Exhibit 10.7
 
CONSULTING AGREEMENT
 
This Consulting Agreement (“Agreement”) is made effective as of August 1, 2005,
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, 2005, 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 or treasurer of a
corporation; provided however, that Eakin shall report directly to the Chief
Executive Officer of the Company (“CEO”) of SWH. Eakin shall serve as Chief
Financial Officer until the earlier to occur of his termination or resignation.
Eakin shall have the authority and responsibility 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 the CEO of such determination and Eakin may reject that project or
projects without breaching this Agreement. The CEO 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.

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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,
2006, unless terminated sooner pursuant to the following provision of this
Paragraph 5. This Agreement may be terminated by either party, for any reason or
no reason, upon prior written notice to the other party. A termination of this
Agreement shall automatically terminate Eakin as Chief Financial Officer of SWH.
Upon termination, Eakin shall not be entitled to any severance or similar
compensation payments.

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, other than due to
Eakin’s 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 due
to Eakin’s 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; provided, however, that no prior consent shall be required in
connection with assignment of the Agreement in connection with a merger or sale
of the business of SWH.

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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. WORK FOR HIRE. Eakin agrees that all work he performs pursuant to this
Agreement, and all work which relates at the time of conception or reduction to
Company's business, and all work which results from work he performs for
Company, whenever performed during the term of this Agreement, and whether or
not utilizing Company's equipment, supplies, facilities, Information or other
trade secret information, is considered work made for hire for Company as such
term is defined in section 101 of the Copyright Act of 1976 and belongs to
Company. Eakin further agrees that in the event that this Agreement is
determined not to be a work for hire agreement, Eakin will assign to Company any
and all rights retained by Eakin.

12. 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.

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13. 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.

14. 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.

15. 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:

        If for SWH : Walker Stapleton      Chief Executive Officer      
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.

16. 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.

17. AMENDMENT. This Agreement may be modified or amended only by an amendment in
writing signed by both parties.

18. 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.

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19. 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.

20. APPLICABLE LAW. This Agreement shall be governed by the laws of the State of
California.

21. 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.

“SWH”:                SonomaWest Holdings, Inc.                        By: 
/s/ Walker Stapleton      

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Walker Stapleton, Chief Executive Officer                     “Eakin”           
    Thomas R. Eakin, d.b.a. Eakin Consulting                        
By: /s/ Thomas R. Eakin      

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Thomas R. Eakin        

 
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Schedule A to Consulting Agreement dated as of August 1, 2005

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, 2005

HOURLY FEES

§  
Financial or management consulting $115.00/hour.

§  
Use of outside consultants billed at cost plus 10%, provided that any use of an
outside consultant must first be approved by SWH.

§  
Legal proceedings (testimony in deposition, trials and arbitration/mediation
hearings) are billable at 1.5 times the standard rate per hour.

TRAVEL

§  
Travel inside Sonoma County - Non-chargeable.

§  
Travel outside Sonoma County - Travel time billed at regular hourly consulting
rate.

§  
Over-night travel - Daily rate to be mutually agreed upon in advance.

§  
Mileage outside Sonoma County is billed at the mileage rate established by the
Internal Revenue Service.

§  
Out of pocket expenses billed at cost.

BILLINGS

§  
Invoices will be issued every two weeks.

§  
Minimum billing of four hours for all required on-site visits or meetings
outside Sonoma County.

§  
Terms - Net five days from receipt.

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