INDEPENDENT CONTRACTORS AGREEMENT
DATE: 4/30/98
PARTIES: WHY USA MID AMERICA DEVELOPMENT CORPORATION
ADDRESS: X.X. Xxx 000
Xxxxxx Xxxxx, XX 00000
AND
INDEPENDENT CONTRACTOR THEIR HEIRS AND/OR ASSIGNS:
NAME: Xxxxx Xxxxxx
ADDRESS: 0000 Xxxxx Xxxx Xxx. #000
Xxxxxxxxx, XX 00000
1. RECITALS:
A. The Independent Contractor has the rights to offer for sale and sell
Franchises for USA MID AMERICA DEVELOPMENT CORPORATION, a Minnesota
Corporation, hereinafter referred to as "MID AMERICA". Mid America also has
the duty and rights to service and train salespersons, do broker training and
other duties that help WHY USA MID AMERICA Franchisees operate their
companies.
B. independent Contractor, hereinafter referred to as "I.C." will help sell
and service WHY USA Franchises and Franchisees.
1. It shall be the duty of the I.C. to familiarize themselves with all
rules and regulations regarding the sale and presentations for sale of
Franchises in all states that they intend to sell Franchises. This includes
all Federal, State and Local rules and laws concerning Franchises and sales of
franchises.
2. The I.C. shall hold WHY USA MID AMERICA harmless for any and all acts
solely committed by the I.C. that may result in litigation.
2. TERM:
A. The term of this Agreement shall be the entire period of affiliation
between the I.C. and WHY USA MID AMERICA.
B. I.C. may terminate this Agreement voluntarily upon ten (10) days written
notice.
C. WHY USA MID AMERICA may terminate this Agreement only upon occurrence of
fraud, misrepresentation or failure to comply with our minimum sales quotas,
and, minimum continuing obligations and training as outlined later in this
agreement.
3. DUTIES AND OBLIGATIONS OF INDEPENDENT CONTRACTOR:
A. To register with WHY USA MID AMERICA for each state in which they will be
selling franchises.
B. Always offers an offering circular when required by law.
C. To solicit offices, which are not, Franchises unless they have a written
invitation from office requesting information on WHY USA Franchises.
D. To Set up their own appointments, follow up appointments and proceed to
counties, cities and areas that they have WHY USA MID AMERICA approval to sell
in.
E. Give a written report within approximately 48 hours on each presentation
that they give setting forth date, place, and person I.C. spoke with and their
interpretation of the possible results. WHY USA MID AMERICA may contact
prospect for purposes of validation. WHY USA MID AMERICA may review contacts
contacted with I.C. for purposes of helping I.C. improve their sales results,
F. I.C. agrees, to perform at all times the services contemplated hereunder
in a manner which will maintain and increase rather than diminish the goodwill
and reputation of WHY USA MID AMERICA, and shall do nothing to disturb or
devalue these interests or to bring discredit upon WHY USA MID AMERICA.
G. I.C. shall Pay for, at his or her expense a personal automobile, gasoline,
entertainment expenses, medical insurance, auto insurance, personal insurance
and all other business expenses. The minimum amounts of liability insurance to
be maintained in force and effect with respect to auto insurance are $100,000
for any one Person $300,000 each occurrence and property damage of $20,000.
H. I.C. agrees to abide by all policies and procedures established by WHY USA
MID AMERICA concerning sale and possible sale of Franchises.
I.C. will attend a franchise sales class and will attend at least 50% of
regional meetings given in his or her area.
1. I.C. must contact each of their offices by phone at least once a month
and must visit each office at least once every 180 days.
J. I.C. must provide at least two training sessions for their new office on
how to present the WHY USA program unless this provision is waived in writing
by WHY USA MID AMERICA.
4. MINIMUM QUOTAS:
Iit is a requirement for each I.C. to sell and maintain a minimum of seven
franchises within, the first 3 1/2 years of signing their contract:
FIRST YEAR........................... 2
SECOND YEAR.......................... 2
THIRD YEAR........................... 2
FIRST HALF OF FOURTH YEAR............ 1
---------------------------------------
TOTAL 7
A. If I.C. maintains the quota, 100% of money due will be paid. However, if
I.C. falls behind after year one, WHY USA MID AMERICA will take over I.C.
