Document:

Exhibit
                  10.5

              
	 	 	 
	 	
                TERM
                  NOTE

              	 
	
                $1,690,000.00

              	 	
                Santa
                  Rosa, California

              
	 	 	
                March
                  1, 2004

              

      

    

    
       

      FOR
        VALUE
        RECEIVED, the undersigned SONOMAWEST HOLDINGS, INC. (“Borrower”)
        promises to pay to the order of WELLS FARGO BANK, NATIONAL ASSOCIATION (“Bank”)
        at its office at it’s North Coast Regional Commercial Banking Office at 200 B
        Street, 3rd Floor, Santa Rosa, California, or at such other place as the
        holder
        hereof may designate, in lawful money of the United States of America and
        in
        immediately available funds, the principal sum of One
        Million Six Hundred Ninety Thousand Dollars ($1,690,000.00),
        with
        interest thereon as set forth herein.

      

      DEFINITIONS:

      

      As
        used
        herein, the following terms shall have the meanings set forth after each,
        and
        any other term defined in this Note shall have the meaning set forth at the
        place defined:

      

      (a) “Business
        Day” means any day except a Saturday, Sunday or any other day on which
        commercial banks in California are authorized or required by law to
        close.

      

      (b) “Fixed
        Rate Term” means a period commencing on a Business Day and continuing for 1, 2
        or 3 months, as designated by Borrower, during which all or a portion of
        the
        outstanding principal balance of this Note bears interest determined in relation
        to LIBOR; provided however, that no Fixed Rate Term may be selected for a
        principal amount less than Five Hundred Thousand Dollars ($500,000.00); and
        provided further, that no Fixed Rate Term shall extend beyond the scheduled
        maturity date hereof. If any Fixed Rate Term would end on a day which is
        not a
        Business Day, then such Fixed Rate Term shall be extended to the next succeeding
        Business Day.

      

      (c) “LIBOR”
        means the rate per annum (rounded upward, if necessary, to the nearest whole
        1/8
        of 1%) and determined pursuant to the following formula:

      

      LIBOR
        =
 Base
        LIBOR 
           

      100%
        -
        LIBOR Reserve Percentage

      

      (i) “Base
        LIBOR” means the rate per annum for United States dollar deposits quoted by Bank
        as the Inter-Bank Market Offered Rate, with the understanding that such rate
        is
        quoted by Bank for the purpose of calculating effective rates of interest
        for
        loans making reference thereto, on the first day of a Fixed Rate Term for
        delivery of funds on said date for a period of time approximately equal to
        the
        number of days in such Fixed Rate Term and in an amount approximately equal
        to
        the principal amount to which such Fixed Rate Term applies. Borrower understands
        and agrees that Bank may base its quotation of the Inter-Bank Market Offered
        Rate upon such offers or other market indicators of the Inter-Bank Market
        as
        Bank in its discretion deems appropriate including, but not limited to, the
        rate
        offered for U.S. dollar deposits on the London Inter-Bank Market.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      (ii) “LIBOR
        Reserve Percentage” means the reserve percentage prescribed by the Board of
        Governors of the Federal Reserve System (or any successor) for “Eurocurrency
        Liabilities” (as defined in Regulation D of the Federal Reserve Board, as
        amended), adjusted by Bank for expected changes in such reserve percentage
        during the applicable Fixed Rate Term.

      

      (d) “Prime
        Rate” means at any time the rate of interest most recently announced within Bank
        at its principal office as its Prime Rate, with the understanding that the
        Prime
        Rate is one of Bank’s base rates and serves as the basis upon which effective
        rates of interest are calculated for those loans making reference thereto,
        and
        is evidenced by the recording thereof after its announcement in such internal
        publication or publications as Bank may designate.

      

      INTEREST:

      

      (a) Interest.
        The
        outstanding principal balance of this Note shall bear interest (computed
        on the
        basis of a 360-day year, actual days elapsed) either (i) at a fluctuating
        rate
        per annum one-quarter percent (0.25%) above the Prime Rate
        in effect
        from time to time, or (ii) at a fixed rate per annum determined by Bank to
        be
        three and one quarter percent (3.25%) above LIBOR in effect on the first
        day of
        the applicable Fixed Rate Term. When interest is determined in relation to
        the
        Prime Rate, each change in the rate of interest hereunder shall become effective
        on the date each Prime Rate change is announced within Bank. With respect
        to
        each LIBOR selection hereunder, Bank is hereby authorized to note the date,
        principal amount, interest rate and Fixed Rate Term applicable thereto and
        any
        payments made thereon on Bank’s books and records (either manually or by
        electronic entry) and/or on any schedule attached to this Note, which notations
        shall be prima facie evidence of the accuracy of the information
        noted.

      

      (b) Selection
        of Interest Rate Options.
        At any
        time any portion of this Note bears interest determined in relation to LIBOR,
        it
        may be continued by Borrower at the end the Fixed Rate Term applicable thereto
        so that all or a portion thereof bears interest determined in relation to
        the
        Prime Rate or to LIBOR for a new Fixed Rate Term designated by Borrower.
        At any
        time any portion of this Note bears interest determined in relation to the
        Prime
        Rate, Borrower may convert all or a portion thereof so that it bears interest
        determined in relation to LIBOR for a Fixed Rate Term designated by Borrower.
        At
        the time this Note is disbursed or Borrower wishes to select a LIBOR option
        for
        all or a portion of the outstanding principal balance hereof, and at the
        end of
        each Fixed Rate Term, Borrower shall give Bank notice specifying: (i) the
        interest rate option selected by Borrower; (ii) the principal amount subject
        thereto; and (iii) for each LIBOR selection, the length of the applicable
        Fixed
        Rate Term. Any such notice may be given by telephone (or such other electronic
        method as Bank may permit) so long as, with respect to each LIBOR selection,
        (A) if requested by Bank, Borrower provides to Bank written confirmation
        thereof not later than three (3) Business Days after such notice is
        given,
        and (B) such notice is given to Bank prior to 10:00 a.m. on the first day
        of the
        Fixed Rate Term or at a later time during any Business Day if Bank, at its
        sole
        option but without obligation to do so, accepts Borrower's notice and quotes
        a
        fixed rate of Borrower. If Borrower does not immediately accept a
        fixed
        rate when quoted by Bank, the quoted rate shall expire and any subsequent
        LIBOR request from Borrower shall be subject to a redermination by Bank of
        the
        applicable fixed rate. If no specific designation of interest is made at
        the
        time this Note is disbursed or at the end of any Fixed Rate Term, Borrower
        shall
        be deemed to have made a Prime Rate interest selection for this Note or the
        principal amount to which such Fixed Rate Term applied.

