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EXHIBIT 10.32
PURCHASE, DISTRIBUTION AND MARKETING AGREEMENT
BY AND BETWEEN
SALTON/MAXIM HOUSEWARES, INC.
AND
KMART CORPORATION
_________________________
JANUARY 27, 1997
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PURCHASE, DISTRIBUTION AND MARKETING AGREEMENT
This Agreement ("Agreement") is entered into as of January 27, 1997 (the
"Execution Date") between Salton/Maxim Housewares, Inc., a Delaware corporation
("Salton"), and Kmart Corporation, a Michigan corporation ("Kmart").
PREAMBLE
WHEREAS, pursuant to License Agreements by and between White Consolidated
Industries, Inc. ("WCI") and Salton (the "License Agreements"), Salton has the
exclusive right and license within the United States to use the trademark
"White-Westinghouse" and all associated designs and trade dress (together, the
"Trademark") in connection with the design, manufacture, advertising, sale and
promotion of, among others, the products listed on Exhibit A hereto, each of
which will bear and include the Trademark (such products bearing the Trademark
are hereinafter referred to as the "Products");
WHEREAS, Kmart is a leading discount retailer of various consumer and
other products, including products similar to the Products; and
WHEREAS, Salton desires to grant to Kmart certain exclusive rights and
obligations to purchase, distribute, sell, market and promote the Products in
the United States, and Kmart desires to accept and exercise these rights and
obligations, upon the terms and subject to the conditions of this Agreement.
WHEREAS, simultaneously with the execution of this Agreement, Kmart is
executing an agreement with New M-Tech Corporation, an affiliate of Salton, as
defined in Section 1.1 below (the "New Tech Agreement"), for the use of the
Trademark on Audio products, Video products, Telephones, Telephone Answering
Machines and Telephone accessories all as specifically described therein, which
agreement is critical to Kmart's overall program for use of the Trademark on
Products under this Agreement with Salton, is a primary inducement for Kmart's
entering into, and is a continuing necessary component of and precondition to
Kmart's performance under this Agreement with Salton.
Accordingly, in consideration of the foregoing, and for other good and
valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the parties hereto hereby agree as follows:
TERMS AND CONDITIONS
1. DEFINITIONS
As used in this Agreement, the following terms shall have the
meaning given to them below:
1.1 "Affiliate" means any Person involved in a situation where,
directly or indirectly, one Person controls, or has the power to
control, the other Person or a third party controls, or has the
power to control, both Persons.
1.2 "Discount Department Store" shall include, without
limitation, the Persons listed on Schedule 1.2 hereof as well as all
department stores which are similar to Discount Department Stores in
terms of market niche, size and product pricing which now or
hereafter may exist.
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1.3 "Person" shall include any individual, corporation,
partnership, association, cooperative, joint venture, or any other
form of business entity recognized under the law.
1.4 "sale" shall mean any action involving selling.
1.5 "sell" shall mean to, directly or indirectly, sell,
distribute, supply, solicit or accept orders for, negotiate for the
sale or distribution of, or take any other action that is in
furtherance of, any of the foregoing. "Sell" also include any other
forms of that verb, whether active or passive, or in the past,
present, or future tense.
1.6 "United States" shall mean the United States of America,
including Puerto Rico and Guam.
2. APPOINTMENT
2.1 Appointment by Salton; Acceptance by Kmart. Subject to the
provisions of this Agreement, Salton hereby appoints Kmart as the
sole and exclusive Discount Department Store to purchase,
distribute, sell, market and promote the Products in the United
States and Kmart hereby accepts such appointment. The rights granted
to Kmart under this Agreement shall hereinafter collectively be
referred to as the "Right." No other Discount Department Store
shall have any such Right during the Term of this Agreement and/or
any extension or renewal thereof, regardless of source (i.e.,
whether from Salton or any other entity) subject to Sections 10.4
and 10.5 hereof. Notwithstanding the foregoing, nothing in this
Agreement shall be deemed to preclude the sale of Products (i)Xxx
entities or stores other than Discount Department Stores including,
without limitation, retail department stores, specialty housewares,
gourmet and kitchen stores and national cable television programs or
(ii) by any Person outside the United States. Furthermore, nothing
in this Agreement shall preclude Kmart from purchasing products of
the type listed on Exhibit A hereto from any sources other than
Salton if such products do not bear or include or are not sold under
the Trademark, and no payments shall be due to Salton hereunder in
respect of such sales.
