INDEPENDENT CONTRACTOR AGREEMENT
This Agreement ("Agreement") is entered into as of the 1st day of
September, 1996, by and among DATA TRANSMISSION NETWORK CORPORATION, a Delaware
corporation ("DTN"), XXXXXX, INC., a South Dakota corporation (the
"Contractor"), and XXXX XXXXXX ("Xxxxxx"), the Contractor's principal, on the
following terms and conditions:
ARTICLE 1
SUPERSEDES PRIOR AGREEMENT
This Agreement supersedes in its entirety that certain Independent
Sales Representative Agreement dated March 28, 1990, between DTN and Xxxxxx, as
previously assigned to Contractor, amended and supplemented. As of the date of
this Agreement, such prior agreement is void and of no further force or effect
and, regardless of any provisions in such prior agreement providing for
commissions to be paid after the expiration or termination of such agreement, no
further commissions are due thereunder except any due for the period prior to
the date of this Agreement.
ARTICLE 2
WORK TO BE PERFORMED BY CONTRACTOR
Section 2.01 Work to be Performed
Among other services offered by DTN, DTN provides pricing information
and communications services under the name of DTNergy(R) for the petroleum,
natural gas and electric power industries. For purposes of this Agreement, all
of such DTNergy(R) services and all future DTNergy(R) services offered by DTN
for the energy industries, if any, are hereinafter called the "Services". During
the term of this Agreement, Contractor agrees to use its best efforts to (i)
solicit and retain customers and potential customers of the Services and (ii)
undertake, for and on behalf of and to the extent requested by DTN, to develop,
implement, supervise and control all of the sales and marketing functions of
DTNergy(R), including but not limited to recruitment and supervision of the
sales force to market the Services and the development and implementation of the
forms of promotion and marketing of the Services.
Section 2.02 Solicitation of Proposals
Contractor, its agents and employees shall use their best efforts to
solicit proposals for DTN from customers and potential customers of the
Services. All proposals obtained by Contractor for Services to be performed by
DTN promptly shall be submitted by
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Contractor to DTN in such format as DTN may reasonably specify and shall be
subject to acceptance by DTN at its office in Omaha, Nebraska, by an authorized
employee of DTN. The parties hereto contemplate that proposals will generally be
submitted orally to DTN in a manner generally consistent with past practice. DTN
will inform Contractor from time to time of those employees of DTN who are
authorized to accept proposals for Services submitted by Contractor. Contractor
shall have no authority to accept any proposal for Services on behalf of DTN,
and DTN reserves the right to reject any proposal for Services in whole or in
part for any reason. All correspondence, documents and other materials relating
to a proposal for Services submitted by Contractor to DTN and accepted by DTN
shall be the sole and exclusive property of DTN. From time to time DTN shall
advise Contractor in writing of its then current sales policies; and promptly
after any change in any of the sales policies, DTN shall notify Contractor in
writing of such changes. Contractor shall have no authority to alter any of the
policies relating to the terms and conditions of sales and shall not solicit
proposals for Services on a basis which is inconsistent with the sales policies.
DTN shall periodically consult with and seek the input of Contractor regarding
the sales policies of DTN.
Section 2.03 Control of Work
Contractor and DTN expressly agree that neither Contractor nor any of
Contractor's employees are to be considered employees of DTN, either directly or
indirectly. Subject to the terms and conditions set forth in this Agreement,
Contractor has the sole right to determine the methods, details and means of
performing the above-described work, subject to the control of DTN as to the
results of such work. Contractor has the sole right to hire and exclusively
exercise appropriate management control of its employees, including setting the
wages, hours and working conditions of its employees.
Section 2.04 Contractor's Commitment of Time
Contractor retains the right to perform work for other clients, persons
or companies as Contractor sees fit consistent with Contractor's obligations to
DTN under this Agreement.
Section 2.05 Time and Place of Performance
The Contractor shall be permitted to maintain its office and to perform
its duties and responsibilities pursuant to this Agreement in such reasonable
geographical location as the Contractor may select. Contractor shall have
exclusive control over the hours and other working conditions of its employees.
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Section 2.06 Materials and Equipment
Contractor agrees to provide all special materials and equipment that
are needed by it to perform the work under this Agreement.
