Document:

Exhibit 10.1

AMENDED
AND RESTATED EMPLOYMENT AND SEVERANCE AGREEMENT

This Amended and Restated
Employment and Severance Agreement, dated as of June 25, 2007, by and among
Stephen C. Muther (“Muther”), Buckeye GP Holdings L.P., a Delaware limited
partnership and the successor to Glenmoor LLC, (“BGH”), and Buckeye Pipe Line
Services Company, a Pennsylvania corporation (“BPLSC”), amends and restates the
Amended and Restated Employment and Severance Agreement, dated as of May 4,
2004, between Glenmoor LLC and Muther (the “Prior Agreement”).

WHEREAS, Muther has served
as an executive of certain of the BPL Entities (defined below) pursuant to the
Prior Agreement and its predecessor agreements;

WHEREAS, in accordance with
past practices, Muther shall continue to be an employee of, and receive
benefits through, BPLSC;

WHEREAS, BGH is entering
into this Agreement to guarantee performance of BPLSC’s obligations under this
Agreement;

WHEREAS, in connection with
the transactions consummated by the Purchase Agreement (defined below), Muther,
BGH and BPLSC desire to amend and restate the Prior Agreement as set forth
herein;

NOW, THEREFORE, in
consideration of the foregoing and the mutual covenants and agreements
hereinafter set forth and intending to be legally bound hereby, the parties
hereto agree as follows:

Section 1.               Definitions

For all purposes of this
Agreement, the following terms shall have the meanings specified in this
Section unless the context clearly otherwise requires:

(a)           “BGH Entities” means BGH, MainLine Management LLC, Buckeye GP LLC,
MainLine GP, Inc., and MainLine L.P., collectively.

(b)           “BGH GP Holdings” means BGH GP Holdings, LLC, a Delaware limited
liability company, which as of the date hereof is owned by ArcLight Energy
Partners Fund III, L.P., Kelso Investment Associates VII, L.P., KEP VI, LLC and
Lehman Brothers Co. – Investment Partners, L.P.

(c)           “BPL” means Buckeye Partners, L.P., a Delaware limited
partnership.  .

(d)           “BPL Entities” means BPL, its operating partnerships and other
subsidiaries, and BPLSC, collectively.

(e)            “Board” means the board of directors or similar governing body of BGH.

(f)            “Cause” means (1) misappropriation of funds
or any act of common law fraud, theft, or embezzlement, (ii) habitual
insobriety or substance abuse, (iii) conviction of or plea of nolo contendere
to a felony or any crime involving moral turpitude, (iv) willful misconduct or
gross negligence by Muther in the performance of his duties, the willful
failure of Muther to perform a material function of Muther’s duties hereunder
or material failure to comply with any lawful directive of the Board, or Muther’s
engaging in a conflict of interest or other breach of fiduciary duty, (v)
material violation of the code of conduct of the BPL Entities and policy on
workplace harassment, and (vi) subject of an order, judicial or administrative,
obtained or issued by the Securities and Exchange Commission for any securities
violation involving fraud.

(g)           “Change of Control” shall be deemed to have taken place upon the
occurrence of any of the following events:

(i)            any Person, except the BGH Entities or the
BPL Entities, or any employee benefit plan of the BGH Entities or the BPL
Entities (or of any Affiliate or Associate thereof, or any Person or entity
organized, appointed or established by the BGH Entities or the BPL Entities for
or pursuant to the terms of any such employee benefit plan), together with all
Affiliates and Associates of such Person, shall become the beneficial owner, or
the holder of proxies, in the aggregate of 80% or more of the limited
partnership units (the “Units”) of BGH or BPL then outstanding; provided,
however, that no “Change of Control” shall be deemed to occur for purposes of
clause (i)
hereof during any period in
which any such Person, and its Affiliates and Associates, are bound by the
terms of a standstill agreement under which such parties have agreed not to
acquire more than 79% of the Units of BGH or BPL then outstanding or to solicit
proxies; or

(ii)           any Person, except one or more of the equity
owners of BGH GP Holdings as of the date hereof, or any Affiliate or Associate
of such equity owners or any employee benefit plan of the BGH Entities or the
BPL Entities (or of any Affiliate or Associate or any Person or entity
organized, appointed or established by the BGH Entities or the BPL Entities for
or pursuant to the terms of any such employee benefit plan), together with all
Affiliates and Associates of such Person, shall become the Beneficial Owner, or
the holder of proxies, in the aggregate of 51 % or more of the general partner
interests of BGH or BPL; or

(iii)          if either BGH or BPL and its respective
general partner are combined into a single entity (the “Successor”), any
Person, except one or more of the equity owners of BGH GP Holdings as of the
date hereof, or any Affiliate or Associate of such equity owners or any
employee benefit plan of the BGH Entities or the BPL Entities (or of any
Affiliate or Associate thereof or any Person or entity organized, appointed or
established by the BGH Entities or the BPL Entities for or pursuant to the
terms of any such employee benefit plan), together with all Affiliates and
Associates of such Person, shall become the Beneficial Owner, or the holder of
proxies, in the aggregate of 50% or more of the voting equity interests of the
Successor then outstanding; provided, however, that no “Change of Control”
shall be deemed to occur for purposes of clause (iii) hereof during any period
in which any such Person, and its Affiliates and Associates, are bound by the
terms of a standstill agreement under which such parties have agreed not to 

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acquire
more than 49% of the voting equity interests of the Successor then outstanding
or to solicit proxies.

For purposes of this
Agreement, the term “Person” shall have the same meaning as in Section 13(d)
and 14(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”);
the term “Affiliate” and “Associate” are used as defined in Rule 12b-2 of the
Exchange Act.

Without limiting the
foregoing, the term “Change of Control” shall be deemed to include the
transactions contemplated by the Purchase Agreement, dated as of April 3, 2007,
among Carlyle/Riverstone BPL Holdings II, L.P., certain Limited Partners of
Buckeye GP Holdings L.P. and BGH GP Holdings, LLC, as well as any subsequent
transaction satisfying the foregoing definition of a “Change of Control”.

(h)           “Employment Period” is defined in Section 13.

(i)            “General Partner” means MainLine Management
LLC.

(j)            “Good Reason Termination” means a Termination
of Employment initiated by Muther upon one or more of the following
occurrences:

(i)            any failure of BGH or BPLSC to comply with
and satisfy any of the material terms of this Agreement, including a reduction
in Compensation;

(ii)           any significant reduction by the BGH Entities
or the BPL Entities of the authority, duties or responsibilities of Muther’s
principal assignment with the BGH Entities or the BPL Entities immediately
prior to the date hereof or a reduction in Compensation; provided, however,
that this clause (ii) shall apply only in the event that such reduction occurs
following a Change of Control;

(iii)          any removal by the BGH Entities or the BPL
Entities of Muther from the employment grade or officer positions which Muther
holds immediately prior to the date hereof except in connection with promotions
to higher office; provided, however, that in the absence of a Change of Control
solely changing Muther’s reporting relationships shall not be grounds for a “Good
Reason Termination” hereunder;

(iv)          following a Change of Control, a transfer of
Muther, without his express written consent, to a location that is more than
100 miles from his principal place of business immediately preceding the Change
of Control; or

(v)           following a Change of Control, Muther
determines, in his sole discretion in the period between the beginning of the
18th month and the end of the 36th month after a Change of Control, that
circumstances have so changed that he is not willing to continue in his
position with the BGH Entities and the BPL Entities and elects a Termination of
Employment.

(k)           “Internal Revenue Code” means the Internal Revenue Code of 1986, as
amended.

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(l)            “Partnerships” means the BGH Entities and the
BPL Entities, collectively.

(m)          “Phase Out Date” means the first day of the calendar month coincident
with or next following Muther’s 65th birthday.

(n)           “Purchase Agreement” means that certain Purchase Agreement by and among
Carlyle/Riverstone BPL Holdings II, L.P., certain Limited Partners of BGH and
BGH GP Holdings, LLC, dated as of April 3, 2007.

(o)           “Subsidiary” means any entity in which the BGH Entities or the BPL
Entities, directly or indirectly, own at least a 50% interest or an
unincorporated entity of which the BGH Entities or the BPL Entities, directly
or indirectly, owns at least 50% of the profits or capital interests.

(p)           “Termination Date” means the date of receipt of the Notice of
Termination described in Section 2 hereof or any later date specified therein,
as the case may be.

(q)           “Termination of Employment” means the termination of Muther’s
employment relationship with the Partnerships, which event shall constitute a “separation
from service” under section 409A of the Internal Revenue Code.

Section 2.               Employment

(a)           During the term of this Agreement, BPLSC shall employ Muther, and
Muther shall serve, as Executive Vice President, Administration and Legal
Affairs.

(b)           During the Employment Period (as defined in Section 13), Muther shall
devote his full time and attention to the business of the Partnerships, will
act in the best interests of the Partnerships and will perform with due care
the duties and responsibilities assigned to him by the Board. Muther agrees to
cooperate fully with the Board, and not to engage in any activity that
interferes with the performance of his duties hereunder. During the Employment
Period, Muther will not hold any type of outside employment, engage in any type
of consulting or otherwise render services to or for any other person, entity
or business concern without the advance written approval of the Board.  However, it shall not be a violation of this
Agreement for Muther to (1) serve on corporate, civic, or charitable boards or
committees, except for boards or committees of a competing business, provided
that such service does not interfere with the performance of his duties and
responsibilities under this Agreement, or (2) take vacation days and reasonable
absences due to injury or illness, as set forth herein and/or permitted by the
general policies of the Partnerships.

