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HomeMy WebLinkAboutPR 15338: AGREEMENT WITH PREMCOR REFINING GROUP FOR INSTALLATION OF WATERLINEiriterof f ice MEMORANDUM To: Mayor, City Council, and City Manager From: Mark Sokolow, City Attorney ~~ Sr'~~~~ Date: August 7, 2009 Subject: P. R. No. 15338; Council Meeting August 11, 2009 P. R. No. 15338 pertains to an agreement that we have negotiated with PREMCOR REFINING GROUP as to install a new watE~r line. The license agreement is from October 1, 2009 until SeptE~mber 30, 2108. The license fee is $18,400 plus $306 per day in excess of 60 days that the City is actively excavating, backf:illing, drilling, installing and/or removing the water line on the licensed property. Arceneaux and Gates needs to update the plans; to include all appurtenances, valves and markers that will be on the surface. Mr. Arceneaux plans to give the contractor 2_`i0 days. Nevertheless, only a portion of that time will be involvE~d in work that impacts the Valero property. Copy to: Arceneaux & Gates Director of Public Works z.pr15338_memo P. R. No. 15338 08/7/09 mts updated RESOLIITION NO. A RESOLUTION APPROVING AN AGREEMENT BETWEEN THE CITY OF PORT ARTHUR AND PREMCOR REFINING GROUP FOR THE INSTALLATION OF A WATER LINE WHEREAS, the City deems it in the public's interest to extend the waterline towards Sabine Pass; and WHEREAS, the City Council deems it in the public's interest to ente~° into an Agreement with Premcor Refining Group. NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF PORT ARTHUR: Section 1. That the facts and opinions in the preamble are true and correct . Section 2. That the City Manager is herein authorized to execute an agreement with Premcor Refining Group, in substantially the :game forms as attached hereto as Exhibit "A" and Exhibit "B" Section 3. That a copy of the caption of this Resolution be spread upon the Minutes of the City Council. READ, ADOPTED AND APPROVED on this day of A.D., 2009, at a Meeting of the City Council of the City of Port Arthur, by the following vote: AYES: Mayor Counccilmembers z.pr15338 ' NOE~> MAYOR ATTE:iT CITY SECRETARY APPROVE/D AS TO FORM: CITY ATTORNEY APPROVED FOR ADMINISTRATION: CITY MANAGER APPROVED A3 TO THE AVAILABILITY OF FIINDS ~ ~ ~` C`1 --.~--- DIRECTOR OF FI CE I ~~ ~~ z.pr15338 EXHIBIT "A" z.pr15338 WATER LINE LICENSE AGREEMENT This Water Line License Agreement (the "Agreement"), is made and entered into effective as of the 1" day of October, 2009 (the "Effective Date"), by and between THE PREMCOR REFINING GROUP INC., a Delaware corporation ("Licensor"), whose address is One Valero Way, San Antonio, Texas 78249-1616; Attn: Property Assets; and CITY OF PORT ARTHUR, a Texas municipal corporation ("Licensee"), whose address is 444 Fourth Street, Port Arthur, Texas 77641. 1. Grant of License: Licensed Area. Licensor grants to Licensee, and Licensee accepts from Licensor, anon-exclusive license to use and occupy the following parcel of land, upon the terms and condlitions set forth in this Agreement (the "License"), during the Term (as defined in Section 3), solely for the Permitted Use (as defined in Section 2): A twenty-four (24") inch wide piece of land located in Jefferson County, Texas, along the route depicted on the alignment drawings 12 through 51, prepared by Arceneaux & Gates for The City of Port Arthur S.H. 87 South Water System Improvement Project, which are attached hereto as Exhibit A (the "Licensed Area"). The Licensed Area is generally located upon real property commonly known as Licensor's "Valero Port Arthur Refinery", which is located at 1801 South Gulfway Drive, Port Arthur, Jefferson County, Texas 7764'0 ("Licensor's Property"). The License is granted subject to all outstanding superior rights (including those in favor of other licensee's and lessees of Licensor's Property) and the right of Licensor to renew and extend the same, and is made without covenant of title or for quiet enjoyment. 2. Permitted Use. Licensee may use the Licensed Area solely to install, construct, own, operate, maintain, test, inspect, repair, replace, and remove one (1) twenty inch (20") nominal diameter PVC and/or HDPE pipeline, over, on, under and across the Licensed Area (the "Water Line"), which shall be used solely for the transportation of potable water and for no other business or purpose without the prior written consent of Licensor (the "Permitted Use"). Licensor reserves the right to use the surface of the Licensed Area for any and all purposes that do not conflict with the Permitted Use. This License does not grant Licensee the right to additional working space during initial construction and/or any subsequent maintenance, testing, inspection, repair, or replacement of the Water Line, subject to the provisions of Section 6(d) of this Agreement, which describes the conditions under which Licensee's contractors will have access to the Property as necessary in connection with any work to be done on the Water Line. 3. Term. The term of this Agreement and the License granted hereunder (the "Term") shall begun on October 1, 2009 (the "Commencement Date") and shall end on September 30, 2108 (the "Expiration Date"). Notwithstanding anything to the contrary contained herein, if: (a) Licensee ceases to use the Licensed Area for the Permitted Use for more than 365 consecutive days, or (b) Licensee fails to cure the breach of any other material term of this agreement or obligation to be performed by Licensee hereunder within 30 days after written notice thereof from Licensor, then Licensor may terminate this Agreement by delivering written notice to Licensee at any time thereafter (a "Termination Notice"), the date of which notice shall be the date on which the termination of this Agreement will occur (the "Termination Date"). 