This document is an adoption agreement between a purchaser and supplier to adopt the terms of a master agreement for the supply of goods. Key points:
- The adoption agreement makes the purchaser and supplier subject to the terms of the attached master agreement as if they were direct parties to it.
- The agreement contains stipulations that modify some terms of the master agreement, such as the effective date, definition of purchase orders, acceptance of liquidated damages, and governing law.
- Extensive additional obligations of the supplier are attached as exhibits, including safety, insurance, and compliance with laws regarding hazardous materials, bribery, and exports.
1. adoptionagreement-cleandraft-201028122454 CONFIDENTIAL
ADOPTION AGREEMENT
This Adoption Agreement ("Adoption Agreement") is by and between _____________,
Inc. (“Purchaser”), and _____________, LLC, ............................................. (“Supplier”),
collectively (the “Parties”).
This Adoption Agreement is entered into pursuant to the terms and conditions of the
Umbrella Trading Agreement for the supply of ............................................ dated
................................. between ......................, .................................... (“ X ”), and Supplier,
which is attached hereto as Exhibit 1 (the “Master Agreement”). All capitalized terms
used herein and not otherwise defined herein shall have the meanings ascribed to them in
the Master Agreement. In the event of a direct or implied conflict between the terms and
conditions of this Adoption Agreement and the Master Agreement, the terms and
conditions of this Adoption Agreement shall control.
Subject to the stipulations set forth below, the Parties hereby adopt the Master Agreement
with respect to the Goods to be purchased by Purchaser from Supplier under this
Adoption Agreement, and agree to apply and be bound by the terms and conditions of the
Master Agreement as if the Purchaser and the Supplier were contracting parties to the
Master Agreement.
The Parties agree that any subsequent amendment(s) to the Master Agreement shall not
amend this Adoption Agreement unless expressly adopted by the parties. The effect of
the execution of this Adoption Agreement by the parties is that, from and after the
Effective Date, a new and completely separate Agreement will be in place between
Parties that contains the same terms and conditions as the Master Agreement and the
terms incorporated herein, except as expressly modified herein.
The Parties recognize and acknowledge that: (i) for the use and interpretation of the
Master Agreement as referenced by this Adoption Agreement, the term “Purchaser” shall
be substituted for “ X ” for purposes of this Adoption Agreement; (ii.) Purchaser is not a
party to the Master Agreement, and that ‘ X ‘ is not a party to this Adoption Agreement.
Except as otherwise stated above, this Adoption Agreement may only be amended in
writing signed by the Parties.
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STIPULATIONS OF THE ADOPTION AGREEMENT:
(1) The term of this Adoption Agreement will be from: _________, 20___ (the
“Effective date”), and will be coterminous with the Master Agreement.
(2) A “Purchase Order” shall mean an order for work or goods issued by the Purchaser
and addressed to Supplier, detailing the objects to be supplied by Supplier under the
terms and conditions of this Adoption Agreement, including price, quantity,
currency, delivery terms and any special conditions expressly agreed upon in
writing by both Parties hereto and contained herein. A Purchase Order shall be
binding upon issuance by Purchaser and acceptance by Supplier.
(3) The Parties agree that the penalties for delay (if any), set forth in the Master
Agreement are liquidated damages in case of delay of delivery under the
circumstances set out in the Master Agreement, and are not a penalty under the
governing law of this Adoption Agreement. The parties agree that such liquidated
damages shall be a reasonable estimate of the damage Purchaser is likely to suffer
in the event that Supplier fails to perform its obligations in accordance with the
delivery terms required by the Adoption agreement, and shall not constitute a
penalty under the governing law of this Adoption Agreement. Such liquidated
damages shall not exceed the amount which Supplier is obliged to pay under the
Master Agreement.
(4) Purchaser shall have all rights to any refund or reimbursement of any import duty
paid by Supplier in the United States in connection with the Purchase Order.
Supplier waives any interest in or rights to such refund or reimbursement and agrees
to provide, at no cost to Purchaser, proof of importation and/or re-exportation as the
case may be, satisfactory to Purchaser and the U.S. Customs administration or other
governing authority in the United States, and to provide any other supporting
documentation as may be reasonably requested by Purchaser to enable Purchaser to
recover duties paid in connection with the Work.
