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Exhibit 10.69   THE CHALONE WINE GROUP, LTD.   SECOND AMENDMENT Dated as of May 11,2004 To AMENDED AND RESTATED NOTE PURCHASE AGREEMENT
Dated as of April 19, 2002   Re: $5,000,000 Adjustable Rate Senior Secured Guaranteed Notes, Series A,
Due September 15, 2010
$10,000,000 Adjustable Rate Senior Secured Guaranteed Notes, Series B,
Due September 15, 2010
$15,000,000 Adjustable Rate Senior Secured Guaranteed Notes, Series C,
Due September 15, 2010




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SECOND AMENDMENT TO AMENDED AND RESTATED NOTE PURCHASE AGREEMENT This Second Amendment dated as of May 11, 2004 (the or this Second
Amendment)to the Amended and Restated Note Purchase Agreement dated as of
April 19, 2002 is among The Chalone Wine Group, Ltd., a California corporation
(the Company),the Subsidiary Guarantors (as defined below) and Farm Credit
Services of America, PCA and Farm Credit Services of Minnesota Valley, PCA,
DBA PCS Commercial Finance Group (collectively, the Noteholders). RECITALS: A. The Company and the Noteholders have heretofore entered into that
certain Amended and Restated Note Purchase Agreement dated as of April 19,
2002, as amended
by that certain First Amendment to Amended and Restated Note Purchase
Agreement dated July
11, 2002 (as so amended and otherwise amended, restated, supplemented or
otherwise modified
from time to time, the Note Agreement).The Company has heretofore
issued its $5,000,000
Adjustable Rate Senior Secured Notes, Series A, Due September 15, 2010
bearing PPN 157639
B*5 (the Series A Notes),dated April 19, 2002, its $10,000,000
Adjustable Rate Senior
Secured Notes, Series B, Due September 15, 2010 bearing PPN 157639 C* 4
(the Series B
Notes),dated July 1, 2003 and its $15,000,000 Adjustable Rate Senior
Secured Notes, Series C,
Due September 15, 2010 bearing PPN 157639 B# 1, dated April 19, 2002 (the
Series C Notes;
the Series A Notes, the Series B Notes and the Series C Notes are
hereinafter collectively
referred to as the Notes)pursuant to the Note Agreement. The
Noteholders are the holders of
100% of the principal amount of the Notes presently outstanding. B. Edna Valley Vineyard, a California general partnership (Edna Valley),
SHW Equity Co., a Washington corporation (SHW),Canoe Ridge Vineyard,
LLC, a
Washington limited liability company (Canoe Ridge),Canoe Ridge
Winery, Inc., a
Washington corporation (CRW),and Staton Hills Winery Company Limited, a
Washington
corporation (Staton;Edna Valley, SHW, Canoe Ridge, CRW and Staton are
hereinafter
collectively referred to as the Subsidiary Guarantors),have heretofore
entered into those
certain Amended and Restated Subsidiary Guarantee Agreements, each dated
as of April 19,
2002 (collectively, the Subsidiary Guarantee Agreements)under and
pursuant to which each
of the Subsidiary Guarantors guaranteed the payment of the Notes and the
performance by the
Company of its obligations under the Note Agreement, C. The Company and the Noteholders now desire to amend the Note
Agreement in the respects, but only in the respects, hereinafter set
forth. The Subsidiary
Guarantors now desire to affirm their respective obligations under the
Subsidiary Guarantee
Agreements. D. All requirements of law have been fully complied with and all other
acts
and things necessary to make this Second Amendment a valid, legal and
binding instrument
according to its terms for the purposes herein expressed have been done or
performed.