      

      
        
          
          

        

        
          -2-

          
            

          

        

        
          
          

        

      

       

      (c) Taxes
        and Regulatory Costs.
        Borrower shall pay to Bank immediately upon demand, in addition to any other
        amounts due or to become due hereunder, any and all (i) withholdings, interest
        equalization taxes, stamp taxes or other taxes (except income and franchise
        taxes) imposed by any domestic or foreign governmental authority and related
        in
        any manner to LIBOR, and (ii) future, supplemental, emergency or other charges
        in the LIBOR Reserve Percentage, assessment rates imposed by the Federal
        Deposit
        Insurance Corporation, or similar requirements or costs imposed by any domestic
        or foreign govermental authority or resulting from compliance by Bank with
        any
        request or directive (whether or not having the force of law) from any central
        bank or other governmental authority and related in any manner to LIBOR to
        the
        extent they are not included in the calculation of LIBOR. In determining
        which
        of the foregoing are attributable to any LIBOR option available to Borrower
        hereunder, any reasonable allocation made by Bank among its operations shall
        be
        conclusive and binding upon Borrower.

      
        
          
          

        

        
          -3-

          
            

          

        

        
          
          

        

      

      (d) Payment
        of Interest.
        Interest accrued on this Note shall be payable on the first day of each month,
        commencing April 1, 2004.

      

      (e) Default
        Interest.
        From
        and after the maturity date of this Note, or such earlier date as all principal
        owing hereunder becomes due and payable by acceleration or otherwise, the
        outstanding principal balance of this Note shall bear interest until paid
        in
        full at an increased rate per annum (computed on the basis of a 360-day year,
        actual days elapsed) equal to four percent (4%) above the rate of interest
        from
        time to time applicable to this Note.

      

      REPAYMENT
        AND PREPAYMENT:

      

      (a) Repayment. Principal
        shall be payable on the first day of each month in installments of Four Thousand
        Six Hundred Fifty and no/100 dollars ($4,650.00) each, commencing April 1,
        2004,
        and continuing up to and including November 1, 2005, with a final installment
        consisting of all remaining unpaid pricipal due and payable in full on December
        1, 2005.

       

      
        
          
          

        

        
          -4-

          
            

          

        

        
          
          

        

      

       

      (b) Application
        of Payments.
        Each
        payment made on this Note shall be credited first, to any interest then due
        and
        second, to the outstanding principal balance hereof. All payments credited
        to
        principal shall be applied first, to the outstanding principal balance of
        this
        Note which bears interest determined in relation to the Prime Rate, if any,
        and
        second, to the outstanding principal balance of this Note which bears interest
        determined in relation to LIBOR, with such payments applied to the oldest
        Fixed
        Rate Term first.

      

      (c) Prepayment.

      

      Prime
        Rate.
        Borrower may prepay principal on any portion of this Note which bears interest
        determined in relation to the Prime Rate at any time, in any amount and without
        penalty.

      

      LIBOR.
        Borrower
        may prepay principal on any portion of this Note which bears interest determined
        in relation to LIBOR at any time and in the minimum amount of Five Hundred
        Thousand Dollars ($500,000.00); provided however, that if the outstanding
        principal balance of such portion of this Note is less than said amount,
        the
        minimum prepayment amount shall be the entire outstanding principal balance
        thereof. In consideration of Bank providing this prepayment option to Borrower,
        or if any such portion of this Note shall become due and payable at any time
        prior to the last day of the Fixed Rate Term applicable thereto by acceleration
        or otherwise, Borrower shall pay to Bank immediately upon demand a fee which
        is
        the sum of the discounted monthly differences for each month from the month
        of
        prepayment through the month in which such fixed Rate Term matures, calculated
        as follows for each such month:

      

      
        	 	
                (i)

              	
                Determine
                  the amount of interest which would have accrued each month on the
                  amount
                  prepaid at the interest rate applicable to such amount had it remained
                  outstanding until the last day of the Fixed Rate Term applicable
                  thereto.

              

      

      

      
        	 	
                (ii)

              	
                Subtract
                  from the amount determined in (i) above the amount of interest
                  which would
                  have accrued for the same month on the amount prepaid for the remaining
                  term of such Fixed Rate Term at LIBOR in effect on the date of
                  prepayment
                  for new loans made for such term and in a principal amount equal
                  to the
                  amount prepaid.

              

      

      

      
        	 	
                (iii)

              	
                If
                  the result obtained in (ii) for any month is greater than zero,
                  discount
                  that difference by LIBOR used in (ii)
                  above.

              

      

      

      Each
        Borrower acknowledges that prepayment of such amount may result in Bank
        incurring additional costs, expenses and/or liabilities, and that it is
        difficult to a certain the full extent of such costs, expenses and/or
        liabilities. Each Borrower, therefore, agrees to pay the above-described
        prepayment fee and agrees that said amount represents a reasonable estimate
        of
        the prepayment costs, expenses and/or liabilities of Bank. If Borrower fails
        to
        pay any prepayment fee when due, the amount of such prepayment fee shall
        thereafter bear interest until paid at a rate per annum two percent (2%)
        above
        the Prime Rate in effect from time to time (computed on the basis of a 360-day
        year, actual days elapsed). 

      

      
        
          
          

        

        
          -5-

          
            

          

        

        
          
          

        

      

       

      All
        prepayments of principal shall be applied on the most remote principal
        installment or installments then unpaid.

      

      EVENTS
        OF
        DEFAULT:

      

      This
        Note
        is made pursuant to and is subject to the terms and conditions of that certain
        Credit Agreement between Borrower and Bank dated as of March 1, 2004, as
        amended
        form time to time (the “Credit Agreement”). Any default in the payment or
        performance of any obligation under this Note, or any defined event of default
        under the Credit Agreement, shall constitute an “Event of Default” under this
        Note.

