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HomeMy WebLinkAbout06708 ORD - 11/28/1962T AN ORDINANCE AUTHORIZING AND DIRECTING THE CITY MANAGER TO EXECUTE AND DELIVER, FOR AND ON BEHALF OF THE CITY OF CORPUS CHRISTI, A CONTRACT OF SALE FOR THE SALE BY HOUSTON NATURAL GAS CORPORATION TO THE CITY OF CORPUS CHRISTI OF ITS NATURAL GAS DISTRIBUTION SYSTEM LOCATED WITHIN AND PARTLY WITHOUT THE CORPORATE LIMITS OF THE CITY OF CARPUS CHRISTI AND CERTAIN NATURAL G TRANSMISSION LINES GR CONSIDERATION OF $4,622,513-00, WTHSAID PRICEBEINSUBJECTTOCERTAIN ADJUSTMENTS SET FORTH IN LAID CONTRACT, ALL OF THE TERMS OF WHICH CONTRACT ARE SET FORTH THEREIN, A TRUE COPY OF WHICH IS ATTACHED HERETO AI4D MADE A PART HEREOF: AND DECLARING AN EMERGENCY. WHEREAS) THE HOUSTON [ IATURAL GAS CORPORATION HAS AGREED TO SELL ITS GAS DISTRIBUTION SYSTEM LOCATED WITHIN AND PARTLY WITHOUT THE CORPORATE LIMITS OF THE CITY OF CORPUS CHRISTI, TEXAS, A14D CERTAIN NATURAL GAS TRANS- MISSION LINES, AND THE CITY OF CORPUS CHRISTI IS AGREEABLE TO PURCHASE SAID SYSTEM ON CERTAIN TERMS AND CONDITIONS: tdOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF CORPUS CHRISTI, TEXAS: SECTION 1. THAT THE CITY MANAGER, BE, AND HE IS HEREBY, AUTHORIZED AND DIRECTED, FOR AND ON BEHALF OFTFIE CITY OF CORPUS CHRISTI, TO EXECUTE AND DELIVER A CONTRACT OF SALE FOR THE SALE BY HOUSTON 11ATURAL GAS CORPORATION TO THE CITY OF CORPUS CHRISTI OF ITS NATURAL GAS DISTRI- BUTION SYSTEM LOCATED WITHIN AND PARTLY WITHOUT THE CORPORATE LIMITS OF THE CITY OF CORPUS CHRISTI AND CERTAIN NATURAL GAS TRANSMISSION LINES FOR THE CONSIDERATION OF *lt,622,513.00, WITH SAID PRICE BEING SUBJECT TO CERTAIN ADJUSTMENTS SET FORTH IN SAID CONTRACT OF SALE,ALL OF THE TERMS OF WHICH CONTRACT ARE SET FORTH THEREIN, A TRUE COPY OF WHICH IS ATTACHED HERETO AND MADE A PART HEREOF. SECTION 2. THE NECESSITY FOR IMMEDIATE EXECUTION OF SAID CONTRACT OF SALE SO AS TO COMPLETE AS PROMPTLY AS POSSIBLE THE EXECUTORY PROVISIONS THEREOF CREATES A PUBLIC EMERGENCY AND AN IMPERATIVE PUBLIC NECESSITY RE- QUIRING THE SUSPENSION OF THE CHARTER RULE THAT NO ORDINANCE OR RESOLUTION SHALL BE PASSED FINALLY ON THE DATE OF ITS INTRODUCTION AND THAT SUCH • ..... ;': '�. ORDINANCE OR RESOLUTION SHALL BE READ AT THREE SEVERAL MEETINGS OF THE CITY COUNCIL, AND THE MAYOR HAVING DECLARED SUCH EMCRGENCY AND NECESSITY TO EXIST, HAVING REQUESTED THE SUSPENSION OF SAID CHARTER RULE AND THAT THIS ORDINANCE BE PASSED FINALLY ON THE DATE OF ITS INTRODUCTION AND THAT THIS ORDINANCE TAKE EFFECT AND BE IN FULL FORCE AND EFFECT FROM AND AFTER ITS PASSAGE, IT IS ACCORDINGLY SO ORDAINED THIS THE 28TH DAY OF NOVEMBER, 1962. MAYUK � THE CITY OF CORPUS CHRISTI, TEXAS ATTEST: ` J CITY SECRETARY APPROVED AS TO LEGAL FORM THIS THE 28TH DAY OF NOVEMBER, 1962: e� CITY ATTORNE 7 �. Y CONTRACT OF SALE THE STATE OF TEXAS ){ COUNTY OF NUECES • , �P THIS AGREEMENT, made and entered into 21 ti a,, zG�iv �,_ 1962, between HOUSTON NATURAL GAS CORPORATION, a corporation organized and existing under and by virtue of the laws of the State of Texas, with its principal office in Houston, Harris County, Texas, hereinafter called the "Seller "; the CITY OF CORPUS CHRISTI, TEXAS, Nueces County, a municipal corporation, hereinafter some- times called the "City "; and CORPUS CHRISTI MUNICIPAL GAS CORPORA- TION, a nonprofit corporation organized and existing under and by virtue of the laws of the State of Texas, hereinafter sometimes called "Municipal Gas "; either the City or Municipal Gas being sometimes hereinafter also referred to as "Buyer": W I T N E S S E T H: WHEREAS, the City is the owner and operator of a natural gas distribution system located within and without certain areas of its corporate limits; WHEREAS, the City and Seller entered into a contract dated November 15, 1960 for the sale by Seller and the purchase by the City of the natural gas requirements of the City's distribution system, said contract as amended by an amendment of February 1, 1961 hereinafter called "the 1961 Contract "; WHEREAS, Seller also is the owner and operator of a natural gas distribution system and certain natural gas transmission lines located within the City and desires to sell to the City or to Municipal Gas its distribution system and some transmission lines as hereinafter set forth; and WHEREAS, the City and Municipal Gas desire to purchase said properties of Seller as hereinafter set forth; NOW, THEREFORE, for and in consideration of the mutual covenants herein contained, and other valuable consideration set forth herein, the parties hereto agree as follows: ARTICLE I. SALE OF ASSETS AND ELECTION OF CITY. A. Seller will sell to City and City will buy from Seller the properties and assets of Seller described in Exhibit "I" attached hereto and made a part hereof for all purposes, free and clear of all mortgages, liens and encumbrances whatsoever, such properties and assets as the same shall exist on the Closing Date being sometimes hereinafter referred to as "the System," B. If by December 16, 1962 City has not received all necessary authorization from all sources, including a vote of the people, required by its charter or any law, to authorize it to purchase the System and carry out the transactions required by this Contract of Sale, Municipal Gas instead of City will buy from Seller and Seller will sell to Municipal Gas instead of City the System free and clear of all mortgages, liens, or encumbrances. C. As used hereinafter in this Contract of Sale the term "Buyer" means that one of City or Municipal Gas which is obligated by the terms of this Article I to purchase the System. ARTICLE II, CONSIDERATION. A. The consideration for the sale of the System shall be: 1. The sum of FOUR MILLION, SIX HUNDRED TWENTY TWO THOUSAND, FIVE HUNDRED THIRTEEN DOLLARS ($4,622,513), as hereinafter adjusted and the Seller agrees to purchase from Buyer on date of delivery of the System at a price of par and accrued interest to date of delivery, Buyer's duly authorized and issued First Mortgage Bonds (hereinafter sometimes referred to as the "Bonds ") in the aggregate principal amount equal to said purchase price. The Bonds shall be payable solely from the "net revenues" derived from the operation of the "Mortgaged System," As used herein "net revenues" means the gross receipts from the operation of the Mortgaged System after deduction of the reasonable cost of main- taining, operating and repairing the Mortgaged System. As used herein "Mortgaged System" meanantl'ie System in Areas 1 and 2',c and all growth and extensions in Areas 1 and 2 as such Areas are defined in Exhibit I hereto,, The Bonds will be additionally 6 secured by Indenture of Mortgage and Deed of Trust on the Mortgaged System which shall contain inter alia, the following provisions: (a) In the case one or more of the following events (hereinafter called "events of default ") shall happen: (i) Default in the payment of either the principal of any Bond when payable, whether at maturity, by call or redemption, or otherwise, or any interest on any Bond when the same shall become due and payable, and such default shall continue for 60 days; or (ii) The failure of Buyer for any reason (other than option of Seller) to purchase its requirements of gas for the System under the Gas Sales Agreement of 1962 more fully described in subparagraph (2) of Paragraph A of this Article; (iii) Failure of the City to maintain and operate such System; or (iv) Default by the Buyer in the performance, observance of any covenant, agreement or condition on its part in this Contract of Sale, the Bonds, or the Gas Sales Agreement of 1962 with Seller (hereinafter defined as the 111962 Contract ") if such default continues for a period of 60 days after written notice of such default to the Buyer, the Trustee may, and upon written request of the holders of not less than twenty -five per cent of the aggregate principal amount of the Bonds then outstanding, shall, by notice in writing delivered to the Buyer, declare the principal of all Bonds then outstanding and the interest accrued thereon immediately due and payable; and unless all covenants with respect to which default shall have been made shall be fully performed and all arrears of principal and interest, except the principal of Bonds not then due, shall be paid, the Trustee shall exercise the powers of foreclosure and sale under the Indenture of Mortgage and Deed of Trust, -3- N The Indenture of Mortgage and Deed of Trust shall contain the usual provisions of a Mortgage and Deed of Trust on personalty and real estate, respectively, generally in use in Texas, including (but not by way of limitation) provisions as to private pourer of sale foreclosure as authorized or as may be authorized under the laws of the State of Texas; provisions relating to the expenses of the sale and the commission of the Trustee; provisions relating to the appointment of a substitute trustee; provisions relating to the payment of taxes and assess- ments, insurance, maintenance of improvements in a state of good repair and condition and insurance with the amounts so paid becoming a part of the indebtedness; provisions as to operation of the properties by the Trustee; after acquired property except as to growth and extensions in Area 3 (as Area 3 is described in Exhibit I hereto) provisions; provision that the purchaser at any foreclosure sale shall be entitled to immediate possession of the System; provision that any such purchaser shall acquire as a part of the properties any and all rights of franchise held or owned by the Buyer relating to the use of public streets and properties; provision making all other provisions severable in the event of invalidity of any provision. (o) No remedy conferred upon or reserved to the Trustee of the Indenture of Mortgage and Deed of Trust is intended to be exclusive of any other available remedy or remedies, but each and every such remedy shall be cumulative and shall be in addition to every other remedy given under any written instrument or the Bonds, or existing by law or in equity. (d) Holders of the Bonds shall never have the right to demand payment of either the principal of or interest on the Bonds out of any funds raised or to be raised by taxation. 2. The entry into on or before the Closing Date by Buyer and Seller of a "Gas Sales Agreement of 1962," hereinafter called the °1962 Contract," in substantially the form attached -4- hereto as Exhibit "II ", for the sale by Seller to Buyer of Buyerys requirement of natural gas for the operation of the System. B. The price set forth in Paragraph A of this Article II, shall be adjusted by (i) increasing it by the actual book cost of any properties added to the System subsequent to July 31, 1962, (ii) decreasing it by the net book value of retirements of any portion of the System subsequent to J`u1y 31, 1962, (111) increasing it by the amount of Sellerts accounts receivable included in the System, and (iv) I decreasing it by the amount of security deposit obligations assumed by Buyer. 