JOINDER AGREEMENT TO REGISTRATION RIGHTS AGREEMENT
Reference is hereby made to that certain Registration Rights Agreement,
dated as of July 15, 1998, among Salton, Inc., a Delaware corporation (the
"Company"), and the investors named therein (as amended and in effect from time
to time, the "Registration Rights Agreement"), a true and correct copy of which
is attached hereto as Exhibit A; it being understood that the same was modified
by the certain Consent Agreement dated August 15, 2005.
The undersigned hereby joins and agrees to be a party to and a "Purchaser"
under the Registration Rights Agreement with respect to a number of shares of
Series A Preferred Stock (as defined in the Registration Rights Agreement) set
forth below such person's signature below, subject to all of the rights and
obligations applicable to a Purchaser thereunder. This Joinder Agreement shall
take effect and shall become a part of the Registration Rights Agreement
immediately upon the execution and delivery hereof.
[Signatures appear on the following page]
IN WITNESS WHEREOF, this Joinder Agreement has been duly executed and
delivered by each of the undersigned as of June 2, 2006.
HARBINGER CAPITAL PARTNERS MASTER
FUND I, LTD.
By: Harbinger Capital Partners Offshore Manager,
L.L.C., as its investment manager
By: /s/ Xxxxxx X. Xxxxxxx
--------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Vice President
No. of shares of Series A Preferred Stock: 30,000
AGREED AND ACCEPTED:
SALTON, INC
By: -----------------------
Name: ---------------------
Title: --------------------
EXHIBIT A
---------
REGISTRATION RIGHTS AGREEMENT
-----------------------------
REGISTRATION RIGHTS AGREEMENT dated as of July 15, 1998 by and among
SALTON/MAXIM HOUSEWARES, INC., a Delaware corporation (the "Company"), and each
of the parties listed on the signature pages hereto under the caption
"Purchasers" (each, a "Purchaser," and collectively, the "Purchasers").
This Agreement is made pursuant to the Stock Purchase Agreement (the
"Purchase Agreement"), dated as of July 15, 1998, by and among the Company and
the Purchasers, whereby the Company has agreed, among other things, to issue to
the Purchasers 40,000 shares of its Series A Voting Convertible Preferred Stock,
par value $0.01 per share (the "Preferred Stock"). The Preferred Stock is
convertible into shares of the Company's common stock, par value $.01 per share
(the "Common Stock"), at a conversion price of $17.00 per share, as such price
may be adjusted pursuant to the Certificate of Designation of the relative
powers, preferences and rights and qualifications of the Preferred Stock.
In order to induce the Purchasers to enter into the Purchase Agreement, the
Company has agreed to provide the registration rights set forth in this
Agreement. This
Agreement shall become effective upon the issuance of the shares
of Preferred Stock to the Purchasers pursuant to the Purchase Agreement.
In consideration of the foregoing and the respective covenants and
agreements herein contained, the parties hereto, intending to be legally bound
hereby, agree as follows:
SECTION 1. Definitions. Capitalized terms used and not defined herein have
the meanings assigned to such terms in the Purchase Agreement. As used herein,
unless the context otherwise requires, the following terms have the following
respective meanings:
"Blue Sky Filing" is defined in Section 2.07(a) of this Agreement.
"Commission" means the Securities and Exchange Commission or any other
federal agency at the time administering the Securities Act.
"Common Stock" is defined in the introduction to this Agreement.
"Company" is defined in the introduction to this Agreement.
"Exchange Act" means the Securities Exchange Act of 1934, as amended, or
any successor federal statute, and the rules and regulations of the Commission
thereunder, all
2
as the same shall be in effect at the time. Reference to a particular section
therein shall include a reference to the comparable section, if any, of any
such successor federal statute.
"Person" means a corporation, an association, a partnership, an
organization, a business, an individual, a governmental or political subdivision
thereof or a governmental agency.
"Preferred Stock" is defined in the introduction to this Agreement.
"Purchase Agreement" is defined in the introduction to this Agreement.
"Purchasers" is defined in the introduction to this Agreement.
"Registrable Securities" means any (i) shares of Preferred Stock, (ii)
shares of Common Stock issued upon the conversion of the Preferred Stock and
(iii) securities issued or issuable with respect to any shares of Preferred
Stock or Common Stock by way of stock dividend or stock split or in connection
with a combination of shares, recapitalization, merger, consolidation or other
reorganization or otherwise. As to any particular Registrable Securities, once
issued such securities shall cease to be Registrable Securities when (a) a
registration
3
statement with respect to the sale of such securities shall have become
effective under the Securities Act and such securities shall have been
disposed of in accordance with such registration statement, (b) they shall
have been sold to the public pursuant to Rule 144 (or any successor
provision) under the Securities Act, (c) they shall have been otherwise
transferred, new certificates for them not bearing a legend restricting
further transfer shall have been delivered by the Company and in the opinion
of counsel reasonably satisfactory to the Company subsequent public
distribution of them shall not require registration or qualification of them
under the Securities Act or any similar state law then in force, or (d) they
shall have ceased to be outstanding.
"Registration Expenses" is defined in Section 2.09(a) of this Agreement.
"Securities Act" means the Securities Act of 1933, as amended, or any
successor federal statute, and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time. References to a
particular section therein shall include a reference to the comparable section,
if any, of any such similar federal statute.
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SECTION 2. Registration under Securities Act.
SECTION 2.01. Demand Registration. (a) Request. At any time after the date
hereof, upon the written request of the Purchasers that the Company effect the
registration under the Securities Act of all or part (subject to Section
2.01(f)) of the Purchasers' Registrable Securities and specifying the types of
Registrable Securities to be registered and the intended method of disposition
thereof, the Company will give prompt written notice of such request to all
registered holders of Registrable Securities, and thereupon the Company will,
subject to the terms of this Agreement, use its reasonable best efforts to
effect the registration under the Securities Act of:
(i) the Registrable Securities which the Company has been
requested to register by the Purchasers, and
(ii) all other Registrable Securities which the Company has been
requested to register by written request of the holders thereof given
to the Company within 30 days after the giving of the aforesaid
written notice by the Company (specifying the intended method of
disposition of such Registrable Securities), all to the extent
5
requisite to permit the intended disposition of the Registrable
Securities to be so registered.