      

      MISCELLANEOUS:

      

      (a) Remedies.
        Upon
        the sale, transfer, hypothecation, assignment or other encumbrance, whether
        voluntary, involuntary or by operation of law, of all or any interest in
        any
        real property securing this Note, or upon] the occurrence of any Event of
        Default, the holder of this Note, at the holder’s option, may declare all sums
        of principal and interest outstanding hereunder to be immediately due and
        payable without presentment, demand, notice of nonperformance, notice of
        protest, protest or notice of dishonor, all of which are expressly waived
        by
        each Borrower. Each Borrowers shall pay to the holder immediately upon demand
        the full amount of all payments, advances, charges, costs and expenses,
        including reasonable attorneys’ fees (to include outside counsel fees and all
        allocated costs of the holder’s in-house counsel), expended or incurred by the
        holder in connection with the enforcement of the holder’s rights and/or the
        collection of any amounts which become due to the holder under this Note,
        and
        the prosecution or defense of any action in any way related to this Note,
        including without limitation, any action for declaratory relief, whether
        incurred at the trial or appellate level, in an arbitration proceeding or
        otherwise, and including any of the foregoing incurred in connection with
        any
        bankruptcy proceeding (including without limitation, any adversary proceedings,
        contested matter or motion brought by Bank or any other person) relating
        to any
        Borrower or any other person or entity.

      

      (b) Obligations
        Joint and Several.
        Should
        more than one person or entity sign this Note as a Borrower, the obligations
        of
        each such Borrower shall be joint and several.

      

      (c) Governing
        Law.
        This
        Note shall be governed by and construed in accordance with the laws of the
        State
        of California.

      

      This
        Note
        is secured by a Deed of Trust dated November 17, 1998.

       

      
        
          
          

        

        
          -6-

          
            

          

        

        
          
          

        

      

      

      IN
        WITNESS WHEREOF, the undersigned has executed this Note as of the date first
        written above.

      

      SONOMAWEST
        HOLDINGS, INC.

       

      By:        /s/ Roger
        Mertz                              

      Roger
        Mertz

      Chairman
        of the Board

      

      
        
          
          

        

        
          -7-Exhibit
        10.6

      CREDIT
        AGREEMENT

      

      
        

THIS
        AGREEMENT is entered into as of March 1, 2004, by and between SONOMAWEST
        HOLDINGS, INC., a California corporation ("Borrower"), and WELLS FARGO BANK,
        NATIONAL ASSOCIATION ("Bank").

      

      RECITALS

      

      Borrower
        has requested that Bank extend or continue credit to Borrower as described
        below, and Bank has agreed to provide such credit to Borrower on the terms
        and
        conditions contained herein.

      

      NOW
        THEREFORE, for valuable consideration, the receipt and sufficiency of which
        are
        hereby acknowledged, Bank and Borrower hereby agree as follows:

      

      ARTICLE
        I

      CREDIT
        TERMS

      

      SECTION
        1.1. TERM
        LOAN.

      

      (a) Term
        Loan.
        Subject
        to the terms and conditions of this Agreement, Bank hereby agrees to make
        a loan
        to Borrower in the principal amount of One Million Six Hundred Ninety Thousand
        Dollars ($1,690,000.00) ("Term Loan"), the proceeds of which shall be used
        to
        refinance Borrower's outstanding credit accommodations from Bank. Borrower's
        obligation to repay the Term Loan shall be evidenced by a promissory note
        dated
        as of March 1, 2004 ("Term Note"), all terms of which are incorporated herein
        by
        this reference. Bank's commitment to grant the Term Loan shall terminate
        on
        April 1, 2004.

      

      (b) Repayment.
        The
        principal amount of the Term Loan shall be repaid in accordance with the
        provisions of the Term Note.

      

      (c) Prepayment.
        Borrower may prepay principal on the Term Loan solely in accordance with
        the
        provisions of the Term Note.

      

      SECTION
        1.2. INTEREST/FEES.

      

      (a) Interest.
        The
        outstanding principal balance of the Term Loan shall bear interest at the
        rate
        of interest set forth in the Term Note.

      

      (b) Computation
        and Payment.
        Interest shall be computed on the basis of a 360-day year, actual days elapsed.
        Interest shall be payable at the times and place set forth in each promissory
        note or other instrument or document required hereby.

      

      
        
          
          

        

        
          -1-

          
            

          

        

        
          
          

        

      

      

      (c) Commitment
        Fee.
        Borrower shall pay to Bank a non-refundable commitment fee for the Term Loan
        equal to $5,000.00, which fee shall be due and payable in full upon execution
        this Agreement.

      

      SECTION
        1.3. COLLECTION
        OF PAYMENTS. Borrower authorizes Bank to collect all principal, interest
        and
        fees due under the Term Loan by charging Borrower's deposit account number
        4001175900 with Bank, or any other deposit account maintained by Borrower
        with
        Bank, for The full amount thereof. Should there be insufficient funds in
        any
        such deposit account to pay all such sums when due, the full amount of such
        deficiency shall be immediately due and payable by Borrower.

      

      SECTION
        1.4. COLLATERAL.

      

      As
        security for all indebtedness of Borrower to Bank subject hereto, Borrower
        hereby grants to Bank a lien of not less than first priority on that certain
        real property located at 1365 Gravenstein Highway South, Sebastopol, CA 95472
        ("Real Property").

      

      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.

      

      ARTICLE
        II

      REPRESENTATIONS
        AND WARRANTIES,

      

      Borrower
        makes the following representations and warranties to Bank, which
        representations and warranties shall survive the execution of this Agreement
        and
        shall continue in full force and effect until the full and final payment,
        and
        satisfaction and discharge, of all obligations of Borrower to Bank subject
        to
        this Agreement.

      

      SECTION
        2.1. LEGAL
        STATUS. Borrower is a corporation, duly organized and existing and in good
        standing under the laws of the State of California, and is qualified or licensed
        to do business (and is in good standing as a foreign corporation, if applicable)
        in all jurisdictions in which such qualification or licensing is required
        or in
        which the failure to so qualify or to be so licensed could have a material
        adverse effect on Borrower.

      

      SECTION
        2.2. AUTHORIZATION
        AND VALIDITY. This Agreement and each promissory note, contract, instrument
        and
        other document required hereby or at any time hereafter delivered to Bank
        in
        connection herewith (collectively, the "Loan Documents") have been duly
        authorized, and upon their execution and delivery in accordance with the
        provisions hereof will constitute legal, valid and binding agreements and
        obligations of Borrower or the party which executes the same, enforceable
        in
        accordance with their respective terms.

