PURCHASE AGREEMENT





                                     Among





                           SEBASTIANI VINEYARDS, INC.,



                          TUOLOMNE RIVER VINTNERS GROUP



                                      and



                         CANANDAIGUA WINE COMPANY, INC.





                          Dated as of January 30, 2001



                              --------------------





                          SALE OF TURNER ROAD VINTNERS






<PAGE>
                               TABLE OF CONTENTS


ARTICLE 1 PURCHASE AND SALE OF ASSETS........................................1
   1.1        Purchase of Assets; Assumption of Liabilities..................1
   1.2        Non-Assignable Agreements and Rights...........................4
   1.3        Closing; Closing Purchase Price Allocation.....................4
   1.4        Closing Purchase Price Adjustment..............................6
   1.5        Inventory Adjustment...........................................8

ARTICLE 2 REPRESENTATIONS AND WARRANTIES OF SELLERS..........................8
   2.1        Corporate Organization; Qualification..........................8
   2.2        Authorizations; Etc............................................8
   2.3        No Violation...................................................9
   2.4        Financial Statements...........................................9
   2.5        Absence of Certain Changes.....................................10
   2.6        Assets of Business.............................................10
   2.7        Title to Assets................................................10
   2.8        Trademarks and Intellectual Property...........................11
   2.9        Litigation.....................................................11
   2.10       Compliance with Law............................................11
   2.11       Tax Matters....................................................12
   2.12       Employees......................................................12
   2.13       Benefit Plans; ERISA...........................................14
   2.14       Insurance......................................................16
   2.15       Contracts; No Default..........................................16
   2.16       Customers and Suppliers........................................16
   2.17       Licenses and Registrations.....................................16
   2.18       Books and Records..............................................17
   2.19       As Is, Where Is Sale...........................................17
   2.20       No Other Representations or Warranties.........................17

ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF BUYER............................20
   3.1        Corporate Organization; Etc....................................20
   3.2        Authorization; Etc.............................................20
   3.3        No Violation...................................................20
   3.4        Consents and Approvals of Governmental Authorities.............21
   3.5        Funds..........................................................21
   3.6        Omitted........................................................21
   3.7        Disclosure of Information......................................21
   3.8        Investment Experience..........................................21
   3.9        Omitted........................................................21
   3.10       No Other Representations or Warranties.........................21

ARTICLE 4 CONDUCT OF BUSINESS PENDING THE CLOSING DATE.......................22
   4.1        Regular Course of Business.....................................22
   4.2        Organization...................................................23

<PAGE>

   4.3        Insurance; Property............................................23
   4.4        No Default; Amendment..........................................23
   4.5        Compliance with Laws...........................................23
   4.6        No Acquisitions; Exclusivity...................................23

ARTICLE 5 COVENANTS OF SELLERS AND BUYER.....................................24
   5.1        Full Access....................................................24
   5.2        Consents, Removal of Objections................................24
   5.3        Employees......................................................25
   5.4        Further Assurances.............................................25
   5.5        Public Announcements...........................................26
   5.6        Actions of Buyer Affecting Representations and Warranties......26
   5.7        Actions of Sellers Affecting Representations and Warranties....26
   5.8        Notification; Updates to Disclosure Schedule...................26
   5.9        Conduct Pending the Closing....................................27
   5.10       Access by Sellers; Books and Records...........................27
   5.11       Plant Closings.................................................28
   5.12       Certain Financial Information..................................28
   5.13       Bulk Sales.....................................................29
   5.14       Distributors...................................................29
   5.15       Mutual Assistance on Accounts Receivable.......................29
   5.16       Transition Services............................................29
   5.17       Title Matters..................................................29
   5.18       Liens..........................................................29
   5.19       Sellers' Financial Statements..................................29
   5.20       Business Information...........................................30

ARTICLE 6 CONDITIONS TO BUYER'S OBLIGATIONS..................................31
   6.1        Representations and Warranties True............................31
   6.2        Performance....................................................31
   6.3        Consents.......................................................31
   6.4        HSR; No Proceeding or Litigation...............................31
   6.5        Opinions of Counsel............................................32
   6.6        Certificates...................................................32
   6.7        Adverse Changes................................................32
   6.8        Funds..........................................................32
   6.9        Title to Real Property.........................................32
   6.10       FIRPTA Certificate.............................................32
   6.11       Transitional Services..........................................33
   6.12       List of Payable and Accounts Receivable........................33

ARTICLE 7 CONDITIONS TO SELLER'S OBLIGATIONS.................................33
   7.1        Representations and Warranties True............................33
   7.2        Performance....................................................33
   7.3        HSR; No Proceeding or Litigation...............................33
   7.4        Consents.......................................................34
   7.5        Opinions of Counsel............................................34

<PAGE>

   7.6        Certificate....................................................34
   7.7        Transitional Services..........................................34

ARTICLE 8 TERMINATION AND ABANDONMENT........................................34
   8.1        Methods of Termination.........................................34
   8.2        Procedure upon Termination.....................................34

ARTICLE 9 SURVIVAL OF REPRESENTATIONS AND WARRANTIES; INDEMNITY..............35
   9.1        Survival of Representations and Warranties and Covenants.......35
   9.2        Indemnification by Sellers.....................................35
   9.3        Indemnification by Buyer.......................................36
   9.4        Termination of Indemnification.................................37
   9.5        Procedures Relating to Indemnification.........................37
   9.6        Sellers' Representative........................................38

ARTICLE 10 MISCELLANEOUS PROVISIONS..........................................39
   10.1       Arbitration....................................................39
   10.2       Amendment and Modification.....................................39
   10.3       Waiver of Compliance...........................................39
   10.4       Expenses; Attorneys' Fees......................................39
   10.5       Notices........................................................40
   10.6       Assignment.....................................................41
   10.7       Governing Law..................................................41
   10.8       Counterparts...................................................42
   10.9       Entire Agreement...............................................42
   10.10      Third Party Beneficiaries......................................42
   10.11      Certain Definitions............................................42

Schedules
---------

1.1(a)(i)         Real Property
1.1(a)(iv)        Equipment
1.1(a)(v)         Contracts
1.1(a)(vii)       Inventory
1.1(a)(ix)        Intellectual Property
1.1(b)(iv)        Promotional Spending
1.1(c)            Excluded Assets
1.4(a)            Accounting Methodology
1.4(c)            Inventory Procedures
2.5(a)            Changes in Credit or Promotional Practices
2.7               Security Interests
2.8               Trademark Registration Numbers
2.12(g)           Terminated Employees
2.12(h)           Transferred Employees
2.16              Changes in Customers or Suppliers
2.22              Distributors

<PAGE>

2.23              Zoning Restrictions and Special Taxes, Affecting, and
                  Obligations to Encumber Real Property
5.3               Unavailable Employees
6.3               Required Consents to Assignment of Contracts
6.9               Title to Real Property


Disclosure Schedule
-------------------

2.1               Organization
2.3               No Violation
2.6               Assets of the Business
2.9               Litigation
2.10              Compliance with Law
2.12              Employees
2.13              Benefit Plans
2.14              Insurance
2.15              Contract Consents
2.16              Adverse Change
2.17              Licenses and Permits
2.23              Real Property


Exhibits
--------

A                 Escrow Agreement
B                 Financial Statements
C                 Funding Commitment
D                 Transitional Services Agreement
E                 Opinion of Sellers' Counsel
F                 Opinion of Buyer's Counsel

<PAGE>

                               PURCHASE AGREEMENT

     This PURCHASE AGREEMENT dated as of January 30, 2001 (this "Agreement"), is
among SEBASTIANI  VINEYARDS,  INC., a Delaware corporation ("SVI"), and Tuolomne
River Vintners  Group, a California  partnership,  (the "TRVG" and together with
SVI,  "Sellers")  and  Canandaigua  Wine Company,  Inc., a New York  corporation
("Buyer")  and solely for purposes of Section 9.6,  Richard  Cuneo.  Capitalized
terms used herein are defined in Section 10.11.

     Sellers  desire  to sell to Buyer,  and  Buyer  desires  to  purchase  from
Sellers,  certain  property  and  assets  of  Sellers  relating  to  SVI's  wine
production, sales, marketing and distribution business currently conducted under
the TRV Trademarks  (the  "Business") on the terms and subject to the conditions
hereinafter set forth.

     Accordingly, the parties hereto agree as follows:

                                   ARTICLE 1
                                   ---------

                           PURCHASE AND SALE OF ASSETS

     1.1 PURCHASE OF ASSETS; ASSUMPTION OF LIABILITIES.

          (a)  PURCHASE  AND SALE OF  ASSETS.  On the terms and  subject  to the
     conditions  of this  Agreement,  Sellers  will sell,  transfer,  convey and
     assign to Buyer, and Buyer will purchase from Sellers all right,  title and
     interest of Sellers as of the Closing in the following  (collectively,  the
     "Assets")  with  the  understanding  that  SVI  will  remain  in  the  wine
     production,  sales, marketing and distribution business not associated with
     the TRV Trademarks:

               (i) the real property located in Lodi,  California,  described in
          Schedule 1.1(a)(i) hereto (the "Real Property");

               (ii) all rights, privileges and easements appurtenant to the Real
          Property (collectively, "Appurtenances");

               (iii) all  structures,  buildings,  building  systems  (including
          without limitation roof, HVAC,  electrical,  plumbing,  sprinklers and
          fire  safety  systems),   irrigation   systems,   fixtures  and  other
          improvements,  together with the systems and facilities servicing such
          structures,    located   on   the   Real    Property    (collectively,
          "Improvements");

               (iv) all (A) machinery, tools, appliances,  vehicles,  furniture,
          equipment, cooperage, barrels and other personal property and fixtures
          used in the Business, wherever located, including, but not limited to,
          that  described  in Schedule  1.1(a)(iv)  hereto,  and (B)  machinery,
          tools, appliances,  vehicles, furniture, equipment, cooperage, barrels
          and other personal  property and fixtures,  whether or not used in the
          Business,  if located on the Real Property ((A) and (B)  collectively,
          "Equipment");

<PAGE>

               (v) the contracts set forth in Schedule  1.1(a)(v) hereto and any
          grape purchase contracts entered into by SVI prior to the Closing Date
          in accordance with Section 4.1 (collectively, the "Contracts");

               (vi)  all  intellectual   property  rights  to  the  brand  names
          "Farallon," "Talus," "Heritage," "Vendange," "Nathanson Creek" and "La
          Terre" (the "TRV  Brandnames") and to the names "Turner Road Vintners"
          and "Humphrey & Brown  International  Wine  Marketers," and the domain
          names       "www.humphreybrown.com,"       "www.humphreyandbrown.com,"
          "www.turnerroadvintners.com,"               "www.faralloncellars.com,"
          "www.taluscellars.com,"                  "www.heritage-vineyards.com,"
          "www.heritagevineyards.com,"                "www.heritagecellars.com,"
          "www.heritagewinery.com,"                    "www.nathansoncreek.com,"
          "www.vendange.com,"  and  "www.laterrecellars.com"  and  the  goodwill
          associated with such TRV Brandnames,  names and domain names,  whether
          registered or not (collectively, the "TRV Trademarks");

               (vii) all (A) finished goods of the Business,  including  bottled
          wines  labeled with TRV  Brandnames,  unlabeled  case goods,  and bulk
          wines, and (B) raw materials (whether expensed or not), including work
          in  process,  of  the  Business,  and  retail  sales  merchandise  and
          supplies,  consumable  manufacturing supplies,  spare parts and repair
          materials acquired in the course of Sellers' Business, as the same may
          exist at the close of  business  on the day  before the  Closing  Date
          (including,  without limitation,  those listed in Schedule 1.1(a)(vii)
          hereto,  other than such items sold or  otherwise  disposed  of in the
          ordinary   course  of  business   prior  to  the  Closing  Date)  (the
          "Inventory");

               (viii)  all  accounts  receivable  and notes  receivable  owed to
          Sellers that relate exclusively to the Business ("Receivables");

               (ix) all formulae,  recipes, and blending instructions  currently
          used in the  Business or  necessary to enable the Buyer to operate the
          Business, and all right, title, and interest in and to any patents and
          any  pending  patent  applications,  and in  and  to  any  copyrights,
          trademarks or services  marks, or other  intellectual  property right,
          whether registered or not, in any trade dress,  label designs,  bottle
          designs, and other designs,  advertising campaigns and layouts,  trade
          secrets,  inventions,  models,  manufacturing  know-how, and any other
          similar  intellectual  property rights related to the operation of the
          Business,  together  with  the  goodwill  of the  Business  symbolized
          thereby,  including,  without  limitation,  that  listed  in  Schedule
          1.1(a)(ix);

               (x) copies of all Sellers'  books and records  necessary  for the
          conduct of the Business;

               (xi) any other  intangible  personal  property  now or  hereafter
          owned by Sellers and relating to the  operation of the  Business,  the
          ownership or use of the Real Property or any of the foregoing  Assets,
          and all transferable permits,  licenses and approvals and other rights
          necessary  to  utilize  the  Assets  and  enjoy  the  benefits  of the
          Business; and

               (xii) any assets  reflected in the Closing  Balance Sheet and not
          set forth above.

<PAGE>

          (b)  ASSUMPTION  OF  LIABILITIES.  On the  terms  and  subject  to the
     conditions  of this  Agreement,  Buyer shall assume on the Closing Date and
     shall pay,  perform and discharge  when due the following  obligations  and
     liabilities of Sellers (the "Assumed Liabilities"):

               (i) all  obligations  and liabilities of SVI under the Contracts,
          exclusive  of (A)  payments  of money to be made by the  Sellers on or
          after the Closing Date,  the  obligation  for which arose prior to the
          Closing Date  (except to the extent Buyer has assumed such  obligation
          pursuant to subparagraph  (ii) below),  (B) obligations of the Sellers
          to indemnify  other  parties to the Contracts for acts or omissions of
          the  Sellers  or their  Affiliates  prior  to the  Closing  Date,  (C)
          liabilities under the Contracts arising out of or otherwise in respect
          of any  breach by Seller of the terms of such  Contracts  prior to the
          Closing Date,  and (D)  liabilities  to any third parties under any of
          the Contracts  deemed to be not assigned to Buyer  pursuant to Section
          1.2(a)  arising  prior  to the  date  all  consents  necessary  to the
          assignment of such Contract have been obtained;

               (ii) all accounts payable and accrued expenses and wine and grape
          purchases  payable by Sellers that relate  exclusively to the Business
          and have been taken into  account in  computing  the Closing  Purchase
          Price (or, if adjusted, the Adjusted Closing Purchase Price);

               (iii) all obligations  and liabilities for refunds,  adjustments,
          promotional and other allowances,  exchanges,  returns,  and warranty,
          guarantee  and  merchantability  claims  in  respect  of any  and  all
          products sold or  manufactured  by SVI in connection with the Business
          at any time  before,  on or after the Closing  Date,  but only if such
          liability has, and only to the extent of, a corresponding accrual, and
          has been taken into account in computing  the Closing  Purchase  Price
          (or, if adjusted,  the Adjusted Closing  Purchase Price),  except that
          such assumption of  responsibility  shall not include any liability or
          obligations  of  the  Seller  in  the  nature  of  product  liability,
          negligence  or strict  liability  arising from actions or omissions by
          Sellers or their Affiliates occurring on or prior to the Closing Date;
          and

               (iv) all obligations and liabilities  relating to or arising from
          the  Buyer's  conduct of the  Business  or use of the Assets  from and
          after the Closing Date, including Sellers' promotional commitments and
          obligations,  consistent  with  Sellers'  past  practices,  which  are
          payable,  performable and incurred after the Closing Date and will not
          exceed in aggregate  during the six months  following the Closing Date
          an amount equal to the total dollars per case allowable for the number
          of cases  sold  under  all of the  brands  as set  forth  on  Schedule
          1.1(b)(iv).

Notwithstanding  the  foregoing,  the  Sellers  shall  be  responsible  for  all
liabilities  and  obligations  not  expressly  assumed  by the Buyer  under this
Agreement (collectively the "Retained Liabilities"), including and not by way of
limitation  (a)  liabilities  relating  to  employee  benefits,  severance  pay,
vacation pay, or the Company Plans to employees, (b) tax liabilities,  including
and not by way of limitation,  income, excise, sales, use, gross receipts, gross
revenues, franchise, employment, payroll or property relating to the Business or
the  Purchased  Assets for any period  ending on or prior to the Closing Date or
arising  out of the  transactions  contemplated  by this  Agreement,  except  as
expressly  assumed by Buyer under Section  1.3(c),  (c) violations by Sellers or
their  Affiliates  of those laws  described  in Section  2.10,  (d)  liabilities
arising out of contracts other than those assumed with respect to the Contracts,
(e) claims by Distributors arising out of

<PAGE>

the  operation  of the  Business  prior to  Closing  or out of the  transactions
contemplated by this  Agreement,  (f) liabilities  under  Environmental  Laws or
other  Legal  Requirements  arising  out of the  treatment,  storage,  disposal,
recycling,  reuse or arrangements for disposal  (whether at the Real Property or
other locations) of wastes and Hazardous Substances generated,  used, handled or
transported  by or on behalf of Sellers in connection  with the operation of the
Business  or the use and  occupancy  of the  Real  Property  on or  prior to the
Closing Date, (g) any breach by Sellers of the terms of a Contract or obligation
to  indemnify a party for the acts of the Sellers,  (h) any  products  liability
claims arising out of any product or services sold or manufactured by Sellers in
connection  with the  operation of the Business on or prior to the Closing Date,
whether  based on  contract,  tort  (including  negligence),  warranty or strict
liability,  or (i) except as assumed under Section 1.1(b),  any claims which may
also be imposed on the Buyer by virtue of  "successorship",  "de facto  merger",
"mere continuation" or other, similar principles of law.

          (c)  EXCLUDED  ASSETS.  Notwithstanding  any other  provision  of this
     Agreement,  Sellers will not sell to Buyer, and  Buyer will not acquire any
     interest  in,  the assets  listed or  described  in  Schedule  1.1(c)  (the
     "Excluded Assets").

     1.2 NON-ASSIGNABLE AGREEMENTS AND RIGHTS.

          (a)  NON-ASSIGNABILITY.  To the extent any  lease,  contract  or other
     agreement  or any  license,  permit or  approval  is not  capable  of being
     assigned,  transferred,  subleased  or  sublicensed  without the consent or
     waiver of the issuer thereof or a party thereto (other than the Sellers) or
     any third party  (including a government or governmental  unit), or if such
     assignment,   transfer,  sublease  or  sublicense  or  attempt  to  assign,
     transfer,  sublease or sublicense  would  constitute a breach  thereof or a
     violation  of any law,  decree,  order,  regulation  or other  governmental
     edict,  this  Agreement  shall  not  constitute  an  assignment,  transfer,
     sublease or  sublicense  thereof,  or an  attempted  assignment,  transfer,
     sublease or sublicense thereof.