(b) Registration of Other Securities. Whenever the Company shall effect a
registration pursuant to this Section 2.01 in connection with an underwritten
offering by one or more holders of Registrable Securities, no securities other
than Registrable Securities shall be included among the securities covered by
such registration unless (i) the managing underwriter of such offering shall
have advised the Purchasers in writing that the inclusion of such other
securities would not adversely affect such offering or (ii) the Purchasers shall
have consented in writing to the inclusion of such other securities.
(c) Registration Statement Form. Registrations under this Section 2.01
shall be on such appropriate registration form of the Commission (i) as shall be
selected by the Company and (ii) as shall permit the disposition of such
Registrable Securities in accordance with the intended method or methods of
disposition specified in their request for such registration; provided, however,
that if at the time of such registration the Company satisfies the eligibility
requirements for use of a registration statement on Form S-3 under the
Securities Act, the Purchasers may request a registration on Form S-3 for an
offering to be
6
made on a continuous basis pursuant to Rule 415 under the Securities Act (a
"Shelf Registration") and the Company shall use all reasonable efforts to cause
the registration to be made on such form. The Company agrees to include in any
such registration statement all information which, in the opinion of counsel to
the Purchasers or counsel to the Company, is required to be included.
(d) Effective Registration Statement. A registration requested pursuant to
this Section 2.01 shall not be deemed to have been effected and will not be
considered one of the three demand registrations which may be requested pursuant
to this Agreement (i) if the registration statement with respect thereto does
not become effective, (ii) if after it has become effective, it does not remain
effective for a period of at least 90 days or, in the case of a Shelf
Registration, one year (or in each case such shorter period during which all the
Registrable Securities registered thereunder are sold or disposed of) or such
registration is interfered with by any stop order, injunction or other order or
requirement of the Commission or other governmental agency or court for any
reason and has not thereafter become effective, or (iii) if the conditions to
closing specified in the underwriting agreement entered into in connection with
such registration are not satisfied
7
or waived other than by reason of the failure or refusal of a holder of
Registrable Securities to satisfy or perform a condition to such closing or a
default by an underwriter. If a demand is made pursuant to Section 2.01 and
the Company files a registration statement and causes (or is in the process
of causing) such registration statement to become effective and the holders
requesting registration decide not to proceed with such registration for
reasons other than a breach by the Company of its obligations hereunder or
the Company's inability or failure to obtain the effectiveness of such
registration statement, such request shall nevertheless count as one demand
under Section 2.01.
(e) Priority in Demand Registrations. If a demand registration pursuant to
this Section 2.01 involves an underwritten offering, and the managing
underwriter shall advise the Company in writing (with a copy sent to each holder
of the Registrable Securities requesting registration) that the number of
securities requested to be included in such registration exceeds the number
which can be sold in such offering within a price range acceptable to the
Purchasers or such other person entitled to make a demand registration pursuant
to Section 8 hereof, such registration will include only that number of
Registrable Securities which the Company is so advised can be sold in
8
such offering, drawn pro rata from the holders of the Registrable Securities
requesting such registration on the basis of the percentage of Registrable
Securities held by the holders of Registrable Securities which have requested
that such securities be included. In connection with any such registration, no
securities other than Registrable Securities shall be covered by such
registration.
(f) Limitations on Registration; Expenses. The Company will not be required
to effect, in the aggregate, more than three demand registrations pursuant to
this Section 2.01 (or any other provision of this Agreement), of which the
Company shall pay all Registration Expenses in connection with all three demand
registrations. The Company shall not be required to effectuate any registration
pursuant to this Section 2.01 within less than six months after the end of the
effectiveness period of any other registration pursuant to Section 2.01.
Notwithstanding the foregoing, no demand may be made in respect of a number of
Registrable Securities by all holders demanding registration which is less than
the lesser of (x) 25% of the total Registrable Securities originally issued (or
the equivalent thereof in the case of securities issued upon the conversion
thereof) or (y) the number of Registrable Securities having
9
a market value (as reasonably estimated in good faith by the holders requesting
registration) of at least $10,000,000.
SECTION 2.02. Incidental Registration. (a) Right to Include the Registrable
Securities. If the Company at any time proposes to register any of its
securities under the Securities Act by registration on Forms X-x, X-0 or S-3 or
any successor or similar form(s), whether or not for sale for its own account,
it will each such time give prompt written notice to the Purchasers and all
other holders of Registrable Securities of its intention to do so and of such
holders' rights under this Section 2.02. Upon the written request of any such
holder made within 30 days after the receipt of any such notice (15 days if the
Company gives telephonic notice to all holders of Registrable Securities, with
written confirmation to follow promptly thereafter, stating that (i) such
registration will be on Form S-3 and (ii) such shorter period of time is
required because of a planned filing date) (which request shall specify the
Registrable Securities to be disposed of by such holder), the Company will,
subject to the next sentence, use its reasonable best efforts to effect the
registration under the Securities Act of all Registrable Securities which the
Company has been so requested to register by the holders thereof, to the extent
requisite to permit the disposition
10
of such Registrable Securities to be so registered. If the Company thereafter
determines for any reason not to register or to delay registration of such
securities, the Company may, at its election, give written notice of such
determination to each holder of Registrable Securities and, thereupon, (i) in
the case of a determination not to register, shall be relieved of the obligation
to register such Registrable Securities in connection with such registration
(but not from any obligation of the Company to pay the Registration Expenses in
connection therewith), without prejudice, however, to the rights (if any) of the
Purchasers or an assignee to request that such registration be effected as a
registration under Section 2.01, and (ii) in the case of a determination to
delay registration, shall be permitted to delay registering any Registrable
Securities, for the same period as the delay in registration of such other
securities. All obligations of the Company with respect to any registration
described in this Section 2.02(a) shall be subject to the rights of the Company
set forth in the immediately preceding sentence. No registration effected under
this Section 2.02 shall relieve the Company of its obligation to effect any
registration upon request under Section 2.01. The Company will pay all
Registration Expenses in connection with registration of
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Registrable Securities requested pursuant to this Section 2.02. If such
offering is to be underwritten, the holders seeking to sell such Registrable
Securities agree to join in such underwritten offering.
