Document:

Exhibit 10.1

 

Loan No. 3789055-101

TERM REVOLVING CREDIT AGREEMENT

     THIS TERM REVOLVING CREDIT AGREEMENT (“ Agreement”) is entered into as of February 7,
2007, 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 in this Agreement, FCW
agrees to make advances to the Company during the period set forth below in an aggregate principal
amount not to exceed $15,000,000.00 (the “Commitment”). The Agreement and Commitment is executed,
delivered and accepted not in payment of but for the purpose of amending, restating and replacing
the following described obligations, and renewing any unpaid balance(s) evidenced thereby: Note
dated January 31, 2007, in the principal amount of $12,000,000.00. Furthermore, the Commitment
also evidences an additional loan advance(s) to the extent the Commitment under this Agreement
exceeds the renewed unpaid balance(s) referred to above.

     SECTION 2. Sale of Interest . The Company acknowledges that FCW has the option to participate
all or a portion of the Commitment with one or more lenders, including CoBank, ACB (“CoBank”). All
advances hereunder shall be made by CoBank as agent for FCW and all repayments by the Company
hereunder shall be made to CoBank as agent for FCW.

     SECTION 3. Purpose. The purpose of the Commitment is to finance the purchase and installation
of capital items and other corporate needs of the Company.

     SECTION 4. Term. The term of the Commitment shall be from the date hereof, up to and
including February 1, 2012.

     SECTION 5. Availability. Subject to the provisions of Section 25, advances will be made
available on any day on which FCW, CoBank, and the Federal Reserve Banks are open for business
upon the telephonic or written request of the Company. Requests for advances must be received no
later than 12:00 Noon, Company’s local time, on the date the advance is desired. Advances will be
made available by CoBank by wire transfer of immediately available funds to such account or
accounts as may be authorized by the Company. The Company shall furnish to CoBank a duly completed
and executed copy of a CoBank Delegation and Wire and Electronic Transfer Authorization Form, and
CoBank shall be entitled to rely on (and shall incur no liability to the Company in acting on) any
request or direction furnished in accordance with the terms thereof.

     SECTION 6. Interest and Fees.

     (A) Interest. The Company agrees to pay interest on the unpaid balance of the Commitment in
accordance with the following interest rate option:

 

 

	 	 	 
	Calavo Growers, Inc.
	 	 
	AGREEMENT NO. 3789055-101

	 	Page 2

     (1) 7-Day LIBOR Index Rate. At a rate (rounded upward to the nearest l/100th% and adjusted
for reserves required on “Eurocurrency Liabilities” (as hereinafter defined) for banks subject to
“FRB Regulation D” (as hereinafter defined) or required by any other federal law or regulation)
per annum equal at all times to 100 basis points (1.00%) above the annual rate quoted by the
British Bankers Association (the “BBA”) at 11:00 a.m. London time for the offering of seven (7)
day of U.S. dollars deposits, as published by Bloomberg or another major information vendor listed
on BBA’s official website on the first U.S. Banking Day (as hereinafter defined) in each week with
such rate to change weekly on such day. The rate shall be reset automatically, without the
necessity of notice being provided to the Company or any other party, on the first U.S. Banking
Day of each succeeding week and each change in the rate shall be applicable to all balances
subject to this option and information about the then current rate shall be made available upon
telephonic request. For purposes hereof (a) “U.S. Banking Day” shall mean a day on which CoBank is
open for business, dealings in U.S. dollar deposits are being carried out in the London interbank
market, and banks are open for business in New York City 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 the Board of Governors of the Federal Reserve System, 12
CFR Part 204, as amended,

     (2) LIBOR. At a fixed rate per annum equal to “LIBOR” (as hereinafter defined) 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 the Company; (2) amounts may be fixed in
increments of $100,000.00 or multiples thereof; (3) the maximum 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 purposes hereof: (a) “LIBOR” shall mean the rate (rounded
upward to the nearest sixteenth) and adjusted for reserves required on “Eurocurrency Liabilities”
(as hereinafter 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”) at 11:00
a.m. London time 2 Banking Days before the commencement of the Interest Period for the offering of
U.S. dollar deposits in the London interbank market for the Interest Period designated by the
Company; as published by Bloomberg or another major information vendor listed on BBA’s official
website; (b) “Banking Day” shall mean a day on which CoBank is open for business, dealings in U.S.
dollar deposits are being carried out in the London interbank market, and banks are open for
business in New York City and London, England; (c) “Interest Period” shall mean a period commencing
on the date this option is to take effect and ending on the numerically corresponding day in the
next calendar month or the month that is 2, 3, 6, 9 or 12 months thereafter, as the case may be;
provided, however, that: (i) in the event such ending day is not a Banking Day, such period shall
be extended to the next Banking Day unless such next Banking Day falls in the next 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 on the last Banking Day in the relevant
month; (d) “Eurocurrency Liabilities” shall have meaning as set forth in “FRB

 

 

	 	 	 
	Calavo Growers, Inc.
	 	 
	AGREEMENT NO. 3789055-101

	 	Page 3

Regulation D”; and (e) “FRB Regulation D” shall mean Regulation D as promulgated by the Board
of Governors of the Federal Reserve System, 12 CFR Part 204, as amended.

