§ 2. CONSIDERATION.

(a)

In consideration for the Municipality's acknowledgement of the Company's rights set forth in Section 1, the Company hereby agrees to pay to the Municipality five percent (5%) of the Company's gross receipts from local exchange telephone service provided by the Company within the corporate limits of the Municipality.

(b)

For purposes of this Agreement, the term "gross receipts from local exchange telephone service" is defined to mean and include only those charges resulting from the Company's provision of basic local exchange telephone service to residences and businesses, based on rates established from time to time by tariffs on file with the Louisiana Public Service Commission.

(c)

The payments contemplated by this Section are to be made in quarterly installments and paid not later than thirty (30) days after the end of each calendar quarter.

(d)

The terms of this Agreement shall apply to newly annexed areas of the Municipality within a reasonable period, as agreed upon by the Municipality and the Company, after written notice of such annexation has been transmitted to the Company by the Municipality.

(e)

The payments contemplated by this Section are deemed to be the sole and exclusive consideration for the Municipality's acknowledgement of the Company's rights set forth in Section 1; and the Municipality hereby agrees that, for the period during which this Agreement is in effect, the Municipality will not pass any law or ordinance, or otherwise seek to impose, levy, or collect from the Company any other amount or service (including any telephone service that may heretofore have been provided by the Company to the Municipality without charge) for any of the rights set forth in Section 1. This subsection (e) shall not affect the Company's liability to pay any general taxes, fees or licenses legally imposed for the general maintenance of the Municipality.

(f)

The Company shall maintain and shall make available for audit by the Municipality, upon reasonable notice, all necessary accounts and records reflecting the amounts of and basis for computation of all gross receipts from local exchange telephone service within the corporate limits of the Municipality.

(g)

In the event that the Company shall fail to pay a sum of money for which it is obligated under this Agreement within thirty (30) days of the receipt of written demand therefore, the obligation shall be deemed delinquent; and, in addition to legal interest accruing from the date of delinquency, the Company shall pay a penalty of one and one-half (1½%) percent of the principal sum due.