EXECUTION DRAFT
SECURITY AGREEMENT
 
            THIS SECURITY AGREEMENT (“Security Agreement”) is made and entered
into this ____ day of October, 2009, by and among Sapphire Advisors, LLC, a
Delaware limited liability company (“Secured Party”), Sapphire Wines, LLC, a
Delaware limited liability company (“Sapphire Wines”), Emerald Wines, LLC, a
Delaware limited liability company (“Emerald Wines”), and The Saint James Eos
Wine Company, a California corporation (“Purchaser,” and together with Sapphire
Wines and Emerald Wines collectively and individually “Pledgor”).
 
WITNESSETH:
 
            WHEREAS, in connection with that certain Membership Interest
Purchase Agreement, dated October ___, 2009 (the “Purchase Agreement”), by and
among Purchaser, The Saint James Company, a North Carolina corporation, and
Secured Party, Purchaser is executing and delivering to Secured Party that
certain Secured Promissory Note of Pledgor, dated of even date herewith, in
favor of Secured Party in the initial principal amount of $6,128,559.91 (the
“Note”);
 
WHEREAS, in accordance with the Purchase Agreement, Purchaser is purchasing all
of the membership interests of Sapphire Wines and Emerald Wines;
 
            WHEREAS, Secured Party has required, as a condition to entering into
the Purchase Agreement, that Pledgor execute and deliver this Security
Agreement. (Capitalized terms not defined herein shall have the meaning given in
the Purchase Agreement.); and
 
            WHEREAS, Sapphire Wines and Emerald Wines will be benefited by the
transactions contemplated in the Purchase Agreement.
 
            NOW, THEREFORE, in consideration of the foregoing and other good and
valuable consideration, the receipt, adequacy, and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:
 
1.            Pledge.  As security for the prompt and complete payment and
performance of Purchaser’s obligations under the Note (the “Obligations”),
Pledgor hereby pledges and grants a security interest to Secured Party in all of
its right, title and interest, whether now existing or hereafter arising or
acquired, in and to any and all items of its personal property which are or have
been used or are useable in, or reasonably necessary to, the historical or
current operations of the Business, wherever located, including, without
limitation, the property set forth below (collectively, the “Collateral”):
 
a.             As such term is defined in the Uniform Commercial Code as the
same may from time to time be in effect in the State of California (the “Code”),
all “Equipment”, in all of its forms, wherever located and all fixtures and all
parts thereof and all accessions, parts, appurtenances, additions, attachments,
improvements, substitutions and replacements thereto and therefor (any and all
of the foregoing being the “Equipment”);
 

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b.            As such terms are defined in the Code, all “Accounts,” “Chattel
Paper,” “Commercial Tort Claims,” “Deposit Accounts,” “Documents,” “Goods,”
“General Intangibles,” “Instruments,” “Inventory,” “Investment Property,” and
“Supporting Obligations”;
 
c.            All books, records, writings, correspondence, files, data bases,
computer programs, tapes, disks, information and other property relating to,
used or useful in connection with, evidencing, embodying, incorporating or
referring to, any of the foregoing in this Section 1; and
 
d.            All “Proceeds” thereof, as such term is defined in the Code.
 
2.            Pledgor Remains Liable.  Anything herein to the contrary
notwithstanding:
 
a.            Pledgor shall remain liable under the contracts and agreements
included in the Collateral to the extent set forth therein, and shall perform
all of its duties and obligations thereunder to the same extent as if this
Security Agreement had not been executed;
 
b.            the exercise by Secured Party of any of its rights hereunder shall
not release Pledgor from any of its duties or obligations under the contracts or
agreements included in the Collateral; and
 
c.            Secured Party shall not have any obligation or liability under
such contracts or agreements included in the Collateral solely by reason of this
Security Agreement, and, accordingly, Secured Party shall not be obligated to
perform any of the obligations or duties of Pledgor thereunder or to take any
action to collect or enforce any claim for payment assigned hereunder.
 
