Exhibit 10.2
 
EXCHANGE AGREEMENT
 
EXCHANGE AGREEMENT (this “Agreement”), dated as of June 19, 2013, by and between
Truett-Hurst, Inc., a Delaware corporation (the “Corporation”), and the holders
of LLC Units (as defined herein) from time to time party hereto.
 
WHEREAS, the parties hereto are party to the Third Amended and Restated
Operating Agreement, dated as of the date hereof;
 
WHEREAS, the parties hereto desire to provide for the exchange from time to time
of LLC Units for shares of Class A Common Stock (as defined herein), on the
terms and subject to the conditions set forth herein;
 
NOW, THEREFORE, in consideration of the mutual covenants and undertakings
contained herein and for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:
 
ARTICLE I
 
SECTION 1.1         Definitions
 
The following definitions shall be for all purposes, unless otherwise clearly
indicated to the contrary, applied to the terms used in this Agreement.
 
A “Change in Control” shall be deemed to have occurred if or upon:
 
(i)            the stockholders of the Corporation approve the sale, lease or
transfer, in one or a series of related transactions, of all or substantially
all of the Corporation’s assets (determined on a consolidated basis) to any
person or group (as such term is used in Section 13(d)(3) of the Exchange Act,
other than to any wholly owned subsidiary of the Corporation;
 
(ii)           the stockholders of the Corporation approve a merger or
consolidation of the Corporation with any other person, other than a merger or
consolidation which would result in the Voting Securities of the Corporation
outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into Voting Securities of the
surviving entity) at least 50.1% of the total voting power represented by the
Voting Securities of the Corporation or such surviving entity outstanding
immediately after such merger or consolidation;
 
(iii)          the stockholders of the Corporation approve the adoption of a
plan the consummation of which would result in the liquidation or dissolution of
the Corporation;
 
(iv)          the acquisition, directly or indirectly, by any person or group
(as such term is used in Section 13(d)(3) of the Exchange Act) (other than (a) a
trustee or other fiduciary holding securities under an employee benefit plan of
the Corporation; or (b) a corporation or other entity owned, directly or
indirectly, by the stockholders of the Corporation in substantially the same
proportions as their ownership of stock of the Corporation ((a) and (b)
collectively are referred to herein as “Exempt Persons”)) of beneficial
ownership (as defined in Rule 13d-3 under the Exchange Act) of more than 50.01%
of the aggregate voting power of the Voting Securities of the Corporation;
 
 
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(v)            during any 12-month period, individuals who at the beginning of
such period composed the Board of Directors of the Corporation (together with
any new directors whose election by such Board of Directors or whose nomination
for election by the stockholders of the Corporation was approved by a vote of 66
2/3% of the directors of the Corporation then still in office who were either
directors at the beginning of such period or whose election or nomination for
election was previously so approved) cease for any reason to constitute a
majority of the Board of Directors of the Corporation then in office; or
 
(vi)           the Corporation (or a directly or indirectly wholly owned
subsidiary thereof) ceases to be the sole Managing Member of HDD.
 
“Change in Control Event” means any of the following (i) the commencement of, or
the first public announcement of the intent to commence, any transaction,
including, without limitation, a tender or exchange offer by any person or
entity (other than any Exempt Person), the consummation of which would result in
a Change in Control; (ii) the commencement of, or the first public announcement
of the intent to commence, any proxy solicitation by any person or entity
subject to Rule 14a-12(c) under the Exchange Act, the consummation of which
would result in a Change in Control; (iii) the Corporation, HDD or any affiliate
thereof entering into an agreement with any person or entity which, if
consummated, would result in a Change in Control; or (iv) the adoption by the
Board of Directors of the Corporation of resolutions authorizing any transaction
or event which, if consummated, would result in a Change in Control.
 
“Class A Common Stock” means the Class A common stock, par value $0.001 per
share, of the Corporation.
 
“Code” means the Internal Revenue Code of 1986, as amended.
 
“Corporation” means Truett-Hurst, Inc., a Delaware corporation, and any
successor thereto.
 
“Exchange” has the meaning set forth in Section 2.1(a) of this Agreement.
 
“Exchange Act” means the Securities Exchange Act of 1934, as amended.
 
“Exchange Rate” means the number of shares of Class A Common Stock for which an
LLC Unit is entitled to be Exchanged. On the date of this Agreement, the
Exchange Rate shall be 1 for 1, subject to adjustment pursuant to Section 2.2 of
this Agreement.
 
“HDD” means H.D.D. LLC, a California limited liability company, and any
successor thereto.
 
 
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“HDD Operating Agreement” means the Third Amended and Restated Operating
Agreement of HDD, dated on or about the date hereof, as such agreement may be
amended from time to time.
 
“IPO” has the meaning set forth in Section 2.1(a)(i) of this Agreement.
 