          The Company shall select the applicable rate option at the time it requests a loan hereunder
and may, subject to the limitations set forth above, elect to convert balances bearing interest at
the 7-Day LIBOR Index Rate option to the LIBOR rate option. Upon the expiration of any fixed rate
period, interest shall automatically accrue at the 7-Day LIBOR Index Rate option provided for
above unless the amount fixed is repaid or fixed for an additional period in accordance with the
terms hereof. Notwithstanding the foregoing, rates may not be fixed in such a manner as to cause
the Company to have to break any fixed rate balance in order to pay any installment of principal
All elections provided for herein shall be made telephonically or in writing and must be received
by 12:00 Noon Company’s local time. Interest shall be calculated on the actual number of days each
loan is outstanding on the basis of a year consisting of 360 days and shall be payable monthly in
arrears by the 20th day of the following month or on such other day in such month as FCW shall
require in a written notice to the Company.

          (B) Commitment Fee. In consideration of the Commitment, the Company agrees to pay to FCW a
commitment fee on the average daily unused portion of the Commitment at the rate of 0.15% per
annum (calculated on a 360 day basis based on utilization, which is defined as outstanding
advances plus issued and outstanding letters of credit divided by the total available amount of
the Commitment), payable quarterly in arrears by the 20th day following each quarter. 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 the Commitment shall
mature and be due and payable on February 1, 2012 (the “Maturity Date”).

     SECTION 8. Promissory Note. The Company’s obligation to repay the Commitment shall be
evidenced by a promissory note in the form attached hereto as Exhibit A (“Note”).

     SECTION 9. Manner and Time of Payment. CoBank shall maintain a record of all loans, the
interest accrued thereon, and all payments made with respect thereto, and such record shall, absent
proof of manifest error, be conclusive evidence of the outstanding principal and interest on the
loans. All payments shall be made by wire transfer of immediately available funds, by check, or by
automated clearing house or other similar cash handling processes as specified by separate
agreement between the Company and CoBank. Wire transfers shall be made to ABA No. 307088754 for
advice to and credit of CoBank (or to such other account as CoBank may direct by notice). The
Company shall give CoBank telephonic notice no later than 12:00 Noon Company’s local time 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 shall be mailed to CoBank, Department 167, Denver, Colorado
80291-0167 (or to such other place as CoBank may direct by notice). Credit for payment by check
will not be given until the later of: (a) the day on which CoBank receives immediately available
funds; or (b) the next business day after receipt of

 

 

	 	 	 
	Calavo Growers, Inc.
	 	 
	AGREEMENT NO. 3789055-101

	 	Page 4

the check all as set forth in the Servicing Agreement between Borrower, FCW, and CoBank in
form attached hereto as Exhibit B.

     SECTION 10. Capitalization. The Company has purchased a $1,000.00 stock investment under
FCW’s capitalization plan. The Company understands that 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 stock investment described
herein.

     SECTION 11. Patronage. The Commitment is eligible for patronage under the plan and in
accordance with the provisions of FCW’s bylaws and its practices and procedures related to
patronage distribution and as set forth in Section 27.

     SECTION 12. Security. The Company’s obligations under this Agreement and the Note shall be
secured by a statutory first lien on all equity which the Company may now own or hereafter acquire
in FCW. With the exception of the security referenced in the preceding sentence, the Company’s
obligations under this Agreement and the Note shall be unsecured.

     SECTION 13. Conditions Precedent. FCW’s obligation to make advances hereunder is subject to
the condition precedent that FCW receive, in form and content satisfactory to FCW, each of the
following:

          (A) Agreement. A duly executed copy of this Agreement and all instruments and documents
contemplated hereby.

          (B) Evidence of Authority. Such certified board resolutions, evidence of incumbency, and
other evidence that FCW may require that this Agreement and 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 the Company is in compliance
with Section 15(C) hereof

          (E) Event of Default. That no “Event of Default” (as defined in Section 18 hereof) or
event which with the giving of notice and/or the passage of time would become an Event of
Default hereunder (a “Potential Default”), shall have occurred and be continuing.

     SECTION 14. Representations and Warranties.

          (A) Agreement. The Company represents and warrants to FCW that as of the date of this
Agreement:

 

 

	 	 	 
	Calavo Growers, Inc.
	 	 
	AGREEMENT NO. 3789055-101

	 	Page 5

               (1) Compliance. The Company and, to the extent contemplated hereunder, each
“Subsidiary” (as defined below), is in compliance with all of the terms of this Agreement, and no
Event of Default or Potential Default exists hereunder.

               (2) Subsidiaries. The Company has the following Subsidiaries: Calavo Foods, Inc. (CFI); Maui
Fresh International, Inc.; Calavo de Mexico S.A. de C.V.; and Calavo Foods de Mexico S.A. de C.V..
For purposes hereof, a “Subsidiary” shall mean a corporation of which shares of stock having
ordinary voting power to elect a majority of the board of directors or other managers of such
corporation are owned, directly or indirectly, by the Company.

               (3) Conflicting Agreements. This Agreement and the Note (collectively, at any time, the “Loan
Documents”), do not conflict with, or require the consent of any party to, any other agreement to
which the Company is a party or by which it or its property may be bound or affected, and do not
conflict with any provision of the Company’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 Loan Documents.

               (5) Binding Agreement. The Loan Documents create legal, valid, and binding obligations of the
Company which are enforceable in accordance with their terms, 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 writing by FCW, while this
Agreement is in effect, the Company agrees to and with respect to Subsections 15(A) through 15(F)
hereof, agrees to cause each Subsidiary, if any, to:

          (A) Corporate Existence, Licenses. (i) Preserve and keep in full force and effect its
existence and good standing in the jurisdiction of its incorporation or formation; (ii) qualify
and remain qualified to transact business in all jurisdictions where such qualification 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 all applicable Laws,
including, without limitation, all Laws relating to environmental protection. In addition, the
Company agrees to cause all persons occupying or present on any of its properties, and to cause
each Subsidiary, if any, to cause all persons occupying or present on any of its properties, to
comply in all material respects with all environmental protection Laws.

