<PAGE>

                                                                   EXHIBIT 10.36

                                 LEASE AGREEMENT


                               ARTICLE 1. RECITALS

         Section 1.01. This Lease Agreement is made effective as of February 1,
2001 by and between HILLTOWN PROPERTIES ("Landlord") and SCHEID VINEYARDS INC.
("Tenant") with respect to the following facts:

         A.    The leased premises is presently subject to a lease by and
               between Landlord and Sysco Produce ("Sysco"), which lease expires
               August 31, 2001.

         B.    Landlord, Tenant and Sysco have entered into an agreement whereby
               Landlord shall lease the subject premises to Tenant pursuant to
               the terms of this Lease; and Landlord shall absolve and release
               Sysco from any obligations under its lease of the premises
               incurred from and after the effective date of this Lease, i.e.
               February 1, 2001; and Sysco shall compensate Tenant, pursuant to
               separate agreement, in consideration of Tenant entering into this
               Lease on the subject premises.

         C.   Tenant shall take the Premises subject to any existing sublease on
              a portion thereof to Terry Fleming.

                           ARTICLE 2. LEASED PREMISES

         Section 2.01. Landlord leases to Tenant, and Tenant hires from
Landlord, for the term at the rental and upon the conditions in this Lease, real
property in the County of Monterey, State of California consisting of an
approximate 6,665 sq. ft. office building located at 305 Hilltown Road, Salinas,
California 93908, including the parking lot serving such office building, all of
which are referred to as Parcel A as shown on that Record of Survey recorded
October 28, 1999 at Volume 23 of Surveys, Page 20, Official Records of Monterey
County, California (A.P. No. 161-012-007). Such real property, including the
building shall be called the "Premises".

                      ARTICLE 3. TERM OF LEASE AND RENEWAL

         Section 3.01. The term of this Lease shall be for a period of three (3)
years, commencing on February 1, 2001 and expiring, unless sooner terminated, on
January 31, 2004, which shall be called the "Term".


                                       1
<PAGE>

         Section 3.02.

               A.   In the event Tenant shall not then be in default hereunder,
                    Tenant shall have the right, not later than six (6) months
                    prior to the date of the expiration of the term of this
                    Lease, to renew the Term of this Lease for a further term of
                    three (3) years from the date of the expiration of the Term
                    of this Lease.
               B.   Such election shall be made by Tenant by serving upon
                    Landlord a notice in writing to the effect that Tenant
                    elects to renew and extend the Term of this Lease for such
                    extended term.

               C.   Except for the redetermination of rental in accordance with
                    the provisions set forth in Article 4, all other terms and
                    conditions of the original lease agreement shall apply to
                    any extended term.

        Section 3.03. Holding over after the expiration of the Term of this
Lease, or any oral extension thereof, with the consent of Landlord shall be a
tenancy from month to month, and the rentals and additional rentals upon the
covenants, conditions, limitations and agreements are subject to the exceptions
and reservations contained in this Lease.

                                 ARTICLE 4. RENT

        Section 4.01. For and during the Term of this Lease, Tenant shall pay to
Landlord rent as follows. Rent shall be due and payable on the first day of each
month.

               A.   Monthly base rent equal to Eight Thousand Three Hundred
                    Thirty One & 25/100 Dollars ($8,331.25), which is equal to
                    One & 25/100 Dollar ($1.25) per square foot times 6,665 sq.
                    ft.;

               B.   For the six (6) month period from March 1, 2001 through
                    August 31, 2001, the sum of Four Hundred Eight & 07/100
                    Dollars ($408.07) per month, which represents the remaining
                    balance due to Landlord for tenant improvements made for the
                    benefit of Sysco under the provisions of a previous Lease
                    Renewal Agreement.

               C.   Landlord acknowledges receipt of base rent for the month of
                    February, 2001 from Sysco for the account of Tenant in the
                    amount of Seven Thousand Six Hundred Seventy Seven & 41/100
                    Dollars ($7,677.41). The remaining balance of base rent for
                    February, 2001 in the amount of Six Hundred Fifty Three &
                    84/100 Dollars ($653.84) shall be paid to Landlord by Tenant
                    upon execution of this Lease.


