HomeMy WebLinkAboutContract 40730SALTWATER PIPELINE LICENSE AGREEMENT
This PIPELINE LICENSE AGREEMENT ("Agreement") is hereby made and
entered into by and between the CITY OF FORT WORTH ("City"), a home rule municipal
corporation organized under the laws of the State of Texas and acting by and through Fernando
Costa its duly authorized Assistant City Manager, and Quicksilver Resources Inc, ("Company"),
a Delaware Corporation, acting by and through Don Cotten, Right -of --Way Manager and as
Attomey4n-Fact.
The following statements are true and correct and constitute the basis upon which the
City of Fort Worth has executed Agreement.
A. Quicksilver Resources Inc, a Delaware Corporation ("Company"), wishes to
construct a twelve inch (12") nominal diameter pipeline for an approximate total distance of
2795.23 linear feet within a fifteen (15') foot wide right of way corridor for the transportation of
saltwater through the portion of property described in Exhibits "A" and "B", hereinafter referred
to as "City Property". Because Company is not a public utility, as that term is used in the City
Charter and City Code, and because Company will not be providing services to end user
customers in the City, Company is not required to obtain a franchise from the City, but is
required to obtain the City's consent pursuant to a license agreement that sets forth the terms and
conditions under which Company may use the City Property.
B. The City has reviewed Company's request and agrees to grant Company a license
to use a portion of the surface and subsurface of the City Property as described in Section 6.3 and
as further set out in Exhibits "A" and "B" in order to construct, operate and maintain a pipeline,
on the terms and conditions set forth herein, solely for the transportation of saltwater and solely
in accordance with the terms and conditions of this Agreement. For initial construction, a
temporary construction workspace as described in Exhibits "A" and "B" is also granted as part of
this agreement.
Agreement
1. DEFINITIONS.
Capitalized terms used in this Agreement and not otherwise defined within this
Agreement shall have the following meanings:
Affiliate shall mean any individual, partnership, association, joint stock company, limited
liability company, trust, corporation, or other person or entity who owns or controls, or is
owned or controlled by, or is under common ownership or control with, the entity in
question.
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Agreement shall mean the authorization issued to Company hereunder to use a portion of
the City Property in the location as set out in Exhibits "A" and "B" for (i) the
construction, installation, maintenance and repair of Company's Pipeline; (ii) the use of
such Pipeline for the transportation of saltwater; and (iii) any other directly related uses
of the City Property, pursuant to and in accordance with this Agreement.
City shall mean the area within the corporate limits of the City of Fort Worth, Texas and
the governing body of the City of Fort Worth, Texas.
City Facility shall mean all incidental underground and aboveground attachments,
equipment and appurtenances, including, but not limited to manholes, manhole vents,
lateral line connections, valves, pipelines, junction boxes, fire hydrants, meter vaults, lift
stations in, upon, under and across a portion of the City Property.
City Property shall mean that property as limited to and described in Exhibits "A" and
G 413"
Commission shall mean the Railroad Commission of the State of Texas or other
authority succeeding to the regulatory powers of the Commission.
Company shall mean Quicksilver Resources Inc., a Delaware Corporation, only and shall
not include any Affiliate or third party.
Customer shall mean any Person located, in whole or in part, within the City.
Director shall mean the Director of the City's Planning and Development Department or
authorized representative.
Gas shall mean gaseous fuels, such as natural gas, artificial gas, synthetic gas, liquefied
natural gas, manufactured gas, or any mixture thereof.
Person shall mean, without limitation, an individual, a corporation, a limited liability
company, a general or limited partnership, a sole proprietorship, ajoint venture, a
business trust or any other form or business entity or association.
Pipeline shall mean that certain twelve (12") inch nominal diameter high density
polyethylene pipeline for an approximate total distance of 2795.23 total linear feet and
other facility locations as approved by the Director that are installed by Company in the
City Property in accordance with this Agreement.
Saltwater shall mean materials to be disposed of or reclaimed which have been
generated in connection with activities associated with the exploration, development and
production of oil or gas or geothermal resources, as those activities are defined in the
Texas Administrative Code, Title 16, Section 3.8(a)(30), and materials to be disposed of
or reclaimed which have been generated in connection with activities associated with the
solution mining of brine. "Saltwater" includes, but is not limited to, saltwater, other
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mineralized water, sludge, spent drilling fluids, cuttings, waste oil, spent completion
fluids, and other liquid, semiliquid or solid waste material. "Saltwater" also includes
waste generated in connection with activities associated with gasoline plants, natural gas
or natural gas liquids processing plants, pressure maintenance plants or repressurizing
plants unless that waste is a hazardous waste as defined by the administrator of the
United States Environmental Protection Agency pursuant to the federal Solid Waste
Disposal Act, as amended (42 United States Code § 6901, et seq.).
2. GRANT OF RIGHTS.
2.1. General Use of City Property for Transportation of water from Production
Wells.
