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EXHIBIT 10.3
AGREEMENT MADE AS OF JULY 1, 1999
BY AND BETWEEN
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ("▇▇▇▇▇▇▇▇")
AND
SALTON INC., A DELAWARE CORPORATION ("SALTON")
WHEREAS:
▇. ▇▇▇▇▇▇▇▇ is sometimes referred to for convenience in this Agreement as
"Seller";
B. Seller desires to acquire an option to sell to Salton (the "Put") and
Salton desires to acquire an option to purchase from Seller (the
"Call") all of the outstanding shares of stock (the "Stock") of
▇▇▇▇▇▇▇▇ and Associates, Ltd. (the "Company").
THEREFORE, Seller and Salton agree as set forth below.
1. Property Subject to Options. The property subject to the Put and the
Call is all right, title and interest in the Stock.
2. Seller's Put; Purchase Price.
(a) Seller shall have the right to exercise its Put of the Stock
during a period ("Put Period") that commences December 1, 1999,
and ends at the close of business, CST, on the thirtieth (30th
day) next following the first day of the Put Period (including the
first day of the Put Period). If Seller does not exercise its Put
within the Put Period, the Put shall terminate automatically
without any notice from Salton and Seller shall have no further
right to compel Salton to purchase the Stock.
(b) If Seller gives Notice to Salton of Seller's exercise of its Put,
there shall be a closing of the sale pursuant to the Put (the
"Closing") which shall occur as set forth in Section 6(c) not
later than sixty (60) days after such Notice is given on a date
designated by Salton, except that if the sixtieth (60th) day is
not a day when banks in Los Angeles and New York City are both
open for business ("Business Day"), then the Closing shall occur
not later then the next day that is a Business Day.
(c) If Seller's Put is exercised, the total purchase price to be paid
to Seller for the Stock is thirteen million seven hundred fifty
thousand dollars ($13,750,000) of which six million eight hundred
seventy-five thousand dollars ($6,875,000) shall be paid in cash
and six million eight hundred seventy-five thousand dollars
($6,875,000) shall be paid in shares of Common Stock of Salton
(the "Salton Shares") valued as set forth in Section 5.
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3. Salton's Call; Purchase Price.
(c) Salton shall have the right to exercise its Call on the Stock
within a thirty (30) day period ("Call Period") that begins on the
day next following the end of the Put Period and ends on the close
of business, CST, on the thirtieth (30th) day next following the
commencement of the Call Period (including the first day of the
Call Period). If Salton has not exercised its Call within the Call
Period, the Call shall terminate automatically without any notice
from Seller and Salton shall have no further right to compel
Seller to sell the Stock.
(d) Upon Salton giving Notice to Seller of Salton's exercise of its
Call, there shall be a Closing of the sale pursuant to the Call
which shall occur as set forth in Section 6(c) not later than
thirty (30) days after such Notice is given on a date designated
by Salton, except that if the thirtieth (30th) day is not a
Business Day, then the Closing shall occur not later then the next
day that is a Business Day.
(e) If Salton's Call is exercised by Salton, the total purchase price
to be paid to Seller for the Stock is thirteen million five
hundred thousand dollars ($13,500,000) of which six million seven
hundred fifty thousand dollars ($6,750,000) shall be payable in
cash and six million seven hundred fifty thousand dollars
($6,750,000) shall be payable in Salton Shares valued as set forth
in Section 5. forth in Section 5.
4. Terms of Payment, The total purchase price owing to Seller shall be
paid as set forth below.
(e) Put Price. On the exercise of Seller's Put, the total purchase
price, $13,750,000, shall be paid as follows:
(i) On the Closing (defined in Section 6(c) below), one million
three hundred seventy-five thousand dollars ($1,375,000)
shall be paid in cash and six million eight hundred
seventy-five thousand dollars ($6,875,000) shall be paid in
shares of the Common Stock of Salton (the "Salton Shares").
The cash portion of the purchase price to be paid at the
Closing shall be delivered by Federal Funds wired to a bank
account designated by Seller prior to the date of the
Closing. The portion of the purchase price to be paid in
Salton Shares shall be delivered in one or more stock
certificates of Salton evidencing the Salton Shares
registered in the name of Seller.
(ii) The balance of the cash portion of the purchase price, five
million five hundred thousand dollars ($5,500,000) shall be
paid in four equal installments of one million three hundred
seventy-five thousand dollars ($1,375,000) each, without
interest, on the first day of July, 2000, 2001, 2002 and
2003 unless such July 1 is not a
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Business Day, in which case the payment shall be made on the
next date which is Business Day. Each installment shall be
delivered by federal funds wired to a bank account
designated by Seller prior to the date of Closing or to such
other bank account as may be designated by Seller from time
to time at least ten (10) days prior to the payment due
date.
(f) Call Price. On the exercise of Purchaser's Call, the total
purchase price, $13,500,000, owing to Seller shall be paid as set
forth below:
(ii) On the Closing (defined in Section 6(c) below), one million
three hundred thousand dollars ($1,300,000) shall be paid in
cash and six million five hundred thousand dollars
($6,500,000) shall be paid in shares of the Common Stock of
Salton (the "Salton Shares"). The cash portion of the
purchase price to be paid at the Closing shall be delivered
by Federal Funds wired to a bank account designated by
Seller prior to the date of the Closing. The portion of the
purchase price to be paid in Salton Shares shall be
delivered in one or more stock certificates of Salton
evidencing the Salton Shares registered in the name of
Seller.
(iii) The balance of the cash portion of purchase price, five
million four hundred thousand dollars ($5,400,000) shall be
paid in four equal installments of one million three hundred
fifty thousand dollars ($1,350,000) each, without interest,
on the first days of July, 2000, 2001, 2002 and 2003 unless
such July 1 is not a Business Day, in which case the payment
shall be made on the next date which is Business Day. Each
installment shall be delivered by federal funds wired to a
bank account designated by Seller prior to the date of
Closing or to such other bank account as may be designated
by Seller from time to time at least ten (10) days prior to
the payment due date.
(b) Advance Payments. Salton shall receive credit at a Closing under
this Agreement, and, to the extent of Salton's payments, against
the annual installments of the purchase to be paid in cash, for
payments made by Salton after the date hereof, as advances toward
the cash portion of the purchase price in the event the call or
the Put is exercised.
5. Calculation of Number of Shares to be Delivered to Seller at Closing.
Calculation of Number of Shares to be delivered to Seller at Closing.
(a) On Exercise of Put. The number of shares of common stock of Salton
to be delivered to Seller on the Closing shall be the greater of
the following two numbers: (i) two hundred thirty-seven thousand
and sixty-nine (237,069) or (ii) 6,875,000 divided by the Average
Salton Price as defined in this Section 5.
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(b) On Exercise of Call. The number of shares of common stock of
Salton to be delivered to Seller on the Closing shall be the
greater of the following two numbers: (i) two hundred twenty-four
thousand one hundred thirty eight (224,138) or (ii) 6,500,000
divided by the Average Salton Price as defined in this Section 5.
(c) The "Average Salton Price" shall be the average of the closing
prices of Salton common stock on the New York Stock Exchange
("NYSE") as reported on the NYSE Composite Transaction Tape for
the twenty trading days ending on the third trading day preceding
the Closing Date.
