Exhibit 10.18


     

    Exhibit
      10.18

     

     

    AMENDED
      PRIVATE LABEL PRODUCT SUPPLY AGREEMENT

     

    THIS
      AMENDED PRIVATE LABEL PRODUCT SUPPLY AGREEMENT (“Agreement”), is made as of the
      14th day of September, 2004, replacing and superseding the initial PRIVATE
      LABEL
      PRODUCT SUPPLY AGREEMENT made as of December 22, 2003, by and between Hill-Rom
      Company, Inc. (hereinafter referred to as “Hill-Rom”), an Indiana corporation
      with an office located at 4349 Corporate Road, Charleston, South Carolina,
      29405
      and Span-America Medical Systems, Inc., a South Carolina corporation
      (hereinafter referred to as “Seller”) with its place of business located at
      Greenville,
      South Carolina, 29606. This amended Agreement replaces and supersedes the
      initial Agreement entered on December 22, 2003.

     

    WITNESSETH

     

    WHEREAS,
      SELLER desires to sell its full line of non-powered CFT mattress products
      specially manufactured as Hill-Rom private label products to Hill-Rom from
      time
      to time, and Hill-Rom desires to purchase such Products from
      Seller.

     

    NOW
      THEREFORE, in consideration of the foregoing and the mutual promises and
      covenants set forth herein, Hill-Rom and Seller agree as follows:

     

    1.  Purpose

     

    The
      purpose of this Agreement is to set forth the terms which will be applicable
      to
      the sale of Products to Hill-Rom by Seller. The “Products” shall be Seller’s
      line of non-powered CFT mattress products each of which is listed on Exhibit
      A
      in their standard, off-shelf configuration and also private labeled for Hill-Rom
      and modified to specifications agreed upon and included in this Agreement as
      set
      forth in Exhibit A. Except for the exclusive rights granted or otherwise
      available under this Agreement, each party shall continue to compete in the
      marketplace, however, notwithstanding
      the foregoing, except as specifically stated in this Agreement neither party
      is
      granted a license under this
      Agreement to any intellectual property right of the other party.

     

    2.  Purchase
      Orders

     

    All
      purchases made under this Agreement shall be with purchase orders. The purchase
      order shall identify which of the Products are being ordered and as to each
      such
      Product the quantity, shipment destination, and method of shipment and desired
      date of delivery. The terms of sale provided in this Agreement and the quantity,
      shipping destination, method of shipment and delivery dates contained in
any
      purchase
      orders accepted by Seller shall apply to the sale of Products pursuant to this
      Agreement. No additional or contrary terms printed on any purchase order,
      invoice, packing slip, acknowledgement or other similar document exchanged
      by
      the parties shall apply unless specifically accepted in a writing signed by
      both
      parties. Whether the purchase order refers to this Agreement or not, the terms
      of this Agreement shall be a part of each purchase order. Seller may accept
      or
      reject orders from Hill-Rom. No order shall be binding on Seller until accepted
      by Seller in writing. In the event that any person or entity claims that any
      of
      the Products infringe intellectual property rights of others, Seller shall
      have
      the right in its sole discretion to cancel any orders from Hill-Rom pertaining
      to the allegedly infringing products without incurring any
      liability
      to Hill-Rom in respect to those orders. In such case, Seller shall use
      commercially reasonable efforts either to obtain for Hill-Rom the right to
      continue to sell the Product or Products that allegedly infringe the
      intellectual property rights of the third person or to modify the Product or
      Products so that they become non-infringing.

     

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

     

     

    3.  Term
      and Termination

     

    
      	A.  	
              This
                Agreement commenced on December 15, 2003 (“Effective Date”), and shall
                continue in full force and effect for an initial thirty-nine month
                term
                and additional one year renewal terms unless otherwise terminated
                or
                canceled in accordance with the terms of this Agreement. Six months
                prior
                to the end of the initial term (to terminate upon the conclusion
                of the
                initial term) or at any time following the end of the initial term
                (to
                terminate any additional term), either party may terminate this Agreement
                upon not less than one hundred eighty (180) days advance written
                notice of
                termination.

            


    

     

    
      	B.  	
              If
                either party shall, at any time during the term of this Agreement,
                materially breach any obligation hereunder and such breach shall
                not be
                cured within thirty (30) days after written notice from the non-breaching
                party specifying the nature of the breach, the non-breaching party
                may
                terminate this
                Agreement immediately.

            


    

     

     

    
      	C.  	
              Seller
                shall not be required to fill any purchase order from Hill-Rom that
                has a
                delivery date falling after the termination of this
                Agreement.

            


    

     

    
      	D.  	
              The
                obligations of sections 8. Warranties, 9. Indemnification, 10. Patent
                and
                Intellectual Property Indemnification, 12. Intellectual Property
                Rights,
                13. Confidential Information, 14. Claims and Indemnification Procedure
                Rejection or Revocation of Acceptance and Limitations on Remedies,
                18.
                Assignment, Successors, and No Third-Party 19. Equitable Remedies,
                20.
                Notices, 21. Headings Entire Agreement, 22. Governing Law: Venue,
                23.
                Severability, 24. Public Announcements, and 25. Modification and
                Waiver
                shall survive the termination of this
                Agreement.

            


    

     

    4.
       Payment,
      Price, Exclusivity, Territory, and New Products

     

    
       

      
        	A.  	
                
                  Payment.
                    For goods purchased Hill-Rom shall pay Seller in full within
                    thirty (30)
                    days of the date of Seller’s invoice. Hill-Rom shall be entitled to a one
                    percent (1%) discount for payments made within ten (10) days
                    of the date
                    of Seller’s invoice. Payment shall be made by check to the address
                    reflected on the invoice, unless Seller gives written notice
                    specifying a
                    different payment address. Late payments shall be subject to
                    interest at
                    the rate of one percent (1%) per
                    month.

                

              


      

      
        	 	 


      

      
        	B. 	
                Pricing
                  and Incentives. Seller represents that the prices charged for the
                  Products are as favorable as those offered to other customers of
                  Seller
                  for substantially comparable products, whether or not such products
                  are
                  private labeled. In addition to the foregoing, Seller agrees to
                  provide a
                  volume incentive rebate to Hill-Rom for its Net Invoice Sales,
                  as defined
                  below, of Products during each Contract Year as
                  follows:

              


      

        

      
        	 	i.	[price term redacted and confidential
                treatment requested]
	 	 	 
	 	ii.	[price term redacted and confidential
                treatment requested]
	 	 	 
	 	iii.	[price term redacted and confidential
                treatment requested]
	 	 	 
	 	 	[price term redacted and confidential
                treatment requested]


      

       

    

    “Net
      Invoice Sales” means, for any specified time period, the amount invoiced for
      sales of the Products to Hill-Rom under this Agreement less purchases of
      evaluation/demonstration units and any credits and adjustments for returned
      goods during such time period.

     

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

     

    “Contract
      Year” means the fifteen month period beginning on January 1, 2004, and each
      successive twelve month period after that initial fifteen month period. The
      first Contract Year begins on January 1, 2004 and ends March 31, 2005.
      Thereafter each Contract Year shall begin on April 1 and end on the following
      March 31.

     

    
      
        	
                 C. 


