EMPLOYMENT AGREEMENT


 


This Employment Agreement
(the “Agreement”) is entered into as of February 24, 2014, by and between Taggares Agriculture Corp., a Delaware
corporation (the “Company”), and Jose Contreras (“Manager”) (collectively, the “Parties”).


 


1.             
Duties and Scope of Employment.


 


(a)   
Positions and Duties. Manager will serve as the Farm Manager of the Company (the “Position”).
As of the closing of the initial public offering of the common stock of the Company (the “IPO”), currently anticipated
to be late May 2014 (the “Effective Date”), Manager will render such business and professional services in the
performance of his duties, consistent with Manager’s position within the Company, as will reasonably be assigned to him by
the Company’s Board of Directors (the “Board”), to which he shall report. The period Manager is employed
by the Company under this Agreement is referred to herein as the “Employment Term.”


 


(b)  
Obligations. During the Employment Term, Manager will devote Manager’s full business efforts and time to the
Company and will use good faith efforts to discharge Manager’s obligations under this Agreement to the best of Manager’s
ability and in accordance with each of the Company’s corporate guidance and ethics guidelines, conflict of interests policies
and code of conduct as may be in effect from time to time.


 


(c)   
Other Entities. Manager agrees to serve and will be appointed, without additional compensation, as an officer and
director for any applicable subsidiaries, partnerships, joint ventures, limited liability companies and other affiliates of the
Company, including entities in which the Company has a significant investment as determined by the Company. As used in this Agreement,
the term “affiliates” will include any entity controlled by, controlling, or under common control of the Company.


 


(e) Work Location.
It is understood and agreed that Manager’s principal workplace will be Snake River Vineyards in Burbank, Washington. Manager
may occasionally be called upon to travel to other locations as reasonably required for business purposes.


 


2.             
At-Will Employment. Manager and the Company agree that Manager’s employment with the Company constitutes “at-will”
employment. Manager and the Company acknowledge that this employment relationship may be terminated at any time, upon written notice
to the other party, with or without Cause (as defined below) or for any or no Cause, at the option either of the Company or Manager.
However, as described in this Agreement, Manager may be entitled to severance benefits depending upon the circumstances of Manager’s
termination of employment, as set forth in this Agreement.


 


3.             
Compensation.


 


(a)   
Base Salary. As of the Effective Date, the Company will pay Manager an annualized base salary of $80,000 as compensation
for his services, subject to increase but not decrease without prior written consent of the Manager (such annual salary, as is
then effective, to be referred to herein as “Base Salary”). The Base Salary will be paid periodically in accordance
with the Company’s normal payroll practices and be subject to the usual, required withholdings.


 


(b)  
Stock Options. On the Effective Date, Manager will be granted a stock option under the Company’s 2014 Equity
Incentive Plan (the “Plan”) to purchase 20,000 shares of the Company’s common stock, at an exercise price
equal to the price per share of common stock sold in the IPO (the “Option”). Subject to the accelerated vesting
provisions set forth in the Plan, 100% of the shares subject to the Option will vest on the five-year anniversary of the commencement
of Manager’s employment, subject to Manager being a service provider to the Company on such date. The Option will be subject
to the terms, definitions and provisions of the Plan and the stock option agreement by and between Manager and the Company (the
“Option Agreement”), which documents, along with the option agreements relating the existing grants, are incorporated
herein by reference (collectively the “Equity Documents”). The Board may, but is not required to, grant additional
options to Manager on an annual basis, subject to Manager being a service provider to the Company on such date.


 






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(c)   
Bonus. Manager will be eligible for participation in the Company’s executive cash bonus plan, as determined
each year by the Board or its Compensation Committee. Manager’s annual bonus under the executive cash bonus plan will be
targeted at up to $40,000 based on the achievement of certain pre-established goals that shall be presented to Manager in writing
within thirty (30) days of commencement of the applicable bonus year.

 


4.              
Employee Benefits.

 


(a)   
Generally. Manager will be eligible to participate in accordance with the terms of all Company employee benefit plans,
policies and arrangements that are applicable to other executive officers of the Company, as such plans, policies and arrangements
may exist from time to time. Notwithstanding the foregoing, if the Company does not maintain its own medical and dental insurance
plans in which Manager may participate, the Company will reimburse Manager for the reasonable costs of a medical and dental policy
to cover Manager and his dependents.


 


(b)  
Vacation. Manager will be entitled to receive paid annual vacation in accordance with Company policy for other senior
executive officers, which shall not be less than three (3) weeks per calendar year.


 


(c)   
Other. Manager shall be entitled to the use of a Company pickup truck, which will be replaced with a new truck once the
then-current truck has been in use for 36 months.


