EXHIBIT 10-a
Exhibit D
TRANSLATION
PUBLIC DOCUMENT NUMBER ONE HUNDRED THIRTY FOUR 134 WHEREBY THE
NATION, and UNITED BRANDS COMPANY, CHIRIQUI LAND COMPANY and COMPANIA
PROCESADORA DE FRUTAS, S.A., execute a Lease of Lands Contract.
Panama, January 8, 1976
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
In Panama City, Capital of the Republic and Seat of the Notarial
Circuit of the same name, on the eighth -8- of January of the year
one thousand nine hundred and seventy six -1976- before me, CECILIO
MORENO, Notary Public Second of the Circuit of Panama, with personal
identity card number eight-fifty two-nine hundred and fifty eight
(8-52-958) appeared personally before me the following persons whom I
know: Lieutenant Colonel RUBEN DARIO PAREDES, male, adult, married,
Panamanian and resident of this city, with personal identity card
number eight-seventy three-one hundred and seventy three (8-73-173),
Minister of Cattle and Agricultural Development, acting in the name
and on behalf of THE NATION, duly authorized for this act pursuant to
Law number five (5) of January the seventh (7) year one thousand nine
hundred and seventy six (1976), as the party of the first part,
hereinafter referred to as THE NATION, and the other party hereto,
Mr. WALLACE WRAY BOOTH, male, adult, married, American, in transit
through this city, with U.S. Passport number E-one million six
hundred seventy seven thousand nine hundred and eighty seven
(E-1677987), who declared he did not desire an interpreter as he
understood Spanish, who is duly empowered for the purposes of this
Contract, acting in the name of and representing the companies UNITED
BRANDS COMPANY, a corporation organized in accordance with the laws
of the State of New Jersey, United States of America, and duly
authorized to operate in the Republic of Panama, in accordance with
Volume seven hundred and thirty seven (737), Page four hundred and
ninety two (492), Entry one hundred thirty five thousand nine hundred
and thirty nine (135,939), of the Public Registry, Commercial
Companies Section, authorized for this act as appears on page two
hundred and twenty (220) of Volume one thousand two hundred and
nineteen (1219), Entry one hundred twenty eight thousand eight
hundred and forty six "C", CHIRIQUI LAND COMPANY, a corporation
organized in accordance with the laws of the State of Delaware,
United States of America and duly authorized to operate in the
Republic of Panama, in accordance with Volume thirty nine (39), Page
four hundred and sixty six (466), Entry five thousand three hundred
and forty five Bis (5345 Bis) of the Public Registry, Commercial
Companies Section, authorized for this act in accordance with Page
five hundred and thirty two (532), of Volume one thousand two hundred
and two (1202), Entry one hundred twenty seven thousand three hundred
and sixty four "A" (127,364 "A"), and COMPANIA PROCESADORA DE FRUTAS,
corporation organized in accordance with the laws of the State of
Delaware, United States of America and duly authorized to operate in
the Republic of Panama, in accordance with Volume six hundred and
eighty eight (688), Page three hundred and fifty five (355), Entry
one hundred thirty one thousand two hundred and twenty four
(131.224), of the Public Registry, Commercial Companies Section,
authorized for this act, as per Page number two hundred and seventy
seven (277) of Volume one thousand two hundred and eight (1208),
Entry one hundred eighteen thousand and twenty one "C" (118,021 "C"),
and who hereinafter shall be referred to jointly as THE COMPANY,
agree to this Land Lease Contract in accordance with the following
clauses: - - - - - - - - - - - - - - - - - - - - - - -
FIRST CLAUSE: - From all the lands that THE NATION has purchased from
THE COMPANY by virtue of the Purchase-Sale Agreement executed on this
same date, THE NATION leases to THE COMPANY an area of approximately
fifteen thousand and seven hundred (15,700) hectares of which
approximately twelve thousand and seven hundred (12,700) hectares are
comprised of agricultural lands and three thousand (3,000) hectares
of lands to be utilized for installations, buildings, stores, storage
and other uses.- - - -
SECOND CLAUSE: - The lands that THE NATION leases to THE COMPANY are
described in the maps identified as annexes I, II, III, IV and V,
which are part of this Agreement. Copies of these maps have been
signed by the parties and the signatures authenticated by a Notary
Public. - - - - - - - - - - - - - - - - - -
THIRD CLAUSE: - THE COMPANY accepts the lands leased in their present
conditions and shall use them in its activities which entail in
addition to production, packing, transportation, exportation of
bananas and their derivatives, use of equipment and machinery, other
accessory activities which are performed for the benefit of the
banana industry and its workers, including among others the following
activities: agricultural, livestock, milk producing, recreational,
commercial and services. - - - - -
FOURTH CLAUSE: - During the duration of this Contract, THE COMPANY
shall use the leased lands with the efficiency and good care which it
has used previously during the normal periods of operation, exclusive
of the force majeure contingencies or inevitable accident. THE
NATION guarantees THE COMPANY the pacific use of the lands for the
purposes for which they were leased. - - - - - - - - - - - - - -
FIFTH CLAUSE: - The lands leased shall be returned by THE COMPANY to
THE NATION upon the termination of this Contract in the state that
they then may be, without any responsibility whatsoever for suitable
uses which they might have been put to with respect to the normal
activities of THE COMPANY, and without any responsibility for damages
due to force majeure or inevitable accident. In addition, THE NATION
grants THE COMPANY the rights to draw water to aqueducts, to right of
way, to passage and the like with respect to national lands in which
the structures related to the activities of THE COMPANY are situated,
such as pipelines, irrigation, drainage, aqueducts sewage, railroads,
communications lines, telephones and telegraphs. In exercising these
rights for new structures or installations, THE COMPANY shall make
prior compensation for the resulting damages which it may have
created. THE COMPANY shall be able to construct new structures or
alter existing ones, in which case THE NATION shall make available to
it, free access and right of way to national lands in accordance
with the plans proved by THE NATION through the Ministry of Cattle
and Agricultural Development. - - - - - -
It is understood the lease rent agreed upon under the present
Contract, includes the payment for the rights described in this
Clause. - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
SIXTH CLAUSE: - The rental payment for the lands referred to in this
Contract amounts to ONE MILLION BALBOAS (B/. 1.000.000.00) a year,
payable in four (4) equal installments at the end of each quarter on
the due dates of March thirty first (31), June thirtieth (30),
September thirtieth (30) and December thirty first (31) of each year.
