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EXHIBIT 99.3
FORM OF
STOCKHOLDERS AGREEMENT
BY AND AMONG
SALTON, INC.,
HARBINGER CAPITAL PARTNERS MASTER FUND I, LTD.
AND
HARBINGER CAPITAL PARTNERS SPECIAL SITUATIONS FUND, L.P.
_______________________________________________________
____________________ DATED AS OF ____________ __, 2007
_______________________________________________________
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TABLE OF CONTENTS
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ARTICLE I INTERPRETATION
1
1.1
Definitions
1
ARTICLE II REPRESENTATIONS AND WARRANTIES
3
2.1
Representations and Warranties of the Company
3
2.2
Representations and Warranties of the Stockholders
4
ARTICLE III STANDSTILL
5
3.1
Standstill
5
ARTICLE IV GOVERNANCE
5
4.1 Composition of
the Board
5
4.2
Affiliate Transactions
5
ARTICLE V MISCELLANEOUS
6
5.1
Amendments and Waivers
6
5.2
Notices
6
5.3
Interpretation
6
5.4
Severability
7
5.5
Counterparts
7
5.6
Entire Agreement
7
5.7
Third Party Beneficiaries
7
5.8
Governing Law
7
5.9
Successors and Assigns
7
5.10
Submission to Jurisdiction; Waivers
7
5.11
Specific Performance
8
5.12
WAIVER OF JURY TRIAL
8
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EXHIBITS
Exhibit A - Addresses for Notice
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FORM OF
STOCKHOLDERS AGREEMENT
THIS
STOCKHOLDERS AGREEMENT (this "Agreement") is made and entered into
as
of _________ __, 2007, by and between Salton, Inc., a Delaware
corporation (the
"Company"), and Harbinger Capital Partners Master Fund I, Ltd., a
company
organized under the laws of the Cayman Islands (the "Master Fund"),
and
Harbinger Capital Partners Special Situations Fund, L.P., a
Delaware limited
partnership (each, a "Stockholder" and, collectively, the
"Stockholders").
WHEREAS,
on February 7, 2007, the Company, SFP Merger Sub, Inc., a
Delaware corporation and a direct wholly owned subsidiary of the
Company, and
APN Holding Company, Inc., a Delaware corporation, entered into an
Agreement and
Plan of Merger (the "Merger Agreement");
WHEREAS,
in connection with the Merger, the Stockholders received in the
aggregate [_________] shares of Common Stock (as hereafter
defined);
WHEREAS,
in addition to the shares received in the Merger, the Master
Fund
also owns 701,600 shares of Common Stock and the Stockholders own
other
securities of the Company;
WHEREAS,
the parties hereto desire to enter into this Agreement to
establish certain arrangements with respect to the shares of Common
Stock to be
beneficially owned by the Stockholders and their respective
Affiliates following
the Effective Time (as defined in the Merger Agreement), as well as
restrictions
on certain activities in respect of the Common Stock, corporate
governance and
other related corporate matters; and
WHEREAS,
as a condition to its willingness to enter into the Merger
Agreement, the Company has requested that each Stockholder enter
into this
Agreement.
NOW,
THEREFORE, the parties hereto agree as follows:
ARTICLE I
INTERPRETATION
1.1
Definitions. The following terms, as used in this Agreement,
shall
have the meanings set forth below.
"Action"
means any controversy, claim, action, litigation, arbitration,
mediation or any other proceeding by or before any Governmental
Entity,
arbitrator, mediator or other Person acting in a dispute resolution
capacity, or
any investigation, subpoena or demand preliminary to any of the
foregoing.
"Affiliate" means, with respect to a Person, another Person that
directly,
or indirectly through one or more intermediaries, controls, or is
controlled by,
or is under common
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control with, such Person. For purposes of this Agreement, the
Company and its
Subsidiaries shall not be considered Affiliates of any
Stockholder.
"Agreement" shall have the meaning ascribed to it in the preamble
to this
Agreement.
"Board"
means the Board of Directors of the Company.
