STANDSTILL AGREEMENT

Exhibit 10.3

This STANDSTILL AGREEMENT, dated as of June 1, 2005 (this “AGREEMENT”), is entered into by and among CALAVO GROWERS, INC., a California corporation (“CALAVO”), LIMONEIRA COMPANY, a Delaware corporation (“LIMONEIRA”), and the other parties who are signatories below (“LIMONEIRA AFFILIATIES”). Limoneira and the Limoneira Affiliates are sometimes referred to herein individually as an “INVESTOR” and collectively, as the “INVESTORS”.

WHEREAS, Calavo and Limoneira have entered into a Stock Purchase Agreement, dated June 1, 2005 (the “STOCK PURCHASE AGREEMENT”);

WHEREAS, as a condition to the consummation of the transactions provided for in the Stock Purchase Agreement, Calavo desires that the Investors make certain representations, warranties, covenants and agreements as set forth in this Agreement.

NOW THEREFORE, in consideration of the mutual covenants and agreements contained herein and in the Stock Purchase Agreement and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree as follows:

1. Definitions. Capitalized terms used herein but not otherwise defined herein shall have the meaning ascribed thereto in the Stock Purchase Agreement.

2. Representations and Warranties of Each Investor. To induce Calavo to enter into this Agreement and the Stock Purchase Agreement and to consummate the transactions contemplated hereby and thereby, each Investor

represents and warrants (as to himself or itself only and not with respect to any other Investor) to Calavo as follows:

2.1 Binding Agreement. The execution, delivery and performance of this Agreement by such Investor and the consummation by such Investor of the transactions contemplated hereby have been duly and validly authorized by all necessary corporate or partnership action (if applicable) on the part of such Investor. This Agreement has been duly executed and delivered by such Investor, and, assuming the valid authorization, execution and delivery hereof by Calavo, is a valid and binding obligation of such Investor, enforceable against such Investor in accordance with its terms, except as such enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium, and other similar laws affecting or relating to the enforcement of creditors’ rights generally and by general principles of equity (whether applied in a proceeding at law or in equity.)

2.2 Execution; No Violations. The execution and delivery of this Agreement by such Investor does not, and the consummation by such Investor of the transaction contemplated hereby will not: (a) violate or conflict with any organizational documents of such Investor (if applicable) or any agreement, order, injunction, decree, or judgment to which such Investor is a party or by which such Investor is bound; or (b) violate any law, rule or regulation applicable to such Investor.

2.3 Governmental and Other Consents. No consent, approval or authorization of, or designation, registration, declaration or filing with, any governmental entity or third Person is required on the part of such Investor in connection with the execution or delivery of this Agreement or the consummation by it of the transactions contemplated hereby.

2.4 Share Ownership. Limoneira does not own directly or indirectly any voting securities of Calavo, or any securities convertible into or exchangeable or exercisable for any voting securities of Calavo, or which, upon redemption thereof could result in Limoneira or any of its Affiliates receiving any voting securities of Calavo, or options, warrants, contractual rights or other rights of any kind to acquire or vote any voting securities of Calavo (collectively, the “VOTING SECURITIES”), except those securities acquired pursuant to the Stock Purchase Agreement (the “CALAVO SHARES”).

3. Standstill Arrangements.

3.1 Acquisition of Additional Voting Securities. Limoneira hereby covenants and agrees that prior to the Termination Date (as hereinafter defined), neither it nor any of its Subsidiaries will, without the prior approval of the Board of Directors of Calavo, directly or indirectly, purchase or otherwise acquire (other than pursuant to a stock split or stock dividend) or make any proposal, other than a confidential proposal to the Board of Directors of Calavo, to or agree to acquire, or become or agree to become the beneficial owner of, more than 12.6% of the outstanding Voting Securities, other than (i) the Calavo Shares or (ii) any Voting Securities issued as dividends on or otherwise issued in exchange or in consideration of or with respect to the Calavo Shares (the “DIVIDEND SHARES”) or shares issued as dividends on the Dividend Shares or in exchange for or in respect of the Dividend Shares.

