<PAGE>

                           AGRICULTURAL CREDIT AGREEMENT
                                       (Crops)

This Agricultural Credit Agreement ("Agreement") is made and entered into this
4th day of June, 1997 by and between SANWA BANK CALIFORNIA (the "Bank") and
SCHEID VINEYARDS INC. (the "Borrower").

                                     SECTION I
                                     DEFINITIONS

1.01. 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):

     A.  "ADVANCE" shall mean an advance to the Borrower under any line of
     credit facility or similar facility provided for in Section II of this
     Agreement which provides for draws by the Borrower against an established
     credit line.

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

     C.  "COLLATERAL" shall mean the property in which the Bank is granted a
     security interest pursuant to provisions of the section herein entitled
     "Collateral", 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.

     D.  "DEBT" shall mean all liabilities of the Borrower less Subordinated
     Debt.

     E.  "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).

     F.  "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 (i) 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 Materials at, in, or from property owned, operated or
     controlled by the Borrower, or (ii) any other circumstances forming the
     basis of any violation, or alleged violation, of any Environmental Law.

     G.  "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.

     H.  "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.

     I.  "EVENT OF DEFAULT" shall have the meaning set forth in the section
     herein entitled "Events of Default".

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

     K.  "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.

     L.  "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.

     M.  "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 either not yet due or being contested
     in good faith, provided proper reserves are maintained therefor in
     accordance with generally accepted accounting procedure;  (iii) liens of
     materialmen, mechanics, warehousemen, 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 pursuant to this Agreement;
     (v) liens and security interests which, as of the date hereof, have been
     disclosed to and


                                         (1)
<PAGE>

     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.

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

     O.  "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.


1.02.  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.

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


                                     SECTION II

                                  CREDIT FACILITIES

2.01.  COMMITMENT TO LEND.  Subject to the terms and conditions of this
Agreement and so long as no Event of Default occurs, the Bank agrees to extend
to the Borrower the credit accommodations that follow.

2.02.  CROP LINE OF CREDIT.  The Bank agrees to make loans and Advances to the
Borrower, upon the Borrower's request therefor made prior to the Expiration Date
(as defined below in this Section 2.02), up to a total principal amount from
time to time outstanding of not more than $10,500,000.00; provided that Advances
under this Crop Line of Credit shall be made in accordance with the crop budget
dated May 1, 1997  for the crop year commencing on December 1, 1996 and ending
on November 30, 1997, which budget is attached hereto as Exhibit "A" (the "Crop
Budget").  Within the foregoing limits, the Borrower may borrow, partially or
wholly prepay, and reborrow under this Crop Line of Credit.

     A.  PURPOSE.  Advances made under this Crop Line of Credit shall be used to
     pay off the principal balance of an existing loan with the Bank, pay off
     the principal balance of an existing loan to Vineyard Investors 1972 with
     the Bank; and provide funds for the Borrower's crop production as set forth
     in the Crop Budget.

     B.  INTEREST RATE.  Interest shall accrue on the outstanding principal
     balance of Advances under this Crop Line of Credit at a variable rate equal
     to the Bank's Reference Rate, per annum, as it may change from time to
     time.  (Such rate is referred to in this Section 2.02 as the "Variable
     Rate".)  The Variable Rate shall be adjusted concurrently with any change
     in the Reference Rate.  Interest shall be calculated on the basis of 360
     days per year but charged on the actual number of days elapsed.

     C.  REPAYMENT.  Unless sooner due in accordance with the terms of this
     Agreement, the Borrower hereby promises and agrees to pay principal and
     interest on the following terms:

     The Borrower hereby promises and agrees to pay interest quarterly on the
     5th day of each September, December, March, and June, commencing on
     September 5, 1997.

     On June 5, 1998 the Borrower hereby promises and agrees to pay to the Bank
     in full the aggregate unpaid principal balance of all Advances then
     outstanding, together with all accrued and unpaid interest thereon.

     Any payment received by the Bank shall, at the Bank's option, first be
     applied to pay any late fees or other fees then due and unpaid, and then to
     interest then due and unpaid and the remainder thereof (if any) shall be
     applied to reduce principal.

     D.  FIXED RATE ALTERNATIVE PRICING.  In addition to Advances based upon the
     Variable Rate ("Variable Rate Advances"), at the Borrower's election, the
     Bank hereby agrees to make Advances to the Borrower under this Crop Line of
     Credit at a fixed rate ("Fixed Rate") to be quoted and offered by the Bank
     from time to time upon the request of the Borrower.  The Bank shall only
     quote and offer such Fixed Rate for Advances in the minimum amount of
     $100,000.00 and for such period of time (each an "Interest Period") as the
     Bank may quote and offer, provided that the Interest Period shall be for a
     minimum of at least 30 days and provided further that any Interest Period
     shall not extend beyond the Expiration Date (as defined below) of this
     facility.  Advances based upon the Fixed Rate are hereinafter referred to
     as "Fixed Rate Advances".