(b) Priority in Incidental Registrations. In a registration pursuant to
this Section 2.02 involving an underwritten offering of the securities so being
registered, whether or not for sale for the account of the Company by or through
one or more underwriters of recognized standing, if the managing underwriter of
such underwritten offering shall inform the Company and the holders of
Registrable Securities requesting registration in such offering by letter of its
belief that the number or type of securities to be included in such registration
would interfere with the successful marketing of the securities being
distributed by such underwriters, then the Company will be required to include
in such registration only that number and type of Registrable Securities which
it is so advised can be sold in such offering, drawn pro rata from the holders
of Registrable Securities requesting such registration and the holders of any
other securities to be registered (whether or not pursuant to the exercise of a
demand registration right by such holders) on the basis of the number of
securities the registration of which shall have been requested by such
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holders (it being understood that this provision shall not limit the number
of securities that the Company shall be entitled to register for sale for its
own account).
SECTION 2.03. Registration Procedures. In connection with the Company's
obligations pursuant to Sections 2.01 and 2.02 hereof, the Company will use its
reasonable best efforts to effect such registrations to permit the sale of
Registrable Securities in accordance with the intended method or methods of
disposition thereof, and pursuant thereto the Company will as expeditiously as
possible:
(a) prepare and, as soon as reasonably practicable and in any
event within 30 days after the end of the period within which requests
for registration may be given to the Company, file with the Commission
(but not earlier than 90 days after the end of the Company's fiscal
year or 45 days after the end of the last fiscal quarter), a
registration statement or registration statements on the appropriate
form under the Securities Act, which form shall be available for the
sale of the Registrable Securities by the holders thereof in
accordance with the intended method or methods of distribution
thereof, and use its reasonable best
13
efforts to cause such registration statement to become effective and
to remain continuously effective for a period of 90 days following the
date on which such registration statement is declared effective (or,
in the case of a Shelf Registration, for a period of one year
following such date); provided that the Company shall have no
obligation to maintain the effectiveness of such registration
statement after the sale of all Registrable Securities registered
thereunder or for a period longer than that specified in this
paragraph (a);
(b) prepare and file with the Commission such amendments and
post-effective amendments to the registration statement as may be
necessary to keep such registration statement effective for the
applicable period; cause the related prospectus to be supplemented by
any required prospectus supplement, and as so supplemented to be filed
pursuant to Rule 424 under the Securities Act; and comply with the
provisions of the Securities Act with respect to the disposition of
all securities covered by such registration statement during the
applicable period in accordance with the intended
14
methods of disposition by the sellers thereof set forth in such
registration statement or supplement to such prospectus;
(c) notify the selling holders of Registrable Securities, and the
managing underwriters, if any, promptly, and (if requested by any such
Person) confirm such advice in writing, (i) when a prospectus or any
prospectus supplement or post-effective amendment has been filed, and,
with respect to a registration statement or any post-effective
amendment, when the same has become effective, (ii) of any request by
the Commission for amendments or supplements to a registration
statement or related prospectus or for additional information, (iii)
of the issuance by the Commission of any stop order suspending the
effectiveness of a registration statement or the initiation of any
proceedings for that purpose, (iv)if at any time the representations
and warranties of the Company made as contemplated by Section 2.04(a)
below cease to be true and correct in any material respect, (v) of the
receipt by the Company of any notification with respect to the
suspension of the qualification of any of the
15
Registrable Securities for sale in any jurisdiction or the initiation
or threatening of any proceeding for such purpose, (vi) of the
happening of any event which requires the making of any changes in a
registration statement or related prospectus so that such documents
will not contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to
make the statements therein not misleading and (vii) if the Company
reasonably determines that a post-effective amendment to a
registration statement would be appropriate;
(d) use its reasonable best efforts to prevent the issuance of
any order suspending the effectiveness of a Registration Statement or
of any order preventing or suspending the use of a Prospectus or
suspending the qualification (or exemption from qualification) of any
Registrable Securities for sale in any jurisdiction and, if any such
order is issued, to obtain the withdrawal of any such order at the
earliest possible moment.
(e) if requested by the managing underwriters or any holder of
Registrable
16
Securities being sold in connection with an underwritten offering,
immediately incorporate in a prospectus supplement or post-effective
amendment such information as the managing underwriters and such
holder agree should be included therein relating to the sale and
distribution of Registrable Securities, including, without limitation,
information with respect to the number of Registrable Securities being
sold to such underwriters, the purchase price being paid therefor by
such underwriters and with respect to any other terms of the
underwritten (or best efforts underwritten) offering of the
Registrable Securities to be sold in such offering; make all required
filings of such prospectus supplement or post-effective amendment as
soon as notified of the matters to be incorporated in such prospectus
supplement or post-effective amendment; and supplement or make
amendments to any registration statement if requested by any holder of
Registrable Securities covered by such registration statement or any
underwriter of such Registrable Securities;
17
(f) furnish to each selling holder of Registrable Securities and
each managing underwriter, without charge, at least one signed copy of
the registration statement or statements and any post-effective
amendment thereto, including financial statements and schedules, all
documents incorporated therein by reference and all exhibits
(including those incorporated by reference);
(g) deliver to each holder of Registrable Securities and the
underwriters, if any, without charge, as many copies of the prospectus
or prospectuses (including each preliminary Prospectus) and any
amendment or supplement thereto as such Persons may reasonably
request; the Company consents to the use of such prospectus or any
amendment or supplement thereto by each of the selling holders of
Registrable Securities and the underwriters, if any, in connection
with the offering and sale of the Registrable Securities covered by
such Prospectus or any amendment or supplement thereto;
(h) prior to any public offering of Registrable Securities, use
its reasonable best
18
efforts to register or qualify or cooperate with the selling holders
of Registrable Securities, the underwriters, if any, and their
respective counsel in connection with the registration or
qualification of such Registrable Securities for offer and sale under
the securities or Blue Sky laws of such jurisdictions as any selling
holder or underwriter reasonably requests in writing; keep each such
registration or qualification effective during the period such
registration statement is required to be kept effective and do any and
all other acts or things reasonably necessary or advisable to enable
the disposition in such jurisdictions of the Registrable Securities
covered by the applicable registration statement; provided that the
Company will not be required to qualify generally to do business in