          (C) Insurance. Maintain insurance with insurance companies or associations acceptable to FCW
in such amounts and covering such risks as are usually carried by companies

 

 

	 	 	 
	Calavo Growers, Inc.
	 	 
	AGREEMENT NO. 3789055-101

	 	Page 6

engaged in the same or similar business and similarly situated, and make such increases in
the type or amount of coverage as FCW may request. At FCW’s request, all policies (or such other
proof of compliance with this Subsection as may be satisfactory to FCW) shall be delivered to
FCW.

          (D) Property Maintenance. Maintain all of its property that is necessary to 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 in which
complete entries will be made in accordance with generally accepted accounting principles
(“GAAP”) consistently applied.

          (F) Inspection. Permit FCW or its agents, upon reasonable notice and during 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) Annual Financial Statements. As soon as available, but in no event more than 90 days
after the end of each fiscal year of the Company occurring during the term hereof, annual
consolidated and consolidating financial statements of the Company and its consolidated
Subsidiaries, if any, prepared in accordance with GAAP consistently applied. Such financial
statements shall: (a) be audited by independent certified public accountants selected by the
Company and acceptable to FCW; (b) be accompanied by a report of such accountants containing an
opinion thereon acceptable to FCW; (c) be prepared in reasonable 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 relating thereto.

               (2) Interim Financial Statements. As soon as available, but in no event more than 45 days
after the end of each fiscal quarter, a consolidated balance sheet 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, for such period and for the
period year to date, and such other interim statements as FCW may specifically request, all
prepared in reasonable detail and in comparative form in accordance with GAAP consistently applied
and certified by an authorized officer or employee of the Company acceptable to FCW.

               (3) Notice of Default. Promptly after becoming aware thereof, notice of the occurrence of an
Event of Default or a Potential Default.

               (4) Notice of Non-Environmental Litigation. Promptly after the commencement thereof, notice of
the commencement of all actions, suits, or proceedings before any court, arbitrator, or
governmental department, commission, board, bureau, agency, or

 

 

	 	 	 
	Calavo Growers, Inc.
	 	 
	AGREEMENT NO. 3789055-101

	 	Page 7

instrumentality affecting the Company or any Subsidiary which, if determined adversely to the
Company or any such Subsidiary, could have a material adverse effect on the 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 any other communication alleging a
condition that may require the Company or any Subsidiary to undertake or to contribute to a
cleanup or other response under environmental Laws, or which seek penalties, damages, injunctive
relief, or criminal sanctions related to alleged violations of such Laws, or which claim personal
injury or property damage to any person as a result of environmental factors or conditions.

               (6) Bylaws and Articles. Promptly after any change in the Company’s bylaws or 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 or operations,
financial or otherwise, of the Company or any Subsidiary as FCW may from time to time reasonably
request, including but not limited to copies of all pleadings, notices, and communications
referred to in Subsections 15(G)(4) and (5) above.

               (8) Financial Certificate. Together with each set of financial statements furnished to FCW
pursuant to Section 15(G)(1), and each quarterly statement submitted pursuant to Section 15(G)(2)
for a period corresponding to a period for which one or more of the financial covenants set forth
in Section 17 hereof are required to be tested, a certificate of an officer or employee of the
Company acceptable to FCW setting forth calculations showing compliance with each of the financial
covenants that require compliance at the end of the period for which the statements are being
furnished.

          (H) Certain Organizational Changes. Provide FCW with prior notice (and as early as
practicable) of any merger, consolidation reorganization under a different provision of law,
acquisition of all or a material part of the assets of another organization, change of name,
adoption of any trade name, or creation of any Subsidiary, affiliate or material joint venture(s).
For purposes of this covenant, joint venture transaction(s), which alone or in the aggregate
exceed $1,000,000, are considered material.

     SECTION 16. Negative Covenants. Unless otherwise agreed to in writing by FCW, which agreement
will not be unreasonably withheld, while this Agreement is in effect, the Company will not:

          (A) Borrowings. Create, incur, assume, or allow to exist, directly or indirectly, any
indebtedness or liability for borrowed money (including trade or bankers’ acceptances), letters of
credit, or the deferred purchase price of property or services (including capitalized leases),

 

 

	 	 	 
	Calavo Growers, Inc.
	 	 
	AGREEMENT NO. 3789055-101

	 	Page 8

except for: (i) debt to FCW; (ii) accounts payable to trade creditors incurred in the ordinary
course of business; and (iii) current operating liabilities (other than for borrowed money)
incurred in the ordinary course of business; (iv) debt of the Company to Bank of America in an
amount not to exceed $15,000,000.00 and all extensions, renewals, and refinancings thereof; (v)
(vi) letters of credit issued by any bank for the account of the Company in an aggregate face
amount not to exceed $5,000,000.00 at any one time outstanding; and (vii) capitalized leases
existing on the date hereof existing from time to time.

          (B) Liens. Create, incur, assume, or allow to exist any mortgage, deed of trust, pledge, lien
(including the lien of an attachment, judgment, or execution), security interest, or other
encumbrance of any kind upon any of its property, real or personal (collectively, “Liens”). The
foregoing restrictions shall not apply to: (i) Liens in favor of FCW or CoBank; (ii) Liens for
taxes, assessments, or governmental charges that are not past due; (iii) Liens and deposits under
workers’ compensation, unemployment insurance, and social security Laws; (iv) Liens and deposits
to secure the performance of bids, tenders, contracts (other than contracts for the payment of
money), and like obligations arising in the ordinary course of business as conducted on the date
hereof; (v) Liens imposed by Law in favor of mechanics, materialmen, warehousemen, and like
persons that secure obligations that are not past due; and (vi) easements, rights-of-way,
restrictions, and other similar encumbrances which, in the aggregate, do not materially interfere
with the occupation, use, and enjoyment of the property or assets encumbered thereby in the normal
course of its business or materially impair the value of the property subject thereto.

