EX-10.2 3 d435941dex102.htm EQUITY SECURED PROMISSORY NOTE Equity Secured Promissory Note

Exhibit 10.2




   October 31, 2012

FOR VALUE RECEIVED, the undersigned, San Rafael Distributing, Inc., an Arizona corporation (the “Borrower”), promises to pay to the order of Calavo Growers, Inc., a California corporation (the “Holder”), 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’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.

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 1, 2012. By way of example, if the average of Holder’s two credit facility costs for the month of November 2012 is 1.75%, the accrued interest due and payable on December 1, 2012 (together with the monthly installment of principal), would be $1,445.97 ($991,520 x 1.75% = $17,351.60 ÷ 12 = $1,445.97). The entire amount of principal and all accrued and unpaid interest shall be due and payable on November 1, 2015.

This Promissory Note is given to the Holder in connection with the Borrower’s purchase of Holder’s membership interest in Maui Fresh International, LLC, a California limited liability company (the “Company”) pursuant to the Sale of LLC Interest Agreement dated as of October 31, 2012 (the “Sale Agreement”). Pursuant to the Sale Agreement, Borrower is also entering into a second promissory note (the “Goodwill Note”).

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 “Security Agreement”) 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.

Payment and performance of this Note is absolutely and unconditionally guaranteed by Francisco Clouthier on the terms of the Guarantee executed concurrently herewith.

Each payment made under this Promissory Note shall be applied (i) 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) second, to accrued interest, and (iii) 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%) per annum (the “Default Rate”). Nothing in the preceding sentence shall be interpreted as a waiver or limitation of the Holder’s right to compel payment of all amounts hereunder when due and payable.



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.

The Borrower’s failure to (i) pay when due any principal, accrued interest or other amount owed under this Promissory Note or under the Goodwill Note, or (ii) 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) or (ii) is not remedied in full within ten (10) days after receipt of written notice from the Holder, shall constitute an “Event of Default.”

Upon the occurrence of an Event of Default, the Holder shall have the right, at its sole option, at any time thereafter, (i) 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) 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) 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.

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’ 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’ fees and other costs and expenses incurred in connection therewith.

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.

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’s option, be applied to the reduction of the unpaid principal balance of this Promissory Note or returned to the Borrower.

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.

IN WITNESS WHEREOF, the Borrower has executed and delivered this Promissory Note as of the date first written above.


San Rafael Distributing, Inc., an Arizona corporation

                /s/ Francisco Clouthier

                      Francisco Clouthier
Its:   President and Secretary