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NOW, THEREFORE, upon the full and complete satisfaction of the conditions
precedent to the effectiveness of this Second Amendment set forth in §6
hereof, the Company, the Subsidiary Guarantors and the Noteholders, for good
and valuable consideration the receipt and sufficiency of which is hereby
acknowledged, do hereby agree as follows: SECTION 1 Definitions; References.Unless otherwise specifically defined
herein, each term used herein which is defined in the Note Agreement shall have
the meaning assigned to such term in the Note Agreement. Each reference to
hereof,hereunder, herein and hereby and each other similar reference
and each reference to this Agreement and each other similar reference
contained in the Note Agreement shall from and after the date hereof refer to
the Note Agreement as amended hereby. SECTION 2 Amendments. (a) Schedule B to the Note Agreement shall be and is hereby amended by
deleting the
definition of Specified Loan to Value Event and replacing the following
definition therefor:  Specified Loan to Value Eventmeans, in connection with a
sale, transfer or other disposition of any Term Debt Priority
Collateral, any circumstance where the outstanding principal
amount of the Term Debt on the date of determination thereof
equals or exceeds 65% of the fair market value (as determined by
an appraisal reasonably acceptable to the Required Holders
performed within three (3) years of the date of determination
thereof) of the Term Debt Priority Collateral which is to remain
subject to the Collateral Documents after giving effect to such
sale, transfer or other disposition, (b) Schedule B to the Note Agreement shall be and is hereby amended by
adding a
quotation mark in front of the definition of Subsidiary therein. (c) Section 10.4(a) of the Note Agreement shall be and is hereby amended
in its entirety
to read as follows: (a) Leverage Ratio. The Company shall maintain a ratio of (a) Consolidated
Indebtedness plussix times Consolidated Rent Expense (measured on
a rolling 4-quarter basis) to (b) Consolidated EBITDA plusone
times Consolidated Rent Expense (in each case, measured on a
rolling 4-quarter basis) (such ratio, the Leverage Ratio) as of
the last day of each fiscal quarter of not more than (i) 5.50 to
1.00 for the second, third and fourth fiscal quarters of 2004, the
first second, third and fourth fiscal quarters of 2005, and the
first fiscal quarter of 2006, (ii) 5.00 to 1.00 for the second and
third fiscal quarters of 2006, (iii) 4.50 to 1.00 for the fourth
fiscal quarter of 2006 and the first fiscal quarter of 2007, and
(iv) 3.50 to 1.00 for the second fiscal quarter of 2007 and each
fiscal quarter ending thereafter. 2




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(d) Section 10.4(c) of the Note Agreement shall be and is hereby amended
in its entirety
to read as follows: (c) Interest Coverage Ratio. The Company shall maintain a ratio of Consolidated EBIT to
Consolidated Interest Expense, for each period of four consecutive
fiscal quarters then ended, of not less than (i) 1.05 to 1.00 as of
the last day of the second and third fiscal quarters of 2004, (ii)
1.25 to 1.00 as of the last day of the fourth fiscal quarter of
2004, the first, second, third and fourth fiscal quarters of 2005
and the first and second fiscal quarters of 2006, (iii) 1.50 to
1.00 as of the last day of the third and fourth fiscal quarters of
2006, (iv) 2.00 to 1.00 as of the last day of the first fiscal
quarter of 2007, and (v) 3.50 to 1.00 as of the last day of the
second fiscal quarter of 2007 and each fiscal quarter ending
thereafter. (e) Section 10.4(d) of the Note Agreement shall be and is hereby amended
in its entirety
to read as follows: (d) Fixed Charge Coverage Ratio. The Company shall maintain a ratio of (i) Consolidated EBITDA
to (ii) the sum of Consolidated Interest Expense plus regularly
scheduled principal payments on Indebtedness (including such
payments attributable to Capital Leases) plus cash income taxes
pluscash dividends, of the Company and its Subsidiaries on a
consolidated basis, as determined in accordance with GAAP, for each
period of four consecutive fiscal quarters then ended of not less
than (1) 1.10 to 1.00 as of the last day of the second fiscal
quarter of 2004 through the last day of the first fiscal quarter of
2007 and (2) 1.25 to 1.00 as of the last day of the second fiscal
quarter of 2007 and each fiscal quarter ending thereafter. (f) Subsection 10.4(e)(ii) of the Note Agreement shall be and is hereby
amended in its
entirety to read as follows: (ii) The Company shall not, and shall not permit any of its
Subsidiaries to, make or become legally obligated to make any
expenditure in respect of the purchase or other acquisition of any
fixed or capital assets (excluding those assets set out in clause
(i) above), where such expenditure exceeds, in the aggregate for
the Company and its Subsidiaries during each fiscal year set forth
below, the amount set forth opposite such fiscal year: Fiscal YearEnding
    
