Document:

ex10-3.htm

    Exhibit
10.3

     

    THIS
NOTE AND THE SHARES OF COMMON STOCK ISSUABLE UPON CONVERSION OF THIS NOTE (THE
“SECURITIES”)
HAVE BEEN ACQUIRED FOR INVESTMENT PURPOSES ONLY AND MAY NOT BE TRANSFERRED UNTIL
(i) A REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
“ACT”) SHALL
HAVE BECOME EFFECTIVE WITH RESPECT THERETO OR (ii) RECEIPT BY THE COMPANY OF AN
OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY TO THE EFFECT THAT
REGISTRATION UNDER THE ACT IS NOT REQUIRED IN CONNECTION WITH SUCH PROPOSED
TRANSFER NOR IS IN VIOLATION OF ANY APPLICABLE STATE SECURITIES LAWS. THIS
LEGEND SHALL BE ENDORSED UPON ANY NOTE ISSUED IN EXCHANGE FOR THIS NOTE AND ANY
SECURITIES ISSUABLE UPON CONVERSION OF THIS NOTE (EXCEPT AS OTHERWISE PROVIDED
BELOW).

     

    1ST
AMENDED AND RESTATED

    CONVERTIBLE
PROMISSORY NOTE

     

    
      	
              $185,000.00

            	
              Effective
      September 23, 2008 

            

    

     

    FOR VALUE
RECEIVED, ACIES
Corporation, a Nevada Corporation (the “Company”),
having an address of 14 Wall Street, Suite 1620, New York, NY  10005,
hereby promises to pay to the order of Oleg Firer, the Chief
Executive Officer of the Company and/or his assigns (the “Holder”),
the aggregate principal amount of One Hundred and Eighty-Five Thousand Dollars
($185,000.00),
together with interest on the unpaid principal amount hereof, upon the terms and
conditions hereinafter set forth.

     

    
      
        
          
            	
                    1.

                  	
                    Loan
      Amount.  This
      1st Amended And Restated Convertible Promissory Note (this “Note”
      or “Promissory
      Note”) evidences the One Hundred and Eighty-Five Thousand Dollars
      ($185,000.00) which is owed by the Company to the Holder in connection
      with expenses paid by Holder on the Company’s behalf and/or reimburses for
      expenses paid which are owed by the Company to the Holder (hereinafter
      referred to as the “Loan”
      or the “Principal”),
      and amends, replaces and supersedes that certain Convertible Promissory
      Note entered into between the Company and Holder on or around September
      23, 2008.  The effective date of this Note is September 23,
      2008. 

                  
	 
      	 
      	 
      
	
                    2.

                  	
                    Payment
      Terms. 
      The Company promises to pay to Holder the balance of Principal, together
      with accrued and unpaid interest, on November 30,
      2009  (the “Maturity
      Date”), unless this Note is earlier prepaid as herein provided or
      earlier converted into Common Stock (as hereinafter defined) of the
      Company pursuant to Section 3 hereof.  All payments hereunder shall
      be made in lawful money of the United States of America.  Payment
      shall be credited first to the accrued interest then due and payable and
      the remainder to Principal.

                  
	 
      	 
      	 
      
	
                    3.

                  	
                    Interest.  Interest
      on the outstanding portion of Principal of this Note shall accrue at a
      rate of eighteen percent 18%) per annum.  All computations of
      interest shall be made on the basis of a 360-day year for actual days
      elapsed.  Such interest shall accrue and be paid upon the Maturity
      Date of the Loan.

                  

          

        

      

    

    

    
      
        
          
            	 
      	
                    a.

                  	
                    Notwithstanding
      any provision in this Note, the total liability for payments of interest
      and payments in the nature of interest, including all charges, fees,
      exactions, or other sums which may at any time be deemed to be interest,
      shall not exceed the limit imposed by the usury laws of the State of
      Florida or the applicable laws of the United States of America, whichever
      shall be higher (the “Maximum
      Rate”).