4. License Fee. On or prior to the Commencement Date, Licensee shall deliver to Licensee, in immediately available funds, the sum of $18,400.00, as the "Base License Fee" due to Licensor under this .Agreement, and notwithstanding anything to the contrary contained herein, the License granted in this Agreement shall not be effective unless and until the Base License Fee is received by Licensor. Each day during which there is active excavation, backfilling, drilling, installation and/or removal of the Water Water Line License Agreement Premcor/City of Port Arthur - SH 87 South Water System Improvement Project Line within the Licensed Area is referred to herein as a "Construction Day". If there are more than 60 Construction Days (the "Anticipated Construction Days"), then within 30 days after the last Construction Day; Licensee shall deliver to Licensor, in immediately available funds, an amount equal to the following (the "Additional License Fee"): the actual number of Construction Days, minus the Anticipated Construction Days, multiplied by $306.00. Licensor may, but is not required to send Licensee a written invoice for the Additional License Fee, and regardless of whether or not Licensor invoices Licensee, the Addiitional License fee shall be due and payable as and when specified in this Section 4. As used herein, the term "License Fee" means the Base License Fee, plus the Additional License Fee. 5. Condition of Licensed Area; License Granted "AS IS". This License is granted to Licensee on a "AS IS", "WHERE IS" and "WITH ALL FAULTS" basis, without any representations or warranties of Licensor of any kind or nature whatsoever (including, without limitation, any representations regarding title), whether express, implied, constitutional or otherwise. Construction. Maintenance and Operation of Water Line. a. Construction of Water Line. Licensee agrees to construct the Water Line at a minimum of four (4) feet below the surface of natural ground. In addition, where the Water Line crosses any existing pipelines on the Property, Licensee agrees to construct and maintain the Water Line with a minimum clearance of twenty-four (24) inches or such other distance as Licensor may reasonably designate below or above any such existing pipelines, utilities or casing enclosing the same. Except as shown on the plans attached hereto as Exhibit A, Licensee agrees not to install any vents, pipeline markers, valves, fittings, meters, or other appurtenances above ground on the Licensed Area without Licensor's prior written consent. Licensee agrees to perform all its installation, repair, maintenance, removal, replacement and other operations with respect to the Water Line with due regard for the possibility of other nearby above and below- ground pipelines, utilities, equipment and appurtenances. Further, Licensee does and shall fully release Licensor from any liability arising from any damage to the Water Line caused by the activities of third parties, and Licensee agrees and acknowledges that it has the right only to pursue any such third parties directly. Licensee will furnish Licensor with "As-Built" drawings of the Water Line and all other facilities installed by or on behalf of Licensee within one hundred (120) days after the installation of the Water Line. b. Legal Compliance and Safety. Licensee agrees to design, construct, inspect, test, operate, and maintain the Water Line in accordance with all applicable safety rules and regulations published by all local, state and federal regulatory agencies having jurisdiction over any portion of the Water Line. If no such government safety rules apply, then Licensee shall adhere to all applicable industry standards and jurisdictions. Licensee further agrees to use the Licensed Area in a safe, careful, and proper manner, and to comply, at Licensee's expense, with all laws, rules, and regulations applicable to Licensee's use. Whenever upon or about the Licensed Area or Licensor's Property, Licensee shall adhere to and shall cause its employees, contractors, subcontractors, invitees, agents, and permitted assigns and sub-licensees to adhere to Licensor's policies and rules, as they may be promulgated from time to time, regarding access to the Licensed Area and the Property, safety, smoking, possession of weapons, possession or being under the influence of alcohol or regulated/prohibited substances, harassment, housekeeping, and such other topics as Licensor may reasonably desire to regulate. Copies of Licensor's current policies and rules will be available, upon request. c. Costs Related to License; Mechanics' and Material Suppliers' Liens. Licensee agrees that it will bear the entire cost and expense incurred in connection with the construction, maintenance, repair and renewal, and any and all modifications, removals or replacements of the Water Line License Agreement Premcor/City of Port Arthur - SH 87 South Water System Improvement Project Water Line, and shall not permit or suffer any mechanic's or materialman's lien of any kind or nature to attach to or be enforced against to the Licensed Area and/or any other portion of Licensor's Property for any work done or materials furnished thereon at the instance or request or on behalf of the Licensee. Licensee's contractor shall indemnify and hold harmless the Licensor against and from any and all liens, claims, demands, costs and expenses of whatsoever nature in any way connected with or growing out of such work done, labor performed, or materials furnished, as per the contractor's right of entry agreement. d. Entry By Licensee's Contractor; Exclusion. Licensee's contractors shall not be entitled to enter Licensor's Property for any purpose unless and until they have each signed and delivered to Licensor: (i) a written access agreement, in substantially the form attached hereto as Exhibit B (the "Contractor Access Agreement"); and (ii) evidence of insurance coverage as required by the Contractor Access Agreement. Furthermore, and notwithstanding anything to the contrary contained herein, Licensor may exclude any of Licensee's employees, agents, contractors, subcontractors, invitees, or other representatives from Licensor's Property and/or the Licensed Area who, in Licensor's reasonable opinion, pose a risk of injury to any person or damage to any property or the environment. Licensor shall provide Licensee with notice if any of Licensee's employees, agents, contractors, subcontractors, invitees, or other representatives are so excluded. 7. End of Term. Prior to the end of the Term or any earlier Termination Date, Licensee shall: (a) formally abandon the Water Line in place in accordance with all applicable laws, regulations and iindustry standards, as well as any safety requirements determined by Licensor at that time, (b) repair all damage occasioned thereby, and (c) restore, vacate, and surrender the Licensed Area in the same condition it was in on the Commencement Date. If Licensee fails to do the foregoing within 10 days after written notice from Licensor, Licensor may, but is not obligated to, do such work on behalf of and at the sole cost and expense of Licensee, and Licensee agrees to reimburse Licensor for all costs incurred in connection therewith within 30 days after receiving Licensor's written invoice therefor (with reasonable supporting documentation). Furthermore, the Water Line or any other improvements or personal property are still remaining on the Licensed Area as of the Expiration Date or any earlier Termination Date, they shall immediately become the property of Licensor without any additional consideration being due to Licensee, and Licensor shall have the right to dispose of any such improvements and/or personal property as Licensor desires in its sole and absolute discretion. 