          (b) BUYER AND  SELLERS TO USE  REASONABLE  EFFORTS.  The Buyer and the
     Sellers agree to use reasonable  efforts to obtain the consents and waivers
     referred to in Subsection  (a) above,  and to obtain any other consents and
     waivers  necessary  to assign,  convey,  settle,  deliver and  transfer the
     Assets.

          (c) IF WAIVERS  OR  CONSENTS  CANNOT BE  OBTAINED.  If any  consent or
     waiver  referred to in Subsection  (a) above is not  obtained,  then to the
     extent  that such  consent or waiver is not a  condition  precedent  to the
     Closing the Sellers  shall (i) provide  Buyer the  benefits of the relevant
     permit,  license,  approval,  lease,  contract  or  other  agreement,  (ii)
     cooperate in any  arrangement,  reasonable  and lawful as to both the Buyer
     and the  Sellers,  designed  to afford to the  Buyer  the  benefits  of the
     Business and the Assets,  and (iii)  continue  with the Buyer to attempt to
     obtain such consent or waiver.

     1.3 CLOSING; CLOSING PURCHASE PRICE ALLOCATION.

          (a) THE  CLOSING.  The closing of the  purchase and sale of the Assets
     and the assumption of the Assumed Liabilities (the "Closing") shall be held
     at the offices of Morrison & Foerster  LLP, 425 Market St., San  Francisco,
     California,  at 10:00 a.m. on a date to be mutually agreed upon between the
     parties, which shall be the later of March 15, 2001, or the second

<PAGE>

     business day after  satisfaction  of the  condition to closing set forth in
     Section 7.3(a),  or, if the other  conditions to the Closing shall not have
     been satisfied or waived by such date, as soon thereafter as is practicable
     once such conditions are satisfied or waived (the date on which the Closing
     shall  occur  being  referred  to herein as the  "Closing  Date").  Without
     limiting the foregoing, the parties acknowledge that their mutual desire is
     to close on March 1, 2001, or as soon thereafter as is reasonably  possible
     and will endeavor to do so.

               (i) At the Closing, Buyer shall deliver to the Sellers:

                    (A) by wire transfer to a single bank account (designated in
               writing by the  Sellers at least two  business  days prior to the
               Closing Date),  immediately available funds in an amount equal to
               the "Total Shareholders Equity" as shown on the Pro Forma Closing
               Balance Sheet less the  Inventory  Adjustment  plus  $170,000,000
               (the "Closing Purchase Price"),  less $15,000,000 to be held by a
               third party as an escrow or retainage (the "Escrow");

                    (B)   instruments   of  assumption  in  form  and  substance
               reasonably  satisfactory to Sellers and their counsel  evidencing
               and effecting the assumption by Buyer of the Assumed  Liabilities
               and such other  documents  as are  specifically  required by this
               Agreement.

               (ii) At the  Closing,  Buyer shall  deliver the Escrow to a third
          party  escrow agent (the "Escrow  Agent"),  mutually  agreeable to the
          parties,  pursuant to an Escrow  Agreement  attached as EXHIBIT A (the
          "Escrow Agreement").  The Escrow will be placed in an interest bearing
          account.  The  interest  will  be  paid to the  parties  based  on the
          distribution of the Escrow.  Any amount  remaining in the Escrow after
          the first anniversary of the Closing Date will be paid to the Sellers.
          Buyer  will be  permitted  to  offset  amounts  due to Buyer  from the
          Sellers against the amounts in escrow.

               (iii)  At the  Closing,  Sellers  shall  deliver  or  cause to be
          delivered to Buyer executed instruments of sale, assignment,  transfer
          and conveyance in form and substance reasonably  satisfactory to Buyer
          and its counsel  evidencing  and  effecting  the sale and  transfer to
          Buyer of the Assets (it being understood that such  instruments  shall
          not require Sellers to make any additional representations, warranties
          or covenants,  expressed or implied, not contained in this Agreement).
          Sellers agree to convey, and Buyer agrees to accept, title to the Real
          Property,  Appurtenances  and  Improvements  by grant  deed and Seller
          shall  remove  prior to Closing  any  mortgage  or deed of trust liens
          regarding  the Real  Property  and/or  Leased  Property.

          (b) CLOSING  PURCHASE  PRICE  ALLOCATION.  The Closing  Purchase Price
     shall be allocated (the "Allocation") in the following manner:

               (i) $170 million shall be allocated to the Assets of TRVG; and

               (ii) the balance of the Closing  Purchase Price (or, if adjusted,
          the Adjusted  Closing Purchase Price) shall be allocated to the Assets
          of SVI; provided, however, in the event the appraisal of the Assets of
          SVI is higher  than the  Closing  Purchase  Price less the sum of $170
          million,  then the above  allocation of Closing Purchase Price to TRVG
          shall be reduced by the amount  such  appraisal  exceeds  the  Closing
          Purchase Price less the sum of

<PAGE>

          $170 million. The Assets of SVI will be appraised by an appraisal firm
          selected by Buyer which is  reasonably  satisfactory  to Sellers,  and
          such appraisal shall be completed and approved by Buyer and Sellers as
          soon after the Closing Date as is reasonably practicable.  The parties
          agree that the Allocation will be used by the parties in reporting the
          transaction  contemplated  by this  Agreement  for  federal  and state
          income  tax  purposes.  Neither  the  appraisal  provided  for in this
          subsection,  nor  the  Allocation  shall  affect  the  amount  of  the
          aggregate  Closing  Purchase  Price  or the  amount  of the  aggregate
          Adjusted Closing Purchase Price.

          (c) PAYMENT OF TRANSFER TAXES. Buyer shall pay all sales,  transfer or
     use taxes and  assessments  arising from the sale or transfer of the Assets
     hereunder. Buyer shall pay any premium for title insurance and endorsements
     on the Real Property issued to Buyer at Closing. Property taxes on the Real
     Property,  Appurtenances  and Improvements  shall be prorated between Buyer
     and SVI on a pro rata  basis as of the  Closing  Date.  If  Closing  occurs
     before the actual taxes and assessments payable during such year are known,
     the proration of taxes shall be upon the basis of taxes and assessments for
     the Real Property and Improvements payable during the immediately preceding
     year; provided,  however,  that if the taxes and assessments payable during
     the year in which Closing  occurs are  thereafter  determined to be more or
     less than the taxes and  assessments  payable  during the  preceding  year,
     Sellers and Buyer  promptly  shall adjust the proration made at Closing and
     Sellers  or Buyer,  as the case may be,  shall pay to the other any  amount
     required as a result of such adjustment. This covenant shall not merge with
     the deed delivered hereunder but shall survive the Closing.

     1.4 CLOSING PURCHASE PRICE ADJUSTMENT.

          (a)  PREPARATION OF CLOSING  BALANCE  SHEET.  Within 45 days after the
     Closing  Date,  SVI shall cause to have prepared and delivered to Buyer (i)
     an audited  closing  balance sheet for the Business  (the "Closing  Balance
     Sheet") as of the close of business on the Closing Date and related audited
     income  statement  for the period  then  ended and (ii) an audited  balance
     sheet for SVI as of the close of business  on the Closing  Date and related
     audited  income  statement for the period then ended  (determined  on a pro
     forma  basis as though the  parties had not  consummated  the  transactions
     contemplated by this Agreement).  Buyer shall assist SVI in the preparation
     of the Closing Balance Sheet and shall provide SVI and its  representatives
     access at all  reasonable  times to the  personnel,  properties,  books and
     records of the Business for such  purpose.  Such Closing  Balance Sheet and
     related income  statement shall be prepared  consistent with the Accounting
     Methodology   and   using   generally   accepted   accounting   principles,
     consistently applied, except as set forth in the Accounting Methodology and
     shall take account of the results of the physical  inventory and inspection
     of the Assets and Business set forth below.  During the 45 days immediately
     following  Buyer's  receipt of the  Closing  Balance  Sheet,  Buyer will be
     permitted to review SVI's working  papers  relating to the Closing  Balance
     Sheet.  The Closing  Balance  Sheet shall become final and binding upon the
     parties on the 45th day  following  receipt  thereof by Buyer  unless Buyer
     gives written notice of its disagreement  ("Notice of Disagreement") to SVI
     prior to such date. Any Notice of Disagreement  shall specify in reasonable
     detail the nature of any  disagreement  so asserted.  If a timely Notice of
     Disagreement is received by SVI, then the Closing Balance Sheet (as revised
     in accordance  with clause (x) or (y) below) shall become final and binding
     upon the parties on the earlier of (x) the date the parties  hereto resolve
     in writing any differences  they have with respect to any matter  specified
     in the Notice of Disagreement or (y) the date the Accounting Firm completes
     a Final Closing

<PAGE>

     Balance  Sheet.  During the ten business  days  immediately  following  the
     delivery  of a Notice of  Disagreement,  SVI and Buyer  shall  seek in good
     faith to  resolve  in  writing  any  differences  which  they may have with
     respect to any matter specified in the Notice of Disagreement.  During such
     period,  SVI shall have access to the working  papers of Buyer  prepared in
     connection with Buyer's  preparation of the Notice of Disagreement.  At the
     end of such ten business day period, SVI and Buyer shall immediately submit
     to an independent  accounting firm (the  "Accounting  Firm") for review and
     resolution  any and all  matters  which  remain in  dispute  and which were
     included in the Notice of  Disagreement.  Within ten (10)  business days of
     such  submission  to the  Accounting  Firm,  each of the  parties and their
     accountants shall be afforded the opportunity to present their positions as
     to such Closing  Balance Sheet to the  Accounting  Firm.  Within 45 days of
     such  submission to the Accounting  Firm, the Accounting Firm shall resolve
     all matters remaining in dispute and, based on such resolution,  adjust the
     Closing Balance Sheet accordingly (as adjusted,  the "Final Closing Balance
     Sheet").  The Final Closing  Balance Sheet shall be binding on the parties.
     In resolving all matters in dispute,  the  Accounting  Firm shall apply the
     standards set forth above for  preparation of the Closing  Balance Sheet to
     determine whether the Closing Balance Sheet was prepared in accordance with
     such standards.  Such determination  shall be made without reference to the
     Pro Forma Closing  Balance  Sheet.  The Final  Closing  Balance Sheet shall
     become  final and binding on Buyer and  Sellers on the date the  Accounting
     Firm delivers its final  resolution  to the parties.  The  Accounting  Firm
     shall be  mutually  agreeable  to the  Buyer  and  Sellers  and  shall be a
     nationally  recognized   independent  accounting  firm.  The  fees  of  the
     Accounting  Firm  pursuant to this  Section 1.4 shall be borne 50% by Buyer
     and 50% by SVI.

          (b)  ADJUSTMENT.  The Closing  Purchase  Price shall be  increased  or
     decreased,   dollar  for  dollar,   for  any  differences   between  "Total
     Shareholders Equity" as set forth on the Pro-Forma Balance Sheet and as set
     forth on the  Closing  Balance  Sheet or, if  disputed,  the Final  Closing
     Balance  Sheet (the  Closing  Purchase  Price as so  increased or decreased
     shall hereinafter be referred to as the "Adjusted Closing Purchase Price").
     If the Closing  Purchase Price is less than the Adjusted  Closing  Purchase
     Price,  Buyer  shall,  and if the Closing  Purchase  Price is more than the
     Adjusted  Closing  Purchase Price,  Sellers shall,  within 10 business days
     after the Closing Balance Sheet or Final Closing Balance Sheet, as the case
     may be,  becomes  final and binding on the  parties,  make  payment by wire
     transfer in immediately  available funds of the amount of such  difference,
     together with interest thereon at a rate equal to the rate of interest from
     time to time  announced  publicly  by  Citibank,  N.A.  as its  base  rate,
     calculated on the basis of the actual number of days elapsed over 365, from
     the Closing Date to the date of payment.

          (c)  PRE-CLOSING  INVENTORY.  From the date  hereof  until the Closing
     Date,  Sellers,  Buyer and their  representatives  (including  accountants,
     engineers and consultants)  shall cooperate to perform a physical inventory
     and  inspection  of the Assets and  Business  for  purposes of creating the
     Closing  Balance  Sheet (the  "Pre-Closing  Inventory").  The parties shall
     complete the Pre-Closing  Inventory prior to Closing on the nearest date to
     Closing as is reasonably  practicable.  The Pre-Closing  Inventory shall be
     conducted  at such  times  as are  reasonably  necessary  to  complete  the
     Pre-Closing  Inventory on that date. As part of the Pre-Closing  Inventory,
     Buyer shall be permitted to inspect the condition of, and sample the Assets
     in light of Sellers'  representations  and warranties  hereunder;  provided
     that, such inspection  shall be conducted in a reasonable  fashion so as to
     not  interfere  unreasonably  with the  operations  of Sellers and so as to
     prevent any material adverse effect on any Assets. For purposes of creating

<PAGE>

     the Closing  Balance  Sheet,  Sellers and Buyer shall follow the procedures
     set forth in Schedule  1.4(c)  hereto and shall be bound by the  provisions
     thereof  for  determining  the  quantity  of  Inventory  and  whether  such
     Inventories are merchantable.

     1.5  INVENTORY  ADJUSTMENT.  For the  purposes of  calculating  the Closing
Purchase Price and the Adjusted  Closing Purchase Price, the "Net Inventory" set
forth on the Pro Forma Closing Balance Sheet, the Closing Balance Sheet, and the
Final Closing  Balance  Sheet shall be reduced by  $31,200,000  (the  "Inventory
Adjustment").

                                   ARTICLE 2
                                   ---------

                    REPRESENTATIONS AND WARRANTIES OF SELLERS

     Except as and to the extent set forth in the DISCLOSURE  SCHEDULE delivered
by  Sellers  to Buyer  concurrently  with the  execution  and  delivery  of this
Agreement  (the  "Disclosure  Schedule"),  SVI and TRVG,  severally and jointly,
hereby  represent  and  warrant to Buyer on the date hereof and on and as of the
Closing Date as follows:

     2.1 CORPORATE ORGANIZATION; QUALIFICATION.

          (a) SVI  ORGANIZATION.  SVI is a corporation  duly organized,  validly
     existing and in good standing under the laws of the State of Delaware;  SVI
     has full power and  authority  to carry on the  Business as it is now being
     conducted and to own, lease and operate its properties and assets;  and SVI
     has made  available to Buyer complete and correct copies of its Articles of
     Incorporation and Bylaws, as currently in effect.  The DISCLOSURE  SCHEDULE
     lists  all  jurisdictions  in which  SVI is  qualified  or  licensed  to do
     business,  and  such  jurisdictions  are all  jurisdictions  necessary  for
     conduct of the Business.

          (b) TRVG ORGANIZATION.  TRVG is a general  partnership duly organized,
     validly  existing  and in good  standing  under  the  laws of the  State of
     California;  TRVG has full power and  authority to carry on its business as
     it is now being  conducted and to own, lease and operate its properties and
     assets; and TRVG has made available to Buyer complete and correct copies of
     TRVG's  Partnership  Agreement,  as  currently  in effect.  The  DISCLOSURE
     SCHEDULE lists all  jurisdictions in which TRVG is qualified or licensed to
     do business,  and such  jurisdictions are all  jurisdictions  necessary for
     conduct of the Business.

     2.2 AUTHORIZATIONS; ETC.

          (a) SVI AUTHORITY. SVI has full corporate power and authority to enter
     into this Agreement and to carry out the transactions  contemplated hereby.
     The Board of  Directors  and  stockholders  of SVI have  taken  all  action
     required to authorize  the  execution  and delivery of this  Agreement  and
     consummation of the transactions  contemplated  hereby.  This Agreement has
     been duly and validly executed and delivered by SVI, and no other corporate
     or other action is necessary to effect such  execution  and  delivery;  and
     this Agreement is the valid and binding  obligation of SVI,  enforceable in
     accordance with its terms, except that (i) enforceability may be limited by
     bankruptcy,   reorganization,   insolvency  or  other  laws  affecting  the
     enforcement of creditors' rights generally, and (ii) courts may award money
     damages  rather  than  specific

<PAGE>

     enforcement of contractual  provisions  involving  matters other than or in
     addition to the payment of money.

          (b) TRVG  AUTHORITY.  TRVG has full power and  authority to enter into
     this Agreement and to carry out the transactions  contemplated  hereby. The
     partners of TRVG have taken all action  required to authorize the execution
     and delivery of this  Agreement and the  consummation  of the  transactions
     contemplated  hereby. This Agreement has been duly and validly executed and
     delivered by TRVG,  this  Agreement is the valid and binding  obligation of
     TRVG,  enforceable in accordance with its terms, except that enforceability
     may be  limited by  bankruptcy,  reorganization,  insolvency  or other laws
     affecting the enforcement of creditors'  rights  generally,  and courts may
     award  money  damages  rather  than  specific  enforcement  of  contractual
     provisions  involving  matters  other than or in addition to the payment of
     money.

     2.3 NO VIOLATION.  Neither the execution and delivery of this Agreement nor
the  consummation  of the  transactions  contemplated  hereby  will  violate any
provision of the Articles of  Incorporation  or Bylaws of SVI or the Partnership
Agreement  of TRVG.  Neither the  execution  and  delivery of this  Agreement by
Sellers nor the consummation of the transactions contemplated hereby will:

          (a) require Sellers to obtain any consent, approval,  authorization or
     permit of, or make any  filing  with or provide  any  notification  to, any
     governmental or regulatory authority, except (A) in connection with the HSR
     Act, (B) pursuant to state  securities laws, or (C) pursuant to laws, rules
     and regulations  regulating the production and sale of alcoholic beverages,
     if any are applicable;

          (b) with  respect to  Contracts  between  SVI and SVI's  distributors,
     except as set forth in the DISCLOSURE SCHEDULE,  require any payment or the
     incurring  of any  obligation  on the  part of SVI or  result  in a loss of
     rights or  default,  with or  without  notice  or lapse of time,  under the
     terms, conditions or provisions of any such contracts or agreements, except
     for such  defaults  as to which  requisite  waivers or  consents  have been
     obtained;

          (c) violate any order,  writ,  injunction,  decree,  statute,  rule or
     regulation applicable to the Sellers or the Assets; or

          (d) result in the creation or imposition  of any Security  Interest on
     any of the Assets.

     2.4 FINANCIAL STATEMENTS. Attached hereto as EXHIBIT B are true and correct
copies of (i) the unaudited balance sheet of the Business, properly adjusted for
the Excluded  Assets,  as of December 31, 2000 (the  "Balance  Sheet"),  related
unaudited  income  statement for the six month period then ended,  and footnotes
and details thereto,  and (ii) the unaudited balance sheet of the Business as of
June 30,  2000,  related  unaudited  income  statement  for the fiscal year then
ended,  and footnotes and details  thereto.  Buyer shall have access to the work
papers of Sellers'  accountants used in the preparation of the Balance Sheet and
all financial  statements of the Sellers which relate in whole or in part to the
Business.  The Balance Sheet and related  unaudited  income  statement,  and the
unaudited  balance  sheet of the  Business  as of June  30,  2000,  and  related
unaudited income statement (A) have been prepared consistent with the Accounting

<PAGE>

Methodology and using generally  accepted  accounting  principles,  consistently
applied, except as set forth in the Accounting  Methodology,  (B) fairly present
the financial  condition,  and results of operations of the Business as of dates
and for the periods  referred to therein,  and (C) are consistent with the books
and records of the Business.