                  

          

        

      

    

    

    
      	 
      	
              b.

            	
              In
      the event the total liability for payments of interest and payments in the
      nature of interest, including, without limitation, all charges, fees,
      exactions or other sums which may at any time be deemed to be interest,
      which for any month or other interest payment period exceeds the Maximum
      Rate, all sums in excess of those lawfully collectible as interest for the
      period in question (and without further agreement or notice by, among or
      to the Holder the undersigned) shall be applied to the reduction of the
      principal balance, with the same force and effect as though the
      undersigned had specifically designated such excess sums to be so applied
      to the reduction of the principal balance and the Holder had agreed to
      accept such sums as a premium-free prepayment of principal; provided,
      however, that the Holder may, at any time and from time to time, elect, by
      notice in writing to the undersigned, to waive, reduce or limit the
      collection of any sums in excess of those lawfully collectible as interest
      rather than accept such sums as a prepayment of the principal
      balance.  The undersigned does not intend or expect to pay nor
      does the Holder intend or expect to charge, accept or collect any interest
      under this Note greater than the Maximum
Rate.

            

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      
        	 
      	
                c.

              	
                If
      any payment of principal or interest on this Note shall become due on a
      Saturday, Sunday or any other day on which national banks are not open for
      business, such payment shall be made on the next succeeding business
      day.

              

      

    

     

    
      
        
          	
                  4.

                	
                  Option
      to Convert this Note.

                	 
      

        

      

    

     

    
      
        
          
            
              
                
                  	 
      	
                          a.

                        	
                          At
      any time prior to the Maturity Date or prior to payment in full by the
      Company, Holder shall have the option to convert the unpaid principal
      balance of this Promissory Note, together with all accrued interest, into
      shares of common stock (the “Shares”
      and the “Common
      Stock”) of the Company  (the “Conversion
      Option”) at the conversion price of $0.02 per common share (the
      “Conversion
      Price”);

                        
	 
      	 
      	 
      
	 
      	
                          b.

                        	
                          In
      order to exercise this Conversion Option, the Holder shall surrender this
      Promissory Note to the Company, accompanied by written notice of its
      intentions to exercise this Conversion Option, which notice shall set
      forth the principal amount of this Promissory Note to be converted and
      shall be in the form of Exhibit A,
      attached hereto (“Notice
      of Conversion”). Within ten (10) business days of the Company’s
      receipt of the Notice of Conversion and this Note, the Company shall
      deliver or cause to be delivered to the Holder, written confirmation that
      the Shares have been issued in the name of the Holder;

                        
	 
      	 
      	 
      
	 
      	
                          c.

                        	
                          In
      the event of the exercise of the Conversion Option, Holder shall cooperate
      with the Company to promptly take any and all additional actions required
      to make Holder a stockholder of the Company including, without limitation,
      in connection with the issuance of the Shares, such representations as to
      financial condition, investment intent and sophisticated investor status
      as are reasonably required by counsel for the Company. Holder recognizes
      that the Shares issued upon conversion of this Note will constitute “restricted
      securities” under the Securities
      Act of 1933, as amended, and the resale of which will be subject to the
      limitations of such rules;

                        
	 
      	 
      	 
      
	 
      	
                          d.

                        	
                          The
      Company shall at all times take any and all additional actions as are
      necessary to maintain the required authority to issue the Shares to the
      Holder, in the event the Holder exercises its rights under the Conversion
      Option;

                        
	 
      	 
      	 
      
	 
      	
                          e.

                        	
                          Payment
      to Company prior to Holder’s delivery of a Notice of Conversion shall
      terminate Holder’s option to convert;

                        
	 
      	 
      	 
      
	 
      	
                          f.

