Exhibit 4.08


 




 


 





KANEB PIPE LINE OPERATING PARTNERSHIP, L.P.,


ISSUER


 


VALERO L.P.,


AFFILIATE GUARANTOR


 


VALERO LOGISTICS OPERATIONS, L.P.,


AFFILIATE GUARANTOR


 


AND


 


JPMORGAN CHASE BANK,


TRUSTEE


 


FIFTH SUPPLEMENTAL INDENTURE


DATED AS OF JULY 1, 
2005


 


TO


 


INDENTURE


DATED AS OF FEBRUARY 21,
2002




 


 





 





















 


TABLE OF CONTENTS


 


	
  ARTICLE I AMENDMENTS TO THE INDENTURE

  	
   

  
	
  SECTION 1.01
  Definitions

  	
   

  
	
  SECTION 1.02
  Unconditional Affiliate Guarantee

  	
   

  
	
   

  	
   

  
	
  ARTICLE II MISCELLANEOUS

  	
   

  
	
  SECTION 2.01
  Execution as Supplemental Indenture

  	
   

  
	
  SECTION 2.02
  Responsibility for Recitals, Etc

  	
   

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

  	
   

  
	
  SECTION 2.04
  Governing Law

  	
   

  
	
  SECTION 2.05
  Execution and Counterparts

  	
   

  
	
  SECTION 2.06
  Capitalized Terms

  	
   

  



 


i





















 


FIFTH SUPPLEMENTAL
INDENTURE, dated as of July 1, 2005 (this “Fifth Supplemental Indenture”),
among Kaneb Pipe Line Operating Partnership, L.P., a Delaware limited partnership
having its principal office at 2435 North Central Expressway, Richardson, Texas
(the “Partnership”), Valero L.P., a Delaware limited partnership and an
Affiliate (as defined below) of the Partnership (“Valero”), Valero
Logistics Operations, L.P., a Delaware limited partnership and a 100%-owned
subsidiary of the Partnership (“Logistics” and together with Valero,
each an “Affiliate Guarantor” and collectively the “Affiliate
Guarantors”), and JPMorgan Chase Bank, National Association, a national
banking association, as trustee (the “Trustee”).


 


RECITALS OF THE
PARTNERSHIP


 


The Partnership and the
predecessor to the Trustee have heretofore executed and delivered the Indenture
dated as of February 21, 2002 (the “Original Indenture,”), as
amended and supplemented by (i) the First Supplemental Indenture thereto
dated as of February 21, 2002 (the “First Supplemental Indenture”),
(ii) the Second Supplemental Indenture thereto dated as of August 9,
2002 and effective as of April 4, 2002 (the “Second Supplemental Indenture”),
(iii) the Third Supplemental Indenture thereto dated and effective as of May 16,
2003 (the “Third Supplemental Indenture”) and (iv) the Fourth
Supplemental Indenture thereto dated as of May 27, 2003 (the “Fourth
Supplemental Indenture”) (the Original Indenture, as supplemented from time
to time, including without limitation pursuant to the First Supplemental
Indenture, the Second Supplemental Indenture, the Third Supplemental Indenture,
the Fourth Supplemental Indenture and this Fifth Supplemental Indenture, being
referred to herein as the “Indenture”), providing for the issuance from
time to time of one or more series of the Partnership’s Debt Securities, the
terms of which are to be determined as set forth in Section 2.03 of the
Original Indenture.


 


Section 9.01 of the
Original Indenture provides, among other things, that the Partnership, when
authorized by Board Resolutions, and the Trustee may from time to time and at
any time, without the consent of Holders, enter into an indenture or indentures
supplemental to the Original Indenture for, among other things, the purpose of (i) adding
guarantees with respect to any or all of the Debt Securities or (ii) making
any changes that would provide any additional rights or benefits to the Holders
of the Debt Securities or that do not, taken as a whole, adversely affect the
legal rights of any Holder under the Indenture.


 


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


 


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


 


Pursuant to Section 9.01
of the Original Indenture, the Trustee is authorized to execute and deliver
this Fifth Supplemental Indenture.


 


Now, Therefore, This
Fifth Supplemental Indenture Witnesseth:


 





















 


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


 


ARTICLE I


 


AMENDMENTS TO THE INDENTURE


 


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


 


“Affiliate” of any
specified Person means any other Person, directly or indirectly, controlling or
controlled by, or under direct or indirect common control with, such specified
Person.  For purposes of this definition,
“control,” as used with respect to any Person, shall mean the possession,
directly or indirectly, of the power to direct or cause the direction of the
management or policies of such Person, whether through the ownership of voting
securities, by agreement or otherwise. 
For purposes of this definition, the terms “controlling,” “controlled by”
and “under common control with” shall have correlative meanings.


 


“Affiliate Guarantees”
has the meaning specified in Section 12.01.