     2.5 ABSENCE OF CERTAIN CHANGES.

          (a) OPERATIONS. Since the date of the Balance Sheet there has not been
     (i)  any  adverse  change  in (A)  the  business,  financial  condition  or
     operations  of the Business,  (B) the Assets or (C) Sellers'  relationships
     with suppliers, customers,  distributors, lessors or others relating to the
     Business except, in each case,  changes in the ordinary course of business;
     (ii) any damage,  destruction or loss, whether or not covered by insurance,
     adversely  affecting the Business or the Assets;  (iii) the creation of any
     Security Interest with respect to any Assets, except in the ordinary course
     of business; (iv) except as set forth on Schedule 2.5(a), any change in the
     credit  practices,  promotional  practices or pricing  practices of Sellers
     with  respect to the  Business or in  Sellers'  method of  maintaining  the
     Business's books,  accounts or business records; (v) any acquisition of any
     assets, or lease of any assets from any other Person,  relating exclusively
     to the Business except in the ordinary  course of business  consistent with
     past  practice;  (vi) any sale or other  transfer  of any  assets  relating
     exclusively  to the  Business to any other  Person,  except in the ordinary
     course of business  consistent  with past  practice;  (vii) any action that
     would result in a violation or breach of, or a default under,  any Contract
     or any contract by which any of the Assets is bound; (viii) any transaction
     involving the Business outside the ordinary course of business; or (ix) the
     execution or creation of, or any amendment or termination  of, any Contract
     or any contract by which any of the Assets is bound, except in the ordinary
     course of business.

          (b) COMPENSATION.  Since the date of the Balance Sheet,  there has not
     been any  increase in the  compensation  or  benefits  payable or to become
     payable by Sellers to any Employees working solely for the Business, except
     for  increases in the normal  course of business  and except for  increases
     involving  payments  or  obligations  on the  part of  Sellers  that in the
     aggregate are less than One Hundred Thousand Dollars ($100,000) per annum.

     2.6 ASSETS OF BUSINESS.  The Assets  constitute  all of the assets held for
use or used primarily in connection  with the Business and are adequate to carry
on the Business as currently  conducted.  All of the tangible  personal property
included in the Assets that is  necessary  for or used in the  operation  of the
Business is in good operating condition and repair, except for ordinary wear and
tear.  The  Accounts  Receivable  represent  bona fide sales at arm's  length to
customers  of the  Business,  are not  subject to any  set-offs,  counterclaims,
deductions, rights to return, or agreements for deduction, free goods, discounts
or other deferred price or quantity  adjustments  which do not have a sufficient
corresponding  accrual.  The Accounts  Receivable are  collectible in accordance
with their terms except to the extent of a sufficient reserve.

     2.7  TITLE  TO  ASSETS.  Except  for  Real  Property  and  Leased  Property
referenced in Section 2.23, Sellers have good and valid title to all the Assets,
free and clear of all Security Interests of any nature whatsoever, except

          (a) such as are disclosed on Schedule 2.7,

<PAGE>

          (b) liens for (i) taxes and other  governmental  charges which are not
     due and payable or which may  thereafter be paid without  penalty,  or (ii)
     mechanics',  carriers', workmen's,  repairmen's or other like liens arising
     or  incurred  in the  ordinary  course  of  business  that do  not,  in the
     aggregate, represent encumbrances on the Assets in excess of $30,000 (liens
     set  forth in  subsection  (ii)  collectively  referred  to  herein  as the
     "Permitted Liens").

     2.8 TRADEMARKS AND  INTELLECTUAL  PROPERTY.  Sellers own the TRV Trademarks
and the  intellectual  property  set  forth  on  Schedule  1.1(a)(ix)  (the  TRV
Trademarks and scheduled  intellectual  property collectively referred to herein
as the "Intellectual  Property"),  whether  registered or not, free and clear of
all liens, charges, claims, options, pledges,  licenses,  security interests, or
similar restrictions except for licenses included in the Contracts,  if any, and
licenses  previously granted to Buyer.  There are no trademarks,  service marks,
trade  names,  copyrights,  patents,  or other  intellectual  property  owned or
licensed by the Sellers and used in the conduct of the Business,  other than the
Intellectual   Property.   Neither  the  use,  nor  the  registration,   of  the
Intellectual  Property  conflicts  with the rights of any other  Person,  and no
other  Person's  operations  conflict  with  the  use  or  registration  of  the
Intellectual  Property.  There are no claims, suits or proceedings pending or to
the  knowledge  of the  Sellers  threatened  against or by SVI or TRVG  claiming
either an  infringement  or conflict by SVI or TRVG of or with any rights of any
Person  or an  infringement  or  conflict  by any  Person  of or with any of the
Intellectual Property. To the knowledge of the Sellers, no intellectual property
right  of any  third  party  will be  infringed  by the use by the  Buyer of the
Intellectual  Property,  provided such use is not materially  different from the
manner in which such Intellectual  Property has been used by Sellers.  Except as
set forth on the DISCLOSURE SCHEDULE, the TRV Trademarks are registered,  solely
in the name of TRVG, (A) on the Principal or Supplemental Register of the United
States  Patent  and  Trademark  Office,  and (B)  with the  appropriate  foreign
authorities  necessary  for  protection  of the TRV  Trademarks  in all  foreign
markets where the TRV Trademarks are used, and each  registration  is valid,  in
full force and effect,  and enforceable.  The United States Patent and Trademark
Office registration numbers, foreign registration numbers, and corresponding TRV
Trademarks  are set  forth  on  Schedule  2.8  hereto.  All of the  Intellectual
Property is in use in the  jurisdictions in which it is registered,  and no such
use has been discontinued for a period in excess of three (3) consecutive years.
All  copyrightable  materials  are works  for hire,  authored  by  employees  of
Sellers,  or  authored  by third  parties  pursuant  to  written  works for hire
agreements  giving  Sellers  absolute  right,  title and interest in and to such
materials.

     2.9 LITIGATION.  Except as set forth in the DISCLOSURE SCHEDULE,  (i) there
is no legal, administrative,  arbitration or other proceeding, claim, dispute or
action of any nature or inquiry or investigation  pending or threatened  against
Sellers relating to the Business or against TRVG or any of the Assets,  and (ii)
none of the Assets or  Sellers in  relation  to the  Business  is subject to any
judgment, order or decree entered in any lawsuit or proceeding.

     2.10 COMPLIANCE WITH LAW.

          (a) GENERAL.  Except as to the matters set forth in Sections  2.10(b),
     2.11,  2.12 and 2.13 (which are  addressed by the specific  representations
     regarding the subject matters  thereof) SVI is in compliance with all Legal
     Requirements  applicable  to the  Business.  Sellers  have not received any
     notification  from any  governmental  entity that SVI,  with respect to the
     Business or the Assets,  is in  violation  of any such Legal  Requirements.
     TRVG  is in  compliance  with  all

<PAGE>

     Legal  Requirements  applicable to the Business.  Sellers have not received
     any notification that TRVG is in violation of any such Legal Requirements.

          (b)  ENVIRONMENTAL.  Sellers are in compliance with all  Environmental
     Laws, and there are, and have been, no past or present events,  conditions,
     circumstances,  activities,  practices,  incidents,  or actions which could
     reasonably be expected to interfere  with or prevent  continued  compliance
     with  any  Environmental  Laws.  Except  as set  forth  on  the  DISCLOSURE
     SCHEDULE,  Sellers have not  received  from any  governmental  authority or
     other  Person  any  notification  that  Sellers  are  in  violation  of any
     Environmental  Law.  SVI  has all  licenses,  permits,  registrations,  and
     authorizations  which are required for operation of the Business  under any
     Environmental Law and/or which are required from any governmental authority
     having  jurisdiction over any Hazardous Substance located in or on the Real
     Property.  No Hazardous  Substances  have been disposed of or buried at the
     Real Property,  nor have any been released  except in full  compliance with
     Environmental  Laws.  There are no  Hazardous  Substances  present  at, in,
     under, or upon the Real Property or the Improvements  thereon and there are
     no  underground  storage  tanks  of any  kind  located  on any of the  Real
     Property,  and, except as set forth on the DISCLOSURE SCHEDULE,  there have
     not  previously  been any such  tanks.  Neither  Seller is  subject  to any
     private,  administrative,  or  judicial  action  relating to the present or
     alleged  presence  of  Hazardous  Substances  in,  under,  or upon the Real
     Property  or  the  Improvements  thereon,  and  there  are  no  pending  or
     threatened  actions or proceedings from any  governmental  authority or any
     other Person regarding any matter described in this paragraph (b).

     2.11 TAX MATTERS.

          (a) Each of the Sellers has filed all tax returns that it was required
     to file.  All such tax returns were  correct and complete in all  respects.
     All taxes owed by the  Sellers  (whether  or not shown on the tax  returns)
     have been paid.  None of the Sellers  currently is the  beneficiary  of any
     extension  of time within  which to file any tax return.  No claim has ever
     been made by an authority in a  jurisdiction  where any of the Sellers does
     not file tax  returns  that it is or may be  subject  to  taxation  by that
     jurisdiction.  There are no  Security  Interests  on any of the Assets that
     arose in connection with any failure (or alleged failure) to pay any tax.

          (b) The Sellers have withheld and paid all taxes required to have been
     withheld and paid in connection with amounts paid or owing to any employee,
     independent contractor, creditor, stockholder, or other third party.

          (c)  No  stockholder,   partner,  director  or  officer  (or  employee
     responsible for tax matters) of any of the Sellers expects any authority to
     assess any additional  taxes for any period for which tax returns have been
     filed.  There is no dispute or claim concerning any tax liability of any of
     the Sellers either (A) claimed or raised by any authority in writing or (B)
     as to which any of the  stockholders,  partners,  directors or officers (or
     employees  responsible  for tax matters) has knowledge  based upon personal
     contact with any agent of such authority.

     2.12 EMPLOYEES.

          (a)  IDENTIFICATION.  The DISCLOSURE  SCHEDULE  accurately sets forth,
     with respect to each employee of either Seller  (including  any employee of
     either  Seller  who is on a leave of

<PAGE>

     absence or on layoff  status) whose  employment is exclusively or primarily
     for  the  Business   (referred  to  individually  as  an  "Employee",   and
     collectively as the "Employees"):

               (i) the name of such Employee;

               (ii) such Employee's title;

               (iii) such Employee's  annualized  compensation as of the date of
          this Agreement; and

               (iv) each Company Plan in which such Employee  participates or is
          eligible to participate (including,  without limitation,  whether such
          Employee is  currently  inactive by reasons of short term  disability,
          long term disability, or workers compensation).

          (b)  CONTRACTORS.   The  DISCLOSURE   SCHEDULE   contains  a  list  of
     individuals who are currently  performing  services for Sellers exclusively
     or  primarily  in  connection  with  the  Business  and are  classified  as
     "consultants" or "independent contractors," and the respective compensation
     of each such "consultant" or "independent contractor."

          (c)  TERMINABLE.  The  employment of each of Employee is terminable by
     either  Seller,  as  applicable,  at will.  Neither Seller is a party to or
     bound  by,  and has  never  been a party to or  bound  by,  any  employment
     agreement  (except as set forth in the DISCLOSURE  SCHEDULE),  or any union
     contract, collective bargaining agreement or similar contract in connection
     with the Business.

          (d)  MANUALS.  Sellers  have  made  available  to Buyer  accurate  and
     complete  copies  of  all  employee   manuals  and  handbooks,   disclosure
     materials,  policy statements,  and employment  agreements  relating to the
     employment of the Employees.

          (e)  LEGAL   REQUIREMENTS.   Sellers  have  complied  with  all  Legal
     Requirements  related to the  employment  of  Employees.  Sellers  have not
     received  any notice in writing  of any claim  that  either  Seller has not
     complied in any material  respect with any Legal  Requirements  relating to
     the employment of Employees,  including any provisions  thereof relating to
     wages,  hours,  collective  bargaining,  the payment of Social Security and
     similar taxes, equal employment opportunity, employment discrimination, the
     WARN Act, employee safety, or that it is liable for any arrearages of wages
     or any taxes or penalties for failure to comply with any of the foregoing.

          (f) LABOR  PRACTICES.  Neither  Seller is engaged,  and has never been
     engaged,  in any unfair labor practice of any nature in connection with the
     Business.  There has never been any slowdown, work stoppage,  labor dispute
     or union organizing activity, or any similar activity or dispute, affecting
     the Business or any of the Employees.  There is not now pending, and to the
     Knowledge  of  Sellers  no person  has  threatened  to  commence,  any such
     slowdown,  work stoppage or labor dispute in connection  with the Business.
     Neither  Seller  is a party  to any  collective-bargaining  agreement  with
     respect to  Employees  and has not received  notice of any  proposed  union
     certification or recognition election with respect to the Business.

<PAGE>

          (g) TERMINATION OF EMPLOYEES.  Schedule  2.12(g) sets forth a true and
     accurate list of those employees of the Business  terminated by the Sellers
     within the last 90 days, and whether such termination was for cause or not.

          (h)  TRANSFERS OF  EMPLOYEES.  Schedule  2.12(h) sets forth a true and
     accurate list of those  employees of the Sellers and their  Affiliates  who
     have been transferred  between the Sellers and their Affiliates  within the
     twenty-four month period immediately preceding the date hereof.

     2.13 BENEFIT PLANS; ERISA.

          (a) PLANS. The DISCLOSURE SCHEDULE sets forth a true and complete list
     of each written or oral employee benefit plan,  including any retirement or
     deferred  compensation  plan,  incentive  compensation  plan,  stock  plan,
     including stock option plans, unemployment compensation plan, vacation pay,
     severance pay, bonus or benefit  arrangement,  insurance or hospitalization
     program or any other fringe benefit  arrangements for any current or former
     employee,  director,  consultant  or agent,  whether  pursuant to contract,
     arrangement,  custom or informal  understanding,  regardless  of whether an
     "employee  benefit  plan," as defined in Section  3(3) of ERISA,  policy or
     agreement  (including,  any employment or consulting agreement or severance
     agreement) that is maintained,  or is or was contributed to by Sellers (all
     and any Member of the  Controlled  Group of the  foregoing)  (the  "Company
     Plans").  A true and correct  copy of each  Company  Plan as  currently  in
     effect and, if  applicable,  the most recent  annual  report,  summary plan
     description,  trust  agreement and any  determination  letter issued by the
     Internal  Revenue  Service for each Company Plan have been  delivered to or
     will be made available for review by Buyer.  Neither Sellers nor any Member
     of the  Controlled  Group has ever  maintained or  contributed  to any plan
     subject to Title IV of ERISA or Section 412 of the Internal Revenue Code of
     1986,  as amended  (the "Code")  (including  any  "Multiemployer  Plan," as
     defined in Section  3(37)(A)  of ERISA) and no fact or event  exists  which
     could give rise to any liability  under Title IV of ERISA or Section 412 of
     the Code. Neither Sellers nor any Member of the Controlled Group is, nor do
     any of them expect to be,  subject to (1) a security  interest  pursuant to
     Section  412(f) of the Code or (2) a lien pursuant to Section 412(n) of the
     Code or Sections 4068 or 302(f) of ERISA with respect to any Company Plan.

          (b)  ADMINISTRATION.  Each Company  Plan that is an "employee  benefit
     plan," as defined in Section  3(3) of ERISA,  complies by its terms and has
     been   administered  in  compliance  in  all  material  respects  with  the
     requirements provided by any and all statutes, orders or governmental rules
     or  regulations  currently in effect and  applicable  to the Company  Plan,
     including, but not limited to, ERISA and the Code.

          (c) NO PROHIBITED  TRANSACTIONS;  CLAIMS. With respect to each Company
     Plan:

               (i) no prohibited  transactions (as defined in Section 406 or 407
          of ERISA or  Section  4975 of the  Code)  have  occurred  for  which a
          statutory exemption is not available; and

               (ii) no action or claims (other than routine  claims for benefits
          made in the ordinary course of Company Plan  administration  for which
          Company Plan administrative review procedures have not been exhausted)
          are pending or, to Sellers' Knowledge,  threatened or

<PAGE>

          imminent against or with respect to any Company Plan, any employer who
          is participating  (or who has participated) in any Company Plan or any
          fiduciary (as defined in Section 3(21) of ERISA), of the Company Plan.

          (d) COBRA. All of the Company Plans, to the extent applicable,  are in
     compliance in all material  respects with the  continuation of group health
     coverage provisions contained in Section 4980B of the Code and Sections 601
     through 608 of ERISA ("COBRA").

          (e) NON-COBRA.  Neither Seller nor any Member of the Controlled  Group
     maintains or  contributes to any plan that provides  health  benefits to an
     employee  after the  employee's  termination  of  employment  or retirement
     except as required under COBRA.

          (f) REPORTS.  All reports,  forms and other  documents  required to be
     filed  with  any  government  entity  or  furnished  to  employees,  former
     employees or  beneficiaries  with  respect to any Company  Plan  (including
     summary plan descriptions, Forms 5500 and summary annual reports) have been
     timely filed and furnished and are accurate.

          (g) CERTAIN QUALIFICATIONS. Each of the Company Plans that is intended
     to qualify  under  Section  401(a) of the Code has been  determined  by the
     Internal  Revenue  Service to so qualify  (pursuant to a current  favorable
     determination  letter)  after January 1, 1989, or has remaining a period of
     time under applicable  Treasury  regulations or IRS pronouncements in which
     to apply for such a letter and make any  amendments  necessary  to obtain a
     favorable  determination  as to the  qualified  status of each such Company
     Employee  Plan,  and  each  trust  maintained  pursuant  thereto  has  been
     determined by the Internal Revenue Service to be exempt from taxation under
     Section 501 of the Code. To Sellers'  Knowledge,  nothing has occurred that
     could reasonably be expected to adversely  affect the  qualification of any
     Company Plan and its related trust.

          (h) CONTRIBUTIONS. All required contributions to the Company Plans for
     all periods  ending prior to the Closing Date  (including  periods from the
     first day of the current  plan year to the Closing  Date) have been made or
     will have been made prior to the Closing Date by Sellers.

          (i) PREMIUMS.  All insurance premiums required for insurance coverages
     under the  Company  Plans  have been paid in full or will have been paid in
     full  prior to the  Closing  Date,  subject  only to  normal  retrospective
     adjustments  in the ordinary  course,  with regard to the Company Plans for
     plan years ending on or before the Closing Date.

