Document:

Exhibit 103_8-K

		
			 
		

		
			 
		

		
			GUARANTY
		

		
			This Guaranty (“Guaranty”), dated as of November 10, 2015, is executed by Crimson Wine Group, LTD, a Delaware corporation (“Guarantor”) in favor of American AgCredit, FLCA (“Lender”), with reference to the following facts:
		

		
			RECITALS
		

			
	
			
				A.  
			Pursuant to a  Loan Agreement of even date herewith by and among Pine Ridge Winery, LLC, a Delaware limited liability company as borrower (together with all other entities that may hereafter become obligors under the Loan Agreement, collectively, "Borrower") and American AgCredit, FLCA, as Lender (including all annexes, exhibits and schedules thereto, and as the same may be amended, restated, supplemented or otherwise modified from time to time, the “Loan Agreement”),  Lender has made a loan (the “Loan”) in the amount of Sixteen Million Dollars ($16,000,000) to Borrower.  The Loan is evidenced by the Loan Agreement and by a Term Note of even date herewith in the amount of Sixteen Million Dollars ($16,000,000), and which may be amended from time to time and certain other documents referred to the Loan Agreement as "Loan Documents."

			
	
			
				B.  
			Guarantor is the owner of one hundred percent (100%) of the equity of Borrower and will derive substantial benefit from Lender’s making the Loan to Borrower.  Without the support of this Guaranty from Guarantor, Borrower would not have been able to obtain the Loan in the amount and on the terms that are set forth in the Loan Agreement.  Guarantor understands that Lender would not have made the Loan to Borrower without the financial support of Guarantor, that the delivery of this Guaranty to Lender is a condition precedent to the making of the Loan, and Lender is making the Loan in reliance upon this Guaranty.

		
			AGREEMENT
		

		
			NOW THEREFORE, for good and valuable consideration, receipt of which is hereby acknowledged, and in order to induce Lender to make the Loan, Guarantor agrees, for the benefit of Lender, as follows:
		

			
	
			
				1.  
			Affirmation of Recitals.  The recitals set forth above are true and correct and are incorporated herein by this reference.

			
	
			
				2.  
			Defined Terms.  All capitalized terms that are not defined herein shall have the meanings ascribed to such terms in the Loan Agreement.

			
	
			
				3.  
			Certain Matters of Construction.  The terms “herein,” “hereof” and “hereunder” and other words of similar impact shall refer to this Guaranty as a whole and not to any particular section, paragraph or subdivision.  Any reference to a “Section” shall refer to the relevant Section to this Guaranty, unless specifically indicated to the contrary.  Any pronoun used shall be deemed to cover all genders.  The term “including” shall not be limiting or exclusive, unless specifically indicated to the contrary.  All references to statutes and related regulations shall include any amendments of same and any successor statutes and regulations.

		 

		

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				4.  
			Guaranty of Guaranteed Obligations.  Guarantor acknowledges that it is in Guarantor’s best interests to execute this Guaranty as Guarantor and will derive substantial direct and indirect benefits from the advances provided by Lender to Borrower under the Loan Agreement (the obligations of Borrower to Lender under the Loan Agreement and the other Loan Documents are hereafter referred to as the “Obligations” and the obligations of Guarantor to Lender hereunder are hereafter referred to as the “Guaranteed Obligations”).  Guarantor absolutely, irrevocably and unconditionally guarantees and promises to pay to Lender, and its successors, endorsees, transferees and assigns, on demand in lawful money of the United States of America, any and all Obligations of Borrower to Lender arising from or in connection with the Loan Documents.

			
	
			
				5.  
			Independent Obligations.  Guarantor’s obligations hereunder are independent of the Obligations of Borrower, any other guarantor or any other person, and Lender may enforce any of its rights hereunder independently of any other right or remedy that Lender may at any time hold with respect to the Guaranteed Obligations or any security or other guaranty therefor.  This Guaranty is a guaranty of payment when due and not of collection.  Without limiting the generality of the foregoing, Lender may bring a separate action against Guarantor without first proceeding against Borrower, any other guarantor, any other person or any security held by Lender and regardless of whether Borrower, any other guarantor or any other person is joined in any such action.  Guarantor’s liability hereunder shall at all times remain effective with respect to the full amount of the Guaranteed Obligations, notwithstanding any limitations on the liability of Borrower to Lender contained in the Loan Agreement or elsewhere.  Lender’s rights hereunder shall not be exhausted by any action taken by Lender until all Guaranteed Obligations have been fully and finally paid and performed.

			
	
			
				6.  
			Authority to Modify Guaranteed Obligations.  Guarantor acknowledges that the sum of the Guaranteed Obligations may significantly vary from time to time.  Guarantor authorizes Lender, at any time and from time to time without notice and without affecting the liability of Guarantor hereunder, to alter the terms of all or any part of the Guaranteed Obligations and any security and guaranties therefor including modification of times for payment and rates of interest.

			
	
			
				7.  
			Demand by Lender. In addition to the terms of this Guaranty set forth in Sections 4, 5, and 6, and in no manner imposing any limitation on such terms, it is expressly understood and agreed that, if the Obligations are declared to be or otherwise become immediately due and payable, then Guarantor shall, upon demand in writing therefor by Lender to Guarantor, immediately pay the Guaranteed Obligations to Lender.  Payment by Guarantor shall be made to Lender to be credited and applied upon the Obligations, in immediately available funds, to an account designated by Lender or at any address that may be specified in writing from time to time by Lender within the continental United States.  This section shall in no way affect Lender’s right to resort to any collateral that may be held by Lender (the “Collateral”) without demand, as provided in Section 18.2.  Any payment received by Lender with respect to the Obligations shall reduce the Guaranteed Obligations by the amount of such payment.

		 

		

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				8.  
			Guarantor Waivers.  In addition to any other waivers provided in this Guaranty, Guarantor hereby waives each of the following, to the fullest extent allowed by law:

			
	
			
				8.1  
			Guarantor expressly waives any right it may now or in the future have to require Lender to, and Lender shall not have any liability to, first pursue or enforce against Borrower, the Collateral, or any other security, guaranty, or pledge that may now or hereafter be held by Lender for the Obligations or for the Guaranteed Obligations, or to apply such security, guaranty, or pledge to the Obligations or to the Guaranteed Obligations (except with respect to funds or proceeds thereof or received with respect thereto), or to pursue any other remedy in Lender’s power that Guarantor may or may not be able to pursue itself and that may lighten Guarantor’s burden, before proceeding against the Collateral.  Guarantor shall remain liable for the Guaranteed Obligations, notwithstanding any judgment Lender may obtain against Borrower, any other guarantor of the Obligations, or any other person, or any modification, extension, or renewal with respect thereto.

			
	
			
				8.2  
			Guarantor has entered into this Guaranty based solely upon its independent knowledge of Borrower’s financial condition and Guarantor assumes full responsibility for obtaining any further information with respect to Borrower or the conduct of its business.  Guarantor represents that it is now, and during the terms of this Guaranty will be, responsible for ascertaining the financial condition of Borrower.  Guarantor hereby waives any duty on the part of Lender to disclose to Guarantor, and agrees that it is not relying upon nor expecting Lender to disclose to it, any fact known or hereafter known by Lender relating to the operation or condition of Borrower or its business.  Guarantor knowingly accepts the full range of risk encompassed in a contract of guaranty, which risk includes the possibility that Borrower may incur indebtedness after its financial condition or its ability to pay its debts as they mature has deteriorated.

			
	
			
				8.3  
			Lender shall not be under any liability to marshal any assets in favor of Guarantor or in payment of any or all of the Obligations or Guaranteed Obligations.

			
	
			
				8.4  
			Guarantor hereby waives:  (i) presentment, demand, protest, notice of acceleration, dishonor, non-payment, protest, or any delay related thereto, with respect to any instruments or documents relating to the Obligations or the Guaranteed Obligations, except as specifically provided in Section 7; (ii) notice of any extension, modification, renewal, or amendment of any of the terms of the Loan Agreement or any other Loan Document relating to the Obligations or the Guaranteed Obligations; (iii) notice of the occurrence of any Event of Default with respect to the Obligations, the Guaranteed Obligations, or the Collateral; and (iv) notice of any exercise or non-exercise by Lender of any right, power, or remedy with respect to the Obligations, the Collateral, or the Guaranteed Obligations.

		
			If Lender may, under applicable law, proceed to realize its benefits under any Loan Document giving Lender a lien upon any Collateral, either by judicial foreclosure or by nonjudicial sale or enforcement, Lender may, at its sole option, determine which of its remedies or rights it may pursue without affecting any of its rights and remedies under this Guaranty.  If, in the exercise of any of its rights and remedies, Lender shall forfeit any of its rights or remedies under any Loan Document, including obtaining a deficiency judgment against Borrower or any other person, whether because of any applicable laws pertaining to “election of remedies,” anti-
		

		 

		

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		deficiency rules, or the like, Guarantor hereby consents to such action by Lender and waives any claim based upon such action.  Any election of remedies that results in the denial or impairment of the right of Lender to seek a deficiency judgment against Borrower shall not impair Guarantor’s obligations under this Guaranty.  In the event Lender shall bid at any foreclosure or trustee’s sale or at any public or private sale permitted by law or the Loan Documents, Lender may bid all or less than the amount of the Obligations or the Guaranteed Obligations and the amount of such bid need not be paid by Lender but shall be credited and applied as set forth in Section 19.  The amount of the successful bid at any such sale, whether Lender or any other party (including Guarantor) is the successful bidder, shall be deemed to be prima facie evidence of the fair market value of the Collateral and the amount remaining after application of such bid amount in the manner set forth in Section 19 shall be deemed to be prima facie evidence of the amount of the Obligations guaranteed under this Guaranty.
		

			
	
			
				8.5  
			Until payment in full of the Guaranteed Obligations, Guarantor shall have no right of subrogation, reimbursement, indemnity, or contribution, and shall have no recourse with respect to the Collateral or any lien held therefor, all of which Guarantor expressly waives.

			
	
			
				8.6  
			Guarantor agrees and represents that the Obligations are and shall be incurred by Borrower, and that the Guaranteed Obligations are and shall be incurred by Guarantor, for business and commercial purposes only.  Guarantor agrees that any claim of Lender against Guarantor arising out of this Guaranty arises out of the conduct by Guarantor of its trade, business, or profession.  Guarantor undertakes all the risks encompassed in the Loan Agreement and the other Loan Documents as they may be now or are hereafter agreed upon by Lender and Borrower.  Lender, in such manner and upon such terms and at such time as it deems best, and with or without notice to Guarantor, may release, add, subordinate or substitute security for the Obligations or the Guaranteed Obligations.

			
	
			
				8.7  
			Guarantor waives and agrees that it shall not at any time insist upon, plead, or in any manner whatever claim or take the benefit or advantage of, any appraisal, valuation, stay, extension, or redemption laws, or exemption, whether now or at any time hereafter in force, which may delay, prevent, or otherwise affect the performance by Guarantor of the Guaranteed Obligations or the enforcement by Lender of this Guaranty.

			
	
			
				8.8  
			A separate action or actions may be brought under this Guaranty or any of the Loan Documents and prosecuted by Lender against Guarantor whether or not an action is brought against Borrower, or whether Borrower are joined in any such action or actions.  Without limiting the generality of the foregoing, Guarantor expressly waives the benefit of any statute of limitation affecting the Obligations and expressly agrees that the running of a period of limitation on, or Lender’s delay or omission in, any action by Lender against Borrower or for the foreclosure of any lien or the enforcement of any security interest in the Collateral shall not exonerate or affect Guarantor’s liability to pay and perform the Guaranteed Obligations.

		 

		

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				9.  
			Waivers of Defenses Regarding Real Property Security.  

			
	
			
				9.1  
			Guarantor understands and acknowledges the following:

			
	
			
				(a)  
			If Borrower defaults in the payment or performance of the Obligations and Guarantor pays to Lender all or part of the Obligations, Guarantor would, except to the extent limited or waived pursuant to Section 8.5, have a right to proceed against Borrower to the extent of the Obligations so paid by Guarantor and to have the benefit of any security held by Lender for the Obligations to the extent of the Obligations so paid by Guarantor.  Such right is commonly known as the “right of subrogation.”

			
	
			
				(b)  
			If Lender forecloses on Borrower’s real property by means of a trustee’s sale under a power of sale contained in a deed of trust or other security instrument, applicable statutory and decisional law, including California Code of Civil Procedure (“CCP”) Section 580a and 580d, might limit or prohibit both Lender and Guarantor from recovering any further payment from Borrower personally on account of the Obligations or limit such recovery.  This means that Guarantor’s right to proceed against Borrower for any amounts Guarantor was required to pay under the Guaranty would then be impaired or destroyed by Lender’s election to complete a trustee’s sale of Borrower’s real property.  Lender’s election to complete a trustee’s sale of Borrower’s real property could thus give Guarantor a defense to its obligations under the Guaranty, in addition to any statutory or decisional law protections against a personal judgment that benefits Guarantor directly.

			
	
			
				(c)  
			If Lender forecloses on Borrower’s real property by means of a judicial foreclosure, applicable statutory and decisional law, including CCP Section 726(b), might limit the amount that both Lender and Guarantor could collect from Borrower personally, and thus such an action by Lender might give Guarantor a complete or partial defense to its obligations under the Guaranty, in addition to any statutory or decisional law protections against a personal judgment that benefits Guarantor directly.

			
	
			
				(d)  
			Lender has given only a basic description above of Guarantor’s rights against Borrower, the limitation or destruction of those rights by Lender’s actions in foreclosing on Borrower’s real property, and the potential claims or defenses that Guarantor could therefore raise against Lender’s demand for payment on the Guaranty, in addition to any statutory or decisional law protections against a personal judgment that benefits Guarantor directly.  Lender has advised Guarantor that the relationships of Borrower, Lender, and Guarantor under applicable real property law are complex issues such that Guarantor may wish to retain counsel to review these issues and review the obligations that Guarantor is undertaking under the Guaranty, as well as the waivers of rights that Guarantor will make pursuant to the provisions set forth below.

			
	
			
				(e)  
			Lender desires the right to foreclose against Borrower’s real property either by trustee’s sale or by judicial foreclosure, as well as to pursue all Lender’s rights and remedies against Borrower and Guarantor, without giving rise to any claims or defenses by Guarantor under the Guaranty, including any defense that Lender’s foreclosure of Borrower’s real property has limited or destroyed Guarantor’s rights against Borrower.  For these reasons, Lender requires 
		

		 

		

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			Guarantor to waive its rights and defenses, as described basically above, and in the form stated below.

			
	
			
				9.2  
			Guarantor expressly, knowingly and intentionally waives and relinquishes the following of its rights:

			
	
			
				(a)  
			all rights, defenses or benefits Guarantor might have arising out of an election of foreclosure by Lender even though that election of remedies, such as a nonjudicial foreclosure with respect to security for a Guaranteed Obligation, has, by the operation of CCP section 580d or otherwise, destroyed Guarantor’s rights as against Borrower of subrogation, reimbursement, indemnity, or contribution;

			
	
			
				(b)  
			all rights, defenses or benefits Guarantor might have, whether directly or derivatively, under the following California statutes and decisions:  CCP sections 580a, 580d, 726, 726(b), or their application in case law, including the case of Union Bank v. Gradsky; and

			
	
			
				(c)  
			all rights, defenses or benefits Guarantor might have directly under any applicable state statutory or decisional law limiting or protecting Guarantor against a personal judgment on the Guaranty after Lender’s nonjudicial foreclosure of the Borrower’s real property.

			
	
			
				9.3  
			In particular, Guarantor agrees that the Guaranty will remain effective on its terms and that:

			
	
			
				(a)  
			Guarantor will be required to pay in full the unpaid amount of any Obligations to Lender even if Lender forecloses on Borrower’s real property by trustee’s sale and the effect of such sale is to prevent Guarantor from taking action against Borrower to recover amounts paid by Guarantor to Lender under the Guaranty or otherwise limits or destroys Guarantor’s rights, including rights of subrogation;

			
	
			
				(b)  
			Guarantor will be required to pay in full the unpaid amount of any Obligations to Lender even if Lender forecloses on Borrower’s real property by judicial foreclosure action and Guarantor’s rights against Borrower are thereby limited by the operation of applicable statutory and decisional law.

			
	
			
				10.  
			Waivers of Defenses.   Guarantor waives any defense based upon or arising by reason of:  (a) any disability or other defense of Borrower or any other person; (b) the cessation of liability or limitation from any cause whatsoever of the Obligations or any portion thereof, other than payment in full or payment of such portion; (c) any lack of authority of any agent or other person acting or purporting to act on behalf of Borrower, or any defect in the formation of Borrower; (d) the application by Borrower of the proceeds of the Obligations or any other obligation of Borrower or Lender for purposes other than the purposes represented to, or intended or understood by Lender; (e) any act or omission by Lender that directly or indirectly results in or aids the discharge of Borrower or any portion of the Obligations or any other obligation of Borrower to Lender by operation of law or otherwise; or (f) any modification of the Obligations or any other obligation of Borrower to Lender in any form whatsoever, including the renewal, extension, acceleration or other change in time for payment of the Obligations, or other change in the terms of the Obligations or any part thereof, including increase or decrease of the rate of interest thereon.

