Document:

Exhibit
      10.1

     

    SBE,
      INC.

     

    DIRECTOR
      AND OFFICER BONUS PLAN

     

    This
      Director and Officer Bonus Plan (the “Plan”)
      is
      established by SBE, Inc., a Delaware corporation (the “Company”),
      effective as of September 21, 2006.

     

    1.    Purpose
      Of The Plan.
      The
      purpose of the Plan is to establish a bonus mechanism to provide incentive
      to
      executive officers and non-employee members of the Board of Directors of the
      Company to continue in the service of the Company.

     

    2.    Definitions.

     

    (a)    “Board”
shall
      mean the Board of Directors of the Company.

     

    (b)    “Bonus
      Award”
shall
      mean the compensation awarded to a Participant under the Plan upon a Triggering
      Event, calculated as follows:

     

    (i)    with
      respect to a Triggering Event that is a Change in Control or a Qualifying
      Financing, an amount of cash or Equity Securities (as determined by the Board
      in
      its sole discretion) equal in value (as determined by the Board in its sole
      discretion) to the product of (A) the dollar amount set forth in the
      Participant’s Participation Agreement and (B) (1) in the case of Participants
      who are non-employee members of the Board, the number of months elapsed since
      July 31, 2006; or (2) in the case of Participants who are executive officers
      of
      the Company, the number of Company pay periods that have elapsed since August
      15, 2006; or

     

    (ii)    with
      respect to a Discretionary Triggering Event, such award of Equity Securities
      or
      cash as determined by the Board in its sole discretion.

     

    (c)    “Code”
shall
      mean the Internal Revenue Code of 1986, as amended.

     

    (d)    “Equity
      Securities”
shall
      mean common stock, preferred stock, options, warrants or other rights to
      purchase preferred stock or common stock of the Company.

     

    (e)    “Triggering
      Event”
shall
      mean the first to occur of the following during the term of this
      Plan:

     

    (i)    there
      is
      consummated (A) a merger, consolidation or similar transaction to which the
      Company is a party and, immediately after the consummation of such merger,
      consolidation or similar transaction, the stockholders of the Company
      immediately prior thereto do not own, directly or indirectly, outstanding voting
      securities representing more than 50% of the combined outstanding voting power
      of the surviving entity in such merger, consolidation or similar transaction
      or
      more than 50% of the combined outstanding voting power of the parent of the
      surviving entity in such merger, consolidation or similar transaction, or (B)
      a
      sale, lease, license or other disposition of all or substantially all of the
      consolidated assets of the Company and its subsidiaries, other than a sale,
      lease, license or other disposition of all or substantially all of the
      consolidated assets of the Company and its subsidiaries to an entity, more
      than
      50% of the combined voting power of the voting securities of which are owned
      by
      stockholders of the Company in substantially the same proportions as their
      ownership of the Company immediately prior to such sale, lease, license or
      other
      disposition (any such event described in this paragraph (i) is referred to
      as a
“Change
      in Control”);

     

    
      
         

      

      
         

        
          

        

      

      
         

      

       

    

    (ii)    the
      Company consummates a sale of equity or debt securities resulting in at least
      $2
      million in net proceeds (after deduction of any underwriting commissions,
      placement agent fees, attorneys’ fees and other transaction expenses, as
      determined by the Board in its sole discretion) (a “Qualifying
      Financing”);
      or

     

    (iii)    there
      occurs any such other event as the Board in its sole discretion determines
      shall
      constitute a Triggering Event (a “Discretionary
      Triggering Event”).

     

    3.    Operation
      Of The Plan.

     

    (a)    Eligibility
      to Participate.
      An
      individual shall be eligible to participate in the Plan if he or she is an
      executive officer of the Company or non-employee member of the Board and is
      designated as a participant in the Plan (a “Participant”)
      by the
      Board, and is notified in writing of such designation, provided he or she
      accepts such designation subject to such terms as determined by the Board at
      the
      time of designation (the “Participation
      Agreement”).
      An
      individual’s eligibility to participate in the Plan shall terminate as of the
      date on which such individual’s employment relationship or directorship with the
      Company is terminated.

     

    (b)    Eligibility
      for Payment of Bonus Awards.
      Unless
      the Board has determined otherwise with respect to an individual Participant,
      as
      evidenced by the Participation Agreement signed by a duly authorized officer
      of
      the Company and such Participant, Participants shall be entitled to payment
      of
      his or her Bonus Award, as follows: 

     

    (i)    A
      Participant must remain in a continuous employment relationship or directorship
      with the Company until a Triggering Event occurs, and must execute a binding
      release of claims against the Company at the time of a Triggering Event in
      form
      and substance acceptable to the Board in its sole discretion; and

     

    (ii)    A
      Participant shall not be entitled to any portion of a Bonus Award provided
      under
      this Plan, nor shall such Bonus Award be payable or accrue (either in whole
      or
      in part), until a Triggering Event occurs. The Board will endeavor to pay Bonus
      Awards under the Plan as promptly as possible following occurrence of a
      Triggering Event.

     

    (c)    Payment
      of Bonus Awards. 