2.2 Territorial Limitations. Salton covenants and agrees that,
during the term of this Agreement or until this Agreement is
terminated in accordance with the provisions of Article 10 below:
2.2.1 Salton shall not, directly or indirectly, sell
any Product to a Discount Department Store in the United
States, subject to Sections 10.4 and 10.5 hereof.
2.2.2 Except with the prior written consent of Salton
(which consent may be refused in the sole, absolute and
arbitrary discretion of Salton), Kmart shall not sell any
Product to any Person outside the United States. The United
States includes Puerto Rico and Guam.
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2.2.3 The parties acknowledge and agree that the relationship
hereby established between Kmart and Salton is solely that
of buyer and seller of goods that each is an independent
contractor engaged in the operation of its own respective
business, that neither party shall be considered to be the
agent of the other party for any purpose whatsoever, except
as otherwise expressly indicated in this Agreement, and
that, except as otherwise expressly indicated in this
Agreement, neither party has any authority to enter into any
contract, assume any obligations or make any warranties or
representations on behalf of the other party. Nothing in
this Agreement shall be construed to establish a partnership
or joint venture relationship between Salton and Kmart.
Nothing in this Agreement shall be deemed in any way to
constitute a sublicense by Salton of its rights under the
License Agreement, and the relationship between the parties
hereto shall at all times be as set forth in this paragraph.
3. REPRESENTATIONS AND WARRANTIES OF SALTON
3.1 Salton represents and warrants to Kmart as follows:
3.1.1 Organization, Power and Authority. It is duly organized
and validly existing under the laws of the State of
Delaware, has all requisite power and authority to conduct
its business as now, and as proposed to be, conducted and to
execute, deliver and perform its obligations under this
Agreement. This Agreement has been duly authorized,
executed and delivered by Salton and represents a valid and
binding obligation enforceable against Salton in accordance
with its terms.
3.1.2 No Conflicts; Consents. Execution and delivery hereof, or
performance by Salton hereunder, shall not (a) violate or
create a default under (i)ESalton's Certificate of
Incorporation or by-laws (true and correct copies of which
have been delivered to Kmart), (ii) any mortgage, indenture,
agreement, note or other instrument to which it is a party
or to which its assets are subject including, without
limitation, the License Agreement or (iii) any court order
or decree or other governmental directive or (b) result in
the action of any lien, charge or encumbrance on any
material portion of Salton's assets, except as contemplated
hereby.
3.1.3 Brokers. No broker, investment banker, financial advisor
or other person is entitled to any broker's, finder's,
financial advisor's or other similar fee or commission in
connection with the transactions contemplated by this
Agreement based upon arrangements made by or on behalf of
Salton.
3.1.4 Trademark/Compliance with Laws. It has the contractual
right and authority to use the Trademark for the Products as
provided in this Agreement and to grant to Kmart all rights
which are set forth in this Agreement including but not
limited to the "Right" described in Section 2.1 herein,
including but not limited to, the right to import all
Products into the United States for the full duration of
this Agreement; and Salton shall provide U.S. Customs with
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sufficient proof and documentation to enable Kmart to do so.
(Notwithstanding the foregoing, Salton shall have up to ten
(10) business days to correct any such U.S. Customs Problems
which do not affect Kmart's ability to use the Trademark in
connection with the sale of any of the Products pursuant to
this Agreement.) In addition, no other Discount Department
Store shall have the right to use the Trademark in
connection with the sale of any of the Products or sell
Products bearing the Trademark or have any of Kmart's rights
hereunder during the Term of this Agreement and any renewal
and/or extension hereof. Furthermore, this Agreement as
well as Salton's performance hereunder shall be in
compliance with all applicable laws, rules and regulations
other than immaterial violations. Any claim which Kmart
reasonably believes impairs or would impair Kmart's ability
to receive any of the benefits of this Agreement, or any
failure under this Agreement and/or under the NewTech
Agreement with respect to this (or the Salton Agreement's)
Section 3.1.4 and/or Section 2.1, whether such failure
relates to any or all Products, shall entitle Kmart, in
addition to all other rights and remedies, without resort to
the notice and cure requirements under Section 10.3 herein,
to immediately terminate this Agreement and owe nothing to
Salton except for payment for Products accepted and sold by
Kmart through the date of termination.
