Current Report Filing (8-k)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 OR 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): April 1, 2016

VALERO ENERGY PARTNERS LP

(Exact name of registrant as specified in its charter)



Delaware	1-36232	90-1006559
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)



One Valero Way San Antonio, Texas		78249
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (210) 345-2000

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2):



o		Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o		Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o		Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o		Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01 Entry into a Material Definitive Agreement.

Effective April 1, 2016, Valero Energy Partners LP (the Partnership) entered into a contribution agreement (the Contribution Agreement) pursuant to which Valero Energy Corporation, through its wholly owned subsidiaries, Valero Terminaling and Distribution Company (VTDC) and Valero Energy Partners GP LLC (the General Partner) contributed to the Partnership (the Contribution) all of the outstanding membership interests of Valero Partners McKee, LLC (Valero McKee), in exchange for (i) a cash distribution of $204 million to VTDC, (ii) the issuance of 728,775 common units representing limited partner interests in the Partnership (Common Units) to VTDC and (iii) the issuance of 14,873 general partner units representing general partner interests in the Partnership (General Partner Units) to the General Partner. The cash distribution was funded with $65 million of cash on hand and $139 million of borrowings under the Partnership’s revolving credit facility.

The term “Valero,” when used in this report, may refer to Valero Energy Corporation, to one or more of its subsidiaries, or all of them taken as a whole (other than the Partnership or its subsidiaries or the General Partner) as the context requires.

Valero McKee operates a crude oil, intermediates, and refined petroleum products terminal that supports Valero’s McKee Refinery (the McKee Terminal) located in Sunray, Texas. The McKee Terminal has storage tanks with 4.4 million barrels of storage capacity.

Valero owns (i) the 2% general partner interest in the Partnership, (ii) all incentive distribution rights in the Partnership, and (iii) a 66.1% limited partner interest in the Partnership. Certain officers of Valero (including Joseph W. Gorder who is Valero’s Chairman of the Board, President and Chief Executive Officer) also serve as officers and/or directors of the Partnership and its subsidiaries. Additionally, the Partnership and Valero have certain commercial relationships as further described in the Partnership’s Annual Report on Form 10‑K for the year ended December 31, 2015, which descriptions are incorporated herein by reference.

The terms of the Contribution were determined pursuant to negotiations between the Partnership and the conflicts committee of the board of directors of the General Partner, which is composed solely of independent directors. The conflicts committee retained independent legal and financial advisors to assist in evaluating and negotiating the Contribution. The conflicts committee approved the Contribution and recommended approval of the Contribution to the General Partner’s board of directors, which then approved the Contribution.

Effective April 1, 2016, the following documents were executed in connection with the Contribution.

Contribution Agreement

The Partnership entered into the Contribution Agreement with VTDC, which provides for, among other things, the contribution by VTDC and the General Partner of their interests in Valero McKee, in exchange for (i) a cash distribution of $204 million to VTDC, (ii) the issuance of 728,775 Common Units to VTDC and (iii) the issuance of 14,873 General Partner Units to the General Partner. The Contribution Agreement contains customary representations, warranties, covenants, and indemnities.

The foregoing description of the Contribution Agreement is not complete and is qualified in its entirety by reference to the full text of the Contribution Agreement, which is attached as Exhibit 10.01 to this Current Report on Form 8-K and incorporated herein by reference.

Amended and Restated Schedules to Omnibus Agreement

The Partnership entered into amended and restated schedules (the Amended Omnibus Schedules) to the Amended and Restated Omnibus Agreement, dated as of July 1, 2014 (the Omnibus Agreement), among

Valero, the General Partner, the Partnership, and certain of their respective subsidiaries. The Amended Omnibus Schedules join Valero McKee as a party to the Omnibus Agreement and include the following modifications, among others:


•	the indemnification obligations of Valero and the Partnership under the Omnibus Agreement were extended to apply to the McKee Terminal in substantially the same manner as the assets acquired by the Partnership in its initial public offering;


•	the annual administrative fee payable by the Partnership was increased from $11.2 million per year to $11.7 million per year. The increase in the fee of $0.5 million will be prorated for the remainder of 2016 based on the number of days from April 1, 2016 to December 31, 2016; and


•	the grant to Valero of a right of first refusal with respect to the McKee Terminal.

The Amended Omnibus Schedules are governed by the terms of the Omnibus Agreement, which is incorporated by reference to this Current Report on Form 8-K as Exhibit 10.02. The foregoing description of the Amended Omnibus Schedules is not complete and is qualified in its entirety by reference to the Amended Omnibus Schedules, which are filed as Exhibit 10.03 to this Current Report on Form 8-K and incorporated herein by reference.

Amended and Restated Exhibits to Services and Secondment Agreement

The General Partner entered into amended and restated exhibits (the Amended Services Exhibits) to the Amended and Restated Services and Secondment Agreement (the Services Agreement), dated as of March 1, 2015, with Valero. The Amended Services Exhibits provide for the additional secondment of employees to the General Partner for the provision of services with respect to the McKee Terminal.

The Amended Services Exhibits are governed by the terms of the Services Agreement, which is incorporated by reference to this Current Report on Form 8-K as Exhibit 10.04. The forgoing description of the Amended Services Exhibits is not complete and is qualified in its entirety by reference to the Amended Services Exhibits, which are filed as Exhibit 10.05 to this Current Report on Form 8-K and incorporated herein by reference.

Terminal Services Schedule

The Partnership and Valero entered into a commercial agreement with respect to the McKee Terminal in the form of an additional schedule (the Schedule) to the Master Terminal Services Agreement (together with the schedules thereto, the Terminal Services Agreement) entered into on December 16, 2013 in connection with the Partnership’s initial public offering. The Schedule provides for inflation escalators, has an initial term of 10 years, and provides Valero an option to renew for one additional five‑year term. The Schedule is governed by the terms of the Terminal Services Agreement, which is incorporated by reference to this Current Report on Form 8-K as Exhibit 10.06. The description of the Terminal Services Agreement in the Partnership’s Current Report on Form 8-K filed on December 16, 2013 is incorporated herein by reference.

Pursuant to the Schedule, the Partnership will charge Valero for terminaling services at the McKee Terminal. Valero will pay a fee of $0.333 per barrel for throughput volumes up to 320,000 barrels per day and $0.05 per barrel for throughput volumes in excess of 320,000 barrels per day. Valero will be obligated to deliver for throughput a quarterly average of at least 272,000 barrels per day at the McKee Terminal.

The foregoing description of the Schedule is not complete and is qualified in its entirety by reference to the Schedule, which is filed as Exhibit 10.07 to this Current Report on Form 8-K and incorporated herein by reference.

Lease and Access Agreement

Valero McKee entered into a Lease and Access Agreement with Valero (the Lease and Access Agreement) pursuant to which Valero McKee will lease the land on which the McKee Terminal is located. The term of the Lease and Access Agreement is for 10 years with four automatic successive renewal periods of five years each. Each party may terminate by providing written notice within 180 days of such period. Initially, Valero McKee will pay $594,000 per year as base rent, subject to an annual inflation escalator. Valero McKee will also pay customary expense reimbursement for taxes, utilities, and similar costs incurred by Valero related to the leased premises.

The Lease and Access Agreement contains customary terms regarding the rights and obligations of the parties with respect to maintenance of the leased premises, alterations to the leased premises, and maintenance of certain types of insurance, as well as customary default, remedy, and indemnity provisions.

The foregoing description of the Lease and Access Agreement is not complete and is qualified in its entirety by reference to the Lease and Access Agreement, which is filed as Exhibit 10.08 to this Current Report on Form 8-K and incorporated herein by reference.

Item 2.01 Completion of Acquisition or Disposition of Assets.

On April 1, 2016, the Partnership completed the Contribution pursuant to the terms of the Contribution Agreement. The Partnership, the General Partner, and Valero have various relationships with one another. The information set forth in Item 1.01 regarding the Contribution Agreement and the relationships among the Partnership, the General Partner, and Valero is incorporated by reference into this Item 2.01.

Item 3.02 Unregistered Sales of Equity Securities.

The information set forth in Item 1.01 regarding the issuance of Common Units to VTDC and the issuance of General Partner Units to the General Partner in connection with the Contribution is incorporated into this Item 3.02 by reference. The issuance of the Common Units and General Partner Units was completed in reliance upon the exemption from the registration requirements of the Securities Act of 1933, as amended under Section 4(a)(2), as a transaction by an issuer not involving a public offering.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.



Exhibit No.		Description

10.01		Contribution Agreement, dated April 1, 2016, by and between Valero Terminaling and Distribution Company and Valero Energy Partners LP.
10.02		Amended and Restated Omnibus Agreement, dated July 1, 2014, by and among Valero Energy Corporation, Valero Energy Partners GP LLC, Valero Energy Partners LP, and the other parties named therein - incorporated by reference to Exhibit 10.2 to the Partnership’s Current Report on Form 8-K dated July 1, 2014, and filed July 1, 2014 (SEC File No. 1-36232).
10.03		Amendment and Restatement of Schedules to Amended and Restated Omnibus Agreement, dated April 1, 2016, by and among Valero Energy Corporation, Valero Energy Partners GP LLC, Valero Energy Partners LP, and the other parties named therein.
10.04		Amended and Restated Services and Secondment Agreement, dated March 1, 2015, by and among Valero Services, Inc., Valero Refining Company-Tennessee, L.L.C., Valero Refining-Texas, L.P., and Valero Energy Partners GP LLC - incorporated by reference to Exhibit 10.04 to the Partnership’s Current Report on Form 8-K dated March 1, 2015, and filed March 5, 2015 (SEC File No. 1-36232).
10.05		Amendment and Restatement of Exhibits to Amended and Restated Services and Secondment Agreement, dated April 1, 2016, by and among Valero Services, Inc., Valero Refining Company-Tennessee, L.L.C., Valero Refining-Texas, L.P., and Valero Energy Partners GP LLC.
10.06		Master Terminal Services Agreement, dated December 16, 2013, by and between Valero Partners Operating Co. LLC and Valero Marketing and Supply Company - incorporated by reference to Exhibit 10.7 to the Partnership’s Current Report on Form 8-K dated December 16, 2013, and filed December 20, 2013 (SEC File No. 1-36232).
10.07		Terminal Services Schedule (McKee Terminal), dated April 1, 2016, by and between Valero Partners Operating Co. LLC and Valero Marketing and Supply Company.
10.08		Lease and Access Agreement, dated April 1, 2016, between Diamond Shamrock Refining Company, L.P. and Valero Partners McKee, LLC.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Partnership has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.



		VALERO ENERGY PARTNERS LP
		(Registrant)

		By:	Valero Energy Partners GP LLC,
			its general partner

Date:	April 1, 2016	By:	/s/ Donna M. Titzman
			Donna M. Titzman
			Senior Vice President, Chief Financial Officer,
			and Treasurer
			(Principal Financial and Accounting Officer)

Exhibit 10.01

CONTRIBUTION AGREEMENT

by and between

VALERO TERMINALING AND DISTRIBUTION COMPANY,

and

VALERO ENERGY PARTNERS LP

April 1, 2016

TABLE OF CONTENTS



ARTICLE I DEFINED TERMS		1
1.1	Defined Terms	1
ARTICLE II TRANSACTIONS		7
2.1	Assignment	7
2.2	Consideration	7
2.3	Proration of Certain Taxes	7
2.4	Certain Adjustments	8
ARTICLE III CLOSING		9
3.1	Closing	9
3.2	Deliveries by VTDC	9
3.3	Deliveries by the Partnership	9
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF VTDC		10
4.1	Organization; Ownership; Preemptive Rights	10
4.2	Authorization	11
4.3	No Conflicts or Violations; No Consents or Approvals Required	11
4.4	Absence of Litigation; Compliance with Law	11
4.5	Bankruptcy	12
4.6	Brokers and Finders	12
4.7	Tax Matters	12
4.8	Title to and Condition of Assets	12
4.9	Financial Matters	13
4.10	No Adverse Changes	13
4.11	Environmental Matters	13
4.12	Contracts	13
4.13	Employees	14
4.14	Investment Company Act	14
4.15	Acquisition as Investment	14
4.16	Conflicts Committee Matters	14
4.17	Opportunity for Independent Investigation	15
ARTICLE V REPRESENTATIONS AND WARRANTIES OF THE PARTNERSHIP		15
5.1	Organization	15
5.2	Authorization	15
5.3	Validly Issued Units	15
5.4	No Conflicts or Violations; No Consents or Approvals Required	16
5.5	Absence of Litigation	16
5.6	Brokers and Finders	16
5.7	Opportunity for Independent Investigation	16
5.8	Acquisition as Investment	16
ARTICLE VI COVENANTS		17
6.1	Additional Agreements	17
6.2	Further Assurances	17



6.3	Cooperation on Tax Matters	17
6.4	Cooperation for Litigation and Other Actions	18
6.5	Retention of and Access to Books and Records	18
6.6	NYSE	18
ARTICLE VII INDEMNIFICATION		19
7.1	Indemnification	19
7.2	Defense of Third-Party Claims	19
7.3	Direct Claims	20
7.4	Limitations	20
7.5	Remedies Under Ancillary Documents	21
7.6	Tax Related Adjustments and Tax Reporting of Transactions	21
7.7	Express Negligence Rule	21
ARTICLE VIII MISCELLANEOUS		22
8.1	WAIVERS AND DISCLAIMERS	22
8.2	Expenses	23
8.3	Notices	23
8.4	Severability	23
8.5	Governing Law	24
8.6	Confidentiality	24
8.7	Parties in Interest	25
8.8	Assignment of Agreement	25
8.9	Captions	25
8.10	Counterparts	25
8.11	Integration	25
8.12	Amendment; Waiver	25
ARTICLE IX INTERPRETATION		25
9.1	Interpretation	25
9.2	References, Gender, Number	26

Exhibits:

Exhibit A — Amended and Restated Omnibus Agreement Schedules

Exhibit B — Terminal Services Schedule (McKee Terminal)

Exhibit C — McKee Lease Agreement

Exhibit D — Assignment Document

Exhibit E — Amended Services and Secondment Exhibits

Exhibit F — McKee Assignment

CONTRIBUTION AGREEMENT

THIS CONTRIBUTION AGREEMENT (this “Agreement”), is entered into on April 1, 2016, by and between Valero Terminaling and Distribution Company, a Delaware corporation (“VTDC”), and Valero Energy Partners LP, a Delaware limited partnership (the “Partnership”). The above-named entities are sometimes referred to in this Agreement each as a “Party” and collectively as the “Parties.”

WHEREAS, VTDC owns all of the issued and outstanding membership interests (the “McKee Interests”) in Valero Partners McKee, LLC, a Delaware limited liability company (“Valero McKee”), which owns certain tankage and related assets located in Sunray, Texas;

WHEREAS, (a) VTDC wishes to contribute (directly or indirectly) all of the McKee Interests to the Partnership and (b) subsequent thereto, the Partnership wishes to contribute the McKee Interests to Valero Partners Operating Co. LLC, a Delaware limited liability company and wholly owned subsidiary of the Partnership (“Valero Operating”); and

WHEREAS, the Parties wish to enter into, or cause to be entered into, amended and restated schedules (the “Restated Schedules”) to that certain Amended and Restated Omnibus Agreement, executed as of July 1, 2014, among Valero Energy Corporation, a Delaware corporation (“Valero”), the Partnership, Valero Energy Partners GP LLC, a Delaware limited liability company and general partner of the Partnership (the “General Partner”), and the various other parties thereto (the “Omnibus Agreement”).

NOW, THEREFORE, in consideration of the foregoing and the mutual covenants set forth herein and in the Omnibus Agreement, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties, intending to be legally bound, hereby agree as follows:

ARTICLE I

DEFINED TERMS

1.1 Defined Terms. Unless the context expressly requires otherwise, the respective terms defined in this Section 1.1 shall, when used in this Agreement, have the respective meanings herein specified, with each such definition to be equally applicable both to the singular and the plural forms of the term so defined.

“Affiliate” has the meaning set forth in the Partnership Agreement; provided that, for purposes of this Agreement, Valero and its subsidiaries (other than the General Partner and the Partnership and its subsidiaries), including VTDC, on the one hand, and the General Partner and the Partnership and its subsidiaries, on the other hand, shall not be considered Affiliates of each other.

“Agreement” has the meaning set forth in the preamble.

“Amended Services and Secondment Exhibits” has the meaning set forth in Section 3.2(e).

“Ancillary Documents” means, collectively, the Partnership Ancillary Documents and the VTDC Ancillary Documents.

“Applicable Law” means any applicable statute, law, regulation, ordinance, rule, judgment, rule of law, decree, Permit, requirement, or other governmental restriction or any similar form of decision of, or any provision or condition issued under any of the foregoing by, or any determination by any Governmental Authority having or asserting jurisdiction over the matter or matters in question, whether now or hereafter in effect and in each case as amended (including all of the terms and provisions of the common law of such Governmental Authority), as interpreted and enforced at the time in question, including Environmental Law.

“Assignment Document” has the meaning set forth in Section 3.2(d).

“Books and Records” means all of the records and files primarily related to Valero McKee or the ownership and operation of the assets owned by Valero McKee as of the Closing Date, including the minutes books and other corporate records of Valero McKee and any plans, drawings, instruction manuals, operating and technical data and records, whether computerized or hard copy, tax files, books, records, tax returns and tax work papers, supplier lists, surveys, engineering records, maintenance records and studies, environmental records, environmental reporting information, emission data, testing and sampling data and procedures, construction, inspection and operating records, and any and all information necessary to meet compliance obligations with respect to Applicable Law, in each case only to the extent primarily related to Valero McKee or the assets owned by Valero McKee and existing as of the Closing Date.

“Business” means the assets and operations that are owned by Valero McKee as of immediately prior to the Effective Time, including the McKee Terminal Assets.

“Business Day” has the meaning set forth in the Omnibus Agreement.

“Cash Distribution” has the meaning set forth in Section 2.2(a).

“Claim” means any existing or threatened future claim, demand, suit, action, investigation, proceeding, inquiry, condemnation, audit or cause of action of any kind or character (in each case, whether civil, criminal, investigative or administrative) before any court or other Governmental Authority or any arbitration proceeding, known or unknown, under any theory, including those based on theories of contract, tort, statutory liability, strict liability, employer liability, premises liability, products liability, breach of warranty or malpractice.

“Closing” has the meaning set forth in Section 3.1.

“Closing Date” has the meaning set forth in Section 3.1.

“Common Units” means common units representing limited partner interests in the Partnership.

“Confidential Information” means any proprietary or confidential information that is competitively sensitive material or otherwise of value to a Party or its Affiliates and not generally

known to the public, including trade secrets, scientific or technical information, design, invention, process, procedure, formula, improvements, product planning information, marketing strategies, financial information, information regarding operations, consumer and/or customer relationships, consumer and/or customer identities and profiles, sales estimates, business plans, and internal performance results relating to the past, present or future business activities of a Party or its Affiliates and the consumers, customers, clients and suppliers of any of the foregoing. Confidential Information includes such information as may be contained in or embodied by documents, substances, engineering and laboratory notebooks, reports, data, specifications, computer source code and object code, flow charts, databases, drawings, pilot plants or demonstration or operating facilities, diagrams, specifications, bills of material, equipment, prototypes and models, and any other tangible manifestation (including data in computer or other digital format) of the foregoing; provided, however, that Confidential Information does not include information that a receiving Party can show (a) has been published or has otherwise become available to the general public as part of the public domain without breach of this Agreement; (b) has been furnished or made known to the receiving Party without any obligation to keep it confidential by a third party under circumstances which are not known to the receiving Party to involve a breach of the third party’s obligations to a Party; or (c) was developed independently of information furnished or made available to the receiving Party as contemplated under this Agreement. From and after the Closing Date, Confidential Information disclosed by VTDC to the Partnership that relates to Valero McKee shall become, and be treated as, Confidential Information of the Partnership disclosed to VTDC.

“Conflicts Committee” has the meaning set forth in the Partnership Agreement.

“Consents” means all notices to, authorizations, consents, orders or approvals of, or registrations, declarations or filings with, or expiration of waiting periods imposed by, any Governmental Authority, and any notices to, consents or approvals of any other third party.

“Contract” means any written contract, agreement, indenture, instrument, note, bond, loan, lease, easement, mortgage, franchise, license agreement, purchase order, binding bid or offer, binding term sheet or letter of intent or memorandum, commitment, letter of credit or any other legally binding arrangement, including any amendments or modifications thereof and waivers relating thereto.

“Effective Time” has the meaning set forth in Section 3.1.

“Encumbrance” means any mortgage, pledge, charge, hypothecation, easement, right of purchase, security interest, deed of trust, conditional sales agreement, encumbrance, interest, option, lien, right of first refusal, right of way, defect in title, encroachments or other restriction, whether or not imposed by operation of Applicable Law, any voting trust or voting agreement, stockholder agreement or proxy.

“Environmental Laws” has the meaning set forth in the Omnibus Agreement.

“Environmental Permit” has the meaning set forth in the Omnibus Agreement.

“Financial Statements” has the meaning set forth in Section 4.9(a).

“Fundamental Representations” has the meaning set forth in Section 7.4(a).

“GAAP” means generally accepted accounting principles in the United States of America.

“General Partner” has the meaning set forth in the recitals.

“Governmental Authority” has the meaning set forth in the Omnibus Agreement.

“Hazardous Substance” has the meaning set forth in the Omnibus Agreement.

“Indemnified Costs” means the Partnership Indemnified Costs and the VTDC Indemnified Costs, as applicable.

“Indemnified Party” means the Partnership Indemnified Parties and the VTDC Indemnified Parties.

“Indemnifying Party” has the meaning set forth in Section 7.2.

“Lease Agreement” has the meaning set forth in Section 3.2(c).

“Losses” has the meaning set forth in the Omnibus Agreement.

“Material Adverse Effect” means, with respect to any Person, any material adverse change, circumstance, effect or condition in or relating to the assets, financial condition, results of operations, or business of such Person, or that materially impedes the ability of such Person to consummate the transactions contemplated hereby, other than any change, circumstance, effect or condition in the refining, pipeline transportation or terminaling industries generally (including any change in the prices of crude oil, natural gas, natural gas liquids, feedstocks or refined products or other hydrocarbon products, industry margins or any regulatory changes or changes in Applicable Law) or in United States or global economic conditions or financial markets in general. Any determination as to whether any change, circumstance, effect or condition has a Material Adverse Effect shall be made only after taking into account all effective insurance coverages and effective third-party indemnifications with respect to such change, circumstance, effect or condition.

