SELECT COMFORT CORPORATION
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement is made this 6th day of June, 2001
among Select Comfort Corporation, a Minnesota corporation (the "COMPANY"), each
of the Note Holders (as defined below), each of the Old Warrant Holders set
forth on SCHEDULE A, each of the Old Preferred Shareholders set forth on
Schedule B, and Xxxxxxxxx & Company, Ltd. ("M&C") (this "AGREEMENT").
WHEREAS, the Company is entering into a Note Purchase Agreement
pursuant to which it will issue up to $12 million principal amount of senior
secured convertible notes (together with any notes of the Company issued in
exchange or substitution therefor, the "Convertible Notes"), and warrants to
purchase up to 4,800,000 shares (together with any warrants of the Company
issued in exchange or substitution therefor, the "Note Holder Warrants") of the
Company's common stock, par value $0.01 per share (the "Common Stock"), to
certain investors (the "Note Holders"); and the Company entered into that
certain Letter Agreement dated April 3, 2001 with its placement agent, M&C to
grant M&C a warrant to purchase approximately 353,438 shares of Common Stock
(the "M&C Warrant"); and
WHEREAS, as in connection with the issuance of the Convertible Notes
and the Note Holder Warrants, the Company has agreed to grant the Note Holders
certain registration rights with respect to such Convertible Notes and Note
Holder Warrants, and the Company has agreed to grant M&C certain registration
rights pursuant to the terms and conditions of this Agreement; and
WHEREAS, as a condition to purchasing the Convertible Notes and Note
Holder Warrants, the Note Holders have required the Company to include as
parties to this Agreement the Old Warrant Holders and Old Preferred Shareholders
to coordinate the relative priorities of the registration rights of the Old
Warrant Holders, the Note Holders and the Old Preferred Shareholders, all as
more fully set forth herein.
NOW, THEREFORE, for good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the Company, the Note Holders, the
Old Warrant Holders and the Old Preferred Shareholders mutually agree as
follows:
1. REGISTRATION OF SECURITIES.
1.1 REQUIRED REGISTRATION.
(a) If the Company shall receive a written request therefor
from either (i) the holder or holders of at least 40% of the New Registrable
Securities or (ii) the holder or holders of at least 67% of the Old Registrable
Securities, the Company shall prepare and file a registration statement under
the Securities Act covering the Registrable Securities which are the subject of
such request and shall use all commercially reasonable efforts to cause such
registration statement to become effective. In addition, upon the receipt of
such request, the Company shall
promptly give written notice to all other holders of New Registrable Securities
or Old Registrable Securities (whichever shall have initiated such registration)
that such registration is to be effected. The Company shall include in such
registration statement such New Registrable Securities or Old Registrable
Securities (whichever shall have initiated such registration) for which it has
received written requests to register by such other holders within 30 days after
the delivery of the Company's written notice to such other holders.
(b) The Company's obligation to register New Registrable
Securities and Old Registrable Securities under this Section 1.1 shall, however,
be subject to the following limitations: (a) the Company shall be obligated to
prepare, file and use its commercially reasonable efforts to cause to become
effective pursuant to this Section 1.1 only two registration statements on Form
S-1 or any successor form promulgated by the SEC ("Form S-1") at the initiation
of holders of New Registrable Securities and only two registration statements on
Form S-1 at the initiation of holders of Old Registrable Securities (provided,
however, that a demand for registration shall not count as a registration under
this clause (a) if either (i) the registration statement filed with respect to
such registration is not declared effective by the SEC for reasons other than
the holders not proceeding with such registration, or (ii) each holder
requesting registration of Registrable Securities under this Section 1.1 does
not register and sell at least 90% of the Registrable Securities it has
requested be registered in such registration for reasons other than its
voluntary decision not to do so); (b) if the Company is required to use Form
S-1, the Company shall not be obligated to prepare, file or use its commercially
reasonable efforts to cause to become effective a registration statement
pursuant to this Section 1.1 unless at least 20% of the New Registrable
Securities or Old Registrable Securities (whichever shall have initiated such
registration) are included in such registration statement and the anticipated
aggregate offering price to the public of such Registrable Securities to be
registered is at least $5,000,000; (c) the Company shall be obligated to
prepare, file and use its commercially reasonable efforts to cause to become
effective pursuant to this Section 1.1 only two registration statements on Form
S-3 or any successor form promulgated by the SEC ("Form S-3") at the initiation
of holders of New Registrable Securities and only two registration statements on
Form S-3 at the initiation of holders of Old Registrable Securities in any
twelve-month period (provided, however, that a demand for registration shall not
count as a registration under this clause (c) if either (i) the registration
statement filed with respect to such registration is not declared effective by
the SEC for reasons other than the holders not proceeding with such
registration, or (ii) each holder requesting registration of Registrable
Securities under this Section 1.1 does not register and sell at least 90% of the
Registrable Securities it has requested be registered in such registration for
reasons other than its voluntary decision not to do so); (d) if the Company
meets the requirements for using Form S-3, the Company shall not be obligated to
prepare, file or use its commercially reasonable efforts to cause to become
effective a registration statement pursuant to this Section 1.1 unless the
anticipated aggregate offering price to the public of the New Registrable
Securities or Old Registrable Securities (whichever shall have initiated such
registration) to be registered is at least $500,000; and (e) the Company shall
not be obligated to effect any registration pursuant to this Section 1.1 at the
initiation of holders of the New Registrable Securities prior to the first
anniversary of the date of this Agreement. Notwithstanding anything to the
contrary stated in this Section 1.1, in the event the holders of at least 67% of
the New Registrable Securities or Old Registrable Securities (whichever shall
have initiated such registration) for which registration has been requested
pursuant to this Section 1.1 determine for any reason not to proceed with such
registration at any time before a registration
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statement has been declared effective by the SEC, and such registration
statement, if theretofore filed with the SEC, is withdrawn with respect to the
Registrable Securities covered thereby, and the holders of such New Registrable
Securities or Old Registrable Securities (whichever shall have initiated such
registration) agree to bear their own expenses incurred in connection therewith
and to reimburse the Company for the expenses incurred by it attributable to the
registration of such Registrable Securities, then the holders of such New
Registrable Securities or Old Registrable Securities (whichever shall have
initiated such registration) shall not be deemed to have exercised their right
to require the Company to register Registrable Securities pursuant to this
Section 1.1.
