1
EXHIBIT 10.33
[English Translation of Original Spanish Document]
Supply Agreement executed by and between The Coca-Cola Export Corporation,
Mexico Branch as the purchaser, herein represented by Xxxxxx Xxxxxxx Xxxxxx in
his capacity as Attorney-in-fact thereof, hereinafter, COEXPORT, and GRUPO
INDUSTRIAL SANTA ENGRACIA, S.A. de C.V. as the supplier, herein represented by
its General Attorney-in-fact, Xxxx Xxxxx Xxxxxxxx Brohez, hereinafter, THE FRUIT
GROWER, pursuant to the following recitals and clauses.
R E C I T A L S
I THE FRUIT GROWER states that:
A) It is a company organized and existing pursuant to the General Law of
Mercantile Companies and that for all legal purposes regarding this
Agreement, it states as its domicile that located at Ave. Carrera Xxxxxx
number 226 Pte., Ciudad Victoria, 87000, Tamaulipas.
B) It is registered in the Federal Taxpayers Registry under number
GIS-880802-GH6.
C) Among other activities, it is engaged in the cultivation of citric fruits,
for which purpose it rents and owns lands to be used in this agricultural
activity.
D) Xx. Xxxx Xxxxx Xxxxxxxx Brohez evidences his legal capacity as Attorney-
in-fact thereof with Public Instrument Number 2101 dated the thirty-first
day of June, 1994, issued by Notary Public Number 187 with jurisdiction in
Victoria, Tamaulipas.
II COEXPORT states that:
A) It is a branch office duly authorized to operate in the Mexican Republic
pursuant to the General Law of Mercantile Companies.
B) It is registered in the Federal Taxpayers Registry under number CCE-
520101-TC7.
- 1 -
2
[English Translation of Original Spanish Document]
C) Among other activities, it is engaged in the production of soft- drink
concentrates of various flavors, for which reason it requires ITALIAN LEMON
FRUIT. This product has traditionally been imported from other countries by
COEXPORT and other consumers, since sufficient amounts for meeting the
domestic demand are not produced in Mexico. Consequently, COESPORT
established a promotion and technical assistance program for the production
of Italian Lemon among the citriculturists in the state of Tamaulipas and
other states of the Mexican Republic.
D) Xx. Xxxxxx Xxxxxxx Xxxxxx evidences his legal capacity as Attorney-in-fact
thereof under the terms of Public Instrument Number 80481 dated the
sixteenth day of January, 1995, issued by Notary Public Number 9 for the
Federal District, Xx. Xxxx Xxxxx Xxxxxxxxxx Xxxxxx.
E) It states as its domicile for the purposes of this Agreement that located
at Xxxxx Xxxxx 000, xxxxxxx Xxxxxx xx Xxxxxxxxxxx, 00000 Xxxxxx City,
Federal District, Delegacion Xxxxxx Xxxxxxx.
III. Both parties state that they are aware of the above recitals and that they
are all true, for which reason they wish to execute this Agreement pursuant
to the following:
C L A U S E S
ONE: THE FRUIT GROWER hereby binds itself to plant in a term of three years,
3500 ha (three thousand five hundred hectares) of Italian Lemon fruit trees,
whether directly or through affiliate companies or subsidiaries over which it
has control whether by contractual rights or as a majority shareholder, pursuant
to the planting program of Exhibit "A" hereto, which has been signed by the
parties and forms a part hereof.
THE FRUIT GROWER hereby binds itself to carry out all the necessary tasks in its
orchards in order to guarantee COEXPORT a minimum delivery in metric tons of
fresh fruit per year, pursuant to the following annual harvest schedule, which
may vary for causes beyond the control of THE FRUIT GROWER (frosts, prolonged
droughts, etc.).
- 2 -
3
[English Translation of Original Spanish Document]
Annual Harvest Program
Year M Tons of Fruit/Year Year M Tons of Fruit/Year
1998 1,200 2004 91,100
1999 2,400 2005 113,900
2000 3,500 2006 136,000
2001 10,200 2007 159,000
2002 33,100 2008 177,000
2003 65,500 2009 182,300
TWO: THE FRUIT GROWER hereby binds itself to provide directly or through
affiliate companies or subsidiaries over which it has control, whether by
contractual rights or as a majority shareholder, and COEXPORT hereby binds
itself to purchase the entire production of fresh fruit that THE FRUIT GROWER
obtains from the three thousand five hundred hectares set forth in Clause One
hereof and under the terms set forth in clauses Three to Fourteen hereof.
