Unassociated Document



     

    
    

     

    
      Exhibit 10.3 

       

      STOCK PURCHASE AGREEMENT

       

      between 

       

      LIMONEIRA COMPANY

       

      and 

       

      CALAVO GROWERS, INC.

       

      June 1, 2005 

       

       

       

    


    
    

     

    

    
    

     

     

    
    

     

    
      TABLE OF CONTENTS

       

      
        	 	 	 	 	 
	 	 	Page	 
	
                ARTICLE 1
      DEFINITIONS

              	 	 	1	 
	
                 

              	 	 	 	 
	
                ARTICLE 2 PURCHASE AND SALE OF
      LIMCO SHARES

              	 	 	5	 
	
                 

              	 	 	 	 
	
                ARTICLE 3 PURCHASE AND SALE OF
      CALAVO SHARES

              	 	 	6	 
	
                 

              	 	 	 	 
	
                ARTICLE 4 PURCHASE AND SALE OF
      MISSION SHARES

              	 	 	6	 
	
                 

              	 	 	 	 
	
                ARTICLE 5 OFFICE
      LEASE

              	 	 	6	 
	
                 

              	 	 	 	 
	
                ARTICLE 6 FRUIT COMMITMENT
      AGREEMENT

              	 	 	7	 
	
                 

              	 	 	 	 
	
                ARTICLE 7 JOINT DEVELOPMENT OF
      PACKING HOUSE

              	 	 	7	 
	
                 

              	 	 	 	 
	
                ARTICLE 8 STANDSTILL
      AGREEMENTS

              	 	 	7	 
	
                 

              	 	 	 	 
	
                ARTICLE 9 THE INITIAL CLOSING
      AND THE MISSION CLOSING

              	 	 	8	 
	
                9.1 Initial Closing and
      Initial Closing Date

              	 	 	8	 
	
                9.2 Deliveries by Limco
      at the Initial Closing

              	 	 	8	 
	
                Limco Shares

              	 	 	8	 
	
                Office Lease

              	 	 	8	 
	
                Avocado Marketing
      Letter Agreement

              	 	 	8	 
	
                Certificates

              	 	 	8	 
	
                Certificate of Public
      Official

              	 	 	8	 
	
                Standstill
      Agreements

              	 	 	8	 
	
                Other
Documents

              	 	 	8	 
	
                9.3 Deliveries by
      Calavo at the Initial Closing

              	 	 	8	 
	
                Purchase Price

              	 	 	8	 
	
                Calavo Shares

              	 	 	8	 
	
                Office Lease

              	 	 	9	 
	
                Avocado Marketing
      Letter Agreement

              	 	 	9	 
	
                Standstill
      Agreements

              	 	 	9	 
	
                Certificates

              	 	 	9	 
	
                Certificate of Public
      Official

              	 	 	9	 
	
                Other
Documents

              	 	 	9	 
	
                9.4 Mission Closing and
      Mission Closing Date

              	 	 	9	 
	
                 

              	 	 	 	 
	
                ARTICLE 10 REPRESENTATIONS AND
      WARRANTIES OF LIMCO

              	 	 	9	 
	
                10.1 Organization and
      Qualification of Limco

              	 	 	10	 
	
                10.2 Capitalization of
      Limco and Subsidiaries

              	 	 	10	 
	
                10.3
    Subsidiaries

              	 	 	10	 
	
                10.4 Power and
      Authority

              	 	 	10	 
	
                10.5
Investment

              	 	 	11	 


      

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                10.6 No Violation or
      Conflict

              	 	 	11	 
	
                10.7 Financial
      Statements

              	 	 	11	 
	
                10.8 Absence of Certain
      Changes or Events

              	 	 	11	 
	
                10.9 Title to
      Assets

              	 	 	12	 
	
                10.10 Material
      Contracts

              	 	 	12	 
	
                10.11 Compliance with
      Applicable Laws

              	 	 	12	 
	
                10.12 Litigation and
      Liabilities

              	 	 	12	 
	
                10.13 Brokers, Finders,
      Investment Bankers and Financial Advisors

              	 	 	12	 
	
                10.14 Labor
      Relations

              	 	 	12	 
	
                10.15 Environmental
      Matters

              	 	 	13	 
	
                10.16 Intellectual
      Property

              	 	 	14	 
	
                10.17 Permits

              	 	 	14	 
	
                10.18 Liabilities and
      Disclosure

              	 	 	14	 
	
                10.19 Changes

              	 	 	14	 
	
                10.20 Tax Returns and
      Payments

              	 	 	14	 
	
                10.21 Insurance
      Policies

              	 	 	14	 
	
                10.22 Employee Benefit
      Plans

              	 	 	15	 
	
                10.23 Foreign Corrupt
      Practices Act

              	 	 	17	 
	
                10.24 Sarbanes-Oxley
      Compliance

              	 	 	17	 
	
                10.25 Transferability
      of the Limco Shares

              	 	 	17	 
	
                 

              	 	 	 	 
	
                ARTICLE 11 REPRESENTATIONS AND
      WARRANTIES OF CALAVO

              	 	 	17	 
	
                11.1 Organization and
      Qualification of Calavo

              	 	 	17	 
	
                11.2 Capitalization of
      Calavo and Subsidiaries

              	 	 	18	 
	
                11.3
    Subsidiaries

              	 	 	18	 
	
                11.4 Power and
      Authority

              	 	 	18	 
	
                11.5
Investment

              	 	 	18	 
	
                11.6 No Violation or
      Conflict

              	 	 	19	 
	
                11.7 Financial
      Statements and Reductions

              	 	 	19	 
	
                11.8 Absence of Certain
      Changes or Events

              	 	 	19	 
	
                11.9 Title to
      Assets

              	 	 	19	 
	
                11.10 Material
      Contracts

              	 	 	20	 
	
                11.11 Compliance with
      Applicable Laws

              	 	 	20	 
	
                11.12 Litigation and
      Liabilities

              	 	 	20	 
	
                11.13 Brokers, Finders,
      Investment Bankers and Financial Advisors

              	 	 	20	 
	
                11.14 Labor
      Relations

              	 	 	20	 
	
                11.15 Environmental
      Matters

              	 	 	20	 
	
                11.16 Intellectual
      Property

              	 	 	22	 
	
                11.17 Permits

              	 	 	22	 
	
                11.18 Liabilities and
      Disclosure

              	 	 	22	 
	
                11.19 Changes

              	 	 	22	 
	
                11.20 Tax Returns and
      Payments

              	 	 	22	 
	
                11.21 Insurance
      Policies

              	 	 	22	 
	
                11.22 Employee Benefit
      Plans

              	 	 	23	 
	
                11.23 Exchange Act
      Reports

              	 	 	25	 


      

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	 	 	Page	 
	
                11.24 Foreign Corrupt
      Practices Act

              	 	 	25	 
	
                 

              	 	 	 	 
	
                ARTICLE 12 COVENANTS OF
      LIMCO

              	 	 	25	 
	
                12.1 Conduct of
      Business Prior to Initial Closing

              	 	 	25	 
	
                12.2 Access

              	 	 	27	 
	
                12.3 Reasonable Efforts
      Regarding Mission Shares

              	 	 	27	 
	
                12.4 Reasonable
      Efforts

              	 	 	27	 
	
                 

              	 	 	 	 
	
                ARTICLE 13 COVENANTS OF
      CALAVO

              	 	 	27	 
	
                13.1 Conduct of
      Business Prior to Initial Closing

              	 	 	27	 
	
                13.2 Access

              	 	 	28	 
	
                13.3 Reasonable
      Efforts

              	 	 	28	 
	
                 

              	 	 	 	 
	
                ARTICLE 14 CONDITIONS PRECEDENT
      TO LIMCO’S OBLIGATION TO CLOSE

              	 	 	28	 
	
                14.1 General

              	 	 	28	 
	
                14.2 Representations
      and Warranties

              	 	 	29	 
	
                14.3 Investigations
      Fail to Disclose Material Adverse Change or Condition

              	 	 	29	 
	
                14.4 Covenants and
      Agreements

              	 	 	29	 
	
                14.5 No Adverse
      Changes

              	 	 	29	 
	
                14.6 No
      Proceedings

              	 	 	29	 
	
                14.7
    Certificates

              	 	 	29	 
	
                 

              	 	 	 	 
	
                ARTICLE 15 CONDITIONS PRECEDENT
      TO CALAVO’S OBLIGATION TO CLOSE

              	 	 	29	 
	
                15.1 General

              	 	 	29	 
	
                15.2 Investigations
      Fail to Disclose Material Adverse Change or Condition

              	 	 	29	 
	
                15.3 Representations
      and Warranties

              	 	 	29	 
	
                15.4 Covenants and
      Agreements

              	 	 	29	 
	
                15.5 No Adverse
      Changes

              	 	 	30	 
	
                15.6 No
      Proceedings

              	 	 	30	 
	
                15.7
    Certificates

              	 	 	30	 
	
                 

              	 	 	 	 
	
                ARTICLE 16 RIGHTS OF FIRST
      REFUSAL

              	 	 	30	 
	
                16.1 Limco
    Shares

              	 	 	30	 
	
                16.2 Calavo
    Shares

              	 	 	30	 
	
                 

              	 	 	 	 
	
                ARTICLE 17 PUBLIC
      DISCLOSURE

              	 	 	31	 
	
                 

              	 	 	 	 
	
                ARTICLE 18
      TERMINATION

              	 	 	31	 
	
                18.1
    Termination

              	 	 	31	 
	
                18.2 Effect of
      Termination

              	 	 	32	 
	
                 

              	 	 	 	 
	
                ARTICLE 19 SURVIVAL OF
      REPRESENTATIONS; INDEMNIFICATIONS

              	 	 	32	 
	
                19.1 Survival

              	 	 	32	 


      

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	 	 	Page	 
	
                19.2
      Indemnification

              	 	 	32	 
	
                19.2.1 Limco

              	 	 	32	 
	
                Calavo

              	 	 	32	 
	
                Notice/Defense

              	 	 	32	 
	
                Waiver of Breach;
      Indemnification Limitations

              	 	 	33	 
	
                 

              	 	 	 	 
	
                ARTICLE 20
      MISCELLANEOUS

              	 	 	33	 
	
                20.1 Notices

              	 	 	33	 
	
                20.2 Entire
      Agreement

              	 	 	34	 
	
                20.3 Waivers and
      Amendments

              	 	 	34	 
	
                20.4 Governing
    Law

              	 	 	35	 
	
                20.5 No
    Assignment

              	 	 	35	 
	
                20.6
    Counterparts

              	 	 	35	 
	
                20.7 Headings

              	 	 	35	 
	
                20.8 Benefit to
      Parties

              	 	 	35	 
	
                20.9 Validity

              	 	 	35	 
	
                20.10 Exhibits and
      Schedules

              	 	 	35	 
	
                20.11 Further
      Assurances

              	 	 	35	 
	
                20.12 Transaction
      Expenses

              	 	 	35	 


      

      iv 

       

    


    
    

     

    

    
    

     

     

    
    

     

    
      STOCK PURCHASE
AGREEMENT

       

      
      

       

      

           THIS
AGREEMENT is made and entered into as of June 1, 2005, by and between
LIMONEIRA COMPANY, a Delaware corporation (“Limco”), and CALAVO GROWERS, INC., a
California corporation (“Calavo”). 

       

      RECITALS

       

           A. Limco is engaged primarily in
the business of growing and marketing avocados, citrus fruits and other
specialty crops. 

       

           B. Calavo is engaged in the
business of marketing fresh avocados and processed avocado products throughout
the U.S.A. 

       

           C. Limco and Calavo desire to form
a strategic alliance by each purchasing shares of common stock of the other as
provided herein and by carrying out the further transactions and activities
provided for herein. 

       

      AGREEMENT

       

           NOW,
THEREFORE, as the parties agree as follows: 

       

      ARTICLE 1

       

      DEFINITIONS

       

           In
addition to the meanings ascribed to certain terms elsewhere in this Agreement,
for purposes of this Agreement: 

       

           “Accredited Investor”
has the meaning set forth in Regulation D promulgated under the Securities
Act. 

       

           “Adverse Consequences”
means all actions, suits, proceedings, hearings, investigations, charges,
complaints, claims, demands, injunctions, judgments, orders, decrees, rulings,
damages, dues, penalties, fines, costs, amounts paid in settlement, Liabilities,
obligations, Taxes, liens, losses, expenses, and fees, including court costs and
reasonable attorneys’ fees and expenses. 

       

           “Affiliate” has the
meaning set forth in Rule 12b-2 of the regulations promulgated under
Securities Exchange Act. 

       

      1 

       

    


    
    

     

    

    
    

     

     

    
    

     

    
           “Basis” means any past
or present fact, situation, circumstance, status, condition, activity, practice,
plan, occurrence, event, incident, action, failure to act, or transaction that
forms or could form the basis for any specified consequence. 

       

           “Calavo Shares” shall
mean the 1,000,000 shares of newly-issued common stock, $.001 par value per
share, of Calavo to be purchased by Limco as provided in Article 3 hereof.


       

           “COBRA” means the
requirements of Part 6 of Subtitle B of Title I of ERISA and Code §4980B
and of any similar state law. 

       

           “Code” means the
Internal Revenue Code of 1986, as amended. 

       

           “Confidential
Information” means any information concerning the business and affairs of
either party not already generally available to the public. 

       

           “Employee Benefit
Plan” means any “employee benefit plan” (as such term is defined in ERISA
§3(3)) and any other material employee benefit plan, program or arrangement of
any kind. 

       

           “Employee Pension Benefit
Plan” has the meaning set forth in ERISA §3(2). 

       

           “Employee Welfare Benefit
Plan” has the meaning set forth in ERISA §3(1). 

       

           “Environmental, Health, and
Safety Requirements” shall mean all federal, state, local and foreign
statutes, regulations, ordinances and other provisions having the force or
effect of law, all judicial and administrative orders and determinations, all
contractual obligations and all common law concerning public health and safety,
worker health and safety, and pollutions or protection of the environment,
including without limitation all those relating to the presence, use,
production, generation, handling, transportation, treatment, storage, disposal,
distribution, labeling, testing, processing, discharge, release, threatened
release, control, or cleanup of any hazardous materials, substances or wastes,
chemical substances or mixtures, pesticides, pollutants, contaminants, toxic
chemicals, petroleum products or by products, asbestos, polychlorinated
biphenyls, noise or radiation, each as amended and as now or hereafter in
effect. 

       

           “ERISA” means the
Employee Retirement Income Security Act of 1974, as amended. 

       

           “ERISA Affiliate”
means each entity which is treated as a single employer with Limco or Calavo for
purposes of Code §414. 

       

      2 

       

    


    
    

     

    

    
    

     

     

    
    

     

    
           “Fiduciary” has the
meaning set forth in ERISA §3(21). 

       

           “Financial Statements”
has the meaning set forth in Sections 10.7 and 11.7 below. 