“LLC Unit” means (i) each LLC Unit (as such term is defined in the HDD Operating
Agreement) issued as of the date hereof and (ii) each LLC Unit or other interest
in HDD that may be issued by HDD in the future that is designated by the
Corporation as an “LLC Unit.”
 
“LLC Unitholder” means each holder of one or more LLC Units that may from time
to time be a party to this Agreement.
 
“Permitted Transferee” has the meaning given to such term in Section 3.1 of this
Agreement.
 
“Takeover Law” has the meaning given to such term in Section 3.1 of this
agreement.
 
“Voting Securities” shall mean any securities of the Corporation which are
entitled to vote generally in matters submitted for a vote of the Corporation’s
stockholders or generally in the election of the Corporation’s board of
directors.
 
ARTICLE II
 
SECTION 2.1         Exchange of LLC Units for Class A Common Stock.
 
(a)           (i)           Subject to Section 2.1(a)(ii) and Section 2.1(f)
hereof, from and after the date of the closing of the initial public offering
and sale of Class A Common Stock (as contemplated by the Corporation’s
Registration Statement on Form S-1 (File No. 333-187167)) (the “IPO”), each LLC
Unitholder shall be entitled at any time and from time to time, upon the terms
and subject to the conditions hereof, to surrender LLC Units in exchange for the
delivery by the Corporation of (x) a number of shares of Class A Common Stock
that is equal to the product of the number of LLC Units surrendered multiplied
by the Exchange Rate (such exchange, an “Exchange”), provided that any such
Exchange is for a minimum of the lesser of 1,000 LLC Units or all of the LLC
Units held by such LLC Unitholder or (y) if the Corporation so elects, an amount
of cash calculated in accordance with Section 2.1(f) hereof.
 
(ii)           Notwithstanding anything to the contrary herein, upon the
occurrence of any Change in Control Event, each LLC Unitholder shall be
entitled, upon the terms and subject to the conditions hereof, to elect to
Exchange LLC Units for shares of Class A Common Stock, or cash at the election
of the Corporation; provided, that any such Exchange pursuant to this sentence
shall be effective immediately prior to the consummation of the Change in
Control (and, for the avoidance of doubt, shall not be effective if such Change
of Control is not consummated); and provided further, that any such election
pursuant to this Section 2.1(a)(ii) may be withdrawn by the LLC Unitholder who
submitted such election by providing written notice to the Corporation not less
than four business days prior to the consummation of the Change in Control.
 
 
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(b)           An LLC Unitholder shall exercise its right to Exchange LLC Units
as set forth in Section 2.1(a) above by delivering to the Corporation a written
election of exchange in respect of the LLC Units to be Exchanged substantially
in the form of Exhibit A hereto, duly executed by such holder or such holder’s
duly authorized attorney, in each case delivered during normal business hours at
the principal executive offices of the Corporation.  Should the Exchange be
satisfied in shares of Class A Common Stock, subject to Section 2.1(a)(ii), as
promptly as practicable following the delivery of such a written election of
exchange, and in any event within three business days, the Corporation shall
deliver or cause to be delivered at the offices of the then-acting registrar and
transfer agent of the Class A Common Stock or, if there is no then-acting
registrar and transfer agent of the Class A Common Stock, at the principal
executive offices of the Corporation, the number of shares of Class A Common
Stock deliverable upon such Exchange, registered in the name of the relevant
Exchanging LLC Unitholder; to the extent the Class A Common Stock is settled
through the facilities of The Depository Trust Company, the Company will,
subject to Section 2.1(c) below, upon the written instruction of an Exchanging
Unitholder, use its reasonable best efforts to deliver the shares of Class A
Common Stock deliverable to such Exchanging Unitholder, through the facilities
of The Depository Trust Company, to the account of the participant of The
Depository Trust Company designated by such Exchanging Holder.
 
(c)           The Corporation and each Exchanging LLC Unitholder shall bear
their own expenses in connection with the consummation of any Exchange, whether
or not any such Exchange is ultimately consummated, except that the Corporation
shall bear any transfer taxes, stamp taxes or duties, or other similar taxes in
connection with, or arising by reason of, any Exchange; provided, however, that
if any shares of Class A Common Stock are to be delivered in a name other than
that of the LLC Unitholder that requested the Exchange, then such LLC Unitholder
and/or the person in whose name such shares are to be delivered shall pay to the
Corporation the amount of any transfer taxes, stamp taxes or duties, or other
similar taxes in connection with, or arising by reason of, such Exchange or
shall establish to the reasonable satisfaction of the Corporation that such tax
has been paid or is not payable.
 
