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EXHIBIT 10.7
REGISTRATION RIGHTS AGREEMENT dated as of July 15, 1998 by and among
SALTON/MAXIM HOUSEWARES, INC., a Delaware corporation (the "Company"), and each
of the parties listed on the signature pages hereto under the caption
"Purchasers" (each, a "Purchaser," and collectively, the "Purchasers").
This Agreement is made pursuant to the Stock Purchase Agreement (the
"Purchase Agreement"), dated as of July 15, 1998, by and among the Company and
the Purchasers, whereby the Company has agreed, among other things, to issue to
the Purchasers 40,000 shares of its Series A Voting Convertible Preferred Stock,
par value $0.01 per share (the "Preferred Stock"). The Preferred Stock is
convertible into shares of the Company's common stock, par value $.01 per share
(the "Common Stock"), at a conversion price of $17.00 per share, as such price
may be adjusted pursuant to the Certificate of Designation of the relative
powers, preferences and rights and qualifications of the Preferred Stock.
In order to induce the Purchasers to enter into the Purchase
Agreement, the Company has agreed to provide the registration rights set forth
in this Agreement. This
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Agreement shall become effective upon the issuance of the shares of Preferred
Stock to the Purchasers pursuant to the Purchase Agreement.
In consideration of the foregoing and the respective covenants and
agreements herein contained, the parties hereto, intending to be legally bound
hereby, agree as follows:
SECTION 1. Definitions. Capitalized terms used and not defined
herein have the meanings assigned to such terms in the Purchase Agreement. As
used herein, unless the context otherwise requires, the following terms have the
following respective meanings:
"Blue Sky Filing" is defined in Section 2.07(a) of this Agreement.
"Commission" means the Securities and Exchange Commission or any other
federal agency at the time administering the Securities Act.
"Common Stock" is defined in the introduction to this Agreement.
"Company" is defined in the introduction to this Agreement.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
or any successor federal statute, and the rules and regulations of the
Commission thereunder, all
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as the same shall be in effect at the time. Reference to a particular section
therein shall include a reference to the comparable section, if any, of any such
successor federal statute.
"Person" means a corporation, an association, a partnership, an
organization, a business, an individual, a governmental or political subdivision
thereof or a governmental agency.
"Preferred Stock" is defined in the introduction to this Agreement.
"Purchase Agreement" is defined in the introduction to this Agreement.
"Purchasers" is defined in the introduction to this Agreement.
"Registrable Securities" means any (i) shares of Preferred Stock, (ii)
shares of Common Stock issued upon the conversion of the Preferred Stock and
(iii) securities issued or issuable with respect to any shares of Preferred
Stock or Common Stock by way of stock dividend or stock split or in connection
with a combination of shares, recapitalization, merger, consolidation or other
reorganization or otherwise. As to any particular Registrable Securities, once
issued such securities shall cease to be Registrable Securities when (a) a
registration
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statement with respect to the sale of such securities shall have become
effective under the Securities Act and such securities shall have been disposed
of in accordance with such registration statement, (b) they shall have been sold
to the public pursuant to Rule 144 (or any successor provision) under the
Securities Act, (c) they shall have been otherwise transferred, new certificates
for them not bearing a legend restricting further transfer shall have been
delivered by the Company and in the opinion of counsel reasonably satisfactory
to the Company subsequent public distribution of them shall not require
registration or qualification of them under the Securities Act or any similar
state law then in force, or (d) they shall have ceased to be outstanding.
"Registration Expenses" is defined in Section 2.09(a) of this
Agreement.
"Securities Act" means the Securities Act of 1933, as amended, or any
successor federal statute, and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time. References to a
particular section therein shall include a reference to the comparable section,
if any, of any such similar federal statute.
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SECTION 2. Registration under Securities Act.
SECTION 2.01. Demand Registration. (a) Request. At any time after
the date hereof, upon the written request of the Purchasers that the Company
effect the registration under the Securities Act of all or part (subject to
Section 2.01(f)) of the Purchasers' Registrable Securities and specifying the
types of Registrable Securities to be registered and the intended method of
disposition thereof, the Company will give prompt written notice of such request
to all registered holders of Registrable Securities, and thereupon the Company
will, subject to the terms of this Agreement, use its reasonable best efforts to
effect the registration under the Securities Act of:
(i) the Registrable Securities which the Company has been
requested to register by the Purchasers, and
(ii) all other Registrable Securities which the Company has
been requested to register by written request of the holders
thereof given to the Company within 30 days after the giving of
the aforesaid written notice by the Company (specifying the
intended method of disposition of such Registrable Securities),
all to the extent
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requisite to permit the intended disposition of the Registrable
Securities to be so registered.
(b) Registration of Other Securities. Whenever the Company shall
effect a registration pursuant to this Section 2.01 in connection with
an underwritten offering by one or more holders of Registrable
Securities, no securities other than Registrable Securities shall be
included among the securities covered by such registration unless (i)
the managing underwriter of such offering shall have advised the
Purchasers in writing that the inclusion of such other securities would
not adversely affect such offering or (ii) the Purchasers shall have
consented in writing to the inclusion of such other securities.
(c) Registration Statement Form. Registrations under this Section
2.01 shall be on such appropriate registration form of the Commission
(i) as shall be selected by the Company and (ii) as shall permit the
disposition of such Registrable Securities in accordance with the
intended method or methods of disposition specified in their request
for such registration; provided, however, that if at the time of such
registration the Company satisfies the eligibility requirements for use
of a registration statement on Form S-3 under the Securities Act, the
Purchasers may request a registration on Form S-3 for an offering to
be
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made on a continuous basis pursuant to Rule 415 under the Securities
Act (a "Shelf Registration") and the Company shall use all reasonable
efforts to cause the registration to be made on such form. The Company
agrees to include in any such registration statement all information
which, in the opinion of counsel to the Purchasers or counsel to the
Company, is required to be included.
