EXHIBIT 10.6
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SECOND AMENDED AND RESTATED MANAGEMENT AGREEMENT
DATED AS OF DECEMBER 15, 2004
BETWEEN
BUCKEYE PIPE LINE COMPANY, L.P.
AND
BUCKEYE GP LLC
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TABLE OF CONTENTS
Article I Engagement of the Manager.................................................................... 1
Article II Powers and Duties of the Manager............................................................. 2
2.01 Powers of the Manager........................................................................ 2
2.02 Duties of the Manager........................................................................ 3
Article III Liability of the Manager; Indemnification.................................................... 4
3.01 Liability of the Manager..................................................................... 4
3.02 Indemnification.............................................................................. 4
Article IV Reimbursement................................................................................ 5
Article V No Interest Conveyed to the Manager.......................................................... 6
Article VI Termination; Successor Manager............................................................... 6
6.01 Termination.................................................................................. 6
6.02 Successor Manager............................................................................ 6
Article VII Reports, Records and Access.................................................................. 6
Article VIII General Provisions........................................................................... 6
8.01 Reliance by Third Parties.................................................................... 6
8.02 Address and Notices.......................................................................... 6
8.03 Headings..................................................................................... 7
8.04 Binding Effect............................................................................... 7
8.05 Integration.................................................................................. 7
8.06 Waiver....................................................................................... 7
8.07 Counterparts................................................................................. 7
8.08 Accounting Principles........................................................................ 7
8.09 Severability................................................................................. 7
8.10 Applicable Law............................................................................... 7
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SECOND AMENDED AND RESTATED MANAGEMENT AGREEMENT
THIS SECOND AMENDED AND RESTATED MANAGEMENT AGREEMENT (this "Agreement"),
dated as of December 15, 2004, is entered into between BUCKEYE PIPE LINE
COMPANY, L.P., a Delaware limited partnership (the "Partnership"), and BUCKEYE
GP LLC, a Delaware limited liability company (the "Manager").
WITNESSETH:
WHEREAS, the Partnership was formed to engage in any lawful activity for
which limited partnerships may be organized under the laws of the State of
Delaware;
WHEREAS, the Partnership and Buckeye Pipe Line Company (now known as
MainLine Sub LLC, and defined herein as "Holdco") entered into an Amended and
Restated Management Agreement dated as of October 4, 2001 (the "Prior
Agreement");
WHEREAS, Holdco assigned and transferred certain assets and liabilities,
including its interest in the Prior Agreement and its general partner interest
in the Partnership, to the Manager pursuant to a Contribution, Assignment and
Assumption Agreement dated as of the date of this Agreement; and
WHEREAS, the Partnership and the Manager desire to amend and restate the
Prior Agreement to confirm the Partnership's engagement of the Manager to
manage, operate, direct and exercise full and exclusive control over the
business and affairs of the Partnership, and the Manager's acceptance of such
appointment, in accordance with the terms and conditions hereinafter set forth.
NOW, THEREFORE, the parties hereto, intending to be legally bound hereby,
agree as follows:
ARTICLE I
ENGAGEMENT OF THE MANAGER
The Partnership hereby engages the Manager as the Partnership's managing
agent, and the Manager accepts its engagement by the Partnership, to manage,
operate, direct and exercise full and exclusive control over the business and
affairs of the Partnership, subject to the restrictions contained in this
Agreement, the Amended and Restated Agreement of Limited Partnership, dated as
of December 15, 2004, between the General Partner (as defined herein) and the
Partnership (as amended from time to time, the "Partnership Agreement"), the
Amended and Restated Agreement of Limited Partnership, dated as of December 15,
2004 (as amended from time to time, the "MLP Partnership Agreement"), between
the Manager and Buckeye Partners, L.P., a Delaware limited partnership (the
"MLP"). Individual members of the group consisting of the MLP and its
consolidated subsidiaries (including the Partnership) are referred to herein as
"Group Members."
