Exhibit 10.1

 

Filing Ref. Limoneira Company Customer Number: 0005229057

 

MASTER LOAN AGREEMENT

 

This Master Loan Agreement is established as of June 19, 2017 between Farm
Credit West, PCA a corporation organized and existing under the laws of the
United States of America, with its office at 2031 Knoll Drive, Ventura, CA 93003
(“Lender”) and Limoneira Company, a Delaware Corporation (“Borrower”). This
Agreement shall remain in effect until all Indebtedness is paid in full and the
Agreement is terminated in writing by Lender.

 

1.      MASTER LOAN AGREEMENT. On this date, and hereafter, Lender may make
Loans to Borrower. Borrower and Lender (collectively, the “Parties”) enter into
this Master Loan Agreement which, together with the applicable Supplement(s) and
other Loan Documents, shall govern each separate Loan and all Indebtedness
between the Parties. Unless stated to the contrary elsewhere, the provisions of
all Loan Documents are incorporated by reference herein. For value received,
Borrower promises to pay to order of Lender all Indebtedness governed by this
Agreement.

 

1.1SUPPLEMENTS. Loans made on and after the date of this Master Loan Agreement
will be evidenced by a “Promissory Note and Supplement to Master Loan Agreement”
(“Supplement”). Each Supplement shall set forth the terms and conditions
applicable to each Loan. All Supplements and attachments thereto, including all
amendments, renewals, and restatements thereof, are incorporated by reference
herein unless the contrary is stated in any Loan Document. In any conflict of
terms between this Master Loan Agreement and any Supplement, the Supplement
shall control, unless the contrary is stated in the Supplement. Any amendment to
this Master Loan Agreement shall control all Supplements, unless the contrary is
stated in the amendment.

 

1.2FUTURE CREDIT ACCOMMODATIONS. Borrower may apply for future loans, renewals
of unpaid balances, refinancings, reschedulings, or other credit accommodations.
Each loan application Borrower submits will be evaluated for eligibility and
creditworthiness at the time of its submission. The proceeds of each Loan shall
be used primarily for business and agricultural purposes and not for personal,
family or household purposes as further described in each loan application of
Borrower or as otherwise approved by Lender. Nothing in this Agreement or any
other agreement between Borrower and Lender shall be construed to obligate
Lender to restructure or renew any unpaid balance, any part thereof, or to make
any additional or future loans or financial accommodations to Borrower.

 

2.      DEFINED TERMS. “Indebtedness” means all Loans, advances, obligations,
and duties of any kind owing by Borrower to Lender under this Agreement whether
now existing or hereafter arising, absolute or contingent, due or to become due,
and whether or not evidenced by any writing, this Agreement or any other Loan
Document, and including all interest, charges, fees, attorney’s fees, expenses,
and any other sum(s) chargeable to Borrower under this or any other related
agreement. “Loan” or “Account” means each loan, credit facility or other
obligation evidenced by any Supplement. “Agreement” means this Master Loan
Agreement, including all Supplements, attachments and other agreements
incorporated by reference and all amendments, modifications, and restatements
thereof. “Loan Document” means this Agreement, and any Supplement, guaranty,
Security Instrument, and any other documents or agreements executed in
connection with this Agreement, any Loan or the Indebtedness, and all
amendments, modifications, renewals and restatements thereof.

 

2.1OTHER LOANS WITH LENDER. Unless stated to the contrary in writing by Lender,
in this or any other document, this Master Loan Agreement shall not govern other
notes, loan agreements, loans, and obligations by Borrower to Lender not
contained in Supplements hereto. Such other loans shall continue to be governed
by the applicable loan documents. This Agreement shall not waive any right(s) in
any note, guaranty, security instrument or indebtedness between the Parties
unless the same has been specifically waived in writing by Lender.

 

3.      SECURITY. All Indebtedness is secured by a first lien on Borrower-owned
stock or participation certificates required by Lender’s bylaws, any funds of
Borrower maintained with Lender, Lender's allocated surplus, and the real
property described in that certain deed of trust between Borrower and Lender
dated June 19, 2017 to be recorded in Tulare and Ventura Counties, as may be
amended from time to time (“Deed of Trust”), (collectively “Collateral”), which
secure this Loan under any Loan Document or applicable laws, rules, ordinances,
permits and regulations of all local, regional, county, state and federal
governmental authorities (“Applicable Laws”). Collateral may secure more than
one Loan when so indicated. All liens and interests in Collateral will be
evidenced by the appropriate Security Instrument granting such interest.
“Security Instrument” means any deed of trust, mortgage, security agreement,
assignment or other document granting Lender a security interest in, any real or
personal property as security for this Agreement, any Loan or the Indebtedness.

