Exhibit 10.41
ORDINANCE NO. 981
AN ORDINANCE GRANTING A FRANCHISE TO THE FLORIDA PUBLIC UTILITIES COMPANY, ITS
SUCCESSORS AND ASSIGNS, IN AND FOR THE CITY OF MARIANNA. FLORIDA. FOR A PERIOD
NOT TO EXCEED TEN (10) YEARS, FOR THE OPERATION AND DISTRIBUTION AND/OR SALE OF
ELECTRIC ENERGY AND FIXING THE TERM. CONDITIONS AND LIMITATIONS RELATIVE TO THE
OPERATION AND MAINTENANCE OF ELECTRIC UTILITIES; PROVIDING FOR INDEMNITY AGAINST
DAMAGE AND RESERVING THE RIGHT TO PURCHASE UNDER CERTAIN CONDITIONS.
BE IT ENACTED BY THE CITY COMMISSION OF THE CITY OF MARIANNA, FLORIDA:
SECTION 1. That the City of Marianna, Florida, (herein called the “Grantor”)
hereby grants to Florida Public Utilities Company, a Florida corporation (herein
called the “Grantee”), its successors and assigns for a term not to exceed ten
(10) years beginning from the date of acceptance hereof by Grantee except as
provided in Section 10, Section 14 and Section 17.
(a) The nonexclusive right, privilege and authority or franchise to construct or
otherwise acquire and to own, maintain, equip and operate plants and works and
all necessary or desirable appurtenances thereto according to the latest edition
of the National Electric Safety Code as prescribed by the Bureau of Standards,
for the manufacture, generation, purchase, transmission, distribution, supply
and sale of electric energy and to use and occupy the present and future streets
and other public places including avenues, roads, alleys, lanes, bridges, parks
and ways within the present and any future corporate limits of Grantor or its
successors for erecting, constructing, installing, maintaining, renewing,
replacing, repairing, owning and operation all necessary facilities including
poles, polelines, appendages thereto, used or useful for the purpose of
transmitting electric energy and for distributing, supplying and selling
electric energy to Grantor and its successors and to persons and corporate
inhabitants thereof, as well as to persons and corporations beyond the present
or future corporate limits of Grantor.

 

 

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(b) The Grantor shall have the first option to purchase the property of Grantee
within the City of Marianna at any time the Grantee elects to sell during
franchise period.
(c) It is expressly understood and agreed that if any pole or poles erected by
Grantee shall unreasonable interfere with the rights of public or private
abutting property owners, that upon due protest in writing by such owner, the
Grantee shall relocate said pole or poles at some satisfactory point, at its own
expense.
SECTION 2. At all time during the term of this franchise. Grantee shall promptly
and without discrimination furnish an adequate supply of electric energy at
standard voltage within approved limits to Grantor and its successors, and to
persons and corporate inhabitants thereof who request the same and agree to
abide by Grantee’s reasonable rules and regulations. Grantee shall use due care
to construct and maintain its facilities in a manner that will not unreasonably
interfere with the proper use by the public of the streets and other public
places of the Grantor and shall use care and caution in making any opening in
any of the streets and other public places of Grantor for the purpose of
erecting, repairing and/or maintaining its facilities to prevent injury to
persons and property, and Grantee shall, at its expense, replace and restore all
streets and other public places so opened to their former conditions as nearly
as practicable and within a reasonable time. No first class streets or any other
street that has been built or resurfaced in the last five years shall be opened
for the purpose of installing underground service without written approval of
the City Manager.

