Exhibit 10.1
TERM LOAN AGREEMENT
          THIS TERM LOAN AGREEMENT (“Term Loan Agreement”) is entered into as of
July 1, 2005, between FARM CREDIT WEST, PCA, Visalia, California (“FCW”) and
CALAVO GROWERS, INC., Santa Paula, California (the “Company”).
     SECTION 1. The Credit Facility. On the terms and conditions set forth in
this Term Loan Agreement, FCW agrees to make advances to the Company during the
period set forth below in an aggregate principal amount not to exceed
$13,000,000.00 (the “Commitment”).
     SECTION 2. Sale of Interest. The Company acknowledges that FCW has the
option to participate all or a portion of the Commitment with one or more
lenders.
     SECTION 3. Purpose. The purpose of the Commitment is to finance the
purchase of stock in the Limoneira Company.
     SECTION 4. Term. The term of the Commitment shall be from the date hereof,
up to and including July 1, 2015.
     SECTION 5. Availability. Subject to the provisions of Section 25, advances
will be made available on any day on which FCW and the Federal Reserve Banks are
open for business upon the telephonic or written request of the Company.
Requests for advances must be received no later than 12:00 Noon, Company’s local
time, on the date the advance is desired. Advances will be made available by FCW
by wire transfer of immediately available funds to such account or accounts as
may be authorized by the Company. The Company shall furnish to FCW a duly
completed and executed copy of a FCW Delegation and Wire and Electronic Transfer
Authorization Form, and FCW shall be entitled to rely on (and shall incur no
liability to the Company in acting on) any request or direction furnished in
accordance with the terms thereof. Notwithstanding anything else contained
herein or in the Note, FCW shall not be obligated to honor requests for advances
received after July 30, 2005, nor shall FCW be obligated to readvance any
amounts which have previously been repaid.
     SECTION 6. Interest and Fees.
          (A) Interest. The Company agrees to pay interest on the unpaid balance
of the Commitment at an interest rate chosen by the Company and to be disclosed
by FCW at the time the Commitment is closed (“Subsequent Disclosure”). Upon the
Commitment closing, the Subsequent Disclosure shall set forth any prepayment
provisions that apply to the Commitment based on the interest rate chosen by the
Company.
          Interest shall be calculated on the actual number of days the loan is
outstanding on the basis of a year consisting of 365 days and shall be payable
monthly in arrears by the 1st day of the following month or on such other day in
such month as FCW shall require in a written notice to the Company.
          (B) Documentation Fee. In consideration of the Commitment, the Company
agrees to pay to FCW a documentation fee of $2,500.00.
     SECTION 7. Repayment and Maturity. The unpaid principal balance of the
Commitment shall mature and be due and payable on July 1, 2015 (the “Maturity
Date”).
     SECTION 8. Promissory Note. The Company’s obligation to repay the
Commitment shall be evidenced by a promissory note in the form attached hereto
as Exhibit A (“Note”).