6. Conditions to Closing.
(a) Seller Conditions. At or before the Closing, Seller shall have
received the following:
(i) a copy of the Articles of Incorporation, as amended, of
Salton certified by the Delaware Secretary of State;
(ii) a copy of the By-Laws of Salton and a copy of the Unanimous
Consent of Directors of the Board of Directors of Salton
authorizing the execution, delivery and performance of this
Agreement, both certified by the Secretary of Salton;
(iii) a good standing certificate of Salton certified by the
Secretary of State of Delaware;
(iv) a bring down certificate executed by an officer of Salton
certifying that the representations and warranties of Salton
set forth in Section 8 below are true and correct as of the
Closing;
(v) Seller shall have received the cash portion of the purchase
price to be delivered at the Closing; and
(vi) Seller shall have received certificates for Salton Shares
issued in the name of Seller bearing a restrictive legend
which permits the Salton Shares to be sold only pursuant to
a registered offering pursuant to Section 9 or pursuant to
Rule 144 adopted by the Securities and Exchange Commission
and as amended after the date hereof..
(b) Salton Conditions. At or before the Closing, Salton shall have
received the following:
(i) a copy of the Articles of Incorporation, as amended, of the
Company certified by the California Secretary of State;
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(ii) a good standing certificate of the Company certified by the
Secretary of State of California;
(iii) a copy of the organizational documents of MikeSam and the
operating agreement of MikeSam LLC;
(iv) a bring down certificate executed by an officer of the
Company certifying that the representations and warranties
of Seller set forth in Section 7 below are true and correct
as of the Closing Date;
(v) evidence of Uniform Commercial Code searches, searches,
federal tax lien searches and other certificates reasonably
requested by Salton in order to confirm that the Stock
being sold hereunder by Seller and the interest of the
Company in MikeSam are free and clear of all pledges,
security interests, Liens and encumbrances;
(vi) a stock certificate of the Company evidencing all of the
outstanding shares of the Company duly assigned to Salton;
(vii) such other documents and assignments as Salton may require
reasonably in order to effect the assignment and transfer
to Salton of the Stock sold hereunder; and
(viii) Salton shall have such consents, if any, as Salton
determines are required under Salton's existing Credit
Agreement with ▇▇▇▇▇▇ Brothers Commercial Paper Inc. as
Administrative Agent for the several bank lenders who are
parties from time to time to the Credit Agreement.
(c) Closing. The Closing shall occur on the date as determined above
in this Agreement at the offices of ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇▇
located at Suite 1500, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇, ▇▇
▇▇▇▇▇ at 10 A.M., CST. At the Closing, Seller and Salton shall
each make the deliveries required of them as set forth above.
7. Representations and Warranties of Seller. Seller represents, warrants
and agrees with Salton that, as of the date hereof and up to and
including (except as otherwise herein provided) the date of Closing
that each of the following representations is true and correct:
(a) No Assets Except Interest in MikeSam. As of the Closing, the
Company has no property or assets of any kind whatsoever except
its interest in MikeSam LLC, a California limited liability
company ("MikeSam").
(b) Only Asset of MikeSam. MikeSam's only asset is its existing 15%
interest in a Joint Venture Agreement dated as of ▇▇▇▇▇ ▇, ▇▇▇▇
("▇▇ Agreement") by and among Salton, ▇▇▇▇▇▇▇ Productions, Inc.
and ▇▇▇▇▇▇▇▇ ▇., a California corporation, creating a joint
venture ("JV").
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(c) ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇., a California corporation, never held an
interest in the JV and MikeSam holds the 15% interest in the JV
designated as belonging to ▇▇▇▇▇▇▇▇ ▇.
(d) Only Members of MikeSam. The only two members of MikeSam are ▇▇▇
▇▇▇▇▇▇▇▇▇▇, an individual, and the Company.
(e) No Violation. Neither the execution, delivery or performance of
this Agreement nor the consummation of the transactions
contemplated hereby or thereby will (a) violate, conflict with or
result in any breach of any provision of the Articles of
Incorporation or Bylaws (or comparable organizational documents)
of the Company, or (b) violate, conflict with or result in a
violation or breach of, or constitute a default (with or without
due notice or lapse of time or both) under, or permit the
termination of, or require any notice under, or require the
consent of any other party to, or result in the acceleration of,
or entitle any party to accelerate (whether as a result of a
change in control of the Company any obligation or agreement, or
result in the loss of any benefit or the imposition of any fee or
penalty, or give rise to the creation of any Lien upon any assets
of the Company in each case under any of the terms, conditions or
provisions of any debt, note, bond, mortgage, indenture, deed of
trust, license, lease, permit, agreement or other instrument or
obligation to which the Company or Seller is a party or by which
they or any of their respective properties or assets may be bound
or affected or (c) violate any Rules (including foreign, federal
and state securities laws) of any Governmental Authority
applicable to the Company, or the Seller or any of their
respective properties.
(f) Capitalization of the Company. The authorized capital stock of the
Company consists solely of One Hundred Thousand (100,000) shares
of Common Stock, and there are issued and outstanding One Thousand
(1,000) shares of Common Stock owned of record and beneficially by
the Seller, free and clear of all Liens. There are no shares of
Common Stock held by the Company as treasury stock. All of the
issued and outstanding shares of Common Stock are validly issued,
fully paid, non-assessable and are without, and were not issued in
violation of, any preemptive rights. No other class of capital
stock of the Company is authorized, issued or outstanding, and
there are no options, warrants, calls, subscriptions, conversion
or other rights, agreements or commitments to acquire from the
Company any shares of capital stock of the Company, or any other
securities convertible into, exchangeable for or evidencing the
right to subscribe for any shares of capital stock of the Company,
or any other security of the Company. There are no outstanding or
authorized stock appreciation, phantom stock or similar rights
with respect to the Company. There are no voting agreements,
voting trust agreements, proxies or stockholder or similar
agreements relating to the capital stock of the Company. Upon
delivery of and payment for the Stock as herein
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provided, Seller shall convey to Salton valid and marketable title
thereto, free and clear of any Liens. No other Person, including
Affiliates of the Seller has any rights in, to or under or with
respect to the Stock. Upon delivery and payment for the Stock as
herein provided, such Stock shall be duly authorized, validly
issued, fully paid and non-assessable.
(g) Consents and Approvals. No filing or registration with, no notice
to and no permit, authorization, consent or approval of, any third
party or any Governmental Authority is necessary for the
consummation by the Seller of the transactions contemplated by
this Agreement or to enable the Company to continue to hold its
interest in MikeSam after the Closing.
(h) Books and Records. The books and records of the Company are, and
have been, maintained in the usual, regular, ordinary and
appropriate manner by the Company and all of the transactions of
the Company are properly reflected therein.
