APPENDIX B - FRANCHISES

ORDINANCE NO. 723

FRANCHISE TO MAINTAIN A CABLE TELEVISION SYSTEM.

Section 1. Definitions. When used in this ordinance, unless the context otherwise requires, the following terms and their derivatives is shall have the meaning herein given (and when not inconsistent with context, words used in the present tense include the future, words in the plural number include the singular, and words in the singular number include the plural):

(a)    City - means the City of Nickerson.

(b)    Council - means the governing body of the city.

(c)    Grantee - means Western Satellite, Inc., its successors and assigns, the grantee of rights under this ordinance.

(d)    Person - means any natural person, company or entity of any kind.

(e)    Franchise Area - means that area within the corporate limits of the city as now or hereafter constituted.

(f)    Street - means the surface of and the space above and below any public street, way, place, right of way, road, highway, freeway, bridge, tunnel, lane, path, bike-path, alley, court, sidewalk, parkway, drive, communications or utility easement, by whatever name called, now or hereafter existing as such within the franchise area.

(g)    Property of Grantee - means all property owned, installed or used by the grantee in the conduct of a CATV business in the city.

(h)    CATV - means a cable television system.

(i)    Cable Television System - means a system composed of, without limitation, antenna, cables, wires, lines, towers, waveguides, or any other conductors, converters, equipment or facilities, designed, constructed or wired for the purpose of producing, receiving, amplifying and distributing by coaxial cable radio, television or other electronic or electrical signals to and from persons, subscribers and locations in the franchise area.

(j)    Basic CATV Service - means the distribution of broadcast television signals by the grantee.

(k)    Subscriber - means any person or entity receiving and paying for basic CATV service.

(l)    Basic Subscriber Revenues - means all remuneration received directly by the company from subscribers in payment for regularly furnished basic CATV service, but shall not include any taxes on services furnished by the grantee imposed on any subscriber or user by any government, governmental unit, political subdivision, agency or instrumentality, and collected by the grantee.

Section 2. Grant of Authority. There is hereby granted by the city to the grantee the right and privilege to engage in the business of operating and providing a CATV system in the city, and for that purpose to erect, install, construct, repair, replace, reconstruct, maintain and retain in, on, over, under, upon, across and along any street or streets laid out or dedicated and all extensions thereof and additions thereto in the franchise area, such poles, wires, cable, conductors, ducts, conduit, vaults, manholes, pedestals, amplifiers, appliances, attachments, and other property as may be necessary and appurtenant to the CATV system; and in addition, so to use, operate, and provide similar facilities or properties rented or leased from other persons, including but not limited to any public utility or other grantee franchised or permitted to do business in the city.

Section 3. Non-Exclusive Grant. The right to use and occupy the streets for the purposes herein set forth, shall not be exclusive in the grantee.

Section 4. Term of Franchise. The franchise and rights herein granted shall commence 30 days from the final passage hereof and shall continue in force and effect for five years after said effective date. Upon application by the grantee to the city, the franchise may be renewed for subsequent five years.

Section 5. Conditions of Street Occupancy. (a) All transmission and distribution structures, poles, lines, and equipment installed or erected by the grantee within the franchise area shall be so located as to cause minimum interference with the proper use of streets and with the rights and reasonable convenience of property owners who adjoin any of the streets. The CATV system shall be constructed and operated in compliance with applicable governmental construction and electrical codes.

(b)    In case of disturbance of any street or paved area, the grantee shall, at its expense and in a manner approved by the city, replace and restore such street or paved area in as good condition as heretofore.

(c)    The grantee shall, at its expense, protect, support, temporarily disconnect, relocate in the same street or other public place, or remove from the street or other public place, any property of the grantee when lawfully required by the city by reason of traffic conditions, public safety, street vacation, freeway and street construction, change or establishment of street grade, installation of sewers, drains, gas or water pipes or any other type of structures or improvements by the city but the grantee shall in all cases have the right of abandonment of its property, subject to city ordinances, and if public funds are available to any utility company for the purpose of defraying the cost of any of the foregoing, such funds shall also be made available to the grantee.

(d)    The grantee shall, on the request of any person holding a building moving permit issued by the city, temporarily raise or lower its wires to permit the moving of buildings, provides: (i) the expense of such temporary raising or lowering of wires is paid by the person, including, if required by grantee, making such payment in advance; and (ii) the grantee is given not less than three business days advance notice to arrange for such temporary wire changes.

(e)    The grantee shall have the authority to trim trees overhanging any streets in the franchise area so as to prevent branches from coming in contact with the grantee’s wires and cables, except that at the option of the city, such trimming may be done by it or under its supervision and direction at the grantee’s expense; provided however, 24 hours prior notice of planned trimming shall be given to the city clerk except that which must be undertaken by grantee on an emergency basis.

(f)    Subject to any applicable state or federal regulations or tariffs, the city shall have the right to make additional use, for any public purpose, of any poles or conduits controlled or maintained exclusively by or for the grantee in any street, provided: (I) such use by the city does not interfere with the use by the grantee; and (ii) the city holds the grantee harmless against and from all claims, demands, causes of actions, suits, actions, proceedings, damages, costs or liabilities of every kind and nature whatsoever arising out of such use of the poles or conduits.

