Document:

Exhibit

Exhibit 10.2
AMENDED AND RESTATED EMPLOYMENT AGREEMENT

THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (“Agreement”) dated July 1, 2017 (“Effective Date”) is entered into by Newpark Resources, Inc.  (the “Company”), a Delaware corporation, and Bruce Smith (the “Executive ”) and is intended to incorporate and accurately reflect all prior negotiations, discussions, or agreements between the Parties.  Executive and the Company may sometimes be referenced herein individually as “Party” or collectively as the “Parties.”

WHEREAS, Executive is currently employed as Executive Vice President of the Company and President of Newpark Drilling Fluids (“NDF”) under that certain Employment Agreement by and between Executive and the Company dated April 20, 2007, as amended (“Prior Employment Agreement”);

WHEREAS, the Parties have mutually agreed that Executive will relinquish the roles of Executive Vice President of the Company and President of NDF and assume the position of Chief Technology Marketing Officer (“CTO”) for the Company; 

WHEREAS, Executive acknowledges and agrees that the above-stated change in his role does not constitute Good Reason for his voluntary resignation under the Prior Employment Agreement and expressly waives any such claim against the Company; and

WHEREAS, the Parties desire to amend, restate, and replace the Prior Employment Agreement in its entirety, except as specifically provided herein.  

WHEREAS, the Company desires to retain the services of the Executive as CTO of the Company and for the Executive to enter into certain restrictive covenants as set forth in this Agreement.  All, in order to enhance shareholder value and grow the Company’s business to its maximum potential, and as Executive has represented himself as qualified to achieve these objectives, and as the Parties mutually desire and agree to enter into an employment relationship by means of this Employment Agreement.

NOW, THEREFORE in consideration of the promises and mutual covenants herein contained, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, it is mutually covenanted and agreed by and between the Parties as follows: 

		
	1.
	Employment of Executive

1.1.    Employment Term.    The Company hereby offers to employ Executive, and Executive hereby agrees to serve as the CTO for the Company reporting to the Chief Executive Officer of the Company on the terms and conditions set forth in this Agreement. The period during which Executive is employed hereunder shall be referred to as the “Employment Term.” The Executive’s Employment Term under this Agreement shall commence on the Effective Date and shall continue for a period of one (1) year (“Initial Term”), subject to the provisions of Section 2, and shall automatically be renewed for successive one (1) year periods (each a “Renewal Term”) thereafter unless Executive’s employment is terminated by either Party giving written notice to the other Party at least sixty (60) days in advance of the expiration of the Initial Term or any Renewal Term.  Termination by sixty (60) days' written notice pursuant to this Section 1.1 shall be treated as a termination by Executive under Section 2.2 if given by Executive or as a termination without Cause under Section 2.3 if given by the Company.  

1.2.    Compensation and Benefits. 

(a)Base Salary.   During the Employment Term, the Company will pay Executive a base monthly salary at an annualized rate of at least Four Hundred and Sixteen Thousand Dollars ($416,000) per year (“Base Salary”).  The Company will review annually Executive’s Base Salary and, at its reasonable discretion, may increase such Base Salary as it deems appropriate, provided Executive’s Base Salary for any subsequent twelve month year shall not be less than the preceding twelve month year except with Executive’s prior written agreement.  Adjustments in Base Salary shall be automatically incorporated herein by reference and be contractual obligations of Company.  Such Base Salary shall be paid in accordance with the Company’s standard payroll practice for its senior staff. 

(b)Incentive Compensation.   In addition to the Base Salary, during the Employment Term Executive shall be eligible for participation in the 2010 Annual Cash Incentive Plan (“ACIP”) or any similar plan that replaces the ACIP, subject to any amendments made at the Board’s discretion as provided herein.  Performance measures and goals will be set by the Compensation Committee of the Board.  The Target Award under the ACIP is equal to sixty-five (65%) percent of Executive’s actual Base Salary paid for that calendar year.  Payout under the ACIP for a particular year will be made in cash by March 15 of the next year, e.g. payout for 2017 will occur prior to March 15, 2018, except to the extent of any payments associated with 

achievement beyond the “over-achievement” level, which are deferred, as provided for in the ACIP.  Actual awards, in accordance with the Board approved plan and any amendments, are at the discretion of the Compensation Committee, provided the Company represents and warrants to the Executive that the terms of the ACIP will not be amended, modified, changed, or interpreted or applied to make them less generous than they were on the Effective Date, without prior written notice.

(c)Stock Options and Share Awards.  In addition, Executive shall be eligible to participate in the Long Term Incentive Plan (“LTIP”) and to receive such number of stock options, time -vested restricted stock and/or performance restricted share awards as are granted by the Compensation Committee in accordance with the Board approved plans (including the 2015 Employee Equity Incentive Plan, all such plans being referred to as the “Plans”).  Vesting shall be as provided in these existing Plans, and subject to any amendments.  When used in this Agreement “stock” and “shares” mean the Company’s publicly traded common stock, $.01 par value.  Further, throughout this Agreement, the words “stock options, awards, and grants” are used separately or in various combinations to describe awards of shares or the right to acquire shares of Company stock under various Plans or this Agreement, or both. 

(d)Benefit Plans and Vacation.  Throughout Executive’s employment under this Agreement, Executive shall be entitled to participate in any and all employee benefits plans or programs of the Company to the extent that he is otherwise eligible to participate under the terms of those plans, including participation in any welfare benefit programs provided by the Company (including, without limitation, medical, prescription, dental, disability, employee life, group life, accidental death and travel accident insurance programs), and fringe benefits and perquisites available generally to Executive Officers of the Company. The Company shall not be obligated to institute, maintain, or refrain from changing, amending, or discontinuing any benefit plan, or perquisite, so long as such changes are similarly applicable to other Executive Officers of the Company.  During the Employment Term, Executive shall be entitled to life insurance equal to three (3) times his Base Salary.  The Executive shall also be entitled to a car to be furnished by the Company.  Personal use of the car will be considered as income to the Executive and appropriate taxes applied to such income. Selection of the vehicle shall be in accordance with the Company’s Vehicle Policy. During the Employment Term, Executive shall be entitled to four (4) weeks paid vacation each calendar year in accordance with the Company’s policies in effect from time to time, provided the four (4) of weeks of vacation provided in this Section 1.2(e) shall not be reduced under such policies. 

(e)Expense Reimbursement.  The Company will reimburse Executive in full for all reasonable and necessary business, entertainment and travel expenses incurred or expended by Executive in the performance of the duties hereunder in accordance with the Company’s customary practices applicable to its senior staff.

(f)Location.  Executive’s principal place of employment will be located at the Company’s offices in Katy, Texas and The Woodlands, Texas. 

1.3.    Extent of Services; Conflicts of Interest.  

(a)    During the Employment Term, Executive shall devote substantially all of his working time, attention and energies to the business of the Company, and its affiliated entities.  Executive may be involved in charitable and professional activities, trade and industry associations and the like providing these do not interfere with the requirements of employment with the Company.

(b)    During the Employment Term, Executive shall not, directly or indirectly, without the prior consent of the Chief Executive Officer of the Company, render any services to any other person or entity or acquire any interests of any type in any other entity, that might be deemed in competition with the Company or any of its subsidiaries or affiliates or in conflict with his position, provided, however, that the foregoing shall not be deemed to prohibit Executive from (i) acquiring, solely as an investment, any securities of a partnership, trust, limited liability company, corporation or other entity (A) so long as he remains a passive investor in such entity, (B) so long as he does not become part of any control group thereof, and (C) so long as such entity is not, directly or indirectly, in competition with the Company or any of its subsidiaries or affiliates, or (ii) serving as a consultant, advisor or director of any corporation which has a class of outstanding equity securities registered under Sections 12(b) or 12(g) of the Securities Exchange Act of 1934, as amended (the “ Exchange Act ”), and which is not in competition with the Company or any of its subsidiaries or affiliates. 

		
	2.
	Termination of Employment

2.1.    Termination.  Executive’s employment by the Company shall be terminated (a) automatically, upon Executive’s death or Executive becoming Totally Disabled (as defined below), (b) by Executive upon 30 days’ written notice to the Company with Good Reason (as defined below), (c) by Executive upon his voluntary resignation without Good Reason, (d) by the Company for Cause (as defined below), (e) by the Company without Cause, or (f) at the end of the Employment Term as defined in Section 1.1.  

The effective date of the termination of Executive’s employment for any reason hereunder shall be referred to herein as the “Termination Date.”

2.2.    Termination by Executive Without Good Reason   If Executive’s employment is terminated by Executive at any time before the end of the Employment Term for any reason other than Good Reason, Executive shall be entitled to receive only (a) his Base Salary and other earned compensation through the Termination Date and (b) such stock options, share awards, and grants as shall have fully vested before the Termination Date. 

2.3.    Termination by Executive with Good Reason or by the Company without Cause.  If Executive’s employment is terminated by Executive with Good Reason or by the Company without Cause, then Executive shall be entitled to receive, upon execution of a General Release of claims against the Company:  (a) in a lump sum payment within thirty (30) days of the Termination Date, an amount equal to the greater of (i) Executive's current annual Base Salary as provided herein plus Target Award incentive (65%) for the remaining period of the Initial Term or (ii) Executive's current annual Base Salary as provided herein plus Target Award incentive (65%) for one year; (b) the Company will pay the COBRA premium for Executive to continue the same coverage under the Company’s group medical insurance program period for the greater of the remaining period of the Employment Term or twelve (12) months subject to an overall maximum of eighteen (18) months; and (c) direct payment by the Company for the costs of outplacement services obtained by the Executive within the one (1) year period after the Termination Date, not to exceed $20,000.  The term “Target Award” as used herein shall have the meaning as established under the 2010 Annual Cash Incentive Plan.

2.4.    Termination for Cause.  If Executive’s employment is terminated at any time during the Employment Term for Cause (as defined herein), then Executive shall be entitled to receive only (a) his Base Salary through the Termination Date and (b) such stock options, restricted stock awards, and grants as shall have fully vested before the Termination Date.  In any such event, Executive shall be ineligible for and shall forfeit all rights with respect to options and grants that have not vested as of Executive’s the Termination Date. 

2.5.    Termination as a Result of Death.  If Executive dies during the Employment Term, the Company shall pay to Executive’s surviving spouse or such other person or estate as the Executive may from time to time designate by written notice to the Company, or such other person as may be required by law, the following amounts:  (a) any unpaid Base Salary or other compensation for services rendered through the date of death, and any unpaid expenses required to be reimbursed under this Agreement, and any earned but unpaid bonuses for any prior period; (b) stock options previously awarded to Executive that have vested as of the date of death in keeping with the governing Plans.  No awards or grants contemplated by this Agreement, but not yet awarded to Executive as of the time of his death shall be granted.

2.6.    Termination as a Result of Disability.  The Company may terminate Executive’s employment hereunder upon Executive becoming “Totally Disabled.”  For purposes of this Agreement, Executive shall be considered “Totally Disabled” if Executive has been physically or mentally incapacitated so as to render Executive incapable of performing the essential functions of Executive’s position with or without reasonable accommodation.  Executive’s receipt of disability benefits for total disability under the Company’s long-term disability plan or receipt of Social Security total disability benefits shall be deemed conclusive evidence of Total Disability for purposes of this Agreement. However, in the absence of Executive’s receipt of such long-term disability benefits or Social Security benefits, the Chief Executive Officer in good faith may determine that the Executive is disabled due to the needs of the business and the unacceptable unavailability of Executive which is expected to last for a continuous period of not less than six (6) months.  In the event of such disability, Executive will continue to receive his Base Salary for six (6) months or until benefits become payable to the Executive under the terms of the Company’s disability policy, whichever first occurs. 

2.7.    No Setoff.  The Company’s obligation to make payments provided for in this Agreement and otherwise to perform its obligations hereunder shall not be affected by any set-off, counterclaim, recoupment, defense or other claim, right, or action which Company may have against the Executive or others.  In no event shall the Executive be obligated to seek other employment or take any other action by way of mitigation of the amounts payable, or benefits to be provided to the Executive under any of the provisions of this Agreement, and such amounts shall not be reduced whether or not the Executive obtains or seeks to obtain other employment.  

2.8.    Coordination of Benefits.  In the event that the Employee is entitled to benefits following termination under any Change in Control Agreement with the Company, the Employee shall have the right to elect whether to receive such benefits under any such Change in Control Agreement or this Employment Agreement, but not both.

		
	3.
	Confidentiality

3.1    Executive’s Receipt of Confidential Information.  Executive acknowledges that in the course of his relationship with the Company and its related entities NDF, Newpark Mats and Integrated Services, Newpark Canada, and other affiliates (together with the Company, the “Company Parties”), he will receive, have access to, and have the opportunity to develop certain confidential or proprietary information and knowledge concerning the business of the Company Parties (“Confidential Information”), which the Company Parties desire to protect.  Confidential Information under this Agreement includes, by way of example and without limitation, information regarding the Company Parties’ customers, employees, contractors, operations, markets and industries not generally known to the public; strategies, methods, books, records, and documents; recipes, technical information concerning products, equipment, services, and processes; procurement procedures and pricing techniques; the names of and other information concerning customers and those being solicited to be customers, investors, and business relations (such as contact name, service provided, pricing for that customer, type and amount of product used, credit and financial data, and/or other information relating to the Company Parties’ relationship with that customer); pricing strategies and price curves; positions, plans, and strategies for expansion or acquisitions; budgets; trade secrets; programs; customer lists; research; financial and sales data; raw materials purchasing or trading methodologies and terms; evaluations, opinions, and interpretations of information and data; marketing and merchandising techniques; prospective customers’ names and locations; grids and maps; electronic databases; models; specifications; computer programs; internal business records; contracts benefiting or obligating the Company Parties; bids or proposals submitted to any third party; technologies and methods; training methods and training processes; organizational structure; personnel information, including salaries of personnel; labor or employee relations or agreements; payment amounts or rates paid to consultants or other service providers; and other such confidential or proprietary information.  Executive further acknowledges and agrees that the terms of this Agreement constitute Confidential Information, which Executive shall not disclose to anyone other than his spouse, attorney, accountant, or as may be required by the Company or by law.

3.2.    Value of Confidential Information.  Executive acknowledges and stipulates that the business of the Company Parties is highly competitive, cost and price sensitive, and in connection with his work and job for the Company Parties he has had and will continue to have access to and the opportunity to develop Confidential Information relating to the Company Parties’ businesses and their methods and operations.   Information need not qualify as a trade secret to be protected as Confidential Information under this Agreement, and the authorized and controlled disclosure of Confidential Information to authorized parties by Company Parties in the pursuit of their business will not cause the information to lose its protected status under this Agreement.  Executive acknowledges and stipulates that this Confidential Information constitutes a valuable, special, and unique asset used by the Company Parties in their businesses to obtain a competitive advantage over their competitors.  Executive further acknowledges that protection of such Confidential Information against unauthorized disclosure and use is of critical importance to the Company Parties in maintaining their competitive position and economic investment, as well as work for its employees.

3.3.    Executive’s Promise Not to Use or Disclose Confidential Information.  Executive agrees not to reveal the Confidential Information to anyone outside the Company Parties so long as the confidential or secret nature of the Confidential Information shall continue, other than such disclosure as authorized by the Company Parties or is made to a person transacting business with the Company Parties who has reasonable need for such Confidential Information.  Executive further agrees that he will at no time use the Confidential Information for or on behalf of any person other than any of the Company Parties for any purpose.  Executive further agrees to comply with the confidentiality and other provisions set forth in this Agreement, the terms of which are supplemental to any statutory or fiduciary or other obligations relating to these matters.  