 

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Filing Ref. Limoneira Company Customer Number: 0005229057

 

4.      DEFAULT. A default on any Supplement or the Indebtedness is a default on
this Master Loan Agreement. A default on this Master Loan Agreement or any
Supplement shall, at Lender’s option, also be a default on all Supplements and
all the Indebtedness. Borrower is in default on this Master Loan Agreement,
including any Supplement, under any one or more of the following (individually
and collectively called an “Event of Default”): (a) Borrower fails to pay when
due any Indebtedness; (b) Borrower is declared to be in default on this
Agreement, any other Loan Document, or on any other loan or obligation of
Borrower to Lender or in which Lender has an interest; (c) Borrower breaches any
term, or representation in this Agreement or in any other Loan Document for this
or any other loan by Lender; (d) Borrower's representation(s) to Lender in
connection with any loan are materially false or misleading; (e) Borrower's
dissolution, or termination of existence; (f) Borrower's insolvency, business
failure, application for or consent to appointment of a receiver/custodian or
trustee for itself or any of its assets, or an assignment to an agent authorized
to liquidate any substantial amount of assets, or an assignment for the benefit
of creditors by, or commencement of any proceeding under any bankruptcy or
insolvency law by or against Borrower; (g) Any judgment, writ, levy, lien,
attachment, notice of tax lien, tax lien, or similar process is entered against
Borrower or any of Borrower's properties and is not vacated, bonded, or stayed
to the satisfaction of Lender; or (h) Borrower sells, leases, encumbers,
transfers, or enters into any agreement for the sale, lease, encumbrance,
transfer or nonuse of any water or water rights, or “Water Asset”, as such may
be defined in any deed of trust, security agreement or other agreement relating
to the pledge of water or water rights.

  

5.      REMEDIES. If an Event of Default occurs, Lender shall have all rights,
and remedies under this Agreement, any other Loan Document, or provided by law
or equity under Applicable Laws, including but not limited to: the right to
declare, at Lender’s option, all or any portion of the Indebtedness immediately
due and payable without prior recourse to the Collateral; Lender’s right to
immediately terminate Borrower’s right to draw additional funds, and/or suspend
or reduce Borrower’s credit or credit limit; and retire Borrower’s stock or
participation certificates issued by Lender at book value and apply the proceeds
plus any related accrued dividends and any patronage payments to which Borrower
is entitled, to all or any part of the Indebtedness, all without notice to
Borrower; and the right to foreclose on, or enforce any security interest in,
any Collateral (all above collectively, “Remedies”). All Lender’s Remedies: (a)
may be exercised at any time by Lender, after an Event of Default; (b) are
cumulative and not exclusive; and (c) shall be in addition to any other rights
or remedies provided by law or equity. Lender may enforce any security interest
or lien in such manner and order, as to all or any part of the Collateral as
Lender, in its sole judgment, deems appropriate. Borrower, to the extent
possible, waives all rights, obligations, or defenses now or hereafter
established by law relating to the Remedies.

 

5.1ACCELERATION. If an Event of Default occurs, Lender may, at its option,
declare all or any portion of the Indebtedness to be immediately due and payable
without demand, notice of non-payment, protest or prior recourse to Collateral,
and terminate or suspend Borrower’s right to draw or request funds on any Loan
or line of credit.

 

5.2WAIVER. Lender’s failure to require strict compliance with any provision of
this Agreement or any other agreement between Lender and Borrower shall not
affect Lender’s right to require strict compliance with such provision. Lender’s
waiver of an Event of Default shall not affect any other Event of Default or any
of Lender’s remedies with respect thereto. Lender’s waiver or suspension of any
rights under this or any other agreement, or Lender’s grant of any consent to
Borrower, shall be effective only if such waiver or consent is in writing and
only to the extent set forth in such writing.

