Execution Copy

Exhibit 10.1

 
WAIVER
 
This Waiver (“Waiver”) is entered into as of March 30, 2009 by and among Select
Comfort Corporation (the “Company”), Select Comfort Retail Corporation, the
other financial institutions signatory hereto (the "Lenders"), JPMorgan Chase
Bank, National Association, as Administrative Agent and Bank of America, N.A.,
as Syndication Agent.
 
 
RECITALS
 
A.           The Company, the Subsidiary Borrowers, the Administrative Agent and
the Lenders are party 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
the Credit Agreement dated as of December 2, 2008, Amendment No. 5 to the Credit
Agreement dated as of January 2, 2009, Amendment No. 6 to the Credit Agreement
dated as of January 15, 2009. Amendment No. 7 to the Credit Agreement dated as
of January 31, 2009 and Amendment No. 8 to the Credit Agreement dated as of
February 28, 2009 (the “Credit Agreement”).  Unless otherwise specified herein,
capitalized terms used in this Waiver shall have the meanings ascribed to them
by the Credit Agreement.
 
B.           The Company has requested that the Administrative Agent and the
Lenders grant a limited waiver with respect to the Credit Agreement.
 
C.           The Administrative Agent and the undersigned Lenders are willing to
grant such 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.           Limited Waiver.  Upon satisfaction of the conditions to
effectiveness set forth in paragraph 3 below, the Administrative Agent and the
Lenders signatory hereto hereby waive the requirement that the Company (i)
deliver its audit for fiscal year 2008 under Section 5.01(a) of the Credit
Agreement without a "going concern" qualification or exception, (ii) comply with
the financial covenant set forth in Section 6.09 of the Credit Agreement for the
respective fiscal periods ending on or about December 31, 2008 through March 31,
2009, (iii) comply with the financial covenant set forth in Section 6.10 of the
Credit Agreement for the fiscal period ending on or about March 31, 2009, and
(iv) comply with the financial covenant set forth in Section 6.12 of the Credit
Agreement for the fiscal period ending on or about December 31, 2008, provided
such waivers in each case shall expire at 5 p.m. on April 18, 2009, at which
time the terms and provisions of Sections 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.
 

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2.           Representations and Warranties of the Company.  The Company
represents and warrants that:
 
(a)           The execution, delivery and performance by the Company of this
Waiver has been duly authorized by all necessary corporate action and this
Waiver is a legal, valid and binding obligation of the Company enforceable
against the Company 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 Waiver, no Default has occurred and is
continuing.
 
3.           Effective Date.  This Waiver shall become effective upon receipt by
the Administrative Agent of (i) duly executed pdf counterparts of this Waiver
from the Company, Select Comfort Retail Corporation and the Required Lenders,
(ii) a duly executed pdf counterpart of the Reaffirmation of Guaranty in the
form attached hereto as Exhibit A executed by each of the Subsidiary Guarantors,
(iii) the financial statements and other documents deliverable under Section
5.01 of the Credit Agreement for the Company's 2008 fiscal year, to the extent
not previously delivered, and (iv) payment of all fees and out-of-pocket costs
and expenses of its counsel and the financial advisor retained by its counsel
invoiced through the date hereof.
 
4.           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.
 
(b)           The execution, delivery and effectiveness of this Waiver 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 Waiver, 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.
 
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5.           Release of Claims and Waiver.  Each of the Company and each of its
Subsidiaries 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 Waiver, 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 each of its Subsidiaries 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 each of its Subsidiaries 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 in any Released Matter to any other person and that the
foregoing constitutes a full and complete release of all Released Matters.
 
6.           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 Waiver, including but not limited to the reasonable fees,
charges and disbursements of attorneys for the Administrative Agent with respect
thereto.
 
7.           Governing Law.  This Agreement shall be construed in accordance
with and governed by the law of the State of New York (without regard to
conflict of law provisions thereof).
 
8.           Headings.  Section headings in this Waiver are included herein for
convenience of reference only and shall not constitute a part of this Waiver for
any other purposes.
 
9.           Counterparts.  This Waiver may be executed in any number of pdf
counterparts, and 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]
 

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

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

 

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JPMORGAN CHASE BANK, NATIONAL ASSOCIATION, individually, 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 and as Syndication Agent
 
By           /s/ Lynn D.
Simmons                                                      
Name:     Lynn D. Simmons
Title:       Senior Vice President

 
CITICORP USA, INC., as a Lender
 
By                                                                           
Name:
Title:

 
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/ Troy
Weaver                                                      
Name:     Troy Weaver
Title:       Senior Vice President

 

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EXHIBIT A
 
REAFFIRMATION OF GUARANTY
 
The undersigned hereby acknowledges receipt of a copy of the Waiver, dated as of
March 30, 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 Waiver).
 
Dated as of March 30, 2009
 

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

  - 6 -
 

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