Document:

Exhibit 10.13

                             INDEPENDENT CONSULTANT

                              CONTRACT FOR SERVICES

     This Agreement is made and effective this 17th day of July, 2001
("Effective Date") by and between SONOMAWEST HOLDINGS, INC. a California
corporation ("Client") and DAVID J. BUGATTO, ("Consultant").

     1.   SERVICES AND DELIVERABLES. Consultant will perform the services
described on Exhibit A ("Services"), and will determine the method, details and
means of performing the Services. The parties intend for this agreement to
govern all services provided and to be provided by Consultant to Client after
April 1, 2001.

     2.   FEES AND PAYMENT. In consideration for the Services to be performed by
Consultant, Client will pay to Consultant a monthly fee of $2,500. In addition,
in the event either of the Company's Sonoma County properties are sold during
the term hereof, Consultant will be paid a fee of 2-1/2% of the sales price if
no broker commission is involved and 1-1/4 % of the sales price if a broker is
involved. In the event either property is refinanced during the term hereof
Consultant will be paid a fee equal to 1% of the amount of proceeds received by
the Company in excess of its current debt.

     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.   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.   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 incurred by Consultant in performing the services under this Agreement.

          c.   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

<PAGE>

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.   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.   Consultant may not assign any duties or obligations under this
Agreement without Client's express written consent.

          f.   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.   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.   This Agreement begins on the Effective Date and continues until
the earlier of (i) written notice of termination by either party; (ii)
termination in accordance with the provisions set forth below; or (iii) December
31, 2003.

          b.   This Agreement will terminate automatically on any of the
following events: (i) bankruptcy or insolvency of either party; (ii) sale or
discontinuance of the business of either party; (iii) death of either party.

          c.   If Consultant defaults in the performance of the Agreement or
materially breaches any of the provisions, Client at its sole option may
terminate the Agreement at any time on written notice to Consultant. For
purposes of this section, material breach includes, but is not limited to: (i)
failure or refusal to perform the Services when and as contemplated; (ii)
failure to provide timely invoices with appropriate descriptions and approved
expenses as provided herein; (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.

                                       -2-
<PAGE>

          d.   If Client fails to pay Consultant fees or payment as provided
herein, Consultant at its sole option may terminate the Agreement, provided
Client does not remedy the failure within 30 days from the date payment is due.

     6.   CONFIDENTIALITY, TRADE SECRETS, WORK FOR HIRE AND NON-COMPETITION.

          a.   Consultant recognizes that during the term of this Agreement, and
in preparation therefore, he will be privy to many of Client's trade secrets or
proprietary or other confidential or privileged information. Consultant agrees
to keep all such 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.   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.   Consultant agrees that all work he 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 he 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.

     7.   GENERAL PROVISIONS.

          a.   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.
                                    1448 Industrial Avenue
                                    Sebastopol, CA 95472
                                    Attn:  Gary Hess, President
                                    Phone: 707.824.2541
                                    Fax:   707.824.2543

          If to Consultant:         David J. Bugatto
                                    3904 El Ricon Way
                                    Sacramento, CA 95864

                                      -3-
<PAGE>

     Notices delivered personally are deemed communicated as of actual receipt;
mailed notices are deemed communicated as of two days after mailing.

          b.   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. Any modification of
this Agreement is effective only if I n writing signed by the party to be
charged.

          c.   If any provisions in this Agreement are held by a court of
competent jurisdiction to be invalid, void or unenforceable, the remaining
provisions will continue in full force provided that the essential purposes of
the Agreement can be achieved without the invalid provision.

          d.   This Agreement is governed by and construed in accordance with
the law of the state of California.

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

                                      Consultant:

                                           /s/ David J. Bugatto
                                           --------------------
                                           David J. Bugatto

                                      Client:
                                           SONOMAWEST HOLDINGS, INC.

