prepayment of Term Loan. The Borrower shall have the right at any time and from time to time to prepay the Term Loan in whole or in part, subject to at least three Business Days prior notice. Prepayments shall be accompanied by accrued interest to the extent required by Section 2.07.
Section 2.07    Interest. (a) The portion of the Term Loan comprising each Prime Rate Borrowing shall bear interest at the Prime Rate plus the Applicable Rate.
(b)    The portion of the Term Loan comprising each Eurodollar Borrowing shall bear interest at the LIBO Rate for the Interest Period in effect for such Borrowing plus the Applicable Rate.

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(c)    Notwithstanding the foregoing, if any principal of or interest on the Term Loan or any fee or other amount payable by the Borrower hereunder is not paid when due, whether at stated maturity, upon acceleration or otherwise, such overdue amount shall bear interest, after as well as before judgment, at a rate per annum equal to (i) in the case of overdue principal of the Term Loan, 2.00% plus the rate otherwise applicable to the Term Loan as provided in the preceding paragraphs of this Section or (ii) in the case of any other amount, 2.00% plus the rate applicable to Prime Rate Borrowings as provided in paragraph (a) of this Section.
(d)    Accrued interest on the Term Loan shall be payable in arrears on each Interest Payment Date and on the Maturity Date; provided that (i) interest accrued pursuant to paragraph (c) of this Section shall be payable on demand, (ii) in the event of any repayment or prepayment of any Borrowing comprising part of the Term Loan, accrued interest on the principal amount repaid or prepaid shall be payable on the date of such repayment or prepayment and (iii) in the event of any conversion of any Eurodollar Borrowing prior to the end of the current Interest Period therefor, accrued interest on such Eurodollar Borrowing shall be payable on the effective date of such conversion.
(e)    All interest hereunder shall be computed on the basis of a year of 360 days, except that interest computed by reference to the Prime Rate shall be computed on the basis of a year of 365 days (or 366 days in a leap year), and in each case shall be payable for the actual number of days elapsed (including the first day but excluding the last day). The applicable Prime Rate or LIBO Rate shall be determined by the Lender, and such determination shall be conclusive absent manifest error.
Section 2.08    Alternate Rate of Interest. If prior to the commencement of any Interest Period for a Eurodollar Borrowing the Lender determines (which determination shall be conclusive absent manifest error) that adequate and reasonable means do not exist for ascertaining the LIBO Rate for such Interest Period, then the Lender shall give notice thereof to the Borrower by telephone or telecopy as promptly as practicable thereafter and, until the Lender notifies the Borrower that the circumstances giving rise to such notice no longer exist, (i) any Interest Election Request that requests the conversion of any Borrowing to, or continuation of any Borrowing as, a Eurodollar Borrowing shall be ineffective, and (ii) if any Borrowing Request requests a Eurodollar Borrowing, such Borrowing shall be made as a Prime Rate Borrowing; provided that if the circumstances giving rise to such notice affect only one Type of Borrowings, then the other Type of Borrowings shall be permitted.
Section 2.09    Taxes. (a) Any and all payments by or on account of any obligation of the Borrower hereunder shall be made free and clear of and without deduction for any Indemnified Taxes or Other Taxes; provided that if the Borrower shall be required to deduct any Indemnified Taxes or Other Taxes from such payments, then (i) the sum payable shall be increased as necessary so that after making all required deductions (including deductions applicable to additional sums payable under this Section) the Lender receives an amount equal to the sum it would have received had no such deductions been made, (ii) the Borrower shall make such deductions and (iii) the Borrower shall pay the full amount deducted to the relevant Governmental Authority in accordance with applicable law.

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(b)    In addition, the Borrower shall pay any Other Taxes to the relevant Governmental Authority in accordance with applicable law.
Section 2.10    Payments Generally. (a) Except with respect to Excluded Taxes, the Borrower shall make each payment required to be made by it hereunder (whether of principal, interest or other amounts payable under this Agreement) prior to 2:00 p.m., New York City time, on the date when due, in immediately available funds, without deduction, setoff or counterclaim (other than any deduction or setoff in respect of Excluded Taxes as explicitly described herein). Any amounts received after such time on any date may, in the discretion of the Lender, be deemed to have been received on the next succeeding Business Day for purposes of calculating interest thereon. All such payments shall be made to the Lender at its offices set forth in Section 9.01. If any payment hereunder shall be due on a day that is not a Business Day, the date for payment shall be extended to the next succeeding Business Day, and, in the case of any payment accruing interest, interest thereon shall be payable for the period of such extension. All payments hereunder shall be made in dollars.
(b)    If at any time insufficient funds are received by and available to the Lender to pay fully all amounts of principal, interest and fees then due hereunder, such funds shall be applied (i) first, towards payment of interest and fees then due hereunder and (ii) second, towards payment of principal then due hereunder.
ARTICLE III 
REPRESENTATIONS AND WARRANTIES
Each of the Borrower and each Guarantor, with respect to representations and warranties pertaining to it, represents and warrants to the Lender, as of the Closing Date, and thereafter as of the date of each advance of any portion of the Term Loan not borrowed on the Closing Date, that:
Section 3.01    Corporate Existence and Power. Each Loan Party is a corporation, partnership or limited liability company duly incorporated or organized, as applicable, validly existing and in good standing under the laws of its jurisdiction of organization, and has all organizational powers and all material governmental licenses, authorizations, consents and approvals required to carry on its business as now conducted.
Section 3.02    Corporate and Governmental Authorization; Contravention. The execution, delivery and performance by each Loan Party of this Agreement and any other Loan Documents to which it is a party (a) are within its organizational powers, have been duly authorized by all necessary organizational action, (b) require no consent or approval of, or other action by or in respect of, or registration or filing with, any Governmental Authority, (c) do not contravene, or constitute a breach or a default under, any provision of its Organization Documents, (d) do not contravene any applicable Law or regulation, and (e) will not violate or result in a default under any indenture, agreement or other instrument binding upon any Loan Party or any of its Restricted Subsidiaries or by which any property or asset of any Loan Party or any of its Restricted Subsidiaries is bound, except, in the case of clauses (b), (d) and (e) as would not reasonably be expected to result in a Material Adverse Effect.

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Section 3.03    Enforceability. The Loan Documents to which it is a party constitute the legal, valid and binding obligations of such Loan Party, enforceable against such Loan Party in accordance with their respective terms, except as may be limited by applicable bankruptcy, moratorium, insolvency or similar Laws affecting the rights of creditors generally and general principles of equity.
Section 3.04    Financial Information.
(a)    The Initial Financial Statements present fairly, in all material respects, the combined financial position and combined results of operations and cash flows of the Borrower as of such dates and for such periods in conformity with GAAP and were prepared in good faith based on the assumptions that were believed to be reasonable in light of the then-existing conditions (subject to the proviso that it is understood that such pro forma financial statements are based upon professional opinions, estimates and adjustments and that the Loan Parties do not warrant that such opinions, estimates and adjustments will ultimately prove to have been accurate).
(b)    Beginning with the initial delivery of the financial information required under Section 5.01(a) and Section 5.01(b), the financial information delivered to the Lender pursuant to such sections fairly presents, in all material respects, in conformity with GAAP, the consolidated financial position of the Borrower and its consolidated Subsidiaries as of such date and their consolidated results of operations and cash flows as of such date (subject, in the case of interim statements, to normal year-end adjustments and the absence of footnotes).
Section 3.05    Litigation; No Material Adverse Effect.
(a)    As of the Closing Date, there is no litigation, arbitration or governmental investigation, proceeding or inquiry pending against or, to the knowledge of the Borrower, threatened in writing against or affecting the Borrower or any Restricted Subsidiary as to which there is a reasonable possibility of an adverse determination (i) which could reasonably be expected to have a material adverse effect on the business, assets, financial condition, or operations of the Borrower and its Restricted Subsidiaries, taken as a whole, or (ii) which seeks to prevent, enjoin or delay the making of the Term Loan hereunder.
(b)    As of the Closing Date, since December 31, 2014, there has been no Material Adverse Effect.
Section 3.06    Environmental Matters. Except with respect to any matter that, individually or in the aggregate, would not reasonably be expected to result in a Material Adverse Effect, neither the Borrower nor any of its Restricted Subsidiaries (a) has failed to comply with any applicable Environmental Law or to obtain, maintain or comply with any permit, license or other approval required under any applicable Environmental Law, (b) has become subject to any Environmental Liability, (c) has received notice of any claim with respect to any Environmental Liability or (d) knows of any basis for any Environmental Liability. This Section 3.06 is the sole and exclusive representation and warranty of the Loan Parties with respect to Environmental Laws, Environmental Liabilities and Hazardous Materials contained in this Article III and no other 

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provision hereof shall be construed to constitute such a representation or warranty; provided that the foregoing does not limit the provisions of Section 3.04 or Section 3.05.
Section 3.07    Taxes. (a) The Borrower and its Restricted Subsidiaries have filed all material United States federal income tax returns and all other material tax returns have been filed on or before the applicable due date (as such due date may have been timely extended), and (b) all taxes due pursuant to such returns or pursuant to any assessment received by the Borrower or any Restricted Subsidiary have been paid (other than those which are currently being contested in good faith by appropriate proceedings or to the extent that the failure to do so could not reasonably be expected to result in a Material Adverse Effect or materially adversely affect the performance by the Borrower of its payment obligations under this Agreement or any Notes). The charges, accruals and reserves on the books of the Borrower and its Restricted Subsidiaries in respect of taxes or other governmental charges are, in the opinion of the Borrower, adequate.
Section 3.08    Solvency. As of the Closing Date, the Borrower and its consolidated Subsidiaries taken as a whole are, and after the consummation of the Transactions will be, Solvent.
Section 3.09    Compliance with Laws. Such Loan Party and its Restricted Subsidiaries are in compliance with all applicable Laws, except to the extent that the failure to comply therewith would not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect.
Section 3.10    Title to Properties. As of the Closing Date, each Loan Party and each of its Restricted Subsidiaries has good title to, or valid leasehold interests in, all its real and personal property necessary or otherwise material to the business of the Loan Parties and their respective Restricted Subsidiaries, taken as a whole, except for Liens permitted hereby and except where the failure to have such title or leasehold interest would not reasonably be expected to result in a Material Adverse Effect.
ARTICLE IV
CONDITIONS
Conditions to Effectiveness of this Agreement (Closing Date). This Agreement shall be effective upon satisfaction of the following conditions precedent set forth in this Article 4:
(a)    Loan Documents. The Lender shall have received (i) this Agreement, executed and delivered by an Authorized Officer of each Loan Party and (ii) a Note substantially in the form of Exhibit A hereto and executed by an Authorized Officer of the Borrower.
(b)    Representations and Warranties; Defaults. As of the Closing Date, (i) the accuracy of each of the representations and warranties made by each Loan Party in this Agreement in all material respects on and as of such date, provided that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof and (ii) the absence of any Default or Event of Default.