              	Purchase Price.
                The initial prices for the Products shall be as specified in Exhibit
                A and
                shall remain firm until April 1, 2005. Thereafter Seller shall set
                the
                price for Products based on then existing
                market conditions and trends, provided, however, that price increases
                shall not exceed [price term redacted and confidential treatment
                requested]
                per year. Additionally, Seller shall seek to reduce the prices through
                continuing cost control and productivity improvements.
	 	 	 
	
                 D. 
                  

              	Exclusivity
	 	 	 
	 	i.	
                 Hill-Rom
                  exclusivity.
                  While this Agreement is in effect, Seller will not sell private
                  label
                  versions of the Products except for export to locations outside
                  of the
                  Territory or provide for non-powered CFT Products any of the features
                  that
                  are marked as being exclusive to Hill-Rom on Exhibit A to any purchaser
                  other than Hill-Rom except that Seller may sell certain exclusive
                  features
                  to other purchasers as replacement parts as indicated on Exhibit
                  A. In the
                  event that Hill-Rom meets the Net Invoice Sales requirements specified
                  in
                  this paragraph for purchases of Products in regard to a Contract
                  Year,
                  Seller will grant Hill-Rom the exclusive rights provided in this
                  section
                  (in addition to any exclusive rights that Hill-Rom may have independently
                  as a result of patents) for the following Contract Year. The Net
                  Invoice
                  Sales requirements are as follows: Contract Year one, [price term
                  redacted
                  and confidential treatment requested]; Contract Year two, [price
                  term
                  redacted and confidential treatment requested]; Contract Year three,
                  [price term redacted and confidential treatment requested]; amounts
                  for
                  subsequent Contract Years to be agreed to by the parties at least
                  190 days
                  prior to the beginning of those Contract Years. If the Net Invoice
                  Sales
                  of Product under this Agreement by Hill-Rom in a Contract Year
                  meet or
                  exceed the above requirement, then during the next Contract Year,
                  as long
                  as Hill-Rom complies with its other obligations under this Agreement,
                  Seller will not sell the Products to any purchaser in the Territory
                  other
                  than Hill-Rom, except for export to locations outside of the
                  Territory.

              
	 	 	 
	 	ii. 	
                Seller
                  exclusivity.
                  During the term of this Agreement, in any Contract Year in which
                  Hill-Rom
                  has received the exclusive rights provided for in the foregoing
                  paragraph
                  4(D)(i), Hill-Rom will obtain all of its requirements for non-powered
                  self
                  adjusting technology products from Seller. Despite this exclusivity
                  requirement, Hill-Rom may use non-powered self adjusting technology
                  products developed by Hill-Rom or any affiliated company (“Internal
                  Alternative
                  Products”), if Hill-Rom (a) gives Seller twelve months advance written
                  notice of
                  its election to use Internal Alternative Products and (b) releases
                  Seller
                  from its exclusivity obligations to Hill Rom under this Agreement.
                  The
                  term “affiliated company” shall be defined as a corporation, at least
                  fifty-percent of the voting stock of which is owned by Hill-Rom
                  or a
                  Hill-Rom parent company.

              
	 	 	 
	 	iii.	
                Notwithstanding
                  anything to the contrary in preceding Section 4Di., and provided
                  that
                  Hill-Rom owns valid patents protecting aspects of the VersaCare
                  CFT
                  Mattress, Seller shall not sell any version of the VersaCare CFT
                  Mattress
                  to any purchaser other than Hill-Rom, even in the event that Hill-Rom
                  fails to meet the Net Invoice Sales requirements set forth in Section
                  4Di.

              


      

       

    

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

     

    
      
        	E.  	
                Territory
                  Limits.
                  Hill-Rom agrees that the Products purchased under this Agreement
                  will be
                  sold only within the Territory, as defined in Exhibit B attached
                  hereto,
                  to buyers who intend to use them within the Territory. Hill-Rom
                  agrees
                  that it will not, without Seller’s specific written consent, sell or make
                  any Products available to any buyer when, based on the information
                  reasonably available to Hi1l-Rom, the sale or transfer of Products
                  is
                  likely to result in the sale or use of the Products outside of
                  the
                  Territory.

              


      

      
        	 	 


      

      
        	F.  	
                Territory
                  Expansion.
                  In
                  the event that Seller determines to explore the possibility of
                  selling the
                  Products
                  outside of the Territory, Seller will notify Hill-Rom and the
                  parties will negotiate in good
                  faith the possibility of expanding the
                  Territory.

              


      

      
        	 	 


      

      
        	G. 	
                New
                  Products.
                  In
                  the event Seller develops a new product that is an improvement
                  to any of
                  the Products or is a line extension of a Product developed for
                  compatibility with a Hill-Rom bed frame (a “Minor Enhancement”) or a new
                  CFT product modality (e.g. upgradeable to powered surfaces or other
                  significant functional change), (a “Major Enhancement”) Seller shall not
                  appoint any distributor
                  for the new product within the Territory without giving Hill-Rom
                  notice of
                  the product and offering to permit Hill-Rom to add the new product
                  to the
                  line of Products that Hill-Rom purchases under this Agreement at
                  prices
                  specified by Seller which shall be no less favorable than those
                  available
                  to any other distributor of Seller’s new products. If Hill-Rom accepts
                  Seller’s offer within sixty (60) days of receipt of the notice, the new
                  product shall be added to Exhibit A and listed as a new product.
                  Purchases
                  of any Minor Enhancement Products added to Exhibit A shall be applied
                  to
                  the existing minimum Net Invoice Sales requirements for exclusivity
                  and
                  volume incentives. Major Enhancement Product purchases shall not
                  count
                  toward existing minimums for exclusivity or volume discounts. The
                  parties
                  shall negotiate in good faith any new
                  minimums for exclusivity and volume discounts applicable to Major
                  Enhancement Products, but Hill-Rom shall not be deemed to have
                  any
                  exclusivity for Major Enhancements unless such new minimums and/or
                  volume
                  discounts have been agreed to in writing signed by both parties
                  and met by
                  Hill-Rom. Further,
                  in the event Hill-Rom has exclusive rights in the Territory, such
                  rights
                  shall extend to any
                  new Minor Enhancement Products added to this
                  Agreement.

              


      

    

     

    5.  Taxes

     

    
      	
               A. 

            	Where
              Seller is required to pay or collect sales, use, or other applicable
              taxes
              (except for taxes based on Seller’s income), the amount shall be added to
              the invoice as a separate item.
	 	 
	
               B. 


            	
              Seller
                shall be responsible for paying all social security, unemployment
                compensation, withholding taxes and other applicable taxes regarding
                Seller’s employees, facilities and raw materials for providing
                Products hereunder or applicable to Seller’s income hereunder and shall
                not invoice such
                taxes to Hill-Rom.

            
	 	 


    

     

    6.  Shipments/Delivery
      Scheduling

     

    
      
        	
                 A. 

              	
                Hill-Rom
                  will provide Seller a non-binding annual forecast of its requirements
                  of
                  Products. If the purchase order is used to provide forecasts then
                  on the
                  face of the purchase order, the term “Blanket Order” shall be written.
                  Purchase Orders bearing the term Blanket Order shall be for forecast
                  and
                  planning purposes only and not a commitment to purchase any
                  quantity.

