CONSULTING AGREEMENT
Exhibit
10.4
This
Agreement ("Agreement")
is
made and effective as of July 1, 2006 ("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) the services described in Consultant's proposal
to
Client dated June 28, 2004, (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 concerning the satisfaction of the conditions of approval
involving the property that were specified by Sonoma County in connection with
its approval in May 2006 of modifications (the “Land
Use Modifications”)
to the
existing land use entitlements on the Company’s north property, 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.
a. Initial
Payment.
Within
two (2) business days after the Effective Date, Client shall pay to Consultant
the sum of $100,000.00, in
consideration primarily for Consultant’s previous services in connection with
obtaining the Land Use Modifications, and also for the Services to be performed
by Consultant.
b. Additional
Payment. In
addition, provided that Client has not terminated this Agreement by reason
of
Consultant’s uncured material breach as set forth in Section 5(d) below, Client
shall pay to Consultant the additional sum of $50,000 upon the achievement
(as
reasonably and in good faith determined by the Chief Executive Officer of
Client) during the term of this Agreement (or within one year thereafter) of
the
land use entitlement conditions (the “Land
Use Entitlement Conditions”)
set
forth on Exhibit
A
attached
hereto (with Client updating such exhibit from time to time to reflect the
completion or satisfaction or the various conditions described therein). Such
payment shall be made within thirty (30) days following such satisfaction of
the
Land Use Entitlement Conditions. Client acknowledges and agrees with Consultant
that Client intends to use all commercially reasonable efforts during the term
of this Agreement to satisfy the Land Use Entitlement Conditions.
c. 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.
d. 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.
e. 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.
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.
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, 2007.
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. Termination of the Agreement pursuant to this Section
5(b) shall not terminate the Client’s payment obligations to Consultant under
Section 2(b).
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(d), 2(e), 3, 4, 5(f), 6 and 7 shall survive
expiration or termination of the Agreement for any reason.
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.
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 agreement dated August 10, 2005, 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, 2006. 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 Agreement dated as of August 10, 2005, by and between Consultant
and
the Company for payment of any amounts upon the occurrence of a transaction
involving 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.
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; Assignment. This
Agreement shall be binding upon the heirs, successors and assigns of the
parties, and Client may assign this Agreement without Consultant’s consent in
connection with any sale of all or substantially all of the Company’s business
or assets, whether by merger, consolidation, sale of assets, sale or stock,
or
other similar transaction. Without limiting the foregoing, in connection with
any Merger or Sale (as defined below), if the surviving or acquiring entity
in
the Merger or Sale (the “Acquiror”)
does
not agree to assume this Agreement and all of Client’s obligations hereunder,
then this Agreement shall terminate effective upon the closing of such Merger
or
Sale and the Acquiror or the Client shall immediately pay to Consultant the
amount specified in Section 2(b) above, regardless of whether the Land Use
Entitlement Conditions have been satisfied. For purposes of this Agreement,
“Merger
or Sale”
means
(i) the sale of all or substantially all of Client’s property, (ii) the sale of
all or substantially all of the Client’s existing north property that was the
subject of the Land Use Modification or (iii) the sale of the business of Client
by means of a merger, consolidation, tender offer or similar transaction in
which the shareholders of Client immediately before the closing of the
transaction do not, immediately after the closing of the transaction, own at
least a majority of the voting power and equity securities of the surviving
or
acquiring company (or its parent).
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.
[Remainder
of page intentionally left blank]
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 X. Xxxxxxx | ||
Xxxxx
X. Xxxxxxx,
President
|
Client: | ||
|
|
|
Date: | SONOMAWEST HOLDINGS, INC. | |
By: /s/ Xxxxxx X Xxxxxxxxx | ||
Xxxxxx
X Xxxxxxxxx,
CEO
|
Exhibit
A
Condition
#
|
Description
|
Due
Date
|
Date
condition completed to PRMD
|
1
|
Water
testing requirement
|
9/28/2006
|
Completed
|
2
|
Application
for waste discharge requirement
|
Now
|
Completed
|
3
|
Odor
monitoring for domestic system
|
9/28/2006
|
Completed
|
4
|
Financial
Assurance Plan
|
9/28/2006
|
In
Process
|
5
|
Operations
Maintenance Manual for waste water
|
9/28/2006
|
Completed
|
6
|
Operational
permit for domestic and monthly report
|
9/28/2006
|
Completed
|
7
|
Mandatory
Closure Agreement
|
9/28/2006
|
In
Process
|
8
|
Mosquito
and Vector Plan
|
9/28/2006
|
Completed
|
9
|
Class
II Waste wastewater operator for domestic system
|
Now
|
Completed
|
10
|
Testing
of the Backflow prevention device
|
May
|
Completed
|
11
|
Winery
Trip Generation form
|
Upon
completion
|
Completed
|
12
|
Permitted
Uses
|
3/28/2006
|
Completed
|
13
|
Performance
Std. and Annual tenant/wastewater report
|
3/1/2007
|
Completed
|
14
|
Lighting
plan
|
9/28/2006
|
In
Process
|
15
|
Lighting,
landscaping, sign and parking plan
|
9/28/2006
|
In
Process
|
16
|
Tenant
acknowledgement of crushing activities
|
No
due date but want to submit by 5/30/06
|
Completed
|
17
|
Truck
route plan and tenant acknowledgement
|
No
due date
|
Completed
|
18
|
Truck
route/outdoor activities between 10pm-7am
|
No
due date
|
Completed
|
19
|
$1,285
check for Clerk filing and Neg Declaration
|
4/4/2006
|
Completed
|
20
|
Lot
line merger
|
9/28/2006
|
Completed
|