- - - - - - - - - - - - - - - - - - - - -
SEVENTH CLAUSE: - THE COMPANY shall be able to return to THE NATION,
in the conditions which are delineated in the Fifth Clause of this
Contract, those lands which is (SIC) deemed unnecessary for its
operations, in which case the rental payment shall be reduced
proportionally. Likewise, in the event of expansion of the
activities of THE COMPANY, or should it need the use of other lands,
THE NATION, within the availabilities anticipated for these purposes
shall lease them to THE COMPANY and the rental payment shall be
adjusted proportionally. THE COMPANY shall formulate a written
request and THE NATION shall make available said lands to THE COMPANY
within a period not exceeding eight (8) months. Within a sixty (60)
day period following the execution of this Contract, the parties
shall agree on the location and area of the lands which shall be
maintained readily available for these purposes. In any event, THE
NATION will not be obliged to maintain lands in reserve whose total
area exceeds two thousand (2,000) hectares. - - - - - - - - - - - - -
EIGHTH CLAUSE: - The initial leasehold term shall consist of a period
of five (5) years, commencing on January first (1) one thousand nine
hundred and seventy six (1976). Said term shall be extendible
yearly, by mutual agreement, on the anniversaries of same, that is,
the first day of January of each year for consecutive periods of one
year each. That is to say that on the first anniversary date or
January first (1) one thousand nine hundred and seventy seven (1977),
with only four (4) years remaining of the initial period in force,
the term shall be extendible for an additional year so as to have new
period consisting of another 5-year term commencing on that date and
subsequently each year on each anniversary date. Said extensions of
one year shall be deemed to be automatically agreed upon by the
parties if within a ninety (90) day period prior to the anniversary
date of each term neither party has notified the other in writing of
its decision not to extend. - - - - - - - -
In the event that one of the parties notifies the other of its
decision to not extend the term, this notification shall take effect
without the necessity of further confirmation during the subsequent
four (4) years. - - - - -
NINTH CLAUSE: - THE COMPANY, that is, the companies United Brands
Company, Chiriqui Land Company and Compania Procesadora de Frutas, S.
A., execute the present Contract and jointly and severally assume all
the rights and obligations arising from the same. - - - - - - - - - -
- - - - - - - - - - - - - - -
TENTH CLAUSE: - This Contract shall take effect commencing on January
first (1) one thousand nine hundred and seventy six (1976). - - - - -
- - - - - - - - - - - - - - - - - - - - - - - -
This instrument was read to the persons appearing herein in the
presence of witnesses Mr. Fernando Manfredo, with personal identity
card number eight-forty nine-two hundred and thirty nine, Mr. Ruben
Darlo Herrera, with personal identity card number three-twenty
one-eight hundred and ninety-three (3-21-893), and the formal
witnesses Mr. Artemio Saavedra, with personal identity card number
seven- thirty eight-four hundred and forty four (7-38-444), and
Angiolina Varcasia, with personal identity card number eight-forty
nine-two hundred and ninety-four (8-49-294) adults, residents of this
city, whom I know and who have the necessary capacity, they found
this instrument to be in order and extended their approval to the
same by signing all before my presence which I certify. This
instrument bears the number one hundred and thirty four 134.
Executed by Lieutenant Colonel RUBEN DARIO PAREDES. - - - WALLACE W.
BOOTH. - - - Fernando Manfredo. - - - Ruben D. Herrera. - - - Artemio
Saavedra. - - - Angiolina Varcasia. - - - C. MORENO, Notary Public
Second. - - - This copy is as its original which I provide, sign and
seal, in Panama City, Republic of Panama, on January eight (8), of
the year one thousand nine hundred and seventy six (1976).
/s/ C. Moreno
Notary Public Second
TRANSEXD.POL
TRANSLATION
EXHIBIT E
PUBLIC DOCUMENT NUMBER ONE HUNDRED AND THIRTY-FIVE- - - - - - 135
whereby THE NATION, UNITED BRANDS COMPANY, CHIRIQUI LAND COMPANY and
COMPANIA PROCESADORA DE FRUTAS, execute this Operations Contract.
