Exhibit 10.03

NON-COMPETE AGREEMENT

THIS NON-COMPETE AGREEMENT (this “Agreement”) is entered into this 19th day of
July, 2006, and effective as of the Effective Time (as defined below), by and
among Valero GP Holdings, LLC, a Delaware limited liability company
(“Holdings”), Valero L.P., a Delaware limited partnership (the “MLP”), Riverwalk
Logistics, L.P., a Delaware limited partnership and general partner of the MLP
(“Riverwalk”), and Valero GP, LLC, a Delaware limited liability company and
general partner of Riverwalk (“Valero GP” and together with the MLP, Riverwalk,
and their respective Subsidiaries, the “Partnership Parties”).

R E C I T A L

The parties hereto desire, by their execution of this Agreement, to evidence the
terms and conditions pursuant to which business opportunities available to the
Partnership Parties and Holdings and their respective affiliates (other than the
Partnership Parties) will be addressed.

WHEREAS, Valero Energy Corporation (“Valero Energy”), Valero GP, Riverwalk, the
MLP and Valero Logistics Operations, L.P. are parties to the Amended and
Restated Omnibus Agreement, dated as of March 31, 2006 (the “Omnibus
Agreement”), pursuant to which Holdings, as a Controlled Valero Affiliate (as
defined in the Omnibus Agreement), is prohibited from engaging in a Restricted
Business (as defined in the Omnibus Agreement);

WHEREAS, Valero Energy has stated its intent to reduce its ownership of
Holdings, which would result in Holdings no longer being a Controlled Valero
Affiliate and no longer being bound by the terms of the Omnibus Agreement;

WHEREAS, it is the intent of the parties hereto to be bound by the provisions of
this Agreement effective immediately upon Holdings no longer being bound by the
provisions of the Omnibus Agreement.

In consideration of the premises and the covenants, conditions, and agreements
contained herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:

ARTICLE I:
Definitions

1.1          Definitions.

(A)           CAPITALIZED TERMS USED HEREIN BUT NOT DEFINED HEREIN SHALL HAVE
THE MEANINGS GIVEN THEM IN THE MLP AGREEMENT.

(B)           AS USED IN THIS AGREEMENT, THE FOLLOWING TERMS SHALL HAVE THE
RESPECTIVE MEANINGS SET FORTH BELOW:

 

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“Affiliate” shall have the meaning attributed to such term in the MLP Agreement.

“Agreement” shall mean this Non-Compete Agreement, as it may be amended,
modified, or supplemented from time to time.

“Conflicts Committee” means a committee of the Board of Directors of Holdings or
Valero GP, as applicable, as defined in the Holdings Agreement or the MLP
Agreement, respectively.

“Effective Time” means the time at which Holdings is no longer a Controlled
Valero Affiliate under the terms of the Omnibus Agreement.

 “Holdings” means Valero GP Holdings, LLC, a Delaware limited liability company,
and any successors thereto.

“Holdings Agreement” means the Second Amended and Restated Limited Liability
Company Agreement of Holdings, and any amendments thereto and restatements
thereof.

 “Logistics Business” means any business, asset or group of assets related the
transportation, storage or terminalling of crude oil, feedstocks or refined
petroleum products (including petrochemicals), in the United States or
internationally that is not a Public Equity Security.

“Logistics Business Notice” shall have the meaning set forth in Section 2.1(b).

 “MLP” means Valero L.P., a Delaware limited partnership, and any successors
thereto.

“MLP Agreement” means the Third Amended and Restated Agreement of Limited
Partnership of the MLP, and any amendments thereto and restatements thereof.

 “Partnership Parties” means Valero GP, the MLP, Riverwalk and their respective
Subsidiaries.

“Person” means an individual or a corporation, limited liability company,
partnership, joint venture, trust, unincorporated organization, association,
government agency or political subdivision thereof or other entity.

