EX-10.6 5 d206339dex106.htm FORM OF TERMINAL OPERATING AGREEMENT TERMINAL OPERATING AGREEMENT
Exhibit 10.6
This TERMINAL OPERATING AGREEMENT (“Operating Agreement”), dated as of , 2011, is by and among ▇▇▇▇▇▇▇ MASSACHUSETTS PROPERTIES LLC (“SPRAGUE MASSACHUSETTS”), a Delaware limited liability company, having its principal place of business at ▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ RESOURCES HOLDINGS LLC (“SPRAGUE HOLDINGS”), a Delaware limited liability company, having its principal place of business at ▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, and ▇▇▇▇▇▇▇ OPERATING RESOURCES LLC (“▇▇▇▇▇▇▇ OPERATING RESOURCES”), a Delaware limited liability company, having its principal place of business at ▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇. ▇▇▇▇▇▇▇ RESOURCES, SPRAGUE HOLDINGS and SPRAGUE MASSACHUSETTS are collectively referred to herein as the “Parties.”
WITNESSETH:
WHEREAS SPRAGUE HOLDINGS owns a certain oil terminal located at ▇▇▇▇▇▇ Street in New Bedford, mailing address ▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇, which is more fully described below (the “Oil Terminal”);
WHEREAS SPRAGUE HOLDINGS desires to enter into this Operating Agreement covering the Oil Terminal with ▇▇▇▇▇▇▇ OPERATING RESOURCES and ▇▇▇▇▇▇▇ OPERATING RESOURCES desires to operate and maintain said Oil Terminal; and
WHEREAS SPRAGUE MASSACHUSETTS is the owner of that certain real estate on which the Oil Terminal is located, and acknowledges that SPRAGUE HOLDINGS desires to enter into this Operating Agreement covering the Oil Terminal with ▇▇▇▇▇▇▇ OPERATING RESOURCES and ▇▇▇▇▇▇▇ OPERATING RESOURCES desires to operate and maintain said Oil Terminal.
NOW, THEREFORE, in consideration of the mutual promises herein contained, SPRAGUE HOLDINGS, ▇▇▇▇▇▇▇ OPERATING RESOURCES and SPRAGUE MASSACHUSETTS agree as follows:
1. DEFINITIONS.
Each term or expression set forth below in this Section 1 has the meaning stated immediately after it.
Authorizations. All franchises, licenses, permits and other governmental consents issued by Governmental Authorities pursuant to Legal Requirements which are or may be required for the ownership, use and occupancy of the Oil Terminal and for the operation, maintenance, repair and reconstruction of facilities thereon, including, without limitation, the purchase, sale, transportation, storage, loading and off-loading of petroleum products (hereinafter, “Oil”).
Governmental Authority. The United States of America, the Commonwealth of Massachusetts, the City of New Bedford, Massachusetts, and any political subdivision thereof and any agency, department, commission, court, board, bureau or instrumentality of any of them.
Insurance Requirements. All terms of any policy of insurance maintained by ▇▇▇▇▇▇▇ OPERATING RESOURCES and applicable to the Oil Terminal and any building, structure or
1
improvement thereon and all requirements of the issuer of any such policy and all orders, rules, regulations and other requirements of the National Board of Fire Underwriters (or any other body exercising similar functions) applicable to or affecting any condition, operation, use of occupancy of the Oil Terminal (including, without limitation, the purchase, sale, transportation, storage, loading and off-loading of Oil) and any building, structure or improvement thereon, or any part or parts of either.
Legal Requirements. All statutes, codes, ordinances (and all rules and regulations thereunder), all executive orders and other administrative orders, judgments, decrees, injunctions and other Judicial orders of or by any Governmental Authority which may at any time be applicable to parts or appurtenances of the Oil Terminal or to any condition or use thereof including, without limitation, the purchase, sale, transportation, storage, loading and off-loading of Oil, and the provisions of all Authorizations.
Oil Terminal. The premises described in Exhibit A hereto, as well as all property, facilities and activities associated with the receipt, storage, processing, transfer and dispensing of Oil by ▇▇▇▇▇▇▇ OPERATING RESOURCES.
Taxes. All taxes, including but not limited to real estate and personal property taxes, petroleum storage license fees, and registration fees, special and general assessments, water rents, rates and charges, sewer rents, and other impositions imposed by any Governmental Authority and charges of every kind and nature whatsoever, extraordinary as well as ordinary and each and every installment thereof which shall during and with respect to the period of the term of this Operating Agreement be charged, levied, laid, assessed, imposed, become due and payable or become liens upon or for or with respect to the Oil Terminal or any part thereof, appurtenances or equipment owned by ▇▇▇▇▇▇▇ OPERATING RESOURCES thereon or therein or any part thereof or on this Operating Agreement, together with all interest and penalties thereon under or by virtue of all present or future Legal Requirements and any sales tax, gross receipt tax or tax of a similar nature based on a percentage fraction or capitalized value of the Operating Fees, as said Operating Fees is defined in Section 4 hereunder. Provided, however, Taxes shall not be construed to include inheritance, estate, excise, succession, transfer, gift, franchise, income, gross receipt, or profit taxes that are or may be imposed upon ▇▇▇▇▇▇▇ HOLDINGS or ▇▇▇▇▇▇▇ MASSACHUSETTS, their respective successors or assigns.
