HomeMy WebLinkAboutContract 31495\
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ROAD REPAIR AGREEMENT
BETWEEN
THE CITY OF FORT WORTH
AND
FOIIR SEVENS OPERATING CO., LTD
,(TY :;�C;,�'�1'�R�r
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This Road Repair Agreement, (Agreement), is made and entered into on this the 2ottday
of February , 200.� by and between the City of Fort Worth, Texas ("City"), a home rule
municipal corporation of the State of Texas, located within Tanant, Denton, Wise Countie�, Texas
(Hereinafter referred to as the "C1Ty") and Four SeveIIs Opel'atlIIg, CO ., Ltd �"Operator"�
for the repair of ceriain streets and/or roadways within the City of Fort Worth, Texas as more fully
described herein.
WHEREAS, Operator is in the business oi drilling gas wells and, in connecrion th�rewith,
shall be engaged in driliing and production activities on pzoperiy known generally as
Tarrant Minerals Lease , which abuts, is adjacent to, atld/oi is
accessed by roadways within the City of Fort Worth; and
WHEREAS, use of the roadways by the 4perator 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, �esire 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
l. Operator shall r�pair damages caused by Op�;rator or its contr��cto�� sub�.'ontst�4t�f�;
employees, and agents, excluding ordinary wear and tear, ii any, to roadways that abut the above-
described property being used by Operator for the drilling and production of gas wells pursuant to a
Gas Well Permit issued to Operator. The repair obligation shall continue even if the Gas Well
Permit is amended to a11ow 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 Agr�ement.
Operator shall make a videotape of such roadways prior to the start of Operator driliing and
operation of its gas weils and shall provide a copy of the videotape to the Director of
Transportation and Public Works. Operator shall notify the Director af Transportation and Public
Works when drilling or fracing operations are complete so that the Director of Transportation and
Public Works can deternune if repairs are required.
2. In connection with its obligation to repair said roadways, Operator s�all use
materials of the same or better quality than those utilized to surface and/or repair the roadways
E%HIBIT "A'
FOUR SEVENS OPERATING CO., LTD.
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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 Transporta#ion and Public Works. Repairs shall be compteted 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. I3wing the term of this Agreement, Operator shall periodically inspect the roadways
during drilling, fracture stimulation or reworking of the gas well to determine whether or not any
damage has occurred as a result of Operaior'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 howrs to contiact the
Director of Transportafion and Public Works to work out a scheduie 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 ugon the date indicated above and shail continue in fuli
force and effect until Operator has completed and/or permanently discoritinued the activities upon
the roadways, as described hereinabove.
ARTICLE 3.
INSURANCE AND INDEMNITY
The Operator shall provide or cause to be provided the insurance described below for
each well unless a Gas 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 Drilting and Production" Ordinance and such insurance to continue until #he 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 poti�cies 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 Permit shatl 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 aciditional insurance as provided herein.
1. General Requirements applicable to all policies.
a. The City, its officials, employees, agents and officezs shail be endorsed as an
"Additionat Insured" to all policies except Employers Liability covcrage under the
Operator's Workers Compensation poticy.
b. All polici�:; shall �� s���i�€�:r� e�� a� oE;cu�r��c�i b���� e:���pt fs�� T���:��i:�i��rz��:��sl
Pollution Liability (Seepage and Pollution coverage) and Excess or U�nbrella
Liability, which may be on a claims-made basis.
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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 covera.ges, 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 minimuin thirty-day notice of
cancellation, non-renewal, andlor material change in policy terms or coverage. A ten
days notice sha]1 be acceptabie 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 ioss.
j. Upon request, certified copies of all insurance policies shall be fiimished 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 cantrachiat liabitity,
underground resources damage, broad form property damage, independent contractors
protective liabitity and personal injury. This coverage shall be a minimum Combined Single
Limit of $1,000,000 per occurrence for Bodiiy Injury and Property Damage.
�. Excess or Umbrella Liability
$ 5,000,000 Excess, if the Operator has a stand-alone Environmental Pollution
Liability (EPL) policy.