(d) Effective Registration Statement. A registration requested
pursuant to this Section 2.01 shall not be deemed to have been effected
and will not be considered one of the three demand registrations which
may be requested pursuant to this Agreement (i) if the registration
statement with respect thereto does not become effective, (ii) if after
it has become effective, it does not remain effective for a period of
at least 90 days or, in the case of a Shelf Registration, one year (or
in each case such shorter period during which all the Registrable
Securities registered thereunder are sold or disposed of) or such
registration is interfered with by any stop order, injunction or other
order or requirement of the Commission or other governmental agency or
court for any reason and has not thereafter become effective, or (iii)
if the conditions to closing specified in the underwriting agreement
entered into in connection with such registration are not satisfied
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or waived other than by reason of the failure or refusal of a holder of
Registrable Securities to satisfy or perform a condition to such
closing or a default by an underwriter. If a demand is made pursuant to
Section 2.01 and the Company files a registration statement and causes
(or is in the process of causing) such registration statement to become
effective and the holders requesting registration decide not to proceed
with such registration for reasons other than a breach by the Company
of its obligations hereunder or the Company's inability or failure to
obtain the effectiveness of such registration statement, such request
shall nevertheless count as one demand under Section 2.01.
(e) Priority in Demand Registrations. If a demand registration
pursuant to this Section 2.01 involves an underwritten offering, and
the managing underwriter shall advise the Company in writing (with a
copy sent to each holder of the Registrable Securities requesting
registration) that the number of securities requested to be included in
such registration exceeds the number which can be sold in such offering
within a price range acceptable to the Purchasers or such other person
entitled to make a demand registration pursuant to Section 8 hereof,
such registration will include only that number of Registrable
Securities which the Company is so advised can be sold in
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such offering, drawn pro rata from the holders of the Registrable
Securities requesting such registration on the basis of the percentage
of Registrable Securities held by the holders of Registrable Securities
which have requested that such securities be included. In connection
with any such registration, no securities other than Registrable
Securities shall be covered by such registration.
(f) Limitations on Registration; Expenses. The Company will not
be required to effect, in the aggregate, more than three demand
registrations pursuant to this Section 2.01 (or any other provision of
this Agreement), of which the Company shall pay all Registration
Expenses in connection with all three demand registrations. The
Company shall not be required to effectuate any registration pursuant
to this Section 2.01 within less than six months after the end of the
effectiveness period of any other registration pursuant to Section
2.01. Notwithstanding the foregoing, no demand may be made in respect
of a number of Registrable Securities by all holders demanding
registration which is less than the lesser of (x) 25% of the total
Registrable Securities originally issued (or the equivalent thereof in
the case of securities issued upon the conversion thereof) or (y) the
number of Registrable Securities having
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a market value (as reasonably estimated in good faith by the holders
requesting registration) of at least $10,000,000.
SECTION 2.02. Incidental Registration.
(a) Right to Include the Registrable Securities. If the Company at any
time proposes to register any of its securities under the Securities Act by
registration on Forms X-x, X-0 or S-3 or any successor or similar form(s),
whether or not for sale for its own account, it will each such time give
prompt written notice to the Purchasers and all other holders of
Registrable Securities of its intention to do so and of such holders'
rights under this Section 2.02. Upon the written request of any such
holder made within 30 days after the receipt of any such notice (15 days if
the Company gives telephonic notice to all holders of Registrable
Securities, with written confirmation to follow promptly thereafter,
stating that (i) such registration will be on Form S-3 and (ii) such
shorter period of time is required because of a planned filing date) (which
request shall specify the Registrable Securities to be disposed of by such
holder), the Company will, subject to the next sentence, use its reasonable
best efforts to effect the registration under the Securities Act of all
Registrable Securities which the Company has been so requested to register
by the holders thereof, to the extent requisite to permit the disposition
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of such Registrable Securities to be so registered. If the Company
thereafter determines for any reason not to register or to delay
registration of such securities, the Company may, at its election, give
written notice of such determination to each holder of Registrable
Securities and, thereupon, (i) in the case of a determination not to
register, shall be relieved of the obligation to register such Registrable
Securities in connection with such registration (but not from any
obligation of the Company to pay the Registration Expenses in connection
therewith), without prejudice, however, to the rights (if any) of the
Purchasers or an assignee to request that such registration be effected as
a registration under Section 2.01, and (ii) in the case of a determination
to delay registration, shall be permitted to delay registering any
Registrable Securities, for the same period as the delay in registration of
such other securities. All obligations of the Company with respect to any
registration described in this Section 2.02(a) shall be subject to the
rights of the Company set forth in the immediately preceding sentence. No
registration effected under this Section 2.02 shall relieve the Company of
its obligation to effect any registration upon request under Section 2.01.
The Company will pay all Registration Expenses in connection with
registration of
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Registrable Securities requested pursuant to this Section 2.02. If such
offering is to be underwritten, the holders seeking to sell such
Registrable Securities agree to join in such underwritten offering.
(b) Priority in Incidental Registrations. In a registration pursuant
to this Section 2.02 involving an underwritten offering of the securities
so being registered, whether or not for sale for the account of the Company
by or through one or more underwriters of recognized standing, if the
managing underwriter of such underwritten offering shall inform the Company
and the holders of Registrable Securities requesting registration in such
offering by letter of its belief that the number or type of securities to
be included in such registration would interfere with the successful
marketing of the securities being distributed by such underwriters, then
the Company will be required to include in such registration only that
number and type of Registrable Securities which it is so advised can be
sold in such offering, drawn pro rata from the holders of Registrable
Securities requesting such registration and the holders of any other
securities to be registered (whether or not pursuant to the exercise of a
demand registration right by such holders) on the basis of the number of
securities the registration of which shall have been requested by such
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holders (it being understood that this provision shall not limit the number
of securities that the Company shall be entitled to register for sale for
its own account).
