**Exhibit 10.52**

 

Macadamia Nut Purchase Agreement

Hamakua Macadamia Nut Company, Inc. &ML Macadamia Orchards, L. P.

Calendar Years 2007 through 2012

 

ThisMacadamia Nut Purchase Agreement is entered into on the date set forth below byand between Hamakua Macadamia Nut Company, Inc., a Hawaii Corporation (“HMNC”)and ML Macadamia Orchards, L.P. (“MLP”).

 

Whereas,HMNC is experienced and capable in all aspects of the business of processingand marketing macadamia nuts;

 

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

 

Whereas,HMNC desires to purchase wet-in-shell (“WIS”) macadamia nuts from MLP asprovided herein;

 

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

 

1.  Term. This Agreement shall be deemed to have commenced for all purposes as of January 1,2007 and shall continue in full force and effect until December 31, 2012,unless terminated earlier as provided herein.

 

2.  Delivery.  MLP shall harvest macadamia nuts and fillcontainers suitable for transport as mutually agreed upon, and arrange forpickup or delivery of wet-in-husk (“WIH”) nuts from MLP’s orchards or WIS nutsfrom a designated husking station. MLP may, at its option, husk and/or delivernuts prior to delivery to HMNC. If MLP husks or delivers nuts, MLP will beentitled to husking and/or delivery bonus outlined in section 7. Ownershipof the nut crop will transfer from Seller to HMNC upon pickup by HMNC ordelivery by MLP to HMNC.

 

3.Purchase and Sale.  MLP agrees tosell and HMNC agrees to purchase approximately 6 million pounds (between 5.8and 6.2 million) of WIS macadamia nuts annually from various MLP orchards. The6 million pounds shall be divided into three equal segments of approximately 2million pounds each. The nut purchase price for Segment I (2 million pounds)under this contract shall be renegotiated on or before December 31, 2008for the remaining four years of the contract. The nut purchase price forSegment II (2 million pounds) shall be renegotiated on or before December 31,2010 for the remaining two years of the contract. If the Parties are unable tonegotiate a mutually agreeable price relative to Segment I or II, theproduction from that segment may be withdrawn from the contract and sold by MLPto other parties.

 

4.  Blended Index Crop Price.  A Blended Index Crop Price (“BICP”) per poundshall be calculated each year for all pounds delivered (adjusted to 20% moistureand 30% SK/DIS recovery). The BICP shall be based 60% on Hamakua’s weightedaverage bulk nut price for the preceding crop year (July-June) and 40% on afixed component of 85 cents per pound as outlined in Exhibit A. Theinitial BICP shall be determined based on HMNC’s average bulk nut price for the2006-2007 crop year (July 1, 2006 – June 30, 2007) and shall apply toall deliveries in 2007. The BICP shall apply to all deliveries from allsegments until their respective renegotiation dates.

 

5.Minimum and Maximum BICP Guidelines The Parties agree that the BICP forany year shall not be less than 75 cents per pound and shall be no more than 95cents per pound (adjusted to 20% moisture and

 

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30%SK/DIS recovery).The Parties further agree that any change in the BICP shall be limited to +/- 7cents annually.

 

6. Spot Price AdjustmentNot withstanding the foregoing, if HMNC pays aweighted average spot price higher than the MLP contract price during anycalendar year, MLP will receive an additional nut price adjustment equal to 50%of the difference between the weighted average spot price and the prevailingcontract price. This provision does not affect the index calculations. Anyadditional payment shall be calculated and paid by HMNC no later than January 31stof the succeeding year.

 

Anyspot prices negotiated between MLP and HMNC for deliveries above contractvolumes will not be included in the calculation of the Spot Price Adjustmentabove.

 

7.Husking and Delivery Bonuses - There shall be no charges for hauling orhusking by HMNC. HMNC will pay a Hauling Bonus of $.02 per pound WIS (adjustedto 20% moisture and 30% SK/DIS recovery) for WIS nuts husked by MLP and ahauling bonus of $.02 per pound WIS (adjusted to 20% moisture and 30% SK/DISrecovery) for nuts delivered to HMNC by MLP.