THREE: This Agreement shall have a term of twenty years as from the date of its
execution. The parties may extend the same for a period of the years with the
execution of a written agreement therefor, to be executed within the last 30
days of the term of existence hereof.
FOUR. THE FRUIT GROWER hereby agrees that COEXPORT only binds itself to purchase
the fresh fruit obtained during the natural harvest of the plantation that meets
the quality specifications established in Exhibit "B" hereto, which has been
signed by the parties and forms an integral part hereof. Likewise, COEXPORT
shall have a preferential right to acquire fresh fruit produced outside of the
natural harvest, under the same terms and conditions established for the
purchase of the natural harvest.
FIVE: THE FRUIT GROWER shall deliver the fresh Italian lemon fruit free-on-board
at the citric fruit processing plant designated by COEXPORT within a maximum
area of 500 km. from the location of the plantation, with a quality such that,
when processed, cold-pressed Lemon Oil is obtained which meets the
specifications for this product contained in the Foods chemical codes (FCC) and
has a minimum content of 2.3% aldehydes, known as Citral (c10H160). The price
per metric ton of fresh fruit that COEXPORT shall pay to THE FRUIT GROWER shall
be calculated based on the kilograms of Italian Lemon oil contained as the total
weighed average of the natural harvest and in the same manner for the harvest(s)
out of this season per metric ton of fresh fruit, applying for its payment, the
prices stipulated in Exhibit "C" hereto, which has been signed by the parties
and forms an integral part hereof.
- 3 -
4
[English Translation of Original Spanish Document]
In order to determine the content of Italian Lemon oil for each ton of fresh
fruit that THE FRUIT GROWER delivers to COEXPORT, the analysis methods which are
established in Exhibit "D" hereto shall be applied, which has been signed by the
parties and forms an integral part hereof.
The content of Essential oil of the fruit must be determined by COEXPORT or
whomever it designates, by means of the analysis of representative samples of
each truckload of fruit that THE FRUIT GROWER or whomever it designates delivers
to COEXPORT at the processing plant. THE FRUIT GROWER or whomever it designates,
may observe the sampling of the fruit and the determination of the Oil content.
In the event that the annual average of aldehyde content in the cold-pressed
Italian lemon Oil without waxes is less than 2.3%, THE FRUIT GROWER hereby
agrees that COEXPORT shall reduce the price stipulated in Exhibit "C" by 1.0%
for each tenth of a point in which the aldehyde average is under the 2.3%
minimum. At its discretion, COEXPORT may or may not purchase the fruit whose
aldehyde content in the Oil is lees than 2.0%, in which case both parties agree
to negotiate the price at the time of purchase.
For calculating the deduction of the price due to a low aldehyde content, the
resulting annual actual average shall be subtracted from the 2.3% minimum and
the difference shall be divided by 10. The result shall be multiplied by the
price paid per metric ton of fruit during the calendar year in which a low
content of aldehydes was recorded (Exhibit "C"). The result shall be the total
in dollars that THE FRUIT GROWER must return to COEXPORT at the latest on March
31 of the year following the harvest year.
COEXPORT shall pay the final decision regarding the content of aldehydes in the
oil and shall share its analysis method for the determination with THE FRUIT
GROWER.
COEXPORT. shall make weekly installments after the first fruit delivery by THE
FRUIT GROWER, basing these payments on the fruit-oil content determined by
COEXPORT or whomever it may designate, in representative samplings of each
delivery that THE FRUIT GROWER makes at the Processing Plant. At the end of the
harvest and upon the last fruit delivery, both parties hereby agree to make the
necessary adjustments between the paid value and the actual value found as
content of fruit oil in the final payment, which shall be at the latest four
weeks after the last delivery of fresh fruit.
The same payment process shall be applied in the event that fruit is sent
outside of the natural harvest.
- 4 -
5
[English Translation of Original Spanish Document]
SIX: The payments made by COEXPORT for the purchase of fresh fruit shall be in
U.S. dollars at the exchange rate in Mexican currency which Banco de Mexico
fixes for such purpose and which is published in the Official Gazette of the
Federation on the date on which the payment is made.
