Exhibit 99.11
Execution Version
WAIVER, CONSENT FORBEARANCE AND
SEVENTEENTH AMENDMENT
TO AMENDED AND RESTATED CREDIT AGREEMENT
THIS WAIVER, CONSENT, FORBEARANCE AND
SEVENTEENTH AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT
(this “ Seventeenth Amendment ”) is made and
entered into as of October 1, 2007, by and among the financial
institutions identified on the signature pages hereof (such
financial institutions, together with their respective successors
and assigns, are referred to hereinafter each individually as a
“ Lender ” and collectively as the “
Lenders ”), WELLS FARGO FOOTHILL, INC., a California
corporation, as administrative agent and collateral agent for the
Lenders (in such capacities, together with any successor
administrative agent and collateral agent, the “ Agent
”), SILVER POINT FINANCE, LLC, as the co-agent, syndication
agent, documentation agent (in such capacities, together with any
successor co-agent, syndication agent, and documentation agent, the
“ Co-Agent ”), arranger and book runner, SALTON,
INC., a Delaware corporation (the “ Parent ”),
each of the Parent’s Subsidiaries identified on the signature
pages hereof as Borrowers (collectively with the Parent, the
“ Borrowers ”) and each of the Parent’s
Subsidiaries identified on the signature pages hereof as Guarantors
(collectively, the “ Guarantors ” and, together
with the Borrowers, the “ Borrower Parties ”).
As provided in Section 1 below, capitalized terms used in this
Agreement and not otherwise defined herein have the meanings set
forth in the Credit Agreement referred to in Recital A.
below.
RECITALS :
A. The Lenders, the Agent, the
Co-Agent and the Borrowers are parties to that certain Amended and
Restated Credit Agreement, dated as of May 9, 2003 and amended
and restated as of June 15, 2004 (as amended as of
August 30, 2004, as of May 11, 2005, as of July 8,
2005, as of September 22, 2005, as of October 7, 2005, as
of November 9, 2005, as of February 8, 2006, as of
May 10, 2006, as of August 15, 2006, as of
February 12, 2007, as of April 13, 2007, as of
June 28, 2007, as of July 30, 2007, as of July 31, 2007,
as of August 6, 2007, as of August 8, 2007 and as it may
be further amended, modified, supplemented or amended and restated
from time to time, the “ Credit Agreement
”).
B. Salton, Inc., SFP Merger Sub,
Inc. and APN Holding Company, Inc., a wholly owned subsidiary of
Harbinger Capital Partners Master Fund I, Ltd. and Harbinger
Capital Partners Special Situations Fund, L.P. (the “
Harbinger Entities ”), are, concurrently with the
execution and delivery of this Seventeenth Amendment, executing and
delivering an Agreement and Plan of Merger dated as of, and as in
effect on, the date hereof (“ Merger Agreement
”).
C. On or after November 10,
2007, the component of the Borrowing Base described in clause (D)
of the definition thereof will be reduced to zero, likely resulting
in an Overadvance (as defined below). Pursuant to the terms of the
Credit Agreement, the Borrowers are obligated to repay the
Obligations in an amount equal to the sum of (i) principal
amount of the Overadvance; (ii) accrued and unpaid interest
thereon; and (iii) funding losses, if any, as required by
Section 4.4 of the Credit Agreement.
D. Concurrently with the
execution and delivery of the Seventeenth Amendment, the Borrower
Parties, Co-Agent and the Harbinger Entities are entering into a
Loan Purchase Agreement (attached hereto as Exhibit A (the
“ Loan Purchase Agreement ”). The Loan Purchase
Agreement provides that upon the occurrence of certain events and
according to certain terms, the Harbinger Entities agree to buy
certain Loans and Obligations under the Credit Agreement from
Co-Agent.
E. Concurrently with the
execution and delivery of this Seventeenth Amendment, Borrowers and
the Harbinger Entities are entering into a Reimbursement and Credit
Agreement (as defined below) which shall govern the terms and
conditions of certain loans and obligations purchased under the
Loan Purchase Agreement (as defined below) and provides for the
payment of certain fees and expenses as set forth therein. The
Harbinger Entities are also entering into an Intercreditor
Agreement (“ Junior Intercreditor Agreemen t”)
with the Second Lien Agent.
F. Certain Defaults and Events
of Default have occurred and are continuing under Sections
3.1(c)(iv), 7.33 and 7.34 of the Credit Agreement (“
Existing Events of Defaults ”). The Borrower Parties
have requested and the Lenders have agreed to forbear from
exercising remedies with respect to the Existing Events of Defaults
on the terms and conditions set forth herein.
G. In order to consummate the
transactions contemplated by these Recitals, the Borrowers have
requested, and the Agent, Co-Agent and the Lenders have agreed, to
certain amendments to the Credit Agreement as set forth
herein.