SECTION 2.03. Registration Procedures. In connection with the
Company's obligations pursuant to Sections 2.01 and 2.02 hereof, the
Company will use its reasonable best efforts to effect such registrations
to permit the sale of Registrable Securities in accordance with the
intended method or methods of disposition thereof, and pursuant thereto the
Company will as expeditiously as possible:
(a) prepare and, as soon as reasonably practicable and in any
event within 30 days after the end of the period within which
requests for registration may be given to the Company, file with the
Commission (but not earlier than 90 days after the end of the
Company's fiscal year or 45 days after the end of the last fiscal
quarter), a registration statement or registration statements on the
appropriate form under the Securities Act, which form shall be
available for the sale of the Registrable Securities by the holders
thereof in accordance with the intended method or methods of
distribution thereof, and use its reasonable best
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efforts to cause such registration statement to become effective and
to remain continuously effective for a period of 90 days following
the date on which such registration statement is declared effective
(or, in the case of a Shelf Registration, for a period of one year
following such date); provided that the Company shall have no
obligation to maintain the effectiveness of such registration
statement after the sale of all Registrable Securities registered
thereunder or for a period longer than that specified in this
paragraph (a);
(b) prepare and file with the Commission such amendments and
post-effective amendments to the registration statement as may be
necessary to keep such registration statement effective for the
applicable period; cause the related prospectus to be supplemented by
any required prospectus supplement, and as so supplemented to be
filed pursuant to Rule 424 under the Securities Act; and comply with
the provisions of the Securities Act with respect to the disposition
of all securities covered by such registration statement during the
applicable period in accordance with the intended
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methods of disposition by the sellers thereof set forth in such
registration statement or supplement to such prospectus;
(c) notify the selling holders of Registrable Securities, and the
managing underwriters, if any, promptly, and (if requested by any
such Person) confirm such advice in writing, (i) when a prospectus or
any prospectus supplement or post-effective amendment has been filed,
and, with respect to a registration statement or any post-effective
amendment, when the same has become effective, (ii) of any request by
the Commission for amendments or supplements to a registration
statement or related prospectus or for additional information, (iii)
of the issuance by the Commission of any stop order suspending the
effectiveness of a registration statement or the initiation of any
proceedings for that purpose, (iv) if at any time the representations
and warranties of the Company made as contemplated by Section 2.04(a)
below cease to be true and correct in any material respect, (v) of
the receipt by the Company of any notification with respect to the
suspension of the qualification of any of the
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Registrable Securities for sale in any jurisdiction or the initiation
or threatening of any proceeding for such purpose, (vi) of the
happening of any event which requires the making of any changes in a
registration statement or related prospectus so that such documents
will not contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to
make the statements therein not misleading and (vii) if the Company
reasonably determines that a post-effective amendment to a
registration statement would be appropriate;
(d) use its reasonable best efforts to prevent the issuance of
any order suspending the effectiveness of a Registration Statement or
of any order preventing or suspending the use of a Prospectus or
suspending the qualification (or exemption from qualification) of any
Registrable Securities for sale in any jurisdiction and, if any such
order is issued, to obtain the withdrawal of any such order at the
earliest possible moment.
(e) if requested by the managing underwriters or any holder of
Registrable
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Securities being sold in connection with an underwritten offering,
immediately incorporate in a prospectus supplement or post-effective
amendment such information as the managing underwriters and such
holder agree should be included therein relating to the sale and
distribution of Registrable Securities, including, without
limitation, information with respect to the number of Registrable
Securities being sold to such underwriters, the purchase price being
paid therefor by such underwriters and with respect to any other
terms of the underwritten (or best efforts underwritten) offering of
the Registrable Securities to be sold in such offering; make all
required filings of such prospectus supplement or post-effective
amendment as soon as notified of the matters to be incorporated in
such prospectus supplement or post-effective amendment; and
supplement or make amendments to any registration statement if
requested by any holder of Registrable Securities covered by such
registration statement or any underwriter of such Registrable
Securities;
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(f) furnish to each selling holder of Registrable Securities and
each managing underwriter, without charge, at least one signed copy
of the registration statement or statements and any post-effective
amendment thereto, including financial statements and schedules, all
documents incorporated therein by reference and all exhibits
(including those incorporated by reference);
(g) deliver to each holder of Registrable Securities and the
underwriters, if any, without charge, as many copies of the
prospectus or prospectuses (including each preliminary Prospectus)
and any amendment or supplement thereto as such Persons may
reasonably request; the Company consents to the use of such
prospectus or any amendment or supplement thereto by each of the
selling holders of Registrable Securities and the underwriters, if
any, in connection with the offering and sale of the Registrable
Securities covered by such Prospectus or any amendment or supplement
thereto;
(h) prior to any public offering of Registrable Securities, use
its reasonable best
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efforts to register or qualify or cooperate with the selling holders
of Registrable Securities, the underwriters, if any, and their
respective counsel in connection with the registration or
qualification of such Registrable Securities for offer and sale under
the securities or Blue Sky laws of such jurisdictions as any selling
holder or underwriter reasonably requests in writing; keep each such
registration or qualification effective during the period such
registration statement is required to be kept effective and do any
and all other acts or things reasonably necessary or advisable to
enable the disposition in such jurisdictions of the Registrable
Securities covered by the applicable registration statement; provided
that the Company will not be required to qualify generally to do
business in any jurisdiction where it is not then so qualified or to
take any action which would subject it to general service of process
in any such jurisdiction where it is not then so subject;
(i) cooperate with the selling holders of Registrable Securities
and the managing underwriters, if any, to facilitate the timely
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preparation and delivery of certificates representing Registrable
Securities to be sold and not bearing any restrictive legends unless
required by applicable law; and enable such Registrable Securities to
be in such denominations and registered in such names as the managing
underwriters may request at least two business days prior to any sale
of Registrable Securities to the underwriters;
(j) use its reasonable best efforts to cause the Registrable
Securities covered by the applicable registration statement to be
registered with or approved by such other governmental agencies or
authorities as may be necessary to enable the seller or sellers
thereof or the underwriters, if any, to consummate the disposition of
such Registrable Securities;
(k) upon the occurrence of any event contemplated by paragraph
(c)(vi) above, prepare a supplement or post-effective amendment to
the applicable registration statement or related prospectus or any
document incorporated therein by reference or file any other required
document so that, as thereafter delivered to the purchasers of
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the Registrable Securities being sold thereunder, such prospectus
will not contain any untrue statement of a material fact or omit to
state any material fact necessary to make the statements therein not
misleading;
(l) take all such actions in connection therewith in order to
expedite or facilitate the disposition of such Registrable
Securities;
(m) otherwise use its reasonable best efforts to comply with all
applicable rules and regulations of the Commission and make generally
available to its security holders earnings statements satisfying the
provisions of Section 11(a) of the Securities Act and Rule 158
thereunder;
(n) permit any holder of Registrable Securities, which holder, in
the judgment of its counsel, might be deemed to be a "control person"
of the Company (within the meaning of Section 15 of the Securities
Act and Section 20 of the Exchange Act), to participate in the
preparation of such registration statement and include therein
material, furnished to the Company in writing which, in the
reasonable judgment of such holder
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and its counsel, is required to be included therein;
(o) use its reasonable best efforts to cause all such Registrable
Securities to be listed on each securities exchange, if any, on which
Registrable Securities of the type then being registered are listed;
and
(p) provide and cause to be maintained a transfer agent and
registrar (if applicable) for all Registrable Securities covered by
such registration statement from and after a date not later than the
effective date of such registration statement.
