HomeMy WebLinkAboutContract 37115CONTRACT NO l JC
ROAD REPAIR AGREEMENT
BETWEEN
THE CITY OF FORT WORTH
ADEXCO OPERATING COMPANY
THIS ROAD REPAIR AGREEMENT, ("Agreement"), is made and entered into on this
the 25thday of March , 20 08 by and between the CITY OF FORT WORTH, TEXAS
("City"), a home rule municipal corporation of the State of Texas, located within Tarrant, Denton,
Wise and Parker Counties, Texas and ADEXCO OPERATING COMPANY
("Operator") for the repair of streets and/or roadways within the City of Fort Worth, Texas.
WHEREAS, Operator is in the business of drilling gas wells and, in connection therewith,
shall be engaged in drilling and production activities on property within the city limits of Fort
Worth as permitted by the City which abuts, is adjacent to, and/or is accessed by roadways within
the City of Fort Worth; and
WHEREAS, use of the roadways by the Operator for the purpose of performing the
activities described hereinabove may cause damage to the roadways; and
WHEREAS, the City and Operator, for the mutual consideration hereinafter stated, desire
to enter into this Agreement for Operator to repair said roadways for the duration of the term of this
Agreement in consideration of Operator's use of said roadways for the purpose of the activities
described hereinabove,
IT IS NOW THEREFORE AGREED THAT:
ARTICLE 1.
REPAIR OBLIGATION
1. Operator shall repair damages caused by Operator or its contractors, subcontractors,
employees, and agents, excluding ordinary wear and tear, if any, to roadways that abuts any
property permitted by the City and used by the Operator for the drilling and production of gas wells
pursuant to any active Gas Well Permits issued to Operator. The repair obligation shall continue
even if the Gas Well Permits are amended or a Pad Site Permit is issued to allow for the drilling of
additional gas wells. This obligation shall continue during the term of this Agreement, and
Operator shall, prior to the termination of this Agreement, as provided herein, repair such damages
to such roadways, excluding ordinary wear and tear, if any, to the condition in which such
roadways existed prior to the execution of this Agreement. Operator shall make a videotape of all
such roadways prior to the start of Operator drilling and operation of each of its gas wells and shall
provide a copy of the videotape to the Director of Transportation and Public Works. Operator shall
notify the Director of Transportation and Public Works when drilling or fracing operations are
complete so that the Director of Transportation and Public Works can determine if repairs are
required. -«— -
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2. In connection with its obligation to repair said roadways, Operator shall use
materials of the same or better quality than those utilized to surface and/or repair the roadways
prior to execution of this Agreement and in accordance with the current standards specifications of
the City. Deviation from the materials described herein shall not be permitted without the prior
written consent of the Director of Transportation and Public Works. Repairs shall be completed in
accordance with standard engineering practices acceptable to the City.
3. Operator shall repair the damage to the roadways at its sole cost and expense.
4. During the term of this Agreement, Operator shall periodically inspect the roadways
during drilling, fracture stimulation or reworking of any permitted gas well to determine whether or
not any damage has occurred as a result of Operator's activities. Immediately upon discovering the
existence of any such damage to the roadways, Operator shall undertake to repair and/or remedy
same. Upon discovery of damage by the Operator, the Operator will have 48 hours to contact the
Director of Transportation and Public Works to work out a schedule of repairs. Repairs shall take
place within 30 days or immediately if the damage affects the immediate health and safety of
individuals.
ARTICLE 2.
TERM OF AGREEMENT
This Agreement shall commence upon the date indicated above and shall continue in full
force and effect until Operator has completed and/or permanently discontinued the activities upon
the roadways next to any permitted gas well.
ARTICLE 3.
INSURANCE AND INDEMNITY
The Operator shall provide or cause to be provided the insurance described below for
each well unless a as Well Permit has been issued wherein such insurance has been provided for
the issuance of the Gas Well Permit under the terms and conditions described in the Fort Worth
"Gas Drilling and Production" Ordinance and such insurance to continue until the well is
abandoned and the site restored.
In addition to the bond or letter of credit required pursuant to this Agreement and the Fort
Worth "Gas Drilling and Production" ordinance, the Operator shall carry a policy or policies of
insurance issued by an insurance company or companies authorized to do business in Texas. In the
event such insurance policy or policies are cancelled, the Gas Well Permits shall be suspended on
such date of cancellation and the Operator's right to operate under such Gas Well Permit shall
immediately cease until the Operator files additional insurance as provided herein.
l . General Requirements applicable to all policies.
Page 2
a. The City, its officials, employees, agents and officers shall be endorsed as an
"Additional Insured" to all policies except Employers Liability coverage under the
Operator's Workers Compensation policy.
b. All policies shall be written on an occurrence basis except for Environmental
Pollution Liability (Seepage and Pollution coverage) and Excess or Umbrella
Liability, which may be on a claims -made basis.
c. All policies shall be written by an insurer with an A-: VIII or better rating by the most
current version of the A. M. Best Key Rating Guide or with such other financially
sound insurance carriers acceptable to the City.
d. Deductibles shall be listed on the Certificate of Insurance and shall be on a "per
occurrence" basis unless otherwise stipulated herein.
e. Certificates of Insurance shall be delivered to the City of Fort Worth, Development
Department, 1000 Throckmorton Street, Fort worth, Texas 76102, evidencing all the
required coverages, including endorsements, prior to the issuance of a Gas Well
Permit.
f. All policies shall be endorsed with a waiver of subrogation providing rights of
recovery in favor of the City.
g. Any failure on part of the City to request required insurance documentation shall not
constitute a waiver of the insurance requirement specified herein.
h. Each policy shall be endorsed to provide the City a minimum thirty -day notice of
cancellation, non -renewal, and/or material change in policy terms or coverage. A ten
days notice shall be acceptable in the event of non-payment of premium.
i. During the term of the Gas Well Permit, the Operator shall report, in a timely manner,
to the Gas Inspector any known loss occurrence which could give rise to a liability
claim or lawsuit or which could result in a property loss.
j. Upon request, certified copies of all insurance policies shall be furnished to the City.
2. Standard Commercial General Liability Policy.
This coverage must include premises, operations, blowout or explosion, products,
completed operations, sudden and accidental pollution, blanket contractual liability,
underground resources damage, broad form property damage, independent contractors
protective liability and personal injury. This coverage shall be a minimum Combined Single
Limit of $1,000,000 per occurrence for Bodily Injury and Property Damage.
3. Excess or Umbrella Liability
$ 5,000,000 Excess, if the Operator has astand-alone Environmental Pollution
Liability (EPL) policy.
$101000,000 Excess, if the Operator does not have a stand-alone EPL policy.
Coverage must include an endorsement for sudden or accidental
pollution. If Seepage and Pollution coverage is written on a "claims
made" basis, the Operator must maintain continuous coverage and
purchase Extended Coverage Period Insurance when necessary.
4. Workers Compensation and Employers Liability Insurance
a. Workers Compensation benefits shall be Texas Statutory Limits.
b. Employers Liability shall be a minimum of $500,000 per accident.
c. Such coverage shall include a waiver of subrogation in favor of the City and provide
coverage in accordance with applicable State and Federal laws.
5. Automobile Liability Insurance
a. Combined Single Limit of $1,000,000 per occurrence for Bodily Injury and Property
Damage.
b. Coverage must include all owned, hired and not -owned automobiles.
6. Certificates of Insurance
a. The company must be admitted or approved to do business in the State of Texas,
unless the coverage is written by a Surplus Lines insurer.
b. The insurance set forth by the insurance company must be underwritten on forms
that have been approved by the Texas State Board of Insurance or ISO, or an
equivalent policy form acceptable to the City.
c. Sets forth all endorsements and insurance coverage according to requirements and
instructions contained herein.
d. Shall specifically set forth the notice of cancellation, termination, or change in
coverage provisions to the City. All policies shall be endorsed to read "THIS
POLICY WILL NOT BE CANCELLED OR NON -RENEWED WITHOUT 30
DAYS ADVANCED WRITTEN NOTICE TO THE OWNER AND THE CITY
EXCEPT WHEN THIS POLICY IS BEING CANCELLED FOR NONPAYMENT
OF PREMIUM, IN WHICH CASE 10 DAYS ADVANCE WRITTEN NOTICE IS
REQUIRED".
e. Original endorsements affecting coverage required by this section shall be furnished
with the certificates of insurance.
7. The cancellation of any insurance for the sole purpose of the repair of roadways will not
release the obligation of the Operator to meet all requirements of insurance and bonding
under the Fort Worth "Gas Drilling and Production" Ordinance.
