EXHIBIT 10.19
FORM OF BROKER MEMBERSHIP AGREEMENT
BROKER MEMBERSHIP AGREEMENT
This Agreement, dated, _________________is between Red Carpet Real Estate
Service, ("Red Carpet") and ________________________________, ("Broker") dba,
________________________________________, ("The Business"), Broker's State of
Registration ____,
Address:__________________________________________________________
__________________________________, Telephone number: ________________________.
Red Carpet has been established for the purpose of developing a unique
membership of real estate brokerage businesses under the name "Red Carpet Real
Estate Service ("The Membership").
B. Broker is a fully licensed and registered real estate broker in good
standing with the State listed above, and has conducted real estate business for
no less than two years, as described in Broker Membership Application.
C. Broker has applied to join the Membership and participate in the
Membership under the terms and conditions contained in this Agreement. in
consideration of the following mutual promises, the parties agree that:
1. ADMISSION. (a) Red Carpet admits Broker into the Membership and
authorizes Broker to operate the Business using the trade name Red Carpet
Real Estate Service Membership . (When using Red Carpet Real Estate Service
Membership as part of its trade name, Red Carpet Real Estate Service
Membership may only be followed by Broker's DBA Name).
(b) Red Carpet authorizes the Business to use Red Carpet 's
trademarks and service marks and participate in the Membership's programs and
other benefits so long as Broker remains in good standing under this
Agreement. Broker acknowledges that Red Carpet, at its discretion, may modify
its programs from time to time as necessary.
2. TERMS: The term of this Agreement is five years, beginning
___________________________. This Agreement may be renewed for an additional
five year term under the terms available at the time of renewal if Broker gives
written notice of renewal to Red Carpet at least ninety (90) days prior to the
end of its initial term, is in good standing at such time, sends with its notice
a renewal fee of $500.00, and signs the Red Carpet Membership Agreement in
effect at the time of renewal.
(a) Broker agrees to pay Red Carpet upon signing this Agreement a
non-refundable Membership Fee of $1,500.00.
(b) Broker also agrees to pay Red Carpet monthly dues of $100.00
for the Broker and $40.00 for each additional Associate. An Associate is
defined as any licensed broker, salesperson or assistant who is affiliated,
directly or indirectly, with Broker, and/or who uses the marks or programs of
Red Carpet in any way. Within 5 days after an Associate becomes affiliated
with the Business, Broker must give written notice of such affiliation to
Red Carpet. Failure to report such affiliation within the 5 day period shall
be considered a material default of this Agreement, and Broker agrees to pay
Red Carpet $250.00 per month for any and all new Associates from the date of
affiliation with Broker until Red Carpet receives written notice hereunder.
So long as Broker follows the reporting requirements outlined in this
Section, dues for a new Associate will commence on the first month following
the second full month of affiliation.
(c) Broker agrees to pay the dues each month and authorizes Red
Carpet to make a direct transfer of the dues from Broker's bank account or
designated credit card between the 20th and 25th day of each month. Broker
will sign the Authorization attached to this Agreement as Schedule A and take
any additional action that may be required by Broker's bank to set up and
maintain direct transfer bank authorization. Broker will maintain sufficient
funds in the designated bank account or sufficient credit limits with the
designated credit card at all times to allow timely honoring of each
transfer. No payments may be made from Broker's trust accounts.
(d) If any payment of dues is not received by Red Carpet when due,
Broker will pay a late payment fee for the additional collection costs and
pay interest on the delinquent amount at the highest rate permitted by law
until paid in full. The amount of the late payment fee will be $25.00 if the
full delinquent amount and late payment fee are received by Red Carpet on or
before the first day of the month following the date payment was due, or
$100.00 if received thereafter.
(e) Red Carpet, from time to time, intends to offer additional
services over and above those services included in the Membership which may
require additional fees. These services will be optional and are not
required to participate in the Membership.
Broker herein agrees to pay the sum of $100.00 on each closed
transaction unit to Red Carpet as a service fee. The fee shall become due and
payable immediately upon the closing of each closed unit. From this fee the
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Broker shall be reimbursed 30% of the fees collected for Red Carpet Real
Estate Service name and trademark promotion). Broker shall be entitled to
reimbursement only for months when Broker's closed units exceed four.
Reimbursements shall be made quarterly upon submission of advertising copy
accompanied by a paid invoice.