		

		

		 

		

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		Without limiting the generality of the foregoing, Guarantor waives any defenses or rights arising under California Civil Code sections 2787 through 2855, inclusive, and Sections 2899 and 3433.
		

			
	
			
				11.  
			Reasonableness and Effect of Waivers.  Guarantor warrants and agrees that each of the waivers set forth in this Guaranty is made with full knowledge of its significance and consequences and that, under the circumstances, the waivers are reasonable and not contrary to public policy or law.  If any of such waivers are determined to be contrary to any applicable law or public policy, such waivers shall be effective only to the maximum extent permitted by law.

			
	
			
				12.  
			Continuing Guaranty.  Guarantor agrees that (a) this is a continuing guaranty, (b) the Guaranteed Obligations hereunder shall extend to each and every extension or renewal, if any, of the Loan Documents, regardless of whether the Guaranteed Obligations may, in successive transactions, be paid, repaid, advanced, or renewed from time to time, and (c) this Guaranty shall remain in full force and effect until the Guaranteed Obligations are paid in full and have been completely satisfied, and shall not be impaired or affected by, or be deemed to be satisfied by, nor shall Guarantor or the Collateral be exonerated, discharged, or released by, any of the following events:

			
	
			
				12.1  
			Lender’s exercise or enforcement of, or failure or delay in exercising or enforcing, legal proceedings to collect the Obligations or any power, right, or remedy with respect to any of the Obligations, the Collateral, or the Guaranteed Obligations including:  (i) any action or inaction of Lender to perfect, protect, or enforce any security interest in any Collateral; (ii) any impairment or invalidity of the Collateral or any suspension of Lender’s right to enforce against Borrower any Obligations, any Guaranteed Obligations, or any security interest in or lien upon the Collateral; or (iii) any change in the time, manner, or place of payment of, or in any other term of, any or all of the Obligations or the Guaranteed Obligations, or any other amendment to or waiver of the Loan Agreement, any other Loan Document, or any other agreement or instrument governing or evidencing any of the Obligations or the Guaranteed Obligations;

			
	
			
				12.2  
			insolvency, bankruptcy, reorganization, arrangement, adjustment, composition, assignment for the benefit of creditors, appointment of a receiver or trustee for all or any part of Borrower’s or Guarantor’s assets, liquidation, winding-up, or dissolution of Borrower or Guarantor;

			
	
			
				12.3  
			any limitation, discharge, cessation, or partial satisfaction of the Obligations, of any Guaranteed Obligations, whether by operation of any statute, regulation, or rule of law, or otherwise, regardless of the intervention or omission of Lender or any invalidity, voidability, unenforceability, or irregularity, or future change to or amendment of, in whole or in part, the Loan Agreement, this Guaranty, any other Loan Document, or any other document evidencing any Obligations;

			
	
			
				12.4  
			any merger, acquisition, consolidation or change in structure of Borrower or Guarantor; or any sale, lease, transfer, or other disposition of any or all of the assets or shares of Borrower or Guarantor;

		 

		

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				12.5  
			any assignment or other transfer, in whole or in part, of Lender’s interest in and rights under the Loan Agreement or any other Loan Document, including this Guaranty, or of Lender’s interest in the Obligations, the Guaranteed Obligations, or the Collateral;

			
	
			
				12.6  
			any claim, defense, counterclaim, or set-off, other than (i) any defense of prior performance or (ii) any defense based on any applicable provision of the Uniform Commercial Code requiring that the Collateral be disposed of in a commercially reasonable manner, which Borrower or Guarantor may have or assert, including any defense of incapacity, disability, or lack of corporate or other authority to execute any documents relating to the Obligations, the Guaranteed Obligations, or the Collateral;

			
	
			
				12.7  
			any cancellation, renunciation, or surrender of any debt instrument evidencing the Obligations or the Guaranteed Obligations;

			
	
			
				12.8  
			Lender’s vote, claim, distribution, election, acceptance, action, or inaction in any bankruptcy or reorganization case related to the Collateral, the Obligations, or the Guaranteed Obligations;

			
	
			
				12.9  
			any other action or circumstances that might otherwise constitute a defense available to, or a legal or equitable discharge of, any surety, guarantor or pledgor; or

			
	
			
				12.10  
			the fact that any of the Obligations or the Guaranteed Obligations may become due or payable in connection with or by reason of any agreement or transaction that may be illegal, invalid, or unenforceable in whole or in part; it being agreed by Guarantor that the Guaranteed Obligations shall not be discharged.

			
	
			
				13.  
			Subordination.

			
	
			
				13.1  
			Guarantor hereby agrees that, until the date of termination of the Loan under the Loan Agreement (the “Termination Date”), all obligations and all indebtedness of Borrower to Guarantor, including any and all present and future indebtedness regardless of its nature or manner of origination now or hereafter to become due and owing by Borrower to Guarantor (collectively, the “Subordinated Indebtedness”), are hereby subordinated and postponed (except as set forth in Section 13.3 below) and shall be inferior, in all respects, to the Obligations.

			
	
			
				13.2  
			In no circumstance shall any Subordinated Indebtedness be entitled to any collateral security; provided, that in the event any such collateral security exists, Guarantor hereby agrees that any now existing or hereafter arising Lien upon any of the assets of Borrower in favor of Guarantor, whether created by contract, assignment, subrogation, reimbursement, indemnity, operation of law, principles of equity or otherwise, shall be junior and inferior to, and is hereby subordinated in priority to any now existing or hereafter arising Liens in favor of Lender in and against the Collateral, regardless of the time, manner or order of creation, attachment or perfection of the respective Liens.

			
	
			
				13.3  
			Except as permitted in the Loan Agreement, Guarantor hereby agrees: (i) that it shall not assert, collect, accept payment on or enforce any of the Subordinated 
		

		 

		

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			Indebtedness or take collateral or other security to secure payment of the Subordinated Indebtedness until the Termination Date; (ii) that it shall not demand payment of, accelerate the maturity of, or declare a default or event of default under the Subordinated Indebtedness until the Termination Date; (iii) that is shall not cause or permit Borrower to make or give, and Guarantor shall not receive or accept, payment in any form (whether direct or indirect, including by transfer to an Affiliate or Subsidiary of Borrower or Guarantor) on account of the Subordinated Indebtedness, make any transfers in respect of the Subordinated Indebtedness without the express prior written consent of Lender (which consent may be withheld for any reason in Lender’s sole discretion), or give any collateral security for the Subordinated Indebtedness; and (iv) that any payment, transfer, or collateral security so made or given by Borrower and received or accepted by Guarantor, without the express prior written consent of Lender, shall be held in trust by Guarantor for the account of Lender, and Guarantor shall immediately turn over, in kind, any such payment to Lender for application in reduction of, or (in the case of property other than cash) as security for, the Guaranteed Obligations.  

			
	
			
				14.  
			Subrogation.  Guarantor will not exercise any rights which it may acquire by way of subrogation under this Guaranty, by any payment made hereunder or otherwise, until all the Obligations shall have been paid in full.  If any amount is paid to Guarantor on account of such subrogation rights at any time when all the Obligations shall not have been paid in full, such amount shall be held in trust for the benefit of Lender, and shall forthwith be paid to Lender to be credited and applied upon the Obligations, whether matured or unmatured, in accordance with the terms of the Loan Documents.  If (i) Guarantor makes payment to Lender of all or any part of the Obligations and (ii) all the Obligations are paid in full, Lender shall, at Guarantor’s request, execute and deliver to Guarantor appropriate documents, without recourse and without representation or warranty, necessary to evidence the transfer by subrogation to Guarantor of an interest in the Obligations resulting from such payment by Guarantor.  Nothing herein limits any right of Guarantor to pay all Obligations in full and thereafter become subrogated to the position of Lender.

			
	
			
				15.  
			Limit of Liability.  The obligations of Guarantor under this Guaranty shall be limited to an aggregate amount equal to the largest amount that would not render its obligations under this Guaranty subject to avoidance under Section 548 of the Bankruptcy Code or any comparable provisions of any applicable state law.

			
	
			
				16.  
			Representations and Warranties.  To induce Lender to make advances under the Loan Documents, Guarantor makes the following representations and warranties, each of which shall survive the execution and delivery of this Guaranty:

			
	
			
				16.1  
			Organization.  Guarantor is duly formed under the laws of its formation and is in good standing in the State of California and in all jurisdictions in which it does business or the ownership of its properties requires such qualification, except to the extent that the failure to be so qualified would not have a material adverse effect on the properties, business, results of operations or financial or other condition of Guarantor.

			
	
			
				16.2  
			Relationship of Parties.  (a) Guarantor has received copies of the Loan Agreement and the other Loan Documents and is familiar with and fully understands all of their terms and conditions; (b) Lender has not made any representations or warranties to 
		

		 

		

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			Guarantor regarding the creditworthiness of Borrower or the prospects of repayment from sources other than Borrower; (c) this Guaranty is executed at the request of Borrower; (d) Guarantor has established adequate means of obtaining from Borrower on a continuing basis financial and other information pertaining to the business of Borrower; and (e) Guarantor assumes full responsibility for keeping fully informed with respect to the business, operation, condition and assets of Borrower.  Guarantor hereby agrees that Lender shall have no duty to disclose or report to Guarantor any information now or hereafter known to Lender relating to the business, operation, condition and assets of Borrower.  Lender shall have no duty to inquire into the authority or powers of Borrower or any officer, employee or agent of Borrower with regard to any Guaranteed Obligations, and all Guaranteed Obligations made or created in good faith reliance upon the professed exercise of any such authority or powers shall be guaranteed hereunder.

			
	
			
				16.3  
			Execution, Delivery and Performance of Guaranty.  The execution, delivery, and performance by Guarantor of all of its obligations under this Guaranty have been duly authorized by all necessary action and do not and will not:

			
	
			
				(a)  
			result in or require the creation or imposition of any lien, right of others, or other encumbrance of any nature (other than under this Guaranty and any related security documents) upon or with respect to any property now owned or leased or hereafter acquired by Guarantor;

			
	
			
				(b)  
			violate any provision of any law, regulation, judgment, decree or award presently in effect having applicability to Guarantor;

			
	
			
				(c)  
			result in a breach of, constitute a default under, or cause or permit the acceleration of any obligation owed under, any indenture, loan agreement, lease, or any other agreement or instrument, to which Guarantor is a party or by which Guarantor or any of its  property is bound or affected, except where such breach, default or acceleration would not have a material adverse effect;

			
	
			
				(d)  
			require any consent or approval not heretofore obtained; or

			
	
			
				(e)  
			violate any provision of, or require any consent under, any agreement applicable to Guarantor.

			
	
			
				16.4  
			Enforceability.  This Guaranty, when executed and delivered, shall constitute a valid and binding obligation of Guarantor which is enforceable in accordance with its terms, except to the extent that such enforcement may be limited by applicable bankruptcy, insolvency and other similar laws affecting creditors rights generally or by principles of equity pertaining to the availability of equitable remedies.

			
	
			
				16.5  
			Compliance with Laws.  Guarantor has complied in all material respects with all laws, regulations and requirements applicable to its business and has obtained all authorizations, consents, approvals, orders, licenses, exemptions from, and has accomplished all filings or registrations or qualifications with, any court or governmental department, public body, authority, commission, board, bureau, agency or instrumentality, that may be necessary for the transaction of its business, except where the failure to do so would not have a material adverse effect.

		 

		

			10

		

		

			 

		

 

			
	
			
				16.6  
			Guarantor’s Addresses.  Guarantor’s name and address are accurately set forth in Section 22.9.

			
	
			
				16.7  
			No Offset, Defense, or Counterclaim. Guarantor represents, warrants, and agrees that, as of the date of this Guaranty, the Guaranteed Obligations are not subject to any offset or defense against Lender or Borrower of any kind, and Guarantor specifically waives its right to assert any such defense or right of offset.  Guarantor further agrees that the Guaranteed Obligations shall not be subject to any counterclaims, offsets, or defenses against Lender or Borrower that may arise in the future, except for (a) any defense of prior performance or payment, (b) any defense based on any applicable provision of the Uniform Commercial Code requiring that the Collateral be disposed of in a commercially reasonable manner, which Borrower or Guarantor may have or assert, or (c) applicable provisions of the laws of the State of California governing the disposal of the Collateral upon foreclosure of the liens created thereon by any Security Agreement in favor of Lender.

			
	
			
				16.8  
			Pending or Threatened Litigation.  There are no actions, suits, proceedings or other litigation (including proceedings by or before any arbitrator or governmental authority) pending, or to the knowledge of Guarantor, threatened against Guarantor, which (a) challenge the validity or propriety of this Guaranty or of the secured financing transactions contemplated under the Loan Agreement and the other Loan Documents, (b) could, if adversely determined, have a material adverse effect on the properties, businesses, results of operations or financial or other condition of Guarantor, or (c) could materially affect the ability of Guarantor to perform its obligations under this Guaranty.

			
	
			
				16.9  
			Consultation with Legal Counsel.  Guarantor acknowledges that the waivers in Sections 8, 9 and 10 herein are a material inducement to Lender to make the advances under the Loan Documents and that Lender is relying upon the foregoing waivers in its future dealings with Borrower.  Guarantor warrants and represents that it has reviewed the foregoing waivers with its legal counsel and that, after such review with its legal counsel, Guarantor has agreed to the foregoing waivers.

			
	
			
				17.  
			COVENANTS

			
	
			
				17.1  
			Costs and Expenses of Enforcement.  Guarantor agrees to pay to Lender, on demand, all out-of-pocket costs and expenses, including reasonable attorneys’ fees, incurred by Lender in exercising any right, power or remedy conferred by this Guaranty, or in the enforcement of this Guaranty, whether or not any action is filed in connection therewith. Until paid to Lender, such amounts shall bear interest, commencing with Lender’s demand therefor, at the Default Rate set forth in the Loan Agreement.

			
	
			
				18.  
			DEFAULTS AND REMEDIES

			
	
			
				18.1  
			Events of Default.  It shall be an “Event of Default” hereunder upon the occurrence of any one or more of the following events (regardless of the reason therefor):

			
	
			
				(a)  
			any Event of Default occurs under the Loan Agreement or any other Loan Document;

		 

		

			11

		

		

			 

		

 

			
	
			
				(b)  
			Guarantor fails or neglects to perform, keep or observe any material provision of this Guaranty or any of the other Loan Documents to which it is a party;

			
	
			
				(c)  
			any material representation or warranty of Guarantor made under this Guaranty or in any Loan Document or in any written statement pursuant thereto or hereto, report, financial statement, or certificate made or delivered to Lender by Guarantor is untrue or incorrect, as of the date when made or deemed made;

			
	
			
				(d)  
			Guarantor renounces or revokes, or attempts to renounce or revoke, this Guaranty;

			
	
			
				(e)  
			(i) any of the assets of Guarantor are attached, seized, levied upon, or subjected to a writ or distress warrant, or come within the possession of any receiver, trustee, custodian, or assignee for the benefit of creditors of Guarantor and remain unstayed or undismissed for thirty (30) consecutive days, (ii) any person other than Guarantor applies for the appointment of a receiver, trustee or custodian for any of Guarantor’s assets and such application remains unstayed or undismissed for thirty (30) consecutive days, or (iii) Guarantor conceals, removes, or permits to be concealed or removed, any part of its property, with intent to hinder, delay, or defraud its creditors or any of them or makes or suffers a transfer of any of its property or the incurring of an obligation which may reasonably be expected to be fraudulent under any bankruptcy, fraudulent conveyance or other similar law, in each case only to the extent any of the events set forth in clauses (i), (ii) or (iii) would, individually or in the aggregate, have a material adverse effect on Guarantor;

			
	
			
				(f)  
			a case or proceeding has been commenced against Guarantor in a court having competent jurisdiction seeking a decree or order (i) under the Bankruptcy Code, or any other applicable federal, state, or foreign bankruptcy or other similar law, (ii) appointing a custodian, receiver, liquidator, assignee, trustee or sequestrator (or similar official) of Guarantor, of any substantial part of its properties, or (iii) ordering the winding-up or liquidation of the affairs of Guarantor and such case or proceeding shall remain undismissed or unstayed for ninety (90) consecutive days or such court shall enter a decree or order granting the relief sought in such case or proceeding;

			
	
			
				(g)  
			Guarantor (i) files a petition seeking relief under the Bankruptcy Code, or any other applicable federal, state or foreign bankruptcy or other similar law, (ii) consents to the institution of proceedings thereunder or to the filing of any such petition or to the appointment of or taking possession by a custodian, receiver, liquidator, assignee, trustee, or sequestrator (or similar official) of Guarantor or of any substantial part of its properties, (iii) fails generally to pay its debts as such debts become due, or (iv) takes any corporate or similar action in furtherance of any such action;

			
	
			
				18.2  
			Remedies.  Upon the occurrence of an Event of Default hereunder and the continuation of such Event of Default after any applicable cure period provided therefor, Lender may declare all of the Guaranteed Obligations, immediately and without demand, notice or legal process of any kind, to be, and such Guaranteed Obligations shall immediately become, due and payable, and then, or at any subsequent time, Lender may exercise any or all of its rights and remedies under this Guaranty, the Loan Agreement, and any other Loan Documents, and under applicable law, and may, in addition

		 

		

			12

		

		

			 

		

 

			
	
			
				(a)  
			make demand upon Guarantor for the payment of the Guaranteed Obligations;

			
	
			
				(b)  
			resort to the Collateral for payment of the Guaranteed Obligations, without notice, declaration, or demand by Lender to the extent not prohibited by applicable law;

		
			provided, that upon the occurrence of an Event of Default specified in clauses (e) or (f) of Section 18.1, the Guaranteed Obligations shall become immediately due and payable without declaration, notice or demand by Lender.
		

