Exhibit 10.2
Exhibit D
GUARANTEE
OF
STERLING CAPITAL PARTNERS III,
L.P.
GUARANTEE, dated as of
October 2, 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 October 2, 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 shall have the right to purchase shares of
Common Stock and a Warrant to acquire shares of Common Stock, 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is rescinded or must otherwise be returned for any reason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 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 bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium or other similar
laws
2
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 Com
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