 “Public Equity Securities” shall mean (i) general partner interests (or
securities which have characteristics similar to general partner interests) and
incentive distribution rights or similar rights in publicly traded partnerships
or interests in Persons that own or control such general partner or similar
interests (collectively, “GP Interests”) and securities convertible,
exercisable, exchangeable or otherwise representing ownership or control of such
GP Interests and (ii) incentive distribution rights and limited partner
interests (or securities which have characteristics similar to incentive
distribution rights or limited partner interests) in publicly traded
partnerships or interests in Persons that own or control such limited partner or
similar

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interests (collectively, “non-GP Interests”); provided that such non-GP
Interests are owned by the owners of the GP Interests being acquired or their
respective Affiliates.

“Public Equity Securities Notice” shall have the meaning set forth in Section
2.1(b).

“Riverwalk” means Riverwalk Logistics, L.P., a Delaware limited partnership, and
any successors thereto.

“Valero GP” means Valero GP, LLC, a Delaware limited liability company, and any
successors thereto.

ARTICLE II:
Business Opportunities

2.1          Public Equity Securities Opportunity.  (a)     During the term of
this Agreement, the Partnership Parties are prohibited from acquiring Public
Equity Securities unless and until the opportunity to acquire such Public Equity
Securities has been offered to Holdings and Holdings has declined or abandoned
such opportunity as provided in Section 2.1(b).

(B)           IF ANY OF THE PARTNERSHIP PARTIES BECOMES AWARE OF AN OPPORTUNITY
TO ACQUIRE PUBLIC EQUITY SECURITIES FROM A THIRD PARTY THAT IT WISHES TO PURSUE,
THEN AS SOON AS PRACTICABLE, VALERO GP (ON BEHALF OF THE PARTNERSHIP PARTIES)
SHALL NOTIFY HOLDINGS OF SUCH OPPORTUNITY (THE “PUBLIC EQUITY SECURITIES
NOTICE”) AND DELIVER TO HOLDINGS ALL INFORMATION PREPARED BY OR ON BEHALF OF THE
PARTNERSHIP PARTIES RELATING TO THE PUBLIC EQUITY SECURITIES.  AS SOON AS
PRACTICABLE, BUT IN ANY EVENT WITHIN 30 DAYS AFTER RECEIPT OF SUCH NOTIFICATION
AND INFORMATION, HOLDINGS SHALL NOTIFY THE PARTNERSHIP PARTIES THAT EITHER (I)
HOLDINGS HAS ELECTED, WITH THE APPROVAL OF A MAJORITY OF THE MEMBERS OF THE
CONFLICTS COMMITTEE, NOT TO CAUSE HOLDINGS TO PURSUE THE OPPORTUNITY TO ACQUIRE
SUCH PUBLIC EQUITY SECURITIES, OR (II) HOLDINGS HAS ELECTED TO PURSUE THE
OPPORTUNITY TO ACQUIRE SUCH PUBLIC EQUITY SECURITIES.  IF AT ANY TIME HOLDINGS
ABANDONS SUCH OPPORTUNITY, AS EVIDENCED (X) IN WRITING BY HOLDINGS, OR (Y) BY
HOLDINGS’ FAILURE TO CONSUMMATE THE ACQUISITION OF THE PUBLIC EQUITY SECURITIES
WITHIN ONE YEAR OF THE PUBLIC EQUITY SECURITIES NOTICE, THE PARTNERSHIP PARTIES
SHALL HAVE THE UNRESTRICTED RIGHT TO PURSUE SUCH OPPORTUNITY.

2.2          Logistics Business Opportunity.  (a)  During the term of this
Agreement, Holdings is prohibited from acquiring a Logistics Business unless and
until the opportunity to acquire such Logistics Business has been offered to the
Partnership Parties and the Partnership Parties have declined or abandoned such
opportunity as provided in Section 2.2(b).