2. OPERATING AGREEMENT OF OIL TERMINAL AND RECITATION OF GENERAL CONTRACT FRAMEWORK.
2.1 Operating Agreement of Oil Terminal and Term.
| (i) | Initial Term. SPRAGUE MASSACHUSETTS and SPRAGUE HOLDINGS do hereby enter into this Operating Agreement with ▇▇▇▇▇▇▇ OPERATING RESOURCES upon the terms herein contained for a term of five (5) years, commencing , 2011 (the “Initial Term”), as such Initial Term may be extended pursuant to the provisions of Section 2.3 hereof, and subject to earlier termination as is set forth herein. |
| (ii) | Early Termination By ▇▇▇▇▇▇▇ OPERATING RESOURCES or SPRAGUE HOLDINGS. In addition to the rights of early |
2
| termination as described in Articles 17, 19 and 20 hereof, ▇▇▇▇▇▇▇ OPERATING RESOURCES or SPRAGUE HOLDINGS shall have the right to terminate this Operating Agreement at any point during the Extension Term, by giving notice to the other party. Upon the giving of such notice, this Operating Agreement shall terminate sixty (60) days from the date of said notice without recourse to the parties and specifically not subject to reimbursement of any costs by either party to any of the Parties. |
| (iii) | Early Termination By ▇▇▇▇▇▇▇ MASSACHUSETTS and ▇▇▇▇▇▇▇ HOLDINGS. ▇▇▇▇▇▇▇ MASSACHUSETTS and ▇▇▇▇▇▇▇ HOLDINGS shall also have the right to terminate this Operating Agreement during the Initial Term or the Extension Term upon sixty (60) days notice to ▇▇▇▇▇▇▇ OPERATING RESOURCES in writing, without recourse to ▇▇▇▇▇▇▇ OPERATING RESOURCES, if such termination is necessary, in the sole discretion of SPRAGUE MASSACHUSETTS and SPRAGUE HOLDINGS, to facilitate the sale, (except for the purposes of a lease associated with continued oil terminal operations by another party) or development of the Oil Terminal. Upon the giving of such notice, this Operating Agreement shall terminate sixty (60) days from the date of said notice without recourse to the Parties and specifically not subject to reimbursement of any costs by either party to any of the Parties. |
2.2 Consideration. ▇▇▇▇▇▇▇ OPERATING RESOURCES shall compensate SPRAGUE HOLDINGS for the use and benefit of this Operating Agreement by (i) performing the operation and maintenance obligations described herein; and (ii) paying all Operating Fees due pursuant to Article 4 hereof.
2.3 Extension of Term. Provided ▇▇▇▇▇▇▇ OPERATING RESOURCES is not in default of any of its duties or obligations under this Operating Agreement, ▇▇▇▇▇▇▇ OPERATING RESOURCES shall have the right to extend the Term of this Operating Agreement for an additional five (5) year period following the expiration of the Initial Term hereof (such additional period, the “Extension Term”, and, together with the Initial Term, the “Term”). The terms and conditions of this Operating Agreement shall govern the rights and obligations of the parties during such Extension Term.
3. COST DEFINITION AND DETERMINATION.
Costs shall be determined in accordance with generally accepted accounting principles, consistently applied, and shall include operating and maintenance costs (“O & M Costs”). O & M Costs will normally be incurred by ▇▇▇▇▇▇▇ OPERATING RESOURCES, but may also include O & M Costs incurred by SPRAGUE HOLDINGS or SPRAGUE MASSACHUSETTS to the extent that ▇▇▇▇▇▇▇ OPERATING RESOURCES requests assistance by SPRAGUE HOLDINGS or SPRAGUE MASSACHUSETTS or to the extent that SPRAGUE HOLDINGS or SPRAGUE MASSACHUSETTS undertakes to perform operation and maintenance not being satisfactorily undertaken by ▇▇▇▇▇▇▇ OPERATING RESOURCES, SPRAGUE HOLDINGS or SPRAGUE MASSACHUSETTS, as applicable, shall give ▇▇▇▇▇▇▇ OPERATING RESOURCES notice of the unsatisfactory nature of ▇▇▇▇▇▇▇ OPERATING RESOURCES’ operation and maintenance activity and a reasonable opportunity to cure same. ▇▇▇▇▇▇▇ OPERATING RESOURCES will provide SPRAGUE HOLDINGS with a Monthly Throughput Report. “Throughput” shall mean the total volume of Oil sold or otherwise dispensed from of the Oil Terminal.
3
4. OPERATING FEES.
▇▇▇▇▇▇▇ OPERATING RESOURCES shall satisfy its obligation to pay Operating Fees to SPRAGUE HOLDINGS (i) by paying to SPRAGUE MASSACHUSETTS the sum of $15,200.00 per month (subject to adjustment as provided below) (the “Operating Fees”); (ii) by being responsible for ordinary maintenance and repairs to the Oil Terminal; and, (iii) by paying to ▇▇▇▇▇▇▇ MASSACHUSETTS the amount of real estate taxes levied against the Oil Terminal. The Operating Fees specified in item (i) above shall be subject to adjustment as follows: Commencing on July 1, 2013, and thereafter on July 1 of each year during the Term of this Operating Agreement, the aforementioned sum shall be increased in accordance with the percentage increase of the Consumer Price Index, All Urban Consumers (CPI-U) Region I, Boston Index, for the previous year (July 1, 2012-June 30). Provided, however, to the extent such increase in any one year (as calculated as described in the immediately preceding sentence) exceeds 6%, ▇▇▇▇▇▇▇ OPERATING RESOURCES shall have the right, but not the obligation, to request renegotiation of this Operating Agreement. In the event such renegotiation fails to result in the establishment of new terms acceptable to ▇▇▇▇▇▇▇ OPERATING RESOURCES, ▇▇▇▇▇▇▇ OPERATING RESOURCES may terminate this Operating Agreement upon the provision of twelve (12) months advance written notice to SPRAGUE HOLDINGS.
It is understood that this Operating Agreement is in the nature of a net Operating Agreement and that such Operating Fees is to be net to SPRAGUE MASSACHUSETTS and, accordingly, ▇▇▇▇▇▇▇ OPERATING RESOURCES shall bear all costs relating to the Oil Terminal whether or not specified expressly herein, including, without by way of limitation, Taxes. In the event ▇▇▇▇▇▇▇ OPERATING RESOURCES holds over following the expiration or termination of this Operating Agreement, ▇▇▇▇▇▇▇ OPERATING RESOURCES shall be a tenant at sufferance subject to all the terms of this Operating Agreement. ▇▇▇▇▇▇▇ OPERATING RESOURCES shall also pay all public, special or betterment assessments levied or assessed by any municipality or other governmental authority associated with the Oil Terminal during the Term.
5. UTILITIES.
All utilities will be secured and paid for by ▇▇▇▇▇▇▇ OPERATING RESOURCES for its own account.
6. ALLOWED USES/ PROHIBITED CONDITIONS.
6.1 Allowed Use. Use of the Oil Terminal by ▇▇▇▇▇▇▇ OPERATING RESOURCES shall be limited to ▇▇▇▇▇▇▇ OPERATING RESOURCES receipt, storage, processing and dispensing of Oil only in direct relationship to ▇▇▇▇▇▇▇ OPERATING RESOURCES own oil distribution business. Any other use, without first obtaining the written consent of SPRAGUE HOLDINGS, is prohibited. ▇▇▇▇▇▇▇ OPERATING RESOURCES use of the Oil Terminal will be in accordance with sound petroleum industry standards as in effect from time to time.
