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                                                                   Exhibit 10.21

[GRAPHIC OMITTED]

                                CREDIT AGREEMENT

                                (LINE OF CREDIT)

         This Agreement (the "Agreement") is made and entered into as of
__________________, 2000, by and between SANWA BANK CALIFORNIA (the "Bank")
and GOLDEN STATE VINTNERS (the "Borrower"), on the terms and conditions that
follow and amends and supercedes that certain Credit Agreement by and between
Borrower and Bank dated as of July 5, 2000:

                                     SECTION

                                       1

                                   DEFINITIONS

1.1      CERTAIN DEFINED TERMS: Unless elsewhere defined in this Agreement, the
         following terms shall have the following meanings (such meanings to be
         generally applicable to the singular and plural forms of the terms
         defined):

         1.1.1    "ADVANCE": shall mean an advance to the Borrower under the
                  credit facility(ies) described in Section 2.

         1.1.2    "BUSINESS DAY": shall mean a day, other than a Saturday or
                  Sunday, on which commercial banks are open for business in
                  California.

         1.1.3    "CASH FLOW": shall mean the sum of net income after tax and
                  exclusive of extraordinary gains, plus depreciation and
                  amortization expense minus dividends and distributions.

         1.1.4    "COLLATERAL": shall mean the property described in Section 3,
                  together with any other personal or real property in which the
                  Bank may be granted a lien or security interest to secure
                  payment of the Obligations.

         1.1.5    "CROPS": shall mean the crops described in Section 3.

         1.1.6    "CURRENT ASSETS": shall mean current assets as determined in
                  accordance with generally accepted accounting principles, less
                  all amounts due from affiliates, officers or employees.

         1.1.7    "CURRENT LIABILITIES": shall mean current liabilities as
                  determined in accordance with generally accepted accounting
                  principles, including any negative cash balance on the
                  Borrower's financial statement.

         1.1.8    "DEBT": shall mean all liabilities of the Borrower less
                  Subordinated Debt, if any.

         1.1.9    "EBITDA": shall mean earnings exclusive of extraordinary gains
                  and before deductions for interest expense, taxes,
                  depreciation and amortization expense.


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         1.1.10   "EFFECTIVE TANGIBLE NET WORTH": shall mean the Borrower's
                  stated net worth plus Subordinated Debt but less all
                  intangible assets of the Borrower (i.e., goodwill, trademarks,
                  patents, copyrights, organization expense, and similar
                  intangible items including, but not limited to, investments in
                  and all amounts due from affiliates, officers or employees).

         1.1.11   "ENVIRONMENTAL CLAIMS": shall mean all claims, however
                  asserted, by any governmental authority or other person
                  alleging potential liability or responsibility for violation
                  of any Environmental Law or for release or injury to the
                  environment or threat to public health, personal injury
                  (including sickness, disease or death), property damage,
                  natural resources damage, or otherwise alleging liability or
                  responsibility for damages (punitive or otherwise), cleanup,
                  removal, remedial or response costs, restitution, civil or
                  criminal penalties, injunctive relief, or other type of
                  relief, resulting from or based upon (a) the presence,
                  placement, discharge, emission or release (including
                  intentional and unintentional, negligent and non-negligent,
                  sudden or non-sudden, accidental or non-accidental placement,
                  spills, leaks, discharges, emissions or releases) of any
                  Hazardous Material at, in, or from property, whether or not
                  owned by the Borrower, or (b) any other circumstances forming
                  the basis of any violation, or alleged violation, of any
                  Environmental Law.

         1.1.12   "ENVIRONMENTAL LAWS": shall mean all federal, state or local
                  laws, statutes, common law duties, rules, regulations,
                  ordinances and codes, together with all administrative orders,
                  directed duties, requests, licenses, authorizations and
                  permits of, and agreements with, any governmental authorities,
                  in each case relating to environmental, health, safety and
                  land use matters; including the Comprehensive Environmental
                  Response, Compensation and Liability Act of 1980 ("CERCLA"),
                  the Clean Air Act, the Federal Water Pollution Control Act of
                  1972, the Solid Waste Disposal Act, the Federal Resource
                  Conservation and Recovery Act, the Toxic Substances Control
                  Act, the Emergency Planning and Community Right-to-Know Act,
                  the California Hazardous Waste Control Law, the California
                  Solid Waste Management, Resource, Recovery and Recycling Act,
                  the California Water Code and the California Health and Safety
                  Code.

         1.1.13   "ENVIRONMENTAL PERMITS": shall have the meaning provided in
                  Section 5.11 hereof.

         1.1.14   "EQUIPMENT": shall mean equipment as defined in the California
                  Uniform Commercial Code.

         1.1.15   "ERISA": shall mean the Employee Retirement Income Security
                  Act of 1974, as amended from time to time, including (unless
                  the context otherwise requires) any rules or regulations
                  promulgated thereunder.

         1.1.16   "EVENT OF DEFAULT": shall have the meaning set forth in
                  Section 7.

         1.1.17   "EXPIRATION DATE": shall mean July 5, 2002, or the date of
                  termination of the Bank's commitment to lend under this
                  Agreement pursuant to Section 8, whichever shall occur first.

         1.1.18   "FIXED RATE ADVANCE": shall have the respective meaning as it
                  is defined for each facility under Section 2, hereof if
                  applicable.

         1.1.19   "FIXED RATE": shall have the respective meaning as it is
                  defined for each facility under Section 2, hereof if
                  applicable.

         1.1.20   "HAZARDOUS MATERIALS": shall mean all those substances which
                  are regulated by, or which may form the basis of liability
                  under, any Environmental Law, including all substances
                  identified under any Environmental Law as a pollutant,
                  contaminant, hazardous waste,

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                  hazardous constituent, special waste, hazardous substance,
                  hazardous material, or toxic substance, or petroleum or
                  petroleum derived substance or waste.

         1.1.21   "INDEBTEDNESS": shall mean, with respect to the Borrower, (i)
                  all indebtedness for borrowed money or for the deferred
                  purchase price of property or services in respect of which the
                  Borrower is liable, contingently or otherwise, as obligor,
                  guarantor or otherwise, or in respect of which the Borrower
                  otherwise assures a creditor against loss and (ii) obligations
                  under leases which shall have been or should be, in accordance
                  with generally accepted accounting principles, reported as
                  capital leases in respect of which the Borrower is liable,
                  contingently or otherwise, or in respect of which the Borrower
                  otherwise assures a creditor against loss.

         1.1.22   "INTEREST PERIOD": shall have the respective meaning as it is
                  defined for each facility under Section 2, hereof.

         1.1.23   "INVENTORY": shall mean the inventory described in Section 3.

         1.1.24   "LETTER OF CREDIT SUB-FACILITY": shall mean the credit
                  facility described as such in Section 2.

         1.1.25   "LIBOR ADVANCE": shall have the respective meaning as it is
                  defined for each facility under Section 2, hereof.

         1.1.26   "LIBOR INTEREST PERIOD": shall have the respective meaning as
                  it is defined for each facility under Section 2, hereof.

         1.1.27   "LIBOR RATE": shall have the respective meaning as it is
                  defined for each facility under Section 2, hereof.

         1.1.28   "LINE ACCOUNT": shall have the meaning provided in Section 2.3
                  hereof.

         1.1.29   "LINE OF CREDIT": shall mean the credit facility described as
                  such in Section 2.

         1.1.30   "OBLIGATIONS": shall mean all amounts owing by the Borrower to
                  the Bank pursuant to this Agreement including, but not limited
                  to, the unpaid principal amount of Advances.

         1.1.31   "ORDINARY COURSE OF BUSINESS": shall mean, with respect to any
                  transaction involving the Borrower or any of its subsidiaries
                  or affiliates, the ordinary course of the Borrower's business,
                  as conducted by the Borrower in accordance with past practice
                  and undertaken by the Borrower in good faith and not for the
                  purpose of evading any covenant or restriction in this
                  Agreement or in any other document, instrument or agreement
                  executed in connection herewith.

         1.1.32   "PERMITTED LIENS": shall mean: (i) liens and security
                  interests securing indebtedness owed by the Borrower to the
                  Bank; (ii) liens for taxes, assessments or similar charges not
                  yet due; (iii) liens of materialmen, mechanics, warehousemen,
                  producers, laborers or carriers or other like liens arising in
                  the Ordinary Course of Business and securing obligations which
                  are not yet delinquent; (iv) purchase money liens or purchase
                  money security interests upon or in any property acquired or
                  held by the Borrower in the Ordinary Course of Business to
                  secure Indebtedness outstanding on the date hereof or
                  permitted to be incurred herein; (v) liens and security
                  interests which, as of the date hereof, have been disclosed to
                  and approved by the Bank in writing; and (vi) those liens and
                  security interests which in the aggregate constitute an
                  immaterial and insignificant monetary amount with respect to
                  the net value of the Borrower's assets.

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         1.1.33   "REFERENCE RATE": shall mean an index for a variable
                  interest rate which is quoted, published or announced by
                  Bank as its reference rate and as to which loans may be
                  made by Bank at, above or below such rate.

         1.1.34   "SUBORDINATED DEBT": shall mean such liabilities of the
                  Borrower which have been subordinated to those owed to the
                  Bank in a manner acceptable to the Bank.

         1.1.35   "VARIABLE RATE ADVANCE": shall have the respective meaning
                  as it is defined for each facility under Section 2, hereof.