“Material Contracts” has the meaning set forth in Section 4.12(a).

“McKee Assignment” means that certain Bill of Sale and Assignment Agreement effective as of March 31, 2016, by and between Diamond Shamrock Refining Company, L.P. and Valero McKee attached hereto as Exhibit F.

“McKee Interests” has the meaning set forth in the recitals.

“McKee Terminal Assets” means those crude oil, refined products and intermediates storage tanks and other “Transferred Interests,” each as more particularly described in the McKee Assignment.

“New General Partner Units” has the meaning set forth in Section 2.2(a).

“Omnibus Agreement” has the meaning set forth in the recitals.

“Partnership” has the meaning set forth in the preamble.

“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 Ancillary Documents” means each agreement, document, instrument or certificate to be delivered by the Partnership, or its Affiliates, at the Closing pursuant to Section 3.3 hereof and each other document or Contract entered into by the Partnership, or its Affiliates, contemplated by this Agreement.

“Partnership Indemnified Costs” means any and all Losses that any of the Partnership Indemnified Parties incurs and that arise out of or relate to any breach of a representation, warranty or covenant of VTDC hereunder. Notwithstanding anything in the foregoing to the contrary, Partnership Indemnified Costs shall exclude any and all Special Damages (other than those that are a result of (a) a third-party Claim for Special Damages or (b) the gross negligence or willful misconduct of VTDC).

“Partnership Indemnified Parties” means the Partnership and its Affiliates, including their respective officers, directors, partners, managers, employees, consultants and equity holders.

“Party” and “Parties” have the meanings set forth in the preamble.

“Permits” means permits, licenses, sublicenses, certificates, approvals, Consents, notices, waivers, variances, franchises, registrations, orders, filings, accreditations, or other similar authorizations, including pending applications or filings therefor and renewals thereof, required by any Applicable Law or Governmental Authority or granted by any Governmental Authority.

“Permitted Encumbrances” means with respect to a Person (a) Encumbrances for taxes, impositions, assessments, fees, rents or other governmental charges not yet due and payable or being diligently contested in good faith and which will be paid, if payable, by such Person; (b) Encumbrances of mechanics, laborers, suppliers, workers and materialmen incurred in the ordinary course of business for sums not yet due or being diligently contested in good faith and which will be paid, if payable, by such Person; (c) statutory and contractual Encumbrances incurred in the ordinary course of business securing rental, storage, throughput, handling or other fees, charges or obligations owing from time to time to landlords, warehousemen, common carriers and other third parties; (d) easements, restrictive covenants, reservations and exceptions to title, and any defects, imperfections or irregularities of title that do not and could not reasonably be expected to materially interfere with the use of such Person’s assets, as applicable, in a manner consistent with their use by such Person in the ordinary course of business on the day immediately prior to Closing; (e) terms of Contracts and Permits being assigned or transferred in connection with this Agreement or any Ancillary Document; and (f) the terms of the Partnership Ancillary Documents.

“Person” means an individual or a corporation, firm, limited liability company, partnership, joint venture, trust, unincorporated organization, association, Governmental Authority or other entity.

“Receiving Party Personnel” has the meaning set forth in Section 8.6(d).

“Restated Schedules” has the meaning set forth in the recitals.

“Right-of-Way Consents” has the meaning set forth in the Omnibus Agreement.

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

“Special Damages” means any consequential, indirect, incidental, punitive, exemplary, special or similar damages or lost profits (including any diminution in nature of any investments) suffered directly or indirectly.

“Terminal Services Schedule” has the meaning set forth in Section 3.2(b).

“third-party action” has the meaning set forth in Section 7.2.

“Unit Consideration” has the meaning set forth in Section 2.2(a).

“Valero” has the meaning set forth in the recitals.

“Valero McKee” has the meaning set forth in the recitals.

“Valero Operating” has the meaning set forth in the recitals.

“VMSC” means Valero Marketing and Supply Company, a Delaware corporation.

“VRT” means Valero Refining-Texas, L.P., a Texas limited partnership.

“VTDC” has the meaning set forth in the preamble.

“VTDC Ancillary Documents” means each agreement, document, instrument or certificate to be delivered by VTDC, or its Affiliates, at the Closing pursuant to Section 3.2 hereof and each other document or Contract entered into by VTDC, or its Affiliates, contemplated by this Agreement.

“VTDC Indemnified Costs” means any and all Losses that any of the VTDC Indemnified Parties incurs and that arise out of or relate to any breach of a representation, warranty or covenant of the Partnership hereunder. Notwithstanding anything in the foregoing to the contrary, VTDC Indemnified Costs shall exclude any and all Special Damages (other than those that are a result of (a) a third-party Claim for Special Damages or (b) the gross negligence or willful misconduct of the Partnership).

“VTDC Indemnified Parties” means VTDC and its Affiliates, including Valero, and their respective officers, directors, partners, managers, employees, consultants and equity holders.

“VTDC Tax Obligation” has the meaning set forth in Section 2.3(c).

ARTICLE II

TRANSACTIONS

2.1 Assignment. Subject to all of the terms and conditions of this Agreement and the Assignment Document:

(a) VTDC hereby agrees to contribute, assign, transfer and convey (i) 2.0% of the issued and outstanding McKee Interests to the General Partner and (ii) 98.0% of the issued and outstanding McKee Interests to the Partnership; and

(b) VTDC hereby agrees to cause the General Partner to contribute, assign, transfer and convey such 2.0% of the issued and outstanding McKee Interests to the Partnership;

and the Partnership hereby agrees to accept from VTDC and the General Partner all of such McKee Interests, in each case free and clear of all Encumbrances, other than transfer restrictions under applicable federal and state securities laws.

2.2 Consideration.

(a) In exchange for the contribution of the McKee Interests, the Partnership shall (i) (A) make a cash distribution to VTDC of $204,000,000 (the “Cash Distribution”) and (B) issue 728,775 Common Units to VTDC (the “Unit Consideration”) and (ii) issue 14,873 general partner units representing general partner interests in the Partnership (the “New General Partner Units”) to the General Partner.

(b) The Cash Distribution shall be paid by wire transfer(s) of immediately available funds to the account(s) specified by VTDC, and the Unit Consideration shall be issued to VTDC in book-entry form, in each case within three (3) Business Days of Closing.

2.3 Proration of Certain Taxes.

(a) On the Closing Date, or as promptly as practicable following the Closing Date, but in no event later than 120 calendar days thereafter, the real and personal property taxes with respect to Valero McKee shall be prorated between the Partnership, on the one hand, and VTDC, on the other hand, effective as of the Effective Time, with VTDC being responsible for amounts related to the period prior to but excluding the Effective Time and the Partnership being responsible for amounts related to the period at and after the Effective Time. If the final property tax rate or final assessed value for the current tax year is not established by the Closing Date, the prorations shall be made on the basis of the rate or assessed value in effect for the preceding tax year and shall be adjusted when the exact amounts are determined. All such prorations shall be based upon the most recent available assessed value available prior to the Closing Date.

(b) With respect to any tax return covering a taxable period ending on or before the Closing Date that is required to be filed after the Closing Date with respect to Valero McKee

that is not described in Section 2.3(a), VTDC shall (i) cause such tax return to be prepared; (ii) cause to be included in such tax return all tax items required to be included therein; (iii) furnish a copy of such tax return to the Partnership; (iv) cause such tax return to be filed timely with the appropriate taxing authority; and (v) be responsible for the timely payment (and entitled to any refund) of all taxes due with respect to the period covered by such tax return.

(c) With respect to any tax return covering a taxable period beginning on or before the Closing Date and ending after the Closing Date that is required to be filed after the Closing Date with respect to Valero McKee, the Partnership shall (i) cause such tax return to be prepared; (ii) cause to be included in such tax return all tax items required to be included therein, shall furnish a copy of such tax return to VTDC; (iii) file timely such tax return with the appropriate taxing authority; and (iv) be responsible for the timely payment of all taxes due with respect to the period covered by such tax return. The Partnership shall determine the amount of tax due that is not described in Section 2.3(a) with respect to the portion of the period ending on the Closing Date based on a closing of the books method with respect to Valero McKee (the “VTDC Tax Obligation”), and shall notify VTDC of its determination of the VTDC Tax Obligation. VTDC shall pay to the Partnership an amount equal to the VTDC Tax Obligation not later than five (5) days after the filing of such tax return. Any refund attributable to tax returns filed pursuant to this Section 2.3(c) shall be apportioned between the Partnership and VTDC in a manner consistent with calculation of the VTDC Tax Obligation.

(d) If the Partnership, on the one hand, or VTDC, on the other hand, pays any tax agreed to be borne by the other Party hereunder, such other Party shall promptly reimburse the paying Party for the amounts so paid. If either Party receives any tax refund or credit applicable to a tax paid by the other Party hereunder, the receiving Party shall promptly pay such amounts to the Party entitled thereto.

2.4 Certain Adjustments. On the Closing Date, or as promptly as practicable following the Closing Date, but in no event later than 60 calendar days thereafter, the following items shall be prorated between the Partnership, on the one hand, and VTDC, on the other hand, effective as of the Effective Time, with VTDC being responsible for amounts that relate to the period prior to but excluding the Effective Time, and the Partnership being responsible for amounts that relate to the period at and after the Effective Time: (a) rents and other amounts payable under any Contracts to which Valero McKee is a party or which are otherwise being assigned to the Partnership or its Affiliates by VTDC in connection herewith; (b) fees and charges paid or payable to any Governmental Authority exclusively with respect to Valero McKee or its assets or operations (including under any Permits assigned to the Partnership or its Affiliates hereunder); and (c) charges for water, sewer, telephone, electricity, natural gas and other utilities serving any assets or operations of Valero McKee. If any such amounts are not known at Closing, then such proration shall be made based on VTDC’s good faith estimate, with a true-up payment to be made from VTDC to the Partnership, or vice-versa, as promptly as practicable after exact amounts are determined.

ARTICLE III

CLOSING

3.1 Closing. The closing of the transactions contemplated hereby (the “Closing”) shall take place on April 1, 2016 (the “Closing Date”), and the Closing is deemed to be effective as of 12:01 a.m., San Antonio, Texas time, on the Closing Date (the “Effective Time”).

3.2 Deliveries by VTDC. At the Closing, VTDC shall deliver, or cause to be delivered, to the Partnership the following:

(a) counterparts of the Restated Schedules substantially in the form attached hereto as Exhibit A, duly executed by Valero and each applicable subsidiary of Valero (excluding the General Partner and the Partnership and its subsidiaries);

(b) a counterpart of the Terminal Services Schedule (McKee Terminal) substantially in the form attached hereto as Exhibit B (the “Terminal Services Schedule”), duly executed by VMSC;

(c) a counterpart of the lease agreement substantially in the form attached hereto as Exhibit C (the “Lease Agreement”), duly executed by VTDC or the Affiliates of VTDC that are parties thereto;

(d) a counterpart of the Assignment of Membership Interests, substantially in the form attached hereto as Exhibit D (the “Assignment Document”), duly executed by VTDC and the General Partner;

(e) counterparts of the Amendment and Restatement of Exhibits to Amended and Restated Services and Secondment Agreement substantially in the form attached hereto as Exhibit E (the “Amended Services and Secondment Exhibits”), duly executed by Valero Services, Inc., Valero Refining Company-Tennessee, L.L.C. and VRT; and

(f) an executed statement described in Treasury Regulation § 1.1445-2(b)(2) certifying that VTDC is not a foreign person within the meaning of the Internal Revenue Code and the Treasury Regulations promulgated thereunder.

3.3 Deliveries by the Partnership. At the Closing, the Partnership shall deliver, or cause to be delivered, to VTDC the following:

(a) counterparts of the Restated Schedules, duly executed by the General Partner, the Partnership and its applicable subsidiaries;

(b) a counterpart of the Terminal Services Schedule, duly executed by Valero Operating;

(c) counterparts of the Lease Agreement, duly executed by the Partnership or the Affiliates of the Partnership that are parties thereto;

(d) a counterpart of the Assignment Document, duly executed by the Partnership; and

(e) a counterpart of the Amended Services and Secondment Exhibits, duly executed by the General Partner.

ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF VTDC

VTDC hereby represents and warrants to the Partnership that, as of the date of this Agreement:

4.1 Organization; Ownership; Preemptive Rights.

(a) VTDC is a corporation duly incorporated and validly existing, under the Applicable Laws of the State of Delaware. VTDC has full corporate power and authority to carry on its business and to own and use the assets owned or operated by it and is in good standing under the Applicable Laws of each jurisdiction where such qualification is required, except where the lack of such qualification, individually or in the aggregate, would not have a Material Adverse Effect with respect to VTDC, Valero McKee or the Business.

(b) Valero McKee is a limited liability company duly formed and validly existing, under the Applicable Laws of the State of Delaware. Valero McKee has full limited liability company power and authority to carry on its business and to own and use the assets owned or operated by it and is in good standing under the Applicable Laws of each jurisdiction where such qualification is required, except where the lack of such qualification, individually or in the aggregate, would not have a Material Adverse Effect with respect to Valero McKee or the Business. Valero McKee does not own or hold an ownership interest in any other entities. VTDC has heretofore delivered to the Partnership true, complete and correct copies of the certificate of formation and limited liability company agreement of Valero McKee, and no breach or violation thereof has occurred and is continuing.

(c) The McKee Interests have been duly authorized and validly issued in accordance with the limited liability company agreement of Valero McKee, and are fully paid (to the extent required under the limited liability company agreement of Valero McKee) and nonassessable (except as such nonassessability may be affected by matters described in Sections 18-607 and 18-804 of the Delaware Limited Liability Company Act). VTDC owns the McKee Interests free and clear of all Encumbrances, other than transfer restrictions under applicable federal and state securities laws. There is no other membership or equity interest (or any interest convertible into or exchangeable or exercisable for any membership or equity interest) in Valero McKee that is outstanding.

(d) No Person (other than the Partnership and its subsidiaries) has any statutory or contractual preemptive or other right of any kind (including any right of first offer or refusal) to acquire any securities of Valero McKee.

4.2 Authorization. VTDC and each of its Affiliates party to a VTDC Ancillary Document has full corporate, limited partnership or limited liability company power and authority, as the case may be, to execute, deliver, and perform this Agreement and any VTDC Ancillary Documents to which it is a party. The execution, delivery and performance of this Agreement by VTDC and of the VTDC Ancillary Documents by each of VTDC and its Affiliates party thereto and the consummation by VTDC and its Affiliates of the transactions contemplated hereby and thereby, have been duly authorized by all necessary corporate, limited partnership or limited liability company action, as the case may be. This Agreement has been duly executed and delivered by VTDC and constitutes, and each VTDC Ancillary Document executed or to be executed by VTDC or any Affiliate thereof party thereto has been, or when executed will be, duly executed and delivered by VTDC or such Affiliate thereof party thereto and constitutes, or when executed and delivered will constitute, a valid and legally binding obligation of each such party thereto, enforceable against each such party thereto in accordance with their terms, except to the extent that such enforceability may be limited by (a) applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or other similar Applicable Laws affecting creditors’ rights and remedies generally and (b) equitable principles which may limit the availability of certain equitable remedies (such as specific performance) in certain instances.

4.3 No Conflicts or Violations; No Consents or Approvals Required. Except with respect to Right-of-Way Consents, the execution, delivery and performance of this Agreement and each VTDC Ancillary Document by VTDC and its Affiliates party thereto does not, and the consummation of the transactions contemplated hereby and thereby will not, (a) violate, conflict with, or result in any breach of any provision of the certificates of incorporation or bylaws or similar governing documents of VTDC or such Affiliates; (b) violate in any material respect any Applicable Law to which VTDC or such Affiliates is subject or to which any of their respective assets are subject; or (c) result in a breach of, constitute a default under, result in the acceleration of, result in the loss of a material benefit under, create in any party the right to accelerate, terminate, modify, or cancel, or require any notice or trigger any rights to payment or other compensation under (in each case, with or without notice or lapse of time or both) any Contract to which VTDC or Valero McKee is a party or by which any such entity is bound, or that could prevent or materially delay the consummation of the transactions contemplated by this Agreement. Except with respect to Right-of-Way Consents and Environmental Permits, no Consent of any Governmental Authority or third party is required in connection with the execution, delivery and performance of this Agreement or any VTDC Ancillary Document by VTDC and its Affiliates party thereto or the consummation of the transactions contemplated hereby or thereby.

4.4 Absence of Litigation; Compliance with Law. Except with respect to any Claims under any Environmental Laws which are addressed exclusively in Section 4.11, there is no Claim pending or, to the knowledge of VTDC, threatened against VTDC, Valero McKee or any of their Affiliates or relating to any of their respective assets which, if adversely determined, would, individually or in the aggregate, have a Material Adverse Effect with respect to Valero McKee or the Business. To the knowledge of VTDC, the operations and business of Valero McKee have been conducted by Valero McKee in substantial compliance with all Applicable Laws except (a) as would not, individually or in the aggregate, have a Material Adverse Effect with respect to Valero McKee

or the Business and (b) with respect to Environmental Laws, which are addressed exclusively in Section 4.11.

4.5 Bankruptcy. There are no bankruptcy, reorganization or rearrangement proceedings under any bankruptcy, insolvency, reorganization, moratorium or other similar Applicable Laws with respect to creditors pending against, being contemplated by, or, to the knowledge of VTDC, threatened, against VTDC or Valero McKee.

4.6 Brokers and Finders. No investment banker, broker, finder, financial advisor or other intermediary has been (directly or indirectly) retained by or is authorized to act on behalf of VTDC or its Affiliates who is entitled to receive from the Partnership any fee or commission in connection with the transactions contemplated by this Agreement.

4.7 Tax Matters.

(a) Except as would not result in a Material Adverse Effect with respect to Valero McKee or the Business, (i) all tax returns required to be filed by or with respect to Valero McKee and its assets and operations have been duly filed on a timely basis (taking into account all extensions of due dates) and such tax returns are true, correct and complete; (ii) all taxes owed by Valero McKee or with respect to its assets and operations which are or have become due have been timely paid in full; (iii) there are no Encumbrances for taxes on any of the assets of Valero McKee, other than those not yet due and payable and which will, if payable, be paid by VTDC; (iv) there is not in force any extension of time with respect to the due date for the filing of any tax return of or with respect to Valero McKee nor is there any outstanding agreement or waiver by or with respect to Valero McKee extending the period for assessment or collection of any tax; and (v) there is no pending or, to the knowledge of VTDC, threatened action, audit, required for ruling, proceeding or investigation for assessment or collection of tax and no tax assessment, deficiency or adjustment has been asserted or proposed in writing with respect to Valero McKee or its assets that has not been resolved.

(b) Valero McKee is not a party to any tax allocation or tax sharing agreement that will be binding on such entity after Closing.

(c) Immediately prior to Closing, Valero McKee will be a partnership or disregarded entity for federal income tax purposes.

4.8 Title to and Condition of Assets.

(a) Valero McKee has good and valid title to its assets (including those comprising the Business), free and clear of all Encumbrances other than Permitted Encumbrances. The assets of Valero McKee, when considered together with the services to be provided pursuant to the Ancillary Documents, are sufficient to conduct the operations and business historically conducted by Valero and its Affiliates with respect to the Business.

(b) Except as would not, individually or in the aggregate, have a Material Adverse Effect with respect to Valero McKee or the Business, to the knowledge of VTDC, the assets owned or operated by Valero McKee are, in the aggregate, in good operating condition and repair (normal

wear and tear excepted), free from any material defects (other than Permitted Encumbrances) and suitable for the purposes for which they are currently used.

4.9 Financial Matters.

(a) VTDC has made available to the Partnership true, complete and correct copies of the unaudited balance sheet of the Business as of December 31, 2015, and the related unaudited statement of income for the year then ended (collectively, the “Financial Statements”). Except as noted in the Financial Statements (including any notes thereto), the Financial Statements have been prepared in accordance with GAAP applied on a consistent basis throughout the periods covered thereby and present fairly the financial condition of the Business as of such dates and the results of operations of the Business for such periods (other than for changes in accounting principles disclosed therein and, with respect to the unaudited financial statements, for normal and recurring year-end adjustments and the absence of general and administrative expense allocations and financial footnotes).

(b) There are no liabilities or obligations of Valero McKee (whether accrued, absolute, contingent or otherwise) and there are no facts or circumstances that would result in any such liabilities or obligations, other than (i) liabilities or obligations reflected or reserved against in the Financial Statements; (ii) liabilities or obligations incurred in the ordinary course of business consistent with past practices since December 31, 2015; (iii) liabilities or obligations arising under executory Contracts entered into in the ordinary course of business consistent with past practices; (iv) liabilities not required to be presented by GAAP in unaudited financial statements; (v) liabilities or obligations under this Agreement; and (vi) other liabilities or obligations which, in the aggregate, would not have a Material Adverse Effect with respect to Valero McKee or the Business.

4.10 No Adverse Changes. Since December 31, 2015, except as disclosed in Valero’s public filings with the Securities and Exchange Commission, there has not been any Material Adverse Effect with respect to Valero McKee or the Business.

4.11 Environmental Matters. Except as do not (individually or in the aggregate) have a Material Adverse Effect with respect to Valero McKee or the Business, Valero McKee and the Business (a) are in substantial compliance with all applicable Environmental Laws and Environmental Permits; (b) are not the subject of any outstanding administrative or judicial order, judgment, agreement or arbitration award from any Governmental Authority under any Environmental Law relating to Valero McKee or its assets and requiring remediation or the payment of a fine or penalty; (c) have all Environmental Permits needed to operate the assets of Valero McKee as they have been operated immediately prior to Closing; and (d) are not subject to any pending Claims under any Environmental Laws with respect to which VTDC or Valero McKee have been notified in writing by or on behalf of a plaintiff or claimant.

4.12 Contracts.

(a) VTDC has made available to the Partnership a correct and complete copy of (i) each Contract (other than any Contract granting any Permits, servitudes, easements or rights-of-way) materially affecting Valero McKee and its assets, the loss of which could have a Material

Adverse Effect with respect to Valero McKee or the Business and (ii) each other Contract to which VTDC or Valero McKee is a party that provides for revenues to or commitments of Valero McKee or with respect to its assets in an amount greater than $100,000 during a calendar year. The contracts described in clauses (i) and (ii) are referred to herein as the “Material Contracts.”