6.2 Prohibited Conditions. ▇▇▇▇▇▇▇ OPERATING RESOURCES shall not commit any nuisance, nor permit the emission of any objectionable noise or odor, nor make or suffer any waste,
4
nor make any use of the Oil Terminal which is contrary to any law or ordinance or which would cause the cancellation of insurance coverage of any of the Parties hereto. ▇▇▇▇▇▇▇ OPERATING RESOURCES shall not use any portion of the Oil Terminal for the use, generation, treatment, storage or disposal of “oil” (except the product defined as “Oil” herein), “hazardous material”, “hazardous waste”, or “hazardous substances”, as the same are defined under state or federal law or regulation. ▇▇▇▇▇▇▇ OPERATING RESOURCES shall not place any sign or advertisement at the Oil Terminal without first obtaining the written consent of SPRAGUE HOLDINGS.
7. MAINTENANCE AND REPAIRS.
▇▇▇▇▇▇▇ OPERATING RESOURCES accepts the Oil Terminal on an “as-is” basis. ▇▇▇▇▇▇▇ OPERATING RESOURCES shall be responsible, at its own cost and expense, subject, however, to the receipt of proceeds referred to in Section 11 to the extent available, to keep and maintain the Oil Terminal in good operating condition and repair in accordance with sound petroleum industry standards and shall use all reasonable precaution to prevent waste, damage or injury.
8. REQUIREMENTS OF PUBLIC AUTHORITY.
8.1. Legal Requirements. ▇▇▇▇▇▇▇ OPERATING RESOURCES routinely shall review, be alert to and promptly observe and comply with all applicable Legal Requirements of any Governmental Authority affecting use of the Oil Terminal at its own cost and expense including without limitation thereto all Legal Requirements in respect to environmental or water pollution control, testing and inspection of Oil Terminal facilities at required intervals, maintaining records and reporting the results of said tests and inspections to appropriate Governmental Authorities. ▇▇▇▇▇▇▇ OPERATING RESOURCES shall keep the Oil Terminal equipped with all safety and preventive appliances required by said Legal Requirements or Insurance Requirements. ▇▇▇▇▇▇▇ OPERATING RESOURCES shall pay all costs, expenses, liabilities, losses, damages, fines, penalties, claims and demands that may in any manner arise out of or be imposed because of the failure of ▇▇▇▇▇▇▇ OPERATING RESOURCES to comply with the covenants of this Section 8. SPRAGUE HOLDINGS, to the extent required by law to do so, shall also comply with the covenants of this Section 8 relating to property of SPRAGUE HOLDINGS.
8.2 Contests. ▇▇▇▇▇▇▇ OPERATING RESOURCES shall have the right to contest by appropriate legal proceedings diligently conducted in good faith, in the name of ▇▇▇▇▇▇▇ OPERATING RESOURCES, SPRAGUE HOLDINGS (if legally required) or SPRAGUE MASSACHUSETTS (if legally required), or each of the Parties hereto (if legally required), without cost, expense, liability or damage to ▇▇▇▇▇▇▇ MASSACHUSETTS, the validity or application of any Legal Requirement and, if by the terms of any such Legal Requirement, compliance therewith may be delayed pending the prosecution of any such proceedings without subjecting the Oil Terminal or any other property of SPRAGUE HOLDINGS to any lien, sanction, or other encumbrance, ▇▇▇▇▇▇▇ OPERATING RESOURCES may delay such compliance therewith until the final determination of such proceedings.
5
8.3 SPRAGUE HOLDINGS’ Assistance. SPRAGUE HOLDINGS shall execute and deliver any appropriate papers or other instruments which may be necessary or proper to permit ▇▇▇▇▇▇▇ OPERATING RESOURCES to so contest the validity or application of any such Legal Requirement and to fully cooperate with ▇▇▇▇▇▇▇ OPERATING RESOURCES in such contest.
8.4 ▇▇▇▇▇▇▇ OPERATING RESOURCES’ Default. If ▇▇▇▇▇▇▇ OPERATING RESOURCES shall fail to comply as specified in the preceding subsection 8.1, SPRAGUE HOLDINGS may take such action as may be required and ▇▇▇▇▇▇▇ OPERATING RESOURCES shall reimburse SPRAGUE HOLDINGS upon demand for the cost thereof.
8.5 Alterations and Additions. If compliance with all Legal Requirements, Insurance Requirements or industry standards as specified in subsection 8.1 requires substantial alterations, additions to, reconstruction or replacement of Oil Terminal facilities (“Alterations”), ▇▇▇▇▇▇▇ OPERATING RESOURCES shall be responsible to recommend such Alterations to SPRAGUE HOLDINGS; and such Alterations shall be made, at the direction of SPRAGUE HOLDINGS, either by SPRAGUE HOLDINGS or by ▇▇▇▇▇▇▇ OPERATING RESOURCES. The costs arising under this subsection 8.5 in respect of Alterations shall be borne solely by ▇▇▇▇▇▇▇ OPERATING RESOURCES.
9. PERMITS.
▇▇▇▇▇▇▇ OPERATING RESOURCES shall be responsible for obtaining at its own expense any and all necessary Authorizations. The effectiveness of this Operating Agreement and the terms hereof shall be subject to the obtaining of all such Authorizations and to the regulation of all Governmental Authorities having Jurisdiction in the Oil Terminal.
10. PAYMENT AND ACCOUNTING RECORDS.
10.1 Payment. ▇▇▇▇▇▇▇ OPERATING RESOURCES shall pay SPRAGUE HOLDINGS its Operating Fees upon receipt of invoice, but in no event later than 10 days from date of receipt by ▇▇▇▇▇▇▇ OPERATING RESOURCES. SPRAGUE HOLDINGS will likewise pay ▇▇▇▇▇▇▇ OPERATING RESOURCES any other amount due under this Operating Agreement in no event later than ten (10) days from date of receipt by ▇▇▇▇▇▇▇ OPERATING RESOURCES. Any amount not paid when due shall be subject to a late payment charge equivalent to one and one-half per cent (1.5%) per month accruing from the due date through the actual payment date.
