Exhibit 10.5
CONSULTING
AGREEMENT
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 BUGATTO 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 David J. Bugatto 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.
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.
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) consec