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     SECTION 9. Manner and Time of Payment. FCW shall maintain a record of the
Commitment, the interest accrued thereon, and all payments made with respect
thereto, and such record shall, absent proof of manifest error, be conclusive
evidence of the outstanding principal and interest on the Commitment. All
payments shall be made by wire transfer of immediately available funds, by
check, or by automated clearing house or other similar cash handling processes
as specified by separate agreement between the Company and FCW. Wire transfers
shall be made to ABA No. 101104562 for advice to and credit of FCW (or to such
other account as FCW may direct by notice). The Company shall give FCW
telephonic notice no later than 12:00 Noon Company’s local time of its intent to
pay by wire and funds received after 3:00 p.m. Company’s local time shall be
credited on the next business day. Checks shall be mailed to FCW, P.O. Box 631,
Visalia, CA 93279 (or to such other place as FCW may direct by notice). Credit
for payment by check will not be given until the later of: (a) the day on which
FCW receives immediately available funds; or (b) the next business day after
receipt of the check.
     SECTION 10. Capitalization. The Company has purchased a $1,000.00 stock
investment under FCW’s capitalization plan. The Company understands that FCW’s
stock is at risk and that any reference to “FCW equities” or to “stock or
participation certificates required by Lender’s bylaws” in any document,
agreement or Loan Document shall mean the FCW stock investment described herein.
     SECTION 11. Patronage. The Commitment is eligible for patronage under the
plan and in accordance with the provisions of FCW’s bylaws and its practices and
procedures related to patronage distribution and as set forth in Section 27.
     SECTION 12. Security. The Company’s obligations under this Term Loan
Agreement and the Note shall be secured by a statutory first lien on all equity
which the Company may now own or hereafter acquire in FCW. With the exception of
the security referenced in the preceding sentence, the Company’s obligations
under this Term Loan Agreement and the Note shall be unsecured.
     SECTION 13. Conditions Precedent. FCW’s obligation to make advances
hereunder is subject to the condition precedent that FCW receive, in form and
content satisfactory to FCW, each of the following:
          (A) This Term Loan Agreement. A duly executed copy of this Term Loan
Agreement and all instruments and documents contemplated hereby.
          (B) Evidence of Authority. Such certified board resolutions, evidence
of incumbency, and other evidence that FCW may require that this Term Loan
Agreement and the Note have been duly authorized and executed.
          (C) Fees and Other Charges. All fees and other charges provided for
herein.
          (D) Evidence of Insurance. Such evidence as FCW may require that the
Company is in compliance with Section 15(C) hereof.
          (E) Event of Default. That no “Event of Default” (as defined in
Section 18 hereof) or event which with the giving of notice and/or the passage
of time would become an Event of Default hereunder (a “Potential Default”),
shall have occurred and be continuing.
     SECTION 14. Representations and Warranties.
          (A) This Term Loan Agreement. The Company represents and warrants to
FCW that as of the date of this Term Loan Agreement:

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               (1) Compliance. The Company and, to the extent contemplated
hereunder, each “Subsidiary” (as defined below), is in compliance with all of
the terms of this Term Loan Agreement, and no Event of Default or Potential
Default exists hereunder.
               (2) Due Organization. The Company and each Subsidiary is duly
organized and validly existing under the laws of its state or nationality of
organization and is duly qualified to conduct business in each jurisdiction in
which its business is conducted.
               (3) Conflicting Agreements. This Term Loan Agreement, the Note
and any other documents or instruments executed or delivered by Company in
connection herewith (collectively, at any time, the “Loan Documents”), do not
conflict with, or require the consent of any party to, any other agreement to
which the Company is a party or by which it or its property may be bound or
affected, and do not conflict with any provision of the Company’s bylaws,
articles of incorporation, or other organizational documents.
               (4) Due Authorization. The execution, delivery and performance of
the Loan Documents to be executed by Company are within Company’s corporate
powers and have been duly authorized by all necessary corporate action by
Company.
               (5) Financial Information. All financial statements and other
financial information submitted by Company to FCW are true and correct in all
material respects, and there has been no material adverse change in Company’s
financial condition since the date of the latest of such financial statements.
               (6) Subsidiaries. The Company has the following Subsidiaries:
Calavo Foods, Inc. (CFI); Maui Fresh International, Inc.; Calavo de Mexico S.A.
de C.V.; and Calavo Foods de Mexico S.A. de C.V. . For purposes hereof, a
“Subsidiary” shall mean (i) a corporation of which shares of stock having
ordinary voting power to elect a majority of the board of directors or other
managers of such corporation, (ii) a limited liability company of which
membership interests constituting a majority interest or the voting power to
elect a majority of the managers of such limited liability company, or (iii) a
partnership of which a majority of the general partnership interests, are owned,
directly or indirectly, by the Company.
               (7) Binding Agreement. The Loan Documents create legal, valid,
and binding obligations of the Company which are enforceable in accordance with
their terms, except to the extent that enforcement may be limited by applicable
bankruptcy, insolvency, or similar laws affecting creditors’ rights generally.
               (8) Good Standing. The Company and each Subsidiary are properly
licensed and in good standing in each State and nationality in which such person
is doing business, and the Company and each Subsidiary has complied with all
laws and regulations affecting such person.
               (9) Regulation U. Neither the Company nor any Subsidiary is
engaged in the business of extending credit for the purpose of, and no part of
the Loan will be used, directly or indirectly, for purchasing and carrying
margin stock within the meaning of Federal Reserve Board Reg. U.
               (10) Compliance with Laws. The Company and each Subsidiary is in
compliance with each applicable law, rule, regulation, ordinance, code, order,
and the like (collectively, “Laws”), including, without limitation all Laws
relating to environmental protection, which are applicable to the Company, the
Subsidiaries or any of their business.
               (11) Assets. All property of the Company and each Subsidiary that
is necessary to or useful in the proper conduct of its business is in good
working condition and repair, ordinary wear and tear excepted.

