Exhibit 2
Domaines Barons de Rothschild (Lafite) SCA
00, xxx xx xx Xxxxx
00000 Xxxxx
Xxxxxx
May 16, 2004
Constellation Brands, Inc.
000 Xxxxxxxxx Xxxxx
Xxxxxxxx, Xxx Xxxx 00000
Attention: Xxxxxxx Xxxxx
Huneeus Vintners LLC
0000 Xxxxxxxxx Xxxxx
Xxxx, Xxxxxxxxxx 00000
Gentlemen:
This letter will confirm certain transactions proposed to be entered into
among Domaines Barons de Rothschild (Lafite) SCA ("DBR"), Constellation Brands,
Inc., acting through its wholly-owned subsidiary, Franciscan Vineyards, Inc.
("CONSTELLATION"), and Huneeus Vintners LLC ("HUNEEUS").
1. Constellation, Huneeus and DBR (collectively, the "PRINCIPALS") intend
to enter into certain transactions among themselves and, in connection therewith
and prior thereto, to propose to a special committee of the Board of Directors
of Chalone (the "SPECIAL COMMITTEE") that Xxxxxxx enter into certain
transactions, based on and consistent with the terms set forth herein and other
terms to be agreed upon. The Principals have agreed to establish a joint venture
company (the "JOINT VENTURE" or "JV") to which Constellation will contribute $54
million in cash and certain assets and Huneeus will contribute certain assets
and liabilities, and to which DBR will, upon the completion of the merger of
Holdco into Chalone described below, cause Chalone to contribute substantially
all of its assets and liabilities.
The Principals propose to effect the proposed transactions as follows: (i)
DBR will form a corporation ("HOLDCO") and contribute $10 million in cash to
Holdco and contribute its Chalone shares (including any shares obtained upon
conversion of the Chalone convertible debt held by DBR) (the "SHARES") to Holdco
in exchange for Holdco shares, (ii) the JV will loan to Holdco an amount equal
to the difference between the aggregate cash amount to be paid in exchange for
the outstanding publicly held shares of Chalone (other than the shares held by
DBR, Holdco and their affiliates) in the merger described in (iv) below and the
$10 million in cash to be contributed by DBR to Holdco; (iii) the source of
funds for the loan by the JV will be $54 million in cash contributed by
Constellation; (iv) DBR will propose to the Special Committee of the Board of
Directors of Chalone that Holdco enter into a merger agreement with
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Chalone providing for the merger of Holdco with and into Chalone (the "MERGER"),
in which merger all of the outstanding publicly held shares of Chalone (other
than the shares held by DBR, Holdco and their affiliates, which shares shall be
cancelled) shall be converted into cash and the stockholders (other than Holdco)
will receive the wine purchase rights described on Annex G (such transactions,
including the Merger, collectively, the "TRANSACTIONS"). The Principals will
jointly and severally guarantee the obligations of Holdco under the merger
agreement between Holdco and Chalone (the "MERGER AGREEMENT"). The closing of
the Transactions will occur simultaneously. The material terms of the Merger
Agreement setting forth the terms and conditions of the Merger, including the
cash price per share to be paid to holders of Chalone shares (other than DBR,
Holdco or its affiliates) shall require the approval of each of the Principals.
2. Each of the Principals hereby commits to cause the following
transactions: (i) Constellation will establish the JV as a Delaware limited
liability company and Constellation and Huneeus shall enter into governance and
other agreements relating to the JV on the terms set forth in Annex A hereto,
(ii) Constellation and Huneeus will contribute cash, assets and liabilities to
the JV (including debt amounting to no more than $18.5 million to be contributed
by Huneeus), and DBR will, immediately upon the consummation of the Merger,
cause Xxxxxxx to contribute substantially all of its assets and liabilities to
the JV, in each case on the terms and conditions set out in Annex B in exchange
for ownership interests in the JV, (iii) the Principals will appoint Xxxxxxx
Xxxxxxxxx Xxxxxxx as the CEO of the JV and establish a management incentive plan
on the terms set forth in Annex C hereto, (iv) the Principals will cause the JV
to enter into certain other business arrangements with Constellation on the
terms set forth in Annex D hereto, and (v) DBR shall enter into an arrangement
with the JV as set forth in Annex E hereto. The Principals have valued the
assets to be contributed by each of them, including cash contributions, as
$[81.2] million for Constellation, $[68] million for Huneeus and $[61.372]
million for DBR, resulting in equity percentages (the "EQUITY PERCENTAGES") of
[38.6]% for Constellation, [32.3]% for Huneeus and [29.1]% for DBR.
3. The obligations of the Principals to effect or cause to be effected the
transactions described in (i) through (v) of paragraph 2 above are subject only
to the prior satisfaction of the following conditions: (i) the successful
consummation of the Merger, and (ii) all requisite consents and antitrust law
approvals being obtained. The obligations of the Principals to consummate the
transactions described in paragraph 2 above are not subject to any other
conditions.
4. None of the Principals shall take any action or enter into any
agreement inconsistent with the terms of this Commitment Letter during the
Commitment Period (being a period of 4 months from the date of this letter).
During the Commitment Period, each of the Principals shall act exclusively with
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the others with respect to the Merger and the other Transactions and during the
Commitment Period shall use reasonable efforts to cause the Merger and the other
Transactions to be consummated as herein contemplated.
In furtherance of such agreement, DBR hereby commits that during the
Commitment Period it shall not (i) at any shareholders meeting of Xxxxxxx, vote
for any transactions proposed by a third party that would result in such third
party owning more than 50% of the voting securities of Chalone or its successor
or a transaction involving a sale of substantially all the assets of Chalone
(each a "COMPETING TRANSACTION"), (ii) solicit any third party to propose a
Competing Transaction or discuss any such proposal with any third party, or
(iii) sell its Shares to any third party other than an affiliate (which shall
remain subject to the agreements herein). In the event that DBR shall breach the
commitment described in the previous sentence, then DBR shall immediately
reimburse Huneeus its documented reasonable expenses incurred in connection with
the Transactions.
DBR agrees to enter into a Voting Agreement upon the execution of the
Merger Agreement whereby DBR agrees for a period commencing upon the date of the
Merger Agreement and ending on the termination of the Merger Agreement by its
terms, (i) not to sell or otherwise transfer its Shares; (ii) not to solicit
proposals for Competing Transactions or enter into discussions with any third
party with respect to a Competing Transaction, and (iii) to vote its Shares at a
shareholders meeting of Xxxxxxx in favor of the transaction proposed by the
Merger Agreement and against any Competing Transaction.
In the event that at any time within a period of six months following the
date of the Merger Agreement Xxxxxxx enters into a definitive agreement for a
Competing Transaction at a price per share higher than $7.80 (the "REFERENCE
SHARE PRICE") then (whether or not the Competing Transaction is consummated
within such six month period) DBR shall, within seven days of receipt of any
amounts paid to it pursuant to the Competing Transaction, pay each of
Constellation and Huneeus an amount equal to one-third of the difference between
the aggregate consideration received by DBR pursuant to such Competing
Transaction and an amount equal to the Reference Share Price multiplied by the
number of Shares. In addition, DBR agrees that in any circumstance in which
Xxxxxxx is obligated to pay a break-up fee upon termination of the Merger
Agreement pursuant to the terms of the Merger Agreement as a result of Xxxxxxx
entering into a Competing Transaction, such fee shall be paid to and shared by
Constellation and Huneeus as to 50% each.
The commitments and understandings of DBR in this paragraph shall not
restrict any actions taken by any director of Xxxxxxx who is an employee of or
affiliated with DBR in furtherance of his fiduciary obligations.
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5. Any proposed change to the material terms of the proposals or
transactions set forth in this Commitment Letter and the definitive agreements
contemplated hereunder (including the terms set forth in the Annexes hereto)
will be subject to the unanimous approval of the Principals.
6. Each Principal (each, an "INDEMNIFYING PRINCIPAL") shall severally,
but not jointly indemnify and hold harmless each other Principal (each, an
"INDEMNIFIED PRINCIPAL") against (x) JV Losses (as defined below) incurred by
the Indemnified Principal (whether or not such JV Losses are occasioned by the
acts or failures to act of the Indemnified Principal), in an amount that is
proportionate to the Indemnifying Principal's prospective Equity Percentage in
the JV, and (y) Other Losses (as defined below) arising out of the conduct,
omission or statement of the Indemnifying Principal.
(a) Promptly after the commencement of any action or proceeding
against an Indemnified Principal which could give rise to a claim for
indemnification under this Section 6, the Indemnified Principal shall give
notice to each Indemnifying Principal if it wishes to assert a claim for
indemnification under this Section 6, provided, however, that the failure so to
notify the Indemnifying Principals (i) will not relieve the Indemnifying
Principals from their indemnification obligations in this Section 6 unless and
then only to the extent the Indemnifying Principals did not otherwise learn of
such action and such failure results in the forfeiture by the Indemnifying
Principals of substantial rights and defenses, and (ii) will not, in any event,
relieve the Indemnifying Principals from any obligations to any Indemnified
Principal other than the indemnification provisions in this Section 6.
(b) Following delivery of such notice, but subject to the provisions
of clause (c) below, each Indemnifying Principal shall be entitled to
participate in such action or proceeding and, to the extent that it shall wish,
to assume the defense thereof with counsel satisfactory to such Indemnified
Principal (but prior to assuming such defense, the Indemnifying Principal shall
have acknowledged in writing its indemnification obligation hereunder if such
claim is determined adversely to the Indemnified Principal). After notice from
the Indemnifying Principal to the Indemnified Principal of its election to
assume the defense of a claim, the Indemnifying Principal shall not be liable to
such Indemnified Principal under this Section 6 for any fees of other counsel or
any other expenses, in each case subsequently incurred by such Indemnified
Principal in connection with the defense thereof, other than reasonable costs of
investigation, or as provided in clause (d) below. If an Indemnifying Principal
assumes the defense of such an action, (i) no compromise or settlement thereof
may be effected by the Indemnifying Principal without the Indemnified
Principal's consent (which shall not be unreasonably withheld) unless (A) there
is no finding or admission of any violation of law or any violation of the
rights of any person and no effect on any other claims that may be made against
the Indemnified Principal and (B) the sole
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relief provided is monetary damages that are paid in full by the Indemnifying
Principal, and (ii) the Indemnifying Principal shall have no liability with
respect to any compromise or settlement thereof effected by the Indemnified
Principal without its consent (which shall not be unreasonably withheld). If
notice is given to an Indemnifying Principal of the commencement of any action
and it does not, within 30 days after the Indemnified Principal's notice is
given, give notice to the Indemnified Principal of its election to assume the
defense thereof (and in connection therewith, acknowledges in writing its
indemnification obligation hereunder), the Indemnifying Principal shall be bound
by any determination made in such action or any compromise or settlement thereof
effected by the Indemnified Principal. Notwithstanding the foregoing, if an
Indemnified Principal determines in good faith that there is a reasonable
probability that an action may materially and adversely affect it or its
affiliates other than as a result of monetary damages, such Indemnified
Principal may, by notice to the Indemnifying Principal, assume the exclusive
right to defend, compromise or settle such action, but the Indemnifying
Principal shall have no liability with respect to a judgment entered in any
action so defended, or a compromise or settlement thereof entered into, without
its consent (which shall not be unreasonably withheld). Should there be more
than one Indemnifying Principal, each Indemnifying Principal shall have the
option to assume the defense of the action or proceeding. If more than one
Indemnifying Principal chooses to assume the defense, such Indemnifying
Principals shall act jointly in the defense, it being understood that no failure
of agreement or cooperation among such Indemnifying Principals shall prejudice
the rights of the Indemnified Principal. Any Indemnifying Principal which does
not choose to assume the defense shall (to the extent it is liable for Losses as
an Indemnifying Principal) be bound by the actions of the Indemnifying Principal
or Principals which do assume the defense.
(c) In the case of JV Losses, the Principals shall select a single
counsel to represent them at their joint expense in the action or proceeding.
The Principals may retain separate counsel to protect their individual
interests, but the fees and expenses of any such counsel shall be for the sole
account of the Principal retaining such counsel.
(d) Notwithstanding the Indemnifying Principal's election to assume
the defense of an action or proceeding, the Indemnified Principal or Principals
in connection with an Other Loss (but not a JV Loss) shall have the right to
employ one separate counsel (including local counsel), and the Indemnifying
Principal shall bear the reasonable fees, costs and expenses of such separate
counsel if (i) the use of counsel chosen by the Indemnifying Principal to
represent the Indemnified Principal or Principals would present such counsel
with a conflict of interest; (ii) the actual or potential defendants in, or
targets of, any such action include both the Indemnified Principal or Principals
and the Indemnifying Principal and either or both of the Indemnified Principals
shall have reasonably concluded that there may be legal defenses available to it
which are
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different from or additional to those available to the Indemnifying Principal;
(iii) the Indemnifying Principal shall not have employed counsel reasonably
satisfactory to the Indemnified Principal or Principals to represent the
Indemnified Principal or Principals within a reasonable time after notice of the
institution of such action; or (iv) the Indemnifying Principal shall authorize
either or both of the Indemnified Principals to employ separate counsel at the
expense of the Indemnifying Principal.
(e) If the indemnification provided for in this Section 6 is
unavailable or insufficient to hold harmless any Indemnified Principal, then
each Indemnifying Principal shall contribute to the amount paid or payable by
such Indemnified Principal as a result of the JV Loss or Other Loss, as the case
may be, in such proportion as is appropriate to reflect (i) in the case of JV
Losses, the relative benefits received by the Indemnified Principal on the one
hand and the Indemnifying Principals on the other hand, in each case from the
consummation of the Transactions as contemplated by and pursuant to the terms of
this letter, which relative benefits the parties agree are proportionate to
their prospective Equity Percentages in the JV, and (ii) in the case of Other
Losses, the extent to which such Losses result from actions or failures to act
of the Indemnifying Principal. Notwithstanding the rights of any Principal to
contribution in this Section 6(e), no Principal shall be required to contribute
an amount that is in excess of the amount which would have been required to be
paid by such Principal had such amount been calculated in accordance with the
indemnification provisions of this Section 6.
(f) Definitions. For purposes of this Section 6,
(i) The term "Proceeding" shall mean any action, suit,
litigation, arbitration, proceeding (including any civil, criminal,
administrative, investigative or appellate proceeding and any informal
proceeding), prosecution, contest, hearing, inquiry, inquest, audit, examination
or investigation commenced, brought, conducted or heard by or before, or
otherwise involving, any governmental entity.
(ii) The term "Losses" shall mean any and all actual losses,
liabilities, damages, judgments, settlements and expenses (including interest
and penalties with respect thereto and reasonable attorneys' fees and expenses
and reasonable accountants' fees and expenses incurred in the investigation or
defense of any Proceeding) incurred by any Principal to which such Principal may
become subject as a result of a claim of or Proceeding initiated by a third
party, irrespective of whether such Losses have been incurred or suffered as a
result of Proceedings initiated by a governmental entity or otherwise.
