REGISTRATION RIGHTS AGREEMENT between SALTON INC., and CONTRARIAN EQUITY FUND, L.P. Dated as of October 1, 2007
Exhibit 99.7
between
and
CONTRARIAN EQUITY FUND, L.P.
Dated as of October 1, 2007
TABLE OF CONTENTS
Page
Section 1.
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Definitions | 1 | ||||
Section 2.
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Registration | 3 | ||||
Section 3.
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Stockholder’s Obligations | 6 | ||||
Section 4.
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Registration Expenses | 6 | ||||
Section 5.
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Indemnification | 7 | ||||
Section 6.
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Miscellaneous | 9 |
i
THIS REGISTRATION RIGHTS AGREEMENT (this “Agreement”) is made and entered into as of
October 1, 2007 by and between Salton, Inc., a Delaware corporation (the “Company”), and
Contrarian Equity Fund, L.P., a Delaware limited liability (the “Stockholder”).
WHEREAS, pursuant to the Agreement and Plan of Merger, dated as of October ___, 2007 (as the
same may be amended, modified and supplemented from time to time prior to the date hereof, the
“Merger Agreement”), by and among the Company, SFP Merger Sub, Inc., a Delaware corporation
and a direct wholly owned subsidiary of the Company (“MergerSub”), and APN Holding Company,
Inc. a Delaware corporation (“APN Holdco”), MergerSub will merge with and into APN Holdco
(the “Merger”), and as a result thereof APN Holdco, the parent company of Applica, Inc.,
will become a wholly-owned subsidiary of the Company, and each outstanding share of the common
stock of APN Holdco will be converted into the right to receive fully paid and non assessable
shares of common stock, par value $0.01 per share, of the Company (the “Common Stock”);
WHEREAS, pursuant to the terms of an amendment to the terms of the Certificate of Designation
of Series C Preferred Stock of the Company (the “Series C Amendment”), concurrently with
the effective time of the Merger (the “Effective Time”), outstanding shares of the
Company’s Series C Preferred Stock (including shares of Series C Preferred Stock owned by the
Stockholder) will be converted into shares of Common Stock;
WHEREAS, in order to induce the Stockholder to consent to the Series C Amendment, the Company
has agreed to provide the Stockholder with the registration rights set forth herein
NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth herein and
for good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the
parties hereto agree as follows:
Section 1. Definitions. As used in this Agreement, the following terms shall have the following
meanings:
“Affiliate” means, with respect to any Person, any other Person that directly or
indirectly controls, is controlled by or is under common control with, such first Person. For the
purposes of this definition, “control” (including, with correlative meanings, the terms
“controlling,” “controlled by” and “under common control with”), as applied to any Person, means
the possession, directly or indirectly, of the power to direct or cause the direction of the
management and policies of that Person, whether through the ownership of voting securities, by
contract or otherwise.
“Agreement” has the meaning set forth in the preamble.
“Business Day” means any day other than a Saturday, Sunday or other day on which banks
in New York City are permitted or required by law to be closed, and shall consist of the time
period from 12:01 a.m. through 12:00 midnight Eastern time.
“Closing Date” has the meaning set forth in the Merger Agreement.
“Common Stock” has the meaning set forth in the recitals.
“Company” has the meaning set forth in the preamble.
“Deferral Notice” has the meaning set forth in Section 2(e)(ii).
“Deferral Period” shall mean a period commencing on the date that the Company delivers
a Deferral Notice to the Stockholder and terminating on the date that the Company informs that
Stockholder pursuant to Section 2(f) that it may continue to sell Registrable Securities pursuant
to the Prospectus.
“Disclosure Package” means (i) the preliminary prospectus, (ii) each Free Writing
Prospectus and (iii) all other information that is deemed, under Rule 159 under the Securities Act,
to have been conveyed to purchasers of securities at the time of sale (including, without
limitation, a contract of sale).
“Effective Time” has the meaning set forth in the recitals.
“Effectiveness Period” means the period commencing on the day on which the Effective
Time occurs and ending on the earlier of (i) September 7, 2008 and (ii) the date that all
Registrable Securities have ceased to be Registrable Securities.
“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules
and regulations of the SEC promulgated thereunder.