Section 6. Safety Requirements. (a) The grantee shall at all times employ ordinary care and shall install and maintain in use commonly accepted methods and devices for preventing failures and accidents which are likely to cause damage, injuries or nuisances to the public.

(b)    All structures and all lines, equipment and connections in, over, under and upon all streets of the franchise area shall be kept and maintained in a safe and suitable condition and in good order and repair.

Section 7. System Construction and Extension. (a) The grantee is hereby authorized to extend the system within the franchise area to the extent that such extension is or may become technically and economically feasible.

(b)    Whenever the grantee shall have received written requests for service from at least 15 subscribers within 400 cable meters (1300 cable feet) of its aerial trunk cable, or from at least 25 subscribers within 400 cable meters (1300 cable feet) of its underground trunk cable, it shall extend its system to such subscribers solely for the usual connection and service fees for all subscribers, provided that such extension is technically and economically feasible. The 400 meters shall be measured in extension length of grantee’s cable required for service located within the public way or easement and shall not include length of necessary drop to the subscriber’s home or premises.

(c)    No person in the grantee’s service area shall be arbitrarily refused service; but in recognition of the capital costs involved in unusual circumstances, including, without limitation, instances when the distance from distribution cable to connection of service to subscribers is more than 45 meters (150 cable feet) or when a subscriber density exists less than the density specified hereinabove, service may be made available on the basis of costs of materials, labor and easements, in order to prevent inequitable burdens on cable subscribers in more densely populated areas.

(d)    For all residential structures hereinafter erected which are to be served by underground utilities, the developer of the subdivision or development may acquire CATV service for this development under the following conditions; but otherwise the grantee shall not be obligated to construct CATV system in such new development. Developer shall perform all trenching and backfilling necessary for the provision of cable television service, including furnishing of any imported backfill material required, and will furnish and install for the grantee any necessary distribution conduit and substructures, including pedestals, required in accordance with the grantee’s plans and specifications. Developer may enter into a written agreement with the grantee whereby such costs may be reimbursed to the developer by grantee at the rate of 50 percent of basic subscriber revenues generated from CATV service supplied within the development over a period not to exceed three years.

In addition to providing plans and specifications to the developer, the grantee shall inspect the facilities required hereunder, and certify to the city prior to final approval of the subdivision or development that the facilities required herein after properly installed. The city shall have the right to review and require its approval of the maps and specifications provided by the grantee. The cost of that portion of an extension to a subdivision or development from the grantee’s existing facilities in excess of 60 meters (200 feet) outside the boundaries of the subdivision or development shall be borne by the developer. Facilities installed hereunder shall be owned, operated, and maintained by grantee.

Section 8. Operation Standards; Force Majeure. (a) The grantee shall operate and maintain its cable television system in full compliance with the standards set forth by the Federal Communications Commission.

(b)    The grantee shall have no obligation to construct or extend the system, nor to provide, repair, replace, maintain or operate CATV service, for any cause beyond grantee’s control, including, without limitation, acts of God, fire, flood, earthquakes, hurricane, unavoidable casualty, extraordinary delays in transportation, strikes, lockouts, picketing, boycotts, embargo, government orders or other requirements, acts of civil or military authorities, governmental restrictions, regulations or controls, enemy or hostile governmental action, civil commotion, energy shortages, acts or omissions of carriers, or activities or other emergency conditions, including weather conditions incompatible with good quality workmanship.

Section 9. Local Office; Complaints. The grantee shall maintain a local business office or agent which subscribers may telephone during regular business hours without incurring added message or toll charges, so that complaints regarding cable television operations may be promptly reported to the grantee.

Section 10. Rates. The grantee shall maintain on file with the city clerk a schedule setting forth all rates and charges to be made to subscribers for basic CATV service, including connection and service charges. Notice of changes in rates and charges shall be filed with the city clerk at least 30 days in advance of the effective date thereof.

Section 11. Franchise Payments. The grantee shall pay the city, on or before each March 31st, a franchise fee of ______ percent of basic subscriber revenues received for cable television operations in the city for the preceding calendar year, and no other fee, charge or consideration. Sales tax or other tax levied on a per subscription basis and collected by the grantee shall be deducted from the gross annual basic subscriber revenues in computing any sums due the city. The grantee shall provide an annual summary report showing gross annual basic subscriber revenues received during the preceding year. City shall have the option, at its expense, of auditing the necessary records of grantee to determine compliance with this section.

Section 12. Indemnification of City. (a) The grantee shall at all times protect and hold the city harmless from all claims, actions, suits, liability, loss, expense or damages of every kind and description, including investigation costs, court costs, and reasonable attorney’s fees, which may accrue to or be suffered or claimed by any person or persons arising out of the negligence of the grantee in the ownership, construction, repair, replacement, maintenance and operation of the cable television system and by reason of any license, copyright, property right or patent of any article or system used in the construction or use of the system, provided the city gives the grantee prompt notice of any such clams, actions, and suits, without limitation, in writing. The grantee shall maintain full force and effect during the life of any franchise, public liability and property damage insurance for an amount of at least $300,000 single limit liability from the time of commencement of construction of the CATV system. Grantee shall have on file with the city at all times a certificate of insurance showing compliance with this section.

