MEMBER SERVICES AGREEMENT
Exhibit
10.3
This
Member Services Agreement (this “Agreement”)
is
entered into and effective as of May 1, 2007 (the “Effective
Date”)
by and
between WEBDIGS, LLC a Minnesota limited liability company (the “Company”)
and
XXXXXX XXXXX, a Minnesota resident (“XXXXX”).
Capitalized terms used but not defined in this Agreement shall have the meanings
ascribed to them in the Company’s Member Control Agreement dated May 1, 2007
(the “Member
Control Agreement”).
RECITAL
Xxxxx
is
a founder and Member of the Company. The Company desires to engage Xxxxx to
serve as its President & CEO, and Xxxxx desires to provide such services to
the Company, pursuant to the terms and conditions set forth in this
Agreement.
AGREEMENT
In
consideration of the above recitals and the mutual covenants and conditions
set
forth in this Agreement, the Company and Xxxxx hereby agree as
follows:
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1.
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Engagement.
The Company hereby engages Xxxxx as its President & CEO, pursuant to
the terms and conditions of this Agreement, to perform all of the
duties
and functions of said position and such other duties and functions
as the
Company may from time to time reasonably request (the “Services”).
Xxxxx hereby accepts such engagement and agrees to perform and be
available to perform such Services on a full-time basis. Xxxxx understands
that he is a Member of the Company and is not an employee of the
Company.
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2.
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Term
of Service.
Xxxxx’x engagement with the Company as its President & CEO shall
commence on the Effective Date and shill continue until terminated,
pursuant to terms and conditions herein below. Xxxxx understands
that his
Agreement and his Services hereunder may be terminated at any time
by the
Company with or without cause. Xxxxx agrees to give no less than
30 days
written notice to the Company prior to his resignation as its President
& CEO.
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3.
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Duties.
Xxxxx agrees to serve the Company faithfully and to the best of his
ability and shall devote his full working time, attention and effort
to
the business of the Company during his engagement with the Company.
Xxxxx
also agrees that he shall not, during the course of his performance
of
Services for the Company, without prior written approval of the Board
of
Governors, become an employee, member, director, officer, agent,
partner
of or consultant to, or a stockholder of (except a stockholder of
a public
company in which Xxxxx owns less than five percent (5%) of the issued
and
outstanding capital stock of such company) any company or other business
entity which is a competitor, supplier or customer of the
Company.
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4.
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Compensation,
Benefits and Expenses.
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4.1
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Compensation.
Beginning on January 1, 2007, the Company shall pay Xxxxx compensation
equal to $120,000 annually, payable in accordance with the Company’s
regular payroll cycle. This Agreement may be amended from time to
time by
agreement in writing between the Company and Xxxxx to adjust the
compensation provided for herein, based on Xxxxx’x performance or the
performance and financial situation of the
Company.
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1
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4.2
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Benefits.
While providing Services to the Company, Xxxxx shall be entitled
to
participate in any of the Company’s employee benefits programs available
to Members to the extent permitted by applicable federal or state
tax law.
Xxxxx agrees to pay all applicable tax liabilities associated with
such
payments or benefits.
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4.3
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Guaranteed
Payments.
The Company and Xxxxx acknowledge and agree that the payments made
to
Xxxxx under Sections 4.1 and 4.2 constitute “guaranteed payments” within
the meaning of Section 707(c) of the Code, and shall be treated as
such
for income tax purposes by the Company and Xxxxx. Xxxxx agrees that
the
Company shall not make any deductions, withholding or other contributions
of Social Security, unemployment compensation, income tax or otherwise,
under any federal, state or local law with respect to payments made
to him
under this Agreement. Xxxxx agrees and understands that he shall
be solely
responsible for the payment of all income, self-employment, and other
applicable taxes that are due with respect to such
payments.
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4.4
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Expense
Reimbursement.