8. Insurance. Licensee shall maintain during the Term, at its sole cost, the following insurance coverage (collectively, the "Required Insurance Policies"): (a) Commercial General Liability Insurance. (b) Business Automobile Liability Insurance covering all vehicles owned, leased, hired, rented, or borrowed by, or otherwise used in the operations of, Licensee. (c) Workers' Compensation Insurance as required by applicable laws and regulations. The Required Insurance Policies shall: (i) contain an endorsement providing for the indemnification of contractual obligations hereunder (the "Indemnification Endorsement") in favor of: "Valero Energy CorFroration, its direct and indirect subsidiaries and affiliates, and their respective employees, officers, direr'tors, agents, and representatives" (the "Valero Parties"); (ii) be issued by the Texas Municipal League Intergovernmental Risk Pool or an insurance carrier that has an A.M. Best Company rating of A or above on the date the policy is issued, except as otherwise expressly consented to in writing by Licensor; (iii) include a provision stating that the policy may not be cancelled or materially altered Water Line License Agreement Premcor/City of Port Arthur - SH 87 South Water System Improvement Project without at least thirty (30) days' prior written notice to Licensor; (iv) be primary with respect to the insurance maintained by the Valero Parties; (v) be written on an occurrence form; (vi) not contain any provision or endorsement denying coverage for losses caused by the acts or omissions of subcontractors; and (vii) provide a waiver of subrogation in favor of the Valero Parties where permissible by applicable law. The Required Insurance Policies shall be evidenced by Certificate(s) of Insurance and the Indemnification Endorsement delivered to Licensor prior to Commencement Date, and thereafter during the "Germ as each Required Insurance Policy is renewed, or at any other time during the Term as reasonably requested by Licensor. Failure of Licensee to comply with this Section at any time during the Terns shall constitute a material breach of this Agreement, which is subject to Licensor's right to terminate this Agreement as further provided in Section 3 hereof. LICENSEE IS A PUBLIC ENTITY ORGANIZED UNDER TEXAS LAW AND MAY BE IMMUNE FROM TORT LIABILITY, EXCEPT WHERE SUCH LIABILITY HAS BEEN PARTIALLY WAIVED BY STATUTE. IN CONNECTION THEREWITH, TO THE FULLEST EXTENT PROVIDED BY LAW, LICENSEE HEREBY EXPRESSLY WAIVES ANY IMMUNITY FROM LIABILITY AND/OR IMMUNITY FROM LAWSUIT, BUT ONLY TO THE EXTENT IT HAS UNDERTAKEN OBLIGATIONS TO INSURE AND INDEMNIFY LICENSOR UNCIER THIS AGREEMENT. LICENSOR AGREES THAT THE LIMITS OF INSURANCE DESCRIBED HEREIN SHALL BE THI:; LIMITS THE LICENSEE THEN HAS IN EFFECT OR WHICH IS REQUIRED BY APPLICABLE CURRENT OR SUBSEQUENT LAW, WHICHEVER IS GREATER, A PORTION OF WHICH MAY BE SELF-INSURED WITH THE CONSENT AND APPROVAL OF LICENSOR. 9. Release and Indemnity. LICENSEE HEREBY AGREES TO RELEASE LICENSOR ANLI, TO THE EXTENT IT IS COVERED UNDER LICENSEE'S INSURANCE AS DELINEATED IN SECTION 8 OF THIS AGREEMENT, LICENSEE SHALL INDEMNIFY, DEFEND AND HOLD THE LICENSOR HARMLESS FROM ANY LIABILITY, LOSS, DA1I~AGE, CLAIMS, DEMANDS RESULTING FROM INJURY TO PERSON OR DAMAGE TO PROPERTY DAMAGE ARISING OUT OF LICENSEE'S PRESENCE UPON OR USE OF THE LICENSED AREA OR LICENSOR'S PROPERTY. 10. Transfer of License; Successors and Assigns. The License granted herein is personal to Licensee and Licensee may not assign, sub-license or otherwise transfer this Agreement, in whole or in part, or any rights herein granted, without the prior written consent of the Licensor, and it is agreed that any transfer or assignment or attempted transfer or assignment of this Agreement or any of the rights hereiin granted, whether voluntary, by operation of law, or otherwise, without such consent in writing, shall be absolutely void and, at the option of the Licensor, shall immediately terminate this Agreement. Subject to the foregoing, this Agreement shall be binding upon and inure to the benefit of the parties hereito, their heirs, executors, administrators, successors and assigns. 11. Miscellaneous. a. Notices. Notices shall be sent to the address of the relevant party set forth in the introduction to this Agreement, and must be sent by one of the following methods: (a) by certified mail, return receipt requested, in which case notice shall be deemed delivered three business days after deposit, postage prepaid in the U.S. Mail, (b) by overnight delivery using a nationally recognized overnight courier, in which case it shall be deemed delivered one business day after deposit with such courier, or (c) by personal delivery, in which case notice shall be deemed delivered upon delivery. All notices sent to Licensee shall also be copied to: Valero Port Water Line License Agreement Prem~cor/City of Port Arthur - SH 87 South Water System Improvement Project Arthur Refinery, 1801 South Gulfway Drive, Port Arthur, Texas 77640; Attn: Refinery Manager. Each party may change its address for notice by delivering written notice to the other party in accordance with this provision. b. No Waiver. No waiver by either party of any default under this Agreement shall be effective or binding upon such party unless made in writing. No waiver of any default shall be deemed a waiver of any other or subsequent default hereunder. c. No Partnership. None of the terms or provisions of this Agreement shall be deemed to create a partnership between the parties in their respective businesses or otherwise, nor shall it cause them to be considered joint venturers or members of any joint enterprise. d. Recording of Memorandum of Agreement. Neither party shall record this Agreement in the real property records of Jefferson County, Texas, However, contemporaneously herewith the parties shall execute (with appropriate acknowledgment) a Memorandum of Water Line License Agreement, substantially in the form attached hereto as Exhibit C, which Licensee shall have the right to record in the real property records of Jefferson County, Texas, at Licensee's sole cost and expense. e. Counterparts. This Agreement may be executed in multiple counterparts, each of which shall be deemed an original, and all of which together shall constitute but one and the same