 

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SECTION 3. At all times during the term of this franchise. Grantee shall make
promptly such extensions to existing facilities as may be required by one or
more customers, or for the prospective customers, in accordance with Grantee’s
rules and regulations on file and approved by the Florida Public Service
Commission. Grantee shall not be liable for any interruption of service of
failure of supply of electric energy due to accidents unconnected with
negligence on the part of Grantee, its agents or assigns, or to causes beyond
the reasonable control of Grantee and such interruptions shall not constitute a
breach of this franchise, provided Grantee shall use diligence to restore
service within a reasonable time.
SECTION 4. All rates and rules and regulations established by Grantee from time
to time shall at all times be reasonable, and Grantee’s rates for electricity
shall at all times be subject to such regulation as may be provided by law.
SECTION 5. Without prejudice to any other rights of Grantee, any person who
shall willfully and unlawfully remove or damage any of the property, equipment
and/or appliances of Grantee, used or useful in rendering such public service,
shall be fined in the sum of not more than One Thousand and No/100 ($1000.00)
Dollars for such each property or equipment or part thereof so removed or
damaged.
SECTION 6. All rights herein granted and authorized shall he subject to and
governed by this ordinance, the laws of the State of Florida and applicable
regulations and rulings of the Florida Public Service Commission or its
successors, provided that Grantor expressly reserves unto itself all of its
police power to adopt general ordinances necessary to protect the safety and
welfare of the general public in relation to the rights hereby granted not
inconsistent with the provisions of this ordinance.

 

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SECTION 7. Grantee shall save and keep Grantor harmless from any and liability
by reason of damage or injury to any person or property whatsoever on account of
the negligence of Grantee in the installation, maintenance and operation of its
facilities; provided, Grantee shall have been notified by Grantor, in writing,
of any claim against Grantor on account thereof, and shall have ample
opportunity to defend same.
SECTION 8. Grantee shall install and maintain meters for measuring electric
current and shall have the right of ingress and egress to the premises of each
consumer, from time to time, for the purpose of reading, repairing, testing and
maintaining Grantee’s meters and appurtenances. Such meters and appurtenances
shall at all times remain the property of the Grantee and shall be removable at
any time.
SECTION 9. Within thirty (30) days after the last day of each month after the
approval of this grant, the Grantee, or its successors or assigns shall pay to
the Grantor, or its successors, at Grantor’s option, as part of the
consideration for the granting of this franchise, a sum equal to an amount of 6%
of the gross sales of electricity within the City of Marianna for the preceding
month.

 

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SECTION 10. The Grantor hereby reserves the right at and after expiration or
termination of this grant to purchase the property of Grantee within the City of
Marianna, and, as a condition precedent to the taking effect of this grant,
Grantee shall give and grant to Grantor, and, by its acceptance hereof, Grantee
shall conclusively be deemed to have given and granted to Grantor, the right to
purchase so reserved. The purchase price of the property shall be determined by
three (3) qualified appraisers with expertise in arriving at valuation of
electric companies and all of their component parts; one appraiser being
appointed by the City Commission of the City of Marianna, one appraiser
appointed by Florida Public Utilities, and the two thus appointed shall appoint
a third appraiser. The final price to be paid for the system is to be the fair
market value decided by the majority vote of the three appraisers. If either
Grantor or Grantee does not appoint an appraiser within sixty (60) days after
being requested to do so, the appraisal shall be made by the appraisal firm
appointed by the other, and their appraisal shall be the purchase price to be
paid by the City.
The Grantee shall be responsible for the cost incurred by its appraiser, the
Grantor will be responsible for the cost incurred by its appraiser, and the
Grantor and Grantee shall share equally in the cost of the third appraiser.
The Grantor will notify the Grantee, in writing, at least six (6) months prior
to the expiration date of this franchise, or any extension thereof, of Grantor’s
intent to exercise the purchase option hereby reserved; Grantor shall thereafter
close on such purchase within twenty four (24) months after referendum to
approve purchase of system, or shall be deemed to have waived its right to so
purchase the system unless said delay is due to conduct and actions of Grantee.
The Grantor may at its option exercise its right to purchase Grantee’s property
pursuant to the above procedure, or pursue condemnation as outlined in Florida
Statutes Chapter 73.

