Legal Price Escalation Addendum

LEGAL PRICE ESCALATION ADDENDUM

This Price Escalation Addendum (the "Addendum") is made as of the by and between Client Name: Client Address: and Supplier Name: Supplier Address: (each a "Party" and together the "Parties") with respect to the Master Agreement effective date: .

RECITALS

WHEREAS, the Parties entered into the Master Agreement referenced above under which Supplier provides certain goods and/or services described therein; and

WHEREAS, the Parties desire to establish an agreed mechanism for adjusting prices to reflect changes in specified cost drivers and to set forth the procedure for notification, calculation and implementation of price adjustments; and

WHEREAS, the Parties intend that this Addendum govern all future price adjustments for the goods and services identified in Section 1 below, subject to the limitations and procedures set forth herein.

NOW, THEREFORE, in consideration of the mutual covenants contained herein, the Parties agree as follows:

1. DEFINITIONS

For purposes of this Addendum, the following terms shall have the meanings set forth below:

(a) "Base Price" means the price in effect under the Master Agreement for the applicable good or service immediately prior to the first Adjustment Date specified in Section 3. Base Price (per item or per unit) to which escalation applies:

(b) "Adjustment Date" means the date on which an escalation adjustment becomes effective as specified in Section 3.

(c) "Index" means the price index specified by the Parties in Section 2(a) to be used for index-based adjustments.

2. SCOPE OF APPLICATION

This Addendum applies to the following goods and services provided under the Master Agreement:

The Parties elect the following escalation mechanism (select all that apply and complete the corresponding fields below):

Index-Based Escalation (e.g., consumer price index or sector-specific index). If selected, identify Index name:

Formula-Based Escalation (fixed percentage). If selected, state percentage per period:

Cost-Component Escalation (by reference to specified cost components). If selected, identify components:

3. CALCULATION & IMPLEMENTATION

Adjustment Frequency (select one or more as agreed): Monthly Quarterly Annual

For Index-Based Escalation, the Adjustment on each Adjustment Date shall be computed as:

New Price = Base Price × (Index_current / Index_base), where "Index_current" is the Index value for the reference period immediately prior to the Adjustment Date and "Index_base" is the Index value for the base period identified below.

For Formula-Based Escalation, the Adjustment shall be the stated percentage applied to the Base Price on each Adjustment Date. Rounding shall be to two decimal places.

4. NOTICE AND DOCUMENTATION

Supplier shall deliver written notice of any proposed adjustment to Client at least calendar days prior to the proposed Adjustment Date. The notice shall include the calculation used to arrive at the new price and supporting documentation reasonably sufficient to substantiate the adjustment.

Client shall have thirty (30) calendar days from receipt of the notice and supporting documentation to dispute the calculation in good faith. If the Parties do not resolve a dispute within thirty (30) calendar days, the Parties shall submit the dispute to the dispute resolution procedure specified in the Master Agreement; provided, however, that pending resolution of the dispute, Supplier may invoice at the adjusted price and Client may withhold only the amount genuinely disputed in good faith.

5. INVOICING & PAYMENT

Following an Adjustment Date, Supplier shall issue revised invoices reflecting the adjusted prices. Such invoices shall separately identify the portion of the invoice attributable to the price adjustment, include the calculation and supporting documentation, and conform to the invoicing requirements of the Master Agreement. Payment terms shall remain as provided in the Master Agreement except as expressly amended herein.

6. AUDIT RIGHTS

Upon written request and during regular business hours, Client shall have the right to audit Supplier's records reasonably related to any price adjustment. Supplier agrees to retain supporting records for a period of at least three (3) years following the relevant Adjustment Date. Any audit shall be conducted at Client's expense unless the audit reveals an overcharge in excess of one percent (1%), in which case the cost of the audit shall be paid by Supplier and Supplier shall reimburse Client for the overcharge, plus interest at the rate specified in the Master Agreement.

7. TERMINATION FOR EXCESSIVE ESCALATION

If, during any consecutive twelve (12) month period, cumulative adjustments exceed the Cap set forth in Section 3, Client may, by providing written notice to Supplier delivered within days, elect to terminate the Master Agreement without penalty upon an effective termination date specified in the notice. Termination under this Section shall be in addition to any other rights the Parties may have under the Master Agreement.

8. CONFIDENTIALITY

All information exchanged pursuant to this Addendum, including pricing calculations and supporting documentation, shall be treated as Confidential Information under the confidentiality provisions of the Master Agreement. Such information shall be used solely for purposes of implementing and enforcing this Addendum.

9. NOTICES

Except as otherwise provided herein, notices required or permitted under this Addendum shall be given in writing and delivered to the Parties at the addresses set forth below:

10. GOVERNING LAW; DISPUTE RESOLUTION

This Addendum shall be governed by and construed in accordance with the laws specified in the Master Agreement. Any dispute arising out of or relating to this Addendum shall be resolved pursuant to the dispute resolution procedures set forth in the Master Agreement unless otherwise agreed in writing by the Parties.

11. ENTIRE AGREEMENT; AMENDMENT; WAIVER

This Addendum, together with the Master Agreement, constitutes the entire agreement with respect to the subject matter hereof and supersedes all prior and contemporaneous understandings. No amendment, modification or waiver of any provision of this Addendum shall be effective unless in writing and signed by authorized representatives of both Parties. No failure or delay by either Party in exercising any remedy shall operate as a waiver of that remedy.

12. SEVERABILITY; COUNTERPARTS

If any provision of this Addendum is held to be invalid or unenforceable, the remaining provisions shall remain in full force and effect. This Addendum may be executed in counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same instrument.

The Parties acknowledge that they have read, understand and agree to be bound by the terms of this Addendum and that the individuals signing below are authorized to execute this Addendum on behalf of their respective Parties.

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