PO TERMS AND CONDITIONS

AGREEMENT

This purchase order ("PO") is an offer by Sleep Number Corporation or its affiliates ("Sleep Number") to purchase goods, as defined herein, from the seller listed on the PO ("Supply Partner") and is limited to the terms and conditions contained herein. Any plans, specifications, instructions, prototypes or samples related to the items or materials to be purchased as identified in this PO ("Goods") are hereby incorporated by reference. Except as provided in "Additional Agreements" below, this PO constitutes the entire agreement between Sleep Number and Supply Partner with respect to the Goods described herein.

ADDITIONAL AGREEMENTS

If the parties have entered into a master supply or services agreement ("MSA") related to the Goods or other services to be rendered by Supply Partner and such MSA is in effect as of the date of this PO, then the terms of the MSA supersede those of this PO. Additionally, if the parties have entered into a written agreement regarding exclusivity and/or volume purchase rebates, the terms and conditions of those agreements shall be incorporated herein by reference and, in the event of conflict, those agreements shall control solely to the extent of such conflict.

PRICE

If this PO is not priced, it shall be filled at prices no higher than those last quoted or charged, whichever is less, to Sleep Number for the same Goods. Charges for boxing, packaging or cartage will not be allowed or paid unless otherwise contained in the specifications or expressly stated on this PO. Except for state and local sales and use taxes, prices shall include of all taxes whether or not such taxes are set forth separately on any invoice.

NO ALTERATIONS

Notwithstanding any waiver or any oral agreement or any instruction, term or condition that may be contained in a quotation, acknowledgement, invoice or other written document of Supply Partner, no addition to, waiver or modification of any of the provisions herein contained shall be of any force or effect unless made in writing and executed by Sleep Number. Sleep Number's submission of the PO is conditioned on Supply Partner's agreement that any terms different from or in addition to the terms of the PO, whether communicated orally or contained in any confirmation, invoice, acknowledgement, release, acceptance or other communication, irrespective of the timing, shall not form a part of the PO even if Supply Partner purports to condition its acceptance of the PO on Sleep Number's agreement to such additional or different terms. Any such additional or different terms are hereby deemed material alterations and notice of objection and rejection of them is hereby given.

ACCEPTANCE

This PO may be accepted by Supply Partner only in accordance with the terms hereof. This PO shall be deemed to have been accepted in the event of Supply Partner's a) commencement of any performance called for hereby; b) shipment of Goods in accordance with the PO; c) written acknowledgement hereof, electronic or otherwise; or d) failure to reject the PO in writing, electronic or otherwise, prior to the time specified for performance in the PO.

CHANGES BY SLEEP NUMBER

Sleep Number may, by written change order at any time prior to the time specified for performance in the PO, suspend or cancel performance in whole or in part, make changes in quantities, drawings, designs, specifications, method or manner of shipment or time, place or manner of delivery, require additional work, or direct the omission of work. If any such change causes an increase or decrease in the cost of the Goods or the time required for performance, this PO shall be modified in writing as such. Any claim for adjustment to price or schedule shall be deemed waived unless asserted in writing within thirty (30) days from the date of receipt by Supply Partner of the change order.

CHANGES BY SUPPLY PARTNER

Supply Partner may not change or deviate from this PO without Sleep Number's express written consent. Any process changes, design changes or deviations must be submitted to Sleep Number for written approval prior to implementation.

QUALITY WARRANTY

Supply Partner expressly warrants that all Goods and workmanship with respect to the Goods will be in exact accordance with the PO and will be free from defects in design (except to the extent such is solely attributable to Sleep Number), material and workmanship and will be merchantable and fit for their particular purpose ("Quality Warranty"). Such Quality Warranty will survive delivery or acceptance of or payment for the Goods.

INVOICES AND PAYMENT

Sleep Number will pay undisputed invoices via ACH within forty-five (45) days. Supply Partner shall be paid upon receipt by Sleep Number of a separate, acceptable invoice for each shipment of the Goods. Payment due dates, including discount periods, will be computed from the date of receipt of the Goods or the date of receipt of an acceptable invoice, whichever is later, to the date Sleep Number's check is mailed or, if paid electronically, to the date paid. In no event shall any invoice date precede the shipment date. All Goods delivered in excess of the quantities specified herein will be retained at no cost by Sleep Number. Sleep Number may set off any amount owed by Supply Partner to Sleep Number against any amount owed by Sleep Number to Supply Partner.

COMPLIANCE

Supply Partner represents and warrants that all Goods supplied hereunder are and have been produced, packaged and delivered in compliance with and Supply Partner agrees to be bound by all applicable federal, state and local laws, orders, rules and regulations ("Applicable Laws"). Supply Partner agrees that, at no additional cost to Sleep Number, it will undertake to provide all information and documentation requested by Sleep Number which, in Sleep Number's sole discretion, is reasonably necessary to establish Supply Partner's and/or Sleep Number's compliance with any Applicable Law.

CODE OF CONDUCT

Supply Partner represents and warrants that it will, at all times, comply with Sleep Number's "Code of Conduct for Business Partners" as may be amended from time to time. A current copy of the "Code of Conduct for Business Partners" is available at http://www.sleepnumber.com/vendors.