			
	
			
				19.  
			Application of Payments.  Any payment made by Guarantor under this Guaranty may be applied by Lender, in Lender’s sole discretion, first, to the satisfaction of Guarantor’s indemnification liabilities pursuant to Section 20, and then, in any order that Lender, in its sole discretion, may determine.

			
	
			
				20.  
			Indemnification.  Guarantor agrees to indemnify and hold Lender harmless from and against any liabilities, claims and damages, including reasonable costs, attorneys’ fees, and disbursements, and other expenses incurred or arising by reason of the taking or the failure to take action by Lender, in good faith, in respect of any transaction effected under this Guaranty, including any action to enforce payment of the Guaranteed Obligations, or in connection with any liens upon the Collateral.  The liabilities of Guarantor under this Section 20 shall survive the termination of this Guaranty.

			
	
			
				21.  
			Reinstatement.  This Guaranty shall remain in full force and effect and continue to be effective, as the case may be, if at any time payment and performance of the Obligations under the Loan Documents or the Guaranteed Obligations, or any part thereof, is, pursuant to applicable law, avoided, rescinded or reduced in amount, or must otherwise be restored or returned by Lender, or any obligee of the Obligations under the Loan Documents or the Guaranteed Obligations, whether as a “voidable preference,” “fraudulent conveyance,” or otherwise, all as though such payment or performance had not been made.  In the event that any payment, or any part thereof, is avoided, rescinded, reduced, restored, or returned, the Obligations under the Loan Documents or the Guaranteed Obligations, as the case may be, shall be reinstated and deemed reduced only by such amount paid and not so avoided, rescinded, reduced, restored, or returned.

			
	
			
				22.  
			Miscellaneous.

			
	
			
				22.1  
			Cumulative Remedies; No Waiver.  The rights, powers and remedies of Lender hereunder are cumulative and not exclusive of any other right, power or remedy which Lender would otherwise have.  No failure or delay on the part of Lender in exercising any such right, power or remedy may be, or may be deemed to be, a waiver thereof; nor may any single or partial exercise of any such right, power or remedy preclude any other or further exercise thereof or the exercise of any other right, power or remedy hereunder or under the Loan Documents.

			
	
			
				22.2  
			Binding Agreement; Assignment; Amendment.  This Guaranty and the terms, covenants and conditions hereof shall be binding upon and inure to the benefit of Guarantor, Lender and their respective successors and assigns, except that Guarantor shall not have power or authority to transfer, convey or assign this Guaranty or any right or obligation hereunder without the prior written consent of Lender (and any attempt to do so shall be void).  
		

		 

		

			13

		

		

			 

		

 

			Guarantor consents to Lender’s assignment of its interests hereunder to any person, in accordance with the terms of the Loan Documents.  Neither this Guaranty nor any provision hereof may be amended, modified, waived, discharged or terminated except by an instrument in writing duly signed by or on behalf of Lender.

			
	
			
				22.3  
			Consent to Loan Documents.  Guarantor hereby acknowledges that it has received copies of, and consents to, all of the Loan Documents.

			
	
			
				22.4  
			Counterparts; Delivery by Facsimile or Electronic Transmission.  This Guaranty may be executed in any number of counterparts and any party hereto may execute any counterpart, each of which when executed and delivered shall be deemed to be an original and all of which, taken together, shall be deemed to be but one and the same instrument.    Signature pages hereto may be delivered via facsimile or electronic transmission and any copy of this Guaranty containing such a signature page shall be considered an original for all purposes hereunder.

			
	
			
				22.5  
			Severability.  In the event that any one or more of the provisions contained in this Guaranty shall be determined to be invalid, illegal, or unenforceable in any respect for any reason, the validity, legality, and enforceability of any such provision or provisions in every other respect, and the remaining provisions of this Guaranty, shall not be in any way impaired.

			
	
			
				22.6  
			Section Titles.  The section titles contained in this Guaranty are and shall be without substantive meaning or context of any kind whatsoever and are not a part of the agreement between the parties hereto.

			
	
			
				22.7  
			Interpretation.  No provision of this Guaranty or any of the other Loan Documents shall be construed against or interpreted to the disadvantage of any party hereto by any court or other governmental or judicial authority by reason of such party’s having or being deemed to have structured, drafted or dictated such provision.

			
	
			
				22.8  
			Further Assurances. Guarantor agrees that it will, at its expense, upon the written request of Lender, from time to time, promptly execute and deliver to Lender any additional instruments or documents reasonably considered necessary by Lender to cause this Guaranty to be, become, or remain valid and effective in accordance with its terms.

			
	
			
				22.9  
			Notices.  All notices, demands, instructions and other communications required or permitted to be given to, or made upon, any party with respect to this Guaranty shall be in writing and (except for any item 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 22.9.  Notices, demands, instructions and other communications covered by this Section 22.9 shall be given to or made upon the respective parties hereto to the addresses below.  Either party may designate a change 
		

		 

		

			14

		

		

			 

		

 

			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

		
			GUARANTOR:
		

		
			 
		

		
			Crimson Wine Group, Ltd.
		

		
			2700 Napa Valley Corporate Drive, Suite B
		

		
			Napa, CA 94558
		

		
			Attention: Chief Financial Officer
		

		
			 
		

		
			LENDER:
		

		
			 
		

		
			American AgCredit, PCA
		

		
			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 for Pine Ridge Winery
		

		
			 
		

			
	
			
				22.10  
			Non-Waiver.  None of the obligations of Guarantor, and no right or remedy of Lender under this Guaranty, shall be deemed to have been suspended or waived by Lender, nor shall Lender be estopped from asserting any such right or remedy, by Lender’s conduct or oral statements, but any such suspension or waiver of any such right or remedy by Lender must be in writing and signed by Lender.  Any suspension or waiver by Lender of any of its rights or remedies under this Guaranty shall not suspend or waive any prior or subsequent right or remedy, whether of the same or of a different type.

			
	
			
				22.11  
			Limitation of Liability.  Neither Lender nor any of its officers, directors, employees, agents, or counsel shall be liable for any action lawfully taken or omitted to be taken by it or them hereunder or in connection herewith, except for its or their own respective gross negligence or willful misconduct.

			
	
			
				22.12  
			Benefits of Agreement.  The provision of this Guaranty are for the benefit of Lender, and its successors, transferees, endorsees, and assigns.  In the event all or any part of the Obligations are transferred, endorsed, or assigned by Lender to any person in accordance with the terms of the Loan Documents, any reference to “Lender” herein shall be deemed to refer equally to such person.

			
	
			
				22.13  
			Entire Agreement.  This Guaranty constitutes the entire and final agreement between Guarantor and Lender with respect to the subject matter hereof, and supersedes any and all representations or statements, either written or oral, express or implied, other than those expressly set forth in this guaranty, made to any party hereto by any person.

			
	
			
				22.14  
			Reserved.  

		 

		

			15

		

		

			 

		

 

			
	
			
				22.15  
			GOVERNING LAW.  EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN ANY OF THE LOAN DOCUMENTS, IN ALL RESPECTS, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE, THIS GUARANTY AND THE OBLIGATIONS ARISING HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF CALIFORNIA APPLICABLE TO CONTRACTS MADE AND PERFORMED IN SUCH STATE, WITHOUT REGARD TO THE PRINCIPLES THEREOF REGARDING CONFLICT OF LAWS, AND ANY APPLICABLE LAWS OF THE UNITED STATES OF AMERICA.

			
	
			
				22.16  
			MUTUAL WAIVER OF JURY TRIAL; JUDICIAL REFERENCE.  

			
	
			
				(a)  
			EACH OF THE PARTIES HERETO THIS HEREBY EXPRESSLY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS HEREUNDER OR UNDER ANY AMENDMENT, MODIFICATION, INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED (OR WHICH MAY IN THE FUTURE BE DELIVERED) IN CONNECTION HEREWITH OR ARISING FROM ANY LENDING OR OTHER RELATIONSHIP RELATED HERETO.  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 22.16(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 22.16(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.

			
	
			
				 (a)
			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 hereto 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”).

			
	
			
				 (b)
			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.

		 

		

			16

		

		

			 

		

 

			
	
			
				 (c)
			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.

			
	
			
				 (d)
			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.

			
	
			
				 (e)
			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.

			
	
			
				 (f)
			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.

			
	
			
				(a)  
			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 HERETO.

		
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			17

		

		

			 

		

 

		IN WITNESS WHEREOF, Guarantor has caused this Guaranty to be duly executed to be effective as of the date first written above.
		

		
			 
		

		
			Guarantor:
		

		
			Crimson Wine Group, LTD, a Delaware corporation
		

		
			By:_/s/ Shannon McLaren__________
		

		
			Name:Shannon McLaren
		

		
			Title:CFO
		

		
			 
		

		
			 
		

		
			ACCEPTED BY LENDER:
		

		
			 
		

		
			American AgCredit, FLCA
		

		
			 
		

		
			By:_/s/ Edwin A. Adams, Jr.________
		

		
			Name: Edwin A. Adams, Jr.
		

		
			Title:   Vice President
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		 

		

			18Exhibit 104_8-K

		

			Exhibit 10.4

		

		

			 

		

			
					
						 

					
						 

					
						 

					
						 

					
						
Attn: Randy Rogers

					
						 

					
						 

					
					
						 

				
	
					
						RECORDING REQUESTED BY:

					
						Winston & Strawn LLP

					
						AND WHEN RECORDED MAIL TO:

					
						Winston & Strawn LLP

					
						101 California Street

					
						San Francisco, CA  94111
Attn: Randy Rogers

					
						 

					
					
						 

				

		
			 
		

		
			SPACE ABOVE THIS LINE RESERVED FOR RECORDER'S USE
		

		
			DEED OF TRUST, ASSIGNMENT OF RENTS,
SECURITY AGREEMENT AND FIXTURE FILING
		

		
			from
		

		
			 
		

		
			Pine Ridge Winery, LLC, a Delaware limited liability company
		

		
			Trustor
		

		
			 
		

		
			to
		

		
			 
		

		
			Fidelity National Title Company
		

		
			Trustee
		

		
			 
		

		
			for the benefit of
		

		
			 
		

		
			AMERICAN AGCREDIT, FLCA,
		

		
			 
		

		
			 
		

		
			Beneficiary
		

		
			 
		

		
			dated as of November 10, 2015
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			State:  California
		

		
			County: Sonoma
		

		

		

		 

 

		

			 

		

		This Deed of Trust, Assignment of Rents, Security Agreement and Fixture Filing (“Deed of Trust”) is made as of November 10, 2015, by Pine Ridge Winery, LLC a Delaware limited liability company, whose principal place of business is 2700 Napa Valley Corporate Drive, Suite B (herein “Trustor”), the owner of the real property described hereinbelow, to Fidelity National Title Company, as trustee, subject to substitution as provided in Section 4.13 (herein “Trustee”), for the benefit of American AgCredit, FLCA, whose principal place of business is 200 Concourse Boulevard, Santa Rosa, CA 95402 (herein “Beneficiary”).
		

		
			 
		

		
			For purposes hereof, references to Beneficiary shall mean and include the named beneficiary herein as well as its successors and assigns.
		

		
			Unless otherwise defined herein, capitalized terms used herein shall have the meanings set forth in the Loan Agreement.
		

		
			W I T N E S S E T H :
		

		
			WHEREAS, Trustor and  Beneficiary are concurrently entering into a Loan Agreement dated of even date herewith (as supplemented, amended, modified or restated from time to time, the “Loan Agreement”) pursuant to which Beneficiary has agreed to provide certain financial accommodations to Trustor upon the terms set forth therein;
		

		
			WHEREAS, Trustor owns the Real Property (as hereinafter defined) covered by this Deed of Trust;
		

		
			WHEREAS, Trustor owns and may hereafter acquire certain fixtures located on or about the Real Property;
		

		
			WHEREAS, Trustor, for good and valuable consideration received, has agreed to absolutely assign the rents, issues and profits of the Mortgaged Property (hereinafter defined) to Beneficiary; and
		

		
			WHEREAS, Trustor, for good and valuable consideration received, has agreed to execute and deliver this Deed of Trust to secure the obligations of Trustor under the Loan Agreement and the other Loan Documents.
		

		
			NOW, THEREFORE:
		

		
			In consideration of the indebtedness herein recited and the trust herein created, Trustor irrevocably grants, conveys, transfers and assigns to Trustee, its successors and assigns, in trust, with power of sale and right of entry and possession, all of Trustor’s estate, right, title and interest in, to and under the following described property, whether now existing or hereafter acquired (herein the “Mortgaged Property”):
		

		
			The real property (herein the “Real Property”) described in the attached Exhibit A which is incorporated into this Deed of Trust by reference.
		

		
			All structures and improvements now existing or hereafter erected on the Real Property; all easements, rights and appurtenances thereto or used in connection therewith; all rents, royalties, issues, profits, revenues, income and other benefits thereof or arising from the 
		

		 

		

			-1-

		

		

			 

		

		

			 

		

 

		

			 

		

		use or enjoyment of all or any portion thereof (subject, however, to the rights and authorities given herein to Trustor to collect and apply such rents, royalties, issues, profits, revenues, income and other benefits); all interests in and rights, royalties and profits in connection with all minerals, oil and gas and other hydrocarbon substances thereon or therein; all development rights or credits, air rights, water, water rights (whether riparian, appropriative, or otherwise, and whether or not appurtenant) and water stock; all fixtures machinery, equipment, building materials, appliances and goods of every nature (other than inventory) now or hereafter located in, or on, or attached or affixed to, use in connection with, the Real Property, or any structures or improvements thereon, including all heating, lighting, laundry, incinerating, gas, electric and power equipment, engines, pipes, pumps, tanks, motors, conduits, switchboards, plumbing, lifting, cleaning, fire prevention, fire extinguishing, refrigerating, ventilating, and communications apparatus, air cooling and air conditioning apparatus, elevators and escalators and related machinery and equipment, shades, awnings, blinds, curtains, drapes, attached floor coverings, including rugs and carpeting, television, radio and music cable antennae and systems, screens, storm doors and windows, stoves, refrigerators, dishwashers and other installed appliances, attached cabinets, partitions, ducts and compressors; crops growing or to be grown,  farm products, and trees, vines, and plants whether used for production of crops or used for purposes of landscaping and any other items of landscaping, including machinery, apparatus, equipment, fittings, and similar articles of personal property and all trade fixtures used in the business of Trustor, whether the same are annexed to the Real Property or not; all replacements and additions to any of the foregoing; all present and future leases, subleases, occupancy agreements and concessions affecting the Real Property, including any security deposits; and any present or future condemnation awards, insurance proceeds, or any causes of action, damages or recoveries relating to the Real Property and any of the foregoing described collateral.  
		

		
			All equipment and winery equipment, fixtures and accessions, now owned or hereafter acquired, that are located on or used in connection with operation of Trustor’s business on the Real Property including (i) all bottling line equipment, including loading and unloading tables, purgers, fillers, corkers, labelers, cappers, spinners and associated conveyers, tanks and pumps, (ii) all crushing equipment including unloading hoist or crane, grape hopper, stemmer, crusher, must pump, must line and associated valves, hoses, couplers, and conveyers, (iii) all fermentation and storage equipment including jacketed stainless steel tanks, non-jacketed stainless steel tanks and associated tank stands and catwalks, large wood cooperage, portable and fixed barrel racks, puncheons, as well as any other containers or vessels capable or utilized for the storing, aging, processing of grapes, must, wine, or any other product purchased, processed or manufactured, (iv) all wine presses and filters including wine presses, lees presses, plate filters, cartridge filters, centrifuges or any other device used to clarify or remove solids from wine or wine products, (v) all pumps, piping, fittings, valves, and hoses including transfer pumps, must pumps, racking pumps, carts, and miscellaneous hoses and fittings, (vi) all quality control equipment including scales, lab testing equipment, refrigeration equipment, and temperature control equipment, (vii) all office equipment including furniture, furnishings, data processing equipment, computers, printers, clerical and accounting equipment, desks, tables, chairs, and kitchen equipment, (viii) all rolling stock including fork lifts, pallet jacks, trailers, trucks, vans, or autos, and (ix) all miscellaneous equipment including small tools, pallets, hand carts, floor grates, bottled gas, and hot water heaters; provided that the foregoing shall not include barrels.
		

		

		

		 

		

			-2-

		

		

			 

		

		

			 

		

 

		

			 

		

		All appurtenances of the Real Property and all rights of Trustor in and to any streets, roads or public places, easements or rights of way relating to the Real Property.
		

		
			All fixed, minimum, percentage and other rents, expense pass-through payments, parking fees, rental and business interruption insurance payments, liability insurance payments, temporary condemnation proceeds, casualty insurance proceeds and other condemnation proceeds relating to the Real Property, all receipts from licenses, concessions and other sources relating to the Real Property, all recoveries of Trustor in any litigation respecting the Real Property or based upon any third-party warranties or guarantees or otherwise based upon or respecting the construction, physical condition or value of the Real Property, including payments in settlement thereof, payments in consideration of the early termination or modification of any lease or other agreement affecting the Real Property, and all income and revenue of a non-rental nature attributable to the Real Property.
		

