Salton, Inc. Approves Executed Financing Commitment Letters

  
    
  
  
    
      Salton, Inc. (NYSE:SFP) today announced that its board of directors 
      approved the executed financing commitment letters delivered to Salton 
      by APN Holding Company, Inc. as required by the terms of the Agreement 
      and Plan of Merger dated February 7, 2007 (the “Merger 
      Agreement”) by and among Salton, SFP Merger 
      Sub, a wholly-owned subsidiary of Salton, and APN Holding Company, Inc. 
      The Merger Agreement provides for the merger of SFP Merger Sub with and 
      into APN Holding Company, Inc., which owns all of the outstanding common 
      shares of Applica Incorporated.
    
    
      The commitment letters are from: (1) Silver Point Finance LLC; (2) Bank 
      of America N.A. and Banc of America Securities LLC; and (3) Harbinger 
      Capital Partners Master Fund I, Ltd. (“Master 
      Fund”) and Harbinger Capital Partners Special 
      Fund, L.P. (“Special Fund”). 
      The commitment letter from Silver Point Finance LLC provides for 
      borrowings of up to $175 million under several senior secured credit 
      facilities. The commitment letter from Bank of America, N.A. and Banc of 
      America Securities LLC provides for borrowings of up to $250 million 
      under a senior secured credit facility.
    
    
      Pursuant to the commitment letter from Master Fund and Special Fund, 
      they have agreed to purchase shares of a new class of Salton’s 
      preferred stock and detachable warrants to purchase 21,000,000 shares of 
      Salton’s common stock for an aggregate 
      purchase price of $100 million by exchanging a principal amount of Salton’s 
      12-1/4% Senior Subordinated Notes due 2008 and/or Second Lien Notes (in 
      each case at the applicable redemption or repurchase price required to 
      be paid in connection with a change of control) plus any accrued and 
      unpaid interest thereon through the closing date of the merger in an 
      aggregate amount equal to the $100 million. The new preferred stock will 
      be entitled to a 16% cumulative dividend payable in kind, and will be 
      redeemable 6 years following the closing of the merger. The warrants 
      will have an exercise price of $2.45 per share and will expire 10 years 
      following the closing of the merger contemplated by the Merger Agreement.
    
    
      Salton intends to file with the Securities and Exchange Commission a 
      Current Report on Form 8-K with a copy of the financing commitment 
      letters.
    
    
      Consummation of the merger is subject to various conditions, including 
      the approval by the Company’s stockholders, 
      the funding of the financing commitments delivered by APN Holding 
      Company, Inc. or alternative financing, and the absence of legal 
      impediments to the consummation of the merger. The parties previously 
      made all filings required under the Hart-Scott-Rodino Antitrust 
      Improvements Act, and the waiting period thereunder expired in January 
      2007.
    
    
      Salton also announced that it has entered into a cross-licensing 
      agreement with Applica Incorporated pursuant to which each company has 
      granted to the other party the right to use certain brand names and 
      other intellectual property in certain markets in exchange for specified 
      royalties.
    
    
      ABOUT SALTON, INC.
    
    
      Salton, Inc. is a leading designer, marketer and distributor of branded, 
      high-quality small appliances, home decor and personal care products. 
      Its product mix includes a broad range of small kitchen and home 
      appliances, electronics for the home, time products, lighting products 
      and personal care and wellness products. The Company sells its products 
      under a portfolio of well recognized brand names such as Salton®, 
      George Foreman®, Westinghouse™, 
      Toastmaster®, Melitta®, 
      Russell Hobbs®, Farberware®, 
      Ingraham® and Stiffel®. 
      It believes its strong market position results from its well-known brand 
      names, high-quality and innovative products, strong relationships with 
      its customer base and its focused outsourcing strategy.
    
