Document:

Exhibit 10.5

 

CONVENTION DE TRANSACTION

 

	
  ENTRE :

  	
  Manugistics
  Benelux S.A., société
  de droit belge, ayant son siége social rue du Long Thier 33, 4500 Huy,
  Belgique

  
	
   

  	
   

  
	
   

  	
  représentée
  par son Directeur Général, Monsieur Jean Marie Arnould

  
	
   

  	
   

  
	
   

  	
  ci-aprés dénommée
  “Manugistics”,

  
	
   

  	
   

  
	
  ET
  :

  	
  Monsieur
  Jean-Claude Walravens, demeurant Route Gouvernementale 110, 1950 Kraainem, Belgique

  
	
   

  	
   

  
	
   

  	
  ci-aprés dénommé “Monsieur Walravens”,

  

 

ci-aprés dénommés “les
Parties” ;

 

IL EST
PREALABLEMENT EXPOSE CE QUI SUlT :

 

Monsieur Walravens a, par
contrat à durée indéterminée daté du lbr décembre 1999, été
engagé par Manugistics à partir du 6 décembre 1999.

 

Manugistics a décidé,
le 31 août 2005, de rompre le
contrat de travail liant les Parties moyennant le paiement d’une indemnité de préavis.

 

Les parties conviennent de
conclure la présente
convention par laquelle elles entendent régler
définitivement et irrévocablement les conditions et les modalités de leur relation de travail et de la fin de
cette relation de travail.

 

IL EST
CONVENU CE QUI SUlT :

 

Article 1 – Convention de transaction

 

Les Parties conviennent
expressément que la présente
convention constitue une transaction dans le sens de l’article 2044 du
Code Civil.

 

Article 2 – Paiements à l’occasion de la
rupture du contrat de travail

 

2.1

Dans les 10 jours suivant la
signature de la présente convention, Manugistics paiera, pour solde de tout
compte, à Monsieur Walravens les montants suivants :

 

a)              le pécule de vacances de départ conformément aux dispositions légales belges applicables ;

 

 

b)             une indemnité compensatoire de préavis d’un montant brut de 12.384 EUR ; du montant de l’indemnité compensatoire de préavis sera déduit un montant de 1204.74 EUR, à savoir le salaire du mois de septembre qui a
été
payé indment par Manugistics ;

 

2.2

Manugistics s’engage à contacter immédiatement son secrétariat social afin de calculer les montants
nets correspondant aux montants bruts précités aprés
déduction des contributions de sécurite sociale et du precompte professionnel
et de préparer les documents soclaux,
qui seront délivrés à
Monsieur Walravens le plus rapidement possible.

 

Article 3 – Contribution à l’assurance-groupe

 

Manugistics palera un
montant égal à 11.500 EUR directement à l’assurance-groupe,
à condition que la compagnie d’assurance
accepte un tel paiement.

 

Article 4 – Voiture de société

 

Manugistics est d’accord sur
le fait que Monsieur Walravens continue à utiliser la voiture de société jusqu’au 30
mars 2007.

 

Manugistics continuera à payer l’essence de cette voiture de société, à concurrence d’un montant de 416,66 EUR par mois.

 

L’assurance de la voiture
est maintenue. En cas d’accident, Monsieur Walravens s’engage à payer toute franchise due.

 

Article 5 – Droit à exercer les (( vested )) stock options pour le délai de ces options

 

Monsieur Walravens peut
continuer à exercer
tous les stock options qui étalent (( vested
)) au moment de son licenciement, pour le délai de ces options.

 

Les stock options suivants étaient ((vested )) au moment du licenciement de Monsieur Walravens :

 

	
   

  	
   

  	
   

  	
   

  	
  NOMBRE DE ((VESTED
  AND

  	
   

  
	
  NUMERO DU PLAN

  	
   

  	
  PRlX DES STOCK OPTIONS

  	
   

  	
  EXERCISABLE)) STOCK
  OPTIONS

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  00011679

  	
   

  	
  6,5450 USD

  	
   

  	
  40,333

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  00011782

  	
   

  	
  2,585 USD

  	
   

  	
  2,250

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  009850

  	
   

  	
  5,5155 USD

  	
   

  	
  6,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  E0000017

  	
   

  	
  5,55 USD

  	
   

  	
  29

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  E0000018

  	
   

  	
  5,55 USD

  	
   

  	
  25,029

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  E0000368

  	
   

  	
  5,55 USD

  	
   

  	
  29

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  E0000820

  	
   

  	
  5,55 USD

  	
   

  	
  15,500

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  TR000692

  	
   

  	
  3,98 USD

  	
   

  	
  12,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  101,170

  	
   

  

 

2

 

Article 6 - Obligations de
Monsieur Walravens

 

6.1

Monsieur Walravens s’engage à restituer à Manugistics tout le matériel, tous les documents et autres objets
appartenant à Manugistics ou au groupe
dont Manugistics fait partie, avant le [5 octobre 2005].

