Exhibit 10.1
CAUSE NO. 2010-47387

     
BROADBASED EQUITIES, on behalf of itself
and all others similarly situated and also
derivatively on behalf of Buckeye GP Holdings L.P.,
Plaintiff,
v.
 

IN THE DISTRICT COURT OF

HARRIS COUNTY, TEXAS

129th JUDICIAL DISTRICT
FORREST E. WYLIE, CHRISTOPHER L.
COLLINS, JOHN F. ERHARD, JOSEPH A.
LASALA, JR., FRANK J. LOVERRO, FRANK S.
SOWINSKI, ROBB E. TURNER, MARTIN A.
WHITE, BGH GP HOLDINGS, LLC, AND
MAINLINE MANAGEMENT, LLC,
Defendants,
v.
BUCKEYE GP HOLDINGS L.P.,
Nominal Defendant.
   

MEMORANDUM OF UNDERSTANDING
     Plaintiffs Broadbased Equities, Henry James Steward and JR Garrett Trust
(collectively “Plaintiffs”), Defendants Forrest E. Wylie, Christopher L.
Collins, John F. Erhard, Joseph A. LaSala, Jr., Frank J. Loverro, Frank S.
Sowinski, Robb E. Turner, Martin A. White, Buckeye GP Holdings LP, BGH GP
Holdings LLC (“BGH Holdings”), MainLine Management LLC (“Mainline”), ArcLight
Capital Partners, LLC (“ArcLight”), Kelso & Company (“Kelso”), Buckeye Partners
LP (“BPL”), Buckeye GP LLC (the “Partnership GP”), and Grand Ohio, LLC (“Grand
Ohio”) and Nominal Defendant Buckeye GP Holdings L.P. (“BGH”) (collectively
“Defendants,” and together with Plaintiffs, the “Parties”), by and through their
respective attorneys, have reached an agreement in principle providing for the
settlement of the above

 

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consolidated action (the “Action”) on the terms and subject to the conditions
set forth below in this Memorandum of Understanding (the “MOU”):
     WHEREAS, on or about June 11, 2010, BPL and BGH announced that they had
entered into a definitive agreement (the “Merger Agreement”) that would result
in the merger of Grand Ohio with and into BGH (the “Merger”). Under the terms of
the Merger Agreement, BGH unitholders would receive 0.705 BPL limited
partnership units in exchange for each BGH common or management unit owned at
closing; and
     WHEREAS, on or about July 14, 2010, in connection with proposed meetings of
unitholders, of BPL and BGH, BPL filed a joint registration statement, which
included a joint proxy statement prospectus by BPL and BGH (the “Registration
Statement”) with the United States Securities and Exchange Commission (“SEC”),
which stated, among other things, that the board of directors of MainLine had
unanimously (with the director who is also Chief Executive Officer of the
Partnership GP and MainLine recusing himself) approved the Merger, the Merger
Agreement and the transactions contemplated thereby; and
     WHEREAS, the Registration Statement also contained a discussion of the
background of the Merger Agreement, a summary of Credit Suisse Securities
(USA) LLC (“Credit Suisse”) and Barclays Capital Inc.’s (“Barclays”) work as
well as their compensation and prior work for BGH or BPL, a description of
management’s projections and the reasons MainLine’s board recommended that
unitholders vote in favor of the Merger, and solicited unitholder approval for
the Merger; and
     WHEREAS, on or about July 30, 2010, a putative class and derivative action
complaint was filed by Plaintiff Broadbased Equities (“Broadbased”) (the
“Broadbased Complaint”), a unitholder of BGH, allegedly on behalf of all holders
of BGH’s common units, other than

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Defendants and their affiliates (the “Putative Class”), in the District Court of
Harris County, Texas (the “Court”), captioned Broadbased Equities v. Wylie, et
al., Cause No. 2010-47387 (the “Broadbased Action”); and
     WHEREAS, on or about August 2, 2010, a putative class action complaint was
filed by Plaintiff JR Garrett Trust (“JR Garrett”) (the “JR Garrett Complaint”),
a unitholder of BGH, allegedly on behalf of all holders of BGH’s common units,
other than Defendants and their affiliates, in the Court, captioned JR Garrett
Trust v. Buckeye GP Holdings L.P, et al., Cause No. 2010-47543 (the “JR Garrett
Action”); and
     WHEREAS, also on or about August 2, 2010 a putative class action complaint
was filed by Plaintiff Henry James Steward (“Steward”) (the “Steward
Complaint”), a unitholder of BGH, allegedly on behalf of all holders of BGH’s
common units, other than Defendants and their affiliates, in the Court,
captioned Henry James Steward v. Wylie, et al., Cause No. 2010-47538 (the
“Steward Action”); and
     WHEREAS, each of the Broadbased Complaint, the JR Garrett Complaint and the
Steward Complaint sought relief against the members of MainLine’s Board: Forrest
E. Wylie, Christopher L. Collins, John F. Erhard, Joseph A. LaSala, Jr., Frank
J. Loverro, Frank S. Sowinski, Robb E. Turner, and Martin A. White (the
“Board”), as well as MainLine. In addition, (i) the JR Garrett Complaint and the
Broadbased Complaint sought relief against BGH nominally while the Steward
Complaint sought relief against BGH as a direct defendant, (ii) the JR Garrett
Complaint and the Broadbased Complaint also sought relief against BGH GP,
(ii) the JR Garrett Complaint and the Steward Complaint also sought relief
against BPL and the Partnership GP, (iii) the JR Garrett Complaint sought relief
against ArcLight and Kelso, and (iv) the Steward Complaint also sought relief
against Grand Ohio. Hereinafter, (i) BPL, the

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Partnership GP and Grand Ohio are sometimes referred to as the Partnership
Defendants and (ii) BGH, BGH GP, MainLine, ArcLight, Kelso and the Board are
sometimes referred to as the BGH Defendants; and
     WHEREAS, each of the Broadbased Complaint, the JR Garrett Complaint and the
Steward Complaint challenged, inter alia, the Merger Agreement and the Merger,
including but not limited to the terms of the Merger Agreement, and alleged that
the Board had breached its fiduciary duties in connection therewith.
     WHEREAS, each of the Broadbased Complaint, the JR Garrett Complaint and the
Steward Complaint also challenged certain disclosures in the Registration
Statement (the “Challenged Disclosures”) as set forth below, and alleged that
the Board had breached its fiduciary duties in connection therewith.
Specifically, the Broadbased Complaint alleged, inter alia, that the following
information, alleged by Broadbased to be material, was not disclosed in the
Registration Statement:

  (i)   According to the Registration Statement, projections were provided to
the Buckeye Audit Committee in March 2010 and the BGH Board in April 2010 and
were based on management assumptions as of the dates of their preparation and
have not been updated since that time. The Broadbased Complaint alleged that the
Registration Statement was deficient because it failed to disclose whether the
projections provided to the Buckeye Audit Committee and to the BGH Board were
the same projections or were prepared on different dates. The Broadbased
Complaint further alleged that if they were not the same, then the Registration
Statement was deficient because it (a) disclosed only one set of financial
projections and (b) did not specify the date on which it was prepared.     (ii)
  According to the Registration Statement, during late 2009 and early 2010,
Buckeye’s senior management, along with its Board and Board of BGH, discussed
ways of reducing Buckeye’s cost of equity capital. The Broadbased Complaint
alleged that the Registration Statement was deficient because it failed to
disclose the substance of these discussions.

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  (iii)   According to the Registration Statement, at a meeting on March 8,
2010, Buckeye’s Audit Committee discussed potential issues regarding any third
party bid that may arise for either Buckeye, BGH, or both. The Broadbased
Complaint alleged that the Registration Statement was deficient because it
failed to disclose the potential issues discussed at that meeting regarding
third party bids.     (iv)   According to the Registration Statement, at a
meeting on April 14, 2010, the BGH Board discussed the possible timing, nature
and content of a proposed response to the April 13th proposal, noting that the
proposed exchange ratio of .65 was insufficient. The Broadbased Complaint
alleged that the Registration Statement was deficient because it failed to
disclose (a) the basis for this determination and (b) any discussion had
regarding what exchange rate would be sufficient.     (v)   According to the
Registration Statement, on April 26, 2010, members of the BGH Board and
representatives from Credit Suisse and Latham & Watkins attended a presentation
by Buckeye GP’s senior management regarding the business and prospects of
Buckeye and the strategic rationale for, and financial implications of, the
acquisition of BGH by Buckeye. The Broadbased Complaint alleged that the
Registration Statement was deficient because it failed to disclose the substance
of this presentation.     (vi)   According to the Registration Statement, at
meetings on April 28, 2010 and May 24, 2010, Credit Suisse reviewed and
discussed with the BGH Board its updated preliminary financial analyses with
respect to BGH, Buckeye and the proposed transaction. Also, at the April 28,
2010 meeting, the BGH Board discussed the pro forma effects of the proposed
transaction. The Broadbased Complaint alleged that the Registration Statement
was deficient because it failed to disclose (a) the updated preliminary
financial analyses of Credit Suisse reviewed and discussed at both meetings and
(b) the pro forma effects of the proposed transaction that were discussed at the
April 28, 2010 meeting.     (vii)   According to the Registration Statement, on
May 7, 2010, as directed by the BGH Board and the Buckeye Audit Committee,
respectively, Credit Suisse and Barclays met to discuss certain aspects of the
April 13, 2010 proposal and BGH’s counterproposal and the financial assumptions
underlying both proposals. The Broadbased Complaint alleged that the
Registration Statement was deficient because it failed to disclose the substance
of these discussions.     (viii)   According to the Registration Statement, at a
meeting on May 18, 2010, the Buckeye Audit Committee discussed with its advisors
possible transaction terms, including the likelihood of a third party bid for
BGH,

