Common use of Franchise Fee Clause in Contracts

Franchise Fee. a. The Grantee shall pay a franchise fee to the City for the privilege of operating in the City's rights of way in a manner consistent with the provisions of the Cable Act, as now in effect and as may be subsequently amended from time to time. The franchise fee shall be in an amount equal to five percent (5%) of annual gross revenues received from the operation of the cable system to provide cable service in the City, and shall be made on a quarterly basis, and shall be due forty-five (45) days after the close of each calendar quarter. If mailed, the Franchise Fee shall be considered paid on the date it is postmarked. The City hereby agrees that the total franchise fee, as interpreted under the Cable Act, shall not exceed the greater of the percentage of fees any other video service provider, under state authorization or otherwise, providing service in the Franchise Area pays to the City. b. As used in this agreement, gross revenue means the cable service revenue derived by the Grantee from the operation of the cable system in the City’s rights of way to provide cable services, calculated in accordance with generally accepted accounting principles. Gross revenues shall also include such revenue sources from the provision of cable service as may now exist or hereafter develop from or in connection with the operation of the cable system within the City, provided that such revenues, fees, receipts, or charges may lawfully be included in the gross revenue base for purposes of computing the City’s permissible franchise fee under the Cable Act, as may be amended from time to time. c. The City and Grantee acknowledge that the audit standards are set forth in Utah Code Annotated, 51-2a-101 et. seq., the “Accounting Reports from Political Subdivisions, Interlocal Organizations, and Other Local Entities Act”. Any audit shall be conducted in accordance with generally applicable auditing standards. d. The City shall provide on an annual basis, a complete list of addresses within the corporate limits of the City. If an address is not included in the list or if no list is provided, the Grantee shall be held harmless for any franchise fee underpayments (including penalty and interest) from situsing errors.

Franchise Fee. a. (a) The Grantee shall pay a franchise fee to the City for the privilege Grantor an annual Franchise Fee of operating in the City's rights of way in a manner consistent with the provisions of the Cable Act, as now in effect and as may be subsequently amended from time to time. The franchise fee shall be in an amount equal to five percent (5%) of annual gross revenues Gross Annual Cable Service Revenues, or the maximum permitted by law or regulation should this percentage be increased, received by the Grantee and derived from the operation operations of the cable system Cable System in the City of Calabasas to provide cable service in Cable Service. (b) For the Citypurposes of this Agreement, revenues collected from Subscribers for the Educational and Governmental capital grants of Exhibit D, Paragraph 3, shall be made on a quarterly basisexcluded from the calculation of Gross Annual Cable Service Revenues. (c) For the purposes of this Agreement, and the Cable Television System Regulatory Fees imposed by the Federal Communications Commission (FCC) shall be excluded from the calculation of Gross Annual Cable Service Revenues. The FCC Cable Television System Regulatory Fees shall not be considered part of the Franchise Fee due fortyto Grantor from Grantee, or in any way reduce the amount of the Franchise Fee owed and paid by Grantee to Grantor. (d) In the event that the Grantee shall, during the term of the Franchise, bundle, tie or combine Cable Services (which are subject to the Franchise Fee) with non-five Cable Services (45which are not subject to the Franchise Fee) days after and provide the close bundled, tied or combined service at a discount from the sum of each calendar quarter. If mailedthe rates for the individual services, then the discount shall be apportioned to the Cable Service in proportion to the ratio of the total bundled Cable Service and non-Cable Service price to the total unbundled Cable Service and non-Cable Service price. (e) The Franchise Fee shall be considered paid on payable quarterly, by no later than sixty (60) calendar days following the date it calendar quarter for which payment is postmarked. The City hereby agrees that the total franchise fee, as interpreted under the Cable Act, shall not exceed the greater of the percentage of fees any other video service provider, under state authorization or otherwise, providing service in the Franchise Area pays to the Citydue. b. As used in this agreement, gross revenue means (f) The payment for each calendar quarter shall be accompanied by a written report from Grantee that contains at least the cable service revenue derived by the Grantee from the operation of the cable system in the City’s rights of way to provide cable services, calculated in accordance with generally accepted accounting principles. following information: (1) The total Gross revenues shall also include such revenue sources Annual Cable Service Revenue from the provision of cable service as may now exist or hereafter develop from or in connection with the operation Cable Service, and an itemization of the cable system within various categories of Gross Annual Cable Service Revenue collected during that calendar quarter; and (2) The total number of Subscribers at the Cityend of each calendar month during the calendar quarter; and (3) The total amount recovered by Grantee from Subscribers from inclusion by Grantee of any EG Access capital grants on Subscriber bills (as provided for in Section 7.11 and Exhibit D, provided that such revenues, fees, receipts, or charges may lawfully Paragraph 3 of this Agreement) and the cumulative amount recovered from the Effective