EXHIBIT 10.3
THIS WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF THIS
WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR APPLICABLE
STATE SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED, PLEDGED, HYPOTHECATED OR
OTHERWISE DISPOSED OF EXCEPT PURSUANT TO (1) REGISTRATION IN COMPLIANCE WITH
SUCH ACT AND SUCH STATE LAWS OR (2) AN EXEMPTION FROM SUCH REGISTRATION.
COMMON STOCK WARRANT
To Purchase 922,819 Shares of Common Stock of
SELECT COMFORT CORPORATION
September 28, 2001
THIS CERTIFIES THAT, for good and valuable consideration, the receipt of
which is hereby acknowledged, MEDALLION CAPITAL, INC. is entitled to subscribe
for and purchase from SELECT COMFORT CORPORATION, a Minnesota corporation
(herein called the "Company"), at any time from and after the date hereof
through and including September 28, 2006 (the "Expiration Date") 922,819 fully
paid and nonassessable shares of the Company's common stock at an exercise price
of $1.02 per share, subject to adjustment as provided below.
This Warrant is subject to the following provisions, terms and conditions:
1. EXERCISE.
(a) CASH EXERCISE. The rights represented by this Warrant may be
exercised by the holder hereof, in whole or in part (but not as to a
fractional share of common stock), by written notice of exercise delivered
to the Company on or before the Expiration Date and by the surrender of
this Warrant (properly endorsed if required) at the principal office of the
Company and upon payment to it by certified or cashier's check of the
purchase price for such shares.
(b) NET EXERCISE. In lieu of paying the exercise price to exercise
this Warrant pursuant to paragraph 1(a) above, the holder may elect to
receive shares of common stock equal to the value of this Warrant (or of
any portion thereof remaining unexercised) by surrender of this Warrant at
the principal office of the Company together with notice of such election,
in which event the Company shall issue to the holder a number of shares of
the Company's common stock computed using the following formula:
X = Y (A-B)
-------
A
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Where X = the number of shares of common stock to be issued to the holder.
Y = the number of shares of common stock purchasable under this
Warrant (at the date of such calculation).
A = the fair market value of one share of the Company's common
stock (at the date of such calculation).
B = Warrant exercise price (as adjusted to the date of such
calculation).
For purposes of this paragraph 1(b), fair market value of one share of the
Company's common stock shall mean:
(i) The average of the closing bid and asked prices of the common
stock on the over-the-counter market or the closing price quoted on any
exchange on which the common stock is listed, whichever is applicable, as
published in The Wall Street Journal or any other reputable publication,
for the ten (10) trading days prior to the date of determination of fair
market value; or
(ii) If the common stock is not traded over-the-counter or on an
exchange, the per share fair market value of the common stock shall be as
determined by agreement of the Company and the holder of this Warrant, or
if they cannot agree, by an independent appraiser appointed in good faith
by the Company's Board of Directors. The cost of such appraisal shall be
borne by the Company.
2. ISSUANCE OF SHARES. The Company agrees that the shares purchased hereby
shall be and are deemed to be issued to the record holder hereof as of the close
of business on the date on which this Warrant shall have been surrendered and
the payment made for such shares as aforesaid. Certificates for the shares of
stock so purchased shall be delivered to the holder hereof within a reasonable
time, not exceeding ten (10) days after the rights represented by this Warrant
shall have been so exercised, and, unless this Warrant has expired, a new
Warrant representing the number of shares, if any, with respect to which this
Warrant shall not then have been exercised shall also be delivered to the holder
hereof within such time.
3. COVENANTS OF COMPANY. The Company covenants and agrees that all shares
which may be issued upon the exercise of the rights represented by this Warrant
will, upon issuance, be duly authorized and issued, fully paid, nonassessable
and free from all liens and charges with respect to the issue thereof, and
without limiting the generality of the foregoing, the Company covenants and
agrees that it will from time to time take all such action as may be required to
assure that the par value per share of the common stock is at all times equal to
or less than the then effective purchase price per share of the common stock
issuable pursuant to this Warrant. The Company further covenants and agrees that
during the period within which the rights represented by this Warrant may be
exercised, the Company will at all times have authorized, and reserved for the
purpose of issue or transfer upon exercise of the subscription
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rights evidenced by this Warrant, a sufficient number of shares of its common
stock to provide for the exercise of the rights represented by this Warrant.