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      Buckeye, or both. The Broadbased Complaint alleged that the Registration
Statement was deficient because it failed to disclose the substance of the
discussions regarding third party bids.     (ix)   According to the Registration
Statement, at a meeting on May 25, 2010, the BGH Board discussed, among other
things, the pro forma consequences of the proposed transaction, an increase in
the exchange ratio, whether BGH should have an affirmative right to shop itself
after signing a definitive agreement, the universe of potential buyers for BGH
and whether BGH should be able to respond to unsolicited written proposals after
signing a definitive agreement. Following those discussions, the BGH Board
decided to counter with a proposed exchange ratio of 0.715. The BGH Board
directed the Transaction Committee to (1) continue resisting exclusivity prior
to signing a definitive agreement, (2) accept limitations on BGH’s ability to
affirmatively shop itself after the signing of a definitive agreement,
(3) retain the right to respond to unsolicited written proposals, (4) accept the
proposal regarding post-closing governance, and (5) emphasize the importance of
promptly executing a definitive agreement. The Broadbased Complaint alleged that
the Registration Statement was deficient because it failed to disclose the
substance of the discussions that led to these determinations.     (x)  
According to the Registration Statement, on May 27, 2010, the BGH Board
discussed, among other things, the likelihood of competing proposals. The
Broadbased Complaint alleged that the Registration Statement was deficient
because it failed to disclose the conclusion reached by the BGH Board regarding
the likelihood of competing proposals and the rationale supporting that
conclusion.     (xi)   According to the Registration Statement, on June 10,
2010, BGH’s Transaction Committee gave its recommendation regarding drafts of
the merger agreement and certain related agreements and other documents, and the
merger to the BGH Board. The Broadbased Complaint alleged that the Registration
Statement was deficient because it failed to disclose the substance of the BGH
Transaction Committee’s recommendation.     (xii)   According to the
Registration Statement, in its Discounted Cash Flow Analysis, Credit Suisse
calculated the net present value of BGH and Buckeye levered free cash flows
using BGH’s and Buckeye’s management forecasts, respectively. In performing this
analysis, Credit Suisse applied discount rates ranging from 7.00% to 9.25% for
BGH and 6.50% and 8.25% for Buckeye and terminal yield ranges of 5.0% to 6.0%
for BGH and 6.5% to 7.0% for Buckeye based on the selected companies analysis to
calculate an implied exchange ratio reference range. The Broadbased Complaint
alleged that the Registration Statement was deficient because it failed to
disclose the methodology used to derive the

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      discount rate ranges and terminal yield ranges from the Selected Companies
Analysis.     (xiii)   According to the Registration Statement, in its Selected
Transactions Analysis, Credit Suisse applied multiple ranges based on the
Selected Transactions Analysis to corresponding financial data for BGH and
applied multiple ranges based on the Selected Companies Analysis to
corresponding financial data for Buckeye to calculate an implied exchange ratio
reference range. The Broadbased Complaint alleged that the Registration
Statement was deficient because it failed to disclose (a) which multiple ranges
from the Selected Transactions Analysis and the Selected Companies Analysis were
used to calculate the implied exchange ratio reference range and (b) the type of
consideration and the value of each transaction.     (xiv)   According to the
Registration Statement, Credit Suisse and its affiliates may acquire, hold or
sell, for Credit Suisse’s and its affiliates own accounts and the accounts of
customers, equity, debt and other securities and financial instruments
(including bank loans and other obligations) of BGH, Buckeye and any other
company that may be involved in the merger, as well as provide investment
banking and other financial services to such companies. The Broadbased Complaint
alleged that the Registration Statement was deficient because it failed to
disclose the extent of Credit Suisse’s and its affiliates’ interests in BGH,
Buckeye, or any other company involved in the merger.     (xv)   According to
the Registration Statement, Credit Suisse will receive a customary fee for its
services, a substantial portion of which is contingent upon the consummation of
the merger. Credit Suisse also became entitled to receive a fee upon the
rendering of its opinion. The Broadbased Complaint alleged that the Registration
Statement was deficient because it failed to disclose the value of the fees to
be paid to Credit Suisse, including the amount of fees which is contingent upon
the consummation of the Sale Agreement.     (xvi)   According to the
Registration Statement, Credit Suisse and its affiliates have in the past
provided investment banking and other financial services to BGH, Buckeye, and
certain of their affiliates for which Credit Suisse and its affiliates have
received compensation, including, during the last two years, having acted as a
co-managing underwriter of an offering of debt securities by Buckeye. Credit
Suisse and its affiliates may have provided other financial advice and services,
and may in the future provide financial advice and services, to BGH, Buckeye,
and their respective affiliates for which Credit Suisse and its affiliates have
received, and would expect to receive, compensation. The Broadbased Complaint
alleged that the Registration Statement was deficient because it failed to

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      disclose (a) the affiliates of BGH and Buckeye to which Credit Suisse has
provided services, (b) the amount of fees that Credit Suisse has received for
services it has provided to BGH, Buckeye, and their respective affiliates,
(c) the amount of fees that Credit Suisse has an expectation of receiving for
future services provided to BGH, Buckeye, and their affiliates, (d) to the
extent that Credit Suisse has provided services to Kelso, ArcLight, or MainLine,
the amount of fees received therefrom, and (e) to the extent that Credit Suisse
expects to provide services to Kelso, ArcLight, or MainLine, the amount of fees
expected to be received therefrom.

The JR Garrett Complaint alleged, inter alia, that the following information,
alleged by JR Garrett to be material, was not disclosed in the Registration
Statement:

  (i)   The Registration Statement stated that management of Buckeye Partnership
GP and Buckeye Holdings GP prepared projections that included expected future
financial and operating performance for BPL on a “stand-alone” basis and on a
“combined” basis giving effect to the proposed Merger. However, the JR Garrett
Complaint alleged that these projections were not disclosed.     (ii)   The
Registration Statement stated that the stand alone and combined projections were
provided to the BPL Audit Committee and the BGH Board and they were “revised” to
reflect certain assumptions of the Partnership Audit Committee and the Holdings
Board. However, the JR Garrett Complaint alleged that it did not disclose what
the revisions were (i.e. were they higher or lower than management’s
projections) or why they made said revisions.     (iii)   The Registration
Statement stated that the stand-alone and combined projections were provided to
Barclays Capital Inc. (“Barclays”) and Credit Suisse for use in connection with
the preparation of their opinions to the Partnership Audit Committee and the
Holdings Board, respectively, and related financial advisory services. However,
the JR Garrett Complaint alleged it was not disclosed whether Credit Suisse was
provided with the revised projections, the original projections, or both.    
(iv)   The Registration Statement also stated that Barclays prepared adjusted
projections in conducting its financial analyses but the JR Garrett Complaint
alleged that it did not disclose what adjustments were made to management’s
undisclosed projections (i.e. were they higher or lower than management’s
projections) and to which set of projections.     (v)   Although the
Registration Statement disclosed BPL’s “Total Distributable Cash Flow” for
2011-2014, the JR Garrett Complaint alleged that it did

