Exhibit 10.93

 

Macadamia Nut Processing Agreement

 

ML Macadamia Orchards, L.P. & Buderim Macadamias of Hawaii, LLC

 

I.                                        Preamble.

 

This Macadamia Nut Processing Agreement is entered into on the date set forth
below by and between ML Macadamia Orchards, L.P., a Delaware Partnership
(“MLMO”) whose address is 26-238 Hawaii Belt Rd., Hilo, HI 96720, and Buderim
Macadamias of Hawaii, LLC, a Hawaii Limited Liability Company, dba MacFarms of
Hawaii (“MFH”) whose address is 89-406 Mamalahoa Highway, Captain Cook, HI
96704.

 

Whereas, MFH is experienced and capable in all aspects of the business of
processing macadamia nuts;

 

Whereas, MLMO is the legal and beneficial owner of macadamia nut crop produced
in certain macadamia nut orchards in Hawaii;

 

Whereas, MLMO desires to engage MFH to process between 1,500,000 and 7,000,000
pounds of wet-in-shell (“WIS”) macadamia nuts into kernel and MFH desires to
process such macadamia nuts from MLMO, as provided herein;

 

Now, therefore, in consideration of the promises and mutual covenants and
agreements set forth herein, the parties agree as follows:

 

II.                                   Term.

 

This Agreement shall be deemed to have commenced for all purposes as of
January 1, 2013 and shall continue in full force and effect until December 31,
2013 unless terminated earlier as provided herein.

 

III.                              Delivery and Sampling.

 

MLMO shall arrange for the delivery of macadamia nuts in containers suitable for
transport as mutually agreed upon and deliver wet-in-shell (“WIS”) nuts to MFH’s
processing plant located at Captain Cook, Hawaii. MLMO or its representative
will provide MFH with a numbered delivery receipt for each load delivered. This
delivery receipt number will be the basis for tracking and providing relevant
processing data for each load.

 

Upon acceptance, the WIS will be weighed by MacFarms on their weigh bridge at
the site and a copy of the weighbridge record showing the MLMO delivery receipt
number will be signed by the Driver of the vehicle making the delivery and
mailed to MLMO as soon as is practical.

 

Alternatively, MFH will accept a certified public weighbridge record of the
weight and record this on the numbered delivery receipt as the official record
of the weight of the delivery from MLMO.

 

After weighing, WIS deliveries will be unloaded into the receiving bin at the
MacFarms dehusking station. The automatic sampler installed at the station that
takes a continuous sample of the WIS as it is unloaded from the receival bin
will be used to take four (4) samples from approximately each quarter of the
load as it is unloaded. Each of the four continuous samples will then be mixed
and two 5 gallon bucket sub samples will be collected from each of the samples
and labeled with the MLMO delivery number, the continuous number 1, 2, 3, or 4
to represent the relevant quarter of the load, and the letter A or B to
represent the two subsamples taken from each of the four continuous samples.

 

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In each case Subsample A will be used to provide one 250 gram sample for
Extraneous Matter and Moisture Determinations and one 500 gram sample for
Quality Analysis. The Extraneous Matter — Moisture samples and the Quality
Samples will be delivered to the MacFarms laboratory for determination of
MacFarms standard NIS analyses for extraneous matter, moisture content and
kernel recovery data. The results of the four tests from each delivery number
will be averaged and the average result will be accepted as the laboratory test
results for that individual delivery. The procedures to be used in sampling for
moisture, extraneous matter (spoilage), and salable kernel recovery and in
calculating the net kernel weight owed to MLMO from the processing are set forth
in Schedule A — Sampling and Testing Procedure., Page 8.

 

In each case the Subsamples labeled B will be retained as a ‘check’ samples in
the event that there is a dispute over the results for Sample A. The ‘check’
sample will be kept until the processing of the load to which it applies is
completed and until the resultant kernel is returned to and accepted by MLMO.

 

Following sampling, the NIS will be delivered direct into a drying silo after
Hand sorting to remove extraneous matter that may be detrimental to the
processing equipment such as rocks, sticks, etc. Further treatment of the WIS
such as hand sorting of defective nuts and unhusked nuts or water sorting will
not be undertaken unless MLMO specifically instructs MFH to undertake these
treatments.