      

      
        
          
          

        

        
          -2-

          
            

          

        

        
          
          

        

      

      SECTION
        2.3. NO
        VIOLATION. The execution, delivery and performance by Borrower of each of
        the
        Loan Documents do not violate any provision of any law or regulation, or
        contravene any provision of the Articles of Incorporation or By-Laws of
        Borrower, or result in any breach of or default under any contract, obligation,
        indenture or other instrument to which Borrower is a party or by which Borrower
        may be bound.

      

      SECTION
        2.4. LITIGATION.
        There are no pending, or to the best of Borrower's knowledge threatened,
        actions, claims, investigations, suits or proceedings by or before any
        governmental authority, arbitrator, court or administrative agency which
        could
        have a material adverse effect on the financial condition or operation of
        Borrower other than those disclosed by Borrower to Bank in writing prior
        to the
        date hereof.

      

      SECTION
        2.5. CORRECTNESS
        OF FINANCIAL STATEMENT. The financial statement of Borrower dated June 30,
        2003,
        a true copy of which has been delivered by Borrower to Bank prior to the
        date
        hereof, (a) is complete and correct and presents fairly the financial condition
        of Borrower, (b) discloses all liabilities of Borrower that are required
        to be
        reflected or reserved against under generally accepted accounting principles,
        whether liquidated or unliquidated, fixed or contingent, and (c) has been
        prepared in accordance with generally accepted accounting principles
        consistently applied. Since the date of such financial statement there has
        been
        no material adverse change in the financial condition of Borrower, nor has
        Borrower mortgaged, pledged, granted a security interest in or otherwise
        encumbered any of its assets or properties except in favor of Bank or as
        otherwise permitted by Bank in writing.

      

      SECTION
        2.6. INCOME
        TAX RETURNS. Borrower has no knowledge of any pending assessments or adjustments
        of its income tax payable with respect to any year.

      

      SECTION
        2.7. NO
        SUBORDINATION. There is no agreement, indenture, contract or instrument to
        which
        Borrower is a party or by which Borrower may be bound that requires the
        subordination in right of payment of any of Borrower's obligations subject
        to
        this Agreement to any other obligation of Borrower.

      

      SECTION
        2.8. PERMITS,
        FRANCHISES. Borrower possesses, and will hereafter possess, all permits,
        consents, approvals, franchises and licenses required and rights to all
        trademarks, trade names, patents, and fictitious names, if any, necessary
        to
        enable it to conduct the business in which it is now engaged in compliance
        with
        applicable law.

      

      SECTION
        2.9. ERISA.
        Borrower is in compliance in all material respects with all applicable
        provisions of the Employee Retirement Income Security Act of 1974, as amended
        or
        recodified from time to time ("ERISA"); Borrower has not violated any provision
        of any defined employee pension benefit plan (as defined in ERISA) maintained
        or
        contributed to by Borrower (each, a "Plan"); no Reportable Event as defined
        in
        ERISA has occurred and is continuing with respect to any Plan initiated by
        Borrower; Borrower has met its minimum funding requirements under ERISA with
        respect to each Plan; and each Plan will be able to fulfill its benefit
        obligations as they come due in accordance with the Plan documents and under
        generally accepted accounting principles.

      

      
        
          
          

        

        
          -3-

          
            

          

        

        
          
          

        

      

      SECTION
        2.10. OTHER
        OBLIGATIONS. Borrower is not in default on any obligation for borrowed money,
        any purchase money obligation or any other material lease, commitment, contract,
        instrument or obligation.

      

      SECTION
        2.11. ENVIRONMENTAL
        MATTERS. Except as disclosed by Borrower to Bank in writing prior to the
        date
        hereof, Borrower is in compliance in all material respects with all applicable
        federal or state environmental, hazardous waste, health and safety statutes,
        and
        any rules or regulations adopted pursuant thereto, which govern or affect
        any of
        Borrower's operations and/or properties, including without limitation, the
        Comprehensive Environmental Response, Compensation and Liability Act of 1980,
        the Superfund Amendments and Reauthorization Act of 1986, the Federal Resource
        Conservation and Recovery Act of 1976, and the Federal Toxic Substances Control
        Act, as any of the same may be amended, modified or supplemented from time
        to
        time. None of the operations of Borrower is the subject of any federal or
        state
        investigation evaluating whether any remedial action involving a material
        expenditure is needed to respond to a release of any toxic or hazardous waste
        or
        substance into the environment. Borrower has no material contingent liability
        in
        connection with any release of any toxic or hazardous waste or substance
        into
        the environment.

      

      SECTION
        2.12. REAL
        PROPERTY COLLATERAL. Except as disclosed by Borrower to Bank in writing prior
        to
        the date hereof, with respect to any real property collateral required
        hereby:

      

      (a) All
        taxes, governmental assessments, insurance premiums, and water, sewer and
        municipal charges, and rents (if any) which previously became due and owing
        in
        respect thereof have been paid as of the date hereof.

      

      (b) There
        are
        no mechanics' or similar liens or claims which have been filed for work,
        labor
        or material (and no rights are outstanding that under law could give rise
        to any
        such lien) which affect all or any interest in any such real property and
        which
        are or may be prior to or equal to the lien thereon in favor of
        Bank.

      

      (c) None
        of
        the improvements which were included for purpose of determining the appraised
        value of any such real property lies outside of the boundaries and/or building
        restriction lines thereof, and no improvements on adjoining properties
        materially encroach upon any such real property.

      

      (d) There
        is
        no pending, or to the best of Borrower's knowledge threatened, proceeding
        for
        the total or partial condemnation of all or any portion of any such real
        property, and all such real property is in good repair and free and clear
        of any
        damage that would materially and adversely affect the value thereof as security
        and/or the intended use, thereof.

      

      
        
          
          

        

        
          -4-

          
            

          

        

        
          
          

        

      

      

      ARTICLE
        III

      CONDITIONS

      

      SECTION
        3.1. CONDITIONS
        OF INITIAL EXTENSION OF CREDIT. The obligation of Bank to extend any credit
        contemplated by this Agreement is subject to the fulfillment to Bank's
        satisfaction of all of the following conditions:

      

      (a) Approval
        of Bank Counsel.
        All
        legal matters incidental to the extension of credit by Bank shall be
        satisfactory to Bank's counsel.

      

      (b) Documentation.
        Bank
        shall have received, in form and substance satisfactory to Bank, each of
        the
        following, duly executed:

      

      (i) This
        Agreement and each promissory note or other instrument or document required
        hereby.

      (ii) Corporate
        Resolution: Borrowing.

