Document:

ex10-2.htm

Exhibit 10.2

 

MANAGEMENT AND INCENTIVE FEE WAIVER AGREEMENT

 

This MANAGEMENT AND INCENTIVE FEE WAIVER AGREEMENT (the “Agreement”) dated as of June 30, 2016, is entered into by and between ROYAL HAWAIIAN ORCHARDS, L.P., a Delaware limited partnership (the “Partnership”) and ROYAL HAWAIIAN RESOURCES, INC., a Hawaii corporation and the sole general partner of the Partnership (“RHR”).

 

WHEREAS, pursuant to Section 4.1 of that certain Amended and Restated Agreement of Limited Partnership of the Partnership entered into as of April 14, 1986, as amended and restated as of October 14, 1989, as further amended and restated effective as of March 10, 2008, as further amended and restated effective as of October 1, 2012, and as amended by Amendment to the Amended and Restated Agreement of Limited Partnership dated November 1, 2013 (the “Limited Partnership Agreement”), the Partnership must pay an annual Management Fee (as defined the Limited Partnership Agreement) to the managing general partner of the Partnership;

 

WHEREAS, pursuant to Section 4.2 of the Limited Partnership Agreement, the Partnership must pay an annual Incentive Fee (as defined the Limited Partnership Agreement) to the managing general partner of the Partnership for services rendered in managing the Partnership’s activities;

 

WHEREAS, pursuant to Section 4.5 of the Limited Partnership Agreement, the Partnership must pay all expenses, disbursements and advances incurred by the general partners of the Partnership in connection with the conduct of Partnership business;

 

WHEREAS, RHR is the sole general partner of the Partnership;

 

WHEREAS, the Partnership, the sole shareholder of RHR, is contemplating the possible sale of all of the capital stock of RHR to a third party that is affiliated with Bradford C. Nelson, a member of the board of directors of RHR (the “RHR Sale Transaction”);

 

WHEREAS, each member of the board of directors of RHR has been fully apprised of, and is aware of, the nature and extent of the relationships and interests set forth in the foregoing recital and all material facts related thereto; and

 

WHEREAS, in connection with the RHR Sale Transaction, RHR desires to voluntarily waive its rights to receive any Management Fees or Incentive Fees that may become payable to RHR for services rendered or to be rendered to the Partnership during the fiscal years ending December 31, 2016, 2017 and 2018 (the “Waiver Period”).

 

NOW THEREFORE, the parties hereto, intending to be legally bound, hereby agree as follows:

 

1.     Waiver. Effective as of the date hereof, RHR hereby voluntarily waives its rights to receive any Management Fees or Incentive Fees that become payable to RHR for services rendered or to be rendered in managing the Partnership’s activities during the Waiver Period; provided that such waiver shall not affect the rights of RHR or any other general partner of the Partnership to be reimbursed by the Partnership for all expenses, disbursements and advances incurred by the general partners of the Partnership in connection with the conduct of Partnership business pursuant to Section 4.5 of the Limited Partnership Agreement.

 

 

 

 

 

2.     Governing Law. This Agreement shall be governed by and construed in accordance with the internal laws of the State of Delaware without giving effect to any choice or conflict of law provision or rule (whether of the State of Delaware or any other jurisdiction).

 

3.     Interpretation. Unless the context otherwise requires, references herein to an agreement, instrument or other document means such agreement, instrument or other document as amended, supplemented and modified from time to time to the extent permitted by the provisions thereof.

 

4.     Headings. The headings in this Agreement are for reference only and shall not affect the interpretation of this Agreement.

 

5.     Entire Agreement. This Agreement constitutes the sole and entire agreement of the parties to this Agreement with respect to the subject matter contained herein, and supersedes all prior and contemporaneous understandings, agreements, representations and warranties, both written and oral, with respect to such subject matter.

 

6.     Amendment and Modification. This Agreement may only be amended, modified or supplemented by an agreement in writing signed by each party hereto.

 

7.     Counterparts; Signatures. This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together shall be deemed to be one and the same agreement. A signed copy of this Agreement delivered by facsimile, e-mail or other means of electronic transmission shall be deemed to have the same legal effect as delivery of an original signed copy of this Agreement.