0, In the event Buyer fails for any reason to purchase its requirements of gas for the System from Seller pursuant to the 1962 Oontract, then Buyer shall be in default hereof and Seller shall have all remedies relating thereto, including, but not limited to, the remedies set forth in the Indenture of Mortgage and Deed of Trust securing the Bonds. D. The Bonds shall be dated January 1, 1963, and shall be in the denomination of $1,000 each, or such other amount as the parties may agree, aggregating the total purchase price set out herein. The Bonds shall become due and payable on January 1, in each of the years in the aggregate principal amounts, as follows: Year Principal Amounts 196 $200,000.00 196 5 200,000.00 196 L 200,000.00 1960Dq 200,000.00 196Y$ 200, 000.00 196$ -197.T both inclusive An amount of principal in `) each year which will result in the total Principal and interest requirements for each of said years being equal to the nearest $5,000.00 The Bonds shall, bear interest from date until paid at the rate or rates hereinafter determined, payable January 1, 1964 and gen3- annually thereafter on each July 1 and January 1. E. If the Bonds are issued by Municipal Gas, the following shall apply, to -wit: -5- 1. The Bonds shall bear interest at the rate of ten per cent (10%) per annum unless the interest on such Bonds is excludable from gross income for Federal income tax purposes, then the Bonds shall bear interest at the rate of five per cent (5%) per annum. Such interest shall be evidenced by two coupons coming due on each interest payment date, each one for an amount equal to 5% per annum. If the interest on the Bonds is excludable from gross income for Federal income tax purposes, the Bonds shall be callable for payment prior to maturity, on any interest payment date on or after January 1, 1968, at par and accrued interest to date of redemption plus a premium on the principal amount redeemed as follows: 5% if redeemed on an interest payment date in 1968; 4% if redeemed on an interest payment date in 1969; 3% if redeemed on an interest payment date in 1970, 2% if redeemed on an interest payment date in 1971; 1% if redeemed on an interest payment date in 1972, and if called for redemption prior to maturity on or after January 1, 1973, such Bonds shall be redeemed at par and accrued interest to date of redemption. If the interest on the Bonds is not excludable from gross income for Federal income tax Purposes, the Bonds shall be callable for payment prior to maturity on July 1, 1963 and on any interest payment date at par and accrued interest to date of redemption plus a premium on the principal amount redeemed as follows: 132% if redeemed on July 1, 1963; 12% if redeemed on an interest payment date in 1964; 11% if redeemed on an interest payment date in 1965; 92% if redeemed on an interest payment date in 1966; 8% if redeemed on an interest payment date in 1967; 5% if redeemed on an interest payment date in 1968; 4% if redeemed on an interest payment date in 1969; 3% if redeemed on an interest payment date in 1970; 2% if redeemed on an interest payment date in 1971; 1% if redeemed on an interest payment date in 1972, and if called for redemption prior to maturity on or after January 1, 1973, such Bonds shall be redeemed at par and accrued interest to date of redemption, 2. In the event the Bonds are issued other than by the City itself, the interest on the Bonds shall not be con- sidered as excludable from gross income for Federal income tax Purposes as the term is used in this Contract of Sale unless a ruling to such effect is received from the Internal Revenue Service of the United States Treasury Department on or before January 1, 1964, Such ruling must be in writing and must, in the opinion of Messrs, Fulbright, Crocker, Freeman, Bates & Jaworski, attorneys at law, Houston, Texas, specifically concerns the Bonds. Upon delivery of the Bonds to the Seller, coupons representing 5% per annum will be received and held by the corpo- rate Trustee named in the Indenture of Mortgage and Deed of Trust. Upon receipt of the ruling and the opinion referred to in this paragraph, the said coupons shall be cancelled and delivered to Municipal Gas. If such ruling and opinion are not received by the Trustee on or before January 1, 1964, the Trustee shall at the close of business on such date deliver such coupons to the holders of the Bonds to which they respectively appertain, 3, The Indenture of Mortgage and Deed of Trust securing the Bonds shall contain substantially the following provisions governing the flow of funds and the issuance of additional bonds, to -wit; (a) Flow of Funds. All revenues except for amounts received for "tap charges" for putting new customers on the Mortgage System shall be collected by Municipal Gas and deposited as collected into the Revenue Fund. (i) Revenue Fund (to be held by the Trustee under the Indenture of Mortgage and Deed of Trust). No withdrawals shall be made by Municipal Gas from the Revenue Fund, (ii) Operating Fund. The Trustee from time to time shall pay to Municipal Gas from the Revenue Fund] -7- upon receipt of requisitions by Municipal Gas, the amounts stated in such requisitions. The amounts thus withdrawn shall be deposited by Municipal Gas in a bank or banks and shall be used as a revolving fund for the payment by Muncipal Gas for items of operating expense. The amount held by Municipal Gas in the Operating Fund shall never exceed thousand dollars ($7Saou ). On or before the 20th day of each month, the Trustee shall withdraw from the Revenue Fund all monies then held for the credit of the Revenue Fund, Beginning with the first month following the date the System is purchased by the Buyer, of the funds thus with- drawn to the extent available in the following order of preference, the Trustee shall deposit to the credit of the: (iii) Interest and Sinking Fund (to be held by the Trustee), an amount which will be ecpgal to 1 /6th of the amount of interest due on all outstanding Bonds on the next ensuing interest payment date, provided that for the year 1963 such deposit shall be 1 /12th of the amount of interest due on the first interest payment date; and 1/12th of the next maturing installment of principal of the Bonds. If an interest payment or principal installment shall be payable in less than 12 months after the date on which Bonds shall have been first authenticated and delivered, the respective amounts to be deposited on account of the interest on and the principal of the Bonds in each such month prior to the maturity date of such installment shall be that amount which multiplied by the number of such deposits shall be equal to the amount required for paying such interest coming due or such installment of principal of such Bonds. Any accrued interest on the Bonds shall be deposited to the credit of the Interest and Sinking 10 Fund and shall be taken into account in determining the amount to be deposited for payment of interest during the year 1963. (iv) Reserve Fund (to be held by the Trustee), if and to the extent required, 1 /60th of an amount equal to the greatest amount of combined interest and principal payable on the Bonds in any one year, until the amount in the Reserve Fund shall be equal to such greatest combined interest and principal payable on the Bonds in any one year. (v) Extensions and Redemption Fund (to be held by the Trustee), the remaining amount of the monies withdrawn from the Revenue Fund. In addition to the deposits to the Extensions and Redemption Fund as required above, all tap charges shall be paid directly into the Extensions and Redemption Fund. The monies in the Extension and Redemption funds shall not be used for partial redemption of the Bonds until the monies in the Reserve fund equal the greatest combined interest and principal payable on the Bonds in any one year. (b) Additional Bonds. The Indenture of Mortgage and Deed of Trust shall Vrovide that additional bonds on a parity with the Bonds may be issued from time to time by Municipal Gas only upon the following conditions: (i) To provide funds to purchase the additional properties described in paragraph * of Article III hereof, or (ii) If the net revenues of the Mortgaged System for each year of the preceding two year period have equalled at least 150% Of the principal and interest requirements of the Bonds then outstand- ing and are estimated by a recognized Engineer in the field of gas utility engineering to equal 150% of the principal and interest requirements on all follows: 5% if redeemed on an interest payment date in 1968; 4% if redeemed on an interest payment date in 1969; 3% if redeemed on an interest payment date in 1970; 2% if redeemed on an interest payment date in 1971; 1% if redeemed on an interest payment date in 1972, and if called for redemption prior to maturity on or after January 1, 1973, such Bonds shall be redeemed at par and accrued interest to date of redemption; and the ordinance authorizing the issuance of the Bonds will be in a form customarily used by cities in authorization of gas utility revenue bonds, provided that the provisions pertaining to the Reserve Fund set forth in Clause (iv) of Subparagraph (a) of Paragraph 3 of Paragraph E of Article IT hereof and the provisions pertaining to the issuance of additional bonds set forth in Clause (ii) of Subparagraph (b) of Paragraph 3 of Paragraph E of Article II hereof are contained in said ordinance, and provided further the provisions for the issuance of additional bonds shall be tied to the revenues of the entire gas system owned by the City rather than limited to the revenues of the Mortgaged System as used in such clause. -10- . I % ARTICLE III. PURCHASE OF ADDITIONAL PROPERTY A. The System as described in Article I hereof does not include such miscellaneous properties such as trucks, office equipment, et cetera. In the event Buyer and Seller mutually - agree for Buyer to buy and Seller to sell any of such miscella- neous properties of the Buyer located in the City of Corpus Christi on the Closing Date hereof then such sale shall be evidenced by an agreement in writing at a price to be agreed upon, now contemplated to be the net book value of such miscellaneous property, with payment therefor to be made in cash at the time of the sale of such miscellaneous properties. B. if any time after March 1, 1966 and during the term of the 1962 Contract the Seller is not selling to City under a contract having a minimum term of five years, the amount of gas which City has presently agreed to purchase from the Seller under the 1961 Contract, or if prior to March 1, 1966, the City awards a contract to another supplier for the supply of gas to any portion of the City's distribution system for any period prior to the end of the term of the 1962 Contract, then the City or Municipal Gas, whichever is the owner of the Mortgaged Property at the time of the conveyance of the hereinafter described properties, shall purchase for cash, any one or more, or all, at the election of the Seller, of the properties (i) through (v) described in Exhibit IV hereto. The price to be paid for each such property shall be the reproduction cost new thereof less observed depreciation at the time of the election made by the Seller. If the Buyer and the Seller are unable to agree upon the price using such formula, the utility consulting firm of