FINAL
EXCLUSIVE SUPPLIER AGREEMENT
BETWEEN
RADISSON HOTELS INTERNATIONAL, INC.
&
SELECT COMFORT CORPORATION
EFFECTIVE DATE: MAY 21, 2004
XXX = Confidential portion has been omitted pursuant to a request for
confidential treatment and has been filed separately with the Commission.
This Exclusive Supplier Agreement (the "Agreement"), dated May 21 2004
(the "Effective Date"), is by and between Select Comfort Corporation, a
Minnesota corporation whose address for notice purposes is Attention: General
Counsel, 6105 Trenton Lane North, Minneapolis, MN 55442 Fax No.: (763) 551-6888
("Select Comfort") and Radisson Hotels International, Inc., a Delaware
corporation whose address for notice purposes is c/o Legal Department, 701
Carlson Parkway, Mail Stop 8256, Minneapolis, MN 55305 Fax No.: (763) 212-1080
("Radisson").
RECITALS
A. Select Comfort is a developer, manufacturer and marketer of
adjustable-firmness beds, selling a proprietary line of beds under the
Sleep Number(R) brand that feature adjustable air chamber mattresses
(the "Beds").
B. Radisson owns the Radisson Marks and the System, and owns, operates, or
is a franchiser of the Hotels.
C. Radisson desires to contract with Select Comfort as its supplier of the
Beds and certain other bed products, and Select Comfort desires to
contract with Radisson as its exclusive lodging industry provider for
the Beds, pursuant to the terms of this Agreement.
D. Terms used in this Agreement with initial capital letters shall have the
meanings assigned to such terms in Section 15.26 hereof or the meanings
otherwise assigned to such terms by this Agreement.
NOW THEREFORE, for good and adequate consideration, the receipt and
sufficiency of which are hereby acknowledged and in consideration of the mutual
obligations set forth below, the parties agree as follows:
ARTICLE 1 - TERM
1.1. TERM OF THE AGREEMENT
The term of this Agreement (the "Term") shall commence on the Effective
Date and continue until the date of termination of the exclusivity
provisions set forth in Section 2.2 hereof. Notwithstanding the
foregoing, the provisions of Articles 7, 8, 12, 13, 14 and 15 hereof,
and of Sections 4.2 and 4.3 hereof, shall survive the termination of
this Agreement and will continue to govern the rights and obligations of
the parties hereto indefinitely following the termination of this
Agreement.
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ARTICLE 2 - EXCLUSIVITY
2.1. SELECT COMFORT EXCLUSIVITY
During the Term of this Agreement and as long as Select Comfort is not
in material breach of this Agreement, Radisson agrees to (a) establish
the installation of the Beds as a System Standard for all hotel rooms in
the Radisson System and (b) to use its reasonable business efforts to
encourage the adoption of the Beds in the Radisson System with the goal
of achieving installation of no less than XXX Beds by December 31,
2006. Radisson's reasonable business efforts shall include, at a
minimum, the following activities undertaken in good faith and designed
to achieve the foregoing distribution goal:
o Radisson will promote the Beds at the upcoming and future
Annual Business Conferences for the Radisson System and in
all similar meetings or similar opportunities with
franchisees in the Radisson System;
o Radisson will strongly encourage adoption of the Beds by
the Radisson Franchise Advisory Council, which advises the
Radisson System regarding the adoption of new System
Standards;
o Radisson will contribute funds to install and promote the
Beds in a select number of the Hotels in key distribution
markets. As a part of this obligation, in addition to the
Beds already installed in the nine (9) test locations,
Radisson agrees to fund the purchase and installation of
four (4) Beds per property in the Radisson System by the
end of 2004.
Select Comfort acknowledges that Radisson, as a franchisor of the
System, does not directly control the purchasing activities of
franchisee hotels and is subject to various Legal Requirements regarding
substantial changes to the System. Accordingly, for purposes of this
Agreement, Radisson does not guarantee the adoption by the Hotels of any
specific percentage of the Beds by any precise date. However, Radisson
does represent and warrant that it will carry out the above-referenced
plan and that it is authorized under applicable franchise agreements to
establish the Beds as a System Standard for all hotel rooms in the
Radisson System. Radisson further represents that there are currently an
aggregate of 251 Hotels in the Radisson System, with an aggregate of
approximately 60,279 hotel rooms that use approximately 91,700 beds.
2.2. RADISSON EXCLUSIVITY
During the periods described below and as long as Radisson is not in
material breach of this Agreement, Radisson will have the exclusive
right to the use of the Beds within the hotel and interval/timeshare
industry as follows:
A. SALES AND MARKETING IN HOTEL AND INTERVAL/TIMESHARE INDUSTRY. Except
as specifically provided in this Agreement, Select Comfort shall not
sell any beds (including the Beds) to, or conduct marketing programs
promoting any beds with, any Person for use in the hotel or
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XXX = Confidential portion has been omitted pursuant to a request for
confidential treatment and has been filed separately with the Commission.
interval/timeshare industry, commencing on the Effective Date and
through December 31, 2008 (the "Exclusivity"). However, Select Comfort
may (upon reasonable prior notice from Select Comfort to Radisson, and
with an opportunity for discussion of the matter at a periodic review
meeting as contemplated by this Agreement or in any similar meeting):
(i) continue to service and sell bed products and services (including
the Beds) to Persons for use in the hotel or interval/timeshare industry
to which Select Comfort has previously sold beds and who are identified
on Exhibit 2.2A, attached hereto and made a part hereof, and (ii)
service and sell bed products and services (including the Beds) to other
independent hotel or interval/timeshare industry customers, so long as
any such independent hotel or timeshare industry customer as of the time
of the initial sale does not consist of more than XXX separate
properties operating under a common hotel or interval/timeshare name.
Notwithstanding the above, the Hotels collectively must meet the
following minimum requirements in order to maintain the Exclusivity:
1. By December 31, 2005, the Hotels must have ordered, purchased
and installed at least XXX Beds; and
2. By December 31, 2006, the Hotels must have ordered, purchased
and installed at least an additional XXX Beds.
If the Hotels fail to meet the above requirements for any reason other
than due to: (i) Select Comfort's failure to meet its production
capabilities as represented by Select Comfort in this Agreement; or (ii)
a material breach of this Agreement by Select Comfort, Select Comfort
may terminate the Exclusivity, effective immediately upon written notice
thereof to Radisson given on or before February 28, 2006 in the case of
a failure to meet the requirement set forth in Section 2.2.A.1 above,
and by February 28, 2007 in the case of a failure to meet the
requirement set forth in Section 2.2.B.2 above.
B. SALES AND MARKETING TO EXCEPTIONAL CATEGORY OF HOTEL AND
INTERVAL/TIMESHARE INDUSTRY. At any time during the Term of this
Agreement, Carlson properties and/or cruise ships that compete in the
Exceptional Category of the hotel or interval/timeshare industry may
purchase and install Beds under the terms of this Agreement. On or after
July 1, 2007, Select Comfort may service and sell bed products and
services (including the Beds), on a non-exclusive basis, to any Person in
the Exceptional Category of the hotel or interval/timeshare industry.
Select Comfort will offer to Carlson properties and/or cruise ships, on a
non-exclusive basis, a similar program as Select Comfort may offer to
other customers in the Exceptional Category, provided that the Carlson
opportunity represents comparable volume potential for Select Comfort
versus an alternative brand.
