SONOMAWEST HOLDINGS INC
INDEMNIFICATION AGMT - F. SELINGER
<DOCUMENT>
<TYPE>EX-10.4
<SEQUENCE>8
<FILENAME>selinger-ia.txt
<DESCRIPTION>INDEMNIFICATION AGMT - F. SELINGER
<TEXT>
                            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 Fredric Selinger ("Indemnitee").

     WHEREAS, the Company and Indemnitee recognize the increasing  difficulty in
obtaining  directors'  and  officers'  liability   insurance,   the  significant
increases  in the  cost of such  insurance  and the  general  reductions  in the
coverage of such insurance;

     WHEREAS,  the Company and  Indemnitee  further  recognize  the  substantial
increase in corporate  litigation in general,  subjecting directors to expensive
litigation  risks at the same time as the availability and coverage of liability
insurance has been severely limited;

     WHEREAS,  Indemnitee  does not regard the current  protection  available as
adequate under the present circumstances,  and Indemnitee and other directors of
the  Company or its  subsidiaries  may not be willing  to  continue  to serve as
directors without additional protection;

     WHEREAS,  the Company  desires to attract and retain the services of highly
qualified individuals,  such as Indemnitee, to serve as directors of the Company
and its  subsidiaries  and to indemnify its directors so as to provide them with
the maximum protection 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. Indemnification.

          (a) Third Party Proceedings. The Company shall indemnify Indemnitee if
Indemnitee  is or  was a  party  or is  threatened  to be  made a  party  to any
threatened,  pending or completed action or proceeding, whether civil, criminal,
administrative or investigative  (other than an action by or in the right of the
Company)  by reason  of the fact that  Indemnitee  is or was a  director  of the
Company,  or any subsidiary of the Company,  by reason of any action or inaction
on the part of  Indemnitee  while a  director  or by  reason  of the  fact  that
Indemnitee  is or was  serving at the  request of the  Company as a director  of
another  corporation or other enterprise,  against expenses  (including  without
limitation attorneys' fees, disbursements and retainers,  accounting and witness
fees,  travel and disposition  costs,  expenses of  investigations,  judicial or
administrative  proceedings or appeals),  judgments,  fines,  penalties,  excise
taxes under the Employment  Retirement  Income  Security Act of 1974, as amended
("ERISA"),  and amounts paid in  settlement  (if such  settlement is approved in
advance by the  Company,  which  approval  shall not be  unreasonably  withheld)
actually and reasonably incurred by Indemnitee in connection with such action or
proceeding  if  Indemnitee  acted  in  good  faith  and in a  manner  Indemnitee
reasonably  believed  to be in or not  opposed  to  the  best  interests  of the
Company,  and,  with  respect  to any  criminal  action  or  proceeding,  had no
reasonable cause to believe Indemnitee's  conduct was unlawful.  The termination
of any action or proceeding by judgment, order, settlement,  conviction, or upon
a plea of nolo  contendere  or its  equivalent,  shall not, of itself,  create a
presumption  that  Indemnitee  did not act in good  faith and in a manner  which
Indemnitee  reasonably believed to be in the best interests of the Company,  or,
with respect to any criminal  action or proceeding,  had no reasonable  cause to
believe that Indemnitee's conduct was unlawful.

          (b)  Proceedings By or in the Right of the Company.  The Company shall
indemnify Indemnitee if Indemnitee was or is a party or is threatened to be made
a party to any  threatened,  pending or completed  action or proceeding by or in
the right of the Company or any  subsidiary of the Company to procure a judgment
in its favor by reason of the fact that  Indemnitee  is or was a director of the
Company or any subsidiary of the Company, by reason of any action of the Company
or subsidiary of the Company, by reason of any action or inaction on the part of
Indemnitee  while a director or by reason of the fact that  Indemnitee is or was
serving at the request of the Company as a director  of another  corporation  or
other  enterprise,  against  expenses  (including  attorneys'  fees) and, to the
fullest extent permitted by law, amounts paid in settlement, in each case to the
extent  actually and  reasonably  incurred by Indemnitee in connection  with the
defense or settlement  of such action or proceeding if Indemnitee  acted in good
faith and in a manner Indemnitee  reasonably believed to be in or not opposed to
the  best  interests  of the  Company  and  its  shareholders,  except  that  no
indemnification  shall be made in respect  of any  claim,  issue or matter as to
which  Indemnitee  shall have been  adjudged  to be liable to the Company in the
performance of Indemnitee's duty to the Company and its shareholders  unless and
only to the extent that the court in which such action or  proceeding  is or was
pending shall determine upon application  that, in view of all the circumstances
of the case,  Indemnitee  is fairly and  reasonably  entitled to  indemnity  for
expenses and then only to the extent that the court shall determine.

     2. Agreement to Serve. Indemnitee agrees to continue to serve as a director
of the Company and/or the Company's subsidiaries, as the case may be, so long as
he is duly appointed or elected and qualified in accordance  with the applicable
provisions  of the  By-laws of the Company or any  subsidiary  of the Company or
until such time as he tenders his resignation in writing.  Nothing  contained in
this  Agreement  is  intended  to create in  Indemnitee  any right to  continued
employment.

     3. Expenses; Indemnification Procedure.

          (a)  Advancement  of Expenses.  The Company shall advance all expenses
incurred by Indemnitee in connection with the investigation, defense, settlement
or appeal of any civil or criminal action or proceeding  referenced  herein (but
only amounts  actually  paid in  settlement  of any such action or  proceeding).
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 Proceeding, 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,  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,  judgments,  fines,  penalties  or  ERISA  excise  taxes  actually  or
reasonably incurred by him in the investigation,  defense,  appeal or settlement
of any civil or criminal action or proceeding,  but not, however,  for the total
amount  thereof,  the Company shall  nevertheless  indemnify  Indemnitee for the
portion of such expenses,  judgments,  fines, penalties or ERISA excise taxes 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  directors  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  directors.
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 a director  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 (including, but not limited to
               judgments,  fines,  penalties or ERISA excise taxes,  and amounts
               paid in  settlement)  which have been paid directly to Indemnitee
               by  an  insurance  carrier  under  a  policy  of  directors'  and
               officers' liability maintained by the Company;

          (v)  Claims Under Section 16(b). To indemnify  Indemnitee for expenses
               and the payment of profits  arising from the purchase and sale by
               Indemnitee  of  securities  in violation of Section  16(b) of the
               Securities  Exchange  Act of 1934,  as  amended,  or any  similar
               provisions of any federal, state or local statutory law; or

          (vi) Indemnified  Claims. To indemnify the Indemnitee for any expenses
               or liabilities of any type whatsoever  (including but not limited
               to judgments,  fines, penalties or ERISA excise taxes and amounts
               paid in  settlement)  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 and may apply to acts or
omissions of Indemnitee  which  occurred  prior to such date if Indemnitee was a
director of another  corporation  or other  enterprise,  at the time such act or
omission occurred.

     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
directors  so that  if  Indemnitee  is or was a  director  of  such  constituent
corporation, or is or was serving at the request of such constituent corporation
as a director 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/  Fredric Selinger
---------------------------------------------
            Fredric Selinger

Address:    -----------------------------
            -----------------------------

















                  [Signature page to Indemnification Agreement]



</TEXT>
</DOCUMENT>
