DRAFT FOR DISCUSSION

DRAFTED BY
SRIDHARA BABU N
LEGAL DOCUMENTATIONS

9880339764

AGENCY AGREEMENT

AN AGREEMENT made this ..........................day of.......................... 200.. BETWEEN M/S

……………………………………………………………………………………………………………
… a company registered under companies act 1956, having its registered office at
………………………..
……………………………………………………………………………………. Duly represented
by its GPA holder Mr …………………………………. S/O
…………………………………………………. Aged …… years resident of
…………………………………………………………………………….., Herein afterwards
called as the company, unless repugnant to the context herein the word shall mean
and include its successors in office, administrators, executors of the one part and Mr
…………………………………. S/O …………………………………………………. Aged ……
years resident of ……………………………………………………………………………..,
Herein afterwards called as the agent, unless repugnant to the context herein the word
shall mean and include his heirs for any dues and liability as an agent of the other part

WHEREBY IT IS AGREED as follows:

1. The company hereby appoints the agent as its sole selling agent
in the areas described in the A schedule hereto (hereinafter called the
territory) to obtain orders from business houses therein for the
 products of the company set out in the B schedule hereto (hereinafter
called the products) on the terms and subject to the conditions
hereinafter set out.

2. The agency hereby created shall commence on the..........................

of...................... 200 .. and shall continue until determined as hereinafter
provided.

3. It shall be the duty of the agent to use his best endeavors to maintain
and increase the sale of the products and to represent properly the
interests of the company within the territory by systematic canvassing
either personally or with the assistance of his travelers by assisting in
advertising schemes which the company may organize within the
territory and in all other practicable ways. Provided always that the
agent shall not incur any expenditure on advertising except with the
previous express authority of the company in writing.

4. All orders solicited by the agent shall be solicited only at the prices and
on the conditions of sale set out in the company's current price list
applicable to the territory unless the previous express authority of the
company in writing has been obtained.

5. All orders obtained by the agent shall be forwarded immediately to the

company at its registered address or such other address as may
subsequently be notified to the agent.

6. In consideration for the services to be performed by the agent for the

company the company agrees to pay the agent an annual sum of
Rs.........………………………….. payable in arrear in equal installments at
intervals of........................... months) and in a commission
of................................ Percent on the invoiced price [less Income-
Tax/service tax/ other taxes] of orders executed on behalf of customers
introduced by the agent including repeat orders from those customers.
No commission shall be payable in respect of bad debts or on
replacements made free of cost by the company.
 7. The company hereby agrees with the agents that it
will during the continuance of this agreement:

a. At its own expense supply the agents with such amount of samples
patterns instruction books technical pamphlets catalogues and
advertising material as it consider reasonably sufficient with a view to
promoting sales of the products within the agency district.

b. Provide the agents with a stock of the goods free of all expense of
delivery to the agents' premises to the value of Rs............... according to
the company's price list and replenish every …………… months such
stock so as to keep it at that value Provided always that the agents
shall have no right of action against the company for delay occasioned
by shortage of stock delays in transit accidents strikes or other
unavoidable occurrence in replenishing such stock;

c. Where practicable refer all inquiries for the goods received from
addresses within the agency district to the agents. Provided that if it is
impracticable in the opinion of the company so to refer such inquiries
the company shall have the right to supply the goods direct to
addresses within the agency district and will pay to the agents in
respect thereof such remuneration as is specified in clause
………………… hereof.

d. The commission payable in pursuance of clause ………….. hereof shall

be payable at the end of each …………………………… in respect of
invoices paid in full during that ………………… except that where
payments by customers are made in installments the agent shall be
credited with proportionate part of the commission on receipt by the
company of each such installment and the installment shall be deemed
to be payment in full for the purpose of determining the commission
payable in the appropriate period.
e. The agent shall during the continuance of this agreement in all matters
act loyally and faithfully to the company and during the continuance of
this agreement and for a period of................... years after the
termination of this agreement for any cause whatsoever shall not
engage or be interested either directly or indirectly whether as principal
agent or employee in any business competing with that of the company
within a radius of............ form..............