 

Cependant, Monsieur
Walravens restituera la voiture de société
au plus tard le vendredi 30 mars 2007.

 

6.2

Dans le cadre de son emploi
au sein de Manugistics, Monsieur Walravens a acquis des informations
confidentielles relatives aux activités de Manugistics, au groupe dont Manugistics fait
partie et à ses clients.

 

Monsieur Walravens observera
et maintiendra la plus grande discretion concernant les informations
confidentielles dont il a pu avoir pris connaissance dans le cadre de son
contrat de travail et n’utilisera pas ces informations confidentielles à son propre bénéfice
ou au bénéfice d’une tierce partie et ne communiquera
aucune information confidentielle à
des personnes non autorisées.

 

6.3

Monsieur Walravens s’engage à s’abstenir de tout acte de concurrence déloyale et/ou de complicité a de tels actes à I’égard
de Manugistics.

 

Article 7 – Renonciation aux droits par Monsieur Walravens

 

Suite à la signature de la présente convention, et moyennant I’exécution des obligations sous celle-ci,
Monsieur Walravens reconnait qu’il a été entierement indemnisé en ce qui concerne tous les droits quels qu’ils
soient, provenant ou résultant,
directement ou indirectement, de son emploi auprès de Manugistics et/ou de la fin de cet
emploi et/ou de son emploi auprés
de toute autre société du groupe dont fait partie Manugistics.

 

Monsieur Walravens renonce,
de manière irrévocable et inconditionnelle, à toutes les demandes et droits qu’il peut
faire valoir, sous les lois de n’importe quelle juridiction, à l’égard :

 

(a) de
Manugistics, de ses directeurs et/ou employés et/ou ;

(b) d’autres
sociétés du groupe dont fait partie Manugistics, de
leurs directeurs et/ou employés;

 

quelle que soit la nature de
ces droits et actions, connus ou inconnus au moment de la signature du présent contrat, et qui résultent, directement ou indirectement, de son
emploi auprès de Manugistics et/ou de toute autre société
du groupe dont fait partie Manugistics et/ou de la fin de cet emploi.

 

Article 8 – Renonciation

 

Les parties renoncent à se prévaloir
de toute erreur de fait ou de droit et de toute omission relative à I’existence ou à l’étendue
de ces droits.

 

3

 

Article 9 - Confidentialité du règlement

 

Les parties s’engagent à ne pas dévoiler ou
discuter la nature et le contenu de la présente
convention ou de ses négociations,
sauf pour exercer leurs droits inclus ou, le cas échéant,
lorsqu’ une révélation est exigée par le droit applicable.

 

Article 10 - Convention
unique entre les parties

 

La présente convention constitue I’entière convention entre parties et se substitue à toute convention antérieure,
à toute proposition orale ou écrite ainsi qu’à toute négociation, conversation ou discussion entre les Parties.

 

Monsieur Walravens reconnaît
ne pas avoir été induit à signer
la présente convention par des promesses
ou des déclarations, orales ou écrites, qui ne sont pas expressement incluses
dans la présente convention.

 

Article 11 - Droit applicable

 

La présente
convention est soumise aux lois belges. Tout litige sera soumise aux
juridictions belges.

 

*   *   *

 

Fait le 5 octobre 2005, à Bruxelles, en deux originaux, chacune des
parties reconnaissant avoir reçu son exemplaire.

 

 

	
   

  	
  lu et approuvé

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/ Jean
  Marie Amould

  	
   

  	
  /s/ Walravens

  	
   

  
	
  Pour
  Manugistics (*)

  	
  Monsieur
  Walravens (*)

  
	
  Jean Marie
  Amould

  	
   

  
	
  Directeur Général

  	
   

  
				

 

(*) La signature des parties
doit étre précédée des termes “lu et approuvé”. Veuillez parapher chaque page.

