HomeMy WebLinkAboutContract 33232 - EXHIBIT «A"
ROAD REPAIR AGREEMENT CITY SECRETARY\
BETWEEN CONTRACT NO,
THE CITY OF FORT WORTH
AND
CHIEF OIL&GAS LLC
This Road Repair Agreement, (Agreement), is made and entered into on this the 10tn day
of FEBRUARY , 200 q 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 Counties, Texas
(Hereinafter referred to as the"City")and CHIEF OIL&GAS LLC ("Operator")
for the repair of certain streets and/or roadways within the City of Fort Worth, Texas as more fully
describcd herein.
WHEREAS, Operator is in the business of drilling gas wells and, in connection therewith,
shall be engaged in drilling and production activities on property known generally as
ALLIANCE-GWS UNIT ' 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 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 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 such roadways prior to the start of Operator drilling and
operation 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.
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 the 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,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 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 Permit 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.
1. General Requirements applicable to all policies.
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.
Page 2
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.
C. 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 funaished 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 a stand-alone Environmental Pollution
Liability(EPL)policy.
$10,000,000 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. —
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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 a Gas Well Permit under the terns 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 a Gas Well Permit,
unless a performance bond has been provided for the issuance of a Gas Well Permit 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:
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v k
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, CHIEF agrees to either renew the Letter of Credit or
replace the Letter of Credit with a bond hi 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 CHIEF 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
CHIEF 's 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.
d. The City shall be 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 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
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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.
f. 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 fiunish 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.
Page 6
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 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 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 CHIEF OIL&GAS LLC
8100 PRESTON ROAD-SUITE 600
DALLAS, TEXAS 75225
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.
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 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 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
Page 7
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 party 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 may be executed in any number of counterparts,each of which shall be
deemed an original,and constitute one and the same instrument.
Page 8
IN WITNESS WHEREOF, 'es do hereby affix their signatures and enter into this
Agreement as of theday of ,2fd
ATTEST: CITY OF FO T WORTH
M- " t�� By: --
City Secretary Assistant City ger
Director of Develo ent =NOM&CREQUIRED
APPROVED AS TO FORM
AND LEGALITY:
B • Gw ��
Assistant City ttorney Ope
JOEL WARD-REG. COMPLIANCE MANAGER
STATE OF TEXAS §
COUNTY OF TARRANT §
Before me,the undersigned notary public,on this day personally appeared Dale Fisseler,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 k- .,,,, ,20 4. .
Notary-Publk
f�ARva�e, JONI R JACOBS
o:•"' Gt
* *i NOTARY PUBLIC
14. State of Texas
rFOF�+erComm. Exp. 05-27-2007
r
Page 9 fr 1 I. J
STATE OF TEXAS §
COUNTYOF DALLAS §
Before me, the undersigned authority, a Notary Public in and for the State of Texas, on this
day personally appeared JOEL WARD known to me to be the person
whose name is subscribed to the foregoing instrument, and acknowledged to me that the same was
the act of CHIEF OIL&GAS LLC (the corporation)and that he executed the same
as the act of said CHIEF OIL&GAS LLC (corporation) for the purposes and
consideration therein expressed and in the capacity therein stated.
Given under my hand and seal of office this 10TH day of FEBRUARY ,20 06
EQOOROT ►`DOUGLM Notary Public
My Commk*m Expku
March b,2006
a
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ACCEPTANCE AND INDEMNITY AGREEMENT
This Acceptance and Indemnity Agreement ("Agreement") is executed and submitted by
Chief Oil & Gas LLC (the "Operator") whose address is 8111 Preston Road, Suite 600, Dallas,
Texas 75225, to the City of Fort Worth, Texas, a Texas home rule municipality (the "City"), in
lieu of the bond, irrevocable letter of credit, and insurance requirements of Article II to Chapter
15 of the Code of Ordinances of Fort Worth, Texas, entitled "Gas" (the "Gas Ordinance"),
pursuant to Section 15-41(F) of such Article. Operator does hereby covenant and agree as
follows:
1. In accordance with, and pursuant to § 15.34.L of the Gas Ordinance, Operator
confirms its acceptance of the terms and regulations .of the Gas Ordinance and agrees to comply
with same.
