Common use of Pursuant to Section 5 Clause in Contracts

Pursuant to Section 5. 1(a), it is the intent of the Parties that, for the calendar years 2018, 2019 and 2020 and January 1 through March 31, 2021, the Scheduled Fees be based on Costs. On April 1, 2021, Lilly may by written notice increase all Scheduled Fees by a xxxx-up of seven percent (7%). On and after January 1, 2022 and for each calendar year thereafter during the Term, all Scheduled Fees will have their price adjusted by a percentage equal to the percentage change in the Consumer Price Index (All Urban Consumers) issued by the United States Bureau of Labor Statistics over the prior year. Notwithstanding the foregoing, if at any time a Party believes that (i) the Scheduled Fee contemplated by a specific Scheduled Service in Exhibit A or Exhibit C is materially insufficient or materially excessive, in each case by an amount equal to or greater than the Scheduled Service Margin with respect to compensation for the actual Cost (plus any applicable xxxx-up or surcharge after April 1, 2021) of providing such Scheduled Service it is obligated to provide hereunder or (ii) the aggregate total of the Scheduled Fees contemplated by all of the Scheduled Services in Exhibit A or Exhibit C, is materially insufficient or materially excessive, in each case by an amount equal to or greater than the Aggregate Scheduled Service Margin, in each case including as a result of a change in circumstances, it shall notify the other Party by or before the following August 1, and the Parties hereto will commence good-faith negotiations toward an agreement in writing as to the appropriate course of action with respect to pricing of such Scheduled Service(s) in the context of the annual discussions of each of the Parties’ business plans to ensure that the Service Provider is compensated in accordance with the foregoing principle. If any such Scheduled Fee(s) are agreed to be adjusted as a result of such discussions, such adjusted Scheduled Fee(s) shall be effective as of the following January 1 and Exhibit A or Exhibit C, as applicable, shall be amended accordingly. Without limitation of the foregoing, the Parties acknowledge and agree that additional employee hiring or retention costs not covered by any Service Fees may be reasonably incurred by a Service Provider to hire or retain necessary employees to provide a Service, which costs shall be for the account of the Service Recipient and shall be reimbursed by the Service Recipient to Service Provider in accordance with Section 5.1(a) as a Service Fee. Prior to incurring any such employee hiring or retention costs, the Service Provider shall provide the Service Recipient with ninety (90) days’ written notice of the reasonable need to incur such costs. The Service Recipient shall have thirty (30) calendar days from the date of receipt of such notice to provide the Service Provider with written confirmation as to whether it desires for such costs to be incurred in connection with the provision of the relevant Service. If the Service Recipient does not timely provide such confirmation or otherwise confirms that it does not desire such costs to be incurred in connection with the provision of the relevant Service, the Service Provider shall not incur such costs and shall thereafter have no obligation to provide the relevant Service under this Agreement. If the Service Recipient does timely provide such confirmation that it desires such costs to be incurred in connection with the provision of the relevant Service, such costs shall be borne by the Service Recipient and incorporated into the relevant Service Fee.