 

4

 

DRAFT SETTLEMENT AGREEMENT

FOR TRANSLATION PURPOSES ONLY

 

29 September 2005

 

TERMINATION
AGREEMENT

 

	
  BETWEEN    :

  	
  Manugistics
  S.A. a company duly incorporated under the laws of
  Belgium, having its principal place of business at
  [                        ];

  
	
   

  	
   

  
	
   

  	
  Represented
  by [Mrs/Mr        
  ], in [her/his] capacity of [                   ]:

  
	
   

  	
   

  
	
   

  	
  Hereinafter
  referred to as “Manugistics”;

  
	
   

  	
   

  
	
  AND               :

  	
  Mr
  Jean-Claude Walravens, residing at Clos Manuel n 11,
  1150-Brussels (Belgium);

  
	
   

  	
   

  
	
   

  	
  Hereinafter
  referred to as “Mr Walravens”,

  

 

Hereinafter jointly referred to as “the Parties”;

 

WHEREAS:

 

Manugistics and Mr Walravens have entered into an employment
relationship for an indefinite duration on 6 December 1999, formalised in
a written employment contract on 1 December 1999.

 

Manugistics decided to terminate the employment contract of Mr
Walravens on 31 August 2005 through payment of an indemnity in lieu of
notice.

 

The Parties hereto have entered into this agreement in order to settle
any and all issues concerning and/or relating to the employment relationship of
Mr Walravens and the termination thereof.

 

IN HAS BEEN AGREED AS FOLLOWS:

 

Article 1- Settlement agreement

 

Parties expressly agree that this agreement is a settlement agreement
in the sense of article 2044 of the Belgian Civil Code.

 

1

 

Article 2 - Payments at the end of
employment relationship

 

2.1.

At the occasion of the termination of the employment contact between
Manugistics and Mr Walravens , and within [                 ]
days following the signing of the present agreement, the following amounts will
be paid to Mr Walravens ;

 

(a)                                  leave
vacation pay in accordance with the applicable Belgian law
provisions;

 

(b)                                 an Indemnity in lieu of notice, i.e. a gross amount of
12,384 EUR: from this indemnity in lieu of notice will be deducted an amount of
[              
] EUR, i.e. salary for September 2005 that Manugistics paid to Mr
Walravens by mistake;

 

2.2.

Manugistics will immediately instruct its payroll office to calculate
the net amounts corresponding to the abovementioned gross amounts taking into
account tax withholdings and mandatory social security contributions and to
prepare the social documents which will be delivered to Mr Walravens without
delay.

 

Article 3 - Payment to the group insurance

 

Manugistics will pay an amount of 11,500 EUR directly to the group
insurance, provided the insurance company accepts such payment.

 

Article 4 - Company car

 

Manugistics agrees that Mr Walravens can continue to use his company
car untill 30 March 2007.

 

Mr Walravens is entitled to fuel for his company car to the amount of
416.66 EUR per month.

 

The Insurance for the company car is continued in case of an accident,
Mr Walravens is liable to personally expense any franchise that might be due.

 

Article 5 - Rights to exercise vested
stock options for the term of the options

 

Mr Walravens is entitled to exercise all stock options that were vested
at the time of termination of his employment contract, for the term of these
options.

 

The following stock options were vested at the time of termination of
the employment contract:

 

	
   

  	
   

  	
   

  	
   

  	
  AMOUNT OF VESTED AND

  	
   

  
	
  STOCK OPTION PLAN NUMBER

  	
   

  	
  STOCK OPTION PRICE

  	
   

  	
  EXERCISABLE STOCK OPTIONS

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  00011679

  	
   

  	
  6,5450 USD

  	
   

  	
  40,333

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  00011782

  	
   

  	
  2,585 USD

  	
   

  	
  2,250

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  009850

  	
   

  	
  5,5155 USD

  	
   

  	
  6,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  E0000017

  	
   

  	
  5,55 USD

  	
   

  	
  29

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  E0000018

  	
   

  	
  5.55 USD

  	
   

  	
  25029

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  E0000368

  	
   

  	
  5,55 USD

  	
   

  	
  29

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  E0000820

  	
   

  	
  5,55 USD

  	
   

  	
  15,500

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  TR000692

  	
   

  	
  3,98 USD

  	
   

  	
  12,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  101,170

  	
   

  

 

2

 

Article 6 – Obligations of
Mr Walravens

 

6.1

No later than
[                         ],
Mr Walravens will have returned or will return to Manugistics all material,
documents and goods, belonging to Manugistics.

 

However, the company car will be returned to Manugistics
[Belgium/France] no later than Friday 30 March 2007.

 

6.2

In the light of his employment with Manugistics, Mr Walravens has
acquired confidential information regarding the activities of Manugistics, the
group which Manugistics belongs and its clients.

 

Mr Walravens shall keep and shall hold in confidence all confidential
information of which he may have had knowledge at the occasion of his
employment and will not use this confidential information for his own or any
third party’s benefit and will not communicate any confidential information to
a non-authorized person.

 

6.3

Mr Walravens will not participate in unlawful competition and/or
complicity to such acts towards Manugistics.

