EXHIBIT 99.2
EXECUTION COPY
WAIVER AND CONSENT UNDER AMENDED AND RESTATED CREDIT AGREEMENT
THIS WAIVER AND CONSENT UNDER AMENDED AND RESTATED CREDIT AGREEMENT (this
"Waiver") is made and entered into as of September 16, 2005, by and among the
financial institutions identified on the signature pages hereof (such financial
institutions, together with their respective successors and assigns, are
referred to hereinafter each individually as a "Lender" and collectively as the
"Lenders"), XXXXX FARGO FOOTHILL, INC., a California corporation, as
administrative agent and collateral agent for the Lenders (in such capacities,
together with any successor administrative agent and collateral agent, the
"Agent"), SILVER POINT FINANCE, LLC, as the co-agent, syndication agent,
documentation agent (in such capacities, together with any successor co-agent,
syndication agent, and documentation agent, the "Co-Agent"), arranger and book
runner, SALTON, INC., a Delaware corporation (the "Parent"), each of the
Parent's Subsidiaries identified on the signature pages hereof as Borrowers
(collectively with the Parent, the "Borrowers") and each of the Parent's
Subsidiaries identified on the signature pages hereof as Guarantors
(collectively, the "Guarantors" and, together with the Borrowers, the "Borrower
Parties").
WITNESSETH:
WHEREAS, the Lenders, the Agent, the Co-Agent, and the Borrower Parties
are parties to that certain Amended and Restated Credit Agreement, dated as of
May 9, 2003 and amended and restated as of June 15, 2004 (as amended as of
August 30, 2004, as amended as of May 11, 2005, as amended as of July 8, 2005,
and as it may be further amended, modified, supplemented or amended and restated
from time to time, the "Credit Agreement");
WHEREAS, Parent, as the seller, SAH Acquisition Corp., as the buyer (the
"Buyer"), and Lifetime Brands, Inc., as the parent of the Buyer, have entered
into an Asset Purchase Agreement dated as of September 15, 2005 (a copy of which
is attached as Annex A hereto, the "Tabletop Asset Sale Agreement"), pursuant to
which Parent has agreed to sell (the "Tabletop Asset Sale") the "Acquired
Assets" (as defined in the Tabletop Asset Sale Agreement in the form attached
attached as Annex A hereto without any amendment or modification thereof, the
"Sold Tabletop Assets") to Buyer for a purchase price (the "Purchase Price") of
approximately $14,200,000;
WHEREAS, absent a waiver from the Agent, the Co-Agent and the Required
Lenders, the consummation of the Tabletop Asset Sale would violate Section 7.9
of the Credit Agreement;
WHEREAS, the Borrower Parties have requested, and the Agent, the Co-Agent
and the Required Lenders have agreed, subject to the terms and conditions
herein, to the waiver and release of security interest set forth herein in
connection with the Tabletop Asset Sale;
WHEREAS, Section 7.22 of the Credit Agreement required that the Borrowers
not fail to maintain or achieve EBITDA for the 12-month period ending July 31,
2005 of at least $7,932,000 (the "July 2005 EBITDA Threshold");
WHEREAS, the Borrowers' actual EBITDA for the 12-month period ending July
31, 2005 was less than the July EBITDA Threshold (the "Section 7.22 Default");
WHEREAS, the Borrowers have requested, and the Agent, the Co-Agent and the
Lenders have agreed, to waive the Section 7.22 Default subject to the terms and
conditions set forth herein;
WHEREAS, Section 7.24 of the Credit Agreement required that the Borrowers
not fail to maintain or achieve a Consolidated Fixed Charge Coverage Ratio for
the 12-month period ending July 31, 2005 of at least 0.48:1.00 (the "July 2005
CFCC Threshold");
WHEREAS, the Borrowers' actual Consolidated Fixed Charge Coverage Ratio
for the 12-month period ending July 31, 2005 was less than the July 2005 CFCC
Threshold (the "Section 7.24 Default"); and
WHEREAS, the Borrowers have requested, and the Agent, the Co-Agent and the
Lenders have agreed, to waive the Section 7.24 Default subject to the terms and
conditions set forth herein;
NOW, THEREFORE, in consideration of the agreements and provisions herein
contained, the parties hereto do hereby agree as follows:
SECTION 1. DEFINITIONS. Any capitalized terms used but not otherwise defined
herein shall have the meanings ascribed to such terms in the Credit Agreement.