"Common
Stock" means the Company's common stock, par value $0.01 per
share, and any other class of common stock of the Company that may
be created
from time to time, and any securities issued in respect thereof, or
in
substitution therefor, in connection with any stock split, dividend
or
combination, or any reclassification, recapitalization, merger,
consolidation,
exchange or other similar reorganization.
"Company"
shall have the meaning ascribed to it in the preamble to this
Agreement.
"Contract"
means any legally binding instrument or legal obligation of any
kind, whether written or oral.
"Controlled
Affiliates" means, with respect to a Person, Affiliates as to
which such Person owns at least a majority of the voting power and
controls
their investment and voting decisions.
"Director"
means any member of the Board (other than any advisory,
honorary or other non-voting member of the Board).
"Encumbrance" means any lien, security interest, pledge, mortgage,
deed of
trust, charge, option or other encumbrance attaching to title to
any tangible or
intangible property or right.
"Exchange
Act" means the Securities Exchange Act of 1934, as amended.
"GAAP"
means United States generally accepted accounting principles as
in
effect from time to time, consistently applied.
"Governmental Entity" means any arbitrator, court, judicial,
legislative,
administrative or regulatory agency, commission, department, board,
bureau, body
or other governmental authority or instrumentality or any Person
exercising
executive, legislative, judicial, regulatory or administrative
functions of or
pertaining to government, whether foreign, federal, state or
local.
"Independent" Director means any Director who is or would be
"independent"
within the meaning of the rules of the NYSE.
"Law"
means any statute, law, ordinance, rule or regulation of any
Governmental Entity.
"Merger
Agreement" shall have the meaning ascribed to such term in the
recitals to this Agreement.
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"NYSE"
means the New York Stock Exchange.
"Order"
means any order, judgment, ruling, decree, writ, permit,
license
or other requirement of any Governmental Entity.
"Permit" means
any permit, approval, license, authorization, certificate,
right, exemption or Order from any Governmental Entity.
"Person"
means any individual or legal entity, including any
partnership,
joint venture, corporation, trust, unincorporated organization,
limited
liability company or Governmental Entity.
"SEC"
means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Stockholder" or "Stockholders" shall have the meaning ascribed to
such
term in the Preamble.
"Stockholder" Group shall have the meaning ascribed to such term
in
Section 3.1 of this Agreement.
"Subsidiary" of any Person means any Person whose financial
condition is
required to be consolidated with the financial condition of the
first Person in
the preparation of the first Person's financial statements under
GAAP.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
2.1
Representations and Warranties of the Company. The Company
represents
and warrants to the Stockholders as follows:
(a) The Company is duly organized, validly existing and in good
standing under the laws of the State of Delaware.
(b) The Company has the requisite power and authority to execute
and
deliver this Agreement and to perform its obligations hereunder.
The execution
and delivery by the Company of this Agreement have been duly
authorized and
approved by all necessary corporate action on the part of the
Company. This
Agreement constitutes the valid and binding obligation of the
Company,
enforceable against the Company 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 creditor's rights generally and by general equitable
principles.
(c) The execution and delivery by the Company of this Agreement
and
the performance of its obligations hereunder and compliance with
the terms
hereof do not and will not, (i) violate or conflict with any
provision of its
certificate of incorporation or bylaws or the comparable governing
documents of
any of its Subsidiaries, (ii) violate or conflict with any Law or
Order
applicable to the Company or any of its Subsidiaries or by which
any of their
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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 the
Company 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 the Company or any of its Subsidiaries is a
party, or by
which the Company 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 a material adverse
effect on the
ability of the Company to perform its obligations under this
Agreement.
2.2
Representations and Warranties of the Stockholders. Each
Stockholder
hereby, severally and not jointly, represents and warrants to the
Company as of
the date hereof in respect of itself as follows:
(a) The Stockholder is duly organized, validly existing and in
good
standing under the laws of the jurisdiction in which it is
organized.
(b) The Stockholder has the requisite power and authority to
execute
and deliver this Agreement and to perform its obligations
hereunder. The
execution and delivery by the Stockholder of this Agreement 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, moratorium and similar Laws affecting
the
enforcement of creditors' rights generally and by general equitable
principles.
(c) The execution and delivery by the Stockholder of this
Agreement
and the performance of its obligations hereunder
