Exhibit 10.66

 

March 25, 2009

 

CONFIDENTIAL

 

ML Macadamia Orchards, L.P.

ML Resources, Inc.

238 Hawaii Belt Road

Hilo, Hawaii  96720

 

Attention:  Dennis Simonis

 

Re:  Revolving Line of Credit Maturity Date Extension and Amendment

 

Ladies and Gentlemen:

 

American AgCredit, PCA (“Lender,” “we” or “us”), is pleased to commit to provide
an extension of the Maturity Date of the Revolving Loan Promissory Note and an
amendment to the Second Amended and Restated Credit Agreement dated July 8, 2008
(the “Credit Agreement” and combined with the amendment and extension, the
“Amended Revolving Facility”), on the terms and subject to the conditions set
forth in this letter and the Summary of General Terms attached hereto
(collectively, the “Commitment Letter”).  Capitalized terms used in this
Commitment Letter without definition shall have the meanings ascribed to them in
the Credit Agreement.  The purpose of the Amended Revolving Facility is to
provide financing for the general business purposes of ML Macadamia Orchards,
L.P.

 

By execution and return of this Commitment Letter you agree that you will be
jointly and severally responsible for and will pay all reasonable out-of-pocket
fees, costs, and expenses which may be incurred by Lender and its affiliates and
agents in connection with this Commitment Letter and the Amended Revolving
Facility, including reasonable fees, costs, and expenses of counsel, title fees
as well as recording and filing fees, (collectively, the “Reimbursable
Expenses”).  The Reimbursable Expenses shall be payable by you to us regardless
of whether the financing transaction shall be consummated.

 

You understand that Lender intends to participate the Amended Revolving Facility
to other institutions and you agree to provide such cooperation with Lender’s
efforts to do so as Lender may reasonably request, it being understood, however,
that successful participation of the Amended Revolving Facility is not a
condition to Lender’s commitment hereunder.

 

You jointly and severally agree to (a) indemnify and hold harmless Lender and
its affiliates, officers, directors, employees, attorneys, advisors, and agents
(each an “Indemnified Person”) from and against any losses, claims, damages,
liabilities or other expenses to which an Indemnified Person may become subject,
insofar as such losses, claims, damages, liabilities (or actions or other
proceedings commenced or threatened in respect thereof) or other expenses arise
out of or in any way relate to or result from this Commitment Letter, the
Amended Revolving Facility, the payment of fees and expenses in connection with
the foregoing, the extension of the financing contemplated hereby, and the other
transactions contemplated by this Commitment Letter or any use or intended use
of the proceeds of the extension of credit contemplated hereby, (b) reimburse
each Indemnified Person, upon such Indemnified Person’s demand, for any
reasonable legal or other expenses incurred in connection with investigating,
defending or participating in any such loss, claim, damage, liability, or action
or other proceeding, whether

 

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commenced or threatened (whether or not any such Indemnified Person is a party
to any action or proceeding out of which any such expenses arise), except, with
respect to both clauses (a) and (b) above, in the case of any Indemnified
Person, to the extent that it is determined in a final nonappealable judgment by
a court of competent jurisdiction that such losses, claims, damages, liabilities
or other expenses are caused by the gross negligence or willful misconduct of
such Indemnified Person or its affiliates, officers, directors, attorneys,
advisors, or agents, and (c) provide Lender and its affiliates with all
information required for its due diligence analysis of any such indemnified
matter, regardless of when, by whom, or for whom prepared.  The obligations to
indemnify each Indemnified Person and to pay such legal and other expenses shall
remain effective until the initial funding under a definitive financing
agreement and thereafter the indemnification and expense reimbursement
obligations contained herein shall be superseded by those contained in such
definitive financing agreement.  No Indemnified Person shall be liable for any
damages arising from the use by others of information or other materials
obtained through the internet, Intralinks or similar information transmission
systems in connection with the Amended Revolving Facility.  The foregoing
provisions of this paragraph shall be in addition to any rights that any
Indemnified Person may have at common law or otherwise.  Your obligation to so
indemnify such Indemnified Persons and pay such expenses shall remain effective
regardless of whether a definitive financing agreement is executed.  By your
acceptance of this Commitment Letter, you agree that neither Lender nor any
other Indemnified Person shall be responsible or liable to any other party
hereto or any other person for consequential, indirect, punitive, or exemplary
damages which may be alleged as a result of this Commitment Letter or the
transactions contemplated hereby, except to the extent that such damages are
caused by the gross negligence or willful misconduct of such Indemnified Person
or its affiliates, officers, directors, attorneys, advisors, or agents.  The
provisions of this paragraph shall be in addition to any rights that Lender or
any other Indemnified Person may have at common law or otherwise, including any
right of contribution.

