SONOMAWEST HOLDINGS, INC.

                            INDEMNIFICATION AGREEMENT


     This Indemnification Agreement ("Agreement") is made as of October 30, 2002
by  and  between  SONOMAWEST  HOLDINGS,  INC.,  a  California  corporation  (the
"Company"), and Matthew J. Ertman ("Indemnitee").

     WHEREAS,  in order to induce  Indemnitee to continue to provide services to
the Company,  particularly  services  related to the  reporting of  transactions
entered into by the Company's officers, directors and shareholders involving the
Company's  common stock under Sections 13 and 16 of the Securities  Exchange Act
of 1934, as amended,  the Company wishes to provide for the  indemnification of,
and the advancement of expenses to,  Indemnitee to the maximum extent  permitted
by law;

     WHEREAS,  it is  reasonable,  prudent  and  necessary  for the  Company  to
obligate itself  contractually to indemnify such persons so that they will serve
or continue to serve the Company  free from undue  concern that they will not be
adequately protected;

     WHEREAS,  Indemnitee  is  willing to serve,  continue  to serve and take on
additional  service for or on behalf of the Company on  condition  that he be so
indemnified;

     NOW, THEREFORE, the Company and Indemnitee hereby agree as follows:

     1. Certain Definitions.

          (a)  "Claim"  shall  mean  with  respect  to  a  Covered  Event:   any
threatened, pending or completed action, suit, proceeding or alternative dispute
resolution mechanism,  or any hearing,  inquiry or investigation that Indemnitee
in good faith believes might lead to the  institution of any such action,  suit,
proceeding or alternative dispute resolution mechanism, whether civil, criminal,
administrative, investigative or other.

          (b)  "Covered  Event"  shall mean any event or  occurrence  related to
services  provided  by  Indemnitee  as an  officer,  agent or  fiduciary  of the
Company,  related to the  preparation  and filing of Schedules  13D and 13G, and
Forms  3, 4 and 5 under  Sections  13 and 16,  respectively,  of the  Securities
Exchange Act of 1934, on behalf of officers,  directors and  shareholders of the
Company, including without limitation, the execution of such schedules and forms
pursuant to a power of attorney. The Company acknowledges that such services are
being performed for the benefit of the Company.

          (c) "Expenses" shall mean any and all expenses  (including  attorneys'
fees and all other costs,  expenses and obligations  incurred in connection with
investigating,  defending,  being a witness in or participating in (including on
appeal),  or preparing to defend,  to be a witness in or to participate  in, any
action, suit,  proceeding,  alternative dispute resolution  mechanism,  hearing,
inquiry or  investigation),  judgments,  fines,  penalties  and amounts  paid in
settlement  (if such  settlement  is approved in advance by the  Company,  which
approval  shall not be  unreasonably  withheld)  of any  Claim and any  federal,
state,  local or  foreign  taxes  imposed on the  Indemnitee  as a result of the
actual or deemed receipt of any payments under this Agreement.

     2. Indemnification.

          (a)   Indemnification   of  Expenses.   the  Company  shall  indemnify
Indemnitee for Expenses to the fullest extent permitted by law if Indemnitee was
or is or becomes a party to or witness or other participant in, or is threatened
to be made a party to or witness or other  participant in, any Claim,  including
all interest,  assessments  and other charges paid or payable in connection with
or in respect of such Expenses.

     3. Expenses; Indemnification Procedure.

          (a)  Advancement  of Expenses.  The Company shall advance all Expenses
incurred by  Indemnitee.  Indemnitee  hereby  undertakes  to repay such  amounts
advanced only if, and to the extent that, it shall ultimately be determined that
Indemnitee  is not  entitled  to be  indemnified  by the  Company as  authorized
hereby.  The  advances  to be made  hereunder  shall be paid by the  Company  to
Indemnitee  within  twenty (20) days  following  delivery  of a written  request
therefor by Indemnitee to the Company.

          (b)  Notice/Cooperation  by  Indemnitee.  Indemnitee  shall  give  the
Company  notice in writing  as soon as  practicable  of any Claim  made  against
Indemnitee  for  which  indemnification  will or  could  be  sought  under  this
Agreement.  Notice to the Company shall be directed to the Chairman of the Board
of the Company at the address shown on the signature  page of this Agreement (or
such other address as the Company shall designate in writing to the Indemnitee).
Notice shall be deemed received three business days after the date postmarked if
sent by domestic  certified or registered mail,  properly  addressed;  otherwise
notice shall be deemed  received when such notice shall  actually be received by
the Company.  The omission to so notify the Company will not relieve the Company
from any  liability  which it may have under this  Agreement  or  otherwise.  In
addition,  Indemnitee shall give the Company such information and cooperation as
it may reasonably require and as shall be within Indemnitee's power.

