CUSTOM CRUSH AGREEMENT CUSTOM CRUSH AGREEMENT ...

CUSTOM CRUSH AGREEMENT Winery agrees to perform certain services specified below relating to the making and storage of Client’s wine. 1. Parties. This agreement is made as of ____________, 2007, between , (“Winery”) and [Company], [Address] (“Client”). 2. Bond. Winery will store Client’s wine at the above address in bond. Winery will maintain all required licenses and bonds necessary for tax-free storage. Client agrees to pay any personal property taxes, grape assessments, wine excise taxes, or other governmental charges applicable to Client’s wine in storage at Winery. Winery will provide Client with access to Client’s wine for normal sampling and inspection upon reasonable notice. 3. Degree of Care; Warranties. Winery shall exercise ordinary care in making wine for Client. Client understands that the quality of winemaking and custom crushing is a highly subjective matter and Winery makes no warranties whatsoever that the wine made for Client shall be of any particular quality, or that it will have any particular characteristics or value. Winery shall have no liability to client for any act or omission unless the same constitutes gross negligence or wanton disregard for Client’s wine. Notwithstanding such limitation, if Winery should become liable to Client, whether pursuant to this Agreement or otherwise relating to the wine, in no event will Winery’s liability exceed the amount paid to Winery by Client hereunder. 4. Delivery of Grapes. Client shall notify Winery and schedule the delivery of grapes at Winery at least 24 hours prior to their delivery. Any deliveries after 5 p.m. shall be at the discretion of the winemaking staff and must be pre-approved. All delivery methods must be approved by the winemaking staff. 5. Receiving and Preparation of Wines. Client is responsible for providing the necessary paperwork to substantiate all blending percentages, tax classes, bond status and compliance with Federal and laws regarding the composition of wines shipped to Winery. Winery will blend wines only upon written instructions, signed by Client, detailing Client’s specifications. If the blended wines are not in compliance with any applicable Federal or laws regarding wine (e.g., appellation, v.a., Percentage of alcohol, etc.), Client shall not hold Winery responsible or liable for work that was to Client’s specifications. Winery shall be responsible for the accuracy of the blends only as far as the actual gallons transferred, not the regulatory appropriateness of the percentages blended or their composition. Winery cannot receive, produce or bottle any wines that it deems not to be in compliance with Federal and laws. Winery shall keep appropriate records that support any blending and processing claims as required by the Federal Bureau of Alcohol and Tobacco Tax and Trade Bureau and/or the Liquor Control Commission. 6. Schedule of Fees. A fee of $[Price] per Case (defined below) will apply for the making and storage of wine in accordance with the payment terms set forth in Section 17 of the Agreement. The $[Price] per Case fee covers only those activities described in the attached PAGE 1 - CUSTOM CRUSH AGREEMENT 70914167.1 0099865-70012

“Schedule of Winemaking Activities.” All winemaking directives are to be the responsibility of Client and communicated to winemaking staff as a protocol. All labor is to be supplied by Winery. This fee covers the making of the wine from grape into the bottle. It is assumed that most red wine made by winery will be of the Pinot Noir variety and that bottling will take place prior to the following vintage. Client will have the ability to age wines longer in barrels but will be charged $[Price] per barrel per month. The Winery’s costs for dry ice, enzymes, yeasts and additives other than SO2 will be charged to the Client. A “Case” means twelve 750 ml bottles. Winery estimates that one ton of grapes will produce 65 Cases of wine and the fee payable to Winery will adjust to actual Cases bottled at time of final payment. Client is to provide at its expense grapes, barrels, bottles, corks, capsules, labels and all packaging materials. Fermenter sizes will be 2½ tons and 5 tons. Winery will attempt to crush into a tank that “best fits” the Client’s crush and fermentation criteria. Tank space will be based upon estimates at the time this Agreement is signed. Fees are based upon the estimates made at signing. If the tonnage received at crush varies from estimates by more than 10 percent, the following charges will be assessed: If the amount delivered is less than the estimates, Client shall pay a fee equal to 50 percent of the over-reported amount. For example, if Client estimates delivery of five tons of grapes, but only delivers four tons of grapes, the total fee will equal $[Total] calculated as follows: 260 Cases delivered (4 tons times 65 Cases) times $[Price] plus overestimate 65 Cases times $[Price]. In the event of an underestimate of the actual tonnage of grapes delivered, which exceeds 10 percent, the Winemaker in its sole and absolute discretion may accept the grapes for processing or may reject the additional grapes. No prorations will be made for variances of 10 percent or less. 7. Security Agreement; Default. Client hereby grants Winery a security interest in all of Client’s property delivered to or created at the Winery, including grapes, juice, wine, bottles, labels, etc. (the “Collateral”). Such security interest shall exist until all funds owed to Winery are paid in full. Prior to delivery of grapes, Client shall also provide a Subordination Agreement in a form suitable to Winery with respect to all other parties holding a prior lien on the Collateral. In the event of any default of payment by Client, Winery shall be entitled to take possession of the Collateral and either: a)

retain the Collateral, either in full or to the extent allowed by law in satisfaction of the debt; or

b)

dispose of the Collateral by a public or private sale.