     Interest on any Fixed Rate 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 the Bank interest on any
     Fixed Rate Advance with an Interest Period of 90 days or less on the last
     day of the relevant Interest Period.  The Borrower further promises and
     agrees to pay the Bank interest on any Fixed Rate Advance with an Interest
     Period in excess of 90 days on a quarterly basis (i.e., on the last day of
     each 90-day period occurring in such Interest Period) and on the last day
     of the relevant Interest Period.  If interest is not paid as and when it is
     due, the amount of such unpaid interest shall bear interest, until paid in
     full, at a rate of interest equal to the Variable Rate.

          (i)  REPAYMENT OF FIXED RATE ADVANCES.  Unless sooner due in
          accordance with other terms of this Agreement, or unless adjusted at
          the end of the relevant Interest Period as described below, the
          Borrower hereby promises and agrees to pay the Bank the principal
          amount of each Fixed Rate Advance, together with accrued and unpaid
          interest thereon, on the last day of the Interest Period pertaining to
          such Fixed Rate Advance.

          (ii)  NOTICE OF ELECTION TO ADJUST INTEREST RATE.  Upon telephonic
          notice which shall be received by the Bank at or before 11:00 am
          (California time) on a Business Day, the Borrower may elect:

               (a)  That interest on a Variable Rate Advance shall be adjusted
               to accrue at a quoted and offered Fixed Rate; provided, however,
               that such notice 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 that interest be adjusted to accrue
               at the Fixed Rate.

               (b)  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 two
               business days prior to the


                                         (2)
<PAGE>

               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 Fixed Rate,
               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 Interest Period pertaining to such Advance.

     (iii)  PROHIBITION AGAINST PREPAYMENT OF FIXED RATE ADVANCES.
     NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THE AGREEMENT, NO PREPAYMENT
     SHALL BE MADE ON ANY FIXED RATE ADVANCE EXCEPT ON A DAY WHICH IS THE LAST
     DAY OF THE INTEREST PERIOD PERTAINING THERETO.  IF THE WHOLE OR ANY PART OF
     ANY 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 AND ANY LOSS (INCLUDING INTEREST) ACTUALLY INCURRED
     BY THE BANK AND ANY LOSS (INCLUDING LOSS OF PROFIT RESULTING FROM THE
     RE-EMPLOYMENT OF FUNDS) SUSTAINED BY THE BANK AS A CONSEQUENCE OF SUCH
     PREPAYMENT.

     (iv)  INDEMNIFICATION FOR FIXED RATE COSTS.  During any period of time in
     which interest on any Advance is accruing on the basis of a 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 requirements 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 Fixed Rate.

     (v)  INVOLUNTARY CONVERSION FROM 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 Fixed Rate (a) is infeasible because the Bank is unable to
     determine the 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 Interest Period; or (b) is or has become unlawful or
     infeasible 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 give
     telephonic notice thereof (confirmed in writing) to the Borrower, in which
     event any Fixed Rate Advance shall be deemed to be a Variable Rate Advance
     and interest shall thereupon immediately accrue at the Variable Rate.

E.  LATE FEE.  If any regularly scheduled payment of principal and/or interest
(exclusive of the final payment upon maturity), or any portion thereof, under
this Crop Line of Credit is not paid within ten (10) calendar days after it is
due, a late payment charge equal to five percent (5%) of such past due payment
may be assessed and shall be immediately payable.

F.  MAKING LINE ADVANCES/NOTICE OF BORROWING.  Each Advance made hereunder 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 written
instructions of the Borrower.  Subject to any other requirements set forth in
this Agreement, Advances shall be made by the Bank upon telephonic or written
notice received from the Borrower in form acceptable to the Bank, which notice
shall be received by the Bank at or before 11:00 am (California time) on a
business day.  The Borrower may borrow under this Crop Line of Credit by
requesting either:

     (i)  A VARIABLE RATE ADVANCE.  A Variable 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 11:00 am (California time) on
     the day such Advance is requested to be made, such Variable Rate Advance
     may be made, at the Bank's option, on the next business day.

     (ii)  A FIXED RATE ADVANCE.  The Borrower may elect that an Advance be made
     as a Fixed Rate Advance by requesting the Bank to provide a quote as to the
     rate which would apply for a designated Interest Period and concurrently
     with receiving such quote, giving the Bank irrevocable notice of the
     Borrower's acceptance of the rate quoted, provided such notice shall be
     given to the Bank not later than 10:00 a.m. (California time) on a date
     (which shall be a Business Day) at least two days prior to the first day of
     the requested Interest Period.  Any telephonic or oral quote or offer by
     the Bank of a Fixed Rate for a given Interest Period may be confirmed in
     writing by the Bank upon the election (as provided herein) of the Borrower
     to accept such terms and such confirmation shall be deemed conclusive as to
     the terms quoted and offered.

G.  FACILITY FEES.  The Borrower hereby promises and agrees to pay the following
fees in connection with this facility:  Any and all out-of-pocket expenses
incurred by the Bank.