      (iii) Certificate
        of Incumbency.

      (iv) Deed
        of
        Trust and Assignment of Rents and Leases and any modifications.

      (v) Such
        other documents as Bank may require under any other Section of this
        Agreement.

      

      (c) Financial
        Condition.
        There
        shall have been no material adverse change, as determined by Bank, in the
        financial condition or business of Borrower, nor any material decline, as
        determined by Bank, in the market value of any collateral required hereunder
        or
        a substantial or material portion of the assets of Borrower.

      

      (d) Insurance.
        Borrower shall have delivered to Bank evidence of insurance coverage on all
        Borrower's property, in form, substance, amounts, covering risks and issued
        by
        companies satisfactory to Bank, and where required by Bank, with loss payable
        endorsements in favor of Bank, including without limitation, policies of
        fire
        and extended coverage insurance covering all real property collateral required
        hereby, with replacement cost and mortgagee loss payable endorsements, and
        such
        policies of insurance against specific hazards affecting any such real property
        as may be required by governmental regulation or Bank.

       

      (e) Appraisals.
        Bank
        shall have obtained, at Borrower's cost, an appraisal of all real property
        collateral required hereby, and all improvements thereon, issued by an appraiser
        acceptable to Bank and in form, substance and reflecting values satisfactory
        to
        Bank, in its discretion.

       

      (f) Title
        Insurance.
        Bank
        shall have received an ALTA Policy of Title Insurance, with such endorsements
        as
        Bank may require, issued by a company and in form and substance satisfactory
        to
        Bank, in such amount as Bank shall require, insuring Bank's lien on the real
        property collateral required hereby to be of first priority, subject only
        to
        such exceptions as Bank shall approve in its discretion, with all costs thereof
        to be paid by Borrower.

      

      
        
          
          

        

        
          -5-

          
            

          

        

        
          
          

        

      

      (g) Tax
        Service Contract.
        Borrower shall have procured and delivered to Bank, at Borrower's cost, such
        tax
        service contract as Bank shall require for any real property collateral required
        hereby, to remain in effect as long as such real property secures any
        obligations of Borrower to Bank as required hereby.

      

      SECTION
        3.2. CONDITIONS
        OF EACH EXTENSION OF CREDIT. The obligation of Bank to make each extension
        of
        credit requested by Borrower hereunder shall be subject to the fulfillment
        to
        Bank's satisfaction of each of the following conditions:

      

      (a) Compliance.
        The
        representations and warranties contained herein and in each of the other
        Loan
        Documents shall be true on and as of the date of the signing of this Agreement
        and on the date of each extension of credit by Bank pursuant hereto, with
        the
        same effect as though such representations and warranties had been made on
        and
        as of each such date, and on each such date, no Event of Default as defined
        herein, and no condition, event or act which with the giving of notice or
        the
        passage of time or both would constitute such an Event of Default, shall
        have
        occurred and be continuing or shall exist.

      

      (b) Documentation.
        Bank
        shall have received all additional documents which may be required in connection
        with such extension of credit.

      

      ARTICLE
        IV

      AFFIRMATIVE
        COVENANTS

      

      Borrower
        covenants that so long as Bank remains committed to extend credit to Borrower
        pursuant hereto, or any liabilities (whether direct or contingent, liquidated
        or
        unliquidated) of Borrower to Bank under any of the Loan Documents remain
        outstanding, and until payment in full of all obligations of Borrower subject
        hereto, Borrower shall, unless Bank otherwise consents in writing:

      

      SECTION
        4.1. PUNCTUAL
        PAYMENTS. Punctually pay all principal, interest, fees or other liabilities
        due
        under any of the Loan Documents at the times and place and in the manner
        specified therein.

      

      SECTION
        4.2. ACCOUNTING
        RECORDS. Maintain adequate books and records in accordance with generally
        accepted accounting principles consistently applied, and permit any
        representative of Bank, at any reasonable time, to inspect, audit and examine
        such books and records, to make copies of the same, and to inspect the
        properties of Borrower.

      

      SECTION
        4.3. FINANCIAL STATEMENTS. Provide to Bank all of the following, in form
        and
        detail satisfactory to Bank:

      

      (a) 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;

      

      
        
          
          

        

        
          -6-

          
            

          

        

        
          
          

        

      

      

      (b) not
        later
        than 45 days after and as of each June 30 and December 31, an operating
        statement and rent roll for the Real Property;

      

      (c) not
        later
        than September 1, 2004, an Operations and Maintenance Plan which addresses
        the
        implementation plan for the "in place" management of asbestos containing
        materials with respect to the Real Property, with such implementation plan
        to be
        acceptable to Bank;

      

      (d) not
        later
        than September 1, 2004, copy of the official closure notice from the State
        of
        California with respect to soil and groundwater contamination issues in
        connection with the underground storage tank previously at the Real Property;
        and

      

      (e) from
        time
        to time such other information as Bank may reasonably request.

      

      SECTION
        4.4. COMPLIANCE.
        Preserve and maintain all licenses, permits, governmental approvals, rights,
        privileges and franchises necessary for the conduct of its business; and
        comply
        with the provisions of all documents pursuant to which Borrower is organized
        and/or which govern Borrower's continued existence and with the requirements
        of
        all laws, rules, regulations and orders of any governmental authority applicable
        to Borrower and/or its business.

      

      SECTION
        4.5. INSURANCE.
        Maintain and keep in force insurance of the types and in amounts customarily
        carried in lines of business similar to that of Borrower, including but not
        limited to fire, extended coverage, public liability, flood, property damage
        and
        workers' compensation, with all such insurance carried with companies and
        in
        amounts satisfactory to Bank, and deliver to Bank from time to time at Bank's
        request schedules setting forth all insurance then in effect.

      

      SECTION
        4.6. FACILITIES.
        Keep all properties useful or necessary to Borrower's business in good repair
        and condition, and from time to time make necessary repairs, renewals and
        replacements thereto so that such properties shall be fully and efficiently
        preserved and maintained.

      

      SECTION
        4.7. TAXES
        AND
        OTHER LIABILITIES. Pay and discharge when due any and all indebtedness,
        obligations, assessments and taxes, both real or personal, including without
        limitation federal and state income taxes and state and local property taxes
        and
        assessments, except such (a) as Borrower may in good faith contest or as
        to
        which a bona fide dispute may arise, and (b) for which Borrower has made
        provision, to Bank's satisfaction, for eventual payment thereof in the event
        Borrower is obligated to make such payment.