10.2 Inspection and Financial Information. SPRAGUE HOLDINGS may, at any time and at its own expense, examine the accounts and records kept by ▇▇▇▇▇▇▇ OPERATING RESOURCES with respect to the Oil Terminal, either by designated accounting personnel of SPRAGUE HOLDINGS or by an independent certified public accountant, and ▇▇▇▇▇▇▇ OPERATING RESOURCES shall make such accounts and records available at its offices at reasonable times for such purposes. ▇▇▇▇▇▇▇ OPERATING RESOURCES shall provide SPRAGUE HOLDINGS with a copy of its normal corporate certified annual report by its independent certified public accountant as soon as the
6
same is available.
11. INSURANCE.
11.1 Coverage. ▇▇▇▇▇▇▇ OPERATING RESOURCES shall maintain, or cause to be maintained, at ▇▇▇▇▇▇▇ OPERATING RESOURCES expense, for the entire term of this Operating Agreement, insurance from reputable insurance companies, general liability insurance coverage applicable to operations, maintenance, repair and improvement work attendant to the use of the Oil Terminal, as well as fire and casualty coverage for the Oil Terminal, and oil pollution and environmental impairment insurance coverage for all Oil Terminal activities, as specified in Exhibit B hereto; and ▇▇▇▇▇▇▇ OPERATING RESOURCES shall furnish SPRAGUE HOLDINGS satisfactory evidence of such coverage being provided by ▇▇▇▇▇▇▇ OPERATING RESOURCES upon demand, prior to the time it is due and 30 days prior to the date when renewal of same is to be effective. All such insurance shall be executed under valid and enforceable policies issued by insurers rated at least B + VIII (or assigned a comparable rating by any successor company with similar standards) or appearing on the approved list of a reputable broker.
11.2 Insureds and Waiver of Rights. All insurance set forth in this Section 11 shall include SPRAGUE HOLDINGS, SPRAGUE MASSACHUSETTS and ▇▇▇▇▇▇▇ OPERATING RESOURCES as insureds and a waiver of insurer’s rights of subrogation against such insureds for loss or damage even though due to the negligence of said parties or any of them.
11.3 Settlement of Claims. The Parties hereto agree to cooperate fully in the settlement of claims under insurance obtained by ▇▇▇▇▇▇▇ OPERATING RESOURCES.
11.4 Contractor’s Insurance. ▇▇▇▇▇▇▇ OPERATING RESOURCES shall ensure that all contractors performing work at the Oil Terminal possess commercial liability insurance, worker’s compensation insurance, motor vehicle insurance, and such other insurance in form and amount reasonably acceptable to ▇▇▇▇▇▇▇ HOLDINGS.
12. MORTGAGEE’S RIGHTS.
This Operating Agreement shall be subject and subordinate at all times to any lien of mortgages that may hereafter be made a lien of the Oil Terminal by ▇▇▇▇▇▇▇ HOLDINGS; provided, however, that no such mortgage shall impair the use and operation of the Oil Terminal as contemplated hereby, as long as ▇▇▇▇▇▇▇ OPERATING RESOURCES is not in default of the Operating Agreement. Although no instrument or act on the part of ▇▇▇▇▇▇▇ OPERATING RESOURCES shall be necessary to effectuate such subordination, ▇▇▇▇▇▇▇ OPERATING RESOURCES will execute and deliver, nevertheless, such further instrument or instruments, as may be requested from time to time by SPRAGUE HOLDINGS at its own expense, as may be reasonably required by any mortgagee of the Oil Terminal.
7
13. LIENS.
13.1 Covenant Against Liens. ▇▇▇▇▇▇▇ OPERATING RESOURCES shall not make, allow or suffer, nor shall any person acquire through ▇▇▇▇▇▇▇ OPERATING RESOURCES, any lien, including liens of mechanics or material men for work done on behalf of ▇▇▇▇▇▇▇ OPERATING RESOURCES on the Oil Terminal, mortgage or security interest in nor will ▇▇▇▇▇▇▇ OPERATING RESOURCES sell, convey or assign any interest in the Oil Terminal or in any buildings or other structures, replacements, changes, additions or improvements thereto or in fixtures thereon. Notwithstanding such restriction, if because of any act or omission of ▇▇▇▇▇▇▇ OPERATING RESOURCES, any mechanic’s lien or other lien, notice of contract, charge or order for payment of money shall be filed against any portion of the Oil Terminal, without the written consent of SPRAGUE HOLDINGS, ▇▇▇▇▇▇▇ OPERATING RESOURCES shall, at its own cost and expense, cause the same to be discharged of record within fourteen (14) days after notice of the filing thereof.
13.2 Right to Discharge. Without otherwise limiting any other remedy of SPRAGUE HOLDINGS for default hereunder, if ▇▇▇▇▇▇▇ OPERATING RESOURCES shall fail to cause such liens to be discharged or recorded within the aforesaid fourteen (14) day period or to satisfy such liens within fourteen (14) days after any Judgment in favor of such lien holders from which no further appeal might be taken, then ▇▇▇▇▇▇▇ HOLDINGS shall have the right to cause the same to be discharged. All amounts paid by SPRAGUE HOLDINGS to cause such liens to be discharged shall constitute Additional Operating Fees.
14. INFORMATION AND ACCESS.
▇▇▇▇▇▇▇ OPERATING RESOURCES will render periodic reports to and keep SPRAGUE HOLDINGS fully informed in respect to the Oil Terminal including, without limitation, the level of performance, the general condition of maintenance and reliability, qualification and training of personnel, maintenance of safety and operating records, and plans for modification of facilities or procedures in connection therewith. ▇▇▇▇▇▇▇ OPERATING RESOURCES shall promptly provide SPRAGUE HOLDINGS upon request with any and all operating manuals, records, memoranda, reports, plans, designs and other documentation or information in respect to the Oil Terminal which SPRAGUE HOLDINGS deems reasonably necessary. ▇▇▇▇▇▇▇ OPERATING RESOURCES will notify SPRAGUE HOLDINGS of any material problems or developments with respect to the operation and maintenance of the Oil Terminal. ▇▇▇▇▇▇▇ HOLDINGS or its agents and designees shall have the right, but not the obligation, to enter upon the Oil Terminal at all reasonable times and; in a reasonable manner during ordinary business hours to examine same, provided such access shall not unreasonably interfere with the efficient maintenance and operation of the Oil Terminal as contemplated hereby.
