EXHIBIT N
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COMMITMENT AGREEMENT
COMMITMENT AGREEMENT dated as of February 7, 2007 (this "AGREEMENT")
among Salton, Inc., a Delaware corporation ("PARENT") and Harbinger Capital
Partners Master Fund I, Ltd., a company organized under the laws of the Cayman
Islands and Harbinger Capital Partners Special Situations Fund, L.P., a
Delaware limited partnership (each, a "STOCKHOLDER" and, collectively, the
"STOCKHOLDERS").
WHEREAS, Parent, SFP Merger Sub, Inc., a Delaware corporation and a
direct wholly owned subsidiary of Parent ("MERGERSUB"), and APN Holding
Company, Inc., a Delaware corporation ("APPLE HOLDCO") propose to enter into an
Agreement and Plan of Merger dated as of the date hereof (as the same may be
amended or supplemented, the "MERGER AGREEMENT"; capitalized terms used but not
defined herein shall have the meanings set forth in the Merger Agreement);
WHEREAS each Stockholder owns the number of shares of Apple Holdco
Common Stock set forth opposite its name on SCHEDULE A hereto (such shares of
Apple Holdco Common Stock, together with any other shares of capital stock of
Apple Holdco acquired by such Stockholder after the date hereof and during the
term of this Agreement, being collectively referred to herein as the "SUBJECT
SHARES" of such Stockholder); and
WHEREAS, as a condition to its willingness to enter into the Merger
Agreement, Parent has requested that each Stockholder enter into this
Agreement.
NOW, THEREFORE, the parties hereto agree as follows:
SECTION 1 REPRESENTATIONS AND WARRANTIES OF EACH STOCKHOLDER.
Each Stockholder hereby, severally and not jointly, represents and warrants to
Parent as of the date hereof in respect of itself as follows:
(a) ORGANIZATION; AUTHORITY; EXECUTION AND DELIVERY; NO
CONFLICTS; ENFORCEABILITY.
(i) The Stockholder is duly organized, validly
existing and in good standing under the laws of the jurisdiction in which it is
organized.
(ii) The Stockholder has the requisite power and
authority to execute and deliver this Agreement and the unanimous written
consent of the Apple Holdco Stockholders in the form attached as EXHIBIT A to
this Agreement (the "STOCKHOLDER CONSENT") and to perform its obligations
hereunder. The execution and delivery by the Stockholder of this Agreement and
the Stockholder Consent have been duly authorized and approved by all necessary
action on the part of the Stockholder. This Agreement constitutes the valid and
binding obligation of the Stockholder, enforceable against the Stockholder in
accordance with its terms, except to the extent that its enforceability may be
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subject to applicable bankruptcy, insolvency, reorganization, moratorium and
similar Laws affecting the enforcement of creditors' rights generally and by
general equitable principles.
(iii) The execution and delivery by the Stockholder
of this Agreement and the Stockholder Consent and the performance of its
obligations hereunder and compliance with the terms hereof do not and will not,
(i) violate or conflict with any provision of its articles of incorporation,
certificate of formation, bylaws or partnership agreement, as applicable, (ii)
violate or conflict with any Law or Order applicable to the Stockholder or by
which any of its properties or assets may be bound, (iii) require any filing
with, or Permit, consent or approval of, or the giving of any notice to, any
Governmental Entity, or (iv) result in a violation or breach of, conflict with,
constitute (with or without due notice or lapse of time or both) a default
under, or give rise to any right of termination, cancellation or acceleration
of, or result in the creation of any Encumbrance upon any of the properties or
assets of the Stockholder under, or give rise to any obligation, right of
termination, cancellation, acceleration or increase of any obligation or a loss
of a material benefit under, any of the terms, conditions or provisions of any
Contract to which the Stockholder is a party, or by which the Stockholder may
be bound, excluding in the case of clauses (iii) and (iv) above, conflicts,
violations, breaches, defaults, rights of termination, cancellations,
accelerations, increases, losses, creations and impositions of Encumbrances
which would not, individually or in the aggregate, reasonably be expected to
have a material adverse effect on the ability of the Stockholder to perform its
obligations under this Agreement.