 

8.Payment Terms.  Payments shall be made within 30 days of thedate of delivery.

 

9.  PACA Lien – HMNC acknowledges that WIS macadamias are aperishable agricultural commodity. HMNC further concedes that all receivablesrelated to deliveries of WIS or WIH nuts are subject to and secured by theprovisions of the Perishable Agricultural Commodities Act of 1930.

 

10.  Sampling.  HMNC and MLP shall agree on such methods andprocedures as may be appropriate to enable HMNC to determine the grosswet-in-shell weight, the moisture content and the kernel recovery of themacadamia nuts delivered to it by MLP with as much accuracy as is reasonablypracticable.  The procedures to be usedin sampling for moisture, kernel recovery and percentage of husked WIS nutsincluded in WIH nut loads and in calculating the payment to MLP are set forthin Exhibit B. Any deviations from the sampling procedure shall be bymutual agreement only.

 

11.  Accounting and Reports.  HMNC shall keep full and accurate records andaccounts showing, among other things, dates of delivery and weights of nutsfrom the orchards, all wet-in-husk weights measured, and all other informationthat may be necessary or desirable in order to calculate and verify payments toMLP under this Agreement.

Along with each payment for deliveries,HMNC will provide a written report to MLP describing the shipment deliveryweight (WIH or WIS), the quality analysis results, and the calculations thatdetermine payment.

 

HMNCagrees to provide a report, prepared and certified by an independentaccountant, by August 15 of each calendar year, detailing the BICP to beused for payment of deliveries in that calendar year. HMNC also agrees toprovide a report, prepared and certified by an independent accountant, within45 days from the end of each calendar year, detailing the weighted average WISprice paid by HMNC to independent growers for the preceding year. MLP shallhave 90 days from receipt of each report to object or investigate.

 

MLPshall be entitled to observe the sampling process upon reasonable notice andshall be entitled to any information necessary or desirable to verify theaccuracy of the nut price or payment. To the extent that information is sharedbetween the parties hereunder and is not otherwise in the public domain, bothparties agree to keep such information confidential except as may be requiredby law or in connection with any litigation between the parties.

 

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12. Termination.  The partiesmay terminate this Agreement at any time by mutual agreement in writing.  In the event that any party shall be indefault (as defined below), the non-defaulting party may terminate thisAgreement at any time by delivering written notice of such termination to thedefaulting party.

 

A partyshall be in “default” under this Agreement in the event that (i) it filesany voluntary proceeding for dissolution or under any federal or statebankruptcy, insolvency, receivership or similar law; (ii) any suchproceeding is commenced against it involuntarily and is not dismissed within 60days; (iii) it makes any composition with or assignment for the benefit ofits creditors; (iv) it enters into any corporate reorganization oracquisition without making adequate provision for the performance of itsobligations under this Agreement; (v) it fails to perform any of itsobligations when due under this Agreement and it fails to correct suchnon-performance within 30 days after written demand for performance is made bythe other party; or (vi) it repeatedly fails to perform its obligationsunder this Contract except  after writtendemand for performance.

 

13.  Notice.  For convenience of operation hereunder, eachof HMNC and MLP shall designate one representative to serve as the channel ofcommunication for delivering information to and securing necessary action byits principals.  Any party may change itsrepresentative from time-to-time by delivering written notice of such change tothe other party.  Until further notice isgiven, each party’s representative shall be the person listed in the noticeaddress below.