    Amount2004
    
    $
    5,000,0002005
    
    $
    4,500,0002006
    
    $
    6,000,0002007
    
    $
    3,000,000
 3




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2008
    
    $
    2,500,0002009
    
    $
    2,500,0002010
    
    $
    2,500,000
    
 (g) Section 9 of the Note Agreement shall be and is hereby amended by
adding a new subsection 9.10 thereto as follows:  Section 9.10 Provenance Property. The Company shall, and shall
cause its Subsidiaries to, on or prior to June 30, 2004, deliver
the following items with respect to that certain parcel of real
property owned by the Company described on Exhibit A to the
Provenance Deed of Trust (the Provenance Property)and with
respect to the remaining parcels of real property currently subject
to Deeds of Trusts in favor of the Collateral Agent (the Existing
Mortgaged Properties):(a) a loan title insurance policy issued by
a title insurance company reasonably satisfactory to the
Noteholders (or, in the alternative, a commitment to issue a loan
title insurance policy issued by a title insurance company
reasonably satisfactory to the Noteholders and marked and initialed
by an authorized agent of such title insurance company to show all
changes to be made in connection with the actual issuance of such
title insurance policy) for the Provenance Property which shall be
satisfactory in scope, amount and form to the Noteholders; (b) a
date-down endorsement to the loan title policies for the Existing
Mortgaged Properties, together with amended tie-in endorsements
to include the Provenance Property therein, which shall be
satisfactory to the Noteholders in scope and form; (c) a survey for
the Provenance Property to the Noteholders which shall be
satisfactory to the Noteholders in scope and form; (d) deliver an
original policy of insurance (or certificate as to the existence of
such policy or any blanket insurance policy) with respect to the
Provenance Property; and (e) a Phase I Environmental Site
Assessment in general accordance with ASTM Standard El 527-00
prepared by a company acceptable to the Noteholders, together with
a letter from such company addressed to the Noteholders permitting
the Noteholders to rely on such Phase I Environmental Site
Assessment and, in the case of each of the foregoing, otherwise in
form and substance reasonably satisfactory to the Noteholders.
Simultaneously with the satisfaction of the foregoing conditions,
the Company shall make payment in full of all title insurance
charges and premiums and all fees, charges and taxes in connection
with the recordation or filing and of the Deed of Trust with
respect to the Provenance Property and any other agreement or
instrument, financing statement or any publication of notice
required to be filed or recorded to protect the validity of the
liens securing the obligations of the Notes. SECTION 3 Representations and Warranties of the Company and
Subsidiary Guarantors.To induce the Noteholders to execute and deliver this
Second Amendment (which 4




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representations shall survive the execution and delivery of this Second
Amendment), each of the Company and the Subsidiary Guarantors represent and
warrant to the Noteholders that: (a) since December 31, 2003, there has been no change in the
condition,
financial or otherwise, of the Company and its Subsidiaries as shown
on the consolidated
balance sheet as of such date except changes in the ordinary course
of business, none of
which individually or in the aggregate has had, or reasonably could
be expected to have,
a Material Adverse Effect; (b) this Second Amendment has been duly authorized, executed and
delivered
by it and this Second Amendment constitutes the legal, valid and
binding obligation,
contract and agreement of the Company and Subsidiary Guarantors
enforceable against it
in accordance with its terms, except as enforcement may be limited by
bankruptcy,
insolvency, reorganization, moratorium or similar laws relating to or
limiting creditors
rights generally and general principles of equity
(regardless of whether such
enforceability is considered in a proceeding in equity or in law); (c) the Note Agreement, as amended by this Second Amendment,
constitutes
the legal, valid and binding obligation, contract and agreement of
the Company
enforceable against it in accordance with its terms, except as
enforcement may be limited
by bankruptcy, insolvency, reorganization, moratorium or similar laws
relating to or
limiting creditors rights generally and general principles of equity
(regardless of whether
such enforceability is considered in a proceeding in equity or in
law); (d) the execution, delivery and performance by the Company and
Subsidiary
Guarantors of this Second Amendment (i) has been duly authorized by
all requisite
corporate action and, if required, shareholder action, (ii) does not
require the consent or
approval of any governmental or regulatory body or agency, and (iii)
will not (A) violate
(1) any provision of law, statute, rule or regulation or its
certificate of incorporation or
bylaws, (2) any order of any court or any rule, regulation or order
of any other agency or
government binding upon it, or (3) any provision of any material
indenture, agreement or
other instrument to which it is a party or by which its properties or
assets are or may be
bound, including, without limitation, the Credit Agreement, or (B)
result in a breach or
constitute (along or with due notice or lapse of time or both) a
default under any
indenture, agreement or other instrument referred to in clause
(iii)(A)(3) of this §3(d); (e) as of the date hereof and after giving effect to this Second
Amendment, no
Default or Event of Default has occurred which is continuing; and (f) except as otherwise set forth in the Schedules to the Note
Agreement or on
Schedule I hereto, all the representations and warranties contained
in Section 5 of the
Note Agreement are true and correct in all material respects with the
same force and
effect as if made by the Company and Subsidiary Guarantors on and as
of the date hereof. SECTION 4 Affirmation of Subsidiary Guarantee Agreements.Each of the
Subsidiary Guarantors hereby affirm each of their obligations under their
respective Subsidiary Guarantee Agreements after giving effect to this Second
Amendment. 5