3.4.    Return of Confidential Information and Property.   All written materials, customer or other lists or data bases, records, data, and other documents prepared or possessed by Executive in connection with Executive’s employment hereunder are the Company Parties’ property.  All information, ideas, concepts, improvements, discoveries, and inventions that are conceived, made, developed, or acquired by Executive individually or in conjunction with others during Executive’s employment with the Company (whether during business hours and whether on the Company’s premises or otherwise), which relate to the Company Parties’ business, products, or services are the Company Parties’ sole and exclusive property.  All memoranda, notes, records, files, correspondence, drawings, manuals, models, specifications, computer programs, maps, and all other documents, data, or materials of any type embodying such information, ideas, concepts, recipes, inventory, prices, improvements, discoveries, and inventions are the Company Parties’  property.  At the termination of Executive’s employment, regardless of the reason and whether by Executive or the Company, Executive will promptly return to the Company all papers, documents, writings, any computer related hardware or software, cell phone(s), keys, or other data or property belonging to the Company Parties that is produced by him and/or comes into his possession by or through his relationship with the Company Parties, including, without limitation, Confidential Information.  Included in the above is all such data that Executive had access to, over, or possessed during his employment with the Company.  The Company desires by this Agreement to protect its economic investment in its current and future operations and business.  shall surrender to the Company all papers, documents, writings and other property produced by him or coming into his possession by or through his relationship with the Company Parties and/or relating to Confidential Information and Executive agrees that all such materials will at all times remain the property of the Company Parties. 

3.5.    No Use of Other Confidential Information or Conflicting Obligations by Executive.  Executive promises that he will not use as part of his employment with the Company Parties, disclose to the Company Parties, bring on the Company Parties’ premises, or induce the Company Parties or any of their employees to intentionally or unintentionally use or disclose, any confidential or proprietary information or material belonging to Executive’s previous employer(s) or belonging to any other person.  Further, Executive represents that he is not a party to any other agreement, or under any other duty, which will interfere or conflict with Executive’s full compliance with this Agreement.  Executive will not enter into any agreement or undertake any other duty, whether written or oral, in conflict with the provisions of this Agreement.  Executive represents that his performance of this Agreement and his employment with the Company Parties does not and will not breach any agreement or other duty Executive has to keep in confidence proprietary information, knowledge or data acquired by Executive prior to his employment with the Company Parties, including any information belonging to Executive’s prior employer(s).

3.6.    Breach of this Section.  Executive understands and agrees that the restrictions in this Section 3 shall continue beyond the termination of Executive’s employment regardless of the reason for such termination.  Executive acknowledges that money damages may not be sufficient remedy for any breach of this Section 3 by Executive, and that the Company Parties shall be entitled to seek to enforce the provisions of this Section 3 by specific performance and injunctive relief as remedies for such breach or any threatened breach.  Such remedies shall not be deemed the exclusive remedies for a breach of this Section 3, but shall be in addition to all remedies available at law or in equity to the Company Parties, including the recovery of damages from Executive and his agents involved in such breach.  In the event that Executive fails in any material respect to perform any of his material obligations under this Section 3, the Company may elect (a) to cease any payments due under this Agreement and recover all payments made to Executive under this Agreement on or subsequent to the date of the failure, (b) obtain an injunction and/or (c) exercise any and all other remedies available by law.

		
	4.
	Additional Post-Employment Restrictions

4.1.    Consideration to Employee.  The restrictive covenants contained in this Section 4 are supported by consideration to Executive from the Company Parties as specified in this Agreement, including the consideration provided in Sections 1-3.  Executive acknowledges that the consideration provided for in Sections 1-3 of this Agreement constitute separate and independent consideration for the restrictive covenants contained in this Section 4 and entered into by Executive, and that the consideration in each such Section 1, 2 and 3 is reasonable and sufficient consideration for Employee’s promises in this Agreement.

4.2.    Non-Competition.  Executive agrees that for the twenty-four (24) month period immediately following the Termination Date (“Restricted Term”), Executive will not, directly or indirectly, for himself or for others, anywhere in the Restricted Area (as defined below), unless expressly authorized in writing by the Chief Executive Officer of the Company, engage in, or assist any person, entity, or business engaged in, the selling or providing of products or services that would displace the products or services that (a) the Company Parties sell, provide or plan to sell or provide as of the Termination Date or at any time during his employment, or (b) that Executive had involvement with or received or had access to Confidential Information about in the course of his employment with the Company.  The foregoing is expressly understood to include, without limitation, the business of manufacturing, selling and/or providing products or services of the same type offered and/or sold by the Company Parties as of the Termination Date or any time during Executive’s employment.  “Restricted Area” under this Agreement means the geographic areas listed in Appendix A attached hereto and incorporated by reference.  

4.3.    Prohibition on Circumvention. Executive cannot circumvent these covenants by alternative means or engage in any of the enumerated prohibited activities in the Restricted Area by means of telephone, telecommunications, satellite communications, correspondence, or other contact from outside the Restricted Area.  Executive further understands that the foregoing restrictions may limit his ability to engage in certain businesses during the Restricted Term, but acknowledge that these restrictions are necessary to protect the Confidential Information and business interests of the Company Parties.  

4.4.    Non-Solicitation of Customers.  During the Restricted Term, Executive shall not on his own behalf or on behalf of any other person, partnership, entity, association, or corporation, either directly or indirectly, within the Restricted Area, (a) call on, service, or solicit competing business from customers of the Company Parties with whom Executive had or made contact within the twenty-four (24) months immediately preceding the Termination Date, or (b) induce or encourage any such customer or other source of ongoing business to stop doing business with the Company Parties.

4.5.    Non-Solicitation of Employees.  During the Restricted Term, Executive shall not, on his own behalf or on behalf of any other person, partnership, entity, association, or corporation, either directly or indirectly, call on, solicit, or retain any employee or officer of the Company Parties, with whom Executive worked, had contact or associated, or about whom Executive received Confidential Information, within the course of Executive’s employment with the Company, or in any other manner attempt, directly or indirectly, to influence, encourage, or induce any  such employee or officer of the Company Parties to terminate or discontinue his or his employment with any of the Company Parties. 

4.6.    Reasonableness of Restrictions; Severability; Reformation.  Executive represents to the Company that the enforcement of the restrictions contained in this Agreement would not be unduly burdensome to Executive and acknowledges that Executive is willing and able, subject to the Restricted Area as defined herein, to compete in other geographical areas not prohibited by this Agreement.  It is expressly understood and agreed that the Company Parties and Executive consider the restrictions contained in this Section 4 to be reasonable and necessary for the purposes of preserving and protecting the Confidential Information and other legitimate business interests of the Company Parties.  Nevertheless, if any of the aforesaid restrictions is found by a court having jurisdiction to be unreasonable, overly broad as to geographic area or time or otherwise unenforceable, the Parties intend for the restrictions therein set forth to be modified by such court so as to be reasonable and enforceable and, as so modified by the court, to be fully enforced.  Executive and the Company further agree that the covenants in Section 4 shall each be construed as a separate agreement independent of any other provisions of this Agreement, and the existence of any claim or cause of action by Executive against the Company, whether predicated on this Agreement or otherwise, shall not constitute a defense to the enforcement by the Company of any of the covenants of Section 4. 

4.7.    Remedies for Breach.  Executive agrees that a breach or violation of Section 4 of this Agreement by Executive shall entitle the Company Parties as a matter of right, to an injunction, issued by any court of competent jurisdiction, restraining any further or continued breach or violation of such provisions.  Such right to an injunction shall be cumulative and in addition, and not in lieu of, any other remedies to which the Company Parties may show themselves justly entitled, including, but not limited to, specific performance and damages.  The Parties specifically agree that the remedy of damages alone is inadequate.  In the event that Executive fails in any material respect to perform any of his material obligations under this Section 4, the Company may elect (a) to cease any payments due under this Agreement and recover all payments made to Executive under this Agreement on or subsequent to the date of the failure, (b) obtain an injunction and/or (c) exercise any and all other remedies available by law.

4.8.    Advance Approval of Board.  It is agreed that these covenants do not prevent Executive from using and offering the general management or other skills that he possessed prior to receiving access to Confidential Information and other legitimate business interests of the Company Parties.  This Agreement creates an advance approval process, and nothing herein is intended, or will be construed as, a general restriction against Executive’s pursuit of lawful employment in violation of any controlling state or federal laws.  Executive is permitted to engage in activities that would otherwise be prohibited by this covenant if such activities are determined in the sole discretion of the Board of the Company, and authorized in writing, to be of no material threat to the legitimate business interests of the Company.

		
	5.
	Dispute Resolution

5.1.    Informal Resolution.  In the event of a dispute arising from or relating to this Agreement, including the interpretation or application of this Agreement, or Executive’s employment with the Company (other than a claim arising under or relating to Sections 3 and 4 of this Agreement, which are specifically excluded from the scope of this Section 5.1), prior to seeking arbitration as provided for below, the Party claiming to be aggrieved shall first advise the other Party, in writing, of the specifics of the claim, including the specific provision of this Agreement alleged to have been violated, if applicable, as well as provide the other Party with any supporting documentation the Party desires to produce at that time.  If the Company is disputing amounts that Executive contends are due to him, the Company shall provide a complete statement of the amount it is disputing, the reason it is disputing it, and supporting documentation upon request by Executive.  The Parties will thereafter meet and attempt to resolve their differences in a period not to exceed thirty (30) days, unless the Parties agree in writing to mutually extend the time for one additional thirty (30) day period.  Following such attempts to resolve any such dispute, either Party may require arbitration of the other.  

5.2.    Mandatory Arbitration.  The Parties mutually agree that any and all disputes arising from or relating to this Agreement, including the interpretation or application of this Agreement, or Executive’s employment with the Company, which the Parties are unable to resolve as provided for above, if applicable, will be submitted exclusively to final and binding arbitration pursuant to the Federal Arbitration Act.  The arbitration will be conducted in the city where the Company’s headquarters are then located or such other location as the Parties may agree, by a single arbitrator in accordance with the substantive laws of the State of Texas to the extent not preempted by the Employee Retirement Income Security Act, which shall govern all applicable benefits issues, in keeping with the above required procedure.  If the Parties cannot agree upon an arbitrator, then each Party shall choose its own independent representative, and those independent representatives shall choose the single arbitrator within thirty (30) days of the date of the selection of the first independent representative.  The legal expenses of each Party shall be borne by them respectively.  However, the cost and expenses of the arbitrator in any such action shall be borne equally by the Parties.  The arbitrator’s decision, judgment, and award shall be final, binding and conclusive upon the Parties and may be entered in the highest court, state or federal, having jurisdiction.  The arbitrator to which any such dispute shall be submitted in accordance with the provision of this Section 5.2 shall only have jurisdiction and authority to interpret, apply, or determine compliance with the provisions of this Agreement, but shall not have jurisdiction or authority to add to, subtract from, or alter in any way the provisions of this Agreement.  The Parties understand that their mutual obligations to arbitrate under this Section 5.2 survive any termination of this Agreement.  

5.3.    Temporary Relief.  Notwithstanding any other provision hereof, to preserve the status quo or return the Parties to their positions as they existed prior to any alleged improper conduct, any Party may seek temporary relief, i.e., temporary restraining orders and preliminary injunctions, from a court of competent jurisdiction over the Parties, and such court may issue such relief, if the requirements under applicable law are met. 

6.Miscellaneous Provisions. 

6.1.    Headings.   Section and other headings contained in this Agreement are for reference only and shall not affect in any way the meaning or interpretation of this Agreement. 

6.2.    Notices.   Any notice, communication, request, reply or advice (here severally and collectively called “Notice”) required or permitted to be given under this Agreement must be in writing and is effectively given by deposit in the same in the United States mail, postage pre-paid and registered or certified with return receipt requested, by national commercial courier for next day delivery, or by delivering in person the same to the address of the person or entity to be notified.  Notice deposited in the mail in the manner herein above described shall be effective 48 hours after such deposit, Notice sent by national commercial courier for next day delivery shall be effective on the date delivered, and Notice delivered in person shall be effective at the time of delivery.  For purposes of Notice, the address of the Parties shall, until changed as hereinafter provided, be as follows: 
	
			
	  
	(a) 
	If to the Company : 

	  
	  
	  

	  
	  
	Newpark Resources, Inc. 

	  
	  
	9320 Lakeside Boulevard, Suite 100  

	  
	  
	The Woodlands, Texas 77381 

	  
	  
	Attention: Chief Executive Officer 

or at such address as the Company may have advised Executive in writing; and
	
			
	  
	(b) 
	If to Executive: 

Bruce Campbell Smith 
5918 Rose Bush Tr
Katy, TX 77494

or at such other address as Executive may have advised the Company in writing. 

6.3.    Waiver.  The failure by any Party to enforce any of its rights under this Agreement shall not be deemed to be a waiver of such rights, unless such waiver is an express written waiver which has been signed by the waiving Party.  Waiver of any one breach shall not be deemed to be a waiver of and other breach of the same or any other provision of this Agreement. 

6.4.    Choice of Law.  The validity of the Agreement, the construction of its terms, and the determination of the rights and duties of the Parties hereto shall be governed by and construed in accordance with the laws of the State of Texas without regard to choice of law principles. 

6.5.    Invalidity of Provisions.  If any provision of this Agreement is adjudicated to be invalid, illegal or unenforceable under applicable law, the validity or enforceability of the remaining provisions shall be unaffected.  To the extent that any provision of this Agreement is adjudicated to be invalid, illegal or unenforceable because it is overbroad, that provision shall not be void but rather shall be limited only to the extent required by applicable law and enforced as so limited. 

6.6.    Entire Agreement; Written Modifications.   This Agreement, together with Appendix A, contains the entire agreement between the Parties and supersedes all prior or contemporaneous representations, promises, understandings, and agreements between Executive and the Company, including, without limitation, the Prior Employment Agreement.  Notwithstanding the foregoing, this Agreement supplements and does not limit or restrict or alter in any way any confidentiality, non-competition, or non-solicitation obligations that Executive may have undertaken in other agreements with the Company or NDF, including, without limitation, the Prior Employment Agreement, or which apply to Executive under any applicable law. 

6.7.    Successors; Assignment.  Executive acknowledges and agrees that this Agreement shall be binding upon and inure to the benefit of the Company and any other person, association, or entity which may hereafter acquire or succeed to all or substantially all of the business or assets of the Company by any means whether direct or indirect, by purchase, merger, consolidation, or otherwise.  The Company may assign, and Executive expressly consents to the assignment of, this Agreement to any person, 

including, without limitation, any successor, parent, subsidiary, or affiliated entity of the Company, including in connection with any sale or merger (whether a sale or merger of stock or assets or otherwise) of the Company or the business of the Company.  Executive acknowledges that his obligations under this Agreement are personal to Executive and may not be assigned by him without prior written consent from the Company.

6.8.    Attorney’s Fees.  The prevailing Party in any action brought to enforce this Agreement shall be entitled, in addition to such other relief that may be granted, to a reasonable sum for attorney’s fees and costs incurred by such Party in enforcing or defending against an action to enforce this Agreement. 

6.9.    Non-Disparagement. Subject to Section 6.10 below, Executive agrees for himself, and all others acting on his behalf, either directly or indirectly, not to make, support, encourage, induce or voluntarily participate in any oral or written statements about the Company, the Company Parties, or any of such entities’ officers, employees, shareholders, investors, directors, agents or representatives, that are malicious, obscene, threatening, harassing, intimidating or discriminatory and which are designed to harm any of the foregoing; except as required by law, when testifying truthfully pursuant to subpoena or other legal process, or when communicating with law enforcement or government agencies. 