“Free Writing Prospectus” means any “free writing prospectus,” as defined in Rule 405
of the Securities Act.
“Holder Indemnified Party” has the meaning set forth in Section 5(a).
“Indemnified Party” has the meaning set forth in Section 5(c).
“Indemnifying Party” has the meaning set forth in Section 5(c).
“Losses” has the meaning set forth in Section 5(a).
“Material Event” has the meaning set forth in Section 2(e).
“Merger” has the meaning set forth in the recitals.
“Merger Agreement” has the meaning set forth in the recitals.
“Merger Sub” has the meaning set forth in the recitals.
“Person” means any individual or legal entity, including any partnership, joint
venture, corporation, trust, unincorporated organization, limited liability company or governmental
entity.
“Prospectus” means the prospectus included in the Shelf Registration Statement
(including, without limitation, a prospectus that discloses information previously omitted from a
prospectus filed as part of an effective registration statement in reliance upon Rule 430A
promulgated under the Securities Act), as amended or supplemented by any amendment or
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prospectus supplement, including post-effective amendments, and all materials incorporated by
reference or explicitly deemed to be incorporated by reference in such Prospectus.
“Public Sale” means any sale of Registrable Securities to the public pursuant to a
public offering registered under the Securities Act or to the public through a broker or market
maker pursuant to the provisions of Rule 144 or any other public offering not required to be
registered under the Securities Act.
“Questionnaire” means a written notice and questionnaire in customary form delivered
by the Stockholder to the Company.
“Registrable Securities” means any and all shares of Common Stock owned by the
Stockholder immediately after the Effective Time (including shares of Common Stock into which the
Stockholder’s shares of Series C Preferred Stock have been converted as a result of the Series C
Amendment) and any shares of capital stock or other equity interests issued or issuable to the
Stockholder with respect to such shares of Common Stock by way of stock dividend or stock split or
in connection with a combination of shares, recapitalization, merger, consolidation or other
reorganization; provided, however, Registrable Securities shall not include shares
of Common Stock (or any other shares of capital stock or other equity interests) that (i) have been
sold in a Public Sale, (ii) may be sold by the Stockholder without restriction (including volume
and manner of sale restrictions) on a single day without registration in compliance with Rule 144
or (iii) cease to be outstanding.
“Rule 144” means Rule 144 under the Securities Act, as such Rule may be amended from
time to time, or any similar rule or regulation hereafter adopted by the SEC having substantially
the same effect as such rule.
“Form S-3” means such form under the Securities Act as in effect on the date hereof or
any successor form under the Securities Act subsequently adopted by the SEC which permits forward
inclusion or incorporation of substantial information by reference to other documents filed by the
Company with the SEC.
“SEC” means the Securities and Exchange Commission or any successor agency then having
jurisdiction to enforce the Securities Act.
“Securities Act” means the Securities Act of 1933, as amended, and the rules and
regulations promulgated by the SEC thereunder.
“Series C Amendment” has the meaning set forth in the recitals.
“Shelf Registration Statement” has the meaning set forth in Section 2(a) Agreement
including the Prospectus, amendments and supplements to such registration statement, including
post-effective amendments, all exhibits, and all materials incorporated by reference or explicitly
deemed to be incorporated by reference in such registration statement.
“Stockholder” has the meaning set forth in the preamble.
Section 2. Registration.
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(a) The Company shall use commercially reasonable efforts to (i) prepare and file or cause to
be prepared and filed with the SEC, not later than 75 days after the effective date of the Merger,
a registration statement on Form S-3 (or such other form appropriate for such purpose) for an
offering to be made on a delayed or continuous basis pursuant to Rule 415 of the Securities Act (a
“Shelf Registration Statement”) registering the resale from time to time by the Stockholder
of all of the Registrable Securities, and (ii) cause the Shelf Registration Statement to be
declared effective under the Securities Act within 120 days following the Effective Time and,
subject to any Deferral Periods, to keep the Shelf Registration Statement continuously effective
under the Securities Act until the expiration of the Effectiveness Period. At the time the Shelf
Registration Statement is declared effective, the Stockholder shall be named as a selling
securityholder in the Shelf Registration Statement and the related Prospectus in such a manner as
to permit the Stockholder to deliver such Prospectus to purchasers of Registrable Securities in
accordance with applicable law.