Subject to the terms and conditions set forth in this Agreement and the City
Charter and ordinances, the City hereby grants Company a license to erect, construct,
install and maintain the Pipeline under, the surface of the Property and to transport
Saltwater through the portions of said Pipeline in accordance with Chapter 15, Article II,
Gas Drilling and Production of the City Code, as may be amended. Company hereby
acknowledges and agrees that this Agreement allows only the transportation of Saltwater
through the Pipeline under the surface of the Property and does not allow Company to
distribute, sell or otherwise provide Saltwater to any Customer or allow any other
individual, partnership, association, joint stock company, limited liability company, trust,
corporation, or other person or entity to place a pipeline or use said Pipeline for the
transportation of Saltwater or any other fluid or gas.
2.2. Nonexclusive.
This Agreement and all rights granted to Company herein are strictly
nonexclusive. The City reserves the right to enter into and grant other and future licenses
and other authorizations for use of the City Property to other Persons and entities in
accordance with applicable law and as the City deems appropriate; provided, however,
that as to the grant of subsequent licenses for use of the City Property that is solely within
the discretion of the City, if a dispute arises as to priority of the use of the City Property,
the City will resolve such dispute in a manner that does not result in unreasonable
interference with Company's operation of the Pipeline for the purposes provided for
herein. This Agreement does not establish any priority for the use of the City Property by
Company or by any present or future licensees or other permit holders. In the event of
any dispute as to the priority of use of the City Property, the first priority shall be to the
public generally, the second priority to the City in the performance of its various
fUnctions, and thereafter, as between licensees and other permit holders, as determined by
the City in the exercise of its powers, including the police power and other powers
reserved to and conferred on it by the State of Texas.
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2.3. Other Permits,
This Agreement does not relieve Company of any obligation to obtain permits,
licenses and other approvals from the City or other regulatory agency necessary for the
construction, installation, maintenance or repair of Company's Pipeline or the
transportation of Saltwater through such Pipeline.
2.4. Bonds.
Prior to the commencement of any construction work in the City Property, that
requires a cut, opening or other excavation, Company shall deliver to the City bonds
executed by a corporate surety authorized to do business in the State of Texas and
acceptable to the City in the proportional amount of the cost of work under the
construction contract or construction project that will be performed in the City Property.
The bonds shall guarantee (i) satisfactory compliance by Company with all requirements,
terms and conditions of this Agreement and (ii) full payments to all persons, firms,
corporations or other entities with whom Company has a direct relationship for the
performance of such construction, maintenance or repairs.
If any such construction, maintenance and repair work is undertaken by a
contractor of Company, Company shall also require such contractor to deliver to
Company bonds executed by a corporate surety authorized to do business in the State of
Texas and acceptable to the City in the proportional amount of the cost of work under the
construction contract or construction project that will be performed by the contractor in
the City Property. The bonds shall guarantee (i) the faithful performance and completion
of all construction, maintenance or repair work in accordance with the contract between
Company and the contractor and (ii) full payment for all wages for labor and services and
of all bills for materials, supplies and equipment used in the performance of that contract.
Such bonds shall name both the City and Company as dual obligees.
3. TERM
This Agreement shall become effective on the date as of which both parties have
executed it ("Effective Date") and shall expire at 11:59 P.M. CST twenty (ZO) years
from the last date of notarial acknowledgement unless terminated earlier as provided
herein.
4. FEES AND PAYMENTS TO CITY.
4.1. License Use Fee.
On or prior to the Effective Date, Company shall pay the City as compensation
for its use of the City Property for the Term of this Agreement the sum of one hundred
thirty thousand six hundred seventy-seven Dollars and zero Cents ($130,677.00)
("License Fee"). Company hereby acknowledges and agrees that the amount of this
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License Fee is non-refundable and constitutes just and reasonable compensation to the
City for Company's use of the City Property.
4.2. Other Payments.
In addition to the License Fee, Company shall pay the City all sums which maybe
due the City for property taxes, license fees, permit fees, or other taxes, charges or fees
that the City may from time to time impose on all other similarly situated entities within
the City.
4.3. Interest.
All sums not paid when due shall bear interest at the rate often percent (10%) per
annum or the maximum amount allowed by law, whichever is less, computed monthly. If
such outstanding sums are paid with interest within thirty (30) days following their
respective due dates, Company's failure to pay such sums by their respective due dates
shall not, in and of itself, constitute an Event of Default under Section 9 of this
Agreement.
5. REGULATORY AUTHORITY OF THE CITY.
Company's property and operations hereunder shall be subject to such regulation
by the City as may be reasonably necessary for the protection or benefit of the general
public. In this connection, Company shall be subject to, governed by and shall comply
with all applicable federal, state and local laws, including all ordinances, rules and
regulations of the City, as same may be adopted and amended from time to time.
6. USE OF THE CITY PROPERTY.
6.1. Compliance with Laws, Ordinances, Rules and Re;;ulations.
The 04 has the right to control and regulate the use of the City Property, Public
Rights of Way, public places and other City -owned property and the spaces above and
beneath them. Company shall comply with all applicable laws, ordinances, rules and
regulations, including, but not limited to, City ordinances, rules and policies related to
construction permits, construction bonds, permissible hours of construction, operations
during peak traffic hours, barricading requirements and any other construction rules or
regulations that may be promulgated from time to time.
