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SAMPLE EXCLUSIVE PURCHASING AGENCY AGREEMENT
This exclusive purchasing agency agreement is between
The Company is engaged in the business of
The Company wishes to engage the Purchasing Agent as its exclusive independent purchaser of the Merchandise (as defined in section 1(a)) in those territories identified in section 6 (collectively, the "Territory") for the Company, and the Purchasing Agent wishes to accept this engagement.
The parties therefore agree as follows:
1. ENGAGEMENT; SERVICES.
- (a) Engagement. The Company hereby appoints the Purchasing Agent as its exclusive representative to procure certain products for the Company, including those goods listed in Exhibit A (the "Merchandise"), in the Territory. This is an exclusive appointment and the Company warrants that it has not entered into purchasing agency agreements with any other agents, or that any previous purchasing agency agreement has been terminated. The Purchasing Agent hereby accepts the appointment and agrees to procure the Merchandise on an exclusive basis.
- (b) Services. The Purchasing Agent shall:
- (i) negotiate with independent manufacturers, suppliers, and vendors about prices, terms, and deliveries of Merchandise and other items and materials relating to the production of that Merchandise to obtain the most favorable rates and terms for the Company;
- (ii) in connection with its negotiations, visit manufacturers, obtain samples of Merchandise, submit those samples to the Company, and cite prices at which the Merchandise can be obtained;
- (iii) enter into purchasing agreements with independent manufacturers and vendors with respect to Merchandise, but act only on the explicit instructions of the Company;
- (iv) when requested, arrange for transportation or appropriate insurance coverage related to shipment and delivery of the Merchandise to the Company, although the Company shall pay those fees and for that coverage;
- (v) familiarize itself with the Company's needs and survey potential markets to obtain the best possible Merchandise;
- (vi) engage in market research activities and generally keep the Company advised of market trends, sources of supply, and new items, including procurement of samples;
- (vii) accurately represent and state Company policies to all potential and present manufacturers and vendors;
- (viii) provide inspection certificates for each shipment, as requested by the Company;
- (ix) inform the Company if it intends to negotiate with suppliers, manufacturers, or vendors about purchases of Merchandise outside of the Territory;
- (x) maintain contact with the Company via telephone, email, or other agreed on means of communication with reasonable frequency to discuss purchasing activities within the Territory;
- (xi) disclose any problems concerning suppliers (including Existing Suppliers, as defined in section 7(b)) to the Company; and
- (xii) perform other services (including negotiations and payment) (A) reasonably related to any of the other obligations, or (B) agreed to in writing by the parties.
- (c) The Company shall:
- (i) work exclusively with the Purchasing Agent in procuring the Merchandise, and not with any other agent or representative;
- (ii) provide the Purchasing Agent with current information about the Company's merchandise and purchasing needs and requirements;
- (iii) review all submitted samples and contracts, and provide clear and complete instructions to the Purchasing Agent with respect to those; and
- (iv) make timely payments under invoices submitted and of commissions earned under this agreement.
2. TERM AND TERMINATION.
- (a) Term. This agreement will become effective as described in section 21 and continue for an initial term of
year(s) (the "Term"). Unless either party gives written notice to the other at least days before the end of the Term, this agreement will renew automatically for an additional -year term. This automatic extension will continue to apply at the end of each extended period until the agreement is terminated.
- (b) Termination. This agreement may be terminated:
- (i) by either party on provision of
days' written notice before the end of a Term;
- (ii) by either party for a material breach of any provision of this agreement by the other party, if the other party's material breach is not cured within
days of receipt of written notice of the breach; or
- (iii) by the Company at any time and without prior notice, if the Purchasing Agent
is convicted of any crime or offense,fails or refuses to comply with the written policies or reasonable directives of the Purchasing Agent, or is guilty of serious misconduct in connection with performance under this agreement . ; or (iv) automatically, on the death of the Purchasing Agent.
- (i) by either party on provision of
- (c) Effect of Termination. After the termination of this agreement for any reason, the Company shall promptly pay the Purchasing Agent for services rendered before the effective date of the termination. However, the Company will not pay the Purchasing Agent if (i) prohibited under applicable government law, regulation, or policy, or (ii) if the Purchasing Agent is guilty of serious misconduct in connection with performance under this agreement.
- (a) Commissions. The Company shall pay the Purchasing Agent a commission on the value of the Merchandise purchased by the Company through the Purchasing Agent in the Territory, if those purchases were made substantially through the efforts of the Purchasing Agent during the Term. "Commissions" means
% of the invoice value of the Merchandise for orders of the Merchandise placed through the Purchasing Agent (other than from Existing Suppliers or their affiliates).