15. INDEMNITY.
15.1 ▇▇▇▇▇▇▇ OPERATING RESOURCES’ Property. Any property of any kind owned by ▇▇▇▇▇▇▇ OPERATING RESOURCES that may be on the premises of the Oil Terminal shall be at the sole risk of ▇▇▇▇▇▇▇ OPERATING RESOURCES.
8
15.2 Spillage. ▇▇▇▇▇▇▇ OPERATING RESOURCES will defend, save SPRAGUE HOLDINGS and its affiliates, SPRAGUE MASSACHUSETTS and Sprague Massachusetts Gas Company (the “Indemnitees”), as owners of the Oil Terminal, the real estate on which the Oil Terminal is located and the adjacent property, harmless and indemnified: from against all loss or damage caused by ▇▇▇▇▇▇▇ OPERATING RESOURCES, its agents or contractors occasioned by (a) the use or misuse or abuse of water brought in through pipes or ▇▇▇▇▇ for use on the Oil Terminal or of the plumbing, heating or other apparatus, electric or other fixtures; (b) the bursting or leaking of any pipes; or (c) a nuisance, including oil leakage and spillage, made or suffered on the Oil Terminal or adjacent property of Indemnitees, or in the immediate vicinity of the foregoing, arising out of the operation of ▇▇▇▇▇▇▇ OPERATING RESOURCES, except as may have been caused by the negligence of an Indemnitee, its agents and employees.
15.3 ▇▇▇▇▇▇▇ OPERATING RESOURCES Indemnity. ▇▇▇▇▇▇▇ OPERATING RESOURCES shall indemnify, save harmless, and defend the Indemnitees from and against any and all liability, damage, penalties or judgments and from and against any claims, actions, proceedings and expenses and costs in connection therewith, including reasonable counsel fees, arising from any injury to person or property sustained by anyone in and about the Oil Terminal or the approaches appurtenant or adjacent thereto, or other appurtenances used in connection therewith, or associated with the operation of the Oil Terminal, resulting from any act or acts or omissions of ▇▇▇▇▇▇▇ OPERATING RESOURCES, its officers, agents, servants, employees, contractors, lessees, customers, or invitees of any nature. ▇▇▇▇▇▇▇ OPERATING RESOURCES shall, at its own cost and expense, defend any and all suits or actions (just or unjust) which may be brought against an Indemnitee or in which an Indemnitee may be impleaded with others arising from any such act or omission of ▇▇▇▇▇▇▇ OPERATING RESOURCES, its officers, agents, servants, employees, contractors or invitees of any nature. The representations, covenants and warranties contained in this paragraph 15.3 shall survive the termination of this Operating Agreement.
15.4 SPRAGUE HOLDINGS’ and SPRAGUE MASSACHUSETTS’ Indemnity. SPRAGUE HOLDINGS and SPRAGUE MASSACHUSETTS, jointly and severally, shall indemnify, save harmless, and defend ▇▇▇▇▇▇▇ OPERATING RESOURCES from and against any and all liability, damage, penalties or judgments and from and against any claims, actions, proceedings and expenses and costs in connection therewith, including reasonable counsel fees, arising from injury to person or property sustained by anyone in and about the Oil Terminal or the approaches appurtenant or adjacent thereto, or other appurtenances used in connection therewith, resulting from any act or acts or omissions of ▇▇▇▇▇▇▇ HOLDINGS and ▇▇▇▇▇▇▇ MASSACHUSETTS, jointly and severally, their respective officers, agents, servants, employees, contractors, or invitees of any nature. ▇▇▇▇▇▇▇ HOLDINGS and ▇▇▇▇▇▇▇ MASSACHUSETTS, jointly and severally, shall, at their own cost and expense, defend any and all suits or actions (just or unjust) which may be brought against ▇▇▇▇▇▇▇ OPERATING RESOURCES or in which ▇▇▇▇▇▇▇ OPERATING RESOURCES may be impleaded with others upon any such act or omission of SPRAGUE HOLDINGS and SPRAGUE MASSACHUSETTS, jointly and severally, their respective officers, agents, servants, employees, contractors, or invitees of any nature. The representations, covenants and warranties contained in this paragraph 15.4 shall survive the termination of this Operating Agreement.
16. ASSIGNMENT OR OTHER TRANSFER.
▇▇▇▇▇▇▇ OPERATING RESOURCES covenants that, during this Operating Agreement and for such further time as ▇▇▇▇▇▇▇ OPERATING RESOURCES shall hold the Oil Terminal or
9
any part thereof, ▇▇▇▇▇▇▇ OPERATING RESOURCES will not assign or encumber this Operating Agreement nor sublet the whole or any part of the Oil Terminal without first obtaining on each occasion the written consent of ▇▇▇▇▇▇▇ HOLDINGS. SPRAGUE HOLDINGS may assign the Operating Agreement or otherwise transfer its interest in the Oil Terminal with notice to ▇▇▇▇▇▇▇ OPERATING RESOURCES.
17. TAKINGS FOR PUBLIC USE.
If the Oil Terminal, or any substantial part thereof, shall be taken by eminent domain, in pais or otherwise, this Operating Agreement and the Term shall terminate, but if upon a taking this Operating Agreement does not terminate, ▇▇▇▇▇▇▇ OPERATING RESOURCES shall assign to SPRAGUE HOLDINGS any rights for compensation for property of SPRAGUE HOLDINGS, whether real or personal, so taken. If any such taking affects ▇▇▇▇▇▇▇ OPERATING RESOURCES use, ▇▇▇▇▇▇▇ OPERATING RESOURCES shall have the right to terminate and withdraw provided, however, that such taking is not de minimus or otherwise not substantial in either effect or size in the reasonable opinion of ▇▇▇▇▇▇▇ HOLDINGS.
18. RIGHT OF ENTRY.
▇▇▇▇▇▇▇ HOLDINGS may enter the Oil Terminal to view the same, and may remove any placards or signs not otherwise approved, and to make repairs, improvements, alterations or additions thereto pursuant to provisions of this Operating Agreement. Such entry shall not disrupt any legitimate ongoing use of the Oil Terminal.