          (c) Procedure.  Any indemnification  under this Agreement,  other than
pursuant to Section 4, shall be made no later than 45 days after  receipt by the
Company of the written  request of  Indemnitee,  accompanied  by  substantiating
documentation,  unless a determination  is made within said 45-day period by (1)
the Board of Directors by a majority  vote of a quorum  consisting  of directors
who are or were not parties to such Claim, or (2) independent legal counsel in a
written  opinion  (which  counsel  shall  be  appointed  if such  quorum  is not
obtainable),   that   Indemnitee   has  not  met  the  relevant   standards  for
indemnification set forth herein.

          In the event the Company  does not  indemnify  Indemnitee  within such
45-day period,  whether or not the Company  (including its Board of Directors or
independent legal counsel) has made a determination  that Indemnitee has not met
the applicable  standard of conduct,  Indemnitee may at anytime thereafter bring
suit against the Company to recover the unpaid  amount in any court of competent
jurisdiction.  The  burden  of  proving  by clear an  convincing  evidence  that
indemnification is not appropriate shall be on the Company.  Neither the failure
of the Company  (including its Board of Directors or independent  legal counsel)
to have made a  determination  prior to the  commencement  of such  action  that
indemnification  is proper in the circumstances  because  Indemnitee has met the
applicable  standard  of  conduct,  nor an actual  determination  by the Company
(including its Board of Directors or independent  legal counsel) that Indemnitee
has not met such  applicable  standard  of  conduct,  shall be a defense  to the
action  or  create a  presumption  that  Indemnitee  has not met the  applicable
standard of conduct.  Indemnitee's  expenses  reasonably  incurred in connection
with successfully establishing his right to indemnification  hereunder, in whole
or part, shall also be indemnified by the Company.

          (d) Notice to Insurers.  If, at the time of the receipt of a notice of
a Claim  pursuant to Section 3(b)  hereof,  the Company has director and officer
liability  insurance  in effect,  the Company  shall give  prompt  notice of the
commencement  of  such  proceeding  to  the  insurers  in  accordance  with  the
procedures set forth in the respective  policies.  The Company shall  thereafter
take all necessary or desirable  action to cause such insurers to pay, on behalf
of the  Indemnitee,  all  amounts  payable  as a result  of such  proceeding  in
accordance with the terms of such policies.

     4. Additional Indemnification Rights; Nonexclusively.

          (a) Scope.  Notwithstanding any other provision of this Agreement, the
Company  hereby  agrees  to  indemnify  the  Indemnitee  to the  fullest  extent
permitted by law,  notwithstanding that such indemnification is not specifically
authorized  by the other  provisions  of this  Agreement,  the  Company's or any
subsidiary's  Articles  of  Incorporation,  the  Company's  or any  subsidiary's
By-laws  or by  statute.  In the  event of any  change,  after  the date of this
Agreement,  in any applicable law,  statute or rule which expands the right of a
California  corporation  to  indemnify a member of its board of  directors or an
officer,  such changes shall be, ipso facto,  within the purview of Indemnitee's
rights and  Company's  obligations,  under this  Agreement.  In the event of any
change in any  applicable  law,  statute  or rule which  narrows  the right of a
California  corporation  to  indemnify a member of its Board of  Directors or an
officer, such changes, to the extent not otherwise required by such law, statute
or rule to be applied to this  Agreement  shall have no effect on this Agreement
or the parties' rights and obligations hereunder.

          (b)  Nonexclusively.  The  indemnification  provided by this Agreement
shall not be deemed  exclusive of any rights to which Indemnitee may be entitled
under the Company's Articles of Incorporation,  its By-laws, any agreement,  any
vote of shareholders or disinterested  directors, the General Corporation Law of
the State of California,  applicable  employment  law, or otherwise,  both as to
action in Indemnitee's  official  capacity and as to action in another  capacity
while holding such office.  The  indemnification  provided  under this Agreement
shall  continue as to Indemnitee for any action taken or not taken while serving
in an  indemnified  capacity  even  though  he may have  ceased to serve in such
capacity at the time of any action or other covered proceeding.

     5. Partial  Indemnification.  If Indemnitee is entitled under any provision
of this Agreement to indemnification by the Company for some or a portion of the
Expenses,  but not,  however,  for the total amount  thereof,  the Company shall
nevertheless  indemnify  Indemnitee  for the  portion of such  Expenses to which
Indemnitee is entitled.

