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EXHIBIT 10.34
FIRST AMENDMENT
FIRST AMENDMENT, dated as of April 13, 2001 (this
"Amendment"), to the Third Amended and Restated Credit Agreement, dated as of
September 26, 2000 (as heretofore amended or otherwise modified, the "Credit
Agreement", and as amended by this Amendment, the "Credit Agreement"; unless
otherwise defined herein, capitalized terms which are defined in the Credit
Agreement are used herein as defined therein), among SALTON, INC., a Delaware
corporation (formerly known as Salton/Maxim Housewares, Inc.) (the "Borrower"),
the several banks and financial institutions or entities party thereto (each, a
"Lender" and, collectively, the "Lenders"); XXXXXX BROTHERS INC., as advisor,
arranger and book runner (in such capacity, the "Arranger"), FIRSTAR BANK, N.A.,
as syndication agent (in such capacity, the "Syndication Agent"), XXXXXX
COMMERCIAL PAPER INC., as administrative agent (in such capacity, the
"Administrative Agent"), and FLEET NATIONAL BANK, as documentation agent (in
such capacity, the "Documentation Agent").
WITNESSETH:
WHEREAS, the Borrower has requested the Lenders to consent to
amendments to certain provisions of the Credit Agreement; and
WHEREAS, the Lenders are willing to consent to the requested
amendments, on and subject to the terms and conditions contained herein;
NOW THEREFORE, in consideration of the premises and the
agreements hereinafter set forth, the parties hereto hereby agree that on the
Amendment Effective Date (as defined below), the Credit Agreement will be
amended as follows:
AMENDMENTS
AMENDMENT TO SECTION 1.1. Section 1.1 to the Credit Agreement is hereby amended
by (a) deleting the parenthetical following the word "determination" at the end
of definitions of "Net Average Senior Debt" and "Net Average Total Debt" and (b)
adding thereto the following defined terms in the appropriate alphabetical
order:
"European Acquisition": the acquisition of the
European Target for a net cash purchase price based on an EBITDA
multiple between five and a half and seven and a half.
"European Target": a manufacturer and distributor of
products complementary to the Borrower's located in a member country of
the European Union
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with net sales and EBITDA for a recent twelve month period between $50
million and $100 million, and $8 million and $12 million, respectively.
"2001 Indenture": the Indenture pursuant to which the
2001 Notes will be issued, which shall contain subordination terms
substantially equivalent to the subordination terms set forth in the
Senior Subordinated Note Indenture and covenants no more restrictive on
the Borrower than those set forth in the Senior Subordinated Note
Indenture.
"2001 Notes": up to $150,000,000 aggregate principal
amount of Senior Subordinated Notes due 2008 to be issued by the
Borrower pursuant to the 2001 Indenture.
AMENDMENT TO SECTION 4.21 Section 4.21 to the Credit Agreement is hereby amended
by adding the following sentence at the end thereof:
"The Obligations constitute "Senior Debt" of the
Borrower and its Subsidiaries, as such term is defined in the 2001
Indenture."
AMENDMENT TO SECTION 7.1(a). Section 7.1(a) the Credit Agreement is hereby
amended by deleting the last row of the table and inserting in lieu thereof the
following row:
FQ3 2002 and thereafter 2.25 to 1
AMENDMENT TO SECTION 7.1(d). Section 7.1(d) the Credit Agreement is hereby
amended by deleting the last row of the table and inserting in lieu thereof the
following row:
FQ4 2001 and thereafter 1.30 to 1
AMENDMENT TO SECTION 7.2. Section 7.2 to the Credit Agreement is hereby amended
by (a) deleting the word "and" appearing at the end of Section 7.2(j) and (b)
adding the following new text after the end of Section 7.2(k):
"(l) Indebtedness of the Borrower in respect of the
2001 Notes, provided that subject to certain limitations, the Borrower
shall be permitted to issue up to an additional $100,000,000 of senior
subordinated notes pursuant to the 2001 Indenture on terms no less
favorable to the Lenders than those under the terms of 2001 Notes,
other than pricing;
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(m) Indebtedness of the European Target or any of its
Subsidiaries assumed or acquired in connection with the European
Acquisition which Indebtedness is outstanding on the date of
consummation of the European Acquisition, is not created in
contemplation thereof and is not in an aggregate principal amount
exceeding $10,000,000 at any one time outstanding; provided, however,
that in no event shall the Borrower or any of its Subsidiaries
guarantee, or be deemed to guarantee, the Obligations of the European
Target or any of its Subsidiaries; and
(n) Indebtedness of the European Target or any of its
Subsidiaries incurred after the date of the European Acquisition;
provided, however, that (i) such Indebtedness of the European Target or
any of its Subsidiaries does not exceed $20,000,000 at any one time
outstanding and (ii) in no event shall the Borrower or any of its
Subsidiaries guarantee, or be deemed to guarantee, the Obligations of
the European Target or any of its Subsidiaries."
