TERM REVOLVING CREDIT AGREEMENT
EXHIBIT 10.1
Loan No. 3789055-101
THIS TERM REVOLVING CREDIT AGREEMENT (“ Agreement”) is entered into as of January 31, 2007
and is a replacement of the Agreement” Dated October 5,
▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ (“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 $12,000,000.00 (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 August 17, 2005, 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. 2010.
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.
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(A) Interest. The Company agrees to pay interest on the unpaid balance of the Commitment in
accordance with the following interest rate option:
(1) 7-Day LIBOR Index Rate. At a rate (rounded upward to the nearest 1/100th% 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 ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇; (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
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in the relevant month; (d) “Eurocurrency Liabilities” shall have meaning as set forth in “FRB
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, 2010 (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. ▇▇▇▇▇▇▇▇▇ 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 ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇▇-▇▇▇▇ (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
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which CoBank receives immediately available funds; or (b) the next business day after receipt of
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:
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(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 ▇▇▇▇▇▇▇▇▇▇.▇▇ 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.
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(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
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.
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(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
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:
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(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),
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 $12,000,000.00 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:
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(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
($32,500,000.00), 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.
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(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 prceedings 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 ail 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
| AGREEMENT NO. 3789055-101 | Page11 |
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).
| 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. | |||
▇▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇
|
Attn: Vice President-Finance | |||
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
|
▇▇▇▇-▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇ |
|||
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇
|
Fax No: (▇▇▇) ▇▇▇-▇▇▇▇ | |||
Fax No. : ▇▇▇-▇▇▇-▇▇▇▇ |
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
| 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 | CALAVO GROWERS, INC.. a California | |||||||
| Corporation | ||||||||
By:
|
/s/ ▇▇▇▇▇ ▇ ▇▇▇▇▇ | By: | /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ | |||||
| ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, | ||||||||
Title:
|
S Vice President | Title: | Chief Operating Officer, Chief | |||||
| Financial Officer & Corporate | ||||||||
| Secretary | ||||||||
| By: | /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇ | |||||||
| ▇▇▇▇▇ ▇. ▇▇▇▇▇, | ||||||||
| Title | Treasurer | |||||||
PROMISSORY NOTE
$12,000,000.00
January 31,2007
FOR VALUE RECEIVED, on the Maturity Date as set forth in that certain Agreement dated January
31, 2007, or in any amendments thereto (the “Agreement”), the undersigned promises to pay to the
order of Farm Credit West, PCA (the “Payee”), or order, at the place and in the manner set forth
in the Agreement, the principal amount of TWELVE MILLION DOLLARS ($12,000,000.00). The undersigned
promises to pay interest on the principal amount hereof remaining unpaid from time to time from
the date hereon until the date of payment in full, payable as provided below under “Repayment
Terms”.
This note is given for advances to be made by Payee to the undersigned from time to time in
accordance with the terms and conditions of the Agreement, all the terms and conditions of which
are incorporated herein by reference. Advances, accrued interest, and payments shall be posted by
the Payee upon an appropriate accounting record, shall be prima facie evidence as to all such
amounts and shall be binding on the undersigned absent manifest error. The total of such advances
may not exceed the face amount of this note. This note 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 August 17, 2006, in
the principal amount of $12,000,000.00. Furthermore, this note also evidences an additional loan
advance(s) to the extent the note under exceeds the renewed unpaid balance(s) referred to above.
Repayment Terms: The undersigned shall pay to Payee, Thirty-six (36) monthly interest only
payments, in the amount billed, beginning on February 01, 2007; and One (1) installment of
interest in the amount billed plus principal of any amount necessary to pay the note in full on
February 1, 2010. Payments, other than those required as specified in this Section or in the
Agreement, may be made at any time and in any amount during the term of this note, unless limited
or prohibited herein or unless otherwise required by FCW in writing. This note is due and payable
in full on February 1, 2010 (“Maturity Date”), at which time the undersigned shall pay the unpaid
principal balance and all accrued interest in full. Any amount of principal hereof which is not
paid when due, whether at stated maturity, by acceleration or otherwise, shall bear interest from
the date when due until said principal is paid in full, payable on demand, at a rate per annum
set forth in the Agreement.
The makers or endorsers hereof hereby waive presentment for payment, demand, protest, and
notice of dishonor and nonpayment of this note, and all defenses on the ground of delay or of any
extension of time for the payment hereof which may be hereafter given by the holder or holders
hereof to them or either of them or to anyone who has assumed the payment of this note, and it is
specifically agreed that the obligations of said makers or endorsers shall not be in anyway
affected or altered to the prejudice of the holder or holders hereof by reason of the assumption
of payment of the same by any other person or entity.
The undersigned hereby promises to pay all costs and expenses of any rightful holder hereof
incurred in collecting the undersigned’s obligations hereunder or in enforcing or attempting to
enforce any of such holder’s rights hereunder, including reasonable attorneys’ fees and
disbursements, whether or not an action is filed in connection therewith.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE. WITH, THE LAWS OF THE
STATE OF CALIFORNIA. REPRESENTATIVES OF FCW ARE NOT AUTHORIZED TO MAKE ANY ORAL AGREEMENTS OR
ASSURANCES. DO NOT SIGN THIS NOTE IF YOU BELIEVE THAT THERE ARE ANY AGREEMENTS OR UNDERSTANDING
BETWEEN YOU AND FCW THAT ARE NOT SET FORTH IN WRITING IN THIS NOTE, THE AGREEMENT OR OTHER LOAN
DOCUMENTS EVIDENCING THE COMMITMENT.
| CALAVO GROWERS, INC. | ||||||
| By | /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ | |||||
| ▇▇▇▇▇▇ ▇ . ▇▇▇▇▇, | ||||||
| Chief Operating Officer, Chief Financial | ||||||
| Officer & Corporate Secretary | ||||||
| By | /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇ | |||||
| ▇▇▇▇▇ ▇ . ▇▇▇▇▇, Treaure | ||||||
INDORSEMENT
– The within Note is hereby indorsed by the payee named in the body of said Note
as if the name of the payee were actually executed under the indorsement.
PAY TO THE ORDER OF U.S. AgBANK, FCB, Wichita, Kansas