services to any franchisees I.C. may have sold, and I.C. will then be given
50% of the fees owing to I.C. for one year. This gives I.C. one year to catch
up. At the end of year two if I.C. is caught up for previous years and the
present year's quota, I.C. will be reinstated to 100% fees and commissions
owed. Any franchises I.C. sells during second year it is behind on quotas,
I.C. will receive the regular thirty (30%) percent commission on franchise
sales, plus fifty (50%) percent of the transaction fees percentage I.C. would
have earned for the year. The reason is to give I.C. a chance to catch up on
quotas without having to do any servicing. I.C. can spend its resources
selling and not servicing. I.C. can spend its
resources selling and not servicing. I.C. will be required to do salesperson
training, however, after two sales as stated earlier. If I.C. does not catch
up to the minimum quotas by the end of year two this Agreement will be
canceled for non-fulfillment of Agreement. If I.C. does not sell at least one
franchise within twelve (12) months of signing this Agreement, this Agreement
will then become null and void.
5. COMPENSATION:
A. I.C. will receive thirty (30%) percent of all collected franchise fees and
thirty (30%) percent of all collected transaction fees, for as long as I.C.
sells their minimum quotas and services their franchisees as outlined in
B. Neither WHY USA MID AMERICA or I.C. shall be liable to the other party for
any commissions or transaction fees not actually paid to and received by WHY
USA MID AMERICA.
SECTION 3. DUTIES AND OBLIGATIONS
6. TAXES AND BENEFITS:
Independent Contractor, is a self-employed individual, and shall be solely
responsible for the payment of it's own state and federal income tax and self-
employment tax. WHY USA MID AMERICA shall not under any circumstances withhold
and pay, or be responsible to withhold and pay to the appropriate government
agency, such taxes. I.C. shall not be entitled to retirement benefits, fringe
benefits, xxxxxxx'x compensation coverage as set forth in A.R.S. Sec. 23-910,
or other insurance benefits which may be provided to employees of WHY USA MID
AMERICA. I.C. will make its own arrangements for payment of hospital and
medical costs in connection with any injury or illness.
7. EXECUTION OF INSTRUMENTS:
Except as otherwise provided in this paragraph, I.C. shall have no authority
to negotiate for, bind, obligate or commit WHY USA MID AMERICA by any promise
or representation, unless specifically authorized by WHY USA MID AMERICA in
writing.
8. EXPENSES:
Except as otherwise specifically agreed in writing by WHY USA MID AMERICA,
I.C. shall be responsible for all expenses incurred in connection with the
performance of its duties and responsibilities hereunder.
9. COMMISSION DISPUTES:
Any disputes between I.C. and any other independent contractor associated with
WHY USA MID AMERICA as to any commission or expense payable to or by said
parties shall be resolved by WHY USA MID AMERICA. Any decision of WHY USA MID
AMERICA as to any such matter shall be binding and conclusive on the parties
and WHY USA MID AMERICA shall have no liability to any such party, or anyone
claiming through such party, for any amount paid to another in accordance with
such decision of WHY USA MID AMERICA.
10. LITIGATION:
Subject to the terms of Paragraph 9 above, in the event any transaction in
which the I.C, is involved results in a dispute, litigation or legal expense
involving WHY USA MID AMERICA, WHY USA MID AMERICA and the I.C. shall share
all expenses connected therewith in the same proportion as they would normally
share the commission resulting from such transaction if there were no dispute
or litigation. I.C. shall fully cooperate with WHY USA MID AMERICA with
respect to any disputed matters. WHY USA MID AMERICA, in it's sole discretion,
may determine whether or not any litigation or dispute shall be prosecuted,
defended, compromised, or settled, the terms and conditions of any such
compromise or settlement, and whether or not legal expense shall be incurred,
provided, however, that no compromise or settlement requiring the payment of
money or anything of value by the I.C. shall be accepted by WHY USA MID
AMERICA without the written consent of the I.C. WHY USA MID AMERICA shall
have the right to select legal counsel, and I.C. shall be required to share
the expenses of counsel selected by WHY USA MID AMERICA.
11. COVENANT NOT TO COMPETE:
A. I.C. acknowledges that during the performance of his duties hereunder, he
will have been exposed to, have had access to and otherwise will be trained in
utilizing marketing programs and techniques which have been developed by WHY
USA MID AMERICA and/or which are unique to the real estate industry
including, but not limited to, the WHY USA 990 OPPORTUNITY Program, the 29 DAY
FAST SALE Program, and the like (hereinafter the "proprietary programs"). I.C.
acknowledges that WHY USA MID AMERICA has a protected interest in having I.C.
restrained from utilizing these proprietary programs and techniques in
competition with WHY USA MID AMERICA for a reasonable period of time following
termination of this Agreement.