(b)    All such insurance may contain reasonable deductible provisions not to exceed $1,000 for any type of coverage. The city may require that any and all investigation of claims made by any person against the city arising out of any use or misuse of privileges granted to the grantee hereunder shall be made by, or at the expense of the grantee or its insurer. The grantee may bring its obligations to carry any insurance required hereby within the coverage of any so-called blanket policy or policies of insurance now or thereafter carried, by appropriate amendment, endorsement or otherwise, provided however, the interests of the city shall be as fully protected thereby as if the grantee had obtained individual policies of insurance.

Section 13. Procedures. (a) Any proceeding or other action to be taken or proposed to be taken by the city in regard to the operation of the grantee, other than actions of an emergency nature, shall be taken only after 15 days written notice to the grantee of such action or proposed action, and the grantee has been given an opportunity to response in writing and at any hearing which may be specified by the city.

(b)    The notice required by this section shall state clearly the action or proposed action to be taken, the time provided for response and the person or persons in authority to whom such responses should be addressed, and such other procedures as may be specified by the city. If a hearing is to be held, the notice shall give the date and the time of such hearing, whether public participation will be allowed and the procedures by which such participation may be obtained. The company shall be a necessary party to any hearing conducted in regard to its operations.

Section 14. Procedure Upon Termination. Upon expiration of the franchise, if the grantee shall not have acquired an extension renewal thereof and accepted the same, it may have and it is hereby granted, the right to enter upon the streets or other property of the city, for the purpose of removing therefrom any or all of its property or otherwise. In so removing the property, the grantee shall refill, at its expense, any excavation that it shall make and shall leave the streets in as good conditions as that prevailing prior to the grantee’s removal of its property.

Section 15. Approval of Transfer. The grantee shall not sell or transfer its plant or system to another, other than a person controlling, controlled by or under common control with the grantee, nor transfer any rights under this franchise to another without council approval. No sale or transfer of the grantee’s assets used in the performance of this franchise shall be effective until the vendee, assignee or lessee has filed in the office of the city clerk an instrument duly executed reciting the fact of such sale, assignment or lease, accepting the terms of the franchise and agreeing to perform all the conditions thereof. Such council approval shall not be unreasonably withheld and neither the section nor other sections of this franchise shall preclude the mortgaging, hypothecating, or assigning of rights in the system or the pledge of stock by the grantee for the purpose of financing.

Section 16. Miscellaneous Provision. (a) When not otherwise prescribed herein, all matters herein required to be filed with the city shall be filed with the city clerk.

(b)    The grantee shall assume the cost of publication of this franchise ordinance when such publication is required by law. A bill for publication costs shall be presented to the grantee by the city clerk.

(c)    The grantee shall provide without charge one outlet of basic CATV service to each governmental office building, fire station, police station, and public school building that is passed by its cable. The distribution of the cable facility inside such buildings and the extent thereof shall be at the option, duty and expense of the building owner.

(d)    In the case of any emergency or disaster, the grantee shall, upon request of the city make available its facilities to the city for emergency use during the emergency or disaster period.

Section 17. Compliance with Applicable Laws and Ordinances. The grantee shall at all times during the life of this franchise be subject to all lawful exercise of the police power by the city. The city reserves the right to adopt from time to time in addition to the provisions herein contained such ordinances as may be necessary to the exercise of police power. Such regulations shall be reasonable and not in derogation of the rights herein granted, nor in conflict with the laws of the state or other local federal laws or regulations.

Section 18. Violations; Penalties. (a) From and after the effective date of this ordinance, it shall be unlawful for any person to construct, install or maintain within any public street in the city, or within any other public property of the city, or within any privately-owned area within the city which has not yet become a public street, but is designated or delineated as a proposed public street on any tentative subdivision map approved by the city, any equipment or facilities for distributing any television signals or radio signals through a CATV system, unless a franchise authorizing such use of such street or property or area has first been obtained, and unless such franchise is in full force and effect.

(b)    It shall be unlawful for any person to make any unauthorized connection, whether physically, electrically, acoustically, inductively, or otherwise, with any part of the franchised CATV system within this city for the purpose of enabling anyone to receive any television signal, radio signal, picture, sound, or other transmission, without payment to the grantee.

(c)    It shall be unlawful for any person, without the consent of the owner, willfully to tamper with, remove or injure any cables, wires or equipment used for distribution of television signals, radio signals, pictures, sound or other transmission.

(d)    Any person violating or failing to comply with any of the provisions of this sections hall be guilty of a misdemeanor and for each day of violation or failure to comply may be punished by a fine not to exceed $100, imprisonment for a term of not to exceed 30 days, or both.

Section 19. Line Severing. If at any time the grantee’s cable and/or other equipment is disturbed, damaged, or severed, the cost of repair shall be paid by the party responsible for the damage. The grantee may charge the responsible party for the time and materials expended for repair of the damage. The city will cooperate with the grantee to assist in enforcing any charge or penalty arising from cable severing or other damage to grantee’s property.

