AREA REPRESENTATIVE AGREEMENT

 

                                                                    EXHIBIT 10.3

                                  REZcity.com

                                  REZcity Plus

                   A Division of Rezconnect Technologies, Inc.

 

 

 

                          AREA REPRESENTATIVE AGREEMENT

 

 

                       EXHIBIT C TO THE OFFERING CIRCULAR

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

                     THIS CONTRACT IS SUBJECT TO ARBITRATION

                     ---------------------------------------

 

 

 

 

<PAGE>

 

 

 

                                TABLE OF CONTENTS

 

 

I.     GRANT...................................................................2

 

 

II.    DEVELOPMENT TERRITORY...................................................2

 

 

III.   DEVELOPMENT FEE AND SCHEDULE............................................3

 

 

IV.    TERM....................................................................5

 

 

V.     PAYMENTS TO AREA REPRESENTATIVE.........................................6

 

 

VI.    TRAINING AND OPERATING ASSISTANCE.......................................8

 

 

VII.   AREA REPRESENTATIVE'S OBLIGATIONS.......................................9

 

 

VIII.  USE OF SYSTEM AND MARKS................................................12

 

 

IX.    RELATIONSHIP OF THE PARTIES............................................13

 

 

X.     INSURANCE..............................................................14

 

 

XI.    TRANSFERABILITY OF INTEREST............................................16

 

 

XII.   RESTRICTIONS CONCERNING COMPETITIVE BUSINESSES.........................18

 

 

XIII.  DEFAULT AND TERMINATION................................................19

 

 

XIV.   RIGHTS AND OBLIGATIONS OF THE PARTIES UPON EXPIRATION OR TERMINATION...21

 

 

XV.    FRANCHISOR'S REMEDIES UPON TERMINATION OR EXPIRATION...................22

 

 

XVI.   NOTICES................................................................22

 

 

XVII.  ENTIRE AGREEMENT.......................................................23

 

 

XVIII. APPLICABLE LAW.........................................................23

 

 

XIX.   SETTLEMENT OF DISPUTES.................................................24

 

 

XX.    COST OF ENFORCEMENT OR DEFENSE.........................................25

 

 

XXI.   SEVERABILITY AND CONSTRUCTION..........................................25

 

 

XXII.  DEFINITIONS............................................................26

 

 

XXIII. CAVEAT.................................................................26

 

 

XXIV.  ACKNOWLEDGMENTS........................................................26

 

 

 

EXHIBITS

--------

 

A. MAP OF DEVELOPMENT TERRITORY

B. GUARANTY AND ASSUMPTION OF OBLIGATIONS

 

 

 

 

<PAGE>

 

 

28

                                   RezCity.com

                                  REZcity Plus

                   A Division of RezConnect Technologies, Inc.

                          AREA REPRESENTATIVE AGREEMENT

 

         This Area Representative  Agreement (this  "Agreement"), made this ____

day of  ___________,  20___ by and  dbetween  RezConnect  Technologies,  Inc., a

company  operating  under  the laws of the  State of New York,  and  having  its

principal place of business at 560 Sylvan Avenue,  Englewood Cliffs,  New Jersey

07632   (hereinafter   referred  to  as  "RezCity.com"  or  "Franchisor"),   and

______________________, an individual/partnership/corporation/limited  liability

company  established in the State of  ____________,  whose principal  address is

__________________________________________________  (hereinafter  referred to as

"Area Representative").

 

                              W I T N E S S E T H:

 

         WHEREAS,  Franchisor has developed a system  ("System"),  identified by

the Mark "RezCity.com" relating to the establishment,  development and operation

of a business specializing in the sale of Internet based marketing tools such as

banner  advertisements  on the home page and calendar  pages of the  REZcity.com

website,  content licensing,  creating websites with unlimited pages featuring a

shopping cart order system and other forms of Internet Advertising.  In addition

to the services  described,  the  franchisee  can elect to operate a consignment

business  online and  provide and auction  model  through the eBAY  Marketplace.