SECTION 2. WAIVER. Subject to the satisfaction of the terms and conditions set
forth herein, the Agent, the Co-Agent and the Required Lenders hereby agree to
waive (a) the Loan Parties' compliance with Section 7.9 of the Credit Agreement
solely insofar as such Section would prohibit the Loan Parties from consummating
the Tabletop Asset Sale on the terms set forth in the Tabletop Asset Sale
Agreement, (b) the Section 7.22 Default solely with respect to the 12-month
period ending July 31, 2005 and (c) the Section 7.24 Default solely with respect
to the 12-month period ending July 31, 2005.
SECTION 3. RELEASE OF SECURITY INTEREST. Subject to the satisfaction of the
terms and conditions set forth herein, the Agent, the Co-Agent and the Required
Lenders hereby agree to release, without recourse and without any representation
or warranty of any kind, the security interest in the Sold Tabletop Assets
granted pursuant to the Security Agreement, the Copyright Security Agreement and
the Patent and Trademark Security Agreement, immediately following the
application of the proceeds of the Tabletop Asset Sale in accordance with
Section 5.03 (it being understood and agreed that this Section 3 shall in no way
effect any release of any lien or security interest in any Collateral other than
in the Sold Tabletop Assets pursuant hereto). The Borrower Parties hereby
release the Agent, the Co-Agent and the Lenders from any duty, liability or
obligation (if any) under any Loan Document in respect of the Sold Tabletop
Assets.
SECTION 4. REPRESENTATIONS AND WARRANTIES. In order to induce the Agent, the
Co-Agent and the Lenders to enter into this Waiver, the Borrower Parties hereby
represent and warrant that:
2
4.01 NO DEFAULT. At and as of the date of this Waiver (after giving effect
to this Waiver), no Default or Event of Default exists.
4.02 REPRESENTATIONS AND WARRANTIES TRUE AND CORRECT. At and as of the
date of this Waiver and both prior to (other than with respect to the Section
7.22 Default and the Section 7.24 Default) and after giving effect to this
Waiver, each of the representations and warranties contained in the Credit
Agreement and other Loan Documents is true and correct in all material respects.
4.03 CORPORATE POWER, ETC. The Borrower Parties (a) have all requisite
corporate power and authority to execute and deliver this Waiver and to
consummate the transactions contemplated hereby and (b) have taken all action,
corporate or otherwise, necessary to authorize the execution and delivery of
this Waiver and the consummation of the transactions contemplated hereby.
4.04 NO CONFLICT. Neither the execution and delivery of this Waiver nor
consummation of the transactions contemplated hereby will (a) conflict with or
result in any breach or violation of any provision of the certificate of
incorporation, certificate of formation or by-laws of the Borrower Parties, (b)
result in any breach or violation of, or constitute a default (or an event
which, with notice or lapse of time or both, would constitute a default) under,
or result in the termination of, or accelerate the performance required by, or
result in the creation of a Lien upon any of the properties or assets of the
Borrower Parties under, any of the terms, conditions or provisions of any note,
bond, mortgage, indenture, deed of trust, license, lease agreement or other
instrument or obligation to which the Borrower Parties are parties or to which
any of their properties or assets are subject, (c) require any consent,
approval, authorization or permit of, or filing with or notification to, any
third party or any Governmental Authority, or (d) violate any order, writ,
injunction, decree, judgment, ruling, law, statute, rule or regulation of any
Governmental Authority.
4.05 BINDING EFFECT. This Waiver has been duly executed and delivered by
the Borrower Parties and constitutes the legal, valid and binding obligation of
the Borrower Parties, enforceable against the Borrower Parties in accordance
with its terms, except as such enforceability may be limited by (a) applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws, now or
hereafter in effect, relating to or affecting the enforcement of creditors'
rights generally, and (b) the application of general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at law).
