
<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.


                                       1



<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

                                       2


<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


                                       3


<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  

                                       4


<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

     5.1  Minimum Product Orders/Sales and Exclusive Remedy.  Subject to Section
          5.2 hereof, during the Term of this Agreement, Kmart agrees to place  
          orders for a minimum U.S. dollar amount of Products within each
          category specified below (each, a "Category") from NewTech (the
          "Minimum Product Orders") at the purchase prices determined in
          accordance with Sections 7.1.1 and 7.1.2 hereof during the periods
          (each, a "Period," and together, the "Periods") in each case as
          specified below ($ in millions). All Products ordered prior to the
          date of this Agreement shall be credited against the Minimum Product
          Orders for the initial Period of this Agreement.


<TABLE>
<CAPTION>

CATEGORY     UP TO AND
  (IN        INCLUDING   7/1/98-    7/1/99-   7/1/00-  7/1/01-   7/1/02-   7/1/03-
MILLIONS)     6/30/98    6/30/99    6/30/00   6/30/01  6/30/02   6/30/03   6/30/04
---------     -------    -------    -------   -------  -------   -------   -------  
<S>          <C>         <C>        <C>       <C>      <C>        <C>       <C>
 Video:      $ 55.0      $ 57.2     $ 59.5    $ 61.9   $ 64.3     $ 66.9    $ 69.6
 Audio:        60.0        62.4       64.9      67.5     70.2       73.0      75.9
Telephones
 and
Telephone    $ 20.0      $ 20.8     $ 21.6    $ 22.5   $ 23.4     $ 24.3    $ 25.3
Answering    ------      ------     ------    ------   ------     ------    ------
Machines:                                
  Total      $135.0      $140.4     $146.0    $151.9   $157.9     $164.2    $170.8
             ======      ======     ======    ======   ======     ======    ======
</TABLE>

          Specific purchase orders shall be issued by Kmart from time to time
          for the Products being purchased ("Specific Purchase Orders"). The
          Specific Purchase Orders shall be in the form and substance of the
          form of purchase order annexed hereto as Exhibit C for domestic orders
          and Exhibit D for import orders, both of which are incorporated herein
          by this reference ("Purchase Order Forms") and shall govern and
          control the terms of each purchase by Kmart of Products hereunder;
          provided, that in the event of a conflict between the terms set forth
          in a Specific Purchase Order and in this Agreement, the terms set
          forth in this Agreement shall be determinative of such conflict. Each
          Specific Purchase Order may be accepted or rejected by NewTech,
          provided that: (i) NewTech's failure to provide Kmart with written
          notice of rejection of any Specific Purchase Order within five (5)
          days of Kmart's issuance thereof shall constitute NewTech's acceptance
          of such Specific Purchase Order; and (ii) NewTech is required to
          accept all Specific Purchase Orders for which and all such Orders
          shall automatically qualify as accepted by NewTech; and (iii) NewTech
          is required to accept all Specific Purchase Orders which NewTech is to
          fill ("Direct NewTech Orders"), provided (a) they are issued at
          prices negotiated by Kmart and NewTech or; (b) are consistent with
          prices quoted by NewTech to Kmart; and (c) are issued within ninety
          (90) days of the required delivery date and; (d) are in an order
          quantity which is not inconsistent with the average order quantity on
          Specific Purchase Orders issued by Kmart to NewTech over the
          preceding one hundred twenty (120) days, and all such Orders placed
          shall automatically qualify as accepted by NewTech. Notwithstanding 
          the foregoing, NewTech shall use its best efforts 


                                       5


<PAGE>   7


          to fill all Specific Purchase Orders placed by Kmart in less than
          ninety (90) days from the required delivery date. For purposes of this
          Agreement, in the event that Kmart issues a Specific Purchase Order
          which is accepted by NewTech as set forth above and NewTech fails
          through no fault of Kmart to timely deliver conforming Products to or
          on behalf of Kmart by the required delivery date specified therein, or
          if for any reason, but through no fault of Kmart, NewTech is unable to
          procure Products then the Minimum Product Orders in the applicable
          Category shall be reduced by the dollar amount set forth in the
          Specific Purchase Order(s) related thereto, whether or not such
          Products are ultimately purchased by Kmart. Kmart's deductions for
          documented claims whether under the Specific Purchase Orders or
          otherwise, shall not reduce Kmart's fulfillment of the Minimum Product
          Orders, and for purposes of determining if Kmart has issued the
          Minimum Product Orders, Kmart shall be deemed to have purchased all
          Products covered by a remittance regardless of offsets/deductions for
          claims. If, however, Kmart issues a Specific Purchaser Order which is
          accepted by NewTech as set forth above and NewTech timely delivers
          conforming Products to or on behalf of Kmart by the required delivery
          date specified therein, and Kmart fails to remit payment for such
          conforming Products so delivered, then such Products shall not be
          counted for purposes of determining if Kmart has issued the Minimum
          Product Orders, unless and until such Products are ultimately paid for
          by Kmart. Notwithstanding the foregoing, Kmart shall not be relieved
          of any obligation to pay for conforming Products timely delivered to
          or on behalf of Kmart in accordance with any Specific Purchase Order.

          Subject to Sections 5.1 above and 5.2 below, in the event that Kmart
          fails to place the Minimum Product Orders in any of the Categories
          specified above within any of the periods specified above, then Kmart
          shall be required to pay NewTech within thirty (30) days following the
          end of any such period, as NewTech's sole and exclusive remedy
          hereunder and upon receipt of an invoice from NewTech therefor, an
          amount equal to (i) (A) the Minimum Product Orders in such Category
          less (B) the Actual Order Amount in such Category multiplied by (ii)
          four percent (4%) in the Video Category and five percent (5%) in all
          other Categories (the "Fee(s)"). The "Actual Order Amount" for
          purposes of this Section 5.1 shall mean, subject to Section 5.1 above
          and Section 5.2 below, the positive amount, if any, obtained by adding
          (i) the actual amount of Products ordered by Kmart in the applicable
          Category during the applicable Period (adjusted upwards pursuant to
          Section 5.1 above and 5.2 below) and (ii) the excess, if any, of (A)
          the actual amount of Products ordered by Kmart in the applicable
          Category during the Period (adjusted upwards pursuant to Section 5.1
          above and 5.2 below) immediately prior to the applicable Period (the
          "Prior Period") less (B) the Minimum Product Orders in the applicable
          Category for the Prior Period. In no event, however, shall NewTech's
          Fees (for both ordered and unordered Products) ever exceed the amount
          NewTech would have received in any Category under Section 5.1 herein
          if Kmart had met all Minimum Product Order commitments stated therein,
          and NewTech shall reconcile and refund all Fees received in excess
          thereof subject to Section 7.1.2 hereof. For example, assuming all
          Specific Purchase Orders are performed by Kmart and NewTech in
          accordance with their respective terms, if during the Period from the
          execution date of this Agreement through June 30, 1998, Kmart's
          Product Orders in the Video Category are equal to an aggregate of
          $60.0 million and if during the period from July 1, 1998 through June
          30, 1999, Kmart's Product Orders in the Video Category are equal to an
          aggregate of $50.0 million, then Kmart shall pay NewTech an amount
          equal to $88,000 on or before July 30, 1999 ([$57.2 million - $50.0
          million] - [$60.0 million - $55.0 million]) x (.04). Kmart shall not
          have the right to offset the amount of Product orders in a particular
          Category against Product Orders in any other Category.

     5.2  Reduction of Minimum Product Orders.  In the event that during any 
          Period aggregate retail sales of Products in the United States for a
          particular Category have decreased from the Prior Period (the amount
          of such reduction of sales in the United States of

                                       6


<PAGE>   8


          Products in any particular Category is hereinafter expressed as a
          percentage, and the amount by which such percentage exceeds 10% is
          hereinafter referred to as the "Reduction Percentage"), then the
          Minimum Product Orders for that Category for the Period following the
          Prior Period (the "Adjustment Period") shall be reduced. This
          reduction shall be in an amount (the "Reduction Amount") equal to (i)
          the higher of (A) the Minimum Product Order commitment for the
          applicable Category for the Adjustment Period or (B) the actual
          Product Orders by Kmart of the Products in the applicable Category
          during the Prior Period (the "Actual Prior Period Orders") multiplied
          by (ii) the Reduction Percentage. The Reduction Amount will then be
          subtracted from the higher of (i) the Minimum Product Order commitment
          for the applicable Category for the Adjustment Period or (ii) the
          Actual Prior Period Orders, to determine the new Minimum Product Order
          commitment for the applicable Category for the Adjustment Period;
          provided, however, that if this computation yields an amount greater
          than the Minimum Product Order commitment for such Period, then no
          adjustment shall be made. In addition, an adjustment may only be made
          to the extent that it would not reduce the Minimum Product Order
          commitment for the Adjustment Period below 80% of the amount specified
          for such Period for the applicable Category under Section 5.1. All
          computations will be based on prices that do not include any internal
          Kmart charges. By way of example only, if sales of products in the
          Video Category in the United States decrease by 30% during the Period
          from July 1, 1999 to June 30, 2000 and Kmart orders from New Tech
          $67.5 million of Products in the Video Category during the Period from
          July 1, 1999 to June 30, 2000, then Kmart may reduce the Minimum
          Product Orders for Products in the Video Category for the Period from
          July 1, 2000 to June 30, 2001 from $61.9 million to $54.0 million
          ([30%-10%] x $67.5=$13.5 million; $13.5 million subtracted from $67.5
          million = $54.0 million; however, the Minimum Product Orders can never
          be reduced under this Section 5.2 by more than 80% of $61.9 million
          (which equals $49.52 million). For purposes of this Section 5.2, Sales
          of Products in the United States within a particular Category shall be
          determined by reference to applicable information published in the
          most widely-circulated trade publication containing such information;
          provided, that if Kmart and NewTech are unable to agree upon the
          publication from which such information is to be derived, then the
          applicable information shall be derived by reference to a trade
          publication selected by Kmart and a trade publication selected by
          NewTech, and the applicable sales information shall be determined on
          the basis of the average of the data contained in the two
          publications.

