Independent Contractor Agreement - Diversified Opportunities Group Ltd. and Ian M. Stewart
INDEPENDENT CONTRACTOR AGREEMENT
This Independent Contractor Agreement ("Agreement") is entered into and
made effective as of January 1, 2001 ("Agreement Date"), by and between
DIVERSIFIED OPPORTUNITIES GROUP LTD., an Ohio limited liability company, having
an address at 1231 Main Avenue, Cleveland, Ohio 44113 ("Diversified"), and IAN
M. STEWART, having an address at 9258 Hunt Club Lane, Mechanicsville, Virginia
23111 ("Contractor").
RECITALS
A. Contractor has special skills, training, experience, knowledge
and ability to locate, evaluate, negotiate and complete the
acquisition of various truck stop facilities within the State
of Louisiana ("Consulting Services") and Diversified desires
Contractor to provide such Consulting Services; and
B. Contractor seeks to be retained by Diversified and Diversified
seeks to retain Contractor under the terms and conditions set
forth below.
NOW, THEREFORE, in consideration of the mutual promises and agreements
hereinafter set forth and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:
1. Incorporation. The foregoing recitals are incorporated herein as
if fully rewritten herein.
2. Independent Contractor. At all times during the Term (as
hereinafter defined) of this Agreement, Contractor shall
perform the duties and responsibilities identified in this
Agreement as an independent contractor and not as an employee
of Diversified. Diversified shall not withhold any federal or
state taxes, social security, unemployment compensation or
other payments from the Commission (as hereinafter defined)
paid to Contractor. Contractor shall pay all federal and state
income taxes, social security contributions and all other
taxes and charges levied or assessed with respect to the
Commission received by Contractor pursuant to this Agreement.
Contractor agrees to abide by all applicable federal, state and
local laws, ordinances, rules and regulations in performing the
duties and responsibilities required of him hereunder. In
addition, Contractor agrees and does herewith indemnify, defend
and hold Diversified harmless from any claims, losses,
liabilities or expenses it or its affiliates or subsidiaries
may suffer, including reasonable attorney's fees, arising as a
result of Contractor's failure to pay all withholding
obligations and tax liabilities associated with the
Commission(s). At all times under this Agreement the Contractor
is acting and performing as an independent contractor and shall
not be considered an employee or agent of Diversified.
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3. Term and Termination. This Agreement shall be deemed to have
commenced on the Agreement Date and shall continue thereafter
until 5:00 p.m. E.S.T. on the day of the final closing of the
Second Traunche (as hereinafter defined), unless terminated
prior to such date as hereinafter provided (the Term"). The
Term may be mutually extended by a written agreement executed
by both parties hereto.
a. Prior to expiration of this Agreement as set forth
above, either party shall have the right to terminate
this Agreement, with or without justifiable cause, upon
sixty (60) days' prior written notice to the other
party. Notwithstanding the foregoing, this Agreement
shall terminate immediately upon the occurrence of any
of the following events: (i) Contractor's death; or (ii)
Contractor being convicted of a felony or act of moral
turpitude, or (iii) Contractor's taking any action, in
Diversified's reasonable judgment, that is likely to
adversely affect the reputation, operation or business
of Diversified or its affiliates or subsidiaries.
b. Diversified and Contractor acknowledge and agree that
no provision contained in this Agreement offers,
guarantees or otherwise obligates Diversified to
continue to retain Contractor following the termination
of this Agreement. Following the termination of this
Agreement for any reason, Diversified shall promptly pay
Contractor (or Contractor's estate) the Commission for
services rendered to the effective date of the
termination as outlined below. Contractor acknowledges
and agrees that no other compensation, of any nature or
type, shall be payable hereunder following the
termination of this Agreement.
4. Duties and Responsibilities of Contractor. During the Term,
Contractor agrees to be available to the agents and employees of
Diversified, on an as needed basis, to provide the Consulting
Services as Diversified may reasonably request, upon reasonable
advance notice, in connection with Diversified's gaming and
other business and financing operations in the State of
Louisiana. Contractor further agrees during the Term to be
available, upon reasonable notice and at reasonable times, at
Diversified's operations in the States of Ohio, Virginia and
Louisiana. Contractor agrees to conduct himself, at all times
while rendering services hereunder, in a professional manner and
shall use his best efforts to make decisions and recommendations
hereunder for the purpose of benefiting the financial success
of Diversified. Contractor agrees not to accept any engagement
during the Term that would violate, or would be likely to
result in a violation of, Section 6(b) hereof. Nothing
contained in this Agreement is intended to, nor shall it be
construed to, grant Contractor any exclusive rights to provide
the services and duties described herein.