              
	 	 
	
                 B. 

              	Hill-Rom
                may, at its election, specify the carrier for delivery of Products
                to be
                used by Seller.
	 	 
	
                 C. 


              	All
                shipments shall be made F.O.B. Shipping point.
	 	 
	
                 D. 

              	
                Hill-Rom
                  may cancel a purchase order or scheduled shipment at anytime prior
                  to
                  shipment by Seller.
                  Hill-Rom shall incur no liability to Seller for any cancellation
                  where
                  notice is given to Seller at
                  least thirty (30) days in advance of the scheduled delivery date.
                  Hill-Rom’s liability to Seller for cancellation
                  with less than thirty (30) days notice before the delivery date
                  shall be
                  limited to Seller’s
                  unavoidable direct costs associated with returning any components
                  or
                  materials it cannot use for Hill-Rom or its other customers and
                  its direct
                  costs for finished Products except where such Products can be included
                  in
                  orders for later shipment to
                  Hill-Rom.

              


      

    

     

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

       

       

    

    7.  Quality;
      Product Modifications

     

    
      	A.  	
              Hill-Rom
                has audited Seller and has confirmed that Seller has a formal ISO
                based
                Quality System. Seller shall maintain a formal ISO based Quality
                System or
                acceptable score on Hill-Rom Quality System Audit. Minimum acceptable
                score on Hill-Rom audit is 95% with active Corrective Action Preventive
                Action (CAPA) agreed to or in place for all other
                elements.

            


    

     

    
      	B.  	
              Hill-Rom
                shall have the right from time to time, after reasonable notice and
                agreement by Seller to a date, to audit, inspect and/or verify
                (collectively, an “Audit”) on a confidential basis the (a) records kept by
                Seller pertaining to the quality of the Products sold in connection
                with
                this Agreement, and/or (b) Products produced by Seller for Hill-Rom,
                as
                well as the production processes, facilities and quality systems
                pertaining to the Products at Seller’s regular place of business or other
                applicable location(s) at all reasonable times, including during
                the
                period Hill-Rom Products are manufactured. Hill-Rom will provide
                Seller
                with at least three (3) days-advance notice of such Audit(s). In
                the
                event, that the specified date is unsuitable to Seller, the date
                for the
                Audit will be postponed by not more than ten (10) business days to
                a date
                mutually agreeable to Seller and
                Hill-Rom.

            


    

     

    
      
        	C.  	
                If
                  Seller is not in compliance with any of Hill-Rom’s quality systems or
                  production processes, then Hill-Rom
                  shall notify Seller of such non-compliance and allow Seller to
                  correct the
                  non-compliance. If
                  Seller has not corrected the non-compliance as soon as reasonably
                  possible, but in any case within
                  thirty (30) days from the time Seller is notified by Hill-Rom,
                  then
                  Hill-Rom, at its option, may terminate this Agreement without further
                  notice as may otherwise be required under Section 3 of this
                  Agreement.

              


      

      
        	 	 


      

      
        	D. 	Hill-Rom has reviewed and accepted Seller’s proposed
                labeling for the Products. Seller reserves the right to change labels
                to
                reflect any requirement of law, any change in the Product or the
                manufacturing process, or any need for protection of intellectual
                property
                or other proprietary rights as provided in Section 7.E., otherwise,
                no
                changes shall be made in the labeling without agreement of both Seller
                and
                Hill-Rom. Seller shall notify Hill-Rom not less than sixty (60) days
                in
                advance of Seller’s intention to make any material modifications to the
                Products, labeling for the Products, the manufacturing process or
                the
                manufacturing location, unless Seller determines that earlier modification
                is necessary or advisable due to the requirements of applicable law,
                in
                which case Seller shall provide Hill-Rom with notice of such modification
                as soon as reasonably practicable. Seller shall not modify any Hill-Rom
                specification without the prior written approval of Hill-Rom, unless
                such
                modification is necessary or advisable due to requirements of applicable
                law, in
                which case such change shall be made without such approval of Hill-Rom
                and
                Seller shall provide
                Hill-Rom with notice of such modification as soon as reasonably
                practicable.


      

      
        	 	 


      

      
        	E. 	
                Hill-Rom
                  agrees to mark Products and all commercial packaging used with
                  the
                  Products with pertinent intellectual property markings, such as
                  corresponding patent, trademark, and/or copyright markings and
                  notices, as
                  from time-to-time instructed by
                  Seller.

              


      

      
        	 	 


      

      
        	F. 	
                Seller’s
                  manufacture of the private label Products for Hill-Rom, including
                  any agreed
                  upon modifications to Seller’s standard off-the-shelf products, shall
                  include any testing, including verification testing, to assure
                  that the
                  Products meet the Specifications and to comply with applicable
                  FDA
                  regulations. Seller agrees to maintain all required Device History
                  Records
                  and a Device Master Record, as those terms are defined in 21 CFR
                  Part
                  820.

              


      

    

     

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

     

    8.
       Warranties
      and Representations; Sales and Marketing Support

     

    
      	A.  	
              Subject
                to the limitations and requirements set forth in Section 14, Seller
                warrants that all Products supplied to Hill-Rom shall conform to
                the
                specifications included in Exhibit A, which have been prepared jointly
                by
                the parties, and shall be free from defects in material and workmanship
                for a period which shall be the lesser of five (5) years from the
                date the
                Products are delivered by Hill-Rom to its customer or sixty-six (66)
                months after delivery to and acceptance by Hill-Rom. Seller warrants
                that
                it is transferring good title to all Products. Seller
                specifically disclaims any and all other warranties, expressed, implied,
                or statutory, written or oral, including but not limited to, warranties
                of
                merchantability or fitness for a particular
                purpose.

            


    

     

    
      	B.  	
              If
                any of Seller’s operations or affiliated entities, or its first tier
                subcontractors’ or first tier suppliers’ operations or affiliated entities
                are located within a Non-exempt Country, it shall comply with the
                international workplace standards put forth by Social Accountability
                International in its policy statement, Social Accountability 8000
                (“SA
                8000”) and any amendment or supplement thereto; and Hill-Rom’s
                representatives shall have the right to verify conformity with the
                requirements of SA 8000.

            


    

     

    
      	C.  	
              Seller
                agrees to make available equivalent replacement parts for each particular
                Product sold under this Agreement for not less than ten (10) years
                following the last date of sale of that particular Product. During
                the
                term of this Agreement, unique replacement parts for Hill-Rom private
                label Products shall be sold only to Hill-Rom, except as expressly
                permitted in Exhibit A. Seller also agrees to provide sales and marketing
                support for the Products described more fully in Exhibit C. Hill-Rom
                agrees to the restrictions on its use of Seller’s trademarks as described
                more fully in Exhibit C.

            


    

     

    
      	D.  	
              Hill-Rom
                agrees that, except with Seller’s express written consent, it will not
                make any modifications to the Products after they are shipped by
                Seller.

            


    

     

    9.
      Indemnification

     

     

     

    
      
        	
                 A.
 