instrument. £ Authority. Each person executing this Agreement represents that he or she has been duly authorized to do so by all requisite action. on the part of the party on whose behalf he or she is signing and that, in so doing, he or she shall bind such party to all of the terms, provisions, conditions and covenants hereof. g. Applicable Law. This Agreement shall be interpreted and construed under the laws of the State of Texas, without regard to its conflict of law principles. h. Entirety, Execution, and Amendment. This Agreement comprises the entire agreement, and merges all prior representations and understandings, between Licensor and Licensee concerning the subject matter contained herein. Neither this Agreement, nor any amendment or supplement thereto, shall be binding on Licensor unless and until signed by an officer or other authorized representative of Licensor. i. Appropriation. All financial obligations of Licensee under this License shall be subject to the prior appropriation of monies therefor by the City of Port Arthur City Council, its governing body, provided however, that if any financial obligations are not met, including the payment of the License Fee described in Section 4 of this Agreement, such non-payment shall be considered a material breach of this Agreement, which is subject to Licensor's right to terminate this Agreement as further provided in Section 3 hereof. [Signatures on Following Page) Water Lzne License Agreement Premcor/City of Port Arthur - SH 87 South Water System Improvement Project Signature Page to Water Line License Agreement EXECUTED to be effective for all purposes as of the Effective Date. LICENSOR: THE PREMCOR REFINING GROUP INC. By: J. Greg Gentry, its Vice President LICENSEE: CITY OF PORT ARTHUR By: Stephen Fitzgibbons, City Manager Water Line License Agreement Premcor/City of Port Arthur - SH 87 South Water System Improvement Project EXHIBIT A to Water Line License Agreement Ali>?nment Sheets Showing Location of Licensed Area [attached behind this page] Water Gine License Agreement EXHIBIT A Premicor/City of Port Arthur - SH 87 South Water System Improvement Project EXHIBIT B to Water Line License Agreement FORM of Contractor Access Agreement CONTRACTOR ACCESS AGREEMENT This Contractor Access Agreement ("Agreement") is made, effective as of , 20__ (the "Effective Date"), by and between THE PREMCOR REFINING GROUP INC., a Delaware corporation ("Premcor"), whose address is One Valero Way, San Antonio, Texas 78249-1616, Attn: Property Assets; and a ("Contractor"), whose address is RECITALS A. Premcor owns certain real property located in Jefferson County, Texas that is commonly knovvn as the "Valero Port Arthur Refinery" (the "Property"). B. Premcor and the City of Port Arthur, a Texas municipal corporation (the "City") have entered into a Water Line License Agreement, dated effective as of October 1, 2009 (the "License Agreement"), under which Premcor has granted to the City right to install an approximately 20" nominal diameter PVC and/or HDPE pipeline (the "Water Line") under a portion of the Property in the location described in License Agreement as the "Licensed Area." Section 6(d) of the License Agreement requires that ,any contractors hired by the City to do any physical work on either the Property and/or the Licensed Area. must enter into a written access agreement on substantially the terms set forth herein. C. Contractor has been hired by the City to install, construct, maintain, test, inspect, repair and/or replace the Water Line, as further detailed on the attached Exhibit A (the "Work"), and in connection therewith, and in accordance with the License Agreement has requested access to the Property. C. Premcor has agreed to allow the Contractor limited access to the Property to do the Work, all o:n the terms and conditions set forth in this Agreement. NOW, THEREFORE, in consideration of the mutual covenants contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows: AGREEMENT 1. Right of Access. Subject to compliance with the provisions of this Agreement, Premcor herebby grants to Contractor and its subcontractors (collectively, the "Contractor Parties") anon- exclusive right of entry on, across and over so much of the Property as is reasonably necessary to undertake the activities necessary to do the Work (the "Access Area"), which shall in no event include the right. to access any portion of the Property that is within the refinery fence. This Agreement shall not grant any rights to Contractor in connection with the Property other than those expressly set out herein. The rights granted to Contractor in this Agreement terminate on the earliest to occur of the following (the "Acc'ess Expiration Date"): (a) the date on which the Work on the Property is complete; (b) the date on which the Work is terminated or abandoned by the City pursuant to the contract between the City and Water Line License Agreement EXHIBIT B Premcor/City of Port Arthur - SH 87 South Water System Improvement Project Contractor; or (c) The period from the Effective Date until the Access Expiration Date is called herein the `Access Period." Premcor has neither reviewed nor approved the scope of Work described on Exhibit Aandassumes no responsibility for the adequacy or sufficiency of the Work to accomplish the purposes of either the Contractor and/or the City. Limitations on Access. a. General. In no event shall the Work unreasonably interfere with the present and/or future use of the Property by the Premcor. The Contractor Parties shall have the right to access the Access Area by way of routes designated by Premcor in its reasonable discretion. Contractor is authorized to limit or restrict access to only such portions of the Access Area as may be necessary to ensure protection of the health. and safety of persons on or about the Access Area. The equipment and facilities used to perform the Work shall be properly maintained and operated in accordance with applicable law. All areas in which Work is performed shall be kept free from rubbish and debris. b. Restoration. At such time as any equipment or materials brought onto the Access Area are no longer necessary to perform the Work, as well as after the completion of all Work, Contractor shall promptly remove such equipment and facilities from the Access Area. Contractor agrees to restore any portion of the Property affected by the Work to its original condition prior to the Access Expiration Date. Any and all damage to the Property including those to the surface, the subsurface, and any structures, improvements (including the road) and vegetation located thereon, during