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 



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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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