EXHIBIT 10.36
THIRD AMENDMENT
THIRD AMENDMENT, dated as of October 16, 2001 (this "Third Amendment"),
to the Third Amended and Restated Credit Agreement, dated as of September 26,
2000, as amended by the First Amendment, dated as of April 13, 2001, as amended
by the Second Amendment, dated as of June 5, 2001 (as heretofore amended or
otherwise modified, 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 bookrunner (in such
capacity, the "Arranger"), FIRSTAR BANK, N.A., as syndication agent (in such
capacity, the "Syndication Agent"), and XXXXXX COMMERCIAL PAPER INC., as
administrative agent (in such capacity, the "Administrative Agent").
W I T N E S S E T H:
- - - - - - - - - --
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 as follows:
ARTICLE I.
AMENDMENTS TO THE CREDIT AGREEMENT
Section 1.1. Amendment to Section 1.1 of the Credit Agreement. Section
1.1 of the Credit Agreement is hereby amended by inserting the following new
text immediately prior to the semicolon in clause (v) of the definition of
"Permitted Acquisition":
"(provided that until such time as the Net Average Total Debt Ratio is
less than or equal to 2.50 to 1.00 (as calculated on a pro forma basis
after taking into account such acquisition (including the incurrence of
debt related to such acquisition)), the aggregate consideration for
such acquisition shall not exceed $20,000,000)"
Section 1.2. Amendment to Section 7.1 of the Credit Agreement. (a)
Section 7.1(a) of the Credit Agreement is hereby amended by deleting the last
two rows of the table and substituting in lieu thereof the following rows:
FQ1 2002 3.00 to 1
FQ2 2002 through FQ2 2003 3.50 to 1
FQ3 2003 and FQ4 2003 3.25 to 1
FQ1 2004 through FQ3 2004 3.00 to 1
FQ4 2004 thereafter 2.75 to 1
(b) Section 7.1(c) of the Credit Agreement is hereby amended in its
entirety by substituting in lieu thereof the following new Section 7.1(c):
"(c) Consolidated Interest Coverage Ratio. Permit the Consolidated
Interest Coverage Ratio for any period of four consecutive fiscal
quarters of the Borrower to be less than the ratio set forth opposite
such fiscal quarter:
Fiscal Quarter Ratio
-------------- -----
FQ1 2002 3.25 to 1
FQ2 2002 through FQ2 2003 2.75 to 1
FQ3 2003 through FQ2 2004 3.00 to 1
FQ3 2004 thereafter 3.25 to 1
(c) Section 7.1(d) of the Credit Agreement is hereby amended by
deleting the text "through FQ2 2004" in the last row of the table and then
inserting the following new row:
FQ1 2002 1.30 to 1
FQ2 2002 through FQ2 2004 1.20 to 1
FQ3 2004 thereafter 1.30 to 1
Section 1.3. Amendment to Section 7.6 of the Credit Agreement. Section
7.6 is hereby amended by inserting the following new text immediately prior to
the period at the end thereof:
"(provided that until such time as the Net Average Total Debt Ratio is
less than or equal to 2.50 to 1.00 (as calculated on a pro forma basis
after taking into account any repurchase of Capital Stock (including
the incurrence of debt related to any such repurchase)), the Borrower
may not purchase any Capital Stock pursuant to this clause (b))"
Section 1.4. Amendment to Annex A.
Annex A to the Credit Agreement is hereby amended in its entirety by
substituting in lieu thereof a new Annex A in the form of Exhibit B hereto.
ARTICLE II.
MISCELLANEOUS
Section 2.1. Conditions to the effectiveness of the Third Amendment.
This Third Amendment shall become effective as of the date each of the
conditions precedent set forth below shall have been fulfilled (the "Third
Amendment Effective Date"):
(a) Third Amendment. The Administrative Agent shall have received this
Third Amendment, executed and delivered by a duly authorized officer of the
Borrower and each other Loan Party.
(b) 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.
(c) No Default. No Default or Event of Default shall have occurred and
be continuing on such date or after giving effect to this Third Amendment.
(d) 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 Third Amendment
Effective Date as if made on and as of the Third 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 October 16, 2001, an amendment fee in an amount equal to 0.25% of
the Aggregate Exposure of such Lender.
