Supply Agreement - Select Comfort Corp.
SUPPLY AGREEMENT
BY AND BETWEEN
SELECT COMFORT CORPORATION
AND
XXXXX
[Portions of this Exhibit have been omitted pursuant to a request for
confidential treatment under Rule 406 under the Securities Act of 1933, as
amended. A copy of this Exhibit with the portions intact has been filed
separately with the Securities and Exchange Commission]
August 23, 1994
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SUPPLY AGREEMENT
THIS SUPPLY AGREEMENT, made and entered into this 30th day of August 1994, by
and between SELECT COMFORT CORPORATION, a corporation organized and existing
under the laws of the State of Minnesota, having its principal place of
business and office at, 6105 Trenton Lane North, Minneapolis, Minnesota
55422, hereinafter referred to as "Select," and XXXXXXX, a.s., organized
under the laws of XXXXXX and having its principal place of
business at XXXXXXXXXX, hereinafter referred to as "Supplier."
[A portion of this recital has been omitted pursuant to a request for
confidential treatment under Rule 406 under the Securities Act of 1933, as
amended. A copy of this exhibit with this recital intact has been filed
separately with the Securities and Exchange Commission]
WITNESSETH:
WHEREAS, Select is a user of the goods hereinafter described and
desires to establish a formal relationship for the purchase from Supplier of
such goods; and
WHEREAS, Supplier is a manufacturer and supplier of such goods and is
willing to provide and sell them to Select, 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.
DEFINITIONS
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 air chambers for bedding purposes as manufactured
by Supplier according to Exhibit IV and enclosures numbers 1-11,
including improvements to such products as that term is defined below.
1.2 "North America" shall mean the United States of America, including its
territories and possessions, Canada and Mexico.
1.3 "Improvements" shall mean modifications and/or enhancements to the design
of patented products owned by Select, developed by either party during
the term of this Agreement.
ARTICLE
2.
SUPPLY AND PURCHASE
2.1 During the initial term of this Agreement, Select agrees to purchase from
Supplier, and Supplier agrees to supply to Select, 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 I attached hereto.
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2.2 Supplier agrees that all air chamber "Products" as specified in
Enclosures 1-11, shall deliver exclusively to Select. Inquiries that
Supplier receives relative to air chambers as specified in Enclosures
1-11, shall be directed to Select.
ARTICLE
3.
ORDERS, DELIVERY AND MODIFICATION OF PRODUCTS
3.1 Purchase Orders. Select shall submit purchase orders for the Products 90
days prior to the requested delivery date. The delivery date will be the
date the order is expected to arrive at the German seaport. Supplier
shall confirm within one (1) week the purchase orders and delivery dates
in writing. All purchase orders shall be in accordance with the terms
and conditions of this Agreement and at the prices established herein.
3.2 Delivery of Products. Supplier shall deliver the Products within the
times (which is of the essence) 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 Select's
instructions and specifications. Select reserves the right to adjust the
mix of the specifications on purchase orders up to 45 days prior to the
scheduled ship date.
3.3 Shipping Terms. The initial shipping term for Products delivered by
Supplier to Select pursuant to this Agreement shall be the shipping term
set forth in Exhibit II attached hereto. 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 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 II to reflect the changed shipping term.
Such changed shipping term and prices shall be substituted for the
shipping term and prices then set forth in Exhibit II, and a new Exhibit
II, as so modified, shall be attached to the Agreement.
3.4 Packing and shipping will be done according to the Master Specification
(Exhibit IV) and Select instructions which will be in conformity with the
other paragraphs of this Agreement.
ARTICLE
4.
QUALITY OF PRODUCTS
The quality of all Products delivered by Supplier shall be in accordance with
the Master Specifications (Exhibit IV) and meet any and all applicable laws
and regulations promulgated by any federal, state, local or municipal
governmental authority or agency, including, but not limited to, public
safety, health and environmental standards, to be clearly defined by Select
from time to time.
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ARTICLE
5.
COOPERATION
REVISED 9/25/95
The parties agree to cooperate in research and development efforts relating to
quality improvement and cost reduction of the Products. Such research and
development shall take the form and extent as mutually agreed to by the parties
from time to time.
ARTICLE
6.
PRICES AND PAYMENT
REVISED 9/25/95 6.2
6.1 Prices and Adjustments. The initial prices to be paid by Select for the
Products purchased hereunder shall be the prices set forth in Exhibit II
attached hereto. In addition to any changes to such prices pursuant to
Paragraph 3.3 hereof, such prices may be subject to annual adjustments as
agreed to by the parties hereto in writing. Such adjusted prices shall
be substituted for the prices then set forth in Exhibit II, and a new
Exhibit II, as so modified, shall be attached to this Agreement.