 

If additional treatments are required by MLMO then MFH will keep a record of the
weight of any material extracted from the delivery and record this against the
MLMO delivery number.

 

Multiple deliveries from MLMO may be placed together in a silo but the entire
amount of any individual delivery must be in one silo so that processing data
can be attributed to a delivery number or a group of delivery numbers. .

 

MLMO and MFH will agree that the net weight of WIS delivered and recorded
against the individual delivery number will be the weight of WIS shown on the
weigh bridge docket for the delivery less deduction of any extraneous material
as defined in Schedule A and less any other material that is hand or water
sorted out of the product by MFH on instructions from MLMO. MFH will record the
net wet-in-shell weight of each delivery against the appropriate delivery
number.

 

MFH will determine the moisture content and the salable kernel recovery of the
macadamia nuts delivered to it by MLMO with as much accuracy as is reasonably
practicable and as set out in Schedule A — Sampling and Testing Procedure.,
Page 8.

 

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IV.                               Processing of Macadamia Nuts.

 

A.                      General Overview.

 

MFH shall use industry acceptable methods to receive, weigh, sample, dry, crack,
remove shell from WIS nuts and sort, inspect, roast and package macadamia
kernels as agreed upon by both parties.  It is the intention of the parties that
the quantities of specific Styles and products of macadamia kernel processed and
made available in total under this Agreement shall be in the ratios and
percentages as set forth in Schedule B — Kernel Recovery and Pack Out., Page 11.

 

During the packing process, MFH will collect a 250 gram kernel sample from
approximately the beginning, and the end of packout of each pallet. The two
samples will be mixed into a composite sample and the composite sample will be
assessed for compliance with the in process physical parameters as outlined in
Schedule C — Process Analysis., Page 12.

 

During the packing process, MFH will collect a 250 gram kernel sample from
approximately the beginning, the middle, and the end of packout of each pallet.
The three samples will be mixed into a composite sample and the composite sample
divided into samples A and B and labeled with the applicable pallet number and
date code. Sample A will be used for quality analysis and Sample B will be kept
as a ‘check’ sample for 3 months after processing.

 

MFH will analyze Sample A for compliance with biological parameters as outlined
in Laboratory Assessments in Schedule C — Process Analysis., Page 12.

 

V.                                    Processing Fee.

 

MLMO shall pay MFH a processing fee of $1.30 per kernel pound of nuts processed
plus applicable Hawaii general excise tax for the first 300,000 pounds of kernel
produced. MLMO shall pay MFH a processing fee of $1.20 per kernel pound of nuts
processed plus applicable Hawaii general excise tax for any additional pounds of
kernel produced above 300,000 pounds. Payment shall be due within 30 days of
shipping of kernel from MFH’s processing plant. In the event that any payment
hereunder is not made when it becomes due, the unpaid amount shall bear interest
at 6.5% per annum.

 

VI.                               Accounting and Reports.

 

MFH shall keep full and accurate records and accounts showing, among other
things, dates of delivery and weight of nuts (WIS by delivery number) from each
delivery, and all other information that may be necessary or desirable in order
to calculate and verify quantities of kernel processed, shipped and on hand and
amounts owed under this Agreement. To the extent that information is provided to
either party hereunder and is not otherwise in the public domain, both parties
agree to keep such information confidential except as may be required by law or
in connection with any litigation between MLMO and MFH. Each party agrees to
return to the other party any copies of trade secrets or proprietary market
information within a reasonable time after such information is provided.

 

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As soon as practicable after the end of each week, MFH will provide written or
electronic reports to MLMO describing all deliveries, weights, quality analysis
results and shipments under this Agreement during such week.

 

VII.                          Shipping.

 

MFH will load finished kernel into shipping containers at its processing
facility and ship kernel to a location or locations as designated by MLMO. 
Payment for shipping from MFH’s loading dock to designated destination will be
the responsibility of MLMO.

 

MLMO shall retain ownership of its macadamia shell, FOB MFH factory, and will be
responsible for pick-up and hauling costs.

 

VIII.                     Termination.

 

The parties may terminate this Agreement at any time by mutual agreement in
writing. In addition, either party may terminate this agreement upon the sale of
either MLMO or MFH.

