AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JULY 7, 2005
REGISTRATION NO. 333-
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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-------------
POST-EFFECTIVE AMENDMENT NO. 1
TO
FORM S-4
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
-------------
VALERO L.P.
(Exact Name of Registrant as Specified in Its Charter)
DELAWARE 4610 74-2956831
(State or Other (Primary Standard (I.R.S. Employer
Jurisdiction of Industrial Identification
Incorporation or Classification Code Number)
Organization) Number)
ONE VALERO WAY
SAN ANTONIO, TEXAS 78249
(210) 345-2000
(Address, Including Zip Code, and Telephone Number, Including
Area Code, of Registrant's Principal Executive Offices)
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CURTIS V. ANASTASIO
PRESIDENT AND CHIEF EXECUTIVE OFFICER
VALERO GP, LLC
ONE VALERO WAY
SAN ANTONIO, TEXAS 78249
(210) 345-2000
(Name, Address, Including Zip Code, and Telephone Number,
Including Area Code, of Agent for Service)
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COPIES TO:
JOHN A. WATSON, ESQ. GISLAR DONNENBERG, ESQ. LAWRENCE S. MAKOW, ESQ.
FULBRIGHT & JAWORSKI L.L.P. ANDREWS KURTH LLP WACHTELL, LIPTON,
1301 MCKINNEY, SUITE 5100 600 TRAVIS, SUITE 4200 ROSEN & KATZ
HOUSTON, TEXAS 77010 HOUSTON, TEXAS 77002 51 WEST 52ND STREET
(713) 651-5151 (713) 220-4200 NEW YORK, NEW YORK 10019
(212) 403-1000
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after the effectiveness of this Registration Statement and the
satisfaction or waiver of all other conditions to the merger of Kaneb Pipe Line
Partners, L.P., or Kaneb Partners, with a subsidiary of the Registrant pursuant
to the Agreement and Plan of Merger by and among the Registrant, Kaneb Partners
and the other parties thereto described in the enclosed document.
If the securities being registered on this form are to be offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. |_|
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. |_|
If this form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. |X| 333-120726
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THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT THAT SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT, OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE
ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(A), MAY DETERMINE.
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EXPLANATORY NOTE
This Post-Effective Amendment No. 1 to Form S-4 Registration Statement No.
333-120726 is filed solely to file Exhibits 8.1a, 8.2a and 8.3a as additional
exhibits to the Registration Statement. In accordance with Section 462(d) of
the Securities Act of 1933, as amended, this Post-Effective Amendment shall
become effective immediately upon filing with the Securities and Exchange
Commission.
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
2.1 Agreement and Plan of Merger, dated as of October 31, 2004, by and among
Valero L.P., Riverwalk Logistics, L.P., Valero GP, LLC, Valero L.P. Sub
A LLC and Kaneb Services LLC (attached as Appendix A to the Proxy
Statement/Prospectus included in this Registration Statement).
2.2 Agreement and Plan of Merger, dated as of October 31, 2004, by and among
Valero L.P., Riverwalk Logistics, L.P., Valero GP, LLC, Valero L.P. Sub
B LLC, Kaneb Pipe Line Partners, L.P. and Kaneb Pipe Line Company LLC
(attached as Appendix B to the Proxy Statement/Prospectus included in
this Registration Statement).
5.1 Opinion of Bradley C. Barron, Esq. as to the legality of the securities.*
8.1 Opinion of Andrews Kurth LLP as to certain tax matters.*
8.1a Opinion of Andrews Kurth LLP as to certain tax matters.
8.2 Opinion of Wachtell, Lipton, Rosen & Katz as to certain tax matters.*
8.2a Opinion of Wachtell, Lipton, Rosen & Katz as to certain tax matters.
8.3 Opinion of Fulbright & Jaworski L.L.P. as to certain tax matters.*
8.3a Opinion of Fulbright & Jaworski L.L.P. as to certain tax matters.
23.1 Consent of Ernst & Young LLP.*
23.2 Consent of KPMG LLP for Kaneb Services.*
23.3 Consent of KPMG LLP for Kaneb Partners.*
23.4 Consent of Bradley C. Barron, Esq. (included in opinion filed as Exhibit
5.1).*
23.5 Consent of Andrews Kurth LLP (included in opinion filed as Exhibit 8.1).*
23.5a Consent of Andrews Kurth LLP (included in opinion filed as Exhibit 8.1a).
