8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported):  April 17, 2009

SELECT COMFORT CORPORATION

(Exact name of registrant as specified in its charter)

Minnesota

(State or other jurisdiction of incorporation or organization)

0-25121	41-1597886
(Commission File No.)	(IRS Employer Identification No.)

9800 59th Avenue North, Minneapolis, Minnesota 55442

(Address of principal executive offices)          (Zip Code)

(763) 551-7000

(Registrant’s telephone number, including area code)

Not applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

[  ]  Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

[  ]  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

[  ]  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

[  ]  Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

ITEM 1.01.  ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.

Amendment No. 9 to Credit Agreement

Effective as of April 17, 2009, Select Comfort Corporation entered into Amendment No. 9 (“Amendment No. 9”) to our existing Credit Agreement dated as of June 9, 2006, as previously amended, including most recently as of February 28, 2009 (the “Credit Agreement”).  The parties to Amendment No. 9 are Select Comfort Corporation, Select Comfort Retail Corporation, JPMorgan Chase Bank, National Association, as Administrative Agent and as Collateral Agent, Bank of America, N.A., as Syndication Agent, and JPMorgan Chase Bank, National Association, Bank of America, N.A., Citicorp USA, Inc., Wells Fargo Bank, National Association and Branch Banking and Trust Co., as Lenders.

Pursuant to Amendment No. 9, the Collateral Agent transferred approximately $23 million in company funds (previously held in a cash collateral account) to reduce the outstanding balance under the Credit Agreement.  In addition, the Lenders maintained their aggregate commitment at $85 million and added an availability covenant that caps the amount outstanding under the Credit Agreement at the aggregate commitment less $18 million (or a net aggregate availability of $67 million).  The net effect of the foregoing was to reduce outstanding debt by $23 million and provide approximately $5 million in additional availability to the company following the amendment versus the amount effectively available to the company prior to the amendment.

Also pursuant to Amendment No. 9, the Lenders waived compliance, through May 8, 2009, with (a) the Minimum Interest Coverage Ratio covenant for the fiscal periods ending on or about December 31, 2008 through March 31, 2009, (b) the Maximum Leverage Ratio covenant for the fiscal period ended on or about March 31, 2009, (c) the EBITDA covenant for the fiscal period ending on or about December 31, 2008, and (d) the requirement under Section 5.01(a) of the Credit Agreement that the company deliver its audit for fiscal year 2008 without a going concern qualification or exception.  The company remains in discussions with the Lenders under the Credit Agreement to seek a more permanent solution to meet the company’s liquidity requirements.

The aforementioned description of Amendment No. 9 is qualified in its entirety by reference to the complete terms of Amendment No. 9, a copy of which is included as Exhibit 10.1 to this Current Report on Form 8-K and incorporated herein by reference.

ITEM 9.01.  FINANCIAL STATEMENTS AND EXHIBITS.

(d) Exhibits.

10.1           Amendment No. 9 to Credit Agreement, dated as of April 17, 2009.

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	SELECT COMFORT CORPORATION
	(Registrant)
Dated:  April 23, 2009	By:
	Title:    Senior Vice President

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EXHIBIT INDEX

Exhibit No.                            Description                                                                                                

10.1   Amendment No. 9 to Credit Agreement, dated as of April 17, 2009.

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EX-10.1

Exhibit 10.1

Execution Copy

Amendment No. 9 to Credit Agreement

This Amendment No. 9 to Credit Agreement (this “Ninth Amendment”) is entered into as of April 17, 2009 by and among Select Comfort Corporation (the “Company”), Select Comfort Retail Corporation, JPMorgan Chase Bank, National Association, as Administrative Agent and Collateral Agent, Bank of America, N.A., as Syndication Agent, and the financial institutions signatories hereto as lenders (the “Lenders”).

RECITALS

A.           The undersigned are parties to that certain Credit Agreement dated as of June 9, 2006, as amended pursuant to Amendment No. 1 to Credit Agreement dated as of June 28, 2007, Amendment No. 2 to Credit Agreement dated as of February 1, 2008, Amendment No. 3 to Credit Agreement dated as of May 30, 2008, Amendment No. 4 to the Credit Agreement dated as of December 2, 2008, Amendment No. 5 to the Credit Agreement dated as of January 2, 2009, Amendment No. 6 to the Credit Agreement dated as of January 15, 2009 (“Amendment No. 6”), Amendment No. 7 to the Credit Agreement dated as of January 31, 2009, and Amendment No. 8 to the Credit Agreement dated as of February 28, 2009 (the “Credit Agreement”).  Unless otherwise specified herein, capitalized terms used in this Ninth Amendment shall have the meanings ascribed to them by the Credit Agreement.

