Document:

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                                                                   EXHIBIT 10.34

                          STOCK CONTRIBUTION AGREEMENT

         THIS STOCK CONTRIBUTION AGREEMENT (hereinafter "Agreement"), is made as
of February 23, 1999, by and between Frontec AB ("Frontec"), a Swedish
corporation (Org. No. 556272-5092), on the one hand, and Arctic, INC., a
Delaware corporation ("Arctic"), on the other hand.

                              W I T N E S S E T H :

         WHEREAS, Frontec Integra AB, a Swedish corporation, ("Integra" or the
"Contributed Company") is a wholly-owned subsidiary of Frontec; and

         WHEREAS, Frontec owns all of the common shares (the "Transferred
Shares") of Integra; and

         WHEREAS, Frontec wishes to contribute to Arctic the Transferred Shares
in consideration for the issuance to Frontec of all of the capital stock of
Arctic, consisting of 34,062,058 shares of Common Stock of Arctic, as more
particularly set forth herein.

         NOW,THEREFORE, the parties hereto, intending to be bound hereby, agree
as follows:

         Section 1.  ISSUANCE OF STOCK

         Upon the terms and subject to the conditions of this Agreement and
effective as of the date hereof, Frontec shall make a contribution (the
"Contribution") to the capital of Arctic of the Transferred Shares of Integra.
In consideration for the contribution of the Transferred Shares by Frontec to
Arctic, which Transferred Shares constitute all of the issued and outstanding
capital stock of Integra, Arctic hereby agrees to issue to Frontec 34,062,058
shares of common stock of Arctic, constituting all of the issued and outstanding
capital stock of Arctic.

         Section 2.  REPRESENTATIONS OF FRONTEC

         Frontec hereby represents and warrants to Arctic as follows:

         2.1 ORGANIZATION AND GOOD STANDING. Frontec and Integra are companies
duly organized, validly existing, and in good standing under the laws of Sweden.

         2.2 AUTHORITY. This Agreement constitutes the legal, valid, and binding
obligation of Frontec, enforceable against Frontec in accordance with its terms.
Frontec has the absolute and unrestricted right, power, authority, and capacity
to execute and deliver this Agreement and to perform its obligations under this
Agreement. Neither the execution and delivery of this Agreement by Frontec nor
the consummation or performance of any of the transactions contemplated hereby
or thereby will contravene, conflict with, or result in a violation of (A) any
provision of the organizational documents of Frontec, (B) any resolution adopted
by the

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members, managers, board of directors or the stockholders of Frontec or
(C) any law, statute, regulation, decree, license, material agreement, order, or
other restriction applicable to Frontec, the Contributed Company or the
Transferred Shares.

         2.3 CAPITALIZATION. The Transferred Shares represent all of the issued
and outstanding equity securities of the Contributed Company. Frontec is the
record and beneficial owner and holder of all such Transferred Shares, free and
clear of all encumbrances. All of such Transferred Shares have been duly
authorized and validly issued and are fully paid and non-assessable.

         2.4 FINANCIAL STATEMENTS. Frontec has delivered to Integra a pro forma,
consolidated balance sheet of the Contributed Companies, as defined in that
certain Stock Contribution Agreement dated February 21, 1999, by and between
Frontec and Integra, as if they existed at December 31, 1998 (the "Balance
Sheet") and related Report of Factual Findings of Ohrlings Coopers & Lybrand AB,
copies of which are attached hereto as EXHIBIT A. Subject to certain
inter-company adjustments which are in each case and in the aggregate not
material, at the date hereof, the Contributed Company or its subsidiaries, as
the case may be, own (a) all the assets reflected on their books and records
(except for assets sold or otherwise disposed of since the date of the Balance
Sheet in the ordinary course of business), and (b) all the assets purchased or
otherwise acquired since the date of the Balance Sheet and used primarily in the
AMTrix business (except for assets acquired and sold or otherwise disposed of
since the date of the Balance Sheet in the ordinary course of business).

         2.5 OWNERSHIP OF SUBSIDIARIES. The Frontec AB is the record and
beneficial owner and holder of all of the issued and outstanding equity
securities of the Contributed Company. Frontec AB holds the shares in the
Contributed Company free and clear of all claims, liens, encumbrances, voting
agreements or rights of any nature of any third party (each an "Encumbrance").
All of such shares of the Contributed Company have been duly authorized and
validly issued and are fully paid and non-assessable.

         2.6 TRANSFER OF TRANSFERRED SHARES. Frontec owns all right, title and
interest in and to the Transferred Shares, free and clear of any Encumbrances.
Upon consummation of the transactions contemplated hereby, Arctic will have
acquired good and valid title in and to the Transferred Shares, free and clear
of any Encumbrances.

         Section 3.  MISCELLANEOUS

         3.1. GOVERNING LAW. All questions concerning the validity, operation,
interpretation, and construction of this Agreement will be governed by and
determined in accordance with the laws of the State of Delaware, without giving
effect to its conflicts of laws principles.

         3.2 ENTIRE AGREEMENT: AMENDMENT. The parties hereto acknowledge this
Agreement is the complete and exclusive statement of their agreement relating to
the subject matter hereof and supersedes all understandings, representations,
conditions, warranties, covenants, and other communications, between the parties
relating hereto. This Agreement may be amended only by a

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subsequent writing that specifically refers to this Agreement and is signed by
all parties and no other act, document, usage, or custom shall be deemed to
amend this Agreement.

         3.3 SEVERABILITY. Whenever possible, each provision of this Agreement
shall be interpreted in such manner so as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be invalid,
illegal or unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability shall not affect
any other provision of this Agreement. If any provision contained in this
Agreement is determined to be invalid, illegal or unenforceable as written, a
court of competent jurisdiction shall, at any party's request, reform the terms
of this Agreement to the extent necessary to cause such otherwise invalid
provisions to be enforceable under applicable law.

         3.4 SECTION HEADINGS. The captions to the Sections in this Agreement
are for reference only and shall not affect the meaning or interpretation
hereof.

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

         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective duly authorized representatives as of the date
first above written.

FRONTEC AB                                  ARTIC, INC.

By: _______________________________         By:  ____________________________
         Olof Englund                                    Olof Englund

By:   _______________________________
         Jan Westlund

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[LOGO]

                              CREDIT AGREEMENT

                           (CROP LINE OF CREDIT)

     This Agreement (the "Agreement") is made and entered into as of August
8, 2000, by and between SANWA BANK CALIFORNIA (the "Bank") and SCHEID
VINEYARDS CALIFORNIA INC. (the "Borrower"), on the terms and conditions that
follow

                                   SECTION

                                      1

                                 DEFINITIONS

1.1   CERTAIN DEFINED TERMS:  Unless elsewhere defined in this Agreement, the
      following terms shall have the following meanings (such meanings to be
      generally applicable to the singular and plural forms of the terms
      defined)

      1.1.1   "ADVANCE": shall mean an advance to the Borrower under the
              credit facility (ies) described in Section 2.

      1.1.2   "BUSINESS DAY": shall mean a day, other than a Saturday or
              Sunday, on which commercial banks are open for business in
              California.

      1.1.3   "CASH FLOW": shall mean the sum of net income after tax and
              exclusive of extraordinary gains, plus depreciation and
              amortization expense minus dividends and distributions.

      1.1.4   "COLLATERAL": shall mean the property described in Section 3,
              together with any other personal or real property in which the
              Bank may be granted a lien or security interest to secure
              payment of the Obligations.

      1.1.5   "CROPS": shall mean the crops described in Section 3.

      1.1.6   "CROP BUDGET": shall mean the crop budget dated July 15, 2000
              for the crop production year commencing on December 31, 1999
              and ending on November 30, 2000 (the "Current Crop Year") which
              budget is attached hereto as Exhibit "A".

      1.1.7   "2001 CROP BUDGET": shall mean the crop budget for the crop
              production year commencing on December 31, 2000 and ending on
              November 30, 2001 (the "2001 Crop Year").