The Company may require each holder of Registrable Securities as to
which any registration is being effected to furnish to the Company such
information regarding such holder and the distribution of such
Registrable Securities as the Company may from time to time reasonably
request in writing in order to comply with the Securities Act. Each
holder of Registrable Securities as to which any registration is being
effected agrees to notify the Company, as promptly as practicable, of any
inaccuracy or change in information previously furnished by such holder
to the Company or of the happening of any event in either case as a
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result of which any prospectus relating to such registration contains an
untrue statement of a material fact regarding such holder or the
distribution of such Registrable Securities or omits to state any
material fact regarding such holder or the distribution of such
Registrable Securities required to be stated therein or necessary to make
the statement therein not misleading in light of the circumstances then
existing, and to promptly furnish to the Company any additional
information required to correct and update any previously furnished
information or required such that such prospectus shall not contain, with
respect to such holder or the distribution of such Registrable
Securities, an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading in light of the circumstances then
existing.
Each holder of Registrable Securities agrees that, upon receipt of
any notice from the Company of the happening of any event of the kind
described in Section 2.03(c)(ii), (iii), (v), (vi) or (vii) hereof, such
holder will forthwith discontinue disposition of such Registrable
Securities covered by such registration statement or prospectus until
such holder's receipt of the copies of the supplemented or amended
prospectus relating to such registration statement
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or prospectus, or until it is advised in writing by the Company that the
use of the applicable prospectus may be resumed, and has received copies
of any additional or supplemental filings which are incorporated by
reference in such Prospectus, and, if so directed by the Company, such
holder will deliver to the Company (at the Company's expense) all copies,
other than permanent file copies then in such holder's possession, of the
prospectus covering the Registrable Securities current at the time of
receipt of such notice.
SECTION 2.04. Underwritten Offerings.
(a) Demand Underwritten Offerings. In any offering by holders of
Registrable Securities pursuant to a registration requested under Section
2.01, sales shall, at the request of the Purchasers, be made through a
nationally recognized investment banking firm (or syndicate managed by
such a firm) selected by the holders of at least a majority in aggregate
principal amount of the Registrable Securities to be included in such
offering and approved by the Company (which approval shall not be
unreasonably withheld) and the Company shall enter into an underwriting
agreement which shall be reasonably satisfactory in form and substance to
each holder and the underwriters and which shall contain representations,
warranties and agreements (including
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indemnification agreements to the effect and to the extent provided in
Section 2.07(a)) as are customarily included by an issuer in underwriting
agreements with respect to primary distributions. The holders of
Registrable Securities to be distributed by such underwriters shall be
parties to such underwriting agreement and may, at their option, require
that any or all of the representations and warranties by, and the other
agreements on the part of, the Company to and for the benefit of such
underwriters shall also be made to and for the benefit of such holders of
Registrable Securities and that any or all of the conditions precedent to
the obligations of such underwriters under such underwriting agreement be
conditions precedent to the obligations of such holders of Registrable
Securities. Any such holder of Registrable Securities shall not be
required to make any representations or warranties to or agreements with
the Company or the underwriters other than representations, warranties or
agreements regarding such holder, such holder s Registrable Securities
and such holder's intended method of distribution and any other
representation required by law.
(b) Incidental Underwritten Offerings. If the Company at any time
proposes to register any of its securities under the Securities Act as
contemplated by
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Section 2.02 and such securities are to be distributed by or through one
or more underwriters, the Company will, if requested by any holder of
Registrable Securities as provided in Section 2.02 and subject to the
provisions of Section 2.02(b), use its reasonable best efforts to arrange
for such underwriters to include all the Registrable Securities to be
offered and sold by such holder among the securities to be distributed by
such underwriters. The holders of Registrable Securities to be
distributed by such underwriters shall be parties to the underwriting
agreement between the Company and such underwriters. Any such holder of
Registrable Securities shall not be required to make any representations
or warranties to or agreements with the Company or the underwriters other
than representations, warranties or agreements regarding such holder,
such holder's Registrable Securities and such holder's intended method of
distribution and any other representation required by law.
SECTION 2.05. Preparation; Reasonable Investigation. In connection
with the preparation and filing of each registration statement under the
Securities Act pursuant to this Agreement, the Company will give the
holders of Registrable Securities to be registered under such
registration statement, their underwriters, and their respective counsel
and accountants the opportunity to
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participate in the preparation of such registration statement, each
prospectus included therein or filed with the Commission, and each
amendment thereof or supplement thereto, and will give each of them such
access to its books and records and such opportunities to discuss the
business of the Company with its officers and the independent public
accountants who have certified its financial statements as shall be
necessary, in the opinion of such holders and such underwriters'
respective counsel, to conduct a reasonable investigation within the
meaning of the Securities Act.