		
			All leases or subleases covering the Real Property or any portion thereof now or hereafter existing or entered into, and all right, title, and interest of Trustor thereunder, including all cash or security deposits, advance rentals, and deposits or payments of similar nature.
		

		
			To the extent assignable, all options to purchase, lease or sublease or otherwise acquire:
		

		
			the Real Property or any portion thereof or interest therein, any greater estate in the Real Property now owned or hereafter acquired; or
		

		
			any other property of any kind used or to be used in connection with any of the Mortgaged Property.
		

		
			To the extent assignable, all other interests, estates or other claims, both in law and in equity, in the Real Property.
		

		
			All easements, rights of way or other rights, and all tenements, hereditaments and appurtenances thereof and thereto, held or used in connection with:
		

		
			the Real Property as a means of access to the Real Property, or
		

		
			any of the Mortgaged Property for any purpose.
		

		
			All causes of action, claims, compensation, proceeds and recoveries for any damage or injury to or condemnation or taking of the Real Property or any improvements thereon or any part thereof or for any loss or diminution in the value of the Real Property or any Improvements.
		

		
			All general intangibles relating to the development or use or operation of the Real Property, including all governmental licenses (to the extent permitted by the terms of such licenses), permits, variances, approvals and authorizations relating to construction on the Real Property or relating to the use or operation of the Mortgaged Property, and all management contracts, and all other contracts, contract rights, administrative records, agreements, commitments, undertakings and arrangements relating to the use or operation of the Mortgaged Property, and all warranties, guaranties, covenants, commitments and purchase orders 
		

		 

		

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		specifically relating to the Mortgaged Property, but excluding any trademarks and/or licenses of trademarks.
		

		
			All plans and specifications prepared for construction or renovation of improvements on the Real Property or operations to be conducted on the Real Property and all studies, data and drawings related thereto; and also all contracts and agreements of Trustor relating to the aforesaid plans and specifications or to the aforesaid studies, data and drawings, or to the construction or renovation of improvements on the Real Property.
		

		
			All reserves, deferred payments, deposits, refunds, cost savings and payments of any kind relating to the construction or operations on the Real Property, all present and future accounts and other rights of Trustor to the payment of money, no matter how evidenced, which arise from the use or operation of the Real Property, and all writings evidencing such accounts and other rights.
		

		
			To the extent that any of the foregoing constitutes personal property, this Deed of Trust shall also be deemed to be a security agreement with respect to such personal property and Trustor does hereby create and grant to Beneficiary a security interest in all such personal property described herein and further grants to Beneficiary all of the rights and remedies of a secured party under the California Commercial Code and other applicable state law, which rights are cumulative.
		

		
			All proceeds of the property described in clauses A through M above.  For purposes of this Deed of Trust, the term “proceeds” includes all rents, royalties, issues, income, payments and profits from the property referred to above and whatever is receivable or received when the property referred to above or proceeds are sold, collected, exchanged or otherwise disposed of, whether such disposition is voluntary or involuntary, and including all insurance and condemnation proceeds and products of any and all of the foregoing and all rights to payment, including return premiums with respect to any insurance relating thereto, and any and all right, title, interest that Trustor may hereafter acquire in and to any of the foregoing.
		

		
			FOR THE PURPOSE OF SECURING, in such order of priority as Beneficiary may elect:
		

		
			The obligations owed by Trustor and the other borrowers under the Loan Agreement, which obligations include a Loan in the original principal amount of Sixteen Million Dollars ($16,000,000), all Swap Obligations (as defined in the Loan Agreement), and all fees and expenses and reasonable attorneys’ fees required under the Loan Agreement, and all extensions, renewals, modifications, amendments and replacements thereof;
		

		
			The payment of all other sums which may be advanced by or otherwise be due to Trustee or Beneficiary under any provision of this Deed of Trust or under any other instrument or document referred to in section (c), below, with interest thereon at the rate provided herein or therein;
		

		
			The performance of each and every one of the covenants and agreements of Trustor contained (i) in this Deed of Trust; (ii) in the Loan Agreement; and (iii) in the other Loan Documents.
		

		

		

		 

		

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		The obligations and indebtedness secured by this Deed of Trust arising under various other deeds of trust and security instruments executed in favor of Beneficiary by Trustor and that secure Obligations under the Loan Documents.
		

		
			All of the obligations and indebtedness set forth in sections (a), (b), (c), and (d) above secured by this Deed of Trust are hereinafter collectively known as the “Obligations.”
		

		
			TO HAVE AND TO HOLD the Mortgaged Property and the rights and privileges hereby conveyed or intended to be, unto Trustee, its successors and assigns for the uses and purposes herein set forth, until the Obligations are fully paid and performed in accordance with the provisions set forth herein, in the Loan Agreement, and in the Loan Documents.
		

			
	
			
				ARTICLE I
			

REPRESENTATIONS, WARRANTIES AND COVENANTS OF TRUSTOR

		
			To protect the security of this Deed of Trust, and to effect the foregoing assignment of rents, Trustor represents, warrants, covenants and agrees as follows:
		

		
			Performance of Obligations Secured.
		

		
			Trustor shall promptly pay when due the principal of and interest on the indebtedness constituting the Obligations, the principal of and interest on any advance of funds by Beneficiary for the benefit of Trustor and any loan fees provided for in the Obligations, and shall further perform fully and in a timely manner all Obligations.
		

		
			Insurance.
		

		
			Trustor shall keep the Mortgaged Property insured, with loss payable to Beneficiary, as its interests may appear, under policies of All Risk Replacement Cost Insurance with Agreed Amount Endorsement, flood insurance (if the Mortgaged Property is in an area which is considered a flood risk area by the U.S. Department of Housing and Urban Development and if such insurance is available pursuant to the provisions of the Flood Disaster Protection Act of 1973 or other applicable legislation), comprehensive general public liability insurance, builder’s risk insurance (to the extent applicable during any construction of any improvements on the Mortgaged Property), and other appropriate insurance covering such other hazards (excluding earthquake insurance) as Beneficiary may reasonably require from time to time, all in amounts, form, and substance reasonably satisfactory to Beneficiary, and with reputable and financially sound independent insurers having an A.M. Best rating of “A-” or better (or such other rating as Beneficiary may reasonably approve in its discretion).  All losses under said insurance, except public liability losses, shall be payable to Beneficiary and shall be applied in the manner provided in Section 1.3 hereof.  All insurance policies shall be endorsed, at Trustor’s expense and in form and substance acceptable to Beneficiary, to name Beneficiary as an additional insured or lender loss payee thereunder, as its interest may appear, with loss payable to Beneficiary, without contribution.
		

		
			All hazard insurance policies shall be endorsed with a standard noncontributory mortgagee clause in favor of and in form reasonably acceptable to Beneficiary, 
		

		 

		

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		and may be canceled or modified only upon not less than thirty (30) days’ prior written notice to Beneficiary.
		

		
			All of the above-mentioned insurance policies or certificates of such insurance reasonably satisfactory to Beneficiary, together with receipts for the payment of premiums thereon, shall be delivered to and held by Beneficiary, which delivery shall constitute assignment to Beneficiary of all return premiums to be held as additional security hereunder.
		

		
			In the event of the foreclosure of this Deed of Trust or other transfer of the title to the Mortgaged Property in extinguishment, in whole or in part, of the Obligations, to the extent assignable, all right, title and interest of Trustor in and to any insurance policy, or premiums or payments in satisfaction of claims or any other rights thereunder then in force, shall pass to the purchaser or grantee notwithstanding the amount of any bid at such foreclosure sale.
		

		
			All renewal and replacement policies or certificates of insurance regarding the same shall be delivered to Beneficiary at least ten (10) days before the expiration of the expiring policies.  Beneficiary shall not by the fact of approving, disapproving, accepting, preventing, obtaining or failing to obtain any insurance, incur any liability for, or with respect to, the amount of insurance carried, the form or legal sufficiency of insurance contracts, solvency of insurance companies, or payment or defense of lawsuits.
		

		
			Condemnation and Insurance Proceeds.
		

		
			The proceeds of any award or claim for damages, direct or consequential, in connection with any condemnation or other taking of or damage or injury to the Mortgaged Property, or any part thereof, or for conveyance in lieu of condemnation, are hereby assigned to and shall be paid to Beneficiary.  In addition, all causes of action, whether accrued before or after the date of this Deed of Trust, of all types for damages or injury to the Mortgaged Property or any part thereof, or in connection with any transaction financed by funds loaned to Trustor by Beneficiary and secured hereby, or in connection with or affecting the Mortgaged Property or any part thereof, including causes of action arising in tort or contract and causes of action for fraud or concealment of a material fact, are hereby assigned to Beneficiary as additional security and the proceeds shall be paid to Beneficiary.
		

		
			Trustor, promptly upon obtaining knowledge of the institution of any proceedings relating to condemnation or other taking of or damage or injury (exceeding $250,000 with respect to damage or injury, provided no Event of Default is then in existence) to the Mortgaged Property or any portion thereof, or knowledge of any casualty damage (exceeding $250,000, provided no Event of Default is then in existence) to the Mortgaged Property, will promptly notify Beneficiary in writing.  Beneficiary may participate in any such proceedings and may join Trustor in adjusting any loss covered by insurance.
		

		
			All compensation, awards, proceeds, damages, claims, insurance recoveries, rights of action and payments which Trustor may receive or to which Trustor may become entitled with respect to the Mortgaged Property or any part thereof exceeding $250,000 (or, if an Event of Default is then in existence, all such compensation, awards, proceeds, damages, insurance recoveries, rights of action and payments) with respect to any one occurrence giving rise thereto shall be paid over to Beneficiary and shall be applied first toward reimbursement of all costs and expenses of Beneficiary in connection with recovery of the same, 
		

		 

		

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		and then shall be applied, in the sole and absolute discretion of Beneficiary and without regard to the adequacy of its security hereunder, but subject to the provisions of subsection (D) below with respect to any condemnation proceeds or insurance recoveries resulting from condemnation, damage or injury to the Mortgaged Property, to the payment or prepayment of the Obligations in such order as Beneficiary may determine, or to the reimbursement of Trustor for expenses incurred by it in the repair or restoration of the Mortgaged Property.  Any application of such amounts or any portion thereof to the Obligations or any release of funds by Beneficiary to Trustor shall not be construed to cure or waive any default or notice of default hereunder or invalidate any act done pursuant to any such default or notice.
		

		
			In the event of any condemnation or other taking or damage or injury to the Mortgaged Property, if Trustor shall seek to apply any such condemnation proceeds or insurance recoveries to the rebuilding and restoration of the Mortgaged Property so damaged, then Beneficiary shall make such condemnation proceeds and insurance recoveries available, providing that Trustor shall have fulfilled all of the following conditions:
		

			
	
			
				 (i)
			no Event of Default (as defined in Article II below) shall have occurred under this Deed of Trust;

			
	
			
				 (ii)
			Trustor shall not be in material default under any of the terms, covenants and conditions of any of the leases, licenses or other occupancy agreements, to which Trustor is a party and which affects the Mortgaged Property;

			
	
			
				 (iii)
			Beneficiary shall be satisfied that such condemnation proceeds or insurance recoveries shall in addition to any cash Trustor can use without disrupting its business operations, be sufficient to fully restore and rebuild the Mortgaged Property free and clear of all liens except the lien of this Deed of Trust (and any other liens expressly approved by the terms of this Deed of Trust or by Beneficiary), or, in the event that such condemnation proceeds or insurance recoveries are in Beneficiary’s judgment insufficient to restore and rebuild the Mortgaged Property, then,

		
			in the case of damage or injury to the Mortgaged Property, Trustor shall deposit promptly with Beneficiary funds which, together with the insurance recoveries, shall be sufficient in Beneficiary’s reasonable judgment to restore and rebuild the Mortgaged Property, and
		

		
			in the case of a partial condemnation or other taking, Trustor shall deposit promptly with Beneficiary funds which, together with the condemnation proceeds shall be sufficient in Beneficiary’s judgment to restore what remains of the Mortgaged Property to an economically viable property;
		

			
	
			
				 (iv)
			construction and completion of restoration and rebuilding of the Mortgaged Property shall be completed in accordance with plans and specifications and drawings submitted to and approved by Beneficiary, which approval shall not be unreasonably withheld, conditioned or delayed.  The plans, specifications and drawings shall provide for the reconstruction of the Mortgaged Property to its original condition (unless otherwise approved by Beneficiary, which approval shall not be unreasonably withheld, conditioned or delayed).  The plans shall not be modified in any material respect without Beneficiary’s prior written consent, which consent shall not be unreasonably withheld, conditioned or delayed;

		 

		

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				 (v)
			Beneficiary shall also have approved all prime contractors and subcontractors, and the general contract or contracts Trustor proposes to enter into with respect to the restoration and rebuilding, which approval Beneficiary shall not unreasonably withhold or delay;

			
	
			
				 (vi)
			any and all monies which are made available for restoration and rebuilding hereunder shall be held in an interest-bearing account (which interest shall become a part of such fund) and disbursed through Beneficiary, Trustee or a title insurance or trust company satisfactory to Beneficiary, in accordance with standard construction lending practice, including, if requested by Beneficiary, monthly lien waivers and title insurance date-downs, and the provision of payment and performance bonds by Trustor, or in any other manner approved by Beneficiary in Beneficiary’s reasonable discretion; and

			
	
			
				 (vii)
			Beneficiary shall be satisfied that the quality of the materials and workmanship of the repair or reconstruction of the Mortgaged Property will be at least substantially equal to the quality of the materials and workmanship of the Mortgaged Property prior to such damage.

		
			The excess of the above condemnation proceeds or insurance recoveries above the amount necessary to complete such restoration or rebuilding, if any, shall be disbursed to Trustor if Beneficiary determines, in its reasonable discretion, that its security under this Deed of Trust will not be impaired.  Otherwise, such excess shall be applied as a credit upon the Obligations secured hereby.
		

		
			Taxes, Liens and Other Items.
		

		
			Except as may be provided in the Loan Agreement:
		

		
			Trustor shall pay all taxes (including all real and personal property taxes and assessments), bonds, assessments, fees, liens, charges, fines, impositions and any and all other items which are attributable to or affect the Mortgaged Property and which may attain a priority over this Deed of Trust by making payment prior to delinquency directly to the payee thereof, unless Trustor is contesting the same and has posted reserves therefore in accordance with GAAP; and
		

		
			Trustor shall promptly discharge any lien which has or may attain priority over this Deed of Trust.
		

		

		

		 

		

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		Leases.
		

		
			Trustor represents and warrants that leases, licenses, contracts for hire or rental agreements pertaining to the use or occupancy of any of the Mortgaged Property entered into at any time by Trustor or any predecessor to Trustor, as landlord or lessor, and any other party, as tenant or lessee (“Tenant Leases”), if any, (i) are in full force and effect, are enforceable in accordance with their respective terms, and are not in default; (ii) have not been paid by any lessee more than one (1) month in advance; and (iii) have not been transferred or assigned by the lessor.
		

		
			Trustor shall (i) give written notice to Beneficiary of the entering into any new Tenant Lease, including a copy thereof; (ii) at all times fully perform the obligations of the lessor under all Tenant Leases; and (iii) whenever requested by Beneficiary, furnish to Beneficiary a certificate of Trustor setting forth the names of all lessees under any Tenant Leases, the terms of their respective Tenant Leases, the area occupied by such lessees, and the rents payable thereunder.
		

		
			Rents.
		

		
			All of the rents, royalties, issues, profits, revenue, income and other benefits of the Mortgaged Property, arising from the use or enjoyment of all or any portion thereof or services provided in connection therewith, or from any Tenant Lease or agreement pertaining thereto, whether now due, past due, or to become due, and including all prepaid rents and security deposits (the “Rents”), are hereby absolutely, presently and unconditionally assigned, transferred, conveyed and set over to Beneficiary to be applied by Beneficiary in payment of the principal and interest and all other sums payable on the Obligations, and of all other sums payable under this Deed of Trust. 
		

		
			Pursuant to California Civil Code section 2938, Trustor agrees and stipulates that the absolute, present, and unconditional assignment of the Rents herein to Beneficiary perfects Beneficiary’s interest in the Rents and that no further act by Beneficiary is needed to perfect Beneficiary’s interest in the Rents.
		

		
			Beneficiary shall not, for any purpose or under any circumstance, be deemed to be a mortgagee-in-possession or otherwise responsible or liable in any manner with respect to the Mortgaged Property or the use, occupancy, enjoyment or operation of all or any portion thereof, unless and until Beneficiary, in person or by agent, assumes actual possession thereof.
		

		
			Without the prior written consent of Beneficiary, Trustor shall not take action that might impair Beneficiary’s rights and interest with respect to the Rents.  A default by Trustor in the performance of any covenant in any Tenant Lease assigned to Beneficiary, by reason of which default the tenant has the right to cancel such Tenant Lease or to claim any diminution of or offset against future rents, shall, at the option of Beneficiary, constitute an Event of Default hereunder.
		

