Letter Agreement - Windmere Corp. and Salton/Maxim Housewares Inc.
LETTER AGREEMENT DATED APRIL 30, 1997 ('AGREEMENT')
WINDMERE CORPORATION ('WINDMERE')
SALTON/MAXIM HOUSEWARES, INC. ('SALTON')
WHEREAS, Windmere, with its main office in Miami Lakes, Florida, and Salton,
with its main office in Mt. Prospect, Illinois, have worked together to obtain
the benefits of significant sales of products under the White-Westinghouse
brand to K-Mart Corporation ('K-Mart'), and have signed a multi-year contract
between Salton and K-Mart documenting said relationship.
WHEREAS, the distribution profits on the sales to K-Mart of the
White-Westinghouse brand of appliances will all be received and recorded on the
books of Salton (the 'White-Westinghouse Profits').
NOW, THEREFORE, following K-Mart's execution of the aforesaid contract and in
consideration of Windmere's marketing cooperation efforts in connection with
the Company's supply contract with Kmart and Windmere's guarantee of the
Company's obligations under such contract, this Letter Agreement documents the
obligation of Salton to pay a fee as described herein to Windmere as
compensation for its efforts on Salton's behalf in obtaining said
FEE: Salton shall pay Windmere a fee equal to 50% of the White-Westinghouse
profits (the '50% Fee'). The 50% Fee shall be paid within 60 days of the close
of each calendar quarter based on the transactions in said quarter, accompanied
by a sales report transmitted by facsimile, which will provide such sales
information and other data as Windmere may reasonably require to describe the
calculation of the 50% fee.
For purposes of this Agreement, the 'White-Westinghouse Profits' shall be
computed based on all White-Westinghouse sales (net of actual returns) to
K-Mart less direct costs of sales and direct expenses, such as the Detroit
office selling expenses, inspection fees, warehousing costs, freight out,
royalties and cooperative advertising. Direct Expenses shall not include taxes
whether based on income or property, data processing and/or other selling,
general and administrative costs except those identified in the preceding
sentence or mutally agreed upon.
PAYMENT: Payment shall be by wire transfer to Windmere's bank account.
TERM: This Agreement shall not be cancelable during the term of that
definitive contract between Salton and K-Mart, including any extensions or
modifications thereof. The term of this agreement shall coincide with the
contract term as specified in that said contract between Salton and K-Mart.
JURISDICTION: This Agreement shall be interpreted under the laws of the State
Windmere Corporation Salton/Maxim Housewares, Inc.
By: /s/ Harry D. Schulman By: /s/ Leonhard Dreimann
Harry D. Schulman Leonhard Dreimann
Senior Vice President President