SERVICES AGREEMENT
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THIS SERVICES AGREEMENT (this "Agreement"), dated as of August 12, 1997, is
entered into among BUCKEYE MANAGEMENT COMPANY, a Delaware corporation (the
"General Partner"), BUCKEYE PIPE LINE COMPANY, a Delaware corporation (the
"Manager"), and BUCKEYE PIPE LINE SERVICES COMPANY, a Pennsylvania corporation
(the "Provider").
WITNESSETH:
WHEREAS, the General Partner owns a 1% general partnership interest in, and
serves as sole general partner of, Buckeye Partners, L.P., a publicly traded
Delaware limited partnership (the "Partnership"); and
WHEREAS, the Manager owns a 1% general partnership interest in, and serves
as sole general partner of, Buckeye Pipe Line Company, L.P., Buckeye Pipe Line
Company of Michigan, L.P., Buckeye Tank Terminals Company, L.P., Everglades Pipe
Line Company, L.P. and Laurel Pipe Line Company, L.P., each a Delaware limited
partnership (together, the "Operating Partnerships"), and the Partnership owns a
99% limited partnership interest in each such entity (except Buckeye Pipe Line
Company of Michigan, L.P., which is owned 98.01% by the Partnership and 1.99% by
the Manager); and
WHEREAS, the General Partner and the Manager desire to engage and appoint
the Provider to provide certain services to the Partnership and the Operating
Partnerships in accordance with the terms set forth below.
NOW, THEREFORE, the parties hereto, intending to be legally bound hereby,
agree as follows:
ARTICLE I
Appointment of the Provider
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The General Partner and the Manager hereby appoint the Provider to provide
certain services in connection with the operation of the business of the
Partnership and the Operating Partnerships, subject to the control and oversight
of the General Partner and the Manager, and the Provider accepts its appointment
by the General Partner and the Manager.
ARTICLE II
Term of Agreement
-----------------
The term of this Agreement (the "Service Term") shall commence on the date
hereof and shall continue until all principal, interest and premium is paid in
full under the Amended and Restated Note Agreement of even date herewith among
the BMC Acquisition Company Employee Stock Ownership Plan (the "ESOP"), The
Prudential Insurance Company of America and Pruco Life Insurance Company, unless
earlier terminated (i) by the General Partner for Cause or (ii) by the General
Partner in the event that the General Partner is removed as general partner of
the Partnership for any reason. For purposes of this Agreement, "Cause" shall
mean the failure of the Provider to comply with the terms and conditions set
forth in this Agreement or to follow the lawful directives of the General
Partner or the Manager in connection with the performance by the Provider of its
duties and responsibilities under this Agreement, as determined by the
nonmanagement directors of the Board of Directors of the General Partner in
their sole discretion.
ARTICLE III
Duties and Responsibilities Of the Provider
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3.01 Duties and Responsibilities. During the Service Term, the Provider
shall perform such duties and responsibilities as are necessary or appropriate
to conduct the day-to-day business operations of the Partnership and the
Operating Partnerships and as are assigned to the Provider by the General
Partner or the Manager. The General Partner or the Manager may from time to
time expand, limit or otherwise modify the duties and responsibilities of the
Provider by timely notice to the Provider in writing. All activities of the
Provider under this Agreement shall be performed under the direct supervision of
the General Partner or the Manager.
3.02 Employees. Upon commencement of the Service Term, the Provider shall
employ all employees currently employed by the Manager as employees at will.
The Provider shall offer such employees compensation substantially the same as
their current compensation from the Manager, subject to annual compensation
adjustments in the ordinary course of business. The Provider shall assume all
liabilities and acquire all assets in connection with all current employee
benefit plans for the benefit of such employees, including, without limitation,
sponsorship of the BMC Acquisition Company Employee Stock Ownership Plan. The
Provider shall grant each such employee credit for service with the Manager for
all purposes under such employee benefits plans.
3.03 Officers and Directors. During the Service Term, the Provider shall
cause the officers of the Manager to be the officers of the Provider and Xxxx
Xxxx to serve as the
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Independent Director (as defined in the Articles of Incorporation of the
Provider), unless otherwise approved in writing by the General Partner.
3.04 Equitable Relief. The Provider acknowledges that the provisions of
Section 3.03 are, in view of the nature of this transaction, reasonable and
necessary to protect the legitimate interests of the General Partner, the
Manager, the Partnership and the Operating Partnerships, and that any violation
of any provision of that Section will result in irreparable injury to the
General Partner, the Manager, the Partnership and the Operating Partnerships.
The Provider also acknowledges that in the event of any such violation, the
General Partner and the Manager shall be entitled to preliminary and permanent
injunctive relief without the necessity of proving actual damages, and to an
equitable accounting of all earnings, profits and other benefits arising from
any such violation, which rights shall be cumulative and in addition to any
other rights or remedies to which the General Partner or the Manager may be
entitled. The Provider agrees that in the event of any such violation, an
action may be commenced for any such preliminary and permanent injunctive relief
and other equitable relief in the United States District Court for the Eastern
District of Pennsylvania or the state court of competent jurisdiction sitting in
Delaware County or in Lehigh County, Pennsylvania or in any other court of
competent jurisdiction. The Provider hereby waives, to the fullest extent
permitted by law, any objection that the Provider may now or hereafter have to
such jurisdiction or to the laying of the venue of any such suit, action or
proceeding brought in such a court and any claim that such suit, action or
proceeding has been brought in an inconvenient forum. The Provider agrees that
effective service of process may be made upon the Provider under the notice
provisions contained in Section 8.02 of this Agreement.