                                       2
<PAGE>

        Section 4.02. The base monthly rental under Section 4.01.A of this Lease
shall be adjusted upward at the end of each one (1) year period of the term
hereof, including option periods, if any. The monthly rent shall be adjusted to
reflect the increase, if any, in the cost of living by adding to such monthly
rent an amount obtained by multiplying the then existing monthly rent by the
percentage by which the level of the consumer price index for the San
Francisco-Oakland Metropolitan Area for all Urban Consumers as reported by the
Bureau of Labor Statistics of the United States Department of Labor, has
increased during the previous one (1) year period. For calculating such
increase, the base index shall be the index for the month in which the term of
this lease commences. Said base index shall be compared with the index for the
month of the first (1st) anniversary of the term of this Lease to determine the
percentage increase. Thereafter, on each subsequent anniversary, the index
published for said anniversary month shall be compared with the index for the
same month of the preceding year to determine each subsequent increase. Landlord
shall notify Lessee in writing of the new monthly rent payable under the lease
based upon the cost of living increase, which monthly rental shall thereafter be
payable by Lessee under the next annual adjustment pursuant to this provision.
In no event will the amount of monthly rent be decreased under this provision.

                         ARTICLE 5. UTILITIES AND TAXES

         Section 5.01. Tenant shall pay for telephone service, all electricity
supplied to and used on the Premises by Tenant, and all energy costs incurred
for air conditioning and heating the Premises, and all other utilities supplied
to the premises, including water service, sewage disposal, garbage service and
cable television.

         Section 5.02. Tenant shall pay prior to delinquency all special
assessments and real property taxes levied or assessed upon the Property during
the Term.

                          ARTICLE 6. USE AND OCCUPANCY

         Section 6.01. Tenant shall use the Premises solely for administrative
office use, and for no other purpose without the prior written consent of
Landlord.

         Section 6.02. Tenant shall comply with and conform to all laws and
regulations, municipal, state and federal, and any and all requirements and
orders of any municipal, state or federal board or authority, present or future,
in any way relating to the condition, use or occupancy of the Premises
throughout the entire term of this Lease.

         Section 6.03. Tenant agrees, in using the Premises:

                    A.   Not to commit any waste or suffer any waste to be
                         committed upon the Premises;


                                       3
<PAGE>

                    B.   Not to commit any public or private nuisance or any
                         other act or thing which might or would disturb the
                         quiet enjoyment of any other tenant of the Premises or
                         any occupant of nearby property; and

                    C.   Not to keep, or use on the Premises any article, or
                         conduct any activity which may be prohibited by the
                         standard form of fire insurance policy, and if Tenant
                         does keep or use any such article, or if any acts are
                         performed on the Premises by Tenant which increase the
                         rate of fire insurance premiums upon the building
                         occupied by Tenant, Tenant agrees to pay to Landlord
                         the amount of increase in fire insurance premiums
                         attributable thereto on demand.

                         ARTICLE 7. HAZARDOUS MATERIALS

         Section 7.01. Tenant shall not at any time during the term use,
generate, store or dispose of, on, under or about the premises any hazardous
substance, hazardous material, hazardous waste, toxic substance, pollutant,
contaminant or related materials ("Hazardous Materials") except: (i) Hazardous
Materials held by Tenant for use in the ordinary course of the business of
Tenant; and (ii) ordinary and customary janitorial materials and cleaning
supplies.

         Section 7.02. The term "Hazardous Materials" shall mean those
substances defined as "hazardous substances", "hazardous materials", "toxic
substances", "hazardous wastes", "extremely hazardous wastes" or "restricted
hazardous wastes" or defined in similar terms as materials which are hazardous
to the environment under the laws of the Untied States and the laws of the State
of California.

         Section 7.03. Tenant, at Tenant's sole cost and expense, shall comply
with all rules, regulations, ordinances, statutes and laws of all county,
municipal, state, federal and other governmental authorities now or hereafter in
effect pertaining to any Hazardous Materials which are used, generated, stored
or disposed on, under, or about the Premises by Tenant, its employees, agents,
contractors, suppliers, customers or other invitees, or under the control of or
at the direction of Tenant.

         Section 7.04. Except as caused by the act or omission of Landlord, its
employees, agents, contractors, suppliers or other invitees, or under the
control of or at the direction of Landlord, Tenant shall indemnify, defend and
hold Landlord harmless from and against all claims, demands, actions, damages,
liability and expense arising out of the use, generation, storage or disposal of
hazardous materials on the premises at any time during the term of this Lease.