 

In the event that any party shall be in default (as defined below), the
non-defaulting party may terminate this Agreement at any time by delivering
written notice of such termination to the defaulting party. Unless terminated
earlier, this Agreement shall terminate at the close of business on December 31,
2013.

 

A party shall be in “default” under this Agreement in the event that

 

(i)                                     It files any voluntary proceeding for
dissolution or under any federal or state bankruptcy, insolvency, receivership
or similar law;

 

(ii)                                  Any such proceeding is commenced against
it involuntarily and is not dismissed within 60 days;

 

(iii)                               It makes any composition with or assignment
for the benefit of its creditors;

 

(iv)                              It enters into any corporate reorganization or
acquisition without making adequate provision for the performance of its
obligations under this Agreement;

 

(v)                                 It fails to perform any of its obligations
when due under this Agreement and it fails to correct such non-performance
within 30 days after written demand for performance is made by the other party.

 

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IX.                              Notice.

 

For convenience of operation hereunder, both MLMO and MFH shall designate one
representative to serve as the channel of communication for delivering
information to and securing necessary action by its principals. Any party may
change its representative from time to time by delivering written notice of such
change to the other party. Until further notice is given, each party’s
representative shall be the person listed in the notice address below.

 

Any and all notices, demands, or other communications (collectively, “notice”)
requiring or desired to be given hereunder by either party shall be in writing
and shall be validly given or made to the other party or his authorized
representative at the address set forth below, if served either personally or if
deposited in the United States mails, certified or registered, postage prepaid,
or if sent by fax.

 

MLMO: ML Macadamia Orchards, L.P.

26-238 Hawaii Belt Rd.

Hilo, Hawaii 96720

Attention: President

Fax number: 808-969-8052

 

MFH: Buderim Macadamias of Hawaii, LLC

89-406 Mamalahoa Highway

Captain Cook, Hawaii 96704

Attention: Operations Manager

Fax number: 808 328-8081

 

If such notice is delivered personally, service shall conclusively be deemed to
have been made at the time of such delivery. If such notice is given by mail,
service shall conclusively be deemed to have been made 72 hours after deposit
thereof in the mail as provided for above. If such notice is given by fax,
service shall conclusively be deemed to have been made 24 hours after the
transmission thereof and receipt of the proper response code. Any party may
change its address for the purpose of receiving notices as herein provided by a
written notice given to the other party.

 

X.                                   Right to Inspect.

 

MFH, upon reasonable notice, shall allow MLMO to observe, inspect or audit
processing and laboratory operations and MLMO shall be notified by MFH of any
material deviations from established procedures during the processing of its
production. MLMO shall not make any requests of MFH staff or give MFH staff any
instructions during observance and inspection of MFH Processing or Laboratory
operations.

 

XI.                              Force Majeure.

 

Neither of the parties hereto shall be liable or accountable to the other party
for any delay in complying or any failure to comply with any of the terms,
provisions or conditions of this Agreement in the event that such failure shall
have been caused by an act of God, strike, lockout, public enemy, war, civil
commotion, riot, condemnation, judicial or governmental order or other
requirements of law which directly prohibit the

 

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performing by either party of the obligations hereunder (such as, but not
limited to, governmental regulations concerning the hazards of marketing or
consumption of macadamia nuts) or the refusal or failure of any governmental
office or officer to grant any permit or order necessary for compliance herewith
by either party hereto, nor shall either of the parties hereto be liable or
accountable to the other party for any damages arising from any such delay or
failure.

 

XII.                         Waiver.

 

The failure of either party to enforce its rights upon any default on the part
of the other party shall not be construed as a waiver thereof, nor shall any
custom or practice which may grow up between the parties in the course of
administering this Agreement be construed to waive or to lessen the right of
either party to demand performance by the other party or exercise its rights in
the event of default. No provision of or default under this Agreement may be
waived except by a notice in writing signed by the party making the waiver. A
waiver by either party of a particular default shall not be deemed to be a
waiver of any other subsequent default.

 

XIII.                    Assignment.

 

Neither of the parties hereto may assign any of its rights or obligations under
this Agreement without the prior written consent of the other party. No consent
or approval required under this Agreement shall be unreasonably withheld and no
charge for the giving of such consent or approval shall be made.

