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 GOESSEL, KANSAS:

SECTION 1. That in consideration of the benefits to be derived by the City of Goessel, Kansas (“City”), and its inhabitants, there is hereby granted to Kansas Gas Service Company, a Division of ONEOK Inc. (“Company”), said Company being a corporation 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, parkings, 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 revenue taxes, the Company shall pay to the City during the term of this franchise five percent (5%) of said 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 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 obtain at no additional cost to Company, such permits prior to commencing work in the streets, avenues, bridges, parks, parkings, and public places as the City may from time to time require for purposes of record keeping. Except that in the event of an emergency Company shall have the right to commence work without having first obtained such permit(s).

SECTION 4. Company shall, in doing of 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, shall at its own expense and in a manner satisfactory to the duly authorized representatives of the City replace such paving or surface in substantially as good condition as before said work was commenced.

SECTION 5. 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 6. 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 7. I. Upon written request of either the City or the Company, the franchise may be reviewed after five (5) years from the effective date of this ordinance and either the City or the Company may propose amendments to any provision of this franchise by giving thirty days’ written notice to the other of the amendment(s) desired. The City and Company shall negotiate in good faith in an effort to agree upon mutually satisfactory amendment(s).

II.    Upon written request of either the City or the Company, the franchise shall be reopened and renegotiated at any time upon any of the following events:

(a)   Change in federal, state, or local law, regulation, or order which materially affects any rights or obligations of either the City or Company, including to but not limited to the scope of the grant to the Company or the compensation to be received by the City.

(b)   Change in the structure or operation of the natural gas industry which materially affects any rights or obligations of either the City or Company, including but not limited to the scope of the grant to the Company or the compensation to be received by the City.

(c)   Any other material and unintended change or shift in the economic benefit the City or the Company relied upon and anticipated upon entering into this franchise.

SECTION 8. 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 9. 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 binding contract between the parties hereto, their successors and assigns, from and the expiration of sixty (60) days from its final passage, approval, and publication as required by law, and acceptance by said Company.

SECTION 10. 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 11. This franchise is granted pursuant to the provisions of K.S.A. 12-2001.

SECTION 12. That any and all ordinances or parts of ordinances in conflict with the terms hereof are hereby repealed.

SECTION 13 Should the State Corporation Commission take any action with respect to this franchise ordinance, which or may preclude Kansas Gas Service, 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.