Broker shall be invoiced annually a fee of $295.00 for computer
services. Such fee is due and payable upon receipt of invoice.
3. GOOD STANDING: "Good Standing" means that Broker is current with
all payments owed to Red Carpet or its affiliates, remains fully licensed and
registered as set forth above in section C 2 (b), has not been convicted of a
felony and is in full compliance with Section 6 (b) below and all other
requirements of this Agreement. Broker warrants that the Broker's license
submitted with Broker's Membership Application is in full force and effect.
Broker agrees to notify Red Carpet immediately of any suspension or revocation
of such license and to deliver to Red Carpet, immediately after each license
renewal, a true and correct copy of the renewed license.
4. USAGE OF MARKS: Broker agrees to use the Marks only in the ways
designated by Red Carpet. Broker will never use the Marks in a way which may
be in bad taste or inconsistent with the high quality reputation of the
Membership and its public image or tend to bring disparagement, ridicule, or
scorn upon the Marks, the Membership or its goodwill. Broker agrees that all
goodwill associated with the Marks and the Membership belong exclusively to Red
Carpet . Broker will never, during the term of this Agreement or thereafter,
directly or indirectly contest the validity, ownership or use of the Marks by
the Membership or the rights of Red Carpet to the Marks. Broker acknowledges
that the authority to use the Marks set forth in this Agreement is not exclusive
and that Red Carpet may grant similar authority or license at its sole
discretion to other brokers within and outside the trade area covered by Broker.
Broker further acknowledges that an affiliate of Red Carpet has granted and
will continue to grant franchise licenses for the operation of franchised
businesses under the name "Red Carpet Real Estate Service" and agrees to
cooperate with such franchisees and not interfere with their business interests.
5. RELATIONSHIP. Broker is not and will not represent or hold
itself out as being an agent, legal representative, joint venturer, partner,
employee or servant of Red Carpet for any purpose. Broker is not authorized to
make any statement or to create any obligation, expressed or implied, on behalf
of Red Carpet or the Membership. Broker agrees to identify itself as an
independently owned and operated business when using any of Red Carpet 's
trademarks or service marks. The parties intend that the relationship between
them is defined as an exemption by the Federal Trade Commission's Trade
Regulation Franchise Rule, 16 CFR 436.2(a)(3)(i),(h). Broker agrees that it is
not relying on Red Carpet or its expertise to operate the Business successfully
or make it profitable, or for significant assistance in its methods of
operation, including but not limited to, its business organization, management,
marketing plan, promotional activities, or business affairs.
6. INDEMNIFICATION: (a) Broker will indemnify Red Carpet, its parent
and affiliates and its and their officers, directors, employees, agents,
affiliates, successors and assigns from and against any and all claims in any
way related to the operation of the Business or the property where the business
is operated and any and all fees (including reasonable attorneys' fees), costs
and other expenses incurred by or on behalf of Red Carpet in the investigation
of or defense against any such claim.
(b) Broker agrees to obtain within thirty (30) days after the date of
this Agreement and will continue to maintain in full force and effect throughout
the term of this Agreement, an insurance policy or policies (the "Insurance")
with the following protections: (i) General liability insurance insuring the
Business and its primary owners and managers against any claims, losses or
liabilities arising out of or in connection with the operation of the Business
and the ownership of property used in the Business with minimum coverage of
$200,000 per person, $500,000 per incident, and $50,000 property damage; (ii)
Errors and omissions coverage against any customer claims, with minimum coverage
of $1,000,000; and (iii) Vehicle liability insurance for all vehicles used in
the business with minimum coverage of $100,000 per person and $300,000 per
accident for bodily injury, and $50,000 for property damage. Broker agrees to
report all transactions to its Errors and Omissions insurance provider as
required by such policy. Failure to report each and every transaction as
required by such policy shall be considered a material default of this
Agreement. Broker agrees that Red Carpet shall be named as an additional
insured on the Insurance. Broker agrees that it will not use the Marks until
such insurance has been obtained and Red Carpet has received a true and correct
copy thereof as well as a certificate of insurance showing compliance with the
requirements of this Agreement, stating that the insurance will not be canceled
or altered without at least thirty days (30) days prior written notice to Red
Carpet .
