TERM LOAN AGREEMENT
Exhibit 10.2
Loan No. 3788881-101 & 201
THIS TERM LOAN AGREEMENT (“Term Agreement”) is entered into as of May 31, 0000, xxxxxxx XXXX
XXXXXX XXXX, XXX, Xxxxxxx, Xxxxxxxxxx (“FCW”) and CALAVO GROWERS, INC., Santa Paula, California
(the “Company”). This Term Agreement replaces in its entirety that certain Term Loan Agreement
dated July 1, 2005, and any amendments thereto.
SECTION 1. The Credit Facility. On the terms and conditions set forth in this Term Agreement,
FCW agrees to make advances to the Company during the period set forth below in an aggregate
principal amount not to exceed $21,500,000.00 (the “Commitment”). The Commitment is evidenced by
the following documents: a Note dated July 1, 2005, in the original amount of $13,000,000.00
(“Account 101”), which shall henceforth be governed by this Term Agreement; and a Note dated May
31, 2011, in the original amount of $15,000,000.00 (“Account 201”). The parties acknowledge that
Account 101 has been fully advanced, and no additional advances are available under Account 101.
Amounts repaid under the Commitment may not be readvanced.
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 was to finance the purchase of stock in
Limoneira Company and new money to purchase GH Family entities.
SECTION 4. Term. The term of the Commitment shall be from the date hereof, up to and
including July 1, 2015 for Account 101 and June 1, 2016 for Account 201.
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 options:
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(1) 30-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 150 basis points (1.50%) 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 Xxx Xxxx Xxxx xxx Xxxxxx, Xxxxxxx; (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
150 basis points (1.50%). Under this option: (1) rates may be fixed for “Interest Periods” (as
hereinafter defined) of 1, 2, 3, 6, 9, 12, 24, 36 or 48 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 for banks subject to FRB Regulation D 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, 12, 24, 36 or 48 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 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.
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(3) Fixed Rate. At a fixed rate per annum to be quoted by FCW and CoBank in its sole
discretion in each instance. Under this option, rates may be fixed on such balances and for such
periods, as may be agreeable to FCW and CoBank in its sole discretion in each instance, provided
that: (1) the minimum fixed period shall be 1 years; (2) amounts may be fixed in increments of
$100,000.00 or multiples thereof; and (3) the maximum number of fixes in place at any one time
shall be 10.
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
variable rate option to one of the fixed rate options. Upon the expiration of any fixed rate
period, interest shall automatically accrue at the variable 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 CoBank shall require
in a written notice to the Company.
SECTION 7. Repayment and Maturity. The unpaid principal balance of the Commitment shall
mature and be due and payable on July 1, 2015 for Account 101, and on June 1, 2016 for Account 201
(the “Maturity Date” for Account 101 and Account 201 respectively).
SECTION 8. Promissory Note. The Company’s obligation to repay the Commitment shall be
evidenced by the promissory notes referenced in Section 1 above, the latter of which is in the
form attached hereto as Exhibit A (collectively, the “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. 000000000 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 XxXxxx, Xxxxxxxxxx 000, Xxxxxx, Xxxxxxxx
00000-0000 (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 the check all as set forth in the Servicing
Agreement between Borrower, FCW, and CoBank in form attached hereto as Exhibit B.
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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 Term 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 Term 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) Term Agreement. A duly executed copy of this Term 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 Term Agreement and the Note have been duly authorized
and executed.
(C) Fees and Other Charges. Loan Fee in the amount of $20,000.00 is due at the time of loan
closing.
(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 Term
Agreement:
(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 Term Agreement, and no Event of
Default or Potential Default exists hereunder.
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(2) Subsidiaries. The Company has the following Subsidiaries: Calavo de Mexico S.A. de
C.V.; Calavo Foods de Mexico S.A. de C.V.; Maui Fresh International, Inc,; Calavo Inversiones
Limitada; Hawaiian Sweet, Inc,; Hawaiian Pride, LLC and newly acquired Renaissance Food Group
(RFG), LLC. 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 Term 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
Term 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 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
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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 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.
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(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 Term Agreement is in effect, the Company will not and
its Subsidiaries 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),
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 $20,000,000.00 and all extensions, renewals, and refinancings thereof; (v)
letters of credit issued by any bank for the account of the Company in an aggregate face amount
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not to exceed $5,000,000.00 at any one time outstanding; and (vi) 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 Term
Agreement is in effect:
(A) Tangible Net Worth. The Company will maintain, on a consolidated basis, a minimum
“Tangible Net Worth” equal to at least Sixty-Four Million Dollars ($64,000,000.00), 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
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Liabilities” means liabilities subordinated to the Borrower’s obligations to FCW in a manner
acceptable to FCW in its sole discretion.