(Herein  referred to as "REZcity Plus  Franchise") We also provide tolls such as

real-time    reservations,    confirmations    and    appointment    scheduling,

business-to-consumer negotiating of retail products and services. Other services

include search engine submission and domain name site registration. All of these

services are designed to be sold to small to medium sized businesses,  community

organizations  and  not-for-profit  organizations.  Our travel services  feature

online 24/7  reservations/bookings for Airlines,  Hotels, Cars, Limos, Tours and

Cruise products with over 55 book able engines; and

 

         WHEREAS,  the  distinguishing  characteristics  of the System  include,

without limitation,  the RezCity.com home page located at http://www.rezcity.com

featuring  "city  guides"  for over fifty  three  thousand  (53,000)  cities and

communities;  the  proprietary  Internet  marketing  package which  includes the

Services, the RezCity.com Confidential Operations Manual ("Manual"); methods for

recruiting,  hiring and training  employees;  inventory,  cost controls,  record

keeping,  all of  which  may be  changed,  improved  and  further  developed  by

Franchisor from time to time; and

 

         WHEREAS,  Franchisor  is the owner of the  right,  title and  interest,

together  with  all the  goodwill  connected  thereto,  in and to the  trademark

"RezCity.com" and "RezConnect.com"  and other trademarks,  domain names, service

marks and trade  dress,  associated  logos,  commercial  symbols,  trade  names,

trademarks,  service  marks  and  trade  dress  as are  now,  or in the  future,

designated as an integral part of the System (the "Mark[s]"); and

 

         WHEREAS,  Franchisor is willing to grant Area  Representative the right

to serve as a special agent enabling Area  Representative  to locate and recruit

potential franchisees known as "Individual Franchisees" as well as "REZcity Plus

Franchisees"  and to provide  support  services to  Individual  Franchisees  and

REZcity  Plus  Franchises  within  the  geographical  area  under  the terms and

conditions contained in this Agreement; and

 

         WHEREAS,  Area  Representative  desires  to act as a special  agent for

Franchisor  within the geographical  area enabling Area  Representative to offer

franchises for, and to develop,  support,  and provide  services to,  Individual

 

 

<PAGE>

 

Franchises and REZcity Plus Franchises  within the geographical  under the terms

and conditions contained in this Agreement; and

 

         WHEREAS,   Area   Representative   understands  and   acknowledges  the

importance of Franchisor's high and uniform standards of quality, operations and

service  and the  necessity  of  operating  the  Franchised  Business  in strict

conformity with Franchisor's standards and specifications; and

 

         WHEREAS,  Franchisor  is the licensee of certain  proprietary  software

from  411web.com,  Inc.,  with the  right to  sub-license  the  software  to its

franchisees; and

 

         WHEREAS,   Franchisor  expressly  disclaims  the  making  of  and  Area

Representative  acknowledges  that it has  not  received  nor  relied  upon  any

warranty  or  guarantee,  express or  implied,  as to the  revenues,  profits or

success  of  the  business   venture   contemplated  by  this  Agreement.   Area

Representative  acknowledges  that it has read this  Agreement and  Franchisor's

Uniform  Franchise  Offering  Circular  and  that  it  has no  knowledge  of any

representation by Franchisor or its officers, directors, shareholders, employees

or agents  that are  contrary to the  statements  made in  Franchisor's  Uniform

Franchise Offering Circular or to the terms hereof.

 

         NOW,  THEREFORE,  the parties, in consideration of the undertakings and

commitments of each party to the other set forth in this Agreement, hereby agree

as follows:

 

I.             GRANT

               -----

 

         A     Franchisor  hereby grants to Area  Representative,  subject to

the terms and conditions  hereof, a license to offer,  negotiate,  establish and

develop RezCity.com Individual Franchises and REZcity Plus Franchises within the

territory hereinafter  described.  The Area Representative shall recruit persons

and entities to act as  franchisees  within the  Development  Territory and will

perform  initial  training and  supervise  the  development  and  operations  of

Individual  Franchises  and  REZcity  Plus  Franchises  within  the  Development

Territory in compliance with the terms and conditions of this Agreement.