 

Article 7 – Waiver of rights by Mr
Walravens

 

As a result of the conclusion of this Agreement, and subject only to
the performance by Manugistics of its obligations under this agreement, Mr
Walravens recognises that he is fully indemnified concerning all rights whatsoever
directly or indirectly arising out of, resulting from or associated with his
employment agreement and the termination thereof with Manugistics and/or
against any other company belonging or having belonged to the Manugistics
group.

 

Mr Walravens hereby irrevocably and definitively waives and puts an end
to any and all claims, rights, proceedings or remedies whatsoever against:

 

(a)                                  Manugistics,
its directors or employees, and/or;

 

(b)                                 any
other company of the group to which Manugistics belongs, or directors or
employees thereof;

 

whether outstanding, accruing or contingent, resulting, directly or
indirectly, from its employment with Manugistics or any other company of the
group to which Manugistics belongs, and the termination thereof.

 

3

 

Article 8 – Renunciation

 

Parties moreover renounce to invoke any factual or legal error or any
omission concerning the existence or the extent of their rights.

 

Article 9 - Confidentiality of the
settlement agreement

 

Parties will not disclose or discuss the nature and contents of this
agreement, nor of the negotiations having lead to this agreement, except to
exercise their respective rights contained herein or if disclosure is required
under applicable law.

 

Article 10 - Sole agreement between
Parties

 

This agreement constitutes the entire agreement of the parties with
respect to the subject matter hereof, and supersedes all previous agreements as
well as all proposals, oral or written, and all negotiations, conversations or
discussions hereto between the parties related to this agreement.

 

Mr Walravens acknowledges that he has not been induced to enter into
this agreement by any promises or statements, oral or written, not expressly
contained herein.

 

Article 11 - Applicable law

 

This agreement will be governed and controlled in accordance with
Belgian law.  Any controversy or claim
arising out of or relating to this agreement or the breach thereof, shall be
brought before the courts of Belgium.

 

Executed at [               ],
on [     ] 2005, in
two original counterparts, each party acknowledging having received its
counterpart.

 

 

	
  For Manugistics (*)

  	
  Mr Walravens (*)

  
	
  [name and function]

  	
   

  

 

(*)                                 The
signatures must be preceded by the hand-written words “read and approved”.  Please sign with your initials on every page.

 

4Exhibit 10.54

 

MACADAMIA NUT PURCHASE AGREEMENT

 

THIS MACADAMIA NUT PURCHASE AGREEMENT (the “Agreement”) is entered
into as of January 6, 2006, by and between MAC FARMS OF HAWAII, LLC, a Delaware limited liability company
(“MF”) and ML MACADAMIA ORCHARDS, L.P.,
a Delaware limited partnership (“MLP”).

 

W
I T N E S S E T H:

 

WHEREAS, MF is engaged in the business
of processing and marketing macadamia nuts; and 

 

WHEREAS, MLP is the legal and
beneficial owner of macadamia nut crops grown in certain macadamia nut orchards
located on the Big Island in Hawaii (the “Orchards”); and 

 

WHEREAS, MF desires to purchase from
MLP, and MLP desires to sell to MF, wet-in-shell (“WIS”) macadamia nuts on the
terms and conditions provided herein; 

 

NOW, THEREFORE, in consideration of the
premises, the promises, and covenants and agreements set forth herein, and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties agree as follows:

 

1.                                       Term.  This Agreement shall commence on
January 1, 2007, and shall continue in full force and effect, until
December 31, 2011, unless terminated earlier, as provided herein. 

 

2.                                       Purchase and
Sale.  MLP agrees to sell to MF, and MF agrees to
purchase from MLP, at least 4.5 million pounds, and not in excess of 5.5
million pounds, of WIS macadamia nuts, annually, during the term hereof grown
by MLP in the Orchards.  For purposes of
this Agreement, WIS pounds
means field
pounds, adjusted to
twenty percent (20%) moisture. and thirty percent (30%) SK/DIS kernel recovery.

 

3.                                       Delivery.  During the term hereof, MLP shall harvest the
macadamia nuts and load them in containers suitable for the transport thereof,
as mutually-agreed upon by the parties, and deliver WIS macadamia nuts
to MF’s processing plant (the “Plant”). Both parties acknowledge that the macadamia nut
crops must be harvested and delivered in a timely manner to MF, so that the macadamia nut
quality will not be adversely affected. Accordingly, such harvesting and
delivery shall commence during August of each crop year, and MF agrees to
accept delivery of the WIS macadamia nuts, after husking and removal by
MLP of extraneous matter (i.e., rocks, sticks), at a rate not to exceed
(i) a maximum of 500,000 WIS pounds of macadamia
nuts per week, and
(ii) a maximum of 125,000 WIS pounds of macadamia nuts per