6.10.    Protected Disclosures.  Despite any of the obligations stated in this Agreement, including the restrictions found in Section 3 and Section 6.9, neither this Agreement nor any other agreement or policy of the Company shall prevent Executive from providing information to any governmental agency, or from participating in any investigation or proceeding conducted by any governmental agency or using the Company’s internal reporting procedures.  This Agreement does not impose any condition precedent (such as prior notice to the Company) any penalty, or any other restriction or limitation adversely affecting Executive’s rights regarding any governmental agency disclosure, report, claim or investigation.  As provided by the Defend Trade Secrets Act, 28 U.S.C. §1833(b) (the “DTSA”), Executive shall not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that is made (a) in confidence to a federal, state, or local government official or to an attorney solely for the purpose of reporting or investigating a suspected violation of law, or (b) in a complaint or other document filed in a lawsuit or other proceeding, provided such filing is made under seal.  In the event Executive files a lawsuit for retaliation by the Company for reporting a suspected violation of law, Executive may disclose the trade secret to Executive’s attorney and use the trade secret information in the court proceeding, provided Executive files any document containing the trade secret under seal and does not disclose the trade secret, except pursuant to court order.

6.11.    Definitions.  In this Agreement: 
		
	(a)
	“Cause” shall mean any of the following: 

		
	(i)
	Executive’s conviction by a court of competent jurisdiction of, or entry of a plea of guilty or nolo contendere for an act on the Executive’s part constituting a felony; or

		
	(ii)
	dishonesty, willful misconduct or gross neglect by Executive of his obligations under this Agreement that results in material injury to the Company;

		
	(iii)
	appropriation (or an overt act attempting appropriation) by Executive of a material business opportunity of the Company;

		
	(iv)
	theft, embezzlement or other similar misappropriation of funds or property of the Company by Executive; or

		
	(v)
	the failure of Executive to follow the reasonable and lawful written instructions or policy of the Company with respect to the services to be rendered and the manner of rendering such services by Executive provided Executive has been given reasonable and specific written notice of such failure and opportunity to cure and no cure has been effected or initiated within a reasonable time, but not less than 90 days, after such notice.

		
	(b)
	“Good Reason” means any of the following: 

		
	(i)
	the Company adversely changes Executive’s title or changes in any material respect the responsibilities, authority or status of Executive without prior notice and acceptance;

		
	(ii)
	the substantial or material failure of the Company to comply with its obligations under this Agreement or any other agreement that may be in effect that is not remedied within a reasonable time after specific written notice thereof by Executive to the Company;

		
	(iii)
	the material diminution of the Executive’s base salary or bonus opportunity without prior notice and acceptance;

		
	(iv)
	the failure of the Company to obtain the assumption of this Agreement by any successor or assignee of the Company;

		
	(v)
	Requiring Executive to relocate more than 50 miles from The Woodlands, Texas; or

		
	(vi)
	provided that in any of the above situations, Executive has given reasonable and specific written notice to the Chief Executive Officer of such failure within thirty (30) days after the event occurs, the Company fails to correct the event within thirty (30) days after receipt of such notice and Executive must resign his employment within thirty (30) days after the Company does not cure such event.

6.12.    Section 409A.
(a)    If Executive is a “key employee,” as defined in Section 416(i) of the Code (without regard to paragraph 5 thereof), except to the extent permitted under Section 409A of the Code, no benefit or payment that is subject to Section 409A of the Code (after taking into account all applicable exceptions to Section 409A of the Code, including but not limited to the exceptions for short-term deferrals and for “separation pay only upon an involuntary separation from service”) shall be made under this Agreement on account of the Executive’s “separation from service” as defined in Section 409A of the Code, with the Company until the later of the date prescribed for payment in this Agreement and the first day of the seventh calendar month that begins after the date of the Executive’s separation from service (or, if earlier, the date of death of the Executive).  
(b)    For purposes of Section 409A of the Code (including, but not limited to, application of the exceptions for short-term deferrals and for “separation pay only upon involuntary separation from service”), each payment provided for under this Agreement is hereby designated as a separate payment, rather than a part of a larger single payment or one of a series of payments.
(c)    Any amount that Executive is entitled to be reimbursed under this Agreement will be reimbursed to Executive as promptly as practicable and in any event not later than the last day of the calendar year after the calendar year in which the expenses to be reimbursed are incurred, and the amount of the expenses eligible for reimbursement during any calendar year.  In addition, any such reimbursement payments described in this Section shall not be subject to liquidation or exchange for any other payment or benefit.
(d)    In the event that Executive is required to execute a release to receive any payments from the Company that constitute nonqualified deferred compensation under Section 409A of the Code, payment of such amounts shall not commence until the sixtieth (60th) day following Executive’s separation from service with the Company.  Any installment payments suspended during such sixty (60) day period shall be paid as a single lump sum payment on the first payroll date following the end of such suspension period.
6.13.    Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original, but all of which together will constitute one and the same Agreement.

Executed as of the date first written above. 
	
						
	 
	Signed:
	/s/ Bruce Smith
	 
	Signed:
	/s/ Paul L. Howes

	 
	 
	Bruce Smith (Executive)
	 
	 
	Paul L. Howes

	 
	 
	 
	 
	 
	President & CEO

	 
	 
	 
	 
	 
	Newpark Resources, Inc.

	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 

	 
	Witness:
	/s/ Ida Ashley
	 
	Witness:
	/s/ Mark Airola

	 
	 
	Ida Ashley
	 
	 
	Mark Airola

 

APPENDIX A (“Restricted Area”)

Areas in which Newpark Resources, Inc. currently does business: 
	
				
	1. 
	Alabama
	26.
	Montana

	2. 
	Alaska
	27.
	Nebraska

	3. 
	Arizona 
	28. 
	Nevada

	4.
	Arkansas
	29.
	New Hampshire

	5.
	California
	30.
	New Jersey

	6. 
	Colorado 
	31. 
	New Mexico

	7. 
	Connecticut
	32. 
	New York

	8.
	Delaware
	33.
	North Carolina

	9.
	Florida
	34.
	North Dakota

	10.
	Georgia
	35.
	Ohio

	11.
	Hawaii
	36.
	Oklahoma

	12.
	Idaho
	37.
	Oregon

	13.
	Illinois
	38.
	Pennsylvania

	14.
	Indiana
	39.
	Rhode Island

	15.
	Iowa
	40.
	South Carolina

	16.
	Kansas
	41.
	South Dakota

	17.
	Kentucky
	42.
	Tennessee

	18.
	Louisiana
	43.
	Texas

	19.
	Maine
	44.
	Utah

	20.
	Maryland
	45.
	Vermont

	21.
	Massachusetts
	46.
	Virginia

	22.
	Michigan
	47.
	Washington

	23.
	Minnesota
	48.
	West Virginia

	24.
	Mississippi
	49.
	Wisconsin

	25.
	Missouri
	50.
	Wyoming

Other states or areas in which Newpark Resources, Inc currently does business: 
	
											
	1. 
	Western Canada 

	2. 
	Gulf of Mexico (off the “ Gulf Coast ”)Exhibit

Exhibit 10.1

LOAN AGREEMENT
Dated as of June 29, 2017

among

Double Canyon Vineyards, LLC, a Delaware limited liability company, 
and 
A Fine Old Building, LLC, a Washington limited liability company,
Individually and collectively, as borrower

and 

American AgCredit, FLCA, 
as lender

$10,000,000 Term Loan

This Loan Agreement (this “Agreement”), dated as of June 29, 2017, is entered into by and between by Double Canyon Vineyards, LLC, a Delaware limited liability company, and A Fine Old Building, LLC, a Washington limited liability company (individually and collectively, as the context may require, “Borrower”) and American AgCredit, FLCA (“Lender”) with reference to the following:

RECITALS
A.    Borrower has requested that Lender provide Borrower with a term loan in the original principal amount of Ten Million Dollars ($10,000,000).
B.    Lender is willing to provide Borrower with such loan on the terms and conditions set forth herein.
Now, therefore, in consideration of the premises and the mutual covenants herein contained the parties hereby agree as follows:
		
	Section 1.
	THE LOAN.

1.1    Advance of the Loan. On the Closing Date, Lender will make a loan to Borrower (the “Loan”) in the principal amount of Ten Million Dollars ($10,000,000)).  Borrower’s obligations with respect to the Loan will be evidenced by a Term Loan Promissory Note dated on or about the date hereof in the principal amount of the Loan (the “Note”), by this Agreement, and by the other Loan Documents.  No amount of the Loan that is repaid or prepaid may be reborrowed hereunder. 
		
	Section 2.
	TERMS OF THE LOAN.

2.1    Maturity Date.  The maturity date (the “Maturity Date”) for the Loan and the Note shall be July 1, 2037.
2.2    Interest Rate.  
(a)    Fixed Interest Rate.   The Loan shall bear interest at a fixed rate per annum of Five and 39/100 percent (5.39%), subject to increase to the Default Rate as set forth in Section 2.4.  
(b)    Computation of Interest.  All computations of interest hereunder shall be made by Lender on the basis of a three hundred sixty (360) day year, in each case based upon a thirty (30) day month. Each determination by Lender of an interest rate hereunder shall be conclusive and binding for all purposes, absent manifest error or bad faith.
(c)    Interest Rate Not to Exceed Maximum Lawful Rate.  Notwithstanding anything to the contrary set forth in this Agreement, if at any time until payment in full of all of the Obligations, the rate of interest payable hereunder exceeds the highest rate of interest permissible under any law which a court of competent jurisdiction shall, in a final determination, deem applicable hereto (the “Maximum Lawful Rate”), then in such event and so long as the Maximum Lawful Rate would be so exceeded, the rate of interest payable hereunder shall be equal to the Maximum Lawful Rate; provided, that if at any time thereafter the rate of interest payable hereunder is less than the Maximum 

Lawful Rate, Borrower shall continue to pay interest hereunder at the Maximum Lawful Rate until such time as the total interest received by Lender hereunder, is equal to the total interest which Lender would have received had the interest rate payable hereunder been (but for the operation of this Section 2.2(c)) the interest rate payable since the Closing Date. Thereafter, the interest rate payable hereunder shall be the rate of interest set forth herein, unless and until the rate of interest again exceeds the Maximum Lawful Rate, in which event this paragraph shall again apply. In no event shall the total interest received by Lender pursuant to the terms hereof exceed the amount which Lender could lawfully have received had the interest due hereunder been calculated for the full term hereof at the Maximum Lawful Rate. In the event the Maximum Lawful Rate is calculated pursuant to this Section 2.2(c), such interest shall be calculated at a daily rate equal to the Maximum Lawful Rate divided by the number of days in the year in which such calculation is made. In the event that a court of competent jurisdiction, notwithstanding the provisions of this Section 2.2(c), shall make a final determination that Lender has received interest hereunder or under any of the Loan Documents in excess of the Maximum Lawful Rate, Lender shall to the extent permitted by applicable law, promptly apply such excess first to any interest due and not yet paid on the Loan, then to the outstanding principal of the Loan (without premium or penalty), and then to Fees and any other unpaid Obligations and thereafter shall refund any excess to Borrower or as a court of competent jurisdiction may otherwise order.
2.3    Payments.
(a)    General.  Any payment to be made by Borrower under this Agreement shall be made not later than 12:00 p.m., Pacific Time, on the date of payment to the bank accounts designated by Lender for the making of payments hereunder and shall be made by wire transfer of immediately available funds to such designated bank account, marked for attention as indicated, or in any other manner or any other place as may be directed, in writing, by Lender.  All payments to be made to or for the account of Lender under this Agreement shall be made without setoff or counterclaim, and clear of and without deduction for any taxes or amounts in consequence of taxes, including any stamp, registration or other like taxes payable on or in respect of the, and of any levies, imposts, duties, charges, fees, deductions, withholdings, restrictions and conditions of any nature now or hereafter imposed by any governmental agency unless Borrower is compelled by law to deduct or withhold any such taxes, levies, imposts, duties, charges, fees or deductions in respect of Lender.  If Borrower is so compelled, Borrower will, concurrently with any such payment hereunder, pay the necessary amount to enable Lender to receive a net amount equal to the full amount which Lender would have received had no such deduction been made.
(b)    Payment of Principal and Interest. On the first day of each January, April, July, and October, commencing October 1, 2017, Borrower shall pay to Lender a principal payment in the amount of One Hundred Twenty Five Thousand Dollars ($125,000) and an interest payment equal to the amount of all interest accrued through the previous day.
(c)    Payment on Maturity Date.  A final payment of all unpaid principal, interest and any other charges with respect to the Loan shall be due and payable, without demand, on the Maturity Date.

2.4    Default Rate. Any overdue principal of or interest with respect to the Loan, and the amount of any fees, costs, or expenses that Borrower is obligated to pay to Lender under this Agreement or any Loan Document not paid when due, shall bear interest, payable on demand, for each day from such due date until paid at a rate per annum equal to the Default Rate. In addition, upon and after the occurrence of an Event of Default and continuing until such Event of Default has been cured or waived in writing by Lender in accordance with the terms of this Agreement, interest shall accrue on all Obligations at the Default Rate. The interest rate increase to the Default Rate shall take effect immediately upon the occurrence of an Event of Default, without prior notice to Borrower. 
2.5    Prepayments; Prepayment Premium.
(a)    Prepayment in Full.  Borrower shall have the right at any time to voluntarily prepay the entire amount of the outstanding Loan and to terminate this Agreement upon at least thirty (30) days prior written notice to Lender; provided that if Borrower shall prepay the Loan prior to the Open Prepayment Date, prepayment shall be accompanied by the applicable Prepayment Premium calculated in accordance with Section 2.5(c).  Prepayment in full shall be accompanied by the payment of all accrued and unpaid interest and all Fees and other remaining Obligations.  
(b)    Prepayment in Part.  Borrower shall have the right at any time to voluntarily prepay the Loan in part in increments of One Million Dollars ($1,000,000) after at least thirty (30) days prior written notice to Lender; provided that if any such prepayment is made prior to the Open Prepayment Date, prepayment shall be accompanied by the applicable Prepayment Premium calculated in accordance with Section 2.5(c).  A partial prepayment shall be accompanied by the payment of all accrued and unpaid interest on the amount being prepaid.  Partial prepayments shall be applied to the most remote installment and shall not reduce the amount of ongoing installment payments. 
(c)    Prepayment Premium.  If all or any portion of the Loan is prepaid prior to the Open Prepayment Date, Borrower shall pay to Lender a prepayment premium as set forth in this Section 2.5(c) (“Prepayment Premium”) for the benefit of Lender and any financial institution that has purchased a participation interest in the Loan (“Participant”).   Lender shall not be obligated to accept any such prepayment unless the Prepayment Premium is paid concurrently with such prepayment.  The amount of the Prepayment Premium shall be a “make-whole” amount calculated by Lender using any reasonable methodology chosen by Lender.  Lender shall notify Borrower of the amount and basis of determination of the Prepayment Premium and Lender’s determination shall be conclusive, absent manifest error.  
(d)    Acknowledgements.  Borrower acknowledges that the Prepayment Premium is not a penalty, does not constitute damages for Borrower’s breach of this Agreement, and does not constitute payment of unmatured interest.  Instead, it is a fee payable by Borrower to Lender if any portion of the Loan is repaid prior to the Open Prepayment Date.  Borrower acknowledges that Lender makes available to its borrowers a variety of interest rate options.  Some of those options include prepayment premiums and some do not.  Those options that included a prepayment premium were available at a lower cost than those options that did not.  Borrower selected an interest rate option that included a prepayment premium and as a result obtained a lower rate of interest than 