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      not disclose how much BPL expects to actually distribute to its LP
unitholders, nor did it disclose expected sales revenues or Earning Before
Interest Tax & Depreciation (“EBITDA), so that BGH unitholders could properly
value BGH’s incentive distribution rights. Moreover, the JR Garrett Complaint
alleged that Registration Statement did not disclose whether the “Total
Distributable Cash Flow” projections are based on the revised projections or the
original projections.     (vi)   The Registration Statement disclosed summaries
of the financial analyses conducted by Credit Suisse and Barclays; however, the
JR Garrett Complaint alleged that it did not disclose if Credit Suisse and
Barclays relied upon the revised or original projections in performing their
analyses, in particular with respect to their discounted cash flow analyses.    
(vii)   Moreover, the Registration Statement stated that BPL and BGH will not
make publicly available any update or other revisions to projections to reflect
circumstances existing after the date of the projections. However, the JRG
Complaint alleged that Defendants cannot withhold information that is material
to the vote on the Merger. The JRG Complaint alleged that it was important that
BGH’s public unitholders are informed of any material changes to the projections
in the form of, at least, a supplemental public filing by Defendants so that
they could make an informed vote on the Merger. Moreover, the JR Garrett
Complaint alleged that any material changes in the projections raises questions
as to the continued adequacy of Credit Suisse’s and Barclays’ fairness opinions.
    (viii)   The Registration Statement stated that the Board interviewed Credit
Suisse to serve as financial advisor to BGH in connection with the Merger and
retained Credit Suisse because of its “knowledge and experience with respect to
M&A transactions and the energy industry generally, as well as Credit Suisse’s
experience advising MLPs and other companies with respect to transactions
similar to the proposed transaction...” However, the JR Garrett Complaint
alleged that the Registration Statement did not disclose if Credit Suisse was
the only firm considered by the BGH Board, and if it was, why other firms were
not interviewed.     (ix)   Although the Registration Statement disclosed that
Credit Suisse “provided investment banking and other financial services to BGH,
BPL and certain of their affiliates”, the JR Garrett Complaint alleged that it
did not disclose the amount of fees it received as a result of these services.
More importantly, the JR Garrett Complaint alleged it did not disclose the
amount of fees that Credit Suisse has received, or will receive, as a result of
its services in connection with the Merger, including the services provided in
connection with its fairness opinion. The JR Garrett Complaint alleged that this
is very important material information required to determine whether or not
Credit Suisse’s fairness opinion is reliable or

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      was “bought and paid for.” With respect to Barclays, the Registration
Statement disclosed the amount of fees it received for past services to
Defendants but the JR Garrett Complaint alleged that it did not disclose the
amount of fees that it received, or will receive, for its services in connection
with the Merger.     (x)   The Registration Statement stated that “[i]n
performing its evaluation analysis, Barclays has analyzed data under four
different Partnership operating and financial scenarios...” which were based on
BPL’s “Long-Term Plan.” However, the JR Garrett Complaint alleged that it did
not disclose what the Long Term Plan is and if it was different from the “Base
Case” financial scenario or management’s projections.     (xi)   The
Registration Statement stated “Barclays performed a discounted cash flow
analysis of projected free cash flows to each of the Partnership and Holdings
for the fiscal year beginning April 1, 2010 and ending December 31, 2014. For
Cases I [Base Case], II [No Acquisitions] and III [Downside], Barclays assumed
discount rates ranging from 10% to 12%. For Case IV [Upside], Barclays assumed
discount rates ranging from 11% to 13%.” However, the JR Garrett Complaint
alleged that it did not disclose how Barclays arrived at its assumed discount
rate ranges, why Barclays used a different discount rate for Case IV, and why it
used a higher discount rate range for the Upside case and not a lower range for
the Downside case.     (xii)   In further connection with Barclays’ discounted
cash flow analysis, the JR Garrett Complaint alleged that the Registration
Statement did not disclose what yields were implied by Barclays’ terminal
multiple assumptions and why Barclays used different terminal multiples for Case
IV.     (xiii)   In connection with Barclays’ Comparable Company Analysis, the
JR Garrett Complaint alleged that the Registration Statement did not disclose
the screening and selection criteria Barclays used to select public company
samples for both BGH and BPL or the company-by-company pricing multiples.    
(xiv)   In connection with Barclays’ Comparable Transaction Analysis, the JR
Garrett Complaint alleged that the Registration Statement did not disclose
transaction-by-transaction pricing multiples for both samples (i.e., the sample
for BGH and the sample for BPL).     (xv)   The JR Garrett Complaint alleged
that Barclays’ Research Analyst Price Targets analysis did not disclose how many
price targets were included in the samples, or whether or not they were all
issued since the respective companies’ most recent financial disclosures, or are
some based on older information.

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  (xvi)   The JR Garrett Complaint alleged that Barclays’ Premiums Paid Analysis
did not disclose how the transactions were screened, the
transaction-by-transaction premiums, or why the sample size was smaller and
differed from Credit Suisse’s samples. Moreover, the JR Garrett Complaint
alleged that the Registration Statement did not disclose whether or not any of
the samples were intentionally excluded by Barclays.     (xvii)   In connection
with the Selected Companies Analysis performed by Credit Suisse, the JR Garrett
Complaint alleged that the Registration Statement did not disclose why the
sample of selected companies chosen by Credit Suisse differed from Barclays’
sample. Moreover, the JR Garrett Complaint alleged that it did not disclose the
screening and selection criteria Credit Suisse used to select public company
samples for both BGH and BPL, or the company-by-company pricing multiples.    
(xviii)   The JR Garrett Complaint alleged that the Registration Statement did
not disclose why Credit Suisse’s discount rate ranges are materially different
than Barclays’ and why Barclays uses terminal multiples, whereas Credit Suisse
calculated terminal values by using exit-yield assumptions.     (xix)   In
connection with the Selected Transactions Analysis performed by Credit Suisse,
the JR Garrett Complaint alleged that the Registration Statement did not
disclose why Credit Suisse’s sample differs substantially from (and is smaller
than) Barclays’ sample, nor did it disclose the selection criteria and
transaction-by-transaction pricing multiples.     (xx)   In connection with the
Premiums Paid Analysis performed by Credit Suisse, the JR Garrett Complaint
alleged that the Registration Statement did not disclose how the transactions
were screened, the transaction-by-transaction premiums, why the sample size was
smaller than Barclays, and whether or not any samples were intentionally
excluded.

The Steward Complaint alleged, inter alia, that the following information,
alleged by Steward to be material, was not disclosed in the Registration
Statement:

  (i)   With regard to Barclays’s Discounted Cash Flow Analysis, the Steward
Complaint alleged as follows:

  a)   The Registration Statement failed to provide any definition of free cash
flow used in this analysis. This information is necessary to determine how free
cash flow compares to distributable cash flow.

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  b)   There was no disclosure in the Registration Statement of the
methodologies and assumptions used to determine the discount rate ranges used in
each of the 4 cases, for each company.     c)   The Registration Statement
failed to disclose the methodologies and assumptions used to determine the
terminal multiples used in each of the 4 cases, for each company.     d)   The
Registration Statement failed to disclose the process, assumptions and
methodologies used to determine the value of $4.6mm for the 80,000 Partnership
LP Units held by Holdings.

  (ii)   With regard to Barclays’s Comparable Company Analysis, the Steward
Complaint alleged as follows:

  a)   The Registration Statement failed to provide any explanation for the lack
of control premium being added to get an implied value of Holdings.     b)   The
Registration Statement failed to provide any explanation as to why Holdings and
Partnership were valued using different multiples (Holdings valued using
multiples of distributable cash flow, distributions, and yield, but Partnership
was valued using multiples of EBITDA, last quarter annualized cash distribution
yield and distributable cash flow yield).

  (iii)   With regard to Barclays’s Comparable Transaction Analysis, the Steward
Complaint alleged as follows:

  a)   The Registration Statement failed to disclose why a Comparable
Transaction Analysis was performed on Partnership, even though there was no
change of control contemplated by the Proposed Transaction.     b)   The
Registration Statement failed to disclose why Holdings and Partnership were
valued using different multiples (Holdings valued using multiples of LTM
distributable cash flow, 1-yr forward distributable cash flow, and latest
quarter annualized distributions, but Partnership was valued using multiples of
LTM EBITDA, LTM EBIT, LTM distributable cash flow, LTM net income).

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  (iv)   With regard to Credit Suisse’s Selected Companies Analysis, the Steward
Complaint alleged as follows:

  a)   The Registration Statement failed to disclose why no control premium was
added to get an implied value of Holdings.     b)   There was no disclosure in
the Registration Statement of the actual multiples selected and applied to
Holdings or Partnership.     c)   There was no disclosure in the Registration
Statement of the individually concluded values for Holdings and Partnership.

  (v)   With regard to Credit Suisse’s Discounted Cash Flow Analysis, the
Steward Complaint alleged as follows:

  a)   The Registration Statement failed to disclose the definition of levered
free cash flow used.     b)   The methodologies and assumptions used to
determine the appropriate discount rates were not disclosed in the Registration
Statement.     c)   There was no disclosure in the Registration Statement of the
individually concluded values for Holdings and Partnership.

  (vi)   With regard to Credit Suisse’s Selected Transactions Analysis, the
Steward Complaint alleged as follows:

  a)   The Registration Statement failed to disclose the actual multiples
selected and applied to either Holdings or Partnership. There was no disclosure
of which multiples from the Selected Companies Analysis were applied to
Partnership, or how they differed from the multiples that were applied under the
Selected Companies Analysis.     b)   The Registration Statement failed to
disclose the individually concluded values for Holdings and Partnership.