 

[Signature page follows]

 

 

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered as of the date first written above.

 

 

	  	
ROYAL HAWAIIAN ORCHARDS, L.P.

	 	 
	  	
By: ROYAL HAWAIIAN RESOURCES, 

INC., its Managing Partner

	 	 
	 	 
	 	 
	 	By:	/s/ James S. Kendrick	 
	 	Name:	James Kendrick	 
	 	Title:	Authorized Representative	 
	  	  
	 	 
	 	
ROYAL HAWAIIAN RESOURCES, INC.

	 	 
	 	 
	 	 
	 	By: 	
/s/ Bradford C. Nelson
	 
	 	Name:	Bradford C. Nelson	 
	 	Title:	President	 

 

 

 

[Signature Page to Management and Incentive Fee Waiver Agreement]ex10-3.htm

Exhibit 10.3

 

fifTH amendment to AMENDED AND RESTATED credit AGREEMENT AND consent

 

This Fifth Amendment to Amended and Restated Credit Agreement and Consent dated as of June 30, 2016 (this “Amendment”), is made by and among American AgCredit, PCA, in its capacity as agent under the Credit Agreement referred to below (in such capacity, “Agent”), the “Lenders” under and as defined in such Credit Agreement, Royal Hawaiian Orchards, L.P., a Delaware limited partnership (“RHO”), Royal Hawaiian Resources, Inc., a Hawaii corporation (“RHR”), Royal Hawaiian Services, LLC, a Hawaii limited liability company (“RHS”), and Royal Hawaiian Macadamia Nut, Inc., a Hawaii corporation (“RHMN” and, together with RHO, RHR, and RHS, collectively “Borrowers” and each, a “Borrower” and, together with any other “Credit Party” under and as defined in the Credit Agreement, the “Credit Parties”), and RHO, as Borrower Representative, with reference to the following: 

 

RECITALS

 

A.     Agent, Lenders, and the Credit Parties are parties to that certain Amended and Restated Credit Agreement, dated as of March 27, 2015, as amended by a First Amendment to Amended and Restated Credit Agreement dated as of June 15, 2015, a Second Amendment to Amended and Restated Credit Agreement dated as of June 29, 2015, a Third Amendment to Amended and Restated Credit Agreement dated as of September 22, 2015, and a Fourth Amendment to Amended and Restated Credit Agreement and Waiver dated as of March 11, 2016 (as it may be further amended, restated, modified or supplemented from time to time, the “Credit Agreement”).

 

B.     The Credit Parties have requested that Agent and Lenders consent to RHO selling the stock of RHR to a third party and to certain amendments to the Loan Documents, including the release of RHR from any liability under any of the Loan Documents (other than in its capacity as general partner of RHO). Agent and Lenders are willing to do so on the terms and conditions set forth in this Amendment.

 

In consideration of the foregoing, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

 

ARTICLE I     
ACKNOWLEDGMENTS, AGREEMENTS, and consent

 

Section 1.1     Affirmation of Recitals; Defined Terms. Each Credit Party acknowledges and confirms that each of the recitals set forth above is true and correct. Capitalized terms used in this Amendment without being defined shall have the meaning given to those terms in the Credit Agreement (including any new or modified terms arising out of this Amendment).

 

Section 1.2     Outstanding Indebtedness. Each Credit Party acknowledges and confirms that all amounts owed by the Credit Parties to Agent and Lenders under the Loan Documents are duly and validly owing and that such amounts are not subject to any defense, counterclaim, recoupment or offset of any kind.

 

 

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Section 1.3     Description of Transaction. Borrowers propose to enter into and close the following transaction (the “Transaction”): (a) RHO will sell one hundred percent (100%) of the common stock of RHR (the “RHR Stock”) to Crescent River Agriculture, LLC (the “Buyer”) pursuant to the Stock Purchase Agreement, made effective as of June 30, 2016, between RHO and Buyer (the “Purchase Agreement”), (b) the purchase price for the RHR Stock will be ________________________ (the “Purchase Price”), all of which shall be payable in cash in full at closing and there are no holdbacks or similar items affecting the proceeds, and (c) the full amount of the Purchase Price, less any closing costs for which RHO is responsible, shall be immediately released to RHO and be available for use by RHO for its working capital needs.