H.  EXPIRATION OF THE CROP LINE OF CREDIT.  Unless earlier terminated in
accordance with the terms of this Agreement, the Bank's commitment to make
Advances to the Borrower hereunder shall automatically expire on  June 5, 1998
(the "Expiration Date"), and the Bank shall be under no further obligation to
advance any monies thereafter.

I.  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 this Crop Line of Credit (the
"Line Account").  The Bank shall provide the Borrower with a quarterly statement
of the Borrower's Line Account, which statement shall be considered to be
correct and conclusively binding on the Borrower unless the Bank is notified by
the Borrower to the contrary within thirty (30) days after the Borrower's
receipt of any such statement which is deemed to be incorrect.

J.  AMOUNTS PAYABLE ON DEMAND.  If the Borrower fails 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's failure to pay such amount, create an Advance in an amount equal to
the amount so payable, which Advance shall thereafter bear interest as provided
under this Crop Line of Credit.

In addition, the Borrower hereby authorizes the Bank, if and to the extent
payment owed to the Bank under this Crop Line of Credit is not made when due, to
charge, from time to time, against any or all deposit accounts maintained with
the Bank by the Borrower any amount so due.


                                    SECTION III

                                    COLLATERAL

3.01.  GRANT OF SECURITY INTEREST.  To secure payment and performance of all
of the Borrower's Obligations under this Agreement and the performance of all


                                         (3)
<PAGE>

the terms, covenants and agreements contained in this Agreement (and any and all
modifications, extensions and renewals of the Agreement) and in any other
document, instrument or agreement evidencing or related to the Obligations or
the Collateral, and also to secure 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 to
the Bank a security interest in and to all of the following property:

     A.  INVENTORY.  All inventory ("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.

     B.  ACCOUNTS AND CONTRACT RIGHTS.  All accounts and contract rights now
     owned or hereafter created or acquired by the Borrower, including but not
     limited to, all receivables and all rights and benefits due to the Borrower
     under any contract or agreement.

     C.  GENERAL INTANGIBLES.  All general intangibles now owned or hereafter
     created or acquired by the Borrower, including but not limited to,
     goodwill, trademarks, trade styles, trade names, patents, patent
     applications, software, customer lists and business records.

     D.  CHATTEL PAPER AND DOCUMENTS.  All documents, instruments and chattel
     paper now owned or hereafter acquired by the Borrower.

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

     F.  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 operations of the Borrower including, but not limited to, all hay,
     grain, forage, fodder and other feed commodities and all feed additives,
     feed supplements, veterinary supplies, medicines and related products now
     owned or hereafter acquired by or for the benefit of the Borrower.

     G.  MONIES AND OTHER PROPERTY IN POSSESSION.  All monies, and property of
     the Borrower now or hereafter in the possession of the Bank or the Bank's
     agents, or any one of them, including, but not limited to, all deposit
     accounts, certificates of deposit, stocks, bonds, indentures, warrants,
     options and other negotiable and non-negotiable securities and instruments,
     together with all stock rights, rights to subscribe, liquidating dividends,
     cash dividends, payments, dividends paid in stock, new securities or other
     property to which the Borrower may become entitled to receive on account of
     such property.

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

3.03.  EXCLUSION OF CONSUMER DEBT.  The Obligations and performance secured
hereby shall not include any indebtedness of the Borrower incurred for personal,
family or household purposes except to the extent any disclosure required under
any consumer protection law (including but not limited to the Truth in Lending
Act) or any regulation thereto, as now existing or hereafter amended, is or has
been given.


                                     SECTION IV

                                 CONDITIONS PRECEDENT

4.01.  CONDITIONS PRECEDENT TO THE INITIAL EXTENSION OF CREDIT AND/OR FIRST
ADVANCE.  The obligation of the Bank to make the initial extension of credit
and/or the first Advance hereunder is subject to the conditions precedent that
the Bank shall have received before the date of such extension of credit and/or
the first Advance all of the following, in form and substance satisfactory to
the Bank:

     A.  AUTHORITY TO BORROW.  Evidence relating to the duly given approval and
     authorization of the execution, delivery and performance of this Agreement,
     all other documents, instruments and agreements required under this
     Agreement and all other actions to be taken by the Borrower hereunder or
     thereunder.

     B.  GUARANTORS.  Continuing guaranties in favor of the Bank, in form and
     substance satisfactory to the Bank, executed by Alfred G. Scheid, Vineyard
     Investors 1972 and Vineyard 405 (each a "Guarantor"), together with
     evidence that the execution, delivery and performance of the Guaranties by
     each Guarantor has been duly authorized.

     C.  LOAN FEES.  Evidence that any required loan fees and expenses as set
     forth above with respect to each credit facility have been paid or provided
     for by the Borrower.

     D.  AUDIT.  The opportunity to conduct an audit of the Borrower's books,
     records and operations and the Bank shall be satisfied as to the condition
     thereof.

     E.  MISCELLANEOUS DOCUMENTS.  Such other documents, instruments, agreements
     and opinions as are necessary, or as the Bank may reasonably require, to
     consummate the transactions contemplated under this Agreement, all fully
     executed.

