<SEC-DOCUMENT>0001193125-12-454567.txt : 20121106
<SEC-HEADER>0001193125-12-454567.hdr.sgml : 20121106
<ACCEPTANCE-DATETIME>20121106162158
ACCESSION NUMBER:		0001193125-12-454567
CONFORMED SUBMISSION TYPE:	8-K
PUBLIC DOCUMENT COUNT:		6
CONFORMED PERIOD OF REPORT:	20121031
ITEM INFORMATION:		Entry into a Material Definitive Agreement
ITEM INFORMATION:		Completion of Acquisition or Disposition of Assets
ITEM INFORMATION:		Financial Statements and Exhibits
FILED AS OF DATE:		20121106
DATE AS OF CHANGE:		20121106

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			CALAVO GROWERS INC
		CENTRAL INDEX KEY:			0001133470
		STANDARD INDUSTRIAL CLASSIFICATION:	AGRICULTURE SERVICES [0700]
		IRS NUMBER:				330945304
		STATE OF INCORPORATION:			CA
		FISCAL YEAR END:			1031

	FILING VALUES:
		FORM TYPE:		8-K
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	000-33385
		FILM NUMBER:		121183497

	BUSINESS ADDRESS:	
		STREET 1:		2530 RED HILL AVE.
		CITY:			SANTA ANA
		STATE:			CA
		ZIP:			92705
		BUSINESS PHONE:		9098334200
</SEC-HEADER>
<DOCUMENT>
<TYPE>8-K
<SEQUENCE>1
<FILENAME>d435941d8k.htm
<DESCRIPTION>FORM 8-K
<TEXT>
<HTML><HEAD>
<TITLE>Form 8-K</TITLE>
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 <P STYLE="line-height:0px;margin-top:0px;margin-bottom:0px;border-bottom:0.5pt solid #000000">&nbsp;</P>
<P STYLE="line-height:3px;margin-top:0px;margin-bottom:2px;border-bottom:0.5pt solid #000000">&nbsp;</P> <P STYLE="margin-top:4px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="5"><B>UNITED STATES </B></FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="5"><B>SECURITIES AND EXCHANGE COMMISSION </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT
STYLE="font-family:Times New Roman" SIZE="3"><B>WASHINGTON, D.C. 20549 </B></FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P><center>
<P STYLE="line-height:6px;margin-top:0px;margin-bottom:2px;border-bottom:1pt solid #000000;width:21%">&nbsp;</P></center> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="5"><B>FORM 8-K
</B></FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P><center> <P STYLE="line-height:6px;margin-top:0px;margin-bottom:2px;border-bottom:1pt solid #000000;width:21%">&nbsp;</P></center>
<P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="4"><B>CURRENT REPORT </B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT
STYLE="font-family:Times New Roman" SIZE="3"><B>PURSUANT TO SECTION 13 OR 15(d) OF THE </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="3"><B>SECURITIES EXCHANGE ACT OF 1934
</B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="3"><B>Date of report: November&nbsp;6, 2012 </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT
STYLE="font-family:Times New Roman" SIZE="3"><B>Date of earliest event reported: October&nbsp;31, 2012 </B></FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P><center>
<P STYLE="line-height:6px;margin-top:0px;margin-bottom:2px;border-bottom:1pt solid #000000;width:21%">&nbsp;</P></center> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="6"><B>CALAVO
GROWERS, INC. </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>(Exact Name of Registrant as Specified in Charter) </B></FONT></P>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P><center> <P STYLE="line-height:6px;margin-top:0px;margin-bottom:2px;border-bottom:1pt solid #000000;width:21%">&nbsp;</P></center>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TD VALIGN="top" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>California</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>000-33385</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>33-0945304</B></FONT></TD></TR>
<TR>
<TD VALIGN="top" ALIGN="center"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>(State or Other Jurisdiction</B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:1px" ALIGN="center"><FONT
STYLE="font-family:Times New Roman" SIZE="1"><B>of Incorporation)</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top" ALIGN="center"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>(Commission</B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:1px" ALIGN="center"><FONT
STYLE="font-family:Times New Roman" SIZE="1"><B>File Number)</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top" ALIGN="center"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>(IRS Employer</B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:1px" ALIGN="center"><FONT
STYLE="font-family:Times New Roman" SIZE="1"><B>Identification No.)</B></FONT></P></TD></TR></TABLE> <P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><B>1141-A Cummings Road, Santa Paula, California 93060 </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>(Address of
Principal Executive Offices) (Zip Code) </B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>(Former Name or Former Address, if Changed Since Last Report) </B></FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Registrant&#146;s telephone number, including area code: (805)&nbsp;525-1245 </B></FONT></P>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P><center> <P STYLE="line-height:6px;margin-top:0px;margin-bottom:2px;border-bottom:1pt solid #000000;width:21%">&nbsp;</P></center> <P STYLE="margin-top:6px;margin-bottom:0px"><FONT
STYLE="font-family:Times New Roman" SIZE="2">Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: </FONT></P>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2"><FONT STYLE="FONT-FAMILY:WINGDINGS">&#168;</FONT></FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Written communications pursuant to Rule&nbsp;425 under the Securities Act (17 CFR 230.425) </FONT></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2"><FONT STYLE="FONT-FAMILY:WINGDINGS">&#168;</FONT></FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Soliciting material pursuant to Rule&nbsp;14a-12 under the Exchange Act (17 CFR 240.14a-12) </FONT></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2"><FONT STYLE="FONT-FAMILY:WINGDINGS">&#168;</FONT></FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Pre-commencement communications pursuant to Rule&nbsp;14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) </FONT></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2"><FONT STYLE="FONT-FAMILY:WINGDINGS">&#168;</FONT></FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Pre-commencement communications pursuant to Rule&nbsp;13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) </FONT></TD></TR></TABLE>
<P STYLE="font-size:8px;margin-top:0px;margin-bottom:0px">&nbsp;</P> <P STYLE="line-height:0px;margin-top:0px;margin-bottom:0px;border-bottom:0.5pt solid #000000">&nbsp;</P>
<P STYLE="line-height:3px;margin-top:0px;margin-bottom:2px;border-bottom:0.5pt solid #000000">&nbsp;</P>

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 <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Item&nbsp;1.01 Entry into a Material Definitive Agreement </B></FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Item&nbsp;2.01 Completion of Acquisition or Disposition of Assets </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">On October&nbsp;31, 2012, Calavo Growers, Inc. a California corporation (&#147;Calavo,&#148; &#147;our,&#148; or &#147;the Company&#148;), entered into a Sale of LLC Interest Agreement (the &#147;Sale
Agreement&#148;) with San Rafael Distributing, Inc., an Arizona corporation (&#147;San Rafael&#148;), pursuant to which the Company has agreed to sell to San Rafael all of our interest, representing one-half ownership, in Maui Fresh International,
LLC, a California limited liability company (&#147;Maui&#148;) for $2.6 million. This transaction resulted in a gain on sale of approximately $0.6 million. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">Since 2006, Calavo and San Rafael both had a 50% interest in the joint venture of Maui for the purpose of the marketing, sale and distribution of fresh produce from the Los Angeles Wholesale Produce
Market. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Pursuant to the Sale of LLC Interest Agreement, San Rafael made an initial down payment of $0.3 million on
October&nbsp;31, 2012. Concurrently, San Rafeal also entered into two promissory notes, the &#147;Equity Promissory Note&#148; and the &#147;Goodwill Promissory Note.&#148; The equity promissory note of $1.0 million and the goodwill promissory note
of $1.3 million have been secured by a pledge by San Rafael&#146;s entire ownership interest on Maui and were guaranteed by Francisco Clouthier (owner of San Rafael). </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">The Equity Promissory Note, totaling approximately $1.0 million, will be paid in 36 equal monthly principal payments of $27,542 together with interest accrued, as defined, on the unpaid principal balance.
The entire amount of principal and all accrued unpaid interest shall be due and payable on November&nbsp;1, 2015. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">The
Goodwill Promissory Note, totaling $1.3 million, is due and payable in full on November&nbsp;1, 2017. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Item&nbsp;9.01 Financial Statements
and Exhibits. </B></FONT></P> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TD VALIGN="top" NOWRAP><FONT STYLE="font-family:Times New Roman" SIZE="2">10.1</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Sale of LLC Interest Agreement dated October&nbsp;31, 2012 between Calavo Growers, Inc. and San Rafael Distributing, Inc.</FONT></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD></TR>
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<TD VALIGN="top" NOWRAP><FONT STYLE="font-family:Times New Roman" SIZE="2">10.2</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Equity Secured Promissory Note dated October 31, 2012 between Calavo Growers, Inc. and San Rafael Distributing, Inc.</FONT></TD></TR>
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<TD HEIGHT="8" COLSPAN="2"></TD></TR>
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<TD VALIGN="top" NOWRAP><FONT STYLE="font-family:Times New Roman" SIZE="2">10.3</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Goodwill Secured Promissory Note dated October 31, 2012 between Calavo Growers, Inc. and San Rafael Distributing, Inc.</FONT></TD></TR>
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<TD HEIGHT="8" COLSPAN="2"></TD></TR>
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<TD VALIGN="top" NOWRAP><FONT STYLE="font-family:Times New Roman" SIZE="2">10.4</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Pledge and Security Agreement dated October 31, 2012 between Calavo Growers, Inc. and San Rafael Distributing, Inc.</FONT></TD></TR>
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<TD VALIGN="top" NOWRAP><FONT STYLE="font-family:Times New Roman" SIZE="2">10.5</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Personal Guaranty dated October 31, 2012 between Calavo Growers, Inc. and Francisco Clouthier.</FONT></TD></TR>
</TABLE>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">2 </FONT></P>


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 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>SIGNATURE </B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. </FONT></P>
<P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TD VALIGN="bottom" COLSPAN="3"><FONT STYLE="font-family:Times New Roman" SIZE="2">Calavo Growers, Inc.</FONT></TD></TR>


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<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">November&nbsp;6, 2012</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
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<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">By:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:1px;border-bottom:1px solid #000000"><FONT STYLE="font-family:Times New Roman" SIZE="2">/s/ Lecil E. Cole</FONT></P></TD></TR>
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<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">Lecil E. Cole</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">Chairman of
the Board of Directors, Chief Executive Officer and President</FONT></P> <P STYLE="margin-top:0px;margin-bottom:1px"><FONT STYLE="font-family:Times New Roman" SIZE="2">(Principal Executive Officer)</FONT></P></TD></TR>
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 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">3 </FONT></P>

