[Portions of this Exhibit have been omitted pursuant to a request for
confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934,
as amended. A copy of this Exhibit with the portions intact has been filed
separately with the Securities and Exchange Commission.]
MASTER AGREEMENT
This Master Agreement, made and entered into this, by and between Select Comfort
Corporation, a corporation organized and existing under the laws of the state of
Minnesota, hereinafter referred to as "Buyer" and XXXXXX, organized under the
laws of XXXXXXXX, hereinafter referred to as "Seller".
[Portions of this recital have been omitted pursuant to a request for
confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934,
as amended. A copy of this Exhibit with this recital intact has been filed
separately with the Securities and Exchange Commission.]
WINTNESS:
WHEREAS, Buyer is a user of the goods hereinafter described and desires
to establish a formal relationship for the purchase from Seller of such goods;
and
WHEREAS, Seller is the manufacturer and supplier of such goods and is
willing to provide and sell them to Buyer, all upon the terms and conditions
hereinafter stated.
NOW, THEREFORE, in consideration of the mutual promises and covenants
herein set forth, the parties hereby agree as follows:
ARTICLE 1.
DEFINATIONS
For purposes of this Agreement, the following terms, word and phrases, where
written with an initial capital letter, shall have the following meanings:
1.1 "Products" shall mean the air ▇▇▇▇▇▇▇▇ manufactured by Seller according
to the Master Specification Exhibit III attached;
1.2 "Improvements" shall mean modifications and/or enhancements to the
design of products owned by Buyer, developed by either party during the
term of this Agreement as per the Master Specification Exhibit III
attached.
1
ARTICLE 2.
SUPPLY AND PURCHASE
2.1 During the term of this Agreement, Buyer agrees to purchase from
Seller, and Seller agrees to supply to Buyer, at the prices determined
in accordance herewith, and subject to the terms and conditions
hereinafter set forth, the annual minimum volumes of Products set forth
in Exhibit IV as defined by Exhibit III, Master Specification attached
hereto from Seller.
2.2 Seller agrees that all air chamber "Products", as specified in Exhibit
III, shall be delivered exclusively to Buyer or a company designated by
the Buyer. All inquiries that Seller receives on a worldwide basis
relative to Buyer's air chamber "Products" as specified in Exhibit III,
shall be directed to Buyer.
ARTICLE 3.
ORDERS, DELIVERY AND MODIFICATION OF PRODUCTS
3.1 Purchase Orders. Buyer shall submit purchase orders for the Products a
minimum of 14 days prior to the requested delivery date. The delivery
date is the date the order is expected to leave the factory en-route to
the FOB point. Seller shall advise within 2 business days of receipt of
the order if they are unable to fulfill the order as requested. All
purchase orders shall be mutually executed in accordance with the terms
and conditions of this Agreement and at the prices established herein.
3.2 Delivery of Products. Seller shall deliver the Products within the
times specified on the individual purchase orders, in the quantities
specified on the individual purchase orders and at the prices specified
herein, all in accordance with Buyer's instructions and Master
Specifications (Exhibit III). Buyer reserves the right to adjust the
mix of the product with a minimum of 14 days notice from the requested
delivery date.
3.3 Stock outs: Buyer shall reserve the right to assert claims for actual
costs incurred due to the Seller's failure to deliver the product
against a confirmed purchase order on the confirmed ship date. All
claims shall be submitted in writing to the Seller and accompanied with
supporting documentation. Seller may reserve the right to have the
claim audited by an independent 3rd party. This claim shall include,
but not be limited to, the following costs: expedited freight, in-bound
and out-bound, sales lost due to Buyer's inability to meet the 7-10 day
delivery commitment to our Customers, or any additional handling or
overtime costs incurred as a result of the late delivery.
3.4 Shipping Terms. The initial shipping term for Products delivered by
Seller to Buyer pursuant to this agreement shall be the shipping term
set forth in Exhibit I. Such shipping term may be changed by the
parties upon mutual agreement in writing at any time during the term of
this agreement. The shipping terms stipulated by the Parties shall be
interpreted in accordance with the terms of the Incoterm '90 defined by
the International Chamber of Commerce. In the event of a change in the
shipping term, the parties shall adjust the prices for Products set
forth in Exhibit I to reflect the changed shipping term.
2
3.5 Packaging and shipping will be done according to the Master
Specification (Exhibit III) and Buyers instructions that will be in
conformity with the other paragraphs of the Agreement.