      

      SECTION
        4.8. LITIGATION.
        Promptly give notice in writing to Bank of any litigation pending or threatened
        against Borrower.

      

      
        
          
          

        

        
          -7-

          
            

          

        

        
          
          

        

      

      SECTION
        4.9. FINANCIAL
        CONDITION. 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):

      

      (a) Debt
        Service Coverage Ratio not less than 1.25 to 1.0 on an annual basis, determined
        as of each fiscal year end, with "Debt Service Coverage Ratio" defined as
        the
        aggregate of gross income received by Borrower from the Real Property in
        each
        fiscal year less all expenses (excluding depreciation and interest expense)
        paid
        by Borrower in connection with the Real Property in such fiscal year divided
        by
        principal and interest payments on debt secured by the Real Property during
        such
        fiscal year.

      

      SECTION
        4.10. NOTICE
        TO
        BANK. Promptly (but in no event more than five (5) days after the occurrence
        of
        each such event or matter) give written notice to Bank in reasonable detail
        of:
        (a) the occurrence of any Event of Default, or any condition, event or act
        which
        with the giving of notice or the passage of time or both would constitute
        an
        Event of Default; (b) any change in the name or the organizational structure
        of
        Borrower; (c) the occurrence and nature of any Reportable Event or Prohibited
        Transaction, each as defined in ERISA, or any funding deficiency with respect
        to
        any Plan; or (d) any termination or cancellation of any insurance policy
        which
        Borrower is required to maintain, or any uninsured or partially uninsured
        loss
        through liability or property damage, or through fire, theft or any other
        cause
        affecting Borrower's property.

      

      ARTICLE
        V

      NEGATIVE
        COVENANTS

      

      Borrower
        further covenants that so long as Bank remains committed to extend credit
        to
        Borrower pursuant hereto, or any liabilities (whether direct or contingent,
        liquidated or unliquidated) of Borrower to Bank under any of the Loan Documents
        remain outstanding, and until payment in full of all obligations of Borrower
        subject hereto, Borrower will not without Bank's prior written
        consent:

      

      SECTION
        5.1. USE
        OF
        FUNDS. Use any of the proceeds of any credit extended hereunder except for
        the
        purposes stated in Article I hereof.

      

      SECTION
        5.2. OTHER
        INDEBTEDNESS. 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.

      

      SECTION
        5.3. MERGER,
        CONSOLIDATION, TRANSFER OF ASSETS. Merge into or consolidate with any other
        entity; make any substantial change in the nature of Borrower's 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.

      

      
        
          
          

        

        
          -8-

          
            

          

        

        
          
          

        

      

      SECTION
        5.4. PLEDGE
        OF
        ASSETS. 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.

      

      ARTICLE
        VI

      EVENTS
        OF DEFAULT

      

      SECTION
        6.1. The
        occurrence of any of the following shall constitute an "Event of Default"
        under
        this Agreement:

      

      (a) Borrower
        shall fail to pay when due any principal, interest, fees or other amounts
        payable under any of the Loan Documents.

      

      (b) Any
        financial statement or certificate furnished to Bank in connection with,
        or any
        representation or warranty made by Borrower or any other party under this
        Agreement or any other Loan Document shall prove to be incorrect, false or
        misleading in any material respect when furnished or made.

      

      (c) Any
        default in the performance of or compliance with any obligation, agreement
        or
        other provision contained herein or in any other Loan Document (other than
        those
        referred to in subsections (a) and (b) above), and with respect to any such
        default which by its nature can be cured, such default shall continue for
        a
        period of twenty (20) days from its occurrence.

      

      (d) Any
        default in the payment or performance of any obligation, or any defined event
        of
        default, under the terms of any contract or instrument (other than any of
        the
        Loan Documents) pursuant to which Borrower, any guarantor hereunder or any
        general partner or joint venturer in any Borrower which is a partnership
        or
        joint venture (with each such guarantor, general partner and/or joint venturer
        referred to herein as a "Third Party Obligor") has incurred any debt or other
        liability to any person or entity, including Bank.

      

      (e) The
        filing of a notice of judgment lien against Borrower or any Third Party Obligor;
        or the recording of any abstract of judgment against Borrower or any Third
        Party
        Obligor in any county in which Borrower or such Third Party Obligor has an
        interest in real property; or the service of a notice of levy and/or of a
        writ
        of attachment or execution, or other like process, against the assets of
        Borrower or any Third Party Obligor; or the entry of a judgment against Borrower
        or any Third Party Obligor.

      

      (f) Borrower
        or any Third Party Obligor shall become insolvent, or shall suffer or consent
        to
        or apply for the appointment of a receiver, trustee, custodian or liquidator
        of
        itself or any of its property, or shall generally fail to pay its debts as
        they
        become due, or shall make a general assignment for the benefit of creditors;
        Borrower or any Third Party Obligor shall file a voluntary petition in
        bankruptcy, or seeking reorganization, in order to effect a plan or other
        arrangement with creditors or any other relief under the Bankruptcy Reform
        Act,.Title 11 of the United States Code, as amended or recodified from time
        to
        time ("Bankruptcy Code"), or under any state or federal law granting relief
        to
        debtors, whether now or hereafter in effect; or any involuntary petition
        or
        proceeding pursuant to the Bankruptcy Code or any other applicable state
        or
        federal law relating to bankruptcy, reorganization or other relief for debtors
        is filed or commenced against Borrower or any Third Party Obligor, or Borrower
        or any Third Party Obligor shall file an answer admitting the jurisdiction
        of
        the court and the material allegations of any involuntary petition; or Borrower
        or any Third Party Obligor shall be adjudicated a bankrupt, or an order for
        relief shall be entered against Borrower or any Third Party Obligor by any
        court
        of competent jurisdiction under the Bankruptcy Code or any other applicable
        state or federal law relating to bankruptcy, reorganization or other relief
        for
        debtors.

      

      
        
          
          

        

        
          -9-

          
            

          

        

        
          
          

        

      

      (g) There
        shall exist or occur any event or condition which Bank in good faith believes
        impairs, or is substantially likely to impair, the prospect of payment or
        performance by Borrower of its obligations under any of the Loan
        Documents.