(B) EBITDA. The Company will maintain a Funded Debt to “EBITDA” of at least 3.00:1“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.
SECTION 18. Events of Default. Each of the following shall constitute an “Event of Default”
under this Term 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 Term 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.
(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
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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. Material Adverse
Change means any event, occurrence or circumstance that has a material negative effect on (i) the
business, operations, property, financial condition or prospects of the Company, or (ii) the
validity or enforcement of any of the Loan Documents or the rights or remedies of the Lenders
hereunder, or (iii) the ability of the Company to perform its obligations under any of the Loan
Documents.
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 Term 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 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 Term 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
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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).
SECTION 21. Complete Agreement, Amendments. This Term 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 Term 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”.
| Calavo Growers, Inc. AGREEMENT NO. 3789055-101 & 201 |
Page 12 |
SECTION 22. Applicable Law. Except to the extent governed by applicable federal law,
this Term 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. | |
0000 X. Xxxx Xxxxxx |
Attn: Chief Financial Officer | |
Xxxxxxx, XX
00000 |
0000-X Xxxxxxxx Xxxx | |
| Xxxxx Xxxxx, XX 00000 | ||
Attention: Xxxxx X. Xxxxxx |
Fax No: (000) 000-0000 | |
Fax No.: 000-000-0000 |
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
Term 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 Term Agreement or any other Loan Document.
SECTION 25. Effectiveness and Severability. This Term Agreement shall continue in effect
until: (i) all indebtedness and obligations of the Company under this Term 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 Term Agreement
or any other Loan Document which is prohibited or unenforceable in any jurisdiction shall, as to
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 Term 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 Term 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 Term Agreement. However, no such
| Calavo Growers, Inc. AGREEMENT NO. 3789055-101 & 201 |
Page 13 |
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 Term 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/ Xxxxx Xxxxxx | By: | /s/ Xxxxxx Xxxxx | |||
| Xxxxx X. Xxxxxx | Xxxxxx X. Xxxxx, | |||||
| Title: | Sr. Vice President | Title: | Chief Operating Officer, Chief | |||
| Financial Officer & Corporate Secretary | ||||||
| By: | /s/ Xxxxx Xxxxxx | |||||
| Xxxxx Xxxxxx, | ||||||
| Title Corporate Controller | ||||||
| Calavo Growers, Inc. | Agreement No. 3788881-201 |
EXHIBIT A
PROMISSORY NOTE
| $15,000,000.00 | May 31, 2011 |
FOR VALUE RECEIVED, on the Maturity Date as set forth in that certain Term Loan Agreement
dated May 31, 2011, or in any amendments thereto (the “Term 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 FIFTEEN MILLION DOLLARS
($15,000,000.00). 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.
Repayment Terms: The undersigned shall pay to Payee, Sixty (60) monthly principal and
interest payments, in the amount billed, beginning on July 01, 2011 and on June 1, 2016, any amount
necessary to pay the Account 201 in full on June 1, 2016. Payments, other than those required as
specified in this Section or in the Term 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 June 1, 2016 (“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 Term 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
| Calavo Growers, Inc. | Agreement No. 3788881-201 Page 2 |
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 TERM AGREEMENT OR OTHER LOAN DOCUMENTS
EVIDENCING THE COMMITMENT.
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
| Calavo Growers, Inc. | Agreement No. 3788881-101 & 201 |
EXHIBIT
B
SERVICING AGREEMENT
May 31, 2011
Pursuant to Section 9 of the Term Loan Agreement dated May 31, 2011 (“Term Agreement”)
between Farm Credit West, PCA and CALAVO GROWERS, Inc., a California Corporation, the
undersigns acknowledges and confirms the agreement to have CoBank, ACB perform the
services as described below:
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 Calavo Growers (“Company”) and CoBank. Wire transfers shall be made to ABA No. 000000000 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 XxXxxx, Xxxxxxxxxx 000, Xxxxxx, Xxxxxxxx 00000-0000
(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 the check.
| Farm Credit West, PCA | CALAVO GROWERS, INC. | |||||
| By: | /s/ Xxxxx Xxxxxx | By: | /s/ Art Xxxxx | |||
| Xxxxx X. Xxxxxx, Xx. Vice President | ||||||
| By: | /s/ Xxxxx Xxxxxx | |||||
| CoBank, ACB | ||||||
| By: | /s/ Xxxxx Xxxxx | |||||