4. ANTI-DILUTION ADJUSTMENTS. The above provisions are, however, subject to
the following:
(a) In case the Company shall at any time hereafter subdivide or
combine the outstanding shares of common stock or declare a dividend
payable in common stock, the exercise price of this Warrant in effect
immediately prior to the subdivision, combination or record date for such
dividend payable in common stock shall forthwith be proportionately
increased, in the case of combination, or decreased, in the case of
subdivision or dividend payable in common stock, and each share of common
stock purchasable upon exercise of the Warrant shall be changed to the
number determined by dividing the then current exercise price by the
exercise price as adjusted after the subdivision, combination, or dividend
payable in common stock.
(b) In case the Company shall at any time after the original issuance
of this Warrant, but prior to the expiration date of this Warrant, issue
any shares of common stock for an issuance price per share (or any rights,
options, warrants, convertible notes or other instruments exercisable or
exchangeable for or convertible into shares of common stock for an
exercise, exchange or conversion price per share) which is less than the
then current exercise price per share under this Warrant, then the exercise
price per share of this Warrant shall be immediately reduced to an amount
equal to (i) the exercise price then in effect, multiplied by (ii) a
fraction,
the numerator of which shall be: an amount equal to the sum of (a) the
number of shares of the Company's common stock outstanding immediately
prior to such issuance or sale multiplied by the exercise price then in
effect, and (b) the total consideration payable to the Company upon such
issuance of sale of such shares and such purchase rights and upon the
exercise of such purchase rights,
and the denominator of which shall be the amount determined by multiplying
(aa) the number of shares of common stock outstanding immediately after
such issuance or sale plus the number of the shares of common stock
issuable upon-the exercise of any purchase rights thus issued, by (bb) the
exercise price then in effect.
If any options, warrants, conversion or purchase rights that are taken into
account in any such adjustment of the exercise price subsequently expire
without exercise, the exercise price shall be recomputed by deleting such
options or purchase rights.
In connection with any such reduction in the exercise price of this
Warrant, the number of shares purchasable under this Warrant shall be
proportionately increased, such that each share of common stock purchasable
upon exercise of this Warrant shall be changed to the number determined by
dividing the exercise price prior to such reduction by the exercise price
as adjusted. The adjustments provided for in this paragraph shall not apply
to: (i) the exercise or
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conversion after the date of this Warrant of any option, warrant,
convertible note or other security or right which was issued by the Company
prior to the issuance of this Warrant, and (ii) the grant of options to
purchase common stock to employees or directors of the Company, or to
consultants to the Company, or pursuant to the Company's employee stock
purchase plan, and the issuance of shares of common stock pursuant to the
exercise of such options.
(c) For the purposes of paragraph (b), the following provisions (A) to
(E), inclusive, shall also be applicable:
(A) Except as provided in paragraph (b) above, in case at any
time the Company shall grant (whether directly or by assumption in a
merger or otherwise) any rights to subscribe for or to purchase, or
any options for the purchase of, (1) common stock or (2) any
obligations or any shares of stock of the Company which are
convertible into or exchangeable for common stock (any of such
obligations or shares of stock being hereinafter called "Convertible
Securities") whether or not such rights or options or the right to
convert or exchange any such Convertible Securities are immediately
exercisable, and the price per share for which common stock is
issuable upon the exercise of such rights or options or upon
conversion or exchange of such Convertible Securities (determined by
dividing (aa) the total amount, if any, received or receivable by the
Company as consideration for the granting of such rights or options,
plus the minimum aggregate amount of additional consideration payable
to the Company upon the exercise of such rights or options, plus, in
the case of such rights or options which relate to Convertible
Securities, the minimum aggregate amount of additional consideration,
if any, payable upon the issue or sale of such Convertible Securities
and upon the conversion or exchange thereof, by (bb) the total maximum
number of shares of common stock issuable upon the exercise of such
rights or options or upon the conversion or exchange of all such
Convertible Securities issuable upon the exercise of such rights or
options) shall be less than the exercise price of this Warrant in
effect immediately prior to the time of the granting of such rights or
options, then the total maximum number of shares of common stock
issuable upon the exercise of such rights or options or upon
conversion or exchange of the total maximum amount of such Convertible
Securities issuable upon the exercise of such rights or options shall
(as of the date of granting of such rights or options) be deemed to
have been issued for such price per share. Except as provided in
paragraph (d) below, no further adjustments of the exercise price of
this Warrant shall be made upon the actual issue of such common stock
or of such Convertible Securities upon exercise of such rights or
options or upon the actual issue of such common stock upon conversion
or exchange of such Convertible Securities.