     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


                                        7


<PAGE>   9


           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  Manufacture of Products.  All Products for which Specific
           Purchase Orders have been issued (subject to Section 5.1 of this
           Agreement) may be manufactured by or on behalf of NewTech 
           acknowledges and Kmart acknowledges (based upon NewTech's
           representation) that under the License Agreement WCI has the right
           before the initial order of a new Product within ten (10) days of
           submission by NewTech, to approve or reject the Product specimen,
           related artwork and packaging, which consent shall not be
           unreasonably withheld and shall be automatic unless rejection is
           communicated in writing to Kmart within the ten (10) day period.  In
           each such case, NewTech shall be solely responsible for making
           timely submission to WCI and timely written communication to Kmart
           of any rejection; and Kmart shall have no liability, whatsoever, for
           any claim or failure relating to or arising from this Section 7.1

           7.1.1  Direct NewTech Orders. In the event that Kmart elects in its
                  sole and absolute discretion to procure the manufacture of
                  Products directly by or on behalf of NewTech, then Kmart shall
                  enter into an agreement with NewTech for such Products as
                  Kmart desires to purchase and NewTech is willing to
                  manufacture pursuant to a purchase order identical in all
                  respects to the Purchase Order Form annexed hereto as Exhibit
                  C for domestic orders and Exhibit D for import orders (the
                  "Direct Purchase Order"). The price to Kmart of Products under
                  a Direct Purchase Order, and all other terms and conditions
                  not specified in this Agreement or in the Purchase Order
                  Form,, shall be determined by mutual agreement acceptable to
                  each of Kmart and NewTech in its sole discretion at or prior
                  to the time the applicable Direct Purchase Order is issued by
                  Kmart and accepted by NewTech.

            7.1.2 Orders from  pursuant to a purchase order identical in all
                  respects to the Purchase Order Form annexed hereto as Exhibit
                  C for domestic orders and Exhibit D for import orders (the
                  "Purchase Order"). Kmart shall make direct payments to  of
                  the amounts owed under such  Purchase Order for conforming
                  Products timely delivered (the "Payments"). NewTech shall
                  remain liable for the  Payments in the event Kmart fails to
                  make such  Payments. Kmart shall indemnify and hold harmless
                  NewTech and its officers, directors, employees and agents from
                  and against any claim, liability or damages, including related
                  costs and attorneys' fees, of which it is timely advised in
                  writing resulting from the failure by Kmart to make 
                  Payments, or otherwise perform, in accordance with the terms
                  of the  Purchase Orders unless such failure is caused or
                  contributed to by NewTech, Windmere or WCI. Kmart shall
                  control the defense and settlement of any claims for which
                  such indemnify is provided. Nothing in this Agreement shall be
                  construed to limit or restrict Kmart in any fashion from
                  dealing directly with NewTech shall not be liable for the
                  failure to perform, including warranties, unless and except
                  to the


                                       8


<PAGE>   10


                  extent that such failure is caused or contributed to by
                  NewTech, Windmere or WCI.

            7.1.3 Purchase Orders from Kmart to NewTech Relating to Kmart
                  agrees that delivery  of the Products in conformity with the
                  applicable  Purchase Order shall be deemed, without any
                  further agreement or instrument, the agreement of Kmart to
                  purchase such Products from NewTech in the manner set forth in
                  Section 7.1.2 above and in this Section 7.1.3 on exactly the
                  same terms and conditions provided under the Purchase Order
                  issued by Kmart at a price equal to the sum of (i) the 
                  Payment for such Products plus (ii) four percent (4%) in the
                  Video Category and five percent (5%) in all other Categories
                  of the "first cost" of such Payment (the "first cost" being
                  the price up to the f.o.b. point of shipment, net of any
                  taxes, freight costs, customs fees, duties, etc.). (The
                  amounts set forth in (i) and (ii) are collectively referred to
                  herein as the "NewTech Payment"). Upon delivery  of the
                  conforming Products identified in the Purchase Order to
                  Kmart, together with the related invoice, Kmart shall at its
                  sole and exclusive option either (i) pay the NewTech Payment
                  to NewTech whereupon NewTech shall pay the Payment to  or
                  (ii) pay the Payment directly to and remit the difference
                  between the NewTech Payment and the Payment directly to
                  NewTech. Kmart's exercise of either of the preceding options
                  shall extinguish any and all rights of NewTech to such
                  payments.

            7.1.4 Aggregate Sales Reports.Within ten (10) days after the end of
                  each calendar month during the term of this Agreement, Kmart
                  shall provide NewTech with a written statement (the "Kmart
                  Statement") indicating, with respect to the preceding month,
                  (i) the aggregate dollar amount of all purchases of Products 
                  under this Agreement and the quantity and types of Products so
                  purchased, (ii) the aggregate dollar amount of  Payments made
                  directly to upon delivery of the Products, (iii) the
                  aggregate dollar amount of the NewTech Payments made directly
                  to NewTech upon delivery of conforming Products. NewTech shall
                  have the right, upon reasonable notice and at reasonable
                  times, within six (6) months following its receipt of the
                  Kmart Statement to review the books and records of Kmart with
                  respect only to (i), (ii) and (iii) above for the period
                  covered by such Kmart Statement, to confirm the accuracy of
                  the payments made hereunder provided that such right of review
                  shall not be exercisable more than once per year and provided
                  further that if such review reveals an underpayment of more
                  than one percent (1%) of the amount to which NewTech is
                  entitled hereunder, then NewTech may conduct such review twice
                  per year. The cost and expenses of such examination shall be
                  paid solely by NewTech; provided, that if such examination
                  reveals an underpayment to either NewTech of more than one
                  percent (1%) of the amount to which NewTech is entitled
                  hereunder, then the reasonable out of pocket costs and
                  expenses of such examination shall be paid by Kmart upon
                  receipt of an invoice therefor with support documentation
                  attached. Notwithstanding the foregoing, the first Aggregate
                  Sales Report will not be issued until after February 15, 1997.


            7.1.5 Examination by Independent Auditors. The independent auditors 
                  for each of NewTech and Windmere-Durable Holdings, Inc.
                  ("Windmere") presently Ernst and Young and Grant Thornton
                  L.L.P., shall have the right during the term of this Agreement
                  at any time that either NewTech or Windmere requires audited
                  financial statements (e.g. in connection with the preparation
                  of their respective annual reports, bank loans or certain
                  acquisitions) to review the books and records of Kmart, but in
                  no event more than twice per year. Any additional audits shall
                  be conducted only with Kmart's express prior written consent,
                  which


                                       9


<PAGE>   11


                  shall not be unreasonably withheld, and shall be only
                  for the purpose of confirming the accuracy of, and relating
                  only to, the financial information required to be provided to
                  NewTech hereunder as set forth in Section 7.1.4 herein,
                  including, all TPM Purchase Orders. All information obtained
                  by such auditors in the course of such review shall be
                  maintained by such auditors as confidential and shall not be
                  disclosed to any party, including Windmere and/or NewTech,
                  without the express prior written consent of Kmart. The cost
                  and expenses of such examination shall be paid solely by
                  NewTech and/or Windmere, as the case may be; provided, that if
                  such examination reveals an underpayment of more than one
                  percent (1%) of the amount to which NewTech is entitled
                  hereunder, then the reasonable out of pocket costs and
                  expenses of such examination shall be paid by Kmart upon
                  receipt of an invoice therefor with support documentation
                  attached. 

            7.1.6 Assignment of Rights. In consideration of Kmart entering into
                  this Agreement and agreeing to pay directly subject to and
                  in accordance with the terms hereof, this Agreement shall
                  constitute the automatic assignment to Kmart of all rights of
                  NewTech against with respect to Products purchased from 
                  pursuant to this Agreement, which rights may not be enforced
                  by NewTech. NewTech shall have no liability with respect to
                  any non-performance of unless NewTech, Windmere or WCI
                  causes or contributes to such non-performance. This Agreement
                  shall also constitute the automatic and irrevocable assignment
                  of the Payment portion of the NewTech Payment to and such
                  payment is not assignable to any other party, including
                  NewTech.


