PROMISSORY NOTE AND SUPPLEMENT


TO MASTER LOAN AGREEMENT


 


This Non-revolving Credit Facility Supplement
(alternately, “Note” or “Supplement”) to a Master Loan Agreement dated May 1, 2012
(“MLA”) is established as of May 1, 2012 between the undersigned Borrower and Lender identified herein.


 


1.          PROMISE
TO PAY. For value received, the undersigned (collectively, “Borrower”) as principals jointly and severally
promise to pay to the order of Farm Credit West, PCA (“Lender”), a corporation organized and existing
under the laws of the United States of America, with its office at 2031 Knoll Drive, Ventura, CA 93003-7301 or at
such other place as may be designated in writing by Lender, the principal sum of $13,000,000.00 (Thirteen Million Dollars
and Zero Cents) (“Commitment”), or so much of that sum as may be advanced by Lender from time to time, together
with interest on the unpaid principal balance as specified in Section 3 below. All defined terms used in this Supplement shall
have the same meaning as set forth in the MLA. All Indebtedness owed hereunder shall be payable only in lawful money of the United
States of America.


 


1.1       NON-REVOLVING
CREDIT FACILITY. On the terms and conditions in the MLA and this Supplement, Lender agrees to make Loan advances to Borrower
during the period set forth below in the aggregate principal amount not to exceed at any one time outstanding the Commitment or
the borrowing base or other guidelines where applicable, whichever is less. Amounts borrowed and later repaid may not be reborrowed.


 


1.2      TERM.
The term of the Commitment shall be from the date of this Supplement up to but not including the Maturity Date, or such later date
as Lender may in its sole discretion authorize in writing. Borrower may draw funds only during the term of the Commitment.


 


1.3      ONGOING
REQUIREMENTS AND REPRESENTATIONS.  At the time of any draw request or draw by Borrower or advance of Loan funds by Lender,
Borrower shall not be in default. Any request for or acceptance of a draw by Borrower constitutes an ongoing representation and
warranty by Borrower that Borrower continues to comply with the conditions and requirements set forth in this Agreement, the Security
Instruments or any Loan Document in connection herewith, and that title to the Property defined in the Security Instruments has
not been transferred without Lender’s written consent. If a default occurs, one of Lender’s remedies includes Lender’s
right to immediately terminate Borrower’s right to make draws hereunder, with or without notice to Borrower.


 


1.4      PROCEDURE
FOR DRAWING FUNDS. All draws requested hereunder shall comply with applicable procedures established by Lender from time to
time. Lender’s records shall be conclusive evidence of draw requests. Each advance of Loan funds hereunder may be made upon
a verbal, written, or telecopied request from Borrower to Lender. Lender may rely on any verbal request for a draw as fully as
if such request were in writing. Upon fulfillment of the applicable conditions for making a draw, Lender shall disburse the amount
of the requested draw to Borrower in such manner as Lender and Borrower may from time to time agree.


 


2.         PAYMENTS.*


 


Seventy-One (71) Monthly interest
only payments in the amount billed, beginning on June 1, 2012. One (1) installment of interest in the amount billed
and principal to be paid on May 1, 2018.


 


*See 11.2 below for Additional Repayment
Terms.


 


Payments, other than those required as
specified in this Section or elsewhere herein, may be made at any time and in any amount during the term of this Note, unless limited
or prohibited herein or unless otherwise required by Lender in writing. This Loan is due and payable in full on May 1, 2018
(“Maturity Date”), at which time Borrower shall pay the unpaid principal balance and all accrued interest in
full. 


 



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At Lender’s option, a change in the
interest rate or an advance may either increase or decrease one or more of the following: the amount of each installment due, the
amount of the final installment (resulting in a final installment due at the Maturity Date which may be greater than any previous
installments) or the total number of installments due.


