Document:

Exhibit 10.1

 

EMPLOYMENT AGREEMENT

 

THIS EMPLOYMENT AGREEMENT (this “Agreement”), by and between SMTEK
INTERNATIONAL, INC., a Delaware corporation (the “Company”), and Robert Miller
(“Employee”), is effective as of February 5, 2004 (the “Effective Date”), and
supersedes the Employment Offer Letter by and between the Company and Employee
(the “Offer Letter”).

 

WHEREAS, the Company desires to continue the employment of Employee in
the position of Vice President, Sales and Marketing, and

 

WHEREAS, Employee agrees to be employed by the Company
in such position pursuant to the terms and conditions of this Agreement.

 

NOW, THEREFORE, in consideration of the foregoing, and for other good
and valuable consideration, the receipt and sufficiency of which is hereby acknowledged,
the parties hereto agree as follows:

 

1.               EMPLOYMENT POSITION.

 

While employed by the Company, Employee shall (a) serve as the
Company’s Vice President, Sales and Marketing, (b) report directly to the
Company’s Chief Executive Officer (the “CEO”), and (c) perform the duties and
functions assigned to him by the CEO.

 

2.               COMPENSATION AND BENEFITS.

 

2.1  BASE SALARY.  While employed by the Company, Employee’s
base salary shall be $160,000 per year payable in accordance with the Company’s
standard payroll schedule; provided, however, that this base salary will be
reviewed for merit and cost of living increases, by the Company’s Board of
Directors (the “Board”) and/or the Compensation Committee of the Board, but
shall not be decreased without Employee’s prior written consent.

 

2.2  BONUSES.  During each fiscal year that Employee is
employed with the Company, Employee shall be eligible for an incentive bonus at
the Company’s sole discretion.  Employee
shall be eligible to receive annual bonus compensation based upon criteria and
the achievement of such objectives as the Board may from time to time
establish, in the exercise of its discretion. 
Employee shall also be eligible for an incentive bonus of up to $22,500
per quarter by meeting certain revenue objectives and financial goals
established via mutual written agreement by Employee and the CEO and as
approved by the Compensation Committee. 
These bonuses, if any, are intended to reward contribution to the
Company’s performance over an entire fiscal year, and consequently will be paid
only if the Company still employs Employee, Employee is in good standing at the
time the bonus is determined and Employee is in full compliance with this
Agreement.

 

2.3  OTHER BENEFITS.  Employee shall, while employed by the
Company, be eligible to participate in the employee benefits and benefit plans
that the Company generally makes available to its full-time regular employees,
subject to the terms and conditions of such plans, as they may be modified from
time to time.  In addition, while
employed by the Company, Employee shall be entitled to the following benefits:
a car allowance of $650 per month; a cell

 

 

phone with monthly charges reasonably limited by the Board; and a
corporate credit card with charges reasonably limited by the Board.

 

2.4  EXPENSE REIMBURSEMENT.  While employed by the Company, Employee
shall be entitled, in accordance with the reimbursement policies in effect from
time to time, to receive reimbursement from the Company for reasonably business
expenses incurred by Employee in the performance of Employee’s duties
hereunder, provided Employee furnishes the Company with vouchers, receipts and
other details of such expenses in the form required by the Company, sufficient
to substantiate a deduction for such business expenses under all applicable
rules and regulations of federal and state taxing authorities.

 

2.5  WITHHOLDING.  The Company shall deduct and withhold from the compensation
payable to Employee hereunder any and all applicable federal, state and local
income and employment withholding taxes and any other amounts require to be
deducted or withhold by the Company under applicable statutes, regulations,
ordinances or orders governing or requiring the withholding or deduction of
amounts otherwise payable as compensation or wages to employees.

 

3.               TERMINATION.

 

3.1  AT WILL.  Employee and the Company acknowledge and
agree that Employee’s employment with the Company is expressly “at will”.  This means that either party may terminate
Employee’s employment with or without Cause (as defined in Section 3.3(d)
below) upon written notice.  Any
termination of Employee’s employment is, however, subject to the terms and
provisions of this Agreement as to severance pay and other obligations.

