Annual Fee Escalator Sample Clauses
An Annual Fee Escalator clause establishes a mechanism for automatically increasing a recurring fee, such as rent or service charges, at regular yearly intervals. Typically, the escalation is based on a fixed percentage, a set dollar amount, or an external index like the Consumer Price Index, and is applied to ensure that the fee keeps pace with inflation or rising costs. This clause helps maintain the real value of payments over time and provides predictability for both parties by outlining how and when fee adjustments will occur.
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Annual Fee Escalator. All fees set forth in this Agreement, including the Terminaling Service Fee and the Ancillary Services Fees, shall be adjusted on January 1 of each Contract Year, commencing on January 1, 2015, (a) by an amount equal to the increase or decrease, if any, in the Producer Price Index during the previous Contract Year and (b) by an amount equal to the increase, if any, in the individual out-of-pocket costs that increase greater than the Producer Price Index reasonably incurred by the Operator in connection with providing the Services and Ancillary Services; provided, however, that no fee shall be decreased below the initial fee for such service provided in this Agreement; provided, further, that the Operator shall use commercially reasonable efforts to mitigate any such rise in out-of-pocket costs incurred by the Operator in connection with providing the Services and Ancillary Services. In the event of an Index Change, the Company and the Operator shall negotiate in good faith to agree on a new index that gives comparable protection against inflation that the Producer Price Index gave as of the date hereof, and, for all periods following the date of such Index Change, such new index shall replace the Producer Price Index for all purposes herein. If the Company and the Operator are unable to agree, a new index will be determined by arbitration in accordance with Article 26 and, for all periods following the date of such Index Change, such new index shall replace the Producer Price Index for all purposes herein.
Annual Fee Escalator. The Annual Fixed Fee and all hourly rates in this Agreement shall be adjusted at the beginning of each subsequent fiscal year during the term of this Agreement by the lesser of 5% or in accordance with the changes in the Consumer Price Index (CPI-U) for all Urban Consumers applicable to the Napa area using the most recently published month annual percentage change for “All Items,” but in any event such increase shall not be less than 3%.