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(c)    Approvals. All material governmental and third party approvals necessary in connection with the Transactions shall have been obtained and be in full force and effect.
ARTICLE V
AFFIRMATIVE COVENANTS
From and after the Closing Date and until the principal of and interest on the Term Loan and all fees payable hereunder shall have been paid in full, the Borrower covenants and agrees with the Lender that:
Section 5.01    Financial Reporting Requirements. The Borrower will:
(a)    make available its Form 10-K via the EDGAR system of the SEC (“EDGAR”) on the internet as soon as available and in any event within 90 days after the end of each fiscal year of the Borrower, which will in each case include an audited consolidated balance sheet of the Borrower and its Subsidiaries as of the end of such fiscal year and the related audited consolidated statements of income, cash flows and changes in partners’ capital for such fiscal year, setting forth in each case in comparative form the figures for the previous fiscal year of the Borrower, all reported on in a manner acceptable to the SEC by KPMG LLP or other independent public accountants of nationally recognized standing (without a “going concern” or like qualification or exception and without any qualification or exception as to the scope of such audit);
(b)    make available its Form 10-Q via EDGAR on the internet as soon as available and in any event within 60 days after the end of each of the first three quarters of each fiscal year of the Borrower, which will, in each case, include, a consolidated balance sheet of the Borrower and its Subsidiaries, as of the end of such quarter and the related (i) consolidated statement of income for such quarter and for the portion of the Borrower’s fiscal year ended at the end of such quarter, and (ii) consolidated statement of cash flows for the portion of the Borrower’s fiscal year ended at the end of such quarter, setting forth in each case in comparative form (A) for the consolidated balance sheet, the figures as of the end of the Borrower’s previous fiscal year, (B) for the consolidated statement of income, the figures for the corresponding quarter and the corresponding portion of the Borrower’s previous fiscal year and (C) for the consolidated statement of cash flows, the figures for the corresponding portion of the Borrower’s previous fiscal year, and the making available of such financial statements shall constitute a certification (subject to normal year-end adjustments) as to fairness of presentation and GAAP;
(c)    furnish to the Lender within 10 days of making available via EDGAR each set of financial statements referred to in clauses (a) and (b) above, a certificate of a Financial Officer of the Borrower (i) stating whether there exists on the date of such certificate any Default or Event of Default and, if any Default or Event of Default then exists, setting forth the details thereof and the action which the Borrower is taking or proposes to take with respect thereto, and (ii) setting forth reasonably detailed calculations demonstrating compliance with Section 6.08 and from and after the Investment Grade Rating Date, Section 6.03(b);
(d)    furnish to the Lender within 10 days of making available via EDGAR the financial statements referred to in clauses (a) and (b) above, a certificate of a Financial Officer of 

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the Borrower certifying which Subsidiaries of the Borrower are Material Subsidiaries (which certificate may be combined with the certificate being delivered pursuant to clause (c) above on such date);
(e)    furnish to the Lender from time to time such additional information regarding the operations, business affairs and financial condition of the Borrower or any Subsidiary, or compliance with the terms of this Agreement, as the Lender may reasonably request; and
(f)    promptly upon the Borrower first obtaining a Designated Rating, provide to the Lender written notice thereof.
Section 5.02    Notices. The Borrower will promptly furnish, or cause to be furnished, to the Lender, notice of: (a the occurrence of any (i) Default or (ii) Event of Default hereunder; and (b) the institution of any litigation or proceeding involving it or a Restricted Subsidiary that has had or is reasonably expected to have a Material Adverse Effect (whether or not the claim asserted therein is considered to be covered by insurance). Each notice delivered under this Section 5.02 shall be accompanied by a statement of a Financial Officer of the Borrower setting forth the details of the event or development requiring such notice and any action taken or proposed to be taken with respect thereto.
Section 5.03    Existence; Conduct of Business. The Borrower will, and will cause each Required Guarantor to, do or cause to be done all things necessary to preserve, renew and keep in full force and effect its legal existence and the rights, licenses, permits, privileges and franchises necessary or desirable in the normal conduct of its business; provided that the foregoing shall not prohibit any merger or consolidation of the Borrower permitted under Section 6.02 or any merger, consolidation, liquidation or dissolution of any Subsidiary that is not otherwise prohibited by the terms of this Agreement; and provided further, that neither the Borrower nor any of its Restricted Subsidiaries shall be required to preserve, renew or keep in full force and effect any right, license, permit, privilege or franchise to the extent that the failure to do so would not reasonably be expected to have a Material Adverse Effect.
Section 5.04    Payment of Taxes. The Borrower will pay and discharge, and will cause each Material Subsidiary to pay and discharge, at or before maturity, all their respective material tax liabilities, except where the same may be contested in good faith by appropriate proceedings, and will maintain and will cause each Material Subsidiary to maintain, in accordance with GAAP, appropriate reserves for the accrual of any of the same.
Section 5.05    Maintenance of Property; Insurance. The Borrower will keep, and will cause each Material Subsidiary to keep, all property useful and necessary in its business in good working order and condition, ordinary wear and tear excepted; will maintain, and will cause each Material Subsidiary to maintain (either in the name of the Borrower or in such Material Subsidiary’s own name), with financially sound and reputable insurance companies, insurance on all their property in at least such amounts and against such risks as are usually insured against in the same general area by companies of similar size and established repute engaged in the same or a similar business.

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Section 5.06    Compliance with Laws. The Borrower will comply, and cause each Restricted Subsidiary to comply, with all applicable laws, ordinances, rules, regulations, and requirements of any Governmental Authority, except where the failure to do so, individually or in the aggregate, would not reasonably be expected to result in a Material Adverse Effect. 
Section 5.07    Books and Records; Inspection Rights. The Borrower will keep, and will cause each Material Subsidiary to keep, proper books of record and account in which complete and accurate entries are made of its financial and business transactions to the extent required by GAAP.
Section 5.08    Use of Proceeds. The proceeds of the Term Loan will be used for general partnership, corporate or company purposes, as applicable, of the Loan Parties and their Subsidiaries, including, without limitation, acquisitions.
Section 5.09    First Tier Subsidiaries; Additional Guarantors.
(a)    In the event any Material Subsidiary is or becomes a First Tier Subsidiary, the Borrower will, within 30 days thereof, cause such Material Subsidiary to become a party to this Agreement and guarantee the Obligations by executing and delivering to the Lender a Guarantee Joinder substantially in the form of Exhibit B.
(b)    Any Restricted Subsidiary may, at its election, become a Guarantor by delivery to the Lender of a Guarantee Joinder.
(c)    Upon delivery of a Guarantee Joinder by a Restricted Subsidiary, notice of which is hereby waived by each Loan Party, such Restricted Subsidiary shall be a Guarantor and shall be a party hereto (including being bound by the provisions of Article VIII) as if an original signatory hereto. Each Loan Party expressly agrees that its obligations arising hereunder shall not be affected or diminished by the addition or release of any other Loan Party hereunder. This Agreement shall be fully effective as to each Loan Party that is or becomes a party hereto regardless of whether any other Person becomes or fails to become or ceases to be a Loan Party hereunder.
Section 5.10    Designation and Conversion of Restricted and Unrestricted Subsidiaries; Certain other Matters Pertaining to Unrestricted Subsidiaries.
(a)    Unless designated after the Closing Date in writing to the Lender pursuant to this Section, any Person that becomes a Subsidiary of the Borrower or any of its Restricted Subsidiaries shall be classified as a Restricted Subsidiary.
(b)    The Borrower may designate a Subsidiary (other than the Initial Guarantor or any Required Guarantor) as an Unrestricted Subsidiary if (i) the requirements set forth in the definition of “Unrestricted Subsidiary” have been met with respect to such Subsidiary, (ii) immediately before and after such designation, no Default or Event of Default exists or would exist, (iii) after giving effect to such designation on a pro forma basis, the Borrower and its Subsidiaries would have been in compliance with all of the covenants contained in this Agreement, including Section 6.08, as of the end of the most recent fiscal quarter, (iv) a certificate of a Financial 

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Officer is delivered to the Lender as provided in the definition of “Unrestricted Subsidiary”, and (v) no Subsidiary may be designated as an Unrestricted Subsidiary if it will be treated as a “restricted subsidiary” for purposes of any indenture, credit agreement, or similar agreement.
(c)    The Borrower may designate an Unrestricted Subsidiary to be a Restricted Subsidiary if (i) immediately before and after such designation, no Default or Event of Default exists or would exist, (ii) if such Unrestricted Subsidiary has outstanding Indebtedness, Liens and/or Attributable Debt under any Sale/Leaseback Transaction, it would be permitted to incur such Indebtedness, Debt and/or Attributable Debt pursuant to Section 6.01 and Section 6.03, (iii) after giving effect to such designation on a pro forma basis, the Borrower and its Subsidiaries would have been in compliance with all of the covenants contained in this Agreement, including Section 6.08, as of the end of the most recent fiscal quarter, (iv) the representations and warranties with respect to such Subsidiary set forth in Article III of this Agreement (other than the representations and warranties that are made only as of the Closing Date) are true and correct in all material respects with respect to such Subsidiary after giving effect to such designation (provided that the foregoing materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof) and (v) the Borrower has provided to the Lender a certificate of a Financial Officer to the effect that each of the foregoing conditions has been satisfied. Immediately after such designation, such Subsidiary shall cease to be an Unrestricted Subsidiary. The designation of any Unrestricted Subsidiary as a Restricted Subsidiary shall constitute the incurrence at the time of designation of any Indebtedness, Liens and Attributable Debt under Sale/Leaseback Transactions of such Subsidiary existing at such time.
(d)    The Borrower shall cause all Subsidiaries of an Unrestricted Subsidiary to satisfy the requirements set forth in the definition of “Unrestricted Subsidiaries” and such Subsidiaries shall also be Unrestricted Subsidiaries. The Borrower will not permit any Unrestricted Subsidiary to hold any Equity Interests in, or any Indebtedness of, the Borrower or any Restricted Subsidiary. Neither the Borrower nor any Restricted Subsidiary shall make any investment in (including any acquisition of Equity Interests or loans, advances or capital contributions to) an Unrestricted Subsidiary if a Default or Event of Default exists immediately before or immediately after making such investment.
(e)    If, at any time, any Unrestricted Subsidiary would fail to meet the requirements of the definition of Unrestricted Subsidiary or the applicable requirements set forth in this Section, (i) it will thereafter cease to be an Unrestricted Subsidiary for purposes of this Agreement, (ii) any Indebtedness, Liens and Attributable Debt under Sale/Leaseback Transactions of such Subsidiary will be deemed to be incurred by a Restricted Subsidiary as of such date, and (iii) the Borrower shall notify the Lender, pursuant to a certificate or other notice given by a Financial Officer, that such Unrestricted Subsidiary is no longer an Unrestricted Subsidiary.
(f)    The Borrower will not permit at any time the aggregate Net Tangible Assets of all Unrestricted Subsidiaries to exceed 20% of Consolidated Net Tangible Assets.
Section 5.11    Employee Matters. The Borrower shall notify the Lender in writing at least 30 days prior to hiring any employees. Upon such notification, the Borrower shall execute and deliver to the Lender an amendment to this Agreement incorporating provisions that are 