 

3.2  VOLUNTARY RESIGNATION.

 

(a)  NO SEVERANCE.  In the event that Employee’s employment with
the Company terminates as a result of his voluntary resignation, Employee shall
be entitled only to accrued but unpaid salary and vacation as of the date of
termination.

 

(b)  RELOCATION OF
HEADQUARTERS/DIRECTED RESIGNATION NOT VOLUNTARY RESIGNATION.  For purposes of this Agreement, the term
“voluntary resignation” shall not include any situation where:  (1) Employee terminates his employment with
the Company within 60 days after the Company (A) relocates the Corporate
headquarters more than 20 miles from Moorpark, California or (B) requires Employee to
physically report for his employment duties more than 20 miles from Moorpark,
California; or (2) Employee resigns pursuant to a direct request of the CEO or
the Board.  A termination or resignation
under such circumstances shall be treated as an involuntary termination without
Cause, and Employee’s entitlement to severance pay and additional benefits in
accordance with the provisions of Sections 3.3(a), 3.3(b) and 3.3(c) below
shall apply unless, and only if, such termination was for Cause.

 

3.3  INVOLUNTARY TERMINATION.

 

(a)  INVOLUNTARY
TERMINATION.  The Company shall be
deemed to have terminated the employment of Employee involuntarily and without
Cause if (1) Employee’s full-time employment is terminated by the Company
without Cause; or (2) Employee terminates his employment with the Company
within 60 days after the Company materially reduces Employee’s functions,
duties or

 

 

responsibilities or reporting relationships or otherwise demotes
Employee.  The parties agree, however,
that if global parts/materials duties are taken from Employee, such action
alone will not constitute an involuntary termination without Cause under (2)
above.

 

(b)  SEVERANCE PAY.  In the event Employee’s employment is involuntarily terminated
without Cause as stated in Section 3.2(b) or 3.3(a) above, Employee shall
be entitled to severance pay equal to three (3) months of his salary at his
highest base salary with the company within the initial year of the Effective
Date (through February 4, 2005), six (6) months of his salary at his
highest base salary with the company from year one until year two, and twelve
(12) months of his highest base salary with the company after the completion of
year 2 and thereafter, payable monthly over the severance period after the date
of termination.

 

(c)  ADDITIONAL BENEFITS.  In the event of termination because of any
of the events described in Section 3.2(b), Employee’s benefits as outlined
in Section 2.3 shall continue for a period of one year following the
occurrence of either of those events. 
In the event of termination of Employee’s employment pursuant to
Section 3.3(a), Employee’s benefits as outlined in Section 2.3 shall
continue for 30 days from the date of termination of his employment with the
Company.  Otherwise, Employee’s benefits
terminate upon the date of Employee’s termination from the Company.

 

(d)  CAUSE.  For purposes of this Agreement, “Cause”
shall mean (1) the willful and deliberate refusal or failure of Employee to
comply with a lawful written instruction of the CEO or the Board, which refusal
is not remedied by Employee within 30 days after his receipt of written notice
from the Company identifying the refusal; (2) an act or acts of personal
dishonesty by Employee that were intended to result in personal enrichment of
Employee at the expense of the Company; (3) Employee’s conviction of any felony
involving an act of moral turpitude; or (4) Employee’s material breach of any
representation or covenant contained in Section 5, 6 or 7 of this
Agreement.  In the event that the
Company terminates Employee’s employment for Cause, Employee shall be entitled
only to accrued but unpaid salary and vacation as of the date of termination.

 

3.4  DEATH. 
In the event of Employee’s death, the Employment Period shall
automatically terminate.  Termination of
Employee’s employment as a result of his death shall not result in any
obligation by the Company to pay severance pay (unless the obligation to pay
severance exists as of the date of Employee’s death).  However, Employee shall be entitled to accrued but unpaid salary
and vacation earned through the date of termination.