(b) The Company will notify the Stockholder as promptly as practicable, (i) when the Shelf
Registration Statement, the Prospectus, any prospectus supplement, any Disclosure Package or any
post-effective amendment to the Shelf Registration Statement has been filed with the SEC and, with
respect to the Shelf Registration Statement or any post-effective amendment, when the same has been
declared effective, (ii) of any request, following the effectiveness of the Shelf Registration
Statement under the Securities Act, by the SEC or any other federal or state governmental authority
for amendments or supplements to the Shelf Registration Statement or related Prospectus or for
additional information, (iii) of the issuance by the SEC or any other federal or state governmental
authority of any stop order suspending the effectiveness of the Shelf Registration Statement or the
initiation or threatening of any proceedings for that purpose, (iv) of the receipt by the Company
of any notification with respect to the suspension of the qualification or exemption from
qualification of any of the Registrable Securities for sale in any jurisdiction or the initiation
or threatening of any proceeding for such purpose, (v) of the occurrence of a Material Event and
(vi) of the determination by the Company that a post-effective amendment to the Shelf Registration
Statement will be filed with the SEC, which notice may, at the discretion of the Company (or as
required pursuant to Section 2(e)), state that it constitutes a Deferral Notice, in which event the
provisions of Section 2(e) shall apply.
(c) The Company will provide to the Stockholder, without charge, at least one conformed copy
of the Registration Statement and any amendment thereto, excluding all schedules, exhibits and all
documents incorporated or deemed to be incorporated therein by reference.
(d) During the Effectiveness Period, the Company will deliver to the Stockholder, in
connection with any sale of Registrable Securities pursuant to the Shelf Registration Statement,
without charge, as many copies of the Prospectus or Prospectuses relating to such Registrable
Securities (including each preliminary prospectus) and any amendment or supplement thereto as the
Stockholder may reasonably request; and the Company hereby consents (except during such periods
that a Deferral Notice is outstanding and has not been revoked) to the use of such Prospectus or
each amendment or supplement thereto by the Stockholder in connection with any offering and sale of
the Registrable Securities covered by such Prospectus or any amendment or supplement thereto in the
manner set forth therein.
(e) Upon (A) the issuance by the SEC of a stop order suspending the effectiveness of the Shelf
Registration Statement or the initiation of proceedings with respect to the Shelf Registration
Statement under Section 8(d) or 8(e) of the Securities Act, (B) the occurrence of
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any event or the existence of any fact (a “Material Event”) as a result of which the
financial statements included in the Shelf Registration Statement become ineligible for inclusion
therein, the Shelf Registration Statement shall 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, or any related Prospectus shall 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, in the light of the circumstances under which they were made, not misleading,
or (C) the occurrence or existence of any pending corporate development that, in the good faith
judgment of the Company makes it necessary or advisable to suspend the availability of the Shelf
Registration Statement and the related Prospectus for a discrete period of time because not to do
so would be detrimental to the Company and its subsidiaries:
(i) Subject to the Deferral Period, the Company shall, as promptly as practicable, prepare and
file, if necessary pursuant to applicable law, a post-effective amendment to the Shelf Registration
Statement or a supplement to the related Prospectus or any document incorporated therein by
reference or file any other required document that would be incorporated by reference into the
Shelf Registration Statement and Prospectus so that the Shelf Registration Statement does 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 such Prospectus does
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, in the light of the circumstances
under which they were made, not misleading, as thereafter delivered to the purchasers of the
Registrable Securities being sold thereunder, and, in the case of a post-effective amendment to the
Shelf Registration Statement, use its commercially reasonable efforts to cause it to be declared
effective as promptly as is practicable, and
(ii) give notice to the Stockholder that the availability of the Shelf Registration Statement
is suspended (a “Deferral Notice”) and, upon receipt of any Deferral Notice, the
Stockholder agrees not to sell any Registrable Securities pursuant to the Shelf Registration
Statement until the Stockholder’s receipt of copies of the supplemented or amended Prospectus
provided for in clause (i) above, or until it is advised in writing by the Company that the
Prospectus may be used, and has received copies of any additional or supplemental filings that are
incorporated or deemed incorporated by reference in such Prospectus.