 

Section 1.4     Consent to Transaction. Agent and Lenders hereby consent to the Transaction provided that (a) the transaction closes no later than September 1, 2016 (the “Deadline Date”), (b) the final form of the documents evidencing the Transaction are approved by Agent’s counsel, and (c) at the time of the closing of the Transaction RHR shall have no assets other than its general partnership interest in RHO, cash in its bank account at Bank of Hawaii with a balance not in excess of Five Thousand Dollars ($5,000), and other assets with an aggregate value not in excess of Five Thousand Dollars ($5,000).

 

Section 1.5     Release of RHR as Borrower and Release of Security Interest in RHR Stock and RHR Property. Subject to the consent required in Section 1.4, upon the closing of the Transaction, the following shall immediately and automatically occur on the closing of the Transaction: (a) RHR shall no longer be a Borrower or a Credit Party under any Loan Document, (b) RHR shall no longer be a party to the Credit Agreement, the Security Agreement, the 2010 Term Loan Note, the 2015 Bridge Loan Note, the 2015 Term Loan Note, the Revolving Note, or any other Loan Document, (c) RHR shall be fully released and forever discharged from all liability (including any contingent obligations and indemnity obligations) under the Credit Agreement, the Security Agreement, the 2010 Term Loan Note, the 2015 Bridge Loan Note, the 2015 Term Loan Note, the Revolving Note, and the other Loan Documents; provided, however, that RHR shall continue to have whatever liability a general partner has with respect to the obligations of a partnership in which it is a general partner, and (d) any security interest or lien of Agent granted pursuant to any Collateral Document on any property or assets of RHR or in the RHR Stock shall be canceled, terminated, discharged and released and the Buyer shall acquire the RHR Stock free and clear of the security interest of Agent. 

 

Section 1.6     No Release of General Partner Liability. Nothing in this Amendment or the transactions contemplated by this Amendment shall release or limit the liability of RHR in its capacity as a general partner of RHO. RHR shall continue to be liable for the obligations of RHO to the extent such liability exists under applicable law. The intent of the parties is that the obligations of RHR shall be no greater and no less than the obligations of a general partner of a partnership that does not separately execute loan documents in its individual capacity.

 

Section 1.7     Document Delivery. If requested by RHO, Agent shall deliver into the Transaction closing escrow a letter addressed to the Buyer informing the Buyer that upon closing of the Transaction the security interest of Agent in the property and assets of RHR and the RHR Stock will be released and that the Buyer will acquire the RHR Stock free and clear of the security interest of Agent.

 

 

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Section 1.8     Amendment of Deposit Account Control Agreement. Upon the closing of the Transaction, at the request of RHO, Agent shall execute and deliver to Bank of Hawaii an amendment to that certain Deposit Account Control Agreement and Acknowledgement of Security Interest, dated February 3, 2015, by and among RHO, Agent and Bank of Hawaii, in order to remove deposit account number 83-376554.

 

Section 1.9     Termination of Financing Statement. Upon the closing of the Transaction, Agent authorizes RHR, RHO and their respective designees to file a UCC termination statement with the Bureau of Conveyances of the State of Hawaii substantially in the form of Exhibit A attached hereto.

 

Section 1.10     Delivery of Certificates. If RHO has delivered to Agent any certificates representing stock of RHR or transfer powers with respect thereto, Agent shall promptly after the closing of the Transaction return to RHO (or cause to be delivered to RHO’s designee) the original of such certificates and transfer powers or, if such certificates cannot be located, an affidavit of lost instrument or similar document concerning said certificate or certificates.

 

Section 1.11     Additional Release Documents. If RHO shall discover any additional public records documents evidencing the liens and security interests released by this Amendment, Agent shall at the request of RHO deliver to RHO (at RHO’s expense) such documents as are reasonably necessary to remove such documents from the public record.