 

The commitment of Lender hereunder shall remain in effect until the earlier of: 
(a) June 30, 2009, or (b) Lender’s written notice to you that (i) a condition
described in this Commitment Letter cannot be satisfied, (ii) you have failed to
perform any material obligations under this Commitment Letter, (iii) there is
filed against the Borrower or any member thereof, a petition in bankruptcy or
insolvency or for reorganization or the appointment of a receiver, trustee or
liquidator, (iv) a change that has occurred that has a Material Adverse Effect
on the financial condition of the Borrower, or (v) the macadamia orchards owned
by ML Macadamia Orchards, L.P. have suffered any material damage or destruction
and the same is not restored to the satisfaction of Lender prior to the Closing
Date, and that Lender has terminated its commitment hereunder by reason
thereof.  Notwithstanding the expiration or termination of Lender’s commitment
with respect to providing financing hereunder, the provisions set forth herein
with respect to the payment of fees and expenses, confidentiality,
indemnification, governing law, consent to jurisdiction and venue and the jury
trial waiver shall survive such expiration or termination.

 

This Commitment Letter is confidential and shall not be disclosed by any of the
parties hereto to any person other than such party’s accountants, attorneys and
other advisors, and, in the case of Lender, its affiliates and prospective
participants, and then only on a confidential basis and in connection with the
Amended Revolving Facility.  Any disclosure to an advisor may be made for the
sole purpose of evaluating and advising on the offer of financing made in this
letter and may not be used by such advisor in formulating any offer of financing
by such advisor or an affiliate.  Additionally, any of the parties hereto may
make such disclosures of this letter as are required by regulatory authority,
law or judicial process or as may be required or appropriate in response to any
summons or subpoena or in connection with any litigation; provided that such
party will use its commercially reasonable efforts to notify the other parties
hereto of any such disclosure prior to making such disclosure.

 

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We hereby notify you that pursuant to the requirements of the USA PATRIOT Act,
Title III of Pub. L. 107-56 (signed into law October 26, 2001) (the “Act”), we
may be required to obtain, verify and record information that identifies you,
which information would include name and address and other information that
would allow us to identify you in accordance with the Act.

 

By your acceptance of this Commitment Letter, you agree that this Commitment
Letter supersedes any and all discussions, negotiations, understandings or
agreements, written or oral, express or implied, between Lender and you.  This
Commitment Letter may not be contradicted by evidence of any actual or alleged
prior, contemporaneous, or subsequent understandings or agreements of the
parties, written or oral, express or implied, other than a writing, which
expressly amends or supersedes this Commitment Letter.  All other writings
issued by Lender to you are null and void and of no effect.  There are no
unwritten oral understandings or agreements between the parties.

 

This Commitment Letter shall be governed by, and construed in accordance with,
the internal laws of the state of California without reference to principles of
conflict of laws.  The parties hereto submit to the exclusive jurisdiction of
the Federal and California State courts located in the City of San Francisco in
connection with any dispute related to this Commitment Letter or any of the
matters contemplated hereby or thereby.

 

You acknowledge and agree that in connection with all elements of the
transaction contemplated under this Commitment Letter, (i) neither Lender nor
any of its affiliates has assumed any advisory responsibility or any other
obligation in favor of the Borrower except the obligations expressly provided
for under this Commitment Letter, and (ii) Lender and its affiliates, on the one
hand, and the Borrower, on the other hand, have an arms-length business
relationship that does not directly or indirectly give rise to, nor do you or
any of the Loan Parties rely on, any fiduciary duty on the part of Lender or any
of its affiliates.

