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EXHIBIT 10.2
PURCHASE, DISTRIBUTION AND MARKETING AGREEMENT
BY AND BETWEEN
NEW M-TECH CORPORATION
AND
KMART CORPORATION
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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 New M-Tech Corporation, a Florida corporation
("NewTech"), and Kmart Corporation, a Michigan corporation ("Kmart").
PREAMBLE
WHEREAS, pursuant to License Agreements by and between White Consolidated
Industries, Inc. ("WCI") and NewTech (the "License Agreements"), NewTech 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, NewTech 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 Salton/Maxim Housewares, Inc., an Affiliate of
NewTech, as defined in Section 1.1, below (the "Salton Agreement"), for the use
of the Trademark on Kitchen Housewares, Personal Care products, fans and
heaters and electric air cleaners and humidifiers, as specifically described
therein, which agreement is critical to Kmart's overall program for use of the
Trademark on Products under this Agreement with NewTech, 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 NewTech.
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.
1.3 "Person" shall include any individual, corporation, partnership,
association, cooperative, joint venture, or any other form of
business entity recognized under the law.
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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 NewTech; Acceptance by Kmart. Subject to the
provisions of this Agreement, NewTech 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 NewTech 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) by
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
NewTech if such products do not bear or include or are not sold
under the Trademark, and no payments shall be due to NewTech
hereunder in respect of such sales.
2.2 Territorial Limitations. NewTech 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 NewTech 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 NewTech (which
consent may be refused in the sole, absolute and arbitrary
discretion of NewTech), Kmart shall not sell any Product to
any Person outside the United States. The United States
includes Puerto Rico and Guam.
2.2.3 The parties acknowledge and agree that the relationship
hereby established between Kmart and NewTech 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 NewTech
and Kmart. Nothing in this Agreement shall be deemed in
any way to constitute a sublicense by NewTech of its rights
under the
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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 NEWTECH
3.1 NewTech 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
Florida, 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 NewTech and represents a valid
and binding obligation enforceable against NewTech in
accordance with its terms.
3.1.2 No Conflicts; Consents. Execution and delivery hereof, or
performance by NewTech hereunder, shall not (a) violate
or create a default under (i) NewTech'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 NewTech'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
NewTech.
3.1.4 Trademark/Compliance with Laws. It has the contractual
right and authority to use the Trademark for all of 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, and also, including but not limited to,
the right to import all Products into the United States for
the full duration of this Agreement; and NewTech shall
provide U.S. Customs with sufficient proof and
documentation to enable Kmart to do so. (Notwithstanding
the foregoing, NewTech 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 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 NewTech'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 the benefits of this Agreement, or any failure
under this Agreement and/or under the Salton 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
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to NewTech 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, NewTech shall comply with
the following requirements:
a. New Vendor Packet Compliance. NewTech 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. NewTech's execution of
this Agreement shall constitute NewTech'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. NewTech
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. NewTech 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.
d. Industry Performance. NewTech must at a minimum meet
normal industry standards for performance regarding
timing and completion levels of fill rates without
substitutions.
e. Electronic Data Interchange. NewTech must
accommodate and participate in Kmart's electronic data
interchange program.
4. REPRESENTATIONS AND WARRANTIES OF KMART
4.1 Kmart represents and warrants to NewTech 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) violate or
create a default under (i) Kmart's Certificate of
Incorporation or by-laws (true and correct copies of which
have been delivered to NewTech), (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
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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
5.3 Retail Sales Price. Kmart shall have sole discretion in setting
the sales price for the sale of the Products to its customers.
6. DELIVERY
6.1 Availability of Products. Products shall be shipped in accordance
with the Specific Purchase Orders. NewTech 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 NewTech in production scheduling for
the manufacture of the Products, Kmart shall provide to NewTech,
monthly, a six month rolling forecast of its requirements for
Products. The first forecast shall be provided by Kmart to NewTech
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 NewTech 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
NewTech, 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 NewTech'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
7.1.10 Currency Exchange. Prices charged Kmart and payments made by
Kmart to NewTech for the Products shall be in U.S. dollars.
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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
Prior to execution of this Agreement, NewTech shall tender to
Kmart certificates of insurance evidencing the coverage required
to be maintained by NewTech hereunder. The certificates must
provide that no change or cancellation of insurance shall be made
without thirty (30) days prior written notice to Kmart.
9.1 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.
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"):
10.4 Termination at Option of Kmart.
10.5 Termination at Option of NewTech.
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 NewTech 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 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
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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 NewTech
or with a Third Party Manufacturer, , Kmart agrees that, except
with NewTech, 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 NewTech.
11. CONFIDENTIALITY/PRESS RELEASES
11.1 Confidentiality and Non-Disclosure. NewTech agrees that any
and all information in any form that is provided to NewTech or any
of its representatives as part of this Agreement is provided and
received in confidence, and NewTech, 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"). NewTech 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 NewTech 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 NewTech 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 NewTech 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, NewTech may
disclose certain information to Kmart which NewTech considers
proprietary and confidential. In order to be considered as
proprietary and confidential and, thus, subject to the following
restrictions, NewTech 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 NEWTECH";
and (ii) NewTech 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 NewTech 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:
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(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. NewTech 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 Investor Relations
Department at Kmart as to the contents hereof.
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 NewTech'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.
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 NewTech: New M-Tech Corporation
▇▇▇▇▇ ▇.▇. ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
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with a copy to (other than regularly Greenberg, Traurig, Hoffman, Lipoff,
prepared notices, reports, etc. ▇▇▇▇▇ & Quentel, P.A.
required to be delivered hereunder): ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
If to Kmart: Kmart Corporation
▇▇▇▇ ▇. ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Divisional Vice President
Home Electronics/Home Appliances
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to (other than regularly Kmart Corporation
prepared notices, reports, etc. Legal Department
required to be delivered hereunder): ▇▇▇▇ ▇. ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: General Counsel
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.
NEWTECH 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
NewTech 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.
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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 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 NewTech'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 NewTech 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"). NewTech, 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 NewTech'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 NewTech. 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. NewTech 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
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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 NewTech. NewTech 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 the Kmart Marks. NewTech shall not use, print or
duplicate the Kmart Marks except and only if NewTech has obtained
prior approval as provided herein. NewTech's use of the Kmart
Marks is limited to the Term of this Agreement; upon termination
hereof, NewTech shall immediately cease all use of the Kmart Marks.
NewTech 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 NewTech or WCI to Kmart. Kmart shall not do
or cause to be done anything impairing NewTech'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.
NEW M-TECH CORPORATION KMART CORPORATION
By: By:
------------------------------------- ------------------------------------
(Signature) (Signature)
Name: Name:
----------------------------------- ----------------------------------
Title: Title:
---------------------------------- ---------------------------------
11
13
EXHIBIT A
DESCRIPTION OF PRODUCTS
Audio:
Video:
Telephones
Telephone answering machines
Telephone accessories
14
SCHEDULE 1.2
DISCOUNT DEPARTMENT STORES
15
EXHIBIT E
AUTHORIZED REPRESENTATIVES OF KMART