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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES AND EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED) JANUARY 27, 1997
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WINDMERE-DURABLE HOLDINGS, INC.
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(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
FLORIDA
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(STATE OR OTHER JURISDICTION OF INCORPORATION)
1-10177 59-1028301
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(COMMISSION FILE NUMBER) (IRS EMPLOYER IDENTIFICATION NO.)
WINDMERE-DURABLE HOLDINGS, INC.
5980 MIAMI LAKES DRIVE
MIAMI LAKES, FLORIDA 33014
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(ADDRESS OF PRINCIPAL EXECUTIVE OFFICE) (ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE (305) 362-2611
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ITEM 5. ____________________.
On January 27, 1997, two companies which are fifty percent (50%) owned
by Windmere-Durable Holdings, Inc. ("Company") each entered into a
Purchase, Distribution and Marketing Agreement with Kmart Corporation
("Kmart"). The Company owns fifty percent (50%) of the outstanding
common shares of each of Salton/Maxim Housewares, Inc. ("Salton/Maxim")
and New M-Tech Corporation ("NewTech"). The Company entered into a
Guaranty for the performance of each of Salton/Maxim and NewTech in
connection with the Purchase, Distribution and Marketing Agreement
between Salton/Maxim and Kmart and the Purchase, Distribution and
Marketing Agreement between NewTech and Kmart, both dated January 27,
1997. In the Agreements, Salton/Maxim and NewTech granted Kmart certain
rights to purchase, distribute, market and sell certain products in
association with the "White-Westinghouse" trademark which has been
licensed to Salton/Maxim and NewTech.
The foregoing description of the two Purchase, Distribution and Marketing
Agreements and the two Guarantees, and the transactions contemplated by
such documents, does not purport to be complete and is qualified in its
entirety by reference to each of such documents, copies of which are
filed as exhibits hereto. Because the Purchase, Distribution and
Marketing Agreements are subject to an Application for Confidential
Treatment by the Company filed separately with the Commission on the
date hereof, the Company is providing the Purchase, Distribution and
Marketing Agreements with the portions for which confidential treatment
is requested blacked out.
EXHIBITS
10.1 Purchase, Distribution and Marketing Agreement by and
between Salton/Maxim and Kmart Corporation dated January 27,
1997.
10.2 Purchase, Distribution and Marketing Agreement by and
between NewTech and Kmart Corporation dated January 27, 1997.
10.3 Guarantee dated January 27, 1997 from Windmere-Durable
Holdings, Inc. (on behalf of Salton/Maxim).
10.4 Guarantee dated January 27, 1997 from Windmere-Durable
Holdings, Inc. (on behalf of NewTech).
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
WINDMERE-DURABLE HOLDINGS, INC.
Date: February 21, 1997 By: /s/ Harry D. Schulman
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Harry D. Schulman
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EXHIBIT 10.1
PURCHASE, DISTRIBUTION AND MARKETING AGREEMENT
BY AND BETWEEN
SALTON/MAXIM HOUSEWARES, INC.
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 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.
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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 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
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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 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
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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
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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.
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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
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
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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
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(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:
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<TABLE>
<S> <C>
If to Salton: Salton/Maxim Housewares, Inc.
550 Business Center Drive
Mt. Prospect, Illinois 60056
Attn: William B. Rue
Fax: (847) 803-8080
with a copy to (other than Greenberg, Traurig, Hoffman, Lipoff,
regularly prepared notices, reports, etc. Rosen & Quentel, P.A.
required to be delivered hereunder): 1221 Brickell Avenue
Miami, Florida 33131
Attn: Cesar L. Alvarez
Fax: (305) 579-0717
and
Sonnenschein Nath & Rosenthal
8000 Sears Tower
Chicago, Illinois 60606
Attn: Neil Aizenstein
Fax: (312) 876-7934
If to Kmart: Kmart Corporation
3100 W. Big Beaver Road
Troy, Michigan 48084
Attn: Divisional Vice President
Home Electronics/Home Appliances
Fax: (810) 643-1054
with a copy to (other than Kmart Corporation
regularly prepared notices, reports, etc. Legal Department
required to be delivered hereunder): 3100 W. Big Beaver Road
Troy, Michigan 48084
Attn: General Counsel
</TABLE>
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.