 

XIV.                     Entire Agreement.

 

This Agreement represents the entire agreement and understanding of the parties
with respect to the subject matter hereof. The parties specifically acknowledge
and agree that no joint venture or lease is created hereby and that neither
party is hereby appointed as the agent of the other party.

 

XV.                          Governing Law.

 

This Agreement will primarily be performed in and shall be governed by and
construed in accordance with the laws of the State of Hawaii.  Each of the
parties consents to the jurisdiction of the courts of the State of Hawaii or any
federal court sitting in Hawaii and agrees that Hawaii is an appropriate venue
for any action that may be brought under this Agreement.

 

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XVI.                     Signatures.

 

IN WITNESS WHEREOF, MLMO and MFH have caused this Macadamia Nut Processing
Agreement to be executed and delivered by their duly authorized representatives
on this 11th day of July, 2012.

 

 

ML MACADAMIA ORCHARDS, LP

 

 

 

 

 

/s/ Dennis J. Simonis

 

Its: President.

 

 

 

 

 

BUDERIM MACADAMIAS OF HAWAII, LLC

 

 

 

 

 

/s/ John A. Wilke

 

Its: Operations Manager.

 

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Schedule A — Sampling and Testing Procedure.

 

A.                      Sampling.

 

WIS nuts for analysis shall be collected from a continuous sampler located on a
discharge chute taking the nuts from the factory receival hopper. Four samples
will be taken for each MLMO delivery number and represent the delivery number
total weight (Gross Pounds Received, GPR) as recorded by the certified scale
used to weigh each load of WIS nuts delivered to MFH

 

The Four separate samples taken from the continuous sampler will then be mixed
and two 5 gallon bucket sub samples will be collected and labeled with the MLMO
delivery number, the number 1, 2, 3, or 4 to represent the continuous sample
number, and the letter A or B for each subsample.

 

Sample A will be used to provide a 250 gram sample for Moisture and Extraneous
Matter Determination and a 500 gram sample for Quality Analysis. The moisture
and Quality Samples will be delivered to the MacFarms laboratory for
determination of MacFarms standard NIS analyses for moisture content and kernel
recovery data. The results for the four tests from each delivery number will be
averaged and the average result will be accepted as the laboratory test results
for that individual delivery number.

 

Sample B will be retained as a ‘check’ sample in the event that there is a
dispute over the results for Sample A. The ‘check’ sample will be kept until the
processing of the load to which it applies is completed and until the resultant
kernel is returned to and accepted by MLMO.

 

B.                      Sample Testing.

 

The WIS Moisture samples will be used for determining the amount of extraneous
material (as defined below) and moisture content. The WIS Quality Analysis
samples will be used for determining kernel quality, and kernel recovery for
their representative deliveries.

 

1.                                 Moisture Sample.

 

a.                                      Determination of Extraneous Material.

 

Weigh the entire sample and record the weight as the Gross Sample Weight
(“GSW”).  Remove all extraneous material.

 

Extraneous Material is defined as

 

·                  Foreign Material

·                  Trash

·                  Husk (loose pieces)

·                  Husks from un-husked nuts

·                  Empty nuts

 

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·                  Rat damaged

·                  Sticks

·                  Rocks

·                  Germinated nuts

·                  Pee Wee nuts, < 5/8 inch in diameter

 

The ratio of weight of the Extraneous Material to the Gross Sample Weight
(“GSW”) will be applied to the “GPR” to determine the Gross Weight WIS (“GW)
delivered (after extraneous material).

 

b.                                      Determination of Moisture.

 

After removal of the Extraneous Material weigh and record the weight of the
moisture sample. The moisture sample will then be dried in a convection oven at
105 degrees Celsius (220 degrees Fahrenheit) for 24 hours.  After drying the
dried sample will be weighed and the weight recorded. The percentage moisture
“M” will be determined by dividing the difference in weight prior to and after
drying by the weight prior to drying.

 

2.                                 Quality Analysis Sample.

 

The Quality Analysis Sample be weighed and then dried to a kernel moisture
content of 1.5% at a temperature of approximately 38 degrees Celsius (100
degrees Fahrenheit) for 7 days using the standard MFH drying procedure and after
review and approval of that procedure by MLMO.

 

After drying, crack the Quality Analysis sample and separate the shells from the
kernels.  Determine the weight of the recovered raw kernel.