 


“Affiliate Guarantor”
means each of Valero L.P., a Delaware limited partnership, and its  100%-owned subsidiary Valero Logistics
Operations, L.P., a Delaware limited partnership, in each such case until a
successor Affiliate Guarantor shall have become such pursuant to the applicable
provisions of this Indenture, and thereafter “Affiliate Guarantor” shall mean
or include each Person who is then an Affiliate Guarantor hereunder.


 


SECTION 1.02 Unconditional
Affiliate Guarantee.  The Indenture
is hereby amended and supplemented by inserting the following new Article 12
immediately after Article 11 of the Indenture:


 


“ARTICLE 12


 


SECTION 12.01.           Unconditional Affiliate Guarantee.


 


For value received, each Affiliate Guarantor hereby, jointly and
severally, fully, irrevocably, unconditionally and absolutely guarantees to the
Holders and to the Trustee the due and punctual payment of the principal of,
and premium, if any, and interest on the Debt Securities and all other amounts
due and payable under this Indenture and the Debt Securities by the Partnership
(including, without limitation, all costs and expenses (including reasonable
legal fees and disbursements) incurred by the Trustee or the Holders in
connection with the enforcement of this Indenture and the Affiliate Guarantees)
(collectively for the purposes of this Article 12, the “Indenture
Obligations”), when and as such principal, premium, if any, and interest and
such other amounts shall become due and payable, whether at the Stated
Maturity, upon redemption or by declaration of acceleration or otherwise,
according to the terms of the Debt Securities and this Indenture.  The guarantees by the Affiliate Guarantors
set forth in this Article 12 are referred to herein as the “Affiliate
Guarantees.”  Without limiting the
generality of the foregoing, the Affiliate Guarantors’ liability shall extend
to all amounts that constitute part of the Indenture Obligations and would be
owed by the Partnership


 


2





















 


under this Indenture and the Debt Securities but for
the fact that they are unenforceable, reduced, limited, impaired, suspended or
not allowable due to the existence of a bankruptcy, reorganization or similar
proceeding involving the Partnership.


 


Failing payment when due of any amount guaranteed pursuant to the
Affiliate Guarantees, for whatever reason, each Affiliate Guarantor will be
obligated (to the fullest extent permitted by applicable law) to pay the same
immediately to the Trustee, without set-off or counterclaim or other reduction
whatsoever (whether for taxes, withholding or otherwise).  Each Affiliate Guarantee hereunder is
intended to be a general, unsecured, senior obligation of each Affiliate
Guarantor and will rank pari passu in right of payment with all indebtedness of
such Affiliate Guarantor that is not, by its terms, expressly subordinated in
right of payment to the Affiliate Guarantee of such Affiliate Guarantor.  Each Affiliate Guarantor hereby agrees that
to the fullest extent permitted by applicable law, its obligations hereunder
shall be full, irrevocable, unconditional and absolute, irrespective of the
validity, regularity or enforceability of the Debt Securities, the Affiliate
Guarantees or this Indenture, the absence of any action to enforce the same,
any waiver or consent by any Holder with respect to any provisions hereof or
thereof, any release of any other Affiliate Guarantor, the recovery of any
judgment against the Partnership, any action to enforce the same or any other
circumstance which might otherwise constitute a legal or equitable discharge or
defense of such Affiliate Guarantor. 
Each Affiliate Guarantor hereby agrees that in the event of a default in
payment of the principal of, or premium, if any, or interest on the Debt
Securities of any series or any other amounts payable under this Indenture and
the Debt Securities by the Partnership, whether at the Stated Maturity, upon
redemption or by declaration of acceleration or otherwise, legal proceedings
may be instituted by the Trustee on behalf of the Holders or, subject to Section 6.04
hereof, by the Holders, on the terms and conditions set forth in this
Indenture, directly against each Affiliate Guarantor to enforce its Affiliate
Guarantees without first proceeding against the Partnership.


 


To the fullest extent permitted by applicable law, the obligations of
each Affiliate Guarantor under this Article 12 shall be as aforesaid full,
irrevocable, unconditional and absolute and shall not be impaired, modified,
discharged, released or limited by any occurrence or condition whatsoever,
including, without limitation, (i) any compromise, settlement, release,
waiver, renewal, extension, indulgence or modification of, or any change in,
any of the obligations and liabilities of the Partnership or any Affiliate
Guarantor contained in any of the Debt Securities or this Indenture, (ii) any
impairment, modification, release or limitation of the liability of the
Partnership, any Affiliate Guarantor or any of their estates in bankruptcy, or
any remedy for the enforcement thereof, resulting from the operation of any
present or future provision of any applicable Bankruptcy Law, as amended, or other
statute or from the decision of any court, (iii) the assertion or exercise
by the Partnership, any Affiliate Guarantor or the Trustee of any rights or
remedies under any of the Debt Securities or this Indenture or their delay in
or failure to assert or exercise any such rights or remedies, (iv) the
assignment or the purported assignment of any property as security for any of
the Debt Securities, including all or any part of the rights of the Partnership
or any Affiliate Guarantor under this Indenture, (v) the extension of the
time for payment by the Partnership or any Affiliate Guarantor of any payments
or other sums or any part thereof owing or payable under any of the terms and
provisions of any of the Debt Securities or this Indenture or of the time for
performance by the Partnership or any Affiliate Guarantor of any other
obligations under or arising out of any such terms and provisions or the
extension or the renewal of