The Company shall reimburse Xxxxx for business expenses reasonably
incurred by Xxxxx in connection with the performance of Xxxxx’x duties
hereunder, upon the presentation by Xxxxx of receipts and itemized
of such
expenditures in accordance with the rules and regulations of the
Internal
Revenue Code and the Company’s expense reimbursement
policies.
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5.
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Termination.
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5.1
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Termination.
Notwithstanding anything contained herein to the contrary, this Agreement
and Xxxxx’x engagement by the Company as is President & CEO may be
terminated by the Company or by Xxxxx, for any reason or for no reason,
upon written notice to the other
party.
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5.2
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Termination
Due to Death.
This Agreement shall terminate immediately upon the event of Xxxxx’x
death. In such event, Xxxxx’x estate or legal representative shall be paid
any earned and unpaid compensation, if any, on a pro rata basis for
period
through Xxxxx’x date of death.
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6.
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Confidential
Information.
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6.1
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Definition.
For purposes of this Agreement, “Confidential
Information”
means any information in any way related to the Company that Xxxxx
has
learned or developed since the Company’s inception and any information
that Xxxxx learns or develops during the course of his Services to
the
Company that derives independent economic value from being not generally
known or readily ascertainable by other persons who could obtain
economic
value from its disclosure or use. Confidential Information includes,
but
is not limited to, information contained in or relating to technology
and
development plans or proposals, source code, marketing plans or proposals,
strategies, financial statements, budgets, pricing formulas, customer
and
supplier information, employee information and other proprietary
information of the Company, whether written, oral or communicated
in
another medium, whether disclosed directly or indirectly, whether
disclosed prior to or after the date of this Agreement, whether originals
or copies and whether or not legal protection has been obtained or
sought
under applicable law. Xxxxx shall treat all such information as
Confidential Information regardless of its source and whether or
not
marked as confidential.
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2
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6.2
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Restriction.
Except as permitted by the Board of Governors, during the term of
Xxxxx’x
engagement with the Company (except as may be reasonable in conjunction
with Xxxxx’x duties hereunder) and at all times thereafter, Xxxxx shall
not directly or indirectly use or disclose any Confidential Information
to
any person, firm, corporation, association or other entity for any
reason
or purpose without the prior written consent or authorization of
the Board
of Governors. Such restriction shall continue to be binding upon
Xxxxx
after termination and is an independent covenant. Xxxxx recognizes
that
the Confidential Information constitutes a valuable asset of the
Company
and hereby agrees to act in such a manner as to prevent its disclosure
and
use by any person unless such use is for the benefit of the Company.
Xxxxx’x obligations under this Section 6 are unconditional and will not
be
excused by any conduct on the part of the Company, except prior voluntary
approval of disclosure by the Company of the Confidential
Information.
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6.3
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Return
of Confidential Information.
Upon the termination of Xxxxx’x engagement with the Company, for whatever
reason, Xxxxx shall promptly deliver the Company all originals and
copies
in his possession or control of all documents, records, software,
media
and other materials containing any Confidential
Information.
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7.
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Inventions.
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7.1
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Obligation
to Disclose.
Xxxxx hereby agrees to disclose promptly to the Company (or any persons
designated by it) all developments, designs, creations, improvements,
original works of authorship, formulas, processes, know-how, techniques
and/or inventions, (hereinafter referred to collectively as “Inventions”)
(i) which are made or conceived or reduced to practice by Xxxxx,
either
alone or jointly with others, during the term of this Agreement,
or which
are reduced to practice during the period of twelve (12) months following
the termination of this Agreement, that relate to in the present
or future
business of the Company; or (ii) which result from tasks assigned
Xxxxx by
the Company, or from Xxxxx’x use of the premises or other resources owned,
leased or contracted by the
Company.
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7.2
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Obligation
to Assign.