3.05 Survival of Covenants. Sections 3.03 and 3.04 shall survive the
termination of this Agreement.
ARTICLE IV
Insurance
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The General Partner shall include the Provider as an additional insured
under all liability insurance policies maintained by the General Partner. Such
policies shall indemnify the Provider and its officers, directors and employees
against covered claims and expenses which may be incurred by the Provider and
its officers, directors and employees in connection with the activities of the
Partnership or the Operating Partnerships in accordance with the terms of such
policies on the same basis as the Manager would have been covered thereunder.
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ARTICLE V
Services Fee
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The General Partner and the Manager shall pay the Provider a fee for
performing its duties and responsibilities under this Agreement equal to the
reasonable costs and expenses incurred by the Provider which are directly or
indirectly related to the business or activities of the Partnership and the
Operating Partnerships, respectively (including, without limitation, any amounts
related to the payment of taxes when due related to the business of the
Partnership or the Operating Partnerships or to the ESOP and any top-up
contribution by the Provider to the ESOP), and the Manager shall reimburse the
Provider for all costs and expenses incurred by the Provider in connection with
the formation, capitalization, business or other activities of the Provider
pursuant to this Agreement. Except as set forth in the preceding sentence, the
Provider will not have the right to receive any other compensation for
performing its duties and responsibilities under this Agreement.
ARTICLE VI
Indemnification
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The General Partner and the Manager shall jointly and severally indemnify,
protect and hold the Provider and its affiliates harmless from any and all
claims, demands, suits or actions (including attorneys' fees and expenses) which
may be asserted against the Provider arising out of the performance of services
pursuant to this Agreement or otherwise in connection with the Partnership or
the Operating Partnerships, except for any claims, demands, suits or actions
arising out of the willful misconduct of the Provider which is contrary to
express instructions from the General Partner or the Manager.
ARTICLE VII
No Interest Conveyed to the Provider
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This Agreement is a services agreement only and does not convey to the
Provider any right, title or interest in or to any assets of the Partnership or
the Operating Partnerships. This Agreement is not intended to form a joint
venture or a partnership.
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ARTICLE VII
General Provisions
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8.01 Third Party Beneficiary. The Partnership and the Operating
Partnerships shall be deemed third party beneficiaries of the duties and
responsibilities of the Provider under this Agreement and shall have the right
as such to enforce this Agreement directly against the Provider; however, there
shall be no other third party beneficiaries to this Agreement.
8.02 Notices. All notices, requests, demands and other communications
required or permitted hereunder shall be in writing and shall be delivered
personally, sent by telecopier, by first class mail or by a nationally
recognized overnight courier, postage prepaid. All such notices, requests,
demands and other communications shall be addressed to the respective parties at
the addresses set forth below, or to such other address or person as any party
may designate by notice to the other parties in accordance herewith:
If to the General Partner: Buckeye Management Company
Five Radnor Corporate Center
Xxxxx 000
000 Xxxxxxxxxx Xxxx
Xxxxxx, XX 00000
Attn: Chairman
Telecopier No.: (000) 000-0000
If to the Manager: Buckeye Pipe Line Company
0000 Xxxxxxxx Xxxxxxxxx
Xxxxxxxxx, XX 00000
Attn: President
Telecopier No.: (000) 000-0000:
In either case, with a copy to: Xxxxxx, Xxxxx & Xxxxxxx LLP
0000 Xxx Xxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000-0000
Attn: Xxxxxx X. Xxxxxx
Telecopier No.: (000) 000-0000
If to the Provider: Buckeye Pipe Line Services Company
0000 Xxxxxxxx Xxxxxxxxx
Xxxxxxxxx, XX 00000
Attn: President
Telecopier No.: (000) 000-0000
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With a copy to: LaSalle National Trust, N.A.
000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, XX 00000
Attn: Corporate Trust Department
Telecopier No.: (000) 000-0000
and
XxXxxxx Xxxxx & Xxxxx
000 Xxxx Xxxxxxx Xxxxxx
00xx Xxxxx
Xxxxxxx, XX 00000
Attn: Xxxxx Xxxxxxxx, Esquire
Telecopier No.: (000) 000-0000
8.03 Headings. All article or section headings in this Agreement are for
convenience only and shall not be deemed to control or affect the meaning or
construction of any of the provisions hereof.
8.04 Binding Effect. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their successors but shall not be assignable
except upon the consent in writing of the parties hereto.
8.05 Integration. This Agreement constitutes the entire agreement among
the parties pertaining to the subject matter hereof and supersedes all prior
agreements and understandings pertaining thereto.
8.06 Waiver and Amendment. No failure by any party to insist upon the
strict performance of any covenant, duty, agreement or condition of this
Agreement or to exercise any right or remedy consequent upon a breach thereof
shall constitute a waiver of any such breach or of any other covenant, duty,
agreement or condition. Any amendment to this Agreement shall be effective only
if in a writing signed by each of the parties hereto.
8.07 Counterparts. This Agreement may be executed in any number of
counterparts, all of which together shall constitute one agreement binding on
the parties hereto.
8.08 Severability. If any provision of this Agreement is or becomes
invalid, illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions hereof, or of such provision in other
respects, shall not be affected thereby.
8.09 Applicable Law. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the Commonwealth of Pennsylvania.
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IN WITNESS WHEREOF, this Agreement has been duly executed by the parties
hereto as of the date first above written.
BUCKEYE MANAGEMENT COMPANY
By:
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Name:
Title:
BUCKEYE PIPE LINE COMPANY
By:
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Name:
Title:
BUCKEYE PIPE LINE SERVICES COMPANY
By:
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Name:
Title:
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