Section 2.07 Licensing
Contractor agrees to obtain, and to keep valid and in force at all
times after the date of this Agreement, all licenses or permits required by law
to perform the work contemplated by this Agreement. Contractor agrees to notify
DTN immediately if any required license expires or is withdrawn for any reason
by the licensing authority. Upon request from DTN, Contractor agrees to promptly
provide proof that its licenses and/or permits remain valid.
Section 2.08 Legal Compliance
Contractor agrees to perform all work in compliance with all applicable
federal, state and local laws and regulations, including those governing the
health and safety of Contractor's employees.
Section 2.09 Insurance
Contractor shall purchase and maintain, at its sole cost and expense,
during the term of this Agreement, the following insurance:
A) Worker's Compensation Insurance in accordance with law. Such policy
must contain a waiver of the insurer's subrogation rights against DTN, where
permitted by law.
B) Commercial General Liability Insurance coverage with the following
minimums:
1) Per occurrence - minimum $1,000,000;
2) Personal injury limit - minimum $1,000,000;
3) Products and completed operations aggregate limit -
minimum $1,000,000; and
4) General aggregate limit - minimum $1,000,000.
This insurance shall name DTN, its officers, employees and agents, as additional
insureds and provide that such insurance is primary coverage as respects all
insureds.
C) Contractor shall, before commencing the work, provide DTN
with certificates or other documentary evidence of the above insurance,
satisfactory to DTN. Certificates must be signed by an authorized representative
of Contractor's insurance carrier and
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state that no cancellation of insurance will be effective without 10 days
advance written notice to DTN. Contractor shall immediately notify DTN of any
material change affecting coverages or limits afforded DTN under the insurance
requirements.
Section 2.10 Taxes
Contractor is responsible for payment and/or withholding of any taxes
(including all federal, state and local employment taxes applicable to
Contractor's employees), now or hereafter enacted, applicable to any services
provided under this Agreement, or to any transactions contemplated hereby. In no
event shall DTN be responsible for payment of any taxes relating to Contractor
or Contractor's employees.
Section 2.11 Activities Report
At the request of DTN from time to time, Contractor shall report to
DTN, in such form and reasonable detail as DTN shall request, on Contractor's
activities undertaken pursuant to this Agreement.
Section 2.12 Sales and Other Materials
DTN shall furnish to Contractor from time to time such promotional and
other sales material, reporting and other forms, price lists, and other
documents and materials as DTN may consider necessary or appropriate for
Contractor's use in performing its duties pursuant to this Agreement. All of
such items shall remain the sole and exclusive property of DTN and, except to
the extent consumed in the course of Contractor's proper performance of its
duties pursuant to this Agreement, promptly shall be returned to DTN by
Contractor upon the termination of this Agreement. Upon the termination of this
Agreement, DTN shall have the right to withhold any commission payments then or
thereafter due Contractor until Contractor has complied with the requirements of
the preceding sentence.
ARTICLE 3
FEE OR PAYMENT FOR WORK
Section 3.01 General
In consideration for the work performed and services provided by
Contractor pursuant to this Agreement, DTN agrees to pay Contractor forty
percent (40%) of the Adjusted Net Earnings (as hereinafter defined) for each
month during the term of this Agreement; provided, however, that each of the
first twenty-four (24) monthly payments shall be reduced by Fifty Thousand
Dollars ($50,000.00). For purposes of such computations, the "Adjusted Net
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Earnings" for each such month shall be determined as follows. The total revenues
for the Services for such month, determined on the accrual method, shall be
reduced by (i) all operating expenses of DTN resulting from or relating to the
business of providing the Services (the "DTNergy Business") for such month,
determined on the accrual method, but excluding the Sales Expenses (as
hereinafter defined), (ii) all depreciation, amortization and interest expenses
allocated by DTN to the DTNergy Business for such month, (iii) twelve and
one-half percent (12.5%) of the sum of the amounts computed under clauses (i)
and (ii) above for such month (provided that in the event the accounting rules
require an expense associated with the issuance of stock options to DTN
employees, such expense shall be deleted from the sum before being multiplied by
12.5%), and (iv) the sum of $40,000. For purposes of this Agreement, the "Sales
Expenses" shall be all expenses incurred by DTN in connection with or relating
to the sales, marketing or promotion of the DTNergy Business, including but not
limited to the compensation, office expenses, and travel expenses with respect
to those employees of DTN whose duties involve or relate to the sales, marketing
or promotion of the DTNergy Business, the commissions, sales costs and other
expenses relating to the sales force to the extent incurred by DTN with respect
to the DTNergy Business, and the expenses of DTN in connection with the
tradeshows and conventions relating to the marketing or promotion of the DTNergy
Business. Notwithstanding any provision to the contrary contained in this
Agreement, Contractor agrees to reimburse DTN from time to time for all Sales
Expenses incurred by DTN during the term of this Agreement upon presentation to
Contractor of a reasonably detailed itemization of such expenses with supporting
data. DTN may from time to time deduct the amount of the unreimbursed Sales
Expenses from the payments due Contractor from DTN pursuant to this Agreement.