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               (12) Other Facts and Circumstances. The Company is not aware of
any fact, occurrence or circumstance which Company has not disclosed to FCW in
writing which has, or could reasonably be expected to have, a material adverse
effect on the Company’s ability to repay the Loan or perform its obligations
under the Loan Documents.
     SECTION 15. Affirmative Covenants. Unless otherwise agreed to in writing by
FCW, while this Term Loan Agreement is in effect, the Company agrees to and with
respect to Subsections 15(A) through 15(F) hereof, agrees to cause each
Subsidiary, if any, to:
          (A) Corporate Existence, Licenses. (i) Preserve and keep in full force
and effect its existence and good standing in the jurisdiction of its
incorporation or formation; (ii) qualify and remain qualified to transact
business in all jurisdictions where such qualification is required; and
(iii) obtain and maintain all licenses, certificates, permits, authorizations,
approvals, and the like which are material to the conduct of its business or
required by Laws.
          (B) Compliance with Laws. Comply in all material respects with all
applicable Laws, including, without limitation, all Laws relating to
environmental protection. In addition, the Company agrees to cause all persons
occupying or present on any of its properties, and to cause each Subsidiary, if
any, to cause all persons occupying or present on any of its properties, to
comply in all material respects with all environmental protection Laws.
          (C) Insurance. Maintain insurance with insurance companies or
associations acceptable to FCW in such amounts and covering such risks as are
usually carried by companies engaged in the same or similar business and
similarly situated, and make such increases in the type or amount of coverage as
FCW may request. At FCW’s request, all policies (or such other proof of
compliance with this Subsection as may be satisfactory to FCW) shall be
delivered to FCW.
          (D) Property Maintenance. Maintain all of its property that is
necessary to or useful in the proper conduct of its business in good working
condition, ordinary wear and tear excepted.
          (E) Books and Records. Keep adequate records and books of account in
which complete entries will be made in accordance with generally accepted
accounting principles (“GAAP”) consistently applied.
          (F) Inspection. Permit FCW or its agents, upon reasonable notice and
during normal business hours or at such other times as the parties may agree, to
examine its properties, books, and records, and to discuss its affairs,
finances, and accounts, with its respective officers, directors, employees, and
independent certified public accountants.
          (G) Reports and Notices. Furnish to FCW:
               (1) Annual Financial Statements. As soon as available, but in no
event more than 90 days after the end of each fiscal year of the Company
occurring during the term hereof, annual consolidated and consolidating
financial statements of the Company and its consolidated Subsidiaries, if any,
prepared in accordance with GAAP consistently applied. Such financial statements
shall: (a) be audited by independent certified public accountants selected by
the Company and acceptable to FCW; (b) be accompanied by a report of such
accountants containing an opinion thereon acceptable to FCW; (c) be prepared in
reasonable detail and in comparative form; and (d) include a balance sheet, a
statement of income, a statement of retained earnings, a statement of cash
flows, and all notes and schedules relating thereto.
               (2) Interim Financial Statements. As soon as available, but in no
event more than 30 days after the end of each fiscal quarter, a consolidated
balance sheet of the Company and its consolidated Subsidiaries, if any, as of
the end of such quarter, a consolidated statement of income for the Company and
its consolidated Subsidiaries, if any, for such period and for the period year
to date, and such other interim statements as FCW may specifically