6.2. No Undue Burden.
The Pipeline shall not be erected, installed, constructed, repaired, replaced or
maintained in any manner that places an undue burden on the present or future use of the
City Property by the City and the public. If the City reasonably determines that the
Pipeline does place an undue burden on any portion of the City Property, Company, at
Company's sole cost and expense and within a reasonable time period specified by the
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City, shall modify the Pipeline or take other actions detennined by the City to be in the
public interest to remove or alleviate the burden.
6.3. Minimal Inter ference.
Prior to the undertaking of any kind of construction, installation, maintenance,
repairs or other work that requires the excavation, lane closure or other physical use of
the City Property, Company shall, except for work required to address an emergency,
provide at least twenty-four (24) hours' advance written notice to the City and the owners
of property adjacent to the City Property that will be affected. In the case of emergencies
Company shall provide notice to the affected landowners within twenty-four (24) hours
after commencement of work. In addition, during any such work, Company shall provide
construction and maintenance signs and sufficient barricades at work sites to protect the
public. The use of traffic control devices shall be consistent with the standards and
provisions of Part VI of the Texas Manual on Uniform Traffic Control Devices.
Company shall utilize appropriate warning lights at all construction and maintenance
sites where one or more traffic lanes are closed or obstructed during nighttime conditions.
Company will take all reasonable planning to minimize harm to the City Property
and shall comply with conditions as set forth below:
6.3.1. All construction activities will occur outside of any landfill cap area and
performed in such a way that would be protective of the landfill area.
6.3.2 Construction within the City Property shall be performed in such a way
that would prevent the migration of any fugitive landfill emissions along the utility
corridor constructed in the City Property.
6.3.3 If during the course of construction landfill material or contaminated
material is encountered Company shall notify the City of Fort Worth, Environmental
manager or Environmental Management Department no later than one (1) business day
after discovery. The Company will be held responsible for disposing all materials as
required Federal, State and Local regulation in an appropriately permitted landfill or
waste disposal system.
6.3.4 Company shall have right from time to time to cut undergrowth and other
obstruction on City Property. Company shall also have the ability to remove any trees in
the City Property tract with the written approval of the City.
6.3.5 Company shall have the right to open trench as shown in Exhibit "A" and
«B»
6.3.6 Appropriate erosion control measures must be implemented during
construction.
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6.3.7 Company shall not have the right to place permanent above ground facilities
on City Property.
6.4. "As -Built" Plans and Maps.
Company, at Company's sole cost and expense, shall provide the City with as -
built plans of all portions of the Pipeline located in the City and the City's extraterritorial
jurisdiction and maps showing such Pipeline within ninety (90) calendar days following
the completion of such Pipeline. Company shall supply the textual documentation of
such as -built plans and maps in computer format as requested in writing by the City and
shall otherwise fully cooperate with the City in ensuring that the Pipeline is accurately
reflected in the City's mapping system.
6.5 Specifications of the Pipeline
The Company shall erect, install, construct, repair, replace and maintain the
Pipeline pursuant to this Agreement, Chapter 15 of the City Code and all other state and
federal laws. The Pipeline shall not exceed a twelve (12) inch nominal diameter, be
placed at a depth of no less than 36 inches throughout the entire length of the City
Property, however, if the Pipeline within City Property will be crossing any existing City
Facility, the Pipeline must cross the City Facility at a not less than a 70 degree angle and
be buried at a minimum of 60 inches below the bottom of the lowest City Facility.
Notwithstanding the foregoing statements, should Company require varying from the
above requirements, such variance shall require City evaluation of the respective variance
to depth or proposed angle of crossing to detennine the practicability of such request.
Furthermore, if the Pipeline within the City Property crosses a 16-inch or greater water or
sanitary sewer facility, an emergency response plan must be included. The emergency
response plan shall be submitted to the City of Fort Worth Water Department prior to the
commencement of the installation of the Pipeline and shall establish written procedures
subject to the approval of the City of Fort Worth Water Department to minimize any
hazard resulting to any City Facility.
6.6 Marking of Pipeline.
The Pipeline shall be marked, in a manner that is acceptable to the Director and in
compliance with Federal Regulations, to show conspicuously Company's name and a
toll -flee telephone number of Company that a Person may call for assistance.
6.7. Surface Excavation.
The City shall have the right to coordinate all excavation work in the City
Property in a manner that is consistent with and convenient for the implementation of the
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City's program for property management in order to preserve the integrity of the City
Property,
6.8. Relocation of Pipeline.
Within forty-five (45) calendar days following a written request by the City,
Company, at Company's sole cost and expense, shall protect, support, disconnect or
relocate to another portion of the City Property all or any portion of its Pipeline due to
street or other public excavation, construction, repair, grading, regrading or traffic
conditions; the installation of sewers, drains, water pipes or municipally -owned facilities
of any kind; the vacation, construction or relocation of streets or any other type of
structure or improvement of a public agency; any public work; or any other type of
improvement necessary, in the City's sole discretion, for the public health, safety or
welfare. If Company reasonably requires more than forty-five (45) days to comply with
the City's written request, it shall notify the director of the City's Department of
Engineering in writing and the City will work in good faith with Company to negotiate a
workable time frame.
