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Home My WebLink AboutC2011-162 - 5/31/2011 - ApprovedGAS SUPPLY CONTRACT BETWEEN NATIONAL ENERGY & TRADE, LP ( "SELLER ") AND THE CITY OF CORPUS CHRISTI, TEXAS ( "BUYER ") 2011 -162 Res. 029085 05/31/11 National Energy & Trade INDEX Article Page ARTICLE I. DEFINITIONS 1 ARTICLE II. QUANTITY & PRICE 3 ARTICLE III. POINTS OF DELIVERY AND PRESSURE 5 ARTICLE IV. MEASUREMENT 6 ARTICLE V. MEASURING EQUIPMENT AND TESTING PROVISIONS 8 ARTICLE VI. QUALITY 11 ARTICLE VII. INVOICING, PAYMENT, AND AUDIT 13 ARTICLE VIII. TERM 15 ARTICLE IX. FORCE MAJEURE 15 ARTICLE X. DUTY TO MITIGATE 16 ARTICLE XI. GENERAL PROVISIONS 16 ARTICLE XII. SUCCESSORS AND ASSIGNS 17 ARTICLE XIII. WARRANTY OF TITLE 17 ARTICLE XIV. INDEMNITY 18 ARTICLE XV. TRANSFER OF TITLE TO AND POSSESSION OF GAS 19 ARTICLE XVI. LIMITATION OF LIABILITY 20 ARTICLE XVII. REGULATORY BODIES 21 ARTICLE XVIII. CONTRACT-ADMINISTRATOR 21 ARTICLE XIX. INDEPENDENT CONTRACTOR 22 ARTICLE XX. INSURANCE 22 ARTICLE XXI. SUBCONTRACTORS 22 ARTICLE XXII. FISCAL YEAR 23 ARTICLE XXIII. WAIVER 23 HOU:0024394100000:1525374v12 ARTICLE XXIV. COMPLIANCE WITH LAWS 23 ARTICLE XXV. VENUE 23 ARTICLE XXVI. AMENDMENTS 24 ARTICLE XXVII. TERMINATION 24 ARTICLE XXVIII. NOTICE 25 List of Exhibits Exhibit "A" — Exhibit "B" — Exhibit "C" — Exhibit "D" — Points of Delivery and MAOP Distribution System Map Equipment for Buyer's Distribution System Insurance Requirements H 0 U :0024394/00000:1525374v 12 GAS SUPPLY CONTRACT BETWEEN THE CITY OF CORPUS CHRISTI, TEXAS AND NATIONAL ENERGY & TRADE, LP GAS SUPPLY CONTRACT NO. THIS CONTRACT is entered into by and between NATIONAL ENERGY & TRADE, LP, a Texas Limited Partnership, hereinafter referred to as "Seller," and the CITY OF CORPUS CHRISTI, TEXAS, a municipality, hereinafter referred to as "Buyer." ARTICLE I. DEFINITIONS Except as otherwise specified, the following terms as used in this Contract shall be construed to have the following scopes and meanings: 1. Day means the period from nine o'clock (9:00) a.m. CST to the next nine o'clock (9:00) a.m. CST. 2. Month means a period of one (1) calendar month commencing at nine o'clock (9:00) a.m. local time on the first day of any calendar month and ending at nine o'clock (9:00) a.m. local time on the first day of the next succeeding calendar month. 3. Year means a period of three hundred sixty -five (365) consecutive days provided, however, that any such period which contains the date of February 29 shall consist of three hundred sixty -six (366) consecutive days. 4. Psia means pounds per square inch, absolute. 5. Gas means natural gas that meets the quality standards described in Article VI, "Quality." 6. Cubic Foot of Gas means the volume of dry gas contained in one (1) cubic foot of space at a standard pressure base of fourteen and seventy -three Page 1 of 26 H O U :0024394100000:1525374v 12 hundredths (14.73) psia and a standard temperature base of sixty (60) degrees Fahrenheit, hereinafter referred to as "F." 7. MCF means one thousand (1,000) cubic feet. 8. British Thermal Unit or BTU means one (1) the measurement unit of the quantity of heat required to raise the temperature of one (1) avoirdupois pound of pure water from fifty -nine and five- tenths (59.5) degrees F to sixty and five - tenths (60.5) degrees F at a constant pressure of fourteen and seventy -three hundredths (14.73) psia. 9. MMBTU means one million (1,000,000) BTUs. 10. Gross Heating Value means the number of BTUs produced by the complete combustion at constant pressure of one cubic foot of gas saturated with water vapor, at a constant pressure of fourteen and seventy -three hundredths (14.73) psia and under standard gravitational force (acceleration 32.175 feet per second per second) with air of the same temperature and pressure as the gas, when the products of combustion are cooled to the initial temperature of the gas and air and when the water formed by such combustion is condensed to the liquid state. The Gross Heating Value of gas delivered under this Contract shall be corrected from the conditions of testing to those of the actual conditions, expressed in BTU per cubic foot and reported at a pressure base of fourteen and seventy -three hundredths (14.73) psia; however, if the gas as delivered contains seven (7) pounds of water or less per one million (1,000,000) cubic feet, such gas shall be deemed to be dry. Page 2 of 26 H 0 U :0024394/00000:1525374v 12 11. MAOP means the maximum allowable operating pressure of the City's system as shown in Exhibit "A." 12. Mineral interest gas means that royalty share of gas owned by Buyer from wells producing, or will in the future produce, on City of Corpus Christi property or on non -City property of which Buyer has a legal right to take in kind, and which Buyer, in its sole discretion, receives directly into Buyer's distribution system. 13. Effective Date means the first day of July, 2011. 14. Points of Delivery means the delivery points described on Exhibit "A" and as shown on the map in Exhibit "B." ARTICLE II. QUANTITY & PRICE 1. Subject to the terms and conditions of this Contract, commencing on the Effective Date and continuing throughout the term of this Contract, Seller agrees to deliver and sell and Buyer agrees to accept and purchase one hundred (100) percent of Buyer's total daily gas requirement for resale within the operation of Buyer's distribution system, which is attached and incorporated in this Contract as detailed on Exhibits "A," and "B," as such distribution system exists and may be reduced, enlarged, or extended from time to time; provided, however, that Buyer's requirements, include the following exceptions: A. As Buyer, the City retains the right to accept "mineral interest gas" or royalty gas, from production facilities producing natural gas on City properties from wells in which the City owns a mineral interest or royalty. 2. The Contract price of gas delivered into Buyer's gas distribution system for the full Contract term shall be the Houston Ship Channel /Daily Midpoint price as published in Page 3 of 26 H O U :0024394100000:1525374v 12 Platts "Gas Daily" report in the table titled "Daily Price Survey ($ /MMBTU)," referred to in this Contract as the "HSC Index" plus $0.40/MMBtu. The price under the Contract shall be adjusted accordingly effective as of the first day of July 2011, and each day thereafter during the term of the Contract. 3. If at any time the HSC Index should cease to be published or otherwise becomes unavailable or not calculable, Buyer and Seller shall meet as soon as practicable after the HSC Index is no longer available, but not to exceed three (3) calendar days, to determine and agree upon a comparable "Substitute Index." The Substitute Index shall be implemented retroactively as of the first day on which the HSC Index became unavailable. 