         1.1.36   "VARIABLE RATE": shall have the respective meaning as it is
                  defined for each facility under Section 2, hereof.

1.2      ACCOUNTING TERMS: All references to financial statements, assets,
         liabilities, and similar accounting items not specifically defined
         herein shall mean such financial statements or such items prepared
         or determined in accordance with generally accepted accounting
         principles consistently applied and, except where otherwise
         specified, all financial data submitted pursuant to this Agreement
         shall be prepared in accordance with such principles.

1.3      OTHER TERMS: Other terms not otherwise defined shall have the
         meanings attributed to such terms in the California Uniform
         Commercial Code.

                                     SECTION

                                        2

                                CREDIT FACILITIES

2.1      THE LINE OF CREDIT

         2.1.1    THE LINE OF CREDIT: On terms and conditions as set forth
                  herein, the Bank agrees to make Advances to the Borrower from
                  time to time from the date hereof to the Expiration Date,
                  provided the aggregate amount of such Advances outstanding at
                  any time does not exceed $28,000,000.00 (the "Line of
                  Credit"). Within the foregoing limits, the Borrower may
                  borrow, partially or wholly prepay, and reborrow under this
                  Section 2.1. Proceeds of the Line of Credit shall be used for
                  general working capital purposes.

         2.1.2    MAKING LINE ADVANCES: Each Advance shall be conclusively
                  deemed to have been made at the request of and for the benefit
                  of the Borrower (i) when credited to any deposit account of
                  the Borrower maintained with the Bank or (ii) when paid in
                  accordance with the Borrower's written instructions. Subject
                  to the requirements of Section 4 and provided such request is
                  made in a timely manner as provided in Section 2.1.5 below,
                  Advances shall be made by the Bank under the Line of Credit.

         2.1.3    REPAYMENT: On the Expiration Date, the Borrower hereby
                  promises and agrees to pay to the Bank in full the aggregate
                  unpaid principal amount of all Advances then outstanding,
                  together with all accrued and unpaid interest thereon.

         2.1.4    INTEREST ON ADVANCES: Interest shall accrue from the date of
                  each Advance under the Line of Credit at one of the following
                  rates, as quoted by the Bank and as elected by the Borrower
                  pursuant to Subsection (i) or Subsection (ii) or Subsection
                  (iii) below:

                  (i)      VARIABLE RATE ADVANCES: A variable rate per annum
                           equivalent to the Reference Rate (the "Variable
                           Rate"). Interest shall be adjusted concurrently with
                           any change in the Reference Rate. An Advance based
                           upon the Variable Rate is hereinafter

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                            referred to as a "Variable Rate Advance".

                  (ii)     FIXED RATE ADVANCES: A fixed rate per annum quoted by
                           the Bank for 30, 60, 90 or 180 days or for such other
                           period of time that the Bank may quote and offer
                           (provided that any such period of time does not
                           extend beyond the Expiration Date) (the "Interest
                           Period") for Advances in the minimum amount of
                           $250,000.00. Such interest rate shall be a percentage
                           equal to .95% in excess of the rate which the Bank
                           determines in its sole and absolute discretion to be
                           equal to the Bank's cost of acquiring funds (adjusted
                           for any and all assessments, surcharges and reserve
                           requirements pertaining to the borrowing or purchase
                           by the Bank of such funds) in an amount approximately
                           equal to the amount of the relevant Advance and for a
                           period of time approximately equal to the relevant
                           Interest Period (the "Fixed Rate"). Advances based
                           upon the Fixed Rate are hereinafter referred to as
                           "Fixed Rate Advances".

                  (iii)    LIBOR ADVANCES: A fixed rate quoted by the Bank for
                           1, 2, 3, or 6 months or for such other period of time
                           that the Bank may quote and offer (provided that any
                           such period of time does not extend beyond the
                           Expiration Date) (the "LIBOR Interest Period") for
                           Advances in the minimum amount of $250,000.00. Such
                           interest rate shall be a percentage equal to .95% in
                           excess of the Bank's LIBOR Rate which is that rate
                           determined by the Bank's Treasury Desk as being the
                           arithmetic mean (rounded upwards, if necessary, to
                           the nearest whole multiple of one-sixteenth of one
                           percent (1/16%)) of the U. S. dollar London Interbank
                           Offered Rates for such period appearing on page 3750
                           (or such other page as may replace page 3750) of the
                           Telerate screen at or about 11:00 a.m. (London time)
                           on the second Business Day prior to the first days of
                           such period (adjusted for any and all assessments,
                           surcharges and reserve requirements) (the "LIBOR
                           Rate"). An Advance based upon the LIBOR Rate is
                           hereinafter referred to as a "LIBOR Advance".

                           Interest on any Advance shall be computed on the
                           basis of 360 days per year, but charged on the actual
                           number of days elapsed.

                           The Borrower hereby promises and agrees to pay
                           interest in arrears on all Advances on the 5th
                           calendar day of each month.

                           If interest is not paid as and when it is due, it
                           shall be added to the principal, become and be
                           treated as a part thereof, and shall thereafter bear
                           like interest.

         2.1.5    NOTICE OF BORROWING: Upon written or telephonic notice which
                  shall be received by the Bank at or before 2:00 p.m.
                  (California time) on a Business Day, the Borrower may borrow
                  under the Line of Credit by requesting:

                  (i)      A VARIABLE RATE ADVANCE OR FIXED RATE ADVANCE: A
                           Variable Rate Advance or Fixed Rate Advance may be
                           made on the day notice is received by the Bank;
                           provided, however, that if the Bank shall not have
                           received notice at or before 2:00 p.m. on the day
                           such Advance is requested to be made, such Variable
                           Rate Advance or Fixed Rate Advance may, at the Bank's
                           option, be made on the next Business Day.

                  (ii)     A LIBOR ADVANCE: Notice of any LIBOR Advance shall
                           be received by the Bank no later than two Business
                           Days prior to the day (which shall be a Business Day)
                           on which the Borrower requests such LIBOR Advance to
                           be made.

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         2.1.6    NOTICE OF ELECTION TO ADJUST INTEREST RATE: Upon telephonic
                  notice which shall be received by the Bank at or before 2:00
                  p.m. (California time) on a Business Day, the Borrower may
                  elect:

                  (i)      That interest on a Variable Rate Advance shall be
                           adjusted to accrue at the Fixed Rate; provided,
                           however, that such notice shall be received by the
                           Bank no later than 2:00 p.m. on the Business Day on
                           which the Borrower requests that interest be adjusted
                           to accrue at the Fixed Rate.

                  (ii)     That interest on a Variable Rate Advance shall be
                           adjusted to accrue at the LIBOR Rate; provided,
                           however, that such notice shall be received by the
                           Bank no later than two Business Days prior to the
                           Business Day on which the Borrower requests that
                           interest be adjusted to accrue at the LIBOR Rate.

                  (iii)    That interest on a Fixed Rate Advance shall continue
                           to accrue at a newly quoted Fixed Rate or shall be
                           adjusted to commence to accrue at the Variable Rate;
                           provided, however, that such notice shall be received
                           by the Bank no later than 2:00 p.m. on the last day
                           of the Interest Period pertaining to such Fixed Rate
                           Advance. If the Bank shall not have received notice
                           (as prescribed herein) of the Borrower's election
                           that interest on any Fixed Rate Advance shall
                           continue to accrue at the newly quoted Fixed Rate as
                           the case may be the Borrower shall be deemed to have
                           elected that interest thereon shall be adjusted to
                           accrue at the Variable Rate upon the expiration of
                           the relevant Interest Period pertaining to such
                           Advance.

                  (iv)     That interest on a Fixed Rate Advance shall accrue at
                           a newly quoted LIBOR Rate or interest on a LIBOR
                           Advance shall continue to accrue at a newly quoted
                           Fixed Rate or LIBOR Rate or shall be adjusted to
                           commence to accrue at the Variable Rate; provided,
                           however, that such notice shall be received by the
                           Bank no later than two Business Days prior to the
                           last day of the relevant Interest Period or LIBOR
                           Interest Period, as applicable. If the Bank shall not
                           have received notice as prescribed herein of the
                           Borrower's election that interest on any Fixed Rate
                           Advance shall accrue interest at a newly quoted LIBOR
                           Rate or at a newly quoted Fixed Rate pursuant to
                           subparagraph (iii) hereinabove; or any LIBOR Advance
                           shall continue to accrue at the newly quoted Fixed
                           Rate or LIBOR Rate as the case may be, the Borrower
                           shall be deemed to have elected that interest thereon
                           shall be adjusted to accrue at the Variable Rate upon
                           the expiration of the relevant Interest Period or
                           LIBOR Interest Period pertaining to such Advance.

         2.1.7    PREPAYMENT: The Borrower may prepay any Advance in whole or in
                  part, at any time and without penalty, provided, however,
                  that: (i) any partial prepayment shall first be applied at the
                  Bank's option, to accrued and unpaid interest and next to the
                  outstanding principal balance; and (ii) during any period of
                  time in which interest is accruing on any Advance on the basis
                  of the LIBOR Rate or Fixed Rate, no prepayment shall be made
                  except on a day which is the last day of the LIBOR Interest
                  Period or Interest Period pertaining thereto. If the whole or
                  any part of any LIBOR Advance or Fixed Rate Advance is prepaid
                  by reason of acceleration or otherwise, the Borrower shall,
                  upon the Bank's request, promptly pay to and indemnify the
                  Bank for all costs, expenses and any loss (including loss of
                  future interest income) actually incurred by the Bank and any
                  loss (including loss of profit resulting from the
                  re-employment of funds) deemed sustained by the Bank as a
                  consequence of such prepayment.