  (vii)   The Steward Complaint alleged that the Registration Statement failed
to disclose the fees that the financial advisors will be receiving.
Specifically, the Registration Statement stated that Barclays will receive a
“customary fee”, a portion of which was paid upon rendering their opinion, and a
substantial portion of which is contingent upon consummation. The Steward
Complaint alleged that the specific amounts of the total fee and

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      the contingent portion were not disclosed. According to the Registration
Statement, Credit Suisse will receive a “customary fee”, a “substantial portion”
of which is contingent upon consummation. The Steward Complaint alleged that the
specific amounts of the total fee and the contingent portion are not disclosed.
Also, the Steward Complaint alleged that the amount of fees earned by Credit
Suisse for acting as a co-managing underwriter of an offering of debt securities
by the Partnership were not disclosed.

     WHEREAS, each of the Broadbased Complaint, the JR Garrett Complaint and the
Steward Complaint also alleged, inter alia, that by reason of Defendants’
actions, Plaintiffs and members of the Putative Class (the “Putative
Class Members”) had suffered and would suffer irreparable harm for which they
had no adequate remedy at law, and requested that the Court grant appropriate
relief for such alleged harm; and
     WHEREAS, on or about August 17, 2010, each of Broadbased, JR Garrett and
Steward filed an amended complaint in their respective actions; and
     WHEREAS, on August 19, 2010, BPL filed an amended registration statement
(the “Amended Registration Statement”); and
     WHEREAS, on or about August 24, 2010, the Court entered an order the
Parties had agreed to which, inter alia, (i) consolidated the JR Garrett Action
and the Stewart Action into the Broadbased Action, and (ii) appointed The
Brualdi Law Firm, P.C., Bull & Lifshitz, L.L.P. and Finkelstein Thompson LLP as
Interim Co-Lead Counsel and Emmons & Jackson, P.C. and Schwartz, Junell,
Greenberg & Oathout, L.L.P. as Plaintiffs’ Liaison Counsel (collectively
“Plaintiffs’ Counsel”); and
     WHEREAS, on or about September 1, 2010 Plaintiffs’ filed a First
Consolidated Amended Class Action and Derivative Complaint (the “Consolidated
Complaint”); and
     WHEREAS, the Consolidated Complaint challenged, inter alia, the Merger and
the Merger Agreement, including, but not limited to, the Company’s disclosures
in the Amended

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Registration Statement and alleged that the Board had breached its fiduciary
duties in connection therewith. Specifically, the Consolidated Complaint
alleged, inter alia, that the following information, alleged by Plaintiffs to be
material, was not disclosed in the Amended Registration Statement:

  i)   The Registration Statement stated that management of Buckeye GP and BGH
prepared projections that included expected future financial and operating
performance for BPL on a “stand-alone” basis and on a “combined” basis giving
effect to the proposed Merger. However, the Consolidated Complaint alleged that
Registration Statement was deficient because it disclosed only one set of
financial projections.     ii)   The Registration Statement stated that the
stand alone and combined projections were provided to the BPL Audit Committee
and the BGH Board and they were “revised” to reflect certain assumptions of the
BPL Audit Committee and the BGH Board. The Consolidated Complaint alleged that
the Registration Statement was deficient because it failed to disclose (a) what
the revisions were (i.e. were they higher or lower than management’s
projections) and (b) why they made said revisions.     iii)   The Registration
Statement stated that the stand-alone and combined projections were provided to
Barclays and Credit Suisse for use in connection with the preparation of their
opinions to the BPL Audit Committee and the BGH Board, respectively, and related
financial advisory services. The Consolidated Complaint alleged that the
Registration Statement was deficient because it failed to disclose whether
Credit Suisse was provided with the revised projections, the original
projections, or both.     iv)   The Registration Statement also stated that
Barclays prepared adjusted projections in conducting its financial analyses. The
Consolidated Complaint alleged that the Registration Statement was deficient
because it failed to disclose (a) what adjustments were made to management’s
undisclosed projections (i.e. were they higher or lower than management’s
projections) and (b) to which set of projections the adjustments were made.    
v)   According to the Registration Statement, projections were provided to the
BPL Audit Committee in March 2010 and the BGH Board in April 2010 and were based
on management assumptions as of the dates of their preparation and have not been
updated since that time. The Consolidated Complaint alleged that the
Registration Statement was deficient because it failed to disclose whether the
projections provided to the BPL Audit Committee and the BGH Board were the same
projections or were

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      prepared on different dates. If they were not the same, then the
Consolidated Complaint alleged that the Registration Statement was deficient
because it (a) discloses only one set of financial projections and (b) does not
specify the date on which it was prepared.     vi)   According to the
Registration Statement, during late 2009 and early 2010, BPL’s senior
management, along with its Board and the Board of BGH, discussed ways of
reducing BPL’s cost of equity capital. The Consolidated Complaint alleged that
the Registration was deficient because it failed to disclose the substance of
these discussions.     vii)   According to the Registration Statement, at a
meeting on March 8, 2010, BPL’s Audit Committee discussed potential issues
regarding any third party bid that may arise for either BPL, BGH, or both. The
Consolidated Complaint alleged that the Registration Statement was deficient
because it failed to disclose the potential issues discussed at this meeting
regarding third party bids.     viii)   According to the Registration Statement,
at a meeting on April 14, 2010, the BGH Board discussed the possible timing,
nature and content of a proposed response to the April 13th proposal, noting
that the proposed exchange ratio of .65 was insufficient. The Consolidated
Complaint alleged that the Registration Statement was deficient because it
failed to disclose (a) the basis for this determination and (b) any discussion
had regarding what exchange rate would be sufficient.     ix)   According to the
Registration Statement, on April 26, 2010, members of the BGH Board and
representatives from Credit Suisse and Latham & Watkins attended a presentation
by Buckeye GP’s senior management regarding the business and prospects of BPL
and the strategic rationale for, and financial implications of, the acquisition
of BGH by BPL. The Consolidated Complaint alleged that the Registration
Statement was deficient because it failed to disclose the substance of this
presentation.     x)   According to the Registration Statement, at meetings on
April 28, 2010 and May 24, 2010, Credit Suisse reviewed and discussed with the
BGH Board its updated preliminary financial analyses with respect to BGH, BPL
and the proposed transaction. Also, at the April 28, 2010 meeting, the BGH Board
discussed the pro forma effects of the proposed transaction. The Registration
Statement was deficient because it failed to disclose (a) the updated
preliminary financial analyses of Credit Suisse reviewed and discussed at both
meetings and (b) the pro forma effects of the proposed transaction that were
discussed at the April 28, 2010 meeting.     xi)   According to the Registration
Statement, on May 7, 2010, as directed by the BGH Board and the BPL Audit
Committee, respectively, Credit Suisse

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      and Barclays met to discuss certain aspects of the April 13, 2010 proposal
and BGH’s counterproposal and the financial assumptions underlying both
proposals. The Consolidated Complaint alleged that the Registration Statement
was deficient because it failed to disclose the substance of these discussions.
    xii)   According to the Registration Statement, at a meeting on May 18,
2010, the BPL Audit Committee discussed with its advisors possible transaction
terms, including the likelihood of a third party bid for BGH, BPL, or both. The
Consolidated Complaint alleged that the Registration Statement was deficient
because it failed to disclose the substance of the discussions regarding third
party bids.     xiii)   According to the Registration Statement, at a meeting on
May 25, 2010, the BGH Board discussed, among other things, the pro forma
consequences of the proposed transaction, an increase in the exchange ratio,
whether BGH should have an affirmative right to shop itself after signing a
definitive agreement, the universe of potential buyers for BGH and whether BGH
should be able to respond to unsolicited written proposals after signing a
definitive agreement. Following those discussions, the BGH Board decided to
counter with a proposed exchange ratio of 0.715. The BGH Board directed the
Transaction Committee to (1) continue resisting exclusivity prior to signing a
definitive agreement, (2) accept limitations on BGH’s ability to affirmatively
shop itself after the signing of a definitive agreement, (3) retain the right to
respond to unsolicited written proposals, (4) accept the proposal regarding
post-closing governance, and (5) emphasize the importance of promptly executing
a definitive agreement. The Consolidated Complaint alleged that the Registration
Statement was deficient because it failed to disclose the substance of the
discussions that led to these determinations.     xiv)   According to the
Registration Statement, on May 27, 2010, the BGH Board discussed, among other
things, the likelihood of competing proposals. The Consolidated Complaint
alleged that the Registration Statement was deficient because it failed to
disclose the conclusion reached by the BGH Board regarding the likelihood of
competing proposals and the rationale supporting that conclusion.     xv)  
According to the Registration Statement, on June 10, 2010, BGH’s Transaction
Committee gave its recommendation regarding drafts of the merger agreement and
certain related agreements and other documents, and the merger to the BGH Board.
The Consolidated Complaint alleged that the Registration Statement was deficient
because it failed to disclose the substance of the BGH Transaction Committee’s
recommendation.     xvi)   According to the Registration Statement, in its
Discounted Cash Flow Analysis, Credit Suisse calculated the net present value of
BGH and