4. Buyer and Seller agree to consider alternative pricing options, and the pricing method may be changed by mutual agreement, as evidenced by a written amendment executed by both parties to this Contract. 5. In addition to the Price per MMBTU paid by Buyer to Seller under this Contract as described in Article II, Paragraph 2, Buyer also agrees to pay Seller an additional reservation fee of $0.0275 per MMBTU based on a capacity reservation of 60,000 MMBTU per day (or $1,650 per day) for the 60 month term of the Contract. 6. It is understood by the parties that the reservation fee described in the immediately preceding paragraph will serve to reimburse Seller for all of the following costs incurred by Seller in the performance of this Contract: (a) All costs associated with the reservation fee component of firm transportation charges that Seller will have to pay to pipeline transporters Page 4 of 26 H 0 U :0024394/00000:1525374v 12 in connection with Seller's shipment of gas sold and delivered to Buyer under the terms of this Contract. (b) Seller's operating and maintenance expenses, pipeline integrity management expenses, and general administrative expenses, including, scheduling, system balancing, accounting, engineering and project management expenses relating to Seller's performance of its duties and obligations owed to Buyer under this Contract. (c) Seller's building and installing the facilities to be added as described on Exhibit "C." 7. Seller agrees to pay $50,000 (fifty thousand dollars) to Buyer at the end of each Contract year for the benefit of Buyer's Heat Help assistance program. ARTICLE III. POINTS OF DELIVERY AND PRESSURE 1. The Points of Delivery for all gas to be sold and purchased under this Contract shall be at the outlet of Seller's (or Seller's designee's) existing metering and pressure regulating facilities identified in Exhibit "A," which is attached to and made a part of this Contract and which may be amended from time to time as Points of Delivery are added or deleted. 2. The gas delivered under Points of Delivery (Exhibit "A ") of this Contract shall be measured through facilities which will be maintained by Seller (or Seller's designee) with the exception of Farm Taps. 3. The gas delivered under this Contract by Seller (or Seller's designee) to Buyer shall be delivered at the pressure described as normal operating pressure not to exceed the MAOP in Exhibit "A" at the Points of Delivery. Page 5 of 26 H 0 U :0024394100000:1525374 12 ARTICLE IV. MEASUREMENT The measurement provisions for Points of Delivery shall be as follows: a. Unit of Volume -- The unit of volume for measurement of gas sold and purchased shall be one (1) cubic foot of gas as provided by Sections 91.051 through 91.062 of the Texas Natural Resources Code. b. Basis -- All measurement facilities under this Contract shall be operated under the standards approved by the American National Standards Institute of June 28, 1977 and prescribed in the Gas Measurement Committee of the American Gas Association, referred to in this Contract as AGA, Report Number 3 /American Petroleum Institute Manual of Petroleum Measurement Standards, Chapter 14.3 (AGA Report No. 31AP1 14.3), as it is now and from time to time may be revised, amended, or supplemented. Where measurement is by other than orifice meters, determination of the necessary factors for proper volume shall be as mutually agreed in writing by the parties. c. Atmospheric pressure -- The atmospheric pressure applicable at all points of delivery shall be determined in accordance with AGA Report No. 31AP1 14.3 as it is now and from time to time may be revised, amended or supplemented. d. Ideal Gas Laws -- Measurement under this Contract shall be corrected for deviation from Ideal Gas Laws, and corrections shall be determined in accordance with AGA Report No. 3 /API 14.3 as it is now and from time to time may be revised, amended or supplemented. Page 6 of 26 H O U : 0024394100000:1525374v 12 e. Where a displacement meter is used, the square of the orifice meter super compressibility factor shall be applied, except as may otherwise be agreed in writing by the parties. f. Determination of Flowing Temperature -- The temperature of gas flowing through the measuring facilities under this Contract shall be determined by means of the continuous use of a recording thermometer or by such other method as the parties hereto may agree in writing. The arithmetic average temperature of the gas recorded each day, during periods of flow only, shall be used in computing the quantity of gas delivered for that day. g. Determination of Specific Gravity -- The specific gravity of gas flowing through the measuring facilities under this Contract shall be determined by use of a continuously recording gravitometer. The arithmetic average specific gravity recorded each day, during periods of flow only, shall be used in computing the gas volume for that day. In the event a recording gravitometer is not installed, the specific gravity of the gas under this Contract shall be determined at approximately 30 -day intervals or at such other intervals as may be mutually agreed upon in writing by the parties hereto, by means which are approved by the AGA as set forth in its Gas Measurement Manual or by fractional analysis by the use of a spot or continuous sample taken at the Point of Delivery. h. Fractional analysis will be on a real gas basis in accordance with ANSI /ASTM D3588 -79, as it is now and from time to time may be revised, amended or supplemented. Specific gravities so determined will be used in calculating gas Page 7 of 26 HOU:0024394100000:1525374v12 volumes under this Contract for the month in which the test is made and all succeeding months until that month in which a new sample is taken. i. Determination of Gross Heating Value -- The Gross Heating Value of the gas shall be determined by means of a recording calorimeter, employing the Thomas principle of calorimetry, proportional to flow continuous sample, or such other method mutually agreed upon in writing by the parties hereto. The arithmetic average of the hourly Gross Heating Value recorded each day, during periods of flow only, shall be considered as the heat content of the gas during such day. If a recording calorimeter is not available, the Gross Heating Value shall be determined at 30 -day intervals or at such other intervals as may be mutually agreed upon in writing by the parties hereto, by the use of spot or continuous samples taken at the Points of Delivery. Gross Heating Value of a sample is to be obtained either by calorimeter or chromatographic analysis using values of physical constants for the gas compounds, and the procedure for determining the Gross Heating Value of the gas shall be on a real gas basis in accordance with ANSI /ASTM D3588 -79, as it is now and from time to time may be revised, amended, or supplemented. The Gross Heating Value of gas so determined shall be considered for all purposes to be the Gross Heating Value of the gas for the month