would otherwise have been available.  Borrower acknowledges that the Prepayment Premium is a reasonable fee and charge of Lender and reflects a fair and reasonable return to Lender for the consideration advanced to Borrower.
2.6    Fees.  Borrower shall pay to Lender such fees as may be set forth in a separate fee letter to be executed and delivered by Borrower and Lender (the “Fee Letter”).  All fees paid hereunder shall be considered fully earned upon receipt by Lender and no portion thereof shall be refundable under any circumstances.
2.7    Farm Credit Stock.  So long as any Obligations remains outstanding under the terms of this Agreement, Borrower shall maintain its ownership of One Thousand Dollars ($1,000) of stock in American AgCredit, ACA or such other amount thereof as may be required by Lender in accordance with Lender’s bylaws and other governing documents and regulations.
2.8    Taxes.  Any and all payments by Borrower hereunder shall be made, in accordance with this Section 2.8, free and clear of and without deduction for any and all present or future taxes, levies, imposts, deductions, charges, or withholdings, and all liabilities with respect thereto, excluding taxes imposed on or measured by the net income of Lender (all such non-excluded taxes, levies, imposts, deductions, charges, withholdings and liabilities being hereinafter referred to as “Taxes”). If Borrower shall be required by law to deduct any Taxes from or in respect of any sum payable hereunder to Lender, (a) the sum payable shall be increased as may be necessary so that after making all required deductions (including deductions applicable to additional sums payable under this Section 2.8) Lender receives an amount equal to the sum it would have received had no such deductions been made, (b) Borrower shall make such deductions, and (c) Borrower shall pay the full amount deducted to the relevant taxing or other authority in accordance with applicable law. In addition, Borrower agrees to pay any present or future stamp or documentary taxes or any other sales, transfer, excise, mortgage recording, or property taxes, charges or similar levies that arise from any payment made hereunder or from the execution, sale, transfer, delivery or registration of, or otherwise with respect to, this Agreement any Loan Document and any other agreements and instruments contemplated thereby (hereinafter referred to as “Other Taxes”). Borrower shall indemnify  Lender for the full amount of Taxes or Other Taxes (including any Taxes or Other Taxes imposed by any jurisdiction on amounts payable under this Section 2.8) paid by Lender and any liability (including penalties, interest and expenses arising therefrom or with respect thereto), whether or not such Taxes or Other Taxes were correctly or legally asserted. This indemnification shall be made within thirty (30) days from the date Lender makes written demand therefor. Within thirty (30) days after the date of any payment of Taxes, Borrower shall furnish to Lender the original or a certified copy of a receipt evidencing payment thereof. Without prejudice to the survival of any other agreement of Borrower hereunder, the agreements and obligations of Borrower contained in this Section 2.8 shall survive the payment in full of all Obligations.
2.9    Capital Adequacy.  Borrower shall pay to Lender from time to time on written request such amounts as Lender may reasonably determine to be necessary to compensate Lender for any increased costs to Lender that it reasonably determines are attributable to any law or regulation, or any interpretation, directive, or request (whether or not having the force of law and whether or not failure to comply therewith would be unlawful) of any court or governmental or 

monetary authority (a) following any Regulatory Change or (b) implementing after the Closing Date any risk-based capital guideline or other capital requirement heretofore or hereafter issued by any governmental authority (such compensation to include an amount equal to any reduction of the rate of return on assets or equity of Lender to a level below that which Lender could have achieved but for such law, regulation, interpretation, directive or request); provided that with respect to this Section 2.9,  Lender shall treat Borrower as Lender generally treats its other similarly situated borrowers. Lender will furnish to Borrower a certificate setting forth the basis and amount of each request by Lender for compensation under this Section 2.9. Determinations and allocations by Lender for purposes of this Section 2.9 of the effect of any Regulatory Change pursuant to or of capital maintained pursuant to this Section 2.9, on its costs or rate of return with respect to the Loan, and of the amounts required to compensate Lender under this Section 2.9, shall be conclusive absent manifest error or bad faith.  As used in this Section 2.9, “Regulatory Change” means any change after the Closing Date in federal, state, or foreign law or regulations (including Regulation D) or the adoption or making after such date of any interpretation, directive or request applying to a class of lenders including Lender of or under any Federal, state, or foreign law or regulations (whether or not having the force of law and whether or not failure to comply therewith would be unlawful) by any court or governmental or monetary authority charged with the interpretation or administration thereof. 
2.10    Use of Proceeds.  The proceeds of the Loan will be used by Borrower for Borrower’s working capital needs and other corporate purposes not prohibited by this Agreement.
2.11    Records of Lender.  Lender will maintain a record in which appropriate entries will be made from time to time showing the original principal thereof, the unpaid balance thereof, the interest rate thereon, the interest accrued thereon and payments in respect of principal, interest and fees.  The entries made by Lender in such record shall, absent manifest error or bad faith, constitute prima facie evidence of Borrower’s obligations hereunder and thereunder and payment of principal, interest and fees.  Notwithstanding the foregoing, the failure by Lender to make such entries shall not affect the rights of Lender or the obligations of Borrower hereunder or thereunder.
2.12    Security for Notes.  All Obligations shall be secured by one or more of a Deed of Trust, Security Agreement, Assignment of Rents and Leases, and Fixture Filing (collectively, as the same may be amended, restated, supplemented or otherwise modified from time to time, the “Deed of Trust”) in a form approved by Lender covering certain real and personal property in which Borrower has an interest, (any land subject to Deed of Trust being the “Mortgaged Land” and the Mortgaged Land, together with all personal property covered by the Deed of Trust being the “Collateral”).  Borrower shall also execute and deliver, or cause to be executed and delivered, such other agreements, instruments, financing statements and documents as are deemed necessary by Lender in order to perfect any security for any of the Obligations or otherwise effectuate the purpose of this Section 2.12. 
2.13    Release of Land.  As of the Closing Date, the Mortgaged Land includes 57.2 acres of land improved with an apple orchard (the “Orchard”).  Lender agrees to release the Orchard from the lien of the applicable Deed of Trust in connection with a sale of the Orchard by Borrower to a Person that is not an affiliate of Borrower upon satisfaction of the following conditions precedent: 

(a)    Borrower shall have delivered written notice to Lender requesting the release of the Orchard, which notice shall be accompanied by a copy of the purchase agreement pursuant to which the Orchard is to be sold and shall include a certification that, as of the date of such notice, no Event of Default or Unmatured Event of Default is in existence nor, as far as Borrower can reasonably foresee, will result from the release of the Orchard from the Mortgaged Land; 
(b)    Borrower shall have obtained such approvals as are required to convey the Orchard as a separate legal lot and furnished copies of such approvals to Lender; 
(c)    No Event of Default or Unmatured Event of Default shall have occurred and be continuing as of the date the Orchard is released nor shall result from such release; 
(d)    Lender shall have determined that, following the release of the Orchard, the value of the remaining Mortgaged Land will equal or exceed $15,500,000; and
(e)    Borrower shall have reimbursed Lender for its costs and expenses (including reasonable attorney’s fees) incurred in connection with such release.  
Upon the release of the Orchard pursuant to this Section 2.13, such property shall no longer be considered Mortgaged Land hereunder.  
 
		
	Section 3.
	CONDITIONS PRECEDENT.

3.1    Conditions Precedent to Closing Date.  Lender’s obligation to make the Loan at the Closing Date shall be subject to the following conditions precedent, which conditions shall be satisfied on or before the Closing Date:
(a)    Proceedings Satisfactory.  All proceedings in connection with making of the Loan and entry into the Loan Documents shall be satisfactory to Lender and its counsel.  Lender shall have received copies of such certificates, instruments, documents and other papers as Lender may reasonably request in connection therewith, all in form and substance reasonably satisfactory to Lender and its counsel.
(b)    Title to Properties.  Except as set forth on Lender’s title insurance policy, the entities comprising Borrower, taken collectively, shall hold fee simple title to all of the Mortgaged Land and all improvements and fixtures thereon.
(c)    Representations and Warranties True.  Each of the representations and warranties contained in this Agreement, the Deeds of Trust and the other Loan Documents shall be true on and as of the Closing Date.
(d)    No Event of Default, etc.  No Event of Default or Unmatured Event of Default shall have occurred and be continuing.
(e)    No Material Adverse Change.  No event shall have occurred or condition shall exist involving, or which could reasonably be expected to result in, a Material Adverse Change.

(f)    Documents.  Lender shall have received all documents specified in a closing checklist to be delivered by Lender to Borrower, including the following, all of which shall be satisfactory to Lender:
(1)    The Note.  The Note.
(2)    Farm Credit Stock.  Evidence that Borrower has purchased $1,000 of stock in American AgCredit, ACA.
(3)    Certificate of Corporate Action.  A certificate of the Secretary of each Borrower or other equivalent representative acceptable to Lender, dated the Closing Date, certifying the formation documents of each Borrower and all legal action taken by such Borrower authorizing the execution, delivery and performance of this Agreement, the Note, the Deeds of Trust, and the other documents contemplated hereby to which such Borrower is a party and certifying the names and true signatures of the officers or other representatives of such Borrower authorized to execute the Loan Documents and having good standing certificates attached thereto.
(4)    UCC Search.  The results of a UCC search with respect to each Borrower with the appropriate governmental office showing the financing statement in favor of Lender of record.
(5)    Evidence of Consents and Approvals.  Evidence satisfactory to Lender of each Borrower having obtained all orders, consents, approvals and other authorizations, and having made all filings and other notifications (governmental or otherwise), required in connection with the transactions contemplated.
(6)    Guaranty.  The Guaranty from Guarantor pursuant to which Guarantor guarantees to Lender the payment of all obligations of Borrower to Lender.
(g)    Recordings, Filings and Priority.  The Deed of Trust shall have been duly executed by each Borrower and notarized, and all recordings and filings of or with respect to each Deed of Trust shall have been duly made and all financing statements and other instruments relating thereto shall have been duly executed, delivered and recorded or filed, in all such places as may be required by law, or as may be deemed necessary or desirable by counsel for Lender, in order to establish, protect and perfect as of the Closing Date the interests and rights (and the priority thereof) created or intended to be created thereby.  The lien of the Deed of Trust shall constitute a first mortgage Lien of record on the Mortgaged Land and a first security interest of record in all other Collateral, subject only to such Permitted Liens as Lender shall approve.
(h)    Title Insurance.  Lender shall have received a title insurance policy with respect to the Mortgaged Land, issued by a title insurance company or companies satisfactory to Lender, and containing affirmative coverages and agreements, satisfactory in form and substance to Lender and its counsel, insuring an amount at least equal to the amount of the Loan and insuring Lender, as beneficiary under the Deed of Trust, as the holder of a valid first mortgage Lien of record on such Mortgaged Land subject only to such Permitted Liens as are approved by Lender in writing, and containing affirmative coverage as to claims and liens of mechanics and materialmen and such other 

affirmative endorsements and coverages as Lender may request, all satisfactory in substance and form to Lender and its counsel. 
(i)    Environmental Reports and Matters.  If requested, Lender shall have received a Level I, Phase I environmental report relating to the Mortgaged Land, and such additional environmental reports as Lender shall have requested, in form and substance satisfactory to Lender and prepared by a consultant satisfactory to Lender.    
(j)    Compliance with Laws.  Lender shall have had made available to it such evidence as may be requested by it and satisfactory to it that the Mortgaged Land is in material compliance with all applicable laws, rules and regulations.
(k)    Permits, etc.  Lender shall have had made available to it true and correct copies of all permits, licenses or certificates as may be requested by it and are applicable to the Mortgaged Land, and all such documents shall be in form and substance satisfactory to Lender.
(l)    Appraisals.  Lender shall have received appraisals of the Mortgaged Land in form and substance satisfactory to Lender and prepared by an appraiser satisfactory to Lender, which appraisals conclude that the Mortgaged Land has an aggregate “as is” appraised value reasonably acceptable to Lender.  
		
	Section 4.
	REPRESENTATIONS AND WARRANTIES OF BORROWER.

In order to induce Lender to enter into this Agreement, each Borrower represents and warrants as of the date hereof that, except as set forth in the Disclosure Statement with a specific reference to the section affected thereby:
4.1    Due Organization.  Borrower is a duly organized and validly existing limited liability company under laws of the jurisdiction of its formation, is in good standing under the laws of such state of and is duly qualified to conduct business in all jurisdictions where the portion of the Mortgaged Land owned by such Borrower is located and where such Borrower’s failure to do so could reasonably be expected to result in a Material Adverse Change.
4.2    Requisite Power.  Borrower has the requisite right, power, legal capacity and authority to enter into, perform and comply with the Loan Documents, to carry out the provisions of the Loan Documents and to consummate the transactions contemplated hereby and thereby.  Borrower has all governmental licenses, authorizations, consents and approvals necessary to own and operate its Properties and to carry on its business as conducted on the date of this Agreement and as proposed to be conducted, the absence of which could reasonably be expected to result in a Material Adverse Change.  The execution, delivery and performance of the Loan Documents have been duly authorized by the members of Borrower and all necessary action in respect thereof has been or will have been taken, and the execution, delivery and performance thereof do not require any other consent or approval of any Person holding any equity in Borrower.
4.3    Consents.  Other than such as may have previously been obtained, filed or given, as applicable, no consent, license, permit, approval or authorization of, exemption by, notice or 

report to, or registration, filing or declaration with, any governmental authority or agency is required on the part of Borrower in connection with the execution, delivery and performance by Borrower of the Loan Documents.
4.4    Binding Agreements.  This Agreement has been duly executed and delivered by Borrower and constitutes, and the other Loan Documents, when executed and delivered by Borrower, will constitute, the legal, valid and binding obligations of Borrower, enforceable against Borrower in accordance with its or their, as applicable, terms, except as the enforceability hereof or thereof may be affected by bankruptcy, insolvency and other similar laws affecting creditors’ rights generally and principles of equity.  The execution, delivery and performance by Borrower of the Loan Documents, and the borrowing of the Loan and execution of the Deeds of Trust, do not or will not: (a) contravene Borrower’s Articles of Organization or Operating Agreement; (b) violate any provision of any law, rule, regulation, order, writ, judgment, injunction, decree, determination or award presently in effect applicable to Borrower; or (c) result in or require the imposition of any Lien upon or with respect to any Properties now owned or hereafter acquired by Borrower.
4.5    Litigation; Adverse Facts.  There is no action, suit, proceeding or arbitration at law or in equity, or before or by any governmental department, commission, board, bureau, agency or instrumentality, domestic or foreign, pending or, to the knowledge of Borrower, threatened, by or against or affecting Borrower or any Properties of Borrower which could reasonably be expected to result in a Material Adverse Change or which challenges in any manner the validity or enforceability of any of the Loan Documents (or any of the transactions contemplated hereby or thereby), or the ability of Borrower to execute, deliver and perform any of the Loan Documents.  Borrower is not subject to or in default with respect to any judgment, writ, injunction, decree, rule or regulation of any court or of any governmental department, commission, board, bureau, agency or instrumentality, domestic or foreign, or any material contract or agreement of Borrower, in a manner which could reasonably be expected to result in any Material Adverse Change.
4.6    Financial Condition.  Borrower has delivered to Lender Guarantor’s most recent annual and quarterly financial statement and such other monthly statements financial projections as Lender has requested.  All of the foregoing financial statements have been prepared in accordance with GAAP and, are true and correct in all material respects and the financial projections, without warranting the achievement of any result, represent Guarantor’s best current estimate of its future results.
4.7    Title to Collateral; Liens.  Except as set forth in the Disclosure Statement, Borrower will own all equipment located on the Mortgaged Loan and any other items affixed in any way to the Mortgaged Land.  Except for Permitted Liens, all of the Collateral will be free from all Liens of any nature whatsoever.  Except for Permitted Liens, Borrower will have good and marketable title to all of the Collateral.  The Collateral is, in all material respects, in good operating condition and adequate for the currently contemplated conduct of the business of Borrower.  
4.8    Payment of Taxes.  All tax returns and reports of Borrower required to be filed by it have been timely filed, and all Taxes, assessments, fees, amounts required to be withheld and paid to a governmental agency or regulatory authority, and other governmental charges upon Borrower, which are due and payable have been paid.  Borrower does not know of any proposed, asserted or 

