1
EXHIBIT 10.1
PURCHASE, DISTRIBUTION AND MARKETING AGREEMENT
BY AND BETWEEN
SALTON/MAXIM HOUSEWARES, INC.
AND
KMART CORPORATION
-------------------------
JANUARY 27, 1997
-------------------------
2
2
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.
1.3 "Person" shall include any individual, corporation, partnership,
association, cooperative, joint venture, or any other form of
business entity recognized under the law.
3
3
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) 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 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.
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
4
4
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) Salton'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 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
5
5
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.
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) 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
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
6
6
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. 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
7.1.10 Currency Exchange. Prices charged Kmart and payments
made by Kmart to Salton for the Products shall be in
U.S. dollars.
7
7
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
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.
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 Salton.
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 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
8
8
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.
11. CONFIDENTIALITY/PRESS RELEASES
11.1 Confidentiality and Non-Disclosure. Salton agrees that any 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 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
9
9
(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.
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:
10
10
If to Salton: Salton/Maxim Housewares, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇. ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to (other than Greenberg, Traurig, Hoffman, Lipoff,
regularly prepared notices, reports, etc. ▇▇▇▇▇ & Quentel, P.A.
required to be delivered hereunder): ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
and
▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
If to Kmart: Kmart Corporation
▇▇▇▇ ▇. ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Divisional Vice President
Home Electronics/Home Appliances
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to (other than Kmart Corporation
regularly 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. 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.
11
11
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 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
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 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.
13
13
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:
------------------------------- ---------------------------------
14
14
EXHIBIT A
DESCRIPTION OF PRODUCTS
KITCHEN HOUSEWARES:
PERSONAL CARE:
FANS AND HEATERS:
ELECTRIC AIR CLEANERS AND HUMIDIFIERS:
15
SCHEDULE 1.2
DISCOUNT DEPARTMENT STORES
16
EXHIBIT E
AUTHORIZED REPRESENTATIVES OF KMART