Adjustment Based on COGS Sample Clauses
The "Adjustment Based on COGS" clause establishes a mechanism for modifying payment amounts or contract terms in response to changes in the cost of goods sold (COGS). Typically, this clause allows for periodic review of actual COGS compared to initial estimates, with adjustments made to pricing, fees, or other financial terms to reflect any significant variances. For example, if the supplier's COGS increases due to market fluctuations, the contract price may be increased accordingly. The core function of this clause is to ensure that both parties share the risk of cost changes fairly, maintaining the economic balance of the agreement and preventing unexpected financial burdens on either side.
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Adjustment Based on COGS. Notwithstanding Sections 6.5.1 and 6.5.2(a) and (b) above, if (i) the Manufacturing Costs of the units of a particular Licensed Product for which Net Sales were received in a Calendar Quarter, expressed as a percentage of such Net Sales [***], and (ii) such Manufacturing Costs plus the Adjusted Royalty Rate applicable to such Net Sales (“COGS + Royalty”), [***], then [***]. For clarity, (A) the adjustment in this clause (c) shall be determined on a global basis using aggregate global Net Sales and aggregate Manufacturing Costs of the applicable Licensed Product in the applicable Calendar Quarter and (B) if no adjustments under Sections 6.5.2(a) and (b) are applicable, the adjustments under this clause (c) will apply to the Base Royalty Rate. *** Certain information in this agreement has been omitted and filed separately with the Securities and Exchange Commission. [***] indicates that text has been omitted and is the subject of a confidential treatment request.