            7.1.7 Sole and Exclusive Remedy of NewTech. NewTech's sole and 
                  exclusive remedy relating to any Purchase Order or any
                  failure under this entire Section 7 shall be against Kmart for
                  its payment of the difference between the NewTech Payment and
                  the  Payment or for enforcement of Kmart's indemnification
                  obligation under Section 7.1.2 hereunder. NewTech shall have
                  no right to enforce against Kmart, Kmart's payment of the 
                  Payment portion of the NewTech Payment unless Kmart shall have
                  wrongfully failed to pay such amount to upon timely delivery
                  of conforming Products under a  Purchase Order. NewTech shall
                  have no right to enforce performance or seek any other remedy
                  against  hereunder or under any  Purchase Order.

            7.1.8 Invoicing Requirements/Payment Terms.

                  A.   NewTech will follow the invoicing
                       requirements provided by Kmart from time to time.

                  B    Payment for all Direct NewTech Orders of Products f.o.b.
                       Asia ("Import Products") and purchased hereunder shall
                       be as follows: (i) Direct NewTech Orders shall be made
                       by wire transfer  within five (5) business days
                       following the receipt of goods ("ROG") provided the
                       International Department has received (i) the original
                       invoice, (ii) an original signed bill of lading and
                       (iii) the customary signed Kmart inspection certificate
                       for goods manufactured overseas.

                  C.   Payment for all domestic Direct NewTech Orders purchased
                       hereunder shall be made by check issued within ten (10)
                       business days of receipt of goods ("ROG") provided Kmart
                       has received the applicable invoice.

                  D.   Payment for all domestic and import 
                       Orders purchased hereunder shall be made pursuant to
                       Section 7.1.3 herein.  If Kmart, in its sole and
               
                                       10


<PAGE>   12



                    exclusive discretion exercises the payment option set forth
                    in (ii) under Section 7.1.3, NewTech shall invoice Kmart for
                    the difference between the NewTech Payment and the Payment
                    after NewTech receives each Aggregate Sales Report described
                    in Section 7.1.4 herein. NewTech shall prepare and submit 2
                    invoices covering each Aggregate Sales Report: one for
                    import orders and one for domestic orders. The invoices
                    shall be directed to:

<TABLE>

                          <C>                             <C>   
                          FOR DOMESTIC ORDERS:            FOR IMPORT ORDERS:
                          Bryan Atkinson                  Linda Peterson                          
                          Manager, Accounting Operations  Director, International Administration  
                          Kmart Corporation               Kmart Corporation                       
                          3100 West Big Beaver Road       3100 West Big Beaver Road               
                          Troy, MI 48084                  Troy, MI 48084                          


</TABLE>

            Kmart shall pay all such invoices within ten (10) business days of
            receipt.

            7.1.9 Stand-by Letter of Credit. Kmart shall open, within ten (10)
                  business days of the Execution Date, a transferable and
                  assignable stand-by irrevocable letter of credit in the sum of
                  $10,000,000 in favor of NewTech from a financial institution
                  reasonably acceptable to NewTech ("Letter of Credit") which
                  can only be drawn upon for Kmart's failure to pay for Direct
                  NewTech Orders of conforming Products which are timely shipped
                  f.o.b. Asia as further described in this Section and for no
                  other reason (including, but not limited to, any NewTech
                  Payment) NewTech shall have as its sole and exclusive remedy
                  for Kmart's failure to pay for such Products, notwithstanding
                  Section 10.3 herein, the right to draw on the Letter of Credit
                  at any time and from time to time provided all of the
                  following procedures are followed by NewTech and all of the
                  following conditions are met: (i) Kmart has failed to pay for
                  such Products as provided herein (ii) NewTech has provided
                  Kmart with the required written notice and opportunity to cure
                  pursuant to Section 10.3 herein and has submitted an affidavit
                  signed by the Chief Financial Officer of NewTech as follows:
                  "NewTech has timely delivered conforming Products f.o.b. Asia
                  to Kmart, Kmart has taken deliveries of such Products and
                  NewTech has invoiced Kmart therefor. Kmart Corporation owes
                  NewTech $_______ pursuant to invoices [invoice numbers to be
                  inserted] (iii) A copy of such invoices and the corresponding
                  inspection certificates indicating that the Products have
                  passed inspection and corresponding original bills of lading
                  duly signed by an authorized officer of Kmart are annexed to
                  the affidavit; (iv);Kmart has failed to pay the amount owing
                  when due after receipt of an invoice therefor and a notice
                  specifying such amount and describing the obligation including
                  respective purchase order number(s),(v). Kmart has received
                  such notice on __________, sixty (60) days have elapsed (for
                  individual obligations of up to $2 million) or thirty (30)
                  days have elapsed (for individual obligations of more than $2
                  million), and Kmart has failed to pay the amount owing or
                  provide proof that the amount is not owing.

                  NewTech shall provide Kmart with ten (10) days prior written
                  notice of its intent to submit such affidavit to draw on the
                  Letter of Credit and shall not be entitled to submit such
                  affidavit if Kmart can prove payment of the amount claimed
                  owing or that the goods were not conforming or timely
                  delivered or otherwise resolve the dispute within such ten
                  (10) day period. The Letter of Credit shall be in form and
                  substance reasonably satisfactory to NewTech and shall
                  terminate on December 15, 1997.

           7.1.10 Currency Exchange.  Prices charged Kmart and payments made by
                  Kmart to NewTech for the Products shall be in U.S. dollars.


                                       11


<PAGE>   13


            
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

     9.1  Indemnification. To the fullest extent permitted by law, NewTech 
          shall  reimburse, indemnify, defend and hold harmless, Kmart, its
          directors, officers and employees and subsidiaries and affiliates
          and each of their respective directors, officers and employees from
          and against any damage, loss, expense or penalty, or any claim or
          action therefor, by or on behalf of any person or entity, arising out
          of the performance or failure of performance of this Agreement
          including but not limited, to any claim or failure with respect to
          Sections 2 or 3 hereof.

          NewTech shall reimburse, indemnify, defend and hold harmless Kmart ,
          its directors, officers and employees and subsidiaries and affiliates
          and each of their respective directors, officers and employees from
          and against all third-party claims alleging that any Products and or
          any Right furnished under this Agreement infringe any patent,
          copyright, trademark or other proprietary right or constitute a misuse
          of any trade secret information and shall pay all costs, attorneys
          fees, settlement payments and damages arising in connection with any
          such claims. Kmart agrees to timely advise NewTech of any such suit,
          claim or proceeding, and to extend reasonable cooperation to NewTech
          in the defense or settlement of such suit, claim or proceeding, but
          NewTech shall have sole control thereof. In the event that an
          injunction is obtained against Kmart's use, purchase, distribution,
          sale, marketing and/or promotion of any Products and/or any Right in
          whole or in part, NewTech shall promptly, at its option either: (a)
          procure for Kmart the right to continue using, purchasing,
          distributing, selling, marketing and/or promoting such Products
          enjoined from use, or (b) replace or modify the same so that Kmart's
          use, sale or possession is not subject to any such injunction, or (c)
          at Kmart's option refund to Kmart all amounts paid to NewTech for such
          Products and such Right, including but not limited to all NewTech
          Payments.

     9.2  Insurance. NewTech shall, during the Term of this Agreement, maintain
          the following insurance coverages as indicated or as required by law,
          whichever shall be greater, with insurers in good standing and
          authorized to do business under the laws of the State(s) where
          performance hereunder shall occur:

          (a)  Comprehensive General Liability, naming Kmart as an additional
               insured including, but not limited to, Contractual Liability and
               Products Liability, with broad form property damage and bodily
               injury (including Personal Injury) coverage. The minimum limits
               for each shall be $2,000,000 per occurrence.

          (b)  All insurance required in Exhibits B and C hereto, as well as
               that required under each Purchase Order.

          (c)  Employee fidelity insurance, workers compensation insurance and
               employer's liability insurance as required by all applicable
               federal, state or other laws, rules or regulations.


                                       12


<PAGE>   14

           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.

      9.3  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 June 30, 2004, unless earlier
           terminated in accordance with this Section 10 of this Agreement.

      10.2 Extension of Terms. If neither Kmart nor NewTech terminate this
           Agreement pursuant to Section 10.3, 10.4 or 10.5, as applicable,
           Kmart shall have the right to extend the term of this Agreement for
           successive one-year periods through June 30, 2011, by delivering
           written notice to NewTech of its desire to so extend this Agreement
           on or before May 30 of any year during the Term or any extension
           period, as applicable. Upon any such extension, the Minimum Product
           Orders for each Category shall be increased at an annual rate of no
           more than four percent (4%) from the amount of Minimum Product Orders
           in the immediately preceding year during each year in which the Term
           has been so extended. Kmart may terminate this Agreement without
           cause on sixty (60) days prior written notice at any time during any
           extension period without cost or penalty.

