Common use of Purchasing Agent's Commission Clause in Contracts

Purchasing Agent's Commission. A&A will perform the export agent ----------------------------- services described above for the following purchasing agent's commission described below: Purchasing Agent's Commission ----------------------------- Unit Price Unit Price ---------- ---------- Under $1.00 F.O.B. Over $1.00 F.O.B. ------------------- ------------------ Merchandise 6% gross margin 4% gross margin (excluding parts) Parts (spare &/or 10% gross margin 10% gross margin repair parts for finished goods) "unit" price = the price per item, or per group of items (if such items are sold at a single price for a certain number of items), normally charged by a manufacturer. "gross profit" = sales price minus unit price "gross margin" = gross profit of an item divided by the sales price "sales price" = unit price plus gross profit X Formula: -------------- where "X" = gross profit unit price + X = a and "a" = gross margin desired FORMULA EXAMPLE 1: UNIT PRICE = $.50 GROSS MARGIN DESIRED = 6% ( X --- .5 + X) = 6% Steps: 1. X = (.5 + X) x .06 2. X = .03 + .06X 3. X - .06X = .03 4. .94X = .03 5. X = .03 --- .94 X (gross profit) = .0319 unit price + gross profit = sales price .5 + .0319 = $.5319 gross margin = .0319 (gross profit) -------------------- .5319 (sales price) = 6% The ITI-GROUP will pay to A&A a per-unit purchasing agent's commission of $.032 on each unit with a unit price of $.50.

Purchasing Agent's Commission. A&A RIPLP will perform the export agent ----------------------------- services described above for the following purchasing agent's commission described below: Purchasing Agent's Commission ----------------------------- Unit Price Unit Price ---------- ---------- Under $1.00 F.O.B. Over $1.00 F.O.B. ------------------- ------------------ ---------------- Merchandise 6% gross margin 4% gross margin (excluding parts) Parts (spare &/or 10% gross margin 10% gross margin repair parts for finished goods) "unit" price = the price per item, or per group of items (if such items are sold at a single price for a certain number of items), normally charged by a manufacturer. "gross profit" = sales price minus unit price "gross margin" = gross profit of an item divided by the sales price "sales price" = unit price plus gross profit X Formula: -------------- X where "X" = gross profit ---------------- unit price + X = a and "a" = gross margin desired FORMULA EXAMPLE 1: UNIT PRICE = $.50 GROSS MARGIN DESIRED = 6% ( X --- .5 + X) = 6% Steps: 1. X = (.5 + X) x .06 2. X = .03 + .06X 3. X - .06X = .03 4. .94X = .03 5. X = .03 --- .94 X (gross profit) = .0319 unit price + gross profit = sales price .5 + .0319 = $.5319 gross margin = .0319 (gross profit) -------------------- .5319 (sales price) = 6% The ITI-GROUP will pay to A&A RIPLP a per-unit purchasing agent's commission of $.032 on each unit with a unit price of $.50.