Exhibit 10.2
EXHIBIT C
GUARANTEE
OF
STERLING CAPITAL PARTNERS III, L.P.
GUARANTEE, dated as of May 22, 2009 (this "Guarantee"), by Sterling Capital
Partners III, L.P., a Delaware limited partnership (the "Guarantor"), in favor
of Select Comfort Corporation, a Delaware corporation (the "Company").
1.
GUARANTEE. TO INDUCE THE COMPANY TO
ENTER INTO THAT CERTAIN SECURITIES PURCHASE AGREEMENT, DATED AS OF MAY 22, 2009
(AS AMENDED, SUPPLEMENTED OR OTHERWISE MODIFIED FROM TIME TO TIME, THE "PURCHASE
AGREEMENT"; CAPITALIZED TERMS USED WITHOUT DEFINITION HEREIN HAVE THE MEANINGS
ASCRIBED TO THEM IN THE PURCHASE AGREEMENT), BY AND BETWEEN THE COMPANY AND
STERLING SC INVESTOR, LLC, A DELAWARE LIMITED LIABILITY COMPANY ("BUYER"),
PURSUANT TO WHICH BUYER WILL PURCHASE SHARES OF COMMON STOCK OF THE COMPANY, THE
GUARANTOR ABSOLUTELY, UNCONDITIONALLY AND IRREVOCABLY GUARANTEES TO THE COMPANY,
THE DUE AND PUNCTUAL OBSERVANCE, PAYMENT, PERFORMANCE AND DISCHARGE OF ALL
OBLIGATIONS OF BUYER UNDER THE PURCHASE AGREEMENT (THE "OBLIGATIONS").
2.
NATURE OF GUARANTEE. THE COMPANY SHALL
NOT BE OBLIGATED TO FILE ANY CLAIM RELATING TO THE OBLIGATIONS IN THE EVENT THAT
BUYER BECOMES SUBJECT TO A BANKRUPTCY, REORGANIZATION OR SIMILAR PROCEEDING, AND
THE FAILURE OF THE COMPANY TO SO FILE SHALL NOT AFFECT THE GUARANTOR'S
OBLIGATIONS HEREUNDER. IN THE EVENT THAT ANY PAYMENT TO THE COMPANY IN RESPECT
OF ANY OBLIGATION IS RESCINDED OR MUST OTHERWISE BE RETURNED FOR ANY REASON
WHATSOEVER, THE GUARANTOR SHALL REMAIN LIABLE HEREUNDER WITH RESPECT TO SUCH
OBLIGATION AS IF SUCH PAYMENT HAD NOT BEEN MADE. THIS IS AN UNCONDITIONAL
GUARANTEE OF PAYMENT AND NOT OF COLLECTIBILITY. THE GUARANTOR SHALL HAVE, AND
RESERVES THE RIGHT TO ASSERT, ANY DEFENSES WHICH BUYER MAY HAVE TO PAYMENT OF
ANY OBLIGATIONS OTHER THAN DEFENSES ARISING FROM THE BANKRUPTCY OR INSOLVENCY OF
BUYER, FRAUDULENT CONVEYANCE OR FRAUDULENT TRANSFER, MORATORIUM, REORGANIZATION
OR OTHER STATUTES OR PROCEEDINGS AFFECTING CREDITORS RIGHTS GENERALLY AND OTHER
DEFENSES EXPRESSLY WAIVED HEREBY.
3.
CHANGES IN OBLIGATIONS, CERTAIN WAIVERS.
THE GUARANTOR AGREES THAT THE COMPANY MAY AT ANY TIME AND FROM TIME TO TIME,
WITHOUT NOTICE TO OR FURTHER CONSENT OF THE GUARANTOR, EXTEND THE TIME OF
PAYMENT OF ANY OF THE OBLIGATIONS, AND MAY ALSO MAKE ANY AGREEMENT WITH BUYER
FOR THE EXTENSION, RENEWAL, PAYMENT, COMPROMISE, DISCHARGE OR RELEASE THEREOF,
IN WHOLE OR IN PART, OR FOR ANY MODIFICATION OF THE TERMS THEREOF OR OF ANY
AGREEMENT BETWEEN THE COMPANY AND BUYER WITHOUT IN ANY WAY IMPAIRING OR
AFFECTING THIS GUARANTEE. THE GUARANTOR AGREES THAT THE OBLIGATIONS OF THE
GUARANTOR HEREUNDER SHALL NOT BE RELEASED OR DISCHARGED, IN WHOLE OR IN PART, OR
OTHERWISE AFFECTED BY (A) THE FAILURE OF THE COMPANY TO ASSERT ANY CLAIM OR
DEMAND OR TO ENFORCE ANY RIGHT OR REMEDY AGAINST BUYER OR ANY OTHER PERSON
INTERESTED IN THE TRANSACTIONS CONTEMPLATED BY THE PURCHASE AGREEMENT; (B) ANY
CHANGE IN THE TIME, PLACE OR MANNER OF PAYMENT OF ANY OF THE OBLIGATIONS OR ANY
RESCISSION, WAIVER, COMPROMISE, CONSOLIDATION OR OTHER AMENDMENT OR MODIFICATION
OF ANY OF THE TERMS OR PROVISIONS OF THE PURCHASE AGREEMENT OR ANY OTHER
AGREEMENT EVIDENCING, SECURING