      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"):

           (a) Material breach of the Agreement, including, without limitation,
               (i) the failure of NewTech to supply Products and/or provide
               services as provided for herein with such diligence as will
               insure compliance with all delivery, installation, completion and
               other dates specified herein, (ii) the failure of Kmart to pay or
               reimburse any material amounts which are due to be paid or
               reimbursed hereunder; (iii) any failure relating to Section 2.1,
               Section 3.1.4 and/or Section 9 herein; or (iv) Salton's breach of
               the Salton Agreement;
              
           (b) Failure or material breach of any material condition, obligation,
               covenant, representation or warranty set forth herein; or
              
           (c) Insolvency, or the institution of proceedings by or against a
               party under any federal or state bankruptcy or insolvency law or
               an assignment for the benefit of all or substantially all
               creditors which proceeding is not stayed within sixty (60) days
               of filing; or the cessation of operations or doing business for
               any reason.

            Upon the occurrence of a Default, the non-defaulting party shall
            provide written notice (the "Notice") to the defaulting party
            specifying the nature of the Default and the conduct required to
            cure such Default. The defaulting party shall have 60 days following
            the date the Notice is received by the non-defaulting party to cure
            the Default (30 days for non-payment by Kmart under a Specific
            Purchase Order where the amount involved exceeds $2,000,000). If the
            Default is not cured by the defaulting party within such period, the
            non-defaulting party may elect to either specifically enforce
            performance hereof or terminate this Agreement If, however, Kmart
            Defaults, NewTech's remedies shall not exceed the amount NewTech
            would have received as its sole and exclusive remedy


                                       13
<PAGE>   15

           under Section 5 herein with respect to Minimum Product Orders which 
           have not been placed as of the effective date of the Default or     
           Termination. In the event of NewTech's Default or wrongful          
           termination of this Agreement, Kmart shall not owe NewTech any      
           damages under Section 5 of this Agreement.                          
                                                                               
           A party's failure to demand cure of or terminate this Agreement as a
           result of a prior Default shall not be deemed a waiver by the party 
           of the right to demand cure of or to terminate this Agreement as a  
           result of a subsequent Default. Unless otherwise indicated to the   
           contrary in this Agreement, the rights set forth hereinabove are    
           cumulative and in addition to those otherwise provided by law.      

      10.4 Termination at Option of Kmart. (a) Kmart shall have the right to
           terminate this Agreement without cause in its sole discretion
           effective on June 30, 2002, by giving NewTech written notice at any
           time up to June 30, 2000. Following delivery of such notice to
           NewTech, the parties shall continue to be bound by all of the terms
           and conditions of this Agreement through June 30, 2002; provided,
           that the Minimum Product Purchase commitment, for the period of July
           1, 2001 through June 30, 2002, as set forth in Section 5.1 hereof,
           shall be reduced to 25% of the amounts set forth in said Section 5.1;
           and provided further, that after June 30, 2000, NewTech may commence
           marketing plans for the sale of Products to any other Person,
           including other Discount Department Stores, and, after July 31, 2001
           NewTech may market and sell Products to any other Person, including
           Discount Department Stores, notwithstanding Section 2.1 hereof. If
           Kmart does not elect to terminate this Agreement in accordance with
           the foregoing sentences of this Section 10.4, then Kmart shall have
           the right to terminate this Agreement without cause in its sole
           discretion effective June 30, 2003 and on each June 30 thereafter
           during the term of this Agreement by giving written notice to NewTech
           of its desire to so terminate this Agreement. Upon any such
           termination, Kmart shall owe nothing to NewTech beyond payment for
           Products accepted by Kmart as of the effective date of termination.
           Kmart shall be required to perform all Specific Purchase Orders
           issued prior to the effective date of such termination, and Kmart
           shall have no further obligation following such termination.

           (b) Notwithstanding the foregoing, it is specifically agreed by the
           parties hereto that in the event Kmart terminates the Agreement at
           any time and such termination is not in accordance with this Section
           10.4(a), or is otherwise in violation or breach of this Agreement,
           Kmart's liability hereunder shall not exceed an amount equal to the
           Fees specified in Section 5 herein for the Minimum Product Orders
           which have not been placed as of the effective date of such
           termination and for payment for Orders of conforming Products timely
           delivered through the date of such termination, Kmart shall be
           required to perform all Specific Purchase Orders issued prior to the
           effective date of such termination, and Kmart shall have no further
           obligation following such termination.

      10.5 Termination at Option of NewTech. NewTech shall have the right to
           terminate this Agreement effective on June 30, 2002, by giving Kmart
           written notice at any time up to June 30, 2000. Following delivery of
           such notice to Kmart, the parties shall continue to be bound by all
           of the terms and conditions of this Agreement through June 30, 2002;
           provided, that the Minimum Product Purchase commitment, for the
           period of July 1, 2001 through June 30, 2002, as set forth in Section
           5.1 hereof, shall be reduced to 25% of the amounts set forth in said
           Section 5.1; and provided further, that after June 30, 2000, NewTech
           may commence marketing plans for the sale of Products to any other
           Person, including other Discount Department Stores, and, after July
           31, 2001 NewTech may market and sell Products to any other Person,
           including Discount Department Stores, notwithstanding Section 2.1
           hereof. In the event that NewTech does not elect to terminate this
           Agreement in accordance with the foregoing sentences of this Section
           10.5, then NewTech shall have the right to terminate this Agreement
           without cause in its

                                       14

<PAGE>   16

           sole discretion effective June 30, 2003 and on each June 30
           thereafter during the term of this Agreement by giving at least 12
           months prior written notice to Kmart of its desire to so terminate
           this Agreement. Upon any such termination, Kmart shall owe nothing to
           NewTech beyond payment for Products accepted by Kmart as of the
           effective date of such termination.

      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 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.

      10.8 Termination of Salton Agreement. If the Salton Agreement is
           terminated at any time for any reason, Kmart may, in its sole option,
           elect to terminate this Agreement, and upon such termination, owe
           nothing further under this Agreement beyond payment for Products
           accepted and sold by Kmart through the date of termination.

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

                                       15

<PAGE>   17

           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:

           (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 



                                     16
<PAGE>   18

           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                                          
                                                                                                                             
                                                                                                                             
           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                                                      


                                      17

<PAGE>   19


            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.

      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 

                                      18



<PAGE>   20


            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 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.                                                          

                                      19

<PAGE>   21



            IN WITNESS WHEREOF, the parties have duly executed this Agreement
as of the Execution Date.



<TABLE>
<S>                                   <C>
NEW M-TECH CORPORATION                KMART CORPORATION
By:                                   By: 
  -----------------------------          -------------------------------
(Signature)                           (Signature)
Name:                                 Name: 
     --------------------------            -----------------------------
Title:                                Title:
      -------------------------             ----------------------------
</TABLE>


                                       20

<PAGE>   22





                                                                       EXHIBIT A

                           DESCRIPTION OF PRODUCTS




<TABLE>
<S>             <C>
Audio:          radios, phonographs, tape decks and tapes, CD players, compact home    
                stereo systems and home theater systems and audio accessories.         

Video:          televisions, videocassette recorders and TV/VCR combinations and video 
                accessories.                                                           
</TABLE>


Telephones

Telephone answering machines

Telephone accessories

<PAGE>   23





                                  SCHEDULE 1.2

                           DISCOUNT DEPARTMENT STORES


Ames Dept. Stores
Baby Superstore
Best Buy
Best Products Co.
Bradlees
Caldor Corp.
Circuit City Stores
Comp USA
Consolidated Stores
Dayton Hudson/Target
Dollar General
Dollar Tree Stores
Duckwall-ALCO Stores
Farmily Bargain
Family Dollar
50-Off Stores
Fred's
Good Guys
Hills
Home Shopping Network
L. Luria & Son
Lechters
Loehmann's Inc.
MacFrugal's Bargains
Melville Corp.
Meyer (Fred)
Montgomery Wards
99 Cents Only
Office Depot
OfficeMax
Pamida
Phar-Mor
Price Costco
Roberds
Ross Stores
S & K Famous Brands
Sears
Service Merchandise
ShopKo Stores
Staples
Tops Appliance City
Toys "R" Us
Tuesday Morning
Value City Dept. Stores
Venture
Waban
Wal-Mart Stores
Woolworth

<PAGE>   24
                                                                   EXHIBIT B

PURCHASE ORDER TERMS AND CONDITIONS

Vendor and Kmart Corporation, 3100 West Big Beaver Road, Troy, Michigan
48084-3163, ("Buyer") agree, to the fullest extent permitted by law, to be bound
by all terms and conditions contained or incorporated herein, all of which are a
part of each Purchase Order issued to Vendor by Buyer ("Order") and should be
carefully read. Any provisions in Vendor's invoices, billing statements,
acknowledgment forms or similar documents which are inconsistent with the
provision of an Order shall be of no force or effect. The cost price set forth
in each Order includes the cost of manufacturing, packaging, labeling and
shipping unless otherwise specified in the Order.

1.   Vendor's Acceptance. Vendor's commencement of or promise of shipment of
     the Merchandise shall constitute Vendor's agreement that it shall deliver
     the merchandise in accordance with the terms and conditions of the
     applicable Order. Vendor agrees to follow the shipping and invoicing
     instructions issued by Buyer's stores, warehouses, buying offices and
     Transportation and Accounting Department, which instructions are
     incorporated by referenced into the applicable Order.

