2.1 Types of Association

• Sales Executive (hereinafter may be referred to as Sales Associate, Sales Representative or Realtor Associate. May also be known as Independent Contractor.
• Manager (hereinafter referred to as Branch Manager, Office Manager, Manager or Associate)

2.2 Independent Status
Manager and Sales Executives with the Company are associated as Independent Contractors and will enter into a contract to that effect. The Company shall not be liable for payment of Social Security Tax, Unemployment Compensation Tax, and/or other Income or Employment related Tax, or in any other way is obligated to said Sales Associate or Manager in any manner except as Independent Contractors.

All Independent Contractors shall maintain their own financial records in order to report earnings to the Internal Revenue Service as required by law. The Company's obligation to the Independent Contractor in this regard is specifically limited to providing the Independent Contractor an IRS 1099 Form which states earnings disbursed by the Company.

2.3 Selection
Any person wishing to become a candidate for selection by the Company as a Sales Associate or Manager will be required to go through the Company Selection Program. Managers have the authority and the responsibility to recruit and select people they will be working with in their particular office or division of the Company. All applications, forms, and other materials that may be used in the selection program will be maintained for the confidential use of the Company.

When it has been agreed upon by all parties that a Sales Associate is affiliating with the Company, he/she shall be given a new Sales Associate Kit which contains checklists, licensing information, a Broker-Sales Associate Contract, and training class enrollment forms.

2.4 Insurance

2.4.1 Automobile
Any Manager, Sales Executive, or Independent Contractor, whose normal duties require the use of their automobile in conduct of Company related business, shall maintain at their own expense, liability insurance with a minimum amount of $100,000.00/$300,00.00, and shall hold the Company blameless of any liability claim that may arise in their behalf or that of any other individual. Evidence of liability insurance must be provided to the Company.

2.4.2 Disability
Independent Contractors, Sales Executives and Managers are individually responsible for all employment related taxes. Consequently, disability benefits are not available unless a separate policy is acquired at the expense of the Independent Contractor.

2.4.3 Errors and Omissions
The Company provides Errors and Omissions Insurance on an annual fee basis. Each Associate shares in the cost of the same. Any and all costs for litigation will be shared equally between the Company and Associate, including the deductible under the Errors and Omissions Policy.

2.5 Company Property
The Company will furnish or make available to each Manager and/or Sales Executive materials to include, but not limited to, business cards, announcement cards, Policy and Procedures Manual, office keys, contract forms and related addenda, office forms, marketing materials. These items remain the property of the Company for the Sales Associate or Manage'rs use. In the event of termination with the Company, the Sales Associate or Manager is obligated to return these items in good condition.

2.6 Membership in Board of Realtors
Each Manager and Sales Associate of the Company must maintain, at their own expense, a current active REALTOR Associate or REALTOR membership in the National Association of Realtors, New Jersey Association of Realtors and Local Board or Realtors and related organizations in which membership is a prerequisite for these organizations. The Sales Associate and/or Manager should subscribe to and abide by the Codes of Ethics and Rules and Regulations of said organizations. Associates of the Company are encouraged to be active in the affairs of the local Boards of Realtors and related organizations.

2.7 Sales Development
Any success that Better Homes, NJ/VRI Realtors has enjoyed in the past or should enjoy in the future is the result of specialized services rendered in satisfaction of the needs of its clients. The Associates of the Company should, therefore, be willing to give of themselves, and educate themselves in order to gain knowledge and develop the skills necessary to serve their clients and customers. It is the Company's commitment to make available programs, guidance, and the help necessary to provide the right environment in which every Sales Associate may develop to their full potential.

2.7.1 Better Homes, NJ/VRI Realtors Training Program
The Company will provide, for newly licensed Associates and any Associate being hired from another Company, an initial training program. The Better Homes, NJ/VRI Realtors Training Program is designed to give new Associates the knowledge and skills necessary to develop rapidly into a successful, professional Real Estate Sales Executive.

2.7.2 Continual Training and Development Program
Continual Training and Development Programs are available by the Company in order to provide the opportunity for each Associate to continue to progress in the business, and to reinforce those things that are making him/her successful.

2.8 Disbursements of Commissions

2.8.1 Sales
The New Jersey Real Estate Commission stipulates that commissions collected by the Company must be disbursed by the company's Accounting Department, within 10 business days from receipt of same. Our Company policy is that commissions will be disbursed by Company checks as soon as practical, usually within 3 days, following collection of the commission, but not later than the 10 days, following delivery to the Accounting Department.

2.8.2 Rentals
A rental closing check must be a Bank or Certified check in order for the Sales Associate to be paid within the normal time schedule. It the rental closing check is not a Bank or Certified Check, the Sales Associate will be paid 10 business days from Accounting's date of deposit, assuring sufficient funds are in Client's account.