 

3.5  DISABILITY. 
In the event of Employee’s Disability (as defined below) during the
Employment Period for any period of at least six consecutive months, the
Company shall have the right, which may be exercised in its sole discretion, to
terminate Employee’s employment.  In the
event the Company elects to terminate Employee, Employee shall not be entitled
to any severance pay at any time but shall be entitled to (a) accrued but
unpaid salary and vacation earned through the date of termination and (b)
normal disability benefits in accordance with the policies established from
time to time by the Company.  For
purposes of this Agreement, “Disability” shall mean the inability of Employee
to perform his employment services hereunder by reason of physical or mental
illness or incapacity as determined by a physician chosen by the Company and
reasonably satisfactory to Employee or his legal representative.

 

 

4.               TERM.

 

The term during
which Employee will provide services to the Company pursuant to this Agreement
will commence on the Effective Date and will expire on the third anniversary of
the Effective Date (the “Employment Period”), unless terminated earlier
pursuant to the provisions of Section 3 provided that the term shall
“evergreen” commencing on the second anniversary of the Effective Date so that
until and unless Company notifies Employee that the term will be permitted to
expire, there will at all times be six (6) moths remaining in the term.

 

5.               NONDISCLOSURE OF INFORMATION AND
NON-SOLICITATION OF EMPLOYEES.

 

5.1  NONDISCLOSURE OF
CONFIDENTIAL INFORMATION.  Except in the
performance of his duties hereunder, Employee shall not, either during or
subsequent to the Employment Period, disclose, directly or indirectly, to any
person or entity or use for his own direct or indirect benefit any Confidential
Information (as defined below) pertaining to the Company obtained by Employee
in the course of his employment with the Company.  For purposes of this Agreement, “Confidential Information” shall
include any proprietary or confidential information of any kind, nature or
description concerning any matters affecting or relating to the business of the
Company, including, without limitation, the Company’s products, services,
processes, suppliers, customers, customers’ account executives, financial,
sales and distribution information, price lists, identity and list of actual
and potential customers, trade secrets, technical information, business plans
and strategies to the extent that such information has not been publicly
disseminated by the Company, other than through a breach hereof.  The Company shall have available to it all
remedies, including, but not limited to suits for injunctive relief and/or
damages, as a result of Employee’s breach of confidentiality.  This provision shall survive the termination
of the employment relationship between the Company and Employee.

 

5.2  NON-SOLICITATION.  Employee agrees that, so long as he is
employed by the Company and for a period of six (6) months after termination of
his employment for any reason, he or she shall not (a) directly or indirectly
hire, solicit, induce or attempt to solicit or induce any Company employee to
discontinue his or her employment with the Company, (b) usurp any opportunity
of the Company that Employee became aware of during his tenure at the Company,
or (c) directly or indirectly solicit or induce or attempt to influence any
person or business that is an account, customer or client of the Company to
restrict or cancel the business of any such account, customer or client with
the Company.

 

6.               NON-COMPETITION.

 

So long as Employee is employed by the Company and for a period of six
(6) months after termination of his employment for any reason, Employee shall
not, without the prior written consent of the Board, either directly or
indirectly engage in any business engaged in by the Company wherever the
Company conducts its business.  The term
“directly” means Employee is acting on his own or is acting as a consultant,
employee, director, agent, representative or associate with or for any other
person or entity.  The term “indirectly”
means Employee is acting through any partnership, joint venture, corporation or
other entity or person.

 

 

7.               REPRESENTATIONS AND COVENANTS OF
EMPLOYEE & COMPANY.

 

7.1  BEST EFFORTS.  In consideration of the payments to be made
hereunder, Employee agrees to devote his entire business time and attention to
the performance of his duties hereunder, and to serve the Company diligently
and to the best of his abilities. 
Notwithstanding the foregoing, Employee shall have the continuing right
to (a) make passive investments in the securities of any publicly-owned
corporation, (b) make any other passive investments with respect to which he is
not obligated or required to, and does not in fact, devote any managerial
efforts, and (c) serve as a director or consultant for other companies or
entities provided that they are not in a business that competes with the
Company.