in which the sample is taken and all succeeding months until that month in which a new sample is taken. ARTICLE V. MEASURING EQUIPMENT AND TESTING PROVISIONS 1. The measuring equipment and testing provisions for Points of Delivery shall be as follows: Page 8 of 26 H O U : 0024394/00000:1525374v 12 a. Access -- The parties hereto shall at all reasonable times have access to the premises of each other insofar as such premises are connected with any matter or thing covered hereby, for inspection, operation, installation, removal, repair and testing of equipment, but the operation of measuring equipment and changing of charts shall be done only by the employees or agents of the owner of such equipment. b. Testing and Repair of Equipment -- Seiler (or Seller's designee) and Buyer shall keep their respective measuring equipment, pressure regulators and overpressure protective equipment, including calorimeters and chromatographs, accurate and in repair. Monthly tests will be required on measuring equipment. Buyer and Seller (or Seller's designee) agree to provide each other sufficient advance notice of the time of such tests so that Buyer or Seller (or Seller's designee) may conveniently have its representative present. In the event measuring equipment is found to be inaccurate, it will be adjusted to register accurately. In the event either party or Seller's designee desires a special test of any measuring equipment, the parties shall cooperate to secure prompt verification of the accuracy of such equipment. If upon any test, the percentage of inaccuracy of the measuring equipment is found to be in excess of one (1) percent, registrations thereof shall be corrected for a period extending back to the time such inaccuracy occurred if such time is ascertainable, and if not ascertainable, then back one -half (1/2) of the time elapsed since the last date of calibration not to exceed fifteen (15) days. Page 9 of 26 H 0 U :0024394/00000:1525374v 12 c. Correction for Inaccurate Measurement -- If for any reason any measuring equipment is out of service or out of repair so that the quantity of gas delivered through such equipment cannot be ascertained or computed from the readings thereof, the quantity of gas so delivered during the period such equipment is out of service or out of repair shall be estimated and agreed upon by the parties hereto based upon the best available data, using the first of the following methods which is feasible: (1) By using the registration of any check measuring equipment registering accurately; (2) By correcting the error if the percentage of error is ascertainable by calibration, test or mathematical calculation; or (3) By estimating the quantity of gas delivered under this Contract based on quantities delivered during preceding periods under similar conditions when the respective measuring equipment was registering accurately. d. Inspection of Charts and Records -- The charts and records from the measuring equipment shall remain the property of the owner thereof and same shall be retained for a period of not less than five (5) years. At any time within such period, upon request, each party or Seller's designee will submit records and charts from the measuring equipment, together with calculations therefrom, for inspection and verification by the other party or Seller's designee. Such records and charts shall be returned to the party providing same within thirty (30) days after receipt. Seller shall as soon as operationally possible following execution of this Contract, not to exceed six months, make available to Buyer Page 10 of 26 H O U : 0024394100000:1525374v 12 daily chromatograph and moisture detector information at Seller's Bear Lane, Old Brownsville Road and Sedwick Road meter stations by making available connections to Seller's chromatograph and moisture detector equipment; all costs of connection to Seller's equipment shall be for Buyer's account. e. Installation of Check Meters — Buyer may, at its option, install a check meter for checking the metering equipment at the Points of Delivery; same shall be so installed as not to interfere with the operation of metering facilities of Seller or Seller's designee. 2. Seller must provide filters, chromatographs and moisture detectors for the Corpus Christi System and the Annaville /Calallen System, specifically located at the Bear Lane, Old Brownsville Road and Sedwick Road meter stations, as described more fully on Exhibit "C," as may be updated from time to time by Seller with the advance written consent of Buyer, such consent not to be unreasonably withheld, to account for conditions present at the installation site. Said equipment will be operated and maintained in good working order by Seller until the end of the Contract term, and the equipment will be removed by Seller, without damage to Buyer's distribution system, at the end of the Contract term unless otherwise agreed to in writing by the parties. ARTICLE VI. QUALITY 1. The quality provisions for Points of Delivery shall conform to the following specifications: a. Oxygen -- The oxygen content must not exceed one (1) percent by volume. Page 11 of 26 H 0 U : 0024394/00000:1525374v 12 b. Hydrogen Sulfide /Mercaptan — Neither the hydrogen sulfide nor the mercaptan content shall exceed one -half (1/2) grain per one hundred (100) cubic feet. c. Sulfur -- The total sulfur content must not exceed twenty (20) grains per one hundred (100) cubic feet. d. Nitrogen -- The nitrogen content must not exceed two (2) percent by volume. e. Carbon Dioxide -- The carbon dioxide content must not exceed three (3) percent by volume. f. Liquids -- The gas shall be free of water and hydrocarbons in liquid form at the temperature and pressure at which the gas is delivered and shall have been dehydrated prior to being delivered by any method other than the use of calcium chloride as a desiccant for removal of water present therein in a vapor state and shall in no event contain water vapor in excess of seven (7) pounds per one million (1,000,000) cubic feet. Seller shall be responsible for collection and disposal of any liquids that may accumulate. g. Dust, Gums, and Solid Matter -- The gas shall be commercially free of dust, gums, and other solid matter. h. Gross Heating Value -- The gas delivered shall have a Gross Heating Value of not less than one thousand (1,000) BTUs per cubic foot. i. Temperature -- The gas shall have a temperature of not less than forty (40) degrees F and not more than one hundred twenty (120) degrees F. 2. Any gas delivered by Seller to Buyer under this Contract which is accepted by Buyer without protest within five (5) days of delivery, shall be deemed to have met all of the Page 12 of 26 H O U :0024394/00000:1525374v 12 quality specifications under the Contract. If at any time gas tendered under this Contract fails to conform to any of the quality specifications set forth above, Buyer shall notify Seller and Buyer may, at its sole option, and in addition to pursuing any other legal or equitable remedies available, refuse to accept delivery of future gas volumes pending correction of the deficiencies by Seller. If Seller has not corrected any failure to meet quality specifications within fifteen (15) days after receiving notice from Buyer of such failure, then Buyer has the right to terminate this Contract after said fifteen (15) day period and Seller shall be obligated to pay Buyer for any reasonable direct damages incurred by the Buyer resulting from Seller's failure to comply with the Contract's quality specifications. 