AGREEMENT MADE AS OF JULY 1, 1999
BETWEEN
GEORGE FOREMAN, AN INDIVIDUAL ('FOREMAN'),
AND
SALTON INC., A DELAWARE CORPORATION ('SALTON')
WHEREAS: Foreman desires to sell to Salton and Salton agrees to purchase from
Foreman certain trademarks and other property which have been used by Foreman in
the sale and promotion of products for the last three years.
THEREFORE, Foreman and Salton agree as set forth below.
1. Property to be Sold. Foreman agrees to sell to Salton all right, title
and interest in:
(a) the unregistered common law trademarks attached hereto and the
good will associated therewith to use in perpetuity and worldwide
which include, but are not limited to the name 'George Foreman'
(including shortened versions of the name, such as 'George'),
pictures, likenesses, caricatures and the signatures of George Foreman
which have been used in connection with the marketing of products by
Salton. (the properties listed on Schedule 1(a) is referred to as
'Foreman Permanent Property No. I'); and
(b) the right to use in perpetuity and worldwide the name 'George
Foreman' (including shortened versions of the name such as 'George'),
pictures, likenesses, and the signatures of Foreman solely in
connection with the marketing and sale of food preparation apparatus
and appliances for domestic use, namely the cooking and serving of
food and non-alcoholic drinks for household use (the Foreman Food
Products Line'). The property referred to in this subsection 1(b) is
called the ('Foreman Permanent Property No. II').
The sale includes all rights related to Foreman Permanent Property Nos. I and II
and the right to sue for past infringements thereof.
2. Purchase Price. The total purchase price ('Purchase Price') to be paid
to Foreman for the assets sold under this Agreement is one hundred ten
million dollars ($110,000,000) of which one hundred million dollars
($100,000,000) shall be payable in cash and ten million dollars shall
be payable in shares of Common Stock of Salton (the 'Salton Shares')
valued as set forth in Section 7 and shall be allocated among the
assets being sold as follows:
(a) for Foreman Permanent Property No. I-ninety five million dollars
($95,000,000);
(b) for Foreman Permanent Property No. II-fifteen million dollars
($15,000,000) allocated among the classes of property included
within Foreman Permanent Property No. II as follows:
(i) two million five hundred thousand dollars ($2,500,000) to
Class 7 under the United States Trademark Patent Office
Registration System ('System');
(ii) ten million dollars ($10,000,000) to Class 11 under the
System; and
(iii) two million five hundred thousand dollars ($2,500,000) to
Class 21 under the System.
3. Terms of Payment. The Purchase Price owing to Foreman shall be paid as
follows:
(a) On the Closing (defined in Section 9 below), thirty million
dollars ($30,000,000) of which twenty million dollars
($20,000,000) shall be paid in cash and ten million ($10,000,000)
shall be paid in shares of the Common Stock of Salton (the
'Salton Shares'). The cash portion of the Purchase Price paid at
the Closing shall be delivered by Federal Funds wired to a bank
account designated by Foreman on the date of the Closing. The
portion of the Purchase Price to be paid in Salton Shares shall
be delivered in one or more stock certificates of Salton
evidencing the Salton Shares registered in the name of Foreman.
The Salton Shares delivered at the Closing shall have been
registered for sale with the United States Securities and
Exchange Commission ('SEC') so that, after the completion of the
Closing, the Salton Shares may be sold in public transactions
without restriction pursuant to such registration for a period of
not less than one hundred eighty (180) days as set forth in
Section 8 below.
(b) The balance of the Purchase Price, eighty million dollars
($80,000,000) shall be paid in cash in equal installments of
twenty million dollars ($20,000,000) each, without interest, on
the first, second, third and fourth anniversary of the Closing
date, unless the date of the anniversary is not a business day
when banks in both New York City and Houston, Texas are generally
open for business ('Business Day') in which case the payment
shall be made on the next date which is Business Day. If any
installment of the Purchase Price owing after the Closing is not
paid when due, Salton shall pay Foreman interest on the unpaid
portion of such installment at a fluctuating annual rate that is
always equal to the sum of: (i) the Prime Rate as announced from
time to time in the Wall Street Journal (Midwest Edition), such
rate to change when and as of the date such change is announced,
plus (ii) two percent (2%).
