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                          THE CHALONE WINE GROUP, LTD.






                           FIRST AMENDMENT AND CONSENT

                           Dated as of August 23, 2002


                                       To


                  AMENDED AND RESTATED NOTE PURCHASE AGREEMENT
                           Dated as of April 19, 2002





 Re: $5,000,000 Adjustable Rate Senior Secured Notes, Series A, Due
   September 15, 2010
 $10,000,000 Adjustable Rate Senior Secured Notes, Series B, Due
   September 15, 2010
 $15,000,000 Adjustable Rate Senior Secured Notes, Series C, Due
   September 15, 2010



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<PAGE>

   FIRST AMENDMENT AND CONSENT TO AMENDED AND RESTATED NOTE PURCHASE AGREEMENT

                  This First  Amendment  and Consent dated as of August 23, 2002
(the or this  "FIRST  AMENDMENT")  to the  Amended and  Restated  Note  Purchase
Agreement  dated as of April 19, 2002 is among The Chalone  Wine Group,  Ltd., a
California corporation ("COMPANY"), the Subsidiary Guarantors (as defined below)
and Farm Credit Services of America, PCA and AgStar Financial Services,  PCA DBA
Farm Credit Services Commercial Finance Group (collectively, the "NOTEHOLDERS").

                                    RECITALS:

                  A. The Company and the  Noteholders  have  heretofore  entered
into that certain Amended and Restated Note Purchase Agreement dated as of April
19,  2002  (the  "NOTE  AGREEMENT").  The  Company  has  heretofore  issued  its
$5,000,000  Adjustable  Rate Senior Secured  Notes,  Series A, Due September 15,
2010 bearing PPN 157639 B* 5 (the "SERIES A NOTES"),  dated April 19, 2002,  its
$10,000,000  Adjustable  Rate Senior Secured Notes,  Series B, Due September 15,
2010  bearing PPN 157639 B@ 3 (the  "SERIES B NOTES"),  dated April 19, 2002 and
its $15,000,000  Adjustable  Rate Senior Secured Notes,  Series C, Due September
15, 2010 bearing PPN 157639 B# 1 and dated April 19, 2002 (the "SERIES C NOTES";
the Series A Notes,  the  Series B Notes and the Series C Notes are  hereinafter
collectively  referred to as the "NOTES")  pursuant to the Note  Agreement.  The
Noteholders  are the  holders  of  100% of the  principal  amount  of the  Notes
presently outstanding.

                  B. Edna Valley  Vineyard,  a  California  general  partnership
("EDNA VALLEY"),  Canoe Ridge Vineyard L.L.C.,  a Washington  limited  liability
company  ("CANOE  RIDGE"),  Staton Hills Winery  Company  Limited,  a Washington
corporation ("STATON HILLS"), Canoe Ridge Winery, Inc., a Washington corporation
("CANOE  RIDGE  WINERY")  and SHW Equity Co., a Washington  corporation  ("SHW")
(Edna  Valley,  Canoe  Ridge,  Staton  Hills,  Canoe  Ridge  Winery  and SHW are
hereinafter  collectively  referred  to as  the  "SUBSIDIARY  Guarantors")  have
heretofore  entered into those certain  Subsidiary  Guarantee  Agreements,  each
dated as of April 19, 2002 (collectively, the "SUBSIDIARY GUARANTEE AGREEMENTS")
under and pursuant to which each of the  Subsidiary  Guarantors  guaranteed  the
payment of the Notes and the performance by the Company of its obligations under
the Note Agreement.

                  C. The Company  desires to consummate  the Winery  Acquisition
(as  defined   herein)  and  in  connection   therewith  issue  its  Convertible
Subordinated  Promissory Notes dated August 23, 2002 (the "SUBORDINATED  NOTES")
to the  sellers,  Les  Domaines  Baron de  Rothschild  (Lafite)  ("DBR") and SFI
Intermediate  Limited ("SFI",  DBR and SFI are  collectively  referred to as the
"SELLERS")  and the  Company  and the  Noteholders  now desire to consent to the
Winery  Acquisition  and to amend the Note  Agreement as of August 23, 2002 (the
"EFFECTIVE  DATE") in the respects,  but only in the respects,  hereinafter  set
forth.  The  Subsidiary   Guarantors  now  desire  to  affirm  their  respective
obligations under the Subsidiary Guarantee Agreements.