                  The Bank shall be entitled to fund all or any portion of its
                  Advances in any manner it may determine in its sole
                  discretion, but all calculations and transactions hereunder
                  shall be conducted as though the Bank actually funded all
                  Advances through the purchase of dollar


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                  deposits bearing interest at the same rate as U.S. Treasury
                  securities in the amount of the relevant Advance and in
                  maturities corresponding to the date of such purchase to the
                  Expiration Date hereunder.

         2.1.8    INDEMNIFICATION FOR LIBOR RATE OR FIXED RATE COSTS: During any
                  period of time in which interest on any Advance is accruing on
                  the basis of the LIBOR Rate or Fixed Rate, the Borrower shall,
                  upon the Bank's request, promptly pay to and reimburse the
                  Bank for all costs incurred and payments made by the Bank by
                  reason of any future assessment, reserve, deposit or similar
                  requirement or any surcharge, tax or fee imposed upon the Bank
                  or as a result of the Bank's compliance with any directive or
                  requirement of any regulatory authority pertaining or relating
                  to funds used by the Bank in quoting and determining the LIBOR
                  Rate or Fixed Rate.

         2.1.9    CONVERSION FROM LIBOR RATE OR FIXED RATE TO VARIABLE RATE: In
                  the event that the Bank shall at any time determine that the
                  accrual of interest on the basis of the LIBOR Rate or Fixed
                  Rate (i) has become infeasible because the Bank is unable to
                  determine the LIBOR Rate or Fixed Rate due to the
                  unavailability of U.S. Dollar deposits, contracts or
                  certificates of deposit in an amount approximately equal to
                  the amount of the relevant Advance and for a period of time
                  approximately equal to the relevant LIBOR Interest Period or
                  Interest Period as the case may be or (ii) is or has become
                  unlawful by reason of the Bank's compliance with any new law,
                  rule, regulation, guideline or order, or any new
                  interpretation of any present law, rule, regulation guideline
                  or order, then the Bank shall promptly give telephonic notice
                  thereof (confirmed in writing) to the Borrower, in which event
                  any Advance bearing interest at either the LIBOR Rate or Fixed
                  Rate as the case may be shall be deemed to be a Variable Rate
                  Advance and interest shall thereupon immediately accrue at the
                  Variable Rate and shall continue at such rate until the Bank
                  determines that the LIBOR Rate or Fixed Rate is no longer
                  infeasible or unlawful.

         2.1.10   COMMITMENT FEE: The Borrower agrees to pay to the Bank a
                  commitment fee on the unused portion of the Line of Credit of
                  .125% per annum, payable quarterly in arrears, commencing
                  September 15, 2000, and computed on a year of 360 days for
                  actual days elapsed.

2.2      LETTER OF CREDIT SUB-FACILITY

         2.2.1    LETTER OF CREDIT SUB-FACILITY: The Bank agrees to issue
                  standby letters of credit (each a "Letter of Credit") on
                  behalf of the Borrower of up to $3,000,000.00. At no time,
                  however, shall the total principal amount of all Advances
                  outstanding under the Line of Credit, together with the total
                  face amount of all Letters of Credit outstanding, less any
                  partial draws paid by the Bank, exceed the Line of Credit.

                  (i)      Upon the Bank's request, the Borrower shall promptly
                           pay to the Bank issuance fees and such other fees,
                           commissions, costs and any out-of-pocket expenses
                           charged or incurred by the Bank with respect to any
                           Letter of Credit.

                  (ii)     The commitment by the Bank to issue Letters of Credit
                           shall, unless earlier terminated in accordance with
                           the terms of the Agreement, automatically terminate
                           on the Expiration Date of the Line of Credit and no
                           Letter of Credit shall expire on a date which is
                           after the Expiration Date.

                  (iii)    Each Letter of Credit shall be in form and substance
                           satisfactory to the Bank and in favor of
                           beneficiaries satisfactory to the Bank, provided that
                           the Bank may refuse to issue a Letter of Credit due
                           to the nature of the transaction or its terms or in
                           connection with any transaction where the Bank, due
                           to the beneficiary or the


                                       -7-
<PAGE>

                           nationality or residence of the beneficiary, would
                           be prohibited by any applicable law, regulation or
                           order from issuing such Letter of Credit.

                  (iv)     Prior to the issuance of each Letter of Credit, but
                           in no event later than 10:00 a.m. (California time)
                           on the day such Letter of Credit is to be issued
                           (which shall be a Business Day), the Borrower shall
                           deliver to the Bank a duly executed form of the
                           Bank's standard form of application for issuance of a
                           Letter of Credit with proper insertions.

                  (v)      The Borrower shall, upon the Bank's request, promptly
                           pay to and reimburse the Bank for all costs incurred
                           and payments made by the Bank by reason of any future
                           assessment, reserve, deposit or similar requirement
                           or any surcharge, tax or fee imposed upon the Bank or
                           as a result of the Bank's compliance with any
                           directive or requirement of any regulatory authority
                           pertaining or relating to any Letter of Credit.

         In the event that the Borrower fails to pay any drawing under any
         Letter of Credit or the balances in the depository account or accounts
         maintained by the Borrower with Bank are insufficient to pay such
         drawing, without limiting the rights of Bank hereunder or waiving any
         Event of Default caused thereby, Bank may, and Borrower hereby
         authorizes Bank to create an Advance bearing interest at the rate or
         rates provided in Section 9.2 hereof to pay such drawing.

2.3      LINE ACCOUNT: The Bank shall maintain on its books a record of account
         in which the Bank shall make entries for each Advance and such other
         debits and credits as shall be appropriate in connection with the
         credit facilities granted hereunder (the "Line Account"). The Bank
         shall provide the Borrower with a statement of the Borrower's Line
         Account, which statement shall be considered to be correct and
         conclusively binding on the Borrower unless the Borrower notifies the
         Bank to the contrary within 30 days after the Borrower's receipt of any
         such statement which it deems to be incorrect.

2.4      AUTHORIZATION TO CHARGE ACCOUNT(S): The Borrower hereby authorizes the
         Bank, if and to the extent payment owed to the Bank under this
         Agreement is not made when due, to charge, from time to time, against
         any or all of the Borrower's deposit accounts with the Bank any amount
         so due.

2.5      PAYMENTS: If any payment required to be made by the Borrower hereunder
         becomes due and payable on a day other than a Business Day, the due
         date thereof shall be extended to the next succeeding Business Day and
         interest thereon shall be payable at the then applicable rate during
         such extension. All payments required to be made hereunder shall be
         made to the office of the Bank designated for the receipt of notices
         herein or such other office as Bank shall from time to time designate.

2.6      LATE PAYMENT: In addition to any other rights the Bank may have
         hereunder, if any payment of principal or interest or any portion
         thereof, under this Agreement is not paid within 5 days of when due, a
         late payment charge equal to five percent (5%) of such past due payment
         may be assessed and shall be immediately payable.


                                       -8-
<PAGE>

                                     SECTION

                                        3

                                    COLLATERAL

3.1      THE COLLATERAL: To secure payment and performance of all the Borrower's
         Obligations under this Agreement and all other liabilities, loans,
         guarantees, covenants and duties owed by the Borrower to the Bank,
         whether or not evidenced by this or by any other agreement, absolute or
         contingent, due or to become due, now existing or hereafter and
         howsoever created, the Borrower hereby grants the Bank a security
         interest in and to all of the the Borrower's right, title and interest
         in and to the following property ("Collateral"):

                  (i)      INVENTORY. All inventory now owned or hereafter
                           acquired by the Borrower, including, but not limited
                           to, all raw materials, work in process, finished
                           goods, merchandise, parts and supplies of every kind
                           and description, including inventory temporarily out
                           of the Borrower's custody or possession, together
                           with all returns on accounts (the "Inventory").

                  (ii)     ACCOUNTS. All accounts, contract rights and general
                           intangibles now owned or hereafter created or
                           acquired by the Borrower, including, but not limited
                           to, all receivables, goodwill, trademarks, trademark
                           applications, trade styles, trade names, patents,
                           patent applications, copyrights and copyright
                           applications, customer lists, business records and
                           computer programs, tapes, disks and related data
                           processing software that at any time evidence or
                           contain information relating to any of the
                           Collateral.

                  (iii)    DOCUMENTS. All documents, instruments and chattel
                           paper now owned or hereafter acquired by the
                           Borrower, including, but not limited to, warehouse
                           and other receipts, bills of sale and bills of
                           lading.

                  (iv)     MONIES. All monies, deposit accounts, certificates of
                           deposit and securities of the Borrower now or
                           hereafter in the Bank's or its agents' possession.

                  (v)      CROPS. All crops now growing or hereafter to be
                           grown, together with all products and proceeds
                           thereof (the "Crops"), on that certain real property
                           described in the attached Exhibit "A" (the "Real
                           Property").

                  (vi)     FARM PRODUCTS. All farm products now owned or
                           hereafter acquired by or for the benefit of the
                           Borrower consisting of supplies used or produced in
                           the farming operations of the Borrower.

                  (vii)    WATER RIGHTS. All of Borrower's now existing or
                           hereafter acquired water rights of every kind and
                           description, whether appurtenant, riparian or
                           prescriptive or arising by virtue of any contract or
                           other agreement.