ARTICLE 4.
QUALITY OF PRODUCTS
The quality of all Products delivered by Seller shall be in accordance with the
Quality Requirements and Acceptance Criteria, Exhibit II.
ARTICLE 5.
COOPERATION
The parties agree to cooperate in value engineering and product development
efforts relating to quality improvement and cost reduction of the Products. Such
efforts shall take the form and extent as mutually agreed to by the parties in
writing. A cost sharing formula for any savings achieved by these efforts shall
be mutually determined and the unit pricing established under Exhibit I shall be
revised accordingly to reflect such savings. It is Buyer's expectation that the
Seller take a lead role in investigating and presenting new material and process
improvements in the air chamber technology.
ARTICLE 6.
PRICES AND PAYMENT
Prices and Adjustments. The pricing to be paid by the Buyer for the Products
purchased hereunder shall be the prices set forth in Exhibit I attached hereto.
In addition to any changes to such prices pursuant to Paragraph 3.4, such prices
may be subject to adjustments as agreed to by the parities. A minimum of 60 days
written notice is required prior to the effective date of the requested price
adjustment. The adjusted price shall be guaranteed for a minimum of 6 (six)
months from the effective date of the price adjustment. Such adjusted prices
shall be substituted for the prices set forth in Exhibit I, and a new Exhibit I,
as so modified shall be attached to this Agreement.
6.1 Payment Terms. Payment for delivered Products shall be made via a wire
transfer by Buyer in United States Dollars thirty (30) days from the
date of the ▇▇▇▇ of Lading for Products ordered and delivered. Such
payment terms may be changed by the parties upon mutual agreement in
writing at any time during the term of this agreement.
3
6.2 Late Payments. If the Buyer is in delay of payment to the Seller,
Seller reserves the right to assert a claim to the buyer for interest
incurred at the rate of 0.05% per day for each day payment is delayed
beyond the original due date of the invoice.
6.2.1 In the event that payment is delayed beyond 30 days from the original
due date of the invoice, Supplier reserves the right to withhold
confirmed shipments to the Buyer until payment for outstanding invoices
is received by the Seller.
ARTICLE 7.
TAXES
Except as otherwise provided in this Agreement Seller shall be
responsible for and shall pay any and all (a) export duties, (b) gross
receipt, income and pre-sale taxes and (c) other governmental charges
which relate to the production, delivery and sale of the Products, as
such are now or may hereafter be imposed under or by any state, local
or municipal governmental authority or agency in the XXXXXXXXX. Seller
shall not be responsible and shall not pay any taxes or charges as
outlined in above levied after delivery to Buyer.
[A portion of this Article has been omitted pursuant to a request for
confidential treatment under Rule 24b-2 of the Securities Exchange Act
of 1934, as amended. A copy of this Exhibit with this Article intact
has been filed separately with the Securities and Exchange Commission.]
ARTICLE 8.
ACCEPTANCE AND WARRANTY
8. Buyer shall accept all Product that meets the Select Comforts Air Chamber,
Rubber/Cotton Vulcanized, Test and Inspection Specification SP-004,
conducted at the Seller site prior to shipment to Buyer. Buyer may forego
inspection at the point of receipt or in-coming and/or in-process quality
acceptance tests at the time the products are being prepared for shipment
to Buyer's customers at its principal place(s) of business in Minneapolis,
Minnesota; Irmo, South Carolina; and, Salt Lake City, Utah. Buyer and
Seller shall agree to a quality discount percentage that will be applied to
invoices at the time the Product ships from the Seller to Buyer. This
quality discount XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX The quality discount
will be reviewed at least every XXXX and adjusted based on the last XXXXXX
activity. A review of the quality discount will be warranted prior to
XXXXXXX in the event the quality discount average varies more than XXXXX
from the established quality discount over any XXXXXXX period. In the event
of a change in the quality discount, Exhibit II will be updated to reflect
the revised quality discount.
[Portions of this Exhibit have been omitted pursuant to a request for
confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934,
as amended. A
4
copy of this Exhibit with the portions intact has been filed separately with the
Securities and Exchange Commission.] 9.
8.1.1. Seller warrants to the Buyer from the date of delivery of the
Products to the Buyer in accordance with Section 3.2 of this
Agreement that all Products sold hereunder shall (i) be free
from any defects in material or workmanship and be of good and
merchantable quality, (ii) conform to Buyer's specifications
to any sample or prototype approved by Buyer and (iii) comply
and have been produced, processed and delivered in conformity
with Article 4 herein for the period defined in the warranty
schedule contained in Exhibit II, Quality Requirements and
Acceptance.