C. RADISSON'S RIGHT TO EXTEND EXCLUSIVITY. Radisson shall have the
option to extend the Exclusivity beyond December 31, 2008 as follows:
1. If the Hotels have ordered and purchased at least XXX Beds
by December 31, 2006, and installed at least ninety percent (90%)
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XXX = Confidential portion has been omitted pursuant to a request for
confidential treatment and has been filed separately with the Commission.
of that number by such date (and, installed the full number by
February 28, 2007), Radisson's Exclusivity will automatically be
extended through December 31, 2009; and
2. If the Hotels and/or Radisson's Affiliates have ordered and
purchased a total of at least XXX Beds by December 31, 2009,
and installed at least ninety percent (90%) of that number by
such date (and, installed the full number by February 28, 2010),
Radisson's Exclusivity will automatically be extended through
December 31, 2010.
For the avoidance of doubt, Beds that are ordered, purchased and
installed by Hotels which thereafter leave the Radisson System during
the term of this Agreement will count and be applied toward all rights
and minimum requirements set forth herein.
ARTICLE 3 - MARKETING OBLIGATIONS AND PERIODIC REVIEW MEETINGS
3.1. MARKETING OBLIGATIONS
Both parties are committed to providing sustained Marketing support for
the promotion of the Bed Mark (as hereinafter defined) through the Term
of this Agreement. The parties agree to use reasonable business efforts
to implement the Marketing activities as specifically described on
Exhibit 3.1 attached hereto and made a part hereof.
3.2. PERIODIC REVIEW MEETINGS
In an effort to keep both parties fully informed as to the status of any
all aspects of this Agreement, and periodically throughout the year,
representatives of Radisson and Select Comfort will meet and review the
status of the program contemplated by this Agreement. Each such meeting
will take Radisson's and Select Comfort's mutual objectives into
account, and will be aimed at improving and re-evaluating the program if
the parties deem it necessary. Additionally, the meetings will
specifically address any warranty reports delivered pursuant to Section
6.2 hereof and the parties will endeavor to reasonably and mutually
resolve any warranty issues in a fair and equitable manner. Full review
meetings will take place on or about July 1, 2005, and July 1, 2006.
Quarterly review meetings will take place every quarter beginning
October 1, 2004, through the term of this Agreement.
ARTICLE 4 - PRODUCT FEATURES, JOINT TRADEMARK RIGHTS AND OTHER
INTELLECTUAL PROPERTY RIGHTS
4.1. PRODUCT FEATURES
The Beds will incorporate the features and will include the "tick"
design specified on Exhibit 4.1 attached hereto and made a part hereof.
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XXX = Confidential portion has been omitted pursuant to a request for
confidential treatment and has been filed separately with the Commission.
During the Term, Select Comfort agrees that it will not offer the "tick"
design specified on Exhibit 4.1 to any other party for any other
purpose.
4.2. JOINT TRADEMARK RIGHTS
The Beds manufactured, sold and marketed pursuant to this Agreement will
be manufactured, marketed and sold under the trade name and the logo and
design specified on Exhibit 4.2 attached hereto and made a part hereof
(the "Bed Marks"). The Bed Marks will be jointly owned by the parties
hereto and will be used solely and exclusively for the purposes
specified in this Agreement. The parties agree to cooperate in
connection with any registration of the Bed Marks in order to fully
recognize and protect the joint ownership of the Bed Marks contemplated
by this Agreement. Any use of the Bed Mark, other than as expressly
permitted under this Agreement, shall be an infringement of the
non-user's intellectual property rights. Notwithstanding the foregoing,
each of the parties hereto will have the right to use any aspect of the
Bed Marks that is currently used as, or as a part of, a trademark, trade
name, service mark or similar mark owned and/or used by such
party.
Nothing in this Agreement shall ever be construed as giving Select
Comfort any right, title or interest in the Radisson Marks, or as giving
Radisson any right, title or interest in the Select Comfort Marks,
except to the extent that any such marks are incorporated in the Bed
Marks, which may be used in accordance with this Agreement, and except
for such use as may be consistent with the prior written approval of the
owner of the respective marks for purposes of the Marketing efforts
contemplated by this Agreement. Upon termination or expiration of this
Agreement, all use of the Bed Marks shall cease and any other permitted
use of the Radisson Marks by Select Comfort or the Select Comfort Marks
by Radisson shall cease.
4.3. OTHER INTELLECTUAL PROPERTY RIGHTS
Except for the Bed Marks to be jointly owned and limited to use in
accordance with the terms of this Agreement and except for the Radisson
Marks, which shall remain the sole and exclusive property of Radisson,
all other intellectual property rights of any kind or description
related to the Beds or their manufacture, marketing and sale, including
without limitation any patents, patent applications, patentable
features, designs or processes, trade secrets, trademarks, trade names,
service marks or similar intellectual property rights of any kind or
description shall remain the sole and exclusive property of Select
Comfort.
ARTICLE 5 - PRODUCT PRICING AND PRODUCT ORDERS
5.1. PRODUCT PRICING
The pricing terms for the Beds are set forth in Exhibit 5.1 attached
hereto and made a part hereof.
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5.2. PRODUCT ORDERS
All orders for Beds will be placed by the Hotels through Guest Supply,
Inc. If Guest Supply, Inc. fails to adequately coordinate such orders on
behalf of the Hotels, Radisson may, in its sole discretion: (1) identify
a suitable replacement (which shall be subject to Select Comfort's
reasonable approval); or (2) assume responsibility for the Hotels'
orders. Select Comfort will provide reasonable assistance to Guest
Supply in the development of order guidelines to be used by the Hotels
when placing orders. All orders shall allow for a minimum of sixty (60)
days from the date of order to the date of delivery. Select Comfort also
agrees that orders of Beds for the Hotels under this program will be
processed on a priority basis versus any other bed orders that Select
Comfort may receive from the Hotel or Interval/Timeshare Industry.
5.3. PRODUCTION CAPACITY
Radisson acknowledges and agrees that all of the Beds are made to order
and the pricing specified on Exhibit 5.1 is based on maximum monthly
production volumes (the "Production Limits"). The Production Limits for
2004 are:
June XXX Beds
July XXX Beds
August XXX Beds
September XXX Beds
October XXX Beds
November XXX Beds
December XXX Beds
The Production Limits in 2005 and 2006 are XXX Beds per month except
for November, which shall be XXX Beds, and December, which shall be
XXX Beds. If fewer Beds than the Production Limit are ordered in any
month, any amount by which the order volume falls below the Production
Limit shall not be carried forward or be added to the Production Limit
in any subsequent month. Select Comfort shall not be obligated to
produce or deliver more than one hundred and ten percent (110%) of the
Production Limit in any month without its prior written consent, even if
production or delivery of more than one hundred and ten percent (110%)
of the Production Limit per month shall become necessary for the Hotels
to meet the minimum Bed purchase requirements for Radisson to retain or
extend the Exclusivity set forth in Section 2.2 hereof.
5.4. MORATORIUM ON DELIVERY AND INSTALLATION
Radisson acknowledges and agrees that Select Comfort shall not be
obligated to deliver or install any Beds between November 15 of each
year and January 1 of the following year without its prior written
consent, even if delivery or installation of Beds during such period
shall become necessary for the Hotels to meet the minimum Bed purchase
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XXX = Confidential portion has been omitted pursuant to a request for
confidential treatment and has been filed separately with the Commission.
requirements for Radisson to retain or extend the Exclusivity set forth
in Section 2.2 hereof.
ARTICLE 6 - INSTALLATION, TRAINING, CUSTOMER SERVICE AND WARRANTY
6.1. INSTALLATION AND TRAINING
Select Comfort will provide installation services, and training to Hotel
staff on installation and maintenance, in connection with the first
twenty-four (24) Beds installed at each Hotel for the "Total" price set
forth on Exhibit 5.1. After installation of the first 24 Beds at a
Hotel, the Hotel will have the option to purchase installation services
for the price set forth on Exhibit 5.1 or to install the Beds at the
Hotel's expense.