3.1.5 Qualifications. Throughout the Term of this Agreement and
any renewal or extension hereof, Salton shall comply with
the following requirements:
a. New Vendor Packet Compliance. Salton must have executed
and delivered to Kmart all documents required by
Kmart's New Vendor Packet, including, but not limited
to, Kmart's agreement on standard purchase order terms
and conditions attached as Exhibit B (collectively, the
"Related Documents") and must currently be in full
compliance with the same except as required by this
Agreement. Salton's execution of this Agreement shall
constitute Salton's acceptance of and agreement to the
terms and conditions contained in all of the Related
Documents to the extent not inconsistent with the terms
of this Agreement.
b. Kmart Corporation Code of Business Conduct.Salton must
be in full compliance with the Kmart Code of Business
Conduct and all applicable laws, rules and regulations,
including but not limited to child, forced, and prison
labor laws and must not have violated the Code of
Business Conduct or applicable laws during the twelve
calendar months preceding the date of execution of this
Agreement.
c. Continuing Business Conduct with Kmart Foreign
Subsidiaries and Operations.Salton must not restrict or
curtail in any way its historical business practices
and course of dealing with Kmart's foreign subsidiaries
and other foreign operations if any existed.
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d. Industry Performance. Salton must at a minimum meet
normal industry standards for performance regarding
timing and completion levels of fill rates without
substitutions.
e. Electronic Data Interchange. Salton must accommodate
and participate in Kmart's electronic data interchange
program.
4. REPRESENTATIONS AND WARRANTIES OF KMART
4.1 Kmart represents and warrants to Salton as follows:
4.1.1 Organization, Power and Authority. It is duly organized
and validly existing under the laws of the State of
Michigan, has all requisite power and authority to conduct
its business as now, and as proposed to be, conducted and
to execute, deliver and perform its obligations under this
Agreement. This Agreement has been duly authorized,
executed and delivered by Kmart and represents a valid and
binding obligation enforceable against Kmart in accordance
with its terms.
4.1.2 No Conflicts; Consents. Execution and delivery
hereof, or performance by Kmart hereunder, shall not (a)
of Incorporation or by-laws (true and correct copies of
which have been delivered to Salton), (ii) any mortgage,
indenture, agreement, note or other instrument to which it
is a party or to which its assets are subject or (iii) any
court order or decree or other governmental directive or
(b) result in the action of any lien, charge or
encumbrance on any material portion of Kmart's assets.
4.1.3 Brokers. No broker, investment banker, financial advisor
or other person is entitled to any broker's, finder's,
financial advisor's or other similar fee or commission in
connection with the transactions contemplated by this
Agreement based upon arrangements made by or on behalf of
Kmart.
5. MINIMUM ORDERS; OTHER OBLIGATIONS
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5.3 Retail Sales Price. Kmart shall have sole discretion in
setting the sales price for the sale of the Products to its
customers.
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6. DELIVERY
6.1 Availability of Products. Products shall be shipped in
accordance with the Specific Purchase Orders. Salton shall use its
reasonable best efforts to make available to Kmart sufficient
quantities of the Products to satisfy Kmart's Product Orders.
6.2 Product Forecasts. To assist Salton in production scheduling
for the manufacture of the Products, Kmart shall provide to Salton,
monthly, a six month rolling forecast of its requirements for
Products. The first forecast shall be provided by Kmart to Salton
within thirty (30) business days of the Execution Date of this
Agreement (to forecast the requirements for the six months ended
June 30, 1997 and for the next five succeeding calendar months) and
thereafter shall be provided to Salton on or before the 20th day of
each month (to forecast the requirements for the next six succeeding
calendar months). It is understood and agreed that all forecasts
are estimates only and Kmart shall only be bound to purchase the
Products pursuant to Specific Purchase Orders issued by it to
Salton, subject to the satisfaction of the Minimum Product Order
commitment set forth in Section 5.1 hereof; and the Fee on any
shortfall in the Minimum Product Order for any Category and Kmart's
payment for conforming Products ordered and timely delivered through
the date of Termination shall be Salton's sole and exclusive remedy
hereunder.