 

Because disputes arising in connection with complex financial transactions are
most quickly and economically resolved by an experienced and expert person and
the parties wish applicable state and federal laws to apply (rather than
arbitration rules), the parties desire that their disputes be resolved by a
judge applying such applicable laws.  Therefore, to achieve the best combination
of the benefits of the judicial system and of arbitration (without submitting to
arbitration), the parties hereto waive all right to trial by jury in any action,
suit, or proceeding brought to enforce or defend any rights or remedies under
this Commitment Letter or any of the definitive loan documentation, whether
arising under contract or tort or otherwise.

 

This Commitment Letter and the duties and obligations contained herein shall be
solely for the benefit of the parties hereto and their affiliates, and no third
party shall rely upon, or have any rights under, this Commitment Letter as a
third party beneficiary or otherwise.

 

This Commitment Letter may be executed in counterparts, each of which shall be
deemed an original and all of which counterparts shall constitute one and the
same document.  As used in this Commitment Letter, the term “including” shall
not be construed as a limitation.

 

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If the terms of this Commitment Letter are acceptable to you, we ask that you
return an executed copy of this Commitment Letter to Lender at the address set
forth on the first page of this Commitment Letter.  This Commitment Letter shall
become effective only if this Commitment Letter is signed by you and delivered
to Lender by no later than 5:00 p.m. (Pacific Standard Time) on March 31, 2009. 
This Commitment Letter shall be deemed withdrawn and no further effect if not
accepted by you in such manner by such date and time.

 

We look forward to continuing to work with you on this transaction.

 

 

Sincerely,

 

 

 

AMERICAN AGCREDIT, PCA

 

 

 

 

 

By:

/s/ Vern Zander

 

 

 

 

Title:

Vice President

 

 

Agreed to and Accepted

 

this 25th day of March, 2009

 

 

 

ML MACADAMIA ORCHARDS, L.P., a

 

Delaware limited Partnership

 

 

 

By:

ML RESOURCES, INC., a Hawaii

 

 

corporation, its managing general partner

 

 

 

 

 

 

 

 

By:

/s/ Dennis J.Simonis_

 

 

 

 

 

 

Name:

Dennis J. Simonis

 

 

 

 

 

 

Title:

President

 

 

 

 

 

 

 

 

 

ML RESOURCES, INC., a Hawaii corporation

 

 

 

 

By:

/s/ Dennis J. Simonis

 

 

 

 

Name:

Dennis J. Simonis

 

 

 

 

Title:

President

 

 

 

 

 

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ML MACADAMIA ORCHARDS, L.P.

SUMMARY OF GENERAL TERMS

Amendment to the Second Amended and Restated Credit Agreement dated July 8, 2008

 

MARCH 25, 2009

 

SUMMARY OF GENERAL TERMS:  THE FOLLOWING DESCRIBES THE PROPOSED AMENDMENT TO THE
SECOND AMENDED AND RESTATED CREDIT AGREEMENT DATED JULY 8, 2008 (THE “EXISTING
CREDIT FACILITY”), BY AND BETWEEN ML MACADAMIA ORCHARDS, L.P., ML
RESOURCES, INC., (COLLECTIVELY, THE “BORROWER”) AND AMERICAN AGCREDIT, PCA, (THE
“LENDER”).  MORE SPECIFICALLY, THE BORROWER HAS REQUESTED AN EXTENSION OF THE
REVOLVING LOAN THAT HAS A MATURITY DATE OF JUNE 30, 2009.   THE LENDER HAS
PROPOSED AN EXTENSION OF THE REVOLVING LOAN SUBJECT TO THE TERMS DESCRIBED
HEREINBELOW.  UNLESS OTHERWISE PROVIDED FOR HEREINBELOW, THE AMENDMENT TO THE
SECOND AMENDED AND RESTATED CREDIT AGREEMENT (“AMENDMENT”) WILL CONTAIN
SUBSTANTIALLY THE SAME TERMS AND CONDITIONS DEFINED IN THE EXISTING CREDIT
FACILITY.

 

PARTIES

 

 

Borrower:

ML Macadamia Orchards, L.P., a Delaware Limited Partnership (“MLO”); and ML
Resources, Inc., a Hawaii Corporation, the Managing General Partner
(collectively, the “Borrower”).

