Exhibit 10.1


 


Execution Version


 


WAIVER


 


This Waiver (“Waiver”)
is entered into as of November 10, 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 dated as of May 22, 2009 (“Amendment
No. 11”), Amendment No. 12 to Credit Agreement dated as of September 4,
2009, and Amendment No. 13 to Credit Agreement dated as of September 22,
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 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 1, “Waiver Termination Event” means the earliest to
occur of (A) 5 p.m. Chicago time on November 17, 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.


 


2.             Representations
and Warranties of the Company.  The
Company and each Subsidiary Guarantor represents and warrants that:


 


(a)           Its execution,
delivery and performance of this Waiver has been duly authorized by all
necessary corporate action and this Waiver 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 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 counterparts
of this Waiver 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.


 


4.             Reference
to and Effect Upon the Credit Agreement.


 


(a)           Except as
specifically amended above, the Credit Agreement and the other 


 


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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 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.


 


5.             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 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 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.


 


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).


 


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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
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 Waiver as of the date and year first above written.


 


 


	
   

  	
  SELECT COMFORT
  CORPORATION,

  
	
   

  	
  Borrower

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/ James C. Raabe

  
	
   

  	
  Name:

  	
  James C. Raabe

  
	
   

  	
  Title:

  	
  CFO

  



 


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  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/ Sugam Mehta

  
	
   

  	
  Name:

  	
  Sugam Mehta

  
	
   

  	
  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

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  



 

















 


EXHIBIT A


 


REAFFIRMATION OF GUARANTY


 


Each of the undersigned
hereby acknowledges receipt of a copy of the Waiver (“Waiver”) dated as
of November 10, 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 November 10,
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

  



 


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