6.3 Shipping Arrangements; Risk of Loss. The shipping
arrangements, insurance and risk of loss relating to Products
purchased hereunder shall be specified in each Specific Purchase
Order.
7. MANUFACTURE OF PRODUCTS; PRICE AND PAYMENT TERMS
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8. RETURNS, ALLOWANCES AND WARRANTIES
8.1 Terms of Specific Purchase Order to Control. The terms and
conditions of this Agreement, including the Purchase Order Forms, as
well as the terms and conditions set forth in each Specific Purchase
Order shall determine the rights and obligations of the parties with
respect to returns, allowances and warranties relating to Products
ordered thereunder.
9. DAMAGES, INDEMNIFICATION AND INSURANCE
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9.3 Survival. The provisions of this Section 9 shall
survive the termination or expiration of this Agreement.
10. TERM AND TERMINATION
10.1 Term. The Term of this Agreement shall be a period
commencing on the Execution Date and terminating on [*]
unless earlier terminated in accordance with this Section 10 of this
Agreement.
10.2 Extension of Terms.
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10.3 Termination by Either Party. The occurrence of one or more of
the following events shall constitute a default of the party
responsible for the occurrence of such event ("Default"):
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10.4 Termination at Option of Kmart.
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10.5 Termination at Option of Salton.
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10.6 Duties Following Termination. Upon Termination of this
Agreement, neither party shall have any obligation to the other
party except as hereinafter set forth in this Section 10.6.
Notwithstanding the termination or expiration of this Agreement
pursuant to this Article 10 or any other provision of this
Agreement, unless otherwise indicated in this Agreement, all rights
and obligations which were incurred or which matured under specific
Purchase Orders issued prior to the effective date of termination or
expiration shall survive termination and be subject to enforcement
under the terms of this Agreement. Termination of this Agreement
shall not affect any duty of Kmart or Salton under Sections 9.1,
11.1, 11.2, 11.3, 12.1, 12.4, 12.6, 12.11, 12.13 or 12.14 existing
prior to the
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effective date of termination or expiration , all of which are
intended to survive termination. Kmart shall have the right to
distribute, sell, market and promote all existing inventory of
Products ordered pursuant to Specific Purchase Orders prior to the
termination of this Agreement, and to use all packaging materials,
labels, tags, signage, advertising and promotional materials to
effectuate the sale of such Products.
10.7 Non-interference. Except for negotiations involving Salton
or with a Third Party Manufacturer, , Kmart agrees that, except with
Salton, it will not, during the Term of this Agreement or any
extension or renewal thereof negotiate, obtain information or
discuss with or enter into any agreement with any person or entity
covering the licensing, purchase, sale, marketing or distribution of
the Trademark for any of the Categories of Product purchased by
Kmart from Salton.
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11. CONFIDENTIALITY/PRESS RELEASES
11.1 Confidentiality and Non-Disclosure. Salton agrees that any
and all information in any form that is provided to Salton or any of
its representatives as part of this Agreement is provided and
received in confidence, and Salton, shall at all times preserve and
protect the confidentiality of such information, and of any other
proprietary or non-public information of or relating to Kmart or any
of its related companies of which it or any of its representatives
becomes aware or acquires during the performance of this Agreement
(such information is hereinafter referred to as "Confidential
Information"). Salton also agrees that it shall take all reasonable
steps to ensure that such Confidential Information will not be
disclosed to, or used by any person, association or entity except
its own employees, and then only to the extent necessary to permit
it to perform this Agreement.
Each of Salton and Kmart agrees to keep the Minimum Product Orders,
pricing, and Term of this Agreement (including rights of extension
and termination) strictly confidential, except that each of Salton
and Kmart shall be permitted to disclose any and all information
concerning the transactions contemplated hereby to the extent it is
legally required to do so, whether under applicable securities laws
or otherwise, provided, that Salton will use its reasonable best
efforts to file with the Securities and Exchange Commission or any
other applicable regulator or court a request for confidential
treatment of the pricing and other business terms set forth in this
Agreement.