                        	
                          Conversion Calculations: No
      Fractional Shares. Conversion calculations pursuant to this Section
      4 shall be rounded to the nearest whole share of Common Stock, and no
      fractional shares shall be issuable by the Company upon conversion of this
      Note. Conversion of this Note shall be deemed payment in full of this Note
      and this Note shall thereupon be cancelled;

                        
	 
      	 
      	 
      
	 
      	
                          g.

                        	
                          Anti-Dilution
      Protection. If the Company at any time or from time to time on or
      after the effective date of the  issuance of this Note (the
      “Original Issuance
      Date”) effects a subdivision of its outstanding Common Stock, the
      Conversion Price then in effect immediately before that subdivision shall
      be proportionately decreased, and conversely, if the Company at any time
      or from time to time on or after the Original Issuance Date combines its
      outstanding shares of Common Stock into a smaller number of shares, the
      Conversion Price then in effect immediately before the combination shall
      be proportionately increased;
and

                        

                

              

            

          

        

      

    

      

    
      
        
          	 
      	
                  h.

                	
                  No
      Encumbrances. All Shares of Common Stock which may be issued upon
      conversion of this Note will, upon issuance by the Company in accordance
      with the terms of this Note, be validly issued, free from all taxes and
      liens with respect to the issuance thereof (other than those created by
      the holders), free from all pre-emptive or similar rights and fully paid
      and non assessable.

                

        

      

    

    
      
        
        

      

      
        -2-

        
          

        

      

      
        
        

      

    

    
      
        	
                5.

              	
                Redemption.  This
      Note may be redeemed by the Company by payment of the entire Principal and
      interest outstanding under this Note in cash to Holder.  The Company
      must provide notice to Holder not less than thirty (30) days prior to
      affecting such redemption.  During the period from providing of such
      notice to Holder and the Company affecting the redemption, the Company may
      cancel such redemption by providing notice of such cancellation to
      Holder.

              

      

    

     

    
      
        	 
      	
                a.

              	
                This
      Note may be prepaid in whole or in part at any time without
      penalty.

              
	 
      	 
      	 
      
	 
      	
                b.

              	
                Any
      partial prepayment shall be applied to any principal Loan amount
      outstanding and shall not postpone the due date of any subsequent monthly
      installment or change the minimum amount of such monthly
      installment.

              
	 
      	 
      	 
      
	 
      	
                c.

              	
                The
      Holder may apply any and all amounts received by it for application to the
      Loan evidenced hereby in such order and manner as the Holder in its
      discretion may determine. The undersigned understands and agrees that if
      for any reason the undersigned fails to pay any amount due under this Note
      on or before the date when due, the Holder shall be entitled to damages
      for the detriment caused thereby, but that it is extremely difficult and
      impractical to ascertain the extent of such
  damages.

              

      

    

     

    
      
        	
                6.

              	
                Representations and Warranties
      of the Company. The Company represents and warrants to Holder as
      follows:

              

      

    

     

    
      
        	 
      	
                a.

              	
                The
      execution and delivery by the Company of this Note (i) are within the
      Company’s corporate power and authority, and (ii) have been duly
      authorized by all necessary corporate action.  Further, the
      undersigned is a duly authorized representative of the Company and has
      been authorized by a resolution of the board of Directors of the Company
      to exercise any and all documents necessary to effectuate the transaction
      contemplated hereby.

              
	 
      	 
      	 
      

      

    

    

    
      	 
      	
              b.

            	
              This
      Note is a legally binding obligation of the Company, enforceable against
      the Company in accordance with the terms hereof, except to the extent that
      (i) such enforceability is limited by bankruptcy, insolvency,
      reorganization, moratorium or other laws relating to or affecting
      generally the enforcement of creditors’ rights, and (ii) the availability
      of the remedy of specific performance or in injunctive or other equitable
      relief is subject to the discretion of the court before which any
      proceeding therefore may be
brought.

            

    

    
      
        
        

      

      
        -3-

        
          

        

      

      
        
        

      

    

    
      	 
      	 
      	 
      
	
              7.