(i) Financial Statements. Seller has furnished to Salton (a) copies of
the reviewed balance sheet of the Company as of the last day in
the period ended December 31, 1998, together with the related
reviewed statements of income, stockholder equity and changes in
cash flows for such year, and the notes and supplementary
information thereto, accompanied by the review reports thereon of
the Company's independent public accountant, and (b) shall deliver
no later than December 10, 1999 copies of the unaudited balance
sheet of the Company as of November 30, 1999 (the "Most Recent
Balance Sheet"), together with the related unaudited consolidated
statements of income, stockholder equity and changes in cash flows
for the eleven month period ended on such date, certified by the
Seller (such reviewed and unaudited financial statements being
hereinafter referred to as the "Financial Statements"). The
Financial Statements and each item therein, including any notes
thereto (i) were prepared in accordance with generally accepted
accounting principles applied on a consistent basis throughout the
periods covered thereby ("GAAP"), (ii) present fairly the
financial position as of such dates and for the periods then
ended, (iii) are accurate, correct and complete and in accordance
with the books of account and records of the Company and (iv) can
be reconciled with the financial statements and the financial
records maintained and the accounting methods applied by the
Company for federal income tax purposes.
(j) C Status. The Company has never elected so called Subchapter S
status under Section 1351 et seq. of the Internal Revenue Code of
1986, as amended, and has always been taxed for federal income tax
purposes as a so called C corporation.
(k) Absence of Undisclosed Liabilities. As of the Closing, there are
no Liabilities, commitments or obligations of the Company of any
kind
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whatsoever, there is no valid basis for the assertion of any such
Liabilities, commitments or obligations, and no existing
condition, situation or set of circumstances which is reasonably
likely to result in such a Liability, commitment or obligation.
(l) Litigation. There are no Claims pending or threatened before any
Governmental Authority or before any arbitrator of any nature,
brought by or against the Seller or the Company involving,
affecting or relating to the business, assets, operations or
securities of the Company, or the transactions contemplated by
this Agreement, nor is there any basis for any such Claim. Neither
of the Company nor the Seller, or their respective assets is
subject to any order, writ, judgment, award, injunction or decree
of any Governmental Authority or arbitrator.
(m) Liens and Encumbrances. The Company holds and owns full,
unconditional, good and marketable title to its interest in
MikeSam free and clear of all Liens.
(n) Contracts. The consummation of the transactions contemplated
hereby, without notice to or consent or approval of any party,
will not constitute a default under or a breach of any provisions
of any Contract of the Company.
(o) Absence of Employee Benefit Plans. As of the Closing, the Company
does not maintain nor does it have any liability with respect to
an employee benefit plan as defined in ERISA.
(p) ERISA. There are no facts which could give rise to any Claim
against or liability of the Company, the Seller or Salton for
failure to comply with ERISA or the Code.
(q) Environmental Matters. (a) The Company is and at all times has
been, in compliance with all applicable Environmental Laws. The
Company is not subject to any requirement to have any permits and
other governmental authorizations under applicable Environmental
Laws. The Company has not received any communication (written or
oral), whether from a Governmental Authority, Person, citizens
group or otherwise, that alleges that the Company is not or was
not in compliance with any Environmental Law. (b) There is no
Environmental Claim pending or threatened against the Company or
against any Person whose Liability for any Environmental Claim
that the Company has or may have retained or assumed either
contractually or by operation of law.
(r) Taxes. The Company has timely filed or caused to be filed all
federal, state, local and foreign Tax (as defined below) and
information returns required to be filed and has paid all Taxes
required to be paid in respect of the periods for which returns
are due, and will deliver to Salton an
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adequate accrual or reserve for the payment of all Taxes payable
in respect of the period, including portions thereof, subsequent
to the last of said periods required to be so accrued or reserved
up to and including the Closing. For these purposes, the Tax
attributable to the period including the Closing should be
determined as if the taxable year ended at the Closing. The
Company is not delinquent in the payment of any Tax, and no
deficiencies for any Tax, assessment or governmental charge have
been or will be claimed, proposed, assessed or threatened. There
are no Liens on the assets of the Company for unpaid Taxes. No
waiver or extension of time to assess any Taxes has been given or
requested. No claim has been made by any taxing authority in any
jurisdiction that the Company is or may be subject to taxation by
that jurisdiction. For the purposes of this Section, the term
"Tax" shall include all taxes, charges, withholdings, fees,
levies, penalties, additions, interest or other assessments
imposed by any federal, state, local or foreign or other taxing
authority on the Company or any of its former or present
properties, assets or operations (including as a result of being a
member of an affiliated, combined or unitary group or as a result
of any obligation arising out of an agreement to indemnify any
other Person), and including those related to income, employee
welfare or retirement (including social security), gross receipts,
sales, use, occupation, services, leasing, valuation, addition of
value, transfer, license, customs duties or franchise. For periods
subsequent to 1995, the Company's Tax Returns have never been
audited by the Internal Revenue Service or comparable state, local
or foreign agencies. The Company has not been a member of an
Affiliated Group or been included in a combined, consolidated or
unitary Tax return. The Company is not a party to or bound by any
Tax allocation or Tax sharing agreement or has any current or
potential obligation to indemnify any other Person with respect to
Taxes. The Company is not required to make any adjustments under
Section 481(a) of the Code by reason of a change in accounting
method which affects any taxable year ending after the Closing
Date, or has any application pending to effect such a change of
accounting method.
(s) Compliance with Applicable Law. (a) The Company does not require
and has no licenses, permits, franchises, authorizations,
registrations and approvals (the "Licenses") from any Governmental
Authority and is not and will not be subject to any pending or
threatened administrative or judicial proceeding with respect to
the lack thereof. The Company has not acted or been in violation
of, any Rule of any Governmental Authority applicable to the
Company or its assets or prior operations.
(t) Brokers' Fees and Commissions. The Seller has not employed any
investment banker, broker, finder or intermediary in connection
with the transactions contemplated hereby.
(u) Labor Matters. (a) At the Closing, no present or former employee
or independent contractor performing services for the Company has
a Claim
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pending or has threatened to or will make a Claim against the
Company (under any Rule of any Governmental Authority or
otherwise), including any Claim for (i) overtime pay, other than
overtime pay for the current payroll period, (ii) wages, salaries
or profit sharing (excluding wages, salaries or profit sharing for
the current payroll period), (iii) vacations, time off or pay in
lieu of vacation or time off, other than vacation or time off (or
pay in lieu thereof) earned in respect of the Company's current
fiscal year, (iv) any violation of any Rule or contract relating
to minimum wages or maximum hours of work, (v) discrimination
against employees on any basis, (vi) unlawful or wrongful
employment or termination practices, (vii) unlawful retirement,
termination or labor relations practices or breach of contract or
(viii) any violation of occupational safety or health standards.
There are and will be no administrative charges, arbitration or
mediation proceedings or court complaints pending or threatened
against the Company before the U.S. Equal Employment Opportunity
Commission or any state or federal court or agency or any other
entity concerning alleged employment discrimination, contract
violation or any other matters relating to the employment of
labor. There is and will be no unfair labor practice charge or
complaint pending or threatened against the Company before the
National Labor Relations Board or any similar state or local body.
(v) The Company is and has been in compliance with all applicable
Rules relating to the employment of labor, including employment
and employment practices, terms and conditions of employment,
wages and hours, equal opportunity, occupational health and
safety, severance, termination or discharge, collective bargaining
and the payment of employee welfare and retirement and other
taxes, the Worker Adjustment Retraining and Notification Act and
the Immigration Reform and Control Act of 1986, each as amended,
and is not engaged in any unfair labor practice or any violation
of any other law, rule or regulation concerning employment or
retention of independent contractors.