3.2 Prohibited Actions. Each Investor hereby agrees (as to himself or itself only and not with respect to any other Investor) that, prior to the Termination Date, such Investor will not, without the prior approval of the Board of Directors of Calavo, directly or indirectly , solicit, request, advise, assist or encourage others to, take any of the following actions:

(a) form, join in or in any other way participate in a “partnership, limited partnership, syndicate or other group” within the meaning of Section 13(d)(3) of the Exchange Act with respect to Voting Securities or deposit any Voting Securities in a voting trust or similar arrangement or subject any Voting Securities to any voting agreement or pooling arrangement, other than with one or more Affiliates of such Investor with respect to the Calavo Shares;

(b) solicit proxies or written consents of stockholders with respect to Voting Securities under any circumstances, or make, or in any way participate in, any “solicitation” of any “proxy” to vote any Voting Securities (other than a solicitation conducted by Calavo), or become a “participant” in any election contest with respect to Calavo (as such terms are defined or used in Rule 14a-1 under the Exchange Act) other than an election contest related to election of members of the Board of Directors elected solely by the holders of the Calavo Shares;

(c) seek to call, or request the call of, a special meeting of the stockholders of Calavo unless first presented to the Calavo Board of Directors or seek to make, or make, a stockholder proposal at any meeting of the stockholders of Calavo that has not first been presented to the Calavo Board of Directors;

(d) commence, or announce any intention to commence, any tender offer for any Voting Securities;

(e) make, announce any intention or desire to make, or facilitate the making of, any proposal (other than a confidential proposal to Calavo) or bid with respect to the acquisition of any substantial portion of the assets of Calavo or of the assets or stock of any of its subsidiaries or of all or any portion of the outstanding Voting Securities, or recapitalization or liquidation involving Calavo or any of its subsidiaries;

(f) knowingly arrange, or in any way knowingly participate in, any financing for any transaction referred to in clauses 3(a) through 3(e) above; or

(g) make any request, or otherwise seek (in any fashion that would require public disclosure by Calavo, such Investor or their respective Affiliates) to obtain any waiver or amendment of any provision of this Agreement or take any action restricted hereby.

4. Termination. This Agreement shall terminate with respect to a particular Investor on the date that such Investor and its Affiliates no longer own Voting Securities representing at least 5% of the outstanding Voting Securities of Calavo (the “TERMINATION DATE”).

5. Remedies. Each party hereto hereby acknowledges and agrees that irreparable harm would occur in the event any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that the parties shall be entitled to specific performance hereunder, including, without limitation, an injunction or injunctions to prevent and enjoin breaches of the provisions of this Agreement and to enforce specifically the terms and provision hereof in any state or federal court in the State of California, in addition to any other remedy to which they may be entitled at law or in equity. Any requirements of the securing or posting of any bond with such remedy are waived. All rights and remedies under this Agreement are cumulative, not exclusive, and shall be in addition to all rights and remedies available to either party at law or in equity. No party hereto shall be responsible for a breach by another party if the non-breaching party does not participate in the breach.

6. Jurisdiction; Venue. The parties hereto hereby irrevocably and unconditionally consent to and submit to the jurisdiction of the courts of the State of California and of the United States of America located in the State of California for any actions, suits or proceedings arising out of or relating to this Agreement or the transactions contemplated hereby, and further agree that service of any process, summons, notice or document by U.S. certified mail to the respective

addresses set forth in Section 10 hereof shall be effective service of process for any such action, suit or proceeding brought against any party in any such court. The parties irrevocably and unconditionally waive any objection to the laying of venue of any action, suit or proceeding arising out of this Agreement, or the transactions contemplated hereby, in the courts of the State of California of the United States of America located in the State of California, and hereby further irrevocably and unconditionally waive and agree not to plead or claim in any such court that any such action, suit or proceeding brought in any such court has been brought in any inconvenient forum.

7. Entire Agreement. This Agreement contains the entire understanding of the parties with respect to the subject matter hereof and may be amended only by an agreement in writing executed by the parties hereto.

8. Headings. Descriptive headings are for convenience only and shall not control of affect the meaning or construction of any provision of this Agreement.

9. Number; Gender. Whenever the singular number is used herein, the same shall include the plural where appropriate, and words or any gender shall include each other gender where appropriate.