      1.1.8   "CROP LINE OF CREDIT": shall mean the credit facility described
              as such in  Section 2.

      1.1.9   "CURRENT ASSETS": shall mean current assets as determined in
              accordance with generally accepted accounting principles, less
              all amounts due from affiliates, officers or employees.

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      1.1.10  "CURRENT LIABILITIES": shall mean current liabilities as
              determined in accordance with generally accepted accounting
              principles, including any negative cash balance on the
              Borrower's financial statement.

      1.1.11  "DEBT": shall mean all liabilities of the Borrower less
              Subordinated Debt, if any.

      1.1.12  "EFFECTIVE TANGIBLE NET WORTH": shall mean the Borrower's
              stated net worth plus Subordinated Debt but less all intangible
              assets of the Borrower (i.e., goodwill, trademarks, patents,
              copyrights, organization expense, and similar intangible items
              including, but not limited to, investments in and all amounts
              due from affiliates, officers or employees).

      1.1.13  "ENVIRONMENTAL CLAIMS": shall mean all claims, however
              asserted, by any governmental authority or other person
              alleging potential liability or responsibility for violation of
              any Environmental Law or for release or injury to the
              environment or threat to public health, personal injury
              (including sickness, disease or death), property damage,
              natural resources damage, or otherwise alleging liability or
              responsibility for damages (punitive or otherwise), cleanup,
              removal, remedial or response costs, restitution, civil or
              criminal penalties, injunctive relief, or other type of
              relief, resulting from or based upon (a) the presence,
              placement, discharge, emission or release (including
              intentional and unintentional, negligent and non-negligent,
              sudden or non-sudden, accidental or non-accidental placement,
              spills, leaks, discharges, emissions or releases) of any
              Hazardous Material at, in, or from property, whether or not
              owned by the Borrower, or (b) any other circumstances forming
              the basis of any violation, or alleged violation, of any
              Environmental Law.

      1.1.14  "ENVIRONMENTAL LAWS": shall mean all federal, state or local
              laws, statutes, common law duties, rules, regulations,
              ordinances and codes, together with all administrative orders,
              directed duties, requests, licenses, authorizations and permits
              of, and agreements with, any governmental authorities, in each
              case relating to environmental, health, safety and land use
              matters; including the Comprehensive Environmental Response,
              Compensation and Liability Act of 1980 ("CERCLA"), the Clean
              Air Act, the Federal Water Pollution Control Act of 1972, the
              Solid Waste Disposal Act, the Federal Resource Conversation and
              Recovery Act, the Toxic Substances Control Act, the Emergency
              Planning and Community Right-to-Know Act, the California
              Hazardous Waste Control Law, the California Solid Waste
              Management, Resource, Recovery and Recycling Act, the
              California Water Code and the California Health and Safety Code.

      1.1.15  "ENVIRONMENTAL PERMITS": shall have the meaning provided in
              Section 5.11 hereof.

      1.1.16  "EQUIPMENT": shall mean equipment as defined in the California
              Uniform Commercial Code.

      1.1.17  "ERISA": shall mean the Employee Retirement Income Security Act
              of 1974, as amended from time to time, including (unless the
              context otherwise requires) any rules or regulations
              promulgated thereunder.

      1.1.18  "EVENT OF DEFAULT": shall have the meaning set forth in Section
              7.

      1.1.19  "EXPIRATION DATE": shall mean June 5, 2002, or the date of
              termination of the Bank's commitment to lend under this
              Agreement pursuant to Section 8, whichever shall occur first.

      1.1.20  "FIXED RATE ADVANCE": shall have the respective meaning as it
              is defined for each facility under Section 2, hereof if
              applicable.

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      1.1.21  "FIXED RATE": shall have the respective meaning as it is
              defined for each facility under Section 2, hereof if applicable.

      1.1.22  "HAZARDOUS MATERIALS": shall mean all those substances which
              are regulated by, or which may form the basis of liability
              under, any Environmental Law, including all substances
              identified under any Environmental Law as a pollutant,
              contaminant, hazardous waste, hazardous constituent, special
              waste, hazardous substance, hazardous material, or toxic
              substance, or petroleum or petroleum derived substance or waste.

      1.1.23  "INDEBTEDNESS": shall mean, with respect to the Borrower, (i)
              all indebtedness for borrowed money or for the deferred
              purchase price of property or services in respect of which the
              Borrower is liable, contingently or otherwise, as obligor,
              guarantor or otherwise, or in respect of which the Borrower
              otherwise assures a creditor against loss and (ii) obligations
              under leases which shall have been or should be, in accordance
              with generally accepted accounting principles, reported as
              capital leases in respect of which the Borrower is liable,
              contingently or otherwise, or in respect of which the Borrower
              otherwise assures a creditor against loss.

      1.1.24  "INTEREST PERIOD": shall have the respective meaning as it is
              defined for each facility under Section 2, hereof.

      1.1.25  "INVENTORY": shall mean the inventory described in Section 3.

      1.1.26  "LINE ACCOUNT": shall have the meaning provided in Section 2.2
              hereof.

      1.1.27  "OBLIGATIONS": shall mean all amounts owing by the Borrower to
              the Bank pursuant to this Agreement including, but not limited
              to, the unpaid principal amount of Advances.

      1.1.28  "ORDINARY COURSE OF BUSINESS": shall mean, with respect to any
              transaction involving the Borrower or any of its subsidiaries
              or affiliates, the ordinary course of the business of the
              Borrower or such subsidiary or affiliate, as conducted
              generally in accordance with past practice and undertaken in
              good faith and not for the purpose of evading any covenant or
              restriction in this Agreement or in any other document,
              instrument or agreement executed in connection herewith.

      1.1.29  "PERMITTED LIENS": shall mean: (i) liens and security interests
              securing indebtedness owed by the Borrower to the Bank, (ii)
              liens for taxes, assessments or similar charges not yet due;
              (iii) liens of materialmen, mechanics, warehousemen, or
              carriers or other like liens arising in the Ordinary Course of
              Business and securing obligations which are not yet delinquent;
              (iv) purchase money liens or purchase money security interests
              upon or in any property acquired or held by the Borrower in the
              Ordinary Course of Business to secure Indebtedness outstanding
              on the date hereof or permitted to be incurred under Section
              5.7 and hereof; (v) liens and security interests which, as of
              the date hereof, have been disclosed to and approved by the
              Bank in writing; and (vi) those liens and security interests
              which in the aggregate constitute an immaterial and
              insignificant monetary amount with respect to the net value of
              the Borrower's assets.

      1.1.30  "REFERENCE RATE": shall mean an index for a variable interest
              rate which is quoted, published or announced by Bank as its
              reference rate and as to which loans may be made by Bank at,
              above or below such rate.

      1.1.31  "SUBORDINATED DEBT": shall mean such liabilities of the Borrower
              which have been subordinated to those owed to the Bank in a
              manner reasonably acceptable to the Bank.

                                     -3-

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    1.1.32  "VARIABLE RATE ADVANCE": shall have the respective meaning as it
            is defined for each facility under Section 2, hereof

    1.1.33  "VARIABLE RATE": shall have the respective meaning as it is
            defined for each facility under Section 2, hereof

    1.1.34  "WORKING CAPITAL": shall mean Current Assets minus Current
            Liabilities.

1.2  ACCOUNTING TERMS  All references to financial statements, assets,
liabilities, and similar accounting items not specifically defined herein
shall mean such financial statements or such items prepared or determined in
accordance with generally accepted accounting principles consistently applied
and, except where otherwise specified, all financial data submitted pursuant
to this Agreement shall be prepared in accordance with such principles.

1.3  OTHER TERMS  Other terms not otherwise defined shall have the meanings
attributed to such terms in the California Uniform Commercial Code.