3.            Covenants.  Pledgor covenants and agrees that, during the term of
this Security Agreement, Pledgor will perform the obligations set forth in this
Section 3.
 
a.            Place of Perfection; Records. Pledgor hereby agrees that it shall:
 
i.             keep its chief place of business and chief executive office and
the office where it keeps its records concerning the Accounts, and all originals
of all Chattel Paper that evidence Accounts, at Pledgor’s existing location as
of the date hereof; provided, that such places or offices may be moved to other
locations within the United States so long as Pledgor provides Secured Party
with at least thirty (30) calendar days prior notice;
 
ii.            not change its name or state of domicile except upon thirty (30)
calendar days prior written notice to Secured Party; and
 
iii.           hold and preserve its books and records and Chattel Paper and
permit Secured Party and its representatives the right of periodic access to
inspect and make abstracts from such books and records and Chattel Paper upon
reasonable notice, subject to the execution by Secured Party and its
representatives and affiliates of a standard confidentiality agreement.
 

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b.            Books, Records and Inspections.  Pledgor shall:  (i) maintain
complete and accurate books and records; (ii) permit reasonable access by
Secured Party and its representatives to its books and records; and (iii) permit
Secured Party, upon reasonable notice, to inspect its operations and properties,
whether real or personal.
 
c.            Taxes and Liabilities.  Pledgor shall pay when due all taxes,
assessments and other liabilities except as contested in good faith and by
appropriate proceedings and for which adequate reserves have been established.
 
d.            Indebtedness.  Pledgor will not incur or permit to exist any
indebtedness or liability for borrowed money or for the deferred purchase price
of any property or any services, except:  (i) in the ordinary course of its
business or (ii) with respect to the Farm Credit Obligations or a Qualified
Refinancing (as defined in Section 5).
 
e.            Mergers, Consolidations and Sales.  Pledgor will not:  (i) be a
party to any merger or consolidation with, or purchase or otherwise acquire all
or substantially all of the assets or stock of any class of, or any partnership
or joint venture interest in, any other person; (ii) sell, transfer, convey or
lease all or any substantial part of its assets; (iii) sell or assign, with or
without recourse, any Accounts; or (iv) enter into any other transaction outside
the ordinary course of business, except, in each case, with the prior written
consent of the Secured Party, except, in each case, with the prior written
consent of the Secured Party, which may not be unreasonably withheld, delayed,
or denied.
 
f.             Equity Interests.  Pledgor shall neither purchase, retire,
redeem, nor otherwise acquire any of its equity interests, except, in each case,
with the prior written consent of the Secured Party, which may not be
unreasonably withheld, delayed, or denied.
 
g.            Organizational Documents.  Pledgor shall not make any changes in
its capital structure or amend any of its organizational documents, except, in
each case, with the prior written consent of the Secured Party, which may not be
unreasonably withheld, delayed, or denied.
 
h.            Litigation and Other Material Events.  Pledgor shall immediately
in writing notify Secured Party of the institution of or threat of any
litigation or administrative proceeding against Pledgor seeking damages in
excess of $200,000 and any other event or occurrence that might have a material
adverse affect on the properties, assets, liabilities, or finances of Pledgor.
 
i.             Collection of Accounts. Except as otherwise provided in this
Section 3(i), Pledgor shall collect, at its own expense, all amounts due or to
become due to Pledgor under the Accounts.  In connection with such collections,
Pledgor may take such action as Pledgor may deem necessary or advisable to
enforce collection of the Accounts; provided, however, that Secured Party shall
have the right upon and during the continuance of an Event of Default (but only
subsequent to the expiration of any relevant cure period) to notify the account
debtors or obligors under any Accounts of the assignment of such Accounts to
such Secured Party and to direct such account debtors or obligors to make
payment of all amounts due or to become due to Pledgor thereunder directly to
such Secured Party and, at the expense of Pledgor, to enforce collection of any
such Accounts, and to adjust, settle or compromise the amount or payment
thereof, in the same manner and to the same extent as Pledgor might have done. 
Upon and during the continuance of any Event of Default (but only subsequent to
the expiration of any relevant cure period), all amounts and proceeds (including
instruments) received by Pledgor in respect of the Accounts shall be received in
trust for the benefit of Secured Party hereunder shall be segregated from other
funds of Pledgor, and shall be forthwith paid over to Secured Party in the same
form as so received (with any necessary endorsement) to be held as cash
collateral and applied as provided in this Security Agreement.
 

