Exhibit 10.1
Execution Copy

 
AMENDMENT NO. 13 TO CREDIT AGREEMENT
 
This Amendment No. 13 to Credit Agreement (this “Thirteenth Amendment”) is
entered into as of September 22, 2009 by and among Select Comfort Corporation
(the “Company”), JPMorgan Chase Bank, National Association, as Administrative
Agent and Collateral Agent, Bank of America, N.A., as Syndication Agent, and the
financial institutions signatories hereto as lenders (the “Lenders”).
 
 
RECITALS
 
A.           The undersigned are parties to that certain Credit Agreement dated
as of June 9, 2006, as amended pursuant to Amendment No. 1 to Credit Agreement
dated as of June 28, 2007, Amendment No. 2 to Credit Agreement dated as of
February 1, 2008, Amendment No. 3 to Credit Agreement dated as of May 30, 2008,
Amendment No. 4 to Credit Agreement dated as of December 2, 2008, Amendment No.
5 to Credit Agreement dated as of January 2, 2009, Amendment No. 6 to Credit
Agreement dated as of January 15, 2009 (“Amendment No. 6”), Amendment No. 7 to
Credit Agreement dated as of January 31, 2009, Amendment No. 8 to Credit
Agreement dated as of February 28, 2009, Amendment No. 9 to Credit Agreement
dated as of April 18, 2009, Amendment No. 10 to Credit Agreement dated as of May
8, 2009, Amendment No. 11 to Credit Agreement ("Amendment No. 11") dated as of
May 22, 2009, and Amendment No. 12 to Credit Agreement dated as of September 15,
2009 (the “Credit Agreement”).  Unless otherwise specified herein, capitalized
terms used in this Thirteenth Amendment shall have the meanings ascribed to them
by the Credit Agreement.
 
B.           The Company has requested that the Lenders further amend the Credit
Agreement to reflect certain changes thereto and to grant a waiver with respect
to the Credit Agreement.
 
C.           The undersigned Lenders are willing to amend the Credit Agreement
and to grant a waiver on the terms and conditions set forth below.
 
Now, therefore, in consideration of the mutual execution hereof and other good
and valuable consideration, the parties hereto agree as follows:
 
1.   Amendments to Credit Agreement.  On the Effective Date (as defined below),
Section 6.13 of the Credit Agreement is hereby amended to read in full as
follows:
 
SECTION 6.13  Minimum Availability.  The Company shall not permit the
outstanding principal balance of the Loans plus the LC Exposure to exceed at any
time the aggregate amount of the Commitments less $30,000,000.
 
2.   Limited Waiver.  On the Effective Date, the Administrative Agent and the
Lenders signatory hereto hereby waive the Company’s (i) breach of Section
5.01(a) of the Credit Agreement occasioned by its delivery of an audit for
fiscal year 2008 with a “going concern” qualification, (ii) breach of Section
6.09 of the Credit Agreement for the respective fiscal period ending on or about
December 31, 2008 and other applicable fiscal periods ending on or prior to a
 
 
 

--------------------------------------------------------------------------------

 
 
 Waiver Termination Event, (iii) breach of Section 6.10 of the Credit Agreement
for the respective fiscal period ending on or about March 31, 2009 and other
applicable fiscal periods ending on or prior to a Waiver Termination Event, and
(iv) breach of the financial covenant set forth in Section 6.12 of the Credit
Agreement for the fiscal period ending on or about December 31, 2008 and other
applicable fiscal periods ending on or prior to a Waiver Termination Event,
provided such waivers shall expire on the occurrence of any Waiver Termination
Event, and upon such expiration the terms and provisions of Sections 5.01(a),
6.09, 6.10 and 6.12 of the Credit Agreement shall be effective with the same
force and effect under the Credit Agreement as if such waivers had not been
given.  As used in this paragraph 2, “Waiver Termination Event” means the
earliest to occur of (A) 5 p.m. Chicago time on September 29, 2009, and (B) if
at any time Capital Expenditures for the period commencing on the first day of
the fiscal month for January, 2009 through the date of determination exceeds
$4,000,000 in the aggregate.
 