(f) The Company shall use its commercially reasonable efforts to ensure that the use of the
Prospectus may be resumed (x) in the case of clause (A) or (B) above, as promptly as is
practicable, and (y) in the case of clause (C) above, as soon as practicable after, in the good
faith judgment of the Company, public disclosure of such pending corporate development would no
longer be detrimental to the interests of the Company. The Company shall promptly notify the
Stockholder when the use of the Prospectus may be so resumed.
(g) Prior to any public offering of the Registrable Securities pursuant to the Shelf
Registration Statement, the Company shall (x) use commercially reasonable efforts to (i) register
or qualify or cooperate with the Stockholder in connection with the registration or qualification
(or exemption from such registration or qualification) of such Registrable Securities for offer and
sale under the securities or Blue Sky laws of such jurisdictions within the United States as the
Stockholder reasonably requests in writing (which request may be included in the Questionnaire),
and (ii) keep each such registration or qualification (or exemption therefrom) effective during the
Effectiveness Period in connection with the offer and sale of Registrable Securities pursuant to
such registration or qualification (or exemption therefrom) and (y) do any and
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all other acts or things reasonably necessary or advisable to enable the disposition in such
jurisdictions of such Registrable Securities in the manner set forth in the Shelf Registration
Statement and the related Prospectus; provided, that the Company will not be required to (i)
qualify as a foreign corporation or as a dealer in securities in any jurisdiction where it would
not otherwise be required to qualify but for this Agreement or (ii) take any action that would
subject it to general service of process in suits or to taxation in any such jurisdiction where it
is not then so subject.
(h) The Company shall cooperate with the Stockholder to facilitate the timely preparation and
delivery of certificates representing Registrable Securities to be delivered to a transferee
pursuant to the Shelf Registration Statement, which certificates shall be free of all restrictive
legends, and to enable such Registrable Securities to be in such full share denominations and
registered in such names as the Stockholder may request.
(i) The Company shall use its reasonable best efforts to cause all Registrable Securities
registered under to the Shelf Registration Statement to be listed on the OTC Bulletin Board or any
other securities exchange, quotation system or market, if any, on which similar securities issued
by the Company are then listed or traded.
(j) Not less than four trading days prior to the filing of the Shelf Registration Statement or
any related Prospectus or any amendment or supplement thereto, the Company shall furnish to the
Stockholder copies of the “Selling Stockholder” section of such document, the “Plan of
Distribution” and any risk factor contained in such document that addresses specifically the
Selling Stockholder, as proposed to be filed which documents will be subject to the review of the
Stockholder. The Company shall not file a Shelf Registration Statement, any Prospectus or any
amendments or supplements thereto in which the “Selling Stockholder” section thereof differs from
the disclosure received from a Stockholder in its Questionnaire (as amended or supplemented).
Section 3. Stockholder’s Obligations. The Stockholder agrees that it shall not be entitled to
sell any of such Registrable Securities pursuant to the Shelf Registration Statement or to receive
a Prospectus relating thereto, unless it has furnished the Company with a Questionnaire (including
the information required to be included in the Questionnaire) and the information set forth in the
next sentence. The Stockholder agrees promptly to furnish to the Company all information required
to be disclosed in order to make the information previously furnished to the Company by the
Stockholder not misleading and any other information regarding the Stockholder and the distribution
of such Registrable Securities as the Company may from time to time reasonably request. The sale
of any Registrable Securities by the Stockholder shall constitute a representation and warranty by
the Stockholder that the information relating to the Stockholder and its plan of distribution is as
set forth in the Prospectus delivered by the Stockholder in connection with such disposition, that
such Prospectus does not as of the time of such sale contain any untrue statement of a material
fact relating to or provided by the Stockholder or its plan of distribution and that such
Prospectus does not as of the time of such sale omit to state any material fact relating to or
provided by the Stockholder or its plan of distribution necessary to make the statements in such
Prospectus, in the light of the circumstances under which they were made, not misleading.