(c) If Red Carpet has not received the above within thirty (30) days
after the date hereof, this Agreement shall be automatically canceled, and a
failure to maintain such insurance is a material default of this Agreement. The
Insurance must be written by a responsible insurance company or companies
satisfactory to Red Carpet. If Red Carpet fails to enforce this requirement
for whatever reason, it shall not be deemed in any way to have waived its rights
under this Section.
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7. PERSONAL CONTRACT. Broker agrees that a the primary reason that Red
Carpet is admitting Broker to the Membership is the personal confidence it has
in Broker and its management. No person will succeed to any of Broker's rights
under this Agreement by virtue of any voluntary or involuntary proceeding in
bankruptcy, receivership, attachment, execution, assignment tor the benefit of
creditors, other legal process or transfer not expressly authorized by Red
Carpet . Any attempt by Broker to transfer any of its rights or interest under
this Agreement without Red Carpet 's authorization will constitute a material
breach of this Agreement, in which case Red Carpet may terminate this Agreement
immediately upon written notice to Broker. Red Carpet will not be bound by an
attempted transfer, by law or otherwise, of any part or all of this Agreement
unless Broker has received Red Carpet 's prior written consent, which will not
be unreasonably withheld. Broker will pay Red Carpet a transfer fee of
$1,000.00 with its request for a consent to transfer, and must be in good
standing at the time of such request. In considering a request for transfer, Red
Carpet will consider qualifications, apparent ability and credit standing of
the proposed transferee as if he or she were a prospective direct purchaser of a
membership in the Membership.
8. COVENANT Broker expressly agrees during the term hereof: (a) to
maintain its good standing at all times, (b) to comply with the reporting
requirements of Sections 2(b), 3 and 6(b) of this Agreement, 6(c) to provide
full, true and accurate information as necessary, to maintain in full force and
effect the Insurance required by Section 6(b) above, and (d) to provide at the
Business at all times service which meets Red Carpet 's service requirements as
set forth from time to time in writing and sent to Broker. Broker's failure to
maintain any of its obligations under this Section 8 shall be considered a
material default of its obligations hereunder.
9. Red Carpet may terminate this Agreement in full following thirty (30)
days written notice unless Broker has cured such default or failure within such
thirty day period. The parties agree that in such event, actual damages to Red
Carpet would be extremely difficult to ascertain, and consequently broker
agrees to pay Red Carpet as liquidated damages all dues which would otherwise
be required to be paid to Red Carpet during the six (6) months following
termination in addition to any payments due hereunder.
(b) Broker may terminate this Agreement without cause by
giving written notice to Red Carpet in the first six (6) months prior to
termination or by including with such notice full payment of all dues which
would be due hereunder during such six (6) month period, in which case the
termination shall be effective upon receipt of the notice and payment by Red
Carpet. In each case, Broker must be and remain current in all amounts
otherwise due under this Agreement for such notice to be effective.
(c) This Agreement will be automatically and immediately
terminated if a petition for bankruptcy, an arrangement for the benefit of
creditors or a petition for reorganization is filed by or against Broker, or if
Broker will make any assignment for the benefit of creditors, or if a Receiver
or Trustee is appointed for the Business, unless remedied to Red Carpet 's
satisfaction within twenty (20) days.
(d) When this Agreement expires or terminates for any reason,
Broker must immediately discontinue the use of the Marks and return all items
bearing the Marks to Red Carpet, and remove all of the Marks from the Business
to Red Carpet's satisfaction.
10. CONFIDENTIALITY: (a) Broker agrees that Red Carpet is the
owner of all rights in and to the system employed by the Membership, and that
such system contains trade secrets which are revealed to Broker in strictest
confidence. Broker agrees not to disclose, duplicate, license, sell or reveal
any portion of any confidential documents within the system to any other person,
except an employee or Associate of Broker required by his or her work to be
familiar with such information. Broker agrees to keep and respect all
confidential information received from Red Carpet, to obtain from each of the
Business's Associates an agreement to keep and respect all such confidences and
to be responsible for its compliance with such agreements.
(b) Neither Broker nor any Associate will, directly or
indirectly, engage in or have any interest whatsoever in any Similar Business or
provide services to a Similar Business without Red Carpet 's prior written
consent. A "Similar Business" is any business which primarily involves assisting
in the sale of real property for a fee or commission.