     6. Mutual Acknowledgement. Both the Company and Indemnitee acknowledge that
in certain  instances,  Federal law or applicable public policy may prohibit the
Company from indemnifying its officers,  employees,  agents or fiduciaries under
this Agreement or otherwise.  Indemnitee  understands and acknowledges  that the
Company has  undertaken  or may be required in the future to undertake  with the
Securities and Exchange  Commission to submit the question of indemnification to
a court in certain  circumstances  for a  determination  of the Company's  right
under public policy to indemnify Indemnitee.

     7. Directors' and Officers'  Liability  Insurance.  The Company shall, from
time to time, make the good faith determination whether or not it is practicable
for the Company to obtain and  maintain a policy or policies of  insurance  with
reputable  insurance  companies  providing  the  officers  and  directors of the
Company with coverage for losses from wrongful  acts, or to ensure the Company's
performance of its indemnification obligations under this Agreement. Among other
considerations,  the Company  will weigh the costs of obtaining  such  insurance
coverage  against the protection  afforded by such coverage.  In all policies of
directors' and officers'  liability  insurance,  Indemnitee shall be named as an
insured in such a manner as to provide  Indemnitee  the same rights and benefits
as are  accorded  to the  most  favorably  insured  of the  Company's  officers.
Notwithstanding the foregoing, the Company shall have no obligation to obtain or
maintain  such  insurance  if the  Company  determines  in good  faith that such
insurance is not reasonably  available,  if the premium costs for such insurance
are  disproportionate  to the  amount  of  coverage  provided,  if the  coverage
provided  by such  insurance  is  limited  by  exclusions  so as to  provide  an
insufficient   benefit,  or  if  Indemnitee  is  covered  by  similar  insurance
maintained by a subsidiary or parent of the Company.

     8. Severability.  Nothing in this Agreement is intended to require or shall
be construed  as requiring  the Company to do or fail to do any act in violation
of applicable law. The Company's inability,  pursuant to court order, to perform
its  obligations  under this  Agreement  shall not  constitute  a breach of this
Agreement.  The provisions of this  Agreement  shall be severable as provided in
this Section 8. If this  Agreement or any portion hereof shall be invalidated on
any  ground by any  court of  competent  jurisdiction,  then the  Company  shall
nevertheless indemnify Indemnitee to the full extent permitted by any applicable
portion of this Agreement that shall not have been invalidated,  and the balance
of this Agreement not so invalidated shall be enforceable in accordance with its
terms.

     9. Exceptions.  Any other provision herein to the contrary notwithstanding,
the Company shall not be obligated pursuant to the terms of this Agreement:

          (i)  Excluded Acts. To indemnify  Indemnitee for any acts or omissions
               or  transactions  from which an officer  may not be  relieved  of
               liability under the California General Corporation Law;

          (ii) Claims Initiated by Indemnitee.  To indemnify or advance Expenses
               to Indemnitee with respect to proceedings or claims  initiated or
               brought  voluntarily  by  Indemnitee  and not by way of  defense,
               except  with  respect  to  proceedings  brought to  establish  or
               enforce a right to  indemnification  under this  Agreement or any
               other  statute or law or otherwise as required  under Section 317
               of the California  Corporations Code, but such indemnification or
               advancement  of  Expenses  may  be  provided  by the  Company  in
               specific  cases  if the  Board  of  Directors  has  approved  the
               initiation or bringing of such suit;

          (iii)Lack of Good Faith.  To  indemnify  Indemnitee  for any  Expenses
               incurred  by  the  Indemnitee  with  respect  to  any  proceeding
               instituted by Indemnitee to enforce or interpret this  Agreement,
               if a court of competent jurisdiction  determines that each of the
               material assertions made by the Indemnitee in such proceeding was
               not made in good faith or was frivolous;

          (iv) Insured   Claims.   To  indemnify   Indemnitee  for  Expenses  or
               liabilities of any type whatsoever  which have been paid directly
               to  Indemnitee  by  an  insurance   carrier  under  a  policy  of
               directors' and officers' liability maintained by the Company;

          (v)  Indemnified  Claims. To indemnify the Indemnitee for any Expenses
               or  liabilities  of any type  whatsoever for which the Indemnitee
               has been or is indemnified by the Company otherwise than pursuant
               to this Agreement.

     10.  Effectiveness  of  Agreement.  To the extent that the  indemnification
permitted  under the terms of certain  provisions of this Agreement  exceeds the
scope of the indemnification  provided for in the California General Corporation
Law,  such  provisions  shall not be  effective  unless and until the  Company's
Articles of Incorporation  authorize such additional rights of  indemnification.
In all other  respects,  the balance of this Agreement  shall be effective as of
the date set forth on the first page of this Agreement.