(d)           The Corporation covenants and agrees that, prior to taking or
causing to be taken any action that would cause interests in HDD to not meet the
requirements of Treasury Regulation section 1.7704-1(h), including, without
limitation, issuing any LLC Units in a transaction required to be registered
with the Securities and Exchange Commission pursuant to the Securities Act of
1933, as amended, it will provide at least 15 business days’ advance written
notice describing the proposed action in reasonable detail to the LLC
Unitholders and provide each LLC Unitholder with the opportunity to effect an
Exchange of all such LLC Unitholder’s LLC Units in accordance with the terms of
this Agreement; provided, however, that in no event will the Corporation take or
cause to be taken any action that would cause interests in HDD to not meet the
requirements of Treasury Regulation section 1.7704-1(h) prior to the first
anniversary of the closing of the IPO. Provided that the notice and opportunity
to Exchange contemplated by the previous sentence has been provided to the LLC
Unitholders, then, notwithstanding anything to the contrary herein, if the Board
of Directors of the Corporation, after consultation with its outside legal
counsel and tax advisor, shall determine in good faith that interests in HDD do
not meet the requirements of Treasury Regulation section 1.7704-1(h), the
Corporation may impose such restrictions on Exchange as the Corporation may
reasonably determine to be necessary or advisable so that HDD is not treated as
a “publicly traded partnership” under Section 7704 of the Code.
 
 
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(e)           For the avoidance of doubt, and notwithstanding anything to the
contrary herein, an LLC Unitholder shall not be entitled to Exchange LLC Units
to the extent the Corporation reasonably determines in good faith that such
Exchange (i) would be prohibited by law or regulation or (ii) would not be
permitted under any other agreement with the Corporation or its subsidiaries to
which such LLC Unitholder is then subject (including, without limitation, the
HDD Operating Agreement) or any written policies of the Corporation relating to
insider trading then applicable to such LLC Unitholder. For avoidance of doubt,
no Exchange shall be deemed to be prohibited by any law or regulation pertaining
to the registration of securities if such securities have been so registered or
if any exemption from such registration requirements is reasonably available.
 
(f)           If the Corporation elects to satisfy an Exchange in cash, then an
Exchanging LLC Unitholder may receive cash in lieu of shares of Class A Common
Stock in exchange for LLC Units surrendered in accordance with Section 2.1(a),
in an amount equal to the Market Value of the shares of Class A Common Stock
that such Exchanging LLC Unitholder would have received absent such an election
by the Corporation.  For the purposes of this Section 2.1(f), the “Market Value”
as of a particular date shall be determined as follows: (i) if, at the time of
the Exchange, the LLC Units are convertible for shares of Class A Common Stock
(or the securities of any successor company to the Corporation) that trade on a
national securities exchange, the Market Value shall be the average of the
closing sale prices over the ten (10) trading days ending one (1) day prior to
the date of the Exchange; (ii) if, at the time of the Exchange, the LLC Units
are convertible for Class A Common Stock (or the securities of any successor
company to the Corporation) that trade over-the-counter, the Market Value shall
be the average of the closing bid or sale prices (whichever is applicable) over
the ten (10) day period ending three (3) days prior to the date of the Exchange;
and (iii) if the LLC Units are not convertible for securities of the
Corporation, or any other entity the securities of which are listed or traded on
an established securities market, then the Market Value shall be the fair market
value thereof, as determined in good faith by the Board of Directors of the
Corporation.  If the the Exchanging LLC Unitholder does not receive notice of
the Corporation’s cash election substantially in the form of Exhibit B within
five (5) business days of the Corporation’s receipt of such Exchanging LLC
Unitholder’s election of exchange, the Corporation shall forfeit the right to
satisfy such Exchange in cash.
 
 
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SECTION 2.2        Adjustment.
 
(a)           The Exchange Rate shall be adjusted accordingly if there is: (a)
any subdivision (by any unit split, unit distribution, reclassification,
reorganization, recapitalization or otherwise) or combination (by reverse unit
split, reclassification, reorganization, recapitalization or otherwise) of the
LLC Units that is not accompanied by an identical subdivision or combination of
the Class A Common Stock; or (b) any subdivision (by any stock split, stock
dividend or distribution, reclassification, reorganization, recapitalization or
otherwise) or combination (by reverse stock split, reclassification,
reorganization, recapitalization or otherwise) of the Class A Common Stock that
is not accompanied by an identical subdivision or combination of the LLC Units.
If there is any reclassification, reorganization, recapitalization or other
similar transaction in which the Class A Common Stock are converted or changed
into another security, securities or other property, then upon any subsequent
Exchange, an exchanging LLC Unitholder shall be entitled to receive the amount
of such security, securities or other property that such exchanging LLC
Unitholder would have received if such Exchange had occurred immediately prior
to the effective date of such reclassification, reorganization, recapitalization
or other similar transaction, taking into account any adjustment as a result of
any subdivision (by any split, distribution or dividend, reclassification,
reorganization, recapitalization or otherwise) or combination (by reverse split,
reclassification, recapitalization or otherwise) of such security, securities or
other property that occurs after the effective time of such reclassification,
reorganization, recapitalization or other similar transaction.  For the
avoidance of doubt, if there is any reclassification, reorganization,
recapitalization or other similar transaction in which the Class A Common Stock
are converted or changed into another security, securities or other property,
this Section 2.2 shall continue to be applicable, mutatis mutandis, with respect
to such security or other property. This Agreement shall apply to the LLC Units
held by the LLC Unitholders and their Permitted Transferees as of the date
hereof, as well as any LLC Units hereafter acquired by an LLC Unitholder and his
or her or its Permitted Transferees. This Agreement shall apply to, mutatis
mutandis, and all references to “LLC Units” shall be deemed to include, any
security, securities or other property of HDD which may be issued in respect of,
in exchange for or in substitution of LLC Units by reason of any distribution or
dividend, split, reverse split, combination, reclassification, reorganization,
recapitalization, merger, exchange (other than an Exchange) or other
transaction.
 