                                       4
<PAGE>

                              ARTICLE 8. FIXTURES

         Section 8.01. Tenant may install in and affix to the Premises such
fixtures and equipment as Tenant deems desirable in the practice of his
profession.

         Section 8.02. Not later than the expiration of the time within which
under any provision of this Lease Tenant is required to surrender possession of
the Premises to Landlord, Tenant may, and if prior to the expiration of such
time Landlord gives written notice requiring Tenant to do so, Tenant shall
remove all trade fixtures installed in the Premises by Tenant. All trade
fixtures not removed within such time shall become and remain the property of
Landlord. The removal of such trade fixtures shall be effected solely at the
expense of Tenant and in a manner satisfactory to Landlord and without injury or
damage to the Premises or the building, and Tenant covenants to repair
immediately, at Tenant's expense, any injury or damage caused by such removal.


                  ARTICLE 9. ALTERATIONS, REPAIRS, RESTORATION

         Section 9.01.

                A.    Tenant shall make no installations, additions, or
                      improvements in or to the Premises, except as otherwise
                      authorized in this Lease, or structural alterations or
                      changes either to the interior or exterior of the building
                      initially constructed on the Premises, or in the bearing
                      walls, supports, beams or foundations, without the written
                      consent of Landlord.

                B.    Plans and specifications showing such proposed
                      installations, additions or improvements, and alterations
                      and changes, shall be submitted to Landlord for approval
                      upon the application for such consent.

                C.    All installations, additions or improvements and
                      alterations and changes made, with the written consent of
                      Landlord, shall be made at the cost and expense of Tenant,
                      under the supervision of an architect or engineer
                      satisfactory to landlord.

                D.    If during the Term of this Lease any additions,
                      alterations or improvements in or to the Premises, as
                      distinguished from repairs, are required by any
                      governmental authority or any law, ordinance or
                      governmental regulation because of the use to which the
                      Premises are put by Tenant and not by reason of the
                      character or structure of the building, they shall be made
                      and paid for by Tenant.


                                       5
<PAGE>

                 E.   All alterations, additions or improvements which are made
                      in or to the Premises shall be surrendered with the
                      Premises upon the termination of this Lease, unless prior
                      to such termination Landlord gives Tenant written notice
                      to remove some or all thereof, in which case Tenant shall
                      cause the items so designated to be removed and the
                      Premises to be restored to their original condition, all
                      at the expense of Tenant.

         Section. 9.02. Landlord agrees to keep in good order, condition and
repair the foundations, exterior walls, downspouts, gutters and roof of the
building on the premises and the plumbing and sewage system outside said
building (but excluding the exterior and interior of all windows, doors, plate
glass, and showcases), and the parking lot; provided, however, Landlord shall
not be obligated to repair any damage thereto caused by any act or negligence of
Tenant or its employees, agents, invitees, licensees, or contractors. Landlord
shall not be obligated to make any such repairs until after the expiration of
ten (10) days' notice from Tenant to Landlord, stating the need for such repairs
or maintenance. It is expressly understood and agreed that in the event Landlord
shall fail to commence the making of such repairs or the performance of such
maintenance as he is obligated to do by the terms hereof within thirty (30) days
after the receipt of such notice, Tenant's sole right and remedy for such
failure on the part of Landlord shall be after further notice to Landlord to
cause such repairs to be made or such maintenance to be performed and to deduct
the costs and expenses thereof from the fixed rent payable hereunder; provided
that the amount of such deduction does not exceed the reasonable value of such
repairs or maintenance.

         Section. 9.03.

                  A.     Except for Landlord's obligation for repair and
                         maintenance as set forth in Section 9.02, Tenant shall
                         be responsible for all other maintenance and repair of
                         the Premises and shall so maintain the Premises in good
                         order and repair.