(b) Each Material Contract is in full force and effect, and none of VTDC, Valero McKee or, to the knowledge of VTDC, any other party, is in breach or default thereunder and no event has occurred that upon receipt of notice or lapse of time or both would constitute any breach or default thereunder, except for such breaches or defaults as would not, individually or in the aggregate, have a Material Adverse Effect with respect to Valero McKee or the Business.

4.13 Employees. Valero McKee has no employees.

4.14 Investment Company Act. Neither of VTDC or Valero McKee is subject to regulation under the Investment Company Act of 1940, as amended.

4.15 Acquisition as Investment. VTDC is acquiring the Unit Consideration for its own account as an investment without the present intent to sell or offer the same to any other Person or effect a distribution of the Unit Consideration. VTDC acknowledges that the Unit Consideration has not been registered pursuant to the Securities Act or any state securities laws, and that none of the Unit Consideration may be transferred except pursuant to registration or an applicable exemption thereunder. VTDC is an “accredited investor” as defined under Rule 501 promulgated under the Securities Act.

4.16 Conflicts Committee Matters.

(a) No representation or warranty or other statement made by VTDC in this Agreement, the VTDC Ancillary Documents, the certificates delivered pursuant to this Agreement or otherwise in connection with the transactions contemplated by this Agreement contains any untrue statement of material fact or omits to state a material fact necessary to make the statements in this Agreement or therein, in light of the circumstances in which they were made, not misleading.

(b) VTDC has not intentionally withheld disclosure from the Conflicts Committee or its advisors of any fact that would, individually or in the aggregate, have a Material Adverse Effect with respect to Valero McKee or the Business.

(c) The projections and budgets provided in writing to the Conflicts Committee (including those provided to any financial advisor to the Conflicts Committee) as part of the Conflicts Committee’s review in connection with this Agreement have a reasonable basis and are consistent with VTDC’s management’s current expectations with respect to Valero McKee and the Business. All other financial and operational information provided in writing to the Conflicts Committee (including to any financial advisor to the Conflicts Committee) as part of its review of the proposed transaction is derived from and is consistent with VTDC’s, and Valero McKee’s books and records, as applicable.

4.17 Opportunity for Independent Investigation. VTDC, together with its Affiliates, has such knowledge and experience in financial and business matters that it is capable of evaluating the merits and risks of the transactions contemplated herein and in the Ancillary Documents. VTDC has conducted its own independent review and analysis of the Partnership and the Unit Consideration, including with respect to the Partnership’s liabilities, results of operations, financial condition and prospects, and acknowledges that it has been provided access to personnel, properties, premises and records of the Partnership. In entering into this Agreement, VTDC has relied solely upon the representations, warranties and covenants contained herein and in the Ancillary Documents and upon its own investigation and analysis of the Partnership (such investigation and analysis having been performed by VTDC).

ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE PARTNERSHIP

The Partnership hereby represents and warrants to VTDC that, as of the date of this Agreement:

5.1 Organization. The Partnership is a limited partnership, duly formed and validly existing and in good standing under the Applicable Laws of the State of Delaware.

5.2 Authorization. The Partnership and each Affiliate thereof party to a Partnership Ancillary Document has full limited partnership or limited liability company power and authority to execute, deliver, and perform this Agreement and any Partnership Ancillary Documents to which it is a party. The execution, delivery, and performance by the Partnership of this Agreement and by the Partnership and each Affiliate thereof party to a Partnership Ancillary Document of the Partnership Ancillary Documents to which it is a party and the consummation by the Partnership of the transactions contemplated hereby and thereby, have been duly authorized by all necessary limited partnership or limited liability company action as the case may be. This Agreement has been duly executed and delivered by the Partnership and constitutes, and each Partnership Ancillary Document executed or to be executed by the Partnership (or Affiliate thereof party thereto) has been, or when executed will be, duly executed and delivered by the Partnership (or Affiliate thereof party thereto) and constitutes, or when executed and delivered will constitute, a valid and legally binding obligation of the Partnership (or Affiliate thereof party thereto), enforceable against such party in accordance with their terms, except to the extent that such enforceability may be limited by (a) applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or other similar Applicable Laws affecting creditors’ rights and remedies generally and (b) equitable principles which may limit the availability of certain equitable remedies (such as specific performance) in certain instances.

5.3 Validly Issued Units. Upon issuance in connection with the Closing, the Unit Consideration and the New General Partner Units will be validly issued, fully paid (to the extent required under the Partnership Agreement) and nonassessable (except as such nonassessability may be affected by Sections 17-303, 17-607 and 17-804 of the Delaware Revised Limited Partnership Act) and free of any preemptive or similar rights.

5.4 No Conflicts or Violations; No Consents or Approvals Required. The execution, delivery and performance by the Partnership of this Agreement and by the Partnership and each Affiliate thereof party to a Partnership Ancillary Document of the Partnership Ancillary Documents to which it is a party does not, and the consummation of the transactions contemplated hereby and thereby will not, (a) violate, conflict with, or result in any breach of any provision of the certificate of limited partnership or the agreement of the limited partnership or other similar governing documents of the Partnership or such Affiliates; (b) violate in any material respect any Applicable Law to which the Partnership or such Affiliates is subject; or (c) result in a breach of, constitute a default under, result in the acceleration of, create in any party the right to accelerate, terminate, modify, or cancel, or require any notice or trigger any rights to payment or other compensation under any Contract to which the Partnership is a party or by which the Partnership is bound that could prevent or materially delay the consummation of the transactions contemplated by this Agreement. Except with respect to Right-of-Way Consents and Environmental Permits, no Consent of any Governmental Authority is required in connection with the execution, delivery and performance by the Partnership of this Agreement and by the Partnership and each Affiliate thereof party to a Partnership Ancillary Document of the Partnership Ancillary Documents to which it is a party or the consummation of the transactions contemplated hereby or thereby.

5.5 Absence of Litigation. There is no Claim pending or, to the knowledge of the Partnership, threatened against the Partnership or its Affiliates relating to the transactions contemplated by this Agreement or the Ancillary Documents or which, if adversely determined, would reasonably be expected to materially impair the ability of the Partnership to perform its obligations and agreements under this Agreement or the Partnership Ancillary Documents to which it is a party and to consummate the transactions contemplated hereby and thereby.

5.6 Brokers and Finders. No investment banker, broker, finder, financial advisor or other intermediary has been (directly or indirectly) retained by or is authorized to act on behalf of the Partnership or its Affiliates who is entitled to receive from VTDC any fee or commission in connection with the transactions contemplated by this Agreement.

5.7 Opportunity for Independent Investigation. The Partnership, together with its Affiliates, has such knowledge and experience in financial and business matters that it is capable of evaluating the merits and risks of the transactions contemplated herein and in the Ancillary Documents. The Partnership has conducted its own independent review and analysis of Valero McKee, including with respect to its liabilities, results of operations, financial condition and prospects, and acknowledges that the Partnership has been provided access to personnel, properties, premises and records of VTDC and Valero McKee for such purpose. In entering into this Agreement, the Partnership has relied solely upon the representations, warranties and covenants contained herein and in the Ancillary Documents and upon its own investigation and analysis of Valero McKee (such investigation and analysis having been performed by the Partnership).

5.8 Acquisition as Investment. The Partnership is acquiring the McKee Interests for its own account as an investment without the present intent to sell or offer the same to any other Person or effect a distribution of the McKee Interests, other than the conveyance of the McKee Interests to Valero Operating. The Partnership acknowledges that the McKee Interests are not registered

pursuant to the Securities Act or any state securities laws, and that none of the McKee Interests may be transferred except pursuant to registration or an applicable exemption thereunder. The Partnership is an “accredited investor” as defined under Rule 501 promulgated under the Securities Act.

ARTICLE VI
COVENANTS

6.1 Additional Agreements. Subject to the terms and conditions of this Agreement, the Ancillary Documents and the Omnibus Agreement, each of the Parties shall use its commercially reasonable efforts to do, or cause to be taken all action and to do, or cause to be done, all things necessary, proper or advisable under Applicable Laws to consummate and make effective the transactions contemplated by this Agreement. If at any time after the Closing Date any further action is necessary or desirable to carry out the purposes of this Agreement, the Parties and their duly authorized representatives shall use commercially reasonable efforts to promptly take all such action.

6.2 Further Assurances. After the Closing, each Party shall use its commercially reasonable efforts to take such further actions, including obtaining or transferring to the other Party all necessary Permits, Consents, orders and Contracts, and executing and causing its Affiliates to execute such further documents, as may be necessary or reasonably requested by the other Party in order to effectuate the intent of this Agreement and the Ancillary Documents and to provide such other Party with the intended benefits of this Agreement and the Ancillary Documents. Without limiting the generality of the foregoing, the Parties acknowledge that the Parties have used their good faith efforts to identify all of the assets and operations to be assigned, transferred, contributed and conveyed to the Partnership in connection with this Agreement. However, due to the age of some of the assets or operations and the difficulties in locating appropriate data with respect to some of the assets included in these operations, it is possible that some of the assets intended to be assigned, transferred, contributed or conveyed ultimately to the Partnership were not identified and therefore are not assigned, transferred, contributed or conveyed (directly or indirectly) to the Partnership as of the Effective Time. To the extent that any assets were not identified but form an integral part of the assets and operations of Valero McKee and are not needed for the conduct of any of the businesses conducted by Valero and its Affiliates, then the intent of the Parties is that all such unidentified assets are intended to be assigned, transferred, contributed and conveyed to the Partnership pursuant to this Agreement. To the extent any such assets are identified at a later date, the Parties shall take all appropriate action required in order to assign, transfer, contribute or convey such assets to the Partnership. Likewise, to the extent that any assets or operations that are indirectly assigned, transferred, contributed or conveyed to the Partnership hereunder are later identified by the Parties as assets and operations that the Parties did not intend to assign, transfer, contribute or convey to the Partnership, the Parties shall take all appropriate action required to assign, transfer, contribute or convey such assets and operations to VTDC.

6.3 Cooperation on Tax Matters. Following the Closing Date, the Parties shall cooperate fully with each other and shall make available to the other, as reasonably requested and at the expense of the requesting Party, and to any Governmental Authority responsible for the administration of any tax, all information, records or documents relating to tax liabilities or potential tax liabilities of Valero McKee for all periods at or prior to the Effective Time and any information which may

be relevant to determining the amount payable hereunder, and shall preserve all such information, records and documents at least until the expiration of any applicable statute of limitations or extensions thereof.

6.4 Cooperation for Litigation and Other Actions. Each Party shall cooperate reasonably with each other Party, at the requesting Party’s expense (but including only out-of-pocket expenses to unaffiliated third parties, photocopying and delivery costs and not the costs incurred by either Party for the wages or other benefits paid to its officers, directors or employees), in furnishing reasonably available information, testimony and other assistance in connection with any Claims or other disputes involving any of the Parties hereto (other than in connection with disputes between the Parties).

6.5 Retention of and Access to Books and Records.

(a) As promptly as practicable and in any event before 90 days after the Closing Date, VTDC will deliver or cause to be delivered to the Partnership, the Books and Records that are in the possession or control of VTDC or its Affiliates.

(b) The Partnership agrees to afford VTDC and its Affiliates and their respective accountants, counsel and other designated individuals, during normal business hours, upon reasonable request, at a mutually agreeable time, full access to and the right to make copies of the Books and Records at no cost to VTDC or its Affiliates (other than for reasonable out-of-pocket expenses); provided that such access will not be construed to require the disclosure of Books and Records that would cause the waiver of any attorney-client, work product or like privilege; provided, further, that in the event of any litigation, nothing herein shall limit either Party’s rights of discovery under Applicable Law. Without limiting the generality of the preceding sentences, the Partnership agrees to provide VTDC and its Affiliates reasonable access to and the right to make copies of the Books and Records after the Closing for the purposes of assisting VTDC and its Affiliates (i) in complying with VTDC’s obligations under this Agreement and any Ancillary Document; (ii) in adjusting, prorating and settling the charges and credits provided for under this Agreement and any Ancillary Document; (iii) in preparing tax returns; (iv) in responding to or disputing any tax audit; (v) in asserting, defending or otherwise dealing with any Claim or dispute, known or unknown, under this Agreement; (vi) in asserting, defending or otherwise dealing with any third-party Claim or dispute by or against VTDC or its Affiliates relating to Valero McKee; or (vii) in performing their obligations under the Omnibus Agreement.

(c) Notwithstanding the foregoing provisions of this Section 6.5 or anything else to the contrary in this Agreement, with respect to any Books and Records the transfer or other disclosure of which to the Partnership would waive (or would reasonably risk the waiver of) any attorney/client, work product, tax practitioner, audit or other privilege relating to the Retained Liabilities, VTDC shall not be required to transfer such Books and Records (or any copies thereof) to the Partnership until the Parties enter into a mutually-agreed joint defense agreement to allow for the sharing of common defense privileged materials.

6.6 NYSE. Prior to the issuance of the Unit Consideration, the Partnership shall cause the Unit Consideration to be approved for listing on the New York Stock Exchange.

ARTICLE VII
INDEMNIFICATION

7.1 Indemnification. From and after the Closing and subject to the provisions of this Article VII, (a) VTDC agrees to indemnify and hold harmless the Partnership Indemnified Parties from and against any and all Partnership Indemnified Costs and (b) the Partnership agrees to indemnify and hold harmless the VTDC Indemnified Parties from and against any and all VTDC Indemnified Costs. For the avoidance of doubt, but subject to Section 7.5, the foregoing indemnification is intended to be in addition to and not in limitation of any indemnification to which the Parties may be entitled under the Ancillary Documents. For purposes of calculating Indemnified Costs (but not determining whether a breach has occurred), no effect shall be given to any qualifications of representations or warranties as to materiality or Material Adverse Effect.

7.2 Defense of Third-Party Claims. An Indemnified Party shall give prompt written notice to VTDC or the Partnership, as applicable (the “Indemnifying Party”), of the commencement or assertion of any Claim by a third party (collectively, a “third-party action”) in respect of which such Indemnified Party seeks indemnification hereunder. Any failure so to notify the Indemnifying Party shall not relieve the Indemnifying Party from any liability that it, he, or she may have to such Indemnified Party under this Article VII unless the failure to give such notice materially and adversely prejudices the Indemnifying Party. The Indemnifying Party shall have the right to assume control of the defense of, settle, or otherwise dispose of such third-party action on such terms as it deems appropriate; provided, however, that:

(a) The Indemnified Party shall be entitled, at its own expense, to participate in the defense of such third-party action (provided, however, that the Indemnifying Party shall pay the attorneys’ fees of the Indemnified Party if (i) the employment of separate counsel shall have been authorized in writing by the Indemnifying Party in connection with the defense of such third-party action; (ii) the Indemnifying Party shall not have employed counsel reasonably satisfactory to the Indemnified Party to have charge of such third-party action; (iii) the Indemnified Party shall have reasonably concluded that there may be defenses available to such Indemnified Party that are different from or additional to those available to the Indemnifying Party; or (iv) the Indemnified Party’s counsel shall have advised the Indemnified Party in writing, with a copy delivered to the Indemnifying Party, that there is a material conflict of interest that could violate applicable standards of professional conduct to have common counsel);

(b) The Indemnifying Party shall obtain the prior written approval of the Indemnified Party before entering into or making any settlement, compromise, admission, or acknowledgment of the validity of such third-party action or any liability in respect thereof if, pursuant to or as a result of such settlement, compromise, admission, or acknowledgment, injunctive or other equitable relief would be imposed against the Indemnified Party or if, in the opinion of the Indemnified Party, such settlement, compromise, admission, or acknowledgment could have a Material Adverse Effect with respect to the Indemnified Party;

(c) The Indemnifying Party shall not consent to the entry of any judgment or enter into any settlement without the consent of the Indemnified Party that does not include as an

unconditional term thereof the giving by each claimant or plaintiff to the Indemnified Party of a release from all liability in respect of such third-party action; and

(d) The Indemnifying Party shall not be entitled to control (but shall be entitled to participate at its own expense in the defense of), and the Indemnified Party shall be entitled to have sole control over, the defense or settlement, compromise, admission, or acknowledgment of any third-party action (i) as to which the Indemnifying Party fails to assume the defense within a reasonable length of time or (ii) to the extent the third-party action seeks an order, injunction, or other equitable relief against the Indemnified Party which, if successful, would materially adversely affect the business, operations, assets, or financial condition of the Indemnified Party; provided, however, that the Indemnified Party shall make no settlement, compromise, admission, or acknowledgment that would give rise to liability on the part of any Indemnifying Party without the prior written consent of such Indemnifying Party.

The Parties shall extend reasonable cooperation in connection with the defense of any third-party action pursuant to this Article VII and, in connection therewith, shall furnish such records, information, and testimony and attend such conferences, discovery proceedings, hearings, trials, and appeals as may be reasonably requested.

7.3 Direct Claims. In any case in which an Indemnified Party seeks indemnification hereunder which is not subject to Section 7.2 because no third-party action is involved, the Indemnified Party shall notify the Indemnifying Party in writing of any Indemnified Costs which such Indemnified Party claims are subject to indemnification under the terms hereof. Subject to the limitations set forth in Section 7.4(a), the failure of the Indemnified Party to exercise promptness in such notification shall not amount to a waiver of such claim unless the resulting delay materially prejudices the position of the Indemnifying Party with respect to such claim.

7.4 Limitations. The following provisions of this Section 7.4 shall limit the indemnification obligations hereunder:

(a) The Indemnifying Party shall not be liable for any Indemnified Costs pursuant to this Article VII unless a written claim for indemnification in accordance with Section 7.2 or Section 7.3 is given by the Indemnified Party to the Indemnifying Party with respect thereto on or before 5:00 p.m., San Antonio, Texas time, on or prior to the date that is 18 months after of the Closing Date; provided, however, that written claims for indemnification (i) for Indemnified Costs arising out of a breach of any representation or warranty contained in Sections 4.1, 4.2, 4.6, 5.1, 5.2 and 5.6 (the “Fundamental Representations”) may be made at any time and (ii) for Indemnified Costs arising out of a breach of any covenant may be made at any time prior to the expiration of such covenant according to its terms.

(b) An Indemnifying Party shall not be obligated to pay for any Indemnified Costs under this Article VII until the amount of all such Indemnified Costs exceeds, in the aggregate, $1,800,000 (with the Indemnifying Party only being responsible for Indemnified Costs in excess of such amount). The aggregate liability of an Indemnifying Party under this Article VII shall not exceed $36,000,000. The limitations in the previous two sentences shall not apply to Indemnified Costs to the extent such costs arise out of a breach of any Fundamental Representations.

(c) Each Party acknowledges and agrees that, after the Closing Date, notwithstanding any other provision of this Agreement to the contrary, the Partnership’s and the other Partnership Indemnified Parties’ and VTDC’s and the other VTDC Indemnified Parties’ sole and exclusive remedy with respect to the Indemnified Costs shall be in accordance with, and limited by, the provisions set forth in this Article VII.

7.5 Remedies Under Ancillary Documents. Each Party acknowledges and agrees that this Article VII is not the remedy for and does not limit the Parties’ remedies for matters covered by the indemnification provisions contained in the Ancillary Documents. Any indemnification obligation of VTDC to the Partnership Indemnified Parties, on the one hand, or the Partnership to the VTDC Indemnified Parties, on the other hand, pursuant to this Article VII shall be reduced by an amount equal to any indemnification recovery by such Indemnified Parties pursuant to the other Ancillary Documents between the Parties to the extent that such other indemnification recovery arises out of the same event or circumstance giving rise to the indemnification obligation of VTDC or the Partnership, respectively, hereunder.

7.6 Tax Related Adjustments and Tax Reporting of Transactions.

(a) VTDC and the Partnership agree that any payment of Indemnified Costs made hereunder will be treated by the Parties on their tax returns as an adjustment to the Cash Distribution.

(b) Except as otherwise provided in clause (iii) of this Section 7.6(b), VTDC and the Partnership further acknowledge and agree that the transactions described in this Agreement are properly characterized as transactions described in Sections 721(a) and 731 of the Code and agree to file all tax returns in a manner consistent with such treatment. In this regard, VTDC and the Partnership agree that the Cash Distribution shall be treated (i) as a “debt-financed transfer” to VTDC under Treasury Regulation Section 1.707-5(b) to the extent the cash is traceable under the principles of Treasury Regulation Section 1.163-8T to VTDC’s allocable share, determined under Treasury Regulation Section 1.707-5(b)(2), of indebtedness of the Partnership, (ii) as a reimbursement of capital expenditures (within the meaning of Treasury Regulation Section 1.707-4(d)) with respect to the tankage and related assets owned by Valero McKee, to the extent that VTDC provides to the Partnership on or before January 15, 2017 a statement that states the amount of qualifying capital expenditures and evidence satisfactory to the Partnership documenting the capital expenditures and their qualification, and (iii) as the proceeds of a sale by assets by VTDC to the Partnership to the extent clause (i), clause (ii), or any other exception to the “disguised sale” rules under Section 707 and the Treasury Regulations thereunder, are inapplicable. The Parties acknowledge that Valero McKee is disregarded for federal income tax purposes as an entity apart from VTDC. Except with the prior written consent of VTDC, the Partnership agrees to act at all times in a manner consistent with the foregoing intended treatment of the Cash Distribution, including, if required, disclosing the distribution of the Cash Distribution in accordance with the requirements of Treasury Regulation Section 1.707-3(c)(2).

7.7 Express Negligence Rule. THE FOREGOING INDEMNITIES ARE INTENDED TO BE ENFORCEABLE AGAINST THE PARTIES IN ACCORDANCE WITH THE EXPRESS TERMS AND SCOPE THEREOF NOTWITHSTANDING ANY EXPRESS NEGLIGENCE

RULE OR ANY SIMILAR DIRECTIVE THAT WOULD PROHIBIT OR OTHERWISE LIMIT INDEMNITIES BECAUSE OF THE SOLE, CONCURRENT, ACTIVE OR PASSIVE NEGLIGENCE, STRICT LIABILITY OR FAULT OF ANY OF THE INDEMNIFIED PARTIES.