       

           “GAAP” means United
States generally accepted accounting principles as in effect from time to time.


       

           “Initial Closing” has
the meaning set forth in Article 9 below. 

       

           “Initial Closing Date”
has the meaning set forth in Article 9 below. 

       

           “Intellectual
Property” means (a) all inventions (whether patentable or
unpatentable and whether or not reduced to practice), all improvements thereto,
and all patent applications, and patent disclosures, together with all
reissuances, continuations, continuations-in-part, revisions, extensions, and
reexaminations thereof, (b) all trademarks, service marks, trade dress,
logos, trade names, and corporate names, together with all translations,
adaptations, derivations, and combinations thereof and including all goodwill
associated therewith, and all applications, registrations, and renewals in
connection therewith, (d) all mask works and all applications,
registrations, and renewals in connection therewith, (e) all trade secrets
and confidential business information (including software and source codes,
ideas, research and development, know-how, formulas, compositions, manufacturing
and production processes and techniques, technical data, designs, drawings,
specifications, customer and supplier lists, pricing and cost information, and
business and marketing plans and proposals), (f) all computer software
(including data and related documentation), (g) all other proprietary
rights, (h) all web domain names and websites and all registrations and
applications associated therewith, and all its derivatives, and (i) all
copies and tangible embodiments thereof (in whatever form or medium). 

       

           “Knowledge” means
actual knowledge after reasonable inquiry of internal personnel deemed
appropriate by the Party making the inquiry. 

       

           “Leased Real Property”
means all leasehold or subleasehold estates and other rights to use or occupy
any land, buildings, structures, improvements, fixtures or other interest in
real property held by either Limco or Calavo. 

       

           “Leases” means all
leases, subleases, licenses, concessions and other agreements (written or oral),
including all amendments, extensions, renewals, guaranties and other agreements
with respect thereto, pursuant to which Limco or Calavo holds any Leased Real
Property. 

       

      3 

       

    


    
    

     

    

    
    

     

     

    
    

     

    
           “Liability” means any
liability (whether known or unknown, whether asserted or unasserted, whether
absolute or contingent, whether accrued or unaccrued, whether liquidated or
unliquidated, and whether due or to become due). 

       

           “Limco Shares” means
the 172,857shares of newly issued common stock, $.01 par value per share, of
Limco to be purchased by Calavo as provided in Article 2 hereof. 

       

           “Material Adverse Change or
Condition” means any occurrence or condition or series of related
occurrences or conditions not disclosed in the Financial Statements or Most
Recent Financial Statements of either party or, in the case of Calavo, Calavo’s
Securities Exchange Act reports that would individually or cumulatively reduce
by Five Hundred Thousand Dollars ($500,000) or more the results of operations,
financial condition or value of the assets, or properties of either party.


       

           “Mission” means
Mission Produce, Inc., a California corporation. 

       

           “Mission Closing” has
the meaning set forth in Article 9 below. 

       

           “Mission Shares” means
the 547,452 shares of common stock of Mission which Limco has the right to put
to Calavo as provided in Article 4 hereof, if Limco does not sell them to
Mission. 

       

           “Most Recent Financial
Statements” has the meaning set for in Sections 10.7 and 11.7 below.


       

           “Most Recent Fiscal Month
End” has the meaning set forth in Sections 10.7 and 11.7 below.


       

           “Multiemployer Plan”
has the meaning set forth in ERISA §3(37). 

       

           “Ordinary Course of
Business” means the ordinary course of business consistent with past
custom and practice (including with respect to quantity and frequency). 

       

           “Party” means either
Limco or Calavo as the case may be. 

       

           “PBGC” means the
Pension Benefit Guaranty Corporation. 

       

           “Person” means any
individual, a partnership, a corporation, an association, a joint stock company,
a trust, a joint venture, a limited liability company, an unincorporated
organization, or a governmental entity (or any department, agency, or political
subdivision thereof). 

       

      “Prohibited
Transaction” has the meaning set forth in ERISA §406 and Code §4975.


       

      “Reportable Event” has
the meaning set forth in ERISA §4043. 

       

      4 

       

    


    
    

     

    

    
    

     

     

    
    

     

    
      “Securities Act” means
the Securities Act of 1933, as amended. 

       

      “Securities Exchange
Act” means the Securities Exchange Act of 1934, as amended. 

       

           “Security Interest”
means any mortgage, pledge, lien, encumbrance, charge or other security
interest, other than (a) mechanic’s, materialmen’s, and similar liens,
(b) liens for Taxes not yet due and payable or for Taxes that the taxpayer
is contesting in good faith through appropriate proceedings, (c) purchase
money liens and liens securing rental payments under capital lease arrangements,
and (d) other liens arising in the Ordinary Course of Business and not
incurred in connection with the borrowing of money. 

       

           “Subsidiary” means
(i) any corporation with respect to which a specified Person (or a
Subsidiary thereof) owns a majority of the common stock or has the power to vote
or direct the voting of sufficient securities to elect a majority of the
directors or (ii) any limited liability company with respect to which a
person owns a majority of the voting power and/or interest in profits and
losses. 

       

           “Tax” means any
federal, state, local, or foreign income, gross receipts, license, payroll,
employment, excise, severance, stamp, occupation, premium, windfall profits,
environmental (including taxes under Code §59A), customs duties, capital stock,
franchise, profits, withholding, social security (or similar), unemployment,
disability, real property, personal property, sales, use, transfer,
registration, value added, alternative or add-on minimum, estimated, or other
tax of any kind whatsoever, including any interest, penalty, or addition
thereto, whether disputed or not. 

       

           “Tax Return” means any
return, declaration, report, claims for refund, information return or statement
relating to Taxes, including any schedule or attachment thereto, and including
any amendment thereof. 

       

      ARTICLE 2

       

      PURCHASE AND SALE OF LIMCO
SHARES

       

           Limco
agrees to sell and Calavo agrees to purchase the Limco Shares, free and clear of
all liens, encumbrances or claims of others, for the cash purchase price of
$23,450,000. Such purchase price shall be paid by Calavo at the Initial Closing
by means of a wire transfer of immediately available funds to an account
designated by Limco. 

       

      5 

       

    


    
    

     

    

    
    

     

     

    
    

     

    
      ARTICLE 3

       

      PURCHASE AND SALE OF CALAVO
SHARES

       

           Calavo
agrees to sell and Limco agrees to purchase the Calavo Shares, free and clear of
all liens, encumbrances or claims of others, for the purchase price of
$10,000,000. Such purchase price shall be paid by Limco at the Initial Closing
by means of a wire transfer of immediately available funds to an account
designated by Calavo. 

       

      ARTICLE 4

       

      PURCHASE AND SALE OF MISSION
SHARES

       

           Calavo and
Limco acknowledge and agree that the Mission Shares are subject to certain
rights of first refusal set forth in a Shareholder Agreement dated June 5,
1990 and may not be sold unless both the issuer, Mission and its shareholders
waive or fail to exercise their respective rights of first refusal and the
merger or other business combination transaction have not been agreed to by
Calavo and Mission. Mission has entered into an agreement to repurchase the
Mission Shares from Limco on or before June 15, 2005. In the event that
Mission fails to repurchase the Mission Shares and subject to the condition that
the rights of first refusal with respect to the Mission Shares are either waived
or not exercised in a timely fashion, and subject to the terms and conditions of
Section 9.4, Limco agrees to sell and Calavo agrees to purchase the Mission
Shares, free and clear of all liens, encumbrances or claims of others, for a
cash purchase price of $5,474,520. Such purchase price shall be paid by Calavo
to Limco at the Mission Closing by means of a wire transfer of immediately
available funds to an account designated by Limco. Limco represents and warrants
to Calavo that (i) Limco owns the Mission Shares free and clear of all
liens, security interests and other encumbrances, and has the right to sell the
Mission Shares to Calavo on the terms described in this Agreement, subject to
the rights of first refusal set forth in the Shareholder Agreement dated
June 5, 1990, and (ii) to Limco’s knowledge, the Mission Shares
constitute 20.7% of the outstanding capital stock of Mission Produce, Inc.


       

      ARTICLE 5

       

      OFFICE LEASE

       

           On or
before the Initial Closing Date, Limco and Calavo shall execute and deliver to
each other a Lease Agreement in the form of that attached hereto as
Exhibit 5 hereof, pursuant to which Calavo agrees to lease from Limco
approximately 9,490 square feet of office space in Limco’s Ranch Headquarters
for a period of ten years at an initial annual gross rental of $207,226. 

       

      6 

       

    


    
    

     

    

    
    

     

     

    
    

     

    
      ARTICLE 6

       

      FRUIT COMMITMENT
AGREEMENT

       

           At the
Initial Closing, Limco and Calavo shall execute and deliver to each other a
letter agreement, to be in form and substance reasonably satisfactory to each
Party, regarding the marketing of Limco’s avocados by Calavo. 

       

      ARTICLE 7

       

      JOINT DEVELOPMENT OF PACKING
HOUSE

       

           Following
the Initial Closing, Limco and Calavo shall use their good faith reasonable
efforts to maximize avocado packing efficiencies for both parties by
consolidating their fruit packing operations. Possible opportunities to be
considered will include: 

       

      
      

       

      	 	(1)  	Cross dock and storage arrangement in Limco’s existing
facilities
	 
	 	(2)  	Investment in Limco’s existing vacant orange packing house
	 
	 	(3)  	Investment in an addition to Limco’s existing lemon packing
  facility
	 
	 	(4)  	Investment in a new consolidated facility for both parties at
  Limco


           Any such
joint investment that is agreed to by Calavo and Limco shall provide a
reasonable rate of return to the party or parties providing land equipment
and/or capital. 

       

      ARTICLE 8

       

      STANDSTILL AGREEMENTS

       

           Calavo,
together with its executive officers and directors (collectively “Calavo
Affiliates”), shall execute and deliver at the Initial Closing, one or more
counterparts of a “Standstill Agreement” in the form of Exhibit 8A hereof,
pursuant to which (i) Calavo agrees that it will not, without the prior
written approval of Limco’s Board of Directors, purchase or enter into any
transaction whereby Calavo will acquire cumulatively twelve and six tenths
percent (12.6%) of the capital stock of Limco in addition to the Limco Shares
being acquired hereunder and (ii) Calavo and the Calavo Affiliates agree
that they will not, individually or collectively, themselves or together with
any third party or parties form a “group” as defined in the Securities Exchange
Act for the purpose of acquiring voting control and/or beneficial ownership of a
majority of Limco’s capital stock. Limco, together with its executive officers
and directors (collectively “Limco Affiliates”), shall execute and deliver at
the Initial Closing, one or more counterparts of a “Standstill Agreement” in the
form of Exhibit 8B hereof, pursuant to which (i) Limco agrees that it
will not, without the prior written approval of Calavo’s Board of Directors,
purchase or enter into any transaction whereby Limco will acquire cumulatively
twelve and six tenths percent (12.6%) of the capital stock of 

       

      7 

       

    


    
    

     

    

    
    

     

     

    
    

     

    
      Calavo in addition to the Calavo Shares
being acquired hereunder and (ii) Limco and the Limco Affiliates agree that
they will not, individually or collectively, themselves or together with any
third party or parties form a “group” as defined in the Securities Exchange Act
for the purpose of acquiring voting control and/or beneficial ownership of a
majority of Calavo’s capital stock. 

       

      ARTICLE 9

       

      THE INITIAL CLOSING AND THE MISSION
CLOSING

       

           9.1 Initial Closing and Initial
Closing Date. Subject to the conditions to closing set forth herein, the
consummation of the transactions contemplated by this Agreement (other than the
sale of the Mission Shares) shall be effected at a closing (the “Initial
Closing”) at 10:00 a.m., Pacific Daylight Savings Time, on a date, agreed
to by Calavo and Limco that is not more than 5 days following the satisfaction
or waiver of the Initial Closing conditions described in Articles 14 and 15. The
Initial Closing shall take place at the Ranch Headquarters of Limco at 1141
Cummings Road, Santa Paula, California 93060. The Initial Closing may also take
place at such other time and place as Limco and Calavo may mutually agree. All
transactions effected at the Initial Closing, unless otherwise specifically
agreed in writing, shall be effective on and as of the Initial Closing Date.


       

           9.2 Deliveries by Limco at the
Initial Closing. At the Initial Closing, Limco shall deliver to Calavo:


       

                (a) Limco Shares. The
purchase price for the Calavo Shares and one or more certificates evidencing the
Limco Shares duly executed and issued in the name of Calavo; together with a
completed and signed form of Notice of Transaction Pursuant to Corporations Code
Section 25102(f). The Limco Shares will be “restricted securities” under
federal and state securities laws and will be issued with a legend restricting
any form of transfer for a period of one year from issuance and thereafter only
pursuant to an exemption from registration and an opinion of counsel reasonably
acceptable to Limco that an exemption from registration is available with
respect to the proposed transfer. Such legend shall also reference Limco’s right
of first refusal provided for in Article 16 hereof. 

       

                (b) Office Lease. A duly
executed counterpart of the Office Lease in the form of Exhibit 5 hereof.


       

                (c) Avocado Marketing Letter
Agreement. A duly executed counterpart of the avocado marketing letter
agreement referred to in Article 6. 

       

                (d) Certificates. A copy
of the resolutions adopted by Limco’s Board of Directors authorizing and
approving the execution and delivery of this Agreement and the consummation of
the transactions contemplated hereby, certified by an officer of Limco; a
certificate of incumbency of Limco in form and substance reasonably satisfactory
to Calavo or its counsel; and the Certificate of the Chief Executive Officer of
Limco described in Section 15.7. 

       

                (e) Certificate of Public
Official. A certificate, dated not more than five (5) days prior to
the Initial Closing Date, of the Secretary of the State of Delaware certifying
that Limco is a corporation in good standing as a domestic corporation and has
paid all corporation taxes payable in that jurisdiction. 

       

                (f) Standstill
Agreements. Duly executed counterparts of the two Standstill Agreements
in the form of Exhibits 8A and 8B hereof, executed by the Persons described in
Articles 8 above. 

       

                (g) Other Documents. The
Certificate of Incorporation and Bylaws of Limco, as amended to date, and all
other documents and instruments which, in the reasonable opinion of Calavo or
its counsel, will be necessary to effectuate the terms and conditions of this
Agreement, the obligations of Limco hereunder, and the consummation of the
transaction contemplated hereby. 

       

           9.3 Deliveries by Calavo at the
Initial Closing. At the Initial Closing, Calavo shall deliver to Limco:


       

                (a) Purchase Price. The
purchase price for the Limco Shares. 