3. Buyer will not accept delivery of gas under this Contract at a Gross Heating Value of Tess than one thousand (1,000) BTU per cubic foot. 4. Seller agrees that the gas delivered to Buyer during the term of this Contract may not contain any odorant which is not first approved in writing by Buyer. After the odorant to be used is approved by Buyer, it may not be changed by Seller without the written consent of Buyer. Such consent may not be withheld unreasonably. As of February, 2011, the Buyer is using the odorant RP- Captan -V or Sentinal 20. The use of this odorant, or its equivalent, by Seller is approved by Buyer. ARTICLE VII. INVOICING, PAYMENT, AND AUDIT 1. Invoice -- On or before the fifteenth (15th) day of each month, Seller shall send to Buyer at 4225 South Port Avenue, Corpus Christi, Texas 78415 -5311, an invoice Page 13 of 26 H O U :0024394100000:1525374 12 reflecting the quantity of gas delivered to and purchased by Buyer during the preceding month. 2. Payment -- Ten (10) days after receipt of invoice, but not later than the twenty -fifth (25th) day of each month, Buyer shall pay to Seller the amount due pursuant to this Contract for deliveries during the preceding calendar month as set forth on Seller's invoice. The remittance address for Seller shall be the address set forth on Seller's invoice. If Buyer in good faith disagrees with the amount of any invoice, Buyer shall notify Seller of such disagreement so that it may be resolved before the date for payment of such invoice. If Buyer fails to give such notice of disagreement, or if Buyer and Seller do not resolve such disagreement before the due date, the amount of the invoice not in dispute shall be paid by Buyer on the due date. Such payment shall be subject to adjustment without penalties upon final resolution of the disagreement. 3. Adjustment of Errors -- In the event an error is discovered in any invoice or payment hereunder, such error shall be adjusted within ninety (90) days of the determination thereof. No claim for adjustment shall be made more than two (2) years from the date of such invoice or payment. 4. Audit -- Each party hereto shall have, at its expense, the right at all reasonable times to examine the books and records of the other party pertaining to the performance of this Contract to the extent necessary to verify the accuracy of any invoice, charge, computation, or demand made under or pursuant to this Contract. Each party agrees to keep records and books of account in accordance with generally accepted accounting principles and practices in the industry. Any invoice shall be final as to both parties unless questioned within two (2) years after payment of such invoice. Page 14 of 26 H O U : 0024394100000:1525374v 12 ARTICLE VIII. TERM Subject to the provisions of this Contract, this Contract shall be effective and continue in full force from 9:00 a.m., CST, on July 1, 2011 until 9:00 a.m., CST, on July 1, 2016. ARTICLE IX. FORCE MAJEURE 1. , Definition of Force Majeure -- The term "Force Majeure" shall mean acts of God, strikes, lockouts, or other industrial disturbances, acts of public enemy, sabotage, wars, blockades, insurrections, riots, epidemics, landslides, lightning, earthquakes, fires, storms, floods, high water, washouts, or other natural disasters, threat of physical harm or damage resulting in the evacuation or shutdown of facilities necessary for the production, delivery, receipt or storage of Gas, arrests and restraints of governments and people, civil disturbances, explosions, breakage or accident to machinery or lines of pipe, the necessity for testing or for making repairs or alterations to machinery or lines of pipe, partial or entire failure of wells, processing, storage or transportation facilities, or gasification and Gas manufacturing facilities, the orders of any court, regulatory body or government authority or agency having jurisdiction, or the refusal or withdrawal of any necessary order, certificate or permit by any court, regulatory body or governmental authority or agency having jurisdiction, operational flow orders or implementation of system management plans or any other acts or omissions (including failure to take or deliver Gas) of a transporter of Gas for either Buyer or Seller not caused by any acts or omissions of Buyer or Seller, and any other causes, whether of the kind herein enumerated or otherwise, not within the control of the party claiming suspension and which by the exercise of due diligence such party is unable to prevent or overcome. Page 15 of 26 H O U : 0024394/00000:1525374v 12 Nothing contained herein, however, shall be construed to require either party to settle a strike against its will. 2. Effect of Force Majeure - -• In the event either Seller or Buyer is rendered unable by force majeure to itself or a necessary third party to wholly or in part carry out its obligations under the provisions of this Contract, it is agreed that the party so affected shall give notice within seventy -two (72) hours to the other party, and the obligations of the party affected by such force majeure, other than the obligation to make payments hereunder, shall be suspended during the continuance of any inability so caused but for no longer period, and such cause shall be remedied with all reasonable efforts. ARTICLE X. DUTY TO MITIGATE Each party agrees that it has a duty to mitigate damages under this Contract and covenants that it will use all commercially reasonable efforts to minimize any damages it may incur as a result of the other party's performance or non- performance of this Contract. ARTICLE XI. GENERAL PROVISIONS To the extent permitted by Texas law, the prevailing party to this Contract in any litigation involving this Contract shall be entitled to recover, in addition to any other relief obtained, the costs and expenses, including reasonable attorney's fees and expenses, incurred by such prevailing party in connection with such litigation. The court shall determine who the prevailing party is, if any. This Contract is for the sole benefit of the parties hereto and their respective successors and permitted assigns, and shall not inure to the benefit of any other person or entity whomsoever, it being the intention of Page 16 of 26 H 0 U:0024394/00000:1525374v12 the parties hereto that no third person shall