23.6 Consent of Wachtell, Lipton, Rosen & Katz (included in opinion filed as
Exhibit 8.2).*
23.6a Consent of Wachtell, Lipton, Rosen & Katz (included in opinion filed as
Exhibit 8.2a).
23.7 Consent of Fulbright & Jaworski (included in opinion filed as Exhibit
8.3).*
23.7a Consent of Fulbright & Jaworski (included in opinion filed as Exhibit
8.3a).
24.1 Powers of Attorney (included on signature page hereto).*
99.1 Form of Proxy for Holders of Valero L.P. common units.*
99.2 Form of Proxy for Holders of Kaneb Partners units.*
99.3 Form of Proxy for Holders of Kaneb Services common shares.*
99.4 Consent of Credit Suisse First Boston LLC.*
99.5 Consent of Raymond James & Associates, Inc.*
99.6 Consent of Houlihan Lokey Howard & Zukin Financial Advisors, Inc.*
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* Previously filed.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
Valero L.P. has duly caused this Amendment No. 1 to Registration Statement to be
signed on its behalf by the undersigned, thereunto duly authorized, in San
Antonio, State of Texas, on the 6th day of July, 2005.
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 and Chief
Executive Officer
POWER OF ATTORNEY
Each person whose signature appears below hereby appoints Curtis V.
Anastasio, Steven A. Blank, Clayton E. Killinger and Bradley C. Barron, and each
of them, any of whom may act without the joinder of the others, as his true and
lawful attorney-in-fact and agents, with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign any and all amendments (including post-effective amendments)
to this Registration Statement and any Registration Statement (including any
amendment thereto) for this offering that is to be effective upon filing
pursuant to Rule 462(b) under the Securities Act of 1933, as amended, and to
file the same, with all exhibits thereto, and all other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents full power and authority to do and perform each and
every act and thing requisite and necessary to be done, as fully to all intents
and purposes as he might or would do in person, hereby ratifying and confirming
all that said attorneys-in-fact and agents or any of them or their or his
substitute and substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Amendment No. 1 to Registration Statement has been signed below by the
following persons in the capacities and on the dates indicated below.
SIGNATURE TITLE
- ------------------------------ -------------------------------------------------
*
- ------------------------------ -------------------------------------------------
William E. Greehey Chairman of the Board and Director
*
- ------------------------------ -------------------------------------------------
Curtis V. Anastasio President, Chief Executive Officer
and Director
(Principal Executive Officer)
*
- ------------------------------ -------------------------------------------------
Steven A. Blank Senior Vice President and Chief
Financial Officer
(Principal Financial Officer)
*
- ------------------------------ -------------------------------------------------
Clayton E. Killinger Vice President and Controller
(Principal Accounting Officer)
*
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Dan J. Hill Director
*
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William R. Klesse Director
*
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Gregory C. King Director
*
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H. Frederick Christie Director
*
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Rodman D. Patton Director
*
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Robert A. Profusek Director
Each person above holds his respective position at both Valero GP, LLC (the
general partner of Riverwalk Logistics, L.P., the general partner of Valero
L.P.) and Valero GP, Inc. (the general partner of Valero Logistics Operations,
L.P.).
*By:
/s/ Bradley C. Barron
---------------------
Bradley C. Barron
ATTORNEY-IN-FACT
EXHIBIT INDEX
2.1 Agreement and Plan of Merger, dated as of October 31, 2004, by and among
Valero L.P., Riverwalk Logistics, L.P., Valero GP, LLC, Valero L.P. Sub
A LLC and Kaneb Services LLC (attached as Appendix A to the Proxy
Statement/Prospectus included in this Registration Statement).
2.2 Agreement and Plan of Merger, dated as of October 31, 2004, by and among
Valero L.P., Riverwalk Logistics, L.P., Valero GP, LLC, Valero L.P. Sub
B LLC, Kaneb Pipe Line Partners, L.P. and Kaneb Pipe Line Company LLC
(attached as Appendix B to the Proxy Statement/Prospectus included in
this Registration Statement).
5.1 Opinion of Bradley C. Barron, Esq. as to the legality of the securities.*
8.1 Opinion of Andrews Kurth LLP as to certain tax matters.*
8.1a Opinion of Andrews Kurth LLP as to certain tax matters.
8.2 Opinion of Wachtell, Lipton, Rosen & Katz as to certain tax matters.*
8.2a Opinion of Wachtell, Lipton, Rosen & Katz as to certain tax matters.
