Exhibit 10.14Loan No. 3789055-101**LINE OF CREDIT AGREEMENT**     **THIS LINE OF CREDIT AGREEMENT**(''Line of Credit Agreement”) is enteredinto as of October 5, 2006, between **FARM CREDIT WEST, PCA,**Visalia,California (“FCW”) and **CALAVO GROWERS, INC.,**Santa Paula, California (the“Company”).     **SECTION 1. The Credit Facility.**On the terms and conditions set forth inthis Line of Credit Agreement, FCW agrees to make advances to the Companyduring the period set forth below in an aggregate principal amount not toexceed $12,000,000.00 (the “Commitment”). The Line of Credit Agreement andCommitment is executed, delivered and accepted not in payment of but for thepurpose of amending, restating and replacing the following describedobligations, and renewing any unpaid balance(s) evidenced thereby: Note datedAugust 17, 2005, in the principal amount of $12,000,000.00. Furthermore, theCommitment also evidences an additional loan advance(s) to the extent theCommitment under this Line of Credit Agreement exceeds the renewed unpaidbalance(s) referred to above.     **SECTION 2. Sale of Interest.**The Company acknowledges that FCW has theoption to participate all or a portion of the Commitment with one or morelenders, including CoBank, ACB (“CoBank”). All advances hereunder shall bemade by CoBank as agent for FCW and all repayments by the Company hereundershall be made to CoBank as agent for FCW.     **SECTION 3. Purpose.**The purpose of the Commitment is to finance theongoing operating needs of the Company.     **SECTION4. Term.**The term of the Commitment shall be from the datehereof, up to and including February 1, 2010.     **SECTION 5. Availability.**Subject to the provisions of Section 25,advances will be made available on any day on which FCW, CoBank, and theFederal Reserve Banks are open for business upon the telephonic or writtenrequest of the Company. Requests for advances must be received no later than12:00 Noon, Company’s local time, on the date the advance is desired. Advanceswill be made available by CoBank by wire transfer of immediately availablefunds to such account or accounts as may be authorized by the Company. TheCompany shall furnish to CoBank a duly completed and executed copy of a CoBankDelegation and Wire and Electronic Transfer Authorization Form, and CoBankshall be entitled to rely on (and shall incur no liability to the Company inacting on) any request or direction furnished in accordance with the termsthereof.     **SECTION 6. Interest and Fees.**          **(A) Interest.**The Company agrees to pay interest on the unpaid balance ofthe Commitment in accordance with the following interest rate option:
 

 
LINE OF CREDIT AGREEMENT NO. 3789055-101 Page 2     **(1) 7-DayLIBOR Index Rate.** At a rate (rounded upward to thenearest 1/100th% and adjusted for reserves required on “Eurocurrency Liabilities” (ashereinafter defined) for banks subject to “FRB Regulation D” (as hereinafter defined) or required by anyother federal law or regulation) per annum equal at all times to 100 basis points (1.00%) abovethe annual rate quoted by the British Bankers Association (the“BBA”) at 11:00 a.m. London timefor the offering of seven (7) day of U.S. dollars deposits, as published by Bloomberg oranother major information vendor listed on BBA’s officialwebsite on the first U.S. Banking Day (ashereinafter defined) in each week with such rate to change weekly on such day. The rate shall bereset automatically, without the necessity of notice being provided to the Company or any otherparty, on the first U.S. Banking Day of each succeeding week and each change in the rate shallbe applicable to all balances subject to this option and information about the then currentrate shall be made available upon telephonic request. For purposes hereof (a) “U.S. BankingDay” shall mean a dayon which CoBank is open for business, dealings in U.S. dollar deposits arebeing carried out inthe London interbank market, and banks are open for business in New YorkCity and London,England; (b) “Eurocurrency Liabilities” shall have meaning as set forth in“FRB Regulation D”;and (c) “FRB Regulation D” shall mean Regulation D as promulgated by theBoard of Governorsof the Federal Reserve System, 12 CFR Part 204, as amended.     **(2) LIBOR.