- 39 -
follows: (1) The November 19 letter omits the October 23, 1986,
paragraph that states “According to the terms of the agreement, I
suppose that technically you would have to do this [i.e., repay
the excess draw]”; and (2) the November 19 letter replaces the
phrase “the draws” by the phrase “future draws” after “reduce” in
the October 23 letter clause “it could become necessary to reduce
the draws to bring them back into balance.”
On December 12, 1986, petitioners executive director sent a
letter to Watson about the treatment of general and
administrative costs under the Contract. In the course of this
letter, he pointed out that the auditors “were in the office to
begin preliminary work on the 1986 Financial Statements.”
Petitioner and W&H executed an addendum to the Contract on
April 8-9, 1987. The addendum provides that, beginning with
1986, petitioner would not have to repay draws taken in excess of
its 50 percent of its housefile income, to the extent sufficient
net fundraising revenue was not raised. The addendum states that
such excess draws would be treated in the same manner as prospect
mailing debts for purposes of the Contract. The addendum further
provides that petitioner’s monthly draws would be agreed to in
writing by W&H and petitioner, and requires W&H to give 90 days’
prior written notice to petitioner in order to effectuate any
reduction in the monthly draws. Petitioner’s then-chairman
believed that W&H agreed to the April 1987 addendum--especially
the nonrefundability of the draws--because W&H hoped that it
Page: Previous 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 NextLast modified: May 25, 2011