 


5.             
Expenses. The Company will reimburse Manager for reasonable travel, entertainment and other expenses incurred by
Manager in the furtherance of the performance of Manager’s duties hereunder (including business related travel between the
Manager’s home and the Company’s offices or other locations), in accordance with the Company’s expense reimbursement
policy as in effect from time to time.


 


6.             
Termination of Employment. If Manager’s employment with the Company terminates for any reason, Manager will
be entitled to any (a) unpaid Base Salary accrued up to the effective date of termination; (b) pay for accrued but unused vacation;
(c) benefits or compensation as provided under the terms of any employee benefit and compensation agreements or plans applicable
to Manager; and (d) unreimbursed business expenses required to be reimbursed to Manager. If the IPO is abandoned for any reason,
all the provisions of this Agreement will terminate as of the date of such abandonment and there will be no liability of any kind
under this Agreement.


 


7.             
Severance.


 


(a)   
Termination by the Company Without Cause or by Manager for Good Reason. If Manager’s employment is terminated
by the Company without Cause (as defined below) or if Manager resigns for Good Reason (as defined below), then, subject to Section
8, Manager will receive, in addition to the compensation set forth in Section 6, payment of the aggregate of Manager’s Base
Salary and continuation of his benefits for three (3) months, such cash amount to be paid out in a lump sum and the benefits to
be paid in accordance with the Company’s regular payroll practices, except to the extent timing of payments are modified
by the 409A provision provided in Section 9.


 






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(b)  
Definition of Cause. For purposes of this Agreement, “Cause” will mean (i) the commission of, or plea
of guilty or no contest to, a felony or a crime involving moral turpitude or the commission of any other act involving willful
malfeasance or material fiduciary breach with respect to the Company; (ii) conduct that results in or is reasonably likely to result
in harm to the reputation or business of the Company or any of its Affiliates; (iii) gross negligence or willful misconduct with
respect to the Company or an Affiliate; or (iv) material violation of state or federal securities laws.


 


(c)   
Definition of Good Reason. For purposes of this Agreement, “Good Reason” will mean Manager’s resignation
within thirty (30) days following expiration of any Company cure period (discussed below) following the occurrence of one or more
of the following, without Manager’s written consent: (i) any material, adverse change in the Manager’s duties, responsibilities,
authority, title, status or reporting structure; (ii) a material reduction in the Manager’s base salary or bonus opportunity;
or (iii) a geographical relocation of the Manager’s principal office location by more than fifty (50) miles.


 


Manager will not resign
for Good Reason without first providing the Company with written notice of the acts or omissions constituting the grounds for “Good
Reason” within ninety (90) days of the initial existence of the grounds for “Good Reason” and a reasonable cure
period of not less than thirty (30) days following the date of such notice (during which the grounds have not been cured).


 


(d)  
Voluntary Termination or Termination for Cause. If Manager’s employment is terminated voluntarily, due to death
or disability, or is terminated for Cause by the Company, then (i) all further vesting of Manager’s outstanding equity awards
will terminate immediately; and (ii) except as set forth in Section 6, all payments of compensation by the Company to Manager hereunder
will terminate immediately.


 


8.            
Conditions to Receipt of Severance and Acceleration.


 


(a)   
Separation Agreement and Release of Claims. The receipt of any severance or other benefits pursuant to Section 7
will be subject to Manager signing and not revoking a separation agreement and release of claims in form and substance acceptable
to the Company in its discretion that becomes effective no later than sixty (60) days following Manager’s employment termination
date (such date, the “Release Deadline”). If the release does not become effective by the Release Deadline,
Manager will forfeit any rights to severance under this Agreement. In no event will severance payments be paid or provided until
the Release Deadline. Any payments delayed from the date Manager terminates employment through the Release Deadline will be payable
in a lump sum without interest on the Release Deadline and all other amounts will be payable in accordance with the payment schedule
applicable to each payment or benefit. In the event the termination occurs at a time during the calendar year where the release
could become effective in the calendar year following the calendar year in which Manager’s termination occurs, then any severance
payments under this letter that would be considered Deferred Compensation Separation Benefits (as defined below) will be paid on
the first payroll date to occur during the calendar year following the calendar year in which such termination occurs, or, if later,
(i) the Release Deadline, (ii) such time as required by the payment schedule provided above that is applicable to each payment
or benefit, or (iii) the Delayed Initial Payment Date (as defined below).


 






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(b)  
Other Requirements. Manager’s receipt and retention of severance payments will be subject to Manager executing
and continuing to comply with the terms of the Proprietary Information and Inventions Assignment Agreement attached hereto as Exhibit
A (the “PIIA Agreement”).