If Winery proposes to retain Collateral, Winery shall so advise Client in writing. If Winery does not receive written objection from Client within ten days after the date of the notice (or such longer time as may be required by applicable law). Winery may retain the Collateral in satisfaction of the debt and, thereafter, shall be the sole owner thereof. If Winery elects to sell the Collateral, Winery may do so after first notifying Client by mail five days before the planned PAGE 2 - CUSTOM CRUSH AGREEMENT 70914167.1 0099865-70012

date of the sale that a sale will take place unless all sums due to Winery are paid in full, including any fees or expenses of preparing to sell the Collateral. The provision of law shall govern the foreclosure sale procedure. From the proceeds of this private or public sale, Winery shall first pay the expenses of arranging the sale; thereafter, pay all moneys due to Winery; and finally, pay the surplus remains, if any, to Client. If the money received from the sale of the Client’s collateral is insufficient to pay in full all sales expenses and all the debt due Winery, Client shall remain personally liable and agrees to pay promptly the balance due and owing to Winery. This remedy shall be in addition to any and all other legal and equitable remedies available to Winery under law in the event of any default by Client. 8. Shrinkage. The parties understand and acknowledge that the winemaking process results in normal shrinkage and Winery shall not be responsible for such occurrences. Normal shrinkage is generally accepted to be not more than 6 percent per year of the reported gallonage after the post-fermentation racking. 9. Insurance. Client shall be responsible for insuring all of Client’s property in Winery’s possession, including but not be limited to, general liability, breakage, theft, fire, casualty loss, earthquake loss, leakage and flooding, and will supply Winery with a certificate of insurance including risks covered, prior to receipt of Client’s property at Winery. 10. Weight and Sugar Testing. No official sugar testing is available at Winery. The initial fee estimate will be assessed according to the total weight of all grapes crushed, grapes will need to be accompanied, at delivery, by a weight tag. 11. Controversy or Dispute Resolution. The parties wish to establish procedures to facilitate the informal and inexpensive resolution of any disputes arising under this Agreement by mutual cooperation and without resort to litigation. To accomplish this objective, the parties agree to follow the procedures set forth below if and when a dispute arises under this Agreement: The complaining party shall write a description of the alleged breach of contract and send it to the other party by either hand delivery or certified or registered mail. This letter shall explain the nature of the complaint and refer to the relevant sections of this Agreement. The complaining party shall also set forth a proposed solution to the problem, including a specific time frame within which the solution should be implemented. The party receiving the letter must respond in writing within ten days with an explanation, including references to the relevant parts of this Agreement and a response to the proposed solution. Within ten days of receipt of the response, the parties must meet and discuss options for resolving the dispute. The complaining party must initiate the scheduling of this resolution meeting. The parties intend that the first three steps toward resolution be taken by the parties themselves without participation of legal counsel. If, however, the parties are unable to

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reach agreement at the resolution meeting, they may then seek to agree that lawyers may participate in a subsequent settlement conference. A settlement conference must be held within 30 days of an unsuccessful resolution meeting. The settlement conference will be held with a mediator retained through the Arbitration Service of . The complaining party must contact the mediator to schedule the conference. If the dispute is not resolved through the above-referenced procedures, the dispute shall be resolved through binding arbitration through the Arbitration Service of . 12. Binding Agreement. This Agreement shall be binding upon and insure to the benefit of the heirs, executors, administrators, successors and assigns of the parties. 13. .

Law. This Agreement shall be construed under the laws of the state of

14. Entire Agreement. This Agreement and the attached schedule(s) constitute the entire agreement of the parties. Any previous understandings or agreements are superseded by this Agreement. 15. Changes in Writing. Any changes in this Agreement shall be in writing and signed by all parties. 16. crushed)

Procedures to be performed by Winery (include total tons by variety to be Crush approximated ________tons of ____________________

17.

Payment Terms. • • • •

A deposit equal to 15 percent is due at the signing of this Agreement. Payment of 50 percent of the fee is due on October first. Payment of 20 percent of the fee is due on March first. Payment of the final 15 percent of the fee is due at the time of bottling.

IN WITNESS WHEREOF, the parties have hereunto set their hands on the date set forth below. WINERY

[COMPANY]

By:

By:

Its

Its

Date:

Date:


SCHEDULE OF WINEMAKING ACTIVITIES Winemaking involves a number of procedures, which vary with grape type, vintage and the “style” desired. This schedule is organized to follow the winemaking steps. Any agreement to utilize the winemaking services at Winery is subject to the following conditions: 1. 2. 3. 4. 5. 6. 7. 8. 9. 10.
