exv10w03



 




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:



           “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
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.



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           “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
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



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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 declare any
Person in default, irrespective of how long such failure continues, shall not constitute



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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.



     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



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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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