CONFORMED COPY
MANAGEMENT AGREEMENT
Dated as of January 1, 1998
among
BUCKEYE MANAGEMENT COMPANY,
BUCKEYE PIPE LINE COMPANY
and
GLENMOOR, LTD.
MANAGEMENT AGREEMENT
THIS MANAGEMENT AGREEMENT (the "Agreement"), dated as
of January 1, 1998, is entered into among BUCKEYE MANAGEMENT
COMPANY, a Delaware corporation (the "General Partner"), BUCKEYE
PIPE LINE COMPANY, a Delaware corporation ("BPLC"), and GLENMOOR,
LTD., a Delaware corporation ("Glenmoor") formerly known as "BMC
Acquisition Company".
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, BPLC owns a 1% general partnership interest
in, and serves as sole general partner of, Buckeye Pipe Line
Company, 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; and
WHEREAS, Glenmoor acquired all of the issued and
outstanding capital stock of the General Partner from
Pennsylvania Company, a wholly owned subsidiary of American
Financial Group, Inc. ("AFG"), on March 22, 1996; and
WHEREAS, pursuant to a Management Agreement, dated as
of March 22, 1996 (the "1996 Agreement"), the General Partner and
BPLC engaged Glenmoor Partners LLP, a Pennsylvania limited
liability partnership ("Glenmoor Partners") and the owner of all
of the issued and outstanding capital stock of Glenmoor, to
provide senior management services to the General Partner and
BPLC; and
WHEREAS, Glenmoor Partners dissolved effective December
31, 1997, and Glenmoor wishes to assume, and the General Partner
and BPLC wish to engage Glenmoor to provide, the senior
management services previously provided by Glenmoor Partners
under the 1996 Agreement, in accordance with the terms set forth
below.
NOW, THEREFORE, in consideration of the mutual
promises hereinafter set forth and intending to be legally bound,
the General Partner, BPLC and Glenmoor hereby agree as follows:
ARTICLE I
Appointment of Glenmoor
The General Partner and BPLC hereby appoint Glenmoor as
managing agent, and Glenmoor accepts its appointment by the
General Partner and BPLC, to manage the business and affairs of
the General Partner and BPLC in the manner which Glenmoor deems
appropriate and to perform all management functions previously
performed by Glenmoor Partners. Management functions to be
performed by Glenmoor shall include, among other things,
supervision of day-to-day activities, ESOP plan administration,
insurance management, risk management, strategic planning and
advice regarding corporate and partnership governance issues.
Glenmoor agrees to perform such services under the supervision
and control of the boards of directors of the General Partner and
BPLC. Employees of Glenmoor may also serve as officers of the
General Partner and BPLC, as they may be duly elected from time
to time by the boards of directors of the General Partner and
BPLC, respectively.
ARTICLE II
Compensation
In consideration for the services to be performed
hereunder, the General Partner shall pay Glenmoor an annual
management fee, the amount of which shall be approved each year
by the disinterested directors of the General Partner. In
connection with such annual approval, Glenmoor shall submit to
the board of directors of the General Partner an itemized report
on the components of the management fee in reasonable detail,
consistent with past practice. Except to the extent such
reimbursement obligations have been released pursuant to the
terms and conditions of the Exchange Agreement, dated as of
August 12, 1997, among the General Partner, the Partnership,
BPLC, the Operating Partnerships (as therein defined), and
Glenmoor, the management fee shall be based on the reimbursement
of all costs and expenses (direct or indirect) incurred by
Glenmoor which are directly or indirectly related to the
capitalization, business or activities of the Partnership and the
Operating Partnerships, including the salaries, bonuses and
benefits (including without limitation participation in all
retirement, savings, welfare, workers' compensation and other
benefit plans maintained by the General Partner and BPLC for its
employees) of employees of Glenmoor reasonably allocated to the
General Partner and BPLC based upon time spent on behalf of the
Partnership and the Operating Partnerships. The management fee
shall include a "Senior Administrative Charge" of not less than
$975,000 to compensate Glenmoor for certain senior management
functions (including the services of X.X. Xxxxxxxxxx and X.