any jurisdiction where it is not then so qualified or to take any
action which would subject it to general service of process in any
such jurisdiction where it is not then so subject;
(i) cooperate with the selling holders of Registrable Securities
and the managing underwriters, if any, to facilitate the timely
19
preparation and delivery of certificates representing Registrable
Securities to be sold and not bearing any restrictive legends unless
required by applicable law; and enable such Registrable Securities to
be in such denominations and registered in such names as the managing
underwriters may request at least two business days prior to any sale
of Registrable Securities to the underwriters;
(j) use its reasonable best efforts to cause the Registrable
Securities covered by the applicable registration statement to be
registered with or approved by such other governmental agencies or
authorities as may be necessary to enable the seller or sellers
thereof or the underwriters, if any, to consummate the disposition of
such Registrable Securities;
(k) upon the occurrence of any event contemplated by paragraph
(c)(vi) above, prepare a supplement or post-effective amendment to the
applicable registration statement or related prospectus or any
document incorporated therein by reference or file any other required
document so that, as thereafter delivered to the purchasers of
20
the Registrable Securities being sold thereunder, such prospectus will
not contain any untrue statement of a material fact or omit to state
any material fact necessary to make the statements therein not
misleading;
(1) take all such actions in connection therewith in order to
expedite or facilitate the disposition of such Registrable Securities;
(m) otherwise use its reasonable best efforts to comply with all
applicable rules and regulations of the Commission and make generally
available to its security holders earnings statements satisfying the
provisions of Section 11(a) of the Securities Act and Rule 158
thereunder;
(n) permit any holder of Registrable Securities, which holder, in
the judgment of its counsel, might be deemed to be a "control person"
of the Company (within the meaning of Section 15 of the Securities Act
and Section 20 of the Exchange Act), to participate in the preparation
of such registration statement and include therein material, furnished
to the Company in writing which, in the reasonable judgment of such
holder
21
and its counsel, is required to be included therein;
(o) use its reasonable best efforts to cause all such Registrable
Securities to be listed on each securities exchange, if any, on which
Registrable Securities of the type then being registered are listed;
and
(p) provide and cause to be maintained a transfer agent and
registrar (if applicable) for all Registrable Securities covered by
such registration statement from and after a date not later than the
effective date of such registration statement.
The Company may require each holder of Registrable Securities as to
which any registration is being effected to furnish to the Company
such information regarding such holder and the distribution of such
Registrable Securities as the Company may from time to time reasonably
request in writing in order to comply with the Securities Act. Each
holder of Registrable Securities as to which any registration is being
effected agrees to notify the Company, as promptly as practicable, of
any inaccuracy or change in information previously furnished by such
holder to the Company or of the happening of any event in either case
as a
22
result of which any prospectus relating to such registration contains
an untrue statement of a material fact regarding such holder or the
distribution of such Registrable Securities or omits to state any
material fact regarding such holder or the distribution of such
Registrable Securities required to be stated therein or necessary to
make the statement therein not misleading in light of the
circumstances then existing, and to promptly furnish to the Company
any additional information required to correct and update any
previously furnished information or required such that such prospectus
shall not contain, with respect to such holder or the distribution of
such Registrable Securities, an untrue statement of a material fact or
omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading in light of
the circumstances then existing.
Each holder of Registrable Securities agrees that, upon receipt of any
notice from the Company of the happening of any event of the kind described in
Section 2.03(c)(ii), (iii), (v), (vi) or (vii) hereof, such holder will
forthwith discontinue disposition of such Registrable Securities covered by such
registration statement or prospectus until such holder's receipt of the copies
of the supplemented or amended prospectus relating to such registration
statement
23
or prospectus, or until it is advised in writing by the Company that the use of
the applicable prospectus may be resumed, and has received copies of any
additional or supplemental filings which are incorporated by reference in such
Prospectus, and, if so directed by the Company, such holder will deliver to the
Company (at the Company's expense) all copies, other than permanent file copies
then in such holder's possession, of the prospectus covering the Registrable
Securities current at the time of receipt of such notice.
SECTION 2.04. Underwritten Offerings.
(a) Demand Underwritten Offerings. In any offering by holders of
Registrable Securities pursuant to a registration requested under Section 2.01,
sales shall, at the request of the Purchasers, be made through a nationally
recognized investment banking firm (or syndicate managed by such a firm)
selected by the holders of at least a majority in aggregate principal amount of
the Registrable Securities to be included in such offering and approved by the
Company (which approval shall not be unreasonably withheld) and the Company
shall enter into an underwriting agreement which shall be reasonably
satisfactory in form and substance to each holder and the underwriters and which
shall contain representations, warranties and agreements (including
24
indemnification agreements to the effect and to the extent provided in
Section 2.07(a)) as are customarily included by an issuer in underwriting
agreements with respect to primary distributions. The holders of Registrable
Securities to be distributed by such underwriters shall be parties to such
underwriting agreement and may, at their option, require that any or all of
the representations and warranties by, and the other agreements on the part
of, the Company to and for the benefit of such underwriters shall also be
made to and for the benefit of such holders of Registrable Securities and
that any or all of the conditions precedent to the obligations of such
underwriters under such underwriting agreement be conditions precedent to the
obligations of such holders of Registrable Securities. Any such holder of
Registrable Securities shall not be required to make any representations or
warranties to or agreements with the Company or the underwriters other than
representations, warranties or agreements regarding such holder, such
holder3s Registrable Securities and such holder's intended method of
distribution and any other representation required by law.
(b) Incidental Underwritten Offerings. If the Company at any time proposes
to register any of its securities under the Securities Act as contemplated by
25
Section 2.02 and such securities are to be distributed by or through one or more
underwriters, the Company will, if requested by any holder of Registrable
Securities as provided in Section 2.02 and subject to the provisions of Section
2.02(b), use its reasonable best efforts to arrange for such underwriters to
include all the Registrable Securities to be offered and sold by such holder
among the securities to be distributed by such underwriters. The holders of
Registrable Securities to be distributed by such underwriters shall be parties
to the underwriting agreement between the Company and such underwriters. Any
such holder of Registrable Securities shall not be required to make any
representations or warranties to or agreements with the Company or the
underwriters other than representations, warranties or agreements regarding such
holder, such holder's Registrable Securities and such holder's intended method
of distribution and any other representation required by law.
