Document:

Exhibit 10.4

    

     

    
      CONFIDENTIALITY AND NON-SOLICITATION AGREEMENT

       

        

      CONFIDENTIALITY AND
          NON-SOLICITATION AGREEMENT (the “Agreement”), dated as of January 3,
          2022 by and between EVERETT CO-OPERATIVE BANK, a Massachusetts chartered savings bank (the “Bank”) and JOHN MIGLIOZZI (“Executive”).

      

      

      WHEREAS, the Executive has accepted employment with the Bank as its Chief Lending Officer; and

      

      

      WHEREAS, given the senior executive position Executive will hold with the Bank, a condition of the Bank’s offer of employment and the benefits provided
          thereunder, the Executive agreed to enter into this Agreement and abide by the restrictive covenants set forth herein; and

      

      

      WHEREAS, Executive has reviewed this Agreement with his legal counsel and desires to enter into this Agreement;

      

      

      NOW, THEREFORE, as a condition of employment with the Bank and in consideration of the benefits provided to the Executive in connection with his offer of
          employment with the Bank, the parties hereby agree as follows:

      

      

      
        	
                1.  

                

              	
                Confidentiality. For purposes of this Agreement, “Confidential Information” shall include, but shall not be limited to: financial information or plans; sales and marketing
                    information or plans; business or strategic plans; salary, bonus, or other personnel information of any type; information concerning methods of operation; proprietary systems or software; legal or regulatory information; cost and
                    pricing information or policies; information concerning new or potential products or markets; investment models, practices, procedures, strategies, or related information; research and/or analysis; and information concerning Customers
                    or Prospective Customers. Confidential Information shall not include information falling within the description of Confidential Information that already is available to the public through no unauthorized act of Executive and salary,
                    bonus, or other personnel information specific to Executive, nor should the paragraph be construed so as to interfere with Executive’s right to use his general knowledge, experience, memory, and skills, whenever or wherever acquired, in
                    any future employment. For purposes of this Agreement, the terms “includes”, “including” and similar variations thereof are intended to be illustrative, and any illustrative items that follow any such terms shall not be limited to such
                    illustrative items.

              

      

      

      

      Executive agrees that:

      

      

      
        	
                (a)  

                

              	
                While working for the Bank or an Affiliate, Executive may develop, acquire, have access to and/or otherwise have knowledge of Confidential Information.

              

      

      

      

      
        	
                (b)  

                

              	
                Confidential Information is and will continue to be the sole and exclusive property of the Bank and/or its Affiliates.

              

      

      

      

      
        	
                (c)  

                

              	
                Executive will use Confidential Information only in the performance of Executive’s duties for the Bank an Affiliate. Executive will not use Confidential Information at any time (during or
                  after Executive’s employment with the Bank) for Executive’s personal benefit, for the benefit of any Person (as defined below) other than the Bank and/or an Affiliate, or in any manner adverse to the interests of the Bank, an Affiliate or
                  Bank customers.

              

      

      

      

      
        	
                (d)  

                

              	
                Executive will not disclose Confidential Information at any time (during or after Executive’s employment with the Bank) except (x) as such disclosure may be required
                  or appropriate in connection with Executive’s service to the Bank, or (y) when required to do so by a court of law, by any governmental agency or by any administrative or legislative body (including a committee thereof) with apparent
                  jurisdiction to order Executive to divulge, disclose or make accessible such information. Executive agrees to provide the Bank written notice ten (10) days prior to any disclosure pursuant to clause (y) of the preceding sentence and to
                  cooperate with any efforts by the Bank to limit the extent of such disclosure. Notwithstanding the foregoing or anything else contained herein to the contrary, this Agreement shall not preclude Executive from disclosing Confidential
                  Information to a governmental body or agency or to a court if and to the extent that a restriction on such disclosure would limit the Executive from exercising any protected right afforded the Executive under applicable law.