                  B.     Tenant agrees to pay promptly for all labor done or
                         materials furnished for any work of repair,
                         maintenance, improvement, alteration or addition done
                         by Tenant in connection with the Premises, and to keep
                         and to hold the Premises free, clear and harmless of
                         and from all liens that could arise by reason of any
                         such work. If any such lien shall at any time be filed
                         against the Premises, Tenant shall either cause the
                         same to be discharged of record within twenty (20) days
                         after the date of filing the same, or if Tenant, in its
                         discretion and in good faith, determines that such lien
                         should be contested, Tenant shall furnish such security
                         as may be necessary or required to prevent any
                         foreclosure proceedings against the Premises during the
                         pendency of such contest. If Tenant shall fail to
                         discharge such lien within such period or fail to
                         furnish such security, then, in addition to any other


                                       6
<PAGE>

                         right or remedy, Landlord may, but shall not be
                         obligated to discharge the same, either by paying the
                         amount claimed to be due or by procuring the discharge
                         of such lien by deposit in court or by giving security
                         or in such other manner as is or may be prescribed by
                         law. Tenant shall repay to Landlord on demand all sums
                         disbursed or deposited by Landlord pursuant to the
                         foregoing provisions hereof, including Landlord's cost,
                         expenses and reasonable attorney's fees incurred by
                         Landlord in connection therewith. Nothing contained
                         herein shall imply any consent or agreement on the part
                         of Landlord to subject Landlord's interest in the real
                         property, of which the Premises are a part, to
                         liability under any mechanic's lien law.

                  C.     Landlord shall at all times have the right to post and
                         to keep posted on the demised premises such notices
                         provided for under the laws of the State of California
                         for the protection of the Premises from mechanic's
                         liens or liens of a similar nature.

                         Section 9.04

                A.     Should the building situated upon the Premises and the
                       leasehold improvements be damaged or destroyed by fire,
                       casualty or hazard, then if damage is so slight as not to
                       interfere substantially with the Tenant's use of the
                       Premises, then Tenant shall notify Landlord, who shall
                       immediately undertake to make repairs to the building and
                       improvements and restore the same to substantially the
                       same condition as they were in immediately preceding such
                       damage or destruction. Such work shall be done as rapidly
                       as conditions permit. In the event such damage is so
                       slight as not to interfere substantially with Tenant's
                       use of the Premises, there shall be no abatement of rent.

                B.     Should there be total or substantial destruction in such
                       building and improvements so that the Premises are
                       rendered unusable, either in whole or in part, either
                       party shall have the right to terminate this Lease.

                C.     In the event neither party elects to terminate this
                       Lease, Landlord shall, to the extent of available
                       insurance proceeds, repair or rebuild such building and
                       improvements to substantially the same condition that
                       they were in immediately preceding such damage or
                       destruction.

                D.     Tenant shall be entitled to a reasonable suspension or
                       diminution of the fixed rent payable hereunder during the
                       time required for restoration and repair according to the
                       portion of the premises rendered unusable, taking


                                       7
<PAGE>

                       into consideration the time and extent of interference
                       with the usual conduct of Tenant's practice.

                E.     Should either party elect to terminate this Lease, the
                       proceeds of insurance shall be paid over to Landlord, and
                       such insurance proceeds shall be and become the sole and
                       absolute property of Landlord.

                F.     Should neither party elect to terminate this Lease,
                       Tenant shall deliver and pay over to Landlord all
                       insurance proceeds which may be paid to him. Landlord
                       shall hold the same in trust for the purpose of repairing
                       or rebuilding such buildings and improvements to
                       substantially the same condition that they were in
                       immediately preceding such damage or destruction. In the
                       event after such repair or rebuilding any of such
                       insurance proceeds remains in the hands of Landlord, such
                       balance shall be and become the sole and absolute
                       property of Landlord.

                G.     Tenantagrees to continue the operation of his business in
                       the premises to the extent reasonably practicable from
                       the standpoint of good business during any period of
                       reconstruction or repair.

         Section 9.05. Upon execution of the Lease, Landlord agrees to provide
to Tenant a reasonable allowance to be credited against Tenant's rental
obligation, for commercial grade carpet and paint for the leased premises, in an
amount to be agreed upon by the parties.

                            ARTICLE 10. CONDEMNATION

         Section 10.01. If during the Term hereof there shall be a "total
taking" by a public authority under the power of eminent domain, then the
leasehold estate of Tenant in the Premises shall cease and terminate as of the
date actual physical possession thereof shall be taken. "Total taking" is
defined to be the taking of the entire Premises under the power of eminent
domain or a taking of so much of the Premises as to prevent or substantially
impair the conduct of Tenant's business therein.