8. Operator shall and hereby does indemnify, defend and save harmless the City, its officers,
agents and employees from all suits, actions or claims of any character, name and
description brought for or on account of any injuries or damages received as sustained by
any person, persons or property on account of the operations of the Operator, its agents,
employees, contractors or subcontractors; or on account of any negligent act of fault of the
Operator, its agents, employees, contractors or subcontractors in connection with the
obligations under this Road Repair Agreement; and shall pay any judgment, with costs,
which may be obtained against the City growing out of such injury or damage.
ARTICLE 4.
PERFORMANCE BONDS
1. Operator shall provide a performance bond, unless a performance bond has been
provided for the issuance of Gas Well Permits under the terms and conditions described in Fort
Worth "Gas Drilling and Production" Ordinance, in an amount not less than the amount necessary
to repair the roadways, as determined by the City Director of Transportation and Public Works,
2. Prior to the beginning of any activity pursuant to the issuance of any Gas Well
Permit, unless a performance bond has been provided for the issuance of Gas Well Permits under
the terms and conditions described in the Fort Worth "Gas Drilling and Production" Ordinance,
Operator shall provide the Gas Inspector with a security instrument in the form of a bond or an
irrevocable letter of credit as follows:
a. Bond. A bond shall be executed by a reliable bonding or insurance institution
authorized to do business in Texas, acceptable to the City. The bond shall become effective
on or before the date the Gas Well Permit is issued and shall remain in force and effect for
at least a period of six (6) months after the expiration of the Gas Well Permit term or until
the well is plugged and abandoned and the site is restored, whichever occurs first. The
Operator shall be listed as principal and the instrument shall run to the City, as obligee, and
shall be conditioned that the Operator will comply with the terms and regulations of this
Ordinance and the City. The original bond shall be submitted to the Director of
Transportation and Public Works with a copy of the same provided to the City Secretary
and the Gas Inspector.
b. Letter of Credit. A letter of credit shall be issued by a reliable bank authorized to do
business in Texas and shall become effective on or before the date the Gas Well Permit is
issued. The letter of credit shall remain in force and effect for at least a period of six (6)
months after the expiration of the Gas Well Permit term. The City shall be authorized to
draw upon such letter of credit to recover any fines or penalties assessed under this
ordinance. Evidence of the execution of a letter of credit shall be submitted to the Director
of Transportation and Public Works submitting an original signed letter of credit from the
banking institution, with a copy of the same provided to the City Secretary and the Gas
Inspector. If the Letter of Credit is for a time period less than the life of the well as required
by Ordinance Number 14880, ADEXCO agrees to either renew the Letter of Credit or
replace the Letter of Credit with a bond in the amount required by the City of Fort Worth
Ordinance Number 14880, on or before 45 days prior to the expiration date of the Letter of
Credit. If ADEXCO fails to deliver to the City of Fort Worth either the renewal Letter
of Credit or replacement bond in the appropriate amount on or before 45 days prior to the
expiration date of the Letter of Credit, the City of Fort Worth may draw the entire face
amount of the attached Letter of Credit to be held by the City of Fort Worth as security for
ADEXCO I performance of its obligations under Ordinance Number 14880.
c. Whenever the Gas Inspector or the Director of Transportation and Public Works
Department finds that a default has occurred in the performance of any requirement or
condition imposed by this Agreement, a written notice shall be given to Operator. Such
notice shall specify the work to be done, the estimated cost and the period of time deemed
by the Gas Inspector or the Director of Transportation and Public works Department to be
reasonably necessary for the completion of such work. After receipt of such notice, the
Operator shall, within the time therein specified, either cause or require the work to be
performed, or failing to do so, shall pay over to the City one hundred twenty-five percent
(125%) of the estimated cost of doing the work as set forth in the notice.
Page 5
d. The City shall be authorized to draw against any irrevocable letter of credit or on
to recover such amount due from Operator. Upon receipt of such monies, the City shall
proceed by such mode as deemed convenient to cause the required work to be performed
and completed, but no liability shall be incurred other than for the expenditure of said sum
in hand..
e. In the event Operator does not cause the work to be performed and fails or refuses to
pay over to the City the estimated cost of the work to be done as set forth in the notice, or
the issuer of the security instrument refuses to honor any draft by the City against the
applicable irrevocable letter of credit or bond the City may proceed to obtain compliance
and abate the default by way of civil action against Operator, or by criminal action against
the Operator, or by both such methods.
£ The cancellation of any bond or letter of credit for the sole purpose of the repair of
roadways will not release the obligation of the Operator to meet all requirements of
insurance and bonding under the Fort Worth "Gas Drilling and Production" Ordinance. Any
bond required by the Fort Worth "Gas Drilling and Production" Ordinance shall stay in full
force and effect until the terms and conditions set out in the Ordinance are met.
3. If the cost of the completing the repair is an amount of $15,000 or less, as
determined by the Director of Transportation and Public Works, cash in the amount necessary to
complete the repairs, as determined by the Director of Transportation and Public Works, may be
deposited with a bank or escrow agent pursuant to an escrow agreement acceptable and approved
by the City ensuring completion of the repair.
ARTICLE 5
MISCELLANEOUS PROVISIONS
1. Operator understands and agrees that Operator, its employees, servants, agents, and
representatives shall at no time represent themselves to be employees, servants, agents, and/or
representatives of the City. The City shall not have any control over the means or methods by
which Operator shall perform its obligations hereunder. Operator shall furnish all equipment and
materials necessary to perform hereunder and shall at all times be acting as an independent
Operator.
2. By entering into this Agreement, the City does not waive, nor shall it be deemed to
waive, any immunity or defense that would otherwise be available to it against claims arising by
third parties.
3. This Agreement represents the entire agreement between Operator and City for
repair of roadways and supersedes all prior negotiations, representations, and/or agreements, either
written or oral. This Agreement may be amended only by written instrument signed by the
governing body of the City or those authorized to sign on behalf of the City's governing body.
ARTICLE 6.
FORCE MAJEURE
Events of Force Majeure shall mean any contingency or cause beyond the reasonable
control of a party including, without limitation, acts of God or the public enemy, war, riot, civil
commotion, insurrection, government or de facto government action (unless caused by acts or
omissions of the party), fires, explosions, rain or other weather delays, floods, strikes, slowdowns
or work stoppages.
ARTICLE 7.
ASSIGNABILITY/CONSENT
Except as otherwise provided herein, or except as may be hereafter determined by the
parties, no party to this Agreement may sell, assign, or transfer its interest in this Agreement, or any
of its right, duties, or obligations hereunder, without the prior written consent of the other parry.
Whenever the consent or the approval of a party is required herein, such party shall not
unreasonably withhold, delay, or deny such consent or approval. Operator may assign this
Agreement to any successor entity to whom the applicable Gas Well Permit has been assigned upon
written notice to the City of said assignment.
ARTICLE 8.
NOTICE
Any notice given by one party to the other in connection with this Agreement shall be in
writing and shall be by personal delivery; sent by registered mail or certified mail; or by United
States Mail, return receipt requested, postage prepaid, to:
CITY: Office of the City Manager
City of Fort Worth, Texas
1000 Throckmorton Street
Fort Worth, Texas 76102
OPERATOR Adexdo OperatingCompa
309 W. 7th Street. Suite 400
Fort Worth, TX 76102
Notice shall be deemed to have been received on the date of receipt as shown on the return receipt
or other written evidence of receipt.
Page 7
ARTICLE 9.
MODIFICATION
No waiver or modification of this Agreement or of any covenant, condition, limitation
herein contained shall be valid unless in writing and duly executed by the party to be charged
therewith. No evidence of any waiver or modification shall be offered or received in evidence in
any proceeding arising between the parties hereto out of or affecting this Agreement, or the rights
or obligations of the parries hereunder, unless such waiver or modification is in writing, duly
executed. The parties further agree that the provisions of this Article will not be waived unless as
herein set forth.
ARTICLE 10.
SAVINGS/SEVERABILITY
In the event that any one or more of the provisions hereof contained in this Agreement shall
For any reason be held to be invalid, illegal, or unenforceable in any respect, such invalidity,
illegality, or unenforceability shall not effect the other provisions, and the Agreement shall be
construed as if such invalid, illegal, or unenforceable provision had never been contained in this
Agreement.
ARTICLE 11.
GOVERNING LAW AND VENUE
This Agreement shall be construed under and governed by, and in accordance with the laws of the
State of Texas, and venue for any action arising under the terms and conditions of this Agreement
shall lie in the state courts located in Tarrant County, Texas or the United States District Court for
the Northern District of Texas, Fort Worth Division.