                                   SECTION

                                      2

                              CREDIT FACILITIES

2.1  THE CROP LINE OF CREDIT

     2.1.1  THE CROP LINE OF CREDIT: On terms and conditions as set forth
            herein, the Bank agrees to make Advances to the Borrower from
            time to time from the date hereof to the Expiration Date,
            provided the aggregate amount of such Advances outstanding at any
            time does not exceed $19,000,000.00 through December 5, 2000 and
            $15,000,000 thereafter.  Within the foregoing limits, the Borrower
            may borrow, partially or wholly prepay, and reborrow under this
            Section 2.1. Advances made under the Crop Line of Credit shall be
            used to fund the Borrower's farming operations, which Advances
            shall be made in accordance with the relevant Crop Budget or 2001
            Crop Budget.

     2.1.2  MAKING LINE ADVANCES: Each Advance shall be conclusively deemed
            to have been made at the request of and for the benefit of the
            Borrower (i) when credited to any deposit account of the Borrower
            maintained with the Bank or (ii) when paid in accordance with the
            Borrower's written instructions. Subject to the requirements of
            Section 4 and provided such request is made in a timely manner as
            provided in Section 2.1.5 below, Advances shall be made by the
            Bank under the Crop Line of Credit.

     2.1.3  REPAYMENT: On the Expiration Date, the Borrower hereby promises
            and agrees to pay to the Bank in full the aggregate unpaid
            principal amount of all Advances then outstanding under the Crop
            Line of Credit together with all accrued and unpaid interest
            thereon.

     2.1.4  INTEREST ON ADVANCES: Interest shall accrue from the date of each
            Advance under the Crop Line of Credit at one of the following
            rates,  as quoted by the Bank and as elected by the Borrower
            pursuant to Subsection (i) or Subsection (ii) below:

            (i)      VARIABLE RATE ADVANCES: A variable rate per annum
                     equivalent to the Reference Rate (the "Variable Rate").
                     Interest shall be adjusted concurrently with any change
                     in the Reference Rate.  An Advance based upon the
                     Variable Rate is hereinafter referred to as a "Variable
                     Rate Advance"

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            (ii)     FIXED RATE ADVANCES. A fixed rate quoted by Bank in its
                     sole discretion for each Advance (the "Fixed Rate") and
                     for such period of time that the Bank may quote and
                     offer, provided that any such period of time shall be
                     for at least 30 days and provided that any such period
                     of time does not extend beyond the Expiration Date (the
                     "Interest Period") for Advances in the minimum amount of
                     $500,000.00.  Advances based upon the Fixed Rate are
                     hereinafter referred to as "Fixed Rate Advances."

            Interest on any Advance shall be computed on the basis of 360
            days per year, but charged on the actual number of days elapsed.

            The Borrower hereby promises and agrees to pay interest in arrears
            on Variable Rate Advances and Fixed Rate Advances on the 5th
            calendar day of each March, June, September, and December.

            If interest is not paid as and when it is due, it shall be added
            to the principal, become and be treated as a part hereof, and
            shall thereafter bear like interest.

     2.1.5  NOTICE OF BORROWING.  Upon written or telephonic notice which
            shall be received by the Bank at or before 2:00 p.m. (California
            time) on a Business Day, the Borrower nay borrow under the Crop
            Line of Credit by requesting a Variable Rate Advance or a Fixed
            Rate Advance.  A Variable Rate Advance or a Fixed Rate Advance
            may be made on the day notice is received by the Bank; provided,
            however, that if the Bank shall not have received notice at or
            before 2:00 p.m. on the day such Advance is requested to be made,
            such Variable Rate Advance or Fixed Rate Advance may, at the
            Bank's option, be made on the next Business Day.

     2.1.6  NOTICE OF ELECTION TO ADJUST INTEREST RATE:  The Borrower may
            elect:

            (i)     That interest on a Variable Rate Advance shall be
                    adjusted to accrue at the Fixed Rate; provided,
                    however, that such notice shall be received by the Bank no
                    later than 2:00 p.m. on the Business Day on which the
                    Borrower requests that interest be adjusted to accrue at
                    the Fixed Rate.

            (ii)    That interest on a Fixed Rate Advance shall continue to
                    accrue at a newly quoted Fixed Rate or shall be adjusted
                    to commence to accrue at the Variable Rate; provided,
                    however, that such notice shall be received by the Bank
                    no later than 2:00 p.m. on the last day of the Interest
                    Period pertaining to such Fixed Rate Advance.  If the
                    Bank shall not have received (as prescribed herein) of
                    the Borrower's election that interest on any Fixed Rate
                    Advance shall continue to accrue at the newly quoted
                    Fixed Rate the Borrower shall be deemed to have elected
                    that interest thereon shall be adjusted to accrue at the
                    Variable Rate upon the expiration of the Interest Period
                    pertaining to such Advance.

     2.1.7  PREPAYMENT:  The Borrower may prepay any Advance in whole or in
            part, at any time and without penalty, provided, however, that:
            (i) any partial prepayment shall first be applied at the Bank's
            option, to accrued and unpaid interest and next to the outstanding
            principal balance; and (ii) during any period of time in which
            interest is accruing on any Advance on the basis of the Fixed
            Rate, no prepayment shall be made except on a day which is the last
            day of the Interest Period pertaining thereto.  If the whole or
            any part of any Fixed Rate Advance is prepaid by reason of
            acceleration or otherwise, the Borrower shall, upon the Bank's
            request, promptly pay to and indemnify the Bank for all costs,
            expenses and any loss (including loss of future interest income)
            actually incurred by the Bank and any loss (including loss of
            profit resulting from the re-employment if funds) reasonably
            deemed sustained by the Bank as a consequence of such prepayment.

                                      -5-

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            The Bank shall be entitled to fund all or any portion of its
            Advances in any manner it may determine in its sole discretion,
            but all calculations and transactions hereunder shall be
            conducted as though the Bank actually funded all Advances through
            the purchase of dollar deposits bearing interest at the same rate
            as U.S. Treasury securities in the amount of the relevant Advance
            and in maturities corresponding to the date of such purchase to
            the Expiration Date hereunder.

     2.1.8  CONVERSION FROM FIXED RATE TO VARIABLE RATE  In the event that
            the Bank shall at any time determine that the accrual of interest
            on the basis of the Fixed Rate (i) is infeasible because the Bank
            is unable to determine the Fixed Rate due to the unavailability
            of U.S. dollar deposits, contracts or certificates of deposit in
            an amount approximately equal to the amount of the relevant
            Advance and for a period of time approximately equal to the relevant
            Interest Period or (ii) is or has become unlawful or infeasible by
            reason of the Bank's compliance with any new law, rule, regulation,
            guideline or order, or any new interpretation of any present law,
            rule, regulation, guideline or order, then the Bank shall give
            telephonic notice thereof (confirmed in writing) to the Borrower,
            in which event any Advance bearing interest at the Fixed Rate
            shall be deemed to be a Variable Rate Advance and interest shall
            thereupon immediately accrue at the Variable Rate.

     2.1.9  COMMITMENT FEE  The Borrower agrees to pay to the Bank a
            commitment fee on the unused portion of the Crop Line of Credit
            of .10% per annum, payable quarterly in arrears, commencing
            October 1, 2000, and computed on a year of 360 days for actual
            days elapsed.

2.2  LINE ACCOUNT:

     2.2.1  The Bank shall maintain on its books a record of account in which
            the Bank shall make entries for each Advance and such other
            debits and credits as shall be appropriate in connection with the
            credit facilities granted hereunder (the "Line Account").  The
            Bank shall provide the Borrower with a statement of the
            Borrower's Line Account, which statement shall be considered to
            be correct and conclusively binding on the Borrower unless the
            Borrower notifies the Bank to the contrary within 30 days after
            the Borrower's receipt of any such statement which it deems to be
            incorrect.

     2.2.2  If any payment required to be made by the Borrower hereunder
            becomes due and payable on a day other than a Business Day, the
            due date thereof shall be extended to the next succeeding
            Business Day and interest thereon shall be payable at the then
            applicable rate during such extension.  All payments required to
            be made hereunder shall be made to the office of the Bank
            designated for the receipt of notices herein or such other office
            as Bank shall from time to time designate.