              	
                Subject
                  to the limitations and requirements set forth in this Agreement,
                  Seller
                  (i) shall indemnify Hill-Rom and save it harmless from losses resulting
                  from damage to Hill-Rom property (other than damage to Products)
                  and (ii)
                  shall indemnify Hill-Rom, its employees and agents and save them
                  harmless
                  from all claims and judgments for injury or death to persons or
                  property
                  damage (other than damage to Products) (including reasonable costs
                  of
                  litigation and attorney’s fees) made or obtained against Hill-Rom, its
                  employee, or agent, as the case may be, by third persons, including
                  Hill-Rom’s and Seller’s employees and agents, based on injuries to person
                  or property to the extent, in each of clause (i) and (ii) above,
                  that they
                  arise from Seller’s design of the Product(s), method of manufacture and
                  assembly of Products purchased by Hill-Rom, the adequacy of any
                  warnings
                  on any labels prepared by Seller, the failure of any Product purchased
                  by
                  Hill-Rom under this Agreement to comply with the regulations of
                  the U.S.
                  Food and Drug Administration (“FDA”) or other applicable governmental
                  entity within the United States of America or Canada, the negligence
                  or
                  intentional wrongful acts or omissions of Seller, or the presence
                  of
                  Seller’s employees, and/or agents on Hill-Rom’s premises in connection
                  with the performance by Seller of its obligations under this Agreement,
                  but the Seller will not be responsible for any claims, loss, damage
                  or
                  injury, including death, to the extent caused by or arising from
                  improper
                  use of the Products; the negligence or intentional wrongful acts
                  or
                  omissions of Hill-Rom, its agents or its employees; any modifications
                  to
                  the off-shelf Products or product labeling expressly requested
                  or approved
                  by Hill-Rom or any of its agents or employees; from any invention
                  or
                  technology owned by Hill-Rom and supplied by Hill-Rom; or from
                  the design
                  of any Product feature designed by
                  Hill-Rom.

              


      

       

       

      
        
          
          

        

        
          6

          
            

          

        

        
          
          

        

      

       

       

      
        
          	
                   B. 


                	Subject to the limitations and requirements
                  set forth in this
                  Agreement,
                  Hill-Rom (i) shall indemnify Seller and save it harmless from losses
                  resulting from damage to Seller’s property and (ii) shall indemnify
                  Seller, its employees and agents and save them harmless from all
                  claims
                  and judgments for injury or death to persons or property damage
                  (including
                  reasonable costs of litigation and attorney’s fees) made or obtained
                  against Seller, its employee or agent, as the case may be, by third
                  persons, including Hill-Rom’s and Seller’s employees and agents, based on
                  injuries to person or property, to the extent, in each of clause
                  (i) and
                  (ii) above, that they arise from any modification of the Products
                  by
                  Hill-Rom made without Seller’s express written consent, any change in any
                  label by Hill-Rom not approved by Seller, the design of any Product
                  feature designed by Hill-Rom, any technology or invention owned
                  by
                  Hill-Rom and supplied by Hill-Rom to Seller, the negligence or
                  intentional
                  wrongful acts or omissions of Hill-Rom, or the presence of Hill-Rom’s
                  employees, and/or agents on Seller’s premises in connection with the
                  performance by Hill-Rom of its obligations
                  under this Agreement, but Hill-Rom will not be responsible for
                  any claims,
                  loss, damage
                  or
                  injury, including death, to the extent caused by or arising from:
                  Seller’s
                  design of the Product(s), method of manufacture and assembly of
                  Products
                  purchased by Hill-Rom, the adequacy of any warnings on any labels
                  prepared
                  by Seller, or the failure of any Product purchased by Hill-Rom
                  under this
                  Agreement to comply with the regulations of the U.S. Food and Drug
                  Administration (“FDA”) or other applicable governmental entity within the
                  United States of America or Canada, or the negligence or intentional
                  wrongful acts or omissions of Seller, its agents or its
                  employees.
	 	 


        

         

        10.
Patent
          and Intellectual Property Indemnification

         

        
          	
                   A. 


                	
                  Subject
                    to the limitations and requirements contained in this Agreement,
                    Seller
                    shall indemnify and save harmless Hill-Rom, its successors, assigns,
                    customers or users of the Products, from and against all loss,
                    liability
                    and damage, including costs and expenses, resulting from any
                    claim that
                    the manufacture,
                    use, sale or resale of any Products (except the VersaCare CFT
                    Mattress)
                    supplied under this Agreement infringe any patent or patent rights,
                    copyrights, trade secrets or other intellectual property rights
                    and Seller
                    shall, when notified, defend any action or claim of such infringement
                    at its own expense. This indemnity shall not apply to any claim
                    of
                    infringement arising from
                    any Products or labeling modified at the express direction of
                    Hill-Rom, or
                    modified by anyone other
                    than Seller without Seller’s express written approval, to the extent the
                    claim of infringement is based
                    on the modifications. Nor shall this indemnity apply to any claim
                    of
                    infringement arising from
                    the use, sale or resale of any products outside of the United
                    States and
                    Canada.

                
	 	 
	
                   B. 


                	
                  Subject
                    to the limitations and requirements contained in this Agreement,
                    Seller
                    shall indemnify and save harmless Hill-Rom, its successors, assigns,
                    customers or users of VersaCare CFT Mattress purchased
                    under this Agreement, from and against all loss, liability and
                    damage,
                    including costs and
                    expenses, resulting from any claim that the manufacture, use,
                    sale or
                    resale of the Key Technology embodied in any VersaCare CFT Mattresses
                    supplied under this Agreement infringes any patent or patent
                    rights,
                    copyrights, trade secrets or other intellectual property rights
                    and Seller
                    shall, when notified, defend any action or claim of such infringement
                    at
                    its own expense. This indemnity shall not
                    apply to any claim of infringement arising in whole or in part
                    from any
                    invention, design, idea or
                    technology provided by Hill-Rom, any aspect of any Product designed
                    by
                    Hill-Rom, any Product or labeling modified at the express direction
                    of
                    Hill-Rom, or modified by anyone other than Seller without Seller’s express
                    written approval, to the extent the claim of infringement is
                    based on the
                    modifications. Nor shall this indemnity apply to any claim of
                    infringement
                    arising from the use, sale or resale of any products outside
                    of the United
                    States of America, and Canada. The Key Technology
                    means Seller’s non-powered self adjusting technology for equalizing
                    pressure over the
                    surface of a body and CFT Developments (defined
                    herein).

                


        

      

    

     

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

     

    11.
      Insurance

     

    
      Seller
        shall maintain insurance as described below during the duration of the
        Agreement. In the event of completed operations, insurance must be maintained
        for a period of not less than 12 months from the date of
        termination.

       

      Evidence
        of insurance shall be provided to Hill-Rom on Certificate(s) of Insurance
        before
        any Products are delivered or services are performed.

       

    

    
      	
              A. 

            	
              Comprehensive
                General Liability - Insurance shall include products/completed operations
                liability, contractual
                liability, personal injury liability and broad form property damage
                coverage with limits of
                at
                least $5,000,000 per occurrence and $7,000,000 aggregate combined
                single
                limit. Certificates of Insurance
                shall stipulate: “Hill-Rom, Inc. has been made an additional insured under
                this policy with
                respect to all products, operations or services provided or performed
                under contract or purchase order.”

            
	 	 
	
              B. 