     

    (i)    If
      the
      conditions set forth in the Plan are satisfied, each Participant shall be
      entitled to receive a Bonus Award from the Company upon a Triggering Event.
      Each
      Participant’s Bonus Award shall be paid by the Company or, if a Change in
      Control has occurred, its successor. While it is generally anticipated that
      each
      Participant will receive his or her Bonus Award at the time and in the form
      or
      forms of payment as are set forth in the Plan, the Board shall have the
      discretion to structure the form and timing of such payments to accommodate
      the
      business objectives of the Company in the Triggering Event, which may include,
      but not be limited to, (A) consideration of the tax consequences to the Company,
      its stockholders and the Participants, (B) financial accounting consequences
      for
      the Company or any purchaser or acquiror, (C) the availability of cash to fund
      Bonus Awards, and (D) satisfaction of any applicable securities law
      requirements. Without limiting the foregoing, no payment under this Plan shall
      be made in the form of Equity Securities or securities of an acquiring or
      surviving corporation unless and until the issuance of such securities has
      been
      registered under the Securities Act of 1933 as amended, or in the opinion of
      counsel for the issuer such registration is not required. 

     

    
      
         

      

      
         

        
          

        

      

      
         

      

       

    

    (ii)    Any
      Participant may decline all or any portion of his or her Bonus Award by
      notifying the Company in writing any time prior to the payment of such bonus.
      Any Bonus Award declined pursuant to this Section 3(c)(ii) shall not be payable
      to other Participants.

     

    (iii)    Under
      no
      circumstance shall any amount be payable to any Participant hereunder later
      than
      the time payments must be made to be exempt from the requirements of Section
      409A of the Code and the regulations thereunder.

     

    (iv)    In
      the
      event any payments to which a Participant becomes entitled in accordance with
      the provisions of the Plan or otherwise would constitute a parachute payment
      under Section 280G of the Code and applicable regulations, then such payments
      under the Plan will be subject to reduction to the extent necessary to assure
      that the Participant receives only the greater of (1) the amount of those
      payments that would not constitute such a parachute payment and (2) the amount
      that yields the Participant the greatest after-tax amount of benefits after
      taking into account any excise tax imposed on the payments provided to the
      Participant under the Plan or any other payments under Section 4999 of the
      Code.

     

    4.    Plan
      Administration.
      The
      Board shall administer this Plan. Except as otherwise set forth herein, the
      Board shall have the power, in its discretion and without limitation, to make
      any and all decisions concerning the implementation or interpretation of the
      Plan, including the power to determine whether an individual is a Participant,
      to determine whether a Triggering Event has occurred and to make the payments
      contemplated by the Plan. The rules, interpretations, computations and other
      actions of the Board shall be binding and conclusive on all
      persons.

     

    5.    Amendment
      Of The Plan. 
      This
      Plan may be amended by the Board or, if applicable, the Board of Directors of
      the Company’s successor.

     

    6.    Termination
      Of The Plan.
      This
      Plan shall terminate and no amounts shall be payable hereunder as of and
      effective on the earliest of (a) the payment of Bonus Awards to the Participants
      in connection with a Triggering Event; (b) any liquidation, dissolution or
      winding up of the Company; or (c) the first anniversary of the effective date
      of
      the Plan first set forth above. 

     

    7.    No
      Guarantee Of Employment.
      This
      Plan is intended to provide a financial incentive to Participants and is not
      intended to confer any rights upon Participants to continued employment or
      appointment or election to the Board. All Board members shall be subject to
      review and recommendation for re-election by the Board’s Nominating and
      Governance Committee, nomination by the Board for such re-election, and
      re-election by the stockholders of the Company. Employee Participants’
employment shall remain at will and subject to termination by either the Company
      or Participant at any time, with or without cause or notice.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

       

    

    8.    No
      Assignment Or Transfer By Participant.
      None of
      the rights, benefits, obligations or duties under this Plan may be assigned
      or
      transferred by any Participant. Any purported assignment or transfer by any
      such
      Participant shall be void.

     

    9.    Severability.
      Should
      any provision of this Plan be held invalid by an administrative tribunal, court
      of law or other authoritative body, then the remaining provisions shall continue
      in force and given their full effect in a manner consistent with the spirit
      and
      purpose of the Plan.

     

    10.    Governing
      Law.
      The
      rights and obligations of a Participant under this Plan shall be governed by
      and
      interpreted, construed and enforced in accordance with the laws of the State
      of
      California without regard to its or any other jurisdiction’s conflicts of laws
      principles.

     

    11.    Withholding
      Of Compensation.
      The
      Company shall deduct and withhold from the compensation or other amounts payable
      to Participants hereunder as a Bonus Award, or otherwise in connection with
      such
      Participants’ employment, any amounts required to be deducted and withheld by
      the Company under the provisions of any applicable federal, state and local
      statute, law, regulation, ordinance or order, including any excise taxes imposed
      under Section 4999 of the Code.

     

    12.    Assumption
      By Acquiror.
      The
      Company’s obligations to pay the Bonus Award to Participants hereunder shall be
      deemed to have been appropriately satisfied if the acquiring or surviving
      corporation in a Change in Control assumes such obligations and pays the Bonus
      Award as provided hereunder within a reasonable period following the
      Consummation of a Change in Control.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. 

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

       

    

    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.

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

       

    

    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.

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

       

    

    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.

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

       

    

    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.

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

       

    

    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.

    

    [Remainder
      of page intentionally left blank]

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    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 

            

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    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

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00110-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00110-of-00352.parquet"}]]