B.           The Company has requested that the Administrative Agent and the Lenders grant a limited waiver with respect to the Credit Agreement.

C.           The Administrative Agent and the undersigned Lenders are willing to grant such waiver on the terms and conditions set forth below.

Now, therefore, in consideration of the mutual execution hereof and other good and valuable consideration, the parties hereto agree as follows:

1.           Amendment to Credit Agreement.  On the Effective Date (as defined below), Section 6.13 of the Credit Agreement is hereby amended by restating such section in full as follows:

“SECTION 6.13  Minimum Availability.  The Company shall not permit the outstanding principal balance of the Loans plus the LC Exposure to exceed at any time the aggregate amount of the Commitments less $18,000,000.”

2.           Limited Waiver.  On the Effective Date, the Administrative Agent and the Lenders signatory hereto hereby waive the Company’s (i) breach of Section 5.01(a) of the Credit Agreement occasioned by its delivery of an audit for fiscal year 2008 with a “going concern” qualification, (ii) breach of Section 6.09 of the Credit Agreement for the respective fiscal periods ending on or about December 31, 2008 through on or about March 31, 2009, (iii) breach of Section 6.10 of the Credit Agreement for the fiscal period ending on or about March 31, 2009, and (iv) breach of the financial covenant set forth in Section 6.12 of the Credit Agreement for the fiscal period ending on or about December 31, 2008, provided such waivers shall expire at 5 p.m. on May 8, 2009, at which time the terms and provisions of Sections 5.01(a), 6.09, 6.10 and 6.12 of the Credit Agreement shall be effective with the same force and effect under the Credit Agreement as if such waivers had not been given.

3.           Representations and Warranties of the Company.  The Company represents and warrants that:

(a)           The execution, delivery and performance by the Company of this Ninth Amendment has been duly authorized by all necessary corporate action and this Ninth Amendment is a legal, valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except as the enforcement thereof may be subject to (i) the effect of any applicable bankruptcy, insolvency, reorganization, moratorium or similar law affecting creditors’ rights generally and (ii) general principles of equity, regardless of whether considered in a proceeding in equity or at law.

(b)           Each of the representations and warranties contained in the Credit Agreement and the other Credit Documents is true and correct in all material respects on and as of the date hereof as if made on the date hereof (except any such representation or warranty that expressly relates to or is made expressly as of a specific earlier date, in which case such representation or warranty shall be true and correct with respect to or as of such specific earlier date).

(c)           After giving effect to this Ninth Amendment, no Default has occurred and is continuing.

4.           Effective Date.  This Ninth Amendment shall become effective (“Effective Date”) upon receipt by the Administrative Agent of (i) duly executed counterparts of this Ninth Amendment from the Company, Select Comfort Retail Corporation and the Required Lenders, and (ii) the Reaffirmation of Guaranty in the form attached hereto as Exhibit A executed by each of the Subsidiary Guarantors.  On the Effective Date, the Collateral Agent shall transfer the entire balance of the cash collateral account held by it for application to the unpaid principal balance of the Revolving Loans, without any corresponding reduction in the Commitments.  The Company hereby reaffirms its obligations under paragraph 4(b) of Amendment No. 6 with respect to the deposit into a cash collateral account with the Collateral Agent of any further federal or state income tax refunds received hereafter by or for the benefit of the Company or any Subsidiary Guarantor.

5.           Reference to and Effect Upon the Credit Agreement.

(a)           Except as specifically amended above, the Credit Agreement and the other Credit Documents shall remain in full force and effect and are hereby ratified and confirmed.

(b)           The execution, delivery and effectiveness of this Ninth Amendment shall not operate as a waiver of any right, power or remedy of the Administrative Agent or any Lender under the Credit Agreement or any Credit Document, nor constitute a waiver of any provision of the Credit Agreement or any Credit Document, except as specifically set forth herein.  Upon the effectiveness of this Ninth Amendment, each reference in the Credit Agreement to “this Agreement”, “hereunder”, “hereof”, “herein” or words of similar import shall mean and be a reference to the Credit Agreement as amended hereby.