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<DOCUMENT>
<TYPE>EX-10.1
<SEQUENCE>2
<FILENAME>d435941dex101.htm
<DESCRIPTION>SALE OF LLC INTEREST AGREEMENT
<TEXT>
<HTML><HEAD>
<TITLE>Sale of LLC Interest Agreement</TITLE>
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 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Exhibit 10.1 </B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><B>SALE OF LLC INTEREST AGREEMENT </B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">THIS SALE OF LLC INTEREST AGREEMENT (this
&#147;<B>Agreement</B>&#148;) is dated as of October&nbsp;31, 2012 (the &#147;<B>Effective Date</B>&#148;), and is made and entered into by and between San Rafael Distributing, Inc., an Arizona corporation (&#147;<B>Buyer</B>&#148;) and Calavo
Growers, Inc., a California corporation (&#147;<B>Seller</B>&#148;), in connection with Seller&#146;s sale of all of its interest in Maui Fresh International, LLC, a California limited liability company (the &#147;<B>Company</B>&#148;) to Buyer, the
other member of the Company. </FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
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<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">A.</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Seller is the beneficial and record owner of 50% of the membership interests in the Company, and Buyer is the beneficial and record owner of the remaining 50% of the
membership interests in the Company. </FONT></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
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<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">B.</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Seller desires to sell to Buyer and Buyer desires to purchase from Seller all of Seller&#146;s membership interest in the Company (the &#147;<B>Seller&#146;s
Interest</B>&#148;) on the terms and conditions set forth in this Agreement. </FONT></TD></TR></TABLE> <P STYLE="margin-top:12px;margin-bottom:0px; margin-left:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Therefore, Buyer and Seller agree
as follows: </FONT></P> <P STYLE="margin-top:24px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>ARTICLE I </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><B><U>SALE AND PURCHASE </U></B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">1.1 <B><U>Sale and Purchase of Seller&#146;s
Interest</U>.</B> On the Effective Date, Seller shall sell, assign, and transfer to Buyer all of the Seller&#146;s Interest in the Company, and Buyer shall purchase, acquire, and accept the Seller&#146;s Interest from Seller, all upon the terms and
conditions set forth in this Agreement. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">1.2 <B><U>Purchase Price</U>. </B>The purchase price for the Seller&#146;s Interest
is Two Million, Six Hundred Twenty-Nine Thousand, Two Hundred Fourteen Dollars ($2,629,214) (the &#147;<B>Purchase Price</B>&#148;). </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">1.3 <B><U>Payment of the Purchase Price.</U></B> </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2">1.3.1 <B><U>Down
Payment.</U></B> On the Effective Date, Seller shall deliver to Buyer, by wire transfer, a down payment for Seller&#146;s Equity Payment in the amount of Three Hundred Thousand Dollars ($300,000) (&#147;<B>Down Payment</B>&#148;). </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2">1.3.2 <B><U>Equity Promissory Note.</U></B> On the Effective Date, Seller shall deliver to Buyer a Secured Promissory Note in the form of
that attached hereto as Exhibit &#147;A&#148; (the &#147;<B>Equity Promissory Note</B>&#148;) in the amount of Nine Hundred Ninety-One Thousand, Five Hundred Twenty Dollars ($991,520). The Equity Promissory Note shall be secured by a pledge of
Buyer&#146;s entire ownership interest in the Company, which pledge agreement shall be in the form of that attached hereto as Exhibit &#147;B&#148; (the &#147;<B>Pledge Agreement</B>&#148;), and shall be guaranteed by Francisco Clouthier in the form
of that attached hereto as Exhibit &#147;C&#148; (the &#147;<B>Guaranty</B>&#148;). Buyer shall also deliver to Seller a signed UCC-1 Statement, suitable for filing in the State of California. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2">1.3.3 <B><U>Goodwill Promissory Note.</U></B> On the Effective Date, Seller shall deliver to Buyer a Secured Promissory Note in the form
of that attached hereto as Exhibit &#147;D&#148; (the </FONT></P>

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&#147;<B>Goodwill Promissory Note</B>&#148;) in the amount of One Million, Three Hundred Thirty-Seven Thousand, Six Hundred Ninety-Four Dollars ($1,337,694). The Goodwill Promissory Note shall
also be secured by the Pledge Agreement and guaranteed by the Guaranty. </FONT></P> <P STYLE="margin-top:24px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>ARTICLE II </B></FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><U>REPRESENTATIONS, WARRANTIES AND COVENANTS OF SELLER </U></B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">Seller hereby represents and warrants to Buyer, and covenants with Buyer, as follows: </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">2.1 <B><U>Authority and Capacity</U>. </B>Seller is a corporation duly organized, validly existing, and in good standing under the laws of the State of California and has all requisite power, authority
and capacity to enter into this Agreement and to perform its obligations hereunder and to consummate the transactions contemplated hereby. No approval or consent of any persons other that Seller is necessary. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">2.2 <B><U>Agreement Will Not Cause Breach or Violation</U></B>. The execution, delivery and performance of this Agreement by Seller does
not and the consummation of the transaction contemplated hereby will not (a)&nbsp;conflict with any provision of Seller&#146;s charter documents; (b)&nbsp;result in a breach of or default under any other agreement to which Seller is a party or by
which it is bound; or (c)&nbsp;violate any law applicable to Seller or any judgment, order, injunction, decree or award of any court, arbitrator, administrative agency or governmental body applicable to or binding upon Seller. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">2.3 <B><U>Binding Agreement</U>. </B>This Agreement has been duly and validly executed and delivered by Seller and constitutes
Seller&#146;s valid and binding agreement, enforceable against Seller in accordance with and subject to its terms. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">2.4
<B><U>Title to Seller&#146;s Interest</U>. </B>Seller is the lawful record and beneficial owner of all of Seller&#146;s Interest, free and clear of any liens, claims, agreements, charges, security interests and encumbrances whatsoever. On the
Effective Date, the Operating Agreement of the Company showing ownership of the membership interests of the Company shall be amended to memorialize this transaction and to show that Buyer owns 100% of the membership interests in the Company, subject
to the terms of this Agreement and the Pledge Agreement. Seller shall sign such documents and provide such certificates as may be required to evidence the sale of Seller&#146;s Interest. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">2.5 <B><U>Absence of Liabilities</U></B>. To the actual knowledge of Art Bruno (&#147;<B>Bruno</B>&#148;), without duty of inquiry or
investigation, there are no material debts, liabilities or obligations of any nature, whether accrued, absolute, contingent, or otherwise, that are not reflected on the Company&#146;s balance sheet, except for a contingent liability in connection
with a dispute between the Company and its workers&#146; compensation carrier in the approximate amount of Six Thousand Dollars ($6,000) (the &#147;<B>Carrier Claim</B>&#148;). If the carrier prevails, Buyer and Seller agree to share equally in the
cost. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">2.6 <B><U>Compliance with Laws</U></B>. To the actual knowledge of Bruno, the Company has not received notice that it
is in violation of any applicable federal, state, or local statute, law, ordinance, or regulation affecting the operation of the Company&#146;s business. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">2.7 <B><U>Absence of Litigation</U></B>. To the actual knowledge of Bruno, the Company has not received notice of any pending or threatened suit, action, arbitration, or legal or administrative proceeding
or investigation affecting the Company or its business, except for the Carrier Claim. </FONT></P>

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 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>ARTICLE III </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><B><U>REPRESENTATIONS AND WARRANTIES OF BUYER </U></B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Buyer hereby represents
and warrants to Seller as follows: </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">3.1 <B><U>Authority and Capacity of Buyer; No Default of Company</U>. </B>Buyer has all
requisite power, authority and legal capacity to enter into this Agreement and to perform its obligations hereunder and to consummate the transactions contemplated hereby.<B> </B>The execution, delivery and performance of this Agreement by Buyer
does not and the consummation of the transaction contemplated hereby will not (a)&nbsp;conflict with any provision of the Buyer&#146;s charter documents; (b)&nbsp;result in a breach of or default under any other agreement to which the Buyer or the
Company is a party or by which either is bound; or (c)&nbsp;violate any law applicable to Buyer, or any judgment, order, injunction, decree or award of any court, arbitrator, administrative agency or governmental body applicable to or binding upon
Buyer. There are no restrictions on the sale, transfer, or pledge of the Company membership interests in the any contracts to which the Company is a party. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">3.2 <B><U>Binding Agreement.</U></B> This Agreement has been duly and validly executed and delivered by Buyer and constitutes Buyer&#146;s valid and binding agreement, enforceable against Buyer in
accordance with and subject to its terms. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">3.3 <B><U>Buyer&#146;s Knowledge of Company</U>.</B> Buyer has owned 50% of the
Company since the formation of the Company, and has been significantly involved in all aspects of the operations and management of the Company. Buyer is completely familiar with the business, technologies, financial condition, risks, and prospects
of the Company, and Seller has made no representation or warranty regarding the Company, its business, technologies, financial condition or prospects. Seller is selling Seller&#146;s Interest without representation, warranty, promise, or guarantee
of any kind or nature (except as set forth in Article II), and Buyer is purchasing Seller&#146;s Interest based entirely on Buyer&#146;s knowledge of the Company, and without reliance on any information or representations made or allegedly made by
Seller, its employees or agents. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">3.4 <B><U>Investment Representations</U></B>. Buyer is acquiring the Seller&#146;s Interest
for Buyer&#146;s own account and is not acquiring the Seller&#146;s Interest with a view to or for sale in connection with any distribution thereof within the meaning of the Securities Act of 1933, as amended. </FONT></P>
<P STYLE="margin-top:24px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>ARTICLE IV </B></FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>COVENANTS OF BUYER; POST-CLOSING MATTERS </B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">4.1 <B><U>Sublease.</U></B> The Company is party to a sublease for certain premises located at 1601 East Olympic Avenue, Bay 509-510, Los Angeles, California 90021, dated as of July 27, 2011, pursuant to
which Witt and Perricone are the Sublessors and Los Angeles Wholesale Produce Market, LLC is the Landlord (the &#147;<B>Sublease</B>&#148;). Buyer shall use its best efforts to have Seller released as a guarantor of the Sublease effective as of the
Effective Date; provided, however, that Buyer&#146;s obligations shall be limited to requesting that Sublessors agree to release Seller from its guaranty. Buyer shall not exercise its option to extend the term of the Sublease or otherwise extend the
term or expand the premises beyond the term and square footage leased under the Sublease as of the Effective Date or otherwise enter into any agreement or take any action that would increase or extend the obligations of Buyer under the Sublease
unless and until </FONT></P>