6.2 Payment Terms. Payment for delivered Products shall be made via a wire
transfer by Select in United States Dollars thirty (30) days from the
date of the Bill of Lading for Products ordered and delivered. From time
to time Select may wish to pay for delivered Products prior to sea
shipment at a discounted price as set forth in Exhibit II.
Select Comfort Corporation XXXXXXX
By:_________________________________ By:____________________________________
Title:______________________________ Title:_________________________________
Date:_______________________________ Date:__________________________________
[A portion of this Section has been omitted pursuant to a request for
confidential treatment under Rule 406 under the Securities Act of 1933, as
amended. A copy of this Exhibit with this Section intact has been filed
separately with the Securities and Exchange Commission]
ARTICLE 4.
QUALITY OF PRODUCTS
The quality of all Products delivered by Supplier shall be in accordance with
the Master Specifications (Exhibit IV) and meet any and all applicable laws
and regulations promulgated by any federal, state, local or municipal
governmental authority or agency, including, but not limited to, public
safety, health and environmental standards, to be clearly defined by Select
from time to time.
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ARTICLE 5.
COOPERATION
The parties agree to cooperate in research and development efforts relating to
quality and costs of the Products and to improvement in the quality of the
Products. Such research and development shall take the form and extent as
mutually agreed to by the parties from time to time.
ARTICLE 6.
PRICES AND PAYMENT
6.1 Prices and Adjustments. The initial prices to be paid by Select for the
Products purchased hereunder shall be the prices set forth in Exhibit II
attached hereto. The prices will be in effect on a calendar basis running from
January 1 through December 31 of each year. In addition to any changes to such
prices pursuant to Paragraph 3.3 hereof, such prices may be subject to annual
adjustments as agreed to by the parties hereto in writing. Such adjusted prices
shall be substituted for the prices then set forth in Exhibit II, and a new
Exhibit II, as so modified, shall be attached to this Agreement.
6.2 Payment Terms. Payment for delivered Products shall be made by Select in
United States Dollars no later than thirty (30) days from the date of the Bill
of Lading for Products ordered and delivered. Select shall open an L/C minimum
15 days in advance before each shipment. From time to time Select may wish to
pay for delivered Products prior to sea shipment at a discounted price as set
forth in Exhibit II.
ARTICLE
7.
TAXES
Except as otherwise provided in this Agreement, Supplier 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 XXXXXXX. Supplier shall not be responsible and shall not
pay any taxes or charges as outlined in above levied after delivery to Select.
ARTICLE
8.
ACCEPTANCE AND WARRANTY
8.1 Acceptance of Products. Select shall conduct any acceptance tests at the
time the Products are being prepared for shipment to Select's customers
at its principal place of business in Minneapolis, Minnesota, not later
than one (1) year from the date of receipt. Any Products not rejected by
Select by written notice to Supplier within such period shall be deemed
accepted. Any Products rejected by Select shall be reported in
accordance with the Claim Procedure (Exhibit III).
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8.2 Warranty.
8.2.1 Supplied warrants to Select for a period of twelve (12) months
from the date of delivery of the Products to Select in accordance
with Section 3.2 of this Agreement that all Products sold
hereunder shall (i) be free from any defects in design (if such
design was created by Supplier), material or workmanship and be of
good and merchantable quality, (ii) conform to Select's
specifications or any sample or prototype approved by Select and
(iii) comply and have been produced, processed and delivered in
conformity with Article 4 herein.
8.2.2 Supplier warrants that all Products to be delivered hereunder and
all property to be returned to Select shall be free and clear of
any and all liens and encumbrances whatsoever.
8.2.3 The foregoing warranties shall survive inspection of, delivery of
and payment for the Products and shall run in favor of Select and
its customers. If Supplier breaches any of the foregoing
warranties during the twelve-month period, or if Supplier fails to
perform or comply with any provision of this Agreement, Supplier
shall be liable to Select for any and all costs, expenses
(including reasonable attorneys' fees, court costs and litigation
expenses) and damages arising therefrom.
8.3 Quantity obligations.
8.3.1 Select undertakes to purchase annually minimum volumes as
indicated in Exhibit I of this Agreement.
8.3.2 Supplier undertakes to produce annually minimum volumes as
indicated in Exhibit 1 of this Agreement.
ARTICLE
9.
PROPRIETARY RIGHTS
9.1 Select retains all proprietary rights in and to all designs of air
chambers, as specified in Enclosures 1-11.