Section 4. Registration Expenses. The Company shall bear all fees and expenses incurred by it in connection with the
performance by the Company of its obligations under Section 2 of this Agreement. Such fees and
expenses shall include, without limitation, (i) all registration and filing fees, (ii) printing
expenses, (iii) duplication expenses relating to copies of the Shelf Registration Statement or
Prospectus delivered to the Stockholder hereunder, (iv) fees and
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disbursements of counsel for the Company. Notwithstanding the provisions of this Section 4, the Company shall not be responsible to
pay any underwriting discounts, commissions or any stock transfer taxes which may be incurred by
the Stockholder in connection with any sale of Registrable Securities.
Section 5. Indemnification.
(a) Indemnification by the Company. The Company shall indemnify and hold harmless the
Stockholder, each director, officer or Affiliate of any of the Stockholder and each Person, if any,
who controls (within the meaning of either Section 15 of the Securities Act or Section 20 of the
Exchange Act) any of the foregoing Persons (collectively the “Holder Indemnified Parties”),
from and against any and all losses, claims, damages and liabilities (including, without
limitation, any legal or other expenses reasonably incurred in connection with defending or
investigating any such action or claim) (collectively, “Losses”) caused by any untrue
statement or alleged untrue statement of a material fact contained in the Shelf Registration
Statement or any amendment thereof, any preliminary prospectus or the Prospectus (as amended or
supplemented if the Company shall have furnished any amendments or supplements thereto) or the
Disclosure Package, or caused by any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein in light of the
circumstances under which they were made not misleading or any other violations of applicable
securities laws, except insofar as such Losses are caused by any such untrue statement or omission
or alleged untrue statement or omission based upon information relating to such Holder Indemnified
Party furnished to the Company in writing by such Holder Indemnified Party expressly for use
therein; provided, that the Company shall not be liable to any Holder Indemnified Party to
the extent that such Losses arise out of or are based upon an untrue statement or alleged untrue
statement of material fact or omission or alleged omission if either (i) (A) such Holder
Indemnified Party was required by law to send or deliver, and failed to send or deliver, a copy of
the Prospectus with or prior to delivery written confirmation of the sale by such Holder
Indemnified Party to the Person asserting the claims from which the Losses arise and (B) the
Prospectus would have corrected such untrue statement or omission or alleged omission or
(ii) (A) such Holder Indemnified Party disposed of Registrable Securities to the Person asserting
the claim from which such Losses arise pursuant to the Shelf Registration Statement and sent or
delivered, or was required by law to send or deliver, a Prospectus to such Person in connection
with the disposition, (B) such Holder Indemnified Party received a Deferral Notice in writing prior
to the date of such disposition and (C) such untrue statement or omission or alleged omission was
the reason for the Deferral Notice.
(b) Indemnification by Stockholder. The Stockholder agrees to indemnify and hold
harmless the Company, the directors of the Company, the officers of the Company who sign the
Registration Statement, and each person, if any, who controls the Company (within the meaning of
either Section 15 of the Securities Act or Section 20 of the Exchange Act), from and against all
Losses caused by any untrue statement or alleged untrue statement of a material fact contained in
any Registration Statement or any amendment thereof, any preliminary prospectus or the Prospectus
(as amended or supplemented if the Company shall have furnished any amendments or supplements
thereto) or the Disclosure Package, or caused by any omission or alleged omission to state therein
a material fact required to be stated therein or necessary to make the statements
therein not misleading, but only (i) with reference to information relating to such
Stockholder furnished to the Company in writing by such Stockholder expressly for use in the Shelf
Registration Statement, any preliminary prospectus, the Prospectus, the Disclosure Package or any
amendments or supplements thereto or (ii) with respect to any Losses that may arise as a result of
the disposition by the Stockholder of Registrable Securities to the Person asserting the claim from
which such
7
Losses arise pursuant to the Shelf Registration Statement, the Prospectus or any
amendments or supplements thereto if the Stockholder sent or delivered, or was required by law to
send or deliver, a Prospectus in connection with such disposition, the Stockholder received a
Deferral Notice with respect to such prospectus in writing prior to the date of such disposition
and the untrue statement or alleged untrue statement or omission or alleged omission was the reason
for the Deferral Notice. In no event shall the liability of the Stockholder hereunder be greater
in amount than the dollar amount of the net proceeds received by the Stockholder upon the sale of
the Registrable Securities giving rise to such indemnifications obligation.