(5) The performance obligations and interpretation of the Master Agreement, this
Adoption Agreement and any Purchase Order issue d hereunder shall be governed
by the laws of the State of ................, except its rules in regard to conflict of laws.
Supplier and Purchaser shall use all reasonable efforts to amicably resolve disputes
arising out of the Purchase Order prior to commencing any formal legal
proceedings. Such efforts may include use of a mutually agreed alternative dispute
resolution mechanism. Any action or proceeding under the Purchase Order or this
Adoption Agreement shall be filed exclusively in the state or federal courts in
................., which shall then have exclusive jurisdiction. Each Party hereby waives
its right to a trial by jury in connection with any action filed by it or the other Party.
(6) In the event of any conflict or inconsistency between the terms of this Adoption
Agreement and those of the Master Agreement, the Adoption Agreement shall
prevail over the Master Agreement.
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(7) This Adoption Agreement contains the entire agreement between the Parties and
supersedes any and all prior negotiations, correspondence, understandings between
the Parties concerning the subject matter hereof. It may not be changed orally, but
only by an agreement in writing signed by both Parties hereto.
(8) Any rule of construction to the effect that ambiguities or inconsistencies are to be
resolved against the drafting party shall not apply in interpreting this Adoption
Agreement, or any Purchase Order issued hereunder.
This Agreement is executed by each party’s duly authorized representative(s) in the
capacity set forth below, as of the Effective Date.
_____________, Inc.
..........................................
..........................................
By:
Name:
Title:
Date:
By:
Name:
Title:
Date:
_____________, LLC
..........................................
..........................................
By:
Name:
Title:
Date:
4. Page 4 of 9 CONFIDENTIAL
EXHIBIT A: MASTER AGREEMENT
[ATTACH AGREEMENT TO BE ADOPTED HERE]
5. Page 5 of 9 CONFIDENTIAL
EXHIBIT B: ADDITIONAL OBLIGATIONS OF THE SUPPLIER
I. Provisions which apply if Supplier performs any work at the premises of
Purchaser or Purchaser’s customer in connection with this Adoption
Agreement:
1. During the performance of work (including work under Supplier’s warranty
obligations) at any premises owned, controlled or used by Purchaser or
Purchaser’s designated locations which may include the premises of customers of
Purchaser and at Supplier’s manufacturing or other facilities relevant to the order,
Supplier shall provide safety protection for personnel in accordance with all
applicable laws and regulations in addition to complying with any site procedures
made available to Supplier. In the event Supplier fails to provide such protection,
Purchaser may, at its sole option and without limiting its other rights and
remedies, provide such protection at Supplier’s sole cost and expense, or order
Supplier to cease work until Supplier provides such protection at Supplier's sole
cost and expense. If Supplier is unable or refuses to take corrective action to
provide such protection, Purchaser reserves the right to contract for or otherwise
accomplish a continuation of the Work and charge Supplier the excess cost caused
to Purchaser thereby, and Supplier agrees to pay such charges.
2. During performance of work as set out under item 1 above, Supplier shall to the
extent permitted by applicable law defend, indemnify and hold harmless
Purchaser, its subsidiaries, affiliates, customers and other designated parties from
and against any and all losses, expenses, liens, claims, demands, and causes of
action of every kind and character (including those of the Parties, their agents and
employees) for death, personal injury, property damage or any other liability,
damages, fines or penalties (except where reimbursement of fines or penalties is
prohibited by applicable law) including costs, attorney's fees and settlements
arising out of or in connection with the work to the extent caused by: (1) any
negligent act, failure to act or omission, whether performed by Supplier or any
agent, employee, invitee or licensee of the Supplier; or (2) any equipment,
components, materials or products furnished, sold or otherwise provided by
Supplier to Purchaser.