Section 20. Separability. If any part of this ordinance is for any reason held invalid by the decision of any court or regulatory body of competent jurisdiction, such decision shall not affect the validity of the remaining portions. The invalidity of any portion of this ordinance shall not abate, reduce or otherwise affect any consideration or other obligation required of the grantee. All ordinances and parts of ordinances in conflict with the provisions of this ordinance are hereby repealed.

Section 21. Termination. The city shall have the power to terminate the franchise of grantee for substantial violations of the provisions of this ordinance; provided however, grantee shall have the opportunity for a due process hearing before the city council before any such action is taken by the council. Grantee shall be given the minimum of 15 days written notice of the date and place of hearing, shall have an opportunity to respond in writing prior to the hearing, to attend the council meeting in person and by attorney, and to cross-examine all witnesses.

(00-00-00)

ORDINANCE NO. 2003-12

AN ORDINANCE GRANTING AQUILA, INC., D/B/A AQUILA NETWORKS, A DELAWARE CORPORATION, ITS SUCCESSORS AND ASSIGNS, A NATURAL GAS FRANCHISE AND THE AUTHORITY TO CONSTRUCT, OPERATE, MAINTAIN, AND EXTEND A NATURAL GAS DISTRIBUTION PLANT AND SYSTEM, AND GRANTING THE RIGHT TO USE THE STREETS, ALLEYS, AND OTHER PUBLIC PLACES WITHIN THE PRESENT OR FUTURE CORPORATE LIMITS OF THE CITY OF NICKERSON, KANSAS.

Section 1. Franchise Granted. The City of Nickerson, Kansas, (hereinafter referred to as “Grantor”) hereby grants a non-exclusive franchise to Aquila, Inc, d!b/a Aquila Networks, a Delaware corporation, (hereinafter called “Grantee), its lessees, successors and assigns. Grantee is hereby granted the right, privilege, franchise, permission and authority to lay, construct, install, maintain, operate and extend in, along, over or across the present and future streets, alleys, avenues, bridges, public rights-of-way and public places as are now within the present or future limits of said Grantor, a natural gas distribution system and all facilities necessary for the purpose of supplying natural gas or processed gas for all purposes to the inhabitants of said Grantor and consumers in the vicinity thereof; and for the distribution of natural gas from or through said Grantor to points beyond the limits thereof. Such facilities shall include, but not be limited to, all mains, services, pipes, conduits and appliances necessary or convenient for transmitting, transporting, distributing and supplying natural gas for all purposes for which it may be used, and to do all other things necessary and proper in providing natural gas service to the inhabitants of Grantor and in carrying on such business.

Section 2. Term. The rights and privileges granted by this Ordinance shall remain in effect for a period often (10) years from the effective date thereof and for an additional ten (10) years thereafter unless Grantor, through its Clerk, shall notify Grantee in writing at least one hundred and eighty (180) days before the expiration of the initial term, that Grantor, for good cause relating to default of any material obligations hereunder, desires not to renew the franchise and such notice shall specify Grantor’s reasons.

Section 3. Franchise Fees. In exchange for the franchise granted herein, Grantee shall collect from its customers, located within the corporate limits of the City of Nickerson, and pay to the Grantor an amount equal to five (5) percent of gross receipts derived from the sale, distribution or transportation of natural gas delivered within the present or future limits of the Grantor. Gross receipts as used herein are revenues received from the sale, distribution or transportation of natural gas, after adjustment for the net write-off of uncollectible accounts and corrections of bills theretofore rendered.

The amount paid by Grantee shall be in lieu of, and Grantee shall be exempt from, all other occupation, license, excise or right-of-way permit fees or taxes which the Grantor may impose for the rights and privileges herein granted or for the privilege of doing business within the City of Nickerson, and in the event any such fee, charge, license, tax or assessment shall be imposed by the Grantor, the payment to be made in accordance with the provisions of this section shall be reduced in an amount equal to the annual burden of such fee, charge, license, tax or assessment imposed upon the Grantee. Ad valorem property taxes imposed generally upon all real and personal property within the City of Nickerson shall not be deemed to affect the obligation of the Grantee under this section.

Any consideration hereunder shall be reported and paid to the Grantor by Grantee on a quarterly basis. Such payment shall be made not more than thirty (30) days following the close of the period for which payment is due. Initial and final payments shall be prorated for the portion of the period at the beginning and end of the term of this Ordinance.

Grantee shall list the local franchise fee collected from customers as a separate item on bills for utility service issued to customers. If at any time the Kansas Corporation Commission, or other authority having proper jurisdiction, prohibits such recovery, then Grantee will no longer be obligated to collect and pay the franchise fee herein contemplated. In addition, Grantee may discount or reduce the franchise fee payable for natural gas delivered to a specific customer of Grantee when it is required to reduce the franchise fee to retain the business of that customer. Modification or reduction of the franchise fee should occur if the franchise fee would cause the customer to cease purchase or transportation deliveries of natural gas from the Grantee by installing equipment to access gas supply not subject to the Grantor’s franchise fee.