(w) At the Closing, the Company has no employees except Seller. As of
the Closing Date, the Company will not a signatory or party to, or
otherwise bound by, a collective bargaining agreement (or any
other agreement with any labor organization) which covers
employees of the Company, and there is no activity or proceeding
of any labor organization (or representative thereof) to organize
any unorganized employees of the Company. There is not pending or
threatened against the Company any labor dispute, grievance,
slowdown, lockout, strike, work stoppage or other collective labor
action in effect, pending or threatened against or affecting the
Company.
(x) Accounts Receivable; Liabilities. At the Closing, the Company has
no accounts receivable or liabilities and will have no liability
for any healthcare, medical, disability, death benefit or similar
expenses of any
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director or employee of the Company or any other Person which are
the result of injuries or illnesses which occurred prior to the
Closing (regardless of when such expenses are incurred).
(y) The Company does not own, lease or sublease any real property.
(z) Disclosure. All documents, agreements and other papers and
materials delivered by or on behalf of the Seller in connection
with this Agreement, and the transactions contemplated hereby and
thereby are true, complete and accurate. None of the
representations, warranties or statements of the Seller contained
in this Agreement or in any Schedules or Exhibits hereto contains
any untrue statement of a material fact or omits to state any
material fact required to be stated therein or necessary to make
the representations, warranties or statements made, in the context
in which made, not false or misleading. There is no fact that the
Seller has not disclosed to Salton in writing that causes an
adverse effect or could result in an adverse effect. The Seller
acknowledges that the statements contained in this Section shall
not be deemed to limit or qualify any of the other representations
or warranties contained in this Agreement, in any Schedules or
Exhibits hereto or in any agreement or document delivered in
connection herewith.
(aa) Seller has no commitment or legal obligation, absolute or
contingent, to any Person other than Salton to sell, assign,
license, transfer or effect a sale of any of the Stock or to enter
into any contract or cause the entering into of a contract with
respect to the Stock.
(bb) The Company is a duly organized and existing corporation in good
standing under the laws of California.
(cc) Seller has the legal capacity to own the Stock and to enter into
and perform this Agreement and the Company has been duly
authorized by the unanimous written consent of its sole
stockholder enter into and to perform this Agreement.
(dd) As of the Closing Date, Seller shall own all right, title and
interest in and to Stock free and clear of all pledges, security
interests, liens and encumbrances.
(ee) The Company has all requisite power and authority to own its
properties and the Company is not insolvent within the meaning of
Section 1-201(23) of the Uniform Commercial Code. No order has
been made or petition presented or resolution adopted which
relates to the winding-up of the Company or for an administration
order in respect of the Company, nor has any administrative
receiver, receiver or receiver and manager been appointed by any
Governmental Authority or other Person with respect to all or part
of the assets of the Company, and no power to make any such
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appointment has arisen. The Company has delivered to Purchaser
complete and correct copies of the Articles of Incorporation (or
comparable organizational documents) presently in effect for the
Company, and the Company is not in default under or in violation
of any provision of such documents. The Company does not have any
business subsidiaries or investments, direct or indirect, in any
Person other than its interest as a member of MikeSam.
(ff) The Company is qualified or licensed to do business and is in good
standing in California which is the only jurisdiction in which the
ownership or leasing of property by it or the conduct of its
business requires such licensing or qualification.
(gg) This Agreement has been duly and validly executed and delivered by
Seller and, assuming due authorization, execution and delivery by
Salton, constitute valid and binding legal obligations of the
Seller, enforceable against the Seller in accordance with its
terms.
(hh) Neither the execution, delivery or performance of this Agreement
nor the consummation of the transactions contemplated hereby will
(a) violate, conflict with or result in any breach of any
provision of the Articles of Incorporation or Bylaws (or
comparable organizational documents) of the Company, (b) violate,
conflict with or result in a violation or breach of, or constitute
a default (with or without due notice or lapse of time or both)
under, or permit the termination of, or require any notice under,
or require the consent of any other party to, or result in the
acceleration of, or entitle any party to accelerate (whether as a
result of a change in control of the Company) any obligation or
agreement, or result in the loss of any benefit or the imposition
of any fee or penalty, or give rise to the creation of any Lien
upon the property or assets of the Company, or (c) violate any
Rules (including foreign, federal and state securities laws) of
any Governmental Authority applicable to the Company or the
Seller.
(ii) No Filing Required. No filing or registration with, no notice to
and no permit, authorization, consent or approval of, any third
party or any Governmental Authority is necessary for the
consummation of the transactions contemplated by this Agreement or
to enable the Company to continue to exist after the Closing Date.
(jj) Books and Records. The books and records of the Company are, and
have been, maintained in the usual, regular, ordinary and
appropriate manner by Seller or its agents, and all of the
transactions of the Company are properly reflected therein.
5. Representations and Warranties of Salton. Salton represents and
warrants and agrees with MikeSam that, as of the date hereof and up to
and including the date of closing that each of the following
representations is true and correct:
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(a) Organization. Salton is a duly organized and existing corporation
under the laws of the State of Delaware.
(b) Corporate Authority. Salton has the corporate power under its
articles of incorporation and by laws to enter into and perform
this Agreement.
(c) Board Approval. The Board of Directors of Salton has, by unanimous
written consent in lieu of a special meeting, authorized Salton to
enter into and perform this Agreement.
(d) Restrictions on Salton. There are no contracts currently in effect
which limit or restrict the right of Salton to enter into or
perform this Agreement except only that Salton may determine that
it requires consent from its lenders under the Second Amended and
Restated Credit Agreement by and among Salton and ▇▇▇▇▇▇▇ Brothers
Commercial Paper, Inc., as Administrative Agent for the several
lenders who are parties from time to time to such agreement
("Credit Agreement") to enter into and close the transactions
contemplated by this Agreement.
(e) No Defaults. There are no existing uncured events of default on
the part of Salton under its Credit Agreement.
(f) Shares Available. Salton has authorized but unissued shares of
Common Stock and shares of Common Stock held as Treasury shares
and has reserved, and shall continue to keep reserved for issuance
in connection with the Closing of this Agreement a sufficient
number of Shares to satisfy its obligation to deliver the number
of Shares necessary to close this Agreement.
6. Demand Registration of Salton Shares.
(a) Requests for Registration. The holders of a majority of the Salton
Shares may make one request for registration under the Securities
Act of all or part of their Salton Shares on Form S-1 or any
similar long-form registration ("Long-Form Registration") or, if
available, on Form S-2 or S-3 or any similar short-form
registration ("Short-Form Registration"). The request for a Demand
Registration (as defined below) shall specify the approximate
number of Salton Shares requested to be registered and the
anticipated per share price range for such offering. Within ten
days after receipt of any such request, Salton will give written
notice of such requested registration to all other registered
holders of the Salton Shares and, subject to Section 8 (b) below,
will include in such registration all Salton Shares with respect
to which Salton has received written requests for inclusion
therein within fifteen (15) business days after the receipt of
Salton `s notice. The registration requested pursuant to this
Section 9 (a) is referred to herein as the "Demand Registration."
