MASTER NETWORK MARKETING AGREEMENT
This MASTER NETWORK MARKETING AGREEMENT (the "Agreement")
is made and entered into effective the 1st day of March,
2002, by and between TELEWRX, INC., a Florida corporation
("Telewrx") on behalf of itself, its subsidiaries, affiliates
and predecessors (collectively, the "Telewrx Group"), and
T-WRX MARKETING SERVICES, LLC, a Utah limited liability
company ("T-Wrx Marketing") on behalf of itself, its members,
subsidiaries, affiliates and predecessors (collectively, the
"T-Wrx Marketing Group"). T-WRX MARKETING is a wholly owned
subsidiary of 21st Century Marketing, a Nevada limited
liability company.
BACKGROUND
Upon execution of this Agreement the T-Wrx Marketing
Group will become the founding distributor of the multi-level
marketing network (the "MLM Network") established for purposes
of marketing and distributing internet, advertising, marketing
and other communications products and services (the "Telewrx
Products and Services") that the Telewrx Group has obtained
the right to distribute on behalf of Telewrx and other members
of the Telewrx Group. In becoming the founding distributor
T-Wrx Marketing intends, in cooperation with the Telewrx
Group, to develop for the approval of Telewrx (and for use in
the MLM Network) a standard form of Independent Representative
Agreement (the "IR Agreement"), which IR Agreement shall
include the Compensation Plan (as further described herein)
and the Policies and Procedures (as further described herein)
to be adopted by Telewrx for purposes of establishing a
contractual relationship with those persons who join the MLM
Network. Because of the status of the T-Wrx Marketing Group
as the founding distributor there are certain provisions that
are not a part of the Compensation Plan and the Policies and
Procedures that are applicable to the T-Wrx Marketing Group.
The purpose of this Agreement is to set forth such additional
provisions and to establish the agreed upon relationships
between the Telewrx Group on the one hand, and the T-Wrx
Marketing Group as the founding distributor of the MLM Network
on the other hand.
AGREEMENT
Section 1. Nature of Founder Status; MLM Network as
Sole Marketing Agent for the Telewrx Group.
1.1 IN GENERAL. Subject to the provisions of this
Agreement, T-Wrx Marketing shall be the senior and founding
distributor of the Telewrx Group for all sales of Telewrx
Products and Services through the MLM Network in the manner
provided herein. All persons and entities selling Telewrx
Products and Services through the MLM Network shall be part of
the "downline" of T-Wrx Marketing, except for the Designated
Representative (as same is described in Section 3.2) and which
Designated Representative may be "upline" to T-Wrx Marketing.
1.2 START-UP AND OTHER EXPENSES. The T-Wrx
Marketing Group shall be responsible for all expenses incurred
by it in the development, maintenance and management of the
T-Wrx Marketing "downline." However, neither T-Wrx Marketing
nor any other member of the T-Wrx Marketing Group, shall be
responsible for the expenses incurred by Telewrx or any other
member of the Telewrx Group in hosting distributor meetings
(including, without limitation, any annual, semi-annual
independent representative meeting or conference), providing
Telewrx produced sales materials, providing sales incentives
sponsored or provided by the Telewrx Group, administering the
MLM plan and providing the products and services of the
Telewrx Group that are considered the expenses of a sponsor,
such as Telewrx and the Telewrx Group, in a multi-level
marketing system.
1.3 ADVISORY BOARD. For so long as this Agreement
is in effect, there shall be appointed from among independent
representatives participating in the MLM Network an Advisory
Board to Telewrx (having such name as Telewrx and T-Wrx
Marketing shall mutually agree) to advise and consult with the
Telewrx Group on any issue or item relating to the MLM Network
and/or the sale of Telewrx Products and Services. So long as
T-Wrx Marketing is an independent representative in good
standing of the Telewrx Group, the number of members of the
Advisory Board, and the persons appointed to the Advisory
Board, shall be mutually agreed to by the Telewrx Group and
T-Wrx Marketing. Among other things, the Advisory Board
shall act as a liaison between the Telewrx Group and the
independent representatives and shall meet at such time or
times as T-Wrx Marketing and the Telewrx Group shall determine
for the purpose of setting independent representative policies
and procedures with the Telewrx Group. The Advisory Board
shall be maintained for the purpose of developing and
recommending future Telewrx Group policy and procedures with
respect to the MLM Network. The Telewrx Group shall consider
in good faith, and implement as it deems appropriate, Advisory
Board recommendations.