SECTION 2.06. Limitations, Conditions and Qualifications to
Obligations Under Registration Covenants. The obligations of the Company
to use its reasonable efforts to cause the Registrable Securities to be
registered under the Securities Act are subject to each of the following
limitations, conditions and qualifications:
(a) The Company shall not be obligated to file or keep effective any
registration statement pursuant to Section 2.01 hereof at any time if the
Company would be required to include financial statements audited as of
any date other than the end of its fiscal year.
(b) The Company shall be entitled to postpone for a reasonable period
of time (but not exceeding 30 days and not more than once in any
six-month period) the filing or
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effectiveness of any registration statement otherwise required to be
prepared and filed by it pursuant to Section 2.01 if the Company
determines, in its reasonable judgment, that (i) the Company is in
possession of material information that has not been disclosed to the
public and the Company reasonably determines that it would be
significantly detrimental to the Company and its stockholders to disclose
such information at such time in a registration statement or (ii) such
registration and offering would significantly interfere with any
financing, acquisition, corporate reorganization or other material
transaction involving the Company or any of its Affiliates (as defined in
the rules and regulations adopted under the Exchange Act) and, in any
such case, the Company promptly gives the requesting holders of
Registrable Securities written notice of such determination, containing a
general statement of the reasons for such postponement and an
approximation of the anticipated delay. If the Company shall so postpone
the filing of a registration statement, the requesting holders of
Registrable Securities shall have the right to withdraw the request for
registration by giving written notice to the Company within 30 days after
receipt of the notice of postponement and, in the event of such
withdrawal, such request shall not be counted for purposes
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of the requests for registration to which the Purchasers and their
assignees are entitled pursuant to Section 2.01 hereof.
(c) No holder of Registrable Securities may participate in any
underwritten offering hereunder unless such holder (i) agrees to sell
such holder's Registrable Securities on the basis provided in any
underwriting arrangements approved by the persons entitled hereunder to
approve such arrangements 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.
SECTION 2.07. Indemnification. (a) Indemnification by the Company.
In the event of any registration of any Registrable Securities under the
Securities Act, the Company will, and hereby does, indemnify and hold
harmless, to the fullest extent permitted by law, the holder of any
Registrable Securities whose Registrable Securities are covered by such
registration statement, its directors and officers, each other Person who
participates as an underwriter in the offering or sale of such securities
and each other Person, if any, who controls such seller or any such
underwriter within the meaning of the Securities Act, against any and all
losses, claims, damages, liabilities and
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expenses, joint or several, (or actions or proceedings, whether commenced
or threatened, in respect thereof) to which they or any of them may
become subject under the Securities Act or any other statute or common
law, including any amount paid in settlement of any litigation, commenced
or threatened, and to reimburse them for any reasonable legal or other
expenses incurred by them in connection with investigating any claims and
defending any actions, insofar as any such losses, claims, damages,
liabilities, expenses or actions arise out of or are based upon (i) any
untrue statement or alleged untrue statement of a material fact contained
in the registration statement or prospectus relating to the sale of such
securities or any post-effective amendment thereto or in any filing made
in connection with the qualification of the offering under Blue Sky or
other securities laws of jurisdictions in which the Registrable
Securities are offered ("Blue Sky Filing"), or the omission or alleged
omission to state therein a material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading or (ii) any
untrue statement or alleged untrue statement of a material fact contained
in any preliminary prospectus, if used prior to the effective date of
such registration statement (unless
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such statement is corrected in the final prospectus and the Company has
previously furnished copies thereof to any holder of Registrable
Securities seeking such indemnification and the underwriters), or
contained in the final prospectus (as amended or supplemented if the
Company shall have filed with the Commission any amendment thereof or
supplement thereto) if used within the period during which the Company is
required to keep the registration statement to which such prospectus
relates current, or the omission or alleged omission to state therein (if
so used) a material fact necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading; provided, however, that the indemnification agreement
contained herein shall not (i) apply to such losses, claims, damages,
liabilities, expenses or actions arising out of, or based upon, any such
untrue statement or alleged untrue statement, or any such omission or
alleged omission, if such statement or omission was made in reliance upon
and in conformity with written information furnished to the Company by
such seller or such underwriter specifically stating that it is for use
in connection with preparation of the registration statement, any
preliminary prospectus or final prospectus contained in the registration
statement, any such amendment or supplement thereto or any
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Blue Sky Filing or (ii) inure to the benefit of any underwriter or any
person controlling such underwriter, to the extent that any such loss,
claim, damage, liability (or action or proceeding in respect thereof) or
expense arises out of such person's failure to send or give a copy of the
final prospectus, as the same may be then supplemented or amended, to the
person asserting an untrue statement or alleged untrue statement or
omission or alleged omission at or prior to the written confirmation of
the sale of Registrable Securities to such person if such statement or
omission was corrected in such final prospectus.
Such indemnity shall remain in full force and effect regardless of
any investigation made by or on behalf of such seller or any such
director, officer or controlling person and shall survive the transfer of
such securities by such seller.