The holders of the Salton Shares taken together will be entitled
to request for their collective
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benefit only one (1) Demand Registration. Salton will pay all
Registration Expenses (as defined in this Section 9 in connection
with such Demand Registration whether or not the Registration
becomes effective.
(b) Priority on Demand Registrations. Salton may include in the Demand
Registration securities of Salton which are not Salton Shares
without the consent of the holders of the Salton Shares to be
included in such registration unless the managing underwriters of
the Demand Registration advise Salton in writing that, in their
opinion, the number of Salton Shares and other securities of
Salton requested to be included in such offering exceeds the
number of securities of Salton which can be sold therein without
adversely affecting the marketability of the offering. If such
managing underwriters so advise Salton, Salton will include in
such registration, prior to the inclusion of any securities of
Salton which are not Salton Shares, the number of Salton Shares
requested to be included, which in the opinion of such
underwriters, can be sold without adversely affecting the
marketability of the offering, pro rata among the respective
holders thereof on the basis of the number of shares of Salton
Shares owned by each such holder.
(c) Selection of Underwriters. The Demand Registration will be managed
by the holders of Salton Shares as follows: (i) the holders of a
majority of the Salton Shares included in the Demand Registration
will have the right to select the managing underwriters to
administer the offering, subject to Salton's approval; and (ii) in
consultation with the managing underwriter(s), the holders of a
majority of the Salton Shares will have the power to determine the
number of Salton Shares to be included in the offering (subject to
the applicable limitations set forth herein), the offering price
per Salton Share, the underwriting discounts and commissions per
Salton Share, the timing of the registration (subject to the
applicable limitations set forth herein) and all other
administrative matters related to the registration.
(d) Piggyback Registrations.
(i) Option to Offer Piggyback. Whenever Salton proposes to
register any of its securities under the Securities Act and
the registration form to be used for the registration of
such securities (a "Piggyback Registration"), whether or
not for sale for its own account, Salton may elect to give
prompt written notice to the holders of Salton Shares of
its intention to effect such a registration and to include
in such registration all Salton Shares with respect to
which Salton has received written requests for inclusion
therein within 15 business days after the receipt of
Salton's notice, subject to the terms of this Section 9.
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(ii) Piggyback Expenses. The Registration Expenses of the
holders of Salton Shares will be paid by Salton in all
Piggyback Registrations.
(iii) Loss of Demand Registration. If the holders off Salton
Shares sell or are offered the right to sell at least
seventy five percent (75%) of the total number of Salton
Shares issued at the Closing in one or more Piggy Back
Registrations, the holders of Salton Shares shall no longer
be entitled to receive a Demand Registration under this
Agreement.
(e) Holdback Agreements.
(i) Each holder of Salton Shares agrees not to effect any
public sale or distribution (including sales pursuant to
Rule 144) of equity securities of Salton, or any
securities, options or rights convertible into or
exchangeable or exercisable for such securities, during the
seven (7) days prior to and the one hundred eighty (180)
day period beginning on the effective date of any
underwritten Demand Registration or any underwritten
Piggyback Registration (except as part of such underwritten
registration), unless the underwriters managing the
registered public offering otherwise agree.
(ii) Salton agrees (i) not to effect any public sale or
distribution of its equity securities, or any securities
convertible into or exchangeable or exercisable for such
securities, during the seven days prior to and during the
one hundred eighty (180) day period beginning on the
effective date of any underwritten Demand Registration or
any underwritten Piggyback Registration (except as part of
such underwritten registration or pursuant to registrations
on Form S-4 or S-8 or any successor form), unless the
underwriters managing the registered public offering
otherwise agree.
(f) Registration Procedures. Whenever the holders of Salton Shares
have requested that any Salton Shares be registered pursuant to
this Agreement, Salton will use its reasonable efforts to effect
the registration and the sale of such Salton Shares in accordance
with the intended method of disposition thereof and pursuant
thereto Salton will as expeditiously as possible:
(i) prepare and file with the Securities and Exchange Commission
such amendments and supplements to such registration
statement and the prospectus used in connection therewith as
may be necessary to keep such registration statement
effective for a period of either (i) not less than six
months (subject to extension pursuant to Section 9 (h) or,
if such registration statement relates to an underwritten
offering, such longer period as in the opinion of
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counsel for the underwriters a prospectus is required by law
to be delivered in connection with sales of Salton Shares by
an underwriter or dealer or (ii) such shorter period as will
terminate when all of the securities covered by such
registration statement have been disposed of in accordance
with the intended methods of disposition by the seller or
sellers thereof set forth in such registration statement
(but in any event not before the expiration of any longer
period required under the Securities Act), and to comply
with the provisions of the Securities Act with respect to
the disposition of all securities covered by such
registration statement until such time as all of such
securities have been disposed of in accordance with the
intended methods of disposition by the seller or sellers
thereof set forth in such registration statement;
(ii) furnish to each seller of Salton Shares such number of
copies of such registration statement, each amendment and
supplement thereto, the prospectus included in such
registration statement (including each preliminary
prospectus) and such other documents as such seller may
reasonably request in order to facilitate the disposition of
the Salton Shares owned by such seller;
(iii) use its reasonable efforts to register or qualify the Salton
Shares under such other securities or blue sky laws of such
jurisdictions as any seller reasonably requests and do any
and all other acts and things which may be reasonably
necessary or advisable to enable such seller to consummate
the disposition in such jurisdictions of the Salton Shares
owned by such seller (provided that Salton will not be
required to (i) qualify generally to do business in any
jurisdiction where it would not otherwise be required to
qualify but for this subparagraph, (ii) subject itself to
taxation in any such jurisdiction or (iii) consent to
general service of process in any such jurisdiction);
(iv) notify each seller of such Salton Shares, at any time when
the prospectus relating thereto is required to be delivered
under the Securities Act, upon discovery that, or upon the
discovery of the happening of any event as a result of
which, the prospectus included in such registration
statement contains an untrue statement of a material fact or
omits any fact necessary to make the statements therein not
misleading in the light of the circumstances under which
they were made, and, at the request of any such seller,
Salton will prepare and furnish to such seller a reasonable
number of copies of a supplement or amendment to such
prospectus so that, as thereafter delivered to the
purchasers of such Salton Shares, such prospectus will not
contain an untrue statement of a material fact or omit to
state any fact necessary to make the
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statements therein not misleading in the light of the
circumstances under which they were made;
(v) enter into such customary agreements (including
underwriting agreements in customary form) and take all
such other actions as the holders of a majority of the
Salton Shares being sold or the underwriters, if any,
reasonably request in order to expedite or facilitate the
disposition of such Salton Shares;
(vi) make available for inspection by any seller of Salton
Shares, any underwriter participating in any disposition
pursuant to such registration statement and any attorney,
accountant or other agent retained by any such seller or
underwriter, all financial and other records, pertinent
corporate documents and properties of Salton, and cause
Salton's officers, directors, employees and independent
accountants to supply all information reasonably requested
by any such seller, underwriter, attorney, accountant or
agent in connection with such registration statement;
(vii) in the event of the issuance of any stop order suspending
the effectiveness of a registration statement, or of any
order suspending or preventing the use of any related
prospectus or suspending the qualification of any
securities included in such registration statement for sale
in any jurisdiction, Salton will use reasonable efforts
promptly to obtain the withdrawal of such order;
(viii) obtain one or more comfort letters, dated the effective
date of such registration statement (and, if such
registration includes an underwritten public offering,
dated the date of the Closing under the underwriting
agreement), signed by Salton's independent public
accountants in customary form and covering such matters of
the type customarily covered by comfort letters as the
holders of a majority of the Salton Shares being sold
reasonably request (provided that such Salton Shares
constitute at least 10% of the securities covered by such
registration statement);
(ix) provide a legal opinion of Salton's outside counsel, dated
the effective date of such registration statement (and, if
such registration includes an underwritten public offering,
dated the date of the Closing under the underwriting
agreement), with respect to the registration statement,
each amendment and supplement thereto, the prospectus
included therein (including the preliminary prospectus) and
such other documents relating thereto in customary form and
covering such matters of the type customarily covered by
legal opinions of such nature; and
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(x) Salton may require each seller of Salton Shares as to which
any registration is being effected to furnish Salton such
information regarding such seller and the distribution of
such securities as Salton may from time to time reasonably
request in writing.