H. Zinder & Associates, Inc., shall be employed to determine the reproduction costs new, less observed depreciation, and the cost of such determination shall be borne one -half by the Buyer, one -half by the Seller. -11- nereor ror siml.iar property ineivaea in the system. ARTICLE IV. _SECURITY DEPOSITS AND REFUND OBLIGATIONS A. Seller has notified Buyer that Seller holds certain security deposits made by customers in Corpus Christi, Texas, which security deposits are held in accordance with the usual rules of the Seller relating to the service. Shortly before the Closing Date the Seller shall notify the Buyer as to the specific names of customers and amounts of security deposits held for each of them. This is the amount that is to be used as an adjustment to the pur- chase price as set forth in Article II hereof. -12- B. From and after the Closing Date Buyer shall assume and perform all obligations of Seller with respect to these security deposits specified in the information given by Seller to Buyer and will indemnify and hold harmless Seller from all claims of customers because of such specified security deposits. C. Seiler has received advances in aid of construction from certain of its existing customers and with some of them has obligations to make refunds of all or a portion of such advances upon certain terms and conditions. Seller will continue to be responsible to its customers under any such refund obligations and will hold harmless and indemnify Buyer from all claims of customers under such refund obligations of Seller. ARTICLE V. ACCOUNTS RECEIVABLE A. Shortly before the Closing Date hereof, Seller shall furnish to Buyer an itemized list of accounts receivable as of the date of last billing, where applicable, which list of accounts receivable shall be used in making the adjustments in purchase price as set forth in Article II hereof. B. As promptly as possible after the first billing following the Closing Date, readings of all gas customers on the System shall be made by Buyer and a pro rata protion of such accounts for the period between the last billing date prior to the Closing Date and the Closing Date itself shall be added to the purchase price as set forth in Artiole II hereof and paid promptly by Buyer. ARTICLE VI. FRANCHISE A. Seller is presently operating a gas distribution and transmission system in the City under a franchise granted by the City. Effective at the $losing Date hereof and for so ctiFS ,fSE�+E� N6"r9Er, o"o A-Y' Ass" long as it does not own or operate the System,ASellernwill 't have the right under said franchise to operate a distribution system for the purpose of serving customers, other than industrial customers, within the city limits of the City A t �� 411-1e� ro-.. service to industrial customers within the city limits of the City and for the operation of such a system as is necessary to move gas through the City for any reason whatsoever Seller's rights under the franchise will continue. If at any time Seller reacquires the System under the Mortgage and Deed of Trust or otherwise, then Seller will have and be entitled to exercise all of the rights that it now has under its franchise from the City. Industrial customers as used herein shall mean those customers who now or hereafter desire to buy gas from Seller at an average annual consumption of at least 500,000 cubic feet per day. B. If Municipal Gas is the Buyer hereunder, the City, promptly after the execution of this Contract of Sale, shall grant Municipal Gas a franchise giving to Municipal Gas and its successors, lessees, and assigns, the same rights to use the public streets of the City that Seller now has for as long a. period as may be granted by the City acting through its Mayor and City Council C. Muni p l G re a that if it is the Buyer here- under it will at an times prior to the payment of the Bonds referred toinArticle II hereof have a franchise from the City permittingAit the same rights that Seller now has to use the streets of the City, and if at any time it does not have such a franchise it shall be in default hereof of the Mortgage and Deed of Trust referred to in Article II hereof. D. Prior to the payment of the Bonds, City will not grant the right to any one other than the Buyer to use any of the streets of the City for a natural gas distribution system supplying gas to customers within Areas 1 and 2 E If at any time prior to the payment of the Bonds referred to in Article II hereof City grants the right to Southern Community Gas Company, or any successor or assignee, either direct or remote, of Southern Community Gas Company for the use of the public streets of the City for the operation of a gas distribution system for the sale of gas to customers in the City, the franchise shall contain a provision authorizing the City, at the City's election, to purchase such gas distribution system and all appurtenances and related properties in accordance with the "Franchise Option Provisions "set out in Exhibit III attached to this Contract of Sale. ARTICLE VII. CLOSING DATE A. The closing of this Contract of Sale shall be held on the �& day of ,.w at -4: Oo 10, M. in the City Hall of Corpus Christi, Texas, or on such alternate date prior to January 31, 1963, or at such other place as may be agreed upon by Seller and Buyer. At the closing Buyer will deliver to Seller its revenue bonds previously described for which.. Seller will pay the par amount thereof, plus accrued interest to date of delivery, and Buyer will pay to Seller the purchase price of the System in cash. Seller will deliver at the time of closing an executed Conveyance and Bill of Sale, with the warranties of title and covenants set out hereafter, and such other instruments of transfer and convey- ance as Buyer shall reasonably request, conveying to Buyer all of the System. B. At any time and from time to time after the Closing Date, upon request of Buyer, Seller will execute, acknowledge and deliver deeds, assignments, transfers, conveyances, powers of attorney and assurances as may be required for the better assign- ing, transferring, granting, conveying, assuring and confirming to Buyer, or its successors and assigns, or for aiding and assist- ing in collecting and reducing to possession, any and all of the assets or properties to be assigned by this Contract of Sale. C. As of the close of business upon the daSr.of closing the Buyer will "take over" the properties sold to it and shall assume ownership, operation and control of the properties herein described, -15- ARTICLE VIII. ASSUMPTION OF CERTAIN LIABILITIES BY BUYER Buyer will assume and perform all obligations, covenants and agreements accruing after the closing day in connection with (a) all gas sales and service contracts with consumers and cus- tomers conveyed hereunder, it being expressly understood that there are no such contracts not terminable on a notice of thirty days or less except those described in a list furnished the City at the time of execution of this Contract of Sale, (b) all fran- chises, licenses, permits, easements and rights -of -way which are Included in the System, mention being made in this regard that annual or other regular or special contractual payments, charges or fees may accrue and become payable under or in connection with various of said franchises, licenses, permits, easements or rights - of -way as compensation, rental or payment for the continuance in effect or use or exercise of the rights and privileges therein granted, and a such payments, charges or fees which may so accrue after the closing day are assumed by Buyer and are not to be considered or deemed as "liens" or'bneumbrances" on any of the properties of Seller covered by this Contract of Sale. ARTICLE IX. REPRESENTATIONS BY SELLER Seller represents to Buyer that: A. At the present time some of the properties of Seller covered by this Contract of Sale are subject to liens securing Indebtedness of Seller, but on or before the closing Seller will obtain proper releases of such liens or will, at the closing, deliver to Buyer its written guarantee that such releases will be obtained promptly and thereafter Seller will promptly obtain such releases. Buyer agrees to accept such guarantee in lieu of releases at the Closing Date. B. Seller holds rights -of -way, licenses and permits which are deemed adequate and sufficient to permit it to operate the System and all of Seller's right, title and interest in all the rights -of -way, licenses and permits held by Seller in connec- tion with the System are included herein (except as may be express- ly provided in Exhibit "I "), whether or not specifically described in such Exhibit. -16- C. Seller is in possession of and is using all pipe- lines and facilities included in the System, and no objection to the location or use of said pipelines and facilities or adverse claims of title to the lands, rights-of-way or easements on which said pipelines and facilities are situated is presently being asserted by any other person or persons insofar as Seller is aware. D. Seller will make available to the authorized repre- sentatives of or attorneys for Buyer at any time or times prior to closing all title files and other files which Seller has per- taining to rights -of -way, easements or permits held by Seller included in the System -- although it is recognized that Seller may not have complete title information down to date on all such matters -- and the Bill of Sale and Conveyance to be executed Incident to closing hereof shall provide that Seller warrants the title to all items of personal property included in the System and all easements and rights -of -way and other property Included in the System as against all persons whomsoever claiming or to claim the same, or any part thereof, by, through or under Seller, but not otherwise; provided that said Conveyance shall contain a general warranty of title by Seller covering only the land and improvements owned by Seller at the street address of 4225 South Port Street, Corpus Christi, Texas, where Seller's main Corpus Christi office is situated. E, There are no actions, suits or proceedings pending or, to the knowledge of any officer or director of Seller, threat- ened, affecting the properties to be sold hereunder. F. The entry of Seller into this Contract of Sale and the consummation of the transactions provided for herein will not violate or constitute a breach of any contract or other agreement or warranty, representation or covenant contained therein. ARTICLE X. REPRESENTATIONS BY BUYER Buyer represents to Seller that: -17-; � 1 A. The Buyer, by all necessary proceedings, has approved and authorized this Contract of Sale and the 1962 Contract, the transactions contemplated herein and in the 1962 Contract, and the execution and delivery to Buyer of this instrument and the 1962 Contract. B. Buyer has a good and sufficient authorization to operate a gas distribution system which includes the properties covered by this Contract of, Sal ra��'r. , 2.aLr7s.L�,.,N��r4.R. ARTICLE XI. /�" The City shall, if is the Buyer, or it will permit Municipal Gas to, if Municipal Gas is the Buyer, fix and maintain rates and collect charges for the Mortgaged System