2.   Vendor's Representations and Warranties. Vendor represents and warrants
     to buyer, in addition to all warranties implied by law, that each item of
     merchandise described on the face of an Order (or in an EDI or telephone
     Order), together with all related packaging and labeling and other material
     furnished by Vendor ("Merchandise"), shall: (a) be free from defects in
     design, workmanship and/or materials including, without limitation, such
     defects as could create a hazard to life or property; (b) conform in all
     respects with all applicable federal, state and local laws, orders and
     regulations, including, without limitation, those regarding (i) safety,
     (ii) content, (iii) flammability, (iv) weights, measurers and sizes, (v)
     special use, care, handling, cleaning or laundering instructions or
     warnings, (vi) processing, manufacturing, labeling, advertising, selling,
     shipping and invoicing, (vii) registration and declaration of
     responsibility, and (viii) occupational safety and health; (c) not infringe
     or encroach upon Buyer's or any third party's personal, contractual or
     proprietary rights, including, without limitation, patents, trademarks,
     copyrights, rights of privacy or trade secrets; and (d) conform to all of
     Buyer's specifications and to all articles shown to buyer as Merchandise
     samples.

3.   Vendor's Indemnification of Buyer. Vendor agrees to reimburse,
     indemnify, hold harmless and to defend at its expense (or to pay any
     attorney's fees incurred by Buyer) Buyer and its subsidiary and affiliate
     companies against all damage, loss, expense, claim, liability or penalty,
     including, without limitation, claims of infringement of patents,
     copyrights, trademarks, unfair competition, bodily injury, property or
     other damage, arising out of any use, possession, consumption or sale of
     said Merchandise and from any failure of Vendor to properly perform an
     Order. Vendor shall not be relieved of the foregoing indemnity and related
     obligations by allegations or any claim of negligence on the part of buyer;
     provided, however, Vendor shall not remain or be liable hereunder to the
     extent any injury or damage is finally judicially determined to have been
     proximately caused by the sole negligence of Buyer. Vendor shall obtain
     adequate insurance to cover such liability under each Order and shall
     provide copies of the applicable certificate(s) of insurance annually to
     Buyer's Vendor Database Department at the above address.

4.   Defective or Non-Conforming Merchandise. If any Merchandise is
     defective, unsuitable, does not conform to all terms hereof and of the
     Order and all warranties implied by law, Buyer may at its option return it
     to Vendor for full credit or refund of the purchase price or repair it at
     Vendor's expense, and may change Vendor such price or expenses and the cost
     of any incurred inbound and outbound freight and a handling, storage and
     inspection charge of 71/2% of the returned Merchandise invoice price. Buyer
     shall be under no duty to inspect any Merchandise before resale thereof,
     and resale, or repackaging or repackaging for the purpose of resale, shall
<PAGE>   25

     not constitute a waiver of, or otherwise limit, any of Buyer's
     rights resulting from defective or non-conforming Merchandise.

5.   Buyer's Right to Cancel. Buyer may without notice cancel, terminate
     and/or rescinding all or part of an Order in the event Vendor breaches or
     fails to perform any of its obligations in any material respect, or in the
     event Vendor becomes insolvent or proceedings are instituted by or against
     Vendor under any provision of any federal or state bankruptcy or insolvency
     laws or Vendor ceases its operation. Time is of the essence to each Order,
     and Vendor's failure to meet any delivery date shall constitute a material
     breach of the Order. Vendor agrees to inform Buyer immediately in writing
     or any failure to timely ship all or any part of an Order, and Buyer's
     acceptance of any merchandise after the applicable delivery date shall not
     constitute a waiver of, or otherwise limit, any of Buyer's rights resulting
     from the late delivery nor obligate Buyer to accept delivery of additional
     Merchandise under the order.

6.   Special Features. All Merchandise designs, patents and trade names which
     are supplied by Buyer to Vendor or which are distinctive of Buyer's private
     label merchandise ("Special Features") shall by the property of Buyer and
     shall be used by Vendor only for buyer. Buyer may use the Special Features
     on or with respect to goods manufactured by others and obtain legal
     protection for the Special Features including, without limitation, patents,
     patent designs, copyrights and trademarks. Merchandise with Special
     Features which is not delivered to Buyer for any reason shall not be sold
     or transferred to any third party without written authorization of Buyer
     and unless and until all labels, tags, packaging and markings identifying
     the Merchandise to Buyer have been removed.

7.   Deductions and Set Off. Any sums payable to Vendor shall be subject to
     all claims and defenses of Buyer, whether arising from this or any other
     transaction, and Buyer may set off and deduct against any such sums all
     present and future indebtedness of Vendor to Buyer. Buyer shall provide a
     copy of the deduction voucher(s) for debits taken by Buyer against Vendor's
     account as a result of any returns or adjustments. Vendor shall be deemed
     to have accepted each such deduction unless Vendor, within 90 days
     following receipt of the deduction voucher, notifies Buyer in writing as to
     why a deduction should not be made and provides documentation of the
     reason(s) given. Such written notice shall be directed to Buyer's Vendor
     Audit Department at the above address. Buyer shall not be liable to Vendor
     for any interest or late charges.

8.   Michigan Contract and Jurisdiction. EACH ORDER, AND ALL OTHER ASPECTS OF
     THE BUSINESS RELATIONSHIP BETWEEN BUYER AND VENDOR, SHALL BE CONSTRUED AND
     ENFORCED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF MICHIGAN.
     VENDOR AGREES, WITH RESPECT TO ANY LITIGATION WHICH RELATES TO ANY RODER OR
     WHICH OTHERWISE ARISES DIRECTLY OR INDIRECTLY OUT OF OR IN CONNECTION WITH
     SAID BUSINESS RELATIONSHIP RO ANY TRANSACTION OF ANY NATURE BETWEEN BUYER
     AND VENDOR, TO COMMENCE SAME: (I) EXCLUSIVELY IN (AND VENDOR HEREBY
     CONSENTS TO THE JURISDICTION OF) THE STATE OF MICHIGAN COURTS OF OAKLAND
     COUNTY, MICHIGAN OR THE UNITED STATES DISTRICT COURT IN DETROIT, MICHIGAN,
     AND (II) WITHIN 18 MONTHS FROM THE DATE OF BUYER'S LAST ORDER TO VENDOR OR
     THE PERIOD PRESCRIBED BY THE APPLICABLE STATUTE OF LIMITATIONS, WHICHEVER
     IS SOONER.

9.   Miscellaneous, (a) All rights granted to Buyer hereunder shall be in
     addition to and not in lieu of Buyer's rights arising by operation of law.
     (b) Any provisions of a hard copy Order which are typewritten or
     handwritten by Buyer shall supersede any contrary or inconsistent printed
     provisions therein. (c) No modification of terms of an Order shall be valid
     without the written authorization of Buyer. (d) Should any of the
     provisions of an Order be declared by a court of



<PAGE>   26

     competent jurisdiction to be invalid, such decision shall not affect the
     validity of any remaining provisions.

10.  Direct to Store and Distribution Center Invoice & Shipping Instructions.
     (a) Each invoice shall include Buyer's Order number, Vendor's
     stock/style number, and Buyer's code number for each item on the invoice.
     No substitutions of Merchandise shall be made without the written
     authorization of Buyer. (b) Each Order must be invoiced separately. (c) An
     Order may not be filed at a price higher than that shown on its face or
     transmitted without the written authorization of Buyer. (d) If freight
     costs are to be paid by buyer, Vendor shall ship via the method and/or
     route specified in the instructions provided by Buyer's Transportation
     Department, shall make ONE COMPLETE shipment of the Merchandise and shall
     NOT make PARTIAL shipments without the written authorization of Buyer. (e)
     Vendor shall make NO PACKAGE QUANTITY CHANGE on an Order without the
     written authorization of Buyer.

11.  Additional Distribution Center Shipping Instructions. (a) The
     applicable bill of lading must be delivered to the Distribution Center at
     time of Merchandise delivery. (b) Vendor shall mark the contents of each
     Distribution Center carton clearly on the outside of the carton, case, or
     package. (c) Merchandise not packaged or shipped in quantities ordered by
     Buyer shall at Buyer's option be returned to Vendor at Vendor's expense.
     Vendor shall be charged a handling charge of 7 1/2% of the Merchandise
     invoice price on all Merchandise not packaged or shipped as ordered.

12.  Merchandise Testing. Merchandise shall, at buyer's option, be subject
     to domestic or overseas testing. Vendor agrees to pay for all fees and
     costs associated with such testing (which fees and costs are set forth in
     Buyer's current Quality Assurance Manual or other documentation provided to
     Vendor). The testing of Vendor's Merchandise by or on behalf of Kmart is
     not a substitute for Vendor's own testing and other quality assurance
     related obligations in connection with its sale of Merchandise to Buyer,
     and such testing shall not limit Buyer's rights, or diminish or remove any
     of Vendor's responsibilities, hereunder including, without limitation,
     those relating to warranty and indemnification under Paragraphs 2 and 3
     above.

