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EXHIBIT 99.2
EXECUTION COPY
WAIVER AND CONSENT UNDER AMENDED AND RESTATED CREDIT AGREEMENT
THIS
WAIVER AND CONSENT UNDER AMENDED AND RESTATED CREDIT AGREEMENT
(this
"Waiver") is made and entered into as of
September 16, 2005, 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").
WITNESSETH:
WHEREAS,
the Lenders, the Agent, the Co-Agent, and the Borrower Parties
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 amended as of May 11,
2005, as amended as of July 8, 2005,
and as it may be further amended, modified,
supplemented or amended and restated
from time to time, the "Credit
Agreement");
WHEREAS,
Parent, as the seller, SAH Acquisition Corp., as the buyer (the
"Buyer"), and Lifetime Brands, Inc., as the
parent of the Buyer, have entered
into an Asset Purchase Agreement dated as
of September 15, 2005 (a copy of which
is attached as Annex A hereto, the
"Tabletop Asset Sale Agreement"), pursuant to
which Parent has agreed to sell (the
"Tabletop Asset Sale") the "Acquired
Assets" (as defined in the Tabletop Asset
Sale Agreement in the form attached
attached as Annex A hereto without any
amendment or modification thereof, the
"Sold Tabletop Assets") to Buyer for a
purchase price (the "Purchase Price") of
approximately $14,200,000;
WHEREAS,
absent a waiver from the Agent, the Co-Agent and the Required
Lenders, the consummation of the Tabletop
Asset Sale would violate Section 7.9
of the Credit Agreement;
WHEREAS,
the Borrower Parties have requested, and the Agent, the
Co-Agent
and the Required Lenders have agreed,
subject to the terms and conditions
herein, to the waiver and release of
security interest set forth herein in
connection with the Tabletop Asset
Sale;
WHEREAS, Section 7.22 of the
Credit Agreement required that the Borrowers
not fail to maintain or achieve EBITDA for
the 12-month period ending July 31,
2005 of at least $7,932,000 (the "July 2005
EBITDA Threshold");
WHEREAS,
the Borrowers' actual EBITDA for the 12-month period ending
July
31, 2005 was less than the July EBITDA
Threshold (the "Section 7.22 Default");
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WHEREAS,
the Borrowers have requested, and the Agent, the Co-Agent and
the
Lenders have agreed, to waive the Section
7.22 Default subject to the terms and
conditions set forth herein;
WHEREAS,
Section 7.24 of the Credit Agreement required that the
Borrowers
not fail to maintain or achieve a
Consolidated Fixed Charge Coverage Ratio for
the 12-month period ending July 31, 2005 of
at least 0.48:1.00 (the "July 2005
CFCC Threshold");
WHEREAS,
the Borrowers' actual Consolidated Fixed Charge Coverage Ratio
for the 12-month period ending July 31,
2005 was less than the July 2005 CFCC
Threshold (the "Section 7.24 Default");
and
WHEREAS,
the Borrowers have requested, and the Agent, the Co-Agent and
the
Lenders have agreed, to waive the Section
7.24 Default subject to the terms and
conditions 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.
SECTION 2. WAIVER. Subject to the
satisfaction of the terms and conditions set
forth herein, the Agent, the Co-Agent and
the Required Lenders hereby agree to
waive (a) the Loan Parties' compliance with
Section 7.9 of the Credit Agreement
solely insofar as such Section would
prohibit the Loan Parties from consummating
the Tabletop Asset Sale on the terms set
forth in the Tabletop Asset Sale
Agreement, (b) the Section 7.22 Default
solely with respect to the 12-month
period ending July 31, 2005 and (c) the
Section 7.24 Default solely with respect
to the 12-month period ending July 31,
2005.
SECTION 3. RELEASE OF SECURITY INTEREST.
Subject to the satisfaction of the
terms and conditions set forth herein, the
Agent, the Co-Agent and the Required
Lenders hereby agree to release, without
recourse and without any representation
or warranty of any kind, the security
interest in the Sold Tabletop Assets
granted pursuant to the Security Agreement,
the Copyright Security Agreement and
the Patent and Trademark Security
Agreement, immediately following the
application of the proceeds of the Tabletop
Asset Sale in accordance with
Section 5.03 (it being understood and
agreed that this Section 3 shall in no way
effect any release of any lien or security
interest in any Collateral other than
in the Sold Tabletop Assets pursuant
hereto). The Borrower Parties hereby
release the Agent, the Co-Agent and the
Lenders from any duty, liability or
obligation (if any) under any Loan Document
in respect of the Sold Tabletop
Assets.
SECTION 4. REPRESENTATIONS AND WARRANTIES.
In order to induce the Agent, the
Co-Agent and the Lenders to enter into this
Waiver, the Borrower Parties hereby
represent and warrant that:
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4.01 NO
DEFAULT. At and as of the date of this Waiver (after giving
effect
to this Waiver), no Default or Event of
Default exists.
4.02
REPRESENTATIONS AND WARRANTIES TRUE AND CORRECT. At and as of
the
date of this Waiver and both prior to
(other than with respect to the Section
7.22 Default and the Section 7.24 Default)
and after giving effect to this
Waiver, each of the representations and
warranties contained in the Credit
Agreement and other Loan Documents is true
and correct in all material respects.
4.03
CORPORATE POWER, ETC. The Borrower Parties (a) have all
requisite
corporate power and authority to execute
and deliver this Waiver and to
consummate the transactions contemplated
hereby and (b) have taken all action,
corporate or otherwise, necessary to
authorize the execution and delivery of
this Waiver and the consummation of the
transactions contemplated hereby.
4.04 NO
CONFLICT. Neither the execution and delivery of th
