HNH NUT COMPANY PROCESSING AND MARKETING AGREEMENT
This PROCESSING AND MARKETING AGREEMENT (“Agreement”) is made and entered into _______________________, 2026 by and between HNH NUT COMPANY, a California corporation (“HNH”), and ___________________________________________ (“Grower”) (collectively referred to as the “Parties” and individually as a “Party”).
WITNESSETH:
WHEREAS, HNH is a processor and marketer of Pecans;
WHEREAS, Grower is engaged in farming Pecans and desires to have HNH process and market the Pecans of Grower as described in this Agreement;
WHEREAS, HNH desires to perform, or cause to be performed, such processing and marketing services identified in this Agreement pursuant to the terms and conditions hereinafter set forth; THEREFORE, IT IS MUTUALLY AGREED AS FOLLOWS:
1. COMMITMENT: Grower agrees to deliver Pecans to HNH for storing, processing, packaging, testing, selling, shipping, and other services as agreed and set forth in this Agreement. HNH agrees to process, market, and sell Grower’s Pecans as agreed and set forth in this Agreement.
2. TERM: The term of this Agreement is for the crop year commencing on November 1, 2026 and through said crop year until Final Payment.
3. APPOINTMENT OF HNH: Grower hereby appoints HNH as Grower’s exclusive agent to market in all receptive markets of the world, all the Pecans received by HNH.
4. MARKETING AND SALES CONDITIONS:
i. Market Prices: HNH will attempt in good faith to obtain the best market prices available; however, there can be no assurance that the best price will be obtained or that the Pecans can or will be sold at any price.
ii. Adjustments: HNH may negotiate and make reasonable adjustments or grant allowances that, in its opinion and for the benefit of Grower, are justifiable or necessary in order that sales are consummated.
HNH will not be liable for errors in judgment in exercising its rights or discharging its obligations under the Agreement.
iii. Parties’ Review of Performance: HNH and Grower may periodically meet and/or discuss performance under this Agreement. Such meetings or discussions will include, but not be limited to, market and quality conditions, movement of Pecans, shipping schedules, adjustments and any circumstances Confidential 1 of 10
affecting performance under this Agreement.
5. POOL PRICE:
i. Prior to HNH receiving Pecans and no later than November 1st of the crop year, HNH will set a Minimum Payment to be paid to Grower for inshell pecan pounds received by HNH. The Minimum Payment is subject to change on an annual basis for any renewal year. ii. The Minimum Payment is calculated by multiplying the Minimum Payment Rate by the inshell pounds received after Cleaning and Dehydration. The Minimum Payment is not subject to adjustments for quality and edible yield.
iii. In addition to the Minimum Payment, HNH will make a Market Payment that is subject to Market Prices, adjustments for edible yield as determined by the Certificate of Inspection and less all costs and fees to process, shell, sack, market, and ship. HNH will have sole discretion in determining the Market Payment and use its best efforts to pay Grower the maximum amount possible. iv. Any unpaid Grower balances existing at the time of Market Payment shall be deducted from the Market Payment.
v. See below and Exhibit A for details on Pool Price calculation methodology.
6. PAYMENT SCHEDULE: HNH will pay Grower according to the payment schedule below. Payment Dates and Minimum Payment are subject to change on an annual basis for any renewal year. HNH reserves the right to alter the payment schedule due to events of force majeure.
PAYMENT PMT # DATE* MINIMUM PAYMENT RATE
Minimum Payment First February 28 $0.60 Per Pound
Minimum Payment Second April 30 $0.60 Per Pound
Market Payment Final June 30 To Be Determined (market bonus) *Date is first occurrence after harvest
7. BY-PRODUCTS: All by–products (hulls, shells, blows, hash, and clean-outs, oil stocks, rocks, dirt and other foreign material) derived from cleaning, dehydrating or processing Grower’s Pecans will become the property of HNH.
8. ASSESSMENTS/FEES: HNH will be the handler of record for the Pecans received from Grower. On behalf of Grower, HNH will pay any voluntary and mandatory assessments, marketing orders, and/or levies to the American Pecan Council (APC), the American Pecan Promotion Board (APPB), other industry governing bodies, and/or any State or Federal bodies. All known Assessments will be itemized and deducted from Grower’s Second Payment and at such time HNH will be responsible for payment of Assessments. Unless mutually agreed to in writing by Parties, Grower and HNH will not be responsible for payment of any Assessments in the event that HNH is not the first handler of Pecans.