 

Roast all recovered kernels from the sample using standard MFH procedure and
after review and approval of that procedure by MLMO. Using the Hawaii Department
of Agricultural “Standards for roasted macadamia nuts” separate the saleable
kernel from the unsalable kernel. Weigh the saleable kernel and record the
weight.

 

Separate the unsalable kernel into the following categories and weigh each
category and record the weight.

 

a.         Stink bug damage (>2 spots)

b.         Other insect damage

c.          Koa Seed worm

d.         Tropical nut borer

e.          Mold

f.           Germinated

g.         Immature/Shrivel

h.         Discoloured

i.            Bacterial damage

 

Total (a) through (i) and record the weight as un-saleable kernel.

 

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Each category for un-saleable kernel will be reported by weight and by % of
total weight of recovered raw kernel.

 

Weigh remaining Saleable kernel from sub sample A and record as Saleable Kernel
(“SK”).

 

Determine Kernel recovery (“KR”) where:-

 

KR= SK/X

 

3.                                 QA Data:

 

The QA data will be provided by MFH for each delivery which will include the
Gross Pounds received, Moisture content (from moisture sample), % Extraneous
material (from sample), % un-saleable kernel (from sample), % un-saleable kernel
by category (from sample) and Kernel Recovery “KR” (SK/DIS).

 

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Schedule B — Kernel Recovery and Pack Out.

 

A.                      Kernel Recovered.

 

Kernel recovery percent (SKR) will be established as outlined in Schedule A. The
minimum kernel recovered and hence net kernel weight available to MLMO will be
determined by multiplying the kernel recovery percentage, less a 1% factory loss
factor, by the net weight of dry nut in shell (DIS) available for cracking. The
net weight of DIS available for cracking will be deemed to be the weight of WIS
delivered and recorded against the individual delivery number less the
extraneous material as defined in Schedule A and adjusted to dry in shell (DIS)
moisture using the WIS moisture content as determined in Schedule A and
summarized below.

 

Weight of DIS = WIS x (100% - WIS % Moisture) / (100% - 3%)

 

B.                      Kernel Recovery and Pack Out.

 

MFH can pack off the following industry standard Styles of Product according to
the MFH Specification Sheet that is available for each Style. Mixtures of the
styles may be possible after consultation and agreement by MFH Factory Manager.

 

Style I (30’s)

Style I (40’s)

Style 1 (Whole Kernel of Mixed Sizes)

Style II (Wholes and Halves at defined percentages of each)

Style 4L (Large Halves)

Style IV Regular (Small Halves and Pieces)

Style VI (Small Pieces.)

Confectionery Grade (edible Kernels with slight physical defects)

 

C.                      Packaging:

 

MFH will supply 25 lb boxes and foil liners. MFH will label the packed product
with labels supplied for the purpose by MLMO.

 

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Schedule C — Process Analysis.

 

A.                      In Process Physical Assessments.

 

Characteristic:

 

 

 

 

 

Sample Size

 

500 grams

 

 

 

Style

 

Compliance with Style Sizing.

 

 

 

Foreign Material

 

Less than 0.02%

 

 

 

Reject Kernel

 

0%

 

 

 

Total Serious Defects

 

1.0% Maximum

 

 

 

Moisture

 

1.5% Maximum

 

 

 

Color

 

Uniform, typical roasted &

 

 

free of dark pieces

 

 

 

Flavor

 

Clean, fresh, macadamia flavor.

 

 

 

Roasted Defects

 

Less than 5% dark brown colors. (Exception: This does not include the dark basal
cap which is genetic).

 

B.                      Laboratory Assessments.

 

Std Plate Count

 

Less than 10,000 per gram

 

 

 

Yeast and Mold

 

Less than 100 per gram

 

 

 

Coliforms

 

Less than 100 per gram

 

 

 

E. coli

 

Negative

 

 

 

Salmonella

 

Negative

 

 

 

Aflatoxin

 

20 ppb Maximum

 

 

 

Peroxide Value

 

5.0 meq/kg Maximum

 

 

 

Free Fatty Acid, as oleic

 

1.5% maximum

 

Compliance with the above criteria indicates that the Product complies with the
U.S. Federal Food, Drug and Cosmetic Act as amended.

 

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