the course of the Work shall be promptly and fully repaired or replaced by Contractor at no expense to Premcor. c. Legal Compliance. The Work and the costs and any liability arising therefrom is the sole responsibility of Contractor. The Work shall be performed in compliance with all governmental laws, ordinances, regulations, and directives including, without limitation, all federal, state and local laws and requirements pertaining to the Work and to the public health, safety and the environment. Contractor shall be solely responsible for securing and maintaining any and all permits, governmental fees, licenses and inspections necessary for the proper execution and completion of the Work, shall give all required notices bearing on the performance of the Work, and shall provide to Premcor an advance copy of each such notice and/or approval prior to commencing the Work. Neither the issuance of any work permits, nor the approval of any Work or procedures related thereto by Premcor shall impose any liability on Premcor with respect to the Work or the quality or safety thereof, nor shall any review, approval or acceptance of any Work by Premcor serve as a limitation or waiver of any of Premcor's rights or Contractor's obligations under this Agreement and/or under the License Agreement. d. Health/Safety. Each person accessing the Property on behalf of Contractor shall perform all Work in accordance with the requirements of this Agreement and shall comply with all applicable health and safety rules of Premcor (including, without limitation, Premcor's work permit rules) and, except in response to an emergency condition, must attend an initial site orientation provided by Premcor, sign-in and sign-out each work day at a location specified by Premcor, and wear an identification badge provided by Premcor. Before the Work is commenced, Contractor will present Premcor with evidence of completion of training required by Premcor by all personnel to perform the Work. Any person who fails to comply with the terms of this Agreement may be removed from the Property and denied further access by Premcor without affecting any other obligation with respect to the Work or this Agreement. Water L ine License Agreement EXHIBIT B Premcor/City of Port Arthur - SH 87 South Water System Improvement Project 3. Standard of Performance, Consultants and Contractors. The Work performed by the Contractor, its consultants, contractors, subcontractors and other agents shall be in accordance with generally accepted national standards of care, skill, diligence and professional competence applicable to the consultants, contractors, subcontractors or other agents for work of the same or similar nature as the Workk. Contractor shall not enter into any agreement with a contractor, subcontractor or other agent that is irnconsistent with the provisions of this Agreement, and shall secure the performance of all Work by each agent in accordance with the requirements of this Agreement. Contractor shall be solely responsible for directing, supervising, and paying all fees and expenses of their contractors, subcontractors and other agents. 4. Information/Access. Premcor will at all times have full access to observe the conduct of the `7Vork. Contractor agrees to furnish Premcor with all reports, tests results, or documents filed with governmental authorities that relate to the Property, and all final "as built" drawings for the Water Line. 5. Insurance. Contractor agrees that all Contractor Parties will carry the insurance specified in Exhibit B, including any requirements regarding waivers of subrogation or additional insured status of Premcor and its affiliates. All contracts Contractor and its consultants conducting any Work on the Property will be engaged must be in writing with the inclusion of the insurance requirements set forth in Exhibit B, including any requirements regarding waivers of subrogation or additional insured status of Pren-cor and its affiliates. The requirement to procure and maintain such insurance will not limit or otherwise affect the indemnity obligations contained herein. Before the Work is commenced, Contractor will provide Premcor with the evidence required by Exhibit A that such insurance is in force and effect. 6. Liens. Contractor shall save and keep the Property free from all mechanic's and materialmen's liens and all other liens or claims, legal or equitable, arising from or associated with the Work. In the event any lien or claim arising from or associated with the Work, is filed by any person claiming by, through, or under Contractor, such lien or claim shall be removed and discharged by Contractor within 10 days after Contractor's receipt of notice of the filing thereof. 7. Parties' Relationship. This Agreement is entered into by the parties solely to provide access to the Access Area for the limited purposes described herein and to define the rights, obligations, and liabilities of the parties associated therewith. Nothing contained in this Agreement shall be deemed or construed to make Contractor or its consultants, contractors, subcontractors and agents the employee or agent of Premcor, or to create any partnership, joint venture, or other association between the parties hereto. 8. Other Remedies. This Agreement shall not serve as a limitation on the ability of Premcor to pursue any other remedy available under law with respect to a past or future act or omission of Contractor on or about the Property. 9. INDEMNITY. CONTRACTOR AGREES TO INDEMNIFY, HOLD HARMLESS, RELEASE AND DEFEND PREMCOR AND EACH OF ITS RESPECTIVE AFFILIATED COMPANIES, SUCCESSORS, ASSIGNS, LEGAL REPRESENTATIVES, OFFICERS, DIRECTORS, SHAREHOLDERS, MEMBERS, PARTNERS, EMPLOYEES AND AGENTS (COLLECTIVELY THE "INI~EMNITEES") FOR, FROM AND AGAINST ALL LIABILITIES, CLAIMS, DAMAGES, LOSSES, LIENS, FINES, PENALTIES, COSTS, ACTIONS, CAUSES OF ACTION, SUITS, JUDGMENTS AND EXPENSES (INCLUDING, WITHOUT LIMITATION, COURT COSTS, ATT'ORNEYS' FEES, AND COSTS OF INVESTIGATION) OF ANY NATURE, KIND OR DESCRIPTION OF ANY PERSON OR ENTITY (INCLUDING, WITHOUT LIMITATION, CLAIMS AND LIABILITIES RELATING TO BODILY INJURY, DISEASE, ILLNESS, DEATH AND PROPERTY DAMAGE) ARISING OUT OF, CAUSED BY, OR RESULTING FROM (IN WHOLE OR Rater Line License Agreement EXHIB[T B Premcor/City of Port Arthur - SH 87 South Water System Improvement Project IN P'ART), (A) THE WORK, (B) THIS AGREEMENT, (C) ANY ACT OR OMISSION OF ANY OF THE CONTRACTOR PARTIES (COLLECTIVELY, THE "LIABILITIES"), EVEN IF SUCH LIABILITIES ARISE FROM OR ARE ATTRIBUTED TO THE JOINT, CONCURRENT OR CONTRIBUTORY NEGLIGENCE OF ANY INDEMNITEE OR FROM STRICT LIABILITY