6.2 CUSTOMER SERVICE AND WARRANTY
Select Comfort will establish a toll-free Select Comfort
"Radisson-dedicated" customer service line for the benefit of both Hotel
employees and guests. Select Comfort agrees to provide Radisson a
monthly report summarizing calls received from Hotels, in order for the
parties to proactively address common issues as they arise. Each Bed
purchased by the Hotels during the Term of this Agreement will be
covered by the warranty terms set forth on Exhibit 6.2 attached hereto
and made a part hereof. Select Comfort also agrees to provide Radisson a
monthly report summarizing all warranty-related "activity" by the
Hotels, including specific Bed components replaced or repaired, and
whether or not such activity was covered under the applicable warranty.
Upon a sale of a Hotel with the Beds, or upon a Hotel leaving the
Radisson System for any reason, the warranty will continue to be
applicable for the remaining term of the warranty so long as the Beds
remain in the Hotel.
ARTICLE 7 - PRODUCT LIABILITY AND LEGAL REQUIREMENTS
7.1. PRODUCT LIABILITY
Select Comfort will indemnify, defend and hold harmless Radisson and its
Affiliates against and from any claims for bodily injury or property
damage caused by any defect in the design, materials or manufacturing of
the Beds, or otherwise caused by any unreasonable risk or hazard
presented by the Beds as used in the ordinary course and for the
intended purposes ("Product Liability Claims"). While Product Liability
Claims will ultimately not include any injury or damage caused by any
abuse or misuse of the Beds not caused by Select Comfort or any injury
or damage caused by the negligence or willful misconduct of Radisson,
its Affiliates, the Hotels or the guests of the Hotels, Select Comfort
upon notice by Radisson will be the "Indemnifying Party" as defined in
Section 12.3 herein for any Product Liability Claim related to the Beds,
unless it is reasonably apparent on the face of such claim that it is
not a Product Liability Claim, or if not reasonably apparent, until such
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time as a court of competent jurisdiction determines that such a claim
is not a Product Liability Claim.
7.2. SELECT COMFORT'S LEGAL RESPONSIBILITY
Select Comfort represents and warrants that each of the Beds sold and
delivered hereunder, at the time of its sale and delivery, will be in
full compliance with all Legal Requirements applicable to the sale and
delivery of the Beds for the purposes intended by this Agreement,
including flammability standards applicable to mattresses for commercial
use in the country, state or province in which its Beds are installed.
Select Comfort assumes no responsibility whatsoever for any Legal
Requirements applicable to the ownership or operation of the hotel
properties, including without limitation any applicable zoning, fire
code or similar requirements of the jurisdictions in which the
respective hotels are owned and operated.
7.3. RADISSON'S AND THE HOTEL'S LEGAL RESPONSIBILITY
The Hotels will be solely responsible for the operation of their
respective hotel properties in full compliance with all Legal
Requirements applicable to the ownership and operation of hotel
properties, including all applicable zoning, fire code and other similar
requirements of the jurisdictions in which the respective hotels are
owned and operated. Radisson assumes no duty to review, inspect or
approve the Beds with respect to compliance with any Legal Requirements.
Radisson's inspections, reviews or approvals are solely for the purpose
of determining compliance with its design standards and with respect to
operational considerations, and presentation of the Radisson Marks.
Radisson's approval is not an assurance, representation or warranty: (i)
that the Bed has been manufactured in accordance with Legal
Requirements; or (ii) that all or any part of the Bed is safe, suitable,
fit or proper for its intended use or purpose. This applies even though
Radisson may have commented on any of these matters in connection with
any inspections, reviews or approvals. Radisson is not responsible for
compliance with, and Select Comfort must not rely on any information
Radisson provides with respect to the applicability of or compliance
with, any Legal Requirements regarding the manufacturing, selling,
installation or operation of the Beds.
ARTICLE 8 - OWNERSHIP OF CUSTOMER INFORMATION/DATABASES
8.1. OWNERSHIP OF CUSTOMER INFORMATION
Each party acknowledges that the other's proprietary databases are
valuable assets of such other party's enterprise. As such, nothing in
this Agreement will affect the ownership of information on customers
that already exists in each party's databases currently, or which may be
added in the future through other sources.
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ARTICLE 9 - FORCE MAJEURE
9.1. DEFINITION OF FORCE MAJEURE
"Force Majeure" means any event or condition, not existing as of the
date of signature of this Agreement, not reasonably foreseeable as of
such date and not reasonably within the control of either party, which
reasonably prevents in whole or in material part the performance by one
of the parties of its obligations hereunder or which renders the
performance of such obligations so difficult or costly as to make such
performance commercially unreasonable. Without limiting the foregoing,
the following will constitute events or conditions of Force Majeure:
acts of State or governmental action (including specifically the failure
of any government to grant any license, authorization or approval
required for performance of this Agreement), riots, war, strikes,
lockouts, prolonged shortage of energy supplies or utilities, epidemics,
fire, flood, hurricane, typhoon, earthquake and explosion.
9.2. NOTICE
Upon giving notice to the other party, a party affected by an event of
Force Majeure shall be released without any liability on its part from
the performance of its obligations under this Agreement, except for the
obligation to pay any amounts due and owing hereunder, but only to the
extent and only for the period that its performance of such obligations
is prevented by the event of Force Majeure. Such notice shall include a
description of the nature of the event of Force Majeure, and its cause
and possible consequences. The party claiming Force Majeure shall
promptly notify the other party of the termination of such event. During
the period the performance of one of the parties of its obligations
under this Agreement has been suspended by reason of an event of Force
Majeure, the other party may likewise suspend performance of all or part
of its obligations, except for the obligation to pay amounts due and
owing, to the extent commercially reasonable.
9.3. CONFIRMATION
The party invoking Force Majeure shall provide to the other party with
written confirmation of the existence of the circumstances constituting
Force Majeure. Such evidence may consist of a statement or certificate
of an appropriate governmental department or agency where available, or
a statement describing in detail the facts claimed to constitute Force
Majeure.
9.4. SUSPENSION OF PERFORMANCE
If an event of Force Majeure occurring at any time after the execution
of this Agreement prevents performance hereunder by either party and
continues for more than six (6) consecutive months, either party shall
have the right to terminate this agreement on written notice to the
other without any liability hereunder, except the obligation to make
payments due to such date.
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ARTICLE 10 - TERMINATION
10.1. TERMINATION
This Agreement may be terminated prior to its ending date for the
following:
A. By either party effective immediately upon notice to the other
party in the event of the filing of a voluntary or involuntary
bankruptcy petition by such other party, an assignment for the benefit
of creditors by such other party, or the appointment of a receiver for
such other party; or
B. By either party, if the other party is in material breach of its
obligations contained in this Agreement, and such breach is not cured
to the reasonable satisfaction of the non-breaching party within a
period of thirty (30) days after written notice setting out the breach
in reasonable detail. If the material breach is such that it cannot
reasonably be cured within thirty (30) days, then the non-breaching
party may not terminate this Agreement as long as the party in breach
begins the cure within thirty (30) days and proceeds diligently and in
good faith to accomplish the cure. If such breach is not cured to the
reasonable satisfaction of the non-breaching party within ninety (90)
days after the initial written notice, the Agreement may be
terminated. Notwithstanding the foregoing, the failure of the Hotels
to order, purchase and install sufficient quantities of the Beds in a
timely manner as may be necessary to maintain or extend the
Exclusivity under this Agreement shall not be a breach that is subject
to cure under the foregoing provision.
ARTICLE 11 - INSURANCE
11.1. POLICY COVERAGE AND AMOUNT
At no cost to Radisson, during the term of this Agreement, Select
Comfort will maintain commercial general liability insurance (with
products and completed operations coverage) on an occurrence basis with
combined single-limit coverage for personal and bodily injury and
property damage of at least ten million dollars ($10,000,000) per
occurrence. The policies must also provide for the following:
A. "Radisson Hotels International, Inc. and its subsidiaries and its
Affiliates" must be named as additional insureds; and
B. Radisson must receive 30 days' notice of any cancellation,
non-renewal and material changes in the policy.