SEVEN: COEXPORT shall grant THE FRUIT GROWER, free of charge, the technical
assistance required pursuant to generally accepted Italian Lemon growing and
production practices for optimizing the production of citric fruits. The
technical assistance to be granted by COEXPORT shall be by means of technical
circular letters and visits to the orchard, the technical personnel designated
by COEXPORT preparing a written report with the required technical
recommendations. THE FRUIT GROWER shall be free to follow the suggestions or
reject them at any time without prejudice to the obligations that THE FRUIT
GROWER acquires as a result of the execution of this Agreement. In no event
shall COEXPORT be responsible for the resulting quantity or quality of the
obtained fresh fruit, which shall at all times be the responsibility of THE
FRUIT GROWER.
EIGHT: COEXPORT hereby binds itself to THE FRUIT GROWER to finance the harvest
and the transportation on the first supply of fresh fruit to the processing
plant designated by COEXPORT, discounting any advance payment from the first
installment made by COEXPORT.
NINE: COEXPORT shall, without charge, grant THE FRUIT GROWER up to 875,000
(eight hundred and seventy five thousand) Italian lemon saplings, sufficient for
planting the 3,500 ha (three thousand five hundred) subject matter on this
Agreement, pursuant to the schedule of Exhibit "A" hereto. Likewise, if THE
FRUIT GROWER decides to plant a density greater than 250 trees per hectare, the
remaining trees needed for the planting shall be on its account.
TEN: It is hereby expressly agreed that the provisions of Article 1639 of the
Civil code in force for the state of Tamaulipas and its correlating Article 2309
of the Civil code in force for the Federal District shall not apply to this
Agreement, since it is THE FRUIT GROWER who undertakes the risk that the harvest
may not exist. If THE FRUIT GROWER so desires, it may contract an insurance
policy at its expense which covers the risk that a harvest may not exist, as
well as the risk of its trees being damaged by natural phenomena, willful acts
or negligence.
THE FRUIT GROWER hereby binds itself to take any necessary action to repair any
damage that the trees of its plantation may suffer due to natural phenomena, or
caused by fire, sabotage or any other act of similar nature.
ELEVEN: COEXPORT shall not be responsible for any claim derived from the labor
relationships between THE FRUIT GROWER and its workers. THE FRUIT
- 5 -
6
[English Translation of Original Spanish Document]
GROWER hereby binds itself to exclude and hold COEXPORT harmless from any
civil, labor or criminal claim, including work-related accidents.
TWELVE: The Civil Code of the Federal District shall govern all that not
provided for herein.
THIRTEEN: The parties hereby state that there are no flaws of consent in this
Agrement which may render it null and void.
FOURTEEN: Both parties hereby agree that this Agreement substitutes and
supersedes all previous Agreements as of this date.
FIFTEEN: For the construction and fulfillment of this Agreement, the parties
shall subject themselves to the jurisdiction and competence of the courts of
Mexico City, Federal District, hereby waiving any jurisdiction of their present
or future domiciles.
Once this Agreement was read in its entirety and the parties became aware of its
content and legal scope, the parties execute this Agreement in Ciudad Victoria,
Tamaulipas, on the second day of April, 1998.
By: COEXPORT By: THE FRUIT GROWER
------------------------- ---------------------------------
Xxxxxx Xxxxxxx Xxxxxx Xxxx Xxxxx Xxxxxxxx Brohez
Witness: Witness:
------------------------- ---------------------------------
Xxxxxxxx Xxxxxxxxx Xxx Xxxxx Xxxxx Xxxxxxxxx R.
Witness: Witness:
------------------------- ---------------------------------
Xxxxxxx Xxxx Berra Xxxxxxxx Xxxxxxxx Xxxxxxxx
- 6 -
7
English Translation of Original Spanish Document
EXHIBIT "A"
Planting Schedule 1997 - 1999
-------------------------------------------------------------------------------
FIRST STAGE SCHEDULE
Year No. of Ha.
1997 January - December 500
1998 January - December 2,300
1999 January - October 700
Total: 3,500
-------------------------------------------------------------------------------
-7-