       

                (b) Calavo Shares. One or
more certificates, evidencing the Calavo Shares, duly executed and issued in the
name of Limco, together with a completed and signed Form D. The Calavo
shares will be “restricted securities” under federal and state securities laws
and will be issued with a legend restricting any form of transfer for a period
of one year from issuance and thereafter only pursuant to an exemption from
registration and an opinion of counsel, 

       

      8 

       

    


    
    

     

    

    
    

     

     

    
    

     

    
      reasonably acceptable to Calavo that an
exemption from registration is available with respect to the proposed
transactions. Such legend shall also reference Calavo’s right of first refusal
provided in Article 16 hereof. 

       

                (c) Office Lease. A duly
executed counterpart of the Office Lease in the form of Exhibit 5 hereof.


       

                (d) Avocado Marketing Letter
Agreement. A duly executed counterpart of the avocado marketing letter
agreement referred to in Article 6. 

       

                (e) Standstill
Agreements. Duly executed counterparts of the two Standstill Agreements
in the form of Exhibits 8A and 8B hereof, executed by the Persons described in
Article 8 above. 

       

                (f) Certificates. A copy
of the resolutions adopted by Calavo’s Board of Directors authorizing and
approving the execution and delivery of this Agreement and the consummation of
the transactions contemplated hereby, certified by an officer of Calavo; a
certificate of incumbency of Calavo in form and substance reasonably
satisfactory to Limco or its counsel; and the Certificate of the Chief Executive
Officer of Calavo described in Section 14.7. 

       

                (g) Certificate of Public
Official. A Certificate, dated not more than five (5) days prior to
the Initial Closing Date, of the California Secretary of State certifying that
Calavo is in good standing as a domestic corporation of that state and has paid
all corporation taxes payable in that state. 

       

                (h) Other Documents. The
Articles of Incorporation and Bylaws of Calavo, as amended to date, and any and
all other documents and instruments which, in the reasonable opinion of counsel
to Limco, will be necessary to effectuate the terms and conditions of this
Agreement and the obligations of Calavo hereunder. 

       

           9.4 Mission Closing and Mission
Closing Date. Calavo and Mission may reopen their negotiations regarding
a possible acquisition of Mission by Calavo or other business combination
transaction between those two entities. In order to facilitate such potential
negotiations, Limco and Calavo have agreed that if Mission fails to repurchase
the Mission Shares from Limco, Calavo and Limco may postpone the sale of the
Mission Shares by Limco to Calavo for a limited period of time. Accordingly,
Limco may, in its sole discretion, postpone the closing for the purchase and
sale of the Mission Shares (the “Mission Closing”) to a date not later than
180 days following the Initial Closing Date designated by Limco to Calavo
in writing not less than 75 days in advance (the “Mission Closing Date”).
In the event that Calavo and Mission enter into a binding agreement prior to the
Mission Closing Date for a merger or other business combination of such entities
and/or their affiliates, either prior or subsequent to Limco’s designation of
the Mission Closing Date, Limco may, at its sole election, either proceed with
the Mission Closing on the sale of the Mission Shares to Calavo for a cash
purchase price of $5,474,520 or dispose of the Mission Shares through the merger
or other business combination of Calavo and Mission. At the Mission Closing,
(i) Limco shall deliver to Calavo one or more certificates representing the
Mission Shares, duly endorsed or accompanied by executed instruments of transfer
sufficient to transfer title to the Mission Shares to Calavo beneficially and of
record and free and clear of all liens and encumbrances other than the
obligations thereafter imposed upon Calavo by the Shareholder Agreement dated
June 5, 1990, and (ii) Calavo shall deliver to Limoniera the purchase
price for the Mission Shares in the amount of $5,474,520, by wire transfer to an
account designated by Limco. 

       

      ARTICLE 10

       

      REPRESENTATIONS AND WARRANTIES OF
LIMCO

       

           Limco
makes the following representations and warranties to Calavo, subject to and
qualified by any fact or facts disclosed in the Schedules that are provided to
Calavo as required in this Agreement. Disclosure of an item in a Schedule
corresponding to a particular Section in this Agreement shall, should the
existence of the item or its 

       

      9 

       

    


    
    

     

    

    
    

     

     

    
    

     

    
      contents be relevant to any other
Section, be deemed to be disclosed in that other Section whether or not an
explicit cross-reference appears as long as it is reasonably apparent that such
disclosure applies to any such other Section. 

       

           10.1 Organization and
Qualification of Limco. Limco is a corporation duly incorporated, validly
existing and in good standing under the laws of the State of Delaware and has
the requisite corporate power and authority to own or lease and to operate its
properties and to carry on its business as now being conducted. The copies of
the Certificate of Incorporation, as amended to date, certified by the Delaware
Secretary of state, and of the Bylaws of Limco, certified by the Secretary of
Limco to be delivered to Calavo at the Initial Closing, will be complete and
correct as of the Initial Closing Date. 

       

           10.2 Capitalization of Limco and
Subsidiaries. The authorized capital stock of Limco consists of 3,000,000
shares of Common Stock, par value $.01 per share of which 975,171 shares are
issued and outstanding, and 100,000 shares of Preferred Stock, par value $100.00
per share, of which no shares of Series A and 30,000 shares of
Series B are issued and outstanding. There are no treasury shares. Except
as set forth in Schedule 10.2 hereto, there are no outstanding options,
warrants, scripts, rights to subscribe to or commitments or agreements of any
character whatsoever relating to or securities or rights convertible into or
exchangeable for, shares of capital stock or other securities or interest in
profits of Limco or any Limco Subsidiary, and there are no contracts,
commitments, understandings, arrangements or restrictions by which Limco or any
Limco Subsidiary is now or in the future would be bound to issue any additional
shares of capital stock, other securities or interests in profits. All issued
and outstanding shares of capital stock of Limco and each Limco corporate
Subsidiary are duly authorized, validly issued, fully paid and nonassessable.
All voting rights in Limco and each Limco Subsidiary are vested exclusively in
common stock. On the Initial Closing Date, the Limco Shares will be newly issued
and free of all liens and encumbrances. On the Initial Closing Date, the stock
ownership of Limco’s Subsidiaries will be as set forth in Schedule 10.3
hereto and will be free of all liens and encumbrances. None of the Limco Common
Stock or Preferred Stock is entitled to any preemptive right; and Limco’s
Certificate of Incorporation and Bylaws do not provide Limco with a right of
first refusal to purchase any Limco Common Stock or restrict the sale or other
transfer of any Limco Common Stock. 

       

           10.3 Subsidiaries.
Schedule 10.3 hereto lists each corporation, limited liability company and
other entity, which Limco controls directly or indirectly or in which Limco has
an ownership interest, direct or indirect, of record or beneficially, whether in
capital stock or other equity security, each of which is referred to in this
Agreement as a Subsidiary. Except as set forth in Schedule 10.3. Limco does
not own, directly or indirectly, any capital stock or other equity securities of
any corporation or have any direct or indirect equity or ownership interest in
any business entity including, without limitation, business vehicles in the
nature of joint ventures and partnerships. Each Limco Subsidiary is duly
organized, validly existing and in good standing under the laws of its
respective jurisdiction of organization, and has the power and authority to own
its properties and to carry on its business as now conducted. Each Limco
Subsidiary is duly licensed, authorized or qualified to transact business in,
and is in good standing in each jurisdiction in which the properties owned or
leased or the activities conducted by it makes such licensing, authorization or
qualification necessary, except where the failure to be so licensed, authorized
qualified or the failure to be in such good standing would not have a material
adverse effect on the business, financial condition or operations of Limco and
its Subsidiaries taken as a whole. Schedule 10.3 hereto lists, for each
Limco Subsidiary, its form of organization, if it is a corporation, the number
of shares of capital stock or other equity securities authorized, issued and
outstanding, and the holders of record and beneficially of all issued capital
stock or other equity securities. 

       

           10.4 Power and Authority.
Limco has the requisite corporate power and authority to execute and deliver
this Agreement and to consummate the transactions contemplated hereby. The
execution and delivery of this Agreement by Limco and the consummation by Limco
of the transactions contemplated hereby have been duly authorized by the Board
of Directors of Limco and no other corporate proceedings on the part of Limco
are necessary to authorize this Agreement and the transactions contemplated
hereby. This Agreement has been duly executed and delivered by Limco and,
assuming this Agreement constitutes a valid and binding obligation of Calavo,
constitutes a valid and binding obligation of Limco, enforceable against Limco
in accordance with its terms, except to the extent that enforceability may be
limited by applicable bankruptcy, reorganization, insolvency, moratorium or
other laws affecting the enforcement of creditors’ rights in general and except
to the extent that the availability of equitable 

       

      10 

       

    


    
    

     

    

    
    

     

     

    
    

     

    
      remedies, including specific
performance, is subject to the discretion of the court before which any
proceeding therefor may be brought. 

       

           10.5 Investment. Limco
understands that the Calavo Shares have not been, and will not be, registered
under the Securities Act or under any state securities law, and are being
offered and sold in reliance upon federal and state exemptions for a transaction
not involving any public offering. Limco (1) is acquiring the Calavo Shares
solely for its own account for investment purposes, and not with a view to the
distribution thereof, (2) is a sophisticated investor with knowledge and
experience in business and financial matters, (3) has received certain
information concerning Calavo and has had the opportunity to obtain additional
information as desired in order to evaluate the merits and the risks inherent in
holding the Calavo Shares, (4) is able to bear the economic risk and lack
of liquidity inherent in holding the Calavo Shares, and (5) is an
Accredited Investor. Limco’s representations and warranties in this
Section 10.5 shall not be construed as prohibiting it from selling or
otherwise transferring the Calavo Shares at any time subsequent to the first
anniversary of the Initial Closing in compliance with applicable federal and
state securities laws and regulation and in compliance with the right of first
refusal contained in Section 16.2 

       

           10.6 No Violation or
Conflict. Neither the execution and delivery of this Agreement by Limco
nor the consummation of the transactions contemplated hereby nor compliance by
Limco with any of the provisions hereof will violate, conflict with, or result
in a breach of any provision of, or constitute a default (or an event which,
with notice or lapse of time or both, would constitute a default) under, or
result in the termination of, or accelerate the performance required by, or
result in a right of termination or acceleration under, or result in the
creation of any lien upon any of the properties or assets of Limco or any Limco
Subsidiary under any of the terms, conditions or provisions of (i) the
Certificate or Articles of Incorporation or the Bylaws of Limco or any Limco
Subsidiary, or (ii) any note, bond, mortgage, indenture, deed of trust,
license, lease, agreement or other instrument or obligation to which Limco or
any Limco Subsidiary is a party or to which they or any of their respective
properties or assets may be subject, or (iii) statute, regulation,
judgment, ruling, order, writ, injunction, decree, rule or regulation applicable
to Limco or any Limco Subsidiary or any of their respective properties or
assets, except for such violations, conflicts, breaches, defaults, terminations,
accelerations or creations of liens which, individually or in the aggregate,
would not have any material adverse effect on the business, operations or
financial conditions of Limco and the Limco Subsidiaries taken as a whole.


       

           10.7 Financial Statements.
Except as set forth in Schedule 10.7, the consolidated audited financial
statements of Limco and the Limco Subsidiaries for the fiscal year ended
October 31, 2004, consisting of the consolidated balance sheet as of such
date and the related statements of operations, changes in stockholders’ equity
and cash flows for the year then ended (the “Financial Statements”), which
Financial Statements and the opinion of Deloitte and Touche thereon dated
February 8, 2005, have been furnished to Calavo, present fairly in all
material respects, the financial position of Limco as of such date and the
results of operations and cash flows for the year then ended, in accordance with
GAAP, applied on a consistent basis throughout such period. Except as set forth
in Schedule 10.7, the Financial Statements, and all accompanying exhibits
and schedules were true complete and correct in all respects as of the dates
thereof, were prepared in accordance with GAAP, applied on a consistent basis
throughout such period, except as otherwise stated therein, and presented fairly
the financial position as at the date of, and the results of operations for the
periods covered by, such statements of Limco and the Limco Subsidiaries. The
unaudited consolidated and consolidating balance sheets and statements of income
changes in stockholders equity and cash flow (the “Most Recent Financial
Statements”) of Limco as of and for the months ending April 30, 2005 (“Most
Recent Fiscal Month”) have not been prepared in accordance with GAAP, but
nevertheless present fairly, in all material respects, the financial condition
of Limco as of such date and the result of operations of Limco for such periods
and are consistent with the books and records of Limco. Limco’s management has
disclosed, based on its most recent evaluation to Limco’s auditors and the audit
committee of Limco’s Board of Directors, (i) all significant deficiencies
in the design or operation of internal control over financial reporting which
are reasonably likely to adversely affect Limco’s ability to record, process,
summarize and report financial information and (ii) any fraud, whether or
not material, that involved management or other employees who have a significant
role in Limco’s internal control over financial reporting.


       

           10.8 Absence of Certain Changes
or Events. Except as and to the extent contemplated by this Agreement,
since the date of the Most Recent Financial Statements, Limco has conducted its
business only in the ordinary course, and there has not been, with respect to
Limco, (a) any material adverse change in or to such business, (b) any
material damages, destruction or loss (whether covered by insurance or not),
(c) any material change by Limco in accounting 

       

      11 

       

    


    
    

     

    

    
    

     

     

    
    

     

    
      methods, principles or practices; or
(d) any commitment, agreement or understanding respecting any employee of
Limco which has or would have the effect of increasing such employee’s
compensation or benefits other than in accordance with past Limco policies.


       

           10.9 Title to Assets.
Limco owns and has title to its properties and assets as reflected in the
Financial Statements, subject to no material liens, mortgages, pledges,
encumbrances or charges of any kind, except as disclosed in the Financial
Statements or as disclosed in Schedule 10.9, and except for non-delinquent liens
for current taxes and assessments. All leases by which Limco or its Subsidiaries
lease real or personal property are in good standing and are valid and effective
in accordance with their respective terms, and there exists no material default
or other occurrence or condition which would result in a material default or
termination of any of those leases. 

       

           10.10
Material
Contracts. Set forth in Schedule 10.10 is a true and correct list of
(i) all plans, contracts or understandings providing for bonuses, pensions,
options, deferred compensation, retirement payments, royalty payments, profit
sharing or similar understandings with respect to any present or former officer,
director or consultant, (ii) any contract or agreement with any labor
union, (iii) any contract for the future purchase, acquisition or sale of
products or rights to products or performance of services over a period of more
than three months from the date hereof not made in the ordinary course of
business, (iv) all leases of real property, including all amendments and
modifications, (v) any contract containing covenants limiting the freedom
of Limco or any of the Limco Subsidiaries to compete in any line of business or
with any person; and (vi) every other contract to which Limco or any of its
Subsidiaries is a party which could reasonably be expected to result in annual
payments by or to Limco or any of its Subsidiaries in excess of Two Hundred
Thousand Dollars ($200,000) or cumulative payments by or to or any of the Limco
Subsidiaries in excess of Two Hundred Thousand Dollars ($200,000), except for
contracts entered into in the ordinary course of business which are terminable
upon less than thirty (30) days’ notice by either party thereto without
penalty or liability (collectively, “Material Contracts”). Limco heretofore has
delivered or made available to Calavo true and correct copies of all Material
Contracts. Neither Limco nor any of its Subsidiaries is in default or breach,
and no event has occurred or shall occur by reason of the transactions
contemplated herein which would constitute a default or breach, where such
default or breach would entitle another party thereto to accelerate or terminate
such Material Contract or otherwise impose a material penalty or forfeiture
thereunder (whether with or without notice, lapse of time or the happening or
occurrence of any other event), under any Material Contract. All Material
Contracts are valid and binding agreements, and to the knowledge of Limco, there
are no facts or circumstances which make a default under any Material Contract
by any party thereto likely to occur subsequent to the date hereof. 