be deemed a third party beneficiary of this Contract or otherwise have any rights hereunder. ARTICLE XII. SUCCESSORS AND ASSIGNS No assignment of this Contract nor any of the rights or obligations under this Contract, whether by purchase, merger, consolidation, or otherwise, shall be made unless there first shall have been obtained the written consent to the assignment of the non - assigning party. Such consent may not be withheld unreasonably. Seller or Buyer may pledge or assign its respective right, title, and interest in, to and under this Contract to a trustee or trustees, individual or corporate, as security for bonds or other obligations or securities without the necessity of such trustee(s) becoming in any respect obligated to perform the obligations of the assignor under this Contract. ARTICLE XIII. WARRANTY OF TITLE Seller warrants that it has good and merchantable title to all gas delivered under this Contract and agrees to indemnify Buyer against all suits, actions, debts, accounts, damages and losses arising from or out of adverse claims by any and all persons to said gas or to royalties or to any charges against said gas. THE FOREGOING WARRANTIES ARE EXCLUSIVE AND ARE IN LIEU OF ALL OTHER WARRANTIES WHETHER WRITTEN, ORAL, IMPLIED OR STATUTORY. EXCEPT AS SPECIFICALLY PROVIDED HEREIN, SELLER HEREBY DISCLAIMS ALL WARRANTIES OF ANY KIND, INCLUDING, WITHOUT LIMITATION, ANY WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. Page 17 of 26 HOU :0024394/00000:1525374x12 ARTICLE XIV. INDEMNITY 1. TO THE EXTENT ALLOWED BY TEXAS LAW, SELLER, ITS OFFICERS, MEMBERS, PARTNERS, EMPLOYEES, AGENTS, AND LICENSEES (FOR THE PURPOSES OF THIS ARTICLE CALLED "SELLER ") HEREBY FULLY INDEMNIFIES, SAVES AND HOLDS HARMLESS THE CITY OF CORPUS CHRISTI, ITS OFFICERS, EMPLOYEES, AGENTS, LICENSEES, AND INVITEES ( "CITY GROUP ") AGAINST ANY AND ALL LIABILITY, DAMAGE, LOSS ,CLAIMS, DEMANDS, AND ACTIONS OF ANY NATURE WHATSOEVER ( "CLAIMS ") FOR PERSONAL INJURY (INCLUDING WORKERS' COMPENSATION AND DEATH CLAIMS) OR PROPERTY LOSS OR DAMAGE OF ANY KIND WHATSOEVER, WHICH ARISE OUT OF OR ARE IN ANY MANNER CONNECTED WITH, OR ARE CLAIMED TO ARISE OUT OF OR BE IN ANY MANNER CONNECTED WITH, SELLER'S INTENTIONAL OR NEGLIGENT ACTS IN ITS RESPECTIVE CONTROL WITH REGARD TO THE DELIVERY OF GAS BY SELLER. SELLER MUST, AT ITS OWN EXPENSE, INVESTIGATE ALL SUCH CLAIMS, ATTEND TO THEIR SETTLEMENT OR OTHER DISPOSITION, DEFEND ALL ACTIONS BASED THEREON WITH COUNSEL Page 18 of 26 H O U :0024394100000:1525374v 12 SATISFACTORY TO CITY GROUP, AND PAY ALL CHARGES FOR ATTORNEYS AND ALL OTHER COSTS AND EXPENSES OF ANY KIND ARISING FROM ANY OF SAID CLAIMS. 2. TO THE EXTENT ALLOWED BY TEXAS LAW, BUYER HEREBY FULLY INDEMNIFIES, SAVES AND HOLDS HARMLESS SELLER, ITS OFFICERS, EMPLOYEES, AGENTS, LICENSEES, AND INVITEES ( "SELLER GROUP ") AGAINST ANY AND ALL CLAIMS, FOR PERSONAL INJURY (INCLUDING WORKERS' COMPENSATION AND DEATH CLAIMS) OR PROPERTY LOSS OR DAMAGE OF ANY KIND WHATSOEVER, WHICH ARISE OUT OF OR ARE IN ANY MANNER CONNECTED WITH, OR ARE CLAIMED TO ARISE OUT OF OR BE IN ANY MANNER CONNECTED WITH, BUYER'S INTENTIONAL OR NEGLIGENT ACTS IN ITS RESPECTIVE CONTROL WITH REGARD TO THE RECEIPT OF GAS BY BUYER. BUYER MUST, AT ITS OWN EXPENSE, INVESTIGATE ALL SUCH CLAIMS, ATTEND TO THEIR SETTLEMENT OR OTHER DISPOSITION, DEFEND ALL ACTIONS BASED THEREON WITH COUNSEL SATISFACTORY TO SELLER, AND PAY ALL CHARGES FOR ATTORNEYS AND ALL OTHER COSTS AND EXPENSES OF ANY KIND ARISING FROM ANY OF SAID CLAIMS. ARTICLE XV. TRANSFER OF TITLE TO AND POSSESSION OF GAS Page 19 of 26 H O U:0024394/00000:1525374v 12 1. As between Buyer and Seller, Seller shall be deemed in control and possession of the gas sold and purchased under this Contract and responsible for any damage or injury caused thereby until the same shall have been delivered to Buyer at the Points of Delivery in accordance with terms of this Contract. 2. As between Buyer and Seller, Buyer shall be in control and possession of the gas sold and purchased under this Contract and responsible for any damage or injury caused thereby after the same shall have been delivered to Buyer at the Points of Delivery in accordance with terms of this Contract. ARTICLE XVI, LIMITATION OF LIABILITY THE PARTIES CONFIRM THAT THE EXPRESS REMEDIES AND MEASURE OF DAMAGES PROVIDED IN THIS AGREEMENT SATISFY THE ESSENTIAL PURPOSES HEREOF. FOR BREACH OF ANY PROVISION FOR WHICH AN EXPRESS REMEDY OR MEASURE OF DAMAGES IS PROVIDED, SUCH EXPRESS REMEDY OR MEASURE OF DAMAGES SHALL BE THE SOLE AND EXCLUSIVE REMEDY, THE OBLIGOR'S LIABILITY SHALL BE LIMITED AS SET FORTH IN SUCH PROVISION AND ALL OTHER REMEDIES OR DAMAGES AT LAW OR IN EQUITY ARE WAIVED. IF NO REMEDY OR MEASURE OF DAMAGES IS EXPRESSLY HEREIN PROVIDED, THE OBLIGOR'S LIABILITY SHALL BE LIMITED TO DIRECT ACTUAL DAMAGES ONLY, SUCH DIRECT ACTUAL DAMAGES SHALL BE THE SOLE AND EXCLUSIVE REMEDY AND ALL OTHER REMEDIES OR DAMAGES AT LAW OR IN EQUITY ARE WAIVED. UNLESS OTHERWISE EXPRESSLY PROVIDED HEREIN, IN NO EVENT, WHETHER AS A RESULT OF BREACH OF CONTRACT, WARRANTY, TORT (INCLUDING NEGLIGENCE), STRICT LIABILITY OR Page 20 of 26 H O U :0024394/00000:1525374v 12 OTHERWISE, SHALL EITHER PARTY BE LIABLE TO THE OTHER PARTY FOR LOSS OF PROFIT OR REVENUES, OR FOR ANY SPECIAL, CONSEQUENTIAL, INCIDENTAL, INDIRECT, PUNITIVE OR EXEMPLARY DAMAGES. ARTICLE XVII. REGULATORY BODIES 1. This Contract is subject to all valid orders, rules and regulations of any State, federal or other regulatory body having jurisdiction over the purchase, sale or use of the gas sold, and the parties agree to comply with such orders, rules, and regulations. Should either of the parties, by law or regulation, be ordered or required to do any act inconsistent with the provisions of this Contract, this Contract shall be deemed to be modified to conform with such law or regulation. 2. Each of the parties understands that, should the Texas Railroad Commission, or other governmental regulatory body, require approval for the sale and purchase of gas under this Contract, then, each of the parties will make any necessary applications or filings and will submit any records or data to the regulatory body so that requisite regulatory authorization may be granted. ARTICLE XVIII. CONTRACT ADMINISTRATOR The Contract Administrator designated by the City is responsible for approval of all phases of performance and operations under this Contract including deductions for non - performance and authorizations for payment. All of Seller's notices or communications regarding this Contract must be directed to Deborah A. Marroquin, P.E., Director of Gas Operations, Contract Administrator. Page 21 of 26 H O U :0024394/00000:1525374 12 ARTICLE XIX. INDEPENDENT CONTRACTOR Seller will perform the services hereunder as an independent contractor and will furnish services in its own manner and method, and under no circumstances or conditions may any agent, servant, or employee of Seller be considered as an employee of the City. ARTICLE XX. INSURANCE 1. Insurance requirements are attached to and incorporated into this Contract as Exhibit "D," and may be revised annually by the Contract Administrator upon 30 days written notice to Seller. 