 

6.BORROWER'S COVENANTS AND REPRESENTATIONS. In addition to representations in
other Loan Documents, Borrower makes the following representations to Lender
which remain in effect until all Indebtedness is repaid in full:

 

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Filing Ref. Limoneira Company Customer Number: 0005229057

 

6.1INFORMATION. All information, including, financial statements and profit and
loss information furnished by Borrower to Lender are accurate and complete;
there has not been any material adverse change in the financial condition of
Borrower since the date of the last financial statement provided; Borrower has
no material liabilities, fixed or contingent, which are not fully shown in said
financial statements as of the date thereof.

 

6.2SOLVENCY. Borrower has sufficient capital to carry on the business and is
able to pay debts as they mature, and Borrower is paying such debts. Borrower
owns good and marketable title to all property reflected in the financial
information provided to Lender, the fair market value of which exceeds the
dollar amount required to pay Borrower's debts.

 

6.3COMPLIANCE WITH LOAN TERMS. Borrower is in compliance with, all terms of all
Borrower's other loans and obligations to all other creditors if any, and all
other loans and obligations to Lender.

 

6.4LEGAL ENTITY WARRANTY AND CERTIFICATION. If Borrower is a legal entity,
Borrower (and any person signing this Agreement in a representative capacity on
behalf of Borrower) represents that Borrower is duly constituted under and
conducting its business operations in compliance with all Applicable Laws and in
good standing; that Borrower has the authority, and appropriate authorization to
enter into this Agreement, all Security Instruments and any other Loan Document
in connection with any Loan; that when executed this Agreement, all Security
Instruments and any other Loan Document shall be valid and legally binding on
Borrower. If the Borrower is a trust, each trustee executing this Agreement on
behalf of the trust also represents, that this Agreement, all Security
Instruments and other Loan Documents are being executed by all the currently
acting trustees of the trust and that the trust has not been revoked, modified,
or amended in any manner which would cause any of the foregoing to be incorrect.

 

6.5INDEMNITY. Borrower releases, indemnifies and agrees to hold Lender harmless
from any losses, claims, liabilities damages and related expenses, including
reasonable attorneys’ fees and costs, incurred by or asserted against Lender
that arise from: (1) the release, threatened release, discharge, manufacture,
use, storage, transportation or presence of any hazardous substance in
connection with the business of Borrower or on any real property owned or
occupied by Borrower, whether or not pledged as security for this Agreement or
(2) the execution of this Agreement and any other Loan Documents or the
transactions contemplated thereunder or (3) the Indebtedness or use of proceeds
therefrom or (4) the unauthorized disbursement of funds or misappropriation of
proceeds under this Agreement by any employee, agent, independent contractor,
affiliate or guarantor of Borrower. This indemnity covers Lender and its
affiliates and their officers, directors, agents, and attorneys of Lender, and
extends to attorneys' fees and other costs and expenses incurred by Lender and
its affiliates in connection with the foregoing. The term "hazardous substance"
shall mean any material or substance which is now or hereafter considered
"hazardous" or "toxic" under any Applicable Laws. This indemnity shall be
construed as being in addition to any similar provision in any Security
Instrument. NOTWITHSTANDING ANY OTHER PROVISION OF THIS AGREEMENT OR THE OTHER
LOAN DOCUMENTS, THIS INDEMNITY SHALL SURVIVE REPAYMENT OF THE INDEBTEDNESS.

 

6.6TAXES. Borrower has filed all tax returns required to be filed and has paid
all taxes, assessments, and governmental charges and levies thereon, including
interest and penalties.

 

6.7NO DEFAULT. Borrower has not received any notification of default under any
of its agreements with third parties that might impair the operations or
financial condition of Borrower.

 

7.      SPECIAL LOAN CONDITIONS, COVENANTS AND REQUIREMENTS. In addition to any
requirements described in other Loan Documents, Borrower covenants and agrees
with Lender as follows:

 

7.1FINANCIAL PERFORMANCE.

 

  7.1.1  No other financial performance covenants are imposed at this time
except as provided in Section 31.2.

  

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Filing Ref. Limoneira Company Customer Number: 0005229057

  

7.2INSURANCE. Borrower shall provide, maintain and deliver to Lender, fire and
extended coverage, flood and any and all other types of insurance in terms and
amounts as may be required by law or Lender from time to time, with loss payable
endorsements solely in favor of Lender or, for real property secured loans,
naming Lender as mortgagee.