          (j) ACCRUAL OF EXPENSES AND LIABILITIES.  All expenses and liabilities
     relating  to all of the  Company  Plans have been,  and will on the Closing
     Date be,  fully and  properly  accrued on  Sellers'  books and  records and
     disclosed in accordance with generally accepted  accounting  principles and
     in the financial statements of the respective Company Plans.

          (k) AMENDMENT; TERMINATION. Each of the Company Plans provides that it
     may be amended or terminated at any time and, except for benefits protected
     under  Section  411(d)  of the  Code,  all  benefits  payable  to  current,
     terminated employees or any beneficiary may be amended or terminated by the
     Seller or the Business at any time without liability.

<PAGE>

          (l) OTHER LIABILITIES. Neither Sellers nor the Business nor any Member
     of the  Controlled  Group  has any  liability  or is  threatened  with  any
     liability  (whether  joint or  several)  (i) for any excise tax  imposed by
     Sections  4971,  4975,  4976,  4977 or 4979 of the Code,  or (ii) to a fine
     under Section 502 of ERISA.

          (m)  NEGOTIATIONS.  There are no  negotiations,  demands or  proposals
     which are pending or have been made which concern  matters now covered,  or
     that would be covered,  by the type of  agreement  required to be listed in
     the DISCLOSURE SCHEDULE.

     2.14 INSURANCE.  The DISCLOSURE  SCHEDULE contains an accurate and complete
description of all policies of fire, liability,  worker's compensation and other
forms of  insurance  owned or held by Sellers  relating  to the  Business or the
Assets.

     2.15  CONTRACTS;  NO DEFAULT.  Neither Seller is a party to any contract or
other agreement, whether written or oral, that (i) imposes, or will impose as of
the Closing Date, any Security  Interest (other than the Security  Interests set
forth on  Schedule  6.9) on any of the  Assets  that will not be  removed  on or
before the Closing Date, or (ii) would prevent or threaten the  consummation  of
the transaction contemplated by this Agreement.  True and complete copies of the
Contracts  have been made available to Buyer prior to the execution and delivery
of  this  Agreement.  All  Contracts  are  to  Sellers'  Knowledge,   valid  and
enforceable  in accordance  with their  respective  terms;  neither Seller is in
default in the  performance of any of its  obligations  thereunder;  to Sellers'
Knowledge,  no default or event that (whether with or without  notice,  lapse of
time,  or both,  or the  happening or the  occurrence  of any other event) would
constitute a default thereunder has occurred;  and, to Sellers'  Knowledge,  all
other parties thereto are not in default  thereunder and have no  counterclaims,
offsets or defenses with respect thereto.  Except as set forth on the DISCLOSURE
SCHEDULE,  all  consents  to the  transactions  contemplated  by this  Agreement
required from parties to the Contracts have been obtained by Sellers, or will be
obtained prior to the Closing Date.

     2.16 CUSTOMERS AND SUPPLIERS.  Except as set forth on Schedule 2.16,  since
January 1, 2000,  there has been no adverse change in the business  relationship
of Sellers  with any  customer  or  supplier  which  change is  material  to the
financial  condition or operations of the Business.  To Sellers'  Knowledge,  no
customer or supplier of the Business intends to materially  reduce its purchases
from or sales to Sellers.  None of the  suppliers  or  customers of the Business
have informed the Sellers, in writing or, to Sellers' Knowledge, orally, that it
does not intend to do business with the Buyer following the Closing with respect
to the Business, except as may be set forth on the DISCLOSURE SCHEDULE.

     2.17 LICENSES AND  REGISTRATIONS.  (i) Sellers have all permits,  licenses,
registrations and approvals (collectively, "Approvals") necessary to conduct the
Business as presently  conducted and as required by applicable  laws,  rules and
regulations,  and (ii)  neither  Seller is in  violation or breach of any of the
terms,  requirements  or conditions  of any of said  Approvals.  The  DISCLOSURE
SCHEDULE  sets forth a complete  and  accurate  listing of all of the  Approvals
issued to,  possessed  by, or otherwise in effect with respect to the  Business.
Such Approvals  constitute all of the Approvals necessary to permit the Business
to be conducted in the manner in which it is now being conducted.

<PAGE>

     2.18  BOOKS AND  RECORDS.  The  books of  account,  minute  books and other
corporate and  partnership  records of Sellers  properly and fairly  reflect all
material transactions  undertaken by Sellers and all such books and records have
been maintained in accordance with good business practice.  At Closing,  Sellers
will deliver to Buyer copies of all documents,  books and records related to the
operation of the Business.

     2.19 AS IS, WHERE IS SALE.  Buyer  acknowledges and agrees that it has been
or will prior to the date  hereof be given a full  opportunity  to  inspect  and
investigate  every aspect of the Assets,  including all matters related to legal
status or requirements, physical condition, title, leasing, contracts, and other
matters of significance. Buyer specifically acknowledges and agrees that, except
for the  specific  representations  and  warranties  set forth in Article 2, the
Assets are being sold in an "AS IS"  condition  and "WITH ALL  FAULTS" as of the
date of this Agreement and as of the Closing.

     2.20 NO OTHER REPRESENTATIONS OR WARRANTIES. Except for the representations
and  warranties  contained  in Article 2,  neither of the  Sellers nor any other
Person makes any express or implied  representation or warranty on behalf of the
Sellers,  and each of the Sellers hereby  disclaims any such  representation  or
warranty whether by the Sellers or any of their respective Affiliates, officers,
directors, employees, agents or representatives or any other Person.

     2.21 FULL DISCLOSURE.  To the Knowledge of the Sellers, the representations
and  warranties  contained  in this Article 2, as  supplemented  by the Sellers'
schedules and DISCLOSURE  SCHEDULE,  taken as a whole, do not contain any untrue
statement of a material  fact or omit to state any material fact  necessary,  to
make  the  representations  and  warranties  contained  in  this  Article  2, as
supplemented by the Sellers' schedules and DISCLOSURE SCHEDULE,  in the light of
the circumstances under which they were made, not misleading.

     2.22  DISTRIBUTORS.  Set forth on Schedule 2.22 is a true and complete list
of the Distributors.

     2.23 REAL PROPERTY.

          (a) Schedule  1.1(a)(i) sets forth a complete and correct list and the
     legal  descriptions  of the Real  Property.  Sellers are not a party to any
     contract,  lease or other agreement regarding the Real Property, other than
     this Agreement and the documents set forth on Schedule 2.23.

          (b) Except for liens for current  taxes not yet due and  payable,  the
     Sellers  have  good and  marketable  title to the Real  Property  and valid
     leasehold  interests  in and to all real  property  that is the  subject of
     leases  included  in the  Contracts  (the  "Leased  Property"),  which Real
     Property and Leased Property interests are not subject to any rights of any
     other  person or entity  that are  superior to such  interests  of Sellers,
     other than  easements  of record and the  documents  set forth on  Schedule
     2.23.  The  easements of record and those set forth on Schedule 2.23 do not
     materially  interfere  with  the  present  use or  occupation  of the  Real
     Property or Leased Property.

          (c) True,  correct and  complete  copies of the real  property  leases
     included in the Contracts  (including without limitation any amendments and
     underlying leases) are attached

<PAGE>

     to Schedule 1.1(a)(v). Such leases contain the entire agreement between the
     landlord of each Leased Property and the  appropriate  Seller and there are
     no other  agreements  between the landlord and the Sellers  affecting  such
     Leased  Property.  Such  leases are in full force and effect and all of the
     representations and warranties of the Sellers therein are true and correct.
     No material  default of the tenant  and/or  subtenant (if any) has occurred
     under any of such leases nor has any event occurred which,  with the giving
     of  notice or the  passage  of time or both  would  constitute  a  material
     default of the tenant  and/or  subtenant (if any)  thereunder.  Any default
     under such leases has been cured within  applicable  cure periods  provided
     thereby.  Without  limiting the  generality  of the  foregoing,  the tenant
     and/or  subtenant (if any) under such leases,  is current in the payment of
     all rent due  thereunder  and has not prepaid  more than one  month's  rent
     thereunder.  To the  Sellers'  Knowledge,  no default of the  landlord  has
     occurred under any such leases nor has any event occurred  which,  with the
     giving of notice or the passage of time or both would  constitute a default
     of the landlord thereunder. To the Sellers' Knowledge, there are no claimed
     set-offs against rent due, claims for  indemnification  by any party, known
     claims or litigation  regarding the Leased Property.  The Sellers have free
     and unimpeded  vehicular and pedestrian access to the Leased Property via a
     dedicated public way or appurtenant easements.

          (d) The Sellers have all necessary approvals, certificates,  consents,
     permits and licenses, including but not limited to all water and irrigation
     licenses  and  permits,  (all of which are in current  effect and in final,
     non-appealable  form) to use and  operate  the  Business  at or on the Real
     Property and the Leased  Property.  The Sellers have not violated or failed
     to hold any valid and effective certificates of occupancy,  or certificates
     relating  to  electrical  work,  subdivision,  zoning  or other  approvals,
     consents,  permits and licenses (including,  without limitation,  building,
     housing,  safety, fire, health subdivision,  zoning and similar permits and
     approvals)  required by applicable law with respect to any Real Property or
     Leased Property. The Real Property and Leased Property is free from any use
     or occupancy  restrictions,  except those imposed by applicable subdivision
     and zoning laws, ordinances and regulations which permit the current use of
     the Real  Property  and  Leased  Property,  and from all  special  taxes or
     assessments,  except those specified on Schedule 2.23.  Except as set forth
     on Schedule  2.23,  the Real Property and Leased  Property and the Sellers'
     use and operation  thereof  complies in all material  respects with all (i)
     federal,  state and local directives,  laws, ordinances,  policies,  rules,
     regulations,  requirements,  and statutes  applicable  thereto  (including,
     without limitation, applicable building, health, fire, safety, subdivision,
     zoning  and  other  similar   regulatory  laws,   ordinances  ,  codes  and
     regulations  and  the  Americans  with  Disabilities  Act )  (collectively,
     "Property  Laws"),  and  (ii)  insurance  requirements  applicable  to  any
     buildings and improvements. To the Sellers' Knowledge, the Sellers have not
     received,  nor is there, any notice of any non-compliance with any Property
     Laws  regarding the Real Property or Leased  Property,  which have not been
     resolved.  None of the Real Property or Leased Property is located within a
     flood plain  requiring  flood  insurance,  or evidence of such insurance is
     attached to Schedule 2.23.

          (e) Neither  the whole nor any portion of the Real  Property or Leased
     Property is subject to any governmental  decree or order to be sold nor, to
     the Sellers' Knowledge, is being condemned, expropriated or otherwise taken
     by any public  authority with or without payment of compensation  therefore
     nor has any such  condemnation,  expropriation or taking been proposed.  To
     the Sellers'  Knowledge,  there are no zoning or other land-use  regulation
     proceedings,  or any change in any applicable  Property  Laws,  which could
     affect the use,  operation or value of the Real Property or Leased Property
     affected thereby in any material respect, and the Sellers have

<PAGE>

     not received written notice of any special assessment proceedings affecting
     the Real Property or Leased Property which have not been resolved.

          (f)  All  Improvements  on  the  Real  Property  and  all  structures,
     buildings,  building  systems  (including  without  limitation  roof, HVAC,
     electrical,  plumbing,  sprinklers  and fire  safety  systems),  irrigation
     systems,  fixtures and other  improvements,  together  with the systems and
     facilities  servicing  such  structures,   buildings,  fixtures  and  other
     improvements,  located on the Leased  Property  (collectively,  the "Leased
     Property  Improvements") are (i) in good working order and repair (ordinary
     wear and tear excepted) and (ii) suitable for the use presently  being made
     of such Improvements and Leased Property Improvements by the Sellers.

          (g)  All  water,  sewer,  gas,  electric,  communications,  telephone,
     irrigation and drainage  facilities and all other utilities required by law
     or for the  present  use and  operation  of the Real  Property  and  Leased
     Property ("Utilities  Facilities") are: (i) installed to the boundary lines
     of the Real  Property or Leased  Property and the  buildings  and vineyards
     situate  thereon,  (ii)  all  connected  and  operating  pursuant  to valid
     permits,  consents  and  approvals,  (iii)  adequate  to  service  the Real
     Property  and Leased  Property and to permit  compliance  with all Property
     Laws and the present  usage of the Real Property and Leased  Property,  and
     (iv) are connected to the Real Property or Leased  Property by means of one
     or more public or private  easements  extending  from the Real  Property or
     Leased  Property to one or more public  streets,  public  rights-of  way or
     utility  facilities  ("Appurtenant  Easements").  None of the Improvements,
     Leased  Property  Improvements  or Utility  Facilities  located on the Real
     Property or Leased  Property  (v)  encroaches  on the property of others or
     (vi)  relies on any  facilities  located on other  property  not subject to
     Appurtenant  Easements  (A) to comply with any  Property  Laws,  or (B) for
     agricultural   use,   structural   support,   material   building  systems,
     operations,   Improvements  or  Utility  Facilities.  All  of  the  Utility
     Facilities not located on the Real Property or Leased  Property are situate
     within  and  comply at all times  with the  provisions  of the  Appurtenant
     Easements.

          (h) The Sellers  have not  committed or  obligated  themselves  in any
     manner  whatsoever  to  assign  or  sublease  any Real  Property  or Leased
     Property to any person or entity.  Except as provided on Schedule 2.23, the
     Sellers have not committed or obligated themselves in any manner whatsoever
     to place any  encumbrance  on any Real  Property or Leased  Property or any
     portion thereof.  Except as provided on Schedule 2.23, the Sellers have not
     hypothecated  or  assigned  any rents or income  from the Real  Property or
     Leased Property, or any portion thereof, in any manner.

          (i) Except as provided on Schedule  2.23,  the Sellers have not caused
     any work or  improvements  to be performed  upon or made to any of the Real
     Property  or  Leased  Property  for which  there  remains  outstanding  any
     material payment obligation that could result in the imposition of any lien
     on any Real Property,  Leased  Property,  Improvements  or Leased  Property
     Improvements,  except for the imposition of Permitted  Liens.  Prior to the
     date of this Agreement, or as provided elsewhere in this Agreement, Sellers
     have  delivered (or will  deliver) to Buyer true and correct  copies of all
     deeds  to  the  Sellers,  approvals,  certificates,   consents,  easements,
     encumbrances,  instruments,  licenses,  mortgages,  permits, surveys, title
     insurance  policies and other documents  relating to or affecting the title
     to the Real  Property  and  Leased  Property  that  are in the  possession,
     custody or control of the Sellers.

<PAGE>

          (j) To Sellers' Knowledge,  the winery wastewater treatment systems at
     any of the Real Property,  including without  limitation such systems which
     utilize ponds and wetlands as part of the treatment process:  (i) are being
     operated,  maintained  and  monitored  in  compliance  with all  applicable
     Environmental Laws and Legal Requirements and in accordance with applicable
     Operation and Maintenance  Manuals and procedures;  (ii) are fulfilling the
     wastewater treatment purposes for which they were created; and (iii) do not
     require significant modification to maintain continued proper operation and
     compliance with  Environmental  Laws and Legal Requirements and fulfillment
     of wastewater treatment purposes. The Sellers have all easements and rights
     to operate  the winery  wastewater  treatment  systems  and to utilize  the
     pipelines on adjoining  properties  in connection  with such systems.  Such
     easements and rights are fully transferable to Buyer at Closing Date.

                                   ARTICLE 3
                                   ---------

                     REPRESENTATIONS AND WARRANTIES OF BUYER

     Buyer  represents  and warrants to Sellers on the date hereof and on and as
of the Closing Date as follows:

     3.1 CORPORATE  ORGANIZATION;  ETC. Buyer is a corporation  duly  organized,
validly existing and in good standing under the laws of New York. Buyer has full
power and authority to carry on its business as now being  conducted and to own,
lease and operate its properties and assets.

     3.2  AUTHORIZATION;  ETC. Buyer has full  corporate  power and authority to
enter into this Agreement and to carry out the transactions contemplated hereby.
Buyer has taken all action required by its Articles of Incorporation, its Bylaws
or otherwise to authorize the  execution and delivery of this  Agreement and the
transactions  contemplated  hereby.  This  Agreement  has been duly and  validly
executed and delivered,  and no other  corporate or other action is necessary to
effect such execution and delivery;  and this Agreement is the valid and binding
obligation of Buyer enforceable  against it in accordance with its terms, except
that (i) enforceability may be limited by bankruptcy, reorganization, insolvency
or other laws affecting the enforcement of creditors' rights generally, and (ii)
courts may award money damages  rather than specific  enforcement of contractual
provisions involving matters other than or in addition to the payment of money.

     3.3 NO VIOLATION.  Neither the execution and delivery of this Agreement nor
the  consummation of the transactions  contemplated  hereby will (a) violate any
provisions of the Articles of Incorporation or Bylaws of Buyer, (b) violate,  or
be in conflict with, or constitute a default (or an event which, with or without
due notice or lapse of time, or both, would constitute a default) under or cause
the acceleration of the maturity of any debt, obligation,  contract,  commitment
or other  agreement  to which  Buyer is a party,  (c) result in the  creation or
imposition  of any  mortgage,  pledge,  lien,  security  interest,  encumbrance,
restriction  or charge of any kind,  upon any  property or assets of Buyer under
any debt,  obligation,  contract,  agreement or  commitment  to which Buyer is a
party or by which  Buyer is bound,  or (d)  violate  any  statute  or law or any
judgment,  decree,  order,  regulation,  or rule of any  court  or  governmental
authority.

<PAGE>

     3.4  CONSENTS  AND  APPROVALS  OF  GOVERNMENTAL  AUTHORITIES.   Except  for
approvals to be obtained  from the State of  California  Department of Alcoholic
Beverage Control and Board of Equalization,  (the "California  Authorities") the
United  States  Bureau of Alcohol,  Tobacco and Firearms  (the  "ATF"),  and the
notification  requirements  and  expiration  or  termination  of the  applicable
waiting   period   under  the  HSR  Act,  no  material   consent,   approval  or
authorizations of, or declaration, filing or registration with, any governmental
regulatory  authority  or  third  Person  is  required  in  connection  with the
execution,  delivery  and  performance  of  this  Agreement  by  Buyer  and  the
consummation of the  transactions  contemplated  hereby.  To the best of Buyer's
knowledge, there is no existing circumstance related to Buyer that would prevent
Buyer from obtaining the approvals specified above.