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SECTION 5 Conditions to Effectiveness of this Amendment.This Second
Amendment shall not become effective until, and shall become effective when,
each and every one of the following conditions shall have been satisfied: (a) executed counterparts of this Second Amendment, duly executed by
the
Company, the Subsidiary Guarantors and the Required Holders, shall
have been delivered
to the Noteholders; (b) executed counterparts of an amendment to the Intercreditor
Agreement,
duly executed by the Company and the thereto shall have been
delivered to the
Noteholders; (c) executed counterparts of the Deed of Trust with respect to the
Provenance
Property, duly executed by the Company shall have been delivered to
the Noteholders; (d) the Noteholders shall have received evidence satisfactory to them
that the
Credit Agreement has been amended and restated which amendment and
restatement
shall be in form and substance satisfactory to the Noteholders; (e) the Company shall have caused to be delivered to the Noteholders
an
appraisal for the Provenance Property and such appraisal shall be
satisfactory to the
Noteholders in scope and form; (f) the Deed of Trust with respect to the Provenance
Property (the
Provenance Deed of Trust)and the financing statements relating
thereto, shall be duly
filed or recorded, as applicable, in such manner and in such places
as is required to
establish, preserve and protect the liens and security interests of
the Deed of Trust as a
valid first mortgage lien and a security interest of record on the
Provenance Property
(including, without limitation, all Trade Property (as defined in the
Provenance Deed of
Trust) located thereon); (g) the loan title insurance policy shall have been issued to the
Noteholders
with respect to the Provenance Property in scope and form
satisfactory to the Noteholders
and the date-down endorsements and amended tie-in endorsements to
the title
insurance policies in place for the remaining parcels of real
property currently subject to
Deeds of Trust in favor of the Collateral Agent shall have been
issued and delivered to
the Noteholders in scope and form satisfactory to the Noteholders; (h) the representations and warranties of the Company and the
Subsidiary Guarantors set forth in Section3 hereof are true and correct
on and with respect to the date
hereof; (i) each Noteholder shall have received opinions in form and
substance satisfactory to such Noteholder from (A) special counsel for
the Company covering such matters incident to the transactions
contemplated hereby as such Noteholder may reasonably request and (B)
special counsel for the Company covering such matters incident to the
transactions contemplated hereby as such Noteholder may reasonably
request; 6




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(j) the Company shall have paid the reasonable fees and expenses of
McDermott, Will & Emery, counsel to the Noteholders, in connection with
the negotiation, preparation, approval, execution and delivery of this
Second Amendment; and (k) the Company shall have paid the amendment fee in the amount of
$45,000 pro rata to the Noteholders. SECTION 6 Miscellaneous. (a) This Second Amendment shall be construed in connection with and as
part of the
Note Agreement, and except as modified and expressly amended by this
Second Amendment, all
terms, conditions and covenants contained in the Note Agreement, as
amended on the date
hereof, are hereby ratified and shall be and remain in full force and
effect. (b) Any and all notices, requests, certificates and other instruments
executed and
delivered after the execution and delivery of this Second Amendment may
refer to the Note
Agreement without making specific references to this Second Amendment but
nevertheless all
such references shall include this Second Amendment unless the context
otherwise requires. (c) The descriptive headings of the various Sections or parts of this
Second
Amendment are for convenience only and shall not affect the meaning or
construction of any of
the provisions hereof. (d) This Second Amendment shall be governed by and construed in accordance
with
New York law. (e) The execution hereof by you shall constitute a contract between us for
the uses
and purposes hereinabove set forth, and this Second Amendment may be
executed in any number
of counterparts, each executed counterpart constituting an original, but
all together only one
agreement. 7




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IN WITNESS WHEREOF, the parties hereto have caused this Second Amendment
to be duly executed by their respective authorized officers as of the day and
year first above written. THE CHALONE WINE GROUP, LTD.By:  /s/ Thomas Selfridge
     
          Title:EDNA VALLEY VINEYARDBy: The Chalone Wine Group, Ltd.,Managing General PartnerBy:  /s/ Thomas Selfridge
     
          Title:SHW EQUITY CO.By:  /s/ Thomas
Selfridge     
          Title:CANOE RIDGE VINEYARD LLCBy:  /s/ Thomas
Selfridge     
           Title:CANOE RIDGE WINERY, INC.By:  /s/ Thomas
Selfridge     
           Title:STATON HILLS WINERY COMPANY LIMITEDBy:  /s/ Thomas
Selfridge     
           Title:




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Accepted and Agreed:
    
    FARM CREDIT SERVICES OF AMERICA,
PCABy:/s/ Bruce P. Rouse
     Title:  Bruce P. Rouse VP




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Accepted and Agreed:
    
    FARM CREDIT SERVICES OF MINNESOTA VALLEY,
PCA, DBA PCS COMMERCIAL FINANCE GROUPBy:
    
    /s/ James M. GrafingName: James M. GrafingTitle:  SVP - SYNDICATED FINANCE