 

 

day.  MLP will make
deliveries of WIS macadamia nuts between the hours of 6.30am to 3:00pm Monday
to through Saturday. To the extent MF is unable to accept deliveries at this
rate, MLP and MF will take samples of the WIS macadamia
nuts intended for
delivery to MF, and which delivery will be accordingly delayed.  When such macadamia
nuts, the delivery
of which was delayed, are actually delivered, payment will be based upon the
foregoing samples and the actual delivery weights thereof FOB the Plant
provided by MLP.  WIS macadamia nuts, whose delivery is delayed, will be stored at
mutually-agreed sites.  MLP recognizes,
that it has a duty to mitigate any damages caused by delayed deliveries by
providing periodic forecasts of intended deliveries and by selling delayed
deliveries of macadamia nuts to other processors with excess capacity, if at all
possible. 

 

4.                                       Annual Contract
Price.  The parties shall mutually agree upon a
contract price for each six (6) month period (January-June and
July-December) under this Agreement.  The
pricing for January-June shall be agreed to no later than November 15th
of the preceding year, and the pricing for July-December shall be
agreed to no later than the preceding May 15th.

 

If
the parties fail or are unable to agree upon a contract price by
November 15th for any January-June period or by
May 15th for any July-December period during the term
hereof, the parties shall mutually-select an independent third-party broker or
specialist to (i) determine the average, current spot price per-pound for
bulk premium (Hawaiian and Australian) Style II raw macadamia nuts (FOB West
Coast) (the “Global Macadamia Kernel Price”), and (ii) issue a certified
report of the foregoing to the parties. 
The procedures for such review are set forth on Exhibit A attached
hereto.  Either party may challenge the
conclusions of the report within fifteen (15) days of the issuance
thereof.  In such case, the parties shall
attempt to resolve the pricing issues through good faith negotiations.  If the parties fail or are unable to reach a
final agreement as to the contract price, within fifteen (15) days, the
objecting party may, at its own cost, engage a second, qualified, independent,
third-party broker or specialist to prepare a second certified price
report.  The results of the two reports
shall be averaged to determine the Global Macadamia Kernel Price. The Global
Macadamia Kernel Price, as determined by the independent third-party broker(s) or
specialist(s), as the case may be, shall be converted to a WIS macadamia nut
contract price using a conversion factor of 15.2% of the Global Macadamia
Kernel Price.

 

In
the event that a contract price has not been established by the beginning of
any six (6) month period, all WIS macadamia
nuts that are delivered
to MF shall be paid for, based upon the price used by the parties for the
immediately preceding six (6) month period.  As soon as the new contract price is
determined, an adjustment shall be calculated and reflected in the next
payment.

 

5.
(A)                  Options to
Terminate.  In the event that the contract price for any
six (6) month period is less than 75 cents per pound, MLP shall be
entitled to terminate this Agreement, in-full or in-part, at its sole option,
by providing (i) two (2) year’s advance written notice, if such
occurs during the first eighteen (18) months of this Agreement, (ii) one
(1) year’s advance written notice, if such occurs between the 18th and
36th months of this Agreement, and (iii) ninety (90) day’s advance written
notice, if such occurs during the remainder of the term hereof.  In the event that the contract price for any
six (6) month period is more than $1.20 per pound, MF shall be entitled to
terminate this Agreement, in-full or in-part, at its sole option, by providing
to MLP ninety (90) day’s advance written notice.

 

 

5
(B) Suspension of WIS Macadamia Nut Delivery:
In the event that Extraneous matter (as defined in Exhibit B) contained in
a delivery, as determined by the WIS macadamia nuts sampling process exceeds
5.0% of the gross weight of the delivery sample, MF has the right to refuse
further deliveries of WIS macadamia nuts until satisfied that MLP has taken the
necessary measures to correct the problem at their husking plant.  MF will inform MLP immediately when
Extraneous materials exceed the established criteria and allow reasonable time
for MLP to mitigate the problem.  

 

6.                                       Payment Terms.  Payments shall be made within thirty (30)
days after the date of delivery FOB the Plant. 

 

7.                                       PACA Lien.  MF acknowledges, that all payments owed by it
to MLP relating to deliveries of WIS macadamia nuts are subject to, and secured by,
the provisions of the Perishable Agricultural Commodities Act of 1930.  Notwithstanding the foregoing, MLP warrants
to MF, that all WIS macadamia nuts sold by MLP to MF, pursuant to the
terms hereof, shall be free and clear of all liens, security interests,
encumbrances, and claims whatsoever, and that MLP has good and clear title
thereto.