9.2 The Supplier undertakes to continuously develop an activity of research
concerning the quality improvements of the Products taking into
consideration the market requirements and the economical production.
The development costs are to be borne by the Supplier.
9.3 The Supplier undertakes to develop the product according to special
request of Select. Such improvements are made for consideration on basis
of mutual written agreements of
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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.
9.4 Supplier retains all proprietary rights in and to all designs,
engineering details and other data pertaining to its manufacturing
technology as specified in the Master Specification (Exhibit IV) and
Enclosures 1-11.
ARTICLE
10.
TRADEMARKS
Nothing contained in this Agreement will be deemed to grant either party any
right, title 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.
ARTICLE
11.
CONFIDENTIALITY
Each party agrees that all information disclosed to it or any of its
affiliates by the 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 to any third person or party by maintaining 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 this Agreement.
ARTICLE
12.
COMPETITIVE ACTIVITIES
During the term of this Agreement, Supplier will not (a) participate in the
management or operations of any enterprise engaged in any activities in
competition with the business of Select, or (b) cause or permit any enterprise
in which Supplier participates or invests to engage in any such activities.
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 three
(3) years and thereafter shall be automatically renewed for successive
terms of one (1) year each, unless either party provides written notice
to the other party at least ninety (90) days prior to the expiration
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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 thirty (30)
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 shall 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 an
assignment for the benefit of its creditors or (iv) go into
liquidation or receivership; (2) a trustee, receiver or
other equivalent officer is appointed for the other party
by any court or governmental authority or any third party
to administer or liquidate, who is not dismissed within
sixty (60) days of the date of appointment; or (3)
dissolution proceedings are commenced by or against the
other party, which are not dismissed within sixty (60) days
of commencement.
13.2.4 This Agreement may be terminated by Select or Supplier with
minimum 90 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 Supplier under the terms of Sections 4,
7, 8, 9, 10 and 11 hereof shall survive the termination of
this Agreement.
13.3.2 Within twenty (20) days after the termination of this
Agreement, each party shall return to the other any and all
proprietary and confidential information of such party then
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 and
payable under this Agreement within thirty (30) days of
termination.
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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
by one of the parties of its obligations hereunder or which renders 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 of the termination 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 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.
15.1.1 The parties hereto shall submit any disputes arising under
this Agreement to arbitration. Any disputes submitted to
arbitration shall be finally determined by arbitration
before a single arbitrator conducted in Minneapolis,
Minnesota under the Commercial Arbitration Rules of the
American Arbitration Association. The award in such
arbitration shall be final and enforceable in any court of
competent jurisdiction.
15.1.2 Select and Supplier shall each pay its own costs, expenses,
and reasonable attorneys' fees incurred in such arbitral
proceedings and shall share equally any fees for
arbitration, provided, however, that if the arbitrator
deems it more equitable to otherwise divide the costs,
expenses, attorneys' fees and arbitral fees between the
parties in dispute, the arbitrator shall designate in his
award which
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party is entitled to recover all or a portion of its costs
necessarily incurred in the arbitration procedures.
15.2 Governing Law. This Agreement shall be governed by, and interpreted and
construed in accordance with, the laws of the State of Minnesota.
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,
express or implied, on behalf of or in the name of the other party. In
fulfilling its obligations pursuant to this 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 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 third (3rd)
business day following the date on which such notice is mailed by
registered or certified air mail.
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
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stricken from this Agreement, but such invalidity or
unenforceability shall not invalidate any of the other terms of this
Agreement, and this Agreement shall continue in force, unless the
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 are 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 two (2) or more
counterparts in the English language, each of which shall be deemed an
original, but all of which shall constitute one (1) and the same
instrument.
16.10 Remedies Cumulative. Each of the rights and remedies of the parties set
forth in this Agreement shall be cumulative with all other such rights
and remedies, as well as with all rights and remedies of the parties
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 party against it which, in
whole or in part is based upon or arises out of any breach of any of its
obligations hereunder.
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.
16.13 Offset. In the event that any amount shall be due by either party
hereunder, the other party may, after providing written notice thereof
and a reasonable opportunity to cure, at its option, either (a) seek
reimbursement directly from the non-paying party or (b) set off any
amount that it owes to the non-paying party pursuant to this Agreement
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed on the day and year first written above.
SELECT COMFORT CORPORATION XXXXXXX
By /s/ By /s/
---------------------------------- -------------------------------------
Title President & CEO Title General Manager
------------------------------- ----------------------------------
[A portion of this signature page has been omitted pursuant to a request for
confidential treatment under Rule 406 under the Securities Act of 1933, as
amended. A copy of this Exhibit with this signature page intact has been filed
separately with the Securities and Exchange Commission]
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Exhibit I.