II. Insurance Requirements:
1. Products Liability: Supplier shall provide Products Liability Insurance (or
equivalent) covering bodily injury, death or property damage caused by Supplier’s
faulty work or defective product or material , which coverage shall include
Purchaser, its affiliates and Purchaser’s customer as additional insured, with
minimum limits of ................. U.S. Dollars ($.................) per occurrence and in
the aggregate;
2. Before Supplier or its subcontractor commences work on the premises owned or
controlled or used (for purposes of specific performance of work or otherwise) by
6. Page 6 of 9 CONFIDENTIAL
Purchaser or Purchaser’s customer, Supplier shall provide and shall require its
subcontractors to provide the following types of insurance in amounts not less
than indicated below. Supplier shall maintain such insurance in full force and
effect until this Order has been fully performed and the Work accepted in writing
by Purchaser, or all equipment, implements, and machinery of Supplier have been
removed from, and all employees, agents, representatives and sub agencies,
subcontractors or suppliers of Supplier have left the premises as described above.
Purchaser, its subsidiaries, affiliates, Purchaser’s customer and any other party as
designated by Purchaser shall be named as an additional insured with Cross
Liability Endorsement, with respect to the Commercial General Liability and
Comprehensive Automobile Liability policies/coverage(s). All of Supplier’s
policies of insurance, except for Workers’ Compensation and Employers
Liability, shall be primary insurance and noncontributing with any other insurance
maintained by Purchaser, its subsidiaries, affiliates, customers and other
designated parties.
a) Worker's Compensation Insurance (including a waiver of subrogation in
favor of Purchaser, its affiliates, subsidiaries, directors, officers, agents
and employees and Purchaser’s customer, and any other party
designated) in accordance with the statutory requirements of the
location in which the Work is performed or $............... for each person
per occurrence;
b) Employer's Liability Insurance (including a waiver of subrogation in
favor of Purchaser and Purchaser’s customer) shall have a minimum
limit of $............... each occurrence;
c) Commercial General Liability Insurance (including coverage for
Premises/Operation, Underground, Undermining, Explosion and
Collapse Hazard, Product/Completed Operations, Broad Form Property
Damage, and Blanket Contractual Liability Coverage endorsed to cover
Supplier's contractual liability assumed under paragraph B above) with
minimum limits of $.................... per occurrence;
d) Comprehensive Automobile Liability Insurance including coverage for
owned, hired, and non-owned automobiles with minimum limits of
$.................... each occurrence.
The following is required if Work involves such exposures:
e) Environmental Impairment (including asbestos) with the same limits as
set forth in paragraph (3) above for Commercial General Liability
Insurance.
f) Proof of Longshoremen's and Harbor Worker's Coverage if so
mandated by Federal regulations for the scope of work to be performed
by Supplier under this Work.
7. Page 7 of 9 CONFIDENTIAL
g) Independent Contractor's Liability Coverage (if Supplier uses
contractors) with the same limits as set forth in paragraph (3) above for
Commercial General Liability Insurance.
3. Neither the procurement, maintenance or acceptance of insurance coverage
by Purchaser shall relieve Supplier of liability for loss or damage in excess of
the policy coverage or limits specified herein or in any way limits or releases
Supplier of its obligations or liabilities under the Order.
4. All insurance certificates shall be in a form satisfactory to Purchaser and shall
stipulate that the insurance will not be canceled nor any change made in the
policy and/or coverage(s) without at least thirty (30) days prior written notice
beginning upon the day of receipt of registered mail concerning same by
Purchaser. Evidence of insurance is to be furnished before any Work is
started and in the amounts stated herein unless and only if specifically
otherwise indicated or directed in writing by Purchaser. Failure of the
Purchaser to request certificates of insurance does not constitute a waiver of
the terms of this requirement.
5. Purchaser reserves the right at any time during performance of work by
Supplier to require Supplier to provide insurance in types and amounts in a
form different and/or greater than that stated above with respect to unique
circumstances (work related or otherwise) and as may otherwise be required
by customers of Purchaser or required by governmental entities. Any such
additional coverage shall be at Purchaser’s sole cost and expense.
6. Breach of this insurance provision shall constitute a material breach of the
Order and shall entitle Purchaser to exercise its default rights hereunder.