INDEMNIFICATION AND INSURANCE

Supply Partner agrees to protect, hold harmless and indemnify Sleep Number from and against any and all claims, actions, liabilities, losses, costs or expenses, including any attorneys' fees ("Losses") a) arising out of any actual or alleged infringement of any patent, trademark, trade secret or copyright by any Goods sold to Sleep Number hereunder; or b) arising out of any actual or alleged death of or injury to any person or damage to any property or any other damage or loss by whomsoever suffered, resulting or claimed to have resulted from, in whole or in part, any actual or alleged defects in the Goods, including actual or alleged improper construction or design of the Goods (except to the extent such defective design is solely attributable to Sleep Number); or c) arising from the failure of the Goods to comply with the PO or with any express or implied warranties of Supply Partner; or d) arising out of any actual or alleged violation of any Applicable Law by the Supply Partner, the Goods or their manufacture, possession, use or sale; or e) arising from any act or omission of Supply Partner, its agents, employees or subcontractors. Supply Partner shall maintain, at its sole expense, such policies of insurance as will adequately protect Sleep Number against any such Losses arising out of the manufacture, sale, packaging or delivery of any Goods but in no event shall such coverage be in an amount less than $2,500,000 per occurrence or as may be statutorily required. Such insurance coverage shall provide for the satisfaction of any liability of Supply Partner to Sleep Number resulting from operation of the indemnity provisions hereof or from any operation of law, as well as the satisfaction of any liability of Supply Partner to any third party. Supply Partner agrees to submit certificates of insurance evidencing its insurance coverage when requested by Sleep Number. All such policies shall be in a form, with carriers and in such amounts acceptable to Sleep Number. Supply Partner's indemnification obligations hereunder includes the indemnification of Sleep Number for consequential damages in situations where such consequential damages are the proximate result of the Goods' a) containing mechanical, material or workmanship defects or failure to meet the specifications at a rate greater than five percent (5%) of Goods purchased in the prior four (4) week period as a result of or in connection with a particular type or kind of breach (or group of breaches) of the Quality Warranty which are generally similar in nature, kind or cause; or b) failure to meet any consumer product safety standard or banning regulation applicable to the Goods; or c) containing a defect which could create a substantial product hazard to consumers; or d) creating an unreasonable risk of serious injury or death. This indemnification clause shall not be construed to preclude or limit any other rights or remedies available to the parties.

RISK OF LOSS

Unless otherwise specifically provided on the face of this PO, shipping terms shall be FOB destination and the risk of loss of the Goods shall remain with the Supply Partner until they are accepted by Sleep Number. Any insurance purchased to cover loss or damage to the Goods in transit to Sleep Number shall be solely at Supply Partner's expense.

PUBLICITY; USE OF MARKS

Supply Partner will not to disclose the ongoing business dealings between it and Sleep Number including the Terms and Conditions of any PO. Supply Partner may not use or permit the use of Sleep Number's name, brand, service or trademarks nor refer to or identify Sleep Number in any advertising or publicity releases, promotional or marketing materials. The obligation of Supply Partner under this provision shall be subject to disclosure obligations as may exist under federal or state securities laws or regulations.

GOVERNING LAW

This PO is, in all respects, governed by the substantive laws of the State of Minnesota without regard to conflicts of laws principles. The parties irrevocably and unconditionally consent to submit to the jurisdiction of the courts of the State of Minnesota and of the United States of America located in Hennepin County, Minnesota which shall have the exclusive jurisdiction for any actions or proceedings arising out of or related to the PO and the parties agree not to commence any action or proceeding relating hereto except in such courts.

CISG EXCLUSION

The United Nations Convention for the International Sale of Goods and any amendments thereto shall not apply to this PO.

ASSIGNMENT

Supply Partner may not assign this PO or any interest therein nor may Supply Partner delegate any of its rights or obligations under the PO.

TIMING

Time is of the essence in Supply Partner's performance of its obligations hereunder. Supply Partner will immediately notify Sleep Number if timely performance under the PO is delayed or likely to be delayed. Delivery of such notice does not waive Supply Partner's obligations or otherwise excuse Supply Partner's performance under the PO.

DELIVERY OF GOODS

Supply Partner shall deliver the goods to the location, on the date and in the quantities specified in the PO. Without limiting the foregoing, Supply Partner shall observe the requirements of any Applicable Law relating to the packaging, labeling, reporting, carriage and disposal of the Goods.

LIENS ON AND TITLE TO GOODS

All Goods delivered by Supply Partner hereunder shall be free and clear of all liens or encumbrances whatsoever. Title to Goods shall pass to Sleep Number only upon delivery of the Goods in conformity with and as specified in the PO and then only after same has been accepted and not rejected by Sleep Number.

FORCE MAJEURE

No liability or loss of rights shall result to either party from delay or failure in performance caused by force majeure or other circumstances, including, but not limited to, acts of God, fire, flood, earthquake, war (declared or undeclared), governmental action or orders, strikes, lockouts, labor troubles or other industrial disturbances, accidents, embargoes, blockage, riots, insurrection or any other similar cause not existing as of the date of this PO which is beyond the reasonable control of the party affected thereby provided, however, that the party claiming such effect has exerted all reasonable efforts to avoid or remedy it and thereafter takes all reasonable steps to mitigate it and any damages that may therefrom. The party prevented in the performance of its obligations hereunder shall notify the other as soon as is reasonably practicable and use diligent efforts to resume performance as quickly as possible.

WAIVER

No failure or delay by either party in exercising any right, power or privilege granted hereunder nor any single or partial exercise thereof, will operate as a waiver.

NOTICE THREATENED ACTION

Supply Partner shall immediately notify Sleep Number of any information of which it becomes aware of or receives regarding any threatened or pending action by or from any third party including competent governmental authority that relates to Sleep Number and its purchase of Goods from Supply Partner.