(B) In case the Company shall issue or sell (whether directly or
by assumption in a merger or otherwise) any Convertible Securities,
whether or not the rights to exchange or convert thereunder are
immediately exercisable, and the price per share for which common
stock is issuable upon such conversion or exchange (determined by
dividing (aa) the total amount received or receivable by the
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Company as consideration for the issue or sale of such Convertible
Securities, plus the minimum aggregate amount of additional
consideration, if any, payable to the Company upon the conversion or
exchange thereof, by (bb) the total maximum number of shares of common
stock issuable upon the conversion or exchange of all such Convertible
Securities) shall be less than the exercise price of this Warrant in
effect immediately prior to the time of such issue or sale, then the
total maximum number of shares of common stock issuable upon
conversion or exchange of all such Convertible Securities shall (as of
the date of the issue or sale of such Convertible Securities) be
deemed to be outstanding and to have been issued for such price per
share, provided that (1) except as provided in paragraph (d) below, no
further adjustments of the exercise price of this Warrant shall be
made upon the actual issue of such common stock upon conversion or
exchange of such Convertible Securities, and (2) if any such issue or
sale of such Convertible Securities is made upon exercise of any
rights to subscribe for or to purchase or any option to purchase any
such Convertible Securities for which adjustments of the exercise
price of this Warrant have been or are to be made pursuant to other
provisions of this paragraph (c), no further adjustment of the
exercise price of this Warrant shall be made by reason of such issue
or sale.
(C) In case any shares of common stock or Convertible Securities
or any rights or options to purchase any such common stock or
Convertible Securities shall be issued or sold for cash, the
consideration received therefor shall be deemed to be the amount
received by the Company therefor, without deduction therefrom of any
expenses incurred or any underwriting commissions, discounts or
concessions paid or allowed by the Company in connection therewith. In
case any shares of common stock or Convertible Securities or any
rights or options to purchase any such common stock or Convertible
Securities shall be issued or sold for a consideration other than
cash, the amount of the consideration other than cash received by the
Company shall be deemed to be the fair value of such consideration as
determined by the Board of Directors of the Company, without deducting
therefrom of any expenses incurred or any underwriting commissions,
discounts or concessions paid or allowed by the Company in connection
therewith. In case any shares of common stock or Convertible
Securities or any rights or options to purchase such common stock or
Convertible Securities shall be issued in connection with any merger
or consolidation in which the Company is the surviving corporation,
the amount of consideration therefor shall be deemed to be the fair
value as determined by the Board of Directors of the Company of such
portion of the assets and business of the non-surviving corporation or
corporations as such Board shall determine to be attributable to such
common stock, Convertible Securities, rights or options, as the case
may be. In the event of any consolidation or merger of the Company in
which the Company is not the surviving corporation or in the event of
any sale of all or substantially all of the assets of the Company for
stock or other securities of any other corporation, the Company shall
be deemed to have issued a number of shares of its common stock for
stock or securities of the other corporation computed on the basis of
the actual exchange ratio on which the transaction was predicated and
for a
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consideration equal to the fair market value on the date of such
transaction of such stock or securities of the other corporation, and
if any such calculation results in adjustment of the exercise price of
this Warrant, the determination of the number of shares of common
stock issuable upon exercise of this Warrant immediately prior to such
merger, conversion or sale, for purposes of paragraph (f) below, shall
be made after giving effect to such adjustment of the exercise price
of this Warrant.