4.02.  CONDITIONS PRECEDENT TO ALL EXTENSIONS OF CREDIT AND/OR ADVANCES.  The
obligation of the Bank to make any extensions of credit and/or each Advance to
or on account of the Borrower (including the initial extension of credit and/or
the first Advance) shall be subject to the further conditions precedent that, as
of the date of each extension of credit  or Advance and after the making of such
extension of credit or Advance:

     A.  REPRESENTATIONS AND WARRANTIES.  The representations and warranties set
     forth in the Section entitled "Representations and Warranties" herein and
     in any other document, instrument, agreement or certificate delivered to
     the Bank hereunder are true and correct.

     B.  COLLATERAL.  The security interest in the Collateral has been duly
     authorized, created and perfected with first priority and is in full force
     and effect and the Bank has been provided with satisfactory evidence of all
     filings necessary to establish such perfection and priority.

     C.  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.

     D.  SUBSEQUENT APPROVALS, ETC.  The Bank shall have received such
     supplemental approvals, opinions or documents as the Bank may reasonably


                                         (4)
<PAGE>

     request.

4.03.  REAFFIRMATION OF STATEMENTS.  For the purposes hereof, the Borrower's
acceptance of the proceeds of any extension of credit and the Borrower's
execution of any document or instrument evidencing or creating any Obligation
hereunder shall each be deemed to constitute the Borrower's representation and
warranty that the statements set forth above in this Section are true and
correct.


                                     SECTION V

                            REPRESENTATIONS AND WARRANTIES

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

5.01.  STATUS.  The Borrower is a corporation duly organized and validly
existing under the laws of the State of California and is properly licensed,
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.

5.02.  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, writ, judgment or injunction presently in effect
affecting the Borrower; (ii)  require any consent or approval of the
stockholders of the Borrower or violate any provision of the articles of
incorporation or by-laws of the Borrower; or (iii)  result in a breach of or
constitute a default under any material agreement to which the Borrower is a
party or by which it or its properties may be bound or affected.

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

5.04.  FICTITIOUS TRADE STYLES.  The Borrower currently uses no fictitious trade
styles in connection with its business operations.  The Borrower shall notify
the Bank within thirty (30) days of the use of any fictitious trade style at any
future date, indicating the trade style and state(s) of its use.

5.05.  FINANCIAL STATEMENTS.  All financial statements, information and other
data which may have been and which may hereafter be submitted by the Borrower to
the Bank are true, accurate and correct and have been and will be prepared in
accordance with generally accepted accounting principles consistently applied
and accurately represent the Borrower's financial condition and, as applicable,
the other information disclosed therein.  Since the most recent submission of
any such financial statement, information or other 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.

5.06.  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, operations or the Collateral.

5.07.  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.

5.08.  CONTINUED USE OF WATER.  The real property described on the attached
Exhibit "B" has and will continue to have, the continuing, enforceable right to
receive irrigation water in such quantities, and at such times and locations as
is reasonably satisfactory for the purposes of farming, without interruption and
in such quantities, and at such times and locations, as has been historically
available to such property.  The Borrower has filed with all governmental
agencies all notice 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 such property.

5.09.  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.

5.10.  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 taxes which are currently payable without penalty or interest or those
which are being duly contested in good faith.

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 licenses, permits,
authorizations and registrations required under any Environmental Law
("Environmental Permits") and necessary for its ordinary 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 properties or operations are 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 or
maintain any underground storage tanks which are not properly registered or
permitted under applicable Environmental Laws or which are leaking or disposing
of Hazardous Materials off-site, and (ii) the Borrower has notified all of its
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.


                                     SECTION VI

                                     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 shall, unless the Bank otherwise consents in writing:


                                         (5)
<PAGE>

6.01.  PRESERVATION OF EXISTENCE; COMPLIANCE WITH APPLICABLE LAWS.  Maintain and
preserve its existence and all rights and privileges now enjoyed; not liquidate
or dissolve, merge or consolidate with or into, or acquire any other business
organization; and conduct its business in accordance with all applicable laws,
rules and regulations.

6.02.  MAINTENANCE OF INSURANCE.  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 be in an amount not less than the full replacement value
thereof, at the Bank's request, 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 ten (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.

6.03.  MAINTENANCE OF COLLATERAL AND OTHER PROPERTIES.  Except for Permitted
Liens, the Borrower shall 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, judgement or execution) 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.

6.04.  LOCATION AND QUALITY OF INVENTORY.  The Inventory (i) is now and shall at
all times hereafter be of good and merchantable quality and free from defects;
(ii) is not now and shall not at any time 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; (iii) shall at all times (except as otherwise permitted by
this section) be in the Borrower's physical possession; (iv) shall not be held
by others on consignment, sale on approval, or sale or return; and (v) shall be
kept only at the following locations(s):  on the real property described on the
attached Exhibit "B"; and various processor locations.

6.05.  LOCATION OF HARVESTED CROPS.  Any Crops now or hereafter harvested or
removed from the real property on which they are grown 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 locations(s):  on the real property
described on the attached Exhibit "B"; and various processor locations.