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Seller has been released as guarantor under the Sublease. If any notice of Buyer&#146;s purchase of Seller&#146;s Interest or any consent of Sublessors or the Landlord is required under the
Sublease (including by incorporation of the terms of the master lease), Buyer shall deliver such notice or obtain such consent. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">4.2 <B><U>Employees</U>. </B>Two employees of Seller (Paul Stanke and Susan Arenyz) will terminate their employment with Seller and Buyer
will cause those employees to be hired by the Company, effective as of the day after the Effective Date. On the Effective Date, Seller shall pay all required compensation and employee-related benefits directly to Stanke and Arenyz through the
Effective Date. In addition, Seller shall, at Seller&#146;s expense, continue to provide health insurance coverage to Stanke and Arenyz through Seller&#146;s payment of COBRA costs for a period not to exceed ninety (90)&nbsp;days following the
termination of their employment with Seller. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">4.3 <B><U>Notification of Transaction.</U></B> Seller shall make such filings
with the Securities and Exchange Commission as may be required in connection with this transaction. Buyer and Seller may make such public announcements (including, without limitation, press releases and announcements in trade and industry
publications and publications of general interest) as each deems appropriate; provided, however, that such public announcements shall be subject to review and approval by the other party, to be granted or denied within three business days of
request, with consent not to be unreasonably withheld and with silence being deemed consent. The parties shall reasonably cooperate with each other in making such announcements and filings. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">4.4 <B><U>Trademarks and Tradenames.</U></B> As of the Effective Date, Seller shall assign to the Company, to the extent owned by Seller,
without warranty, the sole and exclusive right to use the names &#147;Maui Fresh,&#148; &#147;M Fresh,&#148; &#147;Maui Fresh International,&#148; &#147;Maui Fresh International, LLC,&#148; and any similar name or forms thereof, and Seller shall
have no right to use and of the foregoing names from and after the Effective Date; provided, however, that Buyer acknowledges that Seller operates a business under the name &#147;Maui Fresh International, Inc.&#148; and agrees that Seller shall have
such reasonable time as may be required to formally change the name of such corporation to a corporate name that does not include the words &#147;Maui Fresh&#148;. Under no circumstances shall Buyer have any right to use the name &#147;Calavo&#148;,
&#147;Calavo Growers, Inc.&#148;, or any other tradename or trademark owned or used by Seller. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">4.5.
<B><U>Indemnification.</U></B> </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2">4.5.1 <B><U>Indemnification by Buyer</U></B>. Buyer will indemnify, defend, and hold Seller,
and each of Seller&#146;s officers, directors, employees, and agents harmless from and pay any and all losses, costs, damages, claims, obligations, liabilities and expenses (including, without limitation, all reasonable attorneys&#146; fees and
costs), whether known or unknown, contingent or vested, matured or unmatured, and whether or not resulting from third-party claims (collectively, &#147;<B>Claims</B>&#148;), directly or indirectly resulting from, relating to, arising out of or
attributable to any of the following: (a)&nbsp;any breach of any representation or warranty Buyer has made in this Agreement; (b)&nbsp;any breach, violation or default by Buyer of any covenant, agreement or obligation of Buyer in this Agreement;
(c)&nbsp;any event arising from the operation and ownership of, or conditions first occurring with respect to, the Company as of and from the Effective Date, and (d)&nbsp;any Claims arising out of or in connection with the Sublease, including
without limitation, any failure of payment or performance by the Company owing under the Sublease and any Claims arising out of the failure of the Sublessors or Landlord to consent to this transaction, if such consent is required. </FONT></P>

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 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2">4.5.2 <B><U>Indemnification by Seller</U>. </B>Seller shall indemnify, defend, and hold
Buyer, and each of Buyer&#146;s members, officers, directors, employees, and agents harmless from and pay any and all losses, costs, damages, claims, obligations, liabilities and expenses (including, without limitation, all reasonable
attorneys&#146; fees and costs), whether known or unknown, contingent or vested, matured or unmatured, and whether or not resulting from third-party claims (collectively, &#147;<B>Claims</B>&#148;), directly or indirectly resulting from, relating
to, arising out of or attributable to any of the following: (a)&nbsp;any breach of any representation or warranty Seller has made in this Agreement; (b)&nbsp;any breach, violation or default by Seller of any covenant, agreement or obligation of
Seller in this Agreement; (c)&nbsp;any grossly negligent or willful misconduct of Seller in connection with the Company occurring prior to the Effective Date. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">4.6 <B><U>Buyer to Retain Ownership</U></B>. Except as provided below, until or unless the Equity Promissory Note and the Goodwill Promissory Note have been or, in connection with such transaction, will
be paid in full, Buyer shall not: (a)&nbsp;sell, assign, pledge, or transfer (whether voluntarily, involuntarily, by operation of law, by gift or for consideration) any membership interest in the Company or sell the Company; and (b)&nbsp;without the
prior written consent of Seller, allow the Company to sell any of its assets, except in the ordinary course of business, or issue any new or additional membership interests or admit any new members to the Company, or amend its operating agreement.
Any such prohibited sale, pledge or other transfer or issuance of new membership interests shall be null and void, and the Company shall not be required to transfer or enter on its books any new or transferred membership interests in the Company
until the Equity Promissory Note and the Goodwill Promissory Note have been paid in full. Until such time, Buyer shall continue to operate and manage the Company and its assets in a good and prudent manner, in accordance with past practice.
Notwithstanding the foregoing, all or part of the membership interest of Buyer in the Company may be assigned and transferred to Francisco Clouthier, or any entity in which Francisco Clouthier (or a grantor trust in which Francisco Clouthier is the
sole trustee or a co-trustee with his spouse) is the sole owner thereof (subject to any community property interest); provided, however, that Francisco Clouthier shall confirm in writing at the time of the transfer the continuing validity and
enforceability of the Pledge Agreement and the Guaranty. In the event of such assignment and transfer, and conditioned upon Seller&#146;s receipt of the above-described confirmation by Francisco Clouthier, the obligations of Buyer shall be assumed
by Francisco Clouthier or the transferee entity and Buyer shall be relieved of any further obligation under the Equity Promissory Note and the Goodwill Promissory Note. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">4.7 <B><U>Amendment to Operating Agreement; Issuance of Certificates.</U></B> Immediately following the Effective Date, Buyer shall cause the Company to amend its Operating Agreement to document the
restrictions described in Paragraph 4.6 above, and to authorize and require the issuance of membership certificates evidencing the restrictions set forth in Paragraph 4.6, above, and a reference to the Pledge Agreement. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">4.8 <B><U>Termination of Joint Venture Agreement.</U></B> Concurrently with the sale of the Seller&#146;s Interest to Buyer, the Maui
Fresh International, LLC Joint Venture Agreement dated as of April&nbsp;13, 2006 will automatically, and without further action by the parties, be terminated and neither party shall have any further rights thereunder.
</FONT></P>

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 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>ARTICLE V </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><B><U>MISCELLANEOUS </U></B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">5.1 <B><U>Entire Agreement</U>. </B>This Agreement
constitutes the entire understanding and agreement of the parties relating to the subject matter hereof and supersedes any and all prior understandings, agreements, negotiations and discussions, both written and oral, between the parties hereto with
respect to the subject matter hereof. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">5.2 <B><U>Governing Law</U>. </B>This Agreement shall be construed, interpreted and
enforced in accordance with, and shall be governed by, the laws of the State of California without reference to, and regardless of, any applicable choice or conflicts of laws principles. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">5.3 <B><U>Counterparts and Signatures</U>. </B>This Agreement may be executed in any number of counterparts and by the several parties
hereto in separate counterparts, each of which shall be deemed to be an original, and all of which together shall constitute one and the same Agreement. Signatures by facsimile or electronic means shall be valid and enforceable; provided, however,
that the Buyer shall deliver to the Seller the originally signed Equity Promissory Note, Goodwill Promissory Note, and Pledge Agreement. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">5.4 <B><U>Further Assurances</U>. </B>Each of the parties hereto shall from time to time at the request of the other party hereto, and without further consideration, execute and deliver to such other
party such further instruments of assignment, transfer, conveyance and confirmation and take such other action as the other party may reasonably request in order to more effectively fulfill the purposes of this Agreement. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">5.5 <B><U>Severability</U></B>. The provisions of this Agreement will be deemed severable and the invalidity or unenforceability of any
provision will not affect the validity or enforceability of the other provisions hereof. If any provision hereof is determined by a court of competent jurisdiction or an arbitrator to be invalid or unenforceable, such provision shall be limited to
the extent necessary to make it valid and enforceable, or if necessary, severed from this Agreement, and the remainder of the Agreement shall be in full force and effect. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">5.6 <B><U>Attorneys&#146; Fees</U></B>. If either party brings a claim or lawsuit against the other party to this Agreement to interpret or enforce any of the terms of this Agreement, or to interpret or
enforce the Equity Promissory Note, the Goodwill Promissory Note, or the Pledge Agreement, the prevailing party shall, in addition to all other damages, be entitled to reasonable attorneys&#146; fees and costs, costs of witnesses, and costs of
investigation from the non-prevailing party. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">5.7 <B><U>Amendment and Termination.</U></B> This Agreement may be amended or
terminated only upon a writing executed by both Buyer and Seller. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">5.8 <B><U>Successors and Assigns.</U></B> Subject to the
provisions of this Agreement relating to the transferability of Seller&#146;s Interest, this Agreement shall be binding upon and inure to the benefit of Buyer and Seller and their respective successors and assigns. Whenever appropriate in this
Agreement, references to Buyer or Seller shall be deemed to refer to such company&#146;s successors or assigns. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">5.9
<B><U>Dispute Resolution.</U></B> </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2">5.9.1 <B><U>Arbitration</U></B>. All disputes concerning this Agreement shall be settled by
arbitration, before one arbitrator, in accordance with the commercial arbitration rules of the American Arbitration Association then in effect. The arbitrator shall be selected in accordance with such commercial arbitration rules. A party is
entitled to initiate an arbitration proceeding if a dispute cannot be resolved amicably within ten days after the other party has been notified of </FONT></P>

