GAC Produce Co., Inc., An Arizona Corporation - Page 15




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         guaranteed them individually and as petitioner's president.  SCP              
         gave the Canelos group the right to use the Dole trademark in                 
         connection with the distribution and sale of the products.  In                
         addition, the Canelos brothers gave SCP a nontransferable,                    
         nonexclusive license to use their ABC trademark8 in connection                
         with the distribution and sale of products for the duration of                
         the contract.9                                                                
              Petitioner agreed to arrange for consignment to SCP, for                 
         sale pursuant to the SCP contract, a minimum of 25 percent of the             
         total aggregate production by the Canelos growers.  Petitioner                
         also agreed to be responsible for invoicing all sales arranged                
         for or by SCP.  Under the SCP contract, petitioner did not share              
         in the net profits or losses of the joint venture, and its only               
         compensation was its commission.                                              
             SCP separately paid for and provided additional marketing                
         support to petitioner, including the following additional                     
         services to petitioner:  Employing one or two SCP salesmen to                 
         work at petitioner's offices and help sell petitioner's produce;              


               8Although Mr. Canelos' father established and registered the            
          ABC label in Culiacan, Mexico, petitioner registered the ABC                 
          label in the United States under petitioner's name when the                  
          Canelos group began dealing with Dole.                                       
               9The SCP contract allowed petitioner to use the Dole label              
          and Dole to use the ABC label without specific charge.  The                  
          benefit of usage of those labels was included in the commission              
          rates charged.                                                               




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Last modified: May 25, 2011