(c) Notwithstanding anything to the contrary stated in this
Section 1.1, if the Company, within 30 days after any written request for
registration is received by it pursuant to this Section 1.1, shall furnish to
the holders of the New Registrable Securities or the Old Registrable Securities
(whichever shall have initiated such registration) for which registration has
been requested under this Section 1.1 a certificate signed by the chief
executive officer of the Company stating that the Company, pursuant to an action
approved by its Board of Directors, already has a present plan to commence
preparation of a registration statement and to file the same within 90 days, the
Company shall have the right to defer the preparation and filing of a
registration statement pursuant to this Section 1.1 for a period ending not
later than 90 days after the date such certificate is so furnished.
(d) Without the written consent of the holders of at least 67%
of the New Registrable Securities or 67% of the Old Registrable Securities
(whichever shall have initiated such registration) for which registration has
been requested pursuant to this Section 1.1, neither the Company nor any other
holder of securities of the Company may include securities in such registration
if in the good faith judgment of the managing underwriter of such public
offering the inclusion of such securities would interfere with the successful
marketing of the New Registrable Securities or Old Registrable Securities
(whichever shall have initiated such registration) or require the exclusion of
any portion of the New Registrable Securities or Old Registrable Securities
(whichever shall have initiated such registration) to be registered.
(e) If an offering covered by a request for registration under
this Section 1.1 is underwritten in whole or in part and the managing
underwriter of such public offering furnishes a written opinion that the total
number of New Registrable Securities or Old Registrable Securities (whichever
shall have initiated such registration) proposed to be sold in such offering
exceeds the maximum number of New Registrable Securities or Old Registrable
Securities (whichever shall have initiated such registration) (as specified in
such opinion) which can be marketed at a price reasonably related to the then
current market value of such Registrable Securities and without materially and
adversely affecting such offering, then the number of New Registrable Securities
or Old Registrable Securities (whichever shall have initiated such registration)
to be sold by each prospective seller shall be reduced pro rata, to the extent
necessary. Those New Registrable Securities or Old Registrable Securities
(whichever shall have initiated such registration) which are thus excluded from
the underwritten public offering shall be withheld from the market by the
holders thereof for a period, not to exceed 90 days, which the managing
underwriter reasonably determines is necessary in order to effect the
underwritten public offering.
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(f) The Company will not be obligated to cause any
registration statement to become effective under this Section 1.1 at any time
if, in the good faith judgment of the Company, there is a material development
relating to the condition (financial or other) of the Company that has not been
disclosed to the general public and an officer of the Company certifies to the
holders of the New Registrable Securities or Old Registrable Securities
(whichever shall have initiated such registration) that a resolution has been
adopted by the Company's Board of Directors, after consultation with counsel,
recognizing such development and concluding that under such circumstances it
would be in the Company's best interest not to file such registration statement;
provided that the aggregate period of delay under this Section 1.1(f), when
combined with the aggregate period of any suspension under Section 3 hereof, may
not exceed, in any twelve-month period, more than 90 days unless the holders of
at least 67% of the New Registrable Securities or Old Registrable Securities
(whichever shall have initiated such registration) for which registration has
been requested under this Section 1.1 consent in writing to a longer delay of up
to an additional 90 days.
1.2 INCIDENTAL REGISTRATION.
(a) Each time the Company shall determine to proceed with the
actual preparation and filing of a registration statement under the Securities
Act in connection with the proposed offer and sale for cash of any of its
securities by it or any of its security holders (other than a registration
statement on a form that does not permit the inclusion of shares by its security
holders, but including a registration statement being prepaid and filed at the
request of holders of Registrable Securities pursuant to Section 1.1 hereof),
the Company will give written notice of its determination to all holders of
Registrable Securities (other than any such holders who have been afforded the
opportunity to include all of their Registrable Securities in such registration
statement pursuant to the exercise of demand registration rights under Section
1.1 hereof). Upon the written request of a holder of any Registrable Securities
given within 30 days after receipt of any such notice from the Company, the
Company will, except as hereinafter provided, cause all such Registrable
Securities, the holders of which have so requested registration thereof, to be
included in such registration statement, all to the extent requisite to permit
the sale or other disposition by the prospective seller or sellers of the
Registrable Securities to be so registered; provided, however, that nothing
herein shall prevent the Company from, at any time, abandoning or delaying any
such registration initiated by it; provided further, however, that if the
Company determines not to proceed with a registration after the registration
statement has been filed with the SEC and the Company's decision not to proceed
is primarily based upon the anticipated public offering price of the securities
to be sold by the Company, the Company shall promptly complete the registration
for the benefit of those selling security holders who wish to proceed with a
public offering of their securities and who bear all expenses in excess of
$40,000 incurred by the Company as the result of such registration after the
Company has decided not to proceed.
(b) If any registration pursuant to this Section 1.2 shall be
underwritten in whole or in part, the Company may require that the Registrable
Securities requested for inclusion pursuant to this Section 1.2 be included in
the underwriting on the same terms and conditions as the securities otherwise
being sold through the underwriters.
(c) If an offering covered by a request for registration under
this Section 1.2 is underwritten in whole or in part and the managing
underwriter of such offering furnishes a
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written opinion that the total number of securities proposed to be sold in such
offering exceeds the maximum number of securities (as specified in such opinion)
which can be marketed at a price reasonably related to the then current market
value of such securities and without materially and adversely affecting such
offering, then the number of securities to be sold by each prospective seller
(including the Company) in the offering shall be reduced as follows: first, the
number of securities proposed to be registered by persons other than the Company
having no registration rights shall be reduced, pro rata, to zero, if necessary;
second, the number of securities proposed to be registered by the Company (if
the Company is not the initiator of the registration) shall be reduced to zero,
if necessary; third, the number of Registrable Securities and other securities
having similar incidental registration rights proposed to be registered pursuant
to this Section 1.2 or pursuant to the exercise of such similar registration
rights shall be reduced, pro rata, to zero, if necessary; and fourth, the number
of securities proposed to be registered by the Company (if the Company is the
initiator of the registration) or by any other persons requesting such
registration pursuant to the exercise of demand registration rights (if the
Company is not the initiator of the registration), including without limitation
holders of Registrable Securities requesting such registration pursuant to the
exercise of demand registration rights under Section 1.1 hereof, shall be
reduced, pro rata. Those Registrable Securities which are thus excluded from the
underwritten public offering shall be withheld from the market by the holders
thereof for a period, not to exceed 90 days, which the managing underwriter
reasonably determines is necessary in order to effect the underwritten public
offering.