The Grantor shall provide copies of annexation ordinances to Grantee on a timely basis to ensure appropriate franchise fee collection from customers within the corporate limits of the City.

Grantor shall have access to and the right to examine during normal business hours, those of Grantee’s books, receipts, files, records and documents that are necessary to verify the correctness of payments due hereunder. If it is determined that a mistake was made in the payment of any franchise fee required hereunder, such mistake shall be corrected promptly upon discovery, such that any under-payment by Grantee shall be paid within 30 days of the recalculation and any over-payment by Grantee shall be discounted from the next payment(s) due.

Upon ninety (90) days written request by Grantor, the franchise fee may be reviewed, modified, or changed by Grantor five years following the effective date of this ordinance and every five (5) years thereafter until the end of the term as herein defined. Any modification or change of the franchise fee must be acceptable in form and substance to Grantee and provided by ordinance in accordance with Kansas law.

Section 4. Governing Rules and Regulations. This Ordinance is granted subject to all conditions, limitations and immunities now provided for, or as hereafter amended, and applicable to the operations of a public utility, by State or Federal law. The rates to be charged by Grantee for service within the present or future corporate limits of Grantor and the rules and regulations regarding the character, quality and standards of service to be furnished by Grantee shall be under the jurisdiction and control of such regulatory body or bodies as may, from time to time, be vested by law with authority and jurisdiction over the rates, regulations and quality and standards of service to be supplied by Grantee. Provided however, should any judicial, regulatory or legislative body, having proper jurisdiction, take any action that precludes Grantee from recovering from its customers any cost associated with services provided hereunder, then Grantee and Grantor shall renegotiate the terms of this Ordinance in accordance with the action taken, so as to allow Grantee to be made whole economically. In determining the rights and duties of the Grantee, the terms of this franchise Ordinance shall take precedence over any conflicting terms or requirements contained in any other Ordinance enacted by the Grantor.

If an energy supplier is unable to furnish an adequate supply of energy due to an emergency, an order or decision of a public regulatory body, or other acts beyond the control of the Grantee, then the Grantee shall have the right and authority to adopt reasonable rules and regulations limiting, curtailing or allocating extensions of service or supply of energy to any customers or prospective customers, and withholding the supply of energy to new customers, provided that• such rules and regulations shall be uniform as applied to each class of customers or prospective customers, and shall be non-discriminatory as between communities receiving service from the Grantee.

Section 5. Construction and Maintenance of Company Facilities. Any pavements, sidewalks or curbing taken up and any and all excavations made shall be done in such a manner as to cause only such inconvenience to the inhabitants of Grantor and to the general public as is reasonably necessary; and repairs and replacements shall be made promptly by Grantee, leaving such properties in as good as condition as existed immediately prior to excavation.

Grantee agrees that for the term of this grant, it will use its best efforts to maintain facilities and equipment sufficient to meet the current and future energy requirements of Grantor, its inhabitants and industries. While maintaining its facilities and equipment, Grantee shall obtain permits as required by ordinance, except that in emergency situations, Grantee shall take immediate unilateral actions as it determines are necessary to protect the public health, safety, and welfare; in which case, Grantee shall notify Grantor as soon as reasonably possible.

Grantor will give Grantee reasonable notice of plans for street improvements where paving or resurfacing of a permanent nature is involved that affect Grantee’s facilities. The notice shall contain the nature and character of the improvements, the rights-of-way upon which the improvements are to be made, the extent of the improvements and the time when the Grantor will start the work, and, if more than one right-of-way is involved, the order in which this work is to proceed. The notice shall be given to the Grantee a sufficient length of time, considering seasonable working conditions, in advance of the actual commencement of the work to permit the Grantee to make any additions, alterations, or repairs to its facilities.

Section 6. Extension of Company Facilities. Upon receipt and acceptance of a valid application for service, Grantee shall, subject to its own economic feasibility criteria, make reasonable extensions of its distribution facilities to serve customers located within the current or future corporate limits of Grantor.

Section 7. Relocation of Company Facilities. If Grantor elects to change the grade of or otherwise alter any street, alley, avenue, bridge, public right-of-way or public place for a public purpose, Grantee, upon reasonable notice from Grantor, shall remove and relocate its facilities or equipment situated in the public rights-Of-way, if such removal is necessary to prevent interference and not merely for the convenience of the Grantor, at the cost and expense of Grantee. If Grantor orders or requests Grantee to relocate its facilities or equipment for the primary benefit of a commercial or private project, or as a result of the initial request of a commercial or private developer or other non-public entity, and such removal is necessary to prevent interference and not merely for the convenience of the Grantor or other right-of-way user, Grantee shall receive payment for the cost of such relocation as a precondition to relocating its facilities or equipment. Grantor shall consider reasonable alternatives in designing its public works projects so as not arbitrarily to cause Grantee unreasonable additional expense in exercising its authority under this section. Grantor shall also provide a reasonable alternative location for Grantee’s facilities. Grantor shall give Grantee written notice of vacating of a public right-of-way. Vacating of a public right-of-way shall not deprive the Grantee of its right to operate and maintain existing facilities, until the reasonable cost of relocating the same are first paid to the Grantee.

