Exhibit 10.4


 


AGREEMENT TO CONVERT TO FIXED INTEREST RATE


 


Conversion
Date: July 1, 2021


Loan
No. 8363846-201 (the “Loan”)


 


This
AGREEMENT TO CONVERT TO FIXED INTEREST RATE (the “Agreement”) is entered into by each of the undersigned persons
and/or entities (individually and collectively “Borrower”) and Farm Credit West, PCA (“Lender”)
as of June 8, 2021 (Borrower and Lender collectively the “Parties”).


 


WHEREAS,
Borrower is indebted to Lender under that certain promissory note in the original amount of $40,000,000.00 dated June 1, 2021
(the “Note”) together with any and all agreements executed in connection with the Note (collectively the “Loan
Documents”).


 


WHEREAS,
Borrower has requested that the existing interest rate under the Note be converted on the Conversion Date to the fixed interest rate product
chosen by Borrower below (the “Interest Rate Conversion”) and Lender has agreed to such request subject to the terms
and conditions of this Agreement.


 


NOW,
THEREFORE, IN CONSIDERATION OF THE RECITALS SET FORTH ABOVE, the terms herein, and other valuable consideration, the
receipt of which is hereby acknowledged, the Parties hereto agree as follows:


 


		1.	PREPAYMENT RESTRICTIONS. The interest rate product below is subject to a Prepayment Lockout
Period and applicable prepayment fees and surcharges. A Prepayment is a payment, in any amount, made in advance of a scheduled
payment date, or a payment made on a scheduled payment date that is in excess of the scheduled payment amount.



 


		1.1.	NOT PREPAYABLE. The Prepayment Lockout Period is for the entire Fixed Rate Term, which begins
on the Conversion Date and ends on July 1, 2025.



 


If Borrower makes a Prepayment during
the Prepayment Lockout Period, Borrower shall pay:


		(i)	a Prepayment Fee equal to 0.50 % of the amount prepaid; and 



		(ii)	any applicable Prepayment Surcharge associated with providing the Fixed Rate to Borrower. A Prepayment Surcharge is (a) any
amount charged to Lender, with respect to such prepayment; and (b) any other cost or loss suffered by Lender as a result of the prepayment
all as further described in Exhibit A attached hereto and incorporated by this reference.



 


		2.	NEW INTEREST RATE AFTER CONVERSION. On the Conversion Date, Borrower’s interest rate on the
Loan shall be converted and interest will be charged on the entire unpaid principal balance of the Note, including payments not made when
due and any other sums owing under the Note, at a fixed interest rate of 3.57% per year (the “Fixed Rate”).
The Fixed Rate shall continue for the “Fixed Rate Term” selected.






 






     


     


    

 


		2.1.	FIXED TO CONVERSION. The Fixed Rate Term begins on the Conversion Date and continues until July
1, 2025. At the end of the Fixed Rate Term, on July 1, 2025, unless the remaining balance of the Note is repaid or fixed for
an additional period, the Fixed Rate for the Note shall automatically convert to the then current Variable Interest Rate for which the
Note is eligible and shall: a) bear interest at the Variable Interest Rate from the date of expiration of the Fixed Rate Term until the
earlier of the Maturity Date of the Note (“Maturity Date”) or until the full amount of the Note has been paid in full
with interest, unless another rate is established; and b) be repaid in installments calculated at the Variable Interest Rate sufficient
to pay the Note in full on the Maturity Date.



 


		2.1.1.	VARIABLE INTEREST RATE. The Variable Interest Rate applicable to the Note shall be the Variable
Interest Rate established by Lender corresponding to the interest rate group to which the Note is assigned at any time (“Variable
Interest Rate”).