In the course of performance of this Agreement, Salton may disclose
certain information to Kmart which Salton considers proprietary and
confidential. In order
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to be considered as proprietary and confidential and, thus, subject
to the following restrictions, Salton must comply with both of the
following requirements prior to disclosure of the information: (i)
the information must be clearly and conspicuously identified in
writing as "PROPRIETARY AND CONFIDENTIAL INFORMATION OF SALTON';
and (ii) Salton must limit its dissemination of the information to
an authorized representative of Kmart (i.e., one listed on attached
Exhibit E) with a need to know such information in furtherance of
the performance of this Agreement (the "Authorized Recipient")
Provided Salton has complied with (i) and (ii) above, the
Authorized Recipient shall maintain the confidentiality of such
information to the same extent Kmart protects its own proprietary
information and shall not disclose it to anyone other than Kmart
employees, agents and/or consultants with a need to know who shall
also be subject to this restriction.
Confidential Information shall not include information that a party
can demonstrate by written evidence:
(i) is in the public domain (provided that
information in the public domain has not and does not come
into the public domain as a result of the disclosure by the
receiving party or any of its Affiliates);
(ii) is known to the receiving party or any of its
Affiliates prior to the disclosure by the other party; or
(iii) becomes available to the party on a
non-confidential basis from a source other than an Affiliate
of that party or the disclosing party.
11.2 Press Releases. Salton shall not issue any press releases
relating to this Agreement or its relationship with Kmart without
the prior written approval by an authorized representative of either
the Corporate Affairs Department or the Investor Relations
Department of Kmart as to the contents thereof.
11.3 The Press Release confidentiality and non-disclosure
obligations contained herein shall survive and continue after
termination of this Agreement or any related agreements the parties
may execute, and shall bind each of Salton's and Kmart's legal
representatives, successors and assigns.
12. GENERAL TERMS AND CONDITIONS
12.1 Dispute Resolution. All disputes arising out of, or in
relation to, this Agreement (other than disputes arising out of any
claim by a third party in an action commenced against a party) shall
be referred for decision forthwith to a senior executive of each
party who is not personally involved in the dispute. If no
agreement can be reached through this process within thirty (30)
days of request by one party to the other to nominate a senior
executive for dispute resolution, then either party shall be
entitled to pursue any and all available legal remedies.
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12.2 No Assignment. Other than as specifically set forth in this
Agreement, this Agreement may not be assigned nor may the
performance of any duties hereunder be delegated by either party
without the prior written consent of the other party; provided, that
any such attempted assignment shall be void and shall not relieve
the assignor from any of its obligations hereunder or under any
other document or agreement delivered by such party pursuant to, or
delivered (or acknowledged to have been delivered) contemporaneously
with or in connection with the execution of, this Agreement, which
shall continue to be binding upon such party notwithstanding any
such attempted assignment.
12.3 Notices. Any notice required or permitted to be given under
this Agreement shall be sufficiently given if in writing and
delivered by registered or certified mail (return receipt
requested), facsimile (with confirmation of transmittal), overnight
courier (with confirmation of delivery), or hand delivered to the
appropriate party at the address set forth below, or at such other
address as such party may from time to time specify for that purpose
in a notice similarly given:
If to Salton: Salton/Maxim Housewares, Inc.
000 Xxxxxxxx Xxxxxx Xxxxx
Xx. Xxxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxxx X. Xxx
Fax: (000) 000-0000
with a copy to (other than Greenberg, Traurig, Hoffman, Lipoff,
regularly prepared notices, reports, etc. Xxxxx & Quentel, P.A.