2.8.3 Referral of Commissions
In the event the Broker receives referral commissions from other Brokers, Builders, or Third Parties, such commissions shall be shared equally, 50% to Referring Associate and 50% to Broker. Referral fees to other Brokers are paid off the top of the Broker's Commission, before any Sales Associate is paid his proportionate listing and/or selling commission.

2.8.4 House Referral System
When Sales Associates refer customers or clients between themselves, the referral fee, whether 20%, 25% or 30%, etc., will be distributed from the Sales Associate's portion of the commission. It is recommended this be confirmed in writing. This procedure applies only to Better Homes, NJ/VRI Realtors' Sales Executives dealing between them. When a separate referral company is established that will deal through Better Homes, NJ/VRI Realtors, for the purpose of accommodating referrals generated by part-time Associates, the split will be in accordance with the referral company's schedule.

2.8.5 Bonus Offered By Sellers
Bonuses offered by sellers will be paid in accordance with the Associates and Brokers commission agreement.

2.9 Vacation And Holidays

2.9.1 Vacations
In order for any Sales Associate taking a vacation to have his/her business covered for him/her while he/she is away, it is recommended that the Associate:

• notifies their Manager in advance as to when he/she will be leaving and who will be covering for him/her.
• arrange to have another Associate cover any floor-time or open houses for which he/she has volunteered.
• arrange for another Associate to take any calls directed to him/her during his/her absence.
• arrange for another to service his/her listings during his/her absence
• arrange for another Associate to service any and all prospects with whom he/she is working.

2.9.2 Holidays
Christmas Day, July 4th, Thanksgiving, Memorial Day, Labor Day, and New Year's Day will be observed annually as holidays. No advertising will be scheduled on these holidays.

2.10 Buying or Selling of Real Estate by Associates

2.10.1 Statement of Statue
In compliance with State Law, any Associate purchasing Real Estate or selling Real Estate during the time he/she is Associated with the Company must place in the contract for sale or purchase, a statement of his/her status as a Real Estate Sales Associate or Associate Broker.

2.10.2 Waiver of Company Commissions
If any full time Associate who has been with the Company for two or more consecutive years, or who has earned a minimum of $35,000 in any one year while associated with the Company, has the approval of his/her Manager, purchases a property for his/her homestead, ******the Company will waive all commissions due it, provided the property is not a Company listing, and provided that commissions are paid to any other Associates or Firms due commissions. Should the property being purchased for a homestead be a Better Homes, NJ/VRI Realtors listing, the Company will waive all its share of the commission on the purchase end, but the Company will retain its normal share of the listing portion of the transaction. If the property being sold is the Associate's homestead, the Company will waive 50% of Company's share due it, on the listing end, provided commissions and bonuses are paid in full to other Associates of the Company or to cooperating Firms.
No In-House Bonus will be paid if: Company is waiving any of its share of the Commission
Commission check is not taken by Associate on amounts received by Associates which would otherwise have been the company's portion of the commission (i.e. waiver of Company's portion on Associates purchase or sale of homestead).

No In-House Bonus will be paid if:
Company is waiving any of its share of the Commission

• commission check is not taken by Associate
• on amounts received by Associates which would otherwise have been the company's portion of the commission (i.e. waiver of Company's portion on Associates purchase or sale of homestead).

2.11 Disputes between Sales Associates
If a dispute arises between two or more Associates, they should endeavor to settle the matter between themselves by reference to this Policy Manual and application of the Golden Rule. In the event they are not able to reach an amicable agreement, the following procedure shall be followed:

• All the facts shall be placed before the Manager or Managers of the Associates involved for decision by the Manager or Managers;

• The committee shall be chaired by a member of Senior Management of the Company;
• Senior Management shall appoint one Associate from each of the Companies sales offices to sit on the committee;
• The committee shall have each Associate involved in the dispute appear before it individually to present any facts or arguments he or she wishes to present and to answer questions presented by the committee;
• The committee's decision shall be made by vote of its members in executive session and the deliberation of the committee shall remain confidential.
• The decision of the committee shall be submitted to Senior Management. Upon ratification of the decision, said decision shall be final and binding for all parties involved in the dispute.
• Prior to the dispute being submitted to the arbitration committee, each Associate involved in the dispute shall certify in writing that he or she will abide by the decision rendered by the committee and ratified by Senior Management.