            	
              Representations, Warranties and
      Covenants of Holder. Holder represents and warrants to the Company,
      and agrees, as follows:

            

    

      

    
      	 
      	
              a.

            	
              This
      Note and any Conversion Shares issuable upon conversion of this Note are
      being acquired by Holder for its own account for investment and not with a
      view to, or for sale in connection with, any distribution
      thereof.

            

    

     

    
      
        
          
            	 
      	 
      	 
      
	 
      	
                    b.

                  	
                    Holder
      is an “accredited
      investor” within the meaning of Rule 501 under the Securities
      Act.

                  
	 
      	 
      	 
      
	 
      	
                    c.

                  	
                    Holder
      has sufficient knowledge and experience in financial and business matters
      and is capable of evaluating the risks and merits of Holder’s investment
      in the Company; Holder believes that Holder has received or had access to
      all information Holder considers necessary or appropriate to make an
      informed investment decision with respect to this Note; and Holder is able
      financially to bear the risk of losing Holder’s full investment in this
      Note.

                  
	 
      	 
      	 
      
	 
      	
                    d.

                  	
                    Holder
      understands that this Note and any Shares converted pursuant hereto have
      not been registered under the Securities Act or registered or qualified
      under any the securities laws of any state or other jurisdiction, are
      “restricted securities,”
      and cannot be resold or otherwise transferred unless they are registered
      under the Securities Act, and registered or qualified under any other
      applicable securities laws, or an exemption from such registration and
      qualification is available. Prior to any proposed transfer of this Note or
      any Shares, Holder shall, among other things, give written notice to the
      Company of its intention to effect such transfer, identifying the
      transferee and describing the manner of the proposed transfer and, if
      requested by the Company, accompanied by (i) investment representations by
      the transferee similar to those made by Holder in this Section 7 and (ii) an opinion of counsel
      satisfactory to the Company to the effect that the proposed transfer may
      be effected without registration under the Securities Act and without
      registration or qualification under applicable state or other securities
      laws. Each certificate for any Shares shall bear a legend to the foregoing
      effect.

                  
	 
      	 
      	 
      
	 
      	
                    e.

                  	
                    The
      Holder has read and reviewed the Company’s latest periodic and current
      report filings on the Securities and Exchange Commission’s EDGAR webpage
      at www.sec.gov,
      including the risk factors, results of operations and financial statements
      included therein;

                  

          

        

      

    

    

    
      
        
          
            
              	
                      8.

                    	
                      Certain
      Waivers by the Company. 
      Except as expressly provided otherwise in this Note, the Company and every
      endorser or guarantor, if any, of this Note waive presentment, demand,
      notice, protest and all other demands and notices in connection with the
      delivery, acceptance, performance, default or enforcement of this Note,
      and assent to any extension or postponement of the time of payment or any
      other indulgence, to any substitution, exchange or release of collateral
      available to Holder, if any, and to the addition or release of any other
      party or person primarily or secondarily liable.

                    
	 
      	 
      
	
                      9.

                    	
                      Assignment
      by Holder.  If
      and whenever this Note shall be assigned and transferred, or negotiated,
      including transfers to substitute or successor trustees, the holder hereof
      shall be deemed the “Holder”
      for all purposes under this Note.

                    
	 
      	 
      
	
                      10.

                    	
                      Amendment.  This
      Note may not be changed orally, but only by an agreement in writing,
      signed by the party against whom enforcement of any waiver, change,
      modification or discharge is
sought.

                    

            

          

        

      

    

    
      
        
        

      

      
        -4-

        
          

        

      

      
        
        

      

    

    
      
        
          	
                  11.