(iii) The term "JV Losses" shall mean any Losses, but only
insofar as such Losses arise out of or are based upon this Commitment Letter or
the making of a proposal with respect to the Merger by the Principals to the
Board of
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Directors of Xxxxxxx, or the consummation of the Transactions (including the
Merger) pursuant to this Commitment Letter; provided, however, that JV Losses
shall not include any Losses arising out of or based upon conduct, omissions or
statements described in any of clauses (A) through (E) of the definition of
"Other Losses".
(iv) The term "Other Losses" shall mean any Losses incurred by
a Principal which at any time arise out of or are based upon:
(A) actions or discussions by another Principal
inconsistent with the course of conduct or direction approved or consented
to by the Principals;
(B) the failure of another Principal to file, or timely
file, any forms, reports, statements or other documents required to be
filed with the Securities and Exchange Commission (as applicable, an "SEC
REPORT");
(C) any untrue statement or alleged untrue statement or
omission or alleged omission contained in the SEC Report of another
Principal, which such statement or omission originated from such
Principal;
(D) any act or omission by such Principal which would
constitute fraud, gross negligence or willful misconduct by another
Principal; or
(E) the violation of any obligation of such Principal
under any agreement relating to the Transactions.
7. All legal expenses of the JV and each of the Principals incurred in
connection with the Transactions and the other transactions contemplated in this
Commitment Letter (including the transactions described in the Annexes hereto)
(the "TRANSACTION COSTS") will (i) be borne individually by each of the
Principals (with respect to the legal fees incurred by such Principal) except as
provided as follows; (ii) (a) Transaction Costs solely in organizing the JV will
be borne by Constellation; (b) Transaction Costs for services described on Annex
F in connection with work required to consummate such transactions will be borne
by the JV; and (c) Transaction Costs for services performed for each of
Principals in the event that the transactions described herein (including the
Annexes hereto) are not consummated will be borne by each of the Principals. The
expenses of other outside advisors retained by or for the account of the JV will
be borne by the JV.
8. The Principals' commitments in this Commitment Letter, other than those
in paragraphs 6 and 7, shall expire on September 15, 2004 if no Merger Agreement
shall have been entered into prior to that date.
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9. Except for the provisions of paragraphs 4, 6 and 7, which shall be
binding on the parties from the date hereof, (i) the transactions contemplated
hereby are subject to the performance of due diligence and the preparation,
execution and delivery of definitive agreements, in each case satisfactory to
each of the Principals, and (ii) any liability among the Principals shall attach
only upon execution and delivery of the Merger Agreement (in a form acceptable
to the Principals) with Xxxxxxx.
10. This letter and the interpretation thereof will be governed by New
York law applicable to agreements made and to be performed therein.
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Please confirm that the foregoing conforms to your understanding by
executing and returning a copy of this letter to the undersigned, whereupon this
letter shall, to the extent set forth in paragraph 10, constitute a binding
agreement among ourselves.
Very truly yours,
DOMAINES BARONS DE ROTHSCHILD (LAFITE) SCA
/s/ Xxxx xx Xxxxxxxxxx
By: _______________________________
Xxxx xx Xxxxxxxxxx, Managing Director
Confirmed and Agreed:
CONSTELLATION BRANDS, INC.
/s/ Xxxxxxx Xxxxx
By: _________________________
Xxxxxxx Xxxxx, Chairman of the Board
and Chief Executive Officer
HUNEEUS VINTNERS LLC
/s/ Xxxxxxx Xxxxxxx
By: ______________________
Xxxxxxx Xxxxxxx, Manager
ANNEX A
LLC OPERATING AGREEMENT
TERM SHEET
PARTIES Franciscan Vineyards, Inc. ("F"), Domaines Barons
de Rothschild (LAFITE) SCA ("D") and Huneeus
Vintners LLC ("H") (the "MEMBERS")
ENTITY _________, LLC
Delaware limited liability company, manager
managed
PERCENTAGE INTERESTS F = [38.6]%, to be classified as Class A
Membership Interests
H = [32.3]%, to be classified as Class B
Membership Interests
D = [29.1]%, to be classified as Class C
Membership Interests
All such interests (the "Membership Interests")
will have identical rights, regardless of class,
except for class voting rights of Members and
their designated Managers, as described herein.
CAPITAL CONTRIBUTIONS As per Contribution Agreement. No further
capital calls without unanimous consent of the
Members.
SCOPE AND PURPOSE OF To serve as a platform for the luxury wine
JOINT VENTURE business in the United States.
MANAGEMENT At least two managers to be designated by each
Class of Membership Interests (i.e. by each
Member) (the "Managers"); provided that any
Member may designate additional Managers if it so
chooses.
The Joint Venture shall have a Chief Executive
Officer and those officers, holding those titles
and duties, as determined by the Board of
Directors.
BOARD OF DIRECTORS The Board of Directors (the "Board") will be
comprised of the Managers appointed by each Class
of Membership Interests as described above.
The management of the Joint Venture shall be
vested in the Board of Directors. Except for the
appointment of Managers, or as otherwise provided
herein or by
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nonwaivable provisions of applicable law, the
Members shall not have any right to vote or to
take part in the management or control of the
Joint Venture business or have any right or
authority to act for or bind the Joint Venture.
Each Manager on the Board of Directors shall be a
"manager" for purposes of the Delaware Limited
Liability Company Act (the "ACT").
Except for situations in which the approval of
the Members is expressly required by the
provisions hereof or by nonwaivable provisions of
applicable law, the Board shall have complete
discretion, power and authority in the management
and control of the business of the Joint Venture,
shall make all decisions affecting the business
of the Joint Venture and shall manage and control
the affairs of the Joint Venture to carry out the
business and purposes of the Joint Venture.
In all votes of the Board, the Managers
designated by each class of Membership Interests
(each of which, a "CLASS" of Managers) shall have
a single vote. If there is more than one Manager
of a Class present at a meeting, they shall
determine among themselves the vote to be cast by
the Class. Telephonic meetings will be
authorized. At least one Manager of each Class
shall be required to constitute a quorum,
provided that on votes requiring only a majority
of the Board, (i) if a quorum is not present the
meeting may be continued on at least 72 hours
notice to all Directors, (ii) if a quorum is not
present at the continued meeting, the meeting may
again be continued on at least 72 hours notice to
all, and (iii) at the second continued meeting, a
quorum shall consist of Managers of only two
Classes.
Provision shall be made for written minutes of
all meetings of the Board, to be circulated and
approved by the Managers of each Class.
Unless otherwise specifically set forth in the
Operating Agreement or required by applicable
law, approval of any vote or action of the Board
shall require the affirmative vote of at least
the Managers of two Classes. However, the
following votes and action shall require the
affirmative approval of the Managers of all three
Classes ("UNANIMOUS APPROVAL"), except as
otherwise provided under "Business Opportunities"
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below:
(a) the assumption of the representation of any
third-party brands, or the purchase,
licensing, sale or other acquisition or
disposition of brands;
(b) any amendments to the Certificate of
Formation of the Joint Venture or the
Operating Agreement;
(c) any issuance of additional membership
interests or rights therein, except for AFH
incentive compensation, as described in
Annex __ to the Commitment Letter;
(d) any incurrence of indebtedness in excess of
that contemplated by the indebtedness
reduction schedule provided for in the
current 5-year business plan, as increased
by 0.25x EBITDA for the trailing 12 months;
(e) any capital expenditures in excess of $1
million in the aggregate not provided for
in the current 5-year business plan;
(f) any program to build up inventory above the
level provided for in the current 5-year
business plan;
(g) any merger, consolidation or other business
combination;
(h) any acquisition of assets, equity or debt
of another business or person outside the
ordinary course of business in excess of $1
million;
(i) any disposition, directly or indirectly of
all or substantially all of the assets of
the Joint Venture;
(j) any disposition of an asset with either a
book or fair market value in excess of $3
million;
(k) any (i) voluntary or involuntary
dissolution or liquidation, (ii) filing of
a petition in bankruptcy, (iii) appointment
of a receiver, or (iv) assignment for the
benefit of creditors;
(l) any change in dividend or distribution
policies;
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(m) any change in accounting or tax policies;
(n) appointment of a new CEO;
(o) appointment or termination of a CFO;
(p) any action, transaction or series of
transactions with a single unaffiliated
third party during any fiscal year of the
Joint Venture (1) in the ordinary course of
business of the Joint Venture, involving in
the aggregate an amount in excess of $5
million, or (2) outside the ordinary course
of business of the Joint Venture, involving
in the aggregate an amount in excess of $1
million;
(q) any material departure from the strategic
direction developed by the parties for the
business of the Joint Venture;
(r) if [70% Test failure] has occurred, then
thereafter any action not in accordance
with the annual business plan (the
"BUSINESS PLAN"; and
(s) material transactions between the Joint
Venture and any Member or a Member's
affiliate.
Other matters which require Board action shall
require the affirmative approval of two of the
three Classes ("MAJORITY APPROVAL"). These
include without limitation:
(a) adoption of and adjustment or amendment of
any annual Business Plan;
(b) termination of the CEO for "cause" (as
defined in the CEO's employment agreement);
(c) during any fiscal year of the Joint
Venture, any action, transaction or series
of transactions, or any capital expenditure
or like transaction (including but not
limited to capital leases) not (as to any
of the foregoing) authorized by other Board
action (such as specific authorization in
the Business Plan or any continuing written
authorization) (1) in the ordinary course
of business of the Joint Venture, involving
in the aggregate an amount in excess of $1
million, or (2) outside the
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ordinary course of business of the Joint
Venture, involving in the aggregate an
amount in excess of $100,000;
(d) determination of terms of employment offers
to senior management (direct reports to the
CEO);
(e) approval of all long-term and short-term
incentive plans offered to the employees of
the Joint Venture; and
(f) transactions involving an aggregate amount
in excess of $60,000 between the Joint
Venture and any Member or a Member's
affiliate.
CHIEF EXECUTIVE OFFICER Xxxxxxx Xxxxxxxxx Xxxxxxx will be appointed as
the Chief Executive Officer.
Subject to the direction of the Board, the Chief
Executive Officer shall have general and active
control of the Joint Venture's general day-to-day
business and shall see that all orders and
resolutions of the Board are put into effect.
ENTITY CLASSIFICATION The Joint Venture shall elect to be taxed as a
ELECTION partnership for both state and federal tax
purposes.
ALLOCATION OF PROFITS The Joint Venture's profits and losses shall be
AND LOSSES allocated to the Members in accordance with each
Member's Percentage Interest, subject to possible
special allocations agreed to by all Members.
MANDATORY DISTRIBUTIONS 1 - Tax distributions, in an amount equal to the
highest marginal combined federal, state and
local tax rates of any Member (currently
estimated at [47%]) multiplied by the Joint
Venture's taxable income for the applicable
period.
2 - An additional amount such that H's pro rata
share will be $500,000, if requested by any
Member.
3 - Beginning in the eighth year of the existence
of the Joint Venture, an additional amount which,
together with the distributions in 1 and 2 above,
constitutes 75% of the available cash (net of
reserves) for the year.
The foregoing shall be subject to any external
constraints, such as loan covenants and prudent
reserve
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policies, provided that no voluntary external
restrictions on distributions will be agreed to
without Unanimous Approval. All distributions
shall be made to the Members in accordance with
their Percentage Interests.
Any other distributions will be made only with
the Unanimous Approval of the Board.
BUSINESS OPPORTUNITIES Any opportunity presented to a Member to acquire
an interest in any of a list of brands to be
attached to the LLC Agreement must first be
offered to the Joint Venture prior to such Member
acquiring the same. If the Joint Venture
determines not to acquire such interest, then the
Member presenting the opportunity may acquire
that interest. The determination of whether such
business opportunity should be acquired by the
Joint Venture will, notwithstanding any contrary
provision above requiring Unanimous Approval, be
made by a Majority Approval of the Board. Other
than as noted above, any Member may engage in, or
possess an interest in, other business ventures
of any nature and description, whether or not
such other enterprises shall be in competition
with or operating the same or similar businesses
as the Joint Venture, and no Member shall have
any obligation or duty to bring business
opportunities to the attention of the Joint
Venture or any other Member.
VOLUNTARY TRANSFER OF No transfers to third parties (including, as to
INTERESTS any Member, any other Member), except to a
Permitted Transferee, except as provided below.
If one Member sells its interest to another
Member, all matters previously requiring Majority
Approval shall require Unanimous Approval.
"PERMITTED TRANSFEREE" shall be defined, with
respect to any Member, as any individual,
corporation, partnership, joint venture,
association, trust or unincorporated organization
directly or indirectly controlling, controlled
by, or under common control with such Member,
provided that (x) the entire interest of the
original Member must be transferred to such
Permitted Transferee and (y) such Member shall
unconditionally and irrevocably at all times be
liable for the payment and performance
obligations of such person hereunder and under
the Commitment Letter and all other arrangements
described therein.
-7-
Right of First Offer
If after the sixth anniversary of the formation
of the Joint Venture a Member desires to sell all
or any portion of its Membership Interest, then
that Member shall first offer such Membership
Interest to the other Members by giving written
notice of such offer to the Board of Directors
and the other Members, stating the portion of its
Membership Interest it proposes to sell, the
offer price, the consideration it will accept
and, in reasonable detail, all other material
matters relating to the offer. If a second Member
does not, within 15 days of receipt of the
Notice, give notice that it will join the offer
to sell, then the following procedures will apply
and, until they are completed, neither other
Member may initiate a sale of its Membership
Interest.
The other Members shall have the option to
accept such offer, exercisable by giving
written notice of acceptance to the
initiating Member, with a copy to each of
the other Members, within 120 days after
its receipt of the offer. The closing of
the transfer of the Membership Interest
shall take place on a date selected by the
responding Member or Members not less than
30 days or more than 60 days after the
giving of the acceptance notice. If the
other Members do not elect to purchase all
of the offered Membership Interest, then
the initiating Member shall have 180 days
within which to sell such Membership
Interest to a third party on terms and
conditions no more favorable to the third
party than as set forth in the original
offer to the other Members.
If, within 15 days of receipt of the notice from
the initiating Member, a second Member gives
notice that it will join the initiating Member's
offer to sell, then the following procedures will
apply.
The remaining Member shall have the option
to accept the offer of the two other
Members, on the same basis and within the
same time periods as set forth above. If
the remaining Member does not elect to
purchase all of the Offered Membership
Interests, then the offering Members shall
have 180 days within which to sell such
Membership Interests to a third party or to
cause the Joint Venture or its
-8-
assets to be sold, in which case (i) the
offering Members shall have the right (in
the case of a sale of Membership Interests)
to cause the remaining Member to sell its
Membership Interest on the same terms and
conditions, (ii) the remaining Member shall
be required to grant any necessary
approvals to such sale, and (iii) should
the other Members not require the remaining
Member to join in the sale, the remaining
Member shall have the right to sell its
Membership Interest in the sale on the same
terms and conditions as the other Members.
Time shall be of the essence with respect to
exercise of rights to buy or sell under the
provisions of this section.
CHANGE OF CONTROL If a change of control [to be defined] of any
Member, or of a person or entity controlling such
Member, occurs, the other Members will have the
right to determine whether to sell their
Membership Interests to or purchase the
Membership Interest held by the Member as to
which the change of control has occurred at the
fair market value thereof. If the other Members
choose to purchase the Membership Interest held
by the Member as to which the change of control
has occurred, each such Member will have the
right to purchase such Membership Interest pro
rata according to their ownership interests in
the Joint Venture. The decision to purchase or
sell must be made jointly by the other Members.