(c) Conduct of Indemnification Proceedings. In case any proceeding (including any
governmental investigation) shall be instituted involving any Person in respect of which indemnity
may be sought pursuant to Section 6(a) or 6(b), such Person (the “Indemnified Party”) shall
promptly notify the Person against whom such indemnity may be sought (the “Indemnifying
Party”) in writing and the Indemnifying Party, upon request of the Indemnified Party, shall
retain counsel reasonably satisfactory to the Indemnified Party to represent the Indemnified Party
and any others the Indemnifying Party may designate in such proceeding and shall pay the fees and
disbursements of such counsel related to such proceeding. In any such proceeding, any Indemnified
Party shall have the right to retain its own counsel, but the fees and expenses of such counsel
shall be at the expense of such Indemnified Party unless (i) the Indemnifying Party has agreed in
writing to pay such fees and expenses or (ii) the named parties to any such proceeding (including
any impleaded parties) include both the Indemnifying Party and the Indemnified Party and, in the
reasonable judgment of the Indemnified Party, representation of both parties by the same counsel
would be inappropriate due to actual or potential differing interests between them. It is
understood that all such fees and expenses shall be reimbursed as they are incurred upon
presentation of a statement or statements thereof in reasonable detail and subject to an
undertaking to return such amounts if it is determined that such party is not entitled to
indemnification under this Agreement in respect of such matter. The Indemnifying Party shall not
be liable for any settlement of any proceeding effected without its written consent, but if settled
with such consent or if there be a final judgment for the plaintiff, the Indemnifying Party agrees
to indemnify the Indemnified Party from and against any loss or liability by reason of such
settlement or judgment. No Indemnifying Party shall, without the prior written consent of the
Indemnified Party, effect any settlement of any pending or threatened proceeding in respect of
which any Indemnified Party is or could have been a party and indemnity could have been sought
hereunder by such Indemnified Party, unless such settlement includes an unconditional release of
such Indemnified Party from all liability on claims that are the subject matter of such proceeding.
(d) Contribution. To the extent that the indemnification provided for in
Sections 5(a) or 5(b) is unavailable to an Indemnified Party or insufficient in respect of any
Losses referred to therein, then each Indemnifying Party under such paragraph, in lieu of
indemnifying such Indemnified Party thereunder, shall contribute to the amount paid or payable by
such indemnified party as a result of such Losses (i) in such proportion as is appropriate to
reflect the relative benefits received by the indemnifying party or parties on the one hand and the
Indemnified Party or parties on the other hand from the offering of the Registrable Securities or
(ii) if the allocation provided by clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not
only the relative benefits referred to in clause (i) above but also the relative fault of the
Indemnifying Party or parties on the one hand and of the Indemnified Party or parties on the other
hand in connection with the statements or omissions that resulted in such Losses, as well as any
other relevant equitable considerations. The relative fault of the Stockholder on the one hand and
the Company on the other hand shall be determined by reference to, among other things, whether
8
the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Stockholder or by the Company, and the
parties’ relative intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission.
(e) The parties hereto agree that it would not be just or equitable if contribution pursuant
to this Section 5(d) were determined by pro rata allocation or by any other method
of allocation that does not take account of the equitable considerations referred to in the
immediately preceding paragraph. The amount paid or payable by an Indemnified Party as a result of
the Losses referred to in the immediately preceding paragraph shall be deemed to include, subject
to the limitations set forth above, any legal or other expenses reasonably incurred by such
Indemnified Party in connection with investigating or defending any such action or claim. 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. The remedies provided for in this Section 5 are not exclusive and
shall not limit any rights or remedies which may otherwise be available to any Indemnified Party at
law or in equity.
(f) The indemnity and contribution provisions contained in this Section 5 shall remain
operative and in full force and effect regardless of (i) any termination of this Agreement,
(ii) any investigation made by or on behalf of the Stockholder or any person controlling the
Stockholder, or the Company, or the Company’s officers or directors or any person controlling the
Company and (iii) the sale of any Registrable Securities by the Stockholder.
