Exhibit 10.4
CONSULTING AGREEMENT
This Consulting Agreement ("Agreement") is made effective as of August
1, 2004, by and between SonomaWest Holdings, Inc. of 2064 Highway 116 North,
Sebastopol, CA 95472-2662, and Thomas R. Eakin d.b.a. Eakin Consulting, of 4612
Morris Court E, Santa Rosa, California 95405.
In this Agreement, the party who is contracting to receive services
shall be referred to as "SWH", and the party who will be providing the services
shall be referred to as "Eakin". Eakin has a background in Financial Management
and is willing to provide consulting services to SWH based on this background.
SWH desires to have services provided by Eakin.
Now therefore, the parties agree as follows:
1. DESCRIPTION OF SERVICES. Beginning on August 1, 2004, Eakin will
provide consulting services (collectively, the "Services") in the area of
financial management and related management matters, specifically Eakin will
perform the duties generally undertaken by a chief financial officer treasurer
of a corporation; provided however, that Eakin shall report directly to Roger S.
Mertz, Chairman of the Board of Directors of SWH. The Board of Directors of SWH
shall elect Eakin Chief Financial Officer and Eakin shall have the authority to
act for or on behalf of the corporation, which is usually held by a person
holding the office of Chief Financial Officer. Should Eakin reasonably determine
that any project or projects Eakin is requested to work on fall outside the
scope of the duties generally undertaken by a chief financial officer of a
corporation, Eakin shall notify Mr. Mertz of such determination and Eakin may
reject that project or projects without breaching this Agreement. Mr. Mertz and
Eakin shall use their respective commercially reasonable best efforts to resolve
any disagreement with respect to whether or not the specific project or projects
fall within the scope of the services to be performed by Eakin.
2. PERFORMANCE OF SERVICES. The manner in which the Services are to be
performed and the specific hours to be worked by Eakin shall be determined by
Eakin. SWH will rely on Eakin to work as many hours as may be reasonably
necessary to fulfill Eakin's obligations under this Agreement.
3. PAYMENT. SWH will pay a fee to Eakin for the Services as set forth
in Schedule A, which is attached hereto and incorporated herein by this
reference. SWH will reimburse Eakin for any out of pocket expenses incurred in
the provision of Services hereunder. Eakin will invoice SWH approximately every
two weeks for consulting and expenses performed and/or incurred in the fourteen
(14) day period prior to or through the date of invoice, or for such longer
period as may have passed since the date of the last invoice. Each invoice shall
be due upon receipt: provided however, that payment shall be considered timely
if paid within five (5) days of the date of invoice.
4. SUPPORT SERVICES. SWH will provide sufficient office space at its
executive offices in 2064 Highway 116 North, Sebastopol, CA (or at such future
Sonoma County, California executive offices as SWH may occupy) for use by Eakin
in performing the Services hereunder. SWH shall direct its employees to
cooperate with and render assistance to Eakin in furtherance of the completion
of the Services.
5. TERM/TERMINATION. This Agreement shall continue in effect until
July 31, 2005 unless terminated sooner pursuant to the following provision of
this Paragraph 5. This Agreement may be terminated by either party upon thirty
(30) days prior written notice to the other party. A termination of this
agreement shall automatically terminate Eakin as Chief Financial Officer of SWH.
6. RELATIONSHIP OF PARTIES. It is understood by the parties that Eakin
is an independent contractor with respect to SWH, and not an employee of SWH.
SWH will not provide fringe benefits, including health insurance benefits, paid
vacation, or any other employee benefit, for the benefit of Eakin; provided
however that Eakin shall be entitled to receive such grants of options as the
Board of Directors may from time to time determine. Notwithstanding the
foregoing, SWH agrees to provide Eakin with a certified copy of the minutes of
the Board of Directors meeting at which Eakin is elected Chief Financial Officer
and of any subsequent meeting in which he is again so elected. In addition, as
material consideration to Eakin for his performance of the Services hereunder
SWH agrees that at all times during the term of this Agreement, SWH will have
and maintain a policy of Directors & Officers insurance which provides coverage
for Eakin in an amount reasonably satisfactory to Eakin. Upon request SWH shall
provide Eakin with proof of such coverage.
7. LIMITATION OF LIABILITY AND INDEMNIFICATION. Eakin will not be
liable to SWH, or to anyone who may claim any right due to a relationship with
SWH, for any injuries due to any act(s) or omission(s) arising from or related
to this Agreement and/or the performance of the Services hereunder or on the
part of the employees or agents of Eakin unless the act(s) and/or omission(s)
are due to Eakin's gross negligence or willful misconduct. SWH will indemnify
and hold Eakin harmless from any obligations, costs, claims, judgments,
attorneys' fees, and attachments arising from, growing out of, or in any way
connected with the Services rendered to SWH under the terms of this Agreement,
unless Eakin is judged by a court of competent jurisdiction to have committed or
be guilty of gross negligence or willful misconduct.
8. INDEMNIFICATION. Eakin agrees to indemnify, defend and hold SWH
free and harmless from any obligations, costs, claims, judgments, attorneys'
fees, and attachments arising from, growing out of, or in any way connected with
the Services rendered to SWH the terms of this Agreement, in any and all cases
in which Eakin has been judged by a court of competent jurisdiction to have
committed or be guilty of gross negligence or willful misconduct.
9. ASSIGNMENT. Eakin's obligations under this Agreement may not be
assigned or transferred to any other person, firm, or corporation without the
prior written consent of SWH. SWH obligations under this Agreement may not be
assigned or transferred to any other person, firm, or corporation without the
prior written consent of Eakin.