which will provide revenues sufficient at all times to pay ail charges against the Operating Fund, maintain the Interest and Sinking Fund maintain the Reserve Fund, and have reasonable monied for the Ex- tensions and Redemption Fund as provided in Article IT hereof: ARTICLE XII. INDEMNITY Seller will indemnify and hold harmless Buyer against and in respect of any claim for brokerage or other commissions relative to this Contract of Sale or to the transactions contem- plated hereby, based in any way upon agreements, arrangements, or understandings made by Seller with any other party or parties whatsoever. Buyer will indemnify and hold harmless Seller against and In respect to any claim for brokerage or other commissions relative to this Contract of Sale or to the transactions contem- plated hereby, based in any way upon agreements, arrangements or understandings made by Buyer with any other party or parties whatsoever. ARTICLE XIII. BOOKS AND RECORDS A. Upon the closing hereof the books, records and ac- counts of Seller pertinent to the sale of gas to customers from the properties covered by this Contract of Sale shall be delivered to Buyer, and shall be preserved and maintained by Buyer. None -18- of such books, records and accounts so delivered to Buyer shall be destroyed by Buyer prior to the expiration of ten (10) years from the date hereof. B. Seller agrees that it shall, prior to the closing hereof, afford to the officers and accredited representatives of Buyer free access to the plant, properties, and records of Seller relative to the properties of Seller covered by this Contract of Sale in order that Buyer may have full opportunity to make such investigation as it shall desire to make of the affairs of Seller relative to the properties covered by this Contract of Sale. ARTICLE XIV. CONDITIONS A. The obligations of Buyer hereunder are subject to the conditions that, on or before the Closing Date: 1. Buyer shall have received opinions of counsel for Seller, Messrs. Fulbright, Crooker, Freeman, Bates & Jaworski, dated as of the Closing Date, stating that based on representations of the Seller on which such counsel be- lieves it can rely that Seller's interest3n the properties and assets covered hereby is free and clear of all mortgages or liens (except liens securing indebtedness, neither assumed nor guaranteed by the Seller nor on which it customarily pays interest, existing upon the real estate or right in or to real estate ffholudIng rights -of -way and easement) acquired by the Seller for pipeline or right -of way purposes) securing any indebtedness of Seller. 2. Buyer shall not have discovered any material error, misstatement or omission in the representations made by Seller in Article IX hereof, and all the material terms, covenants and conditions of this Contract of Sale to be complied with and performed by Seller on or before the Closing Date shall have been substantially complied with and performed. 3. The properties of Seller covered by this Contract of Sale shall not have been adversely affected prior to the -19- Closing Date, in any material way as a result of any fire, accident or other casualty, act of Cod or public enemy. 4. The representations made by Seller herein shall be substantially correct, as of the Closing Date, with the same force and effect as though such representations had been made as of the Closing Date, except to the extent that such representations shall be incorrect as of the Closing Date because of events or changes (not materially adversely affecting the properties covered by this Con- tract of Sale) occurring or arising after the date hereof In the ordinary operation of the properties covered by this Contract of Sale or in the fulfillment of the express provisions of this Contract of Sale. 5. Seller has continued to operate the System and is not prevented from so doing by any duly constituted authority. Provided, that Buyer shall have the right at its election to waive compliance with any such condition. B. The obligations of Seller hereunder are subject to: 1. The execution and delivery by the Buyer of this Contract of Sale and the 1962 Contract. 2. All instruments and documents required to carry out this agreement shall have been approved as to form by Messrs. Ful.bright, Crooker, Freeman, Bates & J'aworski, counsel for Seller. 3. Seller shall have received the opinion of Messrs. McCall, Parkhurst, Crow; McCall & Horton that the Bonds are valid obligations of the Buyer and a rceable in accordance with their terms. �k Provided, that Sellers l�the right at its elec r tion to waive compliance with any such condition. ARTICLE XV. EXPENSES If the transactions contemplated hereby shall not be consummated, each party hereto shall pay its own expenses incid nt to preparation for carrying this Contract of Sale into effect and consummating said transactions. If the transaction contemplated hereby shall be consummated, each party shall pay its own expenses incident to carrying this Contract of Sale into effect and consum- mating said transaction except that Seller shall pay the cost of all documentary and other transfer stamps and recording fees in connection therewith, and except that Seller shall also pay any charges or transfer fees required for obtaining consents to the assignment to Buyer, or necessary additional assignments or trans- fers of title to Buyer, of any of the individual properties In- cluded in the properties to be conveyed to Buyer. All ad valorem or property taxes applicable to the System for the year of closing, and rental on any lease included in the System covered hereby for the month of closing, shall be prorated between Buyer and Seller as of the date of closing. Seller will pay all gross receipts taxes or other taxes measured by sales or deliveries of'gas through the System incurred or accruing down to the date of closing, and all such taxes incurred or accruing after such date will be paid by Buyer. ARTICLE XVI. CORPORATE ACTION Seller has taken, or will take prior to the Closing Date, all necessary and appropriate corporate action requisite to author- izing this Contract of Sale and the conveyance, assignment, trans- fer and delivery of the property and assets upon the terms and conditions provided herein. ARTICLE XVII. PRESENT EMPLOYEES Buyer will give the present employees of Seller the first opportunity at employment by Buyer to fill any vacant posi- tions to operate the System after its purchase by Buyer. ARTICLE XVIII, SURVIVAL OF REPRESENTATIONS The representations contained in Articles IX and X hereof Will survive the closing under this Contract of Sale. -P- • • ARTICLE XLX. NONASSIGNABILITY This Contract of Sale shall not be assignable by any party hereto nor shall the System be sold by Buyer prior to its payment of the full purchase price of the System and the addi- tional property described in Article III hereof except with the written consent of the other parties hereto. Nothing in this Contract of Sale, express or implied, is intended to confer upon any person, other than the parties hereto and their successors and assigns, any righte, remedies, obligations or liabilities under or by reason of this Contract of Sale. ARTICLE XX. LEASE Seller has gas dispatching and control equipment, including radio and telemetering equipment, in its present office building at 4225 South Port Street, Corpus Christi, Texas. After Buyer.•acquires such office building it will lease to Seller for the purpose of controlling and dispatching gas the same space now used by Seller in the office building to conduct its dispatching and controlling of gas, all at a reasonable rental, such lease to be terminable at the will of Seller on thirty days' notice and at the will of Buyer on sufficient notloe to allow Seller to re- move its dispatching and control equipment and set up a new dis- patch and control center without interruption of gas dispatch and control. ARTICLE M. SEVERABILITY, If any provision of this Contract of Sale or if the application of any provision of this Contract of Sale under any particular circumstances shall be held to be illegal or unen- shall in no wise affect or invalidate the remaining provisions hereof. -22- • ARTICLE M1. ADDRESSES Any request, Instruction or document to be given here- under by any party hereto to the other party shall be in writing and delivered in person or sent by mail, if to the Buyer, addressed to Corpus Christi, Texas, and if to Seller, addressed to Houston Natural Gas Corporation, Post Office Box 1188, Houston, Texas, Attention Mr. Jackson C. Hinds, Senior Vice President, ARTICLE XXIII. MISCELLANEOUS This Contract of Sale shall be governed by, and construed in accordance with, the laws of the State of Texas and can be changed or terminated only by an agreement in writing signed by all of the parties hereto. This Contract of Sale embodies the entire understanding between the parties and there are no prior effective representations, warranties or agreements between the parties. IN WITNESS WHEREOF, the parties hereto have caused this instrument to be duly executed in multiple originals. HOUSTON NATURAL GAS CORPORATION ATTEST: By CORPUS CHRISTI MUNICIPAL GAS CORPORATION ATTEST: By CITY OF CORPUS CHRISTI, TEXAS ATTEST: By 1962. APPROVED as to legal form this day of , -23- EXHIBIT I TO CONTRACT OF BALE I. All distribution gas mains owned by Houston Natural Gas Corporation (the "Company ") in its distribution systems located within the present city limits of the City of Corpus Christi, Texas (the "City "), being located in the areas designated as Area 1 ZS-outh Are, Area 2 ffouthwest Area and Area 3 gest Area in Company's present franchise from the City, and in the Flour Bluff, Annaville and Calallen areas now included within the city limits by annexation thereof, together with all distribution gas mains owned by Company in the areas which are outside but contiguous to the city limits of the City, which are continuations of distribution gas mains owned by the Company inside the city limits. For all purposes herein "distribution gas mains" shall mean gas distribution pipe lines, and gas feeder and service lines connected thereto and receiving gas therefrom, normally operated at inlet pressures up to 25 p.s.i.g. and normally having inlet peak load operation up to 60 p.s.i.g., but such term shall not include any other gas pipe lines which shall be considered "gas transmission pipe lines" (regardless of size, capacity, or operating pressure), which are excluded and not conveyed herein. 