required to be delivered hereunder): 0000 Xxxxxxxx Xxxxxx
Xxxxx, Xxxxxxx 00000
Attn: Xxxxx X. Xxxxxxx
Fax: (000) 000-0000
and
Xxxxxxxxxxxx Xxxx & Xxxxxxxxx
0000 Xxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxx Xxxxxxxxxx
Fax: (000) 000-0000
If to Kmart: Kmart Corporation
0000 X. Xxx Xxxxxx Xxxx
Xxxx, Xxxxxxxx 00000
Attn: Divisional Vice President
Home Electronics/Home Appliances
Fax: (000) 000-0000
with a copy to (other than Kmart Corporation
regularly prepared notices, reports, etc. Legal Department
required to be delivered hereunder): 0000 X. Xxx Xxxxxx Xxxx
Xxxx, Xxxxxxxx 00000
Attn: General Counsel
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Any such notice shall be effective (i) if sent by mail, as
aforesaid, three (3) business days after mailing, (ii) if sent by
facsimile, as aforesaid, when sent, and (iii) if sent by courier or
hand delivered, as aforesaid, when received. Provided, that if any
such notice shall have been sent by mail and if on the date of
mailing thereof or during the period prior to the expiry of the
third business day following the date of mailing there shall be a
general postal disruption (whether as a result of rotating strikes
or otherwise) in the United States, then such notice shall not
become effective until the third business day following the date of
resumption of normal mail service.
12.4 Governing Law and Consent to Jurisdiction. THIS AGREEMENT
SHALL BE DEEMED TO HAVE BEEN EXECUTED AND DELIVERED IN TROY,
MICHIGAN, AND SHALL BE CONSTRUED, INTERPRETED AND ENFORCED UNDER
AND IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF MICHIGAN.
SALTON AGREES TO EXERCISE ANY RIGHT OR REMEDY IN CONNECTION WITH
THIS AGREEMENT EXCLUSIVELY IN, AND HEREBY SUBMITS TO THE
JURISDICTION OF, THE STATE OF MICHIGAN COURTS OF OAKLAND COUNTY,
MICHIGAN OR THE UNITED STATES DISTRICT COURT IN DETROIT, MICHIGAN.
12.5 Binding Agreement. This Agreement shall be binding upon the
parties hereto, and their respective successors and permitted
assigns, whether by operation of law or otherwise.
12.6 Entire Agreement. This Agreement and all other documents and
instruments specifically incorporated by reference herein contain
the entire agreement and understanding of the parties with respect
to the subject matter hereof and thereof and supersedes all
negotiations, prior discussions and agreements relating to the
subject of this Agreement. Any terms or conditions in any forms of
Salton used in the performance of this Agreement which are in
conflict with or in addition to the terms and conditions of this
Agreement shall be void. This Agreement may not be amended or
modified except by a written instrument signed by all of the parties
hereto.
12.7 Headings. The headings to the various articles and
paragraphs of this Agreement have been inserted for convenience only
and shall not affect the meaning of the language contained in this
Agreement.
12.8 Waiver. The waiver by any party of any breach by another
party of any term or condition of this Agreement shall not
constitute a waiver of any subsequent breach or nullify the
effectiveness of that term or condition.
12.9 Counterparts. This Agreement may be executed in identical
duplicate copies exchanged by facsimile transmission. The parties
agree to execute two identical original copies of the Agreement
after exchanging signed facsimile versions. Each identical
counterpart shall be deemed an original, but all of which together
shall constitute one and the same instrument.
12.10 Severability of Provisions. If, for any reason whatsoever,
any term, covenant or condition of this Agreement or the application
thereof to any party or circumstance
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is to any extent held or rendered invalid, unenforceable or
illegal, then such term, covenant or condition:
(i) is deemed to be independent of the remainder of such
document and to be severable and divisible therefrom and its
validity, unenforceability or illegality does not affect,
impair or invalidate the remainder of such document or any
part thereof; and
(ii) continue to be applicable and enforceable to the
fullest extent permitted by law against any party and
circumstances other than those as to which it has been held
or rendered invalid, unenforceable or illegal.
12.11 Limitation on Damages. Except with respect to Salton's
liability under Section 9 of this Agreement, neither party shall be
liable to the other party for incidental, consequential, punitive or
exemplary damages arising in connection with this Agreement or the
performance, omission of performance or termination hereof, even if
said party has been advised of the possibility of such damages and
without regard to the nature of the claim or the underlying theory
or cause of action (whether in contract, tort or otherwise). In
addition, in no event shall Kmart be liable for direct or any other
damages in excess of the amount to which Salton is entitled to under
Section 5 herein for Minimum Product Orders which have not been
placed as of the effective date of the Default or Termination plus
payment due for Products accepted by Kmart as of such date, nor
shall Kmart's aggregate liability under this Agreement exceed such
amount.