 

         B     In  consideration  of the  payments  received  and the  mutual

covenants  contained  in  this  Agreement,  Franchisor  hereby  grants  to  Area

Representative,  and Area  Representative  hereby  accepts,  a  license  for the

Development  Territory hereinafter  described.  Franchisor hereby grants to Area

Representative,  and Area Representative  hereby accepts the right,  license and

privilege of using "RezCity.com," "REZconnect.com," "HaggleWithUs.com" and other

Marks of  Franchisor  solely  and only upon and in  connection  with  activities

authorized under this Agreement,  including the right to sublicense the Marks to

Individual Franchisees in the Development Territory hereinafter described.  Area

Representative  agrees not to make or authorize any use, direct or indirect,  of

the  Marks for any  other  purpose  or in any  other  way.  Area  Representative

acknowledges  that  Franchisor may grant other licenses for the use of the Marks

or utilize the Marks in any manner whatsoever  subject to the provisions of this

Agreement.

 

II.            DEVELOPMENT TERRITORY

               ---------------------

 

         The Development Territory of the Area Representative  Franchise granted

shall be as described on Exhibit A (hereinafter  the  "Development  Territory").

During this Agreement  term,  Franchisor will not establish or license any other

area  representatives  to act as a special  agent to  provide  sales or  support

services to franchisees  within the Development  Territory;  provided,  however,

that Franchisor shall retain the right:

 

                                       2

<PAGE>

 

         A     to   establish   Individual   Franchises   and  REZcity   Plus

Franchises,  at any location inside and outside of the Development Territory, as

Franchisor, in its sole discretion,  deems appropriate;  provided, however, that

Franchisor  shall not  establish  nor grant  territorial  rights to any business

providing Internet advertising  services,  online auction services and any other

services which may conflict with any territorial  rights  previously  granted by

its Area Representative to Individual Franchisees;

 

         B     to  establish additional area  representatives  outside of the

Development Territory as Franchisor deems appropriate in its sole discretion;

 

         C     to   specifically   approve  the  grant  of  any   RezCity.com

Individual Franchises or REZcity Plus Franchises.  Such approval shall be within

the sole discretion of Franchisor;

 

         D     to establish or license additional area representatives within

the  Development  Territory  if Area  Representative  fails to  comply  with the

Development Schedule contained in Paragraph IV. of this Agreement; and

 

         E     to   contract  with  sales   organizations  and  other  "Sales

Consultant(s)"  to allow the Sales  Consultants and its sales force to engage in

the sale of Internet advertising including the Services; provided, however, that

Sales Consultants shall not be licensed to utilize the RezCity.com  trademark as

its  principal  trade name under  which it  operates,  but may be  permitted  to

identify itself as a "RezCity.com  Authorized  Dealer" provided further that the

Area  Representative  shall receive a commission based upon the sale of Services

by  each  Sales  Consultant  occurring  in  Area  Representative's   Development

Territory in accordance with Section V.

 

III.           DEVELOPMENT FEE AND SCHEDULE

               ----------------------------

 

         A........As   consideration  for  the  license  granted  herein,   Area

Representative shall pay to Franchisor,  upon execution of this Agreement, a fee

of  _____________________________  DOLLARS ($_________) ("Development Fee"). The

Development Fee is fully earned and nonrefundable for the granting of the rights

as Area Representative for the Development Territory.

 

         At  Franchisor's  option,  the initial fees for an Area  Representative

Franchise  shall  be 10%  of  the  sum of  the  Franchise  Fees  for  Individual

Franchises  that  the  Area  Representative  has  available  in the  Development

Schedule in this Agreement.  Franchisor anticipates that the Development Fee for

an Area  Representative  will range from  $30,000 to $500,000.  Franchisor  will

permit Area  Represenstative  to pay 50% of the gross  revenues  earned from its

territory whether from franchise sales or product or service commissions that it

receives.  If at the end of three (3) years  there  remains a balance due on the

Sales Agreement,  Area  Representative  has the right to pay the balance in full

and retain the remaining  territory or return the unsold territory to Franchisor

without further obligation.