(D) In case the Company shall take a record of the holders of its
common stock for the purpose of entitling them (1) to receive a
dividend or other distribution payable in common stock or in
Convertible Securities, or in any rights or options to purchase any
common stock or Convertible Securities, or (2) to subscribe for or
purchase common stock or Convertible Securities, then such record date
shall be deemed to be the date of the issue or sale of the shares of
common stock deemed to have been issued or sold upon the declaration
of such dividend or the making of such other distribution or the date
of the granting of such rights of subscription or purchase, as the
case may be.
(E) The number of shares of common stock outstanding at any given
time shall not include shares owned or held by or for the account of
the Company, and the disposition of any such shares shall be
considered an issue or sale of common stock for the purposes of this
paragraph (c).
(d) If (A) the purchase price provided for in any right or option
referred to in clause (A) of paragraph (c) above, or (B) the additional
consideration, if any, payable upon the conversion or exchange of
Convertible Securities referred to in clause (A) or (B) of paragraph (c)
above, or (C) the rate at which any Convertible Securities referred to in
clause (A) or (B) of paragraph (c) above are convertible into or
exchangeable for common stock shall change at any time (other than under or
by reason of provisions designed to protect against dilution), the exercise
price of this Warrant then in effect shall forthwith be increased or
decreased to such exercise price of this Warrant which would have obtained
had the adjustments made upon the issuance of such rights, options or
Convertible Securities been made upon the basis of (1) the issuance of the
number of shares of common stock theretofore actually delivered upon the
exercise of such options or rights or upon the conversion or exchange of
such Convertible Securities, and the total consideration received therefor,
and (2) the issuance at the time of such change of any such options, rights
or Convertible Securities then still outstanding for the consideration, if
any, received by the Company therefor and to be received on the basis of
such changed price; and on the expiration of any such option or right or
the termination of any such right to convert or exchange such Convertible
Securities, the exercise price of this Warrant then in effect hereunder
shall forthwith be increased to such exercise price of this Warrant which
would have obtained had the adjustments made upon the issuance of such
rights or options or Convertible Securities been made upon the basis of the
issuance of the shares of common stock theretofore actually delivered (and
the total consideration received therefor) upon the exercise of such rights
or options or upon the conversion or exchange of such Convertible
Securities. If the purchase price provided for in any such right or option
referred to in clause (A) of paragraph (c) above or the rate at which any
Convertible Securities referred to in clause (A) or (B) of paragraph (c)
above are convertible into or exchangeable for
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common stock shall decrease at any time under or by reason of provisions
with respect thereto designed to protect against dilution, then in case of
the delivery of common stock upon the exercise of any such right or option
or upon conversion or exchange of any such Convertible Security, the
exercise price of this Warrant then in effect hereunder shall forthwith be
decreased to such exercise price of this Warrant as would have obtained had
the adjustments made upon the issuance of such right, option or Convertible
Securities been made upon the basis of the issuance of (and the total
consideration received for) the shares of common stock delivered as
aforesaid.
(e) No fractional shares of common stock are to be issued upon the
exercise of the Warrant, but the Company shall pay a cash adjustment in
respect of any fraction of a share which would otherwise be issuable in an
amount equal to the same fraction of the market price per share of common
stock on the day of exercise as determined in good faith by the Company.
