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The issue is that you have two statements here that don't actually contradict each other, though they appear to.
1. You can't compete directly against your current "employer" under the agreement (I know this is an independent contract).
2. You are allowed to enter into other agreements of clients with other companies.
In this situation, those two conflict, but that doesn't mean that the contract is not properly written. You have to abide by para. 1 to be able to do para 2. You can work for this other company, but not for clients that also work with your current company.
So, if CTI has a client that you can work for that is not also a client of masterword, you would clearly be within the provisions of this contract to work for them. The issue here is that you are directly competing against masterword in this case, by working for a client that they work with but through a different company.
Having you sign a non-compete of this nature is not treating you as an employee. It does maintain the proper separation for it to be an IC agreement. I'm sorry, I wish I could tell you differently here, but masterword's attorney appears to be correct based on the facts you've given here.
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