III. Delivery of critical or forbidden substances:
1. Supplier represents and warrants that all equipment, material, components or parts
furnished hereunder are free of asbestos and asbestos containing materials. The
term “asbestos” shall include chrysotile, amosite, crocidolite, tremolite asbestos,
anthophyllite asbestos, actinolite asbestos, and any of these minerals that has been
chemically treated and/or altered.
2. Supplier warrants that each and every chemical substance delivered under the
Purchase Order or Scheduling Agreement (as defined in Exhibit “A”) shall, at the
time of sale, transfer or delivery, be on the list of chemical substances compiled
and published by the Administrator of the Environmental Protection Agency
pursuant to Section 8(B) of the Toxic Substances Control Act (Public Law 94-
469). Supplier shall submit to Purchaser Material Safety Data Sheets, prepared in
accordance with OSHA Hazardous Communication Standard 29 CFR 1910.1200,
as required. Supplier shall be responsible for all chemical substances or mixtures
which it or its subcontractors or suppliers of any tier bring onto the premises of
Purchaser or its customer and for any excess, waste or residue (including without
8. Page 8 of 9 CONFIDENTIAL
limitation container or any of such chemicals not consumed in the performance of
the Work), resulting from or generated in the performance of any Work. Without
limiting the generality of the foregoing, Supplier shall be responsible for lawfully
removing and disposing of all such materials, mixtures, containers, residue from
their use, in accordance with all applicable federal, state and/or local statutes,
laws, regulations, rules, orders and ordinances.
IV. No breach of applicable laws and regulations:
1. Supplier agrees that it will not, directly or indirectly:
a) offer, give, make, promise, pay or authorize the offering, giving, making,
promising or payment of any money, gift, or anything of value to any
government official, that is an officer or employee of any government, or
any department, agency or instrumentality thereof, any public
international organization, any person acting in an official capacity on
behalf of such government, any candidate for or appointee to a political
or government office, or any political party.
b) Knowingly engage in any transaction which involves:
(i) Receiving, transferring, transporting, retaining, using, structuring,
diverting, or hiding the proceeds of any criminal activity
whatsoever, including drug trafficking, fraud, and bribery of any
individual covered by paragraph C(1) above;
(ii) Engaging, becoming involved in, financing, supporting financially
or otherwise sponsoring, facilitating, or giving aid or comfort to any
terrorist person, activity or organization; and
(iii) Employing, engaging in any transaction or otherwise conducting
business with a "designated person," namely a person or entity that
appears on any list issued by the United States or the United
Nations with respect to money laundering, terrorism financing, drug
trafficking, or economic or military embargoes.
2. Supplier shall comply with all applicable provisions of Executive Agreement
11246 of September 24, 1965, as amended, the terms of which are
incorporated herein by this reference and made a part of this Agreement. It is
the policy of the Purchaser to provide equal employment opportunity and to
adhere to federal, state and local laws pertaining thereto. Appropriate action
shall be taken by Supplier, with respect to itself and any of its subcontractors,
vendors and suppliers to ensure compliance with such laws. All federal, state
and local equal opportunity and affirmative action requirements with regard
to race, gender, creed, color, age, religion, national origin, disability or
veteran status, are incorporated herein by reference.
9. Page 9 of 9 CONFIDENTIAL
3. If applicable, Supplier shall be responsible for obtaining any licenses, permits
or approvals necessary, including acting as the exporter of record, to export
any part of the Work from the United States. Supplier shall provide the
Purchaser with all relevant U.S. Export Control Classification Numbers and
any related information requested by the Purchaser or Purchaser's contract
freight forwarder. Supplier shall be responsible for providing preference
statements, as applicable, in compliance with government regulations, trade
agreements and treaties including but not limited to General System of
Preferences (GSP) and North American Free Trade Agreement (NAFTA).
4. Supplier shall to the extent permitted by applicable law defend, indemnify
and hold harmless Purchaser, its affiliates and customers from and against
any and all losses, expenses, claims, demands, and causes of action of every
kind and character (including those of the Parties, their agents and
employees) for liability, damages, fines or penalties including costs,
attorney's fees and settlements arising out of or in connection with any breach
of any provision of this Exhibit B.