     2.2.3  The Borrower hereby authorizes the Bank, if and to the extent
            payment owed to the Bank under the Crop Line of Credit is not
            made when due, to charge, from time to time, against any or all
            of the Borrower's deposit accounts with the Bank any amount so
            due.

2.3  LATE PAYMENT  In addition to any other rights the Bank may have
     hereunder, if any payment of principal or interest or any portion
     thereof, under this Agreement is not paid within 5 days of when due, a
     late payment charge equal to five percent (5%) of such past due payment
     may be assessed and shall be immediately payable.

                                     -6-

<PAGE>
                                     SECTION

                                        3

                                    COLLATERAL

3.1  THE COLLATERAL:  To secure payment and performance of all the Borrower's
     Obligations under this Agreement and all other liabilities, loans,
     guarantees, covenants and duties owed by the Borrower to the Bank,
     whether or not evidenced by this or by any other agreement, absolute or
     contingent, due or to become due, now existing or hereafter and howsoever
     created, the Borrower hereby grants the Bank a security interest in and
     to all of the following property ("Collateral")

            (i)   INVENTORY. All inventory (excluding crops) now owned or
                  hereafter acquired by the Borrower, including, but not
                  limited to, all raw materials, work in process, finished
                  goods, merchandise, parts and supplies of every kind and
                  description, including inventory temporarily out of the
                  Borrower's custody or possession, together with all returns
                  on accounts (the "Inventory").

            (ii)  ACCOUNTS.  All accounts, contract rights and general
                  intangibles now owned or hereafter created or acquired by
                  the Borrower, including, but not limited to, all
                  receivables, goodwill, trademarks, trademark applications,
                  trade styles, trade names, patents, patent applications,
                  copyrights and copyright applications, customer lists,
                  business records and computer programs, tapes, disks and
                  related data processing software that at any time evidence
                  or contain information relating to any of the Collateral.

            (iii) DOCUMENTS  All documents, instruments and chattel paper now
                  owned or hereafter acquired by the Borrower, including, but
                  not limited to, warehouse and other receipts, bills of sale
                  and bills of lading.

            (iv)  MONIES.  All monies, deposit accounts, certificates of
                  deposit and securities of the Borrower now or hereafter in
                  the Bank's or its agents' possession.

            (v)   CROPS.  All crops now growing or hereafter to be grown,
                  together with all products and proceeds thereof (the
                  "Crops"), on that certain real property described in the
                  attached Exihibit "B" (the "Real Property")

            (vi)  FARM PRODUCTS.  All farm products now owned or hereafter
                  acquired by or for the benefit of the Borrower consisting
                  of supplies used or produced in the farming operations of
                  the Borrower.

     The Bank's security interest in the Collateral shall be a continuing
     lien and shall include the proceeds and products of the Collateral
     including, but not limited to, the proceeds of any insurance thereon.

     The security interest granted to Bank in the Collateral shall not secure
     or be deemed to secure any Indebtedness of the Borrower to the bank
     which is, at the time of its creation, subject to the provisions of any
     state or federal consumer credit or truth-in-lending disclosure statutes.

                                      -7-

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                                    SECTION

                                       4

                              CONDITIONS PRECEDENT

4.1  CONDITIONS PRECEDENT TO THE INITIAL ADVANCE:  The obligation of the Bank
     to make the initial Advance and the first extension of credit to or on
     account of the Borrower hereunder is subject to the conditions precedent
     that the Bank shall have received before the date of such initial
     Advance and such first extension of credit all of the following, in
     form and substance satisfactory to the Bank:

           (i)    AUTHORITY TO BORROW.  Evidence that the execution, delivery
                  and performance by the Borrower of this Agreement and any
                  document, instrument or agreement required hereunder have
                  been duly authorized.

           (ii)   GUARANTY.  Continuing guaranty(ies) in favor of the Bank
                  executed by Scheid Vineyards, Inc. together with evidence
                  that the execution, delivery and performance by an
                  guarantor has been duly authorized.

           (iii)  FEES.  Payment of all the Bank's reasonable out-of-pocket
                  expenses in connection with the preparation and negotiation
                  of this Agreement.

           (iv)   FINANCING STATEMENTS.  Executed UCC-1 financing statment(s)
                  describing the Collateral, together with evidence of the
                  recordation of such statement(s) as a lien of first
                  priority.

           (v)    MISCELLANEOUS.  Such other evidence as the Bank may request
                  to establish the consummation of the transaction
                  contemplated hereunder and compliance with the conditions
                  of this Agreement.

4.2  CONDITIONS PRECEDENT TO ALL ADVANCES:  The obligation of the Bank to
     make each Advance and each other extension of credit to or on account of
     the Borrower (including the inital Advance and the first extension of
     credit) shall be subject to the futher conditions precedent that, on the
     date of each Advance or each extension of credit and after the making of
     such Advance or extension of credit:

           (i)    SUBSEQUENT APPROVALS.  The Bank  shall have received such
                  supplemental approvals, opinions or documents as the Bank
                  may reasonably request.

           (ii)   REPRESENTATIONS AND WARRANTIES.  The representations
                  contained in Section 5 and in any other document,
                  instrument or certificate delivered to the Bank hereunder
                  are true, correct and complete.

           (iii)  EVENT OF DEFAULT.  No event has occured and is continuing
                  which constitutes, or with the lapse of time or giving of
                  notice or both, would constitute an Event of Default.

            (iv)  COLLATERAL.  The security interest in the Collateral has
                  been duly authorized, created and perfected with first
                  priority and is in full force and effect.

                                      -8-

<PAGE>

                                     SECTION

                                        5

                          REPRESENTATIONS AND WARRANTIES

     The Borrower hereby makes the following representations and warranties
to the Bank, which representations and warranties are continuing:

5.1  STATUS:  The Borrower is a corporation duly organized and validly
     existing under the laws of the state of California and is properly
     licensed and is qualified to do business and in good standing in, and,
     where necessary to maintain the Borrower's rights and privileges, has
     complied with the fictitious name statute of every jurisdiction in which
     the Borrower is doing business.

5.2  AUTHORITY:  The execution, delivery and performance by the Borrower of
     this Agreement and any instrument, document or agreement required
     hereunder have been duly authorized and do not and will not: (i) violate
     any provision of any law, rule, regulation, order, writ, judgment,
     injunction, decree, determination or award presently in effect having
     application to the Borrower; (ii) result in a breach of or constitute a
     default under any material indenture or loan or credit agreement or
     other material agreement, lease or instrument to which the Borrower is
     a party or by which it or its properties may be bound or affected, or
     (iii) require any consent or approval of its stockholders or violate any
     provision of its articles of incorporation or by-laws.

5.3  LEGAL EFFECT  This Agreement constitutes, and any instrument, document
     or agreement required hereunder when delivered hereunder will
     constitute, legal, valid and binding obligations of the Borrower
     enforceable against the Borrower in accordance with their respective
     terms.

5.4  FICTITOUS TRADE STYLES:  There are fictitious trade styles used by the
     Borrower in connection with its business operations as disclosed in the
     attached list.  The Borrower shall notify the Bank not less than 30 days
     prior to effecting any change in the matters described herein or prior
     to using any other fictitious trade style at any future date, indicating
     the trade style and state(s) of its use.

5.5  FINANCIAL STATEMENTS:  All financial statements, information and other
     data which may have been or which may hereafter be submitted by the
     Borrower to the Bank are true, accurate and correct in all material
     respects and have been or will be prepared in accordance with generally
     accepted accounting priniciples consistently applied and accurately
     represent the financial condition or, as applicable, the other
     information disclosed therein.  Since the most recent submission of such
     financial information or data to the Bank, the Borrower represents and
     warrants that no material adverse change in the Borrower's financial
     condition or operations has occured which has not been fully disclosed
     to the Bank in writing.