 


3.          INTEREST.


 


3.1      INITIAL
INTEREST RATE. The interest rate applicable to the Note is a Variable Interest Rate (“Variable Interest Rate”)
and shall change in accordance with Sections 3.2 through 3.3 below. Interest shall accrue at the variable interest rate as established
by Lender for the interest rate group to which this Note is assigned.


 


Interest will be charged on the
entire unpaid principal balance of this Note, including payments not made when due and any other sums owing hereunder. Interest
charged hereunder, including any acceleration interest rate, all late charges, default interest and other charges, and all other
amounts charged hereunder, shall not be limited by the laws of any state, including any state laws relating to a legal rate or
other interest rate, but shall be governed solely by applicable federal laws.


 


Interest will be calculated on
the basis of a 365-day year and the actual number of days in each month. Interest charges will begin on the date Lender
disburses principal and continue until the Indebtedness is paid in full with interest. The initial interest rate in effect on this
date is 3.50% per annum (“Initial Interest Rate”).


 


		3.2	CHANGE IN INTEREST RATE AND INTEREST RATE GROUP. The Variable Interest Rate applicable to
this Note may be adjusted automatically as of the first day of any month to the rate then made applicable to the Note’s assigned
interest rate group under the provisions of Lender's Variable Interest Rate plan in effect at that time.



 


In adjusting the 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 Loan.


 


Borrower understands and agrees
that (a) the interest rate group to which this 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 may be automatically
adjusted to the highest interest rate group if a default shall occur under this Note or under any other note or agreement between
Borrower and Lender.


 


		3.3	NOTICE. If Lender changes Borrower’s Variable Interest Rate, Lender will give Borrower
notice of such rate change to the extent required by and in accordance with the then applicable law.



 


4.          INTEREST
FOR OVERDUE PAYMENTS.  Any interest or other sum owed hereunder which is not paid when due shall be added to the outstanding
principal balance of the Loan and such combined amount shall thereafter bear interest at the same rate as the principal portion
of the Loan.


 


5.          DEFAULT
AND REMEDIES. Borrower is in default on this Supplement under the circumstances described in the MLA governing this Supplement.
If a default occurs, Lender shall have all the Remedies described in the MLA.


 


6.          SECURITY.
The security given by Borrower to Lender includes, without limitation, the following:


6.1       This
Note is secured by a real estate Deed of Trust recorded on 06/01/2010, Instrument #20100601-00080212-0, in the official
records of Ventura County, State of California.


6.2       By
signing below, the undersigned individually and collectively certify that there have been NO CHANGES in the ownership, condition,
or location of any collateral previously pledged to Lender, which is also pledged as Collateral for this Note.


 



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7.          PREPAYMENT;
REAMORTIZATION; REFINANCE; INTEREST RATE CONVERSION. A payment, in any amount, made in advance of the scheduled payment date
is a “prepayment.” 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. Borrower may make a full or partial
prepayment on any business day without paying a prepayment fee.


 


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.


 


Lender may from time to time offer other
loan or interest rate products for which Borrower qualifies. Borrower acknowledges that it may not refinance or convert this Note
to another loan or interest rate product with Lender unless Borrower qualifies for such loan or product and pays to Lender any
fees and costs that Lender may charge for such refinance or conversion.


 


8.          LEGAL
ENTITY STATUS. If any Borrower is a legal entity, by signing below, the undersigned representatives of such entity certify
that there have been NO CHANGES in: the entity’s owners, directors, officers, partners, managers, trustees or beneficiaries;
or in the entity’s lawful powers to borrow or encumber entity assets to secure its debts; or in the authority of any person
signing below to act for and bind the entity; or in the entity’s Articles, Bylaws, Partnership Agreement, Management or Operating
Agreement, Declaration of Trust, or other applicable legal documents creating or sustaining the entity since the execution of the
last statement to Lender.