ARTICLE 12.
ENTIRE AGREEMENT
This Agreement and the exhibits attached hereto, constitute the entire agreement among the
parties hereto with respect to the subject matter hereof, and supersede any prior understandings or
written or oral agreements between the parties with respect to the subject matter of this Agreement.
No amendment, modification, cancellation or alteration of the terms of this Agreement shall be
binding on any parry hereto unless the same is in writing, dated subsequent to the date hereof, and
is duly authorized and executed by the parties hereto.
ARTICLE 13.
WAIVER OF TERMS AND CONDITIONS
The failure of either party to enforce or insist upon compliance with any of the terms or
conditions of this Agreement shall not constitute a general waiver or relinquishment of any such
terms or conditions, but the same shall be and remain at all times in full force and effect.
ARTICLE 14.
CAPTIONS
The captions contained in this Agreement are for informational purposes only and shall not
in any way affect the substantive terms or conditions of this Agreement.
ARTICLE 15.
COUNTERPARTS
This Agreement maybe executed in any number of counterparts, each of which shall be
deemed an original, and constitute one and the same instrument.
IN WITNESS WHEREOF, the arties do hereby affix the signatures and enter into this
Agreement as of the ��o7-��qq day of , 20 �� .
ATTEST:
U� o
Director o Development
APPROVED AS TO FORM
AND LEGALITY:
� -
Assistant Ci Attorne : " �- '`��� �.
y � �, cL'!,�';� r'��qU
�� �`� i �!�l�Ie
CITY OF FORT WORTH
By: ���
Assistant City Manager
� . � : r �
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Operator Adexco OperatingCompany
Alan T. Davis
STATE OF TEXAS §
COUNTY OF TARRANT §
Before me, the undersigned notary public, on this day personally appeared Y�((Y�;c��0.
the Assistant City Manager of the City of Fort Worth, Texas, known to me to be the person whose
name is subscribed to the foregoing instrument, and acknowledged to me that he/she executed the
instrument for the purposes and consideration therein expressed.
Given under my hand and seal of office this day of
STATE OF �' ��i�5 §
COUNTYOF � atrda rv� §
Before me, the undersigned authori
day personally appeared
whose name is subscribed to
the act of A- d �x.t� Q
as the act of said /�-d�
consideration therein
Notary Public
20
a Notary Public in and for the State of Texas, on this
I �-���5 ,known to me to be the person
foregoing instrument, and acknowledged to me that the same was
�� a w (the corporation) and that he executed the same
� (corporation) for the purposes and
d in the apacity the n stated.
Given under my hand and seal of office this ��y of , 20�
AMANDA LEANNE WHIiE
Notary Public, State of Texas
My Commission Expires
�a�Y 18, 2012
Page 10
AFK-U (- UU8 I1UN U4112U FM flUMHASS I N'11 TRADE SERV FAX N0, 7134998659 P. 02/03
Compass Bank
1?Q Bn;r4944
Hous!on, TX M10-4444
713 4�MG45 . Fax 713 499.8659
Toi! Frcc 888 827.8850 - Fax 888 6274861
www compaubank.coin
IRREVOCABLE STANDBY LET CER OF CREDIT NO. S29014T Infemallanal7iade Services
1'LACb: AND DATE OIL ISSUE; DATE AND PLACE OF EXPIRY:
1.1OUSTON, TE.XS APRIL 72 3008 APRIL 7, 2009 HOUSTON, TEXAS
A1'1'1.ICANT:
ADEXC'O OPERATING COMPANY
309 W, 7nr STREET
101141% WORTH TX 78102
I3ENEI�ICCARY'1
CITY OF FONT WORTH
1000 THROCKAIoRvroN
IiORT WORTH, TX 76102
GLNTLEMIN,
ADVISING BANK:
NOT APPLICABLE;
AMOUNT: USD50,000.00
(FIFTY THOUSAND AND NOII00 U.S. DOLLARS)
WE HEREl31,' ESTABLISH IN YOUR rAVOR OUR [R.KEVOCABLE STANDi3Y LETTER OF CILFI)1T NUMBER S290t4T
WHICH 19 AVAILABLE BY BENEFICIARY'S SIGHT DRAFT(S) DRAWN ON COMPASS BANK ACCOMPANIED BY'M E�
FOLLOWING DOCUMENT(S)9
CSIcIGINAL ut >.sl:Nist'IC:IARY'SMANUAELY SIGNED STATL•MCNT ON OF1:1ClAL LfsTTERHEAn S"i'ATING THAT:
(�UOTis
AT)lrXCU OPERATING COMPANY HAS FA1LT?D TO COIviPLY W17'fi TI IL TERMS AND CONDITIONS OF THl: ROAD
REI'AlR AGREEMENT l3I;TWLEN THE CITY OF FORT WORTH AND ADEXCO OPERA"I'ING COMPANY.
OI2
THIS C.F?`l1'CsR OF CREDIT' \VILE EXPIRE W1TIiCNFORTY-FIVE DAPS FROM THE DA1'L� UP TH]S STATEMENT AND
ADI;XCQ OPERATING COMPANY HAS FAILED TQ IIAVL COMPASS BANK AMEND T'1-iIi 1XPIRATION OF THIS
1ZTTLR OF CREDITOR TO DELIVER A SUBSTITUTE LETCI'R OF CREDIT \'HAT IS IN A SATISFACTORY FORMAT.
UNQUOTE
SPKCIAL CONDITIONS:
1'Al2'I'IAL AND MULITPLE DRAWINGS AR13 PERMITTED. 1
DRA71'(S) MUST BE MARKED: "DRAWN UNDER COMPASS BANK LETTER OF CREDITNO. S29014T."
tiVE Ht=1{1?I3Y ENGAGE WITH I YOU THAT ALL DRAFT(S) DRAWN Ul1'DGR AND IN COMPLIANCE WITH ALL'I'HEi'17s}tMS
AND CONOlTIONS OF 'CH1S CREDIT WILL [3P. DULY HONORI:n IF DRAWN ANn PRf�SGNTED, BY T1tAC1;ABLE
COURIER OR IN PERSON, FOR PAYMENT I3B'CWGEN THE HOURS OP 8:00 A.M. AND 4:00 P.M. MONDAY'J'IrlI{OUGId
FRIDAY ON A DAY WHEN TIM INTERNATIONAL TRADE SliRYICLS OFFICE IS OPEN FOR BUSINESS Al' 24
GREENWAY PLAZA, SUITE 1601, C OUSTON, TE7CAS 77046ORBYFACSIMILETO COMPASS BANK FAXNUMBER(713)
4494059 CONFJRMEn 13Y A PHONE CALL AT (713) 499-5645 ON OR BEFORE THE EXPIRATION DATE OP THIS LETTER
OF CREDIT.
T[ITS C!'tE171'I' IS SUI)JL•CT TO INTERNATIONAL STANDBY PRACTICES, ISP98, AS PUCiLISi-II;U I3Y 1145 INSTITUTE OF
CNl'rRNATIONAt 13ANK1NG LAW &PRACTICE, BEALtINC; 1NTCRNAT'IONAJ. CHAMBER OJ: C'OMMIsRCF (1CC)
P'1J13i�/AT,ION N/fO�S 0. ) /J
UR LEY /VICE PRI:lSI D FNT —
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6y submitting the applicallon nccornpanying these Terms and Condlllms, IhO Appllcant agrees with Compaos Dank ('Issuer') Isar In ccndderallm of the Issuance of
each irrevocable commercial letter of erodit (each such Iclsx ar cmdll a eQadlt') at the request or Applicant, these Talmo end Conditions will govern each such
Credd, unto.& they am expmttly changed In any Credit or the Application for any Cmdl (the 'Appficallon'), as approved by the Issuer, and, with Mpard to the
provisions of uedlon fi and 7 herein, regardleere of wr a fidhw such Ctedthe Application provide dherwise.