(c) The balance of the Purchase Price owing after the Closing Date,
including interest owing on any unpaid portion of an installment
due after the Closing, shall be subordinate to the payment in
full of the amounts owing under the Amended and Restated Credit
Agreement ('Credit Agreement') between Salton, as borrower, and
Lehmann Brothers Commercial Paper, Inc., as administrative agent
('Lehmann') for the several lenders who, from time to time, are
parties to the Credit Agreement. The subordination shall be set
forth in a subordination agreement among Salton, Lehmann, as
administrative agent for the several lenders under the Credit
Agreement, and Foreman, to be entered into on or before the
Closing Date in substantially the form of and containing
substantially the terms and conditions of the Subordination
Agreement attached hereto as Schedule 3(c).
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4. Trademark, Copyright Application Assistance. At the Closing, Foreman
shall enter into a ten year contract providing for assistance from
Foreman in executing assignments, applications and other documents
which Salton reasonably requires in order to obtain further trademarks
and copyrights for the products included in the Foreman Food Products
Line in the form of and containing the terms and conditions set forth
in Schedule 4 attached hereto (the 'Applications Assistance
Contract').
5. Representations and Warranties of Foreman. Foreman represents,
warrants and agrees with Salton that, as of the date hereof and up to
and including the date of closing that each of the following
representations is true and correct:
(i) Foreman shall be the sole owner of the property sold under
this Agreement as Foreman Permanent Property Nos. I and
II. Foreman owns no other trademarks related to small
kitchen electric products intended for making or serving
food or non-alcoholic beverages.
(ii) There are no contracts currently in effect which limit or
restrict the right of Foreman in any manner to use or
transfer any of the Foreman Permanent Property Nos. I and
II or to register any unregistered common law marks listed
on Schedule 1(a) and neither George Foreman Productions,
Inc., a Nevada corporation, owned and controlled by
Foreman ('Productions') or Foreman is a defendant to any
Action relating to, or otherwise has been notified of, any
claim that any use by, on behalf of or through Foreman, of
any of the property included in Foreman Permanent Property
Nos. I and II infringes or violates the proprietary,
contractual or other rights of any Person and, to
Foreman's knowledge, no basis for any such claim exists.
To Foreman's knowledge, there is no infringement by any
Person of Foreman Permanent Property Nos. I and II.
(iii) Foreman has the right to assign and sell the properties
sold under this Agreement.
(iv) Except for Salton, Foreman has not licensed or in any
other way authorized any person to use in any manner any
of Foreman Permanent Property Nos. I and II.
(v) To Foreman's knowledge, all trademarks listed on Schedule
1(a) in the United States are valid and subsisting, there
is no pending or, to Foreman's knowledge, threatened
proceedings or litigation with respect thereto, and
Schedule 1(a) is complete and correct. All of the items
included in Foreman Permanent Property No. I are in use
and have not been abandoned.
(vi) All of the items which may constitute copyrighted works
used to market products under Foreman Permanent Property
No. I are original and will be properly and effectively
assigned to Salton at Closing. Foreman agrees to take
reasonable and prudent steps to protect Salton's rights in
and to such copyrights. Except for Salton, to Foreman's
knowledge, no Person has any right to such copyrights.
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(vii) Foreman has no commitment or legal obligation, absolute or
contingent, to any Person other than Salton to sell,
assign, license, transfer or effect a sale of any of
Foreman Permanent Property Nos. 1 or 2 or to enter into
any Contract or cause the entering into of a Contract with
respect to the foregoing.
(viii) Productions is a duly organized and existing corporation
in good standing under the laws of Nevada.
(ix) As of the date of Closing, Foreman shall own all right,
title and interest in and to Foreman Property No. I and
Foreman Property No. II free and clear of all security
interests, liens and encumbrances.
6. Representations and Warranties of Salton. Salton represents and
warrants and agrees with Foreman that, as of the date hereof and up to
and including the date of Closing that each of the following
representations is true and correct:
(i) Salton is a duly organized and existing corporation under
the laws of the State of Delaware.
(ii) Salton has the corporate power under its articles of
incorporation and by laws to enter into and perform this
Agreement.
(iii) The Board of Directors of Salton has, by unanimous written
consent in lieu of a special meeting, authorized Salton to
enter into and perform this Agreement.
