AN ORDINANCE, granting to Kansas Gas Service Company, a Division of ONEOK, Inc., its successors and assigns, a natural gas franchise, prescribing the terms thereof and relating thereto, and repealing all ordinances or parts of ordinances inconsistent with or in conflict with the terms hereof.

BE IT ORDAINED BY THE GOVERNING BODY OF THE CITY OF SEDGWICK, KANSAS:

SECTION I. That in consideration of the benefits to be derived by the City of Sedgwick, Kansas, (“City”), and it inhabitants, there is hereby granted to Kansas Gas Service Company, (“Company”), said Company operating a system for the transmission and distribution of natural gas in the State of Kansas, the right, privilege, and authority for a period of twenty (20) years from the effective date of this ordinance, to occupy and use the several streets, avenues, alleys, bridges, parks, parking areas, and public places of said City, for the placing and maintaining of equipment and property necessary to carry on the business of selling and distributing natural gas for all purposes to the City, and its inhabitants, and through said City and beyond the limits thereof; to obtain said natural gas from any source available; and to do all things necessary or proper to carry on said business in the City.

SECTION 2. As further consideration for the granting of this franchise, and in lieu of any city occupation, license, or permit fees, or revenue taxes, the Company shall pay to the City during the term of this franchise five percent (5%) of the gross cash receipts from the sale of natural gas for consumption in the City for all purposes within the corporate limits of the City, such payments to be made monthly for the preceding monthly period. Gross cash receipts shall not include other operating revenues received by the Company, which are not related to the “sale of natural gas”. These include, but are not limited to, delayed payment charges, connection fees, disconnection and reconnection fees, collection fees, and return check charges.

SECTION 3. That all new mains, services, and pipe which shall be laid or installed under this grant shall be so located and laid as not to obstruct or interfere with any water pipes, drains, sewers, or other structures already installed. Company shall provide, prior to commencing work on existing or new facilities, information to the City concerning work to be performed in the streets, avenues, bridges, parks, parking areas, and public places of the City, as the City may require for purposes of notice and record keeping. The City may require that the information be provided on its standard permit form, but without requiring formal approval, express consent, or fees. The City shall have the right to review all projects and require reasonable adjustments in the design of said projects when in direct conflict with City facilities or future public improvements. In the event of an emergency Company shall have the right to commence work without having first providing such information.

SECTION 4. The parties shall establish a procedure for the exchange of information concerning proposed projects which may require installation or relocation of facilities located in the public right of way. The intent being to avoid future conflicts and unnecessary costs by anticipating and planning for changes required by public projects, including, but not limited to, street widening, or installation of City utilities such as water and sewer lines. The Company and the City shall provide project information and plans to each other about new construction as soon as reasonably possible. Redesign of Company facilities to accommodate future public improvements paid for with public funds shall be without cost to the City.

SECTION 5. Company shall, in doing the work in connection with its said gas mains, pipes, and services, avoid, so far as may be practicable, interfering with the use of any street, alley, avenue, or other public thoroughfare, and shall, at its own expense and in a manner satisfactory to the duly authorized representatives of the City, replace such paving or surface in as good condition as before said work was commenced and in accordance with any applicable City Standards for replacement of such items.

SECTION 6. It is recognized that the natural gas to be delivered hereunder is to be supplied from a pipeline system transporting natural gas from distant sources of supply; and the Company, by its acceptance of this franchise as hereinafter provided, does obligate itself to furnish natural gas in such quantity and for such length of time, limited by the terms hereof, as the said sources and said pipelines are reasonably capable of supplying.

SECTION 7. That Company, its successors and assigns, in the construction, maintenance, and operation of its natural gas system, shall use all reasonable and proper precaution to avoid damage or injury to persons and property, and shall hold and save harmless the City from any and all damage, injury, and expense caused by the negligence of said Company, its successors and assigns, or its or their agents or servants.

SECTION 8. Upon written request of either the City or the Company, the franchise may be reviewed at five (5) years intervals from the effective date of this ordinance, at which time either the City or the Company may propose amendments to any provision of this franchise by giving written notice to the other party of the amendment(s) desired. Said notice shall be served by certified mail or personal service at least thirty (30) days prior to the end of any five year interval. The City and the Company shall negotiate in good faith in an effort to agree upon mutually satisfactory amendment(s).

Failure of the City and Company to successfully renegotiate the materially affected provisions of the franchise under this section shall give rise to dispute resolution as follows: At the expiration of 90 days from the date of the written request (or sooner if requested by both the City and the Company) the City and the Company shall each select a representative who shall jointly select a third representative. The three representatives shall hear the positions of the City and Company and shall determine the matters in disagreement by majority vote. Such decision shall be presented to City and the Company as the renegotiated language under subsections above. Rejection of the dispute resolution by either the City or the Company shall give rise to the remedies provided by Statute, or at the option of the parties, the franchise shall remain in effect according to its then existing terms.

Amendments under this Section, if any, shall be made by ordinance as prescribed by statute. Except as provided within this section the franchise shall remain in effect according to its terms pending completion of any review or renegotiation provided by subsections above.

SECTION 9. That within twenty (20) days from and after the passage and approval of this Ordinance, Company shall file the same with the State Corporation Commission for the Commission's approval.

SECTION 10. After the approval of this Ordinance by the State Corporation Commission, Company shall file with the City Clerk of the City its unconditional written acceptance of this Ordinance. Said Ordinance shall become effective and be in force and shall be and become a binding contract between the parties hereto, their successors and assigns, from and after the expiration of sixty (60) days from its final passage, approval, and publication as required by law, and acceptance by said Company.

SECTION 11. This Ordinance, when accepted as above provided shall constitute the entire agreement between the City and the Company relating to this franchise and the same shall supersede and cancel any prior understandings, agreements, or representations regarding the subject matter hereof, or involved in negotiations pertaining thereto, whether oral or written.

SECTION 12. This franchise is granted pursuant to the provisions of K.S.A. 12-2001.

SECTION 13. That any and all ordinances or parts of ordinances in conflict with the terms hereof are hereby repealed and of no effect.

SECTION 14. Should the State Corporation Commission take any action with respect to this franchise ordinance, which or may preclude Kansas Gas Service Company from recovering from its customers any cost provided for hereunder, the parties hereto shall renegotiate this ordinance in accordance with the State Corporation Commission's ruling.

(05-17-1999)