          (C) Transfer of Assets. Sell, transfer, lease, or otherwise dispose of any of 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, directly or indirectly
(including, but not limited to, by means of a maintenance agreement, an asset or stock purchase
agreement, or any other agreement designed to ensure any creditor against loss), for or on account
of the obligation of any person or entity, except by the endorsement of negotiable instruments for
deposit or collection or similar transactions in the ordinary course of the Company’s business.

          (E) Change
in Business. Engage in any business activities or operations substantially different from or unrelated to the Company’s present business activities or operations.

     SECTION 17. Financial Covenants. Unless otherwise agreed to in writing, while this
Agreement is in effect:

 

 

	 	 	 
	Calavo Growers, Inc.
	 	 
	AGREEMENT NO. 3789055-101

	 	Page 9

          (A) Working Capital. The Company will maintain, on a consolidated basis, current
assets in excess of current liabilities of at least Fifteen Million Dollars ($15,000,000),
measured on a quarterly basis beginning January 31, 2008

          (B) Tangible Net Worth. The Company will maintain, on a consolidated basis, a “Tangible Net
Worth” equal to at least Thirty-Two Million Five Hundred Thousand Dollars (S32,500,000.00),
measured on a quarterly basis. “Tangible Net Worth” means the value of total assets (including
leaseholds and leasehold improvements and reserves against assets but excluding goodwill, patents,
trademarks, trade names, organization expense, unamortized debt discount and expense, capitalized
or deferred research and development costs, deferred marketing expenses, and other like
intangibles, and monies due from affiliates, officers, directors, employees, shareholders, members
or managers) less total liabilities, including but not limited to accrued and deferred income
taxes, but excluding the non-current portion of Subordinated Liabilities. “Subordinated
Liabilities” means liabilities subordinated to the Borrower’s obligations to FCW in a manner
acceptable to FCW in its sole discretion.

          (C) EBITDA. The Company will maintain an “EBITDA” of at least Seven Million Five Hundred
Thousand Dollars ($7,500,000.00). “EBITDA” means net income, less income or plus loss from
discontinued operations and extraordinary items, plus income taxes, plus interest expense,
plus depreciation, depletion, and amortization. This covenant will be calculated at the end of
each reporting period for which FCW requires financial statements, using the results of the
twelve-month period ending with that reporting period. The current portion of long-term
liabilities 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 Default”
under this Agreement:

          (A) Payment Default. The Company should fail to make any payment when due.

          (B) Representations and Warranties. Any representation or warranty made or deemed made by the
Company herein or in the Note, application, agreement, certificate, or other document related to
or furnished in connection with this Agreement or the Note, shall prove to have been false or
misleading in any material respect on or as of the date made or deemed made.

          (C) Certain Affirmative Covenants. The Company or, to the extent required hereunder, any
Subsidiary should fail to perform or comply with Sections 15(A) through 15(G)(2), and 15(G)(6) and
such failure continues for 15 days after written notice thereof shall have been delivered by FCW
to the Company.

          (D) Other Covenants and Agreements. The Company or, to the extent required hereunder, any
Subsidiary should fail to perform or comply with any other covenant or agreement contained herein
or in any other Loan Document or shall use the proceeds of any loan for an unauthorized purpose.

 

 

	 	 	 
	Calavo Growers, Inc.
	 	 
	AGREEMENT NO. 3789055-101

	 	Page 10

          (E) Cross-Default.
The Company should, after any applicable grace period, breach or be in default under the terms of any other agreement between the Company and FCW.

          (F) Other Indebtedness. The Company or any Subsidiary should fail to pay when due
any indebtedness to any other person or entity for borrowed money or any long-term
obligation
for the deferred purchase price of property (including any capitalized lease), or any other
event
occurs which, under any agreement or instrument relating to such indebtedness or obligation,
has
the effect of accelerating or permitting the acceleration of such indebtedness or
obligation,
whether or not such indebtedness or obligation is actually accelerated or the right to
accelerate is
conditioned on the giving of notice, the passage of time, or otherwise.

          (G) Judgments. A judgment, decree, or order for the payment of money shall be
rendered against the Company or any Subsidiary and either: (i) enforcement proceedings shall
have been commenced; (ii) a Lien prohibited under 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 20 consecutive days without being vacated, discharged,
satisfied, or stayed pending appeal.

          (H) Insolvency. The Company or any Subsidiary shall: (i) become insolvent or shall generally
not, or shall be unable to, or shall admit in writing its inability to, pay its debts as they come
due; or (ii) suspend its business operations or a material part thereof or make an assignment for
the benefit of creditors; or (iii) apply for, consent to, or acquiesce in the appointment of a
trustee, receiver, or other custodian for it or any of its property or, in the absence of such
application, consent, or acquiescence, a trustee, receiver, or other custodian is so appointed; or
(iv) commence or have commenced against it any proceeding under any bankruptcy, reorganization,
arrangement, readjustment of debt, dissolution, or liquidation Law of any jurisdiction.

          (I) Material Adverse Change. Any material adverse change occurs, as reasonably determined by
FCW, in the Company’s financial condition, results of operation, or ability to perform its
obligations hereunder or under any instrument or document contemplated hereby.