The Bank's security interest in the Collateral shall be a continuing lien and
shall include the proceeds and products of the Collateral including, but not
limited to, the proceeds of any insurance thereon.

The security interest granted to Bank in the Collateral shall not secure or be
deemed to secure any Indebtedness of the Borrower to the Bank which is, at the
time of its creation, subject to the provisions of any state or federal consumer
credit or truth-in-lending disclosure statutes.


                                       -9-
<PAGE>

                                     SECTION

                                        4

                               CONDITIONS PRECEDENT

4.1      CONDITIONS PRECEDENT TO THE INITIAL ADVANCE: The obligation of the Bank
         to make the initial Advance and the first extension of credit to or on
         account of the Borrower hereunder is subject to the conditions
         precedent that the Bank shall have received before the date of such
         initial Advance and such first extension of credit all of the
         following, in form and substance satisfactory to the Bank:

                  (i)      AUTHORITY TO BORROW. Evidence that the execution,
                           delivery and performance by the Borrower of this
                           Agreement and any document, instrument or agreement
                           required hereunder have been duly authorized.

                  (ii)     GUARANTORS. Continuing guaranty in favor of the Bank
                           executed by the following, together with evidence
                           that the execution, delivery and performance by any
                           guarantor has been duly authorized: Golden State
                           Vintners, Inc..

                  (iii)    FEES. Payment of all of the Bank's out-of-pocket
                           expenses in connection with the preparation and
                           negotiation of this Agreement.

                  (iv)     FINANCING STATEMENTS. Executed UCC-1 financing
                           statement(s) describing the Collateral, which have
                           been filed with the Secretary of State or the county
                           recorder as a lien of first priority.

                  (v)      MISCELLANEOUS. Such other evidence as the Bank may
                           request to establish the consummation of the
                           transaction contemplated hereunder and compliance
                           with the conditions of this Agreement.

4.2      CONDITIONS PRECEDENT TO ALL ADVANCES: The obligation of the Bank to
         make each Advance and each other extension of credit to or on account
         of the Borrower (including the initial Advance and the first extension
         of credit) shall be subject to the further conditions precedent that,
         on the date of each Advance or each extension of credit and after the
         making of such Advance or extension of credit:

                  (i)   SUBSEQUENT APPROVALS. The Bank shall have received
                        such supplemental approvals, opinions or documents as
                        the Bank may reasonably request.

                  (ii)  REPRESENTATIONS AND WARRANTIES. The representations
                        contained in Section 5 and in any other document,
                        instrument or certificate delivered to the Bank
                        hereunder are true, correct and complete.

                  (iii) EVENT OF DEFAULT. No event has occurred and is
                        continuing which constitutes, or with the lapse of time
                        or giving of notice or both, would constitute an Event
                        of Default.

                  (iv)  COLLATERAL. The security interest in the Collateral
                        has been duly authorized, created and perfected with
                        first priority and is in full force and effect.

The Borrower's acceptance of the proceeds of any loan, advance or extension of
credit or the Borrower's execution of any document or instrument evidencing or
creating any Obligation hereunder shall be deemed to constitute the Borrower's
representation and warranty that all of the above statements are true and
correct.


                                       -10-
<PAGE>

                                     SECTION

                                        5

                           REPRESENTATIONS AND WARRANTIES

         The Borrower hereby makes the following representations and warranties
to the Bank, which representations and warranties are continuing:

5.1      STATUS: The Borrower is a corporation duly organized and validly
         existing under the laws of the state of California and is properly
         licensed and is qualified to do business and in good standing in, and,
         where necessary to maintain the Borrower's rights and privileges, has
         complied with the fictitious name statute of every jurisdiction in
         which the Borrower is doing business., the failure to comply with which
         would have a material adverse effoct on the Borrower's business.

5.2      AUTHORITY: The execution, delivery and performance by the Borrower of
         this Agreement and any instrument, document or agreement required
         hereunder have been duly authorized and do not and will not: (i)
         violate any provision of any law, rule, regulation, order, writ,
         judgment, injunction, decree, determination or award presently in
         effect having application to the Borrower; (ii) result in a breach of
         or constitute a default under any material indenture or loan or credit
         agreement or other material agreement, lease or instrument to which the
         Borrower is a party or by which it or its properties may be bound or
         affected; or (iii) require any consent or approval of its stockholders
         or violate any provision of its articles of incorporation or by-laws.

5.3      LEGAL EFFECT: This Agreement constitutes, and any instrument, document
         or agreement required hereunder when delivered hereunder will
         constitute, legal, valid and binding obligations of the Borrower
         enforceable against the Borrower in accordance with their respective
         terms.

5.4      FICTITIOUS TRADE STYLES: All fictitious trade styles used by the
         Borrower in connection with its business operations and each state in
         which each such fictitious trade style is used are listed below. The
         Borrower shall notify the Bank not less than 30 days prior to effecting
         any change in the matters described below or prior to using any other
         fictitious trade style at any future date, indicating the trade style
         and state(s) of its use.

               TRADE STYLE                                 STATE OF USE

         See attached Exhibit "B"                          All

5.5      FINANCIAL STATEMENTS: All financial statements, information and other
         data which may have been or which may hereafter be submitted by the
         Borrower to the Bank are true, accurate and correct and have been or
         will be prepared in accordance with generally accepted accounting
         principles consistently applied and accurately represent the financial
         condition or, as applicable, the other information disclosed therein.
         Since the most recent submission of such financial information or data
         to the Bank, the Borrower represents and warrants that no material
         adverse change in the Borrower's financial condition or operations has
         occurred which has not been fully disclosed to the Bank in writing.

5.6      LITIGATION: Except as have been disclosed to the Bank in writing, there
         are no actions, suits or proceedings pending or, to the knowledge of
         the Borrower, threatened against or affecting the Borrower or the
         Borrower's properties before any court or administrative agency which,
         if determined adversely to the Borrower, would have a material adverse
         effect on the Borrower's financial condition or operations or on the
         Collateral.


                                       -11-


<PAGE>

5.7      TITLE TO ASSETS: The Borrower has good and marketable title to all of
         its assets (including, but not limited to, the Collateral) and the same
         are not subject to any security interest, encumbrance, lien or claim of
         any third person except for Permitted Liens.

5.8      ERISA: If the Borrower has a pension, profit sharing or retirement plan
         subject to ERISA, such plan has been and will continue to be funded in
         accordance with its terms and otherwise complies with and continues to
         comply with the requirements of ERISA.

5.9      TAXES: The Borrower has filed all tax returns required to be filed and
         paid all taxes shown thereon to be due, including interest and
         penalties, other than such taxes which are currently payable without
         penalty or interest or those which are being duly contested in good
         faith.

5.10     MARGIN STOCK. The proceeds of any loan or advance hereunder will not be
         used to purchase or carry margin stock as such term is defined under
         Regulation U of the Board of Governors of the Federal Reserve System.

5.11     ENVIRONMENTAL COMPLIANCE. The operations of the Borrower comply, and
         during the term of this Agreement will at all times comply, in all
         respects with all Environmental Laws; the Borrower has obtained all
         licenses, permits, authorizations and registrations required under any
         Environmental Law ("ENVIRONMENTAL PERMITS") and necessary for its
         ordinary course operations, all such Environmental Permits are in good
         standing, and the Borrower is in compliance with all material terms and
         conditions of such Environmental Permits; neither the Borrower nor any
         of its present property or operations is subject to any outstanding
         written order from or agreement with any governmental authority nor
         subject to any judicial or docketed administrative proceeding,
         respecting any Environmental Law, Environmental Claim or Hazardous
         Material; there are no Hazardous Materials or other conditions or
         circumstances existing, or arising from operations prior to the date of
         this Agreement, with respect to any property of the Borrower that would
         reasonably be expected to give rise to Environmental Claims; PROVIDED,
         however, that with respect to property leased from an unrelated third
         party, the foregoing representation is made to the best knowledge of
         the Borrower. In addition, (i) the Borrower does not have any
         underground storage tanks that are not properly registered or permitted
         under applicable Environmental Laws, or that are leaking or disposing
         of Hazardous Materials off-site, and (ii) the Borrower has notified all
         of their employees of the existence, if any, of any health hazard
         arising from the conditions of their employment and have met all
         notification requirements under Title III of CERCLA and all other
         Environmental Laws.

5.12     INVENTORY:

                  (i)      The Borrower keeps correct and accurate records.

                  (ii)     All inventory is of good and merchantable quality,
                           free from defects.

                  (iii)    The inventory is not stored with a bailee,
                           warehouseman or similar party.

                  (iv)     The Borrower is not a "retail merchant" as defined in
                           the California Uniform Commercial Code.

5.13     WATER. As of the date of this Agreement, sufficient water is available
         and is projected to be available, from verifiable surface and ground
         water sources, or to conduct operations materially similar to prior
         years' operations as evidenced by information provided by any Borrower
         to the Bank. Borrower has filed with all governmental agencies, all
         notices and other documents required under Federal, state and local
         laws and regulations in connection with the supply of water to and use
         of water upon the Real Property.