(f) If any merger, capital reorganization or reclassification of the
capital stock of the Company, or consolidation or merger of the Company
with another corporation, or the sale of all or substantially all of its
assets to another corporation shall be effected in such a way that holders
of common stock shall be entitled to receive stock, securities or assets
with respect to or in exchange for common stock then, as a condition of
such reorganization, reclassification, consolidation, merger or sale,
lawful and adequate provision shall be made whereby the holder hereof shall
hereafter have the right to purchase and receive upon the basis and upon
the terms and conditions specified in this Warrant and in lieu of the
shares of the common stock of the Company immediately theretofore
purchasable and receivable upon the exercise of the rights represented
hereby, such shares of stock, securities or assets as may be issued or
payable with respect to or in exchange for a number of outstanding shares
of such common stock equal to the number of shares of such stock
immediately theretofore purchasable and receivable upon the exercise of the
rights represented hereby had such reorganization, reclassification,
consolidation, merger or sale not taken place, and in any such case
appropriate provisions shall be made with respect to the rights and
interests of the holder of this Warrant to the end that the provisions
hereof (including without limitation provisions for adjustments of the
Warrant purchase price and of the number of shares purchasable upon the
exercise of this Warrant) shall thereafter be applicable, as nearly as may
be, in relation to any shares of stock, securities or assets thereafter
deliverable upon the exercise hereof. The Company shall not effect any such
consolidation, merger or sale, unless prior to the consummation thereof the
successor corporation (if other than the Company) resulting from such
consolidation or merger, or the corporation purchasing such assets, shall
assume by written instrument executed and mailed to the registered holder
hereof at the last address of such holder appearing on the books of the
Company, the obligation to deliver to such holder such shares of stock,
securities or assets as, in accordance with the foregoing provisions, such
holder may be entitled to purchase.
(g) Upon any adjustment of the warrant purchase price, then and in
each such case, the Company shall give written notice thereof, by first
class mail, postage prepaid, addressed to the registered holder of this
Warrant at the address of such holder as shown on the books of the Company,
which notice shall state the warrant purchase price resulting from such
adjustment and the increase or decrease, if any, in the number of shares
purchasable at such price
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upon the exercise of this Warrant, setting forth in reasonable detail the
method of calculation and the facts upon which such calculation is based.
5. COMMON STOCK. As used herein, the term "common stock" shall mean and
include the Company's presently authorized shares of common stock and shall also
include any capital stock of any class of the Company hereafter authorized which
shall not be limited to a fixed sum or percentage in respect of the rights of
the holders thereof to participate in dividends or in the distribution of assets
upon the voluntary or involuntary liquidation, dissolution or winding up of the
Company.
6. NO VOTING RIGHTS. This Warrant shall not entitle the holder hereof to
any voting rights or other rights as a stockholder of the Company.
7. TRANSFER OF WARRANT OR SHARES. The holder acknowledges that it has
obtained this Warrant for investment and not with the intention of making any
resale or distribution. The holder further acknowledges (a) that neither this
Warrant nor any of the shares of common stock obtainable under it have been
registered under the Securities Act of 1933 or any state securities statutes,
and (b) that neither this Warrant nor any shares of common stock obtained under
it may be transferred without such registration or an opinion of legal counsel
reasonably acceptable to the Company that such transfer may be made without
registration. Subject to the foregoing, the Company agrees that this Warrant is
transferable in whole or in part.
8. PIGGYBACK REGISTRATION RIGHT.
(A) GRANT OF RIGHT. If the Company shall propose to file any
registration statement (except for any registration on Forms X-0, X-0 or
any other similarly inappropriate form and except for any registration
statement with respect to an initial public offering by the Company in
which there are no selling shareholders) under the Securities Act of 1933,
as amended (the "Act"), for a public offering of the Company's common
stock, the Company shall notify all holders (each, a "Holder") of this
Warrant and of Registrable Shares (as defined below) at least twenty (20)
days prior to each such filing and will include in the Registration
Statement (to the extent permitted by applicable regulation), all or a
portion of the Registrable Shares to the extent requested by any Holder
within fifteen (15) days after receipt of any such notice from the Company.
If the Registration Statement filed pursuant to such twenty (20) day notice
has not become effective within six months following the date such notice
is given to the Holders, the Company shall again notify such Holders in the
manner provided above.
