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is rescinded or must otherwise be returned for any reason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 or otherwise
executed in connection with any of the Obligations, (c) the
addition, substitution or release of any other Person interested in
the transactions contemplated by the Purchase Agreement;
(d) any change in the corporate existence,
structure or ownership of
Buyer or any other Person interested in the transactions
contemplated by the Purchase Agreement; (e) any insolvency,
bankruptcy, reorganization or other similar proceeding affecting
Buyer or any other Person interested in the transactions
contemplated in the Purchase Agreement; (f) the existence of
any claim, set-off or other rights which the Guarantor may have at
any time against Buyer, whether in connection with the Obligations
or otherwise; or (g) the adequacy of any other means the
Company may have of obtaining payment of the Obligations. The
Guarantor waives promptness, diligence, notice of the acceptance of
this Guarantee and of the Obligations, presentment, demand for
payment, notice of non-performance, default, dishonor and protest,
notice of any Obligations incurred and all other notices of any
kind (except for notices to be provided to Buyer in accordance with
the Purchase Agreement), all defenses which may be available by
virtue of any valuation, stay, moratorium law or other similar law
now or hereafter in effect, any right to require the marshalling of
assets of Buyer or any other Entity or other Person interested in
the transactions contemplated by the Purchase Agreement, and all
suretyship defenses generally (other than (i) fraud or willful
misconduct by the Company or any of its Subsidiaries or
(ii) any defenses to the payment or performance of the
Obligations that are available to Buyer under the Purchase
Agreement or (iii) breach by the Company of this Guarantee).
The Guarantor acknowledges that it will receive substantial direct
and indirect benefits from the transactions contemplated by the
Purchase Agreement and that the waivers set forth in this Guarantee
are knowingly made in contemplation of such benefits.
Notwithstanding anything to the contrary contained in this
Guarantee, the Company hereby agrees that, to the extent Buyer is
relieved of any Obligation under the Purchase Agreement (other than
by reason of bankruptcy or insolvency of the Buyer, fraudulent
transfer, fraudulent conveyance, moratorium, reorganization and
other defenses expressly waived hereby), the Guarantor shall be
similarly relieved of such Obligation under this
Guarantee.
4.
No
Waiver . No failure on the
part of the Company to exercise, and no delay in exercising, any
right, remedy or power hereunder shall operate as a waiver thereof,
nor shall any single or partial exercise by the Company of any
right, remedy or power hereunder preclude any other or future
exercise of any right, remedy or power hereunder.
5.
Representations and
Warranties . The Guarantor hereby
represents and warrants that:
a.
the execution,
delivery and performance of this Guarantee have been duly
authorized by all necessary action and do not contravene any
provision of the Guarantor’s partnership agreement, operating
agreement or similar organizational documents or any law,
regulation, rule, decree, order, judgment or contractual
restriction binding on the Guarantor or its assets;
b.
all consents,
approvals, authorizations and permits of, filings with and
notifications to, any governmental authority necessary for the due
execution, delivery and performance of this Guarantee by the
Guarantor have been obtained or made and all conditions thereof
have been duly complied with, and no other action by, and no notice
to or filing with, any governmental authority or regulatory body is
required in connection with the execution, delivery or performance
of this Guarantee;
c.
this Guarantee
constitutes a legal, valid and binding obligation of the Guarantor
enforceable against the Guarantor in accordance with its terms,
subject to (i) the effects of
2
bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium or other similar
laws affecting creditors’ rights generally, and
(ii) general equitable principles (whether considered in a
proceeding in equity or at law);
d.
this Guarantee
does not constitute a breach or event of default under any other
agreement to which the Guarantor is a party, except as would not
have a material adverse effect on the Guarantor’s ability to
perform its obligations hereunder; and
e.
the Guarantor has
the financial capacity to pay and perform its obligations under
this Guarantee, and all funds necessary for the Guarantor to
fulfill its Obligations under this Guarantee shall be available to
the Guarantor for so long as this Guarantee shall remain in effect
in accordance with Section 8 hereof.
6.
No
Assignment . Neither the Guarantor nor
the Company may assign its rights, interests or obligations
hereunder to any other Person (except by op
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