In the absence of agreement, there will be no
purchase or sale, provided that the other Members
may agree that one of them will purchase the
Membership Interests of the other two Members, at
the fair market value thereof, which agreement
will also be binding upon the Member as to which
the change of control has occurred.
Appropriate adjustments in the governance
provisions will be agreed to reflect the changed
economic interest of the acquiring Member(s).
Unless it is determined by agreement among the
Members, fair market value will be determined by
the following process.
The Members as to which the change of
control has occurred, on the one hand, and
the other Members (by agreement between
them),
-9-
on the other hand, will prepare a proposal
as to the fair market value of the Joint
Venture, including such supporting
information as they may select, and each
will submit its proposal to an arbitrator,
who shall be experienced in the valuation
of businesses similar to the Joint
Venture's business. The arbitrator, in its
discretion, may conduct a proceeding to
receive additional information about the
basis of and support for the two proposals.
The arbitrator will then determine the fair
market value of the Joint Venture by
choosing one or the other of the two
proposals; provided that the arbitrator
shall not have the discretion or authority
to choose any other value. The fair market
value of the Membership Interest or
Interests to be purchased and sold
hereunder will then be deemed to be the
amount that would be distributed to the
holder of such Membership Interest(s) if
the Joint Venture were sold at the amount
determined by the arbitrator and then
liquidated.
MATERIAL BREACH No special provisions. Members retain their
contractual remedies.
BUSINESS PLAN DEADLOCK If the Board fails to approve the Business Plan
on two successive years, the second of which is
no earlier than the fourth year of the Joint
Venture, then:
FIRST: The Members shall negotiate in good faith
to resolve the issue or to agree on an exit. If
necessary, the dispute will be referred to the
chief executive officers of each of the Members.
SECOND: If no agreement is reached, then the
following blind auction process shall be used:
(1) Each Member may submit a sealed offer
to an independent person. An offer is a proposed
all cash price for the entire Joint Venture.
(2) Subject to (3) below, the Member
submitting the highest offer must buy out the
other Members at the lower submitted offers. If
more than one Member submits the same highest
offer, they will resubmit bids, which may be
higher, lower or the same as before. If, after
resubmission, there remains more than one offer
at the same highest amount, the buyer
-10-
will be selected by random process.
(A) Each selling Member shall receive
what it would receive if the Joint Venture
were sold for that Member's submitted offer
and then liquidated.
(B) In determining liquidation
amounts, all outstanding incentive equity
will be treated as fully vested immediately
before the liquidation.
(C) A Member who does not submit an
offer will become a seller who is deemed,
for these purposes, to have submitted an
offer at the same amount as the buyer.
(3) To give the buying Member adequate time
to arrange purchase financing, the closing will
be a date selected by the buyer no later than 180
days after being selected as buyer.
(A) The purchase will be on an
all-cash basis;
(B) If the buyer fails to timely
close, the buyer will promptly reimburse
the other Members for all reasonable costs
they incurred in connection with the
buy-sell process. If there is at least one
other Member who submitted an offer, then
the Member who submitted the next highest
offer becomes the buyer and the initial
buyer becomes a seller and is deemed to
have submitted an offer at the same amount
as the new buyer (and, if a Member had not
submitted an offer, its deemed offer price
is also adjusted to the price of the new
buyer). (The process will be the same if
the new buyer fails to close: that is, if
all three Members submitted offers, the
Member who submitted the lowest offer will
become the buyer, and the other two Members
will become sellers and will be deemed to
have submitted offers at the same amount as
the new buyer.)
(4) If the process in paragraphs (1)-(3)
above does not result in a purchase-sale
transaction (including if no offers are
submitted), the Members will appoint an
investment banker to solicit bids from
-11-
third parties to buy the entire Joint Venture,
and the Joint Venture will be sold to the highest
and best third-party bidder.
TERMINATION, DISSOLUTION, The property and proceeds from liquidation of
LIQUIDATION BY VOTE Joint Venture assets shall be applied as follows:
OF THE BOARD
(a) first, to the payment of creditors of the
Joint Venture, including Members who are
creditors, to the extent permitted by law;
(b) and then, to pay the expenses of winding up
the Joint Venture; and
(c) and finally, to each Member in accordance
with its Percentage Interest.
ANNEX B
CONTRIBUTION AGREEMENT
TERM SHEET
PARTIES C, H, D and Holdco (a 100%-owned subsidiary
of D)(1)
CREATION OF JV The parties will form a Delaware limited
liability company (the "JV") to which they will
contribute cash and certain assets and in which
they will receive the following ownership
interests: C - [38.6]%; H - [32.3]% and Holdco -
[29.1]%.
CONTRIBUTED ASSETS Pursuant to the terms of a Contribution Agreement
(the "CONTRIBUTION AGREEMENT"), each of the
following parties shall contribute to the JV the
following assets (the "CONTRIBUTED ASSETS") in
consideration of the ownership interests received
in the JV:
C - Cash in the amount of $54 million; and
- all assets set forth on Schedule C,
including the Oakville Estates vineyard and
certain equipment pertaining to the
vineyard (the "NON-CASH C ASSETS"), but not
including the 2004 crop from the Oakville
Estates vineyard.
H - all Contracts set forth on a schedule to
the Contribution Agreement, all assets set
forth on Schedule H, including the assets
of the Xxxxxxxxx xxxxxxxx and winery and
the business operated with such assets.
- The contributed assets shall not include:
- four parcels of land shown on
Schedule H hereto;
- building rights with respect to the
parcels of land which are being
contributed;
- accounts receivable with respect to
sales of wines of the 2001 vintage;
----------
(1) Holdco shall act through CH following the consummation of the
Merger (as defined in the Commitment Letter).
-2-
- personal antique furniture of AH and
vineyard equipment and office equipment
associated with H's retained business.
Holdco - all right, title and interest of CH in the
assets used in the business of CH, wherever
located, but excluding CH's right to
appoint a director to D's board, which
right shall be terminated, and excluding
the rights and obligations related to a
certain joint venture, provided that
subject to obtaining the requisite consents
these rights will be transferred and if
they are not the parties will agree on
other arrangements as described in the
"Non-Transferable Assets and Liabilities"
section, below.
TRANSFERRED LIABILITIES Each of the following parties shall transfer or
cause to be transferred to the JV the following
liabilities (the "TRANSFERRED LIABILITIES"),
which the JV will assume:
C - all liabilities associated with the
ownership, use and operation of the
Non-cash C Assets, arising on or after the
date of the closing of the Contribution
Agreement of such assets to the JV
H - up to $18.5 million in debt; and
- except for liabilities related to
employees, which liabilities are being
dealt with in the "Employee Benefits
Matters" section below, all liabilities
associated with the ownership, use and
operation of the assets contributed by H,
arising on or after the date of the closing
of the Contribution Agreement of such
assets to the JV.
Holdco - all liabilities of any kind, character or
description (whether known or unknown,
accrued, absolute, contingent or otherwise)
of CH or otherwise related to any of the
assets or the business of CH.
For the avoidance of doubt, with respect to the
Transferred Liabilities of C and H only, the JV
will not assume the following (the "RETAINED
LIABILITIES"):
- any liabilities arising out of the real
estate, equipment or rights retained or
transferred to a third party by H (as shown
on Schedule H hereto) or any other assets
specifically retained by H or C; and
-3-
- any tax liabilities, except as otherwise
provided in the "Taxes" section of this
Annex, with respect to pre-Closing tax
periods or resulting from any transfers
required by the Contribution Agreement.
NON-TRANSFERABLE ASSETS If any assets, contracts, rights, benefits or
AND LIABILITIES liabilities of CH intended to be contributed or
transferred hereunder require any third party or
governmental consent to be so contributed or
transferred to the JV, each of Holdco and the JV
will use their best efforts to obtain all such
consents necessary to cause the contribution or
transfer of all such assets, contracts, rights,
benefits or liabilities to the JV. If such
consents are not obtained, the parties will, at
the JV's expense, cooperate in a mutually
agreeable arrangement under which the JV would
obtain the rights and benefits and assume the
obligations and liabilities thereunder in
accordance with the Contribution Agreement. The
JV will indemnify and otherwise make whole each
of the parties for any claims, obligations and
liabilities (including all costs and expenses
incurred in connection therewith) arising under
any such assets, contracts, rights, benefits or
liabilities.
EMPLOYEE BENEFITS MATTERS The JV will assume all liabilities associated
with the current and former employees of CH.
The JV will assume only the accrued but unused
vacation and sick leave obligations of the
current employees of Xxxxxxxxx xxxxxxxx and
winery who are employed by the JV after the
closing of the Contribution Agreement.
REPRESENTATIONS Holdco will cause the assets and liabilities of
AND WARRANTIES CH to be transferred to the JV on an "as is,
where is" basis.
Holdco will make the following representations
and warranties for the benefit of the JV:
- corporate existence, power and due
authorization of Holdco to enter into
Contribution Agreement.
C and H will make the following representations
and warranties for the benefit of the JV, as of
the date hereof and as of the closing of the
Contribution Agreement (knowledge and materiality
qualifiers to be reviewed by the parties):
- corporate existence, power and due
authorization
-4-
of such party;
- non-contravention of all material
agreements relating to the Contributed
Assets of such party;
- no consents required from third parties
with respect to the transfer of Contributed
Assets to the JV or the assumption of the
Transferred Liabilities by the JV (with
exception of H's transferred debt);
- each such party has good title to, and upon
closing of the Contribution Agreement, the
JV will have good title to, or in the case
of any leased real property or personal
property has valid leasehold interests in,
and upon contribution the JV will have
valid leasehold interests in, all
Contributed Assets. Each of the Contributed
Assets shall be free of any mortgage, lien,
pledge, charge, security interest or
encumbrance (collectively, "LIENS"), with
the exception of:
o Liens disclosed in the financial
statements of such party or as a
matter of public record set forth
specifically in the Contribution
Agreement;
o Liens for taxes, assessments and
similar charges that are not yet due;
and
o mechanic's, materialman's, xxxxxxx's,
repairer's and other similar Liens
arising or incurred in the ordinary
course of business or that are not yet
due and payable.
- each such party has contributed to the JV
all such rights, privileges, property and
assets as are required to operate the
business or activities related to such
party's Contributed Assets in the ordinary
course of business consistent with past
practices of such party;
- all of such party's inventories arising
from or otherwise relating to the
Contributed Assets are owned free and clear
of all Liens. All such inventories consist
of items of a quality usable or saleable in
the normal course of business consistent
with past practices of such party and are
and will be in quantities sufficient for
the normal
-5-
operation of the business of the JV;
- all accounts receivable contributed by a
party will, at the closing of the
Contribution Agreement, be valid, genuine
and fully collectible in the aggregate
amount thereof, subject to reasonable and
customary reserves for doubtful accounts;
- the intellectual property contributed by a
party is not, and upon contribution shall
not be, subject to any outstanding
judgment, injunction, order, decree or
agreement restricting the use thereof by
the JV or restricting the licensing thereof
by the JV to any person;
- all intercompany arrangements and accounts
relating to such party's Contributed Assets
(other than as specifically disclosed in
the Contribution Agreement) have been
terminated prior to the Closing of the
Contribution Agreement;
- none of such party's Contributed Assets are
bound by any material contracts (other than
as specifically disclosed in the
Contribution Agreement);
- no material litigation affecting such
party's Contributed Assets;
- compliance with laws, regulations and court
orders;
- no undisclosed material liabilities with
respect to such party's Contributed Assets;
- employee and employee benefit matters with
respect to such party's Contributed Assets;
and
- environmental and tax matters.
COVENANTS The following parties will make the following
covenants:
- From the date of the Contribution Agreement
until the closing of the Contribution
Agreement, C and H shall conduct all
business in connection with their
Contributed Assets in the ordinary course
and shall use their reasonable best efforts
to preserve intact the relationships with
third parties and, in the case of H, to
keep available the services of the
-6-
present employees. C and H will not commit
or agree to commit any action that would
make any representation or warranty of such
party under the Contribution Agreement
untrue, or omit or agree to omit to take
any action necessary to prevent any such
representation or warranty from being
inaccurate in any respect at any such time;
and
- H and C will continue to maintain insurance
coverage through the closing of the
Contribution Agreement, at levels
consistent with past practices, with
respect to such party's Contributed Assets.
CLOSING CONDITIONS The obligations of each party to consummate the
contribution contemplated hereby are subject only
to the following conditions:
- receipt of all requisite antitrust
approvals in the U.S.;
- the consummation of the merger of Holdco
into CH;
- the execution of all agreements described
in the Commitment Letter (including the
Annexes thereto) and the satisfaction of
all conditions to all such agreements set
forth in the agreements or the Commitment
Letter by all requisite parties; and
- the absence of any injunctions preventing
the consummation of the transactions
contemplated hereby.
TERMINATION The Contribution Agreement may be terminated:
- by any party if any closing condition is
incapable of being satisfied, provided that
the party seeking to terminate is not
responsible for such condition not being
satisfied.
INDEMNIFICATION The parties and the JV shall indemnify one
another as follows:
JV The JV will indemnify each of C, H and Xxxxxx
against any damages arising out of the
Transferred Liabilities and will indemnify CH for
any other liabilities arising from the business
of CH whether prior to or after the closing of
the Contribution Agreement.
-7-
C and H Each of C and H will indemnify the JV against any
damages arising out of liabilities not expressly
assumed by the JV and any material
misrepresentations by such party.
D will indemnify the JV with respect to 49% of
any damages suffered by the JV as a result of the
existence of any liability of CH in existence as
of the closing of the Contribution Agreement not
either publicly disclosed, provided for in the
financial statements of CH, arising out of any
agreements or arrangements which are publicly
disclosed or available, or which have otherwise
been disclosed to C, H or the JV in writing.
D's obligations under the indemnity will be
subject to a deductible of $2,000,000 and a cap
of $10,000,000 and will expire 12 months from the
closing of the Contribution Agreement.
Limitations regarding The indemnity for material misrepresentations
Misrepresentations shall survive for 12 months from the Closing and
be subject to an individual deductible of
$1,000,000 in connection with H's indemnity and
$500,000 in connection with C's indemnity.
Neither C nor H shall be required to indemnify
the JV in an amount greater than $10,000,000.
PREPAID EXPENSES So as to provide the benefits and burdens of the
2004 harvests from the contributed H and C
vineyards, all vineyard expenses shall be
apportioned between the respective contributing
parties and the JV, based on the number of days
included in the period up to and including the
last day of the month succeeding the 2004 harvest
on the one hand, and the number of days following
such date during such growing period on the other
hand. Similarly expenses related to the
production of the 2004 vintage wines being
contributed by H will be apportioned as of the
same date.
TAXES All real property taxes, personal property taxes
and similar ad valorem obligations levied with
respect to the Contributed Assets of C and H for
a taxable period which includes (but does not end
on) the date of the Contribution Agreement shall
be apportioned, based on the number of days
included in the period up to and including the
last day of the month succeeding the 2004 harvest
on the one hand, and the number of days
-8-
following such date during such taxable period on
the other hand, between the respective party
contributing such assets and the JV.