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the existence of the dispute. The arbitrator is authorized to grant injunctive relief and/or specific performance in addition to monetary relief. The arbitrator hereby is instructed to interpret
and enforce this Agreement in strict accordance with its terms, and in accordance with California law. All arbitration proceedings shall be held in Los Angeles, California. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">5.9.2 <B><U>Equitable Relief.</U></B> Notwithstanding the foregoing, each party is entitled to bring an action for temporary or preliminary injunctive relief at any time in any court of competent
jurisdiction in order to prevent irreparable injury that might result from a breach of this Agreement. Furthermore, upon the occurrence of an event of default, Seller is entitled to exercise all of the rights and remedies described in this Agreement
and, at any time, to bring an action in a court of competent jurisdiction (or, at its election, to initiate an arbitration proceeding) for purposes of enforcing the terms of this Agreement. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2">5.9.3 <B><U>Award.</U></B> The award of the arbitrator in any arbitration proceeding shall be final and may be enforced in any court of
competent jurisdiction, and an action to compel arbitration may be brought in any court of competent jurisdiction. The unsuccessful party to any arbitration proceeding or to any court action that is permitted by this Agreement shall pay to the
successful party all costs and expenses, including, without limitation, reasonable attorneys&#146; fees and the fees of the arbitrator, incurred therein by the successful party. EACH PARTY AGREES THAT, TO THE EXTENT PERMISSIBLE BY LAW, ALL RIGHTS TO
A TRIAL BY A JURY OF ANY CLAIM CONCERNING THIS AGREEMENT ARE ABSOLUTELY AND FOREVER WAIVED. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Executed as of the date first
above written. </FONT></P> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P><DIV ALIGN="right">
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<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Buyer:</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
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<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
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<TD HEIGHT="16" COLSPAN="5"></TD></TR>
<TR>
<TD VALIGN="top" COLSPAN="5"><FONT STYLE="font-family:Times New Roman" SIZE="2">San Rafael Distributing, Inc., an Arizona corporation</FONT></TD></TR>
<TR>
<TD HEIGHT="16"></TD>
<TD HEIGHT="16" COLSPAN="2"></TD>
<TD HEIGHT="16" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">By:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"> <P STYLE="margin-top:0px;margin-bottom:1px;border-bottom:1px solid #000000"><FONT STYLE="font-family:Times New Roman" SIZE="2">/s/ Francisco Clouthier</FONT></P></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Francisco Clouthier</FONT></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Its:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">President and Secretary</FONT></TD></TR>
<TR>
<TD HEIGHT="16"></TD>
<TD HEIGHT="16" COLSPAN="2"></TD>
<TD HEIGHT="16" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Seller:</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"></TD></TR>
<TR>
<TD HEIGHT="16" COLSPAN="5"></TD></TR>
<TR>
<TD VALIGN="top" COLSPAN="5"><FONT STYLE="font-family:Times New Roman" SIZE="2">Calavo Growers, Inc., a California corporation</FONT></TD></TR>
<TR>
<TD HEIGHT="16"></TD>
<TD HEIGHT="16" COLSPAN="2"></TD>
<TD HEIGHT="16" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">By:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"> <P STYLE="margin-top:0px;margin-bottom:1px;border-bottom:1px solid #000000"><FONT STYLE="font-family:Times New Roman" SIZE="2">/s/ Lecil E. Cole</FONT></P></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Its:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"> <P STYLE="margin-top:0px;margin-bottom:1px;border-bottom:1px solid #000000"><FONT STYLE="font-family:Times New Roman" SIZE="2">Chief Executive Officer</FONT></P></TD></TR>
</TABLE></DIV>
</BODY></HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.2
<SEQUENCE>3
<FILENAME>d435941dex102.htm
<DESCRIPTION>EQUITY SECURED PROMISSORY NOTE
<TEXT>
<HTML><HEAD>
<TITLE>Equity Secured Promissory Note</TITLE>
</HEAD>
 <BODY BGCOLOR="WHITE">

 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Exhibit 10.2 </B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT
STYLE="font-family:Times New Roman" SIZE="3"><B>EQUITY SECURED PROMISSORY NOTE </B></FONT></P> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%" BORDER="0" STYLE="BORDER-COLLAPSE:COLLAPSE" ALIGN="center">


<TR>
<TD WIDTH="51%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="48%"></TD></TR>


<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">$991,520.00</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">October&nbsp;31, 2012</FONT></TD></TR>
</TABLE> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">FOR VALUE RECEIVED, the undersigned, San Rafael Distributing, Inc., an Arizona corporation (the
&#147;<B><U>Borrower</U></B>&#148;), promises to pay to the order of Calavo Growers, Inc., a California corporation (the &#147;<B><U>Holder</U></B>&#148;), at 1141A Cummings Road, Santa Paula, California 93060 (or at such other place as the Holder
may from time to time designate to the Borrower), in lawful money of the United States, the principal sum of Nine Hundred Ninety-One Thousand, Five Hundred Twenty Dollars ($991,520.00), together with interest on the unpaid principal balance from and
after the date of this Promissory Note until paid at a rate equal to the average of Holder&#146;s two credit facility costs from the preceding month, as it may change from time to time. Holder shall notify Borrower of the applicable interest rate so
calculated 10 days prior to the date scheduled for payment thereof. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Principal and interest shall be due and payable in 36
equal monthly payments of principal (in the amount of $27,542.22 each) together with interest accrued on the unpaid principal balance, each payment being due and payable on the first day of each month commencing on December&nbsp;1, 2012. By way of
example, if the average of Holder&#146;s two credit facility costs for the month of November 2012 is 1.75%, the accrued interest due and payable on December&nbsp;1, 2012 (together with the monthly installment of principal), would be $1,445.97
($991,520 x 1.75% = $17,351.60 &divide; 12 = $1,445.97). The entire amount of principal and all accrued and unpaid interest shall be due and payable on November&nbsp;1, 2015. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">This Promissory Note is given to the Holder in connection with the Borrower&#146;s purchase of Holder&#146;s membership interest in Maui Fresh International, LLC, a California limited liability company
(the &#147;<B><U>Company</U></B>&#148;) pursuant to the Sale of LLC Interest Agreement dated as of October&nbsp;31, 2012 (the &#147;<B><U>Sale Agreement</U></B>&#148;). Pursuant to the Sale Agreement, Borrower is also entering into a second
promissory note (the &#147;<B><U>Goodwill Note</U></B>&#148;). </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">The payment of this Promissory Note is secured by a pledge of
all of the membership interest of the Company owned by Borrower. The terms and conditions of the pledge of the membership interest are set forth in a Pledge and Security Agreement between the Borrower and the Holder (the &#147;<B><U>Security
Agreement</U></B>&#148;) that is dated as of the same date as this Promissory Note. Notwithstanding the existence of security for the payment of this Promissory Note, the Borrower shall at all times remain liable to the Holder for the full and
punctual payment of all principal, interest and other amounts that are owed under this Promissory Note. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Payment and
performance of this Note is absolutely and unconditionally guaranteed by Francisco Clouthier on the terms of the Guarantee executed concurrently herewith. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">Each payment made under this Promissory Note shall be applied (i)&nbsp;first, to fees, costs and expenses incurred by the Holder in enforcing this Promissory Note upon the occurrence of an Event of
Default (as defined below), (ii)&nbsp;second, to accrued interest, and (iii)&nbsp;third, to the principal balance of this Promissory Note. Any principal, interest or other amount payable under this Promissory Note that is not paid when due shall
bear interest from and after the date when due until paid in full at the rate of twelve percent (12%)&nbsp;per annum (the &#147;<B><U>Default Rate</U></B>&#148;). Nothing in the preceding sentence shall be interpreted as a waiver or limitation of
the Holder&#146;s right to compel payment of all amounts hereunder when due and payable. </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">1 </FONT></P>


<p Style='page-break-before:always'>
<HR  SIZE="3" style="COLOR:#999999" WIDTH="100%" ALIGN="CENTER">

 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">If the Borrower is not in default under this Promissory Note, the Borrower shall have the
privilege of prepaying, without penalty or premium, the outstanding principal balance hereof in whole or in part at any time or from time to time. Any such prepayment must be accompanied by full payment of all interest then accrued and unpaid on the
principal amount being prepaid. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">The Borrower&#146;s failure to (i)&nbsp;pay when due any principal, accrued interest or other
amount owed under this Promissory Note or under the Goodwill Note, or (ii)&nbsp;perform any agreement contained in the Sale Agreement or the Security Agreement, or the failure of any representation or warranty of the Borrower that is contained in
the Sale Agreement or the Security Agreement to be true, if the failure under either (i)&nbsp;or (ii)&nbsp;is not remedied in full within ten (10)&nbsp;days after receipt of written notice from the Holder, shall constitute an &#147;<B><U>Event of
Default</U></B>.&#148; </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Upon the occurrence of an Event of Default, the Holder shall have the right, at its sole option, at
any time thereafter, (i)&nbsp;to declare the entire balance of principal and accrued interest on this Promissory Note and the Goodwill Note to be immediately due and payable, (ii)&nbsp;to exercise all of its rights as a secured party under the
Security Agreement with respect to the membership interests pledged by the Borrower, and (iii)&nbsp;to exercise any and all of its other rights and remedies that are provided under the Security Agreement and applicable law. All rights and remedies
of the Holder are cumulative and concurrent and may be pursued singularly, successively or together, at the sole discretion of the Holder, and whenever and as often as the Holder deems necessary or appropriate. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">If, after not less than 30 days after an Event of Default which has not been cured, an attorney is engaged by the Holder to undertake
collection, or enforce or construe any provision of this Promissory Note or the Goodwill Note, the Security Agreement, or the Sale Agreement, with or without the filing of any arbitration proceeding or legal action by the Holder, then the Borrower
shall pay on demand all reasonable attorneys&#146; fees and other costs and expenses incurred by the Holder in connection therewith. If an action (arbitration or court proceeding) is brought to enforce the terms of this Promissory Note or the
Goodwill Note, then the prevailing party shall be entitled to recover its reasonable attorneys&#146; fees and other costs and expenses incurred in connection therewith. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">The Borrower waives presentment and demand for payment, notice of dishonor, protest and notice of protest, notice of default and any and all lack of diligence or delay by the Holder in the collection or
enforcement of this Promissory Note. The Holder shall not be deemed to have waived any right or remedy that it has under this Promissory Note, the Security Agreement or applicable law unless it has expressly waived the same in writing or unless this
Promissory Note or the Security Agreement expressly provides a period of time in which the right or remedy must be exercised. The waiver by the Holder of a right or remedy shall not be construed as a waiver of any other right or remedy or of any
subsequent right or remedy of the same kind. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">If any provision of this Promissory Note is determined by an arbitrator or a
court of competent jurisdiction to be invalid, illegal or unenforceable, that provision shall be deemed </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">2 </FONT></P>


<p Style='page-break-before:always'>
<HR  SIZE="3" style="COLOR:#999999" WIDTH="100%" ALIGN="CENTER">

 <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">
severed from this Promissory Note, and the validity, legality and enforceability of the remaining provisions of this Promissory Note shall remain in full force and effect. If the Holder ever
receives any interest payment on this Promissory Note in excess of the maximum interest permitted by applicable law, such excess amount shall, at the Holder&#146;s option, be applied to the reduction of the unpaid principal balance of this
Promissory Note or returned to the Borrower. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Time is of the essence with respect to every provision hereof. This Promissory
Note shall be governed by the internal laws of the State of California without giving effect to conflict-of-law principles. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">IN WITNESS WHEREOF, the Borrower has executed and delivered this Promissory Note as of the date first written above. </FONT></P>
<P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P><DIV ALIGN="right">
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="40%" BORDER="0" STYLE="BORDER-COLLAPSE:COLLAPSE">


<TR>
<TD WIDTH="6%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="93%"></TD></TR>


<TR>
<TD VALIGN="top" COLSPAN="3"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><U>BORROWER</U></B></FONT></TD></TR>
<TR>
<TD HEIGHT="16" COLSPAN="3"></TD></TR>
<TR>
<TD VALIGN="top" COLSPAN="3"><FONT STYLE="font-family:Times New Roman" SIZE="2">San Rafael Distributing, Inc., an Arizona corporation</FONT></TD></TR>
<TR>
<TD HEIGHT="16"></TD>
<TD HEIGHT="16" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">By:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"> <P STYLE="margin-top:0px;margin-bottom:1px;border-bottom:1px solid #000000"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;/s/
Francisco Clouthier</FONT></P></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Francisco Clouthier</FONT></TD></TR>
<TR>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Its:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">President and Secretary</FONT></TD></TR>
</TABLE></DIV>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">3 </FONT></P>