 

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SECTION 11. Grantee by its acceptance hereof agrees to observe, perform, and
keep all of the agreements, undertakings and conditions hereof to be observed,
performed and kept by Grantee.
SECTION 12. In consideration of Grantee’s undertaking hereunder as evidenced by
its acceptance hereof, Grantor agrees not to engage in the business of
distributing and selling electric energy during the life of this franchise or
any extension thereof in competition with Grantee, its successors and assigns
however this provision shall not prohibit the Grantor from providing electrical
energy and capacity for its own use.
SECTION 13. Grantee by the acceptance hereof further agrees to erect and
maintain without cost, except for electric energy to be charged according to the
published rates of Grantee (which rates include a facilities, maintenance and
energy charge), such street lights as the Grantor shall from time to time
consider necessary and proper to meet the reasonable needs of the Grantor for
lighting streets and other public ways. It being expressly understood, however,
that in the event said Grantor shall request the erecting or placing of any
particular light and shall subsequently request the discontinuance of said light
prior to the expiration of this franchise, the Grantor shall reimburse the
Grantee for its expense in the erection and removing of such discontinued light.
The intention being that the Grantee will make any just and reasonable extension
of its electric light system which may be requested by the Grantor commensurate
with a fair and compensatory return on the fair market value of the property
used and useful in furnishing such extension.

 

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SECTION 14. At least twelve (12) months prior to the expiration date of the
Generation Services contract, Grantee will provide Grantor written notice of the
expiration of the contract. Should Grantor desire to participate in the process
of securing a new Generation Services contract, the Grantor will provide notice,
in writing, to Grantee. If required, the Grantee and Grantor shall meet and
review the proposals, in accordance with any confidentiality agreements from
prospective bidders, for future contracts. The Grantee may employ a consultant
for the purposes of conducting a bidding process, evaluating all proposals and
determining the best Generation Services supplier.
Prior to entering into any Generation Services contract, Grantee, if requested
in writing, shall provide Grantor with a copy of the consultant’s report in
accordance with any confidentiality agreements, whereupon Grantor shall have a
period of thirty (30) days to review the same and make its recommendations, if
any, to Grantee, which such recommendations the Grantee shall consider in
contracting for Generation Services.
If during the term of an existing generation services contract, any material
terms of the contract are altered, the Grantee shall notify the Grantor and the
Grantor shall have the opportunity to review proposed revisions and advise the
Grantee of concerns prior to the acceptance of the proposed new terms by the
Grantee.
Failure to comply with this Section shall constitute a default by the Grantee
and the Grantor shall have the option to terminate this agreement pursuant to
terms of Section 10.

 

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At least twelve (12) months prior to the expiration date of the Transmission
Network Operating Agreement(s), Network Integration Transmission Service
Agreement(s) and Distribution Facilities Agreement, Grantee will provide Grantor
written notice of the expiration of the contract. Should Grantor desire to
participate in the process of securing a transmission agreements, the Grantor
will provide notice, in writing, to Grantee. If required, the Grantee and
Grantor shall meet and review the proposal(s) in accordance with the Open Access
Transmission Tariffs, as approved by the Federal Energy Regulatory Commission,
to ensure compliance of each proposal. The Grantee may employ a consultant for
the purposes of evaluating the proposal(s) in accordance with the Open Access
Transmission Tariff and negotiating and necessary modifications. Grantee will
make available the consultants report to the Grantor in conjunction with the
discussions as noted above.
SECTION 15. The Grantor shall have the right at any time to employ an
independent auditor to audit any records of Grantee which applies to expenses
and/or rates of electricity in Marianna, Florida. The Grantee hereby agrees to
cooperate in every way possible with an auditor employed by the Grantor. Any
auditor employed by the Grantor shall be a certified public accountant, licensed
in the State of Florida.
SECTION 16. The Grantor has requested Grantee to place all electric facilities
underground in an area of downtown Marianna in order to enhance the appearance
of the Marianna Main Street area. The areas to be included are as follows:
(a) Madison Street between Market St. and Lafayette St.