3.   Representations and Warranties of the Company.  The Company and each
Subsidiary Guarantor represents and warrants that:
 
(a)   Its execution, delivery and performance of this Thirteenth Amendment has
been duly authorized by all necessary corporate action and this Thirteenth
Amendment is its legal, valid and binding obligation enforceable against it in
accordance with its terms, except as the enforcement thereof may be subject to
(i) the effect of any applicable bankruptcy, insolvency, reorganization,
moratorium or similar law affecting creditors’ rights generally and (ii) general
principles of equity, regardless of whether considered in a proceeding in equity
or at law.
 
(b)   Each of the representations and warranties contained in the Credit
Agreement and the other Credit Documents is true and correct in all material
respects on and as of the date hereof as if made on the date hereof (except any
such representation or warranty that expressly relates to or is made expressly
as of a specific earlier date, in which case such representation or warranty
shall be true and correct with respect to or as of such specific earlier date).
 
(c)   After giving effect to this Thirteenth Amendment, no Default has occurred
and is continuing.
 
4.   Effective Date.  This Thirteenth Amendment shall become effective upon
receipt by the Administrative Agent of (i) duly executed counterparts of this
Thirteenth Amendment from the Company, the Subsidiary Guarantors and the
Required Lenders, (ii) the Reaffirmation of Guaranty in the form attached hereto
as Exhibit A executed by each of the Subsidiary Guarantors, (iii) payment to the
Administrative Agent, in immediately available funds for the ratable benefit of
the Lenders, of an amendment and waiver fee of $25,000, which fee shall be
deemed fully earned and nonrefundable on the Effective Date, and (iv) payment of
all other fees due the Administrative Agent, including, without limitation, all
fees and out-of-pocket costs and expenses of counsel to the Administrative Agent
and of the financial advisor retained by its counsel invoiced through the date
hereof.
 
- 2 -
 

--------------------------------------------------------------------------------

 
5.   Reference to and Effect Upon the Credit Agreement.
 
(a)   Except as specifically amended above, the Credit Agreement and the other
Credit Documents shall remain in full force and effect and are hereby ratified
and confirmed.  Without limiting the generality of the foregoing, the Company
hereby reaffirms its obligations under paragraph 4(b) of Amendment No. 6 with
respect to the deposit into a cash collateral account with the Collateral Agent
of any federal or state income tax refunds received hereafter by or for the
benefit of the Company or any Subsidiary Guarantor, and its obligations under
Section 6.16, as amended by Amendment No. 11.
 
(b)   The execution, delivery and effectiveness of this Thirteenth Amendment
shall not operate as a waiver of any right, power or remedy of the
Administrative Agent or any Lender under the Credit Agreement or any Credit
Document, nor constitute a waiver of any provision of the Credit Agreement or
any Credit Document, except as specifically set forth herein.  Upon the
effectiveness of this Thirteenth Amendment, each reference in the Credit
Agreement to “this Agreement”, “hereunder”, “hereof”, “herein” or words of
similar import shall mean and be a reference to the Credit Agreement as amended
hereby.
 
6.   Release of Claims and Waiver.  Each of the Company and the Subsidiary
Guarantors hereby releases, remises, acquits and forever discharges each of the
Lenders and such Lender’s employees, agents, representatives, consultants,
attorneys, fiduciaries, servants, officers, directors, partners, predecessors,
successors and assigns, subsidiary corporations, parent corporations, and
related corporate divisions (all of the foregoing hereinafter called the
“Released Parties”), from any and all actions and causes of action, judgments,
executions, suits, debts, claims, demands, liabilities, obligations, damages and
expenses of any and every character, known or unknown, direct and/or indirect,
at law or in equity, of whatsoever kind or nature, for or because of any matter
or things done, omitted or suffered to be done by any of the Released Parties
prior to and including the date of execution hereof, and in any way directly or
indirectly arising out of or in any way connected to this Thirteenth Amendment,
the Collateral, the Loans, the Credit Agreement, or the other Credit Documents
(all of the foregoing hereinafter called the “Released Matters”).  Each of
the Company and the Subsidiary Guarantors acknowledges that the agreements in
this paragraph are intended to be in full satisfaction of all or any alleged
injuries or damages arising in connection with the Released Matters. Each of the
Company and the Subsidiary Guarantors represents and warrants to the Lenders
that it has not purported to transfer, assign or otherwise convey any right,
title or interest of the Company or the Subsidiary Guarantors in any Released
Matter to any other person and that the foregoing constitutes a full and
complete release of all Released Matters.
 