    
      ABOUT APPLICA
    
    
      Applica and its subsidiaries are marketers and distributors of a broad 
      range of branded and private-label small household appliances. Applica 
      markets and distributes kitchen products, home products, pest control 
      products, pet care products and personal care products. Applica markets 
      products under licensed brand names, such as Black & Decker ®; 
      its own brand names, such as Windmere®, 
      LitterMaid®, Belson® 
      and Applica®; and other private-label brand 
      names. Applica’s customers include mass 
      merchandisers, specialty retailers and appliance distributors primarily 
      in North America, Latin America and the Caribbean. Additional 
      information about Applica is available at www.applicainc.com
    
    
      The statements contained in the news release that are not historical 
      facts are “forward-looking statements” 
      within the meaning of Section 27A of the Securities Act of 1933 and 
      Section 21E of the Securities Exchange Act of 1934. These 
      forward-looking statements are made subject to certain risks and 
      uncertainties, which could cause actual results to differ materially 
      from those presented in these forward-looking statements. Readers are 
      cautioned not to place undue reliance on these forward-looking 
      statements, which speak only as of the date hereof. Salton undertakes no 
      obligation to publicly revise these forward-looking statements to 
      reflect events or circumstances that arise after the date hereof. Among 
      the factors that could cause plans, actions and results to differ 
      materially from current expectations are, without limitation: (1) the 
      funding of the executed commitment letters delivered by APN Holding 
      Company, Inc. or alternative financing, (2) the failure to obtain 
      approval of the merger from Salton stockholders, (3) the failure to 
      obtain required third party consents to the merger, (4) the ability of 
      the two businesses to be integrated successfully, (5) the ability of the 
      new company to fully realize the cost savings and any synergies from the 
      proposed transaction within the proposed time frame, (6) disruption from 
      the merger making it more difficult to maintain relationships with 
      customers, employees or suppliers, (7) the failure to maintain continued 
      listing on the New York Stock Exchange of Salton’s 
      common stock, (8) customer acceptance of the new combined entity, 
      (9) changes in the sales prices, product mix or levels of consumer 
      purchases of kitchenware and small electric household appliances, 
      economic conditions and the retail environment, (10) bankruptcy of or 
      loss of major retail customers or suppliers, (11) changes in costs 
      including transportation costs, of raw materials, key component parts or 
      sourced products, (12) delays in delivery or the unavailability of raw 
      materials, key component parts or sourced products, (13) changes in 
      suppliers, (14) exchange rate fluctuations, changes in the foreign 
      import tariffs and monetary policies, and other changes in the 
      regulatory climate in the foreign countries in which Salton and Applica 
      buy, operate and/or sell products, (15) product liability, regulatory 
      actions or other litigation, warranty claims or returns of products, 
      (16) customer acceptance of changes in costs of, or delays in the 
      development of new products, (17) delays in or increased costs of 
      restructuring programs and (18) increased competition, including 
      consolidation within the industry; as well as other risks and 
      uncertainties detailed from time to time in Salton’s 
      Securities and Exchange Commission filings.
    
    
      Investors and security holders are urged to read the proxy statement 
      when it becomes available and any other relevant documents to be filed 
      with the SEC in connection with the proposed transaction because it will 
      contain important information about Salton, Applica Incorporated and the 
      proposed transaction.
    
    
      Investors and security holders may obtain free copies of these documents 
      when they become available through the website maintained by the SEC at www.sec.gov. 
      In addition, the documents filed with the SEC by Salton may be obtained 
      free of charge by directing such requests to Salton, Inc., 1955 W. Field 
      Court, Lake Forest, Illinois 60045, Attention: Corporate Secretary, 
      Telephone [phone], or from Salton’s 
      website at www.salton.com.
    
    
      Salton and certain of its directors, executive officers and other 
      members of management may be deemed to be participants in the 
      solicitation of proxies from Salton stockholders with respect to the 
      proposed transaction. Information regarding the interests of these 
      officers and directors in the proposed transaction will be included in 
      the proxy statement. In addition, information about Salton’s 
      directors, executive officers and members of management is contained in 
      Salton’s most recent proxy statement, which 
      is available on Salton’s website and at www.sec.gov. 
      Additional information regarding the interests of such potential 
      participants will be included in the proxy statement and other relevant 
      documents filed with the SEC.
    
    
      Black & Decker® is a trademark of the 
      Black & Decker Corporation, Towson, Maryland.