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                                                                 EXHIBIT 10.32







                 PURCHASE, DISTRIBUTION AND MARKETING AGREEMENT


                                 BY AND BETWEEN


                         SALTON/MAXIM HOUSEWARES, INC.


                                      AND


                               KMART CORPORATION





                           _________________________

                                JANUARY 27, 1997
                           _________________________





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                 PURCHASE, DISTRIBUTION AND MARKETING AGREEMENT

     This Agreement ("Agreement") is entered into as of January 27, 1997 (the
"Execution Date") between Salton/Maxim Housewares, Inc., a Delaware corporation
("Salton"), and Kmart Corporation, a Michigan corporation ("Kmart").

                                    PREAMBLE

     WHEREAS, pursuant to License Agreements by and between White Consolidated
Industries, Inc. ("WCI") and Salton (the "License Agreements"), Salton has the
exclusive right and license within the United States to use the trademark
"White-Westinghouse" and all associated designs and trade dress (together, the
"Trademark") in connection with the design, manufacture, advertising, sale and
promotion of, among others, the products listed on Exhibit A hereto, each of
which will bear and include the Trademark (such products bearing the Trademark
are hereinafter referred to as the "Products");

     WHEREAS, Kmart is a leading discount retailer of various consumer and
other products, including products similar to the Products; and

     WHEREAS, Salton desires to grant to Kmart certain exclusive rights and
obligations to purchase, distribute, sell, market and promote the Products in
the United States, and Kmart desires to accept and exercise these rights and
obligations, upon the terms and subject to the conditions of this Agreement.

     WHEREAS, simultaneously with the execution of this Agreement, Kmart is
executing an agreement with New M-Tech Corporation, an affiliate of Salton, as
defined in Section 1.1 below (the "New Tech Agreement"), for the use of the
Trademark on Audio products, Video products, Telephones, Telephone Answering
Machines and Telephone accessories all as specifically described therein, which
agreement is critical to Kmart's overall program for use of the Trademark on
Products under this Agreement with Salton, is a primary inducement for Kmart's
entering into, and is a continuing necessary component of and precondition to
Kmart's performance under this Agreement with Salton.

     Accordingly, in consideration of the foregoing, and for other good and
valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the parties hereto hereby agree as follows:

                              TERMS AND CONDITIONS
1. DEFINITIONS

      As used in this Agreement, the following terms shall have the
           meaning given to them below:

      1.1  "Affiliate" means any Person involved in a situation where,
           directly or indirectly, one Person controls, or has the power to
           control, the other Person or a third party controls, or has the
           power to control, both Persons.
      
      1.2  "Discount Department Store" shall include, without
           limitation, the Persons listed on Schedule 1.2 hereof as well as all
           department stores which are similar to Discount Department Stores in
           terms of market niche, size and product pricing which now or
           hereafter may exist.



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      1.3  "Person" shall include any individual, corporation,
           partnership, association, cooperative, joint venture, or any other
           form of business entity recognized under the law.

      1.4  "sale" shall mean any action involving selling.

      1.5  "sell" shall mean to, directly or indirectly, sell,
           distribute, supply, solicit or accept orders for, negotiate for the
           sale or distribution of, or take any other action that is in
           furtherance of, any of the foregoing.  "Sell" also include any other
           forms of that verb, whether active or passive, or in the past,
           present, or future tense.

      1.6  "United States" shall mean the United States of America,
           including Puerto Rico and Guam.

2. APPOINTMENT

      2.1  Appointment by Salton; Acceptance by Kmart.  Subject to the
           provisions of this Agreement, Salton hereby appoints Kmart as the
           sole and exclusive Discount Department Store to purchase,
           distribute, sell, market and promote the Products in the United
           States and Kmart hereby accepts such appointment. The rights granted
           to Kmart under this Agreement shall hereinafter collectively be
           referred to as the "Right."  No other Discount Department Store
           shall have any such Right during the Term of this Agreement and/or
           any extension or renewal thereof, regardless of source (i.e.,
           whether from Salton or any other entity) subject to Sections 10.4
           and 10.5 hereof.  Notwithstanding the foregoing, nothing in this
           Agreement shall be deemed to preclude the sale of Products (i)Eby
           entities or stores other than Discount Department Stores including,
           without limitation, retail department stores, specialty housewares,
           gourmet and kitchen stores and national cable television programs or
           (ii) by any Person outside the United States.  Furthermore, nothing
           in this Agreement shall preclude Kmart from purchasing products of
           the type listed on Exhibit A hereto from any sources other than
           Salton if such products do not bear or include or are not sold under
           the Trademark, and no payments shall be due to Salton hereunder in
           respect of such sales.