**At a fixed rate per annum equal to “LIBOR” (as hereinafterdefined) plus 100 basis points (1%). Under this option: (1) rates may be fixed for“Interest Periods” (as hereinafter defined) of 1, 2, 3, 6, 9 or 12 months as selected by theCompany; (2) amounts may be fixed in increments of $100,000.00 or multiples thereof; (3) themaximum number of fixes in place at any one time shall be 10; and (4) rates may only be fixed on a“Banking Day” (as hereinafter defined) on 3 Banking Days’ prior written notice. For purposeshereof: (a) “LIBOR” shall mean the rate (rounded upward to the nearest sixteenth) and adjustedfor reserves required on “Eurocurrency Liabilities” (ashereinafter defined) for banks subject to“FRB Regulation D” (as herein defined) or required by any other federal law or regulation)quoted by the British Bankers Association (the “BBA”) at11:00 a.m. London time 2 Banking Daysbefore the commencement of the Interest Period for the offering of U.S. dollardeposits in the London interbank market for the Interest Period designated by the Company; aspublished by Bloomberg or another major information vendor listed onBBA’s official website; (b) “Banking Day” shallmean a day on which CoBank is open for business, dealings in U.S. dollardeposits are being carried out in the London interbank market, and banks are open forbusiness in New York City and London, England; (c) “Interest Period” shall mean a period commencingon the date this option is to take effect and ending on the numerically corresponding dayin the next calendar month or the month that is 2, 3, 6, 9 or 12 months thereafter, as the casemay be; provided, however, that: (i) in the event such endingday is not a Banking Day,such period shall be extended to the next Banking Day unless such next Banking Day falls in thenext calendar month, in which case it shall end on the preceding Banking Day; and (ii)if there is no numerically corresponding day in the month, then such period shall end onthe last Banking Day in the relevant month; (d) “Eurocurrency Liabilities” shall have meaningas set forth in “FRB
 

 
LINE OF CREDIT AGREEMENT NO. 3789055-101 Page 3Regulation D”;and (e) “FRB Regulation D” shallmean.Regulation D as promulgated by the Board of Governors of theFederal Reserve System, 12 CFR Part 204, as amended.     The Company shall select the applicable rate option at the time itrequests a loan hereunder and may, subject to the limitations set forthabove, elect to convert balances bearing interest at the 7-Day LIBOR IndexRate option to the LIBOR rate option. Upon the expiration of any fixed rateperiod, interest shall automatically accrue at the 7-Day LIBOR Index Rateoption provided for above unless the amount fixed is repaid or fixed for anadditional period in accordance with the terms hereof. Notwithstanding theforegoing, rates may not be fixed in such a manner as to cause the Company tohave to break any fixed rate balance in order to pay any installment ofprincipal. All elections provided for herein shall be made telephonically orin writing and must be received by 12:00 Noon Company’s local time. Interestshall be calculated on the actual number of days each loan is outstanding onthe basis of a year consisting of 360 days and shall be payable monthly inarrears by the 20th day of the following month or on such other day in suchmonth as FCW shall require in a written notice to the Company.     **(B) Commitment Fee.**In consideration of the Commitment, the Companyagrees to pay to FCW a commitment fee on the average daily unused portion ofthe Commitment at the rate of 0.15% per annum (calculated on a 360 day basisbased on utilization, which is defined as outstanding advances plus issuedand outstanding letters of credit divided by the total available amount ofthe Commitment), payable quarterly in arrears by the 20th day following eachquarter. Such fee shall be payable for each quarter (or portion thereof)occurring during the original or any extended term of the Commitment.     **SECTION 7. Repayment and Maturity.**The unpaid principal balance of theCommitment shall mature and be due and payable on February 1, 2010 (the“Maturity Date”).     **SECTION 8. Promissory Note.**The Company’s obligation to repay theCommitment shall be evidenced by a promissory note in the form attached heretoas Exhibit A (“Note”).     **SECTION 9. Manner and Time of Payment.