This first supply agreement template has 17 pages and is a MS Word file type listed under our sales & marketing documents.
Sample of our first supply agreement template:
FIRST SUPPLY AGREEMENT This First Supply Agreement (the "Agreement") is effective [DATE], BETWEEN: [YOUR COMPANY NAME] (the "Supplier"), a company organized and existing under the laws of the [State/Province] of [STATE/PROVINCE], with its head office located at: [YOUR COMPLETE ADDRESS] AND: [COMPANY NAME] (the "Client"), a company organized and existing under the laws of the [State/Province] of [STATE/PROVINCE], with its head office located at: [COMPLETE ADDRESS] WHEREAS the Client has been providing for its [SPECIFY PRODUCT] requirements through its [SPECIFY] division and through supply agreements entered into with suppliers not affiliated with the Client; WHEREAS the Supplier has acquired on this day the Client's [SPECIFY] division and, in connection therewith, the parties have agreed to enter into this Agreement; WHEREAS the Client has agreed to grant the Supplier the right to continue to supply at competitive prices such part of the Client's [SPECIFY PRODUCT] requirements as has been provided for by said [SPECIFY] division until this day; THEREFORE, in consideration of the foregoing and mutual covenants herein contained, the parties agree as follows: SECTION 1 Subject to the terms and conditions contained in this Agreement, the Client hereby grants to the Supplier the right to continue to supply such part of the Client's [SPECIFY PRODUCT] requirements as has been provided for by the [SPECIFY] division of the Client until the date hereof, the whole in the amounts provided in Section 2 and for a period starting on the date hereof and ending on [DATE]. SECTION 2 During the term of this Agreement and subject to the terms hereof, the Client shall purchase [SPECIFY PRODUCT] from the Supplier as follows: Year 1 (period ending [DATE]) - [PERCENTAGE %] percent of the total [SPECIFY PRODUCT] requirements of the Client (in volume) that would have otherwise been provided for by the [SPECIFY PRODUCT] division for such period; Year 2 (i.e. [NUMBER]-month period ending [DATE]) - No less than [PERCENTAGE %] percent of the total [SPECIFY PRODUCT] requirements of the Client (in volume) that would have otherwise been provided for by the [SPECIFY PRODUCT] division for such period; Year 3 (i.e. [NUMBER]-month period ending [DATE]) - No less than [PERCENTAGE %] percent of the total [SPECIFY PRODUCT] requirements of the Client (in volume) that would have otherwise been provided for by the [SPECIFY PRODUCT] division for such period. Year 4 (i.e. [NUMBER]-month period ending [DATE]) - No less than [PERCENTAGE %] percent of the [SPECIFY PRODUCT] requirements of the Client (in volume) that would have otherwise been provided for by the [SPECIFY PRODUCT] division for such period. It is understood between the parties that this Agreement shall not preclude Client from buying or from continuing to buy from and after the date hereof any other [SPECIFY PRODUCT] requirements from any third-party supplier that is not supplied by the [SPECIFY PRODUCT] division at the date hereof or that would not otherwise be supplied by it to the Client after the date hereof, and that to determine the purchase obligations of the Client towards the Supplier pursuant to this Agreement, there shall not be taken into account any such [SPECIFY PRODUCT] requirements of the Client supplied by any such third party. Client represents and warrants that for the calendar year [YEAR], its total [SPECIFY PRODUCT] purchases from the [SPECIFY PRODUCT] division were as set out in Schedule 1. SECTION 3 Prior to [DATE] of each year during the term of this Agreement, the Client shall inform the Supplier of the estimated total annual [SPECIFY PRODUCT] requirements that would have otherwise been provided for by the [SPECIFY PRODUCT] division for the following year and shall thereafter update such estimates quarterly. In addition, the Client shall promptly and regularly inform the Supplier of any changes thereto. For the period beginning [DATE] and ending [DATE], the Client has furnished said estimated [SPECIFY PRODUCT] requirements, which is attached hereto as Schedule 2. Such requirements are being furnished to Supplier for greater clarity only and to facilitate the production schedule for the [YEAR] calendar year and do not constitute a representation as to actual [SPECIFY PRODUCT] requirements. SECTION 4 Beginning in the calendar year [YEAR], the Client shall furnish Supplier yearly, no later than [NUMBER] days following the end of the preceding calendar year, with a certificate specifying its total annual [SPECIFY PRODUCT] requirements that would otherwise have been provided for by the [SPECIFY PRODUCT] division for such period and actual purchases from Supplier for such preceding year. Such certificate shall specify the requirements for each category of [SPECIFY PRODUCT] as well as actual purchases for each such category. Subject to Section 4.3, in the event the Client fails to meet its overall purchase obligations specified in Section 2 for any year, the Client shall pay to the Supplier an amount equal to the gross profit margin that would otherwise have been made by the Supplier if the Client had not defaulted with respect to such minimum purchase obligations. Such amount shall be equal to the result of the application of the following formula: (A - B) x C where A = for such one-year period, the minimum purchase obligations (in volume) of the Client calculated pursuant to Section 2 on the basis of the actual total [SPECIFY PRODUCT] requirements determined pursuant to paragraph 4.1 or paragraph 5.1, as the case may be; B = for such one-year period, the actual bag purchases of the Client (in volume) as described in the Client's certificate referred to in paragraph 4.1 or in Client's external auditors' certificate referred to in Section 5.1; C = for such one-year period, the yearly average Gross Profit Margin (as this term is defined in Schedule 3(a) hereto) per [SPECIFY PRODUCT] for which the Client has not met its purchase obligations based on the applicable percentage stipulated in Section 2. For the purpose of the application of this paragraph 4.2, Supplier shall furnish Client, if requested by Client, within [NUMBER] days of receipt of Client's certificate referred to in paragraph 4.1, a certificate specifying its actual Gross Profit Margins for the year covered by Client's certificate for each product for which the Client has not met its purchase obligations based on the applicable percentage stipulated in Section 2. Any amount due pursuant to this paragraph 4.2 shall be payable by the Client within [NUMBER] days of receipt by Supplier of Client's certificate referred to in paragraph 4.1 or within [NUMBER] business days of receipt by Supplier of Client's external auditors' certificate referred to in paragraph 5.1. It is understood by the parties that the amount to be paid by the Client in conformity with this Section 4.2 shall be the sum of the results obtained by the application of the formula described hereabove with respect to each type of bags for which the Client has not met the purchase obligations for any such period based on the applicable percentage stipulated in Section 2. In the event that, for any given year for which any amount is payable by Client pursuant to Section 4.2, Client purchases [SPECIFY PRODUCT] of any category from Supplier over and above the purchase obligations of Client based on the applicable percentage stipulated in Section 2, then the amount payable pursuant to Section 4.2 shall be reduced by an amount equal to the result of the application of the following formula: (A - B) x C where A = for such one-year period, the actual [SPECIFY PRODUCT] purchases of the Client (in volume) as described in the Client's certificate referred to in paragraph 4.1 or in Client's external auditors' certificate referred to in Section 5.1;