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j.            Transfers and Other Liens.  Pledgor shall not:
 
i.             sell, lease, assign, transfer or otherwise dispose of any now
owned or hereafter acquired Collateral except:  (i) Inventory disposed of in the
ordinary course of business; and (ii) the sale or other disposition of assets no
longer used or useful in the conduct of Pledgor’s business; or
 
ii.            create or permit to exist any liens, claims, security interest,
charge or encumbrance upon or with respect to any of the Collateral to secure
indebtedness of any person or entity except:  (i) in the ordinary course of its
business, (ii) with respect to the Farm Credit Obligations or a Qualified
Refinancing, or (iii) with respect to any such encumbrance that is lesser in
priority to the rights granted hereunder.
 
k.           Control.  Pledgor will cooperate with Secured Party in obtaining
control with respect to Collateral consisting of:  (i) Deposit Accounts; (ii)
Investment Property; and (iii) Supporting Obligations.  With respect to the
foregoing and the grant of the security interest hereunder, Pledgor hereby
authorizes Secured Party to file one or more financing or continuation
statements, and amendments thereto, and any instruments giving notice of the
security interest hereunder relative to all or any part of the Collateral
without the signature of Pledgor where permitted by law; provided, however,
that, concurrently with any such filing, Secured Party shall deliver a true and
correct copy thereof to Pledgor. A carbon, photographic or other reproduction of
this Security Agreement or any financing statement covering the Collateral or
any part thereof shall be sufficient as a financing statement where permitted by
law.
 
4.            Representations.  Pledgor hereby makes the following
representations and warranties to Secured Party, which representations and
warranties shall survive the execution and delivery of this Security Agreement:
 
a.            Pledgor owns all of the Collateral free and clear of any liens,
encumbrances, charges or security interests of any nature whatsoever, except as
set forth on Schedule 1 hereto;
 
b.            Pledgor has full power and authority to enter into this Pledge
Agreement and to pledge and grant a security interest in or otherwise transfer
the Collateral free of any restrictions, liens, claims and encumbrances, except
as set forth on Schedule 1; and
 

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c.            None of the Collateral is subject to any option to purchase or
similar rights of any person, entity or trust, except as set forth on Schedule
1.  Pledgor is not and will not become party to or otherwise bound by any
agreement which restricts in any manner the rights of any present or future
holder of any of the Collateral with respect thereto, except with the prior
written consent of the Secured Party, which may not be unreasonably withheld,
delayed, or denied.
 
5.            Limitation on Liens and Dispositions.  Pledgor agrees that it will
not create, permit or suffer to exist, and will defend the Collateral against
and take such other action as is necessary to remove any mortgage, pledge, title
retention lien, or other lien, encumbrance or security interest lien on the
Collateral (except for liens with respect to the Farm Credit Obligations or any
Qualified Refinancing or with respect to any lien that is lesser in priority to
the rights granted hereunder) and will defend the right, title and interest of
Secured Party in and to any of Pledgor’s right, title and interest in and to the
Collateral against the claims and demands of all other Persons.  Pledgor will
not sell, assign, exchange, grant a security interest in (except for liens with
respect to any Farm Credit Obligations or any Qualified Refinancing), transfer,
encumber, or otherwise dispose of, any of the Collateral, or attempt or contract
to do so without Secured Party’s prior written consent, which may not be
unreasonably withheld, delayed, or denied.  The term Qualified Refinancing shall
mean any refinancing of the Farm Credit Obligations in a principal amount of up
to Ten Million Dollars ($10,000,000).
 
6.            Subsequent Changes Affecting Collateral.  Secured Party may, upon
and during the continuance of an Event of Default (but only subsequent to the
expiration of any relevant cure period), at its option upon written notice to
Pledgor, transfer or register the Collateral or any part thereof into its name
or that of a Direct Successor (as defined in Section 19) with or without any
prominent indication that such Collateral is subject to the security interest
hereunder.
 