Any person or corporation desiring to move a building or other structure along, or to make any unusual use of any street, alley, avenue, bridge, public right-of-way or public place which shall interfere with the facilities or equipment of the Grantee, shall first give notice to the Grantor and the Grantee and pay a sum sufficient to cover the expense and damage incident to the moving of Grantee’s facilities and equipment.

Section 8. Confidential Information. Grantor acknowledges that certain information it might request pursuant to this franchise may be of a proprietary and confidential nature. If Grantee requests that any information provided by Grantee to Grantor be kept confidential due to such proprietary or commercial value, Grantor and its employees, agents, and representatives shall maintain the confidentiality of that information, to the extent allowed by law. If Grantor is requested or required by legal or administrative process to disclose any such confidential information, Grantor shall promptly notify Grantee of such request or requirement so that Grantee may seek an appropriate protective order or other relief. Grantor shall use all reasonable efforts to ensure that the confidentiality of Grantee’s confidential information is maintained.

Section 9. Force Majeure. It shall not be a breach or default under this franchise if either party fails to perform its obligations hereunder due to Force Majeure. Force Majeure shall include, but not be limited to, the following: I) physical events such as acts of God, landslides, lightning, earthquakes, fires, freezing, storms, floods, washouts, explosions, breakage or accident or necessity of repairs to machinery, equipment or distribution or transmission lines; 2) acts of others such as strikes, work-force stoppages, riots, sabotage, insurrections or wars; 3) governmental actions such as necessity for compliance with any court order, law, statute, ordinance, executive order, or regulation promulgated by a governmental authority having jurisdiction; and any other causes, whether of the kind herein enumerated or otherwise not reasonably within the control of the affected party to prevent or overcome. Each party shall make reasonable efforts to avoid Force Majeure and to resolve such event as promptly as reasonably possible once it occurs in order to resume performance; provided, however, that this provision shall not obligate a party to settle any labor strike.

Section 10. Hold Harmless. Grantee, during the term of this Ordinance, agrees to save harmless Grantor from and against all claims, demands, losses and expenses arising directly out of the negligence of Grantee, its employees or agents, in the constructing, operating, and maintaining of distribution and transmission facilities or appliances of Grantee; provided, however, that Grantee need not save harmless Grantor from claims, demands, losses and expenses arising out of the negligence of Grantor, its employees or agents.

Section 11. Severability. If any clause, sentence or section of this Ordinance is deemed invalid by any judicial, regulatory or legislative body having proper jurisdiction, the remaining provisions shall not be affected.

Section 12. Non-Waiver. Any waiver of any obligation or default under this franchise shall not be construed as a waiver of any future defaults, whether of like or different character.

Section 13. Repeal of Conflicting Ordinances. This ordinance, when accepted by Grantee as provided below, shall constitute the entire agreement between the Grantor and the Grantee relating to this franchise and the same shall supersede all prior ordinances pertaining to this franchise agreement, and any terms and conditions of such prior ordinances or parts of ordinances in conflict herewith are hereby repealed. Ordinance No. 680 of the City of Nickerson, Kansas, is hereby repealed as of the effective date hereof.

Section 14. Effect and Interpretation of Ordinance. The captions which precede each section of this ordinance are for convenience in reference only and shall not be taken into consideration in the interpretation of any of the provisions of this ordinance.

Section 15. Effective Date and Acceptance. This Ordinance shall become effective and be a binding contract between the Grantor and Grantee, upon its final passage and approval by Grantor, in accordance with applicable laws and regulations, and upon acceptance by Grantee by written instrument within sixty (60) days of passage by the governing body, and filed with the City Clerk of the City of Nickerson, Kansas. The City Clerk shall sign and affix the community seal to acknowledge receipt of such acceptance, and return one copy to Grantee. If Grantee does not, within sixty (60) days following passage of this Ordinance express in writing its objections to any terms or provisions contained therein, or reject this ordinance in its entirety, Grantee shall be deemed to have accepted this ordinance and all of its terms and conditions.

Section 16. Notices. Any notices required to be given hereunder shall be sent to the following:

If to Grantee: Community Relations Manager

Aquila Networks

110 E. 9th Street

Lawrence, KS 66044

If to Grantor: City Clerk

City of Nickerson

PO Box 52

Nickerson, KS 67561

(11-03-03)

ORDINANCE NO. 2007-01

A CONTRACT FRANCHISE ORDINANCE GRANTED TO SOUTHWESTERN BELL TELEPHONE, L.P., A TELECOMMUNICATIONS LOCAL EXCHANGE SERVICE PROVIDER PROVIDING LOCAL EXCHANGE SERVICE WITHIN THE CITY OF NICKERSON, KANSAS.