ANNUAL MINIMUM VOLUME
Revised 9/25/95
Fiscal Minimum Number
Year Chambers(pcs)
------ -------------
* Fiscal 1995 77,000
Fiscal 1996 200,000
**Fiscal 1997 230,000
Best effort will be made to place orders for approximately equal monthly
quantities.
FISCAL YEAR means the twelve month period from January 1 through December 31.
* Period from 7/1/94 - 12/31/95.
** For planning purposes, volumes for 1997 and beyond will include a minimum of
a 15% increase over the prior year. Final volumes for 1997 will be negotiated
in March of 1996.
Select Comfort Corporation Supplier
By: /s/ Mark L. de Naray By: /s/ Illegible
------------------------------------ --------------------------------
Title: CEO Title: General Director
--------------------------------- -----------------------------
Date: October 13, 1995 Date: October 3, 1995
---------------------------------- ------------------------------
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EXHIBIT II.
PRICES AND SHIPPING TERMS
Revised 9/25/95
Part Number Price
----------- -----
100270 US $ xxxx
100271 US $ xxxx
100272 US $ xxxx
100273 US $ xxxx
100274 US $ xxxx
100275 US $ xxxx
100276 US $ xxxx
100277 US $ xxxx
100278 US $ xxxx
100279 US $ xxxx
100281 US $ xxxx
[Portions of this section have been omitted pursuant to a request for
confidential treatment under Rule 406 under the Securities Act of 1933, as
amended. A copy of this section with the omissions intact has been filed
separately with the Securities and Exchange Commission.]
SHIPPING TERMS
- FOB German Sea Port, full 20' or 40 container delivered.
- If the goods are delivered costs will be according to Select's request by
air, the air freight costs will be added to the invoice.
- Validity: January 1, 996
- 1990 Incoterms as defined by the International Chamber of Commerce
PAYMENT TERMS
- See article 6, prices and payment 6.2
- If payment by Select is made prior to sea shipment prices will be reduced by
1.5%.
Select Comfort Corporation Supplier
By: /s/ Mark L. de Naray By: /s/ Illegible
------------------------------------ --------------------------------
Title: CEO Title: General Director
--------------------------------- -----------------------------
Date: October 13, 1995 Date: October 23, 1995
---------------------------------- ------------------------------
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EXHIBIT III
CLAIM PROCEDURE FOR DEFECTIVE GOODS
1.1 As air cores are identified in our assembly process which are defective
and do not meet Select Comforts quality standards, the serial number will be cut
out of the air core in a dimension of 2" x 3" which will ensure destruction of
the air core. The air core will then be disposed of immediately.
1.2 Select Comfort announces on a monthly basis (e.g. for the period of 1 -
31 May 1993) all the claims that have risen during the period in writing to
Supplier specifying the following data:
-Date of announcement
-Period of the claims collected
-Serial numbers per size of the products being claimed
-Codes of defects for each product as follows:
The following code will be indicated on the form for all claims that are being
submitted by Select Comfort.
B-Baffle D-Damaged OD-Outdated
H-Hole L-Leak
S-Stain Z-Size
For the same type of defects, but in the case of being returned by a customer to
Select Comfort.
RB RD ROD
RH RL
RS RZ
(i.e., L = Claimed by Select Comfort due to leak, RL = Being returned to Select
Comfort by a customer due to a leak.)
The claim code "O" (others) is not used and accepted, unless the specific nature
of the claim is described.
Claims will be submitted to Supplier within the first week of the following
month of the period discussed.
1.3 The serial number tags for that period will be returned to Supplier and
the cost of returning the tags will be borne by Supplier.
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1.4 The next letter of credit that is established immediately following
notification of the claim will be reduced by the value of the air cores in
addition to the cost of the return for the serial number tags, the original
incoming freight charge for the defective air core ($1.25 U.S. Dollars each) as
well as the original incoming customs and brokerage fees ($0.25 U.S. Dollars
each).
1.5 In the event that the number of defective products exceed 3%, Select will
notify Supplier in writing with the quantity and description of defects,
according to point 1.2. (Exhibit III), and Select will keep the air chambers in
tact. Supplier may request return of the defective air chambers at the expense
of the Supplier for evaluation. Pending notification and/or evaluation,
Supplier will respond in writing as to the disposition of the defective products
no later than 2 weeks after the defect notice is issued and/or evaluation has
been completed.
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EXHIBIT IV
MASTER SPECIFICATION
Air Chambers for Bedding Purposes
I. PREFACE
The air chamber is an inflatable product made of rubberized textile that can
best be described as a "box" or "gusseted" design.