     3.5 FUNDS.  Buyer has available a commitment  attached  hereto as EXHIBIT C
(the  "Commitment")  from the Chase  Manhattan  Bank and Chase  Securities  Inc.
(collectively, "Chase") or will use its reasonable efforts to seek other funding
to provide  sufficient  funds to enable  Buyer to  consummate  the  transactions
contemplated  herein. The Commitment is subject only to the terms and conditions
stated therein. Buyer is in full compliance with its credit facilities including
without limitation the credit facility referred to in the Commitment. Buyer will
take all reasonable steps necessary to cause Chase to fund the Commitment or for
Buyer to  otherwise  obtain  sufficient  funding  for  Buyer to  consummate  its
obligations  hereunder.   Buyer  has  no  knowledge  Chase  will  not  fund  the
Commitment.  Buyer will not take any action that could reasonably be expected to
adversely affect the certainty of Buyer's ability to consummate the transactions
contemplated  hereby or obtain the financing  contemplated  by the Commitment or
otherwise in amounts  sufficient to enable Buyer to consummate the  transactions
contemplated hereby.

     3.6 Omitted.

     3.7  DISCLOSURE  OF  INFORMATION.  Buyer  believes it has  received all the
information  it considers  necessary  or  appropriate  for  deciding  whether to
purchase the Assets pursuant to this Agreement.  Buyer has had an opportunity to
ask  questions  and  receive  answers  from  Sellers  regarding  the  terms  and
conditions  of sale of the Assets and the  business,  properties,  prospects and
financial condition of the Business.

     3.8  INVESTMENT  EXPERIENCE.  Buyer  can  bear  the  economic  risk  of its
investment,  and has such  knowledge  and  experience  in  financial or business
matters that it is capable of evaluating the merits and risks of the purchase of
the Assets.

     3.9 Omitted.

     3.10 NO OTHER REPRESENTATIONS OR WARRANTIES. Except for the representations
and warranties contained in this Article 3, Buyer nor any other Person makes any
express or implied  representation or warranty on behalf of the Buyer, and Buyer
hereby disclaims any such representation or warranty whether by the Buyer or any
of their  respective  Affiliates,  officers,  directors,  employees,  agents  or
representatives or any other Person.

<PAGE>

                                   ARTICLE 4
                                   ---------

                  CONDUCT OF BUSINESS PENDING THE CLOSING DATE

     Sellers  hereby  agree  that,  pending  the  Closing  Date,  and  except as
otherwise consented to or approved by Buyer in writing:

     4.1 REGULAR  COURSE OF BUSINESS.  Sellers shall conduct the Business in the
ordinary course and  substantially  in the same manner as heretofore  conducted.
Without limiting the generality of the foregoing:

          (a)  Sellers  will  not  change  in any  manner  the  rate or terms of
     compensation  or bonus  payable  or to  become  payable  to any  management
     employee,  or  change  in any  manner  the rate or terms of any  insurance,
     pension or other employee benefit plan, payment or arrangement made to, for
     or with any management employee;

          (b) Sellers will not enter into any grape purchase contract;

          (c) Sellers will not enter into any  agreement to do any of the things
     described in clause (a) or (b) above;

          (d) The Sellers will use their best  efforts to preserve  their rights
     to, and the goodwill associated with, the Intellectual Property.

          (e) Subject to the terms and condition of this Agreement, Sellers will
     use  their  reasonable  efforts  to  keep  available  the  services  of the
     Employees, and preserve the goodwill, reputation, and present relationships
     of the Business with its suppliers, customers, licensors, and others having
     such business relations with the Business.

          (f) Except in the  ordinary  course of  business,  or except  upon the
     written consent of the Buyer, no Seller will (i) sell, lease,  transfer, or
     otherwise dispose of any of the Assets,  (ii) create or permit to exist any
     lien on the  Assets  other  than  Permitted  Liens,  or (iii)  make any new
     commitments for capital expenditures in the Business.

          (g) No Seller will accelerate or delay the manufacture,  shipment,  or
     sale  of any  inventory  in a  manner  inconsistent  with  past  practices,
     including,  without limitation, sell inventory to distributors in excess of
     quantities  which would  constitute,  as of the Closing Date, the lesser of
     (i) inventories  beyond which the distributor  has  historically  purchased
     during the  comparable  period in the prior year or (ii) a fifteen (15) day
     supply for distributors located in the State of California and a forty-five
     (45) day supply for other  distributors (any such excess referred to herein
     as "Loaded Sales to Distributors").

          (h) The Sellers will (i) use reasonable efforts to maintain the Assets
     in good repair, order, and condition,  normal wear and tear excepted,  (ii)
     maintain their records  relating to the Assets in the usual,  regular,  and
     ordinary manner on a basis  consistent  with past practices,  and (iii) use
     reasonable  efforts to perform and comply with their  obligations under the
     Contracts.  The  Sellers  will  not make any  material  alterations  to the
     Assets,  other than in the ordinary course

<PAGE>

     of business  consistent  with past  practices,  without  the prior  written
     consent of the Buyer,  which consent shall not be unreasonably  withheld or
     delayed.

     4.2 ORGANIZATION. Each of Seller shall use its best efforts to preserve its
existence and business  organization  intact,  to keep  available to Buyer,  the
officers and key employees  employed in the Business,  and to preserve for Buyer
the  Business's  relationships  with  lenders,  suppliers,  customers and others
having business relations with the Business.

     4.3 INSURANCE; PROPERTY. Each Seller shall continue to insure all property,
real,  personal  and  mixed,  owned or  leased  by such  Seller  and used in the
Business,  including the Assets, in the manner  contemplated in Section 2.14 and
all such property shall be used, operated,  maintained and repaired in a careful
and  reasonable  manner.  Notwithstanding  the  foregoing,  in the  event of any
casualty  affecting  the Assets  after the date  hereof and prior to the Closing
Date (i) in an amount less than  $200,000,  Sellers  shall have no obligation to
repair or restore  the Assets  provided  Sellers  assign to Buyer at Closing any
proceeds  available to Sellers under any policy of casualty  insurance  covering
the Assets,  and (ii) in an amount  equal to or greater than  $200,000,  Sellers
shall have no obligation to repair or restore the Assets  provided if Sellers do
not repair or restore such Assets prior to the Closing Date, Buyer's obligations
to effect the transactions contemplated herein shall be relieved, and Buyer may,
in its sole discretion, terminate this Agreement pursuant to Section 8.1 without
further obligation to Sellers.

For a period of twelve  (12) months from the  Closing  Date,  the Sellers  shall
maintain,  on an occurrence basis,  comprehensive  General  Liability  Insurance
(including,  without  limitation,  contractual  liability insurance and products
liability  insurance)  covering claims arising out of Sellers'  operation of the
Business,  and out of products or services sold by, or manufactured by Seller in
connection with the operation of the Business,  on or prior to the Closing Date,
with  limits of at least  $1,000,000  for each  occurrence,  with a  $25,000,000
aggregate limit, naming the Buyer as additional insured.  Such policies shall be
written so that Buyer will  receive 30 days written  notice of any  cancellation
and reasonable notice of any non-renewal or material change in coverage.

     4.4 NO DEFAULT; AMENDMENT. Each Seller shall use its best efforts not to do
any act or omit to do any act, or permit any act or  omission to act,  that will
cause a breach of any material Contract. Neither Seller shall amend any material
Contract  except in the  ordinary  course of business  and with prior  notice to
Buyer, provided that any amendment to a Contract or Contracts that individually,
or in the aggregate, increases the liability of Sellers by more than $100,000.00
requires the written consent of the Buyer.

     4.5  COMPLIANCE  WITH LAWS.  Each  Seller  shall duly comply with all Legal
Requirements  applicable  to it and its  properties,  operations,  business  and
employees.

     4.6 NO ACQUISITIONS;  EXCLUSIVITY.  Sellers shall not approve or undertake,
whether as the surviving,  disappearing,  acquiring or selling entity, any other
merger, consolidation,  asset acquisition or disposition,  tender offer or other
takeover  transaction with respect to the Business or Assets or furnish or cause
to be furnished any information  concerning the Business or Assets to any Person
(other than to Buyer) that is interested in any such transaction.  Sellers shall
not


<PAGE>

solicit or encourage, or pursue any unsolicited,  inquiries or proposals for the
acquisition  of all or any  part  of the  capital  stock,  property,  assets  or
business of the Business or Assets.

                                   ARTICLE 5
                                   ---------

                         COVENANTS OF SELLERS AND BUYER

     5.1 FULL ACCESS.  Sellers shall afford to Buyer,  its counsel,  accountants
and other authorized  representatives  reasonable access to Sellers' properties,
books and records to the extent  they relate to the  Business or Assets in order
that Buyer may have full opportunity to make such reasonable  investigations  as
Buyer  shall  desire  to make  of the  Business.  Sellers  will  cause  Sellers'
employees and  accountants  to furnish such  additional  financial and operating
data and other  information  relating  to the  Business or Assets as Buyer shall
from time to time reasonably request.  Any such investigation shall be conducted
during  normal  business  hours  in  such  a  manner  so  as  not  to  interfere
unreasonably  with the  operations of SVI and TRVG,  and Buyer shall not contact
any  sales  representatives,  distributors,  brokers,  customers,  suppliers  or
employees of Sellers concerning the transactions  contemplated by this Agreement
without the prior written consent of Sellers.

     5.2 CONSENTS,  REMOVAL OF OBJECTIONS. It is the intent of Buyer and Sellers
to  consummate  the  purchase  and  sale of  Assets  hereunder  at the  earliest
practicable time, and they respectively  agree to exert their reasonable efforts
to cause the Closing to occur.

          (a) Omitted.

          (b) ANTITRUST NOTIFICATION. Each of Sellers and Buyer will as promptly
     as practicable,  but in no event later than January 31, 2001, file with the
     United States  Federal Trade  Commission  (the "FTC") and the United States
     Department of Justice (the "DOJ") the notification and report form, if any,
     required  for the  transactions  contemplated  hereby and any  supplemental
     information  requested in connection therewith pursuant to the HSR Act. Any
     such  notification and report form and supplemental  information will be in
     substantial  compliance with the requirements of the HSR Act. Each of Buyer
     and  Sellers  shall  furnish to the other such  necessary  information  and
     reasonable  assistance  as the other may  request  in  connection  with its
     preparation  of any filing or submission  which is necessary  under the HSR
     Act.  Sellers and Buyer shall keep each other apprised of the status of any
     communications  with, and inquiries or requests for additional  information
     from,  the FTC and the DOJ and shall comply  promptly with any such inquiry
     or request.  Each of Sellers and Buyer will use its  reasonable  efforts to
     obtain any clearance  required  under the HSR Act for the purchase and sale
     of the Assets.

          (c) OTHER  REGULATORY  APPROVALS.  Each of  Sellers  and Buyer will as
     promptly as practical seek the approval of the California  Authorities  and
     of the ATF for the transactions  contemplated hereby including the transfer
     of any licenses,  permits,  registrations and authorizations  necessary for
     operation of the Business. Such approval shall be sought in compliance with
     applicable laws and regulations. Each of Buyer and Sellers shall furnish to
     the other such necessary information and reasonable assistance as the other
     may request in  connection  with seeking such  approval.  Sellers and Buyer
     shall keep each other  apprised of the status of any  communications  with,
     and inquiries or requests for  additional  information  from the

<PAGE>

     California Authorities and the ATF, and shall comply promptly with any such
     inquiry  or  request.  Each of Sellers  and Buyer  will use its  reasonable
     efforts to obtain the approval of the  California  Authorities  and the ATF
     for the  purchase  and sale of the  Assets.  For a  period  of one (1) year
     following  the Closing,  Sellers shall  cooperate  with Buyer in connection
     with Buyer's  efforts to obtain  "use-up" rights with respect to labels and
     trade dress  included in the Assets,  including,  if so requested by Buyer,
     confirmation to federal and state alcoholic  beverage  authorities that the
     Buyer is authorized by the Sellers to use such labels and trade dress.

          (d) GOVERNMENTAL  CONSENTS.  Buyer and Sellers agree to use reasonable
     efforts to obtain the consents and permits described in Section 6.3.

     5.3 EMPLOYEES.

          (a) From the date of this  Agreement,  Sellers  shall afford to Buyer,
     its counsel, and other authorized  representatives reasonable access to the
     Employees,  except to the extent an Employee  appears on Schedule  5.3 (the
     "Unavailable  Employees"),  and the  employment  records  thereof,  for the
     purpose of Buyer  making a  determination,  in its sole  discretion,  as to
     which  Employees  Buyer will extend  offers of  employment.  Buyer shall be
     permitted  to  make  employment   offers  to  all  Employees,   except  the
     Unavailable Employees.  Any such Employee who accepts employment with Buyer
     on the  Closing  Date is herein  referred to as a  "Transferred  Employee".
     Nothing herein shall obligate Buyer to extend employment offers.

          (b)  Buyer  shall  provide  wages  and  salaries  to  the  Transferred
     Employees  that are  comparable,  in the  aggregate,  to those  provided by
     Sellers as of the  Closing  Date and shall give each  Transferred  Employee
     past  service  credit  under  its   compensation   and  benefit  plans  and
     arrangements  for service with Sellers prior to the Closing Date as if such
     service had been with  Buyer;  PROVIDED  that such credit for past  service
     with Sellers shall be solely for purposes of vesting and  eligibility,  but
     not benefit  accrual.  Sellers,  in accordance  with their past  practices,
     shall not offer or pay any  severance  pay to an  Employee  who is  offered
     employment by Buyer except if the offer of employment would have required a
     significant  increase  in  commute  time to and from  work,  a  significant
     increase in travel time  (sales),  or would have  required  the Employee to
     relocate.

          (c) For a period  of one (1) year  after  the  Closing  Date,  neither
     Sellers nor any  Affiliates  of the Sellers  shall  directly or  indirectly
     induce or attempt to induce in any manner any Transferred Employee to leave
     the  employment  of Buyer or any  Affiliate  of Buyer  nor  employ or offer
     employment to any Employee to whom Buyer has made an offer of employment.

     5.4 FURTHER  ASSURANCES.  Buyer and Sellers  shall each execute and deliver
such instruments and take such other actions as the other parties may reasonably
require in order to carry out the intent of this  Agreement.  After the Closing,
Sellers shall from time to time, at the reasonable  request of Buyer and without
cost or  expense  to  Sellers,  execute  and  deliver  such  other  instruments,
documents or agreements of conveyance  and transfer and take such other actions,
including, without limitation,  assistance in the reduction to possession of any
Assets,  as  Buyer  or its  counsel  may  reasonably  request,  in order to more
effectively consummate the transactions contemplated hereby and to vest in Buyer
good and marketable title to the Assets.

<PAGE>

     5.5 PUBLIC  ANNOUNCEMENTS.  Sellers and Buyer agree that immediately  after
execution of this Agreement,  Buyer may make a public  announcement  and issue a
press release in a form to be reasonably agreed upon by the parties.  Otherwise,
except as required by law or in response to a request by  regulatory or judicial
authorities  having  jurisdiction over the applicable party,  neither party will
disclose  to any third  party the  Confidential  Information  (as defined in the
Confidentiality  Agreement)  of the other  parties,  the  terms of the  proposed
transaction or the nature of discussions without the prior written permission of
the other party, other than information  regarding the transaction which becomes
publicly available without violation of the terms hereof; provided, that neither
party is precluded by this  Agreement  from  confidential  discussions  with its
stockholders,  partners, key employees,  legal counsel,  accountants,  banks and
other  agents  or  advisors  as  reasonably  deemed  necessary  by  each  party,
respectively,  in order to facilitate the transaction  contemplated  hereby; and
provided  further,  that Buyer  shall not be  required  to obtain the consent of
Sellers  to  enter  into   confidential   discussions   about  the  transactions
contemplated by this Agreement with potential  private equity sources or to make
any press release or public statement required by law or any securities exchange
upon which Buyer's stock is publicly traded.  Notwithstanding the foregoing,  if
either of the Sellers or any of their officers, directors, stockholders, general
partners, key employees,  legal counsel,  accountants,  banks or other agents or
advisors has or obtains any "material  non-public"  information (as contemplated
in Regulation FD of the Securities and Exchange  Commission,  herein referred to
as "Regulation FD") of the Business or the Buyer or its Affiliates, such Sellers
and their officers,  directors,  stockholders,  general partners, key employees,
legal  counsel,  accountants,  banks and other agents and advisors shall hold in
confidence,  and shall not disclose, such material non-public information unless
and until the Buyer or its Affiliates have publicly  disclosed such  information
in compliance with  Regulation FD. Sellers shall obtain  agreement from any such
officers,  directors,  stockholders,  general  partners,  key  employees,  legal
counsel,  accountants,   banks  and  other  agents  or  advisors  to  whom  such
Confidential  Information  or  terms  of  the  proposed  transaction  have  been
disclosed,  to abide by the obligations in this paragraph relating to holding in
confidence "material nonpublic"  information of the Business or the Buyer or its
Affiliates.

     5.6 ACTIONS OF BUYER AFFECTING REPRESENTATIONS AND WARRANTIES.  Buyer shall
not take any  action,  nor suffer or permit to be taken any  action,  that would
cause any  representations and warranties of Buyer contained in Article 3 hereof
to be incorrect on or as of the Closing Date.

     5.7 ACTIONS OF SELLERS AFFECTING  REPRESENTATIONS  AND WARRANTIES.  Sellers
shall not take any  action,  nor suffer or permit to be taken any  action,  that
would cause any representations and warranties of Sellers contained in Article 2
to be incorrect on or as of the Closing Date.

     5.8 NOTIFICATION; UPDATES TO DISCLOSURE SCHEDULE.

          (a) During the period between the date hereof and the Closing, Sellers
     shall  promptly  notify  Buyer in  writing of the  discovery  by any of the
     Sellers of: any event,  condition,  fact or  circumstance  that occurred or
     existed  on or prior  to the date of this  Agreement  and  that  caused  or
     constitutes  a breach of or inaccuracy  in

<PAGE>

     any  representation or warranty made by the Sellers in this Agreement;  any
     event, condition,  fact or circumstance that occurs, arises or exists after
     the date of this  Agreement  and that would cause or constitute a breach of
     or  inaccuracy  in any  representation  or warranty made by Sellers in this
     Agreement  if (A) such  representation  or warranty had been made as of the
     time of the  occurrence,  existence or discovery of such event,  condition,
     fact or circumstance,  or (B) such event,  condition,  fact or circumstance
     had occurred,  arisen or existed on or prior to the date of this Agreement;
     any breach of any covenant or obligation of any of the Sellers contained in
     this Agreement;  and any event,  condition,  fact or circumstance  that may
     make the timely  satisfaction of any of the conditions set forth in Article
     6 impossible or unlikely.

          (b) If any event, condition,  fact or circumstance that is required to
     be disclosed pursuant to this Section 5.8 affects anything set forth in the
     DISCLOSURE  SCHEDULE,  then the Sellers shall promptly  deliver to Buyer an
     update  to  the  DISCLOSURE  SCHEDULE  (a  "Disclosure   Schedule  Update")
     specifying such change. No such Disclosure  Schedule Update shall be deemed
     to  supplement  or amend the  DISCLOSURE  SCHEDULE  for the  purpose of (i)
     determining the accuracy of any of the  representations and warranties made
     by the Sellers in this  Agreement  as of the Closing,  or (ii)  determining
     whether the conditions set forth in Article 6 have been satisfied.