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substantially identical to those in Section 3.06 and clause (i) of Article VII of the Revolving Credit Agreement (including the defined terms used in such provisions).

ARTICLE VI
NEGATIVE COVENANTS
From and after the Closing Date and until the principal of and interest on the Term Loan and all fees payable hereunder have been paid in full, each Loan Party covenants and agrees with the Lender that:
Section 6.01    Liens. Neither the Borrower nor any Restricted Subsidiary will create, assume or suffer to exist any Lien on any asset now owned or hereafter acquired by it, except:
(a)    Prior to the Investment Grade Rating Date:
(i)    Liens described in Section 6.01(b)(vi) through (vii), and Section 6.01(b)(ix) through (xix);
(ii)    Liens under any Sale/Leaseback Transaction permitted under Section 6.03 (a)(iii);
(iii)    Liens on cash and cash equivalents securing Hedging Obligations permitted under the Revolving Credit Agreement;
(iv)    Liens not otherwise permitted by the other clauses of this Section 6.01(a) securing Indebtedness or other obligations of the Loan Parties or any of their respective Restricted Subsidiaries, provided that the sum, without duplication, of (1) the aggregate principal amount of all such Indebtedness and obligations plus (2) the outstanding Attributable Debt under all Sale/Leaseback Transactions of the Loan Parties and Restricted Subsidiaries permitted under Section 6.03(a)(iii), does not exceed an amount equal to 15% of Consolidated Net Tangible Assets at the time of creation, incurrence or assumption of such Lien or such Attributable Debt, as applicable; and
(v)    Liens existing on the Closing Date.
(b)    From and after the Investment Grade Rating Date:
(i)    any Lien existing on any asset of any Person at the time such Person becomes a Restricted Subsidiary of the Borrower and not created in contemplation of such event, provided that such Lien attaches only to such asset and proceeds thereof;
(ii)    any Lien on any asset securing Indebtedness (including Liens in respect of Capital Lease Obligations) incurred or assumed for the purpose of financing all or any part of the cost of acquiring, constructing, repairing or improving such asset, provided that (i) such Lien attached to such asset concurrently with or within 90 days after the acquisition 

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thereof or the date of completion of such construction, repair or improvement, and (ii) all such Liens attach only to the assets purchased, constructed, repaired or improved with the proceeds of the Indebtedness secured thereby and improvements, accessions, general intangibles and proceeds related thereto;
(iii)    any Lien on any asset of any Person existing at the time such Person is merged or consolidated with or into the Borrower or a Restricted Subsidiary and not created in contemplation of such event, provided that such Lien attaches only to such asset and proceeds thereof;
(iv)    any Lien existing on any asset prior to the acquisition thereof by the Borrower or a Restricted Subsidiary and not created in contemplation of such acquisition, provided that such Lien attaches only to such asset and proceeds thereof;
(v)    any Lien arising out of the refinancing, extension, renewal or refunding of any Indebtedness secured by any Lien permitted by any of the foregoing clauses of this Section 6.01(b), provided that the principal amount of such Indebtedness is not increased (other than by amounts incurred to pay the costs of such refinancing, extension, renewal or refunding and any premiums paid in connection therewith) and such Lien does not attach to any additional assets;
(vi)    Liens in favor of (x) the Administrative Agent securing Indebtedness or other obligations existing pursuant to the Revolving Credit Agreement and Liens in favor of a Credit Party (as defined in the Revolving Credit Agreement) on cash or cash equivalents required by the terms of the Revolving Credit Agreement and (y) the Lender securing Indebtedness or other obligations pursuant to this Agreement;
(vii)    Liens to secure Indebtedness incurred or assumed in connection with pollution control, industrial revenue bond or similar types of financing, and Liens on property in favor of the United States or any state thereof, or any department, agency, instrumentality or political subdivision of any such jurisdiction, to secure Indebtedness incurred for the purpose of financing all or any part of the purchase price or cost of constructing, repairing or improving the property subject thereto;
(viii)    Liens granted on accounts receivable or other rights to payment and related assets in connection with Securitization Transactions permitted by Section 6.03(b)(ii);
(ix)    Liens on precious metals catalysts in connection with lease transactions and Liens under any Sale/Leaseback Transaction, in each case to the extent permitted by this Agreement;
(x)    Liens on cash collateral granted to an Issuing Bank (as defined in the Revolving Credit Agreement) in connection with the replacement of such Issuing Bank under the Revolving Credit Agreement;

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(xi)    Liens for taxes that (i) are not yet due, (ii) are not more than sixty (60) days past due and not subject to penalties for non-payment, or (iii) are being contested in good faith and by appropriate proceedings diligently conducted, if adequate reserves with respect thereto are maintained on the books of the applicable Person in accordance with GAAP;
(xii)    carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s, landlord’s, or other similar types of Liens arising in the ordinary course of business securing amounts which are not overdue for a period of more than 60 days or which are being contested in good faith and by appropriate proceedings diligently conducted, if adequate reserves with respect thereto are maintained on the books of the applicable Person;
(xiii)    pledges or deposits in the ordinary course of business in connection with workers’ compensation, unemployment insurance and other social security legislation, other than any Lien imposed by the Employee Retirement Income Security Act of 1974, as amended from time to time; 
(xiv)    Liens to secure the performance of bids, trade contracts and leases (other than Indebtedness), statutory obligations, surety and appeal bonds, performance bonds and other obligations of a like nature incurred in the ordinary course of business;
(xv)    easements, rights-of-way, restrictions and other similar encumbrances affecting real property which do not in any case materially detract from the value of the property subject thereto or materially interfere with the ordinary conduct of the business of the applicable Person;
(xvi)    Liens securing judgments for the payment of money not constituting an Event of Default under clause (g) of Article VII;
(xvii)    Liens in favor of banks having a right of setoff, revocation, refund or chargeback with respect to money or instruments of the Borrower or any of its Restricted Subsidiaries on deposit with or in the possession of such bank, in each case in the ordinary course of business;
(xviii)    customary netting and offset provisions in Hedging Agreements;
(xix)    Liens on Equity Interests in an Unrestricted Subsidiary to secure Non-Recourse Debt on which such Unrestricted Subsidiary is an obligor; and
(xx)    Liens not otherwise permitted by the foregoing clauses of this Section 6.01(b) securing Indebtedness and Hedging Obligations, provided that Priority Debt shall not exceed the amount permitted by Section 6.03(b)(i) as of the last day of any fiscal quarter (beginning with the last day of the fiscal quarter in which the Investment Grade Rating Date occurs).

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Section 6.02    Fundamental Changes; Dispositions.
(a)    A Loan Party will not (i) consolidate or merge with or into any other Person or (ii) sell, lease or otherwise transfer (in one transaction or in a series of transactions) all or substantially all of its assets to any other Person; provided that (A) any Person may consolidate or merge with or into the Borrower in a transaction in which the Borrower is the surviving Person; (B) any Loan Party (other than the Borrower) may merge into or consolidate with or sell, lease or otherwise transfer all or substantially all of its assets to (x) the Borrower or (y) a Restricted Subsidiary, provided that any such merger, consolidation, sale, lease or other transfer by the Initial Guarantor pursuant to this clause (y) shall be with, into or to a Guarantor or a Restricted Subsidiary that becomes a Guarantor contemporaneously with such merger, consolidation, sale, lease or other transfer; and (C) any Loan Party (other than the Borrower) may merge into, or consolidate with, any Person other than the Borrower or a Restricted Subsidiary if (x) such Loan Party is the surviving entity or (y) such other Person is the surviving entity and becomes a Restricted Subsidiary and a Guarantor contemporaneously with such merger or consolidation.
(b)    Upon the occurrence and during the continuance of a Default or Event of Default, the Borrower will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, convey, sell, transfer, or otherwise dispose of assets (including interests in any Person) in any transaction or series of related transactions for consideration in excess of $5,000,000; provided, that, notwithstanding the foregoing and subject to Section 6.02(a) above, the Borrower and its Restricted Subsidiaries may enter into (i) sales of inventory in the ordinary course of business, (ii) leases of transportation capacity, storage capacity, processing capacity, and marine and/or dock usage capacity, in the ordinary course of business, (iii) conveyances, sales, transfers, or other dispositions of obsolete, surplus or unusable equipment or equipment no longer used or useful in their respective businesses, (iv) conveyances, sales, transfers and other dispositions between or among the Borrower and/or its Restricted Subsidiaries and (v) sales of receivables in connection with any Securitization Transaction permitted hereby.
Section 6.03    Indebtedness; Securitization Transactions; Sale/Leaseback Transactions. 
(a)    Prior to the Investment Grade Rating Date:
(i)    Indebtedness. No Loan Party will, nor will it permit its Restricted Subsidiaries to, create, incur, assume or permit to exist any Indebtedness, except:
(A)    Indebtedness (x) under this Agreement and (y) under the Revolving Credit Agreement and the Loan Documents defined therein;
(B)    Indebtedness of a Loan Party owing to another Loan Party or a Restricted Subsidiary of a Loan Party;
(C)    other Indebtedness of the Loan Parties and their Restricted Subsidiaries in an aggregate principal amount not to exceed at any time outstanding, when added to the sum of (1) the outstanding amount of Attributable Debt under all 