11.2. QUALIFICATIONS AND EVIDENCE
Select Comfort will obtain all policies with companies having a Best
Rating of A-V or better, or otherwise reasonably acceptable to Radisson.
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Select Comfort will provide Radisson with certificates of insurance
acceptable to Radisson evidencing that the policies are in effect within
30 days of the date of this Agreement, and at least 10 days prior to the
expiration of any policy.
11.3. WAIVER OF SUBROGATION AND RELEASE
Wherever Radisson cannot be named as an additional insured under any
insurance coverage required pursuant to this Agreement, Select Comfort
will require the insurance company to include in the policy that the
insurance company has no right of subrogation against Radisson or their
respective Affiliates.
The required policies are for Select Comfort's, Radisson's and its
Affiliates' benefit and protection. Radisson makes no warranty or
representation that the policies are adequate for Select Comfort's
needs whatsoever. The insurance coverage required to be obtained by
Select Comfort is the primary coverage Select Comfort's obligation to
maintain the required insurance is not limited in any way because of
any insurance that Radisson or its Affiliates carries. Neither Select
Comfort nor any of its insurance providers will deny coverage of any
losses, whether by Select Comfort, Radisson or its Affiliates because
of any insurance that Radisson or its Affiliates carry, and Select
Comfort has no right to any additional coverage obtained by Radisson
or its Affiliates.
ARTICLE 12 - INDEMNIFICATION; ATTORNEYS' FEES
12.1. INDEMNIFICATION BY SELECT COMFORT
Select Comfort agrees to indemnify and hold harmless Radisson and its
Affiliates against and from, all Payments due to any Claim, brought by
or on behalf of any Third Party or otherwise, with respect to:
A. Any breach by Select Comfort of its obligations under this
Agreement; or
B. Any misrepresentation or breach of warranty by Select Comfort under
this Agreement; or
C. Any Product Liability Claim.
Select Comfort's obligations under this Section 12.1 do not apply to any
Claim that is directly caused by Radisson's or any of its Affiliates
negligence or willful misconduct. For purposes of this Article, Radisson
and its Affiliates includes their respective officers, directors,
shareholders, managers, members, governors, employees, agents, Third
Party contractors, successors and assigns.
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12.2. INDEMNIFICATION BY RADISSON
Radisson agrees to indemnify and hold harmless Select Comfort and its
Affiliates against and from, all Payments due to any Claim, brought by
or on behalf of any Third Party or other wise, with respect to:
A. Any breach by Radisson of its obligations under this Agreement; or
B. Any misrepresentation or breach of warranty by Radisson under this
Agreement; or
C. Any claim asserted by any owner or operator of a Hotel in the
Radisson System under any franchise or similar agreement between
Radisson and any other party or under any applicable franchise,
business opportunity or similar law or provision.
Radisson's obligations under this Section 12.2 do not apply to any Claim
that is directly caused by Select Comfort's or any of its Affiliates
negligence or willful misconduct. For purposes of this Article, Select
Comfort and its Affiliates includes their respective officers,
directors, shareholders, managers, members, governors, employees,
agents, Third Party contractors, successors and assigns.
12.3. NOTICE AND OPPORTUNITY TO DEFEND
In the event that any party shall become entitled to indemnification
under this Agreement, whether due to the assertion of a claim by any
third party or otherwise, the party entitled to indemnification
hereunder (the "Indemnified Party") shall promptly notify the party
responsible to provide indemnification hereunder (the "Indemnifying
Party") specifying in reasonable detail the facts underlying the claim
for indemnification. The Indemnifying Party shall not be relieved of its
responsibility to provide indemnification under this Agreement due to
any failure of the Indemnified Party to provide timely notice of a claim
for indemnification hereunder unless the delay in providing such notice
shall have materially compromised the Indemnifying Party's ability to
fully and adequately defend the claim.
Within ten (10) business days following the receipt of a claim for
indemnification from any Indemnified Party hereunder, the Indemnifying
Party shall notify the Indemnified Party as to whether the Indemnifying
Party will assume the defense of any third party claim underlying the
claim for indemnification hereunder. In the event that the Indemnifying
Party assumes the defense of the claim, the Indemnifying Party shall be
entitled to fully control the defense of the claim and to settle,
negotiate or compromise the claim, so long as any such settlement or
compromise does not result in any injunctive or similar non-monetary
judgment against the Indemnified Party that has any ongoing effect and
so long as the Indemnified Party is fully indemnified against any
monetary judgment arising from such claim. Upon notice thereof to the
Indemnifying Party, the Indemnified Party shall be entitled, at the
expense of the Indemnified Party, to monitor and participate in the
defense of the indemnified claim, subject to the control of the
Indemnifying Party.
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12.4. SURVIVAL
The indemnification and other obligations contained in this Article will
continue in full force and effect subsequent to and notwithstanding the
expiration or termination of this Agreement.
ARTICLE 13 - INJUNCTIVE RELIEF
13.1. AVAILABILITY OF INJUNCTIVE RELIEF
A breach of this Agreement by either Select Comfort or Radisson relating
to any of the matters set out below may cause irreparable harm to
Radisson or Select Comfort, as the case may be, for which monetary
damages may be an inadequate remedy. Therefore, in such event, in
addition to any other remedies Radisson or Select Comfort may have under
this Agreement or at law or in equity, Radisson or Select Comfort may
seek and obtain the entry of temporary or permanent injunctions and
orders of specific performance enforcing the provisions of this
Agreement with respect to: (i) the Radisson Marks, the Select Comfort
Marks or the Bed Mark; (ii) the System; (iii) the obligations of Select
Comfort or Radisson, as the case may be, upon termination or expiration
of this Agreement; (iv) the unauthorized disclosure or threatened
disclosure of proprietary or confidential information of either party;
or (vi) any act or omission by either party or either party's employees
that: (a) constitutes a violation of any Legal Requirement; or (b) may
impair the good will associated with the Radisson Marks, the Select
Comfort Marks, the Bed Marks or the business enterprise of either of the
parties hereto.
13.2. NO NECESSITY FOR POSTING OF BOND
Unless required by the court granting any such injunctive relief,
neither party shall be required to post a bond or other security with
respect to obtaining injunctive relief under this Agreement.
ARTICLE 14 - CONFIDENTIALITY
14.1. CONFIDENTIALITY
The parties agree that (i) the specific terms of this Agreement, (ii)
all information as to source, quantity, and price of goods and services,
and (iii) all information regarding either party's products, business,
customers, or methods of operation learned during the term of this
Agreement or in anticipation of entering into this Agreement shall be
maintained in confidence and not be released to any third party for any
reason whatsoever other than: (i) pursuant to a validly issued subpoena
from a court or governmental authority having jurisdiction over the
party or pursuant to a discovery request made under the Federal Rules of
Civil or Criminal Procedure or similar state court rules and to which
the party is required to respond or as may be required to implement the
terms of this Agreement; or (ii) as may be required by applicable rules
of the Securities and Exchange Commission (the "SEC") as reasonably
13
determined by counsel to any party hereto with a class of securities
registered under the Securities Exchange Act of 1934, subject, in each
case, to reasonable notification to the other party prior to release of
such information, in order to allow the other party an opportunity to
oppose such court action or governmental authority or to participate in
the process to seek confidential treatment of any information otherwise
required to be filed under applicable SEC rules. All confidential and
proprietary information, which the parties have obtained from each other
shall be returned upon the expiration or earlier termination of this
Agreement. The provisions of this paragraph shall survive the expiration
or earlier termination of this Agreement.