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request, all prepared in reasonable detail and in comparative form in accordance
with GAAP consistently applied and certified by an authorized officer or
employee of the Company acceptable to FCW.
               (3) Notice of Material Communications. Promptly upon receipt or
contemporaneous with sending, copies of all material communications to or from
the SEC or NASDAQ, not including, however, those communications to the SEC such
as annual reports, 10K, or 10Q which are generally available to the shareholders
of the Company.
               (4) Notice of Default. Promptly after becoming aware thereof,
notice of the occurrence of an Event of Default or a Potential Default.
               (5) Notice of Non-Environmental Litigation. Promptly after the
commencement thereof, notice of the commencement of all actions, suits, or
proceedings before any court, arbitrator, or governmental department,
commission, board, bureau, agency, or instrumentality affecting the Company or
any Subsidiary which, if determined adversely to the Company or any such
Subsidiary, could have a material adverse effect on the financial condition,
properties, profits, or operations of the Company or any such Subsidiary.
               (6) Notice of Environmental Litigation. Promptly after receipt
thereof, notice of the receipt of all pleadings, orders, complaints,
indictments, or any other communication alleging a condition that may require
the Company or any Subsidiary to undertake or to contribute to a cleanup or
other response under environmental Laws, or which seek penalties, damages,
injunctive relief, or criminal sanctions related to alleged violations of such
Laws, or which claim personal injury or property damage to any person as a
result of environmental factors or conditions.
               (7) Notice of Material Disputes with Regulators. Promptly after
becoming aware thereof, notice of any material dispute which may exist between
the Company or any Subsidiary and any governmental body or law enforcement body.
               (8) Bylaws and Articles. Promptly after any change in the
Company’s bylaws or articles of incorporation (or like documents), copies of all
such changes, certified by the Company’s Secretary.
               (9) Other Information. Such other information regarding the
condition or operations, financial or otherwise, of the Company or any
Subsidiary as FCW may from time to time reasonably request, including but not
limited to copies of all pleadings, notices, and communications referred to in
Subsections 15(G)(4) and (5) above.
               (10) Financial Certificate. Together with each set of financial
statements furnished to FCW pursuant to Section 15(G)(1), and each quarterly
statement submitted pursuant to Section 15(G)(2) for a period corresponding to a
period for which one or more of the financial covenants set forth in Section 17
hereof are required to be tested, a certificate of an officer or employee of the
Company acceptable to FCW setting forth calculations showing compliance with
each of the financial covenants that require compliance at the end of the period
for which the statements are being furnished.

  (H)   Certain Organizational Changes. Provide FCW with prior notice (and as
early as practicable) of any merger, consolidation reorganization under a
different provision of law, acquisition of all or a material part of the assets
of another organization, change of name, adoption of any trade name, or creation
of any Subsidiary, affiliate or material joint venture(s). For purposes of this
covenant, joint venture transaction(s), which alone or in the aggregate exceed
$1,000,000, are considered material.

     SECTION 16. Negative Covenants. Unless otherwise agreed to in writing by
FCW, which agreement will not be unreasonably withheld, while this Term Loan
Agreement is in effect, the Company will not and will not permit any Subsidiary
to:

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          (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
or CoBank; (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 $12,000,000.00 and all
extensions, renewals, and refinancings thereof; (v) (vi) 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 (vii) capitalized
leases existing on the date hereof existing from time to time.
          (B) Liens. Create, incur, assume, or allow to exist any mortgage, deed
of trust, pledge, lien (including the lien of an attachment, judgment, or
execution), security interest, or other encumbrance of any kind upon any of its
property, real or personal (collectively, “Liens”). The foregoing restrictions
shall not apply to: (i) Liens in favor of FCW or CoBank; (ii) Liens for taxes,
assessments, or governmental charges that are not past due; (iii) Liens and
deposits under workers’ compensation, unemployment insurance, and social
security Laws; (iv) Liens and deposits to secure the performance of bids,
tenders, contracts (other than contracts for the payment of money), and like
obligations arising in the ordinary course of business as conducted on the date
hereof; (v) Liens imposed by Law in favor of mechanics, materialmen,
warehousemen, and like persons that secure obligations that are not past due;
and (vi) easements, rights-of-way, restrictions, and other similar encumbrances
which, in the aggregate, do not materially interfere with the occupation, use,
and enjoyment of the property or assets encumbered thereby in the normal course
of its business or materially impair the value of the property subject thereto.
          (C) Transfer of Assets. Sell, transfer, lease, or otherwise dispose of
any of its assets, except in the ordinary course of business.
          (D) Loans. Lend or advance money, credit, or property to any person or
entity, except for: (i) loans made to U.S. growers under Calavo’s grower
development loan program not to exceed $4,000,000.00 outstanding at any one
time; (ii) existing advances and loans to Sierra Pacific; (iii) loans to Mexican
growers not to exceed $1,500,000.00 outstanding at any one time; (iv) Chilean
pre-season grower advances made under existing program not to exceed a gross
amount of $4,000,000.00 outstanding at any one time; and (v) trade credit
extended in the ordinary course of business.
          (E) Contingent Liabilities. Assume, guarantee, become liable as a
surety, endorse, contingently agree to purchase, or otherwise be or become
liable, directly or indirectly (including, but not limited to, by means of a
maintenance agreement, an asset or stock purchase agreement, or any other
agreement designed to ensure any creditor against loss), for or on account of
the obligation of any person or entity, except by the endorsement of negotiable
instruments for deposit or collection or similar transactions in the ordinary
course of the Company’s business.
          (F) Change in Business. Engage in any business activities or
operations substantially different from or unrelated to the Company’s present
business activities or operations.
     SECTION 17. Financial Covenants. Unless otherwise agreed to in writing,
while this Term Loan Agreement is in effect:
          (A) Working Capital. The Company will maintain, on a consolidated
basis, current assets in excess of current liabilities of at least Fifteen
Million Dollars ($15,000,000), measured on a quarterly basis.
          (B) Tangible Net Worth. The Company will maintain, on a consolidated
basis, a “Tangible Net Worth” equal to at least Thirty-Two Million Five Hundred
Thousand Dollars ($32,500,000.00), measured on a quarterly basis. “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, directors, employees,