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Sale/Leaseback Transactions of the Loan Parties and their Restricted Subsidiaries permitted under Section 6.03(a)(iii) plus (2) the outstanding principal amount of all Indebtedness of the Loan Parties under the Loan Documents, an amount equal to 25% of Consolidated Net Tangible Assets plus the Aggregate Commitment Amount (as defined in the Revolving Credit Agreement) in effect at the time of the incurrence of such Indebtedness;
(D)    Indebtedness of a Loan Party or any Restricted Subsidiary as an account party in respect of trade letters of credit;
(E)    Indebtedness of a Loan Party owing to Valero Energy Corporation or any of its Subsidiaries; and
(F)    Indebtedness existing on the Closing Date.
(ii)    Securitization Transactions. The Borrower will not, and will not permit any of its Restricted Subsidiaries to, enter into any Securitization Transaction.
(iii)    Sale/Leaseback Transactions. A Loan Party will not, and will not permit any Restricted Subsidiary to, enter into or incur any Attributable Debt under any Sale/Leaseback Transaction unless, after giving effect to such Sale/Leaseback Transaction, the sum, without duplication, of (A) the aggregate amount of Attributable Debt under all Sale/Leaseback Transactions of the Loan Parties and their Restricted Subsidiaries, plus (B) the outstanding principal amount of all Indebtedness of the Loan Parties and their Restricted Subsidiaries secured by liens permitted by Section 6.01(a)(iv), does not exceed an amount equal to 15% of Consolidated Net Tangible Assets at the time of consummation of such Sale/Leaseback Transaction.
(b)    From and after the Investment Grade Rating Date:
(i)    Priority Debt. The Borrower shall not permit the outstanding principal amount of Priority Debt, as of the last day of any fiscal quarter, beginning with the last day of the fiscal quarter in which the Investment Grade Rating Date occurs, to exceed an amount equal to 15% of Consolidated Net Tangible Assets as of such date. As used herein, “Priority Debt” means:
(A)    the aggregate outstanding principal amount of secured Indebtedness and the aggregate amount of secured Hedging Obligations of the Borrower and its Restricted Subsidiaries; provided that Priority Debt shall not include Indebtedness secured by:
(1)    Liens existing on any asset transferred by Valero Energy Corporation or a subsidiary of Valero Energy Corporation to the Borrower or a Restricted Subsidiary and Liens existing on any asset of any Person the ownership of which is transferred by Valero Energy Corporation or a subsidiary of Valero Energy Corporation to the Borrower or a Restricted 

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Subsidiary (collectively, “Transferred Liens”), to the extent that the aggregate outstanding principal amount of Indebtedness secured by such Liens does not exceed $10,000,000; or
(2)    (I) Liens permitted pursuant to Section 6.01(b)(i) on assets of Persons that become Restricted Subsidiaries of the Borrower after the Closing Date (and proceeds thereof);
(II)    Liens permitted pursuant to Section 6.01(b)(ii) on assets purchased, constructed, repaired or improved by the Borrower or a Restricted Subsidiary after the Closing Date (and improvements, accessions, general intangibles and proceeds related thereto) securing Indebtedness incurred or assumed by the Borrower or such Restricted Subsidiary after the Closing Date for the purpose of financing all or any part of the cost of acquiring, constructing, repairing or improving such assets;
(III)    Liens permitted pursuant to Section 6.01(b)(iii) on assets of a Person merged or consolidated with or into the Borrower or a Restricted Subsidiary after the Closing Date (and proceeds thereof);
(IV)    Liens permitted pursuant to Section 6.01(b)(iv) on assets acquired by the Borrower or a Restricted Subsidiary after the Closing Date (and proceeds thereof);
(V)    Liens arising out of the refinancing, extension, renewal or refunding of any Indebtedness secured by any Lien permitted by any of the foregoing clauses of this Section 6.03(b)(i), provided that the principal amount of such Indebtedness is not increased (other than by amounts incurred to pay the costs of such refinancing, extension, renewal or refunding and any premiums paid in connection therewith) and such Lien does not attach to any additional assets;
(VI)    Liens permitted pursuant to Section 6.01(b)(vi);
(VII)    Liens permitted pursuant to Section 6.01(b)(vii) on assets purchased, constructed, repaired or improved by the Borrower or a Restricted Subsidiary after the Closing Date for the purposes of financing all or part of the price or cost of constructing, repairing or improving such property; 
(VIII)    Liens permitted pursuant to Section 6.01(b)(viii);
(IX)    Liens permitted pursuant to Section 6.01(b)(ix);
(X)    Liens permitted pursuant to Section 6.01(b)(x); and
(XI)    Liens permitted pursuant to Section 6.01(b)(xix); plus

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(B)    Attributable Debt of the Borrower and its Restricted Subsidiaries in respect of Sale/Leaseback Transactions to the extent that such Attributable Debt exceeds $100,000,000, plus
(C)    the aggregate outstanding principal amount of unsecured Indebtedness of Non-Guarantor Subsidiaries (other than Excluded Subsidiary Debt).
For the avoidance of doubt, to the extent that a Guarantee constitutes Priority Debt and the Indebtedness Guaranteed thereby also constitutes Priority Debt, the amount of Priority Debt outstanding at such time shall be calculated without duplication and shall include only the amount of such Guaranteed Indebtedness constituting Priority Debt and shall not include the amount of such Guarantee.
(ii)    Securitization Transactions. The Borrower will not permit the aggregate outstanding amount of Securitization Transactions to exceed $300,000,000 at any time.
Section 6.04    Restricted Payments. Prior to the Investment Grade Rating Date, the Borrower will not declare or make, directly or indirectly, any Restricted Payment, or incur any obligation (contingent or otherwise) to do so, during the occurrence and continuance of an Event of Default, or if an Event of Default would result therefrom.
Section 6.05    Changes in Organization Documents. No Loan Party shall make any changes to its Organization Documents that would reasonably be expected to have a Material Adverse Effect.
Section 6.06    Restrictive Agreements. The Borrower will not, and will not permit any Material Subsidiary to, enter into or permit to exist any agreement or other consensual arrangement that explicitly prohibits or restricts the ability of any Material Subsidiary to make any payment of any dividend or other distribution, direct or indirect, on account of any shares (or equivalent) of any class of Equity Interest of such Material Subsidiary, now or hereafter outstanding; provided that the foregoing shall not prohibit financial incurrence, maintenance and similar covenants that indirectly have the practical effect of prohibiting or restricting the ability of a Material Subsidiary to make such payments or provisions that require that a certain amount of capital be maintained, or prohibit the return of capital to shareholders above certain dollar limits; provided further, that the foregoing shall not apply to (i) prohibitions and restrictions imposed by law or by this Agreement, (ii) prohibitions and restrictions contained in, or existing by reason of, any agreement or instrument (A) existing on the Closing Date, (B) relating to any Indebtedness of, or otherwise to, any Person at the time such Person first becomes a Material Subsidiary, so long as such prohibition or restriction was not created in contemplation of such Person becoming a Material Subsidiary, and (C) effecting a renewal, extension, refinancing, refund or replacement (or successive extensions, renewals, refinancings, refunds or replacements) of Indebtedness or other obligations issued or outstanding under an agreement or instrument referred to in clauses (ii)(A) and (ii)(B) above, so long as the prohibitions or restrictions contained in any such renewal, extension, refinancing, refund or replacement agreement, taken as a whole, are not materially more restrictive than the prohibitions and restrictions contained in the original agreement or instrument, as determined in good faith by the Borrower or such Subsidiary, (iii) any prohibitions or restrictions 

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with respect to a Material Subsidiary imposed pursuant to an agreement that has been entered into in connection with a disposition of all or substantially all of the Equity Interests of such Subsidiary or assets thereof, (iv) restrictions contained in joint venture agreements, partnership agreements and other similar agreements with respect to a joint ownership arrangement restricting the disposition or distribution of assets or property of, or the activities of, such joint venture, partnership or other joint ownership entity, or any of such entity’s subsidiaries, if such restrictions are not applicable to the property or assets of any other entity and (v) any prohibitions or restrictions on any Securitization Entity pursuant to a Securitization Transaction permitted hereunder.
Section 6.07    Change in Nature of Business. The Borrower will not, and will not permit any Material Subsidiary to, engage in any material line of business substantially different from those lines of business conducted by the Borrower and its Material Subsidiaries on the Closing Date or any business substantially related or incidental thereto or logical extensions thereof (including (a) the oil and gas refining (including alternative fuels, fuels from biomaterials, development and exploration of gas-to-liquids technology (including actual utilization and production)), marketing, processing and distribution businesses, (b) the natural gas gathering, processing, and transport, and NGL fractionation and marketing, businesses, (c) the chemical manufacturing, processing and marketing businesses, and (d) the operation of crude oil and refined petroleum products pipelines, terminals and other transportation and logistics assets).
Section 6.08    Consolidated Leverage Ratio. The Borrower shall maintain, as of the last day of each fiscal quarter commencing with the last day of the first full fiscal quarter ending after the Closing Date, a Consolidated Leverage Ratio of no greater than (x) during an Acquisition Period, 5.5 to 1.0 and (y) at all other times, 5.0 to 1.0. For purposes of calculating compliance with the foregoing Consolidated Leverage Ratio, Consolidated EBITDA may include, at the Borrower’s option, any Qualified Project EBITDA Adjustments as provided in the definition thereof.
ARTICLE VII
EVENTS OF DEFAULT
If any of the following events (“Events of Default”) shall occur on or after the Closing Date:
(a)    the Borrower shall fail to pay (i) any principal of the Term Loan, or any Guarantor shall fail to make any payments due under the Subsidiary Guarantee, in each case, when and as the same shall become due and payable, whether at the due date thereof or at a date fixed for prepayment thereof or otherwise, in accordance with the terms hereof; (ii) any interest on the Term Loan, when and as the same shall become due and payable in accordance with the terms hereof, and such failure shall continue unremedied for a period of five Business Days; or (iii) any other amount payable hereunder, when and as the same shall become due and payable in accordance with the terms hereof, and such failure shall continue unremedied for a period of ten Business Days;
(b)    any representation or warranty made by the Loan Parties in Article III or in any certificate, financial or other statement furnished by the Loan Parties pursuant to this Agreement shall prove to have been incorrect in any material respect when made;