2. REGISTRATION PROCEDURES. If and whenever the Company is required by
the provisions of Section 1.1 or 1.2 hereof to effect the registration of
Registrable Securities under the Securities Act, the Company will:
(a) prepare and file with the SEC a registration statement
with respect to such securities, and use all commercially reasonable efforts to
cause such registration statement to become and remain effective for such period
as may be reasonably necessary to effect the sale of such securities, not to
exceed nine months;
(b) prepare and file with the SEC such amendments to such
registration statement and supplements to the prospectus contained therein as
may be necessary to keep such registration statement effective for such period
as may be reasonably necessary to effect the sale of such securities, not to
exceed nine months;
(c) furnish to the security holders participating in such
registration and to the underwriters of the securities being registered such
reasonable number of copies of the registration statement, preliminary
prospectus, final prospectus and such other documents as such security holders
or underwriters may reasonably request in order to facilitate the public
offering of such securities;
(d) use all commercially reasonable efforts to register or
qualify the securities covered by such registration statement under such state
securities or blue sky laws of such jurisdictions as such participating holders
may reasonably request in writing within 20 days following the original filing
of such registration statement, except that the Company shall not for
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any purpose be required to execute a general consent to service of process or to
qualify to do business as a foreign corporation in any jurisdiction wherein it
is not so qualified;
(e) notify the security holders participating in such
registration, promptly after it shall receive notice thereof, of the time when
such registration statement has become effective or a supplement to any
prospectus forming a part of such registration statement has been filed;
(f) notify such holders promptly of any request by the SEC for
the amending or supplementing of such registration statement or prospectus or
for additional information;
(g) prepare and file with the SEC, promptly upon the request
of any such holder, any amendments or supplements to such registration statement
or prospectus which, in the opinion of counsel for such holder (and concurred in
by counsel for the Company), is required under the Securities Act or the rules
and regulations thereunder in connection with the distribution of securities by
such holder;
(h) prepare and promptly file with the SEC and promptly notify
such holders of the filing of such amendment or supplement to such registration
statement or prospectus as may be necessary to correct any statements or
omissions if, at the time when a prospectus relating to such securities is
required to be delivered under the Securities Act, any event shall have occurred
as the result of which any such prospectus or any other prospectus as then in
effect would include an untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein, in the light of the
circumstances in which they were made, not misleading;
(i) advise such holders, promptly after it shall receive
notice or obtain knowledge thereof, of the issuance of any stop order by the SEC
suspending the effectiveness of such registration statement or the initiation or
threatening of any proceeding for that purpose and promptly use its best efforts
to prevent the issuance of any stop order or to obtain its withdrawal if such
stop order should be issued;
(j) not file any amendment or supplement to such registration
statement or prospectus to which a majority in interest of such holders shall
have reasonably objected on the grounds that such amendment or supplement does
not comply in all material respects with the requirements of the Securities Act
or the rules and regulations thereunder, after having been furnished with a copy
thereof at least five business days prior to the filing thereof, unless in the
opinion of counsel for the Company the filing of such amendment or supplement is
reasonably necessary to protect the Company from any liabilities under any
applicable federal or state law and such filing will not violate applicable law;
and
(k) at the request of any such holder, furnish: (i) an
opinion, dated as of the closing date, of the counsel representing the Company
for the purposes of such registration, addressed to the underwriters, if any,
and to the holder or holders making such request, covering such matters as such
underwriters and holder or holders may reasonably request; and (ii) letters
dated as of the effective date of the registration statement and as of the
closing date, from the independent certified public accountants of the Company,
addressed to the underwriters, if any,
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and to the holder or holders making such request, covering such matters as such
underwriters and holder or holders may reasonably request.
3. SUSPENSION OF RESALES. The Company shall be entitled to suspend the
use of the prospectus forming the part of any registration statement which has
theretofore become effective at any time if, in the good faith judgment of the
Company, there is a material development relating to the condition (financial or
other) of the Company that has not been disclosed to the general public and the
Chief Executive Officer and Chief Financial Officer of the Company certifies in
writing to the holders of the Registrable Securities included in such
registration statement and not previously sold thereunder that, after
consultation with counsel, such officers have reasonably concluded that under
such circumstances it would be in the Company's best interest to suspend the use
of such prospectus; provided that the aggregate period of suspension under this
Section 3, when combined with the aggregate period of any delay under Section
1.1(f) hereof, may not exceed, in any twelve-month period, more than 90 days
unless the holders of at least 67% of the Registrable Securities included in
such registration statement and not previously sold thereunder consent in
writing to a longer suspension of up to an additional 90 days. Each holder of
Registrable Securities included in any such registration statement and not
previously sold thereunder agrees that upon its receipt of such written
certification, it shall immediately discontinue the sale of any Registrable
Securities pursuant to such registration statement until such holder has
received copies of the supplemented or amended prospectus referred to in Section
2(h) hereof or until such holder is advised in writing that the use of the
prospectus forming a part of such registration statement may be resumed and has
received copies of any additional or supplemental filings that are incorporated
by reference in such prospectus (provided that in no event shall any such holder
be precluded hereby from the sale of any Registrable Securities pursuant to such
registration statement for longer than the period that the Company is permitted
to suspend the use of the prospectus forming a part of such registration
statement as provided above). In addition, each such holder agrees that it will
either (i) destroy any prospectuses, other than permanent file copies, then in
such holder's possession which have been replaced by the Company with more
recently dated prospectuses or (ii) deliver to the Company all copies, other
than permanent file copies, then in such holder's possession of the prospectus
covering such Registrable Securities that was current at the time of receipt of
the aforesaid written certification.
