EXHIBIT 10.15
RESTATED AND AMENDED ADDENDUM TO PROMISSORY NOTE
THIS RESTATED AND AMENDED ADDENDUM is entered into as of August 15, 2001
by SonomaWest Holdings, Inc., ("Borrower") and payable to XXXXX FARGO BANK,
NATIONAL ASSOCIATION ("Bank") and is added to and made part or the Note, as
defined below.
WHEREAS, Borrower executed that certain promissory note and Addendum to
and Modification of Promissory Note (the "Original Addendum") dated November 17,
1988, payable to the order of Bank in the principal amount of Two Million One
Hundred Thousand Dollars ($2,100,000.00) (the "Vote"); and
WHEREAS, Borrower and Bank have agreed to certain changes in the terms of
the Original Addendum and accordingly wish to amend and restate the Original
Addendum pursuant to the terms of this Amended and Restated Addendum;
Therefore, the Original Addendum is hereby amended and restated to read
as follows:
1. The Credit Agreement dated as of April 20, 1999 executed in
connection with the Note and other credit accommodations are hereby cancelled
and terminated.
2. Since the execution of the Note, Borrower has changed its name to
"SonomaWest Holdings, Inc." All references in the Note and other Loan Documents
to Vacu-Dry Company are hereby deemed references to SonomaWest Holdings, Inc.
3. The Note is hereby modified by deleting the paragraph under the
heading "EVENTS OF DEFAULT" and replacing it with the following:
"The occurrence of any of the following shall constitute an "Event of
Default" under this Note:
(a) The failure to pay any principal, interest, fees or
other charges when due hereunder or under any contract, instrument
or document executed in connection with this Note.
(b) The filing of a petition by or against any Borrower,
any guarantor of this Note or any general partner or joint
venturer in any Borrower which is a partnership or a joint venture
(with each such guarantor, general partner and/or joint venturer
referred to herein as a "Third Party Obligor") under any
provisions of the Bankruptcy Reform Act, Title 11 of the United
States Code, as amended or recodified from time to time, or under
any similar or other law relating to bankruptcy, insolvency,
reorganization or other relief for debtors; the appointment of a
receiver, trustee, custodian or liquidator of or for any part of
the assets or property
of any Borrower or Third Party Obligor; any Borrower or Third
Party Obligor becomes insolvent, makes a general assignment for
the benefit of creditors or is generally not paying its debts as
they become due; or any attachment or like levy on any property of
any Borrower or Third Party Obligor.
(c) The death or incapacity of any individual Borrower
or Third Party Obligor, or the dissolution or liquidation of any
Borrower or Third Party Obligor which is a corporation,
partnership, joint venture or other type of entity.
(d) Any default in the payment or performance of any
obligation, or any dined event of default under any provisions of
any contract, instrument or document pursuant to which any
Borrower or Third Party Obligor has incurred any obligation for
borrowed money, any purchase obligation, or any other liability of
any kind to any person or entity, including the holder,
(e) Any financial Statement provided by any Borrower or
Third Party Obligor to Bank proves to be incorrect, false or
misleading in any material respect.
(f) My sale or transfer of all or a substantial or
material part of the assets of any Borrower or Third Party Obligor
other than in the ordinary course of its business.
(g) Any violation or breach of any provision of, or any
defined event of default under, any addendum to this Note or any
loan agreement, guaranty, security agreement, deed of trust
mortgage or other document executed in connection with or securing
this Note."
4. The following provisions are hereby deemed incorporated into the
Note:
"(a) So long as Bank remains committed to extend credit
to Borrower under this Note and until payment in full of all
obligations of Borrower hereunder, Borrower shall:
(i) provide to Bank all of the following, in form and
detail satisfactory to Bank:
(x) not later than 120 days after and as of the
end of each fiscal year, an audited financial statement of
Borrower, prepared by a certified public accountant
acceptable to Bank, to include balance sheet and income
statement;
-2-
(y) not later than 45 days after and as of each
June 30th and December 31st, an operating statement and
rent roll covering property located at 0000 Xxxxxxxxxxx
Xxxxxxx Xxxxx, Xxxxxxxxxx, XX 95472("Real Property");
(z) from time to time such other information as
Bank may reasonably request.