19. TERMINATION FOR DEFAULT.
19.1 Defaults. The following shall, if any requirement for the giving of notice or lapse of time or both has not been met, constitute Defaults, and, if such conditions have been met, constitute Events of Default hereunder (notwithstanding any license or any former breach of covenant or waiver of the benefit hereof or consent in a former instance):
| (a) | The occurrence of any event set forth in Section 20 hereof; |
| (b) | The failure of ▇▇▇▇▇▇▇ OPERATING RESOURCES to pay Operating Fees, Additional Operating Fees or any other costs due pursuant to this Operating Agreement, when same shall be due and payable and the continuance of such failure for a period of fifteen [15] days after receipt by ▇▇▇▇▇▇▇ OPERATING RESOURCES of notice in writing from SPRAGUE HOLDINGS specifying such failure; |
| (c) | The failure of ▇▇▇▇▇▇▇ OPERATING RESOURCES to keep, observe or perform any of the other covenants, conditions and agreements herein contained on ▇▇▇▇▇▇▇ OPERATING RESOURCES part to be kept, observed or performed, or ▇▇▇▇▇▇▇ OPERATING RESOURCES obligation under any agreement relating to the Oil Terminal and the continuance of such failure without the curing of same for a period of 30 days after receipt by ▇▇▇▇▇▇▇ OPERATING RESOURCES from any person or notice in writing specifying in reasonable detail the nature of such failure. |
10
19.2 SPRAGUE HOLDINGS’ Remedies. If an Event of Default shall occur and be continuing, SPRAGUE HOLDINGS may, at its option, give to ▇▇▇▇▇▇▇ OPERATING RESOURCES a notice terminating this Operating Agreement upon a date specified in such notice, which date shall be not less than 3 days, not including any Saturday, Sunday or other day on which commercial establishments in New Bedford, Massachusetts are authorized or required by law or executive order to remain closed (“Business Days”), after the date of receipt by ▇▇▇▇▇▇▇ OPERATING RESOURCES of such notice from SPRAGUE HOLDINGS, and upon the date specified in said notice, the term and estate hereby vested in ▇▇▇▇▇▇▇ OPERATING RESOURCES shall cease and any and all other right, title and interest of ▇▇▇▇▇▇▇ OPERATING RESOURCES hereunder (other than ▇▇▇▇▇▇▇ OPERATING RESOURCES rights pursuant to Section 15.4 hereof) shall likewise cease without further notice of lapse of time, as fully and with like effect as if the entire term of this Operating Agreement had elapsed, but ▇▇▇▇▇▇▇ OPERATING RESOURCES shall continue to be liable to ▇▇▇▇▇▇▇ HOLDINGS as hereinafter provided.
19.3 Further Remedies. Upon any termination of this Operating Agreement pursuant to Section 19.2, or at any time thereafter, ▇▇▇▇▇▇▇ HOLDINGS may, in addition to and without prejudice to any other rights and remedies ▇▇▇▇▇▇▇ HOLDINGS shall have at law or in equity, lawfully enter into and upon the Oil Terminal, or any part thereof in the name of the whole, and repossess the same as of the former estate of ▇▇▇▇▇▇▇ HOLDINGS and expel ▇▇▇▇▇▇▇ OPERATING RESOURCES and those claiming through or under ▇▇▇▇▇▇▇ OPERATING RESOURCES and remove their effects (forcibly, if necessary) in the manner prescribed by the statute relating to summary proceedings, or similar statutes, without being deemed guilty of any manner of trespass, and without prejudice to any remedies which might otherwise be used for arrears of Operating Fees or proceeding breach of covenant, and upon entry as aforesaid this Operating Agreement shall terminate.
20. INSOLVENCY.
20.1 Termination for Insolvency. In the event of any receivership, insolvency or bankruptcy proceedings instituted by or against ▇▇▇▇▇▇▇ OPERATING RESOURCES under a bankruptcy, insolvency or other law relating to the relief of the adjustment of indebtedness, rehabilitation or reorganization of debtors or the making of an assignment for the benefit of creditors by ▇▇▇▇▇▇▇ OPERATING RESOURCES or if a decree or order by a court having Jurisdiction in the premises shall be entered approving a petition seeking reorganization of ▇▇▇▇▇▇▇ OPERATING RESOURCES under the Federal Bankruptcy Act or any similar statute applicable to ▇▇▇▇▇▇▇ OPERATING RESOURCES or appointing a receiver or conservator or liquidator or trustee of ▇▇▇▇▇▇▇ OPERATING RESOURCES or of substantially all of the property of ▇▇▇▇▇▇▇ OPERATING RESOURCES (other than a receiver, conservator, liquidator or trustee appointed in a proceeding not based upon insolvency of ▇▇▇▇▇▇▇ OPERATING RESOURCES or upon its inability to pay its debts as. they become due), or in the event any execution of attachment shall be issued against ▇▇▇▇▇▇▇ OPERATING RESOURCES or all or substantially all of ▇▇▇▇▇▇▇ OPERATING RESOURCES property whereby the Oil Terminal shall be taken or occupied or attempted to be taken or occupied by some person other than ▇▇▇▇▇▇▇ OPERATING RESOURCES, except as may herein be permitted, and such execution, attachment or occupation shall not be removed within 30 days from the date it first occurs, then ▇▇▇▇▇▇▇ OPERATING RESOURCES shall be deemed to be in breach of this Operating Agreement and this Operating Agreement shall immediately terminate and ▇▇▇▇▇▇▇ HOLDINGS reserves all remedies for breach of this
11
Operating Agreement.
20.2 Bankruptcy Proceedings. In the event of involuntary bankruptcy or corporate reorganization proceedings against ▇▇▇▇▇▇▇ OPERATING RESOURCES, ▇▇▇▇▇▇▇ HOLDINGS may terminate this Operating Agreement by written election to ▇▇▇▇▇▇▇ OPERATING RESOURCES but not before the earlier of (a) 30 days after the service upon ▇▇▇▇▇▇▇ OPERATING RESOURCES of the initial petition in connection with such proceedings, or (b) the adjudication of insolvency of ▇▇▇▇▇▇▇ OPERATING RESOURCES, but said right to terminate shall not be exercised if such petition shall have been denied and such denial shall not have been reversed; provided, that if such petition or commencement is involuntarily made against ▇▇▇▇▇▇▇ OPERATING RESOURCES and is dismissed within [60] days of the date of such filing of commencement such events shall not constitute an insolvency hereunder.