      2.2  Territorial Limitations.  Salton covenants and agrees that,
           during the term of this Agreement or until this Agreement is
           terminated in accordance with the provisions of Article 10 below:

           2.2.1 Salton shall not, directly or indirectly, sell
                 any Product to a Discount Department Store in the United
                 States, subject to Sections 10.4 and 10.5 hereof.

           2.2.2 Except with the prior written consent of Salton
                 (which consent may be refused in the sole, absolute and
                 arbitrary discretion of Salton), Kmart shall not sell any
                 Product to any Person outside the United States.  The United
                 States includes Puerto Rico and Guam.

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              2.2.3 The parties acknowledge and agree that the relationship
                    hereby established between Kmart and Salton is solely that
                    of buyer and seller of goods that each is an independent
                    contractor engaged in the operation of its own respective
                    business, that neither party shall be considered to be the
                    agent of the other party for any purpose whatsoever, except
                    as otherwise expressly indicated in this Agreement, and
                    that, except as otherwise expressly indicated in this
                    Agreement, neither party has any authority to enter into any
                    contract, assume any obligations or make any warranties or
                    representations on behalf of the other party.  Nothing in
                    this Agreement shall be construed to establish a partnership
                    or joint venture relationship between Salton and Kmart.
                    Nothing in this Agreement shall be deemed in any way to
                    constitute a sublicense by Salton of its rights under the
                    License Agreement, and the relationship between the parties
                    hereto shall at all times be as set forth in this paragraph.

3. REPRESENTATIONS AND WARRANTIES OF SALTON

   3.1      Salton represents and warrants to Kmart as follows:

            3.1.1   Organization, Power and Authority.  It is duly organized
                    and validly existing under the laws of the State of
                    Delaware, has all requisite power and authority to conduct
                    its business as now, and as proposed to be, conducted and to
                    execute, deliver and perform its obligations under this
                    Agreement.  This Agreement has been duly authorized,
                    executed and delivered by Salton and represents a valid and
                    binding obligation enforceable against Salton in accordance
                    with its terms.

            3.1.2   No Conflicts; Consents.  Execution and delivery hereof, or
                    performance by Salton hereunder, shall not (a) violate or
                    create a default under (i)ESalton's Certificate of
                    Incorporation or by-laws (true and correct copies of which
                    have been delivered to Kmart), (ii) any mortgage, indenture,
                    agreement, note or other instrument to which it is a party
                    or to which its assets are subject including, without
                    limitation, the License Agreement or (iii) any court order
                    or decree or other governmental directive or (b) result in
                    the action of any lien, charge or encumbrance on any
                    material portion of Salton's assets, except as contemplated
                    hereby.

            3.1.3   Brokers.  No broker, investment banker, financial advisor
                    or other person is entitled to any broker's, finder's,
                    financial advisor's or other similar fee or commission in
                    connection with the transactions contemplated by this
                    Agreement based upon arrangements made by or on behalf of
                    Salton.

            3.1.4   Trademark/Compliance with Laws.  It has the contractual
                    right and authority to use the Trademark for the Products as
                    provided in this Agreement and to grant to Kmart all rights
                    which are set forth in this Agreement including but not
                    limited to the "Right" described in Section 2.1 herein,
                    including but not limited to, the right to import all
                    Products into the United States for the full duration of
                    this Agreement; and Salton shall provide U.S. Customs with



