Independent Contractor Agreement - Butterwings Inc. and Edmund C. Lipinski
INDEPENDENT CONTRACTOR AGREEMENT
THIS INDEPENDENT CONTRACTOR AGREEMENT is entered into as of the lst day
of August, 1995, by and between BUTTERWINGS, INC., an Illinois corporation (the
"Company") and Edmund C. Lipinski ("Lipinski").
RECITALS
A. The Company is engaged in the business of restaurant operations in certain
areas of the United States, including but not limited to the State of Wisconsin
and Southern California (collectively, the "Territory"); and
B. The Company, through its subsidiaries, is a franchisee of Hooters of America
authorized to own and operate Hooters restaurants in certain portions of the
Territory; and
C. Lipinski has experience in the construction and operation of Hooters
restaurants; and
D. The Company desires to retain the services of Lipinski, and Lipinski desires
to be retained by the company, as an independent contractor, and not as an
employee, for the purposes of consulting with and advising the company regarding
the construction and operation of Hooters restaurants; and
E. In the course of its business, the Company has developed and will continue to
develop a considerable body of confidential and secret information in connection
with its business, and in connection with the performance of his duties and
obligations as an independent contractor, Lipinski will have access to
information concerning the Company's business which Lipinski agrees is entitled
to protection;
NOW, THEREFORE, in consideration of the foregoing Recitals and mutual promises
herein contained, and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties agree as follows:
1. Retention of Lipinski. The Company hereby agrees to retain
Lipinski, as an independent contractor and not as an employee, for the term
of this Agreement, and Lipinski hereby agrees to accept such retention by
the Company.
2. Appointment.
(a) The Company hereby appoints Lipinski as its non-exclusive agent,
to use his best efforts:
(i) to assist the Company in identifying and selecting site
locations suitable for Hooters restaurants; and
(ii) to assist the Company in constructing and developing Hooters
restaurants within the Territory. In connection therewith,
Lipinski shall: (a) make recommendations to the Company
regarding the selection of architects and suppliers and the
design and construction of the restaurants; and (b)
supervise and direct the construction process; provided,
however, that Lipinski shall have no authority to bind the
company in the absence of the written authorization of an
officer of the Company; and
(iii)to consult with and advise the Company regarding the
operations of Hooters restaurants within the Territory; and
(iv) to perform such other and further services relating to
restaurant construction and operation as the Company shall
direct.
(b) Such services shall be rendered by Lipinski at such reasonable
times and places as Lipinski shall determine; provided, however,
that nothing herein shall require Lipinski to devote his full
time and attention to the performance of services hereunder.
3. Term. Unless earlier terminated as hereinafter provided or pursuant to
Section 4 hereof, the term of this Agreement shall commence on the date hereof
and shall continue until the fifth anniversary of such date. Upon the expiration
of the term, the term of this Agreement may be continued by mutual agreement of
the Company and Lipinski.
4. Termination. This agreement shall terminate prior to the term specified in
Section 3 hereof:
(a) if either party hereto serves 30-day advance written notice to
the other party of its intent to terminate this Agreement (in the
event this clause is exercised by the Company, such notice must
be preceded by a vote of a majority of the Board of Directors of
the Company authorizing such notice); or
(b) at either party's election, for cause, which for purposes of this
Agreement shall mean (i) the material disregard or gross neglect
by the other party of its duties and obligations hereunder; or
(ii) the breach by such other party of any material
representation, covenant or agreement contained in this Agreement
and applicable to it and, in each case, the inability of such
other party to cure the existence of such event specified in this
Section 4(b) within ten days after the delivery of written
notification thereof as provided in Section 11 hereof.
5. Representations and Warranties of the Company. The Company represents and
warrants to Lipinski as follows:
(a) The Company has the necessary power and authority to execute this
Agreement and to perform the obligations imposed upon the Company
and consummate the transactions contemplated hereby.