8. The company may determine the agency

immediately at any time hereinafter on the happening
of any one or more of the following events,
a. Should the agent die or in the opinion of the company from
any cause become incapable of carrying out the terms of the
agency and his duties hereinafter.
b. Should the agent become bankrupt or make composition
with his creditors or being a company go into liquidation either
voluntary or compulsory or should the agent's position at any
time be such that in the opinion of the company it is inexpedient
for the agent to continue to act as agent.
c. Should the agent being a partnership firm without the written
consent of the company previously given alter the constitution of
the firm either by dissolution or by retirement of a partner or by
taking any new partner or partners or otherwise change the
constitution organization or management of the agent's business.
d. Should statutory restrictions be levied upon the agent's
goods.

9. The agency may subject as aforesaid be terminated at any time by

either party giving to the other three calendar months' notice in writing.
Provided that the company may if it so chooses pay to the agent in lieu
of notice a sum equivalent to ………………………. of the amount of
commission earned by him during the …………. Completed quarters of
the agent's service hereunder immediately prior to the date of the
termination of the agency or if the agent's service is less than ………
year then a sum equivalent to the amount of …………………….. earned
by the agent during the last completed quarter of the agent's service.
10. The company reserves to itself the right notwithstanding
anything to
the contrary herein contained:

a. To continue to sell and supply the goods to the customers in the

agency district listed in the second schedule hereto [in pursuance
of contracts currently in force between the company and those
customers] and no right to commission shall accrue to the agents
in respect of any such sale;

a. To vary the first schedule hereto defining the goods either by the
withdrawal there from of a class or classes of goods named
therein in the event of the company ceasing to manufacture that
class or those classes of goods or by addition thereto after
consultation with [or with the agreement of] the agent a further
class or of further classes of goods of the company;
b. If in the opinion of the company the agents are not at any time
adequate sales coverage throughout the whole of the agency
district an prejudice to any other of its rights under this
agreement either to vary the of the agency district so as to
exclude from this agreement such part of that district as it thinks
fit or to vary the first schedule hereto so as to exclude from the
agreement such one or more of the classes of goods therein set
out as it thinks fit or to take both these courses of action save that
neither such course of action shall be taken without prior
consultation with the agents;

a. In the event of its business or any part thereof (being a part

concerned in the manufacture of the goods to which this
agreement relates or any class of those goods) being transferred
to any other company to assign its rights and obligations under
this agreement to that other company after giving [one] month's
notice of such assignment in writing to the agents
11. The agents hereby undertake and
agree with the company that they will at all times
during the continuance in force of this agreement
observe and perform the terms and conditions set out
in this agreement and in particular

a. Will use their best endeavors to promote and extend the

sales of the goods throughout the agency district to all potential
purchasers thereof and work diligently to obtain orders therefor;

b. Will in all matters act loyally and faithfully to the company

and obey its orders and instructions and in the absence of any
such orders or instructions in relation to any particular matter will
act in such manner as they reasonably consider to be most
beneficial to the company's interests;

c. Will not engage or be interested directly or indirectly as

principal agent or employee in selling goods of any description or
kind similar to those of the company or designed to perform the
like functions as those of the company whether alone or in
conjunction with any other goods without obtaining the previous
consent in writing of the company;

d. Will not sell the goods on terms other than for cash against
delivery unless the consent of the company in writing to give
credit to a particular purchaser has been in each case first
obtained the company reserving the right in the case of any such
credit sales to stipulate for such increase in the price of the goods
over and above full list price as it thinks fit;

e. Will not in selling the goods make any representations or

give any warranties other than those contained in the company's
conditions of sale;

f. Will not sell to any person [or body corporate or

unincorporated] goods which they know or have reason to believe
are intended for resale outside the agency district;
g. Will not sell the goods to any person [or body corporate or
unincorporated] not carrying on trade as..................... except at the
full list price (as herein defined) or to a person [or body] carrying
on that trade except at that price less a discount
of...............................percent and when selling the goods to any
such person [or body] carrying on that trade will bring expressly
to the purchasers notice the company's conditions of sale and in
particular the conditions relating to minimum retail prices. Full list
price means the full retail sale price in respect of the goods as
contained in the company's official price list current at the time of
purchase from the agents [Provided that in the event of this
undertaking by the agents becoming illegal and unenforceable at
law in respect of any class or classes of goods of the
manufacturers subject to this agreement the undertaking shall be
construed as if it applied only to those goods of the company as
are outside such restrictions;

h. Will refer to the company all inquiries for the company's

goods from addresses outside the agency district and from
addresses in the agency's district for resale outside that district
and the agents shall not be entitled to any remuneration in
respect of any sales resulting from any such inquiries;