assessed tax deficiency against it that could reasonably be expected to result in any Material Adverse Change.
4.9    Disclosure.  None of the representations or warranties made by Borrower in or pursuant to any of the Loan Documents, and none of the statements contained in any exhibit or report or financial information furnished by or on behalf of Borrower to Lender in connection with this Agreement or any negotiations leading thereto (except in each case solely to the extent that such representation, warranty or statement has prior to the date hereof been corrected in a subsequent written instrument delivered to Lender), contain any untrue statement of a material fact or omit any material fact required to be stated therein or necessary to make the statements contained therein, in light of the circumstances under which they were made, not misleading.  There is no fact known to Borrower which has not been expressly disclosed herein or in such other documents, certificates and statements furnished to Lender for use in connection with the transactions contemplated hereby which could reasonably be expected to result in a Material Adverse Change.
4.10    Intellectual Property.  Borrower has all necessary intellectual property rights and licenses to own its Property and to conduct its business as now conducted, and as currently contemplated to be conducted, without known conflict with the rights of others, and all of same are valid and subsisting, except where such lack of validity or subsistence or any such conflict could reasonably be expected to result in a Material Adverse Change.
4.11    No Existing Defaults and Violations.  Borrower is not in default under any material term of any contractual obligation to which it is a party, including any agreements relating to the incurrence of Indebtedness where such default could reasonably be expected to result in a Material Adverse Change.  Borrower is not in violation of any law, ordinance, rule or regulation to which it or any of its Properties is subject, failure to comply with which law, ordinance, rule or regulation could reasonably be expected to result in a Material Adverse Change.
4.12    Fire; Explosion and Labor Disputes.  Neither the business nor the Properties nor the operations of Borrower is affected by any fire, explosion, accident, strike, lockout or other labor dispute, drought, storm, hurricane, hail, earthquake, embargo, act of God or of the public enemy, or other casualty (irrespective of whether covered by insurance), which could reasonably be expected to result in a Material Adverse Change.
4.13    Joint Ventures, etc.  Except for wholly owned subsidiaries of Borrower as disclosed to Lender, Borrower is not (a) a general or limited partner in any partnership or a member of any Limited Liability Company, (b) a joint venturer in any joint venture, or (c) a direct or indirect owner of stock or other equity, or options or warrants to acquire stock or other equity or securities convertible into stock or other equity, of any other Person.
4.14    Use of Proceeds.  The proceeds from the Loan shall be used by Borrower only as set forth in this Agreement.  The use of said proceeds will not violate or result in a violation of, or require the making of any disclosures under, (a) Section 7 of the Securities Exchange Act of 1934, as amended, or any regulations issued pursuant thereto, including Regulations T, U and X of the Board of Governors of the Federal Reserve System, 12 C.F.R. Chapter II, (b) the Truth in Lending Act, as amended, or Regulation Z issued pursuant thereto, or (c) the Real Estate Settlement 

Procedures Act of 1974, as amended, or any regulations pursuant thereto.  Borrower does not own or intend to carry or purchase any “margin security” within the meaning of said Regulation T, including margin securities originally issued by it.  Without limiting the provisions of Section 2.10, none of the proceeds from the Loan will be used to purchase or carry (or refinance any borrowing the proceeds of which were used to purchase or carry) any “security” within the meaning of the Securities Exchange Act of 1934, as amended.
4.15    Solvency.  Borrower is not insolvent as defined by GAAP or in the Uniform Commercial Code.
4.16    Status Under Certain Federal Statutes.  Borrower is not subject to regulation under the Investment Borrower Act of 1940, as amended, the Public Utility Holding Borrower Act of 1935, as amended, the ICC Termination Act of 1995, as amended, or the Federal Power Act, as amended.
4.17    Brokers, etc.  Borrower has not dealt with any broker, finder, commission agent or other Person in connection with the Loan and the transactions contemplated by this Agreement.
4.18    No Default.  No Event of Default or Unmatured Event of Default will exist on the Closing Date.
4.19    No Subordination.  None of the obligations of Borrower under this Agreement, the Deeds of Trust or any Loan Document is subordinate in right of payment to any other obligation of Borrower.
		
	Section 5.
	INTEREST RATE SWAPS.

5.1    Swap Transactions.  Borrower may, if approved by Lender, enter into one or more Permitted Swap Transactions with a Swap Counterparty.   All Swap Obligations owed at any time by Borrower to a Swap Counterparty shall constitute Obligations outstanding under this Agreement and shall be secured by all Collateral just as if such Swap Obligations were owed directly to Lender.  If Lender shall at any time provide a guarantee to any Swap Counterparty of any Swap Obligations owed to such Swap Counterparty, all obligations of Lender under such guarantee and all amounts remitted by Lender to such Swap Counterparty with respect to such guarantee shall constitute Swap Obligations.    Lender shall provide Borrower with written notice of its agreement to guarantee any Swap Obligations for the benefit of a Swap Counterparty.
		
	Section 6.
	AFFIRMATIVE COVENANTS OF BORROWER.

Each Borrower covenants and agrees that, from the date hereof until payment in full of the Obligations and all obligations under this Agreement and the other Loan Documents:
6.1    Payments.  Borrower shall punctually pay or cause to be paid the principal, Prepayment Premium, if any, and interest on the Loan in accordance with the terms of this Agreement and the other Loan Documents.

6.2    Conduct of Business.  Borrower shall continue to engage in an efficient and economical manner in the business in which Borrower is presently engaged consistent with Borrower’s current and prior business practices or customary wine industry practices.
6.3    Accounting Records and Inspection.  Borrower shall maintain adequate financial and accounting books and records in accordance with sound business practices and GAAP consistently applied and permit any representative of Lender, with reasonable prior notice if no Event of Default or Unmatured Event of Default has occurred and is continuing and during usual business hours, reasonable access to inspect, audit and examine such books and records and to make copies and take extracts therefrom, and discuss its affairs, financing and business with its officers and independent public accountants.  Borrower shall furnish to Lender any information reasonably requested by it regarding Borrower’s affairs, business or finances promptly upon Lender’s request.  Borrower shall permit those Persons designated by Lender to visit and/or inspect or appraise any of the Collateral.  Borrower shall reimburse Lender for all costs and expenses incurred by Lender in connection therewith; provided that Lender shall not charge Borrower for an inspection or appraisal of the Collateral more than once in any twelve month period unless an Event of Default or Unmatured Event of Default has occurred and is continuing, in which case there shall be no limit on the number of such appraisals at Borrower’s expense.
6.4    Financial Statements and Other Information.  Borrower will cause Guarantor to maintain, for itself and each of its Subsidiaries, a system of accounting established and administered in accordance with generally accepted accounting principles, and furnish to Lender:
(a)    Within 120 days after the end of each of fiscal year, an unqualified (except for qualifications relating to changes in accounting principles or practices reflecting changes in generally accepted accounting principles) audit report of Guarantor, with no going concern modifier, certified by independent certified public accountants reasonably acceptable to Lender, which shall include any accounting firm of recognized regional standing, prepared in accordance with GAAP on a consolidated and consolidating basis (consolidating statements need not be certified by such accountants) for Guarantor and its Subsidiaries, including balance sheets as of the end of such period, related profit and loss and reconciliation of surplus statements, and a statement of cash flows.
(b)    Within 45 days after the end of the first three fiscal quarters of each year, for Guarantor and its Subsidiaries, consolidated and consolidating unaudited balance sheets as at the close of each such period and consolidated and consolidating profit and loss and reconciliation of surplus statements and a statement of cash flows for the period from the beginning of such fiscal year to the end of such quarter, and a detailed listing of all Permitted Equipment Financing Liens.  
(c)     As soon as available, but not later than March 31 of each fiscal year, projections of the consolidated and consolidating financial statements of Guarantor and its Subsidiaries for the such fiscal year on a monthly basis, including a projected consolidated and consolidating balance sheet and consolidated and consolidating statement of income, owners’ equity and cash flow of Guarantor and its Subsidiaries, which projection shall (i) state the assumptions used in the preparation thereof, (ii) contain such other information as reasonably requested by Lender, and (iii) be in form reasonably satisfactory to Lender.

(d)    Together with the financial statements required under Sections 6.4(a), (b) and (c), a compliance certificate in substantially the form of Exhibit A signed by Guarantor’s chief financial officer showing the calculations necessary to determine compliance with this Agreement and stating that no Unmatured Event of Default or Event of Default exists, or if any Unmatured Event of Default or Event of Default exists, stating the nature and status thereof.
(e)    Promptly upon the filing thereof, copies of all registration statements and annual, quarterly, monthly or other regular reports which Guarantor or any of its Subsidiaries files with the Securities and Exchange Commission.
(f)    Promptly after the commencement thereof, written notice of all actions, suits, investigations, proceedings or arbitrations affecting Borrower or Guarantor which, if determined adversely to Borrower or Guarantor could reasonably be expected to result in a Material Adverse Change, and any and all orders, judgments, decisions or findings therein.
(g)    As soon as practicable, and in any event within five (5) Business Days, after any officer of Borrower or Guarantor becomes aware (i) of the existence of any event or condition which constitutes an Event of Default or Unmatured Event of Default, or (ii) that Lender has given any notice or taken any other action with respect to a claimed Event of Default or Unmatured Event of Default, a written notice specifying the nature, extent and period of existence thereof and what action Borrower proposes to take with respect thereto.
(h)    Promptly upon receipt thereof, copies of any notices to Borrower or Guarantor from any federal or state administrative agency relating to any order, ruling, statute or other law or regulation which could reasonably be expected to result in a Material Adverse Change.
(i)    Within twenty (20) days after request of Lender a reasonably detailed listing of all equipment and fixtures constituting Collateral.
(j)    Promptly upon the occurrence of any of the following events, written notice describing such event: (i) either Borrower or Guarantor shall have changed its name or jurisdiction of formation, or (ii) any merger or consolidation involving Borrower or Guarantor.
(k)    Such other information as Lender may from time to time reasonably request.
6.5    Corporate Existence.  Borrower shall preserve and maintain its limited liability company existence and good standing in the jurisdiction of its organization, and qualify and remain qualified, as a foreign limited liability company in each jurisdiction in which such qualification is required, where failure to do so could reasonably be expected to result in a Material Adverse Change.
6.6    Maintenance of Permits and Licenses.  Borrower shall preserve and maintain in full force and effect, all permits, licenses, filings or registrations required of Borrower by any governmental authority or agency where failure to preserve or maintain in full force and effect such permit, license, filing or registration could reasonably be expected to result in a Material Adverse Change.

6.7    Payment of Taxes and Claims.  Borrower shall pay or shall cause to be paid all Taxes, assessments and other governmental charges imposed upon it or any of its Properties or in respect of its business, income or Properties before any penalty or interest accrues thereon, and all claims (including claims for labor, services, materials and supplies) for sums which have become due and payable and which by law have or may become a Lien upon any of its Properties prior to the time when any penalty or fine shall be incurred with respect thereto; provided, however, that no such Tax, assessment, charge or claim need be paid if the same is being contested in good faith, by appropriate proceedings promptly instituted and diligently conducted and an adequate reserve or other appropriate provision shall have been made as required by GAAP.  Unless Borrower has provided Lender with a tax service contract acceptable to Lender, Borrower shall provide evidence of payment of all real property taxes and assessments within thirty (30) days after payment thereof.
6.8    Maintenance of Properties.  For Properties of Borrower not covered by any Deed of Trust, Borrower shall maintain or shall cause to be maintained, in good repair, working order and condition (ordinary wear and tear and obsolescence excepted) all of such Properties useful or necessary to its business or which are used in connection therewith or related thereto except where the failure to do so could not reasonably be expected to have a Material Adverse Change.
6.9    Insurance.  For Properties of Borrower not covered by any Deed of Trust, Borrower shall maintain or shall cause to be maintained, with financially sound and reputable insurers, insurance with respect to the Properties, business and liabilities of Borrower against loss or damage of the kinds customarily insured against by Persons of established reputation engaged in the same or similar business and similarly situated, of such types and in such amounts as are customarily carried under similar circumstances by such other corporations. 
6.10    Compliance with Laws.  Borrower shall comply in all respects with the requirements of all applicable laws, rules and regulations (including all Environmental Requirements) and orders of any governmental authority if failure to so comply would in any such case result in a Material Adverse Change.
6.11    Financial Covenants.
(a)    General.  Compliance with the covenants in this Section 6.11 shall be measured by the information contained in any financial statements required to be furnished to Lender under Section 6.4 (and with any adjustments required as a result of the definitions of financial terms contained herein), or, if Lender deems it necessary or advisable to measure compliance based on other sources of information, in any other source reasonably deemed necessary or advisable by Lender.
(b)    Consolidated Debt Service Coverage Ratio.  Borrower shall cause Guarantor to maintain a Consolidated Debt Service Coverage Ratio of not less than 1.5:1.0 for the twelve (12) fiscal month period ending on the last day of each fiscal year commencing with the fiscal year ending December 31, 2017. 
6.12    Further Assurances.  At any time or from time to time upon the request of Lender, Borrower shall, or cause Guarantor to, promptly (but in no event later than 10 days after such 

request) execute, and deliver such further documents and do such other acts and things as Lender may reasonably request in order to effect fully the purpose of this Agreement, the Deeds of Trust, or the other Loan Documents and to provide for repayment of the principal and interest due under any Loan Document and the amount of principal funded thereunder in accordance with the terms of this Agreement and the other Loan Documents.
		
	Section 7.
	NEGATIVE COVENANTS OF BORROWER.