8.1.2. The foregoing warranties shall survive inspection of, delivery
of and payment for the Products and shall run in favor of
Buyer and its customers. If Seller breaches any of the
foregoing warranties during the term of the warranty period
specified in Exhibit II, or if Seller fails to perform or
comply with any provision of this Agreement, Seller shall be
liable to Buyer for any and all costs, expenses (including
reasonable attorneys' fees, court costs and litigation
expenses) and damages arising therefrom.
ARTICLE 9.
PROPRIETARY RIGHTS
9.1 Buyer retains all proprietary rights in and to all designs of the air
▇▇▇▇▇▇▇▇, as specified in the Master Specification, Exhibit III. The
Seller agrees to continuously undertake efforts concerning the quality
improvements of the Products taking into consideration the market
requirements and the economical production.
9.2 The Seller agrees to continue to make process and development improvements
to the product according to special requests made by Buyer. Such
improvements are made for consideration on basis of mutual written
agreements of the parties. The costs of these development activities are
to be borne as agreed upon in writing by both parties prior to the actual
development activities.
9.3 Seller retains all proprietary rights in and to all engineering details
and other data pertaining to its manufacturing technology and processes.
ARTICLE 10.
TRADEMARKS
Nothing contained in the Agreement will be deemed to grant either party any
right or interest in the trademarks, trade name, service marks, proprietary
words, or symbols which the other may have adopted or used at any time in the
course of its business.
5
ARTICLE 11.
CONFIDENTIALITY
Each party agrees that all information disclosed to it or any of its affiliates
by other, whether verbally or in writing, shall be presumed to be proprietary
and confidential to such party, unless otherwise stated in writing. Each party
shall prevent the disclosure of any such proprietary information in strictest
confidence absent service of compulsory process. Each party shall not during the
term of this Agreement or thereafter, use any such proprietary information for
any purpose other than as specifically set forth in the Agreement.
ARTICLE 12.
COMPETITIVE ACTIVITIES
During the term of this Agreement, Seller will not participate in the management
or operations of any enterprise engaged in activities in competition with the
business of Buyer.
ARTICLE 13.
TERM AND TERMINATION
13.1 Term of Agreement. This agreement shall take effect as of the date
hereof and shall continue in full force and effect for a period of (4)
years and thereafter shall be automatically renewed for successive
terms or (1) one year each. Either party may provide written notice to
the other party at least 365 days prior to the expiration of the
initial term or any renewal term of its desire not to renew this
Agreement upon the expiration of the relevant term.
13.2 Termination. This Agreement may be terminated only in accordance with
the following provisions:
13.2.1 This Agreement may be terminated at any time upon the mutual
written consent of the parties hereto;
13.2.2 Either party hereto may terminate this Agreement by giving
notice in writing to the other party in the event that the
other party is in material breach of this Agreement and shall
have failed to cure such breach within (30) thirty days of
receipt of written notice thereof from the first party
specifying the nature of the breach; or
13.2.3 Either party hereto may terminate this Agreement at any time
by giving notice in writing to the other party, if (1) the
other party at any time (i) file or have filed against it a
petition of any type as to its bankruptcy, (ii) be adjudged
bankrupt or insolvent, (iii) make and assignment for the
benefit of its creditors, or (iv) go into liquidation
receivership; (2) a trustee, receiver or other equivalent
officer is appointed for the other party by any
6
court or governmental authority or any third party to
administrator or liquidate, who is not dismissed within (60)
sixty days of the date of appointment; or (3) dissolution
proceedings are commenced by or against the other party, which
are not dismissed within (60) sixty days of commencement.
13.2.4 This Agreement may be terminated by Buyer or Seller with a
minimum of (365) three hundred sixty five days written notice
if either party discontinues using the Products in its
business.
13.3 Rights and Obligations on Termination. In the event of the termination
of this agreement, the parties hereto shall have the following rights
and obligations:
13.3.1 The obligations of Seller and Buyer under the terms of
Sections 4, 7, 8, 9, 10 and 11 hereof shall survive the
termination of this Agreement.
13.3.2 Within (20) twenty days after the termination of this
Agreement, each party shall either return to the other any and
all proprietary or provide a written certification of
destruction of such confidential information in its possession
or under its control.