 


9.             
Section 409A.


 


(a)      
General Compliance. This Agreement is intended to comply with Section 409A or an exemption thereunder and shall be
construed and administered in accordance with Section 409A. Notwithstanding any other provision of this Agreement, payments provided
under this Agreement may only be made upon an event and in a manner that complies with Section 409A or an applicable exemption.
Any payments under this Agreement that may be excluded from Section 409A either as separation pay due to an involuntary separation
from service or as a short-term deferral shall be excluded from Section 409A to the maximum extent possible. For purposes of Section
409A, each installment payment provided under this Agreement shall be treated as a separate payment. Any payments to be made under
this Agreement upon a termination of employment shall only be made upon a "separation from service" under Section 409A.
Notwithstanding the foregoing, the Company makes no representations that the payments and benefits provided under this Agreement
comply with Section 409A and in no event shall the Company be liable for all or any portion of any taxes, penalties, interest or
other expenses that may be incurred by the Manager on account of non-compliance with Section 409A.


 


(b)      
Specified Employees. Notwithstanding any other provision of this Agreement, if any payment or benefit provided to
the Manager in connection with his termination of employment is determined to constitute "nonqualified deferred compensation"
within the meaning of Section 409A and the Manager is determined to be a "specified employee" as defined in Section 409A(a)(2)(b)(i),
then such payment or benefit shall not be paid until the first payroll date to occur following the six-month anniversary of the
Termination Date (the "Specified Employee Payment Date") or, if earlier, on the Manager's death. The aggregate
of any payments that would otherwise have been paid before the Specified Employee Payment Date shall be paid to the Manager in
a lump sum on the Specified Employee Payment Date and thereafter, any remaining payments shall be paid without delay in accordance
with their original schedule.


 


(c)      
Reimbursements. To the extent required by Section 409A, each reimbursement or in-kind benefit provided under this
Agreement shall be provided in accordance with the following:


 


		(i)	the amount of expenses eligible for reimbursement, or in-kind benefits provided, during each calendar
year cannot affect the expenses eligible for reimbursement, or in-kind benefits to be provided, in any other calendar year;



		(ii)	any reimbursement of an eligible expense shall be paid to the Manager on or before the last day
of the calendar year following the calendar year in which the expense was incurred; and



		(iii)	any right to reimbursements or in-kind benefits under this Agreement shall not be subject to liquidation
or exchange for another benefit.



 


(d)      
Tax Gross-ups. Any tax gross-up payments provided under this Agreement shall be paid to the Manager on or before
December 31 of the calendar year immediately following the calendar year in which the Manager remits the related taxes.


 


10.        
Section 280G


 






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(a)      
If any of the payments or benefits received or to be received by the Manager (including, without limitation, any payment
or benefits received in connection with a Change in Control or the Manager’s termination of employment, whether pursuant
to the terms of this Agreement or any other plan, arrangement or agreement, or otherwise) (all such payments collectively referred
to herein as the “280G Payments”) constitute “parachute payments” within the meaning of Section
280G of the Code and would, but for this Section 5.9, be subject to the excise tax imposed under Section 4999 of the Code (the
“Excise Tax”), then such 280G Payments shall be reduced in a manner determined by the Company (by the minimum
possible amounts) that is consistent with the requirements of Section 409A until no amount payable to the Manager will be subject
to the Excise Tax. If two economically equivalent amounts are subject to reduction but are payable at different times, the amounts
shall be reduced (but not below zero) on a pro rata basis.


 


(b)      
All calculations and determinations under this Section 10 shall be made by an independent accounting firm or independent
tax counsel appointed by the Company (the “Tax Counsel”) whose determinations shall be conclusive and binding
on the Company and the Manager for all purposes. For purposes of making the calculations and determinations required by this Section
10, the Tax Counsel may rely on reasonable, good faith assumptions and approximations concerning the application of Section 280G
and Section 4999 of the Code. The Company and the Manager shall furnish the Tax Counsel with such information and documents as
the Tax Counsel may reasonably request in order to make its determinations under this Section 10. The Company shall bear all costs
the Tax Counsel may reasonably incur in connection with its services.


 


11.         
Indemnification. Subject to applicable law, Manager will be provided indemnification to the maximum extent permitted
by the Company’s directors and officers insurance policies, if any, with such indemnification to be on terms determined by
the Board or any of its committees, but on terms no less favorable than provided to any other Company executive officer or director
and subject to the terms of any separate written indemnification agreement.


 


12.         
Confidential Information: Inventions; Nonsolicitation; Noncompetition. Manager acknowledges that he has executed
and agrees to be bound by the PIIA Agreement.


 


13.         
Clawback Provisions. Notwithstanding any other provisions in this Agreement to the contrary, any incentive-based
compensation, or any other compensation, paid to the Manager pursuant to this Agreement or any other agreement or arrangement with
the Company which is subject to recovery under any law, government regulation or stock exchange listing requirement, will be subject
to such deductions and clawback as may be required to be made pursuant to such law, government regulation or stock exchange listing
requirement (or any policy adopted by the Company pursuant to any such law, government regulation or stock exchange listing requirement).