Date of this Agreement through the reporting quarter of the statement. Separate cumulative recovery amounts shall be included in the gross revenue base indicated for purposes of computing the City’s permissible franchise fee under the Cable Act, as may be amended from time to timeeach grant. c. The City and Grantee acknowledge that the audit standards are set forth in Utah Code Annotated, 51-2a-101 et. seq., the “Accounting Reports from Political Subdivisions, Interlocal Organizations, and Other Local Entities Act”. Any audit shall be conducted in accordance with generally applicable auditing standards. d. The City shall provide on an annual basis, a complete list of addresses within the corporate limits (4) A description of the City. If an address is not included methodology utilized by Grantee in calculating the list or if no list is provided, total amount recovered by Grantee from Subscribers of the Grantee shall be held harmless for any franchise fee underpayments EG Access amounts detailed in (including penalty and interestf)(3) from situsing errorsof this Section 2.2.

Franchise Fee. a. The Grantee shall pay a franchise fee (a) For and in consideration of the Franchise, and as fair and reasonable compensation to the City for the privilege use by the Company of operating in the City's rights ’s Right-of-Way, the Company will pay to the State of way in a manner consistent with Utah for the provisions benefit of the Cable Act, as now in effect and as may be subsequently amended from time to time. The City an annual franchise fee shall be (the “Franchise Fee”), in an amount equal to, and consisting of, the municipal telecommunications license tax (the “Municipal Telecommunications Tax”) authorized pursuant to five percent the Utah Municipal Telecommunications License Tax Act, Title 10, Chapter 1, Part 4, Utah Code Annotated 1953, as amended (5%) of annual gross revenues received from the operation of the cable system to provide cable service “Municipal Telecommunications Tax Act”). Such Franchise Fee shall be calculated in the Citymanner provided in the Municipal Telecommunications Tax Act, and shall be made on a quarterly basispaid by the Company to the Utah State Tax Commission, as agent for the City under an Interlocal Cooperation Agreement by and among the City, the Utah State Tax Commission, and others, at the times and in the manner prescribed in the Municipal Telecommunications Tax Act, and any rules and regulations promulgated thereunder. Compliance by the Company with the terms and provisions of the Municipal Telecommunications Tax Act, and any rules and regulations promulgated thereunder, shall be due forty-five satisfy all requirements of this Agreement with respect to the calculation and payment of the Franchise Fee. (45b) days after Notwithstanding the close provisions of each calendar quarter. If mailedSection 2.1(a) above, the Franchise Fee shall be considered paid on calculated and payable as described therein only so long as the date it is postmarked. The Company and the services provided within the City hereby agrees that by the total franchise fee, as interpreted under the Cable Act, shall not exceed the greater Company by means of the percentage of fees any other video service provider, under state authorization or otherwise, providing service in the Franchise Area pays Company Facilities are subject to the City. b. As used in this agreement, gross revenue means the cable service revenue derived by the Grantee from the operation of the cable system in the City’s rights of way Municipal Telecommunications Tax. This franchise does not contemplate or permit Company to provide cable services, calculated in accordance with generally accepted accounting principles. Gross revenues shall also include such revenue sources from television service and to the provision of cable service as may now exist extent all or hereafter develop from or in connection with the operation any portion of the Company Facilities is used to provide cable system within television service, Company shall acquire a separate franchise for same. In the Cityevent all or any portion of the Company Facilities ceases to be used by the Company to provide services subject to the Municipal Telecommunications Tax, provided that the Company shall pay, in lieu of the Franchise Fee, a charge with respect to such revenuesportion of the Company Facilities, fees, receipts, or charges may lawfully which shall be included in the calculated as 3.5% of “gross revenue base for purposes of computing the City’s permissible franchise fee under the Cable Act, revenue” (as may be amended from time to time. c. The City and Grantee acknowledge that the audit standards are set forth defined in Utah Code AnnotatedSection 10-1-402). Such fee shall be paid annually, 51-2a-101 etpayable from and after (i) the date Company ceases to provide such services, or (ii) the date the Municipal Telecommunications Tax ceases to apply to the services provided by the Company. seq.If at any time the Municipal Telecommunications Act is changed in such a way as to affect this Franchise in any way, the “Accounting Reports from Political Subdivisions, Interlocal Organizations, City and Other Local Entities Act”. Any audit the Company agree to negotiate in good faith within sixty (60) days any amendments to this Agreement as shall be conducted necessary to accommodate such changes, including payment provisions; provided such new or changed provisions shall conform substantially with the provisions contained in accordance with generally applicable auditing standardsany permits held by other similarly situated companies. d. The City shall provide on an annual basis, a complete list of addresses within the corporate limits of the City. If an address is not included in the list or if no list is provided, the Grantee shall be held harmless for any franchise fee underpayments (including penalty and interest) from situsing errors.