SECTION 2.3        Class A Common Stock to be Issued.
 
(a)           If the Corporation does not elect to satisfy an Exchange in cash
pursuant to Section 2.1(f), the Corporation covenants and agrees to deliver
shares of Class A Common Stock that have been registered under the Securities
Act with respect to any Exchange to the extent that a registration statement is
effective and available for such shares.  In the event that any Exchange in
accordance with this Agreement is to be effected at a time when any required
registration has not become effective or otherwise is unavailable, upon the
request and with the reasonable cooperation of the LLC Unitholder requesting
such Exchange, the Corporation shall use its reasonable best efforts to promptly
facilitate such Exchange pursuant to any reasonably available exemption from
such registration requirements. The Corporation shall use its reasonable best
efforts to list the Class A Common Stock required to be delivered upon exchange
prior to such delivery upon each national securities exchange or inter-dealer
quotation system upon which the outstanding Class A Common Stock may be listed
or traded at the time of such delivery. Nothing contained herein shall be
construed to preclude the Corporation or HDD from satisfying their obligations
in respect of the exchange of the LLC Units by delivery of Class A Common Stock
which are held in the treasury of the Corporation or HDD or any of their
subsidiaries.
 
(b)           The Corporation shall at all times reserve and keep available out
of its authorized but unissued Class A Common Stock, solely for the purpose of
issuance upon an Exchange, such number of shares of Class A Common Stock as
shall be deliverable upon any such Exchange; provided that nothing contained
herein shall be construed to preclude the Corporation from satisfying its
obligations in respect of any such Exchange by delivery of purchased shares of
Class A Common Stock (which may or may not be held in the treasury of the
Corporation or any subsidiary thereof).
 
 
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(c)           Prior to the date of this Agreement, the Corporation has taken all
such steps as may be required to cause to qualify for exemption under Rule
16b-3(d) or (e), as applicable, under the Exchange Act, and be exempt for
purposes of Section 16(b) under the Exchange Act, any acquisitions or
dispositions of equity securities of the Corporation (including derivative
securities with respect thereto) and any securities which may be deemed to be
equity securities or derivative securities of the Corporation for such purposes
that result from the transactions contemplated by this Agreement, by each
director or officer of the Corporation who may reasonably be expected to be
subject to the reporting requirements of Section 16(a) of the Exchange Act with
respect to the Corporation upon the registration of any class of equity security
of the Corporation pursuant to Section 12 of the Exchange Act (with the
authorizing resolutions specifying the name of each such officer or director
whose acquisition or disposition of securities is to be exempted and the number
of securities that may be acquired and disposed of by each such person pursuant
to this Agreement).
 
(d)           If any Takeover Law or other similar law or regulation becomes or
is deemed to become applicable to this Agreement or any of the transactions
contemplated hereby, the Corporation shall use its reasonable best efforts to
render such law or regulation inapplicable to all of the foregoing.
 
(e)           The Corporation covenants that all Class A Common Stock issued
upon an Exchange will, upon issuance, be validly issued, fully paid and
non-assessable and not subject to any preemptive right of stockholders of the
Corporation or to any right of first refusal or other right in favor of any
person or entity.
 
ARTICLE III
 
SECTION 3.1        Representations and Warranties of the Corporation. The
Corporation represents and warrants that (i) it is a corporation duly
incorporated and is existing in good standing under the laws of the State of
Delaware, (ii) it has all requisite corporate power and authority to enter into
and perform this Agreement and to consummate the transactions contemplated
hereby and to issue the Class A Common Stock in accordance with the terms
hereof, (iii) the execution and delivery of this Agreement by the Corporation
and the consummation by it of the transactions contemplated hereby (including
without limitation, the issuance of the Class A Common Stock) have been duly
authorized by all necessary corporate action on the part of the Corporation,
including but not limited to all actions necessary to ensure that the
acquisition of shares Class A Common Stock pursuant to the transactions
contemplated hereby, to the fullest extent of the Corporation’s Board of
Directors’ power and authority and to the extent permitted by law, shall not be
subject to any “moratorium,” “control share acquisition,” “business
combination,” “fair price” or other form of anti-takeover laws and regulations”
of any jurisdiction that may purport to be applicable to this Agreement or the
transactions contemplated hereby (collectively, “Takeover Laws”), (iv) this
Agreement constitutes a legal, valid and binding obligation of the Corporation
enforceable against the Corporation in accordance with its terms, except as
enforcement may be limited by equitable principles or by bankruptcy, insolvency,
reorganization, moratorium, or similar laws relating to or limiting creditors’
rights generally, and (v) the execution, delivery and performance of this
Agreement by the Corporation and the consummation by the Corporation of the
transactions contemplated hereby will not (A) result in a violation of the
Certificate of Incorporation of the Corporation or the Bylaws of the Corporation
or (B) conflict with, or constitute a default (or an event which with notice or
lapse of time or both would become a default) under, or give to others any
rights of termination, amendment, acceleration or cancellation of, any
agreement, indenture or instrument to which the Corporation is a party, or (C)
result in a violation of any law, rule, regulation, order, judgment or decree
applicable to the Corporation or by which any property or asset of the
Corporation is bound or affected, except with respect to clauses (B) or (C) for
any conflicts, defaults, accelerations, terminations, cancellations or
violations, that would not reasonably be expected to have a material adverse
effect on the Corporation or its business, financial condition or results of
operations.
 