Xxxxxxx) set forth in Article I hereof which were previously
provided to the General Partner by AFG and its affiliates. This
Senior Administrative Charge component of the management fee
shall be specifically approved by the disinterested directors of
the General Partner in connection with its annual approval of the
management fee.
ARTICLE III
Outside Activities
Glenmoor shall be entitled to and may have business
interests and engage in business activities in addition to those
relating to the business of the General Partner, BPLC, the
Partnership or any Operating Partnership for its own account and
for the account of others, without having or incurring any
obligation to offer any interest in such businesses or activities
to the General Partner, BPLC, the Partnership or any Operating
Partnership; provided, however, that Glenmoor shall not engage in
any businesses or activities that are in direct competition with
the General Partner, BPLC, the Partnership or any Operating
Partnership unless Glenmoor has received prior written consent of
the disinterested directors of the General Partner to engage in
such competitive activities. Neither the General Partner, BPLC,
the Partnership, any Operating Partnership, nor any limited
partner of the Partnership, shall have any rights by virtue of
this Agreement, or the relationship created hereby, in any such
business interests of Glenmoor.
ARTICLE IV
Liability of Glenmoor; Indemnification
4.01 Liability of Glenmoor. Notwithstanding anything
to the contrary in this Agreement, and except to the extent
required by applicable law, neither Glenmoor, any person who is
or was a director, officer, employee or agent of Glenmoor, or any
person who is or was serving at the request of Glenmoor as a
director, officer, partner, trustee, employee or agent of another
person (collectively, the "Indemnitees") shall be liable to the
General Partner or BPLC for any action taken or omitted to be
taken by such Indemnitee, provided that such action was taken in
good faith and such action or omission does not involve the gross
negligence or willful misconduct of such Indemnitee. The
termination of any action, suit or proceeding by judgment, order,
settlement, conviction or upon a plea of nolo contendere, or its
equivalent, shall not, of itself, create a presumption that an
Indemnitee did not act in good faith or that an action or
omission involves gross negligence or willful misconduct.
4.02 Indemnification. (a) The General Partner and BPLC
shall, to the fullest extent permitted by applicable law, jointly
and severally indemnify each Indemnitee against expenses
(including legal fees and expenses), judgments, fines and amounts
paid in settlement, actually and reasonably incurred by such
Indemnitee, in connection with any threatened, pending or
completed action, suit or proceeding to which such Indemnitee was
or is a party or is threatened to be made a party by reason of
the Indemnitee's status as (i) as managing agent under this
Agreement; (ii) a director, officer, employee or agent of
Glenmoor; or (iii) a person serving at the request of Glenmoor in
another entity in similar capacity, and which relates to this
Agreement or the property, business, affairs or management of the
General Partner or BPLC, provided that the Indemnitee acted in
good faith, and the act or omission which is the basis of such
demand, claim, action, suit or proceeding does not involve the
gross negligence or willful misconduct of such Indemnitee.
(b) Expenses (including legal fees and expenses)
incurred in defending any proceeding subject to Section 4.02(a)
hereof shall be paid by the General Partner or BPLC in advance of
the final disposition of such proceeding upon receipt of an
undertaking (which need not be secured) by or on behalf of the
Indemnitee to repay such amount if it shall ultimately be
determined, by a court of competent jurisdiction, that the
Indemnitee is not entitled to be indemnified by the General
Partner or BPLC as authorized hereunder.
(c) The indemnification provided by Section 4.02(a)
hereof shall be in addition to any other rights to which the
Indemnitees may be entitled and shall continue as to an
Indemnitee who has ceased to serve in a capacity for which the
Indemnitee is entitled to indemnification, and shall inure to the
benefit of the heirs, successors, assigns, administrators and
personal representatives of the Indemnitee.
(d) To the extent commercially reasonable, the General
Partner shall purchase and maintain insurance on behalf of the
Indemnitees against any liability which may be asserted against,
or expense which may be incurred by, such Indemnitees in
connection with the General Partner's and BPLC's activities,
whether or not the General Partner or BPLC would have the power
to indemnify such Indemnitees against such liability under the
provisions of this Agreement.