1.4 OTHER MULTI-LEVEL MARKETING ACTIVITIES. T-Wrx
Marketing, its members, employees, consultants and affiliates,
shall have the right to participate in multi-level marketing
activities other than the MLM Network; provided, however, that
T-Wrx Marketing shall devote such amount of time as may be
necessary to manage and administer to the MLM Network.
SECTION 2. MLM NETWORK EXCLUSIVE VEHICLE FOR TELEWRX
SALES. As a specific inducement to T-Wrx Marketing to bring
its multi-level marketing group and capabilities to the
Telewrx Group and to enter into this Agreement, and except as
specifically otherwise provided in this Section 2 below, the
Telewrx Group agrees that all sales of Telewrx Products and
Services however and whenever made shall be made solely and
exclusively through the MLM Network. Notwithstanding the
provisions of this Section 2 above, the Telewrx Group shall
have the right under the following circumstances to market and
sell Telewrx Products and Services other than through the MLM
Network: The Telewrx Group shall have the right to market,
sell, lease or otherwise dispose of or make available outside
the MLM Network, any fiber optic cable or other long distance
capacity (collectively, the "Exempt Telewrx Products and
Services") that the Telewrx Group may own, lease or otherwise
have the right to use so long as such marketing and sale of
the Exempt Telewrx Products and Services do not involve the
sale of the Telewrx Products and Services that the MLM Network
is marketing and selling on behalf of the Telewrx Group.
SECTION 3. COMPENSATION PLAN; GRANDFATHERING; "BREAKAGE;"
ETC.
3.1 COMMISSIONS, ETC; ADJUSTMENTS TO COMMISSION RATES
IN GENERAL. The parties agree to negotiate in good faith and
complete as promptly as possible the Compensation Plan setting
forth the commissions that shall be paid to independent
representatives, along with the Policies and Procedures that
are to govern the relationships of the independent
representatives to the Telewrx Group. The Compensation Plan
shall include such provisions, as may be mutually agreed upon
by the parties, relating to limitations and restrictions on
the percentage of gross revenue that may subject to applicable
commissions under the Compensation Plan (the "Compensation
Percentage Limit"). In connection with determining the
Compensation Percentage Limit the parties agree to recognize
that the aggregate commissions to be paid to the MLM Network
under the Compensation Plan must permit the Telewrx Group with
the opportunity to earn the amount of income and other returns
as provided as a part of its business plan. The parties
further agree and acknowledge that any amounts payable as
compensation under the Compensation Plan, including amounts
due by reason of the "grandfathering" provided for in Section
3.2 below, shall not in the aggregate exceed the agreed
Compensation Percentage Limit. The Compensation Percentage
Limit shall, from time to time and as mutually agreed by the
parties, be adjusted as may be necessary or desirable to
achieve an equitable equilibrium between the Telewrx Group
reaching appropriate earnings and the independent
representatives comprising the MLM Network being reasonably
compensated in accordance with the network marketing industry
standards with respect to the services that the independent
representatives are providing the Telewrx Group.
3.2 GRANDFATHERED STATUS. T-Wrx Marketing, along
with one other person or entity (the "Designated
Representative") to be designated in writing by T-Wrx
Marketing to Telewrx, shall be "grandfathered," as such term
is commonly understood in the network marketing industry, into
the MLM Network . As such, T-Wrx Marketing and the
Designated Representative shall be excluded and otherwise
exempt from the necessity of obtaining volume, as well as, any
depth, width or breadth requirements imposed upon other
independent representatives in order to maintain its position,
in the case of T-Wrx Marketing, as the founding distributor of
the MLM Network of the Telewrx Group) and in the case of the
Designated Representative, as a distributor. So long as this
Agreement exists, T-Wrx Marketing and the Designated
Representative shall retain their respective status and all
rights to receive compensation under the Compensation Plan
regardless of the performance of T-Wrx Marketing, any member
of the T-Wrx Marketing Group and/or the Designated
Representative in connection with the purchase of Telewrx
Products and Services and regardless of the status or activity
of the "downline" distributors of T-Wrx Marketing and the
Designated Representative. Such "grandfathering" shall
include the elimination of any restriction or limitation on
the depth of the downline with respect to which T-Wrx
Marketing is entitled to participate, except to the extent of
the of the agreed upon restrictions and limitations as to the
amount of overall revenue that is to be devoted to the payment
of commissions under the Compensation Plan.