                                       -12-
<PAGE>

                                     SECTION

                                        6

                                    COVENANTS

The Borrower covenants and agrees that, during the term of this Agreement, and
so long thereafter as the Borrower is indebted to the Bank under this Agreement,
the Borrower will, unless the Bank shall otherwise consent in writing:

6.1      REPORTING AND CERTIFICATION REQUIREMENTS: Deliver or cause to be
         delivered to the Bank in form and detail satisfactory to the Bank:

                  (i)      Not later than 120 days after the end of each of the
                           Borrower's fiscal years, a copy of the annual audited
                           financial report of the Borrower for such year,
                           prepared by a firm of certified public accountants
                           acceptable to Bank and accompanied by an unqualified
                           opinion of such firm.

                  (ii)     Not later than 60 days after the end of each fiscal
                           quarter, the Borrower's financial statement as of the
                           end of such period and a copy of Golden State
                           Vintners, Inc.'s Form 10Q filed with the Securities
                           and Exchange Commission.

                  (iii)    Concurrently with the delivery of the financial
                           reports required hereunder, a compliance certificate
                           stating that the Borrower is in compliance with all
                           covenants contained herein and that no Event of
                           Default or potential Event of Default has occurred or
                           is continuing, and certified to by the chief
                           financial officer of the Borrower.

                  (iv)     Promptly upon the Bank's request, such other
                           information pertaining to the Borrower, the
                           Collateral or any guarantor hereunder as the Bank may
                           reasonably request.

6.2      FINANCIAL CONDITION: The Borrower promises and agrees, during the term
         of this Agreement and until payment in full of all of the Borrower's
         Obligations, the Borrower will maintain as of the relevant times set
         forth below:

                  (i)      A minimum Effective Tangible Net Worth of at least
                           $55,000,000.00 at each fiscal year end.

                  (ii)     A ratio of Debt to Effective Tangible Net Worth of
                           not more than 2 to 1 at each fiscal year end.

                  (iii)    A ratio of Current Assets to Current Liabilities of
                           not less than 1.5 to 1 at each fiscal year end.

                  (iv)     A ratio of Cash Flow to the current portion of long
                           term Debt of not less than 1.25 to 1 at each fiscal
                           year end.

                  (v)      EBITDA of at least $1.00 at the end of each fiscal
                           quarter, with EBITDA based upon the immediately
                           preceding three fiscal quarters and the current
                           quarter just ended.

6.3      PRESERVATION OF EXISTENCE; COMPLIANCE WITH APPLICABLE LAWS: Maintain
         and preserve its existence and all rights and privileges now enjoyed;
         and conduct its business and operations in accordance with all
         applicable laws, rules and regulations.


                                       -13-
<PAGE>

6.4      MERGE OR CONSOLIDATE: Not liquidate or dissolve, merge or consolidate
         with or into, or acquire any other business organization.

6.5      MAINTENANCE OF INSURANCE: Keep and maintain the Collateral insured for
         not less than its full replacement value against all risks of loss and
         damage and maintain insurance in such amounts and covering such risks
         as is usually carried by companies engaged in similar businesses and
         owning similar properties in the same general areas in which the
         Borrower operates and maintain such other insurance and coverages as
         may be required by the Bank. All such insurance shall be in form and
         amount and with companies satisfactory to the Bank.

         With respect to insurance covering properties in which the Bank
         maintains a security interest or lien, such insurance shall name the
         Bank as loss payee pursuant to a loss payable endorsement satisfactory
         to the Bank and shall not be altered or canceled except upon 10 days'
         prior written notice to the Bank. Upon the Bank's request, the Borrower
         shall furnish the Bank with the original policy or binder of all such
         insurance.

6.6      MAINTENANCE OF COLLATERAL AND OTHER PROPERTIES: Except for Permitted
         Liens, keep and maintain the Collateral free and clear of all levies,
         liens, encumbrances and security interests (including, but not limited
         to, any lien of attachment, judgment or execution not discharged,
         bonded against or released within 60 days) and defend the Collateral
         against any such levy, lien, encumbrance or security interest; comply
         with all laws, statutes and regulations pertaining to the Collateral
         and its use and operation; execute, file and record such statements,
         notices and agreements, take such actions and obtain such certificates
         and other documents as necessary to perfect, evidence and continue the
         Bank's security interest in the Collateral and the priority thereof;
         maintain accurate and complete records of the Collateral which show all
         sales, claims and allowances; and properly care for, house, store and
         maintain the Collateral in good condition, free of misuse, abuse and
         deterioration, other than normal wear and tear. The Borrower shall also
         maintain and preserve all its properties in good working order and
         condition in accordance with the general practice of other businesses
         of similar character and size, ordinary wear and tear excepted.

6.7      PAYMENT OF OBLIGATIONS AND TAXES: Make timely payment of all
         assessments and taxes and all of its liabilities and obligations
         including, but not limited to, trade payables, unless the same are
         being contested in good faith by appropriate proceedings with the
         appropriate court or regulatory agency. For purposes hereof, the
         Borrower's issuance of a check, draft or similar instrument without
         delivery to the intended payee shall not constitute payment.

6.8      INSPECTION RIGHTS AND ACCOUNTING RECORDS: The Borrower will maintain
         adequate books and records in accordance with generally accepted
         accounting principles consistently applied and in a manner otherwise
         acceptable to Bank, and, at any reasonable time and from time to time,
         permit the Bank or any representative thereof to examine and make
         copies of the records and visit the properties of the Borrower and
         discuss the business and operations of the Borrower with any employee
         or representative thereof. If the Borrower shall maintain any records
         (including, but not limited to, computer generated records or computer
         programs for the generation of such records) in the possession of a
         third party, the Borrower hereby agrees to notify such third party to
         permit the Bank free access to such records at all reasonable times and
         to provide the Bank with copies of any records which it may request,
         all at the Borrower's expense, the amount of which shall be payable
         immediately upon demand.

6.9      LIENS AND ENCUMBRANCES: Not create, assume or permit to exist any
         security interest, encumbrance, mortgage, deed of trust, or other lien
         (including, but not limited to, a lien of attachment, judgment or
         execution) affecting any of the Borrower's properties, or execute or
         allow to be filed any financing statement or continuation thereof
         affecting any of such properties, except for Permitted Liens or as
         otherwise provided in this Agreement, and except liens and security
         interests associated with Indebtedness of up to $1,000,000.00 in any
         one fiscal year.


                                       -14-
<PAGE>

6.10     TRANSFER ASSETS: Not, after the date hereof, sell, contract for sale,
         convey, transfer, assign, lease or sublet, any of its assets
         (including, but not limited to, the Collateral) except in the Ordinary
         Course of Business and, then, only for full, fair and reasonable
         consideration.

6.11     CHANGE IN NATURE OF BUSINESS: Not make any material change in its
         financial structure or the nature of its business as existing or
         conducted as of the date hereof.

6.12     COMPENSATION OF EMPLOYEES: Compensate its employees for services
         rendered at an hourly rate at least equal to the minimum hourly rate
         prescribed by any applicable federal or state law or regulation.

6.13     CAPITAL EXPENSE: Not make any fixed capital expenditure or any
         commitment therefor, including, but not limited to, incurring liability
         for leases which would be, in accordance with generally accepted
         accounting principles, reported as capital leases, or purchase any real
         or personal property in an aggregate amount exceeding $14,000,000.00 in
         any one fiscal year.

6.14     NOTICE: Give the Bank prompt written notice of any and all (i) Events
         of Default; (ii) litigation, arbitration or administrative proceedings
         to which the Borrower is a party and in which the claim or liability
         exceeds $500,000.00 or which affects the Collateral; (iii) other
         matters which have resulted in, or might result in a material adverse
         change in the Collateral or the financial condition or business
         operations of the Borrower, and (iv) any enforcement, cleanup, removal
         or other governmental or regulatory actions instituted, completed or
         threatened against the Borrower or any of its properties.

6.15     ENVIRONMENTAL COMPLIANCE: The Borrower shall conduct its operations and
         keep and maintain all of its property in compliance with all
         Environmental Laws and, upon the written request of the Bank, the
         Borrower shall submit to the Bank, at the Borrower's sole cost and
         expense, at reasonable intervals, a report providing the status of any
         environmental, health or safety compliance, hazard or liability.

6.16     INVENTORY:

                  (i)      Except as provided herein below, the Borrower's
                           inventory shall, at all times, be in the Borrower's
                           physical possession, shall not be held by others on
                           consignment, sale on approval, or sale or return and
                           shall be kept only at: 607 Airport Road, Napa, CA
                           94558, 38558 Rd. 128, Cutler, CA 93615; 8418 South
                           Lac Jac Ave., Parlier, CA 93648; 7409 W. Central
                           Ave., Fresno, CA 93706; 401 S. St. Helena Hwy., St.
                           Helena, CA 94574; 1777 Metz Road, Soledad, CA 93960;
                           and 1075 Golden Gate Drive, Napa, CA 94559.

                  (ii)     The Borrower shall keep correct and accurate records.

                  (iii)    All inventory shall be of good and merchantable
                           quality, free from defects.

                  (iv)     The inventory shall not at any time or times
                           hereafter be stored with a bailee, warehouseman or
                           similar party without the Bank's prior written
                           consent and, in such event, the Borrower will
                           concurrently therewith cause any such bailee,
                           warehouseman or similar party to issue and deliver to
                           the Bank, in form acceptable to the Bank, warehouse
                           receipts in the Bank's name evidencing the storage of
                           inventory.

                  (v)      At any reasonable time and from time to time during
                           normal business hours and with reasonable notice,
                           allow Bank to have the right, upon demand, to inspect
                           and examine inventory and to check and test the same
                           as to quality, quantity, value


                                       -15-
<PAGE>

                           and condition and the Borrower agrees to reimburse
                           the Bank for the Bank's reasonable costs and expenses
                           in so doing.