         Section 10.02. If during the Term hereof there shall be a partial
taking of the Premises, this Lease shall terminate as to the portion of the
Premises taken upon the date which actual possession of the portion of the
Premises is taken pursuant to eminent domain proceedings, but this Lease shall
continue in force and effect as to the remainder of the Premises. The minimum
annual rental payable by Tenant for the balance of the term shall be equitably
abated based upon the portion of the Premises taken "Partial taking" is defined
to be the taking of only a portion of the Premises under the power of eminent
domain which does not constitute a "total taking" as defined above in Section
10.01.


                                       8
<PAGE>

         Section 10.03. All compensation and damages awarded for the taking of
the Premises, or any portion or portions thereof, shall, except as otherwise
herein provided, belong to and be the sole property of Landlord, and Tenant
shall not have any claim or be entitled to any award for diminution in value of
its leasehold hereunder or for the value of any unexpired term of this Lease;
provided, however, Tenant shall be entitled to any award that may be made for
the taking of or injury to, or on account of any cost or loss Tenant may sustain
in the removal of Tenant's merchandise, fixtures, equipment and furnishings.

         Section 10.04. If this Lease is terminated, in whole or in part,
pursuant to any of the provisions of this Article 10, all rentals and other
charges payable by Tenant to Landlord hereunder and attributable to the Premises
taken, shall be paid up to the date upon which actual physical possession shall
be taken by the condemnor, and the parties shall thereupon be released from all
further liability in relation thereto.

                       ARTICLE 11. INDEMNITY AND INSURANCE

         Section 11.01.

                  A.   Landlord shall not be liable at any time for any loss,
                       damage or injury to the property or person of any person
                       whomsoever at any time occasioned by or arising out of
                       any act or omission of the Tenant, or of anyone holding
                       under Tenant or the occupancy or use of the Premises or
                       any part thereof or the parking lot by or under the
                       Tenant, or directly or indirectly from any state or
                       condition of the Premises or any part during the Term of
                       this Lease.


                  B.   Notwithstanding anything to the contrary in this Lease
                       and, irrespective of any insurance carried by Tenant for
                       the benefit of Landlord, Tenant agrees to protect,
                       indemnify, and hold Landlord and the Premises harmless
                       from any and all damages or liabilities of whatsoever
                       nature arising under the terms of this Lease or arising
                       out of or in connection with the operation carried on by
                       Tenant on, or the use or occupancy of, the Premises.

        Section 11.02. The Tenant shall carry and maintain, during the entire
ten-n hereof, at Tenant's sole cost and expense, the following types of
insurance, in the amount specified and in the form provided for in this section:

               A.     Tenant shall procure, at Tenant's own expense, on or
                      before the date of the commencement of the term of this
                      Lease, and shall maintain continuously during the entire
                      term hereof, public liability insurance in the amount of
                      $2,000,000 combined single limit for the injury or death
                      of any number of persons or property damage. The policy or
                      policies of insurance shall


                                       9
<PAGE>

                      provide, that among the persons insured thereunder shall
                      be included Landlord and all other persons whom Landlord
                      may be required to keep insured. The amount of such
                      insurance shall be increased from time to time to meet
                      adequate levels of insurance for comparable operations.

               B.     During the term of this Lease, Tenant agrees, at its own
                      expense, to insure and keep insured the building and all
                      the improvements on the premises against loss or damage by
                      fire and such other hazards as are embraced by the
                      standard extended coverage endorsement approved for use in
                      the State of California, in an amount not less than ninety
                      percent (90%) of the replacement cost of the building and
                      all the improvements on the premises (excluding
                      foundations).

               C.     Tenant shall be responsible, at Tenant's own expense, to
                      insure and keep insured all of Tenant's personal property
                      and contents maintained on the leased premises.

         Section 11.03.

               A.    All policies of insurance to be provided for herein by
                     Tenant shall be issued by companies having not less than
                     Best's AAA rating and shall be issued in the names of the
                     Tenant and the Landlord and for the mutual and joint
                     benefit and protection of the parties. All public liability
                     and property damage policies shall contain a provision that
                     the Landlord, although named as an insured, shall
                     nevertheless be entitled to recovery under said policies
                     for any loss, injury or damage to Landlord, its servants,
                     agents and employees by reason of the negligence of the
                     Tenant.