(iv) There are no contracts currently in effect which limit or
restrict the right of Salton to enter into or perform this
Agreement except only that Salton may determine that it
requires consent from its lenders under the Second Amended
and Restated Credit Agreement by and among Salton and
Lehmann Brothers Commercial Paper, Inc., as Administrative
Agent for the several lenders who are parties from time to
time to such agreement ('Credit Agreement') to enter into
and close the transactions contemplated by this Agreement.
(v) There are no existing uncured events of default on the
part of Salton under its Credit Agreement.
(vi) Salton has authorized but unissued shares of Common Stock
and shares of Common Stock held as Treasury shares and has
reserved, and shall continue to keep reserved for issuance
in connection with the Closing of this Agreement a
sufficient number of Shares to satisfy its obligation to
deliver the number of Shares necessary to close this
Agreement.
7. Calculation of Number of Shares to be Delivered to Foreman at Closing.
In order to determine the number of shares of common stock of Salton
to be delivered to Foreman on the Closing, ten million dollars shall
be divided by the Average Salton Price as defined in this Section 7.
Average Salton Price shall be the average of the closing prices of
Salton common stock on the New York Stock Exchange ('NYSE') as
reported
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on the NYSE Composite Transaction Tape for the twenty (20) trading
days ending on the third trading day preceding the Closing Date.
8. Registration of Salton Shares. Immediately following the execution of
this Agreement, Salton shall:
(i) prepare and file with the SEC as soon as is reasonably
practicable a registration statement on Form 3 under the
1933 Securities Act, as amended ('Securities Act') with
respect to the Salton Shares to be delivered to Foreman at
the Closing and shall use its best reasonable efforts to
have the Registration Statement declared effective by the
SEC under the Securities Act effective upon the Closing,
subject to the conditions set forth below in this Section
8;
(ii) use its reasonable efforts to register or qualify such
Salton Shares under such other securities or blue sky laws
of such jurisdictions as Foreman reasonably requests and
do any and all other acts and things which may be
reasonably necessary or advisable to enable Foreman to
consummate the disposition in such jurisdictions of the
Salton Shares owned by Foreman (provided that Salton will
not be required to (x) qualify generally to do business in
any jurisdiction where it would not otherwise be required
to qualify but for this section, (y) subject itself to
taxation in any such jurisdiction or (z) consent to
general service of process in any such jurisdiction); and
(iii) prepare and file with the NYSE a listing application
covering the Salton Shares to be issued at the Closing and
use its reasonable best efforts to obtain prior to the
Closing, approval for the listing of the Salton Shares
subject only to official notice of issuance.
Notwithstanding the foregoing, Salton shall have the right to delay
the effectiveness of the registration and of the listing of the Salton
Shares for a period of up to one hundred twenty (120) days, if there
are, in Salton's judgment, possible developments, events or actions
which may occur concerning Salton or its business which would be
required to be disclosed in a registration statement filed with the
SEC, which are not in the best interest of Salton to disclose and need
not be disclosed under the Securities Act unless and until such
developments, events or actions occur.
9. Conditions to Closing.
(a) Foreman Conditions. At or before the Closing, Foreman shall have
received the following:
(i) a copy of the Articles of Incorporation, as amended, of
Salton certified by the Delaware Secretary of State;
(ii) a copy of the By-Laws of Salton and a copy of the
Unanimous Consent of Directors of the Board of Directors
of Salton authorizing the execution, delivery and
performance of this Agreement, both certified by the
Secretary of Salton;
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(iii) a good standing certificate of Salton certified by the
Secretary of State of Delaware;
(iv) a copy of a Registration Statement, as then amended and
made effective by the SEC on or prior to the closing
registering for sale the Shares of Salton to be delivered
to Foreman at the Closing;
(v) a so called bring down certificate executed by an officer
of Salton certifying that the representations and
warranties of Salton set forth in Section 6 above are true
and correct as of the Closing;
(vi) Foreman shall have received the cash portion of the
purchase price to be delivered at the Closing;
(vii) Foreman shall have received a first priority lien security
agreement executed by Salton substantially in the form and
containing the terms and conditions of the Trademark
Security Agreement allocated hereto as Schedule 9(vii)
granting to Foreman a purchase money security interest
under the Uniform Commercial Code, as adopted in Illinois,
in the Foreman Permanent Property Nos. I and II to be sold
hereunder to Salton which security agreement can also be
registered as a first priority security filing with the
U.S. Trademark registration office, executed UCC 1 filing
forms to be filed with the Secretary of State of Illinois
and any other filing office as Foreman deems reasonably
necessary in order to perfect his purchase money security
interest in the Foreman Permanent Properties to be sold
hereunder and such other documents as Foreman may
reasonably request in order to grant Foreman a first
priority purchase money lien on the Foreman Permanent
Properties in order to secure the unpaid portion of the
Purchase Price owing to Foreman;
(viii) Foreman shall have received certificates for Salton Shares
issued in the name of Foreman without any restrictive
legend duly listed on the NYSE;
(ix) a copy of the Applications Assistance Contract attached
hereto as Schedule 4 executed and delivered by Salton; and
(x) a copy of the Subordination Agreement referred to in
Section 3(c) above executed and delivered by Salton and
Lehmann Brothers, Inc., as administrative agent for the
several lenders under the Credit Agreement.