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                    sufficient proof and documentation to enable Kmart to do so.
                    (Notwithstanding the foregoing, Salton shall have up to ten
                    (10) business days to correct any such U.S. Customs Problems
                    which do not affect Kmart's ability to use the Trademark in
                    connection with the sale of any of the Products pursuant to
                    this Agreement.)  In addition, no other Discount Department
                    Store shall have the right to use the Trademark in
                    connection with the sale of any of the Products or sell
                    Products bearing the Trademark or have any of Kmart's rights
                    hereunder during the Term of this Agreement and any renewal
                    and/or extension hereof.  Furthermore, this Agreement as
                    well as Salton's performance hereunder shall be in
                    compliance with all applicable laws, rules and regulations
                    other than immaterial violations.  Any claim which Kmart
                    reasonably believes impairs or would impair Kmart's ability
                    to receive any of the benefits of this Agreement, or any
                    failure under this Agreement and/or under the NewTech
                    Agreement with respect to this (or the Salton Agreement's)
                    Section 3.1.4 and/or Section 2.1, whether such failure
                    relates to any or all Products, shall entitle Kmart, in
                    addition to all other rights and remedies, without resort to
                    the notice and cure requirements under Section 10.3 herein,
                    to immediately terminate this Agreement and owe nothing to
                    Salton except for payment for Products accepted and sold by
                    Kmart through the date of termination.

       3.1.5        Qualifications.  Throughout the Term of this Agreement and 
                    any renewal or extension hereof, Salton shall comply with 
                    the following requirements:

                    a.   New Vendor Packet Compliance. Salton must have executed
                         and delivered to Kmart all documents required by
                         Kmart's New Vendor Packet, including, but not limited
                         to, Kmart's agreement on standard purchase order terms
                         and conditions attached as Exhibit B (collectively, the
                         "Related Documents") and must currently be in full
                         compliance with the same except as required by this
                         Agreement.  Salton's execution of this Agreement shall
                         constitute Salton's acceptance of and agreement to the
                         terms and conditions contained in all of the Related
                         Documents to the extent not inconsistent with the terms
                         of this Agreement.

                    b.   Kmart Corporation Code of Business Conduct.Salton must
                         be in full compliance with the Kmart Code of Business
                         Conduct and all applicable laws, rules and regulations,
                         including but not limited to child, forced, and prison
                         labor laws and must not have violated the Code of
                         Business Conduct or  applicable laws during the twelve
                         calendar months preceding the date of execution of this
                         Agreement.


                    c.   Continuing Business Conduct with Kmart Foreign
                         Subsidiaries and Operations.Salton must not restrict or
                         curtail in any way its historical business practices
                         and course of dealing with Kmart's foreign subsidiaries
                         and other foreign operations if any existed.




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                      d.  Industry Performance.  Salton must at a minimum meet
                          normal industry standards for performance regarding
                          timing and completion levels of fill rates without
                          substitutions.

                      e.  Electronic Data Interchange. Salton must accommodate
                          and participate in Kmart's electronic data interchange
                          program.


4.   REPRESENTATIONS AND WARRANTIES OF KMART

      4.1      Kmart represents and warrants to Salton as follows:

               4.1.1  Organization, Power and Authority.  It is duly organized
                      and validly existing under the laws of the State of
                      Michigan, has all requisite power and authority to conduct
                      its business as now, and as proposed to be, conducted and
                      to execute, deliver and perform its obligations under this
                      Agreement.  This Agreement has been duly authorized,
                      executed and delivered by Kmart and represents a valid and
                      binding obligation enforceable against Kmart in accordance
                      with its terms.

               4.1.2  No Conflicts; Consents.  Execution and delivery
                      hereof, or performance by Kmart hereunder, shall not (a)
                      of Incorporation or by-laws (true and correct copies of
                      which have been delivered to Salton), (ii) any mortgage,
                      indenture, agreement, note or other instrument to which it
                      is a party or to which its assets are subject or (iii) any
                      court order or decree or other governmental directive or
                      (b) result in the action of any lien, charge or
                      encumbrance on any material portion of Kmart's assets.

               4.1.3  Brokers.  No broker, investment banker, financial advisor 
                      or other person is entitled to any broker's, finder's,
                      financial advisor's or other similar fee or commission in
                      connection with the transactions contemplated by this
                      Agreement based upon arrangements made by or on behalf of
                      Kmart.

5.   MINIMUM ORDERS; OTHER OBLIGATIONS

     [*]

*    Denotes Confidential Treatment




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  [*] 


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           [*]
       

      5.3  Retail Sales Price.  Kmart shall have sole discretion in
           setting the sales price for the sale of the Products to its
           customers.