ON THE PART OF ANY INDEMNITEE. IT IS THE EXPRESS INTENT OF THE PARTIES THAT THE INDEMNITEES BE PROTECTED UNDER THIS SECTION 10 EVEN IF SUCH LIABILITIES ARISE FROM OR ARE ATTRIBUTED TO THE JOINT OR CONCURRENT NEGLIGENCE OF ANY INDEMNITEE OR FROM STRICT LIABILITY. THE ONLY LIABILITIES FOR WHICH POTENTIAL BUYER SHALL NOT BE OBLIGATED TO INDEMNIFY THE INDEMNITEES AS AFORESAID ARE THOSE WHICH RESULT SOLELY FROM THE NEGLIGENCE OR WILLFUL MISCONDUCT OF AN INDEMNITEE. The Indemnitees will promptly advise Contractor in writing of any action, administrative or legal proceeding or investigation as to which this indemnification may apply, and Contractor at its sole expense will assume on behalf of Premcor and the other Indemnitees, and will conduct with due diligence and in good faith, the defense thereof; provided, however, that any Inde~mnitee will have the right, at its option, to be represented therein by advisory legal counsel of its own selection and at its own expense. In the event of failure by Contractor to fully perform in accordance which this indemnification paragraph, Premcor, at its option, and without relieving Contractor of its obli€;ations hereunder, may so perform, but all costs and expenses so incurred by Premcor in that event will be reimbursed by Contractor to Premcor. 11. Miscellaneous. a. Successors and Assigns. This Agreement is personal to Contractor and Premcor and shall inure to the benefit of, and be binding upon, their respective successors and assigns. Contractor may not assign its rights or obligations under this Agreement without the prior written consent of Premcor. b. Notices. Notices shall be sent to the address of the relevant party set forth in the introduction to this Contract, and must be sent by one of the following methods: (a) by certified mail, return receipt requested, in which case notice shall be deemed delivered three business days after deposit, postage prepaid in the U.S. Mail, (b) by overnight delivery using a nationally recognized overnight courier, in which case it shall be deemed delivered one business day after deposit with such courier, or (c) by personal delivery, in which case notice shall be deemed delivered upon delivery. Each party may change its address for notice by delivering written notice to the other party in accordance with this provision. c. Expiration; Survival. Contractor's right to access the Access Area shall expire on the Access Expiration Date. All other covenants and obligations of Contractor shall survive the Access Expiration Date and/or any earlier termination of this Agreement. d. Attorney's Fees and Costs. If any action at law or in equity is necessary to enforce or interpret the terms of this Agreement, the prevailing party shall be entitled to reasonable attorney's fees and costs of investigation, in addition to any other relief to which the party may be entitled. e. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS WITHOUT REGARD TO CONFLICTS OF LAWS RULES AS APPLIED IN TEXAS. £ Construction. The parties acknowledge that each party and, if it so chooses, its counsel have reviewed and revised this Agreement and that the normal rule of construction to the Water Line License Agreement EXHIBIT B Premcor/City of Port Arthur - SH 87 South Water System Improvement Project effect that any ambiguities are to be resolved against the drafting party shall not be employed in the interpretation of this Agreement or any amendments or exhibits hereto. The paragraph and section headings in this Agreement are for convenience of reference and shall not affect the construction or interpretation of this Agreement. g. Counterparts. This Agreement may be executed in multiple counterparts, each of which shall be deemed to be an original, and all of which together shall constitute but one and the same instrument. h. Exhibits. All exhibits attached hereto incorporated herein by and made a part hereof for all purposes. i. Entire Agreement; Amendment. This Agreement embodies the entire agreement between the parties and supersedes all prior agreements and understandings relating to the subject matter hereof. This Agreement may be amended or supplemented only by an instrument in writing executed by the party against whom enforcement is sought. The parties hereto have executed this Agreement as of the date set forth below, to be effective as of the Effective Date. PRE,MCOR: CONTRACTOR: THE PREMCOR REFINING GROUP INC., a Delaware corporation By: [EXHIBIT ONLYI Name: Title: By: IEXHIBIT ONLYI Name: Title: Date: Date: Water Line License Agreement EXHIBIT B Prem~cor/City of Port Arthur - SH 87 South Water System Improvement Project EXHIBIT A DESCRIPTION OF THE WORK [attached behind this page] Water Line License Agreement EXHIBIT B Prem~cor/City of Port Arthur - SH 87 South Water System Improvement Project EXHIBIT B INSURANCE REQUIREMENTS 1. Insurance. Contractor shall maintain at all times, over the term of this agreement, with an insurance company reasonably acceptable to Premcor, the following insurance coverages with limits not less than those specified below: A. 1. Worker's Compensation 2. Employer's Liability Statutory: Coverage satisfactory in Texas $1,000,000 each accident B. General Liability Coverage: endorsed to cover (i) $1,000,000 Combined Single Limit Bodily Injury and contractual liability assumed under this Agreement; Property Damage Combined and (ii) products liability, and completed operations C. Automobile Liability Coverage: endorsed to cover all owned, non- owned and hired vehicles D. Umbrella Liability in excess of A.2., B ~ C - Endorsed to provide adrop-down endorsement in the event underlying limits are exhausted by claims. $1,000,000 Combined Single Limit Bodily Injury and Property Damage Combined $10,000,000 Combined Single Limit Bodily Injury and Property Damage Combined Prior to commencing any Work, Contractor shall furnish Premcor with a Certificate of Insurance evidencing that the above minimum coverages are in effect, and replacement certificates shall be furnished for all renewals of such insurance. All policies except A.1 above shall be endorsed to name "Valero Energy Corporation, its subsidiaries and affiliates, and their respective officers, directors, employees, agents and representatives" (hereinafter sometimes referred to as "Additional Insureds") as Additional Insureds. Contractor hereby waives all of its insurers' rights of subrogation against the Additional Insureds, and all policies shall provide a waiver of subrogation in favor of the Additional Insureds. The certificate shall state that all coverages provided by Contractor shall be primary over and not