5. Compensation. Prior to the expiration or termination of this
Agreement, pursuant to Section 3 hereof, Diversified will make
the following payments to Contractor as and for full and
complete consideration and payment for any and all services
rendered
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under this Agreement, whether rendered prior to, on, or after the
Agreement Date ("Commission"):
a. One Hundred Eighty-Seven Thousand Five Hundred and 00/100
Dollars ($187,500.00) to be paid as follows: One Hundred
Thousand Dollars ($100,000.00) to be paid on July 16, 2001 with
the remaining balance to be paid in four (4) equal monthly
payments commencing on the first day of August, 2001 and
continuing on the first day of each of the next three (3)
calendar months thereafter;
b. at the final closing the Second Traunche, provided such final
closing occurs within the Term or within one (1) year
following the end of the Term (the "Acquisition Period"), One
Hundred Eighty-Seven Thousand Five Hundred Dollars and 00/100
Dollars ($187,500.00). The Second Traunche shall mean the
completion of the purchase, by Diversified or any of its
affiliates or subsidiaries, of all of the following truck stops:
(i) Plantation, L.L.P.; (ii) Raceland Truck Plaza and Casino,
LLC (iii) Lucky Magnolia Truck Stop and Casino, LLC; (iv) Bayou
Vista Truck Plaza & Casino LLC; and (v) Jace, Inc. In the event
less than all of the five (5) truck stops identified in this
Section 5(b) are purchased during the Term within the
Acquisition Period, Contractor shall be paid Thirty-Seven
Thousand Five Hundred and 00/100 Dollars ($37,500.00) for each
such truck stop so purchased with payment of the foregoing sum
to be paid upon the closing of the acquisition of each truck
stop.
c. In addition to the foregoing, should Diversified or any of its
affiliates or subsidiaries purchase, during the Acquisition
Period, either of the two truck stop facilities owned by Shawn
Scott or his wholly owned subsidiaries located in St. Martin
Parish, Louisiana, one of which is referred to as the "Amoco"
truck stop and the other as the "Texaco" truck stop, Contractor
shall be paid Thirty-Seven Thousand Five Hundred and 00/100
Dollars ($37,500.00) for each such truck stop so purchased with
payment of the foregoing sum to be paid upon the closing of the
acquisition of each truck stop; provided, however, regardless of
the total number of truck stop facilities purchased by
Diversified or its affiliates or subsidiaries during the
Acquisition Period in no event shall Contractor be entitled to
payment for more than five (5) total truck stops whether
purchased from the Second Traunche, Shawn Scott or any other
source.
d. Notwithstanding anything contained in this Agreement to
contrary, in no event shall the Contractor's combined Commission
arising under Section 5(b) and (c) exceed the sum of One
Hundred Eighty-Seven Thousand Five Hundred Dollars (187,500.00).
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[Execution Copy]
e. If any truck stop is purchased by Diversified or any of its
affiliates or subsidiaries after the Acquisition Period,
including any truck stop which is a part of the Second
Traunche, Stewart shall have no right to any Commission upon
the closing of such truck stop(s) and does herewith release
and waive any right, title or interest in or to such
Commission(s).
6. Diversified's Proprietary Interest in Trade Secrets AND
Non-Compete.
a. Contractor acknowledges that he has had and expects to continue
to have access to and become familiar with the records,
documents, files, policies, business plans, strategies,
customers, financial information, employees, officers, agents,
unique data and the like regarding Diversified and its
affiliates and subsidiaries and their businesses and operations
(collectively referred to herein as "Trade Secrets").
Contractor acknowledges that the Trade Secrets are special,
valuable and unique assets of Diversified and its affiliates
and subsidiaries and that Diversified and/or its affiliates and
subsidiaries would suffer great loss and damage if, during or
after the Term, Contractor were to disclose, reveal, divulge or
make available, either directly or indirectly, to any person,
firm, partnership, corporation, association or other entity,
the Trade Secrets. Accordingly, Contractor agrees that the
Trade Secrets, in their entirety or any portion thereof, shall
not be disclosed, revealed, divulged, or made available to any
person, firm, partnership, corporation, association or other
entity, either directly or indirectly, during or after the
Term, unless Contractor is authorized to do so in writing by
Diversified. Contractor agrees that, upon termination of this
Agreement for any reason, Contractor shall immediately return
to Diversified all Trade Secrets previously held by, retained
or under the control of Contractor (including, but not limited
to, any analyses, compilations, studies or documents prepared
during the review of Trade Secrets by Contractor or his
agents), and Contractor agrees not to make and/or retain any
copies of any Trade Secrets.