(c)           Muther represents and covenants to BGH and BPLSC that he is not subject
or a party to any employment agreement, noncompetition covenant, nondisclosure
agreement, or any other agreement, covenant, understanding, or restriction that
would prohibit him from executing this Agreement and fully performing his
duties and responsibilities hereunder, or would in any manner, directly or
indirectly, limit or affect the duties and responsibilities hereunder.

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(d)           Muther acknowledges and agrees that he owes BGH and BPLSC a duty of
loyalty and that the obligations described in this Agreement are in addition
to, and not in lieu of, Muther’s obligations under common law.

(e)           Any salary, bonus and other compensation payments hereunder shall be
subject to all applicable payroll and other taxes.

(f)            During the term of this Agreement, BPLSC
shall pay to Muther an annualized base salary of no less than $300,000 (such
amount, as it may be increased from time to time, is hereinafter referred to as
“Compensation”) (less applicable taxes and withholdings) in consideration for
Muther’s services under this Agreement, payable in conformity with BPLSC’s
customary payroll practices for executive salaries.

Section 3.               Notice of Termination

Any Termination of
Employment shall be communicated by a Notice of Termination in accordance with
Section 15 hereof. For purposes of this Agreement, a “Notice of Termination”
means a written notice which, in the case of a Good Reason Termination by
Muther (i) indicates the specific
reasons for the termination, (ii) briefly summarizes the facts and
circumstances deemed to provide a basis for termination of Muther’s employment,
and (iii) if the Termination Date is other than the date of receipt of such
notice, specifies the Termination Date (which date shall not be more than 15 days
after the giving of such notice). In the event of a Good Reason Termination,
Muther must provide the Notice of Termination to BGH and BPLSC within 60 days
of the day that he received notice of the event creating such right and if such
event is curable, BGH and BPLSC shall have 30 days to cure. Failure to give
such Notice of Termination within such 60 day time period results in a waiver
by Muther of his right to severance under Section 4 with respect to such event.

Section 4.               Severance Compensation upon Termination

(a)           In the event of Muther’s involuntary Termination of Employment (other
than death or disability) for any reason other than Cause or in the event of a
Good Reason Termination, BPLSC shall pay to Muther, subject to the execution of
a release in form set forth as Exhibit A (the “Release”) and the
expiration of the revocation period thereunder, and subject to required
employment taxes and deductions, within 15 days after the Termination Date, a
single sum in cash equal to 3.0 multiplied by Muther’s Compensation at such
time.  Except as provided below, all
benefit coverages, retirement benefit accruals and fringe benefit eligibility
shall cease upon the Termination Date, subject to applicable rights under ERISA
and COBRA.

(b)           In the event a severance payment is made under paragraph (a), BPLSC
will provide Muther with the following payments for a period of 18 months (or
in the event that such payment was triggered by a Change of Control, 36 months)
from the Termination Date, provided, however, that this obligation shall cease
upon Muther’s obtaining new employment that provides Muther with eligibility
for medical benefits without a pre-existing condition limitation (such period
is referred to as the “Benefit Period”):

(i)            During the first 18 months of the Benefit
Period (or, if shorter or longer, during the period, within the Benefit Period,
during which Muther is eligible to 

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elect
COBRA continuation coverage under health and dental plans of BPLSC) (the “COBRA
Period”), BPLSC will pay Muther a monthly payment on the first payroll date of
each month equal to the COBRA cost of continued health and dental coverage
under health and dental plans of BPLSC pursuant to section 4980B of the
Internal Revenue Code, less the amount that Muther would be required to
contribute for health and dental coverage if Muther were an active
employee.  These payments will commence
on BPLSC’s first payroll date after the Termination Date and will continue
until the end of the COBRA Period (but not longer than the Benefit Period).

(ii)           After the COBRA Period and during the balance
of the Benefit Period, if any, BPLSC will pay Muther (or directly to the
insurer on Muther’s behalf) a quarterly payment on the first payroll day of
each calendar quarter equal to the premium cost that Muther will incur during
the quarter (but not beyond the end of the Benefit Period) to maintain health
and dental coverage that is substantially similar to the health and dental
coverage that was in effect for Muther under plans of BPLSC immediately before
such coverage ended, as reasonably determined by Muther and BPLSC, less the
amount that Muther would be required to contribute for health and dental
coverage if Muther were an active employee.

(iii)          On each date on which a payment is made under
subsection (i) or (ii) above, BPLSC will pay Muther an additional tax gross-up
amount equal to the federal, state and local income and payroll taxes, if any,
that Muther incurs on the amount paid under subsection (i) or (ii), and on the
amount paid under this subsection (iii), on that date; ; provided, however,
that for purposes of this subsection 4(b)(iii), the aggregate tax rate for the
federal, state and local income and payroll taxes above shall be assumed to be
25%.  This gross up payment will be made
with respect to each payment under subsection (i) and (ii) and will cease when
payments under subsection (i) and (ii) cease.

(c)           In the event Muther’s Phase Out Date would occur prior to 18 months (36
months if following a Change of Control) after the Termination Date, the
aggregate cash amount determined as set forth in subsection (a) above shall be
reduced to an amount equal to such aggregate cash amount multiplied by a
fraction, the numerator of which shall be the number of days from the
Termination Date to Muther’s Phase Out Date and the denominator of which shall
be 548 (1095 if following a Change of Control).

(d)           Notwithstanding any other provision of this Agreement, if Muther’s
employment with BPLSC is terminated such that Muther is entitled to severance
from BPLSC and within 60 days of such termination, the Board, in its good faith
judgment, unanimously determines that Cause existed with respect to such
termination, Muther shall not be entitled to any severance from BPLSC, and any
and all severance payments from BPLSC to Muther shall cease and any such
payments or reimbursements already made to Muther must be returned to BPLSC
within 60 days. In the event that BGH and BPLSC exercise their rights under
this Section 4(d), the Release shall be null and void and be of no force or
effect.

(e)           Any severance received by Muther under the Severance Pay Plan for
Employees of Buckeye Pipe Line Services Company, as may be amended from time to
time, or any successor severance plan, shall reduce the amounts payable under
this Agreement.

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(f)            Nothing herein is intended to preclude the
ability of the General Partner from allocating all or a portion of the amount
payable to Muther hereunder any of the BGH Entities or the BPL Entities,
subject to the governing documents of such entity.

Section 5.               Enforcement

(a)           In the event that BPLSC shall fail or refuse to make payment of any
amounts due Muther under this Agreement, BGH agrees to make such payment on
behalf of BPLSC.

(b)           In the event that BGH and BPLSC shall fail or refuse to make payment of
any amounts due Muther under Section 4 hereof within the respective time
periods provided therein, BGH shall pay to an escrow agent, who shall invest
such sum with interest to be paid to the prevailing party, any amount remaining
unpaid under Section 4. In such event, the parties shall then engage in
arbitration in the City of Philadelphia, Pennsylvania in accordance with the
National Rules for the Resolution of Employment Disputes then in effect of the
American Arbitration Association, before a panel of three arbitrators, one of
whom shall be selected by BGH and one by Muther, and the third of whom shall be
selected by the other two arbitrators. Any award entered by the arbitrators
shall be final, binding and nonappealable and judgment may be entered thereon
by either party in accordance with applicable law in any court of competent
jurisdiction. This arbitration provision shall be specifically enforceable. The
arbitrators shall have no authority to modify any provision of this Agreement
or to award a remedy for a dispute involving this Agreement other than a
benefit specifically provided under or by virtue of the Agreement. If Muther
prevails on at least one material issue which is the subject of such
arbitration, BGH shall be responsible for all of the fees of the American
Arbitration Association and the arbitrators and any expenses relating to the
conduct of the arbitration (including reasonable attorneys’ fees and expenses).
Otherwise, each party shall be responsible for his or its own expenses relating
to the conduct of the arbitration (including reasonable attorneys’ fees and
expenses) and shall equally share the fees of the American Arbitration
Association.

(c)           In the event that an arbitration under paragraph (a) takes place
following a Change of Control, BGH shall pay Muther on demand the amount
necessary to reimburse Muther in full for all reasonable expenses (including
all attorneys’ fees and legal expenses) incurred by Muther in enforcing any of
the obligations of BGH under this Agreement subject to Muther’s duty to repay
such sums to BGH in the event that he does not prevail on any material issue
which is the subject of such arbitration. 
All reimbursements shall be made in accordance with section 409A of the
Internal Revenue Code.

Section 6.               No Mitigation

Muther shall not be required
to mitigate the amount of any payment or benefit provided for in this Agreement
by seeking other employment or otherwise, nor shall the amount of any payment
or benefit provided for herein be reduced by any compensation earned by other
employment or otherwise.

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Section 7.               Non-Exclusivity of Rights

Nothing in this Agreement
shall prevent or limit Muther’s continuing or future participation in or rights
under any benefit, bonus, incentive or other plan or program provided by the
BGH Entities or the BPL Entities and for which Muther may qualify from the date
hereof through the Termination Date.

Section 8.               No Set-Off

Except as specifically
provided for herein, the obligation of BGH and BPLSC to make the payments provided
for in this Agreement and otherwise to perform their obligations hereunder
shall not be affected by any circumstances, including, without limitation, any
set-off, counterclaim, recoupment, defense or other right which the BGH
Entities or the BPL Entities may have against Muther or others.

Section 9.               Taxes

Any payment required under
this Agreement shall be subject to all requirements of the law with regard to
the withholding of taxes, filing, making of reports and the like, and BGH and
BPLSC shall use their best efforts to satisfy promptly all such requirements.