13.3.3 Termination or expiration of this Agreement shall not
release either party from the obligation to make payment to
the other party of all amounts then and thereafter due payable
under this Agreement within (30) thirty days of termination.
ARTICLE 14.
FORCE MAJEURE
14.1 Definition. Force Majeure shall mean any event or condition, not
existing as of the date of signature of this Agreement, not reasonably
foreseeable as of such date and not reasonably within the control of
either party, which prevents in whole or in material part the
performance of such obligations so difficult or costly as to make such
performance commercially unreasonable. Without limiting the foregoing,
the following shall constitute events or conditions of Force Majeure:
acts of State or, governmental action, riots, disturbance, war,
strikes, lockouts, slowdowns, prolonged shortage of energy supplies,
epidemics, fire, flood, hurricane, typhoon, earthquake, lightning and
explosion.
14.2 Notice. Upon giving notice to the other party, a party affected by an
event of Force Majeure shall be released without any liability on its
part from the performance of its obligations under this Agreement,
except for the obligation to pay any amounts due and owing hereunder,
but only to the extent and only for the period that its performance of
such obligations is prevented by the event of Force Majeure. Such
notice shall include a description of the nature of the event of Force
Majeure, its cause and possible consequences. The party claiming Force
Majeure shall promptly notify the other party to the terminations of
such event.
14.3 Suspension of Performance. During the period that the performance by
one of the parties of its obligations under this Agreement has been
suspended by reason of an event of Force
7
Majeure, the other party may likewise suspend the performance of all or
part of its obligations hereunder.
ARTICLE 15.
DISPUTES AND GOVERNING LAW
15.1 Disputes. The parties hereto shall submit any disputes arising under
this Agreement to arbitration. Such arbitration proceedings shall be
conducted in English and shall be carried on in the city of Vienna,
Austria or any other place mutually agreeable to the Parties, under the
UNCITRAL Arbitration Rules. Judgement upon the award rendered by the
arbitrator in favor of the prevailing party, which shall include an
award for the payment of costs, attorneys' fees and expenses of the
arbitration proceedings, may be entered in any court of competent
jurisdiction and assets may be attached in any country in the world
pursuant to such judgement.
ARTICLE 16.
GENERAL TERMS AND CONDITIONS
16.1 Relationship. This Agreement does not make either party hereto the
employee, agent or legal representative of the other party for any
purpose whatsoever. Neither party hereto is granted any right or
authority to assume or to create any obligation or responsibility,
expressed or implied, on behalf of or in the name of the other party.
In fulfilling its obligations pursuant to the Agreement, each party
hereto shall act as an independent contractor.
16.2 Assignment. Each party shall not assign or otherwise transfer any of
its rights or obligations under this Agreement without the prior
written consent of the other party. This Agreement and the rights and
obligation arising hereunder shall not be affected by any change in the
corporate structure of ownership of the parties.
16.3 Notices. All notices permitted or required to be given hereunder shall
be delivered personally or sent by telecopy or registered or certified
air mail, postage prepaid, return receipt requested, addressed to the
addresses of the parties hereto as set forth above or to such other
addresses as the given parties may designate by like notice from time
to time. Notices so given shall be effective (a) upon the date of
personal delivery, (b) if sent by telecopy, concurrently with the
transmission thereof if the sender's machine produces a transmission
report without notice of a communication fault, (c) on the (3rd) third
business day following the date on which such notice is mailed by
registered or certified air mail.
8
16.4 Entire Agreement. This Agreement, including the Exhibits attached
hereto and by this reference made an integral part hereof, constitute
the entire agreement of the parties hereto with respect to the subject
matter hereof and thereof, and supersede all previous proposals, verbal
or written, expressed or implied, and all negotiations, conversations
or discussions heretofore between the parties hereto related to the
subject matter of this Agreement.
16.5 Amendment. This Agreement shall not be deemed or construed to be
modified, amended, rescinded, canceled or waived, in whole or in part,
except by written statement signed by both parties hereto.
16.6 Severability. In the event that any of the terms of this Agreement are
in conflict with any rule of law or statutory provision or otherwise
unenforceable under the laws or regulations of any government or
subdivision thereof, such terms shall be deemed stricken from this
Agreement, but such invalidity or unenforceability of any such
provisions hereof does substantial violence to, or where the invalid or
unenforceable provisions comprise an integral part of, or otherwise
inseparable from, the remainder of this Agreement.