 

7.3     

FINANCIAL INFORMATION. At Lender's request, Borrower shall provide to Lender
financial information in a form acceptable to Lender, including, when so
required, a current balance sheet and income statement. In the case of multiple
Borrowers, financial information must be provided for each Borrower as requested
by Lender.

 

Financial Information shall be provided as described below:

        7.3.1 Financial information shall be provided at such times during the
term of this Agreement as Lender may request.     7.4     
ENVIRONMENTAL.  Borrower shall comply with the following additional
requirements:       7.4.1 No other environmental requirements are imposed at
this time unless provided elsewhere herein or in other Loan Documents.    
7.5      NEGATIVE COVENANTS.  Borrower will not take any of the following
actions without the prior written approval of Lender during the term of this
Agreement and until all Loans are paid in full:                        7.5.1  
Mortgage, pledge, lease for a period exceeding five years or otherwise make or
allow the filing of a lien on any Collateral.         7.5.2 Become a guarantor
or surety on or otherwise become liable for, the debts or obligations of any
third party person, or any entity, with the exception of guaranteeing a proposed
debt for Limoneira Lewis Community Builders LLC, to develop that certain “East
Area 1” project in to salable lots..         7.5.3 Obtain credit or loans other
than trade credit customary in Borrower's business.         7.5.4 Dispose of all
or a substantial portion of Borrower's business assets by sale, transfer, lease,
gift, abandonment or otherwise, except for sales of inventory in the ordinary
course of business.         7.5.5 Sell Borrower's business, abandon or cease or
materially change its business operations, or merge or consolidate with any
third party or entity.               

7.6CONDITIONS PRECEDENT. Lender’s obligation to make the initial Loan and any
other Loans thereafter, if any, is subject to the satisfaction, in Lender’s sole
discretion, of the following conditions precedent:

 

7.6.1Lender shall have received evidence that all Loan Documents have been duly
authorized and executed;    

7.6.2Lender shall have received evidence, including without limitation, any
title insurance and/ or endorsements, estoppel certificates or subordination
agreements, that may be required by Lender, that the liens granted to Lender
under the Security Instruments are enforceable and with the lien priority
required by Lender;    

7.6.3All representations and warranties of any party to the Loan Documents,
other than Lender, are true and correct; and    

7.6.4Lender has received all other documents, certificates, approvals,
information, and fees requested by Lender.

 

8.      INTENTIONALLY OMITTED.

 

9.      INSPECTION AND ACCESS. While this Agreement is in effect, Borrower will:
(a) at Lender's request, furnish information to Lender relating to Borrower's
business and financial affairs, (b) permit Lender to examine Borrower's books
and records; and (c) allow Lender to inspect and appraise Lender's Collateral at
reasonable times and places.

 

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Filing Ref. Limoneira Company Customer Number: 0005229057

  

10.     REQUIRED ACTIONS. While this Agreement is in effect, Borrower will: (a)
maintain all other Loans with Lender in a current status; (b) comply with all
terms of all other documents executed in connection with this Agreement; and (c)
execute, deliver, file and or record such documents, or take such other actions,
as may be reasonably required by Lender or to assure the enforceability of the
Indebtedness, Note or any Security Instrument, Loan Document or to otherwise
protect or enforce the rights of Lender thereunder.

 

11.     MISCELLANEOUS COSTS. Lender may, but is not required to pay: (a) the
reasonable cost of any services requested by Borrower and rendered by Lender
such as credit life insurance or crop or property insurance; (b) any amounts
required to satisfy taxes, assessments or liens on the Collateral, to maintain
insurance, or to perform any other obligation under this Agreement or other Loan
Documents; (c) all costs and expenses, including attorneys’ fees, incurred in
connection with the preparation or administration of any Loan; (d) any bill of
sale, sight or expense drafts drawn by Borrower and presented to Lender for
payment of purchases or expenses authorized by Lender; and (e) charges by
suppliers of goods or services included in any budget for which Borrower borrows
funds hereunder. Lender may, at its option, add such amounts to any portion of
the Loan, and charge interest on such amounts at the interest rate applicable to
the Loan.

 

12.     TRANSFER BY LENDER. Lender may sell, transfer or assign this Agreement
or any portion thereof, and deliver to the transferee(s) ("Holder") all or any
portion of the Collateral, and the Holder shall thereupon become vested with all
rights herein given to Lender with respect thereto and at such time “Lender”
hereunder shall include the "Holder"; and Lender shall thereafter be fully
discharged from any liability to Borrower, but Lender shall retain all rights
hereby with respect to any Collateral not so transferred, sold or assigned.