                  D. All  requirements  of law have been fully complied with and
all other acts and things necessary to make this First Amendment a valid,  legal
and binding instrument  according to its terms for the purposes herein expressed
have been done or performed.


                                      -2-

<PAGE>


                  NOW, THEREFORE, upon the full and complete satisfaction of the
conditions  precedent to the  effectiveness of this First Amendment set forth in
SS.6 hereof,  the Company,  the Subsidiary  Guarantors and the Noteholders,  for
good and valuable  consideration  the receipt and sufficiency of which is hereby
acknowledged, do hereby agree as follows:


     SECTION 1    DEFINITIONS; REFERENCES. Unless otherwise specifically defined
herein,  each term used herein which is defined in the Note Agreement shall have
the  meaning  assigned to such term in the Note  Agreement.  Each  reference  to
"hereof",  "hereunder",  "herein" and "hereby" and each other similar  reference
and  each  reference  to  "this  Agreement"  and each  other  similar  reference
contained  in the Note  Agreement  shall from and after the date hereof refer to
the Note Agreement as amended hereby.

     SECTION 2    AMENDMENTS.


     (a) Schedule B to the Note Agreement  shall be and is hereby amended by the
following:

          (i) A new defined term "SHAREHOLDER  SUBORDINATED DEBT" is inserted in
     proper alphabetical order as follows:

                  "SHAREHOLDER  SUBORDINATED DEBT" means the Indebtedness of the
                  Company evidenced by (i) that certain Convertible Subordinated
                  Promissory  Note dated August 23, 2002, made by the Company in
                  favor of Les Domaines Baron de Rothschild (Lafite) ("DBR"), in
                  the  original  principal  amount of  $8,250,000  and (ii) that
                  certain Convertible  Subordinated Promissory Note dated August
                  23,  2002,  made by the  Company in favor of SFI  Intermediate
                  Limited   ("SFI"),   in  the  original   principal  amount  of
                  $2,750,000,  which convertible  subordinated  promissory notes
                  were   issued  by  the  Company   pursuant  to  that   certain
                  Convertible  Note  Purchase  Agreement  dated as of August 23,
                  2002,  among the  Company,  DBR and SFI,  and the  proceeds of
                  which  shall be used by the  Company  to  complete  the Winery
                  Acquisition and for capital expenditures  permitted under this
                  Agreement."

          (ii) A new defined  term  "WINERY  ACQUISITION"  is inserted in proper
     alphabetical order as follows:

                  ""WINERY  ACQUISITION" means the acquisition by the Company of
                  all of the capital stock, or all or  substantially  all of the
                  assets,  of Napa Beaucanon Company for a purchase price not to
                  exceed $9,500,000."

          (iii) The  definition  of  "Subordinated  Debt" is hereby  amended  by
     deleting the  reference to "Section  10.04(a)(viii)"  and replacing it with
     "Section 10.5(k)."

                                      -3-

<PAGE>

          (iv) The  definition of  "Subsidiary  Guarantor" is hereby  amended by
     adding ", Canoe Ridge  Winery,  Inc." after the words  "Staton Hills Winery
     Company Ltd." therein.

     (b) Section 9.8 of the Note  Agreement is amended by deleting the reference
to "Section __" and replacing it with "Section 8.7(c)."

     (c)  Section  10.4 of the Note  Agreement  is  amended by  inserting  after
subsection (e) the following new sentence:

                  "The  financial  covenants  set forth in  subsections  10.4(a)
                  (captioned  "Leverage Ratio"),  10.4(c)  (captioned  "Interest
                  Coverage Ratio") and 10.4(d) (captioned "Fixed Charge Coverage
                  Ratio")  shall be  calculated  without  giving  effect  to the
                  principal amount of the Shareholder  Subordinated  Debt or any
                  interest payable thereunder."