i. Will at their own expense rent and occupy for the purposes
of the agency suitable premises and will keep insured to their full
value against all risks all goods entrusted to them by the
company under this agreement and on request will produce to the
company the latest receipt for rents rates and taxes of the
premises and for the premiums on insurance policies showing
that the respective payments have been made on or about their
respective due dates preceding the request;

j. Will in all correspondence commercial documents and on

the name plate or other signs at their place of business describe
themselves as selling agents for the company and will not
describe themselves as the company's 'agents except in
conjunction with the word "selling";

k. Will promptly bring to the notice of the company any

information received by them which is likely to be of use or
benefit to the company in marketing the goods and will in
particular notify the company forthwith of any sale of the goods
by any purchaser contrary to the company's conditions of sale
brought to his notice under paragraph ………………….. hereof;

l. Will keep full and proper books of account and records

showing clearly all inquiries transactions and proceedings
relating to the agency and in particular all transactions
undertaken by or through the agents in relation to the goods such
books and records being separate from those relating to matters
not relating to the agency and remaining at all times the property
of the company;

m. Will maintain a separate bank account in respect of money

received by them in respect of sale of the company's goods and
will remit to the company on the first business day in each
[month] all sums received by them in respect of sales of those
goods during the preceding [month] less such amount as they are
permitted to deduct in accordance with clause ……….. hereof.

n. Will allow the authorized officers of the company at all

reasonable times to have access to the agents' premises for the
purpose of inspecting the said books and records and for the
purpose of taking stock of the company's goods on those
premises;

o. Will from time to time upon the written request of the

company supply to the company reports returns and other
information relating to the agency;

p. Will not assign transfer charge or in any manner make over

or purport to assign transfer charge or make over this agreement
or their rights hereunder or any part thereof without obtaining the
previous consent in writing of the company;

q. Will not alter remove or tamper with the marks or numbers on

the goods deposited with them by the company;

r. Will not incur any liability on behalf of the company or in any

way pledge or purport to pledge the company's credit; in the
event of dispute arising between the agents and a purchaser in
relation to the sale of the goods will forthwith inform the company
of the dispute and will not without the company's consent in
writing take any proceedings in respect of or compromise the
dispute or grant a release to any debtor of the company;
 12. This agreement shall be deemed to have been made in India and the
construction validity and performance of this agreement shall be
governed in all respects by Indian Law.

13. The text of this agreement herein written in English language is the
authentic text and any difficulties of uncertainties in interpretation
arising shall be solved solely by reference to this text.

14. All
previous agreements and arrangements if any made between the
company and the agents are hereby cancelled but without prejudice to
any rights which have already accrued thereunder to either party.

15. Thisagreement embodies the entire understanding of the parties and

there are no promises terms conditions or obligation oral or written
express or implied other than those contained herein.

16. Any notice required to be given hereunder shall be sufficiently given to

the agents if forwarded by registered post cable telegraph telex or
wireless telegraphy to the last known postal address of the agents in
territory and shall be sufficiently given to the company if similarly
forwarded to its registered office in India. Every notice shall be deemed
to have been received and given at the time when in the ordinary
course of transmission it should have been delivered at the address to
which it was sent.

17. The words "in writing" whenever contained in this agreement shall be
deemed to include any communication sent by letter telegram or
wireless telegraphy.

Any dispute difference or question which may arise at

any time hereafter between the company and the agent
touching the true construction of this agreement or the
 rights and liabilities of the parties hereto shall unless
otherwise herein expressly provided, be referred to the
decision of a single arbitrator to be agreed upon
between the parties or in default of agreement to be
appointed at the request of the either party in
accordance with and subject to the provisions of the
Arbitration and Conciliation Act, 1996 or any statutory
modification or re-enactment thereof for the time being
in force.

A- SCHEDULE

…………………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………………
………………………………………………………………………………………………..

B- SCHEDULE

…………………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………………
…………………………………………………………………………………………………………………………………
………………………………………………………………………………………………..

COMPANY

GPA LTM FOR SIGNATURE

IDENTIFICATION
HOLDERS
Photo

WITH
COMPANY
SEAL
Name:…………………………………….

AGENT

Photo
LTM FOR SIGNATURE
IDENTIFICATION

Name:…………………………………….

Witnesses

1. Name……………………………..

S/O……………………………….
Adress……………………………
……………………………………
…………………………………….
……………………………………. SIGNATURE
 2. 2 Name……………………………..

S/O……………………………….
Adress……………………………
……………………………………
…………………………………….
……………………………………. SIGNATURE