16.7 Compliance with Applicable Laws. The parties to this Agreement shall at
all times conduct their activities hereunder in accordance with all
applicable federal, state and local laws, rules and governmental
regulations.
16.8 Waiver. No failure by either party hereto to take any action or assert
any right hereunder shall be deemed to be a waiver of such right in the
event of the continuation or repetition of the circumstances giving
rise to such right.
16.9 Counterparts. This Agreement may be executed in (2) two or more
counterparts in the English language, each of which shall be deemed an
original, but all of which shall constitute (1) one and the same
instrument.
16.10 Remedies Cumulative. Each of the right and remedies of the parties set
forth in this Agreement shall be cumulative with all other rights and
remedies, as well as with all rights and remedies of the partied hereto
otherwise available at law or in equity.
16.11 Indemnification. Each party shall indemnify the other and hold it
harmless from and against any and all costs including reasonable
attorneys' fees, court costs and litigation expenses, losses, expenses
and damages incurred by the other party in connection with any claim or
cause of action brought by any third person or part against it which,
in whole or in part is based upon or arises out of any breach of any of
its obligations hereunder.
9
16.12 Captions. The captions of Articles and Sections of this Agreement are
included for convenient reference only, shall not be construed as part
of this Agreement and shall not be used to define, limit, extend or
interpret the terms hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
on the day and year first written above.
SELECT COMFORT CORPERATION
-------------------------------------------------
By /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ By /s/ Ing. Jiri Kaluzik
-------------- --------------
Title VP Supply Chain Mgmt Title Managing Director
-------------- --------------
Date:10/18/02 Date:10/22/02
-------------- --------------
EXHIBIT I
Product Part Number, Description and Pricing Structure
The following prices shall be in effect from January 2002 through December 2002
and shall only be amended in accordance with the provisions of Article 6.1,
Prices and payments. The baseline exchange rate used to determine the pricing is
$1.00 USD equals XXXX.
ITEM NUMBER DESCRIPTION COST / EA.
100133 Mini Display $xxxx
100270 Twin $xxxx
100271 Full $xxxx
100272 Queen Single $xxxx
100273 Queen Dual $xxxx
100274 E-King $xxxx
100275 C-King $xxxx
100276 TXL $xxxx
100277 Super Single $xxxx
100278 Super Queen $xxxx
100279 Super King $xxxx
10
ITEM NUMBER DESCRIPTION COST / EA.
100281 Euro $xxxx
105757 Expanded Queen $xxxx
105758 Flawed Twin $xxxx
105759 Flawed Full $xxxx
105760 Flawed Queen Dual $xxxx
105761 Flawed E-King $xxxx
[Portions of this Exhibit I have been omitted pursuant to a request for
confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934,
as amended. A copy of this Exhibit with the portions intact has been filed
separately with the Securities and Exchange Commission.]
DELIVERY/SHIPPING TERMS
o FOB German - Bremerhaven or Hamburg Ocean Port, full 20' or 40'
container delivered
PRICING/DISCOUNT STRUCTURE
Each January 1st, for the years 2003 - 2005 Exhibit I will be updated to reflect
the respective annual price reduction. In addition to the annual XXX reduction,
there will be an annual rebate program based on the following volume:
400,001 - 500,000 air ▇▇▇▇▇▇▇▇ per year (Jan 1 - Dec 31) XXX
500,001 + air ▇▇▇▇▇▇▇▇ per year (Jan 1 - Dec 31) XXX
[Portions of this Exhibit have been omitted pursuant to a request for
confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934,
as amended. A copy of this Exhibit with the portions intact has been filed
separately with the Securities and Exchange Commission.]
These rebates will be calculated only on the air ▇▇▇▇▇▇▇▇ shipped within the
calendar year, which exceed the volumes represented above. Eligible rebates will
be applied to the invoice at the point of shipment on the ▇▇▇▇▇▇▇▇ that exceed
the volumes represented above.
EXHIBIT II
Quality Requirements and Acceptance Criteria
The Buyers engineering specifications and engineering drawing requirements take
precedence over other requirements communicated to the Seller, whether such
requirements are verbal or written, except where a Deviation From Specification
(DFS) is approved and issued to the Seller by the Buyer.
11
The Seller shall review pre-production, prototype, first-piece, sample, or other
initial part or product, with the Buyer. This review shall include
representative samples, process data, and inspection and test data, for the
purpose of determining if the part or product meets the Buyers engineering
specifications and engineering drawing requirements, as well as safety and other
regulatory requirements specific to the part or product supplied.
