Exhibit 10.19
AGREEMENT
THIS AGREEMENT by and between WHY USA North America, Inc., a Wisconsin
corporation, (hereinafter "WHY USA"), and Xxxxxx Xxxxxxxx (hereinafter
"Xxxxxxxx"),
W I T N E S S E T H:
WHEREAS, Xxxxxxxx wishes to purchase, and open, fifty (50) new WHY USA
real estate franchises in the territories of Wisconsin and Illinois, and
WHEREAS, WHY USA wishes to sell to Williams fifty (50) WHY USA real
estate franchises, and
WHEREAS, Xxxxxxxx wishes to purchase the rights to open said franchises
over a scheduled period of five (5) years at a fixed fee.
NOW THEREFORE, for good and valuable consideration, the sufficiency of
which is hereby acknowledged, the parties agree to the following terms and
conditions:
1. Xxxxxxxx shall pay to WHY USA the sum of $150,000.00, as and for the
fee for those rights, as expressed herein, to develop fifty (50) WHY
USA offices in the states of Wisconsin and Illinois. This fee is
non-refundable and no portion thereof is contingent upon the
completion of the terms of this Agreement. This fee must be received
by WHY USA, in good funds, by April 23, 2001 or this agreement shall
be null and void.
2. If Xxxxxxxx is not in default, under the terms of this Agreement, he
shall be entitled to acquire, for the fee set in paragraph 1 above,
fifty (50) WHY USA franchises within five years from the date first
stated hereon. During the term of this Agreement, Xxxxxxxx must
remain as an owner of a majority interest in the various franchises
that he, or an entity that
he is associated with, shall open. Any transfer of an interest in a
WHY USA franchise must be done in compliance with the requirements
stated in the applicable franchise agreement.
3. If Xxxxxxxx is not in default, under the terms of this Agreement, he
has the exclusive right to develop all of the territories of Wisconsin
and Illinois from those territories then available. Certain
territories shall not be available for selection (See attached Exhibit
A for list of unavailable territories). Xxxxxxxx also understands
that franchisees owning franchises in Wisconsin and Illinois have
certain contractual rights to additional territories at set fees.
This Agreement shall not affect the rights of other franchisees to
exercise said rights to acquire additional territories under their
franchise agreement.
4. Any selection by Xxxxxxxx of a new territory shall not be more than 30
days in advance of the scheduled opening of the new office. Williams
shall notify WHY USA, in writing, of the selected territory upon his
election and exercising of his rights. It shall be a default of this
Agreement to fail to open the franchise office within the terms
specified in the franchise agreement applicable to the selected
territory.
5. If, during the term of this Agreement, WHY USA shall locate a new
buyer for a territory that is in Wisconsin or Illinois, WHY USA shall
notify Xxxxxxxx of such buyer. If Xxxxxxxx is not in default of this
Agreement, he shall have 20 days to exercise his right to said
territory, as specified above. In the event that Xxxxxxxx does not
exercise his rights to said territory, he shall then be entitled to
receive a fee of $5,000.00 if WHY USA sells said territory to the
identified third party buyer. Each territory sold by WHY USA during
the term of this Agreement shall reduce the number of territories that
Xxxxxxxx is obligated to
open pursuant to this Agreement. The $5,000 payment to Xxxxxxxx, as
specified in this paragraph, shall only be due to Xxxxxxxx during the
5 year term of this Agreement or until the sale of 50 franchises,
which ever event occurs earliest, and provided Xxxxxxxx is not in
default of this Agreement.
6. The terms of WHY USA's franchise agreement, that is in circulation at
the time each new office is opened, shall govern that franchise.
Nothing in this Agreement shall be construed to release Xxxxxxxx from
any obligation stated in the franchise agreement that shall govern
each new franchise, except that the initial franchise fee paid by
Xxxxxxxx shall be governed by the terms stated herein, including
payment of the fee to acquire the rights to open the stated 50
franchises. Nothing in this Agreement shall be construed to limit WHY
USA's right to collect the entire transaction fees or any other fees
as stated in the relevant franchise agreement.
7. Xxxxxxxx agrees to open the franchises on the following schedule:
a. By December 31, 2001 - 5 franchises shall be opened.
b. By December 31, 2002 - 15 additional franchises shall be opened
c. By December 31, 2003 - 10 additional franchises shall be opened
d. By December 31, 2004 - 10 additional franchises shall be opened
e. By December 31, 2005 - 10 additional franchises shall be opened
WHY USA may waive this schedule at its sole discretion. Xxxxxxxx may
accelerate the above schedule (i.e. If Xxxxxxxx acquires 17 franchises
in year 2003, 7 franchises shall apply to his year 2004 obligation).
Xxxxxxxx agrees that he must be current on his payments and not in
default herein in order to open a new franchise. Xxxxxxxx shall be
required to pay an initial franchise fee $1,250.00 upon the selection
of each new territory
and to execute a current franchise agreement.