ARTICLE VIII
MISCELLANEOUS

8.1 WAIVERS AND DISCLAIMERS. NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN THIS AGREEMENT, EXCEPT FOR THE EXPRESS REPRESENTATIONS AND WARRANTIES AND OTHER COVENANTS AND AGREEMENTS MADE BY THE PARTIES IN THIS AGREEMENT, THE ANCILLARY DOCUMENTS AND THE OMNIBUS AGREEMENT, THE PARTIES HERETO ACKNOWLEDGE AND AGREE THAT NONE OF THE PARTIES HAS MADE, DOES NOT MAKE, AND EACH SUCH PARTY SPECIFICALLY NEGATES AND DISCLAIMS, ANY REPRESENTATIONS, WARRANTIES, PROMISES, COVENANTS, AGREEMENTS OR GUARANTIES OF ANY KIND OR CHARACTER WHATSOEVER, WHETHER EXPRESS, IMPLIED OR STATUTORY, ORAL OR WRITTEN, PAST OR PRESENT, REGARDING (A) THE VALUE, NATURE, QUALITY OR CONDITION OF VALERO MCKEE OR ITS ASSETS, INCLUDING THE WATER, SOIL, GEOLOGY OR ENVIRONMENTAL CONDITION OF THE ASSETS OF VALERO MCKEE GENERALLY, THE PRESENCE OR LACK OF HAZARDOUS SUBSTANCES OR OTHER MATTERS ON THE ASSETS OF VALERO MCKEE, (B) THE INCOME TO BE DERIVED FROM VALERO MCKEE OR ITS ASSETS, (C) THE SUITABILITY OF THE ASSETS OF VALERO MCKEE FOR ANY AND ALL ACTIVITIES AND USES THAT MAY BE CONDUCTED THEREON, (D) THE COMPLIANCE OF OR BY THE ASSETS OF VALERO MCKEE OR THEIR OPERATION WITH ANY APPLICABLE LAWS (INCLUDING ANY ZONING, ENVIRONMENTAL PROTECTION, POLLUTION OR LAND USE LAWS, RULES, REGULATIONS, ORDERS OR REQUIREMENTS) OR (E) THE HABITABILITY, MERCHANTABILITY, MARKETABILITY, PROFITABILITY OR FITNESS FOR A PARTICULAR PURPOSE OF THE ASSETS OF VALERO MCKEE. EXCEPT TO THE EXTENT PROVIDED IN THIS AGREEMENT, THE ANCILLARY DOCUMENTS OR THE OMNIBUS AGREEMENT, NONE OF THE PARTIES IS LIABLE OR BOUND IN ANY MANNER BY ANY ORAL OR WRITTEN STATEMENTS, REPRESENTATIONS OR INFORMATION PERTAINING TO VALERO MCKEE OR ITS ASSETS FURNISHED BY ANY AGENT, EMPLOYEE, SERVANT OR THIRD PARTY. THIS SECTION 8.1 SHALL SURVIVE THE ASSIGNMENT, TRANSFER, CONTRIBUTION OR CONVEYANCE OF THE MCKEE INTERESTS OR THE TERMINATION OF THIS AGREEMENT. THE PROVISIONS OF THIS SECTION 8.1 HAVE BEEN NEGOTIATED BY THE PARTIES AFTER DUE CONSIDERATION AND ARE INTENDED TO BE A COMPLETE EXCLUSION AND NEGATION OF ANY REPRESENTATIONS OR WARRANTIES, WHETHER EXPRESS, IMPLIED OR STATUTORY, WITH RESPECT TO VALERO MCKEE OR ITS ASSETS THAT MAY ARISE PURSUANT TO APPLICABLE LAW NOW OR HEREAFTER IN EFFECT, OR OTHERWISE, EXCEPT AS SET FORTH IN THIS AGREEMENT, THE ANCILLARY DOCUMENTS OR THE OMNIBUS AGREEMENT.

8.2 Expenses. Except as expressly provided in this Agreement, or as provided in the Ancillary Documents or the Omnibus Agreement, all costs and expenses incurred by the Parties in connection with the consummation of the transactions contemplated hereby shall be borne solely and entirely by the Party which has incurred such expense. For the avoidance of doubt, the Partnership shall be responsible for all costs and expenses (including attorneys’ fees and expenses) incurred by the conflicts committee of the General Partner in connection with this Agreement and the transactions contemplated herein.

8.3 Notices. All notices, requests, demands and other communications hereunder will be in writing and will be deemed to have been duly given: (a) if by transmission by facsimile or hand delivery, when delivered; (b) if mailed via the official governmental mail system, five (5) Business Days after mailing, provided that said notice is sent first class, postage pre-paid, via certified or registered mail, with a return receipt requested; (c) if mailed by an internationally recognized overnight express mail service such as FedEx, UPS, or DHL Worldwide when delivery is confirmed by the carrier; or (d) if by e-mail, one (1) Business Day after delivery with receipt is confirmed. All notices will be addressed to the Parties at the respective addresses as follows:

if to VTDC:

Valero Terminaling and Distribution Company

c/o Valero Energy Corporation

One Valero Way

San Antonio, Texas 78249

Attn: President

Facsimile: (210) 345-2413

if to the Partnership:

Valero Energy Partners LP
c/o Valero Energy Partners GP LLC

One Valero Way

San Antonio, Texas 78249

Attn: President

Facsimile: (210) 370-5161

or to such other address or to such other person as either Party will have last designated by notice to the other Parties.

8.4 Severability. Whenever possible, each provision of this Agreement will be interpreted in such manner as to be valid and effective under Applicable Law, but if any provision of this Agreement or the application of any such provision to any person or circumstance will be held invalid, illegal or unenforceable in any respect by a court of competent jurisdiction, such invalidity, illegality or unenforceability will not affect any other provision hereof, and the Parties will negotiate in good faith with a view to substitute for such provision a suitable and equitable solution in order to carry out, so far as may be valid and enforceable, the intent and purpose of such invalid, illegal or unenforceable provision.

8.5 Governing Law. This Agreement shall be subject to and governed by the laws of the State of Texas, excluding any conflicts-of-law rule or principle that might refer the construction or interpretation of this Agreement to the laws of another state.

8.6 Confidentiality.

(a) Obligations. Each Party shall use commercially reasonable efforts to retain the other Party’s Confidential Information in confidence and not disclose the same to any third party nor use the same, except as authorized by the disclosing Party in writing or as expressly permitted in this Section 8.6. Each Party further agrees to take the same care with the other Party’s Confidential Information as it does with its own, but in no event less than a reasonable degree of care.

(b) Required Disclosure. Notwithstanding Section 8.6(a) above, if the receiving Party becomes legally compelled to disclose the Confidential Information by a court, Governmental Authority or Applicable Law, including the rules and regulations of the Securities and Exchange Commission, or is required to disclose pursuant to the rules and regulations of any national securities exchange upon which the receiving Party or its parent entity is listed, any of the disclosing Party’s Confidential Information, the receiving Party shall promptly advise the disclosing Party of such requirement to disclose Confidential Information as soon as the receiving Party becomes aware that such a requirement to disclose might become effective, in order that, where possible, the disclosing Party may seek a protective order or such other remedy as the disclosing Party may consider appropriate in the circumstances. The receiving Party shall disclose only that portion of the disclosing Party’s Confidential Information that it is required to disclose and shall cooperate with the disclosing Party in allowing the disclosing Party to obtain such protective order or other relief.

(c) Return of Information. Upon written request by the disclosing Party, all of the disclosing Party’s Confidential Information in whatever form shall be returned to the disclosing Party upon termination of this Agreement or destroyed with destruction certified by the receiving Party, without the receiving Party retaining copies thereof except that one copy of all such Confidential Information may be retained by a Party’s legal department for purposes of resolving any dispute that may arise hereunder or for complying with Applicable Law or the rules of any securities exchange applicable to the Party, and the receiving Party shall be entitled to retain any Confidential Information in electronic form stored on automatic computer back-up archiving systems during the period such backup or archived materials are retained under such Party’s customary procedures and policies; provided, however, that any Confidential Information retained by the receiving Party shall be maintained subject to confidentiality pursuant to the terms of this Section 8.6, and such archived or back-up Confidential Information shall not be accessed except as required by Applicable Law.

(d) Receiving Party Personnel. The receiving Party will limit access to the Confidential Information of the disclosing Party to those of its employees, attorneys, representatives and contractors that have a need to know such information in order for the receiving Party to exercise or perform its rights and obligations under this Agreement and any Ancillary Document (the “Receiving Party Personnel”). The Receiving Party Personnel who have access to any Confidential Information of the disclosing Party will be made aware of the confidentiality provision of this Agreement, and will be required to abide by the terms thereof.

(e) Survival. The obligation of confidentiality under this Section 8.6 shall survive until the second anniversary the Closing Date.

8.7 Parties in Interest. This Agreement shall be binding upon and inure solely to the benefit of each Party hereto and their successors and permitted assigns, and nothing in this Agreement, express or implied, is intended to confer upon any other Person (other than the Indemnified Parties with respect to Article VII and the Parties’ respective Affiliates with respect to Section 8.1) any rights or remedies of any nature whatsoever under or by reason of this Agreement.

8.8 Assignment of Agreement. Neither this Agreement nor any of the rights, interests, or obligations hereunder may be assigned by either Party without the prior written consent of the other Party hereto.

8.9 Captions. The captions in this Agreement are for purposes of reference only and shall not limit or otherwise affect the interpretation hereof.

8.10 Counterparts. This Agreement may be executed in one or more counterparts (including by facsimile or portable document format (pdf)) for the convenience of the Parties hereto, each of which counterparts will be deemed an original, but all of which counterparts together will constitute one and the same agreement.

8.11 Integration. This Agreement, the Ancillary Documents and the Omnibus Agreement supersede any previous understandings or agreements among the Parties, whether oral or written, with respect to their subject matter. This Agreement, the Ancillary Documents and the Omnibus Agreement contain the entire understanding of the Parties with respect to the subject matter hereof and thereof. No understanding, representation, promise or agreement, whether oral or written, is intended to be or shall be included in or form part of this Agreement, the Ancillary Documents or the Omnibus Agreement unless it is contained in a written amendment hereto or thereto and executed by the Parties hereto or thereto after the date of this Agreement, the Ancillary Documents or the Omnibus Agreement.

8.12 Amendment; Waiver. This Agreement may be amended only in a writing signed by all Parties. Any waiver of rights hereunder must be set forth in writing. A waiver of any breach or failure to enforce any of the terms or conditions of this Agreement shall not in any way affect, limit or waive either Party’s rights at any time to enforce strict compliance thereafter with every term or condition of this Agreement.

ARTICLE IX
INTERPRETATION

9.1 Interpretation. It is expressly agreed that this Agreement shall not be construed against either Party, and no consideration shall be given or presumption made, on the basis of who drafted this Agreement or any particular provision hereof or who supplied the form of Agreement. Each Party agrees that this Agreement has been purposefully drawn and correctly reflects its understanding of the transaction that this Agreement contemplates. In construing this Agreement:

(a) examples shall not be construed to limit, expressly or by implication, the matter they illustrate;

(b) the word “includes” and its derivatives means “includes, but is not limited to” and corresponding derivative expressions;

(c) a defined term has its defined meaning throughout this Agreement and each Exhibit to this Agreement, regardless of whether it appears before or after the place where it is defined;

(d) each Exhibit to this Agreement is a part of this Agreement, but if there is any conflict or inconsistency between the main body of this Agreement and any Exhibit, the provisions of the main body of this Agreement shall prevail;

(e) the term “cost” includes expense and the term “expense” includes cost;

(f) the headings and titles herein are for convenience only and shall have no significance in the interpretation hereof;

(g) currency amounts referenced herein, unless otherwise specified, are in U.S. Dollars;

(h) unless the context otherwise requires, all references to time shall mean time in San Antonio, Texas;

(i) whenever this Agreement refers to a number of days, such number shall refer to calendar days unless Business Days are specified; and

(j) if a term is defined as one part of speech (such as a noun), it shall have a corresponding meaning when used as another part of speech (such as a verb).

9.2 References, Gender, Number. All references in this Agreement to an “Article,” “Section,” “subsection” or “Exhibit” shall be to an Article, Section, subsection or Exhibit of this Agreement, unless the context requires otherwise. Unless the context clearly requires otherwise, the words “this Agreement,” “hereof,” “hereunder,” “herein,” “hereby,” or words of similar import shall refer to this Agreement as a whole and not to a particular Article, Section, subsection, clause or other subdivision hereof. Cross references in this Agreement to a subsection or a clause within a Section may be made by reference to the number or other subdivision reference of such subsection or clause preceded by the word “Section.” Whenever the context requires, the words used herein shall include the masculine, feminine and neuter gender, and the singular and the plural.

[Signature page follows.]

IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date first set forth above.



VALERO TERMINALING AND DISTRIBUTION COMPANY		VALERO ENERGY PARTNERS LP

		By: Valero Energy Partners GP LLC, as the General Partner of Valero Energy Partners LP
By:	/s/ R. Lane Riggs
Name: R. Lane Riggs Title: Executive Vice President

		By:	/s/ Richard F. Lashway
		Name: Richard F. Lashway Title: President and Chief Operating Officer

[Signature Page to Contribution Agreement]

EXHIBIT A

Amended and Restated Omnibus Agreement Schedules

EXHIBIT B

Terminal Services Schedule (McKee Terminal)

EXHIBIT C

McKee Lease Agreement

EXHIBIT D

Assignment Document

ASSIGNMENT OF MEMBERSHIP INTERESTS

This ASSIGNMENT OF LIMITED LIABILITY COMPANY INTERESTS (the “Assignment”) in Valero Partners McKee, LLC, a Delaware limited liability company (the “Assigned Entity”), is effective as of the Effective Time on [April 1], 2016, by and between Valero Terminaling and Distribution Company, a Delaware corporation (the “Assignor”), Valero Energy Partners GP LLC (the “General Partner”) and Valero Energy Partners LP, a Delaware limited partnership (the “Assignee”).

WHEREAS, the Assignor owns 100% of the membership interests of the Assigned Entity (the “McKee Interests”), and desires to assign, transfer, contribute and convey, directly or indirectly, to Assignee all of such Assignor’s right, title and interest in and to the McKee Interests, in accordance with that certain Contribution Agreement, dated as of [April 1], 2016, among the Assignors and the Assignee (the “Contribution Agreement” and capitalized terms that are used but not defined herein having the meanings ascribed to them in the Contribution Agreement);

NOW, THEREFORE, for good and valuable consideration, as detailed in the Contribution Agreement, the receipt and sufficiency of which are hereby acknowledged and confessed by Assignor, the undersigned do hereby agree as follows:

1. Assignment and Assumption.

(a) The Assignor does hereby BARGAIN, CONTRIBUTE, ASSIGN, TRANSFER, CONVEY, SET OVER and DELIVER 2.0% of the McKee Interests in accordance with the Contribution Agreement to the General Partner, its successors and assigns, forever. The General Partner hereby accepts the Assignor’s assignment and hereby assumes all obligations attributable to such McKee Interests.

(b) The Assignor and the General Partner do hereby BARGAIN, CONTRIBUTE, ASSIGN, TRANSFER, CONVEY, SET OVER and DELIVER the McKee Interests in accordance with the Contribution Agreement to Assignee, its successors and assigns, forever. Assignee hereby accepts Assignor’s and the General Partner’s assignment and hereby assumes all obligations attributable to the McKee Interests.

2. Admission as Member. The Assignor and the General Partner hereby consent to the admission of the Assignee as a member of the Assigned Entity. Immediately following the admission of Assignee as a member of the Assigned Entity, the Assignor and the General Partner shall and do hereby withdraw from the Assigned Entity as a member of the Assigned Entity, and shall thereupon cease to be a member of the Assigned Entity, and shall thereupon cease to have or exercise any right or power as a member of the Assigned Entity.

3. General. THIS ASSIGNMENT IS GOVERNED BY AND SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF TEXAS. This Assignment is binding on and shall inure to the benefit of the signatories hereto and their respective

Exhibit D-1

successors and assigns. This Assignment may be executed in counterparts, including faxed counterparts.

4. Notwithstanding anything in this Assignment, this Assignment is being executed solely for the purpose of implementing, and carrying out the intentions of the parties under, the Contribution Agreement, and is not intended to enlarge, limit or alter the rights or obligations of any party under the Contribution Agreement. In the event that any provision of this Assignment conflicts with, or is inconsistent with, any provision of the Contribution Agreement, the provisions of the Contribution Agreement shall control.

[Signature page follows.]

Exhibit D-2

IN WITNESS WHEREOF, the parties hereto have executed this Assignment effective as of the Effective Time on the Closing Date.



ASSIGNOR:
VALERO TERMINALING AND DISTRIBUTION COMPANY


By:
Name:
Title:



GENERAL PARTNER:
VALERO ENERGY PARTNERS GP LLC

By:
Name:
Title:



ASSIGNEE:
VALERO ENERGY PARTNERS LP By: VALERO ENERGY PARTNERS GP LLC, as general partner of Valero Energy Partners LP
By:
Name:
Title:

Exhibit D-3

EXHIBIT E

Amended Services and Secondment Exhibits

EXHIBIT F

McKee Assignment

______________________________________________________________________________

BILL OF SALE AND ASSIGNMENT AGREEMENT

(McKee Terminal)

THIS BILL OF SALE AND ASSIGNMENT AGREEMENT (this “Bill of Sale”) is entered into effective as of the 31^st day of March, 2016 (the “Effective Date”), by and between DIAMOND SHAMROCK REFINING COMPANY, L.P., a Delaware limited partnership (“Assignor”), and VALERO PARTNERS MCKEE, LLC, a Delaware limited liability company (“Assignee”). The above-named entities are sometimes referred to in this Bill of Sale each as a “Party” and collectively as the “Parties.”

W I T N E S S E T H:

WHEREAS, Assignor has agreed to convey and assign to Assignee and Assignee has agreed to accept from Assignor all of the Transferred Interests (as defined below), other than the land, comprising the tank farm and terminal located in Sunray, Texas (the “Terminal”); and

NOW, THEREFORE, for Ten and No/100 Dollars ($10.00) and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Assignor and Assignee agree as follows:

1. Assignor, hereby SELLS, ASSIGNS, TRANSFERS, GRANTS, DELIVERS AND CONVEYS to Assignee, all right, title and interest of Assignor in and to the following:

(a)

the crude oil, refined products and intermediates storage tanks identified on Exhibit A attached hereto and incorporated herein for all purposes (the “Tanks”) that are situated on the those tracts or parcels of land located in Sunray, Texas (the “Premises”) as more particularly described and referred to as the “Premises” in that certain Lease and Access Agreement dated of even date herewith between Assignor, as Lessor and Assignee, as Lessee (the “Lease”);

(b)

tank valves, tank gauges, booster pumps, transfer pumps, meters, recorders, fittings, pressure and temperature equipment, cathodic protection equipment, leak detection equipment, improvements and other equipment, personal property and facilities, all of which are located on the Premises and used in connection with the operation of the Tanks (all such equipment, personal property and facilities being hereinafter referred to as the “Personal Property”) (for the avoidance of doubt, the Personal Property does not include any inventories of crude oil, feedstocks or refined products that may be located on the Premises, nor does it include any personal property owned by Assignor that is located on the Premises but used exclusively in connection with the operation of Assignor’s McKee Refinery);

(c)

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 (the “Facility Pipelines”), provided that pursuant to the Lease the Parties shall have the right to demarcate the point (as determined, the “Demarcation Point”) at which any such pipeline located partially on and partially off the Premises connects to any Refinery Pipeline (as defined in Lease) and that portion extending from the boundary of the Premises to the Demarcation Point shall be considered Facility Pipeline;

(d)

all licenses, permits, consents, authorizations and certificates issued, approved or granted by governmental authorities prior to the Effective Date which are necessary to and used exclusively in connection with the ownership and operation of the Terminal, together with all renewals and modifications thereof (the “Permits”) subject, in each instance, to the terms of the Permits and applicable legal requirements regarding transfer or assignment; and


(e)	all agreements, commitments and contracts related solely and exclusively to the Terminal or its operations (the “Contracts”) subject, in each instance, to the terms of the Contracts regarding assignment.

The Tanks, Personal Property, Facility Pipelines, Permits and Contracts are hereinafter collectively referred to as the “Transferred Interests.” Notwithstanding anything to the contrary herein, the Transferred Interests do not include (i) the Premises, (ii) the Refinery Facilities (as defined in the Lease), (iii) the Refinery Pipelines (as defined in the Lease), or (iv) any properties, rights or interests being leased or licensed by Assignor to Assignee under Lease.

2. Assignee accepts the foregoing conveyance and assignment of the Transferred Interests and hereby assumes and agrees, without the need for further action, to be bound by and to pay, perform and observe all of the terms, conditions, and obligations (if any) to be paid, performed, or observed by Assignor with respect to the Transferred Interests, whether arising before, on or after the Effective Date, and including, without limitation, all liabilities for compliance with the terms thereof. Except to the extent otherwise provided in the Omnibus Agreement (as defined below), Assignee further agrees to indemnify Assignor and hold Assignor harmless from and against any and all claims, liens, damages, demands, causes of action, liabilities, lawsuits, judgments, losses, costs and expenses (including but not limited to attorneys’ fees and expenses) asserted against or incurred by Assignor by reason of or arising out of any failure by Assignee to perform or observe the obligations, liabilities, covenants, terms and conditions assumed by Assignee hereunder.

3. THE TRANSFERRED INTERESTS ARE CONVEYED AND ASSIGNED UNDER THIS BILL OF SALE AS-IS, WHERE-IS, WITH ALL FAULTS, WITHOUT RECOURSE AGAINST ASSIGNOR, AND WITHOUT ANY REPRESENTATIONS OR WARRANTIES OF WHATSOEVER NATURE, WHETHER EXPRESS, IMPLIED OR BY OPERATION OF LAW, IT BEING THE INTENTION OF ASSIGNOR AND ASSIGNEE EXPRESSLY TO NEGATE AND EXCLUDE ALL WARRANTIES, INCLUDING WITHOUT LIMITATION, ANY IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR ANY PARTICULAR

PURPOSE, WARRANTIES CREATED BY ANY AFFIRMATION OF FACT OR PROMISE OR BY ANY DESCRIPTION OF THE TRANSFERRED INTERESTS, OR BY ANY SAMPLE OR MODEL, AND ALL OTHER WARRANTIES WHATSOEVER. Assignee accepts the Transferred Interests and all rights and obligations related thereto, upon the terms set forth herein and without recourse against Assignor or any of its affiliates or any of their respective officers, directors, agents, employees or representatives.