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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.
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<PAGE> 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.
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<PAGE> 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:
------------------------------- ---------------------------------
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<PAGE> 14
EXHIBIT A
DESCRIPTION OF PRODUCTS
KITCHEN HOUSEWARES:
PERSONAL CARE:
FANS AND HEATERS:
ELECTRIC AIR CLEANERS AND HUMIDIFIERS:
<PAGE> 15
SCHEDULE 1.2
DISCOUNT DEPARTMENT STORES
<PAGE> 16
EXHIBIT E
AUTHORIZED REPRESENTATIVES OF KMART
<PAGE> 1
EXHIBIT 10.2
PURCHASE, DISTRIBUTION AND MARKETING AGREEMENT
BY AND BETWEEN
NEW M-TECH CORPORATION
AND
KMART CORPORATION
--------------------------
JANUARY 27, 1997
--------------------------
<PAGE> 2
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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<PAGE> 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 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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<PAGE> 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 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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<PAGE> 5
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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<PAGE> 6
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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<PAGE> 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
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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<PAGE> 8
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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<PAGE> 9
(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:
<TABLE>
<S> <C>
If to NewTech: New M-Tech Corporation
16550 N.W. 10th Avenue
Miami, Florida 33169
Attn: Joel Newman
Fax: (305) 624-8901
</TABLE>
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<PAGE> 10
<TABLE>
<S> <C>
with a copy to (other than regularly Greenberg, Traurig, Hoffman, Lipoff,
prepared notices, reports, etc. Rosen & Quentel, P.A.
required to be delivered hereunder): 1221 Brickell Avenue
Miami, Florida 33131
Attn: Cesar L. Alvarez
Fax: (305) 579-0717
If to Kmart: Kmart Corporation
3100 W. Big Beaver Road
Troy, Michigan 48084
Attn: Divisional Vice President
Home Electronics/Home Appliances
Fax: (810) 643-1054
with a copy to (other than regularly Kmart Corporation
prepared notices, reports, etc. Legal Department
required to be delivered hereunder): 3100 W. Big Beaver Road
Troy, Michigan 48084
Attn: General Counsel
</TABLE>
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
10
<PAGE> 12
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
<PAGE> 13
EXHIBIT A
DESCRIPTION OF PRODUCTS
Audio:
Video:
Telephones
Telephone answering machines
Telephone accessories
<PAGE> 14
SCHEDULE 1.2
DISCOUNT DEPARTMENT STORES
<PAGE> 15
EXHIBIT E
AUTHORIZED REPRESENTATIVES OF KMART
<PAGE> 1
EXHIBIT 10.3
GUARANTY
THIS GUARANTY (the "Guaranty") is made and entered into on this 27th day
of January, 1997, by Windmere-Durable Holdings, Inc., a Florida corporation
(together with its successors and assigns, the "Guarantor") and Kmart
Corporation, a Michigan corporation ("Kmart").
Concurrently with the execution and delivery of this Guaranty,
Salton/Maxim Housewares, Inc., a Delaware corporation which is 50%-owned by the
Guarantor (the "Company"), and Kmart have entered into a Purchase, Distribution
and Marketing Agreement (the "Agreement").
In order to induce Kmart to enter into the Agreement and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, and intending to be legally bound, the Guarantor hereby agrees as
follows:
1. Guaranty.
(a) The Guarantor hereby unconditionally and irrevocably
guarantees, as primary obligor and not merely as surety, to Kmart, its
successors and assigns the full, complete and punctual observance, fulfillment
and performance by the Company of all the obligations of the Company under the
Agreement (the "Guaranteed Obligations").
(b) If at any time the Company fails to perform any of the
Guaranteed Obligations when required or due under and in accordance with the
terms of the Agreement, the Guarantor shall forthwith perform on the day any
Guaranteed Obligations are (or would have become) required to be performed,
upon written notice or demand by Kmart that such Guaranteed Obligations have
not been performed in accordance with the terms of the Agreement.