     5.9 CONDUCT PENDING THE CLOSING.  The parties shall not take any action, or
omit to take any  action,  that could  threaten  or prevent  the  Closing of the
transaction  contemplated  by this  Agreement,  provided that nothing  contained
herein shall restrict a party's right to terminate  this  Agreement  pursuant to
Section 8.1.

     5.10 ACCESS BY SELLERS;  BOOKS AND RECORDS.  Buyer shall cooperate with the
Sellers  to  make  available  to  the  Sellers  all  financial,  tax  and  other
information (including the books and records of the Business), and the personnel
file  of  each  Transferred  Employee  reasonably  required  by the  Sellers  in
connection with (i) any audit or other  investigation by any taxing authority or
any required returns, responses to inquiries,  reports or submissions (including
any consolidated  financial or statutory reporting obligations and including any
tax returns or replies to the tax inquiries of the Sellers or their  Affiliates)
to  governmental  authorities  with respect to the  Business  related to periods
beginning  prior to the  Closing  Date or (ii)  matters  relating  to  insurance
coverage  of the  Business,  third-party  litigation,  claims,  proceedings  and
investigations.  Buyer shall preserve such information and the books and records
for a period at least as long as Buyer's internal  procedures and policies would
require.  Notwithstanding  the  foregoing,  risk  of  loss or  damage  for  such
information  after Closing shall remain with Sellers and the Buyer shall have no
liability  or  responsibility  therefor  so long as the  Buyer has acted in good
faith to comply with its obligations under this Section 5.10.

<PAGE>

     5.11 PLANT  CLOSINGS.  Buyer  shall not,  at any time prior to the 61st day
following the Closing Date,  without fully  complying  with the notice and other
requirements  of the WARN Act,  effectuate (i) a "plant  closing" (as defined in
the WARN Act)  affecting  any site of  employment  or one or more  facilities or
operating  units within any site of  employment  of the Business or (ii) a "mass
layoff" (as defined in the WARN Act)  affecting  any site of  employment  of the
Business. If Buyer takes any action within 180 days after the Closing Date which
independently, or in connection with any reduction in the size of the work force
of the  Business  occurring  within the ninety day period  prior to the  Closing
Date,  could be construed as a "plant  closing" or "mass  layoff" as those terms
are defined in the WARN Act, Buyer shall be solely responsible for providing any
notice required by the WARN Act and for making payments,  if any, and paying all
penalties and costs,  if any,  which may result from any failure to provide such
notice.

     5.12 CERTAIN FINANCIAL INFORMATION.

          (a)  Sellers  shall,  from the date  hereof,  provide,  or cause to be
     provided to, Buyer and assist in the  preparation  by Buyer of, audited and
     unaudited  financial and other information  required for the preparation of
     selected and summary  financial  data and pro forma  financial  information
     regarding the Business for all periods required by applicable provisions of
     Regulations  S-X and S-K  promulgated  under the Securities Act of 1933, as
     amended, and the Securities Exchange Act of 1934, as amended, and the rules
     and regulations thereunder,  or an underwritten private offering of debt or
     equity, and shall provide such management  representation letters and shall
     cause its outside  public  accountants to deliver such consents and comfort
     letters as are customary under applicable accounting standards, as promptly
     as reasonably practicable,  but in no event later than forty-five (45) days
     after receipt of such request. Buyer shall be responsible for the costs and
     expenses  incurred  in the  connection  with such  preparation,  review and
     audit.  Sellers  agree that Buyer may use, and Sellers  shall  deliver such
     consents and shall  authorize  their outside  public  accountant to deliver
     such  consents,  as may  reasonably be requested by Buyer to the use of the
     financial and other information  provided pursuant to this Section 5.12, or
     any other  information  provided by Sellers to Buyer  specifically  for the
     following purposes,  in any registration  statement,  prospectus,  offering
     memorandum,  Form 8-K or other public filing, or other document at any time
     on and after the date of this Agreement.

          (b) In addition to the  foregoing,  for a period of 15 months from the
     date  hereof,  from  time to time  Buyer may  request,  and  Sellers  shall
     provide,  assistance  in the  preparation  by  Buyer  of such  audited  and
     unaudited  financial  and  other  information  of the  type,  and  for  the
     purposes, described in Subsection (a) above, and Sellers shall provide such
     management  representation letters and cause its outside public accountants
     to deliver such  consents  and comfort  letters as are  customary  for such
     purposes under applicable accounting  standards,  as promptly as reasonably
     practicable,  but in no event later than forty-five (45) days after receipt
     of such  request.  Buyer shall be  responsible  for the costs and  expenses
     incurred in the connection with such preparation, review and audit.

<PAGE>

     5.13 BULK SALES.  The Buyer and Sellers  hereby waive  compliance  with any
bulk  sales  or  similar  laws  which  may be  applicable  to  the  transactions
contemplated hereby.

     5.14  DISTRIBUTORS.  Promptly after the date hereof, the Sellers shall give
notice  to the  Distributors  with  respect  to  the  distribution  of  products
associated  with the TRV  Trademarks.  Such notice shall be in the form attached
hereto  as  Schedule  5.14,  and  shall  be  delivered  to the  Distributors  as
designated on that Schedule.

     5.15 MUTUAL ASSISTANCE ON ACCOUNTS  RECEIVABLE.  In the event Buyer, SVI or
TRVG  receives  payment  on  receivables  owned by the  other,  then each  shall
promptly  repay to the other  owning  such  receivables  the amount  erroneously
received with respect thereto.

     5.16  TRANSITION  SERVICES.  SVI and Buyer  shall  enter into a  transition
services  agreement in the form attached hereto as EXHIBIT D (the  "Transitional
Services Agreement").

     5.17 TITLE MATTERS.

          (a) The  Sellers  shall  deliver  or  cause to be  delivered  to Buyer
     promptly  following the execution of this  Agreement,  all title  insurance
     policies and/or  commitments  (including any preliminary title reports) and
     survey maps in the  Sellers'  possession  regarding  the Real  Property and
     Leased Property.

          (b) The Sellers,  at their  expense,  shall  deliver to Buyer no later
     than fourteen (14) days prior to the Closing Date current instrument survey
     maps ("Surveys") of the Real Property and Leased Property, dated no earlier
     than  thirty  (30) days before the Closing  Date,  and  prepared:  (i) by a
     surveyor  selected by Buyer and (ii) in accordance  with the latest Minimum
     Standard  Detail  Requirements  for ALTA Land Title  Surveys,  certified to
     Buyer, the Title Seller and such other parties as Buyer may designate, with
     a form  of  certificate  and  Table A  requirements  depicted  in a  manner
     satisfactory to Buyer, in its sole and absolute discretion, showing all the
     Real Property and Leased Property,  together with all improvements thereon,
     and all  easements,  rights-of-way  and  encroachments  affecting  the Real
     Property and certifying its exact acreage.

          (c) The  Sellers and  Shareholder  shall use  commercially  reasonable
     efforts to assist Buyer in obtaining the Title  Commitment and Title Policy
     referenced in Section 6.9 of this Agreement.

     5.18 LIENS.  The Sellers shall obtain  releases of all Permitted  Liens and
Security Interests set forth on Schedule 2.7.

     5.19 SELLERS' FINANCIAL  STATEMENTS.  At least 10 days prior to the Closing
Date, Sellers shall deliver to Buyer:

          (a) the  audited  balance  sheet of SVI as of June 30,  2000,  and the
     related  audited  income  statement  for the fiscal  year then  ended,  and
     footnotes thereto;

<PAGE>

          (b) the unaudited  balance  sheet of SVI as of December 31, 2000,  and
     the related  unaudited income statement for the six months then ended which
     Sellers' accountants will have reviewed in accordance with SAS 71;

          (c) the unaudited  balance sheet of TRVG as of December 31, 2000,  and
     the related unaudited income statement for the twelve months then ended;

          (d) the Balance  Sheet and the related  income  statement  for the six
     months then ended and the  footnotes  and  details  related  thereto  which
     Sellers'  accountants will have reviewed in accordance with SAS 71; and (e)
     the audited  balance  sheet of the  Business as of June 30,  2000,  and the
     related  audited  income  statement  for the  fiscal  year  then  ended and
     footnotes and details thereto.

The  balance  sheets of SVI and related  income  statements  delivered  to Buyer
pursuant to this Section  5.19 shall be prepared in  accordance  with  generally
accepted  accounting  principles  applied on a  consistent  basis,  shall fairly
present the financial condition and results of operations of SVI as of the dates
and for the  periods  presented,  and  shall be  consistent  with the  books and
records of SVI.  The Balance  Sheet and related  income  statement  delivered to
Buyer  pursuant  to this  Section  5.19 shall be  prepared  consistent  with the
Accounting  Methodology  and using  generally  accepted  accounting  principles,
consistently applied, except as set forth in the Accounting  Methodology,  shall
fairly  present the  financial  condition  and  operations of the Business as of
December 31, 2000, and the six month period then ended,  and shall be consistent
with the books and records of the Business. The balance sheet of the Business as
of June 30, 2000,  and related income  statement  delivered to Buyer pursuant to
this Section 5.19 shall be prepared  consistent with the Accounting  Methodology
and using generally accepted  principles,  consistently  applied,  except as set
forth  in  the  Accounting  Methodology,  shall  fairly  present  the  financial
condition  and  operations  of the Business as of June 30, 2000,  and the fiscal
year then  ended,  and shall be  consistent  with the books and  records  of the
Business.

     At least 15 days prior to the Closing  Date,  Sellers shall deliver the Pro
Forma Closing  Balance Sheet to Buyer which shall be prepared in the same manner
as the Balance Sheet.

     5.20 BUSINESS INFORMATION.

          (a) In connection with any future sale by Constellation  Brands,  Inc.
     ("CBI") of its securities, the Sellers acknowledge that the underwriter may
     require that certain business  information  relating solely to the Business
     be included in the prospectus or offering  memorandum.  Therefore,  Sellers
     hereby  agree (i) to use during  the 24 months  following  the date  hereof
     commercially  reasonable efforts to provide CBI with, and to cooperate with
     CBI in compiling such necessary information, and (ii) that such information
     may be included in such  prospectus  or  offering  memorandum.  Buyer shall
     reimburse  Sellers  for all  Sellers'  out-of-pocket  costs  related to the
     performance of Sellers' obligation under this Section 5.20.

          (b) Incident to any prospectus or offering  memorandum  referred to in
     this Section 5.20, and subject to applicable  law, the Buyer will indemnify
     and hold harmless each Seller from and against any and all Damages to which
     they,  or any of them,  may become  subject under the  Securities  Act, the
     Exchange Act or other  federal or state  statutory  law or  regulation,  at

<PAGE>

     common  law or  otherwise,  insofar as such  Damages  arise out of the use,
     publication or distribution of the prospectus or offering memorandum.

                                   ARTICLE 6
                                   ---------

                        CONDITIONS TO BUYER'S OBLIGATIONS

     The  obligation  of Buyer to effect the  transactions  contemplated  herein
shall be subject to the satisfaction,  on or before the Closing Date, of each of
the following conditions:

     6.1 REPRESENTATIONS AND WARRANTIES TRUE. The representations and warranties
of Sellers contained herein, in the DISCLOSURE SCHEDULE, and in all certificates
and  other  documents  delivered  by  Sellers  to Buyer,  pursuant  hereto or in
connection with the transactions contemplated hereby, shall be true and correct,
and in each case shall be as of the date when made and as of the Closing Date as
though such  representations  and warranties were made at each such date (unless
otherwise  expressly  limited to a specific date or period),  provided that this
condition  shall be deemed waived by Buyer for purposes of this  condition  (but
shall remain a breach for purposes of indemnification in Section 9.2) so long as
any failures of such  representations and warranties to be true and correct have
not resulted or do not result in any adverse change in or effect on the Business
or the Assets involving or likely to involve, in the aggregate,  an amount equal
to or in excess of $3,000,000.

     6.2  PERFORMANCE.  Sellers  shall  have  performed  and  complied  with all
covenants,  agreements,  obligations,  terms  and  conditions  required  by this
Agreement to be performed or complied with by Sellers on or prior to the Closing
Date,  and all other terms and conditions to be satisfied by Sellers as provided
herein shall have been satisfied.

     6.3  CONSENTS.   All  consents  from  governmental   agencies  required  to
consummate the transactions  contemplated hereby shall have been obtained. Buyer
shall have  obtained all  government  licenses that are necessary to conduct the
winery  business  it intends  to conduct  with the  Assets,  including,  without
limitation, appropriate licenses and permits from the California Authorities and
the ATF and all permits,  registrations,  certificates,  licenses, approvals and
authorizations  required under any Environmental Law. In addition,  all consents
required by those Contracts set forth on Schedule 6.3 shall have been obtained.

     6.4 HSR; NO PROCEEDING OR LITIGATION.

          (a) Any applicable  waiting  periods under the HSR Act shall have been
     terminated or expired;

          (b) there shall not be any pending or threatened action or proceeding,
     whether administrative or judicial,  that shall have been brought on behalf
     of or shall otherwise involve any governmental agency or authority and that
     is directed toward  challenging,  restraining,  prohibiting or invalidating
     any of the transactions contemplated by this Agreement; and

          (c) there  shall not be any  pending  action  or  proceeding,  whether
     administrative  or  judicial,  that shall have been brought on behalf of or
     shall  otherwise  involve  any other  Person  and that is  directed  toward
     challenging,   restraining,   prohibiting  or   invalidating   any  of  the

<PAGE>

     transactions  contemplated  by  this  Agreement,   except  for  actions  or
     proceedings  as to which  Buyer  shall have  received a written  opinion of
     counsel for Buyer (which shall be subject  only to such  qualifications  as
     are customarily included in opinions of this type) to the effect that there
     is no material  likelihood  that such Person will prevail in such action or
     proceeding.

     6.5 OPINIONS OF COUNSEL. Buyer shall have received an opinion of counsel to
Sellers, dated as of the Closing Date, in the form of EXHIBIT E attached hereto.

     6.6 CERTIFICATES. Buyer shall have received a certificate dated the Closing
Date from each of the Sellers,  certifying (i) the incumbency of each officer of
each of the Sellers who has signed this Agreement or any instrument delivered in
connection with this Agreement, which certificate shall contain specimens of the
signatures of each of the officers whose incumbency is certified, and (ii) as to
the matters set forth in Sections 6.1 and 6.2.

     6.7 ADVERSE  CHANGES.  No material Adverse Effect shall have occurred since
the date of the Balance Sheet.

     6.8 FUNDS. The Commitments shall have been funded;  PROVIDED,  HOWEVER,  if
any failure to fund shall be due to a breach by Buyer of Buyer's representations
and warranties set forth in Section 3.5, the condition set forth in this Section
6.8 shall be deemed satisfied.

     6.9 TITLE TO REAL PROPERTY.

          (a) Buyer shall have  obtained  from Chicago Title Company (the "Title
     Company") a  commitment  to issue (the "Title  Commitment")  on the date of
     Closing,  upon the sole  condition of the payment by Buyer of its regularly
     scheduled  premium,  its latest  standard  ALTA Form (with the  "creditor's
     rights"  exclusion  deleted  (or  equivalent))   owner's  policy  of  title
     insurance (the "Title Policy"), insuring in an amount reasonably related to
     the appraised  value of Real Property and Leased  Property  obtained as the
     result of the appraisal set forth in Section 1.3(b),  that fee simple title
     in and to the Real Property and the Buyer's  leasehold  interests in and to
     the Leased Property will, as of Closing,  be vested of record in the Buyer,
     subject to no exceptions  other than those acceptable to Buyer, in its sole
     and absolute  discretion,  and those exceptions expressly approved by Buyer
     in Schedule 6.9.

          (b) The receipt by Buyer of  satisfactory  evidence,  in Buyer's  sole
     discretion,   that  there  are  no   governmental   regulations   or  legal
     restrictions  which would interfere with the current use of the Property by
     the  Buyer,  and that  Sellers  possess or have all  appurtenant  easements
     required to utilize  and  maintain  the  pipelines  over,  under or through
     adjoining  properties  between  4614 West  Turner Road and 5852 West Turner
     Road.

     6.10 FIRPTA CERTIFICATE.

     Buyer shall have received either (a) a certificate of non-foreign status as
described in Section 1445 of the Internal Revenue Code of 1986, as amended,  and
the  regulations  promulgated  thereunder  (collectively  the "Code")  from each
Seller who is not a non-resident alien individual, foreign corporation,  foreign
partnership, foreign trust or foreign estate, or (b) a certification,  signed by
the  Presidents of the Sellers (as provided in Section 1445 of the Code) stating
under  penalty of perjury that such Seller is not and during the last five years
has not been

<PAGE>

a United States Real  Property  Holding  Corporation  as such term is defined in
Section 897 of the Code.

     6.11  TRANSITIONAL   SERVICES.  At  the  Closing,  SVI  shall  execute  the
Transitional Services Agreement.

     6.12 LIST OF PAYABLE AND ACCOUNTS RECEIVABLE. At the Closing, Sellers shall
deliver to Buyer a list of all  accounts  payable of the Business as of the date
two days prior to the Closing Date and a list of all accounts  receivable  as of
the Closing Date. Two days after the Closing Date,  Sellers shall deliver a list
of all accounts payable and receivable of the Business to the Buyer.

                                   ARTICLE 7
                                   ---------

                       CONDITIONS TO SELLER'S OBLIGATIONS

     The obligation of Sellers to effect the  transactions  contemplated  hereby
shall be subject to the satisfaction,  on or before the Closing Date, of each of
the following conditions:

     7.1 REPRESENTATIONS AND WARRANTIES TRUE. The representations and warranties
of Buyer contained herein shall be in all material respects true and accurate as
of the date when made and as of the Closing Date as though such  representations
and warranties were made at each such date.

     7.2  PERFORMANCE.   Buyer  shall  have  performed  and  complied  with  all
covenants,  agreements,  obligations,  terms  and  conditions  required  by this
Agreement to be  performed or complied  with by Buyer on or prior to the Closing
Date and all other terms and  conditions  to be  satisfied  by Buyer as provided
herein shall have been satisfied.

     7.3 HSR; NO PROCEEDING OR LITIGATION.

          (a) Any applicable  waiting  periods under the HSR Act shall have been
     terminated or expired;

          (b) there shall not be any pending or threatened action or proceeding,
     whether administrative or judicial,  that shall have been brought on behalf
     of or shall otherwise involve any governmental agency or authority and that
     is directed toward  challenging,  restraining,  prohibiting or invalidating
     the transactions contemplated by this Agreement; and

          (c) there  shall not be any  pending  action  or  proceeding,  whether
     administrative  or  judicial,  that shall have been brought on behalf of or
     shall  otherwise  involve  any other  Person  and that is  directed  toward
     challenging,   restraining,   prohibiting  or   invalidating   any  of  the
     transactions  contemplated  by  this  Agreement,   except  for  actions  or
     proceedings  as to which Sellers  shall have received a written  opinion of
     counsel for Buyer (which shall be subject  only to such  qualifications  as
     are customarily included in opinions of this type) to the effect that there
     is no material  likelihood  that such Person will prevail in such action or
     proceeding.