Xxxxx agrees that all such inventions which the Company determines
to, be
related to its business or its, research or development, or which
result
from work performed by Xxxxx for the Company, shall be the sole and
exclusive property of the Company and its assigns, and the Company
and its
assigns shall have the right to use and/or to apply for patents,
copyrights or other statutory or common law protections for such
Inventions in any and all countries. Xxxxx further agrees to assist
the
Company in every proper way (but at the Company’s expense) to obtain and
from time to time enforce patents, copyrights and other statutory
or
common law protections for such Inventions in any and all countries.
To
that end, Xxxxx will execute all documents for use in applying for
and
obtaining such patents, copyrights and other statutory or common
law
protections therefor and enforcing the same, as the Company may desire,
together with any assignments thereof to the Company or to persons
or
entities designated by the Company.
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7.3
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Scope.
Xxxxx’x obligations under this Section 7 shall continue beyond the
termination of this Agreement, but the Company shall compensate Xxxxx
at a
reasonable rate after such termination for time actually spent by
Xxxxx at
the Company’s request in providing such assistance. Any provision in this
Agreement requiring Xxxxx to assign Xxxxx’x rights in any Invention to the
Company shall not apply to any Invention for which no equipment,
supplies,
facility or trade secret information of the Company was used and
which was
developed entirely on Xxxxx’x own time, and (1) which does not relate (a)
directly to the business of the Company or (b) to the Company’s actual or
demonstrably anticipated research or development, or (2) which does
not
result from any work performed by Xxxxx for the
Company.
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3
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8.
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Non-Compete
and Non-Solicitation.
The Company and Xxxxx agree that the Company would be substantially
harmed
if Xxxxx competes with the Company during the one year period after
termination of this Agreement or termination of Xxxxx’x Services
hereunder. Therefore, the Company and Bums agree as
follows:
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8.1
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No
Competing Business.
During the term of this Agreement, and for a period of one year after
the
termination of this Agreement, regardless of the reason for such
termination, Xxxxx agrees to not, directly or indirectly, engage
in any
business that is in competition with the Company within the geographic
area being served by the Company. Xxxxx also agrees not to plan or
otherwise take any preliminary steps, either alone or in concert
with
others, to set up or engage in any business enterprise that would
be in
competition with the Company. For purposes of this Agreement, the
Company
is in the business of providing products and services to facilitate
and
enhance sales of real estate, including real estate brokerage services,
title and property insurance services, and mortgage brokerage services
and
may engage in other or additional businesses over
time.
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8.2
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No
Solicitation of Customers.
During the term of this Agreement, and for a period of one year after
the
termination of this Agreement, regardless of the reason for such
termination, Xxxxx agrees to not, directly or indirectly, solicit
or work
for any former or current customers of the Company, nor divert any
business from the Company. Xxxxx agrees that for the same one year
period
after Xxxxx ceases working for the Company, Xxxxx shall not in any
way
contact, attempt to contact, interfere or attempt to interfere with
the
Company’s relationships with any of its customers. During the one year
period after the termination of this Agreement, if any of the Company’s
customers; without solicitation by Xxxxx, contact Xxxxx about performing
work for said customer in any way related to the business of the
Company,
Xxxxx shall obtain written permission from the Company’s Board of
Governors before performing such
work.
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8.3
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No
Solicitation of Employees.
During the term of this Agreement and for a period of one year after
the
termination of this Agreement, regardless of the reason for such
termination, Xxxxx agrees to not directly or indirectly, solicit
for
employment, employ, or otherwise contract with for services, any
of the
Company’s employees, consultants or subcontractors on behalf of himself or
other person or entity.
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8.4
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No
Employment with Customers.
During the term of this Agreement, and for a period of one year after
the
termination of this Agreement, regardless of the reason for Xxxxx’x
termination, Xxxxx shall not, directly or indirectly, become employed
with
or provide any services to any customer of the
Company.
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9.
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Remedies
for Breach of Agreement.