(b) Salton Conditions. At or before the Closing, Salton shall have
received the following:
(i) evidence of Uniform Commercial Code searches, searches of
the Offices of the United States Trademark Patent Office
Registration System and other certificates reasonably
requested by Salton in order to confirm that the Foreman
Permanent Properties being sold hereunder by Foreman are
free and clear of all security interests, liens and
encumbrances;
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(ii) a copy of a Registration Statement, as then amended and
made effective by the SEC on or prior to the Closing
registering for sale by Foreman the Shares of Salton to be
delivered to Salton at the closing;
(iii) a bill of sale and assignment of Foreman Permanent
Property Nos. I and II;
(iv) a copy of the Applications Assistance Contract attached
hereto as Schedule 4 executed and delivered by Foreman;
(v) a copy of the Subordination Agreement referred to in
Section 3(c) above executed and delivered by Foreman and
Lehmann Brothers Commercial Paper, Inc., as administrative
agent for the several lenders under the Credit Agreement;
(vi) such other approvals from Lehmann Brothers Commercial
Paper, Inc. as agent for the several lenders under the
Credit Agreement as Salton requires, in its reasonable
discretion, in order to close this Agreement;
(vii) a quitclaim and release from George Foreman Productions
Inc., a Nevada corporation, of any interest such company
may have or claim with respect to Foreman Permanent
Properties Nos. I and II; and
(viii) such other documents and assignments as Salton may require
reasonably in order to effect the assignment and transfer
to Salton of the assets sold hereunder.
10. Closing. The closing shall occur on or before February 15, 2000 on not
less than five business days notice from Salton at the offices of
Salton located in Mount Prospect, Illinois or such other office as
Foreman and Salton mutually agree to at 10 A.M., CST ('Closing Date').
As soon as the Salton Shares to be delivered to Foreman are duly
registered for sale as required by this Agreement, Salton and Foreman
each agree to make reasonable business efforts to effect the Closing
as soon thereafter as possible. At the Closing, Foreman and Salton
shall each make the deliveries required of them as set forth above;
provided that, if Salton determines that it is necessary for Salton to
delay the filing or effectiveness of the registration of the Salton
Shares to be delivered to Foreman as set forth in Section 8 above,
Salton shall have right to either: (i) delay the Closing for a period
or periods of time up to an aggregate of one hundred twenty (120) days
or (ii) to pay in cash at the Closing the ten million dollars
($10,000,000) otherwise payable in Salton Shares and to deliver the
Salton Shares registered for sale as set forth in this Agreement as
one half of the amount owing to Foreman on the first anniversary of
the Closing Date, except that the number of Salton Shares to be
delivered to Foreman on the first anniversary of the Closing Date
shall be determined by using as the 'Average Salton Price' the average
of the closing prices of Salton common stock on the New York Stock
Exchange ('NYSE') as reported on the NYSE Composite Transaction Tape
for the twenty trading days ending on the third trading day preceding
the first anniversary of the Closing Date.
11. Indemnification and Survival of Representations, Warranties, Covenants
and Indemnity Obligation.