 

7.2  NO RESTRICTIONS.  Employee represents that he is under no
actual or alleged restriction, limitation or other prohibition (whether as a
result of his prior employment or otherwise) to perform his duties as described
herein.

 

7.3  AUTHORITY.  The individual signing this Agreement on
behalf of the Company hereby represents and warrants that he has full authority
to do so on behalf of the Company.

 

7.4  DUTIES UPON
TERMINATION.  Upon termination of his
employment with the Company for any reason, Employee agrees to deliver promptly
to the Company all equipment, notebooks, documents, reports, files, samples,
books, correspondence, lists, computes disks or files and the like relating to
the Company’s business, which are or have ever been in his possession or under
his control.

 

8.               MISCELLANEOUS.

 

8.1  NO WAIVER.  The waiver by either party of a breach of
any provision of this Agreement shall not operate as or be construed as a
waiver of any subsequent breach thereof.

 

8.2  NOTICES.  Any and all notices referred to herein shall
be sufficiently furnished if in writing, and sent by registered or certified
mail, postage prepaid, to the respective parties at the following addresses or
such other address as either party may from time to time designate in writing:

 

	
  To the Company:

  	
   

  	
  SMTEK
  International, Inc.

  
	
   

  	
   

  	
  200 Science Drive

  
	
   

  	
   

  	
  Moorpark, CA  93021-2003

  
	
   

  	
   

  	
  Attention: Secretary

  
	
   

  	
   

  	
   

  
	
  To Employee:

  	
   

  	
  Robert Miller

  
	
   

  	
   

  	
  at current address on file at the Company

  

 

8.3  ENTIRE AGREEMENT/RELEASE
UNDER OFFER LETTER.  This Agreement
supersedes any and all prior written or oral agreements between Employee and
the Company, including the Offer Letter, and contains the entire understanding
of the parties hereto, with respect to the terms and conditions of Employee’s
employment with the Company.  If this
Agreement is inconsistent with, or contradicts any term or provision in, any
option plan or agreement, including the Company’s Equity Incentive Plans and
Employee’s option

 

 

agreements under Equity Incentive Plans, the terms and provisions of
such option plan and/or agreement shall govern and supercede the terms and
provisions of this Agreement.

 

8.4  GOVERNING LAW.  This Agreement shall be construed and
enforced in accordance with the laws and decisions of the State of California.

 

8.5  COUNTERPARTS.  This Agreement may be executed in one or
more counterparts, each of which shall be deemed to constitute an original, but
all of which shall constitute one and the same instrument.

 

8.6  AMENDMENT.  This Agreement may not be modified, amended,
altered or supplemented except by written agreement between Employee and the
Company.

 

8.7  ASSIGNMENT AND PARTIES IN
INTEREST.  This Agreement shall inure to
the benefit of and be binding upon the parties named herein and their
respective successors and assigns; provided, however, Employee may not assign
any of his rights or obligations hereunder. 
Further, the Company will not consolidate or merge into or with another
corporation, or transfer all or substantially all of its assets to another
corporation or entity or person, unless such shall assume and be able to
satisfy all the duties and obligations of the Company under this Agreement.

 

8.8  ATTORNEY’S FEES &
COSTS.  In the event an action in law or
in equity is required to enforce or interpret the terms and conditions of this
Agreement, the prevailing party shall be entitled to reasonable attorneys fees
and costs in addition to any other relief to which that party may be entitled.

 

8.9  INTERPRETATION.   No provision of this document is to be
interpreted for or against any party because that party or party’s legal
representative drafted it.

 

8.10  SEVERABILITY.  In the event that any covenant, condition or
other provision herein contained is held to be invalid, void or illegal by any
court of competent jurisdiction, the same shall be deemed severable from the
remainder of this Agreement and shall in no way affect, impair or invalidate
any other covenant, condition or other provision herein contained.  If such condition, covenant or other
provision shall be deemed invalid due to its scope or breadth, such covenant,
condition or other provision shall be deemed valid to the extent of the scope
or breadth permitted by law.