(b) The Company is a corporation duly organized and validly existing
under the laws of its state of incorporation and it is duly
authorized to execute this Agreement and to perform its duties
and obligations hereunder.
(c) The execution of this Agreement and the performance of the
obligations and consummation of the transactions herein
contemplated will not result in a material breach of, or
constitute a default under, any statute, indenture, mortgage or
other agreement or instrument to which the Company is a party or
by which it is bound, or any order, rule or regulation imposed
upon the Company by any court or governmental agency or body
having jurisdiction over it. The Company has no knowledge of any
consent, approval, authorization or action that is required for
the execution of this Agreement and the performance of the
obligations and consummation of the transactions herein
contemplated and which has not been obtained.
6. Representations and Warranties of Lipinski. L i p i n s k i represents and
warrants to the Company as follows:
(a) Lipinski has the necessary power and authority to execute this
Agreement and to perform the obligations imposed upon Lipinski
and consummate the transactions contemplated hereby.
(b) The execution of this Agreement and the performance of the
obligations and consummation of the transactions herein
contemplated will not result in a material breach of, or
constitute a default under, any statute, indenture, mortgage or
other agreement or instrument to which Lipinski is a party or by
which he is bound, or any order, rule or regulation imposed upon
Lipinski by any court or governmental agency or body having
jurisdiction over him. Lipinski has no knowledge of any consent,
approval, authorization or action that is required for the
execution of this Agreement and the performance of the
obligations and consummation of the transactions herein
contemplated and which has not been obtained.
7. Compensation and Reimbursement.
(a) In consideration of the services to be performed by Lipinski
hereunder, the Company agrees to remit to Lipinski:
(1) the sum of $8,333.33 per month, payable in advance on the
first day of each month;
(2) the sum of $350.00 payable on the first day of each month;
(3) the sum of $5,000.00 payable upon the opening of the
Company's fifth Hooters restaurant;
(4) the sum of $5,000.00 payable upon the opening of the
Company's sixth Hooters restaurant.
(b) The Company's obligation to make any further payments to Lipinski
pursuant to subsection (a) hereof shall cease upon the effective
date of termination of this Agreement.
(c) In addition to the payments provided in subsection (a) hereof,
the Company shall directly pay or reimburse to Lipinski any
approved expenses of travel, lodging, food, telephone/fax,
overnight delivery and other related expenses.
8. Office and Clerical Services. In consideration of payment of the sum of
$10.00, receipt of which is hereby acknowledged, the Company shall provide
Lipinski with office space and clerical, secretarial and administrative services
wherever the Company maintains its corporate headquarters for the term of this
Agreement.
9. Covenants of Lipinski. Lipinski covenants and agrees with the Company that
Lipinski will:
(a) Protect as confidential and will not disclose (other than in
connection with Lipinski's assigned duties or as the Company may
consent in writing) Proprietary Information (as hereinafter
defined). In furtherance of such obligation, Lipinski will not
divulge, copy, reveal, sell, license or otherwise make available,
in whole or in part, any Proprietary Information (as hereinafter
defined) to any other person, firm or corporation in any fashion
whatsoever; nor will Lipinski appropriate any such Proprietary
Information for Lipinski's own use personally or as a partner,
agent, shareholder, independent contractor or employee of any
person, firm or corporation.
(b) For purposes hereof, the term "Proprietary Information" shall
mean all information, whenever developed, concerning the Company,
including financial data, writings, computer software, sales
policies, customer information, conceptions, inventions,
techniques, trade secrets, sources of supplies, know-how, plans
and programs or other knowledge that is proprietary or
confidential in nature and was or shall be directly or indirectly
developed by the Company.
(c) Upon termination of this agreement for any reason, Lipinski will
immediately return to the Company any materials in Lipinski's
possession relating to the Proprietary Information. Lipinski's
obligation to preserve the confidentiality of Proprietary
Information pursuant to Section 8(a) hereof shall continue for a
period of two (2) years following termination of this agreement.