7.            Attorney-in-Fact.  Pledgor hereby irrevocably appoints Secured
Party, acting individually, as Pledgor’s attorney-in-fact, with full authority
in the place and stead of Pledgor and in the name of Pledgor or otherwise, from
time to time in such Secured Party’s discretion, upon and during the continuance
of an Event of Default (but only subsequent to the expiration of any relevant
cure period), to take any action and to execute any instrument which such
Secured Party may deem reasonably necessary or advisable to accomplish the
purposes of this Security Agreement, including, without limitation:
 
a.            To ask, demand, collect, sue for, recover, compromise, receive and
give acquittance and receipts for moneys due and to become due under or in
connection with the Collateral;
 
b.            To receive, endorse, and collect any drafts or other instruments,
documents, and chattel paper; and
 
c.            To file any claims or take any action or institute any proceedings
which such Secured Party may deem reasonably necessary or desirable for the
collection of any of the Collateral or the rights of such Secured Party with
respect to any of the Collateral; provided, however, that, if such Secured Party
takes any of the foregoing actions during a period that such appointment is
effective, any such specific actions shall remain effective notwithstanding the
waiver or cure of the triggering Event of Default.  Pledgor hereby acknowledges,
consents and agrees that the power of attorney granted pursuant to this Section
7 is irrevocable and coupled with an interest.
 

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8.            Secured Party’s Duties.  The powers conferred on Secured Party
hereunder are solely to protect its interest in the Collateral and shall not
impose any duty upon it to exercise any such powers.  Except for the safe
custody of any Collateral in its possession and the accounting for moneys
actually received by it hereunder, Secured Party shall not be responsible for: 
(a) the safekeeping of Collateral; (b) any loss or damage to Collateral; (c) any
diminution in the value of Collateral; or (d) any act or default of any other
Person with respect to Collateral.  Secured Party shall have no other duties as
to any Collateral or as to the taking of any necessary steps to preserve rights
against prior parties or any other rights pertaining to any Collateral.  Secured
Party shall be deemed to have exercised reasonable care in the custody and
preservation of any Collateral in its possession if such Collateral is accorded
treatment substantially equal to that which it accords its own property in the
ordinary course of business.
 
9.            Consent.  Pledgor hereby consents that, from time to time, before
or after the occurrence or existence of an Event of Default, with or without
notice to or assent from Pledgor, any other security at any time held by or
available to Secured Party for any of the Obligations or any security at any
time held by or available to Secured Party for any obligation of any other
Person secondarily or otherwise liable for any of the Obligations may be
changed, altered, renewed, extended, continued, surrendered, compromised, waived
or released, in whole or in part, as Secured Party may reasonably see fit, and
Pledgor shall remain bound under this Security Agreement notwithstanding any
such exchange, surrender, release, alteration, renewal, extension, continuance,
compromise, waiver or inaction, extension of further credit or other dealing.
 
10.          Remedies.
 
a.            Upon and during the continuance of an Event of Default (but only
subsequent to the expiration of any relevant cure period), Secured Party shall
have, in addition to any other rights given by law or equity, all of the rights
and remedies with respect to the Collateral of a secured party under the Code. 
In addition, with respect to the Collateral, or any part thereof, which shall
then be or shall thereafter come into the possession or custody of Secured
Party, Secured Party may in its sole discretion, upon notice as provided in
Section 10(b) below, sell or cause the same to be sold at any public or private
sale, in one or more sales or lots, at such price as Secured Party may
reasonably deem best, and for cash or on credit or for future delivery, without
assumption of any credit risk, and the Pledgor of any or all of the Collateral
so sold shall thereafter hold the same, absolutely free from any claim,
encumbrance or right of any kind whatsoever.  Secured Party may, in its own
name, or in the name of a designee or nominee (so long as Secured Party
discloses such relationship to Pledgor not less than 10 calendar days prior to
any such public or private sale), buy the Collateral at any public sale and, if
permitted by applicable law, buy the Collateral at any private sale.  Pledgor
hereby waives all of its rights of redemption from any sale or other disposition
of the Collateral, to the extent permitted by law.  Pledgor will pay to Secured
Party all expenses (including, without limitation, court costs and reasonable
attorneys’ fees and expenses) of, or incident to, the enforcement of any of the
provisions hereof.  Neither Secured Party, nor a party acting as its attorney,
shall be liable for any acts or omissions or for any error of judgment or
mistake of fact or law other than their gross negligence or willful misconduct. 
Secured Party agrees to return to Pledgor any proceeds of the sale of the
Collateral that exceed the then outstanding balance of the Obligations and the
expenses described above. 
 