1• REIMBURSEMENTS. Appicanl agrees to reimburse Lsuar for any payment Issuer makes 0) againd a pm¢ntalicn that appcus to imply with the
terms and conditions al lho Cmdl, or pl) Wth the AppticmI'c oulhorlsallon to pay or walver of noncompliance, ❑aimburtemen( I& due the banking day
IDIOM Iccutec payment or honor Is due, except Ihel If the Credd provides for sigh! payment, the due dale for reimbursement Is the day on wtddh Issuer
pays. If a Credit provides fur presenlation of drafts In a currency otherlhen U.E. dichors, Applicant chill, at the Issuer's sole eptim, mike payments to
Issuer with rasped to such drags either (a) in such other currency at such place as Issuer may liked, or (b) In US, dollam at the rate of exchange
determined by the Issuer to be the title In effect In Huuslm, Texas el the time Of payer❑ I of inn draft or, If the to suer determines that there Is no such
rare at exchange, Appricanl shall pay Iacucr on amount slif cluiL In the solejudi men! of Issuer, to meet Issuer's obligations hucunder,
2 FEES AND INTEREST, Appg=l sprees to pay Issuer,
(a) On demand, Issuer's than cuslomuy eommlaclena and fees and all wits and expenses, including reasonable allomeys' fees, paid or
Incurred by Issuer In connection wins the adminfstmflon Or "rereament of these Terms and Conditions or any Credit, and any advisor,
condrmer or other nominated pernwIls face and rah Iha! are chargeable to or paid by [saner;
(b) Inhered on all turns advanced by Ietuer unbl reimbursement by Applicant at the per unnum rate equal to [he lesser of (1) eighteen percent
(16%) or (if) the Prime Rana on the data of advance by the Issuer, provided the[ Duch rate Ofinleresl shall not exceed the maximum rate of
bduccl which may be charged under applicabla law, The dhime Rale'shall mean the rate of Interact unnounxd by COmpaw Bank from lime
to time an RD prime rate (which rare may or may not be the lowest Inlared rate charged by (stuer), [a be canpuled lot actual days unpaid;
and
(c) In Ina event any change In any law or regulation, "In ony tnnerpretaden by court or administrative or gwvmmental authority charged with the
administration thereof than eilhcr,
(1) Impose, modify or make applicable any reserve, special deposit, or similar requirement against lotions of caodd Issued by the
Issuer; or
OU Impose on Issuer any other condition regarding (hose Tema and Canddlant or any Credit;
and as a result, Increase the coat to Issuer of Issuing Or maintaining a Credit, then upon demand by the Iscuer, Applicant shall Immediately
Pay In Imuer, such additional amounts as shag, In the )udgmeN of Die Issuer, be pllfidenl 10 Compensate Imar for such Incensed toll,
together with iniencel on each such amount ham the Oils demanded unlit payment In full at the rare provided In subsection (b) above,
Z PAYMEf1 TO,
(a) Payments due from Applicant hemunder then be made Ohwt withholding, deduction w seLOR and shall be made free and door of any
Woo other than tax" directly Imposed an loran, If the due dale Is not a banking day, Applicant may aged paym off on the next succeeding
banking day with In(ereal far (he addRian&I calendar day(c) dap led,
Ib) To effect any payment due hefounder, Applicant authorizes lower to dtbtl any accnunl that Applicant may have wish Issuer or any direct or
Indirect cubddlary of Compass Bank.
(W Rescission of any payment made to Noun shag revive the obtain" paid.
(d) IsaeaeG mcmis as to [ho dalea and amo snip of payment& due and made am presumed cmed and eampnele,
4 REPRESENTATIONS AND WARRANTIES, In order to Induce Issuer to Issue each Credit, Applicant represents and warrants to Issuer thah
(a) Each financial statement of Appllcaril furnished to Issuer was correct and =plate and truly pr4wriled the financial cmditim of Applicant as
of the dale thereof and, since (he dale of the near such financial statement, them hac bean no material advance change h the financial
contlnim of Applicant.
(b) Each rlalruneN and red provided by Applicant in each unit every AppLbalfon is cooed and complete.
(c) Applicant has the power and H duly aulluritzed to agree to these Terms And Conditions and Is and will be duly authorzad to submit each
Appllgllon (bra Credit and each mllale:al doasment retained Ia herein of in any appticallm for a Credit,
(d) These Terms And Cond'Nona, each Application for a Credit and each dosumcd creating rr granting a security internal In Collateral no
hereinafter defined), when oubmwad, win car;Rfule the vend and binding dillgallons of Applicant, "hurresble In accordance Willi (hair Perms,
mcapl As limited by bankruptcy. Inaulvency or slmliar laws of general application afreaing the enforcement of credtlors' rights generally and
mcepl to the exied that general principles or equ iy mlghf aged the specific mfarccmcrh( of these Terms and Conditions or such collateral
do cum enta.
(s) There is no rugallon of odministraliva proceeding pending or tiueatened ago)ns( Applicant wWch mfghL It adversely determined, malerfaay
affect Appgeanl's ablIllylo perform Its Obligations under [hate Terms and Credl➢cans.
IQ No default cflolzi, nor hot any even(, Be( or omission omrrmd whldh, with the It of nonce or the passage o1 rime, would contutule a
delaull under any Instrument or agmamenl eddenrdng Or aswdnp any Indebtedness w tiablWy of Applicant to any per-..wh or chilly,(➢) Applicant has no Indnblednea for borrowed money, nor any obligation contingent m tNherwitc, directly or indimctiy guaranteeing or in any
manner providing tar the payment of the indeblodneas of another, =rapt those dlsdosed an the mod mce d financial ctatemento of Applicant
fumLhad to Issuer and except far endoraorneals for collection or deposit In the ordinary course of business.
(h) Applicant has good and marketable flue to all of the Coaaleml (as he chragsr defined), abject, to no. Ren, sawdly Inlernsl, mortgage,
eneumtrance or charge of any kind eacapi as provided heroin.
51 COVENANTS, Applicant agrees thin so long as drawing Is available under any Cmctl, and unlit letuar has been retmbuned for all drams honored by II
under any Cmdk, Applicant wW comply hh a umcly mannerwith:
(a) no obligations hucunder and under all security agreement mortgages ter assignments securing the Obligations no defined In Bodlon i f
heroin; and,
(if) The following covenant,.
(1) Applicant shall furnish (o Issuer within gg days after the end of each list*$ year of Apptioant financial ztatemenla of Applicant lot
such you In ransennble doing and eabofadory In scope to Issuer and, If required by lasuer, either audited or Certified by an
Independent carrihed public acaeunlant satisfactory in metier,
N) Applicant than lurnlsh to lasuer within xfi days after the end of each of the first three quarter of such focal you of Appficted,
financial dalemanto o(Appllcani for the period from the beginning or the fiscal year is the and of such quarter, an In restorable
detail And eatirfadory in saga to the Issuer,
(lit) Applicant shall Nmish to Issuer such financial lnfornalfon fagarding Applicant as Iemormay tram time to time reasonably Mqued
and shag nt
Permit mPr0tentive& of Inrver to visa and Inrps-_f the properties and books and recarde clAppncanl at any reawnablo
lime and as often As may roaamnbly be dedrad.
(IV) Applicant shelf pay all Iawtul lazes, ass@srmento and gwtMMulai charge upon it Or against its properties prior to the dale of
which penalties attach, unless and to the owl"( only that lie same chaff be cenlesled In good faith and by appropriate
proceedings.
(V) Appnnnt &hall not eal4 lease, transfer or otherwise dispose of ail Or a subclanbal part of fro assets (other Than sales made In the
Ordinary course of buotnexi),
lull If Applicant Is A corporanm, Appllant shall maintain no wrporale "film" unit not merge Or consolidate with ¢ Into any Other
corporation, unim Applicant Is Ric surviving corperaghn.
(oil) If Applicant Is a Ilmiled RabtiRy company, Applicant shot] maintain no extalance as a limited Ilsbirdy company and not merge of
wnscildale Min Or Into any other fimllyd IlabnAy company or corporation.
(vift) If Applicant In a pannerahlp, Apprileml ahsll not liquidate, terminal@ Or dissolve.
4 RESPONSIBILITY OF ISSUER,
(a) Delivery to Issuer or any of Rs Correspondents of any documents purporting to comply with the requirements of A Credit shall be eumdeN
evidence of the validly, genuinentat and tufti:lmey thereof and of the good filth and proper priforrimman of drawers and ucert of the Credit,
(heh agent; and austgnaes, and Issuer and Rs Corespondents may rely Ihermn Without liability or reaponriblllty Wlh mapecl thereto, even R
Balch docummis should In fad prove to be In any Or oil respects Invalid, Inndticienl, faudulenl Or rallied.
(b) rawer Is eypmssly authorized and directed to hone any request for payment made under and In compliance with the terms Of a Credit
without mgud to, and WRhmd any duly on the Isruefs pad to Inquire Into, the exialenca of any disputes a c onboveraes between Appticaril,
any beneficiary of any Credut or any rathv person, firm ar carperanon or the rights, duties or RabfiiVes of Any of them.