6.06.  CARE AND PRESERVATION OF THE CROPS.

     A.  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.

     B.  Not commit or suffer to be committed any waste or damage to the Crops.

     C.  Permit the Bank and any of its agents, employees or representatives to
     enter upon any real property on which the Crops are being grown at any
     reasonable time and from time to time for the purpose of examining and
     inspecting the Crops and such real property.

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

     E.  Keep the Crops separate and always capable of identification.

     F.  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.

6.07.  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.

6.08.  INSPECTION RIGHTS.  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 to discuss the business and
operations of the Borrower with any employee or representative thereof.  If the
Borrower now or at any time hereafter maintains any records (including, but not
limited to, computer generated records and 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 it may
request, all at the Borrower's expense, the amount of which shall be payable
immediately upon demand.  In addition, the Bank may, at any reasonable time and
from time to time, conduct inspections and audits of the Collateral and the
Borrower's accounts payable, the cost and expenses of which shall be paid by the
Borrower to the Bank upon demand.

6.09.  REPORTING REQUIREMENTS.  Deliver or cause to be delivered to the Bank in
form and detail satisfactory to the Bank:

     A.  ANNUAL STATEMENTS.  Not later than 120 days after the end of each of
     the Borrower's fiscal years, a copy of the annual financial report of the
     Borrower for such year, which report shall be a CPA audited report.

     B.  OTHER INFORMATION.  Promptly upon the Bank's request, such other
     information pertaining to the Borrower, the Collateral, or any Guarantor as
     the Bank may reasonably request.

6.10.  PAYMENT OF DIVIDENDS.  The Borrower shall not declare or pay any
dividends on any class of its stock now or hereafter outstanding except
dividends payable solely in the corporation's capital stock.

6.11.  REDEMPTION OR REPURCHASE OF STOCK.  The Borrower shall not redeem or
repurchase any class of its corporate stock now or hereafter outstanding.

6.12.  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 such properties,
except for Permitted Liens or as otherwise provided in this Agreement.

6.13.  TRANSFER ASSETS.  Not sell, contract for sale, transfer, convey, assign,
lease or sublet any assets of the Borrower, including, but not limited to, the


                                         (6)
<PAGE>

Collateral, except in the ordinary course of business as presently conducted by
the Borrower, and then, only for full, fair and reasonable consideration.

6.14.  CHANGE IN THE NATURE OF BUSINESS.  Not make any material change in the
Borrower's financial structure or in the nature of the Borrower's business as
existing or conducted as of the date of this Agreement.

6.15.  FINANCIAL CONDITION.  Maintain at all times:

     A.  NET WORTH.  A minimum Effective Tangible Net Worth of not less than
     $3,500,000.00.

     B.  CURRENT RATIO.  A ratio of current assets to current liabilities of not
     less than 2.00 to 1.00.

     C.  DEBT SERVICE COVERAGE RATIO.  A minimum Debt Service Coverage Ratio
     (defined herein as the sum of net profit after taxes plus depreciation,
     amortization, and term interest expense less dividends, distributions, and
     withdrawals divided by the current portion of long term debt and term
     interest expense) of not less than 1.25 to 1.00.

6.16.  COMPENSATION OF EMPLOYEES.  Compensate the employees of the Borrower 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.

6.17.  ASSUMPTION AGREEMENTS.  Prior to or contemporaneously with any
dissolution of Vineyard Investors 1972 and Vineyard 405 and assumption by the
Borrower of such partnerships' assets, the Borrower promises and agrees to
assume all obligations under that certain real estate term loan by and between
Vineyard Investors 1972 and the Bank in the original principal amount of
$5,500,000.00 and that certain real estate term loan between Vineyard 405 and
the Bank in the original amount of $1,560,000.00.  The Borrower further promises
and agrees to execute any and all documentation required by the Bank in
connection with the foregoing assumptions, including but not limited to,
assumption agreements and security agreements, and to assist the Bank in
obtaining any endorsements to the Bank's title policy deemed necessary by the
Bank.

6.18.  ENVIRONMENTAL COMPLIANCE.  The Borrower shall:

     A.  Conduct the Borrower's operations and keep and maintain all of its
     properties in compliance with all Environmental Laws.

     B.  Give prompt written notice to the Bank, but in no event later than 10
     days after becoming aware, of the following:  (i) any enforcement, cleanup,
     removal or other governmental or regulatory actions instituted, completed
     or threatened against the Borrower or any of its affiliates or any of its
     respective properties pursuant to any applicable Environmental Laws, (ii)
     all other Environmental Claims, and (iii) any environmental or similar
     condition on any real property adjoining or in the vicinity of the property
     of the Borrower or its affiliates that could reasonably be anticipated to
     cause such property or any part thereof to be subject to any restrictions
     on the ownership, occupancy, transferability or use of such property under
     any Environmental Laws.