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b.            Secured Party will give Pledgor reasonable notice of the time and
place of any public sale thereof, or of the time after which any private sale or
other intended disposition is to be made.  Pledgor acknowledges and agrees that
the requirement of reasonable notice shall be met if such notice is received by
Pledgor at least 10 business days before the time of the sale or disposition. 
Any other requirement of notice, demand or advertisement for sale is, to the
extent permitted by law, waived.
 
11.          Security Interest.  The pledge and security interests herein
created and provided for stand as direct and primary security for all of the
Obligations.  No application of any sums received by any Secured Party in
respect of the Collateral or any disposition thereof to the reduction of the
Obligations or any part thereof shall in any manner entitle Pledgor to any
right, title or interest in or to the Obligations or any collateral security
therefor unless and until all Obligations have been fully paid and satisfied. 
Pledgor acknowledges and agrees that the pledge and security interests hereby
created are absolute and unconditional and shall not in any manner be affected
or impaired by any acts or omissions whatsoever of any Secured Party or its
affiliates or any other holder of any of the Obligations, and, without limiting
the generality of the foregoing, the pledge and security interests hereby
created shall not be impaired by any acceptance by any Secured Party or any
Direct Successor of any of the Obligations or any other security for or
guarantor upon any of or by any failure, neglect, or omission on the part of any
Secured Party of any of the Obligations to realize upon or protect any of the
Obligations or any collateral security therefor.  The pledge and security
interests hereby created shall not in any manner be impaired or affected by any
sale, pledge, surrender, compromise, settlement, release, renewal, extension,
indulgence, alteration, substitution, exchange, change in, modification or
disposition of any of the Obligations, or of any collateral security therefor,
or of any guaranty thereof, or of the Note.
 
12.          Waivers and Consents.  Upon and during the continuance of any Event
of Default (but only subsequent to the expiration of any relevant cure period),
Secured Party may enforce this Security Agreement independently, and it shall
not be necessary for Secured Party to marshal assets in favor of Pledgor or any
other Person or to proceed upon or against and/or exhaust any other security or
remedy before proceeding to enforce this Security Agreement.  Secured Party’s
rights hereunder shall be reinstated and revived, and the enforceability of this
Security Agreement shall continue, with respect to any amount at any time paid
on account of the Obligations which thereafter shall be required to be restored
or returned by such Secured Party (whether as a “voidable preference”,
“fraudulent conveyance” or otherwise) upon the Bankruptcy, insolvency or
reorganization of Pledgor, or otherwise, all as though such amount had not been
paid.  The liens created or granted herein and the enforceability of this
Security Agreement at all times shall remain effective to secure the full amount
of all the Obligations even though the Obligations, including any part thereof
or any other security or guaranty therefor, may be or hereafter may become
invalid or otherwise unenforceable and whether or not Pledgor shall have any
personal liability with respect thereto.  Pledgor expressly waives any and all
defenses now or hereafter arising or asserted by reason of:  (a) the
unenforceability or invalidity of any security or guaranty for the Obligations
or the lack of perfection or continuing perfection or failure of priority of any
security for the Obligations; (b) any failure of Secured Party to marshal assets
in favor of Pledgor or any other Person, (c) any act or omission of any Secured
Party or others that directly or indirectly results in or aids the discharge or
release of any portion of the Obligations or any other security or guaranty
therefor by operation of law or otherwise, except any act of gross negligence or
willful misconduct which such Secured Party is determined by the judgment of a
court of competent jurisdiction (sustained on appeal, if any) to have committed,
or (d) any action taken by any Secured Party that is authorized by this Section
12 or any other provision of this Security Agreement. 
 

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13.          Understandings With Respect To Waivers And Consents.  Pledgor
warrants and agrees that each of the waivers and consents set forth herein are
made after consultation with legal counsel and with full knowledge of their
significance and consequences, with the understanding that events giving rise to
any defense or right waived may diminish, destroy or otherwise adversely affect
rights which Pledgor otherwise may have against Secured Party or others or
against the Collateral, and that, under the circumstances, the waivers and
consents herein given are reasonable.  Such waivers and consents shall be
effective to the maximum extent permitted by law.
 