4. PROVISION BY HOLDERS OF CERTAIN INFORMATION IN CONNECTION WITH
REGISTRATION STATEMENT. No holder may include any of its Registrable Securities
in a registration statement pursuant to this Agreement unless and until such
holder furnishes to the Company in writing, within 20 days after receipt of a
request therefor, the information specified in Item 507 or 508, as applicable,
of Regulation S-K promulgated under the Securities Act for use in connection
with such registration statement or the prospectus or preliminary prospectus
included therein. Each selling holder agrees to promptly furnish additional
information required to be disclosed in order to make the information previously
furnished to the Company by such holder not materially misleading.
5. EXPENSES. With respect to each registration requested pursuant to
Section 1.1 hereof (except as otherwise provided in such Section with respect to
registrations voluntarily terminated at the request of the requesting security
holders) and with respect to each inclusion of Registrable Securities in a
registration statement pursuant to Section 1.2 hereof (except as
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otherwise provided in Section 1.2 with respect to registrations initiated by the
Company but with respect to which the Company has determined not to proceed),
the Company shall bear the following fees, costs and expenses: all registration,
filing and NASD fees, printing expenses, fees and disbursements of counsel and
accountants for the Company, fees and disbursements of counsel for the
underwriter or underwriters of such securities (if the Company and/or selling
security holders are required to bear such fees and disbursements), fees and
disbursements of one special counsel for the selling security holders, all
internal Company expenses, all legal fees and disbursements and other expenses
of complying with state securities or blue sky laws of any jurisdictions in
which the securities to be offered are to be registered or qualified, and the
premiums and other costs of policies of insurance against liability (if any)
arising out of such public offering. Any other fees and disbursements of counsel
and accountants for the selling security holders, and all underwriting discounts
and commissions and transfer taxes relating to the shares included in the
offering by the selling security holders, and any other expenses incurred by the
selling security holders not expressly included above, shall be borne by the
selling security holders.
6. INDEMNIFICATION. In the event that any Registrable Securities are
included in a registration statement under Section 1.1 or 1.2 hereof:
(a) The Company will indemnify and hold harmless each holder
of Registrable Securities which are included in a registration statement
pursuant to the provisions of Section 1, its directors and officers, and any
underwriter (as defined in the Securities Act) for such holder and each person,
if any, who controls such holder or such underwriter within the meaning of the
Securities Act, from and against, and will reimburse such holder and each such
director, officer, underwriter and controlling person with respect to, any and
all loss, damage, liability, cost and expense to which such holder or any such
director, officer, underwriter or controlling person may become subject under
the Securities Act or otherwise, insofar as such losses, damages, liabilities,
costs or expenses are caused by any untrue statement or alleged untrue statement
of any material fact contained in such registration statement, any prospectus
contained therein or any amendment or supplement thereto, or arise out of or are
based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances in which they were made, not misleading; provided,
however, that the Company will not be liable in any such case to the extent that
any such loss, damage, liability, cost or expense arises out of or is based upon
an untrue statement or alleged untrue statement or omission or alleged omission
so made in reliance upon and in strict conformity with information furnished by
such holder, director, officer, underwriter or controlling person in writing
specifically for use in the preparation thereof.
(b) Each holder of Registrable Securities which are included
in a registration pursuant to the provisions of Section 1 will indemnify and
hold harmless the Company, its directors and officers, any underwriter (as
defined in the Securities Act) for the Company and each person, if any, who
controls the Company or such underwriter within the meaning of the Securities
Act, from and against, and will reimburse the Company and each such director,
officer, underwriter and controlling person with respect to, any and all loss,
damage, liability, cost or expense to which the Company or any such director,
officer, underwriter or controlling person may become subject under the
Securities Act or otherwise, insofar as such losses, damages, liabilities, costs
or expenses are caused by any untrue or alleged untrue statement of
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any material fact contained in such registration statement, any prospectus
contained therein or any amendment or supplement thereto, or arise out of or are
based upon the omission or the alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances in which they were made, not misleading, in each case
to the extent, but only to the extent, that such untrue statement or alleged
untrue statement or omission or alleged omission was so made in reliance upon
and in strict conformity with written information furnished by such holder
specifically for use in the preparation thereof; provided, however, that the
obligations of any such holder under this Section 6(b) shall be limited to an
amount equal to the proceeds to such holder of the Registrable Securities sold
by it in the offering, unless such loss, damage, liability, cost or expense
resulted from such holder's intentionally fraudulent misconduct.
(c) Promptly after receipt by an indemnified party pursuant to
the provisions of paragraph (a) or (b) of this Section 6 of notice of the
commencement of any action involving the subject matter of the foregoing
indemnity provisions, such indemnified party will, if a claim thereof is to be
made against the indemnifying party pursuant to the provisions of said paragraph
(a) or (b), promptly notify the indemnifying party of the commencement thereof
(provided that failure to give such prompt notice shall not limit the
indemnification obligations of the indemnifying party hereunder except to the
extent that the delay in giving, or failure to give, such notice has an adverse
effect on the ability of the indemnifying party to defend against the action,
and provided further that the failure to give such prompt notice shall not
relieve the indemnifying party from any liability which it may have to any
indemnified party otherwise than hereunder). In case such action is brought
against any indemnified party and it notifies the indemnifying party of the
commencement thereof, the indemnifying party shall have the right to participate
in, and, to the extent that it may wish, jointly with any other indemnifying
party similarly notified, to assume the defense thereof with counsel
satisfactory to such indemnified party; provided, however, if the defendants in
any action include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that there may be legal
defenses available to it and/or other indemnified parties which are different
from or additional to those available to the indemnifying party, or if there is
a conflict of interest which would prevent counsel for the indemnifying party
from also representing the indemnified party, the indemnified party or parties
shall have the right to select separate counsel to participate in the defense of
such action on behalf of such indemnified party or parties. After notice from
the indemnifying party to such indemnified party of its election so to assume
the defense thereof, the indemnifying party will not be liable to such
indemnified party pursuant to the provisions of said paragraph (a) or (b) for
any legal or other expense subsequently incurred by such indemnified party in
connection with the defense thereof other than reasonable costs of
investigation, unless (i) the indemnified party shall have employed counsel in
accordance with the proviso of the preceding sentence, (ii) the indemnifying
party shall not have employed counsel satisfactory to the indemnified party to
represent the indemnified party within a reasonable time after the notice of the
commencement of the action, or (iii) the indemnifying party has authorized the
employment of counsel for the indemnified party at the expense of the
indemnifying party.