contributory with any insurance carried by Premcor for its own account. Such insurance shall be endorsed with a standard cross liability clause in favor of the Additional Insureds. Such insurance shall also cover the actions of any subcontractor that Contractor may utilize under this Agreement. Further, underwriters will provide Premcor thirty (30) days written notice of cancellation or adverse material change, including but not limited to a reduction in limits available to the Additional Insureds, in Contractor's insurance. Any such notice of cancellation shall not be effective for thirty (30) days after receipt by Premcor. The Parties understand and agree that the purpose of this section is for Contractor to provide Premcor with insurance coverage as an Additional Insured which will be primary to any insurance policy Premcor might carry on its own behalf and that such coverage which Contractor supplies will respond to losses arising out of any act, omission, failure to act or negligence on the part of any Additional Insured unless it is judicially determined that the Additional Insureds was solely responsible. It is also understood and agreed that this insurance coverage provided by Contractor shall operate independent and apart from any indemnification obligations of Contractor in this Agreement. 2. Dutv to Defend. Contractor shall take necessary safety and other precautions to protect property and persons from damages, injuries, or illness arising out of the performance of the Work. At all times while any of Contractor's employees, agents, or subcontractors are on Premcor's premises (including, without limitation, the Property), Contractor shall be solely responsible for providing them with a safe place of employment, and Contractor shall inspect the places where its employees, agents, or subcontractors are or may be present on Premcor's premises and shall promptly take action to correct conditions which are or may become an unsafe place of employment for them. In the event an incident arises under this Agreement wherein Premcor is sued and Contractor is obligated to provide Premcor a defense either under this Agreement, Contractor shall provide or cause to be provided competent counsel for said defense within two weeks of Premcor's notice to Contractor of such action. In the event Contractor fails to provide such counsel within this time period, then Premcor may appoint its own outside counsel which shall be for Contractor's account until Contractor substitutes its own choice of counsel. [Endl of Exhibit BJ Water Line License Agreement EXHIBIT B Premicor/City of Por[ Arthur - SH 87 South Water System Improvement Project EXHIBIT C to Water Line License Agreement FORM of Memorandum of Agreement AFTER RECORDING PLEASE RETURN TO: The 1Premcor Refining Group Inc. One Valero Way San Antonio, Texas 78249-1616 Attention: Property Assets MEMORANDUM OF WATER LINE LICENSE AGREEMENT This Memorandum of Water Line License Agreement (this "Memorandum"), is made and entered into effective as of the 1" day of October, 2009 (the "Effective Date"), by and between THE PREMCOR REFINING GROUP INC., a Delaware corporation ("Licensor"), whose address is One Valero Way, San Antonio, Texas 78249-1616; Attn: Property Assets; and CITY OF PORT ARTHUR, a Texas municipal corporation ("Licensee"), whose address is 444 Fourth Street, Port Arthur, Texas 77641. 1. Purpose of Memorandum. Licensor and Licensee have executed and recorded this Merr~orandum to provide public notice that Licensor and Licensee have entered into a Water Line License Agreement, dated effective as of October 1, 2009 (the "License Agreement"), as further described herein. 2. Licensed Area. In the License Agreement, Licensor granted to Licensee, and Licensee accepted from Licensor, anon-exclusive license to use and occupy the following parcel of land, upon the terms and conditions set forth in the License Agreement, during the Term (as defined in Section 3 of the Agreement, as further detailed in Section 4 below), solely for the Permitted Use (as defined in Section 2 of the Agreement, as further detailed in Section 3 below): A twenty-four (24") inch wide piece of land located in Jefferson County, Texas, along the route depicted on the alignment drawings 12 through 51, prepared by Arceneaux & Gates for The City of Port Arthur S.H. 87 South Water System Improvement Project, which are attached hereto as Exhibit A (the "Licensed Area"). The Licensed Area is generally located upon real property commonly known as Licensor's "Valero Port Arthur Refinery", which is located at 1801 South Gulfway Drive, Port Arthur, Jefferson County, Texas 77640 ("Licensor's Property"). The License was granted subject to all outstanding superior rights (including those in favor of other licensee's and lessees of Licensor's Property) and the right of Licensor to renew and extend the same, and is made without covenant of title or for quiet enjoyment. 3. Permitted Use. The License Agreement provides that Licensee may use the Licensed Area. solely to install, construct, own, operate, maintain, test, inspect, repair, replace, and remove one (1) twenty-inch (20") nominal diameter PVC and/or HDPE pipeline, over, on, under and across the Licensed Area. (the "Water Line"), which shall be used solely for the transportation of potable water and for no other business or purpose without the prior written consent of Licensor (the "Permitted Use"). Water Line License Agreement EXHIBIT C Premcor/City of Port Arthur - SH 87 South Water System Improvement Project 4. Term. The term of the License Agreement and the License granted thereunder (the "Ter,m") shall begin on October 1, 2009 (the "Commencement Date") and shall end on September 30, 2108 (the "Expiration Date"). Notwithstanding anything to the contrary contained herein, if: (a) Licensee ceases to use the Licensed Area for the Permitted Use for more than 365 consecutive days, or (b) Licensee fails to cure the breach of any other material term of this agreement or obligation to be performed by Licensee hereunder within 30 days after written notice thereof from Licensor, then Licensor may terminate this Agreement by delivering written notice to Licensee at any time thereafter (a "Termmination Notice"), the date of which notice shall be the date on which the termination of this Agreement will occur (the "Termination Date"). If the License Agreement is terminated for any reason prior to September 30, 2108, then within 15 days after Licensee's receipt of a written request by Licensor, Licensee shall execute, acknowledge and deliver to Licensor a recordable release of this Memorandum. 