2. Before activities can begin under this Contract, Seller's insurance company must deliver a Certificate of Insurance as proof of the required insurance coverages to the Contract Administrator. 3. Additionally, the Certificate must state that the City will be given at least 30 days notice by certified mail of cancellation, material change in the coverages, or intent not to renew any of the policies. 4. The City must be named as an additional insured in each policy. The City Attorney must be given copies of all insurance policies within 15 days of the Contract Administrator's written request to Seller. ARTICLE XXI. SUBCONTRACTORS Seller may use subcontractors and affiliates of Seller in connection with the work performed under this Contract. When using subcontractors, however, Seller must obtain prior written approval from the Contract Administrator. In using subcontractors Page 22 of 26 H 0 U : 0024394/00000:1525374v 12 and affiliates, Seller is responsible for all their acts and omissions to the same extent as if the subcontractor or affiliate and its respective employees were employees of Seller. All requirements set forth as part of this Contract are applicable to all subcontractors, affiliates, and their respective employees to the same extent as if the Seller and its employees had performed the services. ARTICLE XXII. FISCAL YEAR All parties recognize that the continuation of any Contract after the close of any fiscal year of the City, which fiscal year ends on July 31 annually, is subject to appropriations and budget approval providing for such Contract item as an expenditure in that budget. The City does not represent that the budget item will be actually adopted, that determination being within the sole discretion of the City Council at the time of adoption of each budget. ARTICLE XXIII. WAIVER No waiver of any breach of any term or condition of this Contract waives any subsequent breach of this Contract. ARTICLE XXIV. COMPLIANCE WITH LAWS This Contract is subject to all applicable federal and State laws. All duties of the parties will be performed in Nueces County, Texas. The applicable law for any legal disputes arising out of this Contract is the law of the State of Texas. ARTICLE XXV. VENUE Page 23 of 26 H 0 U:0024394100000:1525374v 12 The venue for any disputes under this Contract is the appropriate district, county, or justice court in and for Nueces County, Texas. ARTICLE XXVI. AMENDMENTS This Contract may be amended only by written agreement signed by duly authorized representatives of both parties to this Contract. Notwithstanding the foregoing, the Contract Administrator is authorized to, with mutual agreement with Seller, modify or change the necessary equipment and appurtenances required to be installed, as shown on Exhibit "C." Such modification or change must be documented in writing, dated, and mutually agreed to by signature of the Contract Administrator and Seller. ARTICLE XXVII. TERMINATION 1. Either party (or the Contract Administrator) may terminate this Contract for the other party's failure to perform such party's respective obligations under this Contract. Failure to keep all insurance policies in force for the entire term of this Contract is grounds for termination. 2. The terminating party must give the other party twenty (20) business days written notice of the breach and set out a reasonable opportunity to cure. 3. If the breaching party has not cured within the cure period, the other party may terminate this Contract immediately after the cure period. 4. Notwithstanding any other provision of this Contract, if Buyer fails to pay Seller any amounts due under the Contract on a timely basis, Seller shall have the right to (a) suspend performance under the Contract until such delinquent amounts plus accrued interest calculated at a rate equal to the lower of (1) the then- effective prime rate of Page 24 of 26 H 0 U :0024394100000:1525374v 12 interest published under "Money Rates" by The Wall Street Journal, plus two percent per annum; or (ii) the maximum applicable lawful interest rate, have been paid or (b) exercise any remedy available at law or in equity to enforce payment of such amount plus interest, provided, however, that if Buyer, in good faith, disputes the amount of any such billing or part thereof and pays such amounts as it concedes to be correct, no suspension shall be permitted. ARTICLE XXVIII. NOTICE Notice must be given by email, fax, hand delivery, or certified mail, postage prepaid, and is deemed received on the day faxed or hand delivered or on the third day after deposit if sent certified mail. Notice shall be sent as follows: If to Buyer: City of Corpus Christi Attn: Deborah A. Marroquin, P.E. Director of Gas Operations 4225 S. Port Avenue P.O. Box 9277 Corpus Christi, TX 78469 -9277 Telephone: (361) 885 -6924 Facsimile: (361)885 -6970 Email: debbiem @cctexas.com Page 25 of 26 H O U: 0 024 39410 00 0 0 :1525374 v 12 If to Seller: National Energy & Trade, LP Attn: Joe Gutierrez 5847 San Felipe St. Suite 1910 Houston, Texas 77057 Telephone: (713) 800 -1946 Facsimile: (713) 871 -0510 Email: jmgutierrez @net- Ip.com AGREED TO BY: BUYER: CITY OF CORPUS CHRISTI cuivu e. =Li Ronald L. Olson City Manager Date: �' c r t Attest: Armando Chapa City Secretary Approved as to form: ThisP day of Carlos Valdez City Attorney By: /J�ik & or .1 za► h Hundl= Assi- = nt City Attorney Attachments: Exhibit "A" - Exhibit "B" - Exhibit "C" - Exhibit "D" - SELLER: NATIONAL ENERGY & TRADE, LP Joe ier VP NET G ner 1 Partners, LLC Date: OS-PV �l Points of Delivery and MAOP Distribution System Map Equipment for Buyer's System Insurance Requirements Page 26 of 26 H 0 U:0024394/00000:1525374v 12 , 2011 SAU. THORIZEI COUNCIL ...12,. .thi,_ SECRETARY NNNNFaFaFa W NYOt2COV I.. CANT Fa F+ 4a. Pa W Fa NF+O Fa Fa {A 00 V cnLnabW NJ Fa NOTE: Other delivery points can be considered. 