ARTICLE 15 - MISCELLANEOUS
15.1. SEVERABILITY
All provisions of this Agreement are severable. If pursuant to the
decision of any court having jurisdiction, any provisions, in whole or
in part are not enforceable, the remainder of this Agreement will
continue to be in full force and effect, and the applicable parts of the
affected provisions are superceded and modified by such applicable law.
If either party can establish that such modifications would constitute a
material deviation from the general purpose and intent of this
Agreement, either party may terminate this Agreement on not less than
thirty (30) days' notice. A valid termination pursuant to this Section
is without liability by either party to the other party except for any
causes of action a party has against the other for matters occurring up
to and through the date of such termination.
15.2. WAIVER
The failure, refusal or neglect of one party to require the other party
to comply with any provision of this Agreement, in whole or in part,
does not constitute a waiver by the former of its right to require full
compliance with the same or different provisions in the future,
regardless of the acceptance of payments or performance by the party
seeking compliance.
15.3. GOVERNING LAW
The interpretation, validity and enforcement of this Agreement and the
relationship between the parties is subject to and governed by the laws
(statutory or otherwise) of the State of Minnesota without regard to its
conflicts of laws provisions.
15.4. VENUE AND JURISDICTION
All Claims whatsoever, arising out of or related to this Agreement in
any way, must be commenced, filed and litigated before a court of
competent jurisdiction located in Hennepin County, Minnesota. Both
parties submit to personal jurisdiction of the State and Federal courts
in such county for such purpose.
14
15.5. JURY WAIVER
Each party knowingly and voluntarily waives the right to a trial by jury
in any litigation arising under, as a result of or in connection with
this Agreement or any franchise or business opportunity laws.
15.6. CLAIMS
Except for those Claims that are brought pursuant to the indemnification
or insurance coverage required under Articles 10 and 11 hereof, upon
expiration or termination of this Agreement, neither party will commence
any cause of action related to or arising out of this Agreement, unless
commenced within one year following the effective date of expiration or
termination.
15.7. ENTIRE AGREEMENT
This Agreement, including the exhibits attached hereto and made a part
hereof and any amendments hereto that are validly executed and delivered
by each of the parties hereto, collectively constitutes the entire
agreement between the parties with respect to the subject matter hereof,
and this Agreement supersedes and terminates all prior agreements or
understandings, either oral or in writing, between the parties hereto.
Any representations, warranties, inducements, promises, understandings
or agreements between the parties, which are not in writing and signed
by the parties, are void and not enforceable.
15.8. MODIFICATIONS
Oral modifications to this Agreement, including those by way of release,
amendment, waiver or otherwise, are not valid or enforceable. The
parties may modify this Agreement only by a written agreement signed by
a duly authorized representative of each party.
15.9. HEADINGS
The headings of the Articles and Sections of this Agreement are for
convenience of reference only and do not define, limit or construe their
contents.
15.10. NOTICES
Any notices required or permitted under this Agreement must be in
writing and must be delivered either personally, by fax, by Certified
United States Mail or by reliable expedited delivery companies including
Federal Express, Airborne Express and DHL. Notices by fax are deemed
delivered and received upon transmission with a confirmation of such
transmission. Notices by Certified United States Mail are deemed
delivered and received on the second business day immediately following
the day on which the notice was given to the United States Postal
Service. Notices by expedited delivery are deemed delivered and received
on the business day immediately following the day on which the notice
was given to the expedited delivery company. Information for notices is
15
as indicated in the first paragraph of this Agreement.
15.11. EXECUTION/COUNTERPARTS
The parties may sign more than one identical copy of this Agreement,
each of which is an original. When parties sign different, but identical
copies of this Agreement, the copies constitute one Agreement.
15.12. ATTORNEYS' FEES
All reasonable and necessary costs and expenses, including attorneys'
fees, incurred by Radisson or Select Comfort in enforcing any provisions
of this Agreement, or in asserting or defending against any Claims
brought by one party against the other party under this Agreement,
whether through injunctive relief or otherwise, will be paid by the
non-prevailing party to the prevailing party in such action.
15.13. ACTIONS BY OTHERS
Where either party to this Agreement is prohibited by this Agreement
from directly taking any action, or where action by either party to this
Agreement would constitute a default, such party agrees that it will not
encourage, authorize or permit any other Person, directly or indirectly
or under its direct or indirect control to take such action.
15.14. PERFORMANCE THROUGH OTHERS
Either of the parties hereto may perform any or all of its obligations
under this Agreement directly or through one or more of its wholly owned
subsidiaries, provided however, that the assignment to or performance of
any such obligations by any such subsidiary corporation will not relieve
any party hereto of any of its primary responsibility under this
Agreement. If any such obligations are performed by any such subsidiary
corporation, the right to such performance will still run directly to
the other party to this Agreement.
15.15. SURVIVAL
The provisions of Articles 7, 8, 12, 13, 14 and 15 hereof, and of
Sections 4.2 and 4.3 hereof, shall survive the termination of this
Agreement and will continue to govern the rights and obligations of the
parties hereto indefinitely following the termination of this Agreement.
15.16. COMPLIANCE WITH LAWS
Notwithstanding any provision to the contrary, each party's performance
is subject to, and each party will comply with, all Legal Requirements,
including those of all countries in which either party conducts business
that prohibits unfair, fraudulent or corrupt business practices such as
those that are comparable to the United States Foreign Corrupt Practices
16
Act and the International Money Laundering Abatement and Anti-Terrorist
Financing Act, otherwise known as the Patriot Act.
15.17. TIME OF THE ESSENCE
Time is of the essence in the performance of every provision of this
Agreement.
15.18. THIRD PARTY BENEFICIARIES
This Agreement is for the sole benefit of the parties and is not for the
benefit of any Third Parties.
15.19. CUMULATIVE RIGHTS
The remedies provided for in this Agreement are not exclusive. Either
party is free to pursue such other remedies as may be available at law
or in equity.
15.20. USE OF DEFINITIONS/TERMS
The use of another tense of the defined term, or its use as a noun,
adjective or adverb, or otherwise, means the same as the defined term,
modified by the context of the sentence in which it is used. All
personal pronouns, whether used in the masculine, feminine or neuter
gender, include all genders; the singular includes the plural and the
plural includes the singular.
15.21. COPIES
Photocopies and facsimiles of a signed original of this Agreement are
fully binding and effective as originals.
15.22. INTERNAL POLICIES
Each party's internal policies and procedures, whether or not
communicated to the other party, are intended for such first party's use
only, are not binding on such first party with respect to its
relationship with the other party, and are not a part of or an amendment
to this Agreement.
15.23. EXHIBITS
All exhibits attached to this Agreement are a part of it and fully
incorporated into it.
15.24. INTERPRETATION
Neither this Agreement nor any of its provisions is to be construed
against or interpreted to the disadvantage of either party because a
party drafted this Agreement or the provision.
17
15.25. INDEPENDENT CONTRACTOR
Radisson and Select Comfort are each independent contractors. This
Agreement does not create any relationship of joint venturers, partners,
agents, servants, employees, fiduciaries or representatives of each
other.
15.26. DEFINITIONS.
The following definitions shall be used for purposes of this
Agreement.
AFFILIATE. Any Person Controlled by, Controlling or under
common Control with either party.
CLAIM. Any claim, challenge, demand, cause of action, lawsuit, dispute,
controversy, investigation or administrative proceeding.
CONTROL. The right or ability, directly or indirectly, to cause a Person
to act in accordance with another Person's instructions.
EXCEPTIONAL CATEGORY. Four Seasons Hotels and Resorts, The Ritz Carlton,
St. Regis Hotels and Resorts, Intercontinental Hotels and Resorts, and
Mandarin Oriental. Additions and deletions to this list are only as
mutually agreed by the parties hereto
GOVERNMENTAL AUTHORITY. Any governmental entity, and any political or
other subdivision of any governmental entity, and any agency,
department, commission, board, bureau, court or instrumentality of any
of them, which, at any time, has competent jurisdiction over aspect of
this Agreement.