(e) Issuer It expressly nulhariaed and dreded [a honor any electronic plesrntegan R Mc&vc that cenformt to the requlmmenly of the Credit
and to heal as valid, genuine And sutrrdrnl any property 7ulhenlleied dednetdc record Or etedi'mIC dynafum.
(d) Issuer than not be nabie to Applicant ar my third party for:
O the use made at any Credit or for any ast Or OMlsslm of any benerdary Ihemot,
fin any tlduy in giving cr fairing to glue any notice,
(� any after, neglect Or default Of Any of Is Conespondenls,
(Iv) the vafidily, "Wency or genuineness of any document Assigning of Purporting to assign lira Crest[ or any benefits thereunder w
any net In reliance Ihereen,
IV) offers in franslafim or In the Inlerpictatim army of thin Irme of a Crodd, or
(0) errors, dalayr, mlcdegverlr Or losses in the bamemisdon of fiancee and communications by mean; of &W.I,F,T., norfronic mall,
farm, 1wx, lalewpy, leferax or computer genaralod Itfecommunlallonc w other documents or time forwarded In connection with
a Cfadl Or any relevant draft.
(a) Any Action taken or =filed by iesuar cr Ito Corrghmdenra In cormwilon with any Credit, any Inclructlona of Applicant Or any drafts,
documents ormerohandice relative thereto Shall, If In good faith, be condudvely deemed muihodred by ApplIcant. whether expressly so annet.
(f) If any Credo shall have been requested by Applfcan] for the BwOMmodadm of a third party, any Indrudim, consent, approval and other
action or fnacltm of Duch tWrd party with respect to the Credit or banarteov (hereunder than be doomed to be the act Or aminclon of
Applicant for 4 purposes heroor, and Issuer than be entitled to rely thereon,
(g) Isver and Rs Ccnaspc &hems cam authorized to accept and motive As documenh at Insurance under a Credo w Instructions of Applicant
sillier Insurance panel" or eadNiclles of Insurance.
�• LBAITATION Oil UAIULITY, Specifically, but without llmltallm, Issuer
shall not be reQansible to Appticanl for, and Issue's rights and remcdles agalrel
AppUnnl shall nut be impoked by.
(a) Adim or fraction required or permitted unde,
t) the Uniform Commercial Code In effect where and When the credit Is Issued or the Wernatiorrel Slandoy pmctIces Ott CISP'),
Unless the ISP Is not recognized by the laws of a practice of the industry (a wtnlch a party to any Credit Is a member, or, II the ISP
la not applicable to any Credit for the f scgdng reasons, the Uniform Cuotomc and Practice let Documentary Credits ('UCP') In
effect wfien the credit Is Issued,
trl the low or published pradree nr es to bvfilch the Credd Is subject,
(ti0 an app licabfa gran grand pro dice of banks Ihal mgularly Isere lotto. of Credit,
(Iv) an applleable order, raring or Population of any cowl, wbanli r, or govemm and agency,
(v) a pubUchad dstemeN er hleryreUllon on a mailer of appscabla standard bank pmetlro, or NO an opinion rocalv.d f om fr:utrc legal counsel en r maitrr at law or form bra
(b) Honor of any prasenlalJon rho? substanlian aspad engaged by Jssuar on a mailer of p-acflca,
compliance by the beneficiary, ypUOL with the terms end cendlllona of the Credit, even It the Credit requires shirt or Iilemi
(r) Honor of a nonnegotiable or Informal of unmarked demand or of a demand by the bcntfidary proeenfed el°elronice y, even If In C7adlt
requires that the beneAdary's demand he in the form of a drag and °tales that It is drawn under the Crdll,
(it) Honor of documents signed or presented by er on behalf of, or requesting payment law, to, the 6rnaficta yc purported euccescar by Operation Of
(e) Hancr of a presentaton without repaid to any nondonxmeniary conddlen(s) In the eredll,
(1) Honer ar clher ewgnglon Ora presenlalion or Other demand that later is determined to have inducted toped or rrrutlWanl tlowmenls orlbat
Othuwise war afreded by the fraudulent, boil refill, or Illogal conduct Of the b mind tO or other person forged
the Issaere employees),
Including fitprpayment to a person who Paler Is determined to have carped the dgnalure of O beneficiary, namlmled bank, m assignee of relief of
aedd procads,
(➢) Hwarof a presentnton up to the amount avallabto under the Credd against a dmn or other documents chiming efnpunl(G) in excel of the
amourd avalahle,
(h) Relmbursamenl of a muminafed person that does nor give value or that misrapresenta the built on Mdcn U dafms rdmhursemenl,
O Didwner Crony presentation her does not fiddly complyorlhst Js fravdu eel,forged or dhenNsc not antIf cell arele
0) ❑I¢honer, authorized unable
by Applicant, which occurs upon or during the continuance Oran Event of Default (defined below), of far which Applicant
Is unwilling or unable Ia reimburse Issuer,
(r) Dishonor with dlsorep , unless
s the
to p urry ter a° late as the dose of the third banking day after the banking day on which Issuer
receives a pruenlatlon, unless the LYedll expressly ptevidts for an accelerated rarponse (a letterer cradil does nor expressly provide for an
acceferaled response If it Incorporates the ISP arthe UCP or olhamise prmidec for giving notice within a reasonable Limp ar without delay
after deciding to dishonor wooer), or
0) Ratenlich
cking r of letter or Credit proceeds based d ( a vafd oxerdse of Issuers cel•oil dghls or on m apparently apprieable pllachmont order,
blocking regulation, q third -parry claim nett eel fO Issuer,
LL BANK DISCRETION.
(a) Issuer may assume Thal any beneficiary or mhor prpenler ads In good mlth and that any precenmlfon or other demand Is nenfroudutenl.
(b) Unless the Credit permits and Issuer spesifieally agrees, Issuer need nil check the Oulhenllclly or aulhoilly of any purported benafnary
slgnsluro, oven ti let OUmrtranCacllma the beneficlaryis a cuctomer cr Its signature k othemitc known to Issuer.
(c) Iasueez agreement 10 use or um of t isaellon In one or more instances shad not wake Its fight, rich or without noticu to APpneanl to use Ile
dlacreUcn ditferemly In other shnflar krianoes and ship nor establish a course of conduct on which Appltanl may rely fn any a,her Instances
under the Credit (or any olhu!offer of credo),
g- APPLICANT!. REAPOUSiDILITr FOR LETTER OF CREDIT TEXT.
(a) AppUcpnt le rurpondble for preparing or approving Cho teal of the Credit 0s Issued and Us received by the beneficiary, Issuer'°
recommendation or drafting of text ar ure or non -ace or refuel to usa Iext submitted by Applicant thrill not offset Appocant's ultimata
rasponslbtllty for the final text and Ile facdpl by The bentiftdsry. Far example, Applicant OClmawiedget and accepts respansibUily for the
forlowin➢ ricks;
III) Appteanl accepts the ddr that the wrong person may obtain peymenl to the indent the Credit Incompletely Identifies the
beneficiary. Ide^dnes more than one beneficiary, permits transfer or or succtsslon to the beneficiary's rights, or does not require
Presentation Of the original Credit or other unique document, (Issue Is not respensibte for delacUng forgery of a hcnefidaryc
dgnaWre, Applicant Is obagrled to Indemnify and rdmburse Issuer forp°ymenle against forged as wed all genuine pree°ntallons,)
UO Applicant accepts the Ilsk that a providea in rho Credit will be Ignored la (he extent If requires Jrcuo fa verity lade rather man
examine dO=JM"U or Nils Is Identify the dneumenl(c) In rthidh the praNstaa applies. (Issuer is not responclbfe !or enforcing
eondnlons In Jhe Credll,)
Uti) Applicant aecepjs the risk that, 10 the extant the Credft Provides for a foQense to a presentagpn on an Acelmla (a.p., sane o
nal banking day) bads, Issuer may honor, a noncomplying preranLaGon or he precluded ruff raising ONarepanelaO although
Issuer givrs notice at dishonor t atIng dlscrepandes berate the dote of the three banking day period permllled by !hose Terms
and hough
permitted dlresponse xilhlnl the a Ordinarily permitted under the CZ5 the Iseruff could have UCC any cco(nvention Applicabor Preclusion) had the le to (he Credit. or Ihezo Toms _
and Conditions,-
Uv) AppUani accepts the risk that the Credit wit be Interpmted or applied other than as Appfrcanl Inlended ID the eaicnt tin Credil O
Permits presantation ai a place other than the pier of Issuance, @) pp¢nmds app6calion of Iris —,or practice rules wdh which
Applicant Ir unhamruar, (M) includes ambiguous, inconsistent, orimporihlo requirements, (Iv) does nor apecify an expiry dale, (v)
vices not Identify the Applicant, (vi) requires lemnlnation or reduction against a preenlatlan made by Appacent rather than the
beneficiary, or (vlq h➢s to hncorperole appropriate fader of ¢add practice Pules
(v) Applicant accepts the risk Thal lastimmmy pay a demand farreimbursament, Fndamnificagan, orcharges (spent from any demand
let honer) whom the Cradlr requasls the beneficiat to Isere Its cam undertaking or authe re; advice, conflmtallon, or Other
action under the Crcdn and does not effectively Ibnn him¢ 'a or ApptinnUG obligations snoref OA applicable law and practice rules.