 

8.11 
CAPTIONS/HEADINGS.  The captions
or headings in each section or sub-section are only for convenience
purposes.  Such captions or headings
shall not be used to interpret the sections or sub-sections of this Agreement.

 

 

IN WITNESS HEREOF, THE PARTIES TO THIS AGREEMENT AGREE TO THE ABOVE AND
BIND THEMSELVES ACCORDINGLY.

 

The “Company”:

 

SMTEK International, Inc., a Delaware corporation

 

 

	
    /s/ Edward J. Smith

  	
   

  
	
  By:

  	
  Edward J. Smith

  
	
  Its:

  	
  President & CEO

  
	
  Date:

  	
  9/17/04

  
	
   

  
	
   

  
	
  “Employee”:  Bob Miller

  
	
   

  
	
   

  
	
    /s/ Robert Miller

  	
   

  
	
  By:

  	
  Robert Miller

  
	
  Date:

  	
  9/18/04AMENDMENT AGREEMENT

                  AMENDMENT  AGREEMENT,  dated as of  September  30,  2004 (this
"Agreement"),  to: (i) the Note Purchase Agreement, dated as of May 28, 2004 (as
heretofore  amended  and  supplemented  and as it in the future may be  amended,
modified or  supplemented  from time to time in accordance  with its terms,  the
"Note  Purchase  Agreement"),  by and among  Knightsbridge  Fine Wines,  Inc., a
Nevada  corporation  ("Knightsbridge"),  and each of Longview Fund, LP, Longview
Equity Fund, LP and Longview  International  Equity Fund, LP (collectively,  the
"Purchasers"),  (ii) that certain Convertible  Promissory Note No. PN-04-1 dated
May 28, 2004 (the "First Note"),  in the original  principal  amount of $250,000
issued by  Knightsbridge  in favor of  Longview  Fund,  LP,  (iii) that  certain
Convertible  Promissory Note No. PN-04-2 dated May 28, 2004 (the "Second Note"),
in the original principal amount of $200,000 issued by Knightsbridge in favor of
Longview Equity Fund, LP, and (iv) that certain Convertible  Promissory Note No.
PN-04-3  dated May 28, 2004 (the "Third Note" and,  collectively  with the First
Note and the Second Note,  the  "Notes"),  in the original  principal  amount of
$50,000 issued by Knightsbridge in favor of Longview  International Equity Fund,
LP.

                  WHEREAS,  Knightsbridge  is in default under the Note Purchase
Agreement and each of the Notes for  non-payment  of principal and interest owed
under the Notes in cash on August 26, 2004;

                  WHEREAS,  Knightsbridge  currently  owes to the Purchasers the
aggregate  principal  amount  under  the Notes of  $483,500,  plus  interest  of
$5,076.75 through September 30, 2004; and

                  WHEREAS,  in order to cure any  event of  default  or  default
under  the  Note  Purchase  Agreement  and the  Notes,  including  defaults  for
non-payment of principal or interest due and owing under the Notes,  the parties
hereto have agreed to amend certain  provisions  of the Note Purchase  Agreement
and each of the Notes as set forth herein.

                  NOW,  THEREFORE,  for good  and  valuable  consideration,  the
receipt  and legal  sufficiency  of which is hereby  acknowledged,  the  parties
hereto agree as follows:

1.       Amendments  to  Note  Purchase  Agreement  and  Notes.  Subject  to the
conditions as to  effectiveness  set forth in Section 3 of this  Agreement,  the
Note Purchase Agreement and the Notes are hereby amended as follows:

         (a)      The  Maturity  Date (as such  term is  defined  in each of the
Notes) is hereby  extended  for a period of sixty (60) days from August 26, 2004
to November 9, 2004 (as hereby amended, the "Maturity Date").