Either Seller or Buyer may initiate a DFS where there is a realized need to
depart from requirements documented within the Buyers engineering specifications
or engineering drawings.
The Seller shall review known part or product deficiencies with the Buyer prior
to shipping the part or product to the Buyer. In some instances, Buyer may
approve a DFS to allow the Seller to produce deficient parts or products for a
limited period of time, or to ship a limited quantity of parts or products
exhibiting a known deficiency.
Seller disputes concerning requirements, or whether part or product meets the
Buyers engineering specifications or engineering drawing requirements, shall be
reviewed and mediated by the Buyers representatives from the Quality Control,
Manufacturing Engineering, R&D, and Supply Chain Management departments.
The Seller shall install appropriate controls and methods to ensure the part or
product supplied meets the Buyers engineering specifications and engineering
drawing requirements upon final delivery to the Buyer. Seller controls shall be
considered for, but not limited to, operations within raw material receiving,
work-in-process, finished goods, packaging, and shipping.
Buyer may, at any point, reject part or product that does not meet the Buyers
engineering specifications, engineering drawing requirements, or deviated
requirements (per an approved and issued DFS). This shall include at the
receiving, storage, value-added operations, packaging, shipping, or customer
service stages of Buyer's use, and/or sale of the supplied part or product.
Rejected part or product shall be reviewed by the Buyer with the Seller for the
purpose of making a disposition of the part or product. The Seller shall have
the opportunity to review rejected part or product, and to dispute the
determination of rejection.
Where a rejection is found to be valid, the Seller shall perform an analysis of
the part, product, process, or other element within the Seller's scope of
operations, as necessary, and issue a report of corrective action to the Buyer.
The Seller shall allow buyer representatives to discuss, review, inspect,
measure, test, or otherwise evaluate part or product issues with Seller
representatives within the Seller's manufacturing facility(ies), at a Buyer's
facility, or at a mutually agreed upon location. Upon suitable notification to
the Seller, Buyer shall be allowed to verify compliance with this agreement, and
to perform on-site audits of the Seller's
12
manufacturing processes related to part or product as specified and purchased by
the Buyer.
Seller efforts to improve, cost-reduce, boost efficiencies, or otherwise change
the part, product, or the process originally agreed to, shall be reviewed in
advance with the Buyer, whether or not this activity has any affect or influence
on the part or product meeting the Buyer's engineering specifications or
engineering drawing requirements.
The Seller shall review plans to subcontract to another corporate entity, any
part or product the Buyer has contracted with the Seller to supply. This review
shall be completed prior to any such subcontracting, and shall include the
review and approval by the buyer of the Seller's quality plan for the
subcontracted part or product. In some instances, Buyer will require first piece
samples, including inspection and test data, from the subcontractor prior to
approval of part or product manufactured by the subcontractor. In any event, the
Seller shall remain fully and completely responsible for supplying the part or
product to the Buyer's engineering specification and engineering drawing
requirements.
All air chamber testing shall be in accordance with Select Comfort's Air
Chamber, Rubber/Cotton Vulcanized Construction, Test and Inspection
Specification SP-004.
QUALITY DISCOUNT PERCENTAGE: as of February 2002 is XXX and shall remain in
effect as outlined in Article 8.
[Portions of this Exhibit have been omitted pursuant to a request for
confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934,
as amended. A copy of this Exhibit with the portions intact has been filed
separately with the Securities and Exchange Commission.]
WARRANTY SCHEDULE:
January 1, 2002 - December 31, 2003 36 Month warranty period
January 1, 2004 - December 31, 2005 48 Month warranty period
January 1, 2006 and beyond 60 Month warranty period
13
EXHIBIT III
Master Specification
[The entire contents of this Exhibit III have been omitted pursuant to a request
for confidential treatment under Rule 24b-2 of the Securities Exchange Act of
1934, as amended. A copy of this Exhibit with the contents intact has been filed
separately with the Securities and Exchange Commission.
14
Exhibit IV
Forecasted Volume
Fiscal Year Volume Range
2002 425,000 - 475,000
2003 450,000 - 500,000
2004 475,000 - 525,000
2005 525,000 - 575,000
Best effort will be made to submit standard purchase orders that represent 12
equal monthly quantities plus or minus 20% in any given month.
Fiscal Year means the twelve-month period from January 1 through December 31.
Any changes to the volumes represented above shall be mutually agreed to with a
minimum of three months notice prior to the requested change date.