<PAGE>

     7.4  CONSENTS.   All  consents  from  governmental   agencies  required  to
consummate the transactions contemplated hereby shall have been obtained.

     7.5 OPINIONS OF COUNSEL. Sellers shall have received the opinion of counsel
to Buyer,  dated as of the  Closing  Date,  in the form of EXHIBIT  F,  attached
hereto.

     7.6  CERTIFICATE.  Sellers  shall  have  received a  certificate  dated the
Closing Date from Buyer  certifying  (i) the incumbency of each officer of Buyer
who has signed this  Agreement or any  instrument  delivered in connection  with
this Agreement on behalf of Buyer,  which certificate shall contain specimens of
the signatures of each of the officers whose  incumbency is certified,  and (ii)
as to the matters set forth in Sections 7.1 and 7.2.

     7.7  TRANSITIONAL  SERVICES.  At  the  Closing,  Buyer  shall  execute  the
Transitional Services Agreement.

                                   ARTICLE 8
                                   ---------

                           TERMINATION AND ABANDONMENT

     8.1 METHODS OF  TERMINATION.  This  Agreement  may be  terminated,  and the
purchase and sale of Assets herein contemplated may be abandoned:

          (a) by mutual written consent of Sellers and Buyer;

          (b) by  Buyer on or  after  April  15,  2001,  if any of the  terms or
     conditions  to be met  or  performed  as  required  in  Article  6 of  this
     Agreement  shall not have been met or  performed,  or waived in  writing by
     Buyer on or prior to such date, provided such failure of a condition is not
     due to the action or inaction of Buyer in breach of the terms of Article 5;

          (c) by  Sellers  on or after  April 15,  2001,  if any of the terms or
     conditions  to be met  or  performed  as  required  in  Article  7 of  this
     Agreement  shall not have been met or  performed,  or waived in  writing by
     Sellers,  on or prior to such date, provided such failure of a condition is
     not due to the action or inaction  of one or both  Sellers in breach of the
     terms of Article 5; or

          (d) By  Buyer as  provided  in  Section  4.3 in the  event of  certain
     casualty affecting the Assets.

     8.2 PROCEDURE UPON TERMINATION. In the event of termination and abandonment
by Buyer or either  Sellers,  pursuant to Section 8.1,  written  notice  thereof
shall forthwith be given to the other party and this Agreement shall  terminate,
and the purchase and sale of the Assets  contemplated herein shall be abandoned,
without  further action by Buyer or Sellers.  If this Agreement is terminated as
provided herein:

          (a) each party  shall  return  all  documents,  work  papers and other
     material  of any other  party  relating  to the  transactions  contemplated
     hereby, whether obtained before or after the execution hereof, to the party
     furnishing the same; and

<PAGE>

          (b) notwithstanding  anything to the contrary contained herein, Buyer,
     upon  termination of this Agreement  pursuant to Section 8.1(b),  or 8.1(d)
     and Sellers, upon termination of this Agreement pursuant to Section 8.1(c),
     shall have the right to pursue any  remedies  available  to it at law or in
     equity.

                                   ARTICLE 9
                                   ---------

              SURVIVAL OF REPRESENTATIONS AND WARRANTIES; INDEMNITY

     9.1 SURVIVAL OF REPRESENTATIONS AND WARRANTIES AND COVENANTS.

          (a) The respective representations and warranties of Buyer and Sellers
     contained herein or in any certificate, document or other writing delivered
     pursuant  hereto or in  connection  herewith  shall not be deemed waived or
     otherwise  affected by any  investigation  made by the other party  hereto.
     Representations and warranties shall survive until the first anniversary of
     the Closing Date, except that the  representations and warranties set forth
     in Section 2.11, shall survive until the termination of applicable statutes
     of limitation;  provided,  however, that if, at any time on or prior to the
     first  anniversary of the Closing Date if either Buyer delivers to Sellers,
     or the Sellers deliver to the Buyer a written notice  indicating that Buyer
     has on the one hand, or Sellers have on the other hand, determined, in good
     faith, that there has been a breach of any such representation or warranty,
     then the obligation of Sellers or Buyer,  as  applicable,  to indemnify and
     hold harmless Buyer or Sellers, as applicable,  with respect to such breach
     shall survive until all indemnification claims relating to such breach have
     been fully and finally resolved.

          (b) The respective  covenants of Buyer and Sellers contained herein or
     in any certificate,  document or other writing delivered pursuant hereto or
     in connection  herewith shall not be deemed waived or otherwise affected by
     any investigation  made by the other party hereto. The covenants of Sellers
     and Buyer set forth in this Agreement  shall survive until fully  performed
     in accordance with this Agreement;  provided,  however, that nothing stated
     herein  shall  waive in any manner the right of Buyer or Sellers to enforce
     their respective  rights for any breach of a covenant by the other prior to
     such full performance.

     9.2 INDEMNIFICATION BY SELLERS.  Each of SVI and TRVG jointly and severally
shall indemnify  Buyer,  its affiliates and each of their  respective  officers,
directors,  employees  and agents (each a, "Buyer  Indemnified  Party") and hold
them  harmless  from  any  Damages  suffered  or  incurred  by  any  such  Buyer
Indemnified  Party to the  extent  arising  from (a) any breach by either of the
Sellers of any  representation or warranty contained in this Agreement or in any
certificate,  instrument  or other  document  delivered  pursuant  hereto to the
extent and during  the period  such  representation  or  warranty  survives  the
Closing,  (b) any  breach  of any  covenant  of such  Seller  contained  in this
Agreement, (c) waiver of compliance with bulk sales laws which may be applicable
to the  transactions  contemplated  hereby,  and (d) the  Retained  Liabilities,
PROVIDED, HOWEVER, that:

               (i) Sellers shall not have any  liability  under clause (a) above
          unless the aggregate of all Damages relating thereto for which Sellers
          would,  but for this proviso,  be

<PAGE>

          liable  exceeds on a cumulative  basis an amount  equal to  $3,000,000
          (the  "Threshold  Damages")  and then  only to the  extent of any such
          excess; and

               (ii) Sellers' aggregate liability under clause (a) above shall in
          no event exceed $100,000,000;  provided, however, that the limitations
          set  forth  in (i)  and  (ii)  shall  not  apply  to any  breach  of a
          representation  or warranty,  set forth  herein,  or in any  schedule,
          certificate,  instrument or other document  delivered pursuant hereto,
          by Sellers  when  Sellers had  Knowledge of such breach on or prior to
          Closing.

     Buyer  acknowledges  and agrees that, from and after the Closing,  its sole
and exclusive  remedy with respect to any and all claims relating to the subject
matter of this Agreement shall be pursuant to the indemnification provisions set
forth in this Section 9.2.

     Buyer further  acknowledges and agrees that, other than the representations
and warranties of Sellers specifically contained in this Agreement, there are no
representations  or  warranties  of Sellers  either  expressed  or implied  with
respect to the Business or Assets.

     9.3  INDEMNIFICATION  BY BUYER.  Buyer shall indemnify each of the Sellers,
their affiliates and each of their respective officers, directors, employees and
agents (each a, "SVI Indemnified Party") against and hold them harmless from any
Damage  suffered  or incurred  by any such SVI  Indemnified  Party to the extent
arising from (a) any breach of any representation or warranty of Buyer contained
in this Agreement or in any certificate,  instrument or other document delivered
pursuant  hereto or in  connection  herewith,  (b) any breach of any covenant of
Buyer contained in this Agreement  (including  without  limitation the covenants
regarding  the  conduct  of the  inspection  of  inventory  set forth in Section
1.4(c)),  (c) any assertion  against either of the Sellers of any obligations or
liabilities  of Buyer,  including any such  obligations  or  liabilities  in the
Contracts  assumed by Buyer under Section  1.1(b)(i),  (d) any claim against any
SVI Indemnified  Party relating to the use of the Assets or the operation of the
Business  by Buyer  after the Closing  Date,  other than a claim  related to the
Excluded Assets or Retained Liabilities, or for which Buyer is responsible under
this Section 9.3 or (e) any material damage to the Real Property or other Assets
caused by Buyer or its  representatives  or consultants during the course of due
diligence; provided, however, that:

               (i) Omitted.

               (ii) Buyer shall not have any  liability  under  clause (a) above
          unless the aggregate of all Damages  relating thereto for which Buyers
          would,  but for this proviso,  be liable exceeds on a cumulative basis
          an amount equal to the  Threshold  Damages and then only to the extent
          of any such excess; and

               (iii) Buyer's aggregate liability under clause (a) above shall in
          no event exceed an amount equal to $100,000,000.

     Sellers acknowledge and agree that, from and after the Closing,  their sole
and exclusive  remedy with respect to any and all claims relating to the subject
matter of this Agreement shall be pursuant to the indemnification provisions set
forth in this Section 9.3.

<PAGE>

     Sellers  acknowledge  and agree that,  other than the  representations  and
warranties  of Buyer  specifically  contained  in this  Agreement,  there are no
representations  or warranties of Buyer either expressed or implied with respect
to the transactions contemplated hereunder.

     9.4 TERMINATION OF  INDEMNIFICATION.  The obligations to indemnify and hold
harmless a party hereto, pursuant to Sections 9.2 and 9.3 shall terminate to the
extent the applicable representation or warranty or covenant terminates pursuant
to Section 9.1; PROVIDED,  HOWEVER,  that such obligations to indemnify and hold
harmless  shall not terminate with respect to any item as to which the person to
be indemnified or the related party hereto shall have,  before the expiration of
the applicable  period,  previously made a claim by delivering a notice (stating
in reasonable detail the basis of such claim) to the indemnifying party.

     9.5 PROCEDURES RELATING TO INDEMNIFICATION.  In order for a SVI Indemnified
Party or a Buyer  Indemnified  Party  (either,  an  "Indemnified  Party")  to be
entitled to any indemnification provided for under this Agreement in respect of,
arising  out of or  involving  a  claim  or  demand  made by any  person,  firm,
governmental  authority or corporation  against the Indemnified  Party (a "Third
Party Claim"),  such  Indemnified  Party must notify the  indemnifying  party in
writing,  and in reasonable  detail, of the Third Party Claim within 30 business
days after  receipt  by such  Indemnified  Party of written  notice of the Third
Party Claim; PROVIDED, HOWEVER, that failure to give such notification shall not
affect  the  indemnification   provided  hereunder  except  to  the  extent  the
indemnifying  party  shall  have been  actually  prejudiced  as a result of such
failure (except that the indemnifying party shall not be liable for any expenses
incurred  during the period in which the  Indemnified  Party failed to give such
notice).  Thereafter,  the Indemnified  Party shall deliver to the  indemnifying
party,  within ten business days after the Indemnified  Party's receipt thereof,
copies of all notices and documents  (including  court  papers)  received by the
Indemnified  Party relating to the Third Party Claim;  PROVIDED,  HOWEVER,  that
failure to give such notification shall not affect the indemnification  provided
hereunder except to the extent the  indemnifying  party shall have been actually
prejudiced as a result of such failure.

     If  a  Third  Party  Claim  is  made  against  an  Indemnified  Party,  the
indemnifying  party will be entitled to participate in the defense  thereof and,
if it so chooses,  to assume the defense  thereof with  counsel  selected by the
indemnifying party and reasonably  satisfactory to the Indemnified Party. Should
the  indemnifying  party so elect to assume the defense of a Third Party  Claim,
the  indemnifying  party will not be liable to the  Indemnified  Party for legal
expenses  subsequently  incurred by the Indemnified Party in connection with the
defense thereof. If the indemnifying party assumes such defense, the Indemnified
Party shall have the right to participate  in the defense  thereof and to employ
counsel,  at  its  own  expense,  separate  from  the  counsel  employed  by the
indemnifying  party,  it being  understood  that the  indemnifying  party  shall
control such defense.  The  indemnifying  party shall be liable for the fees and
expenses of counsel  employed  by the  Indemnified  Party for any period  during
which the  indemnifying  party has not assumed the defense  thereof  (other than
during  any period in which the  Indemnified  Party  shall  have  failed to give
notice of the Third Party Claim as provided above).  If the  indemnifying  party
chooses to defend or  prosecute  any Third Party Claim,  all the parties  hereto
shall cooperate in the defense or prosecution  thereof.  Such cooperation  shall
include the retention and (upon the indemnifying  party's request) the provision
to the  indemnifying  party of  records  and  information  which are  reasonably
relevant to such Third Party Claim, and making employees available on a mutually
convenient  basis to  provide  additional  information  and

<PAGE>

explanation of any material provided hereunder.  Whether or not the indemnifying
party shall have  assumed the defense of a Third Party  Claim,  the  Indemnified
Party shall not admit any  liability  with respect to, or settle,  compromise or
discharge, such Third Party Claim without the indemnifying party's prior written
consent (which consent shall not be unreasonably withheld).

     9.6 SELLERS' REPRESENTATIVE.

          (a) Each Seller hereby  irrevocably  authorizes,  directs and appoints
     Richard  Cuneo  (the  "Representative")  to act as the sole  and  exclusive
     agent,   attorney-in-fact  and  representative  of  such  Seller,  Seller's
     representatives   and  successors,   assigns  and  designees  (the  "Seller
     Parties")  to (i)  take  any  and  all  actions  (including  executing  and
     delivering any documents), incurring any costs and expenses for the account
     of the Seller  Parties and making any and all  determinations  which may be
     required or permitted to be taken by them in connection with this Article 9
     or the Escrow Agreement;  (ii) exercise such rights, power and authority as
     are  authorized,  delegated  and granted to the  Representative  under this
     Agreement;  and (iii)  exercise  such  rights,  power and  authority as are
     incidental  to  the   foregoing.   It  shall  be  the   obligation  of  the
     Representative  to inform each Seller Party of all notices received and all
     actions, decisions, notices and exercises of any rights, power or authority
     proposed  to be  done,  given or  taken  by him,  and he shall  act only as
     directed  jointly by those Seller Parties holding a majority in interest in
     the Escrow;  provided,  that Buyer shall have no obligation to confirm that
     the Representative  has taken all necessary action or received  appropriate
     direction.  Any actions,  exercises of rights,  power or authority  and any
     decisions or determinations made by the Representative in good faith and in
     accordance  with this Section  9.6(a) shall be absolutely  and  irrevocably
     binding on each Seller Party as if each Seller Party  personally  had taken
     such  action,  exercised  such  rights,  power or  authority  or made  such
     decision or determination in such Seller Party's individual capacity.

          (b) With respect to the matters  covered by or related to this Section
     9 and the Escrow Agreement,  (i) each Seller Party irrevocably relinquishes
     such Seller Party's right to act  independently  and other than through the
     Representative  with respect to such subject matter (except with respect to
     the right to vote with the other Seller  Parties as to the direction of the
     Representative as to any action, decision,  notice or exercise of rights on
     behalf of the Seller  Parties,  and with respect to the removal  and/or the
     appointment of a successor Representative),  and (ii) no Seller Party shall
     have any right to  institute  any suit,  action or  proceeding  against the
     Buyer or the Escrow  Agent with  respect to any such matter  (except in the
     case of  fraud  on the  part of the  Buyer or in the case of fraud or gross
     negligence  on  the  part  of the  Escrow  Agent),  any  such  right  being
     irrevocably  and  exclusively  delegated  to  the  Representative.  Without
     limiting the generality of the foregoing, any notice hereunder delivered to
     Buyer by  Sellers  other than  through  the  Representative  shall be of no
     effect,  and each notice delivered by Buyer or any other Buyer  Indemnified
     Party to the Representative  shall be effective as against each such Seller
     Party.

          (c) The  Representative  may resign at any time upon  thirty (30) days
     notice by submitting a written  resignation to the Seller  Parties,  with a
     copy to the Buyer at their  addresses  as set forth in  Section  10.5.  The
     Representative  may be removed any time upon notice of action taken jointly
     by those Seller  Parties  holding a majority in interest in the Escrow.  In
     the  event  of  the  removal,  death,  physical  or  mental  incapacity  or
     resignation of the  Representative,  the Seller

<PAGE>

     parties shall  promptly (and in any event within thirty (30) days of notice
     of such event) appoint a successor Representative.

          (d) Richard  Cuneo  hereby  acknowledges  and  accepts  the  foregoing
     authorization  and  appointment  and agrees to serve as  Representative  in
     accordance with this Agreement and the Escrow Agreement.

     Nothing  in this  Agreement  is  intended  to impose,  and  nothing in this
Agreement  shall  be  interpreted  as  imposing,  upon  the  Representative,  as
Representative,   any  personal  liability,  personal  economic  obligation,  or
personal  guarantee in favor of any party to this  Agreement or any third party.
The Sellers agree to severally  (in  proportion  to their  respective  ownership
interests in the Escrow) indemnify and hold the Representative  harmless against
any loss,  liability or expense  incurred  without  gross  negligence or willful
misconduct  on the part of the  Representative,  arising out of or in connection
with  carrying  out his duties  hereunder,  including  the costs and expenses of
defending himself against any claim of liability in connection with the exercise
or  performance  of any of their  powers  or  duties  hereunder  (including  the
reasonable fees, expenses and disbursements of their counsel(s)).

                                   ARTICLE 10
                                   ----------

                            MISCELLANEOUS PROVISIONS

     10.1  ARBITRATION.  Any  controversy or claim arising out of or relating to
this Agreement,  the breach thereof,  or the transactions  contemplated  hereby,
except as provided  for in Section 1.4,  shall be solely and finally  settled by
binding  arbitration  in San Francisco,  California in accordance  with the then
prevailing Commercial Arbitration Rules of the American Arbitration Association.
By written  notice to the other  party,  either party may demand that a disputed
matter be  submitted  to  arbitration.  In the demand  notice,  the party  shall
specify the nature of the dispute.  Within twenty (20) days of the notice,  each
party shall  nominate an  arbitrator.  Within thirty (30) days of the nomination
and appointment of the two arbitrators, the two arbitrators shall select a third
arbitrator,  and if they fail to do so, a neutral  arbitrator shall be chosen in
accordance  with the Commercial  Arbitration  Rules of the American  Arbitration
Association.  Judgment  upon the  award  rendered  by the  arbitrator(s)  may be
entered in any court having jurisdiction thereof.

     10.2 AMENDMENT AND MODIFICATION.  Subject to applicable law, this Agreement
may be amended or supplemented only by written agreement of Buyer and Sellers at
any time prior to the Closing  Date with  respect to any of the terms  contained
herein.