Section 10.             Confidential Information

Muther recognizes and
acknowledges that, by reason of his relationship to the Partnerships, he has
had and will continue to have access to confidential information of the
Partnerships, including, without limitation, information and knowledge
pertaining to products and services offered, innovations, designs, ideas,
plans, trade secrets, proprietary information, distribution and sales methods
and systems, sales and profit figures, customer and client lists, and
relationships between the entities (“Confidential Information”). Muther
acknowledges that such Confidential Information is a valuable and unique asset
and covenants that he will not, either during or after his employment by BPLSC,
disclose or use any such Confidential Information to any person for any reason
whatsoever without the prior written authorization of the Chairman of the
Board; unless such information is in the public domain through no fault of Muther
or except as may be required by law.

Section
11.             Non-Competition

(a)           During his employment by BPLSC and for a period of 18 months
thereafter, Muther will not, unless acting with the prior written consent of
the Chairman of the Board, directly or indirectly, own, manage, operate, join,
control or participate in the ownership, management, operation or control, or
be connected as an officer, director, employee, partner, principal, agent,
representative, consultant or otherwise with or use or permit his name to be
used in connection with, (i) any
business or enterprise that competes with the Partnerships in any business or
enterprise that contributes more than ten percent (10%) of BGH’s consolidated
gross revenues, either during his employment by BPLSC or on the Termination
Date, as applicable, in any state in which such business or enterprise is so
operated (whether or not such business is physically located within those
areas) (the “Geographic Area”), or (ii) in any business or enterprise that is a
customer of the Partnerships if BGH derives at least five percent of its 

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consolidated gross revenues
either during his employment by BPLSC or on the Termination Date, as
applicable, from such customer. It is recognized by Muther that the
Partnerships and Muther’s connection therewith is or will be involved in
activity throughout the Geographic Area, and that more limited geographical
limitations on this non-competition covenant are therefore not appropriate.
Muther also shall not, directly or indirectly, during such 18-month period (i) solicit or divert business from, or attempt
to convert any client, account or customer of the Partnerships, whether
existing at the date hereof or acquired during Muther’s employment nor (ii)
following Muther’s employment, solicit or attempt to hire any then employee of
the Partnerships.

(b)           The foregoing restriction shall not be construed to prohibit the
ownership by Muther of less than five percent (5%) of any class of securities
of any corporation which is engaged in any of the foregoing businesses having a
class of securities registered pursuant to the Exchange Act, provided that such
ownership represents a passive investment and that neither Muther nor any group
of persons including Muther in any way, either directly or indirectly, manages
or exercises control of any such corporation, guarantees any of its financial
obligations, otherwise takes any part in its business, other than exercising
his rights as a shareholder, or seeks to do any of the foregoing.

Section 12.             Equitable Relief

(a)           Muther acknowledges that the restrictions contained in Sections 10 and
11 hereof are reasonable and necessary to protect the legitimate interests of
the Partnerships, that BGH and BPLSC would not have entered into this Agreement
in the absence of such restrictions, and that any violation of any provision of
those Sections will result in irreparable injury to BGH and BPLSC. Muther
represents that his experience and capabilities are such that the restrictions
contained in Section 11 hereof will not prevent Muther from obtaining
employment or otherwise earning a living at the same general level of economic
benefit as anticipated by this Agreement. Muther further represents and
acknowledges that (i) he has been advised by
BGH and BPLSC to consult his own legal counsel in respect of this Agreement,
and (ii) that he has had full opportunity, prior to execution of this
Agreement, to review thoroughly this Agreement with his counsel.

(b)           Muther agrees that BGH and BPLSC shall be entitled to preliminary and
permanent injunctive relief, without the necessity of proving actual damages,
as well as an equitable accounting of all earnings, profits and other benefits
arising from any violation of Section 10 or 11 hereof, which rights shall be
cumulative and in addition to any other rights or remedies to which BGH or
BPLSC may be entitled. In the event that any of the provisions of Section 10 or
11 hereof should ever be adjudicated to exceed the time, geographic, service,
or other limitations permitted by applicable law in any jurisdiction, then such
provisions shall be deemed reformed in such jurisdiction to the maximum time,
geographic, service, or other limitations permitted by applicable law.

(c)           Muther irrevocably and unconditionally (i) agrees that any suit, action or other legal proceeding arising out of
Section 10 or 11 hereof, including without limitation, any action commenced by
BGH or BPLSC for preliminary and permanent injunctive relief or other equitable
relief, may be brought in the United States District Court for the Eastern
District of 

 9
 

Pennsylvania, or if such
court does not have jurisdiction or will not accept jurisdiction, in any court
of general jurisdiction in Montgomery County, Pennsylvania, (ii) consents to
the non­exclusive jurisdiction of any such court in any such suit, action or
proceeding, and (iii) waives any objection which Muther may have to the laying
of venue of any such suit, action or proceeding in any such court. Muther also
irrevocably and unconditionally consents to the service of any process,
pleadings, notices or other papers in a manner permitted by the notice
provisions of Section 15 hereof.

(d)           Muther agrees that he will provide, and that BGH and BPLSC may
similarly provide, a copy of Sections 10 and 11 hereof to any business or
enterprise (1) which he may directly or indirectly own, manage, operate,
finance, join, control or participate in the ownership, management, operation,
financing, control or control of, or (ii) with which he may be connected as an
officer, director, employee, partner; principal, agent, representative,
consultant or otherwise, or in connection with which he may use or permit his
name to be used; provided, however, that this provision shall not apply in
respect of Section 12 hereof after expiration of the time period set forth
therein.

Section 13.             Term of Agreement

The term of this Agreement
shall be for the period commencing on the date hereof and ending on June 25,
2010 and shall automatically be renewed for additional periods of one year
until one party notifies the other party in writing, at least 90 days in
advance of expiration, that this Agreement will not be renewed (such period of
employment is sometimes referred to as the “Employment Period”).  If a Change of Control occurs, the term of
this Agreement shall be automatically extended to three years following the
Change of Control.  If any notice of
non-renewal occurs within three years after a Change of Control, such notice
shall constitute an involuntary Termination of Employment for purposes of Section
3 above. Notwithstanding anything herein to the contrary, this Agreement shall
terminate if the employment of Muther with the Partnerships shall terminate for
any reason other than as provided herein.

Section 14.             Successor Company

BGH and BPLSC shall require
any successor or successors (whether direct or indirect, by purchase, merger,
consolidation or otherwise) to all or substantially all of the business and/or
assets of BGH or BPLSC by agreement in form and substance satisfactory to
Muther, to acknowledge expressly that this Agreement is binding upon and
enforceable against BGH or BPLSC in accordance with the terms hereof, and to
become jointly and severally obligated with BGH and BPLSC to perform this
Agreement in the same manner and to the same extent that BGH or BPLSC would be
required to perform if no such succession or successions had taken place.
Failure of BGH and BPLSC to obtain such agreement prior to the effectiveness of
any such succession shall be a breach of this Agreement. As used in this
Agreement, BGH and BPLSC shall mean BGH and BPLSC as hereinbefore defined and
any such successor or successors to their business and/or assets, jointly and
severally.

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Section 15.             Notice

All notices and other
communications required or permitted hereunder or necessary or convenient in
connection herewith shall be in writing and shall be delivered personally or
mailed by registered or certified mail, return receipt requested, or by
overnight express courier service, as follows:

If to BGH or BPLSC, to:

Buckeye
GP Holdings L.P.

Buckeye
Pipe Line Services Company

Five
TEK Park

9999
Hamilton Boulevard

Breinigsville,
PA 18031

Attention: Chairman

If to Muther, to:

 

 

or to such other names or addresses as BGH,
BPLSC or Muther, as the case may be, shall designate by notice to the other
party hereto in the manner specified in this Section. Any such notice shall be
deemed delivered and effective when received in the case of personal delivery,
five days after deposit, postage prepaid, with the U.S. Postal Service in the
case of registered or certified mail, or on the next business day in the case
of overnight express courier service.

Section 16.             Section 409A

(a)           This Agreement shall be interpreted to avoid any penalty sanctions
under Internal Revenue Code section 409A. 
If any payment or benefit cannot be provided or made at the time
specified herein without incurring sanctions under section 409A, then such
benefit or payment shall be provided in full at the earliest time thereafter
when such sanctions will not be imposed.

(b)           The parties agree that Muther is not a “specified employee” for
purposes of section 409A as of the date of this Agreement.  Notwithstanding anything in this Agreement to
the contrary, if Muther is a
specified employee of a publicly traded corporation under section 409A at the
time of his separation from service and if payment of any amount under this
Agreement is required to be delayed for a period of six months after separation
from service pursuant to section 409A, payment of such amount shall be delayed
as required by section 409A, and the accumulated postponed amount shall be paid
in a lump sum payment within 10 days after the end of the six-month
period.  If Muther dies during the
postponement period prior to the payment of postponed amount, the amounts
withheld on account of section 409A shall be paid to the personal
representative of Muther’s estate within 60 days after the date of Muther’s
death.  The determination of specified
employees, including the number and identity of persons 

 11
 

considered specified
employees and the identification date, shall be made by the Board in accordance
with the provisions of Section 409A and the regulations issued thereunder.