 


		2.1.2.	CHANGE IN INTEREST RATE AND INTEREST RATE GROUP. The Variable Interest Rate applicable to the Note
may be adjusted automatically, as of the first day of any month, to the Variable Interest Rate corresponding to the interest rate group
to which such Note is assigned under the provisions of Lender's variable interest rate plan in effect at that time. In adjusting the Variable
Interest Rate, Lender considers certain standard factors set forth in the plan, including but not limited to, changes in its costs of
funds, operating expenses, earnings requirements to meet certain capital objectives, credit risk factors, and the competitive environment,
which factors may change during the term of the Note.



 


In addition (a) the interest rate group
to which the Note is assigned may be changed at any time to any other interest rate group, based on Lender's evaluation of the change
in Borrower's credit quality, quality of collateral, costs of servicing the loan, and other factors which are set forth in Lender's interest
rate plan in effect at that time; and (b) the interest rate group to which the Note is assigned may be automatically adjusted to the highest
interest rate group if a default shall occur under the Note or under any other note or agreement between Borrower and Lender.


 


		2.2.	INTEREST ACCRUAL. Interest shall accrue to the date of Lender’s receipt of an Installment
or other payment, and will be calculated on the basis of a󠇃 365
day year and the actual number of days in each month. Interest charges will begin on the Conversion Date and continue until the Indebtedness
is paid in full with interest.



 


		2.3.	NOTICE. At the end of the Fixed Rate Term, or if the interest rate changes for any other reason,
Lender will give Borrower notice of such rate change to the extent required by and in accordance with the then applicable law.



 


		2.4.	PREPAYMENT TERMS.



 


		2.4.1.	PREPAYMENT PROCEDURES. Any prepayment, as well as any Prepayment Fee and Prepayment Surcharge that
is applicable, will only be accepted in accordance with Lender’s established procedures. If Borrower, in making a Prepayment, intends
the Prepayment to be applied to reduce the principal balance of the Note, Borrower must so inform Lender in writing accompanying the prepayment.
Unless agreed to in writing otherwise, Lender may apply all prepayments in such manner as Lender, in its sole discretion, may determine.



 






     


     


    

 


		2.4.2.	REAMORTIZATION. Upon the making of a partial Prepayment, Borrower may request to have the amount
of future installments reamortized over the remaining term of the Loan, but only if Borrower so notifies Lender at the time Borrower makes
the partial Prepayment and only if, upon Lender’s approval of the request, Borrower pays to Lender any fees and costs that Lender
may charge for such reamortization.



 


		2.4.3.	INTEREST RATE CONVERSION/REFINANCE. Lender may, from time to time, offer other loan or interest
rate products for which Borrower qualifies. Borrower may not refinance or convert the Note to another loan or interest rate product with
Lender unless Borrower qualifies for such loan or interest rate product and pays to Lender any fees and costs that Lender may charge for
such refinance or conversion. In addition to any other such fees and costs, interest rate conversions made subsequent to the Interest
Rate Conversion that is the subject of this Agreement will be subject to (i) a .50% conversion fee calculated on the amount being converted;
and (ii) if such subsequent conversion is made during a Prepayment Lockout Period, any applicable Prepayment Surcharge.



 


		2.4.4.	PREPAYMENT FEE. See Section 1 above for Prepayment Fee. Prepayments resulting from Lender’s
application of condemnation or insurance loss proceeds will not be subject to the Prepayment Fee but will be subject to the Prepayment
Surcharge defined in Section 1.



 


		2.4.5.	CHARGES DUE WITH PREPAYMENT. Any Prepayment Fee and, if applicable, the Prepayment Surcharge must
be paid prior to or concurrent with the amount prepaid, as a condition to Lender’s acceptance of the prepayment.



 


		2.4.6.	ACCELERATION. If the Maturity Date of the Note is accelerated, for any reason, including default
or unauthorized transfer of an interest in any Collateral, and the entire indebtedness under the Note becomes immediately due and payable,
a tender of payment of the amount necessary to satisfy the entire indebtedness will be deemed a prepayment, and must include the Prepayment
Fee and any applicable Prepayment Surcharge.