(b) THE SUBJECT SHARES. The Stockholder is the record and
beneficial owner of, and has good and marketable title to, the Subject Shares
set forth opposite its name on SCHEDULE A hereto, free and clear of any
Encumbrances (other than Encumbrances created pursuant to the terms of this
Agreement or arising under federal or state securities Laws). The Stockholder
does not own, of record or beneficially, any shares of capital stock of Apple
Holdco other than the Subject Shares set forth opposite its name on SCHEDULE A
attached hereto. The Stockholder has the sole right to vote such Subject
Shares, none of such Subject Shares is subject to any voting trust or other
agreement, arrangement or restriction with respect to the voting or the
Transfer (as defined in Section 3(b) below) of such Subject Shares, except as
contemplated by this Agreement.
(c) INVESTOR REPRESENTATIONS. The Stockholder acknowledges
that the Strawberry Common Stock to be issued pursuant to the Merger Agreement
initially will not be registered under the Securities Act in reliance on the
exemptions from the registration requirements of Section 5 of the Securities
Act set forth in Section 4(2) thereof and Regulation D promulgated thereunder.
In connection therewith: (i) the Stockholder hereby represents and warrants to
Parent that (A) it is an "accredited investor" as such term is defined under
the Securities Act, or, alternatively, has such knowledge and experience in
financial and business matters to be capable of evaluating the merits and risks
of an investment in Parent and the Parent Common Stock, and (B) the shares of
Strawberry Common Stock to be issued to such Stockholder pursuant to the Merger
Agreement are being purchased for investment for the account of such
Stockholder and without the intent of participating directly or indirectly in a
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distribution of such shares in violation of the Securities Act or other
applicable securities laws; (ii) in addition to any legend imposed by
applicable state securities laws, the certificates representing the shares of
Strawberry Common Stock to be issued pursuant to the Merger Agreement will bear
the restrictive legends set forth in the Merger Agreement, and stop transfer
orders shall be placed against the transfer thereof with Parent's transfer
agent; and (iii) the shares of Strawberry Common Stock to be issued pursuant to
the Merger will be subject to transfer restrictions imposed by federal and
state securities laws.
(d) INFORMATION TO BE SUPPLIED. None of the information
supplied in writing by Stockholder for inclusion or incorporation by reference
in the Proxy Statement or any Additional Filings will, in the case of the Proxy
Statement, at the date it is first mailed to Strawberry Stockholders or at the
time of the Strawberry Stockholders Meeting or at the time of any amendment or
supplement thereof, or, in the case of any Additional Filing, at the date it is
first mailed to Strawberry Stockholders or, at the date it is first filed with
the SEC or other Governmental Entity, contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they are made, not misleading. No representation is
made by Stockholder with respect to statements made or incorporated by
reference therein based on information supplied by Parent, MergerSub and/or
Apple Holdco in connection with the preparation of the Proxy Statement or the
Additional Filings for inclusion or incorporation by reference therein.
(e) BROKER'S OR FINDER'S FEE. Except for Lazard Freres &
Co. LLC, no Person acting on behalf of Stockholder is, or will be, entitled to
any investment banking, broker's, finder's or similar fee for which Parent,
MergerSub, Apple Holdco or any of their respective Affiliates or the Surviving
Corporation after the Effective Time could have any liabilities in connection
with this Agreement, the Merger Agreement or any of the Transactions.
SECTION 2 REPRESENTATIONS AND WARRANTIES OF PARENT. Parent hereby
represents and warrants to each Stockholder and Apple Holdco as follows:
(a) Parent is duly organized, validly existing and in good
standing under the laws of the State of Delaware.
(b) Parent has the requisite power and authority to execute
and deliver this Agreement and to perform its obligations hereunder. The
execution and delivery by Parent of this Agreement have been duly authorized
and approved by all necessary corporate action on the part of Parent. This
Agreement constitutes the valid and binding obligation of Parent, enforceable
against Parent in accordance with its terms, except to the extent that its
enforceability may be subject to applicable bankruptcy, insolvency,
reorganization, moratorium and similar Laws affecting the enforcement of
creditors' rights generally and by general equitable principles.