(c) Without limiting the foregoing, the obligations, covenants,
agreements and duties of the Guarantor under this Guaranty shall be absolute and
unconditional, and shall remain in full force and effect, and shall not be
released, discharged, limited, impaired, reduced or terminated in any way by
any circumstance or condition whatsoever.
(d) This Guaranty is a continuing guaranty with respect to
performance. The Guarantor agrees that in the discharge of its obligations
hereunder, no judgment, order or exhaustion need be obtained, and no action,
suit or proceeding need be brought, and no other remedies need be exhausted
against the Company or any other person prior to the demand by Kmart for
performance hereunder.
2. Representations and Warranties. The Guarantor represents and
warrants that:
2.1 Legal Capacity: Approvals and Consents.
(a) The Guarantor has the full legal right and power and all
authority and approvals necessary to execute, deliver and perform this
Guaranty. The Guarantor has duly taken all actions necessary to authorize the
execution, delivery and performance of this Guaranty. This Guaranty has been
duly executed and delivered by the Guarantor and is the valid and binding
obligation of the Guarantor enforceable in accordance with its terms, except
insofar as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors' rights
generally, or by principles governing the availability of equitable remedies.
<PAGE> 2
(b) The execution, delivery and performance of this Guaranty and
the consummation of the transactions contemplated hereby does not and will not
(with the passage of time or the giving of notice or both): (x) conflict with
or result in a breach or violation by the Guarantor of, or (y) violate or
result in the breach of any of the terms of, result in a material modification
of or otherwise give any other contracting party the right to terminate or
constitute a default under, or (z) result in the acceleration of any
performance or any increase in any payment or benefits required by, any law,
judgment, contract, arrangement or understanding by which the Guarantor or the
Company or any of their respective assets, shares or business is subject or
bound or may be affected. No consents or approvals of any person are required
in connection with the execution, delivery and performance of this Guaranty.
(c) There are no persons (including, without limitation,
governmental authorities, courts and creditors of the Guarantor, and parties
to any other instrument or agreement to which the Guarantor is a party or by
which the Guarantor, the Company, or any of their respective assets are bound)
whose approval or consent, or with whom the filing of any certificate, notice,
application, report or other document, is legally or contractually required or
otherwise is necessary (i) in connection with the execution, delivery or
performance of this Guaranty by the Guarantor, (ii) in order to preclude any
termination, suspension, modification or impairment of any contract or any
legal or contractual right, privilege, permit or franchise in which the
Guarantor or the Company has a right and interest or (iii) in connection with
the execution of the Agreement.
3. Covenants and Agreements. The Guarantors covenant and agree as
follows:
3.1 Dispute Resolution. All disputes arising out of, or in relation to,
this Guaranty (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 not involved in the dispute. If no
agreement can be reached through this process within thirty days of request by
one party to the other to nominate a senior executive for dispute resolution,
then either party hereto shall be entitled to pursue any and all available
legal remedies.
3.2 Assignment. This Guaranty may not be assigned nor may the
performance of any duties hereunder be delegated by either party hereto without
the prior written consent of the other party; provided that any such assignment
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 Guaranty, which shall continue to be
binding upon such party notwithstanding such assignment.
3.3 Notices. Any notice required or permitted to be given under this
Guaranty 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
delivery 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:
<TABLE>
<S> <C>
If to Guarantor: Windmere-Durable Holdings, Inc.
5980 Miami Lakes Drive
Miami Lakes, Florida 33014
Attn: Harry Schulman
Fax: (305) 364-0502
</TABLE>
2
<PAGE> 3
<TABLE>
<S> <C>
with a copy to: Greenberg, Traurig, Hoffman, Lipoff,
Rosen & Quentel, P.A.
1221 Brickell Avenue
Miami, Florida 33131
Attn: Cesar L. Alvarez
Fax: (305) 579-0717
If to Kmart: Kmart Corporation
3100 W. Big Beaver Road
Troy, Michigan 48084
Attn: Divisional Vice President
Home Electronics/Home Appliances
with a copy to: Kmart Corporation
Legal Department
3100 W. Big Beaver Road
Troy Michigan 48084
Attn: General Counsel
</TABLE>
Any such notice shall be effective (i) if sent by mail, as aforesaid,
three 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.