ARTICLE II
POWERS AND DUTIES OF THE MANAGER
2.01 Powers of the Manager. Subject to such limitations as may be imposed
by law, this Agreement, the Partnership Agreement or the MLP Partnership
Agreement (including any provisions relating to separateness of the Partnership
from other entities), the Manager is hereby authorized and empowered, in the
name of and on behalf of the Partnership, to do and perform any and all acts and
things which it deems appropriate or necessary in the conduct of the business
and affairs of the Partnership, including, without limitation, the following:
(a) to lend or borrow money, to assume, guarantee or otherwise
become liable for indebtedness and other liabilities and to issue evidences of
indebtedness;
(b) to buy, lease (as lessor or lessee), sell, mortgage, encumber or
otherwise acquire or dispose of any or all of the assets of the Partnership;
(c) to own, use and invest the assets of the Partnership;
(d) to purchase or sell products, services and supplies;
(e) to make tax, regulatory and other filings with, and to render
periodic and other reports to, governmental agencies or bodies having
jurisdiction over the assets or business of the Partnership;
(f) to open, maintain and close bank accounts and to draw checks and
other orders for the payment of money;
(g) to negotiate, execute and perform any contracts, conveyances or
other instruments;
(h) to make allocations of income and deductions of the Partnership
and make distributions in accordance with the Partnership Agreement;
(i) to utilize the services of officers and employees of the Manager
or of any other entities and to select and dismiss employees (if any) and
outside attorneys, accountants, consultants and contractors;
(j) to maintain insurance for the benefit of the Partnership and its
partners;
(k) to form, participate in or contribute or loan cash or property
to limited or general partnerships, limited liability companies, corporations,
other entities, joint ventures or similar arrangements;
(l) to expand the business activities in which the Partnership is
engaged or engage in new business activities by acquisition or internal
development; and
(m) to conduct litigation and incur legal expenses and otherwise
deal with or settle claims or disputes;
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in each case at such times and upon such terms and conditions as the Manager
deems appropriate or necessary and subject to any express restrictions on such
powers as provided in the Partnership Agreement. The parties hereto acknowledge
that so long as the Manager is the general partner of the Partnership under the
Partnership Agreement (the "General Partner"), the Manager shall have and be
entitled to exercise all of the same hereunder as the General Partner is
entitled to have and entitled to exercise under the Partnership Agreement.
2.02 Duties of the Manager. The Manager shall manage the business and
affairs of the Partnership in the manner which the Manager deems appropriate or
necessary. Without limiting the generality of the foregoing, the Manager's
duties shall include the following:
(a) to take possession of the assets and properties of the
Partnership;
(b) to staff and operate the business of the Partnership with the
officers and employees of the Manager or of other entities;
(c) to render or cause to be rendered engineering, environmental and
other technical services and perform or cause to be performed financial,
accounting, logistical and other administrative functions for the Partnership;
(d) to render such reports and make such periodic and other filings
as may be required under applicable federal, state and local laws, rules and
regulations;
(e) to provide or cause to be provided purchasing, procurement,
repair and other services for the Partnership;
(f) to prepare, on an annual and quarterly basis, financial
statements of the Partnership, which, in the case of annual financial
statements, shall have been audited by a nationally recognized firm of
independent certified public accountants selected by the Manager, and to furnish
to the Partnership such other information and reports concerning the conduct of
the business and affairs of the Partnership as the Partnership shall reasonably
require;
(g) to deposit all funds of the Partnership in such account or
accounts as shall be designated by the Manager (which funds shall not be
commingled with the funds of the Manager);
(h) to maintain records of the assets owned by the Partnership and
books of account and to make such records and books of account available for
inspection by the Partnership or its duly authorized representatives during
regular business hours at the principal office of the Manager;
(i) to prepare and distribute in a timely manner to all partners of
the Partnership tax information reasonably required for federal, state and local
income tax reporting purposes;
(j) to cause to be filed such certificates and to do such other acts
as may be required by law to qualify and maintain the Partnership as a limited
partnership in all relevant jurisdictions; and
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(k) to conduct the business and affairs of the Partnership in
accordance with the Partnership Agreement and all applicable laws, rules and
regulations;
in each case in such a manner as the Manager deems appropriate or necessary.
2.03 Outside Activities. Subject to such limitations as may be imposed
pursuant to the terms of the Partnership Agreement, the affiliates of the
Manager (but not including any Group Member) shall be entitled to and may have
business interests and engage in business activities in addition to those
relating to the business of the Partnership, including business interests and
activities in direct competition with the Partnership, for their own accounts
and for the account of others, without having or incurring any obligation to
offer any interest in such businesses or activities to the Partnership or any of
its partners. Neither the Partnership nor any of its partners shall have any
rights by virtue of this Agreement or the relationship created hereby in any
such business interests.
ARTICLE III
LIABILITY OF THE MANAGER; INDEMNIFICATION
3.01 Liability of the Manager. Notwithstanding anything to the contrary in
this Agreement, and except to the extent required by applicable law, neither the
Manager, any affiliate of the Manager, any person who is or was a director,
officer, manager, member, employee or agent of the Manager or any such affiliate
or any person who is or was serving at the request of the Manager or any such
affiliate as a director, officer, manager, member, partner, trustee, employee or
agent of another person (each an "Indemnitee" and collectively, the
"Indemnitees") shall be liable to the Partnership or any of its partners for any
action taken or omitted to be taken by such Indemnitee, provided that such
Indemnitee acted 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 action or omission involves bad faith or willful
misconduct.