5.6  LITIGATION:  Except as have been disclosed to the Bank in writing, there
     are no actions, suits or proceedings pending or, to the knowledge of the
     Borrower, theatened against or affecting the Borrower or the Borrower's
     properties before any court or administrative agency which, if
     determined adversely to the Borrower, would have a material adverse
     effect on the Borrower's finanacial condition or operations or on the
     Collateral.

5.7  TITLE TO ASSETS.  The Borrower has good and marketable title to all of
     its assets (including, but not limited to, the Collateral) and the same
     are not subject to any security interest, encumbrance, lien or claim of
     any third person except for Permitted Liens.

5.8  ERISA.  If the Borrower has a pension, profit sharing or retirement plan
     subject to ERISA, such plan has been and will continue to be funded in
     accordance with its terms and otherwise complies with and continues to
     comply with the requirements of ERISA.

                                      -9-

<PAGE>

5.9   TAXES: The Borrower has filed all tax returns required to be filed and
      paid all taxes shown thereon to be due, including interest and
      penalties, other than such taxes which are currently payable without
      penalty or interest or those which are being duly contested in good faith.

5.10  MARGIN STOCK. The proceeds of any loan or advance hereunder will not be
      used to purchase or carry margin stock as such term is defined under
      Regulation U of the Board of Governors of the Federal Reserve System.

5.11  ENVIRONMENTAL COMPLIANCE. Except for such failures as do not and are
      not reasonably likely to have a material adverse effect on the
      financial condition of operations of the Borrower or the Collateral,
      the operations of the Borrower comply, and during the term of this
      Agreement will at all times comply, in all respects with all
      Environmental Laws; the Borrower has obtained all licenses, permits,
      authorizations and registrations required under any Environmental Law
      ("ENVIRONMENTAL PERMITS") and necessary for its ordinary course
      operations, all such Environmental Permits are in good standing, and
      the Borrower is in compliance with all material terms and conditions
      of such Environmental Permits; neither the Borrower nor any of its
      present property or operations is subject to any outstanding written
      order from or agreement with any governmental authority nor subject to
      any judicial or docketed administrative proceeding, respecting any
      Environmental Law, Environmental Claim or Hazardous Material, there
      are no Hazardous Materials or other conditions or circumstances
      existing, or arising from operations prior to the date of this
      Agreement, with respect to any property of he Borrower that would
      reasonably be expected to give rise to Environmental Claims, PROVIDED,
      however, that with respect to property leased or purchased from an
      unrelated third party, the foregoing representation is made to the best
      knowledge of the Borrower. In addition, (i) the Borrower does not have
      any underground storage tanks that are not properly registered or
      permitted under applicable Environmental Laws, or that are leaking or
      disposing of Hazardous Materials off-site, and (ii) the Borrower has
      notified all of their employees of the existence, if any, of any health
      hazard arising from the conditions of their employment and have met all
      notification requirements under Title III of CERCLA and all other
      Environmental Laws.

5.12  INVENTORY:

            (i)    The Borrower keeps materially correct and accurate
                   records, (itemizing and describing the kind, type, quality
                   and quantity of inventory, the Borrower's cost therefor and
                   selling price thereof, and the daily withdrawals therefrom
                   and additions thereto)

            (ii)   All inventory is of good and merchantable quality, free
                   from defects, other than defects as the result of natural
                   forces beyond reasonable control of the Borrower, and
                   except for such other defects that do not and are not
                   reasonably likely to have a material adverse effect on the
                   financial condition or operations of the Borrower or the
                   Collateral

            (iii)  The Borrower is not a "retail merchant" as defined in the
                   California Uniform Commercial Code.

5.13  WATER. As of the date of this Agreement, sufficient water is available
      and is projected to be available, from verifiable surface and ground
      water sources, to conduct operations materially similar to prior years'
      operations as evidenced by information provided by any Borrower to the
      Bank. Borrower has filed with all governmental agencies, all notices
      and other documents required under Federal, state and local laws and
      regulations in connection with the supply of water to and use of water
      upon the Real Property, except for such failures as do not and are not
      reasonably likely to have a material adverse effect on the financial
      condition or operations of the Borrower or the Collateral.

                                      -10-

<PAGE>

                                    SECTION

                                       6

                                   COVENANTS

The Borrower covenants and agrees that, during the term of this Agreement,
and so long thereafter as the Borrower is indebted to the Bank under this
Agreement, the Borrower will, unless the Bank shall otherwise consent in
writing:

6.1   REPORTING AND CERTIFICATION REQUIREMENTS: Deliver or cause to be
      delivered to the Bank in form and detail satisfactory to the Bank

            (i)    Not later than 105 days after the end of each of the
                   Borrower's fiscal years, a copy of Scheid Vineyard, Inc.'s
                   annual Form 10-K filed with the Securities and Exchange
                   Commission and not later than April 30 of each year, the
                   Borrower's crop budget for the the year then in effect,
                   including but not limited to the 2001 Crop Budget.

            (ii)   Not later than 45 days after the end of each fiscal
                   quarter, Scheid Vineyards Inc.'s consolidated financial
                   statement as of the end of such period and a copy of
                   Scheid Vineyard, Inc's Form 10-Q filed with the Securities
                   and Exchange Commission.

            (iii)  Promptly upon the Bank's request, such other information
                   pertaining to the Borrower, the Collateral or any guarantor
                   hereunder as the Bank may reasonably request.

6.2   FINANCIAL CONDITION: The Borrower promises and agrees, during the term
      of this Agreement and until payment in full of all of the Borrower's
      Obligations, the Borrower will maintain at all times:

            (i)    A minimum Effective Tangible Net Worth of at least
                   $25,000,000.00

            (ii)   A minimum Working Capital of not less than $2,000,000.

            (iii)  A ratio of Cash Flow to the current portion of long term
                   Debt of not less than 1.25 to 1, measured at the end of
                   each fiscal year.

6.3   PRESERVATION OF EXISTENCE; COMPLIANCE WITH APPLICABLE LAWS  Maintain
      and preserve its existence and all rights and privileges now enjoyed;
      and conduct its business and operations in accordance with all
      applicable laws, rules and regulations.

6.4   MERGE OR CONSOLIDATE  Not liquidate or dissolve, merge or consolidate
      with or into, or acquire any other business organization.

6.5   MAINTENANCE OF INSURANCE  Keep and maintain the Collateral insured for
      not less than its full replacement value, against all risks of loss and
      damage and maintain insurance in such amounts and covering such risks
      as is usually earned by companies engaged in similar businesses and
      owning similar properties in the same general areas in which the
      Borrower operates and maintain such other insurance and coverages as
      may be required by the Bank. All such insurance shall be in form and
      amount and with companies reasonably satisfactory to the Bank.

      With respect to insurance covering properties in which the Bank
      maintains a security interest or lien, such insurance shall name the
      Bank as loss payee pursuant to a loss payable endorsement satisfactory
      to the Bank and shall not be altered or canceled except upon 10 days'
      prior written notice to the Bank. Upon the Bank's request, the Borrower
      shall furnish the Bank with the original policy or binder of all such
      insurance.

                                      -11-

<PAGE>
6.6   MAINTENANCE OF COLLATERAL AND OTHER PROPERTIES:  Except for Permitted
      Liens as permitted by Section 6.11, keep and maintain the Collateral
      free and clear of all levies, liens, encumbrances and security interests
      (including, but not limited to, any lien of attachment, judgment or
      execution) and defend the Collateral against any such levy, lien,
      encumbrance or security interest, comply with all laws, statutes and
      regulations pertaining to the Collateral and its use and operation,
      except for such failures to comply as are not reasonably likely to have
      a material adverse effect on the financial condition or operations of
      the Borrower or the Collateral; execute, file and record such
      statements, notices and agreements; take such actions and obtain
      such certificates and other documents as necessary to perfect, evidence
      and continue the Bank's security interest in the Collateral and the
      priority thereof; maintain accurate and complete records of the
      Collateral which show all sales, claims and allowances; and properly
      care for, house, store and maintain the Collateral in good condition,
      free of misuse, abuse and deterioration, other than normal wear and
      tear. The Borrower shall also maintain and preserve all its properties
      in good working order and condition in accordance with the general
      practice of other businesses of similar character and size, ordinary wear
      and tear excepted.