DTN agrees not to implement a sales program that will incur significant expenses
for Contractor under the terms of this Section without the approval of
Contractor. For illustration purposes only, attached to this Agreement as
Exhibit A is an example of the Sales Expenses. It is understood that the
Adjusted Net Earnings shall be computed in accordance with accounting practices
regularly followed by DTN for the purposes of allocating indirect expenses
(including, but not limited to, corporate overhead and interest expense) and
capital expenditures to the various business segments or industries into which
DTN divides its services. For illustration purposes only, attached to this
Agreement as Exhibit B is an example of the computation of the payment which
would have applied using the Adjusted Net Earnings for the month of August of
1996. The payments by DTN referred to above shall cease upon the termination or
expiration of this Agreement for any reason whatsoever.
Section 3.02 Timing of Payments
The monthly payments referred to in Section 3.01 will be made in
arrears by DTN to Contractor on or before the last day of the
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month following the month for which the payment relates. Such payments shall be
accompanied by a written summary of DTN's computation of such payment.
Contractor may audit DTN's records for the sole purpose of verifying the
accuracy of DTN's payments. DTN will make such records available to Contractor
for inspection during normal working hours upon one week's prior written notice.
Contractor agrees that all of DTN's records will be treated as confidential and
will not be used for any purpose other than the audit.
Section 3.03. Expenses
Contractor agrees to bear full responsibility for all costs and
expenses incurred for performance of its work under this Agreement. In addition,
Contractor agrees to reimburse DTN for all Sales Expenses as provided in Section
3.01 above.
ARTICLE 4
INTELLECTUAL PROPERTY
Section 4.01 Proprietary Information
Contractor and Xxxxxx, recognizing that the work in which they will be
engaged under this Agreement may be of a proprietary nature, hereby agree as
follows:
A) That Contractor and Xxxxxx will not, during or after the
term of this Agreement, use, publish, disclose or utilize in any manner any
trade secrets information marked "proprietary", "confidential", "private",
"company private", or which may be proprietary to or a trade secret of DTN
obtained by Contractor or Xxxxxx while rendering services hereunder to DTN,
except such information that is otherwise properly published or in the public
domain; provided, however, that information which is published by or with the
aid of Contractor or Xxxxxx contrary to this paragraph is not considered to have
been properly published nor to be in the public domain for purposes hereof.
B) At the request of DTN, Contractor agrees to require its
employees to execute suitable non-disclosure agreements to support the foregoing
provisions.
C) Upon termination or expiration of this Agreement,
Contractor and Xxxxxx will return to DTN all material supplied by, or obtained
from DTN (including but not limited to financial and pricing information,
personnel records, customer information, customer lists, product and service
information, data processing and communications information, technical data,
drawings, specifications and descriptions) along with any copies made thereof.
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Section 4.02 Safeguarding DTN's Trade Secrets and Data
Contractor and Xxxxxx each agrees that it shall not use or divulge to
anyone either during the term of this Agreement or thereafter any of DTN's trade
secrets or other proprietary information of any kind whatsoever acquired by
Contractor or Xxxxxx in carrying out the terms of this Agreement.
Contractor and Xxxxxx each further agrees that upon completion or
termination of this Agreement, it will turn over to DTN or make such disposition
thereof as may be directed or approved by DTN, any notebook, data, information
or other material acquired or compiled by Contractor or Xxxxxx in carrying out
the terms of this Agreement and which contains trade secrets or other
proprietary information of DTN.
ARTICLE 5
RESTRICTIVE COVENANTS
Section 5.01 Solicitation of Employees
Contractor and Xxxxxx (being together considered as one party) and DTN
each agrees that, during the term of this Agreement and for a period of one (1)
year after the termination of this Agreement, it will not directly or indirectly
employ, solicit for employment, or advise or recommend to any other person or
entity that such other person or entity employ or solicit for employment any
person then employed by the other party to this Agreement.