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(c)    the Borrower shall fail to perform or observe any of its covenants or agreements contained in Section 5.02(a)(ii), Section 5.03 (with respect to the existence of the Borrower), Section 5.08, or Article VI;
(d)    the Borrower or any Guarantor shall fail to perform or observe any other term, covenant or agreement contained in this Agreement or any other Loan Document, and any such failure shall remain unremedied for 30 days;
(e)    (i) the Borrower, any Guarantor, any Material Subsidiary or any combination thereof shall default beyond any applicable period of grace in any payment of principal of or interest on any Indebtedness (other than Securitization Indebtedness of any Securitization Entity) on which the Borrower, any Guarantor or any Material Subsidiary or any combination thereof is or are liable in an aggregate principal amount then outstanding of $50,000,000 or more or (ii) an event of default (other than a failure to pay principal or interest) as defined in any mortgage, indenture, agreement or instrument under which there may be issued, or by which there may be secured or evidenced, any such Indebtedness shall happen and shall result in such Indebtedness becoming or being declared due and payable prior to the date on which it could otherwise become due and payable;
(f)    the General Partner, the Borrower, any Guarantor or any Material Subsidiary shall (i) apply for or consent to the appointment of a receiver, trustee, liquidator or custodian or the like of itself or of all or a substantial part of its property, (ii) become unable, admit in writing its inability or fail to pay its debts generally as they become due, (iii) make a general assignment for the benefit of creditors, (iv) be adjudicated a bankrupt or insolvent, (v) commence a voluntary case under the federal bankruptcy laws of the United States of America or file a voluntary petition or answer seeking reorganization, an arrangement with creditors or an order for relief or seeking to take advantage of any insolvency law or file an answer admitting the material allegations of a petition filed against it in any bankruptcy, reorganization or insolvency proceeding, or action shall be taken by it for the purpose of effecting any of the foregoing, or (vi) if without the application, approval or consent of such Guarantor, the General Partner, the Borrower or any of its Material Subsidiaries, a proceeding shall be instituted in any court of competent jurisdiction, under any law relating to bankruptcy, insolvency, reorganization or relief of debtors, seeking in respect of such Guarantor, the General Partner, the Borrower or any of its Material Subsidiaries an order for relief or an adjudication in bankruptcy, reorganization, dissolution, winding up, liquidation, a composition or arrangement with creditors, a readjustment of debts, the appointment of a trustee, receiver, liquidator or custodian or the like of such Guarantor, the General Partner, the Borrower or such Material Subsidiaries or of all or any substantial part of its assets, or other like relief in respect thereof under any bankruptcy or insolvency law, and, if such proceeding is being contested by such Guarantor, the General Partner, the Borrower or such Material Subsidiaries in good faith, the same shall (A) result in the entry of an order for relief or any such adjudication or appointment or (B) continue undismissed or unstayed for any period of 90 consecutive days;
(g)    one or more judgments or decrees shall be entered against the Borrower, any of its Material Subsidiaries, any Guarantor or any combination thereof involving in the aggregate liability (not paid or fully covered by insurance) of $50,000,000 or more with respect to any Guarantor, the Borrower or any of its Material Subsidiaries and such judgments or decrees shall 

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not have been vacated, dismissed, discharged, stayed or bonded pending appeal within 45 days from the entry thereof;
(h)    a Change in Control shall occur; or
(i)    this Agreement, the Subsidiary Guarantee or any Note shall fail to be in full force and effect other than in accordance with its terms or as permitted hereby or any action is taken by the Borrower or any Guarantor to assert the invalidity or unenforceability of any of the foregoing;
then, and in every such event (other than an event with respect to the Borrower described in clauses (iv), (v) or (vi) of clause (f) of this Article), and at any time thereafter during the continuance of such event, the Lender may, by notice to the Borrower, take either or both of the following actions, at the same or different times: (i) refuse to fund any portion of the Term Loan not funded on the Closing Date (whereupon any commitment to fund such portion of the Term Loan shall immediately terminate), and (ii) declare the outstanding principal amount of the Term Loan to be due and payable in whole (or in part, in which case any principal not so declared to be due and payable may thereafter be declared to be due and payable), and thereupon the principal of the Term Loan so declared to be due and payable, together with accrued interest thereon and all fees and other obligations of the Borrower accrued hereunder, shall become due and payable immediately, without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Borrower; and in case of any event with respect to the Borrower described in clauses (iv), (v) or (vi) of clause (f) of this Article, any commitment to fund the portion of the Term Loan not funded on the Closing Date shall automatically terminate and the principal of the Term Loan then outstanding, together with accrued interest thereon and all fees and other obligations of the Borrower accrued hereunder, shall automatically become due and payable, without presentment, demand, protest or other notice of any kind (including notice of intent to accelerate or notice of acceleration), all of which are hereby waived by the Borrower.
ARTICLE VIII
SUBORDINATION TERMS
Section 8.01    Defined Terms. As used in this Article VIII:
(a)    “Administrative Agent” has the meaning set forth in the definition of “Revolving Credit Agreement” in part (d) of this Section 8.01. 
(b)    “Person” when used in this Article VIII, has the meaning set forth in the Revolving Credit Agreement. 
(c)    “Proceeding” means any of the following in respect of a Subordinated Obligor or its assets or property: insolvency or bankruptcy proceedings, any receivership, reorganization or other similar proceedings, any distribution of assets, an assignment for the benefit of creditors or a marshalling of assets and liabilities, or proceedings for voluntary or involuntary liquidation, dissolution or other winding up of a Subordinated Obligor, whether or not involving insolvency or bankruptcy.

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(d)     “Revolving Credit Agreement” means that certain Credit Agreement dated as of November 14, 2013, among the Borrower, the Initial Guarantor, the lenders from time to time party thereto (the “Revolving Lenders”), and JPMorgan Chase Bank, N.A., as administrative agent for the Revolving Lenders (in such capacity, including any successors thereto, the “Administrative Agent”), as amended, restated, supplemented or otherwise modified from time to time.
(e)    “Revolving Lenders” has the meaning set forth in the definition of “Revolving Credit Agreement” in part (d) of this Section 8.01. 
(f)    “Revolving Obligations” means the “Obligations” as defined in the Revolving Credit Agreement. 
(g)    “Subordinated Debt” means the Term Loan made by the Lender (as used in this Article VIII, the “Payee”) to any Subordinated Obligor (as defined below), which Term Loan may (but need not) be evidenced by notes made by a Subordinated Obligor (as defined below) to the order of Payee, as such loans may be renewed, consolidated, amended, extended, or otherwise modified, together with interest and premium, if any, thereon and other amounts payable in respect thereof, including any interest accruing after the date of filing of any Proceeding as hereinafter defined;
(h)    “this Subordination Agreement” means the provisions of this Article VIII; 
(i)    “payment in full” or “paid in full” when used in respect of the Senior Obligations means such time as the Revolving Lenders (as defined below) have no further commitments to lend or issue Letters of Credit (as defined in the Revolving Credit Agreement defined below), all Revolving Obligations (other than contingent indemnification obligations not yet due and payable) have been paid in full in cash and all Letters of Credit have terminated or have been cash collateralized in accordance with the terms of the Revolving Credit Agreement; and
(j)    “including” means “including without limitation”.
Section 8.02    Subordination. 
(a)    Senior Obligations. The payment of any amounts owing in respect of the Subordinated Debt shall be subordinated, to the extent and in the manner hereinafter set forth, to the following (the “Senior Obligations”): (A) all Revolving Obligations, (B) all obligations under the Subsidiary Guarantee contained in (and as defined in) the Revolving Credit Agreement, made by the Initial Guarantor in favor of the Administrative Agent and the Revolving Lenders, and (C) all obligations under any other guaranty made by any Subsidiary (as defined in the Revolving Credit Agreement) in favor of the Administrative Agent and the Revolving Lenders (the makers of any such guaranty, together with the Initial Guarantor, collectively, the “Revolving Credit Agreement Guarantors” and together with the Borrower, collectively, the “Subordinated Obligors” and each, a “Subordinated Obligor”), as each such agreement or guaranty described in the foregoing clauses (A) through (C) may be amended, renewed, extended, increased, substituted, refinanced, restructured, replaced, supplemented or otherwise modified from time to time, and in each case 

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including interest thereon accruing after the commencement of any Proceeding, whether or not such interest is an allowed claim in such Proceeding.
(b)    Proceedings. In the event of a Proceeding, then:
(i)    the holders of the Senior Obligations shall be entitled to receive payment in full of all Senior Obligations before Payee shall receive any payment or distribution on account of Subordinated Debt, and
(ii)    any payment by, or on behalf of, or distribution of the assets of, a Subordinated Obligor of any kind or character on account of the Subordinated Debt, whether in cash, securities, property or otherwise, to which Payee would be entitled except for the provisions of this Subordination Agreement shall be paid or delivered by the Person making such payment or distribution (whether a trustee in bankruptcy, a receiver, custodian, liquidating trustee or any other Person) or by Payee to the extent such payment is received by Payee directly to the holders of the Senior Obligations or the Administrative Agent acting on their behalf, payable in accordance with the terms of the Revolving Credit Agreement, until the payment in full of all Senior Obligations.
(c)    Default or Event of Default. (i) Upon the occurrence and during the continuation of a Default or Event of Default (each as defined in the Revolving Credit Agreement), Payee agrees not to ask, demand, sue for or take or receive from any Subordinated Obligor in cash, securities, property or otherwise, or by setoff, purchase, redemption (including from or by way of collateral) or otherwise, payment of all or any part of the Subordinated Debt, until payment in full of all Senior Obligations and Payee further agrees to turn over to the Administrative Agent for application in accordance with the Revolving Credit Agreement any such payment received in respect of the Subordinated Debt during the continuance of an Event of Default (as defined in the Revolving Credit Agreement) so long as payment in full of all Senior Obligations has not occurred. This Section 8.02(c)(i) shall cease to be applicable on the Investment Grade Rating Date as defined in the Revolving Credit Agreement (the “Revolving Credit Agreement Investment Grade Rating Date”).
(ii)    This Section 8.02(c)(ii) shall be applicable from and after the Revolving Credit Agreement Investment Grade Rating Date. Upon the occurrence and during the continuation of an Event of Default as defined in the Revolving Credit Agreement, Payee agrees not to ask, demand, sue for or take or receive from any Subordinated Obligor in cash, securities, property or otherwise, or by setoff, purchase, redemption (including from or by way of collateral) or otherwise, payment of all or any part of the Subordinated Debt, until payment in full of all Senior Obligations.
(d)    No Subrogation. Payee agrees that no payment or distribution to holders of Senior Obligations pursuant to the provisions of this Subordination Agreement shall entitle Payee to exercise any rights of subrogation in respect thereof, all of which are expressly waived herein, until the Senior Obligations have been paid in full.