**CoBank shall maintain a record ofall loans, the interest accrued thereon, and all payments made with respectthereto, and such record shall, absent proof of manifest error, be conclusiveevidence of the outstanding principal and interest on the loans. All paymentsshall be made by wire transfer of immediately available funds, by check, orby automated clearing house or other similar cash handling processes asspecified by separate agreement between the Company and CoBank. Wiretransfers shall be made to ABA No. 307088754 for advice to and credit ofCoBank (or to such other account as CoBank may direct by notice). The Companyshall give CoBank telephonic notice no later than 12:00 Noon Company’s localtime of its intent to pay by wire and funds received after 3:00 p.m.Company’s local time shall be credited on the next business day. Checks shallbe mailed to CoBank, Department 167, Denver, Colorado 80291-0167 (or to suchother place as CoBank may direct by notice). Credit for payment by check willnot be given until the later of: (a) the day on which CoBank receivesimmediately available funds; or (b) the next business day after receipt of
 

 
LINE OF CREDIT AGREEMENT NO. 3789055-101 Page 4the check all as set forth in the Servicing Agreement betweenBorrower, FCW, and CoBank in form attached hereto as Exhibit B.     **SECTION10. Capitalization.**The Company has purchased a $1,000.00stock investment under FCW’s capitalization plan. The Company understandsthat FCW’s stock is at risk and that any reference to “FCW equities” or to“stock or participation certificates required by Lender’s bylaws”in any document, agreement or Loan Document shall mean the FCW stockinvestment described herein.     **SECTION 11. Patronage.**The Commitment is eligible for patronage underthe plan and in accordance with the provisions of FCW’s bylaws and itspractices and procedures related to patronage distribution and as set forthin Section 27.     **SECTION 12. Security.**The Company’s obligations under this Line ofCredit Agreement and the Note shall be secured by a statutory first lien on all equitywhich the Company may now own or hereafter acquire in FCW. With the exception of the securityreferenced in the preceding sentence, the Company’s obligations under this Line of CreditAgreement and the Note shall be unsecured.     **SECTION 13. Conditions Precedent.**FCW’s obligation to make advanceshereunder is subject to the condition precedent that FCW receive, in form andcontent satisfactory to FCW, each of the following:     **(A) Line of Credit Agreement.**A duly executed copy of this Line ofCredit Agreement and all instruments and documents contemplated hereby.     **(B) Evidence of Authority.**Such certified board resolutions, evidence ofincumbency, and other evidence that FCW may require that this Line of Credit Agreementand the Note have been duly authorized and executed.     **(C) Fees and Other Charges.**All fees and other charges provided for herein.     **(D) Evidence of Insurance.**Such evidence as FCW may require that theCompany is in compliance with Section 15(C) hereof.     **(E) Eventof Default.**That no “Event of Default” (as defined in Section 18hereof) or event which with the giving of notice and/or the passage of time wouldbecome an Event of Default hereunder (a “Potential Default’’), shall have occurred and becontinuing.     **SECTION 14. Representations and Warranties.**     **(A) Line of Credit Agreement.**The Company represents and warrants toFCW that as of the date of this Line of Credit Agreement:
 

 
LINE OF CREDIT AGREEMENT NO. 3789055-101 Page 5     **(1) Compliance.**The Company and, to the extent contemplatedhereunder, each “Subsidiary” (as defined below), is in compliance with all of the terms ofthis Line of Credit Agreement, and no Event of Default or Potential Default exists hereunder.     **(2) Subsidiaries.**The Company has the following Subsidiaries: CalavoFoods,Inc. (CFI); Maui Fresh International, Inc.; Calavo de Mexico S.A. de C.V.;and Calavo Foods deMexico S.A. de C.V. For purposes hereof, a “Subsidiary” shall mean acorporation of which shares of stock having ordinary voting power to elect a majority of theboard of directors or othermanagers of such corporation are owned, directly or indirectly, by theCompany.     **(3) Conflicting Agreements.**This Line of Credit Agreement and the Note(collectively, at any time, the “Loan Documents”), do not conflict with,or require the consent ofany party to, any other agreement to which the Company is a party or bywhich it or its propertymay be bound or affected, and do not conflict with any provision of theCompany’s bylaws,articles of incorporation, or other organizational documents.     **(4) Compliance.**The Company and, to the extent contemplated hereunder,each Subsidiary, if any, is in compliance with all of the terms of the LoanDocuments.     **(5) Binding Agreement.**The Loan Documents create legal, valid, and bindingobligations of the Company which are enforceable in accordance with theirterms, except to the extent that enforcement may be limited by applicable bankruptcy,insolvency, or similar laws affecting creditors’ rights generally.     **SECTION 15. Affirmative Covenants.**Unless otherwise agreed to in writingby FCW, while this Line of Credit Agreement is in effect, the Company agreesto and with respect to Subsections 15(A) through 15(F) hereof, agrees tocause each Subsidiary, if any, to:     **(A) Corporate Existence, Licenses.**(i) Preserve and keep in full force andeffect its existence and good standing in the jurisdiction of its incorporation orformation; (ii) qualify and remain qualified to transact business in all jurisdictions where suchqualification is required, and (iii) obtain and maintain all licenses, certificates, permits,authorizations, approvals, and the like which are material to the conduct of its business or required by law,rule, regulation, ordinance, code, order, and the like (collectively, “Laws”).     **(B) Compliance with Laws.**Comply in all material respects with allapplicable Laws, including, without limitation, all Laws relating to environmentalprotection. In addition, the Company agrees to cause all persons occupying or present on any of itsproperties, and to cause each Subsidiary, if any, to cause all persons occupying or present on anyof its properties, to comply in all material respects with all environmental protection Laws.
 

 
LINE OF CREDIT AGREEMENT NO. 3789055-101 Page 6     **(C) Insurance.**Maintain insurance with insurance companies orassociations acceptable to FCW in such amounts and covering such risks as areusually carried by companies engaged in the same or similar business andsimilarly situated, and make such increases in the type or amount of coverageas FCW may request. At FCW’s request, all policies (or such other proof ofcompliance with this Subsection as may be satisfactory to FCW) shall bedelivered to FCW.     **(D) Property Maintenance.**Maintain all of its property that is necessaryto or useful in the proper conduct of its business in good working condition,ordinary wear and tear excepted.     **(E) Books and Records.**Keep adequate records and books of account inwhich complete entries will be made in accordance with generally acceptedaccounting principles (“GAAP”) consistently applied.     **(F) Inspection.**Permit FCW or its agents, upon reasonable notice andduring normal business hours or at such other times as the parties may agree,to examine its properties, books, and records, and to discuss its affairs,finances, and accounts, with its respective officers, directors, employees,and independent certified public accountants.     **(G) Reports and Notices.**Furnish to FCW:          **(1) AnnualFinancial Statements.**As soon as available, but in no eventmore than 90 days after the end of each fiscal year of the Company occurringduring the term hereof, annual consolidated and consolidating financial statements of the Companyand its consolidated Subsidiaries, if any, prepared in accordance with GAAP consistentlyapplied. Such financial statements shall: (a) be audited by independent certified publicaccountants selected by the Company and acceptable to FCW; (b) be accompanied by a report of suchaccountants containing an opinion thereon acceptable to FCW; (c) be prepared inreasonable detail and in comparative form; and (d) include a balance sheet, a statement of income,a statement of retained earnings, a statement of cash flows, and all notes and schedules relatingthereto.          **(2) Interim Financial Statements.**As soon as available, but in no eventmore than 45 days after the end of each fiscal quarter, a consolidated balancesheet of the Company and its consolidated Subsidiaries, if any, as of the end of such quarter,a consolidated statement of income for the Company and its consolidated Subsidiaries, if any, forsuch period and for the period year to date, and such other interim statements as FCW mayspecifically request, all prepared in reasonable detail and in comparative form in accordance withGAAP consistently applied and certified by an authorized officer or employee of the Companyacceptable to FCW.          **(3) Notice of Default.**Promptly after becoming aware thereof, notice ofthe occurrence of an Event of Default or a Potential Default.
