Contract
Exhibit
10.5
This
Agreement ("Agreement")
is made and effective as of July 1, 2008 ("Effective
Date") by and between SONOMAWEST HOLDINGS, INC. a Delaware corporation
("Client")
and XXXXXXX INVESTMENT COMPANY ("Consultant").
1. Services and
Deliverables. Consultant will perform (i) any strategic services related
to the Client’s current and future portfolio of real estate assets, including
possible acquisitions of additional real estate, (ii) services that Client
reasonably requests relating to the Client’s properties, including without
limitation assisting Client concerning interactions with Sonoma County zoning
and land use authorities, and (iii) such other services as Client and Consultant
may agree upon (collectively, the "Services").
During the term of this Agreement, Consultant will make Xxxxx X. Xxxxxxx
available to perform the Services. Consultant will determine the method, details
and means of performing the Services.
2. Fees and
Payment.
a. Hourly Fee. In consideration for the
Services to be performed by Consultant, Client will pay to Consultant an hourly
fee of $250.00 per hour for all hours rendered on behalf of Client. Client and
Consultant agree that only the Chief Executive Officer of Client (the “CEO”) is
authorized to request or authorize Services, and Consultant shall not undertake
Services at the request of any other employee of Client without the prior
written approval of the CEO. Client will pay Consultant for its services within
fifteen (15) days of delivery of a monthly invoice. Any amounts that Client may
pay to Consultant for time spent in connection with litigation-related
activities (such as in connection with testimony, depositions or expert witness
activity) will be subject to a separate arrangement and rates mutually agreed
upon between Client and Consultant.
b. No Additional
Payments. No
additional amounts shall be payable in connection with performance of the
Services or in connection with any transaction involving a sale of any of
Client’s properties, a sale of Client’s business (whether by merger, sale of
assets or other transaction) or a transaction that results in Client no longer
being a public company.
c. Deductions and
Withholdings. All amounts payable or
which become payable under any provision of this Agreement will be subject to
any deductions and withholdings that Client reasonably determines are necessary
or required by law.
3. Independent Consultant
Status. It is the express intention of the parties that Consultant is an
independent consultant and not an employee, agent, joint venturer or partner of
Client. Nothing in this Agreement will be interpreted or construed as creating
or establishing the relationship of employer and employee between Client and
Consultant, or any employee or agent of Consultant.
1
4. Additional
Obligations of Consultant.
a. Equipment. Consultant will supply
all tools and instrumentalities required to perform the Services under this
Agreement. Consultant is not required to purchase or rent any tools, equipment
or services from Client.
b. Costs and
Expenses. Consultant is
responsible for all costs and expenses incident to performing services
hereunder, including but not limited to costs of equipment provided by
Consultant, fees, fines, licenses, bonds, or taxes required of or imposed
against Consultant and its assistants, if any, as costs of doing business.
Client is not responsible for any expenses incurred by Consultant in performing
services for Client, except for those reasonable out-of-pocket travel expenses
and miscellaneous expenses incurred by Consultant in performing the Services
under this Agreement.
c. Assistants;
Indemnification. Consultant may, at its
option and at its own expense, employ such assistants as Consultant deems
necessary to perform the Services. Consultant assumes full and sole
responsibility for the payment of all compensation and expenses of these
assistants and for any state and federal income tax, unemployment insurance,
Social Security, disability insurance and other applicable withholdings of such
assistants. Consultant will provide workers' compensation insurance coverage for
its employees and agents, and agrees to hold harmless and indemnify Client for
any and all claims arising out of any injury, disability, or death of any of
Consultant's employees or agents. Consultant will indemnify and hold Client
harmless against any and all liability imposed or claimed, including attorneys'
fees and other legal expenses, arising directly or indirectly from any act or
failure to act of Consultant or Consultant's assistants, employees or agents,
including all claims relating to injury or death of any person or damage to
property.
d. Compliance With Client
Policies. Consultant specifically
agrees to abide by Client's standards and rules of conduct and general operating
procedures while on Client's premises or otherwise while performing services
pursuant to this Agreement.
e. No Assignment By
Consultants. Consultant may not
assign any duties or obligations under this Agreement without Client's express
written consent.
f. Independent
Contractor. Consultant acknowledges
that, as he is an independent consultant and not an employee, he is responsible
for paying all required state and federal taxes. In particular, Client will not:
(i) withhold FICA (Social Security) from Consultant's payments; (ii) make state
or federal unemployment insurance contributions on Consultant's behalf; (iii)
withhold state or federal income tax from payment to Consultant; (iv) make
disability insurance contributions on behalf of Consultant; (v) obtain workers'
compensation insurance on behalf of Consultant.
g. No Participation in Employee
Benefit Plans. Consultant further
acknowledges that he is not eligible for participation in any benefit plan or
program available to Consultant's employees, and that the fee for services has
been established in recognition of Consultant being responsible for maintaining
such benefit coverage as it deems appropriate.