21. DAMAGES ON DEFAULT.
21.1 Surrender. Upon expiration, forfeiture, surrender or termination of this Operating Agreement, ▇▇▇▇▇▇▇ OPERATING RESOURCES shall peaceably surrender and deliver up the Oil Terminal together with all personal property attached thereto or customarily used in connection therewith, all as the absolute property of ▇▇▇▇▇▇▇ HOLDINGS, broom clean and in good condition and repair, reasonable wear and tear and casualties not required to be insured against excepted. In addition, upon said expiration, forfeiture, surrender or termination, ▇▇▇▇▇▇▇ OPERATING RESOURCES agrees to waive and release any right or claim to the Oil Terminal or otherwise associated with this Operating Agreement, including, without limitation, any right or claim pursuant to Mass. Gen. Laws c 91 or the regulations promulgated thereunder relating to the displacement of “water dependent uses”. ▇▇▇▇▇▇▇ OPERATING RESOURCES shall provide such documentation as ▇▇▇▇▇▇▇ HOLDINGS may request stating that such expiration, forfeiture, surrender or termination is in the context of a “voluntary arrangement” as that term is in 310 C.M.R. 9.36 (4)(b). Provided, however, the foregoing shall not be construed to affect any indemnity, right or claim of ▇▇▇▇▇▇▇ OPERATING RESOURCES relating to personal injury or damage to property as provided in Article 15.4 hereof. It is agreed between ▇▇▇▇▇▇▇ HOLDINGS and ▇▇▇▇▇▇▇ OPERATING RESOURCES that any and all structures, buildings, additions, improvements, equipment, apparatus, alterations and replacements constructed by or for ▇▇▇▇▇▇▇ OPERATING RESOURCES on the Oil Terminal or placed thereon by or for ▇▇▇▇▇▇▇ OPERATING RESOURCES including by way of illustration but without limitation thereto, the items hereinafter specified, as well as all items of the type specified, shall be deemed to be and shall be affixed to and be a part of the Oil Terminal, and shall not be removed therefrom except upon written order of ▇▇▇▇▇▇▇ HOLDINGS: oil storage tanks; fuel oil heaters; fuel oil pumps and drivers; oil piping, steam, water and other piping and valves; electrical conduits, wiring and motors; instruments and controls; buildings including all portions and the contents thereof; roadways; fencing; and (also including all appurtenances and all items attached to the foregoing). For the purposes of this Section 21, the term “Improvements” shall include all buildings, replacement, changes, additions, fixtures and improvements now existent or at any time constructed upon the Oil Terminal, including by way of illustration and not limitation, oil storage and pumping facilities and pipelines, with all equipment in or appurtenant thereto. Notwithstanding the foregoing, ▇▇▇▇▇▇▇ OPERATING RESOURCES shall have the option of removing any equipment of their installation which will not impair the use by ▇▇▇▇▇▇▇ HOLDINGS of the Oil Terminal in a
12
manner consistent with its original condition; to the extent ▇▇▇▇▇▇▇ HOLDINGS has an interest in purchasing any such equipment installed by ▇▇▇▇▇▇▇ OPERATING RESOURCES, ▇▇▇▇▇▇▇ OPERATING RESOURCES shall make a proposal for such purchase by ▇▇▇▇▇▇▇ HOLDINGS upon the request of ▇▇▇▇▇▇▇ HOLDINGS.
21.2 ▇▇▇▇▇▇▇ HOLDINGS’ Operation of Oil Terminal. In the event of any dispute between the Parties as to the termination of this Operating Agreement or as to possession of or title to the Improvements, ▇▇▇▇▇▇▇ HOLDINGS shall, pending final determination of such dispute, have the right subject to subsection 18.3 to make entry on the Oil Terminal and use any and all facilities.
21.3 Right to Relet. At any time or from time to time after any such expiration or termination, ▇▇▇▇▇▇▇ HOLDINGS may contract for the use of the Oil Terminal, or any part thereof, in the name of ▇▇▇▇▇▇▇ HOLDINGS or otherwise, for such term or terms (which may be greater or less than the period which would otherwise have constituted the balance of the term of this Operating Agreement) and on such conditions (which may include concessions or free Operating Fees) as ▇▇▇▇▇▇▇ HOLDINGS, in its reasonable discretion, may determine and may collect and receive the Operating Fees therefor. ▇▇▇▇▇▇▇ HOLDINGS shall in no way be responsible or liable for any failure to contract for the use of the Oil Terminal or any part thereof, or for any failure to collect any Operating Fees due upon any such contracting, but agrees to use reasonable efforts to mitigate damages.
21.4 Survival of Covenants. No such expiration or termination of this Operating Agreement shall relieve ▇▇▇▇▇▇▇ HOLDINGS, ▇▇▇▇▇▇▇ OPERATING RESOURCES or ▇▇▇▇▇▇▇ MASSACHUSETTS of their respective liabilities and obligations under this Operating Agreement and such liability.
21.5 Right to Equitable Relief. In the event of any breach or threatened breach by any of the Parties of any of the covenants, agreements, terms or conditions contained in this Operating Agreement, the other party shall be entitled to enjoin such breach or threatened breach and shall have the right to invoke any right and remedy allowed at law or in equity or by statute or otherwise as though re-entry, summary proceedings, and other remedies were not provided for in this Operating Agreement.
22. INVALID PROVISIONS.
If any term, covenant, condition or provision of this Operating Agreement or the application thereof to any person or circumstance shall, at any time or to any extent, be invalid or unenforceable, the remainder of this Operating Agreement, or the application of such term or provision to persons or circumstances other than those as to which it is held invalid or unenforceable, shall not be affected thereby, and each term, covenant, condition and provision of this Operating Agreement shall be valid and be enforced to the fullest extent permitted by law.
