Grantor is granted, pursuant to the option and express requirements of section 88 of the city charter, the option to purchase the distribution system then owned by grantee, its successors and assigns, together with all equipment functionally related thereto and being used to provide service under the exercise of this franchise, or acquired for such purpose, and situated within the incorporated limits of grantor (collectively "ONG property"). The option may only be exercised after fifteen (15) years from the effective date of this franchise and upon the following terms and following manner:
A. Not less than twelve (12) months prior to the expiration date of this franchise, grantor may determine its intention to purchase all of the ONG property located within the city limits of grantor. The board of commissioners of grantor shall within ten (10) days furnish to the corporate secretary of grantee, as notice of such intention to purchase, a certified copy of such official action; and thereafter the board of commissioners of grantor shall, within fifteen (15) days, contract for, engage, hire, appoint and designate as an appraiser ("city appraiser") an engineer of well known experience and ability who shall not be a resident or taxpayer of grantor nor directly or indirectly interested, as a shareholder, director, employee, contractor or otherwise, in grantee or any entity involved, or to become involved, in the analysis, management, or operation of gas facilities in Ponca City, within twelve (12) months prior to such appointment and at the time thereof; and grantor shall within ten (10) days after such appointment and designation notify grantee by furnishing to its corporate secretary a certified copy of the ordinance or resolution appointing such appraiser; and grantee shall within fifteen (15) days after the receipt of such certified copy appoint and designate as an appraiser ("ONG appraiser") an engineer of like qualifications and within ten (10) days after such appointment furnish to the city manager of grantor written notification of the appointment of such appraiser. The city appraiser and the ONG appraiser shall select as a third appraiser an engineer of like qualifications.
B. If the city and ONG appraisers shall, for more than fifteen (15) days, fail to agree upon the appointment of the third appraiser, or if either grantor or grantee shall fail or neglect to select its appraiser as herein required, then the district court of Kay County, state of Oklahoma, shall have the power upon application of either grantor or grantee, as the case may be, and pursuant to the provisions of the Oklahoma uniform arbitration act, 15 Oklahoma Statutes, 2001, section 801 et seq., to appoint such required appraiser or appraisers of like qualifications. The parties specifically contract and agree that venue shall lie in Kay County for any dispute that might arise under this arbitration provision shall be governed by the uniform arbitration act, as the same may from time to time be amended.
C. The three (3) appraisers shall thereupon proceed to determine the fair market value of all of the ONG property by such criteria as is provided by law. The three (3) appraisers shall make their return of the appraised value ("return") of all of the ONG property to grantor and grantee and file the return with the city clerk of grantor within ninety (90) days after the due appointment of the third appraiser, and the valuation so fixed by a majority of the appraisers on the return shall be binding and conclusive upon the grantor and grantee as to the purchase price of all of the ONG property.
D. After the final determination of the fair market value of the properties and property rights and the return filed as contemplated herein, an election shall be held on the first election date legally available to determine whether the exercise of this option shall be approved by the majority of the registered, qualified electors of the city of Ponca City voting thereon. Such approval must occur before such option shall be exercised by the payment of the purchase price. If the acquisition of all of the ONG property at the purchase price fixed by the return is not approved by a majority of the registered, qualified electors of grantor voting thereon, the notice of intention to purchase all of the ONG property by grantor shall be deemed null and void.
E. Upon approval of the exercise of this option by a majority of the registered, qualified electors, the parties shall forthwith file for, and make a good faith effort to obtain, any required approval ("regulatory approval") of the proposed purchase of the ONG property from any federal or state regulatory authority having jurisdiction over grantee or the ONG property being acquired. If regulatory approval cannot be obtained, this option to purchase the ONG property by grantor shall be deemed null and void.
F. The "closing date" scheduled for grantor's purchase of all of the ONG property shall be within one hundred twenty (120) days following entry of a final nonappealable order finding that regulatory approval for grantee to sell to grantor is granted or that no regulatory approval is required. If, between the date of the return and the closing date, any reasonable and necessary additions, betterments or replacements shall have been made by grantee, grantor shall pay, in addition to the purchase price fixed by the return, as provided in this section, the actual cost of such additions, betterments, and replacements. If such additions, betterments or replacements are made, grantee shall file with the city clerk of grantor complete information as to the actual cost thereof to grantee, not later than ten (10) business days prior to the closing date scheduled for grantor's purchase of all of the ONG property.
G. Notwithstanding any provision hereof to the contrary, the three (3) appraisers shall not include within the return any values for gas facilities of grantee within grantor's incorporated limits where the same are used exclusively for the provision of gas service to areas without such incorporated limits, such facilities shall not be part of the ONG property which may be purchased by grantor pursuant to its option as set forth herein, and if the purchase by grantor is completed in the manner provided herein, grantee shall have the right thereafter to own, operate and dispose of such gas facilities as its private property in such manner as it may see fit.
H. Time is of the essence to grantor's exercise of its purchase option privilege under this section. If grantor shall fail to complete its purchase of all of the ONG property by payment to grantee of the purchase price fixed by the return in cash at the closing date, then and in any such event grantor's option to purchase all of the ONG property shall thereupon expire and become null and void.
I. For the purpose of determining the valuation of the ONG property, all the books, records and other information in possession of grantee pertaining thereto shall be open and available to the three (3) appraisers during the time their appraisal is being made for the purpose of aiding the appraisers in fixing the purchase price to be paid therefor.
J. Each party shall pay its own appraiser's fees and expenses and the parties agree that fees and expenses of the third appraiser shall be divided and paid in equal amounts by grantor and grantee. (Ord. 6053, 5-9-2007)