6.9 Restoration of the City Property, Public Rights -of --Way and Public/Private
Property.
Company, at Company's sole cost and expense, and in a manner approved by the
City, shall promptly restore any portion of the City Property, Public Rights of Way, other
City -owned property or other privately -owned property that are in any way disturbed or
damaged by the construction, operation, maintenance or removal of any of the Pipeline
to, at Company's option, as good or better a condition as such property was in
immediately prior to the disturbance or damage. Company shall diligently commence
such restoration within thirty (30) calendar days following the date that Company first
became aware of the disturbance or damage or, if the Pipeline is being removed, within
thirty (30) calendar days following such removal.
6.10. Emergency Procedures
6.10.1.For purposes of this Section, a public emergency shall be any condition
which, in the opinion of the officials specified herein, poses an immediate threat
to life, health or property and is caused by any natural or man-made disaster,
including, but not limited to, storms, floods, fires, accidents, explosion, water
main breaks and hazardous materials spills. In the event of a public emergency,
the City shall have the right to take whatever action is deemed appropriate by the
City Manager, Mayor, Police Chief or Fire Chief, or their authorized
representatives, including, but not limited to, action that may result in damage to
the Pipeline, and Company hereby (i) releases the City, its officers, agents,
servants, employees and subcontractors from liability or responsibility for any
Damages, as defined in this Agreement, that may occur to the Pipeline or that
Company may otherwise incur as a result of such a response, and (ii) agrees that
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Company, at Company's sole cost and expense, shall be responsible for the repair,
relocation or reconstruction of all or any of its Pipeline that is affected by such
action of the City.
In responding to a public emergency, the City agrees to comply with all local,
state and federal laws, including any requirements to notify the Texas One Call
System, to the extent that they apply at the time and under the circumstances. In
addition, if the City takes any action that it believes will affect the Pipeline, the
City will notify Company as soon as practicable so that Company may advise and
work with the City with respect to such action.
6.10.2. The Company shall maintain written procedures to minimize the hazards
resulting from an emergency. These procedures shall at a minimum provide for
the prompt and effective response to emergencies, including, but not limited to,
leaks or releases that can impact public health safety or welfare; fire or explosions
at or in the vicinity of the Pipeline, natural disaster; effective means to notify and
communicate required and pertinent information to local fire, police and public
officials during an emergency; the availability of personnel, equipment, tools and
materials as necessary at the scene of an emergency; measures to be taken to
reduce public exposure to injury and probability of accidental death or
dismemberment; emergency shut down and pressure reduction of a Pipeline; the
safe restoration of service following an emergency or incident; and follow-up
incident investigation to determine the cause of the incident and require the
implementation of corrective measures.
6.10.3. Upon the discovery of an emergency, the Company shall immediately
communicate to the City's 911 system and the Planning and Development
Department designee the following information:
a. A general description of the emergency;
b. The location of the emergency or incident;
c. The name and telephone number of the person reporting the
emergency;
d. Whether or not any hazardous material is involved and
identification of the hazardous material so involved; and
e. Any other information as requested by the emergency dispatcher or other
such official at the time of reporting the emergency or incident
6.11. Removal of Pipeline.
Upon the revocation, termination or expiration without extension or renewal of
this Agreement, Company's right to use the City Property under this Agreement shall
cease and Company shall immediately discontinue the transportation of Saltwater in or
through the City. Within six (6) months following such revocation, termination or
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expiration and if the City requests, Company, at Company's sole cost and expense, shall
remove the Pipeline from the City Property (or cap the Pipeline, if consented to by the
City), in accordance with applicable laws and regulations. If Company has not removed
all of the Pipeline from the City Property, (or capped the Pipeline, if consented to by the
City) within six (6) months following revocation, termination or expiration of this
Agreement, the City may deem any portion of the Pipeline remaining in the City Property
abandoned and, at the City's sole option, (i) take possession of and title to such property
or (ii) take any and all legal action necessary to compel Company to remove such
property; provided, however, that Company may not abandon its facilities or discontinue
its services within the City without the approval of the Commission or successor agency
or any other regulatory authority with such jurisdiction.
Within six (6) months following revocation, termination or expiration of this
Agreement and in accordance with Section 6.9 of this Agreement, Company shall also
restore any property, public or private, that is disturbed or damaged by removal (or, if
consented to by the City, capping) of the Pipeline. If Company has not restored all such
property within this time, the City, at the City's sole option, may perform or have
performed any necessary restoration work, in which case Company shall immediately
reimburse the City for any and all costs incurred in performing or having performed such
restoration work.
7. LIABILITY AND INDEMNIFICATION.
7.1. Liability of Company.
Company shall be liable and responsible for any and all damages, losses,
liabilities (joint or several), payments, obligations, penalties, claims, litigation, demands,
defenses, judgments, lawsuits, proceedings, costs, disbursements or expenses (including,
without limitation, fees, disbursements and reasonable expenses of attorneys, accountants
and other professional advisors and of expert witnesses and costs of investigation and
preparation) of any kind or nature whatsoever (collectively "Damages"), which may
arise out of or be in any way connected with (i) the construction, installation, operation,
maintenance or condition of the Pipeline or any related facilities or appurtenances; (ii) the
transportation of Saltwater through the Pipeline; (iii) any claim or lien arising out of
work, labor, materials or supplies provided or supplied to Company, its contractors or
subcontractors; or (iv) Company's failure to comply with any federal, state or local law,
ordinance, rule or regulation, except to the extent directly caused by the negligent or
grossly negligent act(s) or omission(s) or intentional misconduct of the City.
