Blue Ridge shall pay to the municipality an amount equal to 3.5% of the gross revenues derived from the operation of its cable system in the Borough. The term "gross revenues" is defined in Article
VIII, Definitions, below. Blue Ridge shall not deduct or otherwise credit against the franchise fee any tax, fee or assessment of general applicability. The municipality may amend the franchise fee upon 60 days' written notice to Blue Ridge, provided that the franchise fee may not exceed the maximum percentage permitted by law.
Franchise fee payments to the municipality under this provision
shall be computed at the end of each calendar quarter and shall be
due and payable within 30 days after the end of each calendar quarter.
Specifically, payments shall be due and payable on or before April
30 (for the first quarter), July 31 (for the second quarter), October
31 (for the third quarter), and January 31 (for the fourth quarter)
of each year. In the event that any franchise fee payment is not made
on or before the applicable dates, then interest shall be added at
the then-current prime rate of the largest commercial bank in Carbon
County, plus three percentage points. The interest rate shall be applied
as described from the date such franchise fee payment was originally
due. No acceptance of any payment shall be construed as an accord
that the amount paid is in fact the correct amount, nor shall acceptance
of any payment be construed as a release of any claim the municipality
may have for additional sums payable under this agreement.
Each franchise fee payment shall be accompanied by a written
report containing an accurate statement of Blue Ridge's gross
revenues received for cable services for the quarter in connection
with the operation of Blue Ridge's cable system and a brief report
showing the basis for computation of fees. The report shall contain
a line item for every source of revenue received and the amount of
revenue received from each source. The report shall be verified by
a financial representative of Blue Ridge.
On an annual basis, upon 30 days' prior written notice, the municipality shall have the right to conduct an independent audit of Blue Ridge's records reasonably related to the sources, amounts and computation of gross revenues in accordance with generally accepted accounting principles. Such records shall be kept or made available to the municipality at the notice location for Blue Ridge specified in Article
VII below. Any reproduction of such records for purposes of inspection shall be performed at Blue Ridge's expense. If the audit shows that franchise fees have been underpaid, then Blue Ridge shall pay the underpaid amount plus interest in the amount of the then-current prime rate of the largest bank in Carbon County plus two percentage points. If franchise fees have been underpaid by 5% or more, then Blue Ridge shall also pay the total cost of the audit.