         (b)      As an  inducement  to the  extension of the  Maturity  Date on
the Notes by the  Purchasers,  in addition to the Note  Payment  Shares (as such
term is defined in the Note Purchase Agreement), Knightsbridge shall immediately
issue and  deliver to the  Purchasers  certificates  representing  an  aggregate
amount of three hundred thousand (300,000) shares  ("Additional  Shares") of the
common stock,  par value $.001 per share,  of  Knightsbridge  ("Common  Stock"),
which Additional  Shares shall be issued to each of the Purchasers in proportion
to their  original  principal  amount of each of their  Notes.  Such  Additional
Shares shall be deemed  Registrable  Securities  (as such term is defined in the
Note Purchase Agreement), and the Additional Shares shall be registered with the
Securities and Exchange Commission in accordance with the terms,  conditions and
provisions of the Note Purchase Agreement.

<PAGE>

         (c)      Commencing as of the date hereof, minimum interest payments on
the outstanding principal amount of the Notes shall be payable by Knightsbridge,
on a monthly  basis at the end of each month,  in the amount of $7,500 until the
Maturity  Date,  as extended in Section 1(a) above.  From the period  commencing
August 26, 2004 through the Maturity Date, interest on the outstanding principal
amount of the Notes  shall  accrue at the rate of  eighteen  (18%)  percent  per
annum.

         (d)      Commencing as of the date hereof,  Knightsbridge  shall prepay
the  outstanding  principal  and interest  under the Notes by an amount equal to
fifty (50%) percent of the gross  proceeds  received by  Knightsbridge  from the
sale or  collection  of any  accounts  receivable,  or from the  proceeds of any
financing by  Knightsbridge of its inventory or accounts  receivables,  less any
payroll  expenses   (including   payroll   expenses  to  senior   executives  of
Knightsbridge,  including,  without limitation,  Mr. Jake Shapiro).  Collections
from the sale or  collection  of  accounts  receivable  will be  payable  to the
Purchasers on a monthly basis to a bank account designated by the Purchasers.

         (e)      Knightsbridge may prepay the Notes at any time, in whole or in
part,  prior to November 9, 2004,  without any prepayment  penalty.  All partial
prepayments  of the Notes,  howsoever  made,  shall be applied  first to accrued
interest,  until all accrued  interest has been paid in full, and thereafter all
remaining  amounts shall be applied to the payment of the outstanding  principal
amount of the Notes.

         (f)      As  security  for  the   performance  of  the  obligations  of
Knightsbridge under the Note Purchase Agreement,  the Notes, and this Agreement,
Mr. Jake Shapiro shall pledge two hundred and fifty thousand (250,000) shares of
Common Stock (the "Pledged  Shares") owned by him to the Purchasers  pursuant to
that certain  Pledge  Agreement,  dated as of the date hereof,  by and among Mr.
Shapiro and each of the Purchasers,  in the form set forth as Exhibit A attached
hereto. Upon foreclosure under the Pledge Agreement, the Pledged Shares shall be
deemed Registrable Securities,  and such Pledged Shares shall be registered with
the Securities and Exchange Commission in accordance with the terms,  conditions
and provisions of the Note Purchase Agreement.

2.       Representations  and Warranties.  Knightsbridge  hereby  represents and
warrants  to each of the  Purchasers  as of the date  hereof as  follows  (which
representations  and warranties shall survive the execution and delivery of this
Agreement):

         (a)      All  representations  and warranties made by  Knightsbridge in
Section 3 of the Note  Purchase  Agreement  and  Section 7 of each of the Notes,
after taking into account the effect of this Agreement,  are true and correct in
all material respects as of the date hereof with the same force and effect as if
made on such date (except to the extent that any such representation or warranty
relates expressly to an earlier date).

         (b)      Knightsbridge has the requisite power to execute,  deliver and
carry out the terms and provisions of this Agreement.

         (c)      This  Agreement  has  been  duly  executed  and  delivered  by
Knightsbridge  and  constitutes  the  legal,  valid and  binding  obligation  of
Knightsbridge,  and is enforceable against  Knightsbridge in accordance with its
terms  subject (i) as to  enforcement  of remedies,  to  applicable  bankruptcy,
insolvency,  reorganization,  moratorium  and other  similar laws  affecting the
enforcement of creditors'  rights  generally,  from time to time in effect,  and
(ii) to general principles of equity.