Franchise Fee. a. (a) The Grantee shall pay a franchise fee to the City for the privilege Grantor an annual Franchise Fee of operating in the City's rights of way in a manner consistent with the provisions of the Cable Act, as now in effect and as may be subsequently amended from time to time. The franchise fee shall be in an amount equal to five percent (5%) of annual gross revenues Gross Annual Cable Service Revenues, or the maximum permitted by law or regulation should this percentage be increased, received by the Grantee and derived from the operation operations of the cable system Cable System in the City of Calabasas to provide cable service in Cable Service. (b) If Federal or State law permits the CityGrantee to provide non- video Telecommunications Services to subscribers (such as telephone communications) through the facilities of the Cable System, and shall be made on the Grantor has the regulatory authority to collect either a quarterly basis, and shall be due forty-five (45) days after the close of each calendar quarter. If mailed, the Franchise Fee or an in-lieu-of- franchise-fee payment on such services, then the Grantee shall be considered paid on the date it is postmarked. The City hereby agrees that the total franchise fee, as interpreted under the Cable Act, shall not exceed the greater of the percentage of fees any other video service provider, under state authorization or otherwise, providing service in the Franchise Area pays to the City. b. As used in this agreement, gross revenue means the cable service revenue pay a fee for revenues derived by the Grantee from such services at the operation rate established in an Ordinance adopted by the Council and applied in a non-discriminatory manner to all providers of such services franchised by Grantor. (c) For the cable system in the City’s rights purposes of way to provide cable servicesthis Agreement, calculated in accordance with generally accepted accounting principles. Gross revenues shall also include such revenue sources collected as Franchise Fees and revenues derived from the provision of cable service as may now exist or hereafter develop from or in connection with the operation of the cable system within the City, provided that such revenues, fees, receipts, or charges may lawfully Internet access services shall be included in Gross Annual Cable Service Revenues so long as the gross revenue base for provision of Internet access services is considered to be a Cable Service under applicable law. (d) For the purposes of computing this Agreement, revenues collected from Subscribers for the City’s permissible franchise fee under Educational and Governmental capital grant of Exhibit D, Paragraph 3, shall be excluded from the calculation of Gross Annual Cable Service Revenues. (e) In the event that the Grantee shall, during the term of the Franchise, bundle, tie or combine Cable Services (which are subject to the Franchise Fee) with non-Cable Services (which are not subject to the Franchise Fee) and provide the bundled, tied or combined service at a discount from the sum of the rates for the individual services, then the discount shall be apportioned to the Cable Act, as may be amended from time Service in proportion to timethe ratio of the total bundled Cable Service and non-Cable Service price to the total unbundled Cable Service and non-Cable Service price. c. (f) The City and Grantee acknowledge that the audit standards are set forth in Utah Code Annotated, 51-2a-101 et. seq., the “Accounting Reports from Political Subdivisions, Interlocal Organizations, and Other Local Entities Act”. Any audit Franchise Fee shall be conducted in accordance with generally applicable auditing standards. d. The City shall provide on an annual basispayable quarterly, a complete list of addresses within by no later than the corporate limits first day of the City. If an address third month following the quarter for which payment is not included in the list or if no list is provided, the Grantee shall be held harmless for any franchise fee underpayments (including penalty and interest) from situsing errorsdue.