SECTION 5. CONDITIONS. This Waiver shall be effective upon the fulfillment by
the Borrower Parties, in a manner satisfactory to the Co-Agent, the Agent and
the Required Lenders, of all of the following conditions precedent set forth in
this Section 5 (such date, the "Effective Date"):
5.01 EXECUTION OF THE WAIVER. Each of the parties hereto shall have
executed an original counterpart of this Waiver and shall have delivered
(including by way of telefacsimile or electronic mail) the same to the Co-Agent
and the Agent.
5.02 TABLETOP ASSET SALE DOCUMENTS. The Borrower Parties shall have
delivered to the Co-Agent and the Agent true and complete copies of the Tabletop
Asset Sale Agreement and all other documents relating to the Tabletop Asset
Sale, and such documents shall be in form and substance satisfactory to the
Co-Agent and the Agent.
3
5.03 PURCHASE PRICE; APPLICATION OF PROCEEDS. The Tabletop Asset Sale
shall have been consummated and the Purchase Price received by Parent shall be
at least equal to $14,200,000 (subject to adjustment in accordance with the
Tabletop Asset Sale Agreement), and proceeds of the Tabletop Asset Sale in the
amount of $13,442,348 shall be wire transferred on the date hereof to the
non-interest bearing account of the Agent specified in Schedule A hereto and the
balance of the Purchase Price, in respect of in-transit inventory, will also be
wire transferred to such account when received by Parent in accordance with the
terms of the Tabletop Asset Sale Agreement (it being understood and agreed that,
notwithstanding Section 3.1(c) of the Credit Agreement, the Agent shall hold all
such proceeds in the account specified in Schedule A hereto until the Agent, the
Co-Agent, the Required Lenders and the Borrower Parties have reached a mutual
agreement as to how such proceeds shall be applied to the Loans).
5.04 DELIVERY OF OTHER DOCUMENTS. The Co-Agent and the Agent shall have
received all such other instruments, documents and agreements as the Co-Agent or
the Agent may reasonably request, in form and substance reasonably satisfactory
to the Co-Agent and the Agent.
5.05 REPRESENTATIONS AND WARRANTIES. As of the Effective Date, the
representations and warranties set forth in Section 4 hereof shall be true and
correct.
SECTION 6. MISCELLANEOUS.
6.01 CONTINUING EFFECT. Except as specifically provided herein, the Credit
Agreement and the other Loan Documents shall remain in full force and effect in
accordance with their respective terms and are hereby ratified and confirmed in
all respects.
6.02 NO WAIVER; RESERVATION OF RIGHTS. This Waiver is limited as specified
and the execution, delivery and effectiveness of this Waiver shall not operate
as a modification, acceptance or waiver of any provision of the Credit Agreement
or any other Loan Document, except as specifically set forth herein.
Notwithstanding anything contained in this Waiver to the contrary, the Agent,
the Co-Agent and the Lenders expressly reserve the right to exercise any and all
of their rights and remedies under the Credit Agreement, any other Loan Document
and applicable law in respect of any Default or Event of Default.
6.03 GOVERNING LAW. THIS WAIVER, AND ALL MATTERS ARISING OUT OF OR
RELATING TO THE SUBJECT MATTER HEREOF, SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
6.04 SEVERABILITY. The provisions of this Waiver are severable, and if any
clause or provision shall be held invalid or unenforceable in whole or in part
in any jurisdiction, then such invalidity or unenforceability shall affect only
such clause or provision, or part thereof, in such jurisdiction and shall not in
any manner affect such clause or provision in any other jurisdiction, or any
other clause or provision in this Waiver in any jurisdiction.
6.05 COUNTERPARTS. This Waiver may be executed in any number of
counterparts, each of which counterparts when executed and delivered shall be an
original, but all of which shall together constitute one and the same
instrument. Delivery of an executed counterpart of this Waiver by telefacsimile
or electronic mail shall be equally effective as delivery of a manually executed
4
counterpart. A complete set of counterparts shall be lodged with the Borrower
Parties, the Agent, the Co-Agent and each Lender.