4. If notice to, or the consent, authorization, permission or approval of, any third party (each, an “Approval” and collectively, the “Approvals”) is required for an assignment of any of the Permits or Contracts to be effective, the assignment to Assignee of such Permits or Contracts shall be effective upon the granting of such Approval. Assignee shall be solely responsible for securing all necessary Approvals and shall endeavor to do so as promptly as possible; provided, however, that Assignor shall reasonably cooperate with Assignee in securing Approvals so long as Assignor is not required to incur any costs or expenses (other than de minimis costs and expenses) as a result thereof. To the extent that the failure to obtain any Approval would give rise to the right on the part of any third party to terminate, or limit any right of Assignor or Assignee with respect to, any of the Permits or Contracts affected thereby, then any provision contained in this Bill of Sale shall not become effective with respect to such Permits or Contracts unless and until such Approval has been obtained, waived or is no longer required. When such Approval has been obtained, waived or is no longer required, this Bill of Sale shall automatically become effective without the need for any further action on the part of Assignor, Assignee or any other person and without payment of any further consideration. Until such time as any such Approval has been obtained or waived or is no longer required, Assignor shall (without infringing on the legal rights of any third party or violating any law) endeavor to provide Assignee with the equivalent benefits of the Permits or Contracts affected, by subcontract or otherwise, on the condition that Assignee shall (without infringing on the legal rights of any third party or violating any law) cooperate and assist in such efforts and shall bear all economic burdens and other obligations and liabilities of Assignor under the affected Permits or Contracts, notwithstanding the fact that the same have not been transferred to Assignee. Notwithstanding the foregoing or anything else to the contrary herein, Assignor’s obligations under this paragraph shall expire on the one year anniversary of the Effective Date.

5. From time to time, at Assignee’s or Assignor’s request, whether on or after the Effective Date and without further consideration, Assignor or Assignee, as applicable shall take all such further action as is necessary or reasonably desirable to carry out the purposes of this Bill of Sale (including executing and delivering or causing to be executed and delivered, any further instruments of assignment, conveyance or transfer, consents and other documents and providing any reasonably requested information), as the other party reasonably may request; provided, however, that Assignor’s obligations under this paragraph shall expire on the one year anniversary of the Effective Date and provided, further, that Assignor shall not be obligated to incur any costs or expenses (other than de minimis costs or expenses) under this paragraph.

6. This Bill of Sale shall be governed by and construed in accordance with the laws of the State of Texas, without regard to conflicts of laws rules as applied in Texas. Venue for any action arising out of or in connection with this Bill of Sale shall be exclusively in the appropriate state or federal courts located in Bexar County, Texas.

7. Notwithstanding any provision to the contrary contained herein, for so long as the Omnibus Agreement (as defined below) remains in full force and effect, to the extent of any conflict between the terms of this Bill of Sale 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 Bill of Sale, no such waiver or agreement shall affect or limit the rights or remedies of such party or its affiliates under the Omnibus Agreement, or the obligations and liabilities of the other parties to the Omnibus Agreement. For purposes of this Bill of Sale, the term “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, and Valero Partners Wynnewood, 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.

8. This Bill of Sale shall inure to the benefit of all parties hereto and their respective successors and assigns.

[Signature page to Bill of Sale and Assignment Agreement]

IN WITNESS WHEREOF, Assignor and Assignee have executed this Bill of Sale and Assignment Agreement on the date set forth in the acknowledgements of Assignor and Assignee below, to be effective as of the Effective Date.

ASSIGNOR:

DIAMOND SHAMROCK REFINING

COMPANY, L.P., a Delaware limited partnership

By: Valero Services, Inc.

Its: General Partner



By:	/s/ R. Lane Riggs
Name:	R. Lane Riggs
Title:	Executive Vice President

ASSIGNEE:

VALERO PARTNERS MCKEE, LLC,

a Delaware limited liability company



By:	/s/ Richard F. Lashway
Name:	Richard F. Lashway
Title:	President and Chief Operating Officer

STATE OF TEXAS §

§ ACKNOWLEDGMENT

COUNTY OF BEXAR §

On this ____ day of March, 2016, before me, ____________, a Notary Public, duly commissioned, qualified and acting, within and for said County and State, appeared in person the within named R. Lane Riggs, to me personally well known (or satisfactorily proven to be such person), who stated that he was an Executive Vice President of Valero Services, Inc., the General Partner of Diamond Shamrock Refining Company, L.P., a Delaware limited partnership, and was duly authorized in his respective capacity to execute the foregoing instrument for and in the name and behalf of said company in its capacity as general partner of said limited partnership, and further stated and acknowledged that he had so signed, executed, and delivered said foregoing instrument for the consideration, uses, and purposes therein mentioned and set forth.

IN TESTIMONY WHEREOF, I have hereunto set my hand and official seal this ___ day of March, 2016.




Notary Public

STATE OF TEXAS §

§ ACKNOWLEDGMENT

COUNTY OF BEXAR §

On this ___ day of March, 2016, before me, ____________, a Notary Public, duly commissioned, qualified and acting, within and for said County and State, appeared in person the within named Richard F. Lashway, to me personally well known (or satisfactorily proven to be such person), who stated that he was the President and Chief Operating Officer of VALERO PARTNERS MCKEE, LLC, a Delaware limited liability company, and was duly authorized in his respective capacity to execute the foregoing instrument for and in the name and behalf of said company, and further stated and acknowledged that he had so signed, executed, and delivered said foregoing instrument for the consideration, uses, and purposes therein mentioned and set forth.

IN TESTIMONY WHEREOF, I have hereunto set my hand and official seal this ___ day of March, 2016.




Notary Public

EXHIBIT A
TANKS



McKee Tank Ref #	Type	Shell Capacity (Barrels)
TK1	CR	9,999
TK1001	EFR	99,085
TK1003	EFR	98,750
TK100M1	CR	100,621
TK100M2	EFR	107,074
TK100M3	EFR	109,957
TK101	EFR	100,088
TK120M1	EFR	118,453
TK120M2	EFR	117,815
TK120M3	EFR	116,945
TK120M4	IFR	119,440
TK121	CR	3,078
TK125	CR	3,119
TK126	CR	3,114
TK127	CR	9,983
TK128	CR	9,920
TK130	CR	67,427
TK133	EFR	19,297
TK134	EFR	19,324
TK138	EFR	19,880
TK139	EFR	19,765
TK140	IFR	24,854
TK142	CR	3,121
TK145	IFR	3,124
TK148	CR	9,239
TK1501	EFR	14,783
TK1502	EFR	14,800
TK150M1	EFR	149,515
TK150M2	IFR	150,150
TK150M3	EFR	161,044
TK150M4	EFR	163,613
TK157	EFR	117,271
TK161	EFR	19,772
TK163	EFR	19,871
TK164	EFR	9,967
TK166	CR	10,197
TK167	EFR	19,943
TK168	EFR	19,688

Exhibit A



McKee Tank Ref #	Type	Shell Capacity (Barrels)
TK2	CR	9,645
TK200M1	EFR	211,453
TK20M5	CR	20,046
TK20M6	CR	20,046
TK20M7	CR	20,046
TK21	CR	20,153
TK22	CR	19,768
TK24	CR	5,127
TK2601	CR	2,665
TK2602	CR	2,664
TK2606	CR	2,660
TK2607	CR	2,662
TK2608	CR	4,975
TK29	CR	5,127
TK30	CR	5,127
TK3001	EFR	29,440
TK3002	EFR	29,501
TK300M1	CR	295,470
TK300M2	CR	298,504
TK300M3	CR	299,684
TK31	EFR	70,757
TK32	CR	5,127
TK33	CR	1,005
TK34	CR	1,006
TK4	IFR	166,162
TK5501	CR	55,521
TK5502	CR	55,521
TK5503	CR	55,521
TK5504	EFR	54,267
TK5505	EFR	54,739
TK5506	IFR	55,355
TK551	CR	3,109
TK60M1	EFR	68,866
TK60M2	EFR	66,219
TK6701	EFR	65,334
TK6702	EFR	66,110
TK80M1	IFR	80,950
	TOTAL:	4,414,418

Exhibit A

Exhibit 10.03

Amendment and Restatement of

Schedules to Amended and Restated Omnibus Agreement

April 1, 2016

An Amended and Restated Omnibus Agreement was executed as of July 1, 2014 (as the same may be amended, supplemented or modified from time to time, the “Omnibus Agreement”) by and among Valero Energy Corporation, Valero Energy Partners LP and the other parties thereto. Capitalized terms not otherwise defined in this document shall have the terms set forth in the Omnibus Agreement.

The Parties agree that, as of the date first written above, the Schedules to the Omnibus Agreement are hereby amended and restated in their entirety to be as attached hereto (the “Amended Schedules”). Pursuant to Section 8.12 of the Omnibus Agreement, such Amended Schedules shall replace the prior Schedules as of the date hereof and shall be incorporated by reference into the Omnibus Agreement for all purposes.

Valero Partners McKee, LLC hereby agrees to be bound by all of the terms and provisions of the Omnibus Agreement with the same force and effect as if it were originally a Party to the Omnibus Agreement. For the avoidance of doubt, any terms or definitions used in the Omnibus Agreement which refer to a Party referenced in the schedules thereto shall include Valero Partners McKee, LLC, as set forth in the Amended Schedules. As amended hereby, the Omnibus Agreement is hereby ratified and affirmed and shall continue in full force and effect.

[Remainder of page intentionally left blank.]

IN WITNESS WHEREOF, each of the undersigned has executed this Amendment and Restatement of Schedules to Amended and Restated Omnibus Agreement on, and effective as of, the date first written above.



VALERO ENERGY CORPORATION By: /s/ R. Lane Riggs Name: R. Lane Riggs Title: Executive Vice President - Refining Operations and Engineering	VALERO MARKETING AND SUPPLY COMPANY By: /s/ R. Lane Riggs Name: R. Lane Riggs Title: Executive Vice President
VALERO TERMINALING AND DISTRIBUTION COMPANY By: /s/ R. Lane Riggs Name: R. Lane Riggs Title: Executive Vice President	THE PREMCOR REFINING GROUP INC. By: /s/ R. Lane Riggs Name: R. Lane Riggs Title: Executive Vice President
THE PREMCOR PIPELINE CO. By: /s/ R. Lane Riggs Name: R. Lane Riggs Title: Executive Vice President	VALERO ENERGY PARTNERS LP By: Valero Energy Partners GP LLC, its general partner By: /s/ Richard F. Lashway Name: Richard F. Lashway Title: President and Chief Operating Officer
VALERO ENERGY PARTNERS GP LLC By: /s/ Richard F. Lashway Name: Richard F. Lashway Title: President and Chief Operating Officer	VALERO PARTNERS OPERATING CO. LLC By: /s/ Richard F. Lashway Name: Richard F. Lashway Title: President and Chief Operating Officer
VALERO PARTNERS EP, LLC By: /s/ Richard F. Lashway Name: Richard F. Lashway Title: President and Chief Operating Officer	VALERO PARTNERS LUCAS, LLC By: /s/ Richard F. Lashway Name: Richard F. Lashway Title: President and Chief Operating Officer
VALERO PARTNERS MEMPHIS, LLC By: /s/ Richard F. Lashway Name: Richard F. Lashway Title: President and Chief Operating Officer	VALERO PARTNERS NORTH TEXAS, LLC By: /s/ Richard F. Lashway Name: Richard F. Lashway Title: President and Chief Operating Officer

Signature Page to Amendment and Restatement of Schedules



VALERO PARTNERS SOUTH TEXAS, LLC By: /s/ Richard F. Lashway Name: Richard F. Lashway Title: President and Chief Operating Officer	VALERO PARTNERS WYNNEWOOD, LLC By: /s/ Richard F. Lashway Name: Richard F. Lashway Title: President and Chief Operating Officer
VALERO PARTNERS LOUISIANA, LLC By: /s/ Richard F. Lashway Name: Richard F. Lashway Title: President and Chief Operating Officer	VALERO PARTNERS HOUSTON, LLC By: /s/ Richard F. Lashway Name: Richard F. Lashway Title: President and Chief Operating Officer
VALERO PARTNERS CORPUS EAST, LLC By: /s/ Richard F. Lashway Name: Richard F. Lashway Title: President and Chief Operating Officer	VALERO PARTNERS CORPUS WEST, LLC By: /s/ Richard F. Lashway Name: Richard F. Lashway Title: President and Chief Operating Officer
VALERO PARTNERS CCTS, LLC By: /s/ Richard F. Lashway Name: Richard F. Lashway Title: President and Chief Operating Officer	VALERO PARTNERS MCKEE, LLC By: /s/ Richard F. Lashway Name: Richard F. Lashway Title: President and Chief Operating Officer

Signature Page to Amendment and Restatement of Schedules

Schedule A

Environmental Matters

Notwithstanding any other provision in this Agreement or in any other Transaction Agreement to the contrary, and subject to the conditions set forth below:


1.	For purposes of this Schedule, the following terms shall have the meanings set forth below:

“API 653” means American Petroleum Institute (API) Standard 653 for Aboveground Storage Tanks.

“Corpus East Lease” means the Lease and Access Agreement (Corpus East Terminal) dated October 1, 2015, by and between Valero Refining–Texas, L.P., as Lessor, and Valero Partners Corpus East, LLC, as Lessee, in connection with the land on which the Corpus East Terminal Assets are located as more particularly described therein.

“Corpus East Tanks” means the crude oil, intermediates and refined product storage tanks which are included in the Corpus East Terminal Assets.

“Corpus West Lease” means the Lease and Access Agreement (Corpus West Terminal) dated October 1, 2015, by and between Valero Refining–Texas, L.P., as Lessor, and Valero Partners Corpus West, LLC, as Lessee, in connection with the land on which the Corpus West Terminal Assets are located as more particularly described therein.

“Corpus West Tanks” means the crude oil, intermediates and refined product storage tanks which are included in the Corpus West Terminal Assets.

“Houston Lease” means the Lease and Access Agreement (Houston Terminal) dated March 1, 2015, by and between Valero Refining–Texas, L.P., as Lessor, and Valero Partners Houston, LLC, as Lessee, in connection with the land on which the Houston Terminal Assets are located as more particularly described therein.

“Houston Tanks” means the crude oil, intermediates and refined product storage tanks which are included in the Houston Terminal Assets.

“McKee Lease” means the Lease and Access Agreement (McKee Terminal) dated April 1, 2016, by and between Diamond Shamrock Refining Company, L.P., as Lessor, and Valero Partners McKee, LLC, as Lessee, in connection with the land on which the McKee Terminal Assets are located as more particularly described therein.

“McKee Tanks” means the crude oil, intermediates and refined product storage tanks which are included in the McKee Terminal Assets.

“St. Charles Lease” means the Lease and Access Agreement (St. Charles Terminal) dated March 1, 2015 by and between Valero Refining–New Orleans, L.L.C., as Lessor, and Valero

Schedule A – Page 1

Partners Louisiana, LLC, as Lessee, in connection with the land on which the St. Charles Terminal Assets are located as more particularly described therein.

“St. Charles Tanks” means the crude oil, intermediates and refined product storage tanks which are included in the Houston Terminal Assets.


2.	As it relates to the Lucas Terminal and the West Memphis Terminal:

(a)

Valero shall indemnify the Partnership Group for the remediation of, other corrective actions required with respect to, and other Losses (if any) arising out of any Hazardous Substances on, under, about or migrating from the Lucas Terminal or the West Memphis Terminal prior to December 16, 2013 (collectively, “Existing Contamination Liabilities”) with respect to which Valero, prior to December 16, 2013 (i) received indemnification from a third party pursuant to a written agreement (an “Indemnification Agreement”) or (ii) placed a third party on notice that Valero believes such third party is legally liable (whether such liability arises by contract, statute, common law or otherwise); provided that such indemnification of the Partnership by Valero shall apply only if and to the extent that Valero is actually able to secure payment or performance by the third party with respect to the Existing Contamination Liabilities; and


(b)	As between Valero and the Partnership Group, Valero shall retain responsibility for Existing Contamination Liabilities to the extent, and only to the extent that Valero is actually able to secure payment or performance by a third party with respect to the Existing Contamination Liabilities as provided in paragraph (a) above.


(c)	The obligations of Valero under paragraphs (a) and (b) above are subject to the satisfaction of each of the following conditions, the failure of any one or more of which shall excuse Valero from its obligations, to the extent it is prejudiced thereby:


(i)	The Partnership Group shall fully cooperate with Valero and its designees in facilitating any remediation or other corrective action activities at the Lucas Terminal or West Memphis Terminal, as applicable, and in seeking to recover from third parties for any Existing Contamination Liabilities;

(ii)

The Partnership Group shall comply with all applicable requirements of any Indemnification Agreement that requires the cooperation or involvement of the owner of the Lucas Terminal or the West Memphis Terminal, as applicable, including any notifications or filings that must be made by the owner of the Lucas Terminal or the West Memphis Terminal, as applicable; provided that the Partnership Group has been made aware of the relevant requirements in such Indemnification Agreement; and


(iii)	No member of the Partnership Group shall take any actions or omit to act in any manner that would (A) violate or cause a violation of any of Valero’s obligations, or a waiver or release of any third party’s obligations, under any Indemnification

Schedule A – Page 2

Agreement or (B) otherwise relieve a third party of any of its legal obligations; in each case provided that the Partnership Group has been made aware of the relevant obligations.


3.	As it relates to the Houston Terminal Assets and St. Charles Terminal Assets:


(a)	For the following Houston Tanks and St. Charles Tanks (the “Houston/St. Charles Scheduled A Tanks”):

St. Charles Tanks: T-78, T-55-5, T-55-6, T-425-2, T-425-3, T-425-4, T-150-4, T-150-5, T-150-8, T-130-1, T-150-17, T-55-1, T-130-8, T-150-7, T-325-1, T-425-1, T-625-1, T-130-2, T-130-5

Houston Tanks: 506 and either T-3 or T-5, at the Partnership Group’s election.

Valero and its Subsidiaries, Valero Refining–New Orleans, L.L.C. (“VRNO”), with respect to the St. Charles Tanks that are Scheduled A Tanks, and Valero Refining–Texas, L.P. (“VRT”), with respect to the Houston Tanks that are Houston/St. Charles Scheduled A Tanks, acknowledge and agree that there currently exist obligations to complete the removal from service, cleaning, waste disposal, initial inspection and repairs to have the Scheduled A Tanks ready for final API 653 inspection and fitness for duty. The Partnership Group shall control the completion of, and cooperate with VRNO and VRT on the logistics for completing these obligations and shall undertake the final inspection and return the Houston/St. Charles Scheduled A Tanks to service. Until completion of these obligations, Valero shall retain any environmental liability that arises from the pre-API 653 inspection conditions of the Houston/St. Charles Schedule A Tanks and shall indemnify, defend and hold harmless each Group Member from Losses related to such retained environmental liability and any costs and expenses incurred by the Partnership Group in connection with the removal from service, cleaning, waste disposal, initial inspection and repairs to have the Houston/St. Charles Scheduled A Tanks ready for final API 653 inspection and fitness for duty. Without limitation to the other indemnification provisions of Section 2.1 of the Agreement, following the final API 653 inspection and written determination of fitness of duty, Partnership Group shall assume any environmental liabilities related to the Houston/St. Charles Scheduled A Tanks arising thereafter.


(b)	For the following St. Charles Tanks (the “St. Charles Scheduled B Tanks”):

T-80-1, T-77, T-150-22, T-150-24

Valero, (i) by and through VRNO with respect to the St. Charles Tanks that are St. Charles Scheduled B Tanks, represents and warrants that the St. Charles Scheduled B Tanks completed inspection on the date noted in the relevant inspection documentation and that the St. Charles Schedule B Tanks are in good working order and (ii) agrees to indemnify, defend and hold harmless each Group Member from any Losses that arise

Schedule A – Page 3

from a breach of such representation and warranty. Valero’s representations and warranties set forth in this Section 3(b) shall expire when the St. Charles Scheduled B Tanks are pulled from service for inspection, or the Identification Deadline, whichever comes first.


4.	As it relates to the Corpus East Terminal Assets and the Corpus West Terminal Assets:


(a)	For the following Corpus East Tanks and Corpus West Tanks (the “Corpus Christi Scheduled A Tanks”):

Corpus East Tanks: 177TK52, 177TK097, 177TK352, 177TK70, 177TK351, 177TK370 and 177TK098

Corpus West Tanks: 70TK108, 70TK150 and 70TK105

Valero and VRT acknowledge and agree that there currently exist obligations to complete the removal from service, cleaning, waste disposal, initial inspection and repairs to have the Corpus Christi Scheduled A Tanks ready for final API 653 inspection and fitness for duty. The Partnership Group shall control the completion of, and cooperate with VRT on the logistics for completing these obligations and shall undertake the final inspection and return the Corpus Christi Scheduled A Tanks to service. Until completion of these obligations, Valero shall retain any environmental liability that arises from the pre-API 653 inspection conditions of the Corpus Christi Schedule A Tanks and shall indemnify, defend and hold harmless each Group Member from Losses related to such retained environmental liability and any costs and expenses incurred by the Partnership Group in connection with the removal from service, cleaning, waste disposal, initial inspection and repairs to have the Corpus Christi Scheduled A Tanks ready for final API 653 inspection and fitness for duty. Without limitation to the other indemnification provisions of Section 2.1 of the Agreement, following the final API 653 inspection and written determination of fitness of duty, Partnership Group shall assume any environmental liabilities related to the Corpus Christi Scheduled A Tanks arising thereafter. In the event that (i) it is discovered that a Corpus East Tank or Corpus West Tank not listed above as part of the Corpus Christi Scheduled A Tanks was due or overdue for a timely API 653 inspection on the Closing Date, and (ii) Valero is notified in writing of such fact prior to the Identification Deadline, such Corpus East Tank or Corpus West Tank, as applicable, shall be deemed to be part of the Corpus Christi Schedule A Tanks as of the Closing Date and subject to the provisions of this Section 4(a).