              

      

      

      

      
        	
                (e)  

                

              	
                Executive will safeguard Confidential Information by all reasonable steps and abide by all policies and procedures of the Bank in effect from time to time regarding storage, copying,
                  destroying, publication or posting, or handling of such Confidential Information, in whatever medium or format that Confidential Information takes.

              

      

      

      

      
        	
                (f)  

                

              	
                Executive will execute and abide by all confidentiality agreements that the Bank reasonably requests Executive to sign or abide by, whether those agreements are for the benefit of the Bank
                  its Affiliates or a customer thereof.

              

      

      

      

      
        	
                (g)  

                

              	
                When Executive’s employment relationship with the Bank ends, Executive will immediately return to the Bank all materials containing and/or relating to Confidential Information and, except
                  as the Bank may, in its sole discretion, expressly permit in writing, all equipment provided to Executive by the Bank during Executive’s employment, including without limitation all computers, laptops, cellular telephones, printers,
                  facsimile machines and scanners. Executive shall not retain any copies or reproductions of correspondence, memoranda, reports, notebooks, photographs, databases, diskettes, or other documents or electronically stored information of any
                  kind relating in any way to the business, potential business or affairs of the Bank and/or its Affiliates.

              

      

      

      

      Executive acknowledges receipt of the following notice under the Defend
        Trade Secrets Act: An individual will not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret if he/she (i) makes such disclosure in confidence to a Federal, State, or local
        government official, either directly or indirectly, or to an attorney and such disclosure is made solely for the purpose of reporting or investigating a suspected violation of law; or (ii) such disclosure was made in a complaint or other document
        filed in a lawsuit or other proceeding if such filing is made under seal.

      

      

      

      

      
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                2.  

                

              	
                Access Codes; Passwords. Executive shall provide all access codes, passcodes, and administrator rights to any account opened by the Executive on behalf of the Bank to the Chief Executive
                    Officer of the Bank at any time during or after Executive’s employment on demand.

              

      

      

      

      
        	
                3.  

                

              	
                Non-Solicitation. While Executive is employed by the Bank and for a period of 12 months after Executive’s employment with the Bank ends (regardless of the reason therefor) (the “Restricted
                      Period”), Executive will not, without the express prior written consent of the Bank:

              

      

      

      

      
        	
                (i)  

                

              	
                solicit, induce, or assist any third Person in soliciting or inducing any Person that is (or was at any time within the 12 months prior to the solicitation or inducement) an employee,
                  consultant, independent contractor or agent of the Bank and/or any Affiliate to leave the employment of the Bank and/or any Affiliate or cease performing services as an independent contractor, consultant or agent of the Bank and/or any
                  Affiliate; provided however that the placement of a general advertisement that is not directly targeted at any such Person or Persons shall not violate this clause (i);

              

      

      

      

      
        	
                (ii)  

                

              	
                hire, engage, or assist any third party in hiring or engaging, any individual that is or was (at any time within 12 months prior to the attempted hiring) an employee of the Bank and/or any
                  Affiliate; or

              

      

      

      

      
        	
                (iii)  

                

              	
                other than for the benefit of the Bank and/or any Affiliate, solicit or interfere with the relationships of the Bank and/or any Affiliate with, or endeavor to entice away from the Bank
                  and/or any Affiliate for a Competing Business, any Person that is or was (at any time within the 12-month period preceding the date that Executive’s employment with the Bank ends), a customer or "Prospective Customer" (as defined below)
                  of the Bank; provided however that the placement of a general advertisement that is not directly targeted at any such Person or Persons shall not violate this clause (iii). For purposes of this Agreement, the term “Customer” includes any
                  person or entity who, during the 12-month period prior to the Executive’s termination with the Bank, is or was a customer of the Bank or an Affiliate. Notwithstanding the foregoing, the term “Customer” does not include any person who is a
                  member of Executive’s immediate family, defined to include Executive’s spouse; his parents and his spouse's parents; his grandparents and his spouse’s grandparents; Executive’s siblings and his spouse’s siblings; Executive’s aunts and
                  uncles and his spouse’s aunts and uncles; Executive’s children and his spouse’s children, including adoptive children; and the spouses and children, including adoptive children, of any of the above family members. A “Prospective
                    Customer” is any Person with respect to whom or which the Bank and/or any Affiliate was engaged in solicitation at any time during the 12-month period preceding the date that Executive’s employment with the Bank ends and in which
                  solicitation Executive was in any way involved or of which Executive otherwise had any knowledge or reasonably should have had any knowledge.