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(c) The execution and delivery by Parent of this Agreement
and the performance of its obligations hereunder and compliance with the terms
hereof do not and will not, (i) violate or conflict with any provision of its
certificate of incorporation or bylaws or the comparable governing documents of
any of its Subsidiaries, (ii) violate or conflict with any Law or Order
applicable to Parent or any of its Subsidiaries or by which any of their
respective properties or assets may be bound, (iii) require any filing with, or
Permit, consent or approval of, or the giving of any notice to, any
Governmental Entity, or (iv) result in a violation or breach of, conflict with,
constitute (with or without due notice or lapse of time or both) a default
under, or give rise to any right of termination, cancellation or acceleration
of, or result in the creation of any Encumbrance upon any of the properties or
assets of Parent or any of its Subsidiaries under, or give rise to any
obligation, right of termination, cancellation, acceleration or increase of any
obligation or a loss of a material benefit under, any of the terms, conditions
or provisions of any Contract to which Parent or any of its Subsidiaries is a
party, or by which Parent or any of its Subsidiaries may be bound, excluding in
the case of clauses (iii) and (iv) above, conflicts, violations, breaches,
defaults, rights of termination, cancellations, accelerations, increases,
losses, creations and impositions of Encumbrances which would not, individually
or in the aggregate, reasonably be expected to have an Strawberry Material
Adverse Effect.
SECTION 3 COVENANTS OF EACH STOCKHOLDER. Each Stockholder,
severally and not jointly, covenants and agrees as follows:
(a) Immediately following the execution and delivery of the
Merger Agreement, the Stockholder shall execute and deliver the Stockholder
Consent to Parent. The Stockholder will not thereafter revoke or modify, or
encourage other Stockholders to revoke or modify, the Stockholder Consent, and
the Stockholder will not thereafter execute another written consent or vote (or
cause to be voted) the Subject Shares of the Stockholder for any proposal that
will approve any action in conflict with the Stockholder Consent or that would
otherwise be reasonably likely to impede, frustrate, prevent or nullify any
provision of the Merger Agreement, the Merger or the consummation of any of the
transactions contemplated hereby or thereby.
(b) The Stockholder shall not Transfer, except to another
Stockholder, any Subject Shares to any person other than pursuant to the Merger
Agreement, this Agreement or another Transaction Document. "TRANSFER" means,
directly or indirectly, to sell, transfer, assign, pledge, encumber,
hypothecate or similarly dispose of (by operation of law or otherwise).
(c) At or prior to the Closing, the Stockholder shall
execute and deliver each Transaction Document to which it has been designated
to become a party thereto pursuant to the Merger Agreement.
(d) Each Stockholder will provide Parent and MergerSub with
the information concerning itself in the form required to be included in the
Proxy Statement and the Additional Filings (including by reason of any SEC
comments thereto or subsequent requests thereon). If at any time prior to the
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Effective Time, any event or circumstance relating to such Stockholder or its
officers or directors, should be discovered by such Stockholder and such
information should be set forth in an amendment or supplement to the Proxy
Statement or the Additional Filings so that any of such documents would not
include any misstatement of a material fact or omit to state any material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, the Stockholder will promptly
notify Parent and MergerSub and, to the extent required by applicable Laws,
Parent or MergerSub, as applicable, will promptly file with the SEC and, if
required by Law, disseminate to the Strawberry Stockholders an appropriate
amendment or supplement describing such information.
SECTION 4 TERMINATION. This Agreement shall terminate upon the
earliest of (i) the Effective Time and (ii) the termination of the Merger
Agreement in accordance with its terms, other than with respect to the
liability of any party for breach hereof prior to such termination.
SECTION 5 STOCKHOLDER CAPACITY. Each Stockholder signs solely in
its capacity as the record holder and beneficial owner of such Stockholder's
Subject Shares and nothing herein shall limit or affect any actions taken by a
partner or an officer, employee or agent of a Stockholder, in his or her
capacity as an officer or director of Apple Holdco or Parent in exercising his
or her rights under the Merger Agreement to the extent that such actions are
permitted under the Merger Agreement.
SECTION 6 GENERAL PROVISIONS.
(a) FURTHER ASSURANCES. Each Stockholder and Parent shall,
from time to time, execute and deliver, or cause to be executed and delivered,
such additional or further consents, documents and other instruments as the
other party may reasonably request for the purpose of effectively carrying out
the transactions contemplated by this Agreement and the Merger Agreement.
(b) AMENDMENTS. This Agreement may not be amended except by
an instrument in writing signed by each of the parties hereto.
(c) NOTICE. All notices required or permitted pursuant to
this Agreement will be in writing and will be deemed to be properly given when
actually received by the Person entitled to receive the notice at the address
set forth on EXHIBIT B hereto, or at such other address as a party may provide
by notice to the other.
(d) INTERPRETATION.