* Denotes Confidential Treatment


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6.   DELIVERY

      6.1  Availability of Products.  Products shall be shipped in
           accordance with the Specific Purchase Orders.  Salton shall use its
           reasonable best efforts to make available to Kmart sufficient
           quantities of the Products to satisfy Kmart's Product Orders.

      6.2  Product Forecasts.  To assist Salton in production scheduling
           for the manufacture of the Products, Kmart shall provide to Salton,
           monthly, a six month rolling forecast of its requirements for
           Products.  The first forecast shall be provided by Kmart to Salton
           within thirty (30) business days of the Execution Date of this
           Agreement (to forecast the requirements for the six months ended
           June 30, 1997 and for the next five succeeding calendar months) and
           thereafter shall be provided to Salton on or before the 20th day of
           each month (to forecast the requirements for the next six succeeding
           calendar months).  It is understood and agreed that all forecasts
           are estimates only and Kmart shall only be bound to purchase the
           Products pursuant to Specific Purchase Orders issued by it to
           Salton, subject to the satisfaction of the Minimum Product Order
           commitment set forth in Section 5.1 hereof; and the Fee on any
           shortfall in the Minimum Product Order for any Category and Kmart's
           payment for conforming Products ordered and timely delivered through
           the date of Termination shall be Salton's sole and exclusive remedy
           hereunder.

      6.3  Shipping Arrangements; Risk of Loss.  The shipping
           arrangements, insurance and risk of loss relating to Products
           purchased hereunder shall be specified in each Specific Purchase
           Order.
7. MANUFACTURE OF PRODUCTS; PRICE AND PAYMENT TERMS

  [*]
* Denotes Confidential Treatment




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  [*]

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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


  [*]
* Denotes Confidential Treatment



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  [*]


      9.3  Survival.  The provisions of this Section 9 shall
           survive the termination or expiration of this Agreement.


10.  TERM AND TERMINATION

     10.1  Term.  The Term of this Agreement shall be a period
           commencing on the Execution Date and terminating on [*]
           unless earlier terminated in accordance with this Section 10 of this
           Agreement.

     10.2  Extension of Terms.


       [*]


     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"):

       * Denotes Confidential Treatment



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     [*]   

10.4 Termination at Option of Kmart.

     [*]

*    Denotes Confidential Treatment



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           [*] 

      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


        *  Denotes Confidential Treatment
           

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           effective date of termination or expiration , all of which are
           intended to survive termination. Kmart shall have the right to
           distribute, sell, market and promote all existing inventory of
           Products ordered pursuant to Specific Purchase Orders prior to the
           termination of this Agreement, and to use all packaging materials,
           labels, tags, signage, advertising and promotional materials to
           effectuate the sale of such Products.

    10.7   Non-interference.  Except for negotiations involving Salton
           or with a Third Party Manufacturer, , Kmart agrees that, except with
           Salton, it will not, during the Term of this Agreement or any
           extension or renewal thereof negotiate, obtain information or
           discuss with or enter into any agreement with any person or entity
           covering the licensing, purchase, sale, marketing or distribution of
           the Trademark for any of the Categories of Product purchased by
           Kmart from Salton.

    10.8   *

11. CONFIDENTIALITY/PRESS RELEASES

    11.1   Confidentiality and Non-Disclosure. Salton agrees that any
           and all information in any form that is provided to Salton or any of
           its representatives as part of this Agreement is provided and
           received in confidence, and Salton, shall at all times preserve and
           protect the confidentiality of such information, and of any other
           proprietary or non-public information of or relating to Kmart or any
           of its related companies of which it or any of its representatives
           becomes aware or acquires during the performance of this Agreement
           (such information is hereinafter referred to as "Confidential
           Information"). Salton also agrees that it shall take all reasonable
           steps to ensure that such Confidential Information will not be
           disclosed to, or used by any person, association or entity except
           its own employees, and then only to the extent necessary to permit
           it to perform this Agreement.

