EXHIBIT 5
May 1, 2001
St. Xxxx Venture Capital VI, LLC
00000 Xxxxxx Xxxxx, Xxxxx 000
Xxxx Xxxxxxx, Xxxxxxxxx 00000
Re: Select Comfort Corporation
Ladies and Gentlemen:
This letter will serve to confirm our agreement and understanding
with you that each of the undersigned agrees on behalf of itself and its
heirs, beneficiaries, successors or assigns, to vote, or to cause its
respective Transferees (as defined below) to vote, at the next annual or
special meeting of shareholders of Select Comfort Corporation (the "Company")
all shares of the Company's common stock now owned or hereafter acquired of
record or beneficially by the undersigned, or its Transferees, as the case
may be (collectively, the "Shares"), in favor of the proposal to approve the
issuance of up to $12 million principal amount of convertible debentures,
convertible at any time at the option of the holders into shares of the
Company's common stock, and warrants to purchase shares of the Company's
common stock, for purposes of Rule 4350 of the National Association of
Securities Dealers, Inc. (the "Nasdaq Proposal"). As used herein,
"Transferee" shall mean any person or entity to whom any of the undersigned
transfers or assigns any of its Shares; provided, however, that, if any of
the undersigned sell Shares in the public market, in compliance with the
manner of sale requirements set forth in the first sentence of paragraph
(f) of Rule 144 adopted under the Securities Act of 1933, to a person or
entity that is an unaffiliated third party, such person or entity shall not
be deemed to be a "Transferee" and shall not be subject to the provisions of
this letter agreement.
Notwithstanding any of the foregoing, the undersigned shall retain
at all times the right to vote their respective Shares in their sole
discretion on all other matters which are, at any time and from time to time,
presented for a vote to the Company's shareholders generally.
To secure the undersigned's obligations to vote their respective
Shares in accordance with the first paragraph of this letter agreement, each
of the undersigned hereby appoints Xxxxxxx X. Xxxx and Xxxxx X. Xxxxxx, or
either of them, from time to time, or his/her designees, as such person's
true and lawful proxy and attorney, each with the power to act alone and with
full power of substitution, to vote all of the Shares in the manner set forth
in the first paragraph of this letter agreement if, and only if, such person
fails to vote all of such person's Shares in accordance with the provisions
of the first paragraph of this letter agreement for any reason whatsoever.
The proxy and power granted by each of the undersigned pursuant to this
letter agreement are coupled with an interest and are given to secure the
performance of such person's duties under this letter agreement. Each such
proxy will be irrevocable for the term hereof. The proxy, so long as any of
the undersigned is an individual, will survive the death, incompetency and
disability of such person or any other individual holder of Shares and, so
long as any of the undersigned is an entity, will survive the merger or
dissolution of such person or any other entity holding any Shares.
Upon St. Paul's request, each of the undersigned agrees that each
certificate evidencing the Shares subject to the provisions of this letter
agreement shall, during the term of this letter agreement,
be endorsed with a legend notifying the holder thereof of the existence of
this letter agreement. No such Shares shall be transferred to a Transferee
without the endorsement on each certificate issued upon such transfer of such
legend, and a stop order shall be placed with the Company's transfer agent to
such effect.
The provisions of this letter agreement shall be binding as to each
signatory hereto immediately upon the execution and delivery to the addressee
of a counterpart of this letter agreement, regardless of whether it shall
have been executed by any other party named hereon, and shall terminate upon
the earlier of: (i) the approval by the Company's shareholders of the Nasdaq
Proposal; or (ii) October 31, 2001.
Each of the undersigned understands and agrees that a breach of the
terms and conditions of this letter agreement will cause you irreparable harm
which cannot be reasonably or adequately compensated by receipt of money
damages at law, and that you may, in your sole discretion, apply to any court
of law or equity or competent jurisdiction for specific enforcement,
injunctive relief and/or other equitable remedies to prevent or remedy a
breach of this letter agreement or any part hereof. All rights and remedies
herein provided are cumulative and not exclusive of any remedy provided by
law or by equity.
The terms and conditions of this letter agreement shall inure to the
benefit of and be binding upon and be enforceable by the respective heirs,
successors and assigns of the undersigned (including without limitation each
Transferee) and you. This letter agreement shall be governed by and construed
in accordance with, the laws of the State of Minnesota. This letter agreement
constitutes the entire understanding and agreement of the undersigned and you
with respect to the subject matter hereof and supersedes all prior and
contemporaneous agreements or understandings, inducements or conditions,
express or implied, written or oral, among the undersigned and you with
respect hereto. This letter agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original, but all of
which taken together shall constitute one and the same agreement.
If the foregoing correctly sets forth our agreement and
understanding, please sign the enclosed copy of this letter in the space
provided.
Very truly yours,
CONSUMER VENTURE PARTNERS II, L.P.
By: Consumer Venture Associates II, L.P.
Its: General Partner
/s/ Xxxxxxxxxxx X. Xxxxxxx
-----------------------------------------
Xxxxxxxxxxx X. Xxxxxxx
General Partner
[SIGNATURE PAGE TO VOTING AGREEMENT AMONG ST. XXXX VENTURE CAPITAL VI, LLC,
SELECT COMFORT CORPORATION AND CERTAIN STOCKHOLDERS OF SELECT COMFORT]
CHERRY TREE VENTURES IV LIMITED PARTNERSHIP
By: /s/ Xxxxxx X. Xxxxxx
--------------------------------------
Its: Managing General Partner
-------------------------------------
[SIGNATURE PAGE TO VOTING AGREEMENT AMONG ST. XXXX VENTURE CAPITAL VI, LLC,
SELECT COMFORT CORPORATION AND CERTAIN STOCKHOLDERS OF SELECT COMFORT]
NORWEST EQUITY PARTNERS V
By: Itasca Partners V
/s/ Xxxx X. Xxxxxx
----------------------------------------
Partner
Number of shares: 329,277
-----------------------
[SIGNATURE PAGE TO VOTING AGREEMENT AMONG ST. XXXX VENTURE CAPITAL VI, LLC,
SELECT COMFORT CORPORATION AND CERTAIN STOCKHOLDERS OF SELECT COMFORT]
NORWEST EQUITY PARTNERS IV
By: Itasca Partners
/s/ Xxxx X. Xxxxxx
----------------------------------------
Partner
Number of shares: 597,053
-----------------------
[SIGNATURE PAGE TO VOTING AGREEMENT AMONG ST. XXXX VENTURE CAPITAL VI, LLC,
SELECT COMFORT CORPORATION AND CERTAIN STOCKHOLDERS OF SELECT COMFORT]
AGREED TO AND ACCEPTED:
ST. XXXX VENTURE CAPITAL VI, LLC
By: SPVC Management VI, LLC
Its: Managing Member
/s/ Xxxxxxx X. Xxxx
--------------------------------
Xxxxxxx X. Xxxx
Managing Director
SELECT COMFORT CORPORATION
By: /s/ Xxxx X. Xxxxxxx
--------------------------
Its: Senior Vice President
--------------------------
[SIGNATURE PAGE TO VOTING AGREEMENT AMONG ST. XXXX VENTURE CAPITAL VI, LLC,
SELECT COMFORT CORPORATION AND CERTAIN STOCKHOLDERS OF SELECT COMFORT]