6.17     LOCATION OF THE HARVESTED CROPS: Any Crops now or hereafter harvested
         or removed from the Real Property shall not be stored with a bailee,
         warehouseman or similar party without the Bank's prior written consent
         and shall be kept only at the following location(s): 38558 Rd. 128,
         Cutler, CA 93615; 8418 South Lac Jac Ave., Parlier, CA 93648; 7409 W.
         Central Ave., Fresno, CA 93706; 401 S. St. Helena Hwy., St. Helena, CA
         94574; 1777 Metz Road, Soledad, CA 93960; and 1075 Golden Gate Drive,
         Napa, CA 94559.

6.18     CARE AND PRESERVATION OF THE CROPS:

                  (i)      Attend to and care for the Crops and do or cause to
                           be done any and all acts that may at any time be
                           appropriate or necessary to grow, farm, cultivate,
                           irrigate, fertilize, fumigate, prune, harvest, pick,
                           clean, preserve and protect the Crops.

                  (ii)     Not commit or suffer to be committed any waste of or
                           damage to the Crops

                  (iii)    Permit the Bank and any of its agents, employees or
                           representatives to enter upon the Real Property at
                           any reasonable time and from time to time for the
                           purpose of examining and inspecting the Crops and the
                           Real Property.

                  (iv)     Harvest and prepare the Crops for market and promptly
                           notify the Bank when any of the Crops are ready for
                           market.

                  (v)      Keep the Crops separate and always capable of
                           identification.

                  (vi)     Comply with any requirements or instructions of the
                           Bank with respect to hauling, shipping, storing,
                           marketing and otherwise preparing, handling and
                           disposing of the Crops.

6.19     EVIDENCE OF WATER AVAILABILITY: At such times as the Bank may request,
         to deliver to the Bank a certificate stating that the amount of water
         available and projected to be available is sufficient to conduct
         operations materially similar to prior years' operations, as evidenced
         by information provided by the Borrower to the Bank. Such certificate
         shall be signed, at the Bank's option, either by the Borrower or by an
         independent third party, such as an officer of the Borrower's water
         district or other supplier of water.

                                     SECTION

                                        7

                                 EVENTS OF DEFAULT

         Any one or more of the following described events shall constitute an
         event of default (an "Event of Default") under this Agreement:

7.1      NON-PAYMENT: Any Borrower shall fail to pay the principal amount of any
         Obligations when due or interest on the Obligations within 5 days of
         when due.

7.2      PERFORMANCE UNDER THIS AGREEMENT: The Borrowers or any Guarantor shall
         fail in any material respect to perform or observe any term, covenant
         or agreement contained in this Agreement or in any document, instrument
         or agreement relating to this Agreement or any other document or
         agreement executed by the Borrowers or any Guarantor with or in favor
         of Bank and any such failure shall continue unremedied for more than 30
         days after the occurrence thereof.


                                       -16-
<PAGE>

7.3      REPRESENTATIONS AND WARRANTIES; FINANCIAL STATEMENTS: Any
         representation or warranty made by the Borrower under or in connection
         with this Agreement or any financial statement given by the Borrower or
         any guarantor shall prove to have been incorrect in any material
         respect when made or given or when deemed to have been made or given.

7.4      OTHER AGREEMENTS: If there is a default under any other agreement with
         Bank or under an agreement to which Borrower is a party with Bank or
         with a third party or parties resulting in a right by the Bank or by
         such third party or parties, whether or not exercised, to accelerate
         the maturity of any Indebtedness in an amount in excess of $250,000.00.

7.5      INSOLVENCY: The Borrower or any guarantor shall: (i) become insolvent
         or be unable to pay its debts as they mature; (ii) make an assignment
         for the benefit of creditors or to an agent authorized to liquidate any
         substantial amount of its properties and assets; (iii) file a voluntary
         petition in bankruptcy or seeking reorganization or to effect a plan or
         other arrangement with creditors; (iv) file an answer admitting the
         material allegations of an involuntary petition relating to bankruptcy
         or reorganization or join in any such petition; (v) become or be
         adjudicated a bankrupt; (vi) apply for or consent to the appointment
         of, or consent that an order be made, appointing any receiver,
         custodian or trustee, for itself or any of its properties, assets or
         businesses; or (vii) in an involuntary proceeding, any receiver,
         custodian or trustee shall have been appointed for all or substantial
         part of the Borrower's or guarantor's properties, assets or businesses
         and shall not be discharged within 60 days after the date of such
         appointment.

7.6      EXECUTION: Any writ of execution or attachment or any judgment lien
         shall be issued against any property of the Borrower and shall not be
         discharged or bonded against or released within 60 days after the
         issuance or attachment of such writ or lien.

7.7      REVOCATION OR LIMITATION OF GUARANTY: Any guaranty shall be revoked or
         limited or its enforceability or validity shall be contested by any
         guarantor, by operation of law, legal proceeding or otherwise or any
         guarantor who is a natural person shall die.

7.8      SUSPENSION: The Borrower shall voluntarily suspend the transaction of
         business or allow to be suspended, terminated, revoked or expired any
         material permit, license or approval of any governmental body necessary
         to conduct the Borrower's business as now conducted.

7.9      MATERIAL ADVERSE CHANGE: If there occurs a material adverse change in
         the Borrower's business or financial condition, or if there is a
         material impairment of the prospect of repayment of any portion of the
         Obligations or there is a material impairment of the value or priority
         of the Bank's security interest in the Collateral.

7.10     CHANGE IN OWNERSHIP: There shall occur a sale, transfer, disposition or
         encumbrance (whether voluntary or involuntary to), or an agreement
         shall be entered into to do so with, any Person or group of Persons (as
         such terms are defined pursuant to Federal securities laws) with
         respect to more than 19% of the issued and outstanding capital stock of
         the Borrower and, as a result thereof, such Person or group of Persons
         has the ability to direct or cause the direction of the management and
         policies of the Borrower.

7.11     IMPAIRMENT OF COLLATERAL. There shall occur any injury or damage to all
         or any part of the Collateral or all or any part of the Collateral
         shall be lost, stolen or destroyed.

7.12     WATER QUALITY/AMOUNT. The Borrower's water is or is projected to be
         insufficient in amount or unsuitable in quality, as determined by the
         Bank in either case, to conduct operations as described in projections
         or by information provided by Borrower to the Bank.


                                       -17-


<PAGE>

                                     SECTION

                                       8

                               REMEDIES ON DEFAULT

Upon the occurrence of any Event of Default, the Bank may, at its sole and
absolute election, without demand and only upon such notice as may be required
by law:

8.1      ACCELERATION: Declare any or all of the Borrower's indebtedness owing
         to the Bank, whether under this Agreement or any other document,
         instrument or agreement, immediately due and payable, whether or not
         otherwise due and payable.

8.2      CEASE EXTENDING CREDIT: Cease making Advances or otherwise extending
         credit to or for the account of the Borrower under this Agreement or
         under any other agreement now existing or hereafter entered into
         between the Borrower and the Bank.

8.3      TERMINATION: Terminate this Agreement as to any future obligation of
         the Bank without affecting the Borrower's obligations to the Bank or
         the Bank's rights and remedies under this Agreement or under any other
         document, instrument or agreement.

8.4      LETTERS OF CREDIT: Require the Borrower to pay immediately to the Bank,
         for application against drawings under any outstanding Letters of
         Credit, the outstanding principal amount of any such Letters of Credit
         which have not expired. Any portion of the amount so paid to the Bank
         which is not applied to satisfy draws under any such Letters of Credit
         or any other obligations of the Borrower to the Bank shall be repaid to
         the Borrower without interest.

8.5      PROTECTION OF SECURITY INTEREST: Make such payments and do such acts as
         the Bank, in its sole judgment, considers necessary and reasonable to
         protect its security interest or lien in the Collateral. The Borrower
         hereby irrevocably authorizes the Bank to pay, purchase, contest or
         compromise any encumbrance, lien or claim which the Bank, in its sole
         judgment, deems to be prior or superior to its security interest.
         Further, the Borrower hereby agrees to pay to the Bank, upon demand
         therefor, all expenses and expenditures (including attorneys' fees)
         incurred in connection with the foregoing.

8.6      FORECLOSURE: Enforce any security interest or lien given or provided
         for under this Agreement or under any security agreement, mortgage,
         deed of trust or other document, in such manner and such order, as to
         all or any part of the properties subject to such security interest or
         lien, as the Bank, in its sole judgment, deems to be necessary or
         appropriate and the Borrower hereby waives any and all rights,
         obligations or defenses now or hereafter established by law relating to
         the foregoing. In the enforcement of its security interest or lien, the
         Bank is authorized to enter upon the premises where any Collateral is
         located and take possession of the Collateral or any part thereof,
         together with the Borrower's records pertaining thereto, or the Bank
         may require the Borrower to assemble the Collateral and records
         pertaining thereto and make such Collateral and records available to
         the Bank at a place designated by the Bank. The Bank may sell the
         Collateral or any portions thereof, together with all additions,
         accessions and accessories thereto, giving only such notices and
         following only such procedures as are required by law, at either a
         public or private sale, or both, with or without having the Collateral
         present at the time of the sale, which sale shall be on such terms and
         conditions and conducted in such manner as the Bank determines in its
         sole judgment to be commercially reasonable. Any deficiency which
         exists after the disposition or liquidation of the Collateral shall be
         a continuing liability of the Borrower to the Bank and shall be
         immediately paid by the Borrower to the Bank.