2. In accordance with, and pursuant to § 15 A LD of the Gas Ordinance, Operator
does hereby expressly release and discharge, all claims, demands, actions, judgments, and
executions which it ever had, or now has or may have, or assigns may have, or claim to have,
against the City and/or its departments, agents, officers, servants, successors, assigns, sponsors,
volunteers, or employees, created by, or arising out of personal injuries, known or unknown, and
injuries to property, real. or personal, in any way incidental to or in connection with the
performance of the work performed by the Operator under a Gas Well Permit. Operator shall
fully defend, protect, indemnify, and hold harmless the City, its departments, agents, officers,
servants, employees, successors, assigns, sponsors, or volunteers from and against each and
every claim, demand, or cause of action and any and all liability, damages, obligations,
judgments, losses, fines, penalties, costs, fees, and expenses incurred in defense of the City, its
departments, agents, officers, servants, or employees, including, without limitation, personal
injuries and death in connection therewith which may be made or asserted by Operator, its
agents, assigns, or any third parties on account of, arising out of, or in any way incidental to or in
connection with the performance of the work performed by the Operators under a Gas Well
Permit. Operator agrees to indemnify and hold harmless the City, its departments, its officers,
agents, servants, employees, successors, assigns, sponsors, or volunteers from any liabilities or
damages suffered as a result of claims, demands, costs, or judgments against the City,. its
departments, its officers, agents, servants, or employees, created by, or arising out of the acts or
omissions of the City occurring on the drill site or operation site in the course and scope of
inspecting and permitting the gas wells INCLUDING, BUT NOT LIMITED TO, CLAIMS AND
DAMAGES ARISING IN WHOLE OR IN PART FROM THE NEGLIGENCE OF THE CITY
OCCURRING ON THE DRILL SITE OR OPERATION SITE IN THE COURSE AND SCOPE
OF INSPECTING AND PERMITTING THE GAS WELLS. IT IS UNDERSTOOD AND
AGREED THAT THE INDEMNITY PROVIDED FOR IN THIS SECTION IS AN
INDEMNITY EXTENDED BY THE OPERATOR TO INDEMNIFY AND PROTECT THE
CITY AND/OR ITS DEPARTMENTS, AGENTS, OFFICERS, SERVANTS, OR
EMPLOYEES FROM THE CONSEQUENCES OF THE NEGLIGENCE OF THE CITY
AND/OR ITS DEPARTMENTS, AGENTS, OFFICERS, SERVANTS, OR EMPLOYEES,
WHETHER THAT NEGLIGENCE IS THE SOLE OR CONTRIBUTING CAUSE OF THE
RESULTANT INJURY, DEATH, AND/OR DAMAGE.
FILL COPY
3. Operator agrees to defend against any claims brought or actions filed against City
with respect to the subject of the indemnity contained herein, whether such claims or.actions are
rightfully or wrongfully brought or filed. Operator agrees to reimburse City for any reasonably
necessary expenses, attorneys' fees, or costs incurred in the enforcement of any part of this
Agreement.
4. The obligations and undertakings of Operator under this Agreement shall be
performed at Tarrant County, Texas, and any action for a breach of this Agreement shall be
brought in such county.
In witness whereof, the undersigned has executed this Acceptance and Indemnity
Agreement this 15th day of June; 2004.