       

           10.11
Compliance with
Applicable Laws. Except as set forth in Schedule 10.11, and except
for possible violations which individually or in the aggregate do not, and
insofar as reasonably can be foreseen, in the future will not, have a material
adverse effect on Limco, Limco and the Limco Subsidiaries are in compliance with
all requirements of law, federal, state or local, and of all governmental bodies
or agencies having jurisdiction over it or the conduct of its business. Limco is
not presently charged with, nor to its knowledge, is Limco under any
investigation or the subject of any threatened proceeding with respect to any
violation of any statute, law, ordinance, rule or regulation relating to Limco.


       

           10.12
Litigation and
Liabilities. Except as disclosed in Schedule 10.12, there are no
actions, suits, investigations or proceedings pending or, to the knowledge of
Limco threatened against Limco or any Limco Subsidiary; nor, to the knowledge of
Limco, are there any facts or circumstances that could reasonably be expected to
result in a claim for damages that, if adversely determined, would be reasonably
likely to result in any claims against or obligations or liabilities of Limco or
any of the Limco Subsidiaries that, alone or in the aggregate, would have any
material adverse effect on Limco. 

       

           10.13
Brokers, Finders,
Investment Bankers and Financial Advisors. No broker, finder, investment
banker or financial advisor is entitled to any brokerage, finder’s or other fee
or commission from Limco in connection with the transactions contemplated by
this Agreement based upon arrangement made by or on behalf of Limco. 

       

           10.14
Labor
Relations. To Limco’s knowledge, it has not engaged in any unfair labor
practice, and has not illegally discriminated on the bases of age or sex in its
employment conditions or practices. Except as set forth in Schedule 10.14,
there are no unfair labor practice grievances or age or sex discrimination
complaints pending, or, to Limco’s knowledge, threatened against Limco before
any governmental entity and, to the knowledge of Limco, no basis therefore.


       

      12 

       

    


    
    

     

    

    
    

     

     

    
    

     

    
           10.15
Environmental Matters.


       

                (a) There
is no civil, criminal or administrative action, suit, claim, notice of violation
or proceeding pending or, to Limco’s knowledge, threatened against Limco
respecting the storage, use, release or burial of a hazardous substance (for the
purposes of this Agreement, as defined under any applicable federal, state or
local statute, rule, regulation or other law and whether solid, liquid or
gaseous) on, from or under premises occupied by Limco. 

       

                (b) To
Limco’s knowledge, it has no liability (absolute, accrued, contingent or
otherwise), including, without limitation, clean-up obligations or liabilities
to third parties for personal injuries or other torts, for any contamination of
air, soil or water with hazardous substances. 

       

                (c) Limco
is, to its knowledge, operating its business in material compliance with all
Environmental Health and Safety Requirements. 

       

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           10.16
Intellectual
Property. Schedule 10.16 hereto contains an accurate and complete
list of all intellectual property (the “Intellectual Property”) owned by or
licensed to Limco, together with registration data where applicable and
descriptive identification as appropriate. Limco owns or has the right to use
all of the Intellectual Property used in or necessary for the conduct of its
business as now conducted, without any known material infringement upon, or
conflict with the rights of, or claim of ownership or other rights by, any other
person. Limco has received no written notice of any claimed infringement or
conflict with respect to any of the foregoing. 

       

           10.17
Permits. Limco
and each Limco Subsidiary hold licenses, certificates, permits, franchises and
rights from all appropriate persons, governmental entities and public
authorities necessary for the conduct of their respective businesses as now
conducted, except where the failure to obtain the same would not have a material
adverse effect on the business operations or financial condition of Limco.
Neither the execution or delivery of this Agreement nor the consummation of the
transactions contemplated herein will result in the termination of any license,
certificate, permit, franchise or right held by Limco or any Limco Subsidiary.


       

           10.18
Liabilities and
Disclosure. Limco has no material liabilities of any nature, whether
accrued, absolute, contingent or otherwise (including, without limitation,
liabilities as guarantor or otherwise with respect to obligations of others),
except as stated or adequately reserved against in the Financial Statements,
disclosed in the Schedules hereto, or incurred in the ordinary course of
business after April 30, 2005. There is, to Limco’s knowledge, no fact
which, in its reasonable judgment and belief, does or might materially and
adversely affect the business, prospects, condition, affairs or operations of
Limco or any Limco Subsidiary or any of their properties or assets which has not
been set forth in this Agreement or the Schedules. 

       

           10.19
Changes. Except
as set forth on Schedule 10.19, since the Most Recent Financial Statements,
there has not been any material adverse change in the business, financial
conditions, results of operations or prospects of Limco or any Limco Subsidiary,
except such changes which could not, individually or in the aggregate, have a
material adverse effect on the business, financial condition or results of
operations of Limco or and Limco Subsidiaries. 

       

           10.20
Tax Returns and
Payments. Except as set forth in Schedule 10.20, Limco and its
Subsidiaries have timely filed all federal, state, and local tax returns which
were required to be filed by or with respect to Limco or any of the Limco
Subsidiaries, and have paid or, where payment is not yet required, have
established adequate tax reserves for the payment of all Taxes with respect to
the periods covered by such returns. Nether Limco nor any of the Limco
Subsidiaries have consented to any waiver or extension of any statute of
limitations relating to the assessment or collection of any federal, state or
local Tax. There are no deficiency assessments against Limco or any of the Limco
Subsidiaries. 

       

           10.21
Insurance
Policies. Schedule 10.21 sets forth the following information with
respect to each insurance policy (including policies providing property,
casualty, liability, and workers’ compensation coverage and bond and surety
arrangements) to which Limco has been a party, a named insured, or otherwise the
beneficiary of coverage at any time from fiscal year 2003 to the date hereof:


       

                (a) the
name of the insurer, the name of the policyholder, and the name of each covered
insured; 

       

                (b) the
policy number and the period of coverage; 

       

                (c) the
scope (including an indication of whether the coverage was on a claims made,
occurrence, or other basis) and amount (including a description of how
deductibles and ceilings are calculated and operate) of coverage; and 

       

                (d) a
description of any retroactive premium adjustment or other loss-sharing
arrangements. With respect to each such insurance policy: (1) the policy is
legal, valid, binding, enforceable, and in full force and effect; (2) the
policy will continue to be legal, valid, enforceable, and in full force and
effect on identical terms following the consummation of the transactions
contemplated hereby; (3) neither Limco nor any other party to the policy is
in breach or default (including with respect to the payment of premiums or the
giving of notices), and no 

       

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      event has occurred which, with notice or
the lapse of time, would constitute such a breach or default, or permit
termination, modification, or acceleration, under the policy; and (4) no
party to the policy has repudiated any provision thereof. Schedule 10.21
also describes any self-insurance arrangements affecting any of Limco’s
properties or operations. 

       

           10.22
Employee Benefit
Plans. 

       

                (a) Schedule 10.22
contains a true and complete list of all of the following agreements,
arrangements, practices, or plans, whether written or oral, which are presently
in effect with respect to Limco and under which Limco continues to have
liability or obligations thereunder: (i) “employee pension benefit plans” and
“employee benefit plans” as defined respectively in Section 3(2) and 3(3)
of ERISA, including “multiemployer” plans as defined in Section 3(37) of
ERISA, or a “multiple employer” plan within the meaning of Section 4063 or
4064 of ERISA; and (ii) any other pension, profit sharing, supplemental
unemployment, retirement, deferred compensation, stock purchase, stock option,
incentive, bonus, vacation, severance, disability, hospitalization, medical
insurance or other employee benefit plans, practice, policies, arrangements, or
programs for the benefit of any employee, former employee, director, or agent of
Limco or any Limco Subsidiary, whether or not any of the foregoing is funded,
whether formal or informal, and whether or not subject to ERISA. (The plans or
programs described in clauses (i) and (ii) are herein collectively
referred to as the “Limco Plans.”) Limco has delivered or made available to
Calavo true and complete copies of all (a) Limco Plans, related trust
arrangements and funding arrangements and any amendments thereto, (b) the
most recent summary plan descriptions, together with the most recent summary
material modifications required under ERISA with respect to each Limco Plan,
(c) the most recent annual reports (series 5500 and schedules thereto)
required under ERISA with respect to each Limco Plan, (d) the two most
recent actuarial valuations, if applicable, prepared for any Limco Plan,
(e) the most recent IRS determination letters with respect to each Limco
Plan, and (f) all material employer communications relating to each such
Limco Plan. 

       

                (b) Limco
and its Subsidiaries are in material compliance with the requirements prescribed
by any and all statutes, orders, governmental rules or regulations applicable to
the Limco Plans, and all reports and disclosures relating to the Limco Plans
required to be filed with or furnished to governmental agencies, participants or
beneficiaries prior to the Initial Closing Date have been or will be filed or
furnished in a timely manner and in accordance with applicable law. 

       

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                (c) Except
as described in Schedule 10.22, neither Limco nor any Limco Subsidiary has
ever contributed or been required to contribute to any multiemployer plan as
defined in Section 3(37) of ERISA. 

       

                (d) Neither
Limco, any Limco Subsidiary nor any other “disqualified person” or “party in
interest” (as defined in Section 4975 of the Code and Section 3 of
ERISA), has engaged in any “prohibited transaction” as such term is defined in
Section 4975 of the Code or Section 406 of ERISA, which could subject
any of the Limco Plans (or their related trusts), Limco, any Limco Subsidiary or
any officer, director, or employee of Limco or any Limco Subsidiary or any
trustee, administrator or any other fiduciary of any of the Limco Plans to tax
or penalty imposed under Section 4975 of the Code or Section 502 of
ERISA. 

       

                (e) Except
as set forth in Schedule 10.22, there are no material actions, audits,
suits or claims pending (other than routine claims for benefits) or, to the best
knowledge of Limco , threatened, against any of the Limco Plans or any fiduciary
of any of the Limco Plans or against the assets of any of the Limco Plans.


       

                (f) Except
as set forth in Schedule 10.22, Limco and its Subsidiaries have no
obligation or liability to any retired or former employee under any disability
(long or short term), hospitalization, medical, dental or life insurance plans
(whether insured or self-insured) or other employee welfare plan as defined in
ERISA Section 3(1) maintained by Limco and its Subsidiaries, other than as
required by COBRA. 

       

                (g) Each
“group health plan” (within the meaning of Section 5000(b)(1) of the Code)
maintained by Limco or any of its affiliates has, as of the first day of each
group health plan’s first plan year beginning on or after July 1, 1986,
been administered in compliance with the continuation coverage requirements
contained in and as provided under Section 4980B of the Code and any
regulations promulgated or proposed thereunder. 

       

                (h) Except
as set forth in Schedule 10.22, no payment which will be or may be made by
Limco to any employee, former employee, director or agent thereof will or could
be characterized as an “excess parachute payment: within the meaning of
Section 280G(b)(1) of the Code and by reason of the transactions
contemplated herein. 

       

                (i) Limco,
to its knowledge, (i) is in compliance with all applicable federal and
state laws, rules and regulations respecting employment, employment practices,
terms and conditions of employment and wages and hours, in each case, with
respect to employees and former employees of Limco, (ii) has withheld all
amounts 

       

      16 

       

    


    
    

     

    

    
    

     

     

    
    

     

    
      required by law to be withheld from the
wages, salaries and other payments to employees and former employees of Limco,
and (iii) is not liable for any arrears of wages or any taxes or any
penalty to comply with any of the foregoing, except for such noncompliance,
failure to withhold or liability which would not individually or in the
aggregate have a material adverse effect on Limco and its Subsidiaries taken as
a whole. 

       

                (j) Except
as set forth in Schedule 10.22, neither the execution of this Agreement nor
the performance of the transactions contemplated herein will (either alone or
upon the occurrence of an additional event) constitute an event under any Limco
Plan that will or may result in any payment, acceleration, vesting or increase
in benefits with respect to any employee, former employee, or director of Limco.


       

                (k) Limco
has made, and makes, no representations or warranties respecting the adequacy of
estimates of or reserves (if any) for post-retirement medical benefits for
employees. 

       

           10.23
Foreign Corrupt
Practices Act. Neither Limco nor any Limco Subsidiary has made or offered
or agreed to offer anything of value to any foreign government official,
political party or candidate for governmental office nor have they taken any
action which would cause Limco or any Limco Subsidiary to be in violation of
Sections 103b or 104 of the Foreign Corrupt Practices Act of 1977, as
amended. 

       

           10.24
Sarbanes-Oxley
Compliance. Inasmuch as Limco is not a reporting company under the
Securities Exchange Act, it is not obligated to comply with the Sarbanes-Oxley
Act of 2002. Limco is not required by applicable laws and regulations to
register its Common Stock under Section 12(g) of the Securities Exchange Act.


       

           10.25
Transferability of the
Limco Shares. Subject to compliance with the right of first refusal
granted to Limco in Section 16.1: beginning on the first anniversary of the
Initial Closing Date, Calavo shall have the same right and ability as other
stockholders of Limco to sell the Limco Shares on the Pink Sheets (or on any
stock exchange, Nasdaq market or OTC Bulleting Board on which Limco’s Common
Stock is then traded) in accordance with the terms and conditions of
Rule 144 under the Securities Act; and beginning on the second anniversary
of the Initial Closing Date, the Limco Shares will be freely transferable by
Calavo in accordance with Rule 144(k) under the Securities Act. 

       

      ARTICLE 11

       

      REPRESENTATIONS AND WARRANTIES OF
CALAVO

       

           Calavo
makes the following representations and warranties to Limco, subject to and
qualified by any fact or facts disclosed in the Schedules that are provided to
Limco as required in this Agreement. Disclosure of an item in a Schedule
corresponding to a particular Section in this Agreement shall, should the
existence of the item or its contents be relevant to any other Section, be
deemed to be disclosed in that other Section whether or not an explicit
cross-reference appears as long as it is reasonably apparent that such
disclosure applies to any such other Section. 

       

           11.1 Organization and
Qualification of Calavo. Calavo is a corporation duly incorporated,
validly existing and in good standing under the laws of the State of California
and has the requisite corporate power and authority to own or lease and to
operate its properties and to carry on its business as now being conducted. The
copies of the Articles of Incorporation, as amended to date, certified by the
California Secretary of State, and of the Bylaws of the Calavo, 

       

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      certified by the Secretary of the Calavo
to be delivered to Limco at the Initial Closing, will be complete and correct as
of the Initial Closing Date. 