 

Section 1.12     Amendment Fee. Agent and Lenders have determined not to charge Borrowers a fee in connection with this Amendment. Agent and Lenders reserve the right to charge a fee in connection with any future amendment, waiver, consent, or other accommodation provided to Borrowers. 

 

ARTICLE II     
AMENDMENTS TO CREDIT AGREEMENT and other loan documents

 

Section 2.1     Effectiveness of Amendments in this Article II. The amendments to the Credit Agreement and other Loan Documents set forth in this Article II shall go into effect immediately and automatically upon the closing of the Transaction without any further action of the parties. If the Transaction does not close by the Deadline Date, then the amendments to the Credit Agreement and other Loan Documents set forth in this Article II shall not go into effect.

 

Section 2.2     Deletion of RHR as a Party to the Loan Documents. Each of the Credit Agreement, the Security Agreement, the 2010 Term Loan Note, the 2015 Bridge Loan Note, the 2015 Term Loan Note, the Revolving Note, and the other Loan Documents are hereby amended to delete RHR as a party to such Loan Document.

 

Section 2.3     Additional Amendments. Without limiting the generality of Section 2.2:

 

(a)     Amendment to First Paragraph of the Credit Agreement. The first paragraph of the Credit Agreement is hereby amended to (a) delete “Royal Hawaiian Resources, Inc., a Hawaii corporation (“RHR”),”, and (b) delete “together with RHO, RHR, and RHS,” and replace it with “together with RHO and RHS,”.

 

 

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(b)     Amendment to Section 1.01 of the Credit Agreement. Section 1.01 of the Credit Agreement is hereby amended to add the following definition in appropriate alphabetical order:

 

“RHR” means Royal Hawaiian Resources, Inc., a Hawaii corporation.

 

(c)     Amendment of Schedule 11.2 of the Credit Agreement. Schedule 11.2 of the Credit Agreement is hereby amended to (a) delete “Royal Hawaiian Resources, Inc.” under the heading “BORROWERS”, and (b) under the heading “AMERICAN AGCREDIT, PCA”, change “Royal Hawaiian Resources” each time it appears to “Royal Hawaiian Orchards”.

 

(d)     Amendment to Disclosure Schedule to the Credit Agreement. The Disclosure Schedule to the Credit Agreement is hereby amended to (a) delete “Royal Hawaiian Orchards, L.P. v. Edmund C. Olson, in his capacity as trustee of the Edmund C. Olson Trust No. 2; the Edmund C. Olson Trust No. 2; and DOES 1-50, collectively, U.S. District Court, Central District of California – Western Division, Case No. 2:14-CV-08984, filed November 20, 2014.”, (b) delete “RHR, RHS, and RHMN are Subsidiaries of RHO” and replace it with “RHS and RHMN are Subsidiaries of RHO”, (c) delete “RHR, RHS, and RHMN have no Subsidiaries” and replace it with “RHS and RHMN have no Subsidiaries, and (d) delete “RHR – Checking – 54”.

 

(e)     Amendment of Exhibit C to the Credit Agreement. Exhibit C to the Credit Agreement is hereby amended to (a) delete “ROYAL HAWAIIAN RESOURCES, INC.,” from the heading, and (b) delete “Royal Hawaiian Resources, Inc., a Hawaii corporation” from the first paragraph.

 

(f)     Additional Amendments to Security Agreement. Schedule I of the Security Agreement is hereby amended to (a) delete the phrase “ML Resources, Inc. (with respect to Royal Hawaiian Resources, Inc.)” under the heading “Additional Legal, Fictitious, or Trade Names” and (b) delete the phrase “Royal Hawaiian Resources, Inc. – Hawaii – Corporation – 63221 D1” under the heading “Organizational Information.” Schedule III of the Security Agreement is hereby amended to delete “The equity interests of RHO in its subsidiaries RHR, RHS, and RHMN.” and replace it with “The equity interests of RHO in its subsidiaries RHS and RHMN.”