14.          Term.  This Security Agreement shall remain in full force and
effect until all Obligations have been performed in full, including payment of
all principal and other fees and expenses due thereon.  Promptly following the
termination of this Security Agreement as provided above (other than as a result
of the sale of the Collateral), Secured Party will release the security interest
and lien created hereunder and will deliver the Collateral to Pledgor.
 
15.          Amendments.  No amendment, modification, termination or waiver of
any provision of this Security Agreement shall in any event be effective unless
the same shall be in writing and signed by Secured Party and Pledgor.  No notice
to or demand on Pledgor in any case shall entitle Pledgor to any other or
further notice or demand in similar or other circumstances.
 
16.          Costs and Expenses.  Pledgor agrees to pay all costs and expenses
(including reasonable attorneys’ fees), if any, incurred by any Secured Party in
connection with the enforcement of this Security Agreement.
 
17.          Further Assurances.  Pledgor agrees that it will cooperate with
Secured Party and will execute and deliver, or cause to be executed and
delivered, all such other proxies, instruments and documents, and will take all
such other action, including, without limitation, the filing of financing
statements, as any Secured Party may reasonably request from time to time in
order to carry out the provisions and purposes hereof.  Without limiting the
generality of the foregoing, Pledgor will:
 
a.            permit Secured Party and its designees, from time to time during
normal business hours and upon at least 48 hours written notice, to inspect the
Collateral, and to inspect, audit and make copies of and extracts from all
records and all other papers in the possession of Pledgor, and will, upon and
during the continuance of an Event of Default (but only subsequent to the
expiration of any relevant cure period), at the request of any Secured Party,
deliver to any Secured Party true and correct copies all of such records and
papers which pertain to the Collateral; and
 

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b.            furnish to any Secured Party, from time to time at any Secured
Party’s request, statements and schedules further identifying and describing the
Collateral and such other reports in connection with the Collateral as any
Secured Party may reasonably request, all in reasonable detail.
 
18.          Reserved.
 
19.          Priority of Liens; Subordination.  Secured Party hereby further
acknowledges the security interests granted hereby shall be a second priority
lien subordinate only to the security interests securing the Farm Credit
Obligations (and those in place thereof, e.g., a Qualified Refinancing). 
Secured Party agrees to execute a subordination agreement with Farm Credit or
the holder(s) of the security interest securing the Qualified Refinancing, as
applicable, in a form reasonably acceptable to Secured Party’s counsel which
provides that, except during the pendency of any event of default set forth in
the documents underlying the Farm Credit Obligations or Qualified Refinancing,
as applicable, payments shall be made when due under the Note (and, if such
event of default is cured, any payments suspended during the pendency of such
event of default, are promptly paid to Secured Party); provided, however, that,
if either Farm Credit or the entity that provides the Qualifying Refinancing
shall impose more “restrictive subordination provisions” as a condition to
providing Pledgor with access to its reasonably required financing, Secured
Party shall execute such further-restricted subordination agreement.  For
purposes of this Agreement, the phrase “restrictive subordination provisions”
means (i) reserve requirements imposed upon either or both of Pledgor and Saint
James, (ii) cash, free cash, or excess cash requirements imposed upon either or
both of Pledgor and Saint James, (iii) financial ratios or financial statement
ratios imposed upon either or both of Pledgor and Saint James, (iv) requirements
that all payments to grape growers or suppliers for the current or upcoming
season, as imposed upon either or both of Pledgor and Saint James, shall have
been made in full, or (v) equivalent restrictions, such that Farm Credit or the
Qualifying Financing entity has the contractual right and power to limit or
preclude the performance by the Pledgor of its obligations to the Secured Party
under the Note or the obligations of Saint James, as guarantor under that
certain Guaranty in favor of the Secured Party, of even date herewith; subject
to the Pledgor not being in breach of any of its covenants in any such financing
agreement, as of the effective date of each financing agreement between the
Pledgor and Farm Credit or between the Pledgor and the Qualifying Financing
entity, as appropriate. 
 