Panama, January 8, 1976
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
In Panama City, the capital of this Republic, and the seat of the
Notary Circuit of the same, on January 8, 1976, CECILIO MORENO,
Second Notary Public of the Panama Circuit, with personal identity
number eight-fifty-two-nine hundred-fifty-eight (8-52-958),
personally appeared Lt. Colonel RUBEN DARIO PAREDES, male, adult,
married, Panamanian, and resident of this city, with personal
identity number eight-seventy-three-one hundred seventy-three
(8-73-173), Minister of Cattle and Agricultural Development,
representing and acting on behalf of THE NATION, duly authorized
pursuant to Law Number Five (5) of the seventh (7th) of January, one
thousand nine hundred and seventy-six (1976), on the one hand, and on
the other, WALLACE WRAY BOOTH, male, adult, American, married, in
transit, with American passport number E - one million six hundred
seventy-seven thousand nine hundred eighty-seven (E-1677987), who
declared he did not wish an interpreter as he could understand and
speak Spanish, acting on behalf of UNITED BRANDS COMPANY, a company
incorporated according to the laws of the State of New Jersey, United
States of America, and duly authorized to operate in the Republic of
Panama, as recorded in Volume seven hundred thirty-seven (737), folio
number four hundred ninety-two (492), entry number one hundred
thirty-five thousand nine hundred thirty-nine (135,939) of the Public
Registry, Section of Commercial Companies, duly authorized for this
act, as shown at folio two hundred twenty (220), - - - volume one
thousand two hundred and nineteen (SIC 219), entry number one hundred
twenty-eight thousand eight hundred forty-six "C" (128,846 "C")
CHIRIQUI LAND COMPANY, company organized according to the laws of the
State of Delaware, United States of America, and duly authorized to
act in the Republic of Panama, as recorded in volume thirty-nine
(39), folio four hundred and sixty-six (466), entry five thousand
three hundred and forty-five (5345) Bis of the Public Registry,
Commercial Companies Section, duly authorized by this act, as shown
at folio five hundred and thirty-two (532), - - - - volume one
thousand two hundred and two (1202), - - - - - - entry one hundred
twenty-seven thousand three hundred and sixty-four ("A") and COMPANIA
PROCESADORA DE FRUTAS, company organized in accordance with the laws
of the State of Delaware, United States of America, and duly
qualified to act in the Republic of Panama, as recorded in volume six
hundred and eighty-eight (688), folio three hundred and fifty-five
(355), entry number one hundred thirty-one thousand two hundred and
twenty-four (131,224), of the Public Registry, Commercial Companies
Section, duly authorized for this act, pursuant to folio number two
hundred and seventy-seven (277), - - - - - - volume one thousand two
hundred and eight (1208),- - - - entry number one hundred eighteen
thousand and twenty-one "C" (118,021 "C") - - - - - - whom
hereinafter shall all be referred to as THE COMPANY, agree to this
Operations Contract in accordance with the following clauses:
FIRST CLAUSE: The activities of THE COMPANY in the Republic of
Panama shall be governed by the stipulations of this Contract, of the
Purchase-Sale Agreement and that of the Land-Lease Agreement,
executed on this same date, and also by the Panamanian statutory
provisions of general application which are not contrary to the
stipulations of these Contracts. - - - - -
SECOND CLAUSE: By virtue of the request of THE COMPANY and prior
approval of THE NATION, by means of the Ministry of Cattle and
Agricultural Development, THE COMPANY may partially substitute banana
farming for that of other cattle and agricultural activities or
industrial-agricultural activities.
THIRD CLAUSE: THE COMPANY shall have the right to export without
being subject to licenses or permits, the bananas or related products
which it may produce or acquire in this country. - - - - - - - - -
FOURTH CLAUSE: With the exception of contingency of force majeure or
caso fortuito, THE COMPANY agrees to maintain an annual minimum
production suitable for export of twenty-two (22) million
forty/forty-two (40/42) pound boxes and to export said production.
Likewise, THE COMPANY obligates itself to purchase all bananas, up to
a limit which does not exceed thirty percent (30%) of the total
actually exported, produced by national producers in the Districts of
Baru, Alanje in Chiriqui and Changuinola, Bocas del Toro, which may
be offered for sale to THE COMPANY subject to the varieties,
classifications and specifications established by THE COMPANY and at
the prices which may be agreed to with said producers. - - - - - - -
- - - - - - - -
FIFTH CLAUSE: So that THE NATION may be able to establish sales in
the international markets, THE COMPANY, at the request of THE NATION,
authorizes the producers which may have contracts with THE COMPANY,
in which they are bound to sell fruit to THE COMPANY, to sell to THE
NATION or to any of its branches, in terms satisfactory to these
producers, bananas they produce, on prior written notice to THE
COMPANY of at least ninety (90) days. In this event, the limit of
thirty percent (30%) referred to in the previous clause shall be
adjusted in the corresponding amount. - - - - - - -
SIXTH CLAUSE: It is understood that the approval by THE COMPANY
referred to in the foregoing clause, shall be given without
diminishing compliance by the said producers of their monetary
obligations to THE COMPANY and banking entities, including price
differentials due to services rendered by THE COMPANY to said
producers and the investments made by THE COMPANY in producers'
farms, the corresponding amount and proportion pursuant to the terms
and conditions agreed upon, unless THE NATION expressly assumes
totally or partially such obligations. In due time, THE NATION,
through the Ministry of Industry and Commerce, and THE COMPANY shall
agree to the mechanisms and procedures which may be deemed adequate
before proceeding to comply with the stipulations of this clause and
of the foregoing clause. - - - - - - - - - - - - - - - - - - - - - -
- - - - - -
SEVENTH CLAUSE: THE COMPANY agrees to supply THE NATION, through the
state company named Corporacion Bananera del Pacifico (COPABA),
banana boxes (F.O.B.) in accordance with the following: - - - - - - -
- - - - - - - - - - - - - - - - - - - -
- - - - - - - - One (1). Corporacion Bananera del Pacifico shall make
the written request to THE COMPANY with at least ninety (90) days
notice prior to each shipment, and shall present semiannual estimates
on a monthly basis regarding future shipments. - - - - - - - - - - -
Two (2). THE COMPANY shall assist in the handling of shipments of
Corporacion Bananera del Pacifico in the same manner that it has up
to now, and the latter shall reimburse THE COMPANY with a number of
banana boxes from its production equivalent to the number actually
supplied by THE COMPANY. - - - - - - - Three (3). THE COMPANY does
not assume the obligation to supply to Corporacion Bananera del
Pacifico annual quantities of banana in excess of that which may be
delivered by it to THE COMPANY each calendar year. - - - - - - - Four
(4). THE COMPANY shall provide Corporacion Bananera del Pacifico
with reports concerning the availability of additional banana for
export at the prices and subject to the terms deemed to be mutually
satisfactory. - - -
EIGHTH CLAUSE: THE NATION grants THE COMPANY the right of the use of
the piers of Puerto Armuelles and Almirante, their related equipment
and appurtenances, and acknowledges the priority of the banana
industry. For such right, THE COMPANY shall pay the National Port
Authority representing THE NATION the sum of FIFTY THOUSAND BALBOAS
(B/.5O,OOO.OO) annually for each pier, payable quarterly in four
equal installments, no later than the last working day of each
quarter. - - - - - - - - THE COMPANY shall perform the maintenance
and repair of said piers. The expenses for these tasks shall be
prorated between THE COMPANY and THE NATION, based upon the relative
degree of use made of said installations by THE COMPANY, with THE
COMPANY carrying the expenses connected with their use and THE NATION
assuming all other expenses. For this purpose, within an eighteen
(18) month period following the execution of this Contract, THE
NATION, through the National Port Authority, by mutual agreement with
THE COMPANY, shall establish the procedure for determining the
allocation expenses based on the degree of use of these piers.
