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• • • L, .mot i l[: Section 4: Franchise Fee. The Grantee shall annually pay the total of the following to the City as a franchise fee: (a) Seven percent (7 %) of the Grantee's gross revenues from the sale of gas within the City, other than sales of gas to customers who received interruptible gas service; and (b) Three percent (3%) of the Grantee's gross revenues from the sale of gas with the City to customers who received interruptible gas service. The franchise fee to be paid pursuant to this Section shall be paid based on the gross gas sales to the Grantee's customers in the City from January 1 through December 31 of the applicable calendar year, as audited, net of the audit year bad debt expense and the audit year bad debt recoveries. The franchise fee shall be paid annually, commencing in 1988 for sales commencing on January 1, 1987, on or before May 15, such fee to be based on gross gas sales during the prior calendar year, as audited, net of the audit year bad debt expense and the adit year bad debt recoveries. In the event of termination or expiration of the franchise for any reason, the Grantee shall pay the applicable,.,: franchise fee within four and one -half months after termination or expiration of this franchise.