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(e)    No Liens. Without the prior written consent of the Administrative Agent, no Subordinated Obligor shall give, or permit to be given and Payee shall not receive, accept or demand, any lien to secure any Subordinated Obligations, on any cash, securities, property or other assets, whether now existing or hereafter acquired, of any Subordinated Obligor.
Section 8.03    Waivers and Consents.
(a)    Payee waives (i) promptness, diligence, notice of acceptance and any other notice with respect to the Senior Obligations and this Subordination Agreement and any requirement that the Administrative Agent or any Revolving Lender exhaust any right or take any action against any Subordinated Obligor or any other Person or any of their respective assets.
(b)    All rights and interests of the holders of Senior Obligations hereunder, and all agreements and obligations of Payee and Subordinated Obligors under this Subordination Agreement, shall remain in full force and effect irrespective of: (i) any lack of validity or enforceability of any Revolving Credit Agreement or any other Loan Document as therein defined, or any agreement or instrument relating thereto; (ii) any change in the time, manner or place of payment of, or in any other term of, the Revolving Obligations, or any other amendment or waiver of or any consent to or departure from the Revolving Credit Agreement or any other Loan Document (as defined in the Revolving Credit Agreement), including any increase in the Senior Obligations or extension of the maturity thereof; (iii) any holder of Senior Obligations releasing any Subordinated Obligor from all or any part of the Senior Obligations by operation of law or otherwise, (iv) any enforcement or failure to enforce, or any delay in enforcing, any Loan Document (as defined in the Revolving Credit Agreement); or (v) any other circumstance which might otherwise constitute a defense available to, or a discharge of, any Subordinated Obligor or Payee or third party guarantor or surety other than payment in full of the Senior Obligations.
(c)    No present or future holder of Senior Obligations shall be prejudiced in its right to enforce subordination of Payee by any act or failure to act on the part of any Subordinated Obligor whether or not such act or failure shall give rise to any right of rescission or other claim or cause of action on the part of Payee.
Section 8.04    Reinstatement. This Subordination Agreement shall continue to be effective or be reinstated, as the case may be, if at any time any payment of any Senior Obligations is rescinded or must otherwise be returned by any holder of Senior Obligations in connection with any Proceeding, all as though such payment had not been made.
Section 8.05    Termination. This Subordination Agreement shall in all respects be a continuing agreement and shall remain in full force and effect until the earlier of (a) the payment in full of the Senior Obligations and (b) the payment in full in cash of the Subordinated Debt. Upon such payment in full, this Subordination Agreement shall terminate (subject to Section 8.04); provided that the parties hereto agree to each execute such instruments as may be reasonably requested by any other party hereto to further evidence such termination.
Section 8.06    Amendments, Etc. No amendment or waiver of any provision of this Subordination Agreement nor consent to any departure by Payee or any Subordinated Obligor 

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therefrom shall in any event be effective unless the same shall be in writing and signed by the Administrative Agent and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given.
Section 8.07    Rights of Payee. The provisions of the foregoing paragraphs with respect to subordination are solely for the purpose of defining the relative rights of the holders of Senior Obligations on the one hand, and Payee on the other hand, and none of such provisions shall impair, as between any Subordinated Obligor and Payee, the obligation of such Subordinated Obligor, which is unconditional and absolute, to pay to Payee the principal and interest under the Subordinated Debt in accordance with its terms, nor shall anything in such provisions prevent Payee from exercising all remedies otherwise permitted by applicable law or hereunder upon default hereunder, subject to the rights of holders of Senior Obligations under such provisions.
Section 8.08    Third-Party Beneficiaries. The holders of Senior Obligations are entitled to the benefits of the foregoing subordination provisions and are third-party beneficiaries thereof.
Section 8.09    Governing Law. THIS SUBORDINATION AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
ARTICLE IX
MISCELLANEOUS
Section 9.01    Notices.
(a)    Notices Generally. Except in the case of notices and other communications expressly permitted to be given by telephone (and subject to paragraph (b) below), all notices and other communications provided for herein shall be in writing and shall be delivered by hand or overnight courier service, mailed by certified or registered mail or sent by facsimile, as follows:
(i)    if to the Borrower, to it at Valero Energy Partners LP, One Valero Way, San Antonio, Texas 78249, Attention of Donna M. Titzman, Chief Financial Officer (Facsimile No. (210) 345-2267); and
(ii)    if to the Lender, to it at Valero Energy Corporation, One Valero Way, San Antonio, Texas 78249, Attention of Michael S. Ciskowski, Executive Vice President and Chief Financial Officer.
(b)    Electronic Communications. Notices and other communications to the parties hereunder may be delivered or furnished by electronic communication (including email and Internet or intranet websites).
Notices and other communications (i) sent to an email address shall be deemed received upon the sender’s receipt of an acknowledgement from the intended recipient (such as by the “return receipt requested” function, as available, return email or other written acknowledgement); provided 

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that if such notice or other communication is not sent during the normal business hours of the recipient, such notice or communication shall be deemed to have been sent at the opening of business on the next Business Day for the recipient, (ii) posted to an Internet or intranet website shall be deemed received upon the deemed receipt by the intended recipient at its email address as described in the foregoing clause (i) of notification that such notice or communication is available and identifying the website address therefor and (iii) transmitted by telecopier or facsimile shall be deemed to have been given when sent (except that, if not given during normal business hours for the recipient, shall be deemed to have been given at the opening of business on the next Business Day for the recipient).
Section 9.02    Waivers; Amendments. (a) No failure or delay by the Lender in exercising any right or power hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce such a right or power, preclude any other or further exercise thereof or the exercise of any other right or power. The rights and remedies of the Lender hereunder are cumulative and are not exclusive of any rights or remedies that it would otherwise have. No waiver of any provision of this Agreement or consent to any departure by the Borrower therefrom shall in any event be effective unless the same shall be permitted by paragraph (b) of this Section, and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given.
(b)    Neither this Agreement or the Notes nor any provision of either of the foregoing may be waived, amended or modified except pursuant to an agreement or agreements in writing entered into by the Borrower and the Lender.
Section 9.03    Successors and Assigns. The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted hereby, except that the Borrower may not assign or otherwise transfer any of its rights or obligations hereunder without the prior written consent of the Lender (and any attempted assignment or transfer by the Borrower without such consent shall be null and void).
Section 9.04    Counterparts; Integration; Effectiveness. This Agreement may be executed in counterparts (and by different parties hereto on different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. This Agreement and the other Loan Documents together constitute the entire contract among the parties relating to the subject matter hereof and supersede any and all previous agreements and understandings, oral or written, relating to the subject matter hereof. This Agreement shall become effective when it shall have been executed by the Lender and the Borrower, and thereafter shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns. Delivery of an executed counterpart of a signature page of this Agreement by telecopy shall be effective as delivery of a manually executed counterpart of this Agreement.
Section 9.05    Severability. Any provision of this Agreement held to be invalid, illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such invalidity, illegality or unenforceability without affecting the validity, legality and enforceability of the remaining provisions hereof; and the invalidity of a particular provision in a particular jurisdiction shall not invalidate such provision in any other jurisdiction.

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Section 9.06    Governing Law; Consent to Service of Process. This Agreement shall be construed in accordance with and governed by the law of the State of New York. Each party to this Agreement irrevocably consents to service of process in the manner provided for notices in Section 9.01. Nothing in this Agreement will affect the right of any party to this Agreement to serve process in any other manner permitted by law.
Section 9.07    Headings. Article and Section headings and the Table of Contents used herein are for convenience of reference only, are not part of this Agreement and shall not affect the construction of, or be taken into consideration in interpreting, this Agreement.
Section 9.08    Interest Rate Limitation. Notwithstanding anything herein to the contrary, if at any time the interest rate applicable to the Term Loan, together with all fees, charges and other amounts which are treated as interest on the Term Loan under applicable law (collectively the “Charges”), shall exceed the maximum lawful rate (the “Maximum Rate”) which may be contracted for, charged, taken, received or reserved by the Lender in accordance with applicable law, the rate of interest payable in respect of the Term Loan hereunder, together with all Charges payable in respect thereof, shall be limited to the Maximum Rate.
Section 9.09    No Liability of General Partner. It is hereby understood and agreed that the General Partner shall have no liability, as general partner or otherwise, for the payment of any amount owing or to be owing hereunder or under the other Loan Documents. The Lender agrees that no claim arising against the Borrower or any other Loan Party under any Loan Document with respect to the Obligations shall be asserted against the General Partner or its assets. Notwithstanding the foregoing, nothing in this Section 9.09 shall be construed so as to prevent the Lender from commencing any action, suit or proceeding with respect to or causing legal papers to be served upon the General Partner for the purpose of obtaining jurisdiction over the Borrower or another Loan Party.
ARTICLE X
SUBSIDIARY GUARANTEE
Section 10.01    Guarantee. Each Guarantor, jointly and severally, hereby unconditionally and irrevocably guarantees to the Lender (the “Subsidiary Guarantee”), as primary obligor and not merely as surety, the prompt and complete payment when due, whether at stated maturity, by acceleration or otherwise, of all obligations of the Borrower, now or hereafter existing under this Agreement and any other Loan Document, and all other Obligations, whether for principal, interest, fees, expenses or otherwise, including obligations which, but for an automatic stay under Section 362(a) of the Bankruptcy Code or any other insolvency law or other proceeding, would become due (such obligations being hereinafter referred to as the “Guaranteed Obligations”), and agrees to pay any and all expenses (including the legal fees, charges and disbursements of counsel) incurred by the Lender in enforcing any rights under the Subsidiary Guarantee. No amendment or modification of the Subsidiary Guarantee may be made without the prior written consent of each Guarantor. Notwithstanding anything contained herein to the contrary, the obligations of each Guarantor under the Subsidiary Guarantee shall be limited to an aggregate amount equal to the largest amount that would not render its obligations under the Subsidiary Guarantee subject to 