AMENDMENT TO SECTION 7.3. Section 7.3 to the Credit Agreement is hereby amended
by (a) deleting the word "and" appearing at the end of Section 7.3(l) and (b)
adding the following new text after the end of Section 7.3(m):
"(n) Liens on Property of the European Target, provided,
however, that (i) such Liens are existing as of the date of
consummation of the European Acquisition and are in respect of
Indebtedness permitted by Section 7.2(m), (ii) are not created in
contemplation thereof and (iii) do not spread to other assets of the
Borrower or its Subsidiaries following the consummation of the European
Acquisition; and
(o) Liens on Property of the European Target, provided,
however, that such Liens are in respect of Indebtedness permitted by
Section 7.2(n)."
AMENDMENT TO SECTION 7.8. Section 7.8 to the Credit Agreement is hereby amended
by (a) deleting the word "and" appearing at the end of Section 7.8(i) and the
period at the end of Section 7.8(j) and substituting in lieu of such period a
semicolon followed by the word "and" and (b) adding the following new clause
(k):
"(k) the European Acquisition; provided, however,
that (i) the European Acquisition must comply with the requirements set
forth in the definition of "Permitted Acquisition" set forth in Section
1.1 of the Credit Agreement, except that the aggregate consideration in
clause (iv) thereof shall be not more than $80,000,000, (ii) the Net
Average Total Debt Ratio after giving effect to the European
Acquisition must be less than 2.4 to 1.0 and (iii) the Borrower shall
have received the net cash proceeds from the 2001 Notes in a principal
amount of at least the purchase price of the European Acquisition."
AMENDMENT TO SECTION 7.9. Section 7.9 to the Credit Agreement is hereby amended
by (a) inserting the text ", the 2001 Notes" after the text "Seller Subordinated
Debt" in clauses (a) and
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(b) of Section 7.9 and (b) inserting the text "or the 2001 Indenture" after the
text "Senior Subordinated Note Indenture" in clause (c) of Section 7.9.
MISCELLANEOUS
CONDITIONS TO THE EFFECTIVENESS OF THE AMENDMENT. This Amendment shall become
effective as of the date each of the conditions precedent set forth below shall
have been fulfilled (the "Amendment Effective Date"):
Amendment. The Administrative Agent shall have received this Amendment, executed
and delivered by a duly authorized officer of the Borrower and each other Loan
Party.
Lender Consent Letters. The Administrative Agent shall have received executed
Lender Consent Letters, substantially in the form of Exhibit A hereto, from
Lenders constituting the Required Lenders.
No Default. No Default or Event of Default shall have occurred and be continuing
on such date or after giving effect to this Amendment.
Representations and Warranties. Each of the representations and warranties made
by any Loan Party in or pursuant to the Loan Documents and herein shall be true
and correct in all material respects on and as of the Amendment Effective Date
as if made on and as of the Amendment Effective Date after giving effect to the
amendments effected hereby.
(e) Amendment Fee. The Administrative Agent shall have
received, for the account of each Lender that executes and delivers its
Lender Consent Letter on or prior to April 13, 2001, an amendment fee
in an amount equal to 0.10% of the Aggregate Exposure of such Lender.
REPRESENTATION AND WARRANTIES. The Borrower represents and warrants to each
Lender and the Agents and the Arranger as follows:
Corporate Power; Authorization; Enforceable Obligations; No Legal Bar.
THE BORROWER HAS THE POWER AND AUTHORITY TO EXECUTE AND DELIVER THIS AMENDMENT
AND TO PERFORM EACH OF THE LOAN DOCUMENTS AS AMENDED BY THIS AMENDMENT AND EACH
AGREEMENT OR INSTRUMENT CONTEMPLATED HEREBY OR THEREBY TO WHICH IT IS OR WILL BE
A PARTY.
THIS AMENDMENT HAS BEEN DULY EXECUTED AND DELIVERED BY THE BORROWER AND
CONSTITUTES, AND EACH OTHER LOAN DOCUMENT AS AMENDED BY THIS AMENDMENT
CONSTITUTES, A LEGAL, VALID AND BINDING OBLIGATION OF SUCH PARTY ENFORCEABLE
AGAINST THE BORROWER ACCORDANCE WITH ITS
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TERMS, EXCEPT AS ENFORCEABILITY MAY BE LIMITED BY BANKRUPTCY, INSOLVENCY,
MORATORIUM, REORGANIZATION OR OTHER SIMILAR LAWS AFFECTING CREDITORS' RIGHTS
GENERALLY AND EXCEPT AS ENFORCEABILITY MAY BE LIMITED BY GENERAL PRINCIPLES OF
EQUITY (REGARDLESS OF WHETHER SUCH ENFORCEABILITY IS CONSIDERED IN A PROCEEDING
IN EQUITY OR AT LAW).