3.3 BREAKAGE. In the ordinary course of paying
commissions in accordance with the Compensation Plan, not all
commissions generated will have a corresponding eligible
independent representative who will be entitled to receive
payment of such Commissions, thus resulting in amounts that
for all purposes of this Agreement shall be termed "Breakage."
To the extent amounts representing Breakage exist, the
Telewrx Group agrees that 60% of such amounts comprising
Breakage shall be retained by the Telewrx Group and 40% of
such amounts comprising Breakage shall be paid to T-Wrx
Marketing. The amounts of Breakage received by T-Wrx
Marketing may be retained or otherwise used by T-Wrx
Marketing at its discretion to make payments or distributions
to other independent representatives in the downline. It is
the expressed intent of the parties that T-Wrx Marketing shall
have the flexibility and discretion to apply the amounts of
Breakage that it receives in a manner that it deems
appropriate in any given set of circumstances, including
retaining any such Breakage Amounts for its own account.
T-Wrx Marketing further acknowledges and agrees that the
Breakage, regardless of how allocated hereunder, is
compensation which, when added to other compensation paid or
payable to independent representatives who are part of the MLM
Network, shall not exceed the Compensation Percentage Limit.
3.4 AMENDMENTS TO COMPENSATION PLAN AND POLICIES AND
PROCEDURES. If either the Telewrx Group or T-Wrx Marketing
believes that a change in the IR Agreement, the Compensation
Plan and/or the Policies and Procedures should be implemented,
the parties shall negotiate in good faith and shall arrive at
a mutual agreement that reasonably balances the needs and
interests of Telewrx with the needs and interests generally of
the independent representatives that are selling Telewrx
Products and Services. The provisions of this Section 3.4
shall, without limitation, also apply to adjustments with
respect to the Compensation Percentage Limit.
3.5 INFORMATION SHARING. The Telewrx Group shall
provide to T-Wrx Marketing on a quarterly or monthly basis, as
T-Wrx Marketing may request, all information relating to the
Telewrx Group sales and the activities of the independent
representatives in the MLM Network used by the Telewrx Group
to calculate commission income due to the independent
representatives including, but not limited to, commission
income payable to T-Wrx Marketing and the Designated
Representative.
SECTION 4. COMPLIANCE ISSUES.
4.1 IN GENERAL. The Telewrx Group shall make
available to the T-Wrx Marketing Group, at the expense of the
Telewrx Group, the necessary resources to insure that the MLM
Network is established, maintained and operated in material
compliance with all applicable laws and regulations including,
but not limited to, rules and regulations promulgated by the
Federal Trade Commission, the Federal Communications
Commission, any state Attorney General's office and any state
Consumer Protection Division or like agency. Such resources
shall include, but are not necessarily limited to, engaging
legal counsel and independent consultants for review,
consultation and drafting with respect to the procedures
relating, and the documents to be used in establishing the
desired legal relationships for, the MLM Network.
4.2 COSTS OF LEGAL ACTION; INDEMNITY. In the event of
any legal action involving the T-Wrx Marketing Group with
respect to activities in connection with the MLM Network, the
Telewrx Group shall bear the cost of any defense, provided
that such legal action is not a result any act or omission on
the part of T-Wrx Marketing Group which either (a) constitutes
an illegal act, except if such illegal act is based upon the
method of business transacted by the Telewrx Group pursuant to
the IR Agreement and the published Policies and Procedures, or
(b) constitutes gross negligence, malfeasance or the material
breach the T-Wrx Marketing Group, its employees or members of
the IR Agreement or published Policies and Procedures. The
Telewrx Group shall indemnify and hold the T-Wrx Marketing
Group harmless against any claims or judgments arising in
connection with activities of the MLM Network so long as such
claims or judgments are not a result any act or omission on
the part of T-Wrx Marketing Group which either (a) constitutes
an illegal act, except if such illegal act is based upon the
method of business transacted by the Telewrx Group pursuant to
the IR Agreement and the published Policies and Procedures, or
(b) constitutes gross negligence, malfeasance or the material
breach the T-Wrx Marketing Group, its employees or members of
the IR Agreement or published Policies and Procedures. T-Wrx
Marketing Group shall indemnify and hold the Telewrx Group
harmless against any claims or judgments arising in connection
with activities of the MLM Network in the event that such
claims or judgments are a result any act or omission on the
part of T-Wrx Marketing Group which either (a) constitutes an
illegal act, except if such illegal act is based upon the
method of business transacted by the Telewrx Group pursuant to
the IR Agreement and the published Policies and Procedures, or
(b) constitutes gross negligence, malfeasance or the material
breach the T-Wrx Marketing Group, its employees or members of
the IR Agreement or published Policies and Procedures. The
obligations upon the parties under this Section 4.2 shall be
conditioned upon (i) timely notification from the T-Wrx
Marketing Group or Telwrx, as the case may be, to T-Wrx or
Telewrx, as the case may be of any such legal action or claim,
and (ii) reasonable cooperation by the parties in defending or
settling on such action or claim.