-43-

avoidance under Section 548 of the Bankruptcy Code (Title 11, United States Code) or any comparable provisions of any applicable state law.
Section 10.02    Waiver of Subrogation. Notwithstanding any payment or payments made by a Guarantor hereunder, or any set-off or application of funds of any Guarantor by the Lender, such Guarantor shall not be entitled to be subrogated to any of the rights of the Lender against the Borrower or against any collateral security or guarantee or right of offset held by the Lender for the payment of the Guaranteed Obligations, nor shall any Guarantor seek any reimbursement from the Borrower in respect of payments made by the Guarantor hereunder, until all amounts owing to the Lender by the Borrower are paid in full. If any amount shall be paid to any Guarantor on account of such subrogation rights at any time when all of the Guaranteed Obligations shall not have been paid in full, such amount shall be held by such Guarantor, in trust for the Lender, segregated from other funds of such Guarantor and shall, forthwith upon receipt by such Guarantor, be turned over to the Lender, in the exact form received by such Guarantor (duly indorsed by such Guarantor, if required), to be applied against the Guaranteed Obligations, whether mature or unmatured, in such order as the Lender may determine.
Section 10.03    Amendments, Etc., with respect to the Guaranteed Obligations. Each Guarantor shall remain obligated hereunder notwithstanding that, without any reservation of rights against such Guarantor, and without notice to or further assent by any Guarantor, any demand for payment of any of the Guaranteed Obligations made by the Lender may be rescinded by the Lender, and any of the Guaranteed Obligations continued, and the Guaranteed Obligations, or the liability of any other party upon or for any part thereof, or any collateral security or guarantee therefor or right of offset with respect thereto, may, from time to time, in whole or in part, be renewed, extended, amended, modified, accelerated, compromised, waived, surrendered or released by the Lender, and this Agreement, and any Note and any other document in connection therewith may be amended, modified, supplemented or terminated, in whole or in part, as the Lender may deem advisable from time to time, and any collateral security, guarantee or right of offset at any time held by the Lender for the payment of the Guaranteed Obligations may be sold, exchanged, waived, surrendered or released. The Lender shall have no obligation to protect, secure, perfect or insure any Lien or security interest at any time held by it as security for the Guaranteed Obligations or for this Subsidiary Guarantee or any property subject thereto.
Section 10.04    Guarantee Absolute and Unconditional. Each Guarantor waives any and all notice of the creation, renewal, extension or accrual of any of the Guaranteed Obligations and notice of or proof of reliance by the Lender upon this Subsidiary Guarantee or acceptance of this Subsidiary Guarantee; the Guaranteed Obligations, and any of them, shall conclusively be deemed to have been created, contracted or incurred in reliance upon this Subsidiary Guarantee; and all dealings between the Borrower and the Guarantors, on the one hand, and the Lender, on the other, shall likewise be conclusively presumed to have been had or consummated in reliance upon this Subsidiary Guarantee. Each Guarantor waives diligence, presentment, protest, demand for payment and notice of default or nonpayment to or upon the Borrower, such Guarantor or any other Guarantor with respect to the Guaranteed Obligations. This Subsidiary Guarantee shall be construed as a continuing, absolute and unconditional guarantee of payment without regard to, and each Guarantor hereby expressly waives any defenses to its obligations hereunder based upon (a) the 

-44-

validity or enforceability of this Agreement, any Note, any of the Guaranteed Obligations or any collateral security therefor or guarantee or right of offset with respect thereto at any time or from time to time held by the Lender, (b) any change in the time, manner or place of payment of, or in any other term of, all or any of the Guaranteed Obligations or any other Guaranteed Obligations of any other Loan Party under or in respect of the Loan Documents, or any other amendment or waiver of or any consent to departure from any Loan Document, including any increase in the Guaranteed Obligations resulting from the extension of additional credit to any Loan Party or any of its Subsidiaries or otherwise, (c) any defense, set-off or counterclaim (other than a defense of payment or performance) which may at any time be available to or be asserted by the Borrower against the Lender, or (d) any other circumstance whatsoever (with or without notice to or knowledge of the Borrower or any Guarantor) which constitutes, or might be construed to constitute, an equitable or legal discharge of the Borrower for the Guaranteed Obligations, or of any Guarantor under this Subsidiary Guarantee, in bankruptcy or in any other instance. When pursuing its rights and remedies hereunder against the Guarantors, the Lender may, but shall be under no obligation to, pursue such rights and remedies as it may have against the Borrower or any other Person or against any collateral security or guarantee for the Guaranteed Obligations or any right of offset with respect thereto, and any failure by the Lender to pursue such other rights or remedies or to collect any payments from the Borrower or any such other Person or to realize upon any such collateral security, or guarantee or right of offset, shall not relieve the Guarantor of any liability hereunder, and shall not impair or affect the rights and remedies, whether express, implied or available as a matter of law, of the Lender against each Guarantor.
Section 10.05    Reinstatement. This Subsidiary Guarantee shall continue to be effective, or be reinstated, as the case may be, if at any time payment, or any part thereof, of any of the Guaranteed Obligations is rescinded or must otherwise be restored or returned by the Lender upon the insolvency, bankruptcy, dissolution, liquidation or reorganization of the Borrower or upon or as a result of the appointment of a receiver, intervenor or conservator of, or trustee or similar officer for, the Borrower or any substantial part of its property, or otherwise, all as though such payments had not been made.
Section 10.06    Payments. Each of the Guarantors and the Borrower hereby agrees that the Guaranteed Obligations will be paid to the Lender, without set-off or counterclaim in Dollars as expressed to be payable hereunder and under any Note, in immediately available funds at the office of the Lender specified in Section 9.01.
Section 10.07    Additional Guarantors. Upon the execution and delivery by any Person of a Guarantee Joinder and other required documents as provided in Section 5.09, such Person shall be a Guarantor and shall be a party hereto as if an original signatory hereto.
Section 10.08    Guaranty Release Matters. The Lender shall release any Guarantor from its obligations as a Guarantor under this Agreement pursuant to a written request made by the Borrower, if (a) such Guarantor ceases to be a Subsidiary of the Borrower or a Material Subsidiary of the Borrower that is a First Tier Subsidiary as a result of a transaction permitted under this Agreement, (b) such Guarantor is an Elective Guarantor at the time of such release or (c) at any time on or after the Investment Grade Rating Date, and only for so long as the Borrower maintains 

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an Investment Grade Rating, after giving pro forma effect to any such release occurring on or after the Investment Grade Rating Date, the Borrower is in compliance with Section 6.03(b)(i) and Section 6.08 and no Event of Default has occurred and is then continuing; provided that, for the avoidance of doubt, if the Borrower ceases to have an Investment Grade Rating, each Subsidiary that would have otherwise been required to be a Guarantor hereunder prior to giving effect to this Section 10.08, shall promptly, but in any event, within 10 Business Days of the loss of such Investment Grade Rating, execute and deliver to the Lender a joinder agreement in the form of Exhibit B hereto and become a Guarantor hereunder. Any such request shall be accompanied by a certificate of a Financial Officer of the Borrower certifying (which certification shall constitute a representation and warranty by the Borrower hereunder) that (i) no Event of Default then exists or will exist after giving effect to such release, (ii) after giving pro forma effect to any such release occurring on or after the Investment Grade Rating Date, the Borrower is in compliance with Section 6.03(b)(i) and Section 6.08, and (iii) the conditions for release set forth in this Section 10.08 have been satisfied. 
(Signature Pages Begin Next Page)

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective authorized officers as of the day and year first above written.

VALERO ENERGY PARTNERS LP, as Borrower

By: Valero Energy Partners GP LLC, its General
Partner
	
			
	By: 
	 /s/ Donna M. Titzman

	 
	Name:
	Donna M. Titzman

	 
	Title:
	Senior Vice President, Chief Financial

	 
	 
	Officer, and Treasurer

VALERO PARTNERS OPERATING CO. LLC, as
a Guarantor 
	
			
	By:
	 /s/ Donna M. Titzman

	 
	Name:
	Donna M. Titzman

	 
	Title:
	Senior Vice President and Treasurer

S-1

VALERO ENERGY CORPORATION, as Lender

	
			
	By:
	 /s/ Michael S. Ciskowski

	 
	Name:
	Michael S. Ciskowski

	 
	Title:
	Executive Vice President and Chief

	 
	 
	Financial Officer

S-2

ANNEX A

LEVERAGE-BASED PRICING GRID
	
					
	Consolidated Leverage
Ratio
	Level 1
	Level 2
	Level 3
	Level 4

	≤ 2.75:1.00
	> 2.75:100 but ≤
3.50:1.00
	> 3.50:100 but ≤
4.25:1.00
	> 4.25:1.00

	LIBOR Margin
	1.250%
	1.500%
	1.750%
	2.00%

	Prime Rate Margin 
	0.250%
	0.500%
	0.750%
	1.00%

Any increase or decrease in the Applicable Rate resulting from a change in the Consolidated Leverage Ratio shall become effective as of the first Business Day immediately following the date of delivery of a compliance certificate pursuant to Section 5.01(c), provided, however, that if any such compliance certificate is not delivered when due in accordance with such Section 5.01(c), then the Applicable Rate shall remain at the level determined by the most recently delivered compliance certificate and shall continue to apply until the first Business Day immediately following the date a compliance certificate is delivered in accordance with Section 5.01(c), whereupon the Applicable Rate shall be adjusted based upon the calculation of the Consolidated Leverage Ratio contained in such compliance certificate, and if the Applicable Rate would have been set at a higher level during the period of non-delivery of the compliance certificate, the Borrower shall pay to the Lender, on demand all amounts which would have accrued hereunder had the compliance certificate been delivered when due. The Applicable Rate in effect on the Closing Date shall be based on Pricing Level 1 until the first calculation date following the receipt by the Lender of the financial information and related compliance certificate for the first fiscal quarter ending after the Closing Date.