SECTION 2.05. Preparation; Reasonable Investigation. In connection with the
preparation and filing of each registration statement under the Securities Act
pursuant to this Agreement, the Company will give the holders of Registrable
Securities to be registered under such registration statement, their
underwriters, and their respective counsel and accountants the opportunity to
26
participate in the preparation of such registration statement, each
prospectus included therein or filed with the Commission, and each amendment
thereof or supplement thereto, and will give each of them such access to its
books and records and such opportunities to discuss the business of the
Company with its officers and the independent public accountants who have
certified its financial statements as shall be necessary, in the opinion of
such holders3 and such underwriters' respective counsel, to conduct a
reasonable investigation within the meaning of the Securities Act.
SECTION 2.06. Limitations, Conditions and Qualifications to Obligations
Under Registration Covenants. The obligations of the Company to use its
reasonable efforts to cause the Registrable Securities to be registered under
the Securities Act are subject to each of the following limitations, conditions
and qualifications:
(a) The Company shall not be obligated to file or keep effective any
registration statement pursuant to Section 2.01 hereof at any time if the
Company would be required to include financial statements audited as of any date
other than the end of its fiscal year.
(b) The Company shall be entitled to postpone for a reasonable period of
time (but not exceeding 30 days and not more than once in any six-month period)
the filing or
27
effectiveness of any registration statement otherwise required to be prepared
and filed by it pursuant to Section 2.01 if the Company determines, in its
reasonable judgment, that (i) the Company is in possession of material
information that has not been disclosed to the public and the Company reasonably
determines that it would be significantly detrimental to the Company and its
stockholders to disclose such information at such time in a registration
statement or (ii) such registration and offering would significantly interfere
with any financing, acquisition, corporate reorganization or other material
transaction involving the Company or any of its Affiliates (as defined in the
rules and regulations adopted under the Exchange Act) and, in any such case, the
Company promptly gives the requesting holders of Registrable Securities written
notice of such determination, containing a general statement of the reasons for
such postponement and an approximation of the anticipated delay. If the Company
shall so postpone the filing of a registration statement, the requesting holders
of Registrable Securities shall have the right to withdraw the request for
registration by giving written notice to the Company within 30 days after
receipt of the notice of postponement and, in the event of such withdrawal, such
request shall not be counted for purposes
28
of the requests for registration to which the Purchasers and their assignees
are entitled pursuant to Section 2.01 hereof.
(c) No holder of Registrable Securities may participate in any underwritten
offering hereunder unless such holder (i) agrees to sell such holder's
Registrable Securities on the basis provided in any underwriting arrangements
approved by the persons entitled hereunder to approve such arrangements and (ii)
completes and executes all questionnaires, powers of attorney, indemnities,
underwriting agreements and other documents reasonably required under the terms
of such underwriting arrangements.
SECTION 2.07. Indemnification. (a) Indemnification by the Company. In the
event of any registration of any Registrable Securities under the Securities
Act, the Company will, and hereby does, indemnify and hold harmless, to the
fullest extent permitted by law, the holder of any Registrable Securities whose
Registrable Securities are covered by such registration statement, its directors
and officers, each other Person who participates as an underwriter in the
offering or sale of such securities and each other Person, if any, who controls
such seller or any such underwriter within the meaning of the Securities Act,
against any and all losses, claims, damages, liabilities and
29
expenses, joint or several, (or actions or proceedings, whether commenced or
threatened, in respect thereof) to which they or any of them may become
subject under the Securities Act or any other statute or common law, including
any amount paid in settlement of any litigation, commenced or threatened, and
to reimburse them for any reasonable legal or other expenses incurred by them
in connection with investigating any claims and defending any actions,
insofar as any such losses, claims, damages, liabilities, expenses or actions
arise out of or are based upon (i) any untrue statement or alleged untrue
statement of a material fact contained in the registration statement or
prospectus relating to the sale of such securities or any post-effective
amendment thereto or in any filing made in connection with the qualification
of the offering under Blue Sky or other securities laws of jurisdictions in
which the Registrable Securities are offered ("Blue Sky Filing"), or the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary in order to make the statements therein, in light
of the circumstances under which they were made, not misleading or (ii) any
untrue statement or alleged untrue statement of a material fact contained in
any preliminary prospectus, if used prior to the effective date of such
registration statement (unless
30
such statement is corrected in the final prospectus and the Company has
previously furnished copies thereof to any holder of Registrable Securities
seeking such indemnification and the underwriters), or contained in the final
prospectus (as amended or supplemented if the Company shall have filed with
the Commission any amendment thereof or supplement thereto) if used within
the period during which the Company is required to keep the registration
statement to which such prospectus relates current, or the omission or
alleged omission to state therein (if so used) a material fact necessary in
order to make the statements therein, in light of the circumstances under
which they were made, not misleading; provided, however, that the
indemnification agreement contained herein shall not (i) apply to such
losses, claims, damages, liabilities, expenses or actions arising out of, or
based upon, any such untrue statement or alleged untrue statement, or any
such omission or alleged omission, if such statement or omission was made in
reliance upon and in conformity with written information furnished to the
Company by such seller or such underwriter specifically stating that it is
for use in connection with preparation of the registration statement, any
preliminary prospectus or final prospectus contained in the registration
statement, any such amendment or supplement thereto or any
31
Blue Sky Filing or (ii) inure to the benefit of any underwriter or any person
controlling such underwriter, to the extent that any such loss, claim,
damage, liability (or action or proceeding in respect thereof) or expense
arises out of such person's failure to send or give a copy of the final
prospectus, as the same may be then supplemented or amended, to the person
asserting an untrue statement or alleged untrue statement or omission or
alleged omission at or prior to the written confirmation of the sale of
Registrable Securities to such person if such statement or omission was
corrected in such final prospectus.
Such indemnity shall remain in full force and effect regardless of any
investigation made by or on behalf of such seller or any such director, officer
or controlling person and shall survive the transfer of such securities by such
seller.