 

In order to calculate the Area  Representative Fee, multiply the number of towns

or cities within the designated geographic area by the minimum initial franchise

fee of $1,500 and then add to that total the amount of additional fees in excess

of this  minimum,  which is  calculated  by  multiplying  $0.06 by the number of

people in each of the towns or cities that are above 25,000 in population.  Then

add this extra surcharge to the total revenue potential and multiply this amount

by 10% with the minimum Area  Representative Fee being $30,000.  For example, if

the designated  geographic  area has 300 towns or cities as shown in the REZcity

data base on-line, then the basic fee would be $450,000 (300 X $1500). If 100 of

those towns or cities  contained a population in excess of 25,000 for a total of

1,000,000 collectively in excess , then that amount would be multiplied by $0.06

per  person,  adding  that  result of $60,000  ($0.06 X  1,000,000)  to the base

revenue of $60,000,  arriving at a gross fee potential of $500,000.  That amount

would then be multiplied by 10%, resulting in an initial Area Representative Fee

of $51,000,  but since the minimum initial Area  Representative  Fee is $30,000,

 

 

                                       3

<PAGE>

 

Area  Representative  would be pay the minimum or $30,000 in this  example.  The

Franchisor then would permit the Area  Representative  to pay the balance of the

fee ($21,000)  over three years by  permitting  Franchsior to deduct 50% off all

fees that it pays to Area  Representative , until the amount is paid in full. If

Area  Representative does not pay the balance within the three year period, Area

Representative  shall  have the right to pay the  balance in full and retain the

remaining  territory or return the unsold  territory to  Franchisor  and have no

further obligations.

 

         B     The Development Fee is in addition to the Individual Franchise

fee  required  pursuant  to  any  Individual   Franchise  Agreement  which  Area

Representative executes. Nothing in this Agreement prohibits Area Representative

from  owning an  Individual  RezCity.com  Franchised  Business  or REZcity  Plus

Franchised  Business as long as all of the requirements for owning an Individual

RezCity.com  Franchised  Business or REZcity  Plus  Franchise  Business are met.

Should Area Representative  receive Franchisor's approval to develop and operate

one (1) or more RezCity.com  Individual Franchised Businesses in the Development

Territory,  such  development  shall be commenced only upon  Franchisor's  prior

written   approval  and  Area   Representative   shall  pay  to  Franchisor  the

then-current  Individual  Franchise Fee for each such additional  franchise,  in

addition  to the  Development  Fee as  provided  in  Paragraph  III.A.  of  this

Agreement.

 

         C     The  Area  Representative   acknowledges  and  agrees  that  a

material  provision of this Agreement is that the following number of Individual

Franchisees  must  be  opened  and  continuously  operating  in the  Development

Territory  during the term of this  Agreement in  accordance  with the following

Development Schedule ("Development Schedule"):

 

 

 

         As an Area  Representative,  you  will,  in  turn,  receive  40% of the

initial Franchise Fee ("Sales Commission") paid by each Individual Franchisee in

your  Development  Territory  within 30 days  after  such Fees are  received  by

Franchisor.

 

         In addition,  Area  Representative will receive a 10% commission on the

net revenue  earned on billings from the sale of Products and Services and other

Internet  advertising  including  REZcity Plus auction sales which occurs within

the Development  Territory excluding revenues that the franchisee earns from the

on-line travel agency located on the local portal.

 

              Under  the  terms  of  the  Area  Representative   Agreement,  the

Development Fee is fully earned and non-refundable under any circumstances.

 

         Except as stated above, the initial fees are uniform to all franchisees

under this offering.

 

<TABLE>

<CAPTION>

<S>                                 <C>                                     <C>                             

 

------------------------------------ -------------------------------------- --------------------------------------

                                         Number of Franchises                     Cumulative Number of

                                      Required to be Opened and                  Franchises Required to be

                                      Continuously Operating for                 Opened and  Continuously                    

                                      Business in the Development               Operating for Business in the

               Year                    Territory during the Year                  Development Territory

------------------------------------ -------------------------------------- --------------------------------------

           After the 3rd             20% of the Towns must be sold          20% of the  towns  sold or 20% of the

                                     or  20% of the  total  franchise  fee  total   franchise  fee  potential  as

                                     potential   as   described   in   the  described  in  the  addendum  of  the

                                     addendum of the agreement              agreement

------------------------------------ -------------------------------------- --------------------------------------