 

 
LINE OF CREDIT AGREEMENT NO. 3789055-101 Page 7          **(4) Notice of Non-Environmental Litigation.**Promptlyafter the commencement thereof, notice of the commencement of all actions, suits, orproceedings before any court, arbitrator, or governmental department, commission, board,bureau, agency, or instrumentality affecting the Company or any Subsidiary which, if determinedadversely to the Company or any such Subsidiary, could have a material adverse effect onthe financial condition, properties, profits, or operations of the Company or any such Subsidiary.          **(5) Notice of Environmental Litigation.**Promptly after receipt thereof,notice of the receipt of all pleadings, orders, complaints, indictments, or anyother communication alleging a condition that may require the Company or any Subsidiary toundertake or to contribute to a cleanup or other response under environmental Laws, orwhich seek penalties, damages, injunctive relief, or criminal sanctions related to allegedviolations of such Laws, or which claim personal injury or property damage to any person as a resultof environmental factors or conditions.          **(6) Bylaws and Articles.**Promptly after any change in the Company’s bylawsor articles of incorporation (or like documents), copies of all such changes,certified by the Company’s Secretary.          **(7) Other Information.**Such other information regarding the condition oroperations, financial or otherwise, of the Company or any Subsidiary asFCW may from time to time reasonably request, including but not limited to copies of allpleadings, notices, and communications referred to in Subsections 15(G)(4) and (5) above.          **(8) Financial Certificate.**Together with each set of financialstatements furnished to FCW pursuant to Section 15(G)(l), and each quarterlystatement submitted pursuant to Section 15(G)(2) for a period corresponding to a period for which oneor more of the financial covenants set forth in Section 17 hereof are required to be tested, acertificate of an officer or employee of the Company acceptable to FCW setting forth calculationsshowing compliance with each of the financial covenants that require compliance at the end ofthe period for which the statements are being furnished.          **(H) Certain Organizational Changes.**Provide FCW with prior notice (andas early as practicable) of any merger, consolidation reorganization under adifferent provision of law, acquisition of all or a material part of theassets of another organization, change of name, adoption of any trade name,or creation of any Subsidiary, affiliate or material joint venture(s). Forpurposes of this covenant, joint venture transaction(s), which alone or inthe aggregate exceed $1,000,000, are considered material.     **SECTION16. Negative Covenants. Unless otherwise agreed to in writing byFCW, which agreement will not be unreasonably withheld, while this Line ofCredit Agreement is in effect, the Company will not:
 

 
LINE OF CREDIT AGREEMENT NO. 3789055-101 Page 8          **(A) Borrowings.**Create, incur, assume, or allow to exist, directlyor indirectly, anyindebtedness or liability for borrowed money (including trade or barkers’acceptances), letters ofcredit, or the deferred purchase price of property or services (includingcapitalized leases),except for: (i) debt to FCW; (ii) accounts payable to trade creditorsincurred in the ordinarycourse of business; and (iii) current operating liabilities (other thanfor borrowed money)incurred in the ordinary course of business; (iv) debt of the Company toBank of America in anamount not to exceed $12,000,000.00 and all extensions, renewals, andrefinancings thereof; (v)(vi) letters of credit issued by any bank for the account of the Companyin an aggregate faceamount not to exceed $5,000,000.00 at any one time outstanding; and (vii)capitalized leasesexisting on the date hereof existing from time to time.          **(B) Liens.**Create, incur, assume, or allow to exist any mortgage, deed oftrust, pledge,lien (including the lien of an attachment, judgment, or execution),security interest, or otherencumbrance of any kind upon any of its property, real or personal(collectively, “Liens”). Theforegoing restrictions shall not apply to: (i) Liens in favor of FCW orCoBank; (ii) Liens fortaxes, assessments, or governmental charges that are not past due; (iii)Liens and deposits underworkers’ compensation, unemployment insurance, and social security Laws;(iv) Liens anddeposits to secure the performance of bids, tenders, contracts (other thancontracts for thepayment of money), and like obligations arising in the ordinary course ofbusiness as conductedon the date hereof; (v) Liens imposed by Law in favor of mechanics,materialmen,warehousemen, and like persons that secure obligations that are not pastdue; and (vi) easements,rights-of-way, restrictions, and other similar encumbrances which, in theaggregate, do notmaterially interfere with the occupation, use, and enjoyment of theproperty or assetsencumbered thereby in the normal course of its business or materiallyimpair the value of theproperty subject thereto.          **(C) Transfer of Assets.**Sell, transfer, lease, or otherwise dispose of anyof its assets, except in the ordinary course of business.          **(D) Contingent Liabilities.**Assume, guarantee, become liable as a surety,endorse,contingently agree to purchase, or otherwise be or become liable, directlyor indirectly(including, but not limited to, by means of a maintenance agreement, anasset or stock purchaseagreement, or any other agreement designed to ensure any creditor againstloss), for or onaccount of the obligation of any person or entity, except by theendorsement of negotiableinstruments for deposit or collection or similar transactions in theordinary course of theCompany’s business.          **(E) Change in Business.**Engage in any business activities or operationssubstantiallydifferent from or unrelated to the Company’s present business activitiesor operations.     **SECTION 17. Financial Covenants.** Unless otherwise agreed to in writing, while this Line of Credit Agreement is in effect:
 

 
LINE OF CREDIT AGREEMENT NO. 3789055-101 Page 9          **(A) Working Capital.**The Company will maintain, on a consolidatedbasis, currentassets in excess of current liabilities of at least Fifteen MillionDollars ($15,000,000), measuredon a quarterly basis.          **(B) Tangible Net Worth.**The Company will maintain, on a consolidatedbasis, a‘Tangible Net Worth” equal to at least Thirty-Two Million Five HundredThousand Dollars($32,500,000.00), measured on a quarterly basis. “Tangible Net Worth”means the value of totalassets (including leaseholds and leasehold improvements and reservesagainst assets butexcluding goodwill, patents, trademarks, trade names, organizationexpense, unamortized debtdiscount and expense, capitalized or deferred research and developmentcosts, deferredmarketing expenses, and other like intangibles, and monies due fromaffiliates, officers,directors, employees, shareholders, members or managers) less totalliabilities, including but notlimited to accrued and deferred income taxes, but excluding thenon-current portion ofSubordinated Liabilities. “Subordinated Liabilities” means liabilitiessubordinated to theBorrower’s obligations to FCW in a manner acceptable to FCW in its solediscretion.          **(C) EBITDA.**The Company will maintain an “EBITDA” of at least SevenMillionFive Hundred Thousand Dollars ($7,500,000.00). “EBITDA” means net income,less income orplus loss from discontinued operations and extraordinary items, plus income taxes, plus interestexpense, plus depreciation, depletion, and amortization. This covenantwill be calculated at theend of each reporting period for which FCW requires financial statements,using the results ofthe twelve-month period ending with that reporting period. The currentportion of long-termliabilities will be measured as of the last day of the calculation period.     **SECTION 18. Events of Default.** Each of the following shall constitute an“Event of Defaultt’ under this Line of Credit Agreement:          **(A) Payment Default.**The Company should fail to make any payment when due.          **(B) Representations and Warranties.**Any representation or warranty madeordeemed made by the Company herein or in the Note, application, agreement,certificate, or otherdocument related to or furnished in connection with this Line of CreditAgreement or the Note,shall prove to have been false or misleading in any material respect on oras of the date made ordeemed made.          **(C) CertainAffirmative Covenants.**The Company or, to the extentrequired hereunder, any Subsidiary should fail to perform or comply with Sectionsl5(A) through15(G)(2), and 15(G)(6) and such failure continues for 15 days afterwritten notice thereof shallhave been delivered by FCW to the Company.          **(D) Other Covenants and Agreements.**The Company or, to the extentrequiredhereunder, any Subsidiary should fail to perform or comply with any othercovenant oragreement contained herein or in any other Loan Document or shall use theproceeds of any loanfor an unauthorized purpose.