 


3





















 


any thereof, (vi) the modification or amendment
(whether material or otherwise) of any duty, agreement or obligation of the
Partnership or any Affiliate Guarantor set forth in this Indenture, (vii) the
voluntary or involuntary liquidation, dissolution, sale or other disposition of
all or substantially all of the assets, marshaling of assets and liabilities,
receivership, insolvency, bankruptcy, assignment for the benefit of creditors,
reorganization, arrangement, composition or readjustment of, or other similar
proceeding affecting, the Partnership, any Affiliate Guarantor or any of their
respective assets, or the disaffirmance of any of the Debt Securities, any of
the Affiliate Guarantees or this Indenture in any such proceeding, (viii) the
release or discharge of the Partnership or any Affiliate Guarantor from the
performance or observance of any agreement, covenant, term or condition
contained in any of such instruments by operation of law, (ix) the
unenforceability of any of the Debt Securities, the Affiliate Guarantees or
this Indenture, (x) any change in the name, business, capital structure,
corporate existence, or ownership of the Partnership or any Affiliate
Guarantor, or (xi) any other circumstance which might otherwise constitute a
defense available to, or a legal or equitable discharge of, a surety or any
Affiliate Guarantor.


 


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


 


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


 


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


 


No failure to exercise and no delay in exercising, on the part of the
Trustee or the Holders, any right, power, privilege or remedy under this Article 12
and the Affiliate


 


4





















 


Guarantees shall operate as a waiver thereof, nor
shall any single or partial exercise of any rights, power, privilege or remedy
preclude any other or further exercise thereof, or the exercise of any other
rights, powers, privileges or remedies. 
The rights and remedies herein provided for are cumulative and not
exclusive of any rights or remedies provided in law or equity.  Nothing contained in this Article 12
shall limit the right of the Trustee or the Holders to take any action to
accelerate the maturity of the Debt Securities pursuant to Article 6 or to
pursue any rights or remedies hereunder or under applicable law.”


 


ARTICLE II


 


MISCELLANEOUS


 


SECTION 2.01 Execution
as Supplemental Indenture.  By its
execution and delivery of this Fifth Supplemental Indenture, each of the
undersigned Affiliate Guarantors agrees to be bound by the provisions of the
Indenture, including those of Article 12 thereof.  This Fifth Supplemental Indenture is executed
and shall be construed as an indenture supplemental to the Indenture and, as
provided in the Indenture, this Fifth Supplemental Indenture forms a part
thereof.  Except as herein expressly
otherwise defined, the use of the terms and expressions herein is in accordance
with the definitions, uses and constructions contained in the Indenture.


 


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


 


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


 


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


 


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


 


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


 


(The
remainder of this page is intentionally blank.)


 


5





















 


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


 


	
   

  	
  Partnership:

  
	
   

  	
   

  
	
   

  	
  KANEB PIPE LINE
  OPERATING PARTNERSHIP, L.P.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  Kaneb Pipe Line Company LLC,

  
	
   

  	
   

  	
  Its General Partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
     /s/ Steven A. Blank

  	
   

  
	
   

  	
   

  	
  Name:  Steven
  A. Blank

  
	
   

  	
   

  	
  Title:  Senior
  Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Affiliate Guarantors:

  
	
   

  	
   

  	
   

  
	
   

  	
  VALERO L.P.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  Riverwalk Logistics, L.P.,

  
	
   

  	
   

  	
  Its General Partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  Valero GP, LLC,

  	
   

  
	
   

  	
   

  	
   

  	
  Its General Partner

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
     /s/ Curtis V. Anastasio

  	
   

  
	
   

  	
   

  	
  Name:  Curtis
  V. Anastasio

  	
   

  
	
   

  	
   

  	
  Title:  President

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  VALERO LOGISTICS OPERATIONS, L.P.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  Valero GP, Inc.,

  
	
   

  	
   

  	
  Its General Partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
     /s/ Curtis V. Anastasio

  	
   

  
	
   

  	
   

  	
  Name:  Curtis
  V. Anastasio

  
	
   

  	
   

  	
  Title: 
  President

  
							



 





















 


	
   

  	
  Trustee:

  
	
   

  	
   

  	
   

  
	
   

  	
  JPMORGAN CHASE BANK, NATIONAL ASSOCIATION,

  AS TRUSTEE

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
      /s/ Carol Logan

  	
   

  
	
   

  	
  Name:  Carol
  Logan

  
	
   

  	
  Title:  Vice
  President