Section 6. Miscellaneous.
(a) No Inconsistent Agreements. The Company represents and warrants that it has not
granted to any Person the right to request or require the Company to register any securities issued
by the Company that is inconsistent with the rights granted to the Stockholder in this Agreement.
The Company shall not enter into any agreement with respect to its securities that is inconsistent
with the rights granted to the Stockholder in this Agreement and the Company will not include in
the Shelf Registration Statement any securities other than the Registrable Securities.
(b) Interpretation. Any reference in this Agreement to a statute shall be to such
statute, as amended from time to time prior to the date hereof, and to the rules and regulations
promulgated thereunder prior to the date hereof. Any reference to any agreement, document or
instrument means such agreement, document or instrument as amended or otherwise modified from time
to time in accordance with its terms. Unless the context otherwise requires, (1) all references
made in this Agreement to an Article or Section are to an Article or Section of this Agreement,
(2) “or” is disjunctive but not necessarily exclusive, (3) “will” shall be deemed to have the same
meaning as the word “shall” and (4) words in the singular include the plural and vice versa.
Whenever the words “include,” “includes” or “including” are used in this Agreement, they shall be
deemed to be followed by the words “without limitation,” whether or not so followed. All
references to “$” or dollar amounts are to lawful currency of the United States of America, unless
otherwise expressly stated. The captions herein are included for convenience of reference
only and shall be ignored in the construction or interpretation hereof.
(c) Amendments and Waivers. This Agreement may be amended or modified, and any of the
terms hereof may be waived, only by written instrument duly executed by the Company and the
Stockholder. No waiver by any party of any term or condition contained in
9
this Agreement, in any
one or more instances, shall be deemed to be or construed as a waiver of the same or any other term
or condition contained in this Agreement on any future occasion.
(d) Notices. All notices, requests and other communications to any party hereunder
shall be in writing (including facsimile transmission) and shall be delivered by hand or overnight
courier service or by facsimile:
If to the Stockholder, to:
Attention:
Fax:
If to the Company, to:
Salton, Inc.
0000 Xxxx Xxxxx Xxxxx
Xxxx Xxxxxx, Xxxxxxxx 00000
Attention: General Counsel
Fax: (000) 000-0000
0000 Xxxx Xxxxx Xxxxx
Xxxx Xxxxxx, Xxxxxxxx 00000
Attention: General Counsel
Fax: (000) 000-0000
or to such other Persons, addresses or facsimile numbers as may be designated in writing by the
Person entitled to receive such communication as provided above. Each such communication shall be
effective (i) if delivered by hand, when such delivery is made at the address specified in this
Section 6(e), (ii) if delivered by overnight courier service, the next Business Day after such
communication is sent to the address specified in this Section 6(d) or (iii) if delivered by
facsimile, when such facsimile is transmitted to the facsimile number specified in this
Section 6(d) and appropriate confirmation is received.
(e) Successors and Assigns; Third Party Beneficiaries. This Agreement shall inure to
the benefit of and be binding upon the parties hereto and their successors. Neither party may
assign its rights or duties hereunder, in whole or in part, other than by operation of law. Any
purported assignment not in accordance with this Agreement shall be null and void. Except as
provided in Section 6(e), this Agreement is not intended to confer any rights or remedies upon any
Person other than the parties to this Agreement.
(f) Counterparts. This Agreement may be signed in any number of counterparts, each of
which shall be an original, with the same effect as if the signatures thereto and hereto were upon
the same instrument. This Agreement shall become effective when each party hereto shall have
received a counterpart hereof signed by the other party hereto.
(g) Governing Law. This Agreement and any claim or controversy relating hereto shall
be governed by and construed in accordance with the law of the State of New York, without regard to
the conflicts of law rules of such state that would result in the application of the law of another
jurisdiction.