HOTEL. A Radisson hotel operated in the United States, Canada or the
Caribbean using the System pursuant to a written agreement with
Radisson.
LEGAL REQUIREMENTS. Any law, code, ordinance, order, decision, rule or
regulation of any Governmental Authority.
MARKETING. All activities related to marketing, sales, advertising,
promotion and public relations with respect to the Hotels, the System,
and the Beds pursuant to this Agreement, as more specifically identified
on Exhibit 3.1 attached hereto and made a part hereof.
PAYMENTS. All payments of money, including those with respect to fines,
penalties, taxes, losses, damages, costs and expenses, such as
reasonable attorney fees, investigation expenses, court costs,
deposition expenses, and travel and living expenses.
PERSON. Any natural person or legal entity, including trustees,
representatives, administrators, heirs, executors, partnerships,
corporations, limited liability companies, trusts, unincorporated
organizations and governmental agencies, departments and branches.
18
PURCHASE. Transmission of the property rights to the Beds from Select
Comfort to the Hotels via sale, discount, negotiation, pledge, lien,
issue or re-issue, or any other voluntary transaction creating an
interest in the Beds, including contracts to purchase. In any event, the
term "purchase" shall mean that the purchaser shall have fully paid for
and taken delivery of the purchased goods.
RADISSON MARKS. The name Radisson(R) and the signature logo Radisson(R)
with the brush stroke used in conformance with Radisson's business
system, and all other trademarks, service marks, trade names,
copyrights, insignia, emblems, slogans, logos, commercial symbols,
signs, trade dress (including interior and exterior building designs and
specifications and the motif, decor, and color combinations), and all
other visual identification, by which the Hotels are identified and
publicized, including the good will associated with all of them.
SELECT COMFORT MARKS. The trademarks Select Comfort(R) and Sleep
Number(R) and all other trademarks, service marks, trade names,
copyrights, insignia, emblems, slogans, logos, commercial symbols,
signs, trade dress by which Select Comfort beds are identified and
publicized, including the good will associated with all of them.
SYSTEM. The Radisson Marks, and other distinctive elements developed and
owned by, or made available by its Affiliates to, Radisson, and the
systems made available to Radisson for the construction and operation of
the Hotels and other hotels authorized to use the System, including all
good will.
SYSTEM STANDARD. Any element of the System that the Hotels are required
to implement pursuant to the terms of any applicable franchise or
similar agreement in place between Radisson and the Hotel owners and
operators.
THIRD PARTY. Any Person, other than Radisson, Select Comfort and their
respective Affiliates.
19
Executed as of the date set forth at the beginning of this Agreement.
RADISSON HOTELS INTERNATIONAL. INC. SELECT COMFORT CORPORATION
By: /s/Bjorn Gullakson By: /s/Keith C. Spurgeon
--------------------------------- -------------------------------
Name: Bjorn Gullakson Name: Keith C. Spurgeon
------------------------------- -----------------------------
Its: Executive Vice President Its: Senior VP - Sales
-------------------------------- ------------------------------
20
EXHIBIT INDEX
EXHIBIT DESCRIPTION
2.2A List of Hotels to which Select Comfort has
previously sold beds
3.1 Marketing Plan
4.1 The Products and Models
4.2 The Bed Mark and Logo
5.1 Product Pricing
6.2 Warranty Terms
21
EXHIBIT 2.2A
List of Hotels Select Comfort has previously sold beds
XXX
XXX = Confidential portion has been omitted pursuant to a request for
confidential treatment and has been filed separately with the Commission.
EXHIBIT 3.1
Liberty Marketing Budget & Spending Recommendations
5/18/2004
1 - Budget
A - Funds from sale of beds to Radisson 2004 2005 2006 2007
---- ---- ---- ----
(Projections)
Fund/bed = XXX $XXX $XX $XXX $XXX
Annual volume (low qty)= XXX XXX XXX XXX
Annual Budget = $XXX $XXX $XXX $XXX
Fund/bed = XXX $XXX $XXX $XXX $XXX
Annual volume (high qty)= XXX XXX XXX XXX
Annual Budget = $XXX $XXX $XXX $XXX
B - Trial:Conversions (Projections) 2004 2005 2006 2007
---- ---- ---- ----
Based on forecasts previously
provided. If conversion is higher
more spending will occur; If
conversion is lower less spending
will occur.
Units from Trial;Conversion XXX XXX XXX XXX
ASP = XXX $XXX $XXX $XXX $XXX
Media %/Sales = XXX% (same as XXX% XXX% XXX% XXX%
SC Corporate rate)
Annual Forecasted budget = $XXX $XXX $XXX $XXX
Total Budget Potential
Lower Qtys $XXX $XXX $XXX $XXX
Higher Qtys $XXX $XXX $XXX $XXX
XXX = Confidential portion has been omitted pursuant to a request for
confidential treatment and has been filed separately with the Commission.
2 - Funding Split Recommendations - Select Comfort:Radisson
2004 2005 2006 2007
---- ---- ---- ----
A - Funds from sale of beds to
Radisson
Lower Qtys
Select Comfort % XXX% XXX% XXX% XXX%
$ $XXX $XXX $XXX $XXX
Radisson % XXX% XXX% XXX% XXX%
$ $XXX $XXX $XXX $XXX
Higher Qtys
Select Comfort % XXX% XXX% XXX% XXX%
$ $XXX $XXX $XXX $XXX
Radisson % XXX% XXX% XXX% XXX%
$ $XXX $XXX $XXX $XXX
B - Trial:Conversions
Select Comfort % XXX% XXX% XXX% XXX%
$ $XXX $XXX $XXX $XXX
Radisson % XXX% XXX% XXX% XXX%
$ $XXX $XXX $XXX $XXX
<FN>
Notes: 1 - Select Comfort requires, at minimum, the % splits above to deliver
consumer impressions at the level being communicated to franchisees
for 2004 & 2005. WITH THESE SPLITS 2006 MARKETING ACTIVITIES/SUPPORT
WOULD HAVE TO BE CHANGED AS FOLLOWS: RADIO/PRINT/TV FLIGHTS WOULD
HAVE TO BE REDUCED FROM 26 WEEKS TO 14-15 WEEKS (REFLECTED ON
ATTACHED FLOW CHART).
2 - Select Comfort agrees to the following media support and tests at
the following room penetration levels (assuming consistent with
agreed upon media objectives):
Radio/Print = XXX%
TV = XXX%
Tests (Print, Inquiries) = XXX%
3 - All funds committed to be spent within 6 months of "acknowledgement
of funds"
4 - Select Comfort and Radisson will review marketing budgets and
spending assumptions annually.
</FN>
XXX = Confidential portion has been omitted pursuant to a request for
confidential treatment and has been filed separately with the Commission.
2004 - 2008 PROJECT LIBERTY SPENDING ESTIMATES
TACTIC FY 2004 Q4 2004 FY 2005 FY 2006 FY 2007 FY 2008
ESTIMATE XXX% XXX% XXX% XXX%
Promotions $ XXX $ XXX $ XXX $ XXX $ XXX $ XXX
Print $ XXX $ XXX $ XXX $ XXX $ XXX $ XXX
Television $ XXX $ XXX $ XXX $ XXX $ XXX $ XXX
Ad Production $ XXX
----------
$ XXX $ XXX $ XX $ XXX $ XXX $ XXX
Online Advertising, Keywords $ XXX $ XXX
E-Partnerships, IATA Project $ XXX
----------
$ XXX $ XXX $ XXX $ XXX $ XXX $ XXX
AAA Tourbooks, Atlas $ XXX
AARP $ XXX
----------
$ XXX $ XXX $ XXX $ XXX $ XXX
Directory of Accommodations $ XXX $ XXX $ XXX $ XXX $ XXX
Sponsorships $ XXX
Research (Benchmark, Other) $ XXX * * * *
Research (Web) $ XXX
----------
$ XXX
Other (website, Genuine Article, $ XXX $ XXX $ XXX $ XXX $ XXX $ XXX
comment cards, meetings, misc.)