NOW, THEREFORE, in consideration of
the agreements and provisions herein contained the parties hereto
do hereby agree as follows:
Section 1. Definitions
. Any capitalized terms used but not otherwise defined
herein shall have the meanings ascribed to such terms in the Credit
Agreement (as amended hereby).
Section 2. Amendments to the
Credit Agreement . The Credit Agreement is hereby
amended, effective as of the date this Seventeenth Amendment
becomes effective in accordance with Section 4 hereof,
as follows:
2.01 Additional
Definitions Annex A to the Credit Agreement is hereby
amended by adding the following definitions in the correct
alphabetical order:
(a) “
Amended and Restated Intercreditor Agreement ” means
the Amended and Restated Intercreditor Agreement dated as of
October 1, 2007 among Harbinger Capital Partners Master Fund
I, Ltd., Harbinger Capital Partners Special Situations Fund, L.P.,
the Second Lien Agent, the Co-Agent and the Agent, as amended,
modified, supplemented or restated from time to time.
(b) “
Loan Purchase Agreement ” means the Loan Purchase
Agreement dated as of October 1, 2007 among Borrower Parties,
Co-Agent, Harbinger Capital Partners Master Fund I, Ltd. and
Harbinger Capital Partners Special Situations Fund, L.P., and all
exhibits and schedules thereto.
(c)
“Merger Agreement means the Agreement and Plan of
Merger dated as of October 1, 2007 among Salton, Inc., SFP
Merger Sub, Inc. and APN Holding Company, Inc. as in effect on the
date hereof.
(d)
“Merger Agreement Termination ” means the Merger
Agreement expires or is terminated or is terminable by any party
thereto.
(e) “
Overadvance ” means an amount equal to the excess of
the Aggregate Outstandings over the lower of the Borrowing Base and
the Maximum Amount.
(f) “
Overadvance Amount ” means an amount equal to the sum
of (i) principal amount of the Overadvance; (ii) accrued
and unpaid interest thereon and (iii) funding losses, if any,
as required by Section 4.4 hereof.
(g) “
Reimbursement and Credit Agreement ” means the
Reimbursement and Senior Secured Credit Agreement dated
October 1, 2007 among Harbinger Capital Partners Master Fund
I, Ltd., Harbinger Capital Partners Special Situations Fund, L.P.,
as the Lenders, Harbinger Capital Partners Master Fund I, Ltd., as
Agent, and Salton, Inc., as in effect on such date.
(h) “
Reimbursement Loan Documents ” means the “Loan
Documents” as defined in the Reimbursement and Credit
Agreement.
(i) “
Stretch Loans ” means loans made available pursuant to
clause (a)(D) of the definition of Borrowing Base
2.02 Amended
Definitions . Annex A to the Credit Agreement is hereby
amended by:
(a) Clause
(a)(D) of the definition of “ Borrowing Base ”
is hereby amended by deleting it in its entirety and inserting the
following in lieu thereof:
“(D)
the sum of
(i) the
lesser of
(A) the
sum of
(I)
ten percent (10%) of the Net Amount of Eligible Accounts,
plus
(II)
the sum of (x) twenty-four percent (24%) of the value of the
Eligible Landed Inventory, plus (y) twenty-nine percent (29%)
of the book value of Eligible In-Transit Inventory valued at the
lower of cost (determined on a first-in, first-out basis) or
market; and
(B) $16,200,000;
plus
(ii) the
Stretch Amount;
provided, that,
notwithstanding the foregoing, on and after November 10, 2007,
the result of this clause (D) shall be zero. The
“Stretch Amount” shall be $52,289,509.48.”
(b) deleting
the definition of “ Intercreditor Agreement ” in
its entirety and inserting the following in lieu thereof:
“
Intercreditor Agreement ” means, prior to the
Effective Date (as defined in the Amended and Restated
Intercreditor Agreement), that certain Intercreditor Agreement,
dated as August 26, 2005, among the Co-Agent and the Agent, on
the one hand, and the Second Lien Agent, on the other hand, as
amended, modified, supplemented or restated from time to time, and
after the Effective Date (as defined in the Amended and Restated
Intercreditor), the Amended and Restated Intercreditor
Agreement.
(c) adding
the following sentence to the end of the definition of “
Loan Documents ”:
“Loan
Documents shall also include the Loan Purchase
Agreement.”
(d) deleting
the definition of “ Maximum Amount ” and in its
entirety and inserting the following in lieu thereof:
“
Maximum Amount ” means a principal amount of Loans
made and Letters of Credit issued (or guaranteed) under this
Agreement equal to $187,500,000 minus the principal amount of
Stretch Loans purchased pursuant to the Loan Purchase
Agreement.”