CHIEF OIL & GAS LLC
A�
By: Trevor D. Rees-Jones
President
Z:\FORMS\ACCEPTANCE AND INDEMNITY AGREEMENT-City of Fort Worth.doc
FILE COPY
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0-P - 114$Z 19
C h Bond#LPM4138508
CITY OF FORT WORTH, TEXAS
GAS DRILLING,PRODUCTION AND
ROADWAY MAINTENANCE
BLANKET BOND
THE STATE OF TEXAS §
COUNTY OF TARRANT §
WHEREAS, persons performing gas drilling and production operations within the jurisdiction of the City of Fort
Worth, Texas are required to execute and file with the City of Fort Worth Gas Inspector a bond covering those operations,
pursuant to §15-41 of the City of Fort Worth City Code;
WHEREAS, the Principal named below is the operator of certain Texas Railroad Commission and City of Fort
Worth regulated gas drilling and production operations including but not limited to, (1) operations permitted under the
Principal's permit filed with the City of Fort Worth Gas Inspector, and/or (2) any additional wells that may be permitted
prior to the expiration of this bond;
WHEREAS, the Principal desires to perform gas operations and activities within the jurisdiction of the City of Fort
Worth, and which operations and activities must be carried on in full conformance with all conditions of the ordinances of
the City of Fort Worth, including those city ordinances requiring operators to plug and abandon all wells and control, abate,
and clean up associated with an operator's gas operations and activities;
WHEREAS, Principal acknowledges and agrees that, due to the acquisition of additional wells, it may be required
during the effective term of this bond to provide additional financial security beyond the face amount of this bond before
additional permits submitted by the Principal will be accepted and approved.
We, Chief Oil & Gas, L.L.C. (person's name) as Principal,
and Fidelity and Deposit Company of Maryland as Surety, duly authorized and qualified to do business in the State
of Texas, are held and firmly bound unto the City of Fort Worth, Texas in the sum of One Hundred Fifty Thousand &
No/100 Dollars ($150,000.00) payable at the City of Fort Worth, Tarrant County, Texas, and for the
payment of which, well and truly to be made, we bind ourselves, our heirs, executors, administrators, successors and assigns,
jointly and severally, firmly by these presents.
This bond is conditioned that if the Principal operates all wells in accordance with the ordinances of the City of
Fort Worth plugs and abandons all wells and control, abates, and cleans up pollution associated with its gas operations and
activities in accordance with the ordinances of the City of Fort Worth and is in full compliance with the all the regulations
of the with the ordinances of the City of Fort Worth, the Road Repair Agreement and any permit issued pursuant thereto
and shall repair any damages to City streets, as determined by the City's Director of Transportation and Public Works,
caused by the equipment and vehicles used by the Operator in going to and from the drill site with such repairs being in
compliance with specifications therefore prepared by and provided to the Operator by the Director of Transportation and
Public Works; then the Principal and Surety are relieved of their obligation to pay the bond amount to the City of Fort
Worth.
In the event of a failure of Principal to comply with the conditions and obligations of this bond, the Surety shall
promptly remedy such non-compliance, in accordance with the ordinances of the City of Fort Worth within 60 days of
notice of non-compliance. In the event of surety's failure to remedy such non-compliance, written demand shall be made
upon surety for payment of the penal sum of this bond. Sums demanded under this bond shall be paid to the City of Fort
Worth at 1000 Throckmorton Street, Fort Worth, Texas, within thirty days after receipt of written demand for payment,
which demand shall be mailed by registered or certified U.S. mail to the address shown below.
Conditions and obligations under this bond are construed in accordance with the Road Repair Agreement and all
permits, rules, and regulations of the ordinances of the City of Fort Worth, including any amendments thereto that may be
made during the term of this bond, and Surety waives notice of any amendments. The City of Fort Worth shall have the
right to sue on and otherwise enforce the obligations of this bond without first resorting to or exhausting its remedies
against the properties and assets of the Principal.
(over) f 1
This bond is effective beginning on the 6th day of August , 2003. The term of this bond shall expire 6
months after the expiration of the Gas Well Permit or when the gas well is plugged and abandoned and the site of the well
restored, which ever occurs earlier, provided, however, any claim against this bond maybe brought within one (1) year
following the expiration of the Gas Well Permit or the plugging and/or abandonment of the well, whichever occurs first.
Obligations to pay part or all of the bond amount are deemed released after one (1) year from the expiration date of the
bond if no non-compliant operations or activities subject to the bond have been discovered by the City of Fort Worth or
the Texas Railroad Commission during that one-year period, and no enforcement action against any operations or
activities subject to the bond is pending. Principal and Surety may also be relieved of their obligations to pay part or all of
the bond amount by written agreement between the City of Fort Worth, Principal, and Surety.