2. The following described gas transmission pipe lines of the Company: a) That certain pipe line (consisting of -inch, 6 -inch and 12 -inch pipe) beginning at the South property line of Company's Old Brownsville Road check station (located ad- jacent to and near the northeasterly boundary line of Lexington Blvd.) and thence running southeasterly parallel to Lexington Blvd. to the point of delivery at Company's measurement facilities at the Flour Bluff plant of Humble Oil & Refining Company, and including lateral transmission lines connected thereto and run- ning to Company's measurement and regulator stations at Molina City (Lexington Blvd. at Columbia), Weber Road (Weber Rd. at Golliher Rd.), Woodlawn (Clare Dr. near Lexington Blvd.) and Flour Bluff (Jester Dr. at Stone Dr.), Provided however, there is excluded that certain 4 -inch pipe line running from such Flour Bluff station to Company's Laguna Madre station located on Sinclair Oil and Gas Company Property, which pipe line is not owned by Company. • (b) That certain pipe line (consisting of 10 -inch, 8-inch and 6 -inch pipe beginning at a point of connection with a valve situ- ated at the intersection of such 10 -inch pipe with a 12 -inch pipe line (near the intersection of County Roads 34 and 41) thence running in a westerly direction to terminus of such pipe line near the western boundary of County Road 55, together with all connecting lateral transmission 6 -inch and 4 -inch lines to the points where such lateral lines connect with Company's measure- ment and delivery facilities into such lateral lines. It is understood that Company presently owns and operates a separator station on the A. J. Geistman property (on xozar Road) and it will be necessary that such station be continued to be operated and maintained until such cessation of deliveries of gas into such lateral lines. Accordingly, it is agreed that until such cessation of production, Company shall be responsible for operation and main- tenance of such separator station and shall Pay the surface rental and water disposal fee. (c) That certain pie line (consisting of 6- inch and 4 -inch pipe beginning with 6 -inch pipe at a point of connection with a valve (connecting to an above - ground manifold lo- cated just north of the Texas - Mexican Robstown- Corpus railroad tracks at a point of inter- section with a 12 -inch pipe line of Company running along County Road 43 (also known as Corn Products Road) thence running approxi- mately 7,000 feet in a westerly direction being parallel and north of such railroad tracks to a joinder with another 4 -inch pipe crossing such tracks and Hwy. 44 at right angles, thence to the southerly boundary of Hwy. 44; thence, at right angle, in a westerly direction and parallel to Hwy. 44 for approximately 10,000 feet to the downstream connection with Company's measurement and delivery facilities from Glenn Humphry and Sons gas wells; and there being also included a short 4 -inch lateral to the downstream connection with Company's measurement and delivery facilities from DBK Oil &Gas Company; and there being also in- cluded another 4 -inch pipe line situated on the northerly right -of -way of Texas - Mexican Railway and parallel thereto the terminus of such line. d) That certain pipe line (consisting of -inch and 4 -inch pipe) beginning at the east property line of Company's Savage Lane station site escribed in deed recorded in Vol. 315, p. 46, Nueces County Deed Records) and thence running south along Savage Lane, thence crossing Savage Lane and running in an easterly direction to the terminus of such pipe line on the property of South Texas Cotton Oil plant. -2- (e) That certain 2 -inch pipe line, beginning at a connection on Company's 12 -inch pipe line (running north and south along County Road 41) and extending in a westerly direction for a distance of approximately 2,767 feet to the spur line of Texas- Mexican Railroad Company, on the site of the Wuenche grain elevator. (f) A six inch pipe line, beginning at a 6 -inch block valve (being located immediately downstream of Seller's 6 -inch transmission pipe line deliver- ing gas to Seller's Shell Road Station and being In the right -of -way of Up River Road and east of Cantwell Drive) and thence continuing easterly along and parallel with Up River Road to Path' Lane, thence northerly and parallel with Path Lane to Noakes Street, thence easterly along and parallel with Noakes Street to the terminus of such 6 -inch pipe line near the east property line of Lawrence Drive, and including a six inch pipe line beginning at such terminus and extending northerly and parallel to Lawrence Drive to the southeasterly intersection of Lawrence Drive and Oak Park Avenue and thence continuing along and parallel to Oak Park Avenue to a point of terminus approximately 1,094 feet from the above point of beginning. (g) An eight inch pipe line, beginning at the outlet flange of an 6 -inch pipe line valve located on Seller's 12 -inch transmission pipe line (at Seller's station No. 19 / 59) thence easterly along private easements and Tribble Lane to its intersection with the 6 -inch pipe line described above in (f). 3. All those certain valves, meters, regulators, fittings, cathodic protection facilities and allied equipment, together with any structures or fences housing or enclosing the same, now affixed to and connected with the distribution gas mains and gas transmission pipe lines conveyed to the Buyer under Para- graphs 1 and 2 above; excluding, however, all of Company's gas measurement and delivery facilities connecting Company's transmission pipe line system with such mains and pipe lines conveyed to the Buyer, and those facilities presently measuring and delivering gas from oil and gas leaseholds and processing plants (which will be- come city gate delivery stations). 4. All easements, surface leases, rights -of -way, licenses and permits, owned by the Company and which are assignable, which are used exclusively in the operation of the distribution gas mains and gas transmission pipe lines and equipment listed above and conveyed to the Buyer under Paragraphs 1, 2 and 3 above. -3- 5. That certain tract of land containing 3.335 acres, more or less, located at the street address of 4225 South Port Avenue, In the City of Corpus Christi, Texas and more particularly described in that certain deed dated July 6, 1951, from E. G. Horne and W. A. Horne to Houston Natural Gas Corporation recorded in Vol. 524, P. 585 -589, Deed Records of Nueces County, Texas, to which reference is made for all purposes, subject to street easement dated July 6, 1951, to the City of Corpus Christi, together with all buildings ccnptructed thereon and all fixtures permanently affixed to or in such buildings excluding, however, all telemetering and remote control instruments, gauges and equipment used in connection with Company's dispatching and transmission gas control, Company's radio tower presently installed on said land and radio communication equipment installed at such location, and also excluding all office furniture, fixtures, appliances and equipment, all warehouse and other movable equipment, wherever located and whether or not used in connection with the operation of the properties conveyed to City under the provisions of this contract. 6. All assignable customer contracts of Company with customers in the City of Corpus Christi, served off of the facilities being transferred, without recourse on Company. 7. All of Company's accounts receivable from customers served from the facilities conveyed to Buyer under the provisions of Paragraphs 1, 2 and 3 above, and from all purchasers of appliances in and around the City. All such accounts receivable which are 01) either (1) not over ninety days delinquent, *v (2) from persons who are still being provided gas service either from the facilities conveyed to the Buyer or from the City's gas distribution system, shall be without recourse on Company. All other accounts receivable are with recourse, but Buyer agrees to use due diligence to collect accounts receivable assigned without recourse. SMELOI� -4- EXHI]31T II, to Contract of Sale GAS SALES AGREEMENT OF 1962 THE STATE OF TEXAS I COUMY OF NUECES I THIS AGRFF.MENT, hereinafter sometimes called "the 1962 Contract ", made and entered into by and between HOUSTON NATURAL d and existing under and GAS CORPORATION, a corporation organize by virtue of the laws of the State of Texas, with its principal office in Houston, Harris County, Texas, hereinafter sometimes n Cflyrs i V'IlerP called "Seller", and , Pr�uS P , hereinafter sometimes called "Buyer. W I T N E S S E T H: WHEREAS, the City of Corpus Christi, Texas, herein- after sometimes called "the City ", is the owner and operator of a natural gas distribution system located within and without cer- tain areas of its corporate limits; AREAS, the City and Seller entered into a contract dated November 15, 1960 for the sale by Seller and the purchase by the City of the natural gas requirements of the City's dis- tribution system, said contract as amended by an amendment of February 1, 1961 hereinafter called "the 1961 Contract "; WHEREAS, Seller also is the owner and operator of a natural gas distribution system and certain natural gas trans- mission lines located within the City, and has on November 4, 1962 entered into a Contract of Sale, hereinafter sometimes called the "Contract of Sale," with the City and the Corpus Christi Municipal Gas Corporation to sell said distribution system and some transmission lines to the City or to the Corpus Christi Municipal Gas Corporation all as described in said Contract of Sale; and WHEREAS, an important Part of the consideration for the aforesaid Contract of Sale is the execution and carrying e ent or 19629 hereinafter �.e s Gas Sales Agreem for the s "1962 Contract" Whi.1, provides out by gayer °£ this called the of natural gas for er'8 requirements to gayer by Se sometimes of Buy Seller by Seller to Buyer stem agreed to be sold by the operation °£ the System Of Sale: the mutual ontra °t tion °f under the aforesaid C and in consideration BOO alders NOW, THE and other valuable con covenants herein contained attics hereto agree as follows: the p ACTS, th the Contract LIMiNARY familiar pgfICLR I• PPE under the Contract d Seller are fully Buyer an sold by Seller and a System „System" t° be „ stem mean " t of Sale and the herein to the SY of Sale. All references t o£ Sale • on the date Buyer the COntrac ence describe d in hereunder shall comet Deliveries acquires the System. OF DEI,IVERI'• as sold hereunder ARTICLE II. POINTS for all otnts of delivery valve, flange A. The p Seller's last stream side of went which the down wring eq p shall be at Seller's mess facili- stream from if no measurement or fitting down will install, at the follow - has installed (Or expense$ Seller at its coat and ties are now installed)$ check ens: �s old Br (1) The site of Seller's Road ink locati er NortheasterlY near the station (located adjacent to and d Southwest of ,ar,gton Boulevard an bounds" line of Maus Field), installed measurement and Cliff presently Blaf f plant Of Humble (2) geller's Area facilities at the Flout' delivery Jester Refining Co., Bluff °heck station � Oil & R �s old Flour Seller a 4 -inch pipe_ (3) at the te�inua of Drive ass Company Laguna Drive at Stone D Oil and ping from Sinclair line run ties. y Seller to aratiOn facili Madre seP that gas deliver ed by described pipeline (It is under tbeodhree aboaetransmission Buyer point at will be delivered into points will -2- the order of Buyer into such line Buyer or to ea of gas from a former acne YY livers Heber R receiving Buyer directs. De oa� �ollihar Road at heyetofore gate station anion pipeline have 6l Contract gas from such transmirovisions of the at Such Station been made under the P es delivered under the and that the volumes of gas