 

 
LINE OF CREDIT AGREEMENT NO. 3789055-101 Page 10          **(E) Cross-Default.**The Company should, after any applicable graceperiod, breach or be in default under the terms of any other agreement betweenthe Company and FCW.          **(F) Other Indebtedness.**The Company or any Subsidiary should fail to paywhen due any indebtedness to any other person or entity for borrowed money orany long-term obligation for the deferred purchase price of property(including any capitalized lease), or any other event occurs which, under anyagreement or instrument relating to such indebtedness or obligation, has theeffect of accelerating or permitting the acceleration of such indebtedness orobligation, whether or not such indebtedness or obligation is actuallyaccelerated or the right to accelerate is conditioned on the giving ofnotice, the passage of time, or otherwise.          **(G) Judgments.**A judgment, decree, or order for the payment of moneyshall be rendered against the Company or any Subsidiary and either: (i)enforcement proceedings shall have been commenced; (ii) a Lien prohibitedunder Section 10(B) hereof shall have been obtained; or (iii) such judgment,decree, or order shall continue unsatisfied and in effect for a period of 20consecutive days without being vacated, discharged, satisfied, or stayedpending appeal.          **(H) Insolvency.**The Company or any Subsidiary shall: (i) become insolventor shall generally not, or shall be unable to, or shall admit in writing itsinability to, pay its debts as they come due; or (ii) suspend its businessoperations or a material part thereof or make an assignment for the benefit ofcreditors; or (iii) apply for, consent to, or acquiesce in the appointment ofa trustee, receiver, or other custodian for it or any of its property or, inthe absence of such application, consent, or acquiescence, a trustee,receiver, or other custodian is so appointed; or (iv) commence or havecommenced against it any proceeding under any bankruptcy, reorganization,arrangement, readjustment of debt, dissolution, or liquidation Law of anyjurisdiction.          **(I) Material Adverse Change.**Any material adverse change occurs, asreasonably determined by FCW, in the Company’s financial condition, results ofoperation, or ability to perform its obligations hereunder or under anyinstrument or document contemplated hereby.     **SECTION 19. Remedies.**Upon the occurrence and during the continuance ofan Event of Default or any Potential Default, FCW shall have no obligation tocontinue to extend credit to the Company and may discontinue doing so at anytime without prior notice. For all purposes hereof, the term “PotentialDefault” means the occurrence of any event which, with the passage of time orthe giving of notice or both would become an Event of Default. In addition,upon the occurrence and during the continuance of any Event of Default, FCWmay, upon notice to the Company, terminate any commitment and declare theentire unpaid principal balance of the loans, all accrued interest thereon,and all other amounts payable under this Line of Credit Agreement, allSupplements, and the other Loan Documents to be immediately due and payable.Upon such a declaration, the unpaid principal balance of the loans and allsuch other amounts
 

 
LINE OF CREDIT AGREEMENT NO. 3789055-101 Page 11shall become immediately due and payable, without protest, presentment,demand, or further notice of any kind, all of which are hereby expresslywaived by the Company. In addition, upon such an acceleration:          **(A) Enforcement.**FCW may proceed to protect, exercise, and enforce such rights andremedies as may be provided by this Line of Credit Agreement, any otherLoan Document orunder Law. Each and every one of such rights and remedies shall becumulative and may beexercised from time to time, and no failure on the part of FCW toexercise, and no delay inexercising, any right or remedy shall operate as a waiver thereof, and nosingle or partial exerciseof any right or remedy shall preclude any other or future exercisethereof, or the exercise of anyother right. Without limiting the foregoing, FCW may hold and/or set offand apply against theCompany’s obligations to FCW any cash collateral held by FCW, or anybalances held by FCWfor the Company’s account (whether or not such balances are then due).          **(B) Application of Funds.**CoBank may apply all payments received by itto theCompany’s obligations to FCW in such order and manner as FCW may elect inits solediscretion.          In addition to the rights and remedies set forth above: (i) if theCompany fails to make any payment when due, then at FCW’s option in eachinstance, such payment shall bear interest from the date due to the date paidat 2% per annum in excess of the rate(s) of interest that would otherwise bein effect on that loan; and (ii) after the maturity of any loan (whether as aresult of acceleration or otherwise), the unpaid principal balance of suchloan (including without limitation, principal, interest, fees and expenses)shall automatically bear interest at 2% per annum in excess of the rate(s)of interest that would otherwise be in effect on that loan. All interestprovided for herein shall be payable on demand and shall be calculated on thebasis of a year consisting of 365 days.     **SECTION 20. Broken Funding Surcharge.**Notwithstanding any provisioncontained in the Note giving the Company the right to repay any loan prior tothe date it would otherwise be due and payable, the Company agrees to providethree Business Days’ prior written notice for any prepayment of a fixed ratebalance and that in the event it repays any fixed rate balance prior to itsscheduled due date or prior to the last day of the fixed rate periodapplicable thereto (whether such payment is made voluntarily, as a result ofan acceleration, or otherwise), the Company will pay to CoBank a surcharge inan amount equal to the greater of: (i) an amount which would result in FCWbeing made whole (on a present value basis) for the actual or imputed fundinglosses incurred by FCW as a result thereof; or (ii) $300.00. Notwithstandingthe foregoing, in the event any fixed rate balance is repaid as a result ofthe Company refinancing the loan with another lender or by other means, thenin lieu of the foregoing, the Company shall pay to CoBank a surcharge in anamount sufficient (on a present value basis) to enable FCW to maintain theyield it would have earned during the fixed rate period on the amount repaid.Such surcharges will be calculated in accordance with methodology establishedby FCW (a copy of which will be made available to the Company upon request).
 

 
LINE OF CREDIT AGREEMENT NO. 3789055-101 Page 12     **SECTION 21. Complete Agreement, Amendments.**This Line of CreditAgreement, the Note, and all other instruments and documents contemplatedhereby and thereby, are intended by the parties to be a complete and finalexpression of their agreement. No amendment, modification, or waiver of anyprovision hereof or thereof, and no consent to any departure by the Companyherefrom or therefrom, shall be effective unless approved by FCW andcontained in a writing signed by or on behalf of FCW, and then such waiver orconsent shall be effective only in the specific instance and for the specificpurpose for which given. Additionally, any headings used in this Line ofCredit Agreement are inserted only as a matter of convenience and forreference, and in no way define, limit or describe the scope or intent of anyterm or provision. As used herein, the word “including” means “includingwithout limitation” and/or “including but not limited to”.     **SECTION 22. Applicable Law.**Except to the extent governed by applicablefederal law, this Line of Credit Agreement and the Note shall be governed byand construed in accordance with the laws of the State of California, withoutreference to choice of law doctrine.     **SECTION 23. Notices.**All notices hereunder shall be in writing and shallbe deemed to be duly given upon delivery if personally delivered or sent bytelegram or facsimile transmission, or 3 days after mailing if sent byexpress, certified or registered mail, to the parties at the followingaddresses (or such other address for a party as shall be specified by likenotice):   If to FCW, as follows: If to the Company, as follows:   Farm Credit West, PCA Calavo Growers, Inc.2929 W. Main Street, Suite A Attn: Vice President-FinanceVisalia, CA 93291-5700 1141-A Cummings Road**