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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.
          (C) EBITDA. The Company will maintain an “EBITDA” of at least Seven
Million Five Hundred Thousand Dollars ($7,500,000.00). “EBITDA” means net
income, less income or plus loss from discontinued operations and extraordinary
items, plus income taxes, plus interest expense, plus depreciation, depletion,
and amortization. This covenant 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.
     SECTION 18. Events of Default. Each of the following shall constitute an
“Event of Default” under this Term Loan Agreement:
          (A) Payment Default. The Company should fail to make any payment to
FCW when due.
          (B) Representations and Warranties. Any representation or warranty
made or deemed made by the Company herein or in the Note, application,
agreement, certificate, or other document related to or furnished in connection
with this Term Loan Agreement or the Note, shall prove to have been false or
misleading in any material respect on or as of the date made or deemed made.
          (C) Certain Affirmative Covenants. The Company or, to the extent
required hereunder, any Subsidiary should fail to perform or comply with
Sections 15(A) through 15(G)(2), and 15(G)(6) and such failure continues for
15 days after written notice thereof shall have been delivered by FCW to the
Company.
          (D) Other Covenants and Agreements. The Company or, to the extent
required hereunder, any Subsidiary should fail to perform or comply with any
other covenant or agreement contained herein or in any other Loan Document or
shall use the proceeds of any loan for an unauthorized purpose.
          (E) Cross-Default. The Company should, after any applicable grace
period, breach or be in default under the terms of any other agreement between
the Company and FCW .
          (F) Other Indebtedness. The Company or any Subsidiary should fail to
pay when due any indebtedness to any other person or entity for borrowed money
or any long-term obligation for the deferred purchase price of property
(including any capitalized lease), or any other event occurs which, under any
agreement or instrument relating to such indebtedness or obligation, has the
effect of accelerating or permitting the acceleration of such indebtedness or
obligation, whether or not such indebtedness or obligation is actually
accelerated or the right to accelerate is conditioned on the giving of notice,
the passage of time, or otherwise.
          (G) Judgments. A judgment, decree, or order for the payment of money
shall be rendered against the Company or any Subsidiary and either:
(i) enforcement proceedings shall have been commenced; (ii) a Lien prohibited
under Section 10(B) hereof shall have been obtained; or (iii) such judgment,
decree, or order shall continue unsatisfied and in effect for a period of 20
consecutive days without being vacated, discharged, satisfied, or stayed pending
appeal.
          (H) Insolvency. The Company or any Subsidiary shall: (i) become
insolvent or shall generally not, or shall be unable to, or shall admit in
writing its inability to, pay its debts as they come due; or (ii) suspend its
business operations or a material part thereof or make an assignment for the
benefit of creditors; or (iii) apply for, consent to, or acquiesce in the
appointment of a trustee, receiver, or other custodian for it or any of its
property or, in the absence of such application, consent, or acquiescence, a
trustee, receiver, or other custodian is so appointed; or (iv) commence or have
commenced against it any proceeding under any bankruptcy, reorganization,
arrangement, readjustment of debt, dissolution, or liquidation Law of any
jurisdiction.

