EXHIBIT 99.1
EXECUTION COPY
EIGHTH AMENDMENT
TO, AND WAIVER UNDER, AMENDED AND RESTATED CREDIT AGREEMENT
THIS EIGHTH AMENDMENT TO, AND WAIVER UNDER, AMENDED AND RESTATED CREDIT
AGREEMENT (this "Eighth Amendment") is made and entered into as of May 10, 2006,
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 of May 11, 2005, as of July 8, 2005, as of September 22,
2005, as of October 7, 2005, as of November 9, 2005, and as of February 8, 2006,
and as it may be further amended, modified, supplemented or amended and restated
from time to time, the "Credit Agreement");
WHEREAS, in March 2006, the Parent settled the Xxxxxx Xxxxxx x. Xxxxxx,
Inc. class action lawsuit for $3,000,000 (the "Settlement Amount") (a
description of such settlement is set forth in Schedule 1 attached hereto);
WHEREAS, the Parent's insurance company has paid $2,500,000 of the
Settlement Amount, and the remaining $500,000 of the Settlement Amount is
payable by the Parent on or prior to July 16, 2007;
WHEREAS, the Parent is required to accrue this $500,000 as an expense
(the "Accrual Amount");
WHEREAS, Borrowers have requested, and the Agent, the Co-Agent and the
Lenders have agreed, to amend the definition of EBITDA to exclude the Accrual
Amount;
WHEREAS, pursuant to Section 7 of the Sixth Amendment (as extended by
that certain Waiver and Consent under Amended and Restated Credit Agreement
dated as of December 20, 2005 and further extended pursuant to Section 2.01 of
the Seventh Amendment to, and Waiver Under, Amended and Restated Credit
Agreement, dated as of February 8, 2006 (the "Seventh
Amendment") among the Borrower Parties, Agent, Co-Agent and the Lenders),
Borrowers agreed to deliver to the Co-Agent, on or prior to March 15, 2006, a
fully executed landlord waiver, in form and substance reasonably satisfactory to
the Agent and the Co-Agent, with respect to the property located at 0000 Xxxx
Xxxxxxxxxx Xxxxxx, Xxxxxxxx, Xxxxxxxxxx 00000 (the "Required Landlord Waiver");
WHEREAS, the Borrowers have failed to deliver the Required Landlord
Waiver (the "Landlord Waiver Default");
WHEREAS, the Borrowers have requested, and the Agent, the Co-Agent and
the Lenders have agreed, to waive the Landlord Waiver Default subject to the
terms and conditions set forth herein;
WHEREAS, Section 3 of the Sixth Amendment provides that the waivers
under the Security Agreement set forth therein (the "Section 3 Security
Agreement Waivers") shall be rescinded and no longer effective if the Required
Landlord Waiver is not obtained in compliance with Section 7 of the Sixth
Amendment; and
WHEREAS, the Borrowers have requested, and the Agent, the Co-Agent and
the Lenders have agreed, to extend the Section 3 Security Agreement Waivers
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 AND AGREEMENT IN CONNECTION WITH LANDLORD DEFAULT.
Subject to the satisfaction of the terms and conditions set forth herein, the
Agent, the Co-Agent and the Required Lenders hereby (a) waive the Landlord
Waiver Default solely with respect to the failure to deliver the Required
Landlord Waiver in accordance with Section 7 of the Sixth Amendment (as extended
by that certain Waiver and Consent under Amended and Restated Credit Agreement
dated as of December 20, 2005 and further extended pursuant to Section 2.01 of
the Seventh Amendment) and (b) agree that, notwithstanding Section 3 of the
Sixth Amendment, the Section 3 Security Agreement Waivers shall not be rescinded
and shall remain effective; provided, that the foregoing waiver and agreement
shall be rescinded and no longer effective if Administrative Borrower fails to
deliver to the Lenders a fully executed landlord waiver, in form and substance
reasonably satisfactory to the Agent and the Co-Agent, with respect to the
property located at 0000 Xxxx Xxxxxxxxxx Xxxxxx, Xxxxxxxx, Xxxxxxxxxx 00000, on
or prior to June 15, 2006.
SECTION 3. AMENDMENT TO ANNEX A OF THE CREDIT AGREEMENT. The definition
of EBITDA set forth in Annex A of the Credit Agreement is hereby amended,
effective as of the date this Eighth Amendment becomes effective in accordance
with Section 5 hereof, by adding
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the following at the end thereof: "Notwithstanding the foregoing, the
calculation of EBITDA shall not include the $500,000 accrual made by Borrowers
in connection with the settlement of the Xxxxxx Xxxxxx x. Xxxxxx, Inc. class
action lawsuit."
SECTION 4. REPRESENTATIONS AND WARRANTIES. In order to induce the
Agent, the Co-Agent and the Lenders to enter into this Eighth Amendment, the
Borrower Parties hereby represent and warrant that:
4.01 NO DEFAULT. At and as of the date of this Eighth Amendment and
after giving effect to this Eighth Amendment, no Default or Event of Default
exists.
4.02 REPRESENTATIONS AND WARRANTIES TRUE AND CORRECT. At and as of the
date of this Eighth Amendment and both prior to (other than with respect to the
Landlord Waiver Default) and after giving effect to this Eighth Amendment, 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 Eighth Amendment 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 Eighth Amendment and the consummation of the transactions
contemplated hereby.