 


		2.4.7.	WAIVER OF STATUTORY RIGHT TO PREPAY WITHOUT PENALTY OR CHARGE UPON CONVEYANCE OF REAL PROPERTY COLLATERAL.
By the initials below, Borrower waives any right under Section 2954.10 of the California Civil Code, or under similar laws in other jurisdictions,
to prepay the Note, in whole or in part, without penalty, including any right to prepay the Note without also paying the Prepayment Fee
and Prepayment Surcharge following Lender's acceleration of the Maturity Date upon any unauthorized conveyance or transfer of an interest
in any real property securing the Note or any guaranty of the Note.



 


INITIALS
OF BORROWER: ______ ______


 


		3.	WARRANTY AND REPRESENTATION. Borrowers warrant and represent that they constitute all the obligors
under the Note and that if any of the Borrowers are partnerships, corporations, estates, trusts or other similar entities, all necessary
and appropriate authorizations and approvals have been obtained for this Agreement.



 


		4.	COUNTERPARTS. This Agreement may be executed in one or more counterparts, including both counterparts
that are executed on paper and counterparts that are electronic records and executed electronically, each of which is for all purposes
deemed an original and all such counterparts taken together, constitute one and the same instrument. Only one such counterpart signed
by the party against whom enforceability is sought needs to be produced to evidence the existence of this Agreement. A signed copy of
this Agreement delivered by facsimile or email shall be deemed to have the same legal effect as an original signature of this Agreement.



 






     


     


    

 


		5.	DEFINED TERMS. All capitalized terms used herein and not otherwise defined shall have the meanings
assigned to such terms in the Note or other Loan Documents.



 


		6.	OTHER TERMS AND CONDITIONS. Except as expressly modified by this Agreement, all other terms and
conditions contained in the Note shall remain in full force and effect. To the extent that any of the terms or provisions contained in
this Agreement are inconsistent with those contained in the Note, the terms and conditions contained herein shall control. Otherwise,
such provisions shall be considered cumulative.



 


Borrower Signature(s):


 


 


Limoneira
Company, a Delaware Corporation


 


 


	By: 	 	 
	 	Harold S. Edwards, as President


 


 


	By: 	 	 
	 	Mark Palamountain, as Secretary


 


 


Lender:


 


Farm Credit West, PCA


 


 


	By: 	 	 
	 	Christian Buenning, Vice President


 






     


     


    

  


Exhibit A to Agreement to Convert to Fixed Interest
Rate 


 


Description of Prepayment Surcharge


 


The Prepayment Surcharge is an amount calculated
and assessed by Lender to compensate Lender for economic losses if a fixed rate funding request is cancelled or allowed to expire. The
Prepayment Surcharge is based on a mark-to-market approach and is calculated as the present value of the difference in debt cost locked
and the current market debt cost at the time the breakage occurs. A more specific description of the calculation follows:


 


An amortization schedule is created based on:


		1.	the original debt cost charged by Lender;



		2.	the principal amount of the prepayment;



		3.	the loan’s interest rate; and



		4.	the prepaid fixed rate term requested.



 


Loans with a prepaid fixed rate loan term greater
than one year are assumed to have equal monthly principal and interest payments adjusted for a constant prepayment rate equal to that
currently used.


 


The amortization schedule is used to calculate
a current debt cost based on an interpolated (straight-line) Farm Credit yield curve created by Lender. The current debt cost is determined
by calculating the internal rate of return based on the amortization schedule’s assumed principal payments.


 


An original interest expense is calculated by
period based upon the original debt cost times the principal balances derived from the created amortization schedule and compared to a
current interest expense created in the same manner based upon the current debt cost.


 


The Prepayment Surcharge is the present value
of the sum of each monthly difference between the original interest expense and the current interest expense. The present value of each
monthly difference is calculated using a discount rate based on the corresponding monthly point on the interpolated Farm Credit yield
curve.