                                           By: /s/ Gary L. Hess
                                              --------------------------------
                                               Gary L. Hess, President

                                      -4-
<PAGE>

                                    EXHIBIT A

                             DESCRIPTION OF SERVICES

Management of the development, leasing and sale of Client's real property
located in the Sonoma County, California.EXHIBIT 10.14

                            SONOMAWEST HOLDINGS, INC.
                             1448 Industrial Avenue
                        Sebastopol, California 95472-4848

                                  July 17, 2001

Mr. Gary L. Hess
President
SonomaWest Holdings, Inc.
1448 Industrial Avenue
Sebastopol, CA 95472-4848

     Re:  Separation Arrangement

Dear Gary:

     This confirms our agreement regarding the terms of your separation from
active employment with SonomaWest Holdings, Inc. ("Company"). This supercedes
any and all prior agreements between you and the Company regarding your
employment and separation therefrom.

     1.   EMPLOYMENT. You will remain actively employed in your current
capacity, on a full-time basis, and at your current base salary through August
31, 2001. Effective September 1, 2001 through October 31, 2001 ("Termination
Date"), you will continue to be employed on a part-time (20%) basis as the
Company's President and Chief Financial Officer at compensation calculated at
the equivalent of $3053.33 per month (which includes car allowance) and you will
accrue paid vacation time during that period at the equivalent of $2,933.33 base
salary per month(1) You are not eligible for bonus consideration during either
of these periods. All accrued salary and unpaid vacation time will be paid to
you on the Termination Date. You will remain eligible to participate in the
Company's group health plan and other Company employee benefit plans pursuant to
their terms through the Termination Date. Thereafter, eligibility for all plans
will cease, except that you will be eligible to continue participation in the
health plan at your option and expense pursuant to the provisions of COBRA.

     2.   SEPARATION PAYMENTS. Effective September 1, 2001 and for each month
thereafter through and including January 2004 (consisting of twenty-nine (29)
months and constituting the "Severance Period"), the Company will pay you
$12,500 per month, less required withholdings and authorized deductions. Such
payments will be made by mailing a Company check to you at your home address as
currently reflected in the Company's records, or such other address as you
request, within the first seven (7) calendar days of each calendar month during
the Severance

--------

(1)  Please appreciate that during any continued employment or other service to
the Company, you remain subject to general principles of law and to the
Company's personnel and financial policies for executives, directors and/or
other service providers as applicable and as then in effect. Continued
compliance with these principles and policies is a condition of this Agreement.

<PAGE>

Period. The foregoing notwithstanding, in the event that, at any time during the
Severance Period, the Company is no longer covered by or otherwise elects not to
operate pursuant to the registration and filing requirements of either Section
12(b) or 12(g) of the Securities Exchange Act of 1934 and the applicable rules
and regulations, then the Company will notify you within thirty (30) calendar
days of such date ("Section 12 Date" and "Notification Date" respectively) and,
within fifteen (15) business days following the Notification Date, pay to you in
one lump sum the remainder of the monthly payments that otherwise would have
been paid during the Severance Period.

     3.   PERMA-PAK BUSINESS. The Company hereby grants you the following
options ("Option A" and "Option B" respectively) regarding the business property
and operations of Perma-Pak: (A) From now through December 31, 2002, the Company
will designate you as its exclusive representative to sell any and all remaining
Perma-Pak finished goods inventory, production equipment and intellectual
property ("Perma-Pak Property"); or (B) between now and December 31, 2002 you
may purchase from the Company the Perma-Pak business, including all then
existing Perma-Pak Property, for a purchase price of $250,000. Sales commissions
earnable under Option A equal 7% of the net price the Company actually receives
on the first $250,000 of Property sold, and 50% of the net price the Company
actually receives on all Property sold above $250,000 in the aggregate. Under
Option A, all sales proceeds are payable to the Company and you agree to
maintain and provide to the Company appropriate and accurate business records of
all sales or other transactions regarding Perma-Pak Property so that the Company
is in a position to accurately account for all revenue and all commissions
payable to you as well as all sold and unsold Perma-Pak Property. Under Option
B, the Option is exercisable at any time between now and December 31, 2002, and
the purchase price remains at $250,000 ("Purchase Price") whenever it is
exercised. In the event you purchase the Perma-Pak property no commission will
be due. For mutual convenience, you will be deemed to have selected Option A
until such time as you notify the Company in writing that you elect Option B,
which Option will become effective within fifteen (15) business days thereafter,
at which time the Purchase Price is due in full.