(g) Registration Expenses. All expenses incident to Salton's
performance of or compliance with this Agreement, including,
without limitation, all registration and filing fees, fees and
expenses of compliance with securities or blue sky laws, printing
expenses, messenger and delivery expenses, salaries and expenses
of its officers and employees performing legal or accounting
duties, the expense of any annual audit or quarterly review, the
expense of any liability insurance, the expenses and fees for
listing the securities to be registered on the New York Stock
Exchange, and fees and disbursements of counsel for Salton and all
independent certified public accountants, underwriters (excluding
discounts and commissions) and other Persons retained by Salton
(all such expenses being herein called "Registration Expenses"),
will be borne by Salton.
(h) Delay of Registration. Notwithstanding the foregoing, Salton shall
have the right to delay the effectiveness of the registration and
of the listing of the Salton Shares for a period of up to one
hundred eighty (180) days if: there are, in Salton's judgment,
possible developments, events or actions which may occur
concerning Salton or its business which would be required to be
disclosed in a registration statement filed with the SEC, which
are not in the best interest of Salton to disclose and need not be
disclosed under the Securities Act unless and until such
developments, events or actions occur.
(i) Participation in Underwritten Registrations. No Person may
participate in any registration hereunder which is underwritten
unless such Person (i) agrees to sell such Person's securities on
the basis provided in any underwriting arrangements approved by
the Person or Persons entitled hereunder to approve such
arrangements (including, without limitation, pursuant to the terms
of any over-allotment or "green shoe" option requested by the
managing underwriter(s); provided, that no holder of Registrable
Securities will be required to sell more than the number of
Registrable Securities that such holder has requested Salton to
include in any registration) and (ii) completes and executes all
questionnaires, powers of attorney, indemnities, underwriting
agreements and other documents reasonably required under the terms
of such underwriting arrangements.
7. Indemnification.
(a) Salton. Salton agrees to indemnify and hold harmless each holder
of Salton Shares, its officers and directors and each Person who
controls such holder (within the meaning of the Securities Act)
against any losses,
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claims, actions, proceedings, judgments, damages and liabilities,
joint or several, to which such holder or any such director,
officer or controlling person may become subject to under the
Securities Act or otherwise (collectively "Loss"), insofar as such
Loss arises out of or is based upon (i) any untrue or alleged
untrue statement of material fact contained in any registration
statement, prospectus or preliminary prospectus or any amendment
thereof or supplement thereto (relating to the Salton Shares) or
(ii) any omission or alleged omission of a material fact required
to be stated therein or necessary to make the statements therein
not misleading, and Salton will reimburse such holder and each
such director, officer and controlling person for any legal or any
other expenses incurred by them in connection with investigating
or defending any such Loss; provided, however, that Salton shall
not be liable in any such case to the extent that any such Loss
arises out of or is based upon an untrue statement or alleged
untrue statement, or omission or alleged omission, made in such
registration statement, any such prospectus or preliminary
prospectus or any amendment or supplement thereto, or in any
application, in reliance upon, and in conformity with, written
information prepared and furnished to Salton by such holder
expressly for use therein or by such holder's failure to deliver a
copy of the registration statement or prospectus or any amendments
or supplements thereto after Salton has furnished such holder with
a sufficient number of copies of the same. In connection with an
underwritten offering, Salton will indemnify such underwriters,
their officers and directors and each Person who controls such
underwriters (within the meaning of the Securities Act) to the
same extent as provided above with respect to the indemnification
of the holders of Salton Shares.
(b) Seller. In connection with any registration statement in which a
holder of Salton Shares is participating, each such holder will
furnish to Salton in writing such information and affidavits as
Salton reasonably requests for use in connection with any such
registration statement or prospectus and, to the extent permitted
by law, will indemnify and hold harmless each other holder of
Salton Shares, Salton, its directors and officers and each other
Person who controls Salton (within the meaning of the Securities
Act) against any Loss, joint or several, to which such other
holder, Salton or any such director or officer or controlling
person may become subject under the Securities Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions
or proceedings, whether commenced or threatened, in respect
thereof) arise out of or are based upon (i) any untrue or alleged
untrue statement of material fact contained in the registration
statement, prospectus or preliminary prospectus or any amendment
thereof or supplement thereto or in any application or (ii) any
omission or alleged omission of a material fact required to be
stated therein or necessary to make the statements therein not
misleading, but only to the extent that such untrue statement or
omission is made in such registration statement, any such
prospectus or preliminary prospectus or any amendment or
supplement thereto, or in any application, in reliance upon and in
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conformity with written information prepared and furnished to
Salton by such holder expressly for use therein, and such holder
will reimburse Salton and each such director, officer and
controlling Person and each other holder of Salton Shares for any
legal or any other expenses incurred by them in connection with
investigating or defending any such Loss.
(c) Notice; Defense. Any person entitled to indemnification hereunder
will (i) give prompt written notice to the indemnifying party of
any claim with respect to which it seeks indemnification and (ii)
unless in such indemnified party's reasonable judgment a conflict
of interest between such indemnified and indemnifying parties may
exist with respect to such claim, permit such indemnifying party
to assume the defense of such claim with counsel reasonably
acceptable to the indemnifying party. If such defense is assumed,
the indemnifying party will not be subject to any liability for
any settlement made by the indemnified party without its consent
(but such consent will not be unreasonably withheld). An
indemnifying party who is not entitled to, or elects not to,
assume the defense of a claim will not be obligated to pay the
fees and expenses of more than one counsel for all parties
indemnified by such indemnifying party with respect to such claim,
unless in the reasonable judgment of any indemnified party a
conflict of interest may exist between such indemnified party and
any other of such indemnified parties with respect to such claim.
(d) Survival. The indemnification provided for under this Agreement
will remain in full force and effect regardless of any
investigation made by or on behalf of the indemnified party or any
officer, director or controlling person of such indemnified party
and will survive the transfer of securities. Salton also agrees to
make such provisions, as are reasonably requested by any
indemnified party, for contribution to such party in the event
Salton's indemnification is unavailable for any reason.
