Computation of Net Revenues and Pre-Tax Earnings; Certain Adjustments Sample Clauses

Computation of Net Revenues and Pre-Tax Earnings; Certain Adjustments. The Purchaser shall, within ninety (90) days after the end of each of the Contingent Periods, compute the amount of the net revenues and pre-tax earnings of the Business for such Contingent Period. For purposes of calculating net revenues and pre-tax earnings, the Business shall be accounted for as a separate business enterprise with separate financial books and accounting records, notwithstanding that the Business is owned or operated by one or more legal entities. The amount so computed shall be the net revenues and pre-tax earnings for purposes of determining whether or not Contingent Payments for a Contingent Period shall be due and payable. Notwithstanding the determination of net 4 4

Computation of Net Revenues and Pre-Tax Earnings; Certain Adjustments entity or entities attributable to the Business) during the applicable Contingent Period less any necessary adjustments to reflect patient refunds and amounts which are determined to be uncollectible at the time of billing (contractual allowances) or in the future (billing errors) as determined in accordance with generally accepted accounting principles consistent with the Purchaser's accounting practices; and (ii) "pre-tax earnings" shall mean the earnings before income taxes of the Business (or, in the event that all or substantially all the assets and business of the Business shall have been transferred to another entity or entities, the allocable portion of the pre-tax earnings of such other entity or entities) for the applicable Contingent Period as determined in accordance with generally accepted accounting principles consistent with the Purchaser's accounting practices; provided, however, that all revenues and earnings of the Business received from the Medicare or Medicaid programs or from the Office of Civilian Health and Medical Program of the Uniformed Services ("CHAMPUS") programs shall be excluded from "net revenues" and "pre-tax earnings" for the purposes of this Agreement. The Purchaser agrees that the Purchaser will provide the Business with working capital at a level and take such other actions which, in the Purchaser's reasonable judgment, will permit the Business to maximize its net revenues and pre-tax earnings, subject at all times to the Purchaser's obligations to its shareholders and any applicable statutory or regulatory requirements. Operating expenses will include all charges directly related to the daily operations of the Business and will include the following: - Clinical salaries and benefits. - Administrative salaries and benefits. - Amounts paid to independent contractors. - Expenses for office supplies consumed. - Telephone expenses. - Testing supplies consumed by the Business. - Travel and entertainment expenses incurred, except for those expenses required to attend any of the Purchaser's corporate or regional meetings. - Expenses for the lease or rental of any equipment used in the office or directly by employees or independent contractors. - Rents and other charges for facilities used in the operation of the Business. - Charges incurred for the processing of payroll. - Advertising expenses in local newspapers and publications. - Amounts related to the write-off or reserving of bad debts. - Expenses related to the collectio...