Representations and Warranties in Loan Documents. The representations and
warranties set forth in each Loan Document are true and correct in all material
respects as if made on and as of this Amendment Effective Date, except as they
may specifically relate to an earlier date.
CONTINUING EFFECT OF CREDIT AGREEMENT. This Amendment shall not constitute an
amendment of any provision of the Credit Agreement not expressly referred to
herein and shall not be construed as an amendment, waiver or consent to any
action on the part of any party hereto that would require an amendment, waiver
or consent of the Agents, the Arranger or the Lenders except as expressly stated
herein. Except as expressly waived hereby, the provisions of the Credit
Agreement are and shall remain in full force and effect.
ACKNOWLEDGMENT AND CONSENT. Each of the Loan Parties hereby:
acknowledges and consents to the execution and delivery of this Amendment and
performance of the Credit Agreement;
agrees that the term "Obligations" as defined in the Security Documents includes
all of the Borrower's obligations under the Credit Agreement and that all
references in such documents to the "Credit Agreement" refer to the Credit
Agreement as defined in this Amendment;
agrees that all of the "Collateral" (as defined in the Security Documents)
secures and continues to secure, all of the Property of the Loan Parties
referred to in paragraph (b) above; and
agrees that the execution and delivery of this Amendment and performance of the
Credit Agreement shall not in any way affect such Person's obligations under any
Loan Documents, as amended by this Amendment, to which such Person is a party,
which obligations on the date hereof remain absolute and unconditional and are
not subject to any defense, set-off or counterclaim.
EXPENSES. The Borrower agrees to pay or reimburse the Agents and the Arranger
for all of their reasonable out-of-pocket costs and expenses incurred in
connection with (i) the negotiation, preparation, execution and delivery of this
Amendment and any other documents prepared in connection herewith, and
consummation of the transactions contemplated hereby and thereby, including the
fees and expenses of Xxxxxxx Xxxxxxx & Xxxxxxxx, counsel to the Administrative
Agent, and (ii) the enforcement or preservation of any rights under this
Amendment and any other such documents.
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GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
COUNTERPARTS. This Amendment may be executed in any number of counterparts by
the parties hereto, each of which counterparts when so executed shall be an
original, but all counterparts taken together shall constitute one and the same
instrument.
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IN WITNESS WHEREOF, the parties have caused this Amendment to
be duly executed and delivered by their respective proper and duly authorized
officers as of the date first above written.
SALTON, INC.
By:
-------------------------------------
Name:
Title:
XXXXXX BROTHERS INC., as Arranger
By:
-------------------------------------
Name:
Title:
XXXXXX COMMERCIAL PAPER INC., as
Administrative Agent and as a Lender
By:
-------------------------------------
Name:
Title:
FIRSTAR BANK, N.A., as Syndication
Agent and as a Lender
By:
-------------------------------------
Name:
Title:
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FLEET NATIONAL BANK, as an Issuing
Lender and as Documentation Agent
By:
-------------------------------------
Name:
Title:
LASALLE BANK NATIONAL ASSOCIATION,
as an Issuing Lender
By:
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Name:
Title:
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Acknowledged and Consented:
HOME CREATIONS DIRECT, LTD.
By:
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Name:
Title:
SONEX INTERNATIONAL CORPORATION
By:
-------------------------------------
Name:
Title:
TOASTMASTER INC.
By:
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Name:
Title:
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EXHIBIT A
LENDER CONSENT LETTER
SALTON, INC.
THIRD AMENDED AND RESTATED CREDIT AGREEMENT
DATED AS OF SEPTEMBER 26, 2000
To: Xxxxxx Commercial Paper Inc.,
as Administrative Agent
0 Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Reference is made to the Third Amended and Restated Credit
Agreement, dated as of September 26, 2000 (the "Credit Agreement"), among
Salton, Inc., a Delaware corporation (the "Borrower"), the Lenders parties
thereto, Xxxxxx Commercial Paper Inc., as Administrative Agent, and others.
Unless otherwise defined herein, capitalized terms used herein and defined in
the Credit Agreement are used herein as therein defined.
The Borrower has requested that the Lenders consent to amend
the Credit Agreement on the terms described in the Amendment to which a form of
this Lender Consent Letter is attached as Exhibit A (the "Amendment").
Pursuant to Section 10.1 of the Credit Agreement, the
undersigned Lender hereby consents to the execution by the Administrative Agent
of the Amendment.
Very truly yours,
[NAME OF LENDER]
By:
-------------------------------------
Name:
Title:
Dated as of April 13, 2001