       

           11.2 Capitalization of Calavo and
Subsidiaries. The authorized capital stock of Calavo consists of One
Hundred Million (100,000,000) shares of Common Stock, ($.001) par value per
share, of which Thirteen Million Five Hundred Seven Thousand (13,507,000) shares
are issued and outstanding, and there are no treasury shares. Except as set
forth in Schedule 11.2 hereto, there are no outstanding options, warrants,
scripts, rights to subscribe to or commitments or agreements of any character
whatsoever relating to or securities or rights convertible into or exchangeable
for, shares of capital stock or other securities or interest in profits of
Calavo or any Calavo Subsidiary, and there are no contracts, commitments,
understandings, arrangements or restrictions by which Calavo or any Calavo
Subsidiary is now or in the future would be bound to issue any additional shares
of capital stock, other securities or interests in profits. All issued and
outstanding shares of capital stock of Calavo and each corporate Calavo
Subsidiary are duly authorized, validly issued, fully paid and nonassessable.
All voting rights in Calavo and each Calavo Subsidiary are vested exclusively in
common stock. On the Initial Closing Date, the Calavo Shares will be
newly-issued, and free of all liens and encumbrances. On the Initial Closing
Date, the stock ownership of Calavo’s Subsidiaries will be as set forth in
Schedule 11.3 hereto and will be free of all liens and encumbrances. None
of the Calavo Common Stock is entitled to any preemptive right; and Calavo’s
Articles of Incorporation and Bylaws do not provide Calavo with a right of first
refusal to purchase any Calavo Common Stock or restrict the sale or other
transfer of any Calavo Common Stock. 

       

           11.3 Subsidiaries.
Schedule 11.3 hereto lists each corporation, which Calavo controls directly
or indirectly or in which Calavo has an ownership interest, direct or indirect,
of record or beneficially, whether in capital stock or other equity security,
each of which is referred to in this Agreement as a Subsidiary. Except as set
forth in Schedule 11.3, Calavo does not own, directly or indirectly, any
capital stock or other equity securities of any corporation or have any direct
or indirect equity or ownership interest in any business entity including,
without limitation, business vehicles in the nature of joint ventures and
partnerships. Each Calavo Subsidiary is duly organized, validly existing and in
good standing under the laws of its respective jurisdiction of organization, and
has the power and authority to own its properties and to carry on its business
as now conducted. Each Calavo Subsidiary is duly licensed, authorized or
qualified to transact business in, and is in good standing in each jurisdiction
in which the properties owned or leased or the activities conducted by it makes
such licensing, authorization or qualification necessary, except where the
failure to be so licensed, authorized qualified or the failure to be in such
good standing would not have a material adverse effect on the business,
financial condition or operations of Calavo and its Subsidiaries taken as a
whole. Schedule 11.3 hereto lists, for each Calavo Subsidiary, its form of
organization, if it is a corporation, the number of shares of capital stock or
other equity securities authorized, issued and outstanding, and the holders of
record and beneficially of all issued capital stock or other equity securities.


       

           11.4 Power and Authority.
Calavo has the requisite corporate power and authority to execute and deliver
this Agreement and to consummate the transactions contemplated hereby. The
execution and delivery of this Agreement by Calavo and the consummation by
Calavo of the transactions contemplated hereby have been duly authorized by the
Board of Directors of Calavo and no other corporate proceedings on the part of
Calavo are necessary to authorize this Agreement and the transactions
contemplated hereby. This Agreement has been duly executed and delivered by
Calavo and, assuming this Agreement constitutes a valid and binding obligation
of Limco, constitutes a valid and binding obligation of Calavo, enforceable
against Calavo in accordance with its terms, except to the extent that
enforceability may be limited by applicable bankruptcy, reorganization,
insolvency, moratorium or other laws affecting the enforcement of creditors’
rights in general and except to the extent that the availability of equitable
remedies, including specific performance, is subject to the discretion of the
court before which any proceeding therefor may be brought. 

       

           11.5 Investment. Calavo
understands that the Limco Shares have not been, and will not be, registered
under the Securities Act or under any state securities law, and are being
offered and sold in reliance upon federal and state exemptions for a transaction
not involving any public offering. Calavo (1) is acquiring the Limco Shares
solely for its own account for investment purposes, and not with a view to the
distribution thereof, (2) is a sophisticated investor with knowledge and
experience in business and financial matters, (3) has received certain
information concerning Limco and has had the opportunity to obtain additional
information as desired in order to evaluate the merits and the risks inherent in
holding the Limco Shares, (4) is able to bear the economic risk and lack of
liquidity inherent in holding the Limco Shares, and (5) is an Accredited
Investor. Calavo’s representations and warranties in 

       

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      this Section 11.5 shall not be
construed as prohibiting it from selling or otherwise transferring the Limco
Shares at any time subsequent to the first anniversary of the Initial Closing in
compliance with applicable federal and state securities laws and regulations and
in compliance with the right of first refusal contained in
Section 16.1.


       

           11.6 No Violation or
Conflict. Neither the execution and delivery of this Agreement by Calavo
nor the consummation of the transactions contemplated hereby nor compliance by
Calavo with any of the provisions hereof will violate, conflict with, or result
in a breach of any provision of, or constitute a default (or an event which,
with notice or lapse of time or both, would constitute a default) under, or
result in the termination of, or accelerate the performance required by, or
result in a right of termination or acceleration under, or result in the
creation of any lien upon any of the properties or assets of Calavo or any
Calavo Subsidiary under any of the terms, conditions or provisions of
(i) the Articles of Incorporation or the Bylaws of Calavo or any Calavo
Subsidiary, or (ii) any note, bond, mortgage, indenture, deed of trust,
license, lease, agreement or other instrument or obligation to which Calavo or
any Calavo Subsidiary is a party or to which they or any of their respective
properties or assets may be subject, or (iii) statute, regulation,
judgment, ruling, order, writ, injunction, decree, rule or regulation applicable
to Calavo or any Calavo Subsidiary or any of their respective properties or
assets, except for such violations, conflicts, breaches, defaults, terminations,
accelerations or creations of liens which, individually or in the aggregate,
would not have any material adverse effect on the business, operations or
financial conditions of Calavo and the Calavo Subsidiaries taken as a whole.


       

           11.7 Financial Statements and
Reductions. Except as set forth in Schedule 11.7, the consolidated
audited financial statements of Calavo and the Calavo Subsidiaries for the
fiscal year ended October 31, 2004, consisting of the consolidated balance
sheet as of such date and the related statements of income, shareholders’ equity
and cash flows for the year then ended (the “Financial Statements”), which
Financial Statements and the opinion of Deloitte and Touche thereon dated
January 12, 2005, have been furnished to Limco, present fairly, in all
material respects, the consolidated financial position of Calavo and the Calavo
Subsidiaries at October 31, 2004, and the results of their operations and
cash flows for the year then ended, in accordance with GAAP, applied on a
consistent basis throughout such period. Except as set forth in
Schedule 11.7, the Financial Statements, and all accompanying exhibits and
schedules were true, complete and correct in all material respects as of the
dates thereof, were prepared in accordance with GAAP, applied on a consistent
basis throughout such period, except as otherwise stated therein, and presented
fairly the financial position as at the date of, and the results of operations
for the periods covered by, such statements of the Calavo and the Calavo
Subsidiaries. The Most Recent Financial Statements of Calavo as of and for the
Most Recent Fiscal Month have not been prepared in accordance with GAAP, but
nevertheless present fairly in all material respects, the financial condition of
Calavo as of such date and the results of operations of Calavo for such periods
and are consistent with the books and records of Calavo. Calavo’s management has
disclosed, based on its most recent evaluation to Calavo’s auditors and the
audit committee of Calavo’s Board of Directors, (i) all significant
deficiencies in the design or operation of internal control over financial
reporting which are reasonably likely to adversely affect Calavo’s ability to
record, process, summarize and report financial information and (ii) any
fraud, whether or not material, that involves management or other employees who
have a significant role in Calavo’s internal control over financial reporting.


       

           11.8 Absence of Certain Changes
or Events. Except as and to the extent contemplated by this Agreement,
since the date of the Most Recent Financial Statements, Calavo has conducted its
business only in the ordinary course, and there has not been, with respect to
Calavo, (a) any material adverse change in or to such business,
(b) any material damage, destruction or loss (whether covered by insurance
or not), (c) any material change by Calavo in accounting methods,
principles or practices; or (d) any commitment, agreement or understanding
respecting any employee of Calavo which has or would have the effect of
increasing such employee’s compensation or benefits other than in accordance
with past Calavo policies. 

       

           11.9 Title to Assets.
Calavo owns and has title to its properties and assets as reflected in the
Financial Statements, subject to no material liens, mortgages, pledges,
encumbrances or charges of any kind, except as disclosed in the Financial
Statements or as disclosed in Schedule 11.9, and except for non-delinquent liens
for current taxes and assessments. All leases by which Calavo or its
Subsidiaries lease real or personal property are in good standing and are valid
and effective in accordance with their respective terms, and there exists no
material default or other occurrence or condition which would result in a
material default or termination of any of those leases. 

       

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           11.10
Material
Contracts. Set forth in Schedule 11.10 is a true and correct list,
with respect to Calavo and the Calavo Subsidiaries, of (i) all plans,
contracts or understandings providing for bonuses, pensions, options, deferred
compensation, retirement payments, royalty payments, profit sharing or similar
understandings with respect to any present or former officer, director or
consultant, (ii) any contract or agreement with any labor union,
(iii) any contract for the future purchase, acquisition or sale of products
or rights to products or performance of services over a period of more than
three months from the date hereof not made in the ordinary course of business,
(iv) all leases of real property, including all amendments and
modifications, (v) any contract containing covenants limiting the freedom
of Calavo or any of the Calavo Subsidiaries to compete in any line of business
or with any person; and (vi) every other contract to which Calavo or any of
its Subsidiaries is a party which could reasonably be expected to result in
annual payments by or to Calavo or any of its Subsidiaries in excess of Two
Hundred Thousand Dollars ($200,000) or cumulative payments by or to Calavo or
any of its Subsidiaries in excess of Two Hundred Thousand Dollars ($200,000),
except for contracts entered into in the ordinary course of business which are
terminable upon less than thirty (30) days’ notice by either party thereto
without penalty or liability (collectively, “Material Contracts”). Calavo
heretofore has delivered or made available to Limco true and correct copies of
all Material Contracts. Neither Calavo nor any of its Subsidiaries is in default
or breach, and no event has occurred or shall occur by reason of the
transactions contemplated herein which would constitute a default or breach,
where such default or breach would entitle another party thereto to accelerate
or terminate such Material Contract or otherwise impose a material penalty or
forfeiture thereunder (whether with or without notice, lapse of time or the
happening or occurrence of any other event), under any Material Contract. All
Material Contracts are valid and binding agreements, and to the knowledge of
Calavo, there are no facts or circumstances which make a default under any
Material Contract by any party thereto likely to occur subsequent to the date
hereof. 

       

           11.11
Compliance with
Applicable Laws. Except as set forth in Schedule 11.11, and except
for possible violations which individually or in the aggregate do not, and
insofar as reasonably can be foreseen, in the future will not, have a material
adverse effect on Calavo, Calavo and its Subsidiaries are in compliance with all
requirements of law, federal, state or local, and of all governmental bodies or
agencies having jurisdiction over it or the conduct of its business. Except as
set forth in Schedule 11.11, Calavo is not presently charged with, nor to
its knowledge, is Calavo under any investigation or the subject of any
threatened proceeding with respect to any violation of any statute, law,
ordinance, rule or regulation relating to Calavo. 

       

           11.12
Litigation and
Liabilities. Except as disclosed in Schedule 11.12, there are no
actions, suits, investigations or proceedings pending or, to the knowledge of
Calavo, threatened against Calavo or any Calavo Subsidiary; nor, to the
knowledge of Calavo, are there any facts or circumstances that could reasonably
be expected to result in a claim for damages that, if adversely determined,
would be reasonably likely to result in any claims against or obligations or
liabilities of Calavo or any of the Calavo Subsidiaries that, alone or in the
aggregate, would have any material adverse effect on Calavo. 

       

           11.13
Brokers, Finders,
Investment Bankers and Financial Advisors. No broker, finder, investment
banker or financial advisor is entitled to any brokerage, finder’s or other fee
or commission from Calavo in connection with the transactions contemplated by
this Agreement based upon arrangement made by or on behalf of Calavo. 

       

           11.14
Labor
Relations. To Calavo’s knowledge, it has not engaged in any unfair labor
practice, and has not illegally discriminated on the basis of age or sex in its
employment conditions or practices. Except as set forth in Schedule 11.14,
there are no unfair labor practice grievances or age or sex discrimination
complaints pending, or, to Calavo’s knowledge, threatened against Calavo before
any governmental entity and, to the knowledge of Calavo, there is no basis
therefor. 

       

           11.15
Environmental
Matters.

       

                (a) There
is no civil, criminal or administrative action, suit, claim, notice of violation
or proceeding pending or, to Calavo’s knowledge, threatened against Calavo
respecting the storage, use, release or burial of a hazardous substance (for the
purposes of this Agreement, as defined under any applicable federal, state or
local statute, rule, regulation or other law and whether solid, liquid or
gaseous) on, from or under premises occupied 

       

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      by Calavo; provided that the receding
representation and warranty shall not be applicable to the real property in
Santa Paula, California that Calavo leases from Limco. 

       

                (b) To
Calavo’s knowledge, it has no liability (absolute, accrued, contingent or
otherwise), including, without limitation, clean-up obligations or liabilities
to third parties for personal injuries or other torts, for any contamination of
air, soil or water with hazardous substances. 

       

                (c) Calavo
is, to its knowledge, operating its business in material compliance with all
Environmental Health and Safety Requirements. 

       

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           11.16
Intellectual
Property. Schedule 11.16 hereto contains an accurate and complete
list of all intellectual property (the “Intellectual Property”) owned by or
licensed to Calavo, together with registration data where applicable and
descriptive identification as appropriate. Calavo owns or has the right to use
all of the Intellectual Property used in or necessary for the conduct of its
business as now conducted, without any known material infringement upon, or
conflict with the rights of, or claim of ownership or other rights by, any other
person. Calavo has received no written notice of any claimed infringement or
conflict with respect to any of the foregoing. 

       

           11.17
Permits. Calavo
and each Calavo Subsidiary hold licenses, certificates, permits, franchises and
rights from all appropriate persons, governmental entities and public
authorities necessary for the conduct of their respective businesses as now
conducted, except where the failure to obtain the same would not have a material
adverse effect on the business operations or financial condition of Calavo.
Neither the execution or delivery of this Agreement nor the consummation of the
transactions contemplated herein will result in the termination of any license,
certificate, permit, franchise or right held by Calavo or any Calavo Subsidiary.