(ii) maintain Borrower's financial condition as follows
using generally accepted accounting principles consistently
applied and used consistently with prior practices (except to the
extent modified by the definitions herein):
(y) Debt Service Coverage Ratio not less than
1.05 to 1.00 (or, subject to the terms of the next
paragraph, 1.25 to 1.00), determined as of each fiscal year
end, with "Debt Service Coverage Ratio" calculated with
respect to the real property which secures the "Note" (the
"Real Property") and defined as (A) actual rents received
on the Real Property less the operating expenses directly
chargeable to the Real Property, not including
depreciation, and the proportionate share of joint
operating expenses not chargeable to a specific property
but chargeable to the rental operations generally, divided
by (B) scheduled debt service on the Note during the
applicable period;
(z) Liquid assets (defined as the aggregate of
unrestricted and unencumbered cash and readily marketable
securities acceptable to Bank) with an aggregate fair
market value not at any time less than Six Hundred Thousand
Dollars $600,000.00, provided however, that this covenant
shall become inoperative and Bank shall release the cash
collateral obtained under Section 5 of this Addendum if and
when the Debt Service Coverage Ratio described in the
preceding paragraph is first equal to or greater than 1.25
to 1.00, following which time the Debt Service Coverage
Ratio shall at all times be equal to or greater than 1.25
to 1.00.
(iii) not create, incur, assume or permit to exist any
indebtedness or liabilities resulting from borrowings, loans or
advances, whether secured or unsecured, matured or unmatured,
liquidated or unliquidated, joint or several, except (a) the
liabilities of Borrower to Bank, and (b) any other liabilities of
Borrower existing as of, and disclosed to Bank prior to, the date
hereof;
-3-
(iv) not merge into or consolidate with any other entity;
make any substantial change in the nature of Borrowers business as
conducted as of the date hereof; acquire all or substantially all
of the assets of any other entity; nor sell, lease, transfer or
otherwise dispose of all or a substantial or material portion of
Borrower's assets except in the ordinary course of its business;
(v) not mortgage, pledge, grant or permit to exist a
security interest in, or lien upon, all or any portion of
Borrower's assets now owned or hereafter acquired, except any of
the foregoing in favor of Bank or which is existing as of, and
disclosed to Bank in writing prior to, the date hereof.
(b) ARBITRATION:
(i) ARBITRATION. Upon the demand of any party, any
Dispute shall be resolved by binding arbitration in accordance
with the terms of this Note. A "Dispute" shall mean any action,
dispute, claim or controversy of any kind, whether in contract or
ton, statutory or common law, legal or equitable, now existing or
hereafter arising under or in connection with, or in any way
pertaining to, this Note and each other document, contract and
instrument required hereby or now or hereafter delivered to Bank
in connection herewith (collectively, the "Documents"), or any
past, present or future extensions of credit and other activities,
transactions or obligations of any kind related directly or
indirectly to any of the Documents, including without limitation,
any of the foregoing arising in connection with the exercise of
any self-help, ancillary or other remedies pursuant to any of the
Documents. Any party may by summary proceedings bring an action in
court to compel arbitration of a Dispute. Any part who fails or
refuses to submit to arbitration following a lawful demand by any
other party shall bear all costs and expenses incurred by such
other party in compelling arbitration of any Dispute.
(ii) GOVERNING RULES. Arbitration proceedings shall be
administered by the American Arbitration Association ("AAA") or
such otter administrator as the parties shall mutually agree upon
in accordance with the AAA Commercial Arbitration Rules. All
Disputes submitted to arbitration shall be resolved in accordance
with the Federal Arbitration Act (Title 9 of the United States
Code), notwithstanding any conflicting choice of law provision in
any of the Documents. The arbitration shall be conducted at a
location in California selected by the AAA or other administrator.
If there is any inconsistency between the terms hereof and any
such rules, the terms and procedures set forth herein shall
control. All statutes of limitation applicable to any Dispute
shall apply to
-4-
any arbitration proceeding. All discovery activities shall be
expressly limited to matters directly relevant to the Dispute
being arbitrated. Judgment upon any award rendered in an
arbitration may be entered in any court having jurisdiction;
provided however, that nothing contained herein shall be deemed to
be a waiver by any party that is a bank of the protections
afforded to it under 12 U.S.C. SS. 91 or any similar applicable
state law.
(iii) NO WAIVER; PROVISIONAL REMEDIES; SELF-HELP AND
FORECLOSURE. No provision hereof shall limit the right of any
party to exercise self-help remedies such as setoff, foreclosure
against or sale of any real or personal property collateral or
security, or to obtain provisional or ancillary remedies,
including without limitation injunctive relief, sequestration,
attachment, garnishment or the appointment of a receiver, from a
court of competent jurisdiction before, after or during the
pendency of any arbitration or other proceeding. The exercise of
any such remedy shall not waive the right of any party to compel
arbitration or reference hereunder.