               B.    Tenant shall deliver to Landlord policies evidencing the
                     insurance procured by Tenant, or to deliver in lieu thereof
                     certificates of coverage from the insurance company or
                     companies writing the policy or policies of insurance,
                     which certificates shall, among other things, designate the
                     company writing the same, the number, amount, and
                     provisions thereof Upon Landlord's written request,
                     duplicate copies of such certificates of insurance shall be
                     delivered to Landlord's mortgages.

               C.    Tenant agrees that on or before ten (10) days prior to
                     expiration of any insurance policy, Tenant will deliver to
                     Landlord written notification in the form of a receipt or
                     other similar document from the applicable insurance
                     company that said policy or policies have been renewed, or
                     deliver certificates of coverage from another good and
                     solvent insurance company for such coverage.


                                       10
<PAGE>

               D.    Tenant shall procure an appropriate clause in, or an
                     endorsement on, any policy of fire or extended coverage
                     insurance provided herein, pursuant to which the insurance
                     companies waive subrogation or consent to a waiver of right
                     of recovery against Landlord, and Tenant does hereby agree
                     that it shall not make any claim against or seek to recover
                     from Landlord any loss or damage to its property or the
                     property of others, resulting from fire or other hazards
                     covered by such fire and extended coverage insurance.

               E.    Tenant shall, upon Landlord's written request, procure a
                     mortgagee loss payable endorsement to the policies;
                     provided, however, it is expressly understood that any
                     policy proceeds paid to such mortgagee shall be available
                     for reconstruction in accordance with the terms of this
                     Lease.

                      ARTICLE 12. ASSIGNMENT AND SUBLEASING

         Section 12.01.

               A.    Tenant shall not assign, mortgage or hypothecate this Lease
                     in whole or in part, nor sublet all or any part of the
                     leased Premises, without the prior written consent of
                     Landlord in each instance. This prohibition against
                     assigning or subletting shall be construed to include a
                     prohibition against any assignment or subletting by
                     operation of law. Landlord's consent will not unreasonably
                     be withheld.

               B.    As a condition to its consent, Landlord may require Tenant
                     to pay all expenses in connection with the assignment, and
                     Landlord may require Tenant's assignee to assume in writing
                     the obligations of Tenant under this Lease.

               C.    The consent by Landlord to any assignment or subletting
                     shall not constitute a waiver of the necessity for such
                     consent to any subsequent assignment or subletting. If this
                     Lease be assigned, or if the leased Premises or any part
                     thereof be sublet or occupied by anybody other than Tenant,
                     Landlord may collect rent from the assignee, sub-tenant, or
                     occupant, and apply the net amount collected to the rent
                     herein reserved, but no such assignment, subletting,
                     occupancy or collection shall be deemed a waiver of this
                     covenant, or the acceptance of the assignee, subtenant, or
                     occupant as tenant, or a release of Tenant from further
                     performance by Tenant of covenants on the part of Tenant.


                                       11
<PAGE>

                        ARTICLE 13. DEFAULT AND REMEDIES

         Section 13.01. This Lease shall be deemed repudiated and breached by
Tenant if, during the Term of this Lease a petition to have Tenant adjudicated a
bankrupt or a petition for reorganization or arrangement under any of the laws
of the Untied States relating to bankruptcy, be filed by Tenant, or be filed
against Tenant, and if so filed against Tenant not be dismissed, within thirty
(30) days from the date of such filing; the assets of Tenant be assumed by any
trustee or other person pursuant to any judicial proceedings; Tenant becomes
insolvent or makes an assignment for the benefit of creditors; Tenant commits
any act of bankruptcy; or any corporate Tenant or assignee or successor in
interest of Tenant commences proceedings for winding up.

         Section 13.02. Landlord may, at its option and without limiting
Landlord in the exercise of any other right or remedy he may have on account of
a default or breach by Tenant, exercise the rights and remedies specified in
Section 13.03 if:

                  A.   Tenant defaults in the payment of any money agreed to be
                       paid by Tenant to Landlord for rent or to be paid for
                       taxes and assessments or for any other purpose under this
                       Lease, and if such default continues for ten (10) days
                       after written notice to Tenant by Landlord;

                  B.   Tenant abandons the Premises for a period of thirty (30)
                       days (a period of thirty (30) days' absence while Tenant
                       shall be in default in rent shall be deemed an
                       abandonment).