     10.3 WAIVER OF  COMPLIANCE.  Any failure of Sellers or Buyer to comply with
any obligation,  covenant, agreement or condition herein may be expressly waived
in writing by the other party,  but such waiver or failure to insist upon strict
compliance  with such  obligation,  covenant,  agreement or condition  shall not
operate as a waiver of, or an estoppel with respect to, any  subsequent or other
failure.

     10.4  EXPENSES;   ATTORNEYS'   FEES.   Whether  or  not  the   transactions
contemplated  by  this  Agreement  are  consummated,  and  except  as  otherwise
expressly provided in this Agreement,

<PAGE>

each  party  shall  pay its own  expenses  incurred  by it or on its  behalf  in
connection  with  this  Agreement  or  any  transaction   contemplated  by  this
Agreement.  If any action is brought for the  enforcement  of this  Agreement or
because  of  an  alleged  dispute,   breach,  default  or  misrepresentation  in
connection  with any of the  provisions  of this  Agreement,  the  successful or
prevailing party as determined by the arbitrator(s) shall be entitled to recover
reasonable  attorneys'  fees  and  other  costs  incurred  in  arbitration,   as
determined by the  arbitrator(s),  in addition to any other relief to which such
party may be entitled.

     10.5  NOTICES.  All  notices,  requests,  demands and other  communications
required or permitted hereunder shall be in writing or by telex or telecopy and,
unless otherwise  expressly  provided herein,  shall be deemed to have been duly
given and received when delivered by hand, against receipt, or, if mailed, three
(3) business days after deposit in the mail, with postage prepaid for registered
or  certified  mail,  return  receipt  requested,  or,  in the  case of telex or
telecopy  notice,  when  sent,  if answer  back or  confirmation  received,  and
addressed to the party at its address set forth  immediately  below,  or at such
other address as the party shall have  furnished the other parties in accordance
with this Section.

          (a) If to either of the Sellers, to:

                           Sebastiani Vineyards, Inc.
                           389 Fourth Street East
                           Sonoma, CA  95476-5790
                           Fax:  (707) 933-3371

                           Attention: Don Sebastiani

                           with a copy to:

                           Sebastiani Vineyards, Inc.
                           389 Fourth Street East
                           Sonoma, CA  95476-5790
                           Fax:  (707) 933-3367

                           Attention: Mary Ann Sebastiani Cuneo

                           with a copy to:

                           Sebastiani Vineyards, Inc.
                           389 Fourth Street East
                           Sonoma, CA  95476-5790
                           Fax:  (707) 933-3367

                           Attention: Richard Cuneo

<PAGE>

                           with a copy to:

                           Morrison & Foerster, LLP
                           425 Market Street
                           San Francisco, CA 94105
                           Fax:  (415) 268-7522

                           Attention: Robert S. Townsend, Esq.

          (b) If to Buyer, to:

                           Canandaigua Wine Company, Inc.
                           116 Buffalo Street
                           Canandaigua, New York  14424
                           Fax: (716) 396-8870

                           Attention: Office of General Counsel

                           with a copy to:

                           Nixon Peabody, LLP
                           Clinton Square
                           P.O. Box 31051
                           Rochester, New York  14603-1051
                           Fax: (716) 263-1600

                           Attention: James A. Locke III, Esq.

or to such other  persons or addresses as Buyer or the Sellers  shall furnish to
the other in writing.

     10.6 ASSIGNMENT.  This Agreement and all of the provisions  hereof shall be
binding  upon and shall  inure to the  benefit of the  parties  hereto and their
respective  successors  and  permitted  assigns.  Buyer  shall have the right to
assign  this  Agreement  and all or any part of  Buyer's  rights,  interests  or
obligations  hereunder to any Affiliate of Buyer,  provided that Buyer shall not
be relieved of its obligations  under this Agreement in the event such Affiliate
fails to  perform.  Otherwise,  neither  this  Agreement  nor any of the rights,
interests or obligations hereunder shall be assigned by Buyer or Sellers without
the prior written consent of the other party.

     10.7 GOVERNING  LAW. This  Agreement is to be construed in accordance  with
and governed by the internal  laws of the State of  California  (as permitted by
Section  1646.5  of  the  California  Civil  Code  (or  any  similar   successor
provision)) without giving effect to any choice of law rule that would cause the
application of the laws of any jurisdiction  other than the internal laws of the
State of California to the rights and duties of the parties.

<PAGE>

     10.8 COUNTERPARTS.  This Agreement may be executed simultaneously in two or
more counterparts,  each of which shall be deemed an original,  but all of which
together shall constitute one and the same instrument.

     10.9 ENTIRE  AGREEMENT.  This  Agreement,  including the Exhibits  attached
hereto, the DISCLOSURE SCHEDULE and the other documents referred to herein which
form a part hereof, excluding the Confidentiality  Agreement between the parties
dated May 12, 2000 (the "Confidentiality Agreement") embody the entire agreement
and  understanding  of Buyer  and  Sellers  in  respect  of the  subject  matter
contained herein and therein. There are no restrictions,  promises,  warranties,
covenants,  or undertakings  other than those expressly set forth or referred to
herein  or  therein.   This  Agreement   supersedes  all  prior  agreements  and
understandings  between Buyer and Sellers including,  without limitation,  those
set forth in the Confidentiality Agreement.

     10.10 THIRD PARTY  BENEFICIARIES.  Nothing in this Agreement is intended to
confer upon any person other than the parties  hereto and their  successors  and
permitted assigns any rights or remedies under or by reason of this Agreement.

     10.11 CERTAIN DEFINITIONS.

     "Accounting  Firm"  shall  have the  meaning  set forth in  Section  1.4(a)
hereof.

     "Accounting  Methodology"  shall mean the  accounting  principles,  reserve
methodology and procedures described on Schedule 1.4(a) hereto.

     "Adjusted  Closing  Purchase  Price"  shall have the  meaning  set forth in
Section 1.4(b) hereof.

     "Adverse Effect" means any change in or effect on the business, operations,
properties or financial  condition of the Business or the Assets that is adverse
to such  business,  operations,  properties  or financial  condition  other than
changes  or  effects  arising  from  the  execution  of  this   Agreement,   any
announcement  of  this   Agreement,   the   consummation  of  the   transactions
contemplated hereby or from general economic, market or industry conditions.

     "Affiliate"  has the meaning  assigned  thereto in Rule 405,  as  currently
promulgated under the Securities Act of 1933, as amended.

     "Agreement" means this Purchase Agreement dated as of January 30, 2000.

     "Approvals" shall have the meaning set forth in Section 2.17 hereof.

     "Appurtenances"  shall have the  meaning  set forth in  Section  1.1(a)(ii)
hereof.

     "Assets" shall have the meaning set forth in Section 1.1(a) hereof.

     "Assumed  Liabilities"  shall have the meaning set forth in Section  1.1(b)
hereof.

     "ATF" shall have the meaning set forth in Section 3.4 hereof.

<PAGE>

     "Balance Sheet" shall have the meaning set forth in Section 2.4 hereof.

     "Business"  shall  have  the  meaning  set  forth in the  recitals  of this
Agreement.

     "Buyer" shall have the meaning set forth in the recitals of this Agreement.

     "Buyer  Indemnified  Party" shall have the meaning set forth in Section 9.2
hereof.

     "California  Authorities"  shall have the  meaning set forth in Section 3.4
hereof.

     "Closing" shall have the meaning set forth in Section 1.3(a) hereof.

     "Closing  Balance Sheet" shall have the meaning set forth in Section 1.4(a)
hereof.

     "Closing Date" shall have the meaning set forth in Section 1.3(a) hereof.

     "Closing  Purchase  Price"  shall  have the  meaning  set forth in  Section
1.3(a)(i)(A) hereof.

     "COBRA" shall have the meaning set forth in Section 2.13(d) hereof.

     "Code" means the Internal Revenue Code of 1986, as amended.

     "Company Plan" shall have the meaning set forth in Section 2.13(a) hereof.

     "Confidential  Information  Memorandum" shall have the meaning set forth in
Section 2.20(b).

     "Confidentiality  Agreement"  shall have the  meaning  set forth in Section
10.9 hereof.

     "Contracts" shall have the meaning set forth in Section 1.1(a)(v) hereof.

     "Damages" means the amount of any loss, damage, injury,  liability,  claim,
fee  (including  any legal fee,  expert fee,  accounting  fee or  advisory  fee)
demand, settlement, judgment, award, fine, penalty, tax, charge or cost.

     "Disclosure  Schedule  Update"  shall have the meaning set forth in Section
5.8(b) hereof.

     "Disclosure Schedule" shall have the meaning set forth in Article 2 hereof.

     "Distributors" shall mean the distributors,  wholesalers,  and brokers used
by the Sellers in the Business, whether in the United States or elsewhere.

     "DOJ" shall have the meaning set forth in Section 5.2(b) hereof.

     "Employee" shall have the meaning set forth in Section 2.12(a) hereof.

     "Employee  Welfare Plan" shall mean any employee  welfare  benefit plan, as
defined in Section 3(1) of ERISA, whether or not terminated,  including, but not
limited to, any severance

<PAGE>

agreement or plan,  any  material  fringe  benefit plan or program,  any medical
plan, life insurance plan, short-term or long-term disability plan, dental plan,
personnel  policy,  vacation time,  holiday pay, bonus programs,  service award,
moving  expense  reimbursement   program,   tool  allowance,   safety  equipment
allowance,  and sick  leave,  which any Seller or any  Member of the  Controlled
Group  has  at  any  time  within  the  past  six  (6)  years  maintained,  made
contributions  to, obligated itself to make  contributions  to, or had any other
liability with respect to.

     "Environmental Law" shall mean all Legal Requirements concerning protection
of the environment and/or human health and/or regulating  Hazardous  Substances,
including, but not limited to, the following, each as amended: the Comprehensive
Environmental Response, Compensation and Liability Act, 42 U.S.C. ss.ss. 9601 et
seq.; the Resource Conservation and Recovery Act, 42 U.S.C. ss.ss. 6901 et seq.;
the Federal Water Pollution Control Act, 33 U.S.C. ss.ss.1251 et seq.; the Clean
Air Act, 42 U.S.C. ss.ss. 7401 et seq.; the Hazardous  Materials  Transportation
Act, 49 U.S.C. ss.ss.1471 et seq.; Toxic Substances Control Act, 15 U.S.C.ss.ss.
2601 et seq.; Refuse Act, 33 U.S.C. ss.ss. 407 et seq.; Safe Drinking Water Act,
42 U.S.C. ss.ss. 300(f) et seq.; Emergency Planning and Community  Right-To-Know
Act, 42  U.S.C. ss.ss.  11001 et seq.;  Occupational  Safety and Health  Act, 29
U.S.C. ss.ss. 65 et seq. to the extent it includes the emission of any Hazardous
Substance  and includes any Hazardous  Substance for which hazard  communication
standards have been  established;  California  Hazardous  Substance Account Act,
California  Health & Safety  Code ss.ss.  25300  et  seq.;  California  Asbestos
Notification  Laws,  California  Health &  Safety  Code ss.ss.  25915  et  seq.;
California  Hazardous Waste Control Law, California  Health & Safety Code ss.ss.
22100 et  seq.;  California  Hazardous  Materials  Release  Response  Plans  and
Inventory Act, California Health & Safety Code ss.ss. 25500 et seq.;  California
Clean Air Act, California Health & Safety Code ss.ss. 39608 et seq.;  California
Toxic Pits Cleanup Act,  California  Health & Safety Code ss.ss.  25208 et seq.;
California Pipeline Safety Act, California Government Code ss.ss. 51010 et seq.;
California Toxic Air Contaminants  Law,  California  Health & Safety Code ss.ss.
39650 et seq.;  California  Porter-Cologne  Water Quality Act,  California Water
Code ss.ss.  13000  et  seq.;  California  Toxic  Injection  Well  Control  Act,
California Health & Safety Code ss.ss.25159.10 et seq.; California Safe Drinking
Water  and  Toxic   Enforcement  Act  of  1986,   California   Health  &  Safety
Code ss.ss. 25249.5 et seq.; California Underground Storage Tank Act, California
Health & Safety Code ss.ss. 25280 et seq.; California  Occupational  Carcinogens
Control Act,  California Labor Code ss.ss.  9000 et seq.; any other laws of this
nature  applicable  to  the  Assets  or  operation  of  the  Business;  and  all
regulations promulgated under any of the foregoing.

     "Equipment" shall have the meaning set forth in Section 1.1(a)(iv) hereof.

     "ERISA"  means the Employee  Retirement  Income  Security  Act of 1974,  as
amended.

     "Excluded  Assets" means those Assets described in Schedule 1.1(c) attached
hereto.

     "Final  Closing  Balance  Sheet"  means the balance  sheet  prepared by the
Accounting Firm for the purposes provided in Section 1.4.

     "FTC" shall have the meaning set forth in Section 5.2(b) hereof.

<PAGE>

     "Hazardous Substance" shall mean any substance, material, chemical or waste
that is listed,  or contains material amounts of one or more components that are
defined,  designated,  classified,  considered or listed, as hazardous,  acutely
hazardous,  toxic,  radioactive,  or dangerous under any Legal Requirements,  as
well as any "solid  waste",  industrial  waste,  industrial  wastewater  sewage,
asbestos  or  asbestos  containing  material,  petroleum,  petroleum  product or
by-product, crude oil or any fraction thereof, natural gas, natural gas liquids,
liquefied  natural  gas,  synthetic  gas  useable  as fuel,  or  polychlorinated
biphenyls (PCBs).

     "HSR Act" means the Hart-Scott-Rodino  Antitrust  Improvements Act of 1976,
as amended.

     "Improvements"  shall have the  meaning  set forth in  Section  1.1(a)(iii)
hereof.

     "Indemnified Party" shall have the meaning set forth in Section 9.5 hereof.

     "Inventory" shall have the meaning set forth in Section 1.1(a)(vii) hereof.

     "Inventory  Adjustment"  shall have the  meaning  set forth in Section  1.5
hereof.

     "Knowledge" of either Seller means the actual  knowledge,  after a diligent
investigation of the type reasonably  required to impart actual knowledge of the
facts in questions,  of any of Don Sebastiani,  Mary Ann Sebastiani  Cuneo,  Sam
Sebastiani,  Richard Cuneo, Richard Conley, Paul Bergna, James O'Connor,  Robert
Carroll, Emma Swain, and Victoria Bonnington.

     "Legal  Requirement"  means all  federal,  state,  local,  municipal,  law,
statute,  ordinance, code, rule, regulation,  requirement,  specification of any
federal, state, county, municipal or local governmental body that is in force.

     "Listed  Employee"  shall have that  meaning  set forth in  Section  5.3(a)
hereof.

     "Loaded Sales to Distributors" shall have that meaning set forth in Section
4.1(g).

     "Member of the Controlled  Group" means each trade or business,  whether or
not incorporated,  that would be treated as a single employer with either Seller
under Section 4001 of ERISA or Sections 414(b), (c), (m) or (o) of the Code.

     "Minimum Damages" shall have the meaning set forth in Section 6.1 hereof.

     "Multiemployer  Plan" shall have the  meaning set forth in Section  2.13(a)
hereof.

     "Notice of Disagreement" shall have the meaning set forth in Section 1.4(a)
hereof.

     "Offer to  Purchase"  shall  have the  meaning  set forth in  Section  10.9
hereof.

     "Partnership  Agreement"  means the  partnership  agreement dated as of the
27th of April, 1994, by and between MAJiC Vice, Inc., a California  corporation,
Lucinco,  Inc.,  a  California  corporation,  and  E.T.K.,  Inc.,  a  California
corporation.

     "Permitted  Liens"  shall have the meaning set forth in Section  2.7(b)(ii)
hereof.

<PAGE>

     "Person"  shall include any  individual,  firm,  corporation,  partnership,
government,   governmental  agency  or  other  entity,   whether  acting  in  an
individual, a fiduciary or any other capacity.

     "Pro Forma  Closing  Balance  Sheet"  shall mean the  balance  sheet of the
Business  estimated as of February 28, 2001,  prepared by Sellers in good faith,
and delivered to Buyer fifteen (15) days prior to the Closing Date.

     "Real  Property"  shall have the  meaning  set forth in  Section  1.1(a)(i)
hereof.

     "Receivables"  shall have the  meaning  set forth in  Section  1.1(a)(viii)
hereof.

     "Retained  Liabilities"  shall have the meaning set forth in Section 1.1(a)
hereof.

     "Security Interests" means all deeds of trust,  mortgages,  pledges, liens,
security interests,  encumbrances,  restrictions,  charges, limitations, adverse
claims, or other agreements relating to disposition of any kind.

     "Sellers" means SVI and TRVG.

     "Survival Period" shall have that meaning set forth in Section 9.1 hereof.

     "SVI" means Sebastiani Vineyards, Inc.

     "SVI  Indemnified  Party"  shall have the  meaning set forth in Section 9.3
hereof.

     "Third Party Claim" shall have the meaning set forth in Section 9.5 hereof.

     "Threshold  Damages" shall have the meaning set forth in Section 9.2(a)( i)
hereof.

     "Total Shareholders Equity" shall be that accounting entry bearing the same
title on the Pro Forma Balance Sheet,  the Closing  Balance Sheet,  or the Final
Closing Balance Sheet, as the case may be.

     "Transferred  Employee"  shall have the meaning set forth in Section 5.3(a)
hereof.

     "TRV  Brandnames"  shall have the meaning  set forth in Section  1.1(a)(vi)
hereof.

     "TRV  Trademarks"  shall have the meaning  set forth in Section  1.1(a)(vi)
hereof.

     "TRVG" means Tuolomne River Vintners Group.

     "Unavailable Employees" shall have the meaning set forth in Section 5.3(a).

<PAGE>

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

                        CANANDAIGUA WINE COMPANY, INC., a New York corporation



                        By: /s/ Jon Moramarco
                            -------------------------------------------------
                            Jon Moramarco, President


                        SEBASTIANI VINEYARDS, INC., a Delaware corporation



                        By: /s/ Don Sebastiani
                            -------------------------------------------------
                            Don Sebastiani, Chief Executive Officer


                        TUOLOMNE RIVER VINTNERS GROUP, a California partnership

                        By: MAJiC Vine, Inc., a California corporation,
                            General Partner


                        By: /s/ Mary Ann Sebastiani Cuneo
                            -------------------------------------------------
                            Mary Ann Sebastiani Cuneo, President


                        By: Lucinco, Inc., a California corporation,
                            General Partner


                        By: /s/ Sam Sebastiani
                            -------------------------------------------------
                            Sam Sebastiani, President


                        By: E.T.K. Inc., a California corporation,
                            General Partner


                        By: /s/ Don A. Sebastiani
                            -------------------------------------------------
                            Don A. Sebastiani, President

<PAGE>

The  undersigned  agrees to be bound by the  obligations  and duties of Sellers'
Representative set forth in Section 9.6.


/s/ Richard Cuneo
-----------------
Richard Cuneo