     C.  Upon the written request of the Bank, the Borrower shall submit to the
     Bank, at its sole cost and expense, at reasonable intervals, a report
     providing an update of the status of any environmental, health or safety
     compliance, hazard or liability issue identified in any notice required
     pursuant to this Section.

     D.  At all times indemnify and hold harmless the Bank from and against any
     and all liability arising out of any Environmental Claims.

6.19.  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 $50,000.00
or which affects the Collateral; (iii)  any change in the place of business of
the Borrower or the acquisition of more than one place of business by the
Borrower; (iv)  any proposed or actual change in the name, identity or business
nature of the Borrower; (v)  any change in the location of the Inventory or
Crops; (vi)  any disease to, any destruction of, any depreciation in the value
of or any damage to the Crops; and (vii)  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.

                                    SECTION VII

                                  EVENTS OF DEFAULT

Any one or more of the following described events shall constitute an event of
default under this Agreement:

7.01.  NON-PAYMENT.  The Borrower shall fail to pay any Obligations within 10
days of when due.

7.02.  PERFORMANCE UNDER THIS AND OTHER AGREEMENTS.  The Borrower 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
evidencing or relating to any indebtedness of the Borrower (whether owed to the
Bank or third persons), and any such failure (exclusive of the payment of money
to the Bank under this Agreement or under any other document, instrument or
agreement, which failure shall constitute and be an immediate Event of Default
if not paid when due or when demanded to be due) shall continue for more than 30
days after written notice from the Bank to the Borrower of the existence and
character of such Event of Default.

7.03.  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.

7.04.  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 or 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) any receiver, custodian or trustee shall have been
appointed for all or a substantial part of its properties, assets or businesses
and shall not be discharged within 30 days after the date of such appointment.

7.05.  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 30 days after the issuance or attachment of
such writ or lien.


                                         (7)
<PAGE>

7.06.  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.

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

7.08.  CHANGE IN OWNERSHIP.  There shall occur a sale, transfer, disposition or
encumbrance (whether voluntary or involuntary), or an agreement shall be entered
into to do so, with respect to more than 10% of the issued and outstanding
capital stock of the Borrower.

7.09.  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, which changes cause the Collateral, in the sole and
absolute judgement of the Bank, to become unacceptable as to character and
value.

                                    SECTION VIII

                                 REMEDIES ON DEFAULT

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

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

8.02.  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.

8.03.  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.

8.04.  SEGREGATE COLLECTIONS.  Require the Borrower to segregate all collections
and proceeds of the Collateral so that they are capable of identification and to
deliver such collections and proceeds to the Bank, in kind, without commingling,
at such times and in such manner as required by the Bank.

8.05.  RECORDS OF COLLATERAL.  Require the Borrower to periodically deliver to
the Bank records and schedules showing the status, condition and location of the
Collateral and such contracts or other matters which affect the Collateral.  In
connection herewith, the Bank may conduct such audits or other examination of
such records, including, but not limited to, verification of balances owing by
any account debtor of the Borrower, as the Bank, in its sole and absolute
discretion, deems necessary.

8.06.  NOTIFICATION OF ACCOUNT DEBTORS.

     A.    Notify any or all of the Borrower's Account Debtors, or any buyers or
     transferees of the Collateral or other persons of the Bank's interest in
     the Collateral and the proceeds thereof and instruct such person(s) to
     thereafter make any payment due the Borrower directly to the Bank.

     B.    The Borrower hereby irrevocably and unconditionally appoints the Bank
     as its attorney-in-fact to: (i) endorse the Borrower's name on any notes,
     acceptances, checks, drafts, money orders or other evidence of payment that
     may come into the Bank's possession; (ii) sign the Borrower's name on any
     invoice or bill of lading relating to any of the Collateral; (iii) notify
     post office authorities to change the address for delivery of mail
     addressed to the Borrower to such address as the Bank may designate and
     take possession of and open mail addressed to the Borrower and remove
     therefrom, proceeds of and payments on the Collateral; and (iv) demand,
     receive and endorse payment and give receipts, releases and satisfactions
     for and sue for all money payable to the Borrower.  All of the preceding
     may be done either in the name of the Bank or in the name of the Borrower
     with the same force and effect as the Borrower could have done had this
     Agreement not been entered into.

     C.    Require the Borrower to indicate on the face of all invoices (or such
     other documentation as may be specified by the Bank relating to the sale,
     delivery or shipment of goods giving rise to the account) that the account
     has been assigned to the Bank and that all payments are to be made directly
     to the Bank at such address as the Bank may designate.

8.07.  COMPROMISE.  Grant extensions, compromise claims and settle any account
for less than the amount owing thereunder, all without notice to the Borrower or
any obligor on or guarantor of the Obligations.