Nevertheless, it is understood that during the first two years that
this Contract is in force, the maintenance and repair expenses shall
be carried exclusively by THE COMPANY. - - - - - - - - - - - - - - -
- - - - - - - - - -
The parties shall agree with respect to the requirement of new
capital investments for the replacement, remodeling or enlargement of
the above-mentioned piers, and with respect to the financing and
implementation of said investments. - - - - - - - -
NINTH CLAUSE: THE COMPANY shall pay to THE NATION during the
duration of this Contract, an annual fee of FIVE HUNDRED THOUSAND
BALBOAS (B/.5OO,OOO) for the right to operate, transport its
products, and load and use, with priority, the railroads in the
banana divisions of Bocas del Toro and Puerto Armuelles. The payment
shall be made in four equal quarterly installments, no later than the
last working day of each quarter.
- - - - - - - - THE COMPANY shall perform the maintenance and repairs
of the railroad lines it uses in the Bocas del Toro and Puerto
Armuelles Divisions and the resulting expenditures for this shall be
totally carried by THE COMPANY. THE COMPANY shall control the
railroad traffic in the Bocas del Toro Division and shall continue
coordinating the traffic in the banana operations area of Puerto
Armuelles with the National Railways of Chiriqui.
The parties shall come to an agreement with respect to the
requirement of new capital investments for the purpose of restoring
the railroad lines used by THE COMPANY in that segment of the
principal way between Progresso and Puerto Armuelles and with regard
to the financing and implementation of said investments. - - - - - -
- - - - - - - - - - - - - - - - - - -
TENTH CLAUSE: THE COMPANY shall continue to provide to the public
passenger and freight service, in the same manner that it has been
doing to date, subject to the schedule of charges approved by THE
NATION, which shall not exceed cost plus a reasonable increment. - -
- - - - - - - - - - - - - - - - - - - -
- - - - - - - - THE COMPANY shall be obligated to transport
gratuitously on the respective regularly scheduled trains the mail of
the Republic:, and provide free service to uniformed member, of the
National Guard. Likewise, it shall grant free permits to public
servants of the respective provinces that may travel regularly in the
exercise of their duties. Any property of THE NATION shall be
transported on these trains at cost which may be determined by the
parties. - - - - - - - - - - - - - - -
ELEVENTH CLAUSE: THE COMPANY shall be able to operate any electrical
installations which it may need for the activities covered by this
Contract in the Divisions of Bocas del Toro and Puerto Armuelles,
making available to THE NATION and to the public whatever electricity
is not utilized by THE COMPANY. THE COMPANY shall be able to
continue to operate its own plant for its own use, even though THE
NATION may commence to provide the aforesaid public service in these
areas. The tariffs for the sale to THE NATION and to the public will
be approved by THE NATION and shall not be less than cost. THE
COMPANY shall cooperate with the IRHE for the increase of electricity
for public service within the operations area of THE COMPANY
according to the conditions which may be agreed upon in each
instance. - - - - - - - - - - - - - - - - - - - - - - - - - -
- - - - - - - - Likewise, THE COMPANY shall be able to operate
communications systems and installations which may be necessary for
its operations including the ship-to-shore, shore-to-ship
communications. This authorization includes the power to continue
operating those which presently exist between Puerto Armuelles and
Golfito and vice versa will continue to be processed by the Ministry
of Government and Justice. - - - - -
- - - - - - - - The establishment of new installations and
communications systems shall require the prior approval of THE NATION
through the Ministry of Government and Justice. - - - -
TWELFTH CLAUSE: THE NATION grants THE COMPANY the right to continue
operating those installations and works, which it actually uses to
supply water, including free consumption of the necessary water for
its activities. - - - - - - - - - - -
- - - - - - - - In the event new installations or other works of THE
COMPANY should be necessary, THE COMPANY shall submit the respective
plans to THE NATION, through the IDAAN for its prior approval.