-2-
10. CONFIDENTIALITY. SWH recognizes that Eakin will have the following
information: future plans, business affairs, financial data and projections and
other proprietary information (collectively, "Information") which are valuable,
special and unique assets of SWH and need to be protected from improper
disclosure. In consideration for the disclosure of the Information, Eakin agrees
that Eakin will not at any time or in any manner, either directly or indirectly,
use any Information for Eakin's own benefit, or divulge, disclose, or
communicate in any manner any Information to any third party without the prior
written consent of SWH. The confidentiality and limited use obligations set
forth above shall not apply to information, which Eakin can demonstrate:
(a) Was already in Eakin's possession prior to receipt of the same
from the SWH without an obligation to maintain its confidentiality; or
(b) Is now or becomes public information or otherwise generally
known to the public without violation of this Agreement; or
(c) Was received by Eakin without restriction from a third party
which was lawfully in possession of such information and was not in breach of
any agreement or any confidential relationship with SWH.
Disclosure of SWH Information is not prohibited if such disclosure is compelled
pursuant to legal proceeding or otherwise required by law and prior written
notice is given to SWH.
Eakin will protect the Information and treat it as strictly
confidential. A violation of this paragraph shall be a material breach of this
Agreement.
11. UNAUTHORIZED DISCLOSURE OF INFORMATION. If it appears that Eakin
has disclosed (or has threatened to disclose) Information in violation of this
Agreement, SWH shall be entitled to an injunction to restrain Eakin from
disclosing, in whole or in part, such Information, or from providing any
services to any party to whom such Information has been disclosed or may be
disclosed. SWH shall not be prohibited by this provision from pursuing other
remedies, including a claim for losses and damages except as is otherwise
provided in this Agreement.
12. CONFIDENTIALITY AFTER TERMINATION. The confidentiality provisions
of this Agreement shall remain in full force and effect after the termination of
this Agreement for a period of five (5) years from the date of such termination
13. RETURN OF RECORDS. Upon termination of this Agreement, Eakin shall
deliver all records, notes, data, memoranda, models, and equipment of any nature
that are in Eakin's possession or under Eakin's control and that are SWH
property or relate to SWH business.
14. NOTICES. All notices required or permitted under this Agreement
shall be in writing and shall be deemed delivered when delivered in person or
deposited in the United States mail, postage prepaid, addressed as follows:
-3-
If for SWH: Roger S. Mertz
Chairman of the Board
SonomaWest Holdings, Inc.
2064 Highway 116
North Sebastopol, CA 95472-2662
If for Eakin: Thomas R. Eakin
Eakin Consulting
PO Box 2725
4612 Morris Court, E
Santa Rosa, California 95405-0725
Such address may be changed from time to time by either party by providing
written notice to the other in the manner set forth above.
15. ENTIRE AGREEMENT. This Agreement contains the entire agreement of
the parties and there are no other promises or conditions in any other agreement
whether oral or written. This Agreement supersedes any prior written or oral
agreements between the parties.
16. AMENDMENT. This Agreement may be modified or amended only by an
amendment in writing signed by both parties.
17. SEVERABILITY. If any provision of this Agreement shall be held to
be invalid or unenforceable for any reason, the remaining provisions shall
continue to be valid and enforceable. If a court finds that any provision of
this Agreement is invalid or unenforceable, but that by limiting such provision
it would become valid and enforceable, then such provision shall be deemed to be
written, construed, and enforced as so limited.
18. WAIVER. The failure of either party to enforce any provision of
this Agreement shall not be construed as a waiver or limitation of that party's
right to subsequently enforce and compel strict compliance with every provision
of this Agreement.
19. APPLICABLE LAW. This Agreement shall be governed by the laws of the
State of California.
20. ATTORNEYS' FEES. If any legal action is brought to enforce or
interpret the provisions of this Agreement, the prevailing party will be
entitled to reasonable attorneys' fees, in addition to any other relief to which
that party may be entitled.
Executed at Santa Rosa, California, on July 28, 2004.
"SWH":
SonomaWest Holdings, Inc.
By: /s/ ROGER S. MERTZ
----------------------------------------
Roger S. Mertz
Chairman of the Board of Directors
-4-
"Eakin"
Thomas R. Eakin, d.b.a. Eakin Consulting
By: /s/ THOMAS R. EAKIN
---------------------------------------
Thomas R. Eakin
-5-
SCHEDULE A
TO CONSULTING AGREEMENT DATED AUGUST 1, 2004
EAKIN CONSULTING
FINANCIAL & MANAGEMENT CONSULTING
P.O. Box 2725
SANTA ROSA, CA 95405-0725
PHONE AND FAX: (707) 539-5627
CELL: (707) 483-1672
E-MAIL: tom@eakinconsulting.com
CONSULTING FEE SCHEDULE
August 1, 2004
HOURLY FEES
o Financial or management consulting $115.00/hour.
o Use of outside consultants billed at cost plus 10%, provided that any use
of an outside consultant must first be approved by SWH.
o Legal proceedings (testimony in deposition, trials and
arbitration/mediation hearings) are billable at 1.5 times the standard rate
per hour.
TRAVEL
o Travel inside Sonoma County - Non-chargeable.
o Travel outside Sonoma County - Travel time billed at one-half the
consulting rate. Over-night travel - Daily rate to be mutually agreed upon
in advance.
o Mileage outside Sonoma County is billed at the mileage rate established by
the Internal Revenue Service.
o Out of pocket expenses billed at cost.
BILLINGS
o Invoices will be issued every two weeks.
o Minimum billing of four hours (in addition to travel time) for all required
on-site visits or meetings outside Sonoma County.
o Terms - Net five days from receipt.
Schedule A
-1-