8.3 Opinion of Fulbright & Jaworski L.L.P. as to certain tax matters.*
8.3a Opinion of Fulbright & Jaworski L.L.P. as to certain tax matters.
23.1 Consent of Ernst & Young LLP.*
23.2 Consent of KPMG LLP for Kaneb Services.*
23.3 Consent of KPMG LLP for Kaneb Partners.*
23.4 Consent of Bradley C. Barron, Esq. (included in opinion filed as Exhibit
5.1).*
23.5 Consent of Andrews Kurth LLP (included in opinion filed as Exhibit 8.1).*
23.5a Consent of Andrews Kurth LLP (included in opinion filed as Exhibit 8.1a).
23.6 Consent of Wachtell, Lipton, Rosen & Katz (included in opinion filed as
Exhibit 8.2).*
23.6a Consent of Wachtell, Lipton, Rosen & Katz (included in opinion filed as
Exhibit 8.2a).
23.7 Consent of Fulbright & Jaworski (included in opinion filed as Exhibit
8.3).*
23.7a Consent of Fulbright & Jaworski (included in opinion filed as Exhibit
8.3a).
24.1 Powers of Attorney (included on signature page hereto).*
99.1 Form of Proxy for Holders of Valero L.P. common units.*
99.2 Form of Proxy for Holders of Kaneb Partners units.*
99.3 Form of Proxy for Holders of Kaneb Services common shares.*
99.4 Consent of Credit Suisse First Boston LLC.*
99.5 Consent of Raymond James & Associates, Inc.*
99.6 Consent of Houlihan Lokey Howard & Zukin Financial Advisors, Inc.*
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* Previously filed.
EXHIBIT 8.1A
[ANDREWS KURTH LLP LOGO]
600 Travis, Suite 4200
Houston, Texas 77002
713.220.4200 Phone
713.220.4285 Fax
andrewskurth.com
July 1, 2005
Valero L.P.
One Valero Way
San Antonio, Texas 78249
TAX OPINION
Ladies and Gentlemen:
You have requested our opinion as to certain federal income tax matters in
connection with (i) the merger (the "KSL Merger") of VLI Sub A LLC, a Delaware
limited liability company ("VLI Sub A"), with and into Kaneb Services LLC, a
Delaware limited liability company ("KSL"), pursuant to the Agreement and Plan
of Merger (the "KSL Merger Agreement") dated as of October 31, 2004, by and
among Valero L.P., a Delaware limited partnership ("VLI"), Riverwalk Logistics,
L.P., a Delaware limited partnership ("VLI GP"), Valero GP, LLC, a Delaware
limited liability company ("Parent GP"), VLI Sub A and KSL, and (ii) the merger
(the "KPP Merger" and together with the KSL Merger, the "Mergers") of VLI Sub B
LLC, a Delaware limited liability company ("VLI Sub B"), with and into Kaneb
Pipe Line Partners, L.P., a Delaware limited partnership ("KPP"), pursuant to
the Agreement and Plan of Merger (the "KPP Merger Agreement" and together with
the KSL Merger Agreement, the "Merger Agreements") dated as of October 31, 2004,
by and among VLI, VLI GP, Parent GP, VLI Sub B, KPP, and Kaneb Pipe Line Company
LLC, a Delaware limited liability company. All capitalized terms which are not
defined herein shall have the meanings assigned to them in the Merger
Agreements.
In rendering our opinion, we have examined the registration statement on
Form S-4, as amended, filed by VLI with the Securities and Exchange Commission
on January 25, 2005, Registration No. 333-120726 (the "Registration Statement"),
including the joint proxy statement/prospectus included therein and the
documents incorporated by reference therein, and we have made such
investigations of law as we have deemed appropriate as a basis for the opinions
expressed below. As to any facts material to the opinion expressed herein which
were not independently established or verified, we have relied upon written
statements and representations of officers and other representatives of VLI, KSL
and KPP (the "Representations"). We have also assumed that the Mergers will
occur in the manner contemplated by the Registration Statement and in accordance
with the Merger Agreements with none of the terms or conditions of the Merger
Agreements being amended, waived or modified,
Austin Dallas Houston London Los Angeles New York
The Woodlands Washington, DC
Valero L.P.
July 1, 2005
Page 2
and there are no arrangements other than those set forth in the Merger
Agreements between the parties thereto.
