Exhibit 10.4

CONSULTING AGREEMENT

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 BUGATTO 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 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.    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.

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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.

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.

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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, 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 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.

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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.

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.

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.

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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.

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.

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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.

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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:    SONOMAWEST HOLDINGS, INC.     By: /s/ Walker R Stapleton  
Walker R Stapleton, CEO 

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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

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