     4.   EXTENSION OF STOCK OPTIONS. Our records indicate that the Company
previously has granted you options to purchase 89,474 shares of its common stock
at an exercise price of $5.00 per share, all of which options have vested. These
options were intended to be incentive stock options, to the extent permissible
under law.(2) Each of these options will terminate by their current terms within
three months of termination of your full-time employment if not exercised. The
foregoing notwithstanding, the Board has extended the termination date of these
options to January 29, 2002. To the extent that you elect to exercise some or
all of those options on or before January 29, 2002, the Company will loan you up
to $447,370 pursuant to an appropriate Note and Security Agreement. Forms of a
Note and of a Security Agreement are attached hereto as Exhibits A and B
respectively. The note is specifically and solely for the purpose of enabling

----------

(2)  As you may know, under the Internal Revenue Code, the value of shares as to
which all incentive stock options held by an optionee may first become
exercisable (i.e. become vested) in any calendar year may not exceed $100,000,
based on the fair market value of such stock on the date such incentive stock
options were granted. IRCss. 422(d). To determine if any grant meets the test,
you multiply the number of shares that become exercisable in any calendar year
times the fair market value on the grant date.

                                      -2-
<PAGE>

you to exercise the options on or before January 29, 2002, in order to retain
their classification as incentive stock options, to the extent permissible. The
Note will be fully recourse to you, and will be secured by the stock purchased
on exercise of the options. The Note is payable on the earlier of August 1, 2004
or within fifteen (15) business days of the Notification Date, and will accrue
interest at the Applicable Federal Rate for loans of three years or less on the
date of the note, which interest is payable quarterly. You agree that you are
solely responsible for any taxes which may be due upon exercise of any of these
options and/or upon any sale of the underlying stock.

     Alternatively, and at your option, the Board will further extend the
termination date of some or all of your options as you so indicate through the
last day of the Severance Period, provided only that you so notify the Board in
writing on or before January 29, 2002. You recognize and acknowledge that if you
elect this option and exercise some or all of the options at any time after
three months following termination of your employment, the Company will not loan
you the money to exercise that portion of the options and those options will
automatically convert to non-statutory options pursuant to the Internal Revenue
Code.

     5.   BOARD MEMBERSHIP. The Company will use its best efforts to assure that
you are included as a nominee for election to its Board of Directors through the
Annual Meeting held in 2003 for service until the Annual Meeting held in 2004.
For any and all periods of service as a director following termination of your
employment, you will be entitled to receive whatever fees are payable to other
non-employee directors.

     Gary, I am pleased that the Company is able to look forward to your
continued participation under these terms. Please sign and date this letter in
the space indicated below and return the fully executed letter. A duplicate
executed copy is enclosed for your records.

                                        Very truly yours,

                                        SonomaWest Holdings, Inc.

                                        By: /s/ Roger S. Mertz
                                        Its:  Secretary

Agreed to:

/s/ Gary L. Hess
-------------------------------------------------------
                  Gary L. Hess

                                      -3-
<PAGE>

                                    EXHIBIT A

                                 PROMISSORY NOTE
                                 ---------------

$447,370.00
                                                          _______________, 200__
                                                          Sebastopol, California

     FOR VALUE RECEIVED, the undersigned, GARY L. HESS, hereby promises to pay
to the order of SONOMAWEST HOLDINGS, INC. at such place as the holder of this
note (the "Note") may direct in writing, the principal sum of Four Hundred and
Forty-Seven Thousand and Three Hundred and Seventy Dollars ($447,370). This Note
shall bear interest, payable on the first day of each calendar quarter, at a
rate of interest equal to [the Applicable Federal Rate for loans of three years
or less] per annum. The principal shall be due and payable on the earlier of
August 1, 2004 or within fifteen (15) business days of the Notification Date as
defined in that certain Separation Agreement by and between Borrower and
SonomaWest Holdings, Inc. dated July 17, 2001.

     This Note may be prepaid at any time without premium or penalty. This Note
shall be deemed to be a contract entered into and made pursuant to the laws of
the State of California and shall in all respects be governed, construed, and
enforced in accordance with the laws of said State.

     The undersigned agrees, if this Note is placed in the hands of an attorney
for collection, to pay reasonable legal costs as permitted by law.