       

           11.18
Liabilities and
Disclosure. Calavo has no material liabilities of any nature, whether
accrued, absolute, contingent or otherwise (including, without limitation,
liabilities as guarantor or otherwise with respect to obligations of others),
except as stated or adequately reserved against in the Financial Statements,
disclosed in the Schedules hereto or incurred in the ordinary course of business
after April 30, 2005. There is, to the Calavo’s knowledge, no fact which,
in its reasonable judgment and belief, does or might materially and adversely
affect the business, prospects, condition, affairs or operations of Calavo or
any Calavo Subsidiary or any of their properties or assets which has not been
set forth in this Agreement or the Schedules. 

       

           11.19
Changes. Except
as set forth on Schedule 11.19, since the Most Recent Financial Statements,
there has not been any material adverse change in the business, financial
condition, results of operations or prospects of Calavo or any Calavo
Subsidiary, except such changes which could not, individually or in the
aggregate, have a material adverse effect on the business, financial condition
or results of operations of Calavo or any Calavo Subsidiary. 

       

           11.20
Tax Returns and
Payments. Except as set forth in Schedule 11.20, Calavo and its
Subsidiaries have timely filed all federal, state, and local tax returns which
were required to be filed by or with respect to Calavo or any of the Calavo
Subsidiaries, and have paid or, where payment is not yet required, have
established adequate tax reserves for the payment of all Taxes with respect to
the periods covered by such returns. Neither Calavo nor any of the Calavo
Subsidiaries have consented to any waiver or extension of any statute of
limitations relating to the assessment or collection of any federal, state or
local Tax. There are no deficiency assessments against Calavo or any of the
Calavo Subsidiaries. 

       

           11.21
Insurance
Policies. Schedule 11.21 sets forth the following information with
respect to each insurance policy (including policies providing property,
casualty, liability, and workers’ compensation coverage and bond and surety
arrangements) to which Calavo has been a party, a named insured, or otherwise
the beneficiary of coverage at any time from fiscal year 2003 to the date
hereof: 

       

                (a) the
name of the insurer, the name of the policyholder, and the name of each covered
insured; 

       

                (b) the
policy number and the period of coverage; 

       

                (c) the
scope (including an indication of whether the coverage was on a claims made,
occurrence, or other basis) and amount (including a description of how
deductibles and ceilings are calculated and operate) of coverage; and 

       

                (d) a
description of any retroactive premium adjustment or other loss-sharing
arrangements. With respect to each such insurance policy that has not
terminated: (1) the policy is legal, valid, binding, enforceable, and in
full force 

       

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      and effect; (2) the policy will
continue to be legal, valid, enforceable, and in full force and effect on
identical terms following the consummation of the transactions contemplated
hereby; (3) neither Calavo nor any other party to the policy is in breach
or default (including with respect to the payment of premiums or the giving of
notices), and no event has occurred which, with notice or the lapse of time,
would constitute such a breach or default, or permit termination, modification,
or acceleration, under the policy; and (4) no party to the policy has
repudiated any provision thereof. Schedule 11.21 also describes any
self-insurance arrangements affecting any of Calavo’s properties or operations.


       

           11.22
Employee Benefit
Plans.

       

                (a) Schedule 11.22
contains a true and complete list of all of the following agreements,
arrangements, practices, or plans, whether written or oral, which are presently
in effect with respect to Calavo and under which Calavo continues to have
liability or obligations thereunder: (i) “employee pension benefit plans” and
“employee benefit plans” as defined respectively in Section 3(2) and 3(3)
of ERISA, including “multiemployer” plans as defined in Section 3(37) of
ERISA, or a “multiple employer” plan within the meaning of Section 4063 or
4064 of ERISA; and (ii) any other pension, profit sharing, supplemental
unemployment, retirement, deferred compensation, stock purchase, stock option,
incentive, bonus, vacation, severance, disability, hospitalization, medical
insurance or other employee benefit plans, practice, policies, arrangements, or
programs for the benefit of any employee, former employee, director, or agent of
Calavo or any Calavo Subsidiary, whether or not any of the foregoing is funded,
whether formal or informal, and whether or not subject to ERISA. (The plans or
programs described in clauses (i) and (ii) are herein collectively
referred to as the “Calavo Plans.”) Calavo has delivered or made available to
Limco true and complete copies of all (a) Calavo Plans, related trust
arrangements and funding arrangement and any amendments thereto, (b) the
most recent summary plan descriptions, together with the most recent summary
material modifications required under ERISA with respect to each Calavo Plan,
(c) the most recent annual reports (series 5500 and schedules thereto)
required under ERISA with respect to each Calavo Plan, (d) the two most
recent actuarial valuations, if applicable, prepared for any Calavo Plan,
(e) the most recent IRS determination letters with respect to each Calavo
Plan, and (f) all material employer communications relating to each such
Calavo Plan. 

       

                (b) Calavo
and its Subsidiaries are in material compliance with the requirements prescribed
by any and all statutes, orders, governmental rules or regulations applicable to
the Calavo Plans, and all reports and disclosures relating to the Calavo Plans
required to be filed with or furnished to governmental agencies, 

       

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      participants or beneficiaries prior to
the Initial Closing Date have been or will be filed or furnished in a timely
manner and in accordance with applicable law. 

       

                (c) Except
as described in Schedule 11.22, neither Calavo nor any Calavo Subsidiary
has ever contributed or been required to contribute to any multiemployer plan as
defined in Section 3(37) of ERISA. 

       

                (d) Neither
Calavo, any Calavo Subsidiary nor any other “disqualified person” or “party in
interest” (as defined in Section 4975 of the Code and Section 3 of
ERISA), has engaged in any “prohibited transaction” as such term is defined in
Section 4975 of the Code or Section 406 of ERISA, which could subject
any of the Calavo Plans (or their related trusts), Calavo, any Calavo Subsidiary
or any trustee, administrator or any other fiduciary of any of the Calavo Plans
to tax or penalty imposed under Section 4975 of the Code or
Section 502 of ERISA. 

       

                (e) Except
as set forth in Schedule 11.22, there are no material actions, audits,
suits or claims pending (other than routine claims for benefits) or, to the
knowledge of Calavo , threatened, against any of the Calavo Plans or any
fiduciary of any of the Calavo Plans or against the assets of any of the Calavo
Plans. 

       

                (f) Except
as set forth in Schedule 11.22, Calavo and its Subsidiaries have no
obligation or liability to any retired or former employee under any disability
(long or short term), hospitalization, medical, dental or life insurance plans
(whether insured or self-insured) or other employee welfare plan as defined in
ERISA Section 3(1) maintained by the Calavo Group, other than as required
by COBRA. 

       

                (g) Each
“group health plan” (within the meaning of Section 5000(b)(1) of the Code)
maintained by Calavo or any of its affiliates has, as of the first day of each
group health plan’s first plan year beginning on or after July 1, 1986,
been administered in compliance with the continuation coverage requirements
contained in and as provided under Section 4980B of the Code and any
regulations promulgated or proposed thereunder. 

       

                (h) Except
as set forth in Schedule 11.22, no payment which will be or may be made by
Calavo to any employee, former employee, director or agent thereof will or could
be characterized as an “excess parachute payment: within the meaning of
Section 280G(b)(1) of the Code and by reason of the transactions
contemplated herein. 

       

      24 

       

    


    
    

     

    

    
    

     

     

    
    

     

    
                (i) Calavo,
to its knowledge, (i) is in compliance with all applicable federal and
state laws, rules and regulations respecting employment, employment practices,
terms and conditions of employment and wages and hours, in each case, with
respect to employees and former employees of Calavo, (ii) has withheld all
amounts required by law to be withheld from the wages, salaries and other
payments to employees and former employees of Calavo, and (iii) is not
liable for any arrears of wages or any taxes or any penalty to comply with any
of the foregoing, except for such noncompliance, failure to withhold or
liability which would not individually or in the aggregate have a material
adverse effect on Calavo and its Subsidiaries taken as a whole. 

       

                (j) Except
as set forth in Schedule 11.22, neither the execution of this Agreement nor
the performance of the transactions contemplated herein will (either alone or
upon the occurrence of an additional event) constitute an event under any Calavo
Plan that will or may result in any payment, acceleration, vesting or increase
in benefits with respect to any employee, former employee, or director of
Calavo. 

       

                (k) Calavo
has made, and makes, no representations or warranties respecting the adequacy of
estimates of or reserves (if any) for post-retirement medical benefits for
employees. 

       

           11.23
Exchange Act
Reports. As of their respective dates, all reports filed by Calavo with
the Securities and Exchange Commission, after October 31, 2003 under the
Securities Exchange Act conformed in all material respects with the requirements
of the Securities Exchange Act, the Sarbanes-Oxley Act and the rules and
regulations of the Commission thereunder. 

       

           11.24
Foreign Corrupt
Practices Act. Neither Calavo nor any Calavo Subsidiary has made or
offered or agreed to offer anything of value to any foreign government official,
political party or candidate for governmental office, nor have they taken any
action which would cause Calavo or any Calavo Subsidiary to be in violation of
Sections 103b or 104 of the Foreign Corrupt Practices Act of 1977, as
amended. 

       

      ARTICLE 12

       

      COVENANTS OF LIMCO

       

           12.1 Conduct of Business Prior to
Initial Closing. Except as set forth in Schedule 12.1, between the
date of this Agreement and the Initial Closing Date, Limco and each Limco
Subsidiary will do the following, unless Calavo shall otherwise consent in
writing: 

       

                (a) Conduct
Limco’s business only in the ordinary and usual course and refrain from changing
or introducing any method of management or operations except in the ordinary
course of business and consistent with prior practices; 

       

                (b) Except
for the possible sale of the Mission Shares to Mission and the repurchase of
6,906 shares of Limco common stock from Mission as described in Article 4
above, refrain from making any purchase, sale or disposition of any asset or
property other than in the ordinary course of business, from purchasing 

       

      25 

       

    


    
    

     

    

    
    

     

     

    
    

     

    
      any capital asset costing more than Five
Hundred Thousand Dollar ($500,000) and from mortgaging, pledging, subjecting to
a lien or otherwise encumbering any of Limco’s properties or assets; 

       

                (c) Refrain
from amending, modifying, extending or terminating any real property or
equipment lease, except as otherwise provided in this Agreement; 

       

                (d) Refrain
from incurring any contingent liability as a guarantor or otherwise with respect
to the obligations of others, and from incurring any other contingent or fixed
obligation or liabilities except those that are usual and normal in the ordinary
course of business; 

       

                (e) Except
in accordance with past practice refrain from declaring, setting aside or paying
any dividend, making any other distribution in respect of its capital stock or
making any direct or indirect redemption, purchase or other acquisition of its
stock; 

       

                (f) Refrain
from taking any action which would accelerate payment or other obligations of
Limco to its employees, and from making any change in the compensation payable
or to become payable to any of its officers, directors, employees or agents,
except as contemplated by this Agreement; 

       

                (g) Refrain
from paying any loans from its officers or directors or making any other
payments to any of them, except normal salary payments in amount not exceeding
those theretofore paid; 

       

                (h) Use
reasonable efforts to prevent any change with respect to its management and
supervisory personnel and banking arrangements except as contemplated by this
Agreement; 

       

                (i) Not
amend, change or terminate any Material Contract; 

       

                (j) Not
change the Certificate of Incorporation or Bylaws of Limco or any Limco
Subsidiary; and 

       

                (k) Not
issue any capital stock at less than the fair market value of such stock on the
date of its issuance, except pursuant to a stock option or warrant that is
outstanding as of the date of this Agreement or except for an option that is
subsequently granted pursuant to an employee stock plan with an exercise price
of at least the fair market value of such capital stock as of the grant date;
and 

       

                (l) Not
take any action which would cause the acceleration of any payments or other
obligations of Limco under any of such contracts without the prior consent of
Calavo. 

       

      26 

       

    


    
    

     

    

    
    

     

     

    
    

     

    
           12.2 Access. Limco shall
afford to Calavo and to the authorized officers, employees and agents of Calavo,
complete access at all reasonable times, from the date hereof to the Initial
Closing Date, to their officers, employees, agents, properties, books, records
and contracts, and shall furnish Calavo all financial, operating and other data
and information as Calavo, through its officers, employees or agents, may
reasonably request, provided such requests for access and information do not
unreasonably interfere with the operations of Limco or any of the Limco
Subsidiaries. 

       

           12.3 Reasonable Efforts Regarding
Mission Shares. After providing notice to Calavo pursuant to
Section 9.4 hereof designating the Misison Closing Date, Limco shall
deliver to Mission a letter signed by Limco setting forth the purchase price and
all relevant terms for the purchase of the Mission Shares by Calavo, and
notifying Mission that the option periods with respect to the rights of first
refusal for the Mission Share have commenced. Calavo and Limco shall agree upon
the date that such letter shall be delivered to Mission, but such date shall not
be so late as to cause the Mission Closing Date to be more than 180 days
following the Initial Closing Date.
12.4 Reasonable Efforts.
Limco shall use its reasonable efforts to cause all of the representations and
warranties set forth in Article 9 to be true and correct on and as of the
Initial Closing Date; to perform all of the covenants set forth in this
Article 11; and to cause all of the conditions set forth in Article 15
to occur on or before the Closing Date. 

       

      ARTICLE 13

       

      COVENANTS OF CALAVO

       

           13.1 Conduct of Business Prior to
Initial Closing. Except as set forth in Schedule 13.1, between the
date of this Agreement and the Closing Date, Calavo and each Calavo Subsidiary
will do the following, unless Limco shall otherwise consent in writing: 

       

                (a) Conduct
Calavo’s business only in the ordinary and usual course and refrain from
changing or introducing any method of management or operations except in the
ordinary course of business and consistent with prior practices; 

       

                (b) Refrain
from making any purchase, sale or disposition of any asset or property other
than in the ordinary course of business, from purchasing any capital asset
costing more than Five Hundred Thousand Dollars ($500,000) and from mortgaging,
pledging, subjecting to a lien or otherwise encumbering any of Calavo’s
properties or assets; provided, however, that no provision of this Agreement
shall be construed as requiring Limco’s consent to a merger between Calavo and
Mission or other transaction between Calavo and Mission or as prohibiting Calavo
from engaging in such merger or other transaction; 

       

                (c) Refrain
from amending, modifying, extending or terminating any real property or
equipment lease, except as otherwise provided in this Agreement; 

       

                (d) Refrain
from incurring any contingent liability as a guarantor or otherwise with respect
to the obligations of others, and from incurring any other contingent or fixed
obligation or liabilities except those that are usual and normal in the ordinary
course of business and except for indebtedness incurred for the purpose of
purchasing the Limco Shares and the Mission Shares; 

       

      27 

       

    


    
    

     

    

    
    

     

     

    
    

     

    
                (e) Except
in accordance with past practice, refrain from declaring, setting and or paying
any dividend, making any other distribution in respect of its capital stock or
making any direct or indirect redemption, purchase or other acquisition of its
stock; 

       

                (f) Refrain
from taking any action which would accelerate payment or other obligations of
Calavo to its employees, and from making any change in the compensation payable
or to become payable to any of its officers, directors, employees or agents,
except as contemplated by this Agreement; 

       

                (g) Refrain
from paying any loans from its officers or directors or making any other
payments to any of them, except normal salary payments in amount not exceeding
those theretofore paid; 

       

                (h) Use
reasonable efforts to prevent any change with respect to its management and
supervisory personnel and banking arrangements except as contemplated by this
Agreement; 

       

                (i) Not
amend, change or terminate any Material Contract; 

       

                (j) Not
change the Articles of Incorporation or Bylaws of Calavo or any Calavo
Subsidiary; 

       

                (k) Not
issue any capital stock as less than the fair market value of such stock on the
date of its issuance, except pursuant to a stock option or warrant that is
outstanding as of the date of this Agreement or except for an option that is
subsequently granted pursuant to an employee stock plan with an exercise price
of at least the fair market value of such capital stock as of the grant date;
and 

       

                (l) Not
take any action which would cause the acceleration of any payments or other
obligations of Calavo under any of such contracts without the prior consent of
Limco. 