Section 5.02 Diversion of Business
Contractor and Xxxxxx each agrees that, during the term of this
Agreement and for a period of one (1) year after the termination of this
Agreement, neither of them will cause, encourage, induce, or attempt to induce,
and neither of them will aid, assist, or abet any other party or person in
inducing or attempting to induce, directly or indirectly, any customer of DTN
with which they have actually done business and had personal contact during the
term of this Agreement to terminate or change in a manner adverse to DTN any
existing relationship with DTN.
Section 5.03 Injunctive and Other Relief
Contractor and Xxxxxx (being together considered as one party) and DTN
each acknowledges that its agreements contained in Articles 4 and 5 hereto are
reasonable and necessary to protect the business of the other party hereto and
that any breach thereof will result in an irreparable injury for which there is
no adequate remedy at law. Each party therefore agrees that, in the event of its
breach of any of its agreements contained in Articles 4 and 5 hereto, the other
party shall be authorized and entitled to seek from any court
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of competent jurisdiction (i) a temporary restraining order, (ii) preliminary
and permanent injunctive relief, (iii) an equitable accounting of all profits or
benefits arising out of such breach, and (iv) direct, incidental, and
consequential damages arising from such breach. Such rights and remedies shall
be cumulative and in addition to any other rights or remedies to which the
non-breaching party may be entitled.
ARTICLE 6
INDEPENDENT CONTRACTOR STATUS
It is the parties' express intention that Contractor is an independent
contractor and not an employee, agent, joint venturer or partner of DTN. Subject
to the provisions of this Agreement, Contractor shall have complete control over
the manner in which Contractor performs its responsibilities under this
Agreement; however, Contractor at all times shall represent DTN in an ethical
and professional manner consistent with the highest industry standards and shall
maintain adequate facilities and personnel to enable Contractor to carry out
such responsibilities competently and professionally. Contractor does not have,
and shall not hold himself out as having, any authority to enter into any
contract or create any obligation or liability on behalf of, in the name of, or
binding upon DTN; and Contractor shall hold DTN harmless from any claims
resulting from any action taken by Contractor which is inconsistent with the
provisions of this sentence. Nothing contained in this Agreement, including but
not limited to the method of compensating Contractor, shall be deemed or
construed by anyone to create the relationship of principal and agent,
partnership, or joint venture between DTN and Contractor.
ARTICLE 7
TERM AND TERMINATION
Section 7.01 General
The term of this Agreement shall commence on September 1, 1996,
regardless of when signed by the parties, and shall continue until the first to
occur of any of the following events:
(i) notice from DTN if Xxxxxx for any reason, including but not
limited to death, disability or retirement, fails to
personally provide and perform to the best of his abilities
the primary responsibilities and obligations of Contractor
under this Agreement; provided, however, if Xxxxxx is
incapable of doing so by reason of physical injury, disease,
or mental illness, then DTN may elect to terminate this
Agreement only if such condition continues for a period of 120
consecutive days or more;
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(ii) the mutual written agreement of the parties hereto to
terminate this Agreement; or
(iii) notice from the non-defaulting party upon the failure of a
party to cure a default as provided in Section 7.02.
Section 7.02 Termination for Default
If a party defaults in the performance of its obligations hereunder,
and such default is not cured within thirty (30) days after written notice of
such default is provided by the non-defaulting party to the defaulting party,
then the non-defaulting party may, at its option, declare this Agreement
terminated and the term of this Agreement ended forthwith. The failure of a
party to give notice of a default shall not be a waiver thereof nor consent to
the continuation thereof.
ARTICLE 8
COVENANTS OF DTN
Section 8.01 Exclusivity of Contractor
DTN acknowledges and agrees that Contractor shall be the exclusive
representative for DTN for purposes of marketing the Services during the term of
this Agreement, except to the extent otherwise consented or agreed to by
Contractor.
Section 8.02 Licensing and Legal Compliance
DTN currently has and agrees to use its best efforts to keep in force
at all times during the term of this Agreement, all licenses or permits required
by law to allow DTN to fulfill its obligations under this Agreement, including,
but not limited to, the delivery of the Services. DTN agrees to perform its
obligations hereunder, operate the DTNergy(R) system and deliver the Services to
customers in compliance with all applicable federal, state and local laws and
regulations.