              

      

      

      

      
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      For purposes of this Agreement:

      

      

      "Affiliate" means, with respect to any specified Person, any other Person that directly or indirectly, through one or more intermediaries,
          Controls, is Controlled by, or is under common Control with, such specified Person, provided that, in any event, any

      business in which the Bank has any direct ownership interest shall be
        treated as an Affiliate of the Bank. For the avoidance of doubt, any holding company of the Bank shall be an Affiliate of the Bank.

      "Control" (including, with correlative meanings, the terms "Controlled by" and "under common Control with"), as used with respect to any Person,
          means the direct or indirect possession of the power to direct or cause the direction of the management or policies of such Person, whether through the ownership of voting securities, by contract or otherwise.

      

      

      "Person" means any individual, firm, corporation, partnership, limited liability company, trust, joint venture, association, governmental entity, unincorporated entity or other entity.

      

      

      
        	
                4.

              	
                Remedies Upon Breach.

              

      

      

      

      
        	
                (a)  

                

              	
                Executive agrees that the
                    restrictions contained in Sections 1, 2, and 3 of this Agreement are necessary and appropriate to protect the business and goodwill of the Bank and its Affiliates, and Executive considers them reasonable for such purpose. Executive agrees that the
                    restrictions contained in this Agreement will not prevent Executive from obtaining gainful employment should Executive’s employment with the Bank end. Executive agrees that in any action seeking specific performance or other equitable
                    relief, Executive will not assert or contend that any of the provisions of this Agreement are unreasonable or otherwise unenforceable.

              

      

      

      

      
        	
                (b)  

                

              	
                Executive further agrees
                    that in the event of Executive’s breach or threatened breach of any of the provisions of Sections 1, 2 and 3 of this Agreement, the Bank would suffer substantial irreparable harm and would not have an adequate remedy at law for such breach. In recognition of the foregoing, Executive agrees that in the event of a breach or threatened breach of any of those provisions, in
                    addition to such other remedies that the Bank may have at law, without posting any bond or security, the Bank shall be entitled to seek and obtain equitable relief, in the form of specific performance, or temporary, preliminary or permanent injunctive relief, or any other equitable remedy which then
                    may be available, as well as attorneys’ fees and costs and an equitable accounting of all earnings, profits and other benefits arising, directly or indirectly, from such breach. The seeking of such injunction or order shall not affect
                    the right of the Bank to seek and obtain damages or other equitable relief on account of any such actual or threatened breach.

              

      

      

      

      
        	
                5.  

                

              	
                Post-Employment Cooperation. Executive agrees that, during Executive’s employment, and for a period of two (2) years
                    after Executive’s employment with the Bank ends (regardless of the reason therefor), upon reasonable request from the Bank, and after Executive’s employment ends, subject to Executive’s other business commitments, Executive will cooperate with the Bank in the defense of any claims or actions that may
                    be made by or against the Bank that relate to the period of Executive’s employment with the Bank. The Bank agrees, to the extent permitted by applicable law, regulation and/or court rules, to reimburse Executive for Executive’s
                    reasonable travel and other direct expenses incurred by Executive in extending such cooperation, so long as Executive provides advance written notice of the request for reimbursement and provides satisfactory documentation of the expenses to comply with Executive’s obligations under this Section 5.