;:�] 0,000,000 Exc��s, if the Operator do�, not have a stand•aione 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 Compensatiun 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 lnsurance
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Properry Damage.
b. Coverage must include all owned, hired and not-owned automobiles.
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6. Certificates of Insurance
a, The company must be admitted or a�proved 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
equivaient poiicy form acceptable to the City.
c. Sets forth a1l 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 OWI�TER AND TI-�. CITY
EXCEPT WHEN THIS POLICY IS BEING CANCELLED FOR NONPAYMENT
OF PREMNM, IN WHICH CASE ] 0 DAYS ADVANCE 1�i�EZITTEN NOTICE IS
REQUIRED".
e. Original endorsements affecting coverage required by tlus section shall be furnished
with the certificates of insurance.
7. The cancellation of any insurance for the sole putpose 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 harm2ess the City, its officers,
agents and eanployees from all siuts, 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 obG�F:�2�si a��inst the City growing out of such inj�iry ei�:��:t���.
ARTICLE 4.
PERFORMANCE BONDS
1. �perator shall provide a performance bond, unless a performance bond h�s been
provided for the issuance of a Gas Well Permit under the terms and conditions described in Fort
Worth "Gas Drilling and Praduction" ordinance, in an amount not less than the amount necessary
to repair the roadways, as determined by the City Director of Transportation and Public Worlss.
2. Prior to the beginning of any activity pursuant to the issuance of a Gas Well Permit,
unless a performance bond has been provided for the issuance of a Gas Well Perrnit under the
terms and conditions described in the Fort Worth "Gas DrilIing and Production" �rdinance,
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irrevocable letter of credit as follows:
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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 shali become effectivc
on or before the date the Gas Well Pernut 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 Pernut term or until
the well is plugged and abandoned and the site is r�stored, wiuchcver occurs first The
Operator shall be listed as principal and the instrument shall run to the City, as oblig�e, and
shall be conditioned that the Operator will comply with the terrns and regulations of this
Ordinance and the City. The original bond shall be submitted to the Dire�tor of
Transportation and Public Works with a copy of the same provided to the City Sdcretary
and the Gas lnspector.
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. �'he letter of credit shall remain in force and ef%ct for at least a period of six (6)
raonths after the expiration of the Gas Well Pernut 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 sign.ed letter of credit from the
banking insdtution, with a copy of the same provided to the City Secretary and the Gas
Inspector. If #he i,etter of Credit is for a time period less than the life of the well as required
by Ordinance Number 14880, OPERATOR 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 FoR Worth
Ordinance Number 14880, on or before 45 days prior to the expiration date of the Letter of
Credit. IfOPERATOR fails to deliver to the Ciry of Fort Worth either the renewal Letter
of Credit vr replacement bond in the appropriate amount on or i�efore 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 Leiter of Credit to be held by the City of Fort Worth as security for
OPERATOR 's performance of its obligarions 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 impos�d by this Agr��m�nt, a writt�n notice sh�ll b� gv�n to O��tor. �,^�,�yh
notice shall specify the work to be done, the estimated cost and the period of tune 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.
d. The City shall he authorized to draw against any irrevocable letter of credit or bond
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 inciured other than for the expenditure of said sum
in hand..
e. ln the event �Operator does not cause the work to be performed and fails or re�uses to
pay over to the City the estimated cost of the work to be done as set forth in the notice, or
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the issuer of the security instrument refuses to honor any drafi 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.
f. The cancellation of any bond or letter of credit for the sole purpose of the re�pair af
roadways will not release the obligation of the Operator to meet all requirem�nts of
insurance and bonding under the Fort Worth "Gas Drilling and Prodaction" Ordinanae. 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 l�ss, as
determined by the Director of Transportation and Public Works, cash in the amount necesjsary to
complete the repairs, as determined by the Director of Transportation and Public Works, dnay be
deposited with a banlc or escrow agent pursuant to an escrow agreement acceptable and approved
by the Gity enswing completion of the repau�.