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11.1. Survival of Representations, Etc. All representations and
warranties of Foreman and Salton contained herein shall survive
the Closing Date and shall terminate at the close of
twenty-four (24) full calendar months next following the
Closing Date. Upon the termination of a representation or
warranty in accordance with the foregoing, the representation
or warranty shall have no further force or effect for any
purpose under this Agreement, including Section 11.2 hereof,
provided that, any representation or warranty in respect of
which indemnity may be sought under Section 11.2, and the
indemnity with respect thereto, shall survive the time at which
it would otherwise terminate pursuant to this Section 11.1 if
written notice of the inaccuracy or breach thereof giving rise
to such right of indemnity shall have been given to the party
against whom such indemnity may be sought prior to such time.
11.2. Indemnification.
(a) By Foreman. Foreman shall indemnify Salton and its officers and
directors, , and hold each of them harmless from and against
any and all claims, demands, actions, suits, judgments,
liability and loss, including legal fees and expenses and court
costs (collectively, 'Loss') incurred by any of them in
connection with, arising out of, or resulting from (i) any
breach of any representation or warranty made by Foreman in
this Agreement; or (ii) any failure by Foreman to perform in a
timely manner any agreement, covenant or obligation of Foreman
pursuant to this Agreement.
(b) By Salton. Salton shall indemnify Foreman and hold him harmless
from and against any and all Loss incurred by him in connection
with, arising out of or resulting from (i) any breach or
inaccuracy of any representation or warranty made by Salton in
this Agreement or (ii) any failure by Salton to perform in a
timely manner any agreement, covenant or obligation of Salton
pursuant to this Agreement.
(c) Defense of Claims. If a claim for Loss (a 'Claim') is to be
made by a party entitled to indemnification hereunder (the
'Indemnified Party') against the party from whom
indemnification is claimed (the 'Indemnifying Party'), the
Indemnified Party shall give written notice (a 'Claim Notice')
to the Indemnifying Party as soon as practicable after the
Indemnified Party becomes aware of any fact, condition or event
which may give rise to Loss for which indemnification may be
sought under this Section 11.2. If any lawsuit or enforcement
action is filed against any party entitled to the benefit of
indemnity hereunder, written notice thereof shall be given to
the Indemnifying Party as promptly as practicable (and in any
event within ten (10) business days after the service of the
citation or summons). The failure of any Indemnified Party to
give timely notice hereunder shall not affect rights to
indemnification hereunder, except to the extent that the
Indemnifying Party demonstrates actual Loss caused by such
failure. Notwithstanding the foregoing, a Claim Notice must be
made within the survival period set forth in Section 11. 1,
whether or not the Indemnifying Party is prejudiced by any
failure to give the Claim Notice. The Claim Notice shall
describe in reasonable detail the nature of the Claim,
including an estimate of the amount of Loss that have been or
may be suffered
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or incurred by the Indemnified Party attributable to such
Claim, the basis of the Indemnified Party's request for
indemnification under the Agreement and all information in the
Indemnified Party's possession relating to such Claim. After
receipt of such Claim Notice, the Indemnifying Party shall be
entitled, if it so elects, at its own cost, risk and expense,
(i) to take control of the defense and investigation of such
lawsuit or action and (ii) to employ and engage attorneys of
its own choice to handle and defend the same, provided however
that the attorneys shall be reasonably acceptable to the
Indemnified Party. If the Indemnifying Party fails to assume in
writing the defense of such Claim within ten (10) business days
after receipt of the Claim Notice, the Indemnified Party
against which such Claim has been asserted will (upon
delivering notice to such effect to the Indemnifying Party)
have the right to undertake, at the Indemnifying Party's cost
and expense, the defense, compromise or settlement of such
Claim on behalf of and for the account and risk of the
Indemnifying Party; provided, however, that such Claim shall
not be compromised or settled without the written consent of
the Indemnifying Party, which consent shall not be unreasonably
withheld or delayed. In the event that the Indemnified Party
assumes the defense of the Claim, the Indemnified Party will
keep the Indemnifying Party reasonably informed of the progress
of any such defense, compromise or settlement. Notwithstanding
the foregoing, the Indemnified Party shall be entitled to
conduct its own defense at the cost and expense of the
Indemnifying Party if the Indemnified Party establishes that
the conduct of its defense by the Indemnifying Party would
reasonably be likely to prejudice materially the Indemnified
Party due to a conflict of interest between the Indemnified
Party and the Indemnifying Party; and provided further that in
any event the Indemnified Party may participate in such defense
at its own expense.