b. In consideration of the fees, payments, promises and benefits
accruing hereunder, Contractor agrees during the Term and for a
period of two (2) years following the expiration of the Term or
an earlier termination of this Agreement (hereinafter the
"Non-Compete Period") not to, directly or indirectly, own (in
any form in whole or in part), operate, manage, control, be
employed by, participate in, provide advice, financial aid or
other assistance to any aspect of a business, or conduct, carry
on or engage in any activity, any of which directly or
indirectly compete with any aspect of the operations of JALOU
L.L.C., a Louisiana limited liability company, JALOU II INC., a
Louisiana corporation or any of their affiliates or
subsidiaries whether created before or during the Term or the
Acquisition Period (collectively "JALOU"). In addition to the
foregoing, Contractor agrees, during the Non-Compete Period,
not to induce any of JALOU's employees to leave their
employment, nor to employ either directly or
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indirectly any of JALOU's employees. Further, Contractor agrees
he shall not solicit any customers, suppliers, sponsors, or
advertisers of, or other third-parties doing business with,
JALOU for the purpose of inducing, directly or indirectly, the
termination of such entity's or individual's relationship with
JALOU.
c. Contractor acknowlegdes that the restrictions and covenants
contained in Sections 6(a) and (b) are reasonably necessary to
protect the investments and business of Diversified and are a
material inducement to Diversified to enter into this Agreement.
Contractor further acknowledges that monetary damages alone
would be inadequate compensation for the breach of the
covenants and agreements contained in this Section and,
therefore, any court may award Diversified injunctive and/or
other equitable relief for any breaches of the foregoing, such
remedies shall be in addition to any and all other remedies
Diversified may otherwise have.
d. The parties agree that in the event a court of competent
jurisdiction shall determine that any aspect of the covenants
and agreements contained herein shall be unenforceable for any
reason, such court may modify the covenant or agreement to
render such covenant or agreement enforceable.
e. Contractor has carefully considered the nature and extent of the
restrictions upon him and the rights and remedies conferred upon
Diversified and its affiliates and subsidiaries under this
Section 6. Contractor further acknowledges and agrees that the
remedies, rights and restrictions contained in Section 6:(i) are
reasonable in time and territory; (ii) are designed to eliminate
competition which otherwise would be unfair to Diversified, its
affiliates and subsidiaries; (iii) do not stifle the inherent
skill and experience of the Contractor; (iv) would not operate
as a bar to Contractor's sole means of support; (v) are fully
required to protect the legitimate interests of Diversified and
its affiliates and subsidiaries; and (vi) do not confer a
benefit upon Diversified or its affiliates or subsidiaries
disproportionate to the detriment to the Contractor.
7. Notice. Notices and all other communications provided for in this
Agreement shall be in writing and shall be deemed to have been duly
given when delivered in person or by a recognized overnight delivery
service or upon receipt of a confirmed facsimile transmission or when
mailed by United States registered mail, return receipt requested,
postage prepaid, addressed to the last known address of the
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respective parties, provided that all notices to Diversified shall be
directed to the attention of the ChIef Executive Officer, or to such
other address as either party may have furnished to the other in
writing in accordance herewith, expect that notices of change of
address shall be effective only upon receipt. At least initially,
notices to Contractor shall be addressed or transmitted a follows:
Ian M. Stewart, 9258 Hunt Club Land, Mechanicsville, Virginia 23111.
8. Payments. Any payments to Contractor hereunder shall be made in U.S.
same-day funds wire-transferred to Contractor's account as follows:
To the Account of Ian M. Stewart
Bank
--------------------------
Routing No.:
Account No.:
Contractor shall notify Diversified in writing of any change in such wire
transfer instructions.
9. Governing Law. The validity, interpretation, construction and
performance of this Agreement shall be governed by the laws of the
State of Ohio without giving effect to the conflicts of law principles
thereof. The parties agree that they shall be estopped from raising
any defenses or claims regarding venue, including any conflicts of law
provisions to which any parties would be otherwise entitled.
10. Validity. The invalidity or unenforceability of any one or more
provisions of this Agreement shall not affect the validity or
enforceability of any other provision of this Agreement, which shall
remain in full force and effect.
11. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all
of which together will constitute one and the same instrument.
12. Jurisdiction. In the event of any dispute or controversy arising under
or in connection with this Agreement, Contractor and Diversified
hereby irrevocably consent to the jurisdiction of the United States
District COurt for the Northern District of Ohio.
13. Waiver of Jury Trial. DIVERSIFIED AND CONTRACTOR EACH HEREBY
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KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY AND ALL RIGHTS THAT
THEY MAY HAVE TO A TRIAL BY JURY WITH RESPECT TO ANY LITIGATION BASED
HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH THIS
AGREEMENT, ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (ORAL
OR WRITTEN), OR ACTIONS OF DIVERSIFIED OR CONTRACTOR. THIS PROVISION
IS A MATERIAL
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(Execution Copy)
INDUCEMENT FOR DIVERSIFIED AND CONTRACTOR ENTERING INTO THIS AGREEMENT.