<PAGE>

         (d)      After giving effect to this  Agreement,  no event has occurred
and is continuing which constitutes or would constitute a Default or an Event of
Default under the Note Purchase Agreement or the Notes.

3.       Conditions  Precedent.  Notwithstanding  any term or  provision of this
Agreement to the contrary, Section 1 hereof shall not become effective until:

         (a)      Each of the  Purchasers  shall  receive  counterparts  of this
Agreement,  duly  executed and  delivered on behalf of  Knightsbridge,  Mr. Jake
Shapiro, individually, and each of the Purchasers.

         (b)      Each of the Purchasers shall receive certificates representing
the  Additional  Shares,  which shall be allocated to each of the  Purchasers in
proportion to their original principal amount of each of their Notes.

         (c)      Each of the Purchasers shall receive a Pledge Agreement,  duly
executed and  delivered by Mr. Jake Shapiro and each of the  Purchasers,  in the
form set forth as Exhibit A attached hereto,  together with a stock  certificate
and stock powers duly  endorsed in blank,  to effectuate  the  perfection of the
pledge of two hundred and fifty thousand  (250,000) shares of Common Stock owned
by Mr. Shapiro in favor of the Purchasers.

4.       Fees and Expenses of Purchasers. Knightsbridge agrees to immediately ay
all reasonable  fees and  out-of-pocket  expenses  incurred by the Purchasers in
connection with the  preparation  and negotiation of this Agreement,  including,
without limitation, the reasonable fees and out-of-pocket expenses of counsel to
the Purchasers in an aggregate amount equal to $5,000.

5.       References to Agreements. The term "Agreement",  "hereof", "herein" and
similar terms as used in the Note Purchase Agreement, and references in the Note
Purchase Agreement and the Notes to the Note Purchase Agreement,  shall mean and
refer to, from and after the effective date of the amendments  contained  herein
as determined in accordance with Section 3 hereof, the Note Purchase  Agreement,
as amended by this Agreement.

6.       Continued Effectiveness.  Nothing herein shall be deemed to be a waiver
of any  covenant or agreement  contained  in, or any Default or Event of Default
under,  the Note  Purchase  Agreement  or any of the Notes,  except as expressly
provided for hereby,  and each of the parties  hereto agrees that, as amended by
this  Agreement,  all of the  covenants  and  agreements  and  other  provisions
contained  in the Note  Purchase  Agreement  and the Notes shall  remain in full
force and effect from and after the date of this Agreement.

7.       Counterparts.   This   Agreement   may  be  executed  in  two  or  more
counterparts,  each of which shall be an original,  and all of which, when taken
together,  shall  constitute  a  single  instrument.  Delivery  of  an  executed
counterpart  of a  signature  page to this  Agreement  by  telecopier  shall  be
effective as delivery of a manually executed counterpart of this Agreement.

8.       GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND
GOVERNED BY THE LAWS OF THE STATE OF NEW YORK (OTHER THAN THE  CONFLICTS OF LAWS
PRINCIPLES THEREOF).

                  [REMAINDER OF PAGE LEFT INTENTIONALLY BLANK]

<PAGE>

               IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed by their respective officers thereunto duly authorized as of
the day and year first above written.

                                     KNIGHTSBRIDGE FINE WINES, INC.

                                     By:
                                         ----------------------------------
                                         Name:
                                         Title:

                                     LONGVIEW FUND, LP

                                     By:
                                         ----------------------------------
                                         Name:
                                         Title:

                                     LONGVIEW EQUITY FUND, LP

                                     By:
                                         ----------------------------------
                                         Name:
                                         Title:

                                     LONGVIEW INTERNATIONAL EQUITY FUND, LP

                                     By:
                                         Name:
                                         Title:

                                     --------------------------------------
                                     Jake Shapiro, individually

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