10. Notices. All notices, consents, requests, instructions, approvals and other communications provided for herein and all legal process in regard hereto shall be validly given, made or served, if in writing and sent by U.S. certified mail, return receipt requested:


		if to Limoneira:		Limoneira Company
				0000 Xxxxxxxx Xxxx
				Xxxxx Xxxxx, XX 00000
				Attention: Xxxxxx X. Xxxxxxx, CEO

		with a copy to:		Xxxxxxxx X. Xxxxxxxx, Esq.


				Walker, Wright, Tyler & Xxxx
				000 Xxxxxxxx Xxxx., Xxxxx 000
				Xxx Xxxxxxx, XX 00000

		if to Calavo:		Calavo Growers, Inc.
				0000 X Xxxxxxxx Xxxx
				Xxxxx Xxxxx, XX 00000
				Attention: Xxxxx X. Xxxx, Chairman

		with a copy to:		Xxxx X. Xxxxx, Esq.
				Xxxx & Xxxxx, APC
				0000 Xxxxxxx Xxxx Xxxx
				Xxxxx 0000
				Xxx Xxxxxxx, XX 00000

11. Enforceability. If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions of this Agreement shall remain in full force and effect and shall in no way be affected, impaired or invalidated. It is hereby stipulated and declared to be the intention of the parties that the parties would have executed the remaining terms, provisions, covenants and restrictions without including any of such which may be hereafter declared invalid, void or unenforceable. In addition, the parties agree to use their best efforts to agree upon and substitute a valid and enforceable term, provision, covenant or restriction for any of such that is held invalid, void or unenforceable by a court of competent jurisdiction.

12. Law Governing. This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of California without regard to any conflict of laws provisions thereof.

13. Binding Effect; No Assignment. This Agreement shall be binding upon and inure to the benefit of and be enforceable by the successors and assigns of the parties hereto. Nothing in this Agreement, expressed or implied, is intended to confer on any Person other than the parties hereto, or their respective heirs, successors, executors, administrators and assigns any rights,

remedies, obligations or liabilities under or by reason of this Agreement. No party to this Agreement may assign its rights or delegate its obligations hereunder (whether voluntarily, involuntarily, or by operation of law) without the prior written consent of the other parties. Any such attempted assignment shall be null and void.

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

15. Section Headings. The headings contained in this Agreement are for reference purposes only and will not affect in any way the meaning or interpretation of this Agreement.

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


Calavo:	CALAVO GROWERS, INC.

	By:	/s/ Xxxxx X. Xxxx

		Name: Xxxxx X. Xxxx
		Title: Chairman, President and CEO

Limoneira:	LIMONEIRA COMPANY

	By:	/s/ Xxxxxx X. Xxxxxxx

		Name: Xxxxxx X. Xxxxxxx
		Title: President and CEO

Limoneira Affiliates:		/s/ Xxxxxx X. Xxxxxxx

		Name: Xxxxxx X. Xxxxxxx

		/s/ Xxxx X. Xxxxxx

		Name: Xxxx X. Xxxxxx


				/s/ G. Xxxxxx Xxxxxxx

				Name: G. Xxxxxx Xxxxxxx

				/s/ Xxx X. Xxxxxxxxx

				Name: Xxx X. Xxxxxxxxx

				/s/ Xxxxx X. Xxxxxxxxx

				Name: Xxxxx X. Xxxxxxxxx

				/s/ Xxxx X. Xxxxxxxxx

				Name: Xxxx X. Xxxxxxxxx

				/s/ Xxxxxx X. Xxxxxxx

				Name: Xxxxxx X. Xxxxxxx

				/s/ Xxxxxx X. Xxxxxx

				Name: Xxxxxx X. Xxxxxx

				/s/ Xxxxxx X. Xxxxxxx

				Name: Xxxxxx X. Xxxxxxx

				/s/ Xxxxxx X. Xxxxxxx

				Name: Xxxxxx X. Xxxxxxx

				/s/ Xxxxxx X. Xxxxxxxxx

				Name: Xxxxxx X. Xxxxxxxxx

				/s/ Xxxx X. Xxxxxx

				Name: Xxxx X. Xxxxxx

				/s/ Xxxx X.X. Xxxxxxxx

				Name: Xxxx X.X. Xxxxxxxx

				/s/ Xxxx X. Xxxxxxxxx

				Name: Xxxx X. Xxxxxxxxx

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STANDSTILL AGREEMENT

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