8.08.  CARE AND POSSESSION OF THE CROPS.  Enter upon the premises where the
Crops are being grown or stored and, using any and all of the Borrower's
equipment, machinery, tools, farming implements and supplies, and improvements
located on such premises:  (i) farm, cultivate, irrigate, fertilize, fumigate,
prune and perform any other act or acts appropriate or necessary to grow, care
for, maintain, preserve and protect the Crops (using any water located in, on or
adjacent to the premises); (ii) harvest, pick, clean and remove the Crops from
the premises; and (iii) appraise, store, prepare for public or private sale,
exhibit, market and sell the Crops and the products thereof.  With respect to
the above, the Borrower hereby further agrees that, if the Borrower is the owner
of record of the premises upon which the Crops and the products thereof are
located, the Bank shall not be responsible or liable for returning the premises
to their condition immediately preceding the use of the premises as provided
herein or for doing such acts as may be necessary to permit future crops to be
grown on the premises.

8.09.  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.

8.10.  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 relating to the Collateral, in such manner and such order, as to
all or any part of the Collateral, 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


                                         (8)
<PAGE>

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 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 any obligor on or any guarantor of the
Obligations and shall be immediately paid to the Bank.

8.11.  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, 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.  Any excess Collateral or excess
proceeds existing after the disposition or liquidation of the Collateral will be
returned or paid by the Bank to the Borrower.

8.12.  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.


                                     SECTION IX

                               MISCELLANEOUS PROVISIONS

9.01.  DEFAULT INTEREST RATE.  If an Event of Default has occurred and is
continuing, the Bank, at its option, may require the Borrower to 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 otherwise then in effect under this
Agreement.

9.02.  ASSIGNMENT OF THE BORROWER'S RIGHTS WITH RESPECT TO CROPS.

     A.  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.

     B.  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 Crops 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.

9.03.  RELIANCE.  Each warranty, representation, covenant 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 or agreements which the Borrower shall now or
hereafter give, or cause to be given, to the Bank.

9.04.  DISPUTE RESOLUTION.

     A.  DISPUTES.  It is understood and agreed that, upon the request of any
     party to this Agreement, any dispute, claim or controversy of any kind,
     whether in contract or in tort, statutory or common law, legal or
     equitable, now existing or hereinafter arising between the parties in any
     way arising out of, pertaining to or in connection with: (i) this
     Agreement, or any related agreements, documents or instruments, (ii) all
     past and present loans, credits, accounts, deposit accounts (whether demand
     deposits or time deposits), safe deposit boxes, safekeeping agreements,
     guarantees, letters of credit, goods or services, or other transactions,
     contracts or agreements of any kind, (iii) any incidents, omissions, acts,
     practices, or occurrences causing injury to any party whereby another party
     or its agents, employees or representatives may be liable, in whole or in
     part, or (iv) any aspect of the past or present relationships of the
     parties, shall be resolved through a two-step dispute resolution process
     administered by the Judicial Arbitration & Mediation Services, Inc.
     ("JAMS") as follows:

     B.  STEP I - MEDIATION.  At the request of any party to the dispute, claim
     or controversy, the matter shall be referred to the nearest office of JAMS
     for mediation, which is an informal, non-binding conference or conferences
     between the parties in which a retired judge or justice from the JAMS panel
     will seek to guide the parties to a resolution of the case.

     C.  STEP II - ARBITRATION (CONTRACTS NOT SECURED BY REAL PROPERTY).  Should
     any dispute, claim or controversy remain unresolved at the conclusion of
     the Step I Mediation Phase, then (subject to the restriction at the end of
     this subparagraph) all such remaining matters shall be resolved by final
     and binding arbitration before a different judicial panelist, unless the
     parties shall agree to have the mediator panelist act as arbitrator.  The
     hearing shall be conducted at a location determined by the arbitrator in
     Los Angeles, California (or such other city as may be agreed upon by the
     parties) and shall be administered by and in accordance with the then
     existing Rules of Practice and Procedure of JAMS and judgement upon any
     award rendered by the arbitrator may be entered by any State or Federal
     Court having jurisdiction thereof.  The arbitrator shall determine which is
     the prevailing party and shall include in the award that party's reasonable
     attorneys' fees and costs.  This subparagraph shall apply only if, at the
     time of the submission of the matter to JAMS, the dispute or issues
     involved do not arise out of any transaction which is secured by real
     property collateral or, if so secured, all parties consent to such
     submission.

     As soon as practicable after selection of the arbitrator, the arbitrator,
     or the arbitrator's designated representative, shall determine a reasonable
     estimate of anticipated fees and costs of the arbitrator, and render a
     statement to each party setting forth that party's pro-rata share of said
     fees and costs.  Thereafter, each party shall, within 10 days of receipt of
     said statement, deposit said sum with the arbitrator.  Failure of any party
     to make such a deposit shall result in a forfeiture by the non-depositing
     party of the right to prosecute or defend the claim which is the subject of
     the arbitration, but shall not otherwise serve to abate, stay or suspend
     the arbitration proceedings.