                	
                  Costs
      and Fees.  Anything
      else in this Note to the contrary notwithstanding, in any action arising
      out of this Agreement, the prevailing party shall be entitled to collect
      from the non-prevailing party all of its attorneys’ fees.  For
      the purposes of this Note, the party who receives or is awarded a
      substantial portion of the damages or claims sought in any proceeding
      shall be deemed the “prevailing”
      party and attorneys’ fees shall mean the reasonable fees charged by an
      attorney or a law firm for legal services and the services of any legal
      assistants, and costs of litigation, including, but not limited to, fees
      and costs at trial and appellate levels.

                
	 
      	 
      
	
                  12.

                	
                  Governing
      Law.  It
      is the intention of the parties hereto that the terms and provisions of
      this Note are to be construed in accordance with and governed by the laws
      of the State of Florida, except as such laws may be preempted by any
      federal law controlling the rate of interest which may be charged on
      account of this Note.

                

        

      

    

     

    
      
        
          
            
              
                	
                        13.

                      	
                        No
      Third Party Benefit.  The
      provisions and covenants set forth in this Agreement are made solely for
      the benefit of the parties to this Agreement and are not for the benefit
      of any other person, and no other person shall have any right to enforce
      these provisions and covenants against any party to this
      Agreement.

                      
	 
      	 
      
	
                        14.

                      	
                        Jurisdiction,
      Venue and Jury Trial Waiver.  The
      parties hereby consent and agree that, in any actions predicated upon this
      Note, venue is properly laid in Miami-Dade County, Florida and that the
      Circuit Court in and for Miami-Dade County, Florida, shall have full
      subject matter and personal jurisdiction over the parties to determine all
      issues arising out of or in connection with the execution and enforcement
      of this Note.

                      
	 
      	 
      
	
                        15.

                      	
                        Interpretation.  The
      term “Company”
      as used herein in every instance shall include the Company’s successors,
      legal representatives and assigns, including all subsequent grantees,
      either voluntarily by act of the Company or involuntarily by operation of
      law and shall denote the singular and/or plural and the masculine and/or
      feminine and natural and/or artificial persons, whenever and wherever the
      contexts so requires or properly applies.  The term “Holder”
      as used herein in every instance shall include the Holder’s successors,
      legal representatives and assigns, as well as all subsequent assignees,
      endorsees and holders of this Note, either voluntarily by act of the
      parties or involuntarily by operation of law.  Captions and
      paragraph headings in this Note are for convenience only and shall not
      affect its interpretation.

                      
	 
      	 
      
	
                        16.

                      	
                        WAIVER
      OF JURY TRIAL.  THE
      COMPANY AND HOLDER HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE
      THE RIGHT EITHER MAY HAVE TO TRIAL BY JURY IN RESPECT TO ANY LITIGATION
      BASED HEREON, OR ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS NOTE AND
      ANY AGREEMENT CONTEMPLATED TO BE EXECUTED IN CONJUNCTION HEREWITH, OR ANY
      COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS, (WHETHER VERBAL OR
      WRITTEN) OR ACTIONS OF EITHER PARTY.  THE COMPANY ACKNOWLEDGES
      THAT THIS WAIVER OF JURY TRIAL IS A MATERIAL INDUCEMENT TO THE HOLDER IN
      EXTENDING CREDIT TO THE COMPANY, THAT THE HOLDER WOULD NOT HAVE EXTENDED
      SUCH CREDIT WITHOUT THIS JURY TRIAL WAIVER, AND THAT THE COMPANY HAS BEEN
      REPRESENTED BY AN ATTORNEY OR HAS HAD AN OPPORTUNITY TO CONSULT WITH AN
      ATTORNEY IN CONNECTION WITH THIS JURY TRIAL WAIVER AND UNDERSTANDS THE
      LEGAL EFFECT OF THIS
WAIVER.

                      

              

            

          

        

      

    

    

    
      
        
          	
                  17.

                	
                  Copies
      and Signatures.  A
      copy of this Promissory Note signed by one party and faxed to another
      party shall be deemed to have been executed and delivered by the signing
      party as though an original.  A photocopy of this Promissory
      Note shall be effective as an original for all
  purposes.