     SECTION 19. Remedies. Upon the occurrence and during the continuance of an Event of Default or
any Potential Default, FCW shall have no obligation to continue to extend credit to the Company and
may discontinue doing so at any time without prior notice. For all purposes hereof, the term
“Potential Default” means the occurrence of any event which, with the passage of time or the 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, FCW may, upon notice to the Company, terminate any commitment
and declare the entire unpaid principal balance of the loans, all accrued interest thereon, and all
other amounts payable under this Agreement, all Supplements, and the other Loan Documents to be
immediately due and payable. Upon such a declaration, the unpaid principal balance of the loans and
all such other amounts shall become immediately due and payable, without protest, presentment,
demand, or further notice of any

 

 

	 	 	 
	Calavo Growers, Inc.
	 	 
	AGREEMENT NO. 3789055-101

	 	Page 11

kind, all of which are hereby expressly waived by the Company. In addition, upon such an
acceleration:

          (A) Enforcement. FCW may proceed to protect, exercise, and enforce such rights and remedies
as may be provided by this Agreement, any other Loan Document or under Law. Each and every one of
such rights and remedies shall be cumulative and may be exercised from time to time, and no
failure on the part of FCW to exercise, and no delay in exercising, any right or remedy shall
operate as a waiver thereof, and no single or partial exercise of any right or remedy shall
preclude any other or future exercise thereof, or the exercise of any other right. Without
limiting the foregoing, FCW may hold and/or set off and apply against the Company’s obligations
to FCW any cash collateral held by FCW, or any balances held by FCW for the Company’s account
(whether or not such balances are then due).

          (B) Application of Funds. CoBank may apply all payments received by it to the Company’s
obligations to FCW in such order and manner as FCW may elect in its sole discretion.

          In addition to the rights and remedies set forth above: (i) if the Company fails to make “any
payment when due, then at FCW’s option in each instance, such payment shall bear interest from the
date due to the date paid at 2% per annum in excess of the rate(s) of interest that would
otherwise be in effect on that loan; and (ii) after the maturity of any loan (whether as a result
of acceleration or otherwise), the unpaid principal balance of such loan (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
interest provided for herein shall be payable on demand and shall be calculated on the basis of a
year consisting of 365 days.

     SECTION 20. Broken Funding Surcharge. Notwithstanding any provision contained in the Note
giving the Company the right to repay any loan prior to the date it would otherwise be due and
payable, the Company agrees to provide three Business Days’ prior written notice for any prepayment
of a fixed rate balance and that in the event it repays any fixed rate balance prior to its
scheduled due date or prior to the last day of the fixed rate period applicable thereto (whether
such payment is made voluntarily, as a result of an acceleration, or otherwise), the Company will
pay to CoBank a surcharge in an amount equal to the greater of: (i) an amount which would result in
FCW being made whole (on a present value basis) for the actual or imputed funding losses incurred
by FCW as a result thereof; or (ii) $300.00. Notwithstanding the foregoing, in the event any fixed
rate balance is repaid as a result of the Company refinancing the loan with another lender or by
other means, then in lieu of the foregoing, the Company shall pay to CoBank a surcharge in an
amount sufficient (on a present value basis) to enable FCW to maintain the yield it would have
earned during the fixed rate period on the amount repaid. Such surcharges will be calculated in
accordance with methodology established by FCW (a copy of which will be made available to the
Company upon request).

 

 

	 	 	 
	Calavo Growers, Inc.
	 	 
	AGREEMENT NO. 3789055-101

	 	Page 12

     SECTION 21. Complete Agreement, Amendments. This Agreement, the Note, and all other
instruments and documents contemplated hereby and thereby, are intended by the parties to be a
complete and final expression of their agreement. No amendment, modification, or waiver of any
provision hereof or thereof, and no consent to any departure by the Company herefrom or
therefrom, shall be effective unless approved by FCW and contained in a writing signed by or on
behalf of FCW, and then such waiver or consent shall be effective only in the specific instance
and for the specific purpose for which given. Additionally, any headings used in this Agreement
are inserted only as a matter of convenience and for reference, and in no way define, limit or
describe the scope or intent of any term or provision. As used herein, the word “including” means
“including without limitation” and/or “including but not limited to”.

     SECTION 22. Applicable Law. Except to the extent governed by applicable federal law, this
Agreement and the Note shall be governed by and construed in accordance with the laws of the State
of California, without reference to choice of law doctrine.

     SECTION 23. Notices. All notices hereunder shall be in writing and shall be deemed to be
duly given upon delivery if personally delivered or sent by telegram or facsimile transmission, or
3 days after mailing if sent by express, certified or registered mail, to the parties at the
following addresses (or such other address for a party as shall be specified by like notice):

	 	 	 
	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-Finance
	Visalia, CA 93291-5700

	 	1141-A Cummings Road
	 

	 	Santa Paula, CA 93060
	Attention: James Neeley

	 	Fax No: (805)921-3232
	Fax No.: 559-627-4728
	 	 

     SECTION 24. Taxes and Expenses. To the extent allowed by law, the Company agrees to pay all
reasonable out-of-pocket costs and expenses (including the fees and expenses of counsel retained
by FCW) incurred by FCW in connection with the administration, collection, and enforcement of this
Agreement and the other Loan Documents, including, without limitation, all costs and expenses
incurred in perfecting, maintaining, determining the priority of, and releasing any security for
the Company’s obligations to FCW, and any stamp, intangible, transfer, or like tax payable in
connection with this Agreement or any other Loan Document.