           Each of Salton and Kmart agrees to keep the Minimum Product Orders,
           pricing, and Term of this Agreement (including rights of extension
           and termination) strictly confidential, except that each of Salton
           and Kmart shall be permitted to disclose any and all information
           concerning the transactions contemplated hereby to the extent it is
           legally required to do so, whether under applicable securities laws
           or otherwise,  provided, that Salton will use its reasonable best
           efforts to file with the Securities and Exchange Commission or any
           other applicable regulator or court a request for confidential
           treatment of the pricing and other business terms set forth in this
           Agreement.

           In the course of performance of this Agreement, Salton may disclose
           certain information to Kmart which Salton considers proprietary and
           confidential.  In order


     *     Denotes Confidential Treatment
      

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            to be considered as proprietary and confidential and, thus, subject
            to the following restrictions, Salton must comply with both of the
            following requirements prior to disclosure of the information: (i)
            the information must be clearly and conspicuously identified in
            writing as "PROPRIETARY AND CONFIDENTIAL INFORMATION OF SALTON';
            and (ii) Salton must limit its dissemination of the information to
            an authorized representative of Kmart (i.e., one listed on attached
            Exhibit E) with a need to know such information in furtherance of
            the performance of this Agreement (the "Authorized Recipient")
            Provided Salton has complied with (i) and (ii) above, the
            Authorized Recipient shall maintain the confidentiality of such
            information to the same extent Kmart protects its own proprietary
            information and shall not disclose it to anyone other than Kmart
            employees, agents and/or consultants with a need to know who shall
            also be subject to this restriction.

            Confidential Information shall not include information that a party
            can demonstrate by written evidence:

            (i)   is in the public domain (provided that
                  information in the public domain has not and does not come
                  into the public domain as a result of the disclosure by the
                  receiving party or any of its Affiliates);

            (ii)  is known to the receiving party or any of its
                  Affiliates prior to the disclosure by the other party; or

            (iii) becomes available to the party on a
                  non-confidential basis from a source other than an Affiliate
                  of that party or the disclosing party.

      11.2  Press Releases.  Salton shall not issue any press releases
            relating to this Agreement or its relationship with Kmart without
            the prior written approval by an authorized representative of either
            the Corporate Affairs Department or the Investor Relations
            Department of Kmart as to the contents thereof.
      11.3  The Press Release confidentiality and non-disclosure
            obligations contained herein shall survive and continue after
            termination of this Agreement or any related agreements the parties
            may execute, and shall bind each of Salton's and Kmart's legal
            representatives, successors and assigns.

12. GENERAL TERMS AND CONDITIONS

      12.1  Dispute Resolution.  All disputes arising out of, or in
            relation to, this Agreement (other than disputes arising out of any
            claim by a third party in an action commenced against a party) shall
            be referred for decision forthwith to a senior executive of each
            party who is not personally involved in the dispute.  If no
            agreement can be reached through this process within thirty (30)
            days of request by one party to the other to nominate a senior
            executive for dispute resolution, then either party shall be
            entitled to pursue any and all available legal remedies.



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      12.2 No Assignment.  Other than as specifically set forth in this
           Agreement, this Agreement may not be assigned nor may the
           performance of any duties hereunder be delegated by either party
           without the prior written consent of the other party; provided, that
           any such attempted assignment shall be void and shall not relieve
           the assignor from any of its obligations hereunder or under any
           other document or agreement delivered by such party pursuant to, or
           delivered (or acknowledged to have been delivered) contemporaneously
           with or in connection with the execution of, this Agreement, which
           shall continue to be binding upon such party notwithstanding any
           such attempted assignment.

      12.3 Notices.  Any notice required or permitted to be given under
           this Agreement shall be sufficiently given if in writing and
           delivered by registered or certified mail (return receipt
           requested), facsimile (with confirmation of transmittal), overnight
           courier (with confirmation of delivery), or hand delivered to the
           appropriate party at the address set forth below, or at such other
           address as such party may from time to time specify for that purpose
           in a notice similarly given:


<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>




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            Any such notice shall be effective (i) if sent by mail, as
            aforesaid, three (3) business days after mailing, (ii) if sent by
            facsimile, as aforesaid, when sent, and (iii) if sent by courier or
            hand delivered, as aforesaid, when received.  Provided, that if any
            such notice shall have been sent by mail and if on the date of
            mailing thereof or during the period prior to the expiry of the
            third business day following the date of mailing there shall be a
            general postal disruption (whether as a result of rotating strikes
            or otherwise) in the United States, then such notice shall not
            become effective until the third business day following the date of
            resumption of normal mail service.