SECTION 5. ASSIGNMENT.
5.1 ASSIGNMENT WITH NO REQUIRED CONSENT. Each of
T-Wrx Marketing and Telewrx shall be permitted, without
consent to assign all or any rights and obligations under this
Agreement to an Affiliate (as defined in Section 5.3 below).
5.2 ASSIGNMENT WITH CONSENT. Each of T-Wrx
Marketing and Telewrx shall be permitted to assign its rights
and obligations under this Agreement to any third party with
the prior written consent, which consent shall not be
unreasonably withheld, of the non-assigning party first
obtained. Except as provided in Section 5.1 above and this
Section 5.2, neither T-Wrx Marketing nor Telewrx shall assign,
transfer or otherwise dispose of this Agreement or any rights
or obligations arising by reason of this Agreement.
5.3 DEFINITION OF AFFILIATE. An "Affiliate" of
T-Wrx Marketing or Telewrx, as the case may be, is defined as
any individual or entity that directly or indirectly through
one or more intermediaries, controls, or is controlled by or
is under common control with T-Wrx Marketing or Telewrx, as
the case may be.
SECTION 6. CERTAIN PAYMENTS AND EQUITY RIGHTS.
6.1 CASH COMPENSATION. In consideration of the
benefit of the intangible asset (the "MLM Intangible") being
provided by T-Wrx Marketing to Telewrx in the form of a group
of independent representatives who are to be the initial part
of the MLM Network, the Telewrx Group shall pay certain cash
compensation (the "Cash Compensation") to T-Wrx Marketing in
the amount of Three Hundred Fifty Thousand Dollar ($350,000).
Within __________ (____) days after execution of this
Agreement by the parties hereto, Telewrx shall, by wire
transfer of immediately available funds pursuant to the
instructions provided in Exhibit 6.1, pay a portion of the
Cash Compensation in the amount of One Hundred Fifty Thousand
Dollars ($150,000) to T-Wrx Marketing. On April 1, 2002, the
remainder of the Cash Compensation in the amount of Two
Hundred Thousand Dollars ($200,000) shall be, likewise, wire
transferred, unless alternative instructions are provided by
T-Wrx Marketing to Telewrx.
6.2 EQUITY COMPENSATION. Telewrx has heretofore
issued to T-Wrx Marketing or its designated Affiliate
1,000,000 shares (the "T-Wrx Founders Shares") of the $.0001
par value common stock (the "Common Stock") of Telewrx.
SECTION 6.3 SHAREHOLDER AGREEMENT. Telewrx and
T-wrx Marketing hereby confirm that the T-wrx Founders Shares
are subject to certain rights and obligations under a certain
Shareholder Agreement executed by certain shareholders of
Telewrx that own and control a majority of the outstanding
Common Stock.
SECTION 7. MISCELLANEOUS.
7.1. CERTAIN EXPENSES. Each party shall bear its
or his own legal and related expenses of negotiating,
preparing, executing and delivering this Agreement.
7.2 CONFLICTS. If there is any conflict between
the provisions of this Agreement and/or the provisions of the
IR Agreement (including any Policies and Procedures,
Compensation Plan or other items promulgated by Telewrx as
part of the relationship between any IR, as defined in the IR
Agreement, and Telewrx), the provisions of this Agreement
shall control.