(b) Indemnification by the Sellers. The Company may require, as a condition
to including any Registrable Securities in any registration statement filed
pursuant to Section 2.01 or 2.02, that the Company shall have received an
undertaking satisfactory to it from the prospective seller of such securities,
to indemnify and hold harmless (in the same manner and to the same extent as set
forth in subdivision (a) of this Section 2.07(a)) the Company, each
32
director of the Company, each officer of the Company and each other person, if
any, who controls the Company within the meaning of the Securities Act, with
respect to any untrue statement or alleged untrue statement in, or omission or
alleged omission from, such registration statement, any preliminary prospectus
or final prospectus contained therein, or any amendment or supplement thereto,
if such statement or omission was made in reliance upon and in conformity with
written information furnished to the Company through an instrument duly executed
by such seller specifically stating that it is for use in such registration
statement, preliminary prospectus, final prospectus, amendment or supplement.
Such indemnity shall remain in full force and effect, regardless of any
investigation made by or on behalf of the Company or any such director, officer
or controlling person and shall survive the transfer of such securities by such
seller. In no event shall any indemnity or contribution paid by any seller to
the Company pursuant to this Section 2.07, or otherwise, exceed the proceeds
received by such seller in such offering. In the case of an underwritten
offering of Registrable Securities, each holder of Registrable Securities shall
agree to indemnify such underwriters, their officers and directors, if any, and
each person, if any, who controls such underwriters within the
33
meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act,
with respect to information furnished by them for use in the registration
statement or prospectus to the extent customary in the circumstances for a
selling stockholder in an underwritten public offering.
(c) Notices of Claims, etc. Promptly after receipt by an indemnified party
of notice of the commencement of any action or proceeding involving a claim
referred to in the preceding subdivisions of this Section 2.07(a), such
indemnified party will, if a claim in respect thereof is to be made against an
indemnifying party, give written notice to the latter within five days of the
commencement of such action; provided that the failure of any indemnified party
to give notice as provided herein shall not relieve the indemnifying party of
its obligations under the preceding subdivisions of this Section 2.07(a), except
to the extent that the indemnifying party is actually prejudiced by such failure
to give notice. In case any such action is brought against an indemnified party,
the indemnifying party shall be entitled to participate in and, unless in such
indemnified party's reasonable good faith judgment a conflict of interest
between such indemnified and indemnifying parties may exist in respect of such
claim, to assume the defense thereof, jointly with any other
34
indemnifying party similarly notified to the extent that it may wish, with
counsel reasonably satisfactory to such indemnified party, and after notice
from the indemnifying party to such indemnified party of its election so to
assume the defense thereof, the indemnifying party shall not be liable to
such indemnified party for any legal or other expenses subsequently incurred
by the latter in connection with the defense thereof other than reasonable
costs of investigation. In the event that the indemnifying party advises an
indemnified party that it will contest a claim for indemnification hereunder,
or fails, within thirty (30) days of receipt of any indemnification notice to
notify, in writing, such person of its election to defend, settle or
compromise, at its sole cost and expense, any action, proceeding or claim (or
discontinues its defense at any time after it commences such defense), then
the indemnified party may, at its option, defend, settle or otherwise
compromise or pay such action or claim. In any event, unless and until the
indemnifying party elects in writing to assume and does so assume the defense
of any such claim, proceeding or action, the indemnified party's reasonable
out-of-pocket costs and expenses arising out of the defense, settlement or
compromise of any such action, claim or proceeding shall be losses subject to
indemnification hereunder. The
35
indemnified party shall cooperate fully with the indemnifying party in
connection with any negotiation or defense of any such action or claim by the
indemnifying party and shall furnish to the indemnifying party all
information reasonably available to the indemnified party which relates to
such action or claim. The indemnifying party shall keep the indemnified party
fully appraised at all times as to the status of the defense or any
settlement negotiations with respect thereto. If the indemnifying party
elects to defend any such action or claim, then the indemnified party shall
be entitled to participate in such defense with counsel of its choice at its
sole cost and expense. If the indemnifying party does not assume such
defense, the indemnified party shall keep the indemnifying party appraised at
all times as to the status of the defense; provided, however, that the
failure to keep the indemnifying party so informed shall not affect the
obligations of the indemnifying party hereunder. No indemnifying party shall
be liable for any settlement of any action, claim or proceeding effected
without its written consent; provided, however, that the indemnifying party
shall not unreasonably withhold, delay or condition its consent. No
indemnifying party shall, without the consent of the indemnified party (which
consent shall not be
36
unreasonably withheld, delayed or conditioned), consent to entry of any
judgment or enter into any settlement which does not include as an
unconditional term thereof the giving by the claimant or plaintiff to such
indemnified party of a release from all liability in respect to such claim or
litigation.
(d) Contribution. (i) If the indemnification from the indemnifying party as
provided in this Section 2.07 is unavailable or is otherwise insufficient to
hold harmless an indemnified party in respect of any losses, claims, damages,
liabilities or expenses referred to therein, then the indemnifying party shall,
to the fullest extent permitted by law, contribute to the amount paid or payable
by such indemnified party as a result of such losses, claims, damages,
liabilities or expenses in such proportion as is appropriate to reflect the
relative fault of the indemnifying party and indemnified parties in connection
with the actions which resulted in such losses, claims, damages, liabilities or
expenses, as well as any other relevant equitable considerations. The relative
fault of such indemnifying party shall be determined by reference to, among
other things, whether any action in question, including any untrue (or alleged
untrue) statement of a material fact or omission (or alleged omission) to state
a
37
material fact, has been made, or related to information supplied by such
indemnifying party, and the parties3 relative intent, knowledge, access to
information and opportunity to correct or prevent such action. The amount
paid or payable by a party as a result of the losses, claims, damages,
liabilities and expenses referred to above shall be deemed to include,
subject to the limitations set forth in Section 2.07(c), any legal or other
fees or expenses reasonably incurred by such party in connection with any
investigation or proceeding.
(ii) The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 2.07 were determined by pro rata
allocation or by any other method of allocation which does not take account of
the equitable considerations referred to in the immediately preceding paragraph.