2
5. Term and
Termination.
a. Terms. This Agreement begins on
the Effective Date and continues until the earlier to occur of (i) the mutual
written agreement of Consultant and Client to terminate the Agreement; (ii)
termination in accordance with the provisions set forth below; or (iii) June 30,
2009.
b. Bankruptcy,
Insolvency. Either party may
terminate this Agreement upon notice to the other party if a court having
jurisdiction shall enter a decree or order for relief in respect of the other
party in an involuntary case under any applicable bankruptcy, insolvency or
other similar law now or hereinafter in effect, or appoint a receiver,
liquidator, assignee, custodian, trustee, sequestrator (or similar official) for
that other party or for any substantial part of that party’s property, or order
the winding up or liquidation of its affairs, and such decree or order shall
remain unstayed and in effect for a period of sixty (60) consecutive business
days; or if the other party shall commence a voluntary case under any applicable
bankruptcy, insolvency or other similar law now or hereafter in effect, or
consent to the entry of an order for relief in any involuntary case under any
such law, or consent to the appointment of or taking possession by a receiver,
liquidator, assignee, trustee, custodian, sequestrator (or similar official) for
any substantial part of that other party’s property, or make any general
assignment for the benefit of creditors, or shall take any action in furtherance
of any of the foregoing.
c. Personnel. Client may terminate
this Agreement upon notice to Consultant if Xxxxx X. Xxxxxxx becomes no longer
available to perform the Services.
d. Material
Default. If
Consultant materially defaults in the performance of the Agreement or materially
breaches any of the provisions and does not cure the default or breach within
ten (10) days of delivery of a notice thereof from Client to Consultant, Client
at its sole option may terminate the Agreement by delivering a notice to
Consultant. For purposes of this section, material default or breach includes,
but is not limited to: (i) failure or refusal to perform in any material respect
the Services when and as contemplated; (ii) repeated failure to provide timely
invoices with appropriate descriptions and approved expenses as provided herein;
and (iii) negligence, misconduct, an act of dishonesty, or taking an action or
conducting itself in a manner contrary or inimical to Client's best business
interests or reputation.
e. Payment
Defaults. If
Client fails to pay Consultant fees or payment as provided herein and fails to
make any required payment within ten (10) days after delivery by Consultant to
Client of a late payment notice, Consultant at its option may terminate the
Agreement by delivering a notice to Client.
f. Return of
Materials. Upon termination of this
Agreement for any reason, Consultant shall return to Client all materials of any
kind in Client’s possession relating to the Services or Client.
3
g. Survival. The provisions of
Sections 2(b), 2(c), 3, 4, 5(f), 6 and 7 shall survive expiration or termination
of the Agreement for any reason.
6. Confidentiality, Trade Secrets,
Work for Hire and Non-Competition.
a. Nondisclosure. Consultant recognizes
that during the term of this Agreement, and in preparation therefore, he will be
privy to Client's trade secrets or proprietary or other confidential or
privileged information (“Confidential
Information”). Consultant agrees to keep all Confidential Information in
strictest confidence and not to disclose it except for legitimate purposes of
Client and with Client's express written consent, either during the term of this
Agreement or at any time thereafter.
b. Delivery of Materials on
Termination. On termination of this
Agreement, Consultant will promptly deliver to Client all equipment belonging to
Client, all code and computer programs of whatever nature, as well as all
manuals, letters, reports, price lists, customer lists, sales information,
analyses, recommendations, and all copies thereof, and all other materials of a
confidential nature regarding Client's business that are in its possession or
control. Consultant agrees that the remedy at law for any breach of the
foregoing will be inadequate, and that Client is entitled to seek appropriate
injunctive relief in addition to any remedy at law in case of any such
breach.
c. Work For Hire; Assignment of
Rights. Consultant agrees that
all work Consultant performs pursuant to this Agreement, and all work which
relates at the time of conception or reduction to Client's business, and all
work which results from work Consultant performs for Client, whenever performed
during the term of this Agreement, and whether or not utilizing Client's
equipment, supplies, facilities or trade secret information, is considered work
made for hire for Client as such term is defined in section 101 of the Copyright
Act of 1976 and belongs to Client. Consultant further agrees that in the event
that this Agreement is determined not to be a work for hire agreement,
Consultant will assign to Client any and all rights retained by Consultant. All
Inventions (as defined below) conceived of or made by Consultant or Agent,
either alone or with others, during the term of this Agreement, which (i) are
developed, in whole or part, in reliance upon or any of the Client equipment,
supplies, facilities or Confidential Information, or (ii) relate to the business
of the Client or the Client actual or demonstrably anticipated research or
development, or (iii) result from any work performed by Consultant for the
Client pursuant to this Agreement, are and shall be the sole property of the
Client, whether as “works for hire” or otherwise. Consultant hereby irrevocably
assigns and transfers to the Client all of its right, title and interest in and
to all such Inventions, and Consultant agrees not to disclose any such
Inventions to others without the express written consent of Client. Consultant
agrees to execute such documents as Client may reasonably request reflecting
such assignment and transfer. For the purpose of this Agreement, an Invention is
deemed to have been made during the term of the Agreement if, during such
period, the Invention was conceived or first actually reduced to practice.