(e) An Indemnitee shall not be denied indemnification
in whole or in part under Section 4.02(a) hereof because the
Indemnitee had an interest in the transaction with respect to
which the indemnification applies if the transaction was
otherwise permitted by the terms of this Agreement and the
Partnership's Amended and Restated Agreement of Limited
Partnership (the "Partnership Agreement").
(f) The provisions of this Article IV are for the
benefit of the Indemnitees and their heirs, successors, assigns,
administrators and personal representatives, and shall not be
deemed to create any rights for the benefit of any other persons.
ARTICLE V
No Interest Conveyed to Glenmoor
This Agreement is a management agreement only and does
not convey to Glenmoor any right, title or interest in or to any
assets of the General Partner or BPLC, except that Glenmoor shall
have and is hereby granted a license to enter upon and use such
assets for the purpose of performing its duties and obligations
hereunder.
ARTICLE VI
Term
The term of this Agreement shall commence as of the
date hereof and shall continue until the earlier of (i) the
dissolution and liquidation of the Partnership, (ii) the
dissolution and liquidation of Glenmoor or (iii) the removal of
the General Partner as general partner of the Partnership.
Notwithstanding the foregoing, the General Partner may terminate
this Agreement on not less than 180 days' prior written notice
upon a determination by the disinterested directors of the
General Partner that continuation of this Agreement is not in the
best interests of the Partnership; provided, however, that if the
General Partner terminates this Agreement pursuant to the
foregoing clause for reasons other than the bad faith, gross
negligence or willful misconduct of Glenmoor or its directors,
officers or employees in connection with a matter material to the
Partnership, the General Partner shall pay Glenmoor promptly
following the effective date of Glenmoor's termination a
termination fee equal to (i) the previous year's Senior
Administrative Charge multiplied by three, plus (ii) any amount
outstanding pursuant to Article II hereof, including
reimbursement of severance obligations arising out of the
termination of this Agreement by the General Partner which have
been approved by the appropriate committee of the board of
directors of the General Partner.
ARTICLE VII
General Provisions
7.01 Address and Notices. Any notice under this
Agreement shall be deemed given if received in writing by the
General Partner and BPLC at BPLC's principal offices located at
0000 Xxxxxxxx Xxxx., Xxxxxxxxx, Xxxxxxxxxxxx 00000, or by
Glenmoor at its principal offices located at 5 Radnor Corporate
Center, 000 Xxxxxxxxxx Xxxx, Xxxxxx, Xxxxxxxxxxxx 00000.
7.02 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.
7.03 Assignment; Binding Effect. This Agreement may
not be assigned by Glenmoor without the prior written consent of
the disinterested directors of the General Partner. This
Agreement shall be binding upon and inure to the benefit of the
parties hereto and their permitted successors and assigns.
7.04 Entire Agreement. This Agreement constitutes the
entire agreement between the parties with regard to management
services to be provided by Glenmoor to the General Partner and
BPLC and supersedes all prior agreements or understandings
between the General Partner, BPLC and Glenmoor or their agents
with regard to such services.
7.05 Modification; Waiver. No modification or waiver
of any provision of this Agreement shall be valid unless it is in
writing and signed by the party against whom it is sought to be
enforced. 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. No waiver
at any time of any provision of this Agreement shall be deemed a
waiver of any other provision of this Agreement at that time or a
waiver of that or any other provision at any other time.
7.06 Counterparts. This Agreement may be executed in
any number of counterparts, all of which together shall
constitute one agreement binding on the parties hereto.
7.07 Accounting Principles. All financial reports
requested to be rendered under this Agreement shall be prepared
in accordance with generally accepted accounting principles.
7.08 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.
7.09 Applicable Law. This Agreement shall be construed
and enforced in accordance with the laws of the Commonwealth of
Pennsylvania without giving effect to any conflict of laws
provisions.
IN WITNESS WHEREOF, this Agreement has been duly
executed by the parties hereto as of the date first above
written.
BUCKEYE MANAGEMENT COMPANY
By: /S/ Xxxxxx X. Xxxxxx
Title: Senior Vice President
BUCKEYE PIPE LINE COMPANY
By: /S/ Xxxxxxx X. Xxxxxx
Title: Senior Vice President
GLENMOOR, LTD.
By: /S/ Xxxxxxx X. Xxxx, Xx.
Title: President and Chief Operating Officer