to the City be deducted shall continue to be 915, Contract and shall provisions of the 19 from the volumss scribed abovee..) delivered at 3 delivery Points d delivery facilities (4) Seller's measurement an described oil presently receiving gas from the following and /or gas wells: (Glenn HwnPhry and Sons oint$) b DBK Oil & (Gas Co. (2 delivery P Q Bevly Pfeiffer d Bevly Janosek e Bevly Fee - (Gallagher f Morgan minerals gevly Rambo g BevlY Blackwell to h hereunder delivered delive points above described (It is understood a deltda( will be delivered into Buyer by Seller from the ed to Buyer under under Paragraphs (2)= (3) convey understood certain transmission P In this regard it is de- time to time at assai$ea the Contract of Sale• as as Seller that Buyer will receive from livery P to Seller's operations at such Points such volumes of g Buyer are necessary but shall not be compute points= and that Seller temperature charts ( seven to, change volume or terra intervals of leoin an se the volumes based thereon) i elines sold days with respect to deliveries at such P transmission P P such as from efficient during Per'O' Of consumption of g )Be of to Buyer should nod oenable Buyer tO sp ointa, requested volumeB er from said delivery P Volumes received l er any such excess veCtian to co then Buyer m such point or points of and eller's gas Seller at any s elines of Buyer and S Stem= such points of connection such transmisa�oeline ay f Count transmission P near the intersectlonI o£ Seller near being located at an above - ground manifold i eline with County 3 and 41, l2 -inch p P at Seller's Brownsville Rid c such the interaec ion of Seller s Road 43, and 3 rah 1) above, deducted er shall be Buyer at station de S of excess volumespby Buy eller to Buy delivers gs delivered by S from the volumeSOinta under this contract.) other delivery P described in (5) Seller's Savage Lane station site deed recorded in Vol. 315, P• 446, Deed Records of Nueces County)• and delivery facili- (6) Seller's existing metering ties at the site of the Wuenche grain elevator and at the Airport (it being understood that both of such Municipal delivery Points are located on a transmission pipeline being conveyed by Seller to Buyer). -3- In addition to the points of delivery specifically described above, gas sold by Seller to Buyer hereunder will be delivered to Buyer at various locations on Seller's transmis- sion pipeline system, at which Seller has installed regulators but no measurement facilities are now installed, including (but not limited to) the following locations: (a) Calallen Tap Station (Sharpsburg Road at 1st St.). (b) Magee Lane Station_ (c) V. D. Davidson. (d) Linn Lane Station (easement west of Linn Street on North side of Highway 9 Shopping Center). (e) Starlight Lane Lan(Starlight Lane and Highway 9 on h (f) Saratoga Station. (g) Other tap stations at which regulators are now installed at Seller's transmission pipeline system but no measurement facilities are in- stalled, serving small volume distribution customers. As to the above described delivery points (a) through (g), it is understood that Seller may, at its option, install measurement facilities at any of such points, but as to any such delivery point at which Seller does not elect to install such measurement facilities, Seller and Buyer shall determine the volume of gas delivered at such point by determining the volume of gas consumed by such customers served with gas delivered at such point to Buyer, plus unaccounted for gas at the rate of 2% of the volume at 14.65 psis. It is further understood by Seller and Buyer that in the event Seller's gas supply (whether from wells, compression station or plant) ceases or is reduced to a volume not deemed by Seller to be economic from any one or more of the delivery points listed above under (2), (3), and (4), then any such de- livery point or points shall cease to be points of delivery under this contract. However, 120 -day written notice by Seller to Buyer shall be required to cancel delivery point #2. After March 1, 1966 Buyer reserves right to discontinue delivery points listed -4- 4 a • under (4) above on one - year's written notice unless wells have been depleted before March 1, 1966. Buyer reserves right to discontinue the purchase of gas and remove Buyer's facilities from: #5 Seller's Savage Lane Station Site #6 Seller's Wuenche Grain Elevator Site and described delivery points of a -g (p. 4) at Buyer's discretion after 30 days' written notice to Seller. B. It is further understood by Seller and Buyer that if Seller is not supplying gas to City after March 1, 1966 for the customers and purposes now being sold under the 1961 Con- tract, Seller shall have the right to terminate the delivery of gas at any of the delivery points listed above and designate new delivery points in lieu thereof at locations where the trans- mission pipeline system then owned by Seller connects to then existing pipeline system then owned by Buyer. ARTICLE III, QUANTITIES Subject to the provisions hereof and commencing with the initial delivery of gas hereunder, Seller agrees to sell and deliver to Buyer and Buyer agrees to purchase from Seller dur- ing the term hereof: (a) All the natural gas requirements of the Buyer for the operation of (i) Areas 1 and 2 of the System (such Areas being defined in Exhibit I to the Contract of Sale) and (ii) all growth and extensions of the System in such Areas 1 and 2, and (b) —�7 Eo_ MCF per day, averaged an- nually, which is the estimated volume that will be required for the operation of that much of the System now existing in Area 3 (such Area being defined in Exhibit I to the Contract of Sale). ARTICLE IV. MEASUREMENT. The parties hereto are fully familiar with the 1961 Contract. Buyer and Seller hereby adopt and make a part hereof -5- Y � all of ARTICLE III of the 1961 Contract applicable to the 1961 Contract after the date which coincides with the date deliveries begin under this 1962 Contract. ARTICLE V. METERING EQUIPMENT QUALITY AND ODORIZATION OF GAS. Buyer and Seller hereby adopt and make a part hereof all of ARTICLES IV, V, and VI of the 1961 Contract. ARTICLE VI. STATEMENTS CONCERNING AMOUNT OF GAS AND SCHEDULE RATES. (1) on or before the tenth (10th) day of each calendar month Seller shall render a statement to Buyer showing the quan- tity of gas delivered to Buyer during the preceding calendar month or billing period, which billing period shall be approxi- mately thirty (30) days, and the amount payable therefor by Buyer. Such statement shall show the number of MCF delivered using the contract pressure base of 14.65 pounds per square inch absolute, and also the number of NO delivered using a pressure base of 15.2 pounds per square inch absolute. (2) For all gas delivered during the preceding calen- dar month or billing period during the term hereof (measured at a pressure base of 14.65 psia), and adjusted for BTU content as herein otherwise provided, Buyer shall pay Seller on or before the twenty -fifth of each calendar month by its check at the of- fice of Seller in Corpus Christi, Texas, based upon the follow- ing schedule of gas prices: Unit Price per MCF From date of first delivery through February 29, 1964 20¢ During the 12 -month period ending February 28, 1965 23¢ During the 12 -month period ending February 28, 1966 24.5¢ The unit prices as stated in the aforesaid unit price schedule are exclusive of and do not include any adjustment re- quired by reason of changes in taxes under the provisions of ARTICLE VII of this document. (3) If on March 1, 1966 Seller is selling natural gas to the City for resale by the City other than from the System, in quantities at least equal to the quantities being sold to 10 Buyer under this 1962 Contract, such other sale being herein- after called "other Sale ", then for so long as such other Sale is made the total price under this 1962 Contract shall be the same as the price under the other Sale. If on March 1, 1966 Seller is not supplying gas to the City under such other Sale, or if on March 1, 1966 Seller is supplying gas to the City under such other Sale but prior to the end of the term of this 1962 Contract it ceases supply- ing gas to the City under the other Sale, then for the remainder of the term of this 1962 Contract while there is no such other Sale, the price under this 1962 Contract shall be the weighted average price for gas of like quality purchased by the City for its entire distribution system (not including the System) provided, however, that the Seller shall have the right to ter- minate this 1962 Contract at any time after March 1, 1966 by giving at least one year's written notice to the Buyer prior to such date of termination (which date of termination may be as early as March 1, 1966) if on the date of termination the Seller is not supplying gas to the City under such other Sale. ARTICLE VII. TAXES. It is understood by the parties hereto that the price fixed herein includes all present taxes of every nature assessed as of June 1, 1960, and entering into the cost of gas of Seller, as well as all present taxes entering into the cost of provid- ing gas service under this agreement, up to the point of de- livery to the Buyer, and in the event there is any change in the amount of such taxes or any new or subsequently applicable taxes allocable to each one thousand (1,000) cubic feet of gas of the quantity, quality, and measurement provided herein, Seller shall make an adjustment in its billing under this agree- ment reflecting the effect of such change in taxes, if any. The word "taxes" as used in this paragraph does not include income, excess profits, ad valorem, franchise, or State of Texas gross -7- receipts taxes, for the reason that the latter shall at all times be wholly the responsibility of Seller. The amount of such taxes for which payment is due hereunder shall be billed by Seller to Buyer each month in like manner as provided in ARTICLE VI hereof for statements concerning amount of gas. If the amount of such taxes for which payment is due hereunder Is not ascertainable as a practical matter until a later period, such billing under this ARTICLE VII shall be made to Buyer as of the earliest billing period next following the calculation of such taxes. ARTICLE VIIT. LIABILITY OF PARTIES AND GOVERNMENT REGULATIONS F Buyer and Seller hereby adopt and make a part hereof ARTICLES IX and X of the 1961 Contract. ARTICLE IX. DEFAULTS AND REMEDIES. Any default in performance hereof by Seller shall en- title Buyer to the payment of monetary damages for all damages or loss, including cost of any outside supply obtained by Buyer to keep its system in operation, which Buyer may actually incur or suffer by reason of or as a result of such default by Seller, and Buyer may also enforce specific performance of this con- tract by Seller. Buyer shall be under no obligation to procure any outside supply of gas or contract for any standby service. Any default by Seller in the performance of its obligations under this contract which results in Sellers failure or in- ability to deliver to Buyer substantially all of the quantities Of gas (of substantially the quality specified) at the times