     11.  Construction  of Certain  Phrases.  For  purposes  of this  Agreement,
references  to the  "Company"  shall  include,  in  addition  to  the  resulting
corporation,  any  constituent  corporation  (including  any  constituent  of  a
constituent)  absorbed  in a  consolidation  or merger  which,  if its  separate
existence  had  continued,  would have had power and  authority to indemnify its
officers  so  that  if  Indemnitee  is or was an  officer  of  such  constituent
corporation, or is or was serving at the request of such constituent corporation
as an officer of another corporation or other enterprise, Indemnitee shall stand
in the same position  under the provisions of this Agreement with respect to the
resulting or surviving corporation as Indemnitee would have with respect to such
constituent corporation if its separate existence had continued.

     12.   Counterparts.   This  Agreement  may  be  executed  in  one  or  more
counterparts, each of which shall constitute an original.

     13.  Successors  and  Assigns.  This  Agreement  shall be binding  upon the
Company  and its  successors  and  assigns,  and shall  inure to the  benefit of
Indemnitee and Indemnitee's estate, heirs, legal representatives and assigns.

     14.  Attorneys'  Fees.  In the  event  that any  action  is  instituted  by
Indemnitee under this Agreement to enforce or interpret any of the terms hereof,
Indemnitee shall be entitled to be paid all court costs and expenses,  including
reasonable  attorneys' fees, incurred by Indemnitee with respect to such action,
unless as a part of such action, the court of competent jurisdiction  determines
that each of the  material  assertions  made by  Indemnitee  as a basis for such
action were not made in good faith or were frivolous.  In the event of an action
instituted by or in the name of the Company  under this  Agreement or to enforce
or interpret any of the terms of this Agreement, Indemnitee shall be entitled to
be paid all court costs and expenses,  including  attorneys'  fees,  incurred by
Indemnitee  in defense of such action  (including  with respect to  Indemnitee's
counterclaims  and cross-claims  made in such action),  unless as a part of such
action the court determines that each of the Indemnitee's  material  defenses to
such action were made in bad faith or were frivolous.

     15. Notice. All notices,  requests,  demands and other communications under
this  Agreement  shall be in  writing  and  shall be  deemed  duly  given (i) if
delivered by hand and receipted for by the party addressed,  on the date of such
receipt, or (ii) if mailed by domestic certified or registered mail with postage
prepaid,  on the third  business day after the date  postmarked.  Addresses  for
notice to either party are as shown on the signature page of this Agreement,  or
as subsequently modified by written notice.

     16.  Consent to  Jurisdiction.  The  Company  and  Indemnitee  each  hereby
irrevocably consent to the jurisdiction of the courts of the State of California
for all purposes in connection with any action or proceeding which arises out of
or relates to this  Agreement  and agree that any action  instituted  under this
Agreement shall be brought only in the state courts of the State of California.

     17. Choice of Law. This  Agreement  shall be governed by and its provisions
construed in  accordance  with the laws of the State of California as applied to
contracts between California residents entered into and to be performed entirely
within California.

     18. Subrogation.  In the event of any payment under this Agreement to or on
behalf of the Indemnitee,  the Company shall be subrogated to the extent of such
payment to all of the rights of recovery of the  Indemnitee  against any person,
firm,  corporation  or other entity (other than the Company) and the  Indemnitee
shall  execute  all papers  requested  by the  Company  and shall do any and all
things that may be necessary or desirable to secure such rights for the Company,
including the execution of such  documents  necessary or desirable to enable the
Company to effectively bring suit to enforce such rights.

     19. Subject Matter and Parties.  The intended  purpose of this Agreement is
to provide for indemnification  and advancement of Expenses,  and this Agreement
is not  intended  to affect any other  aspect of any  relationship  between  the
Indemnitee  and the  Company  and is not  intended  to and shall not  create any
rights in any person as a third party beneficiary hereunder.









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<PAGE>



     IN WITNESS  WHEREOF,  the parties hereto have executed this Agreement as of
the date first above written.

                                   SONOMAWEST HOLDINGS, INC.
                                   a California corporation


                                   By: /s/  Roger S. Mertz
                                     ------------------------------------
                                        Roger S. Mertz
                                        Chairman of the Board


                                   Address:  2064 Highway 116 North
                                             Sebastopol, California 95472



AGREED TO AND ACCEPTED:

INDEMNITEE:

  /s/  Matthew J.Ertman
-----------------------------
Matthew J. Ertman

Address

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                  [Signature page to Indemnification Agreement]