All excise, sales, use, value added,
registration, stamp, recording, documentary,
conveyancing, franchise, property, transfer,
gains and similar taxes, levies, charges and fees
incurred in connection with the transactions
contemplated by the Contribution Agreement shall
be borne by the JV.
DEBT The JV shall use its best efforts to negotiate,
and shall bear all costs and expenses in
connection with any negotiations, with CH's
creditors to assign all of CH's debt instruments
(including all private placement notes and bank
credit agreements) to the JV. In the event that
such debt instruments cannot be assigned, the JV
shall, at its own cost and expense and for its
own account, cause all necessary actions to be
taken to discharge all of CH's obligations,
including principal, interest, penalties and all
costs and expenses in connection therewith, under
such debt instruments.
All costs and expenses in connection with the
negotiation or refinancing of H's debt in
connection with this Contribution Agreement shall
be borne pro rata by the JV and H according to
the following formula:
- the JV will pay the percentage of such
costs that corresponds to the
percentage of the value of all debt
that is to be contributed by H to the
JV; and
- H will pay the percentage of such
costs that corresponds to the
percentage of the value of all debt
that is retained by H,
except that all costs and expenses incurred in
connection with the division of the debt
collateral between the Contributed Assets and the
assets to be retained by H shall be borne by H.
OTHER TAX MATTERS For tax purposes, (i) the contributions of assets
and liabilities by C and H are intended to be
treated as contributions described in Section 721
of the Internal Revenue Code of 1986, as amended
(the "CODE"), and (ii) the contribution of assets
and liabilities by Holdco (through CH) are
intended to be treated as (x) in part a
contribution by CH of its assets to JV under
Section
-9-
721 of the Code, and (y) in part a sale by CH of
its assets to JV under Section 707 of the Code.
Notwithstanding the foregoing, there is no
intention for the JV to indemnify any party other
than to indemnify CH, for tax liabilities arising
out of such party's contribution.
The parties will negotiate in good faith to agree
the fair market values of the specific categories
of assets contributed by C, H and Xxxxxx as of
the closing of the Contribution Agreement.
GOVERNING LAW; JURISDICTION New York
SCHEDULE C
(TO CONTRIBUTION TERM SHEET)
CONTRIBUTED ASSETS OF C
See the following as attached:
1. Deed for Oakville Vineyard
2. Equipment List
1
FIRST AMERICAN TITLE COMPANY 1999-0018240
OF NAPA
Recorded | REC FEE 16.00
RECORDING REQUESTED BY AND Official Records | PCOR FE 20.00
County Of |
WHEN RECORDED MAIL TO NAPA |
XXXX XXXXXX |
Xxxxxxx Xxxxx & Xxxxxx LLP Recorder |
000 Xxxxx Xxxxxx, Xxxxx X x
Xx. Xxxxxx, XX 00000 | SS
ATTN.: Xxxxxxx X. Xxxxxx, Esq. 02:25PM 04-Jun-1999 | Page 1 of 4
117088-F
--------------------------------------------------------------------------------
APN: 000-000-000, 000-000-000 See separate declaration for transfer tax.
GRANT DEED
By this instrument dated June 4, 1999, for a valuable consideration,
XXXXX PROPERTY, INC., a California corporation,
hereby GRANTS to
SCV-EPI VINEYARDS, INC., a New York corporation;
the Real Property in the State of California, County of Napa,
DESCRIBED IN EXHIBIT A ATTACHED HERETO AND MADE A PART HEREOF
XXXXX PROPERTY, INC.
a California corporation
By: /s/ Xxxxxxx Xxxxxxxxxx
----------------------------------
Xxxxxxx Xxxxxxxxxx, Secretary
DOCUMENTARY TAX
Documentary Transfer Tax $ DECLARATION FILED
----------------------
Computed on full value of Property Conveyed, or
Computed on full value less liens & encumbrances
remaining thereon at time of sale.
[illegible signature]
------------------------------------------------
Signature of declarant or agent determining tax
CERTIFICATE OF ACKNOWLEDGEMENT
State of California )
---------------------
County of San Francisco )
--------------------
On June 3, 1999 before me, Xxxxxxxx X. Xxxx, Notary Public
------------ -------------------------------------------------,
personally appeared Xxxxxxx Xxxxxxxxxx
----------------------------------------------------------,
/ / personally known to me, OR /X/ proved to me on the basis of satisfactory
evidence to be the person whose name is
subscribed to the within instrument and
[XXXXXXXX XXXX NOTARY SEAL] acknowledged to me that he executed the
same in his authorized capacity, and that
by his signature on the instrument the
person, or the entity upon behalf of which
the person acted, executed the instrument.
WITNESS my hand and official seal
Signature /s/ Xxxxxxxx X. Xxxx
------------------------------
EXHIBIT A
(LEGAL DESCRIPTION)
The land referred to herein is situated in the State of California, County of
Napa and is described as follows:
BEING Lots 17, 18, 19 and 20 in Block D and a portion of the lands of X. X.
Xxxxxxxx as shown on the map entitled, "Map of the Subdivision of the Caymus
Grant in Napa County, California", recorded January 2, 1874 and filed in Book 1
of Maps at page 81 in the office of the Napa County Recorder, described as
follows:
BEGINNING at a 3/4" iron pipe on the Southeasterly line of the Oakville Cross
Road at the most Northerly corner of Parcel 1, as said parcel is shown on map
No. 2384 entitled, "Parcel Map of the Lands of Xxxxxxx X. Xxxxxx", recorded May
25, 1973 and filed in Book 5 of Parcel Maps at page 28 in said Recorders Office;
thence North 60(degree symbol), 02' 55" East along said Southeasterly line of
said Oakville Cross Road 251.93 feet to a 3/4" iron pipe; thence South 35(degree
symbol) East 1799.89 feet to a 3/4" iron pipe on the Northwesterly line of Lot
17 of said Caymus Grant; thence along said Northwesterly line of said Lot 17,
North 59(degree symbol) 50' East 1530.52 feet to a 6" x 6" Redwood stake on the
Westerly line of the County road known as "Middle Valley Road" as shown on said
map of said Caymus Grant, from which the remnants of a large oak xxxxx bears
South 26" East 44.2 feet; thence along the Westerly line of said "Middle Valley
Road" South 22(degree symbol) 20' 35" East 1885.90 feet to a 3/4" iron pipe at
the most Easterly corner of Lot 20 of said Caymus Grant; thence South 52(degree
symbol) 35' 10" West along the Southeasterly line of said Lot 20 and Lot 19 of
said Caymus Grant 3784.03 feet to the center of the Napa River, thence up the
center of the Napa River, North 85(degree symbol) 50" West 13.16 feet, North
81(degree symbol) 29' West 93.9 feet, North 64(degree symbol) 43' West 88.5
feet, North 41(degree symbol) 42' West 79.9 feet North 56(degree symbol) 38'
West 125.9 feet, North 85(degree symbol) 28' West 135.7 feet, North 89(degree
symbol) 06' West 100.7 feet, North 71(degree symbol) 42' West 96.4 feet, South
71(degree symbol) 33' West 115.3 feet, South 78(degree symbol) 46' West 158.1
feet, North 50(degree symbol) 12' West 96.1 feet, North 50(degree symbol) 18'
West 87.7 feet, North 29(degree symbol) 44' West 136.1 feet, North 11(degree
symbol) 50' West 102.0 feet, North 15(degree symbol) 20' West 147.0 feet, North
38(degree symbol) 04' East 124.5 feet, North 5(degree symbol) 13' East 100.4
feet, North 5(degree symbol) 36' West 97.7 feet, North 44(degree symbol) 56'
West 94.0 feet, North 39(degree symbol) 32' West 72.0 feet, North 26(degree
symbol) 21' West 130.9 feet, North 33(degree symbol) 18' West 112.6 feet, North
60(degree symbol) 13' West 79.6 feet, North 72(degree symbol) 07' West 80.5
feet, North 40(degree symbol) 51' West 149.6 feet, North 19(degree symbol) 41'
West 103.2 feet, North 58(degree symbol) 30' West 75.8 feet, North 89(degree
symbol) 07' West 99.4 feet, and North 74(degree symbol) 03' West 103.87 feet to
the Northwesterly line of Lot 18 of said Caymus Grant; thence along said
Northwesterly line of said Lot 18, North 59(degree symbol) 50' East 894.19 feet
to a 1 1/4" iron pipe at the most Easterly corner of the 26.49 acre tract of
land shown on map number 426 entitled "Record of Survey Map of the Lands of
Xxxxx Del Xxxxxx", recorded September 1, 1959 and filed in Book 5 of Surveys at
page 4 in said Recorders Office; thence along the Northeasterly line of said
26.49 acre tract, North 34(degree symbol) 57' 36" West 1808.92 feet to a 1 1/4"
iron pipe at the most Northerly corner of said 26.49 acre tract on the
Southeasterly line of said Oakville Cross Road; thence along the Southeasterly
line of said road, North 60(degree symbol) 02' 55" East 968.40 feet to a 3/4"
iron pipe that replaces the 1 1/4" iron pipe at the most Westerly corner of
Parcel B shown on map number 1539 entitled, "Record of Survey Map of the lands
of Xxxxx X. Xxxxxxx et ux", recorded August 15, 1966 and filed in Book 15 of
Surveys at page 21 in said Recorders Office; thence along the Southwesterly line
of said Parcel B, South 34(degree symbol) 57' 08" East 1805.25 feet to a 3/4"
iron pipe on the
(Continued)
EXHIBIT A (cont.)
(Legal Description)
Northwesterly line of said Lot 18; thence along the Northwesterly line of said
Lot 18 and said Lot 17, North 59 degrees 50' East 970.82 feet to a 3/4" iron
pipe on the Southwesterly line of the "Remaining Lands of Xxxxxx", as shown on
said map number 2384; thence along said Southwesterly line of Xxxxxx, North 35
degrees West 1566.99 feet to a 3/4" iron pipe at the most Southerly corner of
said Parcel 1 shown on said map number 2384; thence along the Southeasterly and
Northeasterly lines of said Parcel 1, North 60 degrees 02' 55" East 232.87 feet
to a 3/4" iron pipe and North 35 degrees West 234.73 feet to the point of
beginning.
EXCEPTING THEREFROM that certain Parcel conveyed to Xxxxxxx X. Xxxxxx by Xxxx
recorded November 25, 1980 in Book 1184 at page 479 of Official Records of Napa
County.
APNs 000-000-000 and 000-000-000
EST REM
CLASS ACQDATE ASSET# DESCRIPTION LIFE LIFE SYC BATE
----- ------- ------ ----------- ---- ---- --------
B 7/1/1982 F1-00464 STEEL BLDG FOUNDATN 480 234 7/1/1982
B 5/1/1992 F1-00828 IMPRV - SHOP 120 - 5/1/1992
B 6/1/1992 F1-00827 IMPRV - OFFICE 120 - 6/1/1992
B 6/1/1992 F1-00829 IMPRV - TOWER 120 - 6/1/1992
B 9/1/1992 Fl-00826 IMPRV- HOUSE 120 - 9/1/1992
B 10/31/1998 F1-01542 OAKVILLE OFFICE ROOF 480 426 10/31/1998
B 12/1/2001 F1-02181 Oakville Vyd Office Buildout 396 378 12/1/2001
B 3/1/2002 F-02308 Oakville House Remodel 01 396 366 12/31/2000
B 3/1/2002 F-02312 Oakville House Remodel 01 396 366 2/28/2001
B 3/1/2002 F-02314 Oakville House Remodel 02 396 378 5/30/2001
B 3/21/2002 F-02195 Oakville house-professional svcs 480 474 312 112002
B 12/31/2002 F-02307 Oakville House Remodel 01 396 366 12/31/2000
B 1/31/2003 F-02300 Oakville House-interior design 480 474 1/31/2003
B 1/31/2003 F-02309 Oakville House Remodel 01 396 366 1/31/2001
B 1/31/2003 F-02310 Oakville House Remodel 01 396 366 1/31/2001
B 1/31/2003 F-02311 Oakville House Remodel 01 396 366 1/31/2001
B TOTAL
FE 3/31/1998 F1-01540 OAKVILLE OFFICE FURN 120 66 3/31/1998
FE 1/31/2003 F-02196 Oakville House Furn 120 114 1/31/2003
FE TOTAL