 

13.    FEES AND CHARGES OF ATTORNEYS AND OTHERS. If Lender utilizes the services
of attorneys, accountants, appraisers, consultants, or other professional or
outside assistance, including the services of in-house counsel any professional
who is an employee of Lender, the reasonable amount of fees, costs and expenses
(“Expenses”) incurred by Lender to utilize such persons in connection with any
of the following or as indicated elsewhere in this Agreement shall be payable by
Borrower on demand and Lender may, at its option, add the amount of such
Expenses to any portion of the Indebtedness, plus an appropriate amount of stock
or participation certificates as required by federal law or regulation or
Lender’s bylaws, and charge interest on such amount at the interest rate
applicable to such portion of the Indebtedness:

 

(a)The preparation, modification or enforcement of this Agreement and any other
agreement or Loan Document related to the Indebtedness or to the Collateral;

(b)Advising Lender concerning its rights and obligations under this Agreement
and any other agreement or Loan Document related to the Indebtedness, or to the
Collateral, including advising Lender with regard any applicable, provisions of
the Farm Credit Act of 1971, as amended, Farm Credit Administration regulations,
any policy or program of Lender, or any other Applicable Laws;

(c)Any litigation, dispute, proceeding, or action (whether terminated or
dismissed prior to judgment, reduced to judgment or otherwise finally resolved),
and whether instituted by Lender, Borrower or any other person, relating to this
Agreement, the Indebtedness or any Loan, any other Loan Document, the Collateral
or Borrower’s affairs;

(d)Lender’s interest in any bankruptcy, insolvency, or reorganization case or
proceeding instituted by or against Borrower, including any steps to (i) modify
or terminate the automatic stay, (ii) prohibit or condition Borrower’s use of
cash Collateral, (iii) object to any disclosure statement or plan, (iv) propose
or confirm a plan, and (v) prosecute or defend adversary proceedings or
contested matters, and take or defend examinations or discovery, whether related
to any adversary proceeding or contested matter, whether terminated or dismissed
prior to judgment, reduced to judgment or otherwise finally resolved;

(e)The inspection, verification, protection, collection, processing, or
disposition of the Collateral; and

(f)Any of the type of Expenses incurred by Lender in connection with any
guaranty of the Indebtedness.

 

The Expenses shall be in addition to those in any Security Instrument, other
Loan Document or any other written agreement between Lender and Borrower.

 

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Filing Ref. Limoneira Company Customer Number: 0005229057

 

14.    TRANSACTION SUMMARY. All disbursements and repayments shall be posted on
Lender's accounting records. In its sole discretion, Lender may apply any
payment received from or on behalf of Borrower and any proceeds of Collateral
first to fees, and any other costs incurred by Lender and payable by Borrower
under Section 13 of hereunder , then to interest, principal, or any part of the
Indebtedness,. Any payment received by Lender after Lender has closed its books
for the day will be applied on the next business day. Periodically, Lender shall
send Borrower a transaction summary, statement or a similar loan accounting. If
Borrower fails to object to this accounting in writing within 30 days of its
mailing by Lender, Borrower shall have waived any right to object to the
accounting’s accuracy and the accounting may be admitted into evidence by Lender
to establish the balance due Lender in any legal proceeding between the parties.

 

15.    NOTICES. Borrower shall promptly give written notice to Lender of: (a)
any enforcement action brought against Borrower by any governmental regulatory
body or law enforcement authority or any dispute between Borrower and any such
authority or body; (b) any material pending or threatened litigation or court
proceeding against Borrower; (c) any material adverse change in Borrower's
business or financial condition; (d) the occurrence of any Event of Default, or
any event that with a lapse of time or the giving of notice or both would become
an Event of Default under any obligation of Borrower to Lender or in which
Lender has an interest; (e) any default on loans or credit arrangements with any
other creditors; (f) any location change or new location of Borrower’s office or
site of operation; (g) any change to an out of state location for any
Collateral; and (h) any restriction, suspension, or other change in any
permit(s), license(s) or authority(ies) required to conduct Borrower's business.