      

      (h) The
        death
        or incapacity of any individual Borrower or Third Party Obligor. The dissolution
        or liquidation of any Borrower or Third Party Obligor which is a corporation,
        partnership, joint venture or other type of entity; or Borrower or any such
        Third Party Obligor, or any of its directors, stockholders or members, shall
        take action seeking to effect the dissolution or liquidation of such Borrower
        or
        Third Party Obligor.

      

      (i) The
        sale,
        transfer, hypothecation, assignment or encumbrance, whether voluntary,
        involuntary or by operation of law, without Bank's prior written consent,
        of all
        or any part of or interest in any real property collateral required
        hereby.

      

      SECTION
        6.2. REMEDIES.
        Upon the occurrence of any Event of Default: (a) all indebtedness of Borrower
        under each of the Loan Documents, any term thereof to the contrary
        notwithstanding, shall at Bank's option and without notice become immediately
        due and payable without presentment, demand, protest or notice of dishonor,
        all
        of which are hereby expressly waived by each Borrower; (b) the obligation,
        if
        any, of Bank to extend any further credit under any of the Loan Documents
        shall
        immediately cease and terminate; and (c) Bank shall have all rights, powers
        and
        remedies available under each of the Loan Documents, or accorded by law,
        including without limitation the right to resort to any or all security for
        any
        credit subject hereto and to exercise any or all of the rights of a beneficiary
        or secured party pursuant to applicable law. All rights, powers and remedies
        of
        Bank may be exercised at any time by Bank and from time to time after the
        occurrence of an Event of Default, are cumulative and not exclusive, and
        shall
        be in addition to any other rights, powers or remedies provided by law or
        equity.

      

      ARTICLE
        VII

      MISCELLANEOUS

      

      SECTION
        7.1. NO
        WAIVER. No delay, failure or discontinuance of Bank in exercising any right,
        power or remedy under any of the Loan Documents shall affect or operate as
        a
        waiver of such right, power or remedy; nor shall any single or partial exercise
        of any such right, power or remedy preclude, waive or otherwise affect any
        other
        or further exercise thereof or the exercise of any other right, power or
        remedy.
        Any wavier, permit, consent or approval of any kind by Bank of any breach
        of or
        default under any of the Loan Documents must be in writing and shall be
        effective only to the extent set forth in such writing.

      

      
        
          
          

        

        
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      SECTION
        7.2. NOTICES. All notices, requests and demands which any party is required
        or
        may desire to give to any other party under any provision of this Agreement
        must
        be in writing delivered to each party at the following address:

      

      
        	 	BORROWER:	
                SONOMAWEST
                  HOLDINGS, INC.

              

      

      2064
        Highway 116 N.

      Sebastopol,
        CA 95472

      

      
        	 	BANK:	
                WELLS
                  FARGO BANK, NATIONAL ASSOCIATION

              

      

      North
        Coast Regional Commercial Banking Office

      200
        B
        Street, 3rd
        Floor

      Santa
        Rosa, CA 95403

      

      or
        to
        such other address as any party may designate by written notice to all other
        parties. Each such notice, request and demand shall be deemed given or made
        as
        follows: (a) if sent by hand delivery, upon delivery; (b) if sent by mail,
        upon
        the earlier of the date of receipt or three (3) days after deposit in the
        U.S.
        mail, first class and postage prepaid; and (c) if sent by telecopy, upon
        receipt.

      

      SECTION
        7.3. COSTS,
        EXPENSES AND ATTORNEYS' FEES. Borrower shall pay to Bank immediately upon
        demand
        the full amount of all payments, advances, charges, costs and expenses,
        including reasonable attorneys' fees (to include outside counsel fees and
        all
        allocated costs of Bank's in-house counsel), expended or incurred by Bank
        in
        connection with (a) the negotiation and preparation of this Agreement and
        the
        other Loan Documents, Bank's continued administration hereof and thereof,
        and
        the preparation of any amendments and waivers hereto and thereto, (b) the
        enforcement of Bank's rights and/pr the collection of any amounts which become
        due to Bank under any of the Loan Documents, and (c) the prosecution or defense
        of any action in any way related to any of the Loan Documents, including
        without
        limitation, any action for declaratory relief, whether incurred at the trial
        or
        appellate level, in an arbitration proceeding or otherwise, and including
        any of
        the foregoing incurred in connection with any bankruptcy proceeding (including
        without limitation, any adversary proceeding, contested matter or motion
        brought
        by Bank or any other person) relating to any Borrower or any other person
        or
        entity.

      

      SECTION
        7.4. SUCCESSORS,
        ASSIGNMENT. This Agreement shall be binding upon and inure to the benefit
        of the
        heirs, executors, administrators, legal representatives, successors and assigns
        of the parties; provided however, that Borrower may not assign or transfer
        its
        interest hereunder without Bank's prior written consent Bank reserves the
        right
        to sell, assign, transfer, negotiate or grant participations in all or any
        part
        of, or any interest in, Bank's rights and benefits under each of the Loan
        Documents. In connection therewith, Bank may disclose all documents and
        information which Bank now has or may hereafter acquire relating to any credit
        subject hereto, Borrower or its business, or any collateral required
        hereunder.

      

      
        
          
          

        

        
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      SECTION
        7.5. ENTIRE
        AGREEMENT; AMENDMENT. This Agreement and the other Loan Documents constitute
        the
        entire agreement between Borrower and Bank with respect to each credit subject
        hereto and supersede all prior negotiations, communications, discussions
        and
        correspondence concerning the subject matter hereof. This Agreement may be
        amended or modified only in writing signed by each party hereto.

      

      SECTION
        7.6. NO
        THIRD
        PARTY BENEFICIARIES. This Agreement is made and entered into for the sole
        protection and benefit of the parties hereto and their respective permitted
        successors and assigns, and no other person or entity shall be a third party
        beneficiary of, or have any direct or indirect cause of action or claim in
        connection with, this Agreement or any other of the Loan Documents to which
        it
        is not a party.

      

      SECTION
        7.7. TIME.
        Time is of the essence of each and every provision of this Agreement and
        each
        other of the Loan Documents.

      

      SECTION
        7.8. SEVERABILITY
        OF PROVISIONS. If any provision of this Agreement shall 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 Agreement.

      

      SECTION
        7.9. COUNTERPARTS.
        This Agreement may be executed in any number of counterparts, each of which
        when
        executed and delivered shall be deemed to be an original, and all of which
        when
        taken together shall constitute one and the same Agreement.

      

      SECTION
        7.10. GOVERNING
        LAW. This Agreement shall be governed by and construed in accordance with
        the
        laws of the State of California.