(d) Settlement. In the event that the Indemnified Party settles any
Claim without the prior written consent of the Indemnifying
Party, the Indemnifying Party shall have no further
indemnification obligations under this Section 11.2 with
respect to such Claim; provided, however, that if the
Indemnifying Party refuses to defend or otherwise handle such
Claim and it is subsequently determined that the Indemnifying
Party is or was obligated to defend or indemnify the
Indemnified Party with respect to such Claim, then the
Indemnified Party shall remain obligated with respect to such
settlement amount. If the Indemnifying Party shall control the
defense of any such Claim, the Indemnifying Party shall obtain
the prior written consent of the Indemnified Party (which shall
not be unreasonably withheld) before entering into any
settlement of a Claim or ceasing to defend such Claim if,
pursuant to or as a result of such settlement or cessation,
injunctive or other equitable relief shall be imposed against
the Indemnified Party or if such settlement or cessation does
not expressly and unconditionally release the Indemnified Party
from all liabilities and obligations with respect to such
Claim, without prejudice. In the event that the Indemnifying
Party proposes a settlement to any Claim with respect to which
the Indemnifying Party is or was entitled to defend, which
settlement is satisfactory to the party instituting such Claim,
and the Indemnified Party withholds its consent to such
settlement, and thereafter a final judgment is entered against
the Indemnifying Party or Indemnified Party pursuant to which
Loss exceeds the amount of the proposed settlement, then in
such case the Indemnifying Party
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shall have no obligation to indemnify the Indemnified Party
under this Section 11.2 against and in respect of the amount by
which the Loss resulting from such final judgment exceed the
amount of the proposed settlement.
(e) Mitigation. Each Indemnified Party shall have an obligation to
mitigate Loss under this Agreement, and to that end each party
shall use its reasonable efforts and shall consult and
cooperate with each other with a view towards mitigating
claims, losses, liabilities, damages, deficiencies, costs and
expenses that may give rise to claims for indemnification under
this Section 11.2.
(f) Cooperation. In the event that any action, suit, proceeding or
investigation relating hereto or to the transactions
contemplated by this Agreement is commenced, whether before or
after the Closing, the parties hereto agree to cooperate and
use reasonable efforts to vigorously defend against and respond
thereto and make available to each other such personnel,
witnesses, books, records, documents or other information
within its control that are necessary or appropriate for such
defense; provided that, subject to Section 11.2(c), the
Indemnifying Party shall reimburse the Indemnified Party for
its out of pocket expenses incurred in connection therewith.
(g) Limitations.
(i) Neither Salton nor Foreman shall be liable to the other
under this Section 11.2 for any Loss due pursuant to
Section 11.2(a)(i) or Section 11.2(b)(i) exclusively,
unless and until the aggregate amount otherwise due the
Indemnified Party exceeds One Hundred Thousand Dollars
($100,000) excluding legal fees and expenses ('Initial
Loss Amount'). Thereafter the total amount of all such
Loss excluding the Initial Loss Amount actually
incurred shall be indemnifiable.
(ii) Nothing herein shall relieve Salton or Foreman of any
liability to make any payment expressly required to be
made by such party pursuant to this Agreement or deny
Foreman any right created by the Security Agreement
referred to in Section 9(a)(vii).
11.3. Insurance Proceeds. With respect to any Claim required to be
indemnified pursuant to this Agreement, so long as the
Indemnifying Party has complied with its indemnification
obligations on such Claim: (i) to the extent available, the
Indemnified Party shall assign to the Indemnifying Party any
applicable proceeds under any insurance policy which covers the
matter which is the subject of the indemnification and shall
take reasonable steps to insure that the Indemnifying Party
obtains the benefits of such policy, including providing any
notices as required under such policy and (ii) if the
Indemnified Party receives insurance proceeds with respect to
any Loss paid by the Indemnifying Party, then the Indemnified
Party shall reimburse the Indemnifying Party in an amount
equivalent to such proceeds up to the amount actually paid by
the Indemnifying Party.