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      BPL levered free cash flows using BGH’s and BPL’s management forecasts,
respectively. In performing this analysis, Credit Suisse applied discount rates
ranging from 7.00% to 9.25% for BGH and 6.50% and 8.25% for BPL and terminal
yield ranges of 5.0% to 6.0% for BGH and 6.5% to 7.0% for BPL based on its
Selected Companies Analysis to calculate an implied exchange ratio reference
range. The Consolidated Complaint alleged that the Registration Statement was
deficient because it failed to disclose (a) the definition of levered free cash
flow used, (b) the methodologies and assumptions used to derive the discount
rate ranges and terminal yield ranges from the Selected Companies Analysis, and
(c) the individually concluded values for BGH and BPL.     xvii)   According to
the Registration Statement, one set of projections specified “Total
Distributable Cash Flow” for 2011-2014. The Consolidated Complaint alleged that
the Registration Statement was deficient because it failed to disclose (a) how
much BPL expects to actually distribute to its LP unitholders, (b) expected
sales revenues or Earnings Before Interest Tax & Depreciation (“EBITDA), and
(c) whether the “Total Distributable Cash Flow” projections are the revised
projections or the original projections.     xviii)   The Registration Statement
provides summaries of the financial analyses conducted by Credit Suisse and
Barclays. However, the Consolidated Complaint alleged that the Registration
Statement was deficient because it failed to disclose if Credit Suisse and
Barclays relied upon the revised or original projections in performing their
analyses, in particular with respect to their discounted cash flow analyses.    
xix)   The Consolidated Complaint alleged that the Registration Statement was
deficient because, according to the Registration Statement, BPL and BGH will not
make publicly available any update or other revisions to projections to reflect
circumstances existing after the date of the projections.     xx)   According to
the Registration Statement, in its Selected Transactions Analysis, Credit Suisse
applied multiple ranges based on the Selected Transactions Analysis to
corresponding financial data for BGH and applied multiple ranges based on the
Selected Companies Analysis to corresponding financial data for BPL to calculate
an implied exchange ratio reference range. The Consolidated Complaint alleged
that the Registration Statement was deficient because it failed to disclose
(a) which multiple ranges from the Selected Transactions Analysis and the
Selected Companies Analysis were used to calculate the implied exchange ratio
reference range, (b) the type of consideration and the value of each
transaction, (c) why Credit Suisse’s sample differs substantially from (and is
smaller than) Barclays’ sample, (d) the selection criteria and

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      transaction-by-transaction pricing multiples, and (e) the individually
concluded values for BGH and BPL.     xxi)   According to the Registration
Statement, in performing its evaluation analysis, Barclays analyzed data under
four different BPL operating and financial scenarios, which were based on BPL’s
“Long-Term Plan.” The Consolidated Complaint alleged that the Registration
Statement was deficient because it failed to disclose (a) what the Long Term
Plan is and (b) if it was different from the “Base Case” financial scenario or
management’s projections.     xxii)   “Barclays performed a discounted cash flow
analysis of projected free cash flows to each of [BPL] and [BGH] for the fiscal
year beginning April 1, 2010 and ending December 31, 2014. For Cases I [Base
Case], II [No Acquisitions] and III [Downside], Barclays assumed discount rates
ranging from 10% to 12%. For Case IV [Upside], Barclays assumed discount rates
ranging from 11% to 13%.” The Consolidated Complaint alleged that the
Registration Statement was deficient because it failed to disclose (a) the
definition of free cash flow used in this analysis, (b) how Barclays arrived at
its assumed discount rate ranges, (c) why Barclays used a different discount
rate for Case IV, and (d) why it used a higher discount rate range for the
Upside case and not a lower range for the Downside case.     xxiii)   In further
connection with Barclays’ Discounted Cash Flow Analysis, the Consolidated
Complaint alleged that the Registration Statement was deficient because it
failed to disclose (a) the methodologies and assumptions used to determine the
terminal multiples, (b) what yields were implied by Barclays’ terminal multiple
assumptions and (c) why Barclays used different terminal multiples for Case IV,
and (d) the process, assumptions and methodologies used to determine the value
of $4.6mm for the 80,000 BPL LP Units held by BGH.     xxiv)   In connection
with Barclays’ Comparable Company Analysis, the Consolidated Complaint alleged
that the Registration Statement was deficient because it failed to disclose
(a) the screening and selection criteria Barclays used to select public company
samples for both BGH and BPL, (b) the company-by-company pricing multiples, (c)
transaction-by-transaction pricing multiples for both samples (i.e., the sample
for BGH and the sample for BPL), (d) why Barclays did not add a control premium
to get an implied value of BGH, and (e) why BGH and BPL were valued using
different multiples (BGH was valued using multiples of distributable cash flow,
distributions, and yield, but BPL was valued using multiples of EBITDA, last
quarter annualized cash distribution yield and distributable cash flow yield).

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  xxv)   In connection with Barclays’ Comparable Transactions Analysis, the
Consolidated Complaint alleged that the Registration Statement was deficient
because it failed to disclose (a) why this type of analysis was performed on BPL
when there was no change of control contemplated by the Sale Agreement and
(b) why BGH and BPL were valued using different multiples (BGH was valued using
multiples of LTM distributable cash flow, 1-yr forward distributable cash flow,
and latest quarter annualized distributions, but BPL was valued using multiples
of LTM EBITDA, LTM EBIT, LTM distributable cash flow, LTM net income).     xxvi)
  In connection with Barclays’ Research Analyst Price Targets Analysis, the
Consolidated Complaint alleged that the Registration Statement was deficient
because it failed to disclose (a) how many price targets are included in the
samples, and (b) whether they were all issued since the respective companies’
most recent financial disclosures, or whether some are based on older
information.     xxvii)   In connection with Barclays’ Premiums Paid Analysis,
the Consolidated Complaint alleged that the Registration Statement was deficient
because it failed to disclose (a) how the transactions were screened, (b) the
transaction-by-transaction premiums, (c) why the sample size was smaller and
differed from Credit Suisse’s samples, and (d) whether any samples were
intentionally excluded by Barclays.     xxviii)   In connection with the
Premiums Paid Analysis performed by Credit Suisse, the Consolidated Complaint
alleged that the Registration Statement was deficient because it failed to
disclose (a) how the transactions were screened, (b) the
transaction-by-transaction premiums, (c) why the sample size differed from that
of Barclays’, and (d) whether any samples were intentionally excluded.     xxix)
  In connection with the Selected Companies Analysis performed by Credit Suisse,
the Consolidated Complaint alleged that the Registration Statement was deficient
because it failed to disclose (a) why no control premium was added to get an
implied value of BGH (b) why the sample of selected companies chosen by Credit
Suisse differs from Barclays’ sample and (b) the screening and selection
criteria Credit Suisse used to select public company samples for both BGH and
BPL, (c) the actual multiples selected and applied to BGH or BPL, and (d) the
individually concluded values for BGH and BPL.     xxx)   The Consolidated
Complaint alleged that the Registration Statement was deficient because it
failed to disclose (a) why Credit Suisse’s discount rate ranges are materially
different than Barclays’ and (b) why Barclays uses terminal multiples, whereas
Credit Suisse calculated terminal values by using exit-yield assumptions.