 
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SECTION 3.2        Representations and Warranties of the LLC Unitholders. Each
LLC Unitholder, severally and not jointly, represents and warrants that (i) if
it is not a natural person, that it is duly incorporated or formed and, to the
extent such concept exists in its jurisdiction of organization, is in good
standing under the laws of such jurisdiction, (ii) it has all requisite legal
capacity and authority to enter into and perform this Agreement and to
consummate the transactions contemplated hereby, (iii) if it is not a natural
person, the execution and delivery of this Agreement by it of the transactions
contemplated hereby have been duly authorized by all necessary corporate or
other entity action on the part of such LLC Unitholder, (iv) this Agreement
constitutes a legal, valid and binding obligation of such LLC Unitholder
enforceable against it in accordance with its terms, except as enforcement may
be limited by equitable principles or by bankruptcy, insolvency, reorganization,
moratorium, or similar laws relating to or limiting creditors’ rights generally,
and (v) the execution, delivery and performance of this Agreement by such LLC
Unitholder and the consummation by such LLC Unitholder of the transactions
contemplated hereby will not (A) if it is not a natural person, result in a
violation of the Certificate of Incorporation and Bylaws or other organizational
documents of such LLC Unitholder or (B) conflict with, or constitute a default
(or an event which with notice or lapse of time or both would become a default)
under, or give to others any rights of termination, amendment, acceleration or
cancellation of, any agreement, indenture or instrument to which such LLC
Unitholder is a party, or (C) result in a violation of any law, rule,
regulation, order, judgment or decree applicable such LLC Unitholder, except
with respect to clauses (B) or (C) for any conflicts, defaults, accelerations,
terminations, cancellations or violations, that would not in any material
respect result in the unenforceability against such LLC Unitholder of this
Agreement.
 
ARTICLE IV
 
SECTION 4.1         Additional LLC Unitholders. To the extent an LLC Unitholder
validly transfers any or all of such holder’s LLC Units to another person in a
transaction in accordance with, and not in contravention of, the HDD Operating
Agreement, then such transferee (each, a “Permitted Transferee”) shall have the
right to execute and deliver a joinder to this Agreement, substantially in the
form of Exhibit C hereto, whereupon such Permitted Transferee shall become an
LLC Unitholder hereunder. To the extent HDD issues LLC Units in the future, then
the holder of such LLC Units shall have the right to execute and deliver a
joinder to this Agreement, substantially in the form of Exhibit C hereto,
whereupon such holder shall become an LLC Unitholder hereunder.
 
 
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SECTION 4.2         Addresses and Notices. All notices, requests, claims,
demands and other communications hereunder shall be in writing and shall be
given (and shall be deemed to have been duly given upon receipt) by delivery in
person, by courier service, by fax, by electronic mail (delivery receipt
requested) or by registered or certified mail (postage prepaid, return receipt
requested) to the respective parties at the following addresses (or at such
other address for a party as shall be as specified in a notice given in
accordance with this Section 3.2):
 
(a)           If to the Corporation, to:
 
P.O. Box 1532
 
Healdsburg, CA 95448
 
Attention: Chief Financial Officer
 
Fax: (707) 431-4402
 
Electronic Mail: james@truetthurst.com
 
With a copy to:
 
Anna T. Pinedo, Esq.
Morrison & Foerster LLP
1290 Avenue of the Americas
New York, NY 10104
Fax: (212) 468-7900
Electronic Mail: apinedo@mofo.com

(b)          If to any LLC Unitholder, to the address and other contact
information set forth in the records of HDD from time to time.
 
SECTION 4.3         Further Action. The parties shall execute and deliver all
documents, provide all information and take or refrain from taking action as may
be necessary or appropriate to achieve the purposes of this Agreement.
 