(c)           For purposes of section 409A, the right to a series of installment
payments under this Agreement shall be treated as a right to a series of
separate payments.  All reimbursements
and in kind benefits provided under this Agreement shall be made or provided in
accordance with the requirements of section 409A, including, where applicable,
the requirement that (i) any reimbursement is for expenses incurred during
Muther’s lifetime (or during a shorter period of time specified in this
Agreement), (ii) the amount of expenses eligible for reimbursement, or in kind
benefits provided, during a calendar year may not affect the expenses eligible
for reimbursement, or in kind benefits to be provided, in any other calendar
year, (iii) the reimbursement of an eligible expense will be made on or before
the last day of the calendar year following the year in which the expense is
incurred, and (iv) the right to reimbursement or in kind benefits is not
subject to liquidation or exchange for another benefit.

Section 17.             Governing Law

This Agreement shall be
governed by and interpreted under the laws of the Commonwealth of Pennsylvania
without giving effect to any conflict of laws provisions.

Section 18.             Contents of Agreement; Amendment and Assignment

(a)           This Agreement supersedes all prior agreements, sets forth the entire
understanding between the parties hereto with respect to the subject matter
hereof and cannot be changed, modified, extended or terminated except upon
written amendment executed by Muther, BGH and BPLSC. The provisions of this
Agreement may provide for payments to Muther under certain compensation or
bonus plans under circumstances where such plans would not provide for payment
thereof. It is the specific intention of the parties that the provisions of
this Agreement shall supersede any provisions to the contrary in such plans,
and such plans shall be deemed to have been amended to correspond with this
Agreement without further action by BGH or BPLSC.

(b)           Nothing in this Agreement shall be construed as giving Muther any right
to be retained in the employ of BPLSC or any of the BGH Entities or the BPL
Entities.

(c)           All of the terms and provisions of this Agreement shall be binding upon
and inure to the benefit of and be enforceable by the respective heirs,
representatives, successors and assigns of the parties hereto, except that the
duties and responsibilities of Muther, BGH and BPLSC hereunder shall not be assignable in whole or in part.

Section 19.             Severability

If any provision of this
Agreement or application thereof to anyone or under any circumstances shall be
determined to be invalid or unenforceable, such invalidity or unenforceability
shall not affect any other provisions or applications of this Agreement which
can be given effect without the invalid or unenforceable provision or
application.

 12
 

Section 20.             Remedies Cumulative: No Waiver

No right conferred upon
Muther by this Agreement is intended to be exclusive of any other right or
remedy, and each and every such right or remedy shall be cumulative and shall
be in addition to any other right or remedy given hereunder or now or hereafter
existing at law or in equity. Except as provided by Section 3, no delay or
omission by Muther in exercising any right, remedy or power hereunder or
existing at law or in equity shall be construed as a waiver thereof.

Section 21.             Miscellaneous

All section headings are for
convenience only. This Agreement may be executed in several counterparts, each
of which is an original. It shall not be necessary in making proof of this
Agreement or any counterpart hereof to produce or account for any of the other
counterparts.

Section 22.             Muther’s Acknowledgment

By executing this Agreement,
Muther acknowledges that he has no grounds for asserting that a Good Reason
Termination exists as of the date hereof and that no obligation to pay
severance under Section 4 exists at the current time.

Section 23.             Defense of Claims

Muther agrees that, during a
period of 36 months after the Termination Date, upon request from BGH or BPLSC,
Muther will cooperate with the BPL Entities and the Partnerships in the defense
of any claims or actions that may be made by or against the BPL Entities and
the Partnerships that relate to Muther’s prior areas of responsibility, except
if Muther’s reasonable interests are adverse to such entities in such claim or
action. BGH and BPLSC agree to pay or reimburse Muther for all of his
reasonable travel and other direct expenses incurred, or to be reasonably
incurred, to comply with Muther’s obligations under this Section 23.  If the requirements of Muther under this
Section 23 exceed ten business days, BGH and BPLSC shall compensate Muther
thereafter in an amount equal to $1,000 per day.

Section 24.             Non-Disparagement

Muther agrees that, in
communications with Persons other than the Partnerships, he shall not disparage
in any way, and shall always speak well of the Partnerships, their Affiliates
or respective employees and under no circumstances shall Muther, in
communications with Persons other than the Partnerships and their Affiliates
criticize or disparage any business practice, policy, statement, valuation or report
that is made, conducted or published by such entities or individuals.  Notwithstanding the foregoing, this Section
24 shall not be construed to prohibit or restrain any criticism or other
statements made in communications exclusively between or among the Partnerships
and their Affiliates or their respective employees, agents or representatives
to the extent such communications or statements are made in the ordinary course
of business or in the discharge by Muther of his duties and responsibilities on
behalf of the Partnerships.  The
obligations of Muther under this Section 24 shall continue after the
termination of the Employment Period. Muther acknowledges that any violation of
this Section 24 may cause irreparable injury to the Partnerships and their
Affiliates or their respective employees for which monetary damages are
inadequate and difficult to compute. 
Accordingly,

 13
 

this
Section 24 may be enforced by specific performance, and prospective breaches of
this Section 24 may be enjoined.

IN WITNESS WHEREOF, the
undersigned, intending to be legally bound, have executed this Agreement as of
the date first above written.

	
  

  	
   

  	
  BUCKEYE GP HOLDINGS, L.P.

  
	
   

  	
   

  	
  By: MainLine
  Management LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/

  	
   

  
	
   

  	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  BUCKEYE PIPE LINE SERVICES COMPANY

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/

  	
   

  
	
   

  	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  /s/ Stephen C.
  Muther

  	
   

  
	
   

  	
   

  	
  Stephen C. Muther

  

 

 14

EXHIBIT
A

TERMINATION
OF EMPLOYMENT AGREEMENT

This Termination of
Employment Agreement (the “Agreement”) is
between Buckeye GP Holdings, L.P., a Delaware limited partnership (“BGH”), Buckeye Pipe Line Services Company, a Pennsylvania
corporation (“BPLSC”), and Stephen C. Muther (“Muther”), pursuant to the Amended and Restated Employment
and Severance Agreement between Muther, BGH and BPLSC, dated
         , 2007 (the “Employment Agreement”) and attached hereto as Exhibit A.

WHEREAS, Muther is employed
by BPLSC pursuant to the Employment Agreement; and

WHEREAS, Muther’s employment
with BPLSC is being terminated in exchange for certain severance benefits and
other valuable consideration provided herein;

NOW, THEREFORE, the parties
agree to terminate their employment relationship on the following terms and
conditions.

1.             Termination of Employment.  BGH,
BPLSC and Muther agree that Muther’s employment with BPLSC is terminated as of          
(the “Termination Date”), pursuant to Section 3 of the Employment Agreement.

2.             Complete Release and Other Consideration from
Muther.  In exchange for the obligations of BGH and
BPLSC under this Agreement, Muther agrees as follows:

a.                                       Complete Release.  On
behalf of Muther and Muther’s heirs and assigns, Muther fully releases BGH,
BPLSC and each of their parents, subsidiaries, affiliates, divisions,
predecessors, successors, and assigns, and, with respect to all such entities,
their partners, members, officers, directors, attorneys, agents, and employees
(collectively, the “BGH Releasees”), from
any and all claims, demands, or causes of action (including claims for
attorneys’ fees) (collectively, “Claims”), known
or unknown, that Muther may have or may claim to have against any of the BGH
Releasees, including but not limited to any claims arising out of Muther’s
employment relationship with and service as an employee, officer or director of
BPLSC or any BGH Releasee, and the termination of such relationship or service
(the “Muther Release”); provided, however,
that this Muther Release shall not apply to the obligations of BPLSC and BGH
under this Agreement. This Muther Release includes, without limitation, any
claims arising out of any contract (express or implied); any tort (whether
based on negligent, grossly negligent, or intentional conduct); or any federal,
state, or local law, including, without limitation, the Age Discrimination in
Employment Act and the Employee Retirement Income Security Act.  This Muther Release does not include any
claims under the Age Discrimination in Employment Act that may arise after this Agreement is executed.  Nothing in this Agreement shall constitute a 

 A-1
 

waiver
or release by Muther of any vested benefits under any pension, retirement
savings, deferred compensation, vacation, health care or other benefit plan of
BGH or BPLSC in which he was a participant.

b.                                      Confidentiality. 
Except as may be required by law or court order or as may be necessary
in an action arising out of this Agreement, Muther agrees not to disclose the
existence or terms of this Agreement to anyone other than Muther’s immediate
family, attorneys, tax advisors, and financial counselors, provided that Muther
first informs them of this confidentiality clause and secures their agreement
to be bound by it. Muther understands and agrees that a breach of this
confidentiality provision by any of these authorized persons will be deemed a
material breach of this Agreement by Muther.

3.             Release and Other Consideration from BPLSC
and BGH.  In exchange for Muther’s obligations under
this Agreement, BPLSC or BGH shall pay Muther those severance payments and
benefits, on the terms provided in the Employment Agreement. Muther
acknowledges that these severance payments are subject to Muther’s compliance
with the Employment Agreement.

4.             Right to Consult an Attorney; Period of
Review.  Muther is encouraged to consult with an
attorney before signing this Agreement.

5.             Entire Agreement; Amendment; Continuing
Obligations.  This Agreement and the Employment Agreement
contain the entire agreements of the parties with respect to Muther’s
employment and the other matters covered herein and therein; moreover, this
Agreement supersedes all prior and contemporaneous agreements and
understandings, oral or written, between the parties hereto concerning the
subject matter hereof and thereof.  This
Agreement may be amended, waived or terminated only by a written instrument
executed by both parties hereto. Muther hereby reaffirms and agrees to continue
to abide by all of Muther’s obligations under the Employment Agreement.