6.7   PAYMENT OF OBLIGATIONS AND TAXES.  Make timely payment of all
      assessments and taxes and all of its liabilities and obligations
      including, but not limited to, trade payables, unless the same are
      being contested in good faith by appropriate proceedings with the
      appropriate court or regulatory agency. For purposes hereof, the
      Borrower's issuance of a check, draft or similar instrument without
      delivery to the intended payee shall not constitute payment.

6.8   INSPECTION RIGHTS AND ACCOUNTING RECORDS:  The Borrower will maintain
      adequate books and records in accordance with generally accepted
      accounting principles consistently applied and in a manner otherwise
      acceptable to Bank, and, at any reasonable time and from time to time,
      permit the Bank or any representative thereof to examine and make
      copies of the records and visit the properties of the Borrower and
      discuss the business and operations of the Borrower with any employee
      or representative thereof. If the Borrower shall maintain any records
      (including, but not limited to, computer generated records or computer
      programs for the generation of such records) in the possession of a
      third party, the Borrower hereby agrees to notify such third party to
      permit the Bank free access to such records at all reasonable times
      and to provide the Bank with copies of any records which it may
      request, all at the Borrower's expense, the amount of which shall be
      payable immediately upon demand.

6.9   PAYMENT OF DIVIDENDS. Not declare or pay any dividends on any class of
      stock now or hereafter outstanding except dividends payable solely in
      the Borrower's capital stock.

6.10  LIENS AND ENCUMBRANCES. Not create, assume or permit to exist any
      security interest, encumbrance, mortgage, deed of trust, or other lien
      (including, but not limited to, a lien of attachment, judgment or
      execution) affecting any of the Borrower's properties, or execute or
      allow to be filed any financing statement or continuation thereof
      affecting any of such properties, except for Permitted Liens or as
      otherwise provided in this Agreement, and liens on properties that are
      not Collateral, and liens and security interests associated with
      indebtedness of up to $500,000.00 in any one fiscal year.

6.11  TRANSFER ASSETS. Not, after the date hereof, sell, contract for sale,
      convey, transfer, assign, lease or sublet, any of its assets
      (including, but not limited to, the Collateral) except in the Ordinary
      Course of Business and, then, only for full, fair and reasonable
      consideration.

6.12  CHANGE IN NATURE OF BUSINESS: Not make any material change in its
      financial structure or the nature of its business as existing or
      conducted as of the date hereof.

6.13  COMPENSATION OF EMPLOYEES: Compensate its employees for services
      rendered at an hourly rate at least equal to the minimum hourly rate
      prescribed by any applicable federal or state law or regulation.

                                     -12-

<PAGE>

6.14   NOTICE: Give the Bank prompt written notice of any and all (i) Events
       of Default; (ii) litigation, arbitration or administrative proceedings
       to which the Borrower is a party and in which the claim or liability
       exceeds $100,000.00 or which affects the Collateral; (iii) other
       matters which have resulted in, or might result in a material adverse
       change in the Collateral or the financial condition or business
       operations of the Borrower, and (iv) any enforcement, cleanup, removal
       or other governmental or regulatory actions instituted, completed or
       threatened against the Borrower or any of its properties.

6.15   ENVIRONMENTAL COMPLIANCE:  The Borrower shall conduct its operations
       and keep and maintain all of its property in compliance with all
       Environmental Laws, except for such failures to comply as do not and
       are not reasonably likely to have a material adverse effect on the
       financial condition or operations of the Borrower or the Collateral,
       and, upon the written request of the Bank, the Borrower shall submit
       to the Bank at the Borrower's sole cost and expense, at reasonable
       intervals, a report providing the status of any environmental, health
       or safety compliance, hazard or liability.

6.16   INVENTORY

            (i)    The Borrower shall keep materially correct and accurate
                   records.

            (ii)   All inventory shall be good and merchantable quality, free
                   from defects, other than defects as the result of natural
                   forces beyond the reasonable control of the Borrower, and
                   except for such other defects that do not and are not
                   reasonably likely to have a material adverse effect on the
                   financial condition or operations of the Borrower or the
                   Collateral.

            (iii)  At any reasonable time and from time to time, allow Bank
                   to have the right, upon demand, to inspect and examine
                   inventory and to check and test the same as to quality,
                   quantity, value and condition and the Borrower agrees to
                   reimburse the Bank for the Bank's reasonable costs and
                   expenses in so doing.

            (iv)   LOCATION OF THE HARVESTED CROPS: Any Crops now or
                   hereafter harvested or removed from the Real Property
                   shall not be stored with a bailee, warehouseman or similar
                   party without the Bank's prior written consent and shall
                   be kept only on the Real Property described on the
                   attached Exhibit "B".  Not withstanding the foregoing,
                   Borrower may, in the ordinary course of Business, deliver
                   possession of harvested Crops (i) to the proposed buyer
                   thereof prior to the buyer's acceptance of such Crops, or
                   (ii) to a common carrier for delivery to buyer.

6.17   CARE AND PRESERVATION OF THE CROPS:

            (i)    Attend to and care for the Crops and do or cause to be
                   done any and all acts that may at any time be appropriate
                   or necessary to grow, farm, cultivate, irrigate,
                   fertilize, prune, harvest, pick, clean, preserve and
                   protect the Crops; provided, however, that Borrower shall
                   not be required to take any such action that is not in the
                   ordinary course of business.

            (ii)   Not commit or suffer to be committed any waste of or
                   damage to the Crops to the extent within the reasonable
                   control of the Borrower.

            (iii)  Permit the Bank and any of its agents, employees or
                   representatives to enter upon the Real Property at any
                   reasonable time and from time to time for the purpose of
                   examining and inspecting the Crops and the Real Property.

                                             -13-
<PAGE>

            (iv)   Harvest and prepare the Crops for market; provided,
                   however, that Borrower shall not be required to take any
                   such action that is not in the ordinary course of
                   business, and promptly notify the Bank when harvest
                   commences.

             (v)   Keep the Crops separate and always capable of
                   identification.

6.18   EVIDENCE OF WATER AVAILABILITY:  At such times as the Bank may
       reasonably request, to deliver to the Bank a certificate stating that
       the amount of water available and projected to be available is
       sufficient to conduct operations materially as described in Borrower's
       Crop Budget or operations materially similar to prior years'
       operations, as evidenced by information provided by the Borrower to
       the Bank.  Such certificate shall be signed, at the Bank's option,
       either by the Borrower or by an independent third party, such as an
       officer of the Borrower's water district or other supplier of water.

                                 SECTION

                                    7

                            EVENTS OF DEFAULT

       Any one or more of the following described events shall constitute
       an event of default (an "Event of Default") under this Agreement.

7.1    NON-PAYMENT:  Any Borrower shall fail to pay the principal amount of
       any Obligations when due or interest on the Obligations within 5 days
       of when due.

7.2    PERFORMANCE UNDER THIS AGREEMENT:  The Borrower shall fail in any
       material respect to perform or observe any term, covenant or agreement
       contained in this Agreement or in any document, instrument or
       agreement relating to this Agreement or any other document or
       agreement executed by Borrower with or in favor of Bank and any such
       failure shall continue unremedied for more than 30 days after the
       occurrence thereof.

7.3    REPRESENTATIONS AND WARRANTIES; FINANCIAL STATEMENTS:  Any
       representation or warranty made by the Borrower under or in connection
       with this Agreement or any financial statement given by the Borrower
       or any guarantor shall prove to have been incorrect in any material
       respect when made or given or when deemed to have been made or given.

7.4    OTHER AGREEMENTS:  If there is a default under any other agreement
       with Bank or under an agreement to which Borrower is a party with Bank
       or with a third party or parties resulting in a right by the Bank or
       such third party or parties, whether or not exercised, to accelerate
       the maturity of any Indebtedness.