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          (I) Material Adverse Change. Any material adverse change occurs, as
reasonably determined by FCW, in the Company’s financial condition, results of
operation, or ability to perform its obligations hereunder or under any
instrument or document contemplated hereby.
     SECTION 19. Remedies. Upon the occurrence and during the continuance of an
Event of Default or any Potential Default, FCW shall have no obligation to
continue to extend credit to the Company and may discontinue doing so at any
time without prior notice. For all purposes hereof, the term “Potential Default”
means the occurrence of any event which, with the passage of time or the giving
of notice or both would become an Event of Default. In addition, upon the
occurrence and during the continuance of any Event of Default, FCW may, upon
notice to the Company, terminate any commitment and declare the entire unpaid
principal balance of the loans, all accrued interest thereon, and all other
amounts payable under this Term Loan Agreement, all Supplements, and the other
Loan Documents to be immediately due and payable. Upon such a declaration, the
unpaid principal balance of the loans and all such other amounts shall become
immediately due and payable, without protest, presentment, demand, or further
notice of any kind, all of which are hereby expressly waived by the Company. In
addition, upon such an acceleration:
          (A) Enforcement. FCW may proceed to protect, exercise, and enforce
such rights and remedies as may be provided by this Term Loan Agreement, any
other Loan Document or under Law. Each and every one of such rights and remedies
shall be cumulative and may be exercised from time to time, and no failure on
the part of FCW to exercise, and no delay in exercising, any right or remedy
shall operate as a waiver thereof, and no single or partial exercise of any
right or remedy shall preclude any other or future exercise thereof, or the
exercise of any other right. Without limiting the foregoing, FCW may hold and/or
set off and apply against the Company’s obligations to FCW any cash collateral
held by FCW, or any balances held by FCW for the Company’s account (whether or
not such balances are then due).
          (B) Application of Funds. FCW may apply all payments received by it to
the Company’s obligations to FCW in such order and manner as FCW may elect in
its sole discretion.
          In addition to the rights and remedies set forth above: (i) if the
Company fails to make any payment to FCW when due, then at FCW’s option in each
instance, such payment shall bear interest from the date due to the date paid at
4% per annum in excess of the rate(s) of interest that would otherwise be in
effect on that loan; and (ii) after the maturity of any loan (whether as a
result of acceleration or otherwise), the unpaid principal balance of such loan
(including without limitation, principal, interest, fees and expenses) shall
automatically bear interest at 4% per annum in excess of the rate(s) of interest
that would otherwise be in effect on that loan. All interest provided for herein
shall be payable on demand and shall be calculated on the basis of a year
consisting of 365 days.
     SECTION 20. Broken Funding Surcharge. Notwithstanding any provision
contained in any Supplement giving the Company the right to repay any loan prior
to the date it would otherwise be due and payable, the Company agrees to provide
three Business Days’ prior written notice for any prepayment of a fixed rate
balance and that in the event it repays any fixed rate balance prior to its
scheduled due date or prior to the last day of the fixed rate period applicable
thereto (whether such payment is made voluntarily, as a result of an
acceleration, or otherwise), the Company will pay to FCW a surcharge in an
amount equal to the greater of: (i) an amount as provided for under any
Subsequent Disclosure as defined under Section 6(A) of this Term Loan Agreement;
(ii) an amount which would result in FCW being made whole (on a present value
basis) for the actual or imputed funding losses incurred by FCW as a result of
any prepayment; or (iii) $300.00.
     SECTION 21. Complete Agreement, Amendments. This Term Loan Agreement, the
Note, and all other instruments and documents contemplated hereby and thereby,
are intended by the parties to be a complete and final expression of their
agreement. Except for documents and instruments specifically referenced herein,
this Term Loan Agreement constitutes the entire agreement between the Company
and FCW with regard to the subject matter hereof and supersedes all prior
agreements, representations, and understandings of the parties No amendment,
modification, or waiver of any provision hereof or thereof, and no consent to
any departure by the Company herefrom or therefrom, shall be effective unless
approved by FCW and contained in a writing signed by or on behalf