              

      

      

      

      
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                6.  

                

              	
                Prior Agreements.
                    Executive represents that except as Executive has fully disclosed previously in writing to the Bank, Executive is not bound by the terms of any agreement with any previous employer or other party to refrain from using or disclosing any
                    trade secret or confidential or proprietary information in the course of Executive’s employment with the Bank or to refrain from competing, directly or indirectly, with the business of such previous employer or any other party.
                    Executive further represents that Executive’s performance of all the terms of this Agreement as an employee of the Bank does not and will not breach any agreement to keep in confidence proprietary information, knowledge or data acquired
                    by Executive in confidence or in trust prior to Executive’s employment with the Bank. Executive will not disclose to the Bank or induce the Bank to use any confidential or proprietary information or material belonging to any previous
                    employer or others.

              

      

        

      

      
        	
                7.  

                

              	
                Survival and Assignment. Executive understands that Executive’s obligations under this Agreement will continue in accordance with its express terms regardless of any changes in Executive’s title, position, duties, salary, compensation or benefits
                    or other terms and conditions of employment. Executive further understands that Executive’s obligations under this Agreement will continue following the termination of Executive’s employment regardless of the manner of such termination
                    and will be binding upon Executive’s heirs, executors and administrators. Executive understands and agrees that the Bank has the right to assign this Agreement to its successors and assigns.

              

      

      

      

      
        	
                8.  

                

              	
                Disclosure to Future Employers. During the Restricted Period (as defined
                    in Section 3), Executive will provide a copy of this Agreement to any prospective employer, partner or co- venturer prior to entering into an employment, partnership or other business relationship with such person or entity.

              

      

      

      

      
        	
                9.  

                

              	
                Governing Law. The Parties agree that this Agreement shall be governed in all respects by the law of the Commonwealth of Massachusetts, without regard to that state’s choice of law provisions.

              

      

      

      

      
        	
                10.  

                

              	
                Severability. In the event that any court of competent jurisdiction shall determine that any one or more of the
                    provisions contained in this Agreement shall be unenforceable in any respect, then such provision shall be deemed limited and restricted to the extent that the court shall deem the provision to be enforceable. This Agreement is to be
                    given the broadest interpretation permitted by law. The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision hereof. The covenants and restrictions
                    contained in this Agreement shall be deemed a series of separate covenants and restrictions. If, in any judicial proceeding, a court of competent jurisdiction should refuse to enforce all of the separate covenants and restrictions in this Agreement, then such unenforceable covenants and restrictions
                    shall be deemed eliminated from the provisions of this Agreement for the purpose of such proceeding to the extent necessary to permit the remaining separate covenants and restrictions to be enforced in such proceeding.

              

      

      

      

      
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                11.  

                

              	
                Entire Agreement. This Agreement shall constitute the entire agreement among the parties with respect to the matters covered hereby and shall supersede all previous written, oral or implied understandings among them with respect to such
                    matters.

              

      

      

      

      
        	
                12.  

                

              	
                Amendment. No provisions of this Agreement may be amended, modified, or waived unless such amendment or modification is agreed to in writing signed by Executive and by a duly authorized officer of
                    the Bank, and such waiver is set forth in writing and signed by the party to be charged. No waiver by either party hereto at any time of any breach by the other party hereto of any condition or provision of this Agreement to be
                    performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time.

              

      

      

      

      
        	
                13.  

                

              	
                Notice. For the purposes of this Agreement, any notice required or permitted to be given under this Agreement shall be deemed properly given if in writing and if mailed by registered or certified U.S.
                    mail, postage prepaid with return receipt requested, and by regular U.S. mail, postage prepaid, to Executive’s address, in the case of notices to Executive, and to the principal executive office of the Bank, in the case of notice to the
                    Bank.

              

      

      

      

      
        	
                14.  

                

              	
                Section Headings. The section headings in this Agreement are for convenience of reference only, and they form no part of this Agreement and shall not affect its interpretation.