Franchise Fee. a. The Grantee shall pay a franchise fee (a) For and in consideration of the Franchise, and as fair and reasonable compensation to the City for the privilege use by the Company of operating in the City's rights of way in a manner consistent with ’s Right-of-Way, the provisions of Company will pay to the Cable Act, as now in effect and as may be subsequently amended from time to time. The City an annual franchise fee shall be (the “Franchise Fee”), in an amount equal to, and consisting of, the municipal telecommunications license tax (the “Municipal Telecommunications Tax”) authorized pursuant to five percent the Utah Municipal Telecommunications License Tax Act, Title 10, Chapter 1, Part 4, Utah Code Annotated 1953, as amended (5%) of annual gross revenues received from the operation of the cable system to provide cable service “Municipal Telecommunications Tax Act”). Such Franchise Fee shall be calculated in the Citymanner provided in the Municipal Telecommunications Tax Act, and shall be made on a quarterly basispaid by the Company to the Utah State Tax Commission, as agent for the City under an Interlocal Cooperation Agreement by and among the City, the Utah State Tax Commission, and others, at the times and in the manner prescribed in the Municipal Telecommunications Tax Act, and any rules and regulations promulgated thereunder. Compliance by the Company with the terms and provisions of the Municipal Telecommunications Tax Act, and any rules and regulations promulgated thereunder, shall be due forty-five satisfy all requirements of this Agreement with respect to the calculation and payment of the Franchise Fee. (45b) days after Notwithstanding the close provisions of each calendar quarter. If mailedSection 2.1(a) above, the Franchise Fee shall be considered paid on calculated and payable as described therein only so long as the Company and the services provided within the City by the Company by means of the Company Facilities are subject to the Municipal Telecommunications Tax. In the event all or any portion of the Company Facilities ceases to be used by the Company to provide services subject to the Municipal Telecommunications Tax, the Company shall pay, in lieu of the Franchise Fee, a charge with respect to such portion of the Company Facilities, payable from and after the (i) the date it is postmarkedCompany ceases to provide such services, or (ii) the date the Municipal Telecommunications Tax ceases to apply to the services provided by the Company, which shall be calculated in the same manner as the charge then imposed by the City on other Companies occupying the Right-of-Way with similar facilities, and which do not provide telecommunication services subject to the Municipal Telecommunications Act. The City hereby agrees that and the total franchise fee, Company agree to negotiate in good faith any amendments to this Agreement as interpreted under shall be necessary to accommodate the Cable change or elimination of the Municipal Telecommunications Act, including payment provisions; provided such new or changed provisions shall not exceed conform substantially with the greater provisions contained in any permits held by other similarly situated companies. (c) The Company represents to the City that one of the percentage of fees any other video service provider, under state authorization purposes for entering into this Agreement is to obtain authority to build or otherwise, providing service in maintain a network within the Franchise Area pays to the City. b. As used in this agreement, gross revenue means the cable service revenue derived by the Grantee from the operation of the cable system in the City’s rights of way City to provide cable services, calculated in accordance with generally accepted accounting principles. Gross revenues shall also include such revenue sources from the provision of cable service as may now exist or hereafter develop from or in connection with the operation of the cable system telecommunication services to customers within the City. Upon completion of the Company Facilities, provided the Company will actively market customer services and generate local gross receipts within the meaning of the Municipal Telecommunications Tax Act. The Company represents that such revenuesit expects to generate more than a nominal amount of gross receipts from local customers, fees, receiptsand that the use of the Company Facilities for other purposes, or charges may lawfully be included in the gross revenue base for purposes of computing the City’s permissible franchise fee under the Cable Act, as may be amended from time to time. c. The City and Grantee acknowledge that the audit standards are set forth in Utah Code Annotated, 51-2a-101 et. seq., the “Accounting Reports from Political Subdivisions, Interlocal Organizations, and Other Local Entities Act”. Any audit shall be conducted in accordance with generally applicable auditing standards. d. The City shall otherwise provide on an annual basis, a complete list of addresses within the corporate limits services to customers located outside of the City. If an address , is not included in the list