            	Statutory
              Workers’ Compensation and Employer’s Liability - Certificate of insurance
              must evidence coverage
              in the State in which the work is being performed and must evidence
              a
              limit of liability for
              Employers Liability (Coverage B) of not less than $250,000 per
              accident.
	 	 
	
              C. 


            	
              Atomobile
                Liability Insurance - To be supplied if Seller will bring vehicles
                onto
                Hill-Rom’s premises. Insurance shall cover any owned, non-owned or hired
                vehicles with limits of at least $500,000 per occurrence combined
                single
                limit bodily injury and property damage.

            
	 	 
	
              D. 


            	Primary - Insurance evidenced above
              shall be
              primary and not entitled to contribution from any insurance maintained
              by
              Hill-Rom, Inc.
	 	 
	
              E. 


            	
              Cancellation
                - The Certificate of Insurance shall state that the above policies
                shall
                not be canceled, nor reduced in coverage, until after thirty (30)
                days
                written notice of such cancellation or reduction shall have been
                mailed to
                the Certificate holder.

            
	 	 
	
              F. 

            	Neither
              failure of Seller to comply with any or all of the insurance provisions
              of
              this Agreement, nor the failure to secure endorsements on the policies
              as
              may be necessary to, carry out the terms and provisions of this Agreement
              shall be construed to limit or relieve Seller from any of its obligations
              under this Agreement, including the insurance provisions.
	 	 


    

     

    12.
      Intellectual
      Property Rights

     

    
      
        
          	
                   A. 

                	SELLER’S
                  INTELLECTUAL PROPERTY. Except
                  as specifically provided below in respect to the VersaCare CFT
                  Mattress,
                  Hill-Rom shall have no right to or claim under any of Seller’s existing or
                  subsequently developed intellectual property including, without
                  limitation, any patents, trademarks, service marks, copyrights,
                  and trade
                  secrets, except to the extent required for the marketing and sale
                  by
                  Hill-Rom in the Territory of the Products purchased from Seller
                  under this
                  Agreement.


        

         

         

        
          
            
            

          

          
            8

            
              

            

          

          
            
            

          

        

         

         

        
          
            	
                    B. 


                  	HILL-ROM’S
                    INTELLECTUAL PROPERTY.
                    Except as specifically provided below in respect to the VersaCare
                    CFT
                    Mattress, Seller shall have no right to or claim under any of
                    Hill-Rom’s
                    existing or subsequently developed intellectual property including,
                    without limitation, any patents, trademarks, service marks, copyrights,
                    and trade secrets.
	 	 	 
	
                     C. 


                  	
                    NO
                      JOINT DEVELOPMENT ACTIVITIES.

                  
	 	(i)	Seller and Hill-Rom will not enter
                    into any
                    joint development activities during the term of this Agreement
except
                    as may be agreed to in a separate writing signed by the parties
                    or in
                    section D below with respect to
                    the VersaCare CFT Mattress;
	 	 	 
	 	(ii)	
                    Seller
                      shall own the rights to the force concentrator plastic strips
                      developed
                      for use with the Hill-Rom bed exit system prior to the execution
                      of this
                      Agreement, notwithstanding the contribution by Hill-Rom, if
                      any, to its
                      development;

                  
	 	 	 
	 	(iii)	
                    Hill-Rom
                      shall own the rights to the “enhanced calf” feature (a feature exclusive
                      to Hill-Rom) and the foam force concentrator strips developed
                      for use with
                      the Hill-Rom bed exit system, each developed prior to the execution
                      of
                      this Agreement, notwithstanding the contribution by Seller,
                      if any, to
                      their development;

                  
	 	 	 
	 	(iv)	
                    Except
                      as may otherwise be expressly agreed in writing, neither Seller
                      nor
                      Hill-Rom acquires any rights in the inventions or other intellectual
                      property of the other created prior to the execution of this
                      Agreement
                      including,
                      without limitation, any such invention or other intellectual
                      property
                      pertaining to those features
                      designated as exclusive to Hill-Rom in Exhibit
                      A.

                  


          

           

           

          D. 
INTELLECTUAL
            PROPERTY DEVELOPED IN RESPECT TO THE VERSACARE CFT
            MATTRESS.

           

             i. 
                   Owner of
            Inventions

           

          
            Hill-Rom
              and Seller may engage in joint development activities in respect to
              the
              VersaCare CFT
              Mattress. The Owner of Inventions (defined below) by either party shall
              be
              established as follows:

          

        

      

    

     

    a.  For
      Inventions relating to the bed frame, to the interface between the mattress
      and
      the bed frame, to the shape of the mattress so that it is compatible with the
      bed frame or with an extending or retracting foot section of the bed frame,
      or
      to the positioning or interconnection of mattress components so that they fit
      to
      the space allotted by the bed frame (“VersaCare CFT Mattress Frame
      Developments”), the term “Owner” shall mean Hill-Rom and the term “Other Party”
shall mean Seller;

     

    b.  For
      Inventions relating to non-powered self adjusting technology for equalizing
      pressure over the surface of the body (“CFT Developments”), the term “Owner”
shall mean Seller and the term “Other Party” shall mean Hill-Rom;
      and

     

    c.  For
      Inventions that are neither VersaCare CFT Mattress Frame Developments nor CFT
      Developments (“Other Developments”), the term “Owner” shall mean Hill-Rom and
“Other Party” shall mean Seller.

     

        
      ii.        VersaCare
      CFT Mattress Inventions.

     

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    An
      “Invention” shall mean any discovery, concept, or idea, whether patentable or
      not including, but not limited to, apparatus, processes, methods, compositions
      of matter, techniques, and formulae, as well as improvements thereof or know-how
      related thereto, developed by one party in the course of and in connection
      with
      the development of the VersaCare CFT Mattress after the date that the VersaCare
      CFT Mattress was added
      to
      Exhibit A, disclosed by that party in writing to the other party for use in
      the
      VersaCare CFT Mattress,
      and not
      previously known to the party receiving the written disclosure, Decisions as
      to
      whether to disclose information that may be pertinent to the VersaCare CFT
      Mattress shall be in the sole discretion of a party.

     

       
      iii.        Duties
      of
      Other Party in respect to VersaCare CFT Mattress Inventions.

     

    An
      Invention shall become and remain the exclusive property of Owner, whether
      patentable
      or not,
      and the Other Party will, without royalty or any additional
      consideration:

     

    
      
        	a.  	
                assign
                  to Owner all of the Other Party’s rights, title, and interests in and to
                  such Inventions, any applications
                  for United States and foreign Letters Patent, any United States
                  and
                  foreign Letters
                  Patent, and any renewals thereof granted upon such
                  Inventions;

              


      

      
        	 	 


      

      
        	b. 	
                assist
                  Owner or its nominees, at the expense of Owner, to obtain such
                  United
                  States and foreign Letters Patent for such Inventions as Owner
                  may elect;
                  and

              


      

      
        	 	 


      

      
        
          	c. 	execute, acknowledge, and deliver to Owner at
                  Owner’s
                  expense such written documents and instruments, and do such other
                  acts at
                  Owner’s expense, such as giving testimony in support of the Other Party’s
                  inventorship, as may be reasonably necessary to obtain and maintain
                  United
                  States and foreign Letters Patent upon such Inventions and to vest
                  the
                  entire rights and title thereto in Owner and to confirm the complete
                  ownership by Owner of such Inventions, patent applications, and
                  patents.