(B)           IF HOLDINGS BECOMES AWARE OF AN OPPORTUNITY TO ACQUIRE A LOGISTICS
BUSINESS FROM A THIRD PARTY THAT IT WISHES TO PURSUE, THEN AS SOON AS
PRACTICABLE, HOLDINGS SHALL NOTIFY VALERO GP (ON BEHALF OF THE PARTNERSHIP
PARTIES) OF SUCH OPPORTUNITY (THE “LOGISTICS BUSINESS NOTICE”) AND DELIVER TO
VALERO GP ALL INFORMATION PREPARED BY OR ON BEHALF OF HOLDINGS RELATING TO THE
LOGISTICS BUSINESS.  AS SOON AS PRACTICABLE, BUT IN ANY EVENT WITHIN 30 DAYS
AFTER RECEIPT OF SUCH NOTIFICATION AND INFORMATION, VALERO GP (ON BEHALF OF THE
PARTNERSHIP PARTIES) SHALL NOTIFY HOLDINGS THAT EITHER (I) VALERO GP HAS
ELECTED, WITH THE APPROVAL OF A MAJORITY OF THE MEMBERS OF THE CONFLICTS
COMMITTEE, NOT TO CAUSE THE PARTNERSHIP PARTIES TO PURSUE THE OPPORTUNITY TO
ACQUIRE SUCH LOGISTICS BUSINESS, OR (II) VALERO GP (ON BEHALF OF THE PARTNERSHIP
PARTIES) HAS ELECTED TO

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pursue the opportunity to acquire such Logistics Business.  If at any time the
Partnership Parties abandon such opportunity, as evidenced (x) in writing by
Valero GP (on behalf of the Partnership Parties), or (y) by the Partnership
Parties’ failure to consummate the acquisition of the Logistics Business within
one year of the Logistics Business Notice, Holdings shall have the unrestricted
right to pursue such opportunity.

2.3          No Obligation to Present Business Opportunities. Other than as set
forth Section 2.1 with respect to Public Equity Securities, none of the
Partnership Parties shall have any obligation to present any business
opportunity (including, but not limited to, Logistics Businesses) to Holdings
and its Affiliates.  Other than as set forth in Section 2.2 with respect to
Logistics Businesses, Holdings shall have no obligation to present any business
opportunity (including, but not limited to, Public Equity Securities) to the
Partnership Parties and their Affiliates.

2.4          TERM

  This Agreement shall remain in effect for as long as Holdings or any of its
Affiliates owns directly or indirectly 20% or more of Valero GP or Riverwalk or
their successors.

ARTICLE III:
Miscellaneous

3.1          Choice of 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 to the construction or interpretation of this Agreement to the
laws of another state.

3.2          Notice.  All notices or requests or consents provided for or
permitted to be given pursuant to this Agreement must be in writing and must be
given by depositing same in the United States mail, addressed to the Person to
be notified, postpaid, and registered or certified with return receipt requested
or by delivering such notice in person or by telecopier or telegram to such
party.  Notice given by personal delivery or mail shall be effective upon actual
receipt.  Notice given by telegram or telecopier shall be effective upon actual
receipt if received during the recipient’s normal business hours, or at the
beginning of the recipient’s next business day after receipt if not received
during the recipient’s normal business hours.  All notices to be sent to a party
pursuant to this Agreement shall be sent to or made at the address set forth
below such party’s signature to this Agreement, or at such other address as such
party may stipulate to the other parties in the manner provided in this Section
3.2.

3.3          Entire Agreement; Supersedure.  This Agreement constitutes the
entire agreement of the parties relating to the matters contained herein,
superseding all prior contracts or agreements, whether oral or written, relating
to the matters contained herein.

3.4          Effect of Waiver or Consent.  No waiver or consent, express or
implied, by any party to or of any breach or default by any Person in the
performance by such Person of its obligations hereunder shall be deemed or
construed to be a consent or waiver to or of any other breach or default in the
performance by such Person of the same or any other obligations of such Person
hereunder.  Failure on the part of a party to complain of any act of any Person
or to

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declare any Person in default, irrespective of how long such failure continues,
shall not constitute a waiver by such party of its rights hereunder until the
applicable statute of limitations period has run.

3.5          Amendment or Modification.  This Agreement may be amended or
modified from time to time only by the written agreement of all the parties
hereto.  Each such instrument shall be reduced to writing and shall be
designated on its face an “Amendment” or an “Addendum” to this Agreement.

