TERM REVOLVING CREDIT AGREEMENT
Exhibit 10.2
Loan
No. 3789055-101
THIS TERM REVOLVING CREDIT AGREEMENT (“Agreement”) is entered into as of April 9, 2008, 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 $30,000,000.00 (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 June 7, 2007, in the principal amount of $20,000,000.00. 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:
(1) 7-Day LIBOR Index Rate. At a rate (rounded upward to the nearest l/l00th% 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
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regulation) per annum equal at all times to 125 basis points (1.25%) 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 125 basis
points (1.25%). 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” (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, 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.
(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
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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.
(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. 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 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:
(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.
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(2) Subsidiaries.
The Company has the following Subsidiaries: 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 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.
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(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.
(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
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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 l5(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), 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 $10,000,000.00 and all
extensions, renewals, and refinancing thereof; (v) 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 (vi) capitalized leases existing on the date hereof existing
from time to time.
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(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:
(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
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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.
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 l5(G)(2), and l5(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 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
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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 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 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).
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(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 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.
| Calavo Growers, Inc. | ||
| AGREEMENT NO. 3789055-101 | Page 12 |
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, Xxxxx X
|
Attn: Vice President-Finance | |
Xxxxxxx, XX 00000-0000
|
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
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 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
| Calavo Growers, Inc. AGREEMENT NO. 3789055-101 |
Page 13 |
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/ Xxxxx X. Xxxxxx
|
By: | /s/ Xxxxxx X. Xxxxx
|
|||||||
| Title: Sr. Vice President | Title: Chief Operating Officer, Chief Financial Officer & Corporate Secretary |
|||||||||
| By: | /s/ Xxxxx X. Xxxxx
|
|||||||||
| Title Treasurer | ||||||||||
EXHIBIT A
PROMISSORY NOTE
PROMISSORY NOTE
| $30,000,000.00 | April 9, 2008 |
FOR VALUE RECEIVED, on the Maturity Date as set forth in that certain Term Revolving Credit
Agreement dated April 9, 2008, 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 THIRTY MILLION DOLLARS
($30,000,000.00). 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 June 7, 2007, in the
principal amount of $20,000,000.00. Furthermore, this note also evidences an additional loan
advance(s) to the extent the note exceeds the renewed unpaid balance(s) last referred to above.
Repayment Terms: The undersigned shall pay to Payee, for Account 101, Forty-five (45) monthly
interest only payments, in the amount billed, beginning on May 01, 2008; and One (1) installment of
interest in the amount billed plus principal of any amount necessary to pay the Account 101 in full
on February 1, 2012; and for Account 102, Two (2) monthly interest only payments, in the amount
billed, beginning on May 01, 2008; and One (1) installment of interest in the amount billed plus
principal of any amount necessary to pay Account 102 in full on July 1, 2008; and for Account 103,
Fourteen (14) monthly interest only payments in the amount billed, beginning on May 1, 2008; and
One (1) installment of interest in the amount billed plus principal of any amount necessary to pay
the Account 103 in full on July 1, 2009; and for Account 104, Twenty-six (26) monthly interest only
payments in the amount billed, beginning on May 1, 2008; and One (1) installment of interest in the
amount billed plus principal of any amount necessary to pay the Account 104 in full on July 1,
2010; and for Account 105, Thirty-eight monthly (38) interest only payments, in the amount billed,
beginning on May 1, 2008; and One (1) installment of interest in the amount billed plus principal
of any amount necessary to pay the Account 105 in full on July 1, 2011. 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, 2012 (“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
| Calavo Growers, Inc. Loan No. 3789055 |
Promissory Note dated February 7, 2007 Page 2 |
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/ Xxxxxx X. Xxxxx | |||
| Xxxxxx X. Xxxxx, | ||||
| Chief Operating Officer, Chief Financial Officer & Corporate Secretary |
||||
| By: | /s/ Xxxxx. H. Xxxxx | |||
| Xxxxx. X. Xxxxx, Treasurer | ||||
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. 3789055-101 |
EXHIBIT B
SERVICING AGREEMENT
April 9,2008
Pursuant to Section 9 of the Term Revolving Credit Agreement dated April 9, 2008 (“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 X. Xxxxxx
|
By: | /s/ Xxxxxx X. Xxxxx
|
|||||||
| Xxxxx X. Xxxxxx, Xx.Vice President | Xxxxxx X. Xxxxx, | |||||||||
| Chief Operating Officer, Chief Financial Officer & Corporate Secretary |
||||||||||
| By: | /s/ Xxxxx X. Xxxxx
|
|||||||||
| Xxxxx. X. Xxxxx, Treasurer | ||||||||||
| CoBank, ACB | ||||||||||
By:
|
/s/ Xx Xxxxxx | |||||||||
| Xx Xxxxxx CoBank, ACB |
||||||||||