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6.           Release of Claims and Waiver.  Each of the Company and each of its Subsidiaries hereby releases, remises, acquits and forever discharges each of the Lenders and such Lender’s employees, agents, representatives, consultants, attorneys, fiduciaries, servants, officers, directors, partners, predecessors, successors and assigns, subsidiary corporations, parent corporations, and related corporate divisions (all of the foregoing hereinafter called the “Released Parties”), from any and all actions and causes of action, judgments, executions, suits, debts, claims, demands, liabilities, obligations, damages and expenses of any and every character, known or unknown, direct and/or indirect, at law or in equity, of whatsoever kind or nature, for or because of any matter or things done, omitted or suffered to be done by any of the Released Parties prior to and including the date of execution hereof, and in any way directly or indirectly arising out of or in any way connected to this Ninth Amendment, the Collateral, the Loans, the Credit Agreement, or the other Credit Documents (all of the foregoing hereinafter called the “Released Matters”).  Each of the Company and each of its Subsidiaries acknowledges that the agreements in this paragraph are intended to be in full satisfaction of all or any alleged injuries or damages arising in connection with the Released Matters. Each of the Company and each of its Subsidiaries represents and warrants to the Lenders that it has not purported to transfer, assign or otherwise convey any right, title or interest of the Company in any Released Matter to any other person and that the foregoing constitutes a full and complete release of all Released Matters.

7.           Costs and Expenses.  The Company hereby affirms its obligations under Section 9.03 of the Credit Agreement to reimburse the Administrative Agent for all reasonable costs and out-of-pocket expenses paid or incurred by the Administrative Agent in connection with the preparation, negotiation, execution and delivery of this Ninth Amendment, including but not limited to the reasonable fees, charges and disbursements of attorneys for the Administrative Agent with respect thereto.

8.           Governing Law.  This Agreement shall be construed in accordance with and governed by the law of the State of New York (without regard to conflict of law provisions thereof).

9.           Headings.  Section headings in this Ninth Amendment are included herein for convenience of reference only and shall not constitute a part of this Ninth Amendment for any other purposes.

10.           Counterparts.  This Ninth Amendment may be executed in any number of counterparts, and each of which when so executed shall be deemed an original but all such counterparts shall constitute one and the same instrument.

[signature pages follow]

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IN WITNESS WHEREOF, the parties have executed this Ninth Amendment as of the date and year first above written.

SELECT COMFORT CORPORATION, as a Borrower

By                      /s/ James C. Raabe                                           

Name:                James C. Raabe

Title:                  Senior Vice President & CFO

SELECT COMFORT RETAIL CORPORATION

By                      /s/ James C. Raabe                                           

Name:                James C. Raabe

Title:                  Senior Vice President & CFO

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JPMORGAN CHASE BANK, NATIONAL ASSOCIATION, individually, as Administrative Agent and as Collateral Agent

By                      /s/ Patricia S. Carpen                                                      

Name:                Patricia S. Carpen

Title:                  Vice President

BANK OF AMERICA, N.A., individually and as Syndication Agent

By                      /s/ Lynn D. Simmons                                                      

Name:                Lynn D. Simmons

Title:                  Senior Vice President

CITICORP USA, INC., as a Lender

By                      /s/ Sugam Mehta                                           

Name:                Sugam Mehta

Title:                  Vice President

WELLS FARGO BANK, NATIONAL ASSOCIATION,

as a Lender

By                      /s/ Troy Jefferson                                           

Name:                Troy Jefferson

Title:                  Vice President

BRANCH BANKING AND TRUST CO., as a Lender

By            /s/ Troy R. Weaver 

Name:                 Troy R. Weaver

Title:                   Senior Vice President

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EXHIBIT A

REAFFIRMATION OF GUARANTY

The undersigned hereby acknowledges receipt of a copy of the Amendment No. 9 to Credit Agreement, dated as of April 17, 2009, and reaffirms its obligations under the Subsidiary Guaranty dated as of June 9, 2006 in favor of JPMorgan Chase Bank, National Association, as Administrative Agent, and the Lenders (as defined in the Ninth Amendment).

Dated as of April 17, 2009

SELECT COMFORT RETAIL CORPORATION

By                      /s/ James C. Raabe                                           

Name:                James C. Raabe

Title:                  Senior Vice President & CFO

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