ASSESSMENT RATE
American Pecan Council (APC) $0.01 Per Pound
American Pecan Promotion Board (APPB) $0.02 Per Pound
Pool Price - Payment Calculation
Total Pool LBS Inshell 1,800,000
Total Pool Points 990,000
Pool Weighted Avg EY 55.0%
Total Pool Revenue $ 4,306,500
Total Pool Expenses $ 686,000 Estimated to be $0.30 to $0.40 per Inshell LB Net Pool Revenue $ 3,620,500
Net Pool Price per Point $ 3.66
Net Pool Price per Inshell LB $ 2.01
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9. DELIVERY:
i. Grower will contact HNH at least 48 hours prior to anticipated delivery of Pecans to receive delivery instructions, including but not limited to, location of HNH cleaning and dehydrating facility. ii. Prior to delivery of Pecans to HNH, Grower will provide HNH an executed Letter of Guarantee of Good Agricultural Practices (GAP) that includes a list of all pesticides, herbicides and fungicides used in the production of the Pecans.
iii. Grower will arrange transportation of green, wet Pecans to HNH’s receiving facility and pay any transportation costs for such delivery.
iv. After cleaning and dehydration, each received Pecan lot or load will be identified, sampled, and inspected to determine grade, defects, quality, and edible yield. v. Title to Pecans will transfer from Grower to HNH after the cleaned and dried nuts are weighed and received.
vi. HNH reserves the right to refuse acceptance of any Pecans not of merchantable quality or exceeding the USDA’s Inshell Defect Tolerances. HNH will have no obligation to pay for rejected Pecans, and Grower will remove the rejected Pecans from HNH’s premises within fifteen (15) days of receiving rejection notice.
vii. A Certificate of Inspection performed at HNH’s receiving facility is required for all delivered Pecans cleaned and dehydrated at other facilities not operated by HNH. Inspections performed at HNH’s facility will supersede any inspections occurring prior to delivery to HNH and be the basis of any payment and quality calculations. HNH reserves the right to require additional cleaning services or refuse acceptance after completion of a Certificate of Inspection. Grower is responsible for payment of any additional cleaning services, as determined by HNH, for Pecans cleaned and dehydrated prior to delivery to HNH.
10. CLEANING AND DEHYDRATING:
i. HNH will perform all cleaning and dehydrating services at its Visalia facility or an alternate, nearby facility, as determined by HNH. No later than November 1st, HNH will provide notice to Grower of the rate for Cleaning and Dehydration services. HNH may elect to deduct Cleaning and Dehydrating Fee from the second payment to Grower.
ii. If Grower elected to utilize HNH for Cleaning and Dehydration services, then the fee for such service will be deducted from Grower's second payment in the amount of $0.19 per pound for the 2026 crop year. iii. Grower is not obligated to utilize HNH for the cleaning and dehydrating of wet pecans. Delivery to HNH of Pecans cleaned and dehydrated at facilities not operated by HNH may require additional cleaning services. HNH will determine if additional cleaning services are necessary and Grower is responsible for payment of costs for such services.
11. GRADING:
i. HNH will order a Certification of Inspection for each cleaned and dehydrated Pecan lot or batch. Grower may contest the inspection results by ordering and paying for a second inspection, performed by the same inspection service, within five (5) days of HNH notifying Grower of the inspection results. HNH and Grower will use the average of the two reports as the basis for inspection results. HNH may notify Grower of the Certificate of Inspection results verbally by telephone or email. If Grower does not contest the inspection results within five (5) days of being notified by HNH, then Grower accepts the inspection results.
ii. Certificates of Inspection will be performed by an industry recognized, third-party inspection service, such as DFA of California. Certificates of Inspection will use the USDA’s most current “US Standards for Grades of Pecans in the Shell” to report results.
iii. Grower may be present during any process of the sampling and/or grading of Pecans.
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12. GROWER REPRESENTS AND WARRANTS THAT:
i. Grower warrants that Grower is the sole owner of the Pecans delivered to HNH free from all claims, liens and encumbrances asserted by third parties or will disclose if any such liens or encumbrances exist, by noting them below.
ii. Known liens or encumbrances: ________________________________________________________ iii. All Pecans will be grown and harvested in compliance with all applicable federal, state, and local laws and regulations including without limitation those laws and regulations governing application of pesticides, fungicides, herbicides, and any other chemicals. iv. Grower will indemnify, defend, and hold HNH harmless from any claims, costs, expenses, loss, damage, or injury incurred by HNH and in any way resulting from the Grower’s breach of any of the above representations or warranties. The provisions of this paragraph will survive the termination of this Agreement.
Grower Initials
13. FAILURE TO PERFORM/FORCE MAJEURE: Neither Party to this Agreement will be required to perform, or be liable to perform, if nonperformance is caused by strikes, work stoppages, or labor demands or difficulties; labor shortages or inability to procure labor, shortages of equipment, materials or supplies; shortage or lack of cooling or processing facilities; water shortages; car or truck shortages; transportation difficulties; war, hostilities or national emergencies; acts of God, including but not limited to plague, pestilence or pandemic or the elements; mechanical breakdowns; power failures; or any other cause beyond the control of the Party unable to perform. If either Party fails to perform according to this paragraph, the Parties will meet to agree in writing on the course of action to be taken to eliminate the impact of the failure to perform, taking into account all circumstances surrounding such cause or event. Both Parties agree that the course of action will be mutually agreed upon and will determine if the aforementioned event is temporary or permanent.
14. RISK OF LOSS: Notwithstanding possession, Title, or any other provisions of this Agreement, Grower will solely bear the risk of loss due to any act or circumstance beyond the reasonable control of HNH.