 

8.                                       Sampling.  MF and MLP shall use such methods and
procedures as are appropriate to enable MF to determine the gross WIS weight,
the moisture content and the kernel recovery of the WIS macadamia nuts
delivered to it by MLP as accurately as reasonably possible.  The procedures to be used in sampling to
determine the gross WIS weight delivered (after Extraneous material), moisture
content, and kernel recovery, and in calculating the payment to MLP, for the
WIS macadamia nuts purchased by MF, are set forth on Exhibit B
attached hereto. Any deviations from the foregoing sampling procedure shall be
by mutual written agreement only.

 

9.                                       Accounting and
Reports.  MF shall keep full and accurate records and
accounts showing, among other things, dates of delivery, the weights of the WIS
macadamia nuts upon delivery, and all other information that
may be necessary or desirable in order to calculate and verify payments to MLP
under this Agreement. 

 

Each payment for deliveries
of WIS macadamia nuts
shall be accompanied by a written report to MLP providing the WIS delivery
weight, the quality analysis reports, and the calculations that determine
payment.

 

MLP
shall be entitled to observe the sampling process, upon giving reasonable,
advance notice to MF and shall be entitled to receive any information necessary
or desirable to verify the accuracy of the WIS macadamia
nut price or
payment therefor.  To the extent that
information is shared between the parties hereunder and is not in the public
domain, both parties agree to keep such information confidential, except as may
be required by law or in order to enforce the terms and conditions
of this Agreement.

 

 

10.                                 Termination.  The parties may terminate this Agreement, at
any time, by mutual agreement, in writing. 
In the event that either party shall be in default hereunder (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.  The right-of-termination shall not
exclusive.  Both parties shall be
entitled to exercise any other right or remedy provided at law or in equity.
Notwithstanding the foregoing, neither party shall be entitled to recover
punitive, special, incidental, exemplary, or consequential damages. 

 

A party shall be in “default”
under this Agreement in the event that (i) it files any voluntary
proceeding for dissolution or liquidation 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
sixty (60) days; (iii) it makes any composition with, or assignment for
the benefit of, its creditors; (iv) it enters into any corporate
reorganization, sale of 

 

business or acquisition
without making adequate provision for the performance of its obligations under
this Agreement, (v) it fails to perform any of its obligations hereunder
when due and fails to correct such non-performance within thirty (30) days
after written demand for performance is made by the other party; or
(vi) it repeatedly fails to perform its obligations under this Agreement,
except after written demand for performance.

 

11.                                 Notices.  For convenience of operations hereunder, each
of MF and MLP shall designate one representative to serve as the channel of
communication for delivering information to, and securing necessary action by,
its principals.  Either 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 to its authorized representative at the
address set forth below, if served either personally, or if deposited in the
United States Mail, certified or registered, postage prepaid, or if sent by
fax.

 

	
  MF:

  	
  Mac Farms of Hawaii, LLC

  
	
   

  	
  89-406 Mamalohoa Highway

  
	
   

  	
  Captain Cook, Hawaii 96704

  
	
   

  	
  Attention: President

  
	
   

  	
  Fax: (808) 328-2080

  
	
   

  	
   

  
	
  MLP:

  	
  ML Macadamia Orchards, L.P.

  
	
   

  	
  26-238 Hawaii Belt Road

  
	
   

  	
  Hilo, Hawaii 96720

  
	
   

  	
  Attention: President

  
	
   

  	
  Fax: (808) 969-8152

  

 

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 twenty-four (24) hours after the
transmission thereof and receipt of the proper confirmation code, unless the
transmission is received on a Saturday, Sunday, or a holiday, in which case the
transmission shall be deemed to have been received on the next business
day.  Either party may change its address
for the purpose of receiving notices as herein provided by a written notice
given to the other party.

 

12.                                 Force Majeure.  Neither party shall be liable or accountable
to the other party for any delay in complying, or failure to comply, with any
of the terms, provisions, or conditions of this Agreement, in the event that
any such delay or failure shall have been caused by an act of God, strike,
lockout, public enemy, war, civil commotion, riot, judicial, or governmental
order, or other requirements of law which directly prohibit the performance by
either party of its obligations hereunder (including, 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, 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.  In the
event that any such event of force majeure shall have a material adverse
economic impact on the price or marketability of macadamia nuts, either party
may terminate this Agreement upon giving ninety (90) day’s prior written notice
to the other party.  

 

The party invoking the
protections of this clause shall give prompt, written notice to the other party
of the commencement and termination of the applicable event of force majeure,
and, upon the termination of any such event of force majeure, shall promptly
commence performing its obligations hereunder. Further, during any such delay
in performance or failure to perform by MLP, MF may elect to purchase the WIS macadamia nuts from other sources
and, at MF’s sole option, apply such purchases to reduce the quantity of the
WIS macadamia nuts deliverable hereunder. 