LI 1/1/1992 F1-00832 514 SOIL PREP 120 - 1/1/1992
LI 1/1/1992 F1-00833 514 OTHER - DEVEL. 120 - 1/1/1992
LI 1/1/1992 F1-00837 515C SOIL PREP 120 - 1/1/1992
LI 1/1/1992 F1-00838 515C OTHER - DEVEL. 120 - 1/1/1992
LI 5/1/1992 F1-00824 REFURBISH WELL BL560 120 - 5/1/1992
LI 1/1/1993 F1-00960 BLK 550 SOIL PREP 120 - 1/1/1993
LI 1/1/1993 F1-00965 BLK 555 SOIL PREP 120 - 11111993
LI 1/1/1994 F1-01076 551 SOIL PREP 120 6 1/1/1994
LI 1/1/1994 F1-01081 565 SOIL PREP 120 6 1/1/1994
LI 1/1/1995 F1-01218 516 SOIL PREP 120 18 1/1/1995
LI 1/1/1995 F1-01222 519 SOIL PREP 120 18 1/1/1995
LI 1/1/1995 F1-01229 531 SOIL PREP 120 18 1/1/1995
LI 1/1/1995 F1-01233 546 SOIL PREP 120 18 1/1/1995
LI 1/1/1996 F1-01387 505 SOIL PREP 120 30 1/1/1996
LI 1/1/1997 F1-01460 526 SOIL PREP 120 42 1/1/1997
LI 1/1/1997 F1-01465 532 SOIL PREP 120 42 1/1/1997
LI 1/1/1998 F1-01602 501 SOIL PREP 120 54 1/1/1998
LI 1/1/1998 Fl-01607 510 SOIL PREP 120 54 11111998
LI 1/1/1998 F1-01612 511 SOIL PREP 120 54 11111998
LI 1/1/1998 F1-01614 511 DRAINAGE 120 54 1/1/1998
LI 1/1/1998 F1-01621 517 SOIL PREP 120 54 1/1/1998
LI 1/l/l998 Fl-01623 517 DRAINAGE 120 54 1/1/1998
LI 1/1/1998 F1-01627 518 SOIL PREP 120 54 1/1/1998
LI 1/1/1998 F1-01632 519 SOIL PREP 120 54 1/1/1998
LI 1/1/1998 F1-01637 599 DRAINAGE 120 54 1/1/1998
LI 4/30/1998 F1-01543 OAKVILLE RESERVOIR 240 186 4/30/1998
LI TOTAL
ME 7/1/1994 F1-01043 OAKVILLE DECK/TRELIS 60 - 7/1/1994
ME 7/31/1998 F1-01541 AIR CONDITIONER 120 66 7/31/1998
ME 2/28/2002 F1-02155 Well Filter- Oakville 120 102 2/28/2002
ME 2/28/2002 F1-02183 Septic Tank 120 102 2/28/2002
ME TOTAL
T 3/1/1992 F1-00820 KUBOTA TRACTOR 120 - 3/1/1992
T 3/1/1997 F1-01432 FORD 4430 TRACTOR - 1 120 54 3/1/1997
T 5/31/1999 F1-01687 KUBOTA TRACTOR 120 78 5/31/1999
T TOTAL
V 1/1/1990 F1-00698 BLOCK 519 120 - 1/1/1990
V 1/1/1990 F1-00699 BLOCK 517 120 - 1/1/1990
V 1/1/1991 F1-00742 513A VINES 240 90 1/1/1991
V 1/1/1992 F1-00834 514 VINES 240 102 1/1/1992
V 1/1/1992 F1-00839 515C VINES 240 102 1/1/1992
V 1/1/1993 F1-00962 BLK 550 VINES 240 114 1/1/1993
V 1/1/1993 F1-00967 BLK 555 VINES 240 114 1/1/1993
V 1/1/1994 F1-01073 555 VINES 240 126 1/1/1994
V 1/1/1994 F1-01078 551 VINES 240 126 1/1/1994
V 1/1/1994 F1-01083 565 VINES 240 126 1/1/1994
V 1/1/1994 F1-01087 535 VINES 240 126 1/1/1994
V 1/1/1995 F1-01236 516 VINES 240 138 1/1/1995
V 1/1/1995 F1-01237 519 VINES 240 138 1/1/1995
V 1/1/1995 F1-01238 546 VINES 240 138 1/1/1995
V 1/1/1995 F1-01239 530 VINES 240 138 1/1/1995
V 1/1/1996 F1-01391 505 VINES 240 150 1/1/1996
V 1/1/1996 F1-01392 516 VINES 240 150 1/1/1996
V 1/1/1997 F1-01463 526 VINES 240 162 1/1/1997
V 1/1/1997 F1-01468 532 VINES 240 162 1/1/1997
V 1/1/1998 F1-01601 501 VINES 240 174 1/1/1998
V 1/1/1998 F1-01606 510 VINES 240 174 1/1/1998
V 1/1/1998 F1-01611 511 VINES 240 174 1/1/1998
V 1/1/1998 F1-01617 516 VINES 240 174 1/1/1998
V 1/1/1998 F1-01620 517 VINES 240 174 1/1/1998
V 1/1/1998 F1-01626 518 VINES 240 174 1/1/1998
V 1/1/1998 F1-01631 519 VINES 240 174 1/1/1998
V 1/1/l998 F1-01636 599 VINES 240 174 1/1/1998
V TOTAL
VE 4/1/1989 F1-00594 BLK 517N EXP TRELLIS 144 - 4/1/1989
VE 4/1/1989 F1-00595 BLK 511 EXP TRELLIS 144 - 4/1/1989
VE 5/1/1990 F1-00688 VALLEY TOWN DUSTER 120 - 5/1/1990
VE 1/1/1991 F1-00743 513A SPRINKLER 120 - 1/1/1991
VE 1/1/1991 F1-00744 513A TRELLIS 120 - l/1/1991
VE 7/1/1991 F1-00736 CANE CUTTERS 120 - 7/1/1991
VE 1/1/1992 F1-00830 514 TRELLIS 120 - 1/1/1992
VE 1/1/1992 F1-00831 514 SPRINKLER 120 - 1/1/1992
VE 1/1/1992 F1-00835 515C TRELLIS 120 - 1/1/1992
VE 1/1/1992 F1-00836 515C SPRINKLER 120 - 1/1/1992
VE 3/1/1992 F1-00819 DOMRIES WHEEL DISC 120 - 3/1/1992
VE 5/1/1992 F1-00821 300 GAL - SPRAYER 120 - 5/1/1992
VE 1/1/1993 F1-00958 BLK 550 SPRINKLER 120 - 1/1/1993
VE 1/1/1993 F1-00959 BLK 550 TRELLIS 120 - 1/1/1993
VE 1/1/1993 FI-00961 ELK 550 OTHER 120 - 1/1/1993
VE 1/1/1993 F1-00963 BLK 555 SPRINKLER 120 - 1/1/1993
VE 1/1/1993 F1-00964 BLK 555 TRELLIS 120 - 1/1/1993
VE 1/1/1993 Fl-00966 BLK 555 OTHER 120 - 1/1/1993
VE 1/1/1994 F1-01071 550 TRELLIS 120 6 1/1/1994
VE 1/1/1994 F1-01072 555 TRELLIS 120 6 1/1/1994
VE 1/1/1994 F1-01074 551 TRELLIS 120 6 1/1/1994
VE 1/1/1994 F1-01075 551 SPRINKLER 120 6 1/1/1994
VE 1/1/1994 F1-01077 551 OTHER DEVEL 120 6 1/1/1994
VE 1/1/1994 F1-01079 565 TRELLIS 120 6 1/1/1994
VE 1/1/1994 F1-01080 565 SPRINKLER 120 6 1/1/1994
VE 1/1/1994 F1-01082 565 OTHER DEVEL 120 6 1/1/1994
VE 1/1/1994 F1-01084 535 TRELLIS 120 6 1/1/1994
VE 1/1/1994 F1-01085 535 SPRINKLER 120 6 1/1/1994
VE 1/1/1994 F1-01086 535 OTHER DEVEL 120 6 1/1/1994
VE 1/1/1995 F1-01219 516 SPRINKLER 120 18 1/1/1995
VE 1/1/1995 F1-01220 516 TRELLIS 120 18 1/1/1995
VE 1/1/1995 F1-01221 516 OTHER 120 18 1/1/1995
VE 1/1/1995 F1-01223 519 OTHER 120 18 1/1/1995
VE 1/1/1995 F1-01227 530 OTHER 120 18 1/1/1995
VE 1/1/1995 F1-01228 531 OTHER 120 18 1/1/1995
VE 1/1/1995 F1-01230 531 SPRINKLER 120 18 1/1/1995
VE 1/1/1995 F1-01231 531 TRELLIS 120 18 1/1/1995
VE 1/1/1995 F1-01232 546 OTHER 120 18 1/1/1995
VE 1/1/1995 F1-01234 546 TRELLIS 120 18 1/1/1995
VE 1/1/1995 F1-01235 546 SPRINKLER 120 18 1/1/1995
VE 1/1/1996 F1-01386 505 OTHER 120 30 1/1/1996
VE 1/1/1996 F1-01388 505 SPRINKLER 120 30 1/1/1996
VE 1/1/1996 F1-01389 505 TRELLIS 120 30 1/1/1996
VE 1/1/1996 F1-01390 516 OTHER 120 30 1/1/1996
VE 1/1/1996 F1-01397 546 OTHER 120 30 1/1/1996
VE 1/1/1997 F1-01458 505 OTHER 120 42 1/1/1997
VE 1/1/1997 F1-01459 526 OTHER 120 42 1/1/1997
VE 1/1/1997 F1-01461 526 SPRINKLER 120 42 1/1/1997
VE 1/1/1997 F1-01462 526 TRELLIS 120 42 1/1/1997
VE 1/1/1997 F1-01464 532 OTHER 120 42 1/1/1997
VE 1/1/1997 F1-01466 532 SPRINKLER 120 42 1/1/1997
VE 1/1/1997 F1-01467 532 TRELLIS 120 42 1/1/1997
VE 6/1/1997 F1-01431 GEARMORE SPRAYER 120 54 6/1/1997
VE 1/1/1998 F1-01603 501 SPRINKLER 120 54 1/1/1998
VE 1/1/1998 F1-01604 501 TRELLIS 120 54 1/1/1998
VE 1/1/1998 F1-01605 501 OTHER 120 54 1/1/1998
VE 1/1/1998 F1-01608 510 SPRINKLER 120 54 1/1/1998
VE 1/1/1998 F1-01609 510 TRELLIS 120 54 1/1/1998
VE 1/1/1998 F1-01610 510 OTHER 120 54 1/1/1998
VE 1/1/1998 F1-01613 511 SPRINKLER 120 54 1/1/1998
VE 1/1/1998 F1-01615 511 TRELLIS 120 54 1/1/1998
VE 1/1/1998 F1-01616 511 OTHER 120 54 1/1/1998
VE 1/1/1998 F1-01618 516 TRELLIS 120 54 1/1/1998
VE 1/1/1998 F1-01619 516 OTHER 120 54 1/1/1998
VE 1/1/1998 F1-01622 517 SPRINKLER 120 54 1/1/1998
VE 1/1/1998 F1-01624 517 TRELLIS 120 54 1/1/1998
VE 1/1/1998 F1-01625 517 OTHER 120 54 1/1/1998
VE 1/1/1998 F1-01628 518 SPRINKLER 120 54 1/1/1998
VE 1/1/1998 F1-01629 518 TRELLIS 120 54 1/1/1998
VE 1/1/1998 F1-01630 518 OTHER 120 54 1/1/1998
VE 1/1/1998 F1-01633 519 SPRINKLER 120 54 1/1/1998
VE 1/1/1998 F1-01634 519 TRELLIS 120 54 1/1/1998
VE 1/1/1998 F1-01635 519 OTHER 120 54 1/1/1998
VE 1/1/1998 F1-01638 599 SPRINKLER 120 54 1/1/1998
VE 1/1/1998 F1-01639 599 TRELLIS 120 54 1/1/1998
VE 1/1/1998 F1-01640 599 OTHER 120 54 1/1/1998
VE 4/30/1999 F1-01686 AIR CONDITIONER 60 18 4/30/1999
VE 5/31/1999 F1-01689 WEATHER STATION 84 42 5/31/1999
VE 6/7/2001 F1-02034 2001 Honda ATV TRX5OO 60 42 6/7/2001
VE 6/7/2001 F1-02035 2001 Honda ATV TRX5OO 60 42 6/7/2001
VE 6/22/2001 F1-02023 Gearmore S420 Sulfer Duster 120 102 6/22/2001
VE TOTAL
L 6/4/1999 E-00004 Oakville land - 6/4/1999
L TOTAL
RAND TOTAL
SCHEDULE H
(TO CONTRIBUTION TERM SHEET)
CONTRIBUTED ASSETS OF H
See the following as attached:
1. Site Map
2. List of Retained Parcels
3. Equipment List
4. Schedule of Additional Contributed Assets and Retained Assets
1
Quintessa Parcel Map
[Graphic of Map]
After Lot Before Lot
Line Adj. Line Adj.
000-000-000 46.27 46.27
000-000-000 7.36 7.36
000-000-000 45.8 45.8
----------------------------------
99.43 99.43
----------------------------------
000-000-000 6.42 6.42
000-000-000 7.28 7.28
000-000-000 7.45 7.46
000-000-000 52.1 52.1
----------------------------------
73.26 73.26
----------------------------------
000-000-000 12 12
000-000-000 55.39 55.39
000-000-000 7.97 21
----------------------------------
75.35 88.39
----------------------------------
----------------------------------
000-000-000 18.13 5.1
----------------------------------
TOTAL QUINTESSA ACRES 266.18 266.18
==================================
HUNEEUS VINTNERS LAND CONTRIBUTION
Parcel # Total Acreage Plantable Acreage
1 030-060-053 7.28 5.175
2 030-060-052 7.36 0 Retained
3 030-060-051 6.42 0 Retained
4 030-060-050 12 0 Retained
5 030-060-054 55.39 46.815
6 030-060-049 46.27 34.427
7 030-060-059 52.1 28.77
8 030-060-055 45.8 34.61
9 030-060-056(060) 8 5.76
00 000-000-000 7.46 1.433 Retained
00 000-000-000(061) 18.1 8.191
Total 266.18 165.181
Total (Less Retained) 232.94 163.748
Rights to build residences on contributed parcels are not being contributed
5/4/2004 HUNEEUS VINTNERS LLC
SPECIAL REPORT
Tax Tax Tax Tax
SYS No Classification Description In Ser Date Acq Value Curr Acc Dep Current NBV
------ -------------- ----------- ----------- --------- ------------ -----------
66 Barrels 100 Demptos Barrels 10/1/2002 60,000.00 52,222.23 7,777.77
67 Barrels 100 Saury Barrel 10/1/2002 59,100.00 51,438.89 7,661.11
68 Barrels 103 Seguin Xxxxxx Barrels 10/1/2002 65,718.00 57,198.94 8,519.06
69 Barrels 97 Artisan Barrels 10/1/2002 56,822.00 49,456.06 7,365.94
71 Barrels 60 Nadalie Barrels 10/1/2002 38,450.00 33,465.83 4,984.17
72 Barrels 100 Xxxxxxx Xxxxxxx 10/1/2002 64,007.00 55,709.81 8,297.19
70 Barrels 140 Raddoux Barrels 10/1/2002 97,659.66 84,999.94 12,659.72
197 Barrels 329 Barrels 7/31/2003 223,257.23 161,241.34 62,015.89
198 Barrels 10 Xxxxxxxx Xxxxxx Barrels 8/22/2003 7,292.25 5,266.63 2,025.62
224 Barrels 80 Nadalie Barrels 8/31/2003 54,902.02 39,651.46 15,250.56
225 Barrels 10 Tarasund Barrels 8/31/2003 7,863.57 5,679.25 2,184.32
201 Barrels 100 Tonnellerie Xxxxxxx barrels 9/30/2003 71,706.96 51,788.36 19,918.60
202 Barrels 100 Tonnellerie Demptos barrels 9/30/2003 68,737.50 49,643.75 19,093.75
203 Barrels 40 Tonnellerie Randoux barrels 9/30/2003 31,577.46 22,805.94 8,771.52
204 Barrels 4 Tonnellerie Xxxxxx barrels 9/30/2003 2,881.48 2,081.07 800.41
205 Barrels 10 Xxxxxxx barrels 9/30/2003 7,673.08 5,541.67 2,131.41
41 Building - Admin Entrance sign 8/1/2002 18,301.00 7,622.09 10,678.91
226 Building - Admin Interior Design 3/1/2003 78,008.06 1,500.15 76,507.91
216 Building - Admin Winery Building - Admin Office 3/1/2003 2,905,899.40 77,614.84 2,828,284.56
1 Building - Cellar Winery Building 9/1/2002 14,098,360.00 557,306.51 13,541,053.49
2 Building - Cellar Pump House 9/1/2002 13,009.00 513.96 12,495.04
3 Building - Cellar Caves 9/1/2002 2,116,386.00 1,183,352.36 933,033.64
215 Building - Cellar Caves 7/31/2003 24,128.90 13,934.13 10,194.77
218 Building - Cellar Winery Building 7/31/2003 362,631.24 6,418.01 356,213.23
12 Buildings Xxxxxxx'X House 5/15/1990 30,175.00 16,596.75 13,578.25
13 Buildings Barn 5/15/1990 124,702.00 68,586.10 56,115.90
14 Buildings Machine Storage Shed 5/15/1990 28,932.00 15,911.60 13,020.40
15 Buildings Open Shed 5/15/1990 21,688.00 11,928.40 9,759.60
24 Buildings Fence - Entrance 5/15/1990 1,509.00 1,037.31 471.69
23 Buildings Septic System 9/15/1990 1,373.00 944.81 428.19
26 Buildings Domestic Waterline 1/1/1991 430.00 273.87 156.13