Section 1. Pursuant to K.S.A. 2005 Supp. 12-2001, a contract franchise ordinance is hereby granted to Southwestern Bell Telephone L.P. d/b/a AT&T Kansas (“AT&T Kansas), a telecommunications local exchange service provider providing local exchange service within the City of Nickerson, Kansas (“City”), subject to the provisions contained hereafter. The initial term of this contract franchise ordinance shall be for a period of two (2) years beginning August 1, 2007, and ending July 31, 2009. Thereafter, this contract franchise ordinance will automatically renew for additional one (1) year terms, unless either party notifies the other party of its intent to terminate the contract franchise ordinance at least ninety (90) days before the termination of the then current term. The additional term shall be deemed a continuation of this contract franchise ordinance and not as a new contract franchise ordinance or amendment. Pursuant to K.S.A. 2005 Supp. 12-2001(b)(2) under no circumstances shall this contract franchise ordinance exceed twenty (20) years from the effective date of the contract franchise ordinance. Compensation for said contract franchise ordinance shall be established pursuant to Section 3 of this ordinance.

Section 2. For the purpose of this contract franchise ordinance, the following words and phrases and their derivations shall have the following meaning:

(a)    “Access line” - shall mean and be limited to retail billed and collected residential lines; business lines; ISDN lines; PBX trunks and simulated exchange access lines provided by a central office based switching arrangement where all stations serviced by such simulated exchange access lines are used by a single customer of the provider of such arrangement. Access line may not be construed to include interoffice transport or other transmission media that do not terminate at an end user customer’s premises, or to permit duplicate or multiple assessment of access line rates on the provision of a single service or on the multiple communications paths derived from a billed and collected access line. Access line shall not include the following: Wireless telecommunications services, the sale or lease of unbundled loop facilities, special access services, lines providing only data services without voice services process by a telecommunications local exchange service provider or private line service arrangements.

(b)    “Access line count” - means the number of access lines serving consumers within the corporate boundaries of the city on the last day of each month.

(c)    “Access line fee” - means a fee determined by a city, up to a maximum as set out in K.S.A. 2005 Supp. 12-2001 and amendments thereto, to be used by a telecommunications local exchange service provider in calculating the amount of access line remittance.

(d)    “Access line remittance” - means the amount to be paid by a telecommunications local exchange service provider to a city, the total of which is calculated by multiplying the access line fee, as determined in the city, by the number of access lines served by that telecommunications local exchange service provider within that city for each month in that calendar quarter.

(e)    “Gross receipts” - means only those receipts collected from within the corporate boundaries of the city enacting the franchise and which are derived from the following:

(1)    Recurring local exchange service for business and residence which includes basic exchange service, touch tone, optional calling features and measured local calls;

(2)    Recurring local exchange access line services for pay phone lines provided by a telecommunications local exchange service provider to all pay phone service providers;

(3)    Local directory assistance revenue;

(4)    Line status verification/busy interrupt revenue;

(5)    Local operator assistance revenue; and

(6)    Nonrecurring local exchange service revenue which shall include customer service for installation of lines, reconnection of service and charge for duplicate bills. All other revenues, including, but not limited to, revenues from extended area service, the sale of lease of unbundled network elements, non-regulated services, carrier and end user access, long distance, wireless telecommunications services, lines providing only data service without voice services processed by a telecommunications local exchange service provider, private line service arrangements, internet, broadband and all other services not wholly local in nature are excluded from gross receipts. Gross receipts shall be reduced by bad debt expenses. Uncollectible and late charges shall not be included within gross receipts. If a telecommunications local exchange service provider offers additional services of a wholly local nature which if in existence on or before July 1, 2002, would have been included with the definition of gross receipts, such services shall be included from the date of the offering of such services in the city.

(f)    “Local exchange service” - means local switched telecommunications service within any local exchange service area approved by the state corporation commission, regardless of the medium by which the local telecommunications service is provided. The term local exchange service shall not include wireless communication services.

(g)    “Telecommunications local exchange service provider” - means a local exchange carrier as defined in subsection (h) of K.S.A. 66-1,187, and amendments thereto, and a telecommunications carrier as defined in subsection (m) of K.S.A. 66-1,187, and amendments thereto, which does, or in good faith intends to, provide local exchange service: The term telecommunications local exchange service provider does not include an interexchange carrier that does not provide local exchange service, competitive access provider that does not provide local exchange service or any wireless telecommunications local exchange service provider.

(h)    “Telecommunications services” - means providing the means of transmission, between or among points specified by the user, of information of the user’s choosing, without change in the form or content of the information as sent and received.

Section 3. Compensation made pursuant to this contract franchise ordinance shall be paid on a quarterly basis without invoice or reminder from the City and paid not later than forty-five (45) days after the end of the remittal period. For the first year of this contract franchise ordinance, said compensation shall be a sum equal to [$______ per access line][_____ percent (5%) of gross receipts]. Thereafter, compensation for each calendar year of the remaining term of the contract franchise ordinance shall continue to be based on a sum equal to [$_____ per access line][_____ percent (5%) of gross receipts]; unless the City notifies AT&T Kansas prior to ninety days (90) before the end of the calendar year that it intends to increase or decrease the percentage of gross receipts for the following calendar year or that it intends to switch to an access line fee for the following calendar year. In the event City elects compensation based on an access line fee, nothing herein precludes City from switching back to a gross receipts fee provided City notifies AT&T Kansas prior to ninety days (90) before the end of the calendar year that it intends to elect a gross receipts fee for the following calendar year. Any increased access line fee or gross receipt fee shall be in compliance with the public notification procedures set forth in subsections (I) and (m) K.S.A. 2005 Supp. 12-2001.