- - - - - - - - The water not utilized by THE COMPANY in its works
shall be made available to THE NATION or to third parties according
to rates based upon actual expenses and regulated by IDAAN. The
investments in installations, and works and other expenditures,
including additional operation expenses to provide water for
irrigation, shall be borne by the users. THE COMPANY, under the
supervision of IDAAN, shall take the necessary steps to assure at all
times the suitability of drinking water for human consumption and
shall work together with that Institute in the expansion of the
notable water supply within the banana operation areas of THE
COMPANY. - - - - - - - - - - - - - - - - - - - - - -
THIRTEENTH CLAUSE: THE NATION grants to THE COMPANY authorization to
extract at no cost, sand, stone and gravel from national lands for
use in the activities covered by this Contract, provided the
pertinent formalities are fulfilled. - - -
FOURTEENTH CLAUSE: THE COMPANY, at all times, with the exception of
commitments entered into before the date of this Contract, shall give
preference to the utilization of Panamanian goods and services unless
their prices, quality, quantities, regularities and economic supply
conditions are not adequate or satisfactory for the development of
its activities. The right to select the goods and services shall
pertain exclusively to THE COMPANY, but such authority shall be
exercised in a reasonable manner to comply with the criteria
established in this clause. -
FIFTEENTH CLAUSE: In addition to the reports that THE COMPANY
presently submits to THE NATION concerning purchases of bananas
within the country, exportation and conditions of the international
market, THE COMPANY shall present annually to THE NATION, no later
than January 10 of each year, reports regarding the general plans for
operation in Panama, for each respective year, in connection with
production and exportation and the operations investment budget. THE
COMPANY shall also submit semiannual reports pertaining to the
sanitary conditions of the plantations and changes with respect to
production and exportation programs and any significant budgetary
changes. - - -
SIXTEENTH CLAUSE: In its employer-labor relations with respect to
the operations conducted in the country, THE COMPANY shall abide by
labor legislation in effect in the Republic of Panama and by the
collective agreements or individual labor contracts with its workers
in accordance with the requirements of such legislation. Upon the
expiration of the present Operations Contract and that of the
Land-Lease Agreement entered into on this date, THE COMPANY shall
deliver to THE NATION the total sum of their labor obligations which
THE COMPANY is obligated to comply with on behalf of its employees,
it being understood that for this reason THE NATION subrogates itself
to all the rights and obligations of THE COMPANY and exempts THE
COMPANY from any liability for the same. THE NATION shall
immediately pay for services and benefits to employees. - - - - - - -
- - - - - - - -
SEVENTEENTH CLAUSE: With respect to the operations that THE NATION
authorizes through this Contract, THE COMPANY shall be able to bring
into the country the foreign personnel that it requires, who are
either specialized or in training for specialization, provided the
general immigration requirements are fulfilled. The foreigner thus
employed shall commence work after having presented his request to
the Ministry of Labor and Social Welfare.
- - - - - - - - THE COMPANY shall submit quarterly to the Ministry of
Labor and Social Welfare a report that facilitates verification of
the percentage of foreigners actually hired. Once an application has
been decided upon, or subsequently thereto, said Ministry shall
instruct THE COMPANY to withdraw from the country that percentage of
its employees which exceeds the percentage authorized by law. - - - -
- - - - - - - -
EIGHTEENTH CLAUSE: THE COMPANY shall be exempt from taxes and other
assessments which are stipulated below: - - - -
- - - - - - - - One (1) - Taxes and assessments on the importation of
machinery, equipment, spare parts, fuel, paper and other items which
are necessary for the development of the banana operations at any
stage or place of operation. The goods exempt from import taxes may
be re-exported tax free and without being subject to licenses or
permits but shall not be sold nor, without the prior approval of THE
NATION, leased within the country, nor be destined for other purposes
than those for which they were acquired, unless the applicable import
taxes are first paid. THE COMPANY shall offer THE NATION first
option to purchase those goods which THE COMPANY decides to sell.
These exemptions shall be processed in the usual manner through the
Ministry of Treasury and Finance. - - - - - - - - - - - - - - - - - -
- - - - - - - - -
- - - - - - - - Two (2) - Any kind of assessment on banana operations
in any of its phases except those which are stipulated in this
Contract. - - - - - - - - - - - - - - - - - - - - - - - -
- - - - - - - - Three (3) - Taxes and any other assessments issued or
levied upon cargo loaded or unloaded by any ship whose principal
cargo is comprised of products of THE COMPANY, or equipment,
machinery, spare parts, paper, fuel and other imports for its
activities. The rates and expenses generally applicable for
immigration services, sanitation, customs and wharfage shall be
excepted. - - - - - - - - - - - - - - - - - -
- - - - - - - - Four (4) - Taxes which may be assessed on payments of
dividends to or received by the shareholders of THE COMPANY or the
sums which it may remit outside the country. - - - - - - - -
- - - - - - - - Five (5) - Taxes or any assessments related to pier
facilities, mooring, tonnage or which may be ascribed to ships
activities or to the use of the ports of Almirante or Puerto
Armuelles or their replacements, with the exception of that
established in the Eighth Clause of this Contract. - - - - - - -
- - - - - - - - Six (6) - Import taxes over a three-year period on the
fruits harvested in new growing areas or those replaced in accordance
with the plans or programs previously approved by the Ministry of
Cattle and Agricultural Development. The three-year period shall
commence on the date or shipment on which the exportation in
commercial quantities of the said fruit commences. The Ministry of
Cattle and Agricultural Development shall verify the information
submitted by THE COMPANY concerning the tax-exempt portion and can
only object to it within a period of thirty days following the date
this information is received. -
- - - - - - - - Seven (7) - Any type of taxes and assessments levied
upon the sale to THE NATION of the properties of THE COMPANY. - - - -
- - - - - - - - - - - - - - - - - - - - - - - - -
- - - - - - - - Eight (8) - Revenue stamps or any other assessment
resulting from the execution and registration of this Contract and
from the Purchase-Sale and Land-Lease Contracts executed on this same
date. - - - - - - - - - - - - - - - - - - - - - - - -
- - - - - - - - Nine (9) - Any type of assessment on capital, except
taxes levied on patents or licenses of general application. - - - - -
- - - - - - - - - - - - - - - - - - - - - -
- - - - - - - - Ten (10) - Consular fees. - - - - - - - - - - - -
- - - - - - - - Eleven (11) - Property taxes on improvements to