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 fwrnish 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 negodations, representations, and/or agreements, either
written or oral. This Agreement may be amended only by written instzument signed by the
�overning 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 contingentcy or cause beyond the reasonable
control of a party including, without limitafion, acts of God or the public enemy, war, riot, civil
commotion, insurrection, govemment or de facto government action (unless caused by acts or
omissions of the party), fires, explosions, rain or other weather delays, floods, strikes, slowdowus
or work stoppages.
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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, ar transfer its interest in tlus Agreement, or any
of its right, duties, or obligations hereunder, without the prior written consent of the othe� party.
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 assignad upon
written notice to the City of said assignment.
ARTiCLE 8.
NOTICE
Any notice given by one party to the other in connection with tlus Agreement shall be in
writing and shall be by persoaal 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 75102
OPERATOR FnTiR SFVF:N� nPFRATTNG CO., LTD.
777 TAYLOR STREET, STE. 1090
FORT WORTH, T% 76102
Notice shall be deemed to have been received on the date of r�ceipt as shown on the return receipt
or other written evidence of receipt.
A.RTICLE 9.
MODIFICATION
No waiver or modification of this Agreement or of any covenant, condition, limitation
herein coniained 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 hereta out of or affecting this Agre�ment, or the rights
or obIigations of the parties 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 ttus Agr�mei�t shall
for any reason be heid to bc invalid, illegal, or unenforc�ble in any r�spect, such invi;�lidity,
illegality, or unenforceability shall not ef�ect the other provisions, and the Agr�ment shall b�
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constrned 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 Agreetnent
shal2lie in the state courts located ia Tarrant County, Texas or the United States District Court for
the Northern District of Tcxas, Fort Worth Division.
ARTICLE 12.
ENT'IRE AGREEMENT
This Agreement and the exhibits attached hereto, constitute the entire agreement ammng the
parties hereto with respect to the subject matter hereo� 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 ttus A.greement shall be
binding on any party hereto unless the sazne is in writing, dated subsequent to #he date hereof, and
is duly authorized anid executed by the parties hereto.
ARTICLE 13.
WAI�IER 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 fuIl force and effect.
ARTICLE 14.
CAPTIONS
The captians contained in this Agreement are for informational purposes only and sha11 not
in any way affect the substantive terms or conditions of this Agreernen�
ARTICLE 1 S.
COUNTERPARTS
This Agreement may be executed in any numi�er of counterparts, each of which shall be
deemed an original, and constitute one and the same insirument.
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IN WITNESS WHE�REOF, the parlies o hereby affix their signatiues and enter i�o this
Agresment as of #he _��'day of 20 v�
ATTEST:
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APPR�VED AS TO �ORM
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STATE OF T� §
COUNTY OF TARRANT &
CITY OF FaRT WORTH
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FOIIR SEVENS OPEBATING CO., LTD_
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Ogerator
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Before me, the undersigned notary pubGc, on Ehis day pe:sonally appearesi Charles �oswe�l,
the City l�fanager of the City of Fort Worth, Texas, known to me to be the person whose name is
su�scribed to the foregoing instrument, anci acknowledged to me that heJshe executed. the
instrument for the purposes and considerafiion therein e�ressed.
Given under my hand and seai of offi
, 'ti�" � "''�. PATSY COX
:� �:
'*: '`'- MY COMMISSION EXPIRES
=?; December 20, 2008
'•%�;r�,1��.
STAi'E OF � C-'�r3`� §
COUNTYOF i :�+�����t §
Before me, tixe undersigned authority, a Notary Public in and for the Staxe of Texas, on this
day pezsonaily agpeated �� �s known to me to be the person
whose name is subscribed to the foregoing instrument, and aclrnowtedged to me that the same was
the act of �� sFVFus opFua�rzar yn _ T.•rn {the corporadon) and that he executed the same
as the act of said FOIIR SEVF.RS OP�_'�'�"xG C0. , ZTD. (corporation} for the purp�ses and
consideration therein expressed and in the capacity thetein stated.