Section 4. The City shall have the right to examine, upon written notice to the telecommunications local exchange service provider, no more than once per calendar year, those records necessary to verify the correctness of the compensation paid pursuant to this contract franchise ordinance.

Section 5. As a condition of this contract franchise ordinance, AT&T Kansas is required to obtain and is responsible for any necessary permit, license, certification, grant, registration or any other authorization required by any appropriate governmental entity, including, but not limited to, the City, the Federal Communications Commission (FCC) or the Kansas Corporation Commission (KCC), subject to AT&T Kansas’ right to challenge in good faith such requirements as established by the FCC, KCC or other City Ordinance. AT&T Kansas shall also comply with all applicable laws, statutes and/or ordinances, subject to AT&T Kansas’ right to challenge in good faith such laws, statutes and/or ordinances.

Section 6. Nothing herein contained shall be construed as giving AT&T Kansas any exclusive privileges, nor shall it affect any prior or existing rights of AT&T Kansas to maintain a telecommunications system within the City.

Section 7. AT&T Kansas shall collect and remit compensation as described in Section 3 on those access lines that have been resold to another telecommunications local exchange service provider.

Section 8. The City agrees to provide AT&T Kansas with notification in the event that it annexes property into the corporate boundaries of the City that would require AT&T Kansas to collect and pay a franchise fee on access lines or gross receipts which prior to the annexation of the property AT&T Kansas was not required to pay a franchise fee. The City agrees to provide AT&T Kansas with notification in the event the City renumbers or renames any streets that would require AT&T Kansas to collect and pay a franchise fee on access lines or gross receipts which prior to the renumbering or renaming of the streets AT&T Kansas would not have been required to pay a franchise fee. The City agrees that in the event the City does not provide AT&T Kansas with notice of an annexation or renumbering and/or renaming of the streets, AT&T Kansas is not liable to the City for payment of franchise fees on the annexation or renumbered and/or renamed streets prior to the City providing notice to AT&T Kansas of such.

Section 9. The City agrees that pursuant to K.S.A. 2005 Supp. 12-2001(j)(1) and (2) that the franchise fee imposed under this contract franchise ordinance must be assessed in a competitively neutral manner, may not unduly impair competition, must be nondiscriminatory and must comply with state and federal law.

Section 10. Any required or permitted notice under this contract franchise ordinance shall be in writing. Notice upon the City shall be delivered to the city clerk by first class United States mail or by personal delivery. Notice upon AT&T Kansas shall be delivered by first class United States mail or by personal delivery to:

Southwestern Bell Telephone L.P.

Cindy Zapletal

Director-External Affairs

1640 Fairchild Avenue, First Floor

Manhattan, Kansas 66502

Section 11. Failure to Enforce. The failure of either party to enforce and remedy any noncompliance of the terms and conditions of this contract franchise ordinance shall not constitute a waiver of rights nor a waiver of the other party’s obligations as provided herein.

Section 12. Force Majeure. Each and every provision hereof shall be subject to acts of God, fires, strikes, riots, floods, war and other disasters beyond AT&T Kansas’ or the City’s control.

Section 13. AT&T Kansas has entered into this contract franchise ordinance as required by the City and K.S.A. 2005 Supp. 12-2001. If any clause, sentence, section, or provision of K.S.A. 2005 Supp. 12-2001, and amendments thereto, shall be held to be invalid by a court of competent jurisdiction, either the City or AT&T Kansas may elect to terminate the entire contract franchise ordinance. In the event a court of competent jurisdiction invalidates K.S.A. 2005 Supp. 12-2001 and amendments thereto, if AT&T Kansas is required by law to enter into a contract franchise ordinance with the City, the parties agree to act in good faith in promptly negotiating a new contract franchise ordinance.

Section 14. In entering into this contract franchise ordinance, neither the City’s nor AT&T Kansas present or future legal rights, positions, claims, assertions or arguments before any administrative agency or court of law are in any way prejudiced or waived. By entering into the contract franchise ordinance, neither the City nor AT&T Kansas waive any rights, but instead expressly reserve any and all rights, remedies, and arguments the City or AT&T Kansas may have at law or equity, without limitation, to argue, assert, and/or take any position as to the legality or appropriateness of this contract franchise ordinance or any present or future laws, ordinances, and/or rulings which may be the basis for the City and AT&T Kansas entering into this contract franchise ordinance.

Section 15. The parties agree that in the event of a breach of this contract franchise ordinance by either party, the non-breaching party has the right to terminate the contract franchise ordinance immediately. Prior to terminating the contract franchise ordinance, the non-breaching party shall first serve a written notice upon the breaching party, setting forth in detail the nature of the breach, and the breaching party shall have thirty (30) days thereafter in which to cure the breach. If at the end of such thirty (30) day period the non-breaching party deems that the breach has not been cured, the non-breaching party may take action to terminate this contract franchise ordinance.

Section 16. This contract franchise ordinance is made under and in conformity with the laws of the State of Kansas. No such contract franchise ordinance shall be effective until the ordinance granting the same has been adopted as provided by law.

(05-08-07)