12.12 Force Majeure. Time is of the essence in the performance of
all parts of this Agreement; provided, however, performance by
either party shall be excused during the period in which such
performance is made reasonably impossible because of a strike, act
of God or change in laws ("Force Majeure"). Salton, however, shall
use reasonable diligence to procure substitute performance. If the
period during which performance is excused due to Force Majeure
exceeds ten (10) days, then either party may terminate its
obligations under any Specific Purchase Orders without liability,
and such cancelled Order(s) shall continue to count towards
fulfillment of the commitments set forth in Section 5 herein. If
the period of Force Majeure excusing Salton's performance exceeds
120 days and such non-performance relates to more than 20% of the
Minimum Product Orders during any Period, then Kmart may terminate
this entire Agreement without further obligation to Salton. Upon
any such termination, nothing shall be due from Kmart beyond payment
for Products accepted by Kmart as of the effective date of
termination.
12.13 Kmart Marks. Salton acknowledges Kmart Properties Inc.'s
("KPI") exclusive right, title and interest in and to all
trademarks, trade names, service marks, logos, assignees, program
and event names, identifications and other proprietary rights and
privileges which it licenses to Kmart with the right to sublicense
(the "Kmart Marks"). This Agreement and its various provisions are
not a license or assignment of any right, title or interest in the
Kmart Marks by KPI or Kmart to Salton. Salton shall not in any
manner represent that it has any ownership in the Kmart Marks and
shall not do or cause to be done anything impairing Kmart's
exclusive license in
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the Kmart Marks. Salton shall not use, print or duplicate the
Kmart Marks except and only if Salton has obtained prior approval
as provided herein. Salton's use of the Kmart Marks is limited to
the Term of this Agreement; upon termination hereof, Salton shall
immediately cease all use of the Kmart Marks. Salton shall not
assign or attempt to assign any rights with regard to the Kmart
Marks which arise hereunder; any such attempted assignment shall be
void.
12.14 White Westinghouse Marks. Kmart acknowledges WCI's
exclusive right, title and interest in and to the Trademarks. This
Agreement and its various provisions are not a license or assignment
of any right, title or interest in the Trademark or the License
Agreement by Salton or WCI to Kmart. Kmart shall not do or cause to
be done anything impairing Salton's exclusive license in the
Trademark. Kmart's use of the Trademark is limited to the terms and
conditions contained in this Agreement; upon termination hereof,
Kmart shall immediately cease all use of the Trademark other than in
connection with the sale, advertising or merchandising of Product
inventory and order commitments (if any) existing at the time of
such termination. Kmart shall not assign or attempt to assign any
rights with regard to the Trademark which arise hereunder; any such
attempted assignment shall be void.
12.15 No Third Party Beneficiaries. The parties hereto expressly
agree that there shall be no third party beneficiaries to this
Agreement.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of
the Execution Date.
SALTON/MAXIM HOUSEWARES, INC. KMART CORPORATION
By: By:
(Signature) (Signature)
Name: Name:
Title: Title:
23
25
EXHIBIT A
DESCRIPTION OF PRODUCTS
KITCHEN HOUSEWARES:
[*]
PERSONAL CARE:
[*]
FANS AND HEATERS:
[*]
ELECTRIC AIR CLEANERS AND HUMIDIFIERS:
[*]
* Denotes Confidential Treatment
24
26
SCHEDULE 1.2
DISCOUNT DEPARTMENT STORES
[*]
* Denotes Confidential Treatment
25
27
Purchase Order Terms and Conditions EXHIBIT B
[*]
* Denotes Confidential Treatment
28
Purchase Order and Conditions EXHIBIT C
[*]
* Denotes Confidential Treatment
29
Terms and Conditions EXHIBIT D
[*]
* Denotes Confidential Treatment
30
EXHIBIT E
AUTHORIZED REPRESENTATIVES OF KMART
[*]
* Denotes Confidential Treatment
26