		
			Any Tenant Leases entered into by Trustor after the Closing Date shall contain a provision satisfactory to Beneficiary that in the event of the exercise of the private power of sale or a judicial foreclosure hereunder, such Tenant Lease, at the sole and exclusive 
		

		 

		

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		option of the purchaser at such sale, shall not be terminated and the tenant thereunder shall attorn to such purchaser and, if requested to do so, shall enter into a new Tenant Lease for the balance of the term of such Tenant Lease then remaining upon the same terms and conditions.
		

		
			Uniform Commercial Code, Security Agreement and Fixture Filing.
		

		
			This Deed of Trust is intended to be a security agreement pursuant to the California Commercial Code for any items of personal property specified above as part of the Mortgaged Property which, under applicable law, may be subject to a security interest pursuant to the California Commercial Code and which are not herein effectively made part of the real property, and Trustor hereby grants Beneficiary a security interest in said property, and in all additions thereto, substitutions therefor and proceeds thereof, for the purpose of securing all of the Obligations.
		

		
			Trustor agrees that Beneficiary may file any appropriate document in the appropriate index as a financing statement for any of the items specified above as part of the Mortgaged Property.  Trustor agrees to execute and deliver financing and continuation statements covering said property from time to time and in such form as Beneficiary may require to perfect and continue the perfection of Beneficiary’s lien or security interest with respect to said property.  Trustor shall pay all costs of filing such statements and renewals and releases thereof and shall pay all reasonable costs and expenses of any record searches for financing statements Beneficiary may reasonably require.
		

		
			Without the prior written consent of Beneficiary, except as otherwise provided in the Loan Agreement, Trustor shall not create or suffer to be created any other security interest in said property, including replacements and additions thereto.
		

		
			Upon the occurrence of an Event of Default hereunder and during the continuation thereof, Beneficiary shall have the rights and remedies of a secured party under the California Commercial Code as well as all other rights and remedies available at law or in equity.
		

		
			In exercising any of said remedies, Beneficiary may proceed against the items of Real Property and any items of personal property specified above as part of the Mortgaged Property separately or together and in any order whatsoever, without in any way affecting the availability of Beneficiary’s rights or remedies under the California Commercial Code or of the other remedies provided in this Deed of Trust, in the Loan Agreement, or by law.
		

		
			Trustor warrants and agrees that on the date hereof and except as disclosed in the Loan Agreement there is no financing statement covering any such property, or any part thereof, on file in any public office and agrees that all or such portion of any such property now or hereafter subject to this Deed of Trust is, and shall be kept (except with the prior written consent of Beneficiary, or as otherwise permitted in the Loan Agreement) free from any other lien, security interest or encumbrance.
		

		
			This Deed of Trust constitutes a financing statement filed as a fixture filing in the Official Records of the County Recorder of the county in which the Mortgaged Property is located with respect to any and all fixtures included within the term Mortgaged 
		

		 

		

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		Property as used herein and with respect to any goods or other personal property that may now be or hereafter become such fixtures.
		

		
			Further Encumbrances; Transfers of Property; Change of Ownership; Attorneys’ Fees.
		

		
			Except as expressly provided in the Loan Agreement and except as expressly provided in Section 1.8(B) below, without the prior written consent of Beneficiary being first had and obtained, Trustor shall not execute or deliver any pledge, security agreement, mortgage, deed of trust or other instrument of hypothecation, covering all or any portion of the Mortgaged Property or any interest therein, grant a security interest in the Mortgaged Property or permit the creation of a voluntary or contractual lien or other encumbrance in the Mortgaged Property.  
		

		
			Notwithstanding Section 1.8(A) above, Trustor may from time to time replace items of personal property and fixtures owned by Trustor and constituting a part of the Mortgaged Property, provided that:
		

			
	
			
				 (viii)
			the replacements for such items of personal property or fixtures are of substantially equivalent value and quality and such replacement does not violate the terms of the Loan Agreement; and

			
	
			
				 (ix)
			Trustor has good title to such replacement property which, except for the Permitted Liens as defined in the Loan Documents, is free and clear of any and all liens, encumbrances, security interests, ownership interests, claims of title (contingent or otherwise), or charges of any kind, or the rights of any conditional sellers, vendors or any other third parties in or to such replacement property have been expressly subordinated at no cost to Beneficiary to the lien of this Deed of Trust in a manner satisfactory to Beneficiary.

		
			Trustor acknowledges that ownership by Trustor of the Real Property in fee simple estate was a material inducement to Beneficiary in providing the Obligations secured hereby, and that Beneficiary, in providing the Obligations secured hereby, are relying upon the creditworthiness, business reputation, and knowledge of Trustor in operating and managing properties similar to the Mortgaged Property.  Accordingly, without the prior written consent of Beneficiary being first had and obtained, which consent can be granted or denied in Beneficiary’s sole discretion, and except as provided in the Loan Agreement:
		

		
			Trustor shall not, voluntarily or involuntarily, by operation of law or otherwise, sell, convey, transfer (including any foreclosure sale or deed in lieu of foreclosure under any mortgage or deed of trust, the lien of which is junior to the lien of this Deed of Trust, whether or not Beneficiary has approved such mortgage or deed of trust) or dispose of all or any portion of the Real Property or any interest therein or any Water Rights or any interest therein.  For purposes of this Section 1.8(C), a transfer or disposition of the Real Property or Water Rights or any interest therein shall include the sale, execution of a contract to sell or option to purchase, pledge assignment, conditional sale, execution of a title retention agreement, lease for space in the improvements located on the Real Property containing an option to purchase, transfer (including a transfer as a result of or in lieu of condemnation), or other alienation of all or any portion of the Real Property or any interest therein (collectively “Transfer”).  In the event of a breach of any of the foregoing covenants, Beneficiary may at its option and without limiting any 
		

		 

		

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		other right or remedy available to Beneficiary at law, in equity or by agreement with Trustor, accelerate the maturity of the Obligations secured hereby and require the payment of the then existing outstanding principal balance and all other sums secured by this Deed of Trust.  As used herein, the term “Water Rights” means the ground water on, under, pumped from or otherwise available to the Real Property or any other water rights appurtenant to the Real Property, whether as a result of groundwater rights, contractual rights, or otherwise and whether riparian, appropriative, or otherwise; the right to remove or extract any such ground water including any permits, rights or licenses granted by any governmental authority and any rights granted or created by any easement, covenant, agreement or contract with any person; and any rights to which the Real Property is entitled with respect to surface water, whether such rights are appropriative, riparian, prescriptive or otherwise and whether or not pursuant to permit or other governmental authorization; any water right, water allocation for water not yet delivered, distribution right, delivery right, water storage right, or other water-related entitlement appurtenant to or otherwise applicable to the Real Property by virtue of the Real Property being situated within the boundaries of any governmental water district or within the boundaries of any private water company, mutual water company, or other non-governmental entity; and any shares, or any rights under such shares, of any private water company, mutual water company, or other non-governmental entity pursuant to which Trustor or the Real Property may receive water, water rights and water stock relating to the Real Property.  Notwithstanding the foregoing, the merger of the leasehold interest in the portion of the Real Property constituting a leasehold interest upon the acquisition by Trustor of the fee interest in such portion of the Real Property shall not constitute a “Transfer” hereunder.
		

		
			Trustor shall reimburse Beneficiary for all costs and expenses, including reasonable attorneys’ fees and expenses, incurred by Beneficiary in connection with the review by Beneficiary of Trustor’s request for Beneficiary’s consent to any Transfer.
		

		
			Preservation and Maintenance of Mortgaged Property.
		

		
			Trustor shall keep the Mortgaged Property and every part thereof in good condition and repair ordinary wear and tear excepted, and shall not permit or commit any waste material, impairment, or deterioration outside of the ordinary course of business of the Mortgaged Property, nor commit, suffer or permit any act upon or use of the Mortgaged Property in material violation of law or applicable order of any governmental authority, whether now existing or hereafter enacted and whether foreseen or unforeseen, or in material violation of any covenants, conditions or restrictions affecting the Mortgaged Property, or bring or keep any article upon any of the Real Property or cause or permit any condition to exist thereon which would be prohibited by or could invalidate any insurance coverage maintained, or required hereunder to be maintained, by Trustor on or with respect to any part of the Mortgaged Property, and Trustor further shall do all other acts which from the character or use of the Mortgaged Property may be reasonably necessary to protect the security hereof, the specific enumerations herein not excluding the general.  Trustor shall underpin and support, when necessary under applicable laws, any building, structure or other improvement situated on the Real Property.  Trustor shall complete or restore and repair promptly and in a good workmanlike manner any building, structure or improvement which may be constructed, damaged or destroyed thereon and pay when due all claims for labor performed and materials furnished therefor, whether or not insurance or other proceeds are available to cover in whole or in part the costs of any such completion, restoration or repair; provided, however, except as permitted under the terms of the 
		

		 

		

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		Loan Agreement, Trustor shall not demolish, remove, expand or extend any building, structure or improvement on the Real Property, nor construct, add to or materially alter any such building, structure or improvement, nor consent to or permit any of the foregoing to be done, without in each case obtaining the prior written consent of Beneficiary thereto, which consent shall not be unreasonably withheld, conditioned or delayed.  Trustor’s expenditures of Rents of the Mortgaged Property for the foregoing purposes and for purposes of satisfying the other obligations described in this Deed of Trust, shall be limited as provided in the Loan Agreement.
		

		
			Trustor shall obtain and at all times shall keep in full force and effect and comply with all governmental permits and requirements as may be necessary under applicable law, whether now existing or hereafter created, to lawfully construct, own and operate the Mortgaged Property, including, without limiting the generality of the foregoing, all applicable environmental and zoning laws, ordinances and regulations and all certificates of occupancy or equivalent permits required for such portion of the Mortgaged Property and its occupancy.
		

		
			Except as disclosed to Beneficiary in writing in accordance with the Loan Agreement and in any environmental report delivered by Trustor to Beneficiary in connection with the closing of the indebtedness secured hereby, Trustor represents and warrants that Trustor has not, and, to the best of Trustor’s knowledge, no predecessor in title nor any third person at any time occupying or present on the Mortgaged Property has, at any time prior to or during the existence of the Obligations, used, generated, disposed of, discharged, stored, released or threatened the release of any Hazardous Substances (as hereinafter defined) on, from, under or affecting the Mortgaged Property in any manner that materially violates any federal, state or local environmental, health or safety laws, ordinances, regulations, or rules of common law regulating Hazardous Substances, including those governing the use, refinement, handling, treatment, removal, storage, production, manufacture, transportation or disposal of Hazardous Substances as such laws, ordinances, regulations, and rules may be in effect from time to time and be applicable to the Mortgaged Property (collectively, the “Environmental Laws”).
		

		
			Trustor further covenants that Trustor will not, nor shall Trustor permit any tenants or other occupants of the Mortgaged Property to, at any time in the future, use, generate, dispose of, discharge, store, release or threaten the release of any Hazardous Substances on, from, under or affecting the Mortgaged Property in any manner that materially violates any Environmental Law.  
		

		
			“Hazardous Substances” means and includes any flammable explosives, radioactive materials or hazardous, toxic or dangerous wastes, substances or related materials or any other chemicals, materials or substances, exposure to which is prohibited, limited or regulated by any federal, state, county, regional or local authority, including asbestos, PCBs, petroleum products and by-products, substances defined or listed as “hazardous substances,” “hazardous wastes” or “toxic substances” or similarly identified in, pursuant to, or for purposes of, the Hazardous Waste Control Law (Health & Safety Code Section 25100, et seq.); the Comprehensive Environmental Response, Compensation and Liability Act, as amended (42 U.S.C. Section 9601, et seq.); the Hazardous Materials Transportation Act (49 U.S.C. Section 1801, et seq.); the Resource Conservation and Recovery Act (42 U.S.C. Section 6901, et seq.); California Health & Safety Code Section 25117, Section 25316, and any so-called “Superfund” or “Superlien” law; or any other federal, state or local statute, law, ordinance, code, rule, or regulation regulating, relating to or imposing liability or standards of conduct concerning any 
		

		 

		

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		hazardous, toxic or dangerous waste, substance or material; or any substances or mixture regulated under the Toxic Substance Control Act of 1976, as now or hereafter amended (15 U.S.C. Section 2601 et seq.); and any “toxic pollutant” under the Clean Water Act, as now or hereafter amended (33 U.S.C. Section 1251 et seq.); and any hazardous air pollutant under the Clean Air Act, as now or hereafter amended (42 U.S.C. Section 7401 et seq.).
		

		
			Trustor hereby does and shall defend and indemnify Beneficiary and hold Beneficiary harmless from and against any and all Claims except for Claims arising out of Beneficiary’s gross negligence or willful misconduct.  As used herein, “Claims” mean any and all actual out-of-pocket cost (including reasonable attorneys’ fees and expenses, and also including fees and expenses of both outside and staff counsel), expense or loss arising from any and all claims, losses, liabilities, damages, fines, penalties, charges, administrative and judicial proceedings and orders, injunctive relief, judgments, remedial action requirements and enforcement actions of any kind, injury to person, property or natural resources, and arising, directly or indirectly, in whole or in part, out of or attributable to the presence, use, generation, disposal, discharge, storage, release or threatened release of any Hazardous Substances at, about, on, from, under, within or affecting the Mortgaged Property, or elsewhere in connection with the transportation of Hazardous Substances to or from the Mortgaged Property, whether foreseeable or unforeseeable, regardless of when such presence is discovered and regardless of whether by Trustor, any employees, agents, contractors or subcontractors of Trustor or any third person.  
		

		
			Without limiting the generality of the foregoing and for purposes of clarification only, Claims include reasonable and actual out-of-pocket costs incurred by Beneficiary in connection with (i) determining whether the Mortgaged Property is in compliance with all applicable Environmental Laws, if the investigation thereof is based on the Beneficiary’s reasonable suspicion of noncompliance, (ii) any removal, remediation of any kind and disposal of any Hazardous Substances present at, on, about, under or within the Mortgaged Property to the extent required by applicable Environmental Laws in effect at the time of such removal, remediation or disposal, and (iii) any repair of any damage to the Mortgaged Property or any other property caused by any such removal, remediation or disposal.  The rights of Beneficiary hereunder shall not be limited by any investigation or the scope of any investigation undertaken by or on behalf of Beneficiary in connection with the Mortgaged Property prior to the date hereof.  This indemnity shall not be limited by any representation, warranty or indemnity of Trustor made in connection with the Obligations, irrespective of whether Trustor has knowledge as of the date of this Deed of Trust or during the term of this Deed of Trust of the matters to which such representation, warranty or indemnity relate; provided, however, this indemnity shall not apply to any Claims that are attributable to the presence, use, generation, disposal, discharge, storage, release or threatened release of any Hazardous Substance affecting the Mortgaged Property that first occurs after the date of the foreclosure sale of this Deed of Trust or other acceptable transfer of the Mortgaged Property to Beneficiary or its nominee or a transfer of the Mortgaged Property that is first approved in writing by Beneficiary.
		

		
			Trustor shall give prompt, written notice to Beneficiary of:
		

		
			any proceeding or inquiry by any governmental authority (including the California Department of Toxic Substances Control), of which Trustor has knowledge, with respect to the presence of any Hazardous Substances on the Mortgaged Property or the migration thereof from or to other property;
		

		

		

		 

		

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		all claims made or threatened by any third party against Trustor or the Mortgaged Property, of which Trustor has knowledge, relating to any loss or injury resulting from any Hazardous Substances; and
		

		
			Trustor’s discovery of any occurrence or condition on any real property adjoining or in the vicinity of the Mortgaged Property that could reasonably be expected cause the Mortgaged Property or any part thereof to be subject to any restrictions on the ownership, occupancy, transferability or use of the Mortgaged Property under any Environmental Laws.
		

		
			At any time after the occurrence and during the continuation of an Event of Default, Beneficiary shall have the right to join and participate in, as a party if it so elects, any legal proceedings or actions initiated in connection with any Environmental Laws and have its reasonable attorneys’ fees and expenses in connection therewith, including fees and expenses of both outside and staff counsel, paid by Trustor.
		

		
			In the event that any investigation, site monitoring, containment, cleanup, removal, restoration or other remedial work of any kind or nature (the “Remedial Work”) is required under any applicable local, state or federal law or regulation, any judicial order, or by any governmental entity because of, or in connection with, the current or future presence, suspected presence, release or suspected release of Hazardous Substances in or into the air, soil, groundwater, surface water or soil vapor at, on, about, under or within the Mortgaged Property (or any portion thereof), Trustor shall within thirty (30) days after receipt of information that such Remedial Work is required (or such shorter or longer period of time as may be required under applicable law, regulation, order or agreement), take reasonable steps to commence to perform, or cause to be commenced, and thereafter diligently prosecute to completion, all such Remedial Work.
		

		
			All costs and expenses of such Remedial Work shall be paid by Trustor, including the charges of such contractor(s) and/or the consulting engineer, and Beneficiary’s reasonable attorneys’ fees and costs, including reasonable fees and costs of both outside and staff counsel incurred in connection with monitoring or review of such Remedial Work.  In the event Trustor shall fail to timely commence, or cause to be commenced, or fail to diligently prosecute to completion, such Remedial Work as required in Section 1.9(J) herein, Beneficiary may, but shall not be required to, cause such Remedial Work to be performed and all costs and expenses thereof, or incurred in connection therewith, subject to the provisions of Section 3.7 herein shall become part of the Obligations.
		