Each Borrower covenants and agrees that, from the date hereof until payment in full of the Obligations:
7.1    Indebtedness.  Borrower shall not incur any Indebtedness unless Borrower has determined in good faith that Borrower shall have sufficient resources to pay such Indebtedness as and when it becomes due.
7.2    Liens.  Borrower shall not create, incur, assume or permit to exist, directly or indirectly, any Lien on any Collateral except for Permitted Liens.
7.3    Use of Proceeds.  Borrower shall not use any proceeds from the Loan in any way that will violate or result in a violation of Section 7 of the Securities Exchange Act of 1934, as amended, or any regulations issued pursuant thereto, including Regulations T, U and X of the Board of Governors of the Federal Reserve System, 12 C.F.R. Chapter II.  Borrower shall not own or carry or purchase any “margin security” within the meaning of said Regulation T, including margin securities originally issued by it.  Borrower shall not use any of said proceeds to purchase or carry (or refinance any borrowing the proceeds of which were used to purchase or carry) any “security” within the meaning of the Securities Exchange Act of 1934, as amended.
7.4    Restricted Payments.  During any time that an Event of Default or Unmatured Event of Default has occurred and is continuing, neither Borrower nor Guarantor shall make any Restricted Payment.  At all other times, neither Borrower nor Guarantor shall make any Restricted Payment that would leave such Person with inadequate capital or liquidity to satisfy such Person’s reasonably anticipated obligations.
7.5    Merger.  Borrower shall not (a) consolidate with or merge with or into any other Person unless (i) Borrower is the surviving entity in such consolidation or merger, and after giving effect thereto, no Event of Default or Unmatured Event of Default would exist, or (ii) such consolidation or merger is in connection with a corporate restructuring where Guarantor remains the ultimate parent of Borrower or Borrower’s successor, or (b) convey, transfer or lease all or substantially all of its Property to any Person.
7.6    Restrictions on Disposition of Collateral.  Borrower shall not sell, transfer, or otherwise dispose of (a) any Mortgaged Land or any interest in any Mortgaged Land, or (b) any material equipment or material fixtures (any such items being the “Sold Equipment”) that constitute Collateral unless (i) the Sold Equipment is worn out, obsolete, or no longer of use in Borrower’s business and the function performed by such Sold Equipment is adequately performed by other equipment or fixtures constituting Collateral, or (ii) the Sold Equipment is replaced by other 

equipment or fixtures of equal or greater value than the Sold Equipment and all such replacement equipment or fixtures constitutes Collateral.
7.7    Leases.  Without Lender’s consent, Borrower shall not lease any Mortgaged Land for a period greater than one (1) year.
7.8    Conduct of Business.  Borrower shall not engage in any business other than the business in which it is engaged on the Closing Date or any business substantially related thereto.
7.9    Misrepresentations.  Except with respect to the financial projections that have been furnished by Borrower to Lender, which projections have been certified to Lender pursuant to the last sentence of Section 4.6 hereof, neither Borrower nor Guarantor shall furnish Lender with any certificate or other document that: (a) contains any untrue statement of material fact; or (b) omits to state a fact necessary to make it not materially misleading in light of the circumstances under which it was furnished.
7.10    Reserved.
7.11    Ownership of Improvements.  Borrower shall not permit any Person other than Borrower to own any items affixed to any Mortgaged Land other than trade fixtures, equipment or other items leased by Borrower under capital leases in the ordinary course of business.
7.12    No Subordination.  Borrower shall not create, incur, assume, become or remain liable in any manner in respect of or in any way allow or suffer to exist any Indebtedness that is senior in any way in respect to payments of any interest, principal, Prepayment Premium or any other payment owed to Lender under this Agreement or under any of the other Loan Documents.  
7.13    Accounting Changes; Fiscal Year. Borrower shall not, and shall not suffer or permit Guarantor or any of its Subsidiaries to (a) make any change in accounting treatment or reporting practices, except as permitted or required by GAAP or (b) change its fiscal year.
		
	Section 8.
	EVENTS OF DEFAULT.

8.1    Events of Default.  The occurrence of any one or more of the following events, acts or occurrences shall constitute an event of default (“Event of Default”):
(a)    Failure to Make Payments When Due.  Borrower shall fail to pay any amount owing under this Agreement or any Loan Document (including any Swap Agreement) when such amount is due, whether at stated maturity, as a result of a mandatory repayment requirement, by acceleration, by notice of prepayment or otherwise, provided in the case of a Swap Agreement, such failure to pay shall constitute a default only after the expiration of any relevant grace period and the giving or any written notice required under any such Swap Agreement as a condition of a default under such Swap Agreement;
(b)    Breach of Certain Covenants.  Borrower (or, if applicable, Guarantor) shall fail to perform or comply fully with any covenant in any Deed of Trust or contained in Sections 6.1, 6.2, 

6.3, 6.5, 6.6, 6.7 (with respect to real property taxes and assessments), 6.9, 6.11 or in any portion of Section 7 (subject to any applicable grace periods set forth within such sections);
(c)    Breach of Other Covenants.  Borrower (or, if applicable, Guarantor) shall fail to perform or comply fully with any covenant, term or condition contained in this Agreement or any Deed of Trust (other than those referred to in Section 8.1(a), 8.1(b) or 8.1 (e)), and such failure if by its nature is capable of being cured or remedied shall not have been cured or remedied within 30 days after notice from Lender of such failure provided, however that in the case such breach is not capable of being cured within such 30-day period and Borrower timely notifies Lender of such fact and Borrower diligently pursues such cure, then the cure period shall be extended to the date requested in Borrower’s notice but in no event more than 60 days from the initial breach; provided, further, that such additional 30-day opportunity to cure shall not apply in the case of any failure to perform or observe any covenant which has been the subject of a prior failure within the preceding 180 days or which is a willful and knowing breach by Borrower;
(d)    Breach of Representation or Warranty.  Any financial statement, representation, warranty or certification made or furnished by Borrower pursuant to or in connection with this Agreement or in any of the other Loan Documents or in any statement, document, letter or other writing or instrument furnished or delivered by or on behalf of Borrower to Lender pursuant to or in connection with this Agreement or any Loan Document or as an inducement to Lender to enter into this Agreement shall, at any time, prove to have been materially false, incorrect or incomplete when made;
(e)    Bankruptcy or Insolvency.  Borrower: (i) shall generally not, or be unable to, or shall admit in writing its inability to, pay its debts as such debts become due; (ii) shall make an assignment for the benefit of creditors or petition or apply to any tribunal for the appointment of a custodian, receiver or trustee for it or a substantial part of its assets; (iii) shall commence any proceeding under any bankruptcy, reorganization, arrangement, readjustment of any debt, dissolution or liquidation law or statute of any jurisdiction, whether now or hereafter in effect; (iv) shall have had any such petition or application filed or any such proceeding shall have been commenced against it, in which an adjudication or appointment is made or order for relief is entered, or which petition, application or proceeding remains undismissed for a period of 90 days or more; (v) by any act or omission indicate its consent to, approval of or acquiescence in any such petition, application or proceeding or order for relief or the appointment of a custodian, receiver or trustee for all or a substantial part of its assets; or (vi) shall suffer any custodianship, receivership or trusteeship to continue undischarged for a period of 90 days or more;

(f)    Cessation of Operations.  Borrower shall permanently close substantially all of Borrower’s business operations on the Mortgaged Land or Borrower shall cease operations of substantially all of Borrower’s business on the Mortgaged Land for more than 30 consecutive days, unless such cessation is for the purpose of undertaking renovations or improvements in which case such cessation shall continue for no more than 180 days;
(g)    Environmental Laws.
(1)    Borrower shall be required under any Environmental Requirements (A) to implement any remedial, neutralization or stabilization process or program, the cost of which could constitute a Material Adverse Change, (B) to close permanently Borrower’s business operations on the Mortgaged Land, or to cease operations of Borrower’s business on the Mortgaged Land for more than 120 consecutive days, or (C) to pay any penalty, fine, or damages with respect to any Mortgaged Land in an aggregate amount in excess of Five Hundred Thousand Dollars ($500,000); or
(2)    The Properties (whether leased or owned) of Borrower or the operations conducted thereon by Borrower or any current or prior owner or operator thereof (in the case of real property), shall violate or have violated any applicable Environmental Requirements, if such violation would constitute a Material Adverse Change; or Borrower shall not obtain or maintain any license, permit, authorization or consent required to be obtained or filed under any Environmental Requirements in connection with the use of such property and assets, including past or present treatment, storage, disposal or release of Hazardous Material into the environment, if the failure to obtain or maintain the same would constitute a Material Adverse Change;
(h)    Impairment of Loan Documents.  This Agreement or any of the other Loan Documents shall terminate or cease in whole or in part to be the valid, binding and enforceable obligation of Borrower or any Person acting for or on behalf of Borrower contests such validity, binding effect or enforceability, or purports to revoke any such document;
(i)    Dissolution.  Borrower shall file any documents instituting or relating to its dissolution, or any order, judgment or decree shall be entered decreeing the dissolution of Borrower; 
(j)    Guaranty Default.  An Event of Default (as defined in the Guaranty) shall occur.
(k)    Cross-Default.  An event of default shall occur under any loan agreement, credit agreement, security agreement, or similar agreement between Borrower and Lender or any affiliate of Lender.
(l)    Change in Control.  Any Change in Control shall occur.
8.2    Remedies.
(a)    Automatic Acceleration.  If any Event of Default described in Section 8.1(e) shall occur, all Obligations shall immediately become due and payable.

(b)    Optional Acceleration.  If any Event of Default other than those referred to in Section 8.2(a) shall occur and be continuing, Lender may declare all Obligations to be due and payable immediately.
(c)    Enforcement Actions, etc.  Upon the occurrence and during the continuation of an Event of Default, then and in every such case Lender may proceed to protect and enforce the rights of Lender either (i) by foreclosure on some or all of the Collateral as permitted by the Deeds of Trust or by law in order to satisfy the obligations secured by the Deeds of Trust, (ii) by taking any other actions permitted by the Deeds of Trust in order to satisfy the obligations secured by the Deeds of Trust, (iii) by suit in equity or by action at law, or both, whether for the specific performance or enforcement of any covenant, condition or agreement contained in this Agreement, any Deed of Trust or any other Loan Document or in aid of the exercise of any power granted in this Agreement, any Deed of Trust or any other Loan Document, or (iv) by proceeding to enforce the payment of this Agreement and the other Loan Documents or any other contractual, legal or equitable rights of Lender.  All payments received by Lender shall be applied in such order as Lender shall determine.
(d)    Unconditional Right of Lender to Receive Principal, Prepayment Premium, if any, and Interest.  Notwithstanding any provision of this Section 8.2, Lender shall have the right, which is absolute and unconditional, to receive payment of the principal of, the Prepayment Premium, if any, and interest on, the Loan on the due dates therefor and to institute suit for the enforcement of any such payment, and such right shall not be impaired without the consent of Lender.
		
	Section 9.
	EXPENSES AND INDEMNIFICATION.

9.1    Expenses.  Borrower hereby agrees to pay on demand: 
(a)    the reasonable out-of-pocket costs and expenses of Lender incurred in connection with the negotiation, preparation, reproduction, execution and delivery of this Agreement and the Loan Documents and any amendments, modifications, restatements, consents or waivers hereto or thereto (whether or not any such amendments, etc. are approved by the party or parties to which the request therefor was made);
(b)    the costs and expenses of Lender of and related to all title insurance, surveys, environmental audits, engineering and architect fees and filing and recording fees or incurred in connection with the closing of the Loan or upon and during the continuance of an Event of Default, monitoring Collateral, or following a reasonable determination by Lender that the Property is not in material compliance with Environmental Requirements or other applicable law, subject to Section 6.3;
(c)    the reasonable out-of-pocket costs and expenses (including reasonable attorneys’ fees and expenses) incurred by Lender in connection with obtaining advice about Lender's rights and obligations under this Agreement or the other Loan Documents, to address any default or to enforce any provision of this Agreement or any of the other Loan Documents; 

(d)    the reasonable out-of-pocket costs and expenses (including reasonable attorneys’ fees and expenses) incurred by Lender in connection with any litigation, contest, dispute, suit, proceeding, or action (whether instituted by Lender, Borrower or any other Person) in any way relating to the Collateral, this Agreement, or any of the Loan Documents; and
(e)    the reasonable out-of-pocket costs and expenses (including reasonable attorneys’ fees and expenses) incurred by Lender in connection with any bankruptcy or other insolvency proceeding, reorganization, workout, composition or other creditor arrangement of Borrower (including the seeking of relief from the automatic stay or proposal of opposition to a plan of reorganization).
9.2    Indemnification.  Borrower shall defend, indemnify and hold Lender and the officers, directors, employees, agents of and counsel to Lender (each, an “Indemnitee”) harmless against and from any and all liabilities, obligations, losses, damages, penalties, actions, causes of action, judgments, suits, claims, costs and expenses, however caused, of any kind or nature whatsoever, including the reasonable fees and expenses of counsel to Indemnitees, which may be imposed on, incurred by or asserted (whether actually asserted in any proceeding or threatened, and whether or not such Indemnitee is a party thereto) against such Indemnitee (collectively “Losses”) in any manner relating to, connected with or arising out of the negotiation, execution, delivery or performance of this Agreement or any of the other Loan Documents, the breach by Borrower of any representation or warranty contained herein or therein, any claim by any broker or finder relating in any way to the Agreement, any of the Loan Documents, or the consummation of the transactions contemplated by this Agreement or any of the other Loan Documents (the “Indemnified Liabilities”); provided, however, that Borrower’s obligations to indemnify shall not extend to any Losses arising as a result of the gross negligence, willful misconduct or unlawful conduct of an Indemnitee as determined in a final judgment by a court of competent jurisdiction.  Each Indemnitee shall promptly notify Borrower of each event of which it has knowledge which may give rise to a claim under the indemnification provisions of this Section 9.2, but no such failure to give notice shall relieve Borrower of its obligations under this Section 9.2.  If any investigative, judicial or administrative action, suit or proceeding arising from any of the foregoing is brought against any Indemnitee, Borrower will resist and defend such action, suit or proceeding or cause the same to be resisted and defended by counsel designated by Borrower (which counsel shall be reasonably satisfactory to such Indemnitee).  Such Indemnitee will use its reasonable efforts to cooperate in the defense of any such action, suit or proceeding.  To the extent that the undertaking to indemnify and hold harmless set forth in this Section 9.2 may be unenforceable because it is violative of any law or public policy, Borrower shall make the maximum contribution to the payment and satisfaction of each of the Indemnified Liabilities which is permissible under applicable law.  The obligations of Borrower under this Section 9.2 shall survive the termination of this Agreement and the other Loan Documents and the discharge of Borrower’s other obligations hereunder and thereunder.
		
	Section 10.
	MISCELLANEOUS.

10.1    No Election; Remedies Cumulative; Waivers; Amendments.  No failure or delay on the part of Lender in exercising any right, power, privilege or remedy under this Agreement or any of the other Loan Documents shall impair or operate as a waiver thereof, nor shall any single 

or partial exercise of any such right, power, privilege or remedy preclude any other or further exercise thereof or the exercise of any other right, power, privilege or remedy.  The remedies provided for under this Agreement and the other Loan Documents are cumulative and are not exclusive of any remedies that may be available to Lender at law, in equity or otherwise.  Neither this Agreement nor any of the other Loan Documents, nor any of its or their terms may be terminated, amended, supplemented, waived or modified orally, but only by an instrument in writing signed by Lender and Borrower.  Any waiver of any provision of this Agreement or any of the other Loan Documents, and any consent to any departure by Borrower from the terms of any provisions hereof or thereof, shall be effective only in the specific instance and for the specific purpose for which given.  In any event, no notice to, or demand on, Borrower shall entitle Borrower to any other or further notice or demand in similar or other circumstances.
10.2    Notices.  All notices, demands, instructions and other communications required or permitted to be given to, or made upon, any party to this Agreement or any of the other Loan Documents shall be in writing and (except for financial statements and other related informational documents to be furnished pursuant hereto which may be sent by first-class mail, postage prepaid, and except for any of the foregoing for which the method of delivery is specifically prescribed by statute) shall be personally delivered or sent by facsimile or electronic transmission, by registered mail, postage prepaid, return receipt requested, or by a nationally recognized overnight courier service, and shall be deemed to be given for purposes of this Agreement (a) on the day that such writing is received by the Person to whom it is to be sent if given by personal delivery, by facsimile or electronic transmission or by courier, and (b) three Business Days after mailing if mailed pursuant to this Section 10.2.  Notices, demands, instructions and other communications covered by this Section 10.2 shall be given to or made upon the respective parties hereto to the addresses below.  Either party may designate a change of address within the United States of America by written notice to the other by giving at least five (5) days prior written notice of such change of address.
If to Borrower:

Double Canyon Vineyards, LLC
A Fine Old Building, LLC
2700 Napa Valley Corporate Drive, Suite B
Napa, CA 94558
Attn: Chief Financial Officer
Facsimile: 707-265-7928
Email: shannon.mclaren@crimsonwinegroup.com

If to Lender:

American AgCredit, FLCA
5560 S. Broadway
Eureka, CA 95503 (if delivered by courier)
                
P.O. Box 398
Fields Landing, CA 95537-0398 (if delivered by mail)