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of FCW, and then such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given. Additionally, any
headings used in this Term Loan Loan Agreement are inserted only as a matter of
convenience and for reference, and in no way define, limit or describe the scope
or intent of any term or provision. As used herein, the word “including” means
“including without limitation” and/or “including but not limited to”.
     SECTION 22. Applicable Law. Except to the extent governed by applicable
federal law, this Term Loan Agreement and the Note shall be governed by and
construed in accordance with the laws of the State of California, without
reference to choice of law doctrine. The parties consent to personal
jurisdiction in the federal and state courts located in the State of California
and waive all rights to have any dispute arising under or in connection with the
Term Loan Agreement to be heard in any other jurisdiction. The parties consent
to venue in the State Courts of California located in the County of Tulare and
in the federal courts in the Eastern District of California in connection with
any disputes arising under or in connection with the Term Loan Agreement.
     SECTION 23. Notices. All notices hereunder shall be in writing and shall be
deemed to be duly given upon delivery if personally delivered or sent by
facsimile transmission, or 3 days after mailing if sent by express, certified or
registered mail, to the parties at the following addresses (or such other
address for a party as shall be specified by like notice):

     
If to FCW, as follows:
  If to the Company, as follows:
 
   
Farm Credit West, PCA
  Calavo Growers, Inc.
2929 W. Main Street, Suite A
  Attn: Vice President-Finance
Visalia, CA 93291-5700
  1141-A Cummings Road
Attention: James Neeley
  Santa Paula, CA 93060
Fax No.: 559-627-4728
  Fax No: (805) 921-3232

     SECTION 24. Taxes and Expenses. To the extent allowed by law, the Company
agrees to reimburse FCW promptly upon demand for all costs and expenses,
including without limitation reasonable attorneys’ fees and expenses (including
the fees of FCW’s inside counsel), expended or incurred by FCW in connection
with the administration, collection, and enforcement of this Term Loan Agreement
and the other Loan Documents, including, without limitation in connection with
any arbitration, judicial reference, legal action or otherwise in connection
with (i) the amendment and enforcement of the Term Loan Agreement and the other
Loan Documents, including without limitation during any workout, attempted
workout, and/or in connection with the rendering of legal advice as to FCW’s
rights, remedies and obligations under the Term Loan Agreement and the other
Loan Documents, whether or not any form of legal proceeding is commended,
(ii) collecting any sum which becomes due FCW under the Term Loan Agreement or
any of the other Loan Documents, (iii) any proceeding for declaratory relief,
any counterclaim to any proceeding, or any appeal, (iv) the protection,
preservation or enforcement of any rights or remedies of FCW, whether or not any
form of legal proceedings is commenced, or (v) any action necessary to defend,
protect, assert, or preserve any of FCW’s rights or remedies as a result of or
related to any case or proceeding under Chapter 11 of the United States Code, as
amended, or any similar law of any jurisdiction. All of such costs and expenses
shall bear interest from the time of demand at the rate then in effect under the
Note.
     SECTION 25. Effectiveness and Severability. This Term Loan Agreement shall
continue in effect until: (i) all indebtedness and obligations of the Company
under this Term Loan Agreement, the Note, and all other Loan Documents shall
have been paid or satisfied; and (ii) FCW has no commitment to extend credit to
or for the account of the Company hereunder. Any provision of this Term Loan
Agreement or any other Loan Document which is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof or thereof.
     SECTION 26. Successors and Assigns. This Term Loan Agreement, the Note, and
the other Loan Documents shall be binding upon and inure to the benefit of the
Company and FCW and their respective successors

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and assigns, except that the Company may not assign or transfer its rights or
obligations under this Term Loan Agreement, the Note or any other Loan Document
without the prior written consent of FCW.
     SECTION 27. Participations. From time to time, FCW may sell to one or more
banks, financial institutions or other lenders a participation in all or a
portion of the Commitment or other extensions of credit made pursuant to this
Term Loan Agreement. However, no such participation shall relieve FCW of any
commitment made to the Company hereunder, or any obligation FCW may have to pay
patronage due the Company from FCW under the provisions of the bylaws of FCW and
its practices and procedures related to patronage distribution. In connection
with the foregoing, FCW may disclose information concerning the Company and its
Subsidiaries to any participant or prospective participant, provided that such
participant or prospective participant agrees to keep such information
confidential. A sale of participation interest may include certain voting rights
of the participants regarding the Commitment hereunder (including without
limitation the administration, servicing and enforcement thereof). FCW agrees to
give written notification to the Company of any sale of participation interests.
     IN WITNESS WHEREOF, the parties have caused this Term Loan Agreement to be
executed by their duly authorized officers as of the date shown above.