</BODY></HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.3
<SEQUENCE>4
<FILENAME>d435941dex103.htm
<DESCRIPTION>GOODWILL SECURED PROMISSORY NOTE
<TEXT>
<HTML><HEAD>
<TITLE>Goodwill Secured Promissory Note</TITLE>
</HEAD>
 <BODY BGCOLOR="WHITE">

 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Exhibit 10.3 </B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><B>GOODWILL SECURED PROMISSORY NOTE </B></FONT></P> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%" BORDER="0" STYLE="BORDER-COLLAPSE:COLLAPSE" ALIGN="center">


<TR>
<TD WIDTH="51%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="48%"></TD></TR>


<TR>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">$1,337,694.00</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">October&nbsp;31, 2012</FONT></TD></TR>
</TABLE> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">FOR VALUE RECEIVED, the undersigned, San Rafael Distributing, Inc., an Arizona corporation (the
&#147;<B><U>Borrower</U></B>&#148;), promises to pay to the order of Calavo Growers, Inc., a California corporation (the &#147;<B><U>Holder</U></B>&#148;), at 1141A Cummings Road, Santa Paula, California 93060 or at such other place as the Holder
may from time to time designate to the Borrower), in lawful money of the United States, the principal sum of One Million, Three Hundred Thirty-Seven Thousand, Six Hundred Ninety-Four Dollars ($1,337,694.00). </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">The entire principal amount shall be due and payable on November&nbsp;1, 2017. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">This Promissory Note is given to the Holder in connection with the Borrower&#146;s purchase of Holder&#146;s membership interest in Maui
Fresh International, LLC, a California limited liability company (the &#147;<B><U>Company</U></B>&#148;) pursuant to the Sale of LLC Interest Agreement dated as of October&nbsp;31, 2012 (the &#147;<B><U>Sale Agreement</U></B>&#148;). Pursuant to the
Sale Agreement, Borrower is also entering into a second promissory note (the &#147;<B><U>Equity Note</U></B>&#148;). </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">The
payment of this Promissory Note is secured by a pledge of all of the membership interest of the Company owned by Borrower. The terms and conditions of the pledge of the membership interest are set forth in a Pledge and Security Agreement between the
Borrower and the Holder (the &#147;<B><U>Security Agreement</U></B>&#148;) that is dated as of the same date as this Promissory Note. Notwithstanding the existence of security for the payment of this Promissory Note, the Borrower shall at all times
remain liable to the Holder for the full and punctual payment of all principal, interest and other amounts that are owed under this Promissory Note. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">Payment and performance of this Note is absolutely and unconditionally guaranteed by Francisco Clouthier on the terms of the Guarantee executed concurrently herewith. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Each payment made under this Promissory Note shall be applied (i)&nbsp;first, to fees, costs and expenses incurred by the Holder in
enforcing this Promissory Note upon the occurrence of an Event of Default (as defined below), (ii)&nbsp;second, to accrued interest, if any, on the terms described below; and (iii)&nbsp;third, to the principal balance of this Promissory Note. If the
principal amount due hereunder is not paid when due, any unpaid amount of principal shall bear interest from and after the date when due until paid in full at the rate of twelve percent (12%)&nbsp;per annum (the &#147;<B><U>Default
Rate</U></B>&#148;). Nothing in the preceding sentence shall be interpreted as a waiver or limitation of the Holder&#146;s right to compel payment of all amounts hereunder when due and payable. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">If the Borrower is not in default under this Promissory Note, the Borrower shall have the privilege of prepaying, without penalty or
premium, the outstanding principal balance hereof in whole or in part at any time or from time to time. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">The Borrower&#146;s
failure to (i)&nbsp;pay when due any principal, accrued interest or other amount owed under this Promissory Note or under the Equity Note, or (ii)&nbsp;perform any agreement contained in the Sale Agreement or the Security Agreement, or the failure
of any representation or warranty of the Borrower that is contained in the Sale Agreement or the </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">1 </FONT></P>


<p Style='page-break-before:always'>
<HR  SIZE="3" style="COLOR:#999999" WIDTH="100%" ALIGN="CENTER">

 <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">
Security Agreement to be true, if the failure under either (i)&nbsp;or (ii)&nbsp;is not remedied in full within ten (10)&nbsp;days after receipt of written notice from the Holder, shall
constitute an &#147;Event of Default.&#148; </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Upon the occurrence of an Event of Default, the Holder shall have the right, at
its sole option, at any time thereafter, (i)&nbsp;to declare the entire balance of principal and accrued interest on this Promissory Note and the Equity Note to be immediately due and payable, (ii)&nbsp;to exercise all of its rights as a secured
party under the Security Agreement with respect to the membership interests pledged by the Borrower, and (iii)&nbsp;to exercise any and all of its other rights and remedies that are provided under the Security Agreement and applicable law. All
rights and remedies of the Holder are cumulative and concurrent and may be pursued singularly, successively or together, at the sole discretion of the Holder, and whenever and as often as the Holder deems necessary or appropriate. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">If, after not less than 30 days after an Event of Default which has not been cured, an attorney is engaged by the Holder to undertake
collection, or enforce or construe any provision of this Promissory Note or the Equity Note, the Security Agreement, or the Sale Agreement, with or without the filing of any arbitration proceeding or legal action by the Holder, then the Borrower
shall pay on demand all reasonable attorneys&#146; fees and other costs and expenses incurred by the Holder in connection therewith. If an action (arbitration or court proceeding) is brought to enforce the terms of this Promissory Note or the Equity
Note, then the prevailing party shall be entitled to recover its reasonable attorneys&#146; fees and other costs and expenses incurred in connection therewith. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">The Borrower waives presentment and demand for payment, notice of dishonor, protest and notice of protest, notice of default and any and all lack of diligence or delay by the Holder in the collection or
enforcement of this Promissory Note. The Holder shall not be deemed to have waived any right or remedy that it has under this Promissory Note, the Security Agreement or applicable law unless it has expressly waived the same in writing or unless this
Promissory Note or the Security Agreement expressly provides a period of time in which the right or remedy must be exercised. The waiver by the Holder of a right or remedy shall not be construed as a waiver of any other right or remedy or of any
subsequent right or remedy of the same kind. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">If any provision of this Promissory Note is determined by an arbitrator or a
court of competent jurisdiction to be invalid, illegal or unenforceable, that provision shall be deemed severed from this Promissory Note, and the validity, legality and enforceability of the remaining provisions of this Promissory Note shall remain
in full force and effect. If the Holder ever receives any interest payment on this Promissory Note in excess of the maximum interest permitted by applicable law, such excess amount shall, at the Holder&#146;s option, be applied to the reduction of
the unpaid principal balance of this Promissory Note or returned to the Borrower. </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">2 </FONT></P>


<p Style='page-break-before:always'>
<HR  SIZE="3" style="COLOR:#999999" WIDTH="100%" ALIGN="CENTER">

 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Time is of the essence with respect to every provision hereof. This Promissory Note shall be
governed by the internal laws of the State of California without giving effect to conflict-of-law principles. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">IN WITNESS
WHEREOF, the Borrower has executed and delivered this Promissory Note as of the date first written above. </FONT></P> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P><DIV ALIGN="right">
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<TD VALIGN="top" COLSPAN="3"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><U>BORROWER</U></B></FONT></TD></TR>
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<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">By:</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"> <P STYLE="margin-top:0px;margin-bottom:1px;border-bottom:1px solid #000000" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">/s/ Francisco Clouthier</FONT></P></TD></TR>
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<TD VALIGN="top" ALIGN="center"> <P STYLE="margin-left:1.00em; text-indent:-1.00em" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">Francisco Clouthier</FONT></P></TD></TR>
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<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">Its:</FONT></P></TD>
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<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">President and Secretary</FONT></P></TD></TR>
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 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">3 </FONT></P>