Public Relations $ XXX $ XXX $ XXX $ XXX $ XXX $ XXX
Direct Mail, Email $ XXX $ XXX $ XXX $ XXX $ XXX $ XXX
-------------------------------------------------------------------
SUBTOTAL $ XXX $ XXX $ XXX $ XXX $ XXX $ XXX
===================================================================
Existing Partner Matching Funds $ XXX $ XXX
Brand Differentiator Seed Money $ XXX $ XXX
-------------------------------------------------------------------
TOTAL $ XXX $ XXX $ XXX $ XXX $ XXX $ XXX
===================================================================
<FN>
*Funding from surplus and/or advertising development
</FN>
(Table with media values and impression estimates excluded pursuant to request
for confidential treatment and has been filed separately with the Commission.)
XXX = Confidential portion has been omitted pursuant to a request for
confidential treatment and has been filed separately with the Commission.
EXHIBIT 4.1
The Products and Models
The Sleep Number Bed for Radisson will incorporate these core features:
o Adjustable Air-Chamber technology
o Dual -Adjustability (Kings, Queens, Doubles)
o Lightweight Construction
o Hypoallergenic Materials
o Modular Design
o Corner Lock(TM)system for crisp, clean corners
o Gussetted Pillowtop
o 121/2" tall mattress
o Exclusive Radisson/Sleep Number designed ticking material (made out
of a Poly blend Belgian Damask cover)
o Ticking with appropriate treatment to meet requirements
specified below
o Sleep Number firmness control system - with a single tethered, dual
controller - to adjust each side independently. (Full size bed would
have a single, larger chamber)
o Non-slip material added to the underside of the mattress
o Hospitality hose kit - to allow easier change out of pumps in
guest rooms
o Wood foundation with these features
- Unique I-beam construction
- Solid platform with rigid base
- Covered with treated tick
- Tested through 200,000 use cycle
The Sleep Number Bed for Radisson will be offered in 3 sizes - Eastern King (76"
x 80"), Queen (60" x 80"), and Full/Double XL (54" x 80"). Note the Full/Double
XL size will not be available to ship until January, 2005 after receiving input
of whether this bed requires a single or double chamber.
The Sleep Number Bed for Radisson will incorporate flame retardant features as
specified. The beds will meet the following test standards (A) for 2004 and (B)
for 2005 and beyond:
(A) NFPAV #701; MVS #301; alternate to 16 CFR part 1632 Class B
(B) NFPAV #701; MVS #301; alternate to 16 CFR part 1632 Class B plus
new California consumer requirements going into effect January,
2005
EXHIBIT 4.2
(partnership logo omitted)
THE PARTNERSHIP LOGO
The logo represents the unique partnership between Radisson Hotels & Resorts[R]
and Select Comfort (The Sleep Number[R] bed). It is a fusion of the strengths of
two national brands that at once establishes the identity of our new initiative,
and at the same time allows the integrity of each individual brand to remain
intact.
(partnership logo omitted)
The mark consists of the Radisson logo joined to a modified Sleep Number[R] bed
logo by an extended green loop which emanates from the Radisson brush stroke.
The configuration seen here is the only approved treatment of this new identity.
Do not attempt to recreate this mark. Use only the provided artwork.
(partnership logo omitted)
COLORS
Being that this logo consists of two corporate identities, it is vital that the
colors used in this mark are consistent with the prescribed colors of the two
brands. The Radisson portion of the logo is Black (in the typography) and the
Radisson green in the brush stroke/oval outline.
FOUR-COLOR RADISSON GREEN.
35% Cyan and 100% Yellow.
SPOT-COLOR RADISSON GREEN.
MSP-78553 K/7K9 Coated
MSP-78651 K/7K9 Uncoated
PMS 382.
The Sleep Number[R] bed portion is to be rendered in Sleep Number[R] blue. With
the exception of black & white usage, these are the only acceptable colors used.
FOUR-COLOR SLEEP NUMBER[R] BLUE.
80 Cyan, 50% Magenta, 15% Yellow and 0% Black.
SPOT-COLOR SLEEP NUMBER[R] BLUE.
PMS 653.
THE LOGO - USAGE/SAFE AREA
The combination of identities contained in this logo need to be protected from
any outside graphic intrusions. We have established a boundary around the logo
to preserve its integrity and to ensure that its impact will not be diminished
by any extraneous imagery. The specified proportions are 15.0 units horizontally
to 9.0 units vertically. Please keep all other visual elements clear of the safe
area.
(partnership logo omitted)
THE LOGO - BLACK AND WHITE
The preferred printed version of this logo is four-color process. If printing
in one color, black is the preferred color. Below are examples of black and
white renderings.
(partnership logo omitted)
EXHIBIT 5.1
Final Project Liberty Pricing
5/17/2004
Size Component Price
Eastern King Bed Set (Mattress & Foundation) (1) $ XXX
- ------------
Installation (2) $ XXX
Freight(3) $ XXX
Total $ XXX
Queen Bed Set (Mattress & Foundation) (1) $ XXX
- -----
Installation (2) $ XXX
Freight(3) $ XXX
Total $ XXX
Full (Single Chamber) Bed Set (Mattress & Foundation) (1) $ XXX
- ---------------------
Installation (2) $ XXX
Freight(3) $ XXX
Total $ XXX
<FN>
Notes: (1) Including component costs required to meet higher CA
consumer flammability requirements
(2) Installation - Once 24 beds per property have been installed &
training delivered to Radisson employees than this becomes an
option.
(3) Freight - Based on FTL qtys. Actual cost will vary based on qty
ordered as follows:
FTL (72 beds) $XXX/bed
3/4 Truck (54 - 71 beds) $XXX/bed
1/2 Truck (36 - 53 beds) $XXX/bed
1/4 Truck (18 - 35 beds) $XXX/bed
LTL (1 - 17 beds) $XXX/bed
(4) Double Bed (Dual Chamber) - Price is $XXX (before installation
and delivery)
(5) For years 2006, 2007, 2008 Pricing will be adjusted as follows:
No more than XXX% increase annually
Cost increases justified basis market increases in key
components as a % of bed cost:
Petroleum = XXX%
Labor & Overhead = XXX%
Rubber = XXX%
Wood = XXX%
Cotton/Fabric = XXX%
Other = XXX%
Price reviewed annually with Radisson prior to July 1st
</FN>
XXX = Confidential portion has been omitted pursuant to a request for
confidential treatment and has been filed separately with the Commission.