     SECTION 25. Effectiveness and Severability. This Agreement shall continue in effect until:
(i) all indebtedness and obligations of the Company under this Agreement, the Note, and all other
Loan Documents shall have been paid or satisfied; and (ii) FCW has no commitment to extend credit
to or for the account of the Company hereunder. Any provision of this Agreement or any other Loan
Document which is prohibited or unenforceable in any jurisdiction shall, as to

 

 

	 	 	 
	Calavo Growers, Inc.
	 	 
	AGREEMENT NO. 3789055-101

	 	Page 13

such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof or thereof.

     SECTION 26. Successors and Assigns. This Agreement, the Note, and the other Loan Documents
shall be binding upon and inure to the benefit of the Company and FCW and their respective
successors and assigns, except that the Company may not assign or transfer its rights or
obligations under this Agreement, the Note or any other Loan Document without the prior written
consent of FCW,

     SECTION 27. Participations. From time to time, FCW may sell to one or more banks, financial
institutions or other lenders a participation in all or a portion of the Commitment or other
extensions of credit made pursuant to this Agreement. However, no such participation shall relieve
FCW of any commitment made to the Company hereunder, or any obligation FCW may have to pay
patronage due the Company from FCW under the provisions of the bylaws of FCW and its practices and
procedures related to patronage distribution. In connection with the foregoing, FCW may disclose
information concerning the Company and its Subsidiaries to any participant or prospective
participant, provided that such participant or prospective participant agrees to keep such
information confidential. Accordingly, all interests in the Commitment that is included in a sale
of participation interests shall not be entitled to patronage distributions. A sale of
participation interest may include certain voting rights of the participants regarding the
Commitment hereunder (including without limitation the administration, servicing and enforcement
thereof). FCW agrees to give written notification to the Company of any sale of participation
interests.

     IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by their duly
authorized officers as of the date shown above.

	 	 	 	 	 	 	 	 	 	 	 
	FARM CREDIT WEST, PCA	 	 	 	CAIAVO GROWERS, INC., a California	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	/s/ James Neeley
 

	 	 	 	By:
	 	/s/ Arthur J. Bruno
 

Arthur J. Bruno,
	 	 
	Title:

	 	Senior Vice President
	 	 	 	Title:
	 	Chief Operating Officer, Chief

Financial Officer & Corporate Secretary	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	By:
	 	/s/ Scott H. Runge
 

Scott H. Runge,
	 	 
	 

	 	 	 	 	 	Title:
	 	Treasurerexv4w1

 

Exhibit 4.1

AMENDMENT TO STOCKHOLDERS RIGHTS PLAN

AMENDMENT NO. 1 TO 

 RIGHTS AGREEMENT

     This Amendment No. 1 to Rights Agreement (this “Amendment”), is entered into on April 27, 2007
and effective as of October 18, 2006, between Virco Mfg. Corporation, a Delaware corporation (the
“Company”), and Mellon Investor Services LLC, as successor to The Chase Manhattan Bank (the “Rights
Agent”). This Amendment amends that certain Rights Agreement, dated as of October 18, 1996 (the
“Agreement”), between the Company and the Rights Agent. Capitalized terms used herein and not
otherwise defined shall have the meanings given to such terms in the Agreement.

RECITALS

     WHEREAS, the Company previously authorized, declared and paid a dividend of one preferred
stock purchase right (a “Right”) for each share of common stock, par value .01 per share, of the
Company subject to the terms and conditions of the Agreement;

     WHEREAS, pursuant to the Agreement, the Rights will expire on October 25, 2006;

     WHEREAS, the Board of the Directors of the Company deems it to be in the best interests of the
Company to amend the Agreement, in accordance with the terms hereof, to extend the term of the
Rights and to make such other changes as provided herein; and

     WHEREAS, the Company and the Rights Agent desire to enter into this Amendment to extend the
term of the Rights and to make such other changes as provided herein.

     NOW, THEREFORE, in consideration of the mutual promises and covenants hereinafter set forth,
the Company and the Rights Agent hereby agree as follows:

AGREEMENT

     1. Section 1(n) of the Agreement is hereby deleted in its entirety and replaced with the
following:

     “(n) “Expiration Date” shall mean October 25, 2016, unless the
Distribution Date shall occur on or prior to such date and the Rights shall
have been separated from the Common Shares pursuant to the terms of this
Agreement, in which case “Expiration Date” shall mean the date which is the
tenth anniversary of the Distribution Date.”

     2. The first sentence of Section 2 of the Agreement is hereby deleted in its entirety and
replaced with the following:

     “The Company hereby appoints the Rights Agent to act as rights agent for the
Company in accordance with the terms and conditions hereof, and the Rights Agent
hereby accepts such appointment.”

     3. The references to “The Chase Manhattan Bank” in Section 3(e) and Section 3(f) of the
Agreement are hereby deleted and replaced with “Mellon Investor Services LLC.”

     4. Section 3 of the Agreement is hereby amended by inserting the following as Section 3(i)
thereof:

     “(i) The Company shall promptly notify the Rights Agent in writing upon the
occurrence of the Distribution Date and, if such notification is given orally, the
Company shall confirm same in writing

 

 

on or prior to the Business Day next following. Until such notice is received
by the Rights Agent, the Rights Agent may presume conclusively for all purposes that
the Distribution Date has not occurred.”

     5. Section 4 of the Agreement is hereby amended by inserting “(but which do not affect the
rights, duties or responsibilities of the Rights Agent)” after the phrase “as the Company may deem
appropriate”.

     6. The references to “in New York, New York” in Section 5(b) and Section 7(b) of the Agreement
are hereby deleted and replaced with “designated for such purpose.”

     7. The following sentence is hereby added as the last sentence of Section 6(a) of the
Agreement:

     “The Rights Agent shall have no duty or obligation under this Section unless and
until it is satisfied that all such taxes and/or charges have been paid.”