7.5    INSOLVENCY:  The Borrower or any guarantor shall: (i) become insolvent
       or be unable to pay its debts as they mature, (ii) make an assignment
       for the benefit of creditors or to an agent authorized to liquidate
       any substantial amount of its properties and assets; (iii) file a
       voluntary petition in bankruptcy or seeking reorganization or to
       effect a plan or other arrangement with creditors; (iv) file an answer
       admitting the material allegations of an involuntary petition relating
       to bankruptcy or reorganization or join in any such petition, (v)
       become or be adjudicated a bankrupt; (vi) apply for or consent to the
       appointment of, or consent that an order be made, appointing any
       receiver, custodian or trustee, for itself or any of its properties,
       assets or businesses; or (vii) in an involuntary proceeding, any
       receiver, custodian or trustee shall have been appointed for all or
       substantial part of the Borrower's or guarantor's properties, assets
       or businesses and shall not be discharged within 30 days after the
       date of such appointment.

                                            -14-

<PAGE>

7.6    EXECUTION:  Any writ of execution or attachment or any judgment lien
       shall be issued against any property of the Borrower and shall not be
       discharged or bonded against or released within 30 days after the
       issuance or attachment of such writ or lien.

7.7    SUSPENSION: The Borrower shall voluntarily suspend the transaction of
       business or allow to be suspended, terminated, revoked or expired any
       material permit, license or approval of any governmental body
       necessary to conduct the Borrower's business as now conducted.

7.8    MATERIAL ADVERSE CHANGE:  If there occurs a material adverse change in
       the Borrower's business or financial condition, or if there is a
       material impairment of the prospect of repayment of any portion of the
       Obligations or there is a material impairment of the value or priority
       of the Bank's security interest in the Collateral.

7.9    CHANGE IN OWNERSHIP:  There shall occur a sale, transfer, disposition
       or encumbrance (whether voluntary or involuntary to), or an agreement
       shall be entered into to do so with, any Person or group of Persons (as
       such terms are defined pursuant to Federal securities laws) with
       respect to more than 19% of the issued and outstanding capital stock
       of the Borrower and, as a result thereof, such Person or group of
       Persons has the ability to direct or cause the direction of the
       management and policies of the Borrower.

                                            SECTION

                                               8

                                      REMEDIES ON DEFAULT

Upon the occurrence of any Event of Default, the Bank may, at its sole and
absolute election, without demand and only such notice as may be required by
law.

8.1    ACCELERATION:  Declare any or all of the Borrower's indebtedness owing
       to the Bank, whether under this Agreement or any other document,
       instrument or agreement, immediately due and payable, whether or not
       otherwise due and payable.

8.2    CEASE EXTENDING CREDIT:  Cease making Advances or otherwise extending
       credit to or for the account of the Borrower under this Agreement or
       under any other agreement now existing or hereafter entered into
       between the Borrower and the Bank.

8.3    TERMINATION:  Terminate this Agreement as to any future obligation of
       the Bank without affecting the Borrower's obligations to the Bank or
       the Bank's rights and remedies under this Agreement or under any other
       document, instrument or agreement.

8.4    PROTECTION OF SECURITY INTEREST:  Make such payments and do such acts
       as the Bank, in its sole judgment, considers necessary and reasonable
       to protect its security interest or lien in the Collateral.  The
       Borrower hereby irrevocably authorizes the Bank to pay, purchase,
       contest or compromise any encumbrance, lien or claim which the Bank,
       in its sole judgment, deems to be prior or superior to its security
       interest.  Further, the Borrower hereby agrees to pay the Bank, upon
       demand therefor, all expenses and expenditures (including attorneys'
       fees) incurred in connection with the foregoing.

8.5    FORECLOSURE:  Enforce any security interest or lien given or provided
       for under this Agreement or under any such agreement, mortgage, deed
       of trust or other document, in such manner and such order, as to all
       or any part of the properties subject to such security interest or
       lien, as the Bank, in its sole judgment, deems to be necessary or
       appropriate and, to the extent permitted by applicable law, the
       Borrower hereby waives any an all rights, obligations or defenses now
       or hereafter established by law relating to the foregoing.  In the
       enforcement of its security interest or

                                            -15-

<PAGE>

     lien, the Bank is authorized to enter upon the premises where any
     Collateral is located and take possession of the Collateral or any part
     thereof, together with the Borrower's records pertaining thereto, or the
     Bank may require the Borrower to assemble the Collateral and records
     pertaining thereto and make such Collateral and records available to the
     Bank at a place desginated by the Bank. The Bank may sell the Collateral
     or any portions thereof, together with all additions, accessions and
     accessories thereto, giving only such notes and following only such
     procedures as are required by law, at either a public or private sale, or
     both, with or without having the Collateral present at the time of the
     sale, which sale shall be on such terms and conditions and conducted in
     such manner as the Bank determines in its sole judgment to be
     commercially reasonable. Any deficiency which exists after the
     disposition or liquidation of the Collateral shall be a continuing
     liability of the Borrower to the Bank and shall be immediately paid by
     the Borrower to the Bank.

8.6  CARE AND POSSESSION OF THE CROPS:  Enter upon the Real Property and,
     using any and all of the Borrower's equipment, machinery, tools, farming
     implements and supplies, and improvements located on the Real Property:
     (i) farm, cultivate, irrigate, fertilize, fumigate, prune and perform
     any other act of acts appropriate or necessary to grow, care for,
     maintain, preserve and protect the Crops (using any water located in, on
     or adjacent to the Real Property); (ii) harvest, pick, clean and remove
     the Crops from the Real Property; and (iii) appraise, store, prepare for
     public or private sale, exhibit, market and sell the Crops and the
     products thereof; provided that the Borrower hereby agrees that, if the
     Borrower is the owner of the Real Property, the Bank shall not be
     responsible or liable for returning the Real Property to its condition
     immediately preceding the use of the Real Property as provided herein or
     for doing such acts as may be necessary to permit future crops to be
     grown on the Real Property.

8.7  NON-EXCLUSIVITY OF REMEDIES:  Exercise one or more of the Bank's rights
     set forth herein or seek such other rights or pursue such other remedies
     as may be provided by law, in equity or in any other agreement now
     existing or hereafter entered into between the Borrower and the Bank, or
     otherwise.

8.8  APPLICATION OF PROCEEDS:  All amounts received by the Bank as proceeds
     from the disposition or liquidation of the Collateral shall be applied
     to the Borrower's indebtedness to the Bank as follows: first, to the
     costs and expenses of collection, enforcement, protection and
     preservation of the Bank's lien in the Collateral, including court costs
     and reasonable attorneys' fees, whether or not suit is commenced by the
     Bank; next, to those costs and expenses incurred by the Bank in
     protecting, preserving, enforcing, collecting, liquidating, selling or
     disposing of the Collateral; next, to the payment of accrued and unpaid
     interest on all of the Obligations; next, to the payment of the
     outstanding principal balance of the Obligations; and last, to the
     payment of any other indebtedness owed by the Borrower to the Bank.

                                      SECTION

                                         9

                                  MISCELLANEOUS

9.1  AMOUNTS PAYABLE ON DEMAND:  If the Borrower shall fail to pay on demand
     any amount so payable under this Agreement; the Bank may, at its option
     and without any obligation to do so and without waiving any default
     occasioned by the Borrower having so failed to pay such amount, create an
     Advance under this Agreement in an amount equal to the amount so
     payable, which Advance shall thereafter bear interest as provided
     hereunder.

9.2  DEFAULT INTEREST RATE:  If an Event of Default, or an event which, with
     notice or passage of time could become an Event of Default, has occurred
     or is continuing, the Borrower shall pay to the Bank interest on any
     indebtedness or amount payable under this Agreement at a rate which is
     3% in excess of the rate or rates then in effect under this Agreement.