        

        
          	 	 


        

        
          	
                    
iv.

                   

                	
                  LICENSE
                    TO OTHER DEVELOPMENTS.
                    Hill-Rom grants to Seller a non-exclusive, non-transferable (except
                    as
                    specified in this section), paid-up, perpetual, right and license
                    to
                    manufacture, use, offer for sale, sell, display, modify and distribute,
                    internally and externally the Other Developments for any purpose.
                    Upon
                    Hill-Rom’s prior written consent which shall not
                    be unreasonably withheld, delayed or conditioned, Seller shall
                    have (i)
                    the right to transfer
                    this license to any purchaser of substantially all the assets
                    involved in
                    the production of the VersaCare CFT Mattress and (ii) the right
                    to
                    sublicense to third party contractors who produce items for
                    Seller.

                


        

      

    

     

    13.
      Confidential
      Information

     

    
      	A.  	
              During
                the course of this Agreement one party (the “Disclosing Party”) may
                disclose to the other party (the “Receiving Party”) information about the
                Disclosing Party’s business including without limitation, product
                specifications, drawings, manufacturing processes, business plans,
                marketing information and customer information (“Confidential
                Information”). Disclosure may be oral or written. The Receiving Party
                agrees that during the term of this Agreement and for a period of
                five (5)
                years from the date of termination of this Agreement it shall not
                make any
                use of the Disclosing Party’s Confidential Information except as necessary
                to perform this Agreement and shall not disclose
                the Disclosing Party’s Confidential Information to any third party, except
                as required by law
                or
                except for disclosures on a confidential basis to its accountants,
                attorneys, and financial advisors, and shall make disclosure only
                to its
                own employees who agree to maintain in confidence such Confidential
                Information consistent with this provision and have a business need
                to
                know in order for the Receiving Party to perform its obligations
                under
                this Agreement. In the event the Receiving Party is required to disclose
                Confidential Information in response to valid legal process, the
                Receiving
                Party agrees to immediately notify the Disclosing Party and assist
                the
                Disclosing Party in obtaining a protective order or other appropriate
                protection for the Confidential Information prior to
                disclosure.

            


    

     

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

     

    
      	
              B. 

            	
              Confidential
                Information shall not include information in the possession of the
                Receiving
                Party in
                the event of any of the following:

            
	 	 	 
	 	i. 	The Receiving Party was in receipt of
              the
              information at the time of disclosure by
              the Disclosing
              Party without obligation of confidentiality, as clearly documented
              by the
              Receiving
              Party’s business records;
	 	 	 
	 	ii.	
              The
                Receiving Party obtains the information from a third party free to
                disclose the information without obligation of confidentiality;
                or

            
	 	 	 
	 	iii. 	The information is disclosed to the
              public
              without breach of the obligations of this Agreement.
	 	 	 
	
               C. 

            	Seller
              and Hill-Rom each agrees that disclosure by the Receiving Party of
              Confidential Information of the Disclosing Party in violation of this
              Agreement would cause irreparable harm to the Disclosing Party and
              that
              the Disclosing Party shall be entitled to injunctive or other equitable
              relief without a further showing of irreparable harm in addition to
              any
              other remedy available to the Disclosing Party at law.
	 	 	 
	
               D. 

            	The
              terms and conditions of this Agreement are considered to be Confidential
              Information and shall not be disclosed by either party, other than
              to
              confirm and promote the relationship established by this Agreement,
              except
              as required by law and on a confidential basis to their attorneys,
              accountants and financial advisors, without the prior written consent
              of
              the other party, which shall not be withheld or delayed
              unreasonably.
	 	 	 
	
               E. 

            	Upon
              the termination of this Agreement each party, at the request of the
              other
              party, shall return to the other party all Confidential Information
              received from that party in any form including without limitation any
              memoranda or other form of data containing any such Confidential
              Information, and any and all copies, prints, and negatives.
	 	 	 


    

     

    14.
      Claims
      and Indemnification Procedure Rejection or Revocation of Acceptance and
      Limitations on Remedies

     

    
      
        
          	
                   A. 


                	Limitation
                  of remedy for breach of warranty. Hill-Rom’s sole and exclusive remedy for
                  breach of the warranty set forth in Section 8 above shall be the
                  replacement at the facility of Hill-Rom of the goods
                  or defective components involved or, at Sellers option, the refund
                  or
                  credit to Hill-Rom of an
                  amount equal to the amount paid by Hill-Rom for the defective goods
                  including shipping costs to the initial destination of the goods.
                  In the
                  event of a voluntary or mandatory recall (including any field modification
                  or inventory withdrawal) of any Product in the United States of
                  America or
                  Canada that does not result from the negligent or otherwise wrongful
                  acts
                  or omissions of Hill-Rom, in addition to replacing or repairing
                  defective
                  goods or components, Seller shall either (at Seller’s option) (a) install
                  the replacement goods or components or (b) reimburse Hill-Rom for
                  the
                  expenses reasonably incurred by Hill-Rom in connection with installing
                  the
                  replacement goods or components. Seller shall be obligated to make
                  refunds
                  or replacements only if Hill-Rom or the end-user customer (a) promptly
                  notifies Seller in writing of the defect, or non-conformity and
                  states the
                  basis for Hill-Rom’s determination of a defect or non-conformity and (b)
                  complies with Seller’s reasonable written instructions as to return of
                  good in the event that Seller elects to request that the goods
                  involved be
                  returned.


        

         

         

        
          
            
            

          

          
            11

            
              

            

          

          
            
            

          

        

         

         

        
          	 	 	 
	
                   B.  

                	Except
                  for the Intellectual Property Indemnity, in no event, including
                  but not
                  limited to cases of claims of negligence or strict liability, shall
                  either
                  party be liable to the other for lost profits, lost sales, punitive,
                  indirect, incidental, special or consequential damages. Except
                  as to
                  claims of indemnity made according to Section 14 of this Agreement,
                  in no
                  event, including without limitation
                  cases of claims of negligence or strict liability, shall Seller
                  be liable
                  for damages in excess
                  of
                  the purchase price, and shipping costs of the goods claimed to
                  be
                  defective.
	 	 	 
	
                   C. 


                	Indemnification
                  Procedure.
	 	 	 
	 	i.	
                  In
                    order to be entitled to indemnity under this Agreement, the party
                    that
                    believes that it is entitled to indemnity (“Indemnified Party”) from the
                    other party (“Indemnifying Party”), must promptly give written notice to
                    the Indemnifying Party of the basis of any claim
                    for indemnity stating the nature and the basis of the claim as
                    well as the
                    amount, to the extent that
                    it is known. The Indemnifying Party shall not be obligated to
                    provide
                    indemnity except
                    for claims as to which it receives notice prior to two years
                    after the
                    date on which this Agreement terminates.

                
	 	 	 
	 	ii.	
                  Third
                    Party Claims.
                    In
                    order to
                    be
                    entitled
                    to indemnity from claims asserted by third parties,
                    an
                    Indemnified Party must follow the procedures of this section
                    with respect
                    to claims resulting from the assertion of liability by persons
                    or entities
                    not parties to this Agreement, including claims by governmental
                    authorities for penalties, fines or
                    assessments.