- (b) Timing of Payment. The Company shall pay the Purchasing Agent's Commissions within
days of the Company's receipt of the Merchandise.
- (c) Defective Merchandise. The Company will not pay a Commission that would otherwise be due to the Purchasing Agent if it is found that defective Merchandise was shipped and that that shipment was made by reason of the Purchasing Agent's negligence.
- (d) No Commissions in Certain Circumstances. No commission shall be payable to the Purchasing Agent under any of the following circumstances:
- (i) if prohibited under applicable government law, regulation, or policy;
- (ii) if the Purchasing Agent did not directly facilitate the purchase of the Merchandise from a manufacturer or vendor;
- (iii) on any purchases from suppliers that are directly or indirectly owned by or under common ownership with the Purchasing Agent;
- (iv) on any purchases outside of the Territory, unless otherwise agreed in writing by the Company;
- (v) on any purchases from Existing Suppliers, unless otherwise agreed in writing by the Company; or
- (vi) on any purchases of Merchandise occurring after the termination of the Term unless:
- A. the purchase takes place within
days after the termination of this agreement; and
- B. the purchase is the direct result of the Purchasing Agent's efforts before that termination.
- A. the purchase takes place within
- (e) No Other Compensation. The compensation set out above will be the Purchasing Agent's sole compensation under this agreement.
- (f) Ordinary Expenses. Any ordinary and necessary expenses incurred by the Purchasing Agent or its staff in the performance of this agreement will be the Purchasing Agent's sole responsibility.
- (g) Taxes. The Purchasing Agent is solely responsible for payment of all income, social security, employment-related, or other taxes incurred as a result of the performance of the services by the Purchasing Agent under this agreement and for all obligations, reports, and timely notifications relating to those taxes. The Company has no obligation to pay or withhold any sums for those taxes.
- (h) Other Benefits. The Purchasing Agent has no claim against the Company under this agreement or otherwise for vacation pay, sick leave, retirement benefits, social security, worker's compensation, health or disability benefits, unemployment insurance benefits, or employee benefits of any kind.
- (a) Invoices. The Purchasing Agent shall invoice the Company for all costs, where possible, in advance of the Purchasing Agent's payment date to allow for prepayment by the Company, so that the Company may receive the benefit of any available prepayment or similar discount. The Purchasing Agent shall attach to each invoice proof of the supplier's charges.
- (b) Sales Taxes and Fees. The Company shall be solely responsible for paying all sales and use taxes imposed on the Merchandise in connection with the original purchase, as well as shipping and handling costs for that Merchandise.
- (c) Discounts. All cash discounts, rebates, or offsets on the Purchasing Agent's purchases shall be available to the Company. However, these discounts will be available only if the Company meets the Purchasing Agent's requisite billing terms and there is no outstanding indebtedness of the Company to the Purchasing Agent at the time of the payment to the supplier.
- (d) Timing of Payment. The Purchasing Agent shall submit the invoices to the Company in an itemized format and the Company shall pay the invoices within 30 days of the invoice date.
5. NATURE OF RELATIONSHIP.
The relationship of the parties under this agreement is one of independent contractors, and no joint venture, partnership, agency, employer-employee, or similar relationship is created in or by this agreement. Neither party may assume or create obligations on the other party's behalf, and neither party may take any action that creates the appearance of that authority.
- (a) Agent Territory. During the Term of this agreement, the Purchasing Agent shall use its best efforts to purchase the Merchandise in the following geographical area (the "Territory"):
- (b) Territory Reallocation. The Company may modify or limit the Territory with
days' written notice to the Purchasing Agent.
7. MANUFACTURERS, SUPPLIERS, AND VENDORS.
- (a) Preferred Customers. The Purchasing Agent's purchasing efforts shall be directed toward the following manufacturers, suppliers, and vendors:
. These manufacturers, suppliers, and vendors are intended only to be examples of the nature and type of market from which the Company desires that the Merchandise be purchased, and should not be construed as a limitation on the contracts that can be made by the Purchasing Agent under this agreement in the Territory.
- (b) Existing Suppliers. The Purchasing Agent acknowledges that the Company has existing relationships with those suppliers listed in Exhibit B (the "Existing Suppliers"), and that no compensation is payable for purchases made by the Purchasing Agent from the Existing Suppliers, unless otherwise agreed by the Company in writing.
8. TITLE TO MERCHANDISE.
Title to all Merchandise purchased by the Purchasing Agent on behalf of the Company immediately vests in the Company.