(b)	For the following Corpus East Tanks and Corpus West Tanks (the “Corpus Christi Scheduled B Tanks”):

Corpus East Tanks: 177TK350 and 177TK054

Corpus West Tanks: 50TK61, 70TK149 and 72TK111

Schedule A – Page 4

Valero, (i) by and through VRT with respect to the Corpus East Tanks and Corpus West Tanks that are Corpus Christi Scheduled B Tanks, represents and warrants that the Corpus Christi Scheduled B Tanks completed inspection on the date noted in the relevant inspection documentation and that the Corpus Christi Schedule B Tanks are in good working order and (ii) agrees to indemnify, defend and hold harmless each Group Member from any Losses that arise from a breach of such representation and warranty. Valero’s representations and warranties set forth in this Section 4(b) shall expire when the Corpus Christi Scheduled B Tanks are pulled from service for inspection, or the Identification Deadline, whichever comes first.


5.	As it relates to the McKee Terminal Assets:


(a)	For the following McKee Tanks (the “McKee Scheduled A Tanks”):

McKee Tanks: TK200-M1, TK20-M7, TK34, TK300-M2, TK300-M3, TK551, TK5501, TK5502, TK167, TK148, TK1, TK5503 and TK4

Valero and its Subsidiary, Diamond Shamrock Refining Company, L.P. (“Diamond”), acknowledge and agree that there currently exist obligations to complete the removal from service, cleaning, waste disposal, initial inspection and repairs to have the McKee Scheduled A Tanks ready for final API 653 inspection and fitness for duty. The Partnership Group shall control the completion of, and cooperate with Diamond on the logistics for completing these obligations and shall undertake the final inspection and return the McKee Scheduled A Tanks to service. Until completion of these obligations, Valero shall retain any environmental liability that arises from the pre-API 653 inspection conditions of the McKee Schedule A Tanks and shall indemnify, defend and hold harmless each Group Member from Losses related to such retained environmental liability and any costs and expenses incurred by the Partnership Group in connection with the removal from service, cleaning, waste disposal, initial inspection and repairs to have the McKee Scheduled A Tanks ready for final API 653 inspection and fitness for duty. Without limitation to the other indemnification provisions of Section 2.1 of the Agreement, following the final API 653 inspection and written determination of fitness of duty, Partnership Group shall assume any environmental liabilities related to the McKee Scheduled A Tanks arising thereafter. In the event that (i) it is discovered that a McKee Tank not listed above as part of the McKee Scheduled A Tanks was due or overdue for a timely API 653 inspection on the Closing Date, and (ii) Valero is notified in writing of such fact prior to the Identification Deadline, such McKee Tank shall be deemed to be part of the McKee Schedule A Tanks as of the Closing Date and subject to the provisions of this Section 5(a).


6.	As it relates to the St. Charles Terminal Assets, the Houston Terminal Assets, the Corpus East Terminal Assets, the Corpus West Terminal Assets and the McKee Assets:


(a)	The Parties acknowledge that certain Facility Pipelines and Refinery Pipelines (as those terms are defined in the St. Charles Lease, the Houston Lease, Corpus East Lease, Corpus

Schedule A – Page 5

West Lease and McKee Lease) may be buried below ground. Valero by and through its Subsidiaries as the property owner or for other logistical or environmental reasons may, in its or their sole discretion, desire to relocate all or portions of those buried Facility Pipelines and Refinery Pipelines above ground. If Valero by and through its Subsidiaries desires to relocate all or portions of any buried Facility Pipelines or Refinery Pipelines above ground, Valero by and through its Subsidiaries shall give the Partnership Group written notice that it desires to raise certain sections of the Facility Pipelines and Refinery Pipelines and the Partnership Group and Valero by and through its Subsidiaries shall work together to set a schedule for such work. The cost of raising the Facility Pipelines and Refinery Pipelines shall be borne exclusively by Valero or its applicable Subsidiary performing the work.

(b)

Partnership Group may also desire that certain of the buried Facility Pipelines be brought above ground. In its sole discretion, Partnership Group may give notice to Valero or its applicable Subsidiary that it intends to raise certain sections of the Facility Pipelines and the Partnership Group and Valero by and through its Subsidiaries shall work together to set a schedule for such work and all such work shall be performed in compliance with the terms of the St. Charles Lease, the Houston Lease, the Corpus East Lease, the Corpus West Lease or the McKee Lease as applicable. In this case, the cost of raising the Facility Pipelines shall be borne exclusively by the Partnership Group or its applicable Subsidiary performing the work.

(c)

Until such time as the buried Facility Pipelines and Refinery Pipelines are raised above grade, there shall be a rebuttable presumption that any contamination found in connection with such buried Facility Pipelines and Refinery Pipelines occurred prior to the respective Closing Date and the liability for such contamination will remain with Valero and Valero shall indemnify, defend and hold harmless each Group Member from any Losses related to such retained liability. Valero may rebut this presumption by establishing by clear and convincing evidence that the contamination resulted from the Partnership Group operations.

As it relates to the St. Charles Terminal Assets, the Houston Terminal Assets, the Corpus East Terminal Assets, the Corpus West Terminal Assets and the McKee Terminal Assets, Valero, by and through its applicable Subsidiary, operates groundwater monitoring and remedial systems at the St. Charles Refinery, the Houston Refinery, the Corpus East Refinery, the Corpus West Refinery and the McKee Refinery and will retain the liability for contamination existing as of the Closing Date remediated through these systems and the obligation to maintain these existing systems until such time as the relevant Governmental Authority grants closure in writing or the Partnership Group and Valero mutually agree that further operation is not necessary. Further, in the case of the McKee Refinery, Valero will retain any liability arising out of groundwater contamination existing as of the Closing Date regardless of the currently known extent or remediation of such contamination. Valero shall indemnify, defend and hold harmless each Group Member from any Losses related to the retained liabilities described in this paragraph; provided, however, in the event that the Partnership Group has a release to the environment after the Closing Date and this release has a material adverse impact on the

Schedule A – Page 6

existing remedial system or triggers new remedial obligations, the Partnership Group shall reimburse Valero for the additional costs incurred as a result of the post-closure release.


8.	From time to time environmental and safety obligations may arise that the parties had not anticipated. The Partnership Group and Valero agree to cooperate and in good faith to fairly allocate the liabilities and to work cooperatively to minimize the cost of addressing any such environmental and safety obligations.

Schedule A – Page 7

Schedule B

Other Indemnification

None.

Schedule B – Page 1

Schedule C

General and Administrative Services

Administrative Fee

$11,752,500 per year

The Administrative Fee for the remainder of the 2016 fiscal year will be prorated based on the number of days from April 1, 2016 to December 31, 2016.

General and Administrative Services

Ad Valorem Tax Services

Accounting Services, including:


-	Accounting Governance


-	Corporate Accounting


-	Internal and External Reporting


-	Federal income tax services


-	Operations Accounting


-	State and local tax services


-	Transactional tax services

Business Development

Corporate Aviation and Travel Services

Corporate Communications and Public Relations

Corporate Development

Data Processing and Information Technology Services

Engineering and Project Management

Executive Oversight

Financial Accounting and Reporting

Foreign Trade Zone Reporting and Accounting (if applicable)

Governmental Affairs

Group Accounting

Health, Safety & Environmental Services

Human Resources Services

Internal Audit

Schedule C – Page 1

Legal, including:


-	Acquisitions & Divestitures


-	Commercial


-	Corporate


-	Environmental


-	Labor & Employment


-	Litigation support


-	Procurement / General Contracting


-	Regulatory


-	Tariff Maintenance

Office Services, including:


-	Clinic


-	Health Club


-	Mail Center/ Mail Services


-	Office Space including building maintenance


-	Security

Pipeline Control Center services*

Purchasing / Supply Chain Management

Records Management

Real Estate Management

Risk and Claims Management Services

Shareholder and Investor Relations

Treasury & Banking, including:


-	Finance Services


-	Cash Management


-	Credit Services

Schedule C – Page 2

* When performing operational services with respect to Partnership facilities, personnel working in the Pipeline Control Center shall act at the direction of, and be subject to exclusive supervision by, the General Partner (acting in its capacity as the general partner of, and on behalf of, the Partnership)

Schedule C – Page 3

Schedule D

ROFO Assets

Set forth below is a list of each ROFO Asset and the corresponding ROFO Asset Owner. Please refer to the Registration Statement for a further description of each ROFO Asset.

ROFO Asset ROFO Asset Owner

Parkway Products Pipeline* Valero Terminaling and Distribution Company

Hartford Crude Terminal The Premcor Refining Group Inc.

Fannett Storage Facility The Premcor Pipeline Co.

* As described in the Registration Statement, the Parkway Products Pipeline is owned by a 50/50 joint venture between Valero Terminaling and Distribution Company and Kinder Morgan. The right of first offer granted in Section 4.1 applies only to Valero Terminaling and Distribution Company’s 50% interest.

Schedule D – Page 1

Schedule E

Certain ROFR Assets

Set forth below is a list of each ROFR Asset and the corresponding ROFR Asset Owner.



ROFR Asset			ROFR Asset Owner

McKee Products System^(a)†			Valero Partners EP, LLC

Memphis truck rack^(a)			Valero Partners Memphis, LLC

Lucas Crude System^(a)			Valero Partners Lucas, LLC

McKee Crude System^(b)			Valero Partners North Texas, LLC

Three Rivers Crude System^(b)			Valero Partners South Texas, LLC

Wynnewood Products System^(b)			Valero Partners Wynnewood, LLC

Houston Terminal Assets^(c)			Valero Partners Houston, LLC

St. Charles Terminal Assets^(c)			Valero Partners Louisiana, LLC

Corpus East Terminal Assets^(d)			Valero Partners Corpus East, LLC

Corpus West Terminal Assets^(d)			Valero Partners Corpus West, LLC

McKee Terminal Assets^(e)			Valero Partners McKee, LLC

(a) Please refer to the Registration Statement for a further description of each such ROFR Asset.

(b) Please refer to the Purchase and Sale Agreement, dated as of July 1, 2014, by and among The Shamrock Pipe Line Corporation, Valero Plains Company LLC, VTDC, Valero Partners North Texas, LLC, Valero Partners South Texas, LLC and OLLC for a further description of the McKee Crude System and the Three Rivers Crude System. The Wynnewood Products System means the assets and operations of Valero Partners Wynnewood, LLC as of the Closing Date with respect to such Purchase and Sale Agreement.

(c) The Houston Terminal Assets means the assets and operations of Valero Partners Houston, LLC, and the St. Charles Terminal Assets means the assets and operations of Valero Partners Louisiana, LLC, each as of the Closing Date with respect to the Contribution Agreement, dated as of March 1, 2015, by and among Valero Terminaling and Distribution Company, Valero Refining-New Orleans, L.L.C. and Valero Energy Partners LP.

Schedule E – Page 1

(d) The Corpus East Terminal Assets means the assets and operations of Valero Partners Corpus East, LLC, and the Corpus West Terminal Assets means the assets and operations of Valero Partners Corpus West, LLC, each as of the Closing Date with respect to the Transaction Agreement, dated as of October 1, 2015, by and between Valero Terminaling and Distribution Company and Valero Energy Partners LP.

(e) The McKee Terminal Assets means the assets and operations of Valero Partners McKee, LLC as of the Closing Date with respect to the Contribution Agreement, dated as of April 1, 2016, by and between Valero Terminaling and Distribution Company and Valero Energy Partners LP.

† As described in the Registration Statement, Valero Partners EP, LLC owns a 33⅓% undivided interest in the McKee Products System, and the remainder of the system is owned by NuStar. The right of first refusal granted in Section 5.1 applies only to Valero Partners EP, LLC’s 33⅓% interest.

Schedule E – Page 2

Schedule F

Valero Marks



Depiction	Mark	Goods/Services	Status	Application Number	Reg. Number	Reg. Date	Applicant
	V Valero Energy Partners LP & Design	Storage, distribution, transportation, shipping and delivery of oil, products derived from oil, renewable fuels such as ethanol and bio-diesel, and other hydrocarbon-based products via pipelines, trucks, railcars, and marine vessels (IC 39)	Application – Intent to Use, filing date August 9, 2013	Serial Number 86033483	4594277	8/26/14	Valero Energy Partners GP LLC
VALERO	VALERO (word mark)	Storage, distribution, transportation, shipping and delivery of oil, products derived from oil, renewable fuels such as ethanol and bio-diesel, and other hydrocarbon-based products via pipelines, trucks, railcars, and marine vessels (IC 39)	Application – Use in commerce, filing date August 1, 2013	Serial Number 86026506	4494828	3/11/14	Valero Marketing and Supply Company

Schedule F – Page 1



Depiction	Mark	Goods/Services	Status	Application Number	Reg. Number	Reg. Date	Applicant
	V Valero & Design	Storage, distribution, transportation, shipping and delivery of oil, products derived from oil, renewable fuels such as ethanol and bio-diesel, and other hydrocarbon-based products via pipelines, trucks, railcars, and marine vessels (IC 39)	Application – Use in commerce, filing date August 7, 2013	Serial Number 86031469	4494933	3/11/14	Valero Marketing and Supply Company
	V & Design	Storage, distribution, transportation, shipping and delivery of oil, products derived from oil, renewable fuels such as ethanol and bio-diesel, and other hydrocarbon-based products via pipelines, trucks, railcars, and marine vessels (IC 39)	Application – Use in commerce, filing date August 5, 2013	Serial Number 86028938	4494906	3/11/14	Valero Marketing and Supply Company

Schedule F – Page 2

Schedule G

Prefunded Projects

Install new meters and line balance on Collierville crude pipeline

Install New Tank Mixers on Tanks 78 & 79 at Collierville

Collierville to Memphis P/L Guard Rails

Collierville Pipeline Integration

Lucas Tank Mixer Upgrades

Lucas Terminal Spare Motor

Lucas Install tank overfill protection

Memphis Truck Rack Additive Blending Install

Memphis Truck Rack Upgrade Oil/Water Separator

Memphis SCADA Network Integration

West Memphis Barge Additive Injection System

West Memphis Install Lab Building

West Memphis Install concrete under barge and receipt manifolds

West Memphis Tank Level Integration

Install debris deflector on Shorthorn pipeline at MM5

Schedule G – Page 1

Schedule H

Transaction Agreements and Applicable Terms


1.	Contribution, Conveyance and Assumption Agreement, dated as of December 16, 2013, by and among the General Partner, the Partnership, Valero, OLLC, VTDC, Premcor Pipeline, Premcor Refining and Valero Refining Company-Tennessee, L.L.C.



Closing Date	Identification Deadline	Environmental De Minimis Loss	Environmental Deductible	Right-of-Way Deductible	Other Losses Deductible
December 16, 2013	December 16, 2018	$10,000	$100,000	$200,000	$200,000


2.	Purchase and Sale Agreement, dated as of July 1, 2014, by and among The Shamrock Pipe Line Corporation, Valero Plains Company LLC, VTDC, Valero Partners North Texas, LLC, Valero Partners South Texas, LLC and Valero Partners Operating Co. LLC.



Closing Date	Identification Deadline	Environmental De Minimis Loss	Environmental Deductible	Right-of-Way Deductible	Other Losses Deductible
July 1, 2014	July 1, 2019	$10,000	$100,000	$200,000	$200,000


3.	Contribution Agreement, dated as of March 1, 2015, by and among Valero Terminaling and Distribution Company, Valero Refining-New Orleans, L.L.C. and Valero Energy Partners LP.



Closing Date	Identification Deadline	Environmental De Minimis Loss	Environmental Deductible	Right-of-Way Deductible	Other Losses Deductible
March 1, 2015	March 1, 2020	$10,000	$100,000	$200,000	$200,000


4.	Transaction Agreement, dated as of October 1, 2015, by and between Valero Terminaling and Distribution Company and Valero Energy Partners LP.



Closing Date	Identification Deadline	Environmental De Minimis Loss	Environmental Deductible	Right-of-Way Deductible	Other Losses Deductible
October 1, 2015	October 1, 2020	$10,000	$100,000	$200,000	$200,000


5.	Contribution Agreement, dated as of April 1, 2016, by and between Valero Terminaling and Distribution Company and Valero Energy Partners LP.



Closing Date	Identification Deadline	Environmental De Minimis Loss	Environmental Deductible	Right-of-Way Deductible	Other Losses Deductible
April 1, 2016	April 1, 2021	$10,000	$100,000	$200,000	$200,000

Schedule H – Page 1

Exhibit 10.05

Amendment and Restatement of

Exhibits to Amended and Restated Services and Secondment Agreement

April 1, 2016

An Amended and Restated Services and Secondment Agreement was executed as of March 1, 2015 (the “Amended and Restated Services and Secondment Agreement”), among Valero Services, Inc., a Delaware corporation, Valero Refining Company-Tennessee, L.L.C., a Delaware limited liability company, Valero Refining-Texas, L.P., a Texas limited partnership, and Valero Energy Partners GP LLC, a Delaware limited liability company. Capitalized terms not otherwise defined in this document shall have the terms set forth in the Amended and Restated Services and Secondment Agreement.

The Parties agree that, as of the date first written above, the Exhibits are hereby amended and restated in their entirety to be as attached hereto. Pursuant to Section 6.18 of the Amended and Restated Services and Secondment Agreement, such amended and restated Exhibits shall replace the prior Exhibits as of the date hereof and shall be incorporated by reference into the Amended and Restated Services and Secondment Agreement for all purposes. As amended hereby, the Amended and Restated Services and Secondment Agreement is hereby ratified and affirmed and shall continue in full force and effect.

[Remainder of page intentionally left blank.]

IN WITNESS HEREOF, each of the undersigned have executed this Amendment and Restatement of Exhibits to Amended and Restated Services and Secondment Agreement on, and effective as of, the date first written above.



Valero Services, Inc.


By: /s/ R. Lane Riggs
Name:	R. Lane Riggs
Title:	Executive Vice President



Valero Refining Company-Tennessee, L.L.C.


By: /s/ R. Lane Riggs
Name:	R. Lane Riggs
Title:	Executive Vice President



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



Valero Energy Partners GP LLC


By: /s/ Richard F. Lashway
Name:	Richard F. Lashway
Title:	President and Chief Operating Officer

Signature Page to Amendment and Restatement of Exhibits

EXHIBIT A

Assets

The Assets consist of all above and below-ground equipment, facilities and improvements owned (in whole or in part) or leased by any Partnership Entities, or with respect to which any of the Partnership Entities have the right and/or obligation to operate and/or maintain, at each of the office, terminal and truckhaul locations and comprising each of the pipeline systems set forth in the following chart.

Without limiting the generality of the foregoing, the Assets expressly include all of the following located at or comprising any part of the facilities, locations and systems listed in the following chart, to the extent owned, leased or otherwise under the control of any Partnership Entity:

Piping

Pumps

Valves

Fittings

Interconnects

Lease automatic custody transfer (LACT) units

Metering equipment and associated equipment

Cathodic protection equipment

Fire suppression equipment

Tanks

Tank roofs

Tank dikes and foundations

Truck racks and associated equipment

Vapor recovery equipment

Docks and associated equipment

Buildings and improvements, and all fixtures, furnishings and equipment therein

Security equipment, including fences and gates

Drives, walks and parking areas

Signage

Utilities infrastructure

Environmental monitoring and remediation equipment

SCADA equipment

Oil / water separators
Wastewater treatment equipment

Laboratories and associated equipment

A-1

Exhibit A, continued

As used in the following chart, the following terms have the following respective meanings:

“Asset Owner” means the Partnership Entity that owns the Asset.

“Service Date” means the date that Seconded Employees first began providing Operational Services at and/or for the Asset.

“Employing Operator” means the Operator that employs the Seconded Employees who will be providing Operational Services related to the Asset.

“Fee Structure” refers to the manner in which Operator is to be paid the portion of the Services Reimbursement associated with the Asset, being one of the two following methods:

“Pass Through” means that Seconded Employee Expenses associated with the Asset are being passed through to GP by the Operator on a reimbursable basis in accordance with Sections 3.1 and 3.2.

“Flat Fee” means that the Operator is charging GP a Flat Fee for all Operational Services being provided by Seconded Employees with respect to the Asset in accordance with Section 3.3. The Flat Fee amounts set forth in the chart are initial amounts as of the Service Date, and are subject to periodic adjustment in accordance with Section 3.3.