     The undersigned waives demand, presentment for payment, notice of
non-payment or dishonor, notice of protest, and protest of this Note. No delay
on the part of the holder in exercising any right, power or privilege pursuant
to this Note shall operate as a waiver of the same, and no single or partial
exercise of any right, power or privilege shall constitute an exhaustion or
waiver of any of them, all of which shall continue for the benefit of holder.

     Dated: _____________, 200__

                                          ----------------------------
                                                  Gary L. Hess
<PAGE>

                                    EXHIBIT B

                           LOAN AND SECURITY AGREEMENT

          THIS LOAN AND SECURITY AGREEMENT (this "Agreement"), entered into as
of _________, 200__ by and between SONOMAWEST HOLDINGS, INC. a California
corporation ("Lender"), and GARY L. HESS ("Borrower").

                                    RECITALS:

          WHEREAS, Lender desires to lend to Borrower and Borrower desires to
borrow from Lender the sum of Four Hundred and Forty-Seven Thousand and Three
Hundred and Seventy Dollars ($ 447,370.00) (the "Loan") on the terms and
conditions provided for herein; and

          WHEREAS, Borrower intends hereby to pledge 89,474 shares of Lender's
common stock (the "Common Stock") and other proceeds and interests as defined
herein, as secured collateral for payment of the Loan and performance of all of
Borrower's obligations under this Agreement.

          NOW, THEREFORE, in consideration of the mutual promises made herein,
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties, intending to be legally bound, agree
as follows:

     SECTION 1. LOAN. Lender agrees to lend to Borrower the sum of $ 447,430 to
be evidenced by an interest-bearing Promissory Note of even date herewith in the
form of Exhibit A to that certain Separation Agreement by and between Borrower
and SonomaWest Holdings, Inc. dated July 17, 2001. (the "Note"). As provided in
the Note, the Note may be repaid at any time without premium or penalty.

     SECTION 2. PLEDGE OF SECURITY INTEREST; COLLATERAL Borrower hereby pledges
and grants to the Lender a first priority lien on and security interest in the
Collateral, as hereinafter defined. The term Collateral means, collectively: (i)
the Common Stock; and (ii) all products, proceeds and revenues of and from the
Common Stock, together with all substitutions therefor and additions thereto
including without limitation stock rights, rights to subscribe, liquidating
dividends, stock dividends, cash dividends, interest, new securities and other
property to which Borrower is or may hereafter become entitled to receive on
account of such Common Stock.

     SECTION 3. SECURITY FOR OBLIGATIONS. This Agreement secures the payment
and/or performance of all obligations of Borrower to the Lender, now or
hereafter existing under the Note, whether for principal, interest, fees,
expenses or otherwise, and all obligations of Borrower now or hereafter existing
under this Agreement (all such obligations of Borrower to the Lender hereinafter
referred to as the "Obligations").

     SECTION 4. DELIVERY OF COLLATERAL. All certificates or instruments
representing the Collateral shall be delivered to and held by Lender and shall
be in suitable form for transfer by

<PAGE>

delivery, or shall be accompanied by duly executed instruments of transfer or
assignment in blank, all in form and substance satisfactory to the Lender. The
Lender shall have the right, in the event of a default under the Note or this
Agreement, in its sole discretion and without notice to Borrower, to transfer to
or to register in the name of the Lender or any of its nominees any or all of
the Collateral. In addition, the Lender shall have the right at any time to
exchange certificates or instruments representing or evidencing the Collateral
for certificates or instruments of smaller or larger denominations.

     SECTION 5. REPRESENTATIONS AND WARRANTIES. Borrower represents and warrants
as follows:

     (a)  Borrower is the legal and beneficial owner of the Collateral free and
clear of any lien, security interest, option or other charges or encumbrance
except for the security interest created by this Agreement between Borrower and
Lender of even date herewith; and

     (b)  The pledge of the Collateral pursuant to this Agreement creates a
valid and perfected first priority security interest in the Collateral, securing
the payment and/or performance of the Obligations.

     SECTION 6. FURTHER ASSURANCES. Borrower agrees that at any time, and from
time to time, Borrower will promptly execute and deliver all further instruments
and documents, and take all further action, that may be necessary or desirable,
or that the Lender may reasonably request, in order to perfect and protect any
security interest granted or purported to be granted hereby or to enable the
Lender to exercise and enforce its rights and remedies hereunder with respect to
any Collateral.