(b) Indemnification by the Sellers. The Company may require, as a
condition to including any Registrable Securities in any registration
statement filed pursuant to Section 2.01 or 2.02, that the Company shall
have received an undertaking satisfactory to it from the prospective
seller of such securities, to indemnify and hold harmless (in the same
manner and to the same extent as set forth in subdivision (a) of this
Section 2.07(a)) the Company, each
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director of the Company, each officer of the Company and each other
person, if any, who controls the Company within the meaning of the
Securities Act, with respect to any untrue statement or alleged untrue
statement in, or omission or alleged omission from, such registration
statement, any preliminary prospectus or final prospectus contained
therein, or any amendment or supplement thereto, if such statement or
omission was made in reliance upon and in conformity with written
information furnished to the Company through an instrument duly executed
by such seller specifically stating that it is for use in such
registration statement, preliminary prospectus, final prospectus,
amendment or supplement. Such indemnity shall remain in full force and
effect, regardless of any investigation made by or on behalf of the
Company or any such director, officer or controlling person and shall
survive the transfer of such securities by such seller. In no event
shall any indemnity or contribution paid by any seller to the Company
pursuant to this Section 2.07, or otherwise, exceed the proceeds received
by such seller in such offering. In the case of an underwritten offering
of Registrable Securities, each holder of Registrable Securities shall
agree to indemnify such underwriters, their officers and directors, if
any, and each person, if any, who controls such underwriters within the
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meaning of Section 15 of the Securities Act and Section 20 of the
Exchange Act, with respect to information furnished by them for use in
the registration statement or prospectus to the extent customary in the
circumstances for a selling stockholder in an underwritten public
offering.
(c) Notices of Claims, etc. Promptly after receipt by an indemnified
party of notice of the commencement of any action or proceeding involving
a claim referred to in the preceding subdivisions of this Section
2.07(a), such indemnified party will, if a claim in respect thereof is to
be made against an indemnifying party, give written notice to the latter
within five days of the commencement of such action; provided that the
failure of any indemnified party to give notice as provided herein shall
not relieve the indemnifying party of its obligations under the preceding
subdivisions of this Section 2.07(a), except to the extent that the
indemnifying party is actually prejudiced by such failure to give notice.
In case any such action is brought against an indemnified party, the
indemnifying party shall be entitled to participate in and, unless in
such indemnified party's reasonable good faith judgment a conflict of
interest between such indemnified and indemnifying parties may exist in
respect of such claim, to assume the defense thereof, jointly with any
other
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indemnifying party similarly notified to the extent that it may wish,
with counsel reasonably satisfactory to such indemnified party, and after
notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof, the indemnifying party shall
not be liable to such indemnified party for any legal or other expenses
subsequently incurred by the latter in connection with the defense
thereof other than reasonable costs of investigation. In the event that
the indemnifying party advises an indemnified party that it will contest
a claim for indemnification hereunder, or fails, within thirty (30) days
of receipt of any indemnification notice to notify, in writing, such
person of its election to defend, settle or compromise, at its sole cost
and expense, any action, proceeding or claim (or discontinues its defense
at any time after it commences such defense), then the indemnified party
may, at its option, defend, settle or otherwise compromise or pay such
action or claim. In any event, unless and until the indemnifying party
elects in writing to assume and does so assume the defense of any such
claim, proceeding or action, the indemnified party's reasonable
out-of-pocket costs and expenses arising out of the defense, settlement
or compromise of any such action, claim or proceeding shall be losses
subject to indemnification hereunder. The
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indemnified party shall cooperate fully with the indemnifying party in
connection with any negotiation or defense of any such action or claim by
the indemnifying party and shall furnish to the indemnifying party all
information reasonably available to the indemnified party which relates
to such action or claim. The indemnifying party shall keep the
indemnified party fully appraised at all times as to the status of the
defense or any settlement negotiations with respect thereto. If the
indemnifying party elects to defend any such action or claim, then the
indemnified party shall be entitled to participate in such defense with
counsel of its choice at its sole cost and expense. If the indemnifying
party does not assume such defense, the indemnified party shall keep the
indemnifying party appraised at all times as to the status of the
defense; provided, however, that the failure to keep the indemnifying
party so informed shall not affect the obligations of the indemnifying
party hereunder. No indemnifying party shall be liable for any
settlement of any action, claim or proceeding effected without its
written consent; provided, however, that the indemnifying party shall not
unreasonably withhold, delay or condition its consent. No indemnifying
party shall, without the consent of the indemnified party (which consent
shall not be
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unreasonably withheld, delayed or conditioned), consent to entry of any
judgment or enter into any settlement which does not include as an
unconditional term thereof the giving by the claimant or plaintiff to
such indemnified party of a release from all liability in respect to such
claim or litigation.
(d) Contribution. (i) If the indemnification from the indemnifying
party as provided in this Section 2.07 is unavailable or is otherwise
insufficient to hold harmless an indemnified party in respect of any
losses, claims, damages, liabilities or expenses referred to therein,
then the indemnifying party shall, to the fullest extent permitted by
law, contribute to the amount paid or payable by such indemnified party
as a result of such losses, claims, damages, liabilities or expenses in
such proportion as is appropriate to reflect the relative fault of the
indemnifying party and indemnified parties in connection with the actions
which resulted in such losses, claims, damages, liabilities or expenses,
as well as any other relevant equitable considerations. The relative
fault of such indemnifying party shall be determined by reference to,
among other things, whether any action in question, including any untrue
(or alleged untrue) statement of a material fact or omission (or alleged
omission) to state a
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material fact, has been made, or related to information supplied by such
indemnifying party, and the parties relative intent, knowledge, access
to information and opportunity to correct or prevent such action. The
amount paid or payable by a party as a result of the losses, claims,
damages, liabilities and expenses referred to above shall be deemed to
include, subject to the limitations set forth in Section 2.07(c), any
legal or other fees or expenses reasonably incurred by such party in
connection with any investigation or proceeding.
(ii) The parties hereto agree that it would not be just and equitable
if contribution pursuant to this Section 2.07 were determined by pro rata
allocation or by any other method of allocation which does not take
account of the equitable considerations referred to in the immediately
preceding paragraph. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be
entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. If however, indemnification is available
under this Section 2.07, the indemnifying parties shall indemnify each
indemnified party to the fullest extent provided in Section 2.07(a) and
(b) hereof without regard to the relative fault of said indemnifying
party or indemnified
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party or any other equitable consideration provided for in this Section
2.07(d).
(e) Indemnification Payments. The indemnification and contribution
required by this Section 2.07(a) shall be made by periodic payments of
the amount thereof during the course of the investigation or defense, as
and when bills are received or expense, loss, damage or liability is
incurred.
