Exhibit 10.1

 

Second Amendment to Term Revolving Credit Agreement

October 31, 2011

This second amendment to the “Term Revolving Credit Agreement dated May 31,
2011”, (hereinafter referred to as “Amendment”) is made and entered into on
October 31, 2011, by and between FCW and the Company.

RECITALS

WHEREAS, under the terms of the Term Credit Agreement dated May 31, 2011
(“Agreement”) Company has agreed to certain negative covenants and certain
financial covenants;

WHEREAS, FCW and the Company have agreed to modify certain negative covenants
and to modify and add certain financial covenants to the existing financial
covenants of the Agreement, which such modifications and additions are fully
incorporated herein by this reference.

NOW, THEREFORE, IN CONSIDERATION OF THE RECITALS SET FORTH ABOVE; the terms and
provisions contained herein, and other valuable consideration, the receipt of
which is hereby acknowledged, FCW and the Company agree to amend the Controls
and Covenants of the Agreement as follows:

1.        Section 16 (A) is hereby amended in its entirety as follows:

(A)       Borrowings.  Create, incur, assume, or allow to exist, directly or
indirectly, any indebtedness or liability for borrowed money (including trade or
bankers’ acceptances), letters of credit, or the deferred purchase price of
property or services (including capitalized leases), except for: (i) debt to
FCW; (ii) accounts payable to trade creditors incurred in the ordinary course of
business; and (iii) current operating liabilities (other than for borrowed
money) incurred in the ordinary course of business; (iv) debt of the Company to
Bank of America in an amount not to exceed $32,135,000.00 and all extensions,
renewals, and refinancings thereof; (v) letters of credit issued by any bank for
the account of the Company in an aggregate face amount not to exceed
$5,000,000.00 at any one time outstanding; and (vi) capitalized leases existing
on the date hereof existing from time to time.

2.        Section 17 (A) is hereby amended in its entirety as follows:

(A) Tangible Net Worth.  To maintain on a consolidated basis Tangible Net Worth
equal to at least (i) at least 85% of Company’s Tangible Net Worth as of the
closing of the Renaissance Food Group acquisition (on or about June 1, 2011),
plus (ii) an amount equal to 25% of net income after income taxes (without
subtracting losses) earned in Company’s fiscal year ending October 31, 2011 and
each fiscal year thereafter, measured on a quarterly basis. For purposes of
calculating the minimum required consolidated Tangible Net Worth at October 31,
2011, the 25% of net income after income taxes (without subtracting losses)
requirement will be based on the period between June 1, 2011 and October 31,
2011.

“Tangible Net Worth” means the value of total assets (including leaseholds and
leasehold improvements and reserves against assets but excluding goodwill,
patents, trademarks, trade names, organization expense, unamortized debt
discount and expense, capitalized or deferred research and development costs,
deferred marketing expenses, and other like intangibles, and monies due from
affiliates, officers,

 

Second Amendment to Term Revolving Credit Agreement

Calavo Growers, Inc.

   Loan No. 3789055-101            

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directors, employees, shareholders, members or managers) less total liabilities,
including but not limited to accrued and deferred income taxes, but excluding
the non-current portion of Subordinated Liabilities.

“Subordinated Liabilities” means liabilities subordinated to the Company’s
obligations to FCW in a manner acceptable to FCW in its sole discretion.

3.        Section 17 (C) is hereby added in its entirety as follows:

(C) Fixed Charge Coverage Ratio.  The Company will maintain on a consolidated
basis a Fixed Charge Coverage Ratio of at least 1.25:1.0 at all times.

“Fixed Charge Coverage Ratio” means the ratio of:

(a)        EBITDA minus capital expenditures for maintenance of $4,000,000,
divided by

(b)        the current portion of long term debt and the current portion of
capitalized lease obligations plus cash interest expense plus cash income tax
expense.

“EBITDA” for purposes of this Section 17C means net income, less income or plus
loss from discontinued operations and extraordinary items, plus income taxes,
plus interest expense, plus depreciation, depletion, amortization and other
non-cash charges.

This ratio will be calculated at the end of each reporting period for which FCW
requires financial statements, using the results of the twelve-month period
ending with that reporting period. The current portion of long-term liabilities
will be measured as of the last day of the calculation period.

4.        Section 17 (D) is hereby added in its entirety as follows:

(D) Current Ratio.  The Company shall maintain on a consolidated basis a ratio
of Current Assets to Current Liabilities of at least 1.00:1.0 at all times.

Current Liabilities means all current liabilities plus outstanding balances
under any revolving line of credit, whether the line of credit is labeled a
short-term or long-term liability on the consolidated balance sheet

Except as specifically modified, amended or replaced by this Amendment, all
other terms and conditions of the Agreement remain unchanged and in full force
and effect.

 

Farm Credit West, PCA       Calavo Growers, Inc., a California Corporation     
By:         

/s/    James Neeley

    By:         

/s/    Arthur J. Bruno        11/11/2011

          James Neeley, Senior Vice President         
Arthur J. Bruno, Chief Operating Officer,           Risk Management         
Chief Financial Officer & Corporate                    Secretary              
By:     

/s/    James Snyder        11/11/2011

                   James Snyder, Corporate Controller     

 

Second Amendment to Term Revolving Credit Agreement

Calavo Growers, Inc.

   Loan No. 3789055-101