13.  Buyer Information/Orders. Buyer may at its discretion provide Vendor
     with certain confidential or proprietary information relating to Buyer's
     purchase and/or sale of Vendor's merchandise. Vendor acknowledges that such
     information, together with any other information of or pertaining to Buyer
     provided to Vendor by Buyer or learned by Vendor as a consequence of the
     business relationship between Buyer and Vendor (the "Buyer Information"),
     is provided and received in confidence, and Vendor shall at all times
     preserve and protect the confidentiality thereof. Vendor agrees to take all
     necessary steps to ensure that the Buyer Information shall not be disclosed
     to, or used by, any person, association or entity except Vendor's own
     employees having a need to know. BUYER MAKES NO WARRANTY WITH RESPECT TO
     THE BUYER INFORMATION OR THE ACCURACY OR COMPLETENESS THEREOF, ANDIS
     PROVIDING SAME ON AN "AS IS" BASIS; ALL IMPLIED WARRANTIES WITH RESPECT TO
     THE BUYER INFORMATION, INCLUDING THOSE OF MERCHANTABILITY AND FITNESS FOR A
     PARTICULAR PURPOSE, ARE EXCLUDED. Vendor acknowledges and agrees that any
     sales forecasts, quantity purchase estimates or similar projections
     received from Buyer are not purchase commitments of Buyer, but rather
     represent estimates for planning purposes only, and that the Buyer shall
     have no obligation to purchase or otherwise compensate Vendor for any of
     Vendor's finished products, or unfinished raw materials, not covered by an
     Order.

14.  Food Vendors. The following amendments to the above terms and
     conditions shall apply to any food products purchased from Vendor by Buyer
     (any other Merchandise purchased from Vendor by Buyer shall be governed by
     the foregoing, without amendment): (i) Paragraph 4 - delete "or repair it
     at Vendor's expense" in line 3 and delete "and a handling, storage and
     inspection charge of 7 1/2% of the returned Merchandise invoice price'
     starting in line 3 (ii) Paragraph 10 - delete
<PAGE>   27


     the remainder of (d) starting with ", shall make ONE COMPLETE..." starting
     in line 6; and (iii) Paragraph 12 - delete in its entirety.



<PAGE>   28

                                                                 EXHIBIT C

PURCHASE ORDER TERMS AND CONDITIONS

Vendor and Kmart Corporation, 3100 West Big Beaver Road, Troy, Michigan
48084-3163, ("Buyer") agree, to the fullest extent permitted by law, to be bound
by all terms and conditions contained or incorporated herein, all of which are a
part of each Purchase Order issued to Vendor by Buyer ("Order") and should be
carefully read. Any provisions in Vendor's invoices, billing statements,
acknowledgment forms or similar documents which are inconsistent with the
provision of an Order shall be of no force or effect. The cost price set forth
in each Order includes the cost of manufacturing, packaging, labeling and
shipping unless otherwise specified in the Order.

1.   Vendor's Acceptance. Vendor's commencement of or promise of shipment of
     the Merchandise shall constitute Vendor's agreement that it shall deliver
     the merchandise in accordance with the terms and conditions of the
     applicable Order. Vendor agrees to follow the shipping and invoicing
     instructions issued by Buyer's stores, warehouses, buying offices and
     Transportation and Accounting Department, which instructions are
     incorporated by referenced into the applicable Order.

2.   Vendor's Representations and Warranties. Vendor represents and warrants
     to buyer, in addition to all warranties implied by law, that each item of
     merchandise described on the face of an Order (or in an EDI or telephone
     Order), together with all related packaging and labeling and other material
     furnished by Vendor ("Merchandise"), shall: (a) be free from defects in
     design, workmanship and/or materials including, without limitation, such
     defects as could create a hazard to life or property; (b) conform in all
     respects with all applicable federal, state and local laws, orders and
     regulations, including, without limitation, those regarding (i) safety,
     (ii) content, (iii) flammability, (iv) weights, measurers and sizes, (v)
     special use, care, handling, cleaning or laundering instructions or
     warnings, (vi) processing, manufacturing, labeling, advertising, selling,
     shipping and invoicing, (vii) registration and declaration of
     responsibility, and (viii) occupational safety and health; (c) not infringe
     or encroach upon Buyer's or any third party's personal, contractual or
     proprietary rights, including, without limitation, patents, trademarks,
     copyrights, rights of privacy or trade secrets; and (d) conform to all of
     Buyer's specifications and to all articles shown to buyer as Merchandise
     samples.

3.   Vendor's Indemnification of Buyer. Vendor agrees to reimburse,
     indemnify, hold harmless and to defend at its expense (or to pay any
     attorney's fees incurred by Buyer) Buyer and its subsidiary and affiliate
     companies against all damage, loss, expense, claim, liability or penalty,
     including, without limitation, claims of infringement of patents,
     copyrights, trademarks, unfair competition, bodily injury, property or
     other damage, arising out of any use, possession, consumption or sale of
     said Merchandise and from any failure of Vendor to properly perform an
     Order. Vendor shall not be relieved of the foregoing indemnity and related
     obligations by allegations or any claim of negligence on the part of buyer;
     provided, however, Vendor shall not remain or be liable hereunder to the
     extent any injury or damage is finally judicially determined to have been
     proximately caused by the sole negligence of Buyer. Vendor shall obtain
     adequate insurance to cover such liability under each Order and shall
     provide copies of the applicable certificate(s) of insurance annually to
     Buyer's Vendor Database Department at the above address.

4.   Defective or Non-Conforming Merchandise. If any Merchandise is defective, 
     unsuitable, does not conform to all terms hereof and of the Order and
     all warranties implied by law, Buyer may at its option return it to Vendor
     for full credit or refund of the purchase price or repair it at Vendor's
     expense, and may change Vendor such price or expenses and the cost of any
     incurred inbound and outbound freight and a handling, storage and
     inspection charge of 71/2% of the returned Merchandise invoice price.
     Buyer shall be under no duty to inspect any Merchandise before resale
     thereof, and resale, or repackaging or repackaging for the purpose of
     resale, shall

<PAGE>   29

     not constitute a waiver of, or otherwise limit, any of Buyer's rights
     resulting from defective or non-conforming Merchandise.

5.   Buyer's Right to Cancel. Buyer may without notice cancel, terminate
     and/or rescinding all or part of an Order in the event Vendor breaches or
     fails to perform any of its obligations in any material respect, or in the
     event Vendor becomes insolvent or proceedings are instituted by or against
     Vendor under any provision of any federal or state bankruptcy or insolvency
     laws or Vendor ceases its operation. Time is of the essence to each Order,
     and Vendor's failure to meet any delivery date shall constitute a material
     breach of the Order. Vendor agrees to inform Buyer immediately in writing
     or any failure to timely ship all or any part of an Order, and Buyer's
     acceptance of any merchandise after the applicable delivery date shall not
     constitute a waiver of, or otherwise limit, any of Buyer's rights resulting
     from the late delivery nor obligate Buyer to accept delivery of additional
     Merchandise under the order.

6.   Special Features. All Merchandise designs, patents and trade names which
     are supplied by Buyer to Vendor or which are distinctive of Buyer's private
     label merchandise ("Special Features") shall by the property of Buyer and
     shall be used by Vendor only for buyer. Buyer may use the Special Features
     on or with respect to goods manufactured by others and obtain legal
     protection for the Special Features including, without limitation, patents,
     patent designs, copyrights and trademarks. Merchandise with Special
     Features which is not delivered to Buyer for any reason shall not be sold
     or transferred to any third party without written authorization of Buyer
     and unless and until all labels, tags, packaging and markings identifying
     the Merchandise to Buyer have been removed.

7.   Deductions and Set Off. Any sums payable to Vendor shall be subject to
     all claims and defenses of Buyer, whether arising from this or any other
     transaction, and Buyer may set off and deduct against any such sums all
     present and future indebtedness of Vendor to Buyer. Buyer shall provide a
     copy of the deduction voucher(s) for debits taken by Buyer against Vendor's
     account as a result of any returns or adjustments. Vendor shall be deemed
     to have accepted each such deduction unless Vendor, within 90 days
     following receipt of the deduction voucher, notifies Buyer in writing as to
     why a deduction should not be made and provides documentation of the
     reason(s) given. Such written notice shall be directed to Buyer's Vendor
     Audit Department at the above address. Buyer shall not be liable to Vendor
     for any interest or late charges.

8.    Michigan Contract and Jurisdiction. EACH ORDER, AND ALL OTHER ASPECTS OF
     THE BUSINESS RELATIONSHIP BETWEEN BUYER AND VENDOR, SHALL BE CONSTRUED AND
     ENFORCED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF MICHIGAN.
     VENDOR AGREES, WITH RESPECT TO ANY LITIGATION WHICH RELATES TO ANY RODER OR
     WHICH OTHERWISE ARISES DIRECTLY OR INDIRECTLY OUT OF OR IN CONNECTION WITH
     SAID BUSINESS RELATIONSHIP RO ANY TRANSACTION OF ANY NATURE BETWEEN BUYER
     AND VENDOR, TO COMMENCE SAME: (I) EXCLUSIVELY IN (AND VENDOR HEREBY
     CONSENTS TO THE JURISDICTION OF) THE STATE OF MICHIGAN COURTS OF OAKLAND
     COUNTY, MICHIGAN OR THE UNITED STATES DISTRICT COURT IN DETROIT, MICHIGAN,
     AND (II) WITHIN 18 MONTHS FROM THE DATE OF BUYER'S LAST ORDER TO VENDOR OR
     THE PERIOD PRESCRIBED BY THE APPLICABLE STATUTE OF LIMITATIONS, WHICHEVER
     IS SOONER.