1 MONTE DEAL- 8801 Hwy 665 HAYNIE GLASGOW - 8527 Hwy 665 RICHARD BAGNALL - Box 435 B, Hwy JACK DEAL - 9106 Hwy 665 J.D. WHITMIRE - 8250 Hwy 665 JOHN BALDWIN 8525 Hwy 665 ROLAND CANALES - Box 438B Hwy 665 FARM TAPS BURLESON/RINCON STATION WEST NAVIGATION STATION NORTH BEACH SYSTEM 1PADRE ISLAND SYSTEM PADRE ISLAND SYSTEM 1 RHEW AND LEOPARD STATION LEOPARD STREET /CLARKWOOD STATION ITULOSO STATION McKENZIE STATION ANNAVILLE /CALALLEN SYSTEM 1CLARKWOOD RD/ CO RD 36 STATION —� NAVIGATION STATION OLD BROWNSVILLE RD /WEST POINT STATION FLOUR BLUFF DRIVE /GRAHAM ROAD STATION BEAR LANE STATION OLD BROWNSVILLE RD /SARATOGA STATION J KOSAR STATION SHELL ROAD STATION BUSH STATION CORPUS CHRISTI SYSTEM LOCATIONS V V V V .I V V Fa O O Fa O O 140 N cn u 70 ( OL V 145 " A Ln I.. A Ln Fa .P Ln Fa A vi " A to 1.1 A In N A In " A to NORMAL OPERATING PRESSURE (J. Ln 35 35 35 35 35 150 150 F in O 200 Fa 000 O FaN 0 O FyNF"I- t,,cncntritoultotoui 0 0 0 0 Ni- 0 .F.. 0 0 FiI" 0 0 MAXIMUM OPERATING PRESSURE I CnCncnO n MEEK 0000 W r r)� r ,, N ,, 20 MCF /MO 20 MCF /MO 20 MCF /MO 0 n = 60 MCF /HR 150 MCF /DAY 200 MCF /HR 200 MCF /HR 150 MCF /HR 200 MCF /HR j 1350 MCF /HR 1350 MCF /HR 1350 MCF /HR w Ln 0 E T z Pa 1350 MCF /HR 1350 MCF/HR w Ln 0 E T z Pa 1350 MCF/HR 1350 MCF/HR MAXIMUM ANTICIPATED FLOW RATE ►" POINTS OF 1 lOn Enterprise Pipeline system on Old Brownsville Road west of Cup lOn Enterprise Pipeline system on Old Brownsville Road west of Cup On Enterprise Pipeline system on Old Brownsville Road west of Cup On Enterprise Pipeline system on Old Brownsville Road west of Cup On Enterprise Pipeline system on Old Brownsville Road west of Cup On Enterprise Pipeline system on Old Brownsville Road west of Cu' On Enterprise Pipeline system on Old Brownsville Road west of Cup Possible Delivery Point Location. Possible Delivery Point Location. Existing Southcross Pipeline Delivery Point. City owned easement, Existing City of Corpus Christi Delivery Point, City Right of Way Possible Alternate Delivery Point Location. Possible Alternate Delivery Point Location. Possible Alternate Delivery Point Location. Possible Alternate Delivery Point Location. Possible Alternate Delivery Point Location. Possible Alternate Delivery Point Location. Possible Alternate Delivery Point Location. Existing Southshore Pipeline Delivery Point. Existing Southshore Pipeline Delivery Point. Possible Alternate Delivery Point Location. Possible Alternate Delivery Point Location. Possible Alternate Delivery Point Location. REMARKS: See Exhibit "B ", Map of Possible Delivery Points ilatian and measurement facilities. mauwavmm LL Ll Ll L.L. L1 Ll 11 11), • CORPUS CHRISTI RAY — Peemivav — Law ketttre Regufaitr 1 Wirt I Purctiloa Pal* Fran Tap 1 c. 4' ) (4- : .; i:1 ,-.-,..--,,,,,V-. i' 'L--, 44 '..--.„ 4,4 ,. -, — --"--,,, ...v„,,,7) ):',:' , 41:.:- i:4 M-I-... WV,TO ..._,__1 1) Li. 1 „.._„4I "' ---sL. ,7 .. OA . 10A 0 '., e o1 i ''ll. 1c— ., 1 4rZ•to - n la, \ f L '12,,, • • ; 5—tA,,,,...,:: .' "14 Fa' :C)itr- "'(',,,1 e 1 IP ■ ' ,,,- ., VI, "'i-r - a-.1---e:. -.:1..1---,- /1-1' , ., I 1 ri. ),, 0.VI:,,,,-'. „„.1_, ri`7".. • ,i 61 ,80-"I-L. ----mot Fla ,•„„.. .,_ 1,,N10 r: - ,,P'',--."‘-5;■ .; ---•'' - '''':'N„ Alc .,,........, , . 1 ,77.1 _,,,<:-------.-- r --- I Le (A \I 1 • / 1..,,,::,„ it.N\ ., 11 1 1 1. Pal FATAAI 1 \ t ' •,, ,/-'--- ---' A Cgt''t' ,...1 1 1: , S r .1: 4...? 1 EXHIBIT "B" ) PROPOSED DELIVERY POINTS City of Corpus Christi Gas Dapartrnan Exhibit "B" 16 N(JE HAI '‘'.0111#C.PS RI VER ? "".. \ 11 \\12 '\ 7 tea 2 feD oto 6,.ad rhm Exhibit C Filters, Chromatographs and Moisture Detectors for Buyer's System Below is a list of the equipment to be installed by Seller's affiliate, South Shore Pipeline: ASME Section VIII Division I Vertical Two Phase Filter Separators 42" ID x 10' -0" S/S vessel. .375" wall thickness, SA- 516 -70 Steel. 275# MAWP. Capacity - 30 mmscfd. 8" inlet gas nozzle 8" gas outlet nozzle 3" nozzle for liquid outlet 3" nozzle for crash dump liquid outlet. Internal of each vessel includes: 10 micron Cartridge Filters Inlet Diverter Vortex Breaker. Exterior of each vessel includes: liquid level control crash dump liquid level control relief valve drain gauge class crash dump gauge glass Exhibit "C" Page1 of 5 H 0 U :0024394/00000:1525374v 12 temperature indicator pressure indicator Accessories include: Kimray SMAPO dump Valve Kimray back pressure valve 2" Norriseal level controller 2" 275# relief valve 67 type filter regulator 'A" x /" S/S tubing fittings '/" S/S tubing "/" 0 -1500# pressure gage with ISO valve and ell 0 -250F thermometer with thermowell steel gage cocks sight glasses painted with a primer and alkyd enamel topcoat. Condensate Tanks: 85 gallon capacity 12 ga. Carbon steel. 24" diameter Containment. The tanks include 1" fitting for condensate inlet, 3" fitting for a flame arrestor, 2" fitting for a dip stick/pipe cap, Exhibit "C" Page 2 of 5 H O U : 0024394/00000:1525374v 12 1" drain fitting. Includes a 4' -7" x 3' -4" base. The tanks will be painted with off shore marine paint. Moisture Monitor: Meeco Model F3000 -02 Accupoint 2 10cc, 0 -5000 ppmV, (10 ppmV LDL), 50 -3000 psig, Microprocessor based moisture transmitter with display, includes ppmV, ppmW, Ibs /mmscf, C and F degrees dew point, indication. Stainless steel wetted components, Buret kit and manual. Cell Type Sour Part # T6046 Intrinsic safety barrier w/ mounting rail. Part # OP01463 -- Plate mounted sample system (max inlet pressure of 2000 psig) Gas Chromatograph: ABB Model 82xx Gas Chromatograph Model Number 8206A- 83A- 75A- 65A -95A -1 CJ-72B-73BBK-74BBF-AP00-46A-46C-46E- 46G- 2GI- 3FU- 10A- 17BP- 2DR- 52J- 55F- 56D- 57C -61 B-62A-64B-66A- 6900- 80A -91A- 92A -115A 8206 - Model designation, NGC 8206 83A - NGA TYPE BASE Exhibit "C" Page 3 of 5 H O U :0024394/00000:1525374v 12 75A - None (2 train) A - C /US certified to install in Class 1, Div 1 area. 1CJ - Nomenclature Unit Drawing, NGC8200 Class 1, DIV 1, Groups C,D C /US,12V. 72B - Carrier selection, Helium. 73BBK - Train BBK. C6 +. C3. 1C4. NC4. Neo -05. IC5. NC5. 74BBF - Train BBF. C3 +. N2. C1. CO2. C2 =. C2, AP00 - Optional Software Applications — none. 2GI - Flash Application Set, without tubes, NGC82xx, STD pick. 3FU - Config File, NGC8206. 17BP - Termination Board Kit, with USB Client, with USB Host, with Ethernet, 2DR - Enclosure assembly, NGC 8200, RFI /EM1. 52J - Cable, USB 16 foot. 55F - External PCCU Mounting Option, USB local with flameproof housing (Includes part number 2102438 -001). 56D - Digital controller electronics and display completed assembly (NGC8206). 57C - Analytical Module without GC Module 12 VDC, No metrology, DBPV. 61B - Feed Thru, with preheat, 12V. 62A - Standard Factory Documentation/Testing. 64B - SD Card, 128 MB (NGC). 80A - Manual, startup guide for NGC8200 (English Translation). Cal Blend, standard pick small bottle, for Start-Up (Btu/NGC). Regulator, calibration gas, low pressure, with relief valve, without reed switch (NGC). Regulator, carrier gas, high pressure, with relief valve, without reed switch. Gas, carrier, small bottle, UHP Helium 99.999 %, CGA 580 (NGC /BTU). Mounting Kit, for sample system three modules (NGC). Exhibit "C" Page 4 of 5 H O U : 0024394100000:1525374v 12 Sample conditioning system, single stream, 400 cc /minute with liquid removal with liquid drain with liquid shut off (NGC)Uses A +Model 38M Filter. Membrane replacment kit is ABB Part No. 1801947 -001. Model ENC82L Environmental Enclosure. 1AT - NGC CWE with Catalytic Heater, Now comes with Filter Drain Kit as part of option. 4B - Environmental Enclosure, support leg kit (ENC82L). 8B - Environmental Enclosure, 2 bottle rack kit (ENC82L). 