9. QUALITY OF MERCHANDISE.
- (a) Defective Product - Purchasing Agent. Once orders have been placed for the Merchandise, the Purchasing Agent shall visit the manufacturer to inspect the quality of the Merchandise shipped on the Company's behalf. If, after such inspection, the Purchasing Agent determines that the Merchandise does not conform in quality or specifications to that which was ordered, the Purchasing Agent shall immediately notify the Company and request instructions regarding disposition of the Merchandise.
- (b) Defective Product - Company. If the Company finds that the Merchandise is defective, the Purchasing Agent shall assist the Company in arranging for the return of that Merchandise and shall also assist in the recovery of amounts due from the manufacturer or vendor as result of the defective Merchandise.
- (c) No Warranty. The Purchasing Agent makes no representation about the Merchandise purchased under this agreement and the Purchasing Agent disclaims all warranties, including any implied warranty of merchantability or fitness for a particular purpose. The Company shall look solely to the manufacturer or vendor of the Merchandise for any associated warranties and the Purchasing Agent shall have no liability for the condition or fitness of any of the Merchandise purchased by the Company under this agreement. The Purchasing Agent may not be deemed the vendor of the Merchandise for any purpose. Additionally, the Purchasing Agent shall not be responsible or liable for the unavailability of any Merchandise or the failure of any manufacturer or vendor to timely deliver any Merchandise.
10. USE OF TRADEMARKS.
The Purchasing Agent may use, reproduce, and distribute the Company's service marks, trademarks, and trade names (if any) (collectively, the "Company Marks") in connection with the performance of this agreement. Any goodwill received from this use will accrue to the Company, which will remain the sole owner of the Company Marks. The Purchasing Agent may not engage in activities or commit acts, directly or indirectly, that may contest, dispute, or otherwise impair the Company's interest in the Company Marks. The Purchasing Agent may not cause diminishment of value of the Company Marks through any act or representation. The Purchasing Agent may not apply for, acquire, or claim any interest in any Company Marks, or others that may be confusingly similar to any of them, through advertising or otherwise. At the expiration or earlier termination of this agreement, the Purchasing Agent will have no further right to use the Company Marks, unless the Company provides written approval for each such use.
11. CONFIDENTIAL INFORMATION.
- (a) Confidentiality. During the Term, the Purchasing Agent may have access to or receive certain information of or about the Company that the Company designates as confidential or that, under the circumstances surrounding disclosure, ought to be treated as confidential by the Purchasing Agent ("Confidential Information"). Confidential Information includes information relating to the Company or its current or proposed business, financial statements, budgets and projections, customer identifying information, potential and intended customers, employers, products, computer programs, specifications, manuals, software, analyses, strategies, marketing plans, business plans, and other confidential information, provided orally, in writing, by drawings, or by any other media. The Purchasing Agent will treat the Confidential Information as confidential and will not disclose it to any third party or use it for any purpose but to fulfill its obligations in this agreement. In addition, the Purchasing Agent shall use due care and diligence to prevent the unauthorized use or disclosure of such information.
- (b) Exceptions. The obligations and restrictions in subsection (a) do not apply to that part of the Confidential Information:
- (i) was or becomes publically available other than as a result of a disclosure by the Purchasing Agent in violation of this agreement;
- (ii) was or becomes available to the Purchasing Agent on a nonconfidential basis before its disclosure to the Purchasing Agent by the Company, but only if:
- A. the source of such information is not bound by a confidentiality agreement with the Company or is not otherwise prohibited
- from transmitting the information to the Purchasing Agent by a contractual, legal, fiduciary, or other obligation; and
- B. the Purchasing Agent provides the Company with written notice of its prior possession either (1) before the effective date of
- this agreement or (2) if the Purchasing Agent later becomes aware (through disclosure to the Purchasing Agent) of any aspect
- of the Confidential Information as to which the Purchasing Agent had prior possession, promptly on the Purchasing Agent so
- becoming aware;
- (iii) is requested or legally compelled (by oral questions, interrogatories, requests for information or documents, subpoena, civil or criminal investigative demand, or similar processes), or is required by a regulatory body, to be disclosed. However, the Purchasing Agent shall:
- A. provide the Company with prompt notice of these requests or requirements before making a disclosure so that the Company
- may seek an appropriate protective order or other appropriate remedy; and
- B. provide reasonable assistance to the Company in obtaining any protective order.
- If a protective order or other remedy is not obtained or the Company grants a waiver under this agreement, the Purchasing
- Agent may furnish that portion (and only that portion) of the Confidential Information that, in the written opinion of counsel
- reasonably acceptable to the Company, the Purchasing Agent is legally compelled or otherwise required to disclose. However,
- the Purchasing Agent shall make reasonable efforts to obtain reliable assurance that confidential treatment will be accorded
- any part of the Confidential Information disclosed in this way; or
- (iv) was developed by the Purchasing Agent independently without breach of this agreement.