8. Survival of Representations, Warranties. All representations and
warranties of Seller and Salton contained herein shall survive the
Closing Date and shall terminate at the close of twenty four (24) full
calendar months next following the Closing Date. Upon the termination
of a representation or warranty in accordance with the foregoing, the
representation or warranty shall have no further force or effect for
any purpose under this Agreement, provided that, any representation or
warranty in respect of which indemnity may be sought under Section 12
and the indemnity with respect thereto, shall survive the date at which
it would otherwise terminate pursuant to this Section 12 if written
notice of the inaccuracy or breach thereof giving rise to such right of
indemnity shall have been given to the party against whom such
indemnity may be sought prior to such time.
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5. Indemnification.
(a) By Seller. Seller shall defend and indemnify Salton, and its
officers and directors, and hold each of them harmless from and
against any and all claims, demands, actions, suits, judgments,
liability and loss, including legal fees and expenses and court
costs (collectively, "Loss") incurred by any of them in connection
with, arising out of, or resulting from (i) any breach of any
representation or warranty made by Seller in this Agreement; or
(ii) any failure by Seller to perform in a timely manner any
agreement, covenant or obligation of Seller pursuant to this
Agreement.
(b) By Salton. Salton shall defend and indemnify Seller and hold
Seller harmless from and against any and all Loss incurred by each
of them in connection with, arising out of or resulting from (i)
any breach or inaccuracy of any representation or warranty made by
Salton in this Agreement or (ii) any failure by Salton to perform
in a timely manner any agreement, covenant or obligation of Salton
pursuant to this Agreement.
(c) Defense of Claims. If a claim for Loss (a "Claim") is to be made
by a party entitled to indemnification hereunder (the "Indemnified
Party") against the party from whom indemnification is claimed
(the "Indemnifying Party"), the Indemnified Party shall give
written notice (a "Claim Notice") to the Indemnifying Party as
soon as practicable after the Indemnified Party becomes aware of
any fact, condition or event which may give rise to Loss for which
indemnification may be sought under this Section 12. If any
lawsuit or enforcement action is filed against any party entitled
to the benefit of indemnity hereunder, written notice thereof
shall be given to the Indemnifying Party as promptly as
practicable (and in any event within ten (10) business days after
the service of the citation or summons). The failure of any
Indemnified Party to give timely notice hereunder shall not affect
rights to indemnification hereunder, except to the extent that the
Indemnifying Party demonstrates actual Loss caused by such
failure. Notwithstanding the foregoing, a Claim Notice must be
made within the survival period set forth in this Section 12,
whether or not the Indemnifying Party is prejudiced by any failure
to give the Claim Notice. The Claim Notice shall describe in
reasonable detail the nature of the Claim, including an estimate
of the amount of Loss that have been or may be suffered or
incurred by the Indemnified Party attributable to such Claim, the
basis of the Indemnified Party's request for indemnification under
the Agreement and all information in the Indemnified Party's
possession relating to such Claim. After receipt of such Claim
Notice, the Indemnifying Party shall be entitled, if it so elects,
at its own cost, risk and expense, (i) to take control of the
defense and investigation of such lawsuit or action and (ii) to
employ and engage attorneys of its own choice to handle and defend
the same, provided however that the attorneys shall be reasonably
acceptable to the Indemnified Party. If the Indemnifying Party
fails to assume the defense of such Claim within ten (10) business
days
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after receipt of the Claim Notice, the Indemnified Party against
which such Claim has been asserted will (upon delivering notice to
such effect to the Indemnifying Party) have the right to
undertake, at the Indemnifying Party's cost and expense, the
defense, compromise or settlement of such Claim on behalf of and
for the account and risk of the Indemnifying Party; provided,
however, that such Claim shall not be compromised or settled
without the written consent of the Indemnified Party, which
consent shall not be unreasonably withheld. In the event the
Indemnifying Party assumes the defense of the Claim, the
Indemnifying Party will keep the Indemnified Party reasonably
informed of the progress of any such defense, compromise or
settlement. Notwithstanding the foregoing, the Indemnified Party
shall be entitled to conduct its own defense at the cost and
expense of the Indemnifying Party if the Indemnified Party
establishes that the conduct of its defense by the Indemnifying
Party would reasonably be likely to prejudice materially the
Indemnified Party due to a conflict of interest between the
Indemnified Party and the Indemnifying Party; and provided further
that in any event the Indemnified Party may participate in such
defense at its own expense.
(d) Settlement. In the event that the Indemnified Party settles any
Claim without the prior written consent of the Indemnifying Party,
the Indemnifying Party shall have no further indemnification
obligations under this Section 13 with respect to such Claim;
provided, however, that if the Indemnifying Party refuses to
defend or otherwise handle such Claim and it is subsequently
determined that the Indemnifying Party is or was obligated to
defend or indemnify the Indemnified Party with respect to such
Claim, then the Indemnifying Party shall remain obligated with
respect to such settlement amount. If the Indemnifying Party shall
control the defense of any such Claim, the Indemnifying Party
shall obtain the prior written consent of the Indemnified Party
(which shall not be unreasonably withheld) before entering into
any settlement of a Claim or ceasing to defend such Claim if,
pursuant to or as a result of such settlement or cessation,
injunctive or other equitable relief shall be imposed against the
Indemnified Party or if such settlement or cessation does not
expressly and unconditionally release the Indemnified Party from
all liabilities and obligations with respect to such Claim,
without prejudice. In the event that the Indemnifying Party
proposes a settlement to any Claim with respect to which the
Indemnifying Party is or was entitled to defend, which settlement
is satisfactory to the party instituting such Claim, and the
Indemnified Party withholds its consent to such settlement, and
thereafter a final judgment is entered against the Indemnifying
Party or Indemnified Party pursuant to which Loss exceeds the
amount of the proposed settlement, then in such case the
Indemnifying Party shall have no obligation to indemnify the
Indemnified Party under this Section 13 against and in respect of
the amount by which the Loss resulting from such final judgment
exceed the amount of the proposed settlement.
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(e) Mitigation. Each Indemnified Party shall have an obligation to
mitigate Loss under this Agreement, and to that end each party
shall use its reasonable efforts and shall consult and cooperate
with each other with a view towards mitigating Loss, costs and
expenses that may give rise to claims for indemnification under
this Section 12.
(f) Cooperation. In the event that any action, suit, proceeding or
investigation relating hereto or to the transactions contemplated
by this Agreement is commenced, whether before or after the
Closing, the parties hereto agree to cooperate and use reasonable
efforts to vigorously defend against and respond thereto and make
available to each other such personnel, witnesses, books, records,
documents or other information within its control that are
necessary or appropriate for such defense; provided that, subject
to this Section 12, the Indemnifying Party shall reimburse the
Indemnified Party for its out of pocket expenses incurred in
connection therewith.
(g) Insurance Proceeds. With respect to any Claim required to be
indemnified pursuant to this Agreement, so long as the
Indemnifying Party has complied with its indemnification
obligations on such Claim, (i) to the extent available, the
Indemnified Party shall assign to the Indemnifying Party any
applicable proceeds under any insurance policy which covers the
matter which is the subject of the indemnification and shall take
reasonable steps to insure that the Indemnifying Party obtains the
benefits of such policy, including providing any notices as
required under such policy; and (ii) if the Indemnified Party
receives insurance proceeds with respect to any Loss paid by the
Indemnifying Party, then the Indemnified Party shall reimburse the
Indemnifying Party in an amount equivalent to such proceeds up to
the amount actually paid by the Indemnifying Party.