and rates of delivery which Seller is obligated to deliver, shall be deemed a "material default" by Seller, and in addi- tion to all other remedies which it may elect, Buyer may, at its option, terminate this contract by giving written notice to Seller stating specifically the cause or causes for terminating this contract and declaring it to be the intention of Buyer to terminate the same; whereupon, Seller shall have sixty (60) days after the service of such notice in which to remedy or remove the cause or causes stated in the notice for termination -8- of this contract, and if within said period of sixty (60) days Seller does so remove or remedy said cause or causes, and fully Indemnify Buyer for any and all consequences of such material default, then such notice shall be withdrawn and this contract shall continue in full force and effect. In case Seller does not so remedy or remove the cause or causes or does not in- demnify Buyer for any and all consequences of such material default within said period of sixty (60) days, then Buyer may, if it so elects, declare said contract null and void from and after the expiration of said period. Any such cancellation of this contract by Buyer shall be without prejudice to the right of Buyer to collect or withhold any amounts then due it from Seller, but shall not constitute a waiver of any other remedy to which Buyer might be entitled for breach of this contract by•Seller. If Buyer should default in performance of its obli- gations under this contract, Seller may, at its option, termi- nate this contract by giving written notice to Buyer stating specifically the cause or causes for terminating this con- tract and declaring it to be the intention of Seller to termi- nate the same; whereupon, Buyer shall have sixty (60) days after the service of such notice in which to remedy or remove the cause or causes stated in the notice for termination of this contract, and if within said period of sixty (60) days Buyer does so remove or remedy said cause or causes, and fully indemnify Seller for any and all consequences of such breach, then such notice shall be withdrawn and this contract shall continue in full force and effect. In case Buyer does not so remedy or remove the cause or causes or does not indemnify Seller for any and all consequences of such breach within the said period of sixty (60) days, then Seller may, at its option, declare said contract null and void from and after the.expira- tion of said period. Any such cancellation of this contract by Seller shall be without prejudice to the right of Seller to collect or withhold any amounts then due it from Buyer and shall not constitute a waiver of any remedy to which Seller might otherwise be entitled for breach of this Contract by Buyer, including all rights of Seller under the Mortgage and Deed of Trust issued pursuant to the "Contract of Sale," ARTICLE X. TERM. Unless sooner terminated by Seller under ARTICLE IX hereof, this Contract shall be (1) for a period of ten years commencing upon the date of first deliveries hereunder, ii until the last Of the Bonds as defined in the Contract of Sale have been paid, or (iii) until the bonds to be issued in ac- cordance with Paragraph B of Article III of the Contract of Sale have been paid if the Seller designates a closing date for the conveyance of the properties described in Exhibit N to the Contract of Sale on or before ten years from the date Of first deliveries hereunder, whichever of (i), (ii), or (iii) shall last occur, ARTICLE X1• ASSIGNABILITY OF CONTRACT AND �` GIVING OF NOTICE Buyer and Seller hereby adopt and make a part hereof ARTICLES XIII and XIV of the 1961 Contract. ARTICLE XII. MISCELLANEOUS, (1) Any personal property of Seller placed upon real Property owned by Buyer shall remain the property Of Seller Whether or not affixed to the realty of Buyer, (2) This Contract constitutes the entire agreement between the parties and no other representations, memoranda, agreements or other matter, oral or written, prior to the time hereof, shall vary, alter or interpret the terms hereof. The side head captions in this instrument are for the convenience Of the parties in identification of the provisions hereof and shall not constitute a part of the agreement nor be considered Interpretive thereof. In the consideration and interpretation Of this agreement, the following shall apply: (3) This agreement is considered as having been Prepared jointly by the parties hereunder and not by either Party to the exclusion of the other. -10- M (4) Failure to exercise any right hereunder shall not be considered a waiver of such right or rights in the future. (5) Time is of the essence with regard to all obli- gations to be performed on or by a specified date, if anY, herein contained. the parties hereto have caused IN WITNESS WHEREOF, this instrument to be duly executed in duplicate originals this 4L daY of �Lv —° 1962. ATTEST: ATTEST: HOUSTON NATURAL GAS CORPORATION BY SELLER (SCR P °S odrziS7i .f11uN�eiv as. fins Cod f'o�nno-✓ BY BUYER -11- EXHIBIT III TO CONTRACT OF SALE FRANCHISE OPTION PROVISIONS The City, at its option at any time or times prior to the expiration of this franchise, may purchase the gas distribution system of Southern Community Gas Company (or its successors or assigns receiving such franchise), herein called "Grantee," upon the terms and conditions hereinafter set out: • A. PROPERTY The property covered by this option during the time when such option may be exercised shall include the following: (1) All gas mains then owned and used by Grantee in its distribution systems within the City of Corpus Christi, whether within or without areas covered by this franchise. (2) All gas mains then owned and used by Grantee in its distribution systems outside the City of Corpus Christi when such gas mains are directly connected to and dependent for gas supply upon Grantee's gas mains located inside the areas of the City described in (1) above. (3) All gas appurtenances then affixed or connected to the gas mains detailed in (1) and (2) above, including regula- tors, valves, fittings and meters. (4) All easements and rights of way that are then owned by Grantee and which are used exclusively in the operation of the gas mains defined in (1) and (2) above. No value shall be allocated to easements acquired by gift. (5) Such additional items of property as may be mutually agreed upon in writing between the City and Grantee. (6) For all purposes herein "gas mains" are defined to mean, and shall mean, all gas feeder and gas distribution pipe lines that are normally operated by Grantee at inlet pressures up to 25 p.s.i.g, and normally having inlet peak load operation up to 60 p.s.i.g., and being located and found in the areas specified in (1) and (2) above. This definition shall neither be construed to include any of Grantee's gas measurement and delivery facilities then func-- tioning as city gate stations and /or as industrial delivery stations nor be construed to include any gas pipe lines then operated by Grantee as gas transmission lines, industrial gas transport lines, or industrial gas delivery lines. "Industrial" customers as used herein means customers having an annual average consumption of at least 500,000 cubic feet per day. (7) All assignable customer contracts, security de- posits, and accounts receivable of customers located in the areas above described who are then being served by Grantee other than industrial customers. (8) No part of Grantee's industrial gas system or any of its contracts which provide for the sale of gas for in- dustrial purposes shall be included within the terms of this option, it being intended that Grantee shall continue to operate its industrial gas system and to sell gas for industrial purposes within the then city limits under such franchise as may from time to time be granted to Grantee. (9) In the event the City does purchase the prop- erties of the Grantee as described herein, the Grantee shall assign to the City all of the Grantee's rights to use the streets of the City for a natural gas system other than the rights of the Grantee to operate a gas distribution system for the purpose of serving industrial customers and for the transportation of gas for any purpose through the City. B. OPTION PRICE The price to be paid for such property, for purposes of this option, shall be the sum of: (1) The fair and reasonable value of items (1) through (6) above, inclusive, when used for the purpose for which it was intended, determined as of the date of the in- ventory hereinafter mentioned. Due regard shall be given to the physical condition of such property, but no allowance shall be -2- • made for "going concern," "franchise," or good will value; (2) The book cost of all additions and improvements made to such property subsequent to the date of the inventory and prior to the consummation of the purchase; (3) The book value of accounts receivable and security deposits of customers located in the areas covered by this option who are then being served by Grantee. C. PROCEDURES (1) If the City elects to exercise its option to buy such property, the City shall, at some time prior to the expiration of this franchise, give notice to Grantee in writing that the City contemplates the acquisition of such property. (2) Within sixty (60) days from receipt of such notice, Grantee shall submit to the City its determination of the fair and reasonable value of such property, accompanied by a map or maps showing the locations of such properties, together with a. summary inventory of the various items comprising items {1) through (6), inclusive, of such property. (3) In the event no agreement is reached as to the fair and reasonable value of the property within sixty (6o) days after receipt of Grantee's proposal and inventory, or by earlier agreement of the parties, an independent engineering or valuation firm shall be engaged to make an appraisal of such value of the property reported in said inventory. Such independent engineering or valuation firm shall be selected by a majority vote of a committee of five persons, two of whom shall be named by the City and two by the Grantee; the fifth member shall be selected by a majority vote of the other four mem- bers of the committee. Selection of committee members and engage- ment of such engineering or valuation firm shall be completed not later than ninety (90) days after the above mentioned inventory is delivered. The engineers, or valuation firm, in arriving at the value of the inventoried properties, shall be govened by the follow- ing: -3- (A). The fair value of the inventoried properties shall be the then replacement cost, less depreciation. (B). Deprication under (A) shall be computed on a straight line basis at three per cent (3 %) Per annum from beginning of calendar year of in- stallation or acquisition to end of calendar year preceding date of inventory. The City shall not be required to purchase, and the Grantee shall have the right to remove any meters or regulators included in the properties subject to the option which, in the opinion of the independent engineers, or valuation firm, are deemed to be obsolete. The engineering or valuation