15. SPECIFIC PRICE AGREEMENT AND WAIVER: To the extent California Food and Agricultural Code sections 62801 and 62802 apply to this Agreement, Grower and HNH expressly agree, pursuant to section 62801, that the full purchase price need not be stated in a definite sum or as a fixed unit price when this Agreement is executed. Grower acknowledges that the method for determining the amounts payable to Grower is set forth in the Pool Price provisions and Exhibit A, including the applicable market prices, edible yield and quality adjustments, processing and marketing costs, shipping costs, allowances, and other expressly identified deductions. To the fullest extent permitted by applicable law, Grower knowingly and expressly waives any right to assert that the absence of a definite purchase price or fixed unit price violates section 62801 and waives the remedies and penalties provided by section 62802 arising solely from that absence. This waiver does not waive HNH’s obligation to calculate and pay all amounts in accordance with this Agreement.
Grower Initials
16. NOTICES: Except for Certificate of Inspection notices, all notices to be given under this Agreement will be in writing and given by:
i. Personal delivery, in which case notice will be deemed delivered on the date it is personally delivered to the address of the person or entity designated to receive such notice.
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ii. Mail, in which case notice will be deemed delivered three (3) business days after deposit, postage prepaid in the United States Mail.
iii. A nationally recognized overnight courier, in which case notice will be deemed delivered on the day of delivery by the courier.
iv. Or to such other place as a Party may, by written notice, designate.
GROWER INFORMATION
COMPANY
ADDRESS
PHONE
EMAIL
CONTACT
FEDERAL TAX ID #
HNH INFORMATION
COMPANY HNH Nut Company
ADDRESS 31881 Road 160
Visalia, CA 93292
PHONE 559-798-1517
EMAIL [email protected]
CONTACT Blake Houston
FEDERAL TAX ID #
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17. DISPUTE RESOLUTION: The Parties expressly agree to participate in mediation to resolve any controversy or claim arising out of or relating to this Agreement, or breach thereof, including without limitation claims against either Party, its affiliates, employees, professionals, officers, or directors. Should the Parties be unable to resolve their dispute in mediation, then the Parties agree to resolve their dispute by binding arbitration in Visalia, California, in accordance with the commercial rules of the American Arbitration Association. The arbitrator will be an active member of the California bar. In the proceeding, the arbitrator will apply California substantive law and the California Evidence Code. The arbitrator will prepare an award in writing, which will include factual findings and any legal conclusions on which the decision is based. Judgment upon any award rendered by the arbitrator may be entered in any court having jurisdiction thereof. In any such proceeding, the prevailing Party will be entitled, in addition to any other relief awarded or adjudged, to such sum as the arbitrator may fix as and for reasonable attorneys’ fees and costs, and the same will be included in the award and any judgment. By initialing in the space below, you are agreeing to have any dispute arising out of the matters included in this arbitration provision decided by a neutral arbitrator as provided by California law and you are giving up any rights you may possess to have the dispute litigated in a court or jury trial. By initialing below, you are waiving your rights to a jury trial. Your agreement to this arbitration provision is voluntary.
HNH Initials Grower Initials
18. CALIFORNIA LAW: This Agreement will be deemed to have been entered into and will be construed and enforced in accordance with the laws of the State of California.
19. ENFORCEABILITY: If any provision of this Agreement, or its application to any circumstance, is held by a court of competent jurisdiction to be invalid or unenforceable, then all other provisions of this Agreement will continue in full force and effect and a suitable and equitable provision will be substituted for the invalid or unenforceable provision in order to carry out, so far as may be practical and permitted under applicable law, the purpose of the Agreement.
20. PAYMENT BY WIRE TRANSFER: In the event that Grower elects to receive or make any payment provided for in this Agreement by wire transfer or other direct transfer from a financial institution, then Grower will be responsible for all actual transaction fees or costs of HNH associated therewith.
21. CONFIDENTIALITY: Except as otherwise required by law, the Parties agree to maintain in confidence all information with regard to all matters caused by or relating to this Agreement and activities undertaken pursuant to this Agreement.
22. INTEGRATED DOCUMENT: This written Agreement embodies the entire understanding and agreement of the Parties as to the matters set forth in this Agreement and will supersede all previous communications, representations or undertakings, either verbal or written, between the Parties relating to the subject matter hereof.
23. AMENDMENT: No change, amendment or modification of this Agreement will be valid unless the same is in writing and signed by the Parties hereto.
<<signature page to follow>>
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IN WITNESS WHEREOF, the Parties have executed this Agreement on the day and in the year first set forth above.
HNH Nut Company
BY:
NAME: Blake Houston
DATE:
Grower
Company:
BY:
NAME:
DATE:
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The figures provided are for illustraƟve purposes only and are subject to change.
Exhibit A
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The figures provided are for illustraƟve purposes only and are subject to change.
Exhibit A
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The figures provided are for illustraƟve purposes only and are subject to change.
Exhibit A
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