COMPANY HEREBY ASSUMES ALL LIABILITY AND RESPONSIBILITY
FOR PROPERTY LOSS, PROPERTY DAMAGE AND/OR PERSONAL INJURY OF
ANY KIND, INCLUDING DEATH, TO ANY AND ALL PERSONS, OF ANY KIND
OR CHARACTER, WHETHER REAL OR ASSERTED, ARISING OUT OF OR IN
CONNECTION WITH ITS USE OF THE PREMISES UNDER THIS AGREEMENT
OR WITH THE USE, MAINTENANCE, OCCUPANCY, EXISTENCE OR
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LOCATION OF THE PREMISES, EXCEPT TO THE EXTENT CA USED SOLELY
BY THE NEGLIGENCE OR INTENTIONAL MISCONDUCT OF THE CITY.
7.2 Indemnification.
COMPANY, AT COMPANY'S SOLE COST AND EXPENSE, SHALL
INDEMNIFY AND HOLD HARMLESS THE CITY, ITS OFFICERS, BOARDS,
COMMISSIONS, AGENTS, EMPLOYEES AND VOLUNTEERS
("INDEMNITEES"), FROM AND AGAINST ANY AND ALL DAMAGES WHICH
MAY ARISE OUT OF OR BE IN ANY WAY CONNECTED WITH (I) THE
CONSTRUCTION, INSTALLATION, OPERATION, MAINTENANCE OR
CONDITION OF THE PIPELINE OR ANY RELATED FACILITIES OR
APPURTENANCES; (II) THE TRANSPORTATION OF SALTWATER THROUGH
THE PIPELINE; (III) ANY CLAIM OR LIEN ARISING OUT OF WORK, LABOR,
MATERIALS OR SUPPLIES PROVIDED OR SUPPLIED TO COMPANY, ITS
CONTRACTORS OR SUBCONTRACTORS; OR (IV) COMPANY'S FAILURE TO
COMPLY WITH ANY FEDERAL, STATE OR LOCAL LAW, ORDINANCE, RULE
OR REGULATION, EXCEPT TO THE EXTENT DIRECTLY CAUSED BY THE
NEGLIGENT A CT(S) OR OMISSION(S) OR INTENTIONAL MISCONDUCT OF
THE CITY.
7.3 Assumption of Risk and Environmental Remediation.
COMPANY HEREBY REPRESENTS TO THE CITY THAT (i) COMPANY
HAS FULLY INSPECTED THE PREMISES; (ii) COMPANY IS SATISFIED WITH
THE CONDITION OF THE PREMISES; AND (iii) COMPANY HAS BEEN FULLY
ADVISED OF ITS OWN RIGHTS WITHOUT RELIANCE UPON ANY
REPRESENTATION MADE BY THE CITY, ITS OFFICERS, AGENTS,
SERVANTS, EMPLOYEES, CONTRACTORS, SUBCONTRACTORS,
COMMISSIONS, BOARDS OR VOLUNTEERS. COMPANY HEREBY
UNDERTAKES AND ASSUMES, FOR AND ON BEHALF OF COMPANY, ITS
OFFICERS, AGENTS, CONTRACTORS, SUBCONTRACTORS AND EMPLOYEES,
ALL RISK OF DANGEROUS CONDITIONS, IF ANY, ON OR ABOUT THE
PREMISES.
ALTHOUGH, TO THE BEST OF THE CITY'S KNOWLEDGE, THE
PREMISES COMPLY WITH ALL APPLICABLE FEDERAL, STATE AND
LOCAL ENVIRONMENTAL LAWS AND REGULATIONS (COLLECTIVELY
"ENVIRONMENTAL LAWS'), THE CITY DOES NOT WARRANT SUCH.
COMPANYHEREBY COVENANTS AND AGREES THAT COMPANY, AT ITS SOLE
COST AND EXPENSE, SHALL BE FULLY RESPONSIBLE FOR THE VIOLATION
OF ANY ENVIRONMENTAL LAWS CAUSED, IN WHOLE OR IN PART, BY
COMPANY, ITS OFFICERS, AGENTS, SERVANTS, EMPLOYEES,
CONTRACTORS, SUBCONTRACTORS OR INVITEES, AND ANY REMEDJATION
THAT MAY BE REQUIRED AS A RESULT OF SUCH VIOLATION, EXCEPT TO
THE EXTENT CA USED BY THE CITY.
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7.4. Defense of Indemnitees.
In the event any action, lawsuit or other proceeding is brought against any
Indemnitee by reason of any matter for which the Indemnitees are indemnified hereunder,
the City shall give Company prompt written notice of the making of any claim or
commencement of any such action, lawsuit or other proceeding, and Company, at
Company's sole cost and expense, shall resist and defend the same with reasonable
participation by the City and with legal counsel selected by Company and specifically
approved by the City. In such an event, Company shall not admit liability in any matter
on behalf of any Indemnitee without the advance written consent of the City.