      

      SECTION
        7.11. ARBITRATION.

      

      (a) Arbitration.
        The
        parties hereto agree, upon demand by any party, to submit to binding arbitration
        all claims, disputes and controversies between or among them (and their
        respective employees, officers, directors, attorneys, and other agents),
        whether
        in tort, contract or otherwise arising out of or relating to in any way (i)
        the
        loan and related Loan Documents which are the subject of this Agreement and
        its
        negotiation, execution, collateralization, administration, repayment,
        modification, extension, substitution, formation, inducement, enforcement,
        default or termination; or (ii) requests for additional credit.

      

      (b) Governing
        Rules.
        Any
        arbitration proceeding will (i) proceed in a location in California selected
        by
        the American Arbitration Association ("AAA"); (ii) be governed by the Federal
        Arbitration Act (Title 9 of the United States Code), notwithstanding any
        conflicting choice of law provision in any of the documents between the parties;
        and (iii) be conducted by the AAA, or such other administrator as the parties
        shall mutually agree upon, in accordance with the AAA's commercial dispute
        resolution procedures, unless the claim or counterclaim is at least
        $1,000,000.00 exclusive of claimed interest, arbitration fees and costs in
        which
        case the arbitration shall be conducted in accordance with the AAA's optional
        procedures for large, complex commercial disputes (the commercial dispute
        resolution procedures or the optional procedures for large, complex commercial
        disputes to be referred to, as applicable, as the "Rules"). If there is any
        inconsistency between the terms hereof and the Rules, the terms and procedures
        set forth herein shall control. Any party who fails or refuses to submit
        to
        arbitration following a demand by any other party shall bear all costs and
        expenses incurred by such other party in compelling arbitration of any dispute.
        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. §91 or any similar
        applicable state law.

      

      
        
          
          

        

        
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      (c) No
        Waiver of Provisional Remedies, Self-Help and Foreclosure.
        The
        arbitration requirement does not limit the right of any party to (i) foreclose
        against real or personal property collateral; (ii) exercise self-help remedies
        relating to collateral or proceeds of collateral such as setoff or repossession;
        or (iii) obtain provisional or ancillary remedies such as replevin, injunctive
        relief, attachment or the appointment of a receiver, before during or after
        the
        pendency of any arbitration proceeding. This exclusion does not constitute
        a
        waiver of the right or obligation of any party to submit any dispute to
        arbitration or reference hereunder, including those arising from the exercise
        of
        the actions detailed in sections (i), (ii) and (iii) of this
        paragraph.

      

      (d) Arbitrator
        Qualifications and Powers.
        Any
        arbitration proceeding in which the amount in controversy is $5,000,000.00
        or
        less will be decided by a single arbitrator selected according to the Rules,
        and
        who shall not render an award of greater than $5,000,000.00. Any dispute
        in
        which the amount in controversy exceeds $5,000,000.00 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.
        The
        arbitrator will be a neutral attorney licensed in the State of California
        or a
        neutral retired judge of the state or federal judiciary of California, in
        either
        case with a minimum of ten years experience in the substantive law applicable
        to
        the subject matter of the dispute to be arbitrated. The arbitrator will
        determine whether or not an issue is arbitratable and will give effect to
        the
        statutes of limitation in determining any claim. In any arbitration proceeding
        the arbitrator will decide (by documents only or with a hearing at the
        arbitrator's discretion) any pre-hearing motions which are similar to motions
        to
        dismiss for failure to state a claim or motions for summary adjudication.
        The
        arbitrator shall resolve all disputes in accordance with the substantive
        law of
        California and may grant any remedy or relief that a court of such state
        could
        order or grant within the scope hereof and such ancillary relief as is necessary
        to make effective any award. The arbitrator shall also have the power to
        award
        recovery of all costs and fees, to impose sanctions and to take such other
        action as the arbitrator deems necessary to the same extent 8 judge could
        pursuant to the Federal Rules of Civil Procedure, the California Rules of
        Civil
        Procedure or other applicable law. Judgment upon the award rendered by the
        arbitrator may be entered in any court having jurisdiction. The institution
        and
        maintenance of an action for judicial relief or pursuit provisional or ancillary
        remedy shall not constitute a waiver of the right of any party, including
        the
        plaintiff, to submit the controversy or claim to arbitration if any other
        party
        contests such action for judicial relief.

      

      (e) Discovery.
        In any
        arbitration proceeding discovery will be permitted in accordance with the
        Rules.
        All discovery shall be expressly limited to matters directly relevant to
        the
        dispute being arbitrated and must be completed no later than 20 days before
        the
        hearing date and within 180 days of the filing of the dispute with the AAA.
        Any
        requests for an extension of the discovery periods, or any discovery disputes,
        will be subject to final determination by the arbitrator upon a showing that
        the
        request for discovery is essential for the party's presentation and that
        no
        alternative means for obtaining information is available.

      

      
        
          
          

        

        
          -13-

          
            

          

        

        
          
          

        

      

      (f) Class
        Proceedings and Consolidations.
        The
        resolution of any dispute arising pursuant to the terms of this Agreement
        shall
        be determined by a separate arbitration proceeding and such dispute shall
        not be
        consolidated with other disputes or included in any class
        proceeding.

      

      (g) Payment
        Of Arbitration Costs And Fees.
        The
        arbitrator shall award all costs and expenses of the arbitration
        proceeding.

      

      (h) 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, lien 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 638. 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.

      

      (i) 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 filing 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 or by applicable law or regulation. 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 Loan Documents or the
        subject
        matter of the dispute shall control. This arbitration provision shall survive
        termination, amendment or expiration of any of the Loan Documents or any
        relationship between the parties.

      
        
          
          

        

        
          -14-

          
            

          

        

        
          
          

        

      

      IN
        WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
        as
        of the day and year first written above.

       

      
 

      
        	
                 

                SONOMAWEST HOLDINGS, INC.

                 

                 

                 

                By:      /s/
                  Roger
                  Mertz                                                         
                  

                Roger
                  Mertz

                Chairman
                  of the Board

              	
                WELLS
                  FARGO BANK,

                NATIONAL
                  ASSOCIATION

                 

                 

                 

                By:      /s/
                  Ruth
                  Peckham                                                        
                  

                Ruth
                  Peckham

                Relationship
                  Manager

              

      

       

       

      
        
          
          

        

        
          -15-

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00091-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00091-of-00352.parquet"}]]