     (d)  Subsection  10.5(k) of the Note  Agreement  is amended and restated as
follows:

                  "(k)  (i)  until  August  23,  2004,  Indebtedness  under  the
                  Shareholder Subordinated Debt in an aggregate principal amount
                  not  to  exceed  $11,000,000;   and  (ii)  other  Indebtedness
                  subordinated to the  Obligations on terms  satisfactory to the
                  Required  Holders  in an  aggregate  principal  amount  not to
                  exceed $2,000,000 at any time outstanding; and"

     (e) Section  11(n) of the Note  Agreement  is amended by deleting the words
"[intentionally  omitted]"  and  replacing  it with "the  outstanding  principal
amount and all accrued interest on the Shareholder  Subordinated  Debt shall not
have been  extinguished and converted into shares of common stock of the Company
pursuant to a non-cash transaction on or before August 23, 2004."

     SECTION 3    REPRESENTATIONS AND  WARRANTIES OF THE COMPANY.  To induce the
Noteholders to execute and deliver this First Amendment  (which  representations
shall survive the execution and delivery of this First  Amendment),  each of the
Company and the Subsidiary  Guarantors  represent and warrant to the Noteholders
that:

     (a)  since  June 30,  2002,  there  has been no  change  in the  condition,
financial  or  otherwise,  of the Company and its  Subsidiaries  as shown on the
consolidated balance sheet as of such date except changes in the ordinary course
of  business,  none of  which  individually  or in the  aggregate  has  had,  or
reasonably could be expected to have, a Material Adverse Effect;

     (b) this First Amendment has been duly  authorized,  executed and delivered
by it and  this  First  Amendment  constitutes  the  legal,  valid  and  binding
obligation,  contract  and  agreement of the Company and  Subsidiary  Guarantors
enforceable  against it in accordance with its terms,  except as enforcement may
be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws
relating to or limiting  creditors'  rights generally and general  principles of
equity (regardless of whether such  enforceability is considered in a proceeding
in equity or in law);

                                      -4-

<PAGE>


     (c) the Note Agreement, as amended by this First Amendment, constitutes the
legal,  valid and binding  obligation,  contract  and  agreement  of the Company
enforceable  against it in accordance with its terms,  except as enforcement may
be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws
relating to or limiting  creditors'  rights generally and general  principles of
equity (regardless of whether such  enforceability is considered in a proceeding
in equity or in law);

     (d)  the  execution,  delivery  and  performance  by the  Company  and  the
Subsidiary  Guarantors of this First  Amendment (i) has been duly  authorized by
all requisite  corporate action and, if required,  shareholder action, (ii) does
not require the consent or approval of any  governmental  or regulatory  body or
agency,  and (iii) will not (A) violate (1) any provision of law, statute,  rule
or regulation or its certificate of  incorporation  or bylaws,  (2) any order of
any court or any rule,  regulation  or order of any other  agency or  government
binding upon it, or (3) any  provision of any material  indenture,  agreement or
other instrument to which it is a party or by which its properties or assets are
or may be bound, including,  without limitation,  the Note Agreement (as amended
by this First Amendment), or (B) result in a breach or constitute (along or with
due notice or lapse of time or both) a default under any indenture, agreement or
other instrument referred to in clause (iii)(A)(3) of this SS.3(D);

     (e) as of the date hereof and after giving effect to this First  Amendment,
no Default or Event of Default has occurred which is continuing; and

     (f) except as otherwise set forth in the Schedules to the Note Agreement or
on Schedule I hereto, all the representations  and warranties  contained in SS.5
of the Note  Agreement  are true and correct in all material  respects  with the
same force and effect as if made by the Company and Subsidiary Guarantors on and
as of the date hereof.

     SECTION 4    AFFIRMATION  OF  SUBSIDIARY GUARANTEE AGREEMENTS.  Each of the
Subsidiary  Guarantors  hereby  affirm  each of their  obligations  under  their
respective  Subsidiary  Guarantee  Agreements  after giving effect to this First
Amendment.