(f) Other Rights; Liabilities. The indemnity agreements contained
herein shall be in addition to (i) any cause of action or similar right
of the indemnified party against the indemnifying party or others, and
(ii) any liabilities the indemnifying party may be subject to pursuant to
the law.
SECTION 2.08. Adjustments Affecting Registrable Securities.
(a) During any period commencing on either (i) the date a request for
a demand registration has been made pursuant to Section 2.01(a) hereof or
(ii) the date on which any holder of Registrable Securities makes written
request in accordance with the terms of Section 2.02(a) hereof to have
its Registrable Shares registered, and in either event, terminating on
the date which is the earlier of (i) 180 days after the date on which the
registration statement
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registering such Registrable Securities becomes effective and (ii) the
date on which all Registrable Securities registered under such
registration statement are sold, transferred or disposed of, the Company
will not, without the consent of the Purchasers, effect, permit to occur
or announce any future intent to effect or permit to occur, any
combination or subdivision of shares which would materially adversely
affect the ability of the holders of Registrable Securities to include
Registrable Securities in any registration of securities contemplated by
this Section 2 or the marketability of Registrable Securities under any
such registration.
SECTION 2.09. Registration Expenses. (a) Except as provided in
Section 2.09(b), all expenses incident to the Company's performance of or
compliance with this Agreement, including without limitation (i) any
allocation of salaries and expenses of Company personnel or other general
overhead expenses of the Company, or other expenses for the preparation
of historical and pro forma financial statements or other data normally
prepared by the Company in the ordinary course of business or customarily
prepared by the issuer in a public offering; (ii) all registration,
application, filing, listing, transfer and registrar fees; (iii) all
National Association of Securities Dealers fees
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and fees and expenses of registration or qualification of Registrable
Securities under state securities or blue sky laws; (iv) all word
processing, duplicating and printing expenses, messenger and delivery
expenses; and (v) the fees and disbursements of counsel for the Company
and the reasonable fees and disbursements of one counsel retained by the
holder or holders a majority of the Registrable Securities being
registered and the fees and disbursements of the Company's independent
public accountants, including the expenses of customary "cold comfort"
letters required by or incident to such performance and compliance; and
(vi) subject to the proviso hereinbelow, any fees and disbursements of
underwriters and broker-dealers customarily paid by issuers or sellers of
securities (all such expenses being herein called "Registration
Expenses") will be borne or caused to be borne by the Company whether or
not any of the Registration Statements become effective provided,
however, that in all cases in which the Company is required to pay
Registration Expenses hereunder, Registration Expenses shall exclude, and
the sellers of the Registrable Securities being registered shall pay, all
underwriting discounts and commissions and transfer taxes in respect of
the Registrable Securities under state securities or blue sky laws.
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SECTION 2.10. Other Sales. (a) The Company hereby agrees not to
effect, any public sale or distribution of any securities of the same
class as (or otherwise similar to) the Registrable Securities, or any
securities which, with notice, lapse of time and/or payment of monies,
are exchangeable or exercisable for or convertible into any such
securities, or to enter into any agreement to make, file a registration
statement for, or announce any such public sale or distribution of, any
such securities, excluding the grant and exercise of employee stock
options and the issuance of shares in connection with acquisitions as
long as all executive officers, directors and other affiliates of the
entity being acquired have agreed in writing to the restrictions set
forth in this Section 2.10(a), during the 15-day period prior to, and
during the 90-day period commencing on, the effective date of a
registration statement filed with the Commission in connection with an
underwritten offering effected pursuant to Section 2.1 of this Agreement
without the prior written consent of the managing underwriters of such
offering.
(b) The Purchasers (and their assigns) agree, during the 10-day
period prior to, and during the 90-day period commencing on, the
effective date of a registration statement filed with the Commission
(other than on Form S-8)
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in connection with an underwritten offering of securities of the same
class as the then outstanding Registrable Securities (or any securities
issuable upon conversion or exchange thereof), not to make any sales of
Registrable Securities (or such other securities) pursuant to Rule 144,
provided that they were given the opportunity, if required by (and
subject to) Section 2.02 hereof, to include in such registration
statement all such Registrable Securities as they may have requested.
SECTION 3. Rule 144. The Company shall take all actions reasonably
necessary to enable holders of Registrable Securities to sell such
securities without registration under the Securities Act within the
limitation of the exemptions provided by (a) Rule 144 under the
Securities Act, as such Rule may be amended from time to time, or (b) any
similar rule or regulation hereafter adopted by the Commission including,
without limiting the generality of the foregoing, filing on a timely
basis all reports required to be filed by the Exchange Act. Upon the
request of any holder of Registrable Securities, the Company will deliver
to such holder a written statement as to whether it has complied with
such requirements. Notwithstanding anything herein to the contrary, no
holder may exercise any right to require the registration of a
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number of Registrable Securities which he is at such time able to sell
pursuant to Rule 144 (without being limited by any volume restriction
therein with respect to Registrable Securities desired to be sold
immediately by such holder).
SECTION 4. Entire Agreement; Amendments and Waivers. This
Agreement, together with the Purchase Agreement and the agreements,
schedules, exhibits and annexes referred to therein, and the Certificate
of Designation, represents the entire agreement and understanding among
the parties hereto with respect to the subject matter hereof and
supersedes any and all prior oral and written agreements, arrangements
and understandings among the parties hereto with respect to such subject
matters. This Agreement may be amended, waived or modified only by a
written instrument signed by the Company and the holder or holders of a
majority of the shares of Registrable Securities.
SECTION 5. Other Registration Rights. The Company hereby covenants
and agrees not to hereafter enter into any agreement, arrangement or
understanding with respect to its securities which conflicts with or is
inconsistent with the rights granted to the holders of Registrable
Securities under this Agreement.