 

Any and allnotices, demands, or other communications (collectively, “notice”) requiring ordesired to be given hereunder by either party shall be in writing and shall bevalidly given or made to the other party or his authorized representative atthe address set forth below, if served either personally or if deposited in theUnited States mails, certified or registered, postage prepaid, or if sent byfax.

 
| HMNC:  | Hamakua  Macadamia Nut Company, Inc. |                 |   |
|--------|-------------------------------------------|----------------------|--------|
|   | 61-3251  Maluokalani Street               |                 |   |
|   | P.O. Box  44715                      |                 |   |
|   | Kawaihae,  Hawaii 96743                   |                 |   |
|   | Attention:  President                     | Fax: (808)  882-8335 |
|   |                                      |                 |   |
| MLP:   | ML  Macadamia Orchards, L.P.              |                 |   |
|   | 26-238  Hawaii Belt Road                  |                 |   |
|   | Hilo,  Hawaii 96720                       |                 |   |
|   | Attention:  President                     | Fax: (808)  969-8152 |
|        |                                           |                      |        |  |

 

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

 

14.  Force Majeure.  Neither of the parties hereto shall be liableor accountable to the other party for any delay in complying or any failure tocomply with any of the terms, provisions or conditions of this Agreement in theevent that such failure shall have been caused by an act of God, strike,lockout, public enemy, war, civil commotion, riot, condemnation, judicial orgovernmental order or other requirements of law which directly prohibit theperforming by either party of the obligations hereunder (such as, but notlimited to, governmental regulations concerning the hazards of marketing orconsumption of macadamia nuts) or the refusal or failure of any governmentaloffice or officer to grant any permit or order necessary

 

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for compliance herewith by either partyhereto, nor shall either of the parties hereto be liable or accountable to theother party for any damages arising from any such delay or failure.

 

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

 

16. Assignment.  Neither of the parties hereto may assign anyof its rights or obligations under this Agreement without the prior writtenconsent of the other party.  No consentor approval required under this Agreement shall be unreasonably withheld and nocharge for the giving of such consent or approval shall be made.

 

17. EntireAgreement.  This Agreement representsthe entire agreement and understanding of the parties with respect to thesubject matter hereof.  The parties specificallyacknowledge and agree that no joint venture or lease is created hereby and thatneither party is hereby appointed as the agent of the other party.

 

18. GoverningLaw.  This Agreement will primarilybe performed in and shall be governed by and construed in accordance with thelaws of the State of Hawaii. Each of the parties consents to the jurisdictionof the courts of the State of Hawaii or any federal court sitting in Hawaii andagrees that Hawaii is an appropriate venue for any action that may be broughtunder this Agreement.

 

 

IN WITNESSWHEREOF, HMNC and MLP have caused this Macadamia Nut PurchasingAgreement to beexecuted and delivered by their duly authorized representatives on this 16thday of December, 2004.

 

 
| HMNC:  | HAMAKUA  MACADAMIA NUT COMPANY, INC. |
|--------|--------------------------------------|
|   |                                 |   |
|   |                                 |   |
|   | By                                   | /s/  Richard Schnitzler |   |
|   |                                 | Richard  Schnitzler |
|   |                                 | Its  President |
|   |                                 |   |
|   |                                 |   |
| MLP:   | ML  MACADAMIA ORCHARDS, L.P.         |
|   |                                 |   |
|   | By                                   | /s/ Dennis  J. Simonis |   |
|   |                                 | Dennis J.  Simonis |
|   |                                 | Its  President |

 