 


14.         
Assignment. This Agreement will be binding upon and inure to the benefit of (a) the heirs, executors and legal representatives
of Manager upon Manager’s death, and (b) any successor of the Company. Any such successor of the Company will be deemed substituted
for the Company under the terms of this Agreement for all purposes. For this purpose, “successor” means any person,
firm, corporation, or other business entity which at any time, whether by purchase, merger, or otherwise, directly or indirectly
acquires all or substantially all of the assets or business of the Company. None of the rights of Manager to receive any form of
compensation payable pursuant to this Agreement may be assigned or transferred except by will or the laws of descent and distribution.
Any other attempted assignment, transfer, conveyance, or other disposition of Manager’s right to compensation or other benefits
will be null and void.


 






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15.        
Notices. All notices, requests, demands and other communications called for hereunder will be in writing and will
be deemed given (a) on the date of delivery if delivered personally; (b) one (1) day after being sent overnight by a well-established
commercial overnight service, or (c) four (4) days after being mailed by registered or certified mail, return receipt requested,
prepaid and addressed to the Parties or their successors at the following addresses, or at such other addresses as the Parties
may later designate in writing:


 


If to the Company:


 


Taggares
Agriculture Corp.


17855 Washington
124


Burbank,
WA 99323


Attention:
Chief Executive Officer


 


If to Manager:


 


at the last
residential address known by the Company.


 


16.         
Severability. If any provision hereof becomes or is declared by a court of competent jurisdiction to be illegal,
unenforceable, or void, this Agreement will continue in full force and effect without said provision.


 


17.         
Arbitration. The Parties agree that any dispute or controversy arising out of, relating to, or concerning the interpretation,
construction, performance, or breach of this Agreement will be settled by arbitration to be held in King County, Washington, in
accordance with the terms and conditions of the PIIA Agreement.


 


18.         
Integration. This Agreement, together with the PIIA Agreement and the Equity Documents referenced herein, represents
the entire agreement and understanding between the parties as to the subject matter herein and supersedes all prior or contemporaneous
agreements whether written or oral. No waiver, alteration, or modification of any of the provisions of this Agreement will be binding
unless in a writing and signed by duly authorized representatives of the parties hereto. In entering into this Agreement, no party
has relied on or made any representation, warranty, inducement, promise, or understanding that is not in this Agreement. To the
extent that any provisions of this Agreement conflict with those of any other agreement, the terms in this Agreement will prevail.


 


19.         
Waiver of Breach. The waiver of a breach of any term or provision of this Agreement, which must be in writing, will
not operate as or be construed to be a waiver of any other previous or subsequent breach of this Agreement.


 


20.         
Headings. All captions and Section headings used in this Agreement are for convenient reference only and do not form
a part of this Agreement.


 


21.         
Tax Withholding. All payments made pursuant to this Agreement will be subject to withholding of applicable taxes.


 


22.         
Governing Law. This Agreement and any disputes or claims arising hereunder will be construed in accordance with,
governed by and enforced under the laws of the State of Washington without regard for any rules of conflicts of law. Manager expressly
consents to the personal jurisdiction of the state and federal courts located in King County, Washington for any lawsuit filed
there against him by the Company arising from or relating to this Agreement.


 






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23.         
Acknowledgment. Manager acknowledges that he has had the opportunity to discuss this matter with and obtain advice
from his private attorney, has had sufficient time to, and has carefully read and fully understands all the provisions of this
Agreement, and is knowingly and voluntarily entering into this Agreement.


 


24.         
Counterparts. This Agreement may be executed in counterparts, and each counterpart will have the same force and effect
as an original and will constitute an effective, binding agreement on the part of each of the undersigned.


 


25.         
Background Investigation. The Company requires that Manager provide certain information to the Company so that the
Company can undertake appropriate investigation regarding the background of Manager. Manager must successfully complete a background
investigation to be eligible for employment with the Company (or any subsidiary of the Company). Manager agrees that the terms
provided by this Agreement are expressly conditioned upon the successful completion of any background investigation to the Company's
satisfaction, in its reasonable and good faith discretion. Manager consents to any such pre-employment background check, and agrees
to timely complete and submit any consent or waiver forms required by a provider of the Company's choice to conduct such background
checks.


 


(Signature page follows)


 




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IN WITNESS WHEREOF, each
of the parties has executed this Agreement, in the case of the Company by a duly authorized officer, as of the day and year written
above.


 


 


COMPANY:


 


TAGGARES AGRICULTURE CORP.


 


By:  /s/ Peter Taggares
IV


 


Name:  /s/ Peter Taggares
IV


 


Title:  Chief Executive Officer


 


 


EXECUTIVE:


 


 


/s/ Jose Contreras


Name: Jose Contreras