- (c) Remedy. Money damages may not be a sufficient remedy for any breach of this section by the Purchasing Agent and, in addition to all other remedies, the Company may seek (and may be entitled to) as a result of such breach, specific performance and injunctive or other equitable relief as a remedy.
12. CONFLICTS OF INTEREST.
- (a) No Conflicting Representation. The Purchasing Agent hereby represents to the Company that it does not currently, and during the term of this agreement will not, accept employment from, render services to, represent, or promote any person or entity in connection with any product or service that is competitive with or similar to any product or service of the Company with respect to which the Purchasing Agent is providing any service under this agreement. The Purchasing Agent shall provide the Company with a list of the companies and the products that it currently represents, and notify the Company in writing of any new companies or products when its promotion of those new companies and products starts.
- (b) No Conflicting Purchases. The Purchasing Agent hereby represents that it has no ownership or financial interest in, and no control of, the manufacturers or suppliers making the Merchandise purchased with the assistance of the Purchasing Agent; that it does not, for its own account, sell raw materials to the manufacturers or suppliers making that Merchandise; and that the manufacturers or suppliers have no ownership or financial interest in, or any control, over the Purchasing Agent. If any interest is consummated, the Purchasing Agent will inform the Company immediately.
13. RETURN OF PROPERTY; TRANSFER OF INTERESTS.
- (a) Return of Property. Within
days of the termination of this agreement, the Purchasing Agent shall return to the Company, all property, samples, or models, and all documents, retaining no copies or notes, relating to the Company's business including reports, abstracts, lists, correspondence, information, computer files, computer disks, and all other materials and all copies of that material, obtained by the Purchasing Agent during its work with the Company. All files, records, documents, blueprints, specifications, information, letters, notes, media lists, original artwork or creative work, notebooks, and similar items relating to the Company's business, whether prepared by the Purchasing Agent or by others, remain the Company's exclusive property.
- (b) Transfer of Interests. After termination of this agreement, the Purchasing Agent shall cooperate in arranging the transfer or approval of third-party interests in all agreements and other arrangements relating to the Company after appropriate release from its obligations in those.
- (a) Of Purchasing Agent by Company. At all times after the effective date of this agreement, the Company shall indemnify the Purchasing Agent from all damages, liabilities, expenses, claims, or judgments (including interest, penalties, reasonable attorneys' fees, accounting fees, and expert witness fees) (collectively, the "Claims") that the Purchasing Agent may incur and that arise from:
- (i) the Company's breach of its obligations or representations under this agreement;
- (ii) the negligent, intentional, or other acts of the Company or its employees; or
- (iii) the Company's failure to pay the purchase price of any Merchandise, or any sales or use taxes imposed on that Merchandise, or the cost of shipping and handling any Merchandise.
- However, the Company is not obligated to indemnify the Purchasing Agent if any of these Claims result from the Purchasing Agent's own actions or inactions.
- (b) Of Company by Purchasing Agent. At all times after the effective date of this agreement, the Purchasing Agent shall indemnify the Company and its officers, members, managers, employees, owners, and contractors (collectively, the "Company Indemnitees") from all damages, liabilities, expenses, claims, or judgments (including interest, penalties, reasonable attorneys' fees, accounting fees, and expert witness fees) (collectively, the "Claims") that any Company Indemnitee may incur and that arise from:
- (i) the Purchasing Agent's negligence or willful misconduct arising from the Purchasing Agent's carrying out of its obligations under this agreement;
- (ii) the Purchasing Agent's breach of any of its obligations or representations under this agreement; or
- (iii) the Purchasing Agent's breach of its express representation that it is an independent contractor and in compliance with all applicable laws related to work as an independent contractor. If a regulatory body or court of competent jurisdiction finds that the Purchasing Agent is not an independent contractor or is not in compliance with applicable laws related to work as an independent contractor, based on the Purchasing Agent's own actions, the Purchasing Agent will assume full responsibility and liability for all taxes, assessments, and penalties imposed against the Purchasing Agent or the Company resulting from that contrary interpretation, including taxes, assessments, and penalties that would have been deducted from the Purchasing Agent's earnings if the Purchasing Agent had been on the Company's payroll and employed as a Company employee.