No person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. If however,
indemnification is available under this Section 2.07, the indemnifying parties
shall indemnify each indemnified party to the fullest extent provided in Section
2.07(a) and (b) hereof without regard to the relative fault of said indemnifying
party or indemnified
38
party or any other equitable consideration provided for in this Section 2.07(d).
(e) Indemnification Payments. The indemnification and contribution required
by this Section 2.07(a) shall be made by periodic payments of the amount thereof
during the course of the investigation or defense, as and when bills are
received or expense, loss, damage or liability is incurred.
(f) Other Rights; Liabilities. The indemnity agreements contained herein
shall be in addition to (i) any cause of action or similar right of the
indemnified party against the indemnifying party or others, and (ii) any
liabilities the indemnifying party may be subject to pursuant to the law.
SECTION 2.08. Adjustments Affecting Registrable Securities.
(a) During any period commencing on either (i) the date a request for a
demand registration has been made pursuant to Section 2.01(a) hereof or (ii) the
date on which any holder of Registrable Securities makes written request in
accordance with the terms of Section 2.02(a) hereof to have its Registrable
Shares registered, and in either event, terminating on the date which is the
earlier of (i) 180 days after the date on which the registration statement
39
registering such Registrable Securities becomes effective and (ii) the date
on which all Registrable Securities registered under such registration
statement are sold, transferred or disposed of, the Company will not, without
the consent of the Purchasers, effect, permit to occur or announce any future
intent to effect or permit to occur, any combination or subdivision of shares
which would materially adversely affect the ability of the holders of
Registrable Securities to include Registrable Securities in any registration
of securities contemplated by this Section 2 or the marketability of
Registrable Securities under any such registration.
SECTION 2.09. Registration Expenses. (a) Except as provided in Section
2.09(b), all expenses incident to the Company's performance of or compliance
with this Agreement, including without limitation (i) any allocation of salaries
and expenses of Company personnel or other general overhead expenses of the
Company, or other expenses for the preparation of historical and pro forma
financial statements or other data normally prepared by the Company in the
ordinary course of business or customarily prepared by the issuer in a public
offering; (ii) all registration, application, filing, listing, transfer and
registrar fees; (iii) all National Association of Securities Dealers fees
40
and fees and expenses of registration or qualification of Registrable Securities
under state securities or blue sky laws; (iv) all word processing, duplicating
and printing expenses, messenger and delivery expenses; and (v) the fees and
disbursements of counsel for the Company and the reasonable fees and
disbursements of one counsel retained by the holder or holders a majority of the
Registrable Securities being registered and the fees and disbursements of the
Company's independent public accountants, including the expenses of customary
"cold comfort" letters required by or incident to such performance and
compliance; and (vi) subject to the proviso hereinbelow, any fees and
disbursements of underwriters and broker-dealers customarily paid by issuers or
sellers of securities (all such expenses being herein called "Registration
Expenses") will be borne or caused to be borne by the Company whether or not any
of the Registration Statements become effective provided, however, that in all
cases in which the Company is required to pay Registration Expenses hereunder,
Registration Expenses shall exclude, and the sellers of the Registrable
Securities being registered shall pay, all underwriting discounts and
commissions and transfer taxes in respect of the Registrable Securities under
state securities or blue sky laws.
41
SECTION 2.10. Other Sales. (a) The Company hereby agrees not to effect, any
public sale or distribution of any securities of the same class as (or otherwise
similar to) the Registrable Securities, or any securities which, with notice,
lapse of time and/or payment of monies, are exchangeable or exercisable for or
convertible into any such securities, or to enter into any agreement to make,
file a registration statement for, or announce any such public sale or
distribution of, any such securities, excluding the grant and exercise of
employee stock options and the issuance of shares in connection with
acquisitions as long as all executive officers, directors and other affiliates
of the entity being acquired have agreed in writing to the restrictions set
forth in this Section 2.10(a), during the 15-day period prior to, and during the
90-day period commencing on, the effective date of a registration statement
filed with the Commission in connection with an underwritten offering effected
pursuant to Section 2.1 of this Agreement without the prior written consent of
the managing underwriters of such offering.
(b) The Purchasers (and their assigns) agree, during the 10-day period
prior to, and during the 90-day period commencing on, the effective date of a
registration statement filed with the Commission (other than on Form S-8)
42
in connection with an underwritten offering of securities of the same class
as the then outstanding Registrable Securities (or any securities issuable
upon conversion or exchange thereof), not to make any sales of Registrable
Securities (or such other securities) pursuant to Rule 144, provided that
they were given the opportunity, if required by (and subject to) Section 2.02
hereof, to include in such registration statement all such Registrable
Securities as they may have requested.
SECTION 3. Rule 144. The Company shall take all actions reasonably
necessary to enable holders of Registrable Securities to sell such securities
without registration under the Securities Act within the limitation of the
exemptions provided by (a) Rule 144 under the Securities Act, as such Rule may
be amended from time to time, or (b) any similar rule or regulation hereafter
adopted by the Commission including, without limiting the generality of the
foregoing, filing on a timely basis all reports required to be filed by the
Exchange Act. Upon the request of any holder of Registrable Securities, the
Company will deliver to such holder a written statement as to whether it has
complied with such requirements. Notwithstanding anything herein to the
contrary, no holder may exercise any right to require the registration of a
43
number of Registrable Securities which he is at such time able to sell pursuant
to Rule 144 (without being limited by any volume restriction therein with
respect to Registrable Securities desired to be sold immediately by such
holder).
SECTION 4. Entire Agreement; Amendments and Waivers. This Agreement,
together with the Purchase Agreement and the agreements, schedules, exhibits and
annexes referred to therein, and the Certificate of Designation, represents the
entire agreement and understanding among the parties hereto with respect to the
subject matter hereof and supersedes any and all prior oral and written
agreements, arrangements and understandings among the parties hereto with
respect to such subject matters. This Agreement may be amended, waived or
modified only by a written instrument signed by the Company and the holder or
holders of a majority of the shares of Registrable Securities.
SECTION 5. Other Registration Rights. The Company hereby covenants and
agrees not to hereafter enter into any agreement, arrangement or understanding
with respect to its securities which conflicts with or is inconsistent with the
rights granted to the holders of Registrable Securities under this Agreement.