4.04 NO CONFLICT. Neither the execution and delivery of this Eighth
Amendment 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.
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4.05 BINDING EFFECT. This Eighth Amendment 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 Eighth Amendment shall be effective upon
the fulfillment by the Borrower Parties, in a manner satisfactory to the
Co-Agent, the Agent and the Lenders, of all of the following conditions
precedent set forth in this Section 5 (such date, the "Effective Date"):
5.01 EXECUTION OF THE EIGHTH AMENDMENT. Each of the parties hereto
shall have executed an original counterpart of this Eighth Amendment and shall
have delivered (including by way of telefacsimile or electronic mail) the same
to the Co-Agent.
5.02 REPRESENTATIONS AND WARRANTIES. As of the Effective Date, the
representations and warranties set forth in Section 4 hereof shall be true and
correct.
5.03 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.
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 Eighth Amendment is limited
as specified and the execution, delivery and effectiveness of this Eighth
Amendment 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 Eighth
Amendment 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 REFERENCES.
(a) From and after the Effective Date, (i) the Credit Agreement,
the other Loan Documents and all agreements, instruments and documents executed
and delivered in connection with any of the foregoing shall each be deemed
amended hereby to the extent necessary, if any, to give effect to the provisions
of this Eighth Amendment and (ii) all of the
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terms and provisions of this Eighth Amendment are hereby incorporated by
reference into the Credit Agreement, as applicable, as if such terms and
provisions were set forth in full therein, as applicable.
(b) From and after the Effective Date, (i) all references in the
Credit Agreement to "this Agreement", "hereto", "hereof", "hereunder" or words
of like import referring to the Credit Agreement shall mean the Credit Agreement
as amended hereby and (ii) all references in the Credit Agreement, the other
Loan Documents or any other agreement, instrument or document executed and
delivered in connection therewith to "Credit Agreement", "thereto", "thereof",
"thereunder" or words of like import referring to the Credit Agreement shall
mean the Credit Agreement as amended hereby.
6.04 GOVERNING LAW. THIS EIGHTH AMENDMENT, 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.
6.05 SEVERABILITY. The provisions of this Eighth Amendment 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 Eighth
Amendment in any jurisdiction.
6.06 COUNTERPARTS. This Eighth Amendment 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 Eighth Amendment by
telefacsimile or electronic mail shall be equally effective as delivery of a
manually executed counterpart. A complete set of counterparts shall be lodged
with the Borrower Parties, the Agent, the Co-Agent and each Lender.
6.07 HEADINGS. Section headings in this Eighth Amendment are included
herein for convenience of reference only and shall not constitute a part of this
Eighth Amendment for any other purpose.
6.08 BINDING EFFECT; ASSIGNMENT. This Eighth Amendment 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 Eighth
Amendment shall not be assigned or delegated without the prior written consent
of the Agent, the Co-Agent and the Lenders.
6.09 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
Eighth Amendment and any document required to be furnished herewith.
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6.10 INTEGRATION. This Eighth Amendment, 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.
[Signature pages follow]
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IN WITNESS WHEREOF, the parties hereto have caused this Eighth
Amendment to be executed by their respective officers thereunto duly authorized,
as of the date first above written.
BORROWERS:
SALTON, INC., a Delaware corporation
By:
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Title:
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TOASTMASTER INC., a Missouri
corporation
By:
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Title:
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SALTON TOASTMASTER LOGISTICS LLC, a
Delaware limited liability company
By:
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Title:
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GUARANTORS:
HOME CREATIONS DIRECT, LTD.,
a Delaware corporation
By:
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Title:
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SONEX INTERNATIONAL CORPORATION, a
Delaware corporation
By:
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Title:
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[SIGNATURE PAGE OF SALTON EIGHTH AMENDMENT]
ICEBOX, LLC, an Illinois limited
liability company
By:
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Title:
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FAMILY PRODUCTS INC., a Delaware
corporation
By:
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Title:
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SALTON HOLDINGS, INC., a Delaware
corporation
By:
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Title:
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AGENT, CO-AGENT AND LENDERS:
XXXXX FARGO FOOTHILL, INC.
as the Administrative Agent, the
Collateral Agent and as a Lender
By:
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Title:
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SILVER POINT FINANCE, LLC, as the
Co-Agent, the Documentation Agent, and
the Syndication Agent
By:
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Title:
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[SIGNATURE PAGE OF SALTON EIGHTH AMENDMENT]
TRS THEBE LLC, as a Lender
By:
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Title:
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SPIRET IV LOAN TRUST 2003-A, as a
Lender
By: WILMINGTON TRUST COMPANY, not in
its individual capacity but solely as
trustee
By:
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Title:
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FIELD POINT I, LTD., as a Lender
By:
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Title:
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FIELD POINT II, LTD., as a Lender
By:
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Title:
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FIELD POINT III, LTD., as a Lender
By:
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Its:
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FIELD POINT IV, LTD., as a Lender
By:
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Its:
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[SIGNATURE PAGE OF SALTON EIGHTH AMENDMENT]
SCHEDULE 1
Description of Xxxxxx Xxxxxx x. Xxxxxx, Inc. Class Action Lawsuit
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See attached.