(wit Applicant mtceprs the risk that the benegdary may not Issue or perform Wane requeslad undertaking and that Issuer may
nonothal°as honor the benefaarys demands %1houf regard to the beneddary's cwmpUsnca wdh those or any car or
nondocumcrllary conditions.
(b) Appilmnl Is responsible for making mi2an the the Credit Is canddenl with the underlying Obligation, suitable for Appllcanl'e purposes• and
received by the benefldary In time to permit the banenctary and Applicant to review If and to request any desired amendments.
10. APPLICANT NOTIFICATION OF OBJECITONsiRATIFICATION,
(a) Applicant agrees to nodly Itsverof any ob)ecUon Applicant may have to Isateh Issuance or amendment of the Ciedll, Isauera acceptance a
rrJacilon Of 0 ptecanlrtlon under the Credit, or any Cthsr action or Inaction Taken or proposed to be taken by Issuer under or In connection
with these Tent and Conditions a the Credit, Applicant mud glvc Issuer notice of obJecticn by expeditious means within twee banking days
error Applicant receives notice of the action or Inadipn Issue hoc liken or prepared to lake. For example, within time banking days after
malting O Copy of the Credd Critic airg
or
or coplos of documents presented under the Credi, Applicant meat examine them, Paltry Issuer
of any defect In the CradCreditac leafed of any discreppnsy In any presentation to which Alillwnl objects, and rpadfy each curb defect or
rfisompOncy, even It Issuer has Indrrated de satisfaction with the Issuance or presentation Cr P;$uses owsrensss at the dated or ditcapancy.
(b) Appllenl'c failure to give (Imely and specific nOUca of obJretion than rake Apiefranl'a objection, authorize issuer's Pollan or Inaction, and
absolutely pedude Appticat from raising the ob)"llon are defense or claim against Issuer.
(a) APPtcatd'a acceplance Or retention of any documents pmsenled under or in connection wan the Credit (including ongim(s or topics of
documents sent directly to Iteuer) or of any properly for Match payment Is auppefted by the Credlf shall ratify Issuer's honor of the documents
and absdutely pedude Applicant from raising a dafene or palm with respect In Issuers honor of lhs Pdevanl presenrallon.
ts• COLLATERAL GECURM. Az seCunly for the prompt and unranditlonal payment of air obligations and habUities of Applicant to iswa end ell or Issuers
clelms against Apptinnl, rfielher arising cr Incurred under Diego Terms and Conditions or e(herwlss, whether now mdsling Of hereafter Incurred, and
whelher now or hereafter owing 10 Or acquired In any manner by Issuer (•Obligations•), Applicant hereby grania to Issuer a Urstpdodly sewdly In oosr in
Applicant't prazent and future dghls In oil of the following property;
(a) Applicanrc pmpefly In IesUCf'e actual or condnrdive possession or In Vansi to Issuer Of Irware corespondents fen or for Applicant,
whOMu far COUc0iin or Otherwioe;
(b) Deposlls (general and special) and credits of Applicant with Issuer or any compass Bank slrdiale (Including, whlhcul 1117111011m, any daposfl
made pursuant to Section 15 hereof), Including gem° In safekeeping with Issuers agent or bsllee, and Any claims by Applicant against Issuer
at any lime exlstilg;
to) Additional properly In which Applicant has conveyed p secodly Interest to !truer or which Applicant agrees to earivey upon demand of Ieuc
ro
and
(d) Proceeds of any of the foregoing (ag of which, together "fill adddlons, accessions or cubsUtus Tollateral) until Mich time as at the Obrrgadcne have been fully discharged. van , Is hereaflm cailadFvoly sailed the
Applicant agrees to sign and/or deliver to lasuar, upon IssveYe feqst ue, such cauuHy agreements, murtGagw, on deeds of tuff, asslgnmenls, document,•, insitumenls
te Enandng f rls Ostia
Nucor may require to ponie
reimbvme [sluff for all Costa totaling hereto.
d, rapid f or record a rectory Interest In any hem of Collcleral 10 furedose upon any ouch Item Ono 10
I
Upon and during Ue continuance of any p) Event of Default fdcfned below), (11) material adverse change In Apppccanl's business or financial candlUm, pit) material
adverse Change In Wa CdlPlcral, (rv) malarial chant° or Ihrealenad change In the drrad or Lntltad ownership or emltot of AppUcant or that segment of Appficasl'
business Involved in the underying Uansaction, (v) hn)unctlon action, beneridvy wrongful dire ar atOWP ilOrl or other even) that lhmatens io hatextse m!"verse Issue's
Contingent Uab%ply beyond the time, amount, a oil, of limit provided In the Credit wthese Terms and Con0l long, Appliarnl must deposit wilh Illicitor , on demand, Cash
amounl(s) In the pggregale amount 0fthe Ob➢gatlona
On reeelpt of the Cash deposit, Issuer chair Issue ea blimlels) of depot in Appllcmt'a name to be bald by Iawef as addillonal Collateral under the preceding
Para➢repe TheObligmaturity dales for the and
oth at deposit shall (h so opted by the parties m, absent agreement, ss determined In good faith by Issuer in light of
the nature of the 06Ilpalimc. inlrrecl and all other lsrtna shall be shone Ihm afeerd by Issuer fer certificates of daposll of comparable amount and maturity.
Fm pumuses of this Section 11, the term "Issuer' shall include Con -pals Bank and any Compasn. Bonk opiate,
12. ODCUMENT DELIVERY. Any dowmarus required undalhia Agreement may be transmilied by dlglml, dactmas of other telecommunications.
13. COMPLIANCE WITH LAWS AND INSURANCE Applicant agrees lO comply with at OppRcable foreign and domestic lam and regulallms wlih rasped
to the Goods.
14, POWER OF ATTORNEY, Applicant b(avacably appoints lesuarlls allmney in (ad to exaale, In the name or Applicants acclgnmenls, endarsemenls or
other Instruments at dowmmis of my kind or descnplim cemhp Into the possession Of tswerunder a Credit or Instructions of Applicant. In exewle, file,
register or record any document or instrument and to do such other ado as Applicant may he mqutred to do hereunder, upon failure OI Appucanl to so
act.
is, EVENTS OF DEFAULT.
(a) Each afthe following Is an Event of Default under Ihuoe Tome and Condition;:
U) nonpayment when due Of any Of the Ohfgallcns,
61) Applicant'; la0me to comply Win m Pedefm any provision of these Terms and Condillms m anwully document tale red Ica In
Serum Ile y ee
00 pPncanYs (epudlstm ofthece Teens and Conditions,
(IV) Applicant's death, Inamnpelenae, dissaldfm, Insoivertcy, bankruptcy, or other similar aanddim or pmcceding,
(v) Any reprelmiallo i made by Appllpnr, whether In these Terms and Conditions m ctherwise, to Induce Isomer to I;suo any credit,
Is untrue m Inemrect In any material resperl
(b) Upon the ocumence of any Event of Defaults ail of use Obsgavms shall, At the bsuW' opllon and without nallea or demand, mature and
became Immediately due and payable, with Inlarest at a per annum late four pareenlagc pdnls In =call of the Prime Rote as herein defined
(prodded such Infered rate does not "aced the maximum rasa of Ineesl which may be charged under applicable law) and la%ucr may
pursue any comedy ovaaable at law er In equity to severe, called, anionic, or satisfy the 06Up2licna.
(et As to Obligations which are absolute but not then due, Issuer may, wilhoed demand or notice, dedare Thom Immediately due and payable,
prodded that In the "to of accelerated Obligations to reimburse litucr for an unmaluned dran accepted or a deferred payment Undertaking
fnwrred, Issuer chill give aedd to Appri=nl in the amount of the dlacohml It would have given If lssuer had pumhasad such acepled Bran m
claimed payment undertaking from the holder.