7.   Costs and Expenses.  The Company hereby affirms its obligations under
Section 9.03 of the Credit Agreement to reimburse the Administrative Agent for
all reasonable costs and out-of-pocket expenses paid or incurred by the
Administrative Agent in connection with the preparation, negotiation, execution
and delivery of this Thirteenth Amendment, including but not limited to the
reasonable fees, charges and disbursements of attorneys for the Administrative
Agent with respect thereto.
 
8.   Governing Law.  This Agreement shall be construed in accordance with
 
- 3 -
 

--------------------------------------------------------------------------------

 
 and governed by the law of the State of New York (without regard to conflict of
law provisions thereof).
 
9.   Headings.  Section headings in this Thirteenth Amendment are included
herein for convenience of reference only and shall not constitute a part of this
Thirteenth Amendment for any other purposes.
 
10.   Counterparts.  This Thirteenth Amendment may be executed in any number of
counterparts, each of which when so executed shall be deemed an original but all
such counterparts shall constitute one and the same instrument.
 
[signature pages follow]
 

- 4 - 
 

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, the parties have executed this Thirteenth Amendment as of
the date and year first above written.
 
SELECT COMFORT CORPORATION,
Borrower
 
By  /s/ James C.
Raabe                                                                           
Name:  James C. Raabe
Title:    CFO

 

- 5 - 
 

--------------------------------------------------------------------------------

 

JPMORGAN CHASE BANK, NATIONAL
ASSOCIATION, individually as a Lender, as
Administrative Agent and as Collateral Agent
 
By  /s/ Patricia S.
Carpen                                                                           
Name:  Patricia S. Carpen
Title:    Vice President

 
BANK OF AMERICA, N.A., individually as a
Lender and as Syndication Agent
 
By                                                                           
Name:
Title:

 
CITICORP USA, INC., as a Lender
 
By  /s/ Mark R.
Floyd                                                                           
Name:  Mark R. Floyd
Title:    Vice President

 
WELLS FARGO BANK, NATIONAL ASSOCIATION,
as a Lender
 
By  /s/ Troy Jefferson 
Name:  Troy Jefferson
Title:    Vice President

 
BRANCH BANKING AND TRUST CO., as a
Lender
 
By  /s/ Lee Miller  
Name:  Lee Miller
Title:    AVP
 

- 6 - 
 

--------------------------------------------------------------------------------

 

EXHIBIT A
 
REAFFIRMATION OF GUARANTY
 
Each of the undersigned hereby acknowledges receipt of a copy of Amendment No.
13 to the Credit Agreement (the “Thirteenth Amendment”) dated as of September
22, 2009, and reaffirms its obligations under the Subsidiary Guaranty dated as
of June 9, 2006 in favor of JPMorgan Chase Bank, National Association, as
Administrative Agent, and the Lenders (as defined in the Thirteenth Amendment).
 
Dated as of September 22, 2009
 

 
SELECT COMFORT RETAIL CORPORATION
 
By  /s/ James C.
Raabe                                                                           
Name:  James C. Raabe
Title:    CFO

SELECT COMFORT CANADA HOLDING INC.

By  /s/ James C.
Raabe                                                                           
Name:  James C. Raabe
Title:    CFO

SELECTCOMFORT.COM CORPORATION

By  /s/ James C.
Raabe                                                                           
Name:  James C. Raabe
Title:    CFO

- 7 - 
 

--------------------------------------------------------------------------------