In rendering our opinion, we have also assumed the due authorization,
execution and delivery by each party thereto of all documents, the genuineness
of all signatures, the authority of all persons signing such documents on behalf
of each party thereto, the legal capacity of all natural persons, the
authenticity of all documents submitted to us as originals and the conformity to
the original document of any document submitted to us as a certified, conformed
or photostatic copy. We have assumed that all representations made "to the best
knowledge of" any person will be true, correct and complete as if made without
that qualification.
Subject to the limitations and qualifications set forth herein, we are of
the opinion, based on existing provisions of the Internal Revenue Code of 1986,
as amended (the "Code"), existing Treasury regulations, existing court
decisions, and existing public rulings and other administrative interpretations,
and based on our review of such documents as we have deemed necessary, the
Representations and all representations and assumptions contained in the Merger
Agreements or Registration Statement, all assumed to be accurate as of the
Effective Times, that:
(i) none of VLI, VLI Sub A, VLI Sub B, VLI GP, or Parent GP will recognize
any income or gain as a result of the KSL Merger or the KPP Merger (other than
any gain resulting from any decrease in partnership liabilities pursuant to
section 752 of the Code),
(ii) no gain or loss will be recognized by holders of VLI Common Units as
a result of the KSL Merger or the KPP Merger (other than any gain resulting from
any decrease in partnership liabilities pursuant to section 752 of the Code),
and
(iii) 90% of the combined gross income of each of VLI, KSL and KPP for (x)
the calendar year ended December 31, 2004 and (y) the calendar quarter ended
March 31, 2005 are from sources treated as "qualifying income" within the
meaning of section 7704(d) of the Code.
Our opinion is based, in part, upon relevant legal authority in effect as
of the date hereof. We provide no assurance that the legal authority upon which
this opinion is based will not be amended, revoked or modified (with or without
retroactive effect) in a manner which would affect or change our conclusions.
Furthermore, should any of the representations or assumptions set forth or
referred to above prove to be inaccurate, as of the Effective Times, our opinion
may change.
Our opinion is limited to the federal income tax matters addressed herein,
and no other opinions are rendered or can be inferred with respect to any other
matter not specifically set forth in the foregoing opinion. Specifically, no
opinions are expressed with respect to the tax consequences of the Mergers or
the ownership of VLI Common Units under any foreign, state, or local tax law.
Our opinion is rendered as of the date hereof and we assume no obligation to
update or supplement it to reflect any change of fact, circumstance, or law
after the date hereof.
Valero L.P.
July 1, 2005
Page 3
In addition, our opinion is based on the assumption that the matter will
be properly presented to the applicable court. Furthermore, our opinion is not
binding on the Internal Revenue Service or a court. Finally, we must note that
our opinion represents merely our best legal judgment on the matters presented
and that others may disagree with our conclusions. Thus, there can be no
assurance that the Internal Revenue Service will not take contrary positions or
that a court would agree with our opinion if litigated.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to our firm in the prospectus
forming a part of the Registration Statement. In giving this consent, however,
we do not hereby admit that we are within the category of persons whose consent
is required under section 7 of the Securities Act of 1933, as amended, or the
rules and regulations of the Securities and Exchange Commission issued
thereunder.
Very truly yours,
/s/ Andrews Kurth LLP
TWF/TRP/RJM
EXHIBIT 8.2A
[WACHTELL, LIPTON, ROSEN & KATZ LETTERHEAD]
July 1, 2005
Valero L.P.
One Valero Way
San Antonio, Texas 78249
Ladies and Gentlemen:
We have acted as special counsel to Valero L.P., a Delaware limited partnership
("VLI"), in connection with (i) the proposed merger (the "KSL MERGER") of VLI
Sub A LLC, a Delaware limited liability company and a wholly-owned subsidiary of
VLI ("VLI SUB A"), with and into Kaneb Services LLC, a Delaware limited
liability company ("KSL"), pursuant to the Agreement and Plan of Merger, dated
as of October 31, 2004 (the "KSL MERGER AGREEMENT"), by and among VLI, Riverwalk
Logistics, L.P., a Delaware limited partnership and the general partner of VLI
("VLI GP"), Valero GP, LLC, a Delaware limited liability company and the general
partner of VLI GP ("PARENT GP"), VLI Sub A, and KSL and (ii) the proposed merger
(the "KPP MERGER", and together with the KSL Merger, the "MERGERS") of VLI Sub B
LLC, a Delaware limited liability company and a wholly-owned subsidiary of VLI
("VLI SUB B", and collectively with VLI, VLI Sub A, VLI GP, and Parent GP, the
"VLI ENTITIES"), with and into Kaneb Pipe Line Partners, L.P., a Delaware
limited partnership ("KPP"), pursuant to the Agreement and Plan of Merger, dated
as of October 31, 2004 (the "KPP MERGER AGREEMENT", and together with the KSL
Merger Agreement, the "AGREEMENTS"), by and among VLI, VLI GP, Parent GP, VLI
Sub B, KPP, and Kaneb Pipe Line Company LLC, a Delaware limited liability
company that is the general partner of KPP ("KPP GP", and collectively, with KSL
and KPP, the "KANEB Entities"). At your request, and pursuant to Section 7.2(c)
of the KSL Merger Agreement and Section 7.2(c) of the KPP Merger Agreement, we
are rendering our opinion concerning certain federal income tax consequences of
the KSL Merger and the KPP Merger. Any capitalized term used and not defined
herein has the meaning given to it in the KSL Merger Agreement.