(d) As to Obggauons wMeh am cnr0rigent and might not be made ahsclule by a drawing undmthe Credit wilhin a reasonable period oreme (not
to mrcaed 90 days after the occurmnce of the Event of Default), pplicant must, un demand, deliver addillanel Collateral or procure the
benandatyg refroze of the Credit by procuring another bank's substitute Idler of eredl by othermeana.
(a) To the finest extent pefmliled by low, lewefmay eel off and apply an depodle (general or spacial, lima or demand, provnlmnal or final) and
other credits as to which Issuer Is a dehinr and Applicant Is credllar against all of the 0h11gatlons, without natee and wlihmut repaid to the
Place cr currency of payment or to the ecrUngenl, absolute, ormatured &talus of writ credit& ar of the Obligations. To the extent that [;%"r
honor's a I'muenlallm for "ran 11 remains unpaid, Jaguar may assort lie rights or subrogation under applicable law, whether the honor
callc5es all m 0* pad Of the undedying cbggslim, pplianl must, an maser ibie native, cooperate with Issuer in Its fie;erUcin of Appliaont's
rights agalnd the beneficiary, the bonelidary's lights against AppBcanl and any olher right: that Ivssuer may have by subro➢slim or
assignment,
(f) As to the Collateral, Issuer may exercise all remedies anllabla ender the Credit, security documents referred In In SacUgn Ile or Other
pppgnble law, and Applicant must mongrels, Istida may retain possasdcn of the Collateral, or take possession, In which case App.7canl
must make the Collateral avnllabla to The Issuer at any reasonably emvehienl tone and place which Issuer designates. NIW regad to
deemed
commercially governr UCC Article 0 or equivalent secured bansactlens law, any sale or other dispadUm or redizatim by Icwer shall be
vsallusual Practices of commercial benkendliquidating j and final lslmtar collatf In ads or eral at the price the Credit ducted gfjcr 11" (5) days Pilot s Issued vlal�e place m and Iwbve by CGlwith the
e
located. Appgcml shall remain gable to losuer for any dericleney of the net proceeds In maeilnp Ilre Ohlipotcns. AppUpnl further aprera to
reimburse Iwo far all expenses (including attorney fees) Incurred by Issuer in seiEng m dharwisc melfring upon Or ollemplIng to sell or
reaklze Upon any Ilem of CagelaN.
16. INDEMNITY. pplianl agrees to indemnify Compass Bank and Ila affJlale:, their dlredws, officers, emPlOY"o, allomeys, and agents against ctnlmo
and nabtklle; (and felaled ends, Including msonable allemay'e fags, export wilna4s togs, and other dispute resolution expenses) that brine out of or In
C0N1ECll011 with these Tema and CmdiUmc er the CradlL
17, ARBITRATIONt rawer and Applicant apnea that upon demand of eah at party, whether made befog or Offer the Inclltutlon of any Ice of proc"ding, but
Prior to rendering of any judgment In ]hot d 11cedng, all dirpuhes, claims and controversies between them, cis out of or minted to theca Terns
and Codatme a l Inca Credo, (Inducting filijwiUt IlmltaUm contract dtrpulr. and fort claims) shall be arttllated Pursuant in the Cmnmerdal Rules at the
American Arthmtim AssocIsum. Any arbitatlon proceeding held pursuant to this aMllraUon PWAL on shall be conducted in Houslan, Terse, or al any
adhu plats selected by mutual agreement of The parties. Jvigmenl upon any award rendered by any arbitrator may be entered In any court hossing
ludsdldion. Only ano erhilmler Is requited unless the claim exccds 31,000,000 In which rear throe mbllralona shall be appeinled, Any srohrator muck he
an attorney Ilcensed 10 Pr1i In the state In width Ups hoofing takes place, and knowdedgeabte In the areas of cornmerdal law and letters of credit. This
arbitration praNslon shall not limit the fight of any party during any dispute, claim or CmIrOVvay to Gees, use and amplay ancillary, provisional cr
preliminary rights andlm remedlea, judicial or, alhervNe e, for the purposes of realizing upon, preserving, prdeding, m foredoainp upon the Coflateral. My
dispute-., Balms, or exercise of any right of mmody conca Ing any Collateral, Including any dalm to rescind, reform, or Othes? sO mdlry any agreement
relating to the Colloleml, shag alto ha arbitrated; prar{datl, however, Uinl no wbilmlar shell have the Cowen" amain Of restrain any ad of any party.
10. WAIVER. TO THE IXTENT THE PREVIOUS SECTION DOES NOT RESTRICT A PARTY'S ABILITY TO EMPLOY JUDICIAL REMEDIES, ISSUER,
APPLICANT, CORRESPONDENT AND EACH GUARANTOR VOLUNTARILY, IRREVOCABLY AND UNCONDITIONALLY WANE ANY RIGHT TO
HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, VVHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE, BETWEEN THE
PARTIES ARISING OUT OF, III CONNECTION WITH, RELATED TO, OR INCIDENTAL TO A CREDIT, THIS APPLICATION AND/OR ANY
DOCUMENT EVIDENCING AND)OR SECURING A CREDIT OR THIS AGREEMENT, THIS PROVISION IS A MATERIAL INDUCEMENT TO ISSUER'S
AGREEMENT TO APPROVE THE ACCOMPANYING APPLICATION, AGREE TO THESE TERMS AND CONDITIONS AND ISSUE CREDITS
HEREUNDER.
19. LIMITATION OF INTEREST AND OTHER CHARGES, Applicanl and Issuer Intend to confufm sfddly to the appnable uwry laws now m Irving a, In
force wilh reaped to these Terms and Conaars. To audt end:
(a) the aggregate of all Interest and Other charges mncUtuUng Inlerrst Under such oppllphio usury laws and mnimded for, chargeable at
receivable under Iheae Terms and Conditions ;hall never "coed the maximum amount Of iMaresl, nor prdum a rate In "coca of The
mardmum contrad rate of interest that Issuer Is aulhollrad to charge Applicant under appilcabIO usury town;
(b) If any "seas Interco; Is provided for, If shag be deemed a mistake, and the "CTA shill, at the option of Issuer, dlhu be refunded to
APPUcsnt m refor d on the unpaidacOlf principal balance of lower's reimbun emrnl Obligation, and the" Terns and Conditions shall be
In d determining
reformed to um only the icreol that
the maximum legal amount of Interest, and
as 1a) aiflacolcd and
Spread over the coil alarm of ppllnc nl'eamamburaemlenl angallm (ads "wile to ad, IIr appoble Interred t he NIl axtenl pertndi d by apprra6le u&u y
laws, Referenca hvdn to usury laws shag include any applieble fedml er state
usury
eighties
or loans from
Umelo lime In gifted.
20, GUARANTORS. 11 the ArapgcaDan and theca Tema and Ccndldms am dgn" by any guaranicrc ('GUarardam� 6dmv, each In tried ogress ac
follows:
(a) Each Guarantar, Jointly and severally, guarmlees payments of fig of Appll=l's Obligations hereunder in accordance with Iha retire and
conditions hems(.
(b) Each Guarantm agmeo that curb Guarmlm's anfaranlea of the ApplicanTs Ohligatims heremder Is abcofule, unconditional and conlinunp,
and no notice of the facuaace of any Credq need be given la such Guarantm. Such Obligations ahNl be uncmdlllansl Ireapea;lve of the
genuineness, validity v mformahllliy of the Obligations or Applicant under throe Terns and Conditions. m, to the fulled salent permitted by
aPPfcnbla taws any Olner chwmdanae that might dherwrae rondtute a legal of equitable discharge of a urely m guarantor.
(c) Each Guarantor waives any righlo such Guarantm may have under, or any faqufrement Imposed by any statute m milulallon that would
otherwise require Issuer to proceed first against pplianl m Applicant's asutL Should Issuer seek to enforca the obligaton; of my
Guarantor hereunder, &adn Guarantm hereby waive& any requitemrnt that Issuer Nyt "for" any rights and remedies again" AppOwni,
e➢sinrt any ether Guaranfa m against any Citn2laral given la s
Which may have been swum Cho Applkanfa Ohggallone hereunder.
(d) Each Guarantee* ahllpatlon: hereunder shall con Una la be erfactve or be reinstated It at any Ume any payment m dopo%n by Or fro Ilia
Occaunl of Appllanl In readnded or must alheroise be retuned by Issuer, Including, wilhmrl limitation, ramganbillan of Applicants as Youch POymcnl ordep Osn had net been made upon the Insolvency, hanrruptcy or
(a) Each Guarantor authorizes lsruer and any Cmespondenl, at eRhar of them, witheul notice to such Guarantor and wahoUt affgdtng &uch
Guaranfm's Ilabaily hereunder, In rearrange, rslend, amend, wawa daraulls in, campramis m release the ObllgaUans of Applicant, any other
Guarantor or any other person (other than such GUamntor), Inducting axlancienc, amendments, Iticroac" m reductions In any Crean;
praNded, hc"o , svthoul the written consent or such Guarantm, no ■cticn referred to above droll haw the effect of Increasing the amount
Of Guarantor's obligations hereunder.