 

15.1Any notice under this Agreement or any other Loan Documents shall be in
writing and delivered to the address below if to Borrower and to the address
specified in the first paragraph of this Agreement if to Lender. Any notice
shall be deemed effective upon on the earlier of: (a) actual receipt of the
intended recipient, or (b) upon delivery, if delivered in person or by any
nationally recognized courier service that provides proof of delivery, or (c)
four business days after deposit in the U.S. mail, postage prepaid, whether by
first class mail or by certified mail. Either party may change its address for
purposes of receiving notice upon delivery to the other party of a change of
address in accordance with the terms hereof. Borrower agrees to keep Lender
informed of Borrower’s current address for notice purposes.

 

16.    LOAN CHARGES. To the extent the interest or other loan charges collected
or to be collected in connection with this Agreement exceed the permitted limits
under applicable usury laws, then: (a) any such loan charge shall be reduced by
the amount necessary to reduce the charge to the permitted limit; and (b) any
sums already collected which exceeded permitted limits will be refunded to
Borrower, without interest thereon. Lender may choose to make this refund by
reducing the principal Borrower owes under this Agreement or by making a direct
payment to Borrower. If a refund reduces principal, the reduction will be
treated as a partial prepayment.

 

17.    BORROWER'S AUTHORITY AND ADDITIONAL REPRESENTATIONS. By signing this
Agreement, Borrower represents that the terms of this Agreement, any other Loan
Document and Security Instrument do not conflict with the terms of any other
contract(s) of Borrower; that Borrower's representations in this Agreement are
true and accurate; that there is no judgment or pending lawsuit, tax claim,
investigation or other dispute against or threatened against Borrower or the
Collateral that might impair Borrower's financial condition or ability to
continue business or the Collateral; and that Borrower is qualified and/or
licensed to do business in all states requiring Borrower to be so qualified or
licensed and is in compliance with all Applicable Laws.

 

18.    INTENTIONALLY OMITTED.

 

19.    INTENTIONALLY OMITTED.

 

19.1BORROWER FURTHER AGREES. Borrower agrees that Lender may, in its sole
discretion, at any time, without notice, release all or any part of the
Collateral securing the Indebtedness grant extensions, change terms of payment,
deferments, renewals or reamortizations of any part of the Indebtedness, and
release from personal liability any one or more of the parties who are or may
become liable for the Indebtedness; all without affecting the personal liability
of any other party. Borrower also severally waives any other defense or right of
offset against the Holder hereof. No Borrower shall have any right of
subrogation, contribution, reimbursement, indemnity, set off, or other recourse
and waives the benefit of, or any right to participate in, any Collateral until
such time as all of the obligations owed by Borrower under this Agreement shall
have been satisfied in full. Each Borrower, to the extent it may lawfully do so,
waives any defense under California anti-deficiency statutes, or comparable
provisions of the laws of any other state to the recovery of a deficiency after
a foreclosure sale of such property.

 

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Filing Ref. Limoneira Company Customer Number: 0005229057

 

19.2BORROWER ADDITIONAL REPRESENTATIONS. Borrower represents to Lender that it
has established adequate means of obtaining from each other Borrower, on a
continuing basis, information pertaining to the businesses, operations and
conditions (financial or otherwise) of each other Borrower and its properties,
and each Borrower now is and will be familiar with the businesses, operations
and conditions (financial or otherwise) of each other Borrower and its
properties. Each Borrower waives and relinquishes any duty on the part of Lender
(if such duty exists) to disclose to any Borrower any matter, or fact related to
the businesses, operations, or conditions (financial or otherwise) of any other
Borrower or its properties. Without limiting the generality of the foregoing,
each Borrower waives any defenses or rights arising under or of the kind
described in California Civil Code sections 2795, 2808, 2809, 2810, 2815, 2819
through 2825 (inclusive), 2832, 2839, and 2845 through 2850 (inclusive) and
similar laws in other jurisdictions.

 

20.       NO ORAL AGREEMENTS. The representatives of Lender are not authorized
to make any oral agreements or assurances. Do not sign this Agreement if you
believe that there are any agreements or understandings between you and Lender
that are not set forth in writing in this Agreement or the other Loan Documents.

 

21.       SUCCESSORS AND ASSIGNS. This Agreement, any Supplement and all other
Loan Documents are binding on Borrower’s and Lender’s successors and assignees.
Borrower shall not assign this Agreement any Loan or Loan Document without
Lender’s prior written consent. Lender may sell participations in or assign this
Agreement, and may exchange financial information about Borrower with actual or
potential participants or assignees. If a participation is sold or the Agreement
is assigned, the purchaser will have the right of set-off against Borrower.