 

                                       4

<PAGE>

 

 

 

 

------------------------------------ -------------------------------------- --------------------------------------

                                         Number of Franchises                     Cumulative Number of

                                      Required to be Opened and                  Franchises Required to be

                                      Continuously Operating for                 Opened and  Continuously                    

                                      Business in the Development               Operating for Business in the

               Year                    Territory during the Year                  Development Territory

------------------------------------ -------------------------------------- --------------------------------------

           After the 5th             20% of the Towns must be sold          40% of the Towns must be sold

                                     or revenue earned                      or revenue earned

------------------------------------ -------------------------------------- --------------------------------------

           After the 10th            20% of the Towns must be sold or       60% of the towns must be sold or

                                     20% of the total franchise fee         60% of the total  franchise  fee

                                     potential as described in  the         potential as  described  in  the

                                     agreement                              agreement

------------------------------------ -------------------------------------- --------------------------------------

</TABLE>

 

         The year period shall be determined from the date of this Agreement, so

that the first year of the development  schedule set forth above shall be twelve

(12) months from the date this Agreement is executed.

 

         D. The Area  Representative  represents  that it has  conducted its own

independent investigation and analysis of the prospects for the establishment of

Individual  Franchises  and  REZcity  Plus  Franchises  within  the  Development

Territory,  approves of the foregoing  development  schedule as being reasonable

and viable and recognizes  that failure to achieve the results  described in the

foregoing  Development Schedule constitutes a material breach of this Agreement,

and in that event,  Franchisor  shall have the right to terminate this Agreement

as  provided  herein.  Termination  of this  Agreement  as a result  of the Area

Representative's  failure to meet the Development Schedule set forth above shall

not  affect the  Individual  Franchise  Agreements  of the  franchisees  who are

operating  Individual  Franchises in the Development  Territory;  however,  upon

termination,  all rights granted to the Area Representative under this Agreement

shall forthwith revert to Franchisor.

 

IV.      TERM

         ----

 

         This  Agreement  shall be  effective  and binding  from the date of its

execution,  and the term of this  license  shall  continue  for ten  (10)  years

thereafter,  unless  sooner  terminated as herein  provided.  At the end of said

term, Area  Representative  may renew its license for one successive term of ten

(10) years as a Area Representative:

 

         A.    At least sixty (60)days prior to expiration of the term, executes

the  form of Area  Representative  Agreement  then in use by  Franchisor,  which

agreement may contain terms  materially  different from those in this Agreement;

provided that Area Representative shall not be required to pay a new Development

Fee and the Development Territory will not be altered;

 

         B.    Has substantially complied with all provisions of this  Agreement

during the initial  term,  including  the payment on a timely  basis of all fees

due;

 

         C.    I s not  in  default  or under  notification   of breach of  this

Agreement at the time it gives notice of intent to renew;

 

         D.    Executes a general release, in a form satisfactory to Franchisor,

of any  and  all  claims  against  Franchisor  and  its  affiliates,  and  their

respective shareholders, officers, directors, employees, and agents, arising out

of or relating to this Agreement; and

 

         E.    Has agreed on a new Development Schedule for the additional term.

 

                                       5

<PAGE>

 

V.       PAYMENTS TO AREA REPRESENTATIVE

         -------------------------------

 

         A.    During  the term of this Agreement,  Area Representative shall be

paid a  commission,  as set  forth in this  Section,  based on a  percentage  of

initial  franchise fees paid by Individual or REZcity Plus  Franchisees  for the

purchase of  Individual  Franchises or REZcity Plus  Franchises("Sales  Services

Commission")  to  be  located  within  the  Development  Territory,  subject  to

fulfillment of the following conditions:

 

               1.   Individual and REZcity Plus Franchisee  executes a Franchise

Agreement  with  Franchisor,  and an initial  franchise fee has been paid to and

actually received by Franchisor (Franchisor shall not be deemed to have received

any fees paid into escrow,  if  applicable,  until such fees  actually have been

remitted to Franchisor);

 

               2.   The sale for which the initial  franchise  fee has been paid

is not a resale of any  existing  Individual  or REZcity  Plus  Franchise or any