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**Exhibit A**

** **

Macadamia Nut Purchase Agreement

**Hamakua Macadamia Nut Company, Inc. &ML Macadamia Orchards, L.P.**

**Blended Index Crop Price (BICP) Based on Bulk Kernel Price**

** **
| **Ave Bulk Kernel Price  At least & less than** | ** **  | **60% Component  Crop Price** | ** ** | **40% Fixed Component  Crop Price** | ** ** | **Blended Index  Crop Price** | ** ** |
|-----------------------------------------------------|-------------|-------------------------------|------------|-------------------------------------|------------|-------------------------------|------------|
| 6.65                                                | & above |                          |       | 1.01                                |       | 0.85                          |       | 0.95 |   |
| 6.60                                                | 6.65        |                          |       | 1.00                                |       | 0.85                          |       | 0.94 |   |
| 6.55                                                | 6.60        |                          |       | 0.99                                |       | 0.85                          |       | 0.93 |   |
| 6.50                                                | 6.55        |                          |       | 0.98                                |       | 0.85                          |       | 0.93 |   |
| 6.45                                                | 6.50        |                          |       | 0.98                                |       | 0.85                          |       | 0.93 |   |
| 6.40                                                | 6.45        |                          |       | 0.97                                |       | 0.85                          |       | 0.92 |   |
| 6.35                                                | 6.40        |                          |       | 0.96                                |       | 0.85                          |       | 0.92 |   |
| 6.30                                                | 6.35        |                          |       | 0.95                                |       | 0.85                          |       | 0.91 |   |
| 6.25                                                | 6.30        |                          |       | 0.94                                |       | 0.85                          |       | 0.90 |   |
| 6.20                                                | 6.25        |                          |       | 0.93                                |       | 0.85                          |       | 0.90 |   |
| 6.15                                                | 6.20        |                          |       | 0.92                                |       | 0.85                          |       | 0.89 |   |
| 6.10                                                | 6.15        |                          |       | 0.91                                |       | 0.85                          |       | 0.89 |   |
| 6.05                                                | 6.10        |                          |       | 0.90                                |       | 0.85                          |       | 0.88 |   |
| 6.00                                                | 6.05        |                          |       | 0.89                                |       | 0.85                          |       | 0.87 |   |
| 5.95                                                | 6.00        |                          |       | 0.88                                |       | 0.85                          |       | 0.87 |   |
| 5.90                                                | 5.95        |                          |       | 0.87                                |       | 0.85                          |       | 0.86 |   |
| 5.85                                                | 5.90        |                          |       | 0.86                                |       | 0.85                          |       | 0.86 |   |
| 5.80                                                | 5.85        |                          |       | 0.85                                |       | 0.85                          |       | 0.85 |   |
| 5.75                                                | 5.80        |                          |       | 0.84                                |       | 0.85                          |       | 0.84 |   |
| 5.70                                                | 5.75        |                          |       | 0.83                                |       | 0.85                          |       | 0.84 |   |
| 5.65                                                | 5.70        |                          |       | 0.82                                |       | 0.85                          |       | 0.83 |   |
| 5.60                                                | 5.65        |                          |       | 0.81                                |       | 0.85                          |       | 0.83 |   |
| 5.55                                                | 5.60        |                          |       | 0.80                                |       | 0.85                          |       | 0.82 |   |
| 5.50                                                | 5.55        |                          |       | 0.79                                |       | 0.85                          |       | 0.81 |   |
| 5.45                                                | 5.50        |                          |       | 0.78                                |       | 0.85                          |       | 0.81 |   |
| 5.40                                                | 5.45        |                          |       | 0.77                                |       | 0.85                          |       | 0.80 |   |
| 5.35                                                | 5.40        |                          |       | 0.76                                |       | 0.85                          |       | 0.80 |   |
| 5.30                                                | 5.35        |                          |       | 0.75                                |       | 0.85                          |       | 0.79 |   |
| 5.25                                                | 5.30        |                          |       | 0.74                                |       | 0.85                          |       | 0.78 |   |
| 5.20                                                | 5.25        |                          |       | 0.73                                |       | 0.85                          |       | 0.78 |   |
| 5.15                                                | 5.20        |                          |       | 0.72                                |       | 0.85                          |       | 0.77 |   |
| 5.10                                                | 5.15        |                          |       | 0.71                                |       | 0.85                          |       | 0.77 |   |
| 5.05                                                | 5.10        |                          |       | 0.70                                |       | 0.85                          |       | 0.76 |   |
| Below                                               | 5.05        |                          |       | 0.69                                |       | 0.85                          |       | 0.75 |   |

 

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**Exhibit B**

** **

Macadamia Nut Purchase Agreement

**Hamakua Macadamia Nut Company, Inc. &ML Macadamia Orchards, L.P.**

**Procedure for Sampling & Evaluating NISDeliveries / Payment Calculations**

** **

1.  Upon receipt of a shipment, weigh or verifycertified weight ticket to determine the Gross Weight of the wet-in-husk (“WIH”)or wet-in-shell (“WIS”) nuts delivered. A shipment (“shipment”) shall mean one load delivered on a single day.

