THIRD AMENDMENT TO RIGHTS AGREEMENT
Exhibit 99.1
THIRD AMENDMENT TO RIGHTS AGREEMENT
THIS THIRD AMENDMENT to
the Rights Agreement dated as of June 28, 2004, between Salton, Inc.,
a Delaware corporation (the “Company”), and UMB Bank, N.A., as Rights Agent (the “Rights Agent”),
as amended by Amendment No. 1 thereto dated as of June 7, 2006 and Amendment No. 2 thereto dated
as of February 7, 2007 (as amended, the “Rights Agreement”), is dated as of the 1st day
of October 2007.
WHEREAS, the
Company intends to enter into an Agreement and Plan of Merger, dated as of
October 1, 2007, among the Company, SFP Merger Sub, Inc., a Delaware corporation and a wholly-owned
subsidiary of the Company (“MergerSub”), and APN Holding Company, Inc., a Delaware corporation
(“Apple Holdco”) (as it may be amended from time to time, the “Merger Agreement”);
WHEREAS,
subject to the terms and conditions of the Merger Agreement, MergerSub will be merged
with and into Apple Holdco, with Apple Holdco surviving as a wholly-owned subsidiary of the Company
(the “Merger”) and, by virtue of the Merger, all of the issued and outstanding shares of common
stock, par value $0.01 per share, of Apple Holdco (“Apple Holdco Common Stock”) will be converted
into the right to receive fully paid and non assessable Common Shares of the Company;
WHEREAS,
the Company’s board of directors intends to approve and resolve to recommend to the
Company’s stockholders that they approve the Common Share Issuance and the Preferred Share Issuance
(as such terms are defined in the Merger Agreement);
WHEREAS,
concurrently with the execution of the Merger Agreement, it is contemplated that each
of the holders of record of Apple Holdco Common Stock (the “Apple Holdco Stockholders”) will enter
into a commitment agreement with the Company in the form attached as Exhibit C to the Merger
Agreement;
WHEREAS,
the Board of Directors of the Company believes that it is advisable and in the best
interests of the Company and its stockholders that the Merger and other transactions contemplated
by the Merger Agreement be consummated on the terms set forth in the Merger Agreement and the
ancillary agreements contemplated thereby;
WHEREAS,
the Board of Directors of the Company believes that it is advisable and in the best
interests of the Company and its stockholders that the Rights Agreement be amended as set forth
herein; and
WHEREAS,
Section 27 of the Rights Agreement authorizes the Company to adopt the proposed
amendment without the approval of the Company’s stockholders;
NOW, THEREFORE,
in consideration of the recitals (which are deemed to be a part of this
Amendment) and agreements contained herein, the parties hereto agree to amend the Rights Agreement
as follows:
1. Section 1(a)
of the Rights Agreement is hereby modified and amended by deleting the last
two sentences of such Section 1(a) (added in Amendment No. 2) and substituting the following
therefor:
“Notwithstanding
anything in this Section 1(a) to the contrary, none of the Apple
Holdco Stockholders nor any of their Affiliates (including, without limitation, APN
Holding Company, Inc., a Delaware corporation (“Apple Holdco”), and Applica
Incorporated, a Florida corporation and a wholly-owned subsidiary of Apple Holdco)
shall be, or shall be deemed to be, an Acquiring Person by virtue of or as a result
of (A) the approval, execution or delivery of the Merger Agreement or the Commitment
Agreement; (B) the approval of the Merger, the Share Issuances, the Series A
Amendment, the Series C Amendment or the Strawberry Charter Amendment; (C) the
announcement or consummation of the Merger, the Share Issuances, the Series A
Amendment, the Series C Amendment or the Strawberry Charter Amendment; or (D) the
consummation of the other transactions contemplated by the Merger Agreement, the
Series A Amendment, the Series C Amendment or the Commitment Agreement in accordance
with the terms and conditions thereof. Each event described in subclauses (A), (B),
(C) and (D) is referred to herein as an “Exempted Transaction”.”
2. Section 1
of the Rights Agreement is hereby modified and amended by deleting
clauses (bb) through (ii) thereof, inclusive (added in Amendment No. 2), and substituting
the following therefor:
“(bb)
“Apple Holdco
Stockholders” shall have the meaning set forth in the
Merger Agreement.
(cc) “Commitment
Agreement” shall have the meaning set forth in the Merger
Agreement.
(dd) “Effective
Time” shall have the meaning set forth in the Merger Agreement.
(ee) “Merger”
shall have the meaning set forth in the Merger Agreement.
(ff) “Merger
Agreement” shall mean the Agreement and Plan of Merger, dated,
dated as of October 1, 2007, among the Company, SFP Merger Sub, Inc., a Delaware
corporation and a wholly-owned subsidiary of the Company, and APN
Holding Company, Inc., a Delaware
corporation, as such agreement may be amended from
time to time.
(gg) “Series A
Amendment” shall have the meaning set forth in the Merger Agreement.
(hh) “Series C
Amendment” shall have the meaning set forth in the Merger Agreement.
(ii) “Share
Issuances” shall have the meaning set forth in the Merger
Agreement.
(jj) “Strawberry
Charter Amendment” shall have the meaning set forth in the
Merger Agreement.
3. Capitalized
terms used but not defined herein shall have the meaning assigned to such
terms in the Rights Agreement.
4. Except
as expressly amended hereby, the Rights Agreement remains in full force and effect.
5. This
Amendment shall be deemed to be a contract made under the laws of the State of
Delaware, and for all purposes shall be governed by and construed in accordance with the laws of
such State applicable to contracts made and performed entirely within such State.
6. This
Amendment to the Rights Agreement shall be effective as of the date hereof, and all
references to the Rights Agreement shall, from and after such time, be deemed to be references to
the Rights Agreement as amended hereby.
7. This
Amendment may be executed in any number of counterparts and each of such counterparts
shall for all purposes be deemed to be an original, and all such counterparts shall together
constitute but one and the same instrument.
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IN WITNESS
WHEREOF, the Company has caused this Amendment to be duly executed as of the day
and year first above written.
| SALTON, INC. |
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| By: | ||||
| Name: | ||||
| Title: | ||||
| ACKNOWLEDGEMENT OF RECEIPT: UMB BANK, N.A., as Rights Agent |
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| By: | ||||
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