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<DOCUMENT>
<TYPE>EX-10.4
<SEQUENCE>5
<FILENAME>d435941dex104.htm
<DESCRIPTION>PLEDGE AND SECURITY AGREEMENT
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<TITLE>Pledge and Security Agreement</TITLE>
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 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Exhibit 10.4 </B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><B><U>PLEDGE AND SECURITY AGREEMENT </U></B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">This Pledge and Security Agreement
(the &#147;<B><U>Agreement</U></B>&#148;), dated October&nbsp;31, 2012, is given by San Rafael Distributing, Inc., an Arizona corporation (&#147;<B><U>San Rafael</U></B>&#148;) to Calavo Growers, Inc., a California corporation
(&#147;<B><U>Calavo</U></B>&#148;) in connection with San Rafael&#146;s purchase of Calavo&#146;s membership interest in Maui Fresh International, LLC, a California limited liability company (the &#147;<B><U>Company</U></B>&#148;) pursuant to the
Sale of LLC Interest Agreement dated as of October&nbsp;31, 2012 (the &#147;<B><U>Sale Agreement</U></B>&#148;). </FONT></P>
<P STYLE="margin-top:24px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><U>RECITALS </U></B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">A. Calavo and San Rafael entered into the Sale Agreement on October&nbsp;31, 2012, pursuant to which Calavo sold to San Rafael all of Calavo&#146;s membership interest in the Company, and San Rafael
delivered to Calavo one promissory note in the amount of Nine Hundred Ninety-One Thousand, Five Hundred Twenty Dollars ($991,520) (the &#147;<B><U>Equity Note</U></B>&#148;) and one promissory note in the amount of One Million, Three Hundred
Thirty-Seven Thousand, Six Hundred Ninety-Four Dollars ($1,337,694) (the &#147;<B><U>Goodwill Note</U></B>&#148;). Collectively, the Equity Note and the Goodwill Note are referred to as the &#147;<B><U>Promissory Notes&#148;</U></B>, and
collectively, the sale of Calavo&#146;s interest is referred to as the &#147;<B><U>Sold Interest</U></B>&#148;. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">B. As
security for the payment of the Promissory Notes and in order to induce Calavo to accept the Promissory Notes in consideration of the sale of the Sold Interest, San Rafael has agreed to give Calavo a first-priority security interest in all of the
membership interests in the Company (the &#147;<B><U>Entire Interest</U></B>&#148;) upon the terms and conditions described in this Agreement. Notwithstanding the existence of security for the payment of the Promissory Notes, San Rafael shall at all
times remain liable to Calavo for the full and punctual payment of all principal, accrued interest and other amounts that are owed under the Promissory Notes. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><B>NOW, THEREFORE</B>, San Rafael agrees as follows: </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>1.</B> <B><U>Grant of
Security Interest</U></B>. As security for the full and timely payment of all principal, accrued interest and other amounts that are owed by San Rafael under the Promissory Notes and this Agreement (collectively, the &#147;<B><U>Debt</U></B>&#148;)
and the full and timely performance of all other obligations under this Agreement, San Rafael hereby grants to Calavo a continuing and first-priority security interest (the &#147;<B><U>Security Interest</U></B>&#148;) in the following (collectively,
the &#147;<B><U>Collateral</U></B>&#148;): all right, title and interest of San Rafael in and to the Entire Interest and all rights and privileges pertaining to the Entire Interest, including, without limitation, all voting rights, all securities
receivable in respect of or in exchange for the Entire Interest, all rights to subscribe for securities incident to or arising from ownership of the Entire Interest, all cash, stock and other dividends or distributions paid or payable on the Entire
Interest, all of San Rafael&#146;s books and records pertaining to the foregoing and all proceeds from sales, transfers or other dispositions of the Entire Interest and whatever is received when any of the foregoing is sold, exchanged or otherwise
transferred. Without limiting the generality of the foregoing, if San Rafael receives any additional membership interests of the Company or of any successor to the Company, such additional membership interests shall be considered part of the
&#147;Entire Interest&#148; for purposes of this Agreement and shall be subject to the Security Interest. </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">- 1 -
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 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>2.</B> <B><U>Rights of San Rafael</U>.</B> Prior to the occurrence of an Event of Default
(as defined below in Section&nbsp;9) and subject to the restrictions on the transferability of the Entire Interest described below in Section&nbsp;3, San Rafael shall have all of the rights of a member of the Company with respect to the Entire
Interest (including, without limitation, voting rights and the right to receive any cash dividends that may be declared and paid by the Company). Following the occurrence of an Event of Default, San Rafael&#146;s rights with respect to the Entire
Interest (including, without limitation, its voting rights and rights to dividends) shall be subject to all of Calavo&#146;s rights and remedies upon the exercise of its Security Interest. San Rafael agrees that, during the continuance of an Event
of Default and unless otherwise determined by Calavo: (i)&nbsp;all dividends and other distributions that it would otherwise be entitled to receive with respect to the Entire Interest shall instead be withheld by the Company and applied to payments
that are owed by San Rafael on the Promissory Notes, and (ii)&nbsp;Calavo shall have the voting rights with respect to the Entire Interest. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><B>3.</B> <B><U>Restrictions on Sale or Transfer; Continuing Operations.</U></B> Except as provided below, until the payment in full of the Debt or unless the Debt will be paid as part of such
transaction, San Rafael shall not: (a)&nbsp;sell, assign, pledge or otherwise transfer (whether voluntarily, involuntarily, by operation of law, by gift or for consideration) any of the Entire Interest, or sell the Company; and (b)&nbsp;without the
prior written consent of Calavo, allow the Company to sell any of its assets, except in the ordinary course of business, or issue any new or additional membership interests or admit any new members to the Company, or amend its operating agreement.
Any such prohibited sale, pledge or other transfer or issuance of new membership interests shall be null and void, and the Company shall not be required to transfer or enter on its books any new or transferred membership interests in the Company
until the Debt has been paid in full. Until such time, San Rafael shall continue to operate and manage the Company and its assets in a good and prudent manner, in accordance with past practice. Notwithstanding the foregoing, all or part of the
membership interest of Buyer in the Company may be assigned and transferred to Francisco Clouthier, or any entity in which Francisco Clouthier (or a grantor trust in which Francisco Clouthier is the sole trustee or a co-trustee with his spouse) is
the sole owner thereof (subject to any community property interest); provided, however, that Francisco Clouthier shall confirm in writing at the time of the transfer the continuing validity and enforceability of the Pledge Agreement and the
Guaranty. In the event of such assignment and transfer, and conditioned upon Calavo&#146;s receipt of the above-described confirmation by Francisco Clouthier, the obligations of Buyer shall be assumed by Francisco Clouthier or the transferee entity
and Buyer shall be relieved of any further obligation under the Promissory Notes. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>4.</B> <U><B>Restrictive
Legends</B>.</U> Substantially the following legends shall be placed on the membership certificates of the members and on the Operating Agreement of the Company: &#147;THE OWNERSHIP INTERESTS REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A SECURITY
INTEREST IN FAVOR OF CALAVO GROWERS, INC. AND TO RESTRICTIONS ON TRANSFER DESCRIBED IN A PLEDGE AND SECURITY AGREEMENT BETWEEN THE REGISTERED OWNER OF THE MEMBERSHIP INTERESTS AND CALAVO GROWERS, INC., A COPY OF WHICH IS ON FILE AT THE PRINCIPAL
EXECUTIVE OFFICE OF THE COMPANY. NO TRANSFER, SALE, ASSIGNMENT, PLEDGE, HYPOTHECATION OR OTHER DISPOSITION OF THE OWNERSHIP INTERESTS REPRESENTED BY THIS CERTIFICATE MAY BE MADE EXCEPT IN ACCORDANCE WITH THE PROVISIONS OF SUCH PLEDGE AND SECURITY
AGREEMENT.&#148; </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">- 2 -
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 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>5.</B> <B><U>Preservation and Protection of the Security Interest</U></B>. San Rafael
shall preserve and protect Calavo&#146;s first-priority security interest in the Collateral and shall cause the Security Interest to be perfected and to continue to be perfected until the Debt is paid in full. Concurrently with the execution and
delivery of this Agreement, San Rafael shall execute and deliver to Calavo a UCC financing statement for filing with the California Secretary of State. San Rafael shall execute and deliver to Calavo (within ten days after receipt of Calavo&#146;s
request) such other security agreements, endorsements, pledges, assignments and other documents (including, without limitation, financing statements and continuation statements and amendments thereto) as Calavo may request from time to time to
effectuate the grant to Calavo of the Security Interest, and Calavo is authorized to file and/or record such documents with the California Secretary of State and other appropriate regulatory authorities. Within ten days after receipt of
Calavo&#146;s request, all certificates and instruments representing or evidencing the Collateral shall be delivered to Calavo for retention pursuant to this Agreement and shall be in suitable form for transfer by delivery or, as applicable, shall
be accompanied by San Rafael&#146;s endorsement, where necessary, of duly executed instruments of transfer, all in form and substance satisfactory to Calavo. Without limiting the generality of the foregoing, concurrently with its execution and
delivery of this Agreement to Calavo, San Rafael shall deliver to Calavo the membership certificates evidencing San Rafael&#146;s ownership of the Entire Interest and an undated power in blank executed by San Rafael with respect to the Entire
Interest. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>6.</B> <B><U>Title to the Collateral</U></B>. San Rafael shall at all times maintain good and marketable title
to the Collateral free and clear of all liens, encumbrances and other security interests. San Rafael shall pay in full any tax that is imposed on any of the Collateral prior to its delinquency and, within ten days after any other lien or encumbrance
is imposed on any of the Collateral, San Rafael shall pay and discharge such lien or other encumbrance in full. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>7.</B>
<B><U>Cash Dividends Paid Prior to an Event of Default</U></B>. Notwithstanding anything to the contrary in this Agreement, any and all cash dividends that are paid on the Entire Interest by the Company prior to the occurrence of an Event of Default
shall not be treated as Collateral that is subject to the Security Interest, and San Rafael shall be entitled to retain and/or transfer such cash dividends in its discretion free from any restrictions imposed by this Agreement. However, any and all
cash dividends that are paid on the Entire Interest by the Company during the continuance of an Event of Default shall be treated as Collateral that is subject to the Security Interest and the terms and conditions of this Agreement that pertain to
the Security Interest and the Collateral. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>8.</B> <B><U>Power of Attorney</U></B>. San Rafael hereby appoints Calavo as its
attorney-in-fact (with full power of substitution) to execute, deliver and file, effective upon the occurrence of an Event of Default, on San Rafael&#146;s behalf and at San Rafael&#146;s expense (i)&nbsp;any financing statements, continuation
statements or other documents required to perfect or continue the Security Interest and (ii)&nbsp;any other documents and instruments that Calavo determines are necessary or appropriate in order to enable it to exercise its rights and remedies that
are provided hereunder and by applicable law upon the occurrence of an Event of Default. This power, being coupled with an interest, shall be irrevocable until the Debt is paid in full. </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">- 3 -
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 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>9.</B> <B><U>Event of Default</U></B>. An &#147;<B><U>Event of Default</U></B>&#148;
under this Agreement means (i)&nbsp;San Rafael&#146;s failure to pay when due any principal, accrued interest or other amount that is owed under either or both of the Promissory Notes or this Agreement, or (ii)&nbsp;San Rafael&#146;s failure to
perform any other agreement contained in this Agreement, the Sale Agreement or either (or both of) the Promissory Notes or the failure of any representation or warranty of San Rafael that is contained in this Agreement, the Sale Agreement or the
Promissory Notes to be true, if the failure under either (i)&nbsp;or (ii)&nbsp;is not remedied within ten (10)&nbsp;days after receipt of written notice from Calavo. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><B>10.</B> <B><U>Remedies on an Event of Default</U></B>. Upon the occurrence of an Event of Default, Calavo shall have the immediate right to take control of all or any part of the Collateral, with or
without judicial process, and without advertisement, and without demand of performance or notice to San Rafael, except as otherwise provided in Section&nbsp;9 above, all of which are (except as set forth in Section&nbsp;9) expressly waived by San
Rafael; provided, however, that if any notice is required by law in connection with the exercise by Calavo of its rights and remedies, San Rafael agrees that ten days&#146; prior written notice is a reasonable time and manner for notice (which ten
days&#146; notice shall be concurrent with, and not in addition to, the notice required under Section&nbsp;9). Furthermore, Calavo may exercise all of the other rights and remedies that are provided to it under this Agreement and to a secured party
by the California Uniform Commercial Code and otherwise by applicable law. Calavo&#146;s rights and remedies shall include, without limitation, the power (i)&nbsp;to transfer into Calavo&#146;s name or into the name of its nominee any or all of the
Entire Interest or other Collateral and thereafter to receive and retain all cash and other dividends, distributions and payments made on account of the Entire Interest and other Collateral, and otherwise act with respect thereto as though it were
the absolute owner thereof, and (ii)&nbsp;to sell all or any portion of the Entire Interest and other Collateral at a public or private sale at such place and time and at such prices and other terms as Calavo may determine. San Rafael recognizes
that Calavo may be compelled to resort to one or more private sales of any or all of the Entire Interest constituting part of the Collateral to a restricted group of purchasers who will be obliged to agree, among other things, to acquire such
securities for their own account for investment and not with a view to the distribution or resale thereof. San Rafael acknowledges and agrees that any such private sale may result in prices and other terms less favorable to the seller than if such
sale were a public sale and, notwithstanding such circumstances, agrees that any such private sale shall not, for such reason alone, be deemed to have been made in a commercially unreasonable manner. Calavo shall not be under any obligation to delay
a sale of any or all of the Entire Interest for the period of time necessary to permit the registration of the Entire Interest for public sale under the Securities Act of 1933, as amended, or under applicable state securities laws. At any sale,
Calavo may, to the extent permissible under applicable law, purchase the whole or any part of the Entire Interest or other Collateral, and Calavo shall be entitled to use and apply any or all of the Debt as a credit on account of the purchase price
of the Entire Interest or other Collateral. Calavo and any other purchaser of any portion or all of the Entire Interest or other Collateral at any such sale shall hold the purchased Entire Interest or other Collateral free from any claim or right on
the part of San Rafael, and San Rafael hereby waives any right of redemption, stay or appraisal that it might otherwise have under applicable law. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><B>11.</B> <B><U>Application of Proceeds</U></B>. Any Collateral or the proceeds of the Collateral held or realized upon at any time by Calavo following an Event of Default shall be applied in
satisfaction of the Debt, in such order of application as Calavo shall determine in its reasonable discretion, until the Debt is fully paid, and thereafter any balance shall be distributed to San Rafael or as otherwise required by applicable law.
</FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">- 4 -
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 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>12.</B> <B><U>No Implied Waivers; Cumulative Remedies</U></B>. No delay or failure of
Calavo in exercising any right or remedy under this Agreement shall operate as a waiver thereof, nor shall any single or partial exercise thereof or any abandonment or discontinuance of steps to enforce such a right or remedy preclude any further
exercise thereof or of any other right or remedy. The rights and remedies of Calavo under this Agreement are cumulative and not exclusive of any rights or remedies which it might otherwise have under the California Uniform Commercial Code or other
applicable law. Any waiver, permit, consent or approval of any kind or character on the part of Calavo of any Event of Default or any such waiver of any provision of this Agreement must be in writing and shall be effective only to the extent
specifically set forth in writing. San Rafael acknowledges and agrees that the exercise by Calavo of its rights under this Agreement and the acquisition or sale by Calavo of any portion or all of the Entire Interest or other Collateral will not
operate to release San Rafael from its obligation to pay the Debt until full payment of any deficiency on the Debt has been made in cash. Furthermore, San Rafael acknowledges and agrees that Calavo is not obligated to exercise any of the rights or
remedies provided by this Agreement, and that Calavo shall be deemed to have exercised reasonable care in the custody and preservation of any Collateral in its possession if such Collateral is accorded treatment that is substantially similar to that
which Calavo accords its own similar property. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>13.</B> <B><U>Reimbursement of Fees and Expenses</U></B>. If, after not
less than 30 days after an Event of Default which has not been cured, an attorney is engaged by Calavo to undertake collection, or enforce or construe any provision of this Agreement, the Sale Agreement, or one or both of the Promissory Notes, with
or without the filing of any arbitration proceeding or legal action by Calavo, then San Rafael shall pay on demand all reasonable attorneys&#146; fees and other costs and expenses incurred by Calavo in connection therewith. If an action (arbitration
or court proceeding) is brought to enforce the terms of this Agreement, the Sale Agreement, or one or both of Promissory Notes, or otherwise in connection with the transaction described herein and relationship between the parties in connection with
such transaction, then the prevailing party shall be entitled to recover its reasonable attorneys&#146; fees and other costs and expenses incurred in connection therewith. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><B>14.</B> <U><B>Termination of the Security Interest</B></U>. The Security Interest shall terminate only if and when the Debt has been paid in full. Upon termination of the Security Interest, Calavo
shall, at the request of San Rafael, file with the California Secretary of State and any other applicable regulatory authority a statement indicating that the Security Interest has terminated. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>15.</B> <B><U>San Rafael&#146;s Representations and Warranties</U>.</B>&nbsp;San Rafael hereby represents and warrants to Calavo that
it is purchasing the Sold Interest for its own account for investment purposes and not for the purpose of the public distribution of the Sold Interest. No other individual, corporation, partnership or other person, entity or group will have any
direct or indirect security interest or other beneficial ownership interest in the Entire Interest during the period that they remain subject to the Security Interest. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><B>16.</B> <B><U>Reporting Requirements</U>.</B> San Rafael agrees to deliver to Calavo complete and accurate quarterly financial reports (balance sheet, cash flow statement, income statement), maintained
on a consistent basis and fairly showing the operations of the Company, within thirty (30)&nbsp;days following the end of each quarter. </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">- 5 -
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 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>17. <U>Miscellaneous Provisions</U>.</B> <B></B> </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>(a)</B> <B><U>Further Assurances</U>.</B>&nbsp;San Rafael shall from time to time at the request of Calavo, and without further
consideration, execute and deliver to Calavo such further instruments of assignment, transfer, conveyance and confirmation and take such other action as Calavo may reasonably request in order to more effectively fulfill the purposes of this
Agreement. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>(b)</B> <B><U>Severability</U>.</B>&nbsp;The provisions of this Agreement will be deemed severable and the
invalidity or unenforceability of any provision will not affect the validity or enforceability of the other provisions hereof. If any provision hereof is determined by a court of competent jurisdiction or an arbitrator to be invalid or
unenforceable, such provision shall be limited to the extent necessary to make it valid and enforceable, or if necessary, severed from this Agreement, and the remainder of the Agreement shall be in full force and effect. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>(c)</B> <B><U>Complete Agreement</U>.</B>&nbsp;This Agreement, the Promissory Notes, and the Sale Agreement constitute the complete
and exclusive agreement between San Rafael and Calavo with respect to the subject matter herein and thereof and replace and supersede any and all prior understandings, agreements, negotiations and discussions, both written and oral, between the
parties hereto with respect to the subject matter hereof and thereof. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>(d)</B> <B><U>Successors and
Assigns</U>.</B>&nbsp;Subject to the provisions of this Agreement and the Sale Agreement relating to the transferability of any portion or all of the Entire Interest, this Agreement shall be binding upon and inure to the benefit of San Rafael and
Calavo and their respective successors and assigns. Whenever appropriate in this Agreement, references to San Rafael or Calavo shall be deemed to refer to such company&#146;s successors or assigns. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>(e)</B> <B><U>Notices</U>.</B>&nbsp;Any notice required or permitted to be given to Calavo or San Rafael must be in writing and
personally delivered or sent by registered or certified United States mail (postage prepaid and return receipt requested), by overnight delivery service or by facsimile transmission, addressed to the address shown below or to such other address as
such party may designate in the foregoing manner to the other party. Any such notice that is sent by San Rafael or Calavo in the foregoing manner shall be deemed to have been delivered upon actual personal delivery or actual receipt by facsimile
transmission (with telephonic confirmation of receipt) or delivery by the United States mail or an overnight delivery service. </FONT></P> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TR>
<TD WIDTH="8%"></TD>
<TD VALIGN="bottom" WIDTH="6%"></TD>
<TD WIDTH="42%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="43%"></TD></TR>