7. EXCEPTIONS TO REGISTRATION OBLIGATIONS. Notwithstanding anything to
the contrary stated in this Agreement, the Company shall not be obligated to
honor a request from any holder of Registrable Securities to register all or any
portion thereof if the Registrable Securities held by such holder and requested
to be included in a registration statement pursuant to this Agreement
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are otherwise eligible for immediate sale by such holder under Rule 144(k) (or
any similar rule then in effect) promulgated under the Securities Act.
8. COVENANT NOT TO EXERCISE REGISTRATION RIGHTS UNDER OLD REGISTRATION
STATEMENT. Each of the holders of the Old Registrable Securities agrees on
behalf of itself and any future assignees or transferees not to exercise any
registration rights under the Amended and Restated Registration Rights Agreement
dated as of December 28, 1995, as amended.
9. DEFINITIONS. Each of the capitalized terms used herein shall have
the meaning given to such terms as defined elsewhere in this Agreement or as set
forth below:
(a) "New Registrable Securities" shall mean (i) any shares of
Common Stock which have been issued or are issuable upon the conversion of the
Convertible Notes, (ii) any shares of Common Stock which have been issued or are
issuable upon exercise of the Note Holder Warrants and the M&C Warrant, and
(iii) any shares of Common Stock issued in exchange or substitution for, or in a
stock split or reclassification of, or as a stock dividend or other distribution
on, or otherwise in respect of, any New Registrable Securities (other than any
such shares that have been theretofore registered under the Securities Act and
sold or that have been theretofore sold in an open market transaction pursuant
to Rule 144 promulgated under the Securities Act). Nothing in this Agreement
shall be deemed to require the Company to register any Convertible Notes or Note
Holder Warrants, it being understood that the registration rights granted by
Section 1 hereof relate only to shares of Common Stock.
(b) "Old Convertible Notes" shall mean the Convertible
Subordinated Debenture in the principal amount of $4 million, dated November 10,
2000, payable to St. Xxxx Venture Capital VI, LLC on November 10, 2005.
(c) "Old Registrable Securities" shall mean (i) any shares of
Common Stock which have been issued or are issuable upon the exercise of the Old
Warrants, (ii) any shares of Common Stock which have been issued upon the
conversion of the Old Preferred Stock, (iii) any shares of Common Stock that
have been issued or are issuable upon conversion of the Old Convertible Notes,
and (iv) any shares of Common Stock issued in exchange or substitution for, or
in a stock split or reclassification of, or as a stock dividend or other
distribution on, or otherwise in respect of, any Old Registrable Securities
(other than any such shares that have been theretofore registered under the
Securities Act and sold or that have been theretofore sold in an open market
transaction pursuant to Rule 144 promulgated under the Securities Act). Nothing
in this Agreement shall be deemed to require the Company to register any Old
Warrants or Old Convertible Notes, it being understood that the registration
rights granted by Section 1 hereof relate only to shares of Common Stock.
(d) "Registrable Securities" shall mean the New Registrable
Securities and the Old Registrable Securities.
(e) "Old Preferred Shareholders" shall mean the holders of the
shares of Common Stock issued upon conversion of the various series of
convertible preferred stock of the Company heretofore issued and converted in
full who are affiliates of the Company as of the date
10
of this Agreement, who are St. Xxxx Fire and Marine Insurance Co., Xxxxxxx X.
Xxxx and Consumer Venture Partners II, L.P.
(f) "Old Preferred Stock" shall mean shares of Common Stock
issued upon conversion of the various series of convertible preferred stock of
the Company heretofore issued and converted in full held by the Old Preferred
Shareholders as set forth on Schedule B.
(g) "Old Warrants" shall mean the Warrant Agreements as set
forth on Schedule A.
(h) "Old Warrant Holders" shall mean the holders of the Old
Warrants as set forth on Schedule A.
(i) "SEC" shall mean the Securities and Exchange Commission.
(j) "Securities Act" shall mean the Securities Act of 1933, as
amended.
10. NOTICE. All notices, demands, requests and other communications
given to or made upon a party pursuant to this Agreement shall be in writing and
shall be mailed (by certified mail, postage prepaid and return receipt
requested), sent by overnight courier, telecopied or hand delivered to such
party:
(a) in the case of any holder of Registrable Securities, at
the address of such holder specified below its signature at the end of this
Agreement or at such other address as such holder may specify by written notice
to the Company, or
(b) in the case of the Company, at the address specified below
its signature at the end of this Agreement or at such other address as the
Company may specify by written notice to the holders of Registrable Securities.
All such notices, demands, requests and communications shall be effective and
deemed to have been given and received (i) if sent by certified mail, postage
prepaid and return receipt requested, when received or three business days after
mailing, whichever first occurs, (ii) if sent by overnight courier, one business
day after delivery to such courier, (iii) if telecopied, when transmitted and a
confirmation is received, provided the same is on a business day and, if not, on
the next business day, or (iv) if hand delivered, upon delivery, provided that
the same is on a business day and, if not, on the next business day.
11. CHANGES, WAIVERS, ETC. This Agreement may be amended or modified
only by a written instrument executed by (i) the Company, (ii) the holders of at
least 67% of the Old Registrable Securities and (iii) the holders of at least
67% of the New Registrable Securities.