              

      

      

      

      
        	
                15.  

                

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

              

      

      

      

      
        	
                16.  

                

              	
                Review. Executive represents and warrants that: (i) Executive has read this Agreement and understands all the terms and conditions hereof; (ii) Executive has entered into this
                    Agreement of Executive’s own free will and volition; (iii) Executive has been advised by the Bank that this Agreement is a legally binding contract and that Executive should seek Executive’s own independent attorney to review it; (iv)
                    Executive has been afforded ample opportunity to consult with Executive’s own attorney regarding this Agreement; and (v) the terms of this Agreement are fair, reasonable and are being agreed to voluntarily in exchange for Executive’s
                    employment by the Bank.

              

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      
        5

        
          

      

      

      

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

      

      

      	 	
              EVERETT CO-OPERATIVE BANK

            
	 	 
	 	 
	
              By:  

              

            	
              /s/ Richard J. O’Neil, Jr.

            
	 	
              Richard J. O’Neil, Jr.

              President and Chief Executive Officer

            
	 	 
	 	 
	 	
              EXECUTIVE

            
	 	 
	 	 
	
              By:

            	
              /s/ John Migliozzi

            
	 	
              John Migliozzi

            

      

      

      

      

      

      

      

      

    

  

  6Document

Exhibit 4.7
Description of Securities

The following is a summary of the material terms of the registered securities of Limoneira Company. This description is based, in part, on our Amended and Restated Certificate of Incorporation and our Amended and Restated Bylaws, both of which are exhibits to our Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q. 

Common Stock

We have 39,000,000 authorized shares of common stock, par value $0.01 per share. Holders of our common stock are entitled to one vote for each share held of record on each matter submitted to a vote of stockholders. Subject to the prior rights of any class or series of preferred stock which may from time to time be outstanding, if any, holders of our common stock are entitled to receive ratably, dividends when, as and if declared by our board of directors out of funds legally available for that purpose and, upon our liquidation, dissolution or winding up, are entitled to share ratably in all assets remaining after payment of liabilities and payment of accrued dividends and liquidation preferences on any preferred stock. Holders of our common stock have no preemptive rights and have no rights to convert their common stock into any other securities. Our outstanding common stock is duly authorized and validly issued, fully paid and nonassessable. In the event we were to elect to sell additional shares of common stock, holders of our common stock would have no right to purchase additional shares. As a result, the common stockholders’ percentage equity interest would be diluted.

Preferred Stock

We have 100,000 authorized shares of preferred stock, consisting of (i) 50,000 shares of Class A Preferred Stock, par value $0.01 per share, of which 20,000 shares have been designated as Series A Junior Participating Preferred Stock, and (ii) 50,000 shares of Class B Preferred Stock, par value $100 per share, of which 30,000 shares have been designated as Series B Convertible Preferred Stock (the “Series B Convertible Preferred Stock”) and 10,000 shares have been designated as Series B-2 4% Voting Preferred Stock (the “Series B-2 Preferred Stock”). We may issue preferred stock in one or more series and having the rights, privileges and limitations, including voting rights, conversion rights, liquidation preferences, dividend rights and preferences and redemption rights, as may, from time to time, be determined by our board of directors. Preferred stock may be issued in the future in connection with acquisitions, financing or other matters, as our board of directors deems appropriate. In the event that we determine to issue any shares of preferred stock, a certificate of designation containing the rights, privileges and limitations of the series of preferred stock will be filed with the Delaware Secretary of State. The effect of this preferred stock designation power is that our board of directors alone, subject to federal securities laws, applicable blue sky laws and Delaware law, may be able to authorize the issuance of preferred stock that could have the effect of delaying, deferring or preventing a change in control without further action by our stockholders, and may adversely affect the voting and other rights of the holders of our common stock. The issuance of preferred stock with voting and conversion rights may also adversely affect the voting power of the holders of our common stock, including the loss of voting controls to others. 