     SECTION 7. VOTING RIGHTS; DIVIDENDS; ETC.

     (a)  So long as no Event of Default (as hereinafter defined) or event
which, with the giving of notice or the lapse of time, or both, would become an
Event of Default, shall have occurred and be continuing:

               (i)  Borrower shall have the right to exercise all voting and
     other corporate rights with respect to the Collateral; and

               (ii) Borrower shall be entitled to receive and retain any and all
     dividends paid in respect of the Collateral; provided, however, that any
     and all

                    (A)  dividends paid or payable other than in cash in respect
          of, and instruments and other property received, receivable or
          otherwise distributed in respect of, or in exchange for, any
          Collateral,

                    (B)  dividends and other distributions paid or payable in
          cash in respect of any Collateral in connection with a partial or
          total liquidation or dissolution of Lender or in connection with a
          reduction of capital, capital surplus or paid-in-surplus of Lender,
          and

                                      -2-
<PAGE>

                    (C)  cash paid, payable or otherwise distributed in respect
          of principal of, or in redemption of, or in exchange for, any
          Collateral,

shall forthwith be delivered to the Lender to hold as Collateral, or as may
otherwise be agreed between Borrower and the Lender, and shall, if received by
Borrower, be received in trust for the benefit of the Lender, be segregated from
the other property or funds of Borrower, and be forthwith delivered to the
Lender as Collateral in the same form as so received (with any necessary
endorsement).

     (b)  Upon the occurrence and during the continuance of an Event of Default
under the Note or hereunder:

               (i)  All rights of Borrower to exercise the voting and other
     consensual rights which the Borrower would otherwise be entitled to
     exercise pursuant to Section 7(a)(i) of this Agreement and to receive the
     dividend payments which the Borrower would otherwise be authorized to
     receive and retain pursuant to Section 7(a)(ii) of this Agreement shall
     cease, and Lender shall thereupon have the sole right to exercise such
     voting and other consensual rights and to receive and hold as Collateral
     such dividend payments.

               (ii) All dividend payments which are received by Borrower
     contrary to the provisions of Section 7(b)(i) shall be received in trust
     for the benefit of the Lender, shall be segregated from other funds of
     Borrower and shall be forthwith paid over to the Lender as Collateral in
     the same form as so received (with any necessary endorsement).

     (c)  The term "Event of Default" shall mean (1) failure of Borrower to pay
the unpaid principal due under the Note within fifteen (15) days after the date
when due; or (2) the insolvency, bankruptcy (which is not stayed within 60 days
after its commencement), or dissolution of Borrower, or (3) any material default
by Borrower in the performance of any covenant or agreement pursuant to this
Agreement which default is not cured within ten (10) days following written
notice by Lender.

     SECTION 8. TRANSFERS AND OTHER LIENS; ADDITIONAL SHARES. Borrower agrees
that it will not (i) sell or otherwise dispose of, or grant any option with
respect to, any of the Collateral, or (ii) create or permit to exist any lien,
security interest, or other charge or encumbrance upon or with respect to any of
the Collateral, except for the security interest under this Agreement.

     SECTION 9. LENDER MAY PERFORM. If Borrower fails to perform any agreement
contained herein, the Lender may itself perform, or cause the performance of,
such agreement, and the expenses the Lender incurs in connection therewith shall
be payable by Borrower under Section 12.

     SECTION 10. REASONABLE CARE. The Lender shall be deemed to have exercised
reasonable care in the custody and preservation of the Collateral in its
possession if the Collateral is accorded treatment substantially equal to that
which the Lender accords its own property, it being understood that the Lender
shall not have responsibility for (a) ascertaining or taking action with respect
to calls, conversions, exchanges, maturities, tenders or other matters relative
to any Collateral, whether or not the Lender has or is deemed to have knowledge
of such matters,

                                      -3-
<PAGE>

or (b) taking any necessary steps to preserve rights against any parties with
respect to any Collateral.

     SECTION 11. REMEDIES UPON DEFAULT. If any Event of Default shall have
occurred and continues uncured for five (5) consecutive days, upon written
notice to Borrower, the Lender may exercise in respect of the Collateral, in
addition to other rights and remedies provided for herein or otherwise available
to them, all the rights and remedies of a secured party on default under the
Uniform Commercial Code (the "Code") in effect in the State of California at
that time.