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  xxxi)   According to the Registration Statement, Credit Suisse and its
affiliates may acquire, hold or sell, for Credit Suisse’s and its affiliates own
accounts and the accounts of customers, equity, debt and other securities and
financial instruments (including bank loans and other obligations) of BGH, BPL
and any other company that may be involved in the merger, as well as provide
investment banking and other financial services to such companies. The
Consolidated Complaint alleged that the Registration Statement was deficient
because it failed to disclose the extent of Credit Suisse’s and its affiliates’
interests in BGH, BPL, or any other company involved in the merger.     xxxii)  
According to the Registration Statement, Credit Suisse will receive a customary
fee for its services, a substantial portion of which is contingent upon the
consummation of the merger. Credit Suisse also became entitled to receive a fee
upon the rendering of its opinion. The Consolidated Complaint alleged that the
Registration Statement was deficient because it failed to disclose the value of
the fees to be paid to Credit Suisse, including the amount of fees which is
contingent upon the consummation of the Sale Agreement.     xxxiii)   According
to the Registration Statement, Barclays will receive a customary fee for its
services, a portion of which was paid upon rendering its opinion and a
substantial portion of which is contingent upon the consummation of the proposed
merger. The Consolidated Complaint alleged that the Registration Statement was
deficient because it failed to disclose the value of the fees to be paid to
Credit Suisse, including the amount of fees which is contingent upon the
consummation of the Sale Agreement.     xxxiv)   According to the Registration
Statement, Credit Suisse and its affiliates have in the past provided investment
banking and other financial services to BGH, BPL, and certain of their
affiliates for which Credit Suisse and its affiliates have received
compensation, including, during the last two years, having acted as a
co-managing underwriter of an offering of debt securities by BPL. Credit Suisse
and its affiliates may have provided other financial advice and services, and
may in the future provide financial advice and services, to BGH, BPL, and their
respective affiliates for which Credit Suisse and its affiliates have received,
and would expect to receive, compensation. The Consolidated Complaint alleged
that the Registration Statement was deficient because it failed to disclose
(a) the affiliates of BGH and BPL to which Credit Suisse has provided services,
(b) the amount of fees that Credit Suisse has received for services it has
provided to BGH, BPL, and their respective affiliates, (c) the amount of fees
that Credit Suisse has an expectation of receiving for future services provided
to BGH, BPL, and their affiliates, (d) to the extent that Credit Suisse has
provided services to Kelso, ArcLight, or MainLine, the amount of fees received
therefrom, and (e) to the extent that Credit Suisse expects

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      to provide services to Kelso, ArcLight, or MainLine, the amount of fees
expected to be received therefrom.     xxxv)   According to the Registration
Statement, the BGH Board interviewed Credit Suisse to serve as financial advisor
to BGH in connection with the Merger and retained Credit Suisse because of its
“knowledge and experience with respect to M&A transactions and the energy
industry generally, as well as Credit Suisse’s experience advising MLPs and
other companies with respect to transactions similar to the proposed
transaction...” The Consolidated Complaint alleged that the Registration
Statement was deficient because it failed to disclose if Credit Suisse was the
only firm considered by the BGH Board, and if it was, why other firms were not
interviewed.

     WHEREAS, the Consolidated Complaint further alleged, inter alia, that by
reason of Defendants’ actions, BGH, Plaintiffs and the Putative Class Members
had suffered and would suffer irreparable harm for which they had no adequate
remedy at law, and requested that the Court grant appropriate relief for such
alleged harm; and
     WHEREAS, on September 14, 2010, BPL filed a second amended registration
statement (the “Second Amended Registration Statement”); and
     WHEREAS, on or about September 21, 2010 Plaintiffs served (i) Notice of
Depositions to take the deposition of each member of the Board and
(ii) Plaintiffs’ First Set of Requests for the Production of Documents to
Defendants; and
     WHEREAS, on or about September 24, 2010, the Partnership Defendants and the
BGH Defendants separately filed their respective Answer and Affirmative Defenses
to the Consolidated Complaint; and
     WHEREAS, on or about September 27, 2010, the Parties entered into a Rule 11
Agreement which provided, inter alia, as follows:

  (i)   Defendants agreed to cooperate in jointly approaching the Court to
schedule a hearing date for Plaintiffs’ temporary injunction motion to occur on
or prior to November 9, 2010 (and no earlier than November 1, 2010), and
Defendants represented that the sale of BGH to BPL or any of its affiliates will
not be consummated before November 16, 2010,

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  (ii)   Defendants agreed to produce the following documents to counsel for
Plaintiffs by September 30, 2010: (a) all board and board committee minutes
(board being defined as the board of Mainline from meetings where the
Transaction or any alternative to the Transaction was discussed; (b) all
documents and presentation materials provided to any MainLine Board member in
conjunction with consideration of the Transaction or any alternative to the
Transaction; (c) all formal communications (excluding email communications and
materials subject to attorney-client privilege) between or among BGH, MainLine,
any MainLine Board member, Credit Suisse, or other advisors to MainLine or BGH
on the one hand and/or BPL (including Buckeye GP LLC or its board members)
and/or any of its advisors on the other hand; (d) all agreements between any of
the individual defendants and any entity defendant concerning (1) how the
individual’s BGH units will be voted in connection with the Transaction, or (2)
the terms of the individual’s employment with any entity defendant (to the
extent those terms are not reflected in publicly available documents).     (iii)
  Defendants agreed to produce the following individuals for deposition by
Plaintiffs (a) John F. Erhard, (b) Frank J. Loverro, (c) Frank S. Sowinski. and
(d) a knowledgeable representative of Credit Suisse. Defendants also agreed that
if there were relevant questions that any of those witnesses couldn’t answer and
it appeared that Forrest E. Wylie would have knowledge of their subject matter,
then Plaintiffs may depose Mr. Wylie.     (iv)   Plaintiffs agreed to produce
the following documents to counsel for Defendants within seven days after the
Rule 11 Agreement was fully executed: (a) documents sufficient to demonstrate
that each of them owned BGH units continuously between June 11, 2010 and the
present; (b) documents demonstrating any purchases or sales of BGH units in
which they have engaged between June 11, 2010 and the present; (c) all documents
relied upon in making their decision(s) to purchase or sell BGH units.     (v)  
Plaintiffs agreed that the following Plaintiffs would be made available for
deposition by Defendants (a) a knowledgeable representative of the JR Garrett
Trust, (b) Henry James Steward and (c) a knowledgeable representative of
Broadbased Equities.     (vi)   The parties agreed to a temporary injunction
briefing schedule so that Plaintiffs’ Motion for a Temporary Injunction (the “TI
Motion”) would be heard by the Court following discovery.

     WHEREAS, the Parties have produced the documents they agreed to produce
pursuant to the Rule 11 Agreement; and

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     WHEREAS, on or about September 28, 2010, BPL and BGH filed with the SEC and
thereafter mailed to their respective unitholders a prospectus (the
“Prospectus”) and a definitive joint proxy statement (the “Definitive Proxy
Statement”) in connection with seeking unitholder votes on the Merger Agreement;
and
     WHEREAS, on or about September 29, 2010 the BGH Defendants and the
Partnership Defendants filed separate motions for special exceptions and summary
judgment, which motions were set for hearing on November 1, 2010; and
     WHEREAS, between approximately September 11, 2010 and October 29, 2010,
counsel for the Defendants and Plaintiffs’ Interim Co-Lead Counsel engaged in
good faith discussions with regard to the possible settlement of the Action,
which discussions included comments by Plaintiffs’ Interim Co-Lead Counsel that
precipitated the disclosure of additional information in a supplement that BGH
will file with the Securities and Exchange Commission prior to November 1, 2010
(the “Supplement”) pursuant to the settlement agreement; and
     WHEREAS, after lengthy negotiations, the Parties reached an agreement in
principle concerning the proposed settlement of the Action, which is
memorialized in this MOU; and
     WHEREAS, Defendants deny all allegations of wrongdoing, fault, liability or
damage to Plaintiffs, the Putative Class, or derivatively to BGH, deny that they
engaged or are engaged in any wrongdoing or violation of law or breach of duty,
deny that they acted improperly in any way, believe that they acted properly and
fully complied with their legal obligations at all times, believe that the
Registration Statement, the Amended Registration Statement, the Second Amended
Registration Statement, the Prospectus and the Definitive Proxy Statement
contain all material information required to be disclosed and contain no
material misstatements or omissions, and believe the Action has no merit, but
wish to settle the Action on the terms and

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conditions stated in this MOU in order to eliminate the burden and expense of
further litigation and to put the claims to be released hereby to rest finally
and forever, without in any way acknowledging any wrongdoing, fault, liability
or damages to Plaintiffs, the Putative Class, or BGH; and
     WHEREAS, all Parties recognize the time and expense that would be incurred
by further litigation in this matter and the uncertainties inherent in such
litigation; and
     WHEREAS, the Parties to this MOU have reached an agreement in principle
providing for the settlement of the Action, subject to the approval of the Court
and consummation of the Merger, on the following terms:
     NOW, THEREFORE, IT IS HEREBY STIPULATED AND AGREED, by and among the
parties hereto:
     1. In consideration for the full settlement and release of all Settled
Claims (as defined below), Defendants agree to disclose the information attached
in Exhibit A in a letter to the unitholders of BGH and BPL, which will be filed
with the SEC and mailed to the unitholders. Neither Plaintiffs nor Plaintiffs’
Counsel shall seek additional disclosures as a condition of the Settlement
beyond those specified in Exhibit A. In addition, if there is a change in
circumstances subsequent to the execution of this Memorandum that renders the
existing disclosures materially inadequate (after taking into account the total
mix of information already available to the unitholders) Plaintiffs’ Counsel
shall notify Defendants in writing of the inadequacy of the disclosure within
three days. Plaintiffs’ notification shall specify specifically what information
Plaintiffs contend must be disclosed. In any event, Defendants shall notify
Plaintiffs’ Counsel within 5 business days after Plaintiffs’ notice if they are
unwilling to make the additional disclosures requested by Plaintiffs. Plaintiffs
agree that they would only be entitled to attorneys