The internal structure is maintained through the use of a series of inner
parallel I-beams running parallel to the sidewalls, perpendicular to the inner
I-beams to stabilize the unit. The material used in this construction is 24
gauge rubber calendared to a cotton fabric and assembled before curing. The
internal I-beams are a tri-laminated cotton/double layer rubber/cotton design to
provide strength.
II. MANUFACTURING TECHNOLOGY
1. CONSTRUCTION
The upper and lower cover as well as the four sidewalls of the product
are made of rubberized textile.
Inner elements:
-ribs forming the air chambers - they determine the structure of the
product.
-cover strip which is made of the same rubberized cotton as the ribs.
-one piece of extruded cured rubber hose for connecting the compressor.
2. MATERIAL OF THE PRODUCT
2.1. Rubberized fabric cover consisting of cotton, latex bonding layer
and double layer rubber film.
CHARACTERISTICS OF COTTON: Technical parameters are determined by the Supplier
chosen according to the requirements against the final products.
CHARACTERISTICS OF LATEX: Mixture of natural and artificial latex.
CHARACTERISTICS OF RUBBER FILM: Natural caputchouc based, especially airtight
compound with Jasmine fragrance.
2.2 Rubberized cotton (for ribs and cover strip)
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Characteristics are as follows:
Material of inner element: cotton or polyamid
Rubber film: compound from natural and artificial caoutchouc.
2.3 Port (cured, extruded rubber hose connection)
Made of natural and artificial caoutchouc based compound by pressing technology.
2.4 Corner and valve reinforcing by rubber film inserted to corners, the
material of which is the same as that of one of the above listed compounds.
xxxxx
[Portions of this section have been omitted pursuant to a request for
confidential treatment under Rule 406 under the Securities Act of 1933, as
amended. A copy of this section with the omissions intact has been filed
separately with the Securities and Exchange Commission.]
<PAGE>
4. IDENTIFICATION
Serial number of the product with 11 characters where the characters:
2nd and 3rd represent the year of manufacture
4th and 5th represent the week of manufacture
6th represents the day of the week
Place: on the short side at 3 - 6 cm from the valve
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Explanation of the whole number:
294203 04360
2 - number of the manufacturing line
94 - year
20 - week
3 - day of the week
04 - month, in which the semi-finished product was prepared
360 - semi-finished product number
5. PACKING
Liner foil and box. Only one type is allowed to be packed in one box. Packing
instructions given by Select - Enclosure number 1.
6. STORING INSTRUCTIONS
The product must be stored in a warehouse. The product has to be protected by a
plastic foil. The maximum allowed temperature of the warehouse should be 25
degrees C (77 degrees F). The product cannot be exposed to sunlight, and
ultra-violet rays.
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Enclosure #1
Select's Packing Instructions
Ref. # Pcs/box Box size (mm) Liner foil size (mm)
------ ------- ------------- --------------------
A8-043 6 550x380x260 570x200x800
A8-048 5 550x380x260 570x200x800
A8-046 6 550x380x260 570x200x800
A8-040 7 550x380x260 570x200x800
A8-045 6 550x380x260 570x200x800
A8-044 6 550x380x260 570x200x800
A8-049 4 550x380x260 570x200x800
A8-041 4 550x380x260 570x200x800
A8-047 4 550x380x260 570x200x800
A8-042 4 550x380x260 570x200x800
Marking instruction of the box of Select's air cores
Select Comfort part number
Purchase order number
Quantity
Box number
Date
Made in Czech Republic
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III. Design and engineering details
Select Comfort Air Chamber Sizes
Size/inflated Size/inflated Rib # Rib #
Ref. no. condition condition Length Width Bed Name
A8-043 72x26x6 1/4" 183x66x16 mm 2 17 Queen dual
A8-048 84x30x6 1/4" 213x76x16 mm 2 20 Super Queen
A8-046 72x31x6 1/4" 183x79x16 mm 2 17 Twin Long
A8-040 67x31x6 1/4" 170x79x16 mm 2 16 Twin
A8-045 76x32x6 1/4" 193x81x16 mm 2 18 Calif. King
A8-044 72x34x6 1/4" 183x86x16 mm 2 17 Eastern King
A8-049 84x36x6 1/4" 213x91x16 mm 2 20 Super King
A8-041 67x46x6 1/4" 170x117x16 mm 2 16 Full
A8-047 84x48x6 1/4" 213x122x16 mm 2 21 Super Single
A8-042 72x52x6 1/4" 183x132x16 mm 2 18 Queen Single
Designs: According to enclosures 2-11.