AN ORDINANCE, GRANTING TO KANSAS GAS AND ELECTRIC COMPANY, A KANSAS CORPORATION AND WHOLLY OWNED SUBSIDIARY OF WESTERN RESOURCES, INC., A KANSAS CORPORATION, ITS SUCCESSORS AND ASSIGNS, AN ELECTRIC 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.

Section 1. That in consideration of the benefits to be derived by the City of Towanda. Kansas, and its inhabitants, there is hereby granted to Kansas Gas and Electric Company, a Kansas Corporation and wholly owned subsidiary of Western Resources, Inc., a Kansas corporation, hereinafter sometimes designated as company, the company being a corporation operating a system for the transmission of electric current between two or more incorporated cities in the State of Kansas, into and through which it has built transmission lines, the right, privilege, and authority for a period of 10 years from the effective date of this ordinance, to occupy and use the several streets, avenues, alleys, bridges, parks, parkings, and public places of the city, for the placing and maintaining of equipment and property necessary to carry on the business of selling and distributing electricity for all purposes to the City of Towanda, Kansas, and its inhabitants, and through the city and beyond the limits thereof; to obtain said electricity from any source available; and to do all things necessary or proper to carry on said business in the City of Towanda, Kansas.

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 of its gross cash receipts from the sale of electric energy within the corporate limits of the 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 electric energy”. Other operating revenues include, but are not limited to, delayed payment charges, connection fees, disconnection and reconnection fees, collection fees and return check charges.

Section 3. In the event the company’s customers served within the area covered by this agreement are granted the right to purchase electricity from a provider other than the company, either party may, upon 30 days’ written notice to the other party, but no later than six months after such grant is effective, request that the franchise fee rate provided for herein be adjusted to reflect the modifications and resolutions of franchise fee issues adopted in the legislation which created the right of customers to obtain electricity from providers other than the company. The parties agree that, upon the giving and receipt of such notice, they will meet in good faith to negotiate any necessary changes to this agreement. However, if the parties are unable to reach an agreement within 90 days after the receipt of notice by the receiving party, either party may terminate this franchise. The company may terminate by giving written notice to the city; the city may exercise its option to terminate the franchise granted to the grantee by action of the governing body repealing this ordinance.

Section 4. That company, its successors and assigns, in the construction, maintenance, and operation of its electric transmission, distribution and street lighting 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 of Towanda, Kansas from any and all damage, injury and expense caused by the negligence of the company, its successors and assigns, or its or their agents or servants.

Section 5. That within 20 days from and after the passage and approval of this ordinance, company shall file the same with the State Corporation Commission.

Section 6. After the filing of this ordinance with the State Corporation Commission, company shall file with the city clerk of the City of Towanda, Kansas its unconditional written acceptance of this ordinance. The 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 60 days from its final passage, approval and publication as required by law, and acceptance by the company.

Section 7. 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 8. This franchise is granted pursuant to the provisions of K.S.A. 12-2001.

Section 9. That any and all ordinances or parts of ordinances in conflict with the terms hereof are hereby repealed.

Section 10. Should the State Corporation Commission take any action with respect to this franchise ordinance, which would or may preclude Kansas Gas and Electric Company, a Kansas Corporation and wholly owned subsidiary of Western Resources, Inc., a Kansas corporation, 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 11. 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, provided, however, that the franchise may be assigned by company without action by the city to any creditworthy entity which succeeds to all or substantially all of the electric utility business of the company. In the event of such assignment to a successor, company shall be released from all obligations which are assumed in writing by such successor and the assignee shall have executed an assumption of the franchise being assigned.

(6-28-2000)