EXHIBIT 6.2
WARRANTY PROGRAM
SLEEP NUMBER BED - MADE EXCLUSIVELY FOR RADISSON
PUMP (INCLUDING CONTROL), CHAMBER & FOAM COMPONENTS
- ---------------------------------------------------
Warranty - 15 Year Prorated Warranty
Warranty 100% - 4 years
Free From Defects in Materials & Workmanship
Normal "Wear & Tear" Not Covered
11 years prorated: Pump, Chamber & Foam Components
PUMP Max % Increase Price
-------------- -----
*Years 1-4 = NA Covered at 100%
**Year 5 = NA $ XXX
Year 6 = 6% $ XXX
Year 7 = 6% $ XXX
Year 8 = 6% $ XXX
Year 9 = 6% $ XXX
Year 10 = 6% $ XXX
Year 11 = 6% $ XXX
Year 12 = 6% $ XXX
Years 13 - 15 = $ XXX
CHAMBER Max % Increase Price (for one chamber)
-------------- -----------------------
FULL XL (SINGLE
KING QUEEN CHAMBER) DOUBLE XL
*Years 1-4 = NA Covered at 100% Covered at 100% Covered at 100% Covered at 100%
**Year 5 = NA $ XXX $ XXX $ XXX $ XXX
Year 6 = 6% $ XXX $ XXX $ XXX $ XXX
Year 7 = 6% $ XXX $ XXX $ XXX $ XXX
Year 8 = 6% $ XXX $ XXX $ XXX $ XXX
Year 9 = 6% $ XXX $ XXX $ XXX $ XXX
Year 10 = 6% $ XXX $ XXX $ XXX $ XXX
Year 11 = 6% $ XXX $ XXX $ XXX $ XXX
Year 12 = 6% $ XXX $ XXX $ XXX $ XXX
Years 13 - 15 = $ XXX $ XXX $ XXX $ XXX
Max % Price (for one
Foam Components Increase chamber)
- --------------- ---------- --------------
FULL XL(SINGLE
SIDEWALLS KING QUEEN CHAMBER) DOUBLE XL
*Years 1-4 = NA Covered at 100% Covered at 100% Covered at 100% Covered at 100%
**Year 5 = NA $ XXX $ XXX $ XXX $ XXX
Year 6 = 6% $ XXX $ XXX $ XXX $ XXX
Year 7 = 6% $ XXX $ XXX $ XXX $ XXX
Year 8 = 6% $ XXX $ XXX $ XXX $ XXX
Year 9 = 6% $ XXX $ XXX $ XXX $ XXX
Year 10 = 6% $ XXX $ XXX $ XXX $ XXX
Year 11 = 6% $ XXX $ XXX $ XXX $ XXX
Year 12 = 6% $ XXX $ XXX $ XXX $ XXX
Years 13 - 15 = $ XXX $ XXX $ XXX $ XXX
XXX = Confidential portion has been omitted pursuant to a request for
confidential treatment and has been filed separately with the Commission.
Max % Price (for one
ENDWALLS Increase chamber)
-------- --------
FULL XL(SINGLE
KING QUEEN CHAMBER) DOUBLE XL
*Years 1-4 = NA Covered at 100% Covered at 100% Covered at 100% Covered at 100%
**Year 5 = NA $ XXX $ XXX $ XXX $ XXX
Year 6 = 6% $ XXX $ XXX $ XXX $ XXX
Year 7 = 6% $ XXX $ XXX $ XXX $ XXX
Year 8 = 6% $ XXX $ XXX $ XXX $ XXX
Year 9 = 6% $ XXX $ XXX $ XXX $ XXX
Year 10 = 6% $ XXX $ XXX $ XXX $ XXX
Year 11 = 6% $ XXX $ XXX $ XXX $ XXX
Year 12 = 6% $ XXX $ XXX $ XXX $ XXX
Years 13 - 15 = $ XXX $ XXX $ XXX $ XXX
Max % Price (for one
BASEPAD Increase chamber)
-------- --------
FULL XL(SINGLE
KING QUEEN CHAMBER) DOUBLE XL
*Years 1-4 = NA Covered at 100% Covered at 100% Covered at 100% Covered at 100%
**Year 5 = NA $ XXX $ XXX $ XXX $ XXX
Year 6 = 6% $ XXX $ XXX $ XXX $ XXX
Year 7 = 6% $ XXX $ XXX $ XXX $ XXX
Year 8 = 6% $ XXX $ XXX $ XXX $ XXX
Year 9 = 6% $ XXX $ XXX $ XXX $ XXX
Year 10 = 6% $ XXX $ XXX $ XXX $ XXX
Year 11 = 6% $ XXX $ XXX $ XXX $ XXX
Year 12 = 6% $ XXX $ XXX $ XXX $ XXX
Years 13 - 15 = $ XXX $ XXX $ XXX $ XXX
Max % Price (for one
CENTERWALL Increase chamber)
-------- --------
FULL XL(SINGLE
KING QUEEN CHAMBER) DOUBLE XL
*Years 1-4 = NA Covered at 100% Covered at 100% NA Covered at 100%
**Year 5 = NA $ XXX $ XXX NA $ XXX
Year 6 = 6% $ XXX $ XXX NA $ XXX
Year 7 = 6% $ XXX $ XXX NA $ XXX
Year 8 = 6% $ XXX $ XXX NA $ XXX
Year 9 = 6% $ XXX $ XXX NA $ XXX
Year 10 = 6% $ XXX $ XXX NA $ XXX
Year 11 = 6% $ XXX $ XXX NA $ XXX
Year 12 = 6% $ XXX $ XXX NA $ XXX
Years 13 - 15 = $ XXX $ XXX NA $ XXX
Max % Price (for one
TOPPERPAD Increase chamber)
-------- --------
FULL XL(SINGLE
KING QUEEN CHAMBER) DOUBLE XL
*Years 1-4 = NA Covered at 100% Covered at 100% Covered at 100% Covered at 100%
**Year 5 = NA $ XXX $ XXX $ XXX $ XXX
Year 6 = 6% $ XXX $ XXX $ XXX $ XXX
Year 7 = 6% $ XXX $ XXX $ XXX $ XXX
Year 8 = 6% $ XXX $ XXX $ XXX $ XXX
Year 9 = 6% $ XXX $ XXX $ XXX $ XXX
Year 10 = 6% $ XXX $ XXX $ XXX $ XXX
Year 11 = 6% $ XXX $ XXX $ XXX $ XXX
Year 12 = 6% $ XXX $ XXX $ XXX $ XXX
Years 13 - 15 = $ XXX $ XXX $ XXX $ XXX
<FN>
* Select Comfort pays freight back to property on 100% coverage warranty parts
** Customer will return Pumps & Chambers upon Select Comfort's request to use in
product analysis. Select Comfort will pay freight on these types of returns.
</FN>
XXX = Confidential portion has been omitted pursuant to a request for
confidential treatment and has been filed separately with the Commission.
PILLOWTOP COVER:
Warranty - 180 Days 100%
Free From Defects in Materials & Workmanship
Normal "Wear & Tear" Not Covered
Max %
Cover Increase Price
- ----- --------- ------
FULL XL(SINGLE
KING QUEEN CHAMBER) DOUBLE XL
*Days 1-180 NA Covered at 100% Covered at 100% Covered at 100% Covered at 100%
***Year 5 = NA $ XXX $ XXX $ XXX $ XXX
Year 6 = 6% $ XXX $ XXX $ XXX $ XXX
Year 7 = 6% $ XXX $ XXX $ XXX $ XXX
Year 8 = 6% $ XXX $ XXX $ XXX $ XXX
Year 9 = 6% $ XXX $ XXX $ XXX $ XXX
Year 10 = 6% $ XXX $ XXX $ XXX $ XXX
Year 11 = 6% $ XXX $ XXX $ XXX $ XXX
Year 12 = 6% $ XXX $ XXX $ XXX $ XXX
Years 13 - 15 = $ XXX $ XXX $ XXX $ XXX
<FN>
*Select Comfort pays freight on cover back to property for first 180 days.
**After 180 days customer does not have to return covers to Select Comfort.
***Property may purchase a cover at anytime through year 5 at $XXX/XXX/XXX
(King/Queen/Full XL/Double XL) per cover Note: Cover includes pillowtop cover
and entire mattress casing
</FN>
FOUNDATION:
Warranty - 10 Years 100%
Free From Defects in Materials & Workmanship
Normal "Wear & Tear" Not Covered
Customer pays freight both ways on foundations.
XXX = Confidential portion has been omitted pursuant to a request for
confidential treatment and has been filed separately with the Commission.