                  FARM CREDIT WEST, PCA   CALAVO GROWERS, INC., a California    
    Corporation
 
               
By:
  /s/ Mark Littlefield   By:       /s/ Arthur J. Bruno              
 
              Arthur J. Bruno,
Title:
  Sr. Vice President   Title:       Chief Financial Officer & Secretary
 
               
 
               
 
      By:       /s/ Scott H Runge              
 
              Scott H. Runge,
 
      Title       Treasurer

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EXHIBIT A
PROMISSORY NOTE

$13,000,000.00   July 1, 2005

     FOR VALUE RECEIVED, on the Maturity Date as set forth in that certain Term
Loan Agreement dated July 1, 2005, or in any amendments thereto (the “Term Loan
Agreement”), the undersigned promises to pay to the order of Farm Credit West,
PCA (the “Payee”), or order, at the place and in the manner set forth under
Repayment Terms below and in accordance with the Term Loan Agreement, the
principal amount of THIRTEEN MILLION DOLLARS ($13,000,000.00).
     This note is given for advances to be made by Payee to the undersigned from
time to time in accordance with the terms and conditions of the Term Loan
Agreement, all the terms and conditions of which are incorporated herein by
reference. Advances, accrued interest, and payments shall be posted by the Payee
upon an appropriate accounting record, shall be prima facie evidence as to all
such amounts and shall be binding on the undersigned absent manifest error. The
total of such advances may not exceed the face amount of this note.
     Repayment Terms: The undersigned shall pay to Payee, One Hundred Twenty
(120) monthly interest only payments in the amount billed, beginning on
August 01, 2005; and Nine (9) Annual installments of principal only, in the
amount of $1,300,000.00, beginning on July 01, 2006, plus a final installment of
any amount necessary to pay the Commitment in full. This note may be prepaid in
whole or in part at any time and in any amount during the term of this note,
unless limited or prohibited herein or in the Term Loan Agreement or unless
otherwise required by FCW in writing. Any prepayment will be subject to
applicable broken funding surcharges as defined in the Term Loan Agreement. This
note is due and payable in full on July 01, 2015 (“Maturity Date”), at which
time the undersigned shall pay the unpaid principal balance and all accrued
interest in full. Any amount of principal hereof which is not paid when due,
whether at stated maturity, by acceleration or otherwise, shall bear interest
from the date when due until said principal is paid in full, payable on demand,
at a rate per annum set forth in the Term Loan Agreement.
     The makers or endorsers hereof hereby waive presentment for payment,
demand, protest, and notice of dishonor and nonpayment of this note, and all
defenses on the ground of delay or of any extension of time for the payment
hereof which may be hereafter given by the holder or holders hereof to them or
either of them or to anyone who has assumed the payment of this note, and it is
specifically agreed that the obligations of said makers or endorsers shall not
be in anyway affected or altered to the prejudice of the holder or holders
hereof by reason of the assumption of payment of the same by any other person or
entity.
     The undersigned hereby promises to pay all costs and expenses of any
rightful holder hereof incurred in collecting the undersigned’s obligations
hereunder or in enforcing or attempting to enforce any of such holder’s rights
hereunder, including reasonable attorneys’ fees and disbursements, whether or
not an action is filed in connection therewith.
     THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF CALIFORNIA. REPRESENTATIVES OF FCW ARE NOT
AUTHORIZED TO MAKE ANY ORAL AGREEMENTS OR ASSURANCES. DO NOT SIGN THIS NOTE IF
YOU BELIEVE THAT THERE ARE ANY AGREEMENTS OR UNDERSTANDING BETWEEN YOU AND FCW
THAT ARE NOT SET FORTH IN WRITING IN THIS NOTE, THE TERM LOAN AGREEMENT OR OTHER
LOAN DOCUMENTS EVIDENCING THE COMMITMENT.

              CALAVO GROWERS, INC.
 
       
 
  By        /s/ Arthur J. Bruno
 
       
 
           Arthur J. Bruno

 
           Chief Operating Officer
 
                [Printed name and title]

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