(iv) ARBITRATOR QUALIFICATIONS AND POWERS; AWARDS.
Arbitrators must be active members of the California State Bar or
retired judges of the state or federal judiciary of California,
with expertise in the substantive law applicable to the subject
matter of the Dispute. Arbitrators are empowered to resolve
Disputes by summary rulings in response to motions filed prior to
the final arbitration hearing. Arbitrators (i) shall resolve all
Disputes in accordance with Me substantive law of the State of
California, (ii) may grant any remedy or relief that a court of
the State of California could order or grant within the scope
hereof and such ancillary relief as is necessary to make effective
any award, and (iii) shall have the power to award recovery of all
costs and fees, to impose sanctions and to take such other actions
as they deem necessary to the same extent a judge could pursuant
to the Federal Rules of Civil Procedure, the California Rules of
Civil Procedure or other applicable law. Any Dispute in which the
amount in controversy is $5,000,000 or less shall be decided by a
single arbitrator who shall not render an award of greater than
$5,000,000 (including damages, costs, fees and expenses). By
submission to a single arbitrator, each party expressly waives any
right or claim to recover more than $8,000.000. Any Dispute in
which the amount in controversy exceeds $5,000,000 shall be
decided by majority vote of a panel of three arbitrators; provided
however, that all three arbitrators must actively participate in
all hearings and deliberations.
-5-
(v) REAL PROPERTY COLLATERAL; JUDICIAL REFERENCE.
Notwithstanding anything herein to the contrary, no Dispute shall
be submitted to arbitration if the Dispute concerns indebtedness
secured directly or indirectly, in whole or in part, by any real
property unless (i) the holder of the mortgage, lion or security
interest specifically elects in writing to proceed with the
arbitration, or (ii) all parties to the arbitration waive any
rights or benefits that might accrue to them by virtue of the
single action rule statute of California, thereby agreeing that
all indebtedness and obligations of the parties, and all
mortgages, liens and security interests securing such indebtedness
and obligations, shall remain fully valid and enforceable. If any
such Dispute is not submitted to arbitration, the Dispute shall be
referred to a referee in accordance with California Code of Civil
Procedure Section 638 ET SEQ., and this general reference
agreement is intended to be specifically enforceable in accordance
with said Section 63a. A referee with the qualifications required
herein for arbitrators shall be selected pursuant to the AAA's
selection procedures. Judgment upon the decision rendered by a
referee shall be entered in the court in which such proceeding was
commenced in accordance with California Code of Civil Procedure
Sections 644 and 645.
(vi) MISCELLANEOUS. To the maximum extent practicable,
the AAA, the arbitrators and the parties shall take all action
required to conclude any arbitration proceeding within 180 days of
the firing of the Dispute with the AAA. No arbitrator or other
party to an arbitration proceeding may disclose the existence,
content or results thereof, except for disclosures of information
by a party required in the ordinary course of its business, by
applicable law or regulation, or to the extent necessary to
exercise any judicial review rights set forth herein. If more than
one agreement for arbitration by or between the parties
potentially applies to a Dispute, the arbitration provision most
directly related to the Documents or the subject matter of the
Dispute shall control. This Note may be amended or modified only
in writing signed by Bank and Borrower. If any provision of this
Note shall be held to be prohibited by or invalid under applicable
law, such provision shall be ineffective only to the extent of
such prohibition or invalidity, without invalidating the remainder
of such provision or any remaining provisions of this Note. This
arbitration provision shall survive termination, amendment or
expiration of any of the Documents or any relationship between the
parties.
5. In addition to the Real Property (in which Bank has been granted a
lien of first priority), as security for all indebtedness of Borrower to Bank
under this Note, Borrower hereby grants to Bank security interest of first
priority in Borrower's Well's Fargo Bank Business Premium Market rate Account #
1596905800 in the amount of $90,000.00.
-6-
All of the foregoing shall be evidenced by and subject to the terms of such
security agreements, financing statements, deeds of trust and other documents as
Bank shall reasonably require, all in form and substance satisfactory to Bank.
Borrower shall reimburse Bank immediately upon demand for all costs and expenses
incurred by Bank in connection with any of the foregoing security, including
without limitation, filing and recording fees and costs of appraisals, audits
and title insurance.
THIS ADDENDUM shall cancel and supersede that certain Addendum dated
November 17, 1998.
IN WITNESS WHEREOF, the parties thereto have executed this Addendum as of
the day and year first written above.
SONOMAWEST HOLDINGS, INC.
By: /s/ XXXX X. XXXX
------------
Xxxx X. Xxxx
President
-7-
