Common use of Limitation on Fees Clause in Contracts

Limitation on Fees. The Management Fees payable to the Managers shall be limited during the Initial Term to five percent (5%) of Total Revenues for each Facility (determined separately for each Facility) ("Base Management Fee") until such time that such Facility is producing an Operating Profit for three (3) consecutive calendar months. The unpaid two percent (2%) of the Management Fee shall be accrued without interest until an Operating Profit is achieved for three (3) consecutive calendar months ("Accrued Management Fee"). From and after the date that each Facility (determined separately for each Facility) produces an Operating Profit for not less than three (3) consecutive calendar months, the Managers shall be entitled to receive the full Management Fee and the Accrued Management Fee from prior periods for such Facility to the extent Operating Profit is available therefor. If there is an Operating Deficit for three (3) consecutive calendar months, the Management Fee for such Facility shall be limited to the Base Management Fee thereafter until Operating Profit is thereafter achieved for such Facility for three (3) consecutive calendar months. As set forth above, the computation of Base Management Fee, Accrued Management Fee, and the conditions under which the Accrued Management Fee is payable shall be determined separately for each Facility subject to this Agreement. Notwithstanding anything to the contrary contained herein, any obligation of Owners to pay any Accrued Management Fee for any Facility shall terminate automatically at the expiration of the Initial Term if Emeritus does not timely exercise or at such time as it is not entitled to exercise the Purchase Option set forth in Section 13, and in any event any Accrued Management Fee shall be paid solely out of Operating Profit for such Facility (and not out of Operating Profit for any other Facility) and neither the Facility Entities nor AL Investors Development shall have any liability to pay the Accrued Management Fee during the Initial Term or upon expiration or sooner termination of this Agreement from any other funds or by any Owner's Deficit Contribution pursuant to Section 8.3.

Limitation on Fees. The Management Fees payable to the Managers shall be limited during the Initial Term to five percent (5%) of Total Revenues for each Facility (determined separately for each Facility) ("Base Management Fee") until such time that such Facility is the Facilities in the aggregate are producing an Operating Profit for three (3) consecutive calendar months. The unpaid two percent (2%) of the Management Fee shall be accrued without interest until an Operating Profit is achieved for three (3) consecutive calendar months ("Accrued Management Fee"). From and after the date that each Facility (determined separately for each Facility) produces the Facilities in the aggregate continue to produce an Operating Profit for not less than three (3) consecutive calendar months, the Managers shall be entitled to receive the full Management Fee and the Accrued Management Fee from prior periods for such Facility to the extent Operating Profit is available therefor. If there is an Operating Deficit for three (3) consecutive calendar months, the Management Fee for such Facility shall be limited to the Base Management Fee thereafter until Operating Profit is thereafter achieved for such Facility for three (3) consecutive calendar months. As set forth above, the computation of Base Management Fee, Accrued Management Fee, and the conditions under which the Accrued Management Fee is payable shall be determined separately for each Facility subject to this Agreement. Notwithstanding anything to the contrary contained herein, any obligation of Owners to pay any Accrued Management Fee for any Facility shall terminate automatically at the expiration of the Initial Term if Emeritus does not timely exercise or at such time as it is not entitled to exercise the Purchase Option set forth in Section 13, and in any event any Accrued Management Fee shall be paid solely out of Operating Profit for such Facility (and not out of Operating Profit for any other Facility) and neither the Facility Entities nor AL Investors Development II shall have any liability to pay the Accrued Management Fee during the Initial Term or upon expiration or sooner termination of this Agreement from any other funds or by any Owner's Deficit Contribution pursuant to Section 8.3.