                                     -16-
<PAGE>

9.3  ASSIGNMENT OF THE BORROWER'S RIGHTS IN THE CROPS:

           (i)     If the Crops or any portion or portions thereof become
                   infected by disease or are destroyed by order of any
                   local, state or federal authority, and, by reason thereof,
                   the Borrower is entitled to be indemnified by such
                   authority, the Borrower hereby assigns to the Bank for
                   security purposes and as part of the Collateral any and
                   all such sums due from such authority, and the Bank is
                   hereby authorized to receive, collect and sue for the
                   same, and the Borrower hereby orders and directs that any
                   such sums be paid directly to the Bank.

           (ii)    In addition, the Borrower hereby assigns and transfers to
                   the Bank for security purposes and as part of the
                   Collateral all of the Borrower's rights and interests in
                   and to any monies now or hereafter placed in any funds of
                   any marketing association, corporation, cooperative,
                   partnership, firm or individual now heretofore or
                   hereafter handling or having to do with any of the Crops
                   now growing or heretofore or hereafter grown on the Real
                   Property or connected with the growing, marketing, farming
                   or other handling of such Crops and the Borrower hereby
                   assigns and transfers to the Bank for security purposes
                   and as part of the Collateral all stock and all other
                   interests, benefits and rights of the Borrower in any such
                   marketing association, corporation, cooperative,
                   partnership, firm or individual having anything to do with
                   such Crops and all monies due or becoming due to the
                   Borrower from any one or more of them.

9.4  RELIANCE AND FURTHER ASSURANCES:  Each warranty, representation,
     covenant, obligation and agreement contained in this Agreement shall be
     conclusively presumed to have been relied upon by the Bank regardless of
     any investigation made or information possessed by the Bank and shall be
     cumulative and in addition to any other warranties, representations,
     covenants and agreements which the Borrower now or hereafter shall give,
     or cause to be given, to the Bank.  Borrower agrees to execute all
     documents and instruments and to perform such acts as the Bank may
     reasonably deem necessary to confirm and secure to the Bank all rights
     and remedies conferred upon the Bank by this agreement and all other
     documents thereto.

9.5  ATTORNEYS' FEES:  Borrower shall pay to the Bank all costs and expenses,
     including but not limited to reasonable attorneys fees, incurred by Bank
     in connection with the administration, enforcement, including any
     bankruptcy, appeal or the enforcement of any judgment or any
     refinancing or restructuring of this Agreement or any document,
     instrument or agreement executed with respect to, evidencing or securing
     the indebtedness hereunder.

9.6  NOTICES:  All notices, payments, requests, information and demands which
     either party hereto may desire, or may be required to give or make to
     the other party hereto, shall be given or made to such party by hand
     delivery or through deposit in the United States mail, postage prepaid,
     or by facsimile delivery, or to such other address as may be specified
     from time to time in writing by either party to the other.

     TO THE BORROWER:                         TO THE BANK:

     SCHEID VINEYARDS CALIFORNIA INC          SANWA BANK CALIFORNIA
     13470 Washington Blvd., Ste. 300         Fresno CBC
     Marina del Rey, CA 90292                 2035 Fresno Street
     Attn: Alfred G. Scheid                   Fresno, CA 93721
     FAX: (310) 301-1569                      Attn: Keith Krum
                                              FAX: (559) 487-2157

9.7  WAIVER:  Neither the failure nor delay by the Bank in exercising any
     right hereunder or under any document, instrument or agreement mentioned
     herein shall operate as a waiver thereof, nor shall any single or
     partial exercise of any right hereunder or under any other document,
     instrument or

                                     -17-

<PAGE>

     agreement mentioned herein preclude other or further exercise thereof or
     the exercise of any other right; nor shall any waiver of any right or
     default hereunder, or under any other document, instrument or agreement
     mentioned herein, constitute a waiver of any other right or default or
     constitute a waiver of any other default of the same or any other term or
     provision.

9.8  CONFLICTING PROVISIONS:  To the extent the provisions contained in this
     Agreement are inconsistent with those contained in any other document,
     instrument or agreement executed pursuant hereto, the terms and
     provisions contained herein shall control.  Otherwise, such provisions
     shall be considered cumulative.

9.9  BINDING EFFECT; ASSIGNMENT:  This Agreement shall be binding upon and
     inure to the benefit of the Borrower and the Bank and their respective
     successors and assigns, except that the Borrower shall not have the
     right to assign its rights hereunder or any interest herein without the
     prior written consent of the Bank.  The Bank may sell, assign or grant
     participation in all or any portion of its rights and benefits
     hereunder.  The Borrower agrees that, in connection with any such sale,
     grant or assignment, the Bank may deliver to the prospective buyer,
     participant or assignee financial statements and other relevant
     information relating to the Borrower and any guarantor.

9.10 JURISDICTION:  This Agreement, any notes issued hereunder, the rights of
     the parties hereunder to and concerning the Collateral, and any
     documents, instruments or agreements mentioned or referred to herein
     shall be governed by and construed according to the laws of the State of
     California without regard to conflict of law principles, to the
     jurisdiction of whose courts the parties hereby submit.

9.11 WAIVER OF JURY TRIAL:  THE BORROWER AND THE BANK EACH WAIVE THEIR
     RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE OR ACTION
     BASED UPON OR ARISING OUT OF OR RELATED TO THIS AGREEMENT, THE OTHER
     LOAN DOCUMENTS, OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY, IN
     ANY ACTION, PROCEEDING OR OTHER LITIGATION OF ANY TYPE BROUGHT BY ANY OF
     THE PARTIES AGAINST ANY OTHER PARTY OR PARTIES, WHETHER WITH RESPECT TO
     CONTRACT CLAIMS, TORT CLAIMS, OR OTHERWISE.  THE BORROWER AND THE BANK
     EACH AGREE THAT ANY SUCH CLAIM OR CAUSE OF ACTION SHALL BE TRIED BY A
     COURT TRIAL WITHOUT A JURY.  WITHOUT LIMITING THE FOREGOING, THE PARTIES
     FURTHER AGREE THAT THEIR RESPECTIVE RIGHT TO A TRIAL BY JURY IS WAIVED
     BY OPERATION OF THIS SECTION AS TO ANY ACTION, COUNTERCLAIM OR OTHER
     PROCEEDING WHICH SEEKS, IN WHOLE OR IN PART, TO CHALLENGE THE VALIDITY OR
     ENFORCEABILITY OF THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS OR ANY
     PROVISION HEREOF OR THEREOF.  THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT
     AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT AND
     THE OTHER LOAN DOCUMENTS.

9.12 COUNTERPARTS:  This Agreement may be executed in any number of
     counterparts and all such counterparts taken together shall be deemed
     to constitute one and the same instrument.

9.13 HEADINGS:  The headings herein set forth are solely for the purpose of
     identification and have no legal significance.

9.14 ENTIRE AGREEMENT AND AMENDMENTS.  This Agreement and all documents,
     instruments and agreements mentioned herein constitute the entire and
     complete understanding of the parties with respect to the transactions
     contemplated hereunder.  All previous conversations, memoranda and
     writings between the parties pertaining to the transactions contemplated
     hereunder not incorporated or referenced in this Agreement or in such
     documents, instruments and agreements are superseded hereby.  This
     Agreement may be amended only by an instrument in writing signed by the
     Borrower and the Bank.

                                     -18-

<PAGE>

     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
     be executed as of the date first hereinabove written.

     BANK:                                   BORROWER:

     SANWA BANK CALIFORNIA                   SCHEID VINEYARDS CALIFORNIA INC.

     BY:  /s/ Keith Krum                     BY:  /s/ Heidi M. Scheid
          ---------------------------------       ---------------------------
     NAME: Keith Krum, Senior Vice           NAME: Heidi M. Scheid, Secretary
           President

                                             BY:   /s/ Michael S. Thomsen
                                                   ---------------------------
                                             NAME: Michael S. Thomsen,
                                                   Assistant Secretary

                                      -19-

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