8. INSURANCE.
Company shall procure and maintain at all times, in full force and effect, a policy or
policies of insurance to provide coverages as specified herein, naming the City as an
additional insured and covering all public risks related to the use, occupancy, condition,
maintenance, existence or location of the City Property and the construction, installation,
operation, maintenance or condition of the Pipeline, including the transportation of
Saltwater through the Pipeline. The insurance required hereunder may be met by a
combination of self-insurance, primary and excess policies.
8.1. Primary Liability Insurance Coverage.
• Commercial General Liability:
$1,000,000 per occurrence, including coverage for the following: (i) Premises
Liability; (ii) independent contractors; (iii) products/completed operations, (iv)
personal injury; (v) contractual liability; (vi) explosion, collapse and
underground property damage.
• Property Damage Liability:
$10,000,000 per occurrence
• Automobile Liability:
$1,000,000 per accident, including, but not limited to, all owned, leased, hired or
non -owned motor vehicles used in conjunction with the rights granted under this
Agreement
• Worker's Compensation:
As required by law; and, Employer's Liability as follows:
$1,000,000 per accident.
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8.2. Revisions to Required Coverage.
At the reasonable recommendation of the Citys Risk Manager, the City may at any
time revise insurance coverage requirements and limits required by this Agreement.
Company agrees that within thirty (30) days of receipt of written notice from the City,
Company will implement all such revisions requested by the City. The policy or policies of
insurance shall be endorsed to provide that no material changes in coverage, including, but
not limited to, cancellation, termination, non -renewal or amendment, shall be made without
thirty (30) days' prior written notice to the City.
8.3. Underwriters and Certificates.
Company shall procure and maintain its insurance with underwriters authorized to
do business in the State of Texas and who are acceptable to the City in terms of solvency
and financial strength. Within thirty (30) days following adoption of this Agreement by the
City Council, Company shall furnish the City with certificates of insurance signed by the
respective companies as proof that it has obtained the types and amounts of insurance
coverage required herein. In addition, Company shall, on demand, provide the City with
evidence that it has maintained such coverage in full force and effect.
8.4. Deductibles.
Deductible or self -insured retention limits on any line of coverage required herein
shall not exceed $1,000,000 in the annual aggregate unless the limit per occurrence, or per
line of coverage, or aggregate is otherwise approved by the City.
8.5. No Limitation of Liability.
The insurance requirements set forth in this Section 8 and any recovery by the City
of any sum by reason of any insurance policy required under this Agreement shall in no way
be construed or effected to limit or in any way affect Company's liability to the City or other
persons as provided by this Agreement or law.
9. DEFAULTS.
The occui-�•ence at any time during the team of this Agreement of one or more of
the following events shall constitute an "Event of Default" under this Agreement:
9.1. Failure to Pay License Fee.
An Event of Default shall occur if Company fails to pay any License Fee on or
before the respective due date.
Alliance West to Brewer —Westport Saltwater PL Agreement Page 13 of 20
9.2. Breach.
An Event of Default shall occur if Company materially breaches or violates any
of the terms, covenants, representations or warranties set forth in this Agreement or fails
to perform any obligation required by this Agreement.
9.3. Bankruptcy, Insolvency or Receivership.
An Event of Default shall occur if Company (i) files a voluntary petition in
bankruptcy; (ii) is adjudicated insolvent; (iii) files any petition or fails to contest any
petition filed against it seeking any reorganization, arrangement, composition,
readjustment, liquidation, dissolution or similar relief for itself under any laws relating to
bankruptcy, insolvency or other relief for debtors; (iv) seeks, consents to or acquiesces in
the appointment of any trustee, receiver, master, custodian or liquidator of Company, any
of Company's property or any revenues, issues, earnings or profits thereof; (v) makes an
assignment for the benefit of creditors; or (vi) fails to pay Company's debts generally as
they become due.
9.4. Violations of the Law.
An Event of Default shall occur if Company violates any existing or future federal,
state or local laws or any existing or future ordinances, rules and regulations of the City.
9.5 Failure to Complete Construction
An Event of Default shall occur if Company fails to complete construction of the
Pipeline within one (1) calendar year from the execution of this Agreement.
10. UNCURED DEFAULTS AND REMEDIES.
10.1. Notice of Default and Opportunity to Cure.
If an Event of Default occurs on account of Company's failure to pay the License
Fee in accordance with Section 9.1 or failure to complete construction of the Pipeline in
accordance with Section 9.5, such Event of Default shall be deemed an Uncured Default
and the City shall have the right to terminate this Agreement immediately upon provision
of written notice to Company. If an Event of Default occurs for a reason other than for
failure to pay the License Fee, the City shall provide Company with written notice and
shall give Company the opportunity to cure such Event of Default. For an Event of
Default which can be cured by the immediate payment of money to the City, Company
shall have thirty (30) days from the date it receives written notice from the City to cure
the Event of Default. For any other Event of Default, Company shall have sixty (60)
days from the date it receives written notice from the City to cure the Event of Default. If
any Event of Default is not cured within the time period specified herein, such Event of
Default shall, without further notice from the City, become an "Uncured Default" and
the City immediately may exercise the remedies provided in Section 10.2.