6.             Revocation/Effectiveness.  Upon
signing this Agreement, Muther will have 7 days to revoke the Agreement. To
properly revoke the Agreement, BGH and BPLSC must receive written notice of
revocation from Muther by the close of business on the 7th day after the date
the Agreement is signed by Muther. Written notice must be delivered pursuant to
the Employment Agreement. In the event that BGH or BPLSC exercises its right
under Section 4(e) of the Employment Agreement to recover severance from
Muther, the terms of this Agreement shall be null and void and have no force or
effect.

7.             Indemnification Rights.  The
execution and delivery of this Agreement shall have no effect on the rights or
entitlement of Muther to indemnification under (a) any agreement between Muther
and BGH or BPLSC or any of their affiliates or (b) any of the organizational
documents of BGH, BPLSC and their affiliates, including, without limitation,
MainLine Management LLC, Buckeye Partners, L.P., and Buckeye GP LLC.

 A-2
 

8.             Choice of Law.  This
Agreement will be governed in all respects by the laws of the Commonwealth of
Pennsylvania, without regard to its choice of law principles. This Agreement is
subject to the arbitration provisions in the Employment Agreement.

9.             Effectiveness of Agreement.  This
Agreement will be effective, and the payments described above will be made,
only if Muther does not revoke the Agreement under Section 6 above.

	
  

  	
  EXECUTIVE

  
	
   

  	
   

  
	
   

  	
  Signature:

  	
   

  	
   

  
	
   

  	
  Name: Stephen C. Muther

  
	
   

  	
   

  
	
   

  	
  Date:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  BUCKEYE GP
  HOLDINGS, L.P.

  
	
   

  	
  By: MainLine
  Management LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  BUCKEYE PIPE
  LINE SERVICES COMPANY

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  
						

 

 A-3Exhibit 10.2

AMENDED AND RESTATED
SEVERANCE AGREEMENT

This Amended and Restated Severance Agreement made as
of the 25th day of June, 2007, by and between Buckeye GP Holdings L.P., a
Delaware limited partnership and the successor to Glenmoor LLC, (“BGH”), Buckeye
Pipe Line Services Company, a Pennsylvania corporation (“BPLSC”) and Robert B.
Wallace, residing at                             
(“Employee”), amends and restates the Severance Agreement, dated as of
September 1, 2004, between Glenmoor LLC and Employee (the “Prior Agreement”).

WHEREAS, Employee is an employee of BPLSC, currently
serving as its Senior Vice President — Finance and Chief Financial Officer;

WHEREAS, BGH is entering into this Agreement to
guarantee performance of BPLSC’s obligations under this Agreement;

WHEREAS, the Board (defined below) believes that
appropriate steps should be taken to reinforce and encourage the continued
attention and dedication of Employee to BPLSC without distraction
notwithstanding the fact that the BPL Entities (defined below) or BGH Entities
(defined below) could be subject to a change of control, and that such
possibility, and the uncertainty and questions which it may raise among
management, may result in the departure or distraction of key management
personnel to the detriment of BPLSC; and

WHEREAS, in consideration of Employee’s continued
employment with BPLSC and his agreement to keep information of the Partnerships
(defined below) confidential and not to compete with the Partnerships in the
event Employee’s employment is terminated, BPLSC agrees that Employee shall
receive the compensation set forth in this Agreement as a cushion against the
financial and career impact on Employee in the event Employee’s employment with
BPLSC is terminated without cause under the circumstances described herein;

NOW, THEREFORE, in consideration of the foregoing and
the mutual covenants and agreements hereinafter set forth and intending to be
legally bound hereby, the parties hereto agree as follows:

1.             Definitions.

“Affiliate” and “Associate” shall have the respective
meanings ascribed to such terms in Rule 12b-2 of the General Rules and
Regulations under the Exchange Act.

“Base Compensation” shall mean $300,000.

“Beneficial Owner” of any securities shall have the
meaning ascribed to such term in Rule 13d-2 of the General Rules and
Regulations under the Exchange Act.

“BGH Entities” means BGH, MainLine Management LLC,
Buckeye GP LLC, MainLine GP, Inc., and MainLine L.P., collectively.

 1
 

“BGH GP Holdings” means BGH GP Holdings, LLC, a
Delaware limited liability company, which as of the date hereof is owned by
ArcLight Energy Partners Fund III, L.P., Kelso Investment Associates VII, L.P.,
KEP VI, LLC and Lehman Brothers Co. — Investment Partners, L.P.

“BPL” means Buckeye Partners, L.P., a Delaware limited
partnership.

“BPL Entities” means BPL, its operating partnerships
and other subsidiaries, and BPLSC, collectively.

“Board” means the board of directors or similar
governing body of BGH.

“Cause” means (i) misappropriation of funds or any act
of common law fraud, theft, or embezzlement, (ii) habitual insobriety or
substance abuse, (iii) conviction of or plea of nolo contendere to a felony or
any crime involving moral turpitude, (iv) willful misconduct or gross
negligence by Employee in the performance of his duties, the willful failure of
Employee to perform a material function of Employee’s duties hereunder or
material failure to comply with any lawful directive of the Board, or Employee’s
engaging in a conflict of interest or other breach of fiduciary duty, (v)
material violation of the code of conduct of the BPL Entities and policy on
workplace harassment, or (vi) Employee is the subject of a judicial or
administrative order obtained or issued by the Securities and Exchange
Commission for any securities violation involving fraud.

“Change of Control” shall be deemed to have taken
place upon the occurrence of any of the following events:

(a)           any Person, except
the BGH Entities or the BPL Entities, or any employee benefit plan of the BGH
Entities or the BPL Entities (or of any Affiliate or Associate thereof, or any
Person or entity organized, appointed or established by the BGH Entities or the
BPL Entities for or pursuant to the terms of any such employee benefit plan),
together with all Affiliates and Associates of such Person, shall become the
beneficial owner, or the holder of proxies, in the aggregate of 80% or more of
the limited partnership units (the “Units”) of BGH or BPL then outstanding;
provided, however, that no “Change of Control” shall be deemed to occur for
purposes of clause (a)
hereof during any period in which any such Person, and its Affiliates
and Associates, are bound by the terms of a standstill agreement under which
such parties have agreed not to acquire more than 79% of the Units of BGH or
BPL then outstanding or to solicit proxies; or

(b)           any Person, except
one or more of the equity owners of BGH GP Holdings as of the date hereof, or
any Affiliate or Associate of such equity owners or any employee benefit plan
of the BGH Entities or the BPL Entities (or of any Affiliate or Associate or
any Person or entity organized, appointed or established by the BGH Entities or
the BPL Entities for or pursuant to the terms of any such employee benefit
plan), together with all Affiliates and Associates of such Person, shall become
the Beneficial Owner, or the holder of proxies, in the aggregate of 51% or more
of the general partner interests of BGH or BPL; or

(c)           if either BGH or BPL
and its respective general partner are combined into a single entity (the “Successor”),
any Person, except one or more of the equity owners of BGH

 2
 

GP Holdings as
of the date hereof, or any Affiliate or Associate of such equity owners or any
employee benefit plan of the BGH Entities or the BPL Entities (or of any
Affiliate or Associate thereof or any Person or entity organized, appointed or
established by the BGH Entities or the BPL Entities for or pursuant to the
terms of any such employee benefit plan), together with all Affiliates and
Associates of such Person, shall become the Beneficial Owner, or the holder of
proxies, in the aggregate of 50% or more of the voting equity interests of the
Successor then outstanding; provided, however, that no “Change of Control”
shall be deemed to occur for purposes of clause (c) hereof during any period in
which any such Person, and its Affiliates and Associates, are bound by the
terms of a standstill agreement under which such parties have agreed not to
acquire more than 49% of the voting equity interests of the Successor then
outstanding or to solicit proxies.

Without
limiting the foregoing, the term “Change of Control” shall be deemed to include
the transactions contemplated by the Purchase Agreement, dated as of April 3,
2007, among Carlyle/Riverstone BPL Holdings II, L.P., certain Limited Partners
of Buckeye GP Holdings L.P. and BGH GP Holdings, LLC, as well as any subsequent
transaction satisfying the foregoing definition of a “Change of Control”.

“Exchange Act” means the Securities Exchange Act of
1934, as amended.

“General Partner” means MainLine Management LLC.

“Internal Revenue Code” means the Internal Revenue
Code of 1986, as amended.

“Partnerships” means the BGH Entities and the BPL
Entities, collectively.

“Person” shall have the same meaning as in Section
13(d) and 14(d) of the Exchange Act.

“Subsidiary” means any entity in which the BGH
Entities or the BPL Entities, directly or indirectly, own at least a 50%
interest or an unincorporated entity of which the BGH Entities or the BPL
Entities, directly or indirectly, owns at least 50% of the profits or capital
interests.

“Termination Date” means the date of receipt of the
Notice of Termination described in Section 2 hereof or any later date specified
therein, as the case may be.

“Termination of Employment” means the termination of
Employee’s employment relationship with the Partnerships, which event shall
constitute a “separation from service” under section 409A of the Internal
Revenue Code.

2.             Notice of Termination.  Any Termination of Employment shall be
communicated by a Notice of Termination in accordance with Section 16
hereof.  For purposes of this Agreement,
a “Notice of Termination” means a written notice which (i) indicates the
specific reasons for the termination, (ii) briefly summarizes the facts and
circumstances deemed to provide a basis for termination of Employee’s
employment, and (iii) if the Termination Date is other than the date of receipt
of such notice, specifies the Termination Date (which date shall not be more
than 15 days after the giving of such notice).

