EXHIBIT 99.2
EXECUTION COPY
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 subject to
applicable bankruptcy, insolvency, reorganization,
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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 distribution
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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.
(c) The execution and delivery by Parent of this Agreement and the
performance of its obligations hereunder and compliance with the terms hereof
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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 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
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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 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
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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).
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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:
-----------------------------------
Name:
Title:
HARBINGER CAPITAL PARTNERS MASTER FUND I, LTD.
By: Harbinger Capital Partners Offshore
Manager, L.L.C., its investment manager
By:
-----------------------------------
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:
-----------------------------------
Name: Xxxxxxx X. Xxxxx, Xx.
Title: Senior Vice President and
General Counsel
[Signature Page to Commitment Agreement]
Exhibit A
UNANIMOUS WRITTEN CONSENT OF
THE APPLE HOLDCO STOCKHOLDERS
Exhibit B
ADDRESSES FOR NOTICE
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
SHARES
STOCKHOLDER SHARES
--------------------------------------------------- -------
Harbinger Capital Partners Master Fund I, Ltd. 81.22
Harbinger Capital Partners Special Situations Fund, 18.78
L.P.
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.