8. Xxxxxxxx agrees to follow all applicable state or federal laws in the
opening of each office, the development of each territory, and the
location of potential partners. Xxxxxxxx agrees that he will not
participate in any activity that can be construed as sub-franchising.
Xxxxxxxx agrees to present his advertisements to WHY USA for approval
prior to circulating said advertisements. WHY USA shall be entitled
to approve or disapprove of those advertisements prior to Xxxxxxxx
submitting the same for publication. Williams agrees that WHY USA is
not responsible for any obligation that he may have towards his
business partners and agrees to indemnify and hold WHY USA harmless
for any cause, claim, or action that may result from, or be brought
by, a business partner or associate of Xxxxxxxx.
9. In the event of a failure by Xxxxxxxx to complete any of the terms of
this Agreement (including, but not limited to, failing to keep the
above stated schedule for opening franchises) WHY USA may, at its
option, suspend Xxxxxxxx rights to open new franchises, or to select
new territories, until Williams cures the default, or WHY USA may
choose to terminate this Agreement upon 30 day written notice to
Williams. If WHY USA shall suspend Xxxxxxxx' right to open new
franchises or to select new territories, such suspension shall not
extend the time period Xxxxxxxx had to open franchises. Xxxxxxxx
recognizes that if he fails to meet the schedule set forth above
following his suspensions, such failure shall be the result of his own
actions and as a result of his failure to cure said default. If this
Agreement is terminated for failure to meet such schedule, or for any
other default, Xxxxxxxx shall be entitled to no refund of any monies
previously paid under this Agreement. Such termination shall not
effect the individual franchise agreements
previously entered into between the parties under this Agreement and
both parties shall be obligated to continue to perform under such
agreements in accordance with their terms.
10. Any notice due hereunder shall be deemed to have been given when hand
delivered, or three days after placed in the United States mail,
postage prepaid, and sent to the following addresses, or to such other
address as a party may request:
WHY USA NORTH AMERICA
0000 X.X. Xxx 00, Xxxx
X.X. Xxx 000
Xxxxxxxxx, XX 00000
Xxxxxx Xxxxxxxx
0000 Xxxxxxx Xxxx
Xxxxxxxxxx, XX 00000
11. The non-defaulting party shall be entitled to recover from the
defaulting party its costs, fees, and disbursements, including
reasonable legal fees that may be incurred in any enforcement or
collection action.
12. Whenever possible, each provision of this Agreement will be
interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be
invalid, illegal or unenforceable under any applicable law or rule in
any jurisdiction, such provision will be ineffective only to the
extent of such invalidity, illegality, or unenforceability in such
jurisdiction, without invalidating the remainder of this Agreement in
such jurisdiction or any provision hereof in any other jurisdiction.
In no event shall this Agreement be interpreted in a manner to
conflict with the then current franchise agreement. In all such
conflicts the terms and definitions of the franchise agreement shall
govern.
13. Each of the parties hereto, his heirs, legal representatives, shall do
all things to execute and deliver any and all documents which may be
necessary at any time to carry out and effectuate the terms and
conditions of this Agreement. The parties agree that this contract
is not assignable.
14. This Agreement shall be construed and enforced in accordance with the
laws of the State of Wisconsin.
15. This Agreement contains the entire understanding between the parties
hereto with respect to the transactions contemplated hereby and
supersedes and replaces all prior and contemporaneous agreements and
understandings, oral or written, with regard to such transactions.
This Agreement may only be amended by a writing signed by the party
against whom enforcement is sought.
16. During the term of this agreement, if Xxxxxxxx acquires fifty (50)
franchises, as specified herein, Xxxxxxxx may acquire additional
franchises until the end of the 5 year term, if he is not in default
of the terms of this agreement. The franchise fee shall become
$4,950.00 for these additional franchises and Xxxxxxxx shall pay
$1,250.00 additional for each franchise as, and for, training to be
provided by WHY USA pursuant to the franchise agreement. These fees
shall be paid at the time of signing of the franchise agreement. WHY
USA shall not provide any credit for advertising for franchised
acquired in excess of fifty (50).
17. The effective date of this Agreement shall be March 31, 2001.
THE PARTIES HERETO acknowledge that the above stated recitals are true and
correct and are hereby incorporated by reference. The parties hereto have
entered into this Agreement in reliance upon the recitals set forth herein
above together with the remaining covenants, terms and conditions of this
Agreement. The parties agree that they have had adequate opportunity to seek
legal counsel regarding the terms as stated herein.
WHY USA NORTH AMERICA, INC. XXXXXX XXXXXXXX
/s/ Xxxxxx Xxxxxxx /s/ Xxxxxx Xxxxxxxx
_______________________________ _________________________________
Xxxxxx Xxxxxxx, Secretary / Treasurer
* WHY USA is a registered Trademark of WHY USA North America, Inc.