 3
 

3.             Severance Compensation upon Termination.

(a)           Subject to the last sentence of this
paragraph, Employee shall receive severance compensation as described below
upon a Termination of Employment that is either:

(i)                                     initiated by BPLSC for any reason other
than (x) Employee’s continuous illness, injury or incapacity for a period of
six consecutive months or (y) for “Cause;” or

(ii)                                  initiated by Employee after a Change of
Control has occurred upon one or more of the following occurrences:

(A)          any failure of BPLSC to comply with
and satisfy any of the terms of this Agreement;

(B)           any significant reduction by BPLSC of
the authority, duties, reporting responsibilities or job responsibilities of
Employee;

(C)           any removal by BPLSC of Employee from
the employment grade or officer positions which Employee holds as of the date
hereof except in connection with promotions to higher office, or any
elimination of Employee from eligibility to participate in employee benefit
plans or policies except changes applicable to all executive level employees as
a group;

(D)          any reduction or diminution in
Employee’s base compensation amount or annual bonus opportunity; or

(E)           a transfer of Employee, without his
express written consent, to a location that is more than 100 miles from his
principal place of business immediately preceding the Change of Control.

In the event of a Termination of Employment described above, and
subject to the last sentence of this paragraph, BPLSC shall pay to Employee,
within fifteen days after the Termination Date, an amount in cash, payable in a
lump sum, equal to twice Employee’s Base Compensation.  Notwithstanding
the foregoing, no such payment shall be made unless Employee executes, and does
not revoke, a written release, substantially in the form attached hereto as
Annex 1 (the “Release”), of any and all claims against BPLSC and all related
parties with respect to all matters arising out of Employee’s employment by
BPLSC (other than any entitlements under the terms of this Agreement or under
any other plans or programs of BPLSC in which Employee participated and under
which Employee has accrued or become entitled to a benefit) or the termination
thereof.

(b)           In the event a severance payment is
made under paragraph (a) above, BPLSC will provide Employee with the following
payments for a period of 12 months from the Termination Date; provided,
however, that this obligation shall cease upon Employee’s obtaining new
employment that provides Employee with eligibility for medical benefits without
a pre-existing condition limitation (such period is referred to as the “Benefit
Period”):

 4
 

(i)                                     During the Benefit Period, BPLSC will pay
Employee a monthly payment on the first payroll date of each month equal to the
COBRA cost of continued health and dental coverage under health and dental
plans of BPLSC pursuant to section 4980B of the Internal Revenue Code, less the
amount that Employee would be required to contribute for health and dental
coverage if Employee were an active employee. 
These payments will commence on BPLSC’s first payroll date after the
Termination Date and will continue until the end of the Benefit Period.

(ii)                                  On each date on which a payment is made
under subsection (i) above, BPLSC will pay Employee an additional tax gross-up
amount equal to the federal, state and local income and payroll taxes, if any,
that Employee incurs on the amount paid under subsection (i), and on the amount
paid under this subsection (ii), on that date; provided, however, that
for purposes of this subsection (ii), the aggregate tax rate for the federal,
state and local income and payroll taxes above shall be assumed to be 25%. 
This gross up payment will be made with respect to each payment under
subsection (i) and will cease when payments under subsection (i) cease.

(c)           If Employee incurs a Termination of
Employment other than as described in Section 3(a), Employee shall receive no
severance compensation under this Agreement, and this Agreement shall
terminate; provided that the obligations of Employee under Sections 11, 12, 13,
24 and 25 shall continue in effect according to their terms.

4.             Other Payments. 
The payment due under Section 3 hereof shall be in addition to and not
in lieu of any payments or benefits due to Employee under any other plan,
policy or program of BPLSC, except for severance compensation as described in
Section 8 below.

5.             Establishment of Trust.  BPLSC may establish an irrevocable trust fund
pursuant to a trust agreement to hold assets to satisfy its obligations
hereunder.  Funding of such trust fund
shall be subject to BPLSC’s discretion, as set forth in the agreement pursuant
to which the fund will be established.

6.             Enforcement.

(a)           In the event that BPLSC shall fail or
refuse to make payment of any amounts due Employee under this Agreement, BGH
agrees to make such payment on behalf of BPLSC.

(b)           In the event that BGH and BPLSC shall
fail or refuse to make payment of any amounts due Employee under Sections 3 and
4 hereof within the respective time periods provided therein, BGH shall pay to
an escrow agent, who shall invest such sum with interest to be paid to the
prevailing party, any amount remaining unpaid under Sections 3 or 4. In such
event, the parties shall engage in arbitration in the City of Philadelphia,
Pennsylvania, in accordance with the National Rules for the Resolution of
Employment Disputes then in effect of the American Arbitration Association,
before a panel of three arbitrators, one of whom shall be

 5
 

selected by BGH and one
by Employee, and the third of whom shall be selected by the other two
arbitrators.  Any award entered by the
arbitrators shall be final, binding and nonappealable and judgment may be
entered thereon by either party in accordance with applicable law in any court
of competent jurisdiction.  This
arbitration provision shall be specifically enforceable.  The arbitrators shall have no authority to
modify any provision of this Agreement or to award a remedy for a dispute
involving this Agreement other than a benefit specifically provided under or by
virtue of the Agreement.

(c)           BGH shall pay Employee on demand the
amount necessary to reimburse Employee in full for all reasonable expenses
(including reasonable attorneys’ fees and expenses) incurred by Employee in
enforcing any of the obligations of BPLSC and BGH under this Agreement subject
to Employee’s duty to repay such sums to BPLSC and BGH  in the event that the Employee does not
prevail on any material issue which is the subject of such arbitration.  If Employee prevails on at least one material
issue which is the subject of such arbitration, BGH shall be responsible for
all of the fees of the American Arbitration Association and the arbitrators and
any expenses relating to the conduct of the arbitration (including Employee’s
reasonable attorneys’ fees and expenses). 
Otherwise, each party shall be responsible for his or its own expenses
relating to the conduct of the arbitration (including reasonable attorneys’
fees and expenses) and shall equally share the fees of the American Arbitration
Association.  All reimbursements shall be
made in accordance with section 409A of the Internal Revenue Code.

7.             No Mitigation. 
Employee shall not be required to mitigate the amount of any payment or
benefit provided for in this Agreement by seeking other employment or
otherwise, nor shall the amount of any payment or benefit provided for herein
be reduced by any compensation earned by other employment or otherwise.

8.             Non-exclusivity of Rights.  Nothing in this Agreement shall prevent or
limit Employee’s continuing or future participation in or rights under any
benefit, bonus, incentive or other plan or program provided by the BGH Entities
or the BPL Entities, and for which Employee may qualify, from the date hereof
through the Termination Date; provided, however, that Employee hereby waives
Employee’s right to receive any payments under any severance pay plan or
similar program applicable to other employees of BPLSC, the BPL Entities or the
BGH Entities.

9.             No Set-Off. 
Except as specifically provided for herein, the obligation of BGH and
BPLSC to make the payments provided for in this Agreement and otherwise to
perform their obligations hereunder shall not be affected by any circumstances,
including, without limitation, any set-off, counterclaim, recoupment, defense
or other right which the BGH Entities or the BPL Entities may have against
Employee or others.

10.           Taxes.  Any payment required under this Agreement
shall be subject to all requirements of law with regard to the withholding of
taxes, filing, making of reports and the like, and BGH and BPLSC shall use
their best efforts to satisfy promptly all such requirements.

11.           Confidential Information.  Employee recognizes and acknowledges that, by
reason of his relationship to the Partnerships, he has had and will continue to
have access to confidential information of the Partnerships, including, without
limitation, information and

 6
 

knowledge pertaining to
products and services offered, innovations, designs, ideas, plans, trade
secrets, proprietary information, distribution and sales methods and systems,
sales and profit figures, customer and client lists, and relationships between
the entities (“Confidential Information”). 
Employee acknowledges that such Confidential Information is a valuable
and unique asset and covenants that he will not, either during or after his
employment by BPLSC, disclose or use any such Confidential Information to any
person for any reason whatsoever without the prior written authorization of the
Board; unless such information is in the public domain through no fault of
Employee or except as may be required by law.

12.           Non-Competition.

(a)           During his employment by BPLSC and
for a period of six (6) months thereafter, Employee will not, unless acting
with the prior written consent of the Board, directly or indirectly, own,
manage, operate, join, control or participate in the ownership, management,
operation or control, or be connected as an officer, director, manager, member,
employee, partner, principal, agent, representative, consultant or otherwise
with or use or permit his name to be used in connection with, (i) any business
or enterprise that competes with the Partnerships in any business or enterprise
that contributes more than ten percent (10%) of BGH’s consolidated gross
revenues, either during his employment by BPLSC or on the Termination Date, as
applicable, in any state in which such business or enterprise is so operated
(whether or not such business is physically located within those areas) (the “Geographic
Area”), or (ii) in any business or enterprise that is a customer of the
Partnerships if BGH derives at least five percent (5%) of its consolidated
gross revenues either during his employment by BPLSC or on the Termination
Date, as applicable, from such customer. 
It is recognized by Employee that the Partnerships and Employee’s
connection therewith is or will be involved in activity throughout the
Geographic Area, and that more limited geographical limitations on this
non-competition covenant are therefore not appropriate.  Employee also shall not, directly or
indirectly, during such six (6) month period (i) solicit or divert business
from, or attempt to convert any client, account or customer of the
Partnerships, whether existing at the date hereof or acquired during Employee’s
employment nor (ii) following Employee’s employment, solicit or attempt to hire
any then employee of the Partnerships.

