Common use of Cost of Products Clause in Contracts

Cost of Products. The Licensee and Licensor agree that the profit to be recognized by each party shall be equal to fifty percent (50%) of the profit (defined under GAAP and, in this case, as the final selling price by the Licensee to a third party less the actual cost of the Product paid for by the Licensor to have the Product ready for resale). Therefore, the Product will be maintained in a facility controlled by the Licensor until the time for shipment to a customer of the Licensee. The Licensee shall ▇▇▇▇ the third party and provide a copy of the invoice to the Licensor. The Licensor shall invoice the Licensee for the actual cost of the Product as incurred by the Licensor, inclusive of product cost, freight for delivery to the Licensor, applicable taxes, and any additional costs related to the delivery of the Product to the buyer of the Product, plus fifty percent (50%) of the difference between the final selling price and the delivered cost. Therefore, the Licensee and the Licensor shall recognize an identical profit on the sale. The payment by the Licensee to the Licensor shall be within fifteen (15) days of receipt of payment from the buyer to the Licensee.