15. FORCE MAJEURE.
A party will not be considered in breach or in default because of, and will not be liable to the other party for, any delay or failure to perform its obligations under this agreement by reason of fire, earthquake, flood, explosion, strike, riot, war, terrorism, or similar event beyond that party's reasonable control (each a "Force Majeure Event"). However, if a Force Majeure Event occurs, the affected party shall, as soon as practicable:
- (a) notify the other party of the Force Majeure Event and its impact on performance under this agreement; and
- (b) use reasonable efforts to resolve any issues resulting from the Force Majeure Event and perform its obligations under this agreement.
16. GOVERNING LAW.
- (a) Choice of Law. The laws of the state of
govern this agreement (without giving effect to its conflicts of law principles).
- (b) Choice of Forum. Both parties consent to the personal jurisdiction of the state and federal courts in
No amendment to this agreement will be effective unless it is in writing and signed by a party or its authorized representative.
18. ASSIGNMENT AND DELEGATION.
- (a) No Assignment. Neither party may assign any of its rights under this agreement, except with the prior written consent of the other party. All voluntary assignments of rights are limited by this subsection.
- (b) No Delegation. Neither party may delegate any performance under this agreement, except with the prior written consent of the other party.
- (c) Enforceability of an Assignment or Delegation. If a purported assignment or purported delegation is made in violation of this section, it is void.
19. COUNTERPARTS; ELECTRONIC SIGNATURES.
- (a) Counterparts. The parties may execute this agreement in any number of counterparts, each of which is an original but all of which constitute one and the same instrument.
- (b) Electronic Signatures. This agreement, agreements ancillary to this agreement, and related documents entered into in connection with this agreement are signed when a party's signature is delivered by facsimile, email, or other electronic medium. These signatures must be treated in all respects as having the same force and effect as original signatures.
If any provision contained in this agreement is, for any reason, held to be invalid, illegal, or unenforceable in any respect, that invalidity, illegality, or unenforceability will not affect any other provisions of this agreement, but this agreement will be construed as if the invalid, illegal, or unenforceable provisions had never been contained in it, unless the deletion of those provisions would result in such a material change so as to cause completion of the transactions contemplated by this agreement to be unreasonable.
- (a) Writing; Permitted Delivery Methods. Each party giving or making any notice, request, demand, or other communication required or permitted by this agreement shall give that notice in writing and use one of the following types of delivery, each of which is a writing for purposes of this agreement: personal delivery, mail (registered or certified mail, postage prepaid, return-receipt requested), nationally recognized overnight courier (fees prepaid), facsimile, or email.
- (b) Addresses. A party shall address notices under this section to a party at the following addresses:
- If to the Purchasing Agent:
- If to the Company:
- (c) Effectiveness. A notice is effective only if the party giving notice complies with subsections (a) and (b) and if the recipient receives the notice.
No waiver of a breach, failure of any condition, or any right or remedy contained in or granted by the provisions of this agreement will be effective unless it is in writing and signed by the party waiving the breach, failure, right, or remedy. No waiver of any breach, failure, right, or remedy will be deemed a waiver of any other breach, failure, right, or remedy, whether or not similar, and no waiver will constitute a continuing waiver, unless the writing so specifies.
23. ENTIRE AGREEMENT.
This agreement constitutes the final agreement of the parties. It is the complete and exclusive expression of the parties' agreement with respect to its subject matter. All prior and contemporaneous communications, negotiations, and agreements between the parties relating to the subject matter of this agreement are expressly merged into and superseded by this agreement. The provisions of this agreement may not be explained, supplemented, or qualified by evidence of trade usage or a prior course of dealings. Neither party was induced to enter this agreement by, and neither party is relying on, any statement, representation, warranty, or agreement of the other party except those set forth expressly in this agreement. Except as set forth expressly in this agreement, there are no conditions precedent to this agreement's effectiveness.
The descriptive headings of the sections and subsections of this agreement are for convenience only, and do not affect this agreement's construction or interpretation.
This agreement will become effective when all parties have signed it. The date this agreement is signed by the last party to sign it (as indicated by the date associated with that party's signature) will be deemed the date of this agreement.
26. NECESSARY ACTS; FURTHER ASSURANCES.
Each party shall use all reasonable efforts to take, or cause to be taken, all actions necessary or desirable to consummate and make effective the transactions this agreement contemplates or to evidence or carry out the intent and purposes of this agreement.
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Each party is signing this agreement on the date stated opposite that party's signature.
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What's an exclusive purchasing agency agreement?
Your company needs quality products at a good price. Plus, you want to make sure whoever's purchasing them on your behalf represents your company in the best light. If you're just starting out or small, it's probably simpler to contract a purchasing agent than add one to your staff. An exclusive purchasing agency agreement details their role and your responsibilities to each other.