 

 

 

 

Lender:

American AgCredit, PCA (“Lender”)

 

 

 

AMOUNTS AND TERMS OF THE FACILITY

 

 

 

 

Single Facility:

The credit facility contemplated herein (the “Restated Credit Facility”) is a
single facility consisting of two components including a revolving loan (the
“Renewed Revolving Loan”) and the existing amortizing loan (the “Existing
Amortizing Term Loan”).

 

 

 

 

Aggregate

 

 

Commitment:

Renewed Revolving Loan

 

$

5,000,000

 

 

 

 

Existing Amortizing Term Loan

 

800,000

*

 

 

 

Aggregate Commitment

 

$

5,800,000.

 

 

 

 

 

 

 

 

 

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*The Existing Amortizing Term Loan has a payment of $400,000 due on May 1, 2009.

 

 

 

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Closing Date:

All references to closing in this Summary of General Terms shall mean the
initial disbursement by Lender under the Amendment (“Closing”) and the date of
such disbursement shall be on or before June 30, 2009 (the “Closing Date”, or
“Renewal Date”).

 

 

 

Renewed Revolving

Loan:

 

 

 

 

Amount:

$5,000,000.

 

 

 

 

Maturity:

364 days from the Closing Date

 

 

 

 

Purpose:

Proceeds of the facility will be used for general business purposes of MLO.

 

 

 

 

Borrowing

 

 

Terms:

Requests for advances shall be subject to Borrower’s compliance with all loan
terms and conditions and for the purposes described hereinabove.

 

 

 

Existing Amortizing

 

Term Loan:

No Changes unless specified in the Summary of General Terms.

 

 

 

FEES, INTEREST RATES AND PAYMENTS

 

 

 

 

Loan Fee:

Borrower shall pay to Lender, on the Closing Date, a one-time loan fee of
$25,000, equal to the sum of .50% of the aggregate commitment under the Renewed
Revolving Loan.

 

 

 

 

Unused

 

 

Commitment Fee:

There shall be no Unused Commitment Fee charged on the Renewed Revolving Loan.

 

 

 

Interest Rate Options:

 

 

 

 

   Renewed Revolving

   Loan and Existing

   Amortizing Term Loan:

 

 

 

 

Variable Rate:

Absent a conversion (as described below), the interest rate (the “Base Rate”)
shall be a floating rate of interest equal to the “Prime Rate” plus a margin of
one percentage point (100 basis points). “Prime Rate” means the “Prime” rate as
published from time to time in The Wall Street Journal, regardless of whether
such rate is actually charged by any bank. Interest accrued at the Base Rate
will be paid quarterly in arrears on the first business day of each quarter.
Interest will be calculated based on a 365-day year and the actual number of
days elapsed in any month.

 

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   Renewed Revolving

 

   Loan:

 

 

 

 

 

Fixed Rate:

From time to time, so long as no default has occurred and is continuing,
Borrower may elect to convert all or portions of the Renewed Revolving Loan to a
fixed interest rate(s), in minimum principal amounts of $50,000 for periods of
one month, two months, three months, or six months, provided the Fixed Rate
Period selected does not exceed the final maturity date of the Renewed Revolving
Loan. The maximum number of open Fixed Rate tranches at any one time shall be
five.

 

 

 

 

Fixed Rate

 

 

Index:

The Fixed Rate Periods of one, two, three, and six months shall be indexed to
the London Interbank Offered Rate (LIBOR) of a like maturity, plus a margin of
three and one quarters of one percentage point (325 basis points). Interest
accrued at the Fixed Rate shall be payable on a quarterly basis, or at such
earlier time as a Fixed Rate tranche shall mature. Interest accrued under the
LIBOR option shall be calculated based on a 360-day year and the actual days
elapsed in any month.

 

 

 

 

Interest Rate

 

 

Floor:

Regardless of the Base Rate or Fixed Rate discussed above, the interest rate of
the revolver shall in no case be lower than 4.00%.

 

 

 

COLLATERAL

 

 

 

 

Security:

The Restated Credit Facility shall continue to be secured by senior perfected
security interests in all personal property assets of Borrower including farm
products, crops growing or to be grown, inventory, accounts, equipment,
fixtures, contract rights, documents of title and other intangible property. In
addition, The Restated Credit Facility shall continue to be secured by a first
priority perfected mortgage and assignments of rents on certain properties owned
by the Borrower. Borrower shall pay the cost of any title searches and
endorsements associated with this extension.