(i) When a reference is made in this Agreement to
Articles, Sections, Exhibits or Schedules, such reference will be to an Article
or Section or Exhibit or Schedule to this Agreement unless otherwise indicated.
Whenever the words "include," "includes" or "including" are used in this
Agreement, they will be deemed to be followed by the words "without
limitation." Unless the context otherwise requires, (i) "or" is disjunctive but
not necessarily exclusive, (ii) words in the singular include the plural and
vice versa, (iii) the use in this Agreement of a pronoun in reference to a
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party hereto includes the masculine, feminine or neuter, as the context may
require, and (iv) unless otherwise defined herein, terms used herein which are
defined in GAAP have the meanings ascribed to them therein. This Agreement will
not be interpreted or construed to require any Person to take any action, or
fail to take any action, that would violate any applicable Law.
(ii) The parties have participated jointly in
negotiating and drafting this Agreement. In the event that an ambiguity or a
question of intent or interpretation arises, this Agreement will be construed
as if drafted jointly by the parties, and no presumption or burden of proof
will arise favoring or disfavoring any party by virtue of the authorship of any
provision of this Agreement.
(e) SEVERABILITY. The illegality or partial illegality of
any of this Agreement, or any provision hereof, will not affect the validity of
the remainder of this Agreement, or any provision hereof, and the illegality or
partial illegality of this Agreement will not affect the validity of this
Agreement in any jurisdiction in which such determination of illegality or
partial illegality has not been made, except in either case to the extent such
illegality or partial illegality causes this Agreement to no longer contain all
of the material provisions reasonably expected by the parties to be contained
therein.
(f) COUNTERPARTS. This Agreement may be executed in two or
more counterparts, all of which will be considered one and the same agreement
and will become effective when counterparts have been signed by each of the
parties and delivered to the other parties, it being understood that each party
need not sign the same counterpart.
(g) ENTIRE AGREEMENT; NO THIRD-PARTY BENEFICIARIES. This
Agreement constitutes the entire agreement and supersedes all prior agreements
and understandings, both written and oral, among the parties with respect to
the subject matter of this Agreement.
(h) THIRD PARTY BENEFICIARIES. Nothing in this Agreement,
expressed or implied, is intended to confer on any Person other than the
parties hereto or their respective successors and assigns any rights, remedies,
obligations or liabilities under or by reason of this Agreement.
(i) GOVERNING LAW. This Agreement will be governed by and
construed in accordance with the internal Laws of the State of Delaware
applicable to Contracts made and wholly performed within such state, without
regard to any applicable conflict of laws principles.
(j) SUCCESSORS AND ASSIGNS. This Agreement will be binding
upon and will inure to the benefit of the signatories hereto and their
respective successors and permitted assigns. Neither Parent nor any Stockholder
may assign this Agreement or any of their rights or liabilities thereunder
without the prior written consent of the other parties hereto, and any attempt
to make any such assignment without such consent will be null and void. Any
such assignment will not relieve the party making the assignment from any
liability under such agreements.
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(k) SUBMISSION TO JURISDICTION; WAIVERS. Each Stockholder
and Parent irrevocably agrees that any Action with respect to this Agreement,
any provision hereof, the breach, performance, validity or invalidity hereof or
for recognition and enforcement of any judgment in respect hereof brought by
another party hereto or its successors or permitted assigns shall be brought
and determined in the Court of Chancery or other courts of the State of
Delaware located in the State of Delaware, and each Stockholder and Parent
hereby irrevocably submits and consents with regard to any such Action or
proceeding for itself and in respect to its property, generally and
unconditionally, to the exclusive jurisdiction of the aforesaid courts. Each of
Stockholder and Parent hereby irrevocably waives, and agrees not to assert, by
way of motion, as a defense, counterclaim or otherwise, in any Action with
respect to this Agreement, any provision hereof or the breach, performance,
enforcement, validity or invalidity hereof, (a) any claim that it is not
personally subject to the jurisdiction of the above named courts for any
reason, (b) that it or its property is exempt or immune from jurisdiction of
any such court or from any legal process commenced in such courts (whether
through service of notice, attachment prior to judgment, attachment in aid of
execution of judgment, execution of judgment or otherwise), and (c) to the
fullest extent permitted by applicable Laws, that (i) Action in any such court
is brought in an inconvenient forum, (ii) the venue of such Action is improper
and (iii) this Agreement, or the subject matter hereof, may not be enforced in
or by such courts. Each party hereto hereby agrees that, to the fullest extent
permitted by Law, service of any process, summons, notice or document by U.S.
registered mail to the respective addresses set forth in Section 6(c) shall be
effective service of process for any suit or proceeding in connection with this
Agreement or the transactions contemplated hereby.