3.6          Assignment.  No party shall have the right to assign its rights or
obligations under this Agreement, by operation of law or otherwise, without the
consent of the other parties hereto.

3.7          Counterparts.  This Agreement may be executed in any number of
counterparts with the same effect as if all signatory parties had signed the
same document.  All counterparts shall be construed together and shall
constitute one and the same instrument.

3.8          Severability.  If any provision of this Agreement or the
application thereof to any Person or circumstance shall be held invalid or
unenforceable to any extent, the remainder of this Agreement and the application
of such provision to other Persons or circumstances shall not be affected
thereby and shall be enforced to the greatest extent permitted by law.

3.9          Gender, Parts, Articles and Sections.  Whenever the context
requires, the gender of all words used in this Agreement shall include the
masculine, feminine and neuter, and the number of all words shall include the
singular and plural.  All references to Article numbers and Section numbers
refer to Parts, Articles and Sections of this Agreement, unless the context
otherwise requires.

3.10        Further Assurances.  In connection with this Agreement and all
transactions contemplated by this Agreement, each signatory party hereto agrees
to execute and deliver such additional documents and instruments and to perform
such additional acts as may be necessary or appropriate to effectuate, carry out
and perform all of the terms, provisions and conditions of this Agreement and
all such transactions.

3.11        Withholding or Granting of Consent.  Each party may, with respect to
any consent or approval that it is entitled to grant pursuant to this Agreement,
grant or withhold such consent or approval in its sole and uncontrolled
discretion, with or without cause, and subject to such conditions as it shall
deem appropriate.

3.12        Laws and Regulations.  Notwithstanding any provision of this
Agreement to the contrary, no party hereto shall be required to take any act, or
fail to take any act, under this Agreement if the effect thereof would be to
cause such party to be in violation of any applicable law, statute, rule or
regulation.

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3.13        Binding Effect.  This Agreement shall be binding upon and inure to
the benefit of the parties hereto and their heirs, executors, administrators,
successors, legal representatives and permitted assigns.

3.14        Negotiation of Rights of Limited Partners, Assignees, and Third
Parties.  The provisions of this Agreement are enforceable solely by the parties
to this Agreement, and no limited Partner, assignee, member or other Person
shall have the right to enforce any provision of this Agreement or to compel any
party to this Agreement to comply with the terms of this Agreement.

[SIGNATURE PAGES FOLLOW]

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IN WITNESS WHEREOF, the Parties have caused this Agreement to be duly executed
by their respective authorized officers as of the Effective Date.

VALERO GP HOLDINGS, LLC

 

 

 

By:

/s/ Steven A. Blank

 

Name:

Steven A. Blank

 

Title:

Senior Vice President, Chief Financial Officer and Treasurer

 

 

 

Address for Notice:

 

 

 

 

One Valero Way

 

San Antonio, Texas 78249

 

Facsimile No.: (210) 353-8361

 

 

 

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:

Chief Executive Officer and President

 

 

 

Address for Notice:

 

 

 

 

 

One Valero Way

 

San Antonio, Texas 78249

 

Facsimile No.: (210) 370-4392

 

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RIVERWALK LOGISTICS, L.P.

 

 

 

By:

Valero Logistics GP, LLC,
its general partner

 

 

 

By:

 /s/ Curtis V. Anastasio

 

Name:

Curtis V. Anastasio

 

Title:

Chief Executive Officer and President

 

 

 

Address for Notice:

 

 

 

 

 

One Valero Way
San Antonio, Texas 78249
Facsimile No.: (210) 370-4392

 

 

 

VALERO GP, LLC

 

 

 

By:

/s/ Curtis V. Anastasio

 

Name:

Curtis V. Anastasio

 

Title:

Chief Executive Officer and President

 

 

 

Address for Notice:

 

 

 

 

 

One Valero Way
San Antonio, Texas 78249
Facsimile No.: (210) 370-4392

 

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