3.4 Governing Law and Consent to Jurisdiction. THIS GUARANTY 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. THE GUARANTOR 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.
3.5 Binding Agreement. This Guaranty shall be binding upon the parties
hereto, and their respective successors and permitted assigns, whether by
operation of law or otherwise.
3.6 Entire Agreement. This Guaranty 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 Guaranty.
3.7 Headings. The headings to the various paragraphs of this Guaranty
have been inserted for convenience only and shall not affect the meaning of the
language contained in this Guaranty.
3.8 Waiver. The waiver by any party of any breach by another party of
any term or condition of this Guaranty shall not constitute a waiver of any
subsequent breach or nullify the effectiveness of that term or condition.
3
<PAGE> 4
3.9 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 Guaranty 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.
3.10 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) shall be 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) shall 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.
3.11 No Third Party Beneficiaries. Nothing in this Guaranty, express or
implied, is intended to confer on any person, other than the Guarantor and
Kmart, any rights or remedies under or by reason of this Guaranty.
IN WITNESS WHEREOF, the Guarantor has caused this Guaranty to be executed
on the date first above written.
WINDMERE-DURABLE HOLDINGS, INC.
By:
------------------------------------
Name:
Title:
ACCEPTED:
KMART CORPORATION
By:
-----------------------------------
Name:
Title:
4
<PAGE> 1
EXHIBIT 10.4
GUARANTY
THIS GUARANTY (the "Guaranty") is made and entered into on this 27th day
of January, 1997, by Windmere-Durable Holdings, Inc., a Florida corporation
(together with its successors and assigns, the "Guarantor") and Kmart
Corporation, a Michigan corporation ("Kmart").
Concurrently with the execution and delivery of this Guaranty, New M-Tech,
Inc., a Florida corporation which is 50%-owned by the Guarantor (the
"Company"), and Kmart have entered into a Purchase, Distribution and Marketing
Agreement (the "Agreement").
In order to induce Kmart to enter into the Agreement and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, and intending to be legally bound, the Guarantor hereby agrees as
follows:
1. Guaranty.
(a) The Guarantor hereby unconditionally and irrevocably
guarantees, as primary obligor and not merely as surety, to Kmart, its
successors and assigns the full, complete and punctual observance, fulfillment
and performance by the Company of all the obligations of the Company under the
Agreement (the "Guaranteed Obligations").
(b) If at any time the Company fails to perform any of the
Guaranteed Obligations when required or due under and in accordance with the
terms of the Agreement, the Guarantor shall forthwith perform on the day any
Guaranteed Obligations are (or would have become) required to be performed,
upon written notice or demand by Kmart that such Guaranteed Obligations have
not been performed in accordance with the terms of the Agreement.
(c) Without limiting the foregoing, the obligations, covenants,
agreements and duties of the Guarantor under this Guaranty shall be absolute and
unconditional, and shall remain in full force and effect, and shall not be
released, discharged, limited, impaired, reduced or terminated in any way by
any circumstance or condition whatsoever.
(d) This Guaranty is a continuing guaranty with respect to
performance. The Guarantor agrees that in the discharge of its obligations
hereunder, no judgment, order or exhaustion need be obtained, and no action,
suit or proceeding need be brought, and no other remedies need be exhausted
against the Company or any other person prior to the demand by Kmart for
performance hereunder.
2. Representations and Warranties. The Guarantor represents and
warrants that:
2.1 Legal Capacity: Approvals and Consents.
(a) The Guarantor has the full legal right and power and all
authority and approvals necessary to execute, deliver and perform this
Guaranty. The Guarantor has duly taken all actions necessary to authorize the
execution, delivery and performance of this Guaranty. This Guaranty has been
duly executed and delivered by the Guarantor and is the valid and binding
obligation of the Guarantor enforceable in accordance with its terms, except
insofar as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors' rights
<PAGE> 2
generally, or by principles governing the availability of equitable remedies.