                


        

      

    

     

    
      	a.  	
              The
                Indemnified Party shall give prompt written notice to the Indemnifying
                Party of any assertion of liability by a third party which might
                give rise
                to a claim by the Indemnified Party against
                the Indemnifying Party based on the indemnity agreements contained
                in this
                Agreement,
                stating the nature and basis of the assertion and the amount thereof
                to
                the extent known.

            


    

     

    
      	b.  	
              In
                the event that any action, suit or proceeding (“Legal Action”) is brought
                against an Indemnified Party with respect to which the Indemnifying
                Party
                may have liability under this Agreement, the Indemnifying Party will
                have
                the right at any time to assume and thereafter conduct
                the defense of the Legal Action with counsel of its choice and such
                defense shall include
                all appeals or reviews which counsel for the Indemnifying Party shall
                deem
                appropriate.

            


    

     

    
      	c.  	
              The
                Indemnified Party shall make available to the Indemnifying Party
                and its
                attorneys and accountants, for review and copying, all of its books
                and
                records relating to such Legal Action (except those which are subject
                to
                privilege or other restrictions on disclosure) and the parties
                agree
                to render to each other such assistance as may reasonably be requested
                in
                order to facilitate
                the proper and adequate defense of any such Legal
                Action.

            


    

     

    
      	d.  	
              The
                Indemnifying Party shall be permitted to effect any settlement of
                any
                claim without the written consent of the Indemnified Party, except
                to the
                extent that the settlement (i) requires any payment or other action
                or
                agreement to refrain from acting on the part of the Indemnified Party,
                (ii) materially and adversely affects the business or business prospects
                of the Indemnified Party (iii) involves an injunction or other equitable
                relief against the Indemnified Party or its assets, employees or
                business,
                or (iv) requires an admission of liability by the Indemnified Party,
                whether or not such admission is or is not admissible in any concurrent
                or
                subsequent criminal or civil Legal Action. In any case described
                in any of
                clauses (i), (ii) or (iii) of the preceding sentence, the Indemnifying
                Party may effect any settlement of the claim with the consent of
                the
                Indemnified Party, which consent shall not be unreasonably withheld.
                In
                any case described in clause (iv), the Indemnifying Party shall not
                propose any such admission without the express written consent of
                the
                Indemnified Party, which consent may be withheld in the sole reasonable
                discretion of the Indemnified
                Party.

            


    

     

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

     

    
      	e.  	
              In
                no event will the Indemnified Party consent to the entry of any judgment
                or enter into any settlement with respect to the third party claim
                without
                the prior written consent of the Indemnifying Party, which consent
                shall
                not be unreasonably withheld.

            


    

     

    
      	f.  	
              Reporting
                of infringement and enforcement of rights. If Hill-Rom becomes aware
                of
                any infringement by a third party of the intellectual property right
                of
                Seller, Hill-Rom will promptly notify Seller in writing of its discovery
                of potential infringement and shall provide to Seller any information
                Hill-Rom has in support of such belief. Seller shall have the sole
                right,
                but not the obligation, to institute such action as it deems appropriate
                to obtain a declaration of Seller’s intellectual property rights and/or to
                terminate the infringement through negotiation, litigation and/or
                alternative dispute resolution means, at its sole discretion and
                at its
                sole cost. Seller shall have the right to select and to control counsel
                in
                any action initiated by Seller. Hill-Rom shall lend its name to the
                action
                or join as a party in any such action, and provide assistance as
                may be
                reasonably necessary to conduct the action; Seller shall reimburse
                Hill-Rom its reasonable out-of-pocket costs for rendering such assistance.
                Seller has the right to settle such action at its sole
                discretion.

            


    

     

    


    
      	 	iii.	
              Limitations
                on Indemnity. For all Products, except in respect to third party
                claims
                for personal injury, in no event shall Seller’s cumulative obligation to
                indemnify (including the cost
                to Seller of providing a defense) exceed the total of the purchase
                price
                received by Seller
                from Hill-Rom for Products purchased by Hill-Rom under this
                Agreement.

            


    

     

    15.  Force
      Majeure

     

    No
      party
      will be liable for any failure of performance (other than Hill-Rom’s obligation
      to make timely payment
      for Product shipped to Hill-Rom under this Agreement) resulting from any cause
      not within its reasonable control including, but not limited to, fire, strikes,
      lockouts, riot, insurrection, war, accidents to plant or equipment, process
      failure, mechanical failure, failure of usual source of supply, act of God,
      acts
      of the public domain, shortage of
      transportation equipment, or any acts of government whatever; provided, however,
      that the obligations of the parties hereunder shall be suspended only during
      the
      period of such delay occasioned by the occurrence of any such
      event covered by this paragraph. In the event that the obligations of one party
      are suspended due to force majeure for over ninety (90) days, the other party
      may cancel this agreement on written notice. Prompt notice to the other party
      of
      the reliance by one party on the provision of this paragraph must be made as
      soon as possible after the occurrence of any such event and must specify the
      full particulars of the event relied on.

     

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

     

     

    16.  Compliance
      with Laws

     

    Seller
      agrees that it will comply fully with all applicable federal, state and local
      laws, rules, regulations and orders
      of the
      governing authorities within the United States of America and Canada pertaining
      to the production and sale of the Products ordered, including but not limited
      to, the requirements of the EPA, OSHA, FDA, FLSA, provisions of the Equal
      Opportunity Clause of Executive Orders 11246 and 11375, small business, small
      Disadvantaged and Woman-Owned Small Business Concerns and Affirmative Action
      provisions. In the event any state or federal governmental action is initiated
      or investigation is conducted alleging that this Agreement violates the
      antitrust laws of the United States or any of the various states, either party
      may terminate this Agreement forthwith upon thirty (30) days written notice
      and
      such termination shall not constitute a breach of this
      Agreement.


     

    17.  Minority
      Subcontractors and Vendors

     

    Seller
      is
      encouraged to utilize small, disadvantaged, minority and women-owned
      subcontractors and vendors (as
      defined by applicable State or Federal law) among its sources of supply in
      the
      performance of this Agreement. Seller
      has
      disclosed to Hill-Rom that Seller currently meets the Small Business Association
      small vendor requirements.

     

    18.  Assignment,
      Successors, and no Third-Party Rights

     

    Neither
      party may assign any of its rights or obligations under this Agreement without
      the prior written consent of the other party, which consent shall not be
      unreasonably withheld or delayed. This Agreement will apply to, be binding
      in
      all respects upon, and inure to the benefit of any heirs, legal representatives,
      successors and permitted assigns of the parties. Nothing expressed or referred
      to in this Agreement will be construed to give any person other than
      the
      parties to this Agreement any legal or equitable right, remedy, or claim under
      or with respect to this Agreement
      or any
      provision of this Agreement. This Agreement and all of its provisions and
      conditions are for the sole and exclusive benefit of the parties to this
      Agreement and their successors and permitted assigns.