12. PARTIES IN INTEREST. All the terms and provisions of this Agreement
shall be binding upon and inure to the benefit of and be enforceable by the
respective successors and assigns of the parties hereto, whether so expressed or
not.
11
13. CHOICE OF LAW. The internal laws of Minnesota shall govern the
validity of this Agreement, the construction of its terms and the interpretation
of the rights and duties of the parties hereunder.
14. COUNTERPARTS. This Agreement may be executed concurrently in two or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. This Agreement shall be
enforceable against, and binding upon, each party that duly executes and
delivers this Agreement, regardless of whether any other party executes this
Agreement.
15. SEVERABILITY. Should any one or more of the provisions of this
Agreement or of any agreement entered into pursuant to this Agreement be
determined to be illegal or unenforceable, all other provisions of this
Agreement and of each other agreement entered into pursuant to this Agreement,
shall be given effect separately from the provision or provisions determined to
be illegal or unenforceable and shall not be affected thereby.
16. FORCE OF AMENDMENT. As to all parties hereto, this Agreement shall
supercede all other registration rights agreements to which any of the parties
hereto and the Company are also parties. Each of the parties hereto agrees that
it shall not approve, authorize, ratify or otherwise consent or agree to the
exercise of any registration rights under any other agreement to which the
Company is a party.
IN WITNESS WHEREOF, the each of the undersigned has caused this
Agreement to be executed by its duly authorized representative.
SELECT COMFORT CORPORATION,
a Minnesota corporation
By: /s/ Xxxx X. Xxxxxxx
---------------------------------------
Its: Senior Vice President
-------------------------------------
NOTE HOLDERS:
------------
ST. XXXX VENTURE CAPITAL VI, LLC
By: SPVC MANAGEMENT VI, LLC
Its: Managing Member
By: /s/ Xxxxxxx X. Xxxx
---------------------------------------
Name: Xxxxxxx X. Xxxx
--------------------------------
Title: Managing director
-------------------------------
Address: 00000 Xxxxxx Xxxxx
Xxxxx 000
Xxxx Xxxxxxx, XX 00000
Telephone No.: 000-000-0000
Fax No.: 000-000-0000
12
PRINTWARE, INC.
By: /s/ Xxxx Xxxxxxxxxxx
------------------------------------------------------
Name: Xxxx Xxxxxxxxxxx
Its: Chief Financial Officer
Address: 0000 Xxxxx Xxxxxxxxxx Xxxx
Xx. Xxxx, XX 00000
Telephone No.: 000-000-0000
Fax No.: 000-000-0000
/s/ Xxxx X. Xxxxxx
---------------------------------------------------------
Xxxx X. Xxxxxx
Address: 0000 Xxxxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxxxxxx, XX 00000
Telephone No.: 000-000-0000
Fax No.:
----------------------------------
/s/ Xxxxxx X. Xxxxxxx
---------------------------------------------------------
Xxxxxx X. Xxxxxxx
Address: 0000 Xxxxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxxxxxx, XX 00000
Telephone No.: 000-000-0000
Fax No.:
----------------------------------
LIBERTY DIVERSIFIED
By: /s/ Xxxxx Xxxxxx
------------------------------------------------------
Its: Executive Vice President
-----------------------------------------------------
Address: 0000 Xxxxx Xxxxxxx 000
Xxxxxxxxxxx, XX 00000
Telephone No.: 000-000-0000
Fax No.: 000-000-0000
13
STANDARD FUSEE CORPORATION
By: /s/ C. Xxx Xxxxxxxxxx
------------------------------------------------------
Its: President and CEO
-----------------------------------------------------
Address: 00000 Xx. Xxxxxxx'x Xxxx
X.X. Xxx 0000
Xxxxxx, XX 00000
Telephone No.: 0-000-000-0000
Fax No.: 000-000-0000
/s/ X.X. Xxxxxx
---------------------------------------------------------
X .X. Xxxxxx
Address: 00 Xxxx 00xx Xxxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000
Telephone No.: 212-683-2626 ext. 22
Fax No.: 000-000-0000
/s/ Xxxxxx X. Xxxxxx
---------------------------------------------------------
Xxxxxx X. Xxxxxx
Address: 00 Xxxxxx Xxx
Xxxxxxxxx, XX 00000
Telephone No.: 000-000-0000
Fax No.: 000-000-0000
/s/ Xxxxx X. Xxxxxx
----------------------------------------------------------
Xxxxx X. Xxxxxx
Address: 00 Xxxxxxxxx Xxxxx
Xxxxxx, XX 00000
Telephone No.: 000-000-0000 (home)
Telephone No.: 000-000-0000 (office)
Fax No.: 000-000-0000
/s/ Xxxx-Xxxxxx Xxxxxxx
---------------------------------------------------------
Xxxx-Xxxxxx Xxxxxxx
Address: 00 Xxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Telephone No.: 000-000-0000 (home)
Telephone No.: 000-000-0000 (office)
Fax No.: 000-000-0000
14
BFSUS SPECIAL OPPORTUNITIES TRUST
PLC
By: /s/ Xxxxxxx Xxxxxxxxx
------------------------------------------------------
Its: Director
-----------------------------------------------------
Address: Attn: Xxxxxx X. Xxxxxxx, Xx. V.P.
Renaissance Capital Group, Inc.
0000 Xxxxx Xxxxxxx Xxxxxxxxxx
Xxxxx 000-XX 00
Xxxxxx, XX 00000
Telephone No.: 000-000-0000
Fax No.: 000-000-0000
RENAISSANCE US GROWTH & INCOME
TRUST PLC
By: /s/ Xxxxxxx Xxxxxxxxx
------------------------------------------------------
Its: Director
-----------------------------------------------------
Address: Attn: Xxxxxx X. Xxxxxxx, Xx. V.P.
Renaissance Capital Group, Inc.
0000 Xxxxx Xxxxxxx Xxxxxxxxxx
Xxxxx 000-XX 00
Xxxxxx, XX 00000
Telephone No.: 000-000-0000
Fax No.: 000-000-0000
BAYSTAR CAPITAL, L.P.