     8. Section 11(c) of the Agreement is hereby amended by inserting “(as determined in good faith
by the Board of Directors of the Company, whose determination shall be described in a statement
filed with the Rights Agent)” after the phrase “over and above the fair market value”.

     9. Section 11(i) of the Agreement is hereby amended by inserting “(with prompt written notice
to the Rights Agent) after the phrase “make a public announcement”.

     10. Section 11(l) of the Agreement is hereby amended by inserting “(with prompt written notice
thereof to the Rights Agent)” after the phrase “the Company may elect to defer”.

     11. Section 12 of the Agreement is hereby deleted in its entirety and replaced with the
following:

     “Whenever an adjustment is made or any event affecting the Rights or their
exercisability (including without limitation an event which causes Rights to become
null and void) occurs as provided in Section 11 or 13 hereof, the Company shall
promptly (a) prepare a certificate setting forth such adjustment or describing such
event, and a brief, reasonably detailed statement of the facts, computations and
methodology accounting for any adjustment, (b) file with the Rights Agent and with
each transfer agent for the securities issuable upon exercise of the Rights a copy of
such certificate and (c) mail a brief summary thereof to each holder of Rights in
accordance with Section 25 and Section 26 hereof. The Rights Agent shall be fully
protected in relying on any such certificate and on any adjustment or statement
therein contained and shall have no duty or liability with respect to, and shall not
be deemed to have knowledge of, any adjustment or any such event unless and until it
shall have received such a certificate.”

     12. Section 14 of the Agreement is hereby amended by inserting the following as Section 14(d)
thereof:

     “(d) Whenever a payment for fractional Rights or fractional shares is to be made
by the Rights Agent, the Company shall (i) promptly prepare and deliver to the Rights
Agent a certificate setting forth in reasonable detail the facts related to such
payments and the prices and/or formulas utilized in calculating such payments, and
(ii) provide sufficient monies to the Rights Agent in the form of fully collected
funds to make such payments. The Rights Agent shall be fully protected in relying
upon such a certificate and shall have no duty with respect to, and shall not be
deemed to have knowledge of any payment for fractional Rights or fractional shares
under any Section of this Agreement relating to the payment of fractional Rights or
fractional shares unless and until the Rights Agent shall have received such a
certificate and sufficient monies.”

     13. Section 15 of the Agreement is hereby amended by inserting “and Section 20 hereof” after
the phrase “Section 18”.

     14. Section 15 of the Agreement is hereby amended by inserting the following as Section 15(b)
thereof:

     “(b) Notwithstanding anything in this Agreement to the contrary, neither the
Company nor

18

 

the Rights Agent shall have any liability to any holder of a Right or
other Person as a result of its inability to perform any of its obligations under
this Agreement by reason of any preliminary or permanent injunction or other order,
judgment, decree or ruling (whether interlocutory or final) issued by a court or
by a governmental, regulatory, self-regulatory or administrative agency or
commission, or any statute, rule, regulation or executive order promulgated or
enacted by any governmental authority, prohibiting or otherwise restraining
performance or such obligation.”

     15. Section 18(a) of the Agreement is hereby deleted in its entirety and replaced with the
following:

     “(a) The Company agrees to pay the Rights Agent reasonable compensation for all
services rendered by it hereunder and, from time to time, on demand of the Rights
Agent, its reasonable expenses and counsel fees and other disbursements incurred in
the preparation, delivery, amendment, administration and execution of this Agreement
and the exercise and performance of its duties hereunder. The Company also agrees to
indemnify the Rights Agent for, and to hold it harmless against, any loss, liability,
damage, judgment, fine, penalty, claim, demand, settlement, cost or expense
(including, without limitation, the reasonable fees and expenses of legal counsel),
incurred without gross negligence or bad faith on the part of the Rights Agent (which
gross negligence or bad faith must be determined by a final, non-appealable order,
judgment, decree or ruling of a court of competent jurisdiction), for any action
taken, suffered, or omitted by the Rights Agent in connection with the acceptance,
administration, exercise and performance of its duties under this Agreement. The
costs and expenses incurred in enforcing this right of indemnification shall be paid
by the Company. The provisions of this Section 18 and Section 20 below shall survive
the termination of this Agreement, the exercise or expiration of the Rights and the
resignation, replacement or removal of the Rights Agent.”

     16. Any and all references to “corporation” in Section 19 of the Agreement are hereby deleted
and replaced with references to “Person”.

     17. The reference to “corporate trust or stock transfer” in Section 19 of the Agreement is
hereby deleted and replaced with a reference to “shareholder services”.

     18. Section 20(c) of the Agreement is hereby amended by inserting the following at the end of
Section 20(c):

     “Any liability of the Rights Agent under this Agreement will be limited to four
(4) times the amount of annual fees paid by the Company to the Rights Agent.”

     19. Section 20(c) of the Agreement is hereby amended by inserting “(which negligence, bad
faith or willful misconduct must be determined by a final, non-appealable order, judgment, decree
or ruling of a court of competent jurisdiction”) after the phase “negligence, bad faith or willful
misconduct.”)

     20. Section 20(i) of the Agreement is hereby amended by deleting “provided that reasonable
care was exercised in the selection thereof” and replacing it with the following:

     “absent gross negligence or bad faith in the selection and continued employment
thereof (which gross negligence or bad faith must be determined by a final,
non-appealable order, judgment, decree or ruling of a court of competent
jurisdiction).”

