THIS AGREEMENT is made by and between _____
(“Agent”) and _____
(“Owner”), a Minnesota city generally exempt
from paying state sales and use tax under ________; and
WHEREAS, Owner is undertaking the
construction on its property of certain improvements generally described as
_____ ("the Project”);
WHEREAS, Owner wishes to purchase on its own
account materials, supplies and equipment for the Project (collectively
“Tax-Exempt Materials”) as described in Exhibit A, attached hereto;
WHEREAS, Owner has solicited separate bids
for the Tax-Exempt Materials, the award of which was not contingent upon the
successful award of any other part of the Project;
WHEREAS,
Agent is the successful bidder for the Tax-Exempt Materials; and
WHEREAS, Agent desires to act as Owner’s
purchasing agent for purposes of acquiring the Tax-Exempt Materials for use
exclusively in the Project
IT
IS THEREFORE AGREED between the parties hereto that:
1.
This
Agreement is made with reference to, and where applicable shall be governed by,
the specifications and provisions set forth in the Contract Documents as such
are defined in the Owner/Contractor Agreement for the Project.
2.
Owner
appoints Agent to act as its purchasing agent for purchasing the Tax-Exempt
Materials, and further authorizes Agent to appoint such subagents as Agent
deems appropriate for carrying out the purposes of this Agreement, which
subagents shall have similar powers of appointment.
3.
It
is understood and agreed that: (a) Owner takes title to the Tax-Exempt
Materials at the point of delivery; (b) Owner
assumes the risk of loss for all TaxExempt Materials; and (c) Owner bears all
risk for defects in the Tax-Exempt Materials, including Tax-Exempt Materials
incorporated into the real estate.
4.
Agent
(and any subagents) shall include the following Notice to Vendors/Suppliers in
all purchase orders and other documents furnished to a vendor or supplier in
connection with the purchase of any Tax-Exempt Materials:
NOTICE
TO VENDORS/SUPPLIERS
The materials to which this document relates are being
purchased by _____ (name of Agent) as the purchasing agent of _____ (“the
Owner”). It is the Owner’s obligation, not the purchasing agent’s, to pay for
the materials. Because the Owner is a city of Minnesota, this purchase is
exempt from sales tax under Minn.
Stat. § 297A.70.
5.
Agent
shall exercise reasonable care in performance of its duties as purchasing
agent, including the inspection of the Tax-Exempt Materials for obvious or
apparent defects or the failure of such materials to conform to the plans,
specifications and all Contract Documents relating to the Project.
6.
Owner
shall pay the sum of _____ for all of the Tax-Exempt Materials purchased by
Agent under this Agreement.
Or use one of these alternate provisions:
Owner shall pay the cost of all Tax-Exempt
Materials purchased by Agent under this Agreement, which cost is estimated to
be $ _____ plus a _____% purchasing agent's fee.
Or
Owner shall pay the cost of all Tax-Exempt
Materials purchased by Agent under this Agreement, plus a _____% purchasing
agent fee, up to a maximum of $_____ including the purchasing agent fee.
Agent shall direct vendors and suppliers to
deliver invoices for the Tax-Exempt Materials to Owner in care of Agent at
_____ (Agent’s address). Agent shall submit invoices for payment to Owner,
which invoices shall be due and payable upon Owner’s receipt of the invoices.
7.
Agent
shall promptly notify Owner of any sales and use tax audit by the Minnesota
commissioner of Revenue or of the threatened imposition or assessment of any
sales or use taxes. Owner may, at its sole option and cost, dispute, contest or
otherwise resist the imposition or assessment of any such taxes. Upon
reasonable notice to Owner, Agent may (but is not obligated to) take such
actions as it deems reasonable in response to the threatened imposition or
assessment of taxes, which actions shall be deemed to have been taken on
Owner’s behalf. If any Minnesota sales or use
taxes are imposed or assessed with respect to any Tax-Exempt Materials
purchased pursuant to this Agreement, Owner shall be solely responsible for the
payment of such taxes, including any related penalties and interest, and shall
hold Agent harmless and indemnify Agent from any such cost or expense related
thereto, including any legal fees and costs incurred by Agent in connection
therewith or in connection with the enforcement of this paragraph.
8.
The
agency relationship created by this Agreement is intended to be in compliance
with _________ Rule and its current interpretation by the Minnesota Department
of Revenue.
9.
The
alternative dispute resolution provisions (if any) in the Owner/Contractor
Agreement are incorporated herein by reference and are applicable to any
dispute between the parties hereto arising out of this Agreement.
10.
Owner
may terminate this Agreement at any time and for any reason. Upon receiving
notice of termination, Agent shall cease making any purchases and shall
promptly notify any subagents it has appointed that such appointment has
likewise been terminated, that they are to cease initiating any new purchases,
and that they are to likewise notify any subagents they have appointed that
they are to cease initiating any new purchases. Any purchases that were
initiated by Agent or subagent prior to its receiving notice of termination and
that cannot be reasonably reversed after it received notice of termination
shall be deemed to have been made with authority.
11.
The
provisions of this Agreement shall be binding upon and inure to the benefit of
the parties and their respective heirs, legal representatives, assigns, and any
subagents appointed pursuant to this Agreement.
IN WITNESS WHEREOF, the parties hereto have
executed this Agreement this _____day of _____, 20_____.
OWNER: By:
__________________________________________
Its: __________________________________________
AGENT: By:
__________________________________________
Its: __________________________________________
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