If the bond amount is not paid in accordance with the terms of this bond and if judgment for any part of the bond
amount is awarded through any court proceeding, then the City of Fort Worth shall be entitled to court costs and
reasonable attorney's fees awarded by the court. Surety's liability for such costs and fees shall not be limited by the
amount of this bond. It is agreed and understood that this bond is executed and performable in Fort Worth, Tarrant
County,Texas, and venue for any cause of action construing this bond is in state courts located in Tarrant County,Texas or
the United States District Court for the Northern District of Texas.
A transfer, by any means, of any well covered under this bond does not relieve the Principal and Surety of any
obligation under this bond until the operator acquiring the well has on file with the City of Fort Worth an approved form
of financial security covering the well. The transferred well remains covered by this bond and the Principal and Surety
remain responsible for compliance with all City of Fort Worth regulations and ordinances covering the transferred well
until the City of Fort Worth determines that the well is covered by proper financial security and the acquiring operator has
assumed full responsibility for the well in accordance with all city regulations and ordinances. Obligations to pay part, or
all, of the bond amount, as a result of the Principal or Surety's non-compliance with the conditions of this bond that
occurred prior to the transfer and assumption of responsibility by the acquiring operator,remain enforceable in accordance
with the general terms of this bond.
IN TESTIMONY WHEREOF, said PRINCIPAL has hereunto subscribed his or her name or has caused this instrument
to be signed by its duly authorized officers and its corporate seal to be affixed this 6th day of August
20 03.
IN TESTIMONY WHEREOF, said SURETY has caused this instrument to be signed by its duly authorized officers and
its corporate seal to be affixed this 6th day of Au ust 20 03.
Chief Oil &Gas,L.L.C.
PRINCIPAL
(seal) By:
NAME&TITLO``
Fidelity and Deposit Company of Maryland
SURETY(ATTACH POWER OF ATTORNEY)
(seal) By: U
SandraY Shryk,Attorney-in-Fact
3910 Keswick Road, 5`h Floor,Baltimore,MD 21211
SURETY'S FULL MAILING ADDRESS
i
Power of Attorney
FIDELITY AND DEPOSIT COMPANY OF MARYLAND
COLONIAL AMERICAN CASUALTY AND SURETY COMPANY
KNOW ALL MEN BY THESE PRESENTS:That the FIDELITY AND DEPOSIT COMPANY OF MARYLAND,and the
COLONIAL AMERICAN CASUALTY AND SURETY COMPANY,corporations of the S�at�5p aryland,by PAUL C.
ROGERS,Vice President,and T.E. SMITH, Assistant Secretary,in pursuance of,4u tg y Article Vl,Section 2,
of the By-Laws of said Companies,which are set forth on the reverse sid�kF ere i ied to be in full force
and effect on the date hereof,does hereby nominate,constit cgt ��^ .POST,Richard K.
STONE,Bret S.BURTON,Jana M.FORRES � 1 and Tim H.HEFFEL,
all of Wichita,Kansas, EACH its ttrra ���hd tQ -..8 o make,execute,seal and deliver,for, and
on its behalf as surety,and�t i{j &man"�t 1 ds a dr-dertakings and the execution of such bonds or
undertakings in pur es resepter�upon said Companies,as fully and amply,to all intents and
purposes,as if they 4e)"nul� �t ]edged by the regularly elected officers of the Company at its office
in Baltimore,Md.,i ur elvrsons. This power of attorney revokes that issued on behalf of W.C. Cohen,Jr.,
Jose h C. Lukens II1 ost Richard K. Stone Bret S.Burton Jana M.Forrest,Patricia Brogan,Sandra J.
Joseph e a g andr Shryack,
Erica M. Plummer,dated July 14,2000.
The said Assistant Secretary does hereby certify that the extract set forth on the reverse side hereof is a true copy of Article VI,
Section 2,of the By-Laws of said Companies,and is now in force.
IN WITNESS WHEREOF, the said Vice-President and Assistant Secretary have hereunto subscribed their names and
affixed the Corporate Seals of the said FIDELITY AND DEPOSIT COMPANY OF MARYLAND, and the COLONIAL
AMERICAN CASUALTY AND SURETY COMPANY,this 14th day of March,A.D. 2003.