Series A Junior Participating Preferred Stock

On October 31, 2006, our board of directors designated 20,000 shares of Class A Preferred Stock as Series A Junior Participating Preferred Stock, par value $0.01 per share. Our Series A Junior Preferred Stock has the following rights, preferences, privileges and restrictions:

Conversion. Shares of Series A Junior Participating Preferred Stock are not convertible.

Dividends. The holders of shares of our Series A Junior Participating Preferred Stock are entitled to receive cash dividends equal to the greater of (a) $1.00 or (b) 100 times the aggregate per share amount of all cash dividends and 100 times the aggregate per share amount of all non-cash dividends, other than a dividend payable in, and declared on, our common stock. Such dividends are payable quarterly on or before the fifteenth day of January, April, July and October in each year commencing on the first quarterly dividend payment date after the first issuance of a share or fraction of a share of Series A Junior Participating Preferred Stock.

Liquidation Rights. In the event of any voluntary or involuntary liquidation, dissolution or winding up of the Company, the holders of shares of our Series A Junior Participating Preferred Stock are entitled to be paid out of the assets available for distribution, before any payment is made to the holders of our common stock or any other series or class of our shares ranking junior to the Series A Junior Participating Preferred Stock, an amount equal to $100.00 per share, plus an amount equal to all accrued and unpaid dividends. Following the payment in full of such liquidation preference, no additional distributions may be made to the holders of shares of our Series A Junior Participating Preferred Stock unless the holders of our common stock have received an amount per share equal to a specified quotient, and, upon payment in full to the holders of our common stock of an amount equal to such quotient, holders of shares of our Series A Junior Participating Preferred Stock and our common stock are entitled to receive their ratable and proportionate share of the remaining assets to be distributed in a specified ratio.

Voting Rights. Each share of Series A Junior Participating Preferred Stock is entitled to 1,000 votes on all matters submitted to a vote of our stockholders.

Redemption. Shares of Series A Junior Participating Preferred Stock are not redeemable.

Series B Convertible Preferred Stock

On May 21, 1997, our board of directors designated 30,000 shares of Class B Preferred Stock as Series B Convertible Preferred Stock, par value $100.00 per share. Our Series B Convertible Preferred Stock has the following rights, preferences, privileges and restrictions:

Conversion. The holders of shares of our Series B Convertible Preferred Stock have the right, at their option, to convert such shares into shares of common stock of the Company at any time prior to redemption. The conversion price is $8.00 per share of common stock. Pursuant to the terms of the Certificate of Designation, Preferences and Rights of the Series B Convertible Preferred Stock, the conversion price shall be adjusted to reflect any dividends paid in common stock of the Company, the subdivision of the common stock of the Company into a greater number of shares of common stock of the Company or to prevent unfair dilution or increase of the converted common stock upon the advice of legal counsel.

Dividends. The holders of shares of our Series B Convertible Preferred Stock are entitled to receive cumulative cash dividends at an annual rate of 8.75% of par value. Such dividends are payable quarterly on the first day of January, April, July and October in each year commencing July 1, 1997.

Liquidation Rights. In the event of any voluntary or involuntary liquidation, dissolution or winding up of the Company, the holders of shares of our Series B Convertible Preferred Stock are entitled to be paid out of the assets available for distribution, before any payment is made to the holders of our common stock or any other series or class of our shares ranking junior to the Series B Convertible Preferred Stock, an amount equal to $100.00 per share, plus an amount equal to all accrued and unpaid dividends.

Voting Rights. Each holder of shares of our Series B Convertible Preferred Stock is entitled to ten votes on all matters submitted to a vote of the stockholders of the Company.

Redemption. The Company, at the option of the board of directors, may redeem the Series B Convertible Preferred Stock, as a whole or in part, at any time or from time to time on or after August 1, 2017 and before July 31, 2027, at a redemption price equal to $100.00 per share, plus accrued and unpaid dividends thereon to the date fixed for redemption.

