Included a copy of the proposed agreement sent me, with identifying data removed. I am X and the Owner who is my friend is Y. My main concern is no compete I an a partner in marketing company, and while I do not have anything competing with current services of Y company, I could wind up selling marketing or consulting to some of this clientelle. I have put "service" in the agreement below wherein owner had put his more explicit service. I do not like phraseology "could" in " i. X will never offer service on ..., marketing, or related topics to colleges which could compete with existing Y programs outside of this agreement whether active or not". The agreement below is for info as you wish, but you do not need to read the whole thing if you do not want to. I I am not sure if quoted line above could prevent me forever from selling to the colleges, and I might want to. I have no intention of selling a take-off of his product, but wonder how if clause above is legally I do sell a marketing product and he considers it is competitive if and after we ever have a falling out? I trust the arbitration/mediation group named. Am I locked in to never competing by his standard?
Joint Venture Agreement
for Revenue Sharing & Commissions
This agreement between X (me) and Y( current owner/friend) shall be bound according to these terms;
1) Revenue sharing on sales generated by X or his team.
a. Commission of 30% of all revenues from the closed sales of our service
i. Must be sold for a minimum $2,500 for commission eligibility, any discounts must be approved by Y
and the commission amounts agreed upon in writing
ii. Minimum pricing of service:
1. Commission of 50% on all revenue above $2,500 for service
c. Future commissions on yet-unreleased products and services shall be determined at the time of their release and
added as an addendum to this agreement, but shall not drop below 25%.
i. X is not obligated to sell any future products or services that Y releases
2) Ownership rights
a. Y shall maintain all ownership rights to it’s respective intellectual property
i. All intellectual property developed by Y is solely owned by Y and has been licensed to
Y LLC on an unlimited basis for an annual fee of $25,000. This is paid at the LLC
a. Y may sell any product or service outside of it’s agreement herein, with the exception of service
without permission from X or compensation
to X, so long as this agreement is in full-effect.
b. X shall be the sole performance-based sales team (call center) for Y so long as the minimum average monthly
sales targets are met and maintained per below
4) Minimum Performance
a. X shall lose it’s exclusive right to represent Y for outside sales performed by independent contractors
commission basis (by non-Y employees) if X and his team are unable to generate $300,000 in revenue in the
first 9 months, or if average monthly revenues fall to $20k for any three month period after the 9th month.
a. X and Y promise to not compete with one another directly throughout the term of this agreement or for a
period of 6 months after the termination of this agreement.
i. X will never offer service on admissions, marketing, or related topics to collleges which
could compete with existing Y programs outside of this agreement whether active or not
ii. Y will not develop it’s own outside commission-based sales call center outside of this arrangement
iii.Y shall be allowed to hire salespeople internally in the United States
if they are fully
employees, but may not hire independent contractors for sales while this agreement is in
effect. Independent contracted sales people fall under the X management and commission structure.
6) Option to purchase
a. X shall be allowed to purchase a 33% ownership interest
in Y LLC from Y for $100.00 (one
hundred dollars) provided that DH;
i. Generates an average minimum sales volume of
1. $40,000 per month for any 3-month period in the first 12 months
2. $50,000 per month for any 3-month period in the next 12 months
3. $60,000 per month for any 3-month period in the following 12 months
ii. Folds all call center costs, revenues, and profits into Y Lat the time of the acquisition of ownership
1. Upon the merger of the call center and Y, a new operating agreement for the company shall
be written which will lay out the roles and responsibilities of X and Y with respect to
such a combination of forces. SE will remain as CEO with full executive authority in any such
negotiated operating agreement.
a. In the event this joint venture is not mutually advantageous, either party may cancel it with 60 days with written
notice to the other party and copy sent to named arbitration committee which we both trust.
a. Any and all disputes or problems shall be performed by binding mediation through the named arbitration committee