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fees in connection with such additional disclosures if Defendants notify
Plaintiffs’ Counsel in writing they are unwilling to make any additional
disclosures, and those additional disclosures are subsequently made.
     2. Defendants acknowledge that, despite their belief that the actions they
are taking to achieve settlement are not necessary, the pendency and prosecution
of the Action and the negotiations between the parties’ counsel resulted in
Defendants’ agreement to settle the action and make the additional disclosures
referred to in paragraph 1.
     3. In further consideration for the full settlement and release of all
Settled Claims (as defined below), Defendants agree to reduce the termination
fee, described in Paragraph 9.1 of the Merger Agreement, payable by BGH to BPL
under the circumstances described in the Merger Agreement (the “Termination
Fee”) from $29,000,000.00 to $22,000,000.00.
     4. Defendants acknowledge that, despite their belief that the actions they
are taking to achieve settlement are not necessary, the pendency and prosecution
of the Action and the negotiations between the parties’ counsel resulted in
Defendants’ agreement to reduce the Termination Fee described in paragraph 3
above.
     5. Plaintiffs acknowledge and agree that the Parties to the Merger
Agreement may negotiate other and further amendments or modifications to the
Merger Agreement prior to the effective date of the Merger to facilitate the
consummation of the Merger. Plaintiffs agree that they will not challenge or
object to any such amendments or modifications so long as they do not materially
and adversely impact the rights that the BGH unitholders would have pursuant to
the Settlement and/or the Merger Agreement.
     6. Defendants (or their successor(s) in interest) will bear the cost and
administrative responsibility of notice to the class members in connection with
the settlement of the Action.

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     7. The Parties will negotiate in good faith and use their reasonable best
efforts to agree upon, execute and present to the Court an appropriate
stipulation of settlement (the “Stipulation”) and such other documentation as
may be required in order to obtain Final Approval of the Settlement (as defined
in paragraph 9 herein) and the dismissal with prejudice of the Action upon the
terms set forth in this MOU. The Stipulation will expressly provide, inter alia:
          (a) for certification, for settlement purposes only, pursuant to Texas
Rule of Civil Procedure 42, of a class consisting of all persons (other than
Defendants and their immediate families, heirs and assigns) who owned units of
BGH at any time from and including June 11, 2010 through and including the
Effective Time (as defined in the Merger Agreement), including, to the extent
acting as such, any and all of their respective successors in interest,
predecessors, representatives, trustees, executors, administrators, officers,
directors, employees, heirs, assigns or transferees, immediate and remote, or
any person or entity acting for or on behalf of, or claiming under any of them,
and each of them (the “Class”);
          (b) for entry of a judgment dismissing the Action with prejudice and,
except as set forth in paragraphs 6 and 8, without costs to any party;
          (c) for the complete discharge, dismissal with prejudice on the
merits, settlement and release of, all claims, demands, actions or causes of
action, matters and issues, whether known or unknown, that have been, could have
been, or in the future can or might be asserted in the Action or in any court,
tribunal or proceeding by or on behalf of the Plaintiffs in the Action and any
and all of the members of the Class, whether individual, class, derivative,
representative, legal, equitable of any other type or in any other capacity
against any and all Parties in the Action and their current and former
directors, officers, employees, partners, agents,

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affiliates, subsidiaries, parents, successors or assigns, as well as all counsel
representing the Parties in the Action (the “Released Persons”), whether or not
any such Released Persons were named, served with process or appeared in the
Action, which the Plaintiffs or any member of the Class ever had, now have, or
hereafter may have arising out of, relating to or in connection with the
allegations, facts, events, transactions, acts, occurrences, statements,
representations, misrepresentations or omissions set forth or referred to in the
Action or otherwise related to (i) the Merger, or the Merger Agreement or any
amendment thereto; (ii) any legal obligations of any of the Released Persons in
connection with the Merger; (iii) the negotiations in connection with the
Merger, Merger Agreement or any amendment thereto, or (iv) the Registration
Statement, the Amended Registration Statement, the Second Amended Registration
Statement, the Prospectus and the Definitive Proxy Statement; and (v) the Claims
set forth in the Action (the “Settled Claims”). Settled Claims do not include
claims to enforce the Settlement or any claim by any Defendant (including any
nominal Defendant) against any insurance carrier. Settled Claims do not include
federal securities law claims that are unrelated to the Merger, the Merger
Agreement, or the transactions and disclosures relating thereto.
          (d) that Defendants, including any and all of their respective
successors in interest, predecessors, representatives, trustees, executors,
administrators, heirs, assigns or transferees, immediate and remote, and any
person or entity acting for or on behalf of, or claiming under any of them, and
each of them, release Plaintiffs, Interim Co-Lead Counsel, Plaintiffs’ Liaison
Counsel and any firms associated with them, including any partners, principals,
associates and/or employees of the same (collectively “Plaintiffs’ Counsel”)
from any and all claims arising out of or relating to their filing and
prosecution of the Action. Settled Claims do not include claims to enforce the
Settlement or any claim by any Defendant (including any

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nominal Defendant) against any insurance carrier;
          (e) that the releases contemplated by the Settlement extend to claims
that Defendants and Plaintiffs for themselves and on behalf of the Class do not
know or suspect to exist at the time of the release, which if known, might have
affected the decision to enter into the release or to object or not object to
the Settlement (the “Unknown Claims”). Plaintiffs, Defendants and each member of
the Putative Class shall be deemed to waive, and shall waive and relinquish to
the fullest extent permitted by law any and all provisions, rights and benefits
conferred by any law of the United States or any state or territory of the
United States, or principle of common law, which governs or limits a person’s
release of Unknown Claims; further (i) the Plaintiffs, for themselves and on
behalf of the Class and Defendants shall be deemed to waive, and shall waive and
relinquish, to the fullest extent permitted by law, the provisions, rights and
benefits of Section 1542 of the California Civil Code which provides as follows:
A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR
SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH
IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH
THE DEBTOR
(ii) Plaintiffs, for themselves and on behalf of the Class and Defendants also
shall be deemed to waive any and all provisions, rights and benefits conferred
by any law of any state or territory of the United States, or principle of
common law, which is similar, comparable or equivalent to California Civil Code
§ 1542; and (iii) Plaintiffs, for themselves and on behalf of the Class
acknowledge that members of the Class may discover facts in addition to or
different from those that they now know or believe to be true with respect to
the subject matter of this release, but that

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it is their intention, as Plaintiffs and on behalf of the Class to fully,
finally and forever settle and release any and all claims released hereby known
or unknown, suspected or unsuspected, which now exist, or heretofore existed, or
may hereafter exist, and without regard to the subsequent discovery or existence
of such additional or different facts. Plaintiffs and Defendants acknowledge,
and the members of the Class shall be deemed by operation of the entry of a
final order and judgment approving the Settlement to have acknowledged, that the
foregoing waiver was separately bargained for and is a key element of the
Settlement of which this release is a part;
     (f) that all proceedings in the Action, except for settlement-related
proceedings, shall be suspended pending the Final Approval of the Settlement by
the Court;
     (g) that the Settlement is conditioned on the consummation of the Merger;
     (h) that in the event the Settlement does not become final for any reason,
Defendants reserve the right to oppose the certification of any class in future
proceedings and the Parties reserve all other rights, claims and defenses that
the Parties could have raised or asserted had this MOU not been entered into by
the Parties;
     (i) that each of the Defendants has denied and continues to deny that any
of them have committed or have threatened to commit any wrongdoing, violation of
law or breaches of any duty of any kind to Plaintiffs, the Class, BGH, or anyone
else; and
     (j) that the Defendants are entering into the Settlement to eliminate the
uncertainty, distraction, burden, risk and expense of further litigation.
     8. The Stipulation will also provide that, in settlement of Plaintiff’s
derivative claims, including any claim against Defendants by Plaintiffs or
Plaintiff’s counsel for their