(b) The execution, delivery and performance of this Guaranty and
the consummation of the transactions contemplated hereby does not and will not
(with the passage of time or the giving of notice or both): (x) conflict with
or result in a breach or violation by the Guarantor of, or (y) violate or
result in the breach of any of the terms of, result in a material modification
of or otherwise give any other contracting party the right to terminate or
constitute a default under, or (z) result in the acceleration of any
performance or any increase in any payment or benefits required by, any law,
judgment, contract, arrangement or understanding by which the Guarantor or the
Company or any of their respective assets, shares or business is subject or
bound or may be affected. No consents or approvals of any person are required
in connection with the execution, delivery and performance of this Guaranty.
(c) There are no persons (including, without limitation,
governmental authorities, courts and creditors of the Guarantor, and parties to
any other instrument or agreement to which the Guarantor is a party or by which
the Guarantor, the Company, or any of their respective assets are bound) whose
approval or consent, or with whom the filing of any certificate, notice,
application, report or other document, is legally or contractually required or
otherwise is necessary (i) in connection with the execution, delivery or
performance of this Guaranty by the Guarantor, (ii) in order to preclude any
termination, suspension, modification or impairment of any contract or any
legal or contractual right, privilege, permit or franchise in which the
Guarantor or the Company has a right and interest or (iii) in connection with
the execution of the Agreement.
3. Covenants and Agreements. The Guarantors covenant and agree as
follows:
3.1 Dispute Resolution. All disputes arising out of, or in relation to,
this Guaranty (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 not involved in the dispute. If no
agreement can be reached through this process within thirty days of request by
one party to the other to nominate a senior executive for dispute resolution,
then either party hereto shall be entitled to pursue any and all available
legal remedies.
3.2 Assignment. This Guaranty may not be assigned nor may the
performance of any duties hereunder be delegated by either party hereto without
the prior written consent of the other party; provided that any such
assignment 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 Guaranty, which shall continue to
be binding upon such party notwithstanding such assignment.
3.3 Notices. Any notice required or permitted to be given under this
Guaranty 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
delivery 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:
<TABLE>
<S> <C>
If to Guarantor: Windmere-Durable Holdings, Inc.
5980 Miami Lakes Drive
Miami Lakes, Florida 33014
Attn: Harry Schulman
Fax: (305) 364-0502
</TABLE>
2
<PAGE> 3
<TABLE>
<S> <C>
with a copy to: Greenberg, Traurig, Hoffman, Lipoff,
Rosen & Quentel, P.A.
1221 Brickell Avenue
Miami, Florida 33131
Attn: Cesar L. Alvarez
Fax: (305) 579-0717
If to Kmart: Kmart Corporation
3100 W. Big Beaver Road
Troy, Michigan 48084
Attn: Divisional Vice President
Home Electronics/Home Appliances
with a copy to: Kmart Corporation
Legal Department
3100 W. Big Beaver Road
Troy Michigan 48084
Attn: General Counsel
</TABLE>
Any such notice shall be effective (i) if sent by mail, as aforesaid,
three 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.
3.4 Governing Law and Consent to Jurisdiction. THIS GUARANTY 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. THE GUARANTOR 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.
3.5 Binding Agreement. This Guaranty shall be binding upon the parties
hereto, and their respective successors and permitted assigns, whether by
operation of law or otherwise.
3.6 Entire Agreement. This Guaranty 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 Guaranty.
3.7 Headings. The headings to the various paragraphs of this Guaranty
have been inserted for convenience only and shall not affect the meaning of the
language contained in this Guaranty.
3.8 Waiver. The waiver by any party of any breach by another party of
any term or condition of this Guaranty shall not constitute a waiver of any
subsequent breach or nullify the effectiveness of that term or condition.
3
<PAGE> 4
3.9 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 Guaranty 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.
3.10 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) shall be 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) shall 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.
3.11 No Third Party Beneficiaries. Nothing in this Guaranty, express or
implied, is intended to confer on any person, other than the Guarantor and
Kmart, any rights or remedies under or by reason of this Guaranty.
IN WITNESS WHEREOF, the Guarantor has caused this Guaranty to be executed
on the date first above written.
WINDMERE-DURABLE HOLDINGS, INC.
By:
-----------------------------------
Name:
Title:
ACCEPTED:
KMART CORPORATION
By:
----------------------------------
Name:
Title:
4