      12.4  Governing Law and Consent to Jurisdiction. THIS AGREEMENT
            SHALL BE DEEMED TO HAVE BEEN EXECUTED AND DELIVERED IN TROY,
            MICHIGAN, AND SHALL BE CONSTRUED, INTERPRETED AND ENFORCED UNDER
            AND IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF MICHIGAN.
            SALTON AGREES TO EXERCISE ANY RIGHT OR REMEDY IN CONNECTION WITH
            THIS AGREEMENT EXCLUSIVELY IN, AND HEREBY SUBMITS TO THE
            JURISDICTION OF, THE STATE OF MICHIGAN COURTS OF OAKLAND COUNTY,
            MICHIGAN OR THE UNITED STATES DISTRICT COURT IN DETROIT, MICHIGAN.

      12.5  Binding Agreement.  This Agreement shall be binding upon the
            parties hereto, and their respective successors and permitted
            assigns, whether by operation of law or otherwise.
      
      12.6  Entire Agreement.  This Agreement and all other documents and
            instruments specifically incorporated by reference herein contain
            the entire agreement and understanding of the parties with respect
            to the subject matter hereof and thereof and supersedes all
            negotiations, prior discussions and agreements relating to the
            subject of this Agreement. Any terms or conditions in any forms of
            Salton used in the performance of this Agreement which are in
            conflict with or in addition to the terms and conditions of this
            Agreement shall be void. This Agreement may not be amended or
            modified except by a written instrument signed by all of the parties
            hereto.
      
      12.7  Headings.  The headings to the various articles and
            paragraphs of this Agreement have been inserted for convenience only
            and shall not affect the meaning of the language contained in this
            Agreement.
      
      12.8  Waiver.  The waiver by any party of any breach by another
            party of any term or condition of this Agreement shall not
            constitute a waiver of any subsequent breach or nullify the
            effectiveness of that term or condition.
  
      12.9  Counterparts.  This Agreement may be executed in identical
            duplicate copies exchanged by facsimile transmission.  The parties
            agree to execute two identical original copies of the Agreement
            after exchanging signed facsimile versions.  Each identical
            counterpart shall be deemed an original, but all of which together
            shall constitute one and the same instrument.
 
      12.10 Severability of Provisions.  If, for any reason whatsoever,
            any term, covenant or condition of this Agreement or the application
            thereof to any party or circumstance

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            is to any extent held or rendered invalid, unenforceable or
            illegal, then such term, covenant or condition:

                       (i) is deemed to be independent of the remainder of such
                  document and to be severable and divisible therefrom and its
                  validity, unenforceability or illegality does not affect,
                  impair or invalidate the remainder of such document or any
                  part thereof; and

                       (ii) continue to be applicable and enforceable to the
                  fullest extent permitted by law against any party and
                  circumstances other than those as to which it has been held
                  or rendered invalid, unenforceable or illegal.

    12.11   Limitation on Damages.  Except with respect to Salton's
            liability under Section 9 of this Agreement, neither party shall be
            liable to the other party for incidental, consequential, punitive or
            exemplary damages arising in connection with this Agreement or the
            performance, omission of performance or termination hereof, even if
            said party has been advised of the possibility of such damages and
            without regard to the nature of the claim or the underlying theory
            or cause of action (whether in contract, tort or otherwise).  In
            addition, in no event shall Kmart be liable for direct or any other
            damages in excess of the amount to which Salton is entitled to under
            Section 5 herein for Minimum Product Orders which have not been
            placed as of the effective date of the Default or Termination plus
            payment due for Products accepted by Kmart as of such date, nor
            shall Kmart's aggregate liability under this Agreement exceed such
            amount.

