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computed after subtracting from total sales revenue selling
costs, freight costs, product costs, import duties, any Mexican
imputed business taxes assessed on sales of the product, and any
exchange rate losses due to either devaluation of the peso or the
currency repatriation requirements of the Mexican Government.
Included in selling costs was a commission of 40 cents per box
paid to petitioner. The Canelos growers received the remaining
55-percent share of the profits. SCP further agreed to share in
50 percent of the losses and to advance funds for the working
capital needs of the venture up to an amount mutually agreed upon
by the parties. Petitioner executed promissory notes with SCP in
which petitioner promised to repay the advances, and Mr. Canelos
7(...continued)
profit calculation made with respect to the growing and
marketing of the products during the annual period as
specified in Section 2.02. For any annual period in
which the actual annual profit exceeds the annual
profit target, the following commission shall be paid
to S.C.P.:
S.C.P. COMMISSION
AMOUNT OVER ANNUAL PERCENTAGE ON AMOUNT
PROFIT TARGET OVER PROFIT TARGET
Up to $2,000,000 40%
$2,000,001 to $4,000,000 35%
$4,000,001 and Over 30%
Should G.A.C. and S.C.P. be unable to reach
agreement, as to the annual profit target for any
annual period during the term of this Agreement, the
parties hereby agree that the annual profit target for
such annual period shall be the lower of the previous
annual period's budget projections or actual financial
results as shown on the financial statements.
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