Attn: Account Officer – Double Canyon Vineyards
Facsimile: 707-442-1268
Email: operations-cmg@agloan.com; eadams@agloan.com;
10.3    Time of the Essence.  Time is of the essence in this Agreement and the Loan Documents.
10.4    Transfers; Participations.  Lender may sell, assign, transfer, grant a participation in, or otherwise dispose of all or any portion of its interest in this Agreement at any time without consent of Borrower.  In connection therewith, Lender shall be entitled to provide to any assignee or participant or prospective assignee or participant such information pertaining to Borrower as Lender may deem appropriate or such assignee or participant or prospective assignee or participant may request; provided, that such assignee or participant or prospective assignee or participant shall agree (a) to treat in confidence such information, and (b) not to make use of such information for purposes of transactions other than contemplated by such assignment or participation.
10.5    Headings.  Section headings used in this Agreement or any of the other Loan Documents and any table of contents herein or therein are for convenience of reference only and shall not constitute a part hereof or thereof for any other purpose or affect the construction hereof or thereof.
10.6    Execution in Counterparts and via Electronic Transmission.  This Agreement may be executed in any number of counterpart signature pages and by different parties on separate counterpart signature pages, each of which counterparts, when so executed and delivered, shall be deemed to be an original and all of which counterparts, taken together, shall constitute but one and the same Agreement.  This Agreement shall become effective upon the execution of a counterpart hereof by each of the parties hereto.  Signature pages to this Agreement and any Loan Document may be delivered via facsimile or electronic transmission and any Loan Document containing such a signature page shall be considered an original for all purposes hereunder.
10.7    Successors and Assigns.  This Agreement and the other Loan Documents shall inure to the benefit of and be binding upon the permitted successors and assigns of each of the parties.  The provisions of this Agreement and the other Loan Documents are intended to be for the benefit of Lender and shall be enforceable by Lender pursuant to the terms hereof or thereof.  This Agreement and the other Loan Documents may not be assigned by Borrower in whole or in part without the prior written consent of Lender, which consent may be withheld in its sole and absolute discretion, 

and any such assignment of this Agreement and/or the other Loan Documents without such prior written consent shall be void. 
10.8    Reproduction of Documents.  This Agreement and the other Loan Documents, including (a) consents, waivers and modifications which may hereafter be executed, (b) documents received by Lender at the Closing Date, and (c) financial statements, certificates and other information previously or hereafter furnished to Lender or Borrower, may be reproduced by Lender or Borrower, respectively, by any photographic, photostatic, microfilm, micro-card, miniature photographic or other similar process and Lender or Borrower, respectively, may destroy any original document so reproduced.  Borrower and Lender agree that any such reproduction shall be admissible in evidence as the original itself in any judicial or administrative proceeding (whether or not the original is in existence and whether or not such reproduction was made in the regular course of business) and that any enlargement, facsimile or further reproduction of such reproduction shall likewise be admissible in evidence.
10.9    Severability of Provisions.  Any provision of this Agreement or any of the other Loan Documents which is illegal, invalid, prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such illegality, invalidity, prohibition or unenforceability without invalidating or impairing the remaining provisions hereof or thereof or affecting the validity or enforceability of such provision in any other jurisdiction.
10.10    Survival of Agreements; Representations and Warranties.  All agreements, representations and warranties made herein shall survive the execution and delivery of this Agreement and the other Loan Documents.
10.11    Independence of Covenants.  All covenants under this Agreement and the other Loan Documents shall be given independent effect so that if a particular action or condition is not permitted by any one covenant, the fact that it would be permitted by another covenant, by an exception thereto or would otherwise be within the limitations thereof, shall not avoid the occurrence of an Event of Default if such action is taken or condition exists.  In addition, any representation, warranty, covenant or indemnification herein is supplemented and cumulative to, and shall not in any way limit, any representation, warranty, covenant or indemnification in any Deed of Trust or any Note, regardless of whether or not the subject matter of any such provisions may overlap or be redundant in any way.
10.12    Complete Agreement.  This Agreement, together with the other Loan Documents, is intended by the parties hereto as a final expression of their agreement and is intended as a complete statement of the terms and conditions of their agreement with respect to the subject matter of this Agreement.
10.13    Payments on a Day that is not a Business Day.  Whenever any payment to be made hereunder or under any other Loan Document shall be stated to be due on a day that is not a Business Day, such payment shall be due and may be made on the next succeeding Business Day and such extension of time shall in such case be included in computing interest, if any, in connection with such payment.

10.14    Governing Law.  This Agreement and the other Loan Documents shall be governed by, and interpreted and construed in accordance with, the laws of the State of California applicable to contracts made and to be performed in California.
10.15    JURY WAIVER; JUDICIAL REFERENCE.  
(a)    EACH OF THE PARTIES TO THIS AGREEMENT HEREBY EXPRESSLY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS UNDER THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR UNDER ANY AMENDMENT, MODIFICATION, INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED (OR WHICH MAY IN THE FUTURE BE DELIVERED) IN CONNECTION HEREWITH OR THEREWITH OR ARISING FROM ANY LENDING OR OTHER RELATIONSHIP EXISTING IN CONNECTION WITH THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS.  EACH OF THE PARTIES AGREES THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY.
(b)    Each of the parties hereto prefer that any dispute between them be resolved in litigation subject to the jury trial waiver set forth in Section 10.15(a) herein, but the California Supreme Court in Grafton Partners L.P. v. Superior Court has held such pre-dispute jury trial waivers are unenforceable under California law.  Each of the parties hereto agree that the provisions of Section 10.15(b)-(i) shall be applicable until such pre-dispute jury trial waivers are deemed enforceable under California law or unless any dispute between them is brought before a court that is not applying California law.
(c)    Other than (i) non-judicial foreclosure of security interests in real or personal property,  (ii) the appointment of a receiver or (iii) the exercise of other provisional remedies (any of which may be initiated pursuant to applicable law), any controversy, dispute or claim (each, a “Claim”) arising out of or relating to this Agreement or any other Loan Documents, will be resolved by a reference proceeding in California in accordance with the provisions of Section 638 et seq. of the California Code of Civil Procedure (“CCP”), or their successor sections, which shall constitute the exclusive remedy for the resolution of any Claim, including whether the Claim is subject to the reference proceeding.  Venue for the reference proceeding will be in the Superior Court or Federal District Court in the County or District where venue is otherwise appropriate under this Agreement (the “Court”).
(d)    The referee shall be a retired Judge or Justice selected by mutual written agreement of the parties.  If the parties do not agree, the referee shall be selected by the Presiding Judge of the Court (or his or her representative).  A request for appointment of a referee may be heard on an ex parte or expedited basis, and the parties agree that irreparable harm would result if ex parte relief is not granted.  The referee shall be appointed to sit with all the powers provided by law.  Pending appointment of the referee, the Court has power to issue temporary or provisional remedies.
(e)    The referee will have power to expand or limit the amount and duration of discovery.  The referee may set or extend discovery deadlines or cutoffs for good cause, including a party’s failure to provide requested discovery for any reason whatsoever.  All disputes relating to discovery 

which cannot be resolved by the parties shall be submitted to the referee whose decision shall be final and binding.
(f)    Except as expressly set forth in this Agreement, the referee shall determine the manner in which the reference proceeding is conducted including the time and place of hearings, the order of presentation of evidence, and all other questions that arise with respect to the course of the reference proceeding.
(g)    The referee shall be required to determine all issues in accordance with existing case law and the statutory laws of the State of California.  The rules of evidence applicable to proceedings at law in the State of California will be applicable to the reference proceeding.  The referee shall be empowered to enter equitable as well as legal relief, provide all temporary or provisional remedies, enter equitable orders that will be binding on the parties and rule on any motion which would be authorized in a trial, including motions for summary judgment or summary adjudication.  The referee shall issue a decision pursuant to CCP §644 and the referee’s decision shall be entered by the Court as a judgment or an order in the same manner as if the action had been tried by the Court.  The final judgment or order entered by the Court is fully appealable as provided by law.  The parties reserve the right to findings of fact, conclusions of laws, a written statement of decision, and the right to move for a new trial or a different judgment, which new trial, if granted, is also to be a reference proceeding under this provision.
(h)    If the enabling legislation which provides for appointment of a referee is repealed (and no successor statute is enacted), any dispute between the parties that would otherwise be determined by reference procedure will be resolved and determined by arbitration.  The arbitration will be conducted by a retired judge or Justice, in accordance with the California Arbitration Act §1280 through §1294.2 of the CCP as amended from time to time.  The limitations with respect to discovery set forth above shall apply to any such arbitration proceeding.
(i)    THE PARTIES RECOGNIZE AND AGREE THAT ALL DISPUTES RESOLVED UNDER THIS REFERENCE PROVISION WILL BE DECIDED BY A REFEREE AND NOT BY A JURY.  AFTER CONSULTING (OR HAVING HAD THE OPPORTUNITY TO CONSULT) WITH COUNSEL OF THEIR OWN CHOICE, EACH PARTY KNOWINGLY AND VOLUNTARILY AND FOR THEIR MUTUAL BENEFIT AGREES THAT THIS REFERENCE PROVISION WILL APPLY TO ANY DISPUTE BETWEEN THEM WHICH ARISES OUT OF OR IS RELATED TO THIS AGREEMENT OR THE LOAN DOCUMENTS.
10.16    Confidentiality.  Lender agrees that it will keep confidential from all Persons, other than its counsel, accountants, financial advisors, officers, directors, employees, consultants and agents, all information obtained by Lender pursuant to this Agreement or the other Loan Documents and designated or marked in writing by Borrower as confidential in accordance with procedures and standards that Lender applies generally as a matter of institutional policy to information of a confidential nature; provided, however, that Lender may disclose any such information (a) as has become generally available to the public (through no action on its part), (b) as may be required or appropriate in any report, statement or testimony submitted to any municipal, state or federal regulatory body having or claiming to have jurisdiction over Lender or to any nationally recognized rating agency, (c) as may be required in response to any summons or subpoena or in connection 

with any litigation, (d) in order to comply with any law, regulation or rule applicable to Lender, (e) to a prospective assignee in connection with any contemplated transfer of the Loan Documents provided that Lender advises such prospective assignee of the confidential nature of such information and such prospective assignee agrees to be bound by the provisions of this Section 10.16, (f) to any participant, or (g) otherwise as may be reasonably necessary for the enforcement of the rights of Lender with respect to this Agreement or any of the other Loan Documents.
10.17    General Construction. Unless otherwise noted, as used in this Agreement: (a) all “Section” references are to Sections of this Agreement; (b) use of the word “including” means “including, without limitation”; (c) the words “hereof,” “herein” and “hereunder” and words of similar import refer to this Agreement as a whole and not to any particular provision of this Agreement; (d) all references to “day” or “days” means calendar days; (v) all meanings attributed to defined terms are equally applicable to both the singular and plural forms of the defined term; and (e) all references to a “Loan Document” mean such document as it is constituted as of the Closing Date, as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time. 
10.18     Section 2955.5(a) Notice.  Borrower is hereby notified that Section 2955.5(a) of the California Civil Code provides, in relevant part, as follows:  “No lender shall require a borrower, as a condition of receiving or maintaining a loan secured by real property, to provide hazard insurance coverage against risks to the improvements on that real property in an amount exceeding the replacement value of the improvements on the property.”  Borrower confirms that Lender advised Borrower of the provisions of Section 2955.5(a) prior to the Closing Date.  
10.19    Joint and Several Liability.  The Obligations constitute and single obligation, and the liability of each Borrower hereunder is joint and several.  
		
	Section 11.
	INTERPRETATION.

11.1    Definitions.  For purposes of this Agreement, the following initially capitalized terms shall have the following meanings: 
“Borrower” shall have the meaning specified in the introductory paragraph hereto. 
“Business Day” means any day that is not a Saturday, a Sunday, or a day on which banks are required or permitted to be closed in the State of California.
“Capitalized Lease” of a Person means any lease of Property by such Person as lessee which would be capitalized on a balance sheet of such Person prepared in accordance with GAAP as in effect as of the date of this Agreement.
“Capitalized Lease Obligations” of a Person means the amount of the obligations of such Person under Capitalized Leases which would be shown as a liability on a balance sheet of such Person prepared in accordance with GAAP.

“Change in Control” means that Guarantor shall cease to own one hundred percent (100%) of the membership interests in Borrower.
“Closing Date” means the date on which the escrow established for closing of the Loan closes and the documents held in escrow become legally effective between Borrower and Lender, which date may not be the same date as the date on the face page hereof.
“Code” means the Internal Revenue Code of 1986, as from time to time amended.
“Collateral” shall have the meaning set forth in Section 2.12 and shall also mean any and all property of Borrower in which Lender now or hereafter has a Lien to secure all or any portion of the Obligations.
“Consolidated Adjusted EBITDA” means, with reference to any period, for Guarantor and its Subsidiaries on a consolidated basis, the sum (without duplication) of:  (a) Consolidated Net Income; plus (b) the sum of (i) Federal, state, local, and foreign income taxes, (ii) interest expense (including the implicit interest portions of any capitalized lease obligations), (iii) depreciation and amortization, (iv) non-cash losses on asset sales, (v) deferred revenue and (vi) all other non-cash expenses; minus (c) the sum of (i) non-operating gains (including gains on asset sales (other than sales of inventory)), extraordinary or nonrecurring gains, gains from discontinuance of operations, (ii) non-operating losses, and (iii) deferred revenue, in each case to the extent included in Consolidated Adjusted EBITDA in any prior period.
“Consolidated Debt Service” means, for any period, without duplication, cash Consolidated Interest Expense, plus scheduled principal payments on Indebtedness, all calculated for Guarantor and its Subsidiaries on a consolidated basis in accordance with GAAP.
“Consolidated Debt Service Coverage Ratio” means, for any period, the ratio of (a) Consolidated Adjusted EBITDA to (b) Consolidated Debt Service, all calculated for Guarantor and its Subsidiaries on a consolidated basis in accordance with GAAP.  
“Consolidated Interest Expense” means, with reference to any period, total interest expense (including that attributable to Capitalized Lease Obligations) of Guarantor and its Subsidiaries for such period with respect to all outstanding Indebtedness of Guarantor and its Subsidiaries (including all commissions, discounts and other fees and charges owed with respect to letters of credit and bankers’ acceptances and net costs under Rate Management Transactions in respect of interest rates, to the extent such net costs are treated as interest expense for such period in accordance with GAAP), calculated for Guarantor and its Subsidiaries on a consolidated basis for such period in accordance with GAAP.
“Consolidated Net Income” means, with reference to any period, the consolidated net income (or loss) determined for Guarantor and its Subsidiaries, on a consolidated basis in accordance with GAAP.
“Contingent Obligation” of a Person means any agreement, undertaking or arrangement by which such Person assumes, guarantees, endorses, contingently agrees to purchase or provide funds 

