An Ordinance, granting to Kansas Gas Service, a Division of ONEOK, Inc., authorized to do business in Kansas, 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 MILTONVALE, KANSAS:

SECTION 1. That in consideration of the benefits to be derived by the City of Miltonvale, Kansas, (the “City”), and its inhabitants, there is hereby granted to Kansas Gas Service, a Division of ONEOK, Inc., a Kansas corporation, hereinafter sometimes designated as “Company”, said Company being a corporation engaged in the business of selling and furnishing natural gas throughout the State of Kansas and to the inhabitants of the City, 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 three percent (3%) of its gross cash receipts from the sale of natural gas to all consumers within the corporate limits of said City, such payment 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”. Other operating revenues include, but are not limited to, delayed payment charges, connection fees, disconnection and reconnection fees, collection fees and return check charges. Company will use commercially reasonable efforts to ensure the accuracy of its records and of the determination of the amount of gross cash receipts subject to the fee provided for in this Section 2. At the option of either the City or the Company and upon written notice given by one to the other sent at least (90) days before the fifth, tenth, or fifteenth anniversary of this franchise, the rate of compensation hereunder may be renegotiated. Any new rate of compensation that results from such renegotiation shall be effective on and after the fifth, tenth, or fifteenth anniversary of this franchise. Notwithstanding anything to the contrary in this Franchise, the fee provided for in this Section 2 shall not become effective within any area annexed by the City until 30 days after the City provides the Company with a certified copy of the annexation ordinance, proof of publication as required by law and a map of the city detailing the annexed area.

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.

SECTION 4. Company shall, in the doing of the work in connection with its 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, it shall at its own expense and in manner satisfactory to the duly authorized representatives of the City replace such paving or surface in substantially as good condition as before the 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 or 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 source and the pipelines are reasonably capable of supplying.

SECTION 6. That Company, its successors and assigns, in the construction, maintenance, and operation of its natural gas distribution 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. After the approval of this ordinance by the City, Company shall file with the city Clerk the Company’s 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 first day of the first month after such acceptance is provided by said Company to the City after its final passage, approval and publication as required by law, and acceptance by said Company.

SECTION 8. That this ordinance, when accepted as above provided, shall constitute the entire agreement between the City and 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 9. This franchise is granted pursuant to the provisions of K.S.A. 12-2001.

SECTION 10. That any and all ordinances or parts of ordinances in conflict with the terms hereof are hereby repealed.

SECTION 11. The Company will file this ordinance with the State Corporation Commission of Kansas. Should the State Corporation Commission take any action with respect to this franchise ordinance, which would or may preclude Kansas Gas Service a Division of ONEOK, Inc., 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.

SECTION 12. A franchise shall be assignable only in accordance with the laws of the State of Kansas, as the same may exist at the time when any assignment is made. In the event of such assignment to a successor, Company shall be released from all obligations which are assumed in writing by its assignee upon the signing by such assignee of an assumption of the franchise being assigned.

(03-04-2013)