Section 8.03 Taxes
Subject to the provisions of Section 3.01, DTN is responsible for
payment and/or withholding of any taxes (including all federal, state and local
employment taxes applicable to DTN's employees), now or hereafter enacted,
applicable to the delivery of the Services to customers or the performance of
DTN's obligations under this Agreement. In no event shall Contractor be
responsible for payment of any taxes relating to DTN or DTN's employees, except
as provided in Section 3.01.
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ARTICLE 9
MISCELLANEOUS
Section 9.01 Entire Agreement
This Agreement constitutes the entire agreement between the parties
hereto, superseding all prior understandings, arrangements, and agreements,
whether oral or written, with respect to the engagement of Contractor or Xxxxxx
as a sales representative for DTN. No agreements or representations, oral or
otherwise, express or implied, with respect to the subject matter of this
Agreement have been made by either party that are not expressly set forth in
this document. Xxxxxx executes this Agreement individually for the purpose of
agreeing to be bound by the terms and provisions of Articles 4 and 5 of this
Agreement.
Section 9.02 Amendment
No provision of this Agreement may be modified, waived or discharged
unless such waiver, modification, or discharge is in writing and has been signed
by a duly authorized officer of DTN. No waiver by either party to this Agreement
at any time of any breach by the other party to this Agreement of, or of such
other party's compliance with, any condition or provision of this Agreement to
be performed by such other party shall be deemed to be a waiver of similar or
dissimilar provisions or conditions at the same or any prior or subsequent time.
The failure of DTN to exercise any right under this Agreement in the event of a
breach by Contractor of any provision of this Agreement shall not be construed
as a waiver of such breach or prevent DTN from thereafter enforcing strict
compliance by Contractor with any and all provisions of this Agreement.
Section 9.03 Headings
The headings of the several paragraphs of this Agreement are for
reference purposes only and shall not in any way affect the meaning or
interpretation of this Agreement.
Section 9.04 Number and Gender
Unless the context otherwise retires, for all purposes of this
Agreement words in the singular include their plural, words in the plural
include their singular, and words of one gender include the other genders.
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Section 9.05 Notices
Any notice required or permitted under this Agreement shall be in
writing and shall be deemed to have been given on the date of its deposit in the
United States mail, registered or certified and postage prepaid, addressed to
such party at the address set forth below opposite its name. A party may change
its address for purposes of this Agreement at any time by giving written notice
of such change in accordance with this paragraph. DTN agrees to send a written
notice to Contractor within ten (10) days after DTN receives a letter of intent
or proposed acquisition agreement providing for a merger, consolidation or other
business combination pursuant to which DTN is not the surviving entity or an
acquisition pursuant to which a third party is to acquire substantially all of
the assets of the DTNergy Business. Notwithstanding the preceding sentence, DTN
has no obligation to continue to operate the DTNergy Business.
Section 9.06 Governing Law
This Agreement shall be governed by and construed in accordance with
the internal substantive laws of Nebraska. Any action brought to interpret or
enforce any provision of this Agreement shall be brought in the federal or state
courts situated in Xxxxxxx County, Nebraska, and all parties hereby consent to
venue and jurisdiction before such courts.
Section 9.07 Assignment
This Agreement is personal to Contractor, and Contractor may neither
assign this Agreement or any of Contractor's commission or other rights under
this Agreement nor delegate to anyone else (other than persons for whom
Contractor is responsible in the ordinary course of its business) the
performance of Contractor's duties under this Agreement.
Section 9.08 Binding Agreement
This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective heirs, personal representatives, successors
and assigns; however, nothing contained in this paragraph shall permit any
assignment which otherwise is prohibited by this Agreement. If any provision of
this Agreement is held by a court of competent jurisdiction to be invalid, void
or unenforceable, the remaining provisions will nevertheless continue in full
force without being impaired or invalidated in any way.
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IN WITNESS WHEREOF, DTN and Contractor have signed this Agreement as of
the date first set forth above.
Address of DTN for DATA TRANSMISSION NETWORK
notices: CORPORATION, a Delaware corporation
Data Transmission Network By:________________________________
Corporation Title:_____________________________
0000 Xxxx Xxxxx Xxxx
Xxxxx 000
Xxxxx, XX 00000
Attention: President
Address for Contractor XXXXXX, INC.
and Xxxxxx for notices:
Xx. Xxxx Xxxxxx By:________________________________
000 Xxxxxxxxx Xxxxx, #000 Xxxx Xxxxxx, President
Dakota Xxxxx, XX 00000
------------------------------------
Xxxx Xxxxxx, principal of Xxxxxx,Inc
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