6.06 HEADINGS. Section headings in this Waiver are included herein for
convenience of reference only and shall not constitute a part of this Waiver for
any other purpose.
6.07 BINDING EFFECT; ASSIGNMENT. This Waiver shall be binding upon and
inure to the benefit of the Borrower Parties, the Agent, the Co-Agent and the
Lenders and their respective successors and assigns; provided, however, that the
rights and obligations of the Borrower Parties under this Waiver shall not be
assigned or delegated without the prior written consent of the Agent, the
Co-Agent and the Lenders.
6.08 EXPENSES. The Borrowers agree to pay the Agent and Co-Agent upon
demand, for all reasonable expenses, including reasonable fees of attorneys and
paralegals for the Agent, the Co-Agent and the Lenders (who may be employees of
the Agent, Co-Agent or the Lenders), incurred by the Agent, the Co-Agent and the
Lenders in connection with the preparation, negotiation and execution of this
Waiver and any document required to be furnished herewith.
6.09 INTEGRATION. This Waiver, together with the other Loan Documents,
incorporates all negotiations of the parties hereto with respect to the subject
matter hereof and is the final expression and agreement of the parties hereto
with respect to the subject matter hereof.
6.10 FURTHER ASSURANCES. The Agent and the Co-Agent agree, and the
Required Lenders hereby authorize the Agent and the Co-Agent, to execute and
deliver, at the sole cost and expense of the Borrower Parties, such further
instruments and documents as may be reasonably necessary to carry out the
purpose and intent of Section 3 hereof.
[Signature pages follow]
5
IN WITNESS WHEREOF, the parties hereto have caused this Waiver to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.
BORROWERS:
SALTON, INC., a Delaware corporation
By: _____________________________________
Title: __________________________________
TOASTMASTER INC., a Missouri corporation
By: _____________________________________
Title: __________________________________
SALTON TOASTMASTER LOGISTICS
LLC, a Delaware limited liability company
By: _____________________________________
Title: __________________________________
GUARANTORS:
HOME CREATIONS DIRECT, LTD.,
a Delaware corporation
By: _____________________________________
Title: __________________________________
SONEX INTERNATIONAL CORPORATION,
a Delaware corporation
By: _____________________________________
Title: __________________________________
[SIGNATURE PAGE OF WAIVER]
ICEBOX, LLC, an Illinois limited
liability company
By: _____________________________________
Title: __________________________________
FAMILY PRODUCTS INC., a Delaware
corporation
By: _____________________________________
Title: __________________________________
SALTON HOLDINGS, INC., a Delaware
corporation
By: _____________________________________
Title: __________________________________
AGENT AND CO-AGENT:
XXXXX FARGO FOOTHILL, INC.,
as the Administrative Agent and the
Collateral Agent
By: _____________________________________
Its: ____________________________________
SILVER POINT FINANCE, LLC, as the
Co-Agent, the Documentation Agent, and
the Syndication Agent
By: _____________________________________
Its: ____________________________________
[SIGNATURE PAGE OF WAIVER]
LENDERS:
TRS THEBE LLC, as a Lender
By: _____________________________________
Its: ____________________________________
SEA PINES FUNDING LLC, as a Lender
By: _____________________________________
Its: ____________________________________
SPIRET IV LOAN TRUST 2003-A, as a Lender
By: WILMINGTON TRUST COMPANY, not in its
individual capacity but solely as trustee
By: _____________________________________
Its: ____________________________________
SPCP GROUP LLC, as a Lender
By: _____________________________________
Its: ____________________________________
FIELD POINT I, LTD., as a Lender
By: _____________________________________
Its: ____________________________________
FIELD POINT II, LTD., as a Lender
By: _____________________________________
Its: ____________________________________
[SIGNATURE PAGE OF WAIVER]
XXXXX FARGO FOOTHILL, INC., as a Lender
By: _____________________________________
Title: __________________________________
[SIGNATURE PAGE OF WAIVER]
ANNEX A
Tabletop Asset Sale Agreement
See attached.