By: /s/ Xxxxxxx X. Xxxx
------------------------------------------------------
Its: Managing Director
-----------------------------------------------------
Address: 0000 Xxxx Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxx, XX 00000
Telephone No.: 000-000-0000
Fax No.: 000-000-0000
15
BAYSTAR INTERNATIONAL, LTD.
By: /s/ Xxxxxxx X. Xxxx
------------------------------------------------------
Its: Managing Director
-----------------------------------------------------
Address: 0000 Xxxx Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxx, XX 00000
Telephone No.: 000-000-0000
Fax No.: 000-000-0000
OLD PREFERRED SHAREHOLDERS:
--------------------------
CONSUMER VENTURE PARTNERS II,
L.P., a Delaware Limited Partnership
By: Consumer Venture Associates II, L.P.,
Its General Partner
By: /s/ Xxxxxxxxxxx X. Xxxxxxx
------------------------------------------------------
Its General Partner
Address: 0 Xxxxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxxxxx 00000
ST. XXXX FIRE AND MARINE
INSURANCE CO., a Minnesota corporation
By: /s/ Xxxxxxx X Xxxx
------------------------------------------------------
Name: Xxxxxxx X. Xxxx
-----------------------------------------------
Title: Authorized Representative
----------------------------------------------
Address: c/o St. Xxxx Venture Capital
00000 Xxxxxx Xxxxx, Xxxxx 000
Xxxx Xxxxxxx, XX 00000
Telephone No.: 000-000-0000
Fax No.: 000-000-0000
/s/ Xxxxxxx X. Xxxx
---------------------------------------------------------
Xxxxxxx X. Xxxx
Address: St. Xxxx Venture Capital
00000 Xxxxxx Xxxxx
Xxxxx 000
Xxxx Xxxxxxx, XX 00000
Telephone No.: 000-000-0000
Fax No.: 000-000-0000
16
ST. XXXX VENTURE CAPITAL IV, LLC
By: /s/ Xxxxxxx X. Xxxx
-----------------------------------------------------
Its: Managing Member
-----------------------------------------------------
Address: 00000 Xxxxxx Xxxxx
Xxxxx 000
Xxxx Xxxxxxx, XX 00000
Telephone No.: 000-000-0000
Fax No.: 000-000-0000
CHERRY TREE VENTURES IV LIMITED PARTNERSHIP
By: /s/ Xxxxxx Xxxxxx
------------------------------------------------------
Its: General Partner
-----------------------------------------------------
Address: 0000 Xxxxxx Xxxxxx X., #000
Xxxxx, XX 00000
NORWEST EQUITY PARTNERS IV,
a Minnesota Limited Partnership
By: Itasca Partners
Its: General Partner
By: /s/ Xxxx X. Xxxxxx
------------------------------------------------------
Its: Partner
NORWEST EQUITY PARTNERS V,
a Minnesota Limited Partnership
By: Itasca Partners V
Its: General Partner
By: /s/ Xxxx X. Xxxxxx
------------------------------------------------------
Its: Partner
KCB BV, L.P.
a California Limited Partnership
By: KCB BV, INC.
Its: General Partner
By:
-----------------------------------------------------
Xxxxxx X. Xxxxx, President
17
OLD WARRANT HOLDERS:
-------------------
ST. XXXX VENTURE CAPITAL IV, LLC
By: /s/ Xxxxxxx X. Xxxx
------------------------------------------------------
Its: Managing Member
-----------------------------------------------------
Address: 00000 Xxxxxx Xxxxx
Xxxxx 000
Xxxx Xxxxxxx, XX 00000
Telephone No.: 000-000-0000
Fax No.: 000-000-0000
APEX INVESTMENT FUND, L.P.
By: Apex Management Partnership,
its General Partner
By: /s/ Xxxxxx Xxxxxxxxx
------------------------------------------------------
Its: General Partner
-----------------------------------------------------
Address: 000 Xxxx Xxxxxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, XX 00000
Telephone No.: 000-000-0000
Fax No.: 000-000-0000
---------------------------------------------------------
Xxxxxxxx X. Xxxxxxx
Address: Ashford Capital Management
0000 Xxxxxxx Xxxx
Xxxxxxxx X, Xxxxx 000
Xxxxxxxxxx, XX 00000
Telephone No.: 000-000-0000
Fax No.: 000-000-0000
BAYVIEW INVESTORS, LTD.
By:
------------------------------------------------------
Its:
-----------------------------------------------------
Address: c/x Xxxxxxxxx Xxxxxxxx & Co.
000 Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
Attn: Xxxxxxxx Xxxxxxxx
Telephone No.: 000-000-0000
Fax No.: 000-000-0000
18
XXXX XXXXX & SONS EMPLOYEES
VENTURE FUND LP
By:
------------------------------------------------------
Its:
-----------------------------------------------------
Address: Mail Stop 22
0 Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxx, XX 00000-0000
Telephone No.:
----------------------------
Fax No.:
----------------------------------
/s/ Xxxxxxx X. Xxx
---------------------------------------------------------
Xxxxxxx X. Xxx
Address: c/o St. Xxxx Venture Capital
00000 Xxxxxx Xxxxx
Xxxxx 000
Xxxx Xxxxxxx, XX 00000
Telephone No.: 000-000-0000
Fax No.: 000-000-0000
---------------------------------------------------------
Xxxx Xxxxxxx
Address: x/x Xxxxxx
X. X. Xxx 00000
Xxxxxxx, Xxxxx Xxxxxx 31311
Telephone No.:
----------------------------
Fax No.:
----------------------------------
/s/ Xxxxxxx X. Xxxxxx
---------------------------------------------------------
Xxxxxxx X. Xxxxxx
Address: c/o St. Xxxx Venture Capital
00000 Xxxxxx Xxxxx
Xxxxx 000
Xxxx Xxxxxxx, XX 00000
Telephone No.: 000-000-0000
Fax No.: 000-000-0000
19
XXXXXXXX INVESTMENTS
By:
------------------------------------------------------
Its:
-----------------------------------------------------
Address: 0000 Xxxxxxx Xxxxxx
00 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxxxx, XX 00000-0000
Telephone No.:
----------------------------
Fax No.:
----------------------------------
H & Q LONDON VENTURES
By:
------------------------------------------------------
Its:
-----------------------------------------------------
Address: Xxx Xxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000-0000
Telephone No.: 000-000-0000
Fax No.:
----------------------------------
H & Q SELECT COMFORT INVESTORS L.P.