Section 2.2. Representation and Warranties. The Borrower represents and
warrants to each Lender and the Administrative Agent as follows:
(a) Corporate Power; Authorization; Enforceable Obligations; No Legal
Bar.
(i) The Borrower has the power and authority to execute and deliver
this Third Amendment and to perform each of the Loan Documents as amended by
this Third Amendment and each agreement or instrument contemplated hereby or
thereby to which it is or will be a party.
(ii) This Third Amendment has been duly executed and delivered by the
Borrower and constitutes, and each other Loan Document as amended by this
Third Amendment constitutes, a legal, valid and binding obligation of such
party enforceable against the Borrower accordance with its 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).
(b) 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 Third Amendment Effective Date, except as they may
specifically relate to an earlier date.
Section 2.3. Continuing Effect of Credit Agreement. This Third
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.
Section 2.4. Acknowledgment and Consent. Each of the Loan Parties
hereby:
(a) acknowledges and consents to the execution and delivery of this
Third Amendment and performance of the Credit Agreement;
(b) 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 Third Amendment;
(c) agrees that all of the "Collateral" (as defined in the Security
Documents) secures, and continues to secure, all of the Obligations of the Loan
Parties referred to in paragraph (b) above; and
(d) agrees that the execution and delivery of this Third 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 Third 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.
Section 2.5. Expenses. The Borrower agrees to pay or reimburse the
Administrative Agent, the Syndication Agent, the Documentation Agent and the
Arranger for all of their reasonable out-of-pocket costs and expenses incurred
in connection with (a) the negotiation, preparation, execution and delivery of
this Third 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 (b) the enforcement or preservation of any rights under
this Third Amendment and any other such documents.
Section 2.6. GOVERNING LAW. THIS THIRD AMENDMENT SHALL BE GOVERNED BY,
AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW
YORK.
Section 2.7. Counterparts. This Third 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.
IN WITNESS WHEREOF, the parties have caused this Third 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: /s/ XXXX X. XXXXXXXX
------------------------------------
Name: Xxxx X. Xxxxxxxx
Title: Senior V.P., CFO
Salton Toastmaster Logistics LLC,
as a Subsidiary Borrower
By: TOASTMASTER INC., as sole Member
By: /s/ XXXX X. XXXXXXXX
------------------------------------
Name: Xxxx X. Xxxxxxxx
Title: Senior V.P., CFO
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:
LASALLE BANK NATIONAL ASSOCIATION,
as an Issuing Lender
By:
-----------------------------------
Name:
Title:
Acknowledged and Consented:
SALTON INTERNATIONAL CV
By: /s/ XXXX X. XXXXXXXX
----------------------------
Name: Xxxx X. Xxxxxxxx
Title: Senior V.P
HOME CREATIONS DIRECT, LTD.
By: /s/ XXXX X. XXXXXXXX
----------------------------
Name: Xxxx X. Xxxxxxxx
Title: Senior V.P
SALTON HOLDINGS, INC.
By: /s/ XXXX X. XXXXXXXX
----------------------------
Name: Xxxx X. Xxxxxxxx
Title: Senior X.X
XXXXXX PRODUCTS COMPANY
By: /s/ XXXX X. XXXXXXXX
----------------------------
Name: Xxxx X. Xxxxxxxx
Title: Senior V.P
SONEX INTERNATIONAL CORPORATION
By: /s/ XXXX X. XXXXXXXX
----------------------------
Name: Xxxx X. Xxxxxxxx
Title: Senior V.P
TOASTMASTER INC.
By: /s/ XXXX X. XXXXXXXX
----------------------------
Name: Xxxx X. Xxxxxxxx
Title: Senior V.P
EXHIBIT A
LENDER CONSENT LETTER
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 (as heretofore amended or modified, 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 Third Amendment to which a form of this
Lender Consent Letter is attached as Exhibit A (the "Third Amendment").
Pursuant to Section 10.1 of the Credit Agreement, the undersigned
Lender hereby consents to the execution by the Administrative Agent of the Third
Amendment.
Very truly yours,
[NAME OF LENDER]
By:
----------------------------
Name:
Title:
Dated as of October 16, 2001