9.   Miscellaneous, (a) All rights granted to Buyer hereunder shall be in
     addition to and not in lieu of Buyer's rights arising by operation of law.
     (b) Any provisions of a hard copy Order which are typewritten or
     handwritten by Buyer shall supersede any contrary or inconsistent printed
     provisions therein. (c) No modification of terms of an Order shall be valid
     without the written authorization of Buyer. (d) Should any of the 
     provisions of an Order be declared by a court of

<PAGE>   30

     competent jurisdiction to be invalid, such decision shall not affect the   
     validity of any remaining provisions.

10.  Direct to Store and Distribution Center Invoice & Shipping
     Instructions. (a) Each invoice shall include Buyer's Order number, Vendor's
     stock/style number, and Buyer's code number for each item on the invoice.
     No substitutions of Merchandise shall be made without the written
     authorization of Buyer. (b) Each Order must be invoiced separately. (c) An
     Order may not be filed at a price higher than that shown on its face or
     transmitted without the written authorization of Buyer. (d) If freight
     costs are to be paid by buyer, Vendor shall ship via the method and/or
     route specified in the instructions provided by Buyer's Transportation
     Department, shall make ONE COMPLETE shipment of the Merchandise and shall
     NOT make PARTIAL shipments without the written authorization of Buyer. (e)
     Vendor shall make NO PACKAGE QUANTITY CHANGE on an Order without the
     written authorization of Buyer.

11.  Additional Distribution Center Shipping Instructions. (a) The
     applicable bill of lading must be delivered to the Distribution Center at
     time of Merchandise delivery. (b) Vendor shall mark the contents of each
     Distribution Center carton clearly on the outside of the carton, case, or
     package. (c) Merchandise not packaged or shipped in quantities ordered by
     Buyer shall at Buyer's option be returned to Vendor at Vendor's expense.
     Vendor shall be charged a handling charge of 7 1/2% of the Merchandise
     invoice price on all Merchandise not packaged or shipped as ordered.

12.  Merchandise Testing. Merchandise shall, at buyer's option, be subject
     to domestic or overseas testing. Vendor agrees to pay for all fees and
     costs associated with such testing (which fees and costs are set forth in
     Buyer's current Quality Assurance Manual or other documentation provided to
     Vendor). The testing of Vendor's Merchandise by or on behalf of Kmart is
     not a substitute for Vendor's own testing and other quality assurance
     related obligations in connection with its sale of Merchandise to Buyer,
     and such testing shall not limit Buyer's rights, or diminish or remove any
     of Vendor's responsibilities, hereunder including, without limitation,
     those relating to warranty and indemnification under Paragraphs 2 and 3
     above.

13.  Buyer Information/Orders. Buyer may at its discretion provide Vendor
     with certain confidential or proprietary information relating to Buyer's
     purchase and/or sale of Vendor's merchandise. Vendor acknowledges that such
     information, together with any other information of or pertaining to Buyer
     provided to Vendor by Buyer or learned by Vendor as a consequence of the
     business relationship between Buyer and Vendor (the "Buyer Information"),
     is provided and received in confidence, and Vendor shall at all times
     preserve and protect the confidentiality thereof. Vendor agrees to take all
     necessary steps to ensure that the Buyer Information shall not be disclosed
     to, or used by, any person, association or entity except Vendor's own
     employees having a need to know. BUYER MAKES NO WARRANTY WITH RESPECT TO
     THE BUYER INFORMATION OR THE ACCURACY OR COMPLETENESS THEREOF, ANDIS
     PROVIDING SAME ON AN "AS IS" BASIS; ALL IMPLIED WARRANTIES WITH RESPECT TO
     THE BUYER INFORMATION, INCLUDING THOSE OF MERCHANTABILITY AND FITNESS FOR A
     PARTICULAR PURPOSE, ARE EXCLUDED. Vendor acknowledges and agrees that any
     sales forecasts, quantity purchase estimates or similar projections
     received from Buyer are not purchase commitments of Buyer, but rather
     represent estimates for planning purposes only, and that the Buyer shall
     have no obligation to purchase or otherwise compensate Vendor for any of
     Vendor's finished products, or unfinished raw materials, not covered by an
     Order.

14.  Food Vendors. The following amendments to the above terms and
     conditions shall apply to any food products purchased from Vendor by Buyer
     (any other Merchandise purchased from Vendor by Buyer shall be governed by
     the foregoing, without amendment): (i) Paragraph 4 - delete "or repair it
     at Vendor's expense" in line 3 and delete "and a handling, storage and
     inspection charge of 7 1/2% of the returned Merchandise invoice price'
     starting in line 3 (ii) Paragraph 10 - delete

<PAGE>   31

     the remainder of (d) starting with ", shall make ONE COMPLETE..." starting
     in line 6; and (iii) Paragraph 12 - delete in its entirety.



<PAGE>   32


                                                    KMART CORPORATION
                                                    International Headquarters
                                                    3100 West Big Beaver Road
                                                    Troy, MI 48084-3163


_________________ 19____

Dear Sir/Madam:

This letter will confirm that the Purchase Order Terms and Conditions on the
reverse side hereof (the "Terms") shall apply to all purchase orders issued to
Vendor by Kmart, whether by telephone, hard copy, electronically or otherwise.
Please note that the instructions in item 11 of the Terms are applicable to
Distribution Center.

Receipt of this confirmation is REQUIRED before Vendor will be authorized to
receive purchase orders from Kmart Corporation.

Please have the chairman, president or a vice president of Vendor confirm that
the Terms will apply to all Kmart orders issued to Vendor by signing and
returning one original of this letter (WITH NO CHANGES OF ANY KIND) to the
address below no later than 7 business days from the above date. Retain the
other original or a copy for your files. This letter must be signed by the
Company which is paid by Kmart.

Very truly yours,
Kmart Corporation



----------------------------------  -------------------------------------------
Signature                           Registered Legal Name of Vendor

----------------------------------  -------------------------------------------
Title                               Address


                                    -------------------------------------------
                                    City         State         Zip


                                    -------------------------------------------
                                    Vendor Officer Signature
                                    (Chairman, President or Vice President only)


                                    -------------------------------------------
                                    Print Name


                                    -------------------------------------------
                                    Title
RETURN TO:
ATTN
    -----------------------------
KMART CORPORATION
3100 WEST BIG BEAVER ROAD
TROY MI 48084-3163



<PAGE>   33


                                                                 EXHIBIT D


THIS ORDER CONTRACT IS UPON THE FOLLOWING TERMS AND CONDITIONS:

1.   Seller's commencement of or promise of shipment of the Merchandise shall
     constitute Seller's agreement that it will deliver the Merchandise in
     accordance with the terms and conditions contained or incorporated herein,
     all of which are a part of the Order Contract and should be carefully read.
     Any provisions in Seller's invoices, billing statements, acknowledgment
     forms or other documents which are inconsistent with the provisions of this
     Order Contract shall be of no force or effect.

2.   Seller represents and warrants to Kmart Corporation ("Buyer"), in
     addition to all warranties implied by law, that each item of Merchandise
     described on the face hereof, together with all retail packaging, labeling
     and other material furnished by Seller ("Merchandise"), shall (a) be free
     from defects in design, workmanship or materials, including, without
     limitation, such defects as could create a hazard to life or property; (b)
     conform in all respects with all applicable federal, state and local laws,
     orders and regulations, including, without limitation, those concerning the
     marking of the country of origin, fiber content, care labeling and
     shrinkage, as Merchandise not in compliance and not properly marked is
     subject to heavy penalty; (c) not infringe or encroach upon Buyer's or any
     third party's personal, contractual or propriety rights, including, without
     limitation, patents, trademarks, trade names, copyrights, rights of privacy
     or trade secrets; and (d) conform to all of Buyer's specifications and to
     all articles shown to Buyer as Merchandise samples. Seller further
     represents and warrants that it has ascertained that no child, forced or
     prison labor is utilized in the manufacture of Merchandise.

3.   Seller agrees to reimburse, indemnify, hold harmless and defend at
     Seller's expense (or pay any attorney's fees incurred by Buyer) Buyer and
     its subsidiary and affiliate companies against all damage, loss, expense,
     claim, liability, fine, settlement or penalty, including, without
     limitation, claims of infringement of patents, copyrights and trademarks,
     unfair competition, bodily injury, or property or other damage arising out
     of any use, possession, consumption or sale of the Merchandise or failure
     to provide complete, accurate and acceptable (to U.S. Customs) information
     and documentation relating to, without limitation, the country of origin,
     or failure of Seller to perform promptly this Order Contract. Seller shall
     obtain adequate insurance to cover its liability under this Order Contract
     and shall provide copies of the applicable certificate(s) of insurance to
     Buyer.

