Application of Practice Revenues of the Founding Pods Sample Clauses

Application of Practice Revenues of the Founding Pods. Practice Revenues of the Founding Pods shall be applied to expenses and other required distributions under this Agreement in the following order of priority: (a) Step 1 - Practice Revenues of the Founding Pods shall be applied to pay --- ------ Practice Expenses of the Founding Pods. (b) Step 2 - Any Gross Margin attributable to the Founding Pods remaining --- ------ after Step 1 above shall next be applied to payment of (i) the Baseline Amount (minus the amount necessary to pay all Deductible Expenses of the Founding Pods) and (b) PQC Direct Expenses on a proportional basis equal to the ratio of (i) the Baseline Amount to (ii) PQC Direct Expenses as approved by the Joint Policy Board for the then current Fiscal Period or in the absence of approval of a budget for the then current Fiscal Period, in the ratio set forth on Schedule B- 1 attached to this Agreement. By way of example only and not as a limitation, if the Baseline Amount is $12 million and budgeted PQC Direct Expenses allocated to the Founding Pods are $1 million, then under this Step 2 12/13ths or 92.31% of each dollar of Gross Margin shall be allocated to Medical Group for payment of the Baseline Amount and the remaining 1/13th or 7.69% of each dollar of Gross Margin shall be allocated to PQC. (c) Step 3 - After completion of Step 2, any remaining Net Margin --- ------ attributed to the Founding Pods shall be allocated fifty percent (50%) to Medical Group for distribution to the Medical Group Physicians in the Founding Pods and fifty percent (50%) to PQC as additional compensation hereunder. Subject to review by the Joint Policy Board, PQC shall calculate the amounts of Gross Margin and Net Margin to be allocated to each of Medical Group and PQC under this Section 2. If the Gross Margin is negative in any Fiscal Period, such negative amount shall constitute Practice Expenses of the Founding Pods for the next following Fiscal Period. In the event Net Margin is negative in the Fiscal Periods ending December 31, 1997 or December 31, 1998, PQC may be obligated to make a loan to Medical Group in accordance with the provisions of Section 3.5 of the Agreement.
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Related to Application of Practice Revenues of the Founding Pods

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