         Section 13.03. On any breach, default or abandonment Landlord may
exercise any of the following rights:

                  A.   Immediately re-enter and remove all persons and property
                       from the leased Premises, storing the personal property
                       in a public warehouse or elsewhere at the cost of, for
                       the account of, and at the risk of Tenant. In the event
                       of any such re-entry by Landlord, Landlord may make any
                       repairs, additions or improvements in, to or upon the
                       Premises which may be necessary or convenient; provided,
                       however, that Landlord shall be entitled to recover from
                       Tenant the expense of said repairs or alterations only to
                       the extent necessary to restore the building to the
                       condition it was in on the commencement of the term of
                       the Lease, reasonable wear and tear excepted. In such
                       instance, the lease will be terminated and Landlord will
                       be entitled otherwise to recover all damages allowable
                       under law or this Lease.

                  B.   Terminate this Lease, in which event Tenant agrees to
                       immediately surrender possession of the Premises, and to
                       pay to Landlord, in addition to


                                       12
<PAGE>

                       any other remedy Landlord may have, all damages Landlord
                       may incur by reason of its defaults, including the cost
                       of recovering the Premises.

         Section 13.04. The damages Landlord may recover include the worth at
the time of award of the amount by which the unpaid rent for the balance of the
term after the time of award exceed the amount of such rental loss for the same
period that Tenant proves could be reasonably avoided.

         Section 13.05. Landlord's failure to take advantage of any default or
breach of covenant on the part of Tenant shall not be, or be construed as a
waiver thereof, nor shall any custom or practice which may grow up between the
parties in the course of administering this instrument be construed to waive or
to lessen the right of Landlord to insist upon the performance by Tenant of any
term, covenant or condition hereof, or to exercise any rights given him on
account of any such default. A waiver of a particular breach, or default, shall
not be deemed to be a waiver of the same or any other subsequent breach or
default. The acceptance of rent hereunder shall not be, or be construed to be, a
waiver of any term, covenant or condition of this Lease.

         Section 13.06. The rights, powers, elections and remedies of the
Landlord contained in this Lease shall be construed as cumulative and no one of
them is or shall be considered exclusive of the other or exclusive of any rights
or remedies allowed by law, and the exercise of one or more rights, powers,
elections or remedies shall not impair Landlord's right to exercise any other.

         Section 13.07. Nothing herein shall prevent Landlord from exercising
the remedy provided under California CODE OF CIVIL PROCEDURE Section 1161 et
seq. of serving a three day notice to quit and pursuing a subsequent unlawful
detainer action.


                         ARTICLE 14. LANDLORD'S GENERAL
                              PROTECTIVE PROVISIONS

         Section 14.01. Tenant shall peaceably give up and surrender to Landlord
the Premises and every part thereof to Landlord at the termination of the Term
of this Lease in as good a condition and repair as reasonable use and wear
thereof will permit.

         Section 14.02. The voluntary or other surrender of this Lease by the
Tenant, or mutual cancellation thereof, shall not work a merger and shall, at
the option of the Landlord, terminate all or any existing subleases or
subtenancies, or may, at the option of the Landlord, operate as an assignment to
Landlord of any or all such subleases or subtenancies.


                                       13
<PAGE>

         Section 14.03. In the event of a sale or conveyance by the Landlord of
the Premises or any part containing the Premises, Landlord shall be released
from any future liability upon any of the covenants or conditions, expressed or
implied, in favor of tenant, and in such event, the Tenant agrees to look solely
to the responsibility of the successor in interest of the Landlord in and to
this Lease.

         Section 14.04. At the expiration or earlier termination of this Lease,
Tenant shall execute, acknowledge and deliver to Landlord, within five (5) days
after written demand from Landlord to Tenant, any quitclaim deed or other
document required by any reputable title company to remove the cloud of this
Lease from the real property.

                         ARTICLE 15. GENERAL PROVISIONS

         Section 15.01. All of the provisions of this Lease shall be deemed as
running with the land, and construed to be "conditions" as well as "covenants"
as though the words specifically expressing or imparting covenants and
conditions were used in each separate provision.

         Section 15.02. No failure by either Landlord or Tenant to insist upon
the strict performance by the other of any covenant, agreement, term or
condition of this Lease or to exercise any right or remedy consequent upon a
breach thereof, shall constitute a waiver of any such breach or of such
covenant, agreement, term or condition. No waiver of any breach shall affect or
alter this Lease, but each and every covenant, condition, agreement and term of
this Lease shall continue in full force and effect with respect to any other
then existing or subsequent breach.