		
			Trustor shall not drill or extract or enter into any new lease for the drilling for or extraction of oil, gas or other hydrocarbon substances or any mineral of any kind or character on or from the Mortgaged Property or any part thereof without first obtaining Beneficiary’s written consent.
		

		
			Unless required by applicable law or unless Beneficiary has otherwise first agreed in writing, which agreements shall not be unreasonably withheld or delayed, Trustor shall not make or allow any material changes to be made in the nature of the occupancy or use of the Mortgaged Property or any part thereof for which the Mortgaged Property or such part was intended at the time this Deed of Trust was delivered.  Trustor shall not initiate or acquiesce in any change in any zoning or other land use classification now or hereafter in effect and affecting 
		

		 

		

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		the Mortgaged Property or any part thereof without in each case obtaining Beneficiary’s prior written consent thereto, which consent shall not be unreasonably withheld or delayed.
		

		
			Financial Statements; Offset Certificates.
		

		
			Trustor, without expense to Beneficiary, shall furnish financial statements as described in the Loan Agreement.
		

		
			Trustor, within ten (10) days after receiving a request from Beneficiary therefor, shall furnish a written statement certified by a Responsible Officer of all amounts Trustor believes are due on the Obligations, whether for principal or interest on the Notes or otherwise, and stating whether any offsets or defenses exist against the Obligations and covering such other matters with respect to any such Obligations as Beneficiary may reasonably require.
		

		
			Trustee’s Costs and Expenses; Taxes and Water Payments; Husbandry; Subordination to Crop Financing.
		

		
			Trustor shall pay all costs, fees and expenses of Trustee, its agents and counsel in connection with the performance of its duties hereunder, including the cost of any trustee’s sale guaranty or other title insurance coverage ordered in connection with any foreclosure proceedings hereunder.  Trustor shall pay all Taxes constituting a lien upon the Real Property as and when such Taxes become due and Trustor shall not permit any real estate taxes or assessments to become delinquent.  Trustor shall pay on or before the due date all assessments upon water company stock and all charges for water delivered to, appurtenant to, or used in connection with the Real Property.  Trustor shall at all times work, prune, cultivate, fertilize, irrigate, spray, dust, harvest, care for and maintain in a husbandlike manner according the most current industry standards any groves, orchards, vineyards, or crops growing on the Real Property.  If the Real Property is improved with any orchards, vineyards, or permanent plantings, Trustor shall not allow more than five percent of such orchards, vineyards, or permanent plantings to be removed, uprooted, damaged, or otherwise removed from production.  If Trustor grants a security interest in crops growing on the Real Property to a person providing financing for such crops, the security interest of Beneficiary in such crops shall be subordinate to the security interest of such person.
		

		
			Protection of Security; Costs and Expenses.
		

		
			Trustor shall appear in and defend any action or proceeding purporting to affect the security hereof or the rights or powers of the Beneficiary or Trustee, and shall pay all costs and expenses, including cost of evidence of title and reasonable attorneys’ fees and expenses, in any such action or proceeding in which Beneficiary or Trustee may appear, and in any suit brought by Beneficiary to foreclose this Deed of Trust or to enforce or establish any other rights or remedies of Beneficiary hereunder.
		

		
			If Trustor fails to perform any of the covenants or agreements contained in this Deed of Trust, or if any action or proceeding is commenced which affects Beneficiary’s interest in the Mortgaged Property or any part thereof, including eminent domain, code enforcement, or proceedings of any nature whatsoever under any federal or state law, whether now existing or hereafter enacted or amended, relating to bankruptcy, insolvency, arrangement, reorganization or other form of debtor relief, or to a decedent, then Beneficiary or Trustee may, 
		

		 

		

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		but without obligation to do so upon reasonable notice to Trustor (or without notice in a case of emergency, or where the giving of notice is impracticable or where the Tenant or Trustor has abandoned the Mortgaged Property) and without releasing Trustor from any obligation hereunder, make such appearances, disburse such sums and take such action as Beneficiary or Trustee deems reasonably necessary or appropriate to protect Beneficiary’s interest, including disbursement of reasonable attorneys’ fees, entry upon the Mortgaged Property to make repairs or take other action to protect the security hereof, and payment, purchase, contest or compromise of any encumbrance, charge or lien which in the judgment of either Beneficiary or Trustee appears to be prior or superior hereto.
		

		
			Trustor further agrees to pay all reasonable expenses of Beneficiary (including fees and disbursements of counsel) incident to the protection of the rights of Beneficiary hereunder, or to enforcement or collection of payment of the Obligations, whether by judicial or non-judicial proceedings, or in connection with any bankruptcy, insolvency, arrangement, reorganization or other debtor relief proceeding of Trustor, or otherwise, including costs of collection of judgment and costs of appeal.
		

		
			Any amounts disbursed by Beneficiary or Trustee pursuant to this Section 1.12 shall be additional indebtedness of Trustor secured by this Deed of Trust and each of the Loan Documents as of the date of disbursement and shall bear interest at the variable interest rate set forth in the Loan Agreement.  All such amounts shall be payable by Trustor upon written demand.  Nothing contained in this Section 1.12 shall be construed to require Beneficiary or Trustee to incur any expense, make any appearance, or take any other action.
		

		
			Warranty of Title.
		

		
			Trustor hereby represents and warrants to Beneficiary that, except for the Permitted Liens, Trustor is well seized of an indefeasible estate in fee simple or leasehold, as applicable, in the Mortgaged Property hereby encumbered and has good title to all existing personal property hereby encumbered and has good right, full power and lawful authority to convey and encumber the same in the manner and form aforesaid; that the same is free and clear of all liens, charges and encumbrances whatsoever, including, as to the personal property and fixtures, security agreements, conditional sales contracts and anything of a similar nature, excepting only the Permitted Liens, and that Trustor shall and will warrant and forever defend the title to the Mortgaged Property against the claims of all persons whomsoever.
		

		
			Subordinate Mortgage.
		

		
			Trustor (i) represents as a special inducement to Beneficiary to make the loan secured hereby that as of the date hereof the Mortgaged Property is not encumbered for purposes of securing debt junior to this Deed of Trust other than as specifically permitted by the Loan Agreement, and covenants that there shall be none as of the date when this Deed of Trust becomes of record, and (ii) agrees that Trustor will not, without the prior written consent of Beneficiary being first had and obtained, which consent may be withheld by Beneficiary in its sole and absolute discretion and without regard to the adequacy of its security hereunder, execute or deliver any pledge, security agreement, mortgage or deed of trust covering all or any portion of the Mortgaged Property or any interest therein.
		

		

		

		 

		

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		Collection of Rents, Issues and Profits.
		

		
			Notwithstanding Section 1.6 herein, Beneficiary confers upon Trustor a license to collect and retain the Rents as they become due and payable; provided, however, that Beneficiary may at any time after the occurrence and during the continuation of an Event of Default (as hereinafter defined) and without regard to the value of the security, in Beneficiary’s sole discretion and without notice to Trustor, revoke said license and may collect and retain any or all of the Rents, without taking possession of all or any part of the Mortgaged Property.
		

		
			Upon such revocation of Trustor’s license, Trustor shall immediately turn over to Beneficiary all of the Rents. 
		

		
			The right of Beneficiary to collect Rents as herein provided shall not be deemed to grant to Beneficiary or Trustee the right to possession of the Property, except as expressly herein provided, or to impose upon Beneficiary or Trustee the duty to produce any Rents or maintain the Property in whole or in part.
		

		
			Any Rents collected by Beneficiary may be applied by Beneficiary, in its sole discretion, against any of the Obligations whether now existing or hereafter arising.  Collection of any Rents by Beneficiary shall not waive any other right or remedy of Beneficiary hereunder or any notice of default given hereunder or invalidate any acts done pursuant to notice.
		

			
	
			
				ARTICLE I
			

EVENTS OF DEFAULT

		
			Each of the following shall constitute an event of default (“Event of Default”) hereunder:
		

		
			The occurrence of any Event of Default under and as defined in any of the Loan Documents (giving effect to any grace period set forth therein).
		

		
			Failure to make any payment of principal or interest, fees, expenses or any other amount owing in respect of the Obligations or failure to make any other payment of money required on the part of Trustor under this Deed of Trust and the Loan Documents when and as the same shall become due and payable (giving effect to any grace period set forth in the Loan Agreement), whether at maturity or by acceleration or as part of any prepayment or otherwise.
		

		
			Failure to perform any of the covenants or agreements of Trustor contained (a) herein, or (b) in the Loan Agreement, or (c) in any of the Loan Documents, which covenant or agreement does not involve the payment of money subject, however, in the case of any of the Loan Documents, to the expiration of the period of time, if any, permitted for cure of such failure thereunder.
		

		
			Any representation or warranty made herein, in any of the Loan Documents, in any written statement pursuant thereto or hereto, or in any other report, financial statement, certificate or schedule made or delivered to Beneficiary by Borrower proves to be untrue or incorrect in any material respect, as of the date when made.
		

		

		

		 

		

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		Any other event which constitutes an Event of Default (giving effect to any applicable grace period) by Trustor under any of the Loan Documents, or gives Beneficiary the right to accelerate the maturity of the Obligations, or any part thereof.
		

			
	
			
				ARTICLE II
			

REMEDIES

		
			Upon the occurrence of any Event of Default and during the continuation thereof, Trustee and Beneficiary shall have, in their sole discretion, any and all of the following rights and remedies without regard to the adequacy of any security for the Obligations hereby secured:
		

		
			Acceleration.
		

		
			Beneficiary may declare the entire principal amount of the Notes then outstanding (if not then due and payable) and accrued and unpaid interest thereon, and all other sums or payments required thereunder, to be due and payable immediately, without presentment, demand, protest or further notice of any kind, all of which are expressly waived by Trustor.
		

		
			Upon such acceleration and notwithstanding the stated maturity of the Obligations, the principal amount of each Obligation, the accrued and unpaid interest thereon and all other sums or payments required thereunder shall thereupon become and be immediately due and payable.  Any acceleration may be rescinded and annulled by Beneficiary.  No such rescission and annulment shall affect any subsequent Event of Default or acceleration or impair any right of Beneficiary with respect to any subsequent Event of Default or acceleration.
		

		
			Entry.
		

		
			Irrespective of whether Beneficiary exercises the option to accelerate provided in Section 3.1 above, Beneficiary, in person or by agent, with or without bringing any action or proceeding, may enter upon, take possession of, manage and operate the Mortgaged Property or any part thereof and do all things necessary or appropriate in Beneficiary’s sole discretion in connection therewith, including making and enforcing, and if the same be subject to modification or cancellation, modifying or canceling Tenant Leases upon such terms or conditions as Beneficiary deems proper, obtaining and evicting tenants, and fixing or modifying rents, contracting for and making repairs and alterations, and doing any and all other acts which Beneficiary deems proper to protect the security hereof; and either with or without so taking possession, in its own name or in the name of Trustor, sue for or otherwise collect and receive the Rents, including those past due and unpaid, and apply the same, less costs and expenses of operation and collection, including reasonable attorneys’ fees and expenses, upon any of the Obligations, and in such order as Beneficiary may determine.
		

		
			Upon request of Beneficiary, Trustor shall assemble and make available to Beneficiary at the site of the Real Property covered hereby any of the Mortgaged Property which has been removed therefrom to the extent such assemblage and return is commercially reasonable.
		

		
			The entering upon and taking possession of the Mortgaged Property, or any part thereof, the collection of any Rents and the application thereof as aforesaid shall not 
		

		 

		

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		cure or waive any default theretofore or thereafter occurring or affect any notice of default hereunder or invalidate any act done pursuant to any such default or notice, and, notwithstanding continuance in possession of the Mortgaged Property or any part thereof by Beneficiary, Trustee or a receiver, and the collection, receipt and application of the Rents, Beneficiary shall be entitled to exercise every right provided for in this Deed of Trust or by law or in equity upon or after the occurrence of an Event of Default, including  the right to exercise the power of sale.
		

		
			Any of the actions referred to in this Section 3.2 may be taken by Beneficiary irrespective of whether any notice of default or election to sell has been given hereunder and without regard to the adequacy of the security for the Obligations.
		

		
			Appointment of Receiver.
		

		
			Upon an Event of Default and at any time during the continuation thereof, Beneficiary may elect to seek the court appointment of a receiver to enter upon, take possession of, manage, and operate the Mortgaged Property or any part thereof, and Trustor hereby consents to the appointment of a receiver hereunder.
		

		
			Trustor hereby consents and stipulates that Beneficiary need only provide Trustor with two (2) Business Days’ notice of Beneficiary’s motion to seek court appointment of a receiver for Mortgaged Property.
		

		
			Trustor further stipulates that at such hearing on Beneficiary’s motion to appoint a receiver for the Mortgaged Property, a copy of this recorded Deed of Trust can be entered into evidence without any objection from Trustor.
		

		
			Upon the appointment of a receiver for the Mortgaged Property, Trustor agrees to immediately furnish to such receiver any and all (i) security deposits, and (ii) Rents that Trustor has in its possession or control.
		

		
			Any action taken under this section may be taken by Beneficiary or Trustee with or without regard to the adequacy of the security for the Obligations secured hereunder, and whether or not notice of default has been recorded. 
		

		
			Judicial Action.
		

		
			Beneficiary may bring an action in any court of competent jurisdiction to foreclose this instrument or to enforce any of the covenants and agreements hereof.
		

		
			Power of Sale.
		

		
			Beneficiary may elect to cause the Mortgaged Property or any part thereof to be sold under the power of sale herein granted in any manner permitted by applicable law.
		

		
			In connection with any sale or sales hereunder, Beneficiary may elect to treat any of the Mortgaged Property which consists of a right in action or which is property that can be severed from the Real Property covered hereby or any improvements thereon without causing structural damage thereto as if the same were personal property, and dispose of the same in accordance with applicable law, separate and apart from the sale of Real Property.
		

		

		

		 

		

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		Any sale of any personal property hereunder shall be conducted in any manner permitted by the California Commercial Code.  Where the Mortgaged Property consists of real and personal property or fixtures, whether or not such personal property is located on or within the Real Property, Beneficiary may elect in its discretion to exercise its rights and remedies against any or all of the Real Property, personal property, and fixtures in such order and manner as is now or hereafter permitted by applicable law.
		

		
			Without limiting the generality of the foregoing, Beneficiary may, in its sole and absolute discretion and without regard to the adequacy of its security, elect to proceed against any or all of the Real Property, personal property and fixtures in any manner permitted under the California Commercial Code; and if the Beneficiary elects to proceed in the manner permitted under the California Commercial Code, the power of sale herein granted shall be exercisable with respect to all or any of the Real Property, personal property and fixtures covered hereby, as designated by Beneficiary, and the Trustee is hereby authorized and empowered to conduct any such sale of any of the Real Property, personal property and fixtures in accordance with the procedures applicable to real property.
		

		
			Where the Mortgaged Property consists of real property and personal property, any reinstatement of the obligation secured hereby, following default and an election by the Beneficiary to accelerate the maturity of said obligation, which is made by Trustor or any other person or entity permitted to exercise the right of reinstatement under Civil Code Section 2924c or any successor statute, shall not prohibit the Beneficiary from conducting a sale or other disposition of any personal property or fixtures or from otherwise proceeding against or continuing to proceed against any personal property or fixtures in any manner permitted by the California Commercial Code; nor shall any such reinstatement invalidate, rescind or otherwise affect any sale, disposition or other proceeding held, conducted or instituted with respect to any personal property or fixtures prior to such reinstatement or pending at the time of such reinstatement.  Any sums paid to Beneficiary in effecting any reinstatement pursuant to Section 2924c of the California Civil Code shall be applied to the Obligations and to the Beneficiary’s and Trustee’s reasonable costs and expenses in the manner required by California Civil Code Section 2924c.
		

		
			Should Beneficiary elect to sell any portion of the Mortgaged Property which is real property or which is personal property or fixtures that Beneficiary has elected under Section 9-604 of the California Commercial Code to sell together with real property in accordance with the laws governing a sale of real property, Beneficiary or Trustee shall give such notice of default and election to sell as may then be required by law.  Thereafter, upon the expiration of such time and the giving of such notice of sale as may then be required by law, and without the necessity of any demand on Trustor, Trustee, at the time and place specified in the notice of sale, shall sell said real property or part thereof at public auction to the highest bidder for cash in lawful money of the United States.  Trustee may, and upon request of Beneficiary shall, from time to time, postpone any sale hereunder by public announcement thereof at the time and place noticed therefor.
		

		
			If the Mortgaged Property consists of several lots, parcels or items of property, Beneficiary may:  (i) designate the order in which such lots, parcels or items shall be offered for sale or sold, or (ii) elect to sell such lots, parcels or items through a single sale, or 
		

		 

		

			-21-

		

		

			 

		

		

			 

		

 

		

			 

		

		through two or more successive sales, or in any other manner Beneficiary deems in its best interest.
		

		
			Any person, including Trustor, Trustee or Beneficiary, may purchase at any sale hereunder, and Beneficiary shall have the right to purchase at any sale hereunder by crediting upon the bid price the amount of all or any part of the Obligations.
		

		
			If Beneficiary is the successful bidder, it may apply any of the outstanding Obligations secured hereby in settlement of the purchase price.
		