(b) Green Street between Clinton St. and Lafayette St.

(c) Market Street between Caledonia St. and Madison St.

(d) Streets immediately adjacent to the Jackson County Courthouse.
Facilities will be placed underground by Grantee in conjunction with the City of
Marianna’s water system construction project that will be conducted in this
area. Grantee will provide all labor and material including, but not limited to,
underground conduit to have a standard underground type system using padmounted
transformers installed in the above-mentioned area. The following conditions
will also apply to the project.

 

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(a) Grantee’s customers will be responsible for making the necessary changes in
their electrical system to accept electricity from an underground system.
(b) Grantor will provide all necessary trenching, backfilling, conduit
installation, padmounted transformer pads and repaving associated with this
project. The installation of the conduit and construction of the padmounted
transformer pads will be performed to Grantee’s specifications.
(c) The Grantor will work with CenturyTel and Comcast Cable, or their
successors, to have their facilities placed underground during this project.
Grantee will not be responsible for any agreements or associated costs resulting
from this aspect of the project.
(d) Grantor will be responsible for placing underground any metered or control
circuits used by Grantor.
(e) Grantee’s work will be completed within six months of the Grantor’s
installation of the necessary transformer pads and conduit.
SECTION 17. Concurrent with the approval of this agreement. Grantee will begin
development of “Time of Use” and “Interruptible” electric rates or similar
electric rates any or all of which must be mutually agreed to by Grantee and
Grantor. Such rates will be available to all of Grantee’s customers both within
and without the corporate limits of the Grantor and will be effective no later
than February 17, 2011. Grantor will support Grantee’s efforts during
proceedings before the Florida Public Service Commission in order to gain
approval of the new electric rates. Should the rates not be in effect by
February 17, 2011, Grantor may, at any time within 180 days after that date,
give notice to Grantee that Grantor exercises its option to purchase Grantee’s
system in accordance with procedures set forth in Section 10 of this franchise
except that Grantor must close the purchase of the system within 12 months of
the referendum to approve the purchase. If Grantor does not give notice within
the 180 day time period, this agreement shall remain in effect and continue
according to its terms until its ten year expiration date.

 

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SECTION 18. All of the terms, provisions and conditions of this ordinance shall
inure to and be binding upon the respective successors and assigns of Grantor
and Grantee, and shall apply to the present and any future corporate limits of
Grantor or its successors.
SECTION 19. In the event Grantee, during the term of this franchise, determines
to construct facilities for the generation of electric energy sold within the
City of Marianna, it will give preference to a site for such facilities within
said city if an economical and practical site can be obtained therein.
SECTION 20. This ordinance shall become effective on February 1, 2010, and shall
be in full force and effect from such time, and upon its acceptance in writing
by the Grantee filed with the City Clerk of the City of Marianna, Florida.
SECTION 21. Should any section or provisions of this ordinance or any portion
thereof be declared by a court of competent jurisdiction to be invalid, such
decision shall not affect the validity of the remainder as a whole or as to any
part other than the part declared to be invalid.

 

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Presented in open meeting of the City Commission of the City of Marianna, and
read in full this the 7th day of July, 2009.
Passed by the City Commission of the City of Marianna, Florida, this 7th day of
July, 2009.

                  CITY OF MARIANNA    
 
           
 
  BY:   /s/ [ILLEGIBLE]    
 
     
 
Mayor    

ATTEST:

      /s/ [ILLEGIBLE]
 
City Clerk
   

The Florida Public Utilities Company accepts the term of said ordinance and does
hereby agree to abide by the terms of the conditions of said ordinance.

                  FLORIDA PUBLIC UTILITIES COMPANY    
 
           
 
  BY:   /s/ C.L. Stein    
 
     
 
C.L. Stein    
 
      Its: Sr. Vice President, COO    
 
      Date: 8/28/09    

 

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