25 Buildings Telephone Lines 8/1/1991 564.00 358.25 205.75
16 Buildings Xxxxxxx House - Ins 11/1/l991 853.00 434.65 418.35
17 Buildings Barn Slab 9/1/1992 6,568.00 3,858.50 2,709.50
18 Buildings Xxxxxxx'X House Repairs 9/1/1993 22,183.00 10,002.15 12,180.85
19 Buildings Barn - Repairs 9/1/1993 17,753.00 7,706.65 10,046.35
120 Buildings Garage And Tractor Shed 4/12/1995 2,454.00 563.65 1,890.35
131 Buildings Deck 8/31/1996 6,076.00 1,188.75 4,887.25
8 5/4/2004
136 Buildings Entrance Gate 2/14/1997 6,692.00 6,529.33 162.67
135 Buildings Platform 6/30/1997 9,668.00 1,683.87 7,984.13
147 Buildings Pump Station Roof 11/8/1999 24,821.00 9,736.77 15,084.23
143 Buildings Building 11/30/1999 83,271.00 25,694.73 57,576.27
30 Drainage Irrigation/Drainage - Blk 1-5 7/15/1990 50,667.00 50,667.00 0.00
48 Drainage Irrigation/Drainage - Blk 1-5 7/15/1990 61,086.00 61,086.00 0.00
97 Drainage Drainage - Blk 1&5 1/1/1991 681.00 681.00 0.00
33 Drainage Drainage - Blk 1&5 1/1/1991 34.00 34.00 0.00
51 Drainage Drainage - Blk 1&5 1/1/1991 67.00 67.00 0.00
31 Drainage Irrigation/Drainage 6/15/1991 25,431.00 25,431.00 0.00
49 Drainage Irrigation/Drainage 6/15/1991 48,767.00 48,767.00 0.00
37 Equipment Gas Tank 7/15/1990 1,437.00 1,437.00 0.00
46 Equipment Kubota Tractor 7/15/1990 29,219.00 29,219.00 0.00
38 Equipment Diesel Tank 8/15/1990 2,395.00 2,395.00 0.00
41 Equipment Air Compressor 8/15/1990 483.00 483.00 0.00
42 Equipment Bench Grinder 8/15/1990 208.00 208.00 0.00
43 Equipment Tool Box 8/15/1990 418.00 418.00 0.00
44 Equipment Torch & Misc Tools 8/15/1990 518.00 518.00 0.00
40 Equipment Water Tank 9/15/1990 8,107.00 8,107.00 0.00
39 Equipment Fuel Tank Pad 11/15/1990 1,293.00 1,293.00 0.00
45 Equipment Ford 1920 Tractor 11/15/1990 12,763.00 12,763.00 0.00
47 Equipment Water Truck - 1974 Chevy 4/1/1991 10,108.00 10,l08.00 0.00
48 Equipment Rock Trailer 6/1/1991 3,511.00 3,511.00 0.00
20 Equipment Fuel Pump & Tank 9/1/1993 4,950.00 2,660.37 2,289.63
138 Equipment Cultivator 4/15/1998 10,484.00 8,878.50 1,605.50
139 Equipment Mower 4/27/1998 3,771.00 3,193.50 577.50
141 Equipment Fertilizer Sitrrer 4/15/1999 7,014.00 5,080.92 1,933.08
142 Equipment Weather Station 4/15/1999 12,651.00 9,164.78 3,486.22
148 Equipment Chemical Container 6/11/1999 1,814.00 1,313.86 500.14
149 Equipment Sprayer 6/25/1999 6,961.00 5,042.71 1,918.29
150 Equipment Domries Disc 6/30/1999 5,991.00 4,340.14 1,650.86
151 Equipment Domries Roller 6/30/1999 1,809.00 1,310.78 498.22
152 Equipment Mower 7/7/1999 6,971.00 5,050.14 1,920.86
153 Equipment Harvest Bins & Trailer 8/26/1999 5,711.00 4,137.28 1,573.72
34 Equipment - Cellar Well 7/1/2002 28,005.00 11,662.88 16,342.12
4 Equipment - Cellar Density Meter 9/1/2002 2,007.00 1,208.50 798.50
5 Equipment - Cellar TOAD Fluid Distribution 9/1/2002 1,634.00 983.47 650.53
8 Equipment - Cellar Winery Software 9/1/2002 10,560.00 5,221.00 5,339.00
9 Equipment - Cellar 6 Jabsco Impeller pumps 9/1/2002 47,518.00 28,607.91 18,910.09
15 Equipment - Cellar Waukesha Pumps 9/1/2002 47,410.00 28,542.76 18,867.24
16 Equipment - Cellar Winery Equipment 9/1/2002 7,804.00 4,698.06 3,105.94
18 Equipment - Cellar Refrigeration 9/1/2002 345,310.00 207,890.72 137,419.28
21 Equipment - Cellar Tank Vents 9/1/2002 4,338.00 2,611.79 1,726.21
23 Equipment - Cellar Hoses 9/1/2002 12,055.00 7,257.28 4,797.72
8 5/4/2004
28 Equipment - Cellar Pumps 9/1/2002 45,106.00 27,155.92 17,950.08
31 Equipment - Cellar Destemmer Crusher 9/1/2002 17,655.00 10,628.71 7,026.29
35 Equipment - Cellar Barrel Washer 9/1/2002 11,096.00 6,680.51 4,415.49
38 Equipment - Cellar 1/2 ton harvest bins 9/1/2002 12,737.00 7,668.39 5,068.61
39 Equipment - Cellar Stainless Steel tanks 9/1/2002 489,549.00 294,728.55 194,820.45
40 Equipment - Cellar Water Filtration System 9/1/2002 18,420.00 11,089.60 7,330.40
42 Equipment - Cellar Sorting Table 9/1/2002 43,046.00 25,915.72 17,130.28
43 Equipment - Cellar Winery Equipment 9/1/2002 62,938.00 37,891.38 25,046.62
45 Equipment - Cellar Oak Tank Storage 9/1/2002 225.00 135.13 89.87
46 Equipment - Cellar Scale 9/1/2002 2,716.00 1,635.41 1,080.59
49 Equipment - Cellar Set Stainless Tanks 9/1/2002 16,017.00 9,643.09 6,373.91
50 Equipment - Cellar Fittings 9/1/2002 3,170.00 1,908.47 1,261.53
51 Equipment - Cellar Tank elbows 9/1/2002 400.00 240.82 159.18
53 Equipment - Cellar Oak Tanks 9/1/2002 236,812.00 142,570.36 94,241.64
55 Equipment - Cellar Tables 9/1/2002 964.00 580.10 383.90
56 Equipment - Cellar Catwalk 9/1/2002 315,475.00 189,928.50 125,546.50
57 Equipment - Cellar Stainless Steel wine Lines 9/1/2002 24,495.00 14,746.66 9,748.34
58 Equipment - Cellar Aluminum Pedistals 9/1/2002 3,434.00 2,067.14 1,366.86
63 Equipment - Cellar Grape Transfer Chutes 9/1/2002 43,100.00 25,947.96 17,152.04
64 Equipment - Cellar Misc Fittings 9/1/2002 6,284.00 3,782.96 2,501.04
10 Equipment - Cellar Pumpover Sprinkler 9/15/2002 2,909.00 1,751.41 1,157.59
11 Equipment - Cellar Sparge Device & Fittings 9/15/2002 2,617.00 1,575.74 1,041.26
12 Equipment - Cellar 20 kegs 9/15/2002 2,815.00 1,694.42 1,120.58
20 Equipment - Cellar Solution Dispensing System 9/15/2002 3,763.00 2,265.28 1,497.72
26 Equipment - Cellar Radios 9/15/2002 4,284.00 2,988.65 1,295.35
30 Equipment - Cellar Lab Equipment 9/15/2002 10,127.00 6,097.07 4,029.93
33 Equipment - Cellar Forklift 9/17/2002 33,272.00 20,030.97 13,241.03
6 Equipment - Cellar Silicon Bungs 10/1/2002 5,334.00 4,642.67 691.33
7 Equipment - Cellar Chemstat Analyzer 10/1/2002 7,512.00 4,522.40 2,989.60
13 Equipment - Cellar SS Tank Conversion 10/1/2002 1,486.88 895.37 591.51
14 Equipment - Cellar Cellar Fittings 10/1/2002 4,264.00 2,566.84 1,697.16
19 Equipment - Cellar Barrel Racks 10/1/2002 8,612.00 5,184.64 3,427.36
22 Equipment - Cellar Sump Carts 10/1/2002 14,180.00 8,536.94 5,643.06
24 Equipment - Cellar Fittings 10/1/2002 12,787.00 7,698.50 5,088.50
27 Equipment - Cellar CO2 Instruments 10/1/2002 1,452.00 874.03 577.97
29 Equipment - Cellar Tank signs 10/1/2002 1,626.00 979.19 646.81
37 Equipment - Cellar Basket Press 10/1/2002 52,154.00 31,398.57 20,755.43
44 Equipment - Cellar Set Basket press 10/1/2002 870.00 523.77 346.23
47 Equipment - Cellar CO2 Monitors 10/1/2002 3,211.00 1,933.09 1,277.91
52 Equipment - Cellar Computer 10/1/2002 4,115.00 2,870.57 1,244.43
54 Equipment - Cellar Fittings 10/1/2002 23,080.00 13,895.10 9,184.90
59 Equipment - Cellar Tank Top Grates 10/1/2002 6,465.00 3,891.87 2,573.13
65 Equipment - Cellar Racking elbows 10/1/2002 1,603.00 964.88 638.12
17 Equipment - Cellar Computer 10/9/2002 1,354.00 944.79 409.21
8 5/4/2004
48 Equipment - Cellar Tank Thermometer 10/15/2002 964.00 580.10 383.90
60 Equipment - Cellar Aluminum Hose Racks 11/1/2002 6,993.00 4,209.88 2,783.12
61 Equipment - Cellar Bucket Trees 11/1/2002 1,293.00 778.24 514.76
62 Equipment - Cellar Fitting Boards 11/1/2002 2,983.00 1,795.69 1,187.31
36 Equipment - Cellar Floor cleaner 12/1/2002 1,185.00 713.09 471.91
219 Equipment - Cellar Pumpover Lines 3/31/2003 10,675.00 4,727.50 5,947.50
183 Equipment - Cellar Sump Cart 3/31/2003 2,009.54 889.94 1,119.60
184 Equipment - Cellar Xxxxx Labs Mixer Stand 3/31/2003 1,441.70 638.47 803.23
185 Equipment - Cellar Pipe Mixer 3/31/2003 4,223.80 1,870.54 2,353.26
186 Equipment - Cellar Wire Security Cage 5/22/2003 4,968.00 2,990.94 1,977.06
187 Equipment - Cellar Bottling Line Filter 5/30/2003 11,390.27 6,857.41 4,532.86
188 Equipment - Cellar Scale 6/24/2003 1,295.00 779.64 515.36
189 Equipment - Cellar Ozone Machine 8/18/2003 11,313.75 6,811.35 4,502.40
190 Equipment - Cellar Scale Printer 8/18/2003 479.19 306.69 172.50
191 Equipment - Cellar Grape Press 8/22/2003 61,142.74 36,810.43 24,332.31
192 Equipment - Cellar Dump Trailer 9/9/2003 3,600.00 2,167.35 1,432.65
193 Equipment - Cellar Stainless Steel Tank 9/22/2003 16,809.00 10,119.70 6,689.30
194 Equipment - Cellar Bin Dumper 9/24/2003 27,739.50 16,700.31 11,039.19
206 Equipment - Cellar Recirculating Chiller 9/30/2003 3,158.79 1,901.73 1,257.06
195 Equipment - Cellar Tank Piping and controls 10/16/2003 6,451.00 3,883.77 2,567.23
196 Equipment - Cellar Lab Tables 12/31/2003 2,400.00 1,444.90 955.10
94 Equipment - Office Office Furniture 9/30/1999 55,366.00 43,475.71 11,890.29
95 Equipment - Office Vineyard Photos 9/30/1999 8,582.00 6,738.92 1,843.08
96 Equipment - Office Office Furniture 8/1/2000 3,022.00 2,145.82 876.18
97 Equipment - Office Dell Laptop Computer 9/1/2000 4,510.00 3,860.50 649.50
101 Equipment - Office Office furniture 1/1/2001 5,715.00 3,394.24 2,320.76
98 Equipment - Office AutoCad SureTrak Software 1/4/2001 1,290.00 1,290.00 0.00
99 Equipment - Office Designjet 500 Printer 1/4/2001 3,511.00 2,601.10 909.90
100 Equipment - Office Sony Camcorder 1/4/2001 1,637.00 1,212.56 424.44
102 Equipment - Office Computer Equipment 1/25/2002 4,495.23 3,135.69 1,359.54
103 Equipment - Office Dell Computer 5/30/2002 1,581.78 1,103.21 478.57
104 Equipment - Office Dell Computer 8/23/2002 2,065.00 1,440.49 624.51
106 Equipment - Office Dell Computer 9/15/2002 1,163.72 811.86 351.86
105 Equipment - Office Small Business Server 10/2/2002 1,461.38 1,019.68 441.70
107 Equipment - Office Cisco Router 10/15/2002 1,335.67 931.77 403.90
108 Equipment - Office Computer Equipment 10/25/2002 2,000.37 1,395.43 604.94
207 Equipment - Office Furniture from Chile 1/6/2003 11,972.72 5,302.21 6,670.51
208 Equipment - Office Furniture from Chile 1/6/2003 13,960.00 6,182.29 7,777.71
209 Equipment - Office Office Files & Chairs 1/6/2003 19,718.85 8,732.64 10,986.21
182 Equipment - Office 4 Tasting Room Tables 2/4/2003 4,308.35 1,907.99 2,400.36
168 Equipment - Office Espresso Machine 3/10/2003 3,026.10 1,500.94 1,525.16
169 Equipment - Office Retail Sales System 3/13/2003 6,266.40 3,108.14 3,158.26
170 Equipment - Office Dell Computer 3/24/2003 3,092.05 1,533.67 1,558.38
210 Equipment - Office Office Shades 3/27/2003 10,900.00 4,827.14 6,072.86
8 5/4/2004
171 Equipment - Office Server 3/27/2003 617.69 306.38 311.31
211 Equipment - Office Winery Sculpture 3/31/2003 19,841.25 8,786.85 11,054.40
212 Equipment - Office Retail Room Artwork 3/31/2003 30,000.00 13,285.72 16,714.28
172 Equipment - Office Nextel Cellular phones 3/31/2003 993.99 493.02 500.97
213 Equipment - Office Light for Retail Room 3/31/2003 279.36 123.72 155.64
173 Equipment - Office Retail Register Equipment 4/1/2003 6,958.16 3,451.25 3,506.91
214 Equipment - Office Carpet Retail room 4/22/2003 1,800.00 797.14 1,002.86
174 Equipment - Office Rug - Tasting Room 7/29/2003 4,710.00 3,014.40 1,695.60
180 Equipment - Office Timekeeping Software Web based 7/31/2003 2,520.00 1,575.00 945.00
222 Equipment - Office Furniture & Antiques - Retail
room 7/31/2003 84,844.17 51,079.66 33,764.51
223 Equipment - Office Chairs 7/31/2003 1,664.19 1,001.92 662.27
175 Equipment - Office Office Mini Blinds 8/18/2003 4,250.00 2,558.67 1,691.33
176 Equipment - Office BBQ 8/31/2003 1,494.48 956.47 538.01
177 Equipment - Office VH Computer 8/31/2003 3,880.05 2,483.23 1,396.82
221 Equipment - Office Metal Planters 9/15/2003 5,100.00 3,070.41 2,029.59