       

           13.2 Access. Calavo shall
afford to Limco and to the authorized officers, employees and agents of Limco,
complete access at all reasonable times, from the date hereof to the Initial
Closing Date, to their officers, employees, agents, properties, books, records
and contracts, and shall furnish Limco all financial, operating and other data
and information as Limco, through its officers, employees or agents, may
reasonably request, provided such requests for access and information do not
unreasonably interfere with the operations of Calavo or any of the Subsidiaries.


       

           13.3 Reasonable Efforts.
Calavo shall use its reasonable efforts to cause all of the representations and
warranties set forth in Article 11 to be true and correct on and as of the
Initial Closing Date; to perform all of the covenants set forth in this
Article 13; and to cause all of the conditions set forth in Article 14
to occur on or before the Initial Closing Date. 

       

      ARTICLE 14

       

      CONDITIONS PRECEDENT TO LIMCO’S
OBLIGATION TO CLOSE

       

           14.1 General. The
obligation of Limco to consummate the transactions contemplated by this
Agreement shall be subject to the satisfaction, on or before the Initial Closing
Date, of each and every one of the following conditions all or any of which may
be waived, in whole or in part, by Limco for the purpose of consummating such
transaction, but without prejudice to any other right or remedy which Limco may
have hereunder as a result of any 

       

      28 

       

    


    
    

     

    

    
    

     

     

    
    

     

    
      misrepresentation by, or breach of any
covenant or warranty of, Calavo contained in this Agreement or any certificate,
Schedule, document or instrument furnished by Calavo hereunder. 

       

           14.2 Representations and
Warranties. The representations and warranties made by Calavo in this
Agreement and in any certificate, schedule, document or instrument furnished to
Limco at or prior to the Initial Closing shall be true and correct in all
respects on the Initial Closing Date with the same force and effect as though
such representations and warranties had been made on and as of such date,
(i) except for changes contemplated by this Agreement, (ii) except
that any representation or warranty that, by its express terms, speaks only as
of a specified earlier date need only be accurate as of such earlier date, and
(iii) except where the failure of such representations and warranties to be
accurate, individually or in the aggregate, has not had a Material Adverse
Change or Condition with respect to Calavo and would not be reasonably expected
to have a Material Adverse Change or Conditions with respect to Calavo.. 

       

           14.3 Investigations Fail to
Disclose Material Adverse Change or Condition. Investigations by Limco
and its representatives shall not have disclosed any Material Adverse Change or
Condition with respect to Calavo. 

       

           14.4 Covenants and
Agreements. Calavo shall have duly performed in all material respects all
of the material covenants and agreements to be performed by it hereunder on or
prior to the Initial Closing Date. 

       

           14.5 No Adverse Changes.
Since the date of this Agreement, Calavo shall not have suffered any Material
Adverse Change or Condition including any delisting of Calavo’s common stock on
the NASDAQ Securities Market. 

       

           14.6 No Proceedings. No
preliminary or permanent injunction or other order, decree or ruling issued by a
court of competent jurisdiction or by a governmental, regulatory or
administrative agency or commission, nor any statute, rule, regulation or
executive order promulgated or enacted by and governmental authority, shall be
in effect which would prevent or hinder the consummation of the transactions
contemplated under this Agreement or which challenges the validity or
enforceability of this Agreement or any term or provision hereof. 

       

           14.7 Certificates. Limco
shall have received a Certificate of Calavo, dated the Initial Closing Date,
signed by its Chief Executive Officer, to the effect that, Sections 14.2,
14.4 and 14.5 have been fulfilled and such other certificates and documents as
Limco may reasonably request and as provided in Article 9 hereof. 

       

      ARTICLE 15

       

      CONDITIONS PRECEDENT TO CALAVO’S
OBLIGATION TO CLOSE

       

           15.1 General. The
obligation of Calavo to consummate the transactions contemplated by this
Agreement shall be subject to the satisfaction, on or before the Initial Closing
Date, of each and every one of the following conditions all or any of which may
be waived, in whole or in part, by Calavo for the purpose of consummating such
transaction, but without prejudice to any other right or remedy which Calavo may
have hereunder as a result of any misrepresentation by, or breach of any
covenant or warranty of, Limco contained in this Agreement or any certificate,
Schedule, document or instrument furnished by Limco hereunder. 

       

           15.2 Investigations Fail to
Disclose Material Adverse Change or Condition. Investigations by Calavo
and its representatives shall not have disclosed any Material Adverse Change or
Condition with respect to Limco. 

       

           15.3 Representations and
Warranties. The representations and warranties made by Limco in this
Agreement and in any certificate, schedule, document or instrument furnished to
Calavo at or prior to the Initial Closing shall be true and correct in all
respects on the Initial Closing Date with the same force and effect as though
such representations and warranties had been made on and as of such date,
(i) except for changes contemplated by this Agreement, (ii) except
that any representation or warranty that, by its express terms, speaks only as
of a specified earlier date need only be accurate as of such earlier date, and
(iii) except where the failure of such representations and warranties to be
accurate, individually or in the aggregate, has not had a Material Adverse
Change or Conditions with respect to Limco and would not be reasonably expected
to have a Material Adverse Change or Conditions with respect to Limco. 

       

           15.4 Covenants and
Agreements. Limco shall have duly performed in all material respects all
of the material covenants and agreements to be performed by it hereunder on or
prior to the Initial Closing Date. 

       

      29 

       

    


    
    

     

    

    
    

     

     

    
    

     

    
           15.5 No Adverse Changes.
Since the date of this Agreement, Limco shall not have suffered any Material
Adverse Change or Conditions, including, without limitation, the cessation of
trading of Limco’s Common Stock on the Pink Sheets. 

       

           15.6 No Proceedings. No
preliminary or permanent injunction or other order, decree or ruling issued by a
court of competent jurisdiction or by a governmental, regulatory or
administrative agency or commission, nor any statute, rule, regulation or
executive order promulgated or enacted by any governmental authority, shall be
in effect which would prevent or hinder the consummation of the transactions
contemplated under this Agreement or which challenges the validity or
enforceability of this Agreement or any term or provision hereof. 

       

           15.7 Certificates. Calavo
shall have received a Certificate of Limco, dated the Initial Closing Date,
signed by its Chief Executive Officer, to the effect that, the conditions
specified in this Sections 15.3, 15.4 and 15.5 have been fulfilled and such
other certificates and documents as Calavo may reasonably request and as
provided in Article 9 hereof. 

       

      ARTICLE 16

       

      RIGHTS OF FIRST REFUSAL

       

           16.1 Limco Shares. Calavo
shall not sell, transfer, assign, encumber or in any way dispose of any of the
Limco Shares or any right or interest therein without first giving written
notice to Limco in the manner provided in Article 20 hereof of Calavo’s
intent to dispose of the Limco Shares. Unless Calavo proposed to sell the Limco
Shares on the Pink Sheets or other public market on which Limco’s Common Stock
is then traded, such notice shall specifically set forth the identity of the
proposed transferee, the number of Limco Shares to be transferred, the price per
share or other consideration for the Limco Shares and all terms and conditions
of the proposed transaction, including the terms of payment. For a period of
sixty (60) days, following receipt of Calavo’s notice, Limco shall have the
option to purchase all, but not less than all, the Limco Shares identified, at
the same price and on the same terms as set forth in Calavo’s written notice. If
Limco elects to exercise its option, it shall notify Calavo in writing within
such period and shall pay the purchase price in the same manner as designated in
Calavo’s notice. Any sale of all or substantially all of the assets of Calavo or
a “change in control” of Calavo by the acquisition of a majority of its voting
stock by any third party or group shall be deemed a “sale” of the Limco Shares
for purposes of triggering the right of refusal provided herein. Upon the
occurrence of such any event, Calavo shall so notify Limco in writing. For a
period of 60 days following receipt of such notice, Limco shall have the
right to repurchase all, but not less than all, the Limco Shares at a price per
share, payable in cash, equal to the average price per share over the 60-day
period preceding Calavo’s notice at which Limco’s shares traded in the “pink
sheets” or other public market. If Calavo proposes to sell a specified number of
the Limco Shares on the Pink Sheets or other public market on which Limco’s
Common Stock is then traded, for a period of 30 days following receipts of
such notice Limco shall have the right to repurchase all or some of the
specified Limco shares at a price per share, payable in cash, equal to the
average price per share over the 60-day period preceding Calavo’s notice at
which Limco’s shares traded in the “pink sheets” or other public market. Limco’s
option is subject to any and all legal restrictions on the ability of a
corporation to repurchase its own shares. In order to facilitate Limco’s right
of first refusal, Calavo agrees that it will not assign any of the Limco Shares
to a nominee title holder. Calavo shall be entitled to sell or otherwise
transfer any and all Limco Shares that Limco does not purchase under the right
of first refusal granted by this Section 16.1, and any such sold or
transferred shares shall cease to be subject to the right of first refusal
contained in this Section 16.1 

       

           16.2 Calavo Shares. Limco
shall not sell, transfer, assign, encumber or dispose of any of the Calavo
Shares or any right or interest therein without first giving written notice to
Calavo in the manner provided in Article 20 hereof of Limco’s intent to
dispose of the Calavo Shares. Unless Limco proposes to sell the Calavo Shares on
the Nasdaq market or other public market on which Calavo’s Common Stock is then
traded, such notice shall specifically set forth the identity of the proposed
transferee, the number of Calavo Shares to be transferred, the price per share
or other consideration for the Calavo Shares and all terms and conditions of the
proposed transaction, including the terms of payment. For a period of sixty
(60) days, following receipt of Limco’s notice, Calavo shall have the
option to purchase all, but not less than all, the Calavo Shares identified, at
the same price and on the same terms as set forth in Limco’s written notice. If
Calavo elects to exercise its option, it shall notify Limco in writing within
such period and shall pay the purchase price in the same manner as designated in
Limco’s notice. Any sale of all or substantially all of the assets of Limco or a
“change in control” of Limco by the acquisition of a majority of its voting
stock by any third party or group shall be deemed a “sale” of the Calavo Shares
for purposes of triggering the right of refusal provided herein. Upon the
occurrence of such any event, Limco so shall notify Calavo in writing. 

       

      30 

       

    


    
    

     

    

    
    

     

     

    
    

     

    
      For a period of 60 days following
receipt of such notice, Calavo shall have the right to repurchase all, but not
less than all, the Calavo Shares at a price per share, payable in cash, equal to
the average price per share over the 60-day period preceding Limco’s notice at
which Calavo’s shares traded on the Nasdaq market or other public market. If
Limco proposes to sell a specified number of the Calavo Shares on the Nasdaq
market or other public market on which Calavo’s Common Stock is then traded, for
a period of 30 days following receipts of such notice Calavo shall have the
right to repurchase all or some of the specified Calavo Shares at a price per
share, payable in cash, equal to the average price per share over the 60-day
period preceding Limco’s notice at which Calavo’s shares traded on the Nasdaq
market or other public market. Calavo’s option is subject to any and all legal
restrictions on the ability of a corporation to repurchase its own shares. In
order to facilitate Calavo’s right of first refusal, Limco agrees that it will
not assign any of the Calavo Shares to a nominee title holder. Limco shall
entitled to sell or otherwise transfer any and all Calavo Shares that Calavo
does not purchase under the right of first refusal granted by this
Section 16.2, and any such sold or transferred shares shall cease to be
subject to the right of first refusal contained in this Section 16.2 

       

      ARTICLE 17

       

      PUBLIC DISCLOSURE

       

           Limco and
Calavo shall consult with each other, and to the extent practicable, agree
before issuing any press release or otherwise making any public statement with
respect to the transactions contemplated by this Agreement and will not issue
any such press release or make any such public statement prior to such
consultation, except as may be required by law or any listing agreement with the
NASDAQ Stock Market. Calavo agrees to report the execution of this Agreement on
a Form 8-K by the date prescribed by the Securities Exchange Act and to report
the closing of the transactions contemplated by the Initial Closing on a Form
8-K by the date prescribed by the Securities Exchange Act. 

       

      ARTICLE 18

       

      TERMINATION

       

           18.1 Termination. This
Agreement may be terminated at any time prior to the Initial Closing Date:


       

                (a) By
mutual agreement of Limco and Calavo; or 

       

                (b) By
Calavo, at any time after August 1, 2005, if the Initial Closing has not
occurred by such date and the failure of the Initial Closing to occur is not
caused by a breach of this Agreement by Calavo; or 

       

                (c) By
Limco, at any time after August 1, 2005, if the Initial Closing has not
occurred by such date and the failure of the Initial Closing to occur is not
caused by a breach of this Agreement by Limco. 

       

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           18.2 Effect of
Termination. In the event of the termination of this Agreement pursuant
to clause (a), (b) or (c) of Section 18.1, this Agreement shall
forthwith become void and have no effect, without any further liability or
obligation on the part of either party to the other party. However, if the
Initial Closing does not occur because of the intentional breach of this
Agreement by either Calavo or Limco, (i) the breaching party shall
reimburse the non-breaching party for its legal fees, accounting fees and other
out-of-pocket expenses that have been incurred by the non-breaching party in
connection with this Agreement, payable within ten days after receipt from the
non-breaching party of documentation of such expenses in reasonable detail, and
(ii) the breaching party shall be liable to the non-breaching party for
damages incurred by the non-breaching party as a result of the breaching party’s
intentional breach of this Agreement. The non-breaching party shall not,
however, be entitled to obtain an award of punitive damages. 