		
			Should Beneficiary desire that more than one sale or other disposition of the Mortgaged Property be conducted, Beneficiary may, at its option, cause the same to be conducted simultaneously, or successively, on the same day, or at such different days or times and in such order as Beneficiary may deem to be in its best interests, and no such sale shall terminate or otherwise affect the lien of this Deed of Trust on any part of the Mortgaged Property not sold until the Obligations have been fully paid.
		

		
			In the event Beneficiary elects to dispose of the Mortgaged Property through more than one sale, Trustor agrees to pay the costs and expenses of each such sale and of any judicial proceedings wherein the same may be made, including reasonable compensation to Trustee and Beneficiary, their agents and counsel, and to pay all expenses, liabilities and advances made or incurred by Trustee in connection with such sale or sales, together with interest on all such advances made by Trustee at the Default Rate provided in the Loan Agreement.
		

		
			Upon any sale hereunder, Trustee shall execute and deliver to the purchaser or purchasers a deed or deeds conveying the property so sold, but without any covenant or warranty whatsoever, express or implied, whereupon such purchaser or purchasers shall be let into immediate possession; and the recitals in any such deed or deeds of facts, such as default, the giving of notice of default and notice of sale, and other facts affecting the regularity or validity of such sale or disposition, shall be conclusive proof of the truth of such facts and any such deed or deeds shall be conclusive against all persons as to such facts recited therein.
		

		
			Proceeds of Sale.
		

		
			The proceeds of any sale made under or by virtue of this Article III, together with all other sums which then may be held by Trustee or Beneficiary under this Deed of Trust, whether under the provisions of this Article III or otherwise, shall be applied as follows:
		

		
			FIRST:  To the payment of the costs and expenses of sale and of any judicial proceedings wherein the same may be made, including reasonable compensation to Trustee and Beneficiary, their agents and counsel, recording and title fees, escrow fees and to the payment of all expenses, liabilities and advances made or incurred by Trustee under this Deed of Trust, together with interest on all advances made by Trustee at the Default Rate.  
		

		
			SECOND:  To the payment of any and all sums expended by Beneficiary under the terms hereof, not then repaid, with accrued interest at the Default Rate, and all other sums required to be paid by Trustor pursuant to any provisions of this Deed of Trust or any of the Loan Documents, including all expenses, liabilities and advances made or incurred by 
		

		 

		

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		Beneficiary under this Deed of Trust or in connection with the enforcement thereof, together with interest thereon as herein provided with the exception of any sums due pursuant to the provisions of Sections 1.9 and 3.7 hereunder, which sums, as consistent with California Code of Civil Procedure section 736 and the right of Beneficiary to enforce its secured environmental provisions notwithstanding California Civil Code section 580d and California Code of Civil Procedure section 726, shall be payable from sale proceeds after application to, and payment in full of all unpaid principal and interest under the Obligations.
		

		
			THIRD:  To the payment of the entire amount then due, owing or unpaid for principal and interest upon the Obligations.
		

		
			FOURTH:  The remainder, if any, to the person or persons legally entitled thereto.
		

		
			Environmental Remedies.
		

		
			At any time after the occurrence and during the continuance of an Event of Default under Trustor’s obligations contained in Section 1.9 hereof but without limiting any other rights of remedies of Beneficiary hereunder, under the Loan Documents or at law or in equity:
		

		
			Beneficiary, acting by itself or through a court-appointed receiver, may enter upon, possess, manage, operate, dispose of, and contract to dispose of the Mortgaged Property or any part thereof; take custody of all accounts; negotiate with any Governmental Authority with respect to the Mortgaged Property’s compliance with Environmental Laws and any Remedial Action; take any action necessary to enforce compliance with Environmental Laws, including spending Rents to abate the problem; make, terminate, enforce or modify Tenant Leases of the Mortgaged Property upon such terms and conditions as Beneficiary deems proper; contract for goods and services, hire agents, employees, and counsel, make repairs, alterations, and improvements to the Mortgaged Property necessary, in Beneficiary’s judgment, to protect the security hereof; and/or take any and all other actions which may be necessary or desirable to comply with Trustor’s Obligations hereunder and under the Documents.
		

		
			With notice (or without notice in a case of emergency, or where the giving of notice is impracticable or where the Tenant or Trustor has abandoned the Mortgaged Property), and without releasing Trustor from any Obligation hereunder, to cure any default of Trustor and, in connection therewith, Beneficiary or its agents, acting by itself or through a court appointed receiver, may enter upon the Mortgaged Property or any part thereof and perform such acts and things as Beneficiary deems necessary or desirable to inspect, investigate, assess, and protect the security hereof, including of any of its other rights:
		

			
	
			
				 (i)
			to obtain a court order to enforce Beneficiary’s right to enter and inspect the Mortgaged Property, including under California Civil Code Section 2929.5, to which the decision of Beneficiary as to whether there exists a Release or threatened Release of  Hazardous Materials onto the Mortgaged Property shall be deemed reasonable and conclusive as between the parties hereto, if made in reasonable and good faith; and

			
	
			
				 (ii)
			to have a receiver appointed, including, under California Code of Civil Procedure section 564 to enforce Beneficiary’s right to enter and inspect the Mortgaged Property for Hazardous Materials.

		

		

		 

		

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		All reasonable costs and expenses reasonably incurred by Beneficiary with respect to the audits, tests, inspections, and examinations which Beneficiary may conduct, including the fees of the engineers, laboratories, contractors, consultants, and attorneys, shall be paid by Trustor.  All such costs and expenses reasonably incurred by Trustee and Beneficiary (including court costs, reasonable consultant fees and attorney fees, whether incurred in litigation or not and whether before or after judgment) shall bear interest at the Default Rate, from the date they are incurred until said sums have been paid.
		

		
			To seek a judgment that Trustor has breached its covenants, representations and/or warranties with respect to Hazardous Materials set forth above in Section 1.9, by commencing and maintaining an action or actions in any court of competent jurisdiction for breach of contract, whether commenced prior to foreclosure of the Mortgaged Property or after foreclosure of the Mortgaged Property, for Environmental Liabilities relating to the Mortgaged Property.  All Environmental Liabilities incurred by Beneficiary (including court costs, consultant fees and reasonable attorneys fees, whether incurred in litigation or not and whether before or after judgment) shall bear interest at the Default Rate from the date of expenditure until said sums have been paid.
		

		
			Trustor acknowledges and agrees that Trustor shall be fully liable for the Environmental Liabilities hereunder, and such liability shall not be limited to the original principal amount of the Obligations secured hereby, and Trustor’s Obligations shall survive the foreclosure, deed in lieu of foreclosure, release, reconveyance, or any other transfer of the Mortgaged Property or this Deed of Trust.
		

		
			Beneficiary may waive its lien against the Mortgaged Property or any portion thereof, whether fixtures or personal property, to the extent such property is found to be environmentally impaired in accordance with  California Code of Civil Procedure section 726.5 and to exercise any and all rights and remedies of an unsecured creditor against Trustor and all of Trustor’s assets and property for the recovery of any deficiency and Environmental Liabilities, including seeking an attachment order under California Code of Civil Procedure section 483.010.  As between Beneficiary and Trustor, for purposes of California Code of Civil Procedure section 726.5, Trustor shall have the burden of proving that Trustor or any related party (or any affiliate or agent of Trustor or any related party) was not in any way negligent in permitting the Release or threatened Release of the Hazardous Materials onto the Mortgaged Property.
		

		
			Trustor acknowledges and agrees that, notwithstanding any term or provision contained herein or in the Loan Documents, all judgments and awards entered against Trustor on the Obligations herein pursuant to a valid waiver of Beneficiary’s lien under California Code of Civil Procedure section 726.5 shall be exceptions to any nonrecourse or exculpatory provision of the Loan Documents, if any, and Trustor shall be fully liable for all judgments and awards entered against Trustor hereunder and such liability shall not be limited to the original principal amount of the Obligations secured by this Deed of Trust but shall include all of the unpaid Obligations and Trustor’s Obligations shall survive deed in lieu of foreclosure, release, reconveyance, or any other transfer of the Mortgaged Property or this Deed of Trust.
		

		
			Waiver of Marshalling.
		

		
			Trustor, for itself and for all persons hereafter claiming through or under it or who may at any time hereafter become holders of liens junior to the lien of this Deed of Trust, 
		

		 

		

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		hereby expressly waives and releases all rights to direct the order in which any of the Mortgaged Property shall be sold in the event of any sale or sales pursuant hereto and to have any of the Mortgaged Property and/or any other property now or hereafter constituting security for any of the indebtedness secured hereby marshaled upon any foreclosure of this Deed of Trust or of any other security for any of said indebtedness.
		

		
			Trustor hereby waives and disclaims any state law or principle of equity which limits the ability of Beneficiary to sell or dispose of the Mortgaged Property in multiple nonjudicial foreclosure actions, rather than one nonjudicial foreclosure action, by parcel rather than en masse, or to obtain and/or force a deficiency judgment in respect of any sale of any piece of Mortgaged Property.
		

		
			Remedies Cumulative.
		

		
			No remedy herein conferred upon or reserved to Trustee or Beneficiary is intended to be exclusive of any other remedy herein or by law provided, but each shall be cumulative and shall be in addition to every other remedy given hereunder or now or hereafter existing at law or in equity or by statute.
		

		
			No delay or omission of Trustee or Beneficiary to exercise any right or power accruing upon any Event of Default shall impair any right or power or shall be construed to be a waiver of any Event of Default or any acquiescence thereof, and every power and remedy given by this Deed of Trust to Trustee or Beneficiary may be exercised from time to time as often as may be deemed expedient by Trustee or Beneficiary.
		

		
			If there exists additional security for the performance of the Obligations secured hereby, Beneficiary, at its sole option, and without limiting or affecting any of its rights or remedies hereunder, may exercise any of the rights and remedies to which it may be entitled hereunder either concurrently with whatever rights and remedies it may have in connection with such other security or in such order as it may determine.
		

		
			Any application of any amounts or any portion thereof held by Beneficiary at any time as additional security hereunder to any indebtedness secured hereby shall not extend or postpone the due dates of any payments due from Trustor to Beneficiary hereunder or under the Obligations or any of the Loan Documents, or change the amounts of any such payments or otherwise be construed to cure or waive any default or notice of default hereunder or invalidate any act done pursuant to any such default or notice.
		

			
	
			
				ARTICLE III
			

MISCELLANEOUS

		
			Notice of Sale.
		

		
			Any power granted to Beneficiary in this Deed of Trust may be exercised, pursuant to a single notice of trustee’s sale, separately with respect to each and every item or parcel of property or with respect to groups and assemblages of property, in Beneficiary’s sole discretion, and may be exercised on separate days or at separate times or in separate places; the 
		

		 

		

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		exercise of such power of sale shall not be an action for purposes of any law or statute pertaining to actions to enforce secured transactions.
		

		
			Non-Waiver.  
		

		
			By accepting payment of any amount after its due date or late performance of any obligation secured hereby, Beneficiary will not waive its right either to require prompt payment when due of any other amounts or prompt performance of any other Obligations so secured or to declare a default for failure to pay or perform when due.  No exercise of any right or remedy by Beneficiary or Trustee hereunder shall constitute a waiver of any other right or remedy herein contained or provided by law.
		

		
			No waiver by Trustee or Beneficiary will be effective unless it is in writing and then only to the extent specifically stated.  Without limiting the generality of the foregoing, any payment made by the Beneficiary for insurance premiums or any other charges affecting the Mortgaged Property, shall not constitute a waiver of Trustor’s default in making such payments and shall not obligate Beneficiary to make any further payments.
		

		
			Severability.
		

		
			If any provision hereof should be held unenforceable or void, then such provision shall be deemed separable from the remaining provisions and shall in no way affect the validity of this Deed of Trust, except that if such provision relates to the payment of any monetary sum, then Beneficiary may at its option declare the Obligations and all other sums secured hereby immediately due and payable.
		

		
			Certain Charges.
		

		
			Trustor agrees to pay Beneficiary for each statement of Beneficiary as to the Obligations secured hereby, furnished at Trustor’s request, the maximum fee allowed by law, or if there be no maximum fee, then such reasonable fee as is charged by Beneficiary as of the time said statement is furnished.
		

		
			Trustor further agrees to pay the lawful charges of Beneficiary for any other service rendered Trustor, or on its behalf, connected with this Deed of Trust or the indebtedness secured hereby, including the delivery to an escrow holder of a request for full or partial reconveyance of this Deed of Trust, transmitting to an escrow holder moneys secured hereby, changing its records pertaining to this Deed of Trust and indebtedness secured hereby to show a new owner of the Mortgaged Property, and replacing an existing policy of insurance held hereunder with another such policy.
		

		
			Notices.  Except as otherwise provided herein, whenever it is provided herein that any notice, demand, request, consent, approval, declaration, or other communication shall or may be given or delivered to or served upon any of the parties by another, or whenever any of the parties desires to give or deliver or serve upon another any communication with respect to this Deed of Trust, each such notice, demand, request, consent, approval, declaration, or other communication shall be in writing (including, unless the context expressly otherwise provides, by facsimile transmission or electronic transmission, provided that any matter transmitted by Trustor by facsimile or electronic transmission shall be followed promptly by delivery of a hard 
		

		 

		

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		copy original thereof) and mailed, faxed or delivered, to the address or facsimile number specified below (or to such other address as shall be designated by such party in a written notice to the other parties).  All such notices, requests and communications shall, when transmitted by overnight delivery, faxed, or electronic transmission be effective when delivered by overnight (next-day) delivery, or transmitted in legible form by facsimile machine or email, respectively, or if mailed, upon the third Business Day after the date deposited into the U.S. mail, or if delivered, upon delivery
		

		
			If to Beneficiary at:
		

		
			 
		

		
			American AgCredit, FLCA
		

		
			5560 S. Broadway 
		

		
			Eureka, California  95503
		

		
			Attention:Account Officer – Pine Ridge Winery
		

		
			 
		

		
			 
		

		
			If to Trustee at: 
		

		
			Fidelity National Title Company
		

		
			1201 Vine Street, Suite 101
		

		
			Healdsburg, CA 95448
		

		
			 
		

		
			If to Trustor, at:
		

		
			Pine Ridge Winery, LLC
		

		
			2700 Napa Valley Corporate Drive, Suite B
		

		
			Napa, CA 94558
		

		
			Attention: Chief Financial Officer
		

		
			or at such other address as may be substituted by notice given as herein provided.  The giving of any notice required hereunder may be waived in writing by the party entitled to receive such notice.  Failure or delay in delivering copies of any notice, demand, request, consent, approval, declaration, or other communication to the persons designated above to receive copies shall in no way adversely affect the effectiveness of such notice, demand, request, consent, approval, declaration, or other communication.
		

		
			Trustor Not Released.
		

		
			Extension of the time for payment or modification of the terms of payment of any sums secured by this Deed of Trust granted by Beneficiary to any successor in interest of Trustor shall not operate to release, in any manner, the liability of the original Trustor except to the extent set forth in such extension or modification.  Beneficiary shall not be required to commence proceedings against such successor or refuse to extend time for payment or otherwise modify the terms of payment of the sums secured by this Deed of Trust by reason of any demand made by the original Trustor.
		

		
			Without affecting the liability of any person, including Trustor, for the payment of any indebtedness secured hereby, or the lien of this Deed of Trust on the remainder 
		

		 

		

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		of the Mortgaged Property for the full amount of any such indebtedness and liability unpaid, Beneficiary and Trustee are respectively empowered as follows:
		

			
	
			
				 (i)
			Beneficiary may from time to time and without notice:

		
			release any person liable for the payment of any of the Obligations, 
		

		
			extend the time or otherwise alter the terms of payment of any of the Obligations, 
		

		
			accept additional real or personal property of any kind as security therefor, whether evidenced by deeds of trust, mortgages, security agreements or any other instruments of security, or
		

		
			alter, substitute or release any property securing the Obligations.
		

			
	
			
				 (ii)
			Trustee may, at any time, and from time to time, upon the written request of Beneficiary

			
	
			
				 (a)
			consent to the making of any map or plat of the Mortgaged Property or any part thereof,

		
			join in granting any easement or creating any restriction thereon,
		

		
			join in any subordination or other agreement affecting this Deed of Trust or the lien or charge hereof, or
		

		
			reconvey, without any warranty, all or part of the Mortgaged Property.
		

		
			Inspection.
		

		
			Upon reasonable notice to Trustor, Beneficiary may at any reasonable time or times make or cause to be made entry upon and inspections of the Mortgaged Property or any part thereof in person or by agent.
		

		
			Reconveyance.
		

		
			Upon the payment in full of all sums secured by this Deed of Trust and upon satisfaction of other conditions set forth in the Loan Agreement, Beneficiary shall request Trustee to reconvey the Mortgaged Property and shall surrender this Deed of Trust and all notes evidencing indebtedness secured by this Deed of Trust to Trustee.
		

		
			Under the conditions referred to in subparagraph (A) above, and upon payment of its fees and any other sums owing to it under this Deed of Trust, Trustee shall reconvey the Mortgaged Property without warranty to the person or persons legally entitled thereto.  Such person or persons shall pay all costs of recordation, if any.
		

		

		

		 

		

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		The recitals in such reconveyance of any matters or facts shall be conclusive proof of the truthfulness thereof.  The grantee in such reconveyance may be described as “the person or persons legally entitled thereto.”
		