Annex A – Page 1

ANNEX B

RATINGS-BASED PRICING GRID
	
						
	Designated
Ratings
	Level 1
	Level 2
	Level 3
	Level 4
	Level 5

	≥BBB+/Baa1
	BBB/Baa2
	BBB-/Baa3
	BB+/Ba1
	≤BB+/Ba1

	LIBOR Margin
	1.125%
	1.250%
	1.500%
	1.750%
	2.00%

	Prime Rate Margin
	0.125%
	0.250%
	0.500%
	0.750%
	1.00%

Ratings in the above Ratings-Based Pricing Grid are based on the Designated Ratings issued by the Rating Agencies.
For purposes of the foregoing, (i) if the Designated Ratings are split, the higher of such ratings shall apply, provided that if the higher rating is two or more levels above the lower rating, the rating next below the higher of the two shall apply; (ii) if only one Rating Agency issues a Designated Rating, such rating shall apply; and (iii) if the Designated Rating established by Moody’s or S&P shall be changed (other than as a result of a change in the rating system of Moody’s or S&P), such change shall be effective as of the date on which it is first announced by the applicable Rating Agency. If the rating system of S&P or Moody’s shall change, or if any of S&P or Moody’s shall cease to be in the business of rating corporate debt obligations, the Borrower and the Lender shall negotiate in good faith if necessary to amend this provision to reflect such changed rating system or the unavailability of Designated Ratings from such Rating Agencies and, pending the effectiveness of any such amendment, the LIBOR Margin and the Prime Rate Margin shall be determined by reference to the Designated Rating of such Rating Agency most recently in effect prior to such change or cessation.

Annex B – Page 1

THIS NOTE AND THE OBLIGATIONS EVIDENCED HEREBY ARE SUBORDINATED TO THE PRIOR PAYMENT IN FULL OF THE “SENIOR OBLIGATIONS” (AS DEFINED IN THE HEREINAFTER DESCRIBED CREDIT AGREEMENT) AND ARE SUBJECT, IN ALL RESPECTS, TO THE TERMS AND CONDITIONS OF ARTICLE VIII OF THE CREDIT AGREEMENT. IN THE EVENT OF ANY CONFLICT OR INCONSISTENCY BETWEEN THE TERMS OF THIS NOTE AND THE TERMS OF ARTICLE VIII OF THE CREDIT AGREEMENT, THE TERMS OF ARTICLE VIII OF THE CREDIT AGREEMENT SHALL CONTROL.
    
EXHIBIT A
FORM OF PROMISSORY NOTE
	
		
	$_________
	[          ], 2015

FOR VALUE RECEIVED, the undersigned, VALERO ENERGY PARTNERS LP, a Delaware limited partnership (the “Borrower”), hereby unconditionally promises to pay to ________________________ (the “Lender”) at the office of the Lender located at One Valero Way, San Antonio, Texas 78249, in lawful money of the United States of America and in same day funds, on the Maturity Date the principal amount of (a)____________ DOLLARS ($___________), or, if less, (b) the aggregate unpaid principal amount of the Term Loan made by the Lender to the Borrower pursuant to the Credit Agreement, as hereinafter defined. The Borrower further agrees to pay interest in like money at such office on the unpaid principal amount hereof from time to time outstanding at the rates and on the dates specified in the Credit Agreement.
The holder of this Promissory Note (this “Note”) is authorized to, and prior to any transfer hereof shall, endorse on Schedule A attached hereto that is part of this Promissory Note, the amount of the Term Loan owing to the Lender by the Borrower pursuant to the Credit Agreement, and all payments made on account of principal thereof; provided that the failure to make a notation of any such Term Loan or payment made on this Promissory Note shall not limit or otherwise affect the obligations of the Borrower hereunder with respect to payments of principal of or interest on this Promissory Note.
This Note (a) is one of the Notes referred to in the Subordinated Credit Agreement, dated as of October 1, 2015 (as amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”), among the Borrower and the Lender, (b) is subject to the provisions of the Credit Agreement and (c) is subject to optional prepayment in whole or in part as provided in the Credit Agreement.
Reference is made to the Credit Agreement for provisions for the acceleration of the maturity hereof.

Exhibit A – Page 1

All parties now and hereafter liable with respect to this Note, whether maker, principal, surety, guarantor, endorser or otherwise, hereby waive presentment, demand, protest, notice of intent to accelerate, notice of acceleration and all other notices of any kind except those expressly required under the Credit Agreement.
Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement. 
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
VALERO ENERGY PARTNERS LP

By: VALERO ENERGY PARTNERS GP LLC, 
its General Partner
	
			
	By:_______________________________________

	 
	Name:
	 

	 
	Title:
	 

Exhibit A – Page 2

SCHEDULE A 
to 
Promissory Note
TERM LOAN AND PAYMENTS OF PRINCIPAL
	
					
	Date
	Amount of Term
Loan
	Amount of Principal Paid
or Prepaid
	Unpaid Principal
Balance
	Notation Made
By

	 
	 
	 
	 
	 

	 
	 
	 
	 
	 

	 
	 
	 
	 
	 

	 
	 
	 
	 
	 

	 
	 
	 
	 
	 

	 
	 
	 
	 
	 

	 
	 
	 
	 
	 

	 
	 
	 
	 
	 

	 
	 
	 
	 
	 

	 
	 
	 
	 
	 

	 
	 
	 
	 
	 

	 
	 
	 
	 
	 

	 
	 
	 
	 
	 

	 
	 
	 
	 
	 

	 
	 
	 
	 
	 

	 
	 
	 
	 
	 

	 
	 
	 
	 
	 

	 
	 
	 
	 
	 

Exhibit A – Page 3

Exhibit B
FORM OF GUARANTEE JOINDER
This Guarantee Joinder is dated as of ___________ and is made by _____________, a _____________ (“Additional Guarantor”), in favor of VALERO ENERGY CORPORATION, a Delaware corporation (the “Lender”). All capitalized terms not defined herein shall have the meaning ascribed to them in the Credit Agreement hereinafter referenced.
RECITALS
WHEREAS, VALERO ENERGY PARTNERS LP, a Delaware limited partnership (the “Borrower”), is party to that certain Subordinated Credit Agreement dated as of October 1, 2015, between the Borrower and the Lender (as amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”); and
WHEREAS, Additional Guarantor has agreed to execute and deliver this Guarantee Joinder in order to become a party to the Credit Agreement as a Guarantor thereunder.
NOW, THEREFORE, in consideration of the foregoing premises, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Additional Guarantor, for the benefit of the Lender (and, in respect of Article VIII of the Credit Agreement, for the benefit of the holders of Senior Obligations, as defined in such Article VIII of the Credit Agreement), hereby agrees as follows:
1.    Additional Guarantor shall be a Guarantor for purposes of the Credit Agreement, effective from the date hereof, and agrees to perform all of the obligations of a Guarantor under, and to be bound in all respects by the terms of, the Credit Agreement applicable to Guarantors including, without limitation, the provisions of Article VIII thereof (including all waivers, releases, indemnifications and submissions set forth in the Credit Agreement), all of which terms are incorporated herein by reference, as if Additional Guarantor were a signatory party thereto; and, accordingly, Additional Guarantor hereby, jointly and severally with the other Guarantors party to the Credit Agreement, unconditionally and irrevocably guarantees the prompt and complete payment when due, whether at stated maturity, by acceleration or otherwise, of the Guaranteed Obligations, and further agrees to pay any and all expenses (including the legal fees, charges and disbursements of counsel) incurred by the Lender in enforcing any rights under the Subsidiary Guarantee, in all respects upon the terms set forth in the Credit Agreement. Notwithstanding anything contained herein or in the Subsidiary Guarantee to the contrary, the obligations of Additional Guarantor under the Subsidiary Guarantee shall be limited to an aggregate amount equal to the largest amount that would not render its obligations under the Subsidiary Guarantee subject to avoidance under Section 548 of the Bankruptcy Code (Title 11, United States Code) or any comparable provisions of any applicable state law.
2.    From and after the date hereof, all references to the “Guarantors,” or each individual “Guarantor,” in the Credit Agreement and the other Loan Documents shall be deemed to include Additional Guarantor, in addition to the other Guarantors, as if Additional Guarantor were a signatory party to the Credit Agreement. In addition, all references to [“Required 

Exhibit B – Page 1

Guarantors”] [“Elective Guarantors”] in the Credit Agreement and the other Loan Documents shall be deemed to include Additional Guarantor (which references may change after the date hereof in accordance with the terms of the Credit Agreement).
3.    Additional Guarantor hereby represents and warrants that the representations and warranties set forth in the Credit Agreement pertaining to it are true and correct in all material respects on and as of the date hereof (immediately after giving effect hereto), except to the extent any such representations and warranties are expressly limited to an earlier date, in which case, such representations and warranties are true and correct as of such specified earlier date; provided that, in each case, the representations and warranties contained in Section 3.05(b), Section 3.08 and Section 3.10 are made only on and as of the Closing Date, and none of the representations and warranties described in the foregoing shall be made on the date hereof if such date occurs after the Closing Date, as if set forth herein in their entirety.
4.    This Guarantee Joinder and the rights and obligations of the parties hereunder shall be governed by and construed and interpreted in accordance with the laws of the State of New York. Acceptance and notice of acceptance hereof are hereby waived in all respects.
5.    This Guarantee Joinder may be executed in counterparts (and by different parties hereto on different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. This Guarantee Joinder shall become effective when the Lender shall have received counterparts hereof that, when taken together, bear the signatures of Additional Guarantor and the Lender. Delivery of an executed signature page to this Guarantee Joinder by facsimile transmission or other electronic imaging means (e.g. “pdf’ or “tif’) shall be effective as delivery of a manually signed counterpart hereof.
6.    This Guarantee Joinder is a Loan Document.
7.    All communications and notices hereunder shall be in writing and given as provided in the Credit Agreement. All communications and notices hereunder to Additional Guarantor shall be given to it at the address set forth under its signature.
8.    This Guarantee Joinder and the Credit Agreement set forth the entire agreement of the parties hereto with respect to the subject matter hereof, and supersede all previous understandings, written or oral, with respect thereto.
[Signature Page to Follow]

Exhibit B – Page 2

IN WITNESS WHEREOF, the undersigned Additional Guarantor has caused this Guarantee Joinder to be duly executed and delivered as of the date first set forth above.
	
	
	 

	[NAME OF ADDITIONAL GUARANTOR]

	
		
	By:
	 

	Name:
	 

	Title:
	 

Address for Notices: 

Exhibit B – Page 3

ACKNOWLEDGED AND ACCEPTED, 
as of the date above first written:

VALERO ENERGY CORPORATION,

By ____________________________ 
Name:
Title:

Exhibit B – Page 4

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