178 Equipment - Office G/L Software Upgrade 11/30/2003 6,301.45 3,938.41 2,363.04
179 Equipment - Office Upgrade Winery Software 12/31/2003 2,909.25 1,818.29 1,090.96
232 Equipment - Office AH Laptop Computer 1/30/2004 1,960.44 1,029.23 931.21
29 Land Total Land 5/15/1990 7,448,887.00 0.00 7,448,887.00
54 Land Land - Lot Line Split 5/30/2001 364,637.00 0.00 364,637.00
30 Land Land Not Contributed 33.24
Acre @ $27,984per -930,188.16 -930,188.16
22 Land Improvements Rock Wall 8/15/1990 10,690.00 7,212.12 3,477.88
99 Land Improvements Land - Terracing And Grading 12/31/1990 137,571.00 0.00 137,571.00
35 Land Improvements Land - Terracing And Grading 12/31/1990 31,069.00 0.00 31,069.00
53 Land Improvements Land - Terracing And Grading 12/31/1990 55,160.00 0.00 55,160.00
21 Land Improvements Land Additions 1/1/1991 52,402.00 0.00 52,402.00
98 Land Improvements Land Reservoir/Spillway 1/1/1991 53,257.00 0.00 53,257.00
34 Land Improvements Land Reservoir/Spillway 1/1/1991 23,860.00 0.00 23,860.00
52 Land Improvements Land Reservoir/Spillway 1/1/1991 42,363.00 0.00 42,363.00
27 Land Improvements Roads 1/1/1992 36,026.00 21,164.62 14,861.38
1 Land Improvements Roads 1/1/1992 8,385.00 4,925.06 3,459.94
19 Land Improvements Roads 1/1/1992 13,815.00 8,117.43 5,697.57
28 Land Improvements Roads 7/1/1993 1,475.00 793.18 681.82
2 Land Improvements Roads 7/1/1993 343.00 183.43 159.57
20 Land Improvements Roads 7/1/1993 566.00 303.37 262.63
110 Land Improvements Landscaping - Clarevale 7/31/1994 17,354.00 8,403.62 8,950.38
126 Land Improvements Entrance 8/31/1996 20,537.00 11,744.88 8,792.12
129 Land Improvements Landscaping 8/31/1996 63,563.00 36,350.76 27,212.24
130 Land Improvements Landscaping 8/31/1996 82,747.00 47,323.50 35,423.50
127 Land Improvements Entrance 12/21/1996 2,835.00 1,621.26 1,213.74
137 Land Improvements Roads 3/25/1997 6,608.00 3,389.63 3,218.37
140 Land Improvements Lot Line Engineering Costs 12/31/1998 22,705.00 0.00 22,705.00
154 Land Improvements Rock Wall 6/30/1999 9,662.00 3,790.64 5,871.36
73 Land Improvements Landscape 9/1/2002 883,795.00 117,839.58 765,955.42
8 5/4/2004
181 Land Improvements Landscaping 3/31/2003 158,521.15 53,936.83 104,584.32
220 Land Improvements Gate Work 5/13/2003 11,690.00 6,276.07 5,413.93
70 Trellis/Irrigation Trellis - Blk 1-5 7/15/1990 87,709.00 87,709.00 0.00
94 Trellis/Irrigation Irrigation/Drainage - Blk 1-5 7/15/1990 111,779.00 111,779.00 0.00
6 Trellis/Irrigation Trellis - Blk 1-5 7/15/1990 27,393.00 27,393.00 0.00
24 Trellis/Irrigation Trellis - Blk 1-5 7/15/1990 32,623.00 32,623.00 0.00
96 Trellis/Irrigation Irrigation 6/11/1991 79,938.00 79,938.00 0.00
32 Trellis/Irrigation Irrigation 6/1/1991 13,033.00 13,033.00 0.00
50 Trellis/Irrigation Irrigation 6/1/1991 38,179.00 38,179.00 0.00
71 Trellis/Irrigation Trellis - 6/15/1991 10,620.00 10,620.00 0.00
95 Trellis/Irrigation Irrigation/Drainage 6/15/1991 123,697.00 123,697.00 0.00
7 Trellis/Irrigation Trellis - 6/15/1991 1,232.00 1,232.00 0.00
25 Trellis/Irrigation Trellis - 6/15/1991 4,403.00 4,403.00 0.00
72 Trellis/Irrigation Trellis - 7/1/1991 88,714.00 88,714.00 0.00
8 Trellis/Irrigation Trellis - 7/1/1991 26,702.00 26,702.00 0.00
26 Trellis/Irrigation Trellis - 7/1/1991 66,879.00 66,879.00 0.00
73 Trellis/Irrigation Trellis/Irrigation 12/1/1992 54,704.00 54,704.00 0.00
9 Trellis/Irrigation Trellis/Irrigation 12/1/1992 11,889.00 11,889.00 0.00
27 Trellis/Irrigation Trellis/Irrigation 12/l/1992 26,132.00 26,132.00 0.00
74 Trellis/Irrigation Trellis/Irrigation 12/1/1993 34,385.00 34,385.00 0.00
10 Trellis/Irrigation Trellis/Irrigation 12/1/1993 5,911.00 5,910.55 0.45
28 Trellis/Irrigation Trellis/Irrigation 12/1/1993 13,443.00 13,443.00 0.00
111 Trellis/Irrigation Irrigation Pipe & Sprinklers 3/22/1994 3,224.00 3,176.00 48.00
109 Trellis/Irrigation Trellis - Hillside 8/11/1994 1,521.00 1,475.12 45.88
112 Trellis/Irrigation Trellis - Hillside 8/11/1994 1,601.00 1,552.12 48.88
113 Trellis/Irrigation Trellis - Hillside/Angaston 8/11/1994 1,681.00 1,629.12 51.88
114 Trellis/Irrigation Trellis - Hillside/Clarevale 8/11/1994 1,574.00 1,525.75 48.25
121 Trellis/Irrigation Trellis Wiring 5/31/1995 20,201.00 17,675.12 2,525.88
36 Vehicle 1984 F150 Ford Truck 6/15/1990 2,000.00 2,000.00 0.00
9 Vehicle 1991 Nissan Truck 5/1/1991 15,223.00 15,223.00 0.00
35 Vineyard Vineyard Phase I 1/1/1992 233,319.00 136,555.43 96,763.57
75 Vineyard Vineyard Phase Ii 1/1/1993 859,556.00 859,555.80 0.20
131 Vineyard Equipment Bege Scraper 6/4/1999 2,107.00 1,497.57 609.43
132 Vineyard Equipment Ford tractor 4430 6/4/1999 21,819.00 15,504.86 6,314.14
133 Vineyard Equipment Tandem Disc 6/4/1999 2,069.00 1,470.50 598.50
74 Vineyard Equipment Flowry pump & gear 1/1/2000 10,586.00 6,371.11 4,214.89
76 Vineyard Equipment Kubota Tractor 8/1/2000 30,165.00 18,156.61 12,008.39
77 Vineyard Equipment Digital Crane 8/1/2000 3,675.00 2,211.77 1,463.23
75 Vineyard Equipment Bio-dynamic Stirring Machine 10/1/2000 16,282.00 9,800.06 6,481.94
78 Vineyard Equipment 72" Loader 11/1/2000 5,075.00 3,054.95 2,020.05
81 Vineyard Equipment Toro Spreader 5/25/2001 7,192.00 3,448.28 3,743.72
82 Vineyard Equipment French Plow 6/19/2001 3,634.00 1,741.74 1,892.26
142 Vineyard Equipment Domeries Disc 1/1/2002 3,518.00 1,182.28 2,335.72
144 Vineyard Equipment Disc 1/1/2002 5,550.00 1,865.35 3,684.65
8 5/4/2004
145 Vineyard Equipment Fuel Tank 1/1/2002 1,393.00 467.93 925.07
146 Vineyard Equipment Harvest Trailer 1/1/2002 1,654.00 555.67 1,098.33
147 Vineyard Equipment Harvest Trailer 1/1/2002 1,654.00 555.67 1,098.33
152 Vineyard Equipment Honda Trailer Tank 1/1/2002 7,180.00 2,412.64 4,767.36
153 Vineyard Equipment Dump Trailer 1/1/2002 3,030.00 1,018.50 2,011.50
154 Vineyard Equipment Lime Spreader 1/1/2002 12,930.00 4,344.88 8,585.12
83 Vineyard Equipment Model 1700 Toro Xxxxxx 3/13/2002 7,192.00 3,849.12 3,342.88
84 Vineyard Equipment 3 Weedeaters 4/4/2002 1,389.81 743.70 646.11
85 Vineyard Equipment 2 Trimmers 4/11/2002 927.00 496.52 430.48
86 Vineyard Equipment Bin Trailer 6/1/2002 1,968.53 1,053.90 914.63
87 Vineyard Equipment Domries Disc, Ring Roller 6/27/2002 9,442.73 5,053.94 4,388.79
88 Vineyard Equipment Lawn Tractor 8/31/2002 2,833.10 1,516.02 1,317.08
89 Vineyard Equipment 4 Valley bin Trailers 8/31/2002 6,856.85 3,669.84 3,187.01
163 Vineyard Equipment New Holland Tractor 3/27/2003 38,017.50 15,529.47 22,488.03
159 Vineyard Equipment Weed Eaters 3/31/2003 926.54 378.47 548.07
160 Vineyard Equipment Compost Tea Xxxxxx 3/31/2003 4,392.45 1,794.24 2,598.21
161 Vineyard Equipment Pressure Chamber Inst. 4/16/2003 2,675.00 1,092.70 1,582.30
158 Vineyard Equipment Barn Electrical 7/29/2003 15,670.00 9,049.23 6,620.77
164 Vineyard Equipment 2004 Honda ATV 9/30/2003 5,336.15 3,081.57 2,254.58
234 Vineyard Equipment New Holland Tractor 3/18/2004 23,529.75 11,890.93 11,638.82
5 Vineyards Vineyard Phase I 1/1/1992 133,073.00 78,182.06 54,890.94
23 Vineyards Vineyard Phase I 1/1/1992 134,087.00 78,775.43 55,311.57
11 Vineyards Vineyard Phase Ii 1/1/1993 162,165.00 115,542.31 46,622.69
29 Vineyards Vineyard Phase Ii 1/1/1993 410,387.00 410,387.00 0.00
91 Vyd Devel - CIP Quintessa Vyd under Development 12/31/2000 501,694.77 0.00 501,694.77
167 Vyd Devel - CIP 2003 Vineyards Under Development 7/31/2003 120,543.20 0.00 120,543.20
229 Vyd Devel - CIP Vyd Development 12/31/2003 10,282.06 0.00 10,282.06
230 Vyd Devel - CIP Vineyard Development - Cap. Int 12/31/2003 31,389.30 0.00 31,389.30
78 Xxxxx & Pumps Ejector 100 Ppd 5/15/1990 212.00 212.00 0.00
81 Xxxxx & Pumps Vac Regulator C12 5/15/1990 736.00 736.00 0.00
14 Xxxxx & Pumps Ejector 100 Ppd 5/15/1990 50.00 50.00 0.00
17 Xxxxx & Pumps Vac Regulator C12 5/15/1990 171.00 171.00 0.00
32 Xxxxx & Pumps Ejector 100 Ppd 5/15/1990 82.00 82.00 0.00
35 Xxxxx & Pumps Vac Regulator C12 5/15/1990 282.00 282.00 0.00
79 Xxxxx & Pumps Iron Well 6/15/1990 6,800.00 4,676.00 2,124.00
80 Xxxxx & Pumps River Well 6/15/1990 5,394.00 3,709.12 1,684.88
15 Xxxxx & Pumps Iron Well 6/15/1990 1,582.00 1,087.87 494.13
16 Xxxxx & Pumps River Well 6/15/1990 1,256.00 864.50 391.50
33 Xxxxx & Pumps Iron Well 6/15/1990 2,608.00 1,792.00 816.00
34 Xxxxx & Pumps River Well 6/15/1990 2,069.00 1,422.31 646.69
76 Xxxxx & Pumps Cornell Pump 7/15/1990 1,200.00 1,200.00 0.00
77 Xxxxx & Pumps Corner Well 7/15/1990 2,685.00 1,845.81 839.19
12 Xxxxx & Pumps Cornell Pump 7/15/1990 280.00 280.00 0.00
13 Xxxxx & Pumps Corner Well 7/15/1990 625.00 625.00 0.00
8 5/4/2004
30 Xxxxx & Pumps Cornell Pump 7/15/1990 461.00 461.00 0.00
31 Xxxxx & Pumps Corner Well 7/15/1990 1,030.00 708.37 321.63
83 Xxxxx & Pumps Booster Pump 8/15/1990 1,170.00 1,170.00 0.00
85 Xxxxx & Pumps Pump At Lake 8/15/1990 1,363.00 1,363.00 0.00
19 Xxxxx & Pumps Booster Pump 8/15/1990 272.00 272.00 0.00
21 Xxxxx & Pumps Pump At Lake 8/15/1990 317.00 317.00 0.00
37 Xxxxx & Pumps Booster Pump 8/15/1990 448.00 448.00 0.00
39 Xxxxx & Pumps Pump At Lake 8/15/1990 523.00 523.00 0.00
82 Xxxxx & Pumps Domestic Well 9/15/1990 2,489.00 1,710.56 778.44
84 Xxxxx & Pumps Sump Pump 9/15/1990 3,970.00 3,970.00 0.00
18 Xxxxx & Pumps Domestic Well 9/15/1990 579.00 398.18 180.82
20 Xxxxx & Pumps Sump Pump 9/15/1990 924.00 924.00 0.00
36 Xxxxx & Pumps Domestic Well 9/15/1990 954.00 657.62 296.38
38 Xxxxx & Pumps Sump Pump 9/15/1990 1,523.00 1,523.00 0.00
86 Xxxxx & Pumps Pump Station 12/15/1990 43,600.00 43,600.00 0.00
22 Xxxxx & Pumps Pump Station 12/15/1990 10,148.00 10,148.00 0.00
40 Xxxxx & Pumps Pump Station 12/15/1990 16,720.00 16,720.00 0.00
88 Xxxxx & Pumps Domestic Well 2/1/1991 1,112.00 709.50 402.50
24 Xxxxx & Pumps Domestic Well 2/1/1991 259.00 165.18 93.82
42 Xxxxx & Pumps Domestic Well 2/1/1991 427.00 270.68 156.32
89 Xxxxx & Pumps Sump Pump - Blks 5/1/1991 4,190.00 4,190.00 0.00
25 Xxxxx & Pumps Sump Pump - Blks 6/1/1991 975.00 975.00 0.00
43 Xxxxx & Pumps Sump Pump - Blks 6/1/1991 1,607.00 1,607.00 0.00
87 Xxxxx & Pumps Pump Station 7/1/1991 65,792.00 65,792.00 0.00
23 Xxxxx & Pumps Pump Station 7/1/1991 15,314.00 15,314.00 0.00
41 Xxxxx & Pumps Pump Station 7/1/1991 25,230.00 25,230.00 0.00
90 Xxxxx & Pumps Pump Station 2/1/1992 10,971.00 10,971.00 0.00
26 Xxxxx & Pumps Pump Station 2/1/1992 2,553.00 2,553.00 0.00
44 Xxxxx & Pumps Pump Station 2/1/1992 4,207.00 4,207.00 0.00
91 Xxxxx & Pumps Pump Station 3/1/1992 7,528.00 7,528.00 0.00
27 Xxxxx & Pumps Pump Station 3/1/1992 1,753.00 1,753.00 0.00
45 Xxxxx & Pumps Pump Station 3/1/1992 2,887.00 2,887.00 0.00
92 Xxxxx & Pumps Pump Station 4/1/1992 506.00 506.00 0.00
29 Xxxxx & Pumps Pump Station 4/1/1992 119.00 119.00 0.00
47 Xxxxx & Pumps Pump Station 4/1/1992 195.00 195.00 0.00
93 Xxxxx & Pumps Pump Station 6/1/1992 90.00 90.00 0.00
28 Xxxxx & Pumps Pump Station 6/1/1992 21.00 21.00 0.00
46 Xxxxx & Pumps Pump Station 6/1/1992 35.00 35.00 0.00
122 Xxxxx & Pumps Pump Station 4/12/1995 3,573.00 3,573.00 0.00
123 Xxxxx & Pumps Lake Line 7/24/1995 1,124.00 1,124.00 0.00
36,510,079.80 7,928,230.80 28,581,849.00
8 5/4/2004
Additional Contributed Assets
1. Accounts receivable, other than with respect to wines from the 2001
vintage.
