CONSULTING AGREEMENT
Exhibit
10.5
This
Agreement ("Agreement") is made and effective as of
July 1, 2007 ("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 $225.00 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.
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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.
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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, 2008.
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.
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.
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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.
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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:
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If
to Client:
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SonomaWest
Holdings, Inc.
0000
Xxxxxxx 000, Xxxxx
Xxxxxxxxxx,
XX 00000-0000
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Attn:
Chief Executive Officer
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If
to Consultant:
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Xxxxxxx
Investment Company
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c/o
Xxxxx X. Xxxxxxx
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0000
X Xxxxxx
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Xxxxxxxxxx,
XX 00000
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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 and July 1, 2006, 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, 2007. 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 and July 1, 2006, 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.
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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.
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Consultant:
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XXXXXXX
INVESTMENT COMPANY
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By:
/s/ Xxxxx X.
Xxxxxxx
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Xxxxx
X. Xxxxxxx, President
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Client:
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Date:
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SONOMAWEST
HOLDINGS, INC.
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By:
/s/ Xxxxxx X.
Xxxxxxxxx
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Xxxxxx
X Xxxxxxxxx, CEO
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