SECTION 4.4         Binding Effect. This Agreement shall be binding upon and
inure to the benefit of all of the parties and, to the extent permitted by this
Agreement, their successors, executors, administrators, heirs, legal
representatives and assigns.
 
SECTION 4.5         Severability. If any term or other provision of this
Agreement is held to be invalid, illegal or incapable of being enforced by any
rule of law, or public policy, all other conditions and provisions of this
Agreement shall nevertheless remain in full force and effect so long as the
economic or legal substance of the transactions is not affected in any manner
materially adverse to any party. Upon a determination that any term or other
provision is invalid, illegal or incapable of being enforced, the parties hereto
shall negotiate in good faith to modify this Agreement so as to effect the
original intent of the parties as closely as possible in a mutually acceptable
manner in order that the transactions contemplated hereby be consummated as
originally contemplated to the fullest extent possible.
 
 
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SECTION 4.6         Amendment. The provisions of this Agreement may be amended
only by the affirmative vote or written consent of each of (i) the Corporation
and (ii) LLC Unitholders holding at least two thirds of the then outstanding LLC
Units (excluding LLC Units held by the Corporation); provided that except as
otherwise provided herein (including, without limitation, in Section 2.1(d)), no
amendment may materially and adversely affect the rights of an LLC Unitholder,
as such, other than on a pro rata basis with other LLC Unitholders without the
consent of such LLC Unitholder (or, if there is more than one such LLC
Unitholder that is so affected, without the consent of a majority of such
affected LLC Unitholder in accordance with their holdings of LLC Units).
 
SECTION 4.7         Waiver. No failure by any party to insist upon the strict
performance of any covenant, duty, agreement or condition of this Agreement or
to exercise any right or remedy consequent upon a breach thereof shall
constitute waiver of any such breach of any other covenant, duty, agreement or
condition.
 
SECTION 4.8         Submission to Jurisdiction; Waiver of Jury Trial.
 
(a)           Any and all disputes which cannot be settled amicably, including
any ancillary claims of any party, arising out of, relating to or in connection
with the validity, negotiation, execution, interpretation, performance or
non-performance of this Agreement (including the validity, scope and
enforceability of this arbitration provision) shall be finally settled by
arbitration conducted by a single arbitrator in New York in accordance with the
then-existing Rules of Arbitration of the International Chamber of Commerce.  If
the parties to the dispute fail to agree on the selection of an arbitrator
within thirty (30) days of the receipt of the request for arbitration, the
International Chamber of Commerce shall make the appointment. The arbitrator
shall be a lawyer and shall conduct the proceedings in the English language.
Performance under this Agreement shall continue if reasonably possible during
any arbitration proceedings.
 
(b)           Notwithstanding the provisions of paragraph (a), the parties
hereto may bring an action or special proceeding in any court of competent
jurisdiction for the purpose of compelling a party to arbitrate, seeking
temporary or preliminary relief in aid of an arbitration hereunder, and/or
enforcing an arbitration award and, for the purposes of this paragraph (b), each
party hereto (i) expressly consents to the application of paragraph (c) of this
Section 4.8 to any such action or proceeding and (ii) agrees that proof shall
not be required that monetary damages for breach of the provisions of this
Agreement would be difficult to calculate and that remedies at law would be
inadequate.
 
(c)           (i)           EACH PARTY HERETO IRREVOCABLY SUBMITS TO THE
JURISDICTION OF COURTS LOCATED IN NEW YORK, NEW YORK FOR THE PURPOSE OF ANY
JUDICIAL PROCEEDING BROUGHT IN ACCORDANCE WITH THE PROVISIONS OF THIS SECTION
4.8, OR ANY JUDICIAL PROCEEDING ANCILLARY TO AN ARBITRATION OR CONTEMPLATED
ARBITRATION ARISING OUT OF OR RELATING TO OR CONCERNING THIS AGREEMENT. Such
ancillary judicial proceedings include any suit, action or proceeding to compel
arbitration, to obtain temporary or preliminary judicial relief in aid of
arbitration, or to confirm an arbitration award. The parties acknowledge that
the fora designated by this paragraph (c) have a reasonable relation to this
Agreement, and to the parties’ relationship with one another.
 
 
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(ii)         The parties hereby waive, to the fullest extent permitted by
applicable law, any objection which they now or hereafter may have to personal
jurisdiction or to the laying of venue of any such ancillary suit, action or
proceeding brought in any court referred to in the preceding paragraph of this
Section 4.8 and such parties agree not to plead or claim the same.
 
SECTION 4.9         Counterparts. This Agreement may be executed and delivered
(including by facsimile transmission or by e-mail delivery of a “.pdf” format
data file) in one or more counterparts, and by the different parties hereto in
separate counterparts, each of which when executed and delivered shall be deemed
to be an original but all of which taken together shall constitute one and the
same agreement. Copies of executed counterparts transmitted by telecopy, by
e-mail delivery of a “.pdf” format data file or other electronic transmission
service shall be considered original executed counterparts for purposes of this
Section 4.9.
 