3.02 Indemnification.
(a) The Partnership shall, to the fullest extent permitted by
applicable law, 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 claim, demand, 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 (x) a general partner or affiliate thereof or (y) a
director, officer, manager, member, partner, employee, or agent of the Manager
or an affiliate or (z) a person serving at the request of the Manager in another
entity in a similar capacity and which relates to this Agreement or the
property, business, affairs or management of the Partnership (provided 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).
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(b) Expenses (including legal fees and expenses) incurred in
defending any proceeding subject to Section 3.02(a) shall be paid by the
Partnership 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 Partnership as authorized hereunder.
(c) The indemnification provided by Section 3.02(a) shall be in
addition to any other rights to which an Indemnitee 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 Partnership 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 Partnership's activities, whether or not the
Partnership 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 3.02(a) 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
Agreement.
(f) The provisions of this Article III are for the benefit of the
Indemnitees and the heirs, successors, assigns, administrators and personal
representatives of the Indemnitees and shall not be deemed to create any rights
for the benefit of any other persons.
(g) As used in this Agreement, the term "affiliate" means, with
respect to any person, any other person that directly or indirectly controls, is
controlled by, or is under common control with, the person in question.
ARTICLE IV
REIMBURSEMENT
Except as otherwise provided in the Third Amended and Restated Exchange
Agreement, dated as of December 15, 2004, among Holdco, the Manager, the
Partnership, the MLP and other Group Members, the Partnership shall promptly
reimburse the Manager for all costs and expenses (direct or indirect) incurred
by the Manager which are directly or indirectly related to the business or
activities of the Partnership (including, without limitation, expenses, direct
or indirect, reasonably allocated to the Manager by its affiliates). The
Partnership shall also promptly reimburse any former Manager for all such costs
incurred by it after a successor becomes the Manager hereunder. If the former
Manager has been removed, these costs may include any severance costs required
as a result of such former Manager ceasing to be the Manager of the Partnership.
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ARTICLE V
NO INTEREST CONVEYED TO THE MANAGER
This Agreement is a management agreement only and does not convey to the
Manager any right, title or interest in or to any assets of the Partnership,
except that the Manager 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
TERMINATION; SUCCESSOR MANAGER
6.01 Termination. Upon dissolution and liquidation of the Partnership,
this Agreement shall terminate.
6.02 Successor Manager. In the event the General Partner withdraws or is
removed from the Partnership and a successor becomes the General Partner, the
successor General Partner shall automatically become the Manager of the
Partnership and shall succeed to all of the rights and obligations of the
Manager hereunder (provided that such succession shall not affect the rights of
any former Manager to reimbursement provided by Article IV hereof), and the
former Manager and its successor shall execute an instrument evidencing such
succession. As soon as practicable after the effective date of such succession,
the former Manager shall, at the cost and expense of the Partnership, deliver
all records, data and information pertaining to the business and affairs of the
Partnership to the successor Manager.
ARTICLE VII
REPORTS, RECORDS AND ACCESS
The Manager shall prepare, maintain and furnish all reports, records and
information required by the Partnership Agreement.
ARTICLE VIII
GENERAL PROVISIONS
8.01 Reliance by Third Parties. Notwithstanding anything to the contrary
in this Agreement, no lender, purchaser or other person shall be required to
look to the application of proceeds hereunder or to verify any representation by
the Manager as to the extent of the interest in the Partnership's assets that
the Manager is entitled to encumber, sell or otherwise use, and any such lender,
purchaser or other person shall be entitled to rely exclusively on the
representations of the Manager as to its authority to enter into such financing
or sale arrangements and shall be entitled to deal with the Manager, without
joinder of any other persons, as if it were the sole party in interest therein,
both legally and beneficially.
8.02 Address and Notices. Any notice under this Agreement to the
Partnership or the Manager shall be deemed given if received by it in writing at
the principal office of the Partnership designated in the Partnership Agreement.
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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 as provided in Section 6.02.
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. 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.
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 Accounting Principles. All financial reports requested to be rendered
under this Agreement shall be prepared in accordance with generally accepted
accounting principles.
8.09 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.
8.10 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.
PARTNERSHIP:
BUCKEYE PIPE LINE COMPANY, L.P.
By: BUCKEYE GP LLC,
As General Partner
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Senior Vice President-Administration,
General Counsel and Secretary
MANAGER:
BUCKEYE GP LLC
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Senior Vice President - Finance and
Chief Financial Officer
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