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SECTION 6. Nominees for Beneficial Owners. In the event that any
Registrable Securities are held by a nominee for the beneficial owner
thereof, the beneficial owner thereof may, at its election, be treated as
the holder of such securities for purposes of any request or other action
by any holder or holders of securities pursuant to this Agreement or any
determination of any number or percentage of shares of securities held by
any holder or holders of securities contemplated by this Agreement. If
the beneficial owner of any Registrable Securities so elects, the Company
may require assurances reasonably satisfactory to it of such owner's
beneficial ownership of such Registrable Securities.
SECTION 7. Notices. Any notice, demand, request, waiver, or other
communication under this Agreement shall be in writing and shall be
deemed to have been duly given (i) on the date of service if personally
served or transmitted via telecopy, (ii) on the next business day after
delivery to an overnight carrier or (iii) on the third day after mailing
if mailed to the party to whom notice is to be given, by first class
mail, registered, return receipt requested, postage prepaid and (a) if
addressed to the Purchasers, addressed to such party in the manner set
forth in the Purchase Agreement, or at such other address as such
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party shall have furnished to the Company in writing, or (b) if addressed
to any other holder of Registrable Securities, at the address that such
holder shall have furnished to the Company in writing, or, until any such
other holder so furnishes to the Company an address, then to and at the
address of the last holder of such securities who has furnished an
address to the Company, or (c) if addressed to the Company, at 000
Xxxxxxxx Xxxxxx Xxxxx, Xxxxx Xxxxxxxx, Xxxxxxxx, 00000 attention of the
General Counsel or at such other address, or to the attention of such
other officer, as the Company shall have furnished to each holder of
Registrable Securities at the time outstanding.
SECTION 8. Assignment. This Agreement shall be binding upon and
inure to the benefit of and be enforceable by the parties hereto and
their respective successors by merger, consolidation or amalgamation and
permitted assigns. The Company may not assign any of its rights and
obligations hereunder without the consent of the holders of all the
Registrable Securities then outstanding. Any Purchaser may assign its
rights hereunder without the consent of the Company to any Purchaser
Affiliate (as defined in the Purchase Agreement) or successor or to any
Person who purchases or otherwise duly receives title to 10% or more of
the Registrable Securities then outstanding; provided that
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such assignee agrees in writing to be bound by the terms of this
Agreement. This Agreement shall not inure to the benefit of any person
who is not a party hereto or a successor to or permitted assignee of a
party hereto.
SECTION 9. Descriptive Headings. The descriptive headings of the
several sections and paragraphs of this Agreement are inserted for
reference only and shall not limit or otherwise affect the meaning
hereof.
SECTION 10. APPLICABLE LAW. THIS AGREEMENT SHALL BE GOVERNED BY,
CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
DELAWARE, APPLICABLE TO CONTRACTS TO BE MADE, EXECUTED, DELIVERED AND
PERFORMED WHOLLY WITHIN SUCH STATE AND, IN ANY CASE, WITHOUT REGARD TO
THE CONFLICTS OF LAW PRINCIPLES OF SUCH STATE.
SECTION 11. Severability. If at any time subsequent to the date
hereof, any provision of this Agreement shall be held by any court of
competent jurisdiction to be illegal, void or unenforceable, such
provision shall be of no force and effect, but the illegality or
unenforceability of such provision shall have no effect upon and shall
not impair the enforceability of any other provision of this Agreement.
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SECTION 12. Equitable Remedies. The parties hereto agree that
irreparable harm would occur in the event that any of the agreements and
provisions of this Agreement were not performed fully by the parties
hereto in accordance with their specific terms or conditions or were
otherwise breached, and that money damages are an inadequate remedy for
breach of this Agreement because of the difficulty of ascertaining and
quantifying the amount of damage that will be suffered by the parties
hereto in the event that this Agreement is not performed in accordance
with its terms or conditions or is otherwise breached. It is accordingly
hereby agreed that the parties hereto shall be entitled to an injunction
or injunctions to restrain, enjoin and prevent breaches of this Agreement
by the other parties and to enforce specifically the terms and provisions
hereof in any court of the United States or any state having
jurisdiction, such remedy being in addition to and not in lieu of, any
other rights and remedies to which the other parties are entitled to at
law or in equity.
SECTION 13. No Waiver. The failure of any party at any time or times
to require performance of any provision hereof (within the time
limitations contained herein) shall not affect the right at a later time
to enforce the same. No waiver by any party of any condition, and no
breach of
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any provision, term, covenant, representation or warranty contained in
this Agreement, whether by conduct or otherwise, in any one or more
instances, shall be deemed to be construed as a further or continuing
waiver of any such condition or of the breach of any other provision,
term, covenant, representation or warranty of this Agreement.
SECTION 14. Counterparts. This Agreement may be executed
simultaneously in any number of counterparts, each of which shall be
deemed an original, but all such counterparts shall together constitute
one and the same instrument.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed and delivered by their respective officers thereunto duly
authorized as of the date first above written.
THE COMPANY
SALTON/MAXIM HOUSEWARES, INC.
By:________________________________
Name:
Title:
THE PURCHASERS:
CENTRE CAPITAL INVESTORS II, L.P.
CENTRE CAPITAL TAX-EXEMPT INVESTORS II, L.P.
CENTRE CAPITAL OFFSHORE INVESTORS II, L.P.
By: Centre Partners II, L.P.
General Partner
By: Centre Partners Management LLC
Attorney-in-fact
By:________________________________
Xxxxx X. Xxxxxxx
Managing Director
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00
XXXXX XXXXX XX XXXXXXXXXXXXXX XX XXXXXXX
By: Centre Parallel Management Partners,
L.P.
Manager
By: Centre Partners Management LLC
Attorney-in-fact
By:_______________________________________
Xxxxx X. Xxxxxxx
Managing Director
CENTRE PARALLEL MANAGEMENT PARTNERS, L.P.
CENTRE PARTNERS COINVESTMENT, L.P.
By: Centre Partners II LLC
General Partner
By:__________________________________
Xxxxx X. Xxxxxxx
Managing Director
51
