HomeMy WebLinkAboutContract 33834 CITY SECRETARY
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ROAD REPAIR AGREEMENT
BETWEEN
THE CITY OF FORT WORTH
AND
CHESAPEAKE OPERATING,INC.
THIS ROA-P REPAIRAGREEMENT, ("Agreement"), is made and entered
into on this the9Y day of , , 2006 by and between the CITY OF FORT
WORTH, TEXAS ("City"), a h e rule municipal corporation of the State of Texas,
located within Tarrant, Denton, Wise and Parker Counties, Texas and CHESAPEAKE
OPERATING, INC. C'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 abut 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 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 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.
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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.
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.
£ 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.
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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.
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
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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, 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 Fort Worth Ordinance Number
14880, on or before 45 days prior to the expiration date of the Letter of
Credit. If Operator 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 Operator'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 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 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 b.
FORCE MAJEURE
Events of Force Majeure shall mean any contingency or cause beyond the
reasonable control of a parry including, without limitation, acts of God or the public
enemy, war, riot, civil commotion, insurrection, government or de facto government
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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 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: Chesapeake Operating, Inc.
PO Box 18496
Oklahoma City, Oklahoma 73154-0496
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 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.
IN WITNESS WHEREOF, the parties 'o hereby afii-their signatures and enter
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into this Agreement as of the 1_day of_ 2006.
ATTEST: CITY OF FORT WORTH
j
Crty cretary Assistant Ci y Manager
NO M&C REQUIRED
Director of Development
APPROVED AS TO FORM
AND LEGALITY:
By.
ssistant City Attorney
CHESAPEAKE OPE ING, 1110
Pak
By:
Hen—, J. Hoo_, Senior Vice-President
Land and Legal
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STATE OF TEXAS §
COUNTY OF TARRANT §
A14 R#lLey
Befc�re�me,�thend r i�ned n$tary public, on this day personally appeared ,
the y ° ~ r��-�r'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 , 20_&L.
';u`•'�r`` WSE"BARNES Q �
'= MY COMMISSION EXPIRES
Memh 31,2008 Notary Public
STATE OF OKLAHOMA §
COUNTY OF OKLAHOMA §
Before me, the undersigned authority, a Notary Public in and for the State of Oklahoma,
on this day personally appeared Henry J. Hood, Senior Vice President, Land and Legal of
Chesapeake Operating, Inc., 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 the
corporation and that he executed the same as the act of said corporation for the purposes
and consideration therein expressed and in the capacity therein stated.
Given under my hand and seal of office this day of (/ 2006.
..........
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STATE OF TEXAS §
COUNTY OF TARRANT §
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Bef re e t e unde fined notary public, on this day personally appeared ,
the�� ei'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 q-4 day of , 20_4�_.
ROSELLA BARNES
'►; A = ,jy COMMISSION EXPIRES
� v�= Mamh 31,2009 Notary Public
STATE OF OKLAHOMA §
COUNTY OF OKLAHOMA §
Before me, the undersigned authority, a Notary Public in and for the State of Oklahoma,
on this day personally appeared Henry J. Hood, Senior Vice President, Land and Legal of
Chesapeake Operating, Inc., 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 the
corporation and that he executed the same as the act of said corporation for the purposes
and consideration therein expressed and in the capacity therein stated.
Given under my hand and seal of office this J day of 2006.
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EXP.05/11/10