(l) SPECIFIC PERFORMANCE. The parties hereby acknowledge
and agree that the failure of any party to perform its agreements and covenants
hereunder, including its failure to take all actions as are necessary on its
part to the consummation of the Transactions, will cause irreparable injury to
the other parties for which damages, even if available, will not be an adequate
remedy. Accordingly, each party hereby consents to the issuance of injunctive
relief by any court of competent jurisdiction to compel performance of such
party's obligations and to the granting by any court of the remedy of specific
performance of its obligations hereunder.
(m) WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY
WAIVES TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW ANY RIGHT IT MAY HAVE
TO A TRIAL BY JURY WITH RESPECT TO ANY LITIGATION DIRECTLY OR INDIRECTLY
ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR THE MERGER. EACH
OF THE PARTIES HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY
OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER
PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THAT FOREGOING
WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN
INDUCED TO ENTER INTO THIS AGREEMENT AND THE MERGER, AS APPLICABLE, BY, AMONG
OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 6(m).
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, Parent and each Stockholder has caused this
Agreement to be signed by its officer thereunto duly authorized, all as of the
date first written above.
SALTON, INC.
By: /s/ Xxxx Xxxxxxxx
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Name: Xxxx Xxxxxxxx
Title: Chief Executive Officer
HARBINGER CAPITAL PARTNERS MASTER
FUND I, LTD.
By: Harbinger Capital Partners Offshore
Manager, L.L.C., ITS INVESTMENT MANAGER
By: /s/ Xxxxxx X. Xxxxxxx
-------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Senior Managing Director
HARBINGER CAPITAL PARTNERS SPECIAL
SITUATIONS FUND, L.P.
By: Harbinger Capital Partners Special
Situations GP, LLC, ITS GENERAL PARTNER
By: HMC - New York, Inc., ITS MANAGING MEMBER
By: /s/ Xxxxxxx X. Xxxxx, Xx.
-------------------------------
Name: Xxxxxxx X. Xxxxx, Xx.
Title: Senior Vice President
and General Counsel
[Signature Page to Commitment Agreement]
EXHIBIT A
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UNANIMOUS WRITTEN CONSENT OF
THE APPLE HOLDCO STOCKHOLDERS
EXHIBIT B
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ADDRESSES FOR NOTICE
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SALTON, INC.
0000 X. Xxxxx Xxxxx
Xxxx Xxxxxx, Xxxxxxxx 00000
Attention:
Facsimile: (000) 000-0000
With a copy to:
Xxxxxxxxxxxx Xxxx & Xxxxxxxxx LLP
7800 Sears Tower, 000 Xxxxx Xxxxxx Xxxxx
Xxxxxxx, XX 00000 6404
Attention: Xxxx Xxxxxxxxxx
Facsimile: 312.876.7934
HARBINGER CAPITAL PARTNERS MASTER FUND I, LTD.
c/o 000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxxx
Facsimile: (000) 000-0000
With a copy to:
Xxxx, Weiss, Rifkind, Xxxxxxx & Xxxxxxxx LLP
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000 6064
Attention: Xxxxx X. Xxxxxxxxx
Xxxxxx X. Xxxxxxx
Facsimile: (000) 000 0000
HARBINGER CAPITAL PARTNERS SPECIAL SITUATIONS FUND, L.P.
c/o 555 Madison Avenue, 16th Floor
New York, New York 10022
Attention: Xxxxxx X. Xxxxxxx
Facsimile: (000) 000-0000
With a copy to:
Xxxx, Weiss, Rifkind, Xxxxxxx & Xxxxxxxx LLP
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000 6064
Attention: Xxxxx X. Xxxxxxxxx
Xxxxxx X. Xxxxxxx
Facsimile: (000) 000 0000
SCHEDULE A
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SHARES
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STOCKHOLDER SHARES
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Harbinger Capital Partners Master Fund I, Ltd. 81.22
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Harbinger Capital Partners Special Situations Fund, L.P. 18.78
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Prior to the Effective Time, each Stockholder may receive additional shares of
Apple Holdco Common Stock in exchange for a cash contribution by each
Stockholder.