9A — Pallet with shrink wrap, standard Pick. Solar Power Supply kit, 12 volt, 2/50 watt panels, 2/100 AH batteries (Btu 8000). Tubing Cutter, terry tool for 1/16 inch (NGC /Btu 8000). Tubing, 1/16 inch stainless steel (sold by foot) (NGC/Btu 8000). Tubing, 1/8 inch stainless steel (sold by foot) (NGC/Btu 8000). Analytical Module Assembly,12 volt, w /DBPV,Trains BBK -BBF, No Metrology, Standard Pick (complete assembly with manifold and analytical processor). Board, power /termination (NGC). Cable, termination panel to digital controller board. Cable, analytical processor to termination panel. Filter, frit. Gasket, feed -thru interface. 0 ring, feed thru to case, 1.989 inch ID, .070 inch width, neoprene. Tool, ball driver, 5/16 inch, 5.6 inches long, blade. Battery, lithium. Board, digital controller with display, completed assembly & tested. Exhibit "C" Page 5 of 5 H 0 U :0024394/00000:1525374v 12 Exhibit "D" INSURANCE REQUIREMENTS CONTRACTOR'S LIABILITY INSURANCE A. Contractor must not commence work under this agreement until all insurance required herein has been obtained and such insurance has been approved by the City. The Contractor must not allow any subcontractor to commence work until all similar insurance required of the subcontractor has been so obtained. B. Contractor must furnish to the City's Risk Manager, two (2) copies of Certificates of Insurance, showing the following minimum coverage by insurance company(s) acceptable to the City's Risk Manager. The City must be named as an additional insured for the General liability policy. A blanket waiver of subrogation is required on all applicable policies. TYPE OF INSURANCE MINIMUM INSURANCE COVERAGE 30 -Day Notice of Cancellation, non - renewal, material change or termination required on all certificates Bodily Injury and Property Damage Per occurrence - aggregate Commercial General Liability including: 1, Commercial Broad Form 2. Premises — Operations 3. Explosion and Collapse Hazard 4. underground Hazard 5. Products/ Completed Operations Hazard 6, Contractual Liability 7. Independent Contractors 8. Failure to Supply $5,000,000 COMBINED SINGLE LIMIT AUTOMOBILE LIABILITY to include 1. Owned vehicles 2. Hired & Non -owned vehicles $500,000 COMBINED SINGLE LIMIT WORKERS' COMPENSATION EMPLOYERS' LIABILITY WHICH COMPLIES WITH THE TEXAS WORKERS' COMPENSATION ACT AND PARAGRAPH II OF THIS EXHIBIT $500,000/ $500,000/ $500,000 C. In the event of accidents of any kind, the Contractor must furnish the Risk Manager with copies of all reports of any accidents within ten (10) days of any accident. II, ADDITIONAL REQUIREMENTS A. Contractor must obtain workers' compensation coverage through a licensed insurance company in accordance with Texas law. The contract for coverage must be written on a policy and endorsements approved by the Texas Department of Insurance. The coverage provided must be in amounts sufficient to assure that all workers' compensation obligations incurred will be promptly met. B. Contractor's financial integrity is of interest to the City; therefore, subject to Contractors right to maintain reasonable deductibles in such amounts as are approved by the City, Contractor shall obtain and maintain in full force and effect for the duration of this Contract, and any extension hereof, at Contractor's sole expense, insurance coverage written on an occurrence basis, by companies authorized and admitted to do business in the State of Texas and with an A.M. Best's rating of no less than A- Vi I. C. The City shall be entitled, upon request and without expense, to receive copies of the policies, declarations page and all endorsements thereto as they apply to the limits required by the City, and may require the deletion, revision, or modification of particular policy terms, conditions, limitations or exclusions (except where policy provisions are established by law or regulation binding upon either of the parties hereto or the underwriter of any such policies). Contractor shall be required to comply with any such requests and shall submit a copy of the replacement certificate of insurance to City at the address provided below within 10 days of the requested change. Contractor shall pay any costs incurred resulting from said changes. All notices under this Article shall be given to City at the following address: City of Corpus Christi Attn: Risk Management P.O. Box 9277 Corpus Christi, TX 78469 -9277 (361) 826 -4555- Fax # D. Contractor agrees that with respect to the above required insurance, all insurance policies are to contain or be endorsed to contain the following required provisions: • Name the City and its officers, officials, employees, volunteers, and elected representatives as additional insured by endorsement, as respects operations and activities of, or on behalf of, the named insured performed under contract with the City, with the exception of the workers' compensation and professional liability polices; • Provide for an endorsement that the "other insurance" clause shall not apply to the City of Corpus Christi where the City is an additional insured shown on the policy; • Workers' compensation and employers' liability policies will provide a waiver of subrogation in favor of the City; and • Provide thirty (30) calendar days advance written notice directly to City of any suspension, cancellation, non - renewal or material change in coverage, and not less than ten (10) calendar days advance written notice for nonpayment of premium. E. Within five (5) calendar days of a suspension, cancellation, or non - renewal of coverage, Contractor shall provide a replacement Certificate of Insurance and applicable endorsements to City. City shall have the option to suspend Contractor's performance should there be a lapse in coverage at any time during this contract. Failure to provide and to maintain the required insurance shall constitute a material breach of this contract. F. In addition to any other remedies the City may have upon Contractor's failure to provide and maintain any insurance or policy endorsements to the extent and within the time herein required, the City shall have the right to order Contractor to stop work hereunder, and /or withhold any payment(s) which become due to Contractor hereunder until Contractor demonstrates compliance with the requirements hereof, G. Nothing herein contained shall be construed as limiting in any way the extent to which Contractor may be held responsible for payments of damages to persons or property resulting from Contractor's or its subcontractor's performance of the work covered under this agreement. H. It is agreed that Contractor's insurance shall be deemed primary and non - contributory with respect to any insurance or self insurance carried by the City of Corpus Christi for liability arising out of operations under this contract. it is understood and agreed that the insurance required is in addition to and separate from any other obligation contained in this contract. 2011 Gas Dept — Natural Gas Supplier RFP ins. req. 3 -8 -11 ep Risk Mgmt,