8.7      CARE AND POSSESSION OF THE CROPS: Enter upon the Real Property and,
         using any and all of the Borrower's equipment, machinery, tools,
         farming implements and supplies, and improvements


                                       -18-
<PAGE>

         located on the Real Property: (i) farm, cultivate, irrigate,
         fertilize, fumigate, prune and perform any other act of acts
         appropriate or necessary to grow, care for, maintain, preserve and
         protect the Crops (using any water located in, on or adjacent to the
         Real Property); (ii) harvest, pick, clean and remove the Crops from
         the Real Property; and (iii) appraise, store, prepare for public or
         private sale, exhibit, market and sell the Crops and the products
         thereof; provided that the Borrower hereby agrees that, if the
         Borrower is the owner of the Real Property, the Bank shall not be
         responsible or liable for returning the Real Property to its
         condition immediately preceding the use of the Real Property as
         provided herein or for doing such acts as may be necessary to permit
         future crops to be grown on the Real Property.

8.8      NON-EXCLUSIVITY OF REMEDIES: Exercise one or more of the Bank's rights
         set forth herein or seek such other rights or pursue such other
         remedies as may be provided by law, in equity or in any other agreement
         now existing or hereafter entered into between the Borrower and the
         Bank, or otherwise.

8.9      APPLICATION OF PROCEEDS: All amounts received by the Bank as proceeds
         from the disposition or liquidation of the Collateral shall be applied
         to the Borrower's indebtedness to the Bank as follows: first, to the
         costs and expenses of collection, enforcement, protection and
         preservation of the Bank's lien in the Collateral, including court
         costs and reasonable attorneys' fees, whether or not suit is commenced
         by the Bank; next, to those costs and expenses incurred by the Bank in
         protecting, preserving, enforcing, collecting, liquidating, selling or
         disposing of the Collateral; next, to the payment of accrued and unpaid
         interest on all of the Obligations; next, to the payment of the
         outstanding principal balance of the Obligations; and last, to the
         payment of any other indebtedness owed by the Borrower to the Bank.

                                     SECTION

                                        9

                                   MISCELLANEOUS

9.1      AMOUNTS PAYABLE ON DEMAND: If the Borrower shall fail to pay on demand
         any amount so payable under this Agreement, the Bank may, at its option
         and without any obligation to do so and without waiving any default
         occasioned by the Borrower having so failed to pay such amount, create
         an Advance under this Agreement in an amount equal to the amount so
         payable, which Advance shall thereafter bear interest as provided
         hereunder.

9.2      DEFAULT INTEREST RATE: If an Event of Default, or an event which, with
         notice or passage of time could become an Event of Default, has
         occurred or is continuing, the Borrower shall pay to the Bank interest
         on any Indebtedness or amount payable under this Agreement at a rate
         which is 3% in excess of the rate or rates then in effect under this
         Agreement.

9.3      ASSIGNMENT OF THE BORROWER'S RIGHTS IN THE CROPS:

                  (i)      If the Crops or any portion or portions thereof
                           become infected by disease or are destroyed by order
                           of any local, state or federal authority, and, by
                           reason thereof, the Borrower is entitled to be
                           indemnified by such authority, the Borrower hereby
                           assigns to the Bank any and all such sums due from
                           such authority, and the Bank is hereby authorized to
                           receive, collect and sue for the same, and the
                           Borrower hereby orders and directs that any such sums
                           be paid directly to the Bank.

                  (ii)     In addition, the Borrower hereby assigns and
                           transfers to the Bank all of the Borrower's rights
                           and interests in and to any monies now or hereafter
                           placed in any funds of any marketing association,
                           corporation, cooperative, partnership, firm or
                           individual now, heretofore or hereafter handling or
                           having to do with any of the


                                       -19-
<PAGE>

                           Crops now growing or heretofore or hereafter grown
                           on the Real Property or connected with the
                           growing, marketing, farming or other handling of
                           such Crops and the Borrower hereby assigns and
                           transfers to the Bank all stock and all other
                           interests, benefits and rights of the Borrower in
                           any such marketing association, corporation,
                           cooperative, partnership, firm or individual
                           having anything to do with such Crops and all
                           monies due or becoming due to the Borrower from
                           any one or more of them.

9.4      RELIANCE AND FURTHER ASSURANCES: Each warranty, representation,
         covenant, obligation and agreement contained in this Agreement shall be
         conclusively presumed to have been relied upon by the Bank regardless
         of any investigation made or information possessed by the Bank and
         shall be cumulative and in addition to any other warranties,
         representations, covenants and agreements which the Borrower now or
         hereafter shall give, or cause to be given, to the Bank. Borrower
         agrees to execute all documents and instruments and to perform such
         acts as the Bank may reasonably deem necessary to confirm and secure to
         the Bank all rights and remedies conferred upon the Bank by this
         agreement and all other documents related thereto.

9.5      ATTORNEYS' FEES: Borrower shall pay to the Bank all costs and expenses,
         including but not limited to reasonable attorneys fees, incurred by
         Bank in connection with the administration, enforcement, including any
         bankruptcy, appeal or the enforcement of any judgment or any
         refinancing or restructuring of this Agreement or any document,
         instrument or agreement executed with respect to, evidencing or
         securing the indebtedness hereunder.

9.6      NOTICES: All notices, payments, requests, information and demands which
         either party hereto may desire, or may be required to give or make to
         the other party hereto, shall be given or made to such party by hand
         delivery or through deposit in the United States mail, postage prepaid,
         or by facsimile delivery, or to such other address as may be specified
         from time to time in writing by either party to the other.

         TO THE BORROWER:                        TO THE BANK:

         GOLDEN STATE VINTNERS                    SANWA BANK CALIFORNIA
         607 Airport Road                         Fresno Office (CBC)
         Napa, CA 94558                           2035 Fresno Street
         Attn: Jeffrey B. O'Neill                 Fresno, CA 93721
         FAX: (707) 254-4900                      Attn: Robert Griffin
         Or                                       FAX: (559) 487-2157
         8418 S. Lac Jac Ave.
         Parlier, CA 93648
         Attn: Brian R. Thompson
         FAX: (559) 638-6272

9.7      WAIVER: Neither the failure nor delay by the Bank in exercising any
         right hereunder or under any document, instrument or agreement
         mentioned herein shall operate as a waiver thereof, nor shall any
         single or partial exercise of any right hereunder or under any other
         document, instrument or agreement mentioned herein preclude other or
         further exercise thereof or the exercise of any other right; nor shall
         any waiver of any right or default hereunder, or under any other
         document, instrument or agreement mentioned herein, constitute a waiver
         of any other right or default or constitute a waiver of any other
         default of the same or any other term or provision.

9.8      CONFLICTING PROVISIONS: To the extent the provisions contained in this
         Agreement are inconsistent with those contained in any other document,
         instrument or agreement executed pursuant hereto, the terms and
         provisions contained herein shall control. Otherwise, such provisions
         shall be considered cumulative.


                                       -20-
<PAGE>

9.9      BINDING EFFECT; ASSIGNMENT: This Agreement shall be binding upon and
         inure to the benefit of the Borrower and the Bank and their respective
         successors and assigns, except that the Borrower shall not have the
         right to assign its rights hereunder or any interest herein without the
         prior written consent of the Bank. The Bank may sell, assign or grant
         participation in all or any portion of its rights and benefits
         hereunder. The Borrower agrees that, in connection with any such sale,
         grant or assignment, the Bank may deliver to the prospective buyer,
         participant or assignee financial statements and other relevant
         information relating to the Borrower and any guarantor.

9.10     JURISDICTION: This Agreement, any notes issued hereunder, the rights of
         the parties hereunder to and concerning the Collateral, and any
         documents, instruments or agreements mentioned or referred to herein
         shall be governed by and construed according to the laws of the State
         of California without regard to conflict of law principles, to the
         jurisdiction of whose courts the parties hereby submit.

9.11     WAIVER OF JURY TRIAL: THE BORROWER AND THE BANK EACH WAIVE THEIR
         RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION
         BASED UPON OR ARISING OUT OF OR RELATED TO THIS AGREEMENT, THE OTHER
         LOAN DOCUMENTS, OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY, IN
         ANY ACTION, PROCEEDING OR OTHER LITIGATION OF ANY TYPE BROUGHT BY ANY
         OF THE PARTIES AGAINST ANY OTHER PARTY OR PARTIES, WHETHER WITH RESPECT
         TO CONTRACT CLAIMS, TORT CLAIMS, OR OTHERWISE. THE BORROWER AND THE
         BANK EACH AGREE THAT ANY SUCH CLAIM OR CAUSE OF ACTION SHALL BE TRIED
         BY A COURT TRIAL WITHOUT A JURY. WITHOUT LIMITING THE FOREGOING, THE
         PARTIES FURTHER AGREE THAT THEIR RESPECTIVE RIGHT TO A TRIAL BY JURY IS
         WAIVED BY OPERATION OF THIS SECTION AS TO ANY ACTION, COUNTERCLAIM OR
         OTHER PROCEEDING WHICH SEEKS, IN WHOLE OR IN PART, TO CHALLENGE THE
         VALIDITY OR ENFORCEABILITY OF THIS AGREEMENT OR THE OTHER LOAN
         DOCUMENTS OR ANY PROVISION HEREOF OR THEREOF. THIS WAIVER SHALL APPLY
         TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO
         THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS.