(b)           The foregoing restriction shall not
be construed to prohibit the ownership by Employee of less than five percent
(5%) of any class of securities of any corporation which is engaged in any of
the foregoing businesses having a class of securities registered pursuant to
the Exchange Act, provided that such ownership represents a passive investment
and that neither Employee nor any group of persons including Employee in any
way, either directly or indirectly, manages or exercises control of any such
corporation, guarantees any of its financial obligations, otherwise takes any
part in its business, other than exercising his rights as a shareholder, or
seeks to do any of the foregoing.

13.           Equitable Relief.

(a)           Employee acknowledges that the
restrictions contained in Sections 11 and 12 hereof are reasonable and
necessary to protect the legitimate interests of the Partnerships, that BGH and
BPLSC would not have entered into this Agreement in the absence of such
restrictions, and that any violation of any provision of those Sections will
result in irreparable injury to BGH

 7
 

and BPLSC.  Employee represents that his experience and
capabilities are such that the restrictions contained in Section 12 hereof will
not prevent Employee from obtaining employment or otherwise earning a living at
the same general level of economic benefit as is currently the case.  Employee further represents and acknowledges
that (i) he has been advised by BGH and BPLSC to consult his own legal counsel
in respect of this Agreement, and (ii) he has had full opportunity, prior to
execution of this Agreement, to review thoroughly this Agreement with his
counsel.

(b)           Employee agrees that BGH and BPLSC shall
be entitled to preliminary and permanent injunctive relief, without the
necessity of proving actual damages, as well as an equitable accounting of all
earnings, profits and other benefits arising from any violation of Sections 11
or 12 hereof, which rights shall be cumulative and in addition to any other
rights or remedies to which BGH or BPLSC may be entitled.  In the event that any of the provisions of
Sections 11 or 12 hereof should ever be adjudicated to exceed the time,
geographic, service, or other limitations permitted by applicable law in any
jurisdiction, then such provisions shall be deemed reformed in such
jurisdiction to the maximum time, geographic, service, or other limitations
permitted by applicable law.

(c)           Employee irrevocably and unconditionally
(i) agrees that any suit, action or other legal proceeding arising out of
Section 11 or 12 hereof, including without limitation, any action commenced by
BGH or BPLSC for preliminary and permanent injunctive relief or other equitable
relief, may be brought in the United States District Court for the Eastern
District of Pennsylvania, or if such court does not have jurisdiction or will
not accept jurisdiction, in any court of general jurisdiction in Montgomery
County, Pennsylvania, (ii) consents to the non-exclusive jurisdiction of any
such court in any such suit, action or proceeding, and (iii) waives any
objection which Employee may have to the laying of venue of any such suit,
action or proceeding in any such court. 
Employee also irrevocably and unconditionally consents to the service of
any process, pleadings, notices or other papers in a manner permitted by the
notice provisions of Section 16 hereof.

14.           Term of Agreement. The term of
this Agreement shall continue until August 31, 2009 and shall be automatically
renewed for successive one-year periods thereafter unless BGH or BPLSC notifies
Employee in writing that this Agreement will not be renewed at least sixty (60)
days prior to the end of the then current term; provided, however, that, in the
event of a Termination of Employment, this Agreement shall remain in effect
until all of the obligations of the parties hereunder are satisfied.

15.           Successor Company.  BGH and BPLSC shall require any successor or
successors (whether direct or indirect, by purchase, merger, consolidation or
otherwise) to all or substantially all of the business and/or assets of BGH or
BPLSC, by agreement in form and substance satisfactory to Employee, to
acknowledge expressly that this Agreement is binding upon and enforceable
against BGH or BPLSC in accordance with the terms hereof, and to become jointly
and severally obligated with BGH and BPLSC to perform this Agreement in the
same manner and to the same extent that BGH or BPLSC would be required to
perform if no such succession or successions had taken place.  Failure of BGH and BPLSC to obtain such
agreement prior to the effectiveness of any such succession shall be a breach
of this Agreement.  As used in this
Agreement, BGH and BPLSC shall mean BGH and BPLSC as hereinbefore

 8
 

defined and any such
successor or successors to their business and/or assets, jointly and severally.

16.           Notice.  All notices and other communications required
or permitted hereunder or necessary or convenient in connection herewith shall
be in writing and shall be delivered personally or mailed by registered or
certified mail, return receipt requested, or by overnight express courier
service, as follows:

If to BGH or BPLSC, to:

Buckeye
GP Holdings L.P.

Buckeye
Pipe Line Services Company

Five
TEK Park

9999
Hamilton Boulevard

Breinigsville,
PA 18031

Attention: Chairman

With a copy to:

Morgan,
Lewis & Bockius LLP

1701
Market Street

Philadelphia,
PA 19103-2921

Attention: Howard L.
Meyers

If to Employee, to:

Robert B. Wallace

or to such other names or addresses as BGH, BPLSC or
Employee, as the case may be, shall designate by notice to the other party
hereto in the manner specified in this Section; provided, however, that if no
such notice is given by BPLSC, notice at the last address of BPLSC or to any successor
pursuant to Section 15 hereof shall be deemed sufficient for the purposes
hereof.  Any such notice shall be deemed
delivered and effective when received in the case of personal delivery, five
days after deposit, postage prepaid, with the U.S. Postal Service in the case
of registered or certified mail, or on the next business day in the case of
overnight express courier service.

17.           Section 409A.

(a)           This Agreement shall be interpreted
to avoid any penalty sanctions under Internal Revenue Code section 409A.  If any payment or benefit cannot be provided
or made at the time specified herein without incurring sanctions under section
409A, then such benefit or payment shall be provided in full at the earliest
time thereafter when such sanctions will not be imposed.

 9
 

(b)           The parties agree that Employee is not a “specified
employee” for purposes of section 409A as of the date of this Agreement.  Notwithstanding anything in this Agreement to
the contrary, if Employee is a specified employee of a publicly
traded corporation under section 409A at the time of his separation from
service and if payment of any amount under this Agreement is required to be
delayed for a period of six months after separation from service pursuant to
section 409A, payment of such amount shall be delayed as required by section
409A, and the accumulated postponed amount shall be paid in a lump sum payment
within 10 days after the end of the six-month period.  If Employee dies during the
postponement period prior to the payment of postponed amount, the amounts
withheld on account of section 409A shall be paid to the personal
representative of Employee’s estate within 60 days after the date of Employee’s
death.  The determination of specified
employees, including the number and identity of persons considered specified
employees and the identification date, shall be made by the Board in accordance
with the provisions of Section 409A and the regulations issued thereunder.

(c)           For purposes of section 409A, the
right to a series of installment payments under this Agreement shall be treated
as a right to a series of separate payments. 
If applicable under section 409A, the first $450,000 (or such
greater amount as may be provided under regulations issued under section 409A)
of severance compensation paid under this Agreement shall be considered
payments upon an involuntary termination under a “separation pay plan” under
Section 409A. All
reimbursements and in kind benefits provided under this Agreement shall be made
or provided in accordance with the requirements of section 409A, including,
where applicable, the requirement that (i) any reimbursement shall be for
expenses incurred during Employee’s lifetime (or during a shorter period of
time specified in this Agreement), (ii) the amount of expenses eligible for
reimbursement, or in kind benefits provided, during a calendar year may not
affect the expenses eligible for reimbursement, or in kind benefits to be
provided, in any other calendar year, (iii) the reimbursement of an eligible
expense will be made on or before the last day of the calendar year following
the year in which the expense is incurred, and (iv) the right to reimbursement
or in kind benefits is not subject to liquidation or exchange for another
benefit.

18.           Governing Law.  This Agreement shall be governed by and
interpreted under the laws of the Commonwealth of Pennsylvania without giving
effect to any conflict of laws provisions.

19.           Contents of
Agreement, Amendment and Assignment.

(a)           This Agreement supersedes all prior
agreements, sets forth the entire understanding between the parties hereto with
respect to the subject matter hereof and cannot be changed, modified, extended
or terminated except upon written amendment executed by Employee, BGH and BPLSC
and approved by the Board and executed on BGH and BPLSC’s behalf by a duly
authorized officer.  The provisions of
this Agreement may provide for payments to Employee under certain compensation
or bonus plans under circumstances where such plans would not provide for payment
thereof.  It is the specific intention of
the parties that the provisions of this Agreement shall supersede any
provisions to the contrary in such plans, and such plans shall be deemed to
have been amended to correspond with this Agreement without further action by
BGH or BPLSC or the Board.

 10
 

(b)           Nothing in this Agreement shall be
construed as giving Employee any right to be retained in the employ of BPLSC or
any of the BGH Entities or the BPL Entities.

(c)           All of the terms and provisions of
this Agreement shall be binding upon and inure to the benefit of and be
enforceable by the respective heirs, representatives, successors and assigns of
the parties hereto, except that the duties and responsibilities of Employee,
BGH and BPLSC hereunder shall not be assignable in whole or in part by the
Employee.

20.           Severability.  If any provision of this Agreement or
application thereof to anyone or under any circumstances shall be determined to
be invalid or unenforceable, such invalidity or unenforceability shall not
affect any other provisions or applications of this Agreement which can be
given effect without the invalid or unenforceable provision or application.

21.           Remedies Cumulative; No Waiver.  No right conferred upon Employee by this
Agreement is intended to be exclusive of any other right or remedy, and each
and every such right or remedy shall be cumulative and shall be in addition to
any other right or remedy given hereunder or now or hereafter existing at law
or in equity.  Except as provided by
Section 2, no delay or omission by Employee in exercising any right, remedy or
power hereunder or existing at law or in equity shall be construed as a waiver
thereof.

22.           Miscellaneous.  All section headings are for convenience
only.  This Agreement may be executed in
several counterparts, each of which is an original.  It shall not be necessary in making proof of
this Agreement or any counterpart hereof to produce or account for any of the
other counterparts.