 

13.                                 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 established between the
parties during the course of the term of this Agreement be construed to waive
or 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.

 

14.                                 Assignment.  Neither party may assign any of its rights or
obligations hereunder without the prior written consent of the other party,
which consent shall not be unreasonably
withheld, delayed, denied, or conditioned.  

 

15.                                 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 partnership is created hereby,
and that neither party shall act as an agent for the other party.

 

 

16.                                 Mediation  Any and all matters in dispute arising from
or relating to this contract/agreement, or the breach thereof, which remain
unresolved after direct negotiation between the parties, shall first be
submitted to confidential mediation in accordance with the Rules, Procedures
and Protocols for Mediation of Dispute Prevention &
Resolution, Inc., then in effect. The parties agree that a good faith
attempt to resolve all issues in mediation is a pre-condition to further
adversarial proceedings of any kind. 

 

17.                                 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.

 

18.                                 Authority.  Each party hereto represents and warrants to
the other party, that it has full authority to enter into this Agreement, and
that its execution and delivery hereof has been duly-authorized by all
appropriate action.

 

19.                                 Severability.  Whenever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid
under applicable law, but if any provision of this Agreement shall be
prohibited by or invalid under applicable law, such provision shall be
ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of
this Agreement.

 

20.                                 Counterparts.  This Agreement may be executed in
counterparts, each of which shall be deemed an original, but all of which
together shall constitute the entire Agreement.

 

21.                                 Headings.  The headings in this Agreement are for
convenience only, and are not to be construed as part of the Agreement and
shall not in any way effect the interpretation of this Agreement.

 

 

IN WITNESS
WHEREOF, MF and MLP have caused this Agreement to
be executed and delivered by their duly-authorized representatives as of the
date first above written.

 

 

	
   

  	
   

  	
  MAC
  FARMS OF HAWAII, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Hilary Brown

  	
   

  
	
   

  	
   

  	
  HILARY BROWN, President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ML
  MACADAMIA ORCHARDS, L.P.

  
	
   

  	
   

  	
  By: ML Resources, Inc., its general
  partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Dennis J. Simonis

  	
   

  
	
   

  	
   

  	
  DENNIS J. SIMONIS,
  President

  

 

 

EXHIBIT A

 

PROCEDURES FOR DETERMINATION OF GLOBAL MACADAMIA PRICES

 

1.                                       If
the parties fail or are unable to agree upon a contract price by
November 15th for any January-June period or by
May 15th for any July-December period during the term
hereof, the following procedures shall be used to determine the Global Macadamia
Kernel Price, as defined herein.  This
Global Macadamia Kernel Price shall then be converted to a WIS contract price
equal to 15.2% of the Global Macadamia Kernel Price.  

 

2.                                       The
parties shall mutually-select an independent third-party broker or specialist
(the “Specialist”) from the list below with current experience and transactions
in the macadamia nut market.  The
Specialist shall be independent and shall have no material business
relationship with either party.

 

a.                                       J.F.
Braun & Associates

b.                                      Trademark
Commodities Inc.

c.                                       Jennings &
Associates

d.                                      Debbie
Roy Brokerage

e.                                       York
Sutch & Associates

 

If the parties shall be unable to mutually
agree upon a Specialist, then the parties shall alternately delete one name
each from the list, until only one Specialist is left.  

 

3.                                       The
Specialist shall determine the average, current spot price per-pound for bulk
premium (Hawaiian and Australian) Style II raw macadamia nuts (FOB West Coast)
(the “Global Macadamia Kernel Price”). 
Any distressed or discounted sales for old or inferior macadamia nuts shall be excluded from
the determination.  The Specialist shall
thereupon issue a certified report of the foregoing to the parties, which
report shall state the average price per pound for the applicable period, together
with the methodology, procedure and actual sample of transactions utilized in
the calculation.

 

4.                                       If
neither party objects to the reported Global Macadamia Kernel Price, as
determined above, the WIS contract price will be 15.2% of the Global Macadamia Kernel
Price.

 

5.                                       If
either party challenges the conclusions of the report within fifteen (15) days
of the issuance thereof, the parties shall attempt to resolve the pricing
issues through good faith negotiations. 
In the event that the parties fail or are unable to reach a final
agreement as to the contract price within fifteen (15) days, the objecting
party may, at its own cost, engage a second, qualified, independent,
third-party broker or specialist to prepare a second certified price report
using the procedures set forth in item no. 3 above.  The results of the two reports shall be
averaged to determine the Global Macadamia Kernel Price.  The Global Macadamia Kernel Price, as determined
by the independent third-party broker(s) or specialist(s), as the case may be,
shall be converted to a WIS macadamia nut contract price using a conversion
factor of 15.2% of the Global Macadamia Kernel Price.