(h) Offset. If a Put or a Call is exercised under this Agreement,
following the Closing of this Agreement, in addition to any other
remedies set forth herein for the benefit of Salton, upon any
breach by Seller of any representation, warranty or agreement by
Seller set forth in this Agreement, including the indemnification
provisions of this Section 12, Salton shall have the right to
offset any amounts or any performance owing by Salton to Seller
under this Agreement or any other agreement between Seller and
Salton any the amount of any Loss incurred by Salton by reason of
such breach by Seller.
6. Definitions. As used in this Agreement, the following capitalized terms
shall have the following meaning.
"Affiliate" shall mean (i) a Person that directly or indirectly,
through one or more intermediaries, controls, is controlled by, or is under
common control with, another Person and (ii) any parent, spouse, lineal
descendant or adopted child of a Person specified in clause (i), any spouse or
adopted child of any such descendant or any child of such spouse, the executors,
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administrators, conservators or personal representatives of any Person referred
to in this clause (ii) and any Person which, directly or indirectly, is owned or
controlled by one or more of the Persons referred to in this clause (ii);
"Affiliated Group" means any affiliated group as defined in Section
1504 of the Code (or any analogous combined, consolidated or unitary group under
state, local or foreign income Tax law) of which the Company or any of its
Affiliates is or has been a member;
"Claims" shall mean all pending and threatened claims, actions, causes
of action, demands, orders, notices, suits, grievances, proceedings, disputes,
arbitrations and investigations;
"Environmental Claim" shall mean any Claim (written or oral) by any
Person or any Governmental Authority alleging potential Liability or obligations
(including potential Liability or obligations for or requirement to incur
investigatory costs, cleanup costs, governmental response costs, natural
resources damages, property damages, personal injuries, or penalties) arising
out of, based on or resulting from (i) the presence, release or threatened
release into the environment, of any Materials of Environmental Concern at any
location, whether or not owned or operated by the Company, or (ii) circumstances
forming the basis of any violation, potential violation or alleged violation, or
Liability, potential Liability or alleged Liability, under any Environmental
Law;
"Environmental Laws" shall mean all Rules and permit conditions
relating to pollution or protection of human health or the environment
(including ambient air, indoor air, surface water, ground water, land surface or
subsurface strata), including Rules relating to emissions, discharges, releases
or threatened releases of Materials of Environmental Concern, or otherwise
relating to the manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling of Materials of Environmental Concern;
"Governmental Authority" shall mean any court (federal, state, local,
foreign or otherwise), any arbitration or other alternative dispute mechanism,
any federal, state, local, foreign or other government or governmental
department, agency, board, commission, bureau or instrumentality and any other
regulatory authority;
"Liability" means any liability (whether known or unknown, whether
asserted or unasserted, whether absolute or contingent, whether accrued or
unaccrued, whether liquidated or unliquidated, and whether due or to become
due), including any liability for Taxes;
"Liens" shall mean all title defects, charges, claims, restrictions,
liens, pledges, security interests, mortgages, tenancies and other possessory
interests, conditional sale or other title retention agreements, assessments,
easements, rights of way, covenants, restrictions, rights of first refusal,
encroachments and other burdens, options, restrictions or encumbrances of any
kind;
"Person" shall mean an individual, corporation, limited liability
company, partnership, joint venture, association, trust, unincorporated
organization or, as applicable, any other entity;
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"Rules" shall mean any federal, state, local or foreign statute, law,
code, ordinance, rule, regulation, judgment, writ, decree, injunction, order,
concession, grant, franchise, permit or license or other governmental or
regulatory authorization or approval applicable to the Company or any of the
Stockholders or any of their respective assets, properties or operations or any
Plan;
7. Miscellaneous.
(a) Notices. All notices, requests, demands and other communications
which are required or may be given under this Agreement shall be
in writing and shall be deemed to have been duly given when
received if personally delivered; when transmitted if transmitted
by telecopy, electronic or digital transmission method and
followed by a confirmation of receipt from the recipient of the
notice; the day after it is sent, if sent for next day delivery
to a domestic address by recognized overnight delivery service
(e.g., DHL); and upon receipt, if sent by certified or registered
mail, return receipt requested. In each case notice shall be sent
as indicated below:
If to Seller:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
With copies to:
▇▇▇ ▇. ▇▇▇▇▇, Esq.
▇▇▇▇▇ & Associates
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
If to Salton, addressed to:
Salton, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Chief Executive Officer
Tel.: ▇▇▇ ▇▇▇ ▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
(b) Choice of Law. This Agreement shall be construed, interpreted and
the rights of the parties determined in accordance with the laws
of the State of Delaware (without reference to its choice of law
provisions).
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(c) Entire Agreement; Amendments and Waivers. This Agreement, together
with all exhibits and schedules hereto and thereto, and the
constitute the entire agreement among the parties pertaining to
the subject matter hereof and supersede all prior agreements,
understandings, negotiations and discussions, whether oral or
written, of the parties. This Agreement may not be amended except
by an instrument in writing signed on behalf of each of the
parties hereto. No amendment, supplement, modification or waiver
of this Agreement shall be binding unless executed in writing by
the party to be bound thereby. No waiver of any of the provisions
of this Agreement shall be deemed or shall constitute a waiver of
any other provision hereof (whether or not similar), nor shall
such waiver constitute a continuing waiver unless otherwise
expressly provided.
(d) Multiple Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original, but
all of which together shall constitute one and the same
instrument.
(e) Invalidity. In the event that any one or more of the provisions
contained in this Agreement or in any other instrument referred to
herein, shall, for any reason, be held to be invalid, illegal or
unenforceable in any respect, then to the maximum extent permitted
by law, such invalidity, illegality or unenforceability shall not
affect any other provision of this Agreement or any other such
instrument.
(f) Titles; Gender. The titles, captions or headings of the Sections
herein, and the use of a particular gender, are for convenience of
reference only and are not intended to be a part of or to affect
or restrict the meaning or interpretation of this Agreement.
(g) Waiver of Trial by Jury. Each party to this Agreement hereby
expressly waives any right to trial by jury of any claim, demand,
action or cause of action arising under or in connection with this
Agreement or the transaction contemplated hereby.
(h) Interpretation. The headings and captions contained in this
Agreement and in the Schedules hereto are for reference purposes
only and shall not affect in any way the meaning or interpretation
of this Agreement.
(i) Further Assurances. Each of Seller and Salton will use reasonable
efforts to implement the provisions of this Agreement, including
but not limited to the execution and delivery of such other
documents (including any license, assignment or assumption
agreement, official certificates of registration, renewals,
transfers or other documents supporting ownership of trademarks)
in addition to those required by this Agreement, in form and
substance reasonably satisfactory to the other party, as may be
reasonably deemed necessary to implement any provision of this
Agreement.
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IN WITNESS WHEREOF, this Agreement has been signed on behalf of each of the
parties hereto as the date first written above.
SALTON, INC.,
a Delaware corporation
/s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇ /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
----------------------------------------- ------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Chief Executive Officer
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