       

      ARTICLE 19

       

      SURVIVAL OF REPRESENTATIONS;
INDEMNIFICATIONS

       

           19.1 Survival. All
representations and warranties contained in or made pursuant to this Agreement
(including Exhibits and Schedules hereto) or in any certificate, document or
statement delivered pursuant hereto (the “Ancillary Documents”) shall be deemed
made by the parties on the respective dates of their execution of this Agreement
(except for representations and warranties that specifically speak as of an
earlier date) and shall be deemed remade on the Initial Closing Date, and all
representations and warranties (as they may be supplemented) and all covenants,
indemnities and agreements shall survive the Initial Closing and any
investigation conducted by any party for a period of two (2) years (unless
a claims for indemnity has been timely made within such period as set forth
below). Except as provided in Section 19.2.4, Calavo’s investigation of
Limco and its Subsidiaries and their business, assets and liabilities shall in
no manner be construed as relieving Limco from liability under this Agreement
for a breach of any representation or warranty made in this Agreement, and
Limco’s investigation of Calavo and its subsidiaries and their business, assets
and liabilities shall in no manner be construed as relieving Calavo from
liability under this Agreement for a breach of any representation or warranty of
Calavo made in this Agreement. 

       

           19.2 Indemnification.

       

                19.2.1
Limco.

       

      After the Initial Closing and subject to
Sections 19.2.3, and 19.2.4, Limco shall indemnify, defend and hold Calavo,
its shareholders, directors, officers, employees and agents harmless from, and
reimburse Calavo for, any damage, loss, fee, liability, cost or expense
(including, without limitation, the reasonable fees and expenses of counsel and
others) resulting or arising from, or incurred in connection with or based upon:
(i) the inaccuracy as of the Initial Closing Date of any representation or
warranty of Limco which is contained in or made pursuant to this Agreement or
any Ancillary Documents and, (ii) Limco’s breach of or failure to perform
any of its covenants or agreements contained in or made pursuant to this
Agreement or any Ancillary Document. 

       

                19.2.2
Calavo. After
the Initial Closing and subject to Sections 19.2.3 and 19.2.4, Calavo shall
indemnify and hold Limco, and its directors, officers, employees and affiliates
harmless from, and reimburse for any damage, loss, fee liability, cost or
expense (including, without limitation, the reasonable fees and expenses of
counsel and others) resulting or arising from, or incurred in connection with or
based upon, (i) the inaccuracy as of the Initial Closing Date of any
representation or warranty of Calavo which is contained in or made pursuant to
this Agreement or any Ancillary Document; and (ii) Calavo’s breach of or
failure to perform, comply with or fulfill any covenant or agreement of Calavo
contained in or made pursuant to this agreement or any Ancillary Document.


       

                19.2.3
Notice/Defense.
Upon discovery of any breach or claim hereunder or upon receipt of any notice of
any claim or suit subject to indemnification under Section 19.2.1 or 19.2.2
above, the party seeking indemnification (“Indemnified Party”) shall promptly
give notice thereof (and in no event later than thirty days after receipt of
actual notice thereof) to the party or parties from whom indemnification is
sought (“Indemnifying Party”) at the notice address pursuant to Article 20
stating in reasonable detail the representation, warranty or other claims with
respect to which indemnity is demanded, the facts or alleged facts giving rise
thereto, and the amount of liability or asserted liability with respect to which
indemnity is sought, and in the case of a claim asserted against the party
seeking indemnity, the Indemnified Party shall thereafter tender to the
Indemnifying Party the defense of such claims at the sole cost and expense of
the Indemnifying Party. Despite such a tender of defense, the party seeking
indemnification shall in any 

       

      32 

       

    


    
    

     

    

    
    

     

     

    
    

     

    
      case have a right to participate in the
defense of any such tendered claim or suit; provided that such participation
shall be at such party’s sole cost and expense after the Indemnifying Party has
accepted such tender of defense, and that the Indemnifying Party shall have
control of the defense. In the event that the Indemnifying Party does not
promptly and affirmatively accept such tender of defense of any claim or suit,
then the Indemnifying Party shall thereafter additionally become liable for all
costs incurred by the party seeking indemnification (including reasonable
attorneys’ fees) in enforcing such indemnification claim and/or defending
against such claim or suit which is subject to indemnification. No party which
is entitled to indemnification under Section 19.2.1 or 19.2.2 shall settle
or compromise any such third party claim without the prior written consent of
the party from which it seeks or may seek indemnification, which consent shall
not be unreasonably withheld. The Indemnifying Party shall not settle the claim
or suit without the written consent of the Indemnified Party, which shall not be
unreasonably withheld; provided, however, that the Indemnified Party shall not
be required to give its consent unless the third-party claimant delivers to the
Indemnified Party an unconditional release of all liability with respect to the
claim or legal proceeding. Any party seeking indemnification under Section
19.2.1 or 19.2.2 shall take all reasonable actions in the defense of third party
claims for which indemnification is sought. If notice is not given to the
Indemnifying Party as specified, or if any claim or suit be compromised or
settled in any manner without the prior written consent (which consent shall not
be unreasonably withheld) of the Indemnifying Party, then no liability shall be
imposed upon the Indemnifying Party hereunder with respect to such claim. 

       

                19.2.4
Waiver of Breach;
Indemnification Limitations.

       

                          (a)Notwithstanding
anything to the contrary in this Agreement, the completion of the Initial
Closing shall conclusively evidence the waiver by each party, for all purposes,
of any occurring prior to the Initial Closing by the other party of any
representation, warranty, covenant or agreement and of any right to
indemnification with respect to such breach, if (but only if ) such breach was
expressly disclosed by the breaching party in writing to the non-breaching party
prior to the Initial Closing and if the non-breaching party nevertheless elected
to complete the Initial Closing. 

       

                (b) Notwithstanding
anything to the contrary in this Agreement, no claim shall be made by Calavo or
Limco for indemnification unless and until the aggregate indemnified damages,
losses, fees, liabilities, costs and expenses incurred by the indemnified party
exceed Five Hundred Thousand Dollars ($500,000), in which event the indemnified
party shall be entitled to full indemnification for its aggregate indemnified
damages, losses, fees, liabilities, costs and expenses in excess of Five Hundred
Thousand Dollars ($500,000). The indemnified damages, losses, fees, liabilities,
cots and expenses of an indemnified party pursuant to this Article 19 shall
be net of any insurance proceeds actually received by the indemnified party with
respect to the indemnified amounts and shall be net of any tax benefits actually
realized by the indemnified party as a result of payments made by the
indemnified party in connection with the indemnified losses. 

       

                (c) This
Article 19 sets forth the sole and exclusive remedies of Calavo and Limco
to obtain monetary damages and reimbursement form the other party after the
Initial Closing for a breach of any representation, warranty or covenant that is
contained in this Agreement or in an exhibit, schedule or other document that is
delivered at or prior to the Initial Closing pursuant to this Agreement. 

       

      ARTICLE 20

       

      MISCELLANEOUS

       

           20.1 Notices. Any notice
or other communication required or which may be given hereunder shall be in
writing and shall be delivered personally, sent by facsimile, or sent by
certified, registered or express mail, postage prepaid, and shall be deemed
given when so delivered personally, telegraphed or sent by facsimile, or if
mailed, three (3) days after the date of deposit with the U.S. Postal
Service, postage and applicable charges prepaid, addressed as follows: 

       

      
        	 	 	 	 	 
	
                
                

              	 	If to Limco:	 	 
	
                 

              	 	 	 	 
	
                
                

              	 	Limoneira Company	 	 
	
                 

              	 	 	 	 
	
                
                

              	 	1141 Cummings Road	 	 


      

      33 

       

    


    
    

     

    

    
    

     

     

    
    

     

    
      
        	 	 	 	 	 
	
                
                

              	 	Santa Paula, CA 93060	 	 
	
                 

              	 	 	 	 
	
                
                

              	 	Attn: Harold S. Edwards	 	 
	
                 

              	 	 	 	 
	
                
                

              	 	      President &
      CEO	 	 
	
                 

              	 	 	 	 
	
                
                

              	 	Facsimile: (805)525-8211	 	 
	
                 

              	 	 	 	 
	
                
                

              	 	With a copy
to:	 	 
	
                 

              	 	 	 	 
	
                
                

              	 	Lawrence E. Stickney, Esq.	 	 
	
                
                

              	 	Walker, Wright, Tyler & Ward	 	 
	
                
                

              	 	626 Wilshire Blvd., Suite 900	 	 
	
                
                

              	 	Los Angeles, CA 90017	 	 
	
                
                

              	 	Facsimile: (213) 623-5160	 	 
	
                 

              	 	 	 	 
	
                
                

              	 	If to Calavo:	 	 
	
                 

              	 	 	 	 
	
                
                

              	 	Calavo Growers, Inc.	 	 
	
                
                

              	 	1141 A Cummings Road	 	 
	
                
                

              	 	Santa Paula, CA 93060	 	 
	
                
                

              	 	Attn: Lecil E. Cole, Chairman & CEO	 	 
	
                
                

              	 	Facsimile: (805) 921-3245	 	 
	
                 

              	 	 	 	 
	
                
                

              	 	With a Copy
to:	 	 
	
                 

              	 	 	 	 
	
                
                

              	 	Marc L. Brown, Esq.	 	 
	
                
                

              	 	Troy & Gould, APC	 	 
	
                
                

              	 	1801 Century Park East	 	 
	
                
                

              	 	Suite 1600	 	 
	
                
                

              	 	Los Angeles, CA 90067	 	 
	
                
                

              	 	Facsimile: (310) 789-1469	 	 


      

           20.2 Entire Agreement.
Except for the obligations of the parties under a Confidentiality Agreement
dated March 29, 2005 between Limco and Calavo (the “Confidentiality
Agreement”), this Agreement, including the Exhibits and Schedules hereto, sets
forth the entire agreement and understanding between the parties as to the
subject matter hereof and merges and supersedes all prior discussions,
agreements and understandings of every kind and nature between them, and no
party hereto shall be bound by any covenant, condition, definition, warranty or
representation other than as expressly provided for in this Agreement or as may
be on a date subsequent to the date hereof duly set forth in writing signed by
the party hereto which is to be bound thereby. 

       

           20.3 Waivers and
Amendments. This Agreement may be amended, modified, superseded,
canceled, renewed or extended, and the terms and conditions hereof may be waived
only by a written instrument signed by the parties or, in the case of a waiver,
by the party waiving compliance. No delay on the part of any party in exercising
any right, power or privilege hereunder shall operate as a waiver thereof, nor
shall any waiver on the part of any party of any right, power or privilege
hereunder, nor any single or partial exercise of any right, power or privilege
hereunder, preclude any other or further exercise thereof or the exercise of any
other right, power or privilege hereunder. Except as otherwise expressly set
forth in Article 19 or elsewhere in this Agreement, the rights and remedies
herein 

       

      34 

       

    


    
    

     

    

    
    

     

     

    
    

     

    
      provided are cumulative and are not
exclusive of any rights or remedies which any party may have in equity. The
rights and remedies of any party arising out of or otherwise in respect of any
inaccuracy in or breach of any representation, warranty, covenant or agreement
contained in this Agreement shall in no way be limited by the fact that the act,
omission, occurrence or other sate of facts upon which any claim of any such
inaccuracy or breach is based may also be the subject matter of any other
representation, warranty, covenant or agreement contained in this Agreement (or
in any other agreement between the parties) as to which there is no inaccuracy
or breach. 

       

           20.4 Governing Law. This
Agreement shall be governed and construed in accordance with the laws of the
State of California applicable to agreements made and to be performed entirely
within such State. 

       

           20.5 No Assignment.
Neither party to this Agreement may assign any right hereunder, nor delegate any
obligation, without the prior written consent of the other party. 

       

           20.6 Counterparts. This
Agreement may be executed in two (2) or more counterparts, each of which
shall be deemed an original, but all of which together shall constitute one and
the same instrument. 

       

           20.7 Headings. The
headings in the Agreement are intended solely for convenience of reference and
shall be given no effect in the interpretation of this Agreement. 

       

           20.8 Benefit to Parties.
This Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and permitted assigns. Except as provided
in Article 19 with respect to indemnification, this Agreement is intended
solely for the benefit of Calavo and Limco and their respective permitted
successors and assigns and it is not the intention of the parties to confer
third-party beneficiary rights upon any other person.


       

           20.9 Validity. In the
event that any provision of this Agreement shall be held invalid, the same shall
not affect in any respect whatsoever the validity of the remainder of this
Agreement. 

       

           20.10
Exhibits and
Schedules. The Exhibits and Schedules attached hereto are part of this
Agreement as if set forth in full herein. Any material or information disclosed
or set forth in this Agreement or in any Exhibit or Schedule delivered in
connection herewith shall be deemed set forth at each relevant portion of this
Agreement without the necessity of repetition thereof if the other portion of
this Agreement to which such disclosed material or information applies are
reasonably apparent from the disclosed material or information.


       

           20.11
Further
Assurances. If, at any time, either of the parties hereto shall consider
or be advised that any further assignments or assurances in law are necessary or
desirable to assure itself the benefit of this Agreement according to the terms
hereof or the title to any property or rights transferable hereunder, the other
party shall execute and make all such reasonable, proper assurances and
assignments and do all things reasonably necessary and proper to vest title in
such property or right in such party and otherwise carry out the terms of this
Agreement. 

       

           20.12
Transaction
Expenses.

       

      Subject to the provisions of Articles 18
and 19, whether or not the transactions contemplated herein are consummated and,
regardless of whether this Agreement is terminated, each party hereto shall pay
all of the costs and expenses incurred by it in connection with this Agreement
or in consummating the transactions contemplated hereby, including, without
limitation, disbursements and expenses of its attorneys, accountant and
advisors. 

       

      35 

       

    


    
    

     

    

    
    

     

     

    
    

     

    
           IN WITNESS
WHEREOF, the parties hereto have executed this Stock Purchase Agreement as of
the date first above written. 

       

      
        	 	 	 	 	 
	 	 	LIMONEIRA COMPANY
	
                 

              	 	 	 	 
	
                
                

              	 	By: 	 	/s/ Harold Edwards
	
                
                

              	 	 	 	 
	
                
                

              	 	Its: 	 	Chief Executive Officer
	
                 

              	 	 	 	 
	
                
                

              	 	By: 	 	/s/ Don Delmatoff
	
                
                

              	 	 	 	 
	
                
                

              	 	Its: 	 	Chief Financial Officer
	
                 

              	 	 	 	 
	 	 	CALAVO GROWERS,
  INC.
	
                 

              	 	 	 	 
	
                
                

              	 	By: 	 	/s/ Lecil Cole
	
                
                

              	 	 	 	 
	
                
                

              	 	Its: 	 	Chief Executive Officer
	
                 

              	 	 	 	 
	
                
                

              	 	By: 	 	/s/ Arthur Bruno
	
                
                

              	 	 	 	 
	
                
                

              	 	Its: 	 	Chief Financial
Officer


      

      36