 

ARTICLE III     
CONDITIONS TO EFFECTIVENESS

 

Section 3.1     Conditions Precedent. The effectiveness of this Amendment is subject to the satisfaction of the following conditions:

 

(a)     receipt by Agent of duly executed counterparts of this Amendment from each Credit Party and all Lenders and countersignature by Agent; 

 

 

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(b)     satisfaction of all conditions precedent set forth in any closing checklist delivered by Agent to Borrowers; and

 

(c)     if required by Agent, Borrowers shall have paid all reasonable and documented out-of-pocket costs and expenses of Agent and Lenders in connection with this Amendment, the Loan Documents and the transactions contemplated hereby including an estimate of such costs anticipated in connection with closing (it being understood that if Agent elects not to require payment prior to closing, Borrowers shall promptly pay such amounts upon being billed therefor by Agent).

 

ARTICLE IV     
MISCELLANEOUS

 

Section 4.1     Representations and Warranties. Each Credit Party hereby represents and warrants to Agent and Lenders that, as of the date hereof, (a) each Credit Party has the legal power and authority to execute and deliver this Amendment; (b) the officers of each Credit Party executing this Amendment have been duly authorized to execute and deliver the same and bind each Credit Party with respect to the provisions hereof; (c) the execution and delivery hereof by each Credit Party and the performance and observance by each Credit Party of the provisions hereof do not violate or conflict with any organizational document of any Person party hereto or any law applicable to any Credit Party or result in a breach of any provision of or constitute a default under any other agreement, instrument or document binding upon or enforceable against any Credit Party; (d)  no Default or Event of Default exists under the Credit Agreement other than any Events of Default being waived by this Amendment, nor will any occur immediately after the execution and delivery of this Amendment or by the performance or observance of any provision hereof; (e) no Credit Party is aware of any claim or offset against, or defense or counterclaim to, any of their obligations or liabilities under the Credit Agreement or any other Loan Document; (f) this Amendment and each document executed by any Credit Party in connection herewith constitute the valid and binding obligations of the applicable Credit Party, enforceable against such Credit Party in accordance with their terms, except as such enforceability may be limited by applicable bankruptcy, insolvency or similar laws affecting the enforcement of creditors’ rights generally or by equitable principles relating to enforceability; and (g) each of the representations and warranties made by such Credit Party in the Credit Agreement and in the other Loan Documents is true and correct in all material respects on and as of such date to the same extent as though made on and as of such date, except to the extent that any thereof expressly relate to an earlier date, in which case, such representations and warranties were true and correct in all material respects on and as of such earlier date.

 

Section 4.2     Release. Each Credit Party hereby releases, remises, acquits and forever discharges Agent and each of Lenders and their respective employees, agents, representatives, consultants, attorneys, fiduciaries, officers, directors, partners, predecessors, successors and assigns, subsidiary corporations, parent corporations, and related corporate divisions (collectively, the “Released Parties”), from any and all actions and causes of action, judgments, executions, suits, debts, claims, demands, liabilities, obligations, damages and expenses of any and every character, known or unknown, direct and/or indirect, at law or in equity, of whatsoever kind or nature, for or because of any matter or things done, omitted or suffered to be done by any of the Released Parties prior to and including the effectiveness of this Amendment, and in any way directly or indirectly arising out of or in any way connected to the Credit Agreement or the Loan Documents (collectively, the “Released Matters”). Each Credit Party acknowledges that the agreements in this paragraph are intended to be in full satisfaction of all or any alleged injuries or damages arising in connection with the Released Matters. 

 

 

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Each Credit Party hereby waives the provisions of any statute or doctrine to the effect that a general release does not extend to claims which the creditor does not know or suspect to exist in his favor at the time of executing the release, which if known by him must have materially affected his settlement with the debtor. Without limiting the generality of the foregoing, each Credit Party hereby waives the provisions of any statute that prevents a general release from extending to claims unknown by the releasing party, including Section 1542 of the California Civil Code which provides:

 

A general release does not extend to claims which the creditor does not know or suspect to exist in his or her favor at the time of executing the release, which if known by him or her must have materially affected his or her settlement with the debtor.