Alliance West to Brewer —Westport Saltwater PL Agreement Page 14 of 20
10.2. Remedies for Uncured Defaults.
Upon the occurrence of an Uncured Default, the City shall be entitled to exercise,
at the same time or at different times, any of the following remedies, all of which shall be
cumulative of and without limitation to any other rights or remedies the City may have:
10.2.1. Termination of Agreement.
Upon the occurrence of an Uncured Default, the City may terminate this
Agreement. Upon such termination, Company shall forfeit all rights granted to it
under this Agreement, and, except as to Company's unperformed obligations and
existing liabilities as of the date of termination, this Agreement shall
automatically be deemed null and void and shall have no further force or effect.
Company shall remain obligated to pay and the City shall retain the right to
receive License Fees and any other payments due up to the date of termination.
Company shall remove the Pipeline from and restore the City Property as and
when requested by the City. The City's right to terminate this Agreement under
this Section 10.2.1 does not and shall not be construed to constitute any kind of
limitation on the City's right to terminate this Agreement for other reasons as
provided by and in accordance with this Agreement; provided, however, that
Company may not abandon the Pipeline without the approval of the Commission
or successor agency or other regulatory authority with jurisdiction, if such action
without such approval is prohibited at the time by applicable federal or state law
or regulation.
10.2.2. Legal Action Against Company.
Upon the occurrence of an Uncured Default, the City may commence
against Company an action at law for monetary damages or in equity, for
injunctive relief or specific performance of any of the provisions of this
Agreement which, as a matter of equity, are specifically enforceable.
11. PROVISION OF INFORMATION
11.1. Filin;;s with the Commission.
Company shall provide upon request copies to the City of all documents which
Company files with or sends to the Commission concerning or related to its
transportation of Saltwater through or other operations in the City, including, but not
limited to, filings related to (i) tariffs; (ii) rules, regulations and policies requested, under
consideration or approved by the Commission; and (iii) applications and any supporting
pre -filed testimony and exhibits filed by Company or third parties on behalf of Company,
on the same date as such filings are made with the Commission. In addition, Company
shall provide the City upon request with copies of records, documents and other filings
that Company is required to maintain or supply to the Commission under any applicable
Alliance West to Brewer — Westport Saltwater PL Agreement Page 15 of 20
state or federal law, rule or regulation concerning or related to its transportation of
Saltwater through or other operations in the City.
Lawsuits.
Company shall provide the City with copies of all pleadings in all lawsuits to
which Company is a party and that pertain to the granting of this Agreement and/or the
transportation of Saltwater through the City within thirty (30) days of Company's receipt
of same.
12. COMPANY AS INDEPENDENT CONTRACTOR.
It is expressly understood and agreed that Company shall operate as an independent
contractor as to all rights and privileges granted by this Agreement, and not as an agent,
representative or employee of the City. Company shall have the exclusive right to control
the details of its business and other operations necessary or appurtenant to the transportation
of Saltwater in accordance with the terms and conditions of this Agreement, and shall be
solely responsible for the acts and omissions of its officers, agents, servants, employees,
contractors and subcontractors. Company acknowledges that the doctrine of respondeat
superior shall not apply as between the City and Company, its officers, agents, employees,
contractors and subcontractors. Company further agrees that nothing herein shall be
construed as the creation of a partnership or joint enterprise between the City and Company.
13. ASSIGNMENT PROHIBITED.
Company may not assign or otherwise transfer any of its rights or obligations under
this Agreement unless specifically authorized in writing by the City, which authorization
shall not be unreasonably withheld; provided, however, that Company may make such an
assignment of its rights to an affiliated company without the consent of City, provided, that
upon such assignment, Company shall notify City within sixty (60) days of said
assignment. An `affiliated company' shall mean any parent, subsidiary or sister company or
other legal entity that controls, is controlled by, or is under common control with Company.
For purposes of this clause, `control' means direct or indirect ownership of fifty percent
(50%) or more of the voting rights of the subject entity. Notwithstanding such an
assignment to an affiliated company, Company shall remain liable to City for any failure to
perform hereunder by the affiliated assignee, and this provision shall thereafter be applicable
to Company and such affiliated assignee.
14. NOTICES.
Notices required pursuant to the provisions of this Agreement shall be conclusively
determined to have been delivered when (i) hand -delivered to the other party, its agents,
employees, servants or representatives, or (ii) received by the other party by United States
Mail, postage prepaid, return receipt requested, addressed as follows:
Alliance West to Brewer— Westport Saltwater PL Agreement
Pager 6 of 20
To THE CITY:
City of Fort Worth
Jean Petr, Gas Lease Program Manager
1000 Throckmorton
Fort Worth, TX 76102
with a copy to:
City of Fort Worth
Department of Law
Attn: Attorney for Real Property
1000 Throckmorton
Fort Worth, TX 76102
To THE COMPANY:
Quicksilver Resources Inc.
Jeff Cook, Executive V. P.
777 West Rosedale Street
Fort Worth, TX 76104
with a copy to:
Quicksilver Resources Inc.