firm shall make its report to such committee within thirty (30) days after engaged, and upon ap- proval of a majority of the members such appraised value shall be accepted by both theCity and the Grantee as the value of the proper- ties included in said inventory. (4) In the event the appraised value reported to the committee is not approved by a majority of the members, another engineering or valuation firm shall, within thirty (30) days after the first report is received, be selected in the same manner as the first firm and for the same purpose to report within thirty (30) days after engaged. (5) If the second appraised value is not approved by a majority of the committee within fifteen (15) days after reported, then within five (5) days thereafter an average of the two appraised values shall be determined by the committee and reported to the parties as the value of the properties included in said inventory. (6) To the value of the properties reported in the in- ventory furnished to the City, however determined, there shall be added or substracted as the case may be: (a) The book cost of all additions and improvements to such property made subsequent to the date of the inventory and prior to the consummation of the purchase; and -4- (b) All net changes in the book value of the accounts receivable and security deposits of customers located in the areas covered by this option who are then being served by Grantee. (7) The cost of the first appraisal shall be borne by the City; the cost of the second appraisal, if rejected by less than a unanimous vote, shall be borne by the party whose representatives constitute a majority of the members who disapprove of the appraised value. If the second appraisal is rejected unanimously by the City and Grantee's representatives, the cost thereof shall be borne equally by the City and the Grantee. Copies of all valuation and committee reports shall be submitted to all parties. (8) Upon the determination of the value of the properties as of the inventory date, the City Council may call an election and submit to the proper and qualified voters of the City, at such eleo_ tion, the propositions of whether the City should acquire the prop- erty subject to this option and issue bonds sufficient to pay there- for. Such election may be held within ninety (90) days from the date of the determination of the value of the properties as of the inventory date. Promptly after such election, or promptly after the determination of the value of the properties as of the inventory date if the City Council does not call an election, the City shall notify the Grantee as to whether or not it will purchase the prop- erties. In the event the City should decide to purchase the proper- ties, the properties will be conveyed by the Grantee herein to the City and paid for by the City as soon as practicable. (9) In the event that the City does not elect to exercise its option to buy such property within the time and in the manner herein provided, or in the event that such option is exercised and the sale and purchase is not completed by payment of the full pur- chase price within one and one -half years from the giving of notice under Paragraph C hereof, or within any extension of such time by reason of any event extending such period as herein provided, then • such option and all rights of the City to purchase such property and the obligation of the Grantee to sell same shall be of no further force and effect. (10) Failure of the Grantee to timely make and furnish the information provided for in (2) above, or to make the appoint- ment of its committee men as provided for in (3) above, if re- quired, shall constitute a default hereunder. In the event of such default, the City is hereby authorized, at the cost and ex- pense of Grantee, to employ an independent engineering or valuation firm to prepare a correct inventory and appraisal of the value of such property. Such appraised value shall be accepted by both the City and 'the Grantee as the value of such properties. (11) Time is agreed to be of the essence in complying with the procedures outlined herein; however, the time for action by either party shall be extended for such period as (1) it may be restrained by judicial decree, (2) performance is delayed by acts of God or force majeure, or (3) performance is precluded by the presence of a period of time permitting no contract by re- strictions of the City Charter. (12) In the event that the committee provided for under Paragraph (3) above shall fail or refuse to act within the time provided herein, then such Committee shall be subject to dismissal by either party and a new committee shall forthwith be appointed for the same purpose, in the same manner and within the same time limits as are herein provided. The total time authorized for action hereunder shall be extended to compensate for any resulting loss of time. (13) Grantee agrees that the City may assign to the Corpus Christi Municipal Gas Corporation this option to purchase and if it does so the rights and obligations of Grantee and such assignee shall be construed as if the word "City" in this ARTICLE of this ordinance had been the "Corpus Christi Municipal Gas Corporation." 10 EXHIBIT IV TO CONTRACT OF SALE The following described gas transmission pipe lines and facilities (together with all easements, surface leases rights - of -way, licenses and permits, owned by Seller and assignable, which are used exclusively in the operation thereof) of Seller: (i) That portion of Seller's twelve -inch gas trans- mission pipe line beginning at an existing block valve (located approximately 1,330 feet west of the point where such twelve -inch pipe line crosses West Oso Creek), thence running in a northeast- erly direction for a distance of approximately 42,240 feet to Seller's Old Brownsville Road Station site described in (ii) below, together with that certain lateral pipe line (referred to as Seller's London Gin lateral) consisting of approximately 16,138 feet of two -inch pipe line running from an existing block valve on the twelve -inch pipe line above described in a southerly direc- tion and parallel to F. M. Highway 763 to the terminus of such two -inch pipe line near F. M. Highway 43; including all valves, meters, regulators, fittings, cathodic protection facilities and allied equipment affixed to and connected with such twelve -inch and two -inch pipe lines. (ii) Seller's Old Brownsville Road Station (located approximately 330 feet from the northeasterly boundary line of Lexington Blvd., and southeast of and adjoining Old Brownsville Road), wh-h is designated as a delivery point under the 1961 Con- tract and the 1962 Contract, including all meters, regulators and other equipment affixed thereto and installed on the site of such station. (iii) That certain twelve -inch gas transmission pipe line of Seller (consisting of approximately 26,400 feet of twelve - inch pipe) beginning at the Old Brownsville Road Station, described in (ii) above, thence running northwesterly and turning westerly to a point near the intersection of County Roads 34 and 41, thence northerly along and parallel to County Road 41 to a point south .o 0 of the Texas - Mexican Robstown- Corpus railroad tracks, thence westerly parallel to and south of such tracks, thence northerly and crossing such tracks and running along and parallel to County Road 43 to the existing north right -of -way line of State Highway 9, including all valves, meters, regulators, fittings, cathodic pro- tection facilities and allied equipment affixed to and connected with such twelve -inch pipe line. (iv) That certain twelve -inch gas transmission pipe line (consisting of approximately 20,918 feet of twelve -inch and 226 feet of ten -inch pipe)beginning at the Old Brownsville Road Station, described in (ii) above, thence running northerly to Seller's Sa- vage Lane Station site (described in deed recorded in Vol. 315, p. 446, Nueces County Deed Records) thence northerly to a point where said twelve -inch pipe line connects with a ten -inch pipe line, thence continuing northerly with said ten -inch pipe line, thence westerly and thence northerly crossing Shell Road (also known as Up River Road) and terminating at a flange (said flange being connected to a valve on Seller's ten -inch gas transmission pipe line located along and parallel with the north property line of said Shell Road, all of which is excluded herein and not in- cluded),together with Seller's Savage Lane Station and station site, Seller's Airport City Gate Station (presently delivering gas to Cliff Maus Field), and including all valves, meters, regu- lators, fittings, cathodic protection facilities and allied equip- ment affixed to and connected with said stations and such twelve -inch and ten -inch pipe lines included above. (v) That portion of Seller's twelve -inch gas transmis- sion pipe line beginning at the south boundary line of Seller's North Pole Station, thence running southeasterly along and parallel to State Highway 9 and ending at an existing block valve (located at a point where a twelve -inch lateral pipe line runs north to the Suntide Refining Company and presently delivers gas to such company, but no port of said lateral pipe line is included herein), Including all valves, meters, regulators, fittings, cathodic pro- tection facilities and allied equipment affixed to and connected with such portion of said twelve -inch pipe line. -2- • • CORPUS CHRISTI, TEXAS - DAY OF) I TI jq. % TO THE MEMBERS OF THE CITY COUNCIL CORPUS CHRISTI' TEXAS FOR THE REASONS SET FORTH IN THE EMERGENCY CLAUSE OF THE FORE- GOING ORDINANCE, A PUBLIC EMERGENCY AND IMPERATIVE NECESSITY EXIST FOR THE SUSPENSION-OF THE CHARTER RULE OR REQUIREMENT THAT NO ORDINANCE OR RESOLUTION SHALL BE PASSED FINALLY ON THE DATE IT IS INTRODUCEI)p AND THAT SUCH ORDINANCE OR RESOLUTION SHALL BE READ AT THREE MEETINGS OF THE CITY ,COUNCIL$ V, THEREFORE, HEREBY REQUEST THAT YOU SUSPEND SAID CHARTER RULE OR REQUIREMENT AND PASS THIS ORDINANCE FINALLY ON. THE DATE IT IS INTRODUCED OR AT THE PRESENT MEETING OF THE CITY COUNCIL. RESPECTFULLYS MAYOR THE CITY OF CORPUS CHRISTIDTEXAS THE CHARTER RULE WAS SUSPENDED BY THE FOLLOWING VOTES BEN F. MCDONALD ! TOM R. *SWANTNER DR. JAMES L. BARNARD JOSE R. DELEON M. P. MALDONADO W. J. ROBERTS ` JAMES H. YOUNG THE A80VE ORDINANCE WAS PASSED BY THE FOLLOWIN 'VOTES BEN F. MCDONALD TOM R. SWANTNER r° DR. JAMES L. BARNARD. %' JOSE R. DELEON M. P. MALDONADO W. J. ROBERTS r �_ JAMES H. YOUNG f AUTHORIZING AND - DIRECTING THE CITY MANAGER TO EXECUTE AND DELIVER, FOR AND ON BEHALF OF THE CITY OF CORPUS CHRISTI, A CONTRACT OF SALE FOR THE SALE BY HOUSTON NATURAL GAS CORPORATION TO THE' CITY OF CORPUS; CHRISTI OF ITS NATURAL GAS DISTRIBUTION SYSTEM LOCATED WITHIN tt AND PARTLY WITHOUT THE CORPORATE LIMITS OF THE CITY OF CORPUS CHRISTI AND. CERTAIN NATURAL GAS TRANSMISSION LINES FOR THE CONSIDERATION OF $4,622,13.00, WITH SAID PRICE BEING SUBJECT TO CERTAIN ADJUSTMENTS SET FORTH IN SAID CONTRACT, ALL OF THE TERMS OF WHICH CONTRACT ARE SET FORTH THEREIN, A TRUE COPY OF WHICH IS ATTACHED HERETO AND MADE A PART HEREOF; AND DECLARING AN EMERGENCY. M CITY Or TORFU$ CHRIST! tE*^L DEPARTMENT