"Registrable Shares" shall mean (i) any shares of common stock which
have been issued or are issuable upon exercise of this 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 Registrable Shares, other
than any such shares that have been theretofore registered under the
Securities Act and sold or are eligible to be sold pursuant to Rule 144
promulgated under the Securities Act. Nothing in this Agreement shall be
deemed to require the Company to register this Warrant, it being understood
that the registration rights granted by this Section 8 relate only to
shares of common stock.
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(b) UNDERWRITTEN OFFERINGS. If any registration pursuant to this
Section 8 shall be underwritten in whole or in part, the Company may
require that the Registrable Shares requested for inclusion pursuant to
this Section 8 be included in the underwriting on the same terms and
conditions as the securities otherwise being sold through the underwriters.
If an offering covered by a request for registration under this Section 8
is underwritten in whole or in part and the managing underwriter of such
offering determines in good faith that the total number of securities
proposed to be sold in such offering exceeds the maximum number of
securities 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 for sale 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 Shares and other securities
having similar incidental registration rights proposed to be registered
pursuant to this Section 8 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), shall be reduced, pro rata. Those Registrable Shares 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.
(c) SUSPENSION OF RESALES. The Company shall be entitled to suspend
for a period not in excess of 90 days 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 Shares 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. The holders of the Registrable Shares
included in any such registration statement and not previously sold
thereunder agree that upon its receipt of such written certification, it
shall immediately discontinue the sale of any Registrable Shares pursuant
to such registration statement until such holder has received copies of the
supplemented or amended prospectus 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 Shares 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, 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
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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 Shares that was current at the time of
receipt of the aforesaid written certification.
(d) PROVISION BY HOLDERS OF CERTAIN INFORMATION IN CONNECTION WITH
REGISTRATION STATEMENT. A Holder may not include any of its Registrable
Shares in a registration statement pursuant to this Warrant unless and
until such Holder furnishes to the Company in writing, within ten (10) days
after receipt of a request therefor, the information specified in Item 507
or 508, as applicable, of Regulation S-K promulgated under the Act for use
in connection with such registration statement or the prospectus or
preliminary prospectus included therein. Each 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.
(e) EXPENSES. With respect to each inclusion of Registrable Shares in
a registration statement pursuant to this Section 8, 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), 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. 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.
(f) MISCELLANEOUS. The Company will mail to each Holder, at his last
known post office address, written notice of any exercise of the rights
granted under this paragraph 8, by certified or registered mail, return
receipt requested, and each Holder shall have twenty (20) days from the
date of deposit of such notice in the U.S. Mail to notify the Company in
writing whether such Holder wishes to join in such exercise. The Company
will furnish to each Holder for whom a registration has been filed a
reasonable number of copies of any prospectus included in such filings and
will amend or supplement the same as required during the period of required
use thereof; provided, that the expenses of any amendment or supplement
made or filed more than three (3) months after the effective date of the
registration statement, at the request of any Holder, shall be paid by such
Holder. The Company will maintain the effectiveness of any registration
statement filed by the Company, whether or not at the request of the Holder
hereof, for at least nine (9) months following the effective date thereof.
In the case of the filing of any registration statement, and to the extent
permissible under the Act and controlling precedent thereunder, the Company
and the Holder of Registrable Shares covered by such registration statement
shall provide cross indemnification agreements to each other in customary
scope covering the accuracy and completeness of the information furnished
by each. Holders of this Warrant or Registrable Shares being so registered
agree to cooperate with the Company in the preparation and filing of any
such registration statement, and in the furnishing of information
concerning the Holder for inclusion therein, or in any efforts by the
Company to establish that the proposed sale is exempt under the Act as to
any proposed distribution.
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IN WITNESS WHEREOF, the Company has caused this Warrant to be signed by its
duly authorized officers and dated as of the date first written above.
Select Comfort Corporation
By: /s/ Xxxx X. Xxxxxxx
---------------------------------------
Xxxx X. Xxxxxxx, Senior Vice President
ATTEST:
/s/ Xxxxx X. Xxxxx
---------------------------------
Chief Financial Officer
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