 

Each Credit Party acknowledges and understands the rights and benefits conferred by such a statute or doctrine and the risks associated with waiver thereof, and after receiving advice of counsel, hereby consciously and voluntarily waives, relinquishes and releases any and all rights and benefits available thereunder, insofar as they apply, or may be construed to apply, to each release set forth herein or contemplated hereby. In so doing, each Credit Party expressly acknowledges and understands that it may hereafter discover facts in addition to or different from those that it now believes to be true with respect to the subject matter of the disputes, claims and other matters released herein, but expressly agrees that it has taken these facts and possibilities into account in electing to make and to enter into this release, and that the releases given herein shall be and remain in effect as full and complete releases notwithstanding the discovery or existence of any such additional or different facts or possibilities.

 

This release may be pleaded as a full and complete defense and/or as a cross-complaint or counterclaim against any action, suit, or other proceeding that may be instituted, prosecuted or attempted in breach of this release. Each Credit Party acknowledges that the release contained herein constitutes a material inducement to Agent and each of the Lenders to enter into this Amendment and that Agent and those Lenders would not have done so but for Agent’s and each Lender’s expectation that such release is valid and enforceable in all events.

 

Section 4.3     Covenant Not to Sue. Each Credit Party, on behalf of itself and its successors, assigns, and other legal representatives, hereby absolutely, unconditionally and irrevocably, covenants and agrees with and in favor of each Released Party that it will not sue (at law, in equity, in any regulatory proceeding or otherwise) any Released Party on the basis of any Released Matter. If any Credit Party or any of its successors, assigns or other legal representatives violates the foregoing covenant, such Credit Party, for itself and its successors, assigns and legal representatives, agrees to pay, in addition to such other damages as any Released Party may sustain as a result of such violation, all attorneys’ fees and costs incurred by any Released Party as a result of such violation.

 

 

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Section 4.4    Loan Documents Unaffected. Except as otherwise specifically provided herein, all provisions of the Credit Agreement and the other Loan Documents shall remain in full force and effect and be unaffected hereby. The parties hereto acknowledge and agree that this Amendment constitutes a “Loan Document” under the terms of the Credit Agreement. 

 

Section 4.5     Guarantor Acknowledgement. Any Guarantor, by signing this Amendment:

 

(a)    consents and agrees to and acknowledges the terms of this Amendment;

 

(b)    acknowledges and agrees that all of the Loan Documents to which Guarantor is a party or otherwise bound shall continue in full force and effect and that all of Guarantor’s obligations thereunder shall be valid and enforceable and shall not be impaired or limited by the execution or effectiveness of this Amendment;

 

(c)    represents and warrants to Agent and Lenders that all representations and warranties made by Guarantor and contained in this Amendment or any other Loan Document to which it is a party are true and correct in all material respects on and as of the date of this Amendment to the same extent as though made on and as of such date, except to the extent that any thereof expressly relate to an earlier date; and

 

(d)    acknowledges and agrees that (i) notwithstanding the conditions to effectiveness set forth in this Amendment, Guarantor’s consent to this Amendment is not required under the terms of the Credit Agreement or any other Loan Document or as a matter of law, and (ii) nothing in the Credit Agreement, this Amendment or any other Loan Document shall be deemed to require the consent of Guarantor to any future amendments to, modifications of, consents under, or forbearances or waivers with regard to, the Credit Agreement.

 

Section 4.6     Costs, Expenses and Taxes.     Borrowers agree to pay on demand all reasonable and documented out-of-pocket costs and expenses of Agent in connection with the preparation, execution, delivery, administration, modification and amendment of this Amendment and the other instruments and documents to be delivered hereunder, including the reasonable and documented fees and out-of-pocket expenses of counsel for Agent with respect thereto and with respect to advising Agent as to its rights and responsibilities hereunder and thereunder. Borrowers further agree to pay on demand all reasonable and documented out-of-pocket costs and expenses, if any (including reasonable and documented counsel fees and expenses), in connection with the enforcement (whether through negotiations, legal proceedings or otherwise) of this Amendment and any other instruments and documents to be delivered hereunder, including reasonable and documented counsel fees and expenses in connection with the enforcement of rights under this section. In addition, Borrowers shall pay any and all stamp and other taxes payable or determined to be payable in connection with the execution and delivery of this Amendment and any other instruments and documents to be delivered hereunder, and agrees to save Agent harmless from and against any and all liabilities with respect to or resulting from any delay or omission to pay such taxes. The foregoing agreements shall be in addition to and not in lieu of any similar obligations under the Loan Documents.