7.3 APPLICABLE LAW AND JURISDICTION. This
Agreement shall be interpreted under the laws of the State of
Florida. Any litigation resulting from this Agreement, or the
relationships contemplated thereby, shall be brought in Palm
Beach County, Florida (or in a federal District Court having
jurisdiction in Palm Beach County, Florida). The Telewrx
Group and the T-Wrx Marketing Group hereby submit to the
jurisdiction and venue of any local state or federal court
located within or having jurisdiction in Palm Beach County,
Florida, for resolution of any and all claims, causes of
action or disputes arising out of, related to or concerning
this Agreement and agree that service by registered mail to
the address set forth in this Agreement shall constitute
sufficient service of process for any such action. The
Telewrx Group and the T-Wrx Marketing Group further agree that
any claims, causes of action or disputes arising out of,
relating to or concerning this Agreement shall only have
jurisdiction and venue in the local, state or federal courts
of the State of Florida.
7.4 NOTICES. All notices required or permitted under
this Agreement shall be given by registered or certified mail,
postage prepaid, by Federal Express or other express mail
service, by facsimile, or by hand delivery, directed as follows:
If intended for the Telewrx Group to:
Telewrx, Inc.
17252 Balboa Point Way
Boca Raton, Florida 33487
Attention: Michael P. Brown;
with a copy to:
Edward H. Gilbert, P.A
5100 Town Center Circle, Suite 430
Boca Raton, Florida 33486
Attention: Edward H. Gilbert
If intended for T-Wrx Marketing Group:
T-Wrx Marketing, LLC
10454 Edinburgh Drive
Highland, Utah 84003
Attention: David Farmer;
with a copy to:
Fabian & Clendenin
215 South State Street, 12th Floor
Salt Lake City, Utah 84111
Attention: David J. Lyon
Any notice delivered by mail or express service in accordance
with this paragraph shall be deemed to have been duly given
three calendar days after the same is deposited in any post
office or postal box regularly maintained by the United
States. Any notice that is hand delivered or sent by express
mail or facsimile shall be effective upon receipt by the party
to whom it is addressed. Either party, by notice given as
above, may change the address to which future notices should
be sent.
7.5 SUCCESSORS AND ASSIGNS. This Agreement shall be
binding upon and shall inure to the benefit of the parties
hereto and each party's respective heirs, executors, personal
representatives, successors and permitted assigns.
7.6 ENTIRE AGREEMENT. This Agreement, together with the
exhibits attached hereto, constitutes the entire agreement
between the parties and may not be modified in any manner
except by an instrument in writing signed by both parties.
7.7 HEADINGS. This section and subsection headings
contained in this Agreement are inserted only for convenient
reference and do not define, limit or proscribe the scope of
this Agreement or any exhibit attached hereto.
7.8 COUNTERPARTS. This Agreement may be executed in any
number of counterparts that together shall constitute one and
the same instrument.
7.9 UNENFORCEABLE PROVISIONS. If any provision of this
Agreement, or the application thereof to any person or
situation shall be held invalid or unenforceable, the
remainder of this Agreement, and the application of such
provision to persons or situations other than those to which
it shall have been held invalid or unenforceable, shall
continue to be valid and enforceable to the fullest extent
permitted by law; provided, that the elimination of such
provision shall not have a materially adverse effect on the
rights, benefits, or obligations of the affected party or
parties.
7.10 WAIVERS. No waiver by either party of any provision
hereof shall be effective unless in writing or shall be deemed
to be a waiver of any other provision hereof or of any
subsequent breach by either party of the same or any other
provision.
7.11 ATTORNEYS' FEES AND COSTS. In the event of
litigation between any of the parties arising out of the
enforcement of or a default under this Agreement, the
prevailing party shall be entitled to judgment for court costs
and reasonable attorneys' fees in an amount to be determined
by the court.
7.12 ANNOUNCEMENTS. The parties shall consult with each
other with regard to all press releases and other announcement
regarding this Agreement and the transactions contemplated
hereby issued upon or prior to the execution of this
Agreement; and, except as may be required by applicable laws
or to obtain required consents, neither the Telewrx Group nor
the T-Wrx Marketing Group shall issue any such press releases,
announcements, or other publicity without the prior consent of
the other party.
7.13 FACSIMILE SIGNATURES. Any signature by facsimile
transmission shall be effective to bind the party so executing
this Agreement.
[THIS SPACE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the parties have executed and entered
into this Agreement as of the date first above written.
T-Wrx Marketing Services, LLC
By: /s/ David J. Lyon
David J. Lyon, Authorized Officer
Telwrx, Inc.
By: /s/ Michael P.Brown
Michael P. Brown, President