(h) Jurisdiction. Except as otherwise expressly provided in this Agreement, the
parties hereto agree that any suit, action or proceeding seeking to enforce any
10
provision of, or
based on any matter arising out of or in connection with, this Agreement or the transactions
contemplated hereby or thereby shall be brought in the United States District Court for the
Southern District of New York or any New York State court sitting in New York City, so long as one
of such courts shall have subject matter jurisdiction over such suit, action or proceeding, and
that any cause of action arising out of this Agreement shall be deemed to have arisen from a
transaction of business in the State of New York, and each of the parties hereby irrevocably
consents to the jurisdiction of such courts (and of the appropriate appellate courts therefrom) in
any such suit, action or proceeding and irrevocably waives, to the fullest extent permitted by law,
any objection that it may now or hereafter have to the laying of the venue of any such suit, action
or proceeding in any such court or that any such suit, action or proceeding which is brought in any
such court has been brought in an inconvenient forum. Process in any such suit, action or
proceeding may be served on any party anywhere in the world, whether within or without the
jurisdiction of any such court. Without limiting the foregoing, each party agrees that service of
process on such party as provided in Section 6 shall be deemed effective service of process on such
party.
(i) WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ANY
AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT
OR THE TRANSACTIONS CONTEMPLATED HEREBY.
(j) Severability. The provisions of this Agreement shall be deemed severable and the
invalidity or unenforceability of any provision shall not affect the validity or enforceability of
the other provisions of this Agreement. If any provision of this Agreement, or the application of
that provision to any Person or any circumstance, is invalid or unenforceable, (a) a suitable and
equitable provision shall be substituted for that provision in order to carry out, so far as may be
valid and enforceable, the intent and purpose of the invalid or unenforceable provision and (b) the
remainder of this Agreement and the application of that provision to other Persons or circumstances
shall not be affected by such invalidity or unenforceability, nor shall such invalidity or
unenforceability affect the validity or enforceability of that provision, or the application of
that provision, in any other jurisdiction.
(k) Entire Agreement. This Agreement constitutes the entire agreement between the
parties with respect to the subject matter of this Agreement and supersedes all prior agreements
and understandings, both oral and written, between the parties with respect to the subject matter
of this Agreement.
(l) Rules of Construction. The parties to this Agreement have been represented by
counsel during the negotiation and execution of this Agreement and waive the application of any
laws or rule of construction providing that ambiguities in any agreement or other document shall be
construed against the party drafting such agreement or other document. The headings in this
Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning
hereof.
(m) Remedies. Except as otherwise provided in this Agreement, any and all remedies
expressly conferred upon a party to this Agreement shall be cumulative with, and not exclusive of,
any other remedy contained in this Agreement, at law or in equity. The exercise by a party to this
Agreement of any one remedy shall not preclude the exercise by it of any other remedy.
11
(n) Termination. This Agreement and the obligations of the parties hereunder shall
terminate upon the earlier of the date on which all Registrable Securities held by the Stockholder
can be sold without restriction (including volume and manner of sale restrictions) on a single day
without registration in compliance with Rule 144; provided, that any liabilities or
obligations under Section 3, 4, or 5 shall survive termination and remain in effect in accordance
with their terms.
(o) Piggyback Registrations. If at any time during the Effectiveness Period there is
not an effective Shelf Registration Statement covering all of the Registrable Securities and the
Company shall determine to prepare and file with the SEC a registration statement relating to an
offering for its own account or the account of others under the Securities Act of any of its equity
securities, other than on Form S-4 or Form S-8 (each as promulgated under the Securities Act) or
their then equivalents relating to equity securities to be issued solely in connection with any
acquisition of any entity or business or equity securities issuable in connection with stock option
or other employee benefit plans, then the Company shall send to the Stockholder written notice of
such determination and, if within fifteen days after receipt of such notice, the Stockholder shall
so request in writing, the Company shall include in such registration statement all or any part of
such Registrable Securities such holder requests to be registered, subject to customary underwriter
cutbacks applicable to all holders of registration rights.
12
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written
above.
| SALTON, INC. | ||||||||
| By: | /s/ Xxxxxxx Xxxx | |||||||
| Name: | Xxxxxxx Xxxx | |||||||
| Title: | Interim Chief Executive Officer | |||||||
| and Chief Financial Officer | ||||||||
| CONTRARIAN EQUITY FUND, L.P. | ||||||||
| By: Contrarian Capital Management, L.L.C. | ||||||||
| By: | /s/ Xxxxx Xxxxxxx
|
|||||||
| Title: Portfolio Manager | ||||||||