9.12     COUNTERPARTS: This Agreement may be executed in any number of
         counterparts and all such counterparts taken together shall be deemed
         to constitute one and the same instrument.

9.13     HEADINGS: The headings herein set forth are solely for the purpose of
         identification and have no legal significance.

9.14     ENTIRE AGREEMENT AND AMENDMENTS: This Agreement and all documents,
         instruments and agreements mentioned herein constitute the entire and
         complete understanding of the parties with respect to the transactions
         contemplated hereunder. All previous conversations, memoranda and
         writings between the parties pertaining to the transactions
         contemplated hereunder not incorporated or referenced in this Agreement
         or in such documents, instruments and agreements are superseded hereby.
         This Agreement may be amended only by an instrument in writing signed
         by the Borrower and the Bank.


                                       -21-
<PAGE>

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


BANK:                                   BORROWER:

SANWA BANK CALIFORNIA                   GOLDEN STATE VINTNERS

BY:__________________________________   BY:_____________________________________
NAME: Robert Griffin, Vice President    NAME: Brian R. Thompson, CFO



                                        BY:_____________________________________
                                        NAME: Ralph Lenamon, Assistant Treasurer


                                       -22-
<PAGE>

                                   EXHIBIT "A"
                          DESCRIPTION OF REAL PROPERTY

All that real property located in ________________ County, State of California,
legally described as follows:


                                       1


<PAGE>

                          CERTIFIED CORPORATE RESOLUTION TO BORROW

         WHEREAS, GOLDEN STATE VINTNERS (the "Corporation") has made application
to SANWA BANK CALIFORNIA (the "Bank") for credit accommodations which may
consist of but shall in no way be limited to the following: the renewal,
continuation or extension of an existing obligation; the extension of a new
loan, line of credit or commitment; the issuance of letters of credit or
banker's acceptances; or the purchase or sale through Bank of foreign
currencies.

         RESOLVED, that: any two, acting together, of the following officers:
JEFFREY B. O'NEIL, as the CHIEF EXECUTIVE OFFICER of the Corporation or BRIAN R.
THOMPSON, as the CHIEF FINANCIAL OFFICER of the Corporation, or RALPH LENAMON,
as the ASSISTANT TREASURER of the Corporation, are authorized, in the name of
and on behalf of the Corporation to:

         (a)      Borrow money from the Bank in such amounts and upon such terms
                  and conditions as are agreed upon by the officers of the
                  Corporation and the Bank; and execute and deliver or endorse
                  such evidences of indebtedness or renewals thereof or
                  agreements therefor as may be required by the Bank, all in
                  such form and content as the officers of the Corporation
                  executing such documents shall approve (which approval shall
                  be evidenced by the execution and delivery of such documents);
                  provided, however, that the maximum amount of such
                  indebtedness shall not exceed the principal sum of
                  $28,000,000.00 exclusive of any interest, fees, attorneys'
                  fees and other costs and expenses related to the indebtedness.

         (b)      Execute such evidences of indebtedness, agreements, security
                  instruments and other documents and to take such other actions
                  as are herein authorized.

         (c)      Sell to or discount or re-discount with the Bank any and all
                  negotiable instruments, contracts or instruments or evidences
                  of indebtedness at any time held by the Corporation; and
                  endorse, transfer and deliver the same, together with
                  guaranties of payment or repurchase thereof, to the Bank (for
                  which the Bank is hereby authorized and directed to pay the
                  proceeds of such sale, discount or re-discount as directed by
                  such endorsement without inquiring into the circumstances of
                  its issue or endorsement or the disposition of such proceeds).

         (d)      Withdraw, receive and execute receipts for deposits and
                  withdrawals on accounts of the Corporation maintained with the
                  Bank.

         (e)      Grant security interests and liens in any real, personal or
                  other property belonging to or under the control of the
                  Corporation as security for any indebtedness of the
                  Corporation to the Bank; and execute and deliver to the Bank
                  any and all security agreements, pledges, mortgages, deeds of
                  trust and other security instruments and any other documents
                  to effectuate the grant of such security interests and liens,
                  which security instruments and other documents shall be in
                  such form and content as the officers of the Corporation
                  executing such security instruments and other documents shall
                  approve and which approval shall be evidenced by the execution
                  and delivery of such security instruments and other documents.

         (f)      Apply for letters of credit or seek the issuance of banker's
                  acceptances under which the Corporation shall be liable to the
                  Bank for repayment.

         (g)      Purchase and sell foreign currencies, on behalf of the
                  Corporation, whether for immediate or future delivery, in such
                  amounts and upon such terms and conditions as the officer(s)
                  authorized herein may deem appropriate, and give any
                  instructions for transfers or deposits of monies by check,
                  drafts, cable, letter or otherwise for any purpose incidental
                  to the

                                      -1-
<PAGE>

                  foregoing, and authorize or direct charges to the
                  depository account or accounts of the Corporation for the
                  cost of any foreign currencies so purchased through the
                  Bank.

         (h)      To designate in writing to the Bank in accordance with the
                  terms of any agreement or other document executed by the
                  above-named individuals one or more individuals who shall have
                  the authority to as provided herein, to:

                  (1)      request advances under lines of credit extended by
                           the Bank to the Corporation;

                  (2)      apply for letters of credit or seek the issuance of
                           banker's acceptances under which the Corporation
                           shall be liable to the Bank for repayment;

                  (3)      make deposits and receive and execute receipts for
                           deposits on accounts of the Corporation maintained
                           with the Bank;

                  (4)      make withdrawals and receive and execute receipts for
                           withdrawals on account of the Corporation maintained
                           with the Bank;

                  (5)      purchase and sell foreign currencies.

         (i)      Transact any other business with the Bank incidental to the
                  powers hereinabove stated.

         RESOLVED FURTHER, that all such evidences of indebtedness, agreements,
security instruments and other documents executed in the name of and on behalf
of the Corporation and all such actions taken on behalf of the Corporation in
connection with the matters described herein are hereby ratified and approved.

         RESOLVED FURTHER, that the Bank is authorized to act upon these
resolutions until written notice of their revocation is delivered to the Bank.

         RESOLVED FURTHER, that any resolution set forth herein is in addition
to and does not supersede any resolutions previously given by the Corporation to
the Bank.

         RESOLVED FURTHER, that the Secretary of the Corporation be, and hereby
is, authorized and directed to prepare, execute and deliver to the Bank a
certified copy of the foregoing resolutions.

         I do hereby certify that I am Brian B. Thompson, the Secretary of
GOLDEN STATE VINTNERS, a California corporation, and I do hereby further certify
that the foregoing is a true copy of the resolutions of the Board of Directors
of the Corporation adopted and approved at a meeting which was duly called and
held in accordance with all applicable provisions of law and the Articles and
By-Laws of the Corporation, on the ________ day of _______________, 2000, at
which meeting a majority of the Board of Directors of the Corporation was
present and voted in favor of the resolutions.

         I hereby further certify that such resolutions are presently in full
force and effect and have not been amended or revoked. I do further certify that
the following persons have been duly elected and qualified as and, this day are,
officers of the Corporation, holding their respective offices appearing below
their names, and that the signatures appearing opposite their names are the
genuine signatures of such persons.

NAME OF OFFICER: JEFFREY B. O'NEILL        ____________________________________
                                                              (SIGNATURE)
TITLE: CHIEF EXECUTIVE OFFICER


NAME OF OFFICER: BRIAN R. THOMPSON         ____________________________________
                                                              (SIGNATURE)


                                      -2-
<PAGE>

TITLE: CHIEF FINANCIAL OFFICER


NAME OF OFFICER: RALPH LENAMON             ____________________________________
                                                      (SIGNATURE)
TITLE: ASSISTANT TREASURER


IN WITNESS WHEREOF, this document is executed as of the _____ day of
_____________, 2000.

NAME OF CORPORATION:           GOLDEN STATE VINTNERS

                               BY:____________________________________

                               NAME: BRIAN B. THOMPSON, SECRETARY



                                      -3-
<PAGE>



[GRAPHIC OMITTED]

                               LOAN DISBURSEMENT INSTRUCTIONS

                                       LINE OF CREDIT

Date:as of July 5, 2000_____________________________

The undersigned hereby instructs Sanwa Bank California to disburse the proceeds
of this loan as shown below:

                DISBURSEMENT                                      AMOUNT

   1.   CREDITED TO THE FOLLOWING ACCOUNT: All
        Advances to be credited to Account Number
        0293-36525 upon the request of any officer
        of the Borrower or Brad Harrison.                   $ _______________



                                          TOTAL:            $_______________

            (Authorizing signatures appear on attached page entitled
          "AUTHORIZING SIGNATURES FOR LOAN DISBURSEMENT INSTRUCTIONS")



                                      -1-
<PAGE>


            AUTHORIZING SIGNATURES FOR LOAN DISBURSEMENT INSTRUCTIONS

The following signature(s) authorize disbursement of loan proceeds as set forth
in the preceding instructions consisting of 1 page(s).


                                  BORROWER:

                                  GOLDEN STATE VINTNERS

                                  BY:_____________________________________
                                  NAME:  Brian R. Thompson, CFO



                                  BY:______________________________________
                                  NAME:  Ralph Lenamon, Assistant Treasurer



                                      -2-