11.4 Exclusive Remedy. The rights of Salton under Section 11.2 shall
be the exclusive remedy of Salton with respect to claims based
upon a breach or
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alleged breach of the representations, warranties and covenants
of Foreman contained herein. The rights of Foreman under
Section 11.2 shall be the exclusive remedy of Foreman with
respect to claims based upon a breach or alleged breach of the
representations, warranties and covenants of Salton contained
herein. Except as expressly set forth in this Agreement,
neither Foreman nor Salton has made any representations or
warranties, express or implied, in connection with the
transactions contemplated by this Agreement.
12. Miscellaneous.
(a) Notices. All notices, requests, demands and other
communications which are required or may be given under this
Agreement shall be in writing and shall be deemed to have been
duly given when received if: (i) personally delivered; (ii)
when transmitted if transmitted by telecopy, electronic or
digital transmission method and followed by a confirmation of
receipt from the recipient of the notice; (iii) when delivered
if sent to a domestic address by recognized overnight delivery
service (e.g., DHL); and upon receipt, if sent by prepaid U.S.
certified or registered mail, return receipt requested. In each
case notice shall be sent as indicated below:
If to Foreman:
George Foreman
4402 Walham Court
Kingwood, Texas 77345
with copies to:
Edward Wallison, Esq.
1111 Bagby, Suite 2030
Houston, Texas 77002
and
Mann, Frankfort, Stein & Lipp
12 Greenway Plaza, 8th Floor
Houston, Texas 77046-1291
Attention: William J. Hickl III
If to Salton, addressed to:
Salton, Inc.
550 Business Center Drive
Mount Prospect, IL
Attn: Leon Dreimann
Chief Executive Officer
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(b) Choice of Law. This Agreement shall be construed, interpreted
and the rights of the parties determined in accordance with the
laws of the State of Illinois (without reference to its choice
of law provisions).
(c) Entire Agreement; Amendments and Waivers. This Agreement,
together with all exhibits and schedules hereto and thereto,
the Security Agreement referred to in Section 9(a)(vii) and the
Subordination Agreement referred to in Section 9(a)(x),
constitute the entire agreement among the parties pertaining to
the subject matter hereof and supersede all prior agreements,
understandings, negotiations and discussions, whether oral or
written, of the parties. This Agreement may not be amended
except by an instrument in writing signed on behalf of each of
the parties hereto. No amendment, supplement, modification or
waiver of this Agreement shall be binding unless executed in
writing by the party to be bound thereby. No waiver of any of
the provisions of this Agreement shall be deemed or shall
constitute a waiver of any other provision hereof (whether or
not similar), nor shall such waiver constitute a continuing
waiver unless otherwise expressly provided.
(d) Multiple Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original,
but all of which together shall constitute one and the same
instrument.
(e) Invalidity. In the event that any one or more of the provisions
contained in this Agreement or in any other instrument referred
to herein, shall, for any reason, be held to be invalid,
illegal or unenforceable in any respect, then to the maximum
extent permitted by law, such invalidity, illegality or
unenforceability shall not affect any other provision of this
Agreement or any other such instrument.
(f) Titles; Gender. The titles, captions or headings of the
Sections herein, and the use of a particular gender, are for
convenience of reference only and are not intended to be a part
of or to affect or restrict the meaning or interpretation of
this Agreement.
(g) Arbitration. Each party hereto agrees to resolve any claim,
demand, dispute, action or cause of action arising under or in
connection with this Agreement by arbitration in accordance
with the Rules of the American Arbitration Association ('AAA')
applicable to commercial disputes, except that each party shall
be entitled to discovery and to present witnesses in the
discretion of the arbitrators. There shall be three (3)
arbitrators, one selected by Foreman and one selected by
Salton. The third arbitrator shall be selected by the first two
arbitrators. The decision of the arbitration panel shall be
determined by a majority vote. If Salton or Foreman desires to
initiate an arbitration, they shall give Notice to the other
('Initial Notice'). The party who sends the Initial Notice
shall include the name of the arbitrator designated by such
party. The party receiving the Initial Notice shall designate
its arbitrator within fourteen (14) Business Days next
following receipt of the Initial Notice. If the arbitrators
designated by Salton and Foreman cannot agree upon a third
arbitrator within thirty (30) days following the designation of
the second arbitrator, then, upon the application of Salton or
Foreman, the AAA shall select the third arbitrator. If either
Salton or
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Foreman does not designate an arbitrator as required under this
Agreement within the time period allowed then upon the
application of the other party, the AAA shall chose the second
arbitrator. Any decision of the arbitration panel shall be
specifically enforceable by any state or U.S. federal court
sitting in Houston Texas or Chicago, Illinois.
