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<br />SECTION 1. GRANT OF RIGHTS.
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<br />The City of San Marcos, Hays County, Texas, (herein referred to as 'City") does hereby
<br />grant unto CenterPoint Energy Resources Corp., DBA CenterPoint Energy Texas Gas
<br />Operations, its successors and assigns (herein called "Grantee") the right, privilege, and
<br />franchise to construct, lay, maintain, and operate within and along all of the present and future
<br />street. squares, alleys, bridges, utility easements and other public properties in the City and in all
<br />such places within areas hereinafter annexed to the corporate boundaries of the City (these areas
<br />hereinafter collectively referred to as "public property", a system of pipelines, gas mains,
<br />laterals, conduits, feeders, regulators, meters, connections, and other appurtenances necessary
<br />and proper for the purpose of transporting, distributing, supplying and selling gas (natural and/ or
<br />artificial and/ or mixed) for heating, lighting, power and for any other purpose for which gas may
<br />be used by the City and its inhabitants or any other person within the corporate boundaries of the
<br />City.
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<br />SECTION 2. NO INTERFERENCE WITH TRAFFIC AND OTHER PUBLIC USE.
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<br />2.1. Grantee's property shall be so constructed and maintained so that it will not interfere
<br />unreasonably with traffic over the public thoroughfares of the City and shall be laid in
<br />accordance with the lines, grades, and conditions established by the City.
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<br />2.2. Grantee shall conduct its maintenance, repair, construction, and similar activity in a
<br />manner that will cause the least interference practicable with the use of public or private property
<br />within the City.
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<br />SECTION 3. CONSTRUCTION ACTIVITIES.
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<br />3.1. Grantee shall comply with all applicable laws and provisions of ordinances of the City
<br />regarding construction within or on public property. The City shall have the right to inspect all
<br />construction to ensure compliance with these laws and ordinances.
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<br />3.2. The City reserves the right to lay, and permit to be laid sewer, water, and other
<br />pipelines, poles, cables, and conduits and facilities for the transmission and supply of electricity,
<br />and to do and permit to be done any underground or above ground work that may be necessary or
<br />proper in, across, along, over, or under any area of the public property occupied by the Grantee.
<br />The City also reserves the right to change any curb, sidewalk, or street. In permitting this work to
<br />be done, the City shall not be liable to Grantee for any resulting damage to Grantee's property.
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<br />3.3. The City expressly reserves the right to change grades, construct, widen or relocate
<br />streets and other public facilities. Whenever, by reason of the construction, relocation, widening,
<br />or changing of grade of a street or a public facility or a water pipe, gas pipe, sewer, or electrical
<br />distribution facility for a governmental purpose, it is deemed necessary by the City to remove
<br />change, or conform the underground or above-ground facilities of Grantee, Grantee shall make
<br />the alterations or changes as soon as practicable when requested in writing by City, without
<br />claim for reimbursement or damages against City but as a reasonable and necessary operating I
<br />expense of Grantee. In making any such request, the City agrees to share information regarding
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