Regulatory Affairs Department
777 West Rosedale Street
Fort Worth, TX 76104
15. NON-DISCRIMINATION COVENANT.
Company shall not discriminate against any person on the basis of race, color,
national origin, religion, handicap, sex, sexual orientation or familial status in the receipt of
benefits from Company's business operations, in any opportunities for employment with
Company or in the construction or installation of the Pipeline.
16. NO WAIVER.
The failure of the City to insist upon the performance of any term or provision of
this Agreement or to exercise any rights that the City may have, either under this Agreement
or the law, shall not constitute a waiver of the City's right to insist upon appropriate
performance or to assert any such right on any future occasion.
17. GOVERNING LAW AND VENUE.
This Agreement shall be construed pursuant to and in accordance with the laws of
the United States of America and the State of Texas. If any action, whether real or asserted,
at law or in equity, arise out of the terms of this Agreement, Company's transportation of
Saltwater or Company's use of the City Property, venue for such action shall lie exclusively
in state courts located in Tarrant County, Texas or the United States District Court for the
Northern District of Texas, Fort Worth Division.
Alliance West to Brewer —Westport Saltwater PL Agreement Page 17 of 20
18. CONFERENCES.
At the request of either the City or Company, the City and Company shall meet at
reasonable times and upon reasonable notice to discuss any aspect of this Agreement,
Company's Pipeline, Company's operations in the City, Company's transportation of
Saltwater or Company's use of the City Property.
19. SEVERABILITY0
MWOM
If any provision of this Agreement is held to be invalid, illegal or unenforceable by a
final order entered by a court of competent jurisdiction, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or impaired. For
purposes of this Agreement, a court order shall be final only to the extent that all available
legal rights and remedies pertaining to such order, including, without limitation all available
appeals, have been exhausted. In such an event, the City and Company agree that they shall
amend or have amended this Agreement to comply with such final order entered by a court
of competent jurisdiction.
20. FORCE MAJEURE.
In the event Company's performance of any of the terms, conditions or obligations
required by this Agreement is prevented by a cause or event that is not within Company's
reasonable control, Company's non-performance shall be deemed excused for the period of
such inability. Causes or events that are not within the Company's control shall include, but
not be limited to, acts of God, strikes, sabotage, riots or civil disturbances, failure or loss of
utilities, explosions and natural disasters.
21. HEADINGS NOT CONTROLLING.
Headings and titles, other than those captions in Section 1, that are used in this
Agreement are for reference purposes only and shall not be deemed a part of this
Agreement.
22. ENTIRETY OF AGREEMENT.
This Agreement, including the schedule of exhibits attached hereto and any
documents incorporated herein by reference, contains the entire understanding and
agreement between the City and Company as to the matters contained herein. Any prior or
contemporaneous oral or written agreement is hereby declared null and void to the extent in
conflict with the terms and conditions of this Agreement. This Agreement shall not be
amended unless agreed to in writing by both parties and approved by the City Council of the
City.
Alliance West to Bre���er —Westport Saltwater PL Agreement Page 18 of 20
EXECUTED as of the later date below:
CITY OF FORT WORTH:
Assistant City Manager
Date: a/J. -0
QUICKSILVER RESOURCES INC.
APPROVED AS TO FORM AND LEGALITY:
It + i " �Ild1
Assistant City Attorney
M&C: �-15U3°v
�e
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v
OFFICIAL RECORD
CITY SECRETARY
T.
WORTH, TX
Alliance West to Brewer —Westport Saltwater PL Agreement Page ] 9 of 20
ACKNOWLEDGEMENTS
THE STATE OF TEXAS
COUNTY OF TARRANT
BEFORE ME, the undersigned, a Notary Public, on this day personally appeared Fernando Costa,
Assistant City Manager of the City of Fort Worth, a home -rule municipal corporation of the State of
Texas, known to me to be the person whose name is subscribed to the foregoing instrument and, that (s)he
has executed the same for the purposes and consideration therein expressed.
GIVEN UNDER MY HAND AND SEAL OF OFFICE this A " day of A44S 010.
[SEAL,
r-
EVQNIA DANIELS
t4Y COMMISSION EXPIRES
July 10, 2013
THE STATE OF
COUNTY OF TARRANT
Notary Public in and for the
State of Texas
My Commission Expires:
Print Name of Notary Public Here
BEFORE ME, the undersigned, a Notary Public, on this day personally appeared
Don Cotten, Attorney-mn Fact, on behalf of Quicksilver Resources Inc., a Delaware Corporation, known
to me to be the person whose name is subscribed to the foregoing instrument and, that (s)he has executed
the same for the purposes and consideration therein expressed.
GFVE1j UNDER MY HAND AND SEAL OF OFFICE this �C0 day of
Arq J`z % 2010.
Notary Public in and for the
State of
Commission Expires:
/// / /��`%yi� 1���r�i-int Name of Notary Public
v
MIMI ELAINE KEENOM
My Commission Expires
March 13, 2013
OFFICIAL RECORD
CITY SECRETARY
T. WORTH, TX
Alliance West to Brewer —Westport Saltwater PL Agreement Page 20 of 20