20.          Successors.  This Security Agreement shall be binding upon and
inure to the benefit of Pledgor, Secured Party and their respective heirs, legal
representatives, successors. 
 
21.          Notices.  Whenever any party hereto desires or is required to give
any notice, demand or request with respect to this Note, each such communication
shall be in writing and shall be effective only if it is delivered as provided
in Section 12.9 of the Purchase Agreement.
 

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22.          Binding Nature, Governing Law.  This Security Agreement shall be
binding upon Pledgor and its successors and assigns and shall inure to the
benefit of Secured Party and its direct successors, the equity and debt
structure of which shall be substantially identical to Secured Party’s as of the
date hereof (a “Direct Successor”), including any subsequent permitted holder of
all or a portion of the Note.  This Security Agreement and the rights and duties
of the parties hereto shall be governed by and construed in accordance with the
laws of the State of California, without regards to its conflict of laws
provisions.  This Security Agreement, the Note, and the Purchase Agreement
constitute the entire understanding of the parties with respect to the subject
matter hereof and any prior agreements, whether written or oral, with respect
thereto are superseded hereby.  Pledgor may not assign its rights hereunder
without the prior written consent of the Secured Party, which may not be
unreasonably withheld, delayed, or denied.
 
23.          General.  Article and paragraph headings used in this Security
Agreement are for convenience of reference only and are not to be part of this
Security Agreement for any other purpose.  Any provision of this Security
Agreement which is prohibited or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof or
affecting the validity or enforceability of such provision in any other
jurisdiction.  The language used in this Security Agreement will be deemed to be
the language chosen by the parties hereto to express their mutual intent, and no
rule of strict construction will be applied against any party.  This Security
Agreement may be executed in any number of counterparts and by different parties
hereto on separate counterparts, and all such counterparts taken together shall
be deemed to constitute one instrument.
 
24.          Waiver of Jury Trial; Venue; Jurisdiction.  PLEDGOR AND SECURED
PARTY WAIVE ANY RIGHT TO TRIAL BY JURY ON ANY ACTION OR PROCEEDING TO ENFORCE OR
DEFEND ANY RIGHTS (A) UNDER THIS SECURITY AGREEMENT OR ANY AMENDMENT,
INSTRUMENT, DOCUMENT OR SECURITY AGREEMENT WHICH MAY BE DELIVERED IN THE FUTURE
IN CONNECTION WITH THE OBLIGATIONS, OR (B) ARISING FROM THE TRANSACTIONS
CONTEMPLATED BY THIS SECURITY AGREEMENT AND AGREES THAT ANY SUCH ACTION OR
PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY.  PLEDGOR AND
SECURED PARTY IRREVOCABLY AGREE THAT ALL ACTIONS OR PROCEEDINGS IN ANY WAY,
MANNER OR RESPECT ARISING OUT OF OR FROM OR RELATED TO THIS SECURITY AGREEMENT
OR THE OBLIGATIONS SHALL BE LITIGATED ONLY IN COURTS HAVING SITUS WITHIN THE
CITY OF SAN FRANCISCO, STATE OF CALIFORNIA.  PLEDGOR AND SECURED PARTY HEREBY
CONSENT AND SUBMIT TO THE EXCLUSIVE JURISDICTION OF ANY LOCAL, STATE OR FEDERAL
COURT LOCATED WITHIN SAID CITY AND STATE.  PLEDGOR AND SECURED PARTY HEREBY
WAIVES ANY RIGHT HE OR IT MAY HAVE TO TRANSFER OR CHANGE VENUE OF ANY SUCH
ACTION OR PROCEEDING.
 

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IN WITNESS WHEREOF, the parties hereto have executed and delivered this Security
Agreement as of the date first set forth above.
 
PLEDGOR:
 
SECURED PARTY:
     
THE SAINT JAMES EOS WINE COMPANY
 
SAPHIRE ADVISORS, LLC
     
By:
   
By:
 
Its: 
   
Its:
       
SAPPHIRE WINES, LLC
   
By: THE SAINT JAMES EOS WINE COMPANY
         
By:
     
Its:
           
EMERALD WINES, LLC
   
By: THE SAINT JAMES EOS WINE COMPANY
         
By:
     
Its:
     

 
 
 

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