 

 

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Section 4.7     No Other Promises or Inducements. There are no promises or inducements that have been made to any party hereto to cause such party to enter into this Amendment other than those that are set forth in this Amendment. This Amendment has been entered into by each Credit Party freely, voluntarily, with full knowledge, and without duress, and, in executing this Amendment, no Credit Party is relying on any other representations, either written or oral, express or implied, made to any Credit Party by Agent or any Lender. Each Credit Party agrees that the consideration received by each Credit Party under this Amendment has been actual and adequate.

 

Section 4.8     No Course of Dealing. Each Credit Party acknowledges and agrees that, (a) this Amendment is not intended to, nor shall it, establish any course of dealing between the Credit Parties, Agent and Lenders that is inconsistent with the express terms of the Credit Agreement or any other Loan Document, (b) notwithstanding any course of dealing between the Credit Parties, Agent and Lenders prior to the date hereof, except as set forth herein, Lenders shall not be obligated to make any Loan, except in accordance with the terms and conditions of this Amendment and the Credit Agreement, and (c) neither Agent nor Lenders shall be under any obligation to forbear from exercising any of their respective rights or remedies upon the occurrence of any Default or Event of Default other than those that have been waived under this Amendment. Nothing herein modifies the agreements among Agent and Lenders with respect to the exercise of their respective rights and remedies under the terms of the Credit Agreement. 

 

Section 4.9    No Waiver. Each Credit Party acknowledges and agrees that (a) except as expressly provided herein, this Amendment shall not operate as a waiver of any right, power or remedy of Agent or Lenders under the Credit Agreement or any other Loan Document, nor shall it constitute a continuing waiver at any time, and (b) nothing herein shall in any way prejudice the rights and remedies of Agent or Lenders under the Credit Agreement, any Loan Document or applicable law. In addition, Agent and Lenders shall have the right to waive any condition or conditions set forth in this Amendment, the Credit Agreement or any other Loan Document, in their sole discretion, and any such waiver shall not prejudice, waive or reduce any other right or remedy that Agent or Lenders may have against any Credit Party.

 

Section 4.10   Reaffirmation. Each Credit Party (other than RHR), as debtor, grantor, pledgor, guarantor, assignor, or in any other similar capacity in which such Credit Party grants liens or security interests in its property or otherwise acts as accommodation party or guarantor, as the case may be, hereby (a) ratifies and reaffirms all of its payment and performance obligations, contingent or otherwise, under each of the Loan Documents to which it is a party (after giving effect hereto) and (b) to the extent such Person granted liens on or security interests in any of its property pursuant to any such Loan Document as security for the Obligations under or with respect to the Loan Documents, ratifies and reaffirms such grant of security interests and liens and confirms and agrees that such security interests and liens hereafter secure all of the Obligations as amended hereby. Each Credit Party hereby acknowledges that each of the Loan Documents remains in full force and effect and is hereby ratified and reaffirmed. The execution of this Amendment shall not operate as a waiver of any right, power or remedy of Agent or any Lender, constitute a waiver of any provision of any of the Loan Documents or serve to effect a novation of the Obligations. Each Credit Party acknowledges that all references in the Credit Agreement to the “Agreement” or the “Credit Agreement” shall mean the Credit Agreement, as amended hereby, and all references in the Loan Documents to the “Credit Agreement” shall mean the Credit Agreement, as amended hereby. 

 

 

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Section 4.11     Modification; Waiver. This Amendment may not be modified orally, but only by an agreement in writing signed by the parties hereto. Any provision of this Amendment can be waived, amended, supplemented or modified by written agreement of the parties hereto. 

 

Section 4.12     Governing Law. THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF CALIFORNIA APPLICABLE TO CONTRACTS MADE AND PERFORMED IN SUCH STATE WITHOUT REGARD TO THE PRINCIPLES THEREOF REGARDING CONFLICTS OF LAWS.