13
23. NO WAIVERS.
Failure of ▇▇▇▇▇▇▇ HOLDINGS or ▇▇▇▇▇▇▇ MASSACHUSETTS to complain of any act or omission by ▇▇▇▇▇▇▇ OPERATING RESOURCES, no matter how long the same may continue, shall not be deemed to be a waiver by ▇▇▇▇▇▇▇ HOLDINGS or ▇▇▇▇▇▇▇ MASSACHUSETTS of any of their respective rights hereunder. No waiver by ▇▇▇▇▇▇▇ HOLDINGS or ▇▇▇▇▇▇▇ MASSACHUSETTS at any time, expressed or implied, of any breach of any provision of this Operating Agreement shall be deemed a waiver of a breach of any other provision of this Operating Agreement or a consent to any subsequent breach of the same or any other provision. No acceptance by ▇▇▇▇▇▇▇ HOLDINGS or ▇▇▇▇▇▇▇ MASSACHUSETTS or by ▇▇▇▇▇▇▇ OPERATING RESOURCES of any partial payment shall constitute an accord or satisfaction but shall only be deemed a partial payment on account.
24. NOTICES AND COMMUNICATIONS.
All notices, demands, requests and other communications provided for or permitted under this Operating Agreement shall be in writing and shall be delivered either in person, by prepaid telegram, or other telecommunication device, or by registered or certified mail, return receipt requested, to the following addresses:
| (a) | if to SPRAGUE HOLDINGS, at ▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Vice President, with a copy to Legal Department. |
| (b) | if to SPRAGUE MASSACHUSETTS, at ▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Vice President, with a copy to Legal Department. |
| (c) | if to ▇▇▇▇▇▇▇ OPERATING RESOURCES, at ▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, with a copy to ▇▇▇▇ ▇. Scoff, Esq., General Counsel, at the same address. |
Any notice provided herein shall become effective only upon and at the time of receipt by the person to whom it is given, unless such notice is mailed by first-class registered mail, in which case it shall be deemed to be received on (i) the third Business Day following the mailing thereof or (ii) the day of its receipt, if a Business Day, or if the day of its receipt is not a Business Day, the next succeeding Business Day, whichever of (i) or (ii) be the earlier.
22. LIMITATION OF LIABILITY.
None of ▇▇▇▇▇▇▇ OPERATING RESOURCES, ▇▇▇▇▇▇▇ HOLDINGS or ▇▇▇▇▇▇▇ MASSACHUSETTS shall be liable to the other for any claim in the nature of incidental, consequential or special damages, or for lost profits or revenues, arising from a breach or alleged breach of this Agreement.
23. APPLICABLE LAW.
This Operating Agreement shall be governed by and construed in accordance with the laws of the Commonwealth of Massachusetts.
14
24. ENTIRE AGREEMENT.
This Operating Agreement constitutes the entire understanding between the parties relating to the subject matter hereof, and supersedes all prior written or oral communications, understandings and agreements. This Operating Agreement may be modified or amended only by a written agreements signed by the authorized representatives of the parties.
IN WITNESS WHEREOF, the parties hereto have executed this Operating Agreement, as of the date first above written.
| ▇▇▇▇▇▇▇ RESOURCES HOLDINGS LLC | ||||
| By: |
| |||
| Name: | ||||
| Title: | ||||
| ▇▇▇▇▇▇▇ MASSACHUSETTS PROPERTIES, LLC | ||||
| By: |
| |||
| Name: | ||||
| Title: | ||||
| ▇▇▇▇▇▇▇ OPERATING RESOURCES LLC | ||||
| By: |
| |||
| Name: | ||||
| Title: |
15
EXHIBIT A
PLAN OF PREMISES
16
EXHIBIT B
INSURANCE REQUIREMENTS
General and Excess Liability—▇▇▇▇▇▇▇ OPERATING RESOURCES must supply proof of coverage for bodily injury or property damage to third parties in the amount of $10,000,000. Coverage must be occurrence, or if claims- made, must include an extended discovery period of three years from the last day of the contract. Coverage may be purchased in layers as long as the combined single limit is $10,000,000. Coverage must include coverage for care, custody and control.
Workers Compensation—▇▇▇▇▇▇▇ OPERATING RESOURCES will provide proof of coverage for workers compensation coverage for 1) exposures in the Commonwealth of Massachusetts, 2) Longshoremen and Harbor Workers’ Act, and 3) ▇▇▇▇▇ Act if applicable. Employers Liability in the amount of $1,000,000 shall be provided. All policies shall contain a waiver of subrogation in favor of the indemnitees.
Automobile Liability—▇▇▇▇▇▇▇ OPERATING RESOURCES shall provide automobile liability coverage in the amount of $1,000,000.
Property—▇▇▇▇▇▇▇ OPERATING RESOURCES shall provide proof of either an All Risk property insurance policy or a Named Perils policy and a Difference in Conditions policy covering the oil terminal property on a replacement cost basis. The policy(ies) shall contain a waiver of subrogation in favor of the indemnitees. Coverage shall include fire department charges and costs of fire suppression chemicals.
Difference in Conditions—▇▇▇▇▇▇▇ OPERATING RESOURCES shall obtain a limit of $25,000,000 and coverage shall include Wharfingers Liability, Charterer’s Liability, Terminal Owners Liability and Safe Berth exposure.
Oil Pollution Bond—▇▇▇▇▇▇▇ OPERATING RESOURCES shall post an oil pollution bond in the amount of $25,000 for the ▇▇▇▇▇▇▇ MASSACHUSETTS of Massachusetts, Division of Water Pollution Control, per statutory requirements as in effect from time to time. Each of ▇▇▇▇▇▇▇ HOLDINGS and ▇▇▇▇▇▇▇ MASSACHUSETTS shall be listed as a principal on the bond along with ▇▇▇▇▇▇▇ OPERATING RESOURCES. ▇▇▇▇▇▇▇ OPERATING RESOURCES shall provide a certified copy of the bond to each of ▇▇▇▇▇▇▇ HOLDINGS and ▇▇▇▇▇▇▇ MASSACHUSETTS.
Vessel Requirements—▇▇▇▇▇▇▇ OPERATING RESOURCES must obtain a certificate of insurance from each vessel that docks at the terminal. The certificate must be obtained prior to docking and must include coverage for Protection & Indemnity and specifically list the vessel.
Oil Pollution Coverage—▇▇▇▇▇▇▇ OPERATING RESOURCES shall maintain all coverage required pursuant to the Oil Pollution Act of 1990 and the regulations promulgated thereunder, as the same may be in effect from time to time. ▇▇▇▇▇▇▇ OPERATING RESOURCES shall also insure that all vessels transporting Oil to the Oil Terminal maintain such coverage.