 

22.      SEVERABILITY; COUNTERPARTS. If one or more of the provisions of this
Agreement, any Security Instrument or any other Loan Documents are held to be
invalid, or unenforceable in any respect, the validity, legality, and
enforceability of the remaining provisions shall not in any way be affected. To
the extent any waiver of a right by Borrower hereunder may be contrary to
applicable law, such waiver shall be deemed made to the extent allowed by such
law. This Agreement may be signed in one or more counterparts which shall
constitute one and the same Agreement. Only one such counterpart signed by the
party against whom enforceability is sought needs to be produced to evidence the
existence of this Agreement.

 

23.       CAPTIONS. Captions herein are only as a matter of convenience and for
reference, and in no way define, limit or describe the scope or intent of any
term. The word “including” herein means “including but not limited to”.

 

24.     APPLICABLE LAW. This Agreement and any other Loan Document shall be
governed by federal law to the extent applicable and except to the extent
specified in any Security Instrument, be governed by and construed under the
laws of the state specified in the address of Lender on page 1 without regard to
its conflict of laws principles. .

 

25.     ENTIRE AGREEMENT; AMENDMENTS MUST BE IN WRITING. This Agreement and all
other Loan Documents constitute the entire agreement between the Parties on the
subject matter hereof; superseding all prior communications, oral or written,
concerning the Indebtedness or any Loan. This Agreement does not supersede any
Loan Document(s) pertaining to other outstanding loan(s) of Borrower with Lender
except as specified herein. This Agreement may be amended or modified only by a
written instrument executed by Lender and Borrower.

 

26.     REPORTING HEDGING ACTIVITY. If Borrower is involved in any hedging
activities through the use of futures or options, using Loan proceeds, notice of
this activity must be provided to Lender. At Lender's discretion, a separate
tranche or separate loan may be established for the purpose of funding margin
calls related to the hedging activity. Lender may require Borrower to provide a
risk management or marketing plan in support of this activity. Lender may
require Borrower to execute a Security Agreement, Investment Property Control
Agreement or similar form of assignment or control agreement, as approved by
Lender, to be acknowledged by all brokers involved in Borrower's marketing and
hedging program. Any hedging activity, or use of futures or options markets, not
consistent with acceptable hedging practices, as determined by Lender in
Lender's sole discretion, shall be considered a material breach of the Note and
shall constitute an event of default.

 

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27.    WATER RIGHTS. Any grantor of a security interest in water rights to
Lender, including but not limited to a security interest under a deed of trust,
security agreement or similar instrument, shall not take any of the following
actions with respect to those water rights without the prior written consent of
Lender: sell, lease, pledge, transfer or otherwise encumber in any manner,
whether to another lender, irrigation district, or user, except that Borrower
may occasionally sell or lease water associated with the property described in
the Deed of Trust (“Property”) to neighboring property owners without the prior
written consent of Lender provided that the remaining water is sufficient to
satisfy all water requirements for the Property, including proper cultivation
for all trees and other permanent plantings thereon.

 

28.    DISCLOSURE AND INQUIRIES. By signing this Agreement, Borrower agrees that
Lender may disclose financial information to other Farm Credit System
institutions. Borrower further authorizes Lender from time to time, to make such
inquiries and gather such information as Lender deems necessary and reasonable
to administer the Indebtedness. Lender is also authorized from time to time to
make credit inquiries, verify credit, verify employment, and obtain credit
agency reports regarding Borrower and Borrower’s business.

 

29.       ADVICE OF COUNSEL. Borrower understands this Agreement and has
consulted with or had the opportunity to consult with an attorney or other
appropriate professional as to the terms hereof.

 

30.       WAIVER OF RIGHT TO TRIAL BY JURY. EACH PARTY IRREVOCABLY WAIVES, TO
THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL
BY JURY OF ANY CLAIM, DISPUTE ACTION, SUIT OR PROCEEDING, COLLECTIVELY
“ACTIONS”, DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT
OR ANY OTHER LOAN DOCUMENT (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE). EACH
PARTY AGREES THAT ANY ACTIONS SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY.
BORROWER ACKNOWLEDGES THIS WAIVER IS A MATERIAL INDUCEMENT FOR LENDER ENTERING
INTO THE LOAN DOCUMENTS.