Given under my hand and seal of of�'ice � s�� day of �' L' �a��� � L�ll-` ; 2U ��� �
. �,�.�_�
SHERRIE SaUTNARD �j `
�� Notary Public, State oiTexa • ,
h9y Commission Expires � �j j
r 1•22-2008 � � �:
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Notary Public
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BILL ADAMS February 11, 2005
President
City of Fort Worth
1000 Throckmorton Street
Fort Worth, TX 76102
Dear Sir ar Madam:
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TeYas Bank ("Bank") hereby establishes an Irrevocable Letter of Credit ("Credit") in
favor of the City of Fort Woi-th (`Beneficiar�') for a sum not exceeding the aggregate amount of
Ten Thousand Dollars ($50,000.00). These funds shall be made available by Beneficiary's drafts
dra�vn on Bank at 300 West 7�' Street, Fort Worth, TX 76102 (or such other address that Bank
may provide Beneficiary with written notice of in the future) and accompanied by the signed
written statements or docmnents indicated below. Drafts and said signed written statements and
documents must be presented to Bank during regular business hours, on any Business Day, only
in person, by mail, ar by express delivery service. "Business Da�' means any day on which
banks located in Fort Worth, Texas, are not authorized or required to close.
Draft Terms and Conditions. Bank shall honar the drafts submitted by Beneficiary
under the following terms and conditioi�s: (a) presentation of the original Credit (as modified
below) to Bank; (b) a signed statement of Beneficiary (with signature notarized ) stating that Four
Sevens Operating Co., LTD ("Four Sevens") has failed to honor their contracural agreement with
the City of Fort Worth, Texas with regard to Tarrant Minerals # 1 Well as required by Ordinance
Number 14880 or the City of Fort Worth Road Maintenance Agreement to which Four Sevens is
a Paz-ty. Since this Credit may be in effect for a period that is less than the period that the Tarrant
Minerals #1 Well may be in existence, for the puipose of subpart (b) of the foregoing tei�ns and
conditions, Ber�eficiary may draw upon the full amount of credit available under this Credit if
Fot�r Sevens does not obtain a renewal ar extension of this Credit or a repiacement to this Crec'tit,
in each case in an amount not less that $50,000.00, on or before 45 days prior to Expiration Date
of this Credit (as same may be extended from time to time). Provided that Beneficiary si:rictly
complies with all terms and conditions as set forth above and as otherwise prescribed in this
Credit, Bank shall not dishonor any dra$s submitted by Beneficiary unless (i) the draft is
submitted after the Expiration Date or (ii) the full amount of Credit available under tlus line has
been drawn.
Upon Bank's honor of such drafts and payment to Beneficiary, Banl�, once the full
�BIT nB�r - _ ;
(Revised 5/28/98) FOUR SEVEYTS OPE3�ATIATG CO. , LTD. � � � � � � �
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TARRANT MINERALS � 1 n,� �� `''.� � �+ ��;'; j1 r,'
�
300 West Seventh St. Fort Worth, Texas 76102 (817) 850-0054 Fax (817) 850-0059 E-Mail: bill.�dams@texasbank.com
amount of credit available under this Credit has been drawn, shall be fitlly discharged of its
nhligationc »n�le,- thi� Crec_lit anci shall not ther��ftet- be ohligated to malce any further payments
under this Credit to Beneficiary or any other person or entity. Beneficiary shall have no recourse
against Bank for any amount paid under this Credit after Banlc honors any draft or other
document which complies strictly with this Credit, and whicli on its face appears oiherwise in
order but which is signed, issued, ar presented by any party or under the name of any party
purporting to act for Beneficiaiy, puiporting to clavn through Beneficiary, or posing as
Beneficiary. Beneficiaiy shali retuin to 3ani� any funds received by Beneficiary in excess of the
Credit's maximum drawing amount.