Key to entity name abbreviations:



Operators:		Asset Owners:

VRCT	Valero Refining Company-Tennessee, L.L.C.	VMKS VPCE	Valero MKS Logistics, L.L.C. Valero Partners Corpus East, LLC
VRT	Valero Refining-Texas, L.P.	VPCW	Valero Partners Corpus West, LLC
VSI	Valero Services, Inc.	VPEP	Valero Partners El Paso, LLC
		VPH	Valero Partners Houston, LLC
		VP Lucas	Valero Partners Lucas, LLC
		VP La.	Valero Partners Louisiana, LLC
		VPM	Valero Partners Memphis, LLC
		VP McKee	Valero Partners McKee, LLC
		VPNT	Valero Partners North Texas, LLC
		VPP	Valero Partners PAPS, LLC
		VPST	Valero Partners South Texas, LLC
		VPW	Valero Partners Wynnewood, LLC
		VPWM	Valero Partners West Memphis, LLC

A-2



Asset	Asset Owner	Service Date	Employing Operator	Fee Structure

Terminals, Offices and Truckhauls
Lucas Terminal 9405 West Port Arthur Road Beaumont, TX 77705	VP Lucas	Dec. 16, 2013	VSI	Pass Through
El Vista Terminal 6300 W. Port Arthur Road Port Arthur, TX 77640	VPP	Dec. 16, 2014	VSI	Pass Through
West Memphis Terminal 1282 South 8^th St. West Memphis, AR 72301	VPWM	Dec. 16, 2013	VSI	Pass Through
Collierville Terminal 772 Wingo Road Byhalia, MS 38611	VMKS	Dec. 16, 2013	VRCT	Pass Through
Memphis Truck Terminal 321 West Mallory Ave. Memphis, TN 38109	VPM	Dec. 16, 2013	VRCT	Pass Through
Wynnewood System: Wynnewood Terminal Murray County, OK	VPW	July 1, 2014	VSI	Pass Through
Three Rivers Crude System: CR 422 Crude Oil Terminal Live Oak County, Texas Three Rivers Pipeline Office Live Oak County, Texas Three Rivers Meter Site Live Oak County, Texas	VPST	July 1, 2014	VSI	Pass Through
McKee Crude System: Clawson Station Hansford County, TX Coble Station Hutchinson County, TX Farnsworth Station Ochiltree County, TX Follett Station Lipscomb County, TX	VPNT	July 1, 2014	VSI	Pass Through

A-3



Frass Station Lipscomb County, TX Glazier Station Lipscomb County, TX Gruver Station Hansford County, TX Hitchland Station Hansford County, TX Hooker Station Texas County, OK McKee Station Moore County, TX McKee Valve & Meter Site and 8” Pipeline Moore County, TX Merten Station Gray County, TX Perryton Office & Pipe Yard Ochiltree County, Texas Perryton Station (Nos. 1, 2, 3 and 4) Ochiltree County, TX Piper Station (Nos. 1, 2 and 3) Lipscomb County, TX Sunray Pump Station Sherman County, TX Tubbs Station Lipscomb County, TX Turpin Terminal Beaver County, OK Waka Station Ochiltree County, TX
St. Charles Terminal - Located in Norco, Louisiana	VP La.	March 1, 2015	VSI	Flat Fee of $11,067,000 per calendar year
Houston Terminal - Located in Houston, Texas	VPH	March 1, 2015	VRT	Flat Fee of $6,323,000 per calendar year
Corpus Christi East Terminal - Located in Corpus Christi, Texas	VPCE	October 1, 2015	VRT	Flat Fee of $9,866,000 per calendar year
Corpus Christi West Terminal - Located in Corpus Christi, Texas	VPCW	October 1, 2015	VRT	Included in the Corpus Christi East Terminal Flat Fee

A-4



McKee Terminal – Located in Sunray, Texas	VP McKee	April 1, 2016	VSI	Flat Fee of $4,060,000 per calendar year
Pipelines
Port Arthur System: Nederland pipeline: A five-mile, 32-inch pipeline that delivers crude oil to the Lucas terminal from the Sunoco Logistics Nederland marine terminal.	VP Lucas	Dec. 16, 2013	VSI	Pass Through
Lucas pipeline: A 12-mile, 30-inch pipeline that delivers crude oil from the Lucas terminal to the Valero Port Arthur refinery (1801 South Gulfway Dr., Port Arthur, Texas 77640).	VP Lucas
PAPS 20” Pipeline: A three-mile, 20-inch pipeline that delivers diesel from the Port Arthur refinery to the PAPS terminal.	VPP
El Vista 20” Pipeline: A four-mile, 20-inch pipeline that delivers gasoline from the Port Arthur refinery to the El Vista terminal.	VPP
12-10 pipeline: An approximately 13 mile, 12-inch and 10-inch pipeline that delivers refined petroleum products from the Port Arthur refinery to the Enterprise TE Products pipeline connection, the Sunoco Logistics MagTex pipeline connection at their Hebert Terminal (15651 West Port Arthur Rd. Beaumont, TX 77705) and Oiltanking’s Beaumont marine terminal (6275 Highway 347 Beaumont TX 77705).	VPP
Memphis System Collierville pipeline: Approximately 52 miles of 10- to 20-inch pipelines that deliver crude oil to the Valero Memphis refinery (543 West Mallory Ave., Memphis, Tennessee 38109) from the Collierville terminal. Shorthorn pipeline: Approximately seven miles of 14-inch pipeline that delivers diesel and gasoline produced at the Valero Memphis refinery to the West Memphis terminal, and two miles of 12-inch pipeline that delivers diesel and gasoline from the West Memphis terminal and the Valero Memphis refinery to Exxon’s Memphis refined petroleum products terminal (454 Wisconsin Ave., Memphis, TN 38106).	VMKS	Dec. 16, 2013	VRCT	Pass Through

A-5



Memphis Airport pipeline system: A nine-mile, six-inch pipeline that delivers jet fuel produced at the Valero Memphis refinery to the Swissport Fueling, Inc. terminal (2491 Winchester Rd., Memphis, Tennessee 38116) located at the Memphis International Airport and a two-mile, six-inch pipeline that delivers jet fuel from the Valero Memphis refinery to the FedEx jet fuel terminal (2903 Sprankle Ave, Memphis, TN 38118) located at the Memphis International Airport
Wynnewood System: Wynnewood Pipeline. A twelve inch (12”) nominal diameter pipeline, approximately 30 miles in length, originating at the Valero Ardmore Refinery in Carter County, Oklahoma and terminating at the Valero Wynnewood Terminal in Murray County, Oklahoma	VPW	July 1, 2014	VSI	Pass Through
Three Rivers Crude System: CR 422 - Valero Ref #1-12. A twelve inch (12”) nominal diameter pipeline, approximately 3,225 feet / 0.61 miles in length, originating at the Valero CR 422 crude oil facility and terminating the Valero Three Rivers Refinery in Live Oak County, Texas. CR 422 - Valero Ref #2-12. A twelve inch (12”) nominal diameter pipeline, approximately 3,064 feet / 0.58 miles in length, originating at the Valero CR 422 crude oil facility and terminating the Valero Three Rivers Refinery in Live Oak County, Texas. CR 422 - Valero Ref #3-12. A twelve inch (12”) nominal diameter pipeline, approximately 3,139 feet / 0.59 miles in length, originating at the Valero CR 422 crude oil facility and terminating the Valero Three Rivers Refinery in Live Oak County, Texas.	VPST	July 1, 2014	VSI	Pass Through
McKee Crude System: Tubbs 4” – A four inch (4”) nominal diameter pipeline, approximately 73,081 feet / 13.84 miles in length, originating at The Shamrock Pipe Line Corporation’s Tubbs Station in Lipscomb County, Texas and terminating at The Shamrock Pipe Line Corporation’s Tubbs /Citizens scrapper trap site in Lipscomb County, Texas.	VPNT	July 1, 2014	VSI	Pass Through

A-6



Citizens 6” – A six inch (6”) nominal diameter pipeline, approximately 48,762 feet / 9.24 miles in length, originating at The Shamrock Pipe Line Corporation’s Tubbs/Citizens scrapper trap site in Lipscomb County, Texas and terminating at The Shamrock Pipe Line Corporation’s Piper Station in Lipscomb County, Texas.
Lipscomb 6” – A six inch (6”) nominal diameter pipeline, approximately 258,838 feet / 49.02 miles in length, originating at Frass Station in Lipscomb County, Texas and terminating at The Shamrock Pipe Line Corporation’s Perryton Station in Ochiltree County, Texas.
Perryton-Waka 10” - A ten inch (10”) nominal diameter pipeline, approximately 80,135 feet / 15.18 miles in length, originating at The Shamrock Pipe Line Corporation’s Perryton Station in Ochiltree County, Texas and terminating at The Shamrock Pipe Line Corporation’s Waka Station in Ochiltree County, Texas.
Perryton-Waka 6” - A six inch (6”) nominal diameter pipeline, approximately 80,657 feet / 15.28 miles in length, originating at The Shamrock Pipe Line Corporation’s Perryton Station in Ochiltree County, Texas and terminating at The Shamrock Pipe Line Corporation’s Waka Station in Ochiltree County, Texas.
Waka-Gruver 8” - An eight inch (8”) nominal diameter pipeline, approximately 133,047 feet / 25.19 miles in length, originating at The Shamrock Pipe Line Corporation’s Waka Station in Ochiltree County, Texas and terminating at The Shamrock Pipe Line Corporation’s Gruver Station in Hansford County, Texas.
Gruver-Clawson 8” - An eight inch (8”) nominal diameter pipeline, approximately 1,497 feet / 0.28 miles in length, originating at The Shamrock Pipe Line Corporation’s Gruver Station in Hansford County, Texas and terminating at NuStar Logistics, L.P.’s Clawson Station in Hansford County, Texas.
Clawson-Gruver 6” - A six inch (6”) nominal diameter pipeline, approximately 1,069 feet / 0.20 miles in length, originating at NuStar Logistics, L.P.’s Clawson Station in Hansford County, Texas and terminating at The Shamrock Pipe Line Corporation’s Gruver Station in Hansford County, Texas.

A-7



Turpin-Gruver 6” - A six inch (6”) nominal diameter pipeline, approximately 304,313 feet / 57.64 miles in length, originating at Valero Plains Company LLC’s Turpin Terminal in Beaver County, Oklahoma and terminating at The Shamrock Pipe Line Corporation’s Gruver Station in Hansford County, Texas.
Gruver-McKee 6” - A six inch (6”) nominal diameter pipeline, approximately 157,609 feet / 29.85 miles in length, originating at The Shamrock Pipe Line Corporation’s Gruver Station in Hansford County, Texas and terminating at The Shamrock Pipe Line Corporation’s McKee scrapper trap site in Moore County, Texas.
McKee - McKee Refinery 8” - An eight inch (8”) nominal diameter pipeline, approximately 4,747 feet / 0.90 miles in length, originating at The Shamrock Pipe Line Corporation’s McKee scrapper trap site in Moore County, Texas and terminating at the Valero McKee Refinery in Moore County, Texas.
Turpin 6” (Hansford County, TX) - A six inch (6”) nominal diameter pipeline, approximately 5,899 feet / 1.12 miles in length, originating west of SH 15 in Hansford County, Texas and terminating south of FM 1262 in Hansford County, Texas.
Turpin 6” (Moore County, TX) - A six inch (6”) nominal diameter pipeline, approximately 5,280 feet / 1.0 miles in length, originating at The Shamrock Pipe Line Corporation’s McKee scrapper trap site in Moore County, Texas and terminating at the Valero McKee Refinery in Moore County, Texas.

A-8

EXHIBIT B

Operational Services

General Note: Not all of the following Operational Services apply with respect to each Asset. Rather, the Seconded Employees working at a specific location shall only be required to provide those Operational Services applicable to the Assets at such location.

List of Operational Services

Operation of the Assets in accordance with prudent industry practice and the directions for product and feedstock movements given by GP (or, where customary practice dictates, customers of the Partnership, in which case such directions shall be deemed for purposes of this Agreement to have come from GP, acting for and on behalf of the Partnership), including but not limited to operation of the pump stations and other facilities within such operating parameters and specifications as may be in accordance with sound engineering and operating practices and applicable laws, operation of meter stations, including calibration of measurement and product analysis equipment, operation of booster pumps, providing custody measurement as required and the coordination of product and feedstock movements as directed.

Operation of truck rack loading and unloading, including blending operations, management of computer loading systems and processing of delivery tickets.

Operation of vapor recovery systems, to include emission monitoring requirements.

Operation of wastewater treatment systems and/or oil water separator systems (in compliance with all applicable hazardous waste handling procedures).

Provision of communications, inspection, surveillance, flow control, corrosion control and monitoring.

Establishment of and compliance with safety, health, environmental, training, emergency response, spill response and other programs in connection with the operation of the Assets.

Preparation and retention of appropriate records and logs as required by applicable laws and consistent with past practice (subject to changes required by changes in law and/or the adoption of new policies and procedures).

Maintenance of instrument systems required for performance of pipeline monitoring and control services, product analysis and measurements in accordance with applicable requirements and generally accepted industry practices.

B-1

Providing scheduling services for all products shipped into and delivered out of the Assets, with appropriate consultation and coordination with affected refineries, third-party pipelines, third-party off-line delivery and shipper personnel, and control room personnel.

Coordination of all inventory management activities and assistance in the development and implementation of inventory control policies and guidelines regarding the Assets.

Determining net volume received and delivered by utilizing measurement facilities installed, operated and maintained in accordance with the latest edition of the American Petroleum Institute Manual of Petroleum Measurement Standards and standard industry practices, and reconciliation of book inventory with actual inventory.

Provision of sufficient on-the-job and outside training to employees and contractors operating and maintaining the Assets for the operation of the Assets in a safe and efficient manner in accordance with the applicable Partnership policies and procedures and applicable governmental rules, regulations and laws.

Preparation, filing and renewal, as applicable and, to the extent not performed under the Omnibus Agreement, of all operating licenses and/or permits as directed by GP.

Emergency response services, including but not limited to closing pipeline valves in connection with a response to any emergency involving the Assets.

Laboratory and analytical services including but not limited to product quality and assurance analysis.

Additive procurement services and inventory management of additive inventories (except to the extent any additives are procured and/or managed by customers of the Partnership, in which case the services hereunder shall consist of appropriate coordination with such customers).

Security services, including but not limited to controlling access to the Assets and (except to the extent such activities are customarily conducted by customers of the Partnership) negotiation, execution and management of access agreements.

Maintenance and repair of the Assets, including but not limited to pipeline repairs, terminal repairs, aerial pipeline patrols, population density counts, right-of-way maintenance (including but not limited to filling of washes, mowing weeds and brush, repairing fences, erection and maintenance of fences, barricades or other suitable protection to protect the Assets and associated equipment from damage due to mowers, trucks or other vehicles, flagging and identification of pipelines in the event of excavation in the vicinity of the pipelines by the Operators or third parties), in each case, within such maintenance/repair parameters and specifications as may be in accordance with sound engineering and maintenance practices and applicable laws.

Implementation and administration of a preventative maintenance program for the Assets, including, without limitation, periodic testing, adjustment and maintenance of the Assets, meter station and

B-2

valve inspections and meter proving maintenance, in each case in accordance with prudent maintenance practices and applicable laws.

Implementation and administration of a tank maintenance and integrity program for the Assets, including, without limitation, periodic testing, maintenance, repair and/or replacement in each case in accordance with prudent maintenance practices and applicable laws.

Inspection services for monitoring work performed by others in the vicinity of the Assets.

Preparation and retention of appropriate records and logs as required by applicable laws and that a prudent provider of maintenance services would maintain regarding the Assets.

Reconstruction, reconditioning, overhaul and/or replacement of the Assets, as appropriate.

Technical services for trouble-shooting problems, improving the Assets performance, upgrading the Assets, repairing the Assets and/or meeting regulatory or safety requirements.

Maintaining compliance with all applicable federal, state and local environmental, health and safety laws including but not limited to conducting all environmental investigation and remediation activities, as required by federal, state and local environmental laws and prudent business practices.

Facilitating the acquisition of all materials (including spare parts inventories), equipment, services, supplies and labor necessary for the maintenance and repair of the Assets.

Except to the extent provided under the Omnibus Agreement, performing all planning, design and engineering functions related to the maintenance and repair of the Assets including but not limited to selecting and overseeing contractors and material suppliers for such activities.

Preparing excavation plans for pipeline right-of-way work, and advising the Partnership of any right-of-way work which could threaten the integrity of the Partnership’s pipelines.

Construction, reconstruction, reconditioning, overhaul and replacement of the Assets, including but not limited to engineering, procurement, construction and project performance testing and services relating thereto. Related functions include:


•	Oversight and management services as may be necessary in connection with these activities.


•	Planning, design and engineering functions related to the activities.


•	Procurement of all materials, equipment, services, supplies and labor necessary for and related to the activities.

Preparation and/or assistance in the preparation of capital project (AFE) documents for approval by the Partnership.

B-3

Routine maintenance, repairs and inspections of the tanks and other facilities at the St. Charles Terminal and Houston Terminal.

Routine maintenance, repairs and inspections of the tanks and other facilities at the Corpus Christi East Terminal and Corpus Christi West Terminal.

Routine maintenance, repairs and inspections of the tanks and other facilities at the McKee Terminal.

Together with such other routine maintenance and operational services as GP may require in connection with the ownership and operation of the Assets consistent with the Operators’ past practices at the Assets.

B-4

Exhibit 10.07

TERMINAL SERVICES SCHEDULE

(McKee Terminal)

This Terminal Services Schedule (this “Schedule”) is entered into on the 1^stday of April, 2016 (the “Effective Date”) by and between VALERO PARTNERS OPERATING CO. LLC, a Delaware limited liability company (“Company”) and VALERO MARKETING AND SUPPLY COMPANY, a Delaware corporation (“Customer”) pursuant to the Master Terminal Services Agreement (“Agreement”) between Company and Customer dated December 16, 2013. Except as set forth herein, the terms and conditions of the Agreement are incorporated by reference into this Schedule. Unless otherwise defined in this Schedule, the defined terms in this Schedule will have the same meaning used in the Agreement.

1. Definitions. For purposes of this Schedule and the Agreement as it relates to this Schedule, the following terms shall have the meanings set forth below:

(a) “Tankage” means the crude oil, refined products and intermediates storage tanks identified on Exhibit A attached hereto and incorporated herein for all purposes that are located at the Terminal.

(b) “Tank” means any individual crude oil, refined product or intermediate storage tank within the Tankage. The Company may designate alternate tankage in the event the Tanks become unavailable.

2. Term. This Schedule shall have a primary term commencing on the Effective Date and ending 10 years from the Effective Date (the “Initial Term”), and may be renewed by Customer, at Customer’s sole option, for one successive 5 year renewal term (a “Renewal Term”), upon at least 180 Days’ written Notice from Customer to Company prior to the end of the Initial Term. The Initial Term and Renewal Term, if any, shall be referred to in this Schedule as the “Term”.

3. Terminal. The terminal services contemplated by this Schedule will be performed at Company’s Affiliate’s McKee Tank Farm located in Sunray, Texas (the “Terminal”).

4. Refinery. The Terminal supports Customer’s Affiliate’s McKee Refinery located in Sunray, Texas (the “Refinery”).

5. Product. The products to be handled and stored under this Schedule (each a “Product”, and collectively the “Products”) are those specified Products set forth on Exhibit B attached hereto and incorporated herein for all purposes.

6. Receipts and Deliveries. Product will be received at and delivered from the Terminal by pipeline. Custody of Products received at the Terminal shall pass to Company at the Demarcation Point. Custody of Products delivered from the Terminal shall pass to Customer at the Demarcation Points. For purposes of this Section 6, the “Demarcation Points” shall mean those points at which any receipt pipeline to the Tankage or delivery pipeline from the Tankage connects to any receipt or delivery pipeline outside of the Terminal that is used for the purpose of transporting Products to and from the Terminal. The Parties may determine the actual Demarcation Points following the

Effective Date and agree to execute any amendments or supplements to this Schedule if necessary to incorporate the actual Demarcation Points.

7. Specifications. Customer will ensure that all of Customer’s Product delivered to the Terminal under the terms of this Schedule meets the Company’s applicable specifications for such Product (the “Specifications”), provided that (i) the Product specifications and properties remain consistent with the pipeline system specifications for the applicable pipelines connected to the Terminal, and (ii) the Product specifications and properties comply with any specifications imposed by Law. These Specifications are minimum specifications for the Terminal and do not supersede any published or otherwise required specification set forth by the delivering pipelines that may be more stringent for movements on those third party pipelines. Ethanol delivered to the Terminal by or on behalf of Customer shall meet all the specifications listed in the latest version of ASTM D4806.

8. Throughput Charges. For each Month during the Term, Customer will pay Company (i) $0.333 per Barrel of Product throughput and handled at the Terminal for or on behalf of Customer for throughput volumes up to 320,000 average Barrels per Day of Products (“Tier 1 Rate”), and (ii) $0.05 per Barrel of Products throughput and handled at the Terminal by or on behalf of Customer on terminal throughput volumes in excess of 320,000 average Barrels per Day of Products (“Tier 2 Rate”), in each case subject to escalation pursuant to Section 11. The Tier 1 Rate and Tier 2 Rate may be referred to collectively or individually as the “Throughput Charge”. For the avoidance of doubt, to the extent any Quarterly Deficiency Payment is applied to any Quarterly Surplus Volumes (such volumes being referred to as “Pre-Paid Volumes”), the Throughput Charge for such Pre-Paid Volumes shall be the Tier 1 Rate for the Calendar Quarter in which such Quarterly Deficiency Payment was made. For each Month within a Calendar Quarter, the Throughput Charge applied to volumes tendered for such Month shall be based on a quarter-to-date calculation of the Minimum Monthly Commitment (as defined below), and the revenue billed for such Month shall be adjusted to reflect such quarter-to-date calculation. For purposes of this Section 8, the term “Minimum Monthly Commitment” shall be 272,000 average Barrels per Day multiplied by the number of days in the applicable Month. An illustrative example of the quarter-to-date calculation of the Minimum Monthly Commitment and applicable Throughput Charges for such quarter is attached hereto as Exhibit C. For avoidance of doubt, movements of Product from the Terminal to the Refinery for processing at the Refinery and movements of Product out of the Refinery from processing to the Terminal are not considered throughput for which Customer will be charged a Throughput Charge.

9. Other Charges.

(a) Holdover Fee. If Customer does not remove its Product from the Terminal on or before the date this Schedule terminates, except to the extent any delay in removal is caused by Company, Customer will pay a holdover fee of $0.05 per Barrel of Product per day in addition to any Throughput Charge.

(b) Sampling Fee. Customer will pay a $100 fee per sample for all samples drawn at Customer’s request excluding any composite samples taken on pipeline receipts to or pipeline deliveries from the Terminal.

10. Minimum Throughput Commitments. For each Calendar Quarter during the Term, Customer shall tender or cause to be tendered an average of at least 272,000 Barrels per Day of Products to or from the Terminal for handling in approximately ratable quantities (such average, the “Minimum Quarterly Commitment”) and Company shall accept and deliver such Product in accordance with the terms of this Schedule. Except as expressly provided in the Agreement in connection with an Outage, a Company Force Majeure or a Customer Force Majeure, if during any Calendar Quarter, Customer fails to satisfy its Minimum Quarterly Commitment in such Calendar Quarter, then Customer will pay Company a deficiency payment (each, a “Quarterly Deficiency Payment”) in an amount equal to the volume of the deficiency (the “Quarterly Deficiency Volume”) multiplied by the Throughput Charge. Customer shall pay Company the amount of such Quarterly Deficiency Payment along with any Throughput Charge payable hereunder. The dollar amount of any Quarterly Deficiency Payment paid by Customer may be applied as a credit against any amounts incurred by Customer and owed to Company with respect to volumes of Product handled at the Terminal in excess of Customer’s Minimum Quarterly Commitment (or, if this Schedule expires or is terminated, to volumes handled at the Terminal in excess of the applicable Minimum Quarterly Commitment in effect as of the date of such expiration or termination) (such excess volume in any Calendar Quarter during the Term is referred to as the “Quarterly Surplus Volume”) during any of the succeeding four Calendar Quarters, after which time any unused credits will expire. This Section 10 shall survive the expiration or termination of this Schedule, if necessary for the application of any Quarterly Deficiency Payment against any Quarterly Surplus Volume as set forth herein.