5. License Controls. In the event of a conflict between this Memorandum and the License, the teens and provisions of the License shall govern and control. IN WITNESS WHEREOF, Licensor and Licensee have executed this instrument as of the dates set forth in their respective acknowledgements below, to be effective for all purposes, however, as of the Effective Date. LICIENSOR: THE PREMCOR REFINING GROUP INC., a Delaware corporation By: IEXHIBIT ONLY] J. Greg Gentry, its Vice President STATE OF TEXAS COUNTY OF The foregoing instrument was acknowledged before me on , 2009, by J. Greg Gentry, a Vice President of THE PREMCOR REFINING GROUP INC., a Delaware corporation, on behalf of said corporation. Notary Public, State of Texas My commission expires: [Licensee's Signature and Acknowledgment on Following Page) Water Line License Agreement EXHIBIT C Prem~cor/City of Port Arthur - SH 87 South Water System Improvement Project LICIENSEE: CITY OF PORT ARTHUR, a Te;tas municipal corporation By: (EXHIBIT ONLYI Stephen Fitzgibbons, City Manager STATE OF TEXAS § COUNTY OF JEFFERSON This instrument was acknowledged before me on the day of , 2009 by Stephen Fitzgibbons as the City Manager of the City of Port Arthur. Notary Public, State of My commission expires: f~'ater Line License Agreement EXHIBIT C Premcor/City of Port Arthur - SH 87 South Water System Improvement Project EXHIBIT "B" z.pr15338 AFTER RECORDING PLEASE RETURN TO: The 1?remcor Refining Group Inc. One Valero Way San Antonio, Texas 78249-1616 Attention: Property Assets MEMORANDUM OF WATER LINE LICENSE AGREEMENT This Memorandum of Water Line License Agreement (this "Memorandum"), is made and entered into effective as of the 1'` day of October, 2009 (the "Effective Date"), by and between THE PREMCOR REFI[NIN(i GROUP INC., a Delaware corporation ("Licensor"), whose address is One Valero Way, San Antonio, Texas 78249-1616; Attn: Property Assets; and CITY OF PORT ARTHUR, a Texas municipal corporatiari ("Licensee"), whose address is 444 Fourth Street, Port Arthur, Texas 77641. 1. Purpose of Memorandum. Licensor and Licensee have executed and recorded this Memorandum to provide public notice that Licensor and Licensee have entered into a Water Line License Agreement, dated effective as of October 1, 2009 (the "License Agreement"), as further described herein. 2. Licensed Area. In the License Agreement, Licensor granted to Licensee, and Licensee accepted from Licensor, anon-exclusive license to use and occupy the following parcel of land, upon the terms and conditions set forth in the License Agreement, during the Term (as defined in Section 3 of the Agreement, as further detailed in Section 4 below), solely for the Permitted Use (as defined in Section 2 of the Agreement, as further detailed in Section 3 below): A twenty-four (24") inch wide piece of land located in Jefferson County, Texas, along the route depicted on the alignment drawings 12 through 51, prepared by Arceneaux & Gates for The City of Port Arthur S.H. 87 South Water System Improvement Project, which are attached hereto as Exhibit A (the "Licensed Area"). The Licensed Area is generally located upon real property commonly known as Licensor's "Valero Port Arthur Refinery", which is located at 1801 South Gulfway Drive, Port Arthur, Jefferson County, Texas 77640 ("Licensor's Property"). The License was granted subject to all outstanding superior rights (including those in favor of other licensee's and lessees of Licensor's Property) and the right of Licensor to renew and extend the same, and is made without covenant of title or for quiet enjoyment. 3. Permitted Use. The License Agreement provides that Licensee may use the Licensed Area. solely to install, construct, own, operate, maintain, test, inspect, repair, replace, and remove one (1) twenty-inch (20") nominal diameter PVC and/or HDPE pipeline, over, on, under and across the Licensed Area. (the "Water Line"), which shall be used solely for the transportation of potable water and for no other business or purpose without the prior written consent of Licensor (the "Permitted Use"). 4. Term. The term of the License Agreement and the License granted thereunder (the "Term") shall begin on October 1, 2009 (the "Commencement Date") and shall end on September 30, 2108 (the "Expiration Date"). Notwithstanding anything to the contrary contained herein, if: (a) Memorandum ojWater Line License Agreement Premcor/City of Port Arthur - SH 87 South Water System Improvement Project Lice~isee ceases to use the Licensed Area for the Permitted Use for more than 365 consecutive days, or (b) Licensee fails to cure the breach of any other material term of this agreement or obligation to be performed by Licensee hereunder within 30 days after written notice thereof from Licensor, then Licensor may terminate this Agreement by delivering written notice to Licensee at any time thereafter (a "Termmination Notice"), the date of which notice shall be the date on which the termination of this Agreement will occur (the "Termination Date"). If the License Agreement is terminated for any reason prior to September 30, 2108, then within 15 days after Licensee's receipt of a written request by Lice~isor, Licensee shall execute, acknowledge and. deliver to Licensor a recordable release of this Memorandum. 5. License Controls. In the event of a conflict between this Memorandum and the License, the tc;rms and provisions of the License shall govern and control. IN WITNESS WHEREOF, Licensor and Licensee have executed this instrument as of the dates set forth in their respective acknowledgements below, to be effective for all purposes, however, as of the Effective Date. LICIENSOR: THE PREMCOR REFINING GROUP INC., a Delaware corporation By: J. Greg Gentry, its Vice President ~„y STATE OF TEXAS COUNTY OF The foregoing instrument was acknowledged before me on , 2009, by J. Greg Gentry, a Vice President of THE PREMCOR REFINING GROUP INC., a Delaware corporation, on behalf of said corporation. Notary Public, State of Texas My commission expires: [Licensee 's Signature and Acknowledgment on Following Page) Memorandum of Water Line License Agreement Premcor/City of Port Arthur - SH 87 South Water System Improvement Project LICENSEE: C [T1' OF PORT ARTHUR, a Te~:as municipal corporation By: Stephen Fitzgibbons, City Manager STATE OF TEXAS CO1rrNTY OF JEFFERSON This instrument was acknowledged before me on the day of , 2009 by Stephen Fitzgibbons as the City Manager of the City of Port Arthur. Notary Public, State of My commission expires: Merr.~orandum of Water Line License Agreement Premcor/City of Port Arthur - SH 87 South Water System Improvement Project