    12.12   Force Majeure.  Time is of the essence in the performance of
            all parts of this Agreement; provided, however, performance by
            either party shall be excused during the period in which such
            performance is made reasonably impossible because of a strike, act
            of God or change in laws ("Force Majeure").  Salton, however, shall
            use reasonable diligence to procure substitute performance.  If the
            period during  which performance is excused due to Force Majeure
            exceeds ten (10) days, then either party may terminate its
            obligations under any Specific Purchase Orders without liability,
            and such cancelled Order(s) shall continue to count towards
            fulfillment of the commitments set forth in Section 5 herein.  If
            the period of Force Majeure excusing Salton's performance exceeds
            120 days and such non-performance relates to more than 20% of the
            Minimum Product Orders during any Period, then Kmart may terminate
            this entire Agreement without further obligation to Salton.  Upon
            any such termination, nothing shall be due from Kmart beyond payment
            for Products accepted by Kmart as of the effective date of
            termination.

  12.13     Kmart Marks.  Salton acknowledges Kmart Properties Inc.'s
            ("KPI") exclusive right, title and interest in and to all
            trademarks, trade names, service marks, logos, assignees, program
            and event names, identifications and other proprietary rights and
            privileges which it licenses to Kmart with the right to sublicense
            (the "Kmart Marks").  This Agreement and its various provisions are
            not a license or assignment of any right, title or interest in the
            Kmart Marks by KPI or Kmart to Salton.  Salton shall not in any
            manner represent that it has any ownership in the Kmart Marks and
            shall not do or cause to be done anything impairing Kmart's
            exclusive license in



                                       22
<PAGE>   24


           the Kmart Marks.  Salton shall not use, print or duplicate the
           Kmart Marks except and only if Salton has obtained prior approval
           as provided herein.  Salton's use of the Kmart Marks is limited to
           the Term of this Agreement; upon termination hereof, Salton shall
           immediately cease all use of the Kmart Marks.  Salton shall not
           assign or attempt to assign any rights with regard to the Kmart
           Marks which arise hereunder; any such attempted assignment shall be
           void.

    12.14  White Westinghouse Marks.  Kmart acknowledges WCI's
           exclusive right, title and interest in and to the Trademarks.  This
           Agreement and its various provisions are not a license or assignment
           of any right, title or interest in the Trademark or the License
           Agreement by Salton or WCI to Kmart.  Kmart shall not do or cause to
           be done anything impairing Salton's exclusive license in the
           Trademark. Kmart's use of the Trademark is limited to the terms and
           conditions contained in this Agreement; upon termination hereof,
           Kmart shall immediately cease all use of the Trademark other than in
           connection with the sale, advertising or merchandising of Product
           inventory and order commitments (if any) existing at the time of
           such termination.  Kmart shall not assign or attempt to assign any
           rights with regard to the Trademark which arise hereunder; any such
           attempted assignment shall be void.
    12.15  No Third Party Beneficiaries.  The parties hereto expressly
           agree that there shall be no third party beneficiaries to this
           Agreement.
  
    IN WITNESS WHEREOF, the parties have duly executed this Agreement as of
the Execution Date.


SALTON/MAXIM HOUSEWARES, INC.      KMART CORPORATION
By:                                By:
         (Signature)                       (Signature)
Name:                              Name:
Title:                             Title:



                                       23

<PAGE>   25





                                                                       EXHIBIT A
                            DESCRIPTION OF PRODUCTS


                              KITCHEN HOUSEWARES:

                                      [*]



                                 PERSONAL CARE:

                                      [*]

                               FANS AND HEATERS:

                                      [*]

                     ELECTRIC AIR CLEANERS AND HUMIDIFIERS:


                                      [*]


*  Denotes Confidential Treatment

                                       24










<PAGE>   26
                                  SCHEDULE 1.2
                           DISCOUNT DEPARTMENT STORES

                                      [*]


*  Denotes Confidential Treatment
                      
                      
                                       25
<PAGE>   27
            Purchase Order Terms and Conditions                        EXHIBIT B
    

                                      [*]



*  Denotes Confidential Treatment

<PAGE>   28
                Purchase Order and Conditions                         EXHIBIT C


                                      [*]


*  Denotes Confidential Treatment
<PAGE>   29
                   Terms and Conditions                               EXHIBIT D

                                      [*]



*  Denotes Confidential Treatment
<PAGE>   30
                                   EXHIBIT E

                      AUTHORIZED REPRESENTATIVES OF KMART

                                      [*]


*  Denotes Confidential Treatment

                                       26