2.12 Recognition of Outstanding Performance

2.12.1 Sales Associate of the Month
Each month a 全ales Associate of the Month' will be selected for each office. There will be two awards. One 全ales Associate of the Month' award will be based on that Sales Associate in each office who has the highest dollar volume of income reported for that particular month. Income, in this case is construed to be business written, but not closed. The Sales Associate's name will go on the 全ales Associate of the Month' Plaque for dollar volume in each perspective office. The second 全ales Associate of the Month' award will be based on that Sales Associate in each office who has the highest number of units for that particular month. Units are calculated as follows: Listing In, 3 points; Listing Sold, 5 points; Sale, 5 points; Rental Transaction, 1 point; Tracts, Projects or Developments with over two properties, 2 points.

In the event of a tie, the Sales Executive with the highest dollar/commission volume wins. The Sales Associate's name will go on a 全ales Associate of the Month' Plaque for Total Units in each respective office.

2.12.2 Sales Associate of the Year
Each year the Chairman of the Company, or person designated by the Chairman, will select a 全ales Associate of the Year' from each office and award appropriate recognition of this selection. The 全ales Associate of the Year' award is based on that Sales Associate in each office who has the highest income reported for that particular calendar year.

2.12.3 Top Achiever of the Year
A special award will be given to a Sales Associate or Associates selected by the Chairman, or person designated by the Chairman, of the Company as being the Top Achiever(s) for the entire Company.

2.12.4 Million Dollar Club
Each calendar year, those Sales Associates achieving Million Dollar Club status will be designated 閃illion Dollar Club Producers' for that particular year, and awarded appropriate recognition of this selection.

2.12.5 Medallion Club Members
Each calendar year, those Sales Associates achieving Medallion Club status will be designated 閃edallion Club Members' for that particular year, and awarded appropriate recognition of this selection.

2.12.6 Eligibility
Managers will not be eligible for 全ales Associate of the Month' or 全ales Associate of the Year' awards.

2.13 Terminations

2.13.1 Surrender Listings
Any terminating Associate shall turn in to his or her Manager any and all listings currently in his or her name for reassignment. No listing commission shall be paid to any agent if the contract is not written during his tenure with the Company.

2.13.2 Surrender of Prospects
Any terminating Associates shall turn in to his or her Manager names of all available data on any and all prospects he or she has received as a result of the efforts of the Company, including Company advertising, signs and referrals.

2.13.3 Return of Property
Any Associate terminating shall turn in to his or her Manager all Company property to, specifically, include all Company signs, keys, forms, lock boxes, lock box keys, policy manuals, office listings, etc.. In the event the terminating Associate shall fail or refuse to turn in all property of the Company or related agencies, the original cost to the Company of such property may be charged to the Associate and/or the Company may utilize any legal means available to it for recovery of said property.

2.13.4 Repayment of Funds
Any funds owed to the Company by a terminating Associate or drawn against the line of credit of the Company shall be due in full immediately upon termination, not withstanding any other terms or conditions previously agreed to between the agent and the Company. Associate agrees that any amounts due to Better Homes, NJ/VRI Realtors will either be paid immediately upon termination, or in the event there are commissions due and owing from transaction(s) to close in the future, same will be deducted prior to disbursement of commissions to Associate.

2.13.5 Exit Interview
Each Associate terminating shall be interviewed before final termination by his or her Manager and/or Chairman, President or person designated by them. Written summaries of these interviews shall be placed in a file for the confidential reference of the Company.

2.13.6 Notification to Real Estate Commission
In the event an Associate is terminated as a result of alleged violation of any Law or Regulation of the State of New Jersey, the Company shall file, with the New Jersey Real Estate Commission, a full report of the reason for terminating and furnishing said Associate with a true and accurate copy of such statement. Licenses will be forwarded to new the State of New Jersey Real Estate Commission or new employing Broker if requested in writing, via Certified Mail.

2.13.7 Notification to the New Jersey Board of Realtors
In the event an Associate is terminated as a result of alleged violation of any Rule or Regulation of the New Jersey Board of Realtors, or any of its other related organizations, the Company shall file with the New Jersey Board of Realtors a full and accurate report of the reason for terminating and furnishing said Associate with a true and accurate copy of such statement.

2.13.8 Unpaid Commissions
Any and all commissions earned by the terminating agent, but not already paid to him or her, shall be disbursed to said agent on the date he or she normally would have received payment had he or she remained with the Company. This is in accordance with the termination schedule which is a part of our Broker/Sales Associate Independent Contractor Agreement, which may indicate a service fee to be deducted from the Sales Associate's share of the commission.

2.13.9 Bonuses, Incentives, Awards
Any and all Bonuses, Incentives, Awards or other compensation payable as a result of Company's sponsored, promotional programs (i.e. recruiting bonuses, travel vouchers, contests, etc., will only be paid to the Associate so long as he or she is an Independent Contractor with Better Homes, NJ/VRI Realtors.