 

Section 4.13     Entire Agreement. This Amendment sets forth the entire agreement and understanding among the parties as to the subject matter hereof and merges and supersedes all prior discussions, agreements, and undertakings of every kind and nature among them with respect to the subject matter hereof. 

 

Section 4.14     Counterparts; Facsimile or Electronic Transmission of Signature. This Amendment may be executed by one or more of the parties to this Amendment on any number of separate counterparts, and all of said counterparts taken together shall be deemed to constitute one and the same instrument. The manual signature of any party hereto that is transmitted to any other party or its counsel by facsimile or electronic transmission shall be deemed for all purposes to be an original signature.

 

Section 4.15     Severability of Provisions; Captions; Attachments; Interpretation. Any provision of this Amendment which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. The captions to Sections and subsections herein are inserted for convenience only and shall be ignored in interpreting the provisions of this Amendment. Each schedule or exhibit attached to this Amendment shall be incorporated herein and shall be deemed to be a part hereof. Words in the singular include the plural and words in the plural include the singular. Use of the term “includes” or “including,” shall mean “including, but not limited to.” 

 

Section 4.16     JURY TRIAL WAIVER. EACH OF THE UNDERSIGNED, HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE, TO THE EXTENT PERMITTED BY APPLICABLE LAW, TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AMENDMENT AND FOR ANY COUNTERCLAIM HEREIN.

 

[Remainder of page intentionally left blank; signatures begin on following page.]

 

 

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IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of the date first above written.

 

	 	
BORROWERS:

	 	 	 
	 	
ROYAL HAWAIIAN ORCHARDS, L.P., a Delaware limited partnership

	 	 	 
	 	
By: 
	
Royal Hawaiian Resources, Inc., a Hawaii corporation, its managing general partner

	 	 	 
	 	 	
By: 
	/s/ Bradford Nelson	 
	 	 	
Name: 
	      Bradford Nelson
	 	 	
Title: 
	      President

 

	 	
ROYAL HAWAIIAN RESOURCES, INC., a Hawaii corporation

	 	 	 	 
	 	
By: 
	/s/ Bradford Nelson	 
	 	
Name:
	      Bradford Nelson	 
	 	
Title:
	      President	 

 

 

	 	
ROYAL HAWAIIAN SERVICES, LLC, a Hawaii limited liability company

	 	 	 
	 	
By: 
	
Royal Hawaiian Orchards, L.P., a Delaware limited liability company, its member

	 	 	 
	 	 	
By:
	Royal Hawaiian Resources, Inc., a Hawaii corporation, its managing general partner
	 	 	 	 
	 	 	 	By:	/s/ Bradford Nelson	 
	 	 	 	Name: 	
      Bradford Nelson

	 	 	 	Title:	
      President

 

	 	
ROYAL HAWAIIAN MACADAMIA NUT, INC., a Hawaii corporation

	 	 
	 	
By: 
	/s/ Scott C. Wallace	 
	 	
Name: 
	      Scott C. Wallace	 
	 	Title: 	      President	 

  

 

Signature Page 1

 

 

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BORROWER REPRESENTATIVE: 

	 	 	 
	 	
ROYAL HAWAIIAN ORCHARDS, L.P., a Delaware limited partnership

	 	 	 
	 	
By:
	
Royal Hawaiian Resources, Inc., a Hawaii corporation, its managing general partner

	 	 	 
	 	 	By:	/s/ Bradford Nelson	 
	 	 	Name: 	
      Bradford Nelson

	 	 	Title:	
      President

  

 

[Signature Pages Continue]

 

 

 

Signature Page 2

 

 

2 

 

 

  

	
 
	
AMERICAN AGCREDIT, PCA,

as Agent and Lender  

	
 
	
 
	
 

	
 
	
By:
	
/s/ Janice T. Thede 

	
 
	
Name:
	
     Janice T. Thede 

	
 
	
Title: 
	
     Vice President 

 

 

Signature Page 3

 

 

 3

 

 

Exhibit A

 

UCC Termination Statement

 

See attached.

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