Valero L.P.
Page 2
For purposes of the opinion set forth below, we have relied, with the consent of
the VLI Entities and the consent of the Kaneb Entities, upon the accuracy and
completeness of the statements and representations (which statements and
representations we have neither investigated nor verified) contained,
respectively, in the certificates of the officers of VLI, KSL and KPP dated the
date hereof, and have assumed that such statements and representations will be
accurate and complete as of the Effective Times (as if made as of such time) and
that all such statements and representations made to the knowledge of any person
or entity or with similar qualification are and will be true and correct as if
made without such qualification. We have also relied upon the accuracy of the
Registration Statement on Form S-4 filed with the Securities and Exchange
Commission in connection with the Mergers and the joint proxy statement/
prospectus (the "PROXY STATEMENT/PROSPECTUS") contained therein, each as
amended or supplemented through the date hereof.
We have also assumed that (i) the transactions contemplated by the Agreements
will be consummated in accordance therewith and as described in the Proxy
Statement/Prospectus (and no transaction or condition described therein and
affecting this opinion will be waived by any party), (ii) the Mergers will
qualify as statutory mergers under the applicable laws of the State of Delaware
and (iii) the Mergers will be reported by VLI, KSL and KPP on their respective
federal income tax returns in a manner consistent with the opinion set forth
below.
Based upon and subject to the foregoing, it is our opinion, under currently
applicable United States federal income tax law, that (i) no VLI Entity will
recognize any income or gain as a result of the KPP Merger or the KSL Merger
(other than any gain resulting from any decrease in partnership liabilities
pursuant to section 752 of the Code), (ii) no gain or loss will be recognized by
holders of VLI Common Units as a result of the KPP Merger or the KSL Merger
(other than any gain resulting from any decrease in partnership liabilities
pursuant to section 752 of the Code), and (iii) 90% of the combined gross income
of each of VLI, KSL and KPP for (x) the calendar year ending December 31, 2004
and (y) the calendar quarter ending March 31, 2005 are from sources treated as
"qualifying income" within the meaning of section 7704(d) of the Code.
We hereby consent to the filing of this opinion with the Securities and Exchange
Commission as an exhibit to the Registration Statement, and to the references
therein to us. In giving such consent, we do not thereby admit that we are in
the category of persons whose consent is required under Section 7 of the
Securities Act of 1933, as amended.
This opinion relates solely to certain United States federal income tax
consequences of the Mergers and no opinion is expressed as to the tax
consequences under any foreign, state or local tax law or under any federal tax
laws other than those pertaining to the income tax. We are furnishing this
opinion to you solely in connection with the Mergers, and this opinion is not to
be relied upon by any other person or for any other purpose.
Very truly yours,
/s/ Wachtell, Lipton, Rosen & Katz
EXHIBIT 8.3A
FULBRIGHT & JAWORSKI L.L.P.
A Registered Limited Liability Partnership
Fulbright Tower
1301 McKinney, Suite 5100
Houston, Texas 77010-3095
www.fulbright.com
TELEPHONE:(713) 651-5151
FACSIMILE:(713) 651-5246
July 1, 2005
Kaneb Pipe Line Partners, L.P.
2435 N. Central Expressway, Suite 700
Richardson, Texas 75080
Ladies and Gentlemen:
In connection with the proposed merger (the "Merger") contemplated by the
Agreement and Plan of Merger, dated as of October 31, 2004 (the "Merger
Agreement"), by and among Valero L.P. ("VLI"), Riverwalk Logistic, L.P., Valero
GP LLC ("Valero GP"), VLI Sub B LLC, Kaneb Partners Pipe Line Partners, L.P.