     SECTION 12. EXPENSES. Borrower will, upon demand, pay, to the Lender, the
amount of any and all reasonable expenses, including the reasonable fees and
expenses of Lender's counsel and of any experts and agents, which the Lender may
reasonably incur in connection with the exercise of enforcement of any of the
rights of the Lender hereunder, or the failure by Borrower to perform or observe
any of the provisions hereof.

     SECTION 13. SECURITY INTEREST ABSOLUTE. All rights of the Lender and
security interests hereunder, and all obligations of Borrower hereunder, shall
be absolute and unconditional irrespective of:

     (a)  any lack of validity or enforceability of the Note or any other
agreement or instrument relating thereto;

     (b)  any change in the time, manner or place of payment of, or in any other
term of, all or any of the Obligations, or any other amendment or waiver of or
any consent to any departure from the Note;

     (c)  any exchange, release or non-perfection of any other collateral, or
any release or amendment or waiver of or consent to departure from any guaranty,
for all or any of the Obligations; or

     (d)  any other circumstance which might otherwise constitute a defense
available to, or a discharge of, Borrower in respect of the Obligations or
Borrower in respect of this Agreement, other than the payment in full of the
Obligations.

     SECTION 14. AMENDMENTS, ETC. No amendment or waiver of any provision of
this Agreement nor consent to any departure by Borrower herefrom shall in any
event be effective unless the same shall be in writing and signed by the Lender,
and then such waiver or consent shall be effective only in the specific instance
and for the specific purpose for which given.

                                      -4-
<PAGE>

     SECTION 15. Notices. All notices, requests, demands, claims, and other
communications hereunder will be in writing. Any notice, request, demand, claim,
or other communication hereunder shall be deemed duly given if (and then two
business days after) it is sent by registered or certified mail, return receipt
requested, postage prepaid, and addressed to the intended recipient as set forth
below:

                            IF TO BORROWER:
                            --------------

                            Gary L. Hess
                            34 La Cresta Drive
                            Petaluma, California 94952

                            IF TO LENDER:
                            ------------

                            SonomaWest Holdings, Inc.
                            1448 Industrial Avenue
                            Sebastopol, California  95472
                            Attention:  Chief Financial Officer

Any party may send any notice, request, demand, claim, or other communication
hereunder to the intended recipient at the address set forth above using any
other means (including personal delivery, expedited courier, messenger service,
telecopy, telex, ordinary mail, or electronic mail), but no such notice,
request, demand, claim, or other communication shall be deemed to have been duly
given unless and until it actually is received by the intended recipient. Any
party may change the address to which notices, requests, demands, claims, and
other communications hereunder are sent.

     SECTION 16. CONTINUING SECURITY INTEREST; TRANSFER OF NOTE. This Agreement
shall create a continuing security interest in the Collateral and shall (a)
remain in full force and effect until payment in full of the Obligations, (b) be
binding upon Borrower, and its successors, and (c) inure , together with the
rights and remedies of the Lender hereunder, to the benefit of the Lender, its
legal representatives, successors and assigns. Without limiting the generality
of the foregoing clause (c), Lender may assign or otherwise transfer the Note
held by it to any other person or entity, and such other person or entity shall
thereupon become vested with all the benefits in respect thereof granted to the
Lender herein or otherwise. Upon the payment in full of the Obligations,
Borrower shall be entitled to the return, upon his request and at his expense,
of such of the Collateral as shall not have been sold or otherwise applied
pursuant to the terms hereof.

     SECTION 17. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of California, excluding
conflict of laws provisions. Unless otherwise defined herein or in the Note,
terms defined in Article 9 of the Code in the State of California are used
herein as therein defined.

     SECTION 18. COUNTERPARTS. This Agreement may be executed in counterparts.

     SECTION 19. Definitions. Any defined term not defined herein shall have the
meaning ascribed to such term in the Note.

                                      -5-
<PAGE>

     IN WITNESS WHEREOF, Borrower has caused this Agreement to be duly executed
and delivered as of date first above written.

                                                SonomaWest Holdings, Inc..

                                                By_____________________________
                                                Its: __________________________

                                                Borrower:

                                                _______________________________
                                                         Gary L. Hess

                                      -6-

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