 


9.          REIMBURSEMENT
OF CHARGES. If any farm credit bank or any other provider of financing or funding to Lender shall assess against Lender any
fee, cost, charge, or other amount with respect to the Indebtedness, Borrower shall reimburse Lender on demand for the amount thereof,
regardless of whether such assessment arose from actions taken by Borrower.


 


10.         REAL
ESTATE SECURED NOTE. This Note is secured by a Security Instrument which describes how and under what conditions all amounts
owed under this Note may become immediately due and payable. One of those conditions relates to any transfer of the property covered
by the Security Instrument and to certain other transfers. Refer to each Security Instrument for the specific conditions and requirements.
When the Security Instrument is a Deed of Trust, the Deed of Trust provides as follows:


 


DUE ON SALE OR TRANSFER.
In the event the herein-described Property, (including any existing or subsequently acquired or created Water Asset), or any part
thereof, or any interest therein, is transferred or agreed to be transferred, without Beneficiary's prior written consent, all
Indebtedness, irrespective of the maturity dates, at the option of the holder hereof, and without demand or notice, shall immediately
become due and payable. As used herein, “transferred” means sold, conveyed, alienated, exchanged, transferred by gift,
further encumbered, pledged, hypothecated, made subject to an option to purchase, or otherwise disposed of, directly or indirectly,
or in trust, voluntarily or involuntarily, by Trustor or by operation of law or otherwise. Failure to exercise such option shall
not constitute a waiver of the right to exercise this option in the event of subsequent transfer or subsequent agreement to transfer.


 


If Trustor is an entity other
than a natural person (such as a corporation or other organization), then all Indebtedness, irrespective of the maturity date,
at the option of Beneficiary, and without demand or notice, shall become immediately due and payable if: (a) a beneficial interest
in Trustor is transferred; (b) there is a withdrawal or removal of a general partner of a partnership or a manager of a limited
liability company; (c) there is a transfer in the aggregate of more than 25% of the voting stock of Trustor, if Trustor is a corporation,
or there is a transfer in the aggregate of more than 25% of the partnership interests or membership interests, if Trustor is a
partnership, limited liability company or similar entity; or (d) Trustor is dissolved or its existence as a legal entity is terminated


 



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11.         SPECIAL
REPRESENTATIONS, WARRANTIES, CONDITIONS AND COVENANTS.


 


11.1         DISBURSMENT
INSTRUCTIONS. Initial disbursement of funds to pay-off Farm Credit West, PCA Loan #8309256-101, indexed under Windfall Investors,
LLC, balance of funds, if any, to be disbursed as requested.


 


11.2         ADDITIONAL
REPAYMENT TERMS. Borrower understands and agrees that, in addition to the required payments detailed in item 2 of this Note,
as sole member of Windfall Investors, LLC, Borrower is required to remit to Lender a minimum
$175,000.00 per lot sold on the real property located at the Northeast corner of Creston Road and Camp 8 Road in Creston, San Luis
Obispo County, California and bearing APN numbers 035-361-002 and 003, and 035-381-002 and 011 and owned by Windfall
Investors LLC . Upon receipt, Lender shall apply any such proceeds as a special principal
payment on the Commitment.


 


REPRESENTATIVES OF LENDER ARE NOT AUTHORIZED
TO MAKE ANY ORAL AGREEMENTS OR ASSURANCES. DO NOT SIGN THIS AGREEMENT IF YOU BELIEVE THAT THERE ARE ANY AGREEMENTS OR UNDERSTANDINGS
BETWEEN YOU AND LENDER THAT ARE NOT SET FORTH IN WRITING IN THIS AGREEMENT OR IN OTHER LOAN DOCUMENTS PERTAINING TO THIS LOAN.


 


	Signature(s):	 	 
	 	 	 
	Limoneira Company, a Delaware Corporation	 	 
	 	 	 
	By:	/s/ Harold S. Edwards	 	By:	/s/ Joseph D. Rumley
	 	Harold S. Edwards, President 	 	 	Joseph D. Rumley, Secretary 


  



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