(c) Broker agrees that any violation of this Section 10
would result in irreparable injury to Red Carpet and the Membership and that
Red Carpet would be without an adequate remedy at law. In the event of a breach
or threatened breach of this Section 10, Red Carpet will not be required to
prove actual or threatened damage in order to obtain a temporary or permanent
injunction or a decree for specific performance of these terms. Red Carpet
shall also be entitled to any other remedies which it may have at law or in
equity. Each of these covenants will be construed as independent of each other
and of any other provision of this Agreement. If all or any opinion of this
Section 10 is held unenforceable by a court having valid jurisdiction in a final
decision between the parties hereto and from which no appeal has or may be
taken, Broker expressly agrees to be bound by the remaining portion of this
Section.
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11. TRADEMARK INFRINGEMENT. If Broker refuses to comply with a
written notice of termination sent by Red Carpet and a court later upholds such
termination of this Agreement, any operation of the Business by Broker using the
Marks from and after the date of termination stated in such notice will
constitute trademark infringement by Broker, and Broker will be liable to Red
Carpet for damages resulting from such infringement, including, without
limitation, any profits made by Broker.
12. ARBITRATION: Except as set forth in this Section 12, any dispute
between the parties which involves this Agreement and cannot be resolved by the
parties themselves must be submitted to binding arbitration in accordance with
the rules of the American Arbitration Association applicable to commercial
arbitrations. Such arbitration will be held within the county where Red Carpet
executive headquarters are located ("the Home County"), and judgment upon the
decision of the arbitrator may be entered in any court having jurisdiction over
the matter. However, arbitration will not be used for any dispute which
involves Broker's continued usage of any of the Marks or any issue involving
injunctive relief against Broker, all of which issues will be submitted
initially to a court within the Home County. The parties expressly consent to
personal jurisdiction in the Home County as set forth above and agree that such
courts will have exclusive jurisdiction over any such issues not subject to
arbitration.
13. MISCELLANEOUS. (a) The expiration or earlier termination of this
Agreement will not discharge or release a party from any liability or obligation
then accrued or any liability or obligation continuing beyond or arising out of
the expiration or earlier termination of this Agreement, including without
limitation the indemnification requirement contained in this Agreement. Whenever
the consent of a party is sought or required hereunder, such consent will not be
unreasonably withheld. If any pan of this Agreement is for any reason declared
invalid, unenforceable or impaired in any way the validity of the remaining
paragraphs will not be affected thereby, and such remaining portions will remain
in full force and effect as if this Agreement had been executed with such
invalid opinion eliminated. It is hereby declared the intention of the parties
that they would have executed the remaining portion of this Agreement without
including therein any such portions which might be declared invalid.
(b) If either party initiates any legal proceeding which
involves issues arising out of this Agreement, the prevailing party in such
action will be paid its reasonable attorneys' fees and costs by the other party.
The parties agree that the law of the state where the Business is located will
apply to the construction and enforcement of this Agreement and govern all
questions which arise with reference hereto.
(c) The headings inserted in this Agreement are for
reference purposes only and will not affect the construction of this Agreement
or limit the generality of any of its provisions. This Agreement and the
documents referred to herein constitute the entire agreement between the parties
and supersede and cancel any and all prior and contemporaneous agreements,
understandings, representations, inducements and statements, oral or written, of
the parties in connection with the subject matter hereof. Except as expressly
authorized herein, no amendment or modification of this Agreement will be
binding unless executed in writing by both parties. A facsimile of a signed copy
of this Agreement will be accepted as if it were a signed original.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day
and year first above written.
"Member Broker"
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Name of Company
By: _____________________________ By __________________________________
By ______________________________
RED CARPET REAL ESTATE SERVICE
"Red Carpet"
By: _________________________________
Authorized Officer
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This contract is not valid until signed by an Officer
of Red Carpet Real Estate Service
GUARANTY
Each undersigned Guarantor, jointly and severally, covenants, promises to
pay or cause to be paid all monies which become payable by Member licensee under
this Agreement Each Guarantor adopts each and every covenant to be preformed
by Member License and agrees with Licensor and Red Carpet Real Estate Service
to perform and observe all such covenants. Licensor entering into this
Agreement with Licensee constitutes consideration for this Guaranty. The
receipt an sufficiency of this consideration is acknowledged by the signature of
each Guarantor.
- ------------------------------------ ------------------------------------
Name (Typed or Printed) Name (Typed or Printed)
WITNESS:
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Signature Signature
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