 

 

 

 

Debt Secured:

All of the above referenced personal property and real property shall secure
both the Renewed Revolving Loan and the Existing Amortizing Term Loan.

 

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CONDITIONS AND COVENANTS

 

Covenants shall include the following and such other covenants as shall be
reasonably required by Lender.

 

Pre-Closing Conditions:

 

 

Generally:

Prior to the Closing Date, Lender shall have received the following: (i) current
interim and fiscal year-end financial information; (ii) all updated pro-forma
financial information; (iii) all public filings and disclosures; (iv) evidence
of receipt of all necessary government approvals; (v) required certifications
including, but not limited to, compliance with all laws, payment of all taxes
and satisfaction of all insurance requirements; and (vi) such legal opinions as
may reasonably be required by Lender.

 

 

 

 

Nut Sale

 

 

Contract:

Delivery to Lender of an executed nut sale contract for the 2009-2010 year
(July 1, 2009 to June 30, 2010) in form and content satisfactory to Lender.

 

 

 

 

No Adverse

 

 

Effect:

No change has occurred that has a Material Adverse Effect in the business,
condition (financial or otherwise), operations, performance, or properties of
Borrower shall have occurred or exist.

 

 

 

 

Loan

 

 

Documents

 

 

(Generally):

The loan documents will contain representations and warranties, indemnities,
financial reporting, and affirmative and negative covenants by Borrower, such as
the case may be, and provide for conditions, events of default, and remedies,
all as customarily required for transactions of this type or as otherwise deemed
reasonably necessary or appropriate by Lender.

 

 

 

 

Expense

 

 

Reimbursement:

Borrower shall reimburse the Lender for reasonable and customary expenses
incurred in connection with the negotiation and funding of the Restated Credit
Facility, including attorney fees and costs, UCC searches, filing and recording
fees, title insurance costs, appraisal fee (if required), and other similar
out-of-pocket expenses.

 

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CONTINUING COVENANTS AND CONDITIONS

 

   Financial

 

   Reporting:

As described in the Existing Credit Facility:

 

 

 

   Negative Covenants:

 

 

 

 

Restricted

 

 

Payments:

Borrower may not make or commit to make Restricted Payments, unless otherwise
approved by Lender.

 

 

 

 

Other Negative

 

 

Covenants:

Other Negative Covenants as described in the Existing Credit Facility.

 

 

 

   Financial Covenants:

 

 

Generally:

Compliance with financial covenants shall be measured as of the end of each
fiscal quarter based on a consolidation of MLO and its Subsidiaries (if
applicable), said which shall be prepared in accordance with GAAP.

 

 

 

 

Minimum

 

 

Consolidated

 

 

EBITDA:

Commencing on September 30, 2009, MLO shall have Consolidated EBITDA of not less
than $1,500,000 for the four quarters ended September 30, 2009 and thereafter.

 

 

 

 

Minimum

 

 

Tangible

 

 

Net Worth:

MLO shall not permit its Tangible Net Worth, as of the last day of any Fiscal
Year beginning with the fiscal year ending December 31, 2007, to be less than
the applicable “Minimum Tangible Net Worth Amount.” The Minimum Tangible Net
Worth Amount shall initially be Forty-One Million Dollars ($41,000,000.00) and
shall be increased dollar for dollar by the amount of positive Consolidated Net
Income achieved by MLO, beginning January 1, 2008 and thereafter.”

 

 

 

   Events of

 

   Default:

Typical for credit facilities and transactions of this nature and others
reasonably specified by the Lender, including without limitation (subject to
customary grace periods when appropriate), nonpayment of principal, interest,
fees or other amounts, violations of covenants, material inaccuracy of
representations and warranties, cross-defaults, bankruptcy, material judgments,
ERISA, actual or asserted invalidity of any loan documents, security interests
or subordination provisions.

 

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OTHER TERMS

 

 

Farm Credit

 

 

Stock:

Borrower will be required to maintain its $1,000 of stock in AAC.

 

 

 

 

Representations,

 

 

Warranties and

 

 

Indemnity:

Typical for facilities and transactions of this nature and others to be
reasonably specified by the Lender.

 

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