44
SECTION 6. Nominees for Beneficial Owners. In the event that any
Registrable Securities are held by a nominee for the beneficial owner thereof,
the beneficial owner thereof may, at its election, be treated as the holder of
such securities for purposes of any request or other action by any holder or
holders of securities pursuant to this Agreement or any determination of any
number or percentage of shares of securities held by any holder or holders of
securities contemplated by this Agreement. If the beneficial owner of any
Registrable Securities so elects, the Company may require assurances reasonably
satisfactory to it of such owner's beneficial ownership of such Registrable
Securities.
SECTION 7. Notices. Any notice, demand, request, waiver, or other
communication under this Agreement shall be in writing and shall be deemed to
have been duly given (i) on the date of service if personally served or
transmitted via telecopy, (ii) on the next business day after delivery to an
overnight carrier or (iii) on the third day after mailing if mailed to the party
to whom notice is to be given, by first class mail, registered, return receipt
requested, postage prepaid and (a) if addressed to the Purchasers, addressed to
such party in the manner set forth in the Purchase Agreement, or at such other
address as such
45
party shall have furnished to the Company in writing, or (b) if addressed to
any other holder of Registrable Securities, at the address that such holder
shall have furnished to the Company in writing, or, until any such other
holder so furnishes to the Company an address, then to and at the address of
the last holder of such securities who has furnished an address to the
Company, or (c) if addressed to the Company, at 000 Xxxxxxxx Xxxxxx Xxxxx,
Xxxxx Xxxxxxxx, Xxxxxxxx, 00000 attention of the General Counsel or at such
other address, or to the attention of such other officer, as the Company
shall have furnished to each holder of Registrable Securities at the time
outstanding.
SECTION 8. Assignment. This Agreement shall be binding upon and inure to
the benefit of and be enforceable by the parties hereto and their respective
successors by merger, consolidation or amalgamation and permitted assigns. The
Company may not assign any of its rights and obligations hereunder without the
consent of the holders of all the Registrable Securities then outstanding. Any
Purchaser may assign its rights hereunder without the consent of the Company to
any Purchaser Affiliate (as defined in the Purchase Agreement) or successor or
to any Person who purchases or otherwise duly receives title to 10% or more of
the Registrable Securities then outstanding; provided that
46
such assignee agrees in writing to be bound by the terms of this Agreement.
This Agreement shall not inure to the benefit of any person who is not a
party hereto or a successor to or permitted assignee of a party hereto.
SECTION 9. Descriptive Headings. The descriptive headings of the several
sections and paragraphs of this Agreement are inserted for reference only and
shall not limit or otherwise affect the meaning hereof.
SECTION 10. APPLICABLE LAW. THIS AGREEMENT SHALL BE GOVERNED BY, CONSTRUED
AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, APPLICABLE TO
CONTRACTS TO BE MADE, EXECUTED, DELIVERED AND PERFORMED WHOLLY WITHIN SUCH STATE
AND, IN ANY CASE, WITHOUT REGARD TO THE CONFLICTS OF LAW PRINCIPLES OF SUCH
STATE.
SECTION 11. Severability. If at any time subsequent to the date hereof, any
provision of this Agreement shall be held by any court of competent jurisdiction
to be illegal, void or unenforceable, such provision shall be of no force and
effect, but the illegality or unenforceability of such provision shall have no
effect upon and shall not impair the enforceability of any other provision of
this Agreement.
47
SECTION 12. Equitable Remedies. The parties hereto agree that irreparable
harm would occur in the event that any of the agreements and provisions of this
Agreement were not performed fully by the parties hereto in accordance with
their specific terms or conditions or were otherwise breached, and that money
damages are an inadequate remedy for breach of this Agreement because of the
difficulty of ascertaining and quantifying the amount of damage that will be
suffered by the parties hereto in the event that this Agreement is not performed
in accordance with its terms or conditions or is otherwise breached. It is
accordingly hereby agreed that the parties hereto shall be entitled to an
injunction or injunctions to restrain, enjoin and prevent breaches of this
Agreement by the other parties and to enforce specifically the terms and
provisions hereof in any court of the United States or any state having
jurisdiction, such remedy being in addition to and not in lieu of, any other
rights and remedies to which the other parties are entitled to at law or in
equity.
SECTION 13. No Waiver. The failure of any party at any time or times to
require performance of any provision hereof (within the time limitations
contained herein) shall not affect the right at a later time to enforce the
same. No waiver by any party of any condition, and no breach of
48
any provision, term, covenant, representation or warranty contained in this
Agreement, whether by conduct or otherwise, in any one or more instances,
shall be deemed to be construed as a further or continuing waiver of any such
condition or of the breach of any other provision, term, covenant,
representation or warranty of this Agreement.
SECTION 14. Counterparts. This Agreement may be executed simultaneously in
any number of counterparts, each of which shall be deemed an original, but all
such counterparts shall together constitute one and the same instrument.
49
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
and delivered by their respective officers thereunto duly authorized as of the
date first above written.
THE COMPANY
SALTON/MAXIM HOUSEWARES, INC.
By:
------------------------------
Name:
Title:
THE PURCHASERS:
CENTRE CAPITAL INVESTORS II, L.P.
CENTRE CAPITAL TAX-EXEMPT INVESTORS II, L.P.
CENTRE CAPITAL OFFSHORE INVESTORS II, L.P.
By: Centre Partners II, L.P.
General Partner
By: Centre Partners Management LLC
Attorney-in-fact
By:
------------------------------------
Xxxxx X. Xxxxxxx
Managing Director
00
XXXXX XXXXX XX XXXXXXXXXXXXXX XX XXXXXXX
By: Centre Parallel Management Partners, L.P.
Manager
By: Centre Partners Management LLC
Attorney-in-fact
By:
-----------------------------------------
Xxxxx X. Xxxxxxx
Managing Director
CENTRE PARALLEL MANAGEMENT PARTNERS, L.P.
CENTRE PARTNERS COINVESTMENT, L.P.
By: Centre Partners II LLC
General Partner
By:
---------------------------------------
Xxxxx X. Xxxxxxx
Managing Director
51