         Section 15.03. Time is of the essence of this Lease, and of each
provision.

         Section 15.04. If either party shall be delayed or prevented from the
performance of any act required by this Lease by reason of acts of God, strikes,
lockouts, labor troubles, inability to procure materials, restrictive
governmental laws, or regulations or other cause, without fault and beyond the
reasonable control of the party obligated (financial inability excepted),
performance of such act shall be excused for the period of the delay; and the
period for the performance of any such act shall be extended for a period
equivalent to the period of such delay, provided, however, nothing in this
section shall excuse Tenant from the prompt payment of any rental or other
charge required of Tenant except as may be expressly provided elsewhere in this
Lease.

         Section 15.05. Each and all of the covenants, conditions and
restrictions in this Lease shall inure to the benefit of and shall be binding
upon the successors in interest of Landlord, and subject to the restrictions of
Article 12, the authorized encumbrancers, assignees, transferees, subtenants,
licensees, and other successors in interest of Tenant.


                                       14
<PAGE>

         Section 15.06. This Lease contains the entire agreement of the parties
with respect to the matters covered by this Lease, and no other agreement,
statement or promise made by any party, or to any employee, officer, or agent of
any party, which is not contained in this Lease shall be binding or valid.

         Section 15.07. If any term, covenant, condition or provision of this
Lease is held by a court of competent jurisdiction to be invalid, void or
unenforceable, the remainder of the provisions shall remain in full force and
effect and shall in no way be affected, impaired or invalidated.

         Section 15.08. Should either party commence any legal action or
proceeding against the other based on this Lease, the prevailing party shall be
entitled to an award of attorney's fees.

         Section 15.09. This Lease is not subject to modification except in
writing.

         Section 15.10.

                  A.   All notices, demands or requests from one party to
                       another may be personally delivered or sent by mail,
                       certified or registered, postage prepaid, to the
                       addresses stated in this section, and shall be deemed to
                       have been given at the time of personal delivery or at
                       the time of mailing.

                  B.   All notices, demands or requests from Tenant to Landlord
                       shall be given to Landlord at Post Office Box 398,
                       Soledad, CA 93960.

                  C.   All notices, demands or requests from Landlord to Tenant
                       shall be given at 305 Hilltown, Salinas, CA 93908.

                  D.   Each party shall have the right, from time to time, to
                       designate a different address by notice given in
                       conformity with this section.

                  ARTICLE 16. FIRST RIGHT OF OFFER TO PURCHASE

         Section 16.1. Provided Tenant is not in default, Tenant shall have a
First Right of Offer to Purchase the premises during the Term or any extension
thereof If Landlord proposes to sell the premises during the Term or any
extension thereof, Landlord shall provide Tenant written notice of its intention
to sell the Property, referred to as the "Notice of Sale". The Notice of Sale
shall include Landlord's terms of a proposed sale. For a period of thirty (30)
days after receiving the Notice of Sale, Tenant shall have the exclusive right
to either accept or reject the terms proposed by landlord in the Notice of Sale.
In the event that Landlord does not receive


                                       15
<PAGE>

written notice from Tenant within said thirty (30) day period, then Tenant's
First Right of Offer to Purchase shall be deemed expired, and Landlord may
proceed to market the Property to any other prospective purchaser. If Tenant
accepts Landlord's proposal but fails to complete the purchase in accordance
with its terms, Landlord shall be free to sell the Property thereafter to anyone
on any terms. Tenant's First Right of Offer to Purchase does not apply to a sale
in connection within eminent domain, threat of condemnation or other
non-voluntary sales, to interfamily or inter-ownership transfers, or to
transfers by Landlord to a trust created by Landlord.

                                    LANDLORD:

                                        HILLTOWN PROPERTIES
                                        By: /s/ LOUIS HUNTINGTON
                                            -----------------------------------
Date: 3/9/01                            Title: OWNER
                                               --------------------------------

                                        TENANT:

                                        SCHEID VINEYARDS INC.
                                        By: /s/ SCOTT D. SCHEID
                                            -----------------------------------
Date: 3/5/01                            Title: CHIEF OPERATING OFFICER
                                               --------------------------------

                                       16