edifices constructed on lands used for the banana business, such as: -
- - - - - - - - - - - - - - - - - - - - - - - - - - - - -
- - - - - - - - a) with respect to railroads: main tracks and spurs,
fixed and rolling stock, stations, repair shops and warehouses for
merchandise and materials; b) with respect to aqueducts and sewer
systems, of irrigation, pipe lines and electrical plants: works,
buildings, plants and other installations, and c) with respect to
communication systems: telegraph, telephone lines, offices and other
installations. Commercial and residential buildings are excluded. - -
- -
- - - - - - - - Twelve (12) - (Transitory) - - - - - - - - -
- - - - - - - - The amount of banana export tax in excess of that which
may result from application of the rate established by Law Number
Four (4) of January seven (7), one thousand nine hundred and
seventy-six (1976), from October twenty-first (21st), one thousand
nine hundred and seventy-four (1974) until the effective date of said
law, which exemption is granted as a result of prior agreements
between THE NATION and THE COMPANY, by which THE COMPANY gave THE
NATION the right to occupy its reserve lands, plus the obligation
assumed by THE NATION to immediately enact a new banana export tax
law based on competitive conditions of the market and by virtue of
which it was determined that THE COMPANY shall pay to the Treasury as
said tax the sum of thirty-five cents of a Balboa (B/.0.35) for each
box of bananas exported. -
NINETEENTH CLAUSE: THE COMPANY shall be subject to payment of income
taxes on the basis of a fixed rate of fifty percent (50%) on the
taxable income from Panamanian sources. - -
- - - - - - - - The determination of taxable income from Panamanian
sources shall be made pursuant to criteria which has been previously
applied. - - - - - - - - - - - - - - - - - - - - - -
- - - - - - - - The sums paid in accordance with the Eighth, Ninth,
Twentieth, Twenty-First and Twenty-Second Clauses shall be deemed
deductible expenses during the applicable fiscal period in addition
to other expenses accepted as such under Panamanian fiscal
legislation. Payment of income taxes shall be made quarterly and in
advance, according to the following procedure: No later than March
thirty-first (31st) of each year, and together with a sworn
declaration of its income which it may have obtained during the
previous taxable year, THE COMPANY shall present a declaration of
estimated net taxable income in that year and the amount of estimated
income tax shall be paid in four equal quarterly installments, on
April fifteenth (15th), July fifteenth (15th), October fifteenth
(15th), and no later than December twentieth (20th). The total of
the estimated tax shall be subject to quarterly review by THE
COMPANY, and should there be changes in the estimated sum, the sums
payable in the subsequent quarters shall be computed by deducting the
income computed on the basis of the new estimated payment made in
prior quarters, and dividing the remaining sum by the number of
quarters remaining for that year, thereby determining the sums
payable for each subsequent quarter. - - - - - - - - - - - - - -
- - - - - - - - If in accordance with the sworn declaration submitted
during the first quarter of the following year it is confirmed that
the total of the sums paid exceeds the sum total of the tax, the
difference shall be reimbursed to THE COMPANY by means of the
corresponding credit applicable to the first subsequent payment, and
if this were not sufficient, it shall be applied to the balance of
the subsequent payments until such sums amount to the total
overpayment. If the balance is in favor of THE NATION, THE COMPANY
shall pay the difference when presenting its sworn declaration. If
on the date of termination of this Contract there remains any balance
payable to either of the parties, it shall be discharged immediately
by the corresponding party upon presentation and correction of the
final income declaration. - - - - - - - - If the payments accrued
commencing with the first semester are less than the proportional
part of the final tax by an amount greater than twenty-five percent
(25%), the difference will be subject to the payment of interest, by
April fifteenth (15th) at the latest, at an annual rate of seven
percent (7%). The computation for these purposes shall be made in
the following manner:
- - - - - - - - a) The difference between the first two quarterly
payments and half of the total amount of the final tax. - - - - -
- - - - - - - - b) The difference between the first three quarterly
payments and three quarters of the total amount of the final tax. - -
- - - - - - - - - - - - - - - - - - - - - - - - - - - - -
- - - - - - - - c) The difference between the four quarterly payments
and the final tax total. - - - - - - - - - - - - - - - - - - - Should
any of these differences be a minus figure and exceed twenty-five
percent (25%) of the half, three-quarters, and the total of the final
income tax, respectively, then they shall earn seven percent (7%)
interest computed at nine, six and three months, in the same order. -
- - - - - - - - - - - - - - - -
TWENTIETH CLAUSE: The exportation of bananas shall be subject to a
tax, as provided by law. The tax rate shall be subject to
modification by law in keeping with changes in the international
market and other economic conditions of THE COMPANY. Prior to the
enactment of the respective legislation, THE NATION shall grant THE
COMPANY a reasonable period of time during which to present its
position. The tax payments shall be made monthly within the first
twenty days of the following month.
TWENTY-FIRST CLAUSE: THE COMPANY shall pay as municipal taxes levied
upon the banana business an annual sum of TWO HUNDRED THOUSAND
BALBOAS (B/.200,000.00) to each one of the Municipalities of Baru and
Changuinola. Payment shall be made in twelve equal monthly
installments, no later than the last working day of each month. - - -
- - - - - - - - - - - - - - - - - - - - -
- - - - - - - - THE COMPANY shall also pay the remaining municipal
taxes in effect on the date this Contract becomes effective, in the
same amount and manner in which it is presently paying. If after
said date THE COMPANY were liable for a larger sum of said taxes, or
were subject to levies upon the banana related activities, these
additional obligations in each instance would be assumed by THE
NATION. - - - -
TWENTY-SECOND CLAUSE: THE COMPANY shall be subject to the rest of
the taxes, assessments, tariffs and other national contributions
which are not of the kind specified in this Contract, provided that
in each instance the assessments are of general application. For
this purpose, those assessments which are only applicable to one type
of economic activity or which specifically apply to banana operations
shall not be considered to be of general application. - - - - - - - -
- - - -- - - - - -
TWENTY-THIRD CLAUSE: Even if THE NATION were to establish in Panama
foreign exchange controls, THE NATION shall make available to THE
COMPANY foreign exchange readily convertible for a sum not less than
that which it may need for the following, irrespective of the source
or nature of THE COMPANY funds: - - - - - - - - - - - - - - - - - - -
- - - -
- - - - - - - - One (1) - Payment for goods and services obtained from
abroad for its Panamanian operations.