(h) Interpretation. The headings and captions contained in this
Agreement and in the Schedules hereto are for reference
purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
(i) Further Assurances. Each of Foreman and Salton will use
reasonable efforts to implement the provisions of this
Agreement, including but not limited to the execution and
delivery of such other documents (including any license,
assignment or assumption agreement, official certificates of
registration, renewals, transfers or other documents supporting
ownership of trademarks) in addition to those required by this
Agreement, in form and substance reasonably satisfactory to the
other party, as may be reasonably deemed necessary to implement
any provision of this Agreement.
IN WITNESS WHEREOF, this Agreement has been signed on behalf of each of the
parties hereto as the date first written above.
Salton, Inc.
By: /s/ Leon Dreimann /s/ George Foreman
-------------------------------- --------------------------------
Name: Leon Dreimann George Foreman
Title: Chief Executive Officer
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SCHEDULE 4
APPLICATIONS ASSISTANCE CONTRACT
Schedule 4 to Purchase Agreement
dated as of July 1, 1999
APPLICATION ASSISTANCE AGREEMENT
dated as of ('Agreement')
between
Salton, Inc., a Delaware corporation ('Salton'),
and
George Foreman ('Foreman')
A. On the date hereof, pursuant to a Purchase Agreement dated as of
July 1, 1999 among the parties hereto ('Purchase Agreement'), Foreman has sold
to Salton permanent worldwide rights to certain unregistered trademarks; and
Foreman has sold to Salton the permanent worldwide rights to the use of his name
in connection with portable kitchen appliance products that are used to make or
serve food and non-alcoholic beverages (the 'Foreman Food Products Line').
B. Salton will require assistance from Foreman over a substantial
period of time in order to register unregistered trademarks and to register
future trademarks and to obtain copyrights and materials which are used to
promote and market products within the Foreman Food Products Line.
C. Capitalized terms used in this Agreement and not defined herein are
defined in the Purchase Agreement.
Therefore, Salton and Foreman agree as set forth below.
1. Term. The Term of this Agreement shall commence on the date hereof
and end on December 31, 2009.
2. Payment for Services. Salton shall pay Foreman one million dollars
($1,000,000) for services hereunder in forty (40) quarterly installments of
twenty-five thousand dollars ($25,000) on the last business day of each calendar
quarter, commencing with the quarter ending March 31, 2000.
3. Services.
a. At the request of Salton, Foreman shall execute and deliver
affidavits, declarations, applications and other documents required by Salton in
order to: (i) register unregistered trademarks sold to Salton under the Purchase
Agreement in the United States of America; (ii) register trademarks already
registered in the U.S.A. in other jurisdictions worldwide; (iii) register for
protection in any jurisdiction in the world trademarks on products sold in the
Foreman Food Products Line; (iv) register copyrights on writings, recordings,
pictures and other presentations used by Salton to market products under
trademarks included in the Foreman Permanent Properties sold under the Purchase
Agreement and the permanent worldwide rights to use the name and likeness of
George Foreman as described and sold to Salton under Section 1(b) of the
Purchase Agreement.
b. The services to be provided under this Agreement relate solely to
the matters set forth in this Agreement and do not require of Foreman any other
personal services or to make any appearances for Salton or to act in promotional
videos or otherwise to promote products marketed by Salton in the Foreman Food
Products Line.
4. No Additional Rights. Foreman shall have no right, directly or
indirectly, to royalties or any other payments arising out of the sale of
products making use of the trademarks and other rights sold by Foreman to Salton
pursuant to the Purchase Agreement.
Salton, Inc.
By: ___________________________ _____________________________
Leon Dreimann George Foreman
Chief Executive Officer
SCHEDULE 9(vii) to Purchase Agreement
dated as of July 1, 1999
TRADEMARK SECURITY AGREEMENT
(attached hereto)
Agreement - George Foreman and Salton Inc.
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