Accordingly, I.C. agrees that for a period of two (2) years, within Xxxxxx
County, or any other county of any state in which there is a WHY USA office
following termination of this Agreement, I.C. shall not compete with WHY USA
MID AMERICA either directly or indirectly, in any capacity either as owner,
agent, independent contractor, employee, consultant, or otherwise by utilizing
WHY USA MID AMERICA, proprietary programs or programs similar thereto in the
real estate business or any other business.
B. Since a breach of the provisions of this section of this Agreement could
not adequately be compensated by money damages, WHY USA MID AMERICA shall be
entitled, in addition to any other right to remedy available to it at law or
equity, to an injunction restraining the breach or threatened breach and to
specific performance of any provision of this section of this Agreement.
C. If the scope of any provision of this paragraph, or of this Agreement is
found by any Court to be too broad to permit enforcement to its full extent,
then such provision shall be enforced to the maximum extent permitted by law.
The parties agree that the scope of any provision of this Agreement may be
modified by a judge in any proceeding to enforce this Agreement, so that such
provision can be enforced to the maximum extent permitted by law. If any
provision of this Agreement is found to be invalid or unenforceable for any
reason it shall not affect the validity of the remaining provisions of this
Agreement.
12. ASSIGNMENT:
This Agreement may not be assigned in whole or in part by I.C., except upon
WHY USA MID AMERICA prior written consent, but may be assigned by WHY USA MID
AMERICA to any successor to it's business, in whole or in part, without the
consent of I.C.
13. NOTICE:
Any notice required to be given under the provisions of this Agreement shall
be given in writing by registered or certified mail, addressed as follows:
BROKER: WHY USA Mid America Development Corporation, A Minnesota Corporation
X.X. Xxx 000
Xxxxxx Xxxxx, XX 00000-0000
INDEPENDENT CONTRACTOR: Xxxxx Xxxxxx
0000 Xxxxx Xxxx Xxx. # 000
Xxxxxxxxx, XX 00000
or to such other address as either party hereto shall designate by such
notice. Any such notice given hereunder shall be effective as of the time it
is received in the case of delivery, or is deposited in the United States mail
in the case of mailing.
14. AMENDMENTS AND GOVERNING LAWS:
This Independent Contractor Agreement together with any supplements signed by
the parties contains the entire agreement of the parties. It may be changed
only in writing signed by both parties. This Agreement shall be governed in
all respects, whether as to validity, construction, capacity, performance, or
otherwise, by the laws of the State of Minn.
A. Following termination, I.C. shall not be entitled to receive any
commissions or other compensation on any other transactions, regardless of
I.C.'s involvement with such transactions, unless otherwise provided pursuant
to WHY USA MID AMERICA standard policies and procedures.
B. I.C. agrees to immediately deliver all "proprietary information" in his
possession or subject to his control to a designated representative of WHY USA
MID AMERICA. I.C. also acknowledges that all other files maintained by it in
connection with the performance of its services for WHY USA MID AMERICA belong
to WHY USA MID AMERICA. Said files shall be retained by WHY USA MID AMERICA
but I.C. at it's expense, may make copies of any materials included in said
files, other than materials that constitute proprietary information within the
meaning of Paragraph 11.
15. LEGAL CONSTRUCTION:
Should any portion or provision of this Agreement be deemed invalid or void at
law, this Agreement shall be construed as though such provision or portion has
not been inserted herein and the remainder of this Agreement shall remain in
full force and effect. Titles to paragraphs used in this Agreement are for
convenience only and shall not be construed as part of this Agreement.
16. GENDER:
The use of the masculine gender or "it" or "it's" herein is utilized for
convenience only and shall include the neuter and feminine when appropriate.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and
year first written above.
" Mid America" "I.C."
WHY USA MID AMERICA DEVELOPMENT CORP INDEPENDENT CONTRACTOR
By: /s/ Xxxx X. Xxxx By: /s/ Xxxxx Xxxxxx
--------------------- -------------------
Signature Signature
Xxxx X. Xxxx Xxxxx Xxxxxx
----------------------- ---------------------
Printed Name Printed Name
WHY USA MID AMERICA DEVELOPMENT CORP Independent Contractor
Xxxxx Xxxxxx
0000 Xxxxx Xxxx Xxx. #000
Xxxxxxxxx, XX 00000
Mid America ICA
Revised 3/98