Put Rights. At any time upon written notice to the Company given on or after July 1, 2017 and before June 30, 2027, any holders of record of our Series B Convertible Preferred Stock may cause the Company to repurchase all of the outstanding shares of the Series B Convertible Preferred Stock held by that stockholder at a repurchase price equal to its par value plus accrued and unpaid dividends thereon, to the date fixed for repurchase. The repurchase date, which will be fixed by the Company, will not be more than 90 days following the date of the written notice from the Series B Convertible Stockholder. The Company will provide notice regarding any such repurchase.

Series B-2 Preferred Stock

On March 19, 2014, our board of directors designated 10,000 shares of Class B Preferred Stock as Series B-2 Preferred Stock. Our Series B-2 Preferred Stock has the following rights, preferences, privileges and restrictions:

Conversion. Each share of the Series B-2 Preferred Stock is convertible into common stock at a conversion price equal to the greater of (a) the then-market price of the Company’s common stock based upon the closing price of the Company’s common stock on the NASDAQ Stock Market LLC or on such other principal market on which the Company’s common stock may then be trading and (b) $15.00 per share of common stock. Shares of the Series B-2 Preferred Stock may be converted into common stock (i) at any time prior to the redemption thereof, or (ii) in the event the option agreement between Associated Citrus Packers, Inc., an Arizona corporation and our wholly-owned subsidiary, and WPI-ACP Farm AZ, LLC, a Delaware limited liability company, dated March 21, 2014 (the “Option Agreement”) is terminated without all of the shares of Series B-2 Preferred Stock having been redeemed, within 30 calendar days following such termination.

Dividends. The holder of shares of the Series B-2 Preferred Stock is entitled to receive cumulative cash dividends at an annual rate of 4% of the liquidation value of $1,000 per share. Such dividends are payable quarterly on the first day of January, April, July and October in each year commencing July 1, 2014.

Liquidation Rights. In the event of any voluntary or involuntary liquidation, dissolution or winding up of the Company, the holders of shares of our Series B-2 Preferred Stock are entitled to be paid out of the assets available for distribution, before any payment is made to the holders of the Company’s common stock or any other series or class of the Company’s shares ranking junior to the Series B-2 Preferred Stock, an amount equal to the liquidation value of $1,000 per share, plus an amount equal to all accrued and unpaid dividends.

Voting Rights. Each share of Series B-2 Preferred Stock is entitled to one vote on all matters submitted to a vote of the Company’s stockholders.

Redemption. The Company may redeem shares of Series B-2 Preferred Stock only (i) from WPI-ACP Holdings, LLC or its designee (“WPI”) and (ii) upon, and to the extent of, WPI’s election to exercise its option pursuant to the Option Agreement, at a redemption price equal to the liquidation value of $1,000 per share, plus accrued and unpaid dividends.

Transfer Restriction. The shares of the Series B-2 Preferred Stock may not be transferred without the consent of the Company, which shall not be unreasonably withheld.

Anti-Takeover Effects

Effects of Authorized but Unissued Stock

We have shares of common stock and preferred stock available for future issuance without stockholder approval, subject to any limitations imposed by the listing standards of the NASDAQ Global Select Market. We may utilize these additional shares for a variety of corporate purposes, including for future public offerings to raise additional capital or facilitate corporate acquisitions or for payment as a dividend on our capital stock. The existence of unissued and unreserved common stock and preferred stock may enable our board of directors to issue shares to persons friendly to current management or to issue preferred stock with terms that could have the effect of making it more difficult for a third party to acquire or could discourage a third party from seeking to acquire, a controlling interest in our Company by means of a merger, tender offer, proxy contest or otherwise. In addition, if we issue preferred stock, the issuance could adversely affect the voting power of holders of common stock and the likelihood that such holders will receive dividend payments and payments upon liquidation.

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