for the payment of, or otherwise becomes or is contingently liable upon, the obligation or liability of any other Person, or agrees to maintain the net worth or working capital or other financial condition of any other Person, or otherwise assures any creditor of such other Person against loss, including any comfort letter, operating agreement, take-or-pay contract or the obligations of any such Person as general partner of a partnership with respect to the liabilities of the partnership.
“Deed of Trust” shall have the meaning set forth in Section 2.12.
“Default Rate” means a rate of interest that is two percent (2%) per annum higher than the rate otherwise applicable. 
“Disclosure Statement” means the disclosure statement attached hereto.
“Environmental Requirements” shall have the meaning set forth in the Deeds of Trust.
“Event of Default” shall have the meaning set forth in Section 8.
“Fee Letter” shall have the meaning set forth in Section 2.6.
“Fees” means any fees referred to in the Fee Letter, any Prepayment Premium, and any other fees due to Lender pursuant to the Loan Documents.
“GAAP” means generally accepted accounting principles in the United States of America in effect on the date of this Agreement; provided, however, that all financial statements to be furnished to Lender after the Closing Date shall utilize such generally accepted accounting principles in effect at the time of preparation.
“Guarantor” means Crimson Wine Group, Ltd., a Delaware corporation.
“Guaranty” means the Guaranty dated on or about the date hereof from Guarantor in favor of Lender and any other document or instrument pursuant to which Guarantor guarantees to Lender all or any portion of the Obligations.
 “Hazardous Material” shall have the meaning set forth in the Deeds of Trust.
“Indebtedness” of a Person means such Person's (i) obligations for borrowed money, (ii) obligations representing the deferred purchase price of Property or services (other than accounts payable arising in the ordinary course of such Person's business payable on terms customary in the trade), (iii) obligations, whether or not assumed, secured by Liens or payable out of the proceeds or production from Property now or hereafter owned or acquired by such Person, (iv) obligations which are evidenced by notes, acceptances, or other instruments, (v) obligations of such Person to purchase securities or other Property arising out of or in connection with the sale of the same or substantially similar securities or Property, (vi) Capitalized Lease Obligations, (vii) obligations of such Person as an account party with respect to standby and commercial letters of credit, (viii) Contingent Obligations of such Person, (ix) Net Mark-to-Market Exposure under Rate Management Transactions and other financial contracts, and (xi) any other obligation for borrowed money or 

other financial accommodation which in accordance with GAAP as of the date of this Agreement would be shown as a liability on the consolidated balance sheet of such Person.
“Indemnified Liabilities” shall have the meaning set forth in Section 9.2. 
“Indemnitee” shall have the meaning set forth in Section 9.2.
“Lender” means American AgCredit, FLCA.
“Liabilities” means, with respect to any Person, at any time any determination thereof is to be made, the total of all of the liabilities of such Person which have been or properly should be classified as liabilities on the balance sheet in accordance with GAAP.
“Lien” means any lien, mortgage, pledge, assignment, security interest, charge or encumbrance of any kind, any conditional sale or other title retention agreement, any lease in the nature thereof, any Capitalized Lease, and any agreement to give any Lien.
“Loan” shall have the meaning set forth in Section 1.1.
“Loan Documents” means this Agreement (as amended from time to time), each such amendment, the Note, each Swap Agreement, the Deeds of Trust, the Guaranty, and all other agreements, documents, instruments, and certificates listed in any closing checklist of schedule of documents delivered in connection with this Agreement or at any time delivered by Borrower to Lender in connection with the Loan, as the same may be amended, restated, supplemented or modified from time to time.  
 “Losses” shall have the meaning set forth in Section 9.2.
“Material Adverse Change” means a material adverse change (i) in the Properties, Indebtedness, business, operations, prospects or condition (financial or other) of Borrower or Guarantor, or (ii) in the ability of Borrower to perform the obligations set forth in this Agreement, the Note, any of the Deeds of Trust or any other Loan Document.
“Maturity Date” shall have the meaning set forth in Section 2.1.
“Members” means any Person who is now or hereafter becomes a member of Borrower.
“Mortgaged Land” shall have the meaning set forth in Section 2.12.
“Net Mark-to-Market Exposure” of a Person means, as of any date of determination, the excess (if any) of all unrealized losses over all unrealized profits of such Person arising from Rate Management Transactions. “Unrealized losses” means the fair market value of the cost to such Person of replacing such Rate Management Transaction as of the date of determination (assuming the Rate Management Transaction were to be terminated as of that date), and “unrealized profits” means the fair market value of the gain to such Person of replacing such Rate Management Transaction as of the date of determination (assuming such Rate Management Transaction were to be terminated as of that date).

 “Note” shall have the meaning set forth in Section 1.1.
“Obligations” means (a) all loans, advances, Indebtedness, liabilities, and obligations, for the performance of covenants, tasks or duties or for payment of monetary amounts (whether or not such performance is then required or contingent, or amounts are liquidated or determinable and whether or not allowed as a claim in any bankruptcy or insolvency proceeding) owing by Borrower to Lender, and all covenants and duties regarding such amounts, of any kind or nature, present or future, whether or not evidenced by any note, agreement or other instrument, arising under any of the Loan Documents, and (b) all Swap Obligations. This term includes the Loan, all principal, interest, Fees, charges, expenses, attorneys' fees and any other sum chargeable by Lender to Borrower under this Agreement or any of the Loan Documents.
“Operating Lease” means any lease of an Asset by a Person as a lessee which would, in conformity with GAAP, not be required to be accounted for as a capital lease on the balance sheet of such Person.
“Open Prepayment Date” means the date that is six (6) months after the Closing Date.
“Orchard” shall have the meaning set forth in Section 2.13.  
“Permitted Equipment Financing Liens” means (a) Liens listed as equipment financing liens on the Disclosure Statement, and (b) purchase money Liens incurred after the Closing Date on any fixtures or equipment hereafter acquired or the assumption of any Lien on such property existing at the time of such acquisition, or a Lien incurred in connection with any conditional sale or other title retention agreement; provided that: 
(i)    any fixtures or equipment subject to any of the foregoing is acquired by Borrower in the ordinary course of its business and the Lien on any such property is created contemporaneously or substantially contemporaneously (but not in excess of 20 days) with such acquisition;
(ii)    each such Lien shall attach only to the property so acquired and fixed improvements thereon; and
(iii)    the incurrence of such Lien shall not cause the aggregate outstanding amount of Indebtedness secured by Permitted Equipment Financing Liens to exceed $1,000,000.  
“Permitted Liens” means:
(a)    With respect to any Mortgaged Land, any Lien or other encumbrance existing on the Closing Date and disclosed in Lender’s title insurance policy issued with respect to such Mortgaged Land;
(b)    With respect to any Mortgaged Land, easements, rights-of-way, restrictions, minor defects or other irregularities in title, and other similar encumbrances incurred in the ordinary course of business which, in the aggregate, are not substantial in amount, and which do not in any case 

materially detract from the value of the property subject thereto or interfere with the ordinary conduct of the businesses of Borrower and its Subsidiaries;
(c)    Liens for taxes or assessments, or governmental charges or claims, if not yet due and payable or if due and payable if they are being contested in good faith by appropriate proceedings and for which appropriate cash reserves are maintained;
(d)    Liens imposed by law, such as mechanic’s, materialmen’s, landlord’s, warehousemen’s, landlord’s and carrier’s Liens, and other similar Liens securing obligations incurred in the ordinary course of business which are not past due for more than 30 days, or which are being contested in good faith by appropriate proceedings and for which appropriate cash reserves have been established;
(e)    any attachment or judgment Lien arising in connection with court proceedings, provided that the execution or other enforcement of such Liens is effectively stayed and the claims thereby are being actively contested in good faith and by appropriate proceedings;
(f)    Liens in favor of Lender;
(g)    Liens on crops growing on the Mortgaged Land in favor of a Person providing financing for such crops; and 
(h)    Permitted Equipment Financing Liens.
“Permitted Swap Transaction” means an interest rate swap transaction between Borrower and a Swap Counterparty relating to the Loan.

“Person” means and include natural persons, corporations, limited partnerships, general partnerships, limited liability companies, joint stock companies, joint ventures, associations, companies, trusts, banks, trust companies, land trusts, business trusts, or other organizations, irrespective of whether they are legal entities, and governments and agencies and political subdivisions thereof.
“Prepayment Premium” shall have the meaning set forth in Section 2.5(c). 
“Property” of a Person means any and all property, whether real, personal, tangible, intangible, or mixed, of such Person, or other assets owned, leased or operated by such Person. 
“Rate Management Transaction” means any transaction (including an agreement with respect thereto) now existing or hereafter entered by Borrower or any Subsidiary and a Lender or any of its affiliates, which is a rate swap, basis swap, forward rate transaction, commodity swap, commodity option, equity or equity index swap, equity or equity index option, bond option, interest rate option, foreign exchange transaction, cap transaction, floor transaction, collar transaction, forward transaction, currency swap transaction, cross-currency rate swap transaction, currency option or any other similar transaction (including any option with respect to any of these transactions) 

or any combination thereof, whether linked to one or more interest rates, foreign currencies, commodity prices, equity prices or other financial measures.
“Rate Management Obligations” of a Person means any and all obligations of such Person, whether absolute or contingent and howsoever and whensoever created, arising, evidenced or acquired (including all renewals, extensions and modifications thereof and substitutions therefor), under (i) any and all Rate Management Transactions, and (ii) any and all cancellations, buy backs, reversals, terminations or assignments of any Rate Management Transactions.
“Restricted Payment” means, with respect to each and both of Borrower, and Guarantor, any dividend, payment, or other distribution of assets, properties, cash, rights, obligations, or securities on account of any shares of any class of such Person’s capital stock or any membership interest or other equity investment or purchase, redemption, or other acquisition for value of any shares of such Person’s capital stock or any membership or other equity interest or any warrants, rights or options to acquire such shares or membership or other equity interest, now or hereafter outstanding.
“Subsidiary” of a Person means (a) any corporation more than 50% of the outstanding securities having ordinary voting power of which shall at the time be owned or controlled, directly or indirectly, by such Person or by one or more of its Subsidiaries or by such Person and one or more of its Subsidiaries, or (b) any partnership, limited liability company, association, joint venture or similar business organization more than 50% of the ownership interests having ordinary voting power of which shall at the time be so owned or controlled. Unless otherwise expressly provided, all references herein to a “Subsidiary” means a Subsidiary of Borrower.
 “Swap Agreement” means, with respect to any Permitted Swap Transaction, (a) the ISDA Master Agreement, with accompanying schedules, confirmations, instruments, and other documents entered into between Borrower and a Swap Counterparty related to an ISDA Master Agreement between Borrower and the Swap Counterparty, and (b) any guaranty by Lender of any obligations owed by Borrower under or in connection with any Swap Agreement described in clause (a) of this definition. 
“Swap Counterparty” means CoBank, ACB, or such other Person approved by Lender as a Swap Counterparty.  
“Swap Obligations” means any amounts at any time owed by Borrower to any Swap Counterparty pursuant to any Swap Agreement and any obligations of Lender to any Swap Counterparty under a Swap Agreement to which Lender is a party.
 “Taxes” means all present or future taxes, levies, imposts, duties, deductions, withholdings (including backup withholding), assessments, fees or other charges imposed by any governmental authority, including any interest, additions to tax or penalties applicable thereto.
“Unmatured Event of Default” means the occurrence or existence of an event or circumstance that with the passage of time or the giving of notice or both would become an Event of Default.
[Signatures begin on following page.]

 
IN WITNESS WHEREOF, this Agreement has been duly executed as of the date first written above.
BORROWER:

Double Canyon Vineyards, LLC, a Delaware limited liability company

By: /s/ Shannon McLaren        
Name: Shannon McLaren
Title: Chief Financial Officer

A Fine Old Building, LLC, a Washington limited liability company

By: /s/ Shannon McLaren        
Name: Shannon McLaren
Title: Chief Financial Officer

LENDER:

American AgCredit, FLCA

By: /s/ Edwin A. Adams, Jr.        
Name: Edwin A. Adams, Jr.
Title: Vice President

[Signature Page Loan Agreement]

Exhibit A

FORM OF COMPLIANCE CERTIFICATE

To: American AgCredit, FLCA

This Compliance Certificate is furnished pursuant to that certain Loan Agreement dated as of June 29, 2017 (as amended, modified, renewed or extended from time to time, the “Agreement”) among Double Canyon Vineyards, LLC, a Delaware limited liability company, and A Fine Old Building, LLC, a Washington limited liability company (“Borrower”) and American AgCredit, FLCA (“Lender”). Unless otherwise defined herein, capitalized terms used in this Compliance Certificate have the meanings ascribed thereto in the Agreement.
THE UNDERSIGNED HEREBY CERTIFIES THAT:
1.I am the _______________ of Double Canyon Vineyards, LLC, and the ___________ of A Fine Old Building, LLC;
2.I have reviewed the terms of the Agreement and I have made, or have caused to be made under my supervision, a detailed review of the transactions and conditions of Borrower and of Guarantor and its Subsidiaries during the accounting period covered by the attached financial statements;
3.The examinations described in paragraph 2 did not disclose, and I have no knowledge of, the existence of any condition or event which constitutes an Unmatured Event of Default or Event of Default during or at the end of the accounting period covered by the attached financial statements or as of the date of this Certificate, except as set forth below; and
4.Schedule I attached hereto sets forth financial data and computations evidencing Guarantor's compliance with certain covenants of the Agreement, all of which data and computations are true, complete and correct.
5.Schedule II attached hereto sets forth the various reports and deliveries which are required at this time under the Loan Agreement and the other Loan Documents and the status of compliance. 
6.All real estate taxes assessed with respect to Mortgaged Land have been paid prior to delinquency.  Copies of all tax bills issued with respect to the Mortgaged Land that have been received by Borrower during the most recent fiscal quarter are attached as Schedule III, together with evidence of payment of any real estate taxes during such quarter. 

Described below are the exceptions, if any, to paragraph 3 by listing, in detail, the nature of the condition or event, the period during which it has existed and the action which Borrower or Guarantor has taken, is taking, or proposes to take with respect to each such condition or event:

The foregoing certifications, together with the computations set forth in Schedule I hereto and the financial statements delivered with this Certificate in support hereof, are made and delivered this    day of     ,    .

______________________________
______________, in his/her capacity as the ____________________ of Double Canyon Vineyards, LLC, a Delaware limited liability company, and the ____________________ of A Fine Old Building, LLC, a Washington limited liability company

Schedule I
Financial Covenant Calculations
[__________]
COMPLIANCE CERTIFICATE
FOR THE PERIOD ENDING: _________________
American AgCredit Term Loan

	
		
	Debt Service Coverage Ratio for the Then Most-Recently Ended Twelve Months
	 

	Consolidated Adjusted EBITDA
	 

	(a) Consolidated Net Income
	 

	(b) Plus Consolidated Interest Expense
	 

	(c) Plus income tax expense
	 

	(d) Plus depreciation expense
	 

	(e) Plus amortization expense
	 

	(f) Plus extra-ordinary non-cash charges
	 

	(g) Minus extraordinary non-cash items of income
	 

	Total Consolidated Adjusted EBITDA During Period:
	 

	Consolidated Debt Service:
	 

	(a) cash Consolidated Interest Expense
	 

	(b) scheduled principal payments
	 

	Total Consolidated Debt Service During Period:
	 

	Consolidated Debt Service Coverage Ratio:
	 

	(Consolidated Adjusted EBITDA Divided By Consolidated Debt Service)
	__ : 1.0

	Minimum Required Ratio: 1.5: 1.0
	 

Schedule II
Periodic Reporting
Attached hereto (check one):

	
		
	_______
	Financial statements and accompanying reports, certificates, letters and disclosures required under Section 6.4(a) of the Loan Agreement

	_______
	Financial statements and listing of Permitted Equipment Financing Liens required under Section 6.4(b) of the Loan Agreement

Schedule III
Real Estate Taxes and Assessments; Evidence of Payment
[Attached]

Disclosure statement

SCHEDULE 4.3
Section 4.3    Consents
Execution, delivery and performance by Borrower of the Loan Documents requires filing of a Form 8-k with the Securities and Exchange Commission. Borrower will file Form 8-k after the Closing Date consistent with applicable law.

Section 4.7    Equipment Owned by Third Parties

The following equipment is leased by Borrower from third parties: 

	
			
	Lease Description
	Lessor
	Term

	 
	 
	 

	 
	 
	 

The following equipment is located on the Mortgaged Land, but is owned by third parties:

Permitted Equipment Financing Liens

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