sole or if preeminent objective of the Company. (d) Upon the written request of the City no list is providedmore than once per year, the Grantee Company shall submit to the City a certificate signed by a corporate officer of the Company certifying whether or not all elements of the Company Facilities have been used to provide services which generate gross receipts attributed to the City (within the meaning of the Municipal Telecommunications Tax Act) during the preceding calendar year. Any elements of the Company Facilities not so used shall be held harmless identified. (e) For each calendar year, those elements of the Company Facilities that are not used to provide services which generate gross receipts attributed to the City within the meaning of the Municipal Telecommunications Tax Act shall be subject to the per linear foot charge provided for any franchise fee underpayments in Salt Lake City Code § 14.32.425, or successor ordinance, as if such elements of the Company Facilities were installed and maintained pursuant to a telecommunications right of way permit (including penalty and interest) the “Non-Taxed Facilities”). On or before March 1st each year, Company shall pay to City the per linear foot charges for its Non-Taxed Facilities for the preceding calendar year, as provided for in Salt Lake City Code § 14.32.425, regardless of whether City requests the report pursuant to Section 2.1(d). In the event an element of Company Facilities is changed from situsing errorsa Non- Taxed Facility to a facility that provide services which generate gross receipts attributable to the City within the meaning of the Municipal Telecommunications Tax Act, the per linear foot charges for that particular element for the preceding year shall be pro-rated to the date of dedication to such local services.

Franchise Fee. a. The (a) As compensation for the franchise granted by Grantor, and in consideration for authorization to use the streets and public ways of Grantor for the construction, reconstruction, operation, and maintenance of Grantee’s cable television system, the Grantee shall will pay to the Grantor, in quarterly installments, a franchise fee to the City for the privilege of operating in the City's rights of way in a manner consistent with the provisions of the Cable Act, as now in effect and as may be subsequently amended from time to time. The franchise fee shall be in an amount equal to five percent (5%) of annual gross revenues received Gross Revenues, as defined in Section 14 of this Agreement. (b) The parties acknowledge that, at present, applicable federal law limits the Grantor to collection of a maximum permissible franchise fee of five percent (5%) of Gross Revenues derived from the operation of the cable system to provide cable service services. If Congress, the FCC, or a court of competent jurisdiction alters the current franchise fee limitations on the percentage of the Gross Revenues to which the percentage is applied, in a manner that materially changes the benefits or obligations of either party, then the parties agree to comply with the requirements of Subsection 13.7 of this Agreement. (c) Grantor acknowledges that, during the term of this Agreement, Grantee may offer to its subscribers, at a discounted rate, a bundled or combined package of services consisting of cable services, which are subject to the fee referenced above in paragraph (a), and other services that are not subject to that fee. If Grantee, or any of its affiliates, bundles or combines the sale of some or all of its cable services with non-cable services, and it becomes necessary to separately compute the amount of Gross Revenues attributable to cable services in order to determine the amount of franchise fees or PEG access support fees that are payable to the Grantor, then the following provisions will be applicable: 1. Grantee will not structure the pricing of any bundled or combined services so as to intentionally or unreasonably cause a reduction in the CityGross Revenues upon which franchise fees or PEG access capital support payments are based. 2. If Grantor reasonably determines that Grantee has, contrary to this paragraph (c), unlawfully or inequitably allocated Gross Revenues between cable services and non-cable services in calculating franchise fee payments, then the parties will meet upon advance notice from the Grantor to discuss the allocation methodology. If the parties cannot resolve the dispute within a reasonable period of time, then the parties will submit the matter to a mutually- agreeable third party for mediation. The cost of the mediation will be shared equally by the parties. If the mediation is not successful, or if the parties cannot mutually agree upon a mediator, then either party may file an action in a court of competent jurisdiction or pursue any other remedies available under the law or this Agreement. 