 

30.1 JUDICIAL REFERENCE. IF THE JURY TRIAL WAIVER IS DEEMED UNENFORCEABLE THEN
EACH PARTY AGREES ALL ACTIONS SHALL BE RESOLVED BY JUDICIAL REFERENCE.  THE
PARTIES AGREE TO THE APPOINTMENT OF A SINGLE REFEREE, AND SHALL USE THEIR BEST
EFFORTS TO AGREE ON THE SELECTION OF A REFEREE.  IF THE PARTIES ARE UNABLE TO
AGREE, A REFEREE SHALL BE APPOINTED BY THE COURT TO HEAR ANY DISPUTES HEREUNDER
IN LIEU OF ANY SUCH JURY TRIAL.  EACH PARTY ACKNOWLEDGES AND AGREES THAT THE
APPOINTED REFEREE SHALL HAVE THE POWER TO DECIDE ALL ISSUES IN THE APPLICABLE
ACTION OR PROCEEDING, WHETHER OF FACT OR LAW, AND SHALL REPORT A STATEMENT OF
DECISION THEREON. NOTWITHSTANDING THE FOREGOING,  ANY MATTERS WHICH WOULD NOT
OTHERWISE BE THE SUBJECT OF A JURY TRIAL, SUCH AS A PROVISIONAL REMEDY DEFINED
IN CALIFORNIA CODE OF CIVIL PROCEDURE SECTION 1281.8, AS AMENDED, WILL BE
UNAFFECTED BY THIS WAIVER AND THE AGREEMENTS HEREIN.

 

31.    SPECIAL REPRESENTATIONS, WARRANTIES, CONDITIONS AND COVENANTS.

 

31.1REPORTING. In addition to any other financial information, which Borrower
has agreed to provide under the Note or Loan Documents, Borrower is required to
submit to Lender:

 

a)Quarterly Financials - As soon as possible, but no later than 60 days after
the January 31, April 30 and July 31 fiscal quarter-ends, Borrower is to provide
their SEC Form 10-Q financial statements, unless such statements are made
readily accessible to Lender for download from Borrower’s website or other
publically available sources.

 

b)Annual Financials - As soon as possible, but no later than 90 days after
October 31 fiscal year-end, Borrower is to provide to provide their SEC Form
10-K financial statements, unless such statements are made readily accessible to
Lender for download from Borrower’s website or other publically available
sources.

 

c)Budget - As soon as possible, but no later than 90 days after October 31
fiscal year-end, Borrower is to provide an annual budget and cash flow
projection or operating plan.

 

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Filing Ref. Limoneira Company Customer Number: 0005229057

 

31.2MINIMUM DEBT SERVICE COVERAGE RATIO. Borrower shall maintain at all times a
debt service coverage ratio, as determined in Lender’s sole discretion, greater
than or equal to 1.25:1 when measured with the October 31 SEC Form 10-K
financial statements for Limoneira Company, and annually thereafter during the
term. Debt Service Coverage Ratio means at any date of determination (i)
Adjusted EBITDA divided by (ii) the sum of (A) the current portion of long-term
liabilities paid or scheduled to be paid during the twelve months ending of such
date plus (B) interest expense for the preceding twelve months plus (C)
capitalized interest expense for the preceding twelve months. Adjusted EBITDA
means the sum of (a) net income after taxes and before extraordinary items in
accordance with generally accepted accounting principles (“GAAP”), plus (b)
interest expense deducted in determining such net income, plus (c) amortization
and depreciation expense deducted in determining such net income, plus (d)
income tax expense deducted in determining such net income, minus (e) dividends
and other withdrawals, minus (f) nonrecurring gains, plus (g) nonrecurring
losses, plus (h) non-cash expenses deducted in determining such net income.

  

ADDRESSES WHERE NOTICE TO BORROWER ARE TO BE SENT:

 

Limoneira Company, a Delaware Corporation, 1141 Cummings Road, Santa Paula, CA
93060

  

This Agreement has been duly executed on the day and year first written above.

 

 

Signature(s):           Limoneira Company, a Delaware Corporation          

 

 

By:  /s/ Harold S. Edwards                                          

Harold S. Edwards, President

 

 

 

By:  /s/ Joseph D. Rumley                                          

Joseph D. Rumley, Secretary

         

 

 

 

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