("KPP") and Kaneb Pipe Line Company LLC ("Kaneb GP"), you have requested our
opinion regarding the U.S. federal income tax consequences of the Merger to KPP
and the KPP Unitholders that are described below. Descriptions of the parties
and of the Merger and related transactions are set forth in the Merger Agreement
and the joint proxy statement/prospectus forming a part of the registration
statement on Form S-4 (Reg. No. 333-120726, as amended, the "Registration
Statement") filed on January 25, 2005, with the Securities and Exchange
Commission (the "SEC") by VLI pursuant to the Securities Act of 1933, as amended
(the "Act"). Unless otherwise defined herein, capitalized terms used in this
opinion have the meanings assigned to them in the Merger Agreement.
In rendering our opinion set forth below, we have assumed that the transactions
related to the Merger or contemplated by the Merger Agreement will be
consummated as described in the Registration Statement and solely in accordance
with the Merger Agreement, with none of the terms or conditions of the Merger
Agreement being amended, waived or modified. Additionally, we have examined and
relied upon the accuracy and completeness, both initially and continuing as of
the effective time of the Merger (the "Effective Time"), of (i) the statements,
facts, information, evaluations, covenants, representations and warranties
contained in the Merger Agreement, the Registration Statement, including the
joint proxy statement/prospectus that forms a part of the Registration
Statement, and such other documents as we have deemed necessary or appropriate
as a basis for the opinion set forth below, and (ii) the statements, facts,
information, evaluations, covenants, representations and warranties made or
provided by, or on behalf of, whether written or oral, KPP and VLI, including
factual representations set forth in letters dated the date hereof by Valero GP
and Kaneb GP (the "Representation Letters"). We have also assumed that such
statements, facts, information, evaluations, covenants, representations and
warranties are true, and will continue to be true as of the Effective Time,
without regard to any qualification as to knowledge or belief. Any variation or
difference in any of the aforementioned statements, facts, information,
evaluations, covenants, representations, warranties or assumptions or breach or
failure of any of the aforementioned covenants could adversely affect our
opinion.
In rendering our opinion set forth below, we have considered applicable
provisions of the Internal Revenue Code of 1986, as amended (the "Code"),
Treasury regulations promulgated thereunder (the "Regulations"), pertinent
judicial authorities, rulings and other administrative interpretations of the
Internal Revenue Service ("IRS") and such other authorities as we have
considered relevant, in each case, in effect on the date hereof. It should be
noted that such laws, Code, Regulations, judicial authorities,
Kaneb Pipe Line Partners, L.P.
July 1, 2005
Page 2
rulings and other administrative interpretations and such other authorities are
subject to change at any time and possibly with retroactive effect. A change in
any of the authorities upon which our opinion is based could adversely affect
our opinion set forth below.
Based upon the foregoing and subject to the limitations, qualifications and
assumptions stated herein, we are of the opinion that, except with respect to
cash received in lieu of a fractional VLI Common Unit:
(i) KPP will not recognize any income or gain as a result
of the Merger (other than any gain resulting from any
decrease in partnership liabilities pursuant to section
752 of the Code), and
(ii) no gain or loss will be recognized by holders of KPP
Units as a result of the Merger (other than any gain
resulting from any decrease in partnership liabilities
pursuant to section 752 of the Code); PROVIDED, that
such opinion shall not extend to any KPP Unitholder who
acquired KPP Units from KPP in exchange for property
other than cash.
Our opinion set forth above is an expression of professional judgment, is not a
guarantee of a result and is not binding upon the IRS or any court. Accordingly,
no assurance can be given that our opinion set forth above will be sustained by
a court if challenged by the IRS.
Except as set forth above, we express no opinion to any party as to the federal,
state, local or foreign tax consequences of the Merger or of any transactions
related thereto or contemplated by the Merger Agreement or describe in the
Registration Statement. We disclaim any undertaking to advise you of any
subsequent changes of the facts stated or assumed herein or any subsequent
changes in applicable law. This opinion may not be relied upon by anyone else
without our prior written consent.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to our firm in the proxy
statement/prospectus forming a part of the Registration Statement. In giving
this consent, however, we do not hereby admit that we are within the category of
persons whose consent is required under section 7 of the Act or the rules and
regulations of the SEC issued thereunder.
Very truly yours,
Fulbright & Jaworski L.L.P.