(e) deleting
the period at the end of the definition of “ Permitted
Liens ”, inserting the word ‘and” in lieu
thereof and adding the following clause (k) thereto:
“(k)
Liens, subject to the Intercreditor Agreement, to secure
obligations and liabilities arising under the Reimbursement and
Credit Agreement and the Reimbursement Loan Documents.”
2.03 Amendment of
Section 1.2(k) . Section 1.2 of the Credit
Agreement is hereby amended by deleting Section 1.2(k) in its
entirety.
2.04 Amendment of
Section 3.1(c) . Section 3.1(c) of the Credit
Agreement is hereby amended by deleting clause (iv) thereof in
its entirety and inserting the following in lieu thereof:
“(iv) If
the aggregate principal amount of the Loans exceeds the lesser of
the Borrowing Base and the Maximum Amount, the Borrowers shall
prepay the outstanding principal amount of the Loans in an amount
equal to such excess.”
2.05 Addition of
Section 3.9 . The Credit Agreement is hereby amended
by adding the following Section 3.9 immediately
following Section 3.8 :
“Section 3.9. Loan Purchase Agreement . If at any
time any Lender sells any Loans pursuant Section 1(a) of the Loan
Purchase Agreement, the Loans so purchased shall automatically and
without any further action cease to be governed by the terms and
conditions of this Agreement and shall be governed by and subject
to the terms of the Reimbursement and Credit Agreement. The
purchaser of such Loans shall not be a “Lender”
hereunder and shall have no rights or obligations
hereunder.”
2.06 Amendment of
Section 7.12 . Section 7.12 of the Credit
Agreement is hereby amended by deleting it in its entirety and
inserting the following in lieu thereof:
“Section 7.12 Guaranties . No Loan party shall
make, issue, or become liable on any Guaranty, except:
(a) Guaranties of the Obligations in favor of the Agent,
(b) Guaranties by the Parent of Debt permitted by
Section 7.13 , trade payables and real estate operating
leases, (c) Guaranties of Debt by Guarantors permitted by
Sections 7.13 (e) , (k) or (m)
.”
2.07 Amendment of
Section 7.13 . Section 7.13 of the Credit
Agreement is hereby amended by deleting it in its entirety and
inserting the following in lieu thereof:
“Section 7.13. Debt . No Loan Party shall incur
or maintain any Debt, other than: (a) the Obligations;
(b) Debt described on Schedule 7.13; (c) Debt of
Salton Holdings Limited and Salton Europe Limited, under the
Facility Agreement dated 23rd December 2005 among those
entities, the lender parties listed therein, Burdale Financial
Limited as agent and security trustee, as amended to the date
hereof not exceeding the principal amount outstanding set forth on
Annex C, Section II during the corresponding periods set forth
on Annex C, Section II; (d) [Reserved]; (e) the Senior
Notes in a principal amount equal to the principal amount
outstanding on August 8,2007 less any repayments of principal
of the Senior Notes after such date; (f) the Intercompany
Account so long as such Debt is to the Subordination Agreement and,
provided that, from and after May 11, 2005 (i) no
Borrower Party shall make any Investment in a Foreign Subsidiary
and (ii) no Foreign Subsidiary shall make any Investment in
another Foreign Subsidiary; (g) Debt in respect of foreign
currency hedging agreements with aggregate notional amounts not
greater than $2,000,000 at any time; (h) [Reserved]; (i)
[Reserved]; (j) [Reserved]: (k) the Second Lien Term Loan in a
principal amount outstanding on August 8, 2007 less any
repayments of principal of the Second Lien Term Loan after such
date; (l) [Reserved]; and (m) Debt incurred under the
Reimbursement and Credit Agreement to fund the purchase of Loans
under Section 1(a) of the Loan Purchase Agreement in a principal
amount not exceeding the Purchase Price (as defined in the Loan
Purchase Agreement) of such Loans, plus fees not to exceed
$5,000,000 and expenses reimbursable thereunder. Notwithstanding
anything to the contrary contained herein, the Parent shall not,
directly or indirectly, enter into any amendment or modification of
the documents evidencing the Debt permitted under clause
(g) above that is any manner adverse to the Parent, any
Subsidiary, the Agent, the Co-agent or any Lender. Notwithstanding
anything to the contrary contained herein, no Borrower
Party shall,
directly or indirectly, enter into any amendment or modification of
the documents evidencing the Debt permitted under clauses (e), (f),
(k) or (m) above or any other Second Lien Loan Document
or any other Reimbursement Loan Document.
2.08 Amendment to
Schedule 7.33 . Paragraph H to Schedule 7.33
of the Credit Agreement is hereby amended by deleting it in its
entirety and inserting the following in lieu thereof:
“The
Borrower Parties shall not use any proceeds of the Loans to make
any payments of principal, interest, fees or other amounts on or
with respect to the Senior Notes, the Second Lien Term Loans or
obligations under the Reimbursment and Credit Agreement; provided,
however, the Borrower Parties may use proceeds of
|