4.   Acceptance of Merchandise by Buyer after inspection does not release or
     discharge Seller from any liability for damages or from any other remedy of
     Buyer for Seller's breach of any promise or warranty, expressed or implied.
     This Order Contract may at Buyer's option be deemed cancelled if the
     Merchandise ordered herein is not covered by a full set of "Clean" "On
     Board" Ocean Bills of Lading and Buyer's Inspection Certificate dated on or
     before the shipping date specified on the face hereof. Any such
     cancellation shall be without prejudice to all other rights and remedies
     accruing to Buyer by reason of Seller's breach, unless a written extension
     of shipping date(s) was previously granted in writing to Seller by Buyer.
     If any of the terms, conditions or warranties of or underlying this Order
     Contract, express or implied, are not strictly complied with by Seller with
     respect to any shipment or installment shipment of the Merchandise ordered
     herein. Buyer has the right, in addition to all other rights and remedies
     accruing to Buyer by reason of Seller's breach, to refuse to accept any or
     all deliveries of Merchandise ordered herein, but any acceptance by Buyer
     of any such singular shipment or installment shipment shall not be deemed
     (whether or not buyer notifies Seller of its demand for strict compliance
     with respect to future shipment installments) a waiver by Buyer of any of
     its rights to refuse any future shipments hereunder or of any other rights
     or remedies.
<PAGE>   34

5.   All merchandise design, patents and trademarks which are supplied by
     Buyer to Seller or which are distinctive of Buyer's private label
     merchandise ("Special Features") shall be the property of Buyer and shall
     be used by seller only for buyer. Buyer may use the Special Features on or
     with respect to goods manufactured by others and obtain legal protection
     for the Special Features including, without limitation, patents, design
     patents, copyrights and trademarks. Merchandise which is not delivered to
     Buyer for any reason shall not be sold or transferred to any third party
     without written authorization of Buyer and unless all labels, tags,
     packaging and markings identifying the merchandise to Buyer have been
     removed.

6.   THIR ORDER CONTRACT SHALL BE CONSTRUED AND ENFORCED UNDER AND IN
     ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF MICHIGAN, ANYUNSETTLED
     DISPUTE HEREUNDER WHERE THE AMOUNT IN CONTROVERSY IS LESS THAN OR EQUALS
     $50,000 (U.S.) SHALL BE FINALLY SETTLED BY ARBITRATION, HELD IN THEUNTID
     STATES OF AMERICA AT DETROIT, MICHIGAN AND CONDUCTED IN ACCORDANCE WITH THE
     RULES OF THE AMERICAN ARBITRATION ASSOCIATION. JUDGMENT UPON ANY
     ARBITRATION AWARD RENDERED, IF NO SATISFIED WITHIN NINETY (90) DAYS, MAY
     BE, ENTERED IN ANY COURT HAVING JURISDICTION, OR APPLICATION MAY BE MADE TO
     ANYSUCH COURT FOR A JUDICIAL RECOGNITION, ACCEPTANCE AND ORDER OF
     ENFORCEMENT, AS THE CASE MAY BE, IN ANY UNSETTLED DISPUTE HEREUNDER WHERE
     THE AMOUNT IN CONTROVERSY EXCEEDS $50,000 (U.S.), IT IS HEREBY MUTALLY
     AGREED THAT SELLER SHALL EXERCISE ANY RIGHT OR REMEDY EXCLUSIVELY IN, AND
     HEREBY CONSENTS TO THE JURISDICTIONOF, THE UNITED STATES DISTRICT COURT IN
     DETROIT, MICHIGAN.

7.   (a) All rights granted to Buyer hereunder shall be in addition to and
     not in lieu of buyer's rights arising by operation of law; (b) any
     provision of this Order Contract which are typewritten or handwritten by
     Buyer shall supersede any contrary or inconsistent printed provisions; (c)
     no modification of terms of this Order Contract shall be valid, including,
     without limitation, price increase, unless in writing and signed by Buyer;
     (d) should any of the provisions of this Order Contract be declared by a
     court of competent jurisdiction to be invalid, such decision shall not
     affect the validity of any remaining provisions; (e) all of the terms
     herein shall apply to additional quantities of merchandise ordered by Buyer
     except to the extent covered by a new written agreement; and (f) all
     documents prepared in connection with this Order Contract must be written
     in the English language and in the U.S. currency figures.

8.   Neither this Order Contract nor any right, duty or obligation hereunder
     is assignable without the prior written consent of Buyer, nor shall Buyer
     be under any obligation to recognize any assignment of monies payable
     hereunder.

9.   Seller agrees to prepare and produce all documents which are necessary
     for the Merchandise to clear U.S. Customs and which are otherwise required
     by applicable laws or regulations, the Letter of Credit or instructions set
     forth on the face hereof.

10.  All shipping cartons are to be marked and packed in accordance with
     Buyer's International Department Standard Instructions To Foreign Shippers,
     which Standard Instructions are part of and are incorporated in this Order
     Contract by this reference, in addition, Seller agrees to follow any
     shipping instructions issued directly to Seller by Buyer's International
     Department.

11.  Without in any way limiting buyer's other rights and remedies arising
     under paragraph 2 above, Seller agrees that any Merchandise, packaging or
     component that (1) mis-states the true country of origin, or (2) is made in
     whole or in part by child or prison labor, will be a material breach of
     this Order Contract resulting in cancellation of this Order contract and
     liability of Seller to Buyer for liquidated damages equal to the total FOB
     Factory costs of the Merchandise plus all freight,

<PAGE>   35

     import/export charges and other costs incurred for the shipment or return
     (or destruction at Buyer's election) of seized or re-delivered Merchandise.

12.  Except for the right to receive payment, Seller hereby assigns all of
     its rights (expressed and implied) under any purchase order Seller issues
     to a manufacturer for merchandise or any component thereof covered by this
     Order Contract including, without limitation, rights of warranty and
     indemnification, and Seller shall cooperate fully with Buyer in pursuing
     such rights. Buyer is not assuming, nor shall this purchase order be
     construed to impose, any obligation on the part of Buyer to a manufacturer
     in connection with the Merchandise. This partial assignment shall not act
     to limit Buyer's rights and remedies elsewhere under this Order Contract.

13.  Merchandise shall, at Buyer's option, be subject to domestic or
     overseas testing. Seller agrees to pay for all fees and costs associated
     with such testing (which fees and costs are set forth in Buyer's current
     Quality Assurance Manual or other documentation provided to Seller). The
     testing of Seller's Merchandise by, or on behalf of, Kmart is not a
     substitute for Seller's own testing and other quality assurance related
     obligations in connection with its sale of Merchandise to buyer, and such
     testing shall not limit Buyer's rights, or diminish or remove any of
     Seller's responsibilities, hereunder including, without limitation, those
     relating to warranty and indemnification under Paragraphs 2 and 3 above.

                  Address All Correspondence
                  Regarding This order Contract to:  Kmart Corporation
                                                     International Department
                                                     3100 West Big Beaver Road
                                                     Troy MI  48084-3163


<PAGE>   36


                                                  KMART CORPORATION
                                                  International Headquarters
                                                  3100 West Big Beaver Road
                                                  Troy, MI 48084-3163


_________________ 19____

Dear Sir/Madam:

This letter will confirm that the Purchase Order Terms and Conditions on the
reverse side hereof (the "Terms") shall apply to all purchase orders issued to
Vendor by Kmart, whether by telephone, hard copy, electronically or otherwise.
Please note that the instructions in item 11 of the Terms are applicable to
Distribution Center.

Receipt of this confirmation is REQUIRED before Vendor will be authorized to
receive purchase orders from Kmart Corporation.

Please have the chairman, president or a vice president of Vendor confirm that
the Terms will apply to all Kmart orders issued to Vendor by signing and
returning one original of this letter (WITH NO CHANGES OF ANY KIND) to the
address below no later than 7 business days from the above date. Retain the
other original or a copy for your files. This letter must be signed by the
Company which is paid by Kmart.

Very truly yours,
Kmart Corporation




----------------------------------  -------------------------------------------
Signature                           Registered Legal Name of Vendor

----------------------------------  -------------------------------------------
Title                               Address


                                    -------------------------------------------
                                    City         State         Zip


                                    -------------------------------------------
                                    Vendor Officer Signature
                                    (Chairman, President or Vice President only)


                                    -------------------------------------------
                                    Print Name


                                    -------------------------------------------
                                    Title
RETURN TO:
ATTN
    ------------------------------
KMART CORPORATION
3100 WEST BIG BEAVER ROAD
TROY MI 48084-3163

<PAGE>   37






                                   EXHIBIT E

                      AUTHORIZED REPRESENTATIVES OF KMART



Senior Vice President General Merchandise Manager, Hardlines
Divisional Vice President, Merchandising Hardlines
Buyer, Appliances, Music, Electronics