3. In recognition of the regulatory uncertainties that exist on the effective date of this Agreement with regard to bundled services that are offered at a discount, the parties reserve all rights, claims, defenses, and remedies they may have relating to Grantor’s authority to impose and to enforce requirements concerning the revenue allocation methodology to be applied in calculating franchise fee payments on Gross Revenues derived from the sale to subscribers of cable services and non-cable services in a discounted package. (d) ▇▇▇▇▇▇▇’s franchise fee payments to the Grantor shall be made on a quarterly basiscomputed for each preceding calendar quarter ending March 31, June 30, September 30, and shall December 31, and must be due forty-five (45) paid by Grantee to Grantor not later than 45 days after the close end of each calendar quarter. If mailedThe payment for each calendar quarter must be accompanied by a report containing an accurate statement, in summary form, that sets forth by type of revenue the Franchise Fee shall be considered paid on Grantee’s Gross Revenues and the date it is postmarkedcomputation of the payment amount. The City hereby agrees that report must also state the total franchise fee, as interpreted under the Cable Act, shall not exceed the greater number of the percentage subscribers for each service or tier of fees any other video service provider, under state authorization or otherwise, providing service offered in the Franchise Area pays franchise service area. The report must include the appropriate information for the following categories of revenue: basic service; expanded basic service; a la carte services; pay-per view and pay-per-event; digital services; equipment rental or sale; installation, disconnection, re-connection, change-in-service, or other service revenue; maintenance plan revenue; satellite audio service; program guide revenue; itemized franchise fee revenue; itemized FCC regulatory fee revenue; other itemized fee or tax revenue (if any); late fees and administrative fees; and other miscellaneous subscriber revenue. A sample report form containing this information is attached as Exhibit G. (e) In addition to the City.information required by paragraph (d) above, Grantor may periodically, but not more frequently than once each calendar year request the following: b. As used in this agreement, gross revenue means the cable service revenue derived by the Grantee from the operation 1. The total number of the cable system subscribers in the Cityregional cluster that includes the Grantee’s rights of way to provide cable servicesfranchise service area, calculated in accordance with generally accepted accounting principles. Gross revenues shall also include and such revenue sources from the provision of cable service as may now exist or hereafter develop from or in connection with the operation of the cable system within the City, provided that such revenues, fees, receipts, or charges may lawfully be included in the gross revenue base for purposes of computing the City’s permissible franchise fee under the Cable Act, related information concerning those subscribers as may be amended required by Grantor to verify and validate Grantee’s calculations as to the proration of revenues, such as those derived from time to timeadvertising sales and home shopping commissions, among Grantor and other local franchising authorities that constitute the regional cluster. c. 2. The City methodology used by Grantee in determining any proration of revenues, such as those derived from advertising sales and Grantee acknowledge home shopping commissions, among Grantor and other local franchising authorities that constitute the audit standards are set forth in Utah Code Annotated, 51-2a-101 et. seq., the “Accounting Reports from Political Subdivisions, Interlocal Organizations, and Other Local Entities Act”. Any audit shall be conducted in accordance with generally applicable auditing standardsregional cluster. d. The City shall provide on an annual basis, a complete list of addresses within the corporate limits of the City. (f) If an address is not included in the list or if no list is provided, the Grantee shall be held harmless for any franchise fee underpayments payment, or recomputed amount as determined by a financial audit under Subsection 9.7, is not made on or before the dates specified in Subsection 2.2(d), Grantee shall pay to Grantor as additional compensation an interest charge, computed at a rate of one percent (including penalty 1%) per month, for each entire or partial month from the applicable due date until the date of receipt by Grantor of the franchise fee payment and interestthe interest charge. (g) If a franchise fee payment is overdue by 60 days or more, Grantor may treat that delay as a material breach, subject to the provisions of Section 11 of this Agreement. (h) Any itemization of franchise fees by Grantee on subscribers’ bills must be in compliance with federal and state law. Itemized franchise fee revenue may not be excluded or deducted from situsing errorsGrantee’s Gross Revenues when computing payments due to Grantor under this Agreement. (i) In accepting this franchise, ▇▇▇▇▇▇▇ acknowledges that the costs of the commitments specified in Sections 2 and 4 of this Agreement are voluntary and that these costs will not be offset against any franchise fees payable by Grantee to Grantor during the term of the franchise.