2. Inventory consisting of all Quintessa library wines from previously
released vintages plus the 2002 and 2003 vintages, and for 2004 wines from
193 tons of Quintessa grapes (approximately 12,000 nine liter cases), and
excluding the 2001 vintage apart from cases reserved as library
wines.
3. Trademarks
4. Contracts as set forth on a schedule to the Contribution Agreement
Assets Excluded From Contribution
1. Four parcels of land as described in this Schedule.
2. Home building rights with respect to the parcels of land which are being
contributed
3. Accounts receivable with respect to sales of wines of the 2001 vintage
4. Vineyard and office equipment associated with the business being
retained by Huneeus
5. Antique furniture belonging to Xxxxxxx Xxxxxxx
2
ANNEX C
AFH ARRANGEMENTS
1. POSITION President and CEO, with all senior management reporting to
him, and authority and discretion comparable to a CEO of a
public company and reporting directly to the Board.
2. SALARY $360,000 per year Base salary. Bonus equal to 55% of Base at
annual plan achievement, 0% bonus at 90% of plan or less,
110%of Base at 110% of plan; straight line percentages in
between.
Base increased annually by CPI, and subject to increase in
Board discretion every two years.
3. BENEFITS Health, disability and other insurance comparable to
other company executives.
Car or car allowance.
$2m term life insurance.
4. TERM 7 years, and automatically extended for three additional
years if not terminated in the Majority of the Board's
discretion within the first three months after the end of the
7 year term.
5. TERMINATION Only for Cause, as described below, as determined by a
Majority of the Board.
6. MANAGEMENT Formula for calculation of the Equity Award to be described.
INCENTIVE Cap at 25%.
Vests ratably over 10 years, but accelerates to full vesting
on a sale of the company.
Measurement Date is earlier of ten years or when there has
been an arm's length sale of the company. In the event of
such a sale the enterprise value implied in that sale will
determine the ending value. In the event there is no such
sale, the ending value will be calculated based on 10X EBITDA
valuation metric (to be refined) and will be subject to
retroactive adjustment if there is an arm's length sale
within 30 months thereafter.
After Measurement Date, the future sharing percentage will be
fixed as a total percentage of the company for the Management
calculations, and AFH interest will begin to participate in
-2-
distributions at that fixed percentage. The idea is that the
fixed valuation will not be paid out at the Measurement Date,
but will instead remain as an interest in the company.
These interests will not carry any voting or control rights
and once vested and measured can be tagged along as if part
of the H interests in the Company.
All vesting accelerates one additional year on death.
Incentive interests may be structured to result in capital
gains, provided it does not create adverse tax effect to any
other Principal.
8. CAUSE Failure over any three year period of the company to achieve
at least 70% of approved annual plan EBIT.
Conviction of a felony involving intentional misconduct (not
including motor vehicle or victimless crime offenses).
Fraud or other material conduct not in good faith where he
could not have reasonably believed that he was acting in the
best interest of the company or not opposed to the interests
of the company, and with respect to criminal matters had
reasonable cause to believe his conduct was unlawful.
Habitual or recurrent personal conduct which is not corrected
after reasonable notice and opportunity to cure which has or
is likely to have a serious adverse impact on the financial
results or image of the company.
Disability for more than 180 consecutive days.
9. INDEMNITY To the fullest extent allowed for a director or officer
of a Delaware corporation.
ANNEX D
CERTAIN BUSINESS ARRANGEMENTS
Subject to the consummation of the Merger, Newco and Constellation (and
its affiliates) will enter into the following agreements upon the Closing:
1. Stonewall Canyon and Pinnacles Grape Contract. Newco and Franciscan
Vineyards, Inc. will enter into an agreement, for the 2004-2008 harvests, for
Newco to purchase Pinot Noir grapes produced at Franciscan's Stonewall Canyon
vineyard and Pinot Noir and Chardonnay grapes produced at its Pinnacles
vineyard, both in Monterey County. Newco will purchase 80 tons of the 2004
Stonewall Canyon Pinot Noir crop at a price of $1,800 per ton, 250 tons of the
2004 Pinnacles Pinot Noir crop at a price of $1,400 per ton, and 200 tons of the
2004 Pinnacles Chardonnay crop at a price of $1,000 per ton. Tonnage of
subsequent crops will be determined by agreement of the parties prior to March 1
of each harvest year. The actual tonnage of such grapes that will be available
to Newco in any harvest year will not be guaranteed and may be more or less than
the designated amount, since it will be based on the actual production from
specified blocks within the vineyards designated annually by a selection process
set forth in the contract; provided that, in the event of a shortage, Franciscan
will sell additional grapes to Newco from the vineyards on the same terms, if
the grapes can be made available. In the event of excess grapes being produced
on the designated block, Newco will purchase those grapes on the same terms. The
prices per ton for crops after 2004 will be based on the 2004 prices, adjusted
annually (but not below the 2004 price) by the lesser of (i) the percentage
change in the average price of the relevant variety in the immediately
proceeding two (2) harvest years in Monterey County, or (ii) changes in the
Consumer Price Index, with a maximum adjustment of 5% per year. With respect to
the Stonewall Canyon vineyard, Newco will have the option to convert the
arrangement to an acreage contract pursuant to which it would purchase all of
the grapes grown on the designated acres at a rate of $6,300 per acre plus
Franciscan's actual incremental costs incurred for any special viticultural
services necessary or required by Newco.
2. Oakville Estates Grape Contract. Although Constellation (through
Franciscan) is contributing the Oakville Estate vineyards to Newco, Franciscan
is retaining title to the 2004 crop produced at the vineyards. Newco and
Franciscan will enter into an agreement, pursuant to which Newco will purchase
grapes from the vineyard's 2004 harvest (to be made into wine at the Quintessa
Winery), and Franciscan will purchase grapes from the 2005-2009 harvests.
For the 2004 harvest, Newco will purchase from Franciscan 42 tons of
Cabernet Sauvignon, 102 tons of Merlot and such additional grapes as Newco may
require, up to a combined total of 21 tons of such varieties as are necessary to
enable Newco to create a meritage wine. Newco will pay $4,011 per ton for the
Cabernet Sauvignon grapes and $2,715 per ton for the Merlot grapes. If Newco is
established, it will retain Huneeus to process the grapes. If Newco is not
established and Franciscan therefore retains the wine produced from the grapes,
Franciscan will pay Huneeus for the processing at the same rate it paid for such
services for the 2003 crop. The actual tonnage of such grapes that will be
available to Newco is not guaranteed and may be more or less than the designated
amount, since it will be based on the actual production from specified blocks
within the vineyard designated by a selection process set forth in the contract;
provided that, in the event of a shortage, Franciscan will sell additional
grapes to
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Newco from the vineyard on the same terms, if the grapes are available. In the
event of excess grapes being produced on the designated block, Newco will
purchase those grapes on the same terms.
For the 2005-2009 harvests, Franciscan will purchase the following
percentages of the crop of Bordeaux varietals: 2005 harvest: 66% (estimated to
be 614 tons); 2006 harvest: 58% (estimated to be 587 tons); 2007 harvest: 43%
(estimated to be 553 tons); 2008 harvest: 24% (estimated to be 273 tons); and
2009 harvest: 15% (estimated to be 176 tons). The actual tonnage of such grapes
to be sold to Franciscan will be based on the actual production from specified
blocks within the vineyard designated annually by a selection process set forth
in the contract. The prices per ton for such grapes will be the lesser of (i)
the percentage change in the average price of the relevant variety in the
immediately proceeding two (2) harvest years in Napa County, or (ii) changes in
the Consumer Price Index, with a maximum adjustment of 5% per year.
3. Quintessa Grape Contract. An existing grape contract between Huneeus
and Franciscan for Franciscan's purchase of grapes from the 2004-2006 harvests
from the Quintessa vineyards will be amended and contributed by Huneeus to
Newco. Whether or not Newco is formed, the contract will be modified to provide
for a reduction in the grape purchase prices in exchange for the following
payments to Huneeus: $479,850 on November 1 of each of 2004, 2005 and 2006. As
amended and contributed to Newco, the contract will provide for Franciscan to
purchase all of the grapes produced from the vineyard's 2004-2006 harvests other
than the following amounts, which will be retained by Newco: 2004 harvest: 242
tons; 2005 harvest: 262 tons; and 2006 harvest: 281 tons. For the 2004 harvest,
Franciscan will pay $4,011 per ton for the Cabernet Sauvignon grapes and $2,715
per ton for the Merlot grapes. The prices per ton for crops after 2004 will be
based on the 2004 prices, adjusted annually (but not below the 2004 price) by
the lesser of (i) the percentage change in the average price of the relevant
variety in the immediately proceeding two (2) harvest years in Napa County, or
(ii) changes in the Consumer Price Index, with a maximum adjustment of 5% per
year. In addition, Franciscan and Newco will identify two blocks at the
Quintessa vineyards to be farmed more aggressively for higher yields for the
2005 and 2006 harvests. If Franciscan is satisfied with the quality of the
grapes produced from these blocks, it will have the right, during the 2007-2011
harvests, to buy the grapes from these blocks that are not used by Newco, at
market prices.
4. Distribution Agreement. Pursuant to an existing agreement with Huneeus,
Franciscan will continue to be the exclusive distributor for Huneeus wines
through February 28, 2005, thereby entitling it to distribute the 2001 vintage
produced at Quintessa. When Newco takes on distribution of the Quintessa brand
effective March 1, 2005, it will assume the distribution rights and obligations
with respect to any remaining inventory of the 2001 vintage retained by Huneeus,
which is expected to be very little as of March 1, 2005.
5. New Zealand and Australian Wines. Newco will enter into an agreement
with Constellation to develop a brand for, and to distribute in the United
States, a variety of New Zealand and Australian wines produced by Constellation.
Under the agreement, which will begin with the 2004 vintage (for New Zealand
wines) and the 2005 vintage (for Australian wines), Newco anticipates increasing
its sales of such wines from 5,000 cases of one New Zealand varietal of the 2004
vintage to approximately 150,000 cases of the 2013 vintage
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(including two varietals from New Zealand and four varietals for Australia).
Pricing under the distribution agreement will be on competitive market terms.
6. Understandings Regarding Production. Newco anticipates using production
services, including crushing services, barrel fermentation and possibly storage,
at the Franciscan and Estancia wineries, beginning with the 2004 crop. The
pricing for such services will be on a formula basis that is competitive with
other facilities providing comparable services.
7. General Services. Newco anticipates contracting for a variety of
services that Franciscan may be able to provide or facilitate at prices or on
terms that will be advantageous to Newco, including, for example, access to
market data services, management of information technology resources, joint
warehousing of case goods, accounts receivable management and employee benefit
programs, and joint purchasing of glass, corks and other components.
ANNEX E
Wine Purchase, Distribution and Technical Assistance Agreement
1. Parties Brandco - 100% owned by DBR (Lafite) ("DBR") VentureCo
(voting interest being 50% Brandco, 25% FE(C) and 25% H) and
economic interests to be equal to the Newco percentages
2. Relationships Venture Co will create and market a wine under the auspices
of DBR who will provide technical assistance to Venture Co
for which it will receive a remuneration to be agreed upon.
Marketing in the USA will be done by Newco Marketing in the
rest of the world will be done by DBR, or by others subject
to DBR's consent.
If the quality of the wine is deemed to be acceptable by DBR,
specific Rothschild intangibles to be agreed upon will be
included in the packaging of the wine.
3. Term The partners of VentureCo will remain together for a minimum
of 10 years from the selling of the first VentureCo "Brand"
vintage (10 year term)
All agreements between the Parties, including VentureCo
distribution and marketing agreements with Newco, are also
for the same minimum 10 year term
4. "Brand" Owner VentureCo owns all brand, trade dress and other intangibles
(including distinctive features and logo) and excluding the
Rothschild specific intangibles, H specific intangibles and
FE specific intangibles.
5. Termination Subject to earlier termination for cause (to be determined),
any party can sell their VentureCo interest after the minimum
10 year term and their specific intangibles will be allowed
to be used only for a reasonable time thereafter to complete
and sell previously acquired wines and then removed from all
packaging, advertising and collateral merchandising materials
forever.
6. Exclusivity DBR, H and FE agree not to produce/join in partnership or
allow use of their specific intangibles for any North
American produced wine (other than VentureCo's "brands")
except what is otherwise in use today.
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ANNEX F
Activities
Proxy materials/ 13e-3 Filings/ SEC review process
Special Committee process/ Merger Agreement process
Third party consents for asset/liability transfers (other than HVI debt)
HSR and other regulatory consents (on behalf of Xxxxxxx, Xxxxxx and DBR)
ANNEX G
Chalone Shareholder Wine Program Continuation
It is the intention of Newco following the merger to maintain and enhance
the existing Chalone wine club program by continuing to make fine wines
available for purchase by shareholders, other than DBR on a non-discriminatory
basis, as eligible members of a founder's wine club.
In addition, subject to applicable rules, all eligible former shareholders
will as members of the founder's club be entitled to an additional 50% discount
on select fine wines purchased over the next two years through the program up to
a maximum discount value of $1.00 per share held on a date to be determined.
These founders club benefits will not be transferable.
In addition, founder's club members who purchase specified levels of wines
in addition to the special discount wines for each of three years will receive
special access and pricing to the company's most exclusive and allocated wines.
Purchase and shipping of founder's club wines would be subject to
compliance with applicable laws.
VIP Tours, dinners and other benefits would also be continued.