SECTION 4.10       Tax Treatment. This Agreement shall be treated as part of the
partnership agreement of HDD as described in Section 761(c) of the Code and
Sections 1.704-1(b)(2)(ii)(h) and 1.761-1(c) of the Treasury Regulations
promulgated thereunder.
 
SECTION 4.11       Specific Performance. The parties hereto agree that
irreparable damage would occur in the event that any of the provisions of this
Agreement were not performed in accordance with their specific terms or were
otherwise breached.  It is accordingly agreed that the parties shall be entitled
to specific performance of the terms and provisions hereof, in addition to any
other remedy to which they are entitled at law or in equity.
 
SECTION 4.12       Independent Nature of LLC Unitholders’ Rights and
Obligations. The obligations of each LLC Unitholder hereunder are several and
not joint with the obligations of any other LLC Unitholder, and no LLC
Unitholder shall be responsible in any way for the performance of the
obligations of any other LLC Unitholder under hereunder.  The decision of each
LLC Unitholder to enter into to this Agreement has been made by such LLC
Unitholder independently of any other LLC Unitholder.  Nothing contained herein,
and no action taken by any LLC Unitholder pursuant hereto, shall be deemed to
constitute the LLC Unitholders as a partnership, an association, a joint venture
or any other kind of entity, or create a presumption that the LLC Unitholders
are in any way acting in concert or as a group with respect to such obligations
or the transactions contemplated hereby and the Corporation acknowledges that
the LLC Unitholders are not acting in concert or as a group, and the Corporation
will not assert any such claim, with respect to such obligations or the
transactions contemplated hereby.
 
SECTION 4.13       Applicable Law. This Agreement shall be governed by, and
construed in accordance with, the law of the State of New York.

 
[Signature page follows]
 
 
11

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IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed
and delivered, all as of the date first set forth above.
  

 
TRUETT-HURST, INC.
                   
By:
/s/ Phillip L. Hurst       Name:  Phillip L. Hurst       Title:  Chief Executive
Officer             LLC UNITHOLDERS  

 
 

     
 
/s/ Mark De Meulenaere     Mark De Meulenaere  

 
 

     
 
/s/ Forrester R. Hambrecht     Forrester R. Hambrecht  

 
 

     
 
/s/ Barrie Graham    
Barrie Graham
 

 
 

     
 
/s/ Virginia Marie Lambrix    
Virginia Marie Lambrix
 

 
 
 

  THE HURST FAMILY REVOCABLE TRUST dated August 1, 2004          
 
By: /s/ Phillip L. Hurst      
Phillip L. Hurst, Co-Trustee
 

 
 

       
 
By: /s/ Sylvia M. Hurst      
Sylvia M. Hurst, Co-Trustee
 

[SIGNATURES CONTINUE ON FOLLOWING PAGE]
 
[Signature page to Exchange Agreement]
 

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HAMBRECHT WINE GROUP, L.P.,
  a California limited partnership

 

  By:        HAMBRECHT WINE MANAGEMENT INC., a California corporation  
Its:       
General Partner

 

       
 
By: /s/ William R. Hambrecht       William R. Hambrecht, Chairman  

 

 
THE DOLAN 2005 FAMILY TRUST U/T/D dated August 24, 2005

 

       
 
By:
/s/ Heath E. Dolan
     
Heath E. Dolan, Trustee
 

 

 
THE DOLAN 2003 FAMILY TRUST U/T/A dated June 5, 2003

 

       
 
By:
/s/ Paul E. Dolan, III
     
Paul E. Dolan, III, Trustee
 

 
THE CARROLL-OBREMSKEY FAMILY REVOCABLE TRUST DATED APRIL 5, 1996

 
 

       
 
By:
/s/ Daniel A. Carroll
     
Daniel A. Carroll, Trustee
 

 

       
 
By:
/s/ Stasia A. Obremskey
     
Stasia A. Obremskey, Trustee
 

 
[SIGNATURES CONTINUE ON FOLLOWING PAGE]
 
[Signature page to Exchange Notice]
 

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/s/ Anna-Marie E. Schweizer    
Anna-Marie E. Schweizer
 

 
 
 
 
 
 
[Signature page to Exchange Notice]
 

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EXHIBIT A

 
FORM OF
ELECTION OF EXCHANGE
 
Truett-Hurst, Inc.
P.O. Box 1532
Healdsburg, CA 95448
Attention: Chief Financial Officer
 
Reference is hereby made to the Exchange Agreement, dated as of June 19, 2013
(the “Exchange Agreement”), by and between Truett-Hurst, Inc., a Delaware
corporation, and the holders of LLC Units (as defined herein) from time to time
party thereto. Capitalized terms used but not defined herein shall have the
meanings given to them in the Exchange Agreement.
 
The undersigned LLC Unitholder hereby transfers to the Corporation the number of
LLC Units set forth below in Exchange for shares of Class A Common Stock or
cash, pursuant to Section 2.1(f) of the Exchange Agreement.  If the Exchange is
for Class A Common Stock, such shares are to be issued in the name set forth
below, as set forth in the Exchange Agreement.
 