- - - - - - - - Two (2) - The payment of capital and interest on debts
payable in foreign currency contracted for its investments or
operations in Panama.- - - - - - - - - - - - - - - - - - - -
- - - - - - - - Three (3) - Remittances of profits and distribution of
capital. - - - - - - - - - - - - - - - - - - - - - -
TWENTY-FOURTH CLAUSE: Upon the expiration of the Lease Agreement,
THE COMPANY accepts the obligation to sell to THE NATION and THE
NATION agrees to buy from THE COMPANY, all capital assets and other
property, including growing crops and inventories on hand which may
be property of THE COMPANY, located in the Provinces of Chiriqui and
Bocas del Toro and which are directly or indirectly used in the
banana industry which THE COMPANY operates in the Republic of Panama.
The purchase price at the purchase date shall be determined in
accordance with the following terms: - - - - - - - - - - - - - - a)
For fixed assets, the value on the books in Panama, that is, the
original cost plus the cost of improvements which extend its useful
life or increase the commercial value, less the accrued depreciation;
- - - - - - - - - - - - - - - - - -
- - - - - - - - b) for inventories, the value on the books in Panama,
that is, the total original cost; and- - - - - - - - - -
- - - - - - - - c) for growing crops, the value determined by
application of the guidelines described in Annex "A" which is part of
this Contract.- - - - - - - - - - - - - - - - - - - - -
- - - - - - - - There is excluded from the sale mentioned in these
clauses, cash on hand, bank deposits, accounts receivable, negotiable
instruments and intangible assets such as patents, industrial and
agricultural trademarks, trade names, commercial notices and signs,
and goodwill and any other deferred payments which have not been
expressly assumed by THE NATION.- - - - - - -
- - - - - - It is agreed that THE NATION shall not assume any
obligations or liabilities of THE COMPANY, with the exception of the
obligations arising from subsidiary guarantees granted in favor of
banking entities in connection with the Contracts with associate
producers which are enumerated in Annex "A", or subsidiary guarantees
which may be granted in future with the approval of THE NATION
through the Ministry of Cattle and Agricultural Development.- - - - -
- - - - - - - - - - - - - - - -
- - - - - -Payment of the price shall be made in the following manner:-
- - - - - - - - - - - - - - - - - - - - - - - - - - - -
- - - - - -a) On the date of execution of the Purchase-Sale Contract, a
payment in cash equivalent to thirty-five percent (35%) of said price
or an amount equal to the total labor obligations of THE COMPANY on
that date, whichever of the two is greater.- - - - - - - - - - - - - -
- - - - - - - - - - - - - - -
- - - - - - b) The remainder is interest calculated at an annual rate
of seven percent (7%) on pending balances, in ten equal annual
installments, the first of which shall be made on the expiration date
of the first year commencing from the date of the sale, and the
remaining nine payments to be made on each subsequent anniversary.- -
- - - - - - - - - - - - - - - - - - - -
- - - - - -In the event this Contract is terminated by an
administrative dissolution of same, as provided for in this Contract,
the payments shall be made as described in the paragraphs a) and b)
above, but all terms shall be delayed for one year. In this case,
THE COMPANY shall not be obligated to make payments on its labor
obligations until such date that THE COMPANY receives the first cash
payment from THE NATION.- - - - -
- - - - - -Irrespective of the provisions of this Clause, it is
expressly agreed between the parties that should the termination of
the Operation Contract and, consequently, the termination of the
Lease Agreement, be due to non-renewal of the term by THE COMPANY or
due to an administrative dissolution of the contracts for reasons
provided in these clauses and, further, if THE NATION is not able to
continue in the banana business, THE NATION shall not be obligated to
purchase but will have the option of burying the assets and
properties of THE COMPANY directly or indirectly related to the
banana business is of a partial nature, the option to buy herein
agreed upon shall be applicable to the assets and other properties
which are not to be operable and the commitment to purchase shall
exist with regard to the assets and other properties with which it
will continue to operate. If THE NATION elects not to buy capital
assets and property in accordance with the rules outlined above, in
this event the parties shall be free to negotiate and contract by
mutual agreement so that THE NATION may acquire them at their
residual or commercial value. In the event that the parties are
unable to arrive at an agreement on this matter within a period of
one hundred and eighty (180) days, THE COMPANY shall then be able to
dispose of such properties as it sees fit and without being subject
to taxes or levies of any kind.- - - - - - - - - - - - -
- - - - - -The payments mentioned in this clause shall be made in
dollars, United States currency, with the banking entity of that
country indicated by Seller.- - - - - - - - - - - - - - - - - - -
TWENTY-FIFTH CLAUSE: THE COMPANY shall be able to withdraw at any
time those goods belonging to it situated on land which THE NATION
has not leased to it, unless THE NATION decides to purchase them
pursuant to terms and conditions to which the parties may then agree.
The goods not withdrawn shall be subject to the Purchase Agreement as
stipulated in the Twenty-fourth Clause of this Contract.- - - - - - -
- - - - - - - - - - - - -
TWENTY-SIXTH CLAUSE: During the period that this Contract is in
effect, THE COMPANY shall continue to service and maintain its assets
situated in the Republic of Panama with the same efficiency and good
care which has been customary during normal periods of operation and
THE NATION guarantees it the undisturbed use thereof.- - - - - - - - -
- - - - - - - - - -
- - - - - -Furthermore, in the event that the term of the Land-Lease
Agreement is not extended pursuant to the provisions of the Eighth
Clause of the Land-Lease Agreement, during the remaining period until
its expiration THE NATION shall exercise adequate supervision of the
activities of THE COMPANY and shall have the right to participate in
THE COMPANY's management policies and therefore:- - - - - - - - - - -
- - - - -a) In those instances in which it considers it necessary, THE
NATION shall designate, at its own expense and without limitation as
to numbers, the personnel which it may deem convenient in line with
the personnel structure of THE COMPANY and on any level order that
the personnel designated by THE NATION can be prepared to supervise
the management of the banana business of THE COMPANY and its
relations with their central or regional offices, with respect to
Panamanian banana production and other agricultural products. The
personnel designated by THE NATION shall work along side and in
harmony and cooperation from the corresponding personnel of THE
COMPANY which will supply the personnel of THE NATION with the
necessary explanations and information suitable for their training.- -
- - - - - - - - - - - - - -b) THE COMPANY shall keep THE NATION
informed of its plans, measures, policies, activities and other
decisions which may impinge upon the Panamanian production of bananas
and other agricultural products. THE NATION shall participate in the
formulation, of the aforementioned decisions and shall be able to
object to any of these whenever they affect or tend to reduce or
discriminate, in any manner whatsoever, against the production of
bananas in Panama. It is understood that this clause does not refer
to decisions which may be of a purely routine nature. - - -
- - - - - -c) In the event that THE NATION believes that the necessary
measures to adequately maintain the value of the assets and other
properties used by THE COMPANY are not being taken, THE NATION shall
be able to request the appointment of a joint commission composed of
a representative of each of the parties hereto, and a third party
chosen by mutual agreement of the first two. Said commission shall
develop a program for the maintenance and repair of the fixed assets
and the care of the cultivations similarly to what may have been
customary during the normal periods of operation of THE COMPANY and
according to whatever other measures are adequate so that the assets
and other properties used by THE COMPANY do not depreciate in value.
If THE COMPANY should not effect such programs at its own expense,
THE NATION shall be able to do it for its own account, and the
expense thus incurred plus interest thereon at an annual rate of
seven percent (7%) shall be deducted from the first cash payment of
the selling price of said assets and other properties.- - - -
TWENTY-SEVENTH CLAUSE: THE COMPANY shall be free of all
responsibility with respect to any default or breach under this
Contract which may be due to causes of force majeure or caso fortui
to, within or without the country while they are in force. THE
COMPANY shall inform THE NATION in writing as soon as it may be
possible of the occurrence of any contingency due to force majeure or
caso fortuito. For the purpose of the present Contract, force
majeure shall include wars, revolutions, insurrections, civil
disturbances, blockades, embargoes, strikes and other labor
conflicts, riots, epidemics, viruses, fungi, and other maladies and
plagues, earthquakes, landslides, storms, floods, and other adverse
meteorological conditions, explosions, fires, thunders, orders or
instructions of any government or any entity or division of same,
chance incidents or those caused by anti-social groups, any failure
of installations or machinery wherever they may occur and any other
reason, whether or not they fall within the categories previously
mentioned, and with respect to which the affected party could not
exercise reasonable control and of such nature as to delay, restrain
or impede timely action by the party affected.- - - - - - -
TWENTY-EIGHTH CLAUSE: The present Operation Contract and the
Land-Lease Agreement which constitute a single transaction, shall
enter into effect simultaneously, consequently, if for any reason one
of the Agreements should expire, the other shall then also expire.
The two contracts shall be interpreted and be applicable as if the
two were considered to be one instrument.- -
TWENTY-NINTH CLAUSE: With the execution of the present Contract, both
parties shall deem terminated and definitively concluded any claim or
other difference which exists or could exist with respect to the
execution and compliance of the Contracts which up to this time were
in force between THE NATION and THE COMPANY, or with regard to
payment or failure to collect any kind of tax or any other amount
which may arise from the operations of THE COMPANY up to December 31,
1975, excluding that which THE COMPANY may have previously agreed to
cover. Each party shall take the necessary measures to terminate any
existing actions pending before any judicial tribunal or
administrative body of the Republic of Panama.- - - - - - - - - - - -
- - - - - -
THIRTIETH CLAUSE: THE NATION shall be able to declare
administratively the dissolution of this contract in the event of
default on the part of THE COMPANY, except in cases of force majeure
and caso fortuito with respect to any of the following obligations:- -
- - - - - - - - - - - - - - - - - - - - - - - - -
- - - - - -One (1) - Default in payment of any of the pecuniary
obligations owed to THE NATION in accordance with the provisions of
this Contract or the Land-Lease Agreement. With respect to tax
debts, default shall not be considered to exist as long as the
obligations are pending final decision from any judicial tribunals.
- - - - - -Two (2) - The minimum annual production and exportation
described in the Fourth Clause of the present Contract.- - - - -
- - - - - -In such instances, before proceeding to obtain an
administrative dissolution, THE NATION shall notify THE COMPANY in
writing of the default and THE COMPANY shall have a period of thirty
(30) days in which to initiate measures intended to correct the
default within a reasonable period. In addition, a cause for
administrative dissolution shall be bankruptcy of THE COMPANY.- - - -
- - - - - - - - - - - - - - - -
THIRTY-FIRST CLAUSE: THE COMPANY, that is, UNITED BRANDS COMPANY,
CHIRIQUI LAND COMPANY and COMPANIA PROCESADORA DE FRUTAS, S.A. ,
execute the present Contract and thus jointly assume all of the
rights and obligations emanating from this Contract.- - - - - - - - -
- - - - - - - - - - - - - - - - - - -
THIRTY-SECOND CLAUSE: The present Contract shall be deemed in effect
from January 1, 1976 and, consequently, thereafter the contractual
relations between THE COMPANY and THE NATION shall be governed solely
by the stipulations of this Contract. The duration of this Contract
shall be the same as that of the Land-Lease Agreement executed on the
same day.- - -
EXHIBITE.pol