     21. Section 20(g) of the Agreement is hereby amended by deleting the phrase “and it shall not
be liable for any action taken or suffered by it in good faith in accordance with the instructions
of any such officer” and replacing it with the following:

     “and the Rights Agent shall not be liable for or in respect of any action taken,
suffered or omitted by it in accordance with instructions of any such officer or for
any delay in acting while waiting for those instructions. The Rights Agent shall be
fully authorized and protected in relying upon the most recent instructions received
by any such officer. Any application by the Rights Agent for written instructions

19

 

from the Company may, at the option of the Rights Agent, set forth in writing any
action proposed to be taken, suffered or omitted by the Rights Agent under this
Agreement and the date on and/or after which such action shall be taken or suffered
or such omission shall be effective.”

     22. Section 20 of the Agreement is hereby amended by inserting the following as Section 20(j)
thereof.

     “(j) No provision of this Rights Agreement shall require the Rights Agent to
expend or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder or in the exercise of its rights if it
reasonably believes that repayment of such funds or adequate indemnification against
such risk or liability is not reasonably assured to it.”

     23. Any and all references to “corporation” in Section 21 of the Agreement are hereby deleted
and replaced with references to “Person”.

     24. Section 21 of the Agreement is hereby amended by inserting the following at the end of the
fifth sentence of Section 21:

     “or an Affiliate of such a Person.”

     25. Section 23(a) of the Agreement is hereby deleted in its entirety and replaced with the
following:

     “(a) Until the earliest of (i) the date of the first Section 11(a)(ii)
Event, (ii) the date of the first Section 13(a) Event or (iii) the Expiration
Date, the Board of Directors of the Company may, at its option, authorize and
direct the redemption of all, but not less than all, of the then outstanding
Rights at a redemption price of $.001 per Right, as such redemption price
shall be appropriately adjusted to reflect any stock split, stock dividend or
similar transaction occurring after the date hereof (the “Redemption Price”),
and the Company shall so redeem the Rights.”

     26. The following is hereby added as the second sentence of Section 23(b) of the Agreement:

     “The Company shall promptly give public notice of any such redemption (with
prompt written notice thereof to the Rights Agent).”

     27. The following is hereby added as the second sentence of Section 24(b) of the Agreement:

     “The Company shall promptly given public notice of any such exchange (with
prompt written notice thereof to the Rights Agent.”

     28. The provision of Section 26 of the Agreement relating to the address of the Rights Agent
is hereby deleted in its entirety and replaced with the following:

“Mellon Investor Services LLC

600 N. Pearl Street

Suite 1010

Dallas, TX 75201

Attention: Relationship Manager

Facsimile No.: (214) 922-4477

With a copy to:

Mellon Investor Services LLC

Newport Office Center VII

480 Washington Blvd.

Jersey City, New Jersey 07310

Facsimile No.: (201) 680-4610”

20

 

     29. Section 27(a) of the Agreement is hereby amended by adding the following before the phrase
“the Rights Agent shall so supplement”:

     “, upon receipt of a certificate from an appropriate officer of the
Company that states that the proposed supplement or amendment complies with
this Section 27,”

     30. Section 27(a) of the Agreement is hereby amended by adding the following at the
end of Section 27(a):

     “Notwithstanding anything contained in this Agreement to the contrary,
the Rights Agent may, but is not obligated to, enter into any supplement or
amendment that affects the Rights Agent’s own rights, duties, obligations or
immunities under this Agreement.”

     31. The proviso in Section 32 of the Agreement is hereby deleted in its entirety and replaced
with the following:

     “provided, however, that all provisions regarding the rights, duties and
obligations of the Rights Agent shall be governed by and construed in accordance with
the laws of the State of New York applicable to contracts made and to be performed
entirely within such State.”

     32. The reference to “October 25, 2006” in the block header of Exhibit B to the Agreement is
hereby replaced with a reference to “October 25, 2016”.

     33. The reference to “October 25, 2006” in the first paragraph of Exhibit B to the Agreement
is hereby replaced with a reference to “October 25, 2016.”

     34. The references to “The Chase Manhattan Bank” in Exhibit B are hereby replaced with
references to “Mellon Investor Services LLC.”

     35. Section 4 of Exhibit C to the Agreement is hereby deleted in its entirety and replaced
with the following:

     “The Rights shall expire on October 25, 2016, unless earlier redeemed or
exchanged, unless the Distribution Date has previously occurred and the
Rights have separated from the Common Shares, in which case the Rights will
remain outstanding for ten years.”

     36. This Amendment shall be deemed to be a contract made under the laws of the State of
Delaware and for all purposes shall be governed by and construed in accordance with the laws of
such State applicable to contracts made and performed entirely within such State; provided,
however, that with respect solely to matters regarding the rights and obligations of the Rights
Agent hereunder, the laws of the State of New York shall govern.

     37. This Amendment may be executed by facsimile signature and in two or more counterparts,
each of which shall constitute an original, but all of which, when taken together, shall constitute
one instrument.

     38. Except as expressly provided in this Amendment, all terms and provisions of the Agreement
shall remain unmodified and in full force and effect.

[signature page follows]

21

 

IN WITNESS WHEREOF, this Amendment is entered into as of the date first above written.

	 	 	 	 	 	 	 
	 	 	VIRCO MFG. CORPORATION,

a Delaware corporation	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

	 	 
	 

	 	 	 	Name:	 	 
	 

	 	 	 	Title:	 	 
	 
	 	 	 	 	 	 
	 	 	MELLON INVESTOR SERVICES LLC,
 as Rights Agent	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

	 	 
	 

	 	 	 	Name:	 	 
	 

	 	 	 	Title:

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00124-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00124-of-00352.parquet"}]]