Rights Agreement (2006)Full Document 

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Rights Agent
Dated as of July 19, 2006



Section 1.
  Certain Definitions     1  
Section 2.
  Appointment of Rights Agent     4  
Section 3.
  Issue of Right Certificates     4  
Section 4.
  Form of Right Certificates     5  
Section 5.
  Countersignature and Registration     5  
Section 6.
  Transfer, Split Up, Combination and Exchange of Right Certificates; Mutilated, Destroyed, Lost or Stolen Right Certificates     6  
Section 7.
  Exercise of Rights; Purchase Price; Expiration Date of Rights     6  
Section 8.
  Cancellation and Destruction of Right Certificates     8  
Section 9.
  Availability of Preferred Units     8  
Section 10.
  Preferred Units Record Date     9  
Section 11.
  Adjustment of Purchase Price, Number of Units or Number of Rights     9  
Section 12.
  Certificate of Adjusted Purchase Price or Number of Units     15  
Section 13.
  Consolidation, Merger or Sale or Transfer of Assets or Earning Power     15  
Section 14.
  Fractional Rights and Fractional Units     16  
Section 15.
  Rights of Action     17  
Section 16.
  Agreement of Right Holders     18  
Section 17.
  Right Certificate Holder Not Deemed a Unitholder     18  
Section 18.
  Concerning the Rights Agent     18  
Section 19.
  Merger or Consolidation or Change of Name of Rights Agent     19  
Section 20.
  Duties of Rights Agent     19  
Section 21.
  Change of Rights Agent     21  
Section 22.
  Issuance of New Right Certificates     22  
Section 23.
  Redemption     22  
Section 24.
  Exchange     23  
Section 25.
  Notice of Certain Events     24  
Section 26.
  Notices     24  
Section 27.
  Supplements and Amendments     25  
Section 28.
  Successors     25  
Section 29.
  Benefits of this Agreement     25  
Section 30.
  Severability     26  
Section 31.
  Governing Law     26  
Section 32.
  Counterparts     26  
Section 33.
  Descriptive Headings     26  
Section 34.
  Force Majeure     26  



     This Rights Agreement (the “Agreement”), dated as of July 19, 2006, between Valero GP Holdings, LLC, a Delaware limited liability company (the “Company”), and Computershare Investor Services, LLC (the “Rights Agent”).
     The Board of Directors of the Company has authorized and declared a distribution of one preferred unit purchase right (a “Right”) for each Unit (as hereinafter defined) of the Company outstanding as of the close of business (as hereinafter defined) on July 19, 2006 (the “Record Date”), each Right representing the right to purchase one one-hundredth of a Preferred Unit (as hereinafter defined) of the Company, upon the terms and subject to the conditions herein set forth, and has further authorized and directed the issuance of one Right with respect to each Unit that shall become outstanding between the Record Date and the earliest of the Distribution Date, the Redemption Date and the Final Expiration Date (as such terms are hereinafter defined).
     Accordingly, in consideration of the premises and the mutual agreements herein set forth, the parties hereby agree as follows:
     Section 1. Certain Definitions. For purposes of this Agreement, the following terms have the meanings indicated:
     (a) “Acquiring Person” shall mean any Person (as such term is hereinafter defined) who or which, together with all Affiliates and Associates (as such terms are hereinafter defined) of such Person, shall be the Beneficial Owner (as such term is hereinafter defined) of 15% or more of the Units of the Company then outstanding, but shall not include (i) the Company, (ii) any Subsidiary (as such term is hereinafter defined) of the Company, (iii) any Initial Member (as such term is defined in the LLC Agreement), (iv) any Affiliate or Associate of any Initial Member, (v) any employee benefit plan of the Company or any Subsidiary of the Company, or (vi) any entity holding Units for or pursuant to the terms of any such plan. Notwithstanding the foregoing, no Person shall become an “Acquiring Person” as the result of an acquisition of Units by the Company which, by reducing the number of units outstanding, increases the proportionate number of units beneficially owned by such Person to 15% or more of the Units of the Company then outstanding; provided, however, that if a Person shall become the Beneficial Owner of 15% or more of the Units of the Company then outstanding by reason of unit purchases by the Company and shall, after such unit purchases by the Company, become the Beneficial Owner of any additional Units of the Company, then such Person shall be deemed to be an “Acquiring Person.” Notwithstanding the foregoing, if the Board of Directors of the Company determines in good faith that a Person who would otherwise be an “Acquiring Person”, as defined pursuant to the foregoing provisions of this paragraph (a), has become such inadvertently, and such Person divests as promptly as practicable a sufficient number of Units so that such Person would no longer be an “Acquiring Person,” as defined pursuant to the foregoing provisions of this paragraph (a), then such Person shall not be deemed to be an “Acquiring Person” for any purposes of this Agreement.

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