2. Use Restrictions. All drafts must be marked "DRAWN TJNDER IRREVOCABLE
LETTER OF CREDIl NO. 191 DAlED r�ebruary 11,2005." Uniy Beneficiary may complete a
draft and accompanying statements or documenis required by this Credit and make a draw under
this Credit. Partial draws are permitted under this Credit. If partial draws are permitted under
this Credit, a copy of this Credit must accompany each draft with the original Credit
accompanying the final draft. Bank's honor of draft shall automatically reduce the amount of
credit available under this Credit by the amount of the draft.
3. Expiration Date. This Credit shall expire (`Bx�iration Date") upon the earlier of
the date the well is plugged and abandoned by Four Sevens Operating Co. Ltd. and approved by
the herein named beneficiary; or (b) the day that Bank honors a draw tulder which the full
amount of this Credit is drawn.
4. Assignment or Transfer. This Credit shall be nontransferable, except for: (a) a
transfer by direct operation of law to the original Beneficiary's administrator, executor,
banl�ruptcy tnistee, receiver, liquidator, successor, or other representatives at law; and (b) the
first immediate transfer by such legal representative to a third party after express approval of the
applicable governmental body (judicial, ad3riinistrative, or executive).
5. Timing of Dishonor. To the extent not prohibited by law, Bank shall be entitled to
honor or dishonor any draft submitted in connection with this Credit within seven (7) business
days not counting the day Bank receives the draft. Although Bank shall be entitled to honor a
draft subsequent to the Expiration Date, Beneficiary shall not be entitled to submit a draft or
provide Bank with any documents in support of a draft after the Expiration Date. If Bank fail_s to
mai�e payment on the appropriate paymeni ciate because of an xct of God ar oiner aci beyond tne
control of Bank, the amount of the payment will automatically be increased by a daily amount of
interest equal to the per diem rate that is derived from the Prime Rate set forth in The Wall Street
Joic��nc�l fiom time to time, as applicable, for each day that the payment is delayed and Bank's
sole obligation and liability shall be to mal�e the payment due together with the additional interest
computed as provided above.
6. Modification. This Credit sets forth in full the terms of Banlc's undertaking. A
modification or waiver of any of Bank's or Beneficiary's obligations or rights under tlus Credit
(Revised 5/28/98)
f . ,^
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1 �' ,j�(;,j y,;���—�-.,ti ��;-
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I�-revocable Letter of Credit
Pa�ffP �
must be contained in writing signed by Bank. A waiver on one occasion shall not constitute a
waiver on any other occasion.
7. Compliance Burden. Under no circumstances shall Bank be held responsible for
any impossibiliiy or other difficulty in Beneficiary achieving sirict compliance with ihe .
requirements of ihis Credit. Beneficiary understands and acknowledges that (a) unless and uniil
the present wording of this Credit is amended with Bank's prior written consent, the burden of
complying strictly with such wording remains solely upon Beneficiary, and (b) Bank is relying
upon the Iack oi such amendment as constituiing Benenciary's initial and continued approval of
such wording.
8. Non-Severability. If any aspect of this Credit is ever declared unenfarceable far any
reason by any court or government body having jurisdiction, Bank's entire engagement under this
Credit shall be deemed null and void, and both Bank and Beneficiaiy shall be restored to the
position each would have occupied with all rights available as ihough this Credit had never
occurred. This non-severability provision shall override al1 other provisions in this Credit, no
matter where such provision appears within the Credii's body.
9. Choice of Law/Jurisdiciion. This Credit shall be governed by the laws of the State
of Texas to the extent not governed by the Unifoi�n Customs and Practice for pocumentaiy
Credits (1993 Revision), International Chamber of Commerce Publication No. 500, and to the
extent such laws are not inconsistent with the terms of this Credii. VENUE OF ANY
LITIGATION INVOLVING THIS CREDIT MUST BE MAINTAINED IN A COURT OF
COMPETENT JURISDICTION LOCATED IN Tarrant COUNTY, TEXAS, WHERE
THIS CREDIT IS PERFORMABLE.
Sincerely,
TEX S B
W. H. Adams, �II
President i�
(Revised 5/28/98)