Exhibit 10.5
CONSULTING AGREEMENT
This Agreement ("Agreement") is made and effective as of July 1, 2004
("Effective Date") by and between SONOMAWEST HOLDINGS, INC. a California
corporation ("Client") and XXXXXXX INVESTMENT COMPANY ("Consultant").
1. SERVICES AND DELIVERABLES. Consultant will perform the services
described in Consultant's proposal to Client dated June 28, 2004 and such other
services as Client and Consultant shall agree upon ("Services"). Consultant will
determine the method, details and means of performing the Services. This
Agreement supercedes the agreement dated July 17, 2001, as amended, between
Client and Consultant's principal, Xxxxx X. Xxxxxxx, and is intended by the
parties to govern all services provided and to be provided by Consultant to
Client on and after July 1, 2004.
2. FEES AND PAYMENT. 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. In addition, in the event either of
the Company's Sonoma County properties are sold during the term hereof, upon
closing Consultant will be paid a fee of 2% of the gross sales price regardless
of whether or not a broker is involved. Client will pay Consultant for its
services within fifteen (15) days of receiving a monthly invoice.
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.
4. ADDITIONAL OBLIGATIONS OF CONSULTANT.
a. 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. 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. 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. 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. Consultant may not assign any duties or obligations under this
Agreement without Client's express written consent.
f. 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. 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.
5. TERM AND TERMINATION.
a. This Agreement begins on the Effective Date and continues
until the earlier of (i) written notice of termination by either party; (ii)
termination in accordance with the provisions set forth below; or (iii) June 30,
2005.
b. This Agreement will terminate automatically on any of the
following events: (i) bankruptcy or insolvency of either party; (ii) sale or
discontinuance of the business of either party; (iii) death of either party.
c. If Consultant defaults in the performance of the Agreement or
materially breaches any of the provisions, Client at its sole option may
terminate the Agreement at any time on written notice to Consultant. For
purposes of this section, material breach includes, but is not limited to: (i)
failure or refusal to perform the Services when and as contemplated; (ii)
failure to provide timely invoices with appropriate descriptions and approved
expenses as provided herein; (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.
d. If Client fails to pay Consultant fees or payment as provided
herein, Consultant at its option may terminate the Agreement.
6. CONFIDENTIALITY, TRADE SECRETS, WORK FOR HIRE AND NON-COMPETITION.
a. Consultant recognizes that during the term of this Agreement,
and in preparation therefore, he will be privy to many of Client's trade secrets
or proprietary or other confidential or privileged information. Consultant
agrees to keep all such 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. 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. Consultant agrees that all work he 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 he 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.
7. GENERAL PROVISIONS.
a. 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: Xxxxx X. Xxxxx, Chairman
If to Consultant: Xxxxxxx Investment Company
c/o Xxxxx X. Xxxxxxx
0000 Xx Xxxxx Xxx
Xxxxxxxxxx, XX 00000
Notices delivered personally are deemed communicated as of actual
receipt; mailed notices are deemed communicated as of two days after mailing.
b. 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. Any modification of this Agreement is effective
only if in writing signed by the party to be charged.
c. If any provisions in this Agreement are held by a court of
competent jurisdiction to be invalid, void or unenforceable, the remaining
provisions will continue in full force provided that the essential purposes of
the Agreement can be achieved without the invalid provision.
d. This Agreement is governed by and construed in accordance with
the laws of the state of California.
IN WITNESS WHEREOF, this Agreement has been entered into as of the date
and year first above written.
Consultant:
XXXXXXX INVESTMENT COMPANY
By: /s/ Xxxxx X. Xxxxxxx
---------------------------
Xxxxx X. Xxxxxxx, President
Client:
SONOMAWEST HOLDINGS, INC.
By: /s/ Xxxxx X. Xxxxx
---------------------------
Xxxxx X. Xxxxx, Chairman