11. Escalation. On July 1, 2017, and on July 1^st of each year thereafter while this Schedule is in effect, Company shall adjust the Throughput Charge, which adjustments shall be effective as of July 1^st of the year in which such election is made, by multiplying the Throughput Charge, 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 on March 31^st 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^st 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.

12. Nominations. Customer shall furnish to Company, by the 20^thDay of each Month preceding the Month of delivery (except for the first Month of the Term, which shall be on or before the 5^thday of such Month), a delivery schedule that includes the estimated quantity of Products that Customer anticipates delivering to and receiving from the Terminal during the following Month.

13. Monthly Statements. For purposes of this Schedule and the Agreement as it relates to this Schedule, Section 6.01 of the Agreement is hereby amended and restated as follows:

Within 10 days after the end of each Month, Company will provide Customer a statement (a “Monthly Statement”) for each proceeding Month, which Monthly Statement shall

include for each Product specified on Exhibit B to this Schedule: receipts and withdrawals, and the Throughput Charges due the Company (after application of any Quarterly Surplus Volume credit to which the Company may be entitled pursuant to this Schedule). If requested by Customer, Company will provide pipeline meter tickets for receipts and withdrawals at the Terminal for such Month, if available. Each Monthly Statement immediately following the last Month in each Calendar Quarter shall include a report that sets forth the amount of Quarterly Deficiency Volume, if any, or Quarterly Surplus Volume, if any, and any Quarterly Deficiency Payment that may be due and payable by Customer.

14. Liens. Customer hereby grants to Company a warehouseman’s lien on all of Customer’s Products in storage at the Terminal for any amounts payable by Customer to Company that have not been paid when due hereunder. If a warehouse receipt is required under Law for such a lien to arise, this Schedule will be deemed to be the warehouse receipt for all Products at the Terminal.

15. Special Termination by Customer. If Customer or any of its Affiliates determines to completely or partially suspend refining operations at the Refinery for a period of at least 12 consecutive Months, the Parties will negotiate in good faith to agree upon a reduction of the Minimum Quarterly Commitment to reflect such suspension of operations. If the Parties are unable to agree to an appropriate reduction of the Minimum Quarterly Commitment, then after Customer or such Affiliate has made a public announcement of such suspension, Customer may provide written Notice to Company of its intent to terminate this Schedule and this Schedule will terminate 12 Months following the date such Notice is delivered to Company. In the event Customer or such Affiliate publicly announces, prior to the expiration of such 12-Month period, its intent to resume operations at the Refinery, then such Notice shall be deemed revoked and this Schedule shall continue in full force and effect as if such Notice had never been delivered.

16. Effect of Customer Restructuring. If Customer or any of its Affiliates determines to restructure its respective supply, refining or sales operations at the Refinery in such a way as could reasonably be expected to materially and adversely affect the economics of Customer’s performance of its obligations under this Schedule, then the Parties will negotiate in good faith an alternative arrangement that is no worse economically for Company than the economic benefits to be received by Company under this Schedule, which may include the substitution of new commitments of Customer on other assets owned or to be acquired or constructed by Company.

17. Additional Services. If Company performs additional services at Customer’s written request, or if Company, upon written notice to Customer, performs any additional services because Customer’s Product does not meet the applicable Specifications, Customer will pay Company the cost of such services plus an administrative fee that is equal to 10% of such documented, invoiced costs.

18. Removal of Tank for Service Inspection. The Parties agree that if the Company determines to remove a Tank included in the Terminal from service or if a Tank is removed from service for inspection in compliance with API Standard 653 for Aboveground Storage Tanks then Company will not be required to utilize, operate or maintain such Tank or provide the services required under this Schedule with respect to such Tank; provided however, that any such removal will not reduce

the Throughput Charge except to the extent that Company is unable to provide to Customer the applicable throughput capacity to satisfy the Minimum Quarterly Commitment.

19. Tank Cleaning and Removal of Products. Notwithstanding any provision herein to the contrary, Customer will be responsible for all actual costs incurred by Company for tank cleaning, product removal, and disposal of all residual Product (including any BS&W) during the Term in the event (x) of a change in service of a Tank, (y) any cleaning of the Tankage is necessary for Company to comply with Applicable Law, including compliance with API 653 or any legal or regulatory requirement adopting or substantially similar to the requirements set forth in API 653, or (z) it becomes necessary to remove a Tank from service for maintenance. Under such circumstances, Company shall exercise commercially reasonable efforts to (a) provide Customer with at least sixty (60) days prior written notice of its intention to remove a Tank for cleaning or maintenance, which notice shall include (i) the legal basis for such requirement, if required, and (ii) the estimated amount of time any such Tank will be taken out of service for such purpose, and (b) except as otherwise prohibited by Applicable Law, clean only one Tank in a particular service at any given time while allowing the other Tanks to remain in service, subject to any Force Majeure event; provided, however, the failure of Company to timely provide such notice shall not relieve Customer of its obligations required hereunder.

20. Dewatering Services. Notwithstanding any provision herein to the contrary, Company shall not be responsible for dewatering Customer’s Products. To the extent it becomes necessary during the Term to remove and dispose of water from the Tanks, Customer shall bear the cost of, or reimburse the Company for, such removal and disposal by vacuum truck. The Company shall control and oversee, and cooperate with Customer on arranging for, the completion of such removal and disposal.

21. Marketing of Throughput and Storage Services to Third Parties. During the Term, Company may provide throughput services to third parties at the Terminal and storage services to third parties in the Tankage, provided that, (i) the provision of such throughput and storage services to third parties is not reasonably likely to negatively impact Customer’s ability to use either the Terminal or the Tankage in accordance with the terms of this Schedule in any material respect, (ii) prior to any third party use of either of the Terminal or the Tankage or the entry into any agreement with respect thereto, Company shall have received prior written consent from Customer with respect to such third party usage or the entry into such agreement, as applicable, not to be unreasonably withheld, conditioned or delayed and (iii) to the extent such third-party usage reduces the ability of Company to provide the throughput capacity to satisfy the Minimum Quarterly Commitment, the Minimum Quarterly Commitment shall be proportionately reduced to the extent of the difference between the Minimum Quarterly Commitment and the amount that can be throughput at the Terminal or stored in the Tankage (prorated for the portion of the Quarter during which the Minimum Quarterly Commitment was unavailable).

22. Increase in Ad Valorem Taxes. If Company’s ad valorem tax obligation related to the Tankage and other facilities at the Terminal substantially increases after the Effective Date as a result of the change in ownership of the Terminal or the Terminal being assessed separately from the Refinery, the Parties will renegotiate the Throughput Charge in good faith based on the amount of the increased tax liability and Company’s good faith estimate of Customer’s pro rata share (or

if the amount of the increased tax liability relate only to Customer’s Tankage, then 100%) of the increase in the Throughput Charges necessary to cover such increased tax liability.

23. Operating and Maintenance Expenses. If during the first three years of the Term of this Schedule, Company’s expenses related to the operation and maintenance of the Tankage and other facilities at the Terminal substantially increase or decrease relative to the Parties’ expectations as of the Effective Date, the Parties will renegotiate the Throughput Charges in good faith in order to reset the Throughput Charges to preserve the Parties’ original economic, operational, commercial, and competitive expectations related to this Schedule as of the Effective Date.

24. Contacts and Notices.

(a) For Company. The following contacts and their respective subject matter expertise are provided for convenience purposes only. All formal notices and communication required under this Schedule to Company shall be in writing and delivered as set forth in the Agreement:



Operational:	VP Pipelines & Terminals
	Tel: (210) 345-4057
	Fax: (210) 370-4801-

Invoice:	Troy Heard, Supervisor Accounting
	Tel: (210) 345-3219
	Fax: (210) 370-4355

(b) For Customer: The following contacts and their respective subject matter expertise are provided for convenience purposes only. All formal notices and communication required under this Schedule to Customer shall be in writing and delivered as set forth in the Agreement:



Operational:	VP & General Manager – McKee Refinery
	Tel: (806) 935-1256
	Email: Lauren.Bird@valero.com

Invoice:	Troy Heard, Supervisor Accounting
	Tel: (210) 345-3219
	Fax: (210) 370-4355

IN WITNESS WHEREOF, the Parties hereto have caused this Schedule to be duly executed by their respective authorized officers.

Company:

VALERO PARTNERS OPERATING CO. LLC



By:	/s/ Richard F. Lashway
Name:	Richard F. Lashway
Title:	President and Chief Operating Officer

Customer:

VALERO MARKETING AND SUPPLY COMPANY



By:	/s/ R. Lane Riggs
Name:	R. Lane Riggs
Title:	Executive Vice President

[Signature Page to Terminal Services Schedule (McKee Terminal)]

EXHIBIT A

TANKS



McKee Tank Ref #	Type	Shell Capacity (Barrels)
TK1	CR	9,999
TK1001	EFR	99,085
TK1003	EFR	98,750
TK100M1	CR	100,621
TK100M2	EFR	107,074
TK100M3	EFR	109,957
TK101	EFR	100,088
TK120M1	EFR	118,453
TK120M2	EFR	117,815
TK120M3	EFR	116,945
TK120M4	IFR	119,440
TK121	CR	3,078
TK125	CR	3,119
TK126	CR	3,114
TK127	CR	9,983
TK128	CR	9,920
TK130	CR	67,427
TK133	EFR	19,297
TK134	EFR	19,324
TK138	EFR	19,880
TK139	EFR	19,765
TK140	IFR	24,854
TK142	CR	3,121
TK145	IFR	3,124
TK148	CR	9,239
TK1501	EFR	14,783
TK1502	EFR	14,800
TK150M1	EFR	149,515
TK150M2	IFR	150,150
TK150M3	EFR	161,044
TK150M4	EFR	163,613
TK157	EFR	117,271
TK161	EFR	19,772

Exhibit A – Page 1



McKee Tank Ref #	Type	Shell Capacity (Barrels)
TK163	EFR	19,871
TK164	EFR	9,967
TK166	CR	10,197
TK167	EFR	19,943
TK168	EFR	19,688
TK2	CR	9,645
TK200M1	EFR	211,453
TK20M5	CR	20,046
TK20M6	CR	20,046
TK20M7	CR	20,046
TK21	CR	20,153
TK22	CR	19,768
TK24	CR	5,127
TK2601	CR	2,665
TK2602	CR	2,664
TK2606	CR	2,660
TK2607	CR	2,662
TK2608	CR	4,975
TK29	CR	5,127
TK30	CR	5,127
TK3001	EFR	29,440
TK3002	EFR	29,501
TK300M1	CR	295,470
TK300M2	CR	298,504
TK300M3	CR	299,684
TK31	EFR	70,757
TK32	CR	5,127
TK33	CR	1,005
TK34	CR	1,006
TK4	IFR	166,162
TK5501	CR	55,521
TK5502	CR	55,521
TK5503	CR	55,521
TK5504	EFR	54,267
TK5505	EFR	54,739
TK5506	IFR	55,355
TK551	CR	3,109

Exhibit A – Page 2



McKee Tank Ref #	Type	Shell Capacity (Barrels)
TK60M1	EFR	68,866
TK60M2	EFR	66,219
TK6701	EFR	65,334
TK6702	EFR	66,110
TK80M1	IFR	80,950
	TOTAL:	4,414,418

Exhibit A – Page 3

EXHIBIT B

PRODUCTS

Products are hydrocarbons commonly stored in atmospheric storage tanks (<11 psia TVP) (True Vapor Pressure) such as, but not limited to:

Crude (Crude Oil, Blended Crude Oil, Crude Oil Mixture, Diluted Crude Oil, Synthetic Crude, Bitumen Crude)

Gasoline and Gasoline Blendstocks including Alkylate, Naphtha, Reformate, Cat gasoline, LSR, Naphtha

Distillate (Ultra Low Sulfur Diesel, Kerosene, Jet Fuel, Light Cycle Oil, Other distillates such as High Sulfur Diesel)

Gas Oils (Vacuum Gas Oil (VGO), Coker gas oil)

Resid (Fuel Oil, Residual Fuel Oil, No. 6 High Sulfur, Slurry, ATB)

Benzene, Toluene, Xylene

Products exclude:

Petcoke

Sulfur

Butane

Propane

Propylene

Hydrogen

Natural Gas

Butane / Butylene

P/P

NC4

Y-Grade

Acid

Spent Caustic

Process Water

Sour Water

Exhibit B – Page 1

EXHIBIT C

EXAMPLE

Exhibit C – Page 1

EXHIBIT 10.08

LEASE AND ACCESS AGREEMENT

(McKee Terminal)

THIS LEASE AND ACCESS AGREEMENT (this “Lease”) is made and entered into to be effective as of the 1^st day of April, 2016 (the “Effective Date”), between Diamond Shamrock Refining Company, L.P., a Delaware limited partnership (herein called “Lessor”), and Valero Partners McKee, 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 Sunray, 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

DEFINITIONS

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

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.

“Contribution Agreement” means that certain Contribution Agreement dated April 1, 2016, among Valero Terminaling and Distribution Company and the Partnership.

“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”.

“Disclaimed Matters” has the meaning set forth in Section 5.4(b).

“Environmental Cleanup” has the meaning set forth in Section 10.4(c).

“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 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.

“Force Majeure” has the meaning set forth in Section 19.8.

“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.

“Initial Term” has the meaning set forth in Section 3.1.

“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 attorney’s and expert’s fees) of any and every kind or character, known or unknown, fixed or contingent.

“Mortgage” has the meaning set forth in Section 19.2.

“Mortgagor” has the meaning set forth in Section 19.3.

“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, Valero Partners Houston, LLC, a Delaware limited liability company, Valero Partners Corpus East, LLC, a Delaware limited liability company, Valero Partners McKee, LLC, a Delaware limited liability company, and Valero Partners CCTS, 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, a Delaware limited partnership.

“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 2.3.

“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 Sunray, 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 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 McKee Refinery”) owned and operated by Lessor in Sunray, 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 Sunray, 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.

“Removal Date” has the meaning set forth in Section 15.2.

“Renewal Term” has the meaning set forth in Section 3.1.

“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 control equipment, 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.

“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; (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 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 April 1, 2016 (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 $594,000 per year, payable in equal monthly installments on or before the last day of each month in the amount of $49,500. 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 19.5 (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 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, 2017, 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).

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 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.

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 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 13.1(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 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 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.

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 Contribution 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, 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 (“Environmental Cleanup”).

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.

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.

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:

(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 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.

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.

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 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 Contribution 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 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.

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 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:

Diamond Shamrock Refining Company, L.P.

One Valero Way

San Antonio, Texas 78249

Attention: General Counsel

Facsimile: (210) 345-3214

If to Lessee:

Valero Partners McKee, 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 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 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]

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

LESSOR:



DIAMOND SHAMROCK REFINING COMPANY, L.P.

By:	Valero Services, Inc.
Its:	General Partner


By:	/s/ R. Lane Riggs
Name:	R. Lane Riggs
Title:	Executive Vice President

LESSEE:



VALERO PARTNERS MCKEE, LLC


By:	/s/ Richard F. Lashway
Name:	Richard F. Lashway
Title:	President and Chief Operating Officer

Signature Page to Lease and Access Agreement (McKee Terminal)

EXHIBIT A

TANKS



McKee Tank Ref #	Type	Shell Capacity (Barrels)
TK1	CR	9,999
TK1001	EFR	99,085
TK1003	EFR	98,750
TK100M1	CR	100,621
TK100M2	EFR	107,074
TK100M3	EFR	109,957
TK101	EFR	100,088
TK120M1	EFR	118,453
TK120M2	EFR	117,815
TK120M3	EFR	116,945
TK120M4	IFR	119,440
TK121	CR	3,078
TK125	CR	3,119
TK126	CR	3,114
TK127	CR	9,983
TK128	CR	9,920
TK130	CR	67,427
TK133	EFR	19,297
TK134	EFR	19,324
TK138	EFR	19,880
TK139	EFR	19,765
TK140	IFR	24,854
TK142	CR	3,121
TK145	IFR	3,124
TK148	CR	9,239
TK1501	EFR	14,783
TK1502	EFR	14,800
TK150M1	EFR	149,515
TK150M2	IFR	150,150
TK150M3	EFR	161,044
TK150M4	EFR	163,613
TK157	EFR	117,271
TK161	EFR	19,772

Exhibit A



McKee Tank Ref #	Type	Shell Capacity (Barrels)
TK163	EFR	19,871
TK164	EFR	9,967
TK166	CR	10,197
TK167	EFR	19,943
TK168	EFR	19,688
TK2	CR	9,645
TK200M1	EFR	211,453
TK20M5	CR	20,046
TK20M6	CR	20,046
TK20M7	CR	20,046
TK21	CR	20,153
TK22	CR	19,768
TK24	CR	5,127
TK2601	CR	2,665
TK2602	CR	2,664
TK2606	CR	2,660
TK2607	CR	2,662
TK2608	CR	4,975
TK29	CR	5,127
TK30	CR	5,127
TK3001	EFR	29,440
TK3002	EFR	29,501
TK300M1	CR	295,470
TK300M2	CR	298,504
TK300M3	CR	299,684
TK31	EFR	70,757
TK32	CR	5,127
TK33	CR	1,005
TK34	CR	1,006
TK4	IFR	166,162
TK5501	CR	55,521
TK5502	CR	55,521
TK5503	CR	55,521
TK5504	EFR	54,267
TK5505	EFR	54,739
TK5506	IFR	55,355
TK551	CR	3,109

Exhibit A



McKee Tank Ref #	Type	Shell Capacity (Barrels)
TK60M1	EFR	68,866
TK60M2	EFR	66,219
TK6701	EFR	65,334
TK6702	EFR	66,110
TK80M1	IFR	80,950
	TOTAL:	4,414,418

Exhibit A

EXHIBIT B

MCKEE REFINERY

DESCRIPTION OF THE REFINERY SITE

PARCEL ONE:

Being all of Section 399, Block 44, H. & T.C. Ry. Co. Survey, Moore County, Texas, Identified as Tract IV, as described in a “Deed”, dated December 27, 1993 from D-S Venture Company, L.L.C. to Diamond Shamrock Refining Company, L.P., as recorded in Volume 445, Page 746, Official Public Records of Real Property, Moore County, Texas; SAVE AND EXCEPT the Northeast quarter (NE/4) of the Northeast quarter (NE/4) of the Northwest quarter (NW/4), being a ten acre tract of land, as described in a “General Warranty Deed”, dated October 14, 1946 from Mrs. Clyde McKee to Phillips Petroleum Company, as recorded in Volume 94, Page 503, Deed Records, Moore County, Texas.

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



McKee Tank Ref #	Type	Shell Capacity (Barrels)
TK1	CR	9,999
TK1001	EFR	99,085
TK1003	EFR	98,750
TK100M1	CR	100,621
TK100M2	EFR	107,074
TK100M3	EFR	109,957
TK101	EFR	100,088
TK120M1	EFR	118,453
TK120M2	EFR	117,815
TK120M3	EFR	116,945
TK120M4	IFR	119,440
TK127	CR	9,983
TK128	CR	9,920
TK130	CR	67,427
TK133	EFR	19,297
TK134	EFR	19,324
TK138	EFR	19,880
TK139	EFR	19,765
TK140	IFR	24,854
TK148	CR	9,239
TK1501	EFR	14,783
TK1502	EFR	14,800
TK150M1	EFR	149,515
TK150M2	IFR	150,150

Exhibit B



McKee Tank Ref #	Type	Shell Capacity (Barrels)
TK150M3	EFR	161,044
TK150M4	EFR	163,613
TK157	EFR	117,271
TK161	EFR	19,772
TK163	EFR	19,871
TK164	EFR	9,967
TK166	CR	10,197
TK167	EFR	19,943
TK168	EFR	19,688
TK2	CR	9,645
TK200M1	EFR	211,453
TK2601	CR	2,665
TK2602	CR	2,664
TK3001	EFR	29,440
TK3002	EFR	29,501
TK31	EFR	70,757
TK4	IFR	166,162
TK5504	EFR	54,267
TK5505	EFR	54,739
TK5506	IFR	55,355
TK60M1	EFR	68,866
TK60M2	EFR	66,219
TK6701	EFR	65,334
TK6702	EFR	66,110
TK80M1	IFR	80,950

PARCEL TWO:

Being the North half (N/2) of the Northwest quarter (NW/4) of Section 358, Block 44, H. & T.C. Ry. Co. Survey, Moore County, Texas, and consisting of eighty (80) acres of land, Identified as Tract II, as described in a “Deed”, dated December 27, 1993 from D-S Venture Company, L.L.C. to Diamond Shamrock Refining Company, L.P., as recorded in Volume 445, Page 746, Official Public Records of Real Property, Moore County, Texas.

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



McKee Tank Ref #	Type	Shell Capacity (Barrels)
TK121	CR	3,078
TK125	CR	3,119

Exhibit B



McKee Tank Ref #	Type	Shell Capacity (Barrels)
TK126	CR	3,114
TK142	CR	3,121
TK145	IFR	3,124
TK20M7	CR	20,046
TK24	CR	5,127
TK2606	CR	2,660
TK2607	CR	2,662
TK2608	CR	4,975
TK29	CR	5,127
TK30	CR	5,127
TK32	CR	5,127
TK33	CR	1,005
TK34	CR	1,006
TK551	CR	3,109

PARCEL THREE:

Being the North half (N/2) of the Northeast quarter (NE/4) of Section 358, Block 44, H. & T.C. Ry. Co. Survey, Moore County, Texas, and consisting of eighty (80) acres of land, Identified as Tract I, as described in a “Deed”, dated December 27, 1993 from D-S Venture Company, L.L.C. to Diamond Shamrock Refining Company, L.P., as recorded in Volume 445, Page 746, Official Public Records of Real Property, Moore County, Texas.

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



McKee Tank Ref #	Type	Shell Capacity (Barrels)
TK20M5	CR	20,046
TK20M6	CR	20,046
TK21	CR	20,153
TK22	CR	19,768
TK300M1	CR	295,470
TK300M2	CR	298,504
TK300M3	CR	299,684
TK5501	CR	55,521
TK5502	CR	55,521
TK5503	CR	55,521

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.

Exhibit D

•

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.

•

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.

Exhibit D

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