<TR>
<TD VALIGN="top"> <P STYLE="text-indent:2.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">To&nbsp;Calavo:</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">Calavo Growers Inc.</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">1141A Cummings Road</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">Santa Paula, California 93060</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">Attention: Chief Financial Officer</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">Fax: (805) 921-3287</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD></TR>
</TABLE>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">- 6 -
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<TD WIDTH="39%"></TD>
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<TD WIDTH="41%"></TD></TR>


<TR>
<TD VALIGN="top"> <P STYLE="text-indent:2.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">To&nbsp;San&nbsp;Rafael:</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">San Rafael Distributing, Inc.</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">1601 East Olympic Avenue, Bay 509-510</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">Los Angeles, California 90021</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">Attention: Francisco Clouthier</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">Fax: (213) 688-9768</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD></TR>
</TABLE> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>(f) </B><B><U>Amendment and Termination</U>.</B>&nbsp;This Agreement may be amended or terminated only
upon a writing executed by both Calavo and San Rafael. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>(g)</B> <B><U>Counterparts</U>.</B>&nbsp;This Agreement may be
executed in two counterparts, each of which shall be deemed an original, but both of which shall constitute one and the same instrument. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><B>(h)</B> <B><U>Attorneys&#146; Fees</U>.</B> If either party brings a claim or lawsuit against the other party to this Agreement to interpret or enforce any of the terms of this Agreement, or to
interpret or enforce the Equity Promissory Note, the Goodwill Promissory Note, or the Sale Agreement, the prevailing party shall, in addition to all other damages, be entitled to reasonable attorneys&#146; fees and costs, costs of witnesses, and
costs of investigation from the non-prevailing party. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>(i)</B> <U><B>Governing Law</B></U><B>.</B>&nbsp;This Agreement
shall be construed, interpreted and enforced in accordance with, and shall be governed by, the laws of the State of California without reference to, and regardless of, any applicable choice or conflicts of laws principles. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>(j)</B> <U><B>Dispute Resolution</B></U><B>.</B> All disputes concerning this Agreement shall be settled by arbitration, before one
arbitrator, in accordance with the commercial arbitration rules of the American Arbitration Association then in effect. The arbitrator shall be selected in accordance with such commercial arbitration rules. A party is entitled to initiate an
arbitration proceeding if a dispute cannot be resolved amicably within ten days after the other party has been notified of the existence of the dispute. The arbitrator is authorized to grant injunctive relief and/or specific performance in addition
to monetary relief. The arbitrator hereby is instructed to interpret and enforce this Agreement in strict accordance with its terms and in accordance with California law. All arbitration proceedings shall be held in Los Angeles, California.
</FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Notwithstanding the foregoing, each party is entitled to bring an action for temporary or preliminary injunctive relief at
any time in any court of competent jurisdiction in order to prevent irreparable injury that might result from a breach of this Agreement. Furthermore, upon the occurrence of an Event of Default, Calavo is entitled to exercise all of the rights and
remedies described in this Agreement and, at any time, to bring an action in a court of competent jurisdiction (or, at its election, to initiate an arbitration proceeding) for purposes of enforcing the Security Interest. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">The award of the arbitrator in any arbitration proceeding shall be final and may be enforced in any court of competent jurisdiction, and
an action to compel arbitration may be brought in any court of competent jurisdiction. The unsuccessful party to any arbitration </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">- 7 -
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 <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">
proceeding or to any court action that is permitted by this Agreement shall pay to the successful party all costs and expenses, including, without limitation, reasonable attorneys&#146; fees and
the fees of the arbitrator, incurred therein by the successful party. EACH PARTY AGREES THAT, TO THE EXTENT PERMISSIBLE BY LAW, ALL RIGHTS TO A TRIAL BY A JURY OF ANY CLAIM CONCERNING THIS AGREEMENT ARE ABSOLUTELY AND FOREVER WAIVED. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">IN WITNESS WHEREOF, the parties hereto have executed and delivered this Agreement as of the day and year first above written. </FONT></P>
<P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TD WIDTH="5%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="47%"></TD></TR>


