Common use of Cancellation of Note Clause in Contracts

Cancellation of Note. If the Distribution and Marketing Agreement between Salton and K-Mart Corporation dated January 27, 1997, as it may be amended or renewed, is cancelled by K-Mart prior to June 30, 2004, the principal balance of this note shall be reduced as of the date of such cancellation in accordance with the amortization schedule attached hereto as Schedule I, and, upon such reduction, accrued interest, interest already paid, and interest accruing after such reduction prior to the maturity of this note shall be recalculated on the reduced principal balance. To the extent that, on account of such reduction, interest has been overpaid, such overpayment shall be offset, first, against the next accruing amounts of interest not yet paid, and then against the reduced principal balance, but Windmere shall not be obligated otherwise to return accrued interest or principal already paid.