Franchise Fee. a. The (a) As compensation for the franchise granted by Grantor, and in consideration for authorization to use the streets and public ways of the Constituent Jurisdictions for the construction, reconstruction, operation, and maintenance of Grantee’s cable system, Grantee shall will pay a to Grantor an annual franchise fee to the City for the privilege of operating in the City's rights of way in a manner consistent with the provisions of the Cable Act, as now in effect and as may be subsequently amended from time to time. The franchise fee shall be in an amount equal to five percent (5%) of annual gross revenues received the Annual Gross Revenues derived from the operation of the cable system to provide cable service services as defined under existing or future federal law in the CityFranchise Service Area. For the purposes of this Agreement, "Annual Gross Revenues" mean all revenue derived from the operation of the cable system to provide cable services within the Franchise Service Area. Annual Gross Revenues include but are not limited to all revenues derived from (1) subscribers for cable services, (2) advertising sales as described below, (3) the sale of products or services on home shopping channels, and (4) the lease or licensing of any channels, transmission facilities, or other cable system property used in the operation or maintenance of the cable system to provide cable services within the Franchise Service Area. Annual Gross Revenues excludes uncollected bad debt, refundable deposits, rebates or credits, and sales, excise or other taxes that are required to be collected for direct pass-through to a local, state or federal government. Revenues collected from subscribers as franchise fees shall be made included in Grantee's Annual Gross Revenues. Grantee's Annual Gross Revenues shall include those advertising revenues derived from the operation of the cable system to provide cable services within the Franchise Service Area. Such advertising revenues shall be net of commissions due to advertising agencies that arrange for the advertising buy provided that such commissions are in an amount customarily paid by Grantee to unaffiliated third party advertising agencies for advertising buys. Revenues generated from regional advertising sales extending beyond the Franchise Service Area shall be pro-rated from head-end revenue on a per subscriber basis, so that no revenues are double counted, or attributed to more than one local governmental entity for purposes of calculating franchise fees. Annual Gross Revenues shall not include launch and promotional fees paid to Grantee and provided for marketing and promotional purposes. Gross Revenues shall be computed according to Generally Accepted Accounting Principles. (b) The franchise fees specified above in Subsection 2.2(a) must be computed and paid by Grantee to Grantor on a quarterly basis, and shall be due basis within forty-five (45) days after the close of each calendar quarter. quarter on March 31, June 30, September 30 and December 31, respectively. (c) If mailedany franchise fee payment, or recomputed amount, is not made on or before the Franchise Fee shall be considered paid due date specified in Subsections 2.2(b), Grantee must pay as additional compensation, an interest charge, computed from the applicable due date, at an annual rate equal to the prevailing commercial prime interest rate in effect on the date it is postmarkeddue date, plus one percent (1%). (d) Grantor acknowledges that, during the term of this Agreement, Grantee may offer to its subscribers, at a discounted rate, a bundled or combined package of services consisting of video services, which are subject to the franchise fee referenced above in subsection 2.2(a), and other services that are not subject to that fee. The City hereby agrees that the total franchise fee, as interpreted under the Cable Act, Grantee shall not exceed allocate revenue between cable services and non-cable services for the greater purpose or with the intent of the percentage evading its franchise fee obligations. (e) Any itemization of franchise fees or pass-throughs of franchise related costs by Grantee on subscribers’ bills must be in compliance with federal and state law. Any surcharge billed to Grantee’s subscribers which is not required by Grantor or by any other video service provider, under state authorization or otherwise, providing service in the Franchise Area pays governmental agency to the City. b. As used in this agreement, gross revenue means the cable service revenue derived by the Grantee from the operation of the cable system in the City’s rights of way be imposed upon subscribers and is specifically related to provide cable services, calculated in accordance with generally accepted accounting principlesmust be identified as a surcharge levied solely by Grantee. Gross revenues shall also include Any such revenue sources from the provision of cable service as may now exist or hereafter develop from or in connection with the operation of the cable system within the City, provided that such revenues, fees, receipts, or charges may lawfully surcharge will be included in the gross revenue base for purposes of computing the Citysubject to Grantor’s permissible franchise fee under the Cable Act, as may be amended from time to timewhere so authorized by applicable law. c. The City and Grantee acknowledge that the audit standards are set forth in Utah Code Annotated, 51-2a-101 et. seq., the “Accounting Reports from Political Subdivisions, Interlocal Organizations, and Other Local Entities Act”. Any audit shall be conducted in accordance with generally applicable auditing standards. d. The City shall provide on an annual basis, a complete list of addresses within the corporate limits of the City. If an address is not included in the list or if no list is provided, the Grantee shall be held harmless for any franchise fee underpayments (including penalty and interest) from situsing errors.