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attorneys’ fees and expenses as proceeds of their derivative claim under
Business Organizations Code § 153.405, and based upon the benefits that the
Settlement has and will provide derivatively to BGH, rather than continuing to
litigate this issue, the parties to this Settlement (after negotiating the other
elements of the Settlement) agreed that, subject to Final Court Approval of the
Settlement, Defendants (or their insurers) will cause to be paid as set forth
below a cash payment in the amount of $900,000 United States dollars, and that
Plaintiffs and Plaintiffs’ Counsel agreed that they will not seek any further
award of attorneys’ fees or expenses relating to this action (or the
previously-filed actions described herein) on any theory. The Stipulation will
provide that this payment in settlement of the derivative claim will be made
within ten (10) calendar days after approval of the settlement by the Court is
final and no longer subject to further appeal or review, whether by affirmance
on or exhaustion of any possible appeal or review, writ of certiorari, lapse of
time or otherwise. The amounts paid pursuant to this paragraph will not be paid
out of amounts that would otherwise have been paid to the members of the
Putative Class. At the time the cash payment is made it shall be paid by check,
made payable to The Brualdi Law Firm, P.C. as escrow agent for Plaintiffs’
Counsel. Counsel for Defendants and Plaintiffs’ Counsel negotiated the
provisions herein related to the cash payment after the Parties had agreed to
the other substantive terms of the MOU contained herein.
     9. Consummation of the Settlement is subject to the following, which the
parties to this MOU agree to use their best efforts to achieve: (a) satisfactory
completion of reasonable confirmatory discovery by Plaintiffs, after
consultation with Defendants and subject to entry of a confidentiality order, to
confirm the fairness and adequacy of the settlement contemplated herein, which
the parties contemplate will include the interviews of Frank Sowinsky, Frank
Loverro and a knowledgeable representative of Credit Suisse, BGH’s financial
advisor; (b) the drafting and

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execution of a formal Stipulation of Settlement and such other documentation as
may be required to obtain Final Approval by the Court of the Settlement (the
“Settlement Documents”), by counsel for the Parties (provided that the Parties
comply with their obligation to act in good faith to negotiate and execute such
formal Settlement Documents); (c) consummation of the Merger; (d) satisfaction
of any other conditions set forth herein; and (e) Final Approval by the Court of
the Settlement and entry of a final order and judgment by the Court (and the
exhaustion of possible appeals, if any) dismissing the Action with prejudice on
the merits and with each party to bear its own costs (except for the costs set
forth in paragraphs 6 and 8 above). As used herein, “Final Approval” of the
Settlement means that the Court has entered an order approving the Settlement
and that such order is finally affirmed on appeal or is no longer subject to
appeal and the time for any petition for reargument, appeal or review, by
certiorari or otherwise, has expired; provided, however, and notwithstanding any
provision to the contrary in this MOU, Final Approval shall not include (and the
Settlement is expressly not conditioned on) the approval of the cash payment as
provided in Paragraph 8 above and any appeal related to either.
     10. Subject to prior Court approval of the form of notice, the parties to
this MOU will present the Settlement to the Court for hearing and approval as
soon as practicable following appropriate notice to the class members and will
use their best efforts to obtain expeditiously Final Approval of the Settlement
and the dismissal of the Action with prejudice.
     11. This MOU and Stipulation shall be null and void and of no force and
effect should any of the conditions set forth herein not be met; or should
Interim Co-Lead Counsel in the Action determine in good faith that at any time
prior to Final Approval of the settlement by the Court pursuant to paragraph 9,
based upon facts learned subsequent to the execution of this MOU, the proposed
Settlement is not fair, reasonable and adequate to Class members. In such

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event, the MOU shall not be deemed to prejudice in any way the positions of the
Parties with respect to the Action nor to entitle any party to the recovery of
costs and expenses incurred to implement this MOU (except as provided in
paragraph 6 hereof for the costs of notice of the Settlement).
     12. The provisions contained in this MOU and all negotiations, discussions
and proceedings in connection with this MOU shall not be deemed or constitute a
presumption, concession or an admission by any party in the Action of any fault,
liability or wrongdoing or lack of any fault, liability or wrongdoing, as to any
facts or claims alleged or asserted in the Action, or any other actions or
proceedings, and shall not be interpreted, construed, deemed, involved, offered,
or received in evidence or otherwise used by any person in the Action, or in any
other action or proceeding, whether civil, criminal or administrative, for any
purpose, except in connection with any proceeding to enforce the terms of this
MOU. If the Settlement does not receive Final Approval, the parties shall revert
to their respective litigation positions as if this MOU never existed.
     13. The Parties agree that except as expressly provided herein, the Action
shall be stayed with respect to all Parties to the Action pending submission of
the proposed Settlement to the Court for its consideration, and Plaintiffs will
stay, and will not initiate, any other proceedings other than those incident to
the Settlement itself. The Parties also agree to use their best efforts to
prevent, stay or seek dismissal of or oppose entry of any interim or final
relief in favor of any member of the Class in any other litigation against any
of the parties to this MOU which challenges the Settlement, the Merger or the
Merger Agreement or otherwise involves a Settled Claim. Interim Co-Lead Counsel
agrees that Defendants’ time to answer or otherwise respond to any discovery
requests is extended indefinitely.

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     14. This MOU and the Stipulation are not intended to, and shall not, create
any obligation for any party to consummate the Merger and shall not modify in
any way any party’s rights or obligations concerning the Merger.
     15. Plaintiffs and their counsel in the Action represent and warrant that
none of Plaintiffs’ claims or causes of action referred to in any complaint in
the Action or this MOU has been assigned, encumbered or in any manner
transferred in whole or in part, and that Plaintiffs are and have been
unitholders of BGH throughout the period covered by the Complaint and this
Settlement.
     16. This MOU constitutes the entire agreement among the Parties and
supersedes and preempts any prior agreements and understandings concerning the
subject matter hereof, and may not be amended, nor any of its provisions waived,
except by a writing signed by all of the Parties hereto.
     17. This MOU, and all rights and powers granted hereby, shall be binding on
and inure to the benefit of the Parties hereto (including all Putative
Class Members) and their respective agents, executors, heirs, successors and
assigns.
     18. This MOU shall be governed by, and construed in accordance with the
laws of the State of Delaware, exclusive of choice of law provisions.
     19. This MOU will be executed by counsel for the Parties, each of whom
represent and warrant that they have the authority from their clients to enter
this MOU.
     20. This MOU may be signed in any number of counterparts with the same
effect as if the signatures thereto and hereto were upon the same instrument.
Signed signature pages of this MOU may be delivered by facsimile, e-mail or PDF
transmission, which will constitute complete delivery without any necessity for
delivery of originally signed signature pages in order for this

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to constitute a binding agreement.
     Entered into this 29th day of October, 2010 by:

         
Interim Co-Lead Counsel for Plaintiffs
  Defendants Buckeye    

THE BRUALDI LAW FIRM, P.C.
  Partners LP, Buckeye GP LLC,
and Grand Ohio, LLC by their Counsel    
 
       
 
       
 
        /s/ Richard B. Brualdi   MORGAN, LEWIS & BOCKIUS, LLP
     
Richard B. Brualdi
  /s/ Marc J. Sonnenfeld    
29 Broadway, Suite 2400
 
Marc J. Sonnenfeld
   
New York, New York 10006
  Timothy D. Katsiff    
Telephone: (212) 952-0602
  1701 Market St.    
Facsimile: (212) 952-0608
  Philadelphia, PA 19103-2921    
 
BULL & LIFSHITZ, LLP
  Telephone: (215) 963-5572
Facsimile: (215) 963-5001    
 
        /s/ Joshua M. Lifshitz        
Joshua M. Lifshitz
  MORGAN, LEWIS & BOCKIUS, LLP    
18 East 41st Street
  Winstol Carter, Jr.    
New York, New York 10017
  1000 Louisiana St., Suite 4000    
Telephone: (212) 213-6222
  Houston, Texas 7002-5006    
Facsimile: (212) 213-9405
  Telephone: (713) 890-5140    

FINKELSTEIN THOMPSON LLP
  Facsimile: (713) 890-5001    

        /s/ Donald J. Enright   Defendants Forrest E. Wylie,    
Donald J. Enright
  Christopher L. Collins, John F.    
1050 30th Street, N.W.
  Erhard, Joseph A. LaSala, Jr.,    
Washington, D.C. 20007
  Frank J. Loverro, Frank S.    
Telephone: (202) 337-8000
  Sowinski, Robb E. Turner, Martin A.    
Facsimile: (202) 337-8090
  White, Buckeye GP Holdings L.P.,    
 
  BGH GP Holdings, LLC, Mainline    
 
  Management LLC, ArcLight Capital    
 
  Partners, LLC, Kelso & Company by    
 
  their Counsel    
 
 
LATHAM & WATKINS, LLP
     
 
  /s/ Blair Connelly          
 
  Blair Connelly    
 
  885 Third Avenue    
 
  New York, New York 10022-4834    
 
  Telephone: (212) 906-1200    
 
  Facsimile: (212) 751-4864

Derrick B. Farrell    

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  LATHAM & WATKINS, LLP    
 
  555 Eleventh Street, NW, Suite 1000    
 
  Washington, D.C. 20004-1304    
 
  Telephone: (202) 637-2328    
 
  Facsimile: (202) 637-2201    

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