                                         (9)
<PAGE>

     D.  STEP II - TRIAL BY COURT REFERENCE (CONTRACTS SECURED BY REAL
     PROPERTY).  If the dispute, claim or controversy is not one required or
     agreed to be submitted to arbitration, as provided in the above
     subparagraph, and has not been resolved by Step I mediation, then any
     remaining dispute, claim or controversy shall be submitted for
     determination by a trial on Order of Reference conducted by a retired judge
     or justice from the panel of JAMS appointed pursuant to the provisions of
     Section 638(1) of the California Code of Civil Procedure, or any amendment,
     addition or successor section thereto, to hear the case and report a
     statement of decision thereon.  The parties intend this general reference
     agreement to be specifically enforceable in accordance with said section.
     If the parties are unable to agree upon a member of the JAMS panel to act
     as referee, then one shall be appointed by the Presiding Judge of the
     county wherein the hearing is to be held.  The parties shall pay in
     advance, to the referee, the estimated reasonable fees and costs of the
     reference, as may be specified in advance by the referee.  The parties
     shall initially share equally, by paying their proportionate amount of the
     estimated fees and costs of the reference.  Failure of any party to make
     such a fee deposit shall result in a forfeiture by the non-depositing party
     of the right to prosecute or defend any cause of action which is the
     subject of the reference, but shall not otherwise serve to abate, stay or
     suspend the reference proceeding.

     E.  PROVISIONAL REMEDIES, SELF HELP AND FORECLOSURE.  No provision of, or
     the exercise of any rights under any portion of this Dispute Resolution
     provision, shall limit the right of any party to exercise self help
     remedies such as set off, foreclosure against any real or personal property
     collateral, or the obtaining of provisional or ancillary remedies, such as
     injunctive relief or the appointment of a receiver, from any court having
     jurisdiction before, during or after the pendency of any arbitration.  At
     the Bank's option, foreclosure under a deed of trust or mortgage may be
     accomplished either by exercise of power of sale under the deed of trust or
     mortgage, or by judicial foreclosure.  The institution and maintenance of
     an action for provisional remedies, pursuit of provisional or ancillary
     remedies or exercise of self help remedies shall not constitute a waiver of
     the right of any party to submit the controversy or claim to arbitration.

9.05.  WAIVER OF JURY.  The Borrower and the Bank hereby expressly and
voluntarily waive any and all rights, whether arising under the California
constitution, any rules of the California Code of Civil Procedure, common law or
otherwise, to demand a trial by jury in any action, matter, claim or cause of
action whatsoever arising out of or in any way related to this Agreement or any
other agreement, document or transaction contemplated hereby.

9.06.  RESTRUCTURING EXPENSES.  In the event the Bank and the Borrower negotiate
for, or enter into, any restructuring, modification or refinancing of the
Indebtedness under this Agreement for the purposes of remedying an Event of
Default, The Bank, may require the Borrower to reimburse all of the Bank's costs
and expenses incurred in connection therewith, including, but not limited to
reasonable attorneys' fees and the costs of any audit or appraisals required by
the Bank to be performed in connection with such restructuring, modification or
refinancing.

9.07.  ATTORNEYS' FEES.  In the event of any suit, mediation, arbitration or
other action in relation to this Agreement or any document, instrument or
agreement executed with respect to, evidencing or securing the indebtedness
hereunder, the prevailing party, in addition to all other sums to which it may
be entitled, shall be entitled to reasonable attorneys' fees.

9.08.  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 shall be given or made to such party by hand delivery or through deposit
in the United States mail, postage prepaid, or by Western Union telegram,
addressed to the address set forth below such party's signature to this
Agreement or to such other address as may be specified from time to time in
writing by either party to the other.

9.09.  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 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.

9.10.  CONFLICTING PROVISIONS.  To the extent that any of the terms or
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.

9.11.  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 Bank's prior
written consent.  The Bank may sell, assign or grant participations 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.

9.12.  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, to the
jurisdiction of whose courts the parties hereby submit.

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

9.14.  ENTIRE AGREEMENT.  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 or pertaining
to the transactions contemplated hereunder that are not incorporated or
referenced in this Agreement or in such documents, instruments and agreements
are superseded hereby.

IN WITNESS WHEREOF, this Agreement has been executed by the parties hereto as of
the date first hereinabove written.


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<PAGE>

BANK:                                     BORROWER:

SANWA BANK CALIFORNIA                     SCHEID VINEYARDS INC.

BY: /s/ STEVEN R. EDMONSTON               BY: /s/ ALFRED G. SCHEID
   ------------------------                  ------------------------

STEVEN R. EDMONSTON, AUTHORIZED OFFICER   ALFRED G. SCHEID, PRESIDENT


                                          BY: /s/ ERNEST M. BROWN
ADDRESS:                                     ------------------------
Fresno CBC/Agribusiness Office
2035 Fresno Street                        ERNEST M. BROWN, SECRETARY
Fresno, CA  93721


                                          ADDRESS:
                                          13470 Washington Boulevard, Suite 300
                                          Marina Del Rey, CA  90292


                                         (11)
<PAGE>

                                    EXHIBIT "A"
                                    CROP BUDGET


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


                                       [OMITTED]


                                         (12)
<PAGE>

                                     EXHIBIT "B"
                             DESCRIPTION OF REAL PROPERTY
                                       (CROPS)




                                       [OMITTED]



                                         (13)