Common use of Initial Adjustment Clause in Contracts

Initial Adjustment. If an adjustment to the Management Fee is required during any Year of the Term, the Management Fee for the rest of such Year and each succeeding Year shall be equal to the greater of (a) (i) the Operations Fee for such Year, plus (ii) the sum of the Operations Fee, marketing expenses and Professional Expenses for such Year multiplied by the Applicable Percentage, as defined below, for such Year, or (b) (i) the Operations Fee for such Year, plus (ii) Twenty Percent (20%) of the Operations Fee for the applicable Year. For purposes of this calculation, the Practice Operating Expenses shall not be reduced by any objectively determinable cost savings implemented by Manager (e.g., group malpractice insurance savings). If, as of the date of the adjustment, less than twelve (12) full months of the Term have transpired, then the Management Fee provided for above shall be prorated to determine the new fees for the remainder of such Year. “Applicable Pe rcentage” shall mean the average of the Management Fee for the three (3) years (or such shorter period if 3 years has not transpired) immediately preceding the applicable Year, divided by the average for the three (3) years (or such shorter period if 3 years has not transpired) immediately preceding the applicable Year, of the sum of the Operations Fee, marketing expenses, and Professional Expenses. If either clause (a) or (b) above is or becomes invalid, illegal or unenforceable in any respect, the validity, legality or enforceability of the remaining clause shall not be affected thereby.

Initial Adjustment. If an adjustment to the Management Fee is required during any Year of the Term, the Management Fee for the rest of such Year and each succeeding Year shall be equal to the greater of (a) (i) the Operations Fee for such Year, Year plus (ii) the sum of the Operations Fee, marketing expenses and Professional Expenses for such Year multiplied by the Applicable Percentage, as defined below, for such Year, Year or (b) (i) the Operations Fee for such Year, Year plus (ii) Twenty Percent twenty percent (20%) of the Operations Fee for the applicable Year. For purposes of this calculation, the Practice Operating Expenses shall not be reduced by any objectively determinable cost savings implemented by Manager (e.g., group malpractice insurance savings). If, as of the date of the adjustment, less than twelve (12) full months of the Term have transpired, then the Management Fee provided for above shall be prorated to determine the new fees for the remainder of such Year. “Applicable Pe rcentageAp plicable Percentage” shall mean the average of the Management Fee for the three (3) years (or such shorter period if 3 three (3) years has have not transpired) immediately preceding the applicable Year, divided by the average for the three (3) years (or such shorter period if 3 three (3) years has have not transpired) immediately preceding the applicable Year, of the sum of the Operations Fee, marketing expenses, expenses and Professional Expenses. If either clause (a) or (b) above is or becomes invalid, illegal or unenforceable in any respect, the validity, legality or enforceability of the remaining clause shall not be affected thereby.