(d) The parties hereto acknowledge that any breach of this Section 8
of this Agreement will cause significant and irreparable harm to
the Company and its relationship with the Issuer and other
parties. Accordingly, in the event Lipinski shall breach this
Section 8(a) (b) or (c), the Company shall have the right, in its
discretion, to seek an injunction against such acts, without any
prior notice to Lipinski and/or to obtain such damages as are
appropriate.
10. Indemnification. Lipinski agrees to indemnify and hold harmless the Company
from and against any and all loss, liability, claim, damage and expense
whatsoever (including but not limited to reasonable attorneys and paralegals'
fees) arising out of or resulting from any willful and knowing breach by
Lipinski of this Agreement. The Company agrees to indemnify and hold harmless
Lipinski from and against any and all loss, liability, claim, damage and expense
whatsoever (including but not limited to reasonable attorneys and paralegals'
fees) arising out of or resulting from any authorized actions taken by Lipinski
in the performance of this Agreement.
11. Relationship of Parties. Lipinski shall at all times act as an independent
contractor, and nothing contained herein shall be deemed to create an
employment, partnership, joint venture or agency relationship between the
parties. Lipinski shall neither have nor claim any right arising from any such
relationship.
12. Notices. All notices required or permitted to be given under this Agreement
shall be sufficient if in writing and mailed certified mail, return receipt
requested, postage prepaid, addressed as follows:
If to the Company: Butterwings, Inc.
2345 Pembroke Avenue
Hoffman Estates, IL 60195
Attn: Kenneth B. Drost
with a copy to: Joel R. Schaider, Esq.
Sachnoff & Weaver
30 South Wacker Drive, Ste. 3000
Chicago, IL 60606
If to Lipinski: Edmund C. Lipinski
2345 Pembroke Avenue
Hoffman Estates, IL 60195
with a copy to: Peter B. Shaeffer, Esq.
135 South LaSalle Street
Suite 1420
Chicago, IL 60603
13. Construction. This Agreement shall be governed by, subject to and construed
in accordance with the laws of Illinois.
14. Severability. If any portion of this Agreement is held invalid or
unenforceable by a court of competent jurisdiction, then, so far as is
reasonable and possible (a) the remainder of this Agreement shall be considered
valid and operative, and (b) effect shall be given to the intent manifested by
the portion held invalid or inoperative.
15. Multiple Counterparts. This Agreement may be executed in any number of
identical counterparts, each of which shall be deemed to be an original, but all
of which shall constitute, collectively, one and the same Agreement; provided,
however, in making proof of this Agreement, it shall not be necessary to produce
or account for more than one such counterpart, provided such counterpart has
been executed by the party to be charged with performance of the Agreement.
16. Modification of Amendment. This Agreement may not be modified or amended
except by written agreement executed by all the parties hereto and dated after
the date hereof.
17. Number and Gender of Words. Whenever the context so requires, the masculine
shall include the feminine and neuter, and the singular shall include the
plural, and conversely.
18. Other Instruments. The parties hereto covenant and agree that they will
execute such other and further instruments and documents as are or may become
necessary or convenient to effectuate and carry out this Agreement.
19. Captions. The captions used in this Agreement are for convenience only and
shall not be considered as part of this Agreement.
20. Parties. This Agreement shall be binding upon and inure solely to the
benefit of the parties hereto, and their respective successors, legal
representatives, heirs and assigns, and no other person shall have or be
construed to have any legal or equitable right, remedy or claim under or in
respect to or by virtue of this Agreement or any provision herein contained.
Notwithstanding the foregoing, no party shall assign its obligations and duties
hereunder without the written consent of the other party hereto.
21. Entire Agreement. This Agreement contains the entire understanding between
the parties and supersedes any prior understandings or written or oral
agreements between them respecting the subject matter hereof.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the day
and year written above.
BUTTERWINGS, INC.
By:
Authorized Officer
EDMUND C. LIPINSKI