21. CORRESPONDENTS. By stoning there Tama and Cmdtims of the place pmwded below, a correspondent bank ('Corrurpondent") may request That
Issuer Issue a Credit can Its behalf. If fmar ecamplles with wch request by opening a Crem1, Cerra:pendent %hail be cubled to the lams of these Terms
and Conditions and CnrespmdmI and Appncanl shall be Jointly and severally gable In Icwcr for fig o(Apptcant's Obllgauctls hrfeundw In accordance
with the lams and eondWms harcur. Wlhoul ffmgouon on the fcregeina, Correspondent authorizes Issuer Ica deblf Corespondanrs account shown
bolaw many other accounts Correapdanl may have with Iscuar or any Contains Bank nhTRale, for any ¢rid all amounts (v whldh (suer Is m may
become Vable under Iheae Tame and Condtlms or my Credit, legeihar with Inspires commlaslons, ahuQrs and expenses hereunder. Applicant hereby
agrees Ua al In Iha event Cuffespmdent sallsfes an obfgntlons to Issuer under these Terms and Candillonc, Cormpandent shall have tights, remedies,
seeurdy Warests and when Gans as am prodded he min to Issuer ID the same effect.
a NONWNVER. Issuer shall have na duly to amarrlsa any rights hereunder w Dlhefwlse with respect to any dncunienta w Inshumanls indouva lox CmdiI
and shag not be [table (many failure or delay In damp aa. Issuer shall net be deemed to have valved any of Its rights hereunder unless Issuer shall have
signed such wa(var In wrlkng.
21 NOTICES. Any notice or demand lO either party given by the ohm party shall be deemed to have been dowered when deposited In the mall or
transmitted by a telegraph, telex w taccimoo in the fact address of such party which has proaioualy been furnished to such other party. Applicant
acknowledges and agrees that, at the di=cgon of Isomer, Icwar may accept andhx transmit nolleac and communications under the Appgcanen and
these Tahms and Candrilons [Including Issuance of the Cradtl) by means ar SWIFT, atectmnlc man, Ides, hvx, letesopy, laidax a computer pencraled
felecommunlcaliens.
24. MISCELLANEOUS,
(a) If these Tarns and Conditions ens executed by more than one party, 'Applleanr shag be deemed to refer to all of the Appticanls, all
OUIlgallons of Applicant hereunder shag be )oht and several and the Tmbilities of each shall be absolute and unscndllonal, regamtess of the
Ilabllsy of MY other Party hereto.
Ili) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NE%V
YORK. The provisions, definition c, interpretations, and practices Of the ISP or UCP, as applicable, am Incorporated by redevence as an old to
Iha Inlarprelnl Ian or these Terms and CDndIllms. To the anent pertained by applicable Inv, Umse Terms and Condn ant shall Erevan In rase
or conald with the ISP. UCP cr the UCC, as applicable, and the UCP Jhs9 movall in case of sminct between the ISP or UCP and the UCC.
(o) The Inwlldlty or unenfcrceabltly of any Pantcton Or portion of these Terms and Conditions or any Instrument document, or agreement
eaeculed or made pwr and to err by virtue arthese Terms and Condlllona, shall not affect the wlidey or enromeabig(y of any other provision
or porlim
(d) These Terms and Condnisna may Only be amended upon the written consent of all paNes hucla,
(a) These Terms and Conditions conferno right or banob( upon any person dherlhan parties Whose Terms and Conditions and their mapecuw
sucetssors and assigns.
(1) Applicant agrees that In the event or any extension of the moludly or time for precenlogm of drags, acceptances of documents, or any Other
modli afion at the forme of a CredR, or In the even[ of any Incaase In 00 amount of a CmdII, these Terms and Candniuns than be binding
upon Applicant with regard to the Credir so Ineranaed Or otherwise modified, to draft, dommente and pmpedy cavamd Ihamby, and to any
action token by Issuer w any 01115 Correspondents In occerdanee pith such extension, Inemase or Mar medificallan.
u, DURATION AND EFFECT OF AGREEMENT. These Terms and Conibltma shall remain In full force and affect and droll apply with respell to every
cemmercial letter orcredit Icuod by (stuff at the requGi of Appgeani prim to maetpt by eilherporly of now of termination from the other party. Such
notice of larm[naUDn may be served by either Early and dtall be Offactive upon actual receipt except that the PmMslOna Df these Terms and Conditions
than canUrnm to apply with respect to any Credit eutclandlng on the date Of such miles of termination. These Terms and Coudiliona Nall be binding
upon Applicant, Its personal repmsenlaliv , suoeasswa and Assigns and shall Inure to the bermin of Issuer, no successors and assigns. Issuer may
grant pmUdpgUvrs In these Terms and Conditions and any Credit Issued hereunder In one or more Manual InsiUuticns,
20, EFFECT OF OTHER AGREEMENT, If Applicant Is a party to anolher financial agreement wlln Compass Dank w my Compass Bank allAale, and such
other financial agreement provides for the Issuance of commercial hater^, of credit on 6ehslf of the Applicant, than Ns pnevishma of these Terms and
conditions as they relate In ktlera cicmdd shall prevail over any mean: alenl pradeons al ouch olhvfinandal agreement.
Zr. COMPASS BANK AFFILIATES. Applicant hereby aulhodros and cansantc to the iEwanct of Credds hereunderby any compass Dank ahiillate ailing at
tha dim ellon Df Compass Bank. In such evenl, met Compass Dank has Nnded draws under any such Credil, It shun have the rights, remedies, "curtly
htarotls and other gene provided heroin to Issuer, and Applicant shall be obligated (a mah..c the payments due Issuer heroin us If Compass Bunk had
lmrd the Credit,
EXCEPT AS PROVIDED HEREIN, THESE TERMS AND CONDITIONS TOGETHER WITH THE ACCOMPANYING APPLICATION REPRESENT THE FILIAL
AQREEME.IT DEfWEEN THE PARTIES WRH RESPECT TO f75 SUBJECT I.IATTER AND MAY NOT GE CONTRADICTED BY EVIDENCE OF PRIOR CONTELI PORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OFTHE PARTIES THEREARE NO ORAL AGREEMENTS BETWEEN THE PARTIES. ,
Applicant hereby certifies that transactions covered by the accompanying Application are not
prohibited under the Foreign Assets Control Regulations of the United States Treasury
Department or the Department of Commerce, Export Administration regulations and that any
transaction covered by the accompanying Application conforms in every respect with all existing
United States govemment and other applicable regulations,
Applicant hereby authorizes Issuer to issue the requested Letter of Credit with such variations
from the above terms as Issuer may, in its discretion, determine are necessary and are not
materially inconsistent with the accompanying Application. By submitting this Application to
Issuer, the Applicant agrees to the Terms and Conditions set forth above as well as all information
stated In the accompanying Application and confines that the Terms and Conditions apply to the
accompanying Application.
Instructions: Complete the information for Applicant below. If a Guarantor or Correspondent
Bank Is involved, the Application may not be submitted in electronic form, If a Guarantor or
Correspondent Bank is Involved, print the Application and Terms and Conditions, have the
Applicant and Guarantor and/or Correspondent Bank sign, and submit the signed paper version of
the Application by mail, fax or personal delivery,
APPLICANT:
A�EXCO QPERATING CQMPANY
Name of Aooliaent
.,uu�ui�zeapl�present�i� of
Applicant CC99 �rlr7 ffii'' GZri� S
By:
Authorized Representative of
Applicant
GUARANTOR:
Names) � Address(es)
By:
Authorized Signature -Title
ey:
Authorized Signature - Title
Title:
IIV authorize you to debit for payment and charges
Account Number.
k Acno---- wledged:
COMPASS BANK:
Name (Please
Tit
Compass Bank Affiliate:
Officer Name (Please Print):
Officer Number:
CORRESPONDENT BANK
Name of Correspondent Banlc
�By:
� Authorized Signature -Title
By:111111 Autho
red Signature -Title
Phone Number:
I/V1/e authorize you to debit for
payment and charges
Officers Cost Center. Account Number,
Branch Name:Q7
Phone Number: