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The SCP Contract
As of June 16, 1985, petitioner and Sun Country Produce,
Inc. (SCP), a wholly owned subsidiary of Dole, entered into a 5-
year agreement (SCP contract) entitled "Sales Subagency
Agreement". The SCP contract superseded the 1982 contract and,
as amended, was in effect during the years in issue.
Hereinafter, we will sometimes refer to the overall business
relationship between the Canelos group and Dole under the SCP
contract as the SCP deal.
Under the SCP contract, SCP agreed to use its marketing
resources to market more effectively in the United States,
Canada, and certain countries in Europe tomatoes, cucumbers, bell
peppers, squash, eggplant, and any other fresh produce specified
by the parties that was grown by the Canelos growers in various
areas in Mexico. SCP received a commission generally of 45
percent7 of the total profit on each product. Profit was
7Sec. 2.01 of the Sales Subagency Agreement dated as of June
16, 1985, provides in pertinent part:
2.01 Commission
At the beginning of each growing season,
G.A.C. and S.C.P. shall mutually agree upon an annual
profit target for all Products in the Territories.
Each year during the term of the Agreement, S.C.P.
shall, as compensation for its services, be paid a
commission, for any annual period in which the actual
profit equals or is less than the annual profit target,
of forty-five percent (45%) of the final season-end
(continued...)
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