Notwithstanding anything to the contrary contained herein, this Section shall
not apply to any Invention which fully qualifies under Section 2870 of the
California Labor Code, to the extent that such section applies to the activities
of Consultant. For the purposes of this Section, “Invention”
means any new formulae, know-how, techniques, applications, combinations,
machines, methods, processes, algorithms, routines, subroutines, apparatuses,
compositions of matter, compounds, designs, uses, plans or configurations of any
kind, discovered, conceived, developed, made or produced, or any improvements of
them, and shall not be limited to the definition of an invention contained in
the United States patent laws.
4
7. General
Provisions.
a. Notices. Any notices given by
either party may be effected by personal delivery in writing or by mail,
registered or certified, postage prepaid, or by facsimile transmission or by
electronic submission, if receipt is confirmed in a commercially acceptable
manner. Mailed notices are to be addressed to the parties at the addresses
below:
|
If
to Client:
|
SonomaWest
Holdings, Inc.
0000
Xxxxxxx 000, Xxxxx
Xxxxxxxxxx,
XX 00000-0000
|
||
|
Attn:
Chief Executive Officer
|
|||
|
If
to Consultant:
|
Xxxxxxx
Investment Company
|
||
|
c/o
Xxxxx X. Xxxxxxx
|
|||
|
0000
X Xxxxxx
|
|||
|
Xxxxxxxxxx,
XX 00000
|
Notices
will be deemed delivered: (a) upon receipt if hand delivered; (b) three (3) days
after mailing if sent by mail; and (c) one (l) business day after transmission
if sent by telecopier (with electronic acknowledgment of successful
transmission) or express courier, to the addresses set forth above, or such
other addresses as any party may notify the other parties in accordance with
this Section.
b. Entire
Agreement. This Agreement
supersedes any and all agreements, oral or written, between the parties with
respect to rendering services by Consultant for Client, and contains all
agreements between the parties. This Agreement supersedes the consulting
agreements dated August 10, 2005, July 1, 2006 and July 1, 2007, between Client
and Consultant, and is intended by the parties to govern all services provided
and to be provided by Consultant to Client on and after July 1, 2008. Without
limiting the foregoing, Consultant agrees that neither Consultant nor any of its
officers, directors or owners shall have any claim for payment of any amounts
described in the Consulting Agreements dated as of August 10, 2005, July 1, 2006
and July 1, 2007, by and between Consultant and the Company for payment of any
amounts contemplated therein, including upon the occurrence of a transaction
involving the sale of any of the Company’s properties or as a result of which
the Company is no longer a public company. Any modification of this Agreement is
effective only if in writing signed by the party to be charged.
c. Governing Law; Consent to
Jurisdiction. The provision of this
Agreement shall be governed by and interpreted in accordance with the laws of
the State of California, notwithstanding any application of any doctrine of
conflicts of laws. Each party irrevocably consents to the exclusive jurisdiction
and venue of the state and federal courts located in Sacramento, California, in
connection with any action to enforce the provisions of this Agreement, to
recover damages or other relief for breach or default of this Agreement, or
otherwise arising under or by reason of this Agreement, and agrees that service
of process in any such action may be effected by the means provided in this
Agreement for delivery of notices.
5
d. Counterparts. This Agreement may be
executed in one or more counterparts, each of which shall constitute an original
but all of which taken together shall constitute one and the same
agreement.
e. Successors and
Assigns. This Agreement shall be
binding upon the heirs, successors and assigns of the parties.
f. Severability. If any provision
contained in this Agreement is determined to be void, invalid or unenforceable
in whole or in part for any reason whatsoever, it shall be enforced and given
effect to the extent possible, such determination shall not affect or impair the
validity of any other provision herein, nor the validity of this Agreement as a
whole, and the remaining provisions will continue in full force provided that
the essential purposes of the Agreement can be achieved without the invalid
provision
g. Amendment. The provisions of this
Agreement may be modified at any time by agreement of the parties. Any such
agreement hereafter made shall be ineffective to modify this Agreement in any
respect unless in writing and signed by the parties against whom enforcement of
the modification or discharge is sought. Any of the terms or conditions of this
Agreement may be waived in writing at any time by the party entitled to the
benefit thereof, but no such waiver shall affect or impair the right of the
waiving party to require observance, performance or satisfaction either of that
term or condition as it applies on a subsequent occasion or of any other term or
condition.
IN
WITNESS WHEREOF, this Consulting Agreement has been entered into as of the date
and year first above written.
|
Consultant:
|
||
|
|
XXXXXXX
INVESTMENT COMPANY
|
|
|
By: /s/ Xxxxx
Xxxxxxx
|
||
|
Xxxxx
X. Xxxxxxx, President
|
||
|
Client:
|
||
|
Date: July 29,
0000
|
XXXXXXXXXX
XXXXXXXX, INC.
|
|
|
By: /s/ Xxxxxx X.
Xxxxxxxxx
|
||
|
Xxxxxx
X Xxxxxxxxx,
CEO
|
||