     

    19.  Equitable
      Remedies

     

    The
      parties acknowledge that the breach of their respective duties under Sections
      9
      (Indemnification), 10 (Patent and Intellectual Property Indemnification), 12
      (Intellectual Property Rights), 13 (Confidential Information) and/or 18
      (Assignment) would cause significant harm to the other party. Therefore,
      non-breaching party will be entitled to equitable relief including injunctive
      relief and specific performance, upon application to a court of competent
      jurisdiction without posting bond or making any showing other than a breach
      by
      the other party by a preponderance of the evidence.

     

    20.  Notices

     

    Unless
      otherwise provided herein, all notices, demands, consents, waivers and other
      communications that are required
      by this Agreement to be in writing will be deemed to have been properly given
      (a) if delivered by hand, effective
      upon
      receipt, (b) if sent by certified or registered mail, postage prepaid, return
      receipt requested, effective five (5) business days after mailing, or (c) if
      sent by a nationally recognized overnight delivery service, effective upon
      receipt, in each case to the appropriate addresses set forth below, or to such
      other addresses as a party may designate by written notice to the other
      parties:

     

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

       

       

    

    
      	
              To
                Hill-Rom:

               

              4349
                Corporate Road

              Charleston,
                SC 29405

              Attention:
                Commodity Specialist

               

              To
                Seller:

               

              Span-America
                Medical Systems, Inc.

              Attn:
                President

              70
                Commerce Center

              Greenville,
                SC 29615

            	
              With
                a required copy to:

               

              1069
                State Route 46

              East
                Batesville, IN 47006

              Attention:
                General Counsel

               

              With
                a required copy to:

               

              Wyche
                Burgess Freeman & Parham, P.A. 

              c/o
                Mr. James M. Shoemaker

              P.
                O. Box 728

              Greenville,
                SC 29602

            


    

    


     

    21.  Headings;
      Entire Agreement

     

    The
      headings in this Agreement are provided for convenience of reference only,
      and
      are not an integral part of this Agreement and will not affect its construction
      or interpretation. This Agreement, together with its Exhibits and all purchase
      orders, embodies the entire agreement and understanding between the parties
      hereto with respect to the subject matter hereof, and supersedes and cancels
      all
      previous written or oral understandings, agreements, negotiations, commitments,
      or any other writings or communications with respect to such subject matter.
      Each party acknowledges that it places no reliance on any such previous written
      or oral writings, understandings, negotiations, commitments, agreements, or
      communications.

     

    22.      
Governing
      Law; Venue

     

    This
      Agreement shall be construed as an agreement made in the State of South Carolina
      and shall be governed and construed in accordance with the laws of the State
      of
      South Carolina without regard to conflicts of laws principles. The parties
      expressly consent to the exclusive jurisdiction of the state and federal courts
      of South Carolina for any action arising under this Agreement. Any actions
      or
      proceedings with respect to any matters, arising under or growing out of this
      Agreement or the performance of this agreement, shall be instituted and
      prosecuted only in state or federal courts located in the state of South
      Carolina. The provisions of the United Nations Convention for the International
      Sale of Goods shall not apply to this Agreement

     

    23.      
Severability.

     

    The
      Provisions of this Agreement shall be severable, and if any provision of this
      Agreement shall be held or declared to be illegal, invalid, or unenforceable,
      such illegality, invalidity, or unenforceability shall not affect any other
      provision hereof, and the remainder of this Agreement, disregarding such invalid
      portion, shall continue in full force and effect as though such void provision
      had not been contained herein.

     

    24.  Public
      Announcements

     

     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

     

     

    Except
      to
      the extent that a press release or public statement is required by law, the
      parties will consult with each another before issuing any press releases or
      otherwise making any public statements with respect to this agreement or the
      transactions contemplated hereby and neither of them will issue any such press
      release or make any such public statement without the written consent of the
      other which shall not be withheld or delayed unreasonably. If written objection
      is not provided within seven (7) calendar days of receipt of the request for
      consent, consent shall be deemed to be granted. Notwithstanding the foregoing,
      neither consultation nor permission is required for any press release or public
      statement by either party relating to this agreement or the transactions
      contemplated hereby if the identity of the other party cannot be discerned
      from
      the press release or public statement or circumstances surrounding the
      release.

     

    25.       Modification
      Waiver


    This
      Agreement may not be amended except by a written agreement executed by all
      of
      the parties. No waiver of any of the provisions of this Agreement shall be
      deemed, or shall constitute, a waiver of any other provision, whether or not
      similar, nor shall any waiver constitute a continuing waiver unless expressly
      so
      stated in writing. No waiver shall be implied from conduct or a failure to
      enforce rights or delay in enforcing rights. No waiver shall be binding unless
      executed in writing by the party making the waiver.

     

    IN
      WITNESS WHEREOF, the Parties have caused this Agreement to be executed by their
      duly authorized representatives.

    
SPAN-AMERICA
      MEDICAL SYSTEMS, INC. 

     

     

     

     

    
      	
               

               

              BY:  /s/ James D.
                Ferguson             
                

              
                TITLE:
                  President/CEO

                DATE:
                  9-15-04

              

            	 	 


    

    
 

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

     

     

    EXHIBIT
      A

    


    PRODUCT
      DESCRIPTION/CONFIGURATION

    


    


    [Specifications
      and price terms redacted and confidential treatment requested]

    
 

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    

     

     

    EXHIBIT
      B - TERRITORY

     

    


    For
      all
      Products other than the VersaCare CFT Mattress, “Territory” as use in this
      Agreement shall mean the geographic territory of:

    


    (1) The
      United States of America and its territories and possessions; and

    


    (2) Canada,
      including all provinces and territories.

    


    In
      respect to the VersaCare CFT Mattress, “Territory” as used in this Agreement
      shall mean the entire world.

    
 

    
      
        
        

      

      
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    EXHIBIT
      C

    SALES
      AND MARKETING SUPPORT

    


    
      	1.	
              To
                the extend that the services of Laurie Rappl are available to Seller
                and
                can reasonably and
                practicably be made available to Hill-Rom, Seller agrees to make
                available
                Laurie Rappl for sales support at no additional charge to Hill-Rom
                for a
                period of twelve months from
                the date Hill-Rom first ships one or more Products to a customer
                in the
                Territory. Such
                sales support shall include attendance at trade shows and major customer
                sales calls.

            
	 	 
	2.	
              To
                the extent that Seller has prepared sales and marketing materials
                for the
                Products, Seller
                agrees to make those materials available to Hill-Rom in camera ready
                form
                (or in electronic/digital
                form.) These materials shall include, without limitation, product
                descriptions,
                product photographs, clinical studies, benchmarking and engineering
                data,
                and
                the like.

            
	 	 
	3.	
               Hill-Rom
                agrees that it will not use any trademark of Seller except with the
                prior
                written approval
                of Seller and that it will not attempt to register any trademark
                of the
                Seller anywhere
                in the world, nor take any actions adverse to Seller’s trademark rights
                anywhere
                in the world. The trademarks of Seller include “CFT” (federally
                registered), “PRESSUREGUARD”
                (federally registered) and “CONSTANT FORCE TECHNOLOGY”
                (unregistered) owned by Seller, and/or formatives and confusingly
                similar
                variations of these marks. Hill-Rom further agrees that any use of
                Seller’s marks by
                Hill-Rom will inure to the benefit of
                Seller.

            


    

    


    


    
      
        
        

      

      
        19