     SECTION 5    CONSENT TO WINERY ACQUISITION. Pursuant to Section 10.8(e) of
the  Note  Agreement,   the  Required  Holders  hereby  consent  to  the  Winery
Acquisition  (as defined  herein);  PROVIDED that (a)  immediately  prior to and
after giving effect to such acquisition, no Event of Default shall have occurred
and be  continuing,  (b) after giving  effect to such  acquisition,  the Company
shall be in full pro forma  compliance with each of the financial  covenants set
forth in Section 10.4 (as amended by this First  Amendment),  measured as of the
last day of the  fiscal  quarter  then most  recently  ended,  and (c) the prior
effective  written  consent  or  approval  to such  acquisition  of the board of
directors or equivalent governing body of the acquiree shall have been obtained.

     SECTION      6  CONDITIONS  TO  EFFECTIVENESS  OF THIS  AMENDMENT.  This
First Amendment shall not become  effective  until,  and shall become  effective
when, each and every one of the following conditions shall have been satisfied:

                                      -5-

<PAGE>

     (a) executed  counterparts  of this First  Amendment,  duly executed by the
Company,  the Subsidiary  Guarantors and the holders of 100% of the  outstanding
principal of the Notes, shall have been delivered to the Noteholders;

     (b) the  representations  and  warranties of the Company and the Subsidiary
Guarantors  set forth inSS.3  hereof are true and correct on and with respect to
the date hereof;

     (c) the  Company  shall  have  paid the  reasonable  fees and  expenses  of
McDermott,  Will & Emery,  counsel to the  Noteholders,  in connection  with the
negotiation,  preparation,  approval,  execution  and  delivery  of  this  First
Amendment; and

     (d) the  Company  shall  have  complied  with the terms and  provisions  of
Section 9.9 of the Note Agreement.

     SECTION      7 MISCELLANEOUS.

     (a) This First  Amendment shall be construed in connection with and as part
of the Note  Agreement,  and except as modified  and  expressly  amended by this
First  Amendment,  all terms,  conditions  and  covenants  contained in the Note
Agreement,  as amended on the date hereof,  are hereby ratified and shall be and
remain in full force and effect.

     (b) Any and all  notices,  requests,  certificates  and  other  instruments
executed and delivered  after the execution and delivery of this First Amendment
may refer to the Note Agreement without making specific references to this First
Amendment  but  nevertheless  all  such  references  shall  include  this  First
Amendment unless the context otherwise requires.

     (c) The descriptive headings of the various Sections or parts of this First
Amendment  are for  convenience  only  and  shall  not  affect  the  meaning  or
construction of any of the provisions hereof.

     (d) This First  Amendment  shall be governed by and construed in accordance
with New York law.

     (e) The execution  hereof by you shall constitute a contract between us for
the uses and purposes  hereinabove  set forth,  and this first  amendment may be
executed in any number of counterparts,  each executed counterpart  constituting
an original, but all together only one agreement.


                                      -6-

<PAGE>


IN WITNESS  WHEREOF,  the parties hereto have caused this First  Amendment to be
duly  executed by their  respective  authorized  officers as of the day and year
first above written

                                THE CHALONE WINE GROUP, LTD.

                                By:
                                     ___________________________________________
                                     Title


                                EDNA VALLEY VINEYARD

                                     By:  The Chalone Wine Group, Ltd.,
                                          Managing General Partner

                                     By:
                                     ___________________________________________
                                        Title

                                SHW EQUITY CO.

                                By:
                                     ___________________________________________
                                     Title

                                CANOE RIDGE VINEYARD, L.L.C.

                                By:
                                     ___________________________________________
                                     Title


                                STATON HILLS WINERY COMPANY LIMITED

                                By:
                                     ___________________________________________
                                     Title


                                CANOE RIDGE WINERY, INC.

                                By:
                                     ___________________________________________
                                     Title



                                      -7-

<PAGE>



Accepted and Agreed:            FARM CREDIT SERVICES OF AMERICA,
                                PCA

                                By:
                                     ___________________________________________
                                     Title




                                      -8-


<PAGE>





Accepted and Agreed:            AGSTAR FINANCIAL SERVICES, PCA,
                                DBA FARM CREDIT SERVICES
                                COMMERCIAL FINANCE GROUP


                                 By:
                                     ___________________________________________
                                      Title