		
			Interpretation.
		

		
			Wherever used in this Deed of Trust, unless the context otherwise indicates a contrary intent, or unless otherwise specifically provided herein, the word “Trustor” shall mean and include both Trustor and any subsequent owner or owners of the Mortgaged Property, and the word “Beneficiary” shall mean and include not only the original Beneficiary hereunder but also any future owner and holder, including pledgees, of the Obligations secured hereby.
		

		
			In this Deed of Trust whenever the context so requires the singular number includes the plural and conversely.  Use of the term “including” shall mean “including, but not limited to.”
		

		
			Specific enumeration of rights, powers and remedies of Trustee and Beneficiary and of acts which they may do and of acts to be done and not to be done by Trustor is not to be deemed to exclude or limit the general.
		

		
			The captions, headings and arrangements used in this deed of trust are for convenience only and do not in any way affect, limit, amplify or modify the terms and provisions hereof.
		

		
			No provision of this Deed of Trust shall be construed against or interpreted to the disadvantage of any party hereto by any court or other governmental or judicial authority by reason of such party’s having or being deemed to have structured, drafted or dictated such provision.
		

		
			Consent; Delegation to Sub-Agents.
		

		
			The granting or withholding of consent by Beneficiary to any transaction as required by the terms hereof shall not be deemed a waiver of the right to require consent to future or successive transactions.  Wherever a power of attorney is conferred upon Beneficiary hereunder, it is understood and agreed that such power is conferred with full power of substitution, and Beneficiary may elect in its sole discretion to exercise such power itself or to delegate such power, or any part thereof, to one or more sub agents.
		

		
			Successors and Assigns.
		

		
			Subject to the provisions of Section 1.8 of this Deed of Trust, all of the grants, Obligations, covenants, agreements, terms, provisions and conditions herein shall run with the land and shall apply to, bind and inure to the benefit of, the heirs, administrators, executors, personal representatives, successors, legatees, devisees and assigns of Trustor and the successors in trust of Trustee and the endorsees, transferees, successors and assigns of Beneficiary.
		

		

		

		 

		

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		Governing Law.
		

		
			Except as otherwise as expressly provided in any of the Loan Documents, in all respects, including all matters of construction, validity and performance, this Deed of Trust and the Obligations arising hereunder shall be governed by, and construed and enforced in accordance with, the laws of the State of California applicable to contracts made and performed in such state, without regard to the principles thereof regarding conflict of laws, and any applicable laws of the United States of America.
		

		
			Substitution of Trustee.
		

		
			Beneficiary may remove Trustee at any time or from time to time and appoint a successor trustee, and upon such appointment, all powers, rights, duties and authority of Trustee, as aforesaid, shall thereupon become vested in such successor (the “Substitute Trustee”).
		

		
			The Substitute Trustee shall be appointed by written instrument duly recorded in the county where the Mortgaged Property is located, which appointment may be executed by Beneficiary or in any manner permitted by applicable law.
		

		
			Trustee may resign by written instrument executed by Trustee, containing reference to this Deed of Trust and its place of record, which, when recorded in the office in which this Deed of Trust is recorded, and when delivered to Beneficiary in accordance with Section 4.5 hereof, shall be conclusive proof of the proper appointment of such successor Trustee.
		

		
			No Merger.
		

		
			There shall be no merger of the lien created by this Deed of Trust with the fee estate in the Mortgaged Property, or any interest therein or portion thereof, by reason of the fact that the same person or entity may own or hold (a) the lien created by this Deed of Trust or any interest therein and (b) the fee estate in the Mortgaged Property or any interest therein or portion thereof; and no merger shall occur unless and until Beneficiary and Trustee shall join in a written instrument effecting such merger and shall duly record the same.
		

		
			Consistency with Loan Agreement.
		

		
			The parties hereto agree that all actions taken by the parties hereto and all interpretations of all terms and provisions hereof shall be taken or interpreted (as the case may be) in a manner consistent with the Loan Agreement.
		

		
			Request for Notices.
		

		
			Trustor hereby requests that a copy of any notice of default and notice of sale as may be required by law be mailed to Trustor at its address above stated. 
		

		
			[remainder of page intentionally left blank; signature is on next page.]
		

		
			 
		

		

		

		 

		

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		IN WITNESS WHEREOF, the undersigned has executed this Deed of Trust the day and year first hereinabove written.
		

		
			Trustor:
		

		
			Pine Ridge Winery, LLC, a Delaware limited liability company
		

		
			 
		

		
			By:      /s/ Shannon McLaren_
		

		
			Name: Shannon McLaren
		

		
			Title:   CFO, Crimson Wine Group, Ltd., Manager
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			[Signature Page Trust Deed]
		

		 

		

			-31-

		

		

			 

		

		

			 

		

 

		

			 

		

		ACKNOWLEDGMENT OF INSTRUMENTS
		

		
			 
		

		
			 
		

			
					
						 

					
						A Notary Public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document.

				

		
			 
		

		
			 
		

		
			STATE OF CALIFORNIA)
		

		
			)SS.
		

		
			COUNTY OF)
		

		
			 
		

		
			On __________ before me, , Notary Public, personally appeared ________________________________ who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
		

		
			 
		

		
			I certify under penalty of perjury under the laws of the State of California that the foregoing paragraph is true and correct.
		

		
			 
		

		
			WITNESS my hand and official seal.
		

		
			
		

		
			Signature _______________________________(Seal)
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			[Signature Page Trust Deed]
		

		 

		

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		EXHIBIT A
		

		
			(Description of the Real Property)
		

		
			THE REAL PROPERTY REFERRED TO HEREIN BELOW IS SITUATED IN THE CITY OF HEALDSBURG, COUNTY OF SONOMA, STATE OF CALIFORNIA AND IS DESCRIBED AS FOLLOWS:
		

		
			Tract One (APN: 089-120-090-000):
		

		
			Parcel One:
		

		
			Commencing at a spike in the center of a 60 foot street known as Hassett Lane, at the Northwesterly corner of the 2.69 acre tract conveyed by Exchange Bank, a corporation, to Scatena Wine Company, a corporation; thence East 30 feet to an iron pipe on the Easterly line of Hassett Lane, and at the point of intersection of the lands herein described and the lands conveyed by C.R. Petrie et ux, to Marion F. Getts, et ux, by deed dated March 6, 1944, and recorded in Liber 605 of Official Records, Page 101; thence along the dividing line of the premises herein described and said lands, East 235.8 feet to an iron pipe; North 88° 23' 52" East, 269.88 feet to an iron pipe on the Westerly line of the Northwestern Pacific Railroad right of way; thence along the Westerly line of said right of way, South 3° 30' East, 524.5 feet to an iron pipe; South 4° East, 109 feet to an iron pipe at the Northeasterly corner of the one acre tract conveyed by Floyd D. Darby, et ux, to John F. Miller, et al, by deed dated February 16, 1928, and recorded in Liber 195 of Official Records, Page 316, Sonoma County Records; thence along the dividing line between said lands, North 88° 30' West, 209.85 feet to an iron pipe; thence along the dividing line of the premises herein described and said tract and of the 2.63 acre tract conveyed by John F. Miller, et ux, to John F. Miller, et al, by deed dated April 23, 1928 and recorded in Liber 195 of Official Records, Page 389, Sonoma County Records, South 2° West, 284.9 feet to an iron pipe; North 88° West, 50.5 feet to an iron bar at the Northwesterly corner of said 2.63 acre tract; thence along the dividing line of the premises herein described and the 1.31 acre tract (conveyed in Parcel 3) of the deed made by R. B. Tedford to Mary A. Tedford, dated May 25, 1925, and recorded in Liber 160 of Official Records, Page 222, West, 265.68 feet to an iron pipe on the Easterly line of Hassett Lane; thence West 30 feet to a spike in the center of said lane; thence along the center of Hassett Lane, North 521.37 feet to the Southwesterly corner of the tract of land conveyed by Orsola Nurisso to Louis Nurisso, by deed dated February 17, 1940, and recorded in Liber 495 of Official Records, Page 310, as modified by that Boundary Line Agreement between Seghesio Wineries, Inc., a California Corporation, and Charles H. Nurisso and Margaret Nurisso, his wife, recorded as Document Number 81-031321, both Sonoma County Records; thence along the dividing line between the premises herein described and said land of Nurisso, North 88° 30' East, 275 feet to an iron pipe; North 0° 30' West, 147 feet to an iron bar; South 88° 30' West, 275 feet to a spike in the center of Hassett Lane; thence along the center of said lane, North 0° 30' West, 234 feet to the point of commencement.
		

		
			Excepting therefrom that portion lying in Hassett Lane, being the Easterly 30 feet thereof.
		

		

		

		 

		

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		Also excepting therefrom that land conveyed to the City of Healdsburg, a Municipal Corporation by Document Number 2011-003827, Sonoma County Records, and described therein as follows:
		

		
			Being a portion of the Lands of Seghesio Wineries, Inc., as described in that deed recorded in Book 2111 of Official Records at Page 81, Sonoma County Records and being more particularly described as follows:
		

		
			Beginning at a 1/2" rebar with aluminum cap stamped LS 4769 marking the Northeasterly corner of said Lands of Seghesio Wineries, Inc.; thence from said point of beginning along the Northerly boundary of said Lands of Seghesio Wineries, Inc., South 87° 12' 50" West, 41.66 feet; thence leaving said Northerly boundary and proceeding South 34° 25' 49" East, 39.68 feet; thence along the arc of a tangent circular curve to the right, with a radius of 92.50 feet, through a central angle of 17° 25' 49", a distance of 28.14 feet; thence South 17° 00' 00" East, 52.89 feet to a point of the Easterly boundary of said Lands of Seghesio Wineries, Inc.; thence along said Easterly boundary, North 04° 22' 22" West, 110.92 feet back to the point of beginning.
		

		
			Basis of Bearing: Found monuments near Grove Street as shown on that Record of Survey filed in Book 437 of Maps at Page 23, Sonoma County Records; defined by the course North 01° 23' 42" West, 900.09 feet.
		

		
			Also excepting therefrom, the following described parcel:
		

		
			Being a portion of Lands of Seghesio Wineries, Inc., a California Corporation, per deed recorded in Book 2111 of Official Records at Page 81, Sonoma County Records, and being more particularly described as follows:
		

		
			Beginning at a spike in the center of a 60 foot street formerly known as Hassett Lane, now known as Grove Street, at the Northwesterly corner of the 2.69 acre tract conveyed by Exchange Bank, a corporation, to Scatena Wine Company, a corporation; thence East 30 feet to an iron pipe on the Easterly line of Hassett Lane, and at the point of intersection of the lands herein described and the lands conveyed by C. R. Petrie et ux, to Marion F. Getts, et ux, by deed dated March 6, 1944, and recorded in Liber 605 of Official Records, Page 101; thence along the dividing line of the premises herein described and said lands, East 235.8 feet to an iron pipe; thence North 88° 23' 52" East, 10.0 feet to an iron pipe tagged LS3216 as shown on that Record of Survey filed in Book 437 of Maps at Page 23, Sonoma County Records; thence leaving said dividing line and proceeding parallel to said Grove Street, South 0° 30' East, 230 feet to the Northerly boundary of the tract of land conveyed by Orsola Nurisso to Louis Nurisso by deed dated February 17, 1940, and recorded in Liber 495 of Official Records at Page 310, as modified by that Boundary Line Agreement between Seghesio Wineries, Inc., a California Corporation, and Charles H. Nurisso and Margaret Nurisso, his wife, recorded as Document Number 81-031321, both Sonoma County Records; thence along said Northerly boundary, South 88° 30' West, 276 feet to the center of said Grove Street; thence along said center of Grove Street, North 0° 30' West, 233 feet back to the aforementioned point of beginning.
		

		
			Excepting therefrom that portion lying in Grove Street, being the Easterly 30 feet along the last course viz, North 0° 30' West, 233 feet, back to the aforementioned point of beginning.
		

		

		

		 

		

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		Pursuant to Lot Line Adjustment file LLA09-4 on file with the City of Healdsburg, as disclosed by that certain Grant Deed, recorded April 20, 2011, Instrument No. 2011035422, of Official Records.
		

		
			Parcel Two:
		

		
			An easement of right of way 40 feet in width along and within the Westerly 40 feet of that certain tract described in the Quitclaim Deed from Miller Fruit Company, a partnership, et al, to Edward K. Nielsen, a married man, dated June 30, 1965, recorded July 27, 1965 in Book 2144 Official Records, Page 913, Sonoma County Records, or as same is reserved in said Quitclaim Deed.
		

		
			Tract Two (APN: 002-101-036-000 and 002-101-037-000):
		

		
			Parcel One:
		

		
			Being the Lands of Seghesio Wineries, Inc., a California Corporation, as described in that deed recorded in Book 2260 of Official Records at Page 429, and a portion of the Lands of Seghesio Wineries, Inc., a California Corporation, as described in that deed recorded in Book 2111 of Official Records, at Page 81, both Sonoma County Records, and being more particularly described as follows:
		

		
			Being a part of the Lands of Miller Fruit Company, as described in that deed recorded in Book 1272 of Official Records, at Page 625, Sonoma County Records, and being more particularly described as follows:
		

		
			Commencing at a 1/2" iron pipe set in the Northerly right of way line of Grant Street at the Southwest corner of Parcel 1 of said Lands of Miller Fruit Company as above mentioned; thence from said Point of Commencement, North 0° 28' East, 300.77 feet to a 1/2" iron pipe set and the point of beginning of the parcel to be herein described; Thence from said point of beginning, North 89° 23' West, 157.74 feet to a 3/4" iron pipe found in the Westerly line of said Lands of Miller Fruit Co.; thence North 0° 07' East, 173.37 feet to a point (deed 180.84 feet); thence South 89° 56' East, 50.40 feet to a 3/4" iron pipe found; thence North 2° 23' East, 284.81 feet to a point, from which point a 1/2" iron pipe found bears South 2° 23' West, 0.97 feet; thence South 88° 07' East, 204.67 feet to a point in the Westerly line of the N. W. P. Railroad; thence along said line South 3° 20' 30" East, 155.00 feet to a 1/2" iron pipe tagged LS 3216 as shown on that Record of Survey filed in Book 628 of Maps at Page 29, Sonoma County Records; thence South 86° 39' 30" West, 7.00 feet to a 1/2" iron pipe tagged LS 3216 as shown on said Record of Survey; thence South 3° 20' 30" East, 46.00 feet; thence South 86° 39' 30" West, 12.00 feet to a 1/2" iron pipe tagged LS 3216 as shown on said Record of Survey; thence South 3° 20' 30" East, 186.00 feet; thence South 57° 57' 10" West, 133.60 feet to a 1/2" iron pipe tagged LS 3216 as shown on said Record of Survey, to the point of beginning of the herein above described parcel of land.
		

		
			Pursuant to Lot Line Adjustment file LLA09-4 on file with the City of Healdsburg, as disclosed by that certain Grant Deed, recorded April 20, 2011, Instrument No. 2011035422, of Official Records.
		

		
			Parcel Two:
		

		

		

		 

		

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		An easement of right of way 40 feet in width along and within the Westerly 40 feet of that certain tract described in the Quitclaim Deed from Miller Fruit Company, a partnership, et al, to Edward K. Nielsen, a married man, dated June 30, 1965, recorded July 27, 1965 in Book 2144 Official Records, Page 913, Sonoma County Records, or as same is reserved in said Quitclaim Deed.
		

		
			Tract Three (APN: 002-101-005-000 and 089-120-036-000):
		

		
			Parcel One:
		

		
			Being a  portion of both Parcels 1 and 2, of the lands of the Miller Fruit Company as described in that Deed recorded in Book 1272 of Official Records, Page 625, and being more particularly described as follows:
		

		
			Beginning at a point on the Westerly line of the right of way of the Northwestern Pacific Railway being the Southeast corner of the land conveyed by Minnie K. Miller and J. F. Miller, her husband to Fortuneto Scatena, and others, by Deed dated December 6, 1907 and recorded in the office of the County Recorder of Sonoma County, in Book 245 of Deeds at Page 305; thence Southerly along the Westerly right of way line of the Northwestern Pacific Railway 155 feet to the point of commencement; thence continuing along said Westerly right of way line 232.00 feet to a point;  thence at right angles 19.00 feet in a Westerly direction to a point; thence in a Northerly direction and parallel to the aforesaid right of way line 186.50 feet to a point; thence at right angles 12.00 feet in an Easterly direction to a point; thence in a Northerly direction and parallel to the aforesaid right of way line 46.00 feet to a point; thence at right angles Easterly to the point of commencement a point on the Westerly right of way line of the Northwestern Pacific Railway.
		

		
			Parcel Two:
		

		
			An easement of right of way 15.00 feet in width over and along an existing improved road leading from Grant Street, Northerly a distance of 415 feet to the Southwest corner of the real property being purchased by buyers; and thence continuing Northerly along the Westerly boundary of said property and contiguous thereto for a distance of 166 feet, more or less, to the Northerly line of the warehouse building, extended for ingress, egress and loading purpose to be used in common by buyers and sellers, as disclosed in that certain, "Contract of Sale of Real Estate", recorded April 17, 1961 in Book 1884 of Official Records, Page 532, Sonoma County Records.
		

		
			 
		

		 

		

			-36-

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