ATTEST: FIDELITY AND DEPOSIT COMPANY OF MARYLAND
COLONIAL AMERICAN CASUALTY AND SURETY COMPANY
0 DEop3,�` G►�1C�
� c c
��. SEAL
e
By:
T. E. Smith Assistant Secretary Paul C. Rogers Vice President
State of Maryland l ss:
City of Baltimore J
On this 14th day of March, A.D. 2003, before the subscriber, a Notary Public of the State of Maryland, duly
commissioned and qualified, came PAUL C. ROGERS, Vice President, and T. E. SMITH, Assistant Secretary of the
FIDELITY AND DEPOSIT COMPANY OF MARYLAND, and the COLONIAL AMERICAN CASUALTY AND
SURETY COMPANY, to me personally known to be the individuals and officers described in and who executed the
preceding instrument, and they each acknowledged the execution of the same, and being by me duly sworn, severally and
each for himself deposeth and saith,that they are the said officers of the Companies aforesaid,and that the seals affixed to the
preceding instrument is the Corporate Seals of said Companies, and that the said Corporate Seals and their signatures as such
officers were duly affixed and subscribed to the said instrument by the authority and direction of the said Corporations.
IN TESTIMONY WHEREOF, I have hereunto set my hand and affixed my Official Seal the day and year first above
written.
Sandra Lynn Mooney Notary Public
My Commission Expires: January 1,2004
POA-F 076-6692A
ZURICH '
w I
THIS IMPORTANT DISCLOSURE NOTICE IS PART OF YOUR BOND
We are making the following informational disclosures in compliance with The Terrorism Risk Insurance Act of ;
i
2002. No action is required on your part
Disclosure of Terrorism Premium
i
The premium charge for risk of loss resulting from acts of terrorism(as defined in the Act)under this bond is
$_waived_. This amount is reflected in the total premium for this bond.
Disclosure of Availability of Coverage for Terrorism Losses
As required by the Terrorism Risk Insurance Act of 2002,we have made available to you coverage for losses
resulting from acts of terrorism(as defined in the Act)with terms,amounts,and limitations that do not differ
materially as those for losses arising from events other than acts of terrorism.
Disclosure of Federal Share of Insurance Company's Terrorism Losses #
f
The Terrorism Risk Insurance Act of 2002 establishes a mechanism by which the United States government will
share in insurance company losses resulting from acts of terrorism(as defined in the Act)after a insurance company
has paid losses in excess of an annual aggregate deductible. For 2002,the insurance company deductible is 1%of
direct earned premium in the prior year,for 2003,7%of direct earned premium in the prior year,for 2004, 10%of
direct earned premium in the prior year,and for 2005, 15%of direct earned premium in the prior year. The federal
share of an insurance company's losses above its deductible is 90%.In the event the United States government
participates in losses,the United States government may direct insurance companies to collect a terrorism surcharge
from policyholders. The Act does not currently provide for insurance industry or United States government
participation in terrorism losses that exceed$100 billion in any one calendar year.
I
Definition of Act of Terrorism
The Terrorism Risk Insurance Act defines"act of terrorism"as any act that is certified by the Secretary of the
Treasury,in concurrence with the Secretary of State and the Attorney General of the United States:
1. to be an act of terrorism;
2. to be a violent act or an act that is dangerous to human life,property or infrastructure;
3. to have resulted in damage within the United States,or outside of the United States in the case of an air
carrier(as defined in section 40102 of title 49,United 17 States Code)or a United States flag vessel(or a
vessel based principally in the United States,on which United States income tax is paid and whose insurance
coverage is subject to regulation in the United States),or the premises of a United States mission;and
4. to have been committed by an individual or individuals acting on behalf of any foreign person or foreign
interest as part of an effort to coerce the civilian population of the United States or to influence the policy or
affect the conduct of the United States Government by coercion.
But,no act shall be certified by the Secretary as an act of terrorism if the act is committed as part of the course of a
war declared by Congress(except for workers'compensation)or property and casualty insurance losses resulting
from the act,in the aggregate,do not exceed$5,000,000.
These disclosures are informational only and do not modify your bond or affect your rights under the bond.
Copyright Zurich American Insurance Company 2003
surety terrorism diselostirrnotiee.doc
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