 

 

EXHIBIT B

 

Procedure for Sampling NIS for Payment Purposes

 

1.  Upon delivery, weigh or
verify certified weight ticket to determine the Gross Weight of each
wet-in-shell (“WIS”) shipment. A shipment (“shipment”) shall mean one load
delivered on a single day.  Additional
loads delivered on the same day will be treated as individual shipments, i.e.
separate weights and samples.  MF will
provide, upon delivery, a receipt that states the weight of each shipment
delivered by MLP.

 

2.  MLP will provide samples from
its continuous sampler until MF has the ability to draw a continuous sample
from throughout the delivered shipment of mutually agreed upon quantity of
nuts.  MF will collect a minimum of 60
lbs. from each shipment through it continuous sampler to determine the moisture
content, amount of extraneous material, kernel quality and recovery.  The material shall be further split into two
sub-samples, A and B, of 20 lbs. each. 
Determine the amount of extraneous material in sub-sample “A” and the
Gross Weight WIS Delivered as described in paragraph 3.  The balance of sub-sample “A” shall be used
to determine the moisture content, spoilage and kernel recovery as described in
paragraph 4. Sub-sample “B” shall be held for 30 days and used for confirmation
of the results for sub-sample “A” when requested by MLP.

 

3.  Weigh the sample and record
the weight of WIS designated herein as “W”. 
For loads received as WIS a sample will be taken and weighed. This
weight will be recorded. Any Extraneous material (trash, husk, empty nuts, rat
damaged nuts, sticks, rocks, nuts with mechanically fractured shell exposing
kernel and peewee nuts (< 5/8” in diameter)) that were captured in the
sample will be removed from the sample and weighed. The ratio of weight for the
Extraneous material to the total weight of sub-sample “A” will be applied to
the Gross Weight of the shipment to determine the Gross Weight WIS Delivered
(after Extraneous material), herein designated “GW”.

 

4.  Split the sample into two
lots, one to determine moisture (“moisture sample”) and the other to determine
spoilage and kernel recovery (“quality sample”).  Two (2) lbs. of sub-sample “A” shall be
used to determine the moisture content as described in paragraph 5.  Ten (10) lbs. of sub-sample “A” shall be
used to determine the spoilage and recovery for each shipment as described in
paragraphs 6 to 11.

 

5.  Weigh the moisture sample and
record the weight.  Dry the sample at
approximately 250 degrees Fahrenheit for a period of 1 day.  Weigh the dried sample and record the weight
after drying.  Divide the difference in
weight prior to and after drying by the weight prior to drying.  The result is the percentage of moisture of
the WIS nuts designated herein as “M”.

 

6.  Weigh the quality sample and
record the weight. Dry the sample at approximately 122 degrees Fahrenheit for 3
days then raise the temperature to 140 degrees Fahrenheit for 2 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 shells from the kernels. 
Determine the weight of the recovered raw kernels.  Roast all recovered kernel at 260 degrees
Fahrenheit for 35 minutes in a convection oven.

 

8.  Inspect the roasted kernels
and separate unsaleable kernels and record the weights of the following
categories.

a)  
Stinkbug damage (>2 spots)

b)   Koa Seed Worm damage

c)   Tropical Nut Borer damage

d)  
Mold

e)  
Germination

f)   Immature/Shrivels

g)  
Total a) through f)

 

Record the data and summarize for field
management purposes.

 

9.  Using Hawaii, Department of
Agriculture “Standards for Hawaii-Grown Shelled Macadamia Nuts” criteria,
separate out the salable kernel and record the weight.  The weight, in grams, of salable kernel is
designated herein as “Y”.

 

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

 

KR = Y/X

 

11.  Determine spoilage
percentages for each category of unusable as follows:

 

For each category of unusable, divide the
recorded category

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

 

12.  Determine Payable Pounds for
the load.

 

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

 

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

 

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

 

P = WM*(KR/.3)

 

 

13.  Sample Calculation.

 

Gross Weight WIS Delivered (after
Ex-       45,000 lbs traneous material)

	
  Moisture
  (from sample)

  	
   

  	
  21.0

  	
  %

  
	
  Salable Kernel Recovery (from sample)

  	
   

  	
  30.5

  	
  %

  
	
  Price (e.g. 1st year volume
  price)

  	
   

  	
  $

  	
  .85

  	
   

  
					

 

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 (Contract Pounds)

Payment = 45,178 lbs * $0.85  =                            $38,401.30

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