<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">San Rafael Distributing, Inc., an Arizona</FONT></P>
<P STYLE="margin-top:0px;margin-bottom:1px; margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">corporation</FONT></P></TD></TR>
</TABLE> <DIV ALIGN="right">
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<TD WIDTH="6%"></TD>
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<TD WIDTH="93%"></TD></TR>


<TR>
<TD HEIGHT="16"></TD>
<TD HEIGHT="16" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">By:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:1px;border-bottom:1px solid #000000"><FONT STYLE="font-family:Times New Roman" SIZE="2">/s/ Francisco Clouthier</FONT></P></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">Francisco Clouthier</FONT></TD></TR>
<TR>
<TD VALIGN="top" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">Its:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">President and Secretary</FONT></TD></TR>
</TABLE></DIV>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">- 8 -
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</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.5
<SEQUENCE>6
<FILENAME>d435941dex105.htm
<DESCRIPTION>PERSONAL GUARANTY
<TEXT>
<HTML><HEAD>
<TITLE>Personal Guaranty</TITLE>
</HEAD>
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 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Exhibit 10.5 </B></FONT></P> <P STYLE="margin-top:24px;margin-bottom:0px" ALIGN="center"><FONT
STYLE="font-family:Times New Roman" SIZE="2">PERSONAL GUARANTY </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">This PERSONAL GUARANTY (this &#147;<B>Guaranty</B>&#148;) is
made as of October&nbsp;31, 2012 by Francisco Clouthier, an individual (&#147;<B>Guarantor</B>&#148;), in favor of Calavo Growers, Inc., a California corporation (&#147;<B>Seller</B>&#148;). </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">1. <B><U>Guarantee of Notes</U></B><B>.</B> This Guaranty is executed in connection with the purchase of Seller&#146;s Membership
Interest (the &#147;<B>Membership Interest</B>&#148;) in Maui Fresh International, LLC, a California limited liability company (the &#147;<B>Company</B>&#148;), by San Rafael Distributing, Inc., an Arizona corporation (&#147;<B>Buyer</B>&#148;).
Guarantor is a shareholder, officer, and director of Buyer, and will benefit from the Buyer&#146;s purchase of the Membership Interest from Seller. Buyer executed two promissory notes in connection with its obligation to pay for its purchase of
Seller&#146;s Membership Interest; an Equity Secured Promissory Note in the original principal amount of $991,520 dated October&nbsp;31, 2012 (the &#147;<B>Equity Note</B>&#148;) and a Goodwill Secured Promissory Note in the original principal
amount of $1,337,694 dated October&nbsp;31, 2012 (the &#147;<B>Goodwill Note</B>&#148;). Together, the Equity Note and the Goodwill Note are referred to as the &#147;<B>Notes</B>&#148;; provided, however, that if only one Note is in default, all
references to the Notes hereunder shall refer solely to the Note that is in default. Guarantor hereby unconditionally and irrevocably guarantees full payment and performance by Buyer of all of Buyer&#146;s obligations under the Notes and any
modifications and extensions of either or both Notes (collectively, the &#147;<B>Obligations</B>&#148;). All capitalized terms used but not defined herein shall have the meanings ascribed to them in the Notes. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">2. <B><U>Purpose and Consideration</U>.</B> The execution and delivery of this Guaranty by Guarantor is a condition to Seller&#146;s
willingness to sell its Membership Interest to Buyer in consideration of the Notes, and Guarantor recognizes that Seller will rely upon this Guaranty. Guarantor has a significant employment and ownership interest in Buyer, and Buyer is becoming the
sole Member of the Company, and, accordingly, Guarantor acknowledges that Guarantor will receive material direct and indirect benefits from Buyer&#146;s purchase of Seller&#146;s Membership Interest in the Company and Buyer&#146;s execution of the
Notes. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">3. <B><U>Guarantee is Independent and Absolute</U>.</B> The obligations of Guarantor hereunder are independent of the
obligations of Buyer and of any other person who may become liable with respect to the Obligations. Guarantor is jointly and severally liable with Buyer and with any other guarantor for the full and timely payment and performance of all of the
Obligations. Guarantor expressly agrees that a separate action or actions may be brought and prosecuted against Guarantor (or any other guarantor), whether or not any action is brought against Buyer, any other guarantor, or any other person for any
Obligations guaranteed hereby and whether or not Buyer, any other guarantor, or any other persons are joined in any action against Guarantor. Guarantor further agrees that Seller shall have no obligation to proceed against any security for the
Obligations prior to enforcing this Guaranty against Guarantor, and that Seller may pursue or omit to pursue any and all rights and remedies Seller has against any person or with respect to any security in any order or simultaneously or in any other
manner. All rights of Seller and all obligations of Guarantor hereunder shall be absolute and unconditional irrespective of (a)&nbsp;any lack of validity or enforceability of the Notes, and (b)&nbsp;any other circumstances which might otherwise
constitute a defense available to, or a discharge of the Buyer in respect of, the Obligations, until full payment thereof. </FONT></P>

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 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">4. <B><U>Guarantee of Payment and Performance</U></B><B>.</B> Guarantor&#146;s liability
under this Guarantee is a guarantee of payment and performance of the Obligations and not of collectability, and is not conditioned or contingent upon the genuineness, validity or enforceability of the Notes, and Guarantor hereby waives any and all
benefits and defenses under Section&nbsp;2810 of the California Civil Code and agrees that by doing so Guarantor is liable even if Buyer had no liability at the time of execution of the Notes or thereafter ceases to be liable. Guarantor&#146;s
liability hereunder shall continue until all sums due under the Notes have been paid in full and shall not be limited or affected in any way by any impairment or any diminution or loss of value of any security or collateral for the Notes.
</FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">5. <B><U>Consents</U>.</B> Guarantor hereby consents to and waives notice of any extensions of time for performance which
Seller may grant to Buyer and to any modifications or amendments of the Notes or extensions or renewals of the terms thereof. Guarantor waives notice of any default in the payment of any amount due under the Notes. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">6. <B><U>Waivers by Guarantor</U>.</B> Guarantor hereby waives (1)&nbsp;presentment, demand, protest and notice of protest, notice of
dishonor and of non-payment, notice of acceptance of this Guarantee, and diligence in collection; (2)&nbsp;notice of the existence, creation, or incurring of any new or additional Obligations under the Notes; (3)&nbsp;any right to require Seller to
proceed against, give notice to, or make demand upon the Buyer; (4)&nbsp;any right to require Seller to proceed against or exhaust any security or to proceed against or exhaust any security in any particular order; (5)&nbsp;any right to require
Seller to pursue any remedy of Seller; (6)&nbsp;any right to direct the application of any security held by Seller; (7)&nbsp;any defense arising out of any disability or other defense of Buyer, including bankruptcy, dissolution, liquidation,
cessation, impairment, modification, or limitation, from any cause, of any liability of the Buyer, or of any remedy for the enforcement of such liability; (8)&nbsp;any statute of limitations affecting the liability of Guarantor hereunder; and
(9)&nbsp;any other defenses available to a surety under applicable law. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">7. <B><U>Bankruptcy Reimbursements</U>.</B> Guarantor
hereby agrees that if all or any part of the Obligations paid to Seller by Buyer or any other party liable for payment and satisfaction of the Obligations (other than Guarantor) are recovered from Seller in any bankruptcy proceeding, Guarantor shall
reimburse Seller immediately on demand for all amounts of such Obligations so recovered from Seller, together with interest thereon at the default rate set forth in the Notes from the date such amounts are so recovered until repaid in full to
Seller, and, for this purpose, this Guarantee shall survive repayment of the Notes. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">8. <B><U>Jurisdiction and Venue</U>.</B>
Jurisdiction and venue shall be in the County of Los Angeles, State of California. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">9. <B><U>Assignability</U>.</B> This
Guarantee shall be binding upon Guarantor and Guarantor&#146;s heirs and representatives and shall inure to the benefit of Seller and Seller&#146;s successors and assigns. </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">2 </FONT></P>


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 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">10. <B><U>Payment of Costs of Enforcement</U>.</B> In the event any action or proceeding is
brought to enforce this Guarantee, Guarantor shall pay all reasonable costs and expenses of Seller in connection with such action or proceeding, including, without limitation, reasonable attorneys&#146; fees incurred by Seller. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">11. <B><U>Notices</U>.</B> Any notice required or permitted to be given by Guarantor or Seller under this Guarantee shall be in writing
and will be deemed given (a)&nbsp;upon personal delivery, (b)&nbsp;on the first business day after receipted delivery to a courier service which guarantees next-business day delivery, or (c)&nbsp;on the third business day after mailing, by
registered or certified United States mail, postage prepaid, in any case to the appropriate party at its address set forth below: </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; margin-left:8%"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><B>To Seller</B>: </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; margin-left:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Calavo Growers Inc. </FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px; margin-left:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2">1141A Cummings Road </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:8%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">Santa Paula, California 93060 </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Attention: Chief Financial Officer </FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px; margin-left:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Fax: (805)&nbsp;921-3287 </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; margin-left:8%"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><B>To Guarantor:</B> </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; margin-left:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Francisco Clouthier </FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px; margin-left:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2">San Rafael Distributing, Inc. </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:8%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">1601 East Olympic Avenue, Bay 509-510 </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Los Angeles, California 90021 </FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px; margin-left:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Fax: (213)&nbsp;688-9768 </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">Either party may change such party&#146;s address for notices or copies of notices by giving notice to the other party in accordance with this Section&nbsp;11. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">12. <B><U>Severability of Provisions</U></B>. If any provision hereof shall be invalid or unenforceable, then such provision shall be
limited to the extent required to make it valid and enforceable, and, if required, severed from this Guaranty, and the remainder of the document shall remain in full force and effect. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">13. <B><U>Waiver</U></B>. Neither the failure of Seller to exercise any right or power given hereunder or to insist upon strict
compliance by Buyer, Guarantor, any other guarantor, or any other person with any of its obligations set forth herein or in the Note shall constitute a waiver of Seller&#146;s right to demand strict compliance with the terms and provisions of this
Guaranty. </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">3 </FONT></P>


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 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">14. <B><U>Applicable Law</U></B>. This Guaranty and the rights and obligations of the
parties hereunder shall be governed by and interpreted in accordance with the internal laws of the State of California, without regard to conflict of law principles. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">IN WITNESS WHEREOF, Guarantor has executed this Guarantee as of the day and year first above written. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">GUARANTOR: </FONT></P> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TD VALIGN="top"> <P STYLE="margin-top:0px;margin-bottom:1px;border-bottom:1px solid #000000"><FONT STYLE="font-family:Times New Roman" SIZE="2">/s/ Francisco Clouthier</FONT></P></TD></TR>
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<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Francisco Clouthier</FONT></TD></TR>
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