 

2.  Obtain a sample, drawn randomly fromthroughout the delivered shipment of mutually agreed upon quantity of nuts.

 

3.  Weigh the sample and record the weight.  For loads received WIH, husk the sample andrecord the weight of the resulting sample of WIS nuts.  The ratio of WIS weight to the WIH weight ofthe sample shall be applied to the Gross Weight determined in item 1 above todetermine the gross weight of the WIS nuts delivered for loads received WIH.The gross weight of WIS nuts delivered as determined by the foregoing for WIHloads or the weight determined in item 1 above for WIS loads is designated hereinas “W”.

 

4.  Split the sample into two lots, one todetermine moisture (“moisture sample”) and the other to determine spoilage andkernel recovery (“quality sample”).

 

5.  Weigh the moisture sample and record theweight.  Dry the sample at approximately175 degrees Fahrenheit for a period of 3 days. Weigh the dried sample and record the weight after drying.  Divide the difference in weight prior to andafter drying by the weight prior to drying. The result is the percentage of moisture of the WIS nuts designatedherein as “M”.

 

6.  Weigh the quality sample and record theweight.  Dry the sample at approximately110 degrees Fahrenheit for 7 days. Record the dry-in-shell (“DIS”) weight. The weight, in grams, of the DIS sample is designated herein as “X”.

 

7.  Crack the DIS sample and separate the shellsfrom the kernels.  Determine the weightof the recovered raw kernels.

 

8.  Inspect the raw kernels and separateunsaleable kernels and record the weights of the following categories.

 

a)  Stinkbug damage (>3 spots)

b)  Other insect damage

c)  Mold

d)  Germination

e)  Bacterial damage

f)  Immature/Shrivels

g) Total a) through f)

 

  Record the data and summarize for fieldmanagement purposes.

 

9.  Using commercial criteria,separate out the salable kernel and record the weight.  The weight, in grams, of salable kernel isdesignated herein as “Y”.

 

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10. Determine the SalableKernel Recovery (SK/DIS) factor designated herein as “KR”.

 

KR = Y/X

 

11. Determine spoilagepercentages for each category of unusable as follows:

 

For each category ofunusable, divide the recorded category

weightby the total of unusable and usable kernel (8(g) plus Y).

 

12. Determine PayablePounds for the load.

 

a)  Convert total load to WIS weight at 20%moisture designated herein as “WM”

 

WM = W*(1-M)/(1-.2)

 

b)  Determine Payable Pounds for the loaddesignated herein as “P”

 

P = WM*(KR/.3)

 

13. Sample Calculation.

 
| WIS Delivered                          |   | 45,000 | lbs |
|----------------------------------------|--------|--------|-----|
| Moisture (from  sample)                |   | 21.0   | %   |
| Salable Kernel  Recovery (from sample) |   | 30.5   | %   |
| Price (e.g. 1st  year volume price)    |   | $      | .85 |   |
| Delivery Bonus  (if delivered)         |   | $      | .02 |   |
| Husking Bonus  (if husked)             |   | $      | .02 |   |

 

WM = 45,000 * (1-.21)/(1-.2) = 44,437 lbs WIS adjusted to 20% moisture

P = 44,437 * 0.305/0.3 =45,178 lbs WIS adjusted to 20% moisture & 30% recovery (ContractPounds)

 
| Payment = 45,178  lbs * $.85 =                  |   | $ | 38,401.30 |   |
|-------------------------------------------------|--------|---|-----------|--------|
| Delivery Bonus  (if delivered) = 45,178 * $.02= |   | $ | 903.56    |   |
| Husking Bonus  (if husked) = 45,178 * $.02=     |   | $ | 903.56    |   |

 

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