Legal Name of LLC Unitholder:
     
Address:
     
Number of LLC Units to be Exchanged:
 

 
The undersigned hereby represents and warrants that (i) the undersigned has full
legal capacity to execute and deliver this Election of Exchange and to perform
the undersigned’s obligations hereunder; (ii) this Election of Exchange has been
duly executed and delivered by the undersigned and is the legal, valid and
binding obligation of the undersigned enforceable against it in accordance with
the terms thereof or hereof, as the case may be, subject to applicable
bankruptcy, insolvency and similar laws affecting creditors’ rights generally
and the availability of equitable remedies; (iii) the LLC Units subject to this
Election of Exchange are being transferred to the Corporation free and clear of
any pledge, lien, security interest, encumbrance, equities or claim; and (iv) no
consent, approval, authorization, order, registration or qualification of any
third party or with any court or governmental agency or body having jurisdiction
over the undersigned or the LLC Units subject to this Election of Exchange is
required to be obtained by the undersigned for the transfer of such LLC Units to
the Corporation.
 
The undersigned hereby irrevocably constitutes and appoints any officer of the
Corporation as the attorney of the undersigned, with full power of substitution
and resubstitution in the premises, to do any and all things and to take any and
all actions that may be necessary to transfer to the Corporation the LLC Units
subject to this Election of Exchange and to deliver to the undersigned the
shares of Class A Common Stock to be delivered in Exchange therefor.
 
A-1
 

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IN WITNESS WHEREOF the undersigned, by authority duly given, has caused this
Election of Exchange to be executed and delivered by the undersigned or by its
duly authorized attorney.
 

       
Name of LLC Unitholder
                 
By:
             
Printed Name:
             
Capacity:
                     
Dated:
   

 
 
 
 
 
 
[Signature page to Exchange Notice]
 

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EXHIBIT B
 
FORM OF
CASH ELECTION NOTICE
 
[Exchanging LLC Unitholder]
[Address]
 

 
Reference is hereby made to the Exchange Agreement, dated as of June 19, 2013
(the “Exchange Agreement”), by and between Truett-Hurst, Inc., a Delaware
corporation (the “Corporation”), and the holders of LLC Units (as defined
therein) from time to time party thereto. Capitalized terms used but not defined
herein shall have the meanings given to them in the Exchange Agreement.
 
The Corporation received an Election of Exchange from the below LLC Unitholder
on [  ], 20[  ].  Pursuant to Section 2.1(f) of the Exchange Agreement, the
Corporation has elected to satisfy the Exchange in cash in lieu of Class A
Common Stock.
 
Legal Name of LLC Unitholder:
     
Number of LLC Units to be Exchanged:
     
Market Value per LLC Unit:
$
   
Aggregate Market Value:
$

 
[Remainder of page left blank]
 
B-1
 

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IN WITNESS WHEREOF the undersigned, by authority duly given, has caused this
Cash Election Notice to be executed and delivered by the undersigned or by its
duly authorized attorney.
 

 
TRUETT-HURST, INC.
           
By:
       
Name:
     
Title:
           
Dated:
   

 
 
 
 
 
 
B-2
 

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EXHIBIT C
 
FORM OF
JOINDER AGREEMENT
 
This Joinder Agreement (“Joinder Agreement”) is a joinder to the Exchange
Agreement, dated as of June 19, 2013 (the “Agreement”), by and between
Truett-Hurst, Inc., a Delaware corporation (the “Corporation”), and each of the
LLC Unitholders from time to time party thereto. Capitalized terms used but not
defined in this Joinder Agreement shall have their meanings given to them in the
Agreement. This Joinder Agreement shall be governed by, and construed in
accordance with, the law of the State of New York. In the event of any conflict
between this Joinder Agreement and the Agreement, the terms of this Joinder
Agreement shall control.
 
The undersigned hereby joins and enters into the Agreement having acquired LLC
Units in HDD. By signing and returning this Joinder Agreement to the
Corporation, the undersigned (i) accepts and agrees to be bound by and subject
to all of the terms and conditions of and agreements of an LLC Unitholder
contained in the Agreement, with all attendant rights, duties and obligations of
an LLC Unitholder thereunder and (ii) makes each of the representations and
warranties of an LLC Unitholder set forth in Section 3.2 of the Agreement as
fully as if such representations and warranties were set forth herein. The
parties to the Agreement shall treat the execution and delivery hereof by the
undersigned as the execution and delivery of the Agreement by the undersigned
and, upon receipt of this Joinder Agreement by the Corporation, the signature of
the undersigned set forth below shall constitute a counterpart signature to the
signature page of the Agreement.
 

Name:           Dated:    

 
Address for Notices:
  With copies to:
 
     
 
     
 
     
 
Attention:
     

 
 
 
 
 
 C-1

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