                

        

      

    

    

    

    
      	
              SIGNATURE
      PAGE TO FOLLOW

            

    

    
      
        
        

      

      
        -5-

        
          

        

      

      
        
        

      

    

    IN
WITNESS WHEREOF, the undersigned has caused this Convertible Promissory Note to
be executed and delivered by a duly authorized officer as of the date first
above written, to be effective as of the effective date set forth
above.

     

    
      
        	 
      	
                ACIES CORPORATION, a
      Nevada Corporation

              
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
                By:
      /s/ Theodore
      Ferrara

              	 
      
	 
      	
                Theodore
      Ferrara

                Director

              	 
      

      

    

    

    Holder:

    

    
      
        	
                /s/ Oleg Firer

              
	
                Oleg
      Firer

              

      

    

     

    
      
        
        

      

      
        -6-

        
          

        

      

      
        
        

      

    

    EXHIBIT
A

    

    Conversion Election
Form

    

    

    ____________,
200_

    

    Acies
Corp.

    14 Wall
Street, Suite 1620

    New York,
NY  10005

    

    Re:           Conversion of Promissory
Note

    

    Gentlemen:

    

    You are
hereby notified that, pursuant to, and upon the terms and conditions of that
certain Convertible Promissory Note of Acies Corp. (the “Company”),
in the principal amount of $185,000.00 (the “Note”),
held by me (us), I (we) hereby elect to exercise my (our) Conversion Option (as
such term in defined in the Note), in connection with $__________ of the amount
currently owed under the Note, effective as of the date of this writing, which
amount will convert in ________________ shares of the Company’s Common
Stock.

    

    Please
issue certificate(s) for the applicable shares of the Company’s Common Stock
issuable upon the Conversion, in the name of the person provided
below.

    

    

    
      	 
      	
              Very
      truly yours,

            
	 
      	 
      
	 
      	 
      
	 
      	
              ___________________________

            
	 
      	
              Name:

            

    

    

    

    Please
issue certificate(s) for Common Stock as follows:

    

    ______________________________________________

    Name

    

    ______________________________________________

    Address

    

    ______________________________________________

    Social
Security No. of Shareholder

    

    
      
        
        

      

      
        -7-bcaex105.htm

Exhibit 10.5

 

CONSULTING AGREEMENT

 

 

This Agreement ("Agreement") is made and effective as of July 1, 2009 ("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. 

 

  

1

  

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.

 

  

2

  

 

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, 2010. 

 

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 David J. Bugatto 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.

 

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.

 

  

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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.

 

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:

 

	
If to Client: 
	
SonomaWest Holdings, Inc. 

2064 Highway 116, North 

Sebastopol, CA 95472-2662 
	  	  
	  	
Attn: Chief Executive Officer 
	  	  
	  	  	  	  
	
If to Consultant: 
	
Bugatto Investment Company 
	  	  
	  	
c/o David J. Bugatto 
	  	  
	  	
4425 I Street 
	  	  
	  	
Sacramento, CA 95819 
	  	  

 

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. 

 

  

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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, July 1, 2006 and July 1, 2007, 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, 2008. 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, July 1, 2006 and July 1, 2007, 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. 

 

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.

 

  

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IN WITNESS WHEREOF, this Consulting Agreement has been entered into as of the date and year first above written.

 

	  	  	  
	  	
Consultant:

	  	  	  
	  	
  
	
BUGATTO INVESTMENT COMPANY

	  	  
	  	
By: /s/ David J. Bugatto                 

	  	
David J. Bugatto, President 

 

	  	  	  
	  	
Client:

	  	  	  
	
Date: July 8, 2009        
	  	
SONOMAWEST HOLDINGS, INC.

	  	  
	  	
By: /s/ Walker R. Stapleton          

	  	
Walker R Stapleton, CEO 

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