23.           Employee’s Acknowledgment.  By executing this Agreement, Employee
acknowledges that he has no grounds for asserting that grounds for a
Termination of Employment under Section 3 exists as of the date hereof and that
no obligation to pay severance under Section 3 exists at the current time.

24.           Defense of Claims.  Employee agrees that, during a period of 36
months after the Termination Date, upon request from BGH or BPLSC, Employee
will cooperate with the BPL Entities and the Partnerships in the defense of any
claims or actions that may be made by or against the BPL Entities and the
Partnerships that relate to Employee’s prior areas of responsibility, except if
Employee’s reasonable interests are adverse to such entities in such claim or
action. BGH and BPLSC agree to pay or reimburse Employee for all of his
reasonable travel and other direct expenses incurred, or to be reasonably
incurred, to comply with Employee’s obligations under this Section 24.  If the requirements of Employee under this
Section 24 exceed ten business days, BGH and BPLSC shall compensate Employee
thereafter in an amount equal to $1,000 per day.

25.           Non-Disparagement.  Employee agrees that, in communications with
Persons other than the Partnerships, he shall not disparage in any way, and
shall always speak well of the Partnerships, their Affiliates or respective
employees, and under no circumstances shall Employee, in communications with
Persons other than the Partnerships and their Affiliates criticize or disparage
any business practice, policy, statement, valuation or report that is made,

 11
 

conducted or published by such entities or individuals.  Similarly, BPLSC, on behalf of the
Partnerships and their Affiliates, agrees not to disparage Employee.  Notwithstanding the foregoing, this Section
25 shall not be construed to prohibit or restrain any criticism or other
statements made in communications exclusively between or among the Partnerships
and their Affiliates or their respective employees, agents or representatives
to the extent such communications or statements are made in the ordinary course
of business or in the discharge by Employee of his duties and responsibilities
on behalf of the Partnerships.  The
obligations of Employee and BPLSC under this Section 25 shall continue after
the termination of the employment period. 
Employee and BPLSC acknowledge that any violation of this Section 25 may
cause irreparable injury to the other parties for which monetary damages are
inadequate and difficult to compute. 
Accordingly, this Section 25 may be enforced by specific performance,
and prospective breaches of this Section 25 may be enjoined.

[Signature Page Follows]

 12
 

IN WITNESS WHEREOF, the
undersigned, intending to be legally bound, have executed this Agreement as of
the date first above written.

	
  

  	
   

  	
  BUCKEYE GP
  HOLDINGS, L.P.

  
	
   

  	
   

  	
  By: MainLine
  Management LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/

  
	
   

  	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  BUCKEYE PIPE
  LINE SERVICES COMPANY

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/

  
	
   

  	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  /s/ Robert B. Wallace

  
	
   

  	
   

  	
  Robert B.
  Wallace

  

 

 13

Annex 1

TERMINATION OF SEVERANCE AGREEMENT AND RELEASE

This Termination of
Severance Agreement and Release (the “Agreement”) is
between Buckeye GP Holdings, L.P., a Delaware limited partnership (“BGH”), Buckeye Pipe Line Services Company, a Pennsylvania
corporation (“BPLSC”), and Robert B. Wallace (“Employee”), pursuant to the Amended and Restated Severance
Agreement between Employee, BGH and BPLSC, dated                       ,
2007 (the “Severance Agreement”).  Capitalized terms used but not defined herein
shall have the meanings given them in the Severance Agreement.

WHEREAS, Employee is
employed by BPLSC, and Employee, BPLSC and BGH are parties to the Severance
Agreement;

WHEREAS, Employee’s
employment with BPLSC is being terminated in exchange for certain severance
benefits and other valuable consideration provided herein;

NOW, THEREFORE, the
parties agree to terminate their employment relationship on the following terms
and conditions.

1.             Termination of Employment.  BGH, BPLSC and Employee agree that Employee’s
employment with BPLSC is terminated as of
                      
(the “Termination Date”), pursuant to Section 3
of the Severance Agreement.

2.             Complete Release and
Other Consideration from Employee. 
In exchange for the obligations of BGH and BPLSC under this Agreement,
Employee agrees as follows:

a.                                     Complete Release.  On behalf of
Employee and Employee’s heirs and assigns, Employee fully releases BGH, BPLSC
and each of their parents, subsidiaries, affiliates, divisions, predecessors,
successors, and assigns, and, with respect to all such entities, their
partners, members, managers, officers, directors, attorneys, agents, and
employees (collectively, the “BGH Releasees”),
from any and all claims, demands, or causes of action (including claims for attorneys’
fees) (collectively, “Claims”), known
or unknown, that Employee may have or may claim to have against any of the BGH
Releasees, including but not limited to any claims arising out of Employee’s
employment relationship with and service as an employee, officer or director of
BPLSC or any BGH Releasee, and the termination of such relationship or service
(the “Employee Release”); provided, however, that this Employee Release shall not
apply to the obligations of BPLSC or BGH under this Agreement.  This Employee Release includes, without
limitation, any claims arising out of any contract (express or implied); any
tort (whether based on negligent, grossly negligent, or intentional conduct);
or any federal, state, or local law, including, without limitation, the Age
Discrimination in Employment Act and the Employee 

 1
 

Retirement Income
Security Act.  This Employee Release does
not include any claims under the Age Discrimination in Employment Act that may
arise after this Agreement is executed. 
Nothing in this Agreement shall constitute a waiver or release by
Employee of any vested benefits under any pension, retirement savings, deferred
compensation, vacation, health care or other benefit plan of BGH or BPLSC in
which he was a participant.

b.                                      Confidentiality.  Except as may be required by law or court
order or as may be necessary in an action arising out of this Agreement,
Employee agrees not to disclose the existence or terms of this Agreement to
anyone other than Employee’s immediate family, attorneys, tax advisors, and
financial counselors, provided that Employee first informs them of this
confidentiality clause and secures their agreement to be bound by it.  Employee understands and agrees that a breach
of this confidentiality provision by any of these authorized persons will be
deemed a material breach of this Agreement by Employee.

3.     Release and Other Consideration from
BPLSC and BGH.  In exchange for
Employee’s obligations under this Agreement, BPLSC or BGH shall pay Employee
those severance payments and benefits, on the terms provided in the Severance
Agreement.  Employee acknowledges that
these severance payments are subject to Employee’s compliance with the
Severance Agreement.

4.     Right to Consult an Attorney; Period of
Review. Employee hereby certifies that:

a.                                       he
has read the terms of this Termination of Severance Agreement and Release;

b.                                      he
has been informed by BGH and BPLSC, through this document, that he should
discuss this Agreement with an attorney of his own choice;

c.                                       he
understands the terms and effects of this Agreement;

d.                                      he
has the intention of releasing all claims recited herein in exchange for the
consideration described herein, which he acknowledges as adequate and
satisfactory to him; and

e.                                       neither
BGH or BPLSC nor any of its agents, representatives or attorneys has made any
representations to Employee concerning the terms or effects of this Termination
of Employment Agreement and Release other than those contained herein.

5.     Entire Agreement; Amendment; Continuing
Obligations.  This Agreement and the
Severance Agreement contain the entire agreements of the parties with respect
to Employee’s employment and the other matters covered herein and therein;
moreover, this Agreement supersedes all prior and contemporaneous agreements
and understandings, oral or written, between the parties hereto concerning the
subject matter hereof and thereof.  This
Agreement

 2
 

may be amended,
waived or terminated only by a written instrument executed by both parties
hereto.  Employee hereby reaffirms and agrees
to continue to abide by all of Employee’s obligations under the Severance
Agreement (including, without limitation, Sections 11, 12, 13, 24 and 25
thereof).

6.     Revocation/Effectiveness.  Employee acknowledges that he has been
informed that he has the right to consider this Agreement for a period of at
least twenty one (21) days prior to entering into this Agreement and that if he
decides to execute this Agreement before the twenty-one (21) day period has
expired, he does so voluntarily and waives the opportunity to use the full
review period.  He further acknowledges
that he has the right to revoke this Agreement within seven (7) days of its
execution by giving written notice of such revocation pursuant to the notice
provisions of the Severance Agreement within said seven (7) day period to BGH
and BPLSC, and that if he does exercise this right, this Agreement shall be
null and void.

7.     Indemnification Rights.  The execution and delivery of this Agreement
shall have no effect on the rights or entitlement of Employee to
indemnification under (a) any agreement between Employee and BGH or BPLSC or
any of their affiliates or (b) any of the organizational documents of BGH,
BPLSC and their affiliates, including, without limitation, MainLine Management
LLC, Buckeye Partners, L.P., and Buckeye GP LLC.

8.     Choice of Law.  This Agreement will be governed in all
respects by the laws of the Commonwealth of Pennsylvania, without regard to its
choice of law principles.  This Agreement
is subject to the arbitration provisions in the Severance Agreement.

9.     Effectiveness of Agreement.  This Agreement will be effective, and the
payments described above will be made, only if Employee does not revoke the
Agreement under Section 6 above.

	
  

  	
   

  	
  EXECUTIVE

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Signature:

  	
   

  
	
   

  	
   

  	
   

  	
  Name:  Robert B. Wallace

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Date:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  BUCKEYE GP HOLDINGS, L.P.

  
	
   

  	
   

  	
  By:  MainLine
  Management LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Title:

  
						

 

 3
 

 

	
  

  	
   

  	
  BUCKEYE PIPE LINE SERVICES COMPANY

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Title:

  

 

 4

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