14. Entire Agreement. This Agreement constitutes the entire agreement between
Contractor and Diversified with respect to the subject matter hereof and no
agreements or representations, oral or otherwise, express or implied, with
respect to the subject matter hereof have been made by any party that are not
set forth expressly in this Agreement. No provisions of this Agreement may be
modified, waived or discharged unless such modification, waiver or discharge
is agreed to in writing signed by Contractor and such officer as may be
specifically designated by Diversified. No waiver by any party at any time of
any breach by another party of, or compliance with, any condition or provision
of this Agreement to be performed by the other party shall be deemed a waiver of
similar or dissimilar provisions or conditions at the same or at any prior or
subsequent time. The parties further acknowledge and agree that this Agreement
and the terms contained herein supersede all previous contracts and agreements
between the parties with respect to the subject matter hereof, except as
expressly set forth herein.
15. Indemnification. Contractor shall indemnify and hold harmless Diversified
and its officers, members, managers, employees, agents, contractors,
sublicensees, affiliates, subsidiaries, successors and assigns from and against
any and all damages, liabilities, costs, expenses, claims and/or judgments,
including, without limitation, reasonable attorneys' fees and disbursements
(collectively the "Claims") which any of them may suffer from or incur and which
arise or result primarily from (i) any gross negligence or willful misconduct of
Contractor arising from or connected with Contractor's carrying out of his
duties under this Agreement, or (ii) the breach by Contractor of any of his
obligations, agreements or duties under this Agreement. Diversified shall
indemnify and hold harmless Contractor from and against all Claims which he may
suffer from or incur and which arise or result primarily from (x) the operation
by Diversified or its affiliates or subsidiaries of their businesses, (y) the
breach or alleged breach by Diversified or its affiliates or subsidiaries of, or
their failure or alleged failure to perform under, any agreement to which any
one of them is a party, including, without limitation, any agreement relating to
the acquisition of any truck stop or other business or assets, or (Z) the breach
by Diversified of any of its obligations, agreements or duties under this
Agreement; provided, however, none of the foregoing result from or arise out of
the actions or inactions of Contractor.
16. Compliance with Law. Both parties hereto agree that if the manner of
payment to the Contractor, or payment by Diversified to the Contractor or any
other provision of this Agreement, becomes violative of any law, including, but
not limited to, federal or state taxation laws, rules or regulations, the
parties shall negotiate a revision in the terms of the Agreement such that the
purpose for the Agreement and the benefits contemplated to be obtained by each
shall be preserved to the greatest extent practicable. The parties further agree
that in the event that compliance with the law substantially precludes the
purposes for
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(Execution Copy)
which this Agreement has been made, then this Agreement may be terminated upon
written notice given by either party.
17. Duties as an officer of JALOU. Both parties acknowledge and agree that the
Consulting Services rendered by Contractor hereunder are in addition to, are
distinct from and shall not conflict with the duties of the Contractor in his
position as an officer and manager of JALOU.
18. Miscellaneous.
Negation of Agency. Nothing herein contained shall be deemed to create
an agency, joint venture or partnership relation between the parties
hereto and it is acknowledged that the parties hereto have only a
relationship of employer/independent contractor.
Construction. The language of this Agreement and of each and every
article, paragraph, section, term and/or provision of this Agreement,
shall in all cases, for any and all purposes and in any and all
circumstances, be construed as a whole according to its meaning and
not strictly for or against Diversified or Contractor, without regard
whatsoever to the identity or status of any person or persons who
drafted all or any portion of this Agreement.
Headings. The section headings used in this Agreement are intended
solely for convenience of reference and shall be given no effect in the
construction or interpretation of this Agreement.
Authority to Make Agreement. This Agreement is not valid or binding
until and unless executed by the Manager or duly authorized party of
both Diversified and Contractor.
Counterpart signatures. This Agreement may be executed in more than one
counterpart each of which when taken together shall constitute one and
the same original.
Assignment. This Agreement and the rights, duties and obligations
hereunder may not be assigned by either party. Notwithstanding the
foregoing. Diversified may assign all of its interests, rights and
obligations hereunder to any of its parent entities, affiliates and/or
subsidiaries or any other entity which is the surviving entity following
a merger with Diversified.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
Agreement Date, intending to be bound by its terms and conditions.
DIVERSIFIED:
DIVERSIFIED OPPORTUNITIES GROUP
LTD., an Ohio limited liability company
By: JACOBS ENTERTAINMENT, LTD.,
an Ohio limited liability company, its
manager
/s/ JEFFREY P. JACOBS
By:_________________________________________
Jeffrey P. Jacobs, Manager
CONTRACTOR:
/s/ IAN M. STEWART
By:_________________________________________
Ian M. Stewart