Xxxxx recognizes that if he violates any portion of this Agreement,
irreparable damage will result to the Company that could not be remedied
by monetary damages. As a result Xxxxx hereby agrees that in the
event of
any breach by him of any portion of this Agreement, or in the event
of
apparent danger of such breach, the Company shall be entitled, in
addition
to any other legal or equitable remedies available to it, to an injunction
to restrain such breach, without the necessity of posting a bond
or
complying with any similar
requirement.
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4
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10.
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Miscellaneous.
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10.1
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Integration.
This Agreement embodies the entire agreement and understanding by
and
between the Company and Xxxxx relative to the subject matter hereof
and
supersedes all prior agreements and understandings relating to the
same.
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10.2.
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Applicable
Law.
This Agreement and the right of the Company and Xxxxx hereunder shall
be
governed by and construed and enforced in accordance with the laws
of the
State of Minnesota. The venue for any action hereunder shall be in
the
State of Minnesota, whether or not such venue is or subsequently
becomes
inconvenient, and the Company and Xxxxx hereby consent to the jurisdiction
of the courts of the State of Minnesota, County of Hennepin, and
the U.S.
District Court, District of
Minnesota.
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10.3
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Modification.
This Agreement shall not be modified or amended except by a written
instrument signed by the Company and
Xxxxx.
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10.4
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Waiver.
No Waiver of any term, condition or covenant of this Agreement by
the
Company or by Xxxxx shall be deemed a waiver of any subsequent breaches
of
the same or other terms, conditions or covenants hereof by such
party.
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10.5
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Counterparts.
This Agreement may be executed in several counterparts and as so
executed
shall constitute one agreement binding on the parties
hereto.
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10.6
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Severability.
The invalidity or partial invalidity of any portion of this Agreement
shall not invalidate the remainder thereof, and said remainder shall
remain in full force and effect. Moreover; if one or more of the
provisions contained in this Agreement shall, for any reason, be
held to
be excessively broad as to scope, activity, subject or otherwise,
so as to
be unenforceable at law, such provision or provisions shall be construed
by the appropriate judicial body by limiting or reducing it or them,
so as
to be enforceable to the maximum extent compatible with then applicable
law.
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10.7
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Survival.
The Company and Xxxxx acknowledge and agree that the provisions of
this
Agreement which by their terms extend beyond the termination of this
Agreement and the termination of Xxxxx’x engagement hereunder shall
continue in full force and effect notwithstanding the termination
of this
Agreement or termination of Xxxxx’x
engagement.
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10.8
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Binding
Effect.
Except as herein or otherwise provided to the contrary, this Agreement
shall be binding upon and inure to the benefit of the parties and
their
respective heirs, successors, assigns and personal representatives;
provided, however, that neither party may assign its rights or obligations
hereunder without other the prior written consent of the other
party.
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10.9
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Notices.
All notices, requests and other communications hereunder shall be
given in
writing and deemed to have been duly given or served if personally
delivered, or sent by first class, certified mail, return receipt
requested, postage prepaid, to the party at the address as provided
below,
or to such other address as such party may hereafter designate by
written
notice to the other party: (a) if to the Company, to the address
of its
then principal office, and (b) if to Xxxxx, to the address last shown
in
the records of the Company.
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10.10
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Captions.
The various headings or captions in this Agreement are for convenience
only and shall not affect the meaning or interpretation of this
Agreement.
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[Remainder
of this Page Blank. Signature Page Follows.]
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The
parties have executed this Member Services Agreement to be made effective as
of
the Effective Date.
| COMPANY: | ||
| WEBDIGS LLC | ||
| /s/ Xxxxxx Xxxxx | ||
| By: | Xxxxxx Xxxxx | |
| Its: | CEO | |
| MEMBER: | ||
| /s/ Xxxxxx Xxxxx | ||
| Xxxxxx Xxxxx, Individually | ||
[Signature
Page to WebDigs, LLC/Xxxxx Member Services Agreement]
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