By:
------------------------------------------------------
Its:
-----------------------------------------------------
Address: Xxx Xxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
Telephone No.: 000-000-0000
Fax No.:
----------------------------------
---------------------------------------------------------
Xxxx Xxxxxxx
Address: c/o X. Xxxx Price
000 Xxxx Xxxxx Xxxxxx
Xxxxxxxxx, XX 00000-0000
Telephone No.:
Fax No.: 000-000-0000
20
/s/ Xxxxxxx X. Xxxx
---------------------------------------------------------
Xxxxxxx X. Xxxx
Address: St. Xxxx Venture Capital
00000 Xxxxxx Xxxxx
Xxxxx 000
Xxxx Xxxxxxx, XX 00000
Telephone No.: 000-000-0000
Fax No.: 000-000-0000
/s/ Xxxxx X. Xxxxxx
---------------------------------------------------------
Xxxxx X. Xxxxxx
Address: 0000 Xxxxxxx Xxxx
Xxxxxxxxxxxx, XX 00000-0000
Telephone No.: 000-000-0000
Fax No.: 000-000-0000
/s/ Xxxxxx Xxxxxx
---------------------------------------------------------
Xxxxxx Xxxxxx
Address: c/o X. Xxxx Price
000 Xxxx Xxxxx Xxxxxx
Xxxxxxxxx, XX 00000-0000
Telephone No.:
Fax No.: 000-000-0000
---------------------------------------------------------
Xxxxx X. Xxxxx
Address: Kelen Ventures
0000 Xxxxxxx Xxxx.
Xxxxx 0000
Xxxxxx Xxxxxx, XX 00000-0000
Telephone No.:
----------------------------
Fax No.:
----------------------------------
XXXXX LIMITED PARTNERSHIP
By:
------------------------------------------------------
Its:
-----------------------------------------------------
Address: 0000 Xxxxx Xxxxxx, Xxxxx 000
Xxx Xxxxxxxxx, XX 00000
Telephone No.:
----------------------------
Fax No.:
----------------------------------
21
XXXXXXXXXX ASSOCIATES 1992, L.P.
By:
------------------------------------------------------
Its:
-----------------------------------------------------
Address: 000 Xxxxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
Telephone No.:
----------------------------
Fax No.:
----------------------------------
MVP II AFFILIATES FUND, L.P.
By:
------------------------------------------------------
Its:
-----------------------------------------------------
Address: Xxxxxxxxx 000 Xxxxxx, Xxxxx 000
000 Xxxx Xxxx Xxxx
Xxxxxxxxx, XX 00000
Telephone No.: 000-000-0000
Fax No.: 000-000-0000
MARQUETTE VENTURE PARTNERS II L.P.
By:
------------------------------------------------------
Its:
-----------------------------------------------------
Address: Xxxxxxxxx 000 Xxxxxx, Xxxxx 000
000 Xxxx Xxxx Xxxx
Xxxxxxxxx, XX 00000
Telephone No.: 000-000-0000
Fax No.: 000-000-0000
---------------------------------------------------------
Xxxxxx Xxxxxxx
Address: c/o Morgan Xxxxxxx & Co.
0000 Xxxxxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000
Telephone No.: 000-000-0000
Fax No.: 000-000-0000
22
THE PRODUCTIVITY FUND II, L.P.
By: /s/ Xxxx Xxxxxxx
------------------------------------------------------
Its:
-----------------------------------------------------
Address: 000 Xxxx Xxxxxxxxxx Xxxxxx
Xxxxx 0000
Xxxx: Xxxx Xxxxxxx
Xxxxxxx, XX 00000
Telephone No.: 000-000-0000
Fax No.: 000-000-0000
XXXXX XXXXXX INCORPORATED,
CUSTODIAN OF XXXX X. XXXXX
DECEDENT XXX
By: /s/ Xxxxx X. Xxxxxxxx
------------------------------------------------------
Its:
-----------------------------------------------------
Address: c/o Xxxxx Xxxxxxxx
00000 Xxxxxxxxx Xxx
Xxxxxxxxxx, XX 00000
Telephone No.: 000-000-0000
Fax No.:
/s/ Xxxx X. Xxxxxxxxx
---------------------------------------------------------
Xxxx X. Xxxxxxxxx
Address: 0000 X. Xxxx xx xxx Xxxxx Xxxx
Xxxxxxxxxxx, XX 00000
Telephone No.: 000-000-0000
Fax No.:
----------------------------------
---------------------------------------------------------
Xxxxx X. Xxxx
Address: 00 Xxxxxxxxx Xxxx
Xxx Xxxx, XX 00000
Telephone No.:
Fax No.:
23
---------------------------------------------------------
Xxxxxxx X. Xxxxxxx
Address: St. Xxxx Venture Capital
00000 Xxxxxx Xxxxx
Xxxxx 000
Xxxx Xxxxxxx, XX 00000
Telephone No.: 000-000-0000
Fax No.: 000-000-0000
ST. XXXX FIRE AND MARINE
INSURANCE CO., a Minnesota corporation
By: /s/ Xxxxxxx X. Xxxx
------------------------------------------------------
Name: Xxxxxxx X. Xxxx
-----------------------------------------------
Title: Authorized Representative
----------------------------------------------
Address: c/o St. Xxxx Venture Capital
00000 Xxxxxx Xxxxx, Xxxxx 000
Xxxx Xxxxxxx, XX 00000
Telephone No.: 000-000-0000
Fax No.: 000-